The Stormont assembly is to meet to hear if the DUP and Sinn Fein will indicate their candidates for the first and deputy first minister jobs.
The assembly is meeting at Stormont
The government has warned the DUP of consequences if it does not give any indication that Ian Paisley could take the top job in March next year.
Friday has been billed as a critical day by the two governments.
Secretary of State Peter Hain has said it is "now or never" for Northern Ireland's politicians.
Friday's meeting of the assembly is the first since legislation was passed to redesignate it as a transitional body which will be dissolved in January, to pave the way for elections in March.
For months the governments billed 24 November as a make-or-break date, but since the St Andrews Agreement, the deadline has been watered down, with no talk of the politicians' wages and allowances being cut.
Mr Hain wants the parties to at least indicate who their choices for the two top jobs at Stormont will be.
And he said on Friday that he was prepared to pull the plug on Stormont unless it seemed that progress could be made.
"I have got a dissolution order drafted - we're prepared to use it if it looks at any time in the coming period as if there's no prospect at all of devolving power on 26 March, after an election and the people have spoken.
"And what's important about today - and all the parties signed up to the process today, to give an indication that on 26 March, Ian Paisley and Martin McGuinness would be first and deputy first minister respectively - they all signed up to that process and they now need to indicate whether they're going to fulfil that agreement."
Sinn Fein MP Conor Murphy said it was an important day.
"We expect to play our part in moving the process forward," he said.
"And we expect, although we are not naive about the DUP and their reluctance to do any of this, we expect the DUP should come forward and play their part also."
The last time Gerry Adams proposed Ian Paisley and Martin McGuinness for the first and deputy first ministers' posts, the suggestion was rejected by the DUP leader.
The government will be hoping that whatever happens on Friday is more positive than that.
Irish Foreign Minister Dermot Ahern warned if the parties refused to play ball, the governments would reluctantly implement their Plan B for governing Northern Ireland.
Sinn Fein leader Gerry Adams has said if the DUP do not nominate, devolution should be shelved by the governments.