In the highest level U.S.-Vietnam contact since the Vietnam War ended 15 years ago, Secretary of State James A. Baker III told Foreign Minister Nguyen Co Thach on Saturday that Washington will consider normal diplomatic relations as soon as peace is restored in neighboring Cambodia and Hanoi accounts for missing American servicemen.

A senior State Department official said the half-hour talk was a step in the direction of normalization which would include an exchange of ambassadors and an end to U.S. economic sanctions which have bedeviled Hanoi's troubled economy.The official said the conditions which Baker laid down - peace in Cambodia and a satisfactory accounting for the missing in action - are not new. But he added, "I think it was important for the Vietnamese to hear it from the secretary."

"I think this is a relationship which we and the Vietnamese would like to see move forward," the official said.

Although the official stressed that formal talks about diplomatic relations have not yet begun, the meeting dramatized the escalating pace of Washington-Hanoi contacts since July 17 when Baker ended a ban on official contacts which had persisted since the war. Several lower-level meetings have been held the past two months.

The last time a U.S. secretary of state met a high-level official from Hanoi was in 1973 when Henry A. Kissinger and Le Duc Tho completed the Paris talks that led to Washington's exit from the conflict. The war ended in 1975 when Saigon fell to the North Vietnamese army and the Hanoi regime annexed South Vietnam.

Baker temporarily suspended regulations which prohibit Vietnamese diplomats from traveling more than 25 miles from the U.N. headquarters in New York to permit Thach, who also serves as Vietnam's vice premier, to visit Washington to discuss the missing in action with retired Gen. John Vessey Jr. and Anne Griffiths, head of the National League of Families of missing Americans.

Vessey, former chairman of the Joint Chiefs of Staff, is President Bush's special representative on POW-MIA matters.

While Baker and Thach were talking in Baker's suite at the Waldorf Astoria Hotel, a group of Vietnam veterans demonstrated outside, demanding that the two governments acknowledge that some missing Americans are still alive and being held prisoner.

The State Department official said the U.S. government "has no evidence" that would indicate any of the missing Americans are still alive.