EU chief Brexit negotiator Michel Barnier on Monday signalled "some progress" in talks on a post-Brexit trade deal, EU diplomats said, but differences remain on key sticking points.
"There might now be a narrow path to an agreement visible - if negotiators can clear the remaining hurdles in the next few days," an EU diplomat said after a briefing from Barnier.
"There has been some progress in the negotiations over the last few days, but - sometimes substantial - gaps still need to be bridged in important areas like fisheries, governance and level playing field."
Barnier was set to sit down on Monday in Brussels with his British counterpart David Frost for the latest round of talks aimed at thrashings out a deal before Britain leaves the EU's single market on December 31.
EU chief Ursula von der Leyen and British Prime Minister Boris Johnson pledged to "go the extra mile" on Sunday as they side-stepped a self-imposed deadline to end talks if there was no chance of a deal.
Johnson insists it remains "most likely" that Britain will crash out of the globe's largest single market on World Trade Organization (WTO) terms by year's end as the two sides spar over regulating future standards and fishing.
Barnier tweeted ahead of Monday's negotiations that "the next few days are important" for striking an accord, and stressed it was "our responsibility to give the talks every chance of success".
A second EU diplomat noted that "serious difficulties" remains over the issue of fishing rights with London adamant it wants to assert full rights over its territorial waters.
Von der Leyen and Johnson have not set a new deadline as the definitive end date looms in just 18 days and there are fears that the talks could go right to the wire.
Britain left the EU in January and has been in a standstill period until the end of this month as both sides try to agree on the terms of their new relationship.
Without a deal, cross-Channel trade will revert to WTO rules, with tariffs driving up prices and generating paperwork for importers, while a failed negotiation could poison relations between London and the continent for years to come.