US Soccer Federation president Sunil Gulati announced that Arena will not be retained once his contract expires at the end of the year.

The US team was ousted at group stage in Germany this summer after losing to the Czech Republic and Ghana and drawing with eventually champions Italy.

Gulati said: "I've reached the decision that we will not be renewing Bruce's contract. We will start an immediate search for someone to guide the program going forward.

"Bruce Arena didn't become a bad coach in three games. It has much more to do with eight years and us looking for a fresh approach.

"The difficult part is we have an extraordinary guy as our coach. We weighed that against the eight-year issue and decided we needed the newness."

US officials will now seek a new coach for the quest to reach South Africa in 2010 and Klinsmann, who led Germany to third place at the World Cup, has been touted as a possible successor.

"I'm sure I will talk to Jurgen," Gulati said. "He's a very interesting coach who lives in America and has expressed a desire to remain in America. A lot of people believe he would be a good candidate."

Klinsmann, who resigned from the Germany post on Wednesday and lives in Southern California with his American wife, exchanged e-mails with Gulati during the Cup.

Gulati said none touched upon him taking over the US squad and added: "We've not talked to any potential coaches. We will start that process now.

"The search will be worldwide but I think there is a big advantage to knowing something about the American soccer setup. What works in Brazil is not going to work in America necessarily."

Klinsmann meets Gulati's other requirements such as leadership, experience, a record of success and coaching skills.

"Does Juergen Klinsmann fit all those criteria? I think he probably does," Gulati said. "He has a much better handle on the American soccer scene than someone who hasn't spent a lot of time here and he's a guy who wants to learn." Told Klinsmann professed no interest in the US job, Gulati said, "If we decide to pursue him, his complete lack of interest would be an obstacle."

Arena, a possible candidate for Major League Soccer's New York Red Bulls, insisted in a statement that he leaves with football in the US in good shape.

"I would like to thank the players, coaches and staff who have been with the program over the last eight years. Their tireless effort has helped transform the national team program into something we can all be proud of.

"I am extremely optimistic about the future of the sport in our country. As for me, I am planning to take some time off to weigh my future opportunities."