Blair and Cook are cautiously optimistic

The British government was guardedly hopeful on the outcome of the Baghdad peace talks last night, with some optimism that a deal had been reached which would prevent the bombing of Iraq.

Ministers, while encouraged by Kofi Annan's initial reports of his mission to President Saddam Hussein, were eager for more details, especially over UN inspections of President Saddam's palaces - the key issue for Britain and America. Robin Cook, the Foreign Secretary, on his way to Brussels for today's meeting of EU foreign ministers, told The Independent: "I'm pretty confident that Kofi Annan has left him in no doubt about that, and that may partly be contributing to the comparative success of his visit."

British sources said that progress appeared to have been made on the issue of scrutiny of the palaces to establish whether they contained weapons facilities. Mr Annan spoke to Tony Blair, and told him that he believed the agreement would meet the terms set out by the UN Security Council. However, the US was still withholding judgement on the deal. "We've got a lot of serious questions," White House spokesman Mike McCurry said late last night.

- Donald Macintyre, Brussels

Wary welcome, pages 10 and 11