After three days of talks at a 1000-year-old castle southeast of London, UK Prime Minister Tony Blair and his Irish counterpart Bertie Ahern said on Saturday they had not reached a deal to restore home rule in Belfast.
But the two leaders, who have put huge personal effort into the Northern Ireland peace process since overseeing the 1998 Good Friday peace agreement, indicated they believed they had secured agreement in principle from the IRA on fully disarming.
"We believe we can resolve the issues to do with ending paramilitary activity and putting weapons beyond use," Blair told a news conference as talks broke up at Leeds Castle.
"There is, however, not yet comprehensive agreement on how to change the strands one, two and three of the Good Friday Agreement without damaging the fundamentals and the fair and inclusive basis of the agreement."
Political sources said the talks had struck an impasse over changes the hardline Protestant Democratic Unionist Party (DUP) was demanding to the Good Friday accord.
"We are not prepared to compromise, that's absolutely true - but none of the other parties are prepared to move one iota on the changes we need to see in the agreement," a DUP source told Reuters.
Blair and Ahern wanted a deal to revive the 1998 accord, which has largely halted 30 years of violence, but failed to heal deep divisions between Catholics, who want to see a united
Paisley (C) refuses to talk to Sinn
Fein and brands them terrorists
Ireland, and Protestants who support British rule.
But they faced an uphill battle trying to negotiate an agreement between Sinn Fein, the IRA's political ally, and the DUP, the dominant Protestant party led by 78-year-old preacher-politician Ian Paisley.
Paisley said the party needed more proof of any IRA commitment to disarm. "I am too old to be bluffed. We will believe it when we see it, and we're going no farther than that."
Paisley denounces Sinn Fein as terrorists and the DUP refuses to talk to it. He demands that the IRA should disband.
Progress with IRA
Sources involved in the negotiations said some progress was made on the issue of the IRA and its weapons, and that the two governments had an outline of what the guerrillas might be prepared to do as part of a wider deal with the DUP.
But the DUP insisted on changes to the self-governing mechanisms set up under the Good Friday Agreement - a deal Paisley's party never supported and played no part in negotiating.
"I think that progress was made on a range of issues," Sinn Fein leader Gerry Adams said. "My strong view is that the IRA is not the problem."
Adams: My strong view is that
the IRA is not the problem
"The real sticking point is that the DUP is not prepared to move from its position of demanding fundamental changes to the Good Friday Agreement," a Sinn Fein source said.
Blair and Ahern had said the talks were the last chance to resurrect the 1998 pact, after two earlier attempts ended in failure. But on Saturday they said they were giving negotiations more time, with further talks in Northern Ireland next week.
Disarmament key issue
The Belfast-based legislature and executive set up under the accord collapsed in October 2002 when Protestant unionists refused to remain in government with Sinn Fein while the IRA remained armed and intact.
That breakdown resulted in Britain reimposing direct rule from London on the province of 1.7 million people.
The province has suffered from
30 years of sectarian violence
Blair and Ahern said any new deal to break the deadlock had to involve the IRA disarming and effectively winding itself up as an active paramilitary organisation.
The guerrilla group, which called a ceasefire in its war against British rule in 1997, has destroyed an unspecified amount of weaponry on three occasions since October 2001. But security sources say it retains a substantial arsenal.
If the IRA delivered, the two governments wanted the DUP to give a cast-iron commitment it would share power with Sinn Fein.