Congress has prevented the White House from paying the money it owes unless it agrees to cut off funding for organisations that promote abortion abroad. The White House, keen to remove the obstacles to agreement on a significant foreign policy priority, is ready to confront pro-abortion groups in what it sees as a good cause.
The UN says that at the end of October, Washington owed it some $1.52bn (pounds 940m) for dues to the regular UN budget, peace-keeping contributions and funds for UN war crimes tribunals. More than $1bn is for peace-keeping costs.
But the US proposes to pay much less than this - about $900m. None the less, if it does not pay then it risks losing its seat in the UN General Assembly, the equivalent of the UN's parliament. Its seat on the UN Security Council would not be affected.
"We have had a breakthrough in terms of our UN dues," the US Secretary of State, Madeleine Albright, said yesterday. "I'm pleased to report that a tentative agreement has been reached between the White House and congressional negotiators that will pave the way for the United States to pay our UN bills."
Ms Albright said that the accord would have minimal impact on American family planning programmes abroad.
Ms Albright, The New York Times reported last week, has agreed that she would take responsibility for a deal that will outrage many women's groups in the US. It would allow some money to go to the groups, but only if the President exercises a waiver arrangement. This would in turn reduce the amount of money available.
A deal on cash for the UN would probably also clear the way for agreement on new money to help relieve the debt of the world's poorest countries. It is part of a complex series of interlinked deals that are part of the annual US budget process. Congress has control of the nation's purse strings, but Mr Clinton can veto its actions.
Nancy Pelosi, a Californian Republican, called the deal a "capitulation". Women's groups called for the Congress to allow money to go to the UN and abortion groups. But Congress is unable to back down, and the deal may be the best the President can get.
The White House is claiming the putative decision on UN cash as one of a number of triumphs abroad, including the deal between Peking and Washington over China's entry to the World Trade Organisation.
"This is a very good day for foreign policy," said Mr Clinton in Turkey, where he was on a state visit.
The National Security adviser, Sandy Berger, said: "A number of critical foreign policy initiatives that we had been working on - in some cases, for many years - have all come together today."
By ending the budget battle, the deal would also clear the way for Congress to end the year on a positive note.
In previous years, when the White House and the Republicans have confronted each other over spending, the Republicans have sometimes come off the worse, appearing negative and partisan. If they can achieve a victory on abortion, then they will also please their political base ahead of next year's elections.