Russia-Latvia Clash Brings Worst Fears Into the Open : Baltics: Military base dispute prompted combat alert from Moscow. But restraint prevailed; nobody was hurt.

It was a scenario many of Russia’s neighbors dread, the kind of incident that, in the worst of imagined cases, might bring Russian troops marching in to occupy a tiny country.

According to officials on both sides, that is what nearly happened in Latvia this week when a zealous local official sent the militia to surround a Russian military compound, arrest two Russian generals and pack them off in handcuffs to be summarily deported.

Before Latvia apologized Tuesday, Russia’s Defense Ministry had put an airborne division on combat alert and warned Latvian President Guntis Ulmanis that troops were ready to cross into his country in 15 minutes if the militia stood its ground.

Retreat came swiftly, nobody got hurt and the official who started it all was fired.

But the scuffle highlighted the insecurities that have prompted some newly independent nations on Russia’s western flank to seek protection in NATO--an appeal that prompted the 16-nation Western alliance Monday to offer them a “Partnership for Peace” that stops short of full membership.

The strong showing of ultranationalists in Russia’s parliamentary elections last month has especially alarmed the three Baltic states--Estonia, Latvia and Lithuania--seized by the Soviet Union in 1940.

The incident in Latvia could also lend weight to Russian President Boris N. Yeltsin’s appeal--expected to be repeated in talks this week with President Clinton--that the West allow his country a special role in policing former Soviet areas, especially to protect Russian-speaking citizens.

Russia’s role in the partnership and in the former Soviet Union will be on the agenda when Clinton arrives here tonight for a summit. The two leaders will also discuss Russia’s scheduled withdrawal of 20,000 former Soviet troops still deployed in Latvia and Estonia.

The United States has been pressing Yeltsin to keep the promised withdrawal on track toward its year-end completion; it hopes that will defuse nationalist tensions in the two Baltic countries and avoid clashes like the one that occurred this week in the Latvian capital of Riga.

There, Andrejs Rucs, the top official of Riga’s Vidzeme district, ordered Latvian militia Sunday to surround a Russian army compound that includes a stadium, a swimming pool, a military housing agency and a quartermaster’s office.

Rucs told Russia’s Interfax news agency that he wanted the militia to seize documents from the housing agency. He said he thought they might prove that retiring Russian servicemen were illegally obtaining Latvian residence permits to avoid going back to Russia.

Fearing a forcible seizure of the compound, which was not yet scheduled to be turned over to the Latvians, three Russian generals arrived Monday to meet with the official. Negotiations broke down when the Russians suggested putting their own armed guards around the place.

At that point, Rucs ordered the militia to seize the three generals, though he has no arrest powers. One general was soon released because he “behaved politely,” Rucs explained to reporters, while the other two were handcuffed and whisked through the woods in a minibus toward the Russian border. Talks in Riga on the pullout of Russian troops were suspended.

But after the Russian combat alert and a stern protest by Russian Foreign Minister Andrei V. Kozyrev, who called the incident a “gross provocation,” a bewildered President Ulmanis moved against the local official; the generals were freed unharmed in Latvia.

In an all-night session, Latvia’s Cabinet stripped Rucs of his post. The troop withdrawal talks resumed. Latvian officials breathed a sigh of relief that Russia had reacted with restraint.