The families of 11 Israeli athletes killed by Palestinian attackers at the 1972 Munich Olympics are close to reaching a deal with the German government over a long-disputed compensation claim, according to reports.

Earlier this month, the families had threatened to boycott Monday’s 50-year anniversary ceremony in Munich organised by German authorities because they said the amount they had been offered was too low.

Several media reported Wednesday that Germany increased its offer to the families to around 28 million euro (£24 million), but that a final deal, while close, had not yet been signed.

German media have reported that during negotiations over the last few weeks, the German government initially offered 10 million euro (£8.5 million) to the families, which would include the payments already made.

The government has not publicly revealed how much money it has offered.

The negotiations over the amount of the compensation underlines a lingering point of friction between the two countries that have built strong ties despite the enduring legacy of the Nazi Holocaust, in which six million Jews were murdered during the Second World War.

Members of the Palestinian group Black September broke into the Olympic Village, killed two athletes from Israel’s national team and took nine more hostage on September 5 1972.

The attackers hoped to force the release of Palestinian prisoners held by Israel as well as two left-wing extremists in West German jails.

All nine hostages and a West German police officer died during a rescue attempt by German forces.

Relatives of the athletes accuse Germany of failing to secure the Olympic Village, refusing Israeli help and then botching the rescue operation.

Immediately after the attack, Germany made payments to relatives of the victims amounting to about 4.19 million marks (about two million euros or £1.7 million), according to the the country’s interior ministry.

In 2002, the surviving relatives received an additional three million euro (£2.5 million), Germany’s dpa news agency reported.