"I think we're moving closer to an agreement although we're not there yet," Blumenthal said in a telephone interview. Blumenthal is working with other attorneys general from Northeast states who want the two oil firms to sell some of their gasoline stations in markets where they have a strong presence.

He did not comment on the state of negotiations. However, those familiar with the talks have said that -- among other conditions -- regulators seek divestiture in markets where both Exxon and Mobil operate branded gasoline stations. The goal would be to preserve competition among gasoline stations in the Northeast, as required by antitrust law. In Dallas, a spokesman for Exxon said discussions are continuing with the Federal Trade Commission and state attorneys general on a daily basis, "withthe objective to enable the FTC to complete its review around the end of the third quarter."

US law leaves open the question of when the merger talks must be completed, but matters are different in Europe where deadlines are controlled by law. The final European deadline for the merger is Oct. 12 but a spokesman in Brussels said the European Commission will make its final ruling on Wednesday. Karel Van Miert, until last week the European Union's competition commissioner, has indicated that the firms will receive conditional clearance from the 15-nation bloc.

The clearance is widely thought to hinge on the unwinding of a 1996 European joint venture between BP Amoco and Mobil for refineries and gasoline stations in Europe. On the same day that the commission considers the Exxon-Mobil deal it will also consider a proposed merger between BP Amoco and Atlantic Richfield Co. the joint venture were allowed, all four companies would be involved in a single enterprise. BP Amoco has made clear it wants to buyMobil's 30-percent share in the venture.