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In foreign policy, President Reagan sought a more assertive role for the nation, and Central America provided an early test. The United States provided El Salvador with a program of economic aid and military training when a guerrilla insurgency was threatening to topple its government. It also actively encouraged the transition to an elected democratic government, but efforts to curb the active right-wing death squads were only partly successful. U.S. support helped stabilize the government, but the level of violence in El Salvador remained undiminished and actually increased in late 1989. A peace agreement was reached, however, in early 1992.

U.S. policy toward Nicaragua was much more controversial. In 1979 revolutionaries calling themselves Sandinistas overthrew the repressive right-wing Somoza regime. The Sandinista government rejected U.S. demands to cut its military ties to Cuba and the Soviet Union and open its political system to democratic reforms. Regional peace efforts ended in failure, and the focus of administration efforts shifted to support for the anti-Sandinista resistance, known as the contras. Following intense political debate over this policy, the Congress ended all military aid to the contras in October 1984, but continued humanitarian assistance. Congress, under administration pressure, reversed itself in the fall of 1986, and approved $100 million in military aid for the contras. However, a lack of success on the battlefield, charges of human rights abuses and the revelation that funds from secret arms sales to Iran had been diverted to the contras undercut political support in Congress for continuing military aid to the anti-Sandinista guerrillas.

Subsequently, the administration of President George Bush abandoned any effort to secure military aid for the contras. The Bush administration also supported the opposition political coalition, led by Violetta Chamorro, which won an astonishing upset election over the Sandinistas in February 1990.

The Reagan administration was more fortunate in witnessing a return to democracy throughout Latin America, from Guatemala to Argentina. The emergence of democratically elected governments was not limited to Latin America, however; in Asia, the "people power" campaign of Corazon Aquino overthrew the dictatorship of Ferdinand Marcos, and elections in Korea ended decades of military rule.

By contrast, South Africa remained intransigent in the face of the Reagan administration's efforts to encourage an end to racial apartheid through the controversial policy of "constructive engagement." In 1986, frustrated at the lack of progress, the U.S. Congress overrode Reagan's veto and imposed a set of economic sanctions on South Africa. Only in December 1988, in the last weeks of the Reagan administration, did years of patient U.S. mediation contribute to an historic peace settlement and independence for the territory of Namibia in southern Africa.

Despite its outspoken anti-communist rhetoric, the Reagan administration's direct use of military force was relatively restrained. On October 25, 1983, U.S. forces landed on the Caribbean island of Grenada after an urgent appeal for help by neighboring countries. The action followed the assassination of Grenada's leftist prime minister by members of his own Marxist-oriented party. After a brief period of fighting, U.S. troops captured hundreds of Cuban military and construction personnel and seized caches of Soviet-supplied arms. In December 1983, the last American combat troops left Grenada, which held democratic elections a year later.

But military efforts in Lebanon, where the United States was attempting to bolster a weak, but moderate, pro-Western government, ended tragically, when 241 U.S. Marines were killed in a terrorist bombing in October 1983. In April 1986, U.S. Navy and Air Force planes struck targets in Tripoli and Benghazi, Libya, in retaliation for Libyan-instigated terrorist attacks on U.S. military personnel in Europe.

In the Persian Gulf, the earlier breakdown in U.S.-Iranian relations and the Iran-Iraq war set the stage for U.S. naval activities in the region. Initially, the United States responded to a request from Kuwait for protection of its tanker fleet; but eventually the United States, along with naval vessels from Western Europe, kept vital shipping lanes open by escorting convoys of tankers and other neutral vessels traveling up and down the Gulf.

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