The European Union and Turkey appear to have broken the deadlock in their disagreement over plans for an EU rapid reaction force. Turkey has been blocking the force's right to use Nato bases on its soil.
But a senior Nato diplomatic source said on Monday that a tentative deal with Turkey had been reached, and now had to be agreed by the EU.
"The next stage will be for the EU to endorse this," the Nato diplomat told Reuters news agency.
"If it now all sticks and if the EU comes on board with it, this is one of the biggest breakthroughs of this year. It's a big prize."
Turkish Prime Minister Bulent Ecevit says most of his country's demands have now been satisfied.
"Our justified expectations have to a very large extent been met," Mr Ecevit said.
The apparent breakthrough has come after a round of talks started last week involving British, US and Turkish diplomats.
US Secretary of State Colin Powell is due in Turkey later in the week.
Turkey, which is a member of Nato but not of the EU, had been demanding a direct say in decision-making by the new force, and the right to take part in operations.
It was also concerned that the new force might be used against it, in disputes with Greece over Cyprus and the Aegean Sea.
Details of the agreement have not been made public, and some Brussels diplomats were still waiting for news on Monday.
"We still don't have details about this compromise," one diplomat told the French news agency AFP.
Greece watched
But a statement from the Turkish Government made clear it had been won over.
There was now "a concrete basis... that will allow co-operation between Nato and the EU to move forward in every area," said the statement.
Representatives from EU countries are expected to study the deal on Tuesday, at a meeting of its political and security committee.
There will be particular interest in whether Greece will accept the compromise.
The EU hopes that its 60,000-strong force will be formally launched at its Belgian summit in mid-December, and will be ready to go into action by 2003.
European officials believe it could be used in disputes where Nato is keeping its distance. It is also seen as a way of boosting Europe's role in international affairs.