Leeds are hoping to convince the Hornets that the attacker should be sent out on loan.
And a key man in negotiations is former Leeds sporting director Nicola Salerno.
The Yorkshire Evening Post report he is now in position at the same role at Watford, and has been involved in talks.
Leeds United's chances may depend on a favour from the Italian, who remains on good terms with the club despite his exit, playing a part in clinching Sol Bamba's permanent signing as his last piece of business for the club.
Other factors involved too
Watford are undecided on a loan, and this may be because they are holding out hope another side will be willing to match their valuation for a permanent deal.
If this is not met then they could decide to keep him around to help their Premier League chances.
This could also be dependent on their decision regarding Matej Vydra, reported by SkySports to also be weighing up a loan offer from Nottingham Forest.
There is also a question of whether Forestieri is willing to drop down into the Championship again.
The 25-year-old attacker scored five goals and provided six assists in 24 appearances last season.