MANAGUA, NICARAGUA, JULY 12 -- Sandinista-backed labor unions agreed today to end a violent strike against the government of President Violeta Chamorro in return for a broad package of concessions on wages and economic policy.

The agreement granted the Sandinistas much of what they were seeking in the 10-day strike. Concessions included across-the-board salary increases for government workers, suspension of a government program to rent confiscated land back to its previous owners, compensation for hundreds of bureaucrats fired by the government and job protection for strikers returning to work.

For the Chamorro government, which last week declared the strike illegal and refused to discuss many of the Sandinista unions' demands, the accord was an abrupt reversal, apparently prompted by the chaos that gripped the streets of the capital early this week.

The strike, which began July 2, escalated day by day, cutting transportation and other crucial services in the capital and crippling commerce. On Monday and Tuesday, the strike exploded into violence, leaving at least five killed and more than 90 injured, including Sandinistas, government supporters and policemen.

Both sides hailed the settlement, which was signed about 12 hours after Chamorro declared she was willing to negotiate with the strikers. Her statement followed discussions between her top adviser and son-in-law, Antonio Lacayo, and former president Daniel Ortega, the leader of the Sandinista Front.

Adrian Meza Jr., legal adviser for the Sandinista-supported National Workers' Front, called the settlement an "absolute victory for the workers."

Government officials stressed that the pact had restored order, created the conditions for economic stability and rescued the nation from a state of virtual anarchy.

"Reason has prevailed over violence," said government spokesman Danilo Lacayo. "Today, the government workers are working, and normalcy has been restored."

It was the second settlement the government has made with striking Sandinistas since the Chamorro administration took office April 25. In May, government workers won a 100 percent wage increase as well as further increases pegged to the price of basic market items.

Taken together, the two strikes demonstrate that the Sandinistas, despite their loss to Chamorro in elections in February, retain organizational muscle to force important concessions from the government.

The accord reached today seemed likely to hamper Chamorro's efforts to trim Nicaragua's bureacracy and budget deficit in order to cut the rate of inflation, now running at more than 100 percent per month.

"This was a political strike," said a diplomat. "It didn't have anything to do with wages. It was intended to give {the Sandinistas} real control and slow down government economic policies."

The accord does not explicitly derail government plans to sell state-owned industries and businesses. And while it suspends a program that was already under way to rent confiscated agricultural land to previous owners, it does not alter the government's long-term policy to return land and other property to the original owners.

However, the government agreed to:

Form a commission of employers, unions and the government to prepare a minimum-wage law no later than September.

Refinance nearly bankrupt state-owned textile, metal and transportation industries to save jobs in those concerns.

Restore free bus service for students and some workers who lost that privilege after the Chamorro government, seeking to trim the federal deficit, eliminated subsidies for public transportation.

In a news conference late Wednesday, Chamorro raised the possibility of further concessions by announcing she would enter into a "national dialogue" to achieve a "social pact among labor, business and government."

"Dialogue is the civilized way to resolve problems in a democracy," Chamorro said. "But to dialogue is not to make concessions. The popular sovereignty that I was granted through popular elections will not be given away to anyone."

Chamorro sat next to Gen. Humberto Ortega, chief of Nicaragua's armed forces and one of the top members of the former Sandinista government. The president's decision in April to leave Ortega in charge of the army divided her own political allies, some of whom predicted that it would paralyze her government.

When violence erupted Monday, many doubted whether the army, still controlled by Sandinistas, could be trusted to restore order if it meant challenging Sandinista strikers.

However, the army heeded Chamorro's order Monday night to clear the capital's streets of barricades erected by the Sandinista strikers.

At the news conference, Ortega pledged the armed forces' loyalty to Chamorro's government. "The armed forces will never be involved in a coup against the government," he said, adding that they would not fire on civilians either. Alfredo Cesar, a top adviser to Chamorro and member of Nicaragua's National Assembly, said the strikers wanted to force the army to defy Chamorro but had failed.

"The army of Nicaragua is more committed than ever to the new democratic Nicaragua and Dona Violeta," said Cesar. "Clearly the army has taken sides."

However, some diplomats said it was difficult to believe that Ortega and the Sandinista leaders, whose party structure during a decade in power was marked by discipline and hierarchical decision-making, had not directed the strikers behind the scenes.