A Catholic town watches quietly as Protestant rancor grows

As the farmer starts to speak, the sudden roar of an aircraft engine cuts him off. A British Army helicopter bursts through the clouds and skims the rooftops of this Catholic town in County Armagh six miles from the border with Ireland.

"The army is still here but people have got jobs now; the peace process has given them a bit of hope," the man shouts over the fading roar of the engines, referring to the 1998 Good Friday peace accord. "Now we can just go about our lives just like anybody else in the country."

Across Northern Ireland, the balance of power is slowly shifting. While Protestant gangs clashed with security services for several days last week after a traditional Protestant march was rerouted from Catholic areas, among many Catholics there is a small but growing sense of victory.

"The perception among Unionists is that the peace process has worked against them; that they've been the losers," says Adrian Guelke, professor of comparative politics at Queen's University, Belfast. "The Catholics don't see themselves as the winners, but the way the Loyalists are reacting to the peace process is starting to make them believe that they may actually have won."

In few places is this slow shift in attitudes and in the traditional balance of power more visible than in Crossmaglen. For 30 years this farming town was the epicenter of armed Catholic resistance to British rule. Republican guerrillas here killed more than 100 soldiers and 60 policemen since 1969.

Today the Irish Republican Army's orange and green banners still flutter around the square. The British army airlifts supplies and men into its bases, but the guns are silent as Republicans seem to accept that violence will only jeopardize their political gains.

"There's a real air of optimism at the moment," says Gerry Murray, editor of The Cross Examiner, Crossmaglen's newspaper. "The observation towers are coming down and it'll be nice to feel that you're not being watched the whole time."

But even as Britain withdraws it troops and gradually demolishes its web of camouflaged watchtowers, armored police stations, and swarms of security cameras, many locals are coming to terms with the changes, and in particular, the televised scenes of a new multifaith police force battling Protestants rioters in Belfast.

"It's very strange. For a long, long time we saw the police as controlling and restraining the Catholic people," says Mr. Murray. "The police were always seen as a Protestant police so we see it as the Protestants attacking their own police force."

With an identity rooted in oppression and struggle, many Catholics are reluctant to recognize the success of Republicanism, still driven by bitter memories of the British "occupation."

"The soldiers never used to knock first," recalls one local woman as she drives through the area's green-flanked, winding roads, her car dashboard decorated with assorted Jesus and Mary figurines. "My father was always being lifted [arrested] by the British."

But the slow pace of the peace process, the uneven economic spoils of peace, and lingering questions over the IRA's secretive destruction of its formidable arsenal still make the return of widespread violence an ever-present possibility.

But while the Loyalist militancy is fueled by Protestant politicians who denounce the peace process as rewarding terrorism, Republican legislators can easily restrain their followers by remaining loyal to the IRA's goal of a united Ireland.

"The IRA have said they believe that the struggle should be continued but only though peaceful means," says Davy Hyland, Sinn Fein assembly member for Newry Armagh, which includes Crossmaglen. "We need to take their mantle up to move the process forward."

And while working-class Protestants still suffer from the collapse of Northern Ireland's manufacturing and ship-building industries, analysts say Republican politicians are keen for their voters to embrace new technologies and tourism and mimic Ireland's transformation into a dynamic "Celtic Tiger" economy.

"These are the things that we need to keep young people away from violence," says Mr. Hyland. "And there's still a lot of work to be done."