7 Killed as Haitian Gunmen Disperse Marchers in Street : Caribbean: Demonstrations celebrating the expected end of three-year military rule disintegrate under attacks by police, armed helpers. U.S. troops do not intervene.

PORT-AU-PRINCE, Haiti —  A mass demonstration celebrating the expected end of three years of brutal military rule here disintegrated into despair and death Friday as U.S. troops ceded the city’s heart to Haitian police and armed thugs. At least seven people died, including two apparent members of the paramilitary forces.

Despite the presence of more than 20,000 American troops brought to Haiti to secure order and protect followers of exiled President Jean-Bertrand Aristide as the military leaves power, key streets on the demonstration route were taken over by the most vicious anti-Aristide forces--the Haitian police and their armed civilian helpers.

The Haitian forces used American-made M-16 assault rifles, nail-studded clubs and glistening machetes to beat and shoot at the peaceful marchers.

The demonstration had been organized by supporters of Aristide, who was overthrown in a bloody coup on Sept. 30, 1991, and is scheduled to return to power under an agreement negotiated Sept. 18 that promised an end to military rule by Oct. 15.

Friday’s killings took place at the same site where a death squad shot and killed a bystander watching a pro-democracy demonstration just two days earlier. And near the spot where a grenade blast killed five people Thursday, a crowd of hundreds on Friday looted a Cash and Carry food store.

The day had started uncertainly but emotionally. Thousands of Haitians gathered on the fringes of downtown Port-au-Prince, still cautious from several days of scattered violence that included looting of food warehouses and the grenade attack.

Although street merchants set up stalls, most businesses were shuttered, and few cars ventured into downtown. The American troop positions that created a horseshoe-shaped cordon around the city center drew crowds of generally happy people.

The demonstrations began with a highly charged Mass in the early morning at the city’s Notre Dame Basilica, to be followed by a series of marches to the central cemetery. There, speeches would honor the estimated 3,000 Haitians killed by the military during its brutal turn in power and a mock funeral for the regime would be staged.

Amid Haitian hymns of forgiveness and reconciliation, Father Jean Juiste, a key ally of Aristide, beseeched more than 2,000 parishioners sitting in the church to remain peaceful, even if attacked.

“Our march this morning will not be against anybody,” the eloquent priest said from the pulpit. “It is for the blood that has flowed three long years ago, and to make sure that blood is used to nurture a new life for Haiti.

“If during that march, if trouble occurs, you must show you are mature, or there will be a disaster.”

A few hours later, Father Juiste was in the street, waving his hands, appealing to U.S. soldiers to intervene to stop the killing of marchers.

The parade route sent the demonstrators into an area controlled by the Front for the Advance and Progress of Haiti, a notorious death squad known by its French initials as FRAPH, only a block from the Haitian National Palace and the Haitian military headquarters.

About two dozen FRAPH members then precipitated a series of street fights that lasted until late afternoon. Though their force was small, they easily drove off demonstrators who approached.

On at least four occasions, pickup trucks carrying armed, uniformed Haitian police took FRAPH members aboard and carried them toward the demonstrators. The armed civilians leaped from the trucks and assaulted the marchers, then climbed back aboard and were hauled back to FRAPH headquarters.

Under attack, most of the demonstrators never reached their destination, the city’s main cemetery that is the burial site of many of the 3,000 people who human rights groups say have been killed under military rule. They ran in panic when the shootings and beatings began.

When remnants of the marchers--numbering only 30 or 40--did reach the cemetery, they were forced to flee again when more shots were fired from across the street.

Six of the dead were seen by an American reporter in the immediate vicinity of an office and bar controlled by Haiti’s police chief, Lt. Col. Michel-Joseph Francois, and used by FRAPH.

The violence went well beyond attacks on demonstrators. Among the dead was a Haitian described as a driver for an American television network. Although a foreigner who was with him was let go, the Haitian was killed with a shot to the head and two more to the chest as he tried to hide on a porch.

Two other men described by witnesses as demonstrators were chased down by FRAPH members who trapped them in a doorway a block and a half from the FRAPH office. One was killed with an M-1 military rifle, the other with a pistol.

Two more bodies were found in a doorway less than a block from the FRAPH office. A sixth death came when a FRAPH member who had shot two of the demonstrators was turned upon and beaten to death with a wrecking bar.

At least one other FRAPH member was reported killed when demonstrators discovered he had infiltrated their ranks. Witnesses said the crowd went after him and crushed his head with a cement block after he pulled a pistol.

Reporters were chased, shot at and hit by club-wielding civilians who emerged periodically from the FRAPH building.

U.S. Embassy spokesman Stanley Schrager said even before the day began that U.S. forces would be used only to cordon off Port-au-Prince’s residential neighborhoods.

The city center and commercial area where demonstrations were to take place would be in the jurisdiction of the local authorities, he said--a statement that was played on national radio repeatedly during the morning.

U.S. forces took over state television and radio Friday morning at the request of Aristide’s representatives, officials said, asserting that troops would not broadcast on the stations or influence future broadcasts in any way.

Asked why American forces, which now number about 20,000 in Haiti, took no action to stop the carnage, U.S. military spokesman Col. Barry Willey said: “Our mission was to provide a cordon to control and to deter, but not to get into controlling the march itself. Our mission was not, and still is not, to serve as a police force.”

The U.S. officials blamed the death and destruction on the incompetence of the Haitian police, who, Schrager said, were given full responsibility for keeping order--a policy one Haitian leaflet likened to “letting the cat protect the mouse.”

In a heated briefing late in the day, Schrager indicated that U.S. commanders were re-examining the policy and considering harsher measures and disarmament of police and civilians alike.

Schrager’s statement on limited American involvement emboldened the local forces, according to one Haitian officer, Capt. Josue Montheville, who said his men were told to use whatever tactics necessary “to maintain order.”

Reporters accompanying the marchers, who were attacked almost immediately after leaving the Mass at the church, said the number of demonstrators never totaled more than 10,000, despite earlier predictions that the day’s events would draw hundreds of thousands.

The brutality of the Haitian police was well known by the U.S. military well before Friday’s killings. Just 10 days earlier, American soldiers had looked on in frustration as Haitian forces beat pro-U.S. demonstrators, killing at least one.

This led Lt. Gen. Hugh Shelton, commander of the U.S. forces here, to demand that Haitian military commander Lt. Gen. Raoul Cedras and police chief Francois stop the beatings and to warn that they would be held responsible for the acts of their troops.

No U.S. soldiers on Friday were posted anywhere near the FRAPH headquarters, which is less than a mile from a heavy concentration of American forces. One U.S captain said he was aware of the situation “but was under orders not to move out.”

“I was told we want to avoid a firefight that might end up killing bystanders,” he said.

Col. Willey confirmed Friday afternoon that while U.S. commanders can intervene to prevent Haitians from killing Haitians, they are not to do so if it puts American soldiers in jeopardy.

Asked specifically why U.S. forces did not concentrate their heavy armor in the known trouble spot before the march began, Col. Willey said: “I’m not going to stand here and discuss what we did know and didn’t know and why we did what we did.”

But Col. Willey and Schrager clearly left the door open to expanding the U.S. military’s law-enforcement role.

“It’s clear we are going to do something about it,” Schrager said. “We are not going to continue to permit the violent loss of life.”

Meanwhile, in Cap Haitien on Haiti’s northern coast, about 2,000 demonstrators marched through the streets Friday, singing songs in support of Aristide and chanting slogans denouncing the local police.

The largely peaceful crowds, which marched for more than four hours, decried the 10 Haitian police officers killed by U.S. Marines last weekend in Cap Haitien.

Earlier in the day, a Haitian soldier was killed when a crowd rushed him at the Cap Haitien bus station and his guns apparently went off.

According to U.S. military authorities, the soldier, identified as 38-year-old Franz Bazil, normally guards Haiti’s border with the Dominican Republic.

Bazil was not in uniform. But when the crowd recognized him and pushed around him, he attempted to draw two pistols that were tucked under his belt. One of the weapons fired and struck a teen-age boy in the knee. The other gun also went off, fatally wounding Bazil in the abdomen.

Times staff writer Richard A. Serrano contributed to this report.