The United States said on Wednesday no deal had been reached so far in talks to settle a tax evasion dispute with UBS AG and it expected a trial against the Swiss bank to go ahead as scheduled on Monday.

The case marks the biggest challenge yet by a foreign government to Switzerland's long and jealously guarded tradition of bank secrecy.

U.S. authorities are expected to use the trial to demand enforcement of a summons ordering UBS to turn over the details of accounts suspected of being used by thousands of wealthy Americans to evade U.S. income taxes.

The parties, and that is primarily the Swiss government and the United States government, have been discussing settlement but no agreement has been reached, said Stuart Gibson, an attorney for the U.S. Justice Department's tax division.

The government plans to continue talking but the United States' position is that the court should proceed to hold the hearing next week, he said in a status conference call with the Florida federal court judge presiding over the case.

Judge Alan Gold agreed to hold another status conference on Friday, to allow the parties to see whether a deal could be reached or an additional delay was necessary. But he said he was otherwise prepared to proceed with the trial on Monday.

A trial against UBS was set to begin in Miami on July 13, but Gold had agreed to delay it until August 3 to allow time for a settlement.


In his comments on the conference call, Gibson took issue with a claim by Eugene Stearns, an attorney for UBS, who said he saw no point in proceeding to trial if the litigants were just literally minutes away from achieving an agreement.

I would be derelict if I agreed with Mr. Stearns' characterization ... I don't think that that's the case, Gibson said, after saying the U.S. government was uncertain about the possibility of reaching any out-of-court settlement.

He offered no details on the obstacles to an agreement, but UBS itself later issued a statement saying productive discussions so far had failed to produce an accord.

UBS continues to believe that this is a matter best resolved in direct discussions between the respective governments and is committed to supporting the process, the statement said.

The case is expected to figure prominently in talks between U.S. Secretary of State Hillary Clinton and Swiss Foreign Minister Micheline Calmy-Rey at a meeting scheduled for Friday.

(Reporting by Tom Brown; Editing by Pascal Fletcher and Maureen Bavdek)