THE HUNGER strike of seven terrorists in a Northern Irish jail ended about as well as it could. The strikers, who had vowed to fast "until death," stopped on the 53d day. This deterred not only the death of the strikers (though some may yet die from their self-inflicted martyrdom) but also the likelihood of extensive and bloody retaliation by their fellow members of the Provisional Irish Republican Army.

The British government had vowed not to grant the prisoners' demand for special political status. That would have been tantamount to acknowledging the legitimacy of IRA's program to "liberate" Northern Ireland from Britain by force. In holding firm to the large point of political principle, however, Mrs. Thatcher did find it possible to offer certain "humanitarian" improvements in the treatment of all prisoners, not just IRA prisoners. The IRA suggests there was a deal, and the government denies it -- the issue need not be pressed.

As dramatic as was this test of British and Irish wills, it is far from the most important recent development in a relationship that has not gone particularly well for at least 800 years. That development centers on Mrs. Thatcher's meeting in Dublin last week with Irish Prime Minister Haughey. The agenda went beyond arranging a further increment in British-Irish cooperation in dealing with the common problem of terror (Protestant as well as Catholic) emanating from Northern Ireland -- though that is no small thing. Mrs. Thatcher seems to have backed off her previous rather narrow insistence that Northern Ireland is entirely a British problem, and mostly a police problem, and to have acknowledged that the Republic of Ireland has a legitimate interest there and can perhaps contribute to a solution. A sense emerged that a new relationship must be created between British and Irish. Various aspects of it, including "new institutional structures," are to be jointly studied over the next year.

Between Ireland's dedication to Irish reunification and Britain's continuing pledge to respect the (separatist) wishes of Ulster's (Protestant) majority lies a gap that not even the most earnest collaboration by Mrs. Thatcher and Mr. Haughey can soon bridge. Yet it is encouraging to find these two strong-willed leaders accepting a common commitment to explore a new arrangement. The terror in Northern Ireland will go on, at some level; a hunger strike is but a form of it. But terror cannot be allowed to dominate Irish-British dialogue. The politicians must show they believe in a political alternative. From the sidelines, Americans can quietly cheer Mrs. Thatcher and Mr. Haughey on.