Sandinista guerrillas withdrew from many positions in the capital overnight and a National Guard communique said today that the rebels suffered heavy casualties.
According to sources close to the Guard, government informants within rebel-held parts of the city had reported that the rebel forces although well entrenched, were running low on ammunition and other supplies. They were bombarded heavily from the air during the last week.
A much-anticipated session of the National Congress, called by President Anastasio Somoza, failed to materialize as less than half of the members turned up. The government will try again on Saturday to achieve a quorum of 51 of the 100 members. The Congress is dominated by Somoza's Liberal Party but there was speculation that it might call for Somoza to step down while his party remained in power.
Roberto Velez, a leader of the opposition Conservative Party, assured that no quorum would be reached when he announced that the Conservatives would not participate in the session unless it was called for the exclusive purpose of discussing the resignation of Somoza. The president has said the session was needed for budgetary measures.
The rebel pullout from sectors of Managua was unexpected.
It was reported today, however, that the guerrillas received an order from their commanders to stage a "strategic retreat" and there was wide speculation that they might be trying to join their comrades in control of masaya, 20 miles south of here.
The government radio broadcast warnings to anyone planning to use the Managua-Masaya road to "exercise great, great caution."
The military short-wave radio reported early today that a contingent of 50 rebels had been spotted along the road to Masaya after they seized a bus and several cars in an effort to smash through Guard barricades and make it to Massaya. They reportedly were stopped by guardsmen and suffered casulaties.
Other speculation was that the rebels leaving Managua would try to seize the key southern city of Rivas, 100 miles from here, by advancing on it from the north. Previous efforts to capture Rivas by sending forces from the south across the Costa Rican border have been turned back by the National Guard.
In any case, it was thought likely that the rebels leaving Managua would soon be involved in more fighting, either here or elsewhere in the country, once they can be resupplied. For much of the last month, they have controlled as many as a dozen slum neighborhoods in eastern Managua.
A reporter attempting to verify Guard claims that the road from Managua to the airport was finally cleared of rebels was turned back by a troop of guardsmen standing by the remains of what had been a rebel barricade. The guardsmen said the road was now fully in government hands after 2 1/2 weeks under rebel control, but there was no independent confirmation.
For much of this week, government planes and artillery have been busy in the south bombing rebel camps near the Costa Rican border.
A government mortar scored a direct hit on the main southern guerrilla camp near the border early Monday, killing four and causing considerable damage.
There have been conflicting reports on whether guardsmen chasing rebels out of that camp on Tuesday had pursued them into Costa Rican territory.
The new U.S. ambassador to Nicaragua, Lawrence Pezzullo, arrived Wednesday afternoon in Managua and almost immediately met with Somoza to present an American proposal that includes Somoza's resignation as a central feature. Somoza reportedly rejected the proposal and in broadcast interviews today he again vowed to fight to the finish.
A Nicaraguan official involved in the investigation of the murder of ABC television reporter Bill Stewart said the investigation has come to a virtual halt and that there is little likelihood the case will be solved.
The official, who asked for anonymity said: "If they find the right guy, try him and punish him, I'll be very suprised. The word is out that any guardsman who identifies the guilty party will be . . ." At this point the oficial drew his finger across his throat.
Stewart was killed June 20. Film taken by his crew and broadcast on U.S. television showed clearly that he was murdered by a uniformed Guardsman after being forced to lie on the ground.
Immediately following Stewart's death, Cpl. Lorenzo Brenes was arrested and charged with the crime. He has denied guilt and suggested that another guardsman, since killed in battle, was responsible.
"My personal opinion is that the guy we have is not guilty," said the official, who has been involved in the case since soon after the murder. "He doesn't look enough like the man in the film. CAPTION: Picture, Nicaraguan soldier fires behind a barricade in Managua Wednesday. UPI