When the alarm is activated the indercators only flash. No horn is sounding. Does any one know which side the siren is on.and does the connection have two or three wires .

Sorry to be a downer but can you be a bit more specific?

D1 came in 2 main variants 200Tdi 1989 ~ 1994 and 300Tdi 1994 ~ 1998 mixture of genuine and aftermarket alarms/immobilizers etc,.

Can you help us out with some specifics and maybe images?

It all depends on the security system that is fitted, a factory fitted alarm with a two button fob with a battery backed-up electronic sounder fitted to the 95MY D1 onwards, or the early D1 system with a single button (or even with out a fob) fitted with the single horn style of sounder.
So positions, when the vehicle left the factory the electronic sound is under the bonnet by the coolant reservoir, the single horn is behind the grill.