Negotiators trying to resolve an aboriginal protest in Caledonia, Ont., say the occupation will be over soon.

"I think they are close to a solution, and I'm very happy with the way things are going,'' Mohawk Confederacy Chief Alan McNaughton said Friday.

McNaughton said he expects the blockades set by protesters across the main road through town will be removed within a week.

Former Ontario premier David Peterson, who has been trying to broker a deal between the natives and the province, was also hopeful a peaceful resolution to the standoff is not far away.

"We are making progress,'' Peterson said. "Obviously one of the things we are working very hard on to help turn the temperature down is to see if we can clear away some of the roadblocks.''

"We've made some real progress and I think everyone is very optimistic now.''

The angry protest in the southwestern Ontario community began in February, and local citizens have responded with frustration to the ongoing dispute.

Residents have formed a group called the Caledonia Citizens' Alliance to express their concerns.

"We cannot underestimate the damage that is being done to the community from the current crisis,'' said alliance chair Don Bowman.

The group says it's frustrated by the lack of effort from the federal government in trying to solve the problem.

Peterson, however, said a federal official will be involved in talks next week.

"There's a lot of things at play here .... One of the big issues was getting the federal government to the table. They are going to start on Tuesday with Barbara McDougall negotiating for the federal government and Jane Stewart for the provincial government,'' he said.

McDougall was a high-profile cabinet minister in Brian's Mulroney's Conservative government, and Stewart held top positions with Jean Chrétien's Liberals.

The dispute began Feb. 28 when a group of native activists moved onto the land, which backs onto a reservation near Hamilton.

Henco Industries is developing a subdivision called Douglas Creek Estates on the contested 40 hectares in Caledonia.

Development was under construction on the land at the time, but progress has come to a halt while the occupation ensues.

Henco Industries issued a release Friday stating the company is "optimistic that the situation ... will soon come to an end in a manner that is satisfactory for all involved parties.''

The standoff results from a disagreement over land given to the Six Nations by the British government in 1784 in exchange for their allegiance.

In the 1830s the group leased the land back to the government to allow the construction of a road, but the land was sold instead.

The Six Nations claim they did not agree to the sale and were never adequately compensated in the deal.

With files from The Canadian Press