The only thing keeping a new contract between the New York Yankees and Derek Jeter from being finalized is Jeter's refusal to accept that fact that he is now 36 years old, not 26.

So says a baseball source with knowledge of the substance of the negotiations between the club and its iconic shortstop, which took a positive turn this week after renewed contact talks between the two sides led the Yankees to sweeten their original three-year, $45 million offer.

On Friday, the two sides spoke, and an official with knowledge of the talks said they made "significant" progress.

Earlier on Friday, a source said the two sides "still got a long way to go" due to Jeter's resistance to settle for a shorter-term contract or less money per year than the $18.9 million average salary he was paid on his recently expired 10-year contract.

"He can't seem to get to where this thing has to get to, meaning taking less money than he's making now, until he gets it into his head that it's not 10 years ago," the source said. "These people who are superstars, who live a different life and everyone's telling them they're the best, it's hard for them to psychologically get their arms around it. It's part of what makes him a great competitor. But until he comes to grips with that, they're not going to make a deal."

The two sides held discussions until 6 p.m. ET Thursday evening but had had no contact in the early part of Friday. The source said it was "possible" the Yankees and Jeter could reach agreement before the start of baseball's winter meetings on Monday in Orlando, ''but I'm not confident of that."

Another source had told ESPNNewYork.com early Friday that while the Yankees had sweetened the pot so Jeter wouldn't have to take as large a salary cut, the club was hesitant to add a fourth year for a shortstop who will turn 37 before next season's All-Star break.

However, the possibility remains that the Yankees could add a fourth year that Jeter would need to earn based on performance.

Yankees general manager Brian Cashman would not get into specifics of the negotiations Friday morning.