Nicaragua pulled out some of its tanks and troops surrounding the U.S. Embassy in Managua Thursday night, but several armored personnel carriers remained in place, witnesses said.

The move took some of the tension out of a dispute with the United States that broke out Thursday morning when U.S. troops that have intervened in Panama surrounded Nicaragua's embassy there.Military sources said Nicaragua had reduced its force in response to a similar move by U.S. forces surrounding Nicaragua's embassy in Panama.

"They removed some of their armored vehicles. We are reciprocating and have withdrawn our tanks and are reducing our military presence," an army lieutenant outside the U.S. Embassy said.

Witnesses said several tanks and some soldiers left positions around the heavily-fortified U.S. embassy compound late Thursday night.

But at least three armored personnel carriers remained posted around the embassy perimeter and the road outside the embassy was blocked by about 20 police, the witnesses said.

The government earlier assembled an array of Soviet-made tanks, armored vehicles and anti-aircraft guns around the embassy.

A U.S. Embassy spokesman said embassy staffers were working normally. Another embassy employee said staff could enter and leave freely.

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