The impasse over Greece's future lingered as both sides worked onrival proposals for the conditions of a financial lifeline withdebt payments looming.

Greek Prime Minister Alexis Tsipras said his governmentsubmitted a new plan, while officials from the country's creditorswere said to have agreed on what would be a final offer to avoidthe country defaulting. While the euro rallied on optimism over adeal, Dutch Finance Minister Jeroen Dijsselbloem, who leads theeuro-area finance ministers' group, said institutions are still farfrom any agreement.

“As long as it doesn't meet economic conditions, we can't cometo an agreement,” he told RTL television. “It's not right to thinkthat we can meet halfway.”

Afterfour months of antagonism and extended deadlines, there's evidencenow of greater urgency in efforts to break the deadlock and decideGreece's fate. At the same time, there were mixed messages over howfinal any offer might be and whether any agreement can be reachedthis week.

While Greece pledged to make a debt repayment due to theInternational Monetary Fund (IMF) on Friday, it's the smallest offour totaling almost 1.6 billion euros (US$1.78 billion) thismonth. The timing coincides with the expiration of a euro-regionbailout by the end of June. A senior government official said onTuesday it would continue to meet its obligations based on themeans available.

The euro gained 1.7 percent against the dollar earlier. Greekbonds also rose, with the yield on the two-year security falling183 basis points to 23 percent in Athens.

The deputy parliamentary leader of German Chancellor AngelaMerkel's party, Ralph Brinkhaus, described the negotiatingsituation as “very confused.”

An agreement with Greece remains some way off, with the Germanadministration skeptical that a deal can struck before the Group ofSeven summit in Bavaria on June 7, according to three governmentofficials who asked not to be named because the talks areprivate.

The talks in Berlin resulted in a political agreement fortranslation by the European Commission, the IMF, and the EuropeanCentral Bank (ECB) into technical commitments, one of the officialssaid. The common position among them is that the core principle isthat the program has to add up in terms of budget figures to whatwas agreed previously, the official said.

“You can change the content of the package, you can make otherpriorities, but the total package—as we agreed with the formergovernment—is that the budget must be in order,” saidDijsselbloem.

Berlin Huddle

The meeting in Berlin at the German Chancellery involved Merkel,IMF chief Christine Lagarde, ECB President Mario Draghi, FrenchPresident Francois Hollande, and European Commission PresidentJean-Claude Juncker.

Representatives from the creditor institutions have wrapped uptheir proposal, an international official familiar with the mattersaid. The person asked not to be identified because the talks areprivate.

The same official said the plans will be communicated to Greeceon Wednesday, probably with Tsipras directly.

“After submitting a complete proposal for a deal last night toinstitutions, we are not waiting for them to submit their own planback to us,” Tsipras told reporters on Tuesday. “Greece is the onethat submits the plan.”

Greece submitted a 47-page proposal that includes projections ofa primary budget surplus of 0.8 percent of gross domestic productthis year, down from a target of 1.5 percent in April, state-runAthens News Agency reported. It includes a commitment to a surplusof 1.5 percent in 2016, as well as introduction of three differentsales-tax rates, ANA said.

EuropeanUnion Economic Commissioner Pierre Moscovici earlier told Frenchradio that the European bailout fund was included in negotiationsover releasing aid, raising the prospect that it could play a rolein any deal.

Greece is seeking to access about 7 billion euros from itsexisting bailout before confronting any need for another rescuepackage. Sticking points have included budget measures, pensionreforms, and changes to Greece's labor laws, with Tsipras'santi-austerity government talking about red lines.

Greek central bank Governor Yannis Stournaras said the countryshouldn't raise taxes, though it could end some exemptions. Thecountry and its creditors should now aim to agree on “a morereasonable primary surplus in the future and, in exchange for this,more structural changes,” he said at an event in London onTuesday.

In Frankfurt, the ECB raised the level of emergency cashavailable to Greek banks by 500 million euros, two people familiarwith the matter said. The Governing Council increased the limit to80.7 billion euros, the people said, asking not to be named becausethe talks were private.

–With assistance from Tony Czuczka, Rainer Buergin, PatrickDonahue and Arne Delfs in Berlin, Mark Deen in Paris, Paul Tugwelland Eleni Chrepa in Athens, Scott Hamilton in London, and RebeccaChristie in Brussels.

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