WASHINGTON--Panama's military leader, Gen. Manuel Antonio Noriega, provided military training for U.S.-backed Nicaraguan rebels after he met twice in 1985 with Lt. Col. Oliver L. North, a former top Panamanian intelligence official testified yesterday.

North told Noriega in October 1985 that the Panamanian training bases were needed because U.S. laws at the time banned any direct U.S. help for the rebels fighting Nicaragua's leftist government, Jose I. Blandon said through an interpreter.

The testimony came as U.S.-Panamanian allegations have continued to worsen after formal allegations that Noriega was deeply involved in illicit drug smuggling.

Blandon, who was fired last month by Noriega as Panama's consul general in New York, also told a Senate Foreign Relations subcommittee that Vice President George Bush used Noriega to send a warning to Cuban leader Fidel Castro hours before the U.S. invasion of Grenada in 1983.

Bush, who was asked at the White House if he ever called Noriega, replied, "Nunca--Never." "Nunca" is the Spanish word for never.

Blandon, testifying under oath for a second day, also repeated his assertion that the CIA regularly sent Noriega reports on the political positions and personal lives of some U.S. senators, including Sens. Jesse Helms (R.N.C.) and Edward M. Kennedy (D-Mass).

The CIA "categorically denied" Blandon's statements on Tuesday, but he yesterday refused to change his story.

"There is no reason in my heart and in my mind to invalidate what I have said," he told the subcommittee on terrorism. "Unfortunately, what I said is true."

Late yesterday, the chairman of the Senate Intelligence Committee issued a statement saying he doubted Blandon's allegation on the CIA reports.

"Based on information previously given to me, I have no reason to believe that there is any truth to the allegation in regard to the improper furnishing of information to Noriega," Sen. David Boren (D-Okla), said.

In testimony before the subcommittee yesterday afternoon, a Panamanian pilot, his features hidden by a black hood, said Noriega contracted in 1982 with Colombia's Medellin narcotics cartel to protect cocaine shipments flown into Panama en route to the United States. The cartel is said to be responsible for 80 percent of the cocaine imported into the United States.

The pilot, 38-year-old Floyd Carlton, also said Noriega personally authorized air shipments of weapons to leftist guerillas in El Salvador and to Sandinista rebels in Nicaragua during the Sandinistas' successful fight to overthrow the government of Anastasio Somoza.

"We did nothing without his approval," Carlton said of Noriega.

In the morning session, Blandon testified that Noriega's first meeting with North, a former National Security Council aide, occurred in June 1985 on a yacht near the Panamanian city of Balboa. The second meeting was at Noriega's office four months later.

Blandon said North sought Panamanian training bases for the Contras because North told Noriega that U.S. laws banned any direct American support for the guerrillas.