Violence undermines hopes for recovery in N. Ireland

Dissident republicans exploded a roadside bomb last month close to her Cross Square Hotel in the town of Crossmaglen. The police station less than 200 yards away has been raked with gunfire twice this year.

“The last time we had people staying, there was gunfire,’’ said Carragher, whose family opened the hotel in 2006. “They asked ‘What was that?’ and we said we never heard anything. There was no point panicking them.’’

Gun attacks by dissidents rose 54 percent to 79 percent in the 12 months through May, according to the Police Service of Northern Ireland. The violence has rekindled memories of the 30-year period known as The Troubles, when 115 British soldiers were killed in south Armagh, the area around Crossmaglen.

“People probably think it’s a strange place to put a hotel, but we thought tourism would pick up a bit round this area with the peace process,’’ Carragher said.

The 1998 peace accord between the mainly Catholic Irish Republican Army and the predominantly Protestant Unionist groups, which want to keep Northern Ireland part of Britain, has been opposed by dissident members of the IRA, who are pushing for a united Ireland.

They are most active in south Armagh, where a group of 20 English tourists canceled a stay in the Cross Square Hotel in May after an attack in the area. Rioters in Belfast attacked police in July for three nights, injuring 80 officers.

A car bomb exploded last week in Derry, 90 miles from Crossmaglen. Martin McGuinness, Northern Irish deputy first minister, called the attack a “futile and cynical attempt to try to take us back to conflict.’’

“We are seeing images of violence, and it is just hurting people and businesses,’’ said Glyn Roberts, head of the Northern Ireland Independent Retail Trade Association, an industry group in Belfast for store owners.

The Northern Irish economy will grow 1 percent this year after shrinking 4.4 percent in 2009, according to Angela McGowan of Belfast-based Northern Bank.