London  - Agreement on key issues in the fist phase of negotiations had looked in serious doubt at the start of this week. Following a flurry of negotiations, Prime Minister Theresa May managed to pull a rabbit out of her Brexit hat and celebrated a hard-won deal over an early breakfast with European Commission President Jean-Claude Juncker in Brussels on Friday. - The European Commission said it saw "SUFFICIENT PROGRESS" in talks on the three key issues - Britain's "divorce" bill, the rights of EU citizens and the management of the Irish border - to approve the start of a second phase of negotiations on future trade and other relations after Britain leaves the bloc in March 2019.

Progress in negotiations

- MAY and JUNCKER spoke early Friday following overnight talks between London, Belfast, Brussels and Dublin. "This is a difficult negotiation but we have now made a first breakthrough," Juncker said at a joint press conference, adding: "We still have a lot of work to do." "It hasn't been easy for either side," May said. "Getting to this point has required GIVE AND TAKE on both sides." - Three and a half days of intensive bargaining finally produced a breakthrough after a DRAFT AGREEMENT was scuppered at the last-minute by Northern Ireland's Democratic Unionist Party late Monday. - Irish Prime Minister Leo VARADKAR, whose ministers had announced that he was expecting to deliver positive news on Brexit, said he was left "surprised and disappointed" by the collapse of the deal.

The Irish border issue

- DUP leader Arlene FOSTER said her party would not accept "regulatory alignment" across the post-Brexit Irish border. "We have been very clear: NORTHERN IRELAND must leave the EU on the same terms as the rest of the United Kingdom," Foster said. "The economic and constitutional integrity of the United Kingdom will not be compromised in any way." - The DUP appeared to get its way, at least partly, with Friday's agreement, but Foster gave it only a cautious welcome, while rival Irish Republican party SINN FEIN was clearly not happy with the document. The deal fails to address key concerns for many people north and south of the border, while May's insistence on leaving the EU single market and customs union presents "a real and live DANGER," Sinn Fein president Gerry Adams said. "Brexit is the greatest threat to the economies of this island in generations," Adams said.

Difficulties of the next stage

- Other key players warned that the second phase is likely to prove tougher than the first. "The most difficult challenge is still ahead," said European Council President DONALD TUSK. "Breaking up is hard but breaking up and building a new relation is much harder," Tusk said. - EU chief negotiator Michel Barnier said a CANADA-STYLE free trade agreement with the bloc is the only realistic long-term option left for Britain. The EU and Canada signed a deal last year with the aim of cutting customs tariffs and other barriers to trade. "It's the British government itself that is setting these RED LINES, which is closing certain doors," Barnier said. "So this is the model we will be working on."