Understood diplomacy involves Ireland's leader (5)
I believe the answer is:
tacit
'understood' is the definition.
(I know that understood can be written as tacit)
'diplomacy involves ireland's leader' is the wordplay.
'diplomacy' becomes 'tact' (tact can mean diplomacy or sensitivity).
'involves' means one lot of letters goes inside another.
'leader' says to take the initial letters.
The initial letter of 'irelands' is 'i'.
'tact' going around 'i' is 'TACIT'.
(Other definitions for tacit that I've seen before include "Understood, not spoken or played" , "Attic? (anag)" , "Implicit, unspoken" , "Implied, unstated" , "Respect, admiration" .)