PANAMA CITY -- Flying saucers have not been hovering over rural provinces lately. That means there's trouble in Panama.

The three newspapers controlled by military strongman Gen. Manuel Antonio Noriega closely follow the flying saucers. During a short-lived lull in anti-Noriega demonstrations last month, his papers scooped the opposition dailies with a photograph of a saucer. It was paired with a shot of a stunned-looking, crouching man taken, according to the caption, at the moment he saw the spaceship.

To cynical readers, the saucer looked like a tennis ball ringed with cardboard dangling over a lump of mud. But to Noriega's sympathizers the message was important: the report of the saucer's visit was a sign that calm could be returning to Panama.

PANAMANIANS, unlike some of their Central American neighbors, generally solve their political problems through peaceful discourse instead of civil war. Noriega pointed out that in more than a month of protests the opposition has reported only two deaths.

But as discontent with Noriega spreads, Panamanians are fighting their own kind of war: one of words, symbols and nerves. It is sometimes funny, sometimes vicious.

Noriega's newspapers, with their blazing red headlines, are immune from libel suits. Recently they conducted a front-page campaign demanding that a police doctor examine opposition business leader Aurelio Barria for physical evidence of sexual abuse.

Barria, president of the Chamber of Commerce, was arrested and beaten by police in mid-June. Afterward he described the ordeal to foreign reporters, but made no suggestion that he had been attacked sexually.

The progovernment papers insisted on an investigation to determine whether Barria had suffered sexual injuries at the hands of police. So Barria was hauled before a public prosecutor to deny demeaning questions about an apparently fabricated rape of which he had never claimed to be a victim.

OPPOSITION activists do not insist on verifying information, either, making the capital a whirling rumor mill. Furtive late-night callers whisper urgently that President Eric Arturo Delvalle has resigned or that Noriega "has fled the country."

One night, reporters, drawn by the sound of gunshots, rushed to a site where progovernment gunmen had opened fire on an opposition car caravan. Just minutes after the event, there were as many versions of it as opposition witnesses. Each one claimed adamantly to have spotted a different high government official brandishing a gun.

Rumors abound because word-of-mouth, called Radio Bemba, is the main channel of communication for the opposition. Because the mainly middle-class opposition has no guns to pressure Noriega, they seem to hope they can talk him out of power.

The government that Noriega runs behind the scenes works through images designed to give it a democratic veneer. Delvalle, who was placed in his post by Noriega in 1985, put his name on many emergency decrees since the crisis began in early June. But he has not said one word of his own in public.

His picture appears on television, and a spokesman reads a prepared text. At times Delvalle's spokesman does not know what the president is supposed to have said.

IN COMPARISON to Central American countries where political murder is common, the repression here has been restrained. But Noriega is a master of psychological warfare, having run the Panamanian Defense Forces' intelligence operations for 17 years. His troops do not kill, but they do frighten.

In one case, Panamanian insurance executive Courtney Stempel said he was picked up outside his office one afternoon when he was waving a white handkerchief, the opposition's emblem. Stempel, general manager of the National Union Fire Insurance Co. branch here, was publicly humiliated. As his employes watched, riot police, poking him with an electric cattle prod, forced him to pick up garbage thrown by demonstrators into the streets outside his office.

Many Panamanians who were jailed during the protests reported a common experience. Teams of thugs stationed at the doors to jail cells jumped on new detainees, punching them and stealing all their possessions, including clothing and shoes. Even those who spent only a few hours in jail remembered it as hellish because of the gauntlet they ran at the cell door.

These tactics have been sufficient to discourage some of the protesters. A number of opposition figures are affluent technocrats from banks and commercial firms with a low tolerance for rough play.

Many protesters, for example, have called an opposition human rights hotline set up to monitor the crisis with urgent complaints of military abuses -- not against them, but against their cars.

Still the battle of wits intensifies. The opposition got hold of one of hundreds of invitations that Noriega sent out for his daughter's wedding. Noriega, who has made millions of dollars on the side, included with each invitation a bottle of French champagne specially labeled with the couple's name and wedding date.

The opposition's clamor reduced Noriega to holding a family wedding ceremony at his home two days before the planned date.

But the wily strongman got in one good taunt last week. Emerging from a Cabinet meeting, he astonished onlookers by pulling out a white handkerchief -- the opposition's symbol -- and waving it merrily.