The US used a five-mile strip of rainforest either side of the canal as a military testing ground for decades before handing the area back to the Central American country in 1999. In the pullout, some 30,000 acres were cleaned by the US - but 8000 acres are still scattered with mortars, grenades, bombs, rockets and residue of the dioxin- containing herbicide Agent Orange.
Pressure is mounting for the clean-up to be finished properly - over the past 20 years officials say 21 people have been killed by unexploded bombs around former range sites Escobal, Balboa West and New Empire. Unofficial estimates say more than 40 people have died.
A few dozen miles from the capital Panama City, on the uninhabited island of San Jose in the Pacific Ocean, seven mustard gas bombs weighing between 500lb and 1000lb were abandoned in the jungle during US tests in the 1940s.
Landless peasants such as Sabino Rivera, the most recent victim, routinely enter restricted areas in search of food or scrap metal. "He was blown to pieces," said Cecilia Rivera of her brother, who died in the village of Escobal, on the west side of the canal, in July of last year.
"He was looking for bananas for his nine children when he stepped on a mortar. He had no work, and we were hungry. What else could he do?" Rivera's mother, Blasena, cradles her grandchildren and covers their ears. "The US has an obligation to come and clean this up. How many more of us must die?"
The restricted areas only have a few sun-bleached warning signs and flimsy rope fences to keep locals out.
Munitions have turned up in Escobal itself; two children found a grenade near their home in 1993. Seven-year-old Oriel Ojo and Luis Magallon, 12, were pelting each other with mangoes, said Oriel's adoptive grandmother, Pastora Gonzalez. "Oriel wanted to give Luis a real hard blow. He ran to the dump to get a stone, but found a grenade. Luis tried to open it and it blew up." Luis was blown to pieces.
The US built and operated the canal, which today carries 5% of world trade, and opened it to ships in 1914. It gave it to Panama in 1999 under a 1977 treaty negotiated by US president Jimmy Carter with dictator General Omar Torrijos, the father of current Panamanian president Martin Torrijos, a reformist who wants to expand the canal for bigger ships.
The treaty demanded weapons be removed "as far as practicable", and the US claims to have complied, arguing it would have to cut back rainforest to clear the bombs, leading to soil erosion and silting up of the reservoir which feeds the canal. Will Ostick, a US official in Panama City, said: "Range management is the Panamanians concern now."
However, John Lindsay-Poland, an author whose work The Emperors In The Jungle documents the history of the US military in Panama, says the US is unwilling to meet its responsibilities.
"In some areas, the trees are far enough apart to just go in and remove the weapons. And where there is heavy ground cover, you could go in and cut down the trees, excavate the munitions, let it grow back, then work in an adjacent area so you never have a clear cutting effect. The US never seriously explored that because I think they didn't want to have any obligation after 1999."
The issue has rumbled on since 1999 - US defence secretary Donald Rumsfeld declared it a closed case when he visited Panama last year. But when President George W Bush stopped off in the capital last week, he signalled it was still under discussion. "We had obligations, and we felt like we met those obligations," he said. "We have a disagreement we will continue to discuss. We're able to do so in a way I think is constructive because we're friends."
Those discussions cannot come soon enough for the people of Escobal, who have seen five of their villagers killed. Vaneza Lozano, who saw his father bleed to death after stepping on a weapon in 1993, said: "Nothing can bring him back, but the US must do something."
20 November 2005