Church Says It Has Set Up Truce Talks : El Salvador: Army hard-liners are said to be opposed, wanting to finish the rebels off.

Roman Catholic Church officials said Friday that the U.S.-backed Salvadoran government and leftist rebels have agreed to church mediation for a cease-fire. But there was no official declaration of agreement from either side in the conflict.

The cease-fire appeal came from Pope John Paul II a day after the rector of the Jesuit-run Central American University and five other priests were brutally executed by unidentified gunmen allegedly wearing military uniforms. It also follows a week of the worst fighting in El Salvador’s 10-year civil war, with thousands of civilian and military casualties.

British journalist David Blundy of the Sunday Correspondent was among those killed Friday. Blundy, 44, was wounded by gunfire in the embattled Mejicanos neighborhood and died on the operating table at a local hospital.

Msgr. Gregorio Rosa Chavez, auxiliary bishop of San Salvador, said the Farabundo Marti National Liberation Front (FMLN) rebels and President Alfredo Cristiani have agreed in principle to church mediation.

“The president said he would take up this call but that he had to find a way to put a cease-fire into effect,” Rosa Chavez said.

Dismisses Idea

However, Vice President Francisco Merino, one of the hard-liners in Cristiani’s government, appeared to dismiss the idea out of hand, and diplomatic sources said the army’s high command would not agree to a cease-fire.

“The army’s attitude is that they (the rebels) started this war, and we’re going to finish the war,” a U.S. source said.

Merino told reporters, “A truce doesn’t make any sense if the FMLN (rebels are) defeated.”

There was no word about any cease-fire agreement from the rebels’ clandestine radio station.

The rebels launched the offensive in San Salvador and at least two other major cities Nov. 11 in an apparent effort to flex their military muscle for negotiations with the rightist Cristiani government.

Under heavy fire from the air force, the rebels appeared to be withdrawing Friday from some of the positions they had held in the capital since last weekend. However, it was unclear whether they were retreating from the capital or regrouping for a final attack.

Diplomats said rebel reinforcements were spotted moving toward San Salvador.

The guerrillas reportedly abandoned a public housing complex and the surrounding area in the Zacamil neighborhood just before the army began heavy aerial rocketing Thursday night. In the Soyapango neighborhood on Friday, however, the rebels had recaptured some ground that the army held the previous day. They remained firmly entrenched in the Mejicanos neighborhood.

“I think the situation is very fluid,” a Western diplomat said. “The rebels are playing a cat-and-mouse game with the army. It’s stupid when you’re under bombardment to stay still.”

The rest of the capital, meanwhile, began slowly returning to normal Friday, five days after the rebels imposed a nationwide traffic ban and called for a general strike. Several shops opened their doors for the first time, and traffic picked up on the main streets; the informal markets that normally overwhelm street corners began to creep back into existence.

A state of siege remained in effect. Church officials charged that security forces were taking advantage of the suspension in civil liberties to step up searches of churches and of the homes and offices of political leaders.

The government still controls all national news broadcasts under the state of siege. A dusk-to-dawn curfew remains in effect throughout the country, except for seven neighborhoods in the capital where a 24-hour curfew is in force. Those neighborhoods effectively have become free-fire zones.

Thousands of civilians have left their homes without anywhere to go. Relief agencies said churches used as shelters for the homeless were overflowing.

U.S. Ambassador William G. Walker said there was “little change” in the fighting in the capital and that the combat had spread to no new areas.

“There has been no significant guerrilla offensive in the last 24 hours,” Walker said Friday.

A military source said fighting remained heavy in San Miguel. There also was heavy fighting in Usulutan on Thursday.

Walker denied rebel charges on their clandestine Radio Venceremos that U.S. pilots were flying aircraft and conducting the air war against the guerrillas.

Walker also said the investigation is moving forward into the killings of the six priests, their cook and her daughter Thursday. He said the Salvadoran government’s U.S.-trained special investigative unit collected evidence at the site of the killings and that autopsies were performed on the bodies.

The ambassador said U.S. forensics specialists are reviewing the results of the autopsies.

“It’s only 30 hours after their deaths,” he said. “I think it’s a bit early to expect the case to be resolved, but I think things are going forward. I am convinced the institution of the armed forces wants to get to the bottom of this. The loose talk that the armed forces were involved is very damaging to their institution.”