thanks for this, contracycle beat me to it and gave a reasonable answer to this.
Just to confirm, John Hume isn't a representative of the British government. The negotiations with the British government started with John Major.
As for the numbers, you are right i miscalculated. It took the years from 1990-1993 rather than 1991-1993. But if you calculate the difference between deaths in 1990-3 (inclusive) and deaths in 2001-2004 (inclusive) you get an approximate decline of 88-89%, which is still good!
On a more general point, negotiations with terrorists are often demonized by politicians in public, but just carried out by those same politicians in secret. Sometimes it is even done openly. For example Israel is always calling the PLO a terrorist organization, but has formalised means of negotiation. Same goes for various more-or-less violent guerrilla groups such as FARC, Shining Path, Zapatista, etc, who are all labelled terrorists by the respective governments.
I would be very surprised if the US government and many European governments didn't have informal channels of contact with the fundamentalist groups in Saudi Arabia, which will end up as negotiation sooner or later.