This study examines the origins, structures and outcomes of interim arrangements in Sri Lanka between 2002 and 2005. It examines through an empirical and theoretical approach, the successes and failures of the government of Sri Lanka and the Liberation of Tamil Eelam towards a final settlement in the peace process. It emphasizes on the need to look beyond the workings of the respective institutions and focus on the politics that support and infiltrate their implementation and functioning. By highlighting the successes and failures of such a method, this study hopes to provide both an analysis of what went wrong in the Sri Lankan case, and the benefits of employing the interim approach in the peace process.