FOR the past month, the bloody conflict between Northern Ireland's nationalist Catholics and its British opponents has been waged at an unusual arena - an American court. The Federal court in San Francisco has been the venue of a bizarre hearing in which the British Government has sought the extradition of an escapee from Belfast's infamous Maze prison. To date, the British have had little success in their bid to send James Joseph Smyth back to jail to complete a 20-year sentence for the attempted murder of a prison official. The hearing, which has been watched with intense and sometimes lurid interest by the British press, has turned into a debate over whether Irish Catholics suffer persecution in Northern Ireland. An all-star cast of witnesses from Britain and Northern Ireland have been summoned to give evidence, among them the UK's senior civil servant in Northern Ireland, John Chilcot; Brigadier Alistair Irwin, the commander of Britain's troops in the troubledregion; left-wing British MP Ken Livingstone and fiery Irish radical and former MP Bernadette Devlin McAliskey. Smyth, who escaped from the Maze in 1983, along with 37 other inmates, belongs to Sinn Fein, but denies he is a member of the banned Irish Republican Army. After his escape, he settled in San Francisco, married an American woman and found work as a house painter. He made three trips to Ireland using a false passport before his belated arrest last year. Since the hearing began, Smyth has been the pin-up boy of many in San Francisco's large Irish-American community. His bid to evade British authorities is the first test of an Anglo-American extradition treaty that was revised in 1986. The Reagan and Thatcher administrations introduced the treaty to prevent Irish terrorists from winning asylum in the US, but ironically, it appears as though the new extradition rules have worked in Smyth's favour. A clause in the treaty - added at the insistence of Congress - specifies that a fugitive can obtain asylum by proving he would be persecuted in the UK because of his race, religion, nationality or political views. Smyth's lawyer, federal defender Karen Snell, has sought to prove that Smyth would be the target of discrimination in Northern Ireland by importing a host of republican-sympathetic witnesses, including Devlin-McAliskey, Livingstone, Irish ParliamentarianNeil Blainey and relatives of slain Catholic nationalists. The British, represented by the US attorney's office, have countered with testimony from Chilcot, Brigadier Irwin, Maze Prison governor John Baxter and an assistant chief with the Royal Ulster Constabulary, Wilford Monahan. The British officials maintain there is no systematic persecution of Catholics in Northern Ireland or collusion between the military and Ulster loyalists. The refusal, however, of British authorities to hand over classified documents to the judge presiding over the case, Barbara Caufield, has resulted in her ruling that the onus is on the British to prove Smyth would not be persecuted if he is extradited. That is no easy task, especially in light of admissions by Chilcot, under cross examination, that he could not guarantee the safety of someone like Smyth and some sensational claims from outspoken MP Livingstone (who is referred to as ''Red Ken'' by British tabloids) that the British have a ''shoot to kill'' policy directed at IRA suspects in Northern Ireland. The documents the British refused to hand over are official investigations into this alleged ''shoot to kill'' policy. The section of Livingstone's testimony which attracted the most attention, however, especially in English tabloids, was his claim that MI5 exploited a bogus photo of former prime minister Ted Heath in a compromising position with a male Swedish diplomat. This was part of a ploy, Livingstone told the court, to coerce Heath because he was too soft in his stance on Northern Ireland. The hearing may determine more than just Smyth's fate because extradition hearings for two other Maze escapees, Kevin Artt and Pol Brennan, are pending in California. Snell believes the current case will establish the ground rules for subsequent extraditions. ''Under the present circumstance in Northern Ireland, it's my feeling it will be very difficult to have any Irish nationalist extradited from the US,'' said Snell. ''That's because it's a discriminatory system. I would not be surprised if we ended up with a finding by a US court that there is collusion between loyalist and security forces.'' Snell has asked the judge to have the testimonies of Chilcot, Monahan and Irwin struck from the record, arguing they made contradictory statements. But Snell's legal opponent, Mark Zanides from the US attorney's office, says that Smyth is a convicted criminal and what becomes of him after he has completed his sentence is irrelevant to the terms of the treaty. ''The simple fact is that he will not be subjected to discrimination from anyone when he goes back,'' said Zanides, adding, ''if he re-involves himself with terrorism, things will change a bit.'' Zanides said the judge's presumption that nationalists suffered discrimination was ''not warranted'' and an appeal by the UK Government was assured should Smyth win the case.