SENIOR loyalists said last night they were "cautiously optimistic" their ceasefire would hold, adding that President Clinton's appeal for restraint "certainly would carry weight".
The main loyalist paramilitary organisations, the UDA and UVF are expected to hold separate meetings today to discuss their reaction to the killing of Lance Bombardier Stephen Restorick at a checkpoint in Bessbrook, Co Armagh.
Observers said the latest escalation in republican violence had pushed loyalists "closer and closer to the brink". But it is not now expected there will be any retaliation in the name of either wing of the loyalist paramilitaries.
It is understood there were meetings between the political and paramilitary elements of loyalism yesterday but today's meetings will be confined to the paramilitary side.
President Clinton made a strong appeal to the loyalists not to be drawn into the "spiral of violence". He strongly condemned the killing of Lance Bombardier Restorick as "a cowardly crime" and urged the parties involved in the Stormont multi-party talks to move on to "substantive negotiations".
The STOP peace organisation has called on the Irish Rugby Football Union to arrange a minute's silence before the Ireland-England game at Lansdowne Road tomorrow as a gesture of solidarity with the family of the British soldier.
Mr David Ervine of the Progressive Unionist Party (PUP), which has links with the UVF, said that "the elastic has not broken".
"The Combined Loyalist Military Command (CLMC) will deliberate long and hard before they decide what to do and I would hope that they hold on. But if they don't I would hope they would be honourable and say what their intention is," Mr Ervine said.
About 15 members of the US House of Representatives are due to visit Belfast today where they will meet leaders of different political parties.
The group is led by the chairman of the International Relations Committee of Congress, Mr Ben Gilman. Despite reported opposition by US ambassador to Britain, Admiral William Crowe, the group is due to meet the Sinn Fein president, Mr Gerry Adams.
British army technical staff yesterday defused an anti-personnel mine in the Kilwilkie housing estate in Lurgan.
In Lurgan RUC station, Assistant Chief Constable Mr Freddy Hall said that since the beginning of this year terrorists have carried out a total of 38 attacks in the North.
Mr Hall disclosed that the shot which killed the soldier in Bessbrook was fired from long range, striking the victim in the back below his flak jacket.