The Taoiseach and the British Prime Minister are both expressing confidence that "with realistic negotiations" a historic agreement can be reached on Northern Ireland.
Following a 40-minute meeting yesterday evening - their third Anglo-Irish session in three days - Mr Ahern and Mr Tony Blair have given North-South bodies a legislative base in the latest draft of an agreement between the governments.
But sources insist the legislation question is "tied up with material yet to be agreed". There are still "difficulties" on policing the North-South structure, which are to be resolved at a further meeting between the two leaders today.
Although officials were drafting texts of the North-South dimension all day, the two leaders were not in a position to give a joint paper to the chairman of the talks, Senator George Mitchell, last night.
But the Taoiseach and the British Prime Minister did hold a three-way conference call with Mr Mitchell at around 6.30 p.m. to brief him directly on their latest positions.
In a joint statement after their meeting, Mr Ahern and Mr Blair said their meeting had "focused upon the remaining difficulties". It had been useful that they had been able to speak at regular intervals during the day.
"Further progress has been made and they remain of the view that, with realistic negotiations, an agreement can be reached," the statement added.
Sources suggested last night that the time constraint imposed by Mr Blair's presidency of the Europe-Asia summit may have been responsible for the leaders' failure to agree and present a joint position on North-South bodies to Mr Mitchell.
It is understood conditional agreement has been reached on giving the proposed bodies a legislative basis in the Dail and Westminster.
But the North-South paper is not yet completed.
The two leaders were preoccupied yesterday with the agreement's North-South component. On the assembly's leadership structure, which is the responsibility of the British government, Mr Mitchell is understood to have planned to present the Northern parties with two options last night.
Mr Ahern and Mr Blair presented him with a joint position paper on Strand Three, where it is proposed that the east-west structure will have no authority over the North-South body. Several "square brackets" - used to indicate where words have not been agreed - are reported to be in that paper. Joint papers on equality and prisoners were also sent to Belfast.
Before his private meeting with Mr Blair, Mr Ahern spoke to the SDLP and Sinn Fein leaders. Arrangements have been made for him to meet the SDLP in Government Buildings in Dublin tomorrow.
There was informed speculation last night that Mr Ahern and Mr Blair were forging ahead to reach agreement on Strands One and Two without line-by-line agreement from the Ulster Unionist Party leader, Mr David Trimble.
