A dispute over the presidential election in November has paralyzed the country and led to the deaths of about 300 people.
The election, meant to bring stability after a decade of economic and political stagnation in the world’s biggest cocoa-producing country, has instead left it as divided as ever and its economy in disarray.
Alassane Ouattara is widely recognized internationally as the victor but Gbagbo has refused to cede power.
Cocoa exports have dried up, driving futures prices to new highs. International banks have shut down operations.
A source who had access to preparatory talks on Sunday said the African panel would insist that Gbagbo stand down, in return for guarantees, to allow Ouattara to take charge of the west African country in accordance with to UN-certified results.
There was no statement from the leaders. Gbagbo has previously rejected similar proposals.
The two rivals have formed opposing, parallel governments, although Ouattara remains restricted to a lagoon-side hotel protected by a ring of UN peacekeepers.
Ouattara’s government has called for an Egyptian-style revolution to remove Gbagbo but attempts to demonstrate have been thwarted by security forces. Residents reported gunfire all morning in pro-Ouattara neighborhoods of Abidjan, the commercial capital, as soldiers and paramilitaries broke up attempted demonstrations.
In the Koumassi district, residents said soldiers fired on protesters from machineguns mounted on military vehicles. At least three demonstrators were killed, said Koumassi resident Djate Traore, who reported seeing the bodies.
Three people were killed and 14 wounded in the city’s Treichville neighborhood, an official at the mayor’s office who asked not to be identified told Reuters by telephone, adding he saw the dead and helped evacuate the wounded to a clinic.
There was no immediate comment from the military.
Similar attempts to demonstrate at the weekend were crushed by pro-Gbagbo forces, who witnesses said killed at least five people when they opened fire on attempted gatherings.
Army spokesman Babri Gohourou told state television at least four soldiers or police officers had been lynched by protesters on Sunday, three of them killed by having their throats cut.
The leaders of South Africa, Mauritania, Chad, Burkina Faso and Tanzania met in Mauritania on Sunday to discuss proposals drafted by African Union experts.
“We could not go back on the previous decision made by the AU commission” which recognized Ouattara as winner of the election, said the source familiar with the talks who asked not to be identified.
“It was considered that the two candidates could not co-exist, so a transfer of power with guarantees to the losing party was favored ... The high-level panel agreed on the path to be chosen but there are still many details to work out.”
Burkina Faso’s President Blaise Compaore did not travel to Ivory Coast but the remaining four began their visit in the country by meeting Gbagbo before they were due to see Ouattara later.
Citing the “rapid deterioration of the financial sector,” SIB, which is part of the Moroccan Attijariwafa Group, on Monday became the latest international bank to suspend operations in the country.
Finance Ministry sources said Gbagbo officials were due to meet pro-Gbagbo staff in the Ivorian branches of Societe Generale and BNP Paribas, with a view to re-opening them as nationalized banks on Tuesday.
