Microsoft executives are in Washington this week to meet government prosecutors and discuss the possibility of settling the antitrust case against the company, a source familiar with the talks said yesterday.

Microsoft executives will meet officials from the Justice Department's antitrust division and representatives of the 18 state attorneys general pressing the case against the software colossus, the source said.

The talks come after a ruling by a federal appeals court, which overturned a lower court's order that Microsoft be broken into two firms but upheld findings that it abused its monopoly in the market for PC operating systems.