MADRID (AFP) - The EU and the US have made progress on reaching a deal on a binding agreement on data sharing aimed at fighting terrorism and crime, US Homeland Security Secretary Janet Napolitano said Wednesday.

"Last week an EU-US high-level contact group identified a core set of common principles that unite our approaches to protect personal data while processing and exchanging information amongst law enforcement authorities," she said in an address to an international conference in Madrid.

"The next step is a binding US-EU agreement on data sharing and privacy," she added.

Data-sharing deals between the European Union and the United States have so far been made on a case-by-case basis.

Officials on both sides of the Atlantic have sought to boost information sharing in the wake of the September 11, 2001 attacks in the United States as a way to thwart fresh attacks as well as organised crime.

"The US and most European countries have found that this cooperation has paid dividends in the form of preventing terrorist incidents, detaining criminals and preventing illegal immigration," said Napolitano.

But reaching a formal bilateral agreement between the two sides over the issue has reportedly been hampered by questions over what impact a deal would have on private companies' obligations during data transfers as well as over the adequate length of time that shared data should be retained.

The EU has also expressed concern about how data it shares with the United States might be passed on to third countries which do not have acceptable data protection rules.

Hundreds of privacy experts from around the world met in Madrid Wednesday for the three-day International Conference of Data Protection and Privacy.