THE HAGUE -- A growing dispute between the United States and the European Union over the power and scope of the controversial International Criminal Court (ICC) is threatening to undermine further their already uneasy relations.

With Argentine Luis Moreno-Ocampo set to be sworn in as the first ICC chief prosecutor Monday the gulf between Washington and Brussels over the court's legitimacy and judicial limits continues to grow.

The ICC will be the first permanent international court to try cases of warcrimes, crimes against humanity and genocide. Its judges and prosecutor were appointed this year, but no case has yet been brought before it.

Washington refuses to support the ICC, arguing that it could become a forum for politically motivated prosecutions of U.S. citizens including civilian military contractors and former officials.

The U.S. has also been at odds with the EU over the interpretation of the 1999 Rome Statute which created the ICC, especially the provision that allows states to seek immunity for their troops through bilateral accords.

The EU, which supports the court, says bilateral agreements signed by the United States with 38 countries exempting Americans from ICC prosecution go too far and undermine the court's power.

The issue has come to a head this week with the U.S. accusing the EU of seeking to undermine some of those agreements.

The U.S. sent a note to the EU last week warning that its lobbying of the ten future European states set to join the union in 2004 could have "very damaging" consequences on transatlantic relations.

"This will undercut all our efforts to repair and rebuild the transatlantic relationship just as we are taking a turn for the better after a number of difficult months," the note said.

The European Union's executive arm on Wednesday denied the accusations, saying it firmly supported the ICC and sought to promote it internationally.

"We are not exerting pressure," said a spokesman for Chris Patten, the EU's external relations commissioner.

EU officials made no secret of their grave disappointment when former communist countries Romania and Albania signed bilateral accords with Washington exempting Americans from ICC prosecution. Georgia has signed a similar deal.

The court's supporters say that U.S. fears of the court being taken over by forces hostile to the United States are unfounded.

"The risks are extremely small, infinitely smaller than the progress this court represents in the fight against impunity," one EU diplomat said.

The diplomat, who did not wish to be named, underlined the bullish approach by the U.S. in its campaign to get other countries to see things its way.

"The Americans are using blackmail: either you sign, or we cut off your aid," he said.

If U.S. citizens were exempt from the court's jurisdiction, the ICC could find itself being accused of functioning according to double standards, he said. On June 3 the Council of Europe's parliamentary speaker criticized Washington, saying Washington risked "ruining and sabotaging the work of the International Criminal Court, thereby putting in danger the preeminence of law on the international stage."

The United States threatened one year ago to veto UN peacekeeping missions unless the Security Council approved Resolution 1422 -- granting immunity from ICC prosecution to personnel in UN operations who are citizens of states that have not ratified the ICC.

The resolution was passed on July 12, 2002. The exemption expires June 30, and diplomats said last week the U.S. wanted it renewed without delay.

On Thursday the Security Council renewed the exemption despite the opposition of UN Secretary General Kofi Annan.

Deputy U.S. ambassador James Cunningham rejected the claims of many speakers in an open debate which preceded the vote that the U.S. was seeking to put its nationals above the law. Cunningham said "the ICC is not the law" and described the court as "a fatally flawed institution."

And he repeated U.S. government concerns that it could be used for politically motivated prosecutions.