An American diplomat met Friday with the detained crew, and the United States won a promise for another meeting this weekend and regular meetings until the impasse over the crew and their plane is resolved.
Sources say Chinese President Jiang Zemin, who is traveling in South America, is considering a deal under which the United States would say it is sorry for the loss of the Chinese pilot.
The crew would then be released and the incident turned over to a joint U.S.-China commission where the two sides could argue about who caused the accident.
After the commission's first meeting, the plane itself would be released.
The Chinese ambassador returned to the State Department Friday evening but only stayed for about 15 minutes. Afterwards a spokesman said there would be more talks Saturday both in Washington and in Beijing.
U.S. officials are concerned the Chinese may make an eleventh-hour demand that the United States pay damages for the loss of the plane and pilot, which would send the negotiations back to square one.
However, leading U.S. officials sounded upbeat Friday.
"We're working hard to bring them home through intensive discussions with the Chinese government and we think we're making progress," said President Bush.
Secretary of State Colin Powell said he was encouraged by the negotiations now under way, saying he believes there has been "movement" towards agreement by the two sides.
The meeting between the crew and the American diplomat on Hainan island in the South China Sea was the second since the EP-3E spy plane made an emergency landing Sunday after a collision with a Chinese fighter jet. The Chinese pilot is missing and presumed dead.
The crew and American diplomats met for the first time Tuesday. U.S. officials have complained of lengthy delays in arranging access to them.
After Friday's meeting, the U.S. Embassy military attache, Army Brig. Gen. Neal Sealock, said, "The crew is great spirits. They are all together and are looking forward to being released and returning home."
Sealock said visiting diplomats had checked the health of the crew and confirmed that they had received books, toiletries and other supplies passed to them via Chinese officials. The general would not say how long the meeting lasted or where it was held.
There was initial confusion over whether the meeting was being held or not, but it turned out Sealock had merely spent a lengthy time with Chinese officials before seeing the crew.
Afterwards, Mr. Bush talked by phone with Sealok and got a first-hand account of the meeting.
"They're housed in officers quarters and they're being treated well," the president said.
Mr. Bush expressed regret Thursday for the Chinese pilot, echoing an earlier statement of regret by Powell.
China blames the U.S. plane for the collision, about 60 miles southeast of Hainan. It has welcomed the expressions of regret, but stuck to its demand for an apology a demand that Washington has refused.
China has questioned the crew of the EP-3E, though both sides agree it was in international airspace when it collided with one of two Chinese F-8 fighters sent to track it.
Beijing accuses the U.S. plane of violating its territory when it made the emergency landing on Hainan island.
Indeed, the news that the diplomats are talking is not being reported in China. Instead, China's media Friday launched a propaganda onslaught against the United States unlike anything seen since the collision, reports CBS News Correspondent Barry Petersen.
The wife of the missing pilot, hospitalized with exhaustion, delivered an emotional barrage to state television viewers reflecting China's official line.
"We deeply love each other," she said of her husband, adding, "My husband's plane was crashed by the United States plane."
Wang's father also appearedtelling viewers he missed his son, part of what a television commentator dubbed, "Condemnation of the U.S. from people from provinces across the nation."
Zhao Yu, the pilot of the other Chinese jet tracking the American plane the day of the collision, told a Chinese television interviewer, "I'm furious at the atrocity committed by the U.S. right on our doorstep."
He heatedly repeated China's contention that the U.S. plane purposely veered left.
"I saw the nose of the U.S. spy plane hit Wang Wei's plane. The left outer propeller shattered his tail," he said. "The pieces flew through the air like small pieces of paper."
While U.S. officials sharply disagree with that version of events, some say Zhao may have saved the lives of the American crew.
U.S. officials say after the collision he led the badly damaged navy plane to the Chinese base and made a pass over the runway to show it the proper direction in which to land.
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