State Department officials are close to recommending Burma's removal from a list of "major" drug producers, allowing the Southeast Asian nation to press for significant counternarcotics funding, according to sources on Capitol Hill and people who have spoken with State Department officials.

A decision by the Bush administration to reward Burma's counternarcotics efforts would be an important psychological boost for the repressive government, experts said. Burma's ruling military junta, which has been condemned for human rights abuses, has long sought to use its counterdrug efforts to gain greater international recognition.

"This would bring the regime a great deal of prestige," said David Steinberg, director of Asian studies at Georgetown University.

A State Department recommendation would need to be reviewed by the White House, and officials at the bureaus involved in the recommendation refused to discuss the issue. But, in a speech last night, Assistant Secretary of State James A. Kelly pointed to Burmese efforts on drugs as one of the few bright spots in a "most frustrating challenge for American diplomacy."

"Burmese cooperation with the international community on narcotics issues has continued to improve in real terms," Kelly said.

Removing Burma from the list of major drug producers likely would prompt fierce complaints from members of Congress, such as incoming Senate Majority Whip Mitch McConnell (R-Ky.), who favor keeping the pressure on the Burmese leadership.

"This would be a very controversial decision," one congressional staffer said. He said Burma continues to have an ongoing narcotics problem, while the Burmese government "will view this as a broader blessing for their approach."

Adding to congressional anger, a State Department investigation has corroborated reports over the summer that the Burmese military uses rape as a "weapon of war" against ethnic civilian areas on a widespread basis, a department official said yesterday. Kelly last night said the United States is pressing for an international investigation of the rape allegations.

The administration has maintained economic and political sanctions on the Burmese government, despite the release this year of Burmese democracy activist Aung San Suu Kyi from house arrest. But Steinberg said he had detected a distinct shift in tone by the State Department this year, suggesting a greater willingness to move toward better relations with Burma.

The Burmese government also hired a high-powered lobbying firm, DCI Associates, to press its case in Washington. The key lobbyist on the Burma account, Charles Francis, is a friend of President Bush.

The State Department, in a report in March, said that Burma last year became the world's largest producer of illicit opium.

Burma is also the primary source of amphetamine-type stimulants in Asia, producing an estimated 800 million tablets per year.

But in testimony before a congressional committee in June, Deputy Assistant Secretary Matthew P. Daley appeared to lay out steps that the Burmese needed to take to win what is known as "certification" of its antidrug program, such as enforcing money-laundering laws and targeting high-level drug traffickers. He said it was possible to "pursue better communication and cooperation with Burma [on drugs] without diminishing our support for political reform and national reconciliation."

State Department officials appear to believe Burma has met the requirements laid out in Daley's testimony. But Bertil Lintner, an expert on the Burmese drug trade, said substantial evidence shows the government is linked to major drug traffickers, including joint ventures with the military and frequent meetings between traffickers and junta leaders.