As delegates at the UN Climate Change Conference in Copenhagen pause for a rest day ahead of another marathon week of negotiations, the prospect of securing a binding agreement on the reduction of Co2 emissions remains in the balance.

A new draft deal designed to push negotiations forward was released on Friday but the six-page document leaves plenty of gaps to be filled regarding targets and how the fight against global warming will be financed.

It proposes that all countries reduce global emissions by between 50% and 95% from 1990 levels by 2050 and that developed countries cut emissions by between 20% to 45%on 1990 levels by 2020.

But the limit on global warming is also proving a sticking point. Some industrialised nations say temperatures should not be allowed to rise by more than 2ºC, but over 100 countries – many of which are developing nations most vulnerable to the effects of climate change – feel that figure would too high.

According to Dessima Williams of the Alliance of Small Island States, anything more than a 1.5ºC global rise would result in extreme weather conditions and rising sea levels that would threaten the very existence of some island nations. Crucially though, a lower target would require much larger cuts in greenhouse gas emissions and billions in further investment.

The slow progress means world leaders will have much work to do to when they begin arriving in Copenhagen next week. Taoiseach Brian Cowen will arrive midweek, fresh from announcing a €100m commitment to help developing nations cope with the effects of climate change. The funding is part of an EU package worth €7.2bn over three years.

Communications minister Eamon Ryan is in the Danish capital this weekend, while environment minister John Gormley, who flies to Denmark today, will have his turn to address high-end delegates on Thursday.

Doubt surrounding the deal is concerning climate change campaigners. Yesterday activists staged demonstrations around the world to demand immediate action and tens of thousands of people marched from Copenhagen's city centre to hold a candlelit vigil outside the convention centre where the conference is being held.

The mass demonstrations brought to an end a turbulent week when hopes of reaching any sort of agreement often seemed to be hanging by a thread.

On Tuesday, the leak of the so-called Danish text – a draft deal supposedly discussed behind the scenes by the host country, Britain and the US – led to vociferous protests from developing countries who felt richer nations were negotiating to suit their own interests.

Further problems arose when the tiny Pacific island of Tuvalu brought negotiations to a standstill over the proposed 2ºC temperature limit.

But Todd Stern, the US Special Envoy on Climate Change, indicated on Friday evening that the figure is not up for negotiation, saying that "1.5º C is not in the realm of what we can get done right now."

Stern's comments drew a withering response from the chair of the G77 group of developing countries, Lumumba Stanislaus Dia-Ping of Sudan. A composed but often menacing orator, he said that by sticking to a 2ºC limit, Stern would be "basically condemning Africans to death". He said it also showed he would be willing to put "nearly a billion people into a furnace". Had we not learned, he asked, from when that happened to six million people in Europe?

There were also clear tensions between the world's two biggest emitters of greenhouse gases, the United States and China, earlier this week. China has criticised the US's proposed targets on global warming and has suggested that, as the largest polluter for many years, they owed a debt to developing countries.

That accusation was rejected by Stern, who said emissions would "rise dramatically" in China and that they, along with other major developing countries such as India, should be subjected to binding cuts.

He also condemned the idea that the US owed "reparations "or should feel any guilt over an issue the world had been ignorant about for much of the past 200 years.

"There is no question that developed countries have the largest historic role in putting emissions up in the atmosphere that are there now," the US's chief negotiator said. "The US has the largest role among the developed countries. But we don't make any bones about that. We completely agree with that and we completely recognise our responsibility to take action now."

Another outstanding issue is the future of the Kyoto Protocol, the only legally-binding agreement that obliges developed nations – with the notable exception of the US – to cut emissions. But despite the apparent distance between developed and developing countries, Stern believes some form of agreement can be struck before the conference ends next Friday.

"I absolutely think that there is a deal to be done here," he said. "I don't think there's a deal in the bag, and I think whether we get a deal or not hangs in the balance. But there's a deal to be had with respect to all of the major issues and we're going to be working at it."