"The combination of American and British Airways would result in air travelers paying significantly higher fares for travel between the United States and Great Britain," assistant attorney general Joel Klein said in comments filed with the department of transportation.

"From a competitive point of view, this is a troubling alliance and therefore only a very strong remedy could possibly justify its approval," he added.

Specifically, he said the alliance should not be approved unless "sufficient" takeoff and landing slots at London's Heathrow Airport are made available so rival airlines can provide new trans-Atlanticservices to the United States.

British Airways responded by saying the department had not taken into account the benefits of the deal."The Department of Justice analysis seems to seriously underestimate the competition benefits of a UK-US. "Open skies" agreement and the need for more competition between global alliances," BA said in a statement.

Despite the harsh tone of the justice department's statement, industry analysts said it did not necessarily indicate a toughening of the US stance against the alliance and that European regulators still pose a greater threat.

"They've said it before and they've said it again, and it's a statement of the obvious ... It is broadly understood that the proposed alliance can only move forward under certain conditions," said Samuel Buttrick, an analyst with Paine Webber in New York. "The EU hurdle appears to be higher."European anti-trust chief Karel Van Miert is pushing for American and BA to surrender as many as 350 weekly landing and takeoff slots at Heathrowbefore the deal can be approved.

The two carriers are believed to be hoping they can get away with giving up less than 300 slots, and possibly as few as 250. The European Commission is expected to announce its decision on the alliance next month.

In its recommendations made public on Thursday, the justice department appeared to be demanding no more, and possibly less, than the European Commission.

"The department concluded that .... the DOT should require slots and related facilities sufficient to operate at least 24 additional daily round-trips between the US and Heathrow Airport be made available to competitors to American Airlines and British Airways," it said. American jumped on that comment, saying it indicated a positive sign of flexibility.

"Of particular interest is (the) finding that while Heathrow slots need to be made available for more service and competition, slot divestiture by American or British Airways should not be a requirement for approval, as long as slots are made available," theFort Worth, Texas-based carrier said.

Rival airlines have urged that the alliance be rejected completely, or at least that American and BA be forced to sell their own slots to allow others a space at Heathrow for service to the United States. But American and BA insist the slots could be found elsewhere without forcing them to sell theirs.

Officials at American said they were neither surprised nor discouraged by the justice department's comments. "It is a signal that there are ways to get this done," spokesman Chris Chiames said.