WASHINGTON — The Postal Service has narrowed the number of offices facing possible closure to 413, including two dozen in the Bay Area.

Struggling with a sharp decline in mail volume caused by the recession and the movement of traditional mail to the Internet, postal officials say the agency could have a deficit as large as $7 billion this year.

Being on the list doesn't guarantee closing, but the list of offices selected for a closer look had neared 700 at one point.

Two San Jose offices are still on the list, the Colonnade branch near San Jose State University and one at the Oakridge mall. Also still on the list are the Niles and Mission San Jose branches in Fremont, and branches in Concord, Richmond, Berkeley, Oakland, San Francisco, Hayward, and San Pablo.

Currently the post office has about 37,000 retail outlets across the country and Postmaster General John Potter has said he wants to keep as many open as possible.

In addition to losses caused by reductions in mail volume, the post office is required to place $5 billion annually in an account to pre-fund the costs of medical care for retirees.

If it does end the fiscal year at the end of this month short of funds, postal officials have said they will default on that payment in order to make payroll and keep the agency operating. In the meantime, Congress is considering bills that would defer the payment.

The post office has also suggested reducing

n Cut more than 100 million work hours, the equivalent of 57,000 positions.