Uganda's leader could take personal charge of peace talks with rebels in Sudan, he has said.
The LRA has abducted many children to become fighters
President Yoweri Museveni was becoming frustrated at the slow pace of the talks, his prime minister suggested.
Mr Museveni earlier stressed that international arrest warrants must remain in force until rebels prove they are committed to peace.
The rebel leaders missed a deadline this week to leave the bush and gather in neutral zones in southern Sudan.
The talks are seen as the best chance of ending the 20-year conflict.
President Museveni thought some of the demands being made by the rebel Lord's Resistance Army delegation were unrealistic, Prime Minister Apollo Nsibambi told journalists in the capital, Kampala.
Mr Museveni has said he could travel to the southern Sudanese town of Juba, if mediators told him that the time was right.
Mr Nsibambi said the president's presence at the talks would dispel any doubts the LRA might have about the government's commitment to the peace process.
On Wednesday, Mr Museveni rejected LRA demands for the lifting of war crimes indictments by the International Criminal Court based in The Hague.
"The ICC indictments have to continue until the LRA leaders fully embrace the peace talks," he told Mega FM radio in northern Uganda, where the conflict has led more than 1m people to flee their homes.
"How do you ask for safety from the ICC when you haven't given safety to Ugandans?" he asked.
President Museveni also warned the rebels that they would "hunted down" if they refused to end the conflict.
Monitors say that some 800 LRA fighters have gathered in two assembly points, as specified in a truce agreed in talks in the southern Sudanese town of Juba three weeks ago.
On Tuesday, Interior Minister Ruhakana Rugunda played down the significance of the LRA leaders missing the deadline and said they would be given a few extra days.
But LRA deputy leader Vincent Otti has again said that the warrants must be lifted.
"The ICC is the first condition, without that I cannot go home because it might be a trap," he said.
Mr Museveni has offered them amnesty if a solid peace deal is achieved but the ICC has not changed its position.
The government has said it would set up a legal committee to advise the government on legal issues arising from the peace talks.
Jan Egeland, the United Nations emergency relief co-ordinator, has urged the UN Security Council to back the peace process rather than seeking to secure the arrests of the rebel leaders at all costs.
"This is the best chance we have ever had for peace in northern Uganda," he said.
An estimated 20,000 children have been kidnapped during the insurgency, with girls forced to become domestic and sexual slaves and boys turned into child soldiers, according to the UN.