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U.S. and Soviet officials said Saturday that negotiators have broken a deadlock and moved closer to a historic agreement to slash troop levels and conventional weapons in Europe.

There was no official announcement of the development as President Bush and Soviet leader Mikhail Gorbachev concluded three days of meetings with an informal session at Camp David. However, a ranking Soviet official said, "The stalemate you Americans talked about is over. I don't think any problems remain."U.S. officials were far more cautious in their assessment. "The deal is not done yet," a senior American cautioned, but he confirmed that the impasse was broken.

Bush and Gorbachev, preparing to return to Washington after about 10 hours of wide-ranging discussions at the retreat, declared they had deepened their understanding of each other's positions on what the Soviet leader had called "the global flashpoints."

"We have an awful lot of common ground," Bush said.

Calling the day "very instructive," Gorbachev said, "I think there is really ample opportunity for cooperation even though there are real problems that neither the president nor I can turn a blind eye to."

Questioned by reporters, Bush sharply defended his decision to proceed with a trade agreement with Moscow despite the continuing economic embargo of Lithuania.

"I look at the overall relationship," Bush said, asserting that the trade accord is in the interest of the United States.

"Somebody wants to argue with me, fine, we'll take him on," he said.

Bush and Gorbachev did not comment publicly on the conventional arms issue. In Washington, an American official said that substantial progress was made toward agreements on limiting numbers of tanks, destroying weapons that are taken out of service, and verifying destruction of weapons. Unresolved, he said, were limits on aircraft, probably the most complex topic facing the conventional arms talks.

The progress toward a treaty to reduce conventional forces - one of the superpowers' chief arms control goals this year - came as another positive note in U.S.-Soviet relations at a summit that both sides already were hailing as a success.

It helped to counterbalance continuing differences over several other major issues, including two of the most vexing of the relationship - whether a unified Germany will be a member of the NATO alliance, and Soviet handling of the independence movement in the Baltic states.

Bush and Gorbachev again took up Lithuania and Germany during their more than eight hours of discussions Saturday at the presidential retreat in western Maryland, an administration official said, but only to go over what they will say at a joint news conference Sunday - the climax of the summit.

Soviet officials have said they expect two more Bush-Gorbachev summits to be held later this year, one to sign a treaty reducing conventional forces, assuming it is completed, and another in Moscow to sign a treaty drastically reducing strategic or long-range nuclear weapons. The conventional forces pact would be signed, probably in Paris, at a meeting attended by the heads of all 34 nations of the Conference on Security and Cooperation in Europe.

Friday the two leaders signed a framework for a START treaty and indicated that they thought they had narrowed their differences on remaining issues.

U.S. and Soviet negotiators plan to brief their allies on the results of the summit talks Monday.

A senior U.S. official said that American and Soviet negotiators reached tentative agreements defining classes of tanks and armored vehicles and establishing limitations on them. But he said that nothing can be considered final until the other NATO nations give their approval.

"Most of those are likely to be acceptable to the allies, but there are at least one or two that will require some careful study and may or may not work," the official said. "On some of these issues, ceilings and weights, allied equipment is affected more than American equipment."