Two sources following those discussions said they were moving along, but it was unclear if a deal would be reached before the end of the year.

Lockheed officials had said that the company expected to reduce labor costs by 14 percent from the actual costs of the fourth lot.

Separately, Canada -- one of the eight international partners helping to develop the new plane -- is expected to announce later Wednesday that it will restart its search for new fighter jets, potentially calling into question its previous plans to buy 65 F-35s at a cost of C$9 billion.

A government source told Reuters last week that Canada would study other possible fighters, but could still wind up buying the F-35.

Canada’s decision to launch a new competition is not expected to have much short-term impact on the F-35 program since Canada was only slated to start buying jets in several years.