BOGOTA, Colombia (Reuters) -- Colombia's most-feared death
                  squad leader Carlos Castano is believed to have died when Marxist
                  rebels overran his mountain stronghold in the north of the
                  country, sources on both sides said on Tuesday.

                  One politician predicted bloody reprisals by paramilitary forces against the
                  Marxists if Castano's death is confirmed.

                  In a call to local media, Revolutionary Armed Forces of Colombia (FARC)
                  guerrillas said they had killed their arch-enemy Castano, who had led a
                  10-year "dirty war" against the rebels and suspected civilian sympathizers, in
                  fighting that began Sunday.

                  Regional politician Max Alberto Morales, a self-styled spokesman for the
                  ultra-right death squads, said Castano's headquarters near the remote village
                  of Nudo de Paramillo, in Cordoba province, had been razed and that the
                  paramilitary chieftain was missing.

                  "There has been no communication within the organization with Castano
                  since 9 a.m. (local time) Monday. The camp and the village has been totally
                  destroyed. The attack was very fierce," Morales said.

                  Morales warned that "this will not be good for peace or for the country" if
                  Castano's death was confirmed-- raising fears of a paramilitary backlash
                  against rebel support bases.

                  Castano, whose fighters have been blamed for burning their victims or
                  beheading them with chain-saws in a wave of brutal massacres, was the
                  undisputed leader of a nationwide death squad alliance known as the United
                  Self-Defence Forces of Colombia (AUC).

                  International human rights groups have accused government security forces
                  of openly backing the outlawed gangs. Some political analysts and the
                  guerrillas themselves say the paramilitary units are part of an official,
                  undercover counter-insurgency strategy.

                  The attack on the heavily-guarded fortress of Nudo de Paramillo shattered
                  an 18-day ceasefire which the AUC had declared over the Christmas period
                  and was due to last until Jan. 6.

                  A regional army commander, who did not wish to be named, said he had
                  sent troops into the area late Monday and that at least 15 were missing after
                  clashes with the FARC. He was unable to confirm, however, whether
                  Castano had died.

                  The fighting came just 10 days before the FARC are due to launch formal
                  talks with the government in a bid to end Colombia's long-running civil
                  conflict that has left more than 35,000 dead in the last decade.

                  Castano, thought to be in his 30s, had also been pressing the government to
                  recognize the AUC as a legitimate political force and had offered to take
                  part in peace talks.

                  Colombia's paramilitary groups, drawing on training and advice provided by
                  U.S. officials, were legally set up by the armed forces in the late 1960s as
                  part of an official anti- guerrilla strategy. But they were outlawed in the late
                  1980s as they threatened to spin out of government control.

                  Castano and his brother Fidel started out as guides for army
                  counterinsurgency units but later set up their own gang, known as the
                  Peasant Self-Defence Forces of Cordoba and Uraba (ACCU), when the
                  government ordered the official paramilitary groups to disband.

                  That group, like most of the country's other paramilitary gangs, was financed
                  with contributions from large landowners and cattle-ranchers. The Castano
                  brothers are also said to have been heavily involved in drug trafficking and
                  arms smuggling.

                  Fidel Castano is thought to have died in fighting with the FARC four years
                  ago, leaving Carlos to head the ACCU.

                  Due to his strong military leadership, Castano succeeded in bringing some
                  5,000 paramilitary fighters from across the country together to form the
                  AUC in April 1997.

                   Copyright 1998 Reuters.