Mercosur, South America's four-nation trading bloc, failed to clinch a historic free-trade pact with Israel on Thursday after a last-minute disagreement on freeing up trade for certain products, officials said. The deal is now not expected to be completed until next year. It would be the first free-trade agreement for Mercosur, a market of nearly 250 million people covering most of South America, since its creation in 1991. "We had a good meeting and made progress on most remaining issues, but we still have some work to do," said Evandro Didonet, a senior official in Brazil's Foreign Ministry. "If we don't close it in December, we will finish the agreement early in 2008. We are very close." Didonet told The Associated Press that the differences concerned only a "limited number of products." He declined to elaborate.