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U.S. MILITARY SAYS PROGRESS MADE IN RESTORING ORDER IN PANAMA CITY

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Despite continued clashes with irregular troops of fugitive Gen. Manuel Noriega's Dignity Battalions, U.S. military commanders reported significant prog-ress Saturday in ending resistance and restoring order in Panama City.

Gen. Maxwell Thurman, commander of the U.S. Southern Command, said at an afternoon briefing that members of the Panamanian Defense Forces increasingly were laying down their arms."I would suggest to you that the laying down of arms begins to tell you that we're making significant progress," Thurman said. "I think the Panamanian people are waiting for our arrival, and we've noticed that people in the barrios and streets and neighborhoods are beginning to clean up debris."

Thurman's report followed an earlier report of increased fighting as Dignity Battalion militia members loyal to Noriega harassed U.S. troops with small arms and mortar fire.

At the United Nations Saturday, the United States, Britain and France used their veto power to soundly defeat a demand by non-aligned countries to have the U.N. Security Council condemn the U.S. intervention in Panama.

Canada was the fourth country in the 15-nation council to vote against the resolution, which also asked for the withdrawal of U.S. troops. Ten countries voted in favor of the resolution and one country, Finland, abstained.

CBS News producer Jon Meyersohn, 33, who was kidnapped from the Marriott Hotel in Panama City on Wednesday, was released by his Dignity Battalion captors after CBS News had made numerous appeals to government and military officials about his safety, said Tom Goodman, a CBS spokesman in New York.

Meyersohn was apparently released along with Doug Mullen, an executive of GTE in Panama who was also captured by the Dignity Battalions, Goodman said.

Thurman said troops also had freed nine employees of Evergreen Airlines who had been held hostage. He said they were not badly injured but had been beaten and stripped of their clothes and shoes and left in their underwear. He also said Panama Canal operations ran on schedule Saturday.

In Washington, a Pentagon official said the United States airlifted about 2,000 additional troops to Panama to help 24,000 American soldiers already there "restore law and order" and battle pro-Noriega resistance.

As the largest U.S. military offensive since Vietnam entered its fourth day, the Pentagon spokesman said the death count among U.S. troops had risen by four. A total of 25 American serviceman have been killed since the invasion started early Wednesday morning, 241 U.S. troops were wounded and one soldier was missing, he said.

In addition, two U.S. civilians were killed. The spokesman said 139 members of Noriega's Panama Defense Forces had been killed, 95 wounded. Thurman said about 2,250 people have been taken prisoner and that about 15,500 weapons and 33 armored vehicles have been confiscated.

Artillery fire and explosions continued to ring throughout several parts of the capital as U.S. Cobra helicopters hovered overhead trying to track belligerent forces.

Some stores, closed because of the fighting and widespread looting, were open in the capital for the first time since Wednesday and long lines quickly formed. But the looting and lack of replacement supplies left their shelves depleted and stocks ran out within hours.

Widespread looting continued in Panama City as citizens took up shotguns, machetes and pistols and erected barricades to protect themselves from members of Noriega's Dignity Battalion, a paramilitary force recruited from among Panama's poor and criminal elements as a personal police force for Noriega.

Thurman said that officials continued to swear in as police officers former PDF members who agreed to support the new government. He said that 1,000 people showed up Saturday for 750 uniforms available for police officers. He said progress was being made in restoring regular government functions and that crews were standing by to begin clean up operations.

Thurman, in a highly upbeat report, also said U.S. forces had taken the presidential palace and that a loyalist garrison there had surrendered.

He said the success "augers well for the future," but "it does not mean that we're over and done."

He said, "People are cooperating with us in identifying Dignity Battalion operatives."

He cited the case of a filling station owner who he said "has turned in three sets of Dignity Battalion people" whom he held at gunpoint until U.S. forces arrived.

The U.S. Southern Command, through radio broadcasts, continued to call on Panamanians to turn in all types of arms, pistols and grenades. The price they are offering range from $25 for a grenade to $150 for an automatic weapon to $5,000 for turning in any cache of arms. The announcement said payment would be immediate and in cash.

A Noriega telephone hotline also received tips on Noriega's whereabouts, but the elusive ousted dictator remained at large despite a $1 million bounty on his head.

Defense Secretary Dick Cheney was at his office on Saturday to keep tabs on developments in Panama as well as the bloody revolution that ousted Romanian dictator Nicolae Ceausescu. President Bush was at Camp David, Md., where he worked on a Christmas Eve address to the American military men and women around the globe, including a "special message" for those in Panama.

Bush planned to tape the Armed Services Network broadcast at the Pentagon on Sunday, where he also was to receive an extended briefing on the Panama fighting.

Bush was briefed by telephone Saturday by national security adviser Brent Scowcroft on both Panama and Romania.

The president plans to go to a Houston hospital on Dec. 31 to visit soldiers wounded in Panama.