Negotiators at the UN climate summit in Bali have adjourned talks, with delegates suggesting they are close to a compromise deal.
If global temperatures rise, billions will face water shortages
But there were reported to be lingering disputes about whether industrialised nations should adopt fixed targets for cuts in greenhouse gas emissions.
The EU wants to commit rich nations to specified emissions cuts, but the US, Canada and Japan are opposed.
Some developing countries say they are being pressurised to curb emissions.
"We have a compromise, which is a good situation for everybody," German Environment Minister Sigmar Gabriel said.
Senior US negotiator Harlan Watson, asked how talks were going, said "swimmingly," according to news agency AFP.
Nevertheless, key numbers on how much rich nations should be forced to cut their greenhouse gas emissions still threaten to be reduced to a footnote in the final text, the BBC's Roger Harrabin reports from the talks - the main fear of environmental lobbyists.
It looks clear the Europeans have had to make some very severe concessions, he says - though the US has defended its stance, saying policies to reduce emissions and not targets should be the focus of discussions.
UN chief Ban Ki-moon is flying to Bali later on Saturday either to announce an agreement or to help break any impasse.
Talks were set to resume at 0800 on Saturday (0000 GMT).
The key aim of the summit is to set negotiations in train that will eventually lead to a successor to the Kyoto Protocol. Its first targets for reducing emissions expire in 2012.
EU negotiators want this "Bali roadmap" to contain a commitment that industrialised nations will cut their emissions by 25-40% compared to 1990 levels by 2020.
The US and its allies prefer a voluntary, non-binding approach.
The Indonesian hosts have been trying to bridge the gulf between the two sides with a text that excluded firm numerical targets for 2020, but did contain acceptances that greenhouse gas emissions need to be stabilised by the end of the next decade and that rich nations should play the major part in the effort.
Both the European and US/Canada blocs have suggested over the last two weeks that at some point, developing countries would need to look at limiting their carbon emissions.
Some developing country delegates complained they had been put under "strong pressure" to curb their emissions, according to Munir Akram, UN ambassador for Pakistan who chairs the G-77 bloc of nations.
Mr Munir hinted that "threats" had come in the form of trade sanctions.
The talks were dismissed as "posturing" by Angus Friday, Grenada's Ambassador to the UN and chair of the Alliance of Small Island states.
"We are just very disappointed at this stage. We are ending up with something so watered down there was no need for 12,000 people to gather here in Bali to have a watered-down text. We could have done that by email," he said, according to Reuters news agency.
But the US Deputy Assistant Secretary of State, Kurt Volker, defended the US reluctance to agree to specific emissions reductions targets.
"It's one thing to put out a number, it's another to have the policies in place" to enable all countries to plan beyond the 2012 Kyoto targets, he told the BBC's Newsnight programme.
Away from the issue of emissions cuts, provisional agreement was reached on several ingredients of the Bali roadmap, including paying poorer countries to protect their forests.
This is widely acknowledged as the cheapest single way of curbing climate change, and brings benefits in other environmental areas such as biodiversity and fresh water conservation.
Delegates agreed on a framework that could allow richer nations and companies to earn "carbon credits" by paying for forest protection in developing countries.
"We need to find a new mechanism that values standing forests," said Andrew Mitchell, executive director of the Global Canopy Programme, an alliance of research institutions.
"Ultimately, if this does its job, [deforestation] goes down to nothing."
Mr Mitchell said the only feasible source of sufficient funds was a global carbon market.
But many economists believe mandatory emissions targets are needed to create a meaningful global market.
'Out of step'
Environmental groups sought to maintain pressure on the US as the talks overran their scheduled end.
"The Bush administration is well out of step with the American population, and increasingly out of step with US business," Chris Miller of Greenpeace told BBC News.
"It's our hope that Europe, developing countries, China and the G-77 stay strong and keep up the pressure on the Bush administration."
The US is the world's biggest emitter of greenhouse gases, and most parties recognise that climate change talks without it would be meaningless.