No water deal in California, but talks will continue

The Republican governor and the leaders of the Assembly and Senate said they would meet again Saturday to discuss roughly a dozen outstanding issues. Schwarzenegger sent confusing signals by agreeing to disband the talks Friday even though no water deal had been reached.

Earlier this week, he had threatened to veto "a lot" of bills unless lawmakers agreed to a comprehensive overhaul of the state's water system. They are up against a weekend deadline because the period for Schwarzenegger to sign or veto about 700 bills ends midnight Sunday.

Lawmakers had said they wanted to finish water negotiations by Friday. Earlier in the day, Schwarzenegger appeared at a rally outside the Capitol and told supporters that he and lawmakers were "on the verge of a historic breakthrough on water." The period of waiting for politicians to craft a long-term water fix is over, he said.

"We are going to get this done today," Schwarzenegger told the crowd.