WASHINGTON (AP) _ The United States plans to place Argentina among its closest military allies outside NATO, Secretary of State Madeleine Albright said Wednesday.

The designation under a 1961 law could bring Argentina more American arms and other military favors.

``This status is open other countries, including Chile,'' Albright said at a news conference with visiting Chilean Foreign Minister Jose Miguel Insulza. Chile and Argentina have a history of territorial disputes.

Nations already designated as close non-NATO U.S. allies include Israel, Egypt, Jordan, Japan and South Korea.

Albright said the announcement on Argentina ``has not yet been made but we do wish to recognize Argentina's role,'' especially in peacekeeping. An Argentine military unit serves with NATO-led peacekeeping forces in Bosnia.

The Foreign Assistance Act of 1961 gives the president authority to designate close allies, a status that unlike NATO membership does not require U.S. help in case of attack.

Major non-NATO allies can buy on from the Defense Department ``priority'' basis excess items such as ammunition and spare parts. After Jordan signed a treaty with Israel four years ago, the Clinton administration forgave almost $1 billion in debt, provided a squadron of F-16 jet fighters, 50 M-60 tanks, a C-130 transport plane and night vision goggles.

Last week the administration lifted a ban on sale of high-tech arms to Latin America. The ban was imposed in the 1970s when most of Latin America was under military rule. Almost all the region's governments are now democratic.