Hopes of an accommodation being reached before next week's Apprentice Boys of Derry parade on the city's walls received a setback yesterday.
Representatives of the Loyal Order ruled out face-to-face talks with the Bogside Residents Group.
The two opposing organisations have agreed to attend a meeting chaired by the Town Centre Management Committee, which represents city-centre traders, in Derry tonight.
A Bogside representative said an accommodation was conditional on face-to-face talks with the Apprentice Boys at tonight's meeting, but the Loyal Order ruled out direct dialogue.
"Let me make this absolutely clear. There will be no direct dialogue nor face-to-face talks between the Bogside residents and the Apprentice Boys," said Alderman William Hay, spokesman for the Apprentice Boys.
Mr Hay went on: "It is wrong for any organisation to lay down as a precondition for talks that there has to be a face-to-face meeting.
"We will go to the meeting and lay out our stall as we have done in the past. We are always willing to talk to people who are prepared to listen to us without preconditions.
"We will not talk to people who are threatening our culture by saying if there is no face-to-face dialogue there will be no accommodation. That is something we cannot accept in talks about our August 14th parade in the city centre," Mr Hay said. "We will explain our position to the organisers of the meeting. We don't care who else is at the meeting." However, Mr Donnacha Mac Niallais, the Bogside spokesman, said direct dialogue was essential for any agreement to be reached.
"Unless there is direct dialogue accommodation will be very difficult. We need to put our points to them directly and we want to hear what they have to say.
"We want a situation whereby it is quite clear what the accommodation is and that can only be achieved by face-to-face talks," he said.
The British Prime Minister's political adviser, Mr Jonathan Powell, is to have talks today with Orange Order leaders in a new attempt to end the stand-off at Drumcree in Portadown.
A separate meeting with the Garvaghy Road Residents Coalition has been called off, according to a spokesman for the Northern Ireland Office last night.
The spokesman said it was hoped discussions could take place later.
Mr Powell has had a number of meetings with the leadership of the Orange Order in Co Armagh in an effort to resolve the standoff, which has continued since a parade was banned from going down the nationalist Garvaghy Road just over a year ago.