A bipartisan group of 10 senators unveiled a sweeping energy plan Friday that calls for some expansion of offshore drilling, a move that could break a major stalemate on Capitol Hill just weeks before the election.

After weeks of internal wrangling, the group, led by Sens. Kent Conrad (D-N.D.) and Saxby Chambliss (R-Ga.), floated legislation that seeks a middle ground in the debate that has paralyzed nearly all Senate business over the past month, including a major defense policy bill Thursday night.

The bill would provide cover to Democrats, who have been pummeled by voters concerned about $4-a-gallon gasoline and have tried to find a way to mollify longstanding concerns about the impact of oil drilling on the environment.

Instead of allowing exploration all along the coastal United States, the bill would allow exploration in areas of the Gulf of Mexico and give Virginia, North Carolina, South Carolina and Georgia the option to lease land for drilling off their shores. Drilling would not be allowed within 50 miles of the coasts.

“This is substantial,” said Sen. Mary Landrieu (La.), a conservative Democrat who faces a tough reelection in the fall. “This is opening up 200 million new acres of potential development. Two hundred. Remember, the last bill we did, we were proud when we got 8 million.”

But at the same time, the measure could put her party’s presidential candidate, Sen. Barack Obama, in a tough spot. The Illinois Democrat has been unyielding in his opposition to new offshore drilling, while his opponent, Sen. John McCain (R-Ariz.), now supports lifting a longstanding congressional ban on exploration on the Outer Continental Shelf.

In a statement, Obama called the bill “an important step in the process,” but signaled that he opposed the offshore drilling provisions.

“I remain skeptical that new offshore drilling will bring down gas prices in the short term or significantly reduce our oil dependence in the long term, though I do welcome the establishment of a process that will allow us to make future drilling decisions based on science and fact,” Obama said.

Obama said he backed provisions to repeal tax breaks for oil companies and to promote investment in renewable sources, such as wind, solar and biomass fuel.

The bill also provides loan guarantees to boost the investment into coal-to-liquid fuel, inject $20 billion to transition 85 percent of country’s motor vehicles so they can be powered by non-petroleum-based fuels within 20 years, and broaden nuclear energy production.

The bill leaves out some of the most controversial energy provisions, including ramping up fuel efficiency for cars and light trucks, establishing mandates for electric utilities to use renewable energy and opening up Alaska’s Arctic National Wildlife Refuge to oil drilling.

By floating a compromise, the group is putting pressure on party leaders to take up the measure in September after both parties take heat from voters over the August recess.

Senate Majority Leader Harry Reid (D-Nev.) is now caught in the middle, between Obama’s opposition and support from the conservative wing of his party. In a statement, Reid said the proposal offers “some very good ideas” but said he does “not agree with every part of it.” He and Minority Leader Mitch McConnell (R-Ky.) agreed to hold a bipartisan energy summit to discuss proposals in September.

Speaking to reporters, Reid said it's "doubtful" the bipartisan group's entire package could pass the Senate.

"But if we take pieces of what they think that are good, we think that are good, I don't see why we . . .  can't come up with something better. Without trying to rain on anybody's parade. Drilling is not the answer. It might be an answer to figure out if we can have some kind of compromise."

In September, there will likely be a big fight over the continuing resolution to keep the government operating. The measure likely will include Congress’s yearly offshore drilling ban.

But the group of 10 lawmakers deflected questions on whether they would oppose the continuing resolution if it includes the drilling ban.

“They’re not tied together,” said Sen. Mark Pryor (D-Ark.).

J. Taylor Rushing contributed to this story.