PANAMA CITY, OCT. 17 -- Travel agent William Wong, driving home from work one night last week, got caught up in a horn-tooting car caravan of opposition protesters. Suddenly Panamanian riot police dragged him from his car, shoved him onto the floor of a paddy wagon and kicked him for 10 minutes.

Wong, 58, spent the night in jail. When he was released, he was rushed to a hospital emergency room where doctors removed a kidney ruptured in the beating.

"It was very bad luck" was Wong's understated comment in a bedside interview.

The incident was an indication that the government controlled by military strongman Gen. Manuel Antonio Noriega is slowly but firmly tightening its grip to quell continuing ferment in the nation that contains the strategic Panama Canal and the largest U.S. military base in Latin America.

The government, blaming the mainly middle-class opposition for an economic slump, is seeking to silence still-daily street demonstrations with restrictive laws and intimidating -- but rarely deadly -- harassment. Three Panamanians have been killed by gunmen since a crackdown began July 26.

Noriega, in an interview yesterday in a local progovernment newspaper, said he is defending this country against a policy of "economic aggression" by the United States. He labeled the opposition "descendants of Cain and Abel" who "sold their souls to the devil trying to reach the seats of power."

Just before Wong's arrest Oct. 7, President Eric Arturo Delvalle, considered a figurehead for Noriega, made a stern nationally televised speech prohibiting further street protests. Within minutes of Delvalle's closing words, opposition protesters took to the streets in their cars and waved the white flags and handkerchiefs that have become their hallmark.

Just as quickly, riot police intercepted the caravan, smashing windshields with truncheons and arresting at least six Panamanians, including Wong, witnesses said. Nine U.S. servicemen and an American Panama Canal employe also were rounded up by police in different parts of the city that night and held until morning.

A recent report by Physicians for Human Rights, an independent watchdog group of American doctors, found that more than 1,000 Panamanians suffered significant injuries from birdshot used by riot police during the first three months of the demonstrations, which began June 9. At least six persons were blinded in one or both eyes.

Panama City Mayor Jilma Noriega de Jurado (a relative of the general) put police and judges on notice that they should begin imposing jail terms of up to two years for such infractions as spreading leaflets, painting graffiti and "the unnecessary use of horns."

The arrests have continued. Five sympathizers of the National Civic Crusade, the opposition coalition, were picked up Oct. 13 in the northern city of Colon in police raids on a flower shop and a photographer's studio.

Critica, a daily that projects Noriega's views in red headlines, claimed that the five Panamanians belonged to "a band of terrorists" and had in their possession a "large quantity of pamphlets printed outside the country" and a BB pistol for target practice. Two of the five were released.

The government's actions have picked up pace with the approach of Oct. 22, the date set by the opposition for a major march and general strike.

Wholesalers who have sold paper to the opposition for leaflets received police warnings that they cannot sell more than a ream of paper at a time, one stationery storekeeper said.

This week the government sent the National Assembly a proposal for a new press law. It prohibits printing any text that "offends the dignity" of Noriega or anyone in government; bars "adulterated" economic news and any story that is "an apology for foreign intervention," and forbids not giving a source's name. The bill is expected to pass the government-dominated legislature late this month with few revisions.

"The only clause this law doesn't have is the one outlawing use of the words 'pineapple face,' " said Christian Democratic legislator Willie Cochez. That term is used by Noriega's detractors to refer to his pitted complexion. In fact, the proposal does include an article prohibiting references to "physical defects" of government leaders.

Delvalle has indicated that once the law is passed, the government will allow the opposition press, closed in late July, to reopen.

Editors of three closed newspapers have not decided yet whether they will resume publishing under the new law. The opposition daily La Prensa remains occupied by soldiers who have blocked its staff from entering the building since a raid on July 26.

To avoid bankruptcy La Prensa was forced to lay off 40 staff members and find new jobs for 130 others. The government, apparently seeking to maximize the financial burden on the paper, refused to authorize it to break any contracts with its employes, Ruben Carles, a member of La Prensa's board of directors, said.

The lagging economy is an Achilles' heel for both sides. Commerce, controlled by the opposition, is lagging, and banking authorities announced that foreign and local depositors have withdrawn at least $1 billion from Panamanian banks. By one private sector estimate, the economy is shrinking at a 7 percent annual rate.

At the end of September the government, strapped for cash, was several days late in meeting its payroll and foreign debt interest payments, Panamanian and American economists said.

Noriega has avoided the limelight, but emerged this week to claim some credit for Panama for the Nobel Peace Prize awarded to Costa Rican President Oscar Arias.

"We ought to feel that we participated in that prize because we put our grain of sand with Arias when no one believed in his plan," Noriega said.