The Rockville City Council this week approved a letter of understanding between the city and developers for a proposed $100 million hotel and office complex in downtown Rockville, capping two years of difficult negotiations over the project.

Previous efforts by the developers, New Rockville Town Center Partners, to move ahead with construction of a 250-room luxury hotel, the project's first phase, have failed because the partnership has been unable to show the city proof of adequate financial backing for the estimated $15 million hotel, officials said.

The letter of understanding from Robert C. Munro, an international developer with New Rockville Town Center Partners, outlines amendments negotiated between the city and the partnership to terms set forth in a 1982 agreement. The letter, dated Oct. 29, calls for the city and the partnership to enter into an amended agreement by Dec. 4.

City officials said the council is expected to approve the amended agreement by Dec. 5, after holding a public hearing on it Nov. 19.

Under terms of the proposed amended agreement, construction of the hotel on a 2.3-acre city-owned tract abutting North Washington Street would begin as early as next June, provided the joint venture shows proof of adequate financing by Jan. 15 and files for building permits by April 15.

The hotel, which would be built by Quality Inn International, would contain a restaurant, a combination cocktail lounge and coffee shop, a swimming pool and 4,000 square feet of conference space. It would be connected by a pedestrian walkway to a nearby 80,000-square-foot office building.

The amended agreement also calls for the partnership to develop a 4.4-acre site owned by the city off Middle Lane, which intersects North Washington Street. It calls for building three high-rise buildings totaling 675,000 square feet of space, officials said.

City officials said they are hoping that the redevelopment of Rockville's Town Center, under a plan designed by architect Arthur Cotton Moore four years ago, will transform its downtown into a major area attraction. Officials also are hoping the redevelopment will erase the city's negative image created by its unsuccessful urban renewal project of the late 1960s.

"It looks very good at this point," said Douglas F. Horne, Rockville's director of community development. "They've developers got some tight timetables for the development, but I think they'll be able to meet them."

Developers would pay the city $11.57 per square foot for the North Washington Street site and $14.88 per square foot for the Middle Lane site, officials said.

Last July, Rockville's mayor and City Council voted to terminate the 1982 agreement with New Rockville Town Center Partners, citing the partnership's failure to provide proof of financial backing for the hotel.

The partnership, however, disagreed with the council's action and indicated it would be willing to go to court, if necessary, to assert its rights under the disposition and development agreement.

Since then, city officials say they have been negotiating an amended agreement to speed construction of the hotel and to avoid lengthy litigation.

The partnership has two firms -- Winmar of Maryland, a subsidiary of Safeco Corp. of Seattle, and RV Inc., a partnership formed to represent private individuals interested in the project.