The dead were civilians abducted and killed between 1972 and 1980 and have been the subject of a campaign by Families of the Disappeared, a pressure group for bereaved relatives. This has pressed both Sinn Fein and the IRA to return the bodies or reveal their burial places.
Mr Reynolds told The Independent his contacts indicated to him that an announcement would come before the autumn. He said: "I would be hopeful that in the very near future there will be a move towards identification of where bodies have been buried.
"I think it is part of a healing process that is absolutely necessary to close a dark chapter that has been there for far too long," he said.
"This should be part of the confidence-building measures that are necessary to make the (Northern Ireland) Assembly work, and to make the partnership with Unionism and nationalism and republicans easier to put together in the Assembly."
The former Taioseach, who played a key role in drawing the Provisional IRA into the peace process between 1992 and 1994, said a move on the graves issue would be "a clear recognition of the necessity for reconciliation, and that the republican movement will play their part". He believes an IRA gesture towards the relatives would reaffirm republicans' acceptance of purely democratic methods and reaffirm finally that the conflict is over.
Irish Government sources said it was an issue Dublin had taken up repeatedly, but were not yet aware of any specific agreement. The expected formula would entail Garda authorities in the Irish Republic being informed of the graves' locations, and Dublin's State Pathologist's Office assisting in identifying bodies.
A Dublin Government spokesman said: "We would hope there is a move of this kind afoot to locate missing persons. It is something that would be very welcome and would be fully encouraged."
Publicly, Sinn Fein sources were cautious, stressing many IRA members with information had themselves died in the conflict and hoped relatives' expectations would not be raised without good reason. But a senior source said they "would very much hope that it is possible, and we hope it will happen".
Families of the Disappeared spokesman Seamus McKendry, son-in-law of Jean McConville, a mother of 10 abducted from her home in Belfast's Divis Flats in 1972, said: "I take it all with a pinch of salt. Our hopes have been raised so many times only to be dashed.
"Very senior members of Sinn Fein last year wouldn't identify which of the disappeared they were involved in. So I find it incredible that they have located the burial ground of 12 of them," he said.
Mr McKendry said if Sinn Fein wanted to enter a democratic process, the issue of missing bodies would need to be resolved.
"We know for a fact some of the disappeared bodies are buried under housing estates in west Belfast. So how come all of a sudden they have turned up in Donegal or Louth or wherever," he said.
In February, the Irish Prime Minister, Bertie Ahern, told the Dail he had again requested republicans to renew their contacts in an effort to end the families' ordeal. He told Sinn Fein leaders it would be a helpful confidence-building measure, and reminded them that in other international conflicts, information on disappeared people had been part of a settlement.
As votes were counted in the Northern Ireland Assembly elections, Families for the Disappeared yesterday sought signatures outside Belfast City Hall for a petition seeking information on the missing, to be handed in to Sinn Fein.Reuse content