BY CESAR GARCIA
 Associated Press

 SAN VICENTE DEL CAGUAN, Colombia -- Peace talks resumed outside this
 town in southern Colombia on Thursday after guerrilla clashes punctuated the end
 of a temporary holiday truce.

 The negotiations were held before a planned visit to Colombia today by U.S.
 Secretary of State Madeleine Albright to discuss a new $1.3 billion aid proposal
 for the country.

 Albright's visit to the northern city of Cartagena, the first by a chief U.S. diplomat
 to Colombia since 1990, underscored Washington's growing concern about the
 linked threats of drug trafficking and a powerful leftist insurgency.

 President Clinton this week proposed the anti-narcotics aid package, with most of
 the money earmarked for military helicopters and new army battalions that would
 push into southern jungles where the guerrilla presence has limited anti-drug
 operations.

 Rebels draw money from the drug trade and protect the flow of drugs out of the
 world's top cocaine-exporting nation.

 As government and rebel delegates convened for peace talks Thursday, their tone
 was positive.

 ``I'm optimistic because this process is now into its substantive phase, which
 means negotiations and discussions of the issues,'' said Fabio Valencia, one of
 the five government delegates to the talks with the 15,000-member Revolutionary
 Armed Forces of Colombia.

 Talks with the country's largest rebel group have plodded along since they began
 in San Vicente del Caguan's main plaza a year ago.

 As the talks have dragged on with no agreement, the guerrillas have carried out
 several bloody offensives seen as attempts to bolster their negotiating position.
 Rival right-wing paramilitary groups have also continued to kill civilians they
 accuse of being rebel sympathizers.

 A 20-day rebel truce, called to give Colombians a Christmas and New Year
 reprieve, expired on Monday.

 On Wednesday, guerrillas attacked police barracks in three neighboring villages
 in southern Nariño State, killing three officers and one civilian, authorities said.
 There were also unconfirmed reports of heavy rebel casualties.
 

                     Copyright 2000 Miami Herald