The parties taking part in the Northern Ireland peace talks have agreed to negotiate a settlement based on proposals put forward by the British and Irish Governments.

The document's proposals include setting up a Northern Ireland assembly, together with two councils.

BBC Correspondent Tom Coulter assesses the breakthrough in the talks (2'41")

One of the councils would deal with all the relationships within the British Isles, and the other dealing with Belfast's relations with the Republic of Ireland.

The agreement means the parties meeting at Stormont can now begin talking about real negotiations.

George Mitchell: "Murders have been a reminder"

The independent chair team said at the end of the talks on Tuesday it was a very significant and encouraging step.

Talks chairman George Mitchell said recent murders had reminded everyone what the consequences of failure could be.

"That is a result that no sensible person with the interests of Northern Ireland in mind could possibly want," he said.

There are, however, still plenty of problems to be overcome.

Seamus Mallon: "Difficult times ahead"

Seamus Mallon, leader of the SDLP, which is associated with the Catholic community, said: "How do we get the type of arrangement which will give absolute victory to no-one, and absolute defeat to no party?

"That is the nature of this process - it has been since the beginning."

Mitchel McLaughlin: "Committed to talks"

The party that has the most problems with the proposals is Sinn Fein, as the plan appears to cement the border in Northern Ireland.

Mitchell McLaughlin, national chairman of Sinn Fein, the political wing of the IRA, said: "Sinn Fein is totally and absolutely wedded to our commitment to find a solution through a process of negotiation.

David Trimble: "Confident"

"Either this is the negotiation or else we will play a part in designing a process of negotiation that will work. We will not be driven out of it."

David Trimble, the leader of the biggest unionist party, the Ulster Unionists, which is associated with the Protestant community, said he was confident things would develop to the advantage of his party.

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