Speaking after a meeting at Farmleigh House with Britain's Northern Secretary Theresa Villiers this morning, Tánaiste Eamon Gilmore said a major part of the talks had focussed on the Union flags issue.
Ms Villiers has said that the problem should be addressed in political dialogue rather than by street protests.
Mr Gilmore said both governments supported the work of the Parades Commission, but said the underlying socio-economic environment had to be tackled when looking at the flags dispute.
The Tánaiste told reporters the numbers involved were small and not all protesters set out to cause trouble.
He praised the work of community leaders, who he said had done much to ease tension.
Mr Gilmore said there was no doubt sectarianism remained a huge problem.
He said the Government supported the work of the Northern Ireland executive and was providing funding for various grassroots initiatives but a lot more work remained to be done.