By Doug Palmer

WASHINGTON (Reuters) - The European Union and other U.S. trading partners have agreed to give the United States more time to negotiate a package of trade concessions to compensate them for U.S. restrictions on Internet gambling, a U.S. trade official said on Monday.

"In order to provide all parties with sufficient time to reach a successful resolution, the United States and the claimants have jointly agreed that these negotiations should be extended until December 14," said Gretchen Hamel, a spokeswoman for the U.S. Trade Representative's office.

The negotiations between the United States and seven of its trading partners had faced a Monday deadline. U.S. officials have not said how much compensation the trading partners are seeking, but last month said reports it could exceed $100 billion were "exaggerated."

"Each negotiation is proceeding at its own pace, and some are quite advanced. However, we have agreed to extend the negotiation period for all claimants," Hamel said.

The United States has been forced to negotiate the compensation package because of a 2003 case filed by the Caribbean nation Antigua and Barbuda, which challenged U.S. Internet gambling restrictions at the World Trade Organization.

A WTO panel ruled two years later that a U.S. law allowing domestic companies to provide online horse race gambling services discriminated against foreign providers.

But it also said WTO members could restrict Internet gambling for public policy reasons, so long as they treated foreign and domestic companies the same way.

The United States has argued it never intended to include gambling as part of the market-opening commitments it made in the 1994 Uruguay Round trade pact.

But having lost the case, it announced in May it would exercise a rarely used right under WTO rules to clarify that its commitments did not extend to gambling.

Making that change opened the door for trading partners to demand compensation in the form of increased access to some other U.S. services sector.

U.S. officials initially said they did not believe compensation was warranted, but have been in talks with seven WTO members -- India, the European Union, Japan, Costa Rica, Macao, Canada and Australia -- on a compensation package.

Antigua is pressing for the right to slap $3.4 billion in "cross retaliation" on the United States by suspending copyright protections on American movies, music and software.

Hamel conceded that Antigua remains more focused on litigating its case, then negotiating a compensation package with the United States. But "we believe that negotiations hold the most promise for resolving this issue," she said.