The Organization of American States has a new mission. It moved yesterday to defuse a potential armed conflict between Nicaragua and Honduras, two of its poorest members, over a territorial dispute.

An extraordinary session of the OAS permanent council authorized OAS Secretary General Cesar Gaviria to nominate "with the greatest possible urgency" a special representative to help ease tensions. Nicaragua's ambassador here, Francisco Javier Aguirre Sacasa, said that the envoy will decide on the need for observers, and that the envoy's presence alone will help avert any hostilities. "For us it is not about dollars and cents but about sovereignty," he said.

The crisis was triggered by the Honduran parliament's Nov. 30 ratification of a 1986 treaty with Colombia that recognizes the San Andres Archipelago in the Caribbean as Colombian territory. "We had commitments from the Honduran government in 1995 that it would not ratify that treaty. This was a sneak attack," Aguirre Sacasa said. Nicaragua, which fears losing fishing rights and potential oil concessions, would like to claim waters all the way to the 17th parallel, while the treaty sets the boundary at the 15th parallel.

On Monday, Nicaragua announced it would take the case to the International Court of Justice in The Hague for arbitration, with legal costs covered by a 35 percent tax on Honduran goods moving to or through Nicaragua. In an interview Monday, Honduran Foreign Minister Roberto Flores called Nicaragua's reaction "disproportionate."

Report From East Timor

An American relief worker who arrived Sunday from East Timor described horrific conditions in resettlement camps she visited across the border in western Timor, where she said she saw mass graves of children, and refugees living as the virtual hostages of Indonesian soldiers and local militias.

"Outside Atambua, I saw a grave with 24 children aged between 2 months to 6 years," said Pamela Sexton. The cause of death, she was told, was diarrhea. "The biggest concern is the health of children," she added. Most international aid agencies are unable to operate in western Timor because of threats from the Indonesian military and the militias they support, she said.

Sexton said she entered camps in the southern and central parts of western Timor, and those adjacent to the East Timorese border, in October and November. Thousands of East Timorese remain trapped in makeshift camps with nothing but tarpaulins as shelter, three months after they were driven from East Timor by rampaging Indonesian forces, Sexton said in an interview Monday.

Several refugees who tried to cross into East Timor were shot, she said. "In one horrible case, refugees saw severed heads spiked on sticks in late September as a warning sign of what might happen to them," Sexton said. In the camps, women would approach her, touch her hand and quietly ask if she could help them escape. "The minute a militiaman with a pro-Indonesia T-shirt would show up, each woman would change her story, saying, 'Things are good. Everything is fine.' This kept happening at every camp," she said.

The Indonesian forces are carrying out a disinformation campaign to discourage leaving the camps, Sexton said. Refugees are being told it is "very unsafe in East Timor. They tell them that men, women and children are being separated and the men are killed, taken out and dumped into the sea." She added that they live in fear of being targeted as pro-independence.

Conditions along the border were the worst, said Sexton, a former U.N. observer in East Timor who served as the U.S. coordinator for the International Federation for East Timor Observer Project during the Aug. 30 referendum on East Timor's independence from Indonesia. She witnessed the violence and the exodus and returned with Grassroots International, an international development group, to assess reconstruction needs and visit western Timor.

Hope for Northern Ireland

Northern Ireland Secretary Peter Mandelson, Britain's point man in the embattled province, was in Washington this week to meet with senior Clinton administration officials and members of Congress. He also stopped by The Washington Post, where he told editors and reporters he is optimistic about the chances for permanent peace in Northern Ireland in the aftermath of last week's formation of a power-sharing government of Roman Catholics and Protestants.

"The executive [government] is durable . . . the institutions are robust," Mandelson said. The Irish Republican Army is committed to destroy its arms in a "voluntary and verifiable way," he added.