IT IS a time of great danger and great opportunity in Northern Ireland. First the good news: the momentum created by the new Labour administration has given many people fresh heart for the struggle to create a lasting peace.

The new Secretary of State travels the region with an energy that never seems to flag. Her Prime Minister clearly regards the North as a priority issue and President Clinton is there to jog his elbow if he happens to forget.

The care and attention that Tony Blair put into the message on the Famine which he sent to the Millstreet gathering last weekend showed an encouraging sensitivity to nationalist feelings and an anxiety to remove unnecessary irritants from the relationship between the two peoples.

One year on, the Stormont talks had begun to resemble a show that had bombed on Broadway but which the producers refused to take off. Buoyed by the energy and parliamentary freedom of the new British government, Dublin has taken the opportunity to co-operate in the production of a joint paper on decommissioning which may be ready as early as next Tuesday's plenary session.

In the other talks process, what Mo Mowlam insists on calling a "clarificatory procedure" the news is less encouraging. The first meeting between Sinn Fein and British civil servants seemed to go well. Republicans were encouraged by the new atmosphere which the election of the Labour government had apparently generated.

DIFFICULTIES were not melting away but they seemed to be reducing to a more manageable size. Sources close to republican thinking said the main problem was that the British side would not give "credit" for the undeclared IRA ceasefire which began on April 10th.

The second meeting was, if not a disaster, certainly a serious setback. Normally talkative Sinn Fein spokesmen were tight-lipped. The IRA was quick to draw its own conclusions. Leaving a 1,000 lb van bomb in the Poleglass estate in Belfast was an obvious signal that "We haven't gone away, you know".

A third meeting has been agreed in principle. British sources say it could take place next week provided there is no IRA violence in the interim. Sinn Fe' in sources don't expect the meeting until the following week.

Meanwhile, the unionists are growing restless. David Trimble complained publicly this week that the clarification of British policy to Sinn Fein could have been completed in "an hour at the most". Senior UUP sources said yesterday there would be "hell to pay" if the next meeting wasn't the last.

Sinn Fein sources said the British side seemed to be marking time at the second meeting and speculated that London might be waiting until after today's general election in the Republic.

Sinn Fein denies claims that it went into the second meeting with a fresh shopping list and a new and more demanding attitude inspired by the party's success in the North's local elections.

Party sources said the real problem was that the British side refused to "put meat on the bones" and would not give specific responses to Sinn Fein demands for immediate entry to talks, a time-frame for those talks, the removal of decommissioning as an obstacle to talks and a series of confidence-building measures.

Sinn Fein has been putting a huge effort into the election south of the Border and most, if not all, senior party figures have put their shoulder to the wheel, especially in Cavan-Monaghan. Party sources are confident their vote will increase significantly ("The peace process is' very popular in the South") but less sure about winning a seat in Leinster House.

There was a certain irony about the scene at the gates of Stormont's Castle Buildings when the talks resumed this week. The gates were closed against Gerry Adams and his associates because of the ruling that Sinn Fein cannot be admitted without an IRA ceasefire.

Members of the Ulster Democratic Party, the political wing of the Ulster Defence Association, could not gain admission until the Sinn Fe' in delegation had left. Yet everyone in Northern Ireland knows that the loyalist ceasefire is as much fiction as fact.

There has been more loyalist than IRA paramilitary activity in recent months. Sinn Fe' in sources said this was an example of double standards, although they stressed they did not want the loyalist parties expelled from the talks.

There always seems to be one more piece of the jigsaw to put in place before real movement can take place. The latest in the series is today's election in the Republic. No fundamental changes are expected in Dublin's policy but many people will be watching to see if the new or re-elected government can match Tony Blair and Mo Mowlam in terms of energy.

WHETHER Mr Bruton or Mr Ahern holds the office of Taoiseach they will, like everyone else, have to contend with the parades dilemma and the possibility of another standoff at Drumcree a month from today, not to mention confrontations in other parts of the North.

The talks will almost certainly adjourn before Drumcree, and a September date is being mooted for re-assembly. This would allow some elbow room where a possible IRA ceasefire could be assessed without the necessity for anyone to state formally that this was taking place.

Sources close to republican thinking say the IRA will not accept a so-called decontamination period before Sinn Fein's entry to talks. This suggests that September could see the Great Day where, after a declaration of an IRA ceasefire followed by a proving period, which just happened to coincide with the summer holidays, Gerry Adams and his friends would be admitted, at long last, to the Stormont sanctum.

In the meantime the two governments must (a) avert a civil war over Drumcree and other Orange parades (b) reassure the unionists so that when Adams comes in, Trimble doesn't walk out (c) persuade the IRA to put aside their arms for ever (d) ditto the loyalists (e) ensure no splinter groups on the loyalist or republican side perpetrate an atrocity which brings the North back to the Stone Age.

These are tall orders, huge challenges, frighteningly difficult requirements. Tony Blair spoke of the settlement train being at the station. The steam is rising and one hears the clatter of the engine. But it is hard to make out who is boarding and if anyone is getting off.