The British Prime Minister Tony Blair, and the Irish Prime Minister, An Taoiseach, Bertie Ahern are to hold talks on the worsening political situation in the North before St Patrick's Day, it has emerged.
London officials were reported to have said that the present review of the Good Friday Agreement "is unlikely to produce a positive outcome".
Mr Ahern yesterday insisted that continued IRA activity effectively ruled out any prospect of achieving partnership among the North's political parties.
Mr Ahern made the comments during a lecture at Derry's Magee College.
In a hardline statement on the peace process, Mr Ahern said the Republican Movement must definitively end paramilitary activity, in word and deed, if good governance is to be delivered to the North of Ireland.
The Taoiseach also said unionist efforts to exclude Sinn Féin from the political process were equally damaging to the prospects of "partnership government".
Speaking in Derry yesterday, Mr Ahern said the two issues jointly topped the British and Irish governments agenda in attempting to reach agreement in the north.
Referring to recent allegations of IRA activity, Mr Ahern said he was frustrated that the destructive agenda of the past damaged collective efforts to move the peace process forward.
Opposing appeals from Ulster Unionist leader David Trimble and from the DUP for the exclusion of Sinn Fin, he said: "Some parties seem to believe that a policy of exclusion is the answer. It is my belief that any such policy would not be workable."
Speaking afterwards, Mr Ahern told reporters: "We had penalties before against parties - Sinn Fin and the Ulster Democratic Party out. What did we do after that? We brought them back in again."
He denied the Dublin government's attitude towards Sinn Fin had hardened. "There is no change in our policy, and won't be."
Asked if he privately considered a deadline for so-called 'acts of completion' by republicans, he answered: "We haven't reached that time yet."
Around a dozen Sinn Féin supporters protested as he arrived at Magee. They also waved placards accusing him of 'Standing Idly By' in the peace process. A group of anti-war protestors demonstrated as he departed.
Speaking afterwards, Sinn Féin's Martin McGuinness admitted there was a danger of the process running into the sand.
He clearly recognised that there is an awful lot for everybody to do within the process, he said.
"I agree with the Taoiseach that what we need to see are the power-sharing institutions restored and all the groups within our society discontinue violence and preparations for violence of any description whatsoever."
Mr McGuinness also said more emphasis should also be placed on unionist paramilitary activity and links between the DUP and Ulster Resistance.
He said the idea that republicans had been involved in a consistent basis in activities to undermine the peace process was wrong.
The Mid Ulster MP added that the Sinn Féin leadership fully supported a comprehensive approach, involving all parties and issues, to secure a "big deal" to end the crises in the peace process
Mr McGuinness said Dublin and London had to work in tandem with all pro-agreement groups to oppose elements opposed to the Good Friday Agreement.
He said: "A comprehensive approach is required. The Sinn Féin leadership will do everything in its power to make our contribution to that."
He added: "There are dissident activities out there. There are people in society who are involved in punishment beatings who are not republicans."
Mr McGuinness said the forthcoming European and local government elections in the South explained much of the focus on alleged republican paramilitary activity.
"We shouldn't let elections interfere in the work of the peace process. It is more important than any election," he said. No one in his party would run away from the challenges outlined by Mr Ahern.
"The vast bulk of violence that we have experienced over recent years has come from unionist paramilitaries."
Describing the DUP as "a party in transition" he forecast that the Ian Paisley's party would eventually agree to share power with Sinn Féin.
* The PSNI police chief Hugh Orde has insisted that the Provisional IRA has been behind as many so-called punishment beatings and shootings as the UDA -- about 50 in the past year, including the alleged attempted abduction of republican dissident Bobby Tohill last month.
Sinn Féin described the claims as unproven allegations and accused the chief constable of increasingly "unwarranted and unwanted political interventions".