PANAMA CITY -- This city’s Old Town, protected by man-made 25-foot stone walls built more than three centuries ago, has been called an echo of New Orleans’ French Quarter – but better.

Along its streets, strollers find gourmet bistros, working brothels, decayed churches and boutique hotels with bougainvillea spilling from balconies. Founded centuries ago on a tiny peninsula jutting into the Pacific Ocean, Old Town has been wracked by disease, ravaged by fire and in recent years revived into a destination.

In 1997, the United Nations declared Panama City’s Casco Viejo – or Old Town – a World Heritage Site, a distinction that marked it as a historic resource for the world. Panamanians celebrated it as a draw for tourism.

Now the district is the scene of a new tussle, however. A proposed ocean causeway that would girdle Old Town has brought to the fore the issue of whether nations have a duty to ensure preservation of areas that have been deemed part of the world’s heritage. In short, does Panama owe it to humanity to guarantee Old Town’s essential character?

The tug of war pitting forces for development against those for preservation has parallels elsewhere in the world, most recently in the German city of Dresden, with its opulent baroque palaces and gardens.

Old Town was the heart of Panama City for nearly three centuries, a fusion of Spanish, French and U.S. architectural styles with a slight Caribbean vibe. While some buildings date to colonial times, many were built between 1898 and 1930.

The World Heritage designation by UNESCO noted that Old Town is less a collection of colonial-era buildings than a pastiche of neoclassical and French architecture that “lends it a special quality that other colonial cities in Latin America lack (with the exception of New Orleans, where the quality of architecture is markedly inferior).”

“It’s the only walled Spanish city on the Pacific side of the American continent,” said Tomas Mendizabal, an archaeologist.

Many Panamanians first heard of plans that would affect Old Town early last year, when a Brazilian construction conglomerate, Odebrecht, won a $776.9 million contract to build a tunnel under the area to relieve traffic woes. Residents voiced alarm, saying they’d heard nothing about the plan. Then Panamanian President Ricardo Martinelli changed the project, settling instead on a lengthy six-lane bridge 200 yards offshore from Old Town.

That alarmed experts from UNESCO, who demanded to know what the government was doing to protect Old Town, warning that it might put the site on an “endangered” list and even yank the World Heritage designation, a move the U.N. body has undertaken only twice before, in Germany and Oman.

Banners condemning the road project now hang from some buildings in Old Town, and a popular resistance movement has grown.

“They have 30,000 members, which is really not insignificant in a place like Panama City,” said Bonnie Burnham, the head of World Monuments Fund, a nonprofit group based in New York that works to preserve cultural monuments and sites.

State-purchased television ads promoting the project now fill the airwaves, and the Martinelli government has added a class-struggle overlay to the proposal, saying the road project will ease life in El Chorrillo and Barraza, traditionally restive working-class neighborhoods.