Taoiseach Enda Kenny and British prime minister David Cameron have urged Stormont's politicians to strive for agreement as the on-going talks process enters a crucial phase.

The two leaders both acknowledged major issues remain unresolved in the negotiations between the five Executive parties but said they hoped there would be progress.

Their statements came ahead of the return to Northern Ireland of US envoy to the talks, former US senator Gary Hart, to help try and break the deadlock.

While no formal deadline has been set to reach agreement, Christmas is seen by many as an effective cut-off point, as political positions are anticipated to harden in the New Year when the UK general election looms.

The talks are centred on resolving long-standing impasses over the issues of flags, parades and how Northern Ireland deals with its violent past.

The future of the devolved Stormont Assembly and its failure to implement Westminster welfare reforms is also being negotiated.

Mr Kenny and Mr Cameron are due to travel to Northern Ireland before Christmas.

Today Mr Kenny warned the parties that the window is narrowing for a deal. “I recognise that complex and difficult issues remain to be addressed,” he said. “However, politics – and political leaders – have to now focus on delivering an agreement for all the people, even if that requires difficult negotiation and compromise.

“I urge all the parties to intensify their efforts in the immediate period ahead and seize the opportunity to secure an agreement.”

Minister for Foreign Affairs Charlie Flanagan and Northern Ireland Secretary Theresa Villiers have given Mr Kenny and Mr Cameron, respectively, interim reports on the talks two months since they began.

“I am pleased that [the Secretary of State’s] report indicates progress in those negotiations and that all of the parties have engaged constructively in the process,” said Mr Cameron.

“Clearly these are complex and difficult issues and I recognise the scale of the task that lies ahead. The UK government will do all it can to support the parties in their efforts to reach agreement. I urge the parties to continue in their endeavours.”

Earlier last week Ms Villiers predicted there was only a slim chance of a deal. But on Friday she gave a more upbeat assessment, claiming that the negotiations between the five main Stormont parties had seen a positive turning point. She stressed an agreement was still a long way off.

Mr Hart is expected to be in Belfast throughout this week. Press Association