Greece and its international creditors are seeking to put the final touches to a multi-billion euro bailout accord.
The deal is necessary to keep the country financially afloat and meet an important debt repayment to the European Central Bank within days.
Germany set out "strict" conditions for further aid and said it would be sensible to link the size of the first tranche to Greece's progress in carrying out reforms.
That's considered to be a reflection of worry around the euro zone that Athens might not do as promised.
Greece is hoping to wrap up the deal for €86 billion in fresh loans by tomorrow so it can get parliamentary and other approvals for aid to flow by August 20th, when a debt repayment to the ECB is due.
An agreement would mark the end of a painful chapter on bailout talks for Greece, which fought against austerity terms demanded by creditors for much of the year before accepting a deal under the threat of being bounced out of the euro zone.
After marathon negotiation sessions on Sunday and Monday, Greek ministers and representatives of European institutions and the International Monetary Fund paused their talks while Greek officials briefed Prime Minister Alexis Tsipras.
A senior Greek government official said dealing with a mountain of non-performing loans in the banking sector remained a sticking point.
Athens wants to set up a "bad bank" to handle this, while creditors want non-performing loans bundled and sold to distressed asset funds.
Officials said the two sides had also yet to agree on setting up a sovereign wealth fund in Greece designed to raise €50 billion from privatisations, three-quarters of which would be used to recapitalise banks and to decrease debt.
The size of the bailout is also an issue. Germany's Handelsblatt newspaper reported that the IMF believes Greece needs a bigger bailout worth €90 billion.
Greek banks could get an initial capital injection soon after a bailout deal is clinched, as much as €10 billion, even before the ECB completes a stress test, a euro zone official familiar with the issue said.
The official, who asked not to be named, said a test may not be finished before October but that it was recognised that Greek banks need urgent capital to normalise their operations.
