Prime Minister David Cameron has urged Northern Ireland's politicians to "keep going" after months of peace talks chaired by former US diplomat Richard Haass failed to result in a deal.
Despite a marathon last might of negotiations continuing until 5am on Tuesday morning - and seventh draft documents being put forward - the peace talks broke up without agreement.
Cameron said: "Although it is disappointing the parties have not been able to reach full agreement at this stage, these talks have achieved much common ground, providing a basis for continuing discussions.
"There is a shared commitment to making progress on these very difficult issues that continue to be a focus for tension and division across the community.
"I urge the parties to keep going. I also want to thank Dr Richard Haass and his team for their dedicated work.
"The Government and the Northern Ireland parties will continue to work together to strengthen further the foundations for peace, stability and prosperity in Northern Ireland."
The talks were aimed at securing long-sought resolution to outstanding peace process issues in Northern Ireland.
Dr Haass was given until the end of the year to strike a deal on flags, disputed parades and the legacy of the Troubles, but was unable to attain consensus among Stormont's five main parties.
Sinn Fein and the SDLP - have signalled a willingness to back Dr Haass's proposals.
But while the Democratic Unionists and Ulster Unionists pledged to take the document back for consultation with their respective party executives, both expressed major concerns about elements of the proposed framework as it stands.
Alliance said it would endorse the proposals on the past, but rejected the suggested resolutions on flags and parades in their current form.
Northern Ireland Secretary Theresa Villiers said it was not surprising that issues of identity in Northern Ireland could not be resolved.
She told BBC Radio 4's Today programme: "If you look at issues of identity, some people would argue that it's been a problem for the last 800 years.
"In many ways, it's not surprising that it hasn't been fixed in three months. If there are easy solutions, then it would have been part of the Belfast Agreement agreed in 1998."
But Ms Villiers said the failure to reach a comprehensive agreement should not be seen as the end of the road.
"It's obviously disappointing that these talks haven't, so far, led to an agreement but these are immensely difficult issues," she said.
"And I think all the parties that have commented so far have said that there is much in the Haass proposals on the table that they can support.
"I don't think this is the end of the road - it's important that it's not. It's important that we build on the progress that's been made, which actually resulted in a great deal of common ground between five political parties which have fundamentally different views on some of these issues."
She added that it was "positive" that the talks were being very much driven "by the Northern Ireland political leadership, that they were taking it forward for the very first time".
Dr Haass said a working group of representatives of the five parties, which all make up the mandatory power-sharing executive, would now be set up to try to find another way to build on "significant progress" that had been achieved.
The former White House special envoy to the region said: "Yes, it would have been nice to come out here tonight and say we have got all five parties completely signed on to the text. We are not there."
Dr Haass, who was commissioned by DUP First Minister Peter Robinson and Sinn Fein Deputy First Minister Martin McGuinness to chair the six-month process, said he believed there was a prospect that all the parties would either endorse all, or significant parts, of his document in the future.
"All the parties support significant parts of the agreement. At the same time, all have some concerns," he said.
"We very much hope that the parties reflect on this, discuss it with their leadership and then come back with a strong endorsement. Over the next week we will know a lot more."
Ahead of flying back to the US, Dr Haass urged Mr Robinson and Mr McGuinness to make the details of his final proposals public so people could make up their own minds.
He denied the process had been a failure.
"Success should not be measured by what we report to you tonight or what the party leaders report tonight. I would ask you to judge the success in six months, in a year, 18 months, in two years, that would give a much more realistic definition or yardstick of what constitutes success," he said.
"What I believe we have done is laid down solid enough foundation stones."
Dr Haass and talks vice-chairman Meghan O'Sullivan, a US foreign affairs expert, said their role in any future political process would be limited, but both insisted they were not washing their hands of the process.
Sinn Fein president Gerry Adams signalled his party's willingness to strike a full deal and said he would be urging the party's executive to endorse it.
He said the proposals presented by Dr Haass represented a "compromise position" and provided the basis for agreement.
"They aren't perfect, we have had to stretch ourselves to embrace them," he said.
Mr Adams insisted talks could not continue forever and at some point parties had to "call it".
He said if there was no progress from this point he would be seeking an urgent meeting with the British and Irish governments to call for the production of a road map towards resolution.
DUP negotiator Jeffrey Donaldson said progress had been made but a number of difficulties remained.
"We do not have an agreement this evening but we are committed to continuing this work beyond now in dialogue with others to try and resolve the outstanding issues that need to be addressed," he said.
"We owe that to the people of Northern Ireland, especially to the innocent victims of terrorism who have suffered so much over the decades."
Alliance Party deputy leader Naomi Long criticised proposals on parades and flags, but she also said great work had been done on the issue of the past.
"We have seen a huge sea change in the level of political agreement which has exceeded public expectation, particularly in delivering for the victims and the reconciliation process," said the East Belfast MP.
The Haass process was set up in July to deal with what have become three of the primary obstacles to meaningful reconciliation in Northern Ireland.
Tensions over contentious parades regularly erupt into street violence while disputes over the flying of flags - both on public buildings and in loyalist and republican neighbourhoods - continue to be a source of community conflict.
But arguably the most complex issue has been how Northern Ireland deals with the legacy of a 30-year-conflict where opposing sides retain competing narratives of what happened and victims still demand both truth and justice regarding thousands of unsolved murders.
Dr Haass had initially hoped to strike a comprehensive settlement dealing with all three elements in full, but it became clear from the outset of the intensive negotiation phase earlier this month that was going to be highly unlikely.
There was little or no progress made on flags, with instead a proposal to set up a commission to examine the issues over a longer term.
It is understood the final document also proposes the replacement of the Government-appointed Parades Commission with another set of structures to adjudicate on contentious marches.
The text also envisaged a new mechanism to oversee dealing with the legacy of the past - with a truth recovery body that would potentially offer limited immunity from prosecution to those who co-operate.
Unionists have indicated concerns with some of the language used and claim too much focus has been placed on killings perpetrated by state forces.
UUP leader Mike Nesbitt said he had an opinion on the document but would not make it public until his party had the chance to examine the proposals.
"We will have an honest debate and hopefully form a final opinion at the end of that debate," he said.
SDLP leader Alasdair McDonnell said "bigger and better solutions" were needed on some aspects, but said he would be recommending that his party give a general endorsement to what had been proposed.
"I am recommending general endorsement because of the strengths in the Haass/O'Sullivan proposals, most in evidence on how to deal with the past," he said.
"I have always said that the first test of progress must be comprehensive proposals to address the past. That is the biggest strength of Haass/O'Sullivan."
Having been given an end-of-year deadline to report, Dr Haass aimed to strike a deal before Christmas but had to return to the US on Christmas Eve empty-handed after a marathon session of all-night negotiations last week.
Cutting short his seasonal break, he returned to the region on Saturday in a last-ditch attempt to secure agreement.
Dr Haass is the president of US think tank the Council on Foreign Relations, based in New York, and was US president George Bush's special envoy to Northern Ireland from 2001 to 2003.