On 31 August the IRA announced a "complete cessation of military operations". The statement was greeted by widespread celebrations in nationalist areas. But unionists and the UK government pointed out that there was no explicit promise that the truce was permanent.
"We believe that an opportunity to create a just and lasting peace has been created," the statement said. "We note that the Downing Street Declaration is not a solution - a solution can only be found as a result of inclusive negotiations."
UK Prime Minister John Major said that the statement was "very welcome indeed" but complained that it should be "clear and unambiguous" that violence was over for good. DUP leader Ian Paisley went further saying that the ceasefire statement was an "insult to the people [the IRA] has slaughtered because there was no expression of regret".
Loyalist paramilitaries believed that a secret deal had been done with the IRA and maintained a "wait and see" policy towards the ceasefire.
The ceasefire lasted 17 months. On 9 February, 1996 the IRA planted a huge bomb in London's Docklands. It killed two, injured more than 100 and caused more than £85m of damage.
A new ceasefire was not to come into place until 20 July, 1997, following the election of the new Labour government. Labour, which unlike John Major's Conservatives did not have to rely on the parliamentary support of the Ulster Unionists, had effectively made it clear that Sinn Fein would be welcomed to talks - but only if the ceasefire was restored.
In the four years following the second ceasefire, the future of the IRA's weaponry has been one of the dominant and unresolved issues of the peace process.
Republicans have argued that the arms can only be dealt with as part of a solution that leads to "all the guns being removed from Irish politics" -giving equal weight to IRA weapons and the presence of the British military.
In May 2000, as part of a comprehensive deal to kick start the stalled Northern Ireland Assembly, the IRA issued a statement offering to take part in a process in which its arms would be placed "completely and verifiably beyong use", providing that the Good Friday Agreement is implemented in full.
Since that date, the IRA has opened up some of its arms dumps to international inspectors who, on each occasion, confirmed that the weaponry inspected was beyond use at that time.