But Irish Water remains a major stumbling block
Negotiators from Fine Gael and Fianna Fail have adjourned their talks for this evening to resume again tomorrow.
Irish Water has emerged as a major stumbling point, after an unsuccessful meeting between Enda Kenny and Micheal Martin today about the utility.
The parties are expected to resume talks tomorrow, and Fine Gael's Paschal Donohoe says both sides are determined to reach a deal if it is at all possible:
"We've been engaging with them intensively with them now in the last few days on a whole range of matters," he said, adding: "We're doing our best to do this as quickly as we can."
Earlier, Fianna Fáil finance spokesman Michael McGrath, who is de facto leader of their negotiating team, has signalled the party was willing to compromise to address the country's grave issues.
He said: "The art of any negotiation is compromise, and if everybody takes an absolutist position on every issue, then you never agree anything.
"We are acting in the national interest, we want a government to be formed, it is imperative that this process moves and gets concluded quickly."
Minister for Finance Michael Noonan also said both parties were keen to compromise - but Irish Water remained a major issue.
"Nothing is agreed until everything is agreed, to use the usual formula," he said. "But it's down to about five or six net points I would think, and Irish Water is obviously one of them."