Dr Daly said that at the time of Bloody Sunday he had no certain knowledge of anyone involved in either the Provisional IRA or the Official IRA.
Mr Gerard Elias QC, for a number of soldiers, had put it to the bishop that at the time he had been a curate in the area for 10 years and knew the area and the people intimately.
Counsel suggested to him that, particularly after the IRA split in 1969, "you would have had at least a shrewd suspicion of those who were involved in the hierarchy of the IRA in the area". Dr Daly said he had not, and added: "I had my suspicions about some - that would be gossip - but it is nothing more than that."
Dr Daly said he thought there was a misapprehension about the knowledge that the people living in the area had of those who were involved in the various paramilitary activities.
"It was almost like `the elephant in the corner'," he said. "I mean, it was something there in people's lives, but it just was not discussed . . . "
There were mixed views, but most people did not talk about it because there was great fear - people were frightened of the army, of the police, homes were raided, people were interned, he said.
People did not share much, "because talk, I suppose, at that time could lead to internment, so that was just something that, while it was there and it was obvious, it was not talked about all that much".
Earlier, Dr Daly was briefly questioned in a similar vein by Mr Christopher Clarke QC, counsel to the tribunal, who asked him if he had any knowledge about the organisation of armed men in the city. The witness said he had none whatsoever.
Mr Clarke asked: "Do you know now who could tell the tribunal what the orders, if any, were given to the respective bodies of the IRA? Dr Daly said that he did not. He had read speculation in the media about what were the orders, but he had no personal knowledge of those events or of those organisations.
He added: "As a priest I felt I should minister to everybody and not show favour to anyone, and I think once one identified himself with a particular group of people, then you alienated other people, so my policy as a priest and as a bishop was to try to be open to all people."
Mr Clarke: "And both your book and your life make it quite apparent that you abhor violence from any source?"
Dr Daly: "Yes."