The University and the Harvard Police Association are near agreement on a final settlement of their six-month-old contract dispute, the president of the union said yesterday.

Laurence F. Letteri said yesterday's meeting between Harvard and union representatives, supervised by a federal mediator, "was so encouraging" he believes the two sides may reach an agreement at today's session.

"A lot of things have been worked out; the money seems o.k., and the vacation's all right," Letteri said.

He added that while both sides "are definitely closer than ever before" the union must "still work a few things out" internally regarding seniority benefits before agreeing to Harvard's proposal.

Letteri also said the union has not yet received Harvard's offer regarding night and weekend differentials--the extra salary given officers who work undesirable shifts--which union spokesmen earlier said was a major stumbling block to any agreement.

Edward W. Powers, associate general counsel for employee relations, said yesterday he believes the two sides should reach an agreement tomorrow.

Powers would not discuss the terms of Harvard's offer. However, the union last February rejected Harvard's reported offer of a five-per-cent increase tied to the cost of living rise as "totally inadequate."

The current union contract expired January 1, but both sides later agreed to an extension that will expire July 5. Powers said that if the two sides do not reach an agreement by then, bargaining will probably continue.

Letteri and Powers agreed the negotiations have reached a point where both sides consider money their primary concern. Earlier efforts at discussion stalled repeatedly over a number of non-monetary issues, especially the union's contention that the reorganization efforts of David L. Gorski, former chief of University police, had "destroyed morale within the force."

The union stated in January it would not discuss a contract before the two parties reached an agreement on the morale issue. The dispute reached a head last March when Gorski resigned and was succeeded by William A. Lee, a labor specialist who is now acting chief.

Powers said last night he does not think the morale issue will now impede a settlement.

"There are no non-economic issues that I think should raise a problem--we're down to the economic questions now," he said