Panama Kiss, Kiss, Bang, Bang

For General Manuel Antonio Noriega, the crisis seemed to grow more desperate by the day. As Panama suffered through a worsening cash crunch and continuing street protests, the strongman faced a revolt by some officers of the once unswervingly loyal Panamanian Defense Forces. The rebellion erupted shortly after dawn last Wednesday: residents living near Noriega's Panama City headquarters heard the crack of gunfire from inside the iron-gated compound. Reports of a coup quickly swept the capital. The rumors grew until 9:30 a.m., when Noriega appeared at a window and waved. Wearing a white guayabera sport shirt, the general later ventured out of the building to talk with reporters. Asked what the gunfire had been about, he pressed his fingers to his lips and replied, "Just kisses. Kisses for journalists."

But as Noriega's frozen smile suggested, the shots could not be dismissed so easily. Led by five officers, including Colonel Leonidas Macias, chief of the national police, the mutiny marked a milestone in an opposition drive, supported if not engineered by the U.S., to force Noriega from power. "This explodes the myth that the armed forces are united behind Noriega," said a knowledgeable Panamanian in Washington. "Now he can't be sure of anyone's loyalty. The thugs have started to fight among themselves."

Even as he publicly shrugged off the coup attempt, Noriega was negotiating with the U.S. State Department and domestic opposition leaders for a deal that would allow him to step down with some assurances of safety. William Walker, Deputy Assistant Secretary of State for Central America, flew to Panama City with Deputy Legal Adviser Michael Kozak. After a promising start, the talks stalled when the emissaries refused to guarantee that President Reagan would sign an Executive Order quashing drug-trafficking indictments that two grand juries brought against Noriega last month. In Washington officials denied reports that White House Chief of Staff Howard Baker was prepared to enter the talks as Reagan's personal envoy.

Noriega also sought a deal with the National Civic Crusade, a coalition of business and professional groups that has demanded the general's departure. In return for stepping down as military chief, Noriega apparently wants to remain in Panama and to have a voice in reshaping the armed forces and the government. Crusade members insist that the general leave the country permanently.

Heightening the pressure on Noriega's opponents, Panama declared a national "state of urgency" to boost the government's power, but Panamanians were pointedly assured that their constitutional rights would not be suspended. The decree said the country was locked in an "undeclared war" with the U.S. and with political foes at home.

On one point all sides agreed: Noriega's five-year reign as Panama's strongman seems to be near an end. Support for the general has withered rapidly since President Eric Arturo Delvalle tried to dismiss him as chief of | the Defense Forces last month. When Noriega flexed his muscle by engineering Delvalle's ouster instead, Washington responded by heeding Delvalle's plea for a freeze on some $50 million in Panamanian funds in U.S. banks and imposed other sanctions as well. The moves forced Panama to shut its banks, slowing down a once fast-paced economy and driving thousands, from doctors to dockworkers, into the streets to demand Noriega's departure.