The auto giant says the small sport-utility vehicle is the first hybrid capable of operating on blends of fuel containing up to 85 percent ethanol.

"This innovative research program could lead to breakthroughs to significantly reduce our nation's dependence on imported oil while also helping to address global climate change," Anne Stevens, Ford's chief operating officer for the Americas, said at a news conference.

Ford said it will promote the blended fuel hybrid nationally to try and generate consumer interest in alternative fuels.

American manufacturers have been late to the hybrid market as consumers have snapped up the more fuel and environmentally friendly gas/electric models made by Asian manufacturers.

General Motors introduced its Saturn Vue Green Line sport-utility hybrid at the Washington auto show and launched an advertising campaign on Wednesday to trumpet nine E85 FlexFuel models, including full-size trucks, SUVs and mid-sized passenger cars.

GM, which has also launched a massive restructuring, plans to produce 450,000 FlexFuel models in 2006. A spokesman said GM is mindful of the potential for E85/hybrid technology as well.

Ford plans to produce up to 250,000 ethanol-capable vehicles this year, including the Ford F-150 pickup.

Ethanol has been around for years with modest US consumer appeal, but also limited reach compared to gas-only vehicles. It is made from fermented corn or other starchy grains and is mixed with gasoline to stretch fuel supplies. A new federal energy law requires a near doubling of ethanol production to 7.5 billion gallons a year by 2012.

Detroit automakers are now actively pushing alternative fuels -- including hydrogen technology -- and innovation in Washington to demonstrate their newly stated commitment to dramatic operating efficiencies and fuel savings.

The Bush administration prefers auto industry self help and has embraced futuristic hydrogen fuel-cell technology. The Energy Department announced on Tuesday that it will provide $100 million over four years for research projects to improve hydrogen fuel cells for running a fleet of environmentally friendly vehicles.

But US vehicle makers would like tax breaks and other federally generated incentives to enhance research and update their production facilities to accommodate new designs, which they insist must appeal broadly to consumers.

Auto companies also would like to see government facilitate a dramatic expansion of the infrastructure for producing alternative fuels and making them more accessible to consumers. Most of the ethanol stations are concentrated in the Midwest.

"People won't go to any new technology if the fueling stations are not there," Stevens said.