U.S. Praises Church’s ‘Fine Job’ on Noriega Issue : Diplomacy: Washington seeks to defuse the face-off. Talks go on but officials cite lack of progress.

The White House, in an effort to defuse the public face-off between Washington and the Vatican over the fate of deposed Panamanian dictator Manuel A. Noriega, Friday praised the Roman Catholic Church for “doing a fine job” in trying to resolve the issue and declared that negotiations continue “in a positive vein.”

The ousted dictator sought sanctuary in the papal mission in Panama City on Christmas Eve and has been inside it since. U.S. troops quickly surrounded the Vatican enclave and remain there, ready to seize Noriega should he emerge.

Despite their public statements, U.S. officials privately acknowledged there has been little progress on what to do about Noriega. But they said that they hope for a break in the standoff as the Vatican wearies of accommodating Noriega over the next few days.

The White House refused Friday to respond directly to a Vatican statement denouncing U.S. operations in Panama and ignored complaints over the playing of loud rock music outside the embassy in Panama City.

Reflecting the Bush Administration’s low-key approach, White House Press Secretary Marlin Fitzwater said the United States remains “hopeful for a resolution of the problem, and there are no fixed deadlines to be met.”

“The Vatican is doing a fine job,” Fitzwater said. “It’s a very difficult situation, very tense circumstances. They’ve been very cooperative with us and other countries in trying to resolve the issue.

“Our interest is in establishing a harmonious relationship,” he said, refusing to accept the characterization of the matter as a “stalemate.”

The State Department on Friday continued an all-fronts effort to induce the Vatican to turn over Noriega, researching the applicable canon law of the Catholic Church and exercising what one State Department official called “some very creative” legal thinking.

“Both sides are being very methodical looking at each argument,” one Administration official said of the negotiations. “We think we have a good relationship with the Vatican. They’re listening seriously. We’re using everyone we have in the chain--in Italy, in Panama--and we’re not conducting these negotiations by telephone.”

Besides the question of whether Noriega can remain at the Vatican mission, the negotiations also must resolve the question of what country would grant him asylum.

Fitzwater said Bush had not spoken with Pope John Paul II since the crisis began, or with other international leaders in recent days.

Noriega arrived at the Vatican’s embassy after 4 1/2 days on the run from invading U.S. troops. The Vatican has granted him only temporary refuge.

The United States has maintained that Noriega is a criminal fleeing prosecution, rather than a refugee fleeing political or religious persecution and that he therefore is not entitled to the protection the Vatican traditionally has given the persecuted. The Vatican has not addressed this issue publicly.

Noriega faces drug-trafficking and money-laundering charges in two federal courts in Florida. However, David Runkel, Atty. Gen. Dick Thornburgh’s chief spokesman, acknowledged for the first time Friday that some problems could arise in any prosecution of Noriega because of national security issues. Noriega once served as a CIA informant.

Runkel, who previously has sought to minimize those concerns, said that Justice Department guidelines calling for a review of sensitive national security documents before indictment in such cases “may not have been completely followed” in the Noriega indictment. His statement followed comments Thursday by Richard D. Gregorie--the former federal prosecutor in Miami who brought the case against Noriega and his associates in February, 1988--that the CIA never allowed him to see any secret files on Noriega’s past association. “What I saw were essentially news clippings,” Gregorie said.

Runkel said that “it now appears there was some rush” to bring the Noriega indictment, and for that reason not all pertinent documents of the intelligence community were reviewed by the prosecutors.

“I haven’t determined the reason for the rush,” Runkel said. “As a result, there is now or will be a review of national security information. Our people believe the indictments are solid.”

But Gregorie, reached by phone after Runkel’s briefing, denied that there was any rush to indict Noriega.

In Panama, meanwhile, the U.S. military held 5,220 detainees in prisoner-of-war camps and prepared to conduct hearings to determine whether each of the detainees should continue to be treated as a belligerent.

Among those believed held are former officers of the Panama Defense Forces, civilians seized while sniping at American forces and a close adviser to Noriega, Mike Harari, 62, a former Israeli military officer. Harari was said to have trained Noriega’s personal security squad.

Tribunals of three American military officers are expected to determine whether a detainee should be labeled a “belligerent” and held, or considered a non-belligerent and released. An Administration official said military lawyers in Panama are unlikely to complete the task until after order has been further restored.

As U.S. troops withdraw from Panama, one Administration official said, the United States will negotiate with new Panamanian President Guillermo Endara to turn prisoners over to his government.

Gerstenzang reported from Corpus Christi, Tex., and Healy reported from Washington. Times staff writer Robin Wright contributed to this article.