After months of urgent talks, U.S. and German negotiators reached a breakthrough deal today to compensate former Nazi slave and forced laborers, long-ignored victims of Hitler's war machine.

The deal will establish a $5.2 billion fund to compensate hundreds of thousands of people forced to work for the Nazis and German firms during World War II.

The agreement was reached after Germany said it would increase its initial $1.6 billion offer, augmenting the $2.6 billion already pledged by industry. A government spokesman refused to release the final breakdown of who is contributing what or whether the government will match industry's contribution.

The deal, which will be signed Friday in Berlin, matches earlier demands made by lawyers--including $520 million from U.S. companies that had German operations during the war, attorney Michael Hausfeld said.

Germany has already made about $60 billion in payments for war crimes, but there has never been compensation for the estimated 12 million slave and forced workers. Some were in "work-to-death" programs in concentration camps. Others were deported to keep German industry operating under the strain of Hitler's war to take over Europe.

An estimated 1.5 million to 2.3 million people would be eligible for compensation, mostly non-Jews living in eastern Europe.

In exchange for creating the fund, the companies will receive legal protection from lawsuits in the United States.