South Korea and the U.S. are likely to conclude a deal next week on how to split the upkeep costs of keeping American troops in South Korea.

According to diplomatic sources on Sunday, the two sides have narrowed major differences during the ongoing negotiations over the bilateral Special Measures Agreement(SMA). 

The U.S. is said to have largely accepted South Korea’s request for a reasonable increase in costs while South Korea is said to have accepted Washington’s demand for resetting the validity period of the defense cost sharing agreement from five years to one.

The U.S. had demanded Seoul shoulder one billion dollars(one trillion 130 billion won) in defense costs with the validity period to be set at one year. Seoul, for its part, had refused to pay more than one trillion won in such costs, and had sought for the validity period to be set between three and five years. 

The sources said the U.S. had expressed that it would be desirable to swiftly settle the defense cost issue given the importance of the South Korea-U.S. alliance, and given that February is a time when Seoul and Washington need to focus on denuclearizing the Korean Peninsula. 

Under the current five-year contract, Seoul's share for this year is set at around 960 billion won, or 856 million dollars, which is about half of the total cost.