By Souhail Karam and Susan Taylor RIYADH/OTTAWA, Aug 6 (Reuters) - Saudi Arabia and BlackBerry maker Research In Motion (RIM.TO) are making progress in talks over access to the device's encrypted network, a source close to the negotiations said, and the kingdom had yet to carry out threats to cut its Messenger service early Friday morning. Canada also said it is talking tdiscount designer handbagso Saudi Arabia and the UAE to resolve a fight over BlackBerry security that could jeopardize the growth of RIM, the country's most important tech exporter. RIM is facing mounting pressure to open up its super-secure network to government scrutiny. A growing number of countries are demanding access to encrypted communications sent through the device, saying national security may be at risk. In addition to Saudi Arabia and the United Arab Emirates, India is in talks with the company over gaining access, and both Lebanon and Algeria, according to a newspaper report, are reviewing the situation and might soon also might join the list. The Saudi talks have led Research In Motion to consider locating a server in the kingdom to handle some of the BlackBerry network's encrypted communications, Al-Hayat newspaper's online edition said on Friday in an unsourced report. "RIM showed on Thursday a degree of flexibility that has not been there over the past three months. Progress is being made. We started debating the technicalities of new setups," the source told Reuters. U.S. Secretary of State Hillary Clinton, who has promoted Internet freedom as a basic human right, said the United States will hold talks with the UAE and other countries on the issue.