United States support for President Somoza waned after 1977, when the administration of United States President Jimmy Carter made United States military assistance conditional on improvements in human rights. International pressure, especially from the Carter administration, forced President Somoza to lift the state of siege in September 1977. Protests and antigovernment demonstrations resumed although the National Guard continued to keep an upper hand on the FSLN guerrillas.

During October 1977, a group of prominent Nicaraguan businesspeople and academics, among then Sergio Ramírez Mercado--known as Los Doce (the Group of Twelve)--met in Costa Rica and formed an anti-Somoza alliance. Los Doce strengthened the FSLN by insisting on Sandinista representation in any post-Somoza government. Nevertheless, opposition to the dictatorship remained divided. Capital flight increased, forcing President Somoza to depend on foreign loans, mostly from United States banks, to finance the government's deficit.

The dictatorship's repression of civil liberties and the lack of representative institutions slowly led to the consolidation of the opposition and armed resistance. The Somoza regime continually threatened the press, mostly the newspaper La Prensa and the critical editorials of its publisher and Udel leader, Pedro Joaquín Chamorro Cardenal. The final act in the downfall of the Somoza era began on January 10, 1978, when Chamorro was assassinated. Although his assassins were not identified at the time, evidence implicated President Somoza's son and other members of the National Guard. The opposition held the president and his guards responsible for Chamorro's murder, thus provoking mass demonstrations against the regime. The Episcopate of the Nicaraguan Roman Catholic Church issued a pastoral letter highly critical of the government, and opposition parties called for Anastasio Somoza Debayle's resignation. On January 23, a nationwide strike began, including the public and private sectors; supporters of the stride demanded an end to the dictatorship. The National Guard responded by further increasing repression and using force to contain and intimidate all government opposition. Anastasio Somoza Debayle, meanwhile, asserted his intention to stay in power until the end of his presidential term in 1981. The general strike paralyzed both private industry and government services for ten days. The political impasse and the costs to the private sector weakened the strike, and in less than two weeks most private enterprises decided to suspend their participation. The FSLN guerrillas launched a series of attacks throughout the country, but the better-equipped National Guard was able to maintain military superiority.

Indiscriminate attacks on the civilian population and abuses of human rights by National Guard members further tarnished the international image of the Somoza government and damaged the economy. In February 1978, the United States government suspended all military assistance forcing Somoza to buy weapons and equipment on the international market. The Nicaraguan economy continued its decline; the country suffered from increased capital flight, lack of investment, inflation, and unemployment.

Although still fragmented, opposition to the Somoza regime continued to grow during 1978. In March, Alfonso Robelo Callejas, an anti-Somoza businessman, established the Nicaraguan Democratic Movement (Movimiento Democrático Nicaragüense--MDN). In May 1978, the traditional Conservative Party joined Udel, Los Doce, and the MDN in creating the Broad Opposition Front (Frente Amplio de Oposición--FAO) to try to pressure President Somoza for a negotiated solution to the crisis. Although the FSLN was not represented in the FAO, the participation of Los Doce in the FAO assured a connection between the FSLN and other opposition groups. The FSLN responded to the FAO in July by establishing a political arm, the United People's Movement (Movimiento del Pueblo Unido--MPU). The MPU included leftist labor groups, student organizations, and communist and socialist parties. The MPU also promoted armed struggle and a nationwide insurrection as the only means of overthrowing the Somoza dictatorship.

The FSLN strengthened its position on August 22, 1978, when a group of the Third Way faction, led by Edén Pastora Gómez (also known as Commander Zero--Comandante Cero), took over the National Palace and held almost 2,000 government officials and members of Congress hostage for two days. With mediation from Archbishop Miguel Obando y Bravo, as well as from the Costa Rican and Panamanian ambassadors, the crisis was solved in two days. The results of the negotiations favored the insurrection and further tarnished the government's image. President Somoza had no alternative but to meet most of the rebels' demands, including the release of sixty FSLN guerrillas from prison, media dissemination of an FSLN declaration, a US$500,000 ransom, and safe passage for the hostage takers to Panama and Venezuela. The attack electrified the opposition. The humiliation of the dictatorship also affected morale within the National Guard, forcing Anastasio Somoza Debayle to replace many of its officers to forestall a coup and to launch a recruitment campaign to strengthen its rank and file. Fighting broke out throughout the country, but the National Guard, despite internal divisions, kept recapturing most of the guerrilla-occupied territories.

By the end of 1978, the failure of the FAO to obtain a negotiated solution increased the stature of the insurrection movement. In October, Los Doce withdrew from the negotiation process when the FAO persisted in seeking a negotiated settlement with the dictator, and many of FAO's members resigned in protest over the negotiations with Somoza. The insurrection movement, meanwhile, gathered strength and increased the fighting. The Somoza regime was further isolated and discredited when in November the Organization of American States (OAS) Inter-American Commission on Human Rights published a report charging the National Guard with numerous violations of human rights. The report was followed by a United Nations (UN) resolution condemning the Nicaraguan government. In December 1978, the FSLN was further strengthened when Cuban mediation led to an agreement among the three FSLN factions for a united Sandinista front. Formal unification of the FSLN occurred in March 1979.

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Source: U.S. Library of Congress