The plan, reported by the Intelligence Online website, appears to be part of a growing U.S. effort to bolster regional military forces arrayed against the jihadist fighters who have controlled northern Mali since spring 2012, without committing U.S. forces to yet another foreign conflict.
The Algerians, whose forces have been fighting Islamist militants since 1992, are wary of bringing in outside powers like the United States and France, the former colonial power which remains deeply suspect in Algeria.
The Americans have been just as distrustful of the Algerians for some time but Washington's attitude to the military-backed government in Algiers underwent significant change after the carnage of the Sept. 11, 2001 when the Americans found themselves fighting the same enemy as the Algerians.
U.S. President Barack Obama appears determined not to involve the U.S. military in another messy land war after he withdrew all U.S. forces from Iraq just more than a year ago and is in the process of disengaging in Afghanistan. But he is committing U.S. Special Forces across the globe to counter jihadist forces and increasing deployment of unmanned aerial vehicles to hunt them down.
Even so, there's a wide body of opinion in Washington that this largely undeclared war will eventually drag Americans into new foreign conflicts.
Algeria has for some months refused U.S. requests that UAVs deployed in Burkina Faso, a West African state south of Algeria, and in the southern desert of Morocco, a longtime U.S. ally, be allowed to use Algerian airspace to track the jihadists.
Middle Eastern intelligence sources say the CIA, the Defense Intelligence Agency and the National Geospatial-Intelligence Agency believe they need Algerian support to monitor the ungoverned spaces of the Sahara and the semi-arid Sahel region to the south that runs from Africa's Atlantic coast to the Red Sea in the east.
"To be able to do so, these services are advocating Algiers acquire its own optical observation system and develop its own fleet of drones," Intelligence Online reported.
Providing Algeria with spy satellites may turn out to be the short end of the stick for the Americans, who say al-Qaida is extending its operations across Africa, including oil-rich Nigeria to the south and the Horn of Africa in the east.
Al-Qaida operations have recently been reported in Ethiopia, another U.S. ally in East Africa, now on the cusp of a major oil and gas bonanza.
France, on the other hand, like North African states, views the presence of seasoned jihadist fighters in their own enclave in Mali as a direct threat to the security of Western Europe, a target for Islamists long before 2011.
"Only two years ago, Washington categorically refused to sell armed drones to Algeria's army," Intelligence Online observed.
"But the takeover of northern Mali by radical Islamists has prompted the Obama administration to have a change of heart."
The website said senior "U.S. intelligence officials and space industry executives" visited Algiers in the second week of December to discuss the "sale to Algeria's intelligence services of optical observation satellites."
No details of the discussions are available. But Intelligence Online commented that "the encounter reflects strengthening ties between the intelligence communities in Washington and Algiers."
The December talks apparently stemmed from the October visit to Algiers of U.S. Secretary of State Hillary Clinton, during which she discussed counter-terrorism with Algerian President Abdelaziz Bouteflika, a veteran of his country's 1954-62 independence war against France.
The French, who have Special Forces and other military contingents deployed across their former African empire, are spearheading efforts to stitch together a regional force, possibly Algerian-led, to move against the jihadist strongholds in northern Mali, which by all accounts are being steadily reinforced by fighters from across the Muslim world.
On Dec. 21, the U.N. Security Council unanimously approved a French resolution for an African Union military mission to recapture northern Mali.
The French drew up the resolution after talks with the United States, which wants desert warfare veterans from Chad brought in for the operation.
Given the Algerians' vast experience in counter-terrorism operations, their participation would make a lot of sense.