Senate aide says progress made on U.S. bailout talks

WASHINGTON (Reuters) - Staff negotiators made progress in negotiations on the $700 billion financial industry rescue plan in talks that ended very early on Saturday morning, and were to resume after a rest, a Senate Republican aide said.

Negotiators had narrowed the list of items that remain unresolved to less than a dozen, and there could be a meeting of Senate members as early as mid-afternoon on Saturday.

Talks on Thursday had collapsed in acrimony. A second day of intense negotiations on Friday between Democrats and Republicans failed to produce accord on how to structure a deal allowing the government to buy up soured assets that are choking credit.

(Reporting by Richard Cowan, writing by Patricia Zengerle; editing by Sandra Maler)