Panama's new provisional president Francisco Rodriguez was sworn in Friday, saying he hoped to improve relations with Washington despite President Bush's refusal to recognize him.

In a news conference following his inauguration at the Supreme Court, Rodriguez said he was open to improving relations if Washington respected Panamanian sovereignty."We hope that the U.S. government's initial position will change. We are very willing to make the maximum efforts to achieve a normalization of relations within the bounds of respect for our self-determination and, logically, only when there is a halt to (U.S.) interference in our country," he said.

But Bush said in Washington he would not recognize the new government headed by Rodriguez, 50, and Vice President Carlos Ozores Typaldos, while Gen. Manuel Antonio Noriega, the military strongman behind the government, was still in power.

"The United States will not recognize any government installed by Gen. Noriega. Our ambassador will not return and we will not have any diplomatic contact with the Noriega regime," Bush said.

Noriega did not attend the inauguration ceremony but was seen later leaving the presidential palace accompanied by his chiefs of staff.

Rodriguez acknowledged the "provisional nature" of his government which hoped to hold elections as soon as possible "as long as conditions exist to do so."

In a declaration Thursday naming Rodriguez president, the Council of State said new elections could be held within six months, but only if the United States ceased its "economic aggression."

Washington has ordered a series of economic sanctions in efforts to oust Noriega, who was indicted on drug charges in Florida in February 1988.

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Bush said Friday that he would take steps, "including the tightening of measures to deprive the illegal regime of funds that belong to the Panamanian people." He did not specify what the measures might be.

Rodriguez replied vaguely to a question about demands that Noriega leave power.

"We have said that . . . that is an internal question not subject to foreign positions and that it will be taken care of according to our laws and our constitution," he said, but added, "The possibility of discussing any aspect of these themes remains absolutely valid."

Foreign diplomats stayed away from the inauguration. Many ambassadors based here had already been recalled by their governments for consultation.

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