PANAMA CITY, JUNE 20 -- The National Assembly today approved an indefinite extension of the 10-day-old state of emergency after a heated 10-hour debate.

The government, controlled by military commander Gen. Manuel Antonio Noriega, in issuing the order to extend the emergency, moved sharply onto the defensive, apparently fearing new protests, and defied calls by the U.S. Embassy, the Panamanian business community and Roman Catholic bishops to lift the emergency.

The disturbances that forced the government to impose the emergency were described by a range of observers as a turning point for Noriega, ushering in a period of widespread discontent and sharp confrontations between the general and the largely middle-class opposition.

Across the political spectrum, prominent Panamanians argued that Noriega's image suffered irreparable damage because of his harsh response to the protests and his refusal to allow an investigation of allegations of his involvement in crimes.

The state of emergency, which suspended constitutional guarantees, including the right to public protest and free expression, and instituted nearly complete censorship of independent news, was imposed after two days of rioting sparked by accusations by Noriega's former deputy, Col. Roberto Diaz Herrera, that the military strongman was involved in murder, corruption and electoral fraud.

President Eric Arturo Delvalle and his Cabinet yesterday issued the order to extend the emergency, concluding in the decree that "the circumstances that prompted the state of emergency still exist as a result of systematic calls to sedition" by the opposition.

The National Civic Crusade, a coalition of professional, student and church groups led by the 1,200-member Chamber of Commerce, has called for continuing civil disobedience that includes nonpayment of taxes and loud pot-banging every few hours.

Despite the emergency decree, the opposition staged five days of peaceful protests, including a general business strike. The government responded with hundreds of short-term arrests of demonstrators and many small-scale violent clashes between protesters and Noriega supporters.

The progovernment assembly coalition, with 45 of 67 seats, had enough votes to rubber-stamp the order, but not enough to curtail debate. The 22 opposition legislators, attending the assembly for the first time since the emergency was imposed, used filibustering tactics to delay a vote. After 10 hours of often raucous debate, the extension was approved 41 to 10.

The National Radio, the government's official voice that has broadcast assembly sessions live all week, went off the air abruptly last night. It was silent during today's assembly deliberations, so they were not carried anywhere in the country.

National Radio news director Demetrio Olaciregui said he was told that an electrical part in the transmitter had blown and would be replaced late today. But National Radio newscasters said it is highly unusual for the station to go off the air for technical reasons.

On the assembly floor the pro-government coalition blocked an effort by the opposition to broadcast the debate on another radio station, arguing that the government would have to grant a special broadcast license to permit it.

Spectators watching the debate this afternoon heard opposition and government legislators hurl insults at one another and, on several occasions, threaten to start fighting with more than words.

The assembly quieted down somewhat when Sen. Christopher Dodd (D-Conn.), chairman of the Foreign Relations subcommittee on western hemisphere affairs, dropped in for an unexpected visit.

Dodd also visited the closed opposition daily La Prensa in what he called a gesture of support for press freedom.

The paper, with a circulation of 35,000, was blocked by the government from laying off employes since it stopped publishing June 12. It faced bankruptcy if it did not resume publication, publisher Ruben Carles said.

Three daily newspapers that are not controlled by Noriega remain closed after refusing to submit to prior censorship. Distribution of foreign newspapers, such as The Miami Herald and the International Herald Tribune, is blocked. Three dailies that are controlled by Noriega continued to print.

In a communique released Wednesday, 11 Catholic bishops chastised the government for suspending only the opposition press and broadcasts, "which silenced some while permitting abusive attacks by others."

Meanwhile, the rural home of Bertilo Mejia Ortega, leader of the five Christian Democrats in the National Assembly, was ransacked last night, Mejia said.

Intruders destroyed furniture and left Mejia's possessions soaked in gasoline piled in his living room with a boxes of matches on top, apparently as a warning.

National university rector Abdiel Adames said classes will resume Monday after a two-week suspension. Although he said the students "have no intention of provoking violence," many observers predicted that demonstrations could begin again on the campus.