QUARRY HEIGHTS, PANAMA, DEC. 22 -- U.S. forces are fighting "a real war" here as they struggle to suppress at least 2,000 "centrally controlled" and well-armed supporters of deposed Panamanian leader Manuel Antonio Noriega, Gen. Maxwell R. Thurman, commander in chief of the U.S. Southern Command, said today. Thurman briefed reporters at his command headquarters after an hour-long small arms and rocket grenade attack near here by Noriega loyalists on members of a new Panamanian police force being organized to support U.S.-backed President Guillermo Endara. "Noriega got word of that and tried to send a message" with the attack, Thurman said. A few hours earlier, Endara's first vice president, Ricardo Arias Calderon, survived an assassination attempt when snipers fired shots at his car as he was leaving the National Assembly building. Two of his aides were reportedly wounded. Thurman's assessment came the day after President Bush announced that the military operation in Panama was "pretty well wrapped up" and two days after the chairman of the Joint Chiefs of Staff, Gen. Colin Powell, said U.S. troops were "mopping up" after invading the country to oust Noriega. Nevertheless, lawlessness continued to be the only rule in this devastated capital, where no central authority is evident and no public services, except emergency medical care, appear to be functioning. Despite the presence of about 2,000 U.S. military police on some city streets today, armed bands were said to be terrorizing some city neighborhoods and widespread looting continued, hindered only by the absence of any merchandise in many stores. "We're in the hands of the thugs, we have absolutely no protection," said Deborah Maduro, who lives in the upper middle class neighborhood of Nuevo Reparto Carmen. She said neighbors had barricaded the street with trash cans to discourage looters. "You came to protect us and the whole place has gone to hell. There's no food, no medicine, and there's no end in sight." And, according to a doctor at Panama City's largest hospital, "there's no more room in the morgue," where more than 100 bodies lay. "Each day more dead come in," said Jose Leonardo Diaz at Santo Tomas Hospital, near the U.S. Embassy. More than 1,000 Panamanian soldiers and civilians have been treated at the hospital, he said, and the facility is short on medical supplies and equipment. The U.S. military hospital here reported that no Americans were admitted today. American officials said that as of Friday afternoon, 21 U.S. soldiers had been killed in action and 221 wounded, while two were missing. U.S. officials listed 122 Panamanian soldiers killed and 45 wounded. An American journalist, Jon Meyersohn, was still missing after he was taken hostage Wednesday at the Marriott hotel. An estimated 5,500 Panamanian refugees were being fed and cared for at the Balboa High School sports stadium near here. Nearly 1,500 PDF soldiers have been captured and are being questioned to "establish which of them are reliable" and can be "rehabilitated" back into the new security forces, Gen. Thurman said. One of the prisoners reportedly is Noriega's brother-in-law, Lt. Col. Aquilino Sieiro, who surrendered. {Thurman told ABC's "Nightline" Friday that PDF troops had "capitulated" in Colon, Panama's second largest city, situated on the Caribbean coast, and surrendered in David, capital of Chiriqui province, located along the Costa Rican border. Television footage showed David residents waving U.S. and Panamanian flags and cheering Endara and the United States. {Military and Catholic Church officials in David were still negotiating the terms of the surrender, the Knight-Ridder news service reported Friday night. The report said the majority of soldiers in the province had already laid down their arms.} There are reportedly more than 4,000 PDF troops in Chiriqui, and a surrender of most of this force would be a major blow to any plans by Noriega or his loyalists to launch a guerrilla war from the mountains of the province. In an effort to encourage PDF forces to surrender, the U.S. Army has printed safe conduct passes in Spanish and English, which guarantee entry to U.S. facilities "that will provide medical attention, food and shelter." Copies of the passes were accidentally blown off a U.S. helicopter ferrying First Vice President Arias Calderon from the command center here. Thurman compared the effort "to clear and provide security" in Panama to the 10-day military action during the Detroit race riot in 1967 and the year-and-a-half military occupation of the Dominican Republic in 1965-66. "We have work to do," he said, adding that the resistance was "a little bit greater than I expected at the onset." He said there were at least a half-dozen so-called Dignity Battalions each with 300 or so die-hard Noriega loyalists who, although dispersed into fighting groups of five to 10, "may very well be centrally controlled," perhaps under Noriega's "guiding hand." In addition, a U.S. military spokesman said there were an undetermined number of the regular Panama Defense Forces (PDF) and elite special forces units still sniping and harassing U.S. troops. One explanation for the continued activity of PDF forces around the country is that Noriega's force had been prepared for the U.S. invasion. "We did not have as much tactical surprise as we expected," said Lt. Col. James Reed, a battalion commander of the 6th Infantry Division, based at Fort Polk, La. {The Associated Press reported continued bombing runs by U.S. warplanes on the Panama City suburb of San Miguelito, a Dignity Battalions stronghold. The report could not be confirmed.} Thurman said 12,500 weapons had been seized, along with "a substantial amount of drug trafficking documentation." The general said Noriega's "narco-terrorist government" was stockpiling a "vast arsenal" and intended in the long run to create "a substantial threat to the freedom of navigation and use of the Panama Canal." Thurman asserted that Endara was "beginning to make progress" organizing the new government and restoring services. However, Endara and his skeleton cabinet were sequestered under U.S. protection at the National Assembly in the city while fighting continued, U.S. officials said. Thurman said U.S. Army "Civic Action" units were en route to Panama to help rebuild the infrastructure of a city devastated by more than two days of fighting and widespread looting. Noriega loyalists and U.S. troops engaged in an hour-long firefight about a mile from the Quarry Heights headquarters, which is situated atop the highest hill in Panama City near the Pacific entrance to the Panama Canal. The attack was launched at 11:10 a.m. against the headquarters of the transit police, where the new Panamanian police force was assembling. Small-arms fire could be heard a few hundred yards from the press headquarters here. Gray plumes of smoke could be seen from a warehouse of the Panamanian transit police, where the attackers had reportedly set up a mortar. Military spokesmen said they could hear mortar, machine gun and small-weapons fire as U.S. jets and helicopters hovered overhead. It was widely reported that the attack was directed at Quarry Heights and that a mortar round landed at the entrance to the facility. However, a shattering explosion that some believed to be an incoming mortar round was caused by the U.S. Army firing an artillery round at the warehouse, which, according to a source, burned to the ground. The transit warehouse was in an area where military officials Thursday received intelligence reports that 20 or so members of the Dignity Battalions were holed up. Less than an hour before the attack began, Vice President Arias Calderon swore in the first contingent of a new Panamanian police force to replace Noriega's PDF police, which disappeared after the U.S. attack. Arias Calderon came under fire from snipers as he left the National Assembly, where he is staying, in a car. A spokesman said two of his aides were wounded in the assassination attempt. U.S. officials said the invasion, which began early Wednesday, was undertaken to oust Noriega, who had announced that his country was "in a state of war" with the United States. Last May, Noriega annulled presidential elections widely held to have been won fairly and overwhelmingly by Endara and his two vice presidents, Arias Calderon and Guillermo Ford. The three men were sworn in an hour before the invasion began. Sgt. Steven Fitzpatrick of Orange County, Calif., said, "When the operation started to kick off, the PDF started tearing off their equipment and shirts and tried to blend in with the civilian population." Tougher resistance came from "some hard- core fanatics." Sgt. Pete Perales, 40, of Sylvester, Tex., said his unit took at least 57 PDF prisoners during a sweep of PDF buildings Wednesday. "There wasn't all that much resistance," he said. "We've been ready for this. The PDF had been harassing American families for a long time. We can take so much, then we've got to do what we've got to do, and we do it good." A member of the "Jaguars" Company A of the 5th Battalion, 87th Infantry, stationed at Fort Clayton here, handed out black calling cards saying, "The Jaguars were here." A military police lieutenant said they were "death cards," adding, "They leave them on the PDF they kill." Pvt. Russell Kastner, 22, of Plano, Tex., a member of the 82nd Airborne Division, sat atop a light Sheridan tank with what he called a 45-caliber "grease gun" in his hands. "This was the first tank to fire a round in anger since Vietnam," he said. He said the tank crew used the Sheridan's 152-mm cannon to open a hole in the wall of Noriega's headquarters in the initial attack. On the side of the tank was its nickname, "Wolfgang." Kastner said the crew's motto was "Death from Above." Interviews today with soldiers and commanders patrolling downtown areas of Panama City showed frustration at the scale of their mission. "We have not cleared this area out," said Col. Mike Snell, who led reporters on a tour of the neighborhood that housed the bombed-out PDF headquarters. "There are still people with weapons around. To secure this area totally is going to take months of work and a combination of military and other forces." Part of Noriega's former high command building still smoldered, and an adjacent 16-story apartment building stood empty and pockmarked with holes from bullets and artillery shells. Military police said snipers Thursday had fired 50-caliber machine guns from the building but had been quickly rooted out. Occasional machine-gun bursts and rifle fire could be heard in the smoking ruin of the Chorillo slums behind the gutted PDF headquarters building today. Looking out over the scene from the hatch of his armored personnel carrier, Marine Cpl. Tracy Scott Jones, 24, of Dallas said city residents had cheered and clapped and given thumbs-up signs to his morning patrol unit as it moved through the littered streets. "They're on our side, man," he said. While patrol members encountered no sniper fire or other hostilities during their eight-hour sweep, which began at 2:30 a.m., they saw widespread looting and no evidence that a dawn-to-dusk curfew, ordered by Endara Thursday, was being observed, Jones said. Asked to describe the overall situation, Lt. A.J. Kozar of Knoxville said the fighting was "quieting down, slowly fizzling out," although sniper fire and unexploded shells "remained a danger." "We have lived here through fear, intimidation and aggression," said Luis Alberto Arias, a banker from the Marbella neighborhood, which greeted U.S. troops with food, water and hearty applause when they reached the section today. "Now we feel some hope." Arias then summarized what appeared to be the prevailing view of many of his compatriots: "Foreign invasion is not necessarily what people wanted, but in this situation the Noriega regime kept us as a hostage." Staff writer Joanne Omang and correspondent William Branigin contributed to this report.