Cece Leadon: Optimism about the outcome of talks

After meeting Deutsche Bank chairman Rolf Breuer and Chancellory minister Bodo Hombach, leaders of the World Jewish Congress offered the prospect of lifting a threatening boycott of the bank's proposed merger with the New York-based Bankers Trust.

The meeting in Washington was organised to talk about setting up a compensation fund for survivors of Nazi slave labour camps.

Immunity from litigation

WJC leaders said further progress would enable them to call off the threatened boycott.

Rabbi Marvin Heir: "The Deutsche Bank has a problem that it needs to deal with"

The German delegation, who later had talks with US Under-Secretary of State Stuart Eisenstadt, want to establish a fund for Holocaust survivors and guarantee German companies immunity from law-suits which could bankrupt them.

The aim is to achieve a breakthrough on the size and workings of the fund before the German Chancellor, Gerhard Schröder, visits Washington on Thursday.

Deutsche Bank admitted last week it was involved in funding the construction of Auschwitz, the concentration camp in which 1.5 million people, mainly Jews, were killed by the Nazis.

Bank merger threatened

Mr Breuer is hoping his trip will help smooth the way for the takeover of Bankers Trust, one of the biggest banks in the US.

Rolf Breuer...wants to force through merger

Deutsche Bank offered $10bn for Bankers Trust in November, and had been hoping to complete the merger by the spring.

Deutsche Bank has agreed to participate in a compensation program sponsored by the German government that would be funded by numerous private businesses in Germany.

However, sources close to the talks say an initial $1.3bn offer by Deutsche Bank for the fund has been rejected as too low by US negotiators.

Threats from Big Apple

US politicians, led by Alan Hevisi, the comptroller of New York City, say they will try and block the merger until Deutsche Bank offers compensation for Holocaust victims.

Mr Hevisi said: "Federal and state officials should take no action on the proposed merger between Deutsche Bank and Bankers Trust until these issues are fully resolved."

Although he does not have the power to block the merger himself, Mr Hevisi was influential in organising a coalition which led to a boycott of Swiss banks last year until they agreed a $1.25bn settlement with Holocaust survivors and their heirs.

Private funding for Hitler

Rabbi Marvin Heir, a founder of the Wiesenthal Centre, said that Germany's largest bank had made large contributions to Adolf Hitler's private fund used to support the dictator's pet projects.

Deutsche Bank, along with German competitor Dresdner Bank, already face $18bn lawsuits accusing them of profiting from gold and other assets stolen from concentration camp victims during World War II.

A 1946 investigation by the US military that recommended Deutsche Bank be liquidated and its top officials tried as war criminals.

The bank has denied a central claim in that 1946 report that it was as guilty of using slave labourers in the industrial enterprises it controlled.