Alinghi had hoped to race in the UAE before court action blocked the move [AFP]

The Swiss syndicate said it was offering the compromise deal to end ongoing legal action between the bitterly divided teams and their billionaire owners Ernesto Bertarelli and Larry Ellison.

"This is a venue that should be acceptable to both teams if, as expressed publicly, the true intention of BMW Oracle is to race for the America's Cup on the water,'' Alinghi said in a statement.

It has informed a New York supreme court judge who is scheduled to hear the two sides' latest arguments Friday.

Alinghi said "several locations'' on Australia's east coast would be suitable to stage the best-of-three showdown between the teams' giant multihull boats.

Alinghi originally chose Ras Al-Khaimah in the United Arab Emirates as a host port for the 33rd America's Cup.

However, that was rejected by Justice Shirley Kornreich because it is in the northern hemisphere.

The Cup's 19th-century rule book, known as the Deed of Gift, says racing cannot take place in the north between November 1 and May. 1.

California-based BMW Oracle, owned by software tycoon Ellison, also objected to Ras Al-Khaimah on security grounds because it is close to Iran.

Alinghi says it will specify the Australian race course if BMW Oracle and its backer, Golden Gate Yacht Club of San Francisco, accepts the offer.

"A venue in this region would be approximately two and a half weeks away by ship from BMW Oracle's base in San Diego, while Alinghi's voyage from Ras Al-Khaimah would take approximately three weeks,'' Alinghi said.