BHOPAL, INDIA -- Union Carbide Corp. and the government of India say they have failed to agree on an out-of-court settlement in the Dec. 3, 1984 gas leak that killed more than 2,800 people and injured more than 200,000.

District Judge M.W. Deo said he would consider a request for interim relief to help surviving victims of the world's worst industrial accident.

"I have been really moved by the fact that the third anniversary of the disaster is drawing close," Deo said.

The government initially filed suit for $3 billion in damage from the U.S.-based multinational firm. Two weeks ago, sources close to the negotiations said the two sides were close to agreement on a $500 million out-of-court settlement. The sources spoke on condition of anonymity.

But attorneys last week told Deo they had not reached an agreement.

In the three years since methyl isocyanate, a liquid chemical used in making pesticide, leaked from a tank at the Union Carbide subsidiary plant in Bhopal, lawyers have been arguing in and out of court.

After reporting they were near agreement, the two sides failed to meet two court-ordered deadlines for a settlement, on Oct. 30 and Nov. 18.

Deo said he will conduct a hearing Dec. 21 on Union Carbide's request that the court consider additional preliminary statements in the case. He said further hearings will start Jan. 11 and continue on a day-to-day basis.

The case has been delayed by legal and political maneuvering. Deo's predecessor was removed from the case for conflict of interest after it was discovered that he claimed to be a gas victim.

Union Carbide lawyer Fali Nariman told the court he might oppose interim relief to gas victims. He noted that such a proposal was made in April and Union Carbide then suggested the case be settled out of court.

"But now everybody seems to oppose an out-of-court settlement, and we are back to the legal issues," Nariman said.

An out-of-court settlement could allow Union Carbide to escape standing trial to determine its liability in the gas leak.

The government says the disaster was caused by negligence on the part of Union Carbide. The company, based in Danbury, Conn., blames the leak on sabotage by a disgruntled employe.

The latest petition for interim relief was filed by the Poisonous Gas Episode Struggle Front, one of several activist groups that oppose an out-of-court settlement. One of their arguments is that it is too soon to determine long-range medical effects of exposure to methyl isocyanate.

A few hundred gas victims staged a sit-in outside the court during last week's court session. They said they oppose any "unjust" settlement.

The state government of Madhya Pradesh in central India says it has counted 2,850 gas deaths and has received personal damage claims from 524,000 people.

Many claimants cited mental anguish caused by worrying about the fate of loved ones, government officials said.

The government says 20,000 people were severely injured by the gas and about 185,000 others were affected but not permanently disabled.