Dr Richard Haass will today present an updated draft of his paper on how to deal with flags, parades and the past as he and the North's five main political parties strive to reach agreement on the three issues by tomorrow or Friday.

As the talks continue at the Stormont Hotel in east Belfast, the US diplomat said he was still hopeful a deal could be achieved by this week, notwithstanding the mixed reaction to his first proposals paper presented on Monday.

There is potential for movement on the past and parades but the flags issue is proving difficult. In particular the possibility of the Irish Tricolour flying over buildings such as Stormont during official visits by the Irish President or Taoiseach has aroused unionist ire.

Dr Haass, who yesterday held bilateral meetings with the five parties – the DUP, Sinn Féin, the SDLP, the Ulster Unionist Party and Alliance – has decided to amend his original paper which he is showing to the parties today.

Proposals
Monday's document offered three main proposals: the creation of an all-embracing investigative body to inquire into Troubles-related killings, replacing the Historical Enquiries Team and freeing up the PSNI and the Police Ombudsman; the scrapping of the Parades Commission to be replaced by another parades body; and the suggested creation of an agreed Northern Ireland flag together with the British union flag generally flying over official buildings on some 18 designated days each year.

There is also a proposal that there could be limited immunity for perpetrators in return for truth-telling about Troubles killings.

Unionists are especially upset by the suggestion of the Tricolour flying alongside the British union flag on some official buildings during visits by the President and Taoiseach, and will be seeking the removal of this idea from the updated draft document. They are also annoyed with the suggestion that the British union flag mainly should fly only on designated days.