The chief U.S. and European negotiators trying to harmonize the Pentagon’s GPS satellite navigation system and its future European look-alike, Galileo, expressed guarded optimism that they would be able to reach an agreement before the end of the year.

But they also said the defense-related issue that has created the most tension between the two sides in recent months remains unsettled, and even the involvement of the 19-nation NATO alliance has been insufficient to resolve their differences.

The biggest sticking point is the European Union’s stated intention to operate its Public Regulated Service (PRS) encrypted signal, which would be used by approved government agencies only, on a piece of the radio spectrum that the United States intends to use for its GPS military-code. Such a signal overlay would mean that U.S. and NATO authorities would be unable to jam Galileo’s PRS transmissions in a theater of conflict without jamming the GPS military code.

Ralph Braibanti, director of the space and advanced technology staff at the U.S. State Department, and head of the U.S. delegation negotiating GPS-Galileo issues with Europe, repeated U.S. assertions that a signal overlay is "unacceptable. We have been focused on convincing the European side that that is a terrible idea," Braibanti said here May 26 during a satellite-navigation conference organized by the International Space University. "We have talked ourselves to death on both sides, hoping the issue would work itself out."

Braibanti said it is possible that "by early fall we could have an agreement in principle" on the signal-overlay problem as well as the technical and trade issues between GPS and Galileo that the two sides are discussing. But he made no prediction that this date would be met.

Heinz Hilbrecht, director of inland transport at the European Commission and head of the European negotiating team, declined to say whether Europe was willing to design its PRS service to operate frequencies that do not overlay the GPS military code. Other European government officials say that in technical discussions in recent months, the European team has said it would be willing to permit at least a slight separation of the PRS and GPS military-code signals, but only on condition that an overall agreement on GPS and Galileo is reached.

Hilbrecht suggested that at least some overlay could be permitted without undermining the ability of the United States to conduct navigation warfare -- jamming to prohibit the use of navigation signals by an adversary.

Hilbrecht also said the European Commission has taken steps to address some of the security-related issues that U.S. officials had raised about Europe’s ability to act quickly in a time of conflict. Galileo, which is being financed and run by civilian authorities, is scheduled to be co-owned by 25 European Union member states by the time the service is available in 2008.

How quickly its managers could adjust the PRS signal, given Europe’s requirement for consensus, has been a concern of U.S. negotiators. Hilbrecht said a Galileo Security Board will manage a 24-hour crisis center to permit quick decisions about the use of Galileo, and especially PRS, in an emergency. "We are not going to have to take four weeks to discuss with member states whether we are in a crisis or not," Hilbrecht said.

The NATO alliance, while maintaining neutrality in the debate, came just one nation short of a unanimous position late in 2002 declaring the importance of the GPS military code to alliance operations. Eighteen nations, including 10 of the 11 European Union NATO members, approved the position. France dissented, despite the favorable view of its NATO delegation, said Robert G. Bell, NATO assistant secretary-general for defense support and chairman of the NATO C3 Board.

"NATO should be able to deny access to any other satellite navigation system during a conflict," Bell said. "It is the Galileo PRS service that has given NATO the most pause."

Bell said NATO was pleased that Galileo managers, who are moving forward on the design of their first satellites, have agreed to leave the PRS location open until late this year, when it will have to be set during the final design of the first Galileo satellite.