Tuesday January 28 2:09 PM EST

WASHINGTON (Reuter) - A U.S. delegation is in Beijing seeking concessions on human rights that could make it unnecessary for the United States to sponsor again this year a U.N. resolution faulting China's policy, U.S. officials said Tuesday.

The talks, set for Wednesday and Thursday, occur just as the United States is preparing to release on Thursday its annual report on human rights worldwide that as usual hits Beijing hard for rights abuses, the officials said.

This year's China report states that by the end of 1996, there were no active dissidents left in China who had not been jailed or exiled, officials and other sources told Reuters.

Human rights is one of the most sensitive issues between China and the United States. Over the past year the two governments have worked hard to stabilize bilateral ties and manage their serious differences in a constructive way.

Issuance of the human rights report and the looming decision on whether to pursue a resolution at the U.N. Human Rights Commission criticizing Chinese practices pose an early challenge for new Secretary of State Madeleine Albright, who has said China will be a priority.

The commission meeting runs from March 10 to April 18.

Internal adminstration debate on how to balance rights with other issues on the U.S.-China agenda including Taiwan, trade and arms sales has been intense.

Albright has vowed to "tell it like it is" to China on human rights but also said relations will not be held hostage to any one issue. She has said she would go forward with the annual U.N. resolution if there is no progress in Beijing's record.

Although she espouses the adminstration goal of wanting to integrate, not isolate Beijing, her more forward-leaning public statements on human rights has raised hopes among rights advocates that she will promote a more aggressive U.S. approach toward China.

During his last trip to Beijing in November, former Secretary of State Warren Christopher took great pains to play down human rights. Albright may stop in Beijing on an around the world trip of major capitals being planned for next month.

The U.S. team now in Beijing is led by Sandra Kristoff, the National Security Council's chief Asia expert. The team is seeking a significant gesture from China on human rights.

In a memo sent to the European Union recently and obtained by Reuters, the adminstration said it was continuing to talk with the Chinese "about what meaningful, concrete steps they might take to avoid confrontation in Geneva."

These steps are releasing political prisoners needing medical attention, signing and submitting for ratification two international human rights covenants and resuming talks with the International Red Cross on allowing prison visits.

The administration urged the Europeans to "press these specific issues in your contacts with the Chinese" and stressed the importance of joint action, the memo said.

Experts said if China does not offer some credible gesture on human rights this week, the administration would seem to have little choice but to sponsor the U.N. resolution.

Rights advocates fear if the administration delays action much longer, it will not have the time to generate political support for the resolution's adoption. Unified action with Europe is seen as essential to success.

Last week China suddenly offered to resume on Feb 14 in Singapore a long-stalled dialogue with the European Union on human rights. That has effectively delayed a European Union decision on the issue until foreign ministers meet Feb 24.

Mike Jendrzejczyk of Human Rights Watch/Asia said that in 1996 "China used trade and aid deals all over world to keep the (human rights) resolution from coming up for debate and a vote and they are already beginning to lobby intensively" this year to again keep the resolution from moving forward.

He stressed that if the United States and Europe continue to delay making a decision on whether to pursue the resolution, "this is a recipe for disaster. By delaying, Europe and the United States are playing into China's hands."