Nicaragua's Sandinista leadership has closed ranks around one of its own, Bayardo Arce Castano, who is accused by Washington of having played a key role in the shipment of Soviet-bloc arms to El Salvador.
But the Sandinistas have quietly stopped the arms flow through Nicaragua in the wake of the United States accusations and the subsequent suspension of US assistance to Nicaragua.
So far, the Sandinistas have not publicly admitted a role in the arms traffic to leftist Salvadorean guerrillas -- and, indeed, they have denied any such traffic. But Sergio Ramirez Mercado, a member of the ruling junta, suggests that arms could have gone through Nicaragua without government knowledge, an implicit admission that his country was somehow used in the arms traffic.
Moreover, some Sandinistas say privately that Mr. Arce, a member of the Sandinista directorate which is the ultimate authority in Nicaragua, actually arranged the details of the arms flow during the last half of 1980 and the early weeks of 1981. They add, however, that not all nine members of the directorate knew of the traffic. Mr. Arce, meanwhile, has been replaced as head of the government's quasi-legislative Council of State, although this may have been planned before the arms flow disclosures. However, he is keeping a low profile.
Knowledgeable observers say the arms shipments were carried on by a faction of the government without the Sandinista leadership as a whole having been involved or having made any decison on the issue.
Washington now claims that the flow of arms has now either stopped altogether or dwindled to a trickle. But there are reports that large quantities of arms and ammunition originally destined for El Salvador are stored in warehouses in northern Nicaragua.
The whole situation presents Nicaragua's leadership with a dilemma. Having denied publicly any involvement in arms shipments, will the Sandinistas also deny US assertions that the shipments have stopped? So far they have said nothing.
Yet the Sandinista leadership is deeply concerned about the suspension of US aid last month which followed the disclosured of Soviet-bloc arms shipments to leftist Salvadorean guerrillas and the Nicaraguan role in the flow.
US aid is not large in dollars -- some $15 million in credits from 1980 and a projected $50 million for 1981 -- but a decision to cut off aid permanently might have a great effect on international lending to the economically battered Central American country.
Washington has given no clear indication of how it will act on the issue. But Secretary of State Alexander M. Haig Jr., last week seemed to take a softer line on Nicaragua than he had in the past. He said the arms traffic through Nicaragua had slowed to a trickle.
The Reagan administration last month gave Nicaragua 30 days to halt the arms traffic -- and the deadline was set for March 16. At this writing, it seemed likely that Washington would postpone making a final decision on the issue.
For one thing, the US is worried that a full and final cutoff of US aid could nudge Nicaragua's leadership toward a more totalitarian stance and therefore scuttle the pluralistic society originally promied by the Sandinistas when they came to power in July 1979, after toppling the government of Gen. Anastacio Somoza Debayle.
Washington is awaiting the arrival early next month of Arturo Cruz Porras, who has been designated Nicaragua's new ambassador to the US. Mr. Cruz, a banker and leader in the private sector, was a member of the governing junta for nine months. His appointment amid the debate over the arms traffic was seen as an effort by the Sandinistas to placate Washington.