The prime minister has welcomed the renewed dialogue on Northern Ireland but counselled against believing that all issues have been resolved.

Speaking after talks with Gerry Adams and the head of the police service in Northern Ireland on Monday, Tony Blair said progress was being made.

"The more the people are in dialogue the better it is," he said.

Asked if all IRA weapons could be decommissioned this year, along with power sharing, Blair said: "All those possibilities are there. But let's see what happens in the next few days."

Gerry Adams has said he believes the DUP is close to agreeing a deal to restore the Northern Ireland assembly.

The Sinn Fein president said on Sunday that the unionist leader Ian Paisley was prepared to go into government with republicans even though he has so far refused to talk directly with them.

"We can get an agreement, despite the refusal of Ian Paisley to talk," he said.

Last week the British and Irish government set a deadline of "days" for Ulster parties to reach a deal on restoring the devolved Stormont assembly.

And US president George W Bush intervened, calling on Adams and Paisley, the two key players in the negotiations, to come to an agreement.

But Paisley is understood to be seeking reassurances that all IRA weapons will be verifiably put beyond use before he enters into government with Sinn Fein.

And Adams said the governments must ensure that any devolution deal is lasting and that the 1998 Good Friday agreement is enforced in full.

He said people were "hugely sceptical" that Paisley would accept any accord with republicans.

However he added that "I think he will do a deal".

"But there is a responsibility on the British government to press ahead with the Irish government on all the outstanding aspects of the agreement," he told the BBC's Breakfast with Frost.

Adams said Sinn Fein had two key objectives in the talks: "One, is to do a deal with the DUP and two, is to ensure that it is bedded and that the governments put their propositions firmly in the fundamentals of the Good Friday agreement."