"I cannot elaborate on the sweetener, but I think we have made reasonable offers," European Commission spokesman Fabio Fabbi told reporters after talks in Vienna on the International Thermonuclear Experimental Reactor (ITER).

The two-day talks over Monday and Tuesday failed to choose a site for ITER with Japan insisting in public that it still wants the project to be located at its northern village of Rokkasho-mura.

But the EU believes that Japan and the United States are no longer categorically ruling out the French site at Cadarache to build a reactor that would emulate the sun's nuclear fusion to generate inexhaustible electricity.

"We have reason to say that the Japanese have not flatly refused this position, although not endorsing it openly. Other delegations that have been supporting the Japanese candidate site have kept a similar line," Fabbi said.

"That's cause for some optimism," he said.

The talks in Vienna grouped officials from Japan and the EU along with the project's other backers: the United States and South Korea -- which have supported the Japanese bid -- plus Russia and China, which back the EU bid.

No date has been fixed for another round of negotiations, but sources here said that the European Commission would decide on Tuesday whether to press ahead with ITER with as much backing as possible at Cadarache.

"The most likely hypothesis is still for us to continue with six partners, but Japan must be made aware that we cannot prolong the negotiations indefinitely," one EU source said.

EU ministers for science and research will debate the commission's recommendations at their next meeting on November 26.

Fabbi, without specifying what the EU is offering Japan, said the 25-nation bloc had always believed the ITER project should adopt a "broader approach to meet the needs of (nuclear fusion) research across the world".

The ITER budget is projected to be 10 billion euros (13 billion dollars) over the next 30 years, including 4.7 billion euros to build the reactor. The EU plans to finance 40 percent of the total.

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