The DUP and Sinn Fein are at loggerheads over whether the UK has agreed to the controversial 'backstop' solution to the Irish border.
No agreement has yet been reached on the right operational approach to avoid a hard Irish border, the EU's draft agreement showed.
But the so-called 'backstop' solution envisaging Northern Ireland effectively remaining within the EU customs union if no other solution is found has been assented to - at least in principle.
The draft agreement said: "With respect to the draft protocol on Ireland/Northern Ireland, the negotiators agree that a legally operative version of the 'backstop' solution for the border between Northern Ireland and Ireland... should be agreed as part of the legal text of the Withdrawal Agreement, to apply unless and until another solution is found."
But that has been interpreted in different ways. Despite its vehement opposition to the 'backstop', the DUP appeared relaxed.
The party is adamantly opposed to any deal creating a difference between Northern Ireland and the rest of the UK.
It said the border issue "has not been resolved at this stage and we didn't expect it to be".
It added in a tweet: "Work continues on the issues around the border in the coming months. There has been no agreement around how arrangements of any potential border backstop option C would work, or indeed other options.
"The Government and the European Union in the December Joint Report committed to no hard border between Northern Ireland and the Republic and no borders of barriers to trade within the United Kingdom after the UK's departure.
"The EU's proposed draft legal text recently published has been rejected by the Prime Minister in the House of Commons and we agree that it is totally unacceptable. We will continue to work with the Government on these matters and will be guided by the principle that there can be no internal border within the UK as we leave the European Union."
The Prime Minister found herself placating the EU and DUP, whose MPs keep her government in power, at the same time.
In a letter to EU Council President Donald Tusk published on the No.10 website late last night, Theresa May wrote "I want to reinforce my commitment to the joint report in its entirety", including protecting the Good Friday Agreement.
But she also agreed with the DUP that more needed to be done. "The commitments in the joint report on which more work is needed include the guarantee of avoiding a hard border between Northern Ireland and Ireland, and to preserving North-South cooperation as set out in the joint report.
"The report also provides clear recognition for Northern Ireland's constitutional status, the principle of consent, and protecting Northern Ireland's place in the UK internal market."
Irish foreign minister Simon Coveney said last night the December deal, which would effectively see Northern Ireland retain EU regulations after Brexit, still stands.
"There's an understanding that an overall withdrawal agreement will not be finalised and agreed without a legally operational backstop in place.
"At some point in the future that may or may not be replaced by something better," he said.
Brexit Secretary David Davis said it remained the UK's intention to achieve a partnership that was so close it did not need Northern Ireland-specific measures and pledged to engage in detail on all scenarios set out in December's Joint Report between the two sides. He said: "We have also reached consensus on the full set of issues which need to be addressed in any solution in order to avoid a hard border, which is why, last week, we set out a work programme to tackle them.
"There are also some elements of the draft protocol, such as the Common Travel Area, on which we agree. So while there is as yet no agreement on the right operational approach, we know what we need to do, and we're going to get on with it."
EU chief negotiator Michel Barnier said they had agreed that the EU's "back stop position" which would see Northern Ireland effectively remain part of the single market if there was no wider agreement, would form part of the legal text of the withdrawal agreement.
"The backstop will apply unless and until another solution is found," he said.
Sinn Fein MEP Martina Anderson said that the UK had now accepted the commitments it made on Brexit in December.
"Despite denials from Theresa May there is now confirmation that the British Government is accepting the agreements made, including the 'backstop' option which would see the north remaining in the customs union and significant elements of the single market," she said.
Ulster Unionist MEP Jim Nicholson called on London to maintain its opposition to any Brexit deal that would jeopardise Northern Ireland's position in the UK and the principle of consent.
He said: "Northern Ireland is not up for sale. It is vital that the Government - and the DUP which is propping it up - maintains its firm commitments that it will not accept a final Brexit deal that diminishes in any way the constitutional integrity of the UK.
"Any 'backstop' separating Northern Ireland from the rest of the UK was unacceptable in December, it is unacceptable now and it will be unacceptable in the future."
SDLP leader Colum Eastwood said: "The solution to the Irish border question will remain with the answer provided in the December EU text 'unless and until' the British Government come forward with a better solution.
"We have waited for that solution now for some 21 months - there are plenty who still suspect that the wait will go on.
"The British Government signed up to that text in December and have now belated accepted its meaning. I am glad that the British Prime Minister has sensibly rowed back from the language that no Prime Minister could sign up to this proposal."
Despite the disagreements, laws were agreed in principle surrounding state aid and the wholesale electricity markets; Northern Ireland is part of an island-wide energy market.
The Common Travel Area allowing free movement of UK and Irish nationals between Ireland and the UK was agreed.
The EU and UK agreed to maintain the necessary conditions for continued North-South cooperation, including in the areas of environment, health, agriculture, transport, education and tourism, as well as energy, telecommunications, broadcasting, inland fisheries, justice and security, higher education and sport.