Bolivia appeared to be on the brink of civil war tonight as troops loyal to the country's new military president, Col. Alberto Natusch Bush took positions in the center of the city, and troops seeking a return to civilian rule headed toward La Paz from an Army garrison 50 miles to the north.

Shots were first heard in downtown La Paz at 7:57 p.m., 45 minutes after the presidental palace was evacuated of all civilians, including journalists.

La Paz was in chaos tonight as this city of 700,000 waited for the fight that seemed to be coming. Both units loyal to Natusch and those opposing him are armed with tanks, armored cars and modern weapons that could do substantial damage if the fighting begins in earnest.

Shortly after midnight, Natusch reaffirmed his control in a broadcast and imposed martial law, a curfew and censorship. [there were clashes between civilians and Army units backing Natusch, Associated Press reported, and the Red Cross said at least 20 persons were killed and 40 wounded.]

At about 6:30 p.m., hundreds of mineworkers marched down La Paz's main avenue protesting the Natusch government. The congress -- closed by Natusch after he deposed president Walter Guevara Arze on Thursday -- had been called by its leaders into urgent session, but it was not clear whether the meeting had actually taken place.

Negotiations began earlier in the day to avoid a fight between opposing military units but ended about 6 p.m., when Gen. Juan Ayoroa, who was mediating between Natusch and those military leaders opposing his three day-old government, left the palace. The negotiations apparently had failed.

Shortly afterward, the 2,000 members of the National Guard -- the military-civian police force in charge of security in La Paz -- announced that it had deserted the Natusch government and joined "the people."

In 1952, the National Guard was instrumental in bringing down another military government and detroying the country's armed forces in what was Bolivia's only modern revolution.

The 1952 revolution brought to power the National Revolutionary Movement led by Victor Paz Estenssoro and Hernan Siles Zuazo, who ran the country from 1952 to 1964. A military coup toppled the elected government then, ushering in almost 15 years of uninterrupted military rule until Guevara was elected three months ago.

The country, meanwhile, has been virtually shut down by a general strike that began after the Natusch regime, which has yet to be recognized by any foreign government, deposed the first civian government in Bolivia in a decade.

The leader of the protest strike, Juan Lechin of the Bolivian Workers' Confederation, also met with Col. Natusch at the presidential palace but came away assuring that there would be no cooperation from labor until "restoration of the democratic system."

Effects of the strike began to be felt as markets ran out of meat, fruits and vegetables. Families lack cash because banks had been closed since Wednesday. Gasoline stations are also shut down and public transport is nonexistent because bus, taxi and truck drivers joined in the protest against the new military rule.

Yesterday, the United States -- which had backed the civian rule -- announced that it was suspending economic and military assistance. Venezuela announced that it would no longer supply loans that have been keeping Bolivia's central bank from running out of the hard currency needed to meet foreign obligations.

In addition, virtually all of Bolivia's small but numerous political parties have repudiated the takeover, calling for a return to democratic rule. The Congress had met Thursday evening to pass a unanimous resolution saying it would not recognize or work with the Natusch government, which then announced that the Congress would be closed.

Given these circumstances and deep splits within the armed forces, the new government has found itself almost completely isolated.

Its two alternatives now appear to be either to give up power voluntarily or impose a drastic form of military dictatorship that would almost certainly lead to armed resistance by organized workers and dissident Army units.

These dissident sectors are led by Gen. David Padilla, who was the military president until August and commander in chief of the armed forces until he was removed by Natusch Thursday.

This morning, before the negotiations began, newly installed Foreign Minister Guillermo Bedregal Gutierrez said at a press conference that the government had consolidated its position and would remain in power.

Bedregal also said he hoped the United States would reconsider its decision to cut off aid, which Natusch said last night constituted a "threat" to his country and government that would be resisted.