The European Union is considering whether to begin lifting sanctions against Burma, also known as Myanmar, as soon as February, AFP reported.
A spokesman for EU foreign policy chief Catherine Ashton said she is considering visiting the nation soon.
"In the light of developments in the country, we have launched a general review of our policies," said Michael Mann.
On Wednesday, Hundreds of supporters turned out to see Burmese pro-democracy leader Aung San Suu Kyi register as a candidate in Burma's upcoming by-election, the BBC reported.
Suu Kyi, the leader of the National League for Democracy party, will run for a parliamentary seat in Kawhmu, southwest of Rangoon, in the April 1 vote.
The Nobel Peace Prize winner and her NLD party will be running for 40 of the 48 parliamentary seats left vacant when cabinet members and deputy ministers assumed their posts.
The BBC's Rachel Harvey said the vote is a key test of the military-backed government's reformist credentials.
Khin Ohmar, the coordinator for the democracy and human rights group Burma Partnership, told Voice of America that if elected, Suu Kyi will seek to reform the 2008 constitution, which maintains the military's rule over the country. She said 25 percent of Burma's legislative seats are held by military officers.
Burma is experiencing a wave of reform, spearheaded by the United States' recent decision to re-establish ties with the isolated nation and exchange ambassadors.
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On Friday, Burma released 651 political prisoners included leading dissidents from the democratic uprising in 1988 and the 2007 Saffron Revolution as well as striking a cease fire with ethnic Karen rebels.
The NLD won a landslide victory in parliamentary elections in 1990, while Suu Kyi was under house arrest, but Burma's then-military rulers barred it from taking power. The party boycotted the 2010 elections, claiming the rules were unfair.