The deal has been overseen by gardai in Finglas who have been on major alert after a recent video death threat was issued to the Collins family in Avila Park, Finglas by a rival faction.
A senior source said: "Senior gardai decided enough was enough.
"Representatives from both sides sat together under garda supervision and there are hopes now that the violence will end.
"Last week, garda management took the issue so seriously that the Emergency Response Unit was called in to patrol the streets of Finglas, so that shows you how out of control things were. But everything is much calmer now and the gardai have done a very good job."
In the video that sparked last week's tensions, a gang of hooded men waved guns and threatened to pipe-bomb the Collins family in their beds and shoot them.
While gardai and the Traveller families are understood to be working hard at maintaining the peace agreement, the Herald has been told that there are four individuals from one side who have not signed up.
"A man from the Travellers who have been threatening us made an approach to us on Monday, and there was meeting between the two families in Finglas garda station yesterday," a member of the Collins family said.
"I have been involved with five different mediations in this dispute since 2011, and while none of them has come to anything I feel this one will pay off," he added.
The peace pact comes after a recent escalation in tensions centred around the disturbing video.
An assault on innocent woman Bridget Collins in a car park is believed to have started the current escalation in the row.
Last week, Bridget told how she was branded a 'rat' and burnt out of her home after she co-operated with gardai after the incident.
The Avila Close home occupied by Bridget, her husband Paddy, and their four children was burnt out afterwards.
Just before the peace pact, her husband claimed that in recent days a €20,000 price had been put on his head by thugs.
"The gardai are still going ahead with their investigations into the video threat, and there are still prosecutions in relation to the attack on Bridget in the car park.
"That won't change because of the new peace agreement. The other side understand that," said the Collins spokesman.
"As it is, the threat from the group in the video could still be there, because there are still some people who don't want peace, but we welcome any move to come to an agreement."