  Recent three dimensional, high-resolution simulations of neutron star
coalescences are analysed to assess whether short gamma-ray bursts (GRBs) could
originate from such encounters. The two most popular modes of energy extraction
-- namely the annihilation of $\nu\bar{\nu}$ and magnetohydrodynamic processes-
are explored in order to investigate their viability in launching GRBs. We find
that $\nu\bar{\nu}$ annihilation can provide the necessary stresses to drive a
highly relativistic expansion. But unless the outflow is beamed into less than
one percent of the solid angle this mechanism may fail to explain the apparent
isotropized energies implied for short GRBs at cosmological distances. We argue
that the energetic, neutrino-driven wind that accompanies the merger event will
have enough pressure to provide adequate collimation to the
$\nu\bar{\nu}$-annihilation-driven jet, thereby comfortably satisfying
constraints on event rate and apparent luminosity. We also assess magnetic
mechanisms to transform the available energy into a GRB. If the central object
does not collapse immediately into a black hole it will be convective and it is
expected to act as an effective large scale dynamo amplifying the seed magnetic
fields to a few times $10^{17}$ G within a small fraction of a second. The
associated spindown time scale is 0.2 s, coinciding with the typical duration
of a short GRB. The efficiencies of the various assessed magnetic processes are
high enough to produce isotropized luminosities in excess of $10^{52}$ ergs/s
even without beaming.
