Minister for Foreign Affairs Micheál Martin and Northern Ireland Secretary Shaun Woodward met in Hillsborough last night to review the problems in the power-sharing administration at Stormont.
Northern Ireland's first and deputy first ministers had a public row in Limavady on Monday.
The spectacle convinced the British and Irish governments that power-sharing at Stormont is in trouble.
Martin McGuinness and Peter Robinson are squabbling over the devolution of justice and policing powers from London to Belfast.
Sinn Féin argues it has proven its 'bona-fides' by joining the Policing Board and supporting the PSNI.
Martin McGuinness wants a date for devolution agreed by the end of the year.
The DUP's stance is to list preconditions that must be satisfied before devolution goes ahead.
Two months ago the problem was finance.
Peter Robinson's latest dealbreaker is the contentious issues of parades.
Against this troubled backdrop Micheál Martin and Shaun Woodward began firefighting at Hillsborough last night.
The two governments agreed to work up to Christmas in the search for a compromise.
They are convinced they will come up with a formula to allow devolution to take place early in the New Year.
The Taoiseach has told the Dáil that he believes that progress can and should be made on the devolution of policing and justice in Northern Ireland.
However, he said it would require goodwill and dialogue between the parties involved.
Mr Cowen said that he would not like to see a situation where progress had not been made on this coming into the New Year.
He indicated that the Government had been made aware of the contents of the letter sent by First Minister Robinson to British Prime Minister Gordon Brown.
The Taoiseach was replying during leaders questions to Sinn Féin's Caoimhgín Ó Caoláin.
