The assembly at Stormont has been suspended since 2002
The government has set a deadline of 26 March 2007 for the politicians to resolve their differences over policing and power-sharing.
The idea is that nationalists and unionists will work together in a devolved government and the assembly will be able to legislate for many local matters.
What exactly is the assembly designed to do?
The assembly is one of the cornerstones of the Good Friday Agreement and it was designed to deliver two key changes to help end the conflict:
Devolution of power and administration to Belfast
Power-sharing by the political leaders of the two communities
The assembly has legislative powers, although the precise package is different to those found in the National Assembly for Wales and the Scottish Parliament.
Who sits in the assembly?
The voting arrangements for the assembly are designed to ensure proportional support and parallel consent across the communities.
That means that the 108 representatives are largely split into two camps dominated by the big four unionist and nationalist parties, although some representatives belong to neither side.
Key decisions need to have the support of at least 40% of each community.
The two largest parties are Ian Paisley's Democratic Unionists and Sinn Fein, the political wing of the republican movement. In theory, were power-sharing operational, these two parties would take the key portfolios including first minister and deputy first minister.
The parties can nominate members to become ministers in the power-sharing executive, based on the relative strength of the parties.
The executive team run their own departments (such as education or health) and should work collectively to bring proposals to the assembly.
So why hasn't any of this been happening?
The entire deal collapsed amid recrimination in October 2002 after allegations of a republican spying ring at Stormont. The police raided Sinn Fein's offices and, as a result, Ulster Unionists said they could no longer sit in government with the party.
The DUP, then the second-largest of the two unionist parties, already opposed power-sharing with Sinn Fein because it saw the party as "indistinguishable" from the IRA.
The Northern Ireland secretary suspended the assembly and executive and returned direct rule to London under his team of ministers.
And nothing has been done since?
The British and Irish governments hoped the 2003 assembly elections would help break the impasse but, in reality, the poll led to an apparent hardening of positions. The IRA has since ended its armed campaign and the independent commission monitoring disarmament has declared that all the organisation's weapons have been put beyond use.
Attempts by the British and Irish governments to broker a deal hit several obstacles, including unionist outrage over the robbery of some £26m from the Northern Bank in Belfast - a raid police blamed on the IRA.
Separately, the trial linked to the Stormont spying allegations collapsed and it emerged that one of the key Sinn Fein figures in the case was, in fact, a British agent. He was found shot dead in April 2006, the finger of suspicion falling on republicans angered at his betrayal.
In 2006, Tony Blair and Bertie Ahern tried once again to overcome the outstanding difficulties. In October 2006 they negotiated the St Andrews Agreement - a road map towards the restoration of a power-sharing government.
The deal involves Sinn Fein dropping their opposition to the police and the DUP committing to share power with republicans. An election will be held as a precursor to the formation of a new government.
What happens after the election?
On 7 March voters will go to the polls to elect their representatives.
On 26 March a new power-sharing executive is due to be formed.
And what happens if there is no agreement?
If the parties cannot agree, the government says it will close the Stormont assembly and stop the politicians' salaries and allowances.
What happens after that remains unclear, although Dublin and London say they remain committed to implementing the rest of the Good Friday Agreement, with a step-change in north-south co-operation.
The Sinn Fein leadership has taken a major step by recommending a change in the party's attitude to the police. However it's not clear how quickly that policy will be implemented.
The DUP wants to see proof on the ground of republican support for the police before they consider sharing power.
Some republicans have criticised Sinn Fein over its latest moves on policing. Equally some DUP politicians appear reluctant to enter a coalition with Sinn Fein under almost any circumstances.
However, the government believes the dissenters on both sides are in a minority.