Europe toned down a clash with the United States over 2020 climate goals on the final day of U.N. talks in Bali on Friday, raising hopes of a deal to start negotiations on a new global warming treaty.

I think that the situation is good, the climate in the climate conference is good, that we will have success in the end, German Environment Minister Sigmar Gabriel said in a shift to conciliation with Washington after confrontation on Thursday.

All parties are willing to be flexible, to search for a compromise, he said of Europe's past insistence that Bali should set tough 2020 guidelines for greenhouse gas cuts despite opposition from Washington.

The talks on the Indonesian resort island, which began on December 3, are aimed at reaching agreement to launch two years of negotiations to work out a new international climate treaty to succeed the U.N.'s Kyoto Protocol beyond 2012.

Kyoto binds all industrial nations except the United States to cut greenhouse gas emissions by 5 percent below 1990 levels by 2008-12, a first step towards combating the trend to ever more heatwaves, desertification, melting glaciers and rising seas.

The United Nations wants a new deal to involve all nations, led by the United States, the top emitter of greenhouse gases mainly from burning fossil fuels, and including poor nations such as China and India where emissions are soaring.

PAST BEDTIME

There are intensive negotiations going on, Yvo de Boer, head of the U.N. Climate Secretariat, told environment ministers as the Bali talks started a final session on Friday to approve draft decisions ranging from sharing green technology to a plan to slow the rate of deforestation.

Earlier, he told Reuters that the talks were likely to drag on long into the night way past your bedtime.

It's a hard slog, but really worth it, British Environment Secretary Hilary Benn told Reuters. The U.S. delegation declined comment, repeatedly delaying a planned news conference.

Tempers flared on Thursday after the EU and the United States accused each other of blocking the launch of talks. European Commissioner Stavros Dimas threatened to boycott U.S. climate talks in Hawaii next month if Bali failed.

Early on Friday, Indonesia suggested dropping an EU-backed ambition for rich nations to cut emissions by between 25 and 40 percent by 2020 in a bid to overcome Washington's opposition. Washington says any figures would prejudge the negotiations.

De Boer said the new draft was the basis for a compromise because it retained a guideline, consistent with the EU's 2020 target, that world emissions should peak within 10 to 15 years and be cut by to well below half of 2000 levels by 2050.

It was not clear if the United States and other countries would agree to the text.

U.N. Secretary-General Ban Ki-moon warned of the risks of failure in Bali. That would be very serious, he said, but added: I think there will be an agreement.

U.N. CHIEF FLYING BACK

Ban, on a visit to East Timor after attending the Bali talks, would make an unscheduled return on Saturday morning to give a news conference, his spokeswoman Michelle Montas said.

Outside the conference, activists dressed as polar bears paraded in the sweltering heat carried signs saying save humans too. They urged delegates to remember that the world's poor were already feeling the impact of climate change.

President George W. Bush rejected Kyoto in 2001, saying caps on emissions would threaten U.S. jobs and unfairly excluded targets for major developing economies.

But the United States has agreed to join talks on a new treaty, meant to be agreed in Copenhagen in late 2009 after Bush leaves office, with the participation of developing nations.

On other issues, the Bali talks agreed steps on Friday to slow deforestation. Trees store carbon dioxide as they grow.

The agreement on deforestation is a good balance between different countries' views and is one of the substantial achievements of this conference, Dimas said.

He said the agreement launched pilot projects, which would tackle deforestation and forest degradation, and contribute to harder proposals in a broader climate pact in 2009.

-- For Reuters latest environment blogs click on:

blogs.reuters.com/environment/

(Additional reporting by Adhityani Arga, Emma Graham-Harrison, Sugita Katyal and Gde Anugrah Arka in Bali; Ed Davies in Dili, Jeremy Lovell in London; Writing by Alister Doyle and David Fogarty; Editing by Alex Richardson)

China India Germany United kingdom