It is a cold and drizzly Saturday in early November, the first big shopping weekend before Christmas. At the Queen's Arcade, this city's downtown merchandising center, Catholics and Protestants crowd together in the preholiday buying binge.

Above the sounds of cash registers and chatter comes the beat of drums as a blocks-long parade marches past, heading toward Belfast Town Hall. At its head is a group of men in overcoats, their chapped faces pinched and angry.

They are Unionists -- leaders of the Protestant Northern Irish majority -- and as they pass, hundreds of shoppers gather up their bags and join them. By the time they reach the Town Hall square, there are thousands.

"We are gathered here today to serve notice on Westminster and Dublin," shouts one of the overcoated men from the back of a flatbed truck. "To warn them against attempting to introduce an Anglo-Irish process designed to grant Eire a say in the affairs of Northern Ireland. Any such attempt will be met by organized and determined resistance."

"We must hope for the best, and prepare for the worst. Put your trust in God and keep your powder dry. No surrender." The speaker invites the crowd to join him in singing "what is and will remain our only national anthem -- 'God Save the Queen.' "

For the past 16 months, the governments of Britain and the Republic of Ireland have been negotiating secretly a new future for the strife-torn British province involving what is believed to be a permanent and forceful Irish presence in the north. The talks mark the first major initiative for change in Northern Ireland since a 1974 agreement, guaranteeing the local political rights of the Roman Catholic minority, quickly fell apart under Unionist pressure.

More important, the negotiations constitute the first time since the island was partitioned more than 60 years ago that the two sovereign states have tried to sort out the violent legacy of that division without the direct participation of the Northern Irish.

Both London and Dublin are looking for political support for the accord from the United States, where elements of the lobby of Catholic Irish Americans often have been seen as an impediment to peace because of their sympathy for the outlawed Irish Republican Army and its campaign of violence aimed at reuniting the island. American support "is the single most important external factor," a British official said.

There is a widespread assumption in Belfast, Dublin and London -- but no firm promise from Washington -- that the Reagan administration will propose a major aid program of up to $1 billion to back the accord and support stability.

"We would welcome it," said the British official. "Although nothing would be more damaging than the impression that the two governments were somehow bribed into this."

The negotiations are moving rapidly to an end, and a summit between Prime Ministers Margaret Thatcher of Britain and Garret FitzGerald of Ireland to announce the outcome is expected soon, possibly within the next week. All indications are that the new agreement will establish an institutionalized Irish voice in British decision making that will serve as a guarantee of Catholic minority interests.

The wording of the accord, to be registered with the United Nations as a show of good faith, will be somewhat vague, sources said. Rather than directly address the reorganization of the almost exclusively Protestant security forces, judiciary and local governmental institutions in Northern Ireland along lines more acceptable to the Catholics, it will establish a joint Council of Ministers, with supporting secretariat.

Eventually, "once the dust settles" from the renewed violence the accord is expected to provoke, an official said, the ministers will begin to deal with specific questions with equal input from both governments. Theoretically Britain, as the sovereign power, will maintain a veto that neither side expects will be used extensively. As decisions are reached for change, they will be announced unilaterally by Britain.

Sources said that the British decision to allow Ireland a voice in the governing of the north was one that was not reached easily.

Nearly 3,000 persons have died in Northern Irish violence since 1969, the year that sectarian strife between the two communities brought in British troops to keep order. Many have been the victims of terrorist attacks by the IRA. Others have died at the hands of Unionist extremist groups, and some in the periodic street riots that pit the minority community against the security forces.

Since 1981, when IRA prisoners in Northern Irish prisons mounted a hunger strike campaign that led to 10 deaths, the situation has worsened. The Catholic community has become increasingly disenfranchised and disillusioned, and Sinn Fein, the IRA's legal political party, has gained strength in local elections.

Sources in London who asked not to be named said that Britain had run out of solutions. Repartition of the province is not geographically possible because of the scattered distribution of both Catholics and Protestants. An independent Ulster is not seen as economically or politically viable, and local power-sharing between the two communities has failed.

Thus the British saw themselves as being forced to seek new ways to assimilate the Catholic nationalists more into the province. The idea was to maintain legally absolute British sovereignty, while trying to legitimize Catholic "Irishness" through a special bilateral relationship with Dublin.

The two governments hope that the new guarantees will give Catholics more confidence in democracy in Northern Ireland, where they are outnumbered 2 to 1. This confidence, they hope, will lead to diminished support for the political and military efforts of the IRA.

Both governments acknowledge that successful presentation of the accord as beneficial to two diametrically opposed communities will be more than half the battle. The Irish must make it appear substantially more than it is, while the British must play it down as substantially less. As the still-secret date approaches, there is palpable anxiety in the official corridors of both Dublin and London.

They know that the accord stands a good chance of instant rejection by nearly all participants and interested parties in the Northern Irish situation. Already, Irish opposition leader Charles Haughey has condemned FitzGerald for signing away Ireland's legitimate claim to reunification with Ulster by negotiating an agreement that recognizes British sovereignty. Haughey heads Ireland's largest political party, and FitzGerald's coalition government enjoys a slim majority over the opposition.

The republic's constitution pledges all Irish governments to a policy of reunification. But FitzGerald, who fears that northern instability could spill into the south, is betting his political career on a belief that most Irish citizens agree that "we cannot afford to wait for [reunification] magically to happen."

While moderate Ulster Catholic politicians have worked with FitzGerald in negotiating the agreement, Sinn Fein and the IRA have dismissed it as a ploy and promised to step up military attacks.

In Britain, sources said that Thatcher is "committed to a political solution in Northern Ireland" despite an inclination to deal with the situation through force.

While she repeatedly has assured them that sovereignty is not at issue, there is a vocal minority within her Conservative Party in Parliament that shares the belief of the Unionist leaders that any deal with Ireland is a step down the "Dublin road" capitulating to violence and leading to diminished British rule.

The key to even modest success for an Anglo-Irish pact rests with approval from the Protestant community in Ulster, and there are few reasons for optimism.

The Unionists are well aware, and polls show, that most Britons would rather be rid of them and give Northern Ireland to Dublin than continue to put up with the terrorism and expense that have become the price of their membership in the United Kingdom.

But their argument strikes a guilty chord in the heart of many a British democrat.

"We are supposed to be loyal citizens of the United Kingdom," said William Thompson, a Unionist politician from Omagh in central Ulster.

"But because there are 200 miles of water between us, they don't care a whit about us," he added. "The Brits would get rid of us tomorrow if they could dump us. The reality is they can't. There are 1 million Protestants here who won't go."

Thompson is a relatively moderate Unionist. Yet asked about a joint Anglo-Irish council, he said, "We'll accept nothing of any sort. What goes on here is no business of the Irish Republic, it being a foreign country. Any such type of institution will be regarded as a derogation of sovereignty, the thin edge of a wedge, leading to a united Ireland."

Militant Unionist leader Ian Paisley is more specific. Implying that he would lead his followers to violence in the event of an unpalatable agreement, Paisley reacted angrily in a recent interview.

"We're not playing games; this is not play-acting," he said. "This is a life or death situation. Our people have been murdered and bombed by the IRA for years. Do you think we're now going to suddenly surrender . . . and go down the Dublin road? Indeed, we're doing nothing of the sort. We are going to resist it."

If they do not resist, Paisley and others have said, their political positions will be usurped by those willing to fight.

In Dublin, an Irish official said his government takes them at their word. "We expect an immediately bad security situation" once the summit is held, "and a marked deterioration for the first six months" under the agreement, he said.

This time, however, the fear is that the leading edge of terrorism will come not only from the IRA and not necessarily in Ulster. The Irish say they have "taken measures" against anticipated Unionist violence within the republic.

"We expect a campaign of general terror, bombings and targeted assassinations here," the official said.

"We are aware that things can go badly wrong."

In the Foreign Office in London, a British official was more circumspect. "It will be a difficult period," he said. "The omens are that it should be containable, given luck, judgment and skill. But both governments are well aware of the risk."

What Britain hopes, he said, is that "moderate" Unionists will reserve judgment.

"There is an exhaustion" in the province, he said, "and a feeling among moderate men that, for God's sake, it must be possible to do better than this."