When an armour-plated JCB appeared at Drumcree on 11 July, the police relented and let the march go ahead. However, this resulted in several days of Republican rioting and road blocks causing more damage. On 28 August, too, a senior UVF member, Billy Wright, was expelled from the organisation for drugs trafficking. Wright then founded the breakaway Loyalist Volunteer Force which was not on ceasefire and began terrorist attacks. On 30 September, however, even the CLMC had had enough and the UVF/UDA ceasefires were terminated. In March 1997, Billy Wright was imprisoned for issuing death threats.

A UK General Election was called for May 1, 1997. Sinn Fein did very well and not only regained Belfast West but also took Mid Ulster from the DUP. The SDLP lost one of their four seats and the DUP was reduced from three to two. The Ulster Unionists gained a seat by winning the newly created constituency of Tyrone West. The new UK Prime Minister, Tony Blair, anxious to get the process moving again, announced that the all-party talks were starting, regardless of whether Sinn Fein was present or not. (Sinn Fein were affiliated with the IRA and could not enter unless there was an IRA ceasefire.) The issue of decommissioning became less important, as it became clear that the IRA was not going to accept it. The summer months of 1997 were yet again marred by violence. In an attempt to avoid the 1996 violence, the police forced the Drumcree Orange march down the Garvaghy Road by barricading the side streets with land rovers. The result of this was several nights of provincewide Republican violence with 200 carjackings and 600 attacks on the security forces.

The IRA realised, after the marching season was over, that if the talks were going ahead regardless of Sinn Fein's presence, that it would be better to be there to ensure that they had a voice. So on 20 July 1997 the IRA called a new ceasefire. In August, Mo Mowlam, Northern Ireland minister, said that Sinn Fein would now be admitted to the talks if they accepted the principle of democratic and non-violent means. On 9 September Sinn Fein did so, although the IRA released a statement saying that they did not. On 15 September all of Northern Ireland's political parties, except the DUP and UKUP who boycotted it, sat down for peace talks. It was a very historic day. After initial qualms, the Unionist parties agreed to begin the negotiations on 7 October. Progress was slow, but was made.

On December 27, 1997 LVF leader Billy Wright was shot dead in the Maze Prison by an INLA inmate. The LVF, which had never called a ceasefire, began what it called a "measured military response", which consisted of murdering Catholic civilians. Several Protestants were murdered in retaliation, and the UVF/UDA ordered their political representatives, the PUP and UDP, out of the talks. Mo Mowlam was able, however, to persuade them to stay. When the UDA admitted to three murders in late Jaunuary 1998 the UDP was expelled for three weeks. In February, the IRA was blamed for two killings and Sinn Fein was expelled for three weeks. Sinn Fein protested strongly, and threatened to fight the decision in the courts. It dropped the action after a few days however. Both parties stayed away for longer than three weeks as a protest. Sinn Fein eventually returned on 23 March 1998. They also admitted that a united Ireland was not going to come out of the process.

On 25 March, the talks chairman George Mitchell decided that the process needed a catalyst and announced that agreement must be reached by Thursday, 9 April 1998 at the latest. The talks went into full time session as agreements were reached with astonishing speed. On April 6, Senator Mitchell released a draft discussion agreement to the parties. However, the Unionists objected strongly to the strand 2 (North-South) proposals and for a few days it looked as if the talks were going to collapse. Only the personal intervention of Tony Blair and President Clinton managed to save them. On 9 April, the talks went into 24 hour session in a (failed) attempt to reach the midnight deadline as the eyes of the world watched Stormont. Eventually, at 5pm on 10 April, Good Friday, Senator Mitchell announced that "the parties have reached an agreement" after 29 years. Pictures of Sinn Fein, the loyalists, the SDLP and the Unionists sitting together applauding the announcement were beamed around the world. Copies of the agreement were sent to every home in Northern Ireland and a referendum was announced for 22 May 1998.

During the 5 weeks of campaigning the Unionist vote was consistently split 50-50 in polls, and 5 UUP MPs broke ranks and joined the DUP and UKUP in their campaign for a No vote. The result, however, was a clear majority: 71% Yes. Indications are that the Unionist community voted Yes by a slim margin. The nationalist community had about 95% Yes. The Republic of Ireland's parallel referrendum received a massive endorsement too. Elections to the Northern Ireland Assembly then took place in late June. In these, the 'yes' Unionists won the majority of the Unionist seats, and so the Assembly looked able to survive. However the Unionists refused to join government with Sinn Fein unless the IRA decommissioned its weapons.

Around about this time, as the Agreement was being implemented, a number of dissident Republican groups who were opposed to the Agreement began terrorist attacks. One such group, the self-styled 'Real' IRA began bombing town centres. Although the Irish Garda foiled several of their attacks, their bomb in Omagh on 15 August which killed 29 civilians soon showed them to be a major threat. This outrage provided the impetus needed to push the various sides together and within weeks the UUP and PUP had agreed to talks with Sinn Fein and Sinn Fein said the war was over and began cooperating with the decommissioning body. All terrorist organisations except for the CAC declared ceasefires. Tough anti-terrorist laws were introduced North and South and quickly dissident Republicans were fleeing their homes. Watch this space.