United Nations Secretary-General Ban Ki-moon on Wednesday urged a positive outcome as the two-week Cancun summit nears its end.

"We must come out with an agreement in Cancun Even though that may not be sufficient, we must have certain development," Ban said in a meeting with China's top climate negotiator Xie Zhenhua.

Delegations from more than 190 countries should strive to hammer out a balanced progress for issues, including a fast-start fund, technology transfers and adaptation along a two-track negotiation process, Xie said.

The fate of the Kyoto Protocol is challenged, and the talks might "end up with an empty shell," Xie said, adding the only legally binding treaty on reductions of greenhouse gas emissions should not only be continued in words, but also in actions and concrete efforts.

Japan, for its part, has bluntly refused to renew its emission reduction commitments under the protocol after 2012. It argued that the Unite States and China - the world's top two greenhouse gas emitters - are not on board for legally binding carbon reduction targets.

Its stubborn position could make all countries' efforts on "a balanced package of outcome" from Cancun turn into a "total failure", said Yang Ailun, Greenpeace China's climate campaigner, as developing countries hold firm that they need to be ensured an extension of the protocol.

Intensive meetings were going on between ministers late into Wednesday night - including one among BASIC countries (Brazil, China, South Africa and India) - to find ways to resolve the impasse.

"We're currently exploring language that could bridge important gaps," Brazil's chief negotiator, Luiz A. Figueiredo, said on Wednesday. "I'm cautiously optimistic that we'll achieve what we came here to do."

Amid the deadlock, the European Union should stand out and take the leadership it boasted in the past, said Yang Fuqiang, the director of global climate solutions, WWF International.

"For instance, raising its current carbon emission reduction targets and holding firm for a second commitment period of the Kyoto Protocol could help invite Japan back and keep the negotiation on the right track," said Yang.

If the Kyoto Protocol cannot be continued, it will pose a challenge to the current negotiation process under the UN Framework Convention on Climate Change (UNFCCC), Xie said.

China is firmly committed to the two tracks of the negotiations under the Kyoto Protocol as well as under the UNFCCC, he said.

For decisions to come out by the end of Friday, the closing day of the Cancun meeting, it's also vital for developed countries to fulfill commitments pledged at Copenhagen on the fast-start fund, which is urgent and critical for developing countries' efforts in coping with climate change, Xie said.

At the same time, decisions should be made on technology transfer, which is one of the least contentious issues.

"The BASIC countries, including China, have been flexible toward the transparency issue, however, we have yet to see concrete progress in issues of finance, technology transfer and commitment to the Kyoto Protocol," Xie said.

By the end of the week, parallel decisions should be made under the two tracks.

Issues such as technology transfer and adaptation cannot work without money. All of these things should move together, Xie said.

Meanwhile, headway has been made as several draft texts on a climate fund, transfer of climate-friendly technologies and mitigation actions by both developed and developing countries - in addition to details ensuring the transparency and accountability of those efforts - that are now ready for ministers to deliberate in their final decisions.

Negotiators have narrowed down the differences, but ministers still have to work to iron out different options left in the draft texts over contentious issues including how to verify mitigation actions in both developed and developing countries.

Observers said the latest draft gives hope that a climate fund can be agreed upon at Cancun.

"A fair climate fund would be a huge step forward in creating the structure that will support developing countries in reducing their emissions and protecting vulnerable people from impacts of climate change," said Tim Gore, the international climate change policy adviser for Oxfam, a UK-based non-governmental organization.

During the meeting between Xie and Ban, the UN secretary-general praised China's flexibility during the sluggish climate change talks and also commended China for its efforts in cutting greenhouse emissions and improving energy efficiency, as well as promoting the use of renewable energies such as solar and wind.

"It is quite encouraging to see the efforts that have been launched by both governments and private sectors," Ban said.

China has cut 1.5 billion tons of carbon dioxide emissions as a result of energy-saving and emission-reduction efforts in the past five years.