MANAGUA, Nicaragua — President Daniel Ortega, warning of the risk of a U.S. invasion, called on other Central American leaders Sunday to work with urgency toward a peaceful settlement of the Nicaraguan war.
"President Reagan does not want to end his presidency leaving a free Nicaragua, so he is making every effort to sabotage peace talks," Ortega told a rally marking the eighth anniversary of rule by the Sandinista National Liberation Front.
In an hourlong speech, Ortega admitted that six years of fighting by U.S.-backed contras had inflicted "economic disaster" on the country, and he appealed for emergency aid from sympathetic governments.
But he contended that the rebels stand no chance of winning and said that a vote by the U.S. Congress to renew its military aid this fall "will only help Reagan to legitimize a direct intervention" in Nicaragua with U.S. troops.
Ortega aimed a large part of his address at the presidents of Guatemala, El Salvador, Honduras and Costa Rica, who are to meet with him Aug. 6 and 7 in Guatemala City to discuss a regional peace plan proposed by President Oscar Arias Sanchez of Costa Rica.
President Reagan has criticized the plan because it would demand that aid be cut off to the contras before it would require the Sandinistas to make political concessions. Ortega has accused him of pressuring Nicaragua's neighbors to reject it.
"Some Central American governments lack the firmness to resist these pressures," he said. "They ought to see clearly that to become an instrument of Yankee policy, sabotage these talks, is to become an accomplice to the North American invasion that would come at any moment.
"The Central American presidents have to reflect," he added. "The costs of making Reagan angry, by meeting, talking and reaching agreements, would be much less than the cost of an invasion.
"The shock waves of such an intervention would be felt not only here, but in all Latin America and even the United States, because the people would not stand by with their arms crossed," he said.
Crowd of 10,000
Ortega, wearing his military uniform, spoke to about 10,000 people at the fairgrounds of Matagalpa, 80 miles north of here. The city lies at the edge of the war zone and is the capital of Nicaragua's north-central Sixth Region, the hardest hit by the fighting.
The contras staged their boldest attack of the year Thursday, penetrating the region's northernmost town, San Jose de Bocay, and damaging an army garrison. Ortega said the rebels lost the four-hour battle because they failed to control the town and retreated.
On Sunday, four army tanks guarded the site of the government rally, which is 50 miles from San Jose de Bocay.
Six of the nine top Sandinista commanders, including Ortega, were present. Oliver Tambo, president of the African National Congress, a black nationalist group fighting white minority rule in South Africa, attended with honors accorded a head of state.
American singer-actor Kris Kristofferson helped entertain the crowd before Ortega spoke.
Those attending the nationally televised rally were mostly peasant farmers. The government trucked them in from all directions and posted army reservists along highways to protect them.
Ortega said the army's ability to rely on tens of thousands of citizen militiamen was evidence of the Sandinistas' popular support, despite widespread dissatisfaction over food shortages and other economic difficulties.
"No government in the world can subdue an armed population by force," he said. "This is the best proof of democracy in Nicaragua."
Ortega credited a land reform program, which has given farm land to 103,000 peasant families, with winning support for the government. An amnesty law, he said, has helped cut the contras' ranks from 16,000 fighters to 6,000 in the last three years. (The contras claim to have at least 12,000 men under arms.)
But Ortega's speech dwelt more on the Sandinistas' setbacks than their achievements.
War to Blame
While admitting that "lack of coherence and administrative disorder" in the government had hurt the economy, he said the war was mostly to blame for its decline.
Nicaragua's exports have fallen from $499 million in 1981, the first year of the war, to $229 million in 1986, when they were surpassed by the rising cost of war damages, Ortega said. Defense spending has more than doubled in that period, to 46% of the national budget.
He asserted that the United States has spent $15.6 billion on the contra war, compared to $3.7 billion in economic aid that he said Nicaragua has received from abroad. He gave no figure for military assistance, which comes mostly from the Soviet Bloc.
"Our foreign aid does not correspond to the drama that our country is experiencing," Ortega said. "The emergency situation demands an emergency response by the people and governments of the world."
Holding out no hope for improvement, he said Nicaraguans "must multiply our energies" in the face of growing hardship.
Ortega made no concessions to the country's domestic political opposition, which has called for lifting a state of emergency, restoring press freedom and pardoning thousands of political prisoners.