New Yorkers are on Irish thistles today, waiting to see whether Cardinal Terence Cooke will take his traditional place of honor on the steps of St. Patrick's Cathedral to watch Thursday's unusually controversial St. Patrick's Day parade.

What Cooke does could have far-reaching implications for the nation's millions of Irish-Americans, most of whom are Roman Catholic and concerned about the continuing sectarian violence in Northern Ireland, where the outlawed provisional wing of the Irish Republican Army is trying to force an end to British rule through terrorist attacks.

The possibility that New York's 221st St. Patrick's Day parade may be seen as a massive rally for the IRA has divided politicians, local governments and the news media here and has prompted both the Irish and U.S. governments to withdraw their support for the event.

This all is because the parade's grand marshal is Michael Flannery, 81, an IRA member since the age of 14 who spent time in British jails during the 1920s.

He was elected by the parade organizers, the Ancient Order of Hibernians, in a vote of all but six of 510 delegates from 170 Irish-American organizations.

The Republic of Ireland and Britain have been struggling since the current violence began in 1969 to erase the image--common among Irish Americans--of the IRA as a gallant band of Catholic Irish nationalists fighting unjust repression by the British and Northern Ireland's two-thirds protestant majority.

The Republic and Britain seek to replace it with a grimmer picture of hardened terrorists harming innocent civilians in counterproductive bombings and shootings rather than working with the Irish government for a peaceful unification of Ireland.

Flannery's supporters said his election as grand marshal brings to the surface militant anti-British sentiment that has been bubbling beneath the surface of Irish-American sentiment for years.

Last year, an attempt to reduce rowdyism by moving the parade from March 17, the anniversary of St. Patrick's death in 461 A.D., to the nearest Sunday, caused an outcry among the 32 organizations representing the 32 counties of Ireland and neighboring Northern Ireland.

Instead, the Hibernians were pressured into naming as honorary parade marshal the late Bobby Sands, the first of 10 convicted IRA terrorists who died during a 1981 hunger strike at the Maze Prison in Northern Ireland. It was a major escalation from the single sign urging "Britain Out of Ireland" that the parade has featured since 1947.

This year, Flannery was quoted by The New York Times as saying that the whole event, expected to attract 100,000 marchers, is "definitely going to be a pro-IRA parade." In an interview this week, Flannery denied saying that. But he added, "Nothing could make me prouder than for it to be an IRA parade."

Many of those who plan to march said that Flannery and the IRA are not at issue and that politics should not deny the Irish a good party. Some even said marching in spite of Flannery is the only way to keep the parade out of IRA hands. "We are marching against IRA violence. We are marching against terrorism," New York Mayor Edward I. Koch said.

But many said that if Cooke receives Flannery and waves at the marchers from the steps of St. Patrick's Cathedral, Flannery's backers are sure to call it a tacit church blessing of Flannery's views and Irish-American support for the IRA.

Flannery is a co-founder of the Irish Northern Aid Committee (NORAID), which has collected several million dollars in the United States to help widows and families of jailed IRA fighters. The British, Irish and U.S. governments long have suspected that some of the money also goes to buy guns, which NORAID officials have denied.

It is a difficult position for Cooke, who complained last week that the parade "has once again been made something it should not be."

The son of Irish immigrants, he has frequently condemned violence on all sides in Northern Ireland. He also has denounced British abuses in arrests and interrogations in Northern Ireland and has called for understanding of the Catholic Irish nationalist minority there.

"The violence of a frustrated people is a reaction to continuing injustice, and not the root cause of the crisis," he said last week.

Cooke's aides said that he has decided what he will do Thursday, but has chosen not to announce it. But after Cooke pulled several Catholic high school bands out of the parade, many Irishmen here said they expected he would boycott it.

"We take his word on religious matters, but on political matters we do our own thinking, always have," Flannery said.

If Cooke snubs him, Flannery said, "I'll have nothing to say for or against him. A lot of people condemn the IRA because they just don't understand it . . . . They're the only army in the world who's fighting a just war. The whole world should be behind it."

But the government of Ireland, which contends that IRA violence is opposed by a majority of its citizens, was the first to withdraw its representatives from the reviewing stand at the parade.

"The IRA have attempted to steal St. Patrick's Day from the Irish-American community," said Irish Ambassador Tadhg F. O'Sullivan, "but we are confident they will not succeed."

In a public plea timed for the eve of the New York parade, the visiting Irish foreign minister, Peter Barry, urged in a speech in Washington today that Irish Americans stop "sending guns, money or organizing propaganda support" for the IRA.

"In New York," Barry said, "those who have inherited the trust of organizing the St. Patrick's Day parade have chosen, wittingly or unwittingly, to allow what should be a joyous commemoration of all our Irish traditions to be presented as a gesture of support for the narrowest and most bitterly divisive element in Ireland today: the IRA campaign of violence"

Barry said President Reagan, who is expected to make a St. Patrick's Day visit to the Irish Embassy, "shares with us his opposition to those elements in this country which threaten" attempts by the Irish government to find a solution to the Northern Ireland problem through political negotiation.

The Defense Department has ordered U.S. military personnel not to take part in the parade, removing several hundred marchers and two bands. But the National Guard's Ninth Regiment band, under state command during peacetime, will lead the parade as usual.

Fifteen high school marching bands also have pulled out. But 105 musical groups still are preparing to march.

Sen. Daniel Patrick Moynihan (D-N.Y.) abandoned the boisterous breakfast party he has hosted at a New York bar every St. Pat's day since 1977, and will boycott the parade. Former governor Hugh Carey and Sen. Edward M. Kennedy (D-Mass.) have denounced Flannery's leadership of the parade.

But many local politicians--including Koch, former City Council president Paul O'Dwyer, Sen. Alfonse D'Amato (R-N.Y.), Democratic Gov. Mario Cuomo and Rep. Mario Biaggi (D-N.Y.)--will join in the parade after eating breakfast with Flannery's friends at O'Lunney's Bar and Grill.

Flannery, who frequently appeared on television, was cheered wildly at three parades in New Jersey last weekend, and will be grand marshal of San Francisco's parade Sunday.

"It's done us [IRA backers] a big favor," he said. "It's a million dollars in publicity."