The key stumbling block in talks has been how power would be apportioned between President Robert Mugabe and opposition leader Morgan Tsvangirai, men from different generations who hold sharply opposing perspectives on the challenges facing Zimbabwe.
Both men spoke briefly to reporters after more than 11 hours of talks mediated by South African President Thabo Mbeki.
"Hopefully a deal will be signed tomorrow," Mugabe said.
Tsvangirai said there was "very little work left" to do, but did not elaborate on what that entailed. He said the two leaders would meet again Thursday afternoon, after Mbeki was expected to brief other regional leaders on progress in the talks.
Tsvangirai’s party won the most votes in legislative and presidential elections in March. Mugabe subsequently was the only candidate in a presidential runoff that followed an onslaught of state-sponsored violence against Tsvangirai’s supporters and was widely denounced as a sham.
Since then Mugabe has faced pressure to reach a deal with the opposition as the only way of breaking the political deadlock that has brought this once relatively prosperous African nation to a standstill.
Tsvangirai, an affable 56-year-old former union leader, insisted on being head of government and presiding over Cabinet meetings, with Mugabe holding a largely ceremonial position of head of state.
The sharp-tongued, 84-year-old Mugabe was unwilling to surrender much of the power he had wielded since leading an insurgency against a white-minority government that won independence from Britain in 1980.
Much of Mugabe’s popularity at home and across the continent is linked to his image as a proud African leader unafraid to defy the West. Tsvangirai, who lacks Mugabe’s anti-colonial credentials, has said Zimbabwe needs to work with the West to overcome its economic and political crises.
A political settlement will free the leaders to address the world’s highest inflation rate and chronic food and fuel shortages. Foreign investors have been wary because of the political uncertainty. Western governments are poised to help with grants and loans, but they will not deal with Mugabe, denounced as a dictator who has trampled on his people’s rights.
Many Zimbabweans have been fighting inflation by dealing in U.S. dollars and South African rand. Inflation is so volatile that some tradesmen say their estimates of the price of work and materials in Zimbabwean dollars are good for only a few hours.
Earlier Wednesday, Zimbabwe’s central bank announced that 1,000 retailers, 200 wholesalers and fuel distributors would be allowed to accept foreign currency as an experiment for at least 18 days.
As the political talks continued Wednesday, opposition spokesman Nelson Chamisa reported that bail was granted to six members of Tsvangirai’s party who were arrested as they went to be sworn in as lawmakers last month. Four were released from jail, but two remained in detention after prosecutors appealed the bail decision.