PANAMA SAYS IT CAN HANDLE COLOMBIAN GUERRILLAS

PANAMA CITY, Panama -- Panama can handle any guerrilla threat in its
jungles bordering Colombia without U.S. military help despite U.S.
concerns the American pullout at the end of this year could jeopardise
Panama Canal security, officials said on Friday.

The United States must hand over the Panama Canal and withdraw its
troops from the isthmus by Dec. 31, ending a 96-year military presence.

U.S. politicians and officials have expressed concern in recent weeks
that the departure could encourage Colombian rebel groups to become
more active in the deep, inaccessible rainforests of Panama's Darien
region.

Reports abound that the Colombian Revolutionary Armed Forces (FARC)
cross the 149 mile (240 km) border into Panama to conduct patrols and
training missions. But Panamanian officials and local press say U.S.
concerns are groundless and possibly motivated by their desire to
keep troops in Panama beyond the Dec. 31 deadline.

``Panama can handle the border situation by itself. We should never
underestimate the situation with the Colombian rebels ... but we
should also definitely not create this unnecessary alarm that has come
from outside of Panama,'' Interior Minister Mariela Sagel told Reuters
in a telephone interview.

``You have to separate what is being said outside Panama and what is
really happening here ... there hasn't been a serious confrontation
in the Darien region in more than two years,'' said Sagel, adding
that most violence in the region resulted from occasional bandit and
paramilitary attacks on villages.

Panama has increased a military border police force to 1,500 and
armed them with assault rifles and heavy machine guns, as well as
radar and other intelligence-gathering equipment since the last
violent incident two years ago, Sagel said.

Obscured by conflicting reports, the intentions of the FARC, and
other rebel groups in Panama are unclear.

U.S. anti-narcotics chief Barry McCaffrey said the FARC aims to incite
border conflicts with all of the countries surrounding Colombia,
including Panama, after 2000.

But a FARC spokesman told a reporter in Panama recently that his
organisation had no grievances with Colombia's neighbours.

As for the Panama Canal, officials feel that the American departure
will perhaps even strengthen security because the canal will be less
of an ideological target.

``If you are going to make a statement, it will be against one of the
big nations, but is there any point in making a statement against
Panama? What kind of sympathy is a group going to get when the
principle resource of a small developing economy is blown up?'' PCC
Chief Financial Officer Ricaurte Vazquez told Reuters.

Last September, Panama and the U.S. abandoned talks to create a
multilateral counter narcotics centre (MCC), which would have allowed
more than 2,000 U.S. troops to stay on at Howard Air Force base to
conduct anti-drug operations.

The talks broke down when Panama would not allow U.S. troops to
conduct non-drug-related military operations from the base, and would
also allow them to stay only for a renegotiable term of three years,
conditions the United States did not accept.

But recent reports by local press say U.S. officials have once again
raised the issue with the winner of the country's May 2 presidential
election Mireya Moscoso, who has not given a clear answer as to
whether she will listen to new proposals.