New reports have emerged that Katie Holmes and Tom Cruise are currently negotiating a divorce settlement, with no plans to take the case to court.

The pair are said to have allegedly called a temporary truce in their divorce proceedings. Katie filed papers last Friday while Tom was filming his new movie in Iceland. The news left Tom "blindsided", as he was reportedly unaware that Katie was determined to end their marraige.

Sources have described the pair's meetings as "calm" and claim that the actor's attorneys are negotiating child support, child custody, visitation rights and property settlement.

Tom was allegedly planning on filing divorce papers in California, a state notorious for favouring joint custody settlements. However following their talks, the actor is said to be halting his plan as they negotiate custody of their 6-year-old daughter Suri.

The divorce will be Tom's third, after previously being married to actresses Nicole Kidman and Mimi Rogers.

In recent months, 33-year-old actress Katie had been papped out and about appearing gaunt and unhappy. However, since filing the papers the star has been seen looking cheery with her daughter, taking her for late night ice-cream trips and making TV appearances.

The star hired law firm Aronson, Mayefsky and Sloan to handle her proceedings. Her choice to hire the firm lead many to believe that she was ready for a fierce court battle, as the company also represented Christie Brinkley in her messy divorce to husband Peter Cook. A divorce notorious for being one of the most bitter showbiz splits.

However, now that the Hollywood couple are having alleged peace talks, the pair are said to be finalising a full settlement behind closed doors and away from the courtroom.