The European Union narrowed sharp differences over the scope of defence integration.
Diplomats said there was now wide acceptance that the EU needs its own military planning capabilities for crisis operations, but a proposal to set up a full-scale agency independent of NATO have now effectively been ruled out.
"There was a fresh breeze today," Belgian Defence Minister Andre Flahaut said after meeting his EU counterparts at on the outskirts of Rome. "There is indeed some progress."
The EU, which is building a 60,000-strong force for crisis operations, launched its first operations this year in Macedonia and Democratic Republic of Congo and hopes to take over NATO's Bosnia peacekeeping mission in 2004.
But its current military staff of about 190 officers does only broad strategic rather than operational planning.
France, Germany, Belgium and Luxembourg agreed in April to establish a planning and command staff at Tervuren, a Brussels suburb, for EU operations in which NATO is not involved.
The United States has repeatedly criticised the proposal - which came from four of Europe's most outspoken critics of the US-led Iraq war - describing it as a challenge to NATO's "pre-eminence" as guardian of the continent's security.
Its closest European ally, Britain, also rejected the plan as wasteful of scarce military resources.
"What worried us was that there might be some ... duplicative capacity established on an institutional basis," said NATO Secretary-General George Robertson, an observer at the two-day meeting.