BJP general secretary Ram Madhav said if "compromise" was to be made by either side then a solution to the differences would have been found long ago.
"Both the parties are trying sincerely to arrive at an understanding on common minimum programme (CMP) of governance. There are a couple of political issues on which traditionally we have held different views. We are trying hard to find a common ground," he said.
Madhav did not specifically identifying AFSPA and Article 370 as areas of differences.
PDP with 28 MLAs and BJP with 25 MLAs in the 87-member Assembly have been in talks ever since the election results on December 23 last gave a fractured verdict. The state is under Governor's Rule for over a month.
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According to sources privy to the developments, the two sides have possibly agreed on formation of a Committee which will go into the Armed Forces Special Powers Act (AFSPA) and suggest areas from where it could be revoked.
The proposed CMP may also touch upon the issue of more than 25,000 families of West Pakistan Refugees by saying that it was a humanitarian issue which should be addressed in a humanitarian way.