PANAMA CITY (AFP) - Panamanian authorities have released 32 of the 35 North Koreans detained since July after an undeclared cargo of Cuban arms was found on their ship, prosecutors said Thursday.

"On Tuesday, the organized crime office ordered the release of 32 crew members of the 'Chong Chon Gang,'" the prosecutor in the case Nahaniel Murgas told reporters, adding they were turned over to immigration authorities.

The remaining three North Koreans will go to trial on arms trafficking charges, Murgas said.

The North Korean freighter was stopped July 10 on suspicion of carrying drugs as it tried to enter the Panama Canal.

Instead, a search uncovered 25 containers of Cuban military hardware, including two Soviet-era MiG-21 aircraft, air defense systems, missiles and command and control vehicles.

Earlier this month, Panamanian officials said North Korea had agreed to pay a US$666,000 (S$848,000) fine for release of the crew and ship.

It was unclear whether North Korea had made that payment.

Authorities have said that crew members could face sentences of up to 12 years in prison if convicted of arms smuggling charges.

Both Havana and Pyongyang said the weapons aboard the freighter were obsolete Cuban arms being shipped to North Korea for refurbishment under a legitimate contract.

Panama, however, said the shipment violated the UN arms embargo against North Korea.

The UN has yet to make an official determination on the shipment.