WARSAW: Poland and Hungary could reach a compromise, but another European Council might be needed to work out another deal on the EU budget that limits a proposed rule of law mechanism, Poland's Foreign Minister Zbigniew Rau said on Wednesday.

Poland and Hungary are blocking 1.8 trillion euros ($2.18 trillion) in funding because they oppose a clause linking the release of funds to the rule of law. The issue is set to be discussed at an EU summit on Thursday.

"If we can't reach an agreement in the next two days ... there will have to be another European Council this year or the negotiations will be moved to new circumstances under the Portuguese presidency," Rau told Polish state radio.

Rau's comments come after Poland's Prime Minister Mateusz Morawiecki and ruling party leader Jaroslaw Kaczynski met with Hungarian Prime Minister Viktor Orban in Warsaw on Tuesday evening.

Orban said after the meeting that there was a "good chance" to work out a deal this week.

Poland's government spokesman Piotr Muller added on Wednesday that any mention of the mechanism in the EU budget deal had to be very clear, although he did not specify how.

"I don't want to divulge our negotiation strategy, but the mechanism on conditionality has to be included in such a way that is clear, so these rules are clear in other documents, so they are important.

If it's not clear, we won't have a compromise," Muller told Polish state television TVP.