Afghanistan's disputed presidential election inched towards a possible conclusion Monday with a senior government official hailing a "breakthrough" in talks between the two candidates, who both claim to have won the vote.

Ashraf Ghani and Abdullah Abdullah have been wrangling over a power-sharing deal after the June 14 election was engulfed in allegations of massive fraud that have threatened to spark instability as NATO troops pull out of the country.

"This is a breakthrough, there has been progress luckily," Aimal Faizi, spokesman for outgoing President Hamid Karzai, told AFP after negotiations between the rivals on Monday.

"Soon they will put all these points in a document that will be signed in the presence of the president and other prominent Afghan figures," Faizi said.

Ghani, who is widely tipped to emerge as the new president, won the run-off election according to preliminary results, but Abdullah has consistently said he was the victim of state-backed ballot-rigging.

Faizi declined to give details of the agreement, which both campaign teams have previously said would hinge on the power held by a new chief executive officer (CEO), who would be nominated by the election loser.

"From our understanding, there isn't any issues left (undecided), but the campaigns will have to answer details on that," Faizi said.

The stand-off has threatened to wreck hopes that the billion-dollar US-led military and civilian aid effort since the fall of the Taliban regime in 2001 would leave Afghanistan as a democratic country.

With the government paralysed for months, it has also emboldened the Taliban insurgents, weakened the fragile economy and put future international military and aid support at risk.

"I hope they will publicly announce the agreement tomorrow," Ghani's spokesman Faizullah Zaki told AFP.

Abdullah's spokesmen were not immediately available to comment on any imminent deal, which may trigger street protests from Abdullah supporters who believe he is the rightful next president.

The United Nations has expressed fears that a disputed election result could revive the ethnic violence of the 1990s civil war, when nationwide chaos allowed the Taliban to come to power.

As tensions rose over the fraud allegations, the US brokered a deal under which the two candidates agreed to abide by the outcome of an audit of all eight million ballot papers and to then form a national unity government together.

But Abdullah later abandoned the audit, saying it was failing to clean out fraud. Only a week ago he insisted he had won fairly and that negotiations over the unity government had failed.

An angry reaction by either side's loyalists risks spilling into violence because Abdullah draws his support from Tajiks and other northern ethnic groups, while Ghani is backed by Pashtun tribes of the south and east.

The United Nations and United States have urged the two candidates to agree on a unity government and to accept the audit results, which are due out within days.

Karzai, whose successor was first due to be inaugurated on August 2, has stayed publicly neutral in the election and is constitutionally barred from standing for a third term in office.

About 41,000 NATO troops remain in Afghanistan, down from a peak of 150,000 in 2010, fighting along Afghan soldiers and police against the fierce Taliban insurgency.

NATO's combat mission will end in December, with a follow-on force of about 12,000 troops likely to stay on into 2015 on training and support duties.

Abdullah, a former anti-Taliban resistance fighter, also claims he was cheated out of victory in the 2009 election by fraud in favour of Karzai.