Foreign Minister Micheline Calmy-Rey and US Secretary of State Hillary Clinton have welcomed an agreement in principle to settle charges against bank UBS.
The Swiss bank was facing legal action by the US Internal Revenue Service (IRS), which wanted it to hand over the confidential information of 52,000 clients.
Calmy-Rey met Clinton in Washington, DC on Friday, after the US Department of Justice and the Swiss government hammered out a deal that would have UBS deliver a substantially smaller number of names.
US authorities asked a Florida judge to call off the trial, scheduled for Monday.
"Our governments have worked very hard to reach this point," said Clinton. She did not elaborate.
A representative of the US Department of State said the two sides were "relieved and pleased" with the news of a settlement.
"The prospect of a conflict between the laws of the United States and those of Switzerland could have an effect on the very strong bilateral relationship," said P.J. Crowley.
Switzerland's government had heavily involved itself in the case, arguing that compelling UBS to release the records would force it to choose between violating either Swiss law or the US ruling.
Switzerland's foreign ministry said that Calmy-Rey and Clinton used the meeting to broach a host of bilateral and international issues apart from UBS. US authorities had indicated prior to the meeting that discussion of the case would be limited.
No special timing
The timing of the talks was unrelated to the UBS trial, the foreign ministry confirmed, adding that they had been planned long in advance.
Lars Knuchel, the head of communications for the foreign ministry, told swissinfo.ch that Clinton, the US's top diplomat, did not criticise Switzerland during the meeting.
Last year Calmy-Rey raised the ire of the US when she travelled to Tehran to sign a multi-billion franc natural gas deal.
Before the talks, Clinton thanked Switzerland for representing the US's interests in Iran. Switzerland has held that responsibility since 1980.
She also noted the Swiss role in mediating prolonged disputes including the one between Armenia and Turkey.
Said Clinton: "We welcome the participation of Switzerland and its support on many important global issues."
The counterparts also discussed the situation in the southern Caucasus and in the Middle East, two areas where Switzerland and the US have interests.
A Swiss diplomat in Georgia is leading a fact-finding mission commissioned by the European Union into that country's conflict with Russia last August. Georgia, a former Soviet republic, is an ally of Washington.
Knuchel pointed out that Switzerland had presented a proposal to the United Nations Security Council on the coordination of humanitarian assistance in Gaza.
Calmy-Rey and Clinton also discussed the Geneva Initiative, an alternative Middle East peace plan championed by Calmy-Rey. Knuchel declined to comment on whether the US had shown an interest in the proposal.
The meeting ended without a press conference. Knuchel said that although the Swiss wanted one, Clinton's camp said time was too tight.
Calmy-Rey and Clinton last met in March, in Geneva. While in the US capital, Switzerland's foreign minister also met Don Beyer, the incoming US ambassador to Bern.
swissinfo.ch, Rita Emch in Washington, DC (Adapted from German by Justin Häne)
The United States is one of Switzerland's most important partners and Switzerland's main trading partner outside Europe,
The US is also the main destination for Swiss direct investment.
Swiss exports in 2008 to the US totalled close to SFr21 billion ($19 billion).
Imports stood at nearly SFr11.5 billion.
In recent years, the two sides have strengthened their relationship.
In 2006, Switzerland and the US inked agreements on combating terrorism and on a trade investment forum.
Switzerland has swissnex science and technology outposts in Boston and San Francisco.
The country has been representing US interests in Iran since 1980.
By the end of 2008, there were 74,862 Swiss nationals registered in the US including 53,473 with dual citizenship.
UBS and the US
On May 14, 2008, former UBS employee Bradley Birkenfeld and a Liechtenstein businessman were charged by the US authorities with helping an American billionaire avoid paying taxes on $200 million of assets deposited in Swiss and Liechtenstein bank accounts.
Birkenfeld turned whistleblower, giving details of UBS private banking practices to US prosecutors.
In July, a Miami court authorised the IRS to issue a summons on UBS demanding the release of confidential information on clients the agency suspected of tax evasion.
In the same month, UBS told a congressional hearing that it would stop offshore banking activities for US clients.
UBS agreed to pay $780 million and name some United States clients to resolve criminal fraud charges against it.
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