WASHINGTON - U.S. Senate Democrats said they reached agreement on an abortion compromise with a crucial holdout, Senator Ben Nelson, on Saturday in a deal that could clear the way for passage of a sweeping healthcare overhaul.

Democratic senators and aides said a long day of negotiating on Friday concluded with agreement on language that resolves Nelson's concerns that federal funds are not used to pay for abortions under the bill.

Nelson, potentially the crucial 60th vote for the bill, would vote with Democrats to cut off debate and move to final passage, according to Democratic Senator Charles Schumer and Democratic Senate aides. He planned to make a statement later in the morning.

There were lots of fits and starts, said Schumer, who said there were 13 hours of negotiations on Friday. He is in agreement.

Nelson will vote to cut off debate in the first of a series of crucial procedural votes scheduled to begin at 1 a.m. (6 a.m. British time) on Monday and could possibly conclude with final passage on Christmas Eve of President Barack Obama's top legislative priority.

Democratic Senator Barbara Boxer, a strong supporter of abortion rights, told reporters she believed the compromise would manage to separate public and private funds for abortion coverage under the bill.

Republican Senate leader Mitch McConnell has vowed to use every tool possible to delay the bill, and he forced the public reading of an amendment Reid unveiled on Saturday that makes final changes in the measure, including the abortion language.

Obama has asked the Senate to finish by year's-end to prevent the issue from spilling into the campaign for November 2010 congressional elections. Opinion polls show the bill losing public support, with majorities now opposed to it.

The Senate bill would extend coverage to 30 million uninsured Americans, provide subsidies to help them pay for the coverage and halt industry practices like refusing insurance to people with pre-existing medical conditions.
Nelson had not agreed to earlier compromise language designed to strengthen a ban on using federal funds for abortions. He and other abortion rights opponents fear the federal subsidies could be spent on plans covering abortion.

A version of the healthcare bill passed by the House of Representatives on November 7 includes the stricter anti-abortion language favoured by Nelson, but the Senate rejected an amendment incorporating the language last week.

Reid already accommodated moderates like Senator Joe Lieberman, an independent who caucuses with Democrats, by eliminating plans for a government-run insurance option and an expansion of the Medicare government health program for the elderly.

(Reporting by John Whitesides, editing by Anthony Boadle)