The flying or not flying of flags has been at the heart of much tension, particularly since the decision late last year to limit the presence of the Union flag on Belfast City Hall to designated days.
Further controversy has been caused by the announcement earlier this week that £10,000 of public money is to be spent on flag poles to display more Union flags on Department of Finance buildings.
Speaking on Wednesday, DUP leader and First Minister Peter Robinson admitted flags were a "sensitive issue" for both sides of the community.
"We have proposals in terms of how we should proceed with this issue, which we will announce in due course - hopefully within the next few weeks," he said.
Sinn Féin deputy First Minister Martin McGuinness added: "We appear to be very close to agreeing a way forward of how we should put in place a mechanism to deal with that issue.
"And I think it is best left at that."
Neither minister would be drawn on exactly what the proposals might entail.
The initial decision to restrict the flying of the Union flag at Belfast City Hall sparked outrage among unionists and resulted in months of protests - many of which descended into street riots.
However, the decision by the Department of Finance to erect more flagpoles has prompted Sinn Féin to seek legal advice and brand the move "deliberately provocative".