The United States remains committed to the peace process, and is generally optimistic for 2006, Mitchell Reiss has said.
Mitchell Reiss said Sinn Fein must sign up to policing
However, President George Bush's special envoy said there were still two "worrisome" issues.
In an article for the Irish Echo newspaper in the US he said there was a crisis of confidence in unionism and urged Sinn Fein to sign up to policing.
"Parity of esteem implies parity of responsibility," he said.
"We think Sinn Fein has a responsibility to tell its constituents they should co-operate with the police - without fear of retribution - whenever dissidents, thugs and degenerates terrorise their communities."
He said he feared "another year, at least, of lawlessness in republican and nationalist communities".
Mr Reiss said the IRA decision to destroy its weapons and end its armed campaign was "a truly great moment" for the Northern Ireland peace process, but said "we still have some way to travel".
He said many of the loyalists who rioted in September were poorly educated, have bleak employment prospects and feel alienated from the political process.
He said others are nostalgic for the "good old days" of Protestant ascendancy, and feel the British government has conceded too much to nationalists.
"Unionism needs to do more to prepare itself and its members for the time when we may have agreement on all outstanding issues," he said.
"They need to move towards a position when they can take "yes" for an answer and stand up the Stormont assembly."