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Sinn Féin leader Mary Lou McDonald has said Leo Varadkar has saved the party "a fortune in advertising" after he criticised the party's public rallies.

She was speaking at a meeting in Newry - the third in a series of rallies organised by the party since the Republic of Ireland's general election.

The crowd was updated on the latest talks aimed at forming a government.

Fine Gael leader Mr Varadkar described the rallies as a "campaign of intimidation and bullying".

Hundreds attended the meeting in Newry's Canal Court Hotel - the first of the rallies to be held north of the border.

"There will be further conversations with the Social Democrats and Independents this week," the Sinn Féin president said.

"But you will know that the numbers are tricky."

She said the "best possible outcome" would be to form a government without Fianna Fáil and Fine Gael.

"The worst possible outcome would be the return of the Fine Gael/Fianna Fáil government," she said.

"But that is an increasing possibility."

Donegal TD Pearse Doherty said the party was holding ongoing negotiations with the Green Party.

Other issues discussed at the meeting included housing, Brexit, Irish unity, national identity and what an all-Ireland health service would look like.

Stormont Finance Minister Conor Murphy said relationships between parties in the executive were "challenging" but that "unionists are reaching out to us and having conversations with us that they've never had before".

During the question and answer session, a member of the audience referenced the controversy over comments Mr Murphy had made about murdered south Armagh man Paul Quinn stating that he had, "nothing to apologise for".

This was met with some clapping. However, in answering the multiple questions posed, this comment was not addressed.

Mr Murphy criticised the UK government for what he said was the "reneging on financial commitments" made as part of the New Decade, New Approach agreement.

In February's general election, Sinn Féin won the most first preference votes but has 37 seats compared to the 38 held by Fianna Fáil.

No single party has enough seats to govern, with 80 seats required for a majority.