IMF says Sri Lanka loan talks in advanced stage

"We are working with the Sri Lankan government," Clinton told reporters when asked whether it was now time for the IMF to consider a loan. Clinton said that she and Sri Lanka President Mahinda Rajapakse on Thursday discussed steps that are "very important for the healing and reconciliation of the nation."

"I pledged our support and will continue to follow closely what is happening there," she said.

U.S. State Department spokesman Ian Kelly earlier told reporters that the United States wanted to see political reconciliation as well as access for aid groups such as the International Committee of the Red Cross.

"We believe that the Sri Lankans must win the peace by focusing on power-sharing arrangements with the Tamil and other minorities," Kelly said, reflecting the U.S. view that without a political accommodation the conflict will fester.