NEW YORK, Dec 22: The New York City transit workers union leaders have agreed to a return to work while strike talks continue, a mediator told reporters Thursday morning. But the deal must be approved by union’s executive board, a union spokesman said.

“Both parties have a genuine desire to resolve their differences,” said Richard Curreri, head of a three-member state mediation panel. “They have agreed to resume negotiations while the TWU (Transit Workers Union) takes steps to return its membership.”

As the subway and buses strike entered third day, union leaders were threatened with jail time for criminal contempt of court orders barring strike, most businesses in the city complained of losing big money.

But a ray of hope in ending the misery of New Yorkers appeared on Thursday, as the transit workers Union president Roger Toussaint was seen walking into the hotel where negotiators from the Metropolitan Transportation Authority are staying. Negotiations had previously taken place at the hotel, but it was unclear if the two sides were talking directly.

New York City Mayor Michael Bloomberg described the strike’s economic impact in dire terms, saying that business at restaurants fell by 40 per cent, that street traffic on Fifth Avenue’s glittering shopping district was down by 50 per cent, that sales dropped by 60 per cent at the stores in Bronx.

The office of City Comptroller estimated that if the strike continues through Christmas, the cost to the city’s economy would reach $1.5 billion.