LACANJA, Mexico - The battle to save North America's last large pocket of tropical rain forest is shattering old notions of political correctness -- pitting leftists against environmentalists and Zapatista rebels against other Indians.

  Lacandon Indians, who have lived for centuries in the Montes Azules jungle near the Guatemalan border, oppose the farms being slashed into the nature reserve by Indian settlers from the nearby highlands.

  The Zapatista rebels back the settlers, arguing that Indian farmers are the best protectors of the rain forest. The rebels accuse environmentalists who oppose the squatters' movement of being fronts for corporate plans to exploit jungle resources.

  At stake is a major source of fresh water in a parched nation, the last jungle in North America big enough to support jaguars, and the habitat of 340 species of birds and dozens of endangered plants and animals.

  The conflict is also raising worries about violence between Indians, and the ideological atmosphere has become so envenomed that some environmental groups have walked away from the debate -- despite their fears that settlement is threatening the jungle's viability.

  RHETORIC

  The rhetoric of Indian rights and anti-globalization are being used to justify deforestation, which environmentalists argue will benefit the Indians little because the denuded land can yield crops for only a couple of seasons.

  On a recent afternoon in the 1,290-square-mile Montes Azules -- Blue Mountains -- the tall canopy of cedar, mahogany and cypress trees was shrouded in smoke and dotted with farmers' fires.

  Huge fire-blackened trunks of cypress trees loomed out of recently cleared fields.

  But the effects of human settlement are felt even in areas where mammoth Guanacaste trees are still shrouded in vines and bromeliads, where streams run crystal clear amid enormous ferns, palms and huge wild elephant's ear plants.

  SILENT JUNGLE

  Montes Azules is becoming a silent jungle as settlers carve it into disconnected patches: in many parts, tapirs, howler monkeys and parrots are already gone.

  Patience is wearing thin among the Lacandones. Living in small, jungle-friendly clearings for centuries, their number has dwindled to just 800, but they are the legal owners of much of the reserve -- much more land than they need, the settlers say.

  No accurate figure of the settler population is available, but various estimates put it at 5,000 to 10,000.

  ''They are coming in, cutting the trees and destroying not just our land but our way of life,'' said Alfonso Chankin, a Lacandon leader in traditional white cotton tunic, black hair down to his waist. His clear plastic sandals are one of the few traces of his contact with the outside world.

  Speaking in halting Spanish in the yard of his thatched-roof home in Lacanja, Chankin said that ``if the government doesn't do anything, we are going to have to take matters into our own hands and throw them out ourselves.''

  The risk of violence is real. On May 31, 26 Indians in nearby Oaxaca state were massacred by a neighboring community in a similar land dispute.

  VIOLENCE FEARED

  Any attempt at eviction by the Lacandones and their allies would almost certainly spark violence.

  ''The only way they will get us out of here is dead,'' said Manuel, a Zapatista activist in El Suspiro, a squatter camp deep inside the reserve. Near his bare wooden shack, felled trees smoldered in a freshly cleared field.

  Manuel, who like many Zapatistas identifies himself only by his first name, mainly fears government soldiers and police.

  Security forces appeared ready in April to forcibly remove the settlers. But the national government backed off at the request of Chiapas state officials, who want more talks -- although negotiations appear to be going nowhere.

  ''We're reaching a critical point where the jungle can't work as an ecosystem anymore,'' said Ignacio March, a biologist for Washington-based Conservation International, one of the few groups that has braved the rebels' criticism to publicly oppose the settlements. ``For example, a jaguar can't live in a small patch of jungle. They need a large, continuous habitat.''

  The rebels say they want to turn Montes Azules into an 'Indian Farmers' Reserve,'' a patchwork of farms and jungle.

  BURNING DISCOURAGED

  Jaime, the Zapatista ''commissioner'' who oversees El Suspiro and several other camps, said the rebels have instructed their supporters not to burn or chop down trees, but admitted that the rule is hard to enforce.

  Manuel, after some prompting from his boss, grudgingly said farmers should "cut as little as possible.''

  ''This land belonged to my ancestors,'' said Manuel, whose Tzotzil forebears actually come from the highlands 80 miles to the east.

  Highland Indians began migrating into the reserve in the 1960s, sometimes encouraged by the government and also pressured by high population growth and cattle ranchers who stole their land.

  In an abrupt about-face in the 1970s, the government declared the jungle off-limits to settlers and created a nature reserve. It evicted some squatters, and granted the tiny group of Lacandones ownership of huge tracts in the reserve.

  RESENTMENT

  That closing of the last virgin corner of Chiapas bred resentment in some Indian communities, anger that became the foundation for the Zapatista movement that appeared 20 years later.

  But after the government set up the reserve, it never patrolled or protected it, and a patchwork system was instituted under which some squatter camps were allowed to stay. Only about 20 forestry guards patrol the whole reserve.

  ''People here don't respect authority anymore,'' said forest guard Jorge Luis Gomez. "If we went into the squatters' camps, they'd lynch us.''

  From the air, the reserve looks like a vast green blanket scattered with blue lagoons and brown clearings. The number of settlements rose sharply after the Zapatistas' 1994 uprising, which encouraged land takeovers and effectively ended police operations in the region.

  Zapatistas account for only about half the settlements, but the rebels have effectively blocked relocation of any settlers by threatening violence, boycotting talks and occupying vacated jungle camps.

  A poorly financed government relocation program offers some land and building materials outside the reserve, but running water and electricity are often lacking.

  ''The government should accept the communities that are living in Montes Azules, and allow them to become honorary and permanent guardians of the biodiversity there,'' the pro-rebel Fray Bartolome Human Rights Center said in a June letter to President Vicente Fox.

  LITTLE PROTECTION

  There is little evidence squatter camps protect anything. The settlers clear plots for corn, which exhausts the soil after a few harvests, then turn the land into cattle pasture.

  In the newly settled Seis de Octubre camp, 70 families were hacking into the jungle to build long wooden shacks.

  Ebelio Maldonado, a 27-year-old Tzeltal Indian, stood between a pile of recently felled trees and a smoking field where precious tropical hardwoods are reduced to ash.

  ''The Zapatista army sent us here to take care of the land,'' said Maldonado, moving his hand in the air to trace the outline of the new settlement. ``We'll plant beans and corn, and buy fertilizer, and we'll take care of everything here in the jungle.''

  With large families -- Manuel has seven children -- the settlements must expand. ''We'd like to bring in some cattle, and some mechanized planting,'' Maldonado said.

  The results of that can be seen in the two-thirds of the original Lacandon jungle outside the reserve that has already been cut down. Stream beds are dried up, and only a few skinny cows graze on sun-baked grassland.

  While ranchers love grass, it is the enemy of the jungle; once it takes hold, it carpets the ground and interferes with the natural cycle of regeneration the Lacandones depend on.