The Obama administration has assured Switzerland that it understands the importance of resolving Swiss concerns over a legal case involving Swiss bank UBS, a U.S. Treasury official said on the weekend.

Swiss President Hans-Rudolf Merz, whose country is famous for strict bank secrecy, told a news conference on Saturday after he met U.S. Treasury Secretary Timothy Geithner that Geithner seemed sympathetic to his call for the United States to drop the case in return for a new tax accord between the two countries.

His answer was that he will reflect about this question, that he understands from his point of view that I was raising this question, Merz said. He couldn't of course answer immediately but I felt that his bias was to study about that.

Asked about Merz's remarks, a Treasury official provided a measured assessment of Geithner's comments.

The secretary listened to the Swiss concerns regarding the UBS case and indicated that he understood the importance of appropriately resolving the matter, the official said.

While Merz linked his call for the United States to drop the UBS case to the pending new tax accord, he did not specify whether Switzerland might refuse to sign the accord if the case was not dropped.

But any such accord must be adopted by lawmakers in both countries and possibly put to a referendum in Switzerland, where it could stumble if the U.S. tax evasion case was still hanging over UBS, Merz said.

I think Mr. Geithner is conscious of the fact that these criminal procedures that are taking place in the United States could be an obstacle to the political process of the double taxation accords, Merz said.

This is why I proposed that the criminal proceedings be withdrawn at the time of signing of such an accord.

Geithner said earlier this month that the United States would begin negotiations with Switzerland to revise a 1996 bilateral tax treaty so the two countries can exchange information for tax purposes in accordance with standards set by the Organization for Economic Cooperation and Development.

UBS agreed recently to pay a $780 million fine and disclose the identity of about 300 of its U.S. clients to avert criminal charges. However, U.S. authorities are still pursuing it, seeking to access the data of another 52,000 Americans they say are hiding about $14.8 billion in assets in Swiss bank accounts.

Geithner and President Barack Obama have stated their commitment to tackling the issue of tax shelters and to cracking down on efforts to evade U.S. taxes, most recently at a Group of 20 summit in London on April 2 .

(Reporting by Glenn Somerville and Brian Love, Editing by Chizu Nomiyama)

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