Aides say US President Barack Obama and Republicans move closer to debt deal

US President Barack Obama and top Republican John Boehner have met at the White House as hopes rose that a debt deal could be reached

Aides from both parties said they are optimistic that an agreement can be made in the coming days to avert the so-called "fiscal cliff".

Mr Boehner, the speaker of the Republican-controlled House of Representatives, has edged closer to Mr Obama's demand to raise taxes on the wealthiest Americans.

In return, Mr Obama is considering a measure that would slow the rate of growth of Social Security retirement benefits.

Senate Democratic leader Harry Reid said his chamber will wrap up work on the issue after Christmas.

Unless a deal is done by the end of the year, all Americans will see their taxes go up and steep budget cuts will come into force.

US stocks rose amid Wall Street's hopes of a political compromise that would prevent the economy from going over the so-called "fiscal cliff" in two weeks.

The Dow Jones added 100 points at 13,235

And the Nasdaq gained 39 points to close at 3,010.