The prime ministers of Britain and Ireland spent a long day meeting here with leaders of several of Northern Ireland's political parties in a last-gasp effort to save the peace process in the British province that began with last year's Good Friday agreement.

In contrast to their despairing words on Monday, the haggard negotiators showed mild optimism after 12 hours of talks today, suggesting that they might find a formula that would preserve the newly created local government and make at least a start toward voluntary disarmament by the sectarian armies that fought for 30 years, killing more than 3,500 people.

"We heard encouraging noises today," said David Trimble, head of the largest unionist -- or pro-British -- party. "I think agreement will come," echoed Seamus Mallon, a leading figure in a moderate nationalist -- or pro-Irish -- party, "but some hard questions still have to be asked before the deadline."

British Prime Minister Tony Blair has set a deadline of midnight Wednesday for an agreement among the parties here over the intractable and intertwined issues of disarmament and setting up the government. But deadlines tend to be flexible in Northern Ireland, and it would surprise nobody if the talks carried on to the end of the week.

Whatever the result, all parties seem to agree that this is the most crucial week for Northern Ireland since that euphoric Easter weekend in 1998 when leaders of eight parties signed a complex agreement designed to end the sectarian warfare.

Blair and his Irish counterpart, Bertie Ahern, have refused to say what will happen if there is no deal. The widespread fear is that a breakdown now would take the province back to bitterness and violence.

The calendar makes the stakes even higher, because Sunday marks the opening of the annual "marching season" here, when Protestant groups hold ceremonial parades throughout the province to mark the victory of a Protestant king over a Roman Catholic army in the 17th century.

The march scheduled for Sunday already threatens to be a powder keg, because the Protestants of the Orange Order have been denied the right to march through a Catholic neighborhood on the outskirts of Portadown. Catholics consider the parades to be an affront.

As a reminder of the way things used to be, police in the Republic of Ireland said tonight they had found the badly decomposed remains of two people buried in a rocky field in County Monaghan, just south of the border. These are believed to be two of the people who were killed and "disappeared" by Irish Republican Army operatives a quarter-century ago.

Last year's peace agreement called for creation of a local assembly and multiparty cabinet to govern the 1.6 million residents of Northern Ireland. That assembly has been elected and the cabinet named -- including two members from Sinn Fein, the legal political arm of the outlawed IRA.

The deal also required the sectarian paramilitaries to begin "decommissioning," the term used here for voluntary disarmament. The timetable was left vague, but disarmament is supposed to be completed by next May.

The deliberately vague disarmament language has led to a year-long stalemate.

Trimble, first minister of the new assembly, has refused to authorize the new cabinet until the IRA commits to disarmament. This condition is not set forth in words of the agreement, but Trimble said a start toward decommissioning would comport with the spirit of the deal.

In setting this requirement, Trimble is playing to his unionist constituency, which has strong ties to Britain. The most extreme unionists remain intensely suspicious of the IRA and Sinn Fein, which favor a united Ireland.

Sinn Fein argues that Trimble has no right to add provisions to the Good Friday agreement. In resisting Trimble's demand, Sinn Fein leader Gerry Adams is playing to his nationalist constituency, which remains intensely suspicious of Trimble and other unionists.

Blair, Ahern and moderates in the Northern Ireland parties are struggling to find some mechanism to give both Sinn Fein and the unionists a victory. The term that seems to be at the heart of the current talks is "sequencing," in which the various parties would agree this week to a clear sequence of steps that would put the cabinet in office and pave the way for disarmament.

An international commission appointed to oversee the disarmament process was supposed to issue a report today assessing how each of the paramilitary groups is likely to proceed with disarmament. But the report was delayed, evidently because Blair and Ahern feared it would threaten the delicate sequence of steps they are negotiating.