With this city's subways and trains poised to come to a halt early today, negotiators for 34,000 transit workers suspended a midnight strike deadline Sunday, at least temporarily postponing a work stoppage that had been threatened in defiance of state law and court orders.

Officials for Local 100 of the Transit Workers Union seemed cautiously optimistic that the Metropolitan Transit Authority was beginning to move on both economic and noneconomic issues. But they cautioned that at midnight, they still did not have a firm wage offer.

"We have made sufficient progress to stop the clock," Ed Watt, secretary-treasurer of the union, told reporters at midnight. Talks between the two sides were expected to go through the night.

A strike effectively would paralyze New York in the middle of its holiday shopping season, registering as a fiscal body blow to a city already stumbling from a deteriorating economy. The state's Taylor Law bars public employees from striking; in the past, union officials leading strikes have been jailed.

In anticipation of the strike, city officials had announced a raft of emergency steps for today: Schools would start two hours late, thousands of vans would roll along bus routes and ferries would crisscross the East and Harlem rivers. Many New Yorkers bought bicycles, and no car with fewer than four passengers would be allowed to cross bridges into Manhattan.

Earlier Sunday, Mayor Michael R. Bloomberg (R) affected a jaunty outlook, saying he would ride his bike to work this morning. But he and Gov. George E. Pataki (R) acknowledged that a strike could prove crippling, and they threatened to seek crushing financial penalties against each striker.

"A strike will have enormous negative consequences for the people of this city and this state," Pataki said at a news conference late Sunday afternoon. Bloomberg estimated that a strike could cost the city as much as $300 million each day.

No city in the United States is so dependent on mass transit. Each day, the city's subways and buses carry 7.3 million passengers over 722 miles of track and 1,671 miles of road.

Officials with the transit union said a strike deadline was established as a result of exhausted possibilities. The union had reduced its wage demands to an 18 percent raise over three years, but the MTA had not budged from its offer of no raise in the first year. MTA officials added that any raise in subsequent years must come out of new productivity concessions.

Transit workers, on average, make $44,000 a year, less than equivalent workers with the suburban rail lines.

"The bosses seem to have precious little respect for those who work so hard," said Roger Toussaint, the newly elected and Trinidadian-born president of the local TWU. "The mistrust is very great."

There are years of bad blood between labor and management in what is commonly described as a 19th-century industrial operation. Management annually assesses 1.5 disciplinary actions on average for every transit authority employee. Two transit workers died last month, hit by trains as they worked in the web of dark tunnels.

Officials with the MTA, the state agency that oversees the transit authority, projected a $1 billion deficit next year. The MTA already had asked for a 33 percent fare increase, which transit workers opposed.

"They are facing a very difficult financial future. We all are," Bloomberg said Sunday, referring to the MTA's deficit and to the city's $4 billion budget hole in the next fiscal year.

That said, many workers and some budget analysts harbored suspicion about the MTA finances. In the last round of salary negotiations in 1999, MTA officials declared that they faced a large deficit, only to announce a surplus after workers settled.

Many city politicians called for Pataki to intervene in the negotiations Sunday, as he could theoretically step forward with more cash. He found $2 billion last year for the powerful hospital workers and teachers unions.

But Pataki, who is a hands-off leader in the best of times, was careful to offer no such hope.

"There is no person capable of riding in on a white horse with a bag of money," he said.

Supporters of New York transit workers rally outside the Grand Hyatt Hotel, where labor negotiations were taking place round-the-clock.