The United States has welcomed what it calls positive concrete steps that have taken place since Burma's military government began talks with the country's democratic opposition in October of 2000.
A U.S. State Department report released Monday says the dialogue has contributed to mutual understanding and the release of some 180 political prisoners.
But at the same time, the report calls for the release of more than 1,000 other political prisoners and the lifting of restrictions on opposition leader Aung San Suu Kyi.
It goes on to express disappointment with what it says is the deteriorating quality of life in the country, where poverty is widespread.
The report says Burma's human rights situation remains "deplorable," with widespread human rights abuses.