According to the newspaper, Merkel and President Macron have urged the EU's chief negotiator Michel Barnier to guarantee that Europe will not impose a customs border in the Irish sea in order to give May room to sell the deal back home. "What I feel today is that we are closer to the final solutions and the deal", he told reporters.
Mr Barnier said that a Brexit accord was "possible but difficult", adding he was still not certain if a deal could be reached.
Tajani said May said she would evaluate an idea to extend the post-Brexit transition period by a year from the current cut-off date at the end of 2020 but that the British prime minister did not say whether she would favour that, or not.
Meanwhile, his Sinn Fein counterpart Michelle O'Neill said Prime Minister Theresa May had refused to hold a joint meeting with the leaders of Northern Ireland's main anti-Brexit parties.
Officials said there were hints that Britain might consider extending a post-Brexit transition period beyond the proposed 21 months to make talks on a future trade relationship easier.
Wednesday's Brexit summit dinner in Brussels was supposed to be the "moment of truth" when states gave the green light for Brexit, say Daniel Boffey and Jennifer Rankin in the Guardian.
And one person familiar with the discussions said May's Tory party would find it hard to be fighting the next general election - due in 2022 - while the country is still inside the single market and customs union.
"Imagine a situation whereby those opposing a deal would be able to say, as a result of a vote in the House of Commons, not only would that deal be defeated, it would also bring down the Irish Government, so I'm not sure if Deputy Martin really thought that through".
"But I believe everybody around the table wants to get a deal".
"The one thing I would say to my colleagues is that the great strength of the European Union in these negotiations is that the 27 European Union nations have remained united".
"After listening to Prime Minister [Theresa] May's assessment of the state of the negotiations, the EU27 confirmed that we want to continue the talks in a positive spirit", Donald Tusk told a press conference alongside European Commission President Jean-Claude Juncker.
The leaders were very clear [at the summit in] Salzburg that they had hoped for virtually an agreement on the withdrawal agreement having been reached by now and that could have been formalised and finalised in this November summit.
Ulster Unionist MEP Jim Nicholson called on the European Union and Mrs May to "take stock" on the issue and added "that extending the transition period is not ideal".
Ireland's premier has said that the key issue of agreeing the backstop deal is not only an issue of substance, but "an issue of trust".
"The backstop as proposed by the European Union would undermine the constitutional and economic integrity of the United Kingdom".
But the Democratic Unionist Party (DUP), which props up May's government, says it will withdraw its support if this happens.
An EU offer to extend a status-quo transition period by a year to end-2021, keeping Britain in a customs union to diminish the chances of the backstop being triggered, was not enough.
Varadkar added that working out all the details of the deal on the EU-UK relationship could take more than two years. While it could help May sell a deal at home, it won't remove the need to accept the most controversial part of the EU's proposal - that in a last-resort situation, Northern Ireland could be split off from the rest of the United Kingdom. "If they knew the negotiations were being pushed right up against the next election, why would they be conciliatory in these negotiations?"
But any extension will need to take into account concerns on both sides to avoid the transition ending with no deal.
At a three-hour cabinet meeting on Tuesday morning, which included ministers with reservations about her strategy, May said a deal was possible if they all stood together.