The Taliban said Monday a deal could be signed by the end of February, though U.S. officials remain cautiously optimistic.
Both sides recently agreed to a seven-day period of reduced violence in Afghanistan. The U.S. will monitor the temporary truce to determine if there are any violations.
"We've said all along that the best, if not the only, solution in Afghanistan is a political agreement. Progress has been made on that front and we'll have more to report on that soon, I hope," Defense Secretary Mark Esper told reporters in Brussels, Belgium, last week.
The agreement comes amid progress in negotiations between the Taliban and U.S. Envoy Zalmay Khalilzad, Washington's chief negotiator with the group, since December in the Qatari capital of Doha.
“I believe that, maybe better than any time in the last couple of decades, there is an opportunity for peace,” Khalilzad said, according to The Washington Post, while speaking in Islamabad, Pakistan, on Monday at a United Nations conference on refugees marking four decades of conflict in Afghanistan.
Both sides have been engaged in contentious talks for more than a year to try and end the 18-year conflict. Mistrust on both sides has long been an issue, and insurgents have hesitated to agree to a permanent cease-fire without the withdrawal of U.S. forces first.
If the seven-day truce is successful, U.S. troop levels could be reduced from the current 12,000 to 8,600, Esper said. The Taliban first proposed the cease-fire in January in an effort to open a window to an eventual peace deal.
The U.S. appeared close to signing a peace agreement last year, but President Trump scrapped talks amid an increase of Taliban attacks that included the killing of a U.S. soldier.
Taliban forces still engage in attacks against Afghan and U.S. government officials, or those perceived as loyal to Kabul. Taliban leaders have refused to talk with the Afghan government, which it sees as illegitimate.
Fox News' Greg Norman contributed to this report.