Leaders are gathering for the final scheduled day of the UN climate summit, amid uncertainty over the shape of any eventual deal.

A draft political agreement drawn up by a small group of countries including the UK, US and Australia was rejected during overnight discussions.

Delegates described the situation as "confusing" and "desperate".

As well as the leaders' session, talks are scheduled on texts that sources say remain full of fundamental divisions.

One developing country negotiator told BBC News that the draft political accord had arrived "as if from God".

The summit as of this morning is a summit in crisis Achim Steiner UNEP

BBC environment correspondent Richard Black says some developing countries have repeatedly complained during the two weeks here of high-handed treatment by the Danish hosts and the West in general.

"It is very confusing, and developing countries are very disappointed because they've invested a lot of time in the documents they're negotiating here - the Kyoto Protocol discussions have been going on for four years," said Martin Khor, executive director of the South Centre, a Geneva-based think-tank.

"Now this other thing comes to undermine it, and people feel their time has been wasted," he told BBC News.

"One country I spoke with told me 'we've been played'; but I don't think it's so easy to do that any more."

Signs of movement?

Achim Steiner, director of the UN Environment Programme (UNEP), told BBC News: "Only the heads of state can bring this summit to a successful conclusion."

He added: "They are the only hope we have, but the summit as of this morning is a summit in crisis."

Ministers cancelled morning press engagements, reportedly to engage in further last-minute diplomacy.

Late on Thursday there was optimism about an agreement, despite fears it might not prevent a "catastrophic" 3C (5.4F) temperature rise.

Denmark's prime minister had spoken of "very fruitful" talks just before US President Barack Obama arrived in Copenhagen for talks with 118 other world leaders.

Both the US and China, the two largest emitters of greenhouse gases, indicated they might make concessions.

China signalled it might allow some monitoring of emission curbs while the US said it would commit money for developing countries.

COPENHAGEN CLIMATE SUMMIT Delegates from 193 nations are in Copenhagen to negotiate an agreement on curbing greenhouse gas emissions, in order to prevent dangerous climate change Developing nations want rich nations to cut emissions by at least 25% by 2020 - rich nations are reluctant to go so far and want developing countries to curb emissions too The US will not accept legally binding emissions cuts unless China does the same. China has been vague on allowing international scrutiny of its emission cuts Ongoing disagreement on how funds to mitigate and adapt to climate change will be provided. Poor nations want direct aid, while the West favours schemes like carbon trading

Denmark's Lars Loekke Rasmussen called late-night talks with a group of 26 influential world leaders on how to unblock negotiations.

"We discussed how we can make progress and we had a very fruitful, constructive dialogue... for almost two hours," he told reporters.

After the leaders left, their aides continued working through the night on a political agreement for them to inspect on Friday.

In another development, President Obama may reach an agreement in principle on nuclear arms reduction with his Russian counterpart, Dmitry Medvedev, when they meet in Copenhagen on Friday, a senior US official said.

Despite many expressions of concern about projections of climate change, finance has emerged as an issue more likely to make or break a deal than emission pledges, the BBC's Richard Black reports from Copenhagen.

US Secretary of State Hillary Clinton said her administration was prepared to help establish funding of $100bn a year for developing countries if a deal emerged that met US requirements.

The key US demand is "transparency" from China, seen as a must if the US Senate is to pass legislation controlling emissions.

COPENHAGEN LATEST

• The US, the EU, Mexico and others circulated a draft political declaration during the night, but failed to get support
• High-level talks this morning
• Final plenary session starts after lunch and could run into the night
• Barack Obama and some other leaders set leave Copenhagen today whatever happens

Updated: 09:20 GMT, 18 December

• Richard Black in Copenhagen
• Q&A: Copenhagen summit

While Beijing has been hostile to this notion, Chinese Vice Foreign Minister He Yafei said China was ready to engage in "dialogue and co-operation that is not intrusive, that does not infringe on China's sovereignty".

There was no immediate reaction from the US delegation to the Chinese offer but, an Associated Press correspondent reports, it went a long way toward meeting American demands.

Earlier, Indonesia's President Susilo Bambang Yudhoyono called for all states, both developed and developing, to be flexible about verification.

He indicated the possibility of setting up an international mechanism for monitoring emission cuts.

The draft declaration is reportedly set to mention a cap of 2C but a document prepared by the UN climate convention secretariat, which was leaked earlier, confirms that current pledges on cutting greenhouse gas emissions are almost certainly not enough to keep the rise in the global average temperature within that level.

The analysis says that to achieve that goal, global emissions should be kept at or below 44 gigatonnes (Gt) of carbon dioxide equivalent (CO2e) in 2020.

But if enacted, the current maximum pledges from developed countries would leave emissions 1.9Gt above that figure; minimum pledges would mean missing the target by 4.2Gt.

Unless this gap is closed, it says - for example by developed nations raising their current overall offer to a cut of 30% from 1990 levels by 2020 - global emissions will "remain on an unsustainable pathway that could lead to concentrations equal or above 550ppm, with the related temperature rise around 3C".

"The stark message for world leaders at Copenhagen is that the proposals on the table - especially from industrialised countries - fall far short of what the world needs," said Keith Allott, head of climate change for WWF in Britain.