Senators, on a voice vote, approved an amendment requiring that the Buy American provisions be 'applied in a manner consistent with US obligations under international agreements'.

The change gives Canada, Mexico, the European Union and certain other major trading partners some comfort that they would be exempted from a strict requirement that all public works projects funded by the stimulus package use only US-made iron, steel and manufactured goods.

The House of Representatives has passed a nearly identical Buy America provision without such a guarantee, and President Obama has pressed for the swift passage of the plan through the Senate.

Majority Leader Harry Reid indicated a final vote could come as early as last night, according to The New York Times.

Republican Senator John McCain had urged the Senate to go further in specifically barring any Buy American provision from the stimulus package. But senators rejected his amendment by 65-31.

'The Buy American provisions...have echoes of the disastrous Smoot-Hawley tariff Act,' Mr McCain said, referring to 1930s legislation often blamed for prolonging the Great Depression.

The Emergency Committee for American Trade, an organisation of US-based corporations, and a coalition of more than 125 businesses and trade associations have also opposed the provision, warning that it could trigger trade restrictive measures around the world.

But Democratic Senator Byron Dorgan said all supporters wanted was to see US workers benefit most from public works projects funded by the stimulus plan.

'We're going to shovel a lot of money out the door of this Congress in support of economic recovery. The question is, are we going to try to put people back to work?' Mr Dorgan said.

The US has reciprocal commitments under the North American Free Trade Agreement and the World Trade Organisation to provide trading partners like Canada, Mexico, Japan and the EU with access to its government procurement market.

But other countries, including China and India, are not party to those pacts, so would not be given any protection by the new language passed by the Senate on Wednesday.

Mr Obama, asked about the Buy American provisions in television interviews on Tuesday, said the United States had to be careful not to 'trigger a trade war'. 'I think it would be a mistake...to start sending a message that...we're just looking after ourselves,' he told Fox Television.

US steel companies and workers who have seen demand plummet as a result of the recession have pressed hard for a Buy American provision, arguing that US tax dollars to fund public works projects should be used to create American jobs.

But Mr John Bruton, the EU ambassador to the US, said this week that approval of such a measure would damage Mr Obama's global leadership.

Canada's Ambassador to the US Michael Wilson also has urged Congress to drop the provision, and Japan and Australia yesterday joined the chorus of voices warning against protectionism.

But lawmakers from steel-producing states insisted on Wednesday that the 'Buy American' plan remain part of the huge US economic stimulus Bill.

'If it's not in, I'm not supporting this package and I'll bring a lot of votes with me,' House of Representatives Transportation Committee chairman James Oberstar, a Democrat, said.

REUTERS, AGENCE FRANCE-PRESSE