Report: Knicks up their offer

The Knicks returned fire in the battle for Carmelo Anthony being played out across the All-Star Break Weekend, gaining Denver’s attention with an improved multiple-player trade, the New York Post reported Saturday.

The Nuggets’ reportedly outlandish player demands appeared to smoke New York out of the race earlier in the week, while Denver bosses settled on the terms of a trade with the New Jersey Nets that would be activated by Anthony consenting to a contract extension.

But the Knicks’ counteroffer, which would cost them three key players, returned them to the negotiating table in Los Angeles as the East Coast courting of the small forward reached fever pitch on the West Coast.

New York was understood to be offering Raymond Felton, Danilo Gallinari, Wilson Chandler and Eddy Curry’s expiring contract for Anthony, Chauncey Billups and possibly Anthony Carter. Anthony Randolph would be dealt to the Timberwolves for a first-round pick, which also would go to Denver.

According to sources, Knicks owner James Dolan was engaged in extensive talks with the Nuggets into the night Friday and bridged the gap that looked insurmountable days before.

Anthony, who is believed to favor a move to New York over New Jersey, declined to comment on reports that he, too, met with Knicks bosses Thursday but did express his pleasure that they returned with an improved offer.

"It’s been something that’s been going on for a long time to get teams to put deals on the table," he said. "For New York to step up right now and put that deal on the table, there’s obviously good dialogue. Obviously, they feel they want me, but until I get that phone call …"

Knicks power forward Amar’e Stoudemire, who will face Anthony on the court during Sunday’s All-Star game, was hopeful his bosses would help the pair to wear the same colors, saying, "Jim Dolan definitely wants Carmelo Anthony in New York."

A Knicks source said there were "other elements involved" in the renewed, hefty offer — including the hope that Hornets point guard Chris Paul, a free agent in 2012, would follow Anthony to Madison Square Garden. Both are represented by CAA.

"It’s fluid," a second Knicks source said of the negotiations. "We’re trying to stay in it. We’ll know where we stand by the end of the weekend."

CBS Sports earlier reported that Anthony said no meeting was scheduled yet between him and either franchise. "I would love to have something happen this weekend. I would love to have a legit offer to sit down and figure it out," he said.

The Nets deal would send rookie forward Derrick Favors, point guard Devin Harris, forward Troy Murphy with his expiring $11.9 million contract, rookie guard Ben Uzoh and four first-round draft picks to the Nuggets.

Denver would send back Anthony, point guard Chauncey Billups, forwards Renaldo Balkman and Shelden Williams and center Melvin Ely.

The Nets would surrender their first-round pick for June’s NBA Draft along with a pair of 2012 picks (a protected-to-18 pick received from the Lakers and a protected-to-seven pick from the Warriors) and a 2011 lottery-protected Rockets pick.

But that all rests on Anthony’s agreeing to a contract extension.

If the All-Star opts for free agency this summer, he would risk a smaller payday under the new collective bargaining agreement and lose $18 million in guaranteed money next season.

Anthony previously said he was planning to meet with NBA Players Association executive director Billy Hunter on Friday to discuss the financial differences between signing a new contract now and waiting until free agency.