Last month, a unique event took place at Belfast's Ulster Museum. In a public discussion about the political, cultural and paramilitary murals that define this troubled landscape, a republican muralist was joined by a loyalist muralist. "The War on the Walls" was the first time painters from both traditions had shared a platform, in a vivid demonstration of how the ceasefire has created a space for a divided people to discuss their differences and the things they share. It also proved that the peace process has not stopped people painting the walls of this contested province. Instead, it has sent the painting process into several different directions.

People have painted murals in Northern Ireland for almost a century. For most of that time, they were almost entirely unionist. Every year on 12 July, unionists decorated their streets to celebrate the victory of the Protestant William III over the Catholic James II in 1690. When new trolley and electricity lines interrupted this annual custom, unionists began to paint "King Billy" on their gable walls instead. For the next 60 years, these portraits were repainted every summer. Then came the Troubles, which inspired republican murals, and dramatically transformed loyalist murals, too.

"King Billy murals faded rapidly," says Dr Bill Rolston of the University of Ulster, the author of several books about these murals. "Loyalism is no longer sure of its roots, its identity, its origins." We're on Belfast's Donegall Pass, driving past a mural of King William of Orange on his white horse. A bit further on, we pass a mural commemorating the soldiers of the 36th Ulster Division, recruited from the original Ulster Volunteer Force, who died at the Somme. It also shows we're in UVF rather than Ulster Defence Association territory. The next loyalist mural, like most since the 1985 Anglo-Irish Agreement, is paramilitary. "At best, King Billy murals were just about a community celebrating itself," says Rolston. "Sometimes, they were also a taunt to the other side." But these paramilitary murals, he says, cause offence. "If you're a nationalist, say, whose brother or father has been shot dead by a squad of UVF men, then that image is not a neutral image."

Since the ceasefire, most loyalist murals have become even more militant. "Compromise or Conflict" declares one on the Shankill, but it depicts armed paramilitaries battering down a door. "That's not really eligible for a cross-community grant," Rolston comments wryly. Nearby, some men are repainting another paramilitary design. Rolston thinks the man in the car close behind us may be trying to make a point, but we stop and Rolston swaps a few cordial words with the painters. On the Lower Shankill estate, in an area never painted before, several new paramilitary murals have appeared, with more under way. "For all that they say to this community," says Rolston, "they also say to me 'Stay out, do not come in here, whatever you do'. But I'm a bit deaf, so I'll go in." We go in. "It's a bit scary," says Rolston, but he doubts if murals either encourage or sidetrack violence. "Some of the muralists have been out with guns already, and their gun career is behind them."

Elsewhere on the Shankill are a few historical motifs, depicting the formation of the original Ulster Volunteer Force in 1912 and the Ulster Workers' Council strike of 1974. On one of several murals funded and designed by the Ulster Scots Heritage Council, US President Buchanan declares: "My Ulster blood is my most priceless heritage." Unveiled by the US consul general in 1999, it's inscribed in Ulster Scots. Further on, a Red Hand Commando mural bears American eagles and an Irish motto. Contrasting attempts to contest nationalist ownership of language and American emigration? Other loyalist murals have attempted to reposition Irish icons such as St Patrick ("Apostle of Ulster") and Cuchulainn ("Ancient Defender of Ulster"), but most show hooded gunmen.

Loyalist imagery and republican imagery have very different origins, and the similarities are only superficial. Republican murals were sparked by the hunger strikers of 1981, but their themes and styles rapidly became increasingly sophisticated and diverse. According to Dr Neil Jarman of the North Belfast Community Development Centre, republican murals are actually colonising an area of nationalist history that hasn't been part of republican history, commandeering historical themes that are not directly part of the political domain.

The muralist's role in either community is also far from equal. "Loyalist painters often tend to be people who are commissioned to do the painting, whereas the republicans will often dream up the idea and seek out a place to do it," says Jarman. Republican murals belong to a far younger but far more spontaneous, independent tradition. They confirm people's beliefs, but at best, as Rolston says, they may also change people's sense of their own identity. They did depict hooded gunmen, too, but unlike their loyalist counterparts, they've been far less militaristic since the ceasefire. "The only military images you will now see in republican paintings are in commemoration-type murals," says Rolston. We're now on the Lower Ormeau, a flashpoint between unionist marchers and nationalist residents. One mural has been spattered with red and blue paint, but this increases its impact. The muralists, says Rolston, are propagandists, not artists. "They're not proprietorial." Indeed, most murals are destroyed by their makers, who want the wall for another message.

On the Falls Road, we pass murals that seek equivalence with a range of past or foreign conflicts, from the Famine to Catalonia, from Bobby Sands to Che Guevara. Unlike most loyalist murals, which seem more timeless, republican murals respond to specific political events. Peter Mandelson becomes Pinnochio. The happy family on the cover of the published copy of the Good Friday Agreement become a gang of rioters. A clairvoyant with a crystal ball foresees a disbanded RUC.

Danny Devenny, a former republican inmate of the infamous Long Kesh jail in the Seventies, has been a full-time muralist for the past decade. "Everyone has their particular role to play," he says, quoting Bobby Sands. "We see this as our role." His murals hitch a ride on the media, to broadcast a separate message from the news networks that distribute them. The day after he'd spent three hours painting a mural, one newsman had already syndicated it to an audience of 40 million worldwide.

Devenny calls himself a political activist, not an artist. "The men of art have lost their heart," he says, quoting Sands again. "The word 'artist' has disgusted me for a long time." He has no respect for "so-called" artists. "When their support was needed, they weren't there." Muralists stand outside the arts. "No one tells you what to do. You've got a brush. You've got the paint. You've got a wall. Off you go." Devenny has already painted about 20 murals this year alone, but most sites are recycled and only a few are preserved. Locals like them, he says, but they're defaced by the "so-called" security forces, although such interventions have decreased since the ceasefire. He has made murals for feature films, and even travelled to New York to reproduce republican and loyalist murals to promote a play. Unionist dignitaries unveiled King Billys. Now Sinn Fein politicians unveil his Bobby Sands. "The republican movement is part of the Establishment now."

Devenny thinks that "loyalist politicians are embarrassed by the imagery that is going up in their communities", and that loyalist paramilitary painting "reflects their insecurity". Yet he'd still rather that barometer was there. "They tell me what those people are thinking," he says. "You start on that basis with an understanding - then you can build on it." Devenny has discussed doing a mural using symbols from both communities, and has included loyalist motifs in a retrospective of his murals, despite some objections from his own side. He's been commissioned by a unionist who didn't know he was a republican. He does now. "He knows that I've been in prison, I've been shot twice, I've been working for Sinn Fein," Devenny says. "He's honest with me and he's learning stuff from me. I'm learning an awful lot from him . . . We were all part of the problem here. We should all try to be part of the solution."

Like Devenny, Noel Large, a youth community worker, started painting in prison. Most of his murals were memorials to those UVF men who fell at the Somme. "Being a member of the Ulster Volunteer Force, I always had this affiliation with the 36th Ulster Division," he explains. "They joined up for King and Country, and I joined up for God and Ulster, but I could affiliate myself to them very, very easily, and took great pride in the sacrifice they made . . . Their loyalty knew no bounds, and I felt that we had a loyalty that wasn't reciprocated by the British government."

He's not against paramilitary murals, and has no objection to people painting pictures that depict the "struggle and resistance" on walls. "But I think there are enough of them there now, and the story they tell won't be forgotten. There are other things that we can diversify into which tell our story in a better light." He'd like to see an "evolution process" resulting in other murals "that are loyalist, but not necessarily paramilitary . . . There's been 30 years of conflict, and paramilitaries were involved in that, but Northern Ireland is more than 30 years old. We have a culture, we have a history, we have an identity that we can paint." That includes the province's industrial heritage: "The mills and the shipyards and the ropeworks are much more important than King Billy crossing the Boyne, because the mills and the shipyards and the ropeworks were where people made their livelihood."

Noel Large - who confesses to admiring certain republican murals (some of them are "brilliant") - wants to paint a historical mural about the history of 20th-century east Belfast, from the Titanic via the Blitz to local heroes such as Van Morrison and George Best; and, although he's still trying to secure his ideal site, he has found £3,000 of council funding. Devenny, also from east Belfast, has a similar ambition. And yet, says Large, "it's much too early in the day for loyalist and republican muralists to come together and paint, even if it's not loyalist and republican murals they're painting. That sort of work won't take place until the feel-good factor kicks in."

A lasting peace may dissipate the more militaristic murals, but plenty of issues transcend the Troubles, and are already reflected on the most vibrant and varied walls. Devenny says he hopes for a resolution to the conflict, but he also hopes that these murals, whatever their themes, won't disappear during "the peace process we all deeply hope for, and deserve".

Bill Rolston's Drawing Support: murals in the north of Ireland is published by Beyond the Pale. Neil Jarman's Material Conflicts: parades and visual displays in Northern Ireland is published by Berg. "War and Conflict in 20th-Century Ireland", a community outreach programme, is being held at the Ulster Museum, Belfast, until 8 December (02890 383 000)