The government, declaring it was taking the first "painful" step toward peace, freed an initial 100 political prisoners under a new cease-fire agreement with the Contra rebels.

"For me, the nightmare is over. I only hope for the same for the rest of the country," said Mario Mercado Selva after a release ceremony Sunday at Zona Franca prison, where scores of weeping but happy relatives met the prisoners."I just want to go home and return to my farm," said Mercado Selva, 24, who was arrested in 1984 for allegedly helping the U.S.-backed Contras.

The prisoner release was required by the nine-point cease-fire accord reached Wednesday between the government and the Contras in the border post of Sapoa.

Interior Minister Tomas Borge said the release was a bitter pill for many Sandinista supporters but proved the government's sincerity in honoring the truce pact.

"We Sandinistas have been, we are, and we will continue to be the first to comply with the Sapoa accord. We are the first to take the first step toward peace. We have been faithful to our word," Borge told the crowd.

"There are Nicaraguan brothers who were injured, who cried tears of blood at the hands of the counterrevolutionaries. For them this was a painful and dramatic decision, but it was the only way to begin to end the war."

After Borge's remarks, the name of each prisoner was read as the men filed past one-by-one to receive their release papers. Carrying potato and flour sacks filled with their belongings, the prisoners then joined their families in emotional, often tearful reunions.

Relatives arrived throughout the morning to await the release of their kin at the prison, a grouping of brightly painted blue concrete buildings set among lawns, flowers and eucalyptus trees, 7 miles east of downtown Managua.

"I am so happy, this is a very exciting day for us all," said Maria de los Angeles, 23, daughter of one of the prisoners. Her father, Juan Jose, was arrested in May 1985 and accused of being a member of the Contra forces. "He wasn't a Contra, he was head of the Liberal Party in Nuevo Segovia. He was fighting for peaceful change, but they took him anyway," she said.

Most of the prisoners were brought to Zona Franca from jails around the country.

The release was part of gradual amnesty for all political prisoners called for in the 60-day cease-fire that the government and the Contras agreed to in Sapoa after their first direct peace talks in Nicaraguan territory.

Most political prisoners are captured guerrillas and Contra sympathizers or former members of the National Guard, which terrorized the population during the rule of dictator Anastasio Somoza, who was overthrown by the 1979 Sandinista revolution.

"I did what I had to do for my people. The time I spent in jail was very, very bad for me," said Ricardo Amador, a Contra pilot whose plane was shot down over northern Nicaragua in 1983 while he taking weapons to the rebels.

Asked whether he would rejoin the Contras, he said: "I am a Contra. I don't support this government."

Amador said he would join his family in Miami "as soon as I can today, tomorrow, I don't know. I just want to leave."

The government says there are more than 3,300 political prisoners in the country 1,837 of them former guardsmen "and Somocistas," and another 1,523 captured "counterrevolutionaries." Oppositions groups and the Contras say there are some 8,000 political prisoners in Nicaraguan jails.

"The amnesty is the most difficult part of the accord to explain to the Nicaraguan people . . . because many people suffered greatly at the hands of the National Guard and the Contras," Nicaraguan President Ortega, who did not attend the ceremony, told reporters Saturday. "But what would they prefer: to liberate some prisoners or continue with the war and the deaths of more Nicaraguans?"