Panama: The Road to Recovery : U.S. Gets Cleanup Bill: $600 Million : Rebuilding: The Endara government’s estimate is much higher than U.S. projections. European governments freeze Noriega’s accounts.

Panama’s new government estimated Wednesday that the damages from the recent U.S. invasion and the looting that followed in Panama City and other urban areas will total $600 million, substantially more than U.S. officials believe any cleanup will require.

The preliminary estimate was delivered to U.S. officials by Guillermo Chapman, the emissary sent by President Guillermo Endara to represent the new government in economic aid talks with the United States. Chapman arrived here Wednesday for several days of discussions.

U.S. officials declined to comment on the Panamanian figure, except to confirm that it is significantly higher than Washington’s own preliminary estimates. The Bush Administration is expected to send a team of U.S. officials to Panama soon to make its own assessment.

Meanwhile, U.S. military authorities in Panama turned over $5 million to the new Panamanian government Wednesday in what officials said was one of several bundles of cash--presumably drug money--that American soldiers found in the headquarters of deposed dictator Manuel A. Noriega.

And governments in Switzerland, France and other major industrial countries, responding to a U.S. request, froze bank accounts that Washington says Noriega used as a depository for drug-related income.

The amounts on deposit in the French banks alone totaled between $3.4 million and $4.3 million. French police said they managed to intercept the funds just before they were to be moved to Luxembourg.

Besides Switzerland and France, Washington also has filed freeze requests in Luxembourg and Britain. U.S. officials said that such assets are frozen upon request under U.S. treaties with these countries, but it still is unclear where the funds ultimately will end up.

Despite the initial difference of opinion on how much damage the invasion and looting in Panama involved, Wednesday’s discussions apparently showed the two countries generally thinking on the same track about what Panama will need to get back on its feet.

Officials said Chapman indicated that the Endara government will try to hammer out a long-term economic restructuring program with the International Monetary Fund and the World Bank designed to cut government spending and reduce featherbedding in the economy.

They said Chapman also pledged that the new government will liberalize trade and convert government-owned industries to private corporations, as Endara had promised before last May’s elections. Endara apparently won that election by a wide margin, but Noriega blocked an official vote count.

The inter-agency task force that the Administration has established to review the situation in Panama has been meeting all week but is not expected to come up with any firm recommendations until early January.

Bush Administration officials have said the United States hopes to serve as a “facilitator” in helping Panama obtain loans from the IMF and World Bank and renegotiate $539.1 million in arrears that had built up under Noriega on previous loans from these institutions.

Washington also hopes to help the Endara government re-establish Panama’s once-flourishing business as an international banking center. However, that job may prove difficult. Much of Panama’s success in banking had come from drug-related money laundering.

“What we’re trying to do is take a measured look at what the U.S. government’s responsibility and role should be,” one official here said. The panel, whose co-chairmen are officials of the State and Treasury departments, is expected to continue meetings all week.

The U.S. Agency for International Development bases its warehousing facilities for emergency aid to Latin America in Panama City. U.S. officials said that factor has speeded the process of delivering U.S. aid.

Tents, food and some medical supplies already were on hand when U.S. military forces received approval to begin distributing them earlier this week. Additional shipments have been flown in by Air Force transports. Washington is sending about $25 million in emergency disaster relief to Panama City.

Initial supplies of an expected 284 tons of staples, such as baby food, beans, rice, coffee, flour, sugar, cooking oil and powdered milk, arrived Tuesday, and the Pentagon said that the final 70 tons of 768 tons of ready-to-eat meals arrived there Wednesday.

At the same time, the Treasury Department continued the painstaking process of unfreezing Panamanian assets that were embargoed in March, 1988, when the United States imposed sanctions on the Noriega government.

U.S. officials announced that they have completed procedures for transferring about $188 million in U.S. government payments for Panama that Washington had been holding in escrow in the Federal Reserve Bank of New York, enabling Panama now to draw the money virtually at will.

But legal technicalities are proving more cumbersome on another $186.9 million in other monies that also have been held up, including $31.7 million in Panamanian funds on deposit in U.S. banks and $155.2 million in taxes and other payments owed Panama by American firms.

U.S. authorities are still working on procedures for freeing those funds. Officials said they expect to complete the work needed to unlock the funds within the next two weeks.

The Bush Administration also is expected to ask Congress to restore several trade preferences for Panama that were suspended when the U.S. sanctions were imposed.