WASHINGTON -- Government lawyers said they will make Microsoft Corp.'s powerful new Windows XP software a central focus in the final round of court hearings in their landmark antitrust case against the company, Friday's Wall Street Journal reported.

In a filing in U.S. District Court here, state and federal officials proposed a schedule under which the bitterly fought case would resume this fall with briefs and depositions, followed by formal hearings on a new remedy beginning Feb. 4 that could rewrite the rules of competition in the computer industry.

In the filing, jointly prepared with Microsoft (MSFT), the two sides also confirmed that settlement talks have been under way and will proceed during these court hearings. The company and the government "will continue to seek settlement of this matter through private discussions, which are ongoing and should continue simultaneously" with remedy proceedings, the filing said.

Last week, The Wall Street Journal reported that Microsoft had drafted an initial settlement offer. But like much of the nation's economy and public life, the Microsoft case was suspended in midstride by the terrorist attacks here and in New York.

Indeed, on the morning of the attack, Microsoft and the government had been scheduled to meet privately at the Justice Department, where Bill Neukom, Microsoft's general counsel, was expected to present the settlement bid to state and federal officials.

After the meeting was canceled, Mr. Neukom and his legal team drove back to Redmond, Wash., and the Iowa attorney general, Tom Miller, got on a train to Des Moines. The parties resumed their talks by telephone and e-mail, people close to the case said.

The joint filing before Judge Colleen Kollar-Kotelly, however, suggests that their differences will be difficult to bridge. The government has said it will seek to impose wide-ranging restrictions on Microsoft's conduct modeled after restrictions ordered earlier in the case to take effect pending a breakup.

A June 28 appeals-court ruling threw out the breakup order and conduct provisions, and directed the district court to begin new remedy proceedings. In its order, the appeals court narrowed the government's case, but upheld its core monopolization charge.

Microsoft yesterday said the conduct restrictions being considered by the government "are every bit as radical as the now-discarded proposal to break up the company," and complained that the government is seeking to impose additional restrictions as well.