With a Senate panel poised to vote next week, financial industry negotiators said Tuesday that they have tentatively compromised on some controversial parts of the financial reform legislation.

Banking industry participants were optimistic their partial deal with the insurance industry could lead to a breakthrough. But they emphasized that they have not agreed to support the overall bill yet because parts of the deal are fragile and key disputes on other matters remain unresolved.

"We have much more in agreement than we have in disagreement," said L. Thomas Block, a lobbyist for Chase Manhattan Bank who participated in the talks. "This is a formula that could lead to legislation this year."

Under the compromise, bankers and insurance agents have generally agreed on the consumer protections states could impose on bank insurance sales, said Michael P. Smith, president of the New York Bankers Association.

Though details remained sketchy, he said negotiators had agreed to drop a requirement that banks sell insurance and banking products from separate desks in a branch. "We have agreed on a modified safe harbor for state insurance sales regulations, which deletes the most objectionable provisions the banks have identified," said Mr. Smith, whose group hosted some of the talks that began in July.

In addition, the deal would delete a requirement in the legislation that banks must buy an insurance agency in a state before attempting sales there.

The compromise also would preserve protections banks won in the Supreme Court's landmark Barnett decision by letting the Office of the Comptroller of the Currency override state laws that "prevent or significantly interfere" with insurance sales by national banks.

It would also protect banks against any new state law that is unfair but not stiff enough to "significantly interfere" with bank insurance sales, negotiators said.

However, banking industry lobbyists also want this protection applied to state laws already on the books.

"We can't agree to that," said Thomas C. McCrocklin, a lobbyist for the Independent Insurance Agents of America. "We have given and we have given" in order to get bankers to support the bill, but their final demands could be "a deal-killer," he said.

Allen R. Caskie, senior counsel for the American Council of Life Insurance, was more optimistic. "We are 95% there," he said.

According to bank lobbyists, laws in a dozen states, including Ohio, Rhode Island, and Texas, give agents unfair advantages. Failure to resolve this dispute could wreck the deal, agreed Chase's Mr. Block. "Something has to be done to make sure we can get rid of discriminatory current laws."

Some officials outside the talks reacted negatively.

"Bankers will be disappointed," Kenneth A. Guenther, executive vice president of the Independent Bankers Association of America, said in a prepared statement. "This language ... is totally unacceptable."

Mr. Guenther complained that the deal fails to preserve all the current legal protections bankers' enjoy from discriminatory state laws. He also criticized the fact that it sacrifices the preferential treatment, or "deference," courts give rulings by federal bank regulators in legal challenges by states.

The Senate Banking Committee is scheduled to vote Sept. 3 on legislation approved this year by the House that would permit cross-ownership of banking, insurance, and securities firms.

Despite speculation on Capitol Hill that the vote on the complex bill could be postponed by as much as two weeks, a spokesman said the committee intends to move ahead as scheduled.

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