Last Christmas, protests over the removal of the Union flag from Belfast City Hall almost brought the city to a standstill. Hoping to reach a "meaningful agreement" before Christmas, senior United States diplomat Richard Haass is leading discussions with the five parties in the Northern Ireland Executive, in Belfast.

The talks are taking place against an increasingly restive backdrop: On Monday (16.12.2013), a firebomb ignited inside a Belfast city store.

Republican dissident group Óglaigh na hÉireann earlier claimed responsibility for a bomb that partially exploded in the city on Friday night. The blast followed a bomb scare in Belfast last week, and two separate attacks on Northern Ireland police officers in the city earlier this month.

Calm Christmas sought

Haass, a former US special envoy for Northern Ireland, is expected to produce a series of recommendations for the Northern Ireland parliament to consider. These could include a framework for helping victims of the 30-year-long conflict, which has cost more than 3,000 lives.

Differences between Irish Catholics and Protestants with roots in Britain living inn Northern Ireland continue to simmer after decades of outright violence starting in the late 1960s, known as "The Troubles."

Last month, Northern Ireland's attorney general, John Larkin, suggested ending prosecutions over Troubles-related killings that took place before the signing of the Good Friday Agreement in 1998. The Historical Enquiries Team has until now dealt with such cases, delivering only a handful of successful convictions.

But the past is not the only issue on the table this week - parades remain an annual source of tension. A protest camp of loyalists, or those wanting to strengthen ties to Britain, has been in place at Twaddell Avenue in North Belfast since July, after a decision to restrict an Orange Order parade. It's estimated that policing the camp costs 50,000 British pounds (60,000 euros) a day.

Many in Northern Ireland are hopeful that an agreement can be reached on parading, with abolition of the current Parades Commission and creation of a new parades body being the most likely outcome. However, the issue of flags could prove far more difficult to solve.

Flag dispute reflects rift

Last December, Belfast City Council voted to change its policy on flying the union flag, which represents support for the bond with Britain. Since then the standard has been flown at City Hall on designated days, rather than year-round as was previously the case. The move brought Belfast in line with most councils in Northern Ireland, including a number of unionist-dominated administrations.

Loyalists responded to the flag's removal with a wave of protests. Although the demonstrations have abated - an anniversary protest last month attracted just 1,500 people - the flag remains a live issue. Recently, unionist councillors on Belfast City Council sent back official Christmas cards after they featured the image of a flagless City Hall.

So far, prospects for a deal appear shaky. Democratic Unionist Party leader and Northern Ireland first minister Peter Robinson said that there would be "steam coming out of my ears" in response to the idea that the draft document produced by Haass could represent the final agreement.

However, he added that he believed agreement was still possible. "Nobody is throwing the towel in at this stage," Robinson said.

Politicians in the UK parliament warned that issues in Northern Ireland's past would never be resolved if politicians fail to reach agreement.

"If we get it wrong we may never get another opportunity to address these issues," Naomi Long - a member of the UK parliament for the centrist Alliance Party - told BBC. Long is also participating in negotiations at the Haass talks.

Breaking down the divide

Northern Ireland remains a deeply divided society, despite the cessation of large-scale armed violence. In many working-class parts of Belfast, Catholic and Protestant communities remain separated by walls, fences and gates, known euphemistically as "peace walls."

At Cupar Way in West Belfast, a peace wall has separated Catholic and Protestant neighborhoods since 1969. Both areas have among the highest rates of unemployment in Northern Ireland. But there are attempts to create new opportunities across the peace wall.

In 2011, women from both sides of the sectarian divide at Cupar Way came together to form the Belfast Cleaning Company. The business already has six staff members and 10 cleaning contracts. The key to its success is respect, founding member Alice McLarnon told DW.

"We respect each other's culture," McLarnon said. While she sees herself as Irish, her co-worker would see herself as British, but this doesn't matter to either. "She sees me as a co-worker," McLarnon said.

The cleaning company is run as a cooperative: Every member has an equal say and an equal share. Although co-ops are not commonplace in Northern Ireland, their popularity is growing. Earlier this month, a cooperative taxi firm started in West Belfast with around 50 drivers.

For the Belfast Cleaning Company, the aim is simple - to grow the business, and build relationships across the peace wall.

"The goal is to create better employment along the interface, to have a better living way for the women," McLarnon said. "When you create employment across the divide, you actually break down the divide," says Alice McLarnon.