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DOHA (Reuters) - Trade negotiators have narrowed differences on how to reconcile protection for rich countries' patents on medicines with poor countries' demands for access to cheap drugs to tackle epidemics such as AIDS, a senior U.S. official said on Monday.

The emotive dispute has dominated the conference of the World Trade Organization (WTO) in the Gulf state of Qatar, where ministers are hoping to launch a new round of negotiations to lower barriers to global commerce to reach a better sense of convergence,'' the official told reporters. ``I think yesterday was a day of good progress on that.''

The official reported progress, too, toward an agreed agenda for new trade talks, saying he was cautiously optimistic that remaining differences could be overcome before the WTO conference ends on Tuesday.

``We see pieces starting to fall into place but there is still a ways to go,'' said the aide, who declined to be identified.

The issue of patent rules -- known as Trade-Related Aspects of Intellectual Property Rights, or TRIPS in WTO jargon -- has bitterly divided developed and developing countries.

WTO officials see resolving it as essential to correcting the image that freer trade favors the rich over the poor.

Developing countries, led by Brazil and India, are seeking a waiver on public health grounds of rules that guarantee 20-year patents on medicines.

They say they cannot afford the costly drugs needed to treat millions suffering from diseases such as AIDS and malaria, and must be able to make or import cheap generic versions without fear of litigation from drug companies or the WTO.

Led by the United States, industrialized countries are reluctant to provide a waiver, fearing its impact on other patents and a threat to the $300 billion-a-year drugs industry.

Washington has proposed giving the least developed countries a 10-year extension until 2016 to implement TRIPS and a five-year moratorium on contesting any drug patent actions taken by sub-Saharan Africa.

Critics say the U.S. stance has been undermined somewhat by its threat to override patents on Bayer AG's Cipro to protect its citizens in the current anthrax scare. The government later bought the drug from Bayer in bulk at a big discount.