A brief statement issued following the meeting, however, said President Mwai Kibaki and Prime Minister Raila Odinga expressed optimism that the grand coalition government will resolve the litigious issues soon.
The statement said the leaders agreed that all the contentious issues in the draft constitution should be resolved through negotiations in the Parliamentary Select Committee (PSC) session in Naivasha, about 90 kilometers north of Nairobi.
"The two sides of the coalition have agreed that all the contentious issues should be resolved through negotiations in the Parliamentary Select Committee session in Naivasha," said statement read by Odinga.
The two parties differed on the revised draft with each party accusing the other for the stalemate. Kibaki's Party of National Unity (PNU) has maintained that it will push for a presidential system that has a single center of power.
It has indicated it will only accept a prime minister if the country adopts Tanzania's model of government, where the president is the head of state and government.
PNU is also against the Senate idea, noting that the matter is still under discussion. The party has also indicated that it will push for members of the National Assembly to be elected directly.
Odinga's Orange Democratic Movement (ODM) favors a parliamentary system. ODM has maintained that power and resources must be devolved and dispersed to ensure that the government is closer, responsive and accountable to the people.
The party said devolution should be in tiers -- national, regional and county levels -- to achieve equity for all in development.
The statement said the two sides of the coalition reached the agreement during a consultative meeting aimed at advancing consensus on the contentious issues of the constitution draft.
In the statement read by the prime minister in the presence of President Kibaki and other members of the Grand Coalition Management Committee, the two principals mandated their respective teams to ensure that the negotiations are conclusive because Kenyans have waited for a new constitution for too long.
The statement disclosed that Thursday's meeting yielded substantial progress on some of the major contentions issues but finer details will be sorted out by the PSC in the Naivasha retreat.
The coalition partners assured all Kenyans that they are committed and optimistic that the constitution review process will be finalized in due course for the benefit of all Kenyans.
Sources at the meeting said Odinga and Kibaki had asked the members to put the country first in discussing the contentious issues, adding, they expected nothing short of consensus in the PSC when their members go to Naivasha retreat.
However, the two sides are said to have stuck to their positions during the talks. Part of the proposals presented to Kibaki and Odinga included a pure presidential system in which election losers in the race for State House will not sit in Parliament.
The systems of the government under consideration are: pure presidential system; pure parliamentary system; and two hybrid proposals -- with one leaning towards the presidential system while the other has more elements of the parliamentary system. The president is not an MP in both systems.
It is hoped one of the four proposals may be settled so as to mend the polarized positions adopted by PNU and ODM Coalition Management Committees' representatives.
The 27-member Parliamentary Select Committee, which comprises 14 lawmakers from PNU and 13 from ODM, starts a one-week retreat in Naivasha on Sunday to try and reach consensus on the contentious issues to facilitate easy passage of the constitution in referendum.
However, analysts warn that it would may still sound foolhardy for the PSC to proceed to Naivasha before the parties agree to a common position through the management committee, especially given the clout of the ministers sitting in the Cabinet arbitrating committee.