By 1968 the López Arellano regime seemed to be in serious trouble. The economic situation was producing growing labor conflicts, political unrest, and even criticism from conservative groups such as Fenagh. Municipal elections were held in March 1968 to the accompaniment of violence and charges of open fraud, producing PNH victories but also fueling public discontent and raising the concern of the United States Embassy. Efforts at opening up a dialogue were made in mid-1968 but had little success. Later in the year a general strike was kept brief by government action that helped break the strike and exiled the leader of the major Caribbean coast labor federation. Unrest continued, however in the spring of 1969 new strikes broke out among teachers and other groups.

As the political situation deteriorated, the Honduran government and some private groups came increasingly to place blame for the nation's economic problems on the approximately 300,000 undocumented Salvadoran immigrants in Honduras. Fenagh began to associate Salvadoran immigrants with illegal land invasions, and in January 1969, the Honduran government refused to renew the 1967 Bilateral Treaty on Immigration with El Salvador that had been designed to regulate the flow of individuals across their common border. In April INA announced that it would begin to expel from their lands those who had acquired property under agrarian reform without fulfilling the legal requirement that they be Honduran by birth. Attacks were also launched in the media on the impact of Salvadoran immigrant labor on unemployment and wages on the Caribbean coast. By late May, Salvadorans began to stream out of Honduras back to an overpopulated El Salvador.

Tensions continued to mount during June 1969. The soccer teams of the two nations were engaged that month in a three-game elimination match as a preliminary to the World Cup. Disturbances broke out during the first game in Tegucigalpa, but the situation got considerably worse during the second match in San Salvador. Honduran fans were roughed up, the Honduran flag and national anthem were insulted, and the emotions of both nations became considerably agitated. Actions against Salvadoran residents in Honduras, including several vice consuls, became increasingly violent. An unknown number of Salvadorans were killed or brutalized, and tens of thousands began fleeing the country. The press of both nations contributed to a growing climate of near- hysteria, and on June 27, 1969, Honduras broke diplomatic relations with El Salvador.

Early on the morning of July 14, 1969, concerted military action began in what came to be known as the Soccer War. The Salvadoran air force attacked targets inside Honduras and the Salvadoran army launched major offensives along the main road connecting the two nations and against the Honduran islands in the Golfo de Fonseca. At first, the Salvadorans made fairly rapid progress. By the evening of July 15, the Salvadoran army, which was considerably larger and better equipped than its Honduran opponent, pushed the Honduran army back over eight kilometers and capture 1000 ed the departmental capital of Nueva Ocotepeque. Thereafter, the attack bogged down, and the Salvadorans began to experience fuel and ammunition shortages. A major reason for the fuel shortage was the action of the Honduran air force, which--in addition to largely destroying the smaller Salvadoran air force--had severely damaged El Salvador's oil storage facilities.

The day after the fighting had begun, the OAS met in an urgent session and called for an immediate cease-fire and a withdrawal of El Salvador's forces from Honduras. El Salvador resisted the pressures from the OAS for several days, demanding that Honduras first agree to pay reparations for the attacks on Salvadoran citizens and guarantee the safety of those Salvadorans remaining in Honduras. A cease-fire was arranged on the night of July 18 it took full effect only on July 20. El Salvador continued until July 29 to resist pressures to withdraw its troops. Then a combination of pressures led El Salvador to agree to a withdrawal in the first days of August. Those persuasive pressures included the possibility of OAS economic sanctions against El Salvador and the dispatch of OAS observers to Honduras to oversee the security of Salvadorans remaining in that country. The actual war had lasted just over four days, but it would take more than a decade to arrive at a final peace settlement.

The war produced only losses for both sides. Between 60,000 and 130,000 Salvadorans had been forcibly expelled or had fled from Honduras, producing serious economic disruption in some areas. Trade between the two nations had been totally disrupted and the border closed, damaging the economies of both nations and threatening the future of the Central American Common Market (CACM). Up to 2,000 people, the majority Honduran civilians, had been killed, and thousands of other Hondurans in the border area had been made homeless. Airline service between the two nations was also disrupted for over a decade.

After the war, public support for the military plummeted. Although the air force had performed well, the army had not. Criticism of the army was not limited to the public junior officers were often vocal in their criticism of superiors, and a rift developed between junior and senior officers.

The war, however, led to a new sense of Honduran nationalism and national pride. Tens of thousands of Honduran workers and peasants had gone to the government to beg for arms to defend their nation. Local defense committees had sprung up, with thousands of ordinary citizens, often armed only with machetes, taking over local security duties. This response to the fighting made a strong impression on a sector of the officer corps and contributed to an increased concern over national development and social welfare among the armed forces (see Consolidation and Organizational Maturity , ch. 5).

The internal political struggle had been briefly suspended during the conflict with El Salvador, but by the start of 1970 it was again in full swing. The government was under pressure to initiate administrative and electoral reforms, allow open elections in 1971, reorganize the military, and adopt new economic programs, including a revision of Honduran relations with the CACM. Labor, peasant, and business organizations were meeting together in what were known as the fuerzas vivas (living forces). Their representatives met with López Arellano and proposed a Plan of National Unity, calling for free elections, a coalition cabinet, and a division of government posts and congressional seats. These proposals failed to elicit immediate response, but discussions continued. Meanwhile, a general political amnesty was decreed, the creation of the Honduran Christian Democratic Party (Partido Demócrata Cristiano de Honduras--PDCH) was announced, and a decree was issued calling for presidential and congressional elections on March 28, 1971.

After considerable discussion and debate, the PHL and PNH parties responded to pressures from lab dbdor, busisiness, and the military. On January 7, 1971, they signed a political pact agreeing to establish a national-unity government after the March elections. The purposes of the pact were twofold. The first was to present a single slate of congressional candidates that would divide the Congress equally between the PLH and PNH (each party would run its own candidate for the presidency, however.) The second goal was to promote the Minimum Government Plan (Plan Mínimo de Gobierno), which included achieving agrarian reform, increasing technical education, passing a civil service law, attempting to resolve the conflict with El Salvador, restructuring the CACM, and reforming government administration. A later agreement between the parties-- the "little pact" ("pactito")--agreed to a division of government posts, including those in the Supreme Court of Justice.

The 1971 elections were relatively free and honest. Both parties offered presidential candidates who were compromise choices of the major party factions. The PLH ran Jorge Bueso Arias, and the PNH nominated Ramón Ernesto Cruz. Most observers anticipated a PLH victory, but the PNH ran a more aggressive campaign, making use of the mass media and of modern campaign techniques for the first time in Honduran history. On election day, Cruz scored an impressive victory, gaining 299,807 votes to 269,989 for Bueso Arias. However, a disturbing note for the PNH was that popular participation in the election had declined significantly from 1965. Only slightly over two-thirds of those registered to vote had done so, although the constitution made voting obligatory.

At first, Cruz appeared to be living up to the terms of the agreements between the parties. He appointed five PLH members, five PNH members, and one military officer to his cabinet. López Arellano remained as chief of the armed forces. As time passed, however, the split between PLH and PNH widened steadily. In order to deal with the budget crisis, Cruz pushed through a reluctant Congress a bill that cut tax benefits and import exemptions. This bill produced opposition from both business and labor sectors. In the area of agrarian reform, the president soon removed INA's dynamic director, Roberto Sandoval, and replaced him with a PNH member, Horacio Moya Posas, who slowed the pace of reform. The PLH protested this action and also argued that the appointment of PNH supporters to the Supreme Court of Justice violated the agreement. Finally, in March 1972, the president dismissed two of the PLH cabinet members. By mid-1972, the government had lost most of its non-PNH support.

Data as of December 1993