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The tussle between Palm Inc and Apple Inc over iTunes has reached to a new level as Palm Inc released a software update for the Pre this week that allows it to sync again with Apple's iTunes media management software.

Palm fired another volley at Apple Inc in their smartphone war, as the two rivals tussle over whether iTunes should be compatible with Palm's new Pre smartphone.

The move comes after Apple last week issued its own software update to close a loophole in iTunes that had allowed it to sync with the Pre. ITunes is designed to work with Apple's iPod and iPhone products.

Palm announced the software update in a blog post that mimicked Steve Jobs' signature catchphrase "Oh, and one more thing," which the Apple chief executive has often used to announce a brand new product.

It was not immediately clear when Apple may issue another software patch to counter Palm's move.

Palm launched the Pre in June to good reviews, seeking to win a slice of the touch screen smartphone market now dominated by Apple's iPhone. Prior to the launch, Palm had touted that the Pre "synchronizes seamlessly with iTunes."

While analysts and the Pre's carrier, Sprint Nextel Corp, have said it's too soon to know if the phone will be a real hit, it has already sparked a huge rally in Palm shares this year.

Palm Chief Executive Jon Rubinstein had helped create the iPod, and senior vice president of product development Mike Bell also used to work at Apple.

Rubinstein was brought in as Palm's executive chairman when private equity firm Elevation Partners bought a stake in the company in 2007, and he was named CEO last month.

Palm was a pioneer of handheld devices, but has fallen well behind competitors like Apple and BlackBerry maker Research in Motion Ltd.