Irish Prime Minister Leo Varadkar said there was a “real possibility” Northern Ireland's power-sharing institutions would return before Christmas or the New Year.
Mr Varadkar said if he does return, it will be important to ensure there is a program for the government and a financial package to make his return sustainable.
However, he said he was not “complacent” about any difficulties that might arise.
“For now, it's still plan A,” Mr Varadkar told reporters at a Fine Gael conference in Co Kildare.
“We still believe it is possible to have the executive and the Assembly, all the institutions of the Good Friday Agreement, up and running, maybe (within) the next few weeks, maybe in the new year.
“And there are contacts, there are discussions behind the scenes right now and they are making some progress.”
Devolved government in Northern Ireland has been on hold for more than a year and a half amid a DUP standoff over new rules on the movement of goods to and from Great Britain.
The Government agreed the Windsor Framework with the EU earlier this year in an attempt to address the concerns raised.
However, the DUP has been in talks with the UK government since then and is refusing to return to the Stormont Assembly and executive until the remaining vacancies are filled.
Earlier this week, Foreign Secretary Chris Heaton-Harris said he believed talks were in the “final phase”, while DUP leader Sir Jeffrey Donaldson said they were “in the process of improving the legislation” that protects Northern Ireland's ability to trade with the United Kingdom.
Speaking on Saturday, Mr Varadkar said: “I'm probably a little bit more encouraged now than maybe a couple of weeks ago, but I'm by no means complacent about the difficulties that are going to arise.
“And I think the British-Irish Council next week in Dublin and the (British-Irish Intergovernmental Conference) is an opportunity to develop that further.”
Mr Varadkar will attend the British-Irish Council while Ireland's Deputy Prime Minister Micheal Martin will attend the British-Irish Intergovernmental Conference.
“I think there's a real chance we'll put the Assembly and the executive back together, either before Christmas or in the new year,” Mr Varadkar added.
“And what's also very important, in my view, is that it's sustainable.
“It's not going to be good for anybody if (it) then collapses six months later, so (it's) important that there's a program for the government, important that there's a good financial package because the new Northern Ireland executive will have some very difficult decisions to make, but we should try to make them easier in my view, and that will be an important part I think in any package.”