BRUSSELS (Dow Jones) - The European Union wants to relaunch bilateral negotiations with the U.S. on how to resolve a bitter row over state aid to rival aircraft makers Boeing (BA) and Airbus (ABI.YY), an E.U. spokesman said Thursday.

"We are exploring the possibilities of relaunching negotiations," E.U. trade spokesman Peter Power told Dow Jones Newswires. "But we have to agree terms for such negotiations, and unfortunately we're not there yet."

Earlier Wednesday, Boeing's Jim McNerney told journalists in Paris there are " signs that the two governments ( Washington and Brussels ) are increasing the pace of their dialogue, and I'm supportive of that."

Both the E.U. and U.S. have insisted for months that they want a negotiated solution to the row. Both warn that leaving the row to be decided by a legal panel at the World Trade Organization will take years and end up with further appeal battles. There are also concerns that a WTO ruling could hurt both sides, wrecking their ability to give subsidies to their aircraft makers and giving a leg up for rising aircraft stars in countries such as Canada and Brazil .

"The United States wants to resolve this important and complex dispute," said Christin Baker, spokeswoman for U.S. Trade Representative Rob Portman , who heads the US side of the row. "Clearly, a negotiated solution that delivers a good result is preferable to endless litigation." (MORE TO FOLLOW) Dow Jones Newswires 05-03-06 0843ET Copyright (c) 2006 Dow Jones & Company, Inc.