A federal judge said Tuesday he will allow the government to settle legal claims over the 1989 Exxon Valdez oil spill if it guarantees it will not harm the rights of native Alaskan villages.

Alaska Gov. Walter J. Hickel, in Washington to attend the negotiations, told reporters he believes a settlement could be reached by Tuesday."I think it'll be worked out and it'll be worked out soon . . . probably closer to tomorrow," Hickel told reporters. The governor said negotiations continued during the weekend and that most issues had been worked out, but he did not give further details.

U.S. District Judge Stanley Sporkin ordered the government last week not to sign any agreement with Exxon until he determines whether it would damage the rights of the five villages, which contend they are being illegally excluded from the negotiations.

The judge said Tuesday at a hearing he would lift his order and allow a settlement to be signed if both sides agreed on a court order intended to protect the villages' rights.

Such an order should declare that any agreement does not preclude the native Alaskans from pursuing their own claims against Exxon in Alaska state court, Sporkin said. The judge asked attorneys for both sides to report back to him later Tuesday.

The villages were seeking a preliminary injunction barring the government from settling legal claims against Exxon without the villages' participation.

"The United States is seeking to recover a natural resource injury without the consent or participation of the Alaska natives," said their attorney, Michael D. Hausfeld.

Sporkin said, however, "The government tells me that in no way are they going to affect your rights . . . There's nothing there that will allow the government to eliminate your lawsuit up there" in Alaska.

Sporkin said he also would review any settlement that is signed to make sure it protects the villages' rights, and added he would consider transfering the case to a federal court in Alaska.

The native Alaskans fear the government may be negotiating away some of their rights. The Bush administration contends it is not.