US-PANAMA DRUG CENTER FALLS THROUGH

PANAMA CITY, Panama (AP) -- Five months after the United States and Panama
announced they would build a multinational anti-drug center on the rolling
grounds of a U.S military base, the deal appears to have fallen through.

President Ernesto Perez Balladares said Thursday the anti-drug center would
amount to a continued U.S. military presence in Panama, despite his previous
insistence it would not.

The two countries began discussions in 1995 about a center to monitor
anti-drug operations throughout the Americas, and negotiations formally
began last year.

The center would be built on the grounds of Howard Air Force Base, which the
United States must abandon in 1999 under 1977 treaties signed by
then-President Jimmy Carter and Panamanian strongman Gen. Omar Torrijos.

Since 1992, the United States has monitored anti-drug operations from a
small building on Howard.

The announcement in December that the two sides had reached an agreement
sparked strong opposition from many Panamanians who want U.S. soldiers out
in 1999, and considered the center to be an extension of the nine-decade
U.S. military presence in Panama.

Perez Balladares assured his critics that the center wouldn't amount to a
U.S. military presence. But he told a group of students on Thursday that
Washington was trying to get a military base without paying for it after 1999.

Some analysts believe Perez Balladares is trying to quiet critics in advance
of an Aug. 30 referendum on whether to change the constitution to allow his
re-election next year.

Despite the shift, Foreign Minister Ricardo Arias said: ``We continue to
explore the possibility of a center.''

U.S. Ambassador William Hughes said the United States isn't seeking to
maintain troops in Panama.

``We can, and we do, project our power in the entire world without these
bases,'' Hughes said.

Checked-by: Melodi Cornett