ARMY HALTS FIRE

                 Rebels Seize Santiago and Santa Clara-- March on Capital

                 By R. HART PHILLIPS

                 Special to The New York Times

                 Havana, Friday, Jan. 2 -- Fulgencio Batista resigned as President of rebellion-torn Cuba
                 yesterday and fled to exile in the Dominican Republic. The rebel forces of Fidel Castro moved
                 swiftly to seize power throughout the island.

                 Dr. Manuel Urrutia, Senor Castro's own choice, appeared likely early this morning to become the
                 provisional President. Col. Ramon Barquin, who had been imprisoned for conspiring against the
                 Batista Government, was brought here by military plane from the Isle Pines penitentiary and named
                 chief of the joint staffs.

                 Colonel Barquin immediately sent out a call to Senor Castro to come to the capital with Dr.
                 Urrutia and set up a new Government. The rebel leader and his forces had entered Santiago de Cuba
                 late yesterday and had taken over the Moncado army post without firing a shot. About 5,000
                 soldiers there surrendered.

                 Key Cities Captured

                 Truckloads of soldiers moved into Havana last night to maintain order in conjunction with militia of Senor
                 Castro's 26th of July Movement, who were also patrolling the streets armed with machine guns and
                 rifles.

                 The rebel forces forged ahead throughout the island. While some insurgents spread out from
                 Santa Clara, capital of Las Villas Province, which they had seized Wednesday, other groups
                 announced the capture of Camaguey.

                 General Batista led an exodus from Cuba that has reached a total of perhaps 400 persons fleeing by
                 ship and plane to the United States and the Dominican Republic. They included key political
                 and military leaders and their families.

                 Piedra Is Rejected

                 Calling his military chiefs together early yesterday at Camp Columbia, army headquarters, General
                 Batista, strong man of Cuban politics for most of the period since 1933, declared he was resigning "to
                 prevent further bloodshed."

                 He left behind a junta headed by Gen. Eulogio Cantillo, recently the commander in Oriente
                 province, the center of the Castro revolt. The junta immediately designated Dr. Carlos Piedra, the
                 oldest judge of the Supreme Court, as provisional President in accordance with the Constitution of
                 1940.

                 General Cantillo took over as chief of staff of the army. Dr. Gustavo Pelayo was designated Premier.

                 But Senor Castro declared that his insurgents would remain on a "war footing" and refused to accept the
                 designation of Justice Piedra as provisional President. The Supreme Court refused to administer the oath
                 of office to the Justice.

                 The rebel leader called a general strike for today in protest against the Piedra
                 regime. He demanded that Dr. Urrutia, former judge of the Urgency Court of
                 Santiago de Cuba, be installed as the provisional President, as he had proposed
                 a year ago.

                 The Cane Planters Association of Cuba, speaking for the island's pivotal sugar
                 industry, last night issued a statement supporting Senor Castro and his
                 movement.

                 General Cantillo, as army chief, issued a cease-fire order to troops throughout
                 the island. Political prisoners were being freed in Havana and the interior.
                 Yesterday afternoon several hundred in Principe Fortress in Havana were
                 released.

                 Restaurants Barricaded

                 Since it was New Year's Day, commerce and industry were halted.
                 Restaurants, cafes and grocery stores closed their doors as rioting began. Mobs
                 broke windows and looted some stores. The police fired on the mobs and a
                 number of persons have been killed and wounded.

                 A mob set fire to the plant of El Tiempo, a newspaper owned by Senator
                 Rolando Masferrer. Senator Masferrer, an intimate friend of General Batista,
                 had a private army of some 2,000 operating in Oriente Province. They were
                 accused by the inhabitants of many killings and tortures. The office of Dr.
                 Rafael Guas Inclan, elected Mayor of Havana in November, was burned.

                 As the news of the fall of the Government spread early yesterday, the public
                 poured into the streets.

                 The black and red flag of the 26th of July Movement, headed by Senor Castro,
                 appeared on automobiles and buildings. Cars raced through the streets with
                 horns blowing.

                 Mob Destroys Gambling Casino

                 Firing broke out near the docks, but details were not immediately available. A
                 mob destroyed the new gambling casino in the Plaza Hotel.

                 Amleto Battisti, owner of the Sevilla Biltmore Hotel and its casino and a
                 Representative in Congress, took refuge in the Uruguayan Embassy.

                 Armed young rebels seized the radio stations. Broadcasts called on the people
                 to remain calm and orderly.

                 Crowds also attacked the Banco de la Construccion in the Central Plaza.

                 Latin-American embassies were crowded with officials who had taken political
                 asylum. Hundreds of others were hiding in the city.

                 In the afternoon the National Association of Newspapermen declared a strike
                 until the situation was clarified. But several Havana newspapers had published
                 extra editions.

                 Cruise Ships Leave Port

                 United States Ambassador Earl E. T. Smith warned American citizens to take
                 "appropriate precautions." Two big cruise ships with many American tourists
                 aboard, in Havana harbor for the New Year's holiday, left yesterday.

                 Many tourists were stranded here by the swift fall of the Government. Plane
                 service was curtailed for a time and ships arriving at Havana were unable to
                 dock owing to the strike. The United States Embassy said it was trying to
                 arrange transportation for a large number of tourists and some students who
                 had asked its assistance.

                 Later, it was announced that it was arranging for a ship to come from Key
                 West today to pick up stranded citizens.

                 City Almost Deserted

                 Restaurants and other establishments that closed during the rioting did not open
                 because personnel heeded the strike call. However, most hotels supplied their
                 guests with meals.

                 The resistance movement told the public that the strike would not include
                 telephones, broadcasting and power services.

                 At night Havana was almost a deserted city, the inhabitants remaining in their
                 homes. Only a few automobiles moved on the streets. The mobs had
                 disappeared.

                 In the luxurious Miramar residential section, a few of the homes of high officials
                 were looted, including that of the chief of the national police, Pilar Garcia, who
                 fled in the morning.

                 No Patrolmen Seen on Street

                 No policemen on foot were seen patroling the streets of Havana. Some patrol
                 cars drove about. The lack of display of force was in startling contrast with the
                 number of armed forces that patrolled the city and guarded strategic points
                 heretofore.

                 Later last night, troops and militiamen took over the task of guarding the city.

                 Eusebio Mujal, secretary general of the Confederation of Cuban Workers,
                 sought asylum in the Argentine Embassy. Senor Mujal and his labor leaders
                 strongly supported the Batista regime.

                 Montevideo Legation Seized

                 Montevideo, Uruguay, Jan. 2 (Reuters)--Cuban exiles occupied the Cuban
                 legation building here tonight after it had been handed over by the Consul.
                 Carlos Baruff, representative of the Cuban rebel leader, Fidel Castro, is
                 expected here from Buenos Aires tomorrow.