Eurozone finance ministers are preparing for a vital third meeting, in Brussels, to try to solve the crisis over Greece’s bail-out.
Greece has put forward a proposal for a six-month extension of its eurozone loan programme instead of renewing its existing bailout deal, which comes with harsh austerity measures.
But Germany has already rejected this.
The existing bailout deal expires at the end of the month and Greece could run out of money without a new accord.
On Friday the German government’s stance appeared to soften after a spokeswoman for German Chancellor Angela Merkel said Greece’s request for a loan extension from its eurozone partners provided “a starting point” for more talks.
“From the German government’s point of view, [the request] is still not sufficient,” said Christiane Wirtz said. But “it certainly offers a starting point for further talks.”
Earlier on Friday Finnish finance minster, Antti Rinne hinted at “a spark of hope” of finding a solution at Friday’s meeting, following a 50-minute phone call between Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel on Thursday night.
“Last night, a spark of hope arose that an understanding could be reached… so that Greece could continue the underlying programme to strengthen its economy,” Antti Rinne told a Finnish newspaper.
Finland had previously joined Germany in rejecting the Greek proposal.
One Greek government official described the phone call as “constructive”, adding: “The conversation was held in a positive climate, geared towards finding a mutually beneficial solution for Greece and the eurozone.”
Germany stands to lose up to €80bn if Greece were to leave the eurozone.
Mr Tsipras won elections in late January on a platform of rejecting the austerity measures tied to the bailout.
A Greek government source said on Thursday the Eurogroup had “just two choices: to accept or reject the Greek request. We will now discover who wants to find a solution, and who does not”.
Also on Friday, the Greek parliament is set to vote on a series of social reform bills that flout its bailout obligations.
A German finance ministry spokesman said Greece’s new suggestion was “not a substantial proposal for a solution”.
The United States urged European leaders and Greece to all make concessions. Treasury Secretary Jack Lew spoke by phone with several senior European officials.
Meanwhile, Italian Prime Minister Matteo Renzi spoke to Mr Tsipras and European Commission President Jean-Claude Juncker in a further effort to strike a deal, an Italian government source said.
Greece formally requested a six-month extension to its eurozone loan agreement on Thursday, offering major concessions as it raced to avoid running out of cash within weeks.
The BBC’s Mark Lowen in Athens says Germany’s swift rejection of the proposal suggested “a rift between Brussels and Berlin at the very highest level”.
A top European official said the stand-off had come down to a clash of personalities between German Finance Minister Wolfgang Schaeuble, who objected to the negotiating style of his Greek counterpart, Yanis Varoufakis.
“There is a real problem of personalities and I understand that. Schaeuble is outraged by comments made by Varoufakis,” the official said.
The Greek request letter includes a pledge to maintain “fiscal balance” for a six-month period, while it negotiates with eurozone partners.
The Greek government was also reported as saying that its extension proposal was in order to give Athens enough time, without the threat of “blackmail and time deficits”, to draw up a new agreement with Europe for growth over the next four years.
The German finance ministry spokesman said the Greek request was an attempt at “bridge financing, without meeting the requirements of the programme. The letter does not meet the criteria agreed upon in the Eurogroup on Monday.”
Any agreement on Friday must be unanimous.