Japan and the United States will hold working-level talks Saturday aimed at settling a bilateral beef trade dispute, Chief Cabinet Secretary Yasuo Fukuda said Thursday.

The dispute centers on Japan's refusal to lift its ban on U.S. beef imports that was imposed after the first, and only, case of mad cow disease was discovered in the U.S. in December. The U.S. has offered certain beef-testing options, but none has satisfied Tokyo.

The two countries last held formal talks over the dispute in January, but failed to narrow their differences.

Fukuda did not elaborate, but Japanese government sources said the two governments are expected to agree to set up a working group on the matter during Saturday's talks.

U.S. Undersecretary of Agriculture J.B. Penn will head the U.S. delegation with working-level officials from the Department of Agriculture and the Department of Health and Human Services, according to Fukuda.

On the Japanese side, working-level officials from government bodies such as the Food Safety Commission and the Agriculture, Forestry and Fisheries Ministry will attend the weekend meeting.

Japan, the world's biggest buyer of U.S. beef, stopped importing U.S. beef following the discovery of mad cow disease in a Canadian-born cow in the U.S.

It has urged Washington to test all slaughtered cattle to be shipped to Japan to address safety concerns among Japanese consumers.

Japan has rejected arguments in a U.S. trade report stating that testing of all slaughtered cattle is not necessary to protect against mad cow, and will retain its ban on imports of U.S. beef until such testing is carried out.