NORTHERN IRELAND : Rising From the Rubble : ‘The troubles’ almost destroyed Londonderry. But rebuilding projects and community involvement have given the city new life.

“The troubles started here,” said civic leader Ian Young, “and the troubles may end here. I think the people are ahead of the politicians.”

For “Derry”--the short form nearly everyone here uses--has staged a remarkable comeback that could serve as a model of sectarian cooperation, one that might even point the way to an end of violence in the troubled British province.

The houses on both banks of the River Foyle are freshly painted, the streets spanking clean, and new construction is going up.

Northern Ireland’s two decades of sectarian violence began during civil rights demonstrations and disturbances here in the county seat, which at 100,000 population is Ulster’s second city.

The city center suffered widespread destruction in the 1970s as a result of urban violence: More than 5,200 houses were destroyed or damaged; 124 business locations were destroyed, and 1,809 were damaged. On one day alone, six bombs went off.

Londonderry’s Bogside area west of the River Foyle came to resemble West Belfast in its devastation, generating pessimism and hopelessness among the largely Roman Catholic, working-class population.

“The mass of Catholics, particularly in the Bogside, were almost totally alienated from those running this community,” said Paddy Doherty, who is in charge of the Inner City Trust redevelopment agency. “It was an obscenity.”

The violence was exacerbated by the fact that Londonderry had one of Britain’s highest unemployment rates--up to 32% among Catholic men.

Against that grim background, the Northern Ireland government introduced programs of physical and economic regeneration in the 1980s, spurred by organizations such as the Inner City Trust.

The city was helped by development aid funds from the European Community and from the United States.

Doherty’s organization has concentrated on refurbishing properties within the old walled city. He spearheaded the municipal effort by enlisting young people to construct a Craft Village, a Siege Center and a fort-museum inside the 17th-Century stone walls.

Meanwhile, new shopping centers were built and construction begun on a deep-water port. And city authorities attracted American industries such as Dupont and Fruit of the Loom, whose executives found the city a pleasant place to live and work.

While violence was dropping off markedly here, it has risen elsewhere in the province. Locals say that the Irish Republican Army does not want to antagonize Londonderry’s people by destroying what they have built in the last 10 years.

The City Council shortened the town’s name to Derry--although it is still called Londonderry in official British documents--and, with members from almost all shades of the Catholic and Protestant political spectrum represented, has managed to work together.

Some observers suggest that the cooperation shown in Londonderry could be emulated in Belfast.

However, Mayor Mary Bradley, a member of the mainly Catholic Social Democratic and Labor Party, is more realistic.

“We would like to think our experience could be used throughout the province,” she said, “but we do know that what works on a local scale does not necessarily work on a larger one.”