SPRINGFIELD - Despite major differences over the state budget, Gov. Rod Blagojevich and the state's legislative leaders finally agreed on something Thursday: They all want to avoid a government shutdown.

Blinking for the first time in months, the governor and the leaders backed away from the ongoing stare-down that has kept them in Springfield three weeks longer than scheduled.

They emerged from a nearly three-hour, closed-door meeting to announce they would put together a bare-bones budget that will keep government operating for an extra month or until an overall budget agreement is reached.

"Today, we actually made a little bit of progress," Blagojevich said. "We actually finally agreed on something."

"It's no frills," added Senate Minority Leader Frank Watson, R-Greenville. "It's basically just keeping the system going."

The situation now facing the General Assembly mirrors 2004, when a stopgap budget kept state government operating while negotiations continued after the new fiscal year began July 1. A final agreement was reached about three weeks later.

House Minority Leader Tom Cross, R-Oswego, called the decision a promising development after weeks of gridlock.

"If we have a government that doesn't shut down, it's a positive thing for every Illinois resident," Cross said.

The leaders are at loggerheads over how much money to spend on schools, health care and state employee pensions.

The threat of entering the fiscal year with no budget in place was beginning to hit home for many Illinoisans, said state Rep. Dan Brady, R-Bloomington.

"People are extremely concerned and worried," Brady said. "They want to know that there is leadership in Springfield."

An interim budget still must be approved by the House and the Senate and be signed by the governor. Given the track record of the spring session, not even House Speaker Michael Madigan would say the idea of an interim budget is a sure bet.

"Don't sell us short," said Madigan, D-Chicago.

"We'll get it done … eventually," said Senate President Emil Jones, D-Chicago.