"Over the course of the day, progress has been made to help him have the future that he wants, and we will be staying in touch with him as this process moves forward," U.S. Secretary of State Hillary Rodham Clinton said speaking to reporters after two days of annual strategic talks in Beijing.
The deal, if tentative, showed renewed resolve by Washington and Beijing to end one of their most delicate diplomatic crises in years.
Dealing with Chen's case quickly allows the governments to focus on managing the larger irritants over trade, Syria, Iran and North Korea that bedevil relations between the world's largest economies, one a superpower, the other its up-and-coming rival.
A blind, self-taught lawyer and symbol in China's civil rights movement, Chen triggered the standoff after he escaped abusive house arrest in his rural town and sought refuge in the U.S. Embassy in Beijing last week.
He left six days later under a negotiated deal in which he and his family were to be reunited at a hospital and then safely relocated in China so he can formally study law. But he then upended the agreement by saying they wanted to go abroad.
Obstacles to getting Chen out of China remain. Key among then is whether he would have to return to his home county in Shandong province to apply for a passport. Though a usual procedure, it would potentially expose him to retribution from the local officials who kept him and his family under brutal house arrest for his activism that exposed forced abortions and other misdeeds.
After emerging from the embassy and arriving at Chaoyang Hospital on Wednesday for treatment of an injury, Chen said he had no further direct contact with U.S. officials for nearly two days, fueling a sense of abandonment and fears about the safety of him, his wife and two children.
"I can only tell you one thing. My situation right now is very dangerous," Chen said told The Associated Press earlier Friday.
However, Clinton said that Ambassador Gary Locke spoke with Chen on Friday and that embassy staff and a doctor met him. "He confirms that he and his family now want to go to the United States so that he can pursue his studies," Clinton said.
Medical checkups showed his health is good other than three broken bones in his foot suffered when he was escaping form his rural village, a senior State Department official said.
Hospital staff brought his children new clothes, cut their hair and gave his son a present for his birthday, the official said. The son is believed to be around 10, the official and family friends said, a vagueness that is typical in rural China where tradition means birthdays are celebrated at the Lunar New Year.
Chen could not immediately be reached for his response to the latest developments.
His earlier pleas for U.S. sanctuary, delivered via conversations with The Associated Press, other foreign media and friends, have resonated around the world and even become part of Washington politics in a presidential election year.
On Thursday, he called in to a congressional hearing in Washington, telling lawmakers he wanted to meet U.S. Secretary of State Clinton, who is in Beijing for annual security talks. "I hope I can get more help from her," Chen said.
The Foreign Ministry statement that said Chen was a normal citizen who may apply to study overseas.
"Chen Guangcheng is currently being treated in hospital. As a Chinese citizen, if he wants to study abroad he can go through the normal channels to the relevant departments and complete the formalities in accordance with the law like other Chinese citizens," the statement said without elaborating.
While the statement only reiterates the normal rights of a Chinese citizen, it underscored the government's openness to letting him go and gives shape to a possible solution: He goes abroad with the approval of the Chinese government, not the U.S., giving Beijing a face-saving way out.
Chen has a letter of invitation from New York University, according to Guo Yushan, a supporter who helped hide Chen in Beijing after his escape from house arrest, in a Twitter post early Friday.
At a Foreign Ministry briefing, spokesman Liu Weimin also confirmed that Chen faces no pending criminal charges, indirectly acknowledging that the house arrest he and his family endured the past 20 months in their rural home was illegal.
"According to Chinese laws, he is a regular citizen. He can absolutely go through regular formalities by normal means," Liu said.