MANAGUA, Nicaragua -- Rebels barricaded streets in Esteli yesterday as government troops attempted to capture what they called the last stronghold of guerillas opposed to President Anastasio Somoza.

Esteli, 90 miles from the capital city of Managua, is the northernmost city held by the rebels since the uprising began on September 9.

Surviving rebels from the towns of Leon and Chinandenga, which government troops recaptured last week, are joining the rebel forces in Esteli, but the total number of rebels is unknown.

The Sandinista forces holding Esteli appear to be better armed and organized than those in the recaptured cities. Observers have reported sandbagged cobblestone barricades thrown up across many streets. Observers also reported that the battle for Esteli could be bloodier than any previous battles.

Somoza's 7500-man National Guard controls the Pan-American highway leading into the city. They have attacked rebel positions from the air and appear ready to send in ground forces. Troops have been airlifted to the north of Esteli in an attempt to isolate the guerillas.

The Sandinista rebels, numbering an estimated 400 to 2000 at the start of the rebellion, were joined by hundreds of sympathizers and temporarily gined control of several northern cities.

The Red Cross has estimated that 500 rebels have been killed and over 3000 injured in the fighting. Guard casualties are unknown.

Although Esteli appears to be the last guerilla stronghold, sources in Managua said the rebellion may not be over. They said many rebels have fled into Honduras and Costa Rica to regroup and attack again.

Costa Rica contends that Nicaraguan forces have attacked civilians inside Costa Rica.

That nation, along with Venezuela, has called a special meeting of the Organization of American States to discuss the alleged border violations.