By GLENN GARVIN

 A quiet but intense conflict between Panamanian and U.S. officials over how to
 commemorate the transfer of the Panama Canal later year this broke into the
 open Wednesday, as Panamanian authorities strongly denied reports among their
 own diplomats that they plan to invite Cuban leader Fidel Castro to the canal
 ceremonies.

 ``There is no truth in that, no truth in that, no truth in that,'' Harmodio Arias,
 Panama's deputy foreign minister, told The Herald. ``There is no truth in that
 whatsoever. These are ceremonies for the Panamanian and U.S. governments.''

 Arias' denial followed statements to reporters by Marcos Alarcon, Panama's
 ambassador to Cuba, that Castro will be invited to the Dec. 14 ceremonies
 because he is one of the 20th Century's ``most transcendental'' political figures.

 Other Panamanian diplomats said they had been told that their government
 planned to use the threat of an invitation to Castro to obtain a more prestigious
 head of the U.S. delegation to the ceremony. ``We want Bill Clinton or Al Gore,
 not the secretary of transportation,'' a senior Panamanian official said in
 describing the plan, according to one of the country's diplomats.

 Who will head the U.S. delegation has been a festering issue between
 Panamanian and U.S. officials for the past year. In Panama, where the transfer of
 the canal is regarded as the single most important event since the country won
 independence from Colombia in 1903, it has long been assumed that President
 Clinton would lead the U.S. entourage.

 That assumption, though, wasn't shared in Washington, where the transfer of the
 canal -- which was negotiated in 1978 -- is largely viewed as old business. The
 lack of interest in Washington was compounded by the fact that the canal
 transfer, by treaty, must take place on Dec. 31. U.S. officials began gently
 signaling their Panamanian counterparts more than a year ago that it was unlikely
 that Clinton would spend the eve of the millennium outside the United States.

 But even when Panama agreed to move official ceremonies to Dec. 14 to avoid
 the millennium conflict, it failed to stir enthusiasm in Washington. U.S. officials
 began floating the idea of former President Jimmy Carter, who negotiated and
 signed the 1978 treaty, as the official U.S. representative at the canal transfer.

 ALBRIGHT PLANS VISIT

 That idea failed to stir the Panamanians, and the current plan is for Secretary of
 State Madeleine Albright to head the U.S. delegation. But Panamanians
 nonetheless are holding out hope for Clinton, and Panamanian President Mireya
 Moscoso is expected to broach the topic when she visits Washington next week.

 ``We expect the U.S. delegation to be headed by President Clinton,'' Arias said
 Wednesday. In any event, he added, Fidel Castro will be not be invited, because
 it would create an embarrassing situation all around if the Cuban leader attended
 and was snubbed by U.S. officials.

 ``We have diplomatic relations with Cuba,'' Arias noted, ``and we do not want to
 create any situation that is not good for the relations we have with the Cuban
 government.''

 He said invitations will be issued to all the member nations of the Organization of
 American States, who witnessed the canal treaty signing; France, which
 sponsored the original, unsuccessful, attempt to build a canal across Panama;
 Japan, which sits on an international commission on the canal's future; and
 Spain.

 U.S. FORCES DWINDLE

 The tussle over the closing ceremonies comes amid major new reductions in U.S.
 military forces in Panama. Only 561 U.S. troops are still there, down from around
 10,000 just a few years ago. Within two weeks, the number will drop below 400.
 On Nov. 1, the U.S. will return Howard Air Force Base and Fort Kobbe to
 Panamanian custody, leaving no U.S. military presence on the canal's west bank.

 So few troops are left that the AM radio station that served U.S. forces leaves the
 air Friday. The military TV station operated by the Southern Command Network
 has eliminated its local programming and slashed its staff to two, just enough to
 manage satellite feeds. The TV station, an FM radio station, and the Fort Clayton
 post office are all scheduled to close Nov. 22.

                     Copyright 1999 Miami Herald