The top leaders of the two countries are holding talks in a friendly .
A. atmosphere
B. state
C. situation
D. phenomenon
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A. atmosphere
B. state
C. situation
D. phenomenon
解析：比较：atmosphere意为“气氛”；state意为“状态”；situation意为“状况，处境”；phenomenon意为“现象”。根据句子语境，显然只有A最合适。