Burma's opposition leader Aung San Suu Kyi met one of the country's top generals on Wednesday to discuss the conditions for her release and the possible mass release of other political prisoners.
The talks with the country's military intelligence chief, Lieutenant Khin Nyunt, are the latest signal that the two sides are close to an agreement.
The BBC's Larry Jagan in Rangoon says Aung San Suu Kyi is likely to be released in the next few days.
But opposition sources say the military government is still attaching conditions - and unless it makes a significant concession freeing her unconditionally, Aung San Suu Kyi will not accept the government's offer.
Be patient. I think something big will happen
UN envoy Razali Ismail
Aung San Suu Kyi has been under house arrest for 20 months. There has been a flurry of activity at the Nobel laureate's Rangoon home in recent days, and after years of neglect the road outside has been repaired.
Brigadier-General Than Tun, the official liaison officer between Aung San Suu Kyi and the military regime, made three visits to Aung San Suu Kyi's lakeside home on Tuesday.
His rare appearance followed strong hints by the United Nations envoy to Burma, Razali Ismail, that the Nobel Peace Prize winner could be released shortly.
"Be patient. I think something big will happen," he told reporters in Kuala Lumpur on Tuesday.
Mr Razali spent four days in talks with Burma's junta and opposition last week in an attempt to break the country's political deadlock.
Aung San Suu Kyi's National League for Democracy won 1990 elections by a landslide but the military refused to hand over power.
Burma has faced international isolation and economic sanctions over the issue and over its human rights record.
General Than Shwe: Nation is 'stable'
Europe, the United States and Japan have all warned that unless there is significant progress soon, they will be forced to consider isolating the country further and even introducing trade sanctions.
Burma's newspapers on Wednesday carried May Day messages from Burma's top leader General Than Shwe, but did not say anything about Aung San Suu Kyi.
"Evidently, the nation is stable and there are signs of development in the nation," Than Shwe's message said.
The United States and human rights groups have called for Aung San Suu Kyi, 56, to be released unconditionally.
When she was freed in 1995 after six years of house arrest, she was put under travel restrictions. Her attempt to defy the ban by travelling to Mandalay was the incident that prompted the junta to again put her under house arrest.
One source close to the junta has told Reuters news agency to expect "a breakthrough" in the country's politics.
The source said the opposition leader could be freed in a deal under which she would co-operate with the military in humanitarian work such as health and education.