By Elida Moreno

PANAMA CITY (Reuters) - Panama's outgoing president has pardoned and freed four Cuban exiles jailed for plotting to kill Cuban President Fidel Castro, in a move that could rupture diplomatic ties between the two nations.

President Mireya Moscoso, who leaves office next week, said on Thursday she freed the Cubans for humanitarian reasons and her government said they were deported but gave no details. Sources in Miami said three of the plotters had arrived there.

Moscoso said she pardoned the four because they were convicted for relatively minor crimes rather than attempted murder and she denied suggestions the United States had pushed her into it. The country's incoming president opposed the pardons.

The pardoned men were among six sentenced in April for their part in a failed attempt in 2000 to bomb a University of Panama auditorium where Castro was due to speak during a summit of Iberian and Latin American leaders.

"No foreign government has pressured me to take the decision," she told a news conference. "I knew that if these men stayed here, they would be extradited to Cuba and Venezuela and there they were surely going to kill them there."

Cuba wanted the men extradited and Venezuela also sought one of them -- prominent anti-Castro activist Luis Posada -- because he once escaped from a Venezuelan jail where he faced charges of planning the bombing of a 1976 Cuban airliner that killed 73 people.

Panama's President-elect Martin Torrijos said he disagreed with the pardon and pledged to work to repair any damage to relations with Cuba once he takes office next Wednesday.

Union leaders blasted the move and rallied their members to take to the streets in protests.

In Havana, a foreign ministry official said Cuba had not yet received official word of the release of the four men.

"MONSTROUS CRIMINALS"

On Sunday, Cuba threatened to immediately break off diplomatic relations with Panama if it pardoned "these monstrous criminals".

Panama responded by ordering Cuba's ambassador out of the country and recalling its own ambassador in Cuba.

Panamanian media speculated the pardon was the result of pressure from the United States, whose decades-old dispute with Cuba has been fanned by President George W. Bush's tough new restrictions on travelling or sending family remittances to the Communist-run island.

Moscoso has enjoyed close relations with the Bush administration.

A Panamanian court in April sentenced the Cuban exiles to prison terms of 7 and 8 years on charges of endangering public safety and falsifying documents. It ruled there was not enough evidence to try them on charges of attempted murder.

Posada was never convicted of the 1976 Cuban plane bombing but was denied bail and spent 9 years in Caracas jail until he escaped disguised as a priest in 1985.

It is now the job of Panama's incoming president Torrijos to mend the strained relations with Cuba.

Torrijos is a centrist and the son of popular former dictator Omar Torrijos who negotiated a 1977 treaty with Washington that led the United States to hand over control of the Panama Canal.