Panama has descended into chaos despite government promises to repeal a law allowing the sale of state-owned land in the tax-free city of Colon. The city, which has been the source of bloody scuffles for over a week, saw a new spree of mass arrests.

­The Panamanian government has announced, after a Congressional debate, that it will repeal a law passed a week ago that permitted the state to sell land it currently leases to companies in the duty-free zone. President Ricardo Martinelli confirmed the decision via Twitter, saying, "the law sought the best for Colon but it had little acceptance. We will proceed with its definitive repeal. We want peace and tranquility for all," he wrote. A final vote on the repeal is due Sunday, but the move by authorities did little to quell the public, as demonstrators attacked police with rocks and sticks in Panama City and in Colon.Local news broadcast videos showing looters stealing TVs, appliances and liquor. The clashes intensified after a protest by construction union members voicing off against the new law.Heavily armed police intervened, using tear gas and making over 200 arrests. Eleven people, a mix of protesters and police, were hurt, authorities said.It comes as at least 250 more are still in detention in Colon following last week's violent protests and clashes with law enforcement, which resulted in the deaths of at least three, including a nine year-old.The protesters demand that instead of selling land, the government raise rent and reinvest the money into Colon.The duty-free zone is home to 2,000 companies that now rent the property and employ 30,000 people. The government had hoped that the sale of land would generate $2 billion over the next 20 years.A policeman stands guard in a neighborhood after protesters looted stores during protests against a new government law, which allows for the sale of land in Panama's free trade zone of Colon, in Panama City.(Reuters / Carlos Jasso) ­Policemen inspect a store that was looted during protests against a new government law which allows for the sale of land in Panama's free trade zone of Colon, in Panama City.(Reuters / Carlos Jasso) ­Residents walk by as a policeman stands guard in a neighborhood after stores were looted during protests against a new government law, which allows for the sale of land in Panama's free trade zone of Colon, in Panama City.(Reuters / Carlos Jasso) ­A policeman stands guard after stores were looted during protests against a new government law, which allows for the sale of land in Panama's free trade zone of Colon, in Panama City.(Reuters / Carlos Jasso) ­A policeman stands with a detained suspect after protesters looted stores during protests against a new government law, which allows for the sale of land in Panama's free trade zone of Colon, in Panama City.(Reuters / Carlos Jasso) ­Policemen stand guard after stores were looted during protests against a new government law, which allows for the sale of land in Panama's free trade zone of Colon, in Panama City.(Reuters / Carlos Jasso)