UPDATE 1-Ellison's BMW Oracle win America's Cup court battle

* American yacht club win legal battle with Cup holders

* BMW-Oracle and Alinghi to thrash out Cup future

(Adds Alinghi statement, background)

By Edith Honan

NEW YORK, April 2 (Reuters) - A New York State appeals court ruled Thursday that the Golden Gate Yacht Club is the legitimate challenger for the next America's Cup, ending a dispute that has lasted almost two years.

As a result, defending champion Alinghi said it was prepared to discuss terms of the next race with the Golden Gate Yacht Club, which sponsors the BMW-Oracle team.

That could mean a duel solely with Alinghi or a traditional multi-boat regatta.

New York state's highest court, the Court of Appeals, found that Swiss-based holders Alinghi was wrong to accept a challenge from Club Nautico Espanol de Vela, a Spanish team that had formed as a club just days before submitting its challenge.