NEW YORK (CNNfn) -Talks between state and tobacco industry officials resumed in Washington Monday amid increasing hopes that a settlement might be reached later this week.
"Not today," Mississippi Attorney General Mike Moore answered, when asked if a final agreement was near. "Not today, but maybe this week."
He later told reporters he would be ready to go to court in July but was optimistic an agreement could be reached instead this week. He said he did not think the talks would stall over any one issue.
But a CNN source close to the talks said Monday evening that there is essentially one major "snag" left in the talks-- the issue of punitive damages. He said the other problems look solvable and that they're trying to find "middle ground" on how to handle future punitive damage suits.
The sticking point: Tobacco industry lawyers wants them banned while state attorneys general and anti-smoking activists want to retain that option.
Several attorneys general are meeting with anti-smoking advocates, class action attorneys, and tobacco industry lawyers in hopes of hammering out a comprehensive nationwide tobacco agreement. The talks began almost three months ago.
An industry source close to the talks agreed that a settlement could be days away.
In addition, several participants in the talks met with White House Deputy Counsel Bruce Lindsey Monday afternoon for about a hour-and-a-half to discuss the progress of the talks.
Another obstacle that appears to be ironed out is the degree of FDA regulation over nicotine in the years ahead. Washington State Attorney General Christine Gregoire says the FDA, as a representative of the public, must have full control over the substance.
"It's important that we produce a safe product that's technologically feasible and will advance the health of the public," she said outside the hotel where the talks are being held.
The industry has expressed concerns that the FDA might have the power to, in effect, ban nicotine if the settlement is signed.
Gregoire, however, said she believes the two sides may soon reach agreement. "I'm guardedly optimistic that they're going to agree because if they don't, we're going to have to walk away from the table," she said.
Thirty-seven states are now suing the tobacco companies to recoup costs spent on patients with tobacco-related illnesses.
The nationwide talks began as an effort to settle the states' lawsuits as well as several class action suits that are now pending..