4 JANUARY 1868, Page 8

The Panama Star of December 6 says Lopez, the Dictator

of Paraguay, has suddenly made peace. He has " ceded the Gran Chaco " and the free navigation of the Paraguay, and agreed to• banish himself from South America for two years. This intelli- gence requires confirmation, though these are no doubt the terms- offered to Lopez. The story of his defence of Paraguay, if it is- ever written, will be one of the most extraordinary of romances.