Secretary of State Colin Powell has been involved in intensive mediation in an effort to ease the rift between Spain and Morocco over the contested Mediterranean island off the Moroccan coast.

The territory at issue in the dispute is minuscule. But it involves an important U.S. NATO ally, Spain, and a moderate Arab state, Morocco, with long-standing good relations with the United States and a key role in regional peace efforts.

Officials here say Secretary of State Powell has been involved in intensive contacts with the two sides, speaking by telephone twice Friday with Morocco's king Mohammad and three times with Spanish Foreign Minister Ana Palacio. State Department spokesman Richard Boucher said the aim of the U.S. effort is to return the situation to what it was before Morocco put troops on the tiny island last week, only to be evicted by Spanish forces on Wednesday.

"We've been working this, as you can understand, very closely with the parties," Mr. Boucher said. "We remain hopeful that a resolution of these issues can be reached on the basis that we've been talking about. That is, on the basis of returning to the status quo ante: the way things were before."

Both sides have expressed interest in settling the issue peacefully and U.S. officials say they hope a settlement is imminent.