By JAVIER C. HERNANDEZ

With one week to go before a contract expires, several thousand telephone workers affiliated with the Communications Workers of America and International Brotherhood of Electrical Workers gathered at Verizon headquarters in Lower Manhattan.

To view Union rally outside Verizon headquarters in Manhattan click on: http://www.nytimes.com/imagepages/2008/07/27/nyregion/27rallyCA01ready.html

They chastised Verizon executives for proposing sharp increases in health care payments and reductions in coverage for retirees. Some held signs reading “Hands Off Our Benefits,” vowing to take to the picket line on Aug. 3 if the two sides did not reach a settlement.

Joe Connolly, president of Local 1101 of the C.W.A., said that the union was pushing for a 5 percent annual wage increase, larger pensions and expanded medical benefits. “Right now, employees have to make a choice: Are they going to eat or get benefits?” Mr. Connolly said.

In light of the slow pace of negotiations, a strike was likely, he said. “There’s been nothing resolved on any level at this point.”

Eric W. Rabe, a spokesman for Verizon, however, remained hopeful that a deal would be reached. He declined to comment on the specifics of the negotiations. “I think everybody recognizes that it is in the interests of all sides to get the contract resolved,” Mr. Rabe said.

A major point of contention between the unions and Verizon is the outsourcing and subcontracting of jobs. Union members have said that work like telephone technical support and laying new wires should go to union laborers. But Verizon has said that awarding some jobs to outside firms gives the company the flexibility to create, for instance, a new call center on the spot, or to quickly find laborers for a one-time construction job.