A new sense of optimism surrounded WTO negotiations on a new global trade pact on Saturday amid hopes of a breakthrough after seven years of deadlock.
Key deal-makers said most of the 35 leading trading nations meeting in Geneva have bridged their differences, but fears remained that emerging market countries India and Argentina could ruin the upbeat mood.
"I think the situation looks strong. I think we can be very hopeful now," said European Trade Commissioner Peter Mandelson as he left talks late on Friday.
"What is emerging is a deal that is not perfect, not beautiful, but is good for the global economy and good for development."
Ministers from 35 leading economies have been meeting in Geneva all week to discuss reductions in subsidies and import tariffs with the aim of mapping out a new free-trade deal, called the Doha Round, to boost world commerce.
The Doha Round was launched in the Qatari capital seven years ago but has foundered because of disputes between the rich developed world and poorer developing nations on trade in farm and industrial products.
Despite the optimism -- in stark contrast with a feeling Friday that talks faced imminent collapse -- the United States warned that a handful of countries could still torpedo the goodwill.
"There are a handful of large emerging markets that quite frankly risk unravelling the entire package," said United States Trade Representative Susan Schwab in reference to a draft agreement under discussion.
She added, however, that whilst there was "more work to do, it is a path forward."
Argentina said it would be unwilling to accept the proposed agreement as it stands and diplomatic sources told AFP that India was also standing in the way of progress.
Indian Commerce Minister Kamal Nath has insisted all week that he will protect his country's millions of subsistence farmers and nascent industry, which are shielded from imports by tariffs levied on foreign goods.
"There is no agreement but there are certain areas of concerns, certain areas of consensus," he said late Friday.
Mandelson said India would eventually come on board, telling reporters: "I don't think India will be the one to break a world trade round. I really don't."
The talks Friday focused on trade in farm and industrial products -- the two main sticking points of a deal -- but attention is set to turn Saturday to the services sector.
Talks are set to over-run their original programme, which foresaw an end on Saturday, and continue throughout the weekend and early next week, sources said.
"There is a convergence among the seven (leading powers) on several key figures for agriculture and industrial products," said Brazil's trade negotiator, Foreign Minister Celso Amorim.
"My opinion is that the chances of reaching an accord have risen to 65 percent from 50 percent," he added.
The marked turnaround Friday emerged after meetings between seven key trading powers -- the United States, the European Union, Australia, Brazil, China, India and Japan -- which finally made progress after five days of deadlock.
The talks then widened to a ministerial conference of all 35 key nations invited to Geneva to broker the pact.
Anything approved by the 35 parties would still have to be cleared by all 153 WTO member states. A new pact can only be adopted with unanimity.
WTO Director-General Pascal Lamy had warned earlier on Friday that the talks faced failure unless countries showed flexibility and determination.
Among new proposals he put forward Friday was a further cut in the US annual farm subsidies to 14.5 billion dollars (9.2 billion euros) and a clause to prevent developing countries from shielding entire sectors from tariff cuts, a source told AFP.
Diplomats and negotiators had said that Friday would be make-or-break at the end of gruelling week of bargaining that had produced scant evidence of progress.
"No one is happy with every detail that's in the direction forward today. But there is acceptance I think, in the main, that... it's the basis for moving forward," said Australian Trade Minister Simon Crean.
However the Australian minister cautioned that the package could only be accepted on a "take it or leave it" basis.
"It has to be accepted in the totality, not trying to pick apart aspects of the detail," he said.
"I think that's the spirit in which people wanted to proceed. Today was a very significant advance."