The Government recognises Sinn Féin's democratic mandate and that the party is an "indispensable partner in inclusive institutions", but it is also in a "crisis of its own making", the Minister for Foreign Affairs has said.
However, he said the vision of the Belfast Agreement will not be fully achieved until all sides "fully live up to their commitments".
"A sustainable settlement which does not have the support and the engagement of parties representing majorities in both communities is not possible. So we do not want to exclude Sinn Féin. Far from it," he said.
In an address entitled Ireland: Adapting for Success in a Changing Worldat Harvard University in the US today, Mr Ahern said a conflict that was previously regarded as "zero-sum" for either side could now be seen as "win-win" for both.
"However, we must not rest content until the vision of the Good Friday Agreement is fully achieved. That will not happen until all sides fully live up to their commitments.
"Ten years after the ceasefires of 1994 and nearly seven years after the conclusion of the agreement itself, the political process can no longer tolerate a dual-track strategy of political engagement linked to paramilitary muscle. This destabilising ambivalence is not what the people of Ireland voted for in 1998," Mr Ahern said.
However, he also acknowledged that "though there are still major problems to be resolved, the paramilitary violence which scarred the northern part of our island for 25 years has largely ended".
"And our relations with Britain have never been warmer or more balanced."
Mr Ahern noted the comments of Senator George Mitchell on the day the Good Friday negotiations ended in 1998 that it would be a greater challenge to implement the agreement than it was to negotiate it.
"He was certainly right. Considerable challenges still remain - the most pressing of which is the need to bring all forms of paramilitary and criminal activity to a definitive end," the minister said.
Mr Ahern said paramilitarism and criminality "corrode the trust and confidence necessary to sustain partnership".
He said Sinn Féin itself had to "face facts".
"And the reality is that it is in a crisis of its own making. To try to blame others - to claim that this comes out of partisan political rivalry - is simply nonsense. The main onus at the moment is on the provisional movement. If it wants to start to rebuild trust it must take the first bold steps. We will, of course, do what we can to help. But it has to take a hard look at itself, and ask itself where it is going and how it has to change.
"Those in the provisional movement who wish to be part of the inclusive institutions must make the difficult decisions necessary to bring all forms of paramilitary and criminal activity to a definitive end. There is a recognition in Sinn Féin that the IRA must sooner or later wither away. I say that it has to happen sooner, in the interests not just of political progress but of the communities it purports to serve and which have been given a new voice by the heroic McCartney sisters. The Irish Government, as always, will not be found wanting as we try to take the process forward. But it is now time to decide, and it is now, emphatically, time to move on."
Mr Ahern also spoke about the importance of the US/EU relationship and welcomed President George W Bush's support for the project of European integration.
The minister said the single greatest challenge in a rapidly changing world was to remove the causes of terror.
"We in Ireland well understand the futility of seeking to defeat terrorism without also addressing its underlying causes, whether they are political grievances, poverty or failing states. And we assert the vital importance of upholding, at all times in the fight against terror, the human rights values which are at the core of our shared transatlantic civilisation."
The minister also said he was pleased that former taoiseach John Bruton is now working hard at improving mutual understanding across the Atlantic as the EU Commission Representative in Washington.
He looked forward to his own meetings there later in the week with the Administration and members of both Houses of Congress.
"Developing our dialogue with all levels of the American political system should be a priority for all European governments."