The BJP has worked out a seat-sharing arrangement with Bihar ally Lok Janshakti Party with the latter expected to contest five Lok Sabha seats in the state, one seat in either Uttar Pradesh or Jharkhand and its president Ram Vilas Paswan likely to be given a berth in the Rajya Sabha.

According to sources, the Nitish Kumar’s Janata Dal (United) and the BJP will contest on 17 seats each in Bihar.

Sources added that an announcement to the effect may be made as early as Saturday.

The deal was clinched after Ram Vilas Paswan, who is also a Union minister, and his son Chirag Paswan met BJP leader Arun Jaitley. Chirag, who has been vocal in airing his party's differences with the BJP, told reporters that talks were on and claimed there were other issues besides sharing of seats.

Sources later said differences between the two parties have been resolved.

BJP president Amit Shah had earlier announced that his party and its key ally JD(U) will be contesting equal number of seats in the politically crucial state where the BJP-led NDA had won 31 seats in 2014.

The deployment of Jaitley, an old Bihar hand in the party with friendly relations with leaders of different parties, by the BJP to buy truce with the LJP underscores the importance the saffron party has attached to continuing its alliance with Paswan's party, which enjoys strong influence among Dalits.

Top BJP leaders, including its president Shah and Jaitley, had held an hour-long meeting with LJP chief Ram Vilas Paswan and his son Thursday to resolve their differences.

Chirag Paswan had earlier written a letter to Jaitley asking him to explain what benefits demonetisation brought to the country.

He had also tweeted that a delay in seat-sharing announcement may harm the ruling alliance.