The deal, which is being brokered by US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov, would be the third significant attempt since July to end years of discord between Syria's Russian-backed government and US-supported rebels.
"Our hope is never to see a belt of terrorism, a corridor of terrorism emerging in or around our region", Turkish President Recep Tayyip Erdogan said during a meeting with Obama in Hangzhou on Sunday.
There remained "a couple of tough issues" to deal with, he said, declining to give details.
A senior State Department official said the talks faltered on Saturday when Russian Federation pulled back from agreement on issues the USA negotiators believed had been settled. Backed by Russian warplanes, Assad's forces have waged an air and ground campaign that has killed hundreds of thousands of people, sparked a humanitarian crisis and forced millions of Syrians to seek refuge in Europe.
"I think it's premature for us to say there's a clear path forward, but there's the possibility at least for us to make some progress", the United States president said.
The United States says it had not yet struck an agreement with Russian Federation on ending the years-long conflict in Syria, blaming Moscow for reversing its position on issues it thought were settled.
On the ground, Syrian state media said the army and allied forces had taken an area south of Aleppo, severing the sole route left into the eastern neighbourhoods held by the opposition.
Kerry said the two sides would continue to work through issues but said the U.S. did not want to enter into an illegitimate agreement stating, "we're not going to rush".
The talks in Hangzhou are the latest round of diplomacy on Syria, after marathon negotiations between Kerry and Lavrov in Geneva last week failed to yield a final deal.
According to the ministry, the sides discussed "further steps to assist in resolving the conflict in Syria, including the task of consolidating the cessation of hostilities and the Russian-US cooperation in the fight against terrorist groups".
A possible deal could include provisions to ensure aid can reach besieged areas of Syria and steps to prevent Syrian President Bashar al-Assad's government from bombing areas where US -backed rebels are operating.
U.S. President Barack Obama has said his country is working with Russian Federation on finalizing a ceasefire deal in Syria. "I can't tell you when the agreement will be reached".
"We are talking about most serious issues of implementing a ceasefire", he said. Russia, for its part, has said it would only agree to the accord if the US could separate Syria Conquest Front fighters from rebel forces on the ground, who have grown increasingly intertwined, especially in Aleppo.
A letter from Washington's Syria envoy Michael Ratney to the Syrian armed opposition, a copy of which was seen by Reuters, laid out some of the ceasefire terms.
The deal would focus on delivery of humanitarian supplies to Aleppo, where recent advances by both sides have cut supplies, power and water to almost 2 million people in government- and rebel-held areas.
His proposal calls for sharing information and coordinating air attacks against the Syria Conquest Front, formerly known as the al Qaeda-linked Nusra Front, in exchange for grounding Syrian President Bashar al-Assad's air force.
But the USA has always been wary on the military coordination part of the deal, because it says Russian Federation has mainly targeted moderate, US -backed opposition groups in a bid to prop up Assad. The U.S.is still weighing Turkey's evidence against Pennsylvania-based cleric Fethullah Gulen.
Ankara fears that advances by the Kurdish YPG militia will embolden Kurdish militants on its own soil.