The deputy UUP leader, Mr John Taylor, expressed caution in the Commons about the proposals.
The government was asking unionists to show courage and take a jump in faith but he added: "There are still many unionists who feel they are being asked to take a jump into the dark."
Mr Taylor criticised the fact that there was no timescale to decide when the IRA had defaulted on decommissioning.
"We could be asked to jump into the dark and proceed until June 2000," he said. "It is quite wrong to say that we are not planning for failure that we are only planning for success, there could be failure."
The unionist community needed to know what the position would be if there was failure. "When they have reassurances on that they might go with this, but until then it is in real trouble."
Mr Mandelson welcomed the fact that Mr Taylor's problems lay not with the proposals but with the necessity for further reassurances. "I hope that I have contributed this afternoon to providing those reassurances," he said.
He said he would be willing to meet Mr Taylor to answer any further questions he might have about the future. "I think we are justified to be planning for success but that does not mean that we are not providing for failure as well.
Labour's David Winnick said there would be the "utmost pressure" on the IRA to decommission on time once the executive was set up.
Mr Mandelson said there was good reason to expect the IRA to comply with the requirement to decommission.
"As for those who keep telling us that we are not going to get decommissioning, I would simply like to say to those people what have they offered that is new or that has the remotest possibility of delivering either devolution or decommissioning. The answer is absolutely nothing."
The former Tory Prime Minister, Mr John Major, who began the peace process, said Mr Mandelson's statement represented a gamble. But he said it was a "justified gamble" for which he offered his full support.
Mr Major said that after last week's statements from the parties involved it was possible that a settlement was within reach.
But he warned: "Difficulties may lie ahead with violence from fringe groups and we need to prepare ourselves for that possibility."
Mr Major added that one way to secure peace would be to end the economic deprivation which he said the men of violence had fed on for so long. He suggested investment conferences should be organised to bring money into the North "in order that the everyday citizens of Northern Ireland at a time of hope can see the practical and tangible advantages of co-operation in government and a better life for them and their children in the future".
Mr Mandelson said Mr Major's comments were particularly telling, given his contribution in bringing the process this far. He insisted the government would not drop its security guard throughout the next few vital months.
Mr Mandelson said investment was vital in the province but the best people to attract money into Northern Ireland were its own politicians.
Mr Mandelson stressed that Dublin was "at one with us" in the approach to the process. He confirmed the government would have to bring in legislation if the executive and related institutions were suspended.
"That, I can confirm, will relate to the winding up of the administrative arrangements of the cross-border institutions that you have referred to."
Mr Trimble asked for confirmation that the de Chastelain Commission's first discussions with paramilitary go-betweens would focus on "modalities" - the how, when and where of a weapons hand-over and the numbers involved.
He also asked for confirmation that the Government expected the commission to report on progress "within days".
Mr Trimble asked: "Do you share our expectation that report will then indicate how the next phase of the process will be handled, that next phase of course relating particularly to the timing?"
He also demanded assurances that the Irish government had agreed to suspend all the institutions, including cross-border bodies, in the light of a default by Sinn Fein.
Mr Mandelson replied: "I am very happy indeed to offer you all the assurances that you want."
But he stressed it was not for anyone else to try to set a timetable for the de Chastelain Commission.
"They are independent, truly independent, and that means that the rest of us have to observe a certain self-denying ordinance in expressing what will no doubt be our impatience to see progress made."
But as the go-betweens had to be appointed on the same day as the executive was established, the "process of decommissioning will start, effectively, at the same time as devolution starts - which I think is the outcome that you were seeking", he added.
The Shadow Northern Ireland secretary, Mr Andrew Mackay, said Conservatives now believed "real progress" had been made in the review of the agreement. It "could well lead to the twin goals of decommissioning and devolution", he said.
He told MPs statements by Sinn Fein and the IRA expressing support for peaceful means of ending the conflict were "quite encouraging . . . as far as they went".
Tories would support establishment of the executive "so long as it is accompanied by the beginning of a credible and verifiable process of decommissioning".
But he asked: "Will you accept that devolution and decommissioning must take place virtually simultaneously?" That meant the IRA must appoint its go-between to the de Chastelain Commission "as soon as the executive is set up".
The UK Unionist leader, Mr Robert McCartney, told Mr Mandelson he was going to "introduce a note of discord into your orchestrated harmony".
Mr McCartney demanded publication of a "fail-safe treaty" between Britain and the Republic ensuring that "in the event of Sinn Fein/IRA defaulting on their bargain" the cross-Border institutions would be set aside.
Mr Mandelson, who said there were "understandings" with the Irish Government on the issue, told Mr McCartney: "You have contributed, I regret to say, not a jot to the negotiations, to the progress of this entire review, and I note that you attempt to take absolutely no share of the credit or the responsibility for what has been achieved."
The former Tory Cabinet minister and ex-Northern Ireland Minister of State, Sir Brian Mawhinney, declared: "The bedrock on which this progress has been founded has been the fortitude and courage and common sense of the vast majority of the people of Northern Ireland over 30 bloody years.
"It was that fortitude and courage that ultimately resisted the men of violence and slowly and inexorably strengthened the hands of the democrats so that they could take the risks that they are now justifiably taking."
Sir Brian, who is Northern Ireland-born, added that, whatever their religious background or political persuasion, it was the people of Northern Ireland who had "made today possible and, hopefully, tomorrow possible as well".
Mr Mandelson said: "We would not have achieved what we have achieved, I would not be standing here, announcing what I am, without the majority of the people of Northern Ireland asserting their values, their goodwill, their principles, what they believe in, what they have struggled for so much."
He added: "It is their mandate that has enabled the parties to negotiate successfully. It's their rejection of violence which has caused the paramilitaries to fall away and to resort to politics from which they should never have deviated in the first place."
After the statement, Mr Taylor said he still had doubts about the Mitchell proposals and asked for clarification of what would happen if the deal fell through.
Mr Mandelson offered to meet unionist doubters for private discussions.