AThe device is thought to be an advanced spy satellite launched in December 2006 which failed properly to deploy into orbit.
Friction with the Earth's atmosphere is bringing it down, and there is no way to predict where it will land since the controllers have lost contact.
"Numerous satellites over the years have come out of orbit and fallen harmlessly," said Gordon Johndroe, a spokesman for the US National Security Council.
"We are looking at all potential options to mitigate any possible damage that this satellite may cause."
It is relatively common to bring satellites, and the occasional golf ball or paper plane, back to Earth to burn up in the atmosphere, but this is usually done when they reach the end of their operational life.
What is causing concern is that this satellite is still fully fuelled and would be dispersed into the atmosphere if it descends fast enough.
It not known whether the satellite is carrying a nuclear power source, but experts have confirmed that it is carrying hydrazine rocket fuel which is toxic to humans.
The risk from falling debris is slight, however, since 70 per cent of the world is covered in water and most of the mass is expected to burn away on re-entry.
US satellite on collision course with Earth
By Iain Thomson on Jan 29, 2008 3:37PM