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They declined to give details of the prospective agreement and said final consensus would not be clear until it was written on paper.

Staffs would be working through the night on the final draft of the estimated 700-billion-dollar bailout package for the country's finance system.

It was the first time in nine days of tough negotiations and harsh words that such a high-ranking group appeared together.

It included Speaker of the House of Representatives Nancy Pelosi and Senate Majority Leader Harry Reid, who leads the Democratic majority in Congress, as well as Treasury Secretary Henry Paulson.

Pelosi has said she hoped to have a final agreement by Sunday before markets open in Asia.

Two weeks of financial turmoil in the United States have played havoc with world markets.

"We have made great progress. We have to commit it to paper so we can formally agree," a smiling Pelosi said.

Paulson, a one-time wheeler dealer on Wall Street, also said there had been "great progress" toward a deal which would be effective in stabilising the marketplace and protecting taxpayers "to the maximum extend possible."

"I think we're there ... and our staffs will be working all night. So far so good," he said.

The written version would have to go through another round of approval, leaders said.

Representative Roy Blunt, who worked on behalf of holdout conservative House Republicans in the past days of negotiations, was more cautious.

"We need to look and see where we are on paper tomorrow," Blunt said. "I think we are going to be able to have an announcement tomorrow, but these are difficult issues."

A combination of shoddy lending practices by US banks to homebuyers and the subsequent packaging of the mortgages in unregulated, high-risk mortgage securities has drained the financial system of its credit flow and threatened economic collapse.

Hundreds of thousands of homeowners have faced foreclosure or walked away from unaffordable mortgages in the crisis, depressing home values.

The 700-billion-dollar plan, pitched by Bush in a moment of urgency just last week as the investment banking industry collapsed, would allow the government to buy up "toxic" assets to sell off later, when the housing market stabilises.

The expenditure represents one-quarter of the current US budget and has provoked extreme outrage by voters angry that taxes will be used to bail out the mistakes of Wall Street's high-paid risk takers.

Days of tense bargaining followed last week's surprise request from the White House as lawmakers look nervously toward November 4 congressional and presidential elections.

Although in the majority, Democrats say they cannot muster enough votes to pass the unpopular measure and need a good number of Republicans not only to push it through but also to give them bipartisan protection during the coming elections.

US President George W Bush, who has the lowest popularity rating of any president in 30 years, has pleaded on a near daily basis with Congress to hasten passage of the programme, and with the public to to understand that a collapsed finance system will hurt them as well as Wall Street.

After a stormy White House meeting on Thursday with the president, the main decision makers and presidential candidates, Democrat Barack Obama and Republican John McCain, Paulson reportedly got down on one knee and begged Pelosi to not let an initial agreement fall apart.

Despite the mock gesture, it collapsed on objections by conservative House Republicans who see the bailout as an affront to the free market and insisted that alternatives be explored.

One apparent concession in Saturday's agreement could be acceptance of House Republicans' demands to give the Treasury Department authority to issue government insurance for the toxic financial instruments to reduce the outlay of taxpayer money being spent, The New York Times reported online.

The White House has already conceded demands by Democrats and Senate Republicans to allow limits on executive compensation in firms being helped, to insist on partial government equity stakes in the companies, to set up a bipartisan oversight panel and to give more help for mortgage foreclosures, Pelosi said.

Saturday's negotiations included several calls to the White House, a call to mega-investor Warren Buffett and frequent calls with McCain and Obama, one of whom will have to deal with the mess come January.

The White House said it was "very pleased with the progress made tonight in these discussions" and "pleased by the hard work on both sides of the aisle," CNN reported.

Senate majority leader Reid said Saturday evening had been "extremely difficult."

"We've had a lot of pleasant words and some that have not been pleasant," he said.