Speaking on Friday at a news conference after an EU summit in Brussels, Tusk said progress was "not sufficient" to begin trade talks with Britain but that "doesn't mean there is no progress at all.”
"My impression is that reports of the deadlock between the European Union and the UK have been exaggerated, and while progress has not been sufficient, it does not mean there is no progress at all," Tusk told reporters.
He made the remarks after EU leaders agreed to start internal preparations to pave the way for the next round of talks with the UK, possibly in December.
Tusk said that London’s proposals on future relations between the UK and EU would be considered by the EU's internal work on a trade deal.
Meanwhile, European Commission President Jean-Claude Juncker played down concerns that London could leave the union without reaching a deal in 2019.
"Our working assumption is not the no deal scenario, I hate the no deal scenario," said Juncker, standing alongside Tusk. "I want to have a fair deal with Britain."
Tusk said his one-on-one meeting with British Prime Minister Theresa May and a meeting with the remaining 27 EU member states were positive.
"My feeling today and in my tete-a-tete with Theresa May, I feel for sure that both sides present only goodwill," he said.
However, he said there was not sufficient progress to start full trade talks until at least December.
"I would like to reassure our British friends that in our internal work we will take account of proposals present there (in Florence)," he said.
May delivered a speech in Florence, Italy, last month to encourage EU leaders to agree that “sufficient progress” has been made on the withdrawal for discussions to turn to trade.
May: Brexit talks are in 'difficulty'
On Thursday, May acknowledged for the first time that Brexit negotiations with the EU have hit “difficulty,” as she pressed EU leaders for a Brexit deal she can "defend" at home.
Speaking in Brussels, May explicitly conceded that talks were in trouble and said she “recognized the difficulty the process was in,” according to Downing Street.
"The clear and urgent imperative must be that the dynamic you create enables us to move forward together," May told her colleagues.
As expected, her 27 EU counterparts agreed at the summit that not enough progress had been made on other issues to begin formal trade talks now.
They have officially concluded that "insufficient progress" has been made in negotiations over citizens' rights, the border in Northern Ireland and the UK's financial obligation to allow them to move onto the second phase of talks with the UK dealing with trade discussions.
EU leaders have been increasingly frustrated about divisions in May's cabinet over Brexit, saying they are still unsure what the UK wants, even after five rounds of negotiations.
The slow progress of Brexit talks has fuelled fears that May's government may collapse, or worse that London may fail to strike a withdrawal agreement with Brussels before its formal exit from the EU on March 29, 2019, which could cause economic and transport turmoil in the UK and EU.