A position is a preferred course of action or a demand.  An interest is the reason(s) for a position or an objective.  A party's interests will usually consist of their needs, fears, desires and basic concerns which they are trying to satisfy with their fixed position.  There are often many ways of satisfying a party's interests, not just the one fixed position initially offered as the only solution.

Mediation attempts to identify the interests behind the positions, and find common ground at the interest level to form the basis of an agreement.