Windows XP, Microsoft's most popular operating system, sports the same encryption flaws that Israeli researchers recently disclosed in Windows 2000, Microsoft officials confirmed late Tuesday.

The researchers, Benny Pinkas from the University of Haifa and two Hebrew University graduate students, Zvi Gutterman and Leo Dorrendorf, reverse-engineered the algorithm used by Windows 2000's pseudo-random number generator (PRNG), then used that knowledge to pick apart the operating system's encryption. Attackers could exploit a weakness in the PRNG, said Pinkas and his colleagues, to predict encryption keys that would be created in the future as well as reveal the keys that had been generated in the past.

As recently as last Friday, Microsoft hedged in answering questions about whether XP and Vista could be attacked in the same way, saying only that later versions of Windows "contain various changes and enhancements to the random number generator." Yesterday, however, Microsoft responded to further questions and acknowledged that Windows XP is vulnerable to the complex attack that Pinkas, Gutterman and Dorrendorf laid out in their paper, which was published earlier this month.

Windows Vista, Windows Server 2003 and the not-yet-released Windows Server 2008, however, apparently use a modified or different random number generator; Microsoft said they were immune to the attack strategy.

In addition, Microsoft said Windows XP Service Pack 3 (SP3), a major update expected sometime in the first half of 2008, includes fixes that address the random number generator problem.

Microsoft and Pinkas have argued over whether the flaw was a security vulnerability, with the former denying the bug met the definition and the latter claiming it is a serious problem that -- while it needs to piggyback on another, more common kind of exploit -- is far from just a theoretical threat.

Tuesday, even as it conceded that XP also had a weak PRNG, Microsoft continued to downplay the possibility of an attack. "If an attacker has already compromised a victim machine, a theoretical attack could occur on Windows XP," a company spokeswoman said in an e-mail. To exploit the PRNG's flaws, an attacker must have administrative rights to the PC, something that's easily obtained by most run-of-the-mill attacks, Pinkas noted.

Previously, Microsoft had used that prerequisite to reject any claim that Windows 2000 contained the security vulnerability, since Pinkas' proposed attack could not accomplish anything on its own. Microsoft stuck to that position with XP. "Because administrator rights are required for the attack to be successful, and by design, administrators can access all files and resources on a system, this is not inappropriate disclosure of information," the company spokeswoman added.

Newer operating systems, however, are completely in the clear. "Windows Vista, Windows Server 2008 and Windows Server 2003 SP2 are not affected by the type of attack Pinkas describes," said the spokeswoman.

Pinkas applauded Microsoft's decision to patch Windows XP. "We're happy to learn that Microsoft is acknowledging that our attack is indeed an issue, and will fix it in XP SP3."

While Microsoft said it will fix the PRNG in Windows XP, it remained mute about patching the flaw in Windows 2000. The aging operating system, which, according to a recent survey by Forrester Research, still powers approximately 9% of all American and European business computers, is in the last stages of support. In that phase, dubbed "extended support," Microsoft is committed to providing only security updates free of charge.

Because the company has determined that the PRNG problem is not a security vulnerability, it is unlikely to provide a patch.