The picketers and protesters were at the Capitol Wednesday when Prime Minister Margaret Thatcher came to address Congress. Led by former New York City Council President Paul O'Dwyer and Rep. Mario Biaggi, the demonstrators railed against the British presence in Northern Ireland and the treatment of prisoners there. Some in the group -- notably Michael Flannery, who admits he has supplied money for IRA arms purchases -- urged the crowd not to "be ashamed of the Irish Republican Army."

Mr. Flannery is the founder and director of NORAID, an American fund-raising organization that purports to collect money for charities in Northern Ireland. Law enforcement officials here, in Britain and in the Republic of Ireland contend that NORAID, in fact creates widows and orphans by supplying funds and weapons for terrorist activities. It is precisely this kind of misguided American support for the IRA that Mrs. Thatcher protests.

Americans who are concerned about peace in Ireland should consider the judgment of those much closer to the scene. In the Republic, the IRA is outlawed. The Dublin government is the only one in the world to extradite IRA fugitives for trial in British-ruled Northern Ireland. Just this week, Prime Minister Garret FitzGerald's government was authorized by his parliament to seize IRA bank accounts. The Irish know what they're dealing with: in the last 12 years, terrorists have been guilty of numerous extortions, bank robberies and kidnappings and have killed 14 policemen and soldiers in the Republic.

Mr. FitzGerald's government knows that violence will only make more difficult a lasting settlement of Ireland's political problems. Accommodation and the development of trust on both sides will forward that goal. The Dulin government has, in particular, sought to allay fears in the north that any future form of cooperative government in Ireland would be dominated by the church. This week, for the first time, a majority of those responding to an Irish Times poll said they would vote to remove the constitutional ban on divorce in the Republic. And on Wednesday, the government won approval in parliament for a measure that would greatly increase the availability of contraceptives. In the face of strong opposition by the church, it is not easy for the overwhelmingly Catholic Irish in the Republic to take these steps. But they are a clear signal that Dublin wants a better relationship with the north and is willing to make changes to achieve it.