MIAMI, JULY 17 -- An aging anti-Castro extremist who was once accused of bombing a Cuban jetliner traded his federal prison cell for strict house arrest here today in an arrangement that allowed him to end 14 years in South American and U.S. jails.

Orlando Bosch, 63, regarded as a terrorist by the U.S. government but as a folk hero to much of this city's Cuban-American population, will live with his wife and 14-year-old daughter in West Miami, near Little Havana, while the government presses its effort to deport him.

So far, 31 nations have refused to take him.

Bosch will be required to stay home 21 hours a day, wear an electronic tracking bracelet, allow authorities to monitor his telephone conversations and keep a log of visitors, federal authorities said.

"He has renounced terrorism in any form whatsoever as a means of political action and as a means to free Cuba from communism," said Bosch's attorney, Hank Adorno.

At a news conference, Bosch denounced the conditions as "cheap, tragic comedy" but said he would fulfill them. "They cannot be accepted by any honest man who is involved in the fight to liberate his country," he said.

He warned his followers not to call, visit or leave messages, and said he would post a banner outside his house reading, "There are no informants living here." During his three free hours each day, "I shall go to the supermarket," he said, "and I shall speak with whomever I want to speak with."

Despite the restrictions, Bosch's release was the cause of celebration in the streets of Little Havana. The pediatrician has achieved mythic status among Miami's Cuban exiles for his many schemes to overthrow Fidel Castro. His long imprisonment has elevated him in the eyes of some human rights activists to the level of Nelson Mandela, the long-imprisoned South African black leader.

"Everybody is happy in this community about his release," said Thomas Garcia Fuste, news director of Radio WQBA, a popular Spanish-language station known as "La Cubanisima." Within two hours after the announcement, Fuste said, the station received so many calls that he scheduled an "open mike" session to allow callers to express their joy on the air.

Bosch, ailing now from ulcers, has been held in the federal Metropolitan Correctional Center in south Florida since Feb. 16, 1988. He was arrested at the Miami International Airport after returning on a flight from Venezuela to surrender to federal authorities for violating parole. The parole stems from a 1968 conviction for firing a bazooka at a Polish freighter docked in the Miami harbor. The freighter's hull was dented.

That incident was the only one of the many admitted anti-Castro plots for which Bosch was convicted. He was sentenced to 10 years; he served four and was paroled in 1972. In 1974, he fled the country.

Bosch is better known for what happened next. In 1976, a bomb blew a Cubana Airlines jetliner out of the air just after it took off from Barbados, killing 73 passengers and crew members. Bosch was arrested in Venezuela as the mastermind behind the bombing. He spent 11 years in prison there while the government attempted to convict him in civilian and military courts. But he was acquitted twice.

Finally, in August 1987, the Venezuelan government released him, and six months later he flew to Miami and turned himself in.

Bosch served three months completing his parole, and then, according to his lawyers, expected to live in Miami. But the Immigration and Naturalization Service stepped in and began proceedings to deport him. The case see-sawed for the next 22 months, and eventually the INS decided Bosch could stay.

But the Justice Department reversed the decision. Attorney General Dick Thornburgh described Bosch as an "unreformed terrorist." Finally, Bosch gave up his fight, and last November the government won a court ruling that gave it the right to deport him.

In June, U.S. District Judge William Hoeveler asked government attorneys why nothing had yet happened on Bosch's case. He gave them another month to find a suitable home country for Bosch, and on the eve of that court date, Bosch received the three-page offer for release into house arrest.

Justice Department spokesman Dan Eramian said the decision to release Bosch was made for "humanitarian reasons," but that the government will continue to try to deport him.