U.S. Ready to Improve Ties, Bush Says : Diplomacy: Regardless of who wins, the President says, Managua must commit itself to democratic principles.

President Bush said Sunday that if the Nicaraguan elections are certified as free and fair, the new government in Managua “will find a better climate” in the United States--so long as it adheres to democratic principles.

A free and fair election would be “very, very helpful,” the President declared Sunday morning, just hours after balloting began in Nicaragua.

“A democratic process is important,” Bush added. “But what follows--in terms of freedom of the press, freedom of institutions there, freedom to protest, freedom to speak your mind--is also important.”

The President made his comments just outside Camp David, Md., at a joint press conference with West German Chancellor Helmut Kohl that was dominated by questions about German reunification.

In the Nicaraguan elections, the Bush Administration has steadfastly backed those who oppose the leftist Sandinista government. But few outside observers expected the opposition, led by Violeta Barrios de Chamorro, to win in Sunday’s balloting.

Hence, Bush’s remarks seemed targeted directly at incumbent President Daniel Ortega, a longtime Washington nemesis.

Bush said that “one clear area where there should be change” in policy is in Managua’s support for the Faribundo Marti National Liberation Front (FMLN), the leftist guerrilla organization in neighboring El Salvador.

In the closing days of the campaign, Ortega stated publicly that his government would not provide arms to the Salvadoran guerrillas.

The United States and Nicaragua have clashed for years over whether the Sandinistas have supplied arms to the Salvadoran rebels, a controversy to which Bush referred Sunday.

“We’ve had difficulty because Nicaragua has said that they’re not giving arms to the FMLN. Now they say, ‘Well, if we’re elected, we won’t give arms to the FMLN,’ ” he said.

“I would love to see Nicaragua living peacefully within its own borders, not trying to subvert its neighbors and giving its people a shot at democracy,” Bush concluded. “And once all that was sorted out . . . I can guarantee you there’d be better relations with Nicaragua.”