WASHINGTON (AP) -- The Bush administration and Congress anxiously revived negotiations Friday on a $700 billion financial bailout, one day after the largest bank collapse in U.S. history provided a brutal reminder of the risks of failure.

"I'm convinced that by Sunday we will have an agreement that people can understand on this bill," predicted Massachusetts Rep. Barney Frank, a key Democrat in eight days of up-and-down talks designed to stave off an economic crisis.

House Speaker Nancy Pelosi added that "progress is being made," although neither she nor Frank divulged details at a late-afternoon news conference in the Capitol. Talks continued into the evening.

Frank and Pelosi spoke a few hours after President Bush prodded lawmakers to "rise to the occasion" -- and quickly.

In one small sign of progress, House Republicans dispatched their second-ranking leader, Rep. Roy Blunt of Missouri, to join the talks after their objections to an emerging compromise had brought negotiations to a standstill the day before. They also demanded "serious consideration" for a plan of their own, involving less government intrusion and lower cost to the taxpayers than the $700 billion that Treasury Secretary Henry Paulson has been seeking.

The legislation the administration is promoting would allow the government to buy bad mortgages and other sour assets held by investors, most of them financial companies. That should make those companies

NEW YORK (AP) -- Oil prices fell just over $1 a barrel Friday as a U.S. financial bailout plan remained stuck in legislative limbo, raising investor worries that the economic crisis could deepen and further erode domestic energy demand.

Crude's fall erased some of the previous day's gains, though prices have largely been in a holding pattern as oil traders await resolution on the stalled the $700 billion rescue package.

"There's really no impetus to push things higher or lower. The market is simply waiting for guidance from the bailout plan," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

Negotiations continued Friday to revive the White House-backed initiative, a day after talks broke down in heated disagreement over the scope and cost of the unprecedented government intervention. The measure would remove billions of dollars in bad mortgages and other risky assets from banks' balance sheets in a bid to calm frenetic financial markets and soothe a jittery public.

Some conservative GOP lawmakers Thursday denounced the plan as an unnecessary federal intrusion into the private sector and proposed a dramatically different scheme under which financial firms with bad assets would pay the Treasury to insure them, rather than sell them outright to the government. It was unclear what form the final proposal would take, though lawmakers from both parties reported making progress on a plan late Friday.

Still, the prospect of a deal being scuttled or delayed rattled investors who were counting on the capital infusion to steady the teetering financial system. Any further softening in the economy could lead to

WASHINGTON (AP) -- Urgent efforts to lash together a $700 billion rescue plan for the national economy appeared to be stalling Thursday night, hours after key lawmakers had declared they had reached a deal.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke sped to Capitol Hill to try to revive or rework the proposal that President Bush said must be quickly approved by Congress to stave off economic disaster.

Congressional leaders were to meet with the economic chiefs into the night.

After six days of intensive talks on the unprecedented package proposed by the Bush administration, with Wall Street tottering and presidential politics intruding six weeks before the election, there was more confusion than clarity.

The day's earlier apparent breakthrough, announced with fanfare at midday, was followed by a White House summit bringing together President Bush, presidential contenders John McCain and Barack Obama, and top congressional leaders. But that meeting, aimed at showing unity in resolving a national financial crisis, broke up with conflicts in plain view.

Inside the session, House Republican leader John Boehner expressed misgivings about the emerging plan and McCain would not commit to supporting it, said people from both parties who were briefed on the

NEW YORK (AP) -- The Wall Street Journal is reporting that JPMorgan Chase & Co. has struck a deal to acquire the deposits and some of the branches of Washington Mutual Inc., which has been battered by soured mortgages.

The paper, citing people familiar with the matter, says the deal brokered by the government will not impact the FDIC insurance fund.

The Seattle-based thrift, the nation's largest, has roughly $310 billion in assets and was searching for a lifeline after a credit-rating downgrade further raised questions about its future.

Calls to JPMorgan and WaMu spokesmen and federal regulators were not immediately returned.

JPMorgan has scheduled a conference call for 9:15 p.m. ET Thursday.

DETROIT (AP) -- Maybe Daimler wants to cut its losses on Chrysler, or Cerberus Capital Management wants to own the U.S. automaker outright. Whatever the motivation, the companies confirmed Wednesday that talks are under way for Daimler to sell its remaining 19.9 percent stake in Chrysler to the private equity firm.

Neither side would give further details, except Cerberus said it approached Daimler and if the transaction is successful, "all existing industrial relationships between Daimler and Chrysler would continue."

The talks, reported earlier Wednesday in Germany's Manager Magazin, come amid a crisis in the U.S. auto industry with falling sales, billions in losses and a dramatic market shift away from trucks and sport utility vehicles to small, fuel-efficient cars. Chrysler LLC's U.S. sales are down 24 percent through August, the worst performance of any major automaker.

Analysts say it's a good time for Stuttgart, Germany-based Daimler to bail out, but it may be a bad time for Cerberus, which already is overexposed to U.S. economic problems, to spend more money on a losing operation.

"I can see why Daimler would want to exit," said Mark Warnsman, an auto analyst with Calyon Securities. "The only reason I could think that Cerberus would want more exposure is they're getting a very attractive price."

Cerberus Capital Management LP bought 80.1 percent of Chrysler from Daimler AG in August 2007 in a $7.4 billion deal. The sale ended a stormy nine-year partnership between Daimler and Auburn Hills, Mich.-

WASHINGTON (AP) -- The House, responding to growing public demand for more domestic energy, voted Wednesday to end a quarter-century ban on oil and natural gas drilling off the Atlantic and Pacific coasts, giving Republicans a major victory on energy policy.

An extension of the ban for another year was left off a $630 billion-plus stopgap government spending bill that President Bush had threatened to veto -- possibly shutting down the government -- if the anti-drilling measure were included.

The bill was approved 370-58 and now goes to the Senate, where it is likely to be approved within the next few days, also without the drilling ban.

The decision to avoid a fight with the White House over offshore drilling marks a major shift by Democrats on energy policy and a reflection that the GOP argument for more domestic energy production had found a support among voters this election year, even though coastal states long have worried that offshore drilling might cause spills, soil beaches and threaten their tourist businesses.

Republican presidential nominee John McCain has made expanded offshore drilling a central part of his campaign, arguing that access to an estimated 18 billion barrels of oil in the off-limits Outer Continental Shelf is essential if the country is to become more energy independent.

McCain's Democratic presidential rival, Barack Obama, also has endorsed limited expansion of offshore drilling, but only as part of a broader energy package that boosts use of alternative energy sources and

NEW YORK (AP) -- Oil prices ended a choppy session slightly lower Wednesday, falling below $106 a barrel as weak U.S. fuel demand and a stronger dollar outweighed concerns over a reduction in global crude output.

Light, sweet crude for November delivery fell 88 cents to settle at $105.73 a barrel on the New York Mercantile Exchange after rising as high as $109.50. On Tuesday, the contract fell $2.76 to settle at $106.61.

Crude prices have risen about $15 in the past week as investors funnel money back into commodities on worries that a proposed $700 billion bailout of financial firms will undercut the dollar and boost inflation.

But analysts said signs of weak U.S. demand for fuel have taken some of the momentum out of the rally. The economic slowdown has forced American consumers and businesses to cut back on energy use, sending oil prices falling from a record $147.27 a barrel reached July 11.

Demand for gasoline over the four weeks ended Sept. 19 was 3.5 percent lower than a year earlier, averaging 9 million barrels a day, the U.S. Energy Department's Energy Information Administration said in its weekly inventory report.

"Demand continues to be sluggish at best," said Andrew Lebow, senior vice president and broker at MF Global in New York. "Some people want to own real assets as an inflation hedge but others see crude as a consumable good, and any economic weakness is going to be bearish factor even if this bailout gets approved."

Highlighting Americans' reduced driving habits, filling stations hungry for business continued to ratchet

CHARLOTTE, N.C. (AP) -- American International Group Inc. may have agreed to take the U.S. government up on a two-year, $85 billion loan to help stave off bankruptcy, but now the nation's largest insurer faces an FBI investigation.

The news sent AIG shares down nearly 34 percent Wednesday.

Law enforcement officials said Tuesday that the FBI was investigating the New York-based insurer for potential fraud, as well as mortgage finance companies Fannie Mae and Freddie Mac, and investment bank Lehman Brothers Holdings Inc.

The inquiries will focus on the financial institutions and the individuals who ran them, a senior law enforcement official said.

The law enforcement officials spoke on condition of anonymity because the investigations are ongoing and are in the very early stages.

The four financial institutions' recent travails helped trigger the government's $700 billion bailout plan, which continued to be discussed on Capitol Hill Wednesday. Lehman Brothers filed for bankruptcy and the government has already taken over Fannie Mae and Freddie Mac.

AIG spokesman Joseph Norton said Wednesday the company did not have details on the FBI investigation, but said "of course we will cooperate."

All four companies saw their stock prices plummet this year, as they struggled to survive under the weight