Most Democrats prefer an approach in which the U.S. would redeploy troops if the Iraqi government failed to meet these criteria — a position that is a non-starter for President Bush. But Hoyer indicated his party’s openness to more flexibility, saying, “We can still move ahead with economic consequences, and we can still move ahead with reporting requirements of the president on our progress.”

Hoyer stressed that Democrats would not leave the troops without funding, even if that means alienating the liberal wing of the party. He said that it “remains to be seen” whether he and Pelosi can hold together the caucus when the compromise bill is up for a vote.

Hoyer told CNN that the Democrats’ willingness to compromise is “a question of recognizing reality.”

“It’s clear that we can’t pass a bill over the president’s veto, and it's clear that he can’t pass a statute without our help,” he said.

Democrats still want to see Defense Department guidelines in the compromise bill that deal with the training and deployment of U.S. troops. Hoyer said that such rules — which cover how long troops can stay in Iraq, how much rest they get between deployments, and the kind of training they receive — should still be pursued.

“And if they’re not pursued, the president ought to tell the American public why they’re not,” he said.

While both sides have their work cut out to reach an agreement, Hoyer is confident that such a deal can move through Congress this month.

“Speaker Pelosi and I have both said we expect a bill to pass the Congress before the Memorial Day break, which the president will sign,” Hoyer stated.