How does the author use text structures (pacing, setting character development) to create tension and build suspense?

Based on the three examples given in the question (pacing, setting, character development), I would definitely choose to focus on the story's setting to explain how the author creates tension and suspense. The best place to look for a great setting description in this story is the opening paragraph.  From that paragraph readers learn that a civil war is happening.  This is a critical fact, and it adds to the tension.  War is bad enough,...

Based on the three examples given in the question (pacing, setting, character development), I would definitely choose to focus on the story's setting to explain how the author creates tension and suspense. The best place to look for a great setting description in this story is the opening paragraph.  From that paragraph readers learn that a civil war is happening.  This is a critical fact, and it adds to the tension.  War is bad enough, but civil war is worse.  One country isn't being attacked by an outside source.  Instead, civil war means that the country is ripping itself apart.  Brothers are fighting brothers, families are split over which side to fight, etc.  The first paragraph also contains setting details that enhance the suspense of a war torn setting.  Readers are told that it is night, and the city is "enveloped in darkness."  That sounds way more suspenseful than being in the middle of a flowering field in bright daylight.  Next, the author fills the background with sounds.  Again, the chosen sounds are sounds that work toward enhancing reader stress.  The noises are all gun related.  

Around the beleaguered Four Courts the heavy guns roared. Here and there through the city, machine guns and rifles broke the silence of the night, spasmodically, like dogs barking on lone farms.

I don't want to claim that character is absent from the tension and suspense.  The author does include a few details about the sniper that work toward raising reader stress level. The second paragraph is a good place to look.  It's here that we are told that the sniper's eyes gleamed like the eyes of a "fanatic."  We are also told that the sniper is used to looking at death.  Being introduced to a fanatic killing machine in the second paragraph is definitely an early suspense builder for readers. 

As for the story's pacing.  The sniper is already being shot at by the fourth paragraph.  O'Flaherty has done a masterful job of creating a high stress environment for the reader in an incredibly short amount of text.