Deadly Battles Continue in Panama : Fighting: 2,000 fresh troops bolster U.S. forces. Capital in near-anarchy.

PANAMA CITY —  Three days after launching a massive military operation in Panama, U.S. soldiers and Marines fought deadly street battles Friday with forces loyal to fugitive dictator Manuel A. Noriega as they struggled to restore order in Panama City.

The Pentagon dispatched 2,000 fresh troops from the 7th Infantry Division in Fort Ord, Calif., to supplement the 22,500 U.S. troops already in Panama, officials in Washington said.

At mid-day, a brief mortar attack on the headquarters of the U.S. Southern Command at Quarry Heights sent military officials and reporters accompanying them diving for cover under a table. And U.S. soldiers throughout the city came under repeated attack from snipers hiding in burned out high-rise buildings in a poor section of Panama City known as El Chorrillo.

One U.S. soldier was killed in action Friday, military officials said. After revising a previous count, they said the total number of military casualties since the operation began about 1 a.m. Wednesday stood at 21. In addition, two civilian dependents have been killed, officials said.

On the Panamanian side, U.S. officials said that 127 troops have been killed in action and 69 wounded. There has been no official count of civilians killed or wounded during the fire-fights and U.S. military assaults on Noriega’s military facilities near crowded Panama City barrios.

Officials at Santo Tomas Hospital in Panama City reported that 200 bodies are stored there, and Gorgas Hospital said it has 60 more. A spokesman appealed for medical supplies from Latin America and Europe because “the United States is only giving us bullets.”

Reports from Panama City indicated that three days into the largest U.S. military action since the Vietnam War, the capital of Panama remained in a state of near-anarchy. But U.S. officials in Washington said order was gradually being restored.

“We will continue to do what is necessary to help the people of Panama achieve the democratic society that they voted for and that they so rightfully deserve,” President Bush declared during a speech at the National Institutes of Health.

“That’s what our American soldiers are achieving--freedom and human liberty for those who have endured brutal tyranny and brutal oppression,” he said.

At a Pentagon news briefing, Army Lt. Gen. Thomas W. Kelly, director for operations for the Joint Chiefs of Staff, estimated that U.S. forces will need another 5 to 10 days to clear the city of hostile forces.

“It’s simply a difficult operation ...,” Kelly said. “There are a lot of places to hide” in Panama City.

White House Press Secretary Marlin Fitzwater said U.S. troops had secured the Legislative Assembly building, where Guillermo Endara, who was installed as president on a U.S. military base minutes before the invasion began, established his offices.

But as Ricardo Arias Calderon, one of Endara’s vice presidents, was leaving the Assembly building Friday, members of one of Noriega’s paramilitary Dignity Battalions shot at his car. Arias was uninjured but two of his aides were wounded, an Arias aide said.

Fitzwater said that U.S. forces also had secured the Foreign Ministry, the Health Ministry, the Finance Ministry and the Central Bank.

“We’re particularly concerned about the Central Bank and the Finance Ministry because they now can begin dealing with the money that will be needed for the economic development of the country,” Fitzwater said.

“We have not cleared this area out,” said Col. Mike Snell, escorting reporters on a tour of a neighborhood that housed the bombed-out headquarters of the Panama Defense Forces.

“There are still people with weapons around. To secure this area totally is going to take months of work and a combination of military and other forces,” he said. “Everybody downtown has a gun.”

The fighting between U.S. forces and Noriega loyalists near the headquarters of the U.S. Southern Command lasted for about an hour at mid-day.

Mortars rounds were fired from railway tracks below the headquarters at Quarry Heights, overlooking Panama City, sending military officials and reporters in a nearby building to seek cover under a table. Snipers were reported in nearby hills. In the Balboa Heights neighborhood not far away, a warehouse near the headquarters of the Panama Canal Commission was hit by mortar fire.

“Things like that can happen in a city that’s in the shape that Panama City is in,” said Kelly, who is director of operations of the Pentagon’s Joint Staff. “We are moving out to correct these things. Popping off one mortar round is a fairly easy thing to do.”

Asked whether the situation is under control, he replied: “I am satisfied it’s under control, yes.”

As the mortar fire struck Quarry Heights, the Supreme Court building a mile to the southeast was reported in flames. And from the vantage point of Rodman Naval Station across the Panama Canal from Quarry Heights, watchers could see rising plumes of brown and black smoke, while U.S. Army helicopters flew over the area, apparently searching for attackers.

Gen. Maxwell Thurman, head of the U.S. Southern Command, blamed Noriega’s Dignity Battalions--paramilitary militiamen often described by American officials as “thugs”--for much of the continuing violence.

“A number of (members of) Dignity Battalions are loose in the city,” he told a news conference at his headquarters, “and we are having to work hard to get those particular units under control.”

Kelly said of the Dignity Battalions: “They’re looting, sniping. They are lawless. There are some others who are lawless. However, we have been able to make some progress. We have the 82nd Airborne in the city moving from northeast to southwest; the 193rd Brigade with elements of the 6th MP Company moving from southwest to northeast. At some point they’ll link up.”

As U.S. troops made their way through the city, they were frequently greeted with the thumbs-up or V-for-victory sign.

“There were a lot of people cheering us on and clapping. They are on our side,” said Lance Cpl. Tracy Scott Jones, 24, a Marine from Texas.

Gen. Kelly in Washington said that U.S. planes with food, medicine and other necessary supplies will be dispatched to Panama by Saturday.

“We want to restore law and order, build a police force, take care of emergency food distribution, establish a night watch--and we’re doing that with helicopters that have searchlights on them,” he said.

“There are still people out at night trying to loot and do those kinds of things, and the helicopters last night were fairly successful in preventing that from being done,” Kelly said. “Protect persons and property, clean up the city and that’s from a sanitation standpoint. The city’s quite dirty,” he said.

He said that 10,000 Panamanian weapons have been located in three caches: in the PDF headquarters, at Ft. Cimarron, and at Rio Hato. Others put the cache at 9,326 weapons, 25 airplanes, 16 armored cars and five patrol boats.

“These are not a bunch of old French muskets lying in the basement of a building. These are, in many, many cases, new weapons still packed ... fully functional and ready to go once they’re cleaned,” Kelly said.

The numbers and condition of Americans who may be held hostage by Noriega loyalists remained unclear. CBS News producer John Meyersohn was still missing Friday after having been abducted Wednesday from the Marriott Hotel.

In soccer stadiums, churches and schools, thousands of refugees took cover from the fighting.

In the ravaged city, supermarkets and other stores were empty, victims of a binge of looting that cleared out furniture stores, car lots and nearly all other retail establishments, and garbage rotted on the streets.

Thurman said that $1-million reward that Bush has offered for information leading to the capture of Noriega “is producing a substantial number of bits of information on his whereabouts.”

But U.S. officials, who initially expressed optimism about finding the Panamanian leader, displayed no such views Friday, declaring that they had no idea when he might be captured.

Despite Noriega’s ability to elude his pursuers, support for the U.S. operation showed no signs of abating at home.

As poll after poll showed overwhelming public support, Senate Armed Services Committee Chairman Sam Nunn (D-Ga.) and Sen. John W. Warner (R-Va.), ranking Republican on the panel, emerged from a three-hour briefing with Defense Department officials expressing even greater support for the invasion than they had announced earlier.

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