WASHINGTON, April 5 (AP) - While stopping short of meeting Beijing's demand for an apology, President Bush on Thursday for the first time publicly expressed regret for the midair collision that triggered a diplomatic standoff over a U.S. Navy spy plane and its crew.

The president's comments came as U.S. officials reported "encouraging signs" had emerged during intensive discussions with Chinese officials aimed at securing the release of the plane's 24-member crew.

Addressing newspaper editors amid a flurry of diplomatic initiatives aimed at resolving the impasse, Bush said, "I regret that a Chinese pilot is missing and I regret that one of their planes was lost."

At the same time, the president said China must allow the crew members to come home.

"We are working all diplomatic channels. ... The Chinese have got to act and I hope they do so quickly," he said.

Bush declined further comment about intensive discussions between U.S. and Chinese officials aimed at securing the release of the crew.

While China welcomed American expressions of regret, but also called the American crew lawbreakers, saying they would remain in China for interrogation.

Washington has ruled out an apology, saying the U.S. crew did nothing wrong. Secretary of State Colin Powell said Wednesday he regretted the loss of the missing Chinese pilot, who is feared dead, but said it was time to move on.

China reacted with a mixture of encouragement and toughness, a strategy designed to push the Americans towards a full apology and acceptance of wrongdoing. Only that, China maintains, will end the impasse.

``The regret expressed by the U.S. side is a step in the right direction to solving this question,'' said Foreign Ministry spokesman Sun Yuxi, in China's first response to Powell's remarks.

``As for the next step in handling this issue, the key is for the U.S. side to adopt a cooperative attitude, admit its mistakes and make a formal apology,'' Sun said.

Sun gave no sign that the U.S. Navy EP-3E's 24 crew members would be released soon, despite warnings from Bush that China risks undermining relations by continuing to hold them. Sun said the collision was still being investigated.

``The U.S. crew violated international law,'' Sun said.

Asked whether the 21 men and three women were being questioned, Sun said: ``They have caused this air collision incident and they also entered illegally into China's airspace. It is fully natural for competent authorities in China to question them about this incident.''

Sun said he didn't know which authorities were doing the questioning.

The crew have been held on Hainan island in the South China Sea since making an emergency landing at a Chinese military base there Sunday after the collision.

U.S. diplomats waiting on Hainan have been granted just one meeting with the crew and are pressing for another. Sun said the crew were safe and well and that China would consider another visit ``if the U.S. side takes a cooperative approach.''

``We're working hard for the immediate release of the crew. We're working hard for access,'' said one of those diplomats, Army Brig. Gen. Neal Sealock, the U.S. Embassy defense attache.

On Thursday, U.S. diplomats handed over books, magazines and snacks to Chinese officials and assumed that they were delivered to the crew, said Mark Canning, one of the diplomats. Clothes and toiletries were handed over Wednesday.

U.S. Ambassador Joseph Prueher was in touch with Chinese officials throughout the day, said a U.S. Embassy spokesman, speaking on condition of anonymity. He would not say with whom Prueher talked.

In Beijing, armed police detained several Chinese protesters outside the walled U.S. Embassy compound on Thursday -- an indication that the government does not want public anger over the incident to spill into the streets.

``We don't want American money, we want dignity,'' one man wrote in Chinese on a large piece of cardboard before he was led away. ``Give us back our Chinese pilot. Blood debts must be repaid in blood.''

Perhaps to forestall protests, police had tightened security near the compound. Police vans were parked nearby. Guards questioned several passers-by.

Shen Guofang, China's deputy ambassador to the United Nations, said an American apology wasn't a precondition for starting talks on the incident.

``But this is what they should do,'' Shen said.

Chinese Foreign Minister Tang Jiaxuan said Wednesday that Beijing wanted to resolve the incident ``as soon as possible.'' But he emphasized that China would protect its ``sovereignty and dignity.''

White House spokesman Ari Fleischer said, ``The United States government doesn't understand the reason for an apology. ... Our airplane was operating in international airspace and did nothing wrong.''

China insists the U.S. plane caused the crash about 60 miles south of Hainan. A massive search has failed to find the missing pilot, identified as Wang Wpei.

China's wholly state-run media were restrained in its initial reporting of the incident. But as the standoff continues, state media have become more critical of the United States.

On Thursday, the Xinhua News Agency said the pilot's wife, Yuan Guoqin, expressed outrage at the U.S. plane's ``hegemonist acts.''

``Wang Wei, our son and I are waiting for you,'' the People's Daily and other state media quoted Yuan as saying. ``Chinese and American lives are equally precious.'' The couple have a 6-year-old son.

China and the United States agree that the EP-3E was flying in international airspace when it collided with one of two Chinese F-8 fighters sent to track it. Such U.S. flights are meant to gather information on China's military by recording radio, radar and other signals.

In their only meeting with U.S. diplomats since the crash, the crew of the U.S. spy plane indicated they destroyed at least some of the intelligence-gathering equipment and data aboard the plane before it landed. U.S. military officials said they believe Chinese officials boarded the plane and examined its equipment despite American objections.

Winston Lord, former U.S. ambassador to Beijing, said he feared things could worsen if the Chinese do not release the U.S. crew.

``The longer they hold onto this crew, the more the pressure's going to build up on the president,'' said Lord, also a former U.S. undersecretary of state for Asia. ``I don't think we've quite crossed the line into a crisis, but every day and every development gets us a lot closer to it.''

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