Before he entered Hillsborough Castle for talks with Mr Blair, Sinn Fein president Gerry Adams said he hoped the talks marked a new push to resolve the difficulties in the peace process.
Mr Blair was greeted by Secretary of State Peter Mandelson as he arrived in Hillsborough on Wednesday.
During his visit, he will be having talks with the main political parties.
Emerging from talks with the prime minister, David Ervine of the Progressive Unionist Party described Mr Blair's mood as buoyant.
"I think it's too early to say progress is being made. What I witnessed was a determination."
Before he entered Hillsborough Castle for talks with Mr Blair, Sinn
Fein president Gerry Adams said he hoped the talks marked a new push to resolve
the difficulties in the peace process.
Mr Adams said: "We are glad that the British prime minister is here. We hope that it is part of a process which will be successful.
"I have to say that unless Mr Blair gets himself politically focused in the way that he has been at different times in this process, then the possibilities are quite limited."
Meanwhile, the Ulster Democratic Party, Gary McMichael, has warned Mr Blair not to give concessions to Sinn Fein and the SDLP on policing and demilitarisation.
He was speaking after a half hour meeting with the prime minister.
The SDLP was also meeting Mr Blair.
On Thursday Mr Blair is also due to hold talks with the Ulster Unionist Party, the Democratic Unionist Party, the Women's Coalition and the Alliance Party.
He is expected back in London later on Thursday.
'All-embracing deal'
British and Irish government sources have been predicting what they call a step change in the peace process this week and direct prime ministerial involvement is seen as a key part of the discussions.
This is the last week of the Clinton presidency and key United States personnel are involved in the discussions, including the deputy national security adviser, Jim Steinberg.
The discussions have focused on the issues of paramilitary weapons, the future of army bases in the province, police reform and the political linkage between them.
Some surprise has been expressed by the parties in Northern Ireland that Mr Blair is making another personal intervention given a generally pessimistic backdrop to the negotiations.
Earlier, Peter Mandelson said it was time to end what he called the "bits of Elastoplast approach" to the Northern Ireland peace process.
He said what was needed was an all-embracing deal which would allow a real move forward.
Mr Mandelson said the government also had its part to play on the plan, with moves on demilitarisation.
He said that would only be on the advice of the chief constable about the security threat.
But he added that he would not allow dissident republicans to stand in the way of peace.
Pressure
Earlier this week, Sinn Fein president Gerry Adams repeated his position that it was Mr Blair's responsibility to move the process forward.
Mr Adams has been calling on the British Government to honour commitments he says were made on demilitarisation and policing last May, before the suspended assembly was re-established.
Mr Blair's visit comes as nationalists face increasing pressure to accept the government's legislation outlining reform of the police service in Northern Ireland.
Both Sinn Fein and the SDLP feel the Police NI Act does not go far enough towards implementing the recommendations for change to policing made in the Patten report.
Both parties have so far refused to nominate representatives to sit on the Police Board which is to oversee the reformed service.
However, the government is still in talks with the SDLP on its implementation plan amid hopes the party will be persuaded to accept the reforms.