In an announcement on the South Lawn of the White House, US president Bill Clinton said the two sides have "reached terms that form the basis of an agreement."

The pilots will remain on strike at the St. Paul, Minn.-based airline until at least Saturday, when the union's bargaining committee, the Master Executive Council, meets in Minneapolis to consider the pact, the Air Line Pilots Association said in a recorded telephone message to members.

Details of the agreement, crafted over 56 hours this week, were being withheld until that meeting. The two sides met separately with federal mediators in a hotel in this Minneapolis suburb, with deputy White House counsel Bruce Lindsay in town to monitor the talks.

The pilots struck shortly after midnight on Aug. 29 after almosttwo-years of negotiations failed to yield a contract. The key issues were pay and job security.

The pilots and five other unions that are currently negotiating with Northwest are trying to recoup concessions made in 1993 when the airline was on the verge of bankruptcy. In recent years, the airline has rebounded to post record profits.

The strike has caused Northwest to cancel about 1,700 daily flights, affecting roughly 150,000 passengers. It has put a damper on activity at airports in Minneapolis/St. Paul, Detroit and Memphis, where Northwest controls more than three-quarters of the traffic.

Northwest's two commuter affiliates also shut down because of the strike, leaving some Midwest and Southeastern cities without any commercial air service.

Even if the agreement is approved on Saturday, it is likely to take the airline several days to resume flying. Northwest has said it will take eight to 10 days to resume full service once the strike has settled.

The strike has cost the airline about $26million a day in lost revenues, with actual pre-tax losses pegged at about $15 million a day once the airline was able to cut expenses by laying off more than half of its 52,000 employee work force. One analyst said the airline had lost about $300 million, pretax, as of Sunday.

The settlement with the pilots does not end Northwest's labour concerns. The International Association of Machinists and Aerospace Workers, which represents about 27,000 ground workers, has asked that an impasse be declared in its negotiations, which would start a 30-day cooling offer period that could end in another strike.

The National Mediation Board, which oversees airline negotiations, has yet to rule on that request.