About 45,000 Verizon Communications employees are set to end a two-week strike and return to work by Tuesday after the telephone company and unions said they reached an agreement to resume bargaining.

Almost half of the workers in Verizon's wireline business went on strike on August 7 after talks for a new labor pact failed when their contract expired.

Under the latest agreement, reached early on Saturday morning, Verizon promised to extend the terms of the old contract indefinitely while it continues bargaining for a new one with unions representing technicians and customer service workers.

Workers will start to head back to work for late shifts on Monday night and the rest of the striking workers will show up to their jobs on Tuesday, one of the unions said.

Neither side would provide details about how the agreement was reached, but both sides continued to nip at each other.

Tens of thousands of Verizon managers were asked to work 12 hours a day for six days a week and many worked more than that to cover for the strikers, said Verizon spokesman Richard Young. Verizon said its management team's work helped convince the unions to begin bargaining with us in good faith.

The fortitude and efforts of our managers have proven to be our strongest point of leverage in bargaining, Marc Reed, Verizon's executive vice president of human resources, said in a statement.

The Communications Workers of America said it was outraged by the company's comments, and demanded a retraction.

It is both inaccurate and insulting, the CWA said in a statement. We agreed with management not to claim victory in changing the process, reinstituting the contract or shaping our goals. We will be prepared to fight and fight hard whenever necessary if Verizon believes it can resume negotiations on that basis.

The agreement to continue talks follows an announcement by the company last week that healthcare benefits would expire on August 31 for workers who were still on strike at the time.

This would have affected 35,000 workers represented by the Communications Workers of America, and another 10,000 members of The International Brotherhood of Electrical Workers in nine states and the District of Columbia.

BITTER DISPUTE

The decision to end the strike came after the unions and the company were able to agree on a structure and focus for bargaining on key issues such as jobs, employment security and financial issues such as healthcare contributions and pensions, according to CWA President Larry Cohen.

Cohen told Reuters that the issues on the table are complicated and will take some time to work out but he said the union was looking forward to the joint process.

We would both say that this focus is much better than it was two weeks ago, Cohen said.

The striking workers are in Verizon's wireline business which provides telephone, Internet and television services.

Verizon is looking to cut costs in this business, which has been declining for years as consumers have been hanging up home phones in favor of cellphones and Internet services.

But the unions had argued that Verizon was looking for too many concessions in areas such as healthcare contributions, pensions and work rules.

Verizon said it had made headway with negotiating a number of local and regional issues with the unions.

The dispute quickly turned bitter as Verizon complained of network sabotage on the second day of the strike while the unions said picketers were injured by vehicles driven by Verizon managers covering for the strikers.

Both sides also swapped complaints at the National Labor Relations Board.

Cohen said the problems facing the strikers went beyond Verizon and its workers. He argued that there should be some kind of national framework for workers healthcare and bargaining rights.

I don't really blame Verizon leadership for this problem, he said. It's the nation.

(Additional reporting by Mark Weinraub in Chicago; editing by Vicki Allen and Sandra Maler)

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