By CNN State Department Producer Elise Labott

                  WASHINGTON (CNN) - The Bushadministration is in the process of
                  designing an expansion of Plan Colombia, into a regional-wide plan for
                  Colombia's neighbors in the Andes, US, Colombian and other Latin American
                  officials tell CNN.

                  As the US assists Colombia with its counter-narcotics efforts, Colombia's
                  neighbors in Ecuador, Peru and Bolivia are worried that rebels will begin drug
                  cultivation across Colombia's borders.

                  The neighboring economies are fragile, and poor citizens living in squalor along
                  the border would see an incentive to join the rebels with drug production.

                  The original US commitment to Plan Colombia for Bogota's neighbors was $180
                  million. But a senior official tells CNN that while the "actual numbers" are not
                  worked out yet, President Bush's 2002 budget will see a "major increase" in
                  programs for Colombia's neighbors, and "some countries could see an increase
                  in US aid by two or even three times."

                  US officials say they have solicited ideas from Andean countries on how they would develop
                  their borders to strengthen, democracy, human rights and their justice and law enforcement
                  programs. One senior State Department official said the plan won't be "one size fits all," but rather
                  will be "tailor made" for each country -taking into account the "commonalties" of problems endemic
                  to the region.

                  "The Andean Ridge has problems that are relatively unique to the rest of Latin America,"
                  added Phil Chicola, the State Department Director for Andean affairs. "You have marginalized
                  populations, you have perhaps deeply seeded or perhaps even more deeply seeded social economic
                  problems in those countries than you do in many of the rest of the area."

                  "I think that what you are likely to see is a broader effort with additional resources that,
                  while not neglecting the counter-narcotics dimension because it's a very important
                  dimension, is very cognizant that there are many other socio-economic problems that interceded
                  the narcotics problem that will be a factor," he said.

                  Colombia President Andres Pastrana is convening a meeting of Andean leaders before
                  the April Summit of the Americas, in Quebec, so they can present their ideas to President
                  Bush in a meeting on the sidelines of the summit, a Colombian official said.

                  But officials warn that the Bush administration will be "smart" about the
                  distribution of aid, and will ensure the US is not "stampeded" by countries who
                  see it as a "cash cow.

                  A Colombian official said "the most important thing the US can do to help the
                  situation" in the Andes is to increase trade - what Pastrana sees as "phase two"
                  of Plan Colombia.

                  "The movement away from drugs with alternative development is not sustainable
                  in the long term unless there is a market for the new products and that is where
                  the US can come in," he said.

                  He added that during his visit to Washington, Pastrana received a commitment by
                  the Bush administration that it would support enhanced trade with the region,
                  both through an renewal of the Andean Trade Preference Act and eventually
                  through a proposed free trade agreement across the Americas.

                  The administration appears to have softened its position regarding involvement in
                  Colombia's peace process and has held out the possibility of participating in talks
                  with FARC rebels.

                  President Bush publicly refused Pastrana's appeals in the press for the
                  US to participate in peace negotiations with the rebels.

                  US and Colombian officials tell CNN, however, that Pastrana never raised the
                   issue directly during his meeting with Bush.

                   "The Bush administration went on record saying they would not participate," the
                   Colombian official said. "So there was no reason for the president to start pushing it."

                  But Secretary of State Colin Powell has called for a "clarification" in the
                  administration's position, and the State Department is now saying that US
                  participation in the peace process would be conditional upon the FARC meeting
                  specific US demands.

                  "The United States is not going to engage in talks with the FARC.. until it begins
                  to cooperate with the appropriate government authorities on cases that involve
                  American citizens," State Department Spokesman Richard Boucher said,
                  referring to incidents in 1993 and 1999 where Americans were allegedly
                  murdered by associates of the FARC.

                  He added the US would also not engage with the rebels until there is a "clear
                  intention on the part of the FARC to begin serious, substantive negotiations with
                  the Colombian government."

                  A Colombia official said the comments marked a "definite softening" of the Bush
                  administration's original position of refusing to engage with the rebels, which
                  was a "huge deal" for Colombia.

                  "It is significant because US support for the peace process can do a lot to get the
                  Europeans and the rest of the international community to support it as well," the
                  official said. "When the world is watching and involved, the guerillas feel there is
                  accountability, but when they are just dealing with the Colombian government, it
                  is a different dynamic."