MANAGUA, Nicaragua (Reuters) -- Nicaragua banned Honduran and
                  Colombian trawlers from its waters on Thursday as a border conflict over
                  Caribbean fishing grounds among the three nations worsened.

                  In a decree to take effect on Friday, Minister of Economy Norman Caldera
                  cancelled fishing concessions for vessels bearing Honduran and Colombian
                  flags, ministry spokesman Kerry Sacasa told Reuters.

                  Of 250 trawlers authorized to fish in Nicaraguan waters, 46 are Honduran
                  and two Colombian.

                  President Arnoldo Aleman kept up the rhetoric on Thursday, despite the
                  presence in Managua of Organization of American States peace envoy Luigi
                  Einaudi, sent to mediate the dispute over a large tract of Caribbean fishing
                  grounds.

                  "If it were necessary to defend our sovereignty and dignity with arms, not
                  just the Army but all the Nicaraguan people would be prepared to do so,"
                  Aleman told a class of graduating Army cadets. "We want peaceful, but
                  dignified solutions."

                  Einaudi, a former U.S. ambassador to the OAS who helped mediate a
                  peace agreement last year between Peru and Ecuador, was scheduled to
                  give a news conference late Thursday after meeting Nicaraguan authorities
                  over the past two days.

                  Earlier this month Nicaragua broke trade relations with its Central American
                  neighbor Honduras and imposed special "sovereignty" import tariffs on
                  Honduran products in retaliation for the Honduran legislature's ratification of
                  a maritime borders treaty with Colombia.

                  The treaty, granting Honduras and Colombia 50,000 square miles (130,000
                  sq km) of Atlantic waters claimed by Nicaragua, was ratified by Colombia
                  on Monday.

                  Nicaragua has filed a complaint with the United Nations World Court in the
                  Hague over the matter.

                  The conflict stems from the Caribbean Sea Maritime Limits Treaty, originally
                  written by Honduras and Colombia in 1986.

                  In ratifying the accord, the two countries formally recognized the 15th
                  parallel as their frontier, a demarcation that grants Colombia 38,600 square
                  miles (100,000 sq km) and Honduras 11,580 square miles (30,000 sq km)
                  of Atlantic waters rich in fishing and potential oil and natural gas resources.

                  Honduran and Colombian officials described the treaty as an effort to
                  safeguard their legitimate rights.

                  But Aleman charged Honduras with submitting to "expansionist policies" in
                  granting territorial rights to a country outside the region, thereby undermining
                  the spirit of cooperation that has characterized the movement toward a
                  Central American union.

                  Costa Rica this week delayed action on a separate maritime treaty with
                  Colombia due to ongoing tension between its neighbors on the isthmus.

                     Copyright 1999 Reuters.