The famous and historic Easter Rising flag which flew over the General Post Office in Dublin in 1916 failed to sell at auction in New York on Tuesday.

The flag, which was expeted to fetch $700,000, was withdrawn at $400,000. The auctioneers say they are still optimistic about the prospects of arranging a private sale.

While standing beneath the flag, the commander-in-chief of the Dublin Brigade, James Connolly, uttered the immortal words: "For the first time in 700 years the flag of a free Ireland floats triumphantly in Dublin City."

The Bloomsbury auction house is selling the flag, which is the last one in existence from the period.

The 94-year-old linen flag was thought to have flown over the rebel headquarters until it was captured by the British.

Sergeant Thomas Davis of the Royal Dublin Fussliers took the flag down and kept it in his private possession.

He later gave it to his doctor, George St. George, who treated hm for his injuries.

A note from Davis, which is also being auctioned with the flag, reads: "Captured by British Troops at GPO Dublin, April 1916, and given to Doctor George St George by an old war veteran, Sergt Davis."

Since then, the flag has had several owners, ending up with a wealthy Dublin family who have now decided to sell it.

The 29-by-63 inch flag is a major Irish treasure.

"Any contemporary pennants, favours or armbands with the Tricolor design are extraordinarily scarce, with only a few surviving examples of any held in museum collections," a spokesman for Bloomsbury said.

Another lot which aroused considerable interest was the five-page, typed and signed manuscript article by John F. Kennedy written while he was a journalist.

In this article, titled "Emon de Valera Seeks to Unite All Ireland: Eire Premier Answers Dillon on Constitutional Rights," the future President discusses his beloved Ireland and its historic fight for independence from Britain.

Amongst the other items offered in Bloomsbury’s Irish sale are books by 20th  century cornerstone Irish writers such as W.B. Yeats, Seamus Heaney, Samuel Beckett and James Joyce, to name but a few.

Lot 1 is a very rare first edition of "Mosada," the first book by Yeats, while Lot 8 is a first edition of Joyce’s modernist masterpiece, "Ulysses."

The sale also included paintings by major Irish artists, such as "Sunbathers,"  an oil on canvas by Sir John Lavery inspired by the time Lavery spent in Palm Springs, CA, in the 1930s.

Among the more-modern artists was the powerful work by Louis le Brocquy titled "Trilogy on an Assassination, Reflection on Mourning and Reflection on Grief,"  which is a study on the reaction to the assassination of President Kennedy in Nov. 1963.