There are heartening signs of compromise emerging from the state Capitol over how Hawai'i should protect the former kingdom lands ceded by the U.S. federal government at the point of statehood, 50 years ago.

The legal divide lies between the Lingle administration, which has U.S. Supreme Court confirmation of its title to ceded lands, and the Office of Hawaiian Affairs, which is seeking a state Supreme Court order barring their sale or transfer.

Now both sides are considering dropping the case. Reaching a settlement would save the taxpayer money in court costs and remove a needless argument — the state has no plans to sell ceded lands, anyway — from a political landscape pockmarked with enough problems as it is.

It's an outcome desirable enough that the conditions of the accord, while not ideal, become acceptable.

Those conditions make passage of the latest version of Senate Bill 1677 a critical move, and one that the state House needs to make by a key legislative deadline Tuesday. Then the bill moves to conference committee, where the final measure will be hammered out.

The preferable version of SB 1677 would have required a two-thirds vote of the Legislature to stop a land sale, instead of the current language that calls for such a supermajority to pre-approve a land sale. This means that, should a ceded-lands transfer ever become a crucial need for some unforeseen purpose, the transaction would have to be held up for a procedural vote. In any real emergency, delay is a problem.

But on balance, this distinction seems less important than achieving a key goal: putting an end to a legal battle that's already taken too much time and money.

Attorneys on the case point out that there's a risk of further legal challenges if the state Supreme Court issues a new ban, and that elected leaders favor policies shielding ceded lands over a strict moratorium.

Under the proposed settlement, OHA or other parties contesting state action could later revive the legal challenge if real discord arises.

Everyone's basically aligned on the main point — state law should generally protect the ceded lands trust. Continuing the courtroom battle would achieve little of real merit.