The British and Irish premiers are meeting in Dublin as efforts to inject new momentum into Northern Ireland's political process resume.
Both premiers are hoping to kick-start the political process
The talks between Tony Blair and Bertie Ahern are being held on the eve of the Independent Monitoring Commission's report into paramilitary activity.
US Special Envoy Mitchell Reiss was upbeat about the talks.
"You always have to be optimistic, but there may be more grounds at this time than in the recent past," he said.
"I'm also here to show the (United States') administration's ongoing commitment and interest in moving forward with the peace process."
The talks are being held at Farmleigh House, a government mansion in Dublin's Phoenix Park.
Meanwhile, the US ambassador to London, Robert Holmes, Tuttle has called for all political parties to support the police service.
Speaking at Belfast city hall on Thursday, Ambassador Tuttle said policing could be Northern Ireland's biggest success, but this required the support of the entire community.
Mitchell Reiss was upbeat about the talks
BBC NI political correspondent Martina Purdy said: "His comments on policing were clearly aimed at Sinn Fein, particularly when he said the issue can't be used as a political bargaining-chip.
"The ambassador said his government was heartened by last year's IRA statement and early indications since have been positive.
"He said he looked forward to political progress this year and more risk taking by politicians."
Earlier this month, police said the IRA was still engaged in criminal activity.
However, the government is hoping the IMC will back its assertion that the group is no longer involved in crime.
The DUP has also said it remains concerned about indications that republicans are still involved in criminality.
On Tuesday, party leader Ian Paisley presented Mr Blair with a 16-page document outlining their proposals for a return to devolution in Northern Ireland.
Although details of the Facing Reality document were not released, the paper is understood to propose a two-stage process under which the Stormont assembly might be revived, without a power-sharing executive.
During their meeting, Mr Paisley warned the prime minister against putting a positive spin on the IMC's report.
However, Sinn Fein's Gerry Adams has insisted that the DUP should not be allowed to block political progress.
The Sinn Fein president has dismissed unionists' suggestions of lesser alternatives to the restoration of an executive and has said he wants power-sharing at Stormont within months.
Devolved government at Stormont was suspended in 2003 following allegations of a republican spy ring at the Northern Ireland Office.
Last December, a prosecution against three people accused of involvement was scrapped.
Shortly afterwards, one of the three, senior Sinn Fein official Denis Donaldson who had worked at Stormont, admitted that he had been a British agent for 20 years.