By DIANA JEAN SCHEMO

          SAN VICENTE DEL CAGUAN, Colombia -- In the streets, the campesinos of San Vicente del
          Caguan dared a quiet pride and even hope, seeing luminaries from the nation's capital and
          around Latin America descend on their town.

          "Laboratory for peace," said banners strung across the airport and around the square, where on
          Thursday the government and leftist rebels opened talks toward a peace that the campesinos here have
          wept, ached and prayed for.

          The banners referred not so much to the latest effort to end the fighting that has claimed 35,000 lives
          over the last decade but to this town's novel attempts to find a peace of its own with the rebels.

          Less than a year ago, San Vicente del Caguan seemed like a special circle of hell rising from a grisly
          war that had become a national way of life: bombs exploded in parks and streets, residents were
          dragged from their homes for execution, and holding public office was a reliable way to shorten one's
          life.

          Residents said most of the killing was by the rebels, who suspected townsfolk of sponsoring right-wing
          paramilitary death squads. But they said police and military officers also killed because they suspected
          the town of selling supplies to the rebels and because they considered some local officials corrupt.

          "People were scared to be out in the street, especially in the evening," said Jorge Puertas, 55, a
          shoeshine man. "Everyone had less customers and less money. I was scared in case I got killed for
          shining the wrong person's shoes."

          Last year, said Mayor Omar Garcia, a bomb exploded in the same square where President Andres
          Pastrana appeared Thursday, killing eight residents and injuring 50. Three city councilmen were
          assassinated.

          "We're not paramilitaries, we're not coca growers, and we're not helping the guerrillas," the mayor said.

          So, terrified and expecting little help from the Bogota government, residents set up their own peace
          commission of 70 townsfolk last fall. They swallowed their fear and sent delegations into the mountains
          to seek out the guerrilla commanders. They said they were poor campesinos, tired of dying, and had no
          money to finance paramilitary armies.

          Some residents even talked of seeing an apparition of the Virgin Mary in the mountains near Puerto
          Rico and made penance by walking 24 hours straight to get there.

          "They came back like this," said the Rev. Ruffino Reyes, twisting his legs and falling halfway to the
          ground like someone near fainting. They prayed for peace.

          The delegations set up regular contact with the guerrillas, who asked the town's ombudsman to tell
          them about corruption and other problems in the local government. They told the mayor to replace
          those accused of corruption, who stepped down.

          "The guerrillas never confirmed they were doing the killing, but it got better," Garcia said. "The
          guerrillas got to know the people."

          As people here watched government troops and policemen pull out two months ago as part of a larger
          90-day evacuation of security forces from an area of southeastern Colombia the size of Switzerland,
          some became nervous and left town in fear of rebel attacks.

          Now, said Martha Ospina, 28, the town has calmed down. At first, she said, the people complied with
          the rebels' orders out of fear. "They thought they might be taken away, or face some kind of rebel
          justice," she said. "But now people comply out of respect. People feel comfortable with the guerrillas."

          Ms. Ospina said the rebels explained to the shopkeepers and other townspeople how they would run
          San Vicente and how they have administered the laws "honestly," reducing corruption. "They
          apparently even intervene in infidelity and marital disputes if they are asked to," she said.

          This week, residents wondered if their experience at building contacts with the rebels could be a seed
          that would flower around the country. At the talks on Thursday, pieces of this fragmented and
          polarized country reconnected in small encounters that made distant enemies and strangers seem more
          human.

          In this forgotten slice of Colombia, residents were both tickled and fearful as they watched the grand
          spectacle of the nation's efforts to forge peace unfold.

          Elvio Rojas, 50, a wood merchant, smiled shyly and waved as a jeep carrying Maria Emma Mejia, the
          attractive former Foreign Minister, passed a few feet from where he sat. A 20-year-old rebel doing
          guard duty, wearing lipstick and toting a machine gun, asked whether Ms. Mejia had arrived in town
          yet and described herself as "an admirer."

          Maj. Roine Chavez, chief of the president's security detail, praised the ease in coordinating security
          with the rebels, who agreed to having 60 bodyguards from the National Police, including sharpshooters,
          accompany the president here. Air forcce pilots, shuttling visitors in and out of the town, chuckled over
          the rebel commanders' delight at seeing the beauties of Ivan and His Bam Band, a musical group,
          dance through the afternoon. "It can't be work all the time," one said.

          All sides say that peace could take five years or more to build and that negotiations will most likely
          unfold even as the war intensifies. In that war, San Vicente sits at the edge of the abyss -- a region set
          for a dramatic increase in U.S.-backed fumigation and other counterdrug efforts that will most likely
          mean attacking the rebels in their rural strongholds and bringing the war back here again.

          Driven by conservative Republicans, the United States has more than tripled antinarcotics aid to
          Colombia this year to $290 million, which will largely be used to step up the firepower and intelligence
          gathering abilities of the National Police and the army, in the heart of guerrilla-controlled territory.

          So far, Washington has failed to deliver or earmark money for the development of alternative crops in
          coca-growing areas, a cornerstone of Pastrana's $3.5 billion plan to bring about peace by weaning
          peasants from coca growing and the rebels from a major source of their income.

          At the ceremony here Thursday, the American Ambassador, Curtis W. Kamman, said peace was
          essential to open the way for American aid for development of forgotten areas like San Vicente del
          Caguan. But Colombians involved in the peace effort were quick to criticize Washington's willingness
          to invest in fumigation of coca crops and other measures that will certainly heighten strife in the region
          rather than in rural development.

          "The United States has to be willing to take a chance," said Augusto Ramirez Ocampo, who has
          headed efforts to negotiate peace with the National Liberation Army, a smaller rebel organization
          powerful in the north. "It can't take the safe road and say we'll only invest after the peace is there. It
          has to be willing to bet on peace."

          Garcia agreed, and said that for all their involvement in skimming commissions off drug trafficking, the
          rebels say the fighting will not end until Colombia changes a society that they insist is stacked against
          the poor.

          "Peace is not a paper that's signed," the mayor said. "It's something that has to be built."

                     Copyright 1999 The New York Times Company