COPENHAGEN - World leaders worked toward a target of halving greenhouse gas emissions on Friday, but a draft text abandoned ambitions for a legally binding climate treaty next year in a sign divisions remain.

U.S. President Barack Obama and other leaders joined the final day of U.N.-led talks to try to break a deadlock caused by disagreements over the timing and extent of emissions cuts and the international scrutiny of emissions curbs.

But the failure of leading greenhouse gas emitters China and the United States to come up with new proposals further hobbled Friday's talks. Some participants in the Dec 7-18 negotiations said they would talk for as long as necessary.

A new draft text seen by Reuters on Friday said the world should aim to halve greenhouse gas emissions by 2050 from 1990 levels, with rich nations cutting their emissions by 80 percent.

In a concession to developing nations and small island states most vulnerable to climate change, it said a rise in world temperatures should be limited to 2.0 degrees Celsius over pre-industrial times, with a review in 2016 that would also consider a tougher limit of 1.5 Celsius.

Earlier, Obama had addressed the conference and called for immediate action and a willingness to compromise.

We are ready to get this done today but there has to be movement on all sides, to recognize that it is better for us to act than talk, Obama said in a speech.

These international discussions have essentially taken place now for almost two decades and we have very little to show for it other than an increase, an acceleration of the climate change phenomenon. The time for talk is over.

At stake is an agreement for coordinated global action to avert climate change including more floods and droughts. The talks in Copenhagen have battled suspicion between rich and poor countries over how to share out emissions cuts.

Developing countries, among them some of the most vulnerable to climate change, say rich nations have a historic responsibility to take the lead.

The environment minister of EU president Sweden, Andreas Carlgren, said the United States and China held the key to a deal. The United States had come late to the table with commitments to tackle climate change, he said. China's resistance to monitoring was a serious obstacle.

And the great victims of this is the big group of developing countries. The EU really wanted to reach out to the big group of developing countries. That was made impossible because of the great powers, Carlgren said.

U.S. Secretary of State Hillary Clinton arrived in Copenhagen on Thursday with a promise that the United States would join efforts to mobilize $100 billion a year to help poor nations cope with climate change, provided there was a deal.

But there were no such new gestures from Obama.

He stuck to the target of cutting greenhouse gas emissions by 17 percent by 2020 from 2005 levels. That works out at 3-4 percent versus 1990, compared with an EU target of 20 percent.

Chinese Premier Wen Jiabao also reiterated existing targets, although he said the world's top carbon emitter may exceed them.

We will honor our word with real action, Wen said.

Whatever outcome this conference may produce, we will be fully committed to achieving and even exceeding the target.

Obama and Wen then met for nearly an hour in what a White House official described as a step forward.

They had a constructive discussion that touched upon ... all of the key issues, the official told reporters.

They've now directed their negotiators to work on a bilateral basis as well as with other countries to see if an agreement can be reached.

Sweden's Prime Minister Fredrik Reinfeldt urged China and the United States, which together account for 40 percent of global greenhouse gas emissions, to act.

The U.S. and China account for almost half the world's emissions. They simply must do their part. If they don't, we will not be able to meet the 2 degree target, he told the conference.

PROSPECTS 'NOT GREAT'

Speaking after Obama's speech a British official said: The prospects for a deal are not great. A number of key countries are holding out against the overall package and time is now running short.

French President Nicolas Sarkozy said Chinese resistance to monitoring of emissions was a sticking point. The good news is that the talks are continuing, the bad news is they haven't reached a conclusion, he said.

All draft texts seen by Reuters have called for a goal of $100 billion a year by 2020 to help poor nations cope with climate change. They have also supported $30 billion for the least developed countries from 2010-2012, and said the world ought to limit warming to 2 degrees Celsius versus pre-industrial levels.

Scientists say a 2 degrees limit is the minimum to avoid some of the worst impacts of climate change including several meters sea level rise, extinctions and crop failures.

The aim of the two weeks of talks in Copenhagen was to agree a climate deal which countries will convert into a full legally binding treaty next year, to succeed the Kyoto Protocol whose present round ends in 2012. The United States never ratified Kyoto, and the pact doesn't bind developing nations.

(With reporting by Alister Doyle, Gerard Wynn, Anna Ringstrom, John Acher, Jeff Mason, Richard Cowan, David Fogarty, Pete Harrison and Emma Graham-Harrison; Writing by Janet McBride; editing by Dominic Evans)

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