Walk with Jim McVeigh down the Falls Road and see how Belfast is changing.

British soldiers have left the roof of Divis Tower, where they camped for three decades watching over an angry, gray city gripped by bombings and shootings. Armored personnel carriers have been replaced by cheery red double-decker tour buses. Gutted flour and linen mills are giving way to new homes and apartments. The province's new prosperity itself is calming.

And then there's McVeigh, who spent 16 of his 41 years in prison for being an Irish Republican Army bomber. He's now a political activist who leads tours through Catholic West Belfast, happily pointing out the battlefield sights in a city he once worked hard to blow up.

"No doubt about it: A lot has changed," said McVeigh, walking under a bright, hot sun in a place that no longer looks like the beaten-down battlefield of a guerrilla war -- known here as "the Troubles" -- that has claimed more than 3,600 lives since 1969.

Peace has been coming slowly to Northern Ireland for years, especially since the 1998 Good Friday agreement set out a formula for power-sharing and demilitarization. Then in July the IRA announced that it was laying down its weapons for good, and last month an independent arms inspector certified that the IRA had fully disarmed -- a historic step toward peace.

In response to the IRA's moves, lauded from London to Washington, the British government began dismantling watchtowers and promised to cut its troop strength in half, to about 5,000 soldiers, over the next two years.

There is still considerable tension between loyalists who want Northern Ireland to remain part of Britain and republicans, like McVeigh, who want it to be part of the Republic of Ireland. The city was rocked last month by riots in loyalist communities angry over what they perceived as the government's preferential treatment of Catholics in exchange for IRA cooperation in the peace process. Gunfights among rival loyalist paramilitary groups have killed several people. Vandals set fire to a school where Protestant and Catholic children studied.

But despite these spasms of violence and molotov cocktails, which some here call "the sting of a dying wasp," Belfast officials are suddenly finding they have the luxury of talking about good news.

The first phase of a $1.7 billion waterfront redevelopment project, one of the largest of its type in Europe, was launched Tuesday by Peter Hain, Britain's secretary for Northern Ireland. Hain said the Titanic Quarter, a 185-acre office, residential and tourist development along the old shipyards where the Titanic was built, could generate 20,000 jobs by 2020.

While the Troubles were raging, few city officials drew attention to the famous hometown ocean liner that became synonymous with disaster. Now they eagerly point out, as the expression here goes, "She was fine when she left Belfast."

Last year, a record 2 million tourists visited Northern Ireland, up from the 400,000 or so who came annually in the troubled 1970s. The first regular nonstop flight to Belfast from the United States began operating in May from Newark, and more than 10 European cities now offer nonstop flights to Belfast, up from just one 18 months ago.

"Tourism is a barometer of normalcy, and tourism is doing exceptionally well," said Alan Clarke, head of the Northern Ireland Tourist Board. "Of course, we are starting from a low base, but we are a rising star in Europe."

It helps that visitors touring the city's ornate Victorian center no longer turn a corner and come face to face with a heavily armed British commando or an army checkpoint.

For a long time in the 1980s, Belfast's spectacular neoclassical City Hall was draped with a massive fluttering banner that declared, "Belfast Says No," a defiant loyalist slogan that seemed to sum up the dark and negative feel of that era.

Now the city center feels more like a small, prospering European capital, with a spruced-up City Hall festooned recently with a banner advertising a classical music concert. New hotels and a concert hall line the rejuvenated waterfront, along with the 10,000-seat Odyssey Arena, which hosts the city's professional hockey team, the Belfast Giants.

On the Falls Road, McVeigh, caught in 1983 driving downtown in a Ford Cortina packed with explosives, now walks along waving to friends, showing people the old hot spots. The trim man in T-shirt and sneakers seems to know everyone; cars honk and passersby greet him by name as he walks a four-mile route.

He joined the IRA when he was 16, following his older brothers before him. By 18, he was in jail, serving seven years before his release in 1991. But after just 11 months of freedom, he was jailed on another explosives charge and held in prison until 2000.

McVeigh insisted that his bombs were not intended to kill. They were meant to levy a "guerrilla tax" by inflicting financial damage on the British government. But many IRA bombs were lethal, part of a cycle of violence that the overwhelming majority of people here are fed up with.

Milestones of the war dot McVeigh's walking route. He points out plaques affixed to brick homes commemorating the murders of a Catholic or an IRA member, and he stops in the growing number of remembrance gardens honoring IRA prisoners and dead. Many of these places have fresh flowers and notes.

The best-known sights are the vast, colorful murals that depict scenes from the IRA movement, including the smiling face of Bobby Sands, who died in a hunger strike in the H block of the Maze prison in 1981.

More than 3,000 people, most of them academics from the United States and Europe, have taken what McVeigh calls "political tours" since Coiste, a support group for former IRA prisoners, started them two years ago.

Other visitors tour the neighborhood in commercial vehicles. Black taxis and sightseeing buses roll through the old flash points, bringing the curious from places as far away as New Zealand and California.

The government is not promoting the political tours, preferring to spend its money on less divisive spots, such as the Bushmills Distillery and the Giant's Causeway, a dramatic formation of volcanic rock farther up the County Antrim coast.

Many people here see the IRA's laying down of weapons as a practical realization that it had lost most of its remaining support -- including from its financial backers in the United States -- for its violent campaign against British rule.

A $50 million bank robbery in December in downtown Belfast, which police blamed on the IRA, and the intimidation of witnesses by the IRA after members killed an innocent man, Robert McCartney, in a bar brawl in January added pressure for the group to scrap its weapons. "The war is over," McVeigh said, but quickly added, "The struggle is not."

Ian Paisley Jr., a member of Parliament from the Democratic Unionist Party headed by his aging, firebrand father, said he was skeptical about peace. His party and other loyalists have accused the British government of betraying their cause and naively taking the IRA at its word without any guarantees.

"There is no peace here," Paisley said in an interview in his office in predominantly Protestant East Belfast. "The words of the IRA can paper this room, but their actions have put people in graves."

McVeigh pointed out a concrete wall that cuts through West Belfast, separating thousands of Catholic republicans from thousands of Protestant loyalists. Coiste estimates that 6,000 former IRA prisoners live on McVeigh's side of the wall, with thousands of former loyalist prisoners resident on the other.

"Can we walk over to the other side for a look?" McVeigh is asked.

"Too dangerous," he said, "I wouldn't be safe over there."

He and other republican guides leave the tours at the wall where it divides the Catholic Falls Road side from the Protestant Shankill Road. They turn the visitors over to a loyalist guide who runs a similar tour, telling the story of the killing and pain on the opposite blocks.

Some analysts chalk up the recent outbreaks of trouble in Belfast to youth and alcohol, lingering spasms of mindless violence in a place accustomed to it. But others worry that it is premature to pronounce a lasting peace in a place where generations have grown up being taught to look down on, if not to hate, each other.

"We are still heavily divided despite the peace process," said McVeigh, who is an active member of Sinn Fein, the political wing of the IRA. "We are not ready to live side-by-side."

Jim McVeigh, who now leads "political tours" of Belfast, stands in front of a mural of Bobby Sands, an icon of the IRA.