Subway and bus employees feverishly negotiated for a new contract today while threatening to bring New York to a crawl.

Transit officials and union members raced against the strike deadline--12:01 a.m. Wednesday--in round-the-clock talks with union members at a Manhattan hotel.

The Transport Workers Union's 33,000 members are threatening to walk off the job unless they reach a deal with the Metropolitan Transportation Authority for pay increases and other benefits.

Over the weekend, both sides put new wage proposals on the table. Details were withheld, but transit union president Willie James said he was encouraged by the progress of the talks.

He came out of the talks to say: "We are making some movement in many areas. . . . We've been rockin' and rollin'."

Meanwhile, the city prepared to implement contingency measures.

About 2,400 police officers would be deployed in the subway system and elsewhere for security, work schedules would be revised for city agencies that would go on an emergency footing and some 500 private commuter vans would form part of an emergency transportation system.

In addition, private cars and trucks entering Manhattan during rush hours would have to carry at least three people and several key north-south and cross-town arteries would be restricted to emergency vehicles.