6000 !GCAT Here are highlights of stories reported by Hungary's press, based on information by Nepszabadsag's Hungary Around the Clock service. For further details on how to subscribe to Hungary Around the Clock, please contact Monica Kovacs at (361) 351 2440 or fax your request to (361) 351 7141. ALL PAPERS - The cabinet accepted a bill on the final account of the two social insurance funds for 1995. It also decided that the Hungarian Investment and Development Bank will continue operation as a 100 per cent state-owned institution. @ - The Free Democrats acknowledged the nomination by senior coalition partner the Socialist Party of Tamas Suchman for the post of minister of industry at the coalition consultative meeting on Thursday and discussed the constitutional drafting process. - Prime Minister Gyula Horn received US Republican Senator Richard G. Lugar in his office on Thursday. @ - A Finance Ministry committee initiated by the finance minister is to be set up to look into errors during bank and loan consolidation between 1992 and 1994 in response to a report by the State Audit Office revealing errors costing the state billions of forints. - Government commissioner Imre Karl said the government intends to introduce price increase in the energy sector proportionate to cost which will be acceptable to both investors and the public alike. - Police Colonel Erno Kiss was named head of the new Central Crime Fighting Directorate. @ - The German holding company Allianz AG has bought the remaining shares in the insurance firm Hungaria Biztosito. - The municipal general assembly of Budapest amended a decree Thursday reintroducing the use of locks on the wheels of cars exceeding the parking time limit as from October 1. MAGYAR HIRLAP - US permanent NATO representative Robert Hunter said Thursday that the US administration has a high appreciation of the Hungarian-Romanian basic treaty, while NATO had marveled at the finalisation of the document. The British Foreign Office warmly welcomed the progress made by Hungary and Romania. @ - Trading in the regional electricity companies' shares on OTC markets has come to a standstill since the government announced the delay in energy price increase. - The French Mirage 2000-5 fighter made its debut in a demonstration fight at Kecskemet air base. VILAGGAZDASAG - Half of the French company L'electricite de France's Edasz package is expected to be sold to the German firm Bayernwerk, and the entire Demasz stake is intended for sale to the Austrian company EVN. @ - The plastics company Pannonplast has realised the first of its acquisitions this year by buying the plastics processing firm Kaposplast. NAPI GAZDASAG - Hungary remains the preferred East European country for Austrian investments, according to an Austrian daily. - The net revenue of the central budget from customs duties grew HUF 322 billion in the first half of this year. NEPSZABADSAG @ - Police and customs officials suspect a medical company performing eye surgery, Optic Chance Kft, of money laundering and evading payment of over HUF 150 million corporate taxes. -- Budapest newsroom (36-1) 266 2410 6001 !GCAT !GVIO Alexander Lebed, the Kremlin security chief, flew to Chechnya on Friday for new talks with separatist leaders with an outline of a framework document on how to define its future status, Interfax news agency said. Itar-Tass news agency said that before his departure Lebed, whom President Boris Yeltsin has given sweeping but unclear powers to settle the Chechen conflict, had spoken by telephone to the Kremlin chief, who is on holiday outside Moscow. The presidential press service could not confirm that the conversation took place and had no information about the activity of Yeltsin on Friday. Interfax quoted Lebed's press secretary as saying he aimed at reaching "sweeping agreements" at the current stage of talks but adding that the rebels might need some time to consider Moscow's proposals. The spokesman gave no details of the draft plan but said it dealt with political aspects of the conflict -- the most sensitive issue in the 20-month-old war in which more than 30,000 people have been killed. Interfax said Lebed's trip would last one day and he would fly first to the capital of the neighbouring region of Dagestan and then move to the separatist region by helicopter. Lebed, 46, broke off talks on a political settlement last weekend with rebel chief-of-staff Aslan Maskhadov, saying he had to return to Moscow to iron out legal questions and cover his back against unnamed opponents within the Russian establishment. Since his return, he has been unable to get a meeting with Yeltsin, who took off on holiday on Monday near Moscow. Kremlin spokesmen say Yeltsin, 65, who asked for written details of Lebed's proposals on Tuesday, is keeping in touch with his envoy without needing to speak to him. They deny rumours that the president is ill but say he needs to rest. Prime Minister Viktor Chernomyrdin held a meeting with Lebed and top officials including the defence, interior and justice ministers and the head of the FSB security service. In an apparent setback, Interfax quoted a spokesman for Chernomyrdin as saying on Thursday: "Alexander Lebed's plan of action...in Chechnya needs a lot of work." Lebed arranged an ambitious ceasefire last week shortly after Yeltsin made him his personal envoy to Chechnya. "The war has been stopped. Now we have to create the conditions so that it does not resume," Lebed said on Thursday. The truce Lebed brokered has held so far, putting an end to a spate of fierce fighting which began on August 6 when rebel fighters seized much of the capital, Grozny. Both sides have pulled forces out of some areas and Russian and rebel fighters are jointly patrolling parts of Grozny. Tass said president of the self-styled Republic of Ichkeria Zelimkhan Yandarbiyev might take part in Friday's talks. Interfax said Yandarbiyev had on Thursday met Tim Guldimann, the Swiss diplomat who heads the Chechnya mission of the Organisation for Security and Cooperation in Europe. Few details of Lebed's proposed settlement have emerged. It must find a compromise between the referendum the separatists want, which they think would back outright secession, and Moscow's refusal to countenance full independence. Both sides indicate they might agree on a vote in some years' time, once the North Caucasus has recovered from the war. 6002 !GCAT !GPOL !GVIO Russia's security tsar Alexander Lebed flew on Friday to rebel Chechnya for talks with local separatists during which he hopes to sign a framework document on how to define its future status, Interfax news agency said. Itar-Tass news agency said that before his departure Lebed had spoken by telephone to President Boris Yeltsin, who is on holiday outside Moscow. Interfax quoted Lebed's press secretary as saying he aimed at reaching "sweeping agreements" at the current stage of talks but adding that the rebels might need some time to consider Moscow's proposals. The spokesman gave no details of the draft plan but said it dealt with political aspects of the conflict -- the most sensitive issue in the 20-month-old war in which more than 30,000 people have been killed. Interfax said Lebed's trip would last one day and he would fly first to the capital of the neighbouring region of Dagestan and then move to the separatist region by helicopter. Lebed has been seeking in vain a meeeting with Yeltsin to get his approval for the peace plan but the Russian leader stays out of the public eye and receives no visitors at his country residence. This has triggered speculation about his health. 6003 !GCAT !GDIP !GVIO The commander of NATO ground forces in Bosnia held crisis talks with Bosnian Serb leaders early on Friday after the worst day of violence since the Dayton peace agreement was signed in December. General Sir Michael Walker flew to Banja Luka to meet Bosnian Serb Acting President Biljana Plavsic after a tense confrontation eased between NATO troops and Serb police. Walker's talks with Plavsic lasted past midnight and he told reporters he would return to Sarajevo to meet Bosnia's Moslem President Alija Izetbegovic later on Friday. Walker entered the meeting with Plavsic accompanied by an aide carrying a box of guns seized earlier from Serb police, who attacked Moslems trying to return to a northeastern village. Bosnian Serb policemen beat the group of Moslems with clubs as they tried to repair war-damaged homes in Mahala. When gunfire erupted, NATO troops intervened and detained 65 Serb policemen inside a cordon of armoured vehicles and combat troops, alliance spokesmen said. A crowd of 600 Bosnian Serbs and some Serb policemen, angered by NATO's action in Mahala, later blockaded six U.N. officials in their office in the nearby town of Zvornik. The stand-off was defused when Walker flew to Mahala with a Bosnian Serb interior ministry official, who told his men to cooperate with NATO. The violence underscored steadily rising tensions across Bosnia in the run-up to general elections scheduled for September 14. Western officials have accused nationalist Serb, Croat and Moslem authorities of creating an atmosphere of political violence and intimidation before the polls in which voters will elect a three-member presidency and parliament for a loose union governing Serb and Moslem-Croat entities. The legitimacy of the elections has already been called into question after international organisers accused Serbs of manipulating the registration of Serb refugees. Citing irregularities with voter registration, the Organisation for Security and Cooperation in Europe (OSCE) has postponed municipal elections. National elections will go ahead as planned on September 14. NATO confiscated at least 20 guns from the detained Serbs in Mahala before setting them free. A U.S. general in Mahala said some of the guns may have belonged to Moslems, not only the Serbs. "We confiscated 20 infantry sidearms and four long rifles, although there is some indication the long rifles in fact belonged to the other faction," U.S. General George Casey told reporters. Casey did not elaborate, but his comments appeared to contradict earlier NATO reports saying the Serbs had staged an unprovoked attack on unarmed Moslem civilians. NATO had agreed to patrol the area, which straddles an administrative boundary between Serb and Moslem-Croat entities, he said. The Moslems had a right to return to their homes in Mahala and the inter-entity boundary line was "not an international border," Casey said. "What we've agreed to now is a seven-day joint patrolling of the area until we resolve the issue." As he spoke, 10 U.S. armoured vehicles were parked nearby while two combat helicopters circled overhead. Earlier, NATO despatched troops to Zvornik after the angry Serb mob surrounded U.N. police in Zvornik, a hardline nationalist town which expelled Moslems early in the war. Five international police officers, all unarmed, and a U.N. official were trapped in their office on the ground floor of the Drina hotel as a mob of 300 trashed U.N. cars. One of those surrounded described a volatile scene. "They have turned three U.N. vehicles on their roofs and pretty well kicked them to pieces. There are about 30 Serb policemen in the crowd and they seem to be doing very little to contain the situation," David Balham, a U.N. official from New Zealand, told Reuters by telephone. "We've locked the door at the bottom of the stairwell and we've piled some furniture up on the first floor stairwell but they are fairly inadequate defences." The crowd dispersed finally after buses arrived carrying the Serb policemen released by NATO in Mahala. Peter Fitzgerald, commissioner of the International Police Task Force (IPTF), expressed outrage at Thursday's incidents. "I will complain to the (Bosnian Serb) minister of interior about the behaviour of the (Serb) police and the embarassment that my people were put through," Fitzerald said. 6004 !GCAT !GPOL !GVOTE The leader of Surinam's former military government, Desi Bouterse, predicted on Friday his party would form the next government. Bouterse spoke after the defection of a government coalition party six days before voting to choose a new president of the South American country. "Justice has been done, because we are now the biggest party," Bouterse told a news conference after the Indonesian Party for National Unity and Solidarity (KTPI) announced it had left the government New Front coalition to join his National Democratic Party (NDP). It was the second major defection from the New Front since May 23 national elections, and it left President Ronald Venetiaan's bid for re-election in serious doubt. Venetiaan faces Jules Wijdenbosch, right-hand man to Bouterse during the military government of the 1980s, in a Sept. 5 vote of the 869-member United Peoples Assembly. The latest jockeying leaves the two main political forces evenly matched. A simple majority in the people's assembly, which includes national, regional and district councilors, is enough to claim the presidency and form a government. KTPI Chairman Robby Dragman said his party had agreed to join the NDP on condition that Bouterse hold no public office and human rights abuses committed during his regime be investigated. Bouterse, 50, is widely held responsible for the December 1982 torture-murder of 15 opposition leaders. Bouterse said on Friday he did not mind remaining behind the scenes but said any investigation of human rights abuses must also look at events leading up to the 1982 killings. The walkout of the KTPI, representing descendants of 19th-century Javanese indentured labourers, meant that even if Venetiaan won Thursday's vote, he would not have a majority in the National Assembly, where the New Front now controls only 22 of the 51 seats. Surinam, a former Dutch colony of 400,000 people on the northern coast of South America, has seen two military coups, seven years of military government and widespread guerrilla activity in the last two decades. 6005 !GCAT !GVIO The Mexican government stepped up security measures across the country on Friday after a wave of rebel attacks that killed up to 14 people and wounded more than 20. The Popular Revolutionary Army (EPR) guerrilla group that carried out the attacks in several states on the night of Aug. 28 called for a popular uprising in a statement published on Friday by a Mexico City newspaper. But the government said the guerrillas had no popular support, even though it acknowledged their presence in at least eight states. Talks with the rebels were not possible in the current situation, it said. The White House on Friday strongly condemned the rebel violence, but the State Department said it saw no threat to Mexican political or economic stability. "We condemn the violent actions of what appears to be a very ruthless, small, armed organisation of obscure groups dedicated to the overthrow of the Mexican government," White House spokesman Mike McCurry told reporters travelling with President Bill Clinton on a campaign trip in Missouri. State Department spokesman Glyn Davies, praising Mexico's economic performance since the December 1994 peso crisis, added: "It's important to underscore that the United States does not consider these actions threatening to Mexican political or economic stability." Nervous investors, attracted by higher U.S. interest rates and worried about political risk in Mexico, bailed out of Mexican stocks and drove the peso weaker in early trade. Mexican markets recovered most of the losses later. The peso closed 4.4 centavos weaker at 7.584 per dollar and the stock market ended 29 points, or less than one percent, lower. Deputy Interior Minister Arturo Nunez told international journalists the official death toll from the attacks was 13, although he added a severely wounded policeman might also have died since his last update. "Security measures have been reinforced in the strategic installations of the country," Nunez said, listing oil and gas installations, telecommunications facilities and roads. Security forces would also be "very alert" on Sunday, when President Ernesto Zedillo is due to give his second annual State of the Nation address, he said. Nunez said officials calculated between 150 and 200 rebels had taken part in the attacks, but declined to say what proportion of the EPR's combatants that represented. He repeated the government's belief that the EPR was the armed wing of a clandestine radical group called the Worker and Campesino Revolutionary Party-Union of the People (PROCUP), which first appeared in the early 1970s. "The hard core of the PROCUP would be about 50 people," he said, although he alleged that other radical organisations in different parts of the country were lending it their members for specific actions, some with no military training, to give an impression that the EPR is bigger than it really is. "New actions cannot be ruled out by this group aimed at generating ... an image abroad of a destabilised Mexico, in a situation of turbulence and war, which does not correspond to the reality of the country," he said in an earlier TV interview. Nunez said the EPR had a presence in the states of Guerrero, Puebla, Oaxaca, Chiapas and the central state of Mexico and had also carried out propaganda actions in the eastern Huasteca area, which includes Hidalgo and Veracruz states. They had also given interviews in Mexico City, he added. Residents of the capital saw soldiers patrolling such areas as the exclusive northwestern Polanco district on Thursday night. Columns of troops and armed police roared around Guerrero and Oaxaca on Thursday and Friday, witnesses said. The attacks were the worst political violence in Mexico since the Zapatista rebellion in early 1994 in the southeastern state of Chiapas. The EPR, in its statement, called for "political struggle by all the people ... to build the historical and social strength that will allow the nation to free itself of the oppressive state." Nunez dismissed the statement as "revolutionary propaganda" and repeated the government's view of the EPR as "terrorists" with whom it could not talk. By contrast he praised the Zapatistas for taking part in peace talks with the government. 6006 !GCAT !GPOL !GVIO The Mexican government stepped up security measures across the country on Friday and sought to calm fears raised by a wave of rebel attacks that killed at least 12 people and wounded more than 20. The Popular Revolutionary Army (EPR) guerrilla group that carried out the attacks in several states on the night of Aug. 28 called for a popular uprising in a statement published on Friday by a Mexico City newspaper. Nervous investors, attracted by higher U.S. interest rates and worried about political risk in Mexico, baled out of Mexican stocks and drove the peso weaker in early trade. "Security measures have been reinforced in the strategic installations of the country," Deputy Interior Minister Arturo Nunez said in a television interview. "New actions cannot be ruled out by this group aimed at generating ... an image abroad of a destabilised Mexico, in a situation of turbulence and war, which does not correspond to the reality of the country." Mexico City residents saw soldiers patrolling such areas as the exclusive northwestern Polanco district on Thursday night. The peso took a nosedive in early Friday trade and stocks fell sharply as investors scrabbled for dollars. "There is demand (for dollars) from everywhere. People are taking them at almost any level," one dealer said. "Foreigners are saying that Mexico is pure risk while the (U.S. 30-year Treasury) bond is going up and looks like an attractive alternative to get out of the Mexican market," another foreign exchange trader said. Hundreds of masked, heavily armed guerrillas stormed small villages in southern and central Mexico and attacked police and military posts on Wednesday night and Thursday morning in the worst political violence in Mexico since the Zapatista rebellion in early 1994 in the southeastern state of Chiapas. The attacks punctured the government's claim the rebel group was a mere "pantomime" and appeared to be closely coordinated, focusing on a handful of towns, including the tourist resort of Huatulco, in the central and southern states of Guerrero, Mexico and Oaxaca. Rebels also distributed propaganda and set up roadblocks in the southern states of Tabasco and Chiapas, where the Zapatistas are negotiating peace with the government. The EPR called for a popular uprising against the government in a statement published on Friday in the newspaper Excelsior. "Our actions at this time have a self-defence nature and the aim of restoring legality, popular sovereignty and respect for human rights," it group said. "It is the moment for political struggle by all the people ... to build the historical and social strength that will allow the nation to free itself of the oppressive state." Government officials condemned the EPR's attacks as cowardly acts of terror and said the group, which emerged two months ago in Guerrero, was the armed wing of a clandestine radical leftist group known as PROCUP, which first appeared in the early 1970s. Two jailed PROCUP leaders were taken from prisons in Mexico City to the maximum security prison of Almoloya de Juarez outside the capital overnight to ward off any jailbreak attempts, Nunez said. He said 10 members of the security forces and two rebels were killed in the attacks. Other official counts put the death toll at at least 14. Interior Ministry spokesman Dionisio Perez Jacome said six suspected members of the EPR had been arrested following the attacks and were being questioned. 6007 !GCAT !GVIO Leftist Mexican guerrillas, whose surprise attacks this week killed at least 12 people, called for a popular uprising against the government in a statement published on Friday by Excelsior newspaper. "Our actions at this time have a self-defence nature and the aim of restoring legality, popular sovereignty and respect for human rights," the Popular Revolutionary Army (EPR) said. "It is the moment for political struggle by all the people ... to build the historical and social strength that will allow the nation to free itself of the oppressive State." Excelsior said the statement was left for reporters to collect at a newspaper booth in Mexico City. The EPR, which first appeared on June 28 in Guerrero, mounted coordinated attacks and propaganda actions in six states in south and central Mexico on the night of Aug. 28. The attacks, aimed at army and police units, left at least 12 people dead including two rebels and wounded at least 22. The group's statement accused the government of President Ernesto Zedillo of being the latest in a long line of Mexican administrations to have used repression, torture and murder to crush leftist movements in the country and traced its own lineage back to guerrilla movements in the early 1960s. "Since 1963 when the first revolutionary armed organisations appeared, the political approach favoured by the Mexican State has been to wipe out the buds of insurgency," the EPR statement said. The government on Thursday called the EPR a "clearly terrorist" group, saying it was in fact the armed wing of the clandestine leftist organisation PROCUP, which first appeared in the early 1970s. 6008 !GCAT !GVIO Eleven people, including a television cameraman whose filming angered military police, were seriously injured on Thursday in a fresh clash between security forces and peasant protesters in Colombia's southern Caqueta province, authorities said. The latest clash, in which most of the injured were wounded by gunshot wounds, came amid a growing controversy in Bogota over curbs on television coverage of the protests, which have rocked Caqueta and two other southern provinces since last month. Under a resolution announced last Friday -- when at least four protesters were killed in Caqueta -- the state-run National Television Commission banned all TV reports about the protests based on anything but official sources. It also barred TV news programmes from showing any images related to the protests "that reflect situations of extreme human suffering." Dramatic images of troops clubbing a protester in a rain- soaked field were nonetheless broadcast over Colombian television on Thursday evening. The footage was taken by camerman Luis Gonzalo Velez of the 12:30 news programme, who kept his camera running as rifle-wielding MPs then came racing down a roadway on foot, hurling insults at him and demanding that he hand over the video cassette he had just filmed. The footage stops with the sound of a crash as the camera drops suddenly to one side. Velez was flown to a Bogota hospital on Thursday evening with multiple trauma injuries that Hans Sarmiento, a 12:30 producer who covered Thursday's melee along with Velez, said were inflicted by at least one soldier beating him with the butt of his rifle. Witnesses said Thursday's clash occurred when thousands of peasants, barred from entering Caqueta's provincial capital of Florencia but virtually washed out of makeshift camps by heavy rains overnight, surged toward a military barricade on a bridge leading into the city. Troops opened fire with tear gas and live ammunition to halt the drive across the bridge, the witnesses, including Sarmineto, said. A report from Florencia's Maria Inmaculada hospital said 11 people with serious injuries were taken there after protesters retreated from the bridge -- including a 19-year-old man shot in his right eye. Hundreds of thousands of peasants have staged mass protests in Caqueta and neighbouring Putumayo and Guaviare provinces since last month against the government's U.S.-backed drug crop eradication programme. At least 12 peasant growers of coca leaf -- the raw material for cocaine -- have been killed in the protests so far as they pressed demands for more government aid for crop substitution and for the eradication of grinding levels of poverty in Colombia's jungle-covered south. 6009 !GCAT !GVIO Leftist guerrillas launched the biggest rebel attacks seen in Mexico in more than two years, killing at least 12 people in what the government on Thursday condemned as acts of brutal terror. Witnesses and officials said scores of masked, heavily-armed guerrillas from the self-styled Popular Revolutionary Army (EPR) attacked police and military posts late on Wednesday and early on Thursday. The attacks, which appeared to be closely coordinated, were focused on six towns in Guerrero and Oaxaca states. They marked the most serious fighting since the Zapatista rebellion erupted in the southeastern state of Chiapas in January 1994. Deputy Interior Minister Arturo Nunez said the rebels also attacked an army post in the central state of Mexico near the capital, in which three people were wounded, and carried out propaganda actions in Chiapas and Tabasco states. Radio station Radio Red said the rebels tried to sabotage a hydroelectric power plant in Puebla state. There was no official confirmation of that report. "Even the most sophisticated information and intelligence apparatus cannot always detect the operation of organisations of a clearly terrorist character," Nunez told a news conference, adding that the EPR had used "violent, cruel and cowardly" tactics. Nunez said 10 members of the security forces and two rebels were killed in the attacks while 22 people -- policemen, soldiers and civilians -- were injured. Several rebels were wounded in Oaxaca and were being questioned, he added. In Guerrero, state government spokesman Roberto Alvarez said five people had been arrested by police in the town of Tixtla "on suspicion of involvement" in one of the attacks. Nunez identified the EPR, which emerged just two months ago in Guerrero, as the armed wing of a clandestine radical leftist group known as PROCUP, which first appeared in the early 1970s. Known members of PROCUP would be taken in for questioning, he said. The Zapatistas, who are in peace talks with the government, have said they have nothing to do with the EPR. Ruling party legislator Pablo Salazar said President Ernesto Zedillo, in a meeting on Thursday with lawmakers and security officials, made a clear distinction between the Zapatistas' willingness to talk to the government and the EPR's "terror" tactics. Mexican financial markets, already hit by a drop in U.S. stock prices, fell after the attacks. The main stock market index closed almost 76 points, or 2.23 percent, lower. The peso ended four centavos weaker at 7.54 against the dollar. Other official counts put the death toll as high as 14. Oaxaca government officials said at least 12 people, including sailors, police, rebels and two civilians, died in two lengthy gunfights, one near the Pacific tourist resort of Huatulco and another in the mountain town of Tlaxiaco. Oaxaca government spokesman Roberto Santiago told Reuters the rebels had also taken hostage a policeman from Tlaxiaco and a sailor from Huatulco's naval base. Gov. Diodoro Carrasco appealed for calm but also urged the population to be on the lookout for "possible new attacks." About 50 rebels took part in the Tlaxiaco attack, killing three policemen in the town, a radio control base with a small airport, officials said. In Huatulco, up to 80 gunmen attacked police posts and a naval base, killing three sailors, two policemen and two civilians, one of whom was hit by machine-gun fire as he drove by, the Oaxaca statement said. Two rebels in olive-green uniforms were killed when police sought to repel the assault. In neighbouring Guerrero, officials said two police were gunned down in one attack and five soldiers were wounded in another on an army barracks. Officials said the attacks appeared to be coordinated and the guerrillas numbered at least 130. 6010 !GCAT !GDIP !GVIO A high-level U.S. delegation led by National Security Adviser Anthony Lake arrived in Haiti's capital on Friday for a brief visit in response to a recent wave of violence, U.S. Embassy officials said. The visit, which embassy sources said was meant to be low-key, will include meetings with President Rene Preval and officials of the Haitian government and United Nations. "This is a one-day visit in which the U.N. mission and recent developments in Haiti will be discussed," said U.S. Embassy spokewoman Meg Gilroy. The delegation included Lake, Deputy Secretary of State Strobe Talbott and General John Sheehan, commander in chief of U.S. Atlantic Command. Those close to the preparations said the visit was hastily planned on Thursday night in response to increasing political unrest. Two political assassinations, an assault on a police station by armed men in military fatigues, and various violent attacks, mostly within the capital, have raised fears of escalating political strife. Rumours of a plot to overthrow the Haitian government have circulated for months. Democratic rule was restored to Haiti in October 1994 following a military intervention by U.S.-led multinational forces, three years after Haiti's first freely elected president, Jean-Bertrand Aristide, was ousted by a Haitian army junta. The recent violence is widely believed to be a destabilisation effort by former members of the Haitian military, which was disbanded by Aristide on his return. 6011 !GCAT !GCRIM !GVIO Eight claymore mines fitted with powerful C-4 plastic explosives were found stashed in a real estate office on Friday located about two blocks from Colombia's presidential palace, police said. "These are powerful weapons," a spokesman with the Municipal Police told Reuters by telephone, adding that police had not ruled out a possible terrorist attack on the ornate Casa de Narino presidential palace in Bogota's historic downtown area. "They could cause serious damage as much as 500 meters (yards) away from wherever they were detonated," the spokesman added. He said police backed by explosive experts were combing the area in search of other possible weapons or explosive devices. The police spokeman said plastic explosive like C-4 is not a normal component in claymore mines. But he said the eight mines seized by police had been "specially adapted." The spokesman declined further comment, except to say that two women and a man identified as a lawyer had been arrested in connection with the landmines. 6012 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Workers at state-owned Salvador copper mine will vote Friday evening on whether to continue their 16-hour-old strike, which had widely varying impacts in different parts of the mine, union members said. Workers were meeting at a theater to decide whether to continue the strike, which paralyzed the copper mine but failed to have any effect at the mine's smelter and refinery, both Codelco and union officials said. "Everything is being decided in the assembly," said one union official by telephone from the mine in northern Chile. Officials at state mining company Codelco and the unions were in rare agreement on the strike's impact -- almost total at the open pit mine and the concentrator, almost nil at the refinery and smelter. Codelco officials said the strike's uneven impact suggested support was weak. "The situation is very ambiguous now...but it looks like this strike will be short," said one. Officials said earlier the mine had three days worth of stocks to keep the smelter and refinery going before they would have to haul concentrates from Codelco's Chuquicamata mine, about 500 kms away. The smallest of Codelco's four mines, Salvador has capacity to produce about 90,000 tonnes of fine copper a year. --Roger Atwood, Santiago newsroom +56-2-699-5595 x211 6013 !GCAT !GCRIM !GDIP !GVIO The U.S. ambassador to the United Nations insisted on Friday that the organisation must transform itself to better fight such threats as terrorism and drug trafficking. "We firmly believe the United Nations needs to go through a rigorous process of change," Madeleine Albright told a news conference at the end of a three-day visit to Uruguay. The United States wants "the next secretary-general to be someone with the vision to take the organisation into the next century," to deal with threats like drug trafficking, terrorism and controlling nuclear energy, she said. "We have to count on somebody that prioritizes reform of the U.N.," she said, referring to the replacement for Boutros Boutros-Ghali, the current secretary-general. Albright also denied press reports that her current Latin American trip was intended to gain support for putting pressure on Colombian President Ernesto Samper, under fire in his country to drop his alleged contacts with drug traffickers. Albright will next travel to Chile, Bolivia, Honduras and Guatemala. 6014 !C12 !C42 !CCAT !E41 !ECAT !GCAT !GCRIM !GENV !GJOB Ecuador's largest union is putting the finishing touches to a lawsuit for environmental damage against U.S. oil firm Maxus, a subsidiary of Argentina's YPF, a union representative said on Friday. "Yesterday we decided to sue Maxus for the harm it did against the fragile region where it operates," the president of Ecuador's Federation of Oil Workers, Ivan Narvaez, told Reuters. "The 4,500 workers of Petroecuador agree on the measure." He said the organization was coordinating the lawsuit with a group of lawyers in New York where the suit will be filed. The union leaders said the sum for which Maxus will be sued has not been decided yet for its alleged damage to the Yasun National Park. This would be the second time that an oil firm is sued in Ecuador, as a group of Amazon indians went to court against Texaco in November 1993 for a sum of $800 million. The suit is ongoing in New York courts. The lawsuit against Maxus comes on the heels of a decision by new President Abdal Bucaram forcing Maxus to a change in its contract with Ecuador and sharing more revenue from the exploitation of its oil fields. The company has been operating in Ecuador for the past nine years and according to state firm Petroecuador it has invested $900 million over that period. --Maria Veronica Barreiros, Quito Newsroom, 5932 258433 6015 !C42 !CCAT !E41 !ECAT !GCAT !GJOB !GPOL Uruguayan banks, industry and transport were paralysed on Friday by a 24-hour general strike led by the PIT-CNT union confederation. The strike was called to support teachers and students in their 15-day-old dispute with the government over planned education reforms. Unions said the reforms would mean fewer jobs for teachers and restrict access to higher education. "We think that ... backing (for the strike) is high in Montevideo," PIT-CNT official Edgardo Clavijo told Reuters. He said "great numbers" of industrial and transport workers joined the strike but shop workers were less enthusiastic. 6016 !GCAT !GPOL !GPRO Relatives and followers of former populist ruler Gen. Juan Peron reacted indignantly on Friday to plans to exhume his body for genetic tests demanded by a woman who claims to be his daughter. Martha Susana Holgado, 62, claims to be the illegitimate daughter of the legendary president, who ruled from 1946-55 and 1973-74. She won a court appeal to have his body exhumed from a grave in Buenos Aires' La Chacarita cemetery to test for a match of their DNA, or genetic material. Holgado, who lives in Madrid, says her real name is Lucia Virginia Peron and that her mother Cecilia Demarchi was the lover of Peron after the death of his young wife Eva in 1952. "Truth always triumphs," she told Argentine television from Spain. "I want to be vindicated, with name and surname, for my sake and for my son's sake." Peron had no children from his three marriages and his family insists he was sterile as a result of an accident. "We have shown with documents and family letters that General Peron could not have children -- sadly, because it is what he most wanted," said his great nephew Alejandro Peron. The general's surviving third wife Maria Estela Martinez de Peron, known as Isabel, has agreed to the exhumation and Holgado's lawyer Ricardo Monner Sans told reporters "it will not necessarily involve excessive handling of the body. But Alejandro Peron said his family opposed disturbing the general's remains for a DNA test: "We have nothing to lose practically, but it's a personal outrage." He also asked why Holgado had waited so long to demand her claimed birthright. Holgado, who has a clear facial resemblance to Juan Peron, told a television interviewer two years ago when she first made her claim that she had waited "because my mother was still alive and I had a pact of silence with my father Peron." At that time she underwent a lie detector test by an American expert who said she was telling the truth. Officials from Argentina's current Peronist government, in power under President Carlos Menem since 1989, also expressed indignation at the prospect of Peron's bones being disturbed. "It's shocking. As a Peronist it bothers me, it makes me feel bad," Jorge Matzkin, head of the Peronist majority in the lower house of Congress, told Reuters. More than just Argentina's most famous surname could be at stake; relatives are involved in drawn-out legal battles over Swiss bank accounts in his name. Argentina has a morbid fascination with the corpses of Eva and Juan Peron, especially since his hands were cut off by thieves who broke into his tomb 13 years after his death in 1974. Their motive is a mystery. One theory has it that they wanted his fingerprints to access the Swiss bank accounts. 6017 !GCAT !GCRIM Venezuela said on Friday it would send a large air and river-borne military task force next week to arrest illegal gold miners, many thought to be Brazilian, working in the remote southern Amazon region. Defence Minister Gen. Pedro Nicolas Valencia Vivas said the force of 300 national guardsmen, eight riverboat launches, two Super-Puma helicopters and six planes would evict an estimated 400 "garimperos," illegal gold miners, from the Amazon jungle near the Casiquiare tributary of the Orinocco River on the Brazilian border on Tuesday. He rejected suggestions the force should bomb the area. "We'll be acting in accordance with human rights ... Moreover, we can't bomb until we're sure what's there," he said. 6018 !GCAT !GVIO Eight people including six leftist guerrillas were killed in the latest round of political violence across Colombia, authorities said on Friday. Military sources said the violence included a rebel attack on two small towns on the outskirts of the capital and a firefight between troops and guerrillas in northern Santander province. Five National Liberation Army (ELN) guerrillas were killed in the firefight early on Friday near the town of Cepita and a sixth was gunned down in a shootout with security forces in the Santander oil production centre of Barrancabermeja, the sources said. Another guerrilla group, the Revolutionary Armed Forces of Colombia (FARC), killed a police corporal and a cattleman in a Thursday night attack on Jerusalem in central Cundinamarca province just 30 miles (50 km) outside the capital. The Marxist-led FARC and ELN, Colombia's two largest leftist guerrilla groups, have been fighting to topple the government since the mid-1960s. 6019 !E12 !E21 !E211 !ECAT !GCAT !GPOL The head of the ruling party in Argentina's Chamber of Deputies forecast Friday that legislators will approve proposed fiscal measures in September after only minor changes that will not alter expected income. "The key elements of the proposal will not be changed," Jorge Matzkin told Reuters. "There will some small changes but the amount of money is more or less the same." The measures, announced by new Economy Minister Roque Fernandez earlier this month, are designed to shrink a budget deficit that he warns could reach $6.6 billion by year-end. Matzkin, head of the Peronist Party bloc in the lower house, said in an interview he is confident the revenue boosting measures will be approved by the end of September. "It won't be easy but I think I can get it," he said. Matzkin expects deputies to approve the bill in a session September 11 and then pass it to the Senate, where the ruling party has a clear majority. After Senators alter the bill, it returns to the lower house for a final vote. The Peronists need 130 votes to secure passage but have only 129 deputies. Matzkin said there may be "three or four" dissidents but expected Peronists to be able to enlist lawmakers from provincial parties to give them a majority. Most of the funds from the measures come from two key tax changes. One is a doubling in the wealth tax to one percent from 0.5 percent, applied on assets of more than $100,000. The government also plans an increase in the tax on gasoline and diesel. Financial markets weakened earlier this week after the budget committee of the lower house dropped an article which would give the central government exclusive access to cash from the fuel tax, rather than share it with provinces. However, Matzkin said in the interview the final version of the bill will ensure increases from fuel taxes go to the central government only. To compensate the provinces, the government has decided to share income from the increase in the wealth tax. "That was the deal," he said. "On fuel tax, the increases will go to the central government destined for social programs. The wealth tax was not shared and will now be shared." The head of the Buenos Aires Stock Exchange on Thursday complained that the tax increase would discourage investment in financial markets. When the government decided to extend wealth tax to stock and bond holdings after the Tequila crisis last year, it promised the move would be temporary. However, Matzkin refused to budge. "We can't tax consumption or other sectors any more. Our evaluation is that the weight of tax is quite well spread in different sectors of society." Matzkin added that the legislators plan to approve in the same bill a government request for authorization to seek an additional $4.0 billion in financing. -- Buenos Aires Newsroom, 541 318 0618 6020 !E21 !E211 !ECAT !GCAT !GPOL Brazilian Planning Minister Antonio Kandir said on Friday that the draft version of the 1997 federal budget sent to Congress had a better chance of surviving in its current form than previous budget blueprints. "This budget has a great chance of being realized," Kandir told reporters at a news conference. The federal government's 1996 budget was only recently approved by Congress, despite a constitutional requirement that budgets clear the two houses by the end of the previous year. Kandir's 1997 forecast of revenue and spendings projects an 0.8 percent primary surplus and an operational deficit of 1.07 percent, compared with an estimated 0.59 percent primary and 1.38 percent operational deficit this year. The minister said Brazil's more restrained inflation had made the task of drawing up the 1997 budget simpler than in previous years. He also said that any amendments approved by Congress for additional outlays must be balanced by cuts from items included in the draft. Sen. Jose Sarney, president of the Senate, said he might seek to broker an interparty accord to block requests for additional funding from individual congressmen, according to a published report. Instead, each party would present its own collective proposal for additional spending, he told Invest News. Sarney said such an accord would help speed the passage of the budget by Congress, where it is typically becomes bogged down in a sea of requests for more spending. -- William Schomberg, Brasilia newsroom 5561 2230358 6021 !E21 !E212 !ECAT !GCAT !GENV A bilateral debt reduction accord with the United States has provided some $4.1 million in funding for environmental projects, the Jamaican government said on Friday. More than 200 projects have benefited from the program, started in 1991 as part of the Enterprise for the Americas debt reduction program. Under the plan, a substantial portion of Jamaica's PL-480 and USAID debt was either forgiven or rescheduled. The rescheduled debt was paid, in local currency, to the Environmental Foundation of Jamaica, whose board consists of representatives from the U.S. and Jamaican governments, and local environmental groups. The Jamaican government said the foundation is trying to set up a permanent trust fund. 6022 !GCAT !GCRIM !GVIO Flamboyant former Surinamese guerrilla leader Ronny Brunswijk walked free on Friday after charges of attempted murder were dropped, police said. Brunswijk had been in police custody for 10 days after Freddy Pinas, a Surinamese-born visitor from the Netherlands, accused Brunswijk of trying to kill him in a bar-room brawl in the mining town of Moengo 56 miles (90 km) east of Paramaribo. Brunswijk, 35, denied the charge and reached an agreement with Pinas after replacing a golden necklace lost in the scuffle. It was the second time Brunswijk had been charged with attempted murder in less than two years. In 1994 he served two months for shooting a thief in the backside. Brunswijk, who led a rebel group against the military regime of Desi Bouterse in the late 1980s, is now a successful businessman with mining and logging interests. 6023 !GCAT !GCRIM !GDIP Washington is hopeful that tough new asset forfeiture laws will soon be adopted in Colombia that would impoverish the country's billionaire drug kingpins, U.S. Ambassador Myles Frechette said on Friday. "Asset forfeiture is a key piece of legislation," Frechette said of a bill that is to be presented to the current session of Colombia's Congress by the government of President Ernesto Samper. "If asset forfeiture were instituted in Colombia it would be perhaps the most powerful weapon the Colombian state would have to combat narco-traffickers and other forms of international crime," Frechette told a gathering of foreign journalists. He added, however, that any future law allowing for the seizure of drug lords' assets would have to include a clause allowing for "retroactivity ... because otherwise what you've created is an amnesty." The government of Samper, who has been accused of accepting a fortune in drug money to finance his 1994 election campaign, is under heavy U.S. pressure to enact anti-drug legislation this year to shore up Colombia's extremely shaky ties with Washington. If the legislation fails to pass by year's end, crippling U.S. economic sanctions could be imposed on the Andean nation early next year. Frechette declined to speculate about possible trade sanctions. But he suggested that the Colombian government was heading in the right direction to avert them. "The U.S. government is pleased the government is introducing this new tougher legislation which, if passed, would bring Colombia more in line with international standards," he said. 6024 !C21 !C24 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Codelco's strike-bound Salvador mine has enough copper concentrates to keep up production at the Potrerillos smelter and refinery for three days, a Codelco official said. If the strike continues and those stocks run out, the refinery will bring in copper concentrates from Codelco's Chuquicamata mine, said the official. "There are stocks for three days at the refinery and smelter," he said. The Salvador open pit mine and the concentrator have been paralyzed by the strike, which started at midnight local time (0400 GMT), said the official. But Potrerillos and the division's Pacific port of Barquito are both working at near-normal levels, Codelco officials said. All three locales together form state-owned Codelco's Salvador division, which employs some 2,400 people. Codelco officials will closely evaluate absenteeism levels later Friday, said the official by telephone from the mine in northern Chile's arid Third Region. Under local labor codes, if more than 50 percent of workers have shown up for work after the three Friday shifts, then Codelco's latest wage offer is automatically accepted and the strike ends, said the official. But with near-total absenteeism at the mine itself, where about 1,400 of the division's 2,400 unionized employees work, that outcome looked unlikely. The third shift starts at 3 p.m. local time (1900 GMT), meaning full absenteeism figures won't be known until after that time, the official said. --Roger Atwood, Santiago newsroom +56-2-699-5595 x211 6025 !GCAT !GCRIM A Colombian official's proposal that prostitutes be forcibly prevented from having children sparked an outcry this week, with Bogota Mayor Antanas Mockus the latest public figure to protest the idea. "We all know that there are too many sons of bitches in the country, but they're not sons of whores," Mockus said. "I'm sure that there are many prostitutes who can raise children better than I can," he added in an interview with the QAP television news programme broadcast late on Thursday. Mockus, who calls himself a "neo-anarchist," responded to a call by Jose Fernando Castro, the government's human rights ombudsman, for the sterilisation of all Colombian prostitutes. The proposal prompted an outcry from human rights groups and the Roman Catholic church and led to widespread calls for President Ernesto Samper to sack Castro. 6026 !GCAT !GPOL Surinam's ruling New Front coalition was left in tatters on Friday after one of the four coalition members announced it would side with the opposition in a vote to choose a new president next week. The Indonesian Party for National Unity and Solidarity (KTPI) said late on Thursday it had joined the opposition block led by former military strongman Desi Bouterse's National Democratic Party (NDP). It was the second major defection from the New Front since May 23 national elections and left President Ronald Venetiaan's bid for re-election in serious doubt. Venetiaan faces Jules Wijdenbosch, right-hand man to Bouterse during the military regime of the 1980s, in a Sept. 5 vote of the 869-member United Peoples Assembly (VVV). The latest jockeying leaves the two main political forces evenly matched. A simple majority in the VVV, which includes national, regional and district councilors, is enough to claim the presidency and form a government. The walkout of the KTPI, made up of descendants of 19th century Javanese indentured labourers, means that even should Venetiaan win he would not have a governable majority in the national assembly, where the New Front now controls just 22 of the 51 seats. KTPI Chairman Robby Dragman said his party agreed to join the NDP on condition that Bouterse holds no public office and human rights abuses during his regime are investigated. The former Dutch colony of 400,000 people has endured two military coups, seven years of dictatorship and widespread guerrilla activity in the last two decades. 6027 !GCAT !GDIP Brazilian President Fernando Henrique Cardoso will visit South Africa from Nov. 26 to 28, the Foreign Ministry said on Friday. In a statement, it said several agreements were likely to be signed during the visit but did not specify what areas the accords would cover. The end of apartheid in South Africa and the election of President Nelson Mandela in 1994 made possible a "new phase" in relations, the ministry said. 6028 !C24 !CCAT !GCAT !GENT The French Caribbean-based Fabre Domergue group is putting up 30 percent of the cost of a $25 million film studio project to be built in French Guiana, company officials said on Friday. Benoit Le Cesne, general secretary of the Groupe Fabre Domergue, told a news conference the Palame Studio, to be located near Cayenne in the French overseas department, would include two feature-film studios with a total of 1.900 square metres (yards) along with film infrastructure, projection and editing rooms. The group's interests include real estate, tourism and banana growing. The project will attempt to compete with film studios in Caracas, Venezuela and Belem, Brazil that use on-location tropical jungle settings. Officials said the studio would attempt to produce up to eight feature films per year, mostly for European and American companies. The French authorities have already issued a permit for construction to begin, they said. "We have a double development strategy -- to continue our hotel development where there is potential profit...and to diversify outside our core activities into new projects including film," Le Cesne said. He said several other firms were putting up the remaining 70 percent of the project's cost but declined to name them. Le Cesne said Fabre Doumergue realised a net profit in 1995 of 50 million French francs ($9.9 million) on turnover of 700 million French francs. ($ = 5.067 French Francs) 6029 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Chile's state copper company Codelco said its Salvador copper mine has been paralyzed by a strike which started at midnight, although the division's smelter and refinery and small sea port are working normally. "The mine has been paralyzed," division spokesman Luis Lodi told Reuters by telephone from the pit in northern Chile. The division's Potrerillos smelter and refinery and and the port known as Barquito are operating as usual with over 85 percent of their workers defying the strike call, he said. The situation at the mine's concentrator was unclear but first signs were that workers had walked off the job, he said. Lodi said Codelco officials were working to determine the exact level of absenteeism at the mine, the smallest of the corporation's four divisions. Miners began an indefinite strike at midnight local time (0400 GMT) demanding wage increases and other benefits. Despite the start of the strike, Codelco and the pit's unions have been holding informal negotiations, said Lodi. "There are contacts between Codelco and the unions. There have been informal talks," he said. The mine, which lies near the town of Copiapo, produced 85,878 tonnes of fine copper last year. The whole division includes the mine and concentrator, Potrerillos, a small heap leaching plant and the sea port. The mine's unionized workers number about 2,400 of whom some 1,400 work at the pit itself. -- Margaret Orgill, Santiago newsroom, 562-699-5595 x212 6030 !E41 !E411 !ECAT !GCAT !GJOB Employment levels in Brazil's industrial sector fell 0.2 percent in June from May, the National Statistics Institute (IBGE) said in a statement. In the two years since Brazil introduced its economic stabilization Real Plan the industrial sector has seen an 11 percent reduction in its manual labor force, the IBGE said. The IBGE said June's figure reflected a fall in industrial employment in the south of the country and Minas Gerais state. Industrial employment levels in Sao Paulo remained stable in June, while Rio de Janeiro and states in the northeast of Brazil increased the number of jobs in industry, it added. The tobacco sector experienced the greatest number of job losses in June, down 14.2 percent. In the first half of 1996, industrial employment fell in all areas of Brazil, with Sao Paulo state recording the largest fall at 14.7 percent, followed by the south of Brazil with a decline of 11.4 percent, the IBGE said. Salaries paid in June also decreased, down one percent from May and 10 percent from June last year, according to the IBGE. Total hours worked in the industrial sector increased 1.4 percent in May compared with April, but fell 0.9 percent compared with May 1995, the IBGE said. -- Simona de Logu, Rio de Janeiro newsroom, 5521 507 4151 6031 !C12 !CCAT !GCAT !GCRIM !GPOL Brazilian federal police said on Friday they had charged the daughter-in-law of President Fernando Henrique Cardoso with fraud in connection with the multi-billion dollar failure of Banco Nacional. Federal police charged Ana Lucia Magalhaes Pinto, the former vice-president of Banco Nacional's council, with fraudulent management and irregularities in the bank's balance sheet, which reported false information, a spokeswoman said. The charges against Pinto, who is married to Cardoso's son Paulo Henrique, have not damaged the president's standing so far. A government-sponsored poll published on Thursday showed Cardoso would be reelected as president by a wide margin with 41 percent of the vote if a general election were held now. Pinto has denied the fraud charges, saying she was not aware of Banco Nacional's financial difficulties or any fraudulent accounting. She is the fourth member of the Magalhaes Pinto family, which controlled Banco Nacional, to be charged with fraud. Her brothers, Marcos, the bank's former president, and Eduardo and Fernando, former vice-presidents, have also been charged. The federal police is investigating allegations that Banco Nacional, which was among Brazil's top 10 banks, had hidden a loss of $7.5 billion by manipulating its balance sheets over a 10-year period. Brazil's Central Bank intervened in Banco Nacional in November last year and forced the sell-off of its healthy assets to private bank Unibanco. 6032 !GCAT !GVIO Having doused a series of economic and political brushfires during the first 20 months of his term, Mexican President Ernesto Zedillo faces a fresh crisis after a new armed rebellion flared this week. Three days before Zedillo delivers his second State of the Nation address on Sunday, rebels of the Popular Revolutionary Army (EPR) launched coordinated attacks on military and police targets on the night of August 28 in several states, killing at least 12 people and wounding more than 20. It is the second rebellion in Mexico in three years, following the 1994 revolt of Zapatista rebels in southern Chiapas state -- an uprising currently on hold while rebels talk peace with the government. But it was no less shocking. Images on prime-time television of dead police and soldiers, most of them young and covered in blood, stunned Mexicans and made a mockery of government assurances the EPR was a mere "pantomime." "This is not a pantomime, this is for real, and we need honest answers from the government," Felipe Calderon, leader of the opposition National Action Party, told reporters on Thursday. The fighting turned up the political heat on Zedillo days before his keynote address, which officials hoped would mark a turning point for the embattled president. Zedillo, who had to deal with the December 1994 peso collapse only weeks after taking office, has got off to arguably the worst start of any modern Mexican president. Some analysts suggested the EPR's attack was timed to spoil Zedillo's address, known as the Informe. "You have to put this in context of the Informe," said Roberto Blum, an analyst at Mexico's independent Centre for Development and Research. The rebellion came just as the country's mood was beginning to improve following three years of political and economic woes -- including the murders of leading politicians and a tacit but virulent war between Zedillo and his disgraced predecessor Carlos Salinas de Gortari, whose brother Zedillo was arrested on murder and corruption charges. Mexico's peso, after tumbling during 1995 and causing the worst economic slump in 50 years, has been the world's strongest currency so far this year, allowing the economy to rebound 7.2 percent in the second quarter. Officials, visibly relieved, had begun to trumpet other successes of their economic programme, such as a complex scheme of debt relief programmes that economists say probably saved the bank system from collapse. As happened with the Zapatistas, however, the EPR rebellion has again turned the spotlight away from Mexico's polished leaders and modern economic policies to the Mexico of impoverished masses fed up with corruption and 67 years of single-party rule. "We risk getting caught in the crossfire of a guerrilla group whose objectives we know nothing about and a government whose policies have made the public miserable," the left-of-centre Party of the Democratic Revolution said in a statement. Analysts said Zedillo has successfully escaped blame for Mexico's political troubles by painting himself as a reformer trying to control hardline politicians within his party who oppose democracy. A recent move by his attorney general to fire 737 corrupt police officers won praise as a step to clean up Mexico's notoriously corrupt police forces. But if Zedillo does nothing to curb hardline politicians or the growing influence of drug traffickers, his image as an innocent will begin to wear thin, analysts said. A recent poll by Reforma newspaper showed that 61 percent of Mexicans felt Zedillo had taken the right steps to solve the economic crisis. But when a group of Mexico City businessmen were asked by the newspaper what major acheivement of the Zedillo administration they could point to, the most popular answer was "nothing." 6033 !C42 !CCAT !E41 !ECAT !GCAT !GJOB !GPOL Argentine President Carlos Menem said his economic team is preparing a package of laws to make labor legislation more flexible in order to foster job creation. "We are studying a set of laws concerning labor flexibility," Menem told local radio Friday. "We have four million workers in the black market and we need to bring them in the system." Local industry and business leaders have been demanding from the government more flexible legislation to reduce labor costs as an incentive to hire. Unemployment, at 17.1 percent, tops the list of concerns of Argentines in an opinion poll released Friday. Forty-eight percent of respondents to the survey by the private pollster Nueva Mayoria cite joblessness as their main worry. -- Daniel Helft, Buenos Aires Newsroom + 541 318 0663 6034 !GCAT !GVIO Mexico's army braced for fresh attacks on Friday after leftist guerrillas launched surprise attacks, killing at least 12 people in Mexico's worst political violence in more than two years. Troops were on alert throughout Mexico and airports and ports stepped up security following ambushes by the self-styled Popular Revolutionary Army (EPR) in three Mexican states late on Wednesday and early on Thursday, officials and news reports said. Hundreds of masked, heavily-armed guerrillas stormed small villages in southern and central Mexico and attacked police and military posts. About 22 people were injured in the fighting, the most serious rebel activity since the Zapatista rebellion erupted in early 1994 in the southeastern state of Chiapas. The attacks punctured the government's claim the rebel group was a mere "pantomime" and appeared to be closely coordinated, focused on a handful of villages in the central and southern states of Guerrero, Mexico and Oaxaca. Rebels also distributed propaganda and set up roadblocks in the southern states of Tabasco and Chiapas, where the Zapatistas are negotiating peace with the government. Government officials condemned the attacks as cowardly acts of terror and said the EPR, which emerged just two months ago in Guerrero, was the armed wing of a clandestine radical leftist group known as PROCUP, which first appeared in the early 1970s. Known members of PROCUP would be taken in for questioning, officials said. "Even the most sophisticated information and intelligence apparatus cannot always detect the operation of organisations of a clearly terrorist character," Deputy Interior Minister Arturo Nunez told a news conference on Thursday, adding that the EPR had used "violent, cruel and cowardly" tactics. Nunez said 10 members of the security forces and two rebels were killed in the attacks while 22 people -- policemen, soldiers and civilians -- were injured. Several rebels were wounded in Oaxaca and were being questioned. Other official counts put the death toll as high as 14. Oaxaca government officials said at least 12 people, including sailors, police, rebels and two civilians, died in two lengthy gunfights, one in the plush Pacific tourist resort of Huatulco and another in the mountain town of Tlaxiaco. In Guerrero, state government spokesman Roberto Alvarez said five people had been arrested by police in the town of Tixtla "on suspicion of involvement" in one of the attacks. The Attorney General's office said early on Friday it had arrested two suspected rebels in the central state of Mexico, which skirts the capital, and confiscated two AK-47 assault rifles. Ruling party legislator Pablo Salazar said President Ernesto Zedillo, in a meeting on Thursday with lawmakers and security officials, made a clear distinction between the Zapatistas' willingness to talk to the government and the EPR's "terror" tactics. Mexican financial markets, already hit by a drop in U.S. stock prices, fell after the attacks. The main stock market index closed almost 76 points, or 2.23 percent, lower. The peso ended four centavos weaker at 7.54 against the dollar. About 50 rebels took part in the Tlaxiaco attack, killing three policemen in the town, a radio control base with a small airport, officials said. In Huatulco, up to 80 gunmen attacked police posts and a naval base, killing three sailors, two policemen and two civilians, a statement by the Oaxaca government said. Two rebels in olive-green uniforms were killed. In neighbouring Guerrero, officials said two police were gunned down in one attack and five soldiers were wounded in another. Officials said the attacks appeared to be coordinated and the guerrillas numbered at least 130. 6035 !E21 !E211 !ECAT !GCAT !GPOL The Argentine government's cabinet chief said on Friday a congressional committee's approval of the government's latest tax measures showed they wanted swift passage of the measures. "The heads of the deputies and senators are helping (Economy Minister) Roque Fernandez with the passage of the measures as soon as possible," Jorge Rodriguez, was quoted by local news agencies as telling a conference of leading Argentine industrialists. The budget and finance committee of the lower house of Congress approved the government's tax measures earlier this week. However, the committee did not approve the government's proposal to designate a larger share of the tax revenue from diesel fuel to central government away from the provinces. But Rodriguez said this was only a question of "parliamentary engineering which will result in the approval of the measures in any event". Analysts voiced disquiet at the fact that the changes in revenue allocation were not approved by the committee because it would lead to much lower income to the state's coffers. The measures will pass for debate in the chamber of deputies in 10 to 15 days where they could be passed in full. Rodriguez said there was unity in the government over the latest economic measures and criticised those who have said the government was doing nothing to reduce the budget deficit. "The fiscal deficit is not generated by a rise in spending, but by a fall in revenue as a consequence of, among other things, a reduction in employer contributions," he said. He added that the government continues to work for more efficient use of state resources. Within the government's 40 billion peso budget, 20 billion is used in the social security system and 10 billion on debt servicing. Of the remaining 10 billion, six billion is used on salaries, Rodriguez said. -- Axel Bugge, Buenos Aires Newsroom, 54 1 3180668 6036 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Workers at a northen Chilean copper mine went on strike on Friday to demand wage increases in the third major labor conflict in Chile's state mining industry in the past five months. Nearly all workers at the Salvador copper mine, about 500 miles (800 km) north of Santiago, stayed home to support wage demands in the first shift on Friday, said an official for the mine's owner, state copper company Codelco. Lower absenteeism rates were reported at Codelco's nearby Potrerillos smelter and refinery, where unions also called a strike, said the official. Though Salvador is only a modest-sized mine by Chilean standards, the strike was the latest in a string of labor conflicts in the country's all-important mining sector. Striking miners paralyzed Codelco's Chuquicamata pit, the world's second largest copper mine, for about two weeks in May and state coal mines were shut by a two-month strike from late May to July. President Eduardo Frei's government has faced periodic flareups of labor unrest among state workers, despite booming economic growth. Public hospital workers and teachers have also staged strikes in the past few weeks. 6037 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Workers at the Salvador copper mine began an indefinite strike to support demands for wage increases and other benefits, an official at state copper company Codelco said. Absentee levels due to the strike were very high at the open pit mine and the concentrator, but work was near normal at the nearby Potrerillos smelter and refinery, the official said. "Very few people showed up for work at the mine and the concentrator. But we're at about 80 percent attendance at Potrerillos," he said by telephone from the mine in northern Chile's Third Region. Codelco was closely monitoring attendance levels, he said. "The way things look now, I would say the mine and the concentrator have gone on strike. The smelter and refinery have not," he said. The strike began with the first Friday shift at midnight local time (0400 GMT) at all parts of Salvador except the heap-leaching plant, where the first shift starts at 6 a.m. (1000 GMT), he said. The mine has "significant" reserves to keep Potrerillos going if the mine stops work, a Codelco official said Thursday. "We expect this to be a short strike, if at all. The atmosphere is very different and much more peaceful than it was at Chuquicamata," said the official, referring to a two-week strike at Codelco's giant Chuquicamata pit in early May. Union officials could not be reached for comment. The mine, with production capacity of about 90,000 tonnes of fine copper a year, is the smallest of Codelco's four mines. The whole division includes the mine and concentrator, Potrerillos, the heap leaching plant and a small seaport known as Barquito. The whole division's unionised workers number about 2,400, of whom about 1,400 work at the mine itself. Under local labour rules, if more than 50 percent of the workers show up for work, the company's latest wage offer is automatically accepted and the strike ends. Early attendance levels suggested absenteeism was over 50 percent, but Codelco wouldn't know for sure until later on Friday after monitoring attendance levels at the next two shifts, he said. --Roger Atwood, Santiago newsroom +56-2-699-5595 x211 6038 !GCAT !GVIO When Mexican troops banged on his door recently demanding to search his house, Nicolas Martinez, a left-wing peasant activist in this mud-and-timber Indian village, thought he could outsmart them. He demanded to see a search warrant, a request he admitted was probably unusual in the impoverished Sierra Madre mountains of Eastern Mexico where many peasants barely speak Spanish, let alone have a useful knowledge of the law. The soldiers had no warrant, but he said they barged in regardless. After rummaging through his belongings, he said they grilled him to see if he was hiding arms or uniforms. "They said they were in search of guerrillas. They asked me if I'd seen anyone from the EPR, but we've seen no one," he added, referring to the Popular Revolutionary Army that in the night of Wednesday-Thursday carried out attacks and propaganda acts in six Mexican states, leaving at least 12 dead. The weekend before the attacks, a Reuter correspondent saw soldiers travelling on foot, in armoured troop carriers and aboard helicopters in this eastern state of Hidalgo. Troops in the region were under strict orders not to discuss their mission with reporters. One officer, however, confirmed that the army was on counter-insurgency manoeuvres, and he speculated that the EPR may be at large in the state. "There are armed people," he said, insisting that as yet there had been no fighting in Hidalgo. With a soldier's bravado, he added: "They're scared of us. They're cowards." In early August, masked EPR rebels took some reporters to eastern Mexico, saying they operated there though they declined to reveal exactly where. It was believed they took reporters to the Huasteca mountains that straddle the eastern states of Hidalgo, Veracruz and San Luis Potosi. Locals -- both those in favour of the military presence and against it -- say the army has reacted by cracking down on hamlets like Emiliano Zapata known for left-wing sympathies. In the neighbourhood and the local press, a hostile campaign has emerged linking radical politics to armed revolt. Peasant activists like Martinez have struck back with a series of protests to try and force the army out. Among peasants loyal to the ruling Institutional Revolutionary Party (PRI), the army's presence in Hidalgo was largely welcomed as a safeguard against insurrection. But La Huasteca is a dirt-poor area as divided by political rifts as it is by lush valleys and rugged cliffs. It is easy to pinpoint villages where anti-PRI resentment is strong and support for armed revolt runs close to the surface. Emiliano Zapata, named after the peasant hero of the 1910-1917 Mexican revolution, was carved out of the side of a densely overgrown hill in 1983, when some 100 members of the left-wing Democratic Front of Eastern Mexico (Fedomez) abandoned a nearby pro-PRI town complaining of intimidation. It has no running water, and women strip-wash in the open air. There are no cars and the town leader, Juan Arriaga, cannot speak Spanish. Similar Fedomez towns are scattered through La Huasteca, and the organisation's members have set up what they say is a permanent blockade of the town hall in the largest town in the region, Huejutla, demanding the withdrawal of the army. The Mexican government on Thursday alleged that Fedomez was one of the front groups for PROCUP, a clandestine leftist movement formed in the early 1970s which in turn, according to the Interior Ministry, has created the EPR as its armed wing. In the local press the organisation, made up of mostly indigenous peasants, has been the target of virulent assault. Pictures of its leaders were published in a local paper, El Mundo of Poza Rica, in late July with captions that branded several as "bloodthirsty murderers, hunted by police." The accompanying article was unsourced. The army appears to have joined the campaign. Alongside the dirt road near Emiliano Zapata, some 60 troops were stationed in a muddy camp, and villagers said the soldiers often stopped them tending their cattle in the fields nearby. When a truck packed with Indians drove along the road on Aug. 25, a Reuters reporter saw troops order them out and frisk them with their hands pressed up against the side of the vehicle. Soldiers said they were enforcing gun control laws. "Just for the simple fact that we belong to an independent organisation, they repress us," said Martinez, the spokesman for the village. 6039 !GCAT !GVIO Leftist rebels who sprang from the shadows on Thursday with bloody attacks and propaganda acts in six states across Mexico are classic Latin American guerrillas, inspired by Marxism and far less given to poetry than the country's Zapatista rebels, experts say. Political analysts, the Mexican government and their own statements paint a picture of the Popular Revolutionary Army (EPR) as a serious, well-funded group with a presence in several parts of the country and a grounding in Marxist groups founded in the early 1970s. The government on Thursday condemned the group, whose attacks overnight left at least 12 dead in the southern states of Oaxaca and Guerrero, as "clearly terrorist." The EPR made its first appearance just two months ago in Guerrero, when several dozen armed men in military uniform showed up at a peasant rally on June 28 to mark the first anniversary of a police massacre of leftist activists. They read out a manifesto calling for the overthrow of the government of President Ernesto Zedillo. Cuauhtemoc Cardenas, the two-time presidential candidate for the non-violent leftist Democratic Revolution Party (PRD) dismissed the group as a "pantomime," an epithet later taken up by Interior Minister Emilio Chuayffet. "We wish to express that we are not a pantomime," an EPR commander told Proceso news magazine in an interview published this week, held according to Proceso in Mexico City. "The reality is that we are a national force, we are everywhere and we have only used a small part of our power." "We do not wish for war and we do not wish to declare it, but we cannot stand with our arms crossed in the face of crime and impunity as a form of government," he said. It is not clear how many combatants the EPR can call on. The latest incidents -- involving well over 100 fighters -- show the EPR has a presence in the states of Guerrero, Oaxaca, Chiapas, the central State of Mexico and Tabasco, as well as possibly Puebla. A clandestine news conference held earlier this month in the Eastern Sierra mountains suggested they are also in the Huasteca area, which straddles Hidalgo, Veracruz and San Luis Potosi states. Roberto Blum, a political analyst at Mexico's independent Centre for Development Research, told Reuters Financial Television on Thursday the group also appeared to have cells in Mexico City and even in the northern state of Baja California. "The EPR seems to me much more a traditional guerrilla (group) like the ones that have been in Central America in the past, classical Marxist guerrillas. The Zapatistas are more post-modern," Blum said. Zapatista leader Subcomandante Marcos is as well-known for his literary musings on the Internet as for the burst of violence with which the mostly indigenous rebels rose up in arms on New Year's Day, 1994. They are now in peace talks with the government. The EPR says openly that funding for its powerful weapons -- AR-15 assault rifles and Heckler and Koch MP5 submachine guns, as well as Soviet-designed AK-47s -- came partly from bank robberies and kidnappings of wealthy businessmen. Attorney General Antonio Lozano told reporters earlier this week that he had some evidence, though not conclusive, that the EPR was behind the 1994 kidnapping of financier Alfredo Harp Helu. A ransom reported at between $5 million and $25 million was paid for Harp's release. 6040 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Workers at the Salvador mine in northern Chile ratified their plan to strike from midnight local time (0400 GMT Friday) to support wage demands, state copper group Codelco said. But workers at the mine's smelter, known as Potrerillos, and the port of Barquito have both voted to accept Codelco's wage offer, a Codelco spokesman said. Both Potrerillos and Barquito are part of Codelco's Salvador division. "The situation is a bit confused just now," said the spokesman by telephone from the mine. "The workers at the Salvador mine have rejected the offer. But workers at Potrerillos and Barquito accepted it," he said. Those at the mine account for well over half of the division's total workforce, he said. Workers at Salvador, the smallest of Codelco's four mines, voted to start an indefinite strike from midnight to demand wage increases and to support other demands. If more than 50 percent of the employees go to work in the three Friday shifts, Codelco's wage offer is automatically accepted and the strike ends, the spokesman said. Work attendance levels will therefore be closely monitored, he said. --Roger Atwood, Santiago newsroom +56-2-699-5595 x211 6041 !GCAT !GVIO The timing was precise, the orders crisp and the AK-47 assault rifles they fired with deadly accuracy overnight in this sleepy town had Mexicans sure of one thing on Thursday: these rebels were for real. After two months of being dismissed by the Mexican government as a mere "pantomime," the self-styled Popular Revolutionary Army (EPR) in one turbulent night on Wednesday established its guerrilla credentials in blood. In six different states, it launched coordinated attacks on police and army barracks or staged propaganda acts. At least 12 people were killed and 22 wounded -- the first time the EPR has launched anything beyond small-scale attacks on military or police convoys since it first appeared on June 28. Another -- and just as serious -- casualty for many here was the long-held hope that Mexico could solve a stack of economic and political problems, including a deep economic recession, without bloodshed. Outside the local police station in Tixtla, an hour's drive north of Guerrero's glitzy Pacific tourist resort of Acapulco, the blood on the sidewalk was that of a policeman, gunned down as he tried to defend himself with an ancient rifle. Another policeman had his legs shot off as he sat at his desk inside. He later bled to death. Witnesses said some 30 gunmen, their faces covered with bandannas and wearing khaki uniforms, swept into the main square in combat formation and opened fire on police. "I didn't believe in them at all, but seeing them I realised that the guerrillas do exist," said Felipe Epitazio, a policeman who traded fire with the rebels from a doorway, but found himself outnumbered and seriously outgunned. "They are fanatical and dedicated, they have killing in their hearts ... it was a commando that knew about strategy and guerrilla war," added Epitazio. Residents who crouched in shops as the gunbattle raged said it was clear the rebels were well-disciplined. They ordered civilians to flee, saying they were only after police and soldiers. Apart from that, the masked rebels hardly said a word before vanishing, leaving behind them bullet-pocked buildings, spent cartridges and a feeling things in this part of Mexico have been brutally shaken up. In Huatulco, a popular Pacific resort city in southern Oaxaca state, guerrillas attacked a police office, a naval base, the town hall and another public building, killing seven and wounding seven in the surprise attacks. An eerie quiet enveloped the sprawling resort on Thursday. The guerrillas deliberately pinpointed the tourist end of town for maximum effect, market stall holder Griselda Gomez said. "They wanted to create as much attention as they could and they did, we have had soldiers and armed police crawling all over the place all day," the wrinkled grandmother added. A convoy of army trucks sat on a nearby road. Nervous soldiers posted at each corner of the vehicles scrutinised the thick undergrowth, their rifles cocked at the ready. But there seemed little panic among the estimated 10,000 tourists currently in the resort. "To tell you the truth I did not know anything had happened," said John Crawley, a 40-year-old computer technician from New Jersey. "I heard a few people mention a gun battle over lunch but I had no idea that it was right here ... now I know what all the young soldiers are doing dotted around the town." 6042 !GCAT The Entre Rios ranch came complete with 265 head of cattle for 72 Guatemalan refugee families who returned in March after 15 years in exile in Mexico. But without horses, saddles, fence material or vaccines, the returnees cannot run a ranch on the land they selected, which the government financed for them under a refugee repatriation programme. Entre Rios (Spanish for Between Rivers) has no electricity, plastic sheets on poles serve as houses and there is no road to export cattle out of this desolate, deforested lowland in the remote department of Peten. About 17,000 refugees have returned to Guatemala since 1990 after fleeing violence and destroyed villages at the height of the Guatemalan army's counterinsurgency campaigns in the early 1980s. But life back in Guatemala is often harder than it was in camps in southern Mexico, where many refugees had houses and jobs if not land of their own. "There are no development projects, no production projects, no infrastructure, not even a road in some places," said Rubio Mejia of the board of the Permanent Commissions that represents most of the refugees. The government has invested $68 million in land for resettlement. "The communities think having a piece of land is the only instrument that benefits them," said Jose Luis Gandara, director of the government's Commission for Attention to Repatriated, Refugees and Displaced (CEAR in Spanish). But programmes to make the land productive "have been a total failure," according to Alvaro Colom Caballeros, executive director of the government's National Peace Fund, which finances land for refugees. If land is only a partial answer for tens of thousands of returning refugees, the government faces an even larger challenge when hundreds of thousands of internally displaced peasants seek government aid under new peace agreements. The government and leftist rebels are expected to sign in September an accord putting a definitive end to the 36-year civil war that has killed more than 100,000 Guatemalans, mostly indigenous peasants. Under the accord, internally displaced people can make demands for housing, infrastructure, jobs and other resources. Money to resettle displaced people is the largest item in the government's tentative budget to fulfil peace accords -- $617 million out of $1.5 billion. There just will not be enough money to buy land for all the displaced, said CEAR's Gandara, and funds are better used to develop jobs and production. The government may refuse to buy land for the internally displaced but under a 1992 agreement they must finance land purchases for returning refugees. The returnees have a right to choose where they will live but they usually cannot return to their old lands, which the army destroyed or took over. The refugee's Permanent Commissions constantly protest the government's snail's pace in buying land. Colom said negotiations to buy land were lengthy partly because it was hard to find a fair deal. Landowners jack up prices when they find out the the government is buying the land. Another problem, Colom said, is that the government buys land for families that do not return. The government bought the Entre Rios land for 225 families but 153 of the refugee families did not fulfil their agreement to settle there. Although an estimated 25,000 refugees including children born in Mexico still live in Chiapas, Campeche and Quintana Roo there, the flow of returnees to Guatemala is slowing from 9,500 in 1995 to only 2,700 so far in 1996. Many are deciding to stay in the country where they raised their children, and the Mexican government has indicated it may allow permanent residency for refugees. Fear has also stemmed the flow of returnees. Last October, soldiers killed 11 people in a returnees community during a confusing confrontation in the highlands. The so-called Xaman massacre had a direct effect on a scheduled return the next month to La Lupita, a settlement on the southwestern Pacific coast where only 74 of 236 families ended up returning. The returnees at La Lupita do not think the land could really support 236 families anyway. They are asking the government to re-survey the land, which they claim has swampy areas that are no good for cattle or crops. "The biggest problem we have now are the payments for the land," said returnee Dolores Vasquez. "We don't even have anywhere to make money because our husbands are working on the first projects on the land. They can't go out to get jobs to make money." 6043 !GCAT !GCRIM !GODD An Argentine court has ordered that the body of former populist leader Juan Domingo Peron be exhumed for DNA tests to verify the authenticity of a woman's claim that she is his daughter, local media reported on Thursday. A federal appeals court made the ruling to exhume Peron's body to test for DNA similarities, Martha Susana Holgado's lawyer Ricardo Monner Sans told state news agency Telam. Reuters was unable to immediately confirm the story. Holgado claims her mother had an affair with Peron and subsequently married someone else who raised her as his legitimate child, according to Clarin television. "If I took such a long time in telling people my surname and my identity it was mainly because my mother was still alive and I had a pact of silence with my father Peron," Holgado said in a interview televised two years ago when she first made the claim. The ruling has to return to the court that originally reviewed that matter to be implemented. Isabel Peron, the leader's widower, does not oppose the exhumation, according to Cronica television. This is the latest in a series of cases involving Peron's body. Thirteen years after he was buried in 1974 somebody opened his grave and cut off his hands. To this day, neither the culprit nor the motive has been found. 6044 !GCAT !GVIO Eleven people were injured on Thursday in a fresh clash between security forces and peasant protesters in Colombia's southern Caqueta province, authorities said. The latest clash, in which most of the injured were felled by gunshot wounds, came amid a growing controversy in Bogota over curbs on television coverage of the protests, which have rocked Caqueta and two other southern provinces since last month. Under a resolution announced on Friday -- when at least four protesters were killed in Caqueta -- the state-run National Television Commission banned all TV reports about the protests based on anything but official sources. It also barred TV news programmes from showing any images related to the protests "that reflect situations of extreme human suffering." Among those injured on Thursday was a cameraman with the 12:30 TV news programme who colleagues said suffered multiple trauma after being beaten by soldiers with rifle butts. Wilson Moreno, a news director at 12:30, said the cameraman, Luis Gonzalo Velez, was beaten by soldiers because he refused to hand over his camera or the video cassette he had just filmed of the violence. Witnesses said Thursday's clash occurred when thousands of peasants barred from entering Caqueta's provincial capital of Florencia surged toward a military barricade on a bridge leading into the city. Troops opened fire with tear gas and live ammunition to halt the drive across the bridge, the witnesses said, adding that all the gunfire appeared to have come from the military side of the barricade. In other similiar clashes in recent weeks, military officials have insisted that leftist rebels opened fire on protesters and then sought to blame the bloodshed on government troops. A report from Florencia's Maria Inmaculada hospital said 11 people injured during the melee were taken there after protesters retreated from the bridge -- including a 19-year-old man shot in his right eye. Hundreds of thousands of peasants have staged mass protests in Caqueta and neighbouring Putumayo and Guaviare provinces since last month against the government's U.S.-backed drug crop eradication programme. At least 12 peasant growers of coca leaf -- the raw material for cocaine -- have been killed in the protests so far as they pressed demands for more government aid for crop substitution and for the eradication of poverty in Colombia's jungle-covered south. 6045 !C42 !CCAT !E41 !ECAT !GCAT !GCRIM !GJOB New Zealand called in army personnel on Friday to watch over some of the country's jails after about 1,200 prison warders were suspended for taking industrial action. All members of the Penal Officers' Association (POA) were suspended after walking off the job on Friday morning, the Department of Corrections said. About 1,200 prison officers, who are members of the POA in 13 of the 16 prisons in New Zealand, had refused to work the night shift in protest over a break-down in wage negotiations with the government. Public Prisons Service general manager Phil McCarthy said the contingency plan of using defence personnel to staff the prisons was working well. Prison officers belonging to another union, the Public Service Association, were continuing to work. "Our priority remains the safety of the public and the safe and secure containment of inmates," McCarthy said in a statement. More than 50 defence staff were assisting at the country's largest prison at Waikeria, in central North Island. About 90 Waikeria guards formed picket lines after being told they were suspended without pay. Picket lines were also set up at Wellington and other prisons. 6046 !GCAT -- TA KUNG PAO - Chinese President Jiang Zemin met prominent Taiwan businessmen in Beijing, urging them to seize the opportunity to develop their business interests on the mainland. -- HONG KONG ECONOMIC TIMES - Fund manager Jardine Fleming had been ordered to pay HK$150.5 million for breaching trade practice regulations. -- Hong Kong and the United States were embroiled in another row over the territory's textile exports after U.S. Customs said four catagories of Hong Kong-made textiles would be included in a "watch list". It would decide within 30 days whether these categories were involved in illegal transshipments. -- ORIENTAL DAILY NEWS - Shipping tycoon Tung Chee-wah, considered the front runner for the post of Hong Kong's Chief Executive after the 1997 handover, had already delegated responsibility for areas of his business to associates. -- SOUTH CHINA MORNING POST - A Beijing official said list of nominations for the 400-strong Selection Committee that will choose the future Chief Executive would not be available for public scrutiny. -- Beijing had decided to upgrade its "dollar diplomacy" to persuade countries that still recognised Taiwan to shift their allegiance. -- HONG KONG STANDARD - The Commander of British Forces in Hong Kong urged China to ease people's fears by clarifying which laws would govern its troops in Hong Kong after the handover. -- MING PAO DAILY NEWS - Hong Kong's Kowloon-Canton Railway Corp had handed out several contracts for the huge Western Corridor Railway project without inviting tenders. -- Hongkong Bank said it would not lower interest rates for mortgages until the rates war undermined its market share. -- Hong Kong newsroom (852) 2843 6441 6047 !GCAT !GDIS !GENV A mudslide set off by heavy rain and floods devastated an aborigine village in northern Malaysia, killing at least 13 people and leaving about 16 missing, rescue officials said on Friday. "I heard a terrible noise, and then everybody was running," said Budu Anak Lelaki Neng, a survivor of the incident which occurred on Thursday evening at the Pos Dipang aborigine settlement at Kampar town in northern Perak state. Search efforts were continuing on Friday. Malaysian Prime Minister Mahathir Mohamad dismissed the possibility that the disaster was caused by construction work. "As far as I know, there is no construction in the area since it is an Orang Asli (aborigine) settlement. There can't be any construction work there. Things like this (the mudslide) sometimes still happen," the national Bernama news agency quoted him as saying. A police spokesman from Kampar said eight people were injured. "We believe there are about 16 people missing," the spokesman told Reuters. Bernama had reported earlier that at least 30 people were missing. The wall of mud and water, which dragged down huge tree trunks from nearby hills, flooded the entire village, which covers an area the size of about four football fields, and destroyed about 50 houses. The village is home to around 700 aborigines. At the scene, mud still covered the settlement as high as five feet (1.5 metres) in some areas, and water marks indicated that the flood had risen as much as 15 feet (4.5 metres) in some areas. One survivor, Baten Ba'ahk, who told Reuters he lost nine members of his family, said he escaped by clinging up a durian fruit tree for 1-1/2 hours. "I saw this water mixed with earth and stones rolling towards the village. The water kept coming for three hours," he said. The village was a scene of devastation on Friday, with wooden houses which formerly stood on stilts filled with mud and lying on the ground, and tree trunks and rubbish strewn in the thick mud and hardening river sand. Village members and survivors were huddled in groups, most still looking dazed. Rescue efforts were hampered by the remote location of the village, which is beside a river and surrounded by hills. Just one narrow road runs to the settlement. While villagers managed to raise the alarm about the incident on Thursday night, rescue and search efforts did not begin in earnest until Friday morning. Houses were washed into a river and rescuers focused their search on Kampung Sahom, another village about five km (three miles) downstream from the aborigine settlement. A 200-strong rescue team drawn from police, fire fighters, the civil defence department and the army were involved in the mission. 6048 !GCAT !GPOL !GVIO Philippine peace negotiators initialled an historic agreement on Friday to end a bloody Moslem-Christian confrontation in the south of the country dating back centuries. Government chief negotiator Manuel Yan and Nur Misuari, chairman of the Moslem Moro National Liberation Front (MNLF), initialled the accord witnessed by Indonesian President Suharto at Jakarta's Freedom Palace. The peace agreement will be formally signed by Philippine President Fidel Ramos and Misuari in Manila on Monday. The accord is aimed specifically at ending a 24-year Moslem separatist revolt which has cost at least 125,000 lives. Some five million Moslems regard the southern island of Mindanao as their ancestral homeland, although they are now outnumbered three-to-one by Christian migrants. Tensions between the two religious groups go back four centuries to the arrival of the first Christians in the area. Extremists on both sides have condemned the accord, but Misuari said he would work to persuade opponents to accept it. The agreement will establish an interim Southern Philippines Council for Peace and Development (SPCPD), to be followed in three years by a plebiscite leading to autonomous rule in the 14-province region. Misuari acknowledged at a Friday news conference he faced a "big problem" in getting his guerrilla followers -- which he has said numbered well over 30,000 -- out of the bush. "I know it is a matter of explaining to them the wisdom of supporting and associating ourselves with this peace process," he said. Several thousand will be integrated into the Philippine armed forces and the police. "This is a moment of great significance, not only to the government and people of the Philippines, but also to the whole region and the international community," Suharto said at the initialling ceremony. In Manila, Ramos said he was confident Christian opposition would fade to the peace deal after several modifications were made to the accord limiting the functions of the SPCPD. "With the modifications introduced in the final agreement after long negotiations ... I am confident that the opposition to the peace agreement will considerably be reduced and that eventually the peace and development process will be smoothly implemented," Ramos said in a statement. Among the changes were the making of the study of Islam in public schools optional instead of mandatory. The initialling of the deal followed a final two-day round of intensive negotiations in Jakarta to settle last-minute differences and agree on the peace text. Final agreement was reached late on Thursday night at a central Jakarta hotel. Since substantive peace talks started in 1993, Indonesia has chaired a six-nation ministerial committee of the Organisation of the Islamic Conference (OIC) to facilitate negotiations and mediate between the parties. The OIC will continue its involvement in the interim peace process in Mindanao. The peace process dated back to an agreement signed under the auspices of the OIC in Tripoli in 1976, but which languished until it was revived in 1993. About 45,000 Filipino Moslems held a prayer rally in the southern city of Marawi on Friday after the deal was initialled. "The prayer rally is to express our thanks to Allah and to President (Fidel) Ramos for having created the SPCPD and for giving peace and development in Mindanao a chance to prosper," Marawi mayor Abbas Basman said after the rally. 6049 !GCAT !GPOL New Party Sakigake, the smallest member of Japan's governing three-party coalition, named a former health minister as its new president on Friday as a handful of rebels bolted to form a new party. Shoichi Ide will succeed Sakigake President Masayoshi Takemura, a former finance minister who resigned earlier this week in an unsuccessful bid to quell a rebellion by young party members, Sakigake officials said. Ide, 57, is a founding member of Sakigake and served as the health minister in 1994 under former prime minister Tomiichi Murayama's government. The leader of the mutiny, Sakigake chief secretary Yukio Hatoyama, on Friday quit his party with several other followers and said he would launch a new political party on September 22 dedicated to streamlining government and education reform. "I don't think a political party should compromise with another party and water down its policies just to be in power," Hatoyama told a news conference in an a implicit criticism of his former party. Sakigake, a member of the three-party coalition with Prime Minister Ryutaro Hashimoto's Liberal Democratic Party (LDP) and the Social Democratic Party, was formed in 1993 when Takemura led about a dozen rebels out of the LDP. Sakigake, which means "harbinger" in Japanese, played a key role in the reformist coalition government of Morihiro Hosokawa, Japan's first non-LDP administration since 1955. But when the Hosokawa government and its successor led by Tsutomu Hata collapsed amid policy and personal squabbles in mid-1994, Sakigake switched sides to help set up the coalition of the LDP and the Social Democrats, bitter ideological foes for five decades. Sakigake, with only 23 legislators in the 294-seat ruling bloc, did not have the numbers to make or break the government, but was seen as lending reformist credibility to a coalition that was greeted with widespread cynicism. Takemura, however, was saddled with the post of finance minister as the government pushed through parliament an unpopular scheme to use 685 billion yen ($6.34 billion) of public money to wind up failed housing loan firms, a plan that largely benefited agricultural financial institutions closely affiliated with the LDP. Citing the housing firm bill and the defeat of proposals to streamline the bureaucracy and curb the powers of the Ministry of Finance, Hatoyama argued that Sakigake had betrayed its founding tenets by its close association with the LDP. With general elections expected as early as October and mandated by next July, Sakigake needed to recover or recast its identity to stand out against the larger coalition parties and against the opposition Shinshinto (New Frontier Party), Hatoyama and his backers argued. Takemura argued that Sakigake should merge with the like-minded Social Democrats to form a liberal grouping that would be a counterweight to Japan's two large conservative parties, the LDP and Shinshinto. But Hatoyama publicly rejected Takemura as a member of the new party because many potential allies considered him tainted by his senior role in the LDP-dominated coalition. Hatoyama apologised for snubbing his mentor, but the noisy row alienated many potential allies and kept initial membership in his splinter movement in single digits. 6050 !E21 !E211 !ECAT !GCAT !GDEF !GPOL Japan's defence ministry sought its biggest budget rise in five years on Friday, proposing sweeping purchases of latest-model ships, tanks and planes. A ministry spokesman said it had submitted a 4.98 trillion yen ($46.1 billion) budget request for the next fiscal year beginning April 1997, a rise of 2.88 percent, the sharpest growth in the last five years. Japan's defence budget, third largest in the world after the United States and Russia, was allowed only meagre growth in the past five years as the country's recession forced belt-tightening measures on the military. In those years, defence budget rises varied from 0.9 to 2.58 percent. In this period Japan has contributed more to international peacekeeping efforts, including the Golan Heights, but the costs of these are minimal. The main thrust of proposed weapons purchases and research efforts are to guard against possible threats from North Korea, China and Russia. The ministry request must first be approved by the government in December as part of its state budget bill. Parliament must then enact the bill, but many lawmakers and some Finance Ministry bureaucrats have openly called for cuts in the defence budget, citing a sluggish economic recovery. The ministry said the latest request aims to fulfil goals of its new long-term National Defence Programme Outline, which calls for streamlined but more mobile armed forces. It also aims to get the three services back on track in training and preparedness, after outlays for manoeuvres came under the axe in the past five years, spokesmen for the ministry and the services told a media briefing. The budget also asks for more research money to keep pace with foreign high-tech weapons, such as fighters, missiles and electronic surveillance. Funds were also requested to improve the pay and living conditions of the 240,000-member forces. The army has asked for 11 155mm howitzers, nine U.S.-designed MLRS (multiple launch rocket system) units, 20 Type 90 main battle tanks and five new Japanese-built reconnaissance helicopters. If the budget is approved, the army by March 1998 will have 1,093 tanks, including 154 of the Type 90, which has a 120mm gun and 873 Type 74s equipped with a 105mm gun. The shopping list for the navy, called the Maritime Self-Defence Force, includes two new 4,400-tonne destroyers, one diesel submarine, one minesweeper and 13 other vessels. The frontline strength of the navy has been set at 55 destroyers, 16 submarines and 130 P-3C antisubmarine planes. The air force, or the Air Self-Defence Force, asked for nine Mitsubishi-Lockheed F-2 fighters, 13 Kawasaki T-4 trainers and 10 other rescue and auxiliary aircraft. It also asked for funds to study plans to upgrade the fleet of 197 F-15 fighters, the mainstay of Japan's air force. The air force will look for a new integrated weapons control system, faster on-board central computers and better radar. The air force also has 60 Mitsubishi F-1 fighters and 130 F-4J Phantoms. The air force earmarked funds for taking delivery of two new Boeing E-767 AWACS (Airborne Warning and Control System) aircraft in March 1998. Two more have been ordered for delivery in 2000. 6051 !E51 !E512 !ECAT !GCAT !GDIP A ministerial conference of Mekong River nations on Friday agreed to push forward cross-border cooperation to build a prosperous future for the once war-torn region. Growing trust among the six nations of the Greater Mekong Sub-region (GMS) would allow huge investment in what was being dubbed the "last frontier of economic development", said Bong-Suh Lee, Asian Development Bank (ADB) vice president. "We can expect such investment to grow rapidly and reach a target of at least $1.3 billion by the turn of the century," Lee told a news conference after the meeting in China's southwestern Kunming city. Ministers of Burma, Cambodia, China, Laos, Thailand and Vietnam agreed at the conference to pursue development of infrastructure projects aimed at knitting together a region long divided by bitter distrust and war. The ministers approved work to map out strategies for the next 25 years of development along the mighty Mekong River. The ADB, which backs the GMS programmes, had prepared $300 million in loans ready for investment in the region over the next three years, Lee told the conference. Far greater sums would be needed to finance crucial projects such as a road connecting Bangkok to Phnom Penh and Vietnam's Ho Chi Minh City, said Gunther Hecker of the ADB's transport and communication department. "The $300 million is the trigger element for others to follow," Hecker told Reuters. "We lay the seeds." Lee said at least $9 billion would be needed to finance transport and telecommunications projects in the region, home to around 230 million people, and added that the private sector was appearing more willing to contribute. "I have heard from many private investors that probably the GMS is the last frontier of economic development," he said. Investor enthusiasm is relatively new to much of the Mekong River region, which was riven for decades by conflicts over ideology and borderlines. China and Vietnam clashed repeatedly in the 1980s after a bloody border conflict in 1979. Vietnamese troops fought Khmer Rouge guerrillas in Cambodia through the late 1980s while fighting was far from rare among many of the region's other borders. GMS meetings had been vital in building trust in the region, conference participants said. Priority GMS projects include a Kunming-to-Bangkok highway, a fibre-optic cable telecommunications loop through Laos, Vietnam and Cambodia and action to curb deforestation on the Mekong's upper reaches. Ministers at the conference said the ADB should continue its role as organiser of regional projects but agreed on the need for closer coordination with other potential investors from the Association of Southeast Asian Nations (ASEAN) and other nations. How coordination would be organised was not decided in detail, but observer Finn Nielsen of the World Bank said huge funding requirement in the region meant there was little chance of a turf war breaking out among development investors. "There are more projects here than the ADB, the World Bank or anyone can handle, so that isn't a problem," Nielsen said. 6052 !GCAT !GVIO Three Indonesians held hostage in the remote Irian Jaya province were freed on Friday but were in poor health after more than two weeks in captivity, the official Antara news agency reported. It said the three men were among 12 forestry workers, including one woman, kidnapped by bandits on August 14 from a base camp 60 km (37 miles) east of the mining town Timika. Antara quoted district military chief Colonel Frans de Wanna as saying the men were in weak condition when found by troops at about 4.15 p.m. (0715 GMT). They had foot injuries and stomach illnesses, he said. De Wanna, commanding a search involving more than 100 troops with tracking dogs, said the fate of the remaining nine hostages was not known. He said no shots had been exchanged with the armed bandits. De Wanna described them as a security disturbing group, a name used by the military for the separatist Free Papua Movement (OPM) whose armed rebels have campaigned against Indonesian rule in the former Dutch colony since 1963. Earlier this year the OPM held 11 people, including five Europeans, for more than four months in what it said was an act aimed to publicise its fight for an independent Irian Jaya. In May, all but two Indonesian hostages who were killed by their captors escaped after an army operation to free them. 6053 !E51 !ECAT !GCAT !GDIP South Korea shipped $1 million worth of powdered milk to North Korea on Friday as part of a relief effort to ease child malnutrition related to serious food shortages in the Stalinist nation. A Seoul unification ministry spokesman said a cargo ship carrying 203 tonnes of non-fat powdered milk left the western port of Inchon. The vessel was expected to arrive in the North Korean port of Nampo on Saturday, he said. The milk, provided to support a U.N. Children's Fund (UNICEF) nutritional supplementary programme, was part of $3 million relief aid the Seoul government had pledged for North Korea. Early last month, Seoul gave $2 million to the U.N. World Food Programme to buy grain powder after the United Nations appealed for $43.6 million to help ease the effects of floods last summer in the North. The South Korean Red Cross had additionally sent more than $1.5 million worth of relief goods, including blankets, flour, instant noodles and socks. The North is reported to be on the brink of famine after devastating floods struck large parts of the country and destroyed crops last year. It was struck by torrential rains again this summer. The two Koreas are still technically at war since their 1950-53 conflict ended with an armistice agreement. 6054 !GCAT !GVIO Cambodian government troops have been sent to help dissident Khmer Rouge guerrillas beat off an attack by their former comrades in northwest Cambodia, army sources said on Friday. One officer said about 200 government coalition army soldiers were sent on Thursday to help the Khmer Rouge dissidents after clashes erupted with mainstream rebels loyal to paramount leader Pol Pot near the hamlet of Samlaut, south of the O An Dong military post on strategic route 10. If confirmed, the aid would mark the government's first military assistance to the breakaway rebel faction since the rift in the Khmer Rouge emerged earlier this month. The 85-km (52-mile) long route 10 links the city of Battambang to the Khmer Rouge stronghold of Pailin, which is held by the breakaway Division 415 loyal to Ieng Sary, foreign minister in the brutal 1975-79 Khmer Rouge regime. The government officer said fighters from their Division 36, based in the rugged coastal province of Koh Kong, were now involved in the clashes. He and other soldiers said at least one government soldier had been wounded in the fighting and taken to hospital in Battambang. Mit Chien, commander of Division 415, is one of the most prominent commanders to have sided with Ieng Sary and broken with hardliners such as Pol Pot, northern commander Ta Mok and defence chief Son Sen. The dissidents have said they want peace and national reconciliation but, while negotiations with the government are underway, no deal has yet been struck. The Khmer Rouge are blamed for the deaths of more than one million people during their late 1970s rule, but they were allowed to take part in the process leading up to the signing of a peace pact in 1991. The guerrillas later refused to honour the accord and resumed all-out fighting after U.N.-run elections that ushered in the royal coalition government in 1993. 6055 !GCAT !GCRIM !GPOL Cambodia's King Norodom Sihanouk on Friday gave a royal pardon to an opposition newspaper editor who had alleged top-level corruption. Hen Vipheak, former editor of the Sereipheap Thmei (New Liberty) newspaper, stepped through the gates of the run-down French colonial-era T3 prison late Friday afternoon, following intervention on his behalf by King Sihanouk. The Supreme Court had on August 23 sent the opposition Khmer Nation Party steering committee member to jail after upholding rulings by the municipal and appeal courts that handed down a five million riels ($2,000) fine and one year's imprisonment. The judge overturned a decision to shut down Hen Vipheak's newspaper. The editor was prosecuted following a May 1995 article alleging top-level corruption. Sihanouk promised an amnesty to Hen Vipheak, along with fellow KNP member and journalist Chan Rattana, who was released after serving a week of a year-long jail term in June. Co-Premiers Prince Norodom Ranariddh and Hun Sen agreed earlier this week to the king's request for an amnesty. 6056 !C12 !C13 !CCAT !GCAT !GCRIM Rival fund managers in Hong Kong condemned Jardine Fleming Investment Management (JFIM) on Friday and expressed shock at revelations of front-running at the British territory's biggest and most prominent fund manager. "It's appalling that a leading, well-respected portfolio manager was profiting at the expense of his clients," said Gregory Neumann, executive director at Scudder Stevens and Clark Asia Ltd. "Any institution worth their salt will fire them." Most fund managers, including major competitors, said they were stunned to learn of the severity of the JFIM's actions and stressed concern about Hong Kong's regulatory integrity. "How could this have been an isolated incident when clearly there was a culture there that this was fine?" asked one competitor. "Why did one guy have to take the fall? If they're regulating properly they should fire everyone who did that." A five-month investigation by the Investment Management Regulatory Organisation (IMRO) in London and the Securities and Futures Commission (SFC) in Hong Kong exposed late allocation of trades by Colin Armstrong, a charismatic and senior member of Hong Kong's fund management community. The late trades, many involving Armstrong's personal account, allowed for a change in the trading price which Armstrong turned to his benefit, the investigation concluded. Jardine Fleming was fined 700,000 sterling. JFIM's former chief executive Robert Thomas, who had earlier resigned, has had his registration in the United Kingdom and Hong Kong revoked. London-based Jardine Fleming Asset Management lost its authorisation. "I think the disciplinary action was minor given the severity of what they did," said one fund manager. Jardine Fleming declined to respond to the criticism, but the SFC said it was convinced Jardine Fleming would function in the future as a fully compliant firm. "What people are saying in the market, the scepticism they're voicing, is not unreasonable but I don't think it quite takes into account that these guys have really received the blast of a lifetime," said SFC director Deborah Glass. "They know their credibility is at stake. They know we will be back." Another commentator remained unconvinced, suggesting that the Jardine Fleming incident was merely the tip of an iceberg. "This is rife in Asia. It's rife in all emerging markets," said Gary Greenberg, deputy managing director at Peregrine Asset Management. "But Hong Kong and Singapore are no longer emerging markets and all of a sudden people are paying attention." Glass said that Hong Kong's short regulatory history and relatively light reliance on "black letter law", or written regulations, should not suggest that its regulation is lax. She also rejected comparisons between the Jardine Fleming scandal and that of Nick Leeson, the rogue trader who brought down the prestigious Barings bank through unauthorised options trading in Singapore last year. "There is no parallel between the actions of Nick Leeson in Singapore and the activities of a fund manager in Hong Kong," Glass said. "I understand there is a certain symmetry but one of the enormous differences here is that the regulatory system identified the misconduct, worked with regulators in London and dealt with the problem, unlike Singapore." The Jardine Fleming incident should serve as a reminder to all Hong Kong fund managers that a corporate culture of compliance is required and will be enforced, Glass said. 6057 !GCAT !GCRIM !GPOL A Japanese court on Friday rejected a lawsuit by 150 people who said a parliamentary resolution apologising for Tokyo's World War Two actions insulted Japan's honour and caused them mental distress. In a ruling that echoed the complaints of Asian victims of Japan's Imperial Army who dismissed the carefully-crafted parliamentary apology as insufficient, the Tokyo District Court rejected claims for one million yen ($9,200) in compensation, Kyodo news agency reported. "As the resolution simply expressed the determination to maintain peace and is not binding, nobody can seek legal relief even if the resolution makes them feel uncomfortable," Presiding Judge Nahomi Ichimiya was quoted as saying. The suit was filed against the three parties of Japan's ruling coalition, the Liberal Democratic Party (LDP), the Social Democratic Party and New Party Sakigake, who passed the resolution to mark the 50th anniversary of the war's end. The resolution, which was watered down in an attempt to bridge sharp differences on the war between right-wing members of the LDP and left-wing Socialists, was not well received by China, the two Koreas and other Asian neighbours that bore the brunt of Japan's wartime expansion and atrocities. Shingo Nishimura, an opposition legislator and one of the plaintiffs, was quoted by Kyodo as saying: "The resolution pained me because it insulted Japan's honour and profaned the spirits of Japanese war victims. "The Japan-China war and the Pacific War were purely for defence purposes," he said. 6058 !GCAT !GPOL !GVIO Cambodia's King Norodom Sihanouk has proposed an amnesty for the leader of a 1994 coup attempt, an official statement released on Friday said. Sihanouk, in a letter to co-Premiers Prince Norodom Ranariddh and Hun Sen dated Thursday but released on Friday, said former interior minister Sin Song should be allowed to return home from Thailand and remain under house arrest. The king's son, Prince Norodom Chakrapong, and Sin Song were sentenced in absentia to 20 years jail for their role in a failed coup bid against the coalition government in July 1994. Chakrapong was allowed to fly into exile on the intervention of the king while Sin Song was detained but later escaped and fled to Thailand. The third alleged ringleader was jailed for 18 years but released into house arrest earlier this year. "It is well understood that a pardon will not be entirely accorded to these vanquished 'putschists' until Second Prime Minister Hun Sen gives a favourable opinion to the king," said the statement from the royal palace. Sihanouk, who included a plea for mercy from Sin Song's family, added that Ranariddh and parliament chief Chea Sin were favourable to such a pardon. His letter did not mention his son Chakrapong, who is believed to be in Paris and who has long said to be planning a return to Cambodia, where he served as a deputy premier. 6059 !GCAT !GVIO Philippine President Fidel Ramos said on Friday he was confident that Christian opposition would fade to a peace deal Manila has initialled with Moslem rebels. He said the pact initialled on Friday in the Indonesian capital Jakarta contained several revisions limiting the functions of the proposed Southern Philippines Council for Peace and Development (SPCPD). The agreement, which envisages the setting up of the SPCPD as a forerunner to a Moslem autonomous region, will be formally signed by Ramos and Moro National Liberation Front leader Nur Misuari in Manila on Monday. "With the modifications introduced in the final agreement after long negotiations ... I am confident that the opposition to the peace agreement will considerably be reduced and that eventually the peace and development process will be smoothly implemented," Ramos said in a statement. Among the changes in the peace deal were the making of the study of Islam in public schools optional instead of mandatory, and limiting the council's power to only those to be explicitly defined by the president. The Philippine government's chief negotiator, Manuel Yan, and Misuari initialled the peace agreement in Jakarta. In June, the government announced an interim peace deal, prompting fierce opposition from Christians who accuse the government of selling out to Moslems. Some five million Moslems regard the southern island of Mindanao as their ancestral homeland, although they are now outnumbered three-to-one by Christian migrants. The pact aims to end a 24-year separatist revolt which has cost at least 125,000 lives. 6060 !GCAT !GCRIM Hong Kong has obtained an extradition order from the United States against a former tobacco executive wanted in the British colony for corruption, the territory's anti-graft police said on Friday. A U.S. district court in Massachusetts ruled on Thursday there was enough evidence to order the extradition of Jerry Lui Kin-hong, former British-American Tobacco Company (Hong Kong) Ltd (BAT) employee, to face nine graft charges, the Independent Commission Against Corruption (ICAC) said in a statement. Lui, now in custody in the United States, was alleged to have taken bribes of HK$21.3 million (US$2.76 million) in cash and HK$10 million (US$1.29 million) in unsecured loans to ensure the sale and supply of cigarettes from BAT to Wing Wah Company, Giant Island Ltd or associated companies, the ICAC said. He faced a charge of conspiring to accept advantages and eight charges of accepting advantages from 1988 to 1993, it said. Lui was resisting extradition on grounds that Hong Kong would revert to China on July 1, 1997, it said. The extradition order from the Massachusetts court was valid for 10 days, and Lui can seek a review before the U.S. Secretary of State rules on the extradition at the diplomatic level, an ICAC spokeswoman told Reuters. (US$1 = HK$7.73) 6061 !C12 !C17 !C172 !CCAT !GCAT !GCRIM Bond holders of the troubled trading and property group Amcol Holdings Ltd failed to delay the appointment of Price Waterhouse as judicial manager of the company on Friday. Rejecting their request, the High Court Judge Lai Kew Chai said he was satisfied with the progress Price Waterhouse had made in sorting out the affairs of Amcol and thought no purpose would be served by delaying the appointment. The court first appointed Price Waterhouse as Amcol's interim judicial manager on July 25 after an audit by the firm showed the company had serious cash-flow problems and had difficulty meeting its financial obligations. On August 16, the accountants announced an agreement with Indonesian conglomerate Sinar Mas group to save Amcol and its creditors through the creation of a new company, dubbed "Newco", into which Sinar Mas would inject at least US$2.0 billion in assets. But bondholders representing Singapore $285 million (US$202 million) of Amcol's estimated debts of more than S$1.0 billion said they were not sure the deal would guarantee their interests. Lawyers for the bondholders told the High Court it was not clear when creditors would be paid, and said some bondholders felt they had insufficient information about the terms of the rescue package worked out with Sinar Mas. Price Waterhouse said the bondholders' fears were groundless since Sinar Mas had already said all creditors would be paid in full from Amcol's assets as soon as possible. The deal with Sinar Mas had the support of around half of Amcol's creditors and the Indonesians had already said they would meet all the creditors in early September to address their concerns, Price Waterhouse said. Confirming Price Waterhouse partners Nicky Tan, Deborah Ong and Yeoh Oon Jin as judicial managers of Amcol, Lai said he was satisfied the team had provided a regular flow of information to creditors and had worked hard to save the company. "No useful purpose would be served by postponing the making of the judicial managers' order," he said. "I am very gratified there has been this agreement with Sinar Mas." Lai ordered that Price Waterhouse undertake a thorough investigation into the collapse of Amcol and write an official report on the affair. ($1 = S$1.41) 6062 !C13 !CCAT !GCAT !GPOL China's parliament has passed a law protecting mineral resources by affirming state ownership and ending a ban on sales of mining rights, the Xinhua news agency said on Friday. The law, which takes effect on January 1, 1997, is designed to end confusion over ownership of mineral resources, making clear that all mineral resources belong to the Chinese state, as exercised by the State Council, or cabinet. The law will replace the current mineral resource law, which dates to 1986 and was regarded as outdated. Under the existing law, state ownership is only vaguely referred to, prompting local governments to assume they could control mineral resources without central government approval. This has led to confusion over management in China's mining sector as well as excessive mining and wasted resources, the Economic Infornation Daily said. China has frequently closed what it considered to be illegal gold and coal mines in a bid to protect state interests. The new law prohibits individuals and firms from conducting mining in areas legally belonging to state-owned mining enterprises. It states that violators can be punished, ranging from confiscation of assets to penalties under the criminal law code. Firms will be required to pay a natural resources tax and other compensation to the state in order to obtain prospecting and mining rights. The new law also sets the legal foundation for foreign investors to enter China's prospecting and mining industries, the newspaper said, quoting an official of the Ministry of Geology and Mineral Resources. It did not give details of mining by foreigners, saying only that additional regulations would be issued. 6063 !GCAT !GCRIM A province in central China executed 19 people in two days for armed highway robbery, an edition of the Henan Daily seen in Beijing on Friday said. The 19 defendants belonged to four gangs of highway robbers that carried out 99 armed road robberies in Henan province between 1992 and 1996, the newspaper said. The robbers killed eight people, injured 11 and made off with about 580,000 yuan ($70,000), it said. They were put to death on August 26 and 27 after the provincial Higher People's Court rejected their appeals. Since the launch in late April of a nationwide "Strike Hard" campaign to curb rising crime, China has arrested tens of thousands and executed more than 1,000 people. Executions in China are usually carried out with a single bullet to either the heart or the back of the head. ($1=8.3 yuan) 6064 !C24 !C31 !C311 !CCAT !GCAT !GHEA The Health Ministry said on Friday it had found the deadly O-157 bacteria, responsible for a food poisoning epidemic in Japan which has killed 11 people, in a sample of imported U.S. beef intestine. A ministry official added, however, that the finding would not prompt any new restrictions on Japan's imports of U.S. beef, noting that imported beef intestines are heat-treated before distribution to the market and this destroys the killer germ. The U.S. embassy said in a statement that the shipment from which the sample was taken had not been distributed for sale in Japan. The Health Ministry official said the bacteria was found on Wednesday at one of the ministry's laboratories and that the U.S. embassy was notified immediately. The embassy said the product was voluntarily destroyed by the importer and that therefore it had no link with the O-157 epidemic. The O-157 colon bacillus has been found responsible for a widespread food poisoning epidemic in Japan that has killed 11 people and made over 9,500 ill this year. The government said earlier this week that the threat from the germ, while still requiring vigilance, appeared to be receding in Sakai, a city near the regional commercial centre of Osaka in western Japan, which has been hit hardest by the deadly bacteria. Health authorities believe school lunches were responsible for the food poisoning in Sakai, but researchers have been unable to pinpoint the exact source of the infection. The outbreak has prompted authorities to tighten sanitary standards at slaughterhouses and meatpacking plants and sparked calls for an overhaul of the nation's school lunch programme. Japan imported 417,105 tonnes of beef in the first seven months of this year, more than half of it from the United States. Beef intestines are sometimes used as ingredients in an inexpensive Japanese stew that includes other animal organs and is popular in the winter. 6065 !GCAT !GVIO South Korean riot police stormed university campuses for the third straight day on Friday in a bid to dismantle a nationwide radical student organisation. A national police spokesman said 164 students were detained during the surprise raids on 16 universities in Seoul, the southeastern city of Taegu and its surrounding North Kyongsang province. "There were no reports of strong resistance from the students," the spokesman said. After combing the offices of Hanchongryon, the Korean Federation of University Student Councils, police seized eight truckloads of steel pipes, Molotov cocktails and leaflets and literature "benefitting enemies". Friday's raids brought to 766 the number of students held during police raids the past three days. Police searched more than 60 university campuses around the country. "The detained students are being questioned now, but most of them, except core activists of Hanchongryon, would be released," the spokesman said without elaborating. Hanchongryon is accused of fomenting hundreds of violent student demonstrations since its inauguration in 1993, including this month's outlawed rallies at Seoul's Yonsei University. Police detained more than 5,000 students during more than a week of unrest at the Yonsei campus earlier this month. Yonsei students had demanded reunification with communist North Korea. Of the total, nearly 400 Hanchongryon members were formally arrested after their protests were crushed by riot police at Yonsei. It was the worst violence since President Kim Young-sam took power in February 1993. One police officer was killed and more than 1,000 police and students were injured. South Korean authorities have stepped up an anti-leftist campaign since the Yonsei incident, saying Hanchongryon echoes the Stalinist North's calls to unify the Korean peninsula, which was divided at the end of World War Two. Authorities have also vowed to completely disband the youth body. Hanchongryon claims that it has several hundreds of thousands of members under its umbrella but police said only thousands are actually taking part in its activities. South Korea, still technically at war with the North since the 1950-53 Korean conflict, bans Communist activities under its National Security Law. 6066 !GCAT !GPOL !GVIO China has set up armed patrols along the Tibetan border to guard against separatist activities in the restive Himalayan region, said an edition of the Tibet Daily seen in Beijing on Friday. "People's Armed Police border patrols in Tibet are playing an ever-increasing role in maintaining stability, promoting ethnic unity and encouraging economic development in Tibet," the August 22 edition of the newspaper said. The Ministry of Public Security established a special Tibet border unit of the paramilitary People's Armed Police on August 17, the newspaper said. The unit would be kept in high combat readiness and "persist in foiling plots and disruptive activities by the Dalai Lama clique", it said in reference to exiled supporters of Tibet's god king. China has in recent months cracked down on religious activities in the deeply Buddhist region to guard against what it says is a plot by supporters of Tibet's spiritual leader to seek independence. "The anti-splittist situation is still grave and the task of ensuring the stability of the borders and the region still very formidable," it said. Thousands of exiled Tibetans in India have campaigned for independence since fleeing with the Dalai Lama in 1959 after an abortive uprising against Chinese rule. Tibet shares a border with Bhutan, Burma, India and Nepal. 6067 !E51 !E512 !ECAT !GCAT !GDIP Taiwanese business leader Kao Ching-yuan has invited one of China's top policymakers on Taiwan to visit the island, but Beijing was tight-lipped on whether to accept the offer. The invitation was offered to Wang Zhaoguo, director of the Chinese cabinet's Taiwan Affairs Office, in a private capacity, a spokesman for Kao told Reuters. If Wang accepted and Taiwanese authorities allowed him to visit, he would be the most senior Chinese official to set foot on the island since the end of China's civil war in 1949. Wang was quoted by the spokesman as saying he would be happy to visit if he had an opportunity, but there was no definite commitment to accept. "If there was this opportunity, he would be very happy to go (to Taiwan). There is no definite concrete time," the spokesman said, speaking by telephone from the north China city of Tangshan. In Taipei, a spokesman for the cabinet-level Mainland Affairs Council, which formulates Taiwan's policy towards China, said the council would be happy to see a visit by Wang but noted that procedures must be followed. The Taiwan Affairs Office declined to comment on the council spokesman's remarks. Earlier, the office denied Taiwanese newspaper reports that Wang had accepted the invitation. Kao is head of a delegation of nearly 80 Taiwanese businessmen, economists and officials, who arrived in Beijing on Tuesday for a 12-day visit. Chinese President Jiang Zemin met members of the delegation on Thursday and tried to reassure Taiwanese investors, saying Beijing would not allow political differences to stand in the way of trade and investment. In his meetings with other Chinese officials, Kao, vice-chairman of President Enterprises, had raised tax and labour problems faced by Taiwanese investors in China, the delegation's spokesman said. President Enterprises is Taiwan's biggest investor in China. On Wednesday, Kao urged Beijing to resume talks with Taiwan, saying the island's investors would lose confidence in China if political friction impeded ties. The talks were suspended last year after Taiwan President Lee Teng-hui's landmark trip to the United States. Beijing has viewed Taiwan as a rebel province since the Nationalist government collapsed on the mainland and fled to the island in 1949. China insists Taiwan is not entitled to official links with other states. China has stepped up pressure on Taiwan to lift a decades-old ban on direct trade and transport links between the two sides. Last week Beijing unilaterally announced a set of regulations to pave the way for direct links. Taiwan has banned direct trade, transport and mail links since 1949. Indirect trade and investment has been allowed since the late 1980s, usually through Hong Kong. Many Taiwanese business executives, who have poured more than $20 billion into China, are eager for direct trade and transport, but Taiwan has been reluctant to remove the curbs, which it views as its last bargaining chip in talks with the communists. 6068 !GCAT !GCRIM !GPOL Former South Korean president Chun Doo Hwan plans to appeal against a death sentence imposed on Monday, a local news report said on Friday, setting the stage for a protracted court battle. Chun has been keeping Koreans guessing about whether he would challenge the verdict of a court that found him guilty of leading a 1979 coup and ordering troops to fire on pro-democracy demonstrators the following year. But Yonhap news agency quoted one of Chun's lawyers, Lee Yang-woo, as saying Chun had decided to contest the ruling on the advice of his legal counsel. "We will submit the appeal to the court tomorrow morning at the earliest," Lee was quoted as saying. Lee and other lawyers for Chun were not immediately available for comment. Yonhap gave no details about the grounds on which Chun would appeal his conviction by the Seoul District Criminal Court on charges of mutiny, treason and corruption. Chun has seven days to appeal. His successor, Roh Tae-woo, was handed a 22-1/2 year jail sentence for playing a secondary role in the putsch and army massacre in the southern city of Kwangju in May 1980. Both men were convicted of pocketing bribes from business tycoons during their terms from 1980-93. "Giving up the appeal could be interpreted as his admission to all the criminal charges against him," said Moon Chung-in, a politics professor at Seoul's Yonsei University, referring to Chun. Chun alleged his trial was part of a judicial circus orchestrated by current President Kim Young-sam to boost his popularity ratings. Many Koreans believe Kim will pardon Chun before he leaves office in early 1998, but by not appealing Chun would force the president to make a quicker decision. An appeals process could drag through the courts for many months. Chun has remained defiant throughout the trial, defending his grab for power as a move to restore stability following the assassination of president Park Chung-hee. He denied being in the chain of command during the Kwangju massacre in which about 200 people were killed, by official count, when paratroopers stormed the city to put down a citizen's revolt against martial law. Separately, South Korea's Daewoo Group said its chairman on Friday appealed against a two year jail sentence imposed by the same court on Monday for bribing Roh. Kim Woo-choong was among nine business tycoons convicted of handing kickbacks to Roh in exchange for business contracts. Four were sentenced to jail and the others received suspended jail sentences. The globe-trotting Kim is the dynamo behind Daewoo's success as a top-four business group. He has put together billions of dollars of deals, from auto plants in eastern Europe and India to hotels in China, often on a handshake. Analysts said his jailing would be a big blow to Daewoo, and could make it difficult for the group to raise funds overseas. Heads of Jinro and Hanbo groups, also sentenced to two years in jail, and the chairman of Dong-Ah who was handed a 2-1/2 year jail term, have already challenged the court ruling. 6069 !C24 !C31 !C311 !CCAT !GCAT !GHEA Japan's Health Ministry said on Friday it had found E. coli O-157 bacteria in a sample of imported U.S. beef intestine. The U.S. Embassy said in a statement, however, that the shipment from which the sample was taken was not distributed for sale in Japan. The embassy said the product was voluntarily destroyed by the importer and was therefore not linked to the outbreak of O-157-related illness in Japan. A Health Ministry official said that despite the discovery of the bacteria, the government saw no need to restrict U.S. beef imports to Japan, as imported U.S. beef intestines are heat-treated before distribution to the market and this destroys any O-157 bacteria. He added that the bacteria was found on Wednesday at one of the ministry's laboratories, and the findings were immediately sent to the U.S. Embassy. He did not comment on why neither the U.S. Embassy nor the ministry announced had the finding before Friday. The U.S. Embassy said in a press release: "The U.S. Department of Agriculture continues to work with the Ministry of Health and Welfare to ensure that Japanese consumers have the safest and most nutritious product possible, and will continue to share scientific and procedural information on a regular basis." The O-157 colon bacillus has been found to be responsible for a widespread food poisoning epidemic in Japan that has killed 11 people and made over 9,500 ill this year. The government said earlier this week that the threat from the germ, while still requiring vigilance, appeared to be receding in Sakai, a city near the regional commercial centre of Osaka that has been hit hardest by the deadly bacteria. --Tokyo Commodities Desk (81-3 3432 6179) 6070 !GCAT !GPOL !GVIO Israel thwarted Palestinian President Yasser Arafat's call for a mass prayer protest at Jerusalem's al-Aqsa mosque on Friday by ringing the city with police and roadblocks. Arafat warned Israel later on Friday that Palestinians had "other options" to peace if the Jewish state did not honour agreements with the PLO. "I say to them (Israel)...if you will not implement what we have already agreed upon, our people still have other options," the PLO chief told a crowd in the West Bank Balata refugee camp. "They (Israel) have airplanes but I have the Palestinian children," he said, referring to stone-throwing youths who led a seven-year uprising, known as the intifada, against Israeli rule, beginning in 1987. He did not elaborate further. Arafat addressed residents of the camp, a major flashpoint of violence during the intifada, two days after accusing the Israeli government of declaring war on the Palestinians with its decision to expand West Bank Jewish settlements. Earlier Arafat called on Palestinians to flock to Jerusalem's al-Aqsa mosque, Islam's third holiest shrine, for protest prayers against Israeli Prime Minister Benjamin Netanyahu's right-wing policies in East Jerusalem. But paramilitary police turned back worshippers at checkpoints dividing Arab East Jerusalem from the West Bank. Barely 20,000 Moslems made it to the mosque complex inside Jerusalem's walled Old City, according to Palestinians. Israeli police put the number at 8,000. "The presence today was less than normal weeks because of the unjust Israeli measures of placing roadblocks, and terrorising people, by deploying large numbers of soldiers," Hasan Tahboub, Minister of Islamic Affairs in the Palestinian self-rule Authority told Reuters. Netanyahu reiterated his tough line on the holy city while convening a weekly cabinet meeting on Friday. "The current government is...not prepared to overlook the fundamental violations on the issue of Jerusalem and desires that the situation be remedied," a cabinet statement quoted the prime minister as saying. Netanyahu has said Palestinian offices in Jerusalem violate interim peace deals and must be shut. Arafat bowed to Netanyahu's demand this week by closing three Jerusalem offices, only to be rebuffed when Israel two days later demolished an Arab community centre it said was built illegally. Palestinians have accused Netanyahu of dragging his feet on peace talks while expanding Jewish settlements in the West Bank. "The peace process is still paralysed, the resumption of negotiations in practical terms is frozen and the contacts until now have not led to any results at all," Arafat aide Nabil Abu Rdainah told Reuters. Netanyahu told his cabinet on Friday, more than three months after he ousted Shimon Peres in national elections, he would appoint a team to conduct talks with the PLO on implementation of the peace deal originally signed by Peres. He told ministers the Israel-Palestinian Steering Committee which oversees implementation of self-rule agreements will convene next week on a regular basis. Netanyahu met later on Friday with senior ministers and said his government would soon increase the number of permits allowing Palestinians to work in Israel. 6071 !GCAT !GPOL !GREL Israel thwarted Palestinian President Yasser Arafat's call for a mass prayer protest at Jerusalem's al-Aqsa mosque on Friday by ringing the city with police and roadblocks. Paramilitary police turned back worshippers at checkpoints along the border between Arab East Jerusalem and the West Bank. Barely 20,000 Moslems made it to the mosque complex inside Jerusalem's walled Old City, according to Palestinians. Israeli police put the number at 8,000. "The presence today was less than normal weeks because of the unjust Israeli measures of placing roadblocks, and terrorising people, by deploying large numbers of soldiers," Hasan Tahboub, Minister of Islamic Affairs in the Palestinian self-rule Authority told Reuters. Arafat launched the protest together with a general strike on Thursday while accusing Israeli Prime Minister Benjamin Netanyahu's right-wing governnment of refusing to implement the Oslo self-rule accord signed by the previous government. Netanyahu told his cabinet on Friday, more than three months after he ousted peacemaker Shimon Peres in national elections, he would appoint a team to conduct talks with the PLO on implementation of the peace deal. "The current government has changed the direction of the political negotiations vis-a-vis the Palestinian Authority...the government insists on the mutual honouring of commitments," a cabinet statement quoted Netanyahu as saying. Palestinians have accused Netanyahu of dragging his feet on peace talks while expanding Jewish settlements in the West Bank. "The peace process is still paralysed, the resumption of negotiations in practical terms is frozen and the contacts until now have not led to any results at all," Arafat aide Nabil Abu Rdainah told Reuters. Arafat has been angered by Netanyahu's refusal so far to meet him and to honour Israel's commitment to redeploy its troops in Hebron, the only West Bank town still under occupation. Israel drew Palestinian ire this week by demolishing an Arab community centre in East Jerusalem which city officials said was built illegally. It also disclosed plans to expand West Bank settlements. Israel on Friday called up extra police fearing clashes after Arafat called on Palestinians to flock to Jerusalem for traditional Friday prayers to protest against Israeli policy in the city and Jewish settlement. The prayers passed off peacefully. Tahboub and Israeli authorities had expected 100,000 Arabs to heed the call. Arafat himself attended prayers in the northern West Bank town of Nablus. Soldiers scattered roadblocks throughout the West Bank to prevent Moslems from travelling to Jerusalem on Friday. "I want to go through in solidarity with Arafat," said Mohammad Kaharan, in one of the groups of middle-aged and older men arguing in vain with soldiers in the heat haze of a road near Bethlehem. Abu Rdainah said talks overnight between Netanyahu adviser Dore Gold and top PLO official Mahmoud Abbas, also known as Abu Mazen, made no progress on any issue. Gold and Abu Mazen met in Tel Aviv hours after the Palestinians ended the general strike, the first in the West Bank and Gaza in two years. Netanyahu told his cabinet on Friday the Israel-Palestinian Steering Committee which oversees implemetation of self-rule agreements will convene next week on a regular basis. 6072 !GCAT !GPOL The widow of slain Israeli Prime Minister Yitzhak Rabin accused Israel's president in remarks broadcast on Friday of "settling old scores" with her husband after his assassination. Leah Rabin said she would never forgive President Ezer Weizman for not mentioning her husband in his address at the opening session of Israel's parliament in June. "It was intentional. It is inconceviable that at the opening session of the Knesset he suddenly forgot. He didn't forget Yitzhak. In my opinion he can never forget him. But he decided he wasn't worthy of mention and I can never forgive him for that," Leah Rabin told Israel Television. "He continues to settle old scores with Yitzhak," she said without elaborating. Weizman's spokesman declined to comment on the remarks. Rabin was shot dead at a peace rally last November by a right-wing Jew opposed to Middle East peace moves. Weizman eulogised him at a funeral attended by dozens of world leaders. Rabin and Weizman, both generals who turned to politics after retiring from the military, served at one point in the same political party. Weizman's old contention that Rabin as army chief-of-staff suffered a nervous breakdown on the eve of the 1967 Middle East war soured relations for a time between the two men. 6073 !GCAT !GDIP !GPRO Louis Farrakhan, controversial U.S. black leader of the Nation of Islam, accepted a $250,000 human rights award in Libya on Friday but said he would not take the money until a U.S. court gave its permission. "I will accept the honour of this prize but I will ask you to hold the monies until a decision is made by a (U.S.) court of law," Farrakhan told an audience in the Libyan capital. Libya is presenting the Muammar Gaddafi Human Rights Award, named after the Libyan leader, to Farrakhan and the African- American people. The U.S. Treasury Department on Wednesday denied Farrakhan's application to receive either the $250,000 that goes with the award or $1 billion that Gaddafi had pledged to the Nation of Islam after meeting Farrakhan last January. The Treasury said Libya had been on Washington's list of states that sponsor international terrorism since December 1979. It noted Tripoli had refused to hand over two Libyan suspects in the 1988 bombing of Pan Am flight 103 over Lockerbie, Scotland. That refusal led to the imposition of U.N. sanctions on Libya. "On behalf of the two million black men and their families and all the local organising committees and the leadership in black America that supported the One Million Man march I would like to thank the International Popular Committee for awarding me this year's Gaddafi Prize for Human Rights," Farrakhan said. Farrakhan, a black Moslem minister, organised last October's Million Man march that brought many thousands of black men to Washington for a peaceful rally. The head of the Libyan award committee, Mostah Osta Omar, paid tribute to Farrakhan's work on behalf of black Americans at a ceremony in a luxury hotel. "Louis Farrakhan and the other Million Man march leaders are true fighters for freedom and justice and equality and human dignity," he said. "For this reason we have conferred upon Louis Farrakhan this year's human rights award." Farrakhan arrived in Libya on Wednesday, and on Thursday he attended the opening seminar of the conference held each year in conjunction with the award. He said in Chicago on Tuesday he would fight any U.S. government effort to deny him the Libyan funds, which he said would be used to build schools and businesses in American black communities. Describing a meeting earlier with Libyan leader Muammar Gaddafi, Farrakhan said: "I told brother Gaddafi that I, too, am a revolutionary, but I will not make a revolution with the gun. I told him that I will produce in America a change of heart and a change of mind with this book -- and I held the Koran." 6074 !GCAT !GDIP !GPOL Louis Farrakhan, controversial U.S. black leader of the Nation of Islam, accepted a $250,000 human rights award in Libya on Friday but said he would not take the money until a U.S. court gave its permission. "I will accept the honour of this prize but I will ask you to hold the monies until a decision is made by a (U.S.) court of law," Farrakhan told an audience in the Libyan capital. The U.S. Treasury Department on Wednesday denied Farrakhan's application to receive either the $250,000 honorarium that goes with the award or the $1 billion that Gaddafi had pledged to the Nation of Islam after meeting Farrakhan last January. The Treasury said Libya had been on Washington's list of states that sponsor international terrorism since December 1979. It noted Tripoli had refused to hand over two Libyan suspects in the 1988 bombing of Pan Am flight 103 over Lockerbie, Scotland. That refusal led to the imposition of U.N. sanctions on Libya. "On behalf of the two million black men and their families and all the local organising committees and the leadership in black America that supported the One Million Man march I would like to thank the International Popular Committee for awarding me this year's Gaddafi Prize for Human Rights," Farrakhan said. Farrakhan, a black Moslem minister, organised last October's Million Man march that brought many thousands of black men to Washington for a peaceful rally. 6075 !GCAT !GPOL !GVIO Yasser Arafat warned Israel on Friday that Palestinians had "other options" to peace if the Jewish state did not honour agreements with the PLO. "I say to them (Israel)...if you will not implement what we have already agreed upon, our people still have other options," the Palestinian President told a crowd in the West Bank Balata refugee camp. He did not elaborate but said: "They (Israel) have airplanes but I have the Palestinian children," he said, referring to stone-throwing Palestinian youths who led a seven-year uprising, known as the intifada, against Israeli rule, beginning in 1987. Arafat addressed residents of the camp, a major flashpoint of violence during the uprising, two days after accusing the Israeli government of declaring war on the Palestinians with its hardline policies on settlements and Jerusalem. Israel prevented most Palestinians on Friday from heeding Arafat's call to flock to East Jerusalem for a protest prayer at the al-Aqsa mosque, Islam's third holiest shrine. Arafat launched the protest while accusing Israeli Prime Minister Benjamin Netanyahu of refusing to implement Israel-PLO peace deals and expanding Jewish West Bank settlements. 6076 !GCAT !GPOL Libyans are dressing up their capital Tripoli for celebrations on Sunday of the 27th anniversary of the coup which brought Muammar Gaddafi to power. Green flags and banners praise the "great revolution" and promise defiance against United Nations sanctions imposed for Libya's refusal to hand over for trial two suspects wanted in connection with the 1988 bombing of a Pan Am flight over Lockerbie, Scotland. "We have chosen the challenge because it is our only option," proclaimed one banner on the road to Tripoli airport which serves only internal flights because of the sanctions. Huge stadium lights are directed at the city's Green Square where makeshift stages await Sunday's festivities. Three African leaders -- from Niger, Guinea and Ghana -- are expected to attend the celebrations marking September 1, 1969 when a group of young army officers, led by a 27-year-old Gaddafi, deposed King Mohammed Idris. "The revolution has brought us great achievements...We are comfortable the revolution has taken care of us, improved our lives and given us capabilites," Samer Ammar Soliman, 42, told Reuters as he came out of Friday prayers. But some Libyans have begun to show their discontent in the country's east, which has become a hotbed of militant violence. Tripoli-based diplomats and exiled opponents said Gaddafi's airforce blasted in July rebel strongholds in the mountainous Jebel al-Akhdar region. Travellers arriving in Egypt say militants and police officers clash regularly in Benghazi. At least 20 people were killed in the capital in early July after bodyguards loyal to Gaddafi's sons fired at spectators of a football match who were chanting subversive slogans. Gaddafi has dismissed any unrest as the work of foreigners, and last year deported thousands of Sudanese and Egyptian workers. 6077 !GCAT !GDIP The White House expressed "grave concern" on Friday over the situation in northern Iraq and one U.S. official said U.S. forces have been told to be prepared to go to the region if the president orders it. "We will consider any aggression by Iraq to be a matter of very grave concern," White House spokesman Mike McCurry said on Friday evening from Thebes, Illinois, where President Bill Clinton is campaigning. "We will continue to monitor the situation very carefully." Washington has been watching the Iraq situation in recent days, and earlier on Friday a U.S. official who requested anonymity said, "We're concerned. U.S. forces have been told to be prepared to deploy to the region if the president so directs." The official said the concerns were focused on the area around Arbil, near the Iraqi border with Iran and Turkey. There have been U.S. military aircraft deployments to Bahrain, Jordan and Qatar in the last 18 months, and there are U.S. ships in the region "that could be turned at a moment's notice," the official said. CNN reported that Washington was considering sending an air expeditionary force of 30 planes and up to 1,000 support troops to the region. Another similar air expeditionary exercise to Qatar just ended. "There is contingency planning, but we're not ruling anything in and we're not ruling anything out," said one Pentagon official. "No decisions have been made." The official said the United States already had 21 ships, including the aircraft carrier Carl Vinson, and 200 aircraft in the region, operated by more than 20,000 military personnel. The aircraft carrier Enterprise had been in the eastern Mediterranean for exercises for the past several weeks, and a Pentagon official said there were no plans to move the carrier. CNN also reported that two B-52 bombers were being moved to Guam, about halfway between the United States and the Gulf. The Defence Department had no comment on the report. At the State Department, spokesman John Dinger said late on Friday, "We are keeping close watch on the situation in the north of Iraq and we would take any aggressive Iraqi moves in the area very seriously." Another U.S. official, also asking not to be identified, said the Iraqis had been reminded of U.S. concern in contacts recently: "We've been in touch with them over the last few days." On Thursday, Iraq accused Iran of military aggression and said it reserved the right to retaliate for Tehran's alleged deployment of troops into Kurdish-populated regions of northern Iraq. Foreign Minister Mohammed Saeed al-Sahaf, in a statement carried by official newspapers, accused Tehran of sending troops to northern Iraq and said Baghdad "preserved the full right to retaliate." The Kurdistan Democratic Party (KDP) of Massoud Barzani has said that Iran sent troops and military equipment into northern Iraq in support of the guerrillas of its rival, the Patriotic Union of Kurdistan (PUK), led by Jalal Talabani. A ceasefire between the warring Kurdish factions took effect on Wednesday, and the State Department has said it appears to be holding. This latest truce replaced one that took effect on last Friday before collapsing with renewed clashes. Northern Iraq has been split into rival zones since fighting broke out between the two groups in 1994. About 3,000 people died before a previous ceasefire last March. A U.S.-led air force contingent has protected the region against possible attack by Baghdad since shortly after the 1991 Gulf War. 6078 !C42 !CCAT !E41 !ECAT !GCAT !GCRIM !GJOB AFL-CIO President John Sweeney, U.S. Rep. John Conyers and several other union and religious leaders were arrested on Friday during a protest in support of striking newspaper workers, officials said. The demonstration of more than 750 strikers and supporters was called to protest the lack of negotiations in the 13-month-old strike against the Detriot News, owned by Gannett Co. and the Detroit Free Press, owned by Knight-Ridder Inc.. More than 2,500 newspaper workers from six unions went on strike in July 1995 over company proposals to reduce jobs, change work rules and restructure pay scales. The papers are continuing to publish with the aid of about 500 employees who have crossed picket lines and more than 1,400 replacement workers. A year ago, demonstrations on Labor Day weekend touched off violent clashes between strikers and supporters and police and company security guards at printing plants owned by Detroit Newspapers Inc., the joint operating agency that publishes the News and Free Press. Wearing a blue shirt and suspenders, Sweeney sat on the steps of the News building, blocking the doorway with several other people. A policeman tapped him on the shoulder and led him away peacably to a blue police bus. "We will do whatever it takes to support this strike and return you all to work," Sweeney said told the rally. "The labor movement will not let you down. This is the most important strike we have in our country today." A total of 21 people, including Sweeney and Conyers, a Democrat from Detroit's east side, were arrested and ticketed for disorderly conduct, a misdemeanor that carries a $50 fine. A Detroit police spokesman said they were released later Friday. Also arrested were United Mine Workers President Richard Trumka, who is also the AFL-CIO's secretary-treasurer; Newspaper Guild President Linda Foley; Detroit City Council President Maryann Mahaffey; Metropolitan Council of Newspaper Unions Chair Al Derey; and several other officers of the striking unions as well as the United Auto Workers and United Steelworkers. Several Detroit religious leaders also were arrested in the peaceful protest, including Roman Catholic Bishop Thomas Gumbleton. The protest was the latest of several incidents in which labor, civic and religious leaders have been arrested in protests over the last several months. 6079 !GCAT !GPOL !GVOTE Republican presidential nominee Bob Dole, campaigning in the party stronghold of Orange County, said on Friday tax cuts were the best way to help taxpayers and boost the economy. "Our plan starts with a tax cut, 15 percent, 15 percent," Dole said. "This is a pro-growth, pro-family programme," he told an audience of several thousand at the Orange County fairgrounds under a blistering sun. "I hope you've all brought your sun screen," a tanned Dole said. "We've had a smoke screen in Washington," he added, referring to the policies of President Bill Clinton. On a stop in Albuquerque, New Mexico, Dole criticised Clinton's speech on Thursday night in Chicago when he accepted the Democratic nomination as another Democratic give-away plan the country cannot afford. "There was something for everybody in his acceptance speech, except taxpayers and people trying to make a living and people trying to raise their families," Dole told several hundred at an outdoor rally. But in a bid to win New Mexican voters Dole vowed not to close three research laboratories in the state operated by the Department of Energy. Los Alamos, Sandia and Phillips labs provide tens of thousands of jobs, according to local Dole campaign officials who said the Clinton administration tried to convey the idea the labs were on the chopping block when Dole talked about cutting or scaling back certain departments, such as Energy. In California, Dole derided as late Clinton's proposal to allow home owners to avoid paying taxes on up to $500,000 in capital gains when they sell their homes. And he repeated his belief that it was possible to cut taxes and balance the budget, a claim the Clinton campaign has derided as unrealistic. While Dole hammered away at the policies of the Clinton administration, he was silent about the resignation of top Clinton strategist Dick Morris after a sensationalist supermarket tabloid reported that Morris had a long relationship with a high-priced prostitute. Dole has been on vacation in southern California but has made some campaign appearances. California has 54 electoral votes, nearly one fifth of the votes needed to win the presidency, and so far Clinton is leading in the state. Dole maintains he is not giving up on California. New Mexico has five electoral votes. Dole also hammered away at liberal judges and illegal drugs, promising a "real war on drugs" if elected. He appeared with his running mate, former Representative Jack Kemp, who told the mostly white audience that Abraham Lincoln, the Civil War president who ended slavery, was the role model for both Dole and himself. Earlier in the week, Kemp campaigned for the black vote in south central Los Angeles, flashpoint of the 1992 Los Angeles riots. He told the Orange County audience about his visit and said a Dole presidency would "deliver the hope of jobs." The Dole campaign on Friday also urged the Clinton campaign to sit down next week with Dole aides to work out details for upcoming presidential and vice presidential debates. "This gives us plenty of lead time to start and of course it's going to take the Clinton campaign quite some time to do this. They have a bigger challenge then we do. They have to explain how Bill Clinton's been on two sides of so many issues," said Dole's press secretary Nelson Warfield. 6080 !GCAT !GDIS !GENV Hurricane Edouard's threat to the southern United States diminished on Friday but forecasters warned the powerful system could move inland within a few days in New Jersey, New York or New England. At 5 p.m. EDT (2100 GMT), Edouard's center was about 500 miles (805 km) south-southeast of Cape Hatteras, North Carolina, near latitude 29.3 north, longitude 70.7 west, moving north-northwest at 14 mph (23 kmh), the National Hurricane Center said. Forecasters posted a hurricane watch and tropical storm warning from Cape Lookout, North Carolina, northward to Cape Henlopen, Delaware, including the Pamlico and Albemarle Sounds. They said said watches and warnings might be extended farther north over the Labor Day holiday weekend. "On this track, the center of Edouard will be gradually approaching the mid-Atlantic coast," the Center said. A "watch" indicates that storm conditions are expected within 36 hours; a warning means conditions are due within 24 hours. "If Edouard was to turn to the northwest again sometime tomorrow, then the Carolinas would feel the effects," said Michelle Huber, a meteorologist at the National Hurricane Center. "Further on, then you are talking about New England." Edouard's maximum sustained winds were near 130 mph (209 kmh), making Edouard, the most powerful storm of the season, a strong Category Three hurricane capable of severely damaging structures. Little significant change in strength was expected on Friday night. Hurricane force winds extended outward up to 145 miles (230 km) from the center and tropical storm force winds extended outward up to 200 miles (325 km). The U.S. coast was already feeling Edouard's effects, as forecasters warned holiday swimmers of high seas and said gale force winds could arrive as early as Saturday night. Riptides and high waves were reported, and swells were expected to rise even higher as the storm traveled up the coast. In coastal areas of North Carolina battered by Hurricane Bertha in mid-July officials were preparing in case Edouard turned their way. Emergency workers said an evacuation of the Outer Banks was a strong possibility on Saturday. "We're just keeping a wary eye," said Peter Stone of the emergency management department on Ocracoke Island, which has about 800 residents. "They don't know. We don't know." The weather on Friday was partly cloudy, with a light breeze and heavy surf, and "no swimming" signs were posted at some beaches. Residents noted nervously that Saturday would mark three years to the day since Hurricane Emily, a Category Three storm, came ashore causing severe damage. The National Parks Service announced that its campgrounds along the Outer Banks would close at mid-day on Saturday, and officials said tourism was off. "The number of people down here is way, way down," said Tommy Gray, coordinator for the Hatteras Island Emergency Operations Center. Forecasters also were watching Tropical Storms Fran and Gustav, which were far from land as they traveled across the Atlantic. At 5 p.m. EDT (2100 GMT), Fran was downgraded to a tropical storm, as its winds had dropped to 70 mph (110 kmh). Fran was about 230 miles (370 km) north-northeast of the island of Antigua, at latitude 20.3 north and longitude 60.9 west. The storm's movement had slowed to just eight mph (13 kmh) northwest. It was not expected to draw close enough to Edouard to be drawn into the more powerful storm's path. Tropical Storm Gustav appeared to be breaking up as it moved away from Africa's coast. At 5 p.m. EDT (2100 GMT), its center was near latitude 16.7 north and longitude 40.6 west, or about 1,040 miles (1,670 km) west of the Cape Verde Islands, and moving northwest near nine mph (15 kmh). Maximum sustained winds were near 40 mph (65 kmh), and Gustav was expected to weaken further over the next 24 hours. 6081 !GCAT !GPOL !GVOTE President Bill Clinton bounced onto the campaign trail on Friday with a double-digit lead in the polls over challenger Bob Dole, who promoted his tax cut plan in a California Republican stronghold. Before starting a heartland bus tour after the carefully choreographed Democratic convention in Chicago, Clinton warned supporters against complacency, despite polls that show him as much as 20 points ahead of Dole. In comments rife with railroad images geared to recall his pre-convention whistle-stop train trip through the Midwest, Clinton told supporters: "Yes, we're on the right track. But we're not stopping the train. We're going on. We're building that bridge to the 21st Century." Clinton made no mention of the resignation of political strategist Dick Morris, who was alleged in a sensationalist supermarket tabloid to have had a long-running affair with a $200-an-hour prostitute who claimed Morris allowed her to listen in on presidential telephone calls. White House spokesman Mike McCurry said Clinton, his wife Hillary Rodham Clinton and Vice President Al Gore had called Morris on Thursday "just to check on a friend going through an ordeal." McCurry offered no details of the conversation. Asked by reporters whether Clinton had put the incident behind him, McCurry replied, "We have. Whether you have remains to be seen." McCurry's comments came in Cape Girardeau, Missouri, the first stop on a two-day bus caravan through Missouri, Illinois, Kentucky and Tennessee designed as a reprise of a similar trip the campaign team made through the Northeast after the New York City Democratic convention in 1992. An ABC News tracking poll that included responses garnered after the Morris scandal broke favoured Clinton by 20 points, giving the 50-year-old president 54 percent of the vote compared with 34 percent for Dole. Pollsters called it a "solid" convention bounce for Clinton. A CNN/USA Today poll gave Clinton 51 percent to Dole's 38 percent. Dole, on a working vacation in California, told supporters in predominantly Republican Orange County that tax cuts were the best way to help taxpayers and boost the economy. "Our plan starts with a tax cut, 15 percent, 15 percent," Dole said. "This is a pro-growth, pro-family programme." Dole derided Clinton for pirating his ideas, including a key phrase from his own acceptance speech earlier in August at the Republican Convention in San Diego. "Apparently, he talked a lot about bridges, building bridges or whatever, building bridges to the future, which he's taken right out of my acceptance speech in San Diego," Dole said. "Eveything he says is, 'if Bob Dole is for it then I'm for it.' Well, then why shouldn't I be president? I've got all the ideas." Dole's campaign also urged the Clinton campaign to sit down next week with Dole aides to work out details for upcoming presidential and vice presidential debates. "This gives us plenty of lead time to start and of course it's going to take the Clinton campaign quite some time to do this. They have a bigger challenge then we do. They have to explain how Bill Clinton's been on two sides of so many issues," said Dole's press secretary Nelson Warfield. Tentative dates for the debates are Sept. 25, Oct. 9, and Oct. 16. The vice presidential debate is set for Oct. 2. Election day is Nov. 5. Republican running-mate Jack Kemp, a former professional football quarterback who was campaigning with Dole, said he would be ready for the debate with Gore, but gave no clues on his strategy. "Quarterbacks don't talk about the game before the game," Kemp said. 6082 !GCAT !GPRO !GREL Chicago Cardinal Joseph Bernardin, a leader of the U.S. Roman Catholic Church, said on Friday that cancer had spread to his liver and he had a year or less to live. "I have been assured that I still have some quality time left," the composed, 68-year-old prelate told a news conference. "My prayer is that I will use whatever time is left in a positive way, that is, a way that will be of benefit to the priests and people I've been told to serve as well as to my own personal spiritual well-being." In 14 years as Chicago's cardinal-archbishop, Bernardin cultivated a prayerful, saintly image, was deeply involved in world church issues and was publicly committed to rooting out abuse by his clergy. Bernardin underwent extensive surgery for pancreatic cancer in June 1995 followed by months of chemotherapy, which he said made him more aware of his own vulnerabilities and the urgent need to minister to the sick. Pancreatic cancer is among the most deadly, though Bernardin's was caught early and he resumed his duties. He said his doctors told him the cancer had spread to his liver and that it was inoperable, although he would undergo a new form of chemotherapy that "may increase my time somewhat but it will not effect a cure." "While I know that humanly speaking I will have to deal with difficult moments, and there will be tears, I can say in all sincerity that I am at peace," he said. I consider this as God's special gift to me at this particular moment in my life," he said. "As a person of faith, I see death as a friend, as the transition from earthly life to life eternal. "It's not going to be easy to say goodbye to everybody. Death does have some sad dimensions to it but I am a man of faith," he said. "Death is a natural phenomenom." The spare and soft-spoken son of an Italian stone cutter, Bernardin took over the prominent Chicago archdiocese, the nation's second-largest after Los Angeles' with 2.3 million parishioners, in 1982. Bernardin said he would "serve until the end" as cardinal and would begin treatment immediately. Since the surgery, he had developed a painful back condition that shortened his stature by several inches. The admiration for Bernardin only grew with his illness. "He has endured this suffering with great faith, hope, and love, and -- true pastor that he is -- he has used his time of sickness to reach out and comfort other victims," Bishop Anthony Pilla, President of the National Conference of Bishops, said. "They're going to be very big shoes to fill," said Rev. John Keehan, a priest on Chicago's West Side. "I think anybody getting the job will have a terrific challenge ahead of them." Some fear that Pope John Paul may appoint a more conservative successor to Bernardin. Chicago's Catholic community, like many urban dioceses, has had to contend with a shrinking budget and Bernardin was forced to close schools and consolidate parishes. During his tenure, Bernardin developed a progressive programme to deal with cases of pedophilia involving priests. Ironically, he became the highest-ranking church official ever accused of sexual improprieties in 1993 when a former seminary student leveled charges, later recanted, that he had been sexually abused by Bernardin during the 1970s. 6083 !GCAT !GPOL !GVOTE President Bill Clinton, his wife Hillary and Vice President Al Gore telephoned ex-campaign adviser Dick Morris "just to check on a friend going through an ordeal," the White House said on Friday. As Clinton, Gore and their wives Hillary and Tipper began a two-day bus tour, Clinton ignored questions about Morris, who resigned from the campaign after a sensationalist supermarket tabloid said he had a year-long affair with a prostitute and had confided White House secrets to her. Asked how Morris was doing as he posed for pictures in front of his bus, Clinton maintained a grin for the cameras, saying nothing, and Gore said: "I think it's time to get on the bus." White House spokesman Mike McCurry told reporters that the phone calls were made on Thursday afternoon, hours after Morris resigned from the campaign. McCurry declined to give details of the call, saying, "It was a private conversation and I didn't ask them to relay the details." "They were brief phone calls just to check on a friend going through an ordeal," McCurry said. Asked if Clinton had put the Morris imbroglio behind him, McCurry told reporters, "We have. Whether you have remains to be seen." 6084 !E12 !ECAT !GCAT !GPOL !M11 !M13 !M132 !MCAT For Wall Street, this is the season to be cautious as the presidential contest puts the stock market in the twilight zone. President Clinton, Bob Dole and Ross Perot are hitting the road now that the partying is over, and people who have billions of dollars invested in stocks were bracing for political promises that could have an impact on their wealth. Analysts believe that the candidates will add to the market's list of uncertainties, which already includes the question of whether the Federal Reserve will raise interest rates to cool economic growth. They say the politicians will need to promote legislation that helps the economy without scaring the socks off financial markets. "The worst thing that could happen for financial markets is that if Clinton and Dole start to trade shots in the middle of the ring with one-upmanship," said Hugh Johnson, chief investment officer at First Albany Corp. "That's when Wall Street will need to worry." He said that the bond market would be the first to react if the "bidding" intensifies and stocks would quickly drop as interest rates rise. "I don't think it would imply the collapse of the stock market, unless the rise in rates touches off a dynamic within the market, which would include selling by portfolio managers, redemptions by individuals of mutual funds that would, in turn, pressure the portfolio managers to sell even more stock." This week, the market weighed Dole's proposal to lower federal income taxes by 15 percent across the board, a package that carries a price tag of $548 billion. Clinton proposes an $8.4 billion re-election agenda that would spare most home-sellers from capital gains taxes and give employers tax incentives to hire people off the welfare rolls. Clinton claims Dole's plan would increase the deficit, while the White House said some corporate taxes would be raised to offset the cost of the president's plan. The experts said there are some unusual risks for the market from this year's political season because the rush to promise tax cuts to win votes could upset Wall Street's expectations that Washington will balance the budget. "The stock market will have to edit the promises and then do a probability study on those edited promises," said John Geraghty at the consulting firm North American Equity Services. During the past four presidential elections, the candidate that has favoured tax cuts has won. Ronald Reagan's tax cut won him a second four-year term in the White House in 1984, while Democrat Walter Mondale, who promised higher taxes, lost. George Bush became president in 1988 on his no-new-tax campaign and Clinton won in 1992 with a promise to fatten workers' paychecks. The trick, they said, will be for the candidates to continue to convince Wall Street that the Treasury's 30-year bond -- the most closely-watched interest rate -- will fall to between 4 percent and 5 percent by the end of the decade. Johnson said that long-term interest rates have already been spooked by the election. The long-term bond jumped this week to 7.13 percent after starting the year at 5.95 percent. The surge of buying in stocks during the last two years has come amid an environment of low interest rates, which has boosted corporate profits. But the market stalled this summer after the Dow Jones industrial average set a record high of 5,778.00 points on May 22. "The market doesn't seem to be able to make new highs and it has been back and forth in a fairly horizontal mode which looks like a holding pattern," said Geraghty. He said the market reflects the political uncertainty, now that Dole has sharply narrowed the gap with Clinton in the polls. Geraghty said that the one thing that could completely turn the election around are new findings in the Whitewater scandal that would damage the Clintons. "Stocks are on a delicate edge because if something happens that looks like it could upset the presidency, it could throw the political and, to some extent the economic, process into chaos," Geraghty said. Right now, Wall Street is pondering the candidates. "We have an election where there are so many unknown variables that most people will probably want to hold fire, and even take the chance that they will have to pay higher prices for stocks after the November election, than take the risk that a shock to the system will hurt the stock market," Geraghty said. On Friday, the Dow Jones index closed down 31.44 points at 5,616.21. For the week, it was down 106.53 points. The Nasdaq composite index closed 3.53 points lower Friday at 1,141.50. For the week, it was down 1.55 points. The Standard & Poor's index of 500 stocks was off 5.41 points at 651.99, down 15.03 points for the week. The American Stock Exchange index was down 1.66 points at 559.68, and was off 1.26 for the week. 6085 !E12 !ECAT !GCAT !GPOL !GVOTE The outcome of the November elections emerged as a hot topic on Wall Street this week as financial pundits debated whether Robert Rubin might forgo a second term as Treasury secretary if President Clinton is re-elected. Concern centred on the currency markets since Rubin's tour de force has been his unflagging support of the dollar. Speculation that Rubin might not stay in his post grew after he sidestepped questions about any future Cabinet post during television interviews at the Democratic convention in Chicago this week. Should Rubin leave, Wall Street would worry that he might take his strong-dollar policy with him. Rubin's predecessor at the Treasury, Lloyd Bentsen, was viewed with suspicion by some in the financial markets who thought he had tried to push down the dollar to gain an edge in trade negotiations with Japan. "Obviously, under the Clinton administration, we've seen two distinctively different dollar policies," said Chris Widness, an international economist at Chase Securities Inc. "Under Rubin, the U.S. has certainly looked for a strong dollar." That strategy, backed up by timely instances of joint central bank intervention, helped the dollar battle back from post-Second World War lows of 1.3438 German marks on March 8, 1995, and 79.75 Japanese yen on April 19, 1995. Currently, the dollar stands at about 1.48 marks and 109 yen. Rubin was widely hailed as the architect of the dollar's comeback, using skills and expertise gained in 26 years on Wall Street, part of which were spent as co-chairman of Goldman, Sachs and Co. Inc. "Rubin has done a fine job in that position," said Michael Faust, a portfolio manager at Bailard, Biehl and Kaiser, which manages just under $1 billion in global stocks and bonds. "Anyone who would come in there to replace him would have awfully big shoes to fill." Fear that a new Treasury secretary might favour a return to Bentsen-era policy could spell trouble for financial markets. Some overseas investors might shy away from buying U.S. stocks and bonds or even sell them when the dollar is weakening. As for U.S. Treasury securities, Widness explained that Alan Greenspan's reappointment as chairman of the Federal Reserve and the outlook for the federal budget were more important than whether Rubin continues at the Treasury. "Although, if we did get someone that was seen as looking for a dollar depreciation, it would probably hurt capital flows to the United States," said Widness, adding that could hurt U.S. stocks and, to a lesser degree, bonds. Still, markets may have little to fear from any Rubin successor because the firm dollar policy has yielded positive results. If that is true, then any new Treasury chief would need to be as effective as Rubin in convincing markets that the White House does indeed want a strong currency. "If he left, the first question people would ask the next guy is, 'What's your view on the dollar?'" said Michael Perelstein, portfolio manager of MainStay International Funds. "And all I can say as a piece of advice is that they'd better say exactly the same thing (as Rubin), if not stronger," Perelstein said. "Otherwise, you get selling out of Tokyo and Frankfurt again." 6086 !GCAT !GCRIM !GODD A Florida court on Friday ruled that a convicted murderer was a better potential parent for his 12-year-old daughter than her lesbian mother. The Florida First District Court of Appeals upheld a trial court ruling in September 1995 that removed Cassie Ward from the home of her mother, Mary Ward, and her lesbian partner and placing her in the home of John Ward, her father, who was convicted 22 years ago of murdering his first wife. Mary Ward had appealed the ruling saying Pensacola trial judge Joseph Tarbuck had removed her daughter solely because of her lesbian relationship. But John Ward countered that Cassie had exhibited inappropriate behaviour including poor hygiene, bad table manners and a preference for men's cologne, which warranted the change in custody. Mary Ward had gained custody of Cassie in 1992. Her ex-husband, who is now married to his fourth wife, sought custody after she sued for increased child support. The appeals court on Friday said the trial judge must be given extreme leeway in rendering decisions and that Tarbuck had weighed all the evidence, not just Mary Ward's sexual orientation, in making his decision. "Absent a showing of an abuse of discretion by the trial court, this court is not at liberty to disturb the modification of custody," it said in its opinion. Mary Ward's attorney, Charlene Carres, said her client planned an appeal to the Florida Supreme Court. 6087 !GCAT !GPOL !GVOTE With party conventions over, Republicans have signalled they are ready to move into the next phase of the campaign and meet with President Clinton's aides to hammer out details of presidential debates. The Dole campaign released a letter Friday inviting their Clinton counterparts to meet with Dole campaign manager Scott Reed to discuss particulars of the televised debates. "Next week, a small group of representatives from each of our campaigns should meet to address participants, format, timing and logistical issues surrounding the debates," Dole manager Scott Reed wrote to Clinton chief Peter Knight. Tentative dates for the debates are Sept. 25, Oct. 9 and Oct. 16. The vice presidential debate is scheduled for Oct. 2. Nelson Warfield, Dole's press secretary, said starting to plan now would give plenty of lead time, which he said the Clinton campaign was going to need. "They have a bigger challenge than we do. They have to explain how Bill Clinton had been on two sides of so many issues," Warfield said, taking a dig at Clinton for what critics charge are flip-flops on issues. "In fact," he continued, "I guess one of the proposals should be for the debate to give him twice as much time so he can be on both the pro and the con." Former South Carolina Gov. Carroll Campbell, who was on Dole's vice presidential short list before Dole decided on Jack Kemp, will head Dole's team. Kemp, campaigning with Dole in southern California, said he will be ready for his debate with Vice President Al Gore but would not clue reporters in to his strategy. "Quarterbacks don't talk about the game before the game," the one-time pro football player said, using a sports analogy that has become a staple of the Republican ticket. "I'll be prepared." A decision was expected by mid-September on whether Texas billionaire Ross Perot, the Reform Party candidate, would be allowed to participate in the debates sponsored by the Commission on Presidential Debates, a non-profit, non-partisan group that took over in 1988 from the League of Women Voters. 6088 !GCAT !GPOL !GVOTE A political poll that tracks voters' opinions day by day showed on Friday that President Bill Clinton got a solid bounce from the Democratic convention and was leading Republican Bob Dole by 20 points. The ABC News tracking poll of 1,011 registered voters said Clinton was favoured by 54 percent, compared with Dole's 34 percent and 8 percent for independent presidential candidate Ross Perot. It had a 3.5 percent margin of error. "Clinton's bounce is a solid one and has erased the gains Dole made from his convention," ABC said in a statement. It said the gap between the two main candidates had gone from 19 points before the Republican Convention to four points just after it and back to 20 at the end of the Democrats' conclave. Half the interviews were done before and half after a sensationalist supermarket tabloid reported that key Clinton political strategist Dick Morris had a long-running relationship with a self-described prostitute. Morris resigned on Thursday. To assess the net effect of the two party conventions, ABC averaged 23 days of tracking polls, showing Clinton with a 13-point advantage. That tallied exactly with a CNN/USA Today poll of 622 registered voters released on Friday, which said Clinton and his running-mate Al Gore would get 51 percent of the vote if the election were held now, compared with 38 percent for Dole and Republican vice presidential nominee Jack Kemp. Perot got 7 percent, with 4 percent undecided, according to the poll conducted Aug. 28-29, before the reported sex scandal surfaced and before Clinton accepted his party's nomination. The CNN/USA Today poll, which had a margin of error of plus or minus 4 percentage points, showed Clinton had a 17-point lead in a two-way race with Dole with 57 percent of the vote compared with 40 percent for Dole and 3 percent having no opinion. 6089 !GCAT !GPOL !GVOTE President Bill Clinton, visibly tired and facing a non-stop battle against Bob Dole in the 68 days left before voters choose between them, warned on Friday against overconfidence and said the fight had just started. "Any contest is not over until its over and this is a contest and its not over. It's just starting," Clinton told a meeting of Democratic party leaders With polls showing him ahead of his Republican rival by as much as 15 points, Clinton recounted how sports teams often blow a lead. He told Democrats to remind the country that they are the party that "represents most of the people" but to approach the campaiagn with humility. "We are not a party of the past but a party of the future," Clinton said, repeating the themes he stressed in accepting the party's nomination at the close of its convention Thursday night -- a strong economy, expanding job opportunities, educational excellence and fighting crime. He made no mention either time of the resignation of key political strategist Dick Morris, who was alleged in a sensationalist supermarket tabloid to have had a long-running affair with a $200-an-hour prostitute who claimed Morris allowed her to listen in on some of Clinton's telephone calls. The disclosure, just hours before Clinton accepted the nomination for a second term, shadowed the 50-year-old chief executive's final moments at the convention, but some analysts questioned whether it would become a campaign issue in his fight against the 73-year-old Dole. Clinton, Vice President Al Gore and their wives were headed for a two-day bus tour in parts of Missouri, Illinois, Kentucky and Tennessee designed to be a reprise of an attention-grabbing, momentum-building trip the ticket made in 1992 through Eastern states after the convention in New York. Dole had stops scheduled in California and New Mexico. Republican party chairman Haley Barbour issued a critique of the Democratic conclave on Friday, saying "you feel like a mosquito in a nudist colony -- there are so many tempting targets you don't know where to start." He said voters will see only one thing from the event, that "The Clinton Democrats believe if we'll just give the government enough of our money, and enough control over our lives and businesses, government can solve all our problems." A poll Gallup published on Friday by USA Today and CNN said Clinton's lead over Dole had grown to 13 points, up one point since last weekend. But Democratic pollster Stan Greenberg told the same audience Clinton addressed on Friday that the race is "going to narrow" before the Nov. 5 election. Greenberg also said the public saw Democrats as thinking about the future compared to "an ageing Bob Dole thinking about the past" and that Clinton's strongest support comes from senior citizens and voters under 30. He said his polling showed two-thirds of the public saw a significant part of the convention. Major network ratings indicated both party conventions were lightly watched. Clinton admitted on Friday that he was "drained" after the convention and a nearly 700-mile (1,125 km) campaigning train ride that brought him to the convention city. Earlier, at a post-midnight reception, he said: "Man, I'm dog-tired." Reaction to his closing convention speech was mixed. Some delegates appeared bored, disappointed there were no soaring phrases. One Iowa man cautioned a yawning delegate to stop because "the television cameras will catch you." But the mass of 20,000 delegates and supporters cramming Chicago's United Centre were too fired up to complain. 6090 !C12 !CCAT !GCAT !GCRIM Philip Morris Cos Inc has received a federal grand jury subpoena demanding testimony by executives and documents as part of a fraud investigation into the tobacco industry, the company and U.S. Justice Department sources said on Friday. Department sources said the subpoena from the grand jury in Washington, D.C., went out on Tuesday and that it was the first one since the focus of the wide-ranging criminal investigation shifted to allegations of fraud by the industry. In a brief statement, Philip Morris, the world's largest cigarette maker, confirmed the investigation. "The company has received requests for documents and testimony and is cooperating fully," it said. A Justice Department source described the long-running investigation as moving ahead, but said prosecutors still were gathering evidence and were not close to making any decisions about whether to bring criminal charges. Other department officials have said that if charges do come out of the probe, they most likely would not be brought until next year due to the complexity of the investigation. In July, a source familiar with the investigation told Reuters the focus of the probe now covered fraud allegations that the tobacco industry withheld information and lied to federal agencies. The probe previously had centered on accusations that the heads of the major cigarette companies committed perjury when they testified before Congress in 1994 that nicotine was not addictive. The fraud allegations might be easier to prove and would allow prosecutors to bring charges against cigarette companies, not just individuals, for deceiving federal agencies, the source said. A Justice Department official this week said the perjury part of the probe had not been dropped completely, even though the focus had shifted to the fraud allegations. CBS News, which first disclosed the Philip Morris subpoena, reported that similar subpoenas may soon be issued to other leading tobacco companies. The investigation stemmed from a 1994 request by Rep. Martin Meehan, D-Massachusetts, for an inquiry into whether the tobacco industry illegally withheld information about the dangers of tobacco from Congress, federal agencies and the public. There are also a number of other tobacco-related investigations by the Justice Department, including one in New York probing the industry for securities fraud. A grand jury is is considering whether tobacco companies deceived shareholders about what they knew about the health risks of smoking. 6091 !C12 !C13 !CCAT !GCAT !GCRIM California's State Supreme Court ruled Friday that prescription drug makers can be sued for failing to warn of certain known dangers even if the U.S. Food and Drug Administration directed them not to. The ruling results from a lawsuit against the Upjohn unit of Pharmacia & Upjohn Inc., which makes the drug Halcion. A woman who had been prescribed Halcion for insomnia sued Upjohn for failing to warn of nervousness and injuries she said resulted from the drug. The case was settled last week with a $2,500 payment, but Upjohn had asked the state's high court to clarify the standards of liability applied to drug makers. Upjohn, according to court papers, had maintained it was liable only under a negligence standard. The court upheld the tougher standard of strict liability. Under a negligence standard, companies can be sued only for failure to warn of risks they were instructed by the FDA to mention. But under strict liability, the manufacturer could potentially be sued for a danger that the FDA had instructed it not to mention. The distinction is important for drug makers, the court said, since there is an industrywide practice of not providing warnings of all potential hazards. In some cases, the FDA prohibits listing warnings if the hazard results from a nonapproved use of a drug. A drug may have FDA approval to be applied to the skin, for instance, but not to be swallowed. In such a case, warning of the dangers of swallowing the drug might not be considered appropriate. But under the California ruling, people who nevertheless swallowed the drug and claimed injury would be permitted to sue. 6092 !GCAT !GDIP !GVIO The White House is monitoring the situation in northern Iraq very carefully and would view any aggressive action by Baghdad with "grave concern," White House spokesman Mike McCurry said on Friday. McCurry, travelling with President Bill Clinton in Thebes, Illinois, said, "We will consider any aggression by Iraq to be a matter of very grave concern. We will continue to monitor the situation very carefully." 6093 !GCAT !GCRIM A 17-year-old high school student on a date was raped by seven suspected gang members in an apparent initiation rite, Houston police said on Friday. Three suspects were arrested and police were looking for the other four accused in the attack, police department spokesman Robert Hurst said. Two men, Augustin Diaz Zamora, 19, and Florencia Avila, 18, were charged with aggravated sexual assault and jailed on $250,000 bail each. The suspect in custody was 16 and his names was not released, police said. The woman told police she met Zamora by chance on Aug. 9 and agreed to go out on a date. "She told investigators it was her first date," Hurst said. "He struck her as being a nice guy," police investigator Ken McMurtry told the Houston Chronicle. On Aug. 11, Zamora picked her up at her home. But instead of taking her to a movie and dinner as promised, they went to a home in north Houston where Zamora and six others took turns holding her down and raping her, police said. After the attack, Zamora asked her if she still wanted to go out to eat and then to a movie, but she insisted on being taken to her home. "The rape apparently was some sort of rite, ritual or initiation," a police statement said. Police said the woman discussed the attack with her family and, after some time, went to a rape crisis counsellor and the police. 6094 !GCAT !GDEF !GDIP The United States is considering increasing its air power near Iraq and may possibly send an air expeditionary force there of 30 planes along with up to 1,000 support troops, CNN reported on Friday. A U.S. official earlier said Washington was "concerned" by the situation in northern Iraq and U.S. forces had been told to be prepared to deploy if the president orders it. The Pentagon has declined to make any official comment on the reports. CNN said the United States already had 200 land-based aircraft in the region, as well as 70 planes based on the aircraft carrier Carl Vincent. Additionally, the aircraft carrier Enterprise had been instructed to remain in the eastern Mediterrean in case it was needed, and two B-52 bombers were being moved to Guam, about halfway between the United States and the Gulf. State Department spokesman John Dinger said the United States was keeping a close watch on the situation in north Iraq, where rival Kurdish groups have been fighting since Aug. 15. CNN said it had learned that Iraq was moving 200 troops and some armed personnel carriers to the region, although it quoted Pentagon officials as saying they did not believe the troops were planning aggressive action. U.S. deliberations to increase its air power in the region was meant to give the Iraqis a clear signal that Washington would not tolerate any intervention by Baghdad in the Kurdish conflict, CNN said. 6095 !C12 !CCAT !GCAT !GCRIM The family of an Alabama man who died of lung cancer sued R.J. Reynolds Tobacco Co. Friday, alleging that the company intended to addict minors to cigarettes. The lawsuit, filed in Barbour County Circuit Court, seeks unspecified damages. R.J. Reynolds is owned by RJR Nabisco Holdings Corp. The case was brought by the family of Marion Jenkins, Jr., a former high school coach who began smoking Camels in 1935, when he was 8 years old. He later switched to Winstons. The lawsuit alleges that Jenkins became addicted to cigarettes and could not stop smoking. It was the latest in a series of suits brought against tobacco companies by individuals or their families and by states trying to recover health care costs from tobacco-related ailments. Tobacco companies have long denied that nicotine is addictive or any direct link between smoking and health problems. 6096 !C12 !CCAT !GCAT !GCRIM !GPOL Federal Communications Commission Chairman Reed Hundt said that a court ruling Friday affirming the constitutionality of key provisions of the 1983 and 1992 Cable Acts is a "victory for kids." The District of Columbia Court of Appeals, in Time Warner vs. FCC, upheld the constitutionality of rules requiring a portion of cable channels to be set aside for educational use, and requirements that cable operators give advance notice of free previews of adult-rated movies. "It is heartening that the Court of Appeals continues to reinforce that our rules to educate and protect our children are suppported by the Constitution," said Hundt in a statement. Hundt said that the court's decision to support the requirement that direct broadcast satellite service providers reserve a portion of their channels for noncommercial programming of an educational or informational nature will apply in other contexts, such as the FCC's recent children's rules. The FCC gave final appproval Aug. 8 to a requirement that television stations air at least three hours a week of children's educational shows. The landmark rules were passed after more than a year of haggling and were the result of a White House-brokered proposal that won suport from children's advocates, White House officials and reluctant television broadcasters. 6097 !GCAT !GDIP !GVIO The United States is "concerned" by the situation in northern Iraq and U.S. forces have been told to be prepared to deploy if the president orders it, a U.S. official said on Friday. "The United States is monitoring the situation," the official said, requesting anonymity. "We're concerned. U.S. forces have been told to be prepared to deploy to the region if the president so directs." "We are keeping close watch on the situation in the north of Iraq and we would take any aggressive Iraqi moves in the area very seriously," State Department spokesman John Dinger said. Another U.S. official, also asking not to be identified, said the Iraqis had been reminded of U.S. concern in contacts recently: "We've been in touch with them over the last few days." 6098 !E51 !E512 !ECAT !GCAT !GDIP The United States said on Friday it was "disappointed" that Turkey signed an agreement with Cuba this week to strengthen trade and economic ties between the two countries. State Department spokesman Glyn Davies said there was no indication that the deal, signed on Thursday, violated the United States' Helms-Burton law, which seeks to punish foreign companies profiting from property expropriated from U.S. citizens. Davies said Turkey knew "full well of our policy of discouraging trade and investment in Cuba. We are disappointed that Turkey chose to expand its relations with Cuba in this fashion." Turkey's trade with Cuba is worth about $6 million a year, he said. The two countries agreed to grant each other most-favoured-nation status under the agreement, which covered trade, banking, transport, communication, agriculture and energy cooperation. The agreement follows a plan by Turkey to go ahead with a $23 billion gas deal with Iran despite a new U.S. law punishing companies investing in major energy projects in Iran or Libya. 6099 !GCAT !GODD A retired Missouri telephone worker said Friday he was baffled by the giant corn stalks that sprouted up in his vegetable garden after he planted Mexican seeds given to him by a neighbor. Bob Ferguson, 66, said the sweetcorn stalks have topped out at between 15 and 17 feet -- nearly three times the size of normal corn plants. "It was planted back in May and it just growed and growed and growed and growed," Ferguson said. "You can't believe it until you see it." The nine rows of plants in his garden were just starting to put on ears, he said. Ferguson theorized that the abundant rain and mild temperatures this summer in central Missouri agreed with the hybrid, which was probably more accustomed to Mexico's hot, dry climate. 6100 !GCAT !GPRO !GREL Chicago Cardinal Joseph Bernardin, head of the second-largest U.S. Roman Catholic archdiocese, said on Friday his doctors had diagnosed him as having liver cancer and he had a year or less to live. Bernardin, 68, underwent extensive surgery for pancreatic cancer in June 1995 followed by months of chemotherapy, which he said made him more aware of his own vulnerabilities and the need to minister to the sick. "On Wednesday, examinations indicated that the cancer has returned, this time in the liver. I am told that it is terminal and that my life expectancy is one year or less," a composed Bernardin told a news conference. In 14 years as Chicago's archbishop, he built a prayerful, saintly image and was deeply involved in world church issues and publicly committed to rooting out abuses by clergy. "I have been assured that I still have some quality time left," he said, saying he would undergo a new form of chemotherapy but his doctors have told him there was only a slim chance of a cure and the liver cancer was inoperable. "It's not going to be easy to say goodbye to everybody. Death does have some sad dimensions to it but I am a man of faith," he said. "Death is a natural phenomenom." He said he would "serve until the end" as cardinal. Pancreatic cancer is among the most deadly forms of the disease, although Bernardin's case was caught early. Surgeons removed a cancerous kidney, parts of his pancreas and stomach, small intestine, bile duct and surrounding tissues. He made a rapid recovery and resumed most of his duties, but then developed a deteriorating condition in his spine that caused him great pain and shortened his height by several inches. He was scheduled to undergo back surgery next month, but that was cancelled when the cancer was discovered in his liver in order to avoid delaying the start of chemotherapy. The spare, soft-spoken son of an Italian stonecutter took over the Chicago archdiocese, the nation's second-largest after Los Angeles, with 2.3 million parishioners, in 1982. Ironically, Bernardin, who developed a progressive, much-praised programme to deal with pedophilia involving priests, became the highest-ranking church official ever accused of sexual improprieties when a former seminary student leveled charges in 1993 that he had been sexually abused by Bernardin during the 1970s. Bernardin steadfastly denied the charges and the former student later recanted his tale of abuse. Bernardin prayed with him before he died from AIDS last year. Bernardin, who became archbishop of Cincinnati in 1972, played an increasingly prominent role in the U.S. church as a moderate voice of compromise among liberals and conservatives in the ranks of the bishops. This month, he announced that he would oversee a series of conferences to find "common ground" among American Catholics. Previously, he was instrumental in drafting church policy on war, peace and nuclear arms, and for seven years he headed the bishops' anti-abortion policy committee, espousing a policy describing human life as a "seamless garment." 6101 !GCAT !GCRIM A part-time sports coach who is part-owner of a Pennsylvania day care centre has been arrested on charges of sexual assault and endangering the welfare of two young girls, authorities said on Friday. Police also seized the man's computer, which contained evidence he used it to communicate with children in other states while posing as a child, said Jack Smith, a spokesman for the Burlington County prosecutor's office. Authorities said the man, Richard Gibbs, 45, of Medford, New Jersey, had had extensive contact with area children and they asked parents to cooperate in a continuing investigation. Smith called the case "one of the worst violations between children and an adult they trusted in my experience." Gibbs was arrested after a search of his home on Thursday led to the discovery of videotapes of girls on a New Jersey beach. Nude images downloaded to a computer disk also were discovered. "When the warrant was served, along with the videotapes, we confiscated a home computer which showed that he had been communicating on-line with children in other states. He was posing as a child," Smith said. The investigation began on Aug. 21 after the mother of a 10-year-old girl complained of a possible sexual assault by her soccer and softball coach, a statement from the prosecutor's office said. It said Gibbs was being charged with illicit contacts since December 1995. In addition to serving as a coach in Medford youth leagues, Gibbs has volunteered to stage-manage events at a local dance school and to teach computers at a local elementary school. He was being held in Burlington County Jail awaiting arraignment. 6102 !GCAT !GPOL !GVOTE President Bill Clinton took his re-election drive back on the road on Friday with a replay of the bus tour that revved up voters in 1992, hoping to put a sideshow involving a former top aide and a hooker behind him. Clinton, accompanied by his wife Hillary and Vice President Al Gore and his wife Tipper, flew to this midwestern city from the Democratic Convention in Chicago and climbed aboard a specially equipped bus for a two-day road trip through four politically important states. At a rally in a Cape Girardeau park attended by thousands, Clinton said in a brief, punchy speech that he was glad to "get back on the roads that we drove in 1992 because Hillary and I and Al and Tipper, we want to see the faces of America." "We want you to know that we're going to build a bridge to the 21st century that all of you can walk across with your family, with your children and with your neighbours," he said, echoing the theme of Thursday's Democratic Convention speech. Gore, in a warmup speech, praised Republican presidential candidate Bob Dole, a partially disabled veteran of the Second World War who served in Congress for 35 years, as a "good and decent man who has served our country honourably." "We will treat him with the respect that he has earned and he deserves, but we disagree with his ideas," Gore said. The bus tour was designed to duplicate a wildly successful campaign gimmick that Clinton and Gore and their wives used to reach out to the public after their convention in 1992. It was also intended to build on the momentum of the president's convention-week train trip, which drew large, enthusiastic crowds at every stop and created some short-lived euphoria within the Clinton camp. That euphoria swiftly evaporated with the forced resignation of Dick Morris, a top campaign aide who helped engineer Clinton's miraculous comeback from a Democratic debacle in the 1994 congressional elections. Morris, who is credited with getting Clinton to emphasise "family values," quit the campaign and hastily left Chicago on Thursday after a supermarket tabloid story, picked up by the New York Post, said the married adviser shared White House secrets with a $200-an-hour prostitute with whom he allegedly had a year-long affair in Washington. The bombshell shook Clinton on the very day he accepted his party's nomination for a second term and outlined his agenda for the next four years in a televised speech. Senior presidential adviser George Stephanopoulos called the scandal "a speed bump and not a pothole" for the Clinton campaign, but the New York Times said in an editorial on Friday that it "reactivates the aura of immorality that has always been a liability for Mr. Clinton." A new USA Today/CNN/Gallup poll showed Clinton lengthening his lead over Dole to 13 percentage points, but the poll was taken before the flap exploded into public consciousness. The bus caravan carrying the Clintons and Gores was to wind its way through parts of Missouri, Illinois, Kentucky and Tennessee, all of which Clinton carried in 1992, before ending in Memphis on Saturday night. Before leaving Chicago, Clinton said in a speech to the Democratic National Committee that he was tired after the convention and the train trip and joked that he had asked Gore late on Thursday night: "Why are we going out on a bus?" Gore's deadpan reply was "Because we do not wish Senator Dole to be the next president," Clinton said. 6103 !GCAT !GDIP !GPOL !GVOTE The State Department said on Friday presidential and parliamentary elections in Bosnia should take place in September as scheduled despite calls for a delay. "We believe that the elections will occur in as free and fair a way as possible," spokesman Glyn Davies said. "These elections are extremely important from the standpoint of the Bosnian people to create the institutions that Bosnia needs to begin a longer-term process of ethnic reconciliation." There are no plans to postpone the elections, which will go forward on Sept. 14, he added. On Tuesday the Organisation for Security and Cooperation in Europe (OSCE), which is responsible for the voting, delayed municipal elections because of irregularities in registering Serb refugee voters. Republican presidential candidate Bob Dole urged President Bill Clinton on Thursday to postpone all elections in Bosnia, saying they were a "sham" because opposition leaders have been intimidated and refugees have been prevented from returning to their homes. "I believe that putting American prestige behind such a process only serves to undermine our leadership and makes a mockery of our commitment to democratic principles while making it more difficult for U.S. troops in Bosnia to accomplish their goals," Dole wrote Clinton in a letter released by his campaign. 6104 !GCAT !GDIS !GWEA Cool weather helped harried firefighters gain ground on dozens of wildfires sweeping through dry brush and trees in the western United States, officials said on Friday. "We made a lot of good progress yesterday. We got a break from the weather. We took as much advantage from that as we could," said Mike Brown, a spokesman for the National Interagency Fire Centre in Boise, Idaho, which coordinates firefighting efforts. He said the cooler weather should persist for a day or two across much of the region, but said that next week forecasters predict a return of hot, dry weather with thunderstorms that can cause lightning fires. "We're trying to get as much done as we can during this window of opportunity," Brown said. Thirty-five major fires were burning in eight Western states, down from 46 on Thursday. More than 22,000 firefighters were battling the blazes that have blackened almost 690,000 acres (280,000 hectares) of tinder-dry brush, grass and woodlands, fire officials said. Brown said that despite the good progress firefighting resources were still stretched. The Department of Defence agreed on Thursday to send a battalion of Marines to help in the firefighting effort. The Marine battalion from Camp Pendleton in southern California was being trained on Friday before being sent on Saturday to help fight the 45,000 acre (18,200 hectare) Tower fire in the Umatilla National Forest in Oregon. An infantry battalion is already on the fire lines in Oregon. A battalion consists of about 530 soldiers. Firefighters managed to build fire lines around half of a 21,300-acre (8,600 hectare) arson fire burning in a scenic area near Lake Castaic, 60 miles (95 kms) north of Los Angeles, fire officials said. "They made good progress last night," said fire information officer Cliff Johnson. But he said there was no estimate of when the fire would be fully contained. Seven of the 1,686 firefighters battling the blaze have suffered minor injuries, Johnson said. Temperatures could go as high as 106 degrees (41 C) in the area on Friday, he said. A 15-year-old boy pleaded not guilty in a southern California court on Thursday to starting the fire. A 46,200-acre (18,700 hectare) blaze burning in Yosemite National Park and the Stanislaus National Forest in northern California was three-quarters contained on Friday with full containment predicted for Saturday, officials said. Firefighters were gaining the upper hand on several of 10 large wildfires burning in Oregon that have charred a total of more than 210,000 acres (85,000 hectares). Eight large fires were burning in Nevada, covering a total of 176,000 acres (71,200 hectares). The largest of them, the 95,000 acre (38,400 hectare) Upper Humboldt Complex fire, was expected to be fully contained later on Friday. 6105 !GCAT !GDIP The State Department refused to speculate on Friday on what might happen in the case of Louis Farrakhan, the U.S. black leader who was awarded a $250,000 human rights prize by Libya. "I'm not going to speculate about what may or may not happen in that case," State Department spokesman Glyn Davies said. " ... The view of the U.S. government on (Farrakhan's) not accepting any gifts from Libya is well-known." Davies also noted: "We've talked about the passport restriction for travel to Libya" but he did not elaborate. The U.S. Treasury Department on Wednesday denied Farrakhan's application to receive the $250,000 award or a $1 billion donation Libyan leader Muammar Gaddafi had pledged to Farrakhan's Nation of Islam group after they met last January. Farrakhan organised last October's Million Man March that brought thousands of black men to Washington for a peaceful rally. The Treasury Department said Libya was on the U.S. list of states that sponsor international terrorism and noted that Tripoli has refused to hand over two Libyan suspects in the 1988 bombing of Pan Am flight 103 over Lockerbie, Scotland. That refusal led to the imposition of U.N. sanctions on Libya. 6106 !E11 !E51 !ECAT !GCAT !GDIP !GPOL !GVIO The White House on Friday strongly condemned rebel violence in Mexico, but the State Department said it saw no threat to Mexican political or economic stability from the leftist guerrillas. Scores of heavily armed masked guerrillas from the self-styled Popular Revolutionary Army (EPR) attacked police and military posts in several towns in central and southern Mexico on Wednesday and Thursday. "We condemn the violent actions of what appears to be a very ruthless, small, armed organisation of obscure groups dedicated to the overthrow of the Mexican government," White House spokesman Mike McCurry told reporters travelling with President Bill Clinton on a campaign trip in Missouri. The Mexican government has reported that 14 people died and more than 20 were injured in the rebel attacks, State Department spokesman Glyn Davies said. Other reports indicate that at least 12 died. "There can be no justification for violence in pursuit of political ends in Mexico. However, it's important to underscore that the United States does not consider these actions threatening to Mexican political or economic stability," Davies said. The attacks rattled investors who baled out of Mexican stocks and drove the peso lower in a clamour for dollars. Davies said not much was known about the EPR, which emerged two months ago as the armed wing of a clandestine radical leftist group known as PROCUP, which first appeared in the early 1970's. Davies praised Mexico's efforts to strengthen its economy following last year's currency crisis that prompted an international financial assistance programme. He noted a pickup in Mexico's economic growth this year, a drop in inflation and a lower unemployment rate. "We don't believe that this group, the EPR, can undermine those basic, strong fundamental indicators," he said. 6107 !GCAT !GPOL President Bill Clinton, his wife Hillary and Vice President Al Gore telephoned ex-campaign adviser Dick Morris "just to check on a friend going through an ordeal," the White House said on Friday. As Clinton began a two-day bus tour, White House spokesman Mike McCurry told reporters the phone calls were made on Thursday afternoon, hours after Morris resigned from the campaign after a sensationalist supermarket tabloid said he had a year-long affair with a prostitute and had confided White House secrets to her. McCurry declined to give details of the call, saying: "It was a private conversation and I didn't ask them to relay the details. They were brief phone calls just to check on a friend going through an ordeal." Asked if Clinton had put the Morris imbroglio behind him, McCurry told reporters, "We have. Whether you have remains to be seen." 6108 !C31 !C312 !CCAT !GCAT !GHEA !M14 !M141 !MCAT U.S. government and meat industry officials said Friday they did not expect a food poisoning outbreak in Japan to affect U.S. beef exports, despite discovery of bacteria in a shipment of U.S. offal. Earlier Friday, the Japanese Health Ministry said it had found E. coli O157:H7 bacteria in one shipment of U.S. beef intestine. The U.S. Embassy in Tokyo said the importer destroyed the product and it was not distributed for sale. The bacteria is the same one that has caused a widespread food poisoning epidemic in Japan, killing 11 people and making 9,000 more sick. Taylor said U.S. and Japanese authorities had been "working very closely and cooperatively" and said there was no indication that Japan would restrict imports. The Japanese Health Ministry in Tokyo said in its announcement that there was no need to restrict U.S. beef imports. U.S. Meat Export Federation Vice President Jeff Oates praised Japanese authorities for their handling of the discovery. "The handling of the announcement has been very responsible, very factual, without a lot of rhetoric or hyperbole," Oates said by telephone from his Denver office. "We don't get any indication that this will lead to tighter restrictions on imports of U.S. beef or beef offal to Japan. Nor would we expect that it would," Oates added. He said it was the only finding of E. coli O157:H7 in U.S. beef shipped to Japan. -- Eddie Evans (202) 898-8489 6109 !E21 !E211 !ECAT !GCAT !GPOL !GVOTE Republican presidential nominee Bob Dole, campaigning in the party stronghold of Orange County, said on Friday tax cuts were the best way to help taxpayers and boost the economy. "Our plan starts with a tax cut, 15 percent, 15 percent," Dole said. "This is a pro-growth, pro-family programme," he told an audience of several thousand at the Orange County fairgrounds under a blistering sun. "I hope you've all brought your sun screen," a tanned Dole said. "We've had a smoke screen in Washington," he added, referring to the policies of President Bill Clinton. Dole also derided as late Clinton's proposal to allow home owners to avoid paying taxes on up to $500,000 in capital gains when they sell their homes. And he said it was possible to cut taxes and balance the budget, a claim the Clinton campaign has derided as unrealistic. While Dole hammered away at the policies of the Clinton administration, he was silent about the resignation of top Clinton strategist Dick Morris after a sensationalist supermarket tabloid reported that Morris had a long relationship with a high-priced call girl. Dole has been on vacation in southern California but has made some campaign appearances. California has 54 electoral votes, one fifth of the votes needed to win the presidency, and so far Clinton is leading in the state. Dole maintains he is not giving up on California. Dole also hammered away at liberal judges and illegal drugs, promising a "real war on drugs" if elected. He appeared with his running mate, former Representative Jack Kemp, who told the mostly white audience that Abraham Lincoln, the Civil War president who ended slavery, was the role model for both Dole and himself. Earlier in the week, Kemp campaigned for the black vote in south central Los Angeles, flashpoint of the 1992 Los Angeles riots. He told the Orange County audience about his visit and said a Dole presidency would "deliver the hope of jobs." The Dole campaign on Friday also urged the Clinton campaign to sit down next week with Dole aides to work out details for upcoming presidential and vice presidential debates. "This gives us plenty of lead time to start and of course it's going to take the Clinton campaign quite some time to do this. They have a bigger challenge then we do. They have to explain how Bill Clinton's been on two sides of so many issues," said Dole's press secretary Nelson Warfield. Dole told reporters as he was leaving his hotel in Irvine, California, that he still had not read Clinton's Thursday night acceptance speech at the Democratic Convention. "Haven't read it yet. Of course I didn't get to see it. We were in the air (traveling)," Dole said. 6110 !C12 !C17 !C171 !CCAT !GCAT !GCRIM Kaiser Aluminum Corp. said Friday it was evaluating its options after the Delaware Supreme Court upheld a lower court decision blocking its plan to create a second class of common stock. Kaiser, one of the world's leading producers of aluminum, said it was disappointed by the Delaware Supreme Court's decision late Thursday upholding a preliminary injunction issued by the Delaware Court of Chancery April 10 against the plan's implementation. The chancery court found that the existing conversion rights of preferred stockholders could not be adjusted as proposed without the consent of the preferred holders. Kaiser had proposed issuing Class A common stock with one vote per share and another class of common stock with 1/10th of a vote per share. The company said its common stock holders had approved the proposal but some holders of its convertible preferred stock had objected to the plan and sought to block it in court. The plaintiffs alleged in their lawsuit that the stock reclassification plan was an attempt by management to create an unfair advantage for Kaiser's majority shareholder, Maxxam Corp. Maxxam owns about 62 percent of Kaiser's common stock but none of its preferred shares. Kaiser's common stock gained 12.5 cents to $12.25 in afternoon trading on the New York Stock Exchange. 6111 !GCAT !GDIS !GENV !GWEA A blistering drought that had evoked memories of the Dust Bowl of the 1930s has ended in a flurry of heavy rain and flash flood warnings all across Texas, meteorologists said on Friday. "To break a drought, you need one good month of rain, so I would say, yes, it's (the drought) over," meteorologist Joel Burgio at private forecasting firm Weather Services Corp. in Lexington, Massachusetts, said. In many parts of the state, rain has fallen steadily since last week when remnants of Hurricane Dolly spun through northern Mexico and crossed the Rio Grande into Texas. Some areas have had nearly a foot (0.348 metre) of rain, others much less, but the rain was still falling on Friday, bringing smiles to the faces of farmers and ranchers. "Many of our producers are a lot more optimistic than they were a month ago. Their pastures are greening up and the subsurface moisture, which is what is needed to help crops take root and thrive, now looks a lot better," Texas Agriculture Department spokesman Gene Acuna said. Early in the summer, farmers in the Texas Panhandle and the neighboring states of Oklahoma and Kansas complained about dust drifting in fields and across country roads as it did in the 1930s when drought chased thousands from the land. But dust turned to mud this week when flash flood warnings went up across a broad part of the state. Moderate flooding struck a number of rivers and streams, even forcing evacuations in some areas. National Weather Service technician Roger Backer said rescue workers helped people from their homes when the Concho River near usually arid San Angelo in West Texas went over its banks on Thursday. The weather service on Friday posted flood warnings throughout central Texas and along the Texas coast where the once-parched land is now so saturated with water that continuing rains were expected to run directly into rivers. Backer said San Angelo had 7.58 inches (19.25 cm) of rain in August -- well above its average of 1.65 inches (4.191 cm) for the month. So far this year, the city has received 12.63 inches (32.08 cm) of rain, slightly above its average of 12.49 inches (31.72 cm) for late August. The same was true in many Texas cities -- Houston and Austin, for example, were both more than five inches (12.70 cm) ahead of their usual August rainfall totals, according to National Weather Service figures. Along the U.S.-Mexico border, the rain broke nearly three years of severe drought that killed livestock in northern Mexico and dropped the level of Falcon Lake, a man-made reservoir on the Rio Grande, so low that old villages and Indian settlements at the lake bottom were exposed. Looters have been robbing human remains and other items from coffins buried for centuries in cemeteries that were covered by the lake when it was created in the 1950s but are now sticking out above the ground. Acuna warned that while the drought may be over its effects would linger. State figures show that farmers and ranchers lost an estimated $2.1 billion in the dry spell, forcing many of them to take out loans to survive. "The rains have not made the agriculture loans they have in hand go away. They still have to pay them off, so people are still living with the drought," he said. 6112 !GCAT !GENT The largest exhibition in 60 years of paintings by post-impressionist master Paul Cezanne ends a three-nation tour on Sunday after setting an attendance record at the Philadelphia Museum of Art. The exhibition, an artistic and financial success, had drawn more than 700,000 visitors to its Philadelphia venue by Friday since its opening on May 30, museum spokesman Matt Singer said. That exceeds by about 200,000 both the originally expected attendance and the museum's previous record, set in 1995 with an exhibition of the Barnes Foundation art collection. At its two other stops, at Paris's Grand Palais and London's Tate Gallery, the exhibition drew 640,000 and 410,000 visitors respectively. Tickets for the Philadelphia exhibition had been sold out since July 26. Musem memberships with ticket purchase privileges also were sold out. In addition to setting attendance records, the exhibition also helped cement and enrich the reputation of Cezanne as a vital precursor of the modern art movement. "It made me realise...the complexity and the pervasion of his influence," said Joseph Rishel of the Philadelphia Museum of Art. Rishel was a co-curator of the exhibit, along with Francoise Cachin of the Musees de France. Said Rishel, "I think one comes out with a lot of new questions...such as, 'How did he do it? , Why is it so remarkably effective still? , Why was the hard core of our audience younger artists looking very hard at Cezanne to figure out how he did it?" "It was just wonderful to see the number of artists really using this show," Rishel said. After the last visitor sees the exhibit on Sunday, the 112 paintings and 75 drawings and watercolors will be taken down and shipped to the private collection and museums, such as the Hermitage in Russia and the Louvre in France, that loaned them. City tourism officials have estimated the exhibition in Philadelphia, the only United States stop for the show, will have contributed $60 million to the city's economy. Final attendance and economic figures will be released next week, Singer said. Rishel said his next challenge as a curator will be preparing a show for 1998 to celebrate the 100th anniversary of French Romantic painter Eugene Delacroix. "One of Cezanne's favourite artists was Delacroix, so I've decided to stay in the family," Rishel said. 6113 !GCAT !GCRIM Customs officials seized two military helicopters bound for Gambia in West Africa and arrested a Gambian and a French national for trying to bribe an agent to release the aircraft, the U.S. Customs Service said on Friday. Mari Arna Darboe, 40, of Gambia, and Serge Comminges, 38, a French citizen, were arrested on Thursday in Miami, on charges they tried to bribe a Customs agent to release two Bell TH-1F military helicopters. The helicopters were seized at Miami International Airport two weeks ago as they were being illegally exported out of the United States. On August 23 -- a week after the aircraft were seized -- Comminges allegedly offered a Customs agent $20,000 to give back the helicopters. The Customs Service said Darboe, unaware of Comminges' bribery attempt, offered $30,000 to the same agent three days later to get the helicopters released. Darboe and Comminges were arrested on bribery charges. Both said they were working for an African businessman in Gambia called Foutanga Dit Babani Sissoko, whom they described as a wealthy man trying to create his own airline. If convicted, they each face up to five years in prison and fines of up to $50,000. 6114 !C21 !C24 !CCAT !GCAT !GWEA !M14 !M141 !MCAT Scattered to widely scattered showers were forecast for parts of western Iowa and eastern Nebraska over the weekend while the rest of the corn belt was expected to be warm and dry, Weather Services Corp said. "Beginning on late Saturday and probably again on Sunday, there would be the risk of some scattered to widely scattered storms with rainfall amounts of .25 to .75 inch and locally heavier," said WSC meteorologist Joel Burgio. The forecast was based on late morning National Weather Service weather map updates, Burgio said. Coverage was expected to be 50 percent in western Iowa and eastern Nebraska, he said. There was no precipitation in the forecast through Sunday for areas east of the Mississippi River, Burgio said. Temperatures across the corn belt were expected to top out in the low to mid 80s Farenheit, he said. --Emily Kaiser 312-408-8749 6115 !GCAT !GPOL !GVOTE In ways both real and imaginary, the Republican and Democratic conventions have been transforming experiences, likely to confuse voters who thought they knew what the political parties stood for. Alice in Wonderland would have felt at home. The parties and their candidates did political makeovers as if the Mad Hatter was their hairdresser with pollsters as advisers. George Orwell, creator of the phrase "War is Peace" in his novel "1984," would have felt at home as liberals prided themselves on their caring conservatism and conservatives delighted in presenting themselves as thoughtful moderates. Politics took a back seat as the parties sent crime victims, Olympic heroes, movie stars, sportcasters and victims of debilitating diseases across their stages. Every so often someone talked politics, but it seemed out of place. The television networks threw up their hands and declared that no one was watching and the convention system was dead or at least pointless. They warned that they would stop broadcasting the conventions four years from now unless they got interesting. But maybe the networks were not watching. The Republicans went into their convention with the reputation of being tough fiscal conservatives dominated by the religious right and rich white guys. They emerged as the party of inclusion and tolerance -- a big tent, open to all creeds and races and points of views. It looked as if Jesse Jackson's "Rainbow Coalition" had been hired as decorators there were so many races and creeds dominating the stage. The party's Southern white male Congressional leadership seemed to be in hiding. The Democrats, long a fractious grouping of liberals, ethnic groups and moderates, emerged unified and championing traditional values of the family and fiscal responsibility. Dour, grumpy Bob Dole, 73, declared himself "the most optimistic man in America" at the Republican convention even though the polls said he would lose. Bill Clinton, written off two years ago as a sure loser, walked out of the Democratic convention as a new man -- gray hair and a centrist platform that had Republicans complaining he had stolen their issues. Clinton had to declare his relevance in 1994 after the Democrats lost majority control of both houses of Congress. Clearly he does not have to do that any more. His wife, Hillary Rodham Clinton, also had a transforming experience at the convention. Critics charge she is a strident feminist and secret power in the White House, but she emerged from Chicago as the loyal wife who talked about "my husband," "his programs" and "our daughter." So much for bumper stickers that declare: "Fire Clinton and her husband too." Vice President Al Gore's transforming experience was hard to notice. The man known as one of the most wooden speakers in the country did his own verion of the Spanish dance craze, the Macarena, for the convention. He stood completely still for several seconds, then offered to do it again. After his self-deprecating jokes, Gore delivered a tough attack on Dole and a moving recollection of his sister's losing fight with lung cancer caused by smoking. Gore, it seemed, was transforming himself into Clinton's logical successor as president. Republican vice presidential candidate Jack Kemp also emerged as a different man from the convention. He went in as a Republican moderate on social issues and came out opposed to affirmative action programmes for women and minorities and for deep restrictions on illegal immgrants. The biggest transformation of all at the conventions also carried a harsh note of personal tragedy. Clinton's chief campaign strategist Dick Morris went to Chicago as the king of the political hill -- a man credited with reviving the Clinton presidency, his photograph on the cover of Time magazine. But he left in disgrace, his career probably in ruins after a sensationalist supermarket tabloid reported he had been consorting with a Washington prostitute for over a year. The woman, who was paid by the tabloid for the story, claimed that Morris told her secrets of the Clinton administration. In less that four days, Morris had gone from hero to heel -- now that's a transformation. 6116 !GCAT !GPOL !GVOTE Now that the party conventions are over, Republicans have signalled they are ready to move into the next phase of the campaign and meet with President Clinton's aides to hammer out details of presidential debates. The Dole campaign released a letter Friday inviting their Clinton counterparts to meet with Dole campaign manager Scott Reed to discuss particulars of the televised debates. "Next week, a small group of representatives from each of our campaigns should meet to address participants, format, timing and logistical issues surrounding the debates," Dole campaign manager Scott Reed wrote to Clinton campaign manager Peter Knight. Tentative dates for the debates are Sept. 25, Oct. 9 and Oct. 16. The vice presidential debate is scheduled for Oct. 2. Former South Carolina Gov. Carroll Campbell, who was on Dole's vice presidential short list before Dole decided on Jack Kemp, will head Dole's team. A decision is expected by mid-September on whether Texas billionaire Ross Perot, the Reform Party candidate, will be allowed to participate in the debates, which are sponsored by the Commission on Presidential Debates, a non-profit, non-partisan organisation that took over the forums in 1988 from the League of Women Voters. 6117 !C13 !C31 !CCAT !GCAT !GPOL Last-minute lobbying was underway Friday in California's Legislature before crucial votes, expected by Saturday, on a plan to open the state's electricity market to competition and slash consumer rates. A joint Senate-Assembly conference committee voted 6-to-0 earlier this week in favour of the complex legislation, which would deregulate California's massive electric power industry while cutting consumer rates by at least 20 percent by 2002. The bill's supporters were lobbying in Sacramento trying to secure the votes they will need to pass the measure by Saturday's legislative deadline. "We expect to be able to pass both the Assembly and the Senate Friday or Saturday and we anticipate a favourable result from the governor," said Republican Assemblyman Jim Brulte, one of the proposal's authors. The sweeping legislation would restructure the electric industry in California, ending the utility monopoly on generation and opening the market to competition. The bill has the support of the large investor-owned utilities that would be affected most, Pacific Gas & Electric Co., Enova Corp.'s San Diego Gas & Electric Co. and Edison International's Southern California Edison. "We believe this is a truly historic piece of legislation," Brulte said. "We are talking about a $20-billion-plus regulated monopoly, and in a very short transition period, moving it toward market competition." The measure's backers contend it would stimulate the state's economy. High electricity rates in California have made it difficult for businesses to compete, they argue, saying that with lower rates, companies could reinvest millions of dollars back into the economy and create new jobs. Senate President Pro Tem Bill Lockyer, a Democrat, pronounced the electric industry restructuring legislation "the most significant economic measure of the year." Under the proposed legislation, electric utility customers in the state would have a choice of providers as early as January 1998. Municipal utilities would not be required to open their markets, but most municipal utilities were expected to comply voluntarily. To help the investor-owned utilities better compete, the utilities would be compensated for certain "stranded" costs, such as nuclear power plants, that would not be economical in a competitive market. They would be compensated through a system-wide competition transition charge. Under the proposed legislation, from Jan. 1, 1998 to Dec. 31, 2001, the transition charge would come to roughly one to two cents per kilowatt hour. The charge would help to raise over $28 billion to cover certain stranded costs of the utilities. After Dec. 31, 2001, the utilities could extend a smaller transition charge for 10 years or more. While the charge is in place, investor-owned utility rates would be capped, state officials said. Initially, the utilities could issue, through the state infrastructure bank, about $5 billion in revenue bonds backed by the transition charge, said David Takashima, chief of staff for Senator Steve Peace, the conference committee's chairman. Takashima said the utilities could issue additional "rate reduction bonds" later, for a total of $10 billion. The proposed bond financings would provide substantial savings to the utilities, and those savings, under the legislation, would be passed on to customers. The legislation provides for no less than a 10 percent rate reduction beginning in 1998. Residential and small business customers would receive assured rate reductions of at least 20 percent by 2002. 6118 !C13 !C24 !CCAT !GCAT !GENV The U.S. Environmental Protection Agency Friday proposed a rule to slash emissions of air toxics and other pollutants from plants that produce molten aluminum. The proposal would affect 24 existing plants nationwide and any subsequent plants. It would reduce air toxics, which can cause cancer, birth defects and other serious health effects, and other emissions by about 5,700 metric tons annually, or by 50 percent, the EPA said. The proposal also would cut particulate matter emissions -- dust, dirt and smoke -- by 16,000 tons a year, also by 50 percent. The proposed rule was developed as a pilot project in which the industry, state and local governments and the EPA tried to write more streamlined and cost-effective regulations, the EPA statement said. The plan provides for "emissions averaging" which would allow facilities to vary the level of control among certain sources as long as they were within overall limits. The plan also allows plants to test emissions less frequently if they consistently perform above EPA requirements. 6119 !GCAT Equipment problems and mechanical failure forced a recovery expedition to give up efforts to retrieve a giant slab of the RMS Titanic from the ocean floor, a spokeswoman said on Friday. A 20-ton piece of the Titanic's steel hull, which had been attached by cables to a recovery ship off the coast of Newfoundland, Canada, fell back to the bottom of the sea, said Erin Purcell of Boston-based Reagan Communications that represents two of the ships used in the expedition. The piece of hull, lifted from the ocean floor by means of several diesel-filled bags, had been stuck about 200 feet (about 70 metres) below the water's surface before it fell, she said. It fell as recovery crews were trying to haul the piece into more shallow water and several of the bags burst and cables snapped, she said. The steel-hulled Titanic, thought to be unsinkable, struck an iceberg on April 14, 1912, and sank, killing 1,523 of the 2,200 passengers and crew on board. The wreck was located in 1985. Passengers who had paid $1,500 and up to accompany the recovery expedition on two cruise ships had returned back to port on Thursday, Purcell said. 6120 !GCAT !GDEF !GDIP India gave notice on Friday it would demand a two-thirds vote in the U.N. General Assembly on a nuclear test ban treaty it opposed but would not move to prevent the 185-member body from debating the issue. At a news conference, however, India's U.N. ambassador, Prakash Shah, questioned the legitimacy of the entire vote, demanded by Australia and other countries, and argued that the treaty should not have come before the assembly. Australia has called a meeting of the General Assembly for Sept. 9 to have it adopt the draft treaty and open it for signature by individual states. After nearly three years of negotiations for a landmark Comprehensive Test Ban Treaty, India this month vetoed the text of the 61-nation disarmament conference because nuclear weapons states made no move to give up their arsenals. Decisions by the conference have to be unanimous. Whether or not the General Assembly needs a simple majority or a two-thirds vote, diplomats supporting the treaty are confident they will win the battle. India is counting on developing nations, only 29 of which were represented in Geneva, to join it in opposing the treaty. The pact cannot go into force until 44 nations with some nuclear capabilities sign and ratify it. But states like Australia believe the commitment to stop testing would begin as soon as it was opened for signature and India would come under pressure to sign. "We are now faced with attempts to circumvent the decision of the Conference on Disarmament in Geneva by a procedural manoeuvre," Shah told reporters. "If we all believe that the treaty is such an important issue, Article 18 should apply," he said, referring to a U.N. Charter article that says important questions need a two-thirds majority of members voting. Shah said India did not approve the treaty because it did not lead to elimination of nuclear weapons, did not cover all kinds of nuclear testing and allowed the five acknowledged nuclear weapons powers to continue developing and improving the quality of their atomic arms. The five declared nuclear weapons states are the United States, Russia, France, Britain and China. "We will participate in the session, we will put forward our point of view, we will point out substantive shortcomings," Shah said, adding: "And we will vote against the resolution." He also vigorously denied that India opposed the treaty because it did not want to stop its nuclear weapons programme, saying the nuclear powers would not give the slimmest commitment to work toward eliminating these arms. Australia's U.N. ambassador, Richard Butler, said earlier he agreed with many of the criticisms India raised, because "it is right to want progress in nuclear disarmament." But he said that since 1945 there had been 530 nuclear tests so states could develop ever-more-sophisticated arms. Therefore, commitments to stop testing were tantamount to a moratorium on developing new and different nuclear bombs. The treaty, he said, was also designed to make sure potential nuclear states gave up whatever development plans. 6121 !GCAT !GDIP !GVIO The U.N. Security Council on Friday threatened an arms embargo against Burundi's leaders if they did not initiate all-party negotiations to end violence many fear will escalate into widespread massacres. In a resolution adopted by a 15-0 vote, the council for the first time also bluntly condemned the July 25 military coup in the central African country. It supported mediation under former Tanzanian President Julius Nyrere as well as measures adopted by African states that include economic sanctions. The main thrust of the measure, first proposed by Chilean Ambassador Juan Somavia, was to pressure Burundi's military leaders into unconditional negotiations with all the country's parties and factions, "without exception." If such talks have not begun by Oct. 31, the council will consider imposing an arms embargo or applying selective unspecified measures against "leaders of the regime and all factions who continue to encourage violence and obstruct a peaceful resolution of the political crisis in Burundi." If a political settlement is achieved, the document asks the United Nations to call a conference to raise funds for reconstruction and development in Burundi, where more than 150,000 people have died in fighting over the past three years. But the resolution was considerably watered down, mainly by Europeans, from Chile's original proposals, which called for an immediate arms embargo and threatened further measures if negotiations did not show progress. Burundi's U.N. ambassador, Nsanze Terence, a Tutsi, seemed pleased with most of the points in the resolution, which he had harshly criticised earlier. The council flatly condemned the July 25 coup, in which the Tutsi-run army overthrew the country's elected Hutu president, Sylvestre Ntibantunganya, and installed Maj. Pierre Buyoya as president. The new rulers say they seized power to prevent genocide in Burundi between between minority Tutsis and the Hutus, who make up about 85 percent of the population. The resolution also for the first time supports efforts by African nations, some of which have imposed economic sanctions on Burundi, a landlocked country of 5.6 million people teeming with refugees. France, however, indicated it was not in favour of these sanctions, saying they endangered the delivery of food, medicine and other goods. Chile's Somavia told reporters the resolution "was a major advance" for the council compared with its position a month ago. "We had a divided Security Council, some wanting to give time to Buyoya to see what happens. The council now has a stated position and has decided on a line of action," he said. He said he had dropped his call for an immediate arms embargo, mainly because members argued that current sanctions by African nations needed to be given a chance. 6122 !CCAT !GCAT !GDIS Accident investigators working on an Arctic mountain recovered a flight recorder from the snowbound wreck of a Russian airliner on Friday, hoping it could help explain the disaster in which 141 people died. The Tupolev Tu-154 bringing Russian and Ukrainian coal miners to work on the remote island of Spitzbergen crashed into the mountain on Thursday as it was about to land, killing all those on board. A spokesman for the island governor's office said the flight data recorder had been found, containing vital information about the height and speed of the plane when it crashed. But Norwegian investigators told a news conference later it could be either the data recorder or another device from the plane recording the pilots' voices and communications. The shockproof orange box, found buried in snow near the remains of the plane's tail section, could tell Norwegian and Russian investigators whether the plane was off course or flying too low -- if the data inside has not been damaged. It will be taken to Moscow for detailed examination. A team of police, investigators and doctors also began the perilous, grisly task of recovering bodies from the crash site. They were flown there by helicopter on Friday, 24 hours after the crash, once a break in bad weather allowed them to move in. "We are digging the dead out of the snow," deputy governor Rune Baard Hansen told reporters. Tore Dahlberg, a doctor who went to the scene, told Norwegian television the wreck area was "a terrible sight". "We saw the mangled remains of people in the wreckage," he said. Getting the bodies down from the mountain is a priority. "The first thing is that the dead will be counted and tagged. Then the victims will be bagged, sent by helicopter to Longyear and afterwards flown to Tromsoe (in mainland Norway) for autopsy," said police coordinator Ivar Follestad. Most of the three-engined plane, smashed and broken, is stranded on a mountaintop some seven km (four miles) east of Longyear. The tail section broke off and slid down the steep mountainside, scarring the surface and blackening the snow. The windblown, chilly streets of this tiny Norwegian mining town were all but deserted and flags flew at half-mast beneath a brooding, clouded sky on Friday. The close-knit, hardy Norwegian and Russian mining communities on the island were plunged into grief and shock by the worst air disaster in Norway's history. The island's governor, Ann-Kristin Olsen, choked back tears as she told reporters of the heartbreak she witnessed when visiting the stricken Russian mining communities on Friday. The miners were on their way to start work in the Russian towns of Barentsburg and Pyramiden. Fewer than 3,000 people live on Spitzbergen, which has one of the world's harshest climates and lies some 500 miles (800 km) off the northern tip of Norway. The crash site is inaccessible by land and there is a danger of avalanches and from polar bears which roam Spitzbergen's icy wastes, rescue officials said. Officials said it could days or weeks to bring all the bodies down from the mountain. Police said mountain climbers could be needed to reach the tail section of the plane. The Tupolev Tu-154 was bringing miners and some of their families, 76 of them from Ukraine, to work in a Russian open-cast mine. Spitzbergen is governed by Norway but Russia has rights of access under an international treaty from the 1920s. In Kiev, Ukrainian President Leonid Kuchma declared Friday a national day of mourning for the dead miners and their families. 6123 !CCAT !GCAT !GDIS Accident investigators working on an Arctic mountain recovered the flight data recorder from the wreck of a Russian airliner on Friday, hoping it could provide vital clues to the disaster in which 141 people died. The Tupolev Tu-154 bringing Russian and Ukrainian coal miners to work on the remote Arctic island of Spitzbergen crashed into the mountain on Thursday as it was about to land, killing all on board. "The flight recorder has been found," a spokesman for the island governor's office told reporters. The recorder could tell Norwegian and Russian investigators whether the plane was off course or flying too low. The spokesman said he did not know the condition of the recorder. A team of police, investigators and doctors also began the perilous and grisly task of recovering bodies from the snowbound crash site. They were flown there by helicopter once a break in bad weather allowed them to start work. "We came to a small area where there were parts of the plane and they were completely destroyed," said Tore Dahlberg, a doctor who went to the scene. "It was a terrible sight," he told Norwegian television. "We saw the mangled remains of people in the wreckage." Getting the bodies down from the mountain is a priority. "The first thing is that the dead will be counted and tagged. Then the victims will be bagged, sent by helicopter to Longyear and afterwards flown to Tromsoe (in mainland Norway) for autopsy," said police coordinator Ivar Follestad. Most of the three-engined plane, smashed and broken, is stranded on a mountaintop some seven km (four miles) east of Longyear. The tail section broke off and slid down the steep mountainside, scarring the surface and blackening the snow. The windblown, chilly streets of this tiny Norwegian mining town were all but deserted and flags flew at half-mast beneath a brooding, clouded sky on Friday. The close-knit, hardy Norwegian and Russian mining communities on the island were plunged into grief and shock by the worst air disaster in Norway's history. "It's a sight I will never forget. I will remember it for the rest of my life," said Stig Onarheim, one of a handful of rescuers who raced to the scene of the crash in a helicopter on Thursday, hoping in vain to find survivors. "Imagine a big plane with a lot of luggage and people on board. Think of all that mixed together, with twisted, wrecked parts on the slope," Onarheim, 29, told Reuters. The crash site is inaccessible by land and there is danger from avalanches and polar bears, rescue officials said. Officials said it could take days or weeks to bring all the bodies down from the mountain. Police said mountain climbers could be needed to reach the tail section of the plane. The plane was bringing miners and some of their families, 76 of them from Ukraine, to work in a Russian open-cast mine. Spitzbergen is governed by Norway but Russia has rights of access under an international treaty from the 1920s. The miners were on their way to start work in the Russian towns of Barentsburg and Pyramiden. Fewer than 3,000 people live on Spitzbergen, which has one of the world's harshest climates and lies some 500 miles (800 km) off the northern tip of Norway. In Kiev, Ukrainian President Leonid Kuchma declared Friday a national day of mourning for the dead miners and their families. Russian emergency service officials arrived on Friday, in an identical plane to the one that crashed. Almost 100 miners, due to be relieved by the miners who perished, flew back to Moscow on the plane later on Friday. Western aviation experts have raised questions about the safety of Russian airline operations following the breakup of the Soviet Union in 1991. But the pilot was experienced and did not report any trouble before the plane crashed. 6124 !C13 !C31 !C311 !CCAT !GCAT !GVIO Breeders who led a herd of cows on a marathon march to Paris won a pledge from President Jacques Chirac on Friday that he would help save their livelihoods jeopardised by the mad cow crisis. While the 26 cows rested in the shadow of the Eiffel Tower after covering some 350 kms (220 miles) in three weeks, the head of state spent almost an hour and a half hearing the grievances of five breeders who praised his "farmers' language". "The president told us that he wouldn't let us down but he had no magic wand," Pierre Grolleau, 53, told reporters. "For the outcome, we'll see tomorrow. We're people who are not in a hurry," he added. "We told him we were losing 3,000 francs ($600) per animal and he said he couldn't compensate for all the losses because of the Budget Ministry," said Nathalie Telemaque, 29, complaining of prices that slumped because of this year's disclosure that mad cow disease appeared to be a risk to human health. Shortly after the meeting, national statistics institute INSEE said prices for beef cattle fell another 10.2 percent in July, and were down 19 percent compared to year-earlier levels. Chirac, a conservative popular with farmers since he started out as an agriculture minister lobbying for them in Brussels, struck a charismatic note with the breeders. "He talks like a farmer. We laughed a bit, we interrupted each other," Grolleau said. But the protesters from the central town of Charroux won no specific commitments or a timetable for reforms. "He spoke of reducing overheads rather than grants. He said he would safeguard cattle-breeding on a family basis," Telemaque said. Chirac also discussed creating a new logo to better identify the origin of meat imports following a show of force by thousands of farmers who blockaded roads across the country before dawn on Thursday to carry out spot checks on lorries. Prime Minister Alain Juppe said later he had given Agriculture Minister Philippe Vasseur orders to be "especially pugnacious" in seeking greater European Union aid for farmers hit by the mad cow crisis. The cows did not follow their masters into the Elysee courtyard. "It's pretty difficult to manage stock here, even though we do have stables," quipped one Elysee aide. Wearing jeans and sweatshirts with rolled-up sleeves, the herders were also stripped of their staffs before entering Chirac's gilded offices. Some 1,500 breeders from various regions demonstrated on the grassy Champs de Mars park near the Eiffel Tower, joining the small group of Charroux breeders. On Thursday, about 15,000 farmers blockaded roads across France, checking trucks in a protest aimed at barring imports of beef from outside the EU because of low prices caused by the mad cow crisis. Thursday's blockades were the first in a wave of social unrest expected to target the austerity-minded government in coming weeks. European beef sales plunged after Britain announced the discovery of a likely link between bovine spongiform encephalopathy (BSE), or mad cow disease, and its fatal human equivalent Creutzfeldt-Jakob Disease (CJD). 6125 !GCAT !GCRIM !GPOL The Belgian cabinet approved tougher rules on Friday on the early release from jail of convicted paedophiles after revelations of a child sex, porn and murder scandal. Chief suspect in the affair Marc Dutroux was released from jail on parole 10 years early in 1992 from a 13-year sentence for multiple child rape. Two weeks ago he was charged with abduction and illegal imprisonment of children. "The government has approved certain new measures," Justice Minister Stefaan De Clerck told reporters. These included setting up a special tribunal of magistrates to vet requests for early release, which would work on the basis of unanimity for paedophiles and in other serious cases. Up to now the decision on early release has been left to the justice minister based on a majority of opinions from people ranging from the original prosecutor in the case to social workers, psychiatrists and prison staff. Former Justice Minister Melchior Wathelet bore the brunt of public anger when the scandal erupted. He had signed Dutroux's release papers after a narrow majority of the opinions he received were favourable. "The justice minister will no longer be involved in deciding conditional release," De Clerck told a news conference after the first cabinet meeting since the affair broke. Victims of sexual abuse would receive more help, abusers would be treated in special centres and be more closely monitored on their release and there would be better international coordination between police forces, he said. There would also be an independent examination of all the 8,000 examples of prisoners currently on conditional release to see how well they were being followed. They would start with the most risky cases, which included sex offenders. Belgium would also propose to other European Union member states that there be more international cooperation, for example in the fight against trafficking in people for prostitution and in finding ways to control the distribution of pornography. "The international aspect of crime and criminal networks demands a more adequate approach at the heart of the international forum," De Clerck said. In two weeks of searching police have so far discovered the bodies of eight-year-olds Julie Lejeune and Melissa Russo in the garden of one of the six houses Dutroux, 39, owns in and around the southern city of Charleroi. They have rescued two other sexually abused girls -- Laetitia Delhez, 14, and Sabine Dardenne, 12, -- from a dungeon in another of his houses and are searching for at least two others whom Dutroux admits kidnapping. 6126 !GCAT !GDIP The German government urged Israelis and Palestinians on Friday to avoid any course of action that might jeopardise the peace process in the Middle East. Israel announced this week the expansion of Jewish West Bank settlements surrounding Jerusalem and the demolition of an Arab community centre in East Jerusalem. City officials there said the centre was being erected illegally. But Palestinian President Yasser Arafat said the moves by Prime Minister Benjamin Netanyahu's government were tantamount to war. Tension has been rising in the region since. "We believe that the Israeli settlement policy in the occupied areas is an obstacle to the establishment of peace," German Foreign Ministry spokesman Martin Erdmann said. "All concerned must avoid taking any course of action that could pose an obstacle to the peace process and which could make a peaceful solution difficult," he said, as news came of a renewed breakdown in Arab-Israeli peace talks in Jerusalem. Erdmann told reporters Bonn supported European Union efforts to persuade Israel to stop further Jewish settlement on the West Bank. The foreign ministry later announced Israeli Foreign Minister David Levy would visit Bonn for talks with his German counterpart Klaus Kinkel next month. The ministry said Levy and Kinkel would discuss the Middle East process and German-Israeli relations at their meeting on September 9. Levy's visit would be the first by an Israeli cabinet minister since Netanyahu's conservative government took power in une this year, the ministry said. Before Levy's arrival in Bonn, German Defence Minister Volker Ruehe will visit Israel from September 2 to 4, the defence ministry said. Ruehe planned to meet his Israeli counterpart Yitzhak Mordechai and Israeli President Ezer Weizman, the ministry said. He was also expected to meet Prime Minister Netanyahu and opposition leader Shimon Peres for talks. 6127 !E21 !E211 !ECAT !G15 !G154 !GCAT Prime Minister Alain Juppe said on Friday France would meet its goal of cutting public deficits to four percent of gross domestic product (GDP) in 1996 and three percent in 1997 in preparation for European monetary union. He also said the 1997 budget, to be presented in about the next two weeks, would contain at least 20 billion francs ($3.95 billion) in tax cuts and that his goal for limiting healthcare spending could be achieved if current trends persisted. "We now know that we will hold to the target of three percent," Juppe told reporters. He also said rising tax receipts would allow France to get its deficits to four percent of GDP this year. "Fiscal receipts of the last few months are on the rise which leads one to think that we will meet our target of four percent in 1996," he added. Juppe said he did not expect any revision of the Maastricht treaty criteria on monetary union -- one of which is the target of getting deficits down to three percent of GDP. On the budget, he said there would be "at least 20 billion francs in reduction in taxes" in 1997 and added that he would present his tax reform plans around September 10. "It is all wrapped up, the budget, the social security financing law and fiscal reform," he told reporters. He also rejected as erroneous the comments from former finance minister Alain Madelin that France was in a period of deflation. "It is not pessimism, it is not depression, it is not recession," he said. Juppe said healthcare spending fell 0.3 percent in July and that the target of keeping the spending increase to 2.1 percent in 1996 could be met if this trend continued. In June, healthcare spending fell 0.1 percent from the month before to 37.67 billion francs, according to figures released at end-July by the Caisse Nationale d'Assurance Maladie (SNAM), the national healthcare spending fund. ($1=5.063 French Franc) 6128 !GCAT !GPOL !GVIO Prime Minister Alain Juppe pledged on Friday to stick to a new-found hard line against Corsican separatist guerrillas after a spate of bombings on the French Mediterranean island. "Nationalists are challenging the state at the moment. Well, the state won't let itself be intimidated," he told reporters. Six people were being held in custody in Corsica, where more than 20 bombs have gone off since mid-August, after a series of police raids in the past 24 hours. Juppe said he had "the firm intention of continuing on this path" and rejected criticisms that Paris had previously gone easy on guerrillas in hopes of secretly negotiating an end to their 20-year drive for more autonomy. A bomb exploded overnight at a villa owned by the daughter of French Veterans Minister Pierre Pasquini in the tiny southern Corsican village of Zigliara. No one was in the villa at the time and no one was injured, police said. Praising the police round-up, Juppe said: "Several of the main culprits behind bomb attacks committed since August 14 in Corsica, notably in the Ajaccio region, have been identified and will be taken before a judge." Eight suspects were taken into custody, but two of them were later released. Police searched the homes of those detained and seized arms including a sub-machine gun, a rifle with telescopic sights, pistols, ammunition, masks and detonator fuses. The detentions marked the first concrete action by police on Corsica since August 14, when nationalist militants called off a shaky seven-month truce. Juppe denied widespread reports that the government had held secret negotiations, now broken off, with the outlawed Corsican National Liberation Front (FLNC). Juppe, who is due to meet democratically-elected Corsicans on September 4, said the government was willing to hold talks with "all those who play the game of democracy". Justice Minister Jacques Toubon defended the goverment from criticism that it seemed powerless to halt the guerrillas. "You cannot completely turn around in just a few months a policy that has been adrift for 20 years," he told RTL radio. The prolonged low-level separatist-inspired violence, directed mainly against government targets, has this year badly damaged tourism, Corsica's main industry. 6129 !GCAT !GCRIM !GPOL Police searching for the bodies of missing girls in Belgium's child sex scandal found "hot spots" on Friday in two houses owned by the chief suspect, convicted paedophile rapist Marc Dutroux. A senior police detective arrested last Sunday in connection with the investigations was formally charged on Friday. The Belgian cabinet, in its first meeting since the summer break, agreed on tougher controls on the early release from jail of sex offenders. Dutroux, an unemployed electrician who owns six houses, was released 10 years early in 1992 after serving only three years of a 13-year sentence for raping five children. Gendarmerie spokesman Major Jean-Marie Boudin told reporters in the Charleroi suburb of Jumet that investigators using British radar-imaging equipment had found two "hot spots" in one house and one in another. Both houses are owned by father of three Dutroux, the key suspect in the case of paedophile abduction, porn and death that has horrified Europe. "Now we are using only the British apparatus in the cellar of the Jumet house," Boudin told reporters. "Up to now this apparatus has indicated two places of interest in the cellar." He added that the equipment had also found an "anomaly" in a house in the Charleroi suburb of Marcinelle. The British radar-imaging equipment is triggered by cavities underground. In Britain's "House of Horrors" case it was set off by underground holes which were found to contain bodies. On Friday evening exhausted police suspended their searches until Monday. In two weeks of hunting police have discovered the bodies of eight-year-olds Julie Lejeune and Melissa Russo in the garden of another of Dutroux's houses in Sars-La-Buissiere near Charleroi. They have rescued two other sexually abused girls -- Laetitia Delhez and Sabine Dardenne -- from a dungeon in the Marcinelle house and are searching for at least two others -- An Marchal and Eefje Lambrecks -- whom Dutroux admits kidnapping. The Jumet house was formerly occupied by Frenchman Bernard Weinstein, an accomplice who Dutroux admits murdering. His body was found next to those of Julie and Melissa. South of Charleroi in the town of Neufchateau, the nerve centre of the investigations, magistrates confirmed the charges of vehicle theft, insurance fraud and forgery against chief police detective Georges Zicot. Charges were also confirmed against two other men arrested with Zicot on Sunday in connection with the car theft ring uncovered by police investigating Dutroux' paedophile sex gang. A fourth man, Pierre Rochow, was released. Dutroux has been linked to organised vehicle theft and police are investigating the child sex and theft ring together. Belgian radio said police would travel to Bratislava and Prague to search for missing Belgian children. Dutroux has been named in Bratislava as a suspect in the murder of a young Slovak woman. Interpol's Slovak office has said he was also believed to have planned the kidnapping of at least one other Slovak woman. A spokesman for the Belgian gendarmerie's special disappearances squad said they were also likely to contact colleagues in Austria investigating what seemed to be a "child-for-hire" network spread across central Europe. Dutroux has said Julie and Melissa, who he admits paying Weinstein and associate Michel Lelievre 40,000 francs ($1,300) to abduct in June 1995, starved to death early this year while he was in jail for car theft. Belgian newspapers said Dutroux's second wife Michelle Martin -- also under arrest -- had admitted that she failed to feed the children out of fear of facing them in their cell. Nine people are now under arrest in the affair including Martin who has been charged as an accomplice. Dutroux and Lelievre are charged with abduction and illegal imprisonment. 6130 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Portuguese international and mainline trains came to a standstill on Friday as drivers began a week-long strike, a spokesman for Portuguese railways said. "We're trying to keep suburban services running but not with the usual frequency," he said. Portuguese railways -- Caminhos de Ferros Portugueses (CP) -- was using buses to take international passengers to the Spanish border where they could continue their journey by train. But the buses ran only from Lisbon and were of little help to passengers seeking to return home from the southern beaches of the Algarve. The train drivers' union is demanding better working conditions. It also accuses the state railways of not honouring an accord that put an end to a series of strikes in 1994. 6131 !GCAT !GDIS Searchers began a perilous task on Friday to recover bodies from a Russian airliner that crashed into a mountain on the Arctic island of Spitzbergen, killing all 141 people aboard. Police and an accident inquiry team went by helicopter to the inaccessible crash site on this remote Norwegian island and officials said mountain climbers might even be called in. The victims were mainly Ukrainian and Russian coalminers and their families. "The first thing is that the dead will be counted and tagged. Then the victims will be bagged, sent by helicopter to Longyear and afterwards flown to Tromsoe (in mainland Norway) for autopsy," said police coordinator Ivar Follestad. Norwegian police also began interviewing residents of the close-knit communities to seek witnesses who may have seen or heard the blue, brown and white Tupolev Tu-154 jet plough into a mountain on Thursday as it prepared to land. Most of the three-engined plane, smashed and broken, is stranded on a mountaintop some seven km (four miles) east of Longyear. The tail section broke off and slid down the steep mountainside, scarring the surface and blackening the snow. The windblown, chilly streets of this tiny Arctic town were all but deserted and flags flew at half-mast. "It's a sight I will never forget. I will remember it for the rest of my life," said Stig Onarheim, one of a handful of rescuers who raced to the scene of the crash in a helicopter on Thursday, hoping in vain to find survivors. "Imagine a big plane with a lot of luggage and people on board. Think of all that mixed together, with twisted, wrecked parts on the slope," Onarheim, 29, told Reuters. The crash site is inaccessible by land and there is danger from avalanches and polar bears, rescue officials said. Local government officials and police were guarding the site around the clock to keep animals away and a small hut had been erected to house accident investigators. But officials said it could days or weeks to bring all the bodies down from the mountain. Police said mountain climbers could be needed to reach the tail section of the plane, which slid down the steep mountainside after the crash. All 129 passengers and 12 crew were killed. The Tupolev Tu-154 was bringing miners and some of their families, 76 of them from Ukraine, to work in a Russian open-cast mine. Spitzbergen is governed by Norway but Russia has rights of access under an international treaty from the 1920s. The cause of the crash remains a mystery. Police and local officials declined to speculate at a news conference on Friday whether the plane flew off course or was coming in too low. Russian emergency service officials arrived on an identical plane to the one that crashed. Some 91 miners, due to be relieved by the miners who died, were due to fly back later. Investigators are hoping to recover the plane's flight data recorders from the crash site. Western aviation experts have raised questions about the safety of Russian airline operations following the breakup of the Soviet Union in 1991. But the pilot was experienced and did not report any trouble before the plane crashed. Yevgeny Buzny, an official of the Russian mining company which chartered the plane, said there were seven children and 4O women on the plane. The miners were on their way to start work in the Russian towns of Barentsburg and Pyramiden. Harsh, remote conditions mean that few other than miners from the former Soviet Union, pressed by job losses and falling wages at home, would brave Spitzbergen. Fewer than 3,000 people live on the island which has one of the world's harshest climates and lies some 500 miles (800 km) off the northern tip of Norway. Arktikugol (Arctic Coal), the Russian firm that works the Barentsburg and Pyramiden open-cast pits on the island, sends its 2,000 workers there on contracts of up to three years at a stretch. Stig Kristiansen, a shopowner in Longyear, said some of those waiting to leave had come into his shop just before Thursday's accident. "They were smiling," he told Norwegian television. "Then, half an hour later, they were crushed." 6132 !C42 !CCAT !E41 !ECAT !GCAT !GJOB German builders on Friday scrapped wage contracts designed to lift east German workers' pay closer to western levels -- an unprecedented move blamed on eastern firms' inability to fund the agreements. Industry association Hauptverband der Deutschen Bauindustrie said the action was a response to an emergency situation after eastern firms threatened to pull out of existing wage agreements in droves. Association Vice-President Wilhelm Kuechler told a news conference many eastern firms were already undercutting the agreed wage levels: "We see this as the only chance to ... even out the competitive situation." The two now void contracts for east Germany were to give workers a 1.85 percent pay rise on September 1 and lift their salaries to 95 percent of west German workers' wage levels from the current 92 percent ratio on October 1. Kuechler said firms wanted to freeze eastern wages at current levels for the coming year and urged the IG Bau building union to start talks on a new agreement as soon as possible. However IG Bau's Berlin-Brandenburg branch declared the employers' action illegal and threatened strike action. Branch union leader Klaus Pankau warned that the cancellation of the wage agreement would lead to a total break-up of east German building associations. That would leave east Germany with "American conditions: an isolated battle at every building site." In Germany, where unions are extremely powerful, cancelling a wage contract is a very rare occurence. Kuechler said ten percent of east German building firms had already pulled out of regional employers' associations to avoid paying agreed wages and more had threatened to follow suit. Frenetic building activity in the former communist east Germany has partly buffered the German construction industry from recession since reunification, but the boom has ended as public coffers run dry and low-cost foreign rivals step up the price war. A recent report by the respected Ifo economic institute said the east German building sector would slip into decline with the western construction industry in 1997, amid a glut of excess housing and shopping property. Employers also cancelled a smaller contract for west German building workers, describing them as too expensive an agreement to give workers a performance related bonus at the end of the year -- often as high as one and a half times a monthly wage. The action will delay the process of harmonising wages east and west. The second void east German contract -- to lift wages to 95 percent of western levels -- was to be the first step in that process. Building workers won their deal for a 1.85 percent wage rise east and west -- well below original demands for a five percent rise -- in April after weeks of tortuous negotiations. The agreement narrowly avoided widespread strike action. 6133 !GCAT Two teenage girls have been reported missing in Belgium after failing to return home from a shopping trip in the town of Liege, Belga news agency said early on Saturday. The agency said the girls, Rachel Legeard, 18, and Severine Potty, 19, had boarded a bus home on Thursday afternoon but apparently got off before their stop. There has been no word of them since, it said. Gendarmes in Liege posted the two as missing late on Friday and have set up a coordination centre to work on the case, Belga said. Belgium has been shaken by the uncovering of a paedophile ring linked to a number of missing children, two of whom were found dead. 6134 !GCAT !GDIP !GVIO The U.N. Security Council on Friday voted to keep its handful of military observers in Liberia for another three months but warned the country's warlords its support was not indefinite. In a resolution adopted unanimously, the council agreed with a proposal from Secretary-General Boutros Boutros-Ghali to send 24 more observers immediately. The United Nations force, known as UNOMUL, was reduced from 93 to 10 military officers because of heavy fighting and looting in April and May. Boutros-Ghali is also considering fielding experts on disarmament, elections, human rights and administration, not exceeding the current authorised strength of 160 personnel. The resolution warns that continued international support for Liberia was "contingent on the Liberian factions' demonstrating their commitment to resolve their differences peacefully." The council expressed support for the 8,500 West African peacekeepers who are helping to implement the latest peace accord signed in Nigeria on Aug. 17, which sets a timetable for disarmament by the end of January and elections on May 30. West African heads of state have threatened sanctions against individual faction leaders to ensure compliance. Noting that Liberia's recent history is littered with broken peace agreements, U.S. envoy Karl Inderfurth said the warlords needed to realise that the world was concerned with their deeds, not their words. "It is only on the basis of honest implementation of the new timetable (for peace accords) that the United States is able to support the secretary-general's call for increased deployments," he said. The council also condemned the faction leaders for recruiting children as fighters and the looting of U.N. property. Among the items stolen were 489 vehicles, worth $8.3 million, of which only 11 have been returned. More than 150,000 people have been killed in the anarchy that broke out after 1989 and U.N. officials believe the warlords are kept in business by selling the country's timber, gems and mineral resources to foreign traders. 6135 !C12 !CCAT !GCAT !GCRIM !GDIS A French magistrate has opened a preliminary murder probe into the crash of an American airliner off New York last month after families of French victims complained about a lack of information, a lawyer said on Friday. Lawyer Gilles-Jean Portejoie said the French inquiry, headed by Paris magistrate Chantal Perdrix, "should not be interpreted as an act of distrust in American investigators." All 230 passengers and crew aboard the Paris-bound TWA airliner, including 45 French citizens, were killed when it exploded over the Atlantic just after takeoff from New York. Portejoie told Reuters that the French legal action was aimed at "contributing to finding the truth and to casting a different light for American justice." It would also help to ensure that families of French victims were better informed about the U.S. investigation into the crash and about their rights. Portejoie and a colleague, Paul Lombard, represent two French families who have complained bitterly that their only information about the U.S. inquiry has come from conflicting reports in the media. The mother of one of the victims has said that she has been told nothing about any autopsy on her son. In New York, officials said investigators had found more microscopic traces of explosives on debris from the airliner but they could not conclude that a bomb or missile caused the crash. The National Transportation Safety Board and the Federal Bureau of Investigation said in a joint statement that further evidence of a bomb was needed to determine if the plane was blown up by an explosive device, 6136 !GCAT !GDEF !GDIP India on Friday said it would not block a U.N. General Assembly debate on a nuclear weapons test ban treaty but put the United Nations on notice it would insist on a two-thirds majority vote for any action. India's U.N. ambassador Prakash Shah also told a news conference he would argue that taking a vote was illegal because the Geneva-based Conference on Disarmament had not approved the treaty, as the assembly had asked last year. Australia has called a meeting of the 185-member General Assembly for Sept. 9 to have it adopt the draft treaty and open it for signature by individual states. After nearly three years of negotiations for a landmark Comprehensive Test Ban Treaty, India this month refused to endorse the text by the 61-nation Conference on Disarmament because nuclear weapons states made no move to give up their arsenals. That kept the entire treaty in limbo since decisions at the conference have to be unanimous. There is a dispute about whether the General Assembly needs a simple majority or a two-thirds vote, but diplomats in favour of the treaty said they expected to get the two-thirds majority in any case. India, however, is counting on developing nations, only 29 of which were represented in Geneva, to support its position. The treaty cannot go into force until 44 nations with nuclear capabilities sign and ratify it. But states like Australia believe the commitment to stop testing would begin as soon as the treaty was open for signature and India would come under pressure to sign it. "We are now faced with attempts to circumvent the decision of the Conference on Disarmament in Geneva by a procedural manoeuvre," Shah told reporters. "If we all believe that the treaty is such an important issue, Article 18 should apply," he said, referring to a U.N. Charter article that important questions need a two-thirds majority of members voting. Shah said India did not approve the treaty because it did not lead to elimination of nuclear weapons, did not cover all kinds of nuclear testing and allowed the five acknowledged nuclear weapons powers to continue developing and improving the quality of their atomic arms. He called the draft a "flawed document" and said it failed to meet the mandate given by the General Assembly as well as the Non-Aligned Movement and therefore could not be considered a first step towards nuclear disarmament. Shah also vigorously denied that India opposed the treaty because it did not want to stop its nuclear weapons programme, saying the nuclear powers would not give the slimmest commitment to work towards eliminating these arms. Australia's U.N. ambassador, Richard Butler, earlier said he agreed with many of the criticisms India raised because "it is right to want progress in nuclear disarmament." But he said since 1945 there had been 530 nuclear tests, many in the atmosphere, so states could develop ever more sophisticated arms. Therefore commitments to stop testing were tantamount to a moratorium on developing new and different nuclear bombs. 6137 !GCAT !GCRIM Austrian police arrested two men on Friday for suspected sexual abuse of children aged between four and 15 living in a shelter for refugees in the city of Linz, police said. The two Austrians, one aged 59 and the other 37, lived near the shelter for refugee children and had allegedly enticed their victims to their homes with offers of sweets and money during months of abuse, police said. "Two men have been placed under arrest under suspicion of sexually abusing children from the refugee shelter," said a police spokesman in Linz, 200 km (120 miles) west of Vienna. Police declined to reveal the nationalities of the children at the home, though the vast majority of refugees currently living in Austria come from the former Yugoslavia. Pyschologists counselling the boys and girls reported that the children had said the men had done evil things to them, the Austrian news agency APA reported. The arrests were made just two days after Vienna police detained three men on charges of child sex abuse and producing child pornography in a suspected "child-for-hire" network spread across central Europe. Justice Minister Nikolaus Michalek said he was shocked by the arrests and said the courts would deal harshly with those convicted of child abuse crimes. Michalek said Austrians would be morally culpable if they knew abuse was being perpetrated and failed to report it. "It is important that people do not try to ignore what is going on. Whoever does that is at least morally, possibly criminally, culpable," he told the Salzburger Nachrichten daily in an interview published in its Saturday edition. News of yet more instances of child abuse in Austria will heighten the revulsion expressed in local media over the child abuse and murder of young girls in Belgium. Belgian Marc Dutroux, alleged to be the dominant person in a paedophile pornography ring, has been named by police in the Slovak capital, Bratislava, as a suspect in the murder of one Slovak woman and the kidnapping of another. Bratislava is an hour's drive away from Vienna. Austrian police declined to comment on whether there was a connection between the Belgian case and the Vienna arrests. Two of the men detained in Vienna are Austrian citizens, one born in Slovakia and the other in the Czech Republic. The third is Polish, police said. All three denied the charges on Friday. Vice squad officers seized box-loads of videos and other pornographic material from the home of one of the suspects at the start of a major investigation into the procuring of children, some as young as seven, to paedophiles in the region. Police sources said the hunt for others connected to the ring could involve neighbouring Slovakia, the Czech Republic and Germany. The Austrian current affairs magazine News launched a major investigative report into the Vienna-based network which provided clients in the Austrian capital with a choice of 70 girls, largely from Slovakia, aged between seven and 13. News presented its evidence to police this week before the arrests were made. 6138 !C42 !CCAT !E41 !ECAT !GCAT !GDIP !GJOB France on Friday expelled another African man seized in a police raid on a Paris church as about 100 Air France workers denounced "charters of shame" used to fly illegal immigrants home. A Guinean man, detained in a round-up in the Saint-Bernard church a week ago, was deported on a scheduled Air France flight to Conakry after his appeals failed, a spokesman for Air France's pro-Socialist CFDT union said. He was apparently the eighth African deported from among 210 people evicted from the church after a 50-day occupation aimed at securing residence permits, unions said. Most of the others have been released after a brief stay in detention. About 100 people from the CFDT and the Communist-led CGT unions marched outside Air France headquarters at Charles de Gaulle airport north of Paris against the use of civilian jets and staff in deporting illegal immigrants. "We must obtain a formal commitment from (Air France chairman) Christian Blanc that no plane, no personnel be used to transform our air companies into charters of shame," CFDT spokesman Francois Cabrera said. He said civilians should not be police accomplices. Twenty-three out of 25 charters flying illegal immigrants home since Prime Minister Alain Juppe's government took office in May 1995 have been civilian jets. The other two were military jets. Separately, Juppe confirmed the conservative government was preparing to submit a draft bill to parliament to tighten laws on illegal workers as part of a crackdown on immigration. "Legislation is insufficient in several areas, notably in those concerning illegal work," Juppe told reporters. 6139 !GCAT !GCRIM !GODD Italian police said on Friday they had cautioned three men who stripped off in a launderette in the northern city of Bologna to wait -- one totally naked -- while their clothes were being washed. The owner of the launderette, who had put up a sign after an earlier incident asking customers not to strip, called the police when the two Algerians and one North African-born Frenchman, all in their 20s, undressed. One took off all his clothes, another kept on just his shoes and the third his shoes and underwear. A police spokesman said the clothes were hastily dried and the men taken to the police station and cautioned for acts against public decency before being released. 6140 !GCAT !GVIO The president of the International Committee of the Red Cross (ICRC) on Friday defended the humanitarian agency's role during World War Two and said new allegations of Nazi infiltration were a matter for historians. Cornelio Sommaruga also said he did not expect the Geneva-based institution to be harmed by the charges in U.S. documents, adding that it was judged by its current work in many conflicts worldwide. In an interview with Reuters, Sommaruga said he was "very much surprised" by news reports on the previously secret U.S. intelligence documents alleging the agency was used and "probably controlled" at its highest levels by German intelligence during the war. Documents of the Office of Strategic Services (OSS), the wartime forerunner of the Central Intelligence Agency, allege that ICRC employees worked as agents conveying military information to Berlin. They also allege Red Cross pouches were used to ferry German assets into Switzerland and the group itself was used to smuggle German agents across European borders. Sommaruga said: "We were very much surprised by the articles that have been published...Certainly, if there were errors, it is good that they are clarified. "I think this is really more a question for historians. But it is important that the ICRC contributes to getting clarity, to shed as much light as possible on what happened 50 years ago." But he said he wished to defend the staff of the ICRC at that time who were committed to helping the victims of war. "Let us not forget that the ICRC visited millions of prisoners of war. Let us not forget that 11,000 visits were made to camps. Let us not forget that 143 million messages were transmitted between prisoners of war and their families." Sommaruga said the agency has opened its own archives to the public from the wartime period and that it had asked an independent historian to study issues related to "certain delegates" (staff) during World War Two. An ICRC spokesman said on Thursday that the agency had been informed earlier about an alleged pro-Nazi employee in Turkey and had asked an independent historian to investigate. The employee was accused of using the ICRC pouch to transfer funds. "He did in fact misuse the ICRC diplomatic pouch to transfer funds, but we don't know what these funds were, whether they were Jewish funds," the spokesman, Kim Gordon-Bates, said. Sommaruga said that the mainly-Swiss ICRC enjoyed "good contacts" with the U.S. authorities and New York Republican Senator Alfonse D'Amato, who heads a Senate Banking Committee investigating missing Jewish funds. Last year, the ICRC, which coordinates relief to civilians in wartime and enforces Geneva Conventions governing treatment of prisoners and civilians, acknowledged for the first time its "moral failure" during the war. The acknowledgement, made by Sommaruga, referred to the ICRC's failure to denounce atrocities against Jews and other minorities in Hitler's concentration camps. The OSS documents, marked "Washington office items not previously released", were recently found in the U.S. National Archives by World Jewish Congress researchers trying to trace assets of Holocaust victims. Copies of several documents were made available to Reuters. 6141 !E21 !E211 !ECAT !GCAT !GPOL Talks on the Belgian 1997 budget are moving ahead, Belgian Budget Minister Herman Van Rompuy said on Friday. Van Rompuy told Reuters after a government news conference that key ministers would meet again on Saturday, following exploratory talks earlier this week. "Work is progressing well," he said. He added that there were no concrete estimates yet about the size of the austerity effort needed or what kind of measures would be taken. Analysts have estimated that Prime Minister Jean-Luc Dehaene's centre-left government will have to come up with at least 80 billion francs ($2.62 billion) in austerity measures if it is to cut the budget deficit enought to meet the economic conditions for Europan economic and monetary union (EMU). Belgian media have speculated that higher taxes on petrol, alcohol and tobacco and the privatisation of part or all of another three banks will be among key measures in the 1997 budget. Other possibilities are a ceiling on top pensions, a reduction of family allowances and lower benefits for the long-term unemployed. The budget is due to be presented to parliament early in October. 6142 !GCAT !GCRIM !GVIO German prosecutors hoping to convict former East Berlin spymaster Markus Wolf of Cold War skulduggery after failing with treason charges said on Friday they had added a third kidnapping to their case against him. The Federal Prosecutors Office said it had charged Wolf with playing a key role in the brutal 1962 kidnapping of a Stasi (Ministry for State Security) officer who fled to the West. Prosecutors failed to get him convicted on charges of treason and espionage three years ago but in March came up with new charges of kidnapping in their second attempt to nail East Berlin's legendary spy chief since German unification in 1990. "There is no doubt these charges are enough to bring Wolf to trial in Duesseldorf again," said Rolf Hannich, a spokesman for federal prosecutors speaking by telephone from Karlsruhe. "But there are very complicated legal matters at issue and it must be decided whether he is to be judged according to former East German or West German law for the new charges," Hannich said, adding that a trial date had not yet been set. Germany's highest court threw out a six-year jail sentence against Wolf, saying he could not be convicted for spying against the Federal Republic of Germany because he had not violated the laws of East Germany -- his country at the time. It ruled last year that the fact that he had become the citizen of his former arch-enemy did not mean he could be charged according to the law of his new homeland for things he did as an East German citizen. The supreme court, however, left prosecutors the option of charging Wolf, 73, who now earns a living as an author and frequent chat show guest, with other offences which were criminal in both halves of divided Germany. Wolf, who ran Eastern Europe's most efficient Cold War espionage machine, is said to have inspired John le Carre's fictional character Karla, the Soviet intelligence chief against whom British spymaster George Smiley fought a battle of wits. Le Carre has dismissed the story as "nonsense" although any of the three kidnapping operations prosecutors say he supervised might qualify as the plot for a classic Cold War spy-thriller. Prosecutors say that by piecing together witness statements and fragments of documents they have enough evidence to show that Wolf was behind the abduction of former Stasi officer Walter Thraene from Austria back to communist East Germany. Thraene and his girlfriend were lured to a hideout and beaten unconscious before being spirited back to East Berlin, Hannich said. Thraene's girlfriend could not be identified, he said. Thraene spent more than 10 years in prison in East Germany and his girlfriend more than three years. Prosecutors say Wolf issued the orders and directed the operation. To cover up his tracks, Wolf destroyed incriminating documents, Hannich said. Thraene had been demoted in 1962 because of his love affair, which at the time was regarded as being at odds with the Socialist morality in the ex-Soviet satellite state and the rules of working for an intelligence service. The couple fled to Austria a few months later. Prosecutors in March accused Wolf of approving the kidnapping of Christa Trapp, a German translator at the U.S. High Commission in West Berlin, in 1955 to persuade her to work for them in return for pay. They also accused his ministry of forcing Georg Angerer, an East German typesetter who worked in Nazi-occupied Norway in World War Two as interpreter for the Gestapo secret police, to sign defamatory statements in 1959 about Willy Brandt. Prosecutors say Angerer was arrested in 1959 on fictional manslaughter charges and, after weeks of detention, gave in to pressure to sign the statements about the future chancellor, who spent some time in Norway during the war. 6143 !GCAT !GCRIM Belgian authorities toughened rules for sex offenders against children on Friday and Norway set up a cybercop to patrol the Internet for child pornography. Belgian police, searching for the bodies of missing girls in a sensational child abuse and killing case, found "hot spots" in two houses owned by chief suspect Marc Dutroux. At an international conference in Stockholm, taking place this week as the Belgian case makes headlines around the world, experts said that Southeast Asia remained the major destination for child sex tourists with young girls sold for $300 a week in Cambodia. Belgian Prime Minister Jean-Luc Dehaene, in his first public statement on the case that has horrified Europe, said everything possible would be done to ensure it would never happen again. "Children represent our future. They deserve a happy childhood. We must protect and guarantee their rights. Everything must be put in place so that this drama is never repeated," he said. Dutroux, a convicted child rapist, was arrested and charged two weeks ago with abduction and illegal imprisonment of children. His arrest and the arrest of up to nine others has triggered a Europe-wide search for a paedophile ring. Belgians were outraged to find that Dutroux was released from jail on a majority opinion 10 years early - despite advice to the contrary from his own mother. The Belgian cabinet on Friday approved tougher rules on the early release of convicted child sex offenders. At the World Congress Against Commercial Sexual Exploitation of Children, which has attracted over 1,000 delegates to Stockholm from 130 countries, campaigners outlined measures to crack down on paedophiles' use of the Internet. Norway's ombudsman for children, Trond Waage, said to date there was very little action that could be taken to stop the distribution of child pornography on the Internet. But he said the establishment last week of a international body to monitor child pornography on the net, a task taken on by the Norwegian branch of Save the Children, was firm action against paedophiles using the net. "This is a kind of a cybercop," Waage told reporters. "We need some visible cops on the net. If you undertake these kinds of criminal activities someone will monitor you." Save the Children will try to monitor any child pornography on the Internet and is encouraging other net surfers to pass on information that will be handed to the police. In Finland an Internet specialist said on Friday he was closing his remailer -- an anonymous forwarding system -- after rejecting allegations it was used as a conduit for child porn. Johan Helsingius, whose remailer is one of the largest in the world with over half a million users, said in a statement he was closing down the system because the legal issues governing the Internet in Finland are unclear. "The legal protection of users needs to be clarified. At the moment the privacy of Internet messages is judicially unclear," said Helsingius. "I have also personally been a target because of the remailer for three years," he said on Friday. "Unjustified accusations affect both my job and my private life." The Stockholm conference, which ends on Saturday, has heard that child prostitution has started to emerge in eastern Europe as the tourist industry develops and overseas money pours in. But Ron O'Grady, head of lobby group End Child Prostitution in Asian Tourism (ECPAT), said Southeast Asia remained the world's worst hit area with more countries getting involved. "Paedophiles and child sex tourists are definitely looking for new areas as laws get tighter in these countries," O'Grady told Reuters outside the Stockholm conference. "As Vietnam and Cambodia develop their tourism industry along the lines of Thailand they are being affected by these problems more and more." 6144 !C13 !C22 !CCAT !G15 !G152 !G153 !GCAT A European Commission decision on whether to approve the market release of a gene-modified maize strain remains some weeks away, a Commission spokesman told Reuters on Friday. Chairmen of the scientific committees on foodstuffs, pesticides and animal nutrition are to meet next Wednesday to coordinate their examination of additional scientific evidence relating to the Commission's draft decision on the placing on the market of a genetically modified maize, COM(96)206. The debate centres on a proposal, initially put forward by France, to authorise the corn marketed by Ciba-Geigy AG. "It's a sort of coordination meeting. Then there will be separate meetings of the committees later in the week," the spokesman said, adding that the three would then report their findings to Environment Commissioner Ritt Bjerregaard. Bjerregaard will then have to report to the full Commission on what to do next. "The Commission can take a final decision if it sticks to its proposal but if the Commission finds that the proposal should be modified then it has to go back to the Council of Ministers," added the spokesman, who said this was the more likely outcome. "I think the situation has changed quite a bit in the meantime since our first proposal," he said. Environment ministers stalled a decision on the dossier at their June 24 Council in Luxembourg, an outcome which according to the committee procedure under which the dossier was dealt with, should have left the Commission to adopt its proposal automatically after the expiry of the end-of-August deadline. Commission legal advice has indicated that because additional scientific evidence relating to the proposal has been presented, that deadline is no longer valid. Article 21 of Directive 90/220/EEC, on the deliberate release of genetically modified organisms, provides for a Commission-chaired committee to deliver an opinion on the proposal within a time limit determined by the chairman. The language in 90/220/EEC does not make it explicitly clear which comitology procedure governs decisions, although it is generally thought to be procedure IIIa as defined by Council Decision 87/373/EEC. Bjerregaard said in her July 26 statement IP/96/708 that "widespread political and public concerns" raised in relation to the proposal had prompted her decision to seek further advice. 6145 !C13 !CCAT !G15 !G152 !GCAT !GVIO Leather-clad bikers roar into Brussels on Saturday to protest against planned new European Union laws which they say pose a threat to their motorcycle lifestyle. "We are absolutely fed up," said Simon Milward, general secretary of the Federation of European Motorcyclists (FEM), one of the organisors of the demonstration. The bikers oppose draft directive COM(93)449 and other rules they see as restrictive. "It probably comes because there are so many bureaucrats who don't like bikes, who have a stereotype image of bikers as portrayed on TV and so forth, which is wrong," Milward told Reuters. He said organisers hoped roughly 10,000 motorcyclists from the Union's 15 member states are expected to ride through Brussels and pass by EU buildings. Three members of the European Parliament will join the demonstration, Milward said, reflecting that the EU's only directly elected body often tends to side with the bikers. Bikers are worried about several proposed EU rules, including one on limiting engine noise and one which would make it illegal to change manufacturers' specifications, outlawing the painstaking customisation favoured by bike enthusiasts. A final decision on these rules are expected in October following a conciliation procedure between the Parliament and the Council of Ministers. In June, the European Parliament overwhelmingly backed a report by British Socialist Roger Barton, due to take part in the demonstration on Saturday, which demanded substantial changes to the Council's common position on a proposal for new EU-wide standards for two- and three-wheeled vehicles. Council wants to limit the sound level on new large bikes to 80 decibels. MEPs, by contrast, believe an 82 decibel limit is good enough and the real noise problem lies with the sale of bikes with noisy straight-through exhaust systems. "We want to support the parliament in their position," Milward said. Milward said the planned new rules would sharply increase home-maintenance costs, increase pollution and make motorcycling less attractive. Another aim of the demonstration is to draw attention to the fact that motorcycles can reduce traffic congestion, a growing problem around Europe. "We feel that motorcycles are a solution to congestion problems and we feel they should be encouraged rather than the other way around," he said. "The third main aim of the demo is to highlight the democratic deficit in the European legislation process," he said. 6146 !C18 !C183 !CCAT !E12 !ECAT !GCAT !GPOL Italy's hard left Communist Refoundation said it hoped to reach a compromise with the government over contested plans for the privatisation of telecoms holding Stet. Refoundation has previously been adamant in its rejection of Prime Minister Romano Prodi's plans to privatise Stet in February or March of 1997. But party leader Fausto Bertinotti told Epoca magazine, in an interview released ahead of Saturday's publication, that he hoped a deal might be struck over the golden share the government intends to hold in the privatised telecoms giant. "We're not going to issue any ultimatums, but we want to talk about this," Bertinotti was quoted as saying. "We will talk about the future of telecommunications in Italy. We will establish that if the Stet is privatised, the state will hold onto a golden share...which has a significant weight," he added. But he said the government had so far shown no willingness to talk about the situation. Prodi's centre-left Olive Tree coalition, which includes former communists, centrists and Greens, has a majority in the Senate (upper house) but relies on support from Refoundation party in the lower Chamber of Deputies. Industry Minister Pierluigi Bersani was quoted as saying on Thursday that the government would make cautious use of a golden share in Stet after the company is privatised. Prodi said in an interview on Thursday that if Refoundation refused to back the Stet sale, opposition parties might help pass the necessary legislation through parliament. Turning to the 1997 budget, Bertinotti told Epoca he did not want to get to the situation where there was a government crisis over the package. "That would be a defeat for Prodi, but also for the left and a defeat for us," he said. "The condition is that they will not touch pensions or cut the health service. If they do that then there will be no room for dialogue," he said. The government is due to unveil the 1997 budget by the end of September. Many analysts have called for a structural reform of both the welfare and pensions system. -- Rome newsroom +396 6782501 6147 !GCAT !GVIO Spanish authorities on Friday suspended two members of the paramilitary Civil Guard who were caught spying on a key witness in probes of a 1980s "dirty war" against Basque ETA rebels, state radio said. The two, who were caught by police as they filmed the witness with a video camera hidden inside a bag, have been taken off duty pending an investigation ordered by the civilian head of the Civil Guard, the radio added. The two men are based at Intxaurrondo, a Civil Guard base in the Basque Country where trial witnesses say some of the "dirty war" murders took place. They were caught in the Basque city of San Sebastian as they secretly filmed witness Pedro Migueliz while he was having lunch at a restaurant, the daily El Mundo reported on Friday. It said they had told police they were on holidays. The former commander of Intxaurrondo, General Enrique Rodriguez Galindo, is on trial for his alleged involvement in the kidnapping, torture and deaths of two presumed ETA rebels while in custody in 1983. The charges against him are based in part on testimony by Pedro Migueliz, the witness who was under vigilance by the two Civil Guard members. The Supreme Court is due to announce next Thursday whether it wants to question former prime minister Felipe Gonzalez about the 1983-87 campaign of bombings, kidnappings, torture and murder, which killed 27 people. ETA (Basque Homeland and Freedom) has killed nearly 800 people in a drive for independence begun in 1968. Gonzalez and his aides, who ruled Spain for 13 years until May, deny any involvement in the unlawful campaign against the rebels. 6148 !E12 !ECAT !G15 !G151 !G154 !GCAT !GDIP The government said on Friday it was conceivable that European Economic and Monetary Union (EMU) would top the agenda at Sunday's meeting in Bonn between Chancellor Helmut Kohl and French President Jacques Chirac. "I could imagine that the European currency will be at the top (of the agenda)," said deputy government spokesman Herbert Schmuelling in response to reporters' questions. The two leaders, whose countries are considered the driving engine of European unity, will meet in Bonn to discuss a broad range of topics including bilateral, European and international issues, Schmuelling told journalists. Schmuelling did not comment further on the meeting. But the leaders were expected to discuss EMU amid growing speculation that France may not be able to qualify for a single European currency. Against a backdrop of an economic slowdown and rising unemployment, Paris must make tough budget cuts to reduce its public deficits enough to meet the 1997 criteria for monetary union. Germany is also having its own problems meeting the criteria. A spokeswoman for the Bonn finance ministry, Barbara Eckrich, told journalists Bonn expected Germany would not meet the criteria for a single European currency this year. But that it would meet the criteria in 1997. 6149 !E12 !ECAT !G15 !G151 !G154 !GCAT Prime Minister Alain Juppe said on Friday that France would meet its target of reducing its public deficits to four percent of gross domestic product (GDP) in 1996 and three percent of GDP in 1997. "We now know that we will hold to the target of three percent," Juppe told reporters. He also said that rising tax receipts would allow France reduce its deficits to four percent of GDP this year. "Fiscal receipts of the last few months are on the rise which leads one to think that we will meet our target of four percent in 1996," he added. Juppe said he did not expect the Maastricht treaty criteria on European monetary union to be revised. He also rejected as false comments from former finance minister Alain Madelin that France was in a period of deflation. "It is not pessimism, it is not depression, it is not recession," he said. 6150 !E21 !E211 !ECAT !GCAT !GPOL Prime Minister Alain Juppe said on Friday that the 1997 budget will contain "at least" 20 billion francs in tax cuts. There will be "at least 20 billion francs in reduction in taxes" in 1997, Juppe said. He added that he would present his tax reform plans around September 10. "It is all wrapped up, the budget, the social security financing law and fiscal reform," he told reporters. Juppe promised to trim taxes from 1997. Newspaper reports had suggested 15 to 20 billion francs would be the size of the reduction, but this was the first time Juppe specified a figure for the cuts. Private economists have been sceptical about the government's ability to cut taxes while also holding 1997 central government spending at 1996 levels in real terms and reducing its public deficits to three percent of gross domestic product to qualify for a single European currency. The plan to freeze spending implies at least 60 billion francs in savings. The government says part of this will come from reductions in employment incentives and low-cost social housing subsidies as well as windfalls from lower interest payments on the national debt but a good portion has yet to be explained. 6151 !E21 !E211 !ECAT !GCAT !GHEA !GPOL Prime Minister Alain Juppe said on Friday French health spending fell 0.3 percent in July and that the target of keeping the spending increase to 2.1 percent in 1996 could be met if this trend continued. "Healthcare spending fell 0.3 percent in July. If the trend continues we will keep to our target of a 2.1 percent," Juppe told reporters at his office. In June, healthcare spending decreased by 0.1 percent from the previous month to 37.67 billion francs, according to figures released at end-July by the Caisse Nationale d'Assurance Maladie (SNAM), the national healthcare spending fund. The centre-right government aims to limit the increase in non-hospital spending to 2.1 percent in 1996 as part of its drive to curb public deficits in preparation for European monetary union. -- Paris Newsroom +33 1 4221 5452 6152 !C13 !C31 !C311 !CCAT !G15 !G153 !GCAT !M14 !M141 !MCAT The European Union changed its grain import duties on Friday after its end-of-month review, the European Commission said. The new rates are effective as of September 1. EFFECTIVE FROM SEPTEMBER 1 IN ECUS PER TONNE NEARBY ORIGIN (1) DISTANT ORIGIN (2) DATE OF CURRENT PREVIOUS CURRENT PVS CHANGE DURUM WHEAT 8.55 4.69 0.00 0.00 01SEP96 COM WHT HIGH QUAL 21.82 22.01 11.82 12.01 01SEP96 MEDIUM QUALITY 35.48 35.23 25.48 25.23 01SEP96 LOW QUALITY 48.04 48.79 38.04 38.79 01SEP96 BARLEY 68.38 66.99 58.38 56.99 01SEP96 RYE 68.38 66.99 58.38 56.99 01SEP96 SORGHUM 82.49 81.10 72.49 71.10 01SEP96 MAIZE 57.00 54.86 47.00 44.86 01SEP96 Exchange Kansas Mid Mid Minneapolis City Chicago Chicago America America Products percent protein and 12 percent humidity HRS2(14%) HRW2(11.5%) SRW2 YC3 HAD2 US barley2 (ECUS per tonne) Quotes 113.11 137.38 130.20 112.72 168.45 108.62 Gulf - 12.71 7.34 29.96 - - Great Lakes 22.07 - - - - - Gulf of Mexico-Rotterdam 9.17 Ecus per tonne Great Lakes-Rotterdam 17.75 Ecus per tonne (1) Nearby origin covers imports by land, river or sea from Mediterranean, Black Sea and Baltic ports. (2) Distant origin covers other ports. The import duty may be adjusted if during the two-week reference period the average import duty differs by five Ecus per tonne from the fixed duty. Importers may claim a two Ecus per tonne reduction for Atlantic and Suez canal shipments to British, Danish, Swedish, Finnish and to Spanish and Portuguese Atlantic ports. A three Ecus per tonne reduction can be claimed for imports into Med ports. Importers who show they have paid a quality premium can claim a 14 or eight Ecus reduction for shipments of high quality common wheat, malting barley and flint maize. 6153 !C42 !CCAT !E41 !ECAT !GCAT !GJOB !GPOL Algeria's government, trade unions and employers have reached a deal to double school grants, raise family allowances and reduce the working week, the Algerian news agency APS reported on Friday. It said the school grant would be raised to 800 dinars ($15.25) a month from 400 starting on September 1 and the family allowance to 600 dinars a month from 450 beginning on October 1. It was also agreed to reduce the working week to 40 hours from 44, the agency said. During a 22-hour meeting, delegates discussed lowering the retirement age, now 60, for people working in exhausting jobs and said the right to early retirement could be extended to all the public sector. The issue would be discussed further. ($=52.45 dinars) 6154 !E21 !E211 !ECAT !GCAT !GPOL Denmark's finance ministry on Friday lowered its estimates for the 1997 state budget and public sector deficits after finding an error in calculations for welfare and pension benefit payments. The ministry said in a statement the error meant it could reduce both deficit forecasts by about one billion crowns ($174.8 million), taking the estimated state budget deficit to 21.5 billion crowns, and the public sector shortfall to around 4.7 billion. Last Tuesday the ministry published a draft 1997 state budget projecting a budget deficit of 22.6 billion crowns ($3.93 billion) and a public sector shortfall of 5.8 billion crowns. These figures compare with an actual 1995 state budget deficit of 31.2 billion crowns and a public sector shortfall of 15.9 billion. The 1996 deficits are forecast at 31.0 billion and 15.3 billion crowns respectively. ($1=5.721 Danish Crown) 6155 !C13 !CCAT !G15 !G153 !GCAT !M14 !M141 !MCAT The European Union's beef management committee accepted a total of 23,530 tonnes of beef into intervention stores at mixed prices, an EU official said. This was against offers of 52,795 tonnes and 5,703 forequarters, the officials said. 6156 !GCAT !GCRIM German police searching for a missing 10-year-old schoolgirl said on Friday the prime suspects in the case may have been involved in running a child prostitution ring. Police suspect Nicole Nichterwitz's aunt and a male companion abducted the girl and took her to the Netherlands. She was last seen being collected by the pair from school in Velten near Berlin on Monday. Public prosecutors said they had found a list of children's names and ages at the couple's flat. The list was being studied for possible links to previous child kidnappings and prostitution, a prosecutors' spokesman told Reuters. 6157 !GCAT !GCRIM Dutch police said on Friday they had found missing German girl Nicole Nichterwitz alive on a campsite in the northern city of Groningen and had arrested her aunt and companion on charges of kidnapping. "We have found Nicole on a campsite in Groningen thanks to tipoffs from the Dutch public. We have also found and arrested her aunt and companion," said a spokeswoman of the Dutch criminal investigation service. Police could not yet tell whether the 10-year-old showed any signs of sexual abuse. "We don't know yet. It's too early to tell," she said. The girl was abducted from her school in Velten near Berlin on Monday. German police suspected her aunt, 47, and companion, 28, were involved in running a child prostitution ring. Public prosecutors said they had found a list of children's names and ages at the couple's flat. The list was being studied for possible links to previous child kidnappings and prostitution, a prosecutors' spokesman said. The couple would probably be extradited to Germany which has requested their deportation, the Dutch police spokeswoman said. Descriptions of the couple's car released to Dutch media led to their arrest, she added. 6158 !GCAT Following are some of the main stories in Friday's Pakistani newspapers: DAWN - The United Nations' Security Council has formally amended its July 30 decision under which it had dropped 50 items, including the Kashmir and Palestine issues, from its agenda. - The Security Council's decision to retain Kashmir on its agenda amounts to a vindication of Pakistan's principled position on the issue, Foreign Minister Assef Ahmad Ali said. - The second consignment of U.S. military equipment worth $20 million for Pakistan army has arrived at Philadelphia port to be put on board a Pakistan Navy ship, M.V. Malakand, in the first week of September. - British Foreign Secretary Malcolm Rifkind argued in New Delhi that India should invite international observers to monitor state assembly elections in Indian-held Kashmir scheduled to be held next month. - The State (central) Bank of Pakistan has depreciated the value of the rupee by another 0.09 under the managed float against a basket currencies to keep exports competitive. - President Farooq Leghari has directed the Punjab provincial government to chalk out a comprehensive plan to cope with flood and rain havoc in the province on a permanent basis. - Trading volume on the Pakistan stock market fell to an eight-month low as investors withdrew to the sidelines mainly due to political tension and fears of a major confrontation between the government and opposition parties. - The president of the Federation of Pakistan Chambers of Commerce and Industry, Ilyas Bilour, has said the tax-loaded budget for fiscal 1996/97 has given a crippling blow to all sectors of the economy, particularly the levy of sales tax on exports rendering Pakistani products uncompetitive. - The Corporate Law Authority has confiscated more than 51 million rupees on account of more than 10,000 fictitious share applications accepted by the Muslim Commercial Bank for public issue of Commercial Union Life Assurance Company Ltd. BUSINESS RECORDER - A large majority of units in the manufacturing sector, which comes in the abmit of general sales tax, has registered with sales tax collectorates in Karachi. - The government is planning to provide more incentives to foreign investment in different sectors, especially export-oriented ones. THE NEWS - The Salang tunnel linking Kabul with northern Afghanistan was formally reopened to traffic on Thursday under an agreement between the government and an opposition militia. - At least 800 Pakistani firms have confirmed their participation in the third private sector meeting of the Islamic Chamber of Commerce and Industry being held in Indonesia. THE NATION - Pakistani government has decided to increase the prices of medicines from November 1. - South Korea has sent a demand to Pakistan government for 3,000 Pakistani workers. -- Islamabad newsroom 9251-274757 6159 !GCAT Following are some of the main stories in Friday's Sri Lankan newspapers: --- DAILY NEWS Holderbank of Switzerland, the world's leading cement manufacturer, buys Puttalam Cement Co. Half of Colombo's 16,000 port workers were off work on Wednesday to watch Sri Lanka play India in the Singer World Series cricket tournament, officials saiy. --- THE ISLAND Twenty-four policemen and five civillians killed in a separatist rebel strike on a Sinhalese village in northeast Sri Lanka. Seventeen ships held up in Colombo harbour on Thursday after port workers stayed away on Wednesday to watch the cricket match between Sri Lanka and India, officials say. --- LANKADEEPA Four civillians and 25 policemen die in terrorist attack on Sinhalese village in northeast. --- DIVAINA Twenty-nine die in terrorist attck on Welikande in northeastern Sri Lanka. About 30 to 40 terrorists injured in the attack, says survivor. --- DINAMINA Government to upgrade 450 village schools at cost of 20 million rupees in next four years, say government sources. --Colombo newsroom tel 941-434319 6160 !GCAT Following is a summary of major Indian business and political stories in leading newspapers prepared for Reuters by Business News and Information Services Pvt Ltd, New Delhi. Telephone: 11-3324842, 11-3761233; Fax: 91-11-3351006 Internet : biznis. news@forums. sprintrpg. sprint. com -------oo0oo------- TOP STORIES The Hindustan Times UTTAR PRADESH ASSEMBLY POLLS TO BE HELD IN THREE PHASES The Election Commission has announced a three phase polling schedule for the 425-members Uttar Pradesh (UP) legislative Assembly. The polls will be held on September 30, October 3 and 7. UP is under President's rule, which will expire on October 17. Notifications for the elections will be issued by the state governor on September 6. The last date for filing nominations is September 13. The counting of votes will be taken up on October 8 for all constituencies. The poll process will be complete by October 14. - - - - The Times Of India SON OF FORMER COMMUNICATIONS MINISTER SUMMONED The Central Bureau of Investigation (CBI) plans to interrogate Anil Kumar, son of former communications minister Sukh Ram, and minister in the Himachal Pradesh government as part of probe into the telecom scam. CBI issued summons to Anil Kumar at his Shimla address as his whereabouts could not be confirmed. Anil Kumar would be questioned regarding the recovery of a large amount of cash and documents from the premises of the former communications minister, CBI sources said. In the Lok Sabha (Lower House of Parliament), meanwhile, the opposition Bharatiya Janata Party demanded a House Committee probe into corruption charges against Sukh Ram. The Congress party said it was not averse to such a probe provided it was backed by a consensus. - - - - MAIN BUSINESS STORIES Financial Express FOREIGN INVESTMENT REGIME TO BE MORE COMPETITIVE The Union Industries Minister hinted at further expansion of the list of high priority industries for foreign direct investment through the automatic approval route. The automatic approval limit for technology imports has been hiked to 70 million rupees from the earlier 10 million rupees. The Minister said the government was keen on inviting investments in the infrastructure sector. Currently investment in this sector was around four percent of the gross domestic product (GDP) which needs to be raised to six percent of GDP for the next few years, the Minister said. - - - - DEPARTMENT OF TELECOM MAY SEEK GLOBAL TENDERS The Department of Telecommunication (DoT) has threatened to float a global tender for 9.5 billion rupee contract for digital local telephone exchanges. Sources said the contract bids so far received by DoT were almost identical and quoted abnormally high rates. This has given rise to fears about cartelisation. To check this, DoT has asked the bidders to give lower counter offers. Failing this, DoT plans to go in for global tendering for the contract for digital local telephone exchanges. - - - - INDIAN OIL CORP PLANS NEW PRODUCT PIPELINE Indian Oil Corporation Ltd (IOC), which owns 96 per cent of the country's pipeline network, is planning to lay a new product pipeline from Paradeep in Orissa to Ranchi in Bihar. This 550-km long pipeline would hava a capacity of 2.7 million tonne per annum and would be used to carry products from the East Coast Refinery, a joint venture between the IOC and the Kuwait Oil Company. The project is likely to cost around 11 billion rupees. - - - - The Economic Times HINDUSTAN LEVER NETS 40 PCT RISE IN PROFITS Hindustan Lever Ltd (HLL) has reported a 40 percent rise in net profits during the first half of 1996 (January-June). During the period, HLL's profit after tax stood at 1.478 billion rupees as compared to 1.055 billion rupees in the same period of the previous year. HLL declared an interim dividend of 60 percent. The company's sales rose by 37 percent to 22.07 billion rupees from 16.10 billion rupees recorded in the first six months of 1995. - - - - SOCIAL SECTOR INVESTMENTS TO BE STREAMLINED The Union Finance Minister has proposed a structural change in the delivery mechanism of bank credit for various rural and social welfare schemes. In the present system the banks incurred massive bad debts due to corruption and non-repayment of loans. To check this, the Minister wants individual lending to be replaced by community lending, at the village level. The minister said such lending could be administered through the panchayats (local self government). - - - - Business Standard CENTRE DECANALISES SUGAR EXPORT The Union cabinet has cleared the proposal to allow free export of sugar. The cabinet decision has ended the monopoly of the Indian Sugar and General Industry Export Import Corporation, which has so far been acting as the canalising agency. The sugar industry, which had reacted very sharply when the proposal was first mooted, preferred to remain silent on cabinet decision. Sources said the industry, however, was still hopeful that the government would have second thoughts on this issue. - - - - MOVE FOR POWER REGULATORY AUTHORITY INITIATED The role of the Central Electricity Authority (CEA) is likely to be drastically pruned. The government is planning a national regulatory authority to take over most of CEA's functions. Sources said the regulatory body would be modelled on a similar organisation in the US. According to official sources the government is also planning to go for the second phase of privatisation - that of transmission. - - - - STOCK MARKETS FIRM UP The stock markets firmed up after several days of listless trading. The Bombay Stock Exchange (BSE) 30-stock sensitive index crossed the psychological 3500 mark during intra-day trading, before closing at 3493.61, up 54.81 points over the previous close of 3438.80. This was mainly on account of reports that the Finance Ministry was reviewing the minimum alternate tax burden for certain industries and concessions in form of lower excise, custom duties could also be introduced for the steel and cement sectors. The reports of sops by the Finance Ministry for the small investors to boost the sagging capital markets also improved sentiment. - - - - The Observer of Business and Politics FRENCH TYRE MAJOR KEEN ON BUYING AILING TYRE FIRM French tyre major Michelin is keen on acquiring ailing public sector Tyre Corp of India (TCI). TCI was referred (as a sick unit) to the Board of Industrial and Financial Reconstruction in December 1992. Michelin had earlier tried to gain control of tyre major MRF, in which it had a nine percent stake, and also Vikrant tyre. The French major is looking for a manufacturing base in the country through which it can cater to the demand of the south Asian countries, sources say. Michelin is setting up a 100 percent subsidiary, Michelin India, for which it has obtained necessary government permission. - - - - OIL MAJOR EMBARKS ON MAJOR UPDATE EXERCISE Public sector major The Oil and Natural Gas Commission (ONGC) has drawn up a massive restructuring programme in view of its plans to diversify into power and petro-chemicals. ONGC is planning to take the help of a foreign consultancy firm, expert in corporate restructuring, in this regard. This is part of the public sector giant's strategy for emerging as a leader in the global energy market. ONGC has shelved its plans to go public in the current financial year in view of bad market situation. - - - - Business Line TRADING IN B2 GROUP SECURITIES ON WEEKLY BASIS Trading in the B2 group of securities at the Bombay Stock Exchange would be done on a weekly basis from September 2, as per the directives of the bourse regulator Securities and Exchange Board of India (SEBI). A SEBI notice said the settlement for both shares and money in he B2 group would be routed through the clearing house. The exchange further clarified that no carry forward would be allowed in the B2 group securities. - - - - POWER PURCHASE AGREEMENT FOR IB VALLEY PROJECT RECALLED US-based AES Power's 20 billion rupee 2x250 MW Ib Valley thermal power project in Orissa may suffer a setback. AES Power had got the counter guarantee for the project but failed to reach financial closure. Orissa government therefore recalled the Power Purchase Agreement (PPA) for renegotiation. The PPA was still on the negotiating table despite having got clearance from the Central Electricity Authority. Power ministry sources said the crash in international equipment prices was behind the Orissa government's call for a revision in the PPA. The state government wanted a further reduction in the tariff from its original 2.17 rupees per kwh. - - - - 6161 !GCAT !GPRO !GREL Indian doctors said on Friday they had postponed plans to shift Mother Teresa, recuperating in a Calcutta hospital from malaria and heart troubles, from an intensive care unit because of persisting cardiac irregularity. "Her heart is still fragile and cardiac irregularity is still persisting," Dr Asim Kumar Bardhan, one of the six doctors treating the 86-year-old Roman Catholic nun, told Reuters. "We cannot shift her to post cardiac unit without a thorough check up by the panel doctors." Doctors had earlier hoped to move Mother Teresa, who was awarded the Nobel peace prize for her work with the destitute and dying in Calcutta's slums, to a private room with plans to allow her to walk. Bardhan said said although her condition had improved considerably from 10 days ago, doctors would not allow her to try to walk a few steps because of the cardiac irregularity. 6162 !GCAT !GVIO Last-minute disputes held up a planned exchange of prisoners between the Afghan government and its opponents during the reopening of the northern Salang highway, opposition sources said on Friday. They said the deal to free 10 prisoners by each side during Thursday's reopening had fallen through because of the refusal by President Burhanuddin Rabbani's embattled government to release a rebel pilot. A spokesman for the Jumbish-i-Milli movement of powerful northern warlord General Abdul Rashid Dostum told Reuters that Rabbani's government in Kabul had earlier agreed to release the pilot, Hafeezullah, in exchange for a government supporter, Maulvi Zahir. But General Majeed Rozy, a senior aide to Dostum, said Rabbani and his chief military commander Ahmad Shah Masood had backed out at the last minute. No comment from the Rabbani government in Kabul was immediately available. But government officials said the exchange of prisoners would take place in the next two or three days. The Salang, linking Kabul with northern Afghanistan, was formally reopened to traffic on Thursday under what the government said was an agreement with Dostum. But Rozy and a brother of Dostum, General Abdul Qadir Dostum, later told a public rally at Takhte Sang in Jumbish-controlled area that they had reopened the highway unilaterally to lessen people's hardships. Dozens of trucks began moving through the tunnel, about 80 km (50 miles) north of Kabul, from both directions after the highway reopened. The Salang tunnel, the main supply route for Soviet troops occupying Afghanistan in the 1980s, had been closed since 1994 when General Abdul Rashid Dostum rebelled against the Kabul government. Witnesses said wrecked tanks and vehicles littered both sides of the heavily mined road. Mines had been removed from the road itself, but experts of the Halo Trust mine clearance agency said it would take a week to clear the roadsides. The Halo Trust experts said 70,000 to 80,000 people were waiting on the northern side of the frontline to move south towards Kabul. Thousands of people fled to the northern city of Mazar-i-Sharif to escape factional fighting in the Afghan capital, but were later unable to return home. 6163 !GCAT !GVIO A landmine killed one Burmese Moslem and wounded two as the trio attempted to flee into Bangladesh on Friday, Bangladeshi frontier guards said. "We believe the landmine was one of many planted by Burmese troops along the Burma-Bangladesh border," Colonel Mozammel Huq of the Bangladesh Rifles frontier force said. "We have repeatedly asked the Burmese authorities to clear the frontier of mines, but to no avail," he told reporters. The injured Burmese were being treated in a Bangladesh hospital near the border while the body of the third was held at a border security post at Ashartali near Naikhyangchhari in Bangladesh's Banbarban district. Over 250,000 Burmese Moslems, or Rohingyas, fled to Bangladesh in early 1992 from west Burma's Moslem-majority Arakan province to escape what they said was persecution by the military junta. Repatriation began in September that year but over 44,000 Rohingyas are still huddled in several refugee camps in Bangladesh's Cox's Bazar border district. The dense, rugged forests have been a hideout for Burma's Moslem separatist guerrillas who are often pursued by both Bangladeshi and Burmese border troops, local officials said. The government estimates some 4,000 Rohingyas entered Bangladesh illegally between March and May this year but only 700 could be arrested and returned, officials said. Bangladeshi police said Burmese border guards on Wednesday shot two people dead and killed another with a grenade while attacking a group of Bangladeshi woodcutters also near the frontier at Ashartali, police said. They said the Burmese guards, called Nasaka, entered several miles into Bangladesh territory at Naikhyangchhari, 45 km (30 miles) from Cox's Bazar, and opened fire. Police said the attackers also abducted nine woodcutters. But a Rifles officer told reporters on Friday he believed the third victim was killed by a landmine, not a grenade. 6164 !GCAT !GDEF !GDIP India stood squarely by its opposition to a global nuclear test ban treaty in talks with British Foreign Secretary Malcolm Rifkind, British officials said on Friday. "Their position seems to be a very firm one," a British official said on the second and last day of Rifkind's two-day visit to the Indian capital. Rifkind met both Prime Minister H.D. Deve Gowda and Foreign Minister I.K. Gujral during his stay. British officials said the Comprehensive Test Ban Treaty (CTBT) was the main topic. Last week India singlehandedly blocked adoption of the pact at talks in Geneva. New Delhi wants the accord to commit the five nuclear powers -- Britain, China, France, Russia and the United States -- to a timetable for nuclear disarmament. India objects to a provision that would require New Delhi, as well as the two other nuclear "threshold" nations, Israel and Pakistan, to sign the treaty before it could take effect. New Delhi says a provision providing for unspecified measures to be taken if the treaty did not become international law within three years would impinge on its sovereign right to decide foreign policy. Despite India's objections, the treaty's backers plan to take it to the United Nations General Assembly next month. British officials said they detected no change in the Indian position. "There is firmness in the Indian position," one official said. "They have a good measure of public support behind them." All major political parties back the government's position. "We don't know if there is any prospect in the near term of getting the treaty into force," the official said. India exploded a nuclear device in 1974 but says it has not built the bomb. For two decades its strategic policy has been based on retaining the option to build nuclear weapons. India's northern neighbour China is a nuclear power, while experts believe Pakistan, like India, could assemble the bomb. Rifkind arrived this week amid simmering public bitterness over London's stance at the CTBT talks. In June, some frank closed-door comments by Britain's envoy to the talks set off a storm of protest in India. British envoy in Geneva Sir Michael Weston was quoted as saying India had found itself "wriggling on a hook" at the negotiations. New Delhi summoned Britain's ambassador to convey its concern over his compatriot's "offensive statement". Rifkind said on Thursday there was no record of the envoy's remark. Rifkind reassured his hosts on Thursday that India would not be punished with sanctions if it persisted in standing in the way of the CTBT. "Our task here was to set out the elements of our position in a quiet way to calm things down," a British official said. "The impression here was the UK had come to threaten sanctions. But we have no quarrel with India's right to decide." Indian officials said it was agreed that differences over the CTBT would not be allowed to harm bilateral ties. In his talks in New Delhi, Rifkind also discussed India's strained relations with Pakistan. British officials said there was a chance for an improvement in ties after local assembly polls in India's Jammu and Kashmir state are held next month. "We feel there is some scope for a limited expansion of contacts between Pakistan and India once the elections are over," he said. "Whether it is a real dialogue, we have to be cautious." 6165 !E12 !ECAT !GCAT !GDIP India's new government has told visiting British Foreign Secretary Malcolm Rifkind that the nation's open-market economic programme is "practically irreversible", British officials said on Friday. Prime Minister H.D. Deve Gowda, who heads a government which includes communists, and several of his ministers gave the assurance to Rifkind during the British foreign minister's two-day stay in the Indian capital which ends on Friday. "The clear message from the prime minister and all the economic ministers was the reform process will continue," a British official said. Deve Gowda, who met Rifkind on Thursday, said the economic liberalisation programme was "a practically irreversible process", the official quoted the prime minister as saying. There were concerns among some foreign investors when Deve Gowda's 13-party centre-left coalition took power in June that it might roll back the free-market policies adopted by his predecessor, former prime minister P.V. Narasimha Rao. But Rifkind told Indian businessmen over lunch that British industry was confident the new government would press ahead with the reforms, which have gradually let in foreign goods and investment. "The fact that the new Indian government has pledged itself to continuity with regard to economic reform, further liberalisation, disinvestment and matters of that kind gives British industry the confidence to plan for the future and not just tomorrow or next week," he said. Rifkind reminded the businessmen that British Prime Minister John Major hoped to visit India in early 1997. "I believe we can use that to give further boost" to economic relations, Rifkind said, calling current ties extremely healthy. British officials said Rifkind urged his Indian counterparts to open up the state-controlled insurance sector to private investment, and to ease non-tariff barriers including restrictions on the entry of foreign lawyers. Among ministers with economic portfolios, Rifkind met Finance Minister P. Chidambaram and Commerce Minister Bolla Buli Ramaiah during his stay. Earlier this week Rifkind started his five-nation trip in Pakistan. He was due to fly to Colombo on Friday and later to Japan and Mongolia. Citing his country's experience, Rifkind said India would benefit from liberalised trade and the privatisation of state-owned industry. The removal of trade barriers can unsettle domestic industry, he said. "But it's in India's interest to move in that direction. It far outweighs the temporary difficulties." Increased trade between India and Pakistan could ease tensions between the two long-time foes, Rifkind said. "It would make it easier to solve the political problems," he said. Rifkind said the privatisation of British state-owned firms had led to unexpected benefits in the form of increased capital investment in the firms once they were in private hands leading to higher profits. 6166 !E21 !E211 !ECAT !GCAT !GPOL Indian Finance Minister P. Chidambaram will address parliament on Monday about the government's proposed 1996/97 (April-March) budget, a parliament official said. The official said lawmakers were scheduled to continue the debate on the budget proposals till late on Friday. Chidambaram plans to make a more detailed reply on the finance bill, including offering any amendments to tax proposals, next month, probably on September 9 or 10, a finance ministry official said. The budget is expected to come to a vote in parliament by September 13, when the current session is set to end. --New Delhi Newsroom +91-11-301 2024 6167 !GCAT !GDIS The number of Hindu pilgrims killed in ferocious weather during an annual trek to a holy cave in the Himalayas has risen to 226, officials said on Friday. Police and paramilitary troops continued searching the rugged and mountainous terrain for more pilgrims on Friday, but officials said they doubted they would find more bodies. Last week, strong winds, heavy rain and snowfall lashed a 48 km (30-mile) pilgrimage route to the 3,880-metre (12,725 feet) high holy Amarnath cave, stranding almost 70,000 people in freezing temperatures for three days before help could be sent. Many of the dead included naked "sadhus" or Hindu holy men who smear their bodies only with ash. India's Home (Interior) Minister Indrajit Gupta said a further 13 pilgrims who arrived in Kashmir had died of heart attacks and other problems before beginning the trek, putting total deaths from the annual event at 239. "The number of deaths has today gone to 239," Gupta told lawmakers. Officials said 205 pilgrims died of exposure when temperatures dropped to freezing. Other casualties included 17 pony drivers and guides and four security personnel, Gupta said. More than 112,000 people had arrived in Kashmir this year to participate in the annual pilgrimage to the cave, where a naturally occurring ice stalagmite is venerated as a symbol of the Hindu God Shiva. Gupta said an inquiry into events surrounding the deaths, which the federal government announced early this week, would be headed by a senior administrative or judicial official. The inquiry would also suggest measures and remedies to prevent future recurrences, Gupta said. The pilgrims were stranded on the mountainside for three days before the weather cleared sufficiently to allow military helicopters to rescue some of them and air drop food, medicine and blankets. Thousands of others were guided down by soldiers. Many struggled down alone to the base camp, Pahalgam, 100 km (60 miles) away from Srinagar, the summer capital of India's northern state of Jammu and Kashmir. They were forced to spend three more days there following their ordeal because roads in and out of the town were blocked by floods. Buses full of pilgrims began driving out on Tuesday. Gupta told parliament that the last stranded group, of 8,000 pilgrims, drove out of Pahalgam on Thursday. 6168 !GCAT !GDIP !GPOL !GVIO Sri Lanka, accused by Amnesty International of sweeping human rights violations, will allow its people to appeal to a United Nations committee if they have complaints, the Foreign Ministry said on Friday. The cabinet has approved a plan to ratify the Optional Protocol to the International Covenant on Civil and Political Rights that allows individual representations on violations to the U.N.'s Human Rights Committee, a ministry statement said. "Sri Lanka's ratification of the Optional Protocol would be a further positive signal to the international community of its commitment to promote and protect human rights," it said. Amnesty International, a London-based human rights group, earlier this month accused the Sri Lankan government of turning a blind eye to widespread violations, including extrajudicial executions, disappearances and torture. It said the government was trying to justify such violations in the context of its 13-year-old ethnic war with the Liberation Tigers of Tamil Eelam (LTTE), who are fighting for an independent homeland for minority Tamils in the island's north and east. Colombo reacted angrily to the Amnesty charges, saying it was unhappy with "highly coloured language" in the report. The Indian Ocean island has tried to improve its human rights image after a government crackdown on a left-wing insurgency in the late 1980s left more than 60,000 people dead. In July this year, parliament gave the green light to establish a permanent Human Rights Commission to handle public complaints on human rights abuses. A separate state-run Human Rights Task Force already monitors reported abuses by security forces fighting the separatist LTTE guerrillas in the north and east. The government says more than 50,000 people have been killed in the conflict. 6169 !E21 !E211 !ECAT !GCAT !GPOL Indian Finance Minister P. Chidambaram was unlikely to address parliament on Friday about the government's proposed 1996/97 (April-March) budget but may take the floor on Monday, a ministry official said. The finance minister plans a two-stage response to reports that standing committees from both houses of parliament have prepared this month on the budget, which Chidambaram presented to lawmakers in July. He had been expected to offer a general reply to the parliamentary reports on Friday afternoon. But officials said debate on other matters was expected to push his remarks over until next week, possibly on Monday. Chidambaram plans to make a more detailed reply on the finance bill, including offering any amendments to tax proposals, next month, probably on September 9 or 10, the official said. The budget is expected to come to a vote in parliament by September 13, when the current session is set to end. Newspapers have said Chidambaram is considering exempting certain sectors from the proposed minimum alternate tax (MAT) on corporations which was proposed in the budget. The Economic Times said on Thursday that the finance minister "has virtually made up his mind to grant tax relief to the steel industry". Finance Ministry officials declined to comment on the report. - New Delhi newsroom +91-11 301 2024 6170 !GCAT !GDIS !GREL Nine Hindu pilgrims died after a jeep they were riding in spun out of control and crashed on a hilly road in northern Nepal, police said on Friday. Police said seven passengers died instantly when the accident occurred on Thursday at Ranipouwa, about 30 kms (18 miles) north of the capital Kathmandu. Two died later in hospital, and two more are in critical condition. The pilgrims were returning to Kathmandu after bathing in the Gosainkund lake to mark the Janaipurnima festival, police said. This is the day when devout Brahmins traditionally replace the sacred thread they wear across the left shoulder. 6171 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Nickos Kastriotis, formerly a member of the institutional sales team at M.Kyranis Securities, has moved to P&K Securities headed by Lambros Papakonstandinou and Achileas Kontoyouris, market sources said. Kastriotis will head the institutional sales team at P&K Securities, they said. --Dimitris Kontogiannis, Athens Newsroom +301 3311812-4 6172 !GCAT Leading stories in the Greek financial press: FINANCIAL KATHEMERINI -- The Bank of Greece announced a new cut in intervention rates. Positive development in monetary aggregates -- Mortgages of 500 billion drachmas by 1998 from the Organisation of Workers' Housing (OEK) KERDOS -- Inflation will ease to 8.5 percent from 8.6 percent in August. The marginal drop of 0.1 percent is less than the initial estimates of the government -- The restrictive monetary measures taken by the central bank in June slowed currency circulation and led to a reduction in consumer loans IMERISIA -- Liquidity growth is contained. A new drop in the central bank's overnight rate. Climate favouring reductions in interest rates -- Conservative New Democracy party: Emphasis on capital markets EXPRESS -- The central bank's measures to restrict liquidity are vindicated. M3 growth fell to 8.3 percent in July -- The leader of the conservative New Democracy party, Miltiadis Evert, opposes the foreign exchange policy of the last few months that has led to the appreciation of the drachma NAFTEMBORIKI -- Evert spoke of privatising 49 percent of telecomms organisation (OTE) and the Public Power Corporation (DEH) -- The goal of restricting liquidity is attained --Dimitris Kontogiannis, Athens Newsroom +301 3311812-4 6173 !GCAT !GCRIM !GPOL A Quebec Superior Court ruled on Friday that lawyer Guy Bertrand can continue with his court battle against referendums that would lead to a unilateral declaration of independence by Quebec. In his ruling, Justice Robert Pidgeon allowed Bertrand to proceed to a full hearing of his application for an injunction against future sovereignty referendums that would allow Quebec to secede unilaterally. The separatist Parti Quebecois government had tried to block Bertrand's application, arguing that the courts had no place in deciding what should be a purely political matter. "Certain of the constitutional questions raised by (Bertrand) deserve to be looked at fully by a judge," Pidgeon wrote in French in his 62-page decision. Pidgeon said many of Bertrand's arguments were hypothetical, but it will be up to the judge who hears the injunction application to decide whether the lawyer's constitutional rights are being threatened by the Quebec government's independence drive. Bertrand's application for an injunction should be given a full hearing to address four important questions relating to Quebec's sovereignty plan, Pidgeon said. Those are: Whether the right to self-determination is synonymous with the right to secession. Whether Quebec can unilaterally secede from Canada. Whether the process of Quebec's accession to sovereignty is permissible under international law, and whether international law has precedence over a country's domestic laws in such situations. In court hearings last spring, Bertrand, a flambuoyant former Quebec hardline separatist turned ardent federalist, charged that referendums leading to Quebec's unilateral declaration of independence would amount to an attempted "coup d'etat." Canadian and Quebec government officials were expected to comment later Friday on the judge's decision. The Quebec government will have to decide whether to appeal Friday's judgment. The Bertrand case has created problems for Quebec Premier Lucien Bouchard's government and forced the Canadian government to take a legal position on any move by Quebec to unilaterally secede from Canada should it garner a majority vote in a referendum on sovereignty. Last October, Quebec separatists lost a referendum on sovereignty by one percentage point. -- Reuters Montreal bureau (514) 985-2434 6174 !GCAT The following are top headlines from selected Canadian newspapers. Reuters has not verified these stories and does not vouch for their accuracy. THE GLOBE AND MAIL: - Former British Columbia premier William Bennett guilty of insider trader: Former premier, brother, Doman Industries Ltd chairman found guilty of insider trading by securities regulators, placed under 10-year trading ban. - Top brass fostered secrecy, probe told: Papers renamed, colonel testifies. Colonel Geof Haswell, the only officer charged to date in connection with document tampering, told the Somalia inquiry yesterday that the top brass and senior bureaucrats at National Defence Headquarters were obsessed with managing and controlling the flow of information. - Heritage Minister Sheila Copps proud of flag giveaways: Program praised despite its cost. - Clinton promises to build 'bridge into the future': Aide's forced resignation overshadows acceptance speech. - Juvenile prostitution in India integrated into religion: Ritualistic 'marriage' can commit sex workers for life. - No need to ask for quiet on these sets: In these hard times, cemetaries and churches are renting out their grounds to film companies to help make ends meet. Report on Business Section: - RBC Dominion Securities buys Richardson Greenshields of Canada Ltd: C$480-million acquisition will create firm with 1,600 brokers, but up to 600 jobs may be cut, observers say. - Will Midland Walwyn be the next to go? The stock market is betting that Canada's last major independent retail broker, Midland Walwyn Capital Inc, can't stay that way for long. - Storms cost insurers C$1-billion: Industry says 1996 will be worst year for catastrophe losses. - Panel suggests easing Registered Retirement Savings Plan content rules: Wants end to foreign holding curbs. THE FINANCIAL POST: - Bennetts, Doman found guilty: Regulator says former B.C. premier Bill Bennett and his brother indulged in insider trading with the help of lumber baron Herb Doman. The ruling will likely be appealed. - Richardson buy makes Royal Bank of Canada No. 1. -- Reuters Toronto Bureau 416 941-8100 6175 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Unionized workers at Inco Ltd's Manitoba division voted Thursday overwhelmingly in favor of a strike if a new collective agreement cannot be reached with the nickel giant before September 15, the union said on Friday. A spokesman for United Steelworkers of America local 6166, which represents 1,327 workers at Inco's Thompson, Manitoba operations, said the workers voted 95.3 percent in favor of giving union leadership a strike mandate. "The result is no surprise, workers at Inco have been telling us for the last two and a half years that they expect good things from this round of bargaining," Steelworkers local 6166 president Bob Desjarlais said in a statement. "Now the real work begins in earnest. The job at hand is to bring back a good contract." The two sides have been negotiating since July. The current three-year contract expires on September 15. Inco produces about one hundred million pounds of nickel a year from the Thompson operations. -- Reuters Toronto Bureau (416) 941-8100 6176 !C12 !C13 !CCAT !GCAT !GCRIM Spatializer Audio Laboratories Inc said Friday that U.S. District Court Judge William D. Keller ruled in the company's favor, granting its motion for summary judgment of non-infringment in a lawsuit filed by QSound Labs Inc. "This ruling finds that the Spatializer integrated circuit does not infringe QSound patents," Spatializer said. The company said it intends to pursue its claim for damages resulting from QSound's interference with Spatializer's business, and file a motion for summary judgment seeking to invalidate the QSound patents. -- New York Newsdesk 212-859-1610. 6177 !C11 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Delphi Information Systems Inc said Friday it has accelerated its restructuring and will reduce its work force by about one-third, effective immediately. James Harsch, chief financial officer, said Delphi has about 300 workers. "Today's action is in line with our previously announced strategic move to strengthen operations and return the company to profitability," Harsch said in a statement. Delphi Information offers integrated business solutions to the property and casualty insurance industry. Earlier this month, Delphi reported a loss for the fiscal first quarter ended June 30 of $2.1 million or $0.08 a share, compared with a year-ago loss of $811,000 or $0.10 on fewer shares outstanding. Harsch said Delphi's restructuring includes a previously announced plan to consolidate some offices. In addition, the company has forged an alliance with Pioneer Standard Electronics to allow Delphi to divest its hardware business, acquired Complete Broking Systems, rationalized its product line and completed private placements to strengthen its financial structure. Reuters Chicago Newsdesk - 312-408-8787 6178 !C12 !C24 !CCAT !GCAT !GCRIM !GENV Ketchikan Pulp Co. will pay a $359,000 penalty for illegal operation of a wood-waste incinerator over intermittent periods dating back to 1980, federal officials said Thursday. The fine was included in a consent decree lodged in U.S. District Court in Anchorage, the Environmental Protection Agency said. Ketchikan Pulp, a fully owned subsidiary of Louisiana-Pacific Corp, operated the incinerator at its Annette Island sawmill without bothering to obtain the required air-quality permit, a violation of the Clean Air Act, according to the consent decree. The incinerator was installed in 1980 and operated for various times in 1980, 1981, 1990, 1991 and 1992, EPA said. It produced particulates and carbon monoxide, EPA spokesman Bob Jacobson said. EPA's civil action stemmed from complaints lodged in 1991 by area residents who were bothered by thick smoke streaming from the sawmill, the agency said. EPA responded with a compliance order that mandated that Ketchikan Pulp apply for an air-quality permit within three months, clean up some of its airborne emissions and improve its pollution record-keeping. The company failed to meet those conditions, Jacobson said. "They never did apply for a permit," he said. The Clean Air Act carries penalties of up to $25,000 per day of violation. In a prepared statement, Ketchikan Pulp said it did not apply for the permit because it was unsure about "the applicability of federal clean air requirements on sovereign Indian lands." Annette Island is owned by the Metlakatla Indian Reservation. Ketchikan Pulp President Ralph Lewis said he was pleased with the dispute's resolution. "Many new processes have been brought on-line to improve the efficiency of woodwaste incineration and air-quality control. These projects have set a trend for our future operations," Lewis said in the statement. Ketchikan Pulp dismantled the illegal incinerator in 1993 and replaced it with a new wood-waste boiler that was equipped with EPA-approved pollution controls, the agency and company said. Thursday's settlement was similar to complaints in a series of cases filed against Louisiana-Pacific in the early 1990s for Clean Air Act violations at 14 other facilities. Those cases were settled in 1998 for $11.1 million. Annette Island is one of the southernmost islands in the southeast Alaska panhandle. Ketchikan Pulp, which operates the Ketchikan plant and saw mills in southeast Alaska, has been at the center of debate for years. It dominates the timber industry in the Tongass National Forest, the largest U.S. national forest and the continent's largest temperate rain forest, and holds a controversial 50-year timber supply contract. The company is seeking a 15-year extension of the contract, set to run out in 2004. Critics say the company has a poor environmental and labor record, including criminal convictions, and has damaged the Tongass, a series of islands, mountains, glaciers and old-growth forests. 6179 !GCAT !GDIS !GENV Hurricane Edouard, maintaining its strength of 140 mph (225 kph), was turning more northward on Friday, posing an indefinite threat to the middle and northern U.S. Atlantic Coast, the National Hurricane Center said. Hurricane Fran and tropical storm Gustav were also being monitored, said meteorologist Richard Pasch. At 5 a.m. EDT (0900 GMT), Edouard was 660 miles (1,062 km), south-southeast of Cape Hatteras, N.C. and moving north-northwest at 12 mph (19 km). The storm was beginning a northward movement, Pasch said, adding that people from Georgia and North and South Carolina northward should pay attention to weather forecasts ahead of the Labor Day weekend, the traditional end-of-summer holiday. Riptides and five- to six-foot (1.5- to 1.8-metres) waves were reported along North Carolina beaches, and swells were expected to reach 12 feet (3.6 metres) on Friday, forecasters said. Forecasters said computer models indicated a high pressure ridge could force Edouard toward the mid-Atlantic coast in three days. In coastal areas of North Carolina battered by Hurricane Bertha in mid-July, residents and business owners took a wait- and-see attitude. Motel owners in Hatteras Village said they had had few cancellations as people seemed to be holding to their Labor Day weekend plans, at least for the moment. "I think people are waiting to see what it's going to do," Katie Oden, owner of the Sea Gull motel, said. "It might hurt us even if it does turn, but you got to take it as it comes." Hurricane Fran remained weak and passed north of the islands of the northeastern Caribbean, Pasch said. At 5 a.m. EDT (0900 GMT), Fran was located 200 miles (320 km) north-northeast of the island of Antigua. The storm was a minimal hurricane, with top winds of 75 mph (120 kmh), and forecasters said little change in strength was expected in the next day. Fran "is following the general path of Edouard," Pasch said," adding that it was too soon to predict any landfall. NASA said on Thursday it was prepared to haul shuttle Atlantis back to its hangar if Edouard or Fran threatened Florida's Kennedy Space Center. Tropical Storm Gustav was 900 miles (1,448 km) west of the Cape Verde islands at 5 a.m. (0900 GMT), Pasch said. Gustav was declining in power and could be downgraded below tropical storm status later on Friday. "It's the busiest time of the year for hurricanes," National Hurricane Center forecaster Bill Fredericks said (on( Thursday. "The peak of the season is always around the Labor Day holiday." 6180 !C21 !CCAT !GCAT !GDIS !GHEA A pair of reports show air bags do nothing to cut the overall injury rate in car crashes and do not save insurers money, USA Today reported on Friday. A report to Congress by the National Highway Traffic Safety Administration said air bags had reduced fatal injuries in frontal collisions about 30 percent. But air bags cause enough non-lethal injuries that their impact on overall injuries is nil. "The net effect is that it's a wash," Bill Hoehly, the agency's research chief, told the newspaper. The overall effectiveness of air bags is undermined by an increase in arm and other injuries. When air bags deploy at speeds of up to 200 mph (320 kph) the force can break arms and cause other injuries. In a report out next month, Virginia Commonwealth University researchers say insurers' injury and property damage claims go up when cars are equipped with air bags. The arm injuries have contributed to spiraling insurance claims, said Virginia Commonwealth professor George Hoffer, a co-author of the study. -- New York newsroom, (212) 859-1610 6181 !GCAT NationsBank Corp, in a move that could create a financial giant stretching from Maryland to New Mexico, is in talks to buy Boatmen's Bancshares Inc in a deal worth about $9.5 billion, The Wall Street Journal reported on Friday. The agreement would move NationsBank closer to its vision of being a nationwide institution. Now operating in nine states, mainly in the South and Washington D.C., the Charlotte, N.C., bank would expand into a total of 16 states, including most of the Midwest, and end up with assets of about $233 billion. The newspaper also reported: * General Motors Corp has decided to largely maintain its present 82 models but to revamp many of them better to differentiate and target them to consumers. * Time Warner Inc chairman Gerald Levin and Turner Broadcasting System Inc chairman Ted Turner are meeting on Friday at Turner's Montana ranch to hammer out a range of contentious issues as they prepare to combine the two media giants. * PepsiCo Inc says it sees Taco Bell, Pizza Hut weakness hurting restaurant unit's profit. * The Securities and Exchange Commission is eyeing mutual-fund companies' practices on hot initial public offerings. * New York investment group will buy Amtrol Inc, a maker of flow-control products, for $218.9 million. * Housecall Medical Resources Inc shares plummet 50 percent as loss forecast stuns investors. * Reebok International Ltd says it will stop paying quarterly dividends after Oct 2. * Red Lion Hotels Inc shares rise on news of merger talks with Doubletree Corp. * U.S. economy grew at 4.8 percent rate in spring quarter, report prompts fears of rate increase. * Dow Jones Industrial Average drops 64.73 points, to 5,647.65. Nasdaq composite index falls 8.85 points, to 1,145.03. * ValuJet Airlines gets federal approval to fly again. * Hilton Hotels Corp and Britain's Ladbroke Group Plc agree to alliance. -- New York newsroom, (212) 859-1610 6182 !C21 !CCAT !GCAT !GENT CBS Inc. is asking advertisers to sacrifice their 30-second blurbs in the Friday, Sept. 20, "Late Show With David Letterman" so the network can experiment with a commercial-free 60-minute edition of the program, according to the Variety newspaper. And some advertisers are unamused by the planned stunt. The problem is that CBS wants these advertisers to pay their normal fee of about $45,000 a 30-second spot in exchange for a terse announcement at the beginning of the program like, The Acme Co. is proud to sponsor this special telecast of 'The Late Show.' That's the word from advertisers who've gotten the pitch from CBS' sales executives. CBS execs were unavailable to comment late Thursday, Variety reported. If the reaction of Chuck Bachrach, executive VP and director of media resources and programming for the Rubin Postaer ad agency, is any indication, CBS may have a hard time convincing advertisers to go along with the scheme. "I haven't got a clue to what CBS is doing," Bachrach said. "My advertisers have products to sell -- they're not philanthropists." But what really galls Bachrach is that "the Letterman show is known throughout the advertising industry community as the most difficult program to deal with. "Letterman is as advertising-unfriendly as anyone I know," even to the point of refusing advertiser requests for tickets to one of his tapings, Variety reported. Another ad agency executive, who requested anonymity, said, "I'm shocked and appalled that Letterman, who makes $14 million a year, expects advertisers to pay the costs so he can foist what looks like a pointless gimmick." This executive suspects that CBS will launch a heavy promotional campaign for the commercial-free telecast to get casual viewers who have abandoned Letterman to tune back in and, CBS hopes, get hooked again. The Letterman show consistently trails The Tonight Show Starring Jay Leno,the NBC competition, in the Nielsen household ratings." 6183 !GCAT !GWEA Hurricane Edouard remains a threat mainly to shipping at this time. The storm, currently 740 miles south southeast of Cape Hatteras, North Carolina, is moving north northwest at 10 mph. Top winds remain at 140 mph and only small fluctuations in strength may occur today. Large ocean swells will occur from the Bahamas to Bermuda and along the East Coast of the USA. Edouard may turn back toward the USA East Coast during the weekend, so all interests along the coast should keep updated on the progress of the storm. Hurricane Fran, with 75 mph winds, is 240 miles northeast of Antigua, moving west northwest at 13 mph. Fran is passing north of the Leeward Islands, and only causing large ocean swells in coastal areas. Fran will continue its west northwest track with top winds remaining near 75 mph today, and will be a threat mainly to shipping during the next 24-36 hours. Tropical Storm Gustav, with 40 mph winds, is 875 miles west southwest of the Cape Verde Islands, moving northwest at 10 mph, and is expected to continue a northwest track through today with little change in strength. Tropical Storm Orson is centered about 800 miles east southeast of Tokyo, Japan, with top winds near 50 mph. Orson is expected to move slowly west northwest during the next 36 hours with top winds remaining near 50 mph. Tropical Depression 22W will be a minor concern for shipping as it has top winds near 30 mph and moves from near 32n/176e to 37n/175e this period in the open western Pacific. 6184 !E21 !E211 !ECAT !GCAT !GPOL The California state Senate late on Thursday approved a measure that would overhaul the state's annual budgeting process beginning with the 1998-99 fiscal year. The bill passed the Senate on a vote of 39-to-0 and advanced to Governor Pete Wilson. The state Assembly on Wednesday approved the bill on a vote of 52-0. The bill would require so-called zero-based budgeting in putting together the annual blueprint for state spending. Zero-based budgeting is a process that requires entities to start with a base of zero dollars, adding funding for programs deemed appropriate. Some lawmakers contend the process would lead to greater fiscal responsibility and would make it easier to review the governor's annual spending proposals. Wilson's Department of Finance said a similar attempt at zero-based budgeting in 1977 was a failure, time-consuming and costly, and did not affect budget decisions. 6185 !E12 !ECAT !GCAT !GPOL President Clinton on Thursday attacked his Republican rival Bob Dole's economic plan as risky and said it would sharply boost the government budget deficit and interest rates. "This plan will explode the deficit," Clinton said in a speech accepting the Democratic Party's nomination for the presidency. "It will increase interest rates by two percent, according to their own estimates." Dole has pledged to cut taxes by $548 billion over six years and balance the budget, but many analysts are skeptical he can do both. Clinton contrasted Dole's sweeping tax-cut plan with his own proposal for more modest tax reductions. "Every tax cut I call for tonight is targeted, is responsible and it is paid for within my balanced budget plan," the president said. "My tax cuts will not undermine our economy. They will speed economic growth." 6186 !E41 !ECAT !GCAT !GJOB !GPOL President Clinton called for the creation of one million new jobs for welfare recipients by the year 2000. In his acceptance speech at the Democratic Party national convention, Clinton said, "We have a responsibility and a moral obligation to make sure the people required to work have jobs." Clinton proposed to give tax cuts to businesses that hire people off the welfare rolls. "We must make sure the jobs are there -- one million new jobs by the year 2000," Clinton said. "I propose to give businesses a tax credit for every person they hire off welfare and keep employed, to offer private job placement firms a bonus for every welfare recipient they place in a job if the worker stays in it, and most important, to help communities put welfare recipients to work -- repairing schools, fixing streets, making their neighborhoods shine again," he said. 6187 !E41 !E411 !ECAT !GCAT !GJOB Labor Secretary Robert Reich on Thursday described the U.S. job markets as "strong" and "robust" and said the unemployment rate could fall to five percent by the end of this year. "The economy is growing very fast," he told Reuters Financial Television. "It may be that we're beginning to see a productivity pay-off now from all the years of investment in equipment and machinery." The unemployment rate in July was 5.4 percent. Interviewed during the Democratic Party national convention here, Reich played down concerns that the robust job market and strong economy would fuel inflation. "No one should under-estimate the the capacity of this economy to run faster without inflation," he said. The Commerce Department reported earlier that gross donestic product (GDP) grew at a rapid 4.8 percent rate in the second quarter -- its strongest pace in two years -- while inflation remained modest. "We're not seeing any evidence of accelerating inflation," Reich said. Wall Street stock and bond prices slumped on Thursday in the wake of the GDP report on investor worries that the rapid growth would spur inflation and force the Federal Reserve to raise short-term interest rates. The Labor chief argued though that financial markets have over-reacted to inflation fears and have failed to take account of the changed nature of the U.S. economy. "That inflation phantom has not actually yet appeared," Reich said. "Yet the markets continue to expect it will." He said the markets were "haunted" by the inflationary experience of the 1970s. But the economy has changed much since then, he said. "Producers are far more reluctant to raise prices because of far more intense competition," he said, adding, "It is easier for producers to shift production platforms." The administration has forecast that the economy will grow by 2.5 percent this year on a fourth-quarter on fourth-quarter basis. Reich said that may prove to be an under-estimate. 6188 !C12 !C42 !CCAT !E41 !ECAT !GCAT !GCRIM !GJOB !GVIO AFL-CIO President John Sweeney, U.S. Rep. John Conyers and several other union and religious leaders were arrested on Friday during a protest in support of striking newspaper workers, officials said. The demonstration of more than 750 strikers and supporters was called to protest the lack of negotiations in the 13-month-old strike against the Detriot News, owned by Gannett Co. and the Detroit Free Press, owned by Knight-Ridder Inc.. More than 2,500 newspaper workers from six unions went on strike in July 1995 over company proposals to reduce jobs, change work rules and restructure pay scales. The papers are continuing to publish with the aid of about 500 employees who have crossed picket lines more than 1,400 replacement workers. A year ago, demonstrations on Labor Day weekend touched off violent clashes between strikers and supporters and police and company security guards at printing plants owned by Detroit Newspapers Inc., the joint operating agency that publishes the News and Free Press. Wearing a blue shirt and suspenders, Sweeney sat on the steps of the News building, blocking the doorway with several other people. A policeman tapped him on the shoulder and led him away peacably to a blue police bus. "We will do whatever it takes to support this strike and return you all to work," Sweeney said told the rally. "The labor movement will not let you down. This is the most important strike we have in our country today." Also arrested were United Mine Workers President Richard Trumka, who is also the AFL-CIO's secretary-treasurer; Newspaper Guild President Linda Foley; Detroit City Council President Maryann Mahaffey; Metropolitan Council of Newspaper Unions Chair Al Derey; and several other officers of the striking unions as well as the United Auto Workers and United Steelworkers. Several Detroit religious leaders also were arrested in the peaceful protest, including Roman Catholic Bishop Thomas Gumbleton. The protest was the latest of several incidents in which labor, civic and religious leaders have been arrested in protests over the last several months. 6189 !E12 !ECAT !G15 !G151 !G154 !GCAT President Jacques Chirac will try to stem market worries that France is falling behind in its attempts to meet tough criteria for a single European currency when he meets German Chancellor Helmut Kohl this weekend. Plagued by a stagnant economy, volatile financial markets, and threats of labour unrest, but publicly resolute about France's commitment to monetary union, Chirac is likely to seek support from Bonn, whose economy is performing better and whose reputation for financial probity is more polished. The two leaders, whose countries are considered the driving force of European unity, will confer on a broad range of topics including bilateral, European and international issues, presidential aides said. On Friday, the German government said it was possible that the single currency would top the agenda at the meeting. "I could imagine that the European currency will be at the top (of the agenda)," deputy government spokesman Herbert Schmuelling told reporters. Chirac received a boost before his Bonn trip from a surprise drop, announced on Friday, in French unemployment in July. Labour ministry data showed the job seekers last month fell by 20,000 or 0.7 percent to 3,045,600 people last month. France also released trade figures which showed a surplus in June of 9.75 billion francs ($1.93 billion), down from a revised 11.24 billion surplus for May. But any relief was likely to be fleeting since the jobless rate based on internationally-accepted criteria refused to budge from its record 12.5 percent. Even Chirac acknowledged that France's job problems were far from over. "One swallow does not make a summer," he said, during an surprise appearance at a conference on youth employment in a Paris suburb. And Prime Minister Alain Juppe said the government had not made enough ground against unemployment and in fact expected "the situation to remain difficult in the coming months". But Chirac nevertheless seized on the latest figures to talk up the French economy. He said France was mastering its deficits, had a healthy trade surplus and a solid currency. "Things are not going so badly. France has mastered its public deficits, our currency is solid. Those who sap the morale of the French bear a heavy responsibility" he said. But private economists said the unemployment report was probably little more than a blip due to statistical aberrations in the quiet summer months and repeated that the French economy was mired in weakness with few signs of a rebound. France's record unemployment is making it hard for the centre-right government of Prime Minister Alain Juppe to push through an austerity budget for 1997 marrying tax cuts and spending restraint in an attempt to lower budget deficits sharply without sparking severe social unrest. Chirac and Juppe, just back from holidays, are rolling out the heavy artillery in the run-up to the budget presentation and reaffirming France's commitment to meeting criteria in the Maastricht treaty on European Economic and Monetary Union (EMU). Under the treaty, France's public deficit must be cut to no more than three percent of gross domestic product (GDP) from about five percent in 1995 and a hoped-for four percent in 1996. "France will be there and will meet the necessary requirements. It will do this because that is what corresponds to the interests of all of the French people," Chirac said on Thursday. 6190 !E12 !E41 !E51 !E511 !ECAT !GCAT !GJOB South Africa is fighting to attract foreign investment to drive growth into the next century but has to lift productivity from among the world's lowest levels. The country ranked 44th out of 46 countries according to the latest survey by the International Institute for Management Development. In a separate report, the World Economic Forum puts South Africa 43rd out of 49 countries in terms of competitiveness. This is not good for a country which is now part of the world economy and is relying on foreign cash to achieve the goals set out in its recently unveiled macro-economic strategy, "Growth, Employment and Redistribution." The package is designed to double annual growth to 6.1 percent and create 409,000 new jobs a year by 2000. "The problem," says Jan Visser of the International Productivity Institute (NPI), which will hold an international meeting here next week, "is the climate in individual organisations and the adversarial relationship that has existed between labour and management." The South African investment environment has so far proved unattractive to foreigners. The government plans tax incentives to stimulate new investment in competitive and labour-absorbing projects. Noting the danger of a wage-price spiral, it has also stressed the need for wage moderation and said pay rises should not exceed average productivity growth. Productivity improvements are firmly on the agenda in the country's economic development. "An important constraint preventing firms from being more productive is the lack of co-operation between management and workers," says Visser. South African Chamber of Business (Sacob) industrial affairs committee chairman Hugo Snickers agrees: "The adversarial relationship that exists at the moment is obviously not conducive to productivity." Linked to improving workplace interaction is the focus on the quality of management and leadership. "The country has excellent top managers but we lack good middle and junior management, people who can be the drivers of productivity," according to Visser. Sacob's Snickers says training must also be improved. South African business spends around 1.5 percent of payroll on training and development whereas Europe and Japan spend between six and 10 percent. Visser says Japan is an example where management and workers negotiated a social contract which guaranteed workers their jobs if productivity was raised. "When the Japanese increased productivity, they could not reduce labour. They had to sell more products and go to international markets, forcing them to become more export-orientated." This, he says, is what South Africa needs to break the balance of payments constraint. The picture is not all bleak. Reserve Bank figures show labour productivity has improved this decade, rising in non-farm sectors from 0.3 percent in 1990 to 1.2 percent in 1992 and 3.2 percent in 1995. According to the NPI, multifactor productivity -- a weighted combination of labour and capital productivity -- rose 2.5 percent last year. There have been some notable advances, but South Africa has a long way to go. Anglo American Industrial Corp Ltd associate Samcor, for example, has raised production per employee from 10 to 15 cars a year since 1994. But at an improvement rate of five vehicles a year, it will take 10 years to reach the 1994 productivity level of 65 cars per employee achieved at Ford's plant in Valencia, Spain. 6191 !C11 !C12 !C17 !C172 !CCAT !GCAT !GCRIM Bond holders of the troubled trading and property group Amcol Holdings Ltd failed to delay the appointment of Price Waterhouse as judicial manager of the company on Friday. Rejecting their request, the High Court Judge Lai Kew Chai said he was satisfied with the progress Price Waterhouse had made in sorting out the affairs of Amcol and thought no purpose would be served by delaying the appointment. The court first appointed Price Waterhouse as Amcol's interim judicial manager on July 25 after an audit by the firm showed the company had serious cash-flow problems and had difficulty meeting its financial obligations. On August 16, the accountants announced an agreement with Indonesian conglomerate Sinar Mas group to save Amcol and its creditors through the creation of a new company, dubbed "Newco", into which Sinar Mas would inject at least US$2.0 billion in assets. But bondholders representing Singapore $285 million (US$202 million) of Amcol's estimated debts of more than S$1.0 billion said they were not sure the deal would guarantee their interests. Lawyers for the bondholders told the High Court it was not clear when creditors would be paid, and said some bondholders felt they had insufficient information about the terms of the rescue package worked out with Sinar Mas. Price Waterhouse said the bondholders' fears were groundless since Sinar Mas had already said all creditors would be paid in full from Amcol's assets as soon as possible. The deal with Sinar Mas had the support of around half of Amcol's creditors and the Indonesians had already said they would meet all the creditors in early September to address their concerns, Price Waterhouse said. Confirming Price Waterhouse partners Nicky Tan, Deborah Ong and Yeoh Oon Jin as judicial managers of Amcol, Lai said he was satisfied the team had provided a regular flow of information to creditors and had worked hard to save the company. "No useful purpose would be served by postponing the making of the judicial managers' order," he said. "I am very gratified there has been this agreement with Sinar Mas." Lai ordered that Price Waterhouse undertake a thorough investigation into the collapse of Amcol and write an official report on the affair. ($1 = S$1.41) 6192 !GCAT !GPOL !GVIO Philippine peace negotiators initialled an historic agreement on Friday to end a bloody Moslem-Christian confrontation in the south of the country dating back centuries. Government chief negotiator Manuel Yan and Nur Misuari, chairman of the Moslem Moro National Liberation Front (MNLF), initialled the accord witnessed by Indonesian President Suharto at Jakarta's Freedom Palace. The peace agreement will be formally signed by Philippine President Fidel Ramos and Misuari in Manila on Monday. The accord is aimed specifically at ending a 24-year Moslem separatist revolt which has cost at least 125,000 lives. Some five million Moslems regard the southern island of Mindanao as their ancestral homeland, although they are now outnumbered three-to-one by Christian migrants. Tensions between the two religious groups go back four centuries to the arrival of the first Christians in the area. Extremists on both sides have condemned the peace accord, but Misuari -- stressing that it was for all the people -- said he would work to persuade opponents to accept it. The agreement will establish an interim Southern Philippines Council for Peace and Development (SPCPD), to be followed in three years by a plebiscite leading to autonomous rule in the 14-province region. Misuari acknowledged at a Friday news conference he faced a "big problem" in getting his guerrilla followers -- which he has said numbered well over 30,000 -- out of the bush. "I know it is a matter of explaining to them the wisdom of supporting and associating ourselves with this peace process," he said. Several thousand will be integrated into the Philippine armed forces and the police. He also said he looked forward to welcoming home some 500,000 refugees from Sabah in east Malaysia. "This is a moment of great significance, not only to the government and people of the Philippines, but also to the whole region and the international community," Indonesia's Suharto said at the initialling ceremony. Indonesian Foreign Minister Ali Alatas and Mohammed Mohsin, assistant secretary-general of the Organisation of the Islamic Conference (OIC), also initialled the agreement. It followed a final two-day round of intensive and sometimes heated negotiations in Jakarta to settle last-minute differences and agree on the peace text. Final agreement was reached late on Thursday night at a central Jakarta hotel. Since substantive peace talks started in 1993, Indonesia has chaired a six-nation ministerial committee of the OIC to facilitate negotiations and mediate between the parties. The OIC will continue its involvement in the interim peace process in Mindanao. Alatas said the Jakarta ceremony brought to a successful close "two decades of an arduous quest for peace". The peace process dated back to an agreement signed under the auspices of the OIC in Tripoli in 1976, but which languished until it was revived in 1993. "It is an agreement that represents a just, comprehensive and durable political settlement to the conflict in the southern Philippines," he added. 6193 !C31 !C312 !CCAT !E51 !E512 !ECAT !GCAT !GDIP Iraq's U.N. ambassador Nizar Hamdoun said on Friday that minor problems still needed to be resolved before his country's oil-for-food deal with the United Nations could be implemented. Hamdoun also said that certain parties were seeking to delay implementation of the plan, but Baghdad was determined to carry it out as it believed it would be the prelude to total removal of U.N. sanctions, imposed after Iraq invaded Kuwait in 1990. "The fixing of a time limit concerning outstanding minor points is insignificant against what has been achieved in this field," he said in an interview with the official al-Iraq newspaper. He added: "We have to remember that there are certain circles which through constant procrastination are trying to delay." He did not elaborate. Iraq and the U.N. agreed in May on how to apply a 1995 Security Council offer for Baghdad to export limited quantities of its blocked oil exports to pay for urgent humanitarian needs. Differences on procedural issues have delayed implementation of the plan, allowing exports worth $2 billion over six months. Hamdoun said he believed Iraqi crude would reach international markets in a short time. He gave no specific date. "The implementation of the memorandum of understanding will constitute an important opening...for the total lifting of the economic embargo," Hamdoun said. 6194 !C13 !CCAT !G15 !G153 !GCAT The European Union's beef management committee accepted a total of 23,530 tonnes of beef into intervention stores at mixed prices, an EU official said. This was against offers of 52,795 tonnes and 5,703 forequarters, the officials said. (FOX) - Brussels Newsroom: +32 2 287-6830 6195 !E12 !ECAT !G15 !G151 !G154 !GCAT !M13 !M132 !MCAT Talks were ongoing to establish special cases for leniency for countries straying from fiscal austerity within Europe's planned currency union, but no final decisions had been taken, a German Finance Ministry spokesman said on Friday. He stressed that these talks did not in any way focus on the initial entry criteria, which Germany insists must not be watered down. "Talks are being held about a number of special cases when nations could be allowed to stray from the upper limit for budget deficits, and natural disasters could be one possibility," he said, referring to a proposed stability pact for members. But he told Reuters in answer to an enquiry, "nothing is set yet." Discussions were still being held on the so-called stability pact which could take effect once nations are members of the currency union to ensure lasting fiscal austerity. At a conference in Austria, Juergen Stark, the state secretary in the Finance Ministry, said on Thursday that there could be exceptional circumstances in which nations may be able to overstep the three percent ceiling target for ratio of budget deficit to gross domestic product. He did not elaborate on these in the speech text, released in Germany. Germany has been lobbying particularly hard for the stability pact. The spokesman did not give any additional details. To join Europe's planned currency union, scheduled to begin January 1, 1999, targets include ones for national budget deficits not to exceed three percent of gross domestic product and for government debt not to exceed 60 percent of GDP. --Frankfurt Newsroom, +49 69 756525 6196 !C12 !CCAT !GCAT !GCRIM A simmering feud over digital pay television between German publishing giant Bertelsmann AG and rival media mogul Leo Kirch turned into a legal battle on Friday as they both sought court injunctions. Just a month after signing a landmark cooperation agreement, it now appears that a ceasefire between the two German media powers could break down into total warfare, endangering their joint pay TV channel Premiere. Officials of both companies acknowleged that talks were progressing at a snail's pace and the whole deal could collapse if difficulties were not resolved. "It centres around the role of Premiere and prices," a Kirch Group official said. A Bertelsmann official said: "The talks are very difficult." Kirch's digital channel DF1 sought an court injunction in Hanover to stop Premiere from claiming as exclusive its broadcast of the films "Forrest Gump" and "Outbreak". Both movies will also be shown on DF1. "Now that DF1 exists Premiere no longer has an exclusive position," said Kirch Group spokesman Johannes Schmitz. Kirch's move was followed by Premiere, which is seeking to block DF1 from claiming that it can broadcast up to 100 channels on its digital programme. "They only have what, 12 or 13 channels? The Kirch side started this by filing the injunction against Premiere. This is not our style," said Nikolaus Formanek, spokesman for Bertelsmann's television unit Ufa Film- und Fernseh GmbH. Despite the agreement last month to jointly develop digital television decoder technology and to make Premiere Germany's "premium digital pay TV channel", both companies have continued to develop their own separate digital projects. Until last month, Premiere was Germany's only pay TV channel. Bertelsmann and France's Canal Plus each hold 37.5 percent in the company while Kirch holds 25 percent. Kirch launched DF1 last month, charging 30 marks ($20.28) for its basic package, and has amassed an arsenal of films. Kirch's latest deal is a 10-year digital pay TV pact with Disney . Disney will also launch the Disney Channel on DF1. Bertelsmann and communications giant Deutsche Telekom AG, which have put together the MMBG consortium of broadcasters, launched the "Super Television" digital platform this month. Super Television will include the digital package developed by Bertelsmann and CLT and known as Club RTL. It will include digital programming from German public broadcasters ARD and ZDF and the the French Multithematiques, the digital package of Canal Plus. Club RTL will launch a package of 11 genre channels by the end of the year for under 20 marks with movies, cartoons, rock concerts and a soft porn channel, RTL Blue. It has an additional pay-per-view package with more blue movies and European soccer. However, Club RTL will not have the blockbuster power of DF1. "We don't have any finalised contracts with any major studios," said Club RTL spokesman Carlo Rock. "Our movie channel is not meant to run premium movies." That's what Bertelsmann wants Premiere to do. But Premiere's future seems more uncertain than ever. Kirch and Bertelsmann have reached a stalemate and could end up losing if they divide the market. While Kirch holds the Hollywood card, Bertelsmann still has the pay TV rights to German first division soccer, one of Premiere's main attractions. In the end, it could be that Premiere's 1.2 million subscribers will have to decide whether to go to the movies with DF1 or to the soccer stadium with Club RTL. ($1=1.4793 Mark) 6197 !C12 !CCAT !GCAT !GCRIM A Finnish Internet specialist said on Friday he was closing his remailer, or anonymous forwarding system, after rejecting allegations it was being used as a conduit for child pornography. Johan Helsingius, whose remailer is one of the largest in the world with over half a million users, said in a statement he was closing down the system because the legal issues governing the Internet in Finland are unclear. "The legal protection of users needs to be clarified. At the moment the privacy of Internet messages is judicially unclear," said Helsingius, who said he set up and ran the remailer in his free time partly as an initiative to help abused children. Internet remailers are computers which receive and forward messages with a pseudonym or anonymous source. There are about five large ones in the world, and they exist to enable anonymous discussion of sensitive subjects -- for instance by victims of child abuse, potential suicides or people in politically repressed societies. Helsingius, supported by Finnish police, earlier this week dismissed claims in Britain's Observer Sunday newspaper that his remailing system handled up to 90 percent of child pornography on the Internet. "I have also personally been a target because of the remailer for three years," he said on Friday. "Unjustified accusations affect both my job and my private life." The newspaper reported the charges, by a U.S. policeman and FBI adviser, as Belgian police were investigating horrific child sex crimes and ahead of an international conference in Stockholm on the commercial sexual exploitation of children. In Helsingius's statement, Helsinki police sergeant Kaj Malmberg was quoted as saying he had found no evidence of child porn being transmitted from Finland. 6198 !GCAT !GPOL !GVOTE Greece's conservative opposition is picking up support with bold promises while press-shy Prime Minister Costas Simitis and his sleepy PASOK socialist party lose ground, election analysts said on Friday. Simitis began the month-long campaign last week as the favourite but refuses to talk to the press and has failed to make clear what he would do to boost the income of the average Greek after 10 years of harsh austerity. "If he keeps ducking press questions -- especially on the economy -- the tide will turn against him. He sounds like a snobbish man of numbers, alienated from the everyday problems of the middle-class," one analyst told Reuters. Seizing on Simitis' reservations conservative New Democracy party leader Miltiadis Evert has been promising the hardest hit voters like farmers and small-business owners higher incomes and tax breaks in his first three months as prime minister. In two press conferences this week Evert pledged to increase farmer's pensions by about 30 percent, slash fuel costs and abolish a PASOK tax law which forces small and medium businesses -- the backbone of the Greek economy -- to pay a minimum fixed tax despite their income. He said he would make up the $1.1 billion annual cost through privatisations like a 25 percent floating of the state telephone company on the Athens stock exchange. The hefty and emotional Evert said he was a practical man who did not believe the country's huge deficits could only be faced with belt-tightening measures. "I am spontaneous, and these days being spontaneous is not good in politics. But I will not sit back and simply read off numbers (in prepared speeches) over my little glasses," Evert said in a reference to the spectacled and professorial Simitis. Simitis' low-key approach has been adopted by most of his ministers who accuse Evert of false promises but avoid making any commitments of their own. Athens newspapers backing Simitis and veteran PASOK members warned that Evert's "populism" could find fertile ground among voters and called on PASOK to snap out of its lethargy. "I don't rely on press reports in Greece and abroad that PASOK will win the elections by a landslide," popular Labour Minister Evangelos Yannopoulos said. "PASOK must wake up, get close to the people and explain the rightness of its policies." Simitis, nicknamed "the Chinese" in the press for his short figure, almond-shaped eyes and fixed smile, is a complete antithesis of Evert known as the "bulldozer" for his imposing presence. Simitis tells Greeks their future lies firmly within the European Union and that they must make sacrifices to catch up with the rest of the group in the next two years so that Greece can join the European Monetary Union shortly after 1999. The snap vote comes two months before the presentation of next year's budget. Simitis wants to cut spending by $1.2 billion to trim public debt and persistently high inflation. Simitis, 60, called the election while enjoying an approval rating of 70 percent, well ahead of Evert, whose position was disputed even within the conservative camp. "This popularity will disappear if Simitis continues to address voters from the safety of his office without accepting questions," another analyst said. "Voters know very little and care very little about the EMU. They want clear answers on what he can do to make their lives better now." Simitis will start touring Greece on Monday. He will give his first campaign press conference on September 8 in the northern city of Salonika at an annual international trade fair where the prime minister traditionally lays out his economic targets for the year ahead. Poll companies were caught off guard by Simitis' snap election decision. The first countrywide opinion surveys are expected around September 10. 6199 !GCAT Prepared for Reuters by The Broadcast Monitoring Company EVENING STANDARD CARJACKING TERROR IN RUSH-HOUR Last night a gang of carjackers struck in the Cromwell Road. The masked thugs armed with knives broke the window of a Range Rover and stole 16,000 Rolex stg watches from a couple, in full view of other motorists and pedestrians. -- NUCLEAR FUELS DIVES 88 MILLION STG INTO THE RED Nuclear waste management company British Nuclear Fuels plunged 88 million stg into debt last year. The damage was done by one-off payments including 356 million stg provisions for deferred tax did the damage. -- STAGECOACH GETS RAIL BUY GREEN LIGHT The government rail privatisation agency Opraf has given Stagecoach permission to takeover rail leasing company Porterbrook in a 475 million stg deal. This lessens the likelihood of the deal being referred to the Monopolies and Mergers Commission. -- BMC +44 171 377 1742 6200 !GCAT !GENT Archaelogists digging in an abbey destroyed by the English 400 years ago think they have found the heart of Robert the Bruce, the king who secured Scotland's independence with a victory at Bannockburn in 1314. King Robert I, with only 6,000 soldiers and 500 horse, routed King Edward II and his army of 20,000. The two-day battle forced England to drop its claim to Scotland, though peace was not signed until Robert The Bruce was near death 14 years later. Legend has it that his doggedness was inspired by watching a spider weave its web as he sat in a cave. His perseverance gives him as much right to the title Braveheart as his predecessor William Wallace, portrayed on film last year by Mel Gibson. A 10-inch (25 cm) lead cylinder was dug from the foundations of Melrose Abbey late on Wednesday, not far from a plaque saying Bruce's embalmed heart was buried nearby. The sealed red cylinder, apparently about 70 years old, was being opened in an Edinburgh laboratory on Friday to see if it holds the ancient lead casket with the heart. Earlier excavations found a casket believed to contain the heart but it was reburied in 1921 without the precise spot being noted. "The cylinder certainly feels heavy enough to contain another casket," said Doreen Grove of Historic Scotland, the organisation that cares for ancient monuments. Grove said dating tests would be carried out to see if any casket found could be linked to the time of Bruce's death. There were no plans to open the casket and because it is made of lead, it cannot be X-rayed to reveal the contents. Historic Scotland intend to return the casket to Melrose Abbey and mark the site with a memorial. Bruce's dying wish was that his heart should be taken to Jerusalem on a crusade against the Saracens. The king was buried in Dunfermline Abbey and his trusted companion Sir James Douglas -- knighted at Bannockburn for bravery -- set off with the embalmed heart in a lead casket. Douglas was killed battling against the Moors in Spain and the heart was brought back to Scotland to be buried in Melrose Abbey. Melrose, dating back to the Seventh Century, was one of Scotland's wealthiest and most powerful abbeys. It was destroyed by England's King Richard II about 50 years after Bruce's heart was buried there. A new Gothic abbey was built on the site, only to be destroyed by marauding English in 1545. The stone ruins were further pillaged for building materials, used last century in many neighbouring mansions including the novelist Sir Walter Scott's imposing home at nearby Abbotsford. 6201 !GCAT !GDIP !GVIO Rival Kurdish factions were due to attend U.S.-sponsored peace talks at the American embassy in London on Friday in an attempt to secure a tenuous ceasefire between them. The meeting between the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) is expected to try to push forward agreements early last year which put an end to more than a year of clashes in which about 3,000 people died. The U.S.- brokered ceasefire launched last Friday has been broken by sporadic fighting, but there have been no reports of new clashes since Wednesday. "The meeting is to consolidate the ceasefire," the PUK's representative at the talks, Latif Rashid, told Reuters. "We want a commitment from both sides. We want to send independent observers and monitors and for the observers and monitors to report to an arbitration committee," he said. Officials for the KDP and the PUK in London described the talks as "preliminary." U.S. Assistant Secretary for Near East Affairs Robert Pelletreau, who brokered the ceasefire, has called for a meeting in September between PUK leader Jalal Talabani and KDP chief Massoud Barzani, but this may depend on the success of Friday's meeting. A KDP spokesman said the meeting was due to start at 2 p.m. (1300 GMT) and that it would be chaired by Robert Deutsche, the Director of the U.S. Office of Northern Gulf Affairs. The U.S. embassy confirmed the meeting was taking place, but gave no further details. Previous talks have centred on the distribution of oil trade revenues and the status of the city of Arbil, which is currently under PUK control. U.S., British and French planes have been patrolling the skies of northern Iraq since shortly after the Gulf War in 1991 to shield Iraq's Kurds from attack by the Baghdad government. Both Iraqi Kurd factions have expressed concern about the build-up of Iraqi troops near Kurdish regions in recent days, each accusing them of supporting the other group. 6202 !C11 !C12 !CCAT !GCAT !GCRIM Five large oil companies are cooperating to combat the theft of sensitive information on procurement projects for multi-million dollar oil projects, the Financial Times reported on Friday. Norwegian Statoil managing director Harald Narvik said international police organisation Interpol had also been called in to investigate infiltration and bribery in the bidding for large oil projects. Statoil told Reuters that what it called an information exchange -- with Royal Dutch/Shell Group, British Petroleum Co Plc, Exxon Corp and Mobil Corp -- had been under way for two years. Isolated cases of corruption in oil project procurement have come to light in recent years. Last week two Britons working in the Norwegian sector of the North Sea, one a Statoil employee, were detained in Stavanger on suspicion of corruption. 6203 !C21 !CCAT !GCAT !GWEA !M14 !M141 !MCAT Warm, dry weather in British Columbia's Dawson Creek region and across Alberta improved crop conditions and bolstered harvest progress, Alberta Wheat Pool said in a report for the week ended August 30. The crop district between Calgary and Olds and the Red Deer crop district reported light frost damage last week. Twenty nine locations across central and southern Alberta reported some damage from high temperatures while 22 locations reported some damage from lack of rain. About 77 percent of hard red spring wheat, 86 percent of barley and 86 percent of canola was ripe or ripening. -- Gilbert Le Gras 204 947 3548 6204 !C21 !CCAT !GCAT !GWEA Little rain and no frost was expected across Canada's Prairies through to Wednesday as harvest of spring crops gears up during the Labour Day long weekend, Environment Canada said. The lowest temperature recorded on the Prairie grainbelt Friday at 0700 CDT/1200 GMT was at northern Alberta's Lake Athabasca at 9.0 Celsius (48.2 F) with most lows ranging between 16 and 20 Celsius, meteorologist Phil Wright said. Harvest was general across Alberta and into southeast Saskatchewan this week and was expected to be general within the next 10 days, provincial and private crop reports stated. Manitoba and Saskatchewan were forecast to see temperatures slightly above the normal highs of 22 to 24 Celsius and normal lows of 8.0 to 9.0 Celsius through to September 4, Wright said. Alberta was expected to be at the seasonal normal temperatures and fall below normal by September 4, he said. Edson, Peace River, Fort McMurray and other points in northern Alberta should see lows of 3.0 Celsius (37.4 F) at chest level the mornings of September 4 and 5, Wright said. Temperatures at ground level could be 2.0 to 5.0 Celsius cooler depending on cloud cover, wind speed and morning dew. "The ridge starts to move in on Wednesday but there'll be less cloud Thursday morning so it looks more likely for frost in northern Alberta to just south of Edmonton," Wright said. Southeast Saskatchewan and western Manitoba should see isolated thundershowers the evening of August 31, then on the evening of September 1 and morning of September 2, he said. "It'll predominantly be produced by convection so not a big scale general rain, they'll see a total of 15 mm (0.6 inch)," Wright said. -- Gilbert Le Gras 204 947 3548 6205 !E51 !E512 !ECAT !GCAT !GDIP Saudi Arabian Defence Minister Prince Sultan on Friday ended a landmark visit to Yemen during which both states signed an economic cooperation agreement aimed at promoting ties soured by the 1990-91 Gulf crisis. Airport officials said Prince Sultan, who has been in charge of ties with Riyadh's impoverished southern neighbour for more than two decades, flew for home at the end of a three-day visit which appeared to put an end to years of tension and mistrust. Yemen's Saba news agency reported that the two states signed on Thursday an accord aimed "at promoting bilateral cooperation in economic, commercial, investment and technical fields." Saudi Arabia cut off all financial aid to Yemen and expelled hundreds of thousands of Yemeni workers during the crisis over Iraq's occupation of Kuwait. Prince Sultan met Yemeni President Ali Abdullah Saleh on Thursday night for the third time for talks "aimed at activating and hastening work of the joint committees" set up last year to demarcate disputed land and sea borders, Saba said. Yemen and much larger Saudi Arabia had several clashes in the potentially oil and gas-rich border area before the two sides signed last year a memorandum of understanding to resolve the 60-year-old dispute. 6206 !E51 !ECAT !GCAT !GDIP A senior U.N. relief official in Baghdad said on Friday he was discussing with the Iraqis how to overcome a number of vital operational issues concerning humanitarian goods distribution in northern Iraq. "There are still serious operational problems to look at," Holdbrook Arthur director of the United Nations World Food Programme (WFP) in Iraq told Reuters. Arthur said he did not think the problems were insurmountable but they had to be addressed before food supplies from Iraq's partial oil deal with U.N. start pouring in. The Rome-based WFP sent Arthur to Iraq to administer the country's relief programme emanating from the oil-for-food scheme. Arthur was WFP's country director in Somalia, Ruwanda, Burundi and Tanzania before assuming his Iraq post early this month. Arthur said the problems include the trucking of supplies from government-controlled areas to northern Iraq and also movement of convoys within the Kurdish-held region now administered by two warring Kurdish factions. "There are differences in currency, in prices...availability of fuel. We have to collect a nominal fee for the rations...The political reality and differences between government-controlled areas and northern Iraq create serious problems," he said. The WFP official also said Iraqi and U.N. officials were still discussing in Baghdad how to resolve the issue concerning the number of monitors to be placed in the country to supervise food distribution. "I am concerned about the number of monitors but for me their significance is down the line. For me there are other issues to consider which are more important," Arthur said. "They (Iraqis) have promised to resolve any difficulty I may face," he said. Iraq's U.N. ambassador Nizar Hamdoun said in newspaper remarks on Friday that minor problems still needed to be resolved before his country's oil-for-food deal with the United Nations could be implemented. But he said he believed Iraqi crude would reach international markets in a short time. He gave no specific date. Iraq and the U.N. agreed in May on how to apply a 1995 Security Council offer for Baghdad to export limited quantities of its blocked oil exports to pay for urgent humanitarian needs. Differences on procedural issues have delayed implementation of the plan, allowing exports worth $2 billion over six months of which $1.13 billion will remain at Iraq's disposal after paying 30 per cent for the 1991 Gulf War reparations and other U.N. costs. 6207 !E51 !E512 !ECAT !GCAT !GDIP Iraq's U.N. ambassador Nizar Hamdoun said on Friday that minor problems still needed to be resolved before his country's oil-for-food deal with the United Nations could be implemented. Hamdoun also said that certain parties were seeking to delay implementation of the plan, but Baghdad was determined to carry it out as it believed it would be the prelude to total removal of U.N. sanctions, imposed after Iraq invaded Kuwait in 1990. "The fixing of a time limit concerning outstanding minor points is insignificant against what has been achieved in this field," he said in an interview with the official al-Iraq newspaper. He added: "We have to remember that there are certain circles which through constant procrastination are trying to delay." He did not elaborate. Iraq and the U.N. agreed in May on how to apply a 1995 Security Council offer for Baghdad to export limited quantities of its blocked oil exports to pay for urgent humanitarian needs. Differences on procedural issues have delayed implementation of the plan, allowing exports worth $2 billion over six months of which $1.13 billion will remain at Iraq's disposal after paying 30 per cent for the 1991 Gulf War reparations and other U.N. costs. A U.N. relief official in Baghdad said discussions with the Iraqi side were still continuing to try to resolve issues pertaining to the number of international monitors to be placed in Iraq to supervise distribution of food. Holdbrook Arthur, director of the United Nations World Food Programme (WFP) in Iraq, said that apart from monitors he needed to solve "serious operational problems" related to the transport and handing out of food rations to rebel Kurds in northern Iraq. "I am concerned about the number of monitors but for me their significance is down the line. For me there are other issues to consider which are more important," Arthur told Reuters. He said the difficulties were not insurmountable but would hamper smooth distribution to the Iraqi Kurds once the humanitarian supplies started pouring in. The Rome-based WFP sent Arthur to Iraq to administer the relief programme emanating from the oil-for-food scheme. Arthur was WFP's country director in Somalia, Rwanda, Burundi and Tanzania before assuming his Iraq post early this month. He said he met senior Iraqi officials on Thursday and would travel to northern Iraq on Saturday to report on the problems. "They (Iraqis) have promised to resolve any difficulty I may face," he said. Hamdoun said he believed Iraqi crude would reach international markets in a short time. He gave no specific date. "The implementation of the memorandum of understanding will constitute an important opening...for the total lifting of the economic embargo," Hamdoun said. 6208 !GCAT !GPOL !GVIO Israel thwarted Yasser Arafat's call for a mass prayer protest at Jerusalem's al-Aqsa mosque on Friday by ringing the city with police and roadblocks. Paramilitary police turned back worshippers at checkpoints along the border between Arab East Jerusalem and the West Bank. Barely 20,000 Moslems made it to the mosque complex inside Jerusalem's walled Old City, according to Palestinians. Israeli police put the number at 8,000. "The presence today was less than normal weeks because of the unjust Israeli measures of placing roadblocks, and terrorising people, by deploying large numbers of soldiers," Hasan Tahboub, Minister of Islamic Affairs in the Palestinian self-rule Authority, told Reuters. The government brought extra police into the city fearing clashes after Arafat, president of the Authority, called on Palestinians to flock to Jerusalem for traditional Friday prayers to protest against Israeli policy on Jerusalem and Jewish settlement. The prayers passed off peacefully. Tahboub and Israeli authorities had expected 100,000 Arabs to heed the call. Arafat himself attended prayers in the northern West Bank town of Nablus. He launched the protest together with a general strike on Thursday while accusing the new right-wing government of Prime Minister Benjamin Netanyahu of refusing to implement the Oslo self-rule accord signed by the previous centre-left Labour government. Israel drew Palestinian anger this week by demolishing an Arab community centre in East Jerusalem which city officials said was built illegally. It also disclosed plans to expand West Bank settlements. Arafat was also angered by Netanyahu's refusal so far to meet him and to redeploy Israeli troops in Hebron, the only West Bank town still under occupation. Soldiers placed roadblocks at the Gush Etzion Jewish settlements near Hebron to prevent Moslems travelling to Jerusalem on Friday. Hebronites who skirted that checkpoint were held up at another outside Bethlehem. "I want to go through in solidarity with Arafat," said Mohammad Kaharan, one of groups of middle-aged and old men arguing in vain with soldiers in the heat haze of the Bethlehem road. Young men did not even try to cross as police routinely turn back teenagers and men in their 20s since suicide attacks on Israelis began in 1994. Arafat has cracked down on Moslem opponents of his 1993 peace deal with Israel since the last wave of suicide bombings six months ago. He feels angry and frustrated that this and other moves demanded by Israel have been ignored by Netanyahu, his aides say. Arafat aide Nabil Abu Rdainah said talks overnight between Netanyahu adviser Dore Gold and top PLO official Mahmoud Abbas, also known as Abu Mazen, made no progress on any issue. Gold and Abu Mazen met in Tel Aviv hours after the Palestinians ended the general strike, the first in the West Bank and Gaza in two years. "The Israelis are still delaying and dragging their feet on all issues," Abu Rdainah told Reuters. "The peace process is still paralysed, the resumption of negotiations in practical terms is frozen and the contacts until now have not led to any results at all," Abu Rdainah said. Netanyahu's office said it would not comment on the talks which followed a first meeting in Jerusalem between the chairmen of the Israel-Palestinian Steering Committee which oversees implentation of self-rule agreements. The Steering Committee will begin next week to convene on a regular basis, Israeli chairman Dan Shomron said. 6209 !GCAT !GVIO The Israeli army said on Friday that an Israeli soldier was killed on Thursday in a clash with guerrillas in Israel's occupation zone in south Lebanon. "An army force on operations encountered a gang of terrorists. In the exchange of fire...an Israeli soldier was killed. During the clash Hizbollah terrorists fired mortars at an army position in the western sector of the security zone and at a village in the zone," an army statement said. No Israeli was wounded in the clash, the army said. A military official said two Lebanese civilians were wounded in the village. "From Hizbollah fire directed at Shihin village, two civilians from south Lebanon were wounded. The Israeli army returned fire toward the sources. The shooting into a civilian village is another violation of the understandings," the official said. U.S.-brokered understandings that ended an Israeli blitz on south Lebanon against Hizbollah guerrillas in April forbid either side from hitting civilians. Israel killed more than 200 Lebanese, most civilians, in the blitz. Guerrilla rocket fire on northern Israel wounded some 50 Israelis. Pro-Israeli militia sources in Lebanon had reported on Thursday that an Israeli soldier was killed and another was wounded when Moslem guerrillas ambushed an Israeli patrol close to the border in south Lebanon. The sources with the South Lebanon Army said the ambush took place near an Israeli strongpoint at Blat, one km (half a mile) north of the Israeli border. In Beirut, the pro-Iranian Hizbollah (Party of God) claimed responsibility for the attack, saying its guerrillas ambushed the patrol with machineguns and rockets. 6210 !GCAT !GPOL Israel and the Palestinians have failed in fresh high-level contacts to make progress on any issue, an aide to Palestinian President Yasser Arafat said on Friday. In the latest effort to defuse tensions, Prime Minister Benjamin Netanyahu's representative in back-door talks, aide Dore Gold, met senior PLO official Mahmoud Abbas, better known as Abu Mazen, for five hours in Tel Aviv on Thursday. "The Israelis are still delaying and dragging their feet on all issues," Arafat aide Nabil Abu Rdainah told Reuters after the session. "The peace process is still paralysed, the resumption of negotiations in practical terms is frozen and the contacts until now have not led to any results at all," Abu Rdainah said. Tensions were high in Jerusalem on Friday as Israel waited to see how many Palestinians would heed Arafat's call to flock to prayers at the Al-Aqsa mosque, a shrine symbolising the PLO's claim -- rejected by Israel -- to Arab East Jerusalem. Netanyahu's office said it would not comment on the talks which followed a first meeting in Jerusalem between the chairmen of the Israel-Palestinian Steering Committee which oversees implentation of self-rule agreements. The Steering Committee will begin next week to convene on a regular basis, Israeli chairman Dan Shomron said. Netanyahu's director of communications, David Bar-Illan, said the government decided to assign "a team" made up of the prime minister, Defence Minister Yitzhak Mordechai and Foreign Minister David Levy to direct strategy for the negotiations. The talks, Bar-Illan said, would cover "all outstanding issues with the Palestinian Authority including the matter of Hebron". He spoke as the cabinet held its weekly Friday meeting. Palestinians have been pressing Israel to carry out a troop redeployment in the West Bank city of Hebron, calling the partial pullout agreed by the former Labour government a litmus test of Netanyahu's peaceful intentions. Asked about the possibility of a Netanyahu-Arafat meeting, Bar-Illan said no decision had been taken. "Obviously, if there's calm and everything goes smoothly, I assume there will be a meeting in the very near future," he said. Israel Television reported on Sunday that Netanyahu would meet Arafat in two weeks. Gold and Abu Mazen met hours after the Palestinans ended a general strike, the first in the West Bank and Gaza in two years, to protest against Israel's decision to expand Jewish settlements and its policy on Jerusalem. "The meeting was a failure," another PLO official told Reuters. Abu Rdainah said Egyptian Foreign Minister Amr Moussa had telephoned Arafat early on Friday to discuss ways to push the peace process forward. Arafat had also appealed to Jordan's King Hussein to intervene with Netanyahu, the aide said. 6211 !GCAT !GDIP !GVIO As warring Kurdish factions from Iraq met for U.S.-brokered peace talks in London on Friday, the Baghdad government kept up a barrage of criticism of Washington, telling the United States not to meddle in Iraqi affairs. Iraq's fury is also directed against its eastern neighbour Iran, with which it fought a ruinous war from 1980 to 1988, as well as Kurdish rebel leader Jalal Talabani of the Patriotic Union of Kurdistan (PUK). Since the eruption of the latest round of inter-Kurdish fighting in northern Iraq in August 15, Baghdad has issued several statements and scores of newspaper editorials and commentaries lambasting Washington, Iran and Talabani. The official newspaper Thawra said on Friday: "The covetous intentions of the regime in Tehran...are in accord...with the aggressive targets of America against Iraq and its people." Iraq's Deputy Prime Minister Tareq Aziz, Foreign Minister Mohammed Saeed al-Sahaf and Information Minister Abd-al-Ghani Abd-al-Ghafur all issued strongly worded statements this week warning Tehran and Washington to stop interfering in Iraqi Kurdish affairs and condemning Talabani as a traitor and agent. Massoud Barzani of the Kurdistan Democratic Party (KDP) is Talabani's main rival. The two have divided northern Iraq into separate spheres of infuence. Barzani accuses Talabani of getting direct military support from Iran. Talbani charges that Barzani's KDP is backed by the central government in Baghdad. Diplomats in Baghdad said Barzani was more likely to accept a settlement with Baghdad than his rival who was closely liaising with other Iraqi opposition groups to try to overthrow the government of President Saddam Hussein. One diplomat said Talabani was coordinating at both political and military levels with the Iran-based Supreme Council of Islamic Revolution in Iraq (SCIRI) which had deployed at least one of its brigades in territory under his control. "SCIRI lost a foothold in southern Iraq where the Iraqi armed forces and government-backed militias now almost have complete control," said the the diplomat. "In the U.S.-protected north SCIRI finds more freedom to move." This month, and under the eyes of Talabani's guerrillas, a small Iranian force penetrated into northern Iraq in pursuit of Iranian Kurdish rebels. There are no independent reports to confirm the alleged Iranian military support for Talabani, but Iran is the main source of trade with his enclave, which borders Iran. The combined forces of both the KDP and PUK are no match for Iraqi troops, kept at bay so far by U.S.-led air power which has been protecting the Kurds since shortly after the 1991 Gulf War. The U.S. said on Thursday it was watching movements of Iraqi troops near the Kurdish areas and would take a serious view of any aggressive moves. 6212 !GCAT !GDIP !GPOL Syria on Friday condemned Israel's settlement policy and said Prime Minister Benjamin Netanyahu was preparing for war with Arabs. "Practices of the Israeli government, especially its settlement activities, came to confirm that dealing with this government inflicts the biggest harm on the Arab cause," state-run Damascus Radio said in a commentary. "When this government insists on stabbing the peace process and tearing it apart, this means that it is preparing for war," the radio said. Palestinian President Yasser Arafat described this week the decision to expand settlements in the West Bank as a declaration of war. Palestinians in the West Bank and Gaza observed a strike on Thursday to protest against the Israeli move. The radio urged Arabs to unify their ranks to thwart the policies of the right-wing Israeli government. "Israel could not confront a united Arab stand or usurp their rights because the Arab rights could be regained when they achieve unity and solidarity," Damascus radio said. It welcomed the international criticism of Israel's settlement policies but called for practical steps to force the Israeli government to abandon this policy. "It is important to translate the criticism into pressuring action to prevent Israel from undermining the big international efforts aimed at making the peace process achieve success," the radio said. Syria and Arabs have been dismayed by Netanyahu's refusal to trade the occupied Arab lands for peace, his support for the expansion of settlements and his insistance on Jerusalem as a unifed capital for Israel. Syria has held sporadic peace talks with Israel since 1991 without achieving a breakthrough. 6213 !GCAT !GDIP !GREL Iranian President Akbar Hashemi Rafsanjani said in Friday Moslem prayers that God had exposed the United States as an "ugly monster" trying to devour Iran. "God has bestowed his grace on us by making peoples of the world aware that America is resorting to bullying...and is an ugly-faced monster trying to devour an oppressed nation," Rafsanjani said in the sermon broadcast on Tehran radio. "This awareness has led to a wave of opposition in the world (against U.S. sanctions), not because of their support for us but due to rejection of bullying," Rafsanjani, a Shi'ite Moslem cleric, told worshippers gathered at Tehran University. He was referring to criticism by the European Union and a number of world states of the latest U.S. unilateral sanctions which penalise non-U.S. firms that invest $40 million or more a year in the oil and gas industries of Iran or Libya. "God has thus exposed America and made its friends say to it that it was acting like a bully...They are defending their own rights and we are benefiting from it," Rafsanjani said. Rafsanjani rejected U.S. charges that Iran violates human rights, sponsors terrorism and is seeking to develop nuclear arms, saying these were "beautiful words which are used to hide sinister intentions". Tehran says Washington is bent on overthrowing its Islamic goverment because of its opposition to U.S. hegemony. 6214 !E51 !E512 !ECAT !GCAT !GDIP Smuggling of Iraqi-origin gas oil through the Gulf has declined in recent months but ships trying to get dates out of Iraq and spare parts to the Arab state have been stopped, Western naval sources said on Friday. "There is not a whole lot of gas oil getting out in the past two months" compared to earlier this year, one naval officer told Reuters. The smuggling of gas oil in violation of United Nations sanctions imposed against Iraq in 1990 for invading Kuwait was seen rising in the November-June period. Western patrols diverted one sanctions-busting ship carrying dates or gas oil from Iraq every three to four days on average in the first five months of 1995, the U.S. Navy earlier said. The naval sources said that suspected violators were still being stopped but the cargoes were mostly Iraqi dates. Inbound vessels were also caught with spare parts for vehicles. Iran has denied a U.S. claim on Thursday that Tehran was involved in an Iraqi scheme to sell oil in violation of the sanctions. A U.S. official at the United Nations said that Iranian Revolutionary Guard forces were collecting protection money from shippers, allowing the illegal movement of Iraqi gas oil through the Gulf. He said the allegations were based on statistical data, confirmed by personal interviews with those involved, and other physical proof. British naval Commander Andrew Moll was quoted earlier this month as saying that violations in the Gulf of the sanctions had dropped since Iraq signed a deal with the United Nations in May for the sale of $2 billion worth of oil over six months to finance certain imports and make Gulf crisis-related payments. Iraq said on Friday that minor problems still needed to be resolved before the U.N. deal could be implemented. 6215 !GCAT !GPOL !GVOTE A private Lebanese watchdog group reported on Friday a "huge" number of violations in the first two rounds of Lebanon's parliamentary elections and said they had distorted the results. The Lebanese Association for the Democracy of Elections (LADE), the first independent group to monitor a Lebanese election, warned candidates to beware of more abuses in the next three rounds. "We denounce and reject the huge number of constitutional, legal, administrative, media and political violations which occurred in the first two rounds of the elections," LADE secretary general Paul Salem told a news conference. Voting on the past two Sundays in Mount Lebanon, the Christian heartland, and north Lebanon has taken place amid allegations of intimidation, bribery and vote-rigging by pro-government forces. "Violations and interventions have altered the results of the elections and have led to the deformation of free will of the Lebanese voter," Salem said. "We call on all candidates in the three coming rounds of voting to prepare their electoral teams efficiently and beware of a variety of pressures and breaches they might encounter," he added. Salem said it was unacceptable that Interior Minister Michel al-Murr should have run in the election while he was responsible for organising it. Murr won the biggest vote in the North Metn district of Mount Lebanon where allegations of intimidation and abuses were greatest. Salem said uncontrolled vote-buying and illegal use of state and privately owned television and radio to support pro-government candidates had taken place before the first round and were continuing in the run-up to Sunday's vote in Beirut. Najah Wakim, a firebrand opposition parliamentray deputy running in Beirut, simultaneously accused the government of preparing a wide-scale fraud in the capital in favour of Prime Minister Rafik al-Hariri. "A big number of identity cards with no names and photos have been issued for use by Hariri supporters to vote on behalf of the dead and emigres," Wakim told a separate news conference. He held up a cheque which he said had been given to an official in a government ministry as a bribe to facilitate fraud. Several opposition figures defeated in the first two rounds have vowed to appeal to Lebanon's constitutional court. Mikhael al-Daher, an opposition Christian deputy defeated in north Lebanon, told another news conference he was collecting evidence for an appeal. He said "an influential regional party" -- a codeword for Syria which has 35,000 troops in Lebanon -- had issued a ban on his re-election at the request of President Elias Hrawi. Daher was one of a handful of deputies who last year opposed a constitutional amendment that extended Hrawi's term for three years and political analysts say Hrawi has not forgiven him. Daher said methods used against him and his supporters in the northern region of Akkar ranged between "verbal threats and detention for dozens of hours in filthy cells". "Hundreds of key local electoral figures were summoned daily (before the vote)...and Akkar was overwhelmed by terrorism and fear," Daher said. Three other defeated Christian opposition candidates, including former deputy Albert Mokheiber, an anti-Syrian nationalist, are also preparing an appeal. 6216 !GCAT !GCRIM !GVIO Police have detained 26 suspected members of Egypt's largest militant group al-Gama'a al-Islamiya (Islamic Group), government newspapers reported on Friday. They said police arrested the militants in the eastern Sharqiyah province after capturing their leader Rami al-Saadani in a satellite city outside Cairo. Al-Akhbar newspapers said the men had been plotting against "strategic institutions and prominent individuals" but gave no other details. The newspapers said the men were being interrogated. State security officials were not immediately available for comment. More than 960 people have been killed in the armed struggle the Gama'a launched in 1992 to topple President Hosni Mubarak's government and establish a purist Islamic state in its place 6217 !GCAT These are some of the leading stories in the official Iraqi press on Friday. Reuters has not verified these stories and does not vouch for their accuracy. THAWRA - Iraq takes part in Arab maritime transport meeting in Bahrain. - Tunisian transport minister arrives in Baghdad. - Iraqi-Turkish joint economic committee to meet soon. - Iraq to take part in the World Food Programme summit meeting in Rome. - Commentary accuses U.S. of turning blind eye to Iran's military intervention in northern Iraq. AL-IRAQ - Guerrillas of (Kurdish) rebel leader Jalal Talabani carry out terrorist programme in northern Iraq. - Nizar Hamdoun, Iraq's U.N. ambassador, says small problems hamper implementation of oil deal with U.N. - Iraqi POWs fleeing Iran speak of ordeal at Iranian prisoner camps. - Minister of industry and minerals receives Malysian ambassador. 6218 !GCAT !GPOL Kamil Jamil didn't have a prayer. An Israeli roadblock stopped the 38-year-old Palestinian from answering Yasser Arafat's call to worship at Jerusalem's al-Aqsa mosque on Friday. "Go home. There are no prayers today," an Israeli soldier yelled at Jamil in Hebrew. Palestinian President Arafat, attacking Israel's decision to expand Jewish settlements and its policy on Jerusalem, went before the Palestinian legislature on Wednesday to urge the two million Arabs in the West Bank and Gaza to go to the holy city. Pilgrims stood little chance of making progress. Palestinians have been banned by Israel from travelling from the West Bank to Jerusalem since suicide bombings by Moslem militants killed 59 people in the Jewish state in February and March. And Israeli checkpoints have circled Jerusalem since 1993, a concrete and constant reminder of Israel's hold on a city it considers its eternal capital. The PLO wants Arab East Jerusalem as the capital of a future Palestinian state. Only a few Palestinians trickled to the roadblocks. They were immediately turned back. "I am heeding Abu Ammar's (Arafat's) call to pray at al-Aqsa and I came. It is our duty towards al-Aqsa to come and pray," Jamil said. A tourist from Jordan was also told by Israeli soldiers at the al-Ram checkpoint that he could not enter Jerusalem. "We have a peace treaty with them and we let them go wherever they want when they come to Jordan," said the tourist, Khaled Hijazi, 37. "I feel terrible. I am entitled to see Jerusalem," he said. Some Palestinians took to back roads, only to run into waiting Israeli security forces. "The Israelis have no right to prevent us from going to pray. What kind of peace is this that prevents us from reaching our holy places?" asked Mustafa Hoshiyeh, a 27-year-old West Bank labourer turned around by a police patrol on a back road. "Abu Ammar (Arafat) is right. We have signed a peace treaty with the Israelis but on the ground, we see that nothing has changed," said 20-year-old Ali Ahmed from Qalandia refugee camp. 6219 !GCAT !GDIP !GPOL King Hussein of Jordan has urged Israeli Prime Minister Benjamin Netanyahu to implement all accords with the Palestinians to overcome a growing crisis between the two sides, the official Petra news agency said. It said the king telephoned Netanyahu on Thursday night after Jordanian Prime Minister Abdul-Karim al-Kabariti met Palestinian President Yasser Arafat in the West Bank town of Ramallah. King Hussein "stressed the need to implement the agreements signed between Israel and the Palestinian side and to work to prevent a deterioration in the situation, to confront all the difficulties which confront the peace process and to emerge from the current crisis", the agency said. It quoted Netanyahu as saying in reply his government was committed to implementing the self-rule accords which the previous Labour government signed with the Palestinians. Netanyahu's government, which took office in June, has lifted a freeze on Jewish settlement building in the West Bank and Gaza Strip imposed by the previous government in 1992. Its announcement on Tuesday of plans to build a new neighbourhood on a West Bank settlement sparked accusations from Arafat that the Jewish state was declaring war on Palestinians. Kabariti, visiting the West Bank for the first time as prime minister, said Israeli attempts to talk peace while building new settlements were futile. "We informed the president (Arafat) that we do not accept any analysis that calls for continuing settlement expansion and at the same time to say that the peace process is all right," he said. Israel rushed police reinforcements to Jerusalem and tightened its closure of the West Bank in response to Arafat's call for Palestinians to converge on the holy city for Moslem prayers on Friday. 6220 !GCAT !GWEA Powerful Hurricane Edouard and weaker sister storm Fran churned across the open waters of the Atlantic on Thursday and could pose a threat to the U.S. East Coast during the Labor Day holiday weekend, forecasters said. The National Hurricane Center was tracking a series of tropical weather systems that stretched across the Atlantic Ocean from off the coast of Africa almost to the Bahamas. Forecasters urged residents along much of the U.S. eastern seaboard to stay tuned to weather forecasts during the three- day holiday weekend as climate conditions steering Edouard shifted slightly, increasing the storm's threat to coastal states from Georgia northward. Riptides and five- to six-foot (1.5- to 1.8-metres) waves were reported along North Carolina beaches, and swells were expected to get stronger on Friday, forecasters said. Edouard continued to strengthen, with maximum sustained winds rising to 140 mph (225 kmh), and made its predicted turn to the northwest on Thursday. But forecasters said computer models indicated a high pressure ridge could force the storm toward the mid-Atlantic coast in three days. "It looks to me like the biggest risk is the Carolinas ... particularly because it's the Labor Day weekend," National Hurricane Center forecaster Jerry Jarrell said. At 11 p.m. EDT (0300 GMT Friday) Edouard was 740 miles (1,190 km) south-southeast of Cape Hatteras, North Carolina, at latitude 25.9 north and longitude 69.7 west. It slowed to a north-northwest track at 10 mph (16 kmh). In coastal areas of North Carolina battered by Hurricane Bertha in mid-July, residents and business owners took a wait- and-see attitude. Motel owners in Hatteras Village said they had had few cancellations as people seemed to be holding to their Labor Day weekend plans, at least for the moment. "I think people are waiting to see what it's going to do," Katie Oden, owner of the Sea Gull motel, said. "It might hurt us even if it does turn, but you got to take it as it comes." Forecasters discontinued hurricane watches for the Leeward Islands as Hurricane Fran remained weak and was expected to pass north of the islands of the northeastern Caribbean. At 11 p.m. EDT (0300 GMT Friday), Fran was located at latitude 19.5 north and longitude 59.2 west and moving west-northwest at 13 mph (21 kmh), or 240 miles east (385 km) of Antigua. The storm was a minimal hurricane, with top winds of 75 mph (120 kmh), and forecasters said little change in strength was expected in the next day. Although Fran was swirling north of the Caribbean's Leeward Islands, the hurricane could threaten the U.S. coastline later in the weekend, hurricane forecasters said. NASA said on Thursday it was prepared to haul shuttle Atlantis back to its hangar if Edouard or Fran threatened Florida's Kennedy Space Center. Tropical Storm Gustav was lined up behind Fran, at latitude 15.7 north and longitude 38.5 west, about 875 miles (1,400 km) west-southwest of the Cape Verde Islands. It had maximum winds of 45 mph (75 kmh) and was on a northwesterly course that was expected to keep it safely out at sea. "It's the busiest time of the year for hurricanes," National Hurricane Center forecaster Bill Fredericks said. "The peak of the season is always around the Labor Day holiday." 6221 !GCAT !GDIP !GPOL !GVOTE Republican presidential nominee Bob Dole on Thursday urged President Bill Clinton to postpone the presidential and parliamentary elections in Bosnia and Herzegovina next month, calling them a sham. "I believe that putting American prestige behind such a process only serves to undermine our leadership and makes a mockery of our commitment to democratic principles, while making it more difficult for U.S. troops in Bosnia to accomplish their goals," Dole wrote Clinton in a letter released by his campaign. The upcoming election in Bosnia is scheduled for Sept. 14. Dole cited "widespread intimidation of opposition leaders" as one reason the U.S. government should not be backing the elections. He said other problems included refugees not being able to return to their homes. "These elections are a sham in the making. They should be postponed until conditions exist that will ensure that the voting will be free and fair," the Dole letter said. Also on Thursday, Dole promised that, if elected, his administration would usher in a return to the tax-cutting era of the Reagan administration. "The Reagan tax cuts were like a super-charger for the economy," Dole told a crowd of several thousand at a Spanish-style old mission building here. Dole has been campaigning on a plank to cut taxes 15 percent. The mention of former President Ronald Reagan brought a round of cheers from the California audience. "We believe you can spend your own money more wisely than any government ever will. We can balance the budget and cut taxes. It can be done," Dole said. Asked about the surprise resignation of Clinton's high-level strategist Dick Morris, Dole, speaking in Santa Barbara, said: "Morris has been trying to make President Clinton a Republican, now maybe he'll revert to the liberal Democrat that he (Clinton) really is." Dole later told ABC's Barbara Walters the resignation could "change the direction of the campaign," noting that liberals had not been too happy with Morris's assessment that Clinton had to move to the centre to win the election. The Morris resignation followed a published report that Morris had spent time with a prostitute whom he allowed to listen in when Morris spoke on the telephone with the president. When speaking privately to a campaign worker about Morris, apparently not realising a radio microphone nearby was live, Dole said: "It says something about who you surround yourself with, doesn't it?" But publicly, Dole aides went to considerable efforts to not be seen taking advantage of the Morris story, which is sure to refocus attention on Clinton's character. "He (Dole) takes the long view of this sort of stuff and I think it's fair to say he feels some degree of sympathy for someone to be thrust into the national spotlight with this sort of scandal," said Dole's press secretary Nelson Warfield. 6222 !GCAT !GPOL !GVOTE President Bill Clinton, his hour of triumph marred by the bombshell resignation of a top aide in a sex scandal, launched his bid for a second term on Thursday with a pledge to lead America boldly into the 21st century. "Tonight let us resolve to build that bridge to the 21st century, to meet our challenges, protect our basic values and prepare our people for the future," Clinton said in a speech prepared for his acceptance of the Democratic nomination. Implying he would be both a wiser and fairer leader than Republican challenger Bob Dole, and one who would replace irresponsible tax-cutting promises with sound moves to spur economic growth, he added: "We must give Americans the tools they need to make the most of their God-given potential ... and we must build a strong united American community." Clinton was preceded on the podium by Vice President Al Gore, who accepted the nomination for the vice presidency in a brief speech. Gore had spoken at length on Wednesday night and made only a brief address in which he appealed "to members of the Republican Party, the Reform Party (of Ross Perot) and independents to join us in this cause which claims our hearts." He called for a civil presidential campaign. Clinton could only hope his national television audience would focus on his visionary rhetoric rather than the sudden distraction of a sex scandal that forced the abrupt resignation of an aide who helped craft his very words: top campaign strategist Dick Morris. A clearly stunned White House announced only hours before the prime-time television address that Morris had resigned late on Wednesday night, shortly before a report in the New York Post that he had had a long affair with a $200-an-hour Washington call-girl. The Post picked up the report from the tabloid Star magazine. Among the things Morris had reportedly done to impress the woman, the report said, was to let her eavesdrop on a phone chat with the president himself and take advance peeks at the speeches first lady Hillary Rodham Clinton and Vice President Al Gore delivered to the convention earlier this week. Clinton issued a terse statement saying he valued Morris as a friend and adviser -- many credit him with devising Clinton's new "family values" campaign strategy -- and most analysts said they doubted it would affect the outcome of an election in which the president is heavily favoured over Dole. Still, seldom has any U.S. presidential nominee had to deliver a televised acceptance speech under circumstances as strained as these -- and especially for Clinton, a man dogged for years by character questions including allegations of sexual philandering. Senator Dianne Feinstein, a liberal California Democrat and Clinton backer, called the Morris affair "a big bump" for the president's campaign. "It comes at the worst possible time on one of the biggest days for the president," Feinstein said ruefully. Clinton could do nothing but carry on presenting the visionary message, that has so far put him well out front of Dole in opinion polls, and hope the public would pay heed. "Our strategy (for the 21st century) is simple but profound: Opportunity for all, responsibility for all, a strong American community where everyone has a place and plays a role," he said. He boasted he had changed "the old politics of Washington," adding, "For too often leaders ask, 'Who's to blame?' We ask, 'What are we going to do?'" He asserted that he and the Democrats could promote prosperity without harming social programmes they claim Dole and the Republicans would slash. "Tonight let us proclaim to the American people, we will balance the budget, and let us also proclaim we will do it in a way that preserves Medicare, Medicaid, education and the environment," he said. "As long as I am president, I will never allow cuts that devastate education for our children, pollute our environment, end the guarantee of health care under Medicaid, or violate our duty to our parents under Medicare. Never." Clinton began his big day hoping visionary promises like that would be what America discussed round the breakfast table on Friday. Instead, it seemed the Republicans and the anti-Clinton public had another "character" issue to seize upon related to the 50-year-old president and his choice of controversial aides. Speaking in Santa Barbara, California, Dole did not directly refer to the sexual scandal but said the departure of Morris, who had advised Clinton to chart a more centrist political course, would make the president drift back to the left. "Morris has been trying to make President Clinton a Republican, now maybe he'll revert to the liberal Democrat that he really is," Dole told reporters. In Chicago, the White House entourage issued a terse statement on Clinton's behalf saying: "Dick Morris is my friend, and he is a superb political strategist. "I am and always will be grateful for the great contributions he has made to my campaigns and for the invaluable work he has done for me over the last two years." However the affair plays out, Clinton will hit the road Friday for a bus tour across several states in his fight to become the first Democratic incumbent re-elected to a second term since the days of Franklin D. Roosevelt. 6223 !GCAT !GCRIM Oklahoma City bombing suspect Timothy McVeigh's bid to clear his name in media interviews came under fire on Thursday from government prosecutors and even his co-defendant and former Army buddy, Terry Nichols. McVeigh last week asked for court permission to give eight jailhouse interviews to media organisations of his choice to counter the public perception that he is a "demon." But lawyers for the prosecution and for Nichols responded on Thursday by saying McVeigh was trying to manipulate the media and influence potential jurors in his trial. Although he did not specifically ask U.S. District Judge Richard Matsch to bar McVeigh from holding interviews, prosecution attorney Sean Connelly said McVeigh's plan to do so was "an extraordinary attempt to manipulate the news media to produce a favourable impact on the potential jury pool." Connelly said any interviews would hinder an impartial trial and that McVeigh's court-appointed lawyers had no authority to make ordinary citizens foot the bill for their public relations efforts to improve McVeigh's image. Attorneys for Nichols said McVeigh's comments in any interview might hurt their client. "To the extent that Mr. McVeigh seeks to influence the jury pool by putting his scripted production before an eager media, his efforts prejudice Mr. Nichols," defence lawyer Reid Neureiter said in a written argument to the court. "A media blitz of this magnitude by defendant Mr. McVeigh might force Mr. Nichols (however regrettably) to make an appropriate media response," Neureiter said. McVeigh's own lawyers had said the interviews were necessary because "the government and the press has succeeded in convincing the public that not only is Timothy McVeigh guilty, but he deserves to die." McVeigh and Nichols are the only two people accused of planting the bomb which ripped apart the Alfred P. Murrah federal building in downtown Oklahoma City on April 19, 1995, which claimed at least 168 lives. Connelly said in his written response to McVeigh's request for permission to hold interviews that "the best way to ensure fairness is for the case to proceed to trial as quickly as possible, not to attempt to increase the volume of publicity." He said the prosecution team will ask Matsch "to set the earliest possible trial date" after he decides whether Nichols and McVeigh should be tried separately, as they requested. McVeigh granted four interviews before authorities at the prison where he is being held told his lawyers to get the judge's permission for future interviews. 6224 !C12 !C18 !C181 !CCAT !GCAT !GCRIM Flamboyant Italian businessman Giancarlo Parretti, former owner of Metro Goldwyn Mayer, has rejoined the fight to own the venerable Hollywood film studio with new allegations of bribery and fraud. Citing recent evidence, Parretti's attorneys Thursday asked the Delaware Chancery Court to reopen the 1991 case in which the legally troubled financier lost control of MGM. "The ultimate purpose of this is to get control of MGM," Parretti's Beverly Hills, Calif.-based lawyer, Jay Coggan, said in an interview. "That's all the court took away from him, and in theory that's what the court can give back." In the 1991 trial in Delaware, where MGM is incorporated, the bank's attorneys alleged that Parretti filed a false document. A mistrial was declared and the French banking conglomerate Credit Lyonnais took control after being the only bidder in a subsequent auction for the studio. Coggan said in the past two weeks, he has obtained an affidavit from Parretti's partner, Florio Fiorini, in which Fiorini claims Credit Lyonnais bribed him to lie about financial arrangements surrounding Parretti's $1.3 billion acquisition of MGM in 1990. Coggan also said he has affidavits from independent parties supporting Fiorini's assertion that he lied on the witness stand. Coggan said the bank also withheld information that it was trying to find other buyers for the studio both before and after Parretti took control. Officials with Paris-based Credit Lyonnais and Los Angeles-based MGM were not immediately available for comment. Parretti has legal troubles of his own, including eight counts of fraud, theft and embezzlement leveled by the French government stemming from his days at MGM. Last October, the former movie mogul was arrested after voluntarily coming to the United States from his home in Rome to face perjury charges in Delaware resulting from the 1991 trial. After pleading innocent, Parretti flew to Los Angeles to pursue a $3.9 million claim against Credit Lyonnais. He was arrested while giving a deposition in the civil lawsuit at his lawyer's office and held for extradition to France. Last May, a Los Angeles judge ordered him extradited to France. However, Parretti is free and living in Los Angeles while his lawyers appeal the extradition. After a lengthy bidding process, MGM was sold in July by a Credit Lyonnais affiliate for $1.3 billion. The acquisition team was lead by MGM Chairman Frank Mancuso and backed by billionaire Kirk Kerkorian's Tracinda Corp. and Australian media conglomerate Seven Network Ltd.. Kerkorian also owns a controlling stake in the MGM Grand hotel and casino in Las Vegas. 6225 !GCAT !GCRIM !GHEA The widower of Judith Curren, the Massachusetts woman whose assisted suicide by Dr. Jack Kevorkian was ruled a homicide, was fired from his job at a local hospital, a hospital official said Friday. Dr. Franklin Curren, a psychiatrist who earlier told reporters he was on a bereavement leave, was given a 60-day notice of termination without cause from Pembroke Hospital, said Ray Robinson, chief operating officer at the hospital. "The reasons are personal," Robinson said. "We would prefer not to get into the specifics." Curren, who was questioned by the state medical board after his wife's suicide, worked as a staff psychiatrist at the hospital for a year. "Obviously, they don't want to deal with this," he told the Boston Herald newspaper. "I'm not going to argue about it. Everything about my future is up in the air." Kevorkian, who has helped 38 people die since 1990, has been roundly criticised for his role in the Aug. 15 death of Judith Curren. The 42-year old nurse suffered from chronic fatique syndrome and other ailments that left her incapacitated and in constant pain, according to Kevorkian. The Oakland County medical examiner said Curren, the mother of two children, was overweight but had no terminal disease. On Thursday, a spokesman for the coroner said Curren died from an intravenous injection of a poisonous substance, making her death a homicide. Dr. Curren could not immediately be reached for comment. 6226 !GCAT !GPOL !GVOTE A poll released on Friday but conducted before a reported sex scandal in Bill Clinton's inner circle showed the president would beat Bob Dole by 13 points if the election were held now. The CNN/USA Today poll of 622 registered voters gave the Democratic president and his running-mate Al Gore 51 percent of the vote, compared with 38 percent for Republicans Dole and vice presidential nominee Jack Kemp. Billionaire Ross Perot got 7 percent, with 4 percent undecided, according to the poll conducted Aug. 28-29, before reports that Clinton political strategist Dick Morris had a long-running relationship with a self-described prostitute. The poll, conducted by the Gallup organisation, was completed before Clinton accepted his party's nomination at the Democratic Convention in Chicago late on Thursday. The poll, which had a margin of error of plus or minus 4 percentage points, showed Clinton had a 17-point lead in a two-way race with Dole, with 57 percent of the vote compared with 40 percent for Dole and 3 percent having no opinion. 6227 !C21 !C24 !CCAT !GCAT !GWEA !M14 !M141 !MCAT Warm weather with light showers were forecast for crops areas of the U.S. northern Plains and Midwest now through next week, meteorologists said. Hurricane Edouard, which recently was upgraded to a Catagory 4 storm, may veer west into the Carolinas this weekend. But, rain produced by the storm should stay east of the Appalachian Mountains, with a slight chance rain could be forced into Ohio and Indiana, said Joel Burgio, meteorologist with Weather Services Corp. "There are still a whole bunch of question marks on Edouard," said Burgio of the storm's path. The western Midwest may receive a few light showers by Saturday, but elsewhere in the Midwest should be warm and dry this weekend, said Burgio. There is a slight chance of rain in southeast Missouri Monday or Tuesday. A low pressure system developing over the Rocky Mountains may move east bringing 0.25 to one inch of rain into the dry areas of Indiana and Ohio late next week, said Tim Bowden, meteorologist with Weather Express Inc. The Dakotas, where spring wheat harvesting was under way, may receive 0.25 to 0.75 inch of rain with 50 percent coverage this weekend, Bowden said. Normal to above normal temperatures were forecast for the Midwest through next week. There was no threat of frost for the Midwest or northern Plains through next week, meteorologists said. --Chicago newsdesk 312-408-8720-- 6228 !C12 !C17 !C171 !CCAT !GCAT !GCRIM Kaiser Aluminum Corp said it is disappointed with a decision issued late Thursday by the Delaware Supreme Court which bars Kaiser from promptly implementing a shareholder-approved amendment to the company's certificate of incorporation that would allow for the creation of two classes of common stock. The company said it is currently evaluating its options in light of the court's decision. In its decision, the Delaware Supreme Court upheld a preliminary injunction issued by the Delaware Court of Chancery on April 10 against the plan's implementation. Kaiser said the Chancery court had found the existing conversion rights of preferred stockholders cannot be adjusted as set forth in the company's proposed recapitalization without the consent of the preferred holders. -- New York Newsdesk 212-859-1610. 6229 !GCAT !GPOL !GVOTE President Bill Clinton embarked on Friday on a quest to become the first Democrat to win a second term since Franklin Roosevelt 60 years ago, but party leaders worried his chances could be hurt by a sex scandal that forced his chief campaign strategist to resign. As he took command of the Democratic convention on Thursday night to deliver his nomination acceptance speech, a smiling, happy Clinton showed no public sign of worry about the resignation of political guru Dick Morris after a tabloid newspaper alleged he had a year-long relationship with a $200-an-hour hooker. The president delivered a 66-minute speech that seemed to have a proposal every paragraph, from tax credits to lifting up "the poor and end their isolation, their exile." The speech signalled the start of a 68-day campaign against Republican rival Bob Dole and independent Ross Perot that Clinton promised would be a battle of ideas not invective. Accompanied by first lady Hillary Clinton, Vice President Al Gore and his wife Tipper, the president leaves Chicago onFriday morning for Missouri where he will start a two-day bus tour of four key states. Gore and Clinton did a similiar trip after the 1992 convention and it proved a public relations success. Reaction to Clinton's speech was mixed. Some delegates appeared bored, disappointed there were no soaring phrases. One Iowa man even cautioned a yawning delegate to stop because "the television cameras will catch you." But the mass of 20,000 delegates cramming Chicago's United Centre were too fired up to complain. They cheered and shouted "Four more Years' almost every chance they had, and they appeared in a jubilant mood as they left the convention centre. But many wondered what the effects of the Morris scandal would be on the campaign and Republican plans to make Clinton's character a major issue of the election battle. Republicans, delighting in the scandal, talked on Thursday of a man being judged by the company he keeps. Morris is credited with reviving the Clinton presidency after it nose-dived in the 1994 congressional elections. Voters turned on the president and gave Republicans control of both houses of Congress for the first time in 40 years. He devised a strategy in which Clinton moved to the centre and co-opted many Republican plans, while at the same time painting his opponents as mean-spirited extremists. Morris arrived at the Democratic convention as king of the hill and left in disgrace after the Star tabloid magazine, picked up by the New York Post, reported he told the call girlClinton administration secrets during their affair and even let her listen to him while he talked to the president. Dole told ABC News he thought the Morris scandal would affect the campaign. "I think it may change the direction of the campaign because he's been responsible for getting President Clinton to adopt many of the Republican policies, whether it's welfare reform, or health care or many other issues that the liberals are not too happy with President Clinton about," Dole said. "The problem is it raises the integrity issue," said one White House aide worried that although Clinton could hardly be blamed for someone else's pecadillos, it would remind people he has had a host of "character" problems of his own in the past. 6230 !GCAT The Walt Disney Co. has joined a growing list of Hollywood majors to sign a lucrative output deal with Germany's Kirch Group, Daily Variety reported on Friday. On Thursday the company agreed to provide Kirch's fledgling digital pay TV service exclusive rights for all live-action feature films for the next 10 years for an amount believed to exceed $1 billion. The newspaper also reported: * Westinghouse Electric Co's CBS is cleaning up an "Ink" spill that is getting very expensive. The network has decided to shelve the first four episodes of the comedy from DreamWorks Television, and will replace the show with the new sitcom "Pearl" until Oct 21. As expected, "Murphy Brown" creator Diane English will take over as executive producer of the Ted Danson sitcom. The cost of producing four new episodes of the show will run CBS and DreamWorks over $4 million. * CBS is asking advertisers to sacrifice their 30-second ads in the Friday, Sept 20, "Late Show With David Letterman" so the network can experiment with a commercial-free 60-minute edition of the program. * Kurt Andersen was dismissed Thursday from his post as editor in chief of New York magazine, a unit of K-III Communications Corp. * Representatives of various TV news organizations agree the political parties may change their convention methods in the future, but they're split about whether the media will alter its coverage. * Actor Samuel L. Jackson is attached to star in and produce the independent coming-of-age drama "Eve's Bayou." Caldecott Chubb also will produce the mystical tale about a young Creole girl growing up in a small Louisiana town. * Turner Broadcasting System Inc's Cartoon Network is prepping a 24-hour Portuguese-language feed for Brazil, Latin America's fastest-growing pay arena. * Despite efforts by the federal government to rein in cable rates, subscriber bills are up an average of more than 10 percent this year, according to the Bureau of Labor Statistics. The rate hikes are the result of inflation. -- New York newsroom, (212) 859-1610 6231 !C42 !CCAT !E41 !ECAT !GCAT !GJOB American workers can take pride in the fact that while their wages are not the highest in the world, their productivity is. American workers came under attack four years ago when a Japanese politician called them "illiterate" and "lazy," igniting a trans-Pacific war of words. But some of the biggest boosters of American workers today are managers of Japanese-owned companies doing business in the United States. "Generally speaking, we think the productivity of American workers is as good as Japanese workers," said Kenjiro Ishihara, vice president of consumer electronics maker Toshiba America Inc. in New York. "American workers are really terrific," said Teruko Secor at Fujisankei Communications International, which employs news researchers. "They work as hard as can be. You can see they really love their job, not just a means of making money." At ceramics maker Kyocera America in San Diego, vice president and plant manager Eiji Tanaka said, "If you have clear goal-setting, it doesn't make any difference" (where you manufacture). Productivity of Kyocera's U.S. workers, he said, "is comparable to workers in Japan." "The culture of Japanese and American workers is very different," said Christopher Poland, project leader for Honda's Acura CL plant in East Liberty, Ohio, who has also managed work teams in Japan. "But I don't see any big difference between (them) in terms of productivity." "A human being can only work so fast and so hard in so many hours," Poland said. "I've worked in our facilities in Thailand, Malaysia, and Mexico and I don't think there's any difference in the work ethic," said Honda senior manager Steve Bishop. Not all Japanese executives agree, and there are arguments to back the opinions of both sides, experts said. Isao Matsmaru, executive vice president of TDK Ferrite Corp., a maker of magnets in Shawnee, Okla., said U.S. workers' productivity is "not so bad" but that Japanese workers' was "much higher" because of their "belief in the company." William Lewis, director of the McKinsey Global Institute, part of the global consulting firm, said: "On aggregate, the United States has the most productive work force in the world. But that's not true in every sector or in every single company." He said Japanese workers were more productive making machine tools, consumer electronics, automobiles and steel but not in producing computers, food processing, or in service industries. A new MGI survey found that if one ranks the productivity of U.S. workers at 100, German workers score 90 and Japanese workers 55. "Despite what you read about we're falling behind, the bottom line is that the U.S. has the highest productivity in the world," said Joe Thomas, professor of manufacturing at Cornell University in Ithaca, New York. Japanese workers do put in longer hours than Americans, Thomas said, but "in terms of cost per labour hour, we're the cheapest of the three" major producers, including Germany. "Both Japan and Germany are more expensive (places) to make products." Hourly manufacturing wages including benefits in 1995 were $31.88 in West Germany; $29.28 in Switzerland; $26.88 in Belgium; $25.38 in Austria; $23.66 in Japan, and $17.20 in the United States, according to new data from the Bureau of Labour Statistics. The lower U.S. wage does not necessarily mean U.S. workers are worse off than those in other countries earning more. "All wage comparisons using market exchange rates have to be taken with a grain of salt," MGI's Lewis said. That's because workers spend most of their wages in their own country and prices are lower in the United States than in other countries. "I think that when it comes to putting goods out the door, Americans are more efficient and work harder than the Japanese or the Germans," said Stan Modic, editor of "Tooling & Production," a Solon, Ohio-based magazine on manufacturing. "The proof is that U.S. exports have grown tremendously and are much more accepted around the world and very competitive in the world market." "The bottom line," said MGI's Lewis, "is that competition matters and the competive intensity in the U.S. market is higher than in any other country. It leads to higher worker productivity, a higher material standard of living, and higher creation of wealth." (Note: Sherwood Ross is a freelance writer who covers workplace issues for Reuters. Any opinions in the column are solely his) 6232 !C12 !C13 !CCAT !GCAT !GCRIM The U.S. Justice Department has launched a fraud investigation over nicotine levels in cigarettes, CBS News reported early Friday. The network said agents from the Federal Bureau of Investigation had delivered subpoenas to Philip Morris Cos Inc, the world's largest cigarette maker, for executives to appear before a Washington-area grand jury. The subpoenas also order the company to give up documents about its manufacturing process. Similar subpoenoas may soon be issued to other leading tobacco companies, CBS said. In a statement, Philip Morris had no comment but confirmed the investigation. "The company has received requests for documents and testimony and is cooperating fully," it said. Several U.S. attorneys around the country have been looking at the cigarette issue and it was only recently that the Justice Department consolidated the action at its main office, CBS said. "These subpoenas are the loudest signal yet that prosecutors there may have indictments on their minds," it said. The network did not specify what the fraud investigation may touch on. However, Connecticut sued U.S. tobacco companies last month alleging in part that they secretly manipulated nicotine levels to increase smokers' addiction, suppressed internal research that nicotine is addictive and conspired to hook children through child-targeted marketing and nicotine manipulation. 6233 !CCAT !GCAT !GDIS !GVIO Investigators' computer simulation of the final moments of Trans World Airlines Flight 800 has placed the blast that downed the plane in a small site on the jet's right side, The New York Times reported on Friday. The simulation shows that almost everything in the first spray of metal, luggage and other material blown from the plane came from a confined area above and ahead of the right wing. Federal investigators say the simulation, a standard part of crash investigations, has helped them visualize the probable focal point of the explosion that ultimately split the plane. The TWA Boeing 747 crashed July 17 into the Atlantic Ocean off New York's Long Island on a flight from New York to Paris. All 230 people aboard died. Investigators examining wreckage from the crash say they have found several new hints that a bomb may have exploded at that area of the plane. However, the new evidence did not push them much closer to the point where they could officially declare that the crash was caused by a criminal act. An aviation expert and a law enforcement official who is an explosives specialist both said they saw several fist-size holes that had been punched through the backs of two seats on the far right side of row 23. That is in the centre of the area pinpointed by the computer as the site of the initial blast. Both the sources spoke on condition of anonymity, the newspaper said. The holes in the sheet metal on the seat back are pushed through from the rear, indicating that the enormous force that created them came from behind. Row 24, the seats just behind them, is missing. No similar holes have been found in other seats. The explosives expert said many of the pieces investigators do have hold "very suggestive damage." "That's where the violent event happened," he told the newspaper. The microscopic traces of the plastic explosive PETN, discovered during Federal Bureau of Investigation tests, were also found in that general area. 6234 !GCAT The New York Times reported the following business stories on Friday: * U.S. economy grew at 4.8 percent rate in spring quarter, report prompts fears of rate increase. * Changes in retailing are shrinking the pool of trend-setting executives in charge of choosing a store's goods. * Novell Inc chief resigns. * International Monetary Fund may sell gold to reduce debts of poor nations. * Dow Jones Industrial Average drops 64.73 points, to 5,647.65. Nasdaq composite index falls 8.85 points, to 1,145.03. * New snags for a European currency. * Baxter International and Immuno International agree to merge in $715 million deal. * Daimler-Benz AG returns to profit in first half of year. * United States accuses Iran of helping Iraq break oil embargo. * ValuJet Airlines gets federal approval to fly again. * Hilton Hotels Corp and Britain's Ladbroke Group Plc agree to alliance. * Investors are trying to find the next takeover bonanza in smaller mining stocks. * Editor of New York Magazine, a unit of K-III Communications Corp, is dismissed. -- New York newsroom, (212) 859-1610 6235 !GCAT The New York Times reported the following stories on its front page on Friday: * President Bill Clinton accepts Democratic Party nomination for a second term, says "hope is back." * Clinton campaign adviser Dick Morris quits over his relationship with a prostitute. * Morris affair was not what Clinton needed. * Rebels strike in four Mexican states, leaving 13 dead. * Palestinians stage general strike and Israel hears the message. * Computer simulation puts blast aboard TWA Flight 800 in a small area, offers hints of bombing. * Federal authorities permit ValuJet Airlines to fly again. -- New York newsroom, (212) 859-1610 6236 !GCAT !GPOL Sherry Rowlands, the callgirl whose alleged year-long affair with President Bill Clinton's top political adviser caused his resignation on Thursday, told her neighbours she ran a one-woman cleaning service. The townhouse Rowlands shared with her sister and niece in this suburb about 30 miles south of Washington stood empty late on Thursday and all the shades were drawn. Journalists at the site said Rowlands' sister and niece loaded some luggage into their car earlier on Thursday and drove away. Neighbours told local television stations Rowlands, 37, was pleasant and always ready to help out. Most were surprised about the revelations that led to the resignation of Clinton political strategist Dick Morris. Several said Rowlands had told them she operated a cleaning service. One relative of Rowlands told the Washington Post that a man announcing himself as Dick Morris called the town house in Prince William County about once a week for several months. In its Friday editions, the paper also quoted the relative as saying that Rowlands had once shown family members a magazine photograph of Morris and described him as her boyfriend. Rowlands lived in Pittsburgh and Virginia Beach and has three sons who live with her ex-husband, the Washington Post reported. Morris' resignation followed a report that the married 48-year-old political strategist had a year-long affair with Rowlands at the Jefferson Hotel in Washington, his base while working for Clinton. The report was published by the supermarket weekly tabloid Star magazine and reprinted in Thursday's edition of the New York Post. The Post said the tabloid had photos and videotapes to back up its story. The Star said Morris bragged to Rowlands about how powerful he was and let her secretly listen to phone conversations with the president. Richard Gooding, who wrote the Star story, told the local ABC affiliate that Rowlands had fallen on hard times and was "not terribly proud" of her work for an escort service. 6237 !GCAT The Washington Post carried the following items on the front page of its business section on Aug 30: - - - - WASHINGTON - The nation's economy grew more rapidly this spring than economists had thought, stoking fears of renewed inflation and rising interest rates. - - - - WASHINGTON - The Federal Aviation Administration allowed ValuJet Airlines to resume operations after the carrier passed an intensive review of its safety and maintenance programs. - - - - CHICAGO - President Clinton called for additional tax breaks for middle-class homeowners and new programs to help welfare recipients in inner cities. - - - - WASHINGTON - Meat producers are mounting a campaign to derail a proposal that would let schools subsitute yogurt for meat-based main dishes in school lunches. 6238 !GCAT !GPOL !GVOTE President Bill Clinton used the phrase "a bridge to the 21st century" no less than 18 times in a speech to the Democratic convention that subtly pointed up a contrast with his 73-year-old Republican opponent Bob Dole. Clinton, who turned 50 last week, mentioned children 21 times in his 66-minute oration, focusing relentlessly on the future and painting Dole as a man looking back to the past. "It very skilfully picked up on the opening Dole provided with his speech in San Diego highlighting the generation gap," said Wayne Fields, a historian at Washington University in St Louis who has written a book about presidential speeches. Accepting the Republican presidential nomination in San Diego, Dole looked back to a better America he remembered from his youth in the 1920s and 1930s. "Let me be a bridge to a time of tranquility, faith and confidence in action," Dole said that night two weeks ago. "To those who say it was never so, that America has not been better, I say, you're wrong and I know, because I was there. I have seen it. I remember." Fields said Clinton powerfully played on the fact that Dole was looking backwards. "Dole will always suffer because he comes across as harsh and angry. Clinton's emphasis on serving children was softer and sunnier." Mark Rozell, a political analyst with the American University in Washington DC said Clinton had found a way to highlight Dole's age without seeming to do so. "He drew the contrast of a younger man saying there were better times ahead. That projected neatly into the whole age issue," he said. A Reuters opinion poll last week found nearly 40 percent of respondents thought Dole was too old to be president. It goes without saying about this president that he probably spoke too long. David Gergen, a former Clinton adviser, said some in the audience might have started wondering if the speech was going to last until the 21st century. Nevertheless Gergen thought that Clinton had picked a powerful winning issue in his focus on children. The Reuters poll found that voters rated education the top issue of the campaign, ahead even of the U.S. economy which continues to steam powerfully ahead. Many of Clinton's words encompassed wonderful sentiments that few could take issue with but that had more to do with "happy talk" than with real politics or policy. "I want to build a bridge to the 21st century with a strong American community, beginning with strong families, an America where all children are cherished and protected from destructive forces, where parents can succeed at home and at work," ran one typical sentence. A pledge to clean up toxic waste dumps was for the sake of the 10 million children living within four miles (6 km) of such sites. A promise to advance peace and prosperity abroad was to "keep our children safe from terror and weapons of mass destruction." The nation needed to create jobs so that "every single child can look out the window in the morning and see a whole community going to work." Taxes would be cut to send children to college, the budget would be balanced so children would inherit opportunity, not debt. "My fellow Americans, in the 21st century we must make all our children free -- free of the vise grip of guns and drugs, free to build lives of hope," Clinton declared. By the time he finished, the sheer number of ideas was starting to become mind-numbing. Instead of projecting a few big ideas about what he would do in a second term, Clinton threw out scores on every conceivable subject. But Fields said that too had a generational appeal to younger people brought up on television and now the Internet, where you typically flashed from one image to another within an instant in a constant flow of changing themes. Clinton also tried to take the high road in avoiding personal attacks on Dole, a tactic likely to play well with a public tired of attack-dog politics. So how did he do? "I give it a B grade, good but not particularly memorable," said Rozell. "I rate it in the B range," said Fields. 6239 !GCAT !GPOL !GVOTE President Bill Clinton launched his re-election bid on Thursday to thunderous ovations from the Democratic convention, shrugging off the shock resignation of his top political guru in a sex scandal. Promising to lead America boldly into the 21st century and to run a high-principled campaign of ideas not mudslinging, Clinton accepted his party's second-term nomination with a zestful speech clearly designed to show he was unfazed by a bombshell that nearly obscured his hour of triumph. His theme and oft-repeated slogan was "building a bridge to the 21st century". He used it to contrast himself with Republican challenger Bob Dole, 73, and to imply his opponent was a living bridge to the past. "The real choice is about whether we will build a bridge to the future or a bridge to the past, about whether we believe our best days are ahead or behind us, about whether we want a country of people working together or one where you're on your own," he told the cheering, chanting convention. "Tonight let us commit ourselves to rise up and build that bridge to the 21st century." His speech rolled on for one hour and six minutes -- vintage loquacious Clinton -- and led to a joyous convention finale of cascading red-white-and-blue baloons, a blizzard of glittering silver confetti and a musical group singing tunes from the hit musicals "Rent" and "Les Miserables." Clinton could only hope it would all go some way toward saving a day that could hardly have begun worse for him. While he was still polishing his speech on Thursday morning, the news broke that his top campaign adviser, Dick Morris, had resigned following a newspaper report he had a long affair with a $200-an-hour hooker and had shared White House gossip and campaign information with her. The bombshell quickly became the talk of the convention, clouding what had been an exuberant mood, throwing Clinton partisans into a panic and threatening to divert all attention from the president's televised message. "The problem is it raises the integrity issue," said one White House aide worried that although Clinton could hardly be blamed for someone else's pecadillos, it would remind people he has had a host of "character" problems of his own. Clinton issued a statement expressing regret at the departure of Morris, whom he described as his friend and a superb political strategist. Morris was widely ironically credited with developing the moralistic "family values" theme Clinton has been using to good effect against the Republicans. Beyond that, Clinton handled the crisis by ignoring it -- and his speech contained a passage suggesting others ought to be decent enough to do so as well. He said it would be fair game in this campaign to compare records with Dole, his running mate Jack Kemp and third-party challenger Ross Perot but added: "I will not attack them personally or permit others to do it in this party if I can prevent it ... This must be a campaign of ideas, not a campaign of insults. The American people deserve it." Dole, vacationing in California, could not resist a mild, sardonic comment on the departure of Morris -- a political guru with many links to Republicans as well. "I think it may change the direction of the campaign," Dole told ABC Television. "He's been responsible for getting President Clinton to adopt many Republican policies, whether it's welfare reform or health care or many other issues that the liberals are not too happy with the president about." Clinton also sprinkled his speech with some economic goodies to be delivered if he is re-elected, including a proposal that would spare most home-sellers from capital gains taxes and give employers tax incentives to hire people off the welfare rolls. He insisted his tax cuts would be responsible, carefully targeted and paid for by savings elsewhere, claiming this was a stark contrast with Dole tax reduction pledges that would "blow a hole in the deficit." The president also claimed foreign policy triumphs to match a generally prosperous economy, declining unemployment and low inflation at home. "We have helped bring democracy to Haiti and peace to Bosnia," he said. "Now the peace signed on the White House lawn between Israelis and Palestinians must embrace more of Israel's neighbours ... I will continue our strong partnership with a democratic Russia, and we will bring some of Europe's new democracies into NATO. 6240 !GCAT !GPOL President Bill Clinton said on Thursday the United States could not be the world's policeman but there were times when it must act abroad to protect its interests and values. In a speech accepting the Democratic nomination for a second term as president, Clinton said: "There are times when only America can make the difference between war and peace, freedom and repression, life and death. "We cannot save all the world's children -- but we can save many. We cannot be the world's policeman -- but where our values, and our interests are at stake, America must act -- and America must lead." Clinton devoted only a few moments of his hour-long speech to foreign policy. Following are some of his comments: -- Cuba must join the "family of Democracies." -- The United States would continue its strong partnership with a democratic Russia. -- Some of Europe's new democracies (in eastern Europe) would be brought into NATO, "so their freedom is never in doubt again." -- Measures to further reduce nuclear arsenals, banish poison gas, and ban nuclear tests must be enforced and ratified. -- Funding for modernising U.S. weapons would be increased by 40 percent by the year 2000 to keep the U.S. armed forces "the best-trained and best-equipped" in the world. -- The United States would develop "sensible" defences against missile attack. But in reference to ambitious proposals by his Republican opponent Bob Dole, Clinton said: "We must not -- now or by the year 2000 -- squander $60 billion on an unproved, ineffective "Star Wars" programme that could be obsolete tomorrow." 6241 !GCAT The Washington Post carried the following stories on its front page on August 30: --- CHICAGO - Dick Morris resigned as President Clinton's top political adviser in the face of a tabloid story linking him to a high-priced call girl. --- CHICAGO - President Clinton sounded an upbeat tone in his speech to the Democratic National Convention, but warned that rival Bob Dole's big tax cuts threatened the economy with recession and high debt levels. --- CHICAGO - Bill Clinton and Dick Morris were political brothers in a partnership that thrived in the mercurial realm of disaster and resurrection. --- CHICAGO - The resignation of Dick Morris was proof again of the adage that President Bill Clinton is never in greater danger than when everything seems to be going right. --- MEXICO CITY - Masked gunmen from a new anti-government guerrilla group launched attacks in three Mexican states Wednesday night, killing at least 13 people and wounding two dozen others. 6242 !C42 !CCAT !E41 !ECAT !GCAT !GENT !GJOB Nude dancers at a San Francisco club voted on Thursday on whether to become the only "exotic dancers" in the nation to belong to a union. Ninety-seven employees of the "Lusty Lady" club in San Francisco's North Beach district were eligible to take part in the National Labour Relations Board election on union representation, union officials said. If a majority votes to join Local 790 of the Service Employees International Union in a secret ballot being held Thursday and Friday, the club's nude dancers would be the only ones in the United States to belong to a union. Strippers at a San Diego club set up an open union shop several years ago, but it is no longer unionized, union officials said. "The workers approached us. We had discussions with them. They formed their own committee. We supported them by filing a petition with the labour board," Jim Philliou, organising director with Local 790, told Reuters. He said club management opposed the union drive. Managers could not be reached for comment on Thursday. Results of the ballot were expected to be announced on Friday night. Customers enter booths at the club and pay to watch the scantily-clad dancers cavort on a stage. If the dancers vote for the union, Local 790 would open contract negotiations with the "Lusty Lady"'s management, discussing issues such as job security, working conditions, sick leave and health insurance. "We're workers. Our work is to be a sex object but that doesn't mean that we shouldn't be guaranteed certain basic protections and rights ...," a dancer at the club, identified only as Jane, told San Francisco's KCBS radio. The dancers said the club is one of the better-run strip joints. The push for union representation gathered pace when some of the women became upset that some booths had one-way windows which they said allowed customers to videotape them dancing. 6243 !GCAT !GPOL Al Gore, accepting renomination to be vice president, on Thursday urged Republicans, third party members and independents to back the Democratic ticket, saying the country's best days are still ahead. Gore, nominated to seek a second term by acclamation at the closing session of the Democratic National Convention, thanked his family, friends and President Bill Clinton. "I appeal to members of the Republican party, the Reform Party and independents to join us in this cause that claims our hearts," Gore said. "Let us make this a positive campaign. The American people deserve no less," he said. Clinton and the American people believe "our best days are ahead and if we summon the will, marshal our confidence and join in common cause ... we Americans will successfully cross the bridge to the future," Gore said. On the night traditionally set aside for the nomination of the vice president, Gore gave a brief acceptance speech since he spoke to the convention for a half hour the night before. The shortness also allowed Clinton to appear on the television networks in prime time. 6244 !CCAT !GCAT !GENT Bruce Marks has brought the corporate spirit to the Boston Ballet, refusing to believe that non-profit means no profit. "I say we can do many things, mount a new ballet, run a school for inner-city kids, but they all have been done with a surplus," said Marks, 58, the artistic director and chief executive officer of the Boston Ballet. "For me, the most creative part of the year is when I do the budget. The allocation of resources says what you'll look like on stage." Marks inherited a troupe with a middling reputation and a $2 million debt and has turned it into one of the mainstays of ballet in the United States with a $15 million budget, no debt and its own five-storey building filled with dance studios. "I can't operate without a surplus. I can't operate at a loss," he explained. "And I've always believed that people should be able to pay a lot of money if they wish to." The Boston Ballet claims the highest earned income of any ballet troupe in the United States, with more than 80 percent of its income from ticket sales. The core of its funding comes from the seasonal favourite, Tchaikovsky's "The Nutcracker," to which more than 140,000 tickets are regularly sold. The five-week run will generate more than $5 million, one-third of the ballet company's budget for the year. "Between Thanksgiving (Nov. 28) through the first week in December, one will be able to get tickets for 30 percent less than they would on, say, that Saturday matinee during Christmas week. We are prepared to accept as much money as people are prepared to give us," the Brooklyn-born Marks said. In bringing the ballet to a sound financial footing, the Julliard School and Brandeis University graduate has also brought it to prominence with the help of some friends. "Twyla (Tharp), Merce (Cunningham), Paul (Taylor), Ralph (Limon), they're all my friends," Marks said, naming some of the top choreographers. "When you've been around in this business as long as I have, you have a lot of friends." During his 35 years in dance, Marks has performed with the Metropolitan Opera Ballet Company, has been a principal dancer for the American Ballet Theatre and the Royal Danish Ballet and, prior to joining the Boston Ballet, served as co-artistic director of Ballet West. "When I first got this job I called my friends," he said, and they offered the bearded artistic director their compositions and their help. Paul Taylor's Company B, set to the boogie-woogie songs made famous by the Andrews sisters, was first performed by the Boston Ballet and will be on the programme again when the season begins in October. On the same programme, dubbed Boogie, Brass and Blue, will be a new work by the ballet's resident choreographer, Daniel Pelzig, and a reprise of Elisa Monte's VII for VIII. Because his friends have helped, Marks has been able to devote some of the financial resources he has mustered to Citydance, a scholarship-based ballet training programme for Boston's urban public school children that began in 1991. "It's a growing ground for artists," said Marks, the father of three sons. "It's a chance for these kids, who would not normally have anything like this in their lives, to learn what it is to be an artist." Marks has embarked on a $20 million to $30 million fund-raising drive. Among other things, with a roster of 44 dancers and 14 interns, the company needs as many as 16 additional dancers. "We can do all this just so long as it all operates at a surplus," he said. 6245 !C13 !CCAT !GCAT !GENV Ketchikan Pulp Co. will pay a $359,000 penalty for illegal operation of a wood-waste incinerator over intermittent periods dating back to 1980, federal officials said on Thursday. The fine was included in a consent decree lodged in U.S. District Court in Anchorage, the Environmental Protection Agency said. Ketchikan Pulp, a fully owned subsidiary of Louisiana-Pacific Corp., operated the incinerator at its Annette Island sawmill without bothering to obtain the required air-quality permit, a violation of the Clean Air Act, according to the consent decree. The incinerator was installed in 1980 and operated for various times in 1980, 1981, 1990, 1991 and 1992, EPA said. It produced particulates and carbon monoxide, EPA spokesman Bob Jacobson said. EPA's civil action stemmed from complaints lodged in 1991 by area residents who were bothered by thick smoke streaming from the sawmill, the agency said. The Clean Air Act carries penalties of up to $25,000 per day of violation. Ketchikan Pulp dismantled the illegal incinerator in 1993 and replaced it with a wood-waste boiler equipped with EPA-approved pollution controls, the agency and company said. 6246 !C12 !CCAT !GCAT !GCRIM Standard & Poor's Corp filed court papers on Thursday seeking dismissal of claims in Orange County's $500 million lawsuit against the firm on grounds its ratings are protected by the First Amendment. The court papers were filed late on Thursday in bankruptcy court in Santa Ana, California. In the papers, the credit rating agency issued its first direct response to Orange County's controversial lawsuit against the firm. The county sued S&P in June for breach of contract, professional negligence and aiding and abetting breach of fiduciary duty. The lawsuit was one of several filed by the county in June, just before it emerged from 18 months of bankruptcy. In the suit, the county alleged that S&P played a pivotal role in "falsely" assuring county taxpayers, county officials, the press and the financial community that the investment strategy of then-county Treasurer Robert Citron was not risky. In its response on Thursday, S&P maintains that as a publisher, it is fully shielded by the Constitution's First Amendment, which protects freedom of speech. "Because S&P is a publisher, the county cannot prevail without pleading and proving that S&P published with actual malice," S&P said. S&P added that its credit ratings constituted "protected opinions" under the First Amendment. S&P said it never agreed to provide the county with accounting, investment or legal advice. S&P said the county's claim for professional negligence must be dismissed and asserted that the county's claim for aiding and abetting a breach of fiduciary duty is "defective." A county attorney said the county stood by the claims in the lawsuit. "We think their (S&P's) position is without merit," said county attorney Michael Swartz, of the Los Angeles firm of Hennigan, Mercer & Bennett. Responses were also filed in court late on Thursday by other Orange County litigation targets. These include brokerage giant Morgan Stanley & Co, the Student Loan Marketing Association, bond counsel LeBoeuf Lamb Greene & MacRae, and the financial firm Rauscher Pierce Refsnes Inc. Orange County filed for bankruptcy protection on December 6, 1994 after sustaining losses estimated at more than $1.6 billion on risky investments. The county emerged from bankruptcy in June this year. 6247 !GCAT !GPOL !GVOTE Maverick billionaire Ross Perot will again employ his campaign strategy of airing half-hour "infomercials" in his run for the White House, officials of Perot's Reform Party said on Thursday. Perot, who introduced and tested the prime-time 30-minute shows to presidential politics when he ran in 1992, has booked one show on ABC for Sunday, Sept. 1, and another for Wednesday, Sept. 4. Party officials said several more will follow in the run-up to the Nov. 5 election. "Yes, the programmes will include his famous charts and graphs," Perot's spokeswoman Sharon Holman said on Thursday. In 1992, pledging to discuss the real issues facing the country, Perot used a pointer and graphs as well as a well- tuned folksy style to drive home his point that successive U.S. governments had run up an unsustainable budget deficit. It appeared his strategy would be little changed this time around. Party officials said Thursday that the title of his first infomercial will be "Ross Perot: Results - Not Free Candy," a reference to what he says are the irresponsible election-year promises of Democrats and Republicans. Holman said Perot will likely give an overview of his platform in the first infomercial and then focus on specific issues in later shows. "This is the first of many conversations with Ross Perot on the issues," she said. "It's going to be fun." Perot won 19 percent of the vote in 1992, coming in third behind Bill Clinton and Republican incumbent George Bush. He spent $70 million of his own money in 1992. Running this time as the Reform Party's candidate rather than as an independent, he has decided to accept $29.2 million of federal funds. 6248 !GCAT !GDIP !GPOL !GVOTE Republican presidential nominee Bob Dole on Thursday urged President Bill Clinton to postpone the presidential and parliamentary elections in Bosnia and Herzegovina next month, calling them a sham. "I believe that putting American prestige behind such a process only serves to undermine our leadership and makes a mockery of our commitment to democratic principles, while making it more difficult for U.S. troops in Bosnia to accomplish their goals," Dole wrote Clinton in a letter released by his campaign. The upcoming election in Bosnia is scheduled for Sept. 14. Dole cited "widespread intimidation of opposition leaders" as one reason the U.S. government should not be backing the elections. He said other problems included refugees not being able to return to their homes. "These elections are a sham in the making. They should be postponed until conditions exist that will ensure that the voting will be free and fair," the Dole letter said. Also on Thursday, Dole promised that, if elected, his administration would usher in a return to the tax-cutting era of the Reagan administration. "The Reagan tax cuts were like a super-charger for the economy," Dole told a crowd of several thousand at a Spanish-style old mission building here. Dole has been campaigning on a plank to cut taxes 15 percent. The mention of former President Ronald Reagan brought a round of cheers from the California audience. "We believe you can spend your own money more wisely than any government ever will. We can balance the budget and cut taxes. It can be done," Dole said. Asked about the surprise resignation of Clinton's high-level strategist Dick Morris, Dole, speaking in Santa Barbara, said: "Morris has been trying to make President Clinton a Republican, now maybe he'll revert to the liberal Democrat that he (Clinton) really is." The Morris resignation followed a published report that Morris had spent time with a prostitute whom he allowed to listen in when Morris spoke on the telephone with the president. When speaking privately to a campaign worker about Morris, apparently not realising a radio microphone nearby was live, Dole said: "It says something about who you surround yourself with, doesn't it?" But publicly, Dole aides went to considerable efforts to not be seen taking advantage of the Morris story, which is sure to refocus attention on Clinton's character. "He (Dole) takes the long view of this sort of stuff and I think it's fair to say he feels some degree of sympathy for someone to be thrust into the national spotlight with this sort of scandal," said Dole's press secretary Nelson Warfield. 6249 !GCAT !GPOL Three members of the legendary Kennedy clan on Thursday annointed President Bill Clinton as the heir to Camelot in a display of nostalgia and old-style liberal rhetoric aimed at Republican Bob Dole. Massachusetts Sen. Edward Kennedy gave Clinton the posthumous blessing of his assassinated brothers, President John Kennedy and Robert Kennedy, in a speech to the Democratic convention. "John and Robert Kennedy summoned new generations to public service," Kennedy said. "How proud they would be of a president who was touched in his youth by their example and who has brought our party back to victory and moved our country forward -- President Bill Clinton." He recalled that Clinton, at the age of 16, shook President Kennedy's hand in the rose garden of the White House. Clinton was in Washington representing Arkansas at a conference of youth leaders. Those were the days of youthful promise exemplified by the glamorous Kennedy family, which Jacqueline Kennedy summed up in one word after her husband was murdered -- "Camelot." With former world heavyweight boxing champion Mohammed Ali applauding in the audience, Kennedy made the link between his brother and Clinton explicit. "That day, Bill Clinton took my brother's hand, and he is now the young president who has taken up the fallen standard -- the belief that America can do better," the silver haired elder of the Kennedy family said. "And we will do better with President William Jefferson Clinton leading us into the next American century," he added. He also put in a Kennedy endorsement for "the brilliant and brave" first lady Hillary Rodham Clinton. "We love her for the enemies she has made," he said. Kennedy was introduced by his son Patrick, who was elected to the House of Representatives from a district in Rhode Island two years ago at the age of 26. "I am proud that my father has stood up to welfare bashing, stood up to immigrant bashing, stood up to gay bashing," the younger Kennedy said. Robert Kennedy's son Joe, a House member from Massachusetts, nominated Al Gore for the a second term as vice president. He recalled that last time the Democrats met in Chicago in 1968, he had been 17 years old and had hoped he would see his father receive the party's presidential nomination there. But two months earlier, Robert Kennedy was shot dead after winning the California primary. "He never did get to Chicago and in a sense our country has been trying to get to this great city all these past 28 years," he said. Not appearing on the podium was one often considered the most glamorous member of the most glamorous family in America -- John Kennedy Junior, son of the assassinated president. As publisher of the glitzy "George" magazine, John Junior has been in Chicago, the hunkiest host of the most popular parties taking place around the fringes of the convention. Edward Kennedy's speech was full of red meat accusations against Dole, with whom he served in the Senate for more than 30 years. "I like and respect him as a person. But I take issue with his backward vision of America. They say there's a new Bob Dole. But let's not lose sight of the old Bob Dole -- he wasn't exactly a merry old soul," Kennedy said. 6250 !GCAT !GCRIM !GVIO By Gail Appleson, Law Correspondent A federal jury on Thursday began deliberating whether three radical Muslims planned to bomb 12 U.S. passenger jets to punish the United States for its support of Israel. The case against Ramzi Ahmed Yousef, the alleged mastermind of the plot, and two other defendants went to the jury after a full day of instructions on the law. The trial started in May. The jury broke after about an hour on Thursday evening and will return on Tuesday. Panelists are not sequestered, but their names and addresses are being kept secret. Yousef was one of the world's most wanted fugitives until he was arrested in February 1995 in Islamabad, Pakistan, and returned to New York. If convicted, he could be sentenced to life imprisonment. He is accused of being the architect of a scheme to murder about 4,000 passengers over a 48-hour period last year as they returned on Delta, Northwest and United flights to the United States from the Far East. Yousef is also charged with placing a bomb on a Philippine Airlines flight from Manila to Tokyo on Dec. 11, 1994, as a trial run. The bomb exploded under the seat of a Japanese passenger, killing him and injuring 10 other people. He will also be tried later this year for allegedly masterminding the 1993 World Trade Center bombing, which killed six and injured more than 1,000 people. Prosecutors allege the purpose of these attacks was to punish the United States for its support of Israel. The airline bombing case against Yousef and two other defendants, Abdul Hakim Murad and Wali Khan Amin Shah, was developed after a January 1995 fire broke out in an apartment shared by Yousef and Murad in Manila. Yousef allegedly fled to Pakistan after the bombing. The Philippine National Police found in the apartment bomb-making equipment and manuals, explosives and a Toshiba laptop computer containing schedules for Delta, Northwest and United flights along with detonation times. Yousef and lawyers for the other two defendants said in closing arguments that the police had fabricated and altered evidence found at the scene. They focused on testimony by two officers who said police reports contained false information about evidence and where it had been found. Yousef alleged that he was the victim of a conspiracy by the Philippines and Pakistan aimed at winning the favor of the U.S. government. But prosecutors argued that this was a real plan and that it was "one of the most hideous crimes anyone has ever conceived." "They had the material, they had the know-how and they had the determination to carry out the plan with deadly precision," said Dietrich Snell, assistant U.S. attorney. 6251 !GCAT !GPOL - Republican vice presidential candidate Jack Kemp, speaking a day after Vice President Gore criticised Bob Dole, said Americans are fed up with "relentless assaults on people's reputations." "This has to stop and it must stop now," Kemp, a former congressman and Cabinet secretary, wrote in an open letter to Gore. In a speech to the Democratic National Convention on Wednesday, Gore lauded Dole for his service during the Second World War but took the former senator to task for his opposition to creating the Medicare and Medicaid health care programmes and his votes against environmental legislation and Head Start, an early childhood education programme. Kemp also fired back at Gore's linking of Dole with Republican House Speaker Newt Gingrich, a favourite whipping boy of the Democrats, whose calls for his ouster may be the most unifying force in the party this election. The "Dole-Gingrich" threat has become a party staple, with Democrats warning that with Republicans ruling both Congress and the White House, programmes like Medicare are in mortal jeopardy. "On Sunday, you saw fit to express your belief that Senator Dole was one half of a 'two-headed monster' -- a sad statment that certainly did nothing to restore civility to our political discourse," Kemp wrote. "I urge you to stop such attacks now, and work to raise the level of discourse and civility." 6252 !GCAT !GPOL President Bill Clinton, trying to become the first Democratic incumbent since Franklin Roosevelt to win re-election, urged Americans on Thursday to march with him into the 21st Century with an agenda that disdains the "old politics of Washington." Clinton, whose high-flying campaign was knocked off balance earlier in the day by bombshell sex scandal allegations that forced the resignation of Dick Morris, his top political adviser, outlined his vision of the next four years in a speech prepared for the Democratic Convention. He also attacked the $548 billion tax cut proposal at the heart of Republican Bob Dole's campaign to unseat him, saying "we should not bet the farm and we certainly shouldn't bet the country" on the type of tax cuts that created huge deficits in the 1980s. Clinton, fresh from a triumphant whistlestop train tour that took him through five politically pivotal states on his way to the convention, portrayed himself as the agent of change that he promised to be in 1992. "On issues that once tore us apart, we have changed the old politics of Washington. For too often, leaders asked, 'Who is to blame?' We ask, 'What are we going to do,'" he said in excerpts from his nomination acceptance speech released by the White House. "For four years now, we have worked to realise our vision for America. Our strategy is simple, but profound: opporunity for all, responsibility for all, a strong American community where everyone has a place and plays a role," Clinton said. Clinton, whose political stock soared when he took on and faced down the Republican-controlled Congress in a budget battle that twice closed the federal government, promised to fight efforts to cut popular domestic programmes, but at the same time promised to eliminate federal red ink. "Tonight let us proclaim to the American people, we will balance the budget. And let us also proclaim we will do it in a way that preserves Medicare, Medicaid, education and the environment," he said. Clinton, 50, planned to praise Dole's military service in the Second World War, which cost his 73-year-old opponent a disabled right arm, but said he would "respectfully disagree" with Dole's proposal for a 15 income tax cut. "Do we really want to make the same mistake again, to raise interest rates again, to stop economic growth again, to court recession again, to start piling up another mountain of debt, to weaken our bridge to the 21st Century? Of course not. We have an obligation to leave our children a legacy of opportunity, not debt," Clinton said. At the same time however, he used his speech to formally proposal a more modest tax cut plan of his own that would spare most home-sellers from capital gains taxes and give employers tax incentives to hire people off welfare rolls. Clinton angered many of his fellow Democrats last week by signing a Republican-sponsored welfare bill that would end a guarantee of federal aide to the poor enacted 60 years ago under President Roosevelt. "I propose to give businesses a tax credit for every person they hire off welfare and keep employed, to offer private job placement firms a bonus for every welfare recipient they place in a job if the worker stays in it," Clinton said. He said he would also help communities "put welfare recipients to work repairing schools, fixing streets, making their neighbourhoods shine again." Clinton's welfare-to-work plan was a key element of an $8.4 billion re-election agenda that he began laying out during his train trip. "I would not have missed this trip for all the world, for this trip showed that hope is back in America, America is on the right track for the 21st Century," he said. 6253 !GCAT !GCRIM - Three security guards were arrested on Thursday, charged with stealing 42 Barbie dolls. Police arrested the guards after scrutinising security videotapes taken at the FAO Schwarz toy store in the King of Prussia Mall on Monday, Police Lt. Robert Deuber said. Searches conducted Tuesday recovered the dolls, the total worth more than $2,000 at retail prices, as well as other merchandise, he said. Deuber added that the demand for Barbie dolls is high enough to command a price close to retail. "If there's a market out there, I guess somebody will try to fill it." 6254 !GCAT !GCRIM !GPOL The Belgian cabinet approved tougher rules on Friday on the early release from jail of convicted child sex offenders as the country continued to reel from the discovery of a paedophile sex ring led by rapist Marc Dutroux. "The government has approved certain new measures," Justice Minister Stefaan de Clerck told reporters. He said the measures included setting up a special tribunal of magistrates responsible for vetting requests for early release which would work on the basis of unanimity. Up to now the decision on early release has been left to the Justice Minister and based on a majority of opinions from people ranging from the original prosecutor in the case to social workers, psychiatrists and prison staff. "The Minister of Justice will no longer be involved in deciding conditional release," De Clerck told a news conference after the first cabinet meeting since the affair broke two weeks ago. Victims of sexual abuse would receive more help, abusers would be treated in special centres and be more closely monitored on their release and there would be better international coordination between police forces, he said. He added that 8,000 existing files would be reopened. Prime Minister Jean-Luc Dehaene, in his first public statement on the scandal of paedophile abduction, porn and death that has horrified Europe, said everything possible would be done to ensure that it would never happen again. "Children represent our future. They deserve a happy childhood. We must protect and guarantee their rights. Everything must be put in place so that this drama is never repeated," he said. Dutroux, released from jail on a majority opinion 10 years early in 1992 from a 13-year sentence for multiple child rape, was arrested and charged two weeks ago with abduction and illegal imprisonment of children. In two weeks of searching police have so far discovered the bodies of eight-year-olds Julie Lejeune and Melissa Russo in the garden of one of the six houses Dutroux owns in and around the southern city of Charleroi. They have rescued two other sexually abused girls -- Laetitia Delhez and Sabine Dardenne -- from a dungeon in another of his houses and are searching for at least two others -- An Marchal and Eefje Lambrecks -- whom Dutroux admits kidnapping. 6255 !GCAT !GCRIM Police searching for the bodies of missing girls in Belgium's child sex scandal found "hot spots" on Friday in houses owned by the chief suspect. A senior detective arrested last Sunday in connection with the investigations appeared in court. Gendarmerie spokesman Major Jean-Marie Boudin told reporters in the Charleroi suburb of Jumet that investigators using British radar-imaging equipment had found two "hot spots" in one house and one in another. Both houses are owned by convicted child rapist and father of three Marc Dutroux, the chief suspect in the case of paedophile abduction, porn and death that has horrified Europe. "Now we are using only the British apparatus in the cellar of the Jumet house," Boudin told reporters. "Up to now this apparatus has indicated two places of interest in the cellar." He added that the equipment had also found an "anomaly" in a house in the Charleroi suburb of Marcinelle. The British radar-imaging equipment is triggered by cavities underground. In Britain's "House of Horrors" case it was set off by underground holes which were found to contain bodies. In two weeks of searching police have so far discovered the bodies of eight-year-olds Julie Lejeune and Melissa Russo in the garden of another of Dutroux's houses in Sars-La-Buissiere near Charleroi. They have rescued two other sexually abused girls -- Laetitia Delhez and Sabine Dardenne -- from a dungeon in the Marcinelle house and are searching for at least two others -- An Marchal and Eefje Lambrecks -- whom Dutroux admits kidnapping. The Jumet house was formerly occupied by Frenchman Bernard Weinstein, an accomplice who Dutroux admits murdering. His body was found next to those of Julie and Melissa. South of Charleroi in the city of Neufchateau, the nerve centre of the investigations, chief police detective Georges Zicot appeared before magistrates on charges of vehicle theft, insurance fraud and forgery. He wore a flack-jacket. He and three other men were arrested last Sunday in connection with the car theft ring uncovered by police investigating a paedophile sex gang allegedly led by Dutroux. Dutroux has been linked to organised vehicle theft and police are investigating the child sex and theft ring together. At the same time the Belgian cabinet in its first meeting since the summer break is to adopt tougher rules on the early release from prison of convicted sex offenders. Dutroux, an unemployed electrician who owns six houses, was released 10 years early in 1992 after serving only three years of a 13-year sentence for raping five children. Belgian radio said police would travel to Bratislava and Prague to search for missing Belgian children. Dutroux has been named in Bratislava as a suspect in the murder of a young Slovak woman. Interpol's Slovak office has said he was also believed to have planned the kidnapping of at least one other Slovak woman. A spokesman for the Belgian gendarmerie's special disappearances squad said they were also likely to contact colleagues in Austria investigating what seemed to be a "child-for-hire" network spread across central Europe. Dutroux has said Julie and Melissa, who he admits paying Weinstein and associate Michel Lelievre 40,000 francs ($1,300) to abduct in June 1995, starved to death early this year while he was in jail for car theft. Belgian newspapers, citing well informed sources, reported on Friday that Dutroux' second wife Michelle Martin -- also under arrest -- had admitted that she failed to feed the children out of fear of facing them in their cell. Ten people have so far been arrested including Martin who has been charged as an accomplice. Dutroux and Lelievre are charged with abduction and illegal imprisonment. 6256 !GCAT !GVIO French Justice Minister Jacques Toubon on Friday welcomed a police crackdown on separatist violence on Corsica despite a new bombing overnight on the French Mediterranean island. "I think this is a very positive development, and shows good work by the police," Toubon said, adding that a group of Corsicans taken into custody on suspicion of involvement in bomb attacks would probably be turned over to Paris prosecutors later in the day. "You cannot completely turn around in just a few months a policy that has been adrift for 20 years," he told RTL radio, defending his government against criticisms that it appeared powerless against the separatists' longtime guerrilla campaign. Eight suspects were taken into custody between Thursday afternoon and early on Friday morning. One of them was released, but seven remained in custody on Friday morning. Their detention marked the first concrete action by police on Corsica since the start of a wave of bombing in mid-August, when nationalist militants called off a shaky seven-month truce. But as if to mock the authorities, another bomb went off overnight on the island, at a villa belonging to the daughter of a French cabinet member, police said on Friday. The small bomb exploded at the villa of Laetitia Pasquini, daughter of Veterans Minister Pierre Pasquini, in the tiny southern village of Zigliara. No one was in the villa at the time and there were no injuries, police said. Overnight on Wednesday, a bomb seriously damaged Agriculture Ministry offices located just 50 metres (yards) from a police station in the centre of the island capital Ajaccio, while a second device was defused before it could go off. After the first suspects were taken into custody, the Interior Ministry said police had "identified the group of commandos which is very probably responsible for the (latest two) attacks". "Handguns, ammunition, bullet-proof vests, hoods, scanners and detonator fuses identical to those used in previous attacks were found in searches in the homes of those held," the ministry said in a statement. Interior Minister Jean-Louis Debre, under fire for holding secret talks with one of the largest of several rival underground nationalist groups, told the daily La Corse this week he had given "firm orders" to police to round up those responsible for the bombings and bring them to justice. Judges on the island had accused Paris of taking a lax stance on guerrilla violence while conducting secret but widely-reported talks with separatists, which have now failed. Wednesday's attacks, on the heels of the new orders, had brought charges that police were powerless. The prolonged low-level separatist-inspired violence, directed mainly against government targets, has this year badly damaged tourism, the island's main industry. 6257 !GCAT !GCRIM Police searching for the bodies of missing girls using British radar-imaging equipment have found two "hot spots" in the basement of a house owned by Marc Dutroux, the chief suspect in Belgium's paedophile scandal. "Now we are using only the British apparatus in the cellar of the Jumet house," Gendarmerie spokesman Major Jean-Marie Boudin told reporters. "Up to now this apparatus has indicated two places of interest in the cellar." British police superintendent John Bennett, the man who led the investigations that unmasked Britain's "House of Horrors" serial murders, has been called in by Belgian police to help their enquiry. The British radar-imaging equipment is triggered by finding cavities underground. In the "House of Horrors" case it was set off by underground holes which were found to contain bodies. Boudin said the two "hot spots" would not be excavated until Monday to give weary police time to rest after a gruelling search for bodies which has already lasted two weeks. Sniffer dogs used to locate bodies went into the cellar of the house in the Jumet suburb of the southern city of Charleroi earlier on Friday. Boudin said they too would rest at the weekend. The Jumet house was formerly occupied by Frenchman Bernard Weinstein, an accomplice who Dutroux admits murdering. Police have been excavating around the house for four days, with attention focused on a large brick shed in the garden. Boudin said this building would be completely demolished and the concrete floor removed and excavated to a depth of five metres (yards). "We don't want to leave anything to chance," he said, adding that work there would also be suspended over the weekend. Boudin said investigators had found a "hot spot" at another house owned by Dutroux in the Marcinelle suburb of Charleroi. So far police have discovered the bodies of eight-year-olds Julie Lejeune and Melissa Russo buried in the garden of another of Dutroux's houses in Sars-La Buissiere, south west of Charleroi. Two weeks ago they rescued two other sexually abused girls -- Laetitia Delhez and Sabine Dardenne -- from a dungeon in the Marcinelle house and are actively searching for at least two others -- An Marchal and Eefje Lambrecks -- whom Dutroux admits kidnapping a year ago. 6258 !C13 !C31 !C311 !CCAT !GCAT !GPOL Breeders who led a herd of cows on a marathon march to Paris won a pledge from President Jacques Chirac on Friday that he would help save their livelihoods jeopardised by the mad cow crisis. While the 26 cows rested in the shadow of the Eiffel Tower after covering some 350 kms (220 miles) in three weeks, the head of state spent almost an hour and a half hearing the grievances of five breeders who praised his "farmers' language". "The president told us that he wouldn't let us down but he had no magic wand," Pierre Grolleau, 53, told reporters. "For the outcome, we'll see tomorrow. We're people who are not in a hurry," he added. "We told him we were losing 3,000 francs ($600) per animal and he said he couldn't compensate for all the losses because of the Budget Ministry," said Nathalie Telemaque, 29, complainging of prices that slumped because of this year's disclosure that mad cow disease appeared to be a risk to human health. Shortly after the meeting, national statistics institute INSEE said prices for beef cattle fell another 10.2 percent in July, and were down 19 percent compared to year-earlier levels. Chirac, popular with farmers since he started out as an agriculture minister lobbying for them in Brussels, struck a charismatic note with the breeders. "He talks like a farmer. We laughed a bit, we interrupted each other," Grolleau said. But the protesters from the central town of Charroux won no specific commitments or a timetable for reforms. "He spoke of reducing overheads rather than grants. He said he would safeguard cattle-breeding on a family basis," Telemaque said. Chirac also discussed creating a new logo to better identify the origin of meat imports following a show of force by thousands of farmers who blockaded roads across the country before dawn on Thursday to carry out spot checks on lorries. The cows did not follow their masters into the Elysee courtyard. "It's pretty difficult to manage stock here, even though we do have stables," quipped one Elysee aide. Wearing jeans and sweatshirts with rolled-up sleeves, the herders were also stripped of their staffs before entering Chirac's gilded offices. "That destabilised us a bit. For us they're working tools, like your microphones and cameras," Grollleau told reporters. Some 1,500 breeders from various regions demonstrated on the grassy Champs de Mars park near the Eiffel Tower, joining the small group of Charroux breeders. "Breeders Are Angry", read one banner. "S.O.S.," read another which carried a picture of a cow. Farmers had threatened an "incendiary" end to the summer holidays and Thursday's blockade was the first in a wave of social unrest expected to target the austerity-minded centre-right government in coming weeks. The main quarry was trucks carrying imports from Britain or from outside the EU -- especially cheap imports from eastern Europe, which breeders say have helped force beef prices down by a third in recent months after the mad cow crisis. The unions seek the suspension of imports of live animals and beef from third countries. Agriculture Minister Philippe Vasseur has asked the European Union to take steps to protect the EU market from imports of non-EU beef and non-EU cows for fattening within the 15-nation bloc. 6259 !GCAT !GDEF !GPOL The Dutch government gave national service its official marching orders on Friday, ending a 187-year old tradition that in recent years had foisted long-haired conscripts on a conservative military machine. Defence Minister Joris Voorhoeve said conscription no longer fitted with the army's post-Cold War role in a world where peacekeeping had taken over from all-out combat. "The horror of a mass strategic offensive from the east has faded over the years and gone are the days when our fears focused primarily on an attack on Western Europe," he said. The Netherlands joins France, Russia, Argentina and South Africa which have all ended conscription in the last three years. Germany has begun political debate on the issue. The Netherlands is now keen to develop a more mobile slimmed-down, all-professional army and has acted recently to clamp down on what it sees as slack standards. Dutch soldiers gained international notoriety in the 1970s when a wrangle over conscripts' personal freedom resulted in the whole army being allowed to sport earrings and long hair. But the new breed of Dutch soldiers will look more like their foreign counterparts -- this month two Dutch airmen were sent home from a base in Italy because their hair was too long. Senior commanders said it created an image problem. "Our product is good, but sometimes the packaging lets us down," said an army memo quoted in the Dutch media at the time. Up until now, the country's 120,000 strong army has included some 40,000 conscripts, drafted for 14 to 16 months. Towards the end of its life, national service was cut to between seven and nine months. France decided in May it would phase out conscription from 1997 and replace it with voluntary service open to both sexes. The change, to be put to parliament later this year, is part of President Jacques Chirac's plan to shift to a professional army by 2002 centred on rapidly-deployable task forces to tackle crises around the world, modelled on Britain's career military. Also in May Russian President Boris Yeltsin ordered an end to Russia's unpopular military conscription by the year 2000. From Spring of that year only volunteers will serve as professionals with the armed forces and other units such as the border guards and interior ministry forces. The decree does away with the principle of compulsory military service as the "honourable duty" of every male citizen -- a sacred cow in Russia for centuries. Argentina's President Carlos Menem announced in June 1994 he was abolishing Argentina's unpopular mandatory military service. In South Africa the Defence Force scrapped compulsory conscription for whites in February 1994. In Germany a spokesman for Chancellor Helmut Kohl's coalition partners, the liberal Free Democrats, said in June the country should scrap conscription -- one of few calls for the abolition of the draft from Germany's political mainstream. A conscript's life in the Netherlands was one of the easier ones in Europe. A poll by conscripts' union VVDM showed around 85 percent doing absolutely nothing for a quarter of their time. "After your two months' basic training you're left twiddling your thumbs and cleaning tanks until you're allowed back home," one conscript said. This compares to Russia where many parents have seen their conscripted sons fighting and dying in Chechnya, where Moscow has been battling separatist rebels since December 1994. Over the years, many young Dutchmen have tried to dodge the draft, using tactics ranging from the legal to the plain daft. Many paid fees of up to 1,000 guilders ($602) to "draft-dodge" lawyers who helped them claim conscientious objector status. The less well-off went on alcohol binges for days before their army medicals. Some tried sleeping with onions under their armpits to induce rashes and fever on the dreaded call-up day. "The penetrating smell of onions rather gave the game away," Van Dalen said. 6260 !GCAT !GCRIM Irish police seized 40 kg (88 lb) of cannabis in a sting operation at Dublin airport on Friday, only hours after a 60 kg (132 lb) haul was discovered hidden in a field in the south of the country. Police said the two hauls had a total street value of around one million Irish pounds ($1.62 million). They said the drugs were destined for sale in Ireland, which is facing a growing problem of drug abuse and smuggling, rather than in transit for some other destination. Both seizures were the result of cooperation with other European police forces, police said. The drugs seized at Dublin airport had arrived on a flight from Spain and were tracked in a joint operation with Spanish Customs. Ireland's miles of remote coastline make an ideal haven for drugs smuggling and police say the country has become a hub for the international drugs trade, used as a trans-shipment point for the import of drugs into Europe. The Irish government has made tougher Europe-wide anti-trafficking laws one of the main objectives of its six-month presidency of the European Union, and announced sweeping domestic laws in July designed to crack down on the country's growing drugs problem. ($1=.6178 Punt) 6261 !GCAT !GPOL !GPRO Hospital officials declined on Friday to confirm Swiss media reports that Zairean President Mobutu Sese Seko had undergone an operation for cancer of the prostate in a Lausanne hospital. Mobutu, who arrived in Switzerland two weeks ago for medical tests, may convalesce in a luxury hotel in Lausanne along Lake Geneva, according to the daily Tribune de Geneve. His wife and children are already staying in a hotel suite there, it added. Officials at the University and Hospital Centre of (the Canton of) Vaud, located in Lausanne, would not confirm that Mobutu had been operated on there, but said a statement on Mobutu may be issued later. In Berne, a spokesman for the Swiss Foreign Ministry confirmed that Mobutu was still in Switzerland. "He is still in Switzerland receiving medical treatment," he told Reuters, declining to be more specific. He would not say whether Mobutu's short-term visa expires on September 10, as reported by Swiss newspapers. 6262 !GCAT !GDIP Greek Foreign Minister Theodoros Pangalos, his country's ties with Albania long strained by disputes over illegal immigrant workers, will visit Tirana on Saturday to confirm improved ties between the Balkan neighbours. Pangalos was due to meet Albanian President Sali Berisha and his Albanian counterpart Tritan Shehu, officials said on Friday. After four years of tension Athens and Tirana signed an accord in May to legalise the status of Albanian immigrant workers, estimated at 350,000, and remove a long-standing stumbling block in relations. The illegal Albanian workers in Greece and the rights of an ethnic Greek minority in southern Albania have been among the most serious disputes between the two countries. Athens often accused Tirana of persecuting the minority. Albania claimed Greece had been mistreating Albanian workers and tensions reached the point of mutual diplomatic expulsions and deportations of Albanians from Greece. But most grievances were settled in a friendship treaty in March, allowing three Greek schools to open for the minority in Albania in exchange for legalising Albanian workers. "We haven't had any problems since then and the future looks even better," a foreign ministry official said. Pangalos's counterpart, Tritan Shehu, said on Wednesday Athens was again deporting Albanians. But Greece said it had not violated the May agreement. 6263 !GCAT !GDIP A peace move by Turkey, addressing Greek concerns on the Aegean islands' sovereignty and Cyprus, could be the way to break the ice between rivals Athens and Ankara, a Turkish security expert said on Friday. "The peace move could and should be initiated by Turkey, the bigger and militarily stronger party," Turkish political science Professor Hasan Unal of Bilkend University told a two-day international conference on the "post-Dayton Balkans in Europe". "Turkey should unilaterally declare that it is prepared to study all aspects of Greece's fears, particularly in military terms," he added. NATO allies Greece and Turkey have long-standing disputes over territorial rights in the Aegean Sea and the divided island of Cyprus. They last came close to war in January over rights of an uninhabited islet in the eastern Aegean and a clash was averted after U.S.-brokered mediation. Unal said mutual suspicion and lack of confidence were leading Athens and Ankara into an arms race of "bewildering speed" and that this could lead to an arms confrontation despite the fact that neither side would benefit. "The likelihood of an arms clash lies in the fact that Greece is adamant in asserting that it has the right under the new Law of the Sea to extend the territorial waters of all Aegean islands from six to 12 miles," Unal said. "This would basically turn the Aegean into a Greek lake. This being a nightmare from Turkey's point of view, Ankara has escalated the pressure by disputing Greece's sovereignty on certain Aegean islets and rocks," he added. The Aegean is dotted with Greek islands and Turkey has threatened Greece with war if it extends its territorial waters. The government has said it has the right to do so whenever it wants but has not said when. Greece has also been blocking European Union funds to Turkey stemming from a customs union agreement which went into effect in January and Unal said Ankara would keep up the pressure on Athens in retaliation. He said a solution should be found within NATO and that the EU could also play a mediation effort. Balkan security specialists have gathered on this Ionian island to discuss security concerns in the peninsula following the Dayton agreement which ended the war in former Yugoslavia. The conference ends on Saturday. 6264 !GCAT !GPOL !GREL Pope John Paul branded abortion a terrible crime on Friday, hours after the lower house of parliament in his native Poland voted to liberalise its abortion laws. The Pontiff told a delegation of bishops from Thailand that families in their dioceses needed special pastoral care in the face of growing materialism which, he said, was alien to Thai culture. "The result is the advance of a "contraceptive mentality" which not only contradicts the full truth of conjugal love but also leads to a more ready acceptance of the terrible crime of abortion," the Pope said. Poland's lower house of parliament voted to allow women to end pregnancies before the 12th week if they were too poor to raise a child or had other personal problems. The Roman Catholic Church fought a desperate campaign against the change. The Pope made no specific reference to the vote in Poland's parliament. 6265 !C13 !CCAT !G15 !G152 !GCAT A first orientation debate on the draft media concentration directive is set for Wednesday when the European Commission meets for the first time after the summer, a Commission spokeswoman said on Friday. However, that is subject to agreement by the Commissioners' chefs de cabinet, who meet on Monday that the issue is ripe for discussion, she said. The orientation debate should have taken place before the summer, but was postponed because of the complexity of the issue. The spokeswoman stressed that the debate would be a first one and that no final decision was expected. Under the draft drawn up by Internal Market Commissioner Mario Monti the Commission could ban media concentrations which achieve more than a permitted audience share. 6266 !E12 !ECAT !G15 !G151 !G154 !GCAT Talks were ongoing to establish special cases for leniency for countries straying from fiscal austerity within Europe's planned currency union, but no final decisions had been taken, a German Finance Ministry spokesman said on Friday. He stressed that these talks did not in any way focus on the initial entry criteria, which Germany insists must not be watered down. "Talks are being held about a number of special cases when nations could be allowed to stray from the upper limit for budget deficits, and natural disasters could be one possibility," he said, referring to a proposed stability pact for members. But he told Reuters in answer to an enquiry, "nothing is set yet." Discussions were still being held on the so-called stability pact which could take effect once nations are members of the currency union to ensure lasting fiscal austerity. At a conference in Austria, Juergen Stark, the state secretary in the Finance Ministry, said on Thursday that there could be exceptional circumstances in which nations may be able to overstep the three percent ceiling target for ratio of budget deficit to gross domestic product. He did not elaborate on these in the speech text, released in Germany. Germany has been lobbying particularly hard for the stability pact. The spokesman did not give any additional details. To join Europe's planned currency union, scheduled to begin January 1, 1999, targets include ones for national budget deficits not to exceed three percent of gross domestic product and for government debt not to exceed 60 percent of GDP. --Frankfurt Newsroom, +49 69 756525 6267 !GCAT !GDIP !GVIO The head of an international mediating mission defended its record on Friday in the face of criticism by pro-Moscow leaders in breakway Chechnya and insisted it was doing its best to bring peace to the region. Flavio Cotti, the chairman of the Organisation for Security and Cooperation in Europe (OSCE), told German radio the Vienna-based body viewed the conflict in Chechnya as an internal Russian problem. "The OSCE is completely involved. But one must not forget that the OSCE only has limited powers there," said Cotti, who is also the Swiss foreign minister. "Our mission in Chechnya has done all it can within the given limitations." Pro-Moscow leaders in Chechnya have criticised Tim Guldimann, the Swiss diplomat who heads the OSCE Chechnya mission, saying he was biased toward Zelimkhan Yandarbiyev, president of the self-declared separatist government. Russian peacemaker Alexander Lebed and Chechen separatist military leader Aslan Maskhadov started a new round of peace talks on Friday just outside the rebel region. Cotti said Chechnya must remain part of Russia, but the solution to the conflict would be to accord the region maximum autonomy within Russia's borders. "There is no doubt that Chechnya, according to OSCE principles, belongs to a state called Russia," he said, pointing out that Russia was an OSCE member and it was not the organisation's policy to challenge members' sovereignty. He added that the OSCE was the only international body which has been allowed into the Chechnya to monitor the human rights situation there, but that its means were restricted by the fact that the conflict was a "internal issue". "We have a small concept, the details of which have yet to be worked out. Chechnya must be accorded the maximum autonomy possible within the framework of Russian integrity," said Cotti. 6268 !C13 !CCAT !GCAT !GCRIM The recent establishment of a "Cybercop" to patrol the Internet, seeking out child pornography, is a first step towards banishing such material from the global network, a child sex conference heard on Friday. Norway's ombudsman for children, Trond Waage, said to date there was very little action that could be taken to stop the distribution of child pornography on the Internet. But he said the establishment last week of a international body to monitor child pornography on the net, a task taken on by the Norwegian branch of Save the Children, was firm action against paedophiles using the net. "This is a kind of a cybercop," Waage told a press conference at the first World Congress Against the Commercial Sexual Exploitation of Children. "We need some visible cops on the net. If you undertake these kinds of criminal activities someone will monitor you." He said Save the Children would look out for anything suspicious on the Internet and encourage other users to contact the group's site, children@risk. sn. no, if they came across child pornography on the net. All information will be handed over to the police and Save the Children would work closely with the international police authority, Interpol, to track the sources down. Save the Children's programme coordinator, Markus Aksland, said noone had any idea how much -- or how little -- child pornography was available through the Internet. He said entering the keyword paedophile brought up 5,438 hits on the Internet but this was a dramatic fall from four years ago with paedophiles pulling further back on the net, hiding themselves and using codes. Aksland said his group had engaged a team of computer experts over the past month to see what they could find and affirm whether or not child porn was a problem on the Internet. "Even now, they still found a lot of sites with very suggestive names like Barely Legal," Aksland told Reuters. "But the important thing is not to get hysterical and censor the net. The Internet is also open to a lot of good possibilities." Waage said the past month's search found child porn on three levels on the Internet; by going into pornography shops and finding the child section, tapping into paedophile networks, and by contacting people in chat forums. "Some of the material we found, I hope I never see again," Waage said. "It was four X rated with children of six or seven years old." He said the team was unable to confirm rumours that paedophile networks had set up peep shows, attaching small cameras to the side of computers allowing live, two-way vision. "If it is live and interactive you can ask them to do something," Waage said. "It starts to be like a video game. You cannot understand the real damage you are doing." Waage said a workshop at the five day Stockholm conference, that ends on Saturday, agreed that as well the Norwegian monitor group, a larger international panel was needed. "(They need to) examine legislative issues involved in cyberspace, balancing freedom of speech with the imperative of protecting children," Waage said. 6269 !GCAT !GODD A small town in southern Italy has offered to give cash to couples who take up residence or give birth to a child to try to counter growing depopulation, newspapers reported on Friday. Poggio Sannita, which has a zero birthrate, will give couples one million lire ($660) for every new born baby. If the couple takes up residence for two years it will recieve two million lire from the town council. "It's a provocative decision to try to draw the situation to the attention of the authorities, who have been indifferent so far," deputy mayor Tonino Palomba told La Repubblica. Italy has one of the lowest birthrates in the world. Unemployment is more than 20 percent in some parts of the south and is the main reason for Poggio Sannita's falling population. The town's biggest business is a textile co-operative employing nine people. "I think it's a joke," town priest Dario Moauro said. "A million lire can help these jobless people for a month, but then what?" ($1=1,511 lire) 6270 !C22 !C32 !CCAT !GCAT !GENT Two films exploring the search for self in very different ways -- "The Ogre" by German director Volker Schloendorff and American Tom DiCillo's "Box of Moonlight" -- were shown on Friday at the Venice Film Festival. Schloendorff's film, starring John Malkovitch, is a World War Two drama about a simple French car mechanic whose love of children lands him wrongly accused of sexually abusing a girl. Instead of being jailed, he is sent to the front and almost immediately captured by the Germans. Through a twist of fate, he ends up at an SS preparatory school where he befriends the boys. Finding the acceptance he never received in France, the former mechanic begins to embrace Nazism and avidly pursues the mission given him by German officers to scour the East Prussian countryside looking for new, young recruits for the school. "The Ogre" includes beautiful outdoor scenery shot in Poland, France and Norway. Other scenes were filmed at the Babelsberg studios near Berlin where the director recreated "Jagershof", the magnificent residence of Hermann Goering. The film is based on the 1970 novel "The Erl-King" by French writer Michel Tournier. "What fascinated me about Tournier's novel was that he did not approach the war in ideological or political terms, but rather through German mythology," Schlondorff told a news conference. "This film is a fairy tale." The other film screened on Friday takes place in the backwoods of Tennessee. DiCillo, an independent director who has earned respect with his earlier works "Johnny Suede" and "Living in Oblivion", offers a quirky comedy in his newest movie, "Box of Moonlight". The protagonist, played by John Turturro, is Al Fountain, an electrical engineer from Chicago who is an unhappy slave to punctuality, order and authority. When the job he is supervising in Tennessee ends earlier than expected and he is not due home to his wife and son for another week, Fountain makes an uncharacteristically impulsive decision to hire a car and drive off with no set destination. He ends up staying with a young modern-day hermit called "The Kid" who lives the woods in a half-built house and dresses like frontier-man Davy Crockett in a buckskin suit. After a few days with "The Kid", Fountain loosens up and returns to his family a more relaxed man. "As human beings we live our lives in a very certain way. It's very hard to allow ourselves to really appreciate the preciousness of life and that's what this film is all about," DiCillo said. The Venice Film Festival, in its third day on Friday, continues until September 7, when one of 17 films in competition will be awarded the Golden Lion prize. "Box of Moonlight" and "The Ogre" are among the competitors. 6271 !C42 !CCAT !E41 !ECAT !GCAT !GJOB !GVIO France's major unions called on Friday for defence industry workers to stage a day of protests and strikes on September 10 to protest at government military reform plans expected to lead to budget cuts and job losses. The appeal was a new indication of widespread labour unrest in France as the government returned to work this week at the close of summer holidays. Six major unions said after a strategy meeting on Friday that "the entire defence industry is under serious threat" and added that defence workers were "determined...to defend their jobs, the future of their employers and their status". Members of parliament and people in the regions affected by the defence reforms shared their concerns, they added. "Our federations urge workers in all categories to participate in a national day of action and strikes on Tuesday, September 10," the unions said in a statement. President Jacques Chirac announced in July a major streamlining of the French armed forces as part of a shift to a smaller all-professional military. The plan entails disbanding some regiments, closing some barracks and bases, cutting back on weapons acquisitions and restructuring certain defence industry firms. Under the plan, defence spending would drop to 185 billion francs ($37 billion) a year during 1997-2002, about 20 billion francs ($4 billion) a year less than the level set in 1994. 6272 !E12 !ECAT !G15 !G154 !GCAT !M13 !M132 !MCAT The European Commission on Friday gave the following official foreign currency rates for one European Currency unit (Ecu): Belgian Franc 39.1967 US Dollar 1.28346 Danish Krone 7.35805 Canadian Dollar 1.75474 Deutsche Mark 1.90311 Japanese Yen 139.627 Greek Drachma 304.500 Swiss Franc 1.54361 Spanish Peseta 160.894 Norwegian Krone 8.24300 French Franc 6.51225 Icelandic Krona 84.9648 Irish Punt 0.793481 Australian Dollar 1.62401 Italian Lira 1943.09 New Zealand Dollar 1.85739 Dutch Guilder 2.13375 Maltese Lira 0.459559 Austrian Schilling 13.3916 Turkish Lira 110400. Portuguese Escudo 195.149 Cyprus Pound 0.589769 Finnish Markka 5.76785 South African Rand 5.76593 Swedish Krona 8.50931 Hungarian Forint 198.486 Sterling 0.824684 Slovenian Tolar 169.376 6273 !CCAT !GCAT !GENV !GVIO Environmental watchdog Greenpeace said on Friday two Swedish activists had been thrown out of a uranium mining region in Siberia for trying to research environmental problems there. "The two were interrupted in the middle of an interview with a geologist who was explaining some of the major environmental problems in the area," Greenpeace Sweden said in a statement. It said Dennis Pamlin and Dima Litvinov were deported from the Krasnokamensk region in eastern Siberia for researching problems of the area's uranium mines, which are some of the world's largest and supply the Swedish nuclear industry. "At the police station we were forced to sign a document which said that we had broken the law of the former Soviet Union," Pamlin said in a statement. "The rules here are dictated by powerful local men who earn their living from the uranium mining." Greenpeace Sweden spokesman Mats Holmberg said the three day study trip was its second visit to the region. Its first trip in 1994 stirred media and political interest over reports of higher incidence of cancers and birth defects due to uranium mining, Greenpeace Sweden said. "Greenpeace's latest trip has, despite the interruption, resulted in new information and previously unknown environmental problems caused by the mining," the group said. 6274 !C13 !CCAT !GCAT !GDIS The Dutch transport minister Annemarie Jorritsma told the country' second chamber that there is no further need to investigate the 1992 crash of an El Al freighter which left 43 dead in an Amsterdam suburb. She said that a request from her ministry for the aircraft's waybill documentation and further information about the contents of its hold had been complied with by El Al's head office in Tel Aviv. The Dutch transport ministry had come in for pressure from a cross-section of Dutch members of parliaments in May this year, some of whom believed the aircraft had been carrying unlisted, dangerous goods. Others said they thought the aircraft was loaded with too much airfreight. Jorritsma said the latest evidence from El Al in no way supported the allegations, and added there is no justification for a further investigation into the incident. --Air Cargo NewsroomTel+44 171 542 8982 Fax +44 171 542 5017 6275 !GCAT !GPOL !GVOTE France's leftist opposition parties, scenting a new opportunity as the government battles record unemployment and general gloom, pledged on Friday to forge closer ties before 1998 elections. Lionel Jospin of the Socialists, Robert Hue of the Communists and Dominique Voynet of the Greens agreed at a Green party rally in Sanguinet in western France that despite their differences, some form of cooperation was vital. "We have to learn the lessons of the past," Jospin, narrowly defeated by Gaullist Jacques Chirac in last year's presidential elections, said at the three leaders' third joint meeting this year. During his campaign, Jospin was caught in a dilemma between moving to the left and risk being dismissed as irresponsible or appealing to the middle classes and face losing some of his core electorate to the Communist and extreme-left candidates. With a nod to environmentalists, the head of France's largest opposition force pledged to take on board "the ecological dimension". "Measuring well-being cannot stop at the growth of the Gross Domestic Product (GDP)," he told the rally. The Communist Hue called for "a partnership which respects the specific nature of each group and which leads to a new union of left-wing forces, to make change a real possibility". But he ruled out a common manifesto in the run-up to the 1998 general elections. Leftist parties are divided on a host of issues including immigration, the single European currency and nuclear energy and weapons. 6276 !GCAT !GPOL !GVOTE Greece's conservative opposition is picking up support with bold promises while press-shy Prime Minister Costas Simitis and his sleepy PASOK socialist party lose ground, election analysts said on Friday. Simitis began the month-long campaign last week as the favourite but refuses to talk to the press and has failed to make clear what he would do to boost the income of the average Greek after 10 years of harsh austerity. "If he keeps ducking press questions -- especially on the economy -- the tide will turn against him. He sounds like a snobbish man of numbers, alienated from the everyday problems of the middle-class," one analyst told Reuters. Seizing on Simitis' reservations conservative New Democracy party leader Miltiadis Evert has been promising the hardest hit voters like farmers and small-business owners higher incomes and tax breaks in his first three months as prime minister. In two press conferences this week Evert pledged to increase farmer's pensions by about 30 percent, slash fuel costs and abolish a PASOK tax law which forces small and medium businesses -- the backbone of the Greek economy -- to pay a minimum fixed tax despite their income. He said he would make up the $1.1 billion annual cost through privatisations like a 25 percent floating of the state telephone company on the Athens stock exchange. The hefty and emotional Evert said he was a practical man who did not believe the country's huge deficits could only be faced with belt-tightening measures. "I am spontaneous, and these days being spontaneous is not good in politics. But I will not sit back and simply read off numbers (in prepared speeches) over my little glasses," Evert said in a reference to the spectacled and professorial Simitis. Simitis' low-key approach has been adopted by most of his ministers who accuse Evert of false promises but avoid making any commitments of their own. Athens newspapers backing Simitis and veteran PASOK members warned that Evert's "populism" could find fertile ground among voters and called on PASOK to snap out of its lethargy. "I don't rely on press reports in Greece and abroad that PASOK will win the elections by a landslide," popular Labour Minister Evangelos Yannopoulos said. "PASOK must wake up, get close to the people and explain the rightness of its policies." Simitis, nicknamed "the Chinese" in the press for his short figure, almond-shaped eyes and fixed smile, is a complete antithesis of Evert known as the "bulldozer" for his imposing presence. Simitis tells Greeks their future lies firmly within the European Union and that they must make sacrifices to catch up with the rest of the group in the next two years so that Greece can join the European Monetary Union shortly after 1999. The snap vote comes two months before the presentation of next year's budget. Simitis wants to cut spending by $1.2 billion to trim public debt and persistently high inflation. Simitis, 60, called the election while enjoying an approval rating of 70 percent, well ahead of Evert, whose position was disputed even within the conservative camp. "This popularity will disappear if Simitis continues to address voters from the safety of his office without accepting questions," another analyst said. "Voters know very little and care very little about the EMU. They want clear answers on what he can do to make their lives better now." Simitis will start touring Greece on Monday. He will give his first campaign press conference on September 8 in the northern city of Salonika at an annual international trade fair where the prime minister traditionally lays out his economic targets for the year ahead. Poll companies were caught off guard by Simitis' snap election decision. The first countrywide opinion surveys are expected around September 10. 6277 !C12 !C21 !CCAT !GCAT !GCRIM A Finnish Internet specialist said on Friday he was closing his remailer, or anonymous forwarding system, after rejecting allegations it was being used as a conduit for child pornography. Johan Helsingius, whose remailer is one of the largest in the world with over half a million users, said in a statement he was closing down the system because the legal issues governing the Internet in Finland are unclear. "The legal protection of users needs to be clarified. At the moment the privacy of Internet messages is judicially unclear," said Helsingius, who said he set up and ran the remailer in his free time partly as an initiative to help abused children. Internet remailers are computers which receive and forward messages with a pseudonym or anonymous source. There are about five large ones in the world, and they exist to enable anonymous discussion of sensitive subjects -- for instance by victims of child abuse, potential suicides or people in politically repressed societies. Helsingius, supported by Finnish police, earlier this week dismissed claims in Britain's Observer Sunday newspaper that his remailing system handled up to 90 percent of child pornography on the Internet. "I have also personally been a target because of the remailer for three years," he said on Friday. "Unjustified accusations affect both my job and my private life." The newspaper reported the charges, by a U.S. policeman and FBI adviser, as Belgian police were investigating horrific child sex crimes and ahead of an international conference in Stockholm on the commercial sexual exploitation of children. In Helsingius's statement, Helsinki police sergeant Kaj Malmberg was quoted as saying he had found no evidence of child porn being transmitted from Finland. 6278 !C42 !CCAT !E41 !ECAT !GCAT !GJOB German building industry employers cancelled a wage contract giving west German workers a bonus pay package at the end of the year, the Hauptverband der Deutschen Bauindustrie said on Friday. A spokeswoman for the building industry group said in response to a Reuters inquiry that the bonus contract had been cancelled because it was too expensive. "The Christmas money is too high and too expensive," she said, adding that the performance-related package was sometimes equivalent to a month and a half's pay. Fresh talks with unions would begin in October, she said. Earlier, the association said it had scrapped two wage contracts for east German building workers, which were to raise their wages by 1.85 percent in September and increase their pay to 95 percent of west German levels from 92 percent in October. --Frankfurt Newsroom, +49 69 756525 6279 !E12 !ECAT !G15 !G151 !G154 !GCAT !GDIP President Jacques Chirac will try to stem market worries that France is falling behind in its attempts to meet tough criteria for a single European currency when he meets German Chancellor Helmut Kohl this weekend. Plagued by a stagnant economy, volatile financial markets, and threats of labour unrest, but publicly resolute about France's commitment to monetary union, Chirac is likely to seek support from Bonn, whose economy is performing better and whose reputation for financial probity is more polished. The two leaders, whose countries are considered the driving force of European unity, will confer on a broad range of topics including bilateral, European and international issues, presidential aides said. On Friday, the German government said it was possible that the single currency would top the agenda at the meeting. Chirac received a boost before his Bonn trip from a surprise drop, announced on Friday, in French unemployment in July. Labour ministry data showed the job seekers last month fell by 20,000 or 0.7 percent to 3,045,600 people last month. France also released trade figures which showed a surplus in June of 9.75 billion francs ($1.93 billion), down from a revised 11.24 billion surplus for May. But any relief was likely to be fleeting since the jobless rate based on internationally-accepted criteria refused to budge from its record 12.5 percent. Even Chirac acknowledged that France's job problems were far from over. "One swallow does not make a summer," he said, during a surprise appearance at a conference on youth employment in a Paris suburb. And Prime Minister Alain Juppe said the government had not made enough ground against unemployment and in fact expected "the situation to remain difficult in the coming months". But Chirac nevertheless seized on the latest figures to talk up the French economy. He said France was mastering its deficits, had a healthy trade surplus and a solid currency. But private economists said the unemployment report was probably little more than a blip due to statistical aberrations in the quiet summer months and repeated that the French economy was mired in weakness with few signs of a rebound. France's record unemployment is making it hard for the centre-right government of Prime Minister Alain Juppe to push through an austerity budget for 1997 marrying tax cuts and spending restraint in an attempt to lower budget deficits sharply without sparking severe social unrest. Chirac and Juppe, just back from holidays, are rolling out the heavy artillery in the run-up to the budget presentation and reaffirming France's commitment to meeting criteria in the Maastricht treaty on European Economic and Monetary Union (EMU). Under the treaty, France's public deficit must be cut to no more than three percent of gross domestic product (GDP) from about five percent in 1995 and a hoped-for four percent in 1996. "France will be there and will meet the necessary requirements. It will do this because that is what corresponds to the interests of all of the French people," Chirac said on Thursday. 6280 !GCAT !GDIP !GVIO Representatives from Armenia and Azerbaijan held talks earlier this week in Germany on bringing a lasting peace to the disputed Nagorno-Karabakh region, a diplomatic source close to the talks said on Friday. The source, who spoke on condition of anonymity, said Azerbaijani presidential adviser Vafa Gulizade and his Armenian counterpart Zhirayr Liparityan met to discuss the disputed enclave on Wednesday and had now flown home. An uneasy ceasefire has prevailed in Nagorno-Karabakh, which represents around 20 percent of Azeri territory, since May 1994 after ethnic Armenians drove Azeris out of the region. The conflict, which began in 1988, claimed over 10,000 lives. "The main subject (of the talks) was the search for a peaceful solution for Nagorno-Karabakh," the source said. He declined to reveal any more details about the content of the talks or their exact location in Germany. Azerbaijan has said it is prepared to grant autonomy to Nagorno-Karabakh if Armenian forces pull out, but will not accept Armenia's demands for the independence of the enclave. Russia's Interfax news agency reported on Tuesday the officials had departed for negotiations in Germany, adding that face-to-face talks between the two sides first took place last December in Amsterdam. Interfax said the discussions were being held in parallel with peace talks mediated by the Organisation for Security and Cooperation in Europe (OSCE) and the broad-based Minsk Group of countries led by Russia and Finland. 6281 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Portuguese international and mainline trains came to a standstill on Friday as train drivers began a week-long strike, a spokesman for Portuguese railways said. "We're trying to keep suburban services running but not with the usual frequency," he said. He said some regional trains were running but with delays. It was unclear how many of the 1,570 drivers had joined the strike to press for improved working conditions. Portuguese railways, Caminhos de Ferros Portugueses (CP), runs international passenger services to Spain and France. 6282 !E12 !ECAT !G15 !G151 !G154 !GCAT !GPOL King Juan Carlos on Friday sent a message of support to the new conservative government, asking Spaniards to tighten their belts so their country can join the first wave into the European Union's planned single currency. "(It) will require important decisions on the part of the government and a considerable effort from all citizens," Juan Carlos said in his opening remarks before presiding over a meeting of Prime Minister Jose Maria Aznar's cabinet on Friday. "The stakes are high enough to inspire all sectors of society to join forces and obtain the results we are hoping for," the king said. Aznar's four-month-old government has already warned Spaniards that the 1997 budget proposal it must present to parliament by end-September will be an austere package. It will be designed to meet the Maastricht Treaty criteria on budget deficit and inflation required for membership of the EU's Economic and Monetary Union (EMU). The government's ally, the Catalan nationalist coalition Convergencia i Unio (CiU), has indicated it will support the budget but has warned it will not accept any cuts in health spending. Friday's was the 13th cabinet meeting attended by Juan Carlos since he became king in 1975. "I would like this meeting to be a symbolic expression of my support and encouragement of the work you have been constitutionally trusted with in the service of Spain's best interests," he told Aznar and his ministers. 6283 !CCAT !GCAT !GDIS The windblown, chilly streets of this tiny Arctic town are all but deserted and flags are flying at half-mast beneath a brooding, clouded sky. Longyear is a town in mourning, a close-knit community that has been shattered. Disaster struck on Thursday when a Russian airliner bringing coal miners to work crashed as it came in to land at the airport, killing all 141 people on board. "It's a sight I will never forget. I will remember it for the rest of my life," said Stig Onarheim. He was one of a handful of rescuers who raced to the scene of the crash in a helicopter on Thursday, hoping in vain to find survivors. The plane smashed into a snow-capped mountain on the Arctic island of Spitzbergen on Thursday, just east of Longyear. "Imagine a big plane with a lot of luggage and people on board. Think of all that mixed together, with twisted, wrecked parts on the slope," Onarheim, 29, told Reuters. Police and local officials have sealed off the crash site, protecting it from intrusive reporters and from the polar bears that roam freely across the icy expanses. The dead were all Russians and Ukrainians, coming to work in the mining towns of Barentsburg and Pyramiden. Longyear is a Norwegian settlement of just over 1,000 people, but it also feels the loss keenly. "I have trouble finding the words to express my grief. It's a tragedy for everyone. We know many of the people who live in Barentsburg, some of them could have been on the plane," said Johan Sletten, 52. Sletten, a caretaker who has lived on the island for 30 years, said the Norwegian and Russian communities visit frequently, competing at soccer in the summer and with snow-scooter races in the winter. Teenage shop assistant Heidi Groenstein was blunter. "I'm glad it was not a Norwegian plane," she said. "Just think of it -- a mining village where so many workers die. They must be having a tough time of it now." Barentsburg, just a few hours ride by snow-scooter or 15 minutes by helicopter from Longyear, has asked to be left alone with its grief and told reporters to stay away. Around 100 Russian and Ukrainian miners were waiting in Longyear to fly home on the plane that crashed. They were given shelter in the town's church overnight and ate a sombre breakfast before getting on a bus for the airport. Another plane had been sent from Moscow to pick them up. At this time of year, the only colour in Longyear comes from the brightly-painted wooden houses. Everything else is muddy, the waters of the fjord leaden. Winter is in the air. Barentsburg is an even grimmer place, a run-down testament to the hardships of the new Russia. Spitzbergen lies some 500 miles (800 km) off the northern tip of Norway and endures one of the most extreme climates on the planet. Inhabited by fewer than 3,000 people in total, it sees the sun for 24 hours a day during summer and is plunged into round-the-clock darkness in the winter months. The terrain is mountainous, the only roads are dirt tracks. Norway rules the island group under the terms of a 1920s international treaty which gave many other nations the right to establish setttlements and exploit the coal that is still mined there. Only Russia has chosen to do so. 6284 !GCAT !GCRIM !GDIP Southeast Asia remains the centre of the world's child sex industry although a clampdown by some countries is shifting the trade to the region's less developed nations, a global child sex congress heard on Friday. Campaigners fighting child prostitution and the sale of children for sexual purposes said tighter laws were gradually scaring paedophiles and child sex tourists away from Thailand and the Philippines where the child sex trade has flourished. But as the spotlight turns to poorer neighbours, such as Vietnam, Cambodia, and Laos, trafficking of children for sexual purposes seems to be on the rise in the region. "There is a big network in our region. It is organised crime worth many billion of dollars," Thai state attorney Wanchai Roujanavong told Reuters at the first World Congress Against the Commercial Sexual Exploitation of Children. "This seems to be getting worse. We must do everything we can to stop this. Children from southern China, Vietnam, Burma and Cambodia are all at risk." The five day conference, that ends on Saturday, has heard that child prostitution has started to emerge in eastern Europe as the tourist industry develops and overseas money pours in. But Ron O'Grady, head of lobby group End Child Prostitution in Asian Tourism (ECPAT), said Southeast Asia remained by far the world's worst affected area with more countries getting involved. "Paedophiles and child sex tourists are definitely looking for new areas as laws get tighter in these countries," O'Grady told Reuters outside the Stockholm conference that has attracted over 1,000 delegates from 130 countries. "As Vietnam and Cambodia develop their tourism industry along the lines of Thailand they are being affected by these problems more and more." Cambodian non-government organisation worker, Chhoeurth Sao from Nouvelle Famille (New Family), said there had been a dramatic rise in the child sex trade in Cambodia in the past five years. He said it began in 1991 after the arrival of a 22,000 strong United Nations peacekeeping force, drafted in to oversee the country's peace process. After the peacekeepers left in 1993, demand continued from Cambodians and overseas tourists. "The number of prostitutes, and child prostitutes, has grown rapidly with Vietnamese children brought here and children moved from the country to cities," Sao told Reuters. "Now tourists can come here and buy a young girl for a week for just $300-400. They all want young girls, virgins, as they are scared of AIDS. It is getting much worse." Roujanavong said the shift in focus to Cambodia, Vietnam, and Laos began as Thailand and the Philippines began clamping down on the child sex industry. New, tough laws to be introduced in Thailand later this year set penalties of up to 20 years jail for anyone procuring children under age 15 for sexual purposes and imprisonment of up to six years for customers. "Before we could never punish customers," Roujanavong told Reuters. "Hopefully this will scare people off. We do not want sex tourists in Thailand." He said Thailand was joining the long list of countries to introduce extra-territorial laws so it can prosecute its nationals for illegal activities overseas involving children. "As we're a receiving and sending country, we need not only to protect our own but also our neighbours' children," he said. Chris McMahon from Thailand's Centre for the Protection of Children's Rights said the trafficking of children left the victims helpless in a new country. "They have no identity cards, they speak very little of the local langugae, their parents aren't there to contract the police and most likely they are illegal immigrants," McMahon told Reuters. "There's really so little they can do to help themselves." 6285 !C13 !C31 !C312 !CCAT !G15 !G153 !G158 !GCAT The European Union bowed to the inevitable by paying a wheat export subsidy for the first time for 15 months, but is fighting to keep wider export curbs intact, member country officials said on Friday. The EU's cereals management committee on Thursday subsidised a sale of 20,000 tonnes of soft wheat to one or more of the 70 African, Caribbean and Pacific (ACP) nations which depend on the EU for relief under Lome trade conventions. An export refund of 3.9 Ecus per tonne will close most of a nine dollar gap between European prices and lower levels in the United States, following a retreat in world prices. But the EU is clinging to its restrictive export tax policy for other importing nations, with a slender new export tax of 0.5 Ecus per tonne pending further falls in domestic prices. "It looks like we're going to be back in a refund situation in the near future, so people said if we're going to give refunds, let's do it for the Lome countries," said one official who attended Thursday's weekly EU grain talks in Brussels. "Are we happy about it? No, but it was bound to come," an official in a northern EU state added. Others said the decision was a gesture towards some of the world's poorest nations who have voiced increasing frustration with record grain bills and European export curbs this year. "There was a feeling we had to do something. We have an agreement with these countries," said one official. The EU grants preferential trade to ACP nations, most of them former European colonies, under the series of Lome pacts. Several ACP nations complained loudly when EU export subsidies, once a weapon in trade wars with the United States, were withdrawn from May 1995 and eventually replaced with export taxes to counter high internal grain prices. Officials say domestic wheat prices -- eight percent above EU-administered support levels in France -- are still too high and taxes should stay in force for the time being. But after reaching all-time highs near $300 per tonne, well above European prices, in April, prices on the world market have dropped back to their traditional position below European prices as new harvests replenish silos in the northern world. Exporters said Brussels' room for manoeuvre has been badly crunched by the EU's determination to keep some presence in the world wheat market while also avoiding subsidies. A weak dollar favouring American wheat exports does not help the EU's cause. Brussels is reluctant to let too wide a gap open up between its own export prices and competing prices in the United States, but cannot reduce its export taxes any further without tipping into an export subsidy market for all destinations. That is something Brussels is determined to delay as long as possible to keep pressure on internal prices, avoid a new subsidy battle with the United States and build up further savings in subsidy spending which might help pay the multi-million-dollar cost of dealing with mad cow disease. But for ACP nations, sources said the Commission appears to have recognised the tax game is up, since the minimal level of tax to other countries leaves no room to hand a credible advantage to Lome states without reverting to export subsidy. EU officials gamble that light export taxes will survive into the autumn as reports of a big harvest eat into domestic prices and narrow the gap with a fragile U.S. wheat market. 6286 !C13 !CCAT !GCAT !GHEA The number of cases of mad cow disease in Switzerland, the hardest hit country after Britain, appears to be remaining stable, with no new cases reported in August, the Federal Veterinary Office said on Friday. Thirty-five new cases of Bovine Spongiform Encephalopathy (BSE), commonly known as mad cow disease, were reported for the first eight months of 1996, down from 52 during the same period last year. Switzerland has recorded a total of 220 cases of BSE since 1990, the second-highest tally after Britain, which leads all countries by far with 15,000 cases reported in 1995. Sixty-eight new cases were reported in Switzerland during 1995. Swiss veterinary officials expected the number of cases reported to be lower this year. Veterinary experts say BSE was able to spread in Switzerland because cows were given feed made with beef bone and remains until 1990, when the practice was prohibited in an effort to stamp out the disease. 6287 !C13 !C31 !C312 !CCAT !G15 !G153 !GCAT !M14 !M141 !MCAT The European Union has provided a little relief to developing nations hit by soaring bread prices by agreeing to cushion purchase costs for European wheat for the first time in 15 months. The move to help ex-colonies eases curbs on EU wheat exports including a rare export tax imposed last year in a tight world grain market after drought in several regions. Harvests are better this year. Against this background, EU grain officials meeting in Brussels on Thursday agreed to pay an export subsidy of 3.9 Ecus ($5) per tonne to assist the sale of wheat to one or more of the 70 African, Caribbean and Pacific (ACP) nations who depend on the EU for trade relief. The subsidy, worth $100,000, or four percent of a wheat cargo, applies to just one shipment of 20,000 tonnes and represents a fraction of the ACP's $200 million annual wheat import bill from the European Union. But the decision was seen as a gesture towards some of the world's poorest nations who have voiced increasing frustration with record grain bills and European export curbs this year. "There was a feeling we had to do something. We have an agreement with these countries," said one official. The EU grants preferential trade terms to ACP nations, most of them former European colonies, under the Lome trade pact. ACP members Ivory Coast and Senegal have both appealed to the EU's executive Commission for help with grain costs in the past months, diplomats said. Wheat export subsidies, once a weapon in EU trade wars with the United States, were abandoned from May 1995 when prices started soaring due to a plunge in world grain reserves. In December, the EU went further and introduced an export tax. It added a premium to European wheat to prevent a run on the continent's depleted grain stocks and head off inflation. But after reaching all-time highs earlier this year, wheat prices have dropped sharply as big new harvests replenish silos in the northern hemisphere. Chicago wheat futures are below $5 per bushel after a "spike" in March to $7.50. Despite the new subsidy award, however, the EU signalled it was not ready to abandon export taxes for non-ACP buyers. 6288 !GCAT !GCRIM A Mafia boss accused of ordering revenge killings while cooperating with police has fuelled argument over Italy's costly and controversial witness protection programme for Mob informers. The detention of turncoat Giuseppe Ferone on Thursday also added to debate over the reliability of evidence given by former Mafiosi and raised fears that some criminals were cooperating with magistrates to further their own aims. "Giuseppe Ferone, the turncoat with a licence to kill, reopens with sickening force the problem of collaborators with justice," said the Rome daily newspaper La Repubblica in a front-page editorial on Friday. Ferone, an informer living in a safe house near Rome, was detained with four others in connection with a savage double murder on Tuesday in the eastern Sicilian city of Catania. He was accused with ordering the shootings of Santa Puglisi, the 22-year-old widowed daughter of a Mafia boss, and 14-year-old Salvatore Botta as revenge for the killings of his own son and father in 1994. Puglisi was killed as she knelt to pray at her young husband's grave. Police sources said Ferone was also believed to be responsible for the murder last year of Carmela Minniti, wife of jailed Mafia boss Benedetto "Nitto" Santapaola. A sixth person was detained in Catania on Friday. The arrests came after a married couple unexpectedly turned up a Catania police station on Wednesday and said that they wanted to "get a weight off their consciences". Ferone was reported to have denied any involvement in the killings but has admitted that a large cache of weapons seized in Catania on Thursday belonged to his clan. Nearly 1,000 former Mafia members have turned state's evidence, but Italy has for years debated the trustworthiness of once-bloodthirsty mobsters who swore a religious allegiance to an organistion committed to fighting the state. Catania's acting chief prosecutor Mario Amato on Friday agreed that the Ferone case highlighted weaknesses with the turncoat system. "But overall, the benefits of the programme justify the high costs such as this," he told reporters. Worries about the reliability of informers returned to the fore earlier this month when ferocious Mafia boss Giovanni Brusca, accused of killings and bombings, suddenly began collaborating with police. Magistrates, wary of Mafia plots to discredit other prominent turncoats whose evidence has been instrumental in convicting leading bosses in the past, have said they will treat Brusca's evidence cautiously. La Repubblica said Italy was currently protecting 6,241 people, most of them family members of turncoats, at an overall cost to the state of around $53 million. Under the official witness protection programme, Mob turncoats such as Tommaso Buscetta are given reduced sentences, a salary and a new identity with safe houses made available at home and abroad. They must however adhere to a strict code of conduct and secrecy. Some 24 people have been expelled from the programme in the past for breaking the agreement. Interior Minister Giorgio Napolitano suggested in a speech on Thursday that the state could finance the cost of police protection with seized Mafia assets. 6289 !E14 !E143 !E41 !E411 !ECAT !GCAT !GJOB The following German economic indicators are expected to be released next week: INDICATOR PERIOD PREVIOUS EXPECTED DATA DATE GDP Q2 96 -0.4 q/q;+0.4 y/y Sep 5/0600 GMT Wholesale sales July -1.2 m/m;-5.4 y/y Sep 3-4 NOTE - The release date for GDP is certain, but the Federal Statistics Office said the expected release date for wholesale sales was a target. The Federal Labour Office will release unemployment data for August on September 5th. -- Bonn newsroom, 49-228-2609750 6290 !C12 !CCAT !GCAT !GCRIM A simmering feud over digital pay television between German publishing giant Bertelsmann AG and rival media mogul Leo Kirch turned into a legal battle on Friday as they both sought court injunctions. Just a month after signing a landmark cooperation agreement, it now appears that a ceasefire between the two German media powers could break down into total warfare, endangering their joint pay TV channel Premiere. Officials of both companies acknowleged that talks were progressing at a snail's pace and the whole deal could collapse if difficulties were not resolved. "It centres around the role of Premiere and prices," a Kirch Group official said. A Bertelsmann official said: "The talks are very difficult." Kirch's digital channel DF1 sought an court injunction in Hanover to stop Premiere from claiming as exclusive its broadcast of the films "Forrest Gump" and "Outbreak". Both movies will also be shown on DF1. "Now that DF1 exists Premiere no longer has an exclusive position," said Kirch Group spokesman Johannes Schmitz. Kirch's move was followed by Premiere, which is seeking to block DF1 from claiming that it can broadcast up to 100 channels on its digital programme. "They only have what, 12 or 13 channels? The Kirch side started this by filing the injunction against Premiere. This is not our style," said Nikolaus Formanek, spokesman for Bertelsmann's television unit Ufa Film- und Fernseh GmbH. Despite the agreement last month to jointly develop digital television decoder technology and to make Premiere Germany's "premium digital pay TV channel", both companies have continued to develop their own separate digital projects. Until last month, Premiere was Germany's only pay TV channel. Bertelsmann and France's Canal Plus each hold 37.5 percent in the company while Kirch holds 25 percent. Kirch launched DF1 last month, charging 30 marks ($20.28) for its basic package, and has amassed an arsenal of films. Kirch's latest deal is a 10-year digital pay TV pact with Disney . Disney will also launch the Disney Channel on DF1. Bertelsmann and communications giant Deutsche Telekom AG, which have put together the MMBG consortium of broadcasters, launched the "Super Television" digital platform this month. Super Television will include the digital package developed by Bertelsmann and CLT and known as Club RTL. It will include digital programming from German public broadcasters ARD and ZDF and the the French Multithematiques, the digital package of Canal Plus. Club RTL will launch a package of 11 genre channels by the end of the year for under 20 marks with movies, cartoons, rock concerts and a soft porn channel, RTL Blue. It has an additional pay-per-view package with more blue movies and European soccer. However, Club RTL will not have the blockbuster power of DF1. "We don't have any finalised contracts with any major studios," said Club RTL spokesman Carlo Rock. "Our movie channel is not meant to run premium movies." That's what Bertelsmann wants Premiere to do. But Premiere's future seems more uncertain than ever. Kirch and Bertelsmann have reached a stalemate and could end up losing if they divide the market. While Kirch holds the Hollywood card, Bertelsmann still has the pay TV rights to German first division soccer, one of Premiere's main attractions. In the end, it could be that Premiere's 1.2 million subscribers will have to decide whether to go to the movies with DF1 or to the soccer stadium with Club RTL. ($1=1.4793 Mark) 6291 !GCAT !GENT The winner of the 1996 Nobel Peace Prize will be revealed on October 11, the Nobel Foundation that awards the prizes said on Friday. The foundation said winners will receive 7.4 million Swedish crowns each ($1.12 million). The peace prize -- the most prestigious of the prizes -- will be announced in Oslo at 11 a.m. (0900 GMT). All other prizes are announced in Stockholm. The Nobel Assembly at the Karolinska Institute will announce the winner of the medicine prize at 1100 local time in Stockholm on October 7, the first to be awarded. The Royal Swedish Academy of Sciences will announce the winner of the economics price on October 8 at 1130 (0930 GMT) at the earliest and the physics and chemistry prize at 1145 (0945 GMT) and 1400 (1200 GMT) respectively at the earliest, the foundation said. In keeping with tradition, the Swedish Academy will set the date for its announcement of the literature prize winner later. Sweden's central bank, the Riksbank, awards the Prize in Economics, which is also worth 7.4 million crowns. Winners will also be announced on the Internet at the address code http://www.nobel.se. 6292 !GCAT !GDIP The German government urged Israelis and Palestinians on Friday to avoid any course of action that might jeopardise the peace process in the Middle East. Israel announced this week the expansion of Jewish West Bank settlements surrounding Jerusalem and the demolition of an Arab community centre in East Jerusalem. City officials there said the centre was being erected illegally. But Palestinian President Yasser Arafat said the moves by Prime Minister Benjamin Netanyahu's government were tantamount to war. Tension has been rising in the region since. "We believe that the Israeli settlement policy in the occupied areas is an obstacle to the establishment of peace," Martin Erdmann, a spokesman for Bonn's Foreign Ministry told journalists. "All concerned must avoid taking any course of action that could pose an obstacle to the peace process and which could make a peaceful solution difficult," he said, as news came of a renewed breakdown in Arab-Israeli peace talks in Jerusalem. Erdmann said that Bonn supported European Union efforts to persuade Israel to stop further Jewish settlement on the West Bank. Germany's Defence Minister Volker Ruehe will pay a state visit to Israel from September 2 to 4 aimed at deepening friendly relations with Germany, the defence ministry said in a statement. Ruehe had visited once before in 1993. Ruehe plans to meet his Israeli counterpart Yitzhak Mordechai and Israeli President Ezer Weizman. He was also expected to meet Prime Minister Netanyahu and opposition leader Shimon Peres for talks. The main issues on the agenda were the peace process and security in the Mediterranean region. Ruehe also planned to visit Israeli airforce troops in the Negev desert, as well as an Israeli naval base in the Eilat bay. 6293 !C17 !C34 !CCAT !G15 !G157 !GCAT Economics Minister Guenter Rexrodt said on Friday he is trying to reach a compromise with the European Union in the row over subsidies for auto maker Volkswagen AG. Rexrodt told journalists he hoped to bring the interests of the east German states into line with the legitimate claims of the European Commission. The east German state of Saxony has given VW 91 million marks ($61.5 million) in aid over and above the 540 million marks approved by the EU, to build two plants. EU Competition Commissioner Karel Van Miert said the excess subsidies threaten to spark a spiral. Discussions continue on all levels, Rexrodt said, adding that he would speak with Van Miert again on Friday. Saxony has filed a complaint in the European Court in Luxembourg seeking clarification, and Germany and the EU have each indicated they are preparing complaints of their own, though they will hold off for the time being. The Treaty of Rome provides for liberal treatment of state subsidies related to the unification of Germany, but the EU still claims a right to exercise control. Rexrodt said he also hoped VW would show flexibility in the case, but he declined to be more specific. Van Miert has suggested the excess subsidies could be placed in escrow until the matter is settled, but VW has rejected the proposal. 6294 !E13 !E131 !ECAT !G15 !G154 !GCAT Inflation in the European Union remained steady in July, rising at an annualised rate of 2.5 percent, Eurostat, the EU's statistical office said on Friday. The latest figures are the lowest since Eurostat began compiling them in 1983 for what are now the EU's 15 member states. Among the group, Finland recorded the smallest rise in prices with a gain of only 0.5 percent, while inflation in Greece rose at an 8.6 percent pace, the highest in the EU. Following are the July inflation figures for 15 countries. Finland 0.5 pct Britain 2.2 pct Sweden 0.6 Denmark 2.3 Luxembourg 1.3 France 2.3 Ireland 1.4 Italy 3.6 Germany 1.6 Spain 3.7 Austria 1.9 Portugal 3.9 Belgium 1.9 Greece 8.6 Netherlands 2.1 6295 !E12 !ECAT !GCAT !GDIP The World Economic Forum said on Friday that a Middle East economic summit should go ahead in Cairo in November as it was vital to maintain foreign investor confidence in the region. The Geneva-based group, which organises the annual gathering of world political and business leaders in the Swiss resort of Davos, said that cancellation of the Cairo summit would be a catastrophe for all countries of the region. Egypt has shown signs of cold feet about the summit, saying it would be pointless unless Israel made a serious effort to carry out peace accords. The talks would aim to promote economic integration between Israel and its neighbours. In a statement, the Forum said summits held in Casablanca in 1994 and in Amman last year had been instrumental in bringing a "business dimension to the peace and reconciliation process". "The effect of the current political environment is to slow down this momentum and enthusiasm. Should this trend continue it will be very difficult, if not impossible, to reconstitute economic optimism on the part of the international business community," it said. "The building of trust generated to date will be jeopardised," it added. Klaus Schwab, founder and president of the Forum, was quoted as saying: "The cancellation of the Summit in Cairo would certainly be a catastrophe for all countries of the region." 6296 !GCAT !GDIP Norway joined Egypt on Friday in criticising Israel's decision to build up settlement areas in the West Bank and said Egyptian Foreign Minister Amr Moussa would visit Oslo for talks next week. Norway has a role as a broker in the Middle East peace process, since it hosted secret meetings between Israeli and Palestinian negotiators that led to the signing of the Oslo peace accord in 1993. "We are certainly concerned about the Israeli initiative with regard to the settlements," Foreign Ministry spokesman Ingvard Havnen told Reuters. "We think this is the wrong signal with regard to the resumption of the peace process." Havnen said Moussa would visit Oslo from September 4 to 6 and hold talks with his Norwegian counterpart Bjoern Tore Godal and Prime Minister Gro Harlem Brundtland. "The peace process will be high on the agenda...A major item will be how Norway can best contribute to get the peace process moving forward again," Havnen said. Havnen said Norway hoped the revival of talks on Thursday between senior Israeli and Palestinian negotiators would lead to a solution on redeployment of Israeli troops in Hebron. Norway has 20 observers in the West Bank city, where 450 Jewish settlers live among more than 100,000 Palestinians. The mandate for the observers, the only international monitors present, expires on September 12. "We expect a decision from the Israeli side soon. If a solution is found we are prepared to stay and help move the process forward. If there is no solution, the situation in Hebron will be too difficult and we will definitely consider withdrawing," Havnen said. 6297 !C42 !CCAT !E41 !ECAT !GCAT !GJOB The German building industry has cancelled existing wage contracts for workers in the east German states, the Hauptverband der Deutschen Bauindustrie industry group said on Friday. Association Vice-President Wilhelm Kuechler said on German television that the step was an emergency measure. The existing contract was to give east German workers a 1.85 percent pay rise on September 1 and lift their salaries to 95 percent from 92 percent of west German workers' wage levels on October 1. Kuechler later told a news conference: "We see this as the only chance to . . even out the competitive situation a bit." He said east German firms could not afford to increase wages to the levels agreed. Kuechler urged construction union IG Bau to enter talks on an alternative contract as soon as possible. This was as much in workers' interests as in the interests of employers, he said. The industry had indicated its intention to cancel the contracts -- a highly unusual step -- on Thursday. Construction union IG Bau vowed to battle the plans, threatening strike action if employers went ahead with them. --Frankfurt Newsroom, +49 69 756525 6298 !E11 !E12 !ECAT !G15 !G151 !G154 !GCAT Italy's economy slowed in the second quarter of 1996, putting further strain on the government's flagging efforts to become a founding member of the single European currency. Provisional data released by statistics office Istat on Friday, showed Italy's gross domestic product (GDP) falling 0.5 percent between April and June compared with the first quarter. On a year-by-year basis the economy grew 0.5 percent. Analysts said faltering industrial output, the strong lira and stringent Bank of Italy monetary policy had all combined to stall economic growth. "Given that under a year ago we were experiencing growth of over three percent, I think one can say Italy is now in a mild recession," said Riccardo Barbieri, Italian analyst with Morgan Stanley in London. In the first three months of 1996, GDP grew 1.5 percent year-on-year and 0.5 percent quarter-on-quarter. Most economists expect the current economic cycle to touch bottom this quarter followed by a slight pick up towards the end of the year, but this will not provide much comfort to the Treasury as it grapples with the 1997 budget. The package is due to be unveiled by the end of September and Prime Minister Romano Prodi hopes it will significantly boost Italy's chances of complying with the Maastricht Treaty and joining European economic and monetary union (EMU) by 1999. Economists say he faces a daunting challenge. "The GDP data is certainly not good news for the government in terms of the budget. It was a difficult-enough task in the first place and they are now getting no help from the business cycle," said Ilaria Fornari, analyst at JP Morgan in Milan. The government has said the budget will cut next year's deficit by 32.4 trillion lire ($21.4 billion), but it has already promised not to touch welfare spending or pensions. Investors fear the latest GDP data will persuade Prodi to produce an even tamer budget than already feared. "Budget policy has to remain restrictive despite the fact that the economic cycle demands a more expansive policy. Maastricht should prevent Prodi giving a spur to the economy," said Lucia Trevisan, economist with Milan brokers Caboto. The GDP stagnation has not come as a surprise, with recent industrial production and order data in retreat and Italy's main European trading partners all suffering economic slowdowns. Despite regular cries of alarm from senior industrialists, the Bank of Italy maintained high interest rates for over a year before finally easing its key discount rate in July. Indeed, with inflation falling sharply in recent months, real Italian interest rates have actually risen. "The Bank of Italy's restrictive monetary policy has weighed especially heavily on GDP," Trevisan said. The economy has slowed more rapidly than the government has anticipated. Just over a year ago it was still predicting annual growth of three percent for 1996 against a current target of 1.2 percent. Most analysts forecast growth of closer to 0.7 percent. This decline will inevitably hurt tax inflows and at the same time lead to more unemployment benefit payments, thereby jeopardising the government's public sector borrowing targets. However, analysts are confident the economy will not slide much further, pointing to a pick up in real salaries this year, for the first time since 1992, which should boost consumption. In addition, other European economies are starting to turn around, giving hope to Italy's army of exporters. $1 = 1,512 6299 !GCAT !GCRIM Teachers are preparing to try explaining the horrors of Belgium's paedophile sex and murder case to children when school starts on Monday, and will step up efforts to make them more wary of adults. "We know we will get questions about the Dutroux case, and we are preparing for it," Myriam Eynikel, a primary school teacher in Brussels' Strombeek suburb, told Reuters on Friday. Eight-year olds Julie Lejeune and Melissa Russo were found two weeks ago buried in the garden of a house owned by Marc Dutroux, the main suspect in the child sex case that has traumatised Belgium and sent waves of indignation across Europe. Two other girls kidnapped by Dutroux and abused were rescued. The search is still on for other victims. Massive media coverage of the case has made children as young as six or seven aware of the atrocities. "I hope all teachers will talk to the children about this, this is a task for the schools," Flemish regional Education Minister Luc Van den Bossche told Belgian radio RTBF. Eynikel and her colleagues agreed earlier this week to invite the Fund for Kidnapped and Missing Children to speak to teachers and parents in October. Afterwards, lessons will focus for a week on kidnap prevention. Meanwhile, she will rely on experience with her own eight- year old on how to answer questions about the unanswerable. "My daughter is terrified, she is glued to every newscast. We have tried to tell her there are adults with bad intentions, without focussing on the sex-abuse aspect," she said. Schools here have some experience with making youngsters aware of kidnap risk, as the disappearance of Julie and Melissa in June 1995 inspired many training programmes. One of them is Parents-Secours, whose five educators have spoken to more than 6,000. In the coming weeks they will be speaking in schools nearly every day. Myriam Graillet of Parents-Secours said the group teaches children to recognise potentially dangerous situations. Children are told that it is acceptable to say "No" to an adult. They learn to develop defensive attitudes -- like referring strangers who ask for directions to adults, running to shops or houses when they are approached by someone suspicious or start shouting when they think they are in danger. "This provides some protection against the neighbourhood paedophile, but not against kidnappers using force," she said. Paul Marchal, father of 19-year old An who was kidnapped by Dutroux last year and is still missing, told Reuters parents and teachers should speak as frankly as possible to their children. "Be concrete. Tell your five-year-olds that if they go with a stranger, they will not see mummy and daddy anymore," he said. In Bla Bla, a children's programme on RTBF television, children made drawings of the horrors they had seen on television: dungeons, iron bars, small bodies underground, a policeman chasing Dutroux -- all in bright pencil colours. The series' talking puppet Bla Bla echoed many children's bewilderment that Dutroux himself was a father of three. "He is just like the other adults, like our parents," he said. One of the children, eight-year old Aurore, had brought a dead insect in a bottle of water to the studio. "This is a centipede. I say it is Dutroux and his wife. I want to torture them. Sometimes I put the bottle in the fridge, so that they are very very very cold," she said. Child psychologist Jean-Yves Hayez told the children Dutroux was a sick man, who was probably treated badly himself when he was a child, and said there are more good adults than bad ones. "Because everybody is talking about bad people now that doesn't mean that there are a lot of bad people," Hayez told the children. 6300 !C22 !CCAT !E12 !ECAT !G15 !G151 !G154 !GCAT Germany's Bundesbank on Friday issued an information sheet on the run-up to European Economic and Monetary Union (EMU), the first of a planned series by the central bank eager to stress its commitment to Europe. The series of leaflets,the first of which focuses on cross-border payments, aims to inform the public, in particular the financial sector, of the various preparations for EMU before its scheduled start at the end of the decade. Bundesbank President Hans Tietmeyer in the report's foreword repeated his emphasis on the need for a solid and stable single European currency. "A stable currency union above all needs a lasting, workable basis. Therefore the participating countries must fulfil the criteria completely... and be able and prepared to direct themselves toward lasting stability," he said. Countries must in particular commit themselves to lasting budgetary discipline, Tietmeyer added. Germany's own 1995 budget deficit exceeded the Maastricht Treaty's required ratio of three percent of gross domestic product, triggering widespread fears that the common currency, the Euro may not be launched as scheduled. The Bundesbank's leaflets are published at a time the central bank struggles to shake off a reputation that it harbours an overriding loyalty to the deutsche mark rather than the Euro -- efforts which some observers find unconvincing. The leaflet describes the activities of the European Monetary Institute, the Frankfurt-based forerunner to the European Central Bank, charged with monitoring preparations for a move to a single currency. The EMI is currently working on drawing up legal and technical conditions for the system, scheduled to begin with all those nations meeting the strict entry criteria on January 1, 1999. The leaflet outlines the stages ahead of the move to the Euro and has a special section on cross-border payments, a hot topic for the EMI, which earlier this months urged central banks to modernise their national payment systems to facilitate smooth transfer of funds throughout the single currency area. The Bundesbank said it was starting this year to adapt its payments system to cope with the larger volumes of cross-border funds traffic after EMU. It said it needed to develop so called national "interlinking components" to link its own system with TARGET, the sophisticated crossborder payments system being developed by the European Monetary Institute. The EMI wants to test TARGET -- a link between national bank payment systems allowing international transfer of funds on a real-time basis -- in 1997. 6301 !E12 !ECAT !G15 !G151 !G154 !GCAT To try to ward off undesirable currency speculation, a single European currency could in practice begin as early as 1998 when the EU decides which countries qualify, analysts said on Friday. Former European Union monetary officials and economists have begun saying that the only way to ensure that Economic and Monetary Union (EMU) starts on time on January 1, 1999 is for the Bundesbank to basically underwrite currency stability among the currencies in the EMU zone once the members are announced. The membership decision is due to be made in the spring of 1998, but uncertainty remains over the period leading up the January 1, 1999, when national currencies will be "irrevocably" locked to the Euro, the new single currency. "The period between the decision on EMU and its implemenation is potentially a tricky one," says Bernard Connolly, an adviser to AIG Trading Corporation and a former EU monetary official. Connolly lost his job at the European Commission earlier this year after writing a book that warned of dangers from a single currency. In the current issue of "International Economy," a Washington-based publication, Connolly argues that for a country like Belgium -- widely seen among EMU's first entrants -- there would be a strong temptation to reduce the real burden of its outstanding debt with a currency devaluation immediately after being chosen. Belgium's outstanding debt is the highest in the EU at well above 100 percent of GDP. Under the Maastricht treaty, countries wishing to join EMU must bring their debt level near 60 percent of total output. While the Belgian government itself might not want to opt for such a strategy, the mere knowledge of this possibility could create a significant risk premium on Belgian debt. "To counter speculation on this risk and other sources of speculative activity, the conversion rates will be indicated at the same time that a decision on participation is announced," Connolly said. "These rates will be (Exchange Rate Mechanism) central rates and the Bundesbank will be prevailed upon to guarantee unlimited intervention to support those rates." It is a situation which the Bundesbank has never faced. Other economists agree there would be a strong incentive to defend the central parity rates that presently exist among the core group of EMU members. "Those chosen will have to announce fixed exchange rates as soon as they are picked," says Peter Kenen of America's Princeton University. "The Bundesbank is going to have to be prepared to do something it never has had to do -- intervene in an unlimited fashion," he added. But some observers, while agreeing with the basic premise of the argument, are less concerned about market speculation provided that the countries chosen have a high degree of economic convergence. "To me a good deal turns on whether the exchange rates ruling at the time of the announcement are regarded by the market as credible," says Christopher Taylor, a senior fellow at London's National Institute for Economic Research. "But I think what one is saying is that the governments that go ahead with EMU will have to start pooling their monetary policies," he added, leading to a "de-facto monetary union." A more important risk, adds Taylor, is some external shock, such as an oil price rise, which threatens the stability of the EMU area during the relevant period. On the central issue of whether the Bundesbank is prepared to take the lead in ensuring monetary union goes off as planned, experts think the political pressure would be so great that it would have little choice. "They could justify it based on the political decision taken on the single currency," adds Connolly. "It really wouldn't matter any more if the asset side of their balance sheet is denominated in marks or French francs." 6302 !G15 !GCAT Following are highlights of the midday briefing by the European Commission on Friday: In response to a question, Commission spokesman Joao Vale de Almeida said the August 30 deadline set for a decision on whether to organise genetically modified corn applied to the Council not the Commission. He said the three committees that are considering the question will meet next week. The Commission will make a decision after it gets their opinions. - - - - The Commission released the following documents: - IP/96/813: Commission approves four grants worth 1.43 European currency units to support humanitarian assistance in Chad, Montserrat, Costa Rica and Thailand. - Memo/96/79: Calendar for the week September 2-7 1996. - Memo/96/80: Relations between the EU and Kazakhstan. - Memo/96/81: Relations between the EU and Kyrghystan. - Memo/96/82: Relations between the EU and Mongolia. - Eurostat news release 52/96: EU annual inflation figures for July. 6303 !C12 !C41 !CCAT !GCAT !GCRIM !GPRO A Berlin court has withdrawn its arrest warrant for Thyssen chairman Dieter Vogel in an alleged fraud case. Berlin justice spokesman Ruediger Reiff said on Friday the court no longer saw a danger that Vogel would flee the country, which had been given as the main reason for the warrant. Vogel was briefly detained under the warrant on August 9 but was immediately released on bail. Berlin prosecutors have been investigating whether Vogel and other Thyssen executives defrauded the Treuhand privatisation agency of 73 million marks when the company bought an east German metals group after unification in 1990. Prosecutors suspended their investigation in 1993, but reopened it earlier this year though no new evidence has been publicly presented. Vogel's arrest unleashed a storm of protest from corporate board members who claimed that prosecutors' aggressive stance in the case made it harder to do business in Germany. -- Terence Gallagher, Bonn newsroom, 49-228-2609750 6304 !E11 !E12 !ECAT !GCAT !GPOL Economics Minister Guenter Rexrodt, in his first news conference after a 10-week bout with malaria, said on Friday the German economy is also back on its feet. Repeating earlier estimates, Rexrodt said gross domestic product (GDP) grew around one percent in the second quarter of 1996 from the same quarter a year ago. "The German economy is regaining its footing," he said, standing by the government's April forecast of 0.75 percent economic growth for 1996 and 2.0 to 2.5 percent in 1997. "This figure is secure on the downside. It will not be less," Rexrodt said, referring to the projected 1996 growth. "Although no official data are yet available ... the upward development is increasingly confirmed by the facts at hand." The labour market remains in the doldrums, however. Rexrodt said even with the higher economic growth forecast for next year, a drop in unemployment depends on a greater readiness of companies to invest. "Investment funds are on hand, but action depends on the signals people get from government savings measures," he said. Chancellor Helmut Kohl's Programme for More Jobs and Growth, aimed at cutting government spending and easing corporations' regulatory burdens to encourage investment, is making its way through parliament, and most of the package should be enacted by mid-September. "These (measures) are painful and unpopular, but they are unavoidable if growth and employment are to rise," he said. The package has met stiff resistance from unions and opposition Social Democrats, who say austerity will aggravate joblessness. Rexrodt said the economy is getting back into swing following an unusually severe winter, which hit the construction sector especially hard. Growth in the second quarter was substantial when measured from the previous quarter's output, when GDP shrank 0.4 percent from the previous quarter, he said. The government is due to announce data on second quarter gross domestic product on September 5. Rexrodt said he expected the economy to continue to expand moderately in the second half of the year, fueled by exports and reviving capital investment. Exports are also rebounding thanks to economic growth for key trading partners, gentler rises in unit-labour costs, and a retreat in last year's overvaluation of the mark. The mark's current level is still not ideal, but most German companies can live with it, he said. Domestic industrial orders are rebounding as companies plan incremental increases in investment for this year. Capacity utilisation stopped declining in the second quarter. Business confidence is rising, according to the Ifo survey, while inflation remains subdued. East German manufacturing is on the mend, but high unit-labour costs remain a major handicap, he said. -- Bonn newsroom, 49-228-2609750 6305 !E12 !ECAT !GCAT !GPOL !M13 !M132 !MCAT President Jacques Chirac told a conference on Friday that France was mastering its deficits, had a healthy trade surplus and a solid currency. "Things are not going so badly. France has mastered its deficits...the currency is solid," he told a business conference. Chirac said France obviously had obstacles to overcome but was correcting the problems of the past. "Certainly, France faces plenty of problems," he said, adding these stemmed from conservatism and a willingness to drift which had impoverished the country. "It is always painful and difficult but we can only succeed if we have high morale. Those who sap the morale of the French people bear a heavy responsibility," he said. Commenting on news this morning of a slight fall in unemployment in July, Chirac said it was welcome but acknowledged that not too much could be read into it. "One swallow does not make a summer," Chirac said, addressing a conference held by the CNPF employers organisation. 6306 !GCAT These are leading stories in Friday's afternoon daily Le Monde, dated Sept 1. FRONT PAGE -- Paris and Bonn reaffirm that Economic and Monetary Union require austerity as France posts 0.7 percent dip for July unemployment. BUSINESS PAGES -- Even Germans starting to doubt wisdom of strong mark policy. -- International investors show increasing wariness of France as foreign exchange operators say Bank of France intervened on Thursday to keep franc below 3.43 to the mark. -- AOM airline chairman Alexandre Couvelaire promises to spin off 39 percent stake in Euralair in response to trade union ultimatum but defends July pact with Air Liberte. -- Paris Newsroom +33 1 42 21 53 81 6307 !E41 !E411 !ECAT !GCAT !GJOB A drop in French unemployment in July, while good news for the government, is mostly an aberration due to seasonal factors and is not likely to be confirmed, economists said on Friday. "This looks almost too good to be true," JP Morgan economist David Naude said. "Summer months' unemployment readings can be highly distorted. We continue to hold the view that unemployment will rise. Not as fast as previously, but the upward trend is firmly in place," he said. The labour ministry reported on Friday that the number of people unemployed in France fell by 20,000 in July. But the unemployment rate calculated under International Labour Organisation (ILO) criteria stuck stubbornly to its record 12.5 percent. Economists said the report did not herald a turnaround in the French economic situation, cautioning that more data was needed to confirm a brightening economy. "Obviously, it's good news for the government, but is it for real? It's not clear," Smith Barney economist Steven Englander said. "The other indicator series haven't been that positive." Industrial production data, released on Wednesday, showed that manufacturing output rose 0.5 percent in June but that overall industrial output excluding construction fell 0.2 percent in the month. Economists said much of the rise in production, which was strongest in the car sector, was linked to the approaching end of government car-buying incentive programmes. Naude said that even if the fall in July were real, it was due mostly to a drop in the number of new jobless registrations, not an increase in the number of jobs offered, which would have been a sign of a more robust jobs market. The labour ministry reported that the number of jobless register exits rose but that two thirds of the exits were due to reasons other than finding a new job. The reasons included retirement, going on to social security and lack of administrative control, among others. Naude and other economists pointed out that the ILO series showed a 14,000 rise in jobless roles. ILO measures exclude anyone who did any work during the month at all. Englander called the employment report an aberration and said it was unreliable and difficult to interpret. "It's too aberrant, nobody believes French employment is going to grow by 20,000 a month," he said. -- Christopher Noble, Paris Newsroom + 331 4221 5071 6308 !E41 !E411 !ECAT !GCAT !GJOB The number of registered unemployed in Portugal fell 2.2 percent month-on-month in July to 455,314, but was up 8.1 percent year-on-year, the Institute for Employment and Professional Training (IFEP) said. July 96 June 96 July 95 Registered unemployed 455,314 465,347 421,076 Percentage change (yr/yr) +8.1 +11.0 -- NOTE - The IFEP does not express the number of unemployed as a percentage of the total labour force. Its figures for the number of people out of work are consistently higher than those of the National Statistics Institute (INE), the government's official yardstick for unemployment. -- Lisbon newsroom 3511-3538254 6309 !GCAT !GCRIM !GVIO German prosecutors, who hope to convict former East Berlin spymaster Markus Wolf of Cold War skulduggery after failing to make treason charges stick, said on Friday they had added a third kidnapping to their case against him. The Federal Prosecutors Office in Karlsruhe said they had charged Wolf with playing a key role in the brutal 1962 kidnapping of a disgraced Stasi (Ministry for State Security) officer who deserted and fled to the West. Germany's highest court had thrown out a six-year sentence against Wolf, saying he should not be convicted for spying against the Federal Republic of Germany just because he had inadvertently become the citizen of his former arch-enemy. But it left prosecutors the option of charging Wolf, 73, now an author and frequent chat show guest, with other offenses which were criminal in both halves of divided Germany. In March he was charged with two Cold War kidnappings. The latest charge of kidnapping and grevious bodily harm will be added on to these. Prosecutors say Wolf was responsible for the abduction of former Stasi officer Walter Thraene from Austria back to communist East Germany. Thraene and his girlfriend were lured to a hideout and beaten unconscious before being spirited back to East Berlin. Thraene then spent more than 10 years in prison in East Germany and his girlfriend more than three years. Prosecutors say Wolf issued the orders and directed the operation. To cover up his tracks, Wolf destroyed incriminating documents, the prosecutors' statement said. Thraene had been demoted in 1962 because of his love affair, which at the time was regarded as being at odds with the Socialist morality in the ex-Soviet satellite state and the rules of working for an intelligence service. The couple fled to Austria a few months later. 6310 !E12 !ECAT !G15 !G154 !GCAT Germany's Bundesbank said on Friday it was working to upgrade its payments system to prepare to cope with a higher volume of cross-border transactions after Europe adopts a single currency. The Bundesbank explained its efforts on payments in an information sheet about European Economic and Monetary Union (EMU), the first in a series planned by the German central bank. The Bundesbank said it would centralise data processing functions of its EIL-ZV payments system at two centres, in a bid to create a better technical basis to cope with the longer hours and larger volumes of cross-border payments after EMU. In addition, it said it needed to develop so called national "interlinking components" to link its own system with TARGET, the sophisticated crossborder payments system being developed by the European Monetary Institute. The system would entail "a level of functionality hitherto unknown in Germany," the Bundesbank said. "Not all details have been finalised in the varied preparations (for EMU)," Bundesbank President Hans Tietmeyer said in an introduction to the leaflet. "However important signals have already been sent. Work is pushing ahead continually on that basis," he said. --Frankfurt Newsroom, +49 69 756525 6311 !GCAT Prepared for Reuters by The Broadcast Monitoring Company DAILY TELEGRAPH -- EX-LOTUS MAN FIGHTS BACK Neeraj Kapur, former finance director of Lotus Cars, has accused the company of acting maliciously and attempting to renege on compensation due to him. The charges were made in defence against a writ issued by Lotus claiming damages for alleged misappropriation of company cars. Kapur was one of the four directors "removed" by the owner of Lotus, Romano Artioli, after a boardroom row. -- US NAMES TO DEMAND REHEARING OF APPEAL Lawyers representing the American Names who sought to block Lloyd's of London's rescue plan are to finalise a motion for a rehearing of the appeal that overturned a judgement and allowed the insurance market to proceed with its plan. Lloyd's is to declare its 3.2 billion stg offer unconditional after receiving acceptances from more than 90 percent of its 34,000 members around the world. Lloyd's governing council met to discuss the level of acceptances and to set a new deadline for replies. -- SUMMER HOME LOANS SURGE According to the British Bankers' Association, gross mortgage lending by the main British banks in July stood at 2.6 million stg, a 66 percent gain on a year earlier and 17 percent up on the pervious month. The gains provide further evidence of the recovery in the housing market. The figures mean that almost 14 billion stg has been advanced in gross mortgages by the banks, which include eight of the 20 largest mortgage lenders, during the first seven months of the year. THE TIMES -- ROGUE TRADER COSTS JARDINE 12 MILLION STG The oldest established investment bank in Hong Kong, Jardine Fleming, has paid investors 12 million stg after a trader diverted profits into a personal account. Companies within the Fleming group have been fined 700,000 stg and ordered to pay 122,000 stg in costs. A five-month investigation by the Investment and Management Regulation Organisation, the UK watchdog for fund managers, and the Hong Kong Securities and Futures Commission established that Armstrong, a former senior fund manager and director of Jardine Fleming Investment Management, had engaged in the late allocation of deals after changes in the price of the investments traded had occurred. -- SAVE AND PROSPER FINED FOR PEP BREACHES Save and Prosper Equity Plan Managers has been fined 115,000 stg for rule breaches relating to personal equity plans invested directly in shares. The Imro announced that a fine on S&P was based on six charges and rule breaches between November 1991 and May 1996. S&P has paid compensation of 69,000 stg to 4,600 Pep investors and reimbursed 30,000 stg to 849 former Pep clients. The charges on which Imro found S&P guilty include failing to identify and correct differences and allowing overdrafts on client money accounts to a point in April 1995 when 13,000 investor accounts were overdrawn by 500,000 stg. -- SEARS SET TO SHED 1,400 MORE JOBS The administrators Price Waterhouse have confirmed that the remainder of the shoe shops that returned to the Sears group as a result of the collapse of Stephen Hinchliffe's Facia empire are to shut down. The closures could lead to 1,400 job losses. The closures will mainly involve branches of Freeman Hardy and Willis and some Curtess and Trueform outlets. Sears believes that the 25 million stg provision it made at the time it put Hinchliffe's shoe business into administration is adequate. THE GUARDIAN -- HILTONS CHECK IN TOGETHER AGAIN The hotel and betting chain Ladbroke has announced plans to reunite the Hilton Hotel brand after a 32-year split. Ladbroke is joining forces with the American Hilton Hotel Corporation, in a pact confirming Hilton as the world's biggest name in hotels. Ladbroke chief executive Peter George said the deal would be worth "tens of millions of dollars" to each company. HHC will take a five percent stake in Ladbroke as part of the deal, which ends the rumours of a merger between the two companies. -- US DISMISSES PLAN TO REGULATE TRANSATLANTIC AIR FARES The US government has ended British plans to police the North Atlantic with a regulatory body that would prevent fare increases among competing airlines. The move has shown up the size of the disagreement between the British and Americans on a new "open skies" agreement aimed at giving the US greater access to Heathrow and the British more access to more American airports. -- HAMBROS RESPONDS TO TAKEOVER THREAT Sir Chips Keswich, Hambros chief executive, is trying to head off growing City criticism about the bank's performance by spelling out details of a restructuring programme which includes the possibility of disposals worth more than 355 million stg. Sir Chips is ready to go on the offensive after Regent Pacific criticised the running of the bank and has offered to explain his strategy. He is expected to hold further talks to ensure the loyalty of his other major investors, including San Paolo and Guardian Royal Exchange. THE INDEPENDENT -- GRIMSBY ACHIEVES TAX HAVEN STATUS FOR HANSON The conglomerate Hanson has sought to play down the significance of Millenium Chemicals, one of its demerged businesses, being managed from Grimsby, even though the company will be registered and headquartered in the US. Most of the plant and 6,700 staff are located in America the company will be controlled from Britain for the next five years for tax purposes. The company will be forced to hold its board meetings in the UK and maintain a British executive office. -- T AND N WARNS ON 50 MILLION STG ASBESTOS CLAIMS T&A has warned that it could have to pay 50 million stg in asbestos claims if it failed to overturn a recent US court ruling. The courts decided a multi-million pound stg industry-wide settlement with claimants was illegal. The news has sparked renewed fears that the group could face a flood of legal claims. The group was formally known as Turner and Newell and was one of the world's biggest asbestos manufacturers. -- DAILY MAIL MAY SET UP 'LIFESTYLE' TV CHANNEL The media giant controlled by Lord Rothermere, Daily Mail and General Trust, is in negotiations with BSkyB to develop a television channel for broadcast on satellite. This would mark the first association between DMTG and BSkyB. The channel has been called Daily Mail TV and will be aimed at a female audience and will focus on lifestyle themes. DMTG is already involved in the cable London channel Channel One. BMC +44-171-377-1742 6312 !GCAT Prepared for Reuters by The Broadcast Monitoring Company -- OIL GROUPS TO COMBAT CORRUPTION Five of the world's largest oil companies are cooperating to form a security team following concern that international criminal networks are infiltrating companies and selling confidential information to potential bidders for major procurement projects. The group includes Exxon, Mobil, BP, Shell and Norwegian state oil company Statoil. The figures involved in payments of bribes and pay-offs to disloyal company sources are thought to total tens of millions of dollars a year. -- DAIMLER HINTS AT REDRAWN STRUCTURE There have been hints from the chairman of Daimler-Benz that the company may embark on a series of changes to management and structure in line with its strategy of adopting a leaner corporate image. The news came as Daimler announced profits of 337 million stg, compared with a loss of almost twice as much last year. Already the company has seen its number of units fall from 35 to 25. Observers note that while the company's performance is improving, it still has problems to overcome. -- T&N MAY SEEK PARTNER IN DRIVE TO DOUBLE SIZE Engineering group T&N has announced that it is seeking to double its size and is examining options for such a strategy, aimed at promoting it to one of the world's leading manufacturers of auto components. There have been hints that it may approach this goal through a merger, similar to the one recently embarked upon by Lucas Industries and Varity. T&N noted that it would not proceed with these plans until it has overcome the burden created by claims for damages from people affected by the asbestos which it once produced in large quantities. -- FLEMINGS TO PAY FINES AND 12 MLN STG IN COMPENSATION Investment banking group Flemings has been hit by fines of 700,000 stg and set compensation of 12.4 million stg for investors by regulators in London and Hong Kong after one of the group's top managers was found to have diverted profitable trades to his personal account. The London fines, imposed by fund management regulator IMRO, are the third largest ever imposed by the body. -- ROYAL MAIL CONCESSIONS FAIL TO END DEADLOCK IN POST DISPUTE Significant concessions offered by the Royal Mail to the postal workers' union the CWU have failed to end the deadlock in the dispute. A strike planned for Friday will now go ahead, and the latest breakdown could see an escalation of the dispute which could threaten the Royal Mail's monopoly on delivering letters. The government has threatened to extend the current one-month suspension of the monopoly to three. -- BZW ARGUES EMU WILL BE VITAL TO CITY BZW Futures, one of the most active banks trading in financial futures, has warned that the City of London risks losing its leadership of European markets if the UK decides to stay outside European monetary union. The claims reflect City unease about the UK's stance on a single currency, with fears that an opt-out would see European centres such as Paris and Frankfurt take trade from London. -- LOTTERY REGULATOR FACES NEW CRITICISM National Lottery regulator Peter Davies has been criticised in a report from the National Audit Office after operators Camelot earned an extra six million stg in interest last year by failing to meet its own targets on paying out prizes. Davies, who was found to have carried out less than half of the planned checks on Camelot, was singled out for failing to supervise the operator properly. -- LADBROKE REUNITES HILTON BRAND GLOBALLY Hotels groups Hilton Hotels Corporation and Ladbroke have announced a deal that will result in the Hilton brand uniting across the world. As part of the agreement each party will have the right to purchase up to a 20 percent stake in the other. The companies will also have representatives on each others boards. Initially HHC will acquire a 5 percent interest in Ladbroke. -- STRONG GAINS IN UNDERLYING PROFIT AT ROLLS-ROYCE Aero engine manufacturer Rolls-Royce has announced rise of 50 percent in its operating profit during the first half after provisions for certain disposals which resulted in a loss for the period. The company, however, has decided to hold its dividend payment steady at 2p. Shares in Rolls-Royce fell on disappointment with the decision not to increase the dividend and concern over the rate at which the company's performance has been improving. For a full range of news monitoring services, phone BMC +44-171-377-1742 6313 !C11 !C12 !C17 !CCAT !GCAT !GCRIM The Lloyd's of London insurance market said on Friday its ruling council has declared a 3.2 billion pounds ($4.99 billion) settlement offer to investors unconditional as to acceptances. Lloyd's also said in a statement issued to the London stock exchange that the council agreed a final extension of the settlement offer to noon London time on Wednesday September 11. At the close of business on Thursday, it said 31,246 members had accepted, representing 91 percent of Lloyd's membership worldwide of more than 34,000. The brief statement was the strongest indication yet from the 300-year-old market that its recovery plan would be successful. Other conditions still need to be met before the entire package can go ahead, including British government approval. Under its recovery proposals, Lloyd's aims to reinsure billions of pounds in liabilities into a new company, Equitas. The settlement offer, which had been raised to 3.2 billion pounds from 2.8 billion three months ago, is designed to soften the cost to investors or Names of setting up Equitas and ending litigation. The British government is likely to decide next week whether to approve the recovery plan and the solvency of Lloyd's. The success of the settlement offer is crucial to this decision. ($1=.6412 Pound) 6314 !C11 !C17 !C171 !CCAT !GCAT !GPRO Former Lonrho Plc head Tiny Rowland took out advertisements in several British newspapers on Friday to criticise the group's planned flotation of its Princess and Metropole hotels business. Rowland drew attention to the company's planned merger of its platinum interests with Gencor Ltd Implats, which was blocked by the European Commission in April as anti- competitive. Lonrho did not join the South African firm's appeal against the decision, saying it did not want to prolong uncertainty. Rowland exhorted shareholders to read his comments, adding that if they had "something better to do, then leave (the hotel flotation) to the management who brought you the Lonrho Platinum/Impala merger. Remember that?" Rowland said shareholders should read a circular being sent to them on the float. Copies were not immediately available. Rowland was ousted after 34 years at the helm in a boardroom coup at Lonrho in March 1995 by German financier Dieter Bock, who is currently chief executive. The two have since clashed several times over Lonrho strategy as their rivalry deepens. 6315 !C12 !CCAT !GCAT !GCRIM The chief executive of Canadian forestry company Doman Industries Ltd. and two other men were found guilty of insider trading Thursday after an eight-year legal battle. The judgment covers Herb Doman, CEO and controlling shareholder of Doman Industries, former British Columbia provincial Premier William Bennett and his brother, Russell Bennett. "Insider trading is often characterised by deceit and greed and sometimes by conspiracy. All these elements were present in this case," the British Columbia Securities Commission said. The commission said the three would be banned from trading securities and from serving as officers or directors of public companies for 10 years. Doman will be allowed to return to his position at Doman Industries after one year if certain conditions are met. For Doman to return, independent directors must be appointed to chair the company and its comittees, the company must adopt governance policies consistent with Toronto Stock Exchange guidelines and create a comittee of independent directors to review all trading in Doman shares by employees, officers and directors. The three were also ordered to pay costs of the commission hearing from August 1994 to April 1996, which reportedly totalled more than C$1 million ($740,000). Doman blasted the ruling and his lawyer, Marvin Storrow, said he would immediately appeal the decision and seek a stay of the penalty. "He is very upset," Storrow said. The case lasted eight years and revolved around the collapse on Nov. 4, 1988, a takeover bid by Oregon's Louisiana-Pacific Corp. for Doman Industries. Doman was accused of passing along a tip to his friend and horse-racing partner, Russell Bennett, that the takeover had fallen through. The Bennetts sold all their Doman shares minutes before trading was halted for announcement of the news. Regulators said the Bennetts made a C$2 million ($1.5 million) profit on the trade. Doman and the Bennetts insisted the allegations were untrue. They were acquitted by a provincial court of similar charges in 1989. Regulators continued to pursue the case through numerous legal battles that went all the way to the Supreme Court of Canada. Before the announcement, Doman Industries shares closed 10 cents Canadian (7.4 cents) lower at C$8.70 ($6.44) on the Toronto exchange. 6316 !E12 !E21 !E211 !ECAT !GCAT !GHEA The government solved an immediate political problem this week at probably greater long-term cost. Prime Minister John Howard said on Thursday that he, the treasurer and the health minister would personally approve future rises in premiums. But this only addressed the immediate problem of a sudden rise in premiums threatening to gobble up the new subsidy for people who insure themselves privately. (It's called the Private Health Insurance Incentive, but it's still a subsidy.) Howard's announcement diverted attention from the rise itself and gave some reassurance to a suspicious public that the funds would not be able to jack up their charges to appropriate the subsidy for themselves. But now the government will have to assume political responsibility for every rise in the premiums, a matter of great concern to ordinary families. Worse, a premium rise can never, ever have a positive political spin: Price rises are bad news. The best that the government will be able to do will be to try to justify any rise that it might approve, but that will only make it look like it is siding with the big bad funds, not the voters. Worse again, the political flak will go all the way up to the prime minister, who might have been unsoiled by such unpleasant news. The previous system -- admittedly, the source of this week's trouble -- was that the health minister approved the rises in a very low-key manner by delegating authority. That is, a senior official in the Health Department made the decision somewhere in the mysterious innards of the bureaucracy. It was a system that attracted little attention -- until the peculiarly unfortunate timing of these latest, rather large rises by two funds. A bit more political savvy in the department might have been called for this week. To be fair, there was probably no easy way for the government to extricate itself from this week's mess. But it might have been politically smarter for the PM to have taken responsibility for premiums for just a little while, perhaps pending the outcome of some committee of inquiry, the creation of which would always be enough to make a subject uninteresting. -- Canberra Bureau 61-6 273-2730 6317 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Palmerston North-based animal eartag company Allflex New Zealand Ltd is to phase out its manufacturing arm over the next year after its U.S.owners decided to relocate this work overseas, the New Zealand Press Association reported on Friday. The down-sizing would mean the loss of about 130 jobs as the manufacturing site becomes largely a distribution warehouse for the New Zealand market. Manufacturing will now be carried out at locations in North America, France, and China. Staff at Allflex, founded in Palmerston North in the 1960s and now a world leader in animal and electronic identification systems, were told of the plans this morning. Former general manager Jim Stewart, who is chief executive officer for the company's electronic weighing division, said there would be a staff of about 100 once restructuring was completed. Allflex currently employs 235 people at the plant, although this number can rise to 400 at the height of the manufacturing season. The operations of Allflex NZ Ltd and Allflex Australia Pty Ltd would be merged under the management of the Allflex Australasian board. The parent company, Allflex SA, is owned by New York investment bank Goldman Sachs. Stewart said that to manufacture the products in Palmerston North Allflex had to bring in all raw material from overseas, which involved high freight rates. It was then reprocessed in Palmerston North and promptly transported back to where we bought the raw material from. Stewart said the lack of significant capital expenditure on upgrading manufacturing plant in earlier years, coupled with the impact of exchange rates and transport costs, made the high capital expenditure now required to upgrade the site's aged plant and equipment uneconomic. However, the company's electronic weighing business had been given the go-ahead to grow and expand and, if unhindered, there would be no reason why it could not eventually employ between 100 and 200 staff, he said. -- Wellington newsroom 64 4 4734 746 6318 !E12 !E21 !E211 !ECAT !GCAT !GPOL By Russell Barton (ABC TV Political Editor) "The devil is in the detail" -- one of John Howard's favourite phrases, but one which turned around and bit him this week. As interest groups and the Opposition began poring over the fine print in last week's document, the devil showed his ugly head. First, nursing homes. The budget ushered in a partial user-pays system, similar to that operating in hostels, estimated to save A$309 million over four years. But before the week was out, government offices had been inundated with calls from the elderly, and their children, seeking details. The most contentious point: the proposal for entry payments for the better-off nursing home residents and the emotive issue of whether elderly people would have to sell the family home to meet the payments which average A$26,000 in hostels. Family Services Minister Judi Moylan, under pressures and seemingly struggling with the detail of the policy, was moved to give a cast iron guarantee that under no circumstances would the family home be under threat. This was immediately contested by industry experts. The week ended with the matter unresolved, the government taking a little water, and the Senate's Opposition and minor parties promising trouble for the nursing home changes. Health continued to bedevil the government. Just as the nursing home furore began to wane as a front-page story, along came the private health insurance funds with a fee increase. The government took some time to decide how to handle this one. First it was determined that acting Health Minister Jocelyn Newman would argue that the rises were approved before the budget and that it was really Labor's fault, because former minister Carmen Lawrence's health amendments had driven up private hospital costs, leaving the funds, in turn, with higher payouts. HOWARD'S 'SPECIAL TOUCH' But by Wednesday night John Howard decided the controversy needed his special touch. Initially he simply asserted that the full benefit of the budget's tax rebates for lower incomes would not be swallowed up by fee rises. By yesterday, however, he toughened his stance, announcing further fee rises would not be left to the bureaucrats in the health department. All future applications from the funds would be scrutinised by no lesser beings than himself, the treasurer and the health minister. But the prime minister was unable to guarantee there would be no more fee increases. It's not clear, therefore, just how he can continue to argue the tax rebates won't be eroded by higher fees. The private health funds association says those increased hospital costs must be met. It's understood at least 11 other funds have lined up for similar increases. Now, is the government going to risk the charge that it's acting irresponsibly by forcing the funds to run at a loss until the tax rebates begin operating? Or will the troika of ministers have to swallow pride and allow the rises to take place? Naturally the Opposition has seized on the dilemma to try to score some points out of this budget. Shadow Health Minister Michael Lee has decided to use Labor's Senate votes as a bargaining chip in the health debate. He says Labor will vote for the tax rebate on two conditions: That the government reverse the budget's A$310 million cut to public hospitals and that the health funds be subject to an independent audit. Already he's got the support of the Australian Medical Association, the Australian Private Hospitals Association and the Australian Hospitals Association. If Labor doesn't get its way it should have the support of the Democrats to vote against the rebate with spokeswoman, Senator Meg Lees declaring after the health funds' fee increase that there didn't seem much point in voting for a rebate which would be swallowed up immediately by higher premiums. But that still leaves the government a chance of getting the measure through the Senate. It would need the two votes of the Independents, Senator Brian Harradine and the Labor defector, Senator Mal Colston. COLSTON HANGS LIKE A HOT AIR BALLOON While parliament is on a two week break, Colston still hangs over the house on the hill like a giant hot air balloon. Labor is striving to shake off the gloom caused by his resignation but the Democrats are finding it even more difficult. If Colston and Harradine do form a ticket on most votes Senator Cheryl Kernot's party is irrelevant, their leverage suddenly gone. This is even more so on the big votes like the partial privatisation of Telstra Corp. Colston will be the last Senator to want a double dissolution just when he's secured the deputy presidency and unprecedented power. So his vote is almost certain to go with the government on any of the issues which would later form the basis for such a move. Nursing homes and health funds may have given the oppposition some heart this week but when parliament returns on September 9, so will the gloom. -- Reuters Canberra Bureau 61-6 273-2730 6319 !E12 !E51 !E512 !ECAT !GCAT !GDIP Pacific island leaders stressed on Friday that next week's annual South Pacific Forum, the first since the end of French nuclear testing, must pursue reforms to solve critical economic pressures threatening living standards. "Many Forum members are faced with critical...economic pressures which threaten to undermine the development process and impact adversely on lifestyles and living standards," said Ieremia Tabai, secretary-general of the Forum Secretariat. It was vital for this year's Forum to focus even more closely than usual on economic issues when it began next Tuesday, Tabai warned delegates in a speech at a pre-Forum meeting in the Marshall Islands' capital, Majuro. A copy of his speech was obtained by Reuters. Australian Prime Minister John Howard, who will attend the Forum, said Australia, the region's biggest nation, would firmly support the reform efforts of the Forum's 16 member countries. "If we are going to ensure the region's economic well-being for the longer term, our natural resources, especially our fisheries and forests, need to be harvested in a way which safeguards the interests of future generations," Howard said in a statement in Sydney. Tabai said the economic performance of the South Pacific's small island economies remained generally poor. Although Tabai did not single out countries, one Australian diplomat said the Cook Islands, Nauru and the Solomon Islands were the worst off, while Kiribati, Tuvalu, Tonga and Western Samoa were in trouble because of a lack of resources. The Cook Islands is bankrupt. The tiny island group with a population of less than 20,000 has run up a public debt of US$120 million. The diplomat said France, Australia, New Zealand and Japan, the region's biggest donors, were maintaining aid levels, but Britain had virtually pulled out of the South Pacific and aid from the United States had also fallen sharply. "Our aim is to help the island countries do the best with what they've got," he said. Foreign aid to South Pacific nations accounts for 15 percent of the region's gross domestic product (GDP), the world's highest rate, according to French statistics. With the summit being held for the first time since France ended its controversial series of nuclear tests in the South Pacific, officials said the question of France's readmission as a dialogue partner was likely to provoke lively debate. Members suspended France last year in protest at its resumption of testing in French Polynesia and one diplomat said there was some lingering resentment over the tests which ran from September 1995 to January 1996. However, he believed members would agree to readmit France to next year's Forum. "It's better for France to stay out this year because there would be a lot of grumbling if they were readmitted now," he told Reuters. A spokesman for the French embassy in Canberra said Paris was "very eager" to resume its place as a dialogue partner. The annual Forum brings together leaders from Australia, the Cook Islands, the Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, New Zealand, Niue, Palau, Papua New Guinea, the Solomon Islands, Tonga, Tuvalu, Vanuatu and Western Samoa. 6320 !E21 !ECAT !GCAT !GCRIM !GPOL !GVIO Australia has stepped up security spending ahead of the 2000 Sydney Olympic Games after suggestions the recent Port Arthur massacre and protests against French nuclear testing highlight a need for extra vigilance. The government has boosted funding to its Protective Security Coordination Centre, which oversees the security of diplomats and VIPs, by 38 percent in the current financial year (July-June), according to budget papers released last week. The details, reported by a local newspaper on Friday, cite the Port Arthur shooting of 35 people in April and the storm of local protest against French nuclear tests in the Pacific as among the biggest recent security threats. "The massacre...at Port Arthur, Tasmania, showed that a fine line exists between the measures appropriate to countering terrorism and responses to serious criminal incidents," the centre said in its budget review for the year to June 30. The massacre in a former convict settlement in Australia's island state, allegedly by a lone gunman, sparked a national plan to ban rapid-fire guns. That in turn led to mass rallies of gun-owners and fears for the prime minister's security. Addressing one angry pro-gun rally in June, Prime Minister John Howard wore what looked like a bullet-proof vest under his jacket. One gun lobbyist warned of bloodshed if the ban held. The centre also referred in the budget papers to anti-nuclear protests, which culminated last year in the fire-bombing of France's consulate in Perth and prompted the centre to tighten security around all French missions. But French diplomats were not the only foreign dignatories accorded high security, the centre's review said, adding that the risk of incidents at Indonesian missions remained high. "Additional protection continued to be provided to Indonesian missions in Canberra, Sydney, Melbourne and Darwin," it said. "While the threat of a serious attack against Indonesian interest in Australia is assessed to be low, the risk of an incident causing affront to dignity and embarrassment for both the Australian and Indonesian governments remain high," it said. Relations between Australia and neighbouring Indonesia have at times been rocked by groups in Australia opposed to Jakarta's rule of East Timor, a former Portuguese colony. The centre also said it was "amending" security measures for visits by foreign leaders after an incident in Australia earlier this year when Malaysian Prime Minister Mahathir Mohamad was abused by a protester posing as a journalist. The office of Australian Attorney-General Daryl Williams, who is responsible for the nation's chief security agencies, declined on Friday to comment on the centre's budget review. But a security analyst said the centre was clearly using the string of recent security threats in an effort to persuade the government to keep bolstering its funding. "I dare say, if they had a chance to rewrite it (the review), they would cite the trouble at parliament house last week as well," said Australian National University's Michael McKinley, referring a violent anti-budget riot on August 12. Australia is seen as a safe country, free of acts such as the bombing during the Atlanta Olympic Games last month that killed two people. But internal disquiet does threaten to increase, McKinley told Reuters. "Politicians are not well regarded at the moment and there's an accelerated wealth disparity underway in Australia," he said. 6321 !C12 !C15 !C152 !CCAT !GCAT !GCRIM Australian mineral explorer Central Bore NL said on Friday it would take up the legal action against Anaconda Nickel NL over the sale of its Murrin Murrin nickel-cobalt mine tenements in Western Australia. Central Bore said it was adopting the action previously instituted by Perth investor Peter Salter against Anaconda Nickel. Anaconda Nickel's shares were trading about five cents lower at A$2.35 at 4.30 p.m. (0130 GMT). Anaconda shares surged on Thursday after the company's chief executive Andrew Forrest announced that Salter was withdrawing the A$120 million legal action against Anaconda. But late on Thursday Anaconda said it now wished to have the claim continued and "determined on its own merits." The dispute began in July when Salter lodged a complaint claiming Anaconda Nickel had misled Central Bore into selling its interest in three tenements now part of Murrin Murrin. The three tenements contain more than half the nickel of the Murrin Murrin project, which Anaconda forecasts will produce on average 100 million pounds of nickel and 6.6 million pounds of cobalt The total resource at Murrin Murrin is estimated by Anaconda Nickel at 116.8 million tonnes, grading 1.10 percent nickel and 0.08 percent cobalt. -- Sydney Newsroom 61-2 9373-1800 6322 !C21 !CCAT !GCAT !GDIS !GWEA Widespread rain and generally mild conditions through much of the state of New South Wales has reduced the state's drought-declared area to 37 percent from 48 percent, state Agriculture Minister Richard Amery said. Areas other than those withdrawn from declared drought also had good soil moisture profiles and should respond to warmer weather next month, he said on Friday. Amery said coastal areas did not receive significant rain and crop growth had been limited. The mid Hunter region had been worst affected. The cold snap with heavy snow two weeks ago slowed growth in the higher areas of the tablelands and slopes, he said. In some areas heavy frosts caused damage to advanced crops, he added. Despite this the state was looking for one of the best winter cereal harvests for years with more than four million hectares sown to wheat, barley and other winter crops, Amery said. The wheat harvest alone was expected to be in the vicinity of 4.5 million tonnes worth almost A$1 billion, he said. While grain farmers were looking forward to good returns, sheep and cattle producers faced tough times ahead with low wool and beef prices as well as reduced stock numbers from the prolonged drought, the minister said. -- Sydney Newsroom 61-2 9373-1800 6323 !GCAT !GPOL Hong Kong Financial Secretary Donald Tsang said on Friday that the territory had the "infrastructural hardware" to make a success of its future under Chinese sovereignty from mid-1997. "We have the largest and most efficient port on the South China coast; we have the best transport and telecommunications infrastructure in the world; and we are investing in this hardware on an enormous scale," Tsang said in a speech to Auckland during a visit to New Zealand. Hong Kong also had the necessary "constitutional infrastructure" in place, with the promise of autonomy in running its affairs after the handover from Britain to China. "What this means in practice is that Hong Kong will go on raising its own taxes, issuing its own currency, setting its own expenditure priorities and managing its own enormous financial reserves," Tsang said. He acknowledged that many Hong Kong people had decided to seek their future elsewhere and others were sure to follow in the next nine months. "But for the great majority of us, Hong Kong is our home and Hong Kong's future is our future." -- Wellington newsroom 64 4 473-4746 6324 !E21 !E211 !ECAT !GCAT !GPOL Australian Finance Minister John Fahey repeated the government's commitment to not raise taxes. "At this point of time, I'm not about to make a statement that there are new taxes coming because there aren't," Fahey told a participant at a business breakfast who asked him whether new tax revenue was an option for future budgets. "We simply said in all of this that it's about time that we spend what we earn," he said. "That's really what the budget says." The government won office in March promising to not raise taxes or introduce new ones. Although its August 20 budget includes 1996/97 revenue hikes of A$2.6 billion, it says none of those measures amounts to a tax hike. The revenue hikes were offset by some revenue losses. Added to net spending cuts, the budget tightened the government's finances by A$7.2 billion in 1996/97. -- Canberra Bureau 61-6 273-2730 6325 !GCAT !GDIP !GPOL China and Britain moved closer on Friday to removing some obstacles to Hong Kong's smooth transfer to Chinese sovereignty next year, but fresh controversies raised new potential hurdles. Agreements took shape on issues of handover ceremonies and budgets but quarrels brewed over China's moves to appoint new political leaders for Hong Kong. Hong Kong government radio quoted diplomats saying London and Beijing were closing in on an agreement on a ceremony to mark Hong Kong's handover to China next June 30/July 1 and that the deal might be announced next month. The sources signalled progress in informal talks and that a basic accord could be forged before foreign ministers of the two nations meet at the United Nations General Assembly in New York next month, the government-run radio said. Differences over handover ceremonies have posed a stumbling block in negotiations on the sovereignty transfer, especially the question of what role Governor Chris Patten will play. At the same time concrete progress was announced in talks on Hong Kong's next budget, which will straddle the handover date. British and Chinese negotiators agreed on ways to allocate resources for the 1997/98 budget, Chinese senior official Chen Zuo'er told reporters after the latest talks. Chen announced agreement on spending guidelines, maximum spending limits and procedures for dealing with new requests for money from the budget. Hong Kong Treasury Secretary K.C. Kwong was upbeat about the breakthrough. "We have in the past few days had very positive pragmatic discussions on the preparation of the 1997-98 Budget," he said. "We have for all practical purposes completed the preparatory stage of the resource allocation exercise," he said. "Our next step will be to consider the bids for new resources from branches and departments." But prospects of a smooth handover on the political front appear less bright. A Beijing official was quoted as saying a list of names of people being nominated by the public to sit on a caucus that will pick the first post-colonial legislature and governor, the chief executive, would not be made public. The official was quoted by the South China Morning Post as saying some nominees might not want their names to be publicised and that only the nominees would have the right to see the list. "This whole fiasco is too much. The whole thing is such a sham," pro-democracy legislator Emily Lau told Reuters. "Perhaps they feel some important people will be embarrassed if they are not picked. The whole process lacks transparency and accountability and credibility." The Wen Wei Po newspaper, flagship of Beijing's propaganda machine in Hong Kong, attacked Britain on Friday for trying to amend Hong Kong's laws in order to preserve London's influence after 1997. The salvo came just a day after the paper criticised Britain's chief handover negotiator, Hugh Davies, accusing him of touting Britain's own favourite for post-1997 leader. Davies' office dismissed the claim as ludicrous but Chinese spokesman Zhang Junsheng told reporters: "The British side should not meddle, and has no right to poke its nose in. This is entirely a matter for China." 6326 !GCAT !GDIP Taiwan on Friday denied newspaper reports that its top China policymaker would visit Hong Kong on September 1 after attending a seminar in Japan. "There is no such schedule," Kao Koong-lian, spokesman for the Mainland Affairs Council, a cabinet-level policymaking agency, was quoted by the state-funded Central News Agency as saying. Taipei newspapers said council chairman Chang King-yuh would leave Japan for Hong Kong on September 1 for a four-day visit, his first to the British colony since he took office in February. "...the visit is related to future direct shipping links (between Taiwan and China)," the mass-circulation United Daily News reported, quoting unidentified sources. An official in Chang's office said by telephone that Chang had left for Japan on Thursday to attend an academic seminar but he would not comment on the reports of a Hong Kong visit. "The chairman is coming back next week, and we can only tell you that he went to Japan for a seminar," he said. Taiwan has urged China to resume long-suspended, quasi-official talks to discuss Taiwan-related issues arising from Hong Kong's mid-1997 return to China's rule. China suspended the talks in mid-1995 after Taiwan President Lee Teng-hui made a private but high-profile visit to the United States, which recognises Beijing instead of Taipei. Taiwan has banned direct contact with China since a civil war separated them in 1949, and all trade with and investment in China must be routed through a third region, usually Hong Kong. Analysts expect Beijing to use Hong Kong's handover to pressure Taiwan's to end its long-term ban on direct trade and transport with China, aiming to use economic interests to bring Taiwan eventually under Beijing's rule. Taiwan vows to maintain its ties with Hong Kong after 1997, saying that it -- like Beijing -- will regard Hong Kong as a special administrative region different from the rest of China's mainland. 6327 !GCAT !GDIS A mudslide set off by floods swept away an entire aborigine village in northern Malaysia, killing at least 10 people and leaving 30 missing, Bernama news agency reported on Friday. "Mud and water came crashing down so fast and washed away all the houses downstream," said one survivor. The agency quoted survivors as saying they heard a sound like a loud explosion before mud and water crashed down on the the Pos Dipang aborigine settlement at Kampar town in northern Perak state on Thursday evening. Police said 21 aborigine homes and another house belonging to an ethnic Chinese family were found along the banks of a river near the settlement, Bernama reported. The landslide was apparently caused by floods, police said. Heavy rain has fallen over peninsula Malaysia in the past few weeks. Police said the dead had lived in houses built on a hill slope which were washed into the river. The Aborigine Affairs Department said it was uncertain of the exact number of casualties. But a spokesman quoted by Bernama said more than 30 people were missing. "We're not sure if they've all been washed away," said the spokesman. A rescue team drawn from police, fire fighters and civil defence staff was "racing against time" searching for survivors, Bernama said. The bodies of three children, five women and two men were recovered on Friday. All were found downstream from Pos Dipang after being apparently swept away by the torrent of mud. Quoting a police spokesman from Kampar, Bernama said nine people were injured and were being treated in hospital. Initial reports from the Malaysian national news agency had said up to 50 people may have been killed. 6328 !GCAT !GPOL !GVIO Philippine peace negotiators initialled a historic agreement on Friday to end a bloody Moslem-Christian confrontation in the south of the country dating back centuries. Government chief negotiator Manuel Yan and Nur Misuari, chairman of the Moslem Moro National Liberation Front (MNLF), initialled the accord witnessed by Indonesian President Suharto at Jakarta's Freedom Palace. The peace agreement will be formally signed by Philippine President Fidel Ramos and Misuari in Manila on Monday. The accord is aimed specifically at ending a 24-year Moslem separatist revolt which has cost at least 125,000 lives. Some five million Moslems regard the southern island of Mindanao as their ancestral homeland, although they are now outnumbered three-to-one by Christian migrants. Tensions between the two religious groups go back four centuries to the arrival of the first Christians in the area. Extremists on both sides have condemned the peace accord, but Misuari -- stressing that it was for all the people -- said he would work to persuade opponents to accept it. The agreement will establish an interim Southern Philippines Council for Peace and Development (SPCPD), to be followed in three years by a plebiscite leading to autonomous rule in the 14-province region. Misuari acknowledged at a Friday news conference he faced a "big problem" in getting his guerrilla followers -- which he has said numbered well over 30,000 -- out of the bush. "I know it is a matter of explaining to them the wisdom of supporting and associating ourselves with this peace process," he said. Several thousand will be integrated into the Philippine armed forces and the police. He also said he looked forward to welcoming home some 500,000 refugees from Sabah in east Malaysia. "This is a moment of great significance, not only to the government and people of the Philippines, but also to the whole region and the international community," Indonesia's Suharto said at the initialling ceremony. Indonesian Foreign Minister Ali Alatas and Mohammed Mohsin, assistant secretary-general of the Organisation of the Islamic Conference (OIC), also initialled the agreement. It followed a final two-day round of intensive and sometimes heated negotiations in Jakarta to settle last-minute differences and agree on the peace text. Final agreement was reached late on Thursday night at a central Jakarta hotel. Since substantive peace talks started in 1993, Indonesia has chaired a six-nation ministerial committee of the OIC to facilitate negotiations and mediate between the parties. The OIC will continue its involvement in the interim peace process in Mindanao. Alatas said the Jakarta ceremony brought to a successful close "two decades of an arduous quest for peace". The peace process dated back to an agreement signed under the auspices of the OIC in Tripoli in 1976, but which languished until it was revived in 1993. "It is an agreement that represents a just, comprehensive and durable political settlement to the conflict in the southern Philippines," he added. 6329 !E51 !E512 !ECAT !GCAT !GDIP Taiwanese business leader Kao Ching-yuan has invited one of China's top policymakers to visit Taiwan, a spokesman for Kao said on Friday. The spokesman said the invitation was offered to Wang Zhaoguo, director of the Chinese Cabinet's Taiwan Affairs Office, in a private capacity. Wang said he would be happy to visit if he had an opportunity, but there was no definite commitment to accept, the spokesman said by telephone from the northern city of Tangshan, where Kao is visiting. In Beijing, an official of the Taiwan Affairs Office denied Taiwanese newspaper reports that Wang had accepted Kao's invitation. A spokesman for Taiwan's policymaking Mainland Affairs Council, a cabinet agency, said in Taipei it would be happy to see a visit by Wang but noted that procedures must be followed. "We would be pleased to see this come about," said spokesman Kao Koong-lian. "But he must apply according to our rules." Business leader Kao is head of a delegation of nearly 80 Taiwanese businessmen and politicians, who arrived in Beijing on Tuesday. Taiwanese economic officials have joined the delegation in a private capacity. Chinese President Jiang Zemin met members of the delegation on Thursday and tried to reassure the visitors, saying Beijing would not allow political differences to stand in the way of trade and investment. In his meetings with other Chinese officials, Kao had raised tax and labour problems faced by Taiwanese investors in China, the spokesman said. On Wednesday, Kao urged Beijing to resume talks with Taiwan, saying the island's investors would lose confidence in China if political friction impeded ties. The talks were suspended last year after Taiwan President Lee Teng-hui's landmark trip to the United States. Beijing has viewed Taiwan as a rebel province since the Nationalist government collapsed on the mainland and fled to the island in 1949. It insists Taiwan is not entitled to official links with other states. China has stepped up pressure on the island to lift a decades-old ban on direct trade and transport links with Taiwan. Last week Beijing unilaterally announced a set of regulations to pave the way for direct links. Taiwan has banned direct trade, transport and mail links since 1949. Indirect trade and investment has been allowed since the late 1980s, usually through Hong Kong. 6330 !GCAT !GDIS !GENV Up to 50 people may have been killed in a landslide at an aborigine settlement in Malaysia's northern Perak state on Friday, the national news agency Bernama reported. Quoting a police spokesman from the Perak town of Kampar, Bernama said the landslide was at the Pos Dipang settlement. Bernama said rescuers had recovered eight bodies. It quoted police as saying the landslide occurred late Thursday night or early Friday morning. A Kampar police spokesman told Reuters that six people had been hospitalised. Rescue officials were still searching the settlement for bodies. The landslide was apparently triggered by a flood that swept through the village, the spokesman told Reuters. Heavy rains have fallen over peninsula Malaysia in the past few weeks. Police said the victims had lived in houses built on a hillslope that were washed down into a river, Bernama said. 6331 !GCAT Following is a summary of major Chinese political and business stories in leading newspapers, prepared by Reuters in Beijing. Reuters has not checked the stories and does not guarantee their accuracy. Telephone: (8610) 6532-1921. Fax: (8610) 6532-4978. - - - - PEOPLE'S DAILY A front-page commentary urged Japan not to act foolishly over the disputed Diaoyu islands, also known as the Senkaku Islands. China reiterated it had sovereignty and warned Japan not to instigate discord by challenging China. Standing Committee of National People's Congress, or parliament, passes law on coal industry and amendments to minerals law. - - - - CHINA DAILY President Jiang Zemin said China would not let political differences affect business with Taiwan during a meeting with prominent Taiwanese business leaders and economists. - - - - ECONOMIC DAILY China has scrapped a ban by local governments on the use of small passenger cars to fight regional protectionism. Li Ruihuan, chairman of the Chinese People's Political Consultative Conference, an advisory group to the government, will visit five European nations. - - - - CHINA SECURITIES China promulgated a new set of stock market regulations, removing from local governments the power to manage and supervise markets and giving the power to the China Securities Regulatory Commission. Financial analysts call for urgent development of China's foreign currency interbank market. China to clamp down on irregularities in the accounting sector. China National Metals and Minerals Import and Export Corp issues $100 million worth of commercial bills in the United States. A farm in China's southern province of Hainan becomes largest shareholder of Xindazhou motorcycle. 6332 !GCAT Newspaper headlines CHINA TIMES - Jiang Zemin says relations across the Taiwan strait should be developed based on a solid foundation. U.S. Democratic Party nominates incumbent President Bill Clinton for presidential re-election. UNITED DAILY NEWS - The Ministry of Transportation and Communications sumits telecommunications liberalisation bills for cabinet approval. Taiwan to lower import tariffs on 1,121 items. COMMERCIAL TIMES - Taiwan's Chung Shing Textile reports huge losses, executives take salary cuts. Some 40 Taiwan businessmen meet Jiang Zemin. ECONOMIC DAILY NEWS - Jiang Zemin says politics will not interfere with economy across the Taiwan strait. Wang Zhaoguo, head of communist China's Taiwan Affairs Office, says he is willing to visit Taiwan to discuss issues on direct commerce, transportation, and mail links. -- Taipei Newsroom (2-5080815) 6333 !GCAT Following is a summary of major Indonesian political and business stories in leading newspapers, prepared by Reuters in Jakarta. Reuters has not checked the stories and does not guarantee their accuracy. Telephone: (6221) 384-6364. Fax: (6221) 344-8404. - - - - KOMPAS Indonesian President Suharto has asked businessmen to share their experiences with each other in an effort to boost the country's exports. - - - - JAKARTA POST Speaker of the House of Representatives Wahono has called on those serving in high state institutions to direct their efforts in the coming years towards dismantling all barriers to social justice. An agreement to bring peace to the southern Philippines is set to be initialed on Friday after delegates from the Philippine government and the Moro National Liberation Front (MNLF) concluded negotiations on the treaty which is set to end almost 25 years of conflict in the region. - - - - MEDIA INDONESIA Around 2,000 of Indonesia's controversial Timor national car made by Kia Motor Corp of South Korea arrived at Jakarta's Tanjung Priok port on Thursday. The cars will be jointly marketed by Kia and PT Timor Putra Nasional, controlled by a son of President Suharto, which plans next year to start assembling the vehicles in Indonesia. - - - - REPUBLIKA The Central Jakarta District Court has started to hear the suit filed by ousted Indonesian Democratic Party (PDI) leader Megawati Sukarnoputri against the government and party rivals after the parties failed to reach an out-of-court settlement. Megawati has sued the defendants over a government-backed rebel congress which ousted her last June. 6334 !GCAT DAY'S TOP STORIES - The negotiating panels of the government and the Moro National Liberation Front meeting in Jakarta have put the final touches to a peace pact aimed at ending two decades of Moslem rebellion in the southern Philippines. (MANILA BULLETIN) - The Department of Public Works and Highways said it was suing contractors of the mega dike in Pampanga district which collapsed. The dike was built to protect villages from the flow of volcanic ash from Mount Pinatubo. (MANILA BULLETIN) - A Moro National Liberation Front officer will be named deputy commander of the military's southern command to supervise integrated MNLF members, the Philippine government and Moslem rebels agreed on Thursday. (PHILIPPINE DAILY INQUIRER) - The Philippine Stock Exchange has postponed the 780 million peso initial public offering of Music Semiconductor Corp after the company failed to submit some requirements. (THE BUSINESS DAILY) - Oil prices may have to rise by 61 centavos per litre next week so that a projected 2.2 billion peso deficit in the Oil Price Stabilization Fund is to be completely wiped out by March, 1997, a government official said. (THE MANILA TIMES) ++++ BUSINESS - Cebu Air Pacific has sought a temporary permit from the Civil Aeronautics Board to introduce international flights this year. (THE MANILA CHRONICLE) - Wing Tiek Holdings Berhad has secured a $40 million loan from a Malaysian bank to finance the acquisition of a crucial 15 percent stake in National Steel Corp. (THE MANILA TIMES) - Ayala Land and Hong Kong Land are teaming up to built two residential towers in Makati that will cater to the very rich people here and abroad. The twin towers will be the msot expensive in the country and its construction cost is estimated at 5.5 billion pesos. (THE MANILA TIMES) - A three-member delegation from American auto firm Chrysler Corp on Thursday held talks with officials of the Board of Investments. (MALAYA) - Manila newsroom (632) 841 8934 6335 !GCAT !GVIO Philippine peace negotiators reached agreement late on Thursday on an accord to end a 24-year Moslem separatist rebellion in the south of the country that has cost at least 125,000 lives. "Agreement has been reached on all issues," Ruben Torres, executive secretary to Philippine President Fidel Ramos, told Reuters shortly before midnight. "We are ready for the initialling tomorrow of the final draft and the signing in Manila on Monday," he said. Negotiators from the Philippine government and the Moslem Moro National Liberation Front (MNLF) wound up a final two days of talks in a central Jakarta hotel. Under the agreement, a Southern Philippine Council for Peace and Development will be set up for an interim three year period, to be followed in 1999 by a plebiscite and the establisment of an autonomous region covering 14 provinces on Mindanao in the southern Philippines. The agreement is to be initialled on Friday morning in front of Indonesian President Suharto, and formally signed in Manila on Monday. Indonesia has chaired a six-nation ministerial committee of the Organisation of the Islamic Conference (OIC) which has facilitated discussions and mediated between the two parties over the past three years. Torres admitted the final round of discussions on Thursday had at times been heated. But he added: "Better heated here than on the battlefield." In an opening ceremony of the fourth and final round of peace negotiations, government delegation chief Manuel Yan said Thursday was "the final day of our long journey towards peace". "By the end of this day...an historic document shall have emerged from our hearts and minds," Yan said. MNLF Chairman Nur Misuari said the country was "on the threshold of...a just, comprehensive, honourable and lasting peace". But Indonesian Foreign Minister Ali Alatas issued a note of caution: "A common lesson of contemporary peace processes is that it is one thing to achieve a peace settlement; it is quite another thing to make it work. "It is after the Final Peace Agreement has been signed in Manila that the real hard work will begin." Misuari conceded there was still opposition from both Moslem and Christian groups in southern Mindanao province to the peace accord. He said he would seek to persuade dissident groups, including the breakaway Moro Islamic Liberation Front and the fundamentalist Abu Siyyaf group, to accept peace. "The peace deal that we are making now is peace for our whole people...one intended not only for the living, but for those who are still in the womb of time," he said, adding it should embrace all those "ostensibly opposed to our peace-making activities". "I believe that what we could not achieve through war, we could now achieve through peaceful means," he added. 6336 !GCAT !GDIP Taiwan's President Lee Teng-hui accepted on Friday an invitation by visiting President Armando Calderon Sol of El Salvador to pay an official visit to the Central American country in 1997. "President Lee has agreed to pay an official visit to El Salvador next year," Calderon Sol told a news conference before concluding his four-day visit in Taiwan. "He will also meet with leaders of Central American nations in our capital," Calderon Sol said. Lee and Calderon Sol signed a joint communique to promote ties and El Salvador's president assured his government's support for Taiwan's entry to the United Nations. El Salvador is one of only 30 countries that recognise Taiwan. The rest of the world recognises rival Beijing, which regards Taiwan as a renegade province and refuses to have relations with any country that has official ties with Taiwan. Beijing took China's U.N. seat from Taipei in 1971 and has intensified its drive to isolate Taiwan's government. 6337 !GCAT !GDIP !GPOL !GVIO Human rights campaigners on Friday accused the Philippines of yielding to pressure from China by denying visas to two Tibetan delegates to an Amnesty International conference in Manila. "This decision is yet another graphic illustration of the way other governments are willing to comply with China's insistence that its human rights record should not be held up to international scrutiny," Amnesty said in a statement. The two-day Manila conference starting on Friday is aimed at highlighting continuing repression in China and at debunking the notion that so-called "Asian values" excuse rights abuses, organisers said. The two Tibetans applied for visas in New Delhi but embassy officials rejected them saying it was "too sensitive", Peter Angelo Perfecto, executive director of Amnesty International Philippines, told a news conference. Visas were also denied to two Pakistani delegates but no explanation was offered, Perfecto said. Philippine foreign ministry officials were not available for comment. "We are very much disappointed by (the government's) attitude ... because their practice is contrary to what they have always said they adhere to," Perfecto added. The Philippine government has often expressed its commitment to human rights but its unwillingness to displease regional neighbours, for example Indonesia and Burma, makes it reluctant to take concrete action, he said. "We believe that there is a pattern of the Chinese authorities exercising (pressure) on other governments all over the world ... so that these governments themselves restrict the activities of human rights groups in relation to China," said Pierre Robert from Amnesty's London-based secretariat. Robert was among several Amnesty officials who accused Thai authorities of harassing them when they tried to hold a similar conference in March in Bangkok. The Amnesty officials identified the Tibetans as Gedun Rinchen and Tempa Tsering, both based in the north Indian town of Dharamsala, the base of Tibet's exiled spiritual leader, the Dalai Lama. Rinchen was to have presented a paper at the conference detailing his experiences as a political detainee in Tibet. China and other Asian nations regard expressions of concern about their human rights record as "interference" in their internal affairs, said Somchai Homlaor, secretary-general of the Thai-based Forum-Asia, an umbrella group of Asian human rights organisations which is co-hosting the Manila conference. Somchai said this was in direct contradiction to international agreements these countries have signed which stress the universality of human rights. He also hit out at the use of "Asian values" stressing corporate or social responsibility as an excuse for overlooking abuse of individual rights. The "Asian values" argument was first developed by Singapore and Malaysia but has spread to other Asian countries, he said. "The notion of Asian values was being developed and used to justify human rights violations of governments in this region," Somchai said. "Such justification is a direct refusal of their obligations as a member of the United Nations to respect or abide by the Universal Declaration of Human Rights. Such justification is often used to oppress the people," he said. 6338 !GCAT !GODD A colourful chapter in Britain's military presence in Hong Kong drew to an end on Friday when the popular "Gurkha Market" closed. The weekly bazaar hosted and moderated by the Royal Air Force (RAF) had grown into a Hong Kong institution. But the RAF is packing up and preparing to move out ahead of the handover of Hong Kong to China next year and is vacating its quarters at Sek Kong in the heart of the New Territories. "It's very sad in some ways it's our last market," said Wing Commander Barrie Simmonds who declared the bazaar open for the final time. "We'll all be going before long, so yes, I think sadness is the main feeling really." Hong Kong's shrewd hawkers made the most of the occasion. Banking on the final market drawing a larger than usual crowd, they began arriving early, pouring through the gates in vans, trucks and occasionally on foot balancing precarious loads piled high on handcarts. As the Wing Commander and his men knotted a yellow ribbon around a convenient lamppost for the opening ceremony, the lawns around the Sek Kong married quarters disappeared under a sea of denim, mounds of silk flowers, sneakers, T-shirts, quilts, and trestle-loads of porcelain and rattan furniture. Shrill chants went up as stallholders -- some presiding over nothing more than a mat on the ground -- competed for customers. The hawkers were correct in their reasoning. Hong Kong bargain-hunters, perspiring tourists in skimpy shorts and tops, Gurkha soldiers' wives in their bright saris, flocked to the market for a morning of haggling over everything from watches to brand-name factory seconds to rattan furniture. "At a conservative estimate, I'd say we've got about 8,000 people here," said an RAF sentry on the gate. A year ago, 2,000 would have been considered a large crowd. It wasn't always like that. "When it began, there were just three or four hawkers squatting on the pavement," said Simmonds. That was back in 1979 when the British military opened the married quarters in remote Sek Kong. Many were families of Gurkha soldiers in the British army who proved enthusiastic patrons, hence the name Gurkha market. The years have bred friendships and affection. Lee Poon has been running a clothing stall from the beginning. Cham Kam-wah, better known as Tick Tock -- he sells watches -- is another stalwart. So too is 78-year-old soft drinks vendor Wan Yick-chuen. The three of them were among a group of regulars invited by the military to a special farewell lunch of Gurkhali curry. The RAF also marked the occasion with a farewell flypast by three Wessex helicopters which banked over the mountains of Kowloon, RAF colours snapping in the slipstream. The hawkers, however, don't want to bid farewell without a fight. Some plan to relocate to nearby open-air market areas but hope the move will be only temporary. They have got together to form the Friday Market Traders Union to petition the Chinese authorities to let them return to Sek Kong when the People's Liberation Army takes over after the handover on the midnight of June 30, 1997. 6339 !GCAT !GCRIM !GPOL China's capital, Beijing, has created a dossier to keep track of senior officials' housing after a vice-mayor who committed suicide was found to have illegally amassed more than 100 houses. Beijing's Commission for Discipline Inspection launched a campaign in the first half of this year to check that municipal officials had acted honestly and legally in the allocation, purchase, construction and renovation of housing, the Beijing Daily said on Friday. Housing is one of the main areas of official corruption and was at the centre of China's worst corruption scandal since the communist takeover in 1949. In 1995, Beijing Vice-Mayor Wang Baosen committed suicide after coming under investigation for economic crimes. He was found to have used his position to acquire 116 houses illegally and build himself a villa on the outskirts of the city. His mentor, Beijing's Communist Party boss Chen Xitong, was later sacked from the powerful Politburo and remains under investigation over allegations that he handed out nine apartments across Beijing to his mistress and members of her family. The newspaper said Beijing city authorities had also launched a campaign to prevent officials from dining and entertaining at public expense. An investigation of 114 government offices had shown that between January and May, entertainment expenses totalled 7.26 million yuan ($875,000), down 11 percent compared with the same period last year, it said. The city had also cracked down on officials using luxury cars of a higher standard than was permitted by checking and registering hundreds of government vehicles in the first half of this year, it said. Corruption has soared in China during the last 17 years of market-oriented economic reforms, prompting the government to mount a high profile offensive against graft. 6340 !C12 !CCAT !GCAT !GCRIM Shanghai officials have confiscated 1.3 million fake pencils from a factory which was counterfeiting two well-known local pencil brands, the Liberation Daily said on Friday. The paper said the two brands, Chunghwa and Great Wall, were owned by China First Pencil Co, the biggest producer of pencils in China. The factory chief has been arrested, it added. Piracy of a wide range of goods is a major problem in China both for local as well as international companies. 6341 !E51 !E512 !ECAT !GCAT !GDIP Taiwan said on Friday it would be happy to see a visit to Taipei by Wang Zhaoguo, the chief Taiwan affairs policymaker under China's ruling state council, but noted that certain procedures must be followed. "We would be pleased to see this come about," said spokesman Kao Koong-lian of Taiwan's Mainland Affairs Council, a policymaking cabinet agency. "But he must apply according to our rules." "We feel problems facing the both sides of the (Taiwan) Strait should be handled with mutual respect," Kao told a news conference. In Beijing, a delegation of Taiwan business leaders invited Wang to visit Taipei in a private capacity and said that he accepted, but a Beijing official promptly denied that Wang had agreed to make the trip. Kao cautioned that the approval procedure for a visit by Wang would depend on what kind of status he would like to have, saying approvals for lectures or other non-official visits were different from those for political negotiations. If Wang hoped to come for negotiations, Kao said, Taiwan would prefer that talks begun in the early 1990s but stalled in mid-1995 be restarted first. Talks between quasi-official representatives of China's communist government and Taiwan's rival Nationalist government ground to a halt in June 1995 amid Beijing's fury over a private U.S. visit by Taiwan's President Lee Teng-hui. "The most urgent thing at the moment is to resume Koo-Wang talks because that was where we stopped," Kao said, referring to contacts between Taipei's top negotiator Koo Chen-fu and his Beijing counterpart Wang Daohan. The 80-member Taiwan business delegation, led by tycoon Kao Ching-yuan, arrived in Beijing on Tuesday. Taiwan economic officials have joined the delegation in a private capacity. Chinese Communist Party chief and President Jiang Zemin met members of the delegation on Thursday and tried to reassure the visitors, saying Beijing would not allow political differences to stand in the way of trade and investment. The Taiwan council's Kao said Jiang's ideas were "very practical". On Wednesday, Kao Ching-yuan urged Beijing to resume talks with Taiwan, saying the island's investors would lose confidence in China if political friction impeded ties. Beijing has viewed Taiwan as a rebel province since the Nationalist government lost a civil war to the communists and fled to the island in 1949. Beijing insists Taiwan is not entitled to official links with other states. China has stepped up pressure on the island to lift a decades-old ban on direct trade and transport links with Taiwan. On August 20, Beijing unilaterally announced a set of regulations to pave the way for direct shipping links. Taiwan has banned direct trade, transport and mail links since 1949. Indirect trade and investment has been allowed since the late 1980s, usually through Hong Kong. 6342 !GCAT !GDIP China warned Japan on Friday not to do anything "foolish" in a row over a group of disputed islands in the South China Sea and expressed concern about what it called a resurgence of Japanese militarism. Tokyo's recent actions towards the Diaoyu Islands, known as the Senkakus in Japanese, are a sign of growing militarism in Japan and a cause for alarm, said a commentary titled "Don't do anything foolish, Japan" in the official People's Daily. "It (Japan) wants to take advantage of changes in the situation in Southeast Asia since the end of the Cold War to demonstrate its power to others and test China's resolve to guard its territory," the commentary said. It said the islands, which are about 300 km (190 miles) west of Okinawa and 200 km (125 miles) east of Taiwan, were an inseparable part of Chinese territory. Tokyo has maintained that the islands, which are also claimed by Taiwan, have always belonged to Japan. In July, members of a right-wing Japanese group sailed to one of the islands and built a make-shift aluminium lighthouse there. Japanese authorities said earlier this month that the group had withdrawn a claim for recognition of the structure. The newspaper commentary said Asian nations, many of whom suffered at the hands of the Japanese army during World War Two, were worried about Japan treading its old road of militarism. "This series of actions by Japan seems to be turning these concerns into reality," it said. Asian nations should maintain vigilance against a rise in Japanese militarism, it said. In addition to the dispute over the islands, tensions have flared recently over visits by Japanese political leaders to a controversial war memorial in Tokyo which honours the nation's war dead, including war criminals. 6343 !C12 !CCAT !GCAT !GCRIM !GPOL South Korea's Daewoo Group said its chairman on Friday appealed against a two-year jail sentence imposed on Monday for bribing former president Roh Tae-woo. The spokesman said a lawyer for Daewoo Chairman Kim Woo-choong submitted the appeal to the Seoul District Criminal Court. Kim was among nine business tycoons convicted of bribing Roh. Four were sentenced to jail and the others received suspended jail sentences. The heads of Jinro and Hanbo groups, also sentenced to two years in jail, and the chairman of Dong-Ah who was handed a 2-1/2 year jail term, have already challenged the court ruling. Roh was sentenced to 22-1/2 years in jail for mutiny and treason on top of corruption. 6344 !GCAT !GCRIM !GPOL Former South Korean president Chun Doo Hwan plans to appeal the death sentence given him this week by a Seoul court for mutiny, treason and corruption, the Yonhap news agency said on Friday. Yonhap quoted one of Chun's lawyers, Lee Yang-woo, as saying Chun had decided to contest the Monday's ruling on the advice of his legal counsel. "We will submit the appeal to the court tomorrow morning at the earliest," Lee was quoted as saying. Lee and other lawyers for Chun were not immediately available for comment. Yonhap gave no details about the grounds on which Chun would appeal. Chun has seven days to appeal his conviction. He was sentenced with his successor, Roh Tae-woo, who was given a 22-1/2 year jail sentence for his secondary role behind Chun in a 1979 coup and the 1980 massacre of pro-democracy rebels in the southern city of Kwangju. Both men were also convicted of massive corruption during their terms from 1980-93. Chun has been keeping Koreans guessing over whether he intends to dispute the ruling of a court he said was part of a judicial circus orchestrated by current President Kim Young-sam to boost his popularity ratings. Many Koreans believe Kim will pardon Chun before he leaves office in early 1998. But by not appealing, Chun would force the president to make a quicker decision. An appeals process could drag through the courts for many months. Chun has remained defiant throughout the trial, defending his grab for power as a move to restore stability following the assassination of President Park Chung-hee. Chun denied being in the chain of command during the Kwangju massacre in which about 200 people were killed, by official count, when paratroopers stormed the city to put down a citizen's revolt against martial law. 6345 !C11 !C13 !CCAT !GCAT !GTOUR The Philippine Economic Zone Authority (PEZA) said on Friday it has approved an 11.018 billion-peso tourism project of Fil-Estate Land Inc. The project will be able to enjoy fiscal incentives such as income tax holiday and duty-free importation of capital equipment, the PEZA said. Called as the "Ecocentrum project," it will cover an area of 76.03 hectares located in Laguna province, south of Manila. Fil-Estate Land's participation in the project is through its wholly-owned unit, Fil-Estate Golf and Development Inc (FEGDI) which holds 56 percent of the joint venture undertaking the project. The project will feature a theme park, water park, hotels, aquarium, commercial and retail centers, museums, convention center, theaters and luxury houses. The PEZA said the implementation of the project started this month and commercial operation is expected to commence in July 1998. The project is being funded by a combination of loans, equity and advance sales. - Manila newsroom 63 2 841-8937 fax 8176267 6346 !GCAT !GPOL !GVIO About 45,000 Filipino Moslems held a prayer rally in the southern city of Marawi on Friday after Moslem leaders signed a peace agreement with the government, organisers and police officials said. "This is the biggest rally in the entire Mindanao area in connection with the SPCPD (Southern Philippines Council for Peace and Development)," Marawi mayor Abbas Basman told a news conference after the prayer rally. The prayer rally, organised by local Islamic groups, was held in the public park in Marawi, 810 km (503 miles) south of Manila. "The prayer rally is to express our thanks to Allah and to President (Fidel) Ramos for having created the SPCPD and for giving peace and development in Mindanao a chance to prosper," Basman said. The Philippine government's chief negotiator, Manuel Yan, and Moro National Liberation Front leader Nur Misuari initialled the peace agreement in Jakarta on Friday. The agreement, which envisages the setting up of the SPCPD as a forerunner to a Moslem autonomous region, will be formally signed by Philippine President Fidel Ramos and Misuari in Manila on Monday. The peace pact aims to end a 24-year Moslem separatist revolt which has cost at least 125,000 lives. 6347 !GCAT !GODD Gangs of bag-toting wild monkeys with a taste for apples have become a scourge of farmers in Tokyo's western suburbs, city officials said on Friday. "Troops of monkeys somehow picked up this habit of feeding on apples after one of them raided an orchard full of young trees last year," said Hiroaki Okawa of the Hachioji Argicultural Promotion Department. "Some monkeys were seen last month carrying apples away in plastic shopping bags," Okawa told Reuters. Tokyo's western hills are home to an estimated 100 wild Japanese monkeys who have always raided farms for potatoes and carrots, but had not been known to go after apples, he said. The only effective way to scare off the marauding monkeys from their gourmet apple feasts has been to explode fireworks and play tapes of the sound of gun shots. "Many hunters won't shoot monkeys because they have this superstitious fear of killing them," Okawa said. Japan's animistic Shinto religion regards monkeys as sacred messengers of the gods. Farmers in the area, who can sell their lovingly cultivated apples for up to 300 yen ($2.77) each, have asked agricultural authorities to help end the apple feasts. 6348 !GCAT !GCRIM !GPOL !GWELF China, eager to revive the dying Confucian tradition of respect for the elderly, has introduced a law criminalising the neglect or abuse of senior citizens. The National People's Congress, or parliament, passed the law on Thursday banning "discrimination against, humiliation, abuse or neglect of elderly people," the overseas edition of the People's Daily said on Friday. People who use violence to interfere with the freedom of senior citizens or refuse to provide financial support to their elderly parents could be punished in accordance with the Criminal Code, the newspaper said. Those who abuse senior citizens in public or make up stories to slander them also face punishment under the law, which takes effect on October 1. "It is the common responsibility of the society to guarantee the lawful rights of elderly people," the law reads. The newspaper gave no further details. The centuries-old Confucian tradition of respect for the elderly was turned upside down during China's chaotic 1966-76 Cultural Revolution with many people reporting on their parents. China has a growing number of elderly people to care for, with an over-60 population of nearly 117 million at the end of 1994, according to the latest official figures. The number of elderly rose at an average annual rate of 3.37 percent from 1990 to 1994, compared to a growth of 1.19 percent for the general population. 6349 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Workers at Hyundai Pipe Co Ltd, a unit of South Korea's Hyundai Group, agreed to end a strike and to return to work on Monday, company officials said on Friday. They said management and union leaders had agreed on a wage increase of 11.5 percent this year. "The accord was accepted by 57.8 percent of the voters," one official said. "Operations will resume on Monday." The workers had been on strike since August 19. -- Seoul Newsroom (822) 727 5643 6350 !C12 !CCAT !GCAT !GCRIM Japanese police said on Friday they would set up a special unit to try to stem a spread of computer viruses and other attacks by hackers. The National Police Agency (NPA) said funds for the new unit were requested as part of a 253 billion yen ($2.34 billion) budget for fiscal 1997/98 submitted in the morning. A spokesman for the agency said the "Security Systems Countermeasures Team" would be created in the next fiscal year beginning April 1997. Other new sections and posts include special units to be set up in each of the police headquarters of Japan's 47 prefectures to deal with the increase in crimes related to bad loans, real estate companies, banks and other money-lending institutions. The agency was also creating a team to combat an increase in the number of cases of fraud in the pachinko gaming parlour business, the spokesman said. 6351 !C12 !C23 !CCAT !GCAT !GCRIM !GHEA Japanese prosecutors on Friday raided the offices of a second drug company in a widening scandal over accusations that the firms and researchers knowingly treated haemophiliacs with HIV-tainted blood products in the 1980s. In a rare joint move, investigators of the Tokyo and Osaka district prosecutors' offices searched Nippon Zoki Pharmaceutical Co in connection with Thursday's arrest of Takeshi Abe, former head of the Health Ministry's AIDS research team and vice president of Teikyo University in Tokyo. The Tokyo Prosecutor's Office had arrested Abe on professional negligence charges, following legal complaints filed against him by the family of a haemophiliac who received blood products that had not been heat-treated from Abe's team at Teikyo University Hospital. Nippon Zoki, based in Osaka, western Japan, had provided unheated blood products to the hospital. Investigators were to question the firm's employees about whether the company was aware of the risks of selling the unheated products. The raid follows similar police action last week against Osaka-based drug maker Green Cross Corp on suspicion that it knowingly sold similar untreated blood products. More than 2,000 haemophiliacs in Japan have become infected with HIV, the human immunodeficiency virus that causes AIDS, via HIV-tainted blood products. The Health Ministry maintained for years that it could not find documents on the case. In February, however, officials revealed files from a 1983 study group chaired by Abe indicating that ministry authorities were aware of the danger of HIV infection from unheated products. In March, Japanese haemophiliacs accepted an out-of-court settlement, ending a seven-year legal battle against the state and five pharmaceutical firms, including Nippon Zoki. Nippon Zoki, along with Green Cross, Chemo Sero Therapeutic Research Institute, Baxter Ltd (a unit of Baxter International Inc) and Bayer Yakuhin Ltd (affiliated with Germany's Bayer AG), agreed to a one-off payment of 45 million yen ($416,000) to each claimant or their families and monthly payments of an undisclosed amount. Nippon Zoki imported unheated blood products from an Austrian company. Victims charged that the firm had falsely marketed the products as safe from AIDS, claiming they were made of blood obtained from Austrian soldiers. About 400 haemophiliacs have already died from AIDS and AIDS-related complications, activists say. ($1=108 yen) 6352 !C13 !CCAT !GCAT !GDIP Socialist allies China and Vietnam are to boost broad-ranging cooperation in radio broadcasting under an agreement signed within the last week, official media said on Friday. Under the accord, Voice of Vietnam and the Central People's Broadcasting Station of China will exchange programmes, technicians and reporters and cooperate in "many other fields", the Hanoi Moi newspaper and Vietnam News Agency said. The reports said the accord had been signed in China by Voice of Vietnam Director General Phan Quang and Beijing's Radio, Film and Television Minister Sun Jiazheng. No other details were given. Vietnam criticised the United States earlier this week over plans by the new Asia Pacific Network (APN), known formerly as Radio Free Asia, to begin broadcasts to the region. A commentary in the Quan Doi Nhan Dan (People's Army newspaper) said APN's aim was to undermine socialism in Asia in the same way that Radio Free Europe had been used during the Cold War against Soviet-bloc countries. APN is expected to begin Chinese-language broadcasts in September, adding Vietnamese, Tibetan, Burmese, Korean, Lao and Khmer services from early next year. 6353 !GCAT !GCRIM !GDIS Police in southwest China have arrested 30 people suspected of making and selling homemade alcohol that killed 35 people and poisoned 157, the Xinhua news agency said on Friday. A group of farmers in Huize county in the southwestern province of Yunnan were arrested for blending alcohol with methanol and selling the toxic liquor to local residents, the agency said. Between late June and July, a total of 192 people were poisoned by the toxic liquor, and 35 of them died and six were left severely handicapped, it said. Local authorities launched an investigation after they received reports of several similar deaths in the area, it said. Post-mortem examinations showed they were all caused by methanol poisoning. Police had confiscated the remainder of the poisonous liquor, Xinhua said. It gave no further details. 6354 !E51 !E512 !ECAT !GCAT !GDIP Taiwanese business leader Kao Ching-yuan has invited one of China's top policymakers to visit Taiwan, a spokesman for Kao said on Friday. The spokesman said the invitation was offered to Wang Zhaoguo, director of the Chinese Cabinet's Taiwan Affairs Office, in a private capacity, but there was no definite commitment to accept. An official of Taiwan Affairs Office in Beijing denied Taiwanese newspaper reports that Wang had accepted Kao's invitation. Kao is heading a delegation of nearly 80 Taiwanese business leaders and politicians who arrived in Beijing on Tuesday. Taiwanese economic officials have joined the delegation in a private capacity. On Wednesday, Kao urged Beijing to resume talks with Taiwan, saying the island's investors would lose confidence in China if political friction impeded ties. The talks were suspended last year after Taiwan President Lee Teng-hui's visit to the United States. Beijing views the island as a rebel province and insists it is not entitled to official links with other states. 6355 !C15 !CCAT !GCAT !GVIO PT Bimantara Citra, a listed conglomerate controlled by one of President Suharto's sons, said last month's riots in the capital had no impact on its operations, a newspaper reported on Friday. Officials at the company, controlled by Suharto's second son Bambang Trihatmodjo, were not immediately available for comment. The Jakarta Post quoted officials at Bimantara as saying on Thursday that the July 27 riots, the worst to hit Jakarta in two decades, did not hamper its operations even though the incident caused a drop in the company's shares. On July 29, the first trading day after the riots, Bimantara shares dropped by 200 rupiah to 2,075 rupiah and then dropped further to 2,050 rupiah the next day before recovering. Bimantara's shares were recorded as the second most active stock during the week after the riots with total transactions of 42 million shares worth 92 billion rupiah ($39 million). Bimantara on Friday morning was trading at 2,300 rupiah. The riots broke out after police stormed the headquarters of the Indonesian Democratic Party (PDI) and evicted the supporters of its ousted leader Megawati Sukarnoputri. At least four people were killed and scores of buildings and cars were burned. The paper said the executives acknowledged that Bimantara, with interests ranging from broadcasting, transport and the automotive sector, was a company that faced a political risk. "As long as President Suharto is in power, Bimantara is a political risk company," vice president Rosano Barack was quoted as saying. But he said the immediate recovery of its share price showed that investors were still confident with its fundamentals. Analysts say Bimantara went public in July 1995, in part to protect itself in a post-Suharto era by divervisifying its ownership and handing over its mangement to professionals. Kadir Assegaf, a director of Bimantara, said the riots only triggered the firm's share price drop. "It happened when foreign fund managers were on holidays. So it is quite normal for them not to risk their portfolio in such a situation," he was quoted as saying. He gave no other details. Assegaf said that Bimantara had projected 155 billion rupiah in net profit and 890 billion rupiah in net revenues for the entire year. ($1 = 2,342 rupiah) 6356 !GCAT !GCRIM Indonesia has stopped issuing new discotheque licenses after the recent seizure of drugs, including ecstasy, at entertainment spots in its major cities, the Jakarta Post newspaper reported on Friday. Coordinating Minister for Political Affairs and Security Susilo Sudarman said officials wanted to determine if discotheque owners are complying with the laws. "Until the evaluation is completed, we will not decide anything on permits for new discotheques," Sudarman told reporters on Thursday. He said Interior Minister Yogie Memet had been asked to order regional adminstrations to implement the freeze for an indefinite period across the world's largest Moslem nation of almost 200 million people. "The trafficking of ecstasy pills has reached a critical level. It is high time we intensified the combat against the drug," Sudarman said. Jakarta city officials have issued a similar freeze and temporarily closed several entertainment spots after drug raids. Last month, President Suharto ordered officials to close entertainment places that sell drugs. He also signed a bill that toughens the penalities for using and distributing psychotropic drugs such as ecstasy. 6357 !GCAT !GCRIM Singapore hanged a Thai farmer at Changi Prison on Friday for drug trafficking, the Central Narcotics Bureau (CNB) said. Jeerasak Densakul, 24, was arrested in 1995 when he was found with 11 slabs of cannabis weighing 2.2 kg (4.8 pounds), the CNB said. Singapore has a mandatory death sentence for anyone over 18 years of age found guilty of trafficking in more than 15 grams (half an ounce) of heroin, 30 grams (an ounce) of morphine or 500 grams (18 oz) of cannabis or marijuana. Of the nearly 270 people hanged for various crimes in Singapore since 1975, almost half have been for drug-related charges. 6358 !GCAT !GVIO History and high emotions mean that a government peace pact with Moslem rebels is unlikely to immediately halt the bloodshed that has plagued the southern Philippines for some 400 years, political analysts say. The agreement, to be formally signed in Manila on Monday, represents a major political victory for President Fidel Ramos, who hosts this year's summit of Asia-Pacific leaders in November. It gives the main rebel movement, the Moro National Liberation Front (MNLF), and its chief, Nur Misuari, a graceful exit from a war they have no chance of winning. It also clears the way for the development of the country's poorest region. But it has also enraged Christians on the main southern island of Mindanao and could drive young Moslems into the arms of extremists who already have a bloody track record. "It's not going to be a clean end. You won't have instant peace," University of the Philippines political science professor Alex Magno told Reuters. "It will be a long mopping up operation," he said. Christians are already beginning to arm themselves and the MNLF's main rival, the Moro Islamic Liberation Front (MILF), has launched a recruitment campaign after declaring it was taking over the revolutionary movement. The military is also monitoring the moves of the Abu Sayyaf, a small extremist group blamed for bombings, kidnappings and killings in the southern islands in the past three years. The accord, backed by the Organisation of the Islamic Conference (OIC), calls for the creation of a council led by Misuari to supervise development of 14 provinces, followed by a plebiscite and regional autonomy after three years. Moslem lawyer and former dissident Macapanton Abbas said Misuari's first priority should be to unify all factions behind him and launch impact projects such as housing, health care and electricity in rural areas long neglected by Manila. Dreams of an Islamic state will continue to burn in Moslem hearts if Misuari fails, Abbas warned. "Every generation produces young men. There will always be young men who will emerge and raise the battle cry," he said. "We're old, we're weary of war. But if the young are betrayed...the second time around will be more dangerous because Moslems will be fighting on the basis of betrayal," he said. "And a war fought by a people who feel betrayed will be more emotional, tragic and cruel." Christians, who form a majority of about 15 million in the south against some five million Moslems, already have a sense of betrayal, according to political analyst Nelson Navarro. "I think President Ramos has set the pace for an even stormier and rockier future for Mindanao," he said. The Jakarta accord opens an historic chapter in the Filipino Moslems' struggle to preserve their southern homeland, where an Arab scholar first preached Islam in 1390. The Spanish arrived more than a century later to colonise the Philippines carrying the Bible and the sword, and the Moslems fought them for 300 years. Then they fought the Americans. Then they fought an independent Philippine government, with the worst violence coming in the 1970s when more than 125,000 people, mostly innocent civilians, were killed. Ramos has said he is pinning his hopes on investment funds from Islamic nations to help develop Mindanao and turn the accord into a lasting peace. Some analysts believe it just might work. "In three to five years time there will be a lot of economic activity," analyst Magno said. "And then you'll have a lot of Christians looking over their fence at green pasture." 6359 !C12 !C41 !CCAT !GCAT !GCRIM The judicial managers of troubled property and trading company Amcol Holdings said on Friday they had won a High Court order to freeze the assets of former executive director Lloyd Lochra. "We have obtained a court order to freeze his assets," one of the judicial managers from Price Waterhouse told Reuters. The interim judicial managers -- Deborah Ong, Nicky Tan and and Yeoh Oon Jin, all partners of Price Waterhouse -- were appearing in the High Court on Friday to get their appointment confirmed. Bondholders of Amcol were also due to appear to demand assurances they would be paid and have threatened to challenge the permanent appointment of the judicial managers if no such assurance was granted. The judicial manager said Amcol was suing Lochra, another former director Ng Chee Kheong, and Luchra's Bahamas-incorporated company Cambridge Overseas Ltd, for damages and in connection with three payments of US$300,000 made by Amcol's Mauritian joint-venture partner Sando & Cie. Lochra and Ng oversaw the implementation of Amcol's joint venture in Mauritius for which they had received payments deemed questionable by special auditors Price Waterhouse in an earlier report. In May, Amcol invested Singapore $56 million in a venture with Sando to develop a 237-hectare site in the Mauritian capital of Port Louis that would have included a racetrack and commercial and residential properties. The venture also included the purchase of a stake in a casino from the government for US$3.6 million. The judicial managers have also sued Lochra and Ng for breach of fiduciary duty as former executive directors of Amcol. 6360 !GCAT !GVIO Philippine government and Moslem separatist negotiators initialled an agreement on Friday to end 24 years of bloody conflict in the south of the country which has cost more than 125,000 lives. Government chief negotiator Manuel Yan and Nur Misuari, chairman of the Moslem Moro National Liberation Front (MNLF), initialled the accord witnessed by Indonesian President Suharto at Jakarta's Freedom Palace. The peace agreement will be formally signed by Philippine President Fidel Ramos and Misuari in Manila on Monday. "This is a moment of great significance, not only to the government and people of the Philippines, but also to the whole region and the international community," Suharto said. The agreement covering 14 provinces on Mindanao island envisages a transitional Southern Philippine Council for Peace and Development, to be followed in 1999 by a plebiscite leading to autonomous rule in the region. Indonesian Foreign Minister Ali Alatas and Mohammed Mohsin, assistant secretary-general of the Organisation of the Islamic Conference (OIC), also initialled the agreement. It followed a final two-day round of intensive and sometimes heated negotiations in Jakarta to settle last minute differences and agree on the peace text. Final agreement was reached late on Thursday night at a central Jakarta hotel. Since substantive peace talks started in 1993, Indonesia has chaired a six-nation ministerial committee of the OIC to facilitate negotiations and mediate between the parties. The OIC will continue its involvement in the interim peace process in Mindanao. Alatas said the Jakarta ceremony brought to a successful close "two decades of an arduous quest for peace". The peace process dated back to an agreement signed under the auspices of the OIC in Tripoli in 1976, but which languished until it was revived in 1993. "It is an agreement that represents a just, comprehensive and durable political settlement to the conflict in the southern Philippines," he added. Suharto said the peaceful settlement of the rebellion would be a positive contribution towards efforts by the seven-nation Association of Southeast Asian Nations (ASEAN) to establish a zone of peace, freedom and neutrality in the region. "Throughout the peace process, there has been a building of confidence and trust between the Philippines and Indonesia which should bode well for their common prosperity," he added. 6361 !E21 !E211 !ECAT !GCAT !GPOL A group of about 50 younger parliamentarians in the Liberal Democratic Party (LDP), the main partner in Japan's ruling coalition, wants the government to freeze its plan to increase consumption tax from three to five percent from April 1. An aide to Toshikatsu Matsuoka, an LDP member of parliament's Lower House, said on Friday that about 50 LDP members, including Matsuoka, supported a resolution urging that the tax rise be frozen while economic conditions were monitored and Prime Minister Ryutaro Hashimoto's plans for administrative reform clarified. The resolution also called for a big supplementary budget for the year to March 1997 to ensure Japan's economic recovery and to deal with unemployment. Domestic media reports said a separate group of some 40 LDP members, including former Home Affairs Minister Takashi Fukaya, had decided on Thursday to set up a new group early next month to work to prevent the tax hike. Fukaya could not be reached immediately for comment. Shizuka Kamei, head of LDP public relations, recently upset senior LDP officials by suggesting the tax rise could be put off. 6362 !GCAT !GDIP !GPOL Amnesty International has condemned a decision by the Philippine government to deny visas to two Tibetans due to attend an international conference on human rights in China, beginning in Manila on Friday. Gedun Rinchen and Tempa Tsering were told by the Philippine Embassy in New Delhi that their presence in the Philippines would be too sensitive, an Amnesty statement said. Both are based in Dharamsala, India, the base of the Dalai Lama, Tibet's exiled spiritual leader. "This decision is yet another graphic illustration of the way other governments are willing to comply with China's insistence that its human rights record should not be held up to international scrutiny," Amnesty said in a joint statement with Forum-Asia, an Asian human rights group. "By denying access to Tibetans, the Filipino government is simply echoing China in blocking the fundamental right of freedom of speech," the statement said. 6363 !GCAT !GPOL A former health minister was chosen on Friday as the new leader of New Party Sakigake, the smallest member of Japan's governing three-party coalition, party officials said. Shoichi Ide will succeed New Party Sakigake President Masayoshi Takemura, a former finance minister who resigned after a rebellion by young members of the party earlier this week. The leader of the rebellion, Sakigake chief secretary Yukio Hatoyama, has announced he will leave Sakigake to form a new political party by mid-September. Ide, 57, is a founding member of Sakigake and served as the health minister in 1994 under former Prime Minister Tomiichi Murayama's government. Hiroyuki Sonoda, one of two party vice presidents, will take over the post vacated by Hatoyama. Health Minister Naoto Kan will be party vice president and Economic Planning Agency Director General Shusei Tanaka retained his post as vice president, party officials said. Sakigake is a member of the three-party coalition with Prime Minister Ryutaro Hashimoto's Liberal Democratic Party (LDP) and the Social Democratic Party. 6364 !GCAT !GPOL !GVIO Philippine government and Moslem separatist negotiators initialled an agreement on Friday to end 24 years of bloody conflict in the south of the country which has claimed more than 125,000 lives. The agreement was initialled by the government's chief negotiator, Manuel Yan, and Nur Misuari, chairman of the Moslem Moro National Liberation Front (MNLF) in front of Indonesian President Suharto at Jakarta's Freedom Palace. The formal accord will be signed in Manila on Monday. The agreement covering 14 provinces on Mindanao island envisages a transitional Southern Philippine Council for Peace and Development, to be followed in 1999 by a plebiscite leading to autonomous rule in the region. 6365 !GCAT !GDIP Taiwan's top policymaker toward China will visit Hong Kong on September 1 after attending a seminar in Japan, major Taipei newspapers reported on Friday. Chang King-yuh, chairman of the cabinet's Mainland Affairs Council, left for Japan on Thursday to attend an academic seminar, an official in Chang's office said by telephone. The China Times said Chang would then leave Japan for Hong Kong on September 1 for a four-day visit, Chang's first to the British colony since he took office in February. "...the visit is related to future direct shipping links (between Taiwan and China)," the United Daily News reported, quoting unidentified sources. The official in Chang's office declined to comment on the reports. "The chairman is coming back next week, and we can only tell you that he went to Japan for a seminar," he said. Taiwan has urged China to resume long-suspended, quasi-official talks to discuss issues related to Hong Kong before the British colony returns to China's rule in 1997. Such talks have been suspended by an angry China after Taiwan President Lee Teng-hui's mid-1995 private but high-profile visit to the United States, which recognises Beijing instead of Taipei. Taiwan banned direct contact with China after their civil war separated them in 1949, and all trade with and investment in China must be routed through a third region, usually Hong Kong. Analysts have said that Beijing would use Hong Kong to break Taiwan's long-term bans on direct trade and transport with China and to reunify the island economically rather than politically. Taiwan has said it would maintain its current ties with Hong Kong after 1997, saying Hong Kong would be regarded as a special region other than the Chinese mainland. 6366 !GCAT !GTOUR Affluent Asian consumers are more and more looking to vacation spots in their own backyard when they venture abroad for rest and recreation, tourism authorities say. The lure of Europe and the United States, while still strong for some countries, is fading. Increasingly, Asians are holidaying in the Orient, or mixing business and pleasure as they travel in neighbouring countries. Whether it's trekking in Nepal, diving in the Indonesian archipelago or seeking unique health therapies in Indonchina, the lure of the East is proving stronger. "People in this region are wealthier now and they prefer to travel without wasting too much time," Indonesia's director-general of tourism, Andi Mappissammeng, told Reuters in a recent interview. "If you travel to Europe from Singapore it will take you more than 10 hours, but it's only 1-1/2 hours to Bali," Mappissamneng said. "In the last 10 years there has been an evolutionary switching of the source of our tourists from Europe to the Asia-Pacific region, with the biggest market being the Association of South East Asian Nations (ASEAN) countries," he said. Last year, Indonesia received 4.3 million international visitors, with around 62 percent from seven Asian countries. Neighbouring Singapore, with a population of about three million, accounted for just over one million of these visits. Around 30 percent of all visitors are businesspeople taking advantage of their visit to add a few days' holiday onto a working trip or conference. In Singapore, about 70 percent of its 7.14 million visitors in 1995 were from other countries in Asia. The pattern is repeated in Thailand, where its seven million foreign visitors in 1995 have made tourism the country's top revenue earner. "The largest number of tourists visiting Thailand are from East Asia comprising ASEAN members, China, Hong Kong, Japan, South Korea and Taiwan," said Charun Chuennaitham, chief of the state-run Tourism Authority of Thailand's statistic section. Tourist numbers from North America and Europe are still substantial, particularly where there are former colonial ties. While 43 percent of tourists visiting the Philippines are from East Asia, the largest single group is from the United States, which accounts for 19 percent of all visitors. In India, British tourists are the largest single group, accounting for 15 percent of holidaymakers. But not everybody prefers to holiday close to home. With a strong yen, Japanese have increasingly travelled abroad in recent years, and figures from the Japan National Tourist Organisation show a majority of the 15.3 million Japanese who travelled overseas in 1995 preferred to go to the United States. Korea, Hong Kong, China, Taiwan, Australia, Singapore and Thailand, in that order, are the next most popular destinations. However, data from Visa International shows the top four destinations for Japanese credit card use are the U.S., Hong Kong, Italy and France. While shopping is the priority of tourists in Singapore and Hong Kong, other countries are trying to develop different approaches to lengthen average stays and daily expenditure. Malaysia is developing itself as an eco-tourist destination. The World Wide Fund (WWF) for Nature office there says these types of destinations are proving more popular with tourists, particularly specialist visitors like birdwatchers, from the U.S. and Europe. "They are willing to pay to come and see these things which are of special interest to them," WWF conservation director in Malaysia, Geoffery Davidson, said. Indonesia, promoting itself as a centre for marine-orientated tourism, has increased the number of international gateways from just the capital Jakarta and the holiday isle of Bali 10 years ago to 21 international airports. In addition, Indonesias has sought an edge on its neighbours by unilaterally granting visa-free access to 46 countries as it aims to boost tourist numbers to more than 11 million by 2005. Japanese travel agencies say they have to now come up with more unique tours to lure well-travelled customers. The Japan Travel Bureau, one of the country's largest travel agencies, now organises tours of Asian countries offering rare health therapies such as special massages and herbal medicines. Kinki Nippon Tourist, a rival agency, has its eye on countries off the beaten track such as Burma, Cambodia and Laos. 6367 !E41 !E411 !ECAT !GCAT !GJOB Japan's jobless rate fell in July from record high levels over the previous two months, with encouraging signs that the labour market may at last be on an improving trend. The unemployment rate fell to 3.4 percent from a record 3.5 percent in June, official data showed on Friday. "Some bright elements have appeared," a Management and Coordination Agency official told reporters. The 3.5 percent rate recorded in May and June this year was the highest level since the agency began compiling statistics by its present methods in 1953. Although Japan does not have the double-digit jobless rates of some Western countries, a climb in the rate over the past year has rattled a nation used to minimal unemployment levels for most of the post-war era. Other positive signs included job openings, which rose for the second month in a row, up to 72 openings for every 100 job seekers in July from 71 openings a month earlier. The agency official said a major factor for July's decline was only a minor rise in the number of people who lost their jobs. The number of people who lost their jobs rose by 10,000 from a year earlier, as both the size and rate of increase were the smallest for this year. He also said a year-on-year 0.1 percent decline in the non-working population, the first fall since last September, was a good sign. "This shows that more people are entering the workforce," he said. Even factors which contributed to the relatively high rate were also positive. Encouraged by the recent economic recovery, the number of people who had quit their job to search for work as well as those who had begun seeking work after spending time at home, rose by 110,000 year on year. But the government was still cautious about the future direction of the jobless rate. "It is still early to judge if last month was the peak, we need to watch movements a little more, the official said. Separately, consumer price data also released on Friday showed nationwide prices continued to be stable in July, with key Tokyo area prices for August rising a minuscule 0.1 percent year on year. 6368 !GCAT !GDIP London and Beijing may be able to reach an outline agreement by the end of September on the ceremony to mark Hong Kong's handover to China next year, Hong Kong government radio said on Friday. Diplomatic sources indicated progress had been made recently in informal discussions between the two governments, and they hoped a basic accord could be forged before the foreign ministers of the two nations meet in New York, RTHK said. Chinese Foreign Minister Qian Qichen and British Foreign Minister Malcolm Rifkind are to meet at the United Nation's annual session in late September. The agreement would most likely involve the basic shape, form and venue of the ceremony, it added. Britain hands Hong Kong back to China at midnight on June 30, 1997, after a century and a half of colonial rule. The Sino-British Joint Liaison Group started discussions late last year on arrangements for the ceremony, but no agreement has been made so far. Differences reportedly centre on the size of the ceremony and the role of Governor Chris Patten. 6369 !E41 !E411 !ECAT !GCAT !GJOB Japan's jobless data for July shows some bright signs, with the overall unemployment rate falling to 3.4 percent from a record 3.5 percent a month earlier, a government official said on Friday. "There are some bright elements but it is still early to judge if last month was the peak," an official with the Management and Coordination Agency told reporters. The 3.5 percent rate recorded in May and June this year was the highest level since the agency began collecting statistics by its present methods in 1953. Data issued separately by the Ministry of Labour was also positive with the closely watched jobs-to-applicants ratio rising for the second month in a row to 0.72 in July from 0.71 a month earlier. This means there were 72 job openings for every 100 applicants. Job openings rose 5.3 percent and applicants rose 3.4 percent month on month. The agency official said although the number of people who lost their jobs rose by 10,000 (corrects from 60,000) from a year earlier, both the size and rate of increase were the smallest for this year. He also said a year-on-year 0.1 percent decline in the non-working population was a good sign. It was the first fall since September last year and showed that more people were entering the workforce. But both the number of people of who had quit their jobs to search for new work and those who had begun seeking work after spending time at home, was still rising year-on-year which would help keep the rate from making any dramatic falls in the near future, he said. 6370 !E41 !E411 !ECAT !GCAT !GJOB Japan's seasonally adjusted unemployment rate fell to 3.4 percent in July from 3.5 percent in June, while the closely watched jobs-to-applicants ratio rose to 0.72 in July from 0.71 the previous month, the government announced on Friday. A breakdown of the job data follows: (Adjusted) July June Year ago Unemployment rate 3.4 pct 3.5 pct 3.2 pct July June Year ago Jobs-to-applicants ratio 0.72 0.71 0.61 (Unadjusted) July June Year ago Unemployment rate 3.2 pct 3.3 pct 3.0 pct Number of unemployed 2.21 million 2.26 million 2.02 million Number of employed July Year/year change Overall 65.89 million +0.7 pct Main Industries Manufacturing 14.54 million -1.3 pct Services 15.97 million +1.7 pct Wholesale, retail, restaurants 14.97 million +3.4 pct Construction 6.70 million -1.2 pct Agriculture 3.81 million -0.3 pct 6371 !GCAT !GPOL !GVIO Israel rushed police reinforcements to Jerusalem and tightened its closure of the West Bank in response to Yasser Arafat's call for Palestinians to converge on the holy city for Moslem prayers on Friday. Police expected 100,000 worshippers to converge on the Temple Mount, site of al-Aqsa Mosque, Islam's third holiest shrine and a symbol of the PLO's claim to Arab East Jerusalem as the capital of a future Palestinian state. "Everything will go well if the Israeli side...allows everyone to reach the place of prayer in peace and if there is no demonstration of force and arrests," Faisal al-Husseini, senior PLO representative in Jerusalem, told Israel Radio. Police brought extra officers into the city and said they would deploy a 2,000-strong force. An Israeli closure imposed on the West Bank and Gaza Strip after Moslem suicide bombers killed 59 people in Israel in February and March was expected to prevent most Palestinians from reaching Jerusalem. At an entrance to Jerusalem from the West Bank, soldiers at an Israeli army checkpoint turned back all West Bank Palestinians. Local residents said side roads which they usually use to circumvent the checkpoints were also shut tight. Police closed roads adjacent to Jerusalem's Old City, allowing only public transport to pass. Prayers on the Temple Mount, which has accommodated 250,000 worshippers during the Moslem holy month of Ramadan, start at noon (0900 GMT). Palestinian President Arafat issued his call to prayer at a session of the Palestinian legislature on Wednesday in which he said the policies of Prime Minister Benjamin Netanyahu's government were tantamount to a declaration of war against Palestinians. Israel drew Palestinian anger this week by demolishing an Arab community centre in East Jerusalem which city officials said was built illegally. It also disclosed other plans to build additional housing in Jewish settlements. Israel rejects Palestinian claims to East Jerusalem, which it captured in the 1967 Middle East war. The Jewish state regards all of Jerusalem as its capital. Israeli Internal Security Minister Avigdor Kahalani said on Thursday police would use force if necessary to quell unrest on the Temple Mount. But on Friday Kahalani recalled clashes on the Mount on October 8, 1990, in which police killed 18 Palestinians. He said in an interview with Israel's Channel One Television he hoped to avoid conflict. "There are many lessons learned in the police from the Temple Mount incidents...If there are any problems we will enter only to repress the problems. But it is not always necessary to go in, it is possible things will die out naturally," he said. Kahalani, asked how the government could have allowed relations with the Palestinians to reach crisis point, said he thought Netanyahu, who took office in June, would soon meet Arafat. Israeli Foreign Minister David Levy has met Arafat but Netanyahu has so far resisted doing so. Arafat aide Nabil Abu Rdainah said talks overnight between Netanyahu adviser Dore Gold and top PLO official Mahmoud Abbas, also known as Abu Mazen, made no progress on any issue. Palestinians have been pressing Israel to carry out a troop redeployment in the West Bank city Hebron. The partial pullout agreed by Israel's previous government is viewed by Palestinians as a litmus test of Netanyahu's commitment to peace. Gold and Abu Mazen met in Tel Aviv hours after the Palestinans ended a general strike, the first in the West Bank and Gaza in two years. 6372 !GCAT !GDIP !GPOL Israel and the Palestinians have failed in fresh high-level contacts to make progress on any issue, an aide to Palestinian President Yasser Arafat said on Friday. In the latest effort to defuse tensions, Prime Minister Benjamin Netanyahu's representative in back-door talks, aide Dore Gold, met for five hours in Tel Aviv on Thursday with senior PLO official Mahmoud Abbas, better known as Abu Mazen. "The Israelis are still delaying and dragging their feet on all issues," Arafat aide Nabil Abu Rdainah told Reuters after the session. "The peace process is still paralysed, the resumption of negotiations in practical terms is frozen and the contacts until now have not led to any results at all," Abu Rdainah said. Gold and Abu Mazen met hours after the Palestinans ended a general strike, the first in the West Bank and Gaza in two years, to protest against Israel's decision to expand Jewish settlements and its policy on Jerusalem. "The meeting was a failure," another PLO official told Reuters. Netanyahu's office said it would not comment on the talks which followed a first meeting in Jerusalem between the heads of the main Israeli and Palestinian negotiating teams. Palestinians have been pressing Israel to carry out a troop redeployment in the West Bank city of Hebron, calling the partial pullout agreed by the former Labour government a litmus test of Netanyahu's peaceful intentions. Abu Rdainah said Egyptian Foreign Minister Amr Moussa had telephoned Arafat early on Friday to discuss ways to push the peace process forward. Arafat had also appealed to Jordan's King Hussein to intervene with Netanyahu, the aide said. Tensions were high in Jerusalem on Friday as Israel waited to see how many Palestinians would heed Arafat's call to flock to prayers at the Al-Aqsa mosque, a shrine symbolising the PLO's claim -- rejected by Israel -- to Arab East Jerusalem. 6373 !GCAT !GVIO An Israeli soldier was killed on Thursday afternoon in a clash with guerrillas in Israel's occupation zone in south Lebanon, the Israeli army said. "An army force on operations encountered a gang of terrorists. In the exchange of fire...an Israeli soldier was killed. During the clash Hizbollah terrorists fired mortars at an army position in the western sector of the security zone and at a village in the zone," an army statement said. No Israeli was wounded in the clash, the army said. Pro-Israeli militia sources in Lebanon had reported on Thursday that an Israeli soldier was killed and others were wounded when Moslem guerrillas ambushed an Israeli patrol close to the border in south Lebanon. The sources with the South Lebanon Army (SLA) said the ambush took place near an Israeli strongpoint at Blat, one km (half a mile) north of the Israeli border. In Beirut, the pro-Iranian Hizbollah (Party of God) claimed responsibility for the attack, saying its guerrillas ambushed the patrol with machineguns and rockets. 6374 !GCAT These are the leading stories in the Tunisian press on Friday. Reuters has not verified these stories and does not vouch for their accuracy. LA PRESSE - Twelve Tunisian immigrants expelled by France. President Zine al-Abidine Ben Ali asks Foreign Affairs Minister Habib Ben Yahia to follow up the problem. - National Solidarity Fund spent 194 million dinars for the poor during the past three years. LE TEMPS - The ruling Constitutional Democratic Rally (RCD) party names new representatives in several provinces. ($1 = 0.96 dinar) 6375 !GCAT These are the leading stories in the Moroccan press on Friday. Reuters has not verified these stories and does not vouch for their accuracy. LE MATIN DU SAHARA - King Hassan meets former Israeli prime minister Shimon Peres. - Morocco plans to reinforce diplomatic ties with Asian, African and South American partners to expand trade cooperation. - Ministerial delegation visits Western Sahara to tackle unemployment and promote economy. LE QUOTIDIEN DU MAROC - Interior ministry anti-narcotics squad dismantles drug network in Tangier. AL-MAGHRIB - Half a million Moroccan expatriates passed through Spain to reach Europe after spending holidays at home. LA VIE ECONOMIQUE - Morocco expects intense political activity with referendum on constitutional reform. - Casablanca transport companies find it difficult to make profit. - Finance Minister Mohamed Kabbaj says economy is picking up, but deplores insufficient gain from privatisations after some operations were postponed. 6376 !GCAT !GDIP Egyptian Foreign Minister Amr Moussa was quoted on Friday as calling the Israeli government's peace moves with the Palestinians mere "window dressing". "In general, we see no progress in the Palestinian channel," he said in an interview with Israel's Maariv newspaper. "Here and there they try to sell us window dressing -- meetings of leaders for photo opportunities. We are not buying it and will not give up on real progress." Moussa also lashed out at Israel's decision to expand Jewish settlements in the West Bank. "We are following this very attentively. Such a policy could destroy the entire (peace) process and proves that the Israeli government is not serious," he was quoted as saying. Asked about the possibility that Egyptian President Hosni Mubarak might cancel a Middle East economic conference planned in Cairo in November, Moussa said: "The real threat to the conference comes from Israel. "It is impossible to speak about regional economic cooperation without honouring agreements...Mubarak has made it clear that if you don't move ahead it will be impossible to convene a successful conference," he told Maariv. Israeli Foreign Minister David Levy will visit Egypt on Sunday for talks with Mubarak. It will be Levy's first trip to an Arab state as a minister in Prime Minister Benjamin Netanyahu's government. 6377 !GCAT These are some of the leading stories in the Jordanian press on Friday. Reuters has not verified these stories and does not vouch for their accuracy. AD DUSTOUR - King Hussein says "the path of all Jordanians is one", urges rejection of "sectarianism"; says Jordan's fate "is to stand in the face of challenges". - Prime Minister Kabariti discusses with Palestinian leader Arafat in the West Bank city of Ramallah developments in the peace process and bilateral ties. King confirms his continued and permanent support for the Palestinian people. AL RAI - Leasing of 12 land plots in Aqaba city for tourism investment projects. - Kabariti says the attack on Jerusalem's holy sites are an attack on Jordan and insists "we cannot accept the expansion in Israelis settlements"; calls for "end to siege and policy of starving Palestinians". 6378 !GCAT !GPOL Palestinian President Yasser Arafat arrived in the West Bank self-rule enclave of Nablus from Ramallah on Friday, witnesses said. His aides said Arafat would hold the weekly meeting of the Palestinian self-rule Authority's cabinet in Nablus on Saturday. In Jerusalem, Israeli security forces were bracing for thousands of Palestinians expected to answer Arafat's call earlier this week to come to the city holy to Moslems, Arabs and Jews to pray in protest against Israel's settlement policy in the West Bank and delay in peace negotiations. Palestinians want Arab East Jerusalem as the capital of a future independent state. Israel, which captured and annexed East Jerusalem in 1967, says it will never cede any part of the city. Arafat, who made an interim peace deal with Israel in 1993 that set up self-rule, says he will only visit Jerusalem once Israeli occupation has ended. 6379 !GCAT These are some of the leading stories in Cyprus newspapers on Friday. Reuters has not verified these stories and does not vouch for their accuracy. ALITHIA - The rates of development and inflation are satisfactory. Expenses on travel and overtime will not increase, Finance Minister Christodoulos Christodoulou says. HARAVGHI - Water dams almost eampty. The public needs to become conscious of the problem and save water, head of water department Lakis Christodoulou says. CYPRUS MAIL - United Nations dismisses speculation that Turkish ship was laying mines or other barriers in the Kappari area of Paralimni on Wednesday. - Permits have been granted for building new hotels within the boundaries of the proposed Akamas national park. PHILELEFTHEROS - Seven building contractors compete for the construction of the new hospital in Nicosia. SIMERINI - President Glafcos Clerides said nothing during council of ministers meeting yesterday about a cabinet reshuffle. 6380 !GCAT These are the leading stories in the Egyptian press on Friday. Reuters has not verified these stories and does not vouch for their accuracy. AL-AHRAM - Prime Minister Ganzouri meets with the governors, decides on building 186 women's healthcare centres in 19 governorates; increasing hotel capacity by 50 percent in the next four years. - Presidential advisor Osama el-Baz says Israel must make visible efforts to save the peace process. - Chinese investors have shown interest in the Egyptian market, Ganzouri says. AL-AKHBAR - Al-Ahrar opposition daily editor Mostafa Bakri refuses to leave the newspaper headquarters after he was dismissed by his party's head and brings in state security officers to protect him. - Security officials demand farmers to tidy up their sugar cane fields, particulary in the south to hinder Moslem militants hiding in them. AL-GOMHURIA - Ganzouri says Egypt will offer 21 giant industrial projects to international investors. - Before the London-based Islamists conference: Egyptian security reveals facts and documents to British officials about the terrorists and their plots. -- Cairo newsroom +202 578 3290/91 6381 !GCAT These are the leading stories in the Beirut press on Friday. Reuters has not verified these stories and does not vouch for their accuracy. AN-NAHAR - Holland to reopen its embassy in Lebanon. -An Israeli soldier killed in a clash with Hizbollah guerrillas in south Lebanon. AS-SAFIR -Parliament Speaker Berri to Damascus for talks on the Lebanese parliamentary elections. Berri to announce his list no earlier than Sunday. AL-ANWAR -The parliamentary battle heats up in Beirut two days prior to the third round of voting in the capital. -The Beirut Stock Exchange to sign a cooperation agreement with the bourses of Egypt and Kuwait next month. AD-DIYAR -Hizbollah wants to make up for his Mount Lebanon loss in the upcoming Bekaa valley round of elections. NIDA'A AL-WATAN -One hundred and twenty two candidates will compete in the south Lebanon elections. 6382 !E51 !E512 !ECAT !GCAT !GDIP Saudi Arabia and Yemen signed an economic cooperation agreement aimed at promoting ties soured since the 1990-91 Gulf crisis, Yemen's official Saba news agency reported on Friday. The agreement, signed on Thursday during a groundbreaking visit to Yemen by Saudi Defence Minister Prince Sultan, "aims at promoting bilateral cooperation in economic, commercial, investment and technical fields", Saba said without elaborating. Saudi Arabia cut off all financial aid to impoverished Yemen and expelled hundreds of thousands of Yemeni workers during the 1990-91 crisis over Iraq's occupation of Kuwait. Prince Sultan met Yemeni President Ali Abdullah Saleh on Thursday night for the third time in two days for talks "aimed at activating and hastening work of the joint committees" set up last year to demarcate the two countries' land and sea borders, Saba said. Saleh described the talks as "frank, clear and positive" and predicted positive results in the near future, the agency said. The two Arab neighbours' points of view were "getting closer and hurdles facing the joint committees are being removed", the president said. A joint communique was expected to be issued later on Friday at the end of Prince Sultan's three-day visit, an official source told Reuter. 6383 !GCAT !GPOL !GVOTE It is often said, only half jokingly, that the dead vote in Lebanese elections -- and opposition candidates say nothing has changed in the latest parliamentary polls. As the first of five regional rounds of voting began on August 18 a journalist asked government minister Walid Jumblatt if the dead were voting yet in his Shouf mountain constituency. "What time is it?" Jumblatt replied. Looking at his watch, he said: "It's too early for the dead. They don't wake up until around 4 p.m." Jumblatt, chief of the Druze minority, is a gadfly among Lebanese politicians, known for what newspapers call his "incendiary wit". But opposition candidates say this was no joke and that votes were indeed cast for dead voters on August 18. By 4 p.m. the state of the race is clear and polling station officials know if they need extra votes for the government, said opposition electoral representative Ghassan Moukheiber. Using lists including dead and emigre voters, they scribble signatures beside names to show they have voted. Then they pop ballot papers into the box, Moukheiber said. Newspapers, opposition candidates and an independent electoral watchdog accused the government of massive fraud in the first round voting and expressed fears that more would occur in the subsequent rounds on the following four Sundays. The Lebanese Association for the Democracy of Elections (LADE) said after the government won a surprising 32 of 35 seats in Mount Lebanon the fraud was "unacceptable" in some areas. Charges of malpractice were also raised during the second round of voting in North Lebanon on August 25 but Paul Salem of LADE said abuses were far less serious than in the first round. One alleged weapon on August 18 was the power cut. Winning candidate Roucheid al-Khazen said he had film of the lights going out at a counting centre two minutes after a local official was told Foreign Minister Faris Bouez was trailing. Several ballot boxes vanished before power was restored in the government building, Khazen said. Bouez said the charges were serious and called for an inquiry. Three losing candidates announced appeals to the recently formed Constitutional Council to order new polls. The court last month showed its independence by cancelling part of the election law as unconstitutional. The opposition said dozens of their delegates were held by police on the night before the vote, and others were frightened off by threats from observing voting and vote-counting. "We weren't surprised that there were abuses, but we didn't believe it would go that far," Moukheiber told Reuters. Moukheiber was detained when he asked an army officer why two people including the chief delegate of an opposition candidate were under arrest outside a polling station. "He said it was none of my business and threatened to arrest me. I said I had immunity as a lawyer. He said no, and arrested me and I was held for 30 minutes," Moukheiber said. He was freed after telephone calls to President Elias Hrawi and army commander General Emile Lahoud. Lebanese voters cast their ballot by putting a list of candidates into an envelope and placing it in a ballot box. If no one is crossed off the list all candidates receive a vote. Alleged abuses on August 18 included uniformed police illegally inside polling stations handing out pro-government lists and watching that voters did not cross off names. "There was enormous pressure on voters," Moukheiber said. Many polling stations lacked curtained booths for marking lists. Where they existed, some officials pressured voters not to use them or followed voters into the booth. "Yes, our supporters did provoke incidents," al-Khazen said. "But that was in polling stations where police were present near the voting booths and were checking how people voted." Opposition candidates said they only received voter lists just before the vote and many polling stations were moved at the last moment. In one of the strangest incidents, busloads of newly naturalised Lebanese citizens voted without entering polling stations, Moukheiber said. The opposition charged that interior ministry officials pressured the new citizens to vote for minister Michel al-Murr to ensure that they received citizenship papers. The ministry is responsible both for granting citizenship and organising elections. Murr, who has refused comment on the allegations, won the biggest vote in Mount Lebanon. "There were cases of buses of newly naturalised people driving up to polling stations," Moukheiber said. "The Murr delegate came out, took their IDs and went in and voted for them. "They were given sandwiches as they waited." 6384 !GCAT These are some of the leading stories in Israeli newspapers on Friday. Reuters has not verified these stories and does not vouch for their accuracy. JERUSALEM POST - Soldier killed in Lebanon clash. - Police brace for unrest on Temple Mount. - Israeli Prime Minister Netanyahu could meet Palestinian President Arafat soon if no "untoward events", unnamed official in Netanyahu's office says. - Dovrat Shrem wins Hapoalim Investment tender. - IMF team arrives next week. - Bank Leumi increases Africa Israel stake. - Further reduction of import duties in "exposure program" due next week. - Bank Hapoalim profits steady; Leumi's up 38 percent. - New Zim ship arrives in Haifa. HAARETZ - Two thousand police deploy in Jerusalem ahead of Friday Moslem prayers. - Soldier killed in Lebanon. - Hamas Sheikh Yassin briefly hospitalised. - Ultra-Orthodox Jewish newspaper says it is obligation to hate Supreme Court justices. - Three workers at northern hospital come down with rare virus. YEDIOTH AHRONOTH - Masses of Palestinians expected to answer Arafat's call for Friday prayers in Jerusalem. - Israel deploys fake police patrol cars along road to slow down its speedy drivers. MAARIV - Thousands of police deploy for Jerusalem Moslem Friday prayers. - Readjusted map of areas to get tax, other benefits, prepared, may be presented to government next week. - Egypt's foreign minister says Netanyahu's first days of grace in office are over. 6385 !GCAT !GVIO Thousands of Palestinians are expected to pray at a Jerusalem mosque on Friday in a protest against Israel's policy on the city which both Jews and Arabs call their capital. Police ordered reinforcements into Jerusalem, a city holy to Jews, Moslems and Christians, after Palestinian President Yasser Arafat called on his people to converge on the city for prayers at noon (0900 GMT) on Friday. Restrictions Israel maintains over the West Bank and Gaza Strip will prevent most Palestinians from reaching the al-Aqsa Mosque, Islam's third holiest shrine perched on the ancient Jewish Temple Mount, but Palestinians in East Jerusalem are expected to flock to the site. "We intend to prevent any inflammatory elements from reaching the Temple Mount....If we have to use force, we will," said Internal Security Ministry official Avigdor Kahalani on Thursday. Palestinian legislator Hanan Ashrawi said Arabs would hold massive prayer meetings at Israeli roadblocks if soldiers prevented them from reaching Jerusalem. "People are going to go to the checkposts and they have the right to go through and to reach the mosque. Should Israel prevent them, I am sure that there will be public prayers at the checkposts," she said. The protest was triggered by Israeli announcements this week on the expansion of Jewish West Bank settlements surrounding Jerusalem and the demolition of an Arab community centre in East Jerusalem which city officials said was being erected illegally. Arafat said the moves by Prime Minister Benjamin Netanyahu's government were tantamount to war. "What happened concerning continuous violations and crimes from this new Israeli leadership means they are declaring a state of war against the Palestinian people," he told legislators this week. Palestinians observed a four-hour general strike in the West Bank and Gaza Strip on Thursday and then had their busiest day of contacts with Israel since Netanyahu, who opposed Israel-PLO peace deals, swept to power in May elections. Leaders of an Israeli-Palestinian steering committee charged with monitoring implementation of Israel-PLO agreements met for the first time since Palestinian suicide bombings rocked Israel in February and March. But after the meeting the two men had different views of peace prospects. "I believe after this meeting that we have the ability to advance all the issues that today are found at different levels of implementation," said Israeli negotiator Dan Shomron. His Palestinian counterpart, Saeb Erekat said: "It is not a secret that the status of peace is slipping like sand outside our fingers." Later on Thursday, Netantyahu aide Dore Gold met senior PLO negotiator Mahmoud Abbas, better known as Abu Mazen. Palestinian officials said the U.S. ambassador to Israel, Martin Indyk, was mediating between the two sides and had met with Arafat. Palestinians complain that settlement expansion in the West Bank and Gaza and Israel's policy on Jerusalem help tighten the Jewish state's grip over areas where Arafat hopes to create an independent Palestinian state. Netanyahu rules out Palestinian statehood. Israel captured East Jerusalem in the 1967 Middle East war and quickly annexed it. Israeli governments since then have all vowed to keep Jerusalem united as the Jewish state's eternal capital. Palestinians want East Jerusalem for the capital of their future state. 6386 !GCAT !GVIO An Israeli soldier was killed on Thursday afternoon in a clash with guerrillas in Israel's occupation zone in south Lebanon, Israel radio reported on Friday. Pro-Israeli militia sources in Lebanon had reported on Thursday that an Israeli soldier was killed and others were wounded when Moslem guerrillas ambushed an Israeli patrol close to the border in south Lebanon. The sources with the South Lebanon Army (SLA) said the ambush took place near an Israeli strongpoint at Blat, one km (half a mile) north of the Israeli border. In Beirut, the pro-Iranian Hizbollah (Party of God) claimed responsibility for the attack, saying its guerrillas ambushed the patrol with machineguns and rockets. 6387 !GCAT !GDIP Controversial U.S. Nation of Islam leader Louis Farrakhan, in Libya to receive an award worth $250,000, described himself here on Thursday as a revolutionary, but disavowed the use of violence. Farrakhan is due to accept in a ceremony on Friday evening the Muammar Gaddafi Human Rights Award that the North African nation is this year presenting to the African American people. He gave a news conference on Thursday evening, excerpts of which were later shown on Libyan television. Describing a meeting earlier with Libyan leader Muammar Gaddafi, Farrakhan said: "I told brother Gaddafi that I, too, am a revolutionary, but I will not make a revolution with the gun. I told him that I will produce in America a change of heart and a change of mind with this book -- and I held the Koran." The U.S. Treasury Department on Wednesday denied Farrakhan's application to receive either the $250,000 honorarium that goes with the award or the $1 billion that Gaddafi had pledged to the Nation of Islam after meeting Farrakhan last January. The Treasury said Libya had been on Washington's list of states that sponsor international terrorism since December 1979, and noted Libya had refused to turn over two Libyan suspects in the 1988 bombing of Pan Am flight 103 over Lockerbie, Scotland. That refusal led to the imposition of U.N. sanctions on Libya. Farrakhan organised last October's Million Man March in the United States that brought thousands of black Americans to Washington for a peaceful rally. He arrived in Libya on Wednesday, and on Thursday morning he attended the opening seminar of the conference held each year in conjunction with the award. On Tuesday he said in Chicago he would fight any U.S. government effort to deny him the Libyan funds, which he said would be used to build schools and businesses in American black communities. He told his Tripoli news conference that Gaddafi was "one who would not (only) use the wealth of Libya to improve the wealth of the Libyan people, but also to improve the quality of life of oppressed people throughout the world". He said the Nation of Islam was encouraging black Americans to register to vote. "So that drive is going exceedingly well and we intend both now and in the future to play a very significant role in electoral politics in the United States of America." He also said Gaddafi had "befriended the Honorable Elijah Mohammed (founder of the Nation of Islam) and the Nation of Islam some 25, nearly 30, years ago and the Libyan Jamahiriyah (masses) loaned the Nation of Islam monies to allow the Nation to purchase its flagship mosque in Chicago." 6388 !CCAT !GCAT !GDIS Fog and low cloud prevented rescue workers on Friday from starting the grim task of pulling bodies from a wrecked Russian airliner that crashed into a snow-capped mountain in the Arctic. The plane, carrying coalminers from Moscow to the remote Arctic island of Spitzbergen, crashed as it came in to land on Thursday. All those on board, 129 passengers and 12 crew, were killed. Most were from Ukraine. Norwegian rescue workers and investigators met in Longyear, the island's main town, to discuss the difficult work ahead. The wreckage is on a mountain some seven km (four miles) east of Longyear. Officials said continued low cloud and fog had prevented helicopters starting recovery operations. The weather forecast predicted rain, fog and snow for the day. Investigators do not yet know whether the plane flew off course or whether it simply came in too low. Visibility was poor and the weather was bad when the plane hit the mountain just after 10 a.m. (0800 GMT) on Thursday. Norwegian officials are hoping to recover the plane's flight data recorders from the crash site. "We are trying to establish what happened as soon as possible," said Elisabeth Aarsaether, spokeswoman for the island's governor. The Tupolev Tu-154 was bringing miners and members of their families to work in a Russian open-cast mine. Spitzbergen is governed by Norway but Russia has rights of access under an international treaty from the 1920s. The accident stunned the tiny Russian and Norwegian mining communities. Fewer than 3,000 people live on Spitzbergen, which has one of the world's harshest climates and lies some 500 miles (800 km) off the northern tip of Norway. "It is hard to lose people with whom one has worked," Russian consul Vladimir Nosyov told Norwegian television. Rescue teams had to abandon efforts to recover bodies and examine the wreckage less than six hours after Thursday's crash, because of thick fog and freezing winds. Norwegian officials said there was also a risk of avalanches and possible danger from polar bears which roam Spitzbergen freely. Last year, bears killed two people on the island and few people venture out unarmed beyond the main settlements. Prime Minister Gro Harlem Brundtland said the worst air disaster in Norway's history was "a great tragedy". There are no roads leading to the snowbound crash site. Photographs released by the Norwegian authorities showed a smashed fuselage and pieces of the airliner's tail section which had slid down the mountainside after the three-engine plane crashed and broke up. In one photograph, a body could be seen in the foreground, partly covered by wreckage. Once recovered, the bodies will be flown to the northern Norwegian city of Tromsoe. Air traffic control lost contact with the flight shortly before it was scheduled to land. The pilot had not reported any problems during his approach. Western aviation experts have raised questions about the safety of Russian airline operations following the breakup of the Soviet Union in 1991. But the pilot was experienced and the plane had been in service for only eight years. Yevgeny Buzny, an official of the Russian mining company which chartered the plane, said there were seven children and 4O women on the plane. The miners were on their way to start work in the Russian towns of Barentsburg and Pyramiden -- relieving more than 100 colleagues and their families who were already waiting at Longyear airport to fly home on the same plane. Many of the Russians waiting to leave spent the night in Longyear's church and the local priest organised a sombre breakfast for them on Friday. Stig Kristiansen, a shopowner in Longyear, said some of those waiting to leave had come into his shop just before Thursday's accident. "They were smiling," he told Norwegian television. "Then, half an hour later, they were crushed." 6389 !GCAT Headlines from major national newspapers. Reuters has not verified these stories and does not vouch for their accuracy. EL PAIS - Scandal surrounding campaign adviser mars Clinton's nomination El MUNDO - Civil Guards, uncontrolled, spy on one of witnesses in case against general Enrique Rodriguez Galindo ABC - Herri Batasuna is manipulating young Basques to make them heroes today and gunmen tomorrow LA VANGUARDIA - Clinton wins full support of Democratic Party CINCO DIAS - 16 trillion pesetas of unproductive savings (investment funds) EXPANSION - Repsol's profit falls for first time in its history GACETA DE LOS NEGOCIOS - Government opens 60 billion peseta account for small and medium-sized companies 6390 !GCAT NEUE ZUERCHER ZEITUNG - Swiss annual inflation rate in August dropped by 0.1 percentage ponits compared with the month before. - The canton of Zug decided to cut the number of high-school years from now seven to six years. - Russian extremist Shirinowski critizised Switzerland as he did not receive a visa to enter the country. He said that he had uncovered operations between Swiss and Russian businessmen who plundered Russia. ' Switzerland is the centre of international crime' he said. TAGES ANZEIGER - Swiss postal authorities plan to cut annual expences by 100 to 130 million Swiss francs due to slim management. - Migros, a large Swiss supermarktet chain, said it will cut its financial support for the LDU, a minor Swiss centrist party, from three million francs per year to 300,000 francs. - Swiss travel group Kuoni doubled its net profit to 13.8 million Swiss francs in the 1996 first half compared with the same period last year. JOURNAL DE GENEVE - The Swiss government said that it rejected the idea that all people involved in a car accident should have their blood tested for substances, such as drugs and certain medication, that diminishes the driving ability. 6391 !GCAT !GDIS The grim job of recovering bodies from the wreck of a Russian airliner that crashed in the Arctic starts on Friday as investigators try to find out what caused the accident that cost more than 140 lives. The plane, carrying coalminers from Moscow to the remote Arctic island of Spitzbergen, crashed into a snow-capped mountain as it came in to land on Thursday. Norwegian officials said initially there were 143 people on board, including some women and children. Later, they told reporters the final toll was 141 -- 129 passengers, 12 crew. The Tupolev Tu-154 was taking miners and some of their families, most of them from Ukraine, to a Russian open-cast mine. Spitzbergen is governed by Norway but Russia has rights of access under an international treaty from the 1920s. Rescue teams had to abandon efforts to recover bodies and examine the wreckage less than six hours after the crash, because of thick fog and freezing winds. Norwegian officials said there was also a risk of avalanches and possible danger from polar bears which roam Spitzbergen freely. Last year, bears killed two people on the island and few people venture out unarmed beyond the main settlements. There are no roads leading to the snowbound crash site, which was guarded overnight by police housed in hastily-erected huts brought in to shelter them from the elements. Helicopter-led recovery operations were expected to resume early on Friday if the weather allows. Prime Minister Gro Harlem Brundtland said the worst air disaster in Norway's history was "a great tragedy". The plane hit the mountain in bad weather and poor visibility as it came in to land at Longyear, the main town on Spitzbergen, just after 0800 GMT on Thursday. Photographs released by the Norwegian authorities showed a smashed fuselage and pieces of the airliner's tail section which had slid down the mountainside after the three-engine plane crashed and broke up, seven km (four miles) east of Longyear. In one photograph, a body could be seen in the foreground, partly covered by wreckage. The cause of the crash remained a mystery. The first Norwegian investigators arrived in Longyear late on Friday and Russian officials were also on their way. Air traffic control lost contact with the flight shortly before it was scheduled to land. The pilot had not reported any problems during his approach. Western aviation experts have raised questions about the safety of Russian airline operations following the breakup of the Soviet Union in 1991 -- but the pilot was experienced and the plane had been in service for only eight years. The Russian news agency Itar-Tass said Captain Yevgeny Nikolayev had flown Tu-154s for more than 20 years. Tass quoted the airline's technical department as saying that Nikolayev and his crew members "knew the plane down to the last screw". Norwegian rescue teams said they found no survivors and an official of the Russian mining company which chartered the plane, Trust Arktik Ugol, said all on board had been killed. Yevgeny Buzny told the Norwegian news agency NTB there were seven children and 4O women on the plane. The tiny Russian mining community was "in a state of shock", he said. The coalminers were on their way to start work in the Russian mining towns of Barentsburg and Pyramiden -- relieving more than 100 colleagues who were already waiting at Longyear airport to fly home on the same plane. Many of the Russians waiting to leave broke down and wept at the news of the crash. The Russian community on Spitzbergen numbers fewer than 2,000 people in Barentsburg and Pyramiden. The Norwegian mining town of Longyear, the only other settlement, has about 1,000 people. Spitzbergen lies some 500 miles (800 km) off the north coast of Norway and has one of the most extreme climates in the world. The last air disaster involving a plane of the same make was in June 1994, when a China Northwest Airlines Tu-154 crashed, killing all 160 on board. In January of the same year, a Russian Tu-154 crashed in Siberia, killing all 124 people on board. 6392 !GCAT Following are some of the leading stories in Norwegian papers this morning: AFTENPOSTEN -A Russian airliner carrying 129 passengers and 12 crew crashed on the remote Arctic island of Spitzbergen on Thursday. No survivors have been found. The plane was carrying coalminers from Russia and Ukraine travelling to the Russian town of Barentsburg. -Harald Norvik, President of state-owned oil company Statoil, says current levels of oil production are correct and should not be altered. The oil industry was surprised on Thursday when the conservative party joined other opposition groups and demanded the Labour goverment slow down the speed of hydrocarbon extraction. DAGENS NAERINGSLIV -On Monday the European Union Commision will begin a large-scale investigation into Norway's production of salmon following British allegations of dumping and subsidising by the Norwegian industry. -British broker house NatWest Securities says in shares in Norway's largest life insurance group UNI Storebrand could reach 44 crowns within a year. Currently the share stands at around 35.70 crowns. 6393 !C15 !C152 !C31 !CCAT !GCAT !GFAS German fashion group Jil Sander AG said on Friday it expected 1996 sales to rise a minimum five percent but for profits to only match 1995 levels. The Hamburg-based group, founded by the famous German designer Jil Sander, said pre-tax profit for the first six months of the year were down six percent to 10.5 million marks because of costs to open new boutiques in Berlin and Munich. Profits during the period were also hurt by investment in plans for the introduction Jil Sander's menswear line. But six-month sales were up 5.8 percent to 85.8 million marks. Sales in 1995 at Jil Sander in 1995 were 163.2 million marks, while pre-tax profit was 12.4 million marks. Jil Sander, in saying it expected higher sales, noted its incoming orders during the six-month period were up 4.8 percent to 114.2 million marks. 6394 !C15 !C152 !C42 !CCAT !E41 !ECAT !GCAT !GJOB German construction group Wayss & Freytag AG said on Friday that it was aiming for an improvement in its results during the second half of the year after six-month construction output fell four percent. The Frankfurt-based construction group, noting difficult industry conditions, said job cuts would be necessary but declined to be more specific. Wayss said the improved outlook for the second half of 1996 was based on a 44 percent increase in incoming orders during the first half of the year and good foreign business. But Wayss said it looked for a real two percent drop in building investment in Germany, saying the industry was gripped by a recession. It expected a drop of four percent in west Germany but an increase of two percent in east Germany. --Frankfurt Newsroom +49 69 756525 6395 !GCAT !GODD The Swedish press, ever down to earth about the country's royal family, has suggested that neighbouring Finland rent Crown Princess Victoria for $230,000 a year, Finnish daily Helsingin Sanomat reported on Friday. Victoria, 19, is in Finland on her first state visit and has been enthusiastically welcomed by the republican Finns, who elected a German prince as king in 1918 -- though he never got to Finland after Germany lost World War One. Helsingin Sanomat quoted journalists from top Swedish daily Dagens Nyheter and magazine Se & Hor as suggesting Finland rent Victoria for five years. If she alone lacked appeal, they also offered to throw in a star Swedish ice hockey coach. 6396 !GCAT The following are leading domestic stories in Portuguese newspapers. DIARIO ECONOMICO - Banco Santander de Negocios Portugal and Banco Pinto & Sotto Mayor will lead a five billion escudo five-year Navigator bond for Household Finance Corporation. - Banco Mello Comercial, formerly Uniao de Bancos Portugueses, made a 154 million escudo profit in the first half of 1996 after posting a loss of 1.84 billion escudos in the same period of 1995. PUBLICO - Siemens and the Portuguese government will sign an investment contract today to set up an electronic chip plant in northern Portugal. - Caixa Economica Acoriana's former president, Emanuel de Sousa, is to sue the institution for accusing him of defrauding the institution of four billion escudos. DIARIO DE NOTICIAS - Portugal's trade deficit fell 15.9 percent in the first five months of 1996 to 582.5 billion escudos. - The centre-right Social Democratic Party (PSD) is studying in which town councils it might be able to form coalitions with the right-wing Popular Party (PP) ahead of local authority elections. --Lisbon bureau 3511-3538254 6397 !GCAT Following are some of the leading stories in the Swedish papers this morning. Reuters has not verified these stories and does not vouch for their accuracy. DAGENS NYHETER - Dozens of restaurants in Sweden's capital have been condemned for their slack health standards after health inspectors visited 150 locations. But some restauranteurs complained Sweden's health standards were excessively high. - The use of anti-depressive drugs has shot up in Sweden, with sales tripling since 1991. - Sweden's Nordbanken forecasts debt yields bottoming out by the start of 1997 but will then start rising again. SVENSKA DAGBLADET - Swedish SCA is to push into the Asian transport packaging market by setting up a new company with U.S. Weyerhaeuser. - Light export commodities are to give new jobs in the future because of the lower cost of shipping the goods to the buyers and its high commodity value. DAGENS INDUSTRI - Swedish exports have grown stronger than expected this year, forcing Nordbanken to revise its May predictions of 0.3 percent GNP to 1.33 percent for 1996. The strong Swedish crown has affected exports less than expected. - Swedish industrial companies are investing large sums in the Brazilian market. A total of 115 Swedish firms plan combined investment worth a total of $1 billion in Brazil over the next five years. - Volvo stocks are the favourite shares among foreign investors in Sweden, totalling 1.7 billion crowns in 1997, according to statistics by Sweden's central bank. -- Paul de Bendern, Stockholm newsroom +46-8-700 1006 6398 !C13 !CCAT !G15 !G153 !GCAT !GHEA !GVIO French farmers angered by falling beef prices led a herd of cows through Paris towards the Eiffel Tower on Friday and sent a delegation to see President Jacques Chirac at the Elysee palace. The herdsmen were slowly wending their way into central Paris, their cows in tow, to drive home their message of discontent over the state of the beef market since this year's disclosure that mad cow disease appeared to be a risk to human health. They began their protest three weeks ago in the central town of Charroux, and their slow march across the country has been steadily picking up steam. Chirac, who started out as an agriculture minister defending farmers' interests in the European Union, has agreed to meet them to discuss their concerns. While the delegation of five prepared to meet Chirac, the main group of protesters was headed through the streets of the capital towards the Eiffel Tower from suburban Versailles, where they had spent the night. On Thursday, thousands of farmers blockaded roads across the country in a protest aimed at barring imports of beef from outside the European Union. Farmers had threatened an "incendiary" end to the summer holidays and the blockade was the first in a wave of social unrest expected to target the austerity-minded centre-right government in coming weeks. The FNSEA farmers' union, which mobilised demonstrators by mobile phone and fax in secrecy, said about 15,000 farmers erected blockades on main roads and at motorway toll gates in many areas to carry out spot checks on lorries. The main quarry was trucks carrying imports from Britain or from outside the EU -- especially cheap imports from eastern Europe, which breeders say have helped force beef prices down by a third in recent months after the mad cow crisis. The unions demanded the suspension of imports of live animals and beef from third countries. Agriculture Minister Philippe Vasseur has asked EU Farm Commissioner Franz Fischler for new measures to ensure that imports of non-EU cows for fattening within the 15-nation bloc and of non-EU beef did not harm the EU market. But while Vasseur acknowledged the breeders' "distress and disarray", a ministry official said that France did not favour banning non-EU beef. 6399 !E12 !ECAT !G15 !G154 !GCAT !M13 !M132 !MCAT The Swiss National Bank's (SNB) worst fear in connection with the creation of a single European currency is a generous interpretation of the Maastricht convergence criteria, which could trigger a strong rise by the Swiss franc, its chief economist Georg Rich said. The only realistic options facing the Swiss central bank in that event would be to continue to steer an independent course or to peg the Swiss franc to the Euro, Rich told Reuters in a recent interview. Rich does not think it very likely the convergence criteria will be watered down, but said the SNB cannot ignore the possibility and has started considering its options. "If we were confronted with a very strong appreciation of the Swiss franc, then it might be a better choice to peg the Swiss franc to the Euro," Rich said. But the SNB would rather retain an independent monetary policy matched by a future European central bank that stresses price stability. A possible softening of the criteria for European Economic and Monetary Union (EMU) has returned to the spotlight since Italian officials suggested the criteria be renegotiated in light of Europe's sluggish economy. Both Chancellor Helmut Kohl and Bundesbank President Hans Tietmeyer have rejected any dilution of the criteria, but it is clear both Germany and France face an uphill battle to meet them Countries that want to be part of EMU and the Euro from 1999 must meet a series of tough economic targets by 1997, and the criteria for budget deficits looking particularly hard to attain without severe austerity measures. The SNB has often warned of the danger to the franc from a softening of the criteria and past SNB president Markus Lusser has said a delay in the timetable for the Euro would in fact boost market confidence in the new currency. If the Swiss franc was pegged to the Euro, softening the EMU criteria would create problems for the SNB, Rich said. It would undermine the credibility of a future European central bank and raise questions in the markets over the bank's commitment to price stability. "This is exactly the situation where you don't want to peg your exchange rate because by doing so you import the bad policy conducted by the other central bank," Rich said. "What concerns us the most is the scenario that the Maastricht Convergence criteria would be interpreted in a very generous way and the whole project would start in a bad manner." Options such as adopting a crawling peg or placing the Swiss franc within an exchange rate band are not realistic, Rich said. "An exchange rate band really doesn't accomplish that much. If it is narrow, you are de facto pegging the exchange rate. If it is wide it is not so far away from what we are doing at the moment," he said. To judge when the franc might have risen too far, the SNB would look not at a specific exchange rate, for example against the mark, but at the overall effect such a rise would have on the economy and whether it triggers deflationary developments. "The Swiss National Bank is obliged to maintain price stability and that not only means preventing inflation but also deflation," Rich said. Rich said he was a firm believer in the self-correcting forces of markets and found it hard to believe the Swiss franc, already highly valued, would continue to rise without limits. "I think a situation will arise where markets would say the Swiss franc is so strongly overvalued that the possibility of a correction must be considered," Rich said, adding: "The Swiss National Bank could contribute to trigger such developments by adjusting monetary policy, but I don't think the job could be done by us alone." -- Zurich Editorial +41 1 631 7340 6400 !C15 !C151 !CCAT !GCAT !GFAS Six months to June 30 (in millions of marks unless stated) Group pre-tax profit 10.54 vs 11.21 Group sales 85.8 vs 81.2 Of which -- Domestic 40.2 vs 43.0 -- Foreign 45.6 vs 38.2 Group incoming orders 114.2 vs 109.0 Of which -- Fall/winter collection 68.3 vs 66.5 -- Spring/summer collection 45.9 vs 42.5 Group workforce 372 vs 360 NOTE - Full name of the German women's fashion retailer is Jil Sander. The company said the incoming orders data reflects orders through August 27. It does not include the Jil Sander Collection GmbH and Jil Sander Paris. Jil Sander said the lower 1996 six-month pre-tax profits were hurt by a planned men's collection as well as costs for the opening of new flagship stores in Munich and Berlin planned for September. 6401 !GCAT !GVIO French Justice Minister Jacques Toubon on Friday welcomed a police crackdown on separatist violence on Corsica despite a new bombing overnight on the French Mediterranean island. "I think this is a very positive development, and shows good work by the police," Toubon said, adding that six Corsicans detained on suspicion of involvement in bomb attacks would probably be turned over to Paris prosecutors later in the day. "You cannot completely turn around in just a few months a policy that has been adrift for 20 years," he told RTL radio, defending his government against criticisms that it appeared powerless against the separatists' longtime guerrilla campaign. The detention of the six suspects on Thursday marked the first concrete action by police on Corsica since the start of a wave of bombing in mid-August, when nationalist militants called off a shaky seven-month truce. But as if to mock the authorities, another bomb went off overnight on the island, at a villa belonging to the daughter of a French cabinet member, police said on Friday. The small bomb exploded at the villa of Laetitia Pasquini, daughter of Veterans Minister Pierre Pasquini, in the tiny southern village of Zigliara. No one was in the villa at the time and there were no injuries, police said. Overnight on Wednesday, a bomb seriously damaged Agriculture Ministry offices located just 50 metres (yards) from a police station in the centre of the island capital Ajaccio, while a second device was defused before it could go off. After the six men were taken into custody, the Interior Ministry said police had "identified the group of commandos which is very probably responsible for the (latest two) attacks". "Handguns, ammunition, bullet-proof vests, hoods, scanners and detonator fuses identical to those used in previous attacks were found in searches in the homes of those held," the ministry said in a statement. Interior Minister Jean-Louis Debre, under fire for holding secret talks with one of the largest of several rival underground nationalist groups, told the daily La Corse this week he had given "firm orders" to police to round up those responsible for the bombings and bring them to justice. Judges on the island had accused Paris of taking a lax stance on guerrilla violence while conducting secret but widely-reported talks with separatists, which have now failed. Wednesday's attacks, on the heels of the new orders, had brought charges that police were powerless. The prolonged low-level separatist-inspired violence, directed mainly against government targets, has this year badly damaged tourism, the island's main industry. 6402 !GCAT Here are the highlights of stories in the Danish press on Friday. Reuters has not verified these stories and does not vouch for their accuracy. BERLINGSKE TIDENDE --- More and more Danish companies are setting up abroad. Recently several motor and electronics producers have moved production partly or wholly to foreign locations with more set to follow if Danish domestic competitiveness does not improve. POLITIKEN --- The fight for Danish television viewers has been intensified with one of Denmark's two state channels, TV2, announcing plans to open a new satellite channel. The country's main state public service station DRTV 1 is to launch a new DR2 channel tonight. --- For the first time Scandinavian Airlines system (SAS) has admitted that new competitor British discount airline Virgin Express is a serious threat, forcing it to cut APEX ticket prices on its Copenhagen-Brussels route to compete with Virgin flights on the same stretch due to start in September. JYLLANDS POSTEN --- Fire caused the death of 67 people in the first six months of 1996, according to Danish Fire Department statistics. The number of victims is the second highest in 30 years only exceeded in 1973 when 35 people died in a hotel fire. BORSEN --- Troubled Danish cleaning group ISS is ready to acquire new companies again, but will wait until it has sold off its US subsidiary ISS Inc following a crisis over major financial irregularities. The firm announced plans to divest its U.S. unit earlier this week. 6403 !GCAT !GDIP !GVIO The U.N. Security Council on Friday is expected to tell Burundi's coup leaders to initiate negotiations towards a political settlement immediately or face possible sanctions in November. A resolution before the council, first proposed by Chile, demands unconditional negotiations to include all of Burundi's political factions and parties "without exception." If such talks have not begun by October 31, the council will consider imposing an arms embargo or applying selective unspecified measures against "leaders of the regime and all factions who continue to encourage violence and obstruct a peaceful resolution of the political crisis in Burundi." Should a political settlement be achieved, the document asks Secretary-General Boutros Boutros-Ghali to call a conference that would raise funds for reconstruction and development for Burundi where more than 150,000 people have died in fighting over the past three years. The Tutsi-run army on July 25 overthrew the country's elected Hutu president Sylvestre Ntibantunganya and installed Major Pierre Buyoya as president, dissolved parliament and banned political parties. The new rulers say they seized power to prevent genocide in Burundi between between minority Tutsis and ethnic Hutus, who make up around 85 percent of the population. The resolution also supports efforts by African nations, some of whom have imposed economic sanctions on Burundi, a landlocked central African country of 5.6 million people teeming with refugees. But it does not specifically mention the sanctions. Nevertheless, the document was watered down in council negotiations. Chile's original draft, which was supported by developing nations. called for an immediate arms embargo and a threat of further targeted sanctions if the negotiations did not make substantial progress. Diplomats said the council, which so far has criticised but not taken any action in response to the July 25 coup, aimed to support pressure put on Burundi by its African neighbours and then threaten to apply its own measures if that did not succeed. The resolution "condemns the overthrow of the legitimate government and constitutional order in Burundi and condemns also all those parties and factions which resort to force and violence to advance their political objectives." It also demands a restoration of the national assembly and a lifting of the ban on political parties. 6404 !E41 !E411 !ECAT !GCAT !GJOB French unemployment fell by 20,000 people or 0.7 percent in July, the labour ministry said on Friday. The number of unemployed totalled 3,045,600, leaving the jobless rate unchanged at 12.5 percent -- an all-time high reached in March 1994 and matched in June this year. France also released trade figures which showed a surplus in June of 9.75 billion francs ($1.93 billion), down from a revised 11.24 billion surplus for May. The unemployment figures, showing the first decline since April, gave some relief to a government struggling to maintain weak growth while cutting public spending in the face of union opposition. Justice Minister Jacques Toubon said on French radio the unemployment figures had brought "satisfaction" while Labour Minister Jacques Barrot said unemployment was stabilising. Conservative Prime Minister Alain Juppe told his cabinet on Wednesday that the government had missed its unemployment targets and he expected "the situation to remain difficult in the coming months". Stubbornly high unemployment is making it hard for Juppe to push through an austerity budget for 1997 and implement social security reforms aimed at cutting the public deficit and meeting tough criteria for joining a single European currency in 1999. Teacher unions have said they want a national strike in September to protest against feared job cuts of around 3,000 as part of next year's planned reductions in civil service posts. Force Ouvriere union boss Marc Blondel was on Thursday the latest labour leader to predict a tough autumn for the government but, along with Louis Viannet, head of the Communist-led CGT union, stopped short of calling for strikes. ($1=5.062 French Franc) 6405 !GCAT The following are some of the leading stories in Finnish papers this morning. HELSINGIN SANOMAT - Most Finnish EU parliament candidates say Prime Minister should represent Finland in EU top summits, HS survey shows. - Baltic area cooperation is not a tournament between Sweden and Finland, we now have to work constructively together, Ole Norrback said of the dispute between the two. - The eighth Night of Arts filled Helsinki centre with thousands of people and art performances under a full-moon. - Environment Ministry wants to increase re-use of construction waste. Says Finnish builders at present clearly behind other EU-countries in re-using the waste. - World class pianist Olli Mustonen to give two concerts in Helsinki tonight after boycotting the capital for six years. - Two Swedish journalists advised Finns to rent Crown Princess Victoria for five years. Say billion markka a year would be a proper price -- for that, Finns could keep Swedish coach of Finnish ice-hockey team Kurt Lindstrom as well. KAUPPALEHTI - Asko Furniture to open four stores in eastern neighbouring countries as Swedish furniture giant Ikea heads for Finland, increasing competition. - Building sector operators in campaign against the black market. - Turku residents will soon be able to use the Internet to change their tax cards. HUFVUDSTADSBLADET - Farmer who in 1969 shot dead four police, but was released from prison in 1982 by the president, arrested on suspicion of strangling his ex-wife. - Small girls should eat rye bread to avoid breast cancer later, professor Herman Adlercreutz said. AAMULEHTI - Only five traditional Finnish weeping women left in Finland, but interest in their art increases. Martta Kuikka from north Carelia has wept in Japanese films. TURUN SANOMAT - No reason to despise people heading to southern beaches for holiday -- a trip frees people from daily routines and builds valuable mental capital, researcher says. - Southern coast town of Tammisaari went wild on Swedish royals' visit -- schools were closed and many left work. -- Helsinki Newsroom +358 - 0 - 680 50 292 6406 !GCAT The following are the main stories from Friday morning's German newspapers: FRANKFURTER ALLGEMEINE ZEITUNG - The Bonn ruling coalition asserts itself once again and sends the government austerity programme to the Bundesrat upper house of parliament for approval for a second time. - Construction firms want to cancel existing wage contracts. - Entrepreneurs complain about restrictions on training. If these were removed there could be an increase of 25 to 30 percent of training places. - Confidence grows in the German automobile industry. HANDELSBLATT - Daimler-Benz is once again in profit. DASA the firm's airspace unit is big lossmaker. The shareholders of the biggest German industrial firm Daimler-Benz can hope for a dividend increase. - Deficit of upto 12 billion marks at the Federal Labour Office. - German Bundestag lower house of parliament approves Chancellor Helmtu Kohl's austerity programme. - German DGB trade union federation is divided over a new programme. The programme advocating a social market economy looked unlikely to win majority support at the DBG annual congress in November in Dresden. - German Foreign Minister Klaus Kinkel was confident that a meeting with his Chinese counterpart Qian Qichen in September would iron out any differences or tensions with China. - Bonn fears financial pressure from Tehran. - Suspicions against BDI German industry federation president Hans-Olaf Henkel not backed up. - OSCE says may organise local Bosnian elections in November. - French President Jacques Chirac to visit Bonn on Sunday for dinner and talks with Chancellor Helmut Kohl. SUEDDEUTSCHE ZEITUNG - Strike threat on east German construction sites if employers go ahead with plans to cancel an existing wage contract. - Professional soldiers must secure peace everywhere - Finance Miniser Theo Waigel does not rule out higher public debt. - The Post will be ready for the stock exchange by the end of the year. - Banks reject accusations of complicity in fraud. - BDI German industry federation chief Hans-Olaf Henkel defends himself by filing a suit for defamation. DIE WELT - Labour Minister Norbert Bluem urges "courage in decisions". Bundestag produces majority for social political part of Chancellor Helmut Kohl's austerity programme. - Illegal immigration in Germany on increase. - Werner Muench and Werner Schreiber, two regional officials from Chancellor Helmut Kohl's Christian Democrats in east Germany, charged with fraud plead innocence. - Better outlook for auto industry. -- Bonn Newsroom +49 228 2609760 6407 !GCAT The following are the main stories from Friday morning's Austrian newspapers. DER STANDARD - U.S. drugs group Baxter to take over Austria's Immuno International AG for 7.4 billion schillings. Baxter says it will buy all of Immuno's outstanding stock over a period of three years. - A consortium of bidders for Creditanstalt say they are about to agree on an offer for the government's 70 percent stake in the bank. The plan foresees a holding structure for Creditanstalt and could be presented next week. - Fibre maker Lenzing AG presents pre-tax losses of 84.5 million schillings for the first half of the year, compared to a profit of 160 million last year. Lenzing expects more losses in the second half. KURIER - Just 38 percent of Austrians would vote for membership in the European Union if a new referendum would be called now, a study said. Austria joined the EU last year after 67 percent of Austrians voted for membership in a referendum in June 1994. DIE PRESSE - Spending cuts and an upturn in the economy will help keep the federal government's deficit to the planned 90 billion schillings this year, WIFO research institute said. - Austria's inflation rate is at its lowest level since 1987, WIFO says. - Finance Minister Viktor Klima said he aimed to reduce the level of Austria's outstanding debt to around 60 percent of gross domestic product, from currently about 75 percent, to help Austria qualify for Europe's single currency. - Ericsson Austria said it had more than doubled its pre-tax profit to 210.9 million schillings last year, from 101.6 million a year before. WIRTSCHAFTSBLATT - Vogel & Noot Holding AG says it turned to a pre-tax loss of 44.9 million schillings in the first half, from a profit of 33 million schilings in the same period last year, citing growing competition and restructuring efforts. 6408 !GCAT These are leading stories in this morning's Paris newspapers. LES ECHOS -- Cattle breeders start autumn social unrest. -- Labour Minister Jacques Barrot wants to give jobseekers more help in finding a job. LA TRIBUNE DESFOSSES -- Private wage earners' pension fund under attack. -- Axa sells 9.7 percent stake in Scor, market sources tell the newspaper. It says Axa declined comment. LE FIGARO -- Chirac to receive delegation of irate cattle breeders today. -- Chirac reaffirms commitment to single European currency. LE FIGARO-ECONOMIE -- Credit Foncier to post surprise first half profit of 400 million francs. -- AOM airline expects 160 million franc year-end loss. LIBERATION -- Breeders drive cattle to Paris to protest lack of government support. -- One-third of French children born out of wedlock. LIBERATION (Economic section) -- July unemployment rate dips. THE INTERNATIONAL HERALD TRIBUNE -- French cattle breeders search about 2,000 trucks for illegal beef imports but find none. -- U.S. property investors descend on Paris to profit from about $2 billion of bad mortgage loans and property development projects. -- Paris Newsroom +33 1 4221 5381 6409 !GCAT !GCRIM A senior police detective is due to be formally charged on Friday in connection with Belgium's paedophile abduction, porn and death scandal as police with dogs and radar equipment resume their hunt for bodies. Georges Zicot, a chief police detective in the southern city of Charleroi, was arrested on Sunday. He faces charges of car theft, insurance fraud and forgery. Three other people also face charges in connection with the car theft ring uncovered by police investigating a paedophile sex gang allegedly led by convicted child rapist Marc Dutroux. Dutroux has been linked to organised vehicle theft and police are investigating the child sex and theft ring together. At the same time the Belgian cabinet in its first meeting since the summer break is to adopt tougher rules on the early release from prison of convicted sex offenders. Belgium has been in shock since Dutroux led police on August 17 to the bodies of eight-year-olds Melissa Russo and Julie Lejeune in the garden of a house he owns at Sars-La-Buissiere. Dutroux was released 10 years early in 1992 after serving only three years of a 13-year sentence for raping five children. Police have been digging for more bodies since Tuesday in Jumet, a suburb of Charleroi, at one of Dutroux's other five houses in the area. "The dogs will be used in the basements to see if there are any bodies there," Gendarmerie spokesman Major Jean-Marie Boudin told reporters as searches ended on Thursday. In all, 11 sites will be explored. Belgian radio said police would travel to Bratislava and Prague to search for missing Belgian children. Dutroux has been named in Bratislava as a suspect in the murder of a young Slovak woman. Interpol's Slovak office has said he was also believed to have planned the kidnapping of at least one other Slovak woman. A spokesman for the Belgian gendarmerie's special disappearances squad said they were likely to contact colleagues in Austria investigating what seemed to be a "child-for-hire" network spread across central Europe. Searches for bodies and clues in Belgium have focused on teenagers An Marchal and Eefje Lambrecks, who Dutroux, 39, has admitted kidnapping a year ago. Their fate remains unknown. Dutroux's accomplice Bernard Weinstein, who he admitted killing, was found next to Julie and Melissa. Two other girls, Laetitia Delhez, 14, and Sabine Dardenne, 12, were rescued on August 15 from a dungeon in another of Dutroux's houses. Dutroux has said Julie and Melissa, who were abducted in June 1995, starved to death early this year while he was in jail for car theft. Originally Dutroux told police he had murdered Weinstein for letting the girls die. But he then charged his story to having killed him after falling out over car thefts. Belgian newspapers, citing well informed sources, reported on Friday that Dutroux' second wife Michelle Martin -- also under arrest -- had admitted that it was she who had failed to feed the children out of fear of facing them in their cell. In their investigations police have so far seized up to 400 videos -- some featuring Dutroux -- children's clothing, magazines and a gun. Ten people have so far been arrested including Martin who has been charged as an accomplice. Dutroux, a father of three, and associate Michel Lelievre are charged with abduction and illegal imprisonment. The affair has grabbed world headlines and prompted wider debate on trade in children, prostitution, paedophilia, and the role of the Internet computer network in spreading the sickness. Belgian media reported on Thursday an unemployed man had been arrested in Flanders for trying to sell 3,000 pornographic photographs via the Internet -- one third were of children. 6410 !GCAT Following are some of the main stories in Dutch newspapers today. Reuters has not verified these stories and does not vouch for their accuracy. - FINANCIEELE DAGBLAD - Dutch economic growth accelerates in 1996 Q2. (p1) - Truck maker DAF tones down profit forecast despite good first 24 weeks result. (p1) - Trading house Hagemeyer's profits explosion does not please investors. (p1) - Amsterdams Options Traders (AOT) general director Jos Dreessens to step down and take board seat. (p1) - Department store chain KBB's first half net drops to Dfl 2.5 million from Dfl 12.7 year ago. (p3) - Transporter Frans Maas net up to Dfl 13.9 million in first six months of 1996. (p3) - Bio-technology firm Gist-Brocades first half net up 8.2 pct at Dfl 69.7 million, pressured by interest burden. (p5) - Optical and medical equipment maker Delft Instruments doubles H1 net to Dfl 3.1 million due to low interest burden. (p5) - DE VOLKSKRANT - Staff of Robeco investment group get five million guilders from the sale of the group to Rabobank. (p2) - Publisher Wegener-Arcade merges advertisement sales units of Wegener and Arcade. (p2) - Cabinet seeks end to insurance agents' commissions. (p2) - Belgian-Dutch bank-insurer Fortis books 21 pct higher net in 1996 first six months at Dfl 780 million. (p15) DE TELEGRAAF - Traffic minister furious at Parliament's wish for licence system for filling stations on trunk roads. (p1) - Public prosecutor in BolsWessanen insider trading case suspects another 10-15 persons. (p23) - Entrepreneur Joost Ritman starts legal action against ING Bank to buy back disposable plant De Ster. (p23) - Temp agency Randstad reaches agreement with unions and works councils on European works council. (p25) - ALGEMEEN DAGBLAD - Het Parool newspaper chief editor steps down over difference of opinion about publisher PCM's rescue plans. (p1) - TROUW - Technical wholesaler Otra's H1 net drops to Dfl 3.7 million due to restructuring of British and German units. (p20) - Chemicals group DSM takes majority stake in Spain's antibiotic components maker Deretil. (p20) -- Amsterdam Newsdesk +31-20-504-5000 (FAX 31-20-504-5040) 6411 !E41 !ECAT !GCAT !GJOB The number of French unemployed in July fell by 20,000, Justice Minister Jacques Toubon said on Friday. Toubon, speaking on RTL radio said: "I note this morning with satisfaction that the unemployment index for July fell by 20,000." Men under 25 277,800 -1.2 pct +7.8 pct Women under 25 323,800 -1.2 pct +2.8 pct Men between 25 and 49 1,017,800 -0.4 pct +5.8 pct Women between 25 and 49 1,056,900 -0.7 pct +2.1 pct Men 50 and over 210,800 -0.6 pct +6.7 pct Women 50 and over 158,500 +0.3 pct +8.9 pct Forced redundancy 28,500 -1.7 pct +4.8 pct Jobless for over 12 mos 1,017,700 -0.4 pct -4.0 pct -- Paris Newsroom +331 4221 5452 6412 !GCAT Following are the highlights of stories reported in the Irish press on Friday. IRISH TIMES - - The Irish minister for Justice, Nora Owen is expected to reject the Law Reform Commission's proposal to abolish mandatory life sentences for murder. - Irish retailing group Arnotts could increase its profits to 7.0 million Irish pounds by end-year, following better than expected half-year results on Thursday. - Irish print and packaging firm Clondalkin became the first Irish company to be censured by the Irish Stock Exchange on Thursday because of insufficient information issued about an acquisition. IRISH INDEPENDENT - - In Northern Ireland, the protestant loyalist threat to kill renegade Ulster Volunteers Force member Billy Wright placed a new problem in the path of the faltering peace process. - Former Irish foreign affairs minister Gerry Collins said on Thursday he would not be contesting the next general election. - Irish property shell company CountyGlen, whose stock market quotation comes under review shortly, is close to announcing the purchase of Manchester-based engineering group, Thomas Storey. - First National Building Society became the first mutual society to increase interest rates, as one Irish economist warned that the current rates rise may not be the last. - Irish Ferries, the operating company of Irish shipping group Irish Continental, is to switch its daily Rosslare/France route to a single vessel service because of falling passenger numbers. --Dublin Newsroom +353 1 676 9779 6413 !E41 !ECAT !GCAT !GJOB The seasonally adjusted number of people unemployed in France in July fell by 20,000, or 0.7 percent, from June to 3,045,600, Labour Ministry data showed. The jobless rate, based on International Labour Organisation (ILO) criteria, which exclude jobseekers who did any work, was unchanged at 12.5 percent, in line with economists' forecasts. The ministry gave the following seasonally adjusted data: end-July month-on-month year-on-year Jobless rate (ILO) 12.5 pct +0.0 pctge pt +0.9 pctge pt Unemployment 3,054,600 -0.7 pct +4.5 pct Unemployment (ILO) 3,202,000 +0.4 pct +8.9 pct Jobs offered 190,300 -2.0 pct +11.2 pct New jobless registrations 377,200 -3.6 pct +6.7 pct Jobless register exits 368,800 +6.9 pct +5.5 pct 6414 !GCAT The following are some of the top headlines in leading Italian newspapers. ---------- TOP POLITICAL STORIES * Five people, including a mafia turncoat, were detained on Thursday in connection with the shooting of a young widow and a 14 year-old boy in a Scilian cemetery. (All) ---------- TOP BUSINESS STORIES * Prime minister Romano Prodi outlines the government's programme for the autumn. Plans include sticking to the Maastricht treaty deadlines, lower telephone bills and health care reform. (All) * Prodi also said on Thursday the forthcoming privatisation of state telecoms company STET could be approved in parliament with the help from some opposition parties. (All) ----------- Reuters has not verified these stories and can not vouch for their accuracy. -- Rome bureau +396 6782501 6415 !E41 !ECAT !GCAT !GJOB French unemployment fell in July, Labour and Social Affairs Minister Jacques Barrot said on Friday. "There was a fall in unemployment. You will see," Barrot told Europe 1 radio. But he declined to give a figure ahead of the official release of the unemployment figures at 0645 GMT. Earlier, Liberation newspaper reported that unemployment fell slightly in July. -- Paris newsroom +331 4221 5452 6416 !E41 !ECAT !GCAT !GJOB French unemployment fell slightly in July, the Liberation daily reported on Friday. The newspaper's report, quoting reliable sources, did not give a figure. July unemployment is due to be released at 0645 GMT. In June, seasonally adjusted unemployment rose by 22,800 people, or 0.7 percent, to 3,065,000 from 3,042,800 in May, the Labour Ministry said last month. -- Paris newsroom +331 4221 5452 6417 !GCAT !GDIP In an effort to cut down on its mountain of paperwork, the U.N. Security Council tried to trim its agenda and immediately ran into a barrage of criticism from members states, particularly Pakistan for removing the dispute on Kashmir. Some of the 50 issues that the council took off its list in July had been on the agenda for decades, such as preparations for a 1978 Middle East conference and 1947 arrangements for troops contributors. But on Thursday, the council decided that any country that wanted an issue back on the agenda could do so. Earlier it wanted to delete items that had not been discussed in the past five years. Among the half a dozen or so issues diplomats said would be included again were Kashmir and Indonesia's occupation of East Timor, which Portugal had requested and is now handled in other forums. Some of the items concerning the Middle East were also put back on the list after protests from Arab countries. An issue can go before the council, whether or not it is on the long agenda submitted regularly to members by the U.N. secretariat. But removing Kashmir took on a particular political significance and Pakistani officials protested several times. Prime Minister Benazir Bhutto wrote to all 15 members of the Security Council earlier this month saying the move to drop Kashmir from the agenda had "serious political and legal implications." Despite three wars and a the current insurgency in Indian-controlled Kashmir, the dispute has remained unsolved for decades. A plebiscite proposed by the United Nations in 1949 has not been held and India has declared Kashmir an integral part of its territory. A U.N. Military Observer Group in India and Pakistan, known as UNMOGIP has been stationed in the region since January 1949. It has 44 observers this year. Germany's ambassador Tono Eitel, the current Security Council president, said the council's earlier decisions to trim the list was made "without any bad intentions." 6418 !GCAT !GDIP !GPOL Security Council members expressed concern on Thursday that Israel's bulldozing of a Palestinian day-care centre for the disabled might further injure the Middle East peace process. Responding to a letter from the the Palestinian U.N. observer mission, Security Council President Tono Eitel of Germany said that members asked him to convey their views to Israel's charge d'affaires, David Peleg. "The members expressed their concern about the maintenance of the peace process and they urged that no action be taken that would have a negative impact on the negotiations," Eitel said after an informal council session. "They asked me to call in the Israeli charge d'affaires and discuss the matter with him," he added. The Palestinian letter from Marwan Jilani said the destruction of the Jerusalem centre was an effort by Israel to "alter the character, demographic composition and status of the Holy City of Jerusalem" and violated agreements between Israel and the Palestinian Liberation Organisation. "This most recent measure represents a revival of old, malicious plans to confiscate the land and build units for Israeli settlers within the walls of the Old City." "We expect the international community to take a clear and firm position, based on international law and in accordance with U.N. resolutions, against all such Israeli violations and illegal practices," he said. On Tuesday, Israeli crews hoisted a bulldozer over the walls of Jerusalem's old city and demolished the centre, saying it was being restored without a building permit. Canada had recently donated $30 million to the centre, called the Burj al-Laqlaq Society. 6419 !GCAT !GCRIM In front of the central station in Luxembourg -- the richest country in the world -- a white van called the Camionette supplies clean syringes in a bid to help the tiny country's heroin addicts avoid AIDS. The van might seem a blot on the green and picturesque landscape in the sleepy Grand Duchy, known for its banks rather than drugs, and a far cry from the Amsterdam world of coffee shops where young people smoke cannabis while the law looks the other way. But with the highest proportion of hard drugs users in the European Union, Luxembourg is rethinking a policy based on repression and becoming an unexpected ally of the Dutch in its attitude to liberalising cannabis with the aim of no hard drugs. Luxembourg's parliament, confounding expectations, has adopted a motion urging the government to open talks with Belgium and the Netherlands on a three-nation Benelux zone where cannabis can be smoked freely. "There's no timetable but it's a clear signal to the government in that direction," said Renee Wagener, the Luxembourg Green member of parliament who initiated the move. In the liberal Netherlands, where coffee shops are allowed to sell small amounts of cannabis, only 1.7 people per thousand are addicted to heroin, according to figures published by the Dutch government. In Luxembourg, where the police clamp down on possession of hard and soft drugs alike and drugs-related projects like the Camionette are still, on paper, illegal, the figures show five people per thousand are heroin addicts. A report by a Luxembourg parliamentary commission showed 72 percent of the addicts take another drug like the new generation ecstasy, available in all Luxembourg nightclubs, or crack. The number of overdose deaths has climbed steadily since 1985. Tom Schlechter, who operates the Camionette which visits the railway station five times a day, said about 30 people came each time and between 50 and 70 syringes changed hands, along with coffee and conversation. He said that although in theory damage prevention projects such as his were still illegal, they were tolerated by the authorities on public health grounds and addicts were becoming less shy about coming forward. Wagener said the policy of repression had backfired as prison sentences tended to teach addicts how to get drugs and criticised Luxembourg for not finding money to rehabilitate people who have just done time. "I find it paradoxical that in the richest country in the world we cannot find the money to house these people," she said. Good-living Luxembourg has the highest revenue per inhabitant in the world and low unemployment at three percent. "It's clear that these people are unstable and the first thing they will do (on leaving prison) is to find a hotel in the Place de la Gare where they sell drugs. They will meet their old friends and it's there that it starts again," she said. Although the government has yet to decide formally whether to approach its Benelux partners over the plan, Justice Minister Marc Fischbach surprised even Wagener herself when he declared his support ahead of the vote. Justice Ministry Counsellor Guy Schleder said that a lot would depend on the attitude of Belgium. Belgian Interior Minister Johan Vande Lanotte has often spoken out against a liberalisation of drugs. A Belgian parliamentary committee is currently examining all the options, from maintaining a current legal ban on all possession, sale and use of drugs to a Dutch-style system. But an Interior Ministry spokesman said Belgium's decision would be coloured by its neighbours' attitudes, and those neighbours include not only the Netherlands and Luxembourg, but also France, the biggest critic of The Hague. Because of the Dutch policy France has prevented the Schengen border-free pact between seven nations from working fully by refusing to open its borders to Belgium and Luxembourg on the grounds that they are transit points for the Dutch drugs. Luxembourgers say the approach is hypocritical, as drugs come into the landlocked country not only from Amsterdam, but also the south of France and the German city of Frankfurt. "You have to be more subtle. Drugs do come from Amsterdam, but they also come from the south of France," said Schleder. "I think it's hypocrytical because they do not block the frontier with Morocco and they get the most cannabis from Morocco," said Wagener. 6420 !GCAT !GCRIM !GPOL Spain awakens from its August doldrums next week with all eyes on Felipe Gonzalez, despite another absence abroad as courts probe the murkier side of his 13 years in power. The charismatic Socialist leader, who came to embody Spain's final metamorphosis from Franco dictatorship to democracy, has been in opposition since early elections forced on him by mounting scandals cost him the prime minister's job in March. Until now, and despite a much slimmer defeat than forecast at the hands of conservative Jose Maria Aznar, he has had little opportunity and apparently less inclination to flex his muscles. Aznar's Popular Party fell short of an outright majority in March and spent two months negotiating for support from smaller regional parties before managing to form a government in May. Despite time pressures for the new government to devise a 1997 budget that can meet the European Union's strict single-currency targets, business ground to a halt almost as soon as it had begun as the traditional summer lull set in. The summer has now come and gone but the scandals rage on, fuelling critics' doubts as to whether Gonzalez, whose March defeat had at first appeared almost sweet, can really conduct any serious opposition work under this shadow. "It's very simple," wrote the daily El Mundo this month. "Gonzalez isn't performing as an opponent because...he can't." New Socialist corruption scandals continued to come to light after the election and Gonzalez left on a long South American holiday that removed him from the storm of a top Civil Guard general's arrest over a 1980s "dirty war" on Basque rebels. Impervious to criticism from within his own ranks for this absence and shrugging off calls for a party reshuffle, Felipe -- as Spaniards call him -- was then off on holiday in Majorca. Tight-lipped on the few occasions he was visible to the press there, he declined repeatedly to pass judgment on Aznar's early days in power. He will once again be elsewhere next Thursday (Sept 5), when the Supreme Court is expected to decide whether it wants to question him about the "dirty war" against ETA guerrillas -- a campaign of bombings, kidnappings, torture and murder that killed 27 people between 1983 and 1987. Gonzalez will be half a world away in South America, attending conferences in Uruguay and Chile before flying to New York for a meeting of the Socialist International. His return around September 15, by which time 1997 budget negotiations will be in full swing, should provide the first real test of the style of opposition he has in mind. Gonzalez, who is still only 54, has told associates and his former allies in Catalonia, who have switched their support to Aznar, that he thinks his conservative successor will call new elections as soon as he can -- maybe in 1998 -- in a bid to capture a majority and break his dependence on regional parties. He has also been meeting his erstwhile foes in the Communist-led United Left (IU) in search of common ground to form a joint front of opposition against Aznar. IU and the Socialists share a stated fear of seeing the conservatives dismantle the welfare state built up by Gonzalez. But they are at odds on key issues, from the "dirty war" against ETA (Basque Homeland and Freedom) to the desirability of Spain joining a single currency or NATO's military structure. On all three points, Gonzalez and Aznar are close enough to make it difficult to tell their positions apart. The Socialists have applauded Aznar's decision to snub the courts and turn down their requests for declassification of military intelligence files on the anti-ETA drive -- a move which, according to opinion polls, has convinced most Spaniards that a secret Aznar-Gonzalez pact is at work. On the economic front, Gonzalez's enthusiasm for Spain's participation in the first wave into Economic and Monetary Union (EMU) is at least on a par with that of Aznar. Any arguments over the 1997 budget are expected to focus on where spending cuts should take place, rather than on the overall drive to cut the deficit. And as for NATO, the Socialists have completed their about-turn on an alliance they once decried as an instrument of U.S. domination in Europe: Gonzalez's former foreign minister Javier Solana is now the organisation's secretary-general. Hobbled by court investigations into the corruption scandals and the "dirty war" and unable to criticise Aznar on basic issues of substance, Gonzalez may opt to seek the leadership of Europe's socialist parties if discontent grows within his own ranks. The Socialist board tried to stamp out talk of his removal in July, but already new calls are emerging, muted only by the realisation that Gonzalez is his party's best electoral asset. "It would be extremely healthy to debate the possibility of substituting someone else for Felipe Gonzalez as party secretary-general," Matilde Fernandez, a former minister and current member of the party executive, said this month. He is, she added, better placed "as a statesman and as a candidate to head the government than as a man who devotes his time to internal party work." 6421 !GCAT !GSPO A late goal by newly-signed defender Roberto Carlos saved the blushes of Real Madrid coach Fabio Capello and his multi-billion peseta line-up in the opening game of the Spanish championship on Saturday. The Brazilian's 79th-minute effort was enough to earn Real a point from a scrappy 1-1 draw at fellow title contenders Deportivo Coruna. Deportivo started strongly, taking the lead midway through the first half when former Auxerre playmaker Corentine Martins headed home a corner after a flick-on by Brazilian-born Spanish international midfielder Donato. Real looked to be in deep trouble shortly after the break when Luis Milla was sent off for committing two bookable offences in as many minutes. But Deportivo were unable to capitalise on their numerical advantage, and were themselves reduced to ten men when Armando Alvarez was sent off 15 minutes from time. Shortly afterwards Roberto Carlos found space in the home defence and equalised for Real with a shot that was deflected past despairing Deportivo 'keeper Jacques Songo'o. In a frantic final five minutes there were chances at both ends, and Donato, who had earlier been booked, was sent off for protesting about the incursion of Real players at a free kick. Before the match Deportivo chairman Augusto Lendoiro said he would ignore a FIFA decision banning Brazilian midfielder Mauro Silva from playing in the match for failing to join his national side's tour of Europe. In the event, coach John Toshack decided not to use Silva, who had claimed he did not join the Brazil squad because he had lost his passport. 6422 !GCAT !GSPO Result of English rugby league premiership semifinal played on Saturday: Wigan 42 Bradford Bulls 36 6423 !GCAT !GSPO Result of European under-21 championship group 5 qualifier on Saturday: Israel 2, Bulgaria 0 (halftime 0-0) Scorers: Haim Hajaj (47th), Nir Sivilia (57th). Attendance: 2,000. 6424 !GCAT !GSPO Marion Clignet capped a record-breaking day in the women's 3,000 metres in pursuit qualifying at the world track cycling championships on Saturday when the old mark was beaten four times in quick succession. The Frenchwoman set the new world record time of three minutes 30.974 seconds in qualifying for the semifinals. Lucy Tyler-Sharman of Australia started the sequence as she clocked 3:31.830 to better the old mark of 3:31.924 set by Italy's Antonella Bellutti in Cali, Colombia in April. Clignet improved the time to 3:31.674 but she had an even briefer reign as Bellutti, next on the track, reduced the mark to 3:31.526. But then Clignet returned in the final session to snatch back the world record. 6425 !GCAT !GSPO The Republic of Ireland's new-look side dispelled painful memories of their last visit to Liechtenstein by beating the Alpine part-timers 5-0 in a World Cup qualifier on Saturday. The Irish, under new manager Mick McCarthy, took a 4-0 lead within 20 minutes through captain Andy Townsend, 20-year-old Norwich striker Keith O'Neill, Sunderland forward Niall Quinn and teenager Ian Harte. Quinn added his second and Ireland's fifth just after the hour to complete the rout and give the Irish their biggest-ever away win. The result helped erase memories of Ireland's visit to the Eschen stadium 14 months ago, when Jack Charlton's side were held to a frustrating 0-0 draw which ultimately cost them a place in the European championship finals. 6426 !GCAT !GSPO The Republic of Ireland beat Liechtenstein 5-0 (halftime 4-0) in a World Cup soccer European group 8 qualifier on Saturday. Scorers: Andy Townsend (5th), Keith O'Neill (7th), Niall Quinn (11th, 61st), Ian Harte (19th). Attendance: 3,900 6427 !GCAT !GSPO Leading scores after the final round of the British Masters golf tournament on Saturday (British unless stated): 284 Robert Allenby (Australia) 69 71 71 73, Miguel Angel Martin (Spain) 75 70 71 68 (Allenby won at first play-off hole) 285 Costantino Rocca (Italy) 71 73 72 69 286 Miguel Angel Jimenez (Spain) 74 72 73 67 287 Ian Woosnam 70 76 71 70 288 Jose Coceres (Argentina) 69 78 71 70 289 Joakim Haeggman (Sweden) 71 77 70 71, Antoine Lebouc (France) 74 73 70 72 290 Colin Montgomerie 68 76 77 69, Robert Coles 74 76 71 69, Philip Walton (Ireland) 71 74 74 71, Peter Mitchell 74 71 74 71, Klas Eriksson (Sweden) 71 75 72 72, Pedro Linhart (Spain) 72 73 67 78 291 Phillip Price 72 76 74 69, Adam Hunter 70 79 73 69, Peter O'Malley (Australia) 71 73 75 72, Mark Roe 69 71 78 73, Mike Clayton (Australia) 69 76 73 73 292 Iain Pyman 71 75 75 71, David Gilford 69 74 77 72, Peter Hedblom (Sweden) 70 75 75 72, Stephen McAllister 73 76 69 74. 6428 !GCAT !GSPO Australian Robert Allenby almost threw away the British Masters on Saturday when he dropped four shots in six holes before clinching the title in a play-off against Spaniard Miguel Angel Martin. Allenby was four shots clear with eight holes to play but then had four bogeys in his next six holes for a closing 73 which allowed the Spaniard to catch him with a 68 that included a 25-yard holed bunker shot for an eagle at the ninth. They tied on a four-under-par total of 284 and then, in a somewhat fitting finale to a tournament in which everyone complained about the condition of the greens, Martin ran up a double-bogey seven to lose at the first sudden-death hole. Just off the green at the 508-yard 18th in three, he chipped 30 feet past, putted three feet past and, after missing his next shot, conceded defeat with Allenby two feet away in four. It allowed the 25-year-old from Melbourne to grab his third victory of the season which took him into third place in the European Order of Merit behind Ian Woosnam and Colin Montgomerie, who finished fifth and ninth respectively. "I just hung in there at the end and got pretty lucky," said Allenby, winner in June of the English and French Opens. "After nine holes, things were looking good. But anything can happen on this course, as we all saw." Woosnam needed an eagle at the par-five last to be in the play-off, was on the green in two but then putted right off it and took six to drop to fifth place. "I don't want to say anything because, if I do, I may say something bad. I've had enough," said the Welshman. The tournament will be remembered, though, not so much for Allenby's victory as for the dire state of the greens at the European tour-owned Northampton course. Ryder Cup captain Seve Ballesteros adding his influential voice to the massive criticism of the course for the event, the first qualifying tournament for next year's Ryder Cup. The Spaniard, who finished in 57th place, said: "If we play in these conditions I don't really think I will have the right team for the Ryder Cup. "I am willing to call for a meeting but need everyone's support. We can't continue like this -- if we do, we will lose players and sponsors." Ballesteros added: "Players are getting fed up with the situation and are going where there are better facilities and courses. "We will end up with 54 tournaments every year, but very cheap ones. It's not right. As I have said in the past many times, I want quality not quantity." 6429 !GCAT !GSPO A fine century from opener Nick Knight and an impressive bowling debut from Adam Hollioake helped England thrash Pakistan by 107 runs on Saturday to take an unbeatable 2-0 lead in the one-day series between the sides. Knight, on his home ground at Edgbaston, hit 113 as England built on a fast start to pile up a formidable total of 292 for eight. Pakistan lost two wickets early in their reply and were bowled out for 185 in the 38th over, Surrey all-rounder Hollioake taking four for 23 on his first international appearance. The final match of the series takes place at Trent Bridge on Sunday, but England have already gained some consolation for their emphatic 2-0 test series defeat against Wasim Akram's side. England's much-changed side, picked specifically with one-day cricket in mind, played with a confidence which contrasted totally with their demeanour after their third test collapse at the Oval last Monday. Knight and Alec Stewart set the tone with a superb century opening stand inside 13 overs despite the tourists' formidable new-ball attack comprising Wasim and Waqar Younis. A straight driven six from Stewart against off-spinner Saqlain Mushtaq ensured the second 50 took only 25 deliveries and, although Stewart and Michael Atherton then fell to Mushtaq Ahmed in the space of three balls, Knight kept the momentum going. By the time he was cleverly stumped by Moin Khan off Saqlain, his 113 had occupied only 132 balls and included 11 boundaries, but three run-outs meant England were grateful to all-rounder Ronnie Irani who hit 45 not out. Pakistan's reply was in trouble the moment Aamir Sohail miscued an attempted pull in the first over and Alan Mullally trapped Moin lbw in the next with the total on six. Saeed Anwar hit a sparkling 33 off 25 balls in a 48-run partnership with Ijaz Ahmed in seven overs as Pakistan took advantage of the fielding restrictions. But Anwar attempted one shot too many and became Darren Gough's second victim, caught behind by Stewart's diving catch, before Hollioake brushed aside the lower order. Fittingly, man-of-the-match Knight claimed the final catch as England wrapped up victory with 12.1 overs remaining, giving their captain Atherton something to smile about for a change. "We deserved our victory...we thoroughly outplayed them today," he said. 6430 !GCAT !GSPO Slovakia beat the Faroe Islands 2-1 (halftime 1-0) in their World Cup soccer European group six qualifying match on Saturday. Scorers: Faroe Islands - Jan Allan Mueller (60th minute) Slovakia - Lubomir Moravcik (13th), Peter Dubovsky (88th) Attendance: 1,445. 6431 !GCAT !GSPO England beat Pakistan by 107 runs in the second one-day international at Edgbaston on Saturday to take the series 2-0. Scores: England 292-8 innings closed (N.Knight 113), Pakistan 185 (Ijaz Ahmed 79; A.Hollioake 4-23) 6432 !GCAT !GSPO Italy set a new world record for the 4,000 metres team pursuit in the semifinals of the world championship at Manchester on Saturday. The Italian quartet's time of 4:00.958 beat the old record of 4:03.840, set by Australia in Hamar, Norway two years ago, by 2.882 seconds. With their semifinal opponents Russia heading for defeat, Italy's Adler Capelli, Cristiano Citto, Andrea Collinelli and Mauro Trentino eased off in the closing laps but still achieved the record. Italy, silver medallists in the Olympic team pursuit, face Atlanta gold medallists France in Saturday night's final. The French qualified for the final in 4:05.104 , beating Germany who were awarded the bronze medal as fastest losing semifinalists. 6433 !GCAT !GSPO World champion Michael Doohan, hoping to win the 500th 500cc motorcycling grand prix on Sunday, remained the fastest rider at Imola on Saturday as steady rain dampened final qualifying. The Australian, who could clinch his third consecutive world crown if he wins and closest rival Alex Criville of Spain finishes out of the points, clocked the best lap of one minute 50.250 seconds on a dry track on Friday. "It's only a Friday time, it really doesn't mean a great deal," said Doohan. He will take Honda's winning streak to nine in a row if he triumphs. "I really enjoy the layout, it's really very different to what I suppose you would call a modern-day circuit. It's classical and a little dangerous, especially in the wet." The circuit near Bologna has not hosted a race since 1988 and was redesigned after Formula One world champion Ayrton Senna and Austrian Roland Ratzenberger died during the San Marino Grand Prix meeting in 1994. Doohan said the track would be perfect if it were resurfaced, eradicating the bumps that made qualifying a tricky business on both Friday and Saturday. No other rider managed to improve on Friday's times as local hero Luca Cadalara entertained the bedraggled fans with the day's best of 2:08.643. The bad weather meant France's Jean-Michel Bayle stayed second ahead of Japan's Norifumi Abe and Cadalora. Criville, who crashed heavily on Friday morning and rode with an inflamed wrist in official qualifying later in the day, was on the second row of the grid in fifth place. He said he had injections to control the swelling and applied an ice pack to his wrist every two hours overnight. The Spaniard missed Saturday's morning free practice but went out in the afternoon to make sure he could handle the bike. "We lost time working on the suspension fittings and I was also hoping to try another tyre," he said. "I am looking for a good race but will not be 100 percent fit." Bayle's position continued the former motocross world champion's remarkable improvement -- at least in qualifying -- this season after a tough baptism to the sport. The Frenchman, who was quickest in qualifying two weeks ago in the Czech Republic, moved up to 500cc this season with Kenny Roberts' Yamaha team after a poor spell in 250cc. "We felt that Jean-Michel was wasting his time in 250 racing," said Roberts. "We don't know where he's going and we don't know that he'll be world champion but he's certainly capable of riding a motorcycle. "People say that he's good at qualifying. Well, this is his first year on a 500 and he's out-qualified a lot of people that are veterans," added the former 500cc champion. 6434 !GCAT !GSPO Leading results of the 205-km sixth and final stage of the Tour of the Netherlands between Roermond and Landgraaf on Saturday: 1. Olaf Ludwig (Germany) Telekom 4 hours 48 mins 2 seconds 2. Giovanni Lombardi (Italy) Polti 5 seconds behind 3. Tristan Hoffman (Netherlands) TVM same time 4. Erik Breukink (Netherlands) Rabobank 8 seconds 5. Jesper Skibby (Denmark) TVM 9 6. Vyacheslav Ekimov (Russia) Rabobank same time 7. Luca Pavanello (Italy) Aki 11 8. Eleuterio Anguita (Spain) MX Onda 9. Michael Andersson (Sweden) Telekom 10. Johan Capiot (Belgium ) Collstrop all same time Final overall placings (after six stages): 1. Rolf Sorensen (Denmark) Rabobank 20:36:54 2. Lance Armstrong (U.S.) Motorola 2 seconds behind 3. Ekimov 1:7 4. Marco Lietti (Italy) MG-Technogym 1:16 5. Erik Dekker (Netherlands) Rabobank 1:23 6. Ludwig 1:25 6. Breukink same time 8. Maarten den Bakker (Netherlands) TVM 1:33 9. Andersson 1:34 10. Skibby 1:45 6435 !GCAT !GSPO Opener Nick Knight struck his first one-day international century to power England to 292 for eight in the second 50 overs match against Pakistan at Edgbaston on Saturday. Knight stroked 113 off 132 balls and Alec Stewart smashed a rapid 46 to give England a whirlwind start in which they put on 103 for the first wicket in 14 overs after being put in to bat by Wasim Akram. Pakistan recovered from the early mauling, with leg-spinner Mushtaq Ahmed taking two for 33 in his 10 overs, but they still faced a demanding target to level the three-match series after losing the opening game by five wickets at Old Trafford on Thursday. Knight and Stewart, who plundered his 46 off 32 deliveries, shared a century partnership of such mounting authority that the second 50 took a mere 25 balls. Stewart's last two scoring shots were sixes, the first over the extra cover boundary off paceman Ata-ur Rehman and the next was a sweetly-timed straight hit from the off-spin of Saqlain Mushtaq. However, Mushtaq Ahmed's introduction for the 14th over checked England's exhilarating progress. Stewart, trying to force square a ball too far up to him, was bowled, then captain Mike Atherton departed four balls later, lbw for one trying to turn to leg. Knight, who completed his half-century in 47 balls with nine fours, then effectively assumed the anchor role until his fine innings, in only his second one-day international, ended in the 38th over when he was stumped off Saqlain. The Warwickshire opener hit 11 fours. Ronnie Irani, with an unbeaten 45, did his best to sustain the momentum as three run outs to remove Matthew Maynard (1), debutant Adam Hollioake (15) and Darren Gough (0) put the brake on England's advance. 6436 !GCAT !GSPO Leading starting positions for Sunday's San Marino 500cc motorcycle Grand Prix after the second official qualifying session on Saturday: 1. Michael Doohan (Australia) Honda one minute 50.250 seconds (average speed 159.739 kph) 2. Jean-Michel Bayle (France) Yamaha 1:50.727 3. Norifumi Abe (Japan) Yamaha 1:50.858 4. Luca Cadalora (Italy) Honda 1:51.006 5. Alex Criville (Spain) Honda 1:51.075 6. Scott Russell (U.S.) Suzuki 1:51.287 7. Tadayuki Okada (Japan) Honda 1:51.528 8. Carlos Checa (Spain) Honda 1:51.588 6437 !GCAT !GSPO Scoreboard of the second one-day cricket match between England and Pakistan on Saturday: England N.Knight st Moin Khan b Saqlain Mushtaq 113 A.Stewart b Mushtaq Ahmed 46 M.Atherton lbw b Mushtaq Ahmed 1 G.Thorpe lbw b Ata-ur-Rehman 21 M.Maynard run out 1 R.Irani not out 45 A.Hollioake run out 15 D.Gough run out 0 R.Croft b Waqar Younis 15 D.Headley not out 3 Extras (lb-25 w-4 nb-3) 32 Total (for 8 wickets, innings closed) 292 Fall: 1-103 2-105 3-163 4-168 5-221 6-257 7-257 8-286. Did Not Bat: A.Mullally. Bowling: Wasim Akram 10-0-50-0, Waqar Younis 9-0-54-1, Ata-ur-Rehman 6-0-40-1, Saqlain Mushtaq 10-0-59-1, Mushtaq Ahmed 10-0-33-2, Aamir Sohail 5-0-31-0. pakistan Saeed Anwar c Stewart b Gough 33 Aamir Sohail c Croft b Gough 0 Moin Khan lbw b Mullally 0 Ijaz Ahmed b Croft 79 Inzamam-ul-Haq c Thorpe b Croft 6 Salim Malik c Stewart b Hollioake 23 Wasim Akram c Knight b Hollioake 21 Mushtaq Ahmed not out 14 Saqlain Mushtaq b Hollioake 0 Waqar Younis lbw b Gough 4 Ata-ur-Rehman c Knight b Hollioake 2 Extras (lb-2 nb-1) 3 Total (37.5 overs) 185 Fall of wickets: 1-1 2-6 3-54 4-104 5-137 6-164 7-164 8-168 9-177. Bowling: Gough 8-0-39-3, Mullally 6-0-30-1, Headley 7-0-32-0, Irani 2-0-22-0, Croft 8-0-37-2, Hollioake 6.5-1-23-4. 6438 !GCAT !GSPO Seve Ballesteros added his considerable voice on Saturday to the criticism of the European Tour's decision to stage the British Masters at Collingtree Park. Europe's Ryder Cup captain also widened the argument to the whole future of the Tour. "If we play in these conditions I don't really think I will have the right team for the Ryder Cup," he said. "I am willing to call for a meeting but need everyone's support. We can't continue like this -- if we do, we will lose players and sponsors." Nick Faldo headed for the United States two years ago citing tournament conditions as one of the reasons. Ballesteros commented: "Players are getting fed up with the situation and are going where there are better facilities and courses. "We will end up with 54 tournaments every year, but very cheap ones. It's not right. As I have said in the past many times, I want quality not quantity." The greens at the Northampton course have been in atrocious condition this week. Ian Woosnam called them "the worst I've ever played on" and Colin Montgomerie said the entire field had come close to walking out. Thirteen players made early exits for one reason or another, but Ballesteros described their action as "a bit anti-professional". He added: "I want to see courses set up tougher and in better condition, but this is what we have and we must play with what we have. Walking out is a pity as it gives a poor impression to the new sponsors. "But to be honest, the problem is ours (the players). We must sit down, select the committee and say how we want the Tour to be run. "When we complain in little groups in bars, cafeterias and locker rooms, nothing happens. I have fought by myself many times already, but maybe we will all meet soon. "It's not just this week. Last week was also embarrassing." Ballesteros had criticised the German Open course at Stuttgart for being too easy as the halfway cut came at five-under-par. The European Tour are joint owners of Collingtree Park with Mark McCormack's International Management Group. 6439 !GCAT !GSPO Results at the world track cycling championships on Saturday: Women's 3,000 metres individual pursuit qualifying round (fastest eight to quarter finals): 1. Antonella Bellutti (Italy) 3:31.526 (world record) 2. Marion Clignet (France) 3:31.674 3. Lucy Tyler-Sharman (Australia) 3:31.830 4. Yvonne McGregor (Britain) 3:41.823 5. Natalia Karimova (Russia) 3:45.061 6. Svetlana Samokhalova (Russia) 3:46.216 7 Jane Quigley (U.S.) 3:46.493 8. Rasa Mazeikyte (Lithuania) 3:46.834 9. Tatian Stiajkina (Ukraine) 3:52.204 World 4,000 metres team pursuit semifinals: Italy (Adler Capelli, Cristiano Citto, Andrea Collinelli, Mauro Trentino) 4:00.958 (world record) beat Russia (Anton Chantyr, Edouard Gritsoun, Nikolai Kouznetsov) 4:06.534. France (Cyril Bos, Philippe Ermenault, Jean-Michel Monin, Francis Moreau) 4:05.104 beat Germany (Guido Fulst, Danilo Hondo, Thorsten Rund, Heiko Szonn) 4:05.463 Germany take the bronze medal as fastest losing semifinalist. Women's world 500 metres time trial final: 1. Felicia Ballanger (France) 34.829 2. Annett Neumann (Germany) 35.202 3. Michelle Ferris (Australia) 35.694 4. Magali Faure (France) 35.888 5. Olga Slioussareva (Russia) 36.170 6. Oksana Grichina (Russia) 36.242 7. Tanya Dubnicoff (Canada) 36.307 8. Kathrin Freitag (Germany) 36.491 9. Donna Wynd (New Zealand) 36.831 10. Mira Kasslin (Finland) 37.273 11. Wendy Everson (Britain) 37.624 12. Giovanna Troldi (Italy) 38.285 13. Rita Razmaite (Lithuania) 38.546 World 4,000 metres team pursuit championship final: Italy (Adler Capelli, Cristiano Citto, Andrea Collinelli, Mauro Trentino) 4:02.752 beat France (Cyril Bos, Philippe Ermenault, Jean-Michel Monin, Francis Moreau) 4:04.539 World sprint championship quarter finals (best of three matches) Florian Rousseau (France) beat Ainars Kiksis (Latvia) 2-0 Darryn Hill (Australia) beat Christian Arrue (U.S.) 2-0 Roberto Chiappa (Italy) beat Frederic Magne (France) 2-0 Marty Nothstein (U.S.) beat Pavel Buran (Czech Republic) 2-0 Women's world 3,000 metres individual pursuit championship quarter-finals: Marion Clignet (France) 3:30.974 (World Record) beat Jane Quigley (USA) 3:42.852 Natalia Karimova (Russia) 3:40.036 beat Yvonne McGregor (Britain) 3:43.078 Lucy Tyler-Sharman (Australia) 3:35.087 beat Svetlana Samokhvalova (Russia) 3:45.011 Antonella Bellutti (Italy) 3:32.174 caught and eliminated Rasa Mazeikyte (Lithuania) 6440 !GCAT !GSPO The women's 3,000 metres world record was broken three times in pursuit qualifying at the world track cycling championships on Saturday. Olympic champion Antonella Bellutti of Italy finally reduced the mark to three minutes 31.526 seconds. Earlier, Lucy Tyler-Sharman of Australia and Marion Clignet of France had also bettered the old record of 3:31.924 set by Bellutti in Cali, Colombia in April. Tyler-Sharman clocked 3:31.830 and 10 minutes later Clignet improved the time to 3:31.674. Clignet had an even briefer reign as world record-holder for Bellutti was next on the track. She had a slower start than Clignet, but finished strongly to reach the quarter-finals to be held later on Saturday as the fastest qualifier. Bellutti, a former athlete who switched to cycling only two years ago, is bidding for her first world title after taking the silver medal at Bogota, Colombia, last year. Five world records have now been set during the first four days of racing on the 250-metres indoor track. Britain's Chris Boardman's had two record-breaking rides in the men's 4,000 metres individual pursuit. 6441 !GCAT !GSPO Pakistan won the toss and put England in to bat in the second limited overs cricket international at Edgbaston on Saturday. Surrey all-rounder Adam Hollioake was making his England debut, replacing Lancashire batsman Graham Lloyd, with seamer Peter Martin again being omitted from the 13. Pakistan kept the side who lost to England by five wickets at Old Trafford on Thursday in the first of the three one-day matches. Teams: England: Mike Atherton (captain), Nick Knight, Alec Stewart, Graham Thorpe, Matthew Maynard, Adam Hollioake, Ronnie Irani, Robert Croft, Darren Gough, Dean Headley, Alan Mullally. Pakistan: Aamir Sohail, Saeed Anwar, Ijaz Ahmed, Salim Malik, Inzamam-ul-Haq, Wasim Akram (captain), Moin Khan, Saqlain Mushtaq, Mushtaq Ahmed, Waqar Younis, Ata-ur-Rehman. 6442 !GCAT !GSPO Juan Gonzalez homered twice and Ivan Rodriguez added a two-run shot as the Texas Rangers defeated the Cleveland Indians 5-3 in a matchup of division leaders Friday. Rodriguez's 18th homer, off Chad Ogea (7-5) in the first, gave Texas a 2-0 lead. One out later, Gonzalez smacked his 40th homer, extending his hitting streak to 20 games. Gonzalez, who hit in 21 straight games earlier this season, joined Mickey Rivers as the only players in Texas history with two 20-game streaks in the same year. Gonzalez hit his second homer in the third for his fifth multi-homer game of the season. Gonzalez has three 40-homer seasons and his 121 RBI broke Ruben Sierra's team record of 119 set in 1989. The Indians had their four-game winning streak stopped. "It's not something I'm going to try to explain," said Texas manager Johnny Oates about his team winning seven of the 10 meetings from Cleveland this season. "We've got two more regular season games against them and we might get lucky enough or unlucky enough to play them in the post-season." Roger Pavlik (15-7) gave up three runs and seven hits in 6 1/3 innings and became the fourth 15-game winner in the American League. Jeff Russell pitched two perfect innings for his third save. Brian Giles and Jim Thome homered for Cleveland. Cleveland's lead over the White Sox in the American League Central dropped to nine games. Texas's lead over Seattle in the West increased to six. At California, Tino Martinez's two-run homer keyed a three-run first and Andy Pettitte became the league's first 19-game winner as the New York Yankees beat the Angels 6-2. New York snapped a season-high five-game losing streak and also got homers from Mariano Duncan, Darryl Strawberry and Jim Leyritz. Pettite (19-7) allowed two runs and eight hits over eight innings with a walk and seven strikeouts. He improved to 12-2 following Yankees' losses. Mariano Rivera pitched a scoreless ninth, striking out two. Ex-Yankee Randy Velarde hit his 11th homer, his most at any professional level. In Seattle, Pete Incaviglia's grand slam with one out in the sixth snapped a tie and lifted the Baltimore Orioles past the Seattle Mariners, 5-2. It was Incaviglia's sixth grand slam and 200th homer of his career. Baltimore's Eddie Murray cracked his 20th homer of the season and 499th of his career. Jay Buhner hit his 38th homer and Edgar Martinez his 23rd for Seattle. The Orioles remained tied with the White Sox for the American League wild card with the Mariners a game back. In Toronto, Kevin Tapani (12-8) allowed two runs and six hits over 7 1/3 innings and Frank Thomas hit his 29th homer and drove in three runs as the Chicago White Sox cruised to an 11-2 victory over the Blue Jays. Thomas, Harold Baines and Robin Ventura each collected three hits. Baines homered and scored three runs. Danny Tartabull added two hits and three RBI as all Chicago starters got at least one hit. In Oakland, Dave Telgheder scattered seven hits over eight innings and Mark McGwire hit his major-league leading 45th homer and drove in three runs as the Athetlics blanked the Boston Red Sox 7-0. Telgheder (2-5) snapped a personal three-game losing streak. Buddy Groom pitched a perfect ninth inning. McGwire singled home a run to spark a three-run sixth and capped the scoring with a two-run homer in the seventh. The loss was Boston's seventh in its last 29 games. In Detroit, Todd Van Poppel pitched a five-hitter for his first career shutout and Tony Clark homered to cap a four-run first inning as the Tigers blanked the Kansas City Royals 4-0. Van Poppel (3-6) walked two and struck out two in defeating the Royals for the second time this week. He threw 108 pitches as he lowered his ERA from 8.08 to 7.24. Kansas City has scored only one run in two games. In Milwaukee, Marc Newfield homered off Jose Parra (5-4) leading off the bottom of the 12th as the Brewers rallied for a 5-4 victory over the Minnesota Twins. Milwaukee has won 10 of its last 15. Bob Wickman (6-1) pitched 2 2/3 hitless innings for the win, his second for the Brewers. Matt Lawton hit a three-run homer off closer Mike Fetters with one out in the ninth to give Minnesota a 4-2 lead. But Milwaukee tied it up in the bottom of the ninth on pinch-hitter Dave Nilsson's two-run double. 6443 !GCAT !GSPO !GVIO Former England captain Will Carling has called for the introduction of a European Super League to match the southern hemisphere's Super 12 tournament and solve the internal warfare in British rugby. Carling believes a 14-team Super League, incorporating four clubs from England and France and two apiece from Wales, Ireland and Scotland, would not only raise standards but generate the cash needed to fund the fledgling professional game. "It is widely accepted among senior England players that we need a higher standard of competition to play in week after week in order to sharpen skills for the leap up to international rugby," said Carling, writing in the Mail on Sunday newspaper. "The creation of a European Super League would seem to me to solve the game's two critical needs -- more money and elite competition -- almost immediately." 6444 !GCAT !GSPO Essex and Kent both face tense finishes on Monday as they attempt to keep pace with title hopefuls Derbyshire and Surrey, convincing three-day victors on Saturday, in the English county championship run-in. Essex need another 148 with five wickets in hand to beat Yorkshire after a maiden first-class century from Richard Kettleborough transformed a match which his side had seemed certain to lose. Kent will also need to keep their nerve against struggling Nottinghamshire who will enter the final day 137 ahead with four wickets left in a relatively low-scoring match at Tunbridge Wells. Derbyshire, nine-wicket winners over Worcestershire, and Surrey, who thrashed Warwickshire by an innings and 164 runs, can instead take the day off along with rivals Leicestershire, who beat Somerset inside two days. Warwickshire captain Tim Munton is tipping Surrey to emerge on top, impressed by the positive influence of Australian coach Dave Gilbert, but Derbyshire's Australian captain Dean Jones is conceding nothing as his side chase their first title for 60 years. "We took three absolutely brilliant catches in this match and our catching all season has been pretty impressive. Our catching will win or lose us the championship," he said. 6445 !GCAT !GSPO Strikers Dean Saunders and Mark Hughes scored two goals each as Wales crushed San Marino 6-0 in a World Cup qualifier in Cardiff on Saturday. Saunders, back in the English premier league with Nottingham Forest after a spell in Turkey, opened the scoring after 82 seconds when Manchester United winger Ryan Giggs put him through on goal. Hughes, who plays for Chelsea, headed home Wales's second 24 minutes later and Andy Melville and John Robinson both scored before the interval to give Bobby Gould's side a 4-0 halftime cushion. Hughes and Saunders scored a goal apiece after the break as the Welsh went one goal better than their 5-0 victory over San Marino's part-timers in their first group seven World Cup clash in June. Both players were denied hat-tricks by the woodwork in the closing stages of the match, and Saunders missed a penalty. The only frustration for Wales was the referee's decision to book Giggs, which means he will miss the next World Cup match against the Dutch. Giggs sarcastically clapped San Marino's Bryan Gasperoni for over-reacting to a challenge. The referee appeared to believe he was the target of the sarcasm and reached for the yellow card. "It's very, very bad news," Welsh captain Barry Horn said. "Our first three goals all came from Ryan's passes. (The booking) was a bad decision." 6446 !GCAT !GSPO Results and close scores of four-day English county championship matches on Saturday: At Portsmouth: Middlesex beat Hampshire by 188 runs. Middlesex 199 and 426, Hampshire 232 and 205 (A.Fraser 5-79, P.Tufnell 4-39). Middlesex 20 points, Hampshire 5. At Chester-le-Street: Glamorgan beat Durham by 141 runs. Glamorgan 259 and 207, Durham 114 and 211. Glamorgan 22 points, Durham 4. At Chesterfield: Derbyshire beat Worcestershire by nine wickets. Worcestershire 238 and 303 (K.Spiring 130 not out, S.Rhodes 57; P.DeFreitas 4-70), Derbyshire 471 and 71-1. Derbyshire 24 points, Worcestershire 5. At The Oval (London): Surrey beat Warwickshire by an innings and 164 runs. Warwickshire 195 and 109 (J.Benjamin 4-17, M.Bicknell 4-38), Surrey 468 (C.Lewis 94, M.Butcher 70, G.Kersey 63, J.Ratcliffe 63, D.Bicknell 55). Surrey 24 points, Warwickshire 2. At Headingley (Leeds): Yorkshire 290 and 329 (R.Kettleborough 108, G.Hamilton 61; P.Such 8-118), Essex 372 and 100-5. At Hove: Sussex 363 and 144, Lancashire 218 and 53-0. At Tunbridge Wells: Nottinghamshire 214 and 167-6 (C.Tolley 64 not out), Kent 244 (C.Hooper 58; C.Tolley 4-68, K.Evans 4-71) At Bristol: Gloucestershire 183 and 249 (J.Russell 75), Northamptonshire 190 and 218-9. 6447 !GCAT !GSPO Substitute Sergei Rebrov scored a late goal to give Ukraine the result they desperately needed as they opened their tough group nine World Cup qualfying account with a 1-0 win over Northern Ireland on Saturday. Rebrov delivered the killer blow in the 79th minute when he rose above two defenders to head home a cross from Victor Skrypnyk. Goalkeeper Alan Fettis, who had produced a string of superb saves, got a hand to the ball but was unable to prevent it going into the net. With only one team qualifying automatically from the group for the 1998 finals in France it was an important victory for Ukraine but a disastrous one for Northern Ireland. The other teams in the group are Germany, Portugal, Albania and Armenia. Northern Ireland felt they should have been awarded a goal when goalkeeper Aleksandr Shovtovski spilled a shot from Michael Gray. Although Shovtovski managed to retrieve the situation by scooping the ball away at the second attempt the ball looked to have gone over the line but French referee Alain Sars signalled for a corner, waving away furious Irish protests. Keith Gillespie was also out of luck, beating the keeper with a superb chip only for Sergei Popov to scramble back and head the ball off the line. 6448 !GCAT !GSPO Leading money winners on the European Tour after the British Masters won by Robert Allenby on Saturday (British unless stated): 1. Ian Woosnam 510,258 pounds sterling 2. Colin Montgomerie 442,201 3. Robert Allenby (Australia) 407,748 4. Lee Westwood 301,972 5. Costantino Rocca (Italy) 297,157 6. Mark McNulty (Zimbabwe) 254,247 7. Andrew Coltart 248,142 8. Wayne Riley (Australia) 239,733 9. Raymond Russell 234,330 10. Paul Lawrie 211,420 11. Stephen Ames (Trinidad) 211,175 12. Frank Nobilo (New Zealand) 209,412 13. Paul McGinley (Ireland) 208,978 14. Padraig Harrington (Ireland) 202,593 15. Retief Goosen (South Africa) 195,283 16. Miguel Angel Jimenez (Spain) 184,180 17. Peter Mitchell 183,704 18. Miguel Angel Martin (Spain) 182,533 19. Jonathan Lomas 181,005 20. Paul Broadhurst 176,780 6449 !GCAT !GSPO Damon Hill's future in Formula One motor racing appeared in doubt on Saturday amid rumours he would be replaced in the championship-winning Williams team next year by Germany's Heinz-Harald Frentzen. "Damon Hill is in pretty desperate straits," a reliable source within the sport told Reuters. "It seems his talks with Williams have broken down. He has started talking to several other teams about next season." The source said Hill, currently leading the drivers' championship from team mate Jacques Villeneuve, had approached the Jordan and Stewart teams, and has also been linked with the McLaren stable. A second source in Germany said Williams had already offered Frentzen -- currently with the low-profile Swiss team Sauber-Ford -- a driver's berth for the 1997 season. Hill's manager, solicitor Michael Breen, declined to comment on the rumours but has organised a news conference in London on Sunday to clarify the situation. Hill, who leads the championship by 13 points with three races of the season to go, remained at his Dublin home and declined to comment, as did the Williams team. Williams have developed a reputation for ditching successful drivers. Brazilian Nelson Piquet left them in 1987 after winning the drivers' crown, Briton Nigel Mansell fell out with the team in 1992 after taking the title, and Frenchman Alain Prost quit in 1993 after a row about the choice of his driving partner. Piquet joined Lotus, Mansell went to American Indycar racing and Prost retired from the sport. 6450 !GCAT !GSPO Results of English, Scottish and Welsh rugby union matches on Saturday: English National League one Harlequins 75 Gloucester 19 London Irish 27 Bristol 28 Northampton 46 West Hartlepool 20 Orrell 13 Bath 56 Sale 31 Wasps 33 Saracens 25 Leicester 23 Welsh division one Bridgend 13 Llanelli 9 Dunvant 21 Ebbw Vale 10 Treorchy 17 Newbridge 23 Newport 29 Caerphilly 10 Swansea 49 Cardiff 23 Scottish premier league division one Boroughmuir 20 Hawick 23 Currie 45 Heriot's F.P. 5 Jed-Forest 17 Watsonians 54 Melrose 107 Stirling County 10 6451 !GCAT !GSPO Wales beat San Marino 6-0 (halftime 4-0) in a World Cup soccer European group 7 qualifier on Saturday. Scorers: Dean Saunders (2nd minute, 75th), Mark Hughes (25th, 54th), Andy Melville (33rd), John Robinson (45th). Attendance: 15,150 6452 !GCAT !GDIP !GSPO Ukraine beat Northern Ireland 1-0 (halftime 0-0) in a World Cup soccer European group nine qualifier on Saturday. Scorer: Sergei Rebrov (79th minute) Attendance: 9,358 6453 !GCAT !GSPO Former Wallaby captain Michael Lynagh began his career in English club rugby in impeccable fashion on Saturday to frustrate his old coach Bob Dwyer on his league coaching debut with Leicester. Lynagh kicked five penalties and a conversion from his six attempts at goal to steer his multi-national Saracens side to a 25-23 home win and offer millionaire backer Nigel Wray an early return on his big investment in the north London club. French centre Philippe Sella also enjoyed a good game alongside Lynagh, although the home team scored only one try through England scrum-half Kyran Bracken. The new French connection at Harlequins also made a good start, Laurent Cabannes and Laurent Benezech scoring a try apiece in their side's 75-19 victory over Gloucester. Former England captain Will Carling, handed the kicking duties, finished with 20 points. With the first day of the league season briefly shifting the spotlight away from the discord between the clubs and the Rugby Football Union, there were also emphatic victories for champions Bath, 56-13 winners over Orrell, and Northampton and narrow successes for Wasps and Bristol. 6454 !GCAT !GSPO Scottish league standings after Saturday's matches (tabulated - played, won, drawn, lost, goals for, goals against, points): Division one Greenock Morton 3 2 0 1 5 2 6 Dundee 3 1 2 0 3 2 5 St Johnstone 2 1 1 0 3 0 4 St Mirren 3 1 1 1 5 4 4 Airdrieonians 2 1 1 0 1 0 4 Falkirk 3 1 1 1 1 1 4 Clydebank 2 1 0 1 1 3 3 Partick 3 0 2 1 1 2 2 Stirling 3 0 1 2 1 3 1 East Fife 2 0 1 1 0 4 1 Division two Livingston 3 3 0 0 6 2 9 Queen of South 3 2 0 1 5 4 6 Ayr 3 1 2 0 8 2 5 Stenhousemuir 3 1 1 1 6 1 4 Hamilton 3 1 1 1 3 2 4 Stranraer 3 1 1 1 3 3 4 Brechin 3 0 3 0 2 2 3 Clyde 3 1 0 2 2 5 3 Dumbarton 3 0 2 1 3 4 2 Berwick 3 0 0 3 1 14 0 Division three Albion 3 3 0 0 5 0 9 Forfar 3 2 0 1 7 4 6 Cowdenbeath 3 2 0 1 4 3 6 Arbroath 3 1 2 0 4 2 5 Alloa 3 1 1 1 3 3 4 Queen's Park 3 1 1 1 6 8 4 Montrose 3 1 0 2 3 4 3 Inverness Thistle 3 1 0 2 3 6 3 East Stirling 3 0 2 1 3 4 2 Ross County 3 0 0 3 3 7 0 6455 !GCAT !GSPO English soccer league standings after Saturday's matches (tabulated - played, won, drawn, lost, goals for, goals against, points): Division one Stoke 4 3 1 0 7 4 10 Barnsley 3 3 0 0 8 2 9 Norwich 4 3 0 1 5 3 9 Tranmere 4 2 1 1 6 4 7 Bolton 3 2 1 0 5 2 7 Queens Park Rangers 3 2 1 0 5 3 7 Wolverhampton 4 2 1 1 5 3 7 Swindon 4 2 1 1 5 4 7 Bradford 4 2 0 2 4 3 6 Portsmouth 4 2 0 2 4 5 6 Ipswich 4 1 2 1 9 7 5 Crystal Palace 4 1 2 1 4 3 5 Port Vale 4 1 2 1 4 4 5 Birmingham 2 1 1 0 5 4 4 Reading 4 1 1 2 5 10 4 Huddersfield 3 1 1 1 4 4 4 Oxford 4 1 0 3 6 5 3 Manchester City 3 1 0 2 2 3 3 West Bromwich 3 0 2 1 2 3 2 Oldham 4 0 1 3 5 9 1 Sheffield United 2 0 1 1 4 5 1 Grimsby 4 0 1 3 4 8 1 Southend 4 0 1 3 2 10 1 Charlton 2 0 1 1 1 3 1 Division two Plymouth 4 3 1 0 10 6 10 Brentford 4 3 1 0 9 3 10 Bury 4 3 1 0 8 2 10 Chesterfield 4 3 0 1 4 2 9 Millwall 4 2 1 1 7 5 7 Shrewsbury 4 2 1 1 6 6 7 Blackpool 4 2 1 1 3 2 7 York 4 2 0 2 6 6 6 Burnley 4 2 0 2 6 7 6 Bournemouth 4 2 0 2 5 5 6 Watford 4 2 0 2 4 5 6 Bristol Rovers 3 1 2 0 2 1 5 Peterborough 3 1 1 1 4 4 4 Preston 4 1 1 2 4 5 4 Crewe 4 1 1 2 4 6 4 Gillingham 4 1 1 2 4 6 4 Notts County 3 1 1 1 2 2 4 Bristol City 4 1 0 3 7 8 3 Luton 4 1 0 3 4 10 3 Wycombe 4 0 3 1 2 3 3 Wrexham 2 0 2 0 5 5 2 Stockport 4 0 2 2 1 3 2 Rotherham 4 0 1 3 3 6 1 Walsall 3 0 1 2 2 4 1 Division three Wigan 4 3 1 0 9 4 10 Fulham 4 3 0 1 5 3 9 Hull 4 2 2 0 4 2 8 Hartlepool 4 2 1 1 6 5 7 Torquay 4 2 1 1 5 3 7 Cardiff 4 2 1 1 3 2 7 Scunthorpe 4 2 1 1 3 3 7 Carlisle 4 2 1 1 2 1 7 Scarborough 4 1 3 0 5 3 6 Northampton 4 1 2 1 6 4 5 Lincoln 4 1 2 1 5 5 5 Barnet 4 1 2 1 4 2 5 Exeter 4 1 2 1 4 5 5 Cambridge United 4 1 2 1 3 4 5 Darlington 4 1 1 2 9 8 4 Chester 4 1 1 2 6 7 4 Doncaster 4 1 1 2 4 5 4 Leyton Orient 4 1 1 2 3 3 4 Brighton 4 1 1 2 3 6 4 Hereford 4 1 1 2 2 3 4 Swansea 4 1 0 3 4 9 3 Colchester 4 0 3 1 2 4 3 Rochdale 4 0 2 2 2 4 2 Mansfield 4 0 2 2 2 6 2 6456 !GCAT !GSPO Results of Scottish league matches on Saturday: Division one Greenock Morton 1 Falkirk 0 Partick 1 St Mirren 1 Stirling 1 Dundee 1 Postponed: East Fife v Clydebank, St Johnstone v Airdrieonians. Division two Ayr 6 Berwick 0 Clyde 0 Queen of South 2 Dumbarton 1 Brechin 1 Livingston 1 Hamilton 0 Stenhousemuir 0 Stranraer 1 Division three Albion 2 Cowdenbeath 0 Arbroath 0 East Stirling 0 Inverness Thistle 1 Alloa 0 Montrose 2 Ross County 1 Queen's Park 1 Forfar 4 6457 !GCAT !GSPO Results of English soccer matches on Saturday: Division one Bradford 1 Tranmere 0 Grimsby 0 Portsmouth 1 Huddersfield 1 Crystal Palace 1 Norwich 1 Wolverhampton 0 Oldham 3 Ipswich 3 Port Vale 2 Oxford 0 Reading 2 Stoke 2 Southend 1 Swindon 3 Postponed: Birmingham v Barnsley, Manchester City v Charlton Playing Sunday: Queens Park Rangers v Bolton Division two Blackpool 0 Wycombe 0 Bournemouth 1 Peterborough 2 Bristol Rovers 1 Stockport 1 Bury 4 Bristol City 0 Crewe 0 Watford 2 Gillingham 0 Chesterfield 1 Luton 1 Rotherham 0 Millwall 2 Burnley 1 Notts County 0 York 1 Shrewsbury 0 Brentford3 Postponed: Walsall v Wrexham Division three Brighton 1 Scunthorpe 1 Cambridge United 0 Cardiff 2 Colchester 1 Hereford 1 Doncaster 3 Darlington 2 Fulham 1 Carlisle 0 Hull 0 Barnet 0 Leyton Orient 2 Hartlepool 0 Mansfield 0 Rochdale 0 Scarborough 1 Northampton 1 Torquay 2 Exeter 0 Wigan 4 Chester 2 6458 !GCAT !GSPO Results and close scores of four-day English county championship matches on Saturday: At Portsmouth: Middlesex beat Hampshire by 188 runs. Middlesex 199 and 426, Hampshire 232 and 205 (A.Fraser 5-79, P.Tufnell 4-39). Middlesex 20 points, Hampshire 5. At Chester-le-Street: Glamorgan beat Durham by 141 runs. Glamorgan 259 and 207, Durham 114 and 211. Glamorgan 22 points, Durham 4. At Chesterfield: Derbyshire beat Worcestershire by nine wickets. Worcestershire 238 and 303 (K.Spiring 130 not out, S.Rhodes 57; P.DeFreitas 4-70), Derbyshire 471 and 71-1. Derbyshire 24 points, Worcestershire 5. At The Oval (London): Surrey beat Warwickshire by an innings and 164 runs. Warwickshire 195 and 109 (J.Benjamin 4-17, M.Bicknell 4-38), Surrey 468 (C.Lewis 94, M.Butcher 70, G.Kersey 63, J.Ratcliffe 63, D.Bicknell 55). Surrey 24 points, Warwickshire 2. At Headingley (Leeds): Yorkshire 290 and 329 (R.Kettleborough 108, G.Hamilton 61; P.Such 8-118), Essex 372 and 100-5. At Hove: Sussex 363 and 144, Lancashire 218 and 53-0. At Tunbridge Wells: Nottinghamshire 214 and 167-6 (C.Tolley 64 not out), Kent 244 (C.Hooper 58; C.Tolley 4-68, K.Evans 4-71) At Bristol: Gloucestershire 183 and 249 (J.Russell 75), Northamptonshire 190 and 218-9. 6459 !GCAT !GSPO Denmark striker Mikkel Beck is free to play for English premier league Middlesbrough after winning his freedom of contract battle with former team Fortuna Cologne. The German second division club had claimed a year's option on Beck and demanded a fee for the player who has trained with Middlesbrough since playing for his country in the European championship finals in England last June. Middlesbrough refused to pay, expecting to sign Beck without a fee under the Bosman ruling, by which the European Court decided last year that UEFA transfer fee rules infringed European Union law. Faced with the threat of costly legal action, Fortuna Cologne have backed down and given up any claim to a fee. 6460 !GCAT !GSPO Italian rookie Alex Zanardi won his third consecutive IndyCar pole on Saturday at the Vancouver Grand Prix, jumping all the way from the 12th spot he had reached in the previous day's provisional qualifying. Driving a Reynard Honda, Zanardi led a group of 12 drivers breaking the track record, set Friday, with a time of 53.980 seconds or 113.576 mph (182.778 kph) around the 10-turn, 1.703 mile (2.741 km) temporary road circuit at Concord Pacific Place. Michael Andretti, the provisional polesitter, fell to second fastest with a time of 54.483 seconds in a Lola Ford Cosworth, followed by Bobby Rahal in a Reynard Mercedes-Benz at 54.578. Zanardi has been blistering the tour recently, winning five poles and starting from the front row in the last seven races. He has jumped from 17th to third in the points standings with two races remaining. Jimmy Vasser, the current points leader, qualified fifth in a Reynard Honda at 54.617 seconds, improving from 17th. Al Unser Jr, who stands second in the series, qualified seventh at 54.683 seconds in a Penske Mercedes-Benz. After a less than perfect Friday Zanardi conferred with his engineer, Morris Nunn, to change the setup of his car before Saturday's unofficial practice. It didn't work. "We made a lot of changes to the car this morning but the car was even worse than Friday," said Zanardi. The Ganassi Racing team then gambled "and put a completely different setup on the car for qualifying," Zanardi explained. "It was a shot in the dark, really, but we knew it was in the right direction and we ended up with a very good car." Twenty-seven drivers qualified for Sunday's 100-lap, 170.3 mile (274.1 km) race, the penultimate round of the 16-race series which ends on September 8 at Laguna Seca Raceway in Monterey, California. 6461 !GCAT !GSPO Top ten drivers in grid for Sunday's Vancouver IndyCar race after final qualifying on Saturday (tabulate by driver, country, chassis, motor and lap times in seconds): 1. Alex Zanardi (Italy), Reynard Honda, 53.980 (113.576 mph/182.778 kph) 2. Michael Andretti (U.S.), Lola Ford Cosworth, 54.483 3. Bobby Rahal (U.S.), Reynard Mercedes-Benz, 54.507 4. Bryan Herta (U.S.), Reynard Mercedes-Benz, 54.578 5. Jimmy Vasser (U.S.), Reynard Honda, 54.617 6. Paul Tracy (Canada), Penske Mercedes-Benz, 54.620 7. Al Unser Jr (U.S.), Penske Mercedes-Benz, 54.683 8. Andre Ribeiro (Brazil), Lola Honda, 54.750 9. Mauricio Gugelmin (Brazil), Reynard Ford Cosworth, 54.762 10. Gil de Ferran (Brazil), Reynard Honda, 54.774 6462 !GCAT !GSPO Canada beat Panama 3-1 (halftime 2-0) in their CONCACAF semifinal phase qualifying match for the 1998 World Cup on Friday. Scorers: Canada - Aunger (41st min, pen), Paul Peschisolido (42nd), Carlo Corrazin (87th) Panama - Jorge Luis Dely Valdes (50th) Attendance: 9,402 6463 !GCAT !GSPO Michael Andretti bounced back from a painful injury to capture the provisional pole for the Molson Indy Vancouver Grand Prix on Friday. Andretti, who suffered a moderate shoulder and back injury in an open test session at Laguna Seca Raceway in California Tuesday, broke the track record with a lap of 54.928 seconds around the 10-turn, 1.703 mile (2.741 km) track at the Concord Pacific Place street circuit in a Lola Ford Cosworth. "It feels better by the hour," said Andretti, a two-time winner (1991-1992) and three-time polesitter here (1990-1992) whose last pole was at the 1995 Long Beach street circuit. "It's nice to be here (on the pole) today," he said, noting that final qualifying is on Saturday, "but I want to be here tomorrow." Bryan Herta was second fastest in the session with a time of 54.930 seconds as seven drivers eclipsed the record of 55.226 seconds set here last year by Jacques Villeneuve, who is currently on the Formula One circuit. As the IndyCar series title chase winds down to the final two races, four-time Vancouver winner Al Unser Jr, 23 points behind points series leader Jimmy Vasser, had a strong performance with a third fastest time of 55.004 seconds in a Penske Mercedes-Benz. Unser, a two-time series champion, is winless since last year's event here. Besides Andretti, Unser is the only winner in this event's previous six years. Vasser, suffering from a bad chassis vibration, was 17th in qualifying Friday. Final qualifying for Sunday's race will take place on Saturday. 6464 !GCAT !GSPO Springbok coach Andre Markgraaff insisted after his side's 32-22 third test win against New Zealand that South Africa had never contemplated defeat at Ellis Park, scene of their World Cup triumph last year "We knew for a fact there was no way that New Zealand could beat us at Ellis Park," said Markgraaff. "We certainly weren't outplayed or outmuscled in the previous two tests and our display today was deserved." Captain Gary Teichmann echoed his coach. "The guys played really well and we took our chances...that was the difference from the other two tests. Each test we've got better and better." New Zealand coach John Hart refused to be too downbeat. "We won the series and that's what we came here to do. But psychologically the players knew the trip home was there and it was difficult to lift our game at Ellis Park. They deserved to win. "I thought the referee had a disappointing game, especially in in his interpretations of rucks and mauls. But that didn't cost us the game...the problem was we didn't take our chances. "Joubert sparked the South African backs and they certainly used the ball a lot more. The South African backs have got heaps of skills, they've just got to be encouraged to use the ball." 6465 !GCAT !GSPO South Africa managed to avoid a fifth successive defeat in 1996 at the hands of the All Blacks with an emphatic 32-22 victory in front of an ecstatic Ellis Park crowd on Saturday. They scored three tries in recording their highest total against New Zealand, salvaging some pride in a season in which the world champions have lost five out of eight tests. It also ended a run of nine successive victories this year for New Zealand but arrived too late to prevent a 2-1 series defeat and an historic first All Black series triumph on South African soil. Springbok scrum-half Joost van der Westhuizen was his side's inspiration, scoring their opening try and making the third for flanker Andre Venter from a quickly taken penalty to give his side a 29-8 lead after 54 minutes. Fullback Andre Joubert scored the other, scorching in from 40 metres at the start of the second half to add to his three long-range penalties. The All Blacks salvaged some pride by scoring two tries from centre Walter Little and scrum-half Justin Marshall in the final five minutes to close a gap which at one point stood at 24 points. But they generally endured an off-day, highlighted by recalled fly-half Andrew Mehrtens who missed five out of eight kicks at goal. Recalled fly-half Henry Honiball kicked the Springboks into a 6-0 lead after 10 minutes only to see Andrew Mehrtens launch a penalty from eight metres inside his own half to narrow the gap. Mehrtens missed three further penalties and a conversion in the first 40 minutes which could have put his side ahead, but it was the Springboks who looked the more dangerous. Their promise was realised when Joubert made a 40-metre break in the 25th minute and, although winger Pieter Hendriks appeared to knock on Joubert's reverse pass, Welsh referee Derek Bevan allowed Van der Westhuizen to pick up and score under the posts. Honiball converted and Joubert kicked a penalty before All Black hooker Sean Fitzpatrick scored a try from close range on the stroke of half-time to narrow the lead to 16-8 and hint at a comeback. Instead Joubert kicked another long penalty and then raced around the outside of the defence to score the Springboks' second try. A quick penalty from Van der Westhuizen five metres from the All Black line set up the third try for Venter five minutes later and when Joubert kicked his third penalty the Springboks held an unassailable 32-8 lead going into the last quarter. When the All Blacks did break through, it was too late. Centre Walter Little followed up Mehrtens' kick to score under the posts and scrum-half Justin Marshall forced himself over from a ruck close to the line in injury-time to give them some consolation. South Africa - 15-Andre Joubert, 14 - Justin Swart, 13-Japie Mulder (Joel Stransky, 48 mins) 12-Danie van Schalkwyk, 11-Pieter Hendriks; 10-Henry Honiball, 9 - Joost van der Westhuizen; 8-Gary Teichmann (captain), 7-Andre Venter (Wayne Fyvie, 75), 6-Ruben Kruge, 5-Mark Andrews (Fritz van Heerden, 39), 4-Kobus Wiese, 3-Marius Hurter, 2 - James Dalton, 1-Dawie Theron (Garry Pagel, 66). New Zealand - 15-Christian Cullen (Alama Ieremia, 70), 14-Jeff Wilson, 13-Walter Little, 12 - Frank Bunce, 11-Glen Osborne; 10 - Andrew Mehrtens, 9 - Justin Marshall; 8-Zinzan Brooke, 7-Josh Kronfeld, 6 - Michael Jones (Glenn Taylor, 53), 5 - Robin Brooke, 4-Ian Jones, 3-Olo Brown, 2-Sean Fitzpatrick (captain), 1-Craig Dowd. 6466 !GCAT !GSPO South Africa beat New Zealand 32-22 (haltime 16-8) in the final test match of their three-test series at Ellis Park on Saturday. Scorers: South Africa - Tries: Joost van der Westhuizen (2), Andre Joubert. Conversion: Henry Honiball. Penalties: Honiball (2), Joubert (3). New Zealand - Tries: Sean Fitzpatrick, Walter Little, Justin Marshall. Conversions: Andrew Mehrtens (2). Penalties: Mehrtens. New Zealand win test series 2-1. 6467 !GCAT !GSPO Mauritania's soccer federation dissolved the national team and suspended this season's domestic championship on Saturday in the wake of the country's failure to qualify for the African Nations' Cup. "Since Mauritania has been eliminated on all fronts and the next commitments are not for another two years, we have reason to take a break," federation president Mohamed Lemine Cheiguer said. The North Africans were held to a goalless draw by Benin on Friday after losing the first leg of their qualifying tie 4-1. 6468 !GCAT !GSPO Mauritania drew 0-0 with Benin in their African Nations Cup preliminary round, second leg soccer match on Friday. Benin won 4-1 on aggregate. 6469 !GCAT !GSPO Results of Yugoslav league soccer matches played on Saturday: Division A Hajduk 2 Proleter (Z) 0 Zemun 1 Rad (B) 0 Borac 1 Mladost (L) 2 Cukaricki 1 Vojvodina 0 Buducnost 1 Red Star 3 Partizan 6 Becej 0 Standings (tabulate under won, drawn, lost, goals for, goals against, points): Red Star 4 4 0 0 9 3 12 Partizan 4 3 1 0 13 3 10 Mladost (L) 4 2 1 1 8 5 7 Vojvodina 4 2 1 1 5 3 7 Becej 4 2 1 1 5 7 7 Hajduk 4 2 0 2 5 3 6 Cukaricki 4 2 0 2 6 6 6 Zemun 4 1 2 1 3 3 5 Rad (B) 4 1 1 2 2 3 4 Buducnost 4 1 0 3 4 8 3 Proleter (Z) 4 0 1 3 2 9 1 Borac 4 0 0 4 1 10 0 Division B Sloboda 4 Mladost (BJ) 0 Buducnost (V) 0 OFK Beograd 1 Rudar 0 OFK Kikinda 1 Obilic 2 Zeleznik (B) 0 Sutjeska 1 Loznica 0 Radnicki (N) - Spartak (to be played on Sunday) Standings: Obilic 4 4 0 0 10 1 12 OFK Kikinda 4 3 0 1 8 3 9 Sutjeska 4 3 0 1 7 5 9 Loznica 4 2 0 2 7 4 6 OFK Beograd 4 1 3 0 5 4 6 Buducnost (V) 4 2 0 2 4 5 6 Sloboda 4 1 1 2 8 8 4 Spartak 3 1 1 1 3 3 4 Radnicki (N) 3 1 0 2 5 6 3 Zeleznik (B) 4 1 0 3 4 7 3 Rudar 4 1 0 3 1 7 3 Mladost (BJ) 4 0 1 3 2 10 1 6470 !GCAT !GSPO Romania made a solid start to their qualifying campaign for the 1998 World Cup, beating Lithuania 3-0 on Saturday. Romania, without star player Gheorghe Hagi, who pulled a muscle during training on Friday, took the lead in the 21st minute, striker Viorel Moldovan heading home an excellent cross from Steaua Bucharest's Adrian Ilie. A second headed goal from Chelsea's Dan Petrescu gave the Romanians a two goal lead in the second half, and Constantin Galca added a third with a powerful strike from the edge of the box 13 minutes from time. A heroic performance by Lithuanian goalkeeper Gintaras Stauce kept the score respectable. Teams: Romania - Florin Prunea (Daniel Gherasim 84th), Dan Petrescu (Gabriel Popescu 80th), Daniel Prodan, Tibor Selymess, Ionut Lupescu (Ovidiu Stinga 81st), Corneliu Papura, Iulian Filipescu, Constantin Galca, Viorel Moldovan, Adrian Ilie, Dorinel Munteanu. Lithuania - Gintaras Stauce, Tomas Ziukas, Darius Gvildys (Giderius Zutaunas 84th), Naglis Miknevicius (Tomas Razanauskas 64th), Raimondas Vaionaras (Igoris Kirilovas 54th), Virginijus Baltusnikas, Darius Maciulevicius, Andrejus Tereskinas, Edgaras Jankauskas, Aurelijus Skarbalius, Raimantas Zvigilas. 6471 !GCAT !GSPO England's irrepressible midfielder Paul Gascoigne was up to his old tricks on Saturday, pulling down his team mate Paul Ince's trousers in front of an astonished crowd in Moldova. Ince was clambering over a wall at the Republican stadium in Chisinau as Glenn Hoddle's England players tried to escape heavy rain during an under-21 clash. Gascoigne, whose compulsive practical joking has landed him in trouble in the past, tugged down the Inter Milan player's trousers in front of a group of press photographers. Hoddle, coaching the side for the first time, declined to comment on the incident. England face Moldova in a World Cup qualifier in the same stadium on Sunday. 6472 !GCAT !GFAS !GSPO Results in the Trofej Beograd 96 international basketball tournament on Saturday: Fifth place: Benetton (Italy) 92 Dinamo (Russia) 81 (halftime 50-28) Third place: Alba (Germany) 75 Red Star (Yugoslavia) 70 (42-41) 6473 !GCAT !GFAS !GSPO Results in the Trofej Beograd 96 international basketball tournament on Saturday: Fifth place: Benetton (Italy) 92 Dinamo (Russia) 81 (halftime 50-28) Third place: Alba (Germany) 75 Red Star (Yugoslavia) 70 (42-41) 6474 !GCAT !GDIP !GSPO Romania beat Lithuania 3-0 (halftime 1-0) in a World Cup soccer European group 8 qualifier on Saturday. Scorers: Romania - Viorel Moldovan (21st minute), Dan Petrescu (65th), Constantin Galca (77th) Attendence: 9,000 6475 !GCAT !GDIP !GSPO Armenia and Portugal drew 0-0 in a World Cup soccer European group 9 qualifier on Saturday. Attendance: 5,000 6476 !GCAT !GDIP !GSPO Azerbaijan beat Switzerland 1-0 (halftime 1-0) in their World Cup soccer European group three qualifying match on Saturday. Scorer: Vidadi Rzayev (28th) Attendance: 20,000 6477 !GCAT !GFAS !GSPO Benetton of Italy beat Dinamo of Russia 92-81 (halftime 50-28) in a fifth place play-off in the Trofej Beograd 96 international basketball tournament on Saturday. 6478 !GCAT !GDIP !GSPO Sweden beat Latvia 2-0 (halftime 0-0) in a European under-21 soccer championship qualifier on Saturday. Scorers: Joakim Persson 81st minute, Daniel Andersson (89th) Attendance: 300 6479 !GCAT !GDIP !GSPO Belarus beat Estonia 1-0 (halftime 1-0) in a World Cup soccer European group 4 qualifier on Saturday. Scorer: Vladimir Makovsky (35th) Attendance: 6,000 6480 !GCAT !GSPO England beat Moldova 2-0 (halftime 1-0) in a European Under-21 soccer championship group 2 qualifier on Saturday. Scorers: Bruce Dyer (39th minute), Darren Eadie (53rd) Attendance: 850 6481 !GCAT !GSPO Romania beat 2-1 (halftime 1-1) Lithuania in their European Under-21 soccer match on Friday. Scorers: Romania - Cosmin Contra (31st), Mihai Tararache (75th) Lithuania - Danius Gleveckas (13rd) Attendence: 200 6482 !GCAT !GSPO Controversial Australian Anthony Hill called Jansher Khan a cheat during his acrimonious defeat by the world number one in the Hong Kong Open semifinals on Saturday. The match boiled over when Hill made to walk off court after what he claimed was a game-winning point in the third. When the referee called Jansher's return good and the decision was accepted by the player, Hill shrieked at the Pakistani: "You cheat." "He was standing right there and knew the shot was down so I called him a cheat," said Hill, whose squash career has been blighted by fines and suspensions for unacceptable behaviour. "He knew it was down and accepted what I called him because of that." Hill won the game on the next point and said later that Jansher was generally honest on court but played by the referee's decision. The Australian had upset Jansher's rhythm with his mixture of gamesmanship and fluent stroke-making but eventually succumbed 15-7 17-15 14-15 15-8. "I changed my strategy against him today and had him rattled," he added. He is not as fit as he used to be be but was too good for me in the end. I shook him a bit but he will come out next time and be a better player for it -- that's Jansher." Jansher said that he was disturbed to be called a cheat. "What he did was bad for squash, bad for the crowd and bad for the sponsors. "We are trying to build up squash like tennis and players should not say things like that. "I think the Professional Squash Association should look into this matter and deal with it properly. I am not calling for him to be banned but they have to take some action." Jansher, bidding for an eighth Hong Kong Open title, plays second-seeded Australian Rodney Eyles in the final. Eyles played his best squash of the tournament to beat fourth-seeded Peter Nicol of Scotland 15-10 8-15 15-10 15-4. Eyles, who defeated Jansher in the semifinals of the Portuguese Open in 1993, said that he would like to win for the good of the game. "I have nothing against Jansher but it will be great if I could beat him," said Eyles. "My biggest problem against Jansher is concentration. I want to beat him so badly that I just cannot get it together." 6483 !GCAT !GSPO Semifinal results in the Hong Kong Open on Saturday (prefix number denotes seeding): 1-Jansher Khan (Pakistan) beat Anthony Hill (Australia) 15-7 17-15 14-15 15-8 2-Rodney Eyles (Australia) beat 4-Peter Nicol (Scotland) 15-10 8-15 15-10 15-4 6484 !GCAT !GSPO Matches scheduled for the featured courts Sunday at the U.S. Open tennis championships at the National Tennis Centre (prefix denotes seeding): Stadium (starting at 11 a.m., 1500 gmt) Stefan Edberg (Sweden) v Paul Haarhuis (Netherlands) 2-Monica Seles (U.S.) v Sandrine Testud (France) 1-Pete Sampras (U.S.) v Alexander Volkov (Russia) Grandstand 4-Conchita Martinez (Spain) v Asa Carlsson (Sweden) 4-Goran Ivanisevic (Croatia) v Hendrik Dreekmann (Germany) 16-Cedric Pioline (France) v Mark Philippoussis (Australia) Amanda Coetzer (South Africa) v Lisa Raymond (U.S.) Stadium evening session (starting 7:30 p.m., 2330 g) 8-Lindsay Davenport (U.S.) v Linda Wild (U.S.) 12-Todd Martin (U.S.) v Tim Henman (Britain) 6485 !GCAT !GSPO Michael Chang put tennis's biggest heart on display yet again at the U.S. Open on Saturday by playing with a never-say-die desire that is his most potent weapon. The second-seeded Chang turned back the spirited challenge of unseeded Vince Spadea, who served for the match at 5-4 in the fourth set only to be broken at love. Chang survived 6-4 5-7 2-6 7-5 6-3 to reach the fourth round. "A match as tough as today's is just not over until that last point is hit," Chang said of the three hour, 50 minute epic. "Vince knows that I'm not going to give it to him. If he's able to come out and hit great shots and beat me, then he's too good." For nearly four sets, the 22-year-old Spadea was too good, but Chang never surrendered. "If I'm down in a match I don't count myself out. I think that's very important for me. If I count myself out mentally, I'm going to lose for sure," said Chang, who won 12 of the last 14 points in the fourth set to force a decisive fifth set. "For me it's just going out and not worrying about the situation, not being absorbed by it," Chang said of his mindset in the final games of the fourth set. "It's just going out and playing each point, because you know points turn into games, games turn into sets, sets turn into matches." More often than not, that philosophy has turned Chang into a winner. In five-set matches Chang has a career record of 18-8. "He is going to make you work for every ball," said Spadea. "He's going to make you hit the shots at 6-6 and 5-5 that you hit at 1-0, when you're feeling a little bit different emotionally." The 24-year-old Chang says he gets his will to win from his mother. "I think I probably get it more from my mom that anybody else because my mom is an incredibly competitive person," Chang said of his mother Betty, who regularly sits at courtside for his big matches. "She's just one never to give up. If you tell her she can't do it, she'll go and try, try till she proves you wrong. In many ways, that's the way I am. "You have to give yourself the hope of coming back." 6486 !GCAT !GSPO Jesper Parnevik of Sweden fired a course record-tying eight-under-par 63 Saturday to take a one-shot lead into the final round of the $1.2 million Greater Milwaukee Open. Parnevik, who is seeking his first PGA Tour victory, moved to 19-under 194 for the tournament. Parnevik tied the 18-hole record set by Loren Roberts in 1994 at the Brown Deer Park Golf Course and also equalled Saturday by Greg Kraft. Nolan Henke, who led by two strokes entering the third round, carded a four-under 67 and was one stroke back at 18-under 195. He is striving for his fourth career PGA Tour victory and first since the 1993 BellSouth Classic. Tiger Woods, who made the cut in his first tournament as a professional, shot a two-over-par 73 and was four under for the tournament. The 20-year-old Woods, who turned professional Tuesday after winning an unprecedented third successive U.S. Amateur Championship, struggled on the front nine, bogeying the first and seventh holes and double-bogeying the par-four, 359-yard ninth hole. After bogeying the 10th hole to move to four-over for the round, he rallied for birdies on 15 and 18. After Parnevik started off his round by parring the first hole and bogeying the second, the Swede birdied six of the next seven holes. Parnevik continued to storm through the course, birdying three holes on the back nine, including two from 12 feet out on the 15th and 17th holes. "I can't remember when I've putted this well," said Parnevik. "I was disappointed when a 12-footer didn't go in. "My game feels very good. I've been fading my driver but today whenever I set up for a fade it went straight. Whenever everyone's making birdies, you never want to be even par." Henke had a bogey-free round and birdied four holes, including a 45-footer on the par-three 215-yard seventh hole and one from 12 feet out on the 12th hole. "I didn't hit it very well today," said Henke. "Jasper blew right by me. Once he did, I knew I had to make birdies just to keep up. I made some really good pars. I basically picked up where I left off yesterday afternoon. "Right now, I can't put my finger on what's wrong." Bob Estes shot a 67 for sole possession of third place at 15-under. Steve Stricker, who tied for second at last week's World Series of Golf, and Stuart Appleby were both five shots off the lead at 14 under. Duffy Waldorf, who also tied for second at the World Series of Golf, carded a 70 to lead a group of six golfers at 13 under, including Kraft. The top four on the PGA Tour money list all skipped the tournament. 6487 !GCAT !GSPO Michael Chang, following the precarious path of fellow-favourites Pete Sampras and Andre Agassi, survived his own cliffhanger episode at the U.S. Open on Saturday to win a five-set thriller on Stadium Court. The second-seeded Chang was down two sets to one, with fellow-American Vince Spadea serving for the match at 5-4 when he shook himself free of self-doubts and won 11 points in a row as he pounded his way to a 6-4 5-7 2-6 7-5 6-3 victory. Chang's close call mirrored the harrowing experiences of two of the field's other most prominent contenders. Top-seeded defending champion Sampras had to go five draining sets to beat stubborn Czech Jiri Novak on Friday. The day before, Agassi plunged to a 3-6 0-4 deficit before climbing back to beat Indian Leander Paes. "I was definitely in a hole down there," Chang said about the onslaught he faced from Spadea, who challenged him from the net and cracked blistering winners from both flanks in a gutsy performance under a blazing sun at the National Tennis Centre. "I just tried to do my best. I was really tired in the fifth set. I just tried to hang tough." Very few players can hang as tough as Chang, who took a 16-2 summer hardcourt record into the Open. Both players were obviously exhausted by the end of the three hour 50 minute struggle but the indominatable Chang proved fitter as he improved his career record in five-set matches to 18-8. "He was moving well and I was a little tight," said the 22-year-old Spadea, ranked 69. "I was obviously getting a little fatigued out there." "I was trying to serve the match out and that's difficult to do even if you're playing the match out in Central Park," he said. "He makes you work for each ball." Also joining Chang into the fourth round were 13th seed Thomas Enqvist of Sweden and France's Arnaud Boetsch. Enqvist advanced with a 6-4 6-4 6-2 victory over Pablo Campana of Ecuador, while Boetsch reached the round of 16 by beating American Jeff Tarango 6-4 6-2 7-6 (8-6). Steffi Graf led an orderly procession of women's seeds into the fourth round. The top-seeded defender rallied from a sluggish start to beat Natasha Zvereva 6-4 6-2 for her 16th victory without a loss to the Belarussian. Seventh seed Jana Novotna of the Czech Republic beat American Tami Whitlinger-Jones 6-2 6-3, 16th-seeded teenager Martina Hingis of Switzerland defeated Japan's Naoko Kijimuta 6- 2 6-2 and number 17 Karina Habsudova of Slovakia prevailed 6-2 6-3 over Austrian Sandra Dopfer. Other advancers included Austrian Judith Wiesner, the first-round conqueror of fifth seed Iva Majoli, and Italy's Rita Grande. Spadea, a winner of six national junior titles by the age of 14, looked invincible for a long stretch after dropping the first set to Chang, who helped his opponent look good with a pitifully poor 35 percent success rate on his first serves. Despite his grace and grit on court in pulling off the courageous comeback, Chang was hurting after the match. He did not sit down during his post-match interview for fear of cramping. "To be honest, I don't really know how I was able to win today's match," he said. "He was covering the net like he was Stefan Edberg. He was playing great all-court tennis." Spadea reached the fourth round of the Open last year with a victory over this year's French Open champion, Russian Yevgeny Kafelnikov, and looked at first as if he would be making an unlikely return visit. He broke Chang in the opening game of the fourth set and nursed the advantage until the second seed leveled it at 4-4. But Spadea broke right back as he pressured Chang's second serve and grabbed a 5-4 lead to serve for the match. That is when Chang turned it up another notch. Whipping deep groundstroke drives from both sides, he broke at love and then held at love to seize a 6-5 lead. Spadea netted an ill-advised drop shot try from the baseline to lose his serve and the set in the next game. The final set was also a struggle. Chang broke in the second game but Spadea matched him in the next. The second seed finally took his winning edge with another service break in the sixth game. "I was in control of the match, it was my match to win," said a sombre Spadea. "I was the better player in the third and the fourth sets. "But in a Grand Slam it's three out of five sets." : Later, Agassi took a calmer route to the fourth round with a 6-4 6-2 7-6 (9-7) win over Dutchman Jan Siemerink. David Wheaton, a one-time Wimbledon semifinalist, won a third-round match against fellow Stanford University standout Alex O'Brien. O'Brien, a former collegiate champion who won his first pro title two weeks ago in New Haven, fell 1-6 7-5 6-1 6-2. The day's most scintillating finish belonged to Spain's Javier Sanchez, who saved four consecutive match points from 2-6 in the fifth-set tiebreaker, winning the last six points in all to beat Australian Jason Stoltenberg 6-4 3-6 4-6 6-2 7-6. 6488 !GCAT !GDIP !GSPO This year's Fed Cup finalists -- defending champion Spain and the United States -- will hit the road to open the 1997 women's international team competition, based on the draw conducted Saturday at the U.S. Open. Spain travels to Belgium, while the U.S. team heads to the Netherlands for first-round matches March 1-2. The other two first-round ties will pit hosts Germany against the Czech Republic and visiting France against Japan. The semifinals are July 19-20, and the final September 27- 28. Life on the road this year did not slow the Americans, who will try to avenge their 3-2 defeat in the final last year when they host Spain on September 28-29 in Atlantic City. "Last year we stood on the court after we had lost and we put out hands together and made it our committment to bring back the Cup," U.S. captain Billie Jean King said at the draw. "That is our sole goal." The United States edged Austria in Salzburg 3-2 in the opening round in April, and then blanked Japan 5-0 in Nagoya last month in the semifinals. The victory against Japan marked the Fed Cup debut of Monica Seles, who became a naturalised U.S. citizen in 1994. Seles easily won both her singles matches and King is counting on the co-world number one to lead the team again. "I told Monica we need her if we want to win," King said. Seles's sore left shoulder and a wrist injury to Fed Cup veteran Mary Joe Fernandez have forced King to take a wait and see attitude regarding her squad for the best-of-five match. Fernandez was forced to withdraw from the U.S. Open. "We will wait until the last minute so we check with everybody and their injuries,"said King. "What we like would be Seles, (Olympic champion Lindsay) Davenport and Mary Joe Fernandez." If she can get that threesome together, King will feel good about her chances against the Spain's formidable duo of Arantxa Sanchez Vicario and Conchita Martinez. "To be a great coach you have to have the right horses and I got the right horses," said King. 6489 !GCAT !GSPO Steffi Graf used a disputed line call to help get herself in gear Saturday and then roared off to a 6-4 6-2 victory to reach the round of 16 at the U.S. Open. The top-seeded defending champion carried a 15-0 career record into her third-round match against Natasha Zvereva but was broken by the Belarussian in the opening game and struggled to get untracked under the bright sun on Stadium Court. Umpire Andreas Egli of Switzerland did the top-ranked German a favour by overruling a linesman and calling a Graf shot out that gave Zevereva, serving at 4-3, a 40-15 lead in the eighth game. "It probably helped get me more aggressive," said the usually impassive Graf, who was visibly angered by the ruling. "The umpire said he saw a clear space, yet it was on the opposite side of the court," said Graf. "I was close to saying, 'You should be happy you have a clear space between me'." Graf took her frustration out on Zvereva. She hit a backhand crosscourt winner to save one game point, got to deuce and then unleashed a forehand crosscourt winner to break serve. After holding serve at 30, Graf won the first three points off Zvereva's serve in the 10th game for triple set point and claimed the set two points later on a double fault. "She can play great games and then have lapses in between," Graf said. "So you know you're going to get your chances." Now in full stride, Graf won the first four games of the second set on her way to a 58-minute victory and a berth in the fourth round, where she was joined by two other fast finishers. Martina Hingis of Switzerland, the 16th seed, matched Graf minute-for-minute in beating Japan's Naoko Kijimuta 6-2 6-2, while Austrian Judith Wiesner needed only 49 minutes to beat Czech Petra Langrova. Graf faces the winner of the night match between 14th seed Barbara Paulus and 15-year-old Russian Anna Kournikova, with Hingis likely to meet third seed Arantxa Sanchez Vicario, who plays Russian Elena Likhovtseva on the grandstand. Wiesner, who upset fifth seed Iva Majoli in the opening round, has her fourth-round opponent -- Rita Grande of Italy, a 7-5 6-1 winner over Els Callens of Belgium. On the men's side, 13th seed Thomas Enqvist of Sweden became the first player into the fourth round by storming past Pablo Campana of Ecuador 6-4 6-4 6-2. 6490 !GCAT !GSPO Results from the U.S. Open Tennis Championships at the National Tennis Centre on Saturday (prefix number denotes seeding): Women's singles, third round 1 - Steffi Graf (Germany) beat Natasha Zvereva (Belarus) 6-4 6-2 16-Martina Hingis (Switzerland) beat Naoko Kijimuta (Japan) 6-2 6-2 Judith Wiesner (Austria) beat Petra Langrova (Czech Republic) 6 -2 6-0 Men's singles, third round 13-Thomas Enqvist (Sweden) beat Pablo Campana (Ecuador) 6-4 6-4 6-2 6491 !GCAT !GSPO Draw for the women's 1997 Fed Cup team tennis championships, as conducted at the U.S. Open on Saturday: World Group I, first round (March 1-2) United States at Netherlands Czech Republic at Germany France at Japan Spain at Belgium (semifinals July 19-20, and finals September 27-28) World Group II, first round (March 1-2) Austria at Croatia Switzerland at Slovak Republic Argentina at South Korea Australia at South Africa 6492 !GCAT !GSPO Forward Joe-Max Moore scored twice and Eric Wynalda, the U.S. national team's leading scorer, added another goal as the United States beat El Salvador 3-1 in an international soccer friendly on Friday. Moore scored his 13th and 14th international scores and Wynalda his 25th. Moore opened the scoring in the third minute after collecting a John Harkes through ball at the top of the penalty area. He dribbled past one defender before slamming a 12-metres shot past goalkeeper Alvaro Sanchez into the low left corner. He closed the scoring in the 88th minute, converting a penalty kick after Frankie Hejduk was dragged down in the penalty box. El Salvador tied the match at 1-1 in the 59th minute when Luis Lazo ran onto a bouncing ball in the left side of the penalty box and bent a hard shot around U.S. goalkeeper Brad Friedel into the upper right corner. Wynalda tallied the game winner just two minutes later. Cobi Jones's cross from the right side was flicked on by Brian McBride and Wynalda's sliding volley put the Americans ahead to stay. The United States will open the first round of World Cup qualifying on November 3 in Washington, D.C., against Guatemala. The Americans will play six games in seven weeks in the first raund, home and away against Guatemala, Trinidad & Tobago and Costa Rica. Lineups: U.S. - Brad Friedel, Jeff Agoos, Alexi Lalas, Paul Caligiuri, John Harkes (Mike Sorber 64th), Joe-Max Moore, Tab Ramos, Jason Kreis (Roy Lassiter 46th), Cobi Jones (Miles Joseph 89th), David Wagner (Brian McBride 46th), Eric Wynalda (Frankioe Hejduk 64th) El Salvador - Alvaro Sanchez, William Osorio, Leonel Batres, Jorge Rodriguez, Carlos Castro, Jorge Rivera (William Renderos 82nd), Raul Diaz Arce (Marlon Menjivar 70th), Ronald Cerritos, Mauricio Cienfuegos (Marlon Medrando 65th), Luis Lazo (Nelson Quintanilla 86th), Wilfredo Sanabria 6493 !GCAT !GSPO The United States beat El Salvador 3-1 (halftime 1-0) in an international soccer friendly on Friday. Scorers: U.S. - Joe-Max Moore (3rd minute, 88th on penalty kick), Eric Wynalda (61st) El Salvador - Luis Lazo (61st) Attendance - 18,661 6494 !GCAT !GSPO Major League Baseball standings after games played on Friday (tabulate under won, lost, winning percentage and games behind): AMERICAN LEAGUE EASTERN DIVISION W L PCT GB NEW YORK 75 59 .560 - BALTIMORE 71 63 .530 4 BOSTON 69 66 .511 6 1/2 TORONTO 63 72 .467 12 1/2 DETROIT 49 86 .363 26 1/2 CENTRAL DIVISION CLEVELAND 80 54 .597 - CHICAGO 72 64 .529 9 MINNESOTA 67 68 .496 13 1/2 MILWAUKEE 65 71 .478 16 KANSAS CITY 61 75 .449 20 WESTERN DIVISION TEXAS 76 58 .567 - SEATTLE 70 64 .522 6 OAKLAND 65 72 .474 12 1/2 CALIFORNIA 62 73 .459 14 1/2 SATURDAY, AUGUST 31 SCHEDULE KANSAS CITY AT DETROIT BALTIMORE AT SEATTLE CHICAGO AT TORONTO MINNESOTA AT MILWAUKEE CLEVELAND AT TEXAS BOSTON AT OAKLAND NEW YORK AT CALIFORNIA NATIONAL LEAGUE EASTERN DIVISION W L PCT GB ATLANTA 84 50 .627 - MONTREAL 71 62 .534 12 1/2 FLORIDA 65 70 .481 19 1/2 NEW YORK 59 76 .437 25 1/2 PHILADELPHIA 54 81 .400 30 1/2 CENTRAL DIVISION HOUSTON 73 63 .537 - ST LOUIS 70 65 .519 2 1/2 CHICAGO 66 67 .496 5 1/2 CINCINNATI 66 68 .493 6 PITTSBURGH 56 78 .418 16 WESTERN DIVISION SAN DIEGO 76 60 .559 - LOS ANGELES 73 61 .545 2 COLORADO 70 66 .515 6 SAN FRANCISCO 58 74 .439 16 SATURDAY, AUGUST 31 SCHEDULE ATLANTA AT CHICAGO HOUSTON AT PITTSBURGH SAN FRANCISCO AT NEW YORK FLORIDA AT CINCINNATI LOS ANGELES AT PHILADELPHIA SAN DIEGO AT MONTREAL COLORADO AT ST LOUIS 6495 !GCAT !GSPO Results of Major League Baseball games played on Friday (home team in CAPS): American League DETROIT 4 Kansas City 0 Chicago 11 TORONTO 2 MILWAUKEE 5 Minnesota 4 (in 12) TEXAS 5 Cleveland 3 New York 6 CALIFORNIA 2 OAKLAND 7 Boston 0 Baltimore 5 SEATTLE 2 National League CHICAGO 3 Atlanta 2 (1st game) Atlanta 6 CHICAGO 5 (2nd game) Florida 3 CINCINNATI 1 San Diego 6 MONTREAL 0 Los Angeles 7 PHILADELPHIA 6 (in 12) Houston 10 PITTSBURGH 0 San Francisco 6 NEW YORK 4 ST LOUIS 7 Colorado 4 6496 !GCAT !GSPO Major league ERA leader Kevin Brown threw an eight-hitter and Devon White's RBI double snapped a fifth-inning tie as the Florida Marlins beat the Cincinnati Reds 3-1 for their seventh straight win Friday. Brown (14-10) tied Todd Stottlemyre of the Cardinals for the National League lead with his fifth complete game and lowered his major league-leading earned run average from 1.96 to 1.92. He struck out eight and did not walk a batter. Brown threw 119 pitches and won for the third time in as many starts against the Reds this season. "Bolesy (Florida manager John Boles) told me yesterday, 'You have to go nine tomorrow,'" Brown said. "In the early innings, I was struggling, I was just trying to make it from pitch to pitch. I gave up a lot of hits in the early innings and I wasn't thinking about the seventh, eighth or ninth. I wasn't satisfied with any of my pitches and I did a better job of moving the ball around in the later innings." "He has a devastating sinker," observed Reds manager Ray Knight. "The guys say it moved more than everyone in the league. I remember Nolan Ryan saying in '91 or '92 that he was the best young pitcher coming around in a long time and he saw (Tom) Seaver and (Jerry) Koosman when they were starting." In Philadelphia, Delino DeShields's triple in the top of the 12th off Jeff Parrett (2-3) scored Chad Curtis and lifted the Los Angeles Dodgers to a 7-6 victory over the Phillies. Los Angeles won for the seventh time in eight games. Darren Dreifort (1-1) picked up the win after allowing a hit and a walk over 2 1/3 scoreless innings. Todd Worrell worked the 12th to earn his league-leading 37th save. The Phillies have dropped five of their last six overall, and nine of 11 at home. Billy Ashley belted a three-run homer for Los Angeles. In Chicago, the Braves and Cubs split a doubleheader. In the first game, Ryne Sandberg snapped an eighth-inning tie with an infield single and Kevin Foster (6-2) outdueled Atlanta's Tom Glavine (13-8) for his third straight win, 3-2. Foster, a .333 hitter, helped his own cause in the second with a two-run single. The Braves took the second game when Chipper Jones singled home the tying run in the top of the ninth and Andruw Jones took advantage of a poor throw to score the go-ahead run on a sacrifice fly for a 6-5 victory. Cubs shortstop Jose Hernandez committed three of Chicago's four errors. Mike Mordecai singled, doubled and homered for Atlanta, which has won 14 of its last 19 games and has the best record in the majors, 84-50. In Montreal, Scott Sanders allowed one hit over eight innings and Wally Joyner hit a two-run single in a four-run third as the San Diego Padres blanked the Expos 6-0 for their sixth straight win. Sanders (8-4) struck out 10 and walked three to win his fourth straight. He allowed a leadoff double to David Segui in the second, and won for the seventh time in eight decisions. The right-hander retired 14 batters in a row from the second inning through the seventh. Mike Oquist allowed one Montreal hit in the ninth. Montreal lost for the ninth time in 14 games. In New York, Marvin Benard's two-run homer snapped a tie and Shawn Estes came one out away from his first complete game as the San Francisco Giants beat the Mets 6-4. Benard, hitting .467 (14-for-30) against the Mets this season, hit his first pitch from Pete Harnisch (8-10) in the seventh over the right-field fence to put the Giants up 4-2. Estes (3-4) was lifted for closer Rod Beck after yielding a single with two out in the ninth. Beck allowed a two-run double to Alvaro Espinoza, who collected a career-high four RBI, but struck out Brent Mayne for his 31st save. The loss was the Mets' eighth straight, their longest slide since September 1993, and dropped them to 0-4 under new manager Bobby Valentine. In St Louis, Tom Pagnozzi had three hits and three RBI and Alan Benes scattered six hits over six-plus innings as the Cardinals beat the Colorado Rockies 7-4. Benes (12-8) allowed three runs, walked three and struck out three for the win. St Louis defeated Colorado for just the second time in 12 meetings dating back to last season. Ray Lankford went 4-for-5 with a pair of doubles for the Cardinals, who won for just the third time in 11 games. Eric Anthony hit a pair of solo homers for the Rockies. In Pittsburgh, Sean Berry tied a career high with six RBI and Donne Wall fired a seven-hitter for his first major-league shutout as the Houston Astros routed the Pirates 10-0. It was the third time Berry had six RBI in one game. Wall (9-4) struck out four and walked none to post his second complete game of the season and third straight win. 6497 !GCAT !GSPO Refusing to go quietly in the night, Stefan Edberg extended his stay at his 14th and last U.S. Open when Bernd Karbacher, trailing and hurting, quit in the fourth set of their second-round match Friday. The 30-year-old Edberg, a former two-time Open champion, had wrestled control of the match away from Karbacher when the German, hampered by a left hamstring injury, decided he couldn't continue under the stadium lights at the National Tennis Centre. "A win is a win. I'll take it," Edberg, who has announced that this will be his last Grand Slam event, said of the 3-6 6-3 6-3 1-0 victory. Ironically, Karbacher two years ago ended Ivan Lendl's Grand Slam career here when the former champion had to retire in the middle of their first-round match. After seeing the trainer come out early in the third set, Edberg was not surprised by Karbacher's decision not to go on. "I knew he had problems with something," Edberg said. "I really wasn't surprised." Edberg had his own problems early in the match as the Swede battled to acclimate himself to the nighttime conditions while Karbacher was ripping passing shots and blasting serves past him. "I didn't really feel good to begin with, I had problems finding the timing on the ball, seeing the ball," said Edberg, who upset Wimbledon champion and fifth-seeded Richard Krajicek in the first round. "This was one of these matches where I didn't play up to my standard. I had to fight hard." Edberg's tenacity paid off in the second set. Edberg lost his own serve twice, but he rallied for three breaks of his own, the last to wrap up the set. "That's where the match sort of changed," said Edberg. "I think once I got that second set, I felt a lot better about my game." Edberg is starting to feel pretty good about postponing his swan song a lot longer. "It doesn't look all that bad," Edberg said of his path through the draw starting next with a match against Krajicek's Dutch countryman Paul Haarhuis. However, the 1991 and 1992 champion is not ready to start making plans to be in next week's final. "I'm always being realistic," said Edberg. "Like I said many times, I think it's a very little chance, but nothing is impossible. If I play great tennis, that could take me a long way. "A lot of things can happen, like tonight." 6498 !GCAT !GSPO Team Canada left wing Brendan Shanahan was suspended Friday for one game for a high-sticking incident in Thursday's World Cup victory over Russia. Shanahan, of the Hartford Whalers, will sit out Saturday's game against the United States at Philadelphia. He received a minor penalty early in the second period Thursday after he struck Russia's Alexander Semak with a two-handed slash. Semak suffered a broken cheekbone. "While Mr Shanahan was quite apologetic about the incident, a player is always responsible for his stick," said National Hockey League senior vice president and director of operations Brian Burke. NHL rules are being used during the World Cup. Shanahan scored a goal for Canada, which leads the North American pool with a 1-0 record. 6499 !GCAT !GSPO Following her own advice, second-seeded Monica Seles didn't waste any time in beating Dally Randriantefy of Madagascar to march into the fourth round of the U.S. Open on Friday. "You don't want to play around with night matches. You just want to finish and go home," Seles said after winning the first 11 games on her way to a 6-0 6-2 win under the National Tennis Centre stadium lights. In fact, Seles has spent very little time this week actually on the court after losing just one game in her opening-round match and then winning her second-round match on Wednesday without hitting a single ball -- Laurence Courtois couldn't play due to an knee injury. Seles welcomed having the extra days off to rest her ailing left shoulder. "You never want to win a match like that, but I just think of it as a positive way. I'll save my shoulder, one less match to play," said Seles, who faces the prospect of surgery after playing for the United States in next month's Fed Cup final against Spain. Seles looked fit and in good form through the 57-minute win that filled out the bottom half of the fourth round women's pairings. Seles, who is just one of three remaining seeds in that half, will next play Sandrine Testud of France. Also getting through were eighth-seeded American Lindsay Davenport, the Olympic gold medallist, and fourth-seeded Spaniard Conchita Martinez. Davenport, winner of her last two tournaments, beat Anne-Gaelle Sidot of France 6-0 6-3 for her 14th consecutive match win. Martinez beat veteran Czech Helena Sukova 6-4 6-3. But crowd favourite Gabriela Sabatini, the 15th seed from Argentina, did not make it to her appointed spot in the final 16. The 1990 Open champion, who missed both the French Open and Wimbledon this year with a stomach injury, fell to unheralded Swede Asa Carlsson 7-5 3-6 6-2. "I guess that I have to accept that I lost," said Sabatini. "It's going to be a little hard. This tournament is a big tournament for me. This is where I really wanted to do well." Seles is also anxious to do well at the Open after having suffered unexpected early-round setbacks at the French Open and Wimbledon. "I definitely want to do well in the Grand Slams," said Seles, who had opened the year by winning the Australian Open for the fourth time. "I think that at the end of my career those are the ones that I like to win, do the best I could in all of them." But in her first full year back playing since her emotional return to competition last summer when she reached the U.S. Open final, the 22-year-old Seles has found that the winning hasn't come as easy as when she took seven of eight majors beginning with the 1991 Australian Open. "I mean, it's hard, the expectations sometimes with me are so high. It's hard to live up to what I was before," Seles said of her 27-month layoff after being stabbed in the back during a match in Hamburg on April, 30, 1993. "It's going to be a matter of putting in those hours, that I used to put in before," said Seles. "I feel I'm slowly coming back to where I should be, and hopefully will be." This time Seles played as expected, rattling off 23 winners with her double-fisted groundstrokes to only six for her overmatched foe from Madagascar. But the 104th ranked Randriantefy compensated for her lack of firepower with her fighting spirit as she never surrendered and won the respect of Seles, who joined in the applause for the 19-year-old as she left the court. "A lot of players at 6-0, 5-0, they just stop," Seles said. "She was running, almost played better. She figured, I have nothing to lose, match is almost finished, let me give it everything I have'." 6500 !GCAT !GSPO Nolan Henke shot a five-under-par 66 Friday (corrects day from Thursday) to maintain a two-stroke lead after the second round of the $1.2 million Greater Milwaukee Open, and Tiger Woods made the cut in his first tournament as a pro. Duffy Waldorf, who tied for second at last week's World Series of Golf, shot his second 65 to climb into sole possession of second place at 12-under 130. Mike Heinen, Loren Roberts, Jesper Parnevik of Sweden and Bob Estes were tied in third place at 11-under 131, three shots behind Henke. Heinen fired a 63, Roberts shot 65, Parnevik had a 66 and Estes posted a 67. Henke, who has three career PGA Tour victories but none since the 1993 BellSouth Classic, followed his opening-round 62 with an eagle, four birdies and a bogey. His 14-under 128 fell three strokes short of the 36-hole tournament record. The 20-year-old Woods shot a two-under 69 for a two-round total of six-under 136. Woods, who turned professional Tuesday after winning an unprecedented third successive Amateur Championship, collected four birdies with two bogeys. He played the back nine first and closed with a birdie on the par-four ninth hole to move to six under. Defending champion Scott Hoch shot a four-under 67, but dropped seven shots behind at seven-under 135. The top four on the PGA Tour money list -- Phil Mickelson, Mark Brooks, Tom Lehman and Mark O'Meara -- all skipped this event after last week's World Series of Golf, won by Mickelson. 6501 !GCAT !GSPO The Netherlands needed a last minute penalty, converted by substitute Jean Paul van Gastel, to salvage a 2-2 draw against World Cup holders Brazil in a soccer friendly on Saturday. The Dutch, captained for the first time by Frank de Boer, had the best of the early play, but it was Brazil who broke the deadlock after 14 minutes through Giovanni. Finding himself unmarked on the edge of the six-yard area, the Barcelona striker slotted the ball past Edwin van der Sar's outstretched right hand. Both teams had further chances in the first half but failed to convert them. The game's tempo picked up in the second half with Bergkamp looking increasingly dangerous around the box. In the 52nd minute the Arsenal striker broke down the right wing and pulled the ball back for Ronald de Boer, who fired a low hard shot into the left-hand corner of the goal. But the Dutch supporters, who only half-filled Ajax Amsterdam's big new stadium, had just three minutes in which to celebrate before Marcello Goncalves put the Brazilians ahead again with another close range goal. The Brazilians looked on course for victory until Bergkamp was pulled down just inside the penalty area with seconds remaining. After the Brazilian players' protests died down, second-half substitute van Gastel of Feyenoord stepped up and gave 'keeper Carlos Germano no chance with the spot kick. 6502 !GCAT !GSPO Britain's Naseem Hamed retained his WBO featherweight title on Saturday when Mexico's Manuel Medina was retired by his corner at the end of the 11th round. 6503 !GCAT !GSPO Austria dominated their World Cup group four qualifier against Scotland on Saturday with wave after wave of attacks but were unable to penetrate the visitors' defence and had to settle for a goalless draw. Scotland, who thrashed Belarus 5-1 in their opening group four match, were unable to repeat their performance. Austria's best chance came in the 63rd minute with Stephan Marasek of SC Freiburg taking advantage of a scramble in the Scottish penalty area but his shot narrowly passing the left-hand post. They also went close a minute before the interval when a promising attack saw the ball fall to Markus Schopp but he hit his shot wide. Everton's Duncan Ferguson went close for Scotland in the 65th minute when he forced Austrian goalkeeper Michael Konsel to a diving save. Two Scotland players were shown yellow cards, captain Gary McAllister for bringing down Andreas Heraf and Ferguson for arguing against the referee's decision. "The result is acceptable," Scottish coach Craig Brown told reporters. "We'd hoped not to lose and we tried not to play for a draw but the Austrian defence was simply too good." SK Rapid's Dietmar Kuehbauer, who gave an impressive performance, said the team started off well but let the game slip after the first 30 minutes. "Somehow it seemed there were less than 11 players on the pitch. We have lost two points. The Scots are not really a great team and we should have won," he said. Austrian coach Herbert Prohaska said his team had displayed great fighting spirit but sometimes lacked ideas. Teams: Austria: Michael Konsel, Markus Schopp, Peter Schoettel, Anton Pfeffer, Wolfgang Feiersinger, Stephan Marasek, Dieter Ramusch (Andreas Ogris 77th), Dietmar Kuehbauer, Anton Polster ((Herfried Sabitzer 68th), Andreas Herzog, Andreas Heraf. Scotland: Andrew Goram, Craig Burley, Thomas Boyd, Colin Calderwood, Colin Hendry, Thomas McKinley, Duncan Ferguson, Stuart McCall, Alistair McCoist (Gordon Durie 75th), Gary McAllister, John Collins. 6504 !GCAT !GSPO American Tom Johnson successfully defended his IBF featherweight title when he earned a unanimous points decision over Venezuela's Ramon Guzman on Saturday. 6505 !GCAT !GSPO Euro 96 absentee Nicolas Ouedec and Youri Djorkaeff scored the goals as 1998 World Cup hosts France beat Mexico 2-0 in a friendly international on Saturday. The victory extended to 29 matches France's unbeaten run under coach Aime Jacquet, their Euro 96 semifinal elimination having come in a penalty shoot-out, but was marred by the sending-off of Chelsea central defender Franck Leboeuf. Leboeuf was dismissed two minutes from time for a second bookable offence, fouling Mexican substitute Ricardo Pelaez who minutes earlier had also been shown the yellow card for pushing the Chelsea defender in the back. Both goals came early in the second half after France had surprised the Mexicans with three half-time substitutions. After a sterile first half, France injected more sting in midfield with the introduction of Juventus's Zinedine Zidane. This allowed Djorkaeff to play further up and his cross from the right fell for Ouedec, who has joined Espanyol of Barcelona from Nantes since missing the European championship finals through injury, to score after a mistake by midfielder Joaquin del Olmo. Within four minutes Ouedec was returning the compliment for Djorkaeff, playing a one-two with the Internazionale Milan forward down the middle to set him up for a cross shot past diving goalkeeper Osvaldo Sanchez. Jacquet, beginning the 22-month countdown to France's hosting of the World Cup finals, said: "We have an identity (as a team) which we are going to work on." Teams: France - 1-Bernard Lama; 2-Lilian Thuram (14-Sabri Lamouchi 87th), 5-Laurent Blanc, 8-Marcel Desailly (12-Franck Leboeuf 46th), 3-Bixente Lizarazu; 4-Christian Karembeu, 7-Didier Deschamps, 10-Youri Djorkaeff, 6-Reynald Pedros (13-Robert Pires 46th); 9-Nicolas Ouedec (17-Florian Maurice 64th), 11-Patrice Loko (15-Zinedine Zidane 46th) Mexico - 1-Osvaldo Sanchez (12-Alfonso Rios 78th); 13-Pavel Pardo, 2-Claudio Suarez, 5-Duilio Davino (Becerril 46th), 4-German Villa (16-Gomez 86th); 14-Joaquin del Olmo, 6-Raul Rodrigo Lara (11-Cuauhtemoc Blanco 65th), 8-Alberto Garcia Aspe, 7-Ramon Ramirez (15-Jesus Arellano 71st); 18-Enrique Alfaro (17-Francisco Palencia 78th), 10-Luis Garcia (19-Ricardo Pelaez 69th). 6506 !GCAT !GSPO France beat Mexico 2-0 (halftime 0-0) in a friendly soccer international on Saturday. Scorers: Nicolas Ouedec (49th minute), Youri Djorkaeff (53rd) Attendance: 18,000 6507 !GCAT !GSPO Belgium kicked off their 1998 World Cup campaign with a hard-fought 2-1 victory over 10-man Turkey in a tense match marred by Turkish crowd trouble shortly after the break. Turkish fans, upset at their team's 2-0 first-half deficit, ripped apart dozens of plastic seats and threw them over the fence. Riot police took 10 minutes to restore order. The police were given an unexpected hand by second-half substitute Sergen Yalcin who rekindled Turkish hopes in the 61st with a splendid half-volley which stunned Belgian goalkeeper Filip De Wilde. But Yalcin, who had come on just four minutes earlier, turned from hero to villain barely two minutes after his strike when he was sent off after spitting at an opponent and arguing with English referee David Elleray. Marc Degryse had opened the scoring for Belgium after 13 minutes, whacking a low 10-metre drive into the net after an incisive pass by defender Dirk Medved from the edge of the penalty area. Brazilian-born Luis Oliveira then gleefully slipped the ball past goalkeeper Rustu Recber from the right of the area to make it 2-0 seven minutes before the interval, Turkey's best first-half effort proving to be a vicious 30-metre shot by Ogun Temizkanoglu which De Wilde tipped over. The visitors, seeking to restore some pride after failing to score a single goal in Euro 96 in June, repeatedly ripped through the left side of the home defence but De Wilde was able to block several sharply-angled efforts. With only the group seven winners qualifying automatically for the 1998 finals in France, Belgium could not afford a slip-up at home and they frantically chased a decisive third goal. But they were almost upset 12 minutes from time when De Wilde fumbled a hard Arif Erdem shot and Orhan Cikirikci almost pounced on the loose ball. Belgium's best second-half effort came three minutes later when Degryse put the ball over the bar from close range with Recber beaten. Teams: Belgium - 1-Filip De Wilde, 2 - Bertrand Crasson, 3 - Dirk Medved, 4-Pascal Renier, 16-Geoffrey Claeys, 6-Gunther Schepens (15-Nico Van Kerckhoven, 81st), 10-Enzo Scifo, 7-Gert Verheyen (14-Frederic Peiremans, 62nd), 9-Marc Degryse, 8-Luc Nilis, 11- Luis Oliveira (18-Gilles De Bilde, 88th). Turkey - 1-Rustu Recber, 4-Hakan Unsal (14-Sergen Yalcin, 57th), 2-Recep Cetin, 3 - Ogun Temizkanoglu, 5-Alpay Ozalan, 7- Abdullah Ercan, 6-Tolunay Kafkas, 10-Oguz Cetin (13-Arif Erdem, 57th), 11-Tayfun Korkut, 9-Hakan Sukur, 8-Saffet Sancakli (17- Orhan Cikirikci, 76th). Belgian coach Wilfried Van Moer said he had not expected Turkey to be so strong and fast. "We started panicking a bit after the Turkish goal...we suffered," said Van Moer, who succeeded Paul Van Himst as coach in April. It was Belgium's first victory under Van Moer after two draws in friendlies against Russia and Italy. 6508 !GCAT !GSPO Summary of game played in the Spanish first division on Saturday: Deportivo Coruna 1 (Corentine Martins, 22nd minute) Real Madrid 1 (Roberto Carlos 79th). Halftime 1-0. Attendancce 35,000. 6509 !GCAT !GSPO Result of game played in the Spanish first division on Saturday: Deportivo Coruna 1 Real Madrid 1 6510 !GCAT !GSPO Belgium beat Turkey 2-1 (halftime 2-0) in a World Cup group seven soccer qualifier on Saturday: Scorers: Belgium - Marc Degryse (13th), Luis Oliveira (38th) Turkey - Sergen Yalcin (61st) Attendance: 30,000 6511 !GCAT !GSPO Austria and Scotland drew 0-0 in a World Cup soccer European group four qualifier on Saturday. Attendance: 29,500 6512 !GCAT !GSPO A powerful right hook followed by a straight left gave defending champion Nate Miller a seventh round knock-out win over fellow American James Heath in their WBA cruiserweight title bout on Saturday. Miller, who went into the contest with a record of 24 knock-out wins in 32 fights, took charge from the opening bell and had his opponent on the canvas inside 90 seconds when he landed a deft left-hook to the head. Heath did score with two brusing lefts to Miller's head in the third round but failed to put his opponent under any real pressure. Miller raised the pace of the contest at the start of the fifth round and, once he started to get his right-left combinations working for him, the fight was never likely to go the distance. 6513 !GCAT !GSPO The Netherlands drew 2-2 with Brazil (half-time 0-1) in a soccer friendly on Saturday. Scorers: Netherlands - Ronald de Boer (52nd minute), Van Gastel (90th, pen) Brazil - Giovanni (14th), Marcello Goncalves (55th) 6514 !GCAT !GSPO American Nate Miller successfully defended his WBA cruiserweight title when he knocked out compatriot James Heath in the seventh round of their bout on Saturday. 6515 !GCAT !GSPO The Richard Hannon-trained Miss Stamper stretched her unbeaten run to four races when she landed the Tattersalls Breeders Stakes, a valuable race for two-year-olds, at The Curragh on Saturday. Always prominent over the early stages of the six furlong (1,200 metres) race, the 3-1 joint-favourite was driven to the front by jockey David Harrison just over a furlong (200 metres) out and she triumphed by three lengths at the post. There was further joy for Hannon, who trains in Wiltshire in England, when 10-1 chance Pelham got up in the final strides to take third. It ensured a clean sweep for English trained horses with 16-1 chance Paddy Lad finishing second, two-and-a-half lengths ahead of Pelham. The race was worth $233,600 to the winner. 6516 !GCAT !GSPO Result of the Tattersalls Breeders Stakes, a race for two-year-olds run over six furlongs (1,200 metres) at The Curragh on Saturday: 1. Miss Stamper 3-1 joint-favourite (ridden by David Harrison) 2. Paddy Lad 16-1 (Peter Bloomfield) 3. Pelham 10-1 (Warren O'Connor) Distances: Three lengths, two-and-a-half lengths. Winner owned by John and Beryll Remblance and trained in Britain by Richard Hannon. Value to the winning owner: $233,600 6517 !GCAT !GSPO German international striker Juergen Klinsmann has said he will retire after the 1998 World Cup in France. "For myself, personally, I've planned things so that that will be the end of me," the 32-year-old national team captain was quoted as saying by the daily Sueddeutsche Zeitung on Saturday. Klinsmann said he believed Germany could win in France with the same nucleus of players which won the European championship in England this summer. "I think it can be done," he said, "especially as experience is becoming more and more valuable in sport. I think we can do it with the same body of players. That's what we're all aiming for." Coach Berti Vogts has called up a virtually identical squad for next week's friendly against Poland -- Germany's first match since Euro 96. 6518 !GCAT !GSPO Results of German Cup second round matches on Saturday: Karlsruhe 2 Hansa Rostock 0 Borussia Neunkirchen 1 St Pauli 3 Duisburg 1 Luebeck 0 (after extra time) 6519 !GCAT !GSPO Real Madrid have signed former Germany goalkeeper Bodo Illgner from Cologne for more than four million marks ($2.70 million), Cologne said on Saturday. Illgner was transferred minutes before the Spanish transfer deadline at midnight on Friday -- to the shock of Cologne's coach Peter Neururer. "I got a call in the middle of the night from Spain to say the deal was done. I thought it was just a joke," he said. "I didn't believe it until Bodo told me himself." Illgner's contract with Cologne ran until mid-1997 but club president Klaus Hartmann said it contained a clause allowing him to go abroad for an offer over four million marks. His contract with Real Madrid runs for three years. Illgner, capped 54 times, quit the national side after the 1994 World Cup. 6520 !GCAT !GDIP !GSPO Romania beat 2-1 (halftime 1-1) Lithuania in their European Under-21 soccer match on Friday. Scorers: Romania - Cosmin Contra (31st), Mihai Tararache (75th) Lithuania - Danius Gleveckas (13rd) Attendence: 200 6521 !G15 !G156 !GCAT !GENV Thousands of bikers from all over Europe rode past European Union buildings in Brussels on Saturday to protest against plans for tighter motorcycle laws. If passed, the new EU laws will limit engine noise and make it illegal to change manufacturers' specifications, outlawing the customisation favoured by bike enthusiasts. "They want to stop our machines from making sound," Belgian Patricia Godelieve, owner of a Honda Shadow, told Reuters, screaming above the thundering noise of fellow bikers' machines. "This is my bike, this is how I like it," said Belgian Alain Barbieux, a poodle peeking out of his leather jacket. His 1400 cc customised Suzuki has an extended front-fork and extra-wide handlebars, his helmet is a non-authorized model. Simon Milward, general secretary of the Federation of European Motorcyclists (one of the organisers of the demonstration) said that 15,000 bikers had attended the rally. Police estimated their number at 10,000. Traffic in central Brussels was disrupted all afternoon by the demonstration. Most of the bikers rode standard bikes, some had custom-made tanks or elongated front-forks, while a few two- or three- wheelers looked like they came straight out of a Mad Max-movie. "We are fighting for the right to wear what we want," said German biker Oliver Walter, straddling a standard 900 cc BMW and wearing a colourful racing suit. Walter said he was against plans to oblige all bikers to wear fluorescent clothes. Another biker from Austria atop a very un-standard-looking black machine with two wheels said he just wanted to get rid of "the damm helmet". "We do not want (the EU bureaucrats) to tell us how we move about," French Harley-Davidson rider Jean-Marie Mignolet said. A final decision on the new rules is expected in October after a meeting between the European Parliament and the EU's decision-making Council of Ministers. The European Commission argues that the measures are needed on environmental and health grounds. "We are not against motorcycles in principle," a spokeswoman said earlier. REUTER 6522 !GCAT Two teenage girls have been reported missing in Belgium after failing to return home from a shopping trip in the town of Liege, Belga news agency said early on Saturday. The agency said the girls, Rachel Legeard, 18, and Severine Potty, 19, had boarded a bus home on Thursday afternoon but apparently got off before their stop. There has been no word of them since, it said. Gendarmes in Liege posted the two as missing late on Friday and have set up a coordination centre to work on the case, Belga said. Belgium has been shaken by the uncovering of a paedophile ring linked to a number of missing children, two of whom were found dead. 6523 !GCAT !GDIP !GVIO An Iraqi opposition group in exile said on Saturday it had received reports that Iraqi forces were shelling and advancing on the Kurdish town of Arbil in northern Iraq. A London-based spokesman of the Iraqi National Congress (INC) said Iraqi artillery was shelling the city and Iraqi tanks had moved to within 10 km (six miles) of Arbil, administrative centre of the Kurdish rebel-controlled region of northern Iraq. "At 4.50 a.m. Iraq time (0050 GMT) Iraqi forces began an artillery attack on the outskirts of Arbil," the INC spokesman, who asked not to be named, told Reuters in a telephone call. "Tanks are advancing towards the city of Arbil and are about 10 km (six miles) from the centre. Kurdish forces are defending the city," the spokesman said, adding that damage and casualties in Arbil were heavy. He also said four Iraqi helicopter gunships had attacked the village of Sar Bashak, 25 km (15 miles) southwest of Arbil. The Iraqi Broadcasting Corporation, linked to the INC, said in a statement the attacks continued at 6 a.m. (0200 GMT) and the Iraqi forces also shelled a gas refinery at Arbil. In Washington, U.S. officials said they could not confirm the reports. But the Washington representative of the Patriotic Union of Kurdistan (PUK), Barham Salih, said he had received word from sources in Arbil that shelling had reached the city centre and Iraqi tanks were within five km (three miles) of the city 300 km (190 miles) north of the Iraqi capital Baghdad. He said in a statement that villagers were fleeing the advancing army and "urgent and decisive international response to counter the Iraqi onslaught is required to mitigate a humanitarian disaster in Iraqi Kurdistan". A United Nations representative in Arbil, Mohsin Habib, told CNN television: "People from the villages are fleeing away and their houses have been destroyed -- that's what the people are saying. But who is shelling we could not confirm. "But heavy weapons are being used and it is closing very fast towards the city," he said. Asked if U.N. staff had seen any Iraqi troops, he said: "No, negative, we have not seen any Iraqi army." President Bill Clinton on Friday ordered the U.S. military to prepare for any possible action as Washington turned up the heat in the deepening crisis over Iraqi troop movements in northern Iraq. U.S.-led air power has been protecting the Kurds in northern Iraq since shortly after Iraqi President Saddam Hussein's defeat in the 1991 Gulf War over Kuwait. On Thursday, Iraq accused Iran of aggression and said it reserved the right to retaliate for Tehran's alleged deployment of troops into northern Iraq, where fighting broke out between the two main Iraqi Kurdish rebel groups on August 17. White House spokesman Mike McCurry said on Friday that Washington was monitoring Iraqi troop movements very carefully and consulting other members of the international community. A U.S. official said the concerns were focused on the area around Arbil. The Kurdistan Democratic Party (KDP) of Massoud Barzani has said that Iran sent troops and military equipment into northern Iraq in support of the guerrillas of its rival, the PUK led by Jalal Talabani. The PUK said on Wednesday that Baghdad was massing troops near the Kurdish region for an attack. It said the Iraqi army's action reflected Baghdad's cooperation with the KDP. Northern Iraq has been split into rival zones since large-scale fighting broke out between the two groups in 1994. A U.S.-brokered ceasefire to end the latest round of fighting between KDP and PUK took effect on Wednesday. 6524 !GCAT !GPOL !GPRO A British newspaper said Margaret Thatcher was so shaken by an IRA attempt on her life when she was prime minister in 1984 that an astrologer was asked to warn her against future threats. The Sunday Telegraph quoted Majorie Orr as saying she did a horoscope chart for Thatcher, a Libran, after she narrowly escaped death in the Irish guerrilla bombing of a hotel during the Conservative Party conference more than a decade ago. Orr said Thatcher's press secretary Bernard Ingram asked her to telephone if she saw any threatening indications in the future. "Bernard Ingham told me that if I ever heard anything that indicated danger I was to let him know," Orr said. Orr said she never had to telephone. She added that the horoscope was purely for security purposes and she was never consulted about political moves. Ingram was quoted as telling the newspaper he thought astrology was "a load of rubbish" and that he could not recall asking Orr to keep a watch on Thatcher's stars. Thatcher, dubbed the "Iron Lady" for her driven, forceful personality, was never known to have an interest in the occult and in fact has a university degree in chemistry. Former U.S. president Ronald Reagan's wife, Nancy, admitted in her biography My Turn that she regularly consulted an astrologer to help her plan her husband's schedule. 6525 !GCAT The United States said it had found evidence of life on Mars and the conflict in Chechnya flared again in August, triggering more peace moves between Russia and separatist guerrillas. The discovery of possible signs of primitive life on the mysterious red planet held awesome implications, if confirmed, President Bill Clinton said. Chechen rebels stormed the capital Grozny in a five-day offensive that humiliated Russian troops. But after heavy fighting, Kremlin security chief Alexander Lebed was dispatched to the area and agreed a ceasefire effective from Aug 23, with a political settlewent still under discussion. Here is a chronology of the main events of the month. Aug 1 - Italian court throws out war crimes charges against former SS Captain Erich Priebke, but he is re-arrested the next day. Germany seeks his extraditon on the 12th. Aug 1 - British agriculture ministry confirms that mad cow disease can be passed from cow to calf. Aug 1 - Bishop Pierre Claverie is assassinated in Algeria hours after meeting French Foreign Minister Herve de Charette in Algiers. Aug 2 - An Arkansas court clears two of President Clinton's political allies of fraud charges in the Whitewater affair. Aug 2 - Israeli Prime Minister Benjamin Netanyahu's hardline government ends a four-year freeze on settlement building. Aug 3 - Denmark's defence chief, Admiral Hans Joergen Garde, is killed when his plane crashes on the Faroe Islands. Aug 4 - Israel's Supreme Court rejects an appeal by convicted Yitzhak Rabin assassin Yigal Amir. Aug 5 - President Clinton signs the Iran and Libya Sanctions Act, which punishes foreign firms that invest in energy projects in the two countries. Aug 6 - Bosnian Moslems and Croats agree to an EU-mediated deal to form a local government in Mostar, paving the way for countrywide elections in September. Aug 6 - Syria rejects Israeli Prime Minister Netanyahu's offer to resume peace talks on a "Lebanon first" basis. Aug 6 - Chechen rebels storm the capital Grozny in their biggest offensive for months. They hold the city until the 11th when Russian troops break through their blockade. Aug 6 - A team of U.S. scientists say they have discovered evidence of ancient life on Mars in remains from a meteorite founbd in Antarctica. President Clinton the next day pledged a big effort by the American space programme to confirm the discovery. Aug 8 - At least 86 people die when a torrent of mud and rock sweeps over a crowded family campsite in the Pyrenees mountains of northern Spain. Aug 9 - Boris Yeltsin takes the presidential oath for his second term in office. Aug 10 - Bob Dole announces that former housing secretary Jack Kemp is his Republican vice-presidential running mate. Dole is formally chosen as presidential nominee on the 14th. Aug 11 - A Greek Cypriot man is killed in clashes with Turkish Cypriots across the ceasefire line dividing the island. A second man is killed on Aug 14 when soldiers from the Turkish side fire on Greek Cypriot protesters. Aug 12 - Iran and Turkey agree a huge gas supply deal worth $23 billion a week after a new U.S. law penalising foreign investment in Iran's energy sector. Aug 12 - Afghan government announces a ceasefire with the forces of northern warlord General Abdul Rashid Dostum. Aug 12 - Bosnian Serbs bow to NATO pressure and agree to permit inspection of a key Serb military site at Han Pijesak. Aug 14 - The National Party, architects of South African apartheid, moves to the opposition benches for the first time in 48 years. Aug 14 - Gambia lifts a two-year ban on political activity in preparation for presidential elections, but on Aug 16 bans the three main political parties from taking part. Aug 14 - President Yeltsin issues a decree giving his security supremo Alexander Lebed sweeping powers to settle the conflict with separatist rebels in Chechnya. Aug 14 - North Korea hands over a South Korean novelist to Chinese authorities after detaining him for over two weeks for violating its border with China. Aug 15 - Senior Bosnian officials sign an agreement to fully form the country's Moslem-Croat Federation and dismantle the self-styled Bosnian Croat republic of Herceg-Bosna. Aug 16 - Leonel Fernandez becomes the 100th president of the Dominican Republic. Aug 16 - Seven Russian civil pilots held hostage for more than a year by Islamic opposition militia in Afghanistan escape to the United Arab Emirates. Aug 17 - West African leaders agree on a new timetable for disarming Liberian militia and for holding elections. They also choose Ruth Perry to chair the ruling council of state. Aug 17 - The bodies of two eight-year-old child sex victims are unearthed in Belgium, a day after two others were rescued from a house owned by the man arrested for the murders. Aug 18 - Two days of riots fuelled by the doubling of bread prices subside in the Jordanian town of Karak. Aug 19 - Six cosmonauts from Russia, France and the U.S. meet aboard Russia's orbiting Mir space station after a Soyuz rocket docked with it. Aug 20 - South Korean police storm a Seoul campus to end an occupation by students demanding reunification with the North. Aug 20 - Pastor Antoine Leroy, a Haitian opposition leader and another member of his party, are assassinated by gunmen. Aug 21 - At South Africa's "Truth Commission", former president F.W. de Klerk apologises for human rights violations under white rule. Aug 22 - The 61-nation Conference on Disarmament ends in failure after India blocks agreement on a Comprehensive Nuclear Test Ban Treaty. Aug 23 - Police storm a Paris church and evict 300 African migrants, ending their protest against moves to expel them from France. Aug 23 - Croatia and Yugoslavia sign a mutual recognition accord, ending five years of hostility. Aug 24 - Jordan orders three Iraqi officials to leave the country, accusing them of involvement in riots a week earlier. Aug 25 - Israeli President Ezer Weizman says he, Prime Minister Netanyahu and Defence Minister Yitzhak Mordechai will meet Palestinian President Yasser Arafat within two weeks. Aug 26 - A South Korean court sentences former president Chun Doo Hwan to death and his successor, Roh Tae-woo, to 22-1/2 years in prison on charges of masterminding a 1979 coup and an army massacre of pro-democracy demonstrators the following year. Aug 26 - Fugitive U.S. financier Robert Vesco is found guilty of economic crimes by a Cuban court and sentenced to 13 years in jail. Aug 27 - Armed Iraqis hijack a Sudanese Airbus 310 to London's Stansted airport where they release 199 passengers and crew and are taken into police custody. Aug 28 - Princess Diana and Prince Charles are officially divorced. Aug 28 - U.S. Democrats nominate President Clinton for a second term. The next day he accepts the nomination and launches his bid for a second term. Aug 29 - Palestinians hold a strike in the West Bank, the first in two years, the day after Yasser Arafat says Israel declared war on Palestinians with more settlements. Aug 29 - An airliner carrying Russian coal miners to the remote Arctic island of Spitzbergen crashes killing all 141 passengers and crew. Aug 30 - Israel thwarts Palestinian President Arafat's call for a mass prayer protest at Jerusalem's al-Aqsa mosque by ringing the city with police and roadblocks. Aug 30 - The Netherlands ends conscription after 187 years. Aug 31 - Alexander Lebed and rebel military leader Aslan Maskhadov sign a deal four days after a truce was finalised and agree to defer the decision on whether Chechnya should be independent until December 31, 2001. Aug 31 - Iraqi troops supported by tanks and heavy artillery fight their way into the Kurdish city of Arbil inside a U.N.-declared safe haven and raise the Iraqi flag. President Clinton puts U.S. forces in the Gulf on high alert. Notable deaths in August included: Tadeus Reichstein, Swiss chemist whose Nobel prize-winning work led to the widespread use of Cortisone (1); General Mohamed Farah Aideed, scourge of U.S. and U.N. peacekeepers (Announced 2 Aug); Former French prime minister Michel Debre (2); Kiyoshi Atsumi, Japanese actor in the "Tora-san" series of films (4); Abdulrahman Mohamed Babu, Tanzanian politician in the 1950's and 60's (5); Hernan Siles Zuazo, former Bolivian president (6); Frank Whittle, British inventor of the jet engine (8); Granny Vanga, Bulgaria's most revered psychic (11); Rafael Kubelik, Czech-born conductor and composer (11); Sergiu Celibidache, Romanian-born orchestral conductor (14); Masao Maruyama, Japan's leading post-war political scientist (15); Rabbi Hugo Gryn, Auschwitz survivor and BBC Radio broadcaster (18); Sylvia Fisher, Australian opera singer (25); Alejandro Lanusse, former dictator of Argentina (26). 6526 !GCAT Following are some of the major events to have occurred on September 7 in history. 1533 - Queen Elizabeth I born. Daughter of Henry VIII and his second wife Anne Boleyn, she was queen of England 1558-1603. One of the great monarchs who presided over a period of English assertion in Europe in politics and the arts. 1706 - French troops under Duke of Orleans besieging Turin were defeated by the Austrians under Prince Eugene, the French army was destroyed and they ceased trying to capture northern Italy. 1714 - The Treaty of Baden was signed between the Holy Roman Emperor Charles VI and France, ending War of Spanish Succession. Charles ceded Alsace and Strasbourg to France and got back Breisach, Kehl and Freiburg. 1812 - Russian army under General Kutuzov was defeated at heavy cost by Napoleon at the battle of Borodino 70 miles west of Moscow. Napoleon entered Moscow a week later. 1822 - Brazil proclaimed independence from Portugal and Pedro I became first Emperor of Brazil in December 1822. 1836 - Scottish politician Sir Henry Campbell-Bannerman born. As Liberal prime minister 1905-1908 he granted self-government to the Transvaal. He also got the House of Lords to pass his Trades Disputes Act which gave labour unions more freedom to strike. 1860 - Giuseppe Garibaldi leading his "Red Shirts" seized Naples in the Italian war of liberation against the Austrians. 1901 - In China, the Boxer Rising which attempted to drive out all foreigners officially ended with the signing of the Peking Protocol. This imposed an indemnity to be paid to the great powers for Boxer crimes. 1909 - Elia Kazan born as Elia Kazanjoglus. A U.S. stage and screen director, he is best known for "Viva Zapata" and "On the Waterfront". 1913 - Sir Anthony Quayle born. British actor of stage and screen in films from 1948. Best known for appearances in "Ice Cold in Alex", "Lawrence of Arabia" and, as Cardinal Wolsey, in "Anne of a Thousand Days". 1914 - James Alfred Van Allen born. U.S. physicist who discovered the two zones of radiation encircling the earth to which he gave his name. 1930 - Belgian King Baudouin I born. He succeeded to the throne in 1951 on the abdication of his father Leopold III. 1940 - In World War Two the German airforce under Hermann Goering began its "Blitz" bombing campaign on London. Over 300 people were killed on this day alone. 1969 - Scottish motor racing driver Jackie Stewart won the Italian Grand Prix to secure his first world championship. Four years later, after winning his third world crown, he announced his retirement. 1986 - Bishop Desmond Tutu was enthroned as Archbishop of Cape Town, South Africa. He was the first black head of South Africa's Anglicans. 1990 - The United States won Saudi and Kuwaiti pledges to help pay for forces in the Gulf. Iraq ordered many restaurants to close indefinitely to save food in face of a blockade. 1990 - British historian Alan John Percivale (A.J.P.) Taylor died. He won acclaim for the insights that he gave into the events which shaped modern Europe and was one of Europe's leading authorities on the great conflicts of the 20th century. 1993 - Six former Soviet republics, Russia, Belarus, Kazakhstan, Uzbekistan, Armenia and Tajikistan, signed framework agreement to keep the Russian rouble as their common currency. 1994 - The Stars and Stripes flag was lowered for the last time over U.S. army headquarters in Berlin, formally ending the American presence in the once-divided city after nearly half a century. 6527 !GCAT !GCRIM A convicted British paedophile was arrested on Saturday, two days after escaping from custody during a supervised day trip to a zoo, police said. Trevor Holland, a 52 year-old with who has been convicted twice of gross indecency with children, was captured after being spotted in Worthing, a town on England's southern coast. "A member of the public recognised Holland in a newsagent shop as he was reading the headlines about himself," a police spokesman said. Police launched a nationwide search on Thursday after he disappeared during an unsupervised trip to the toilet while visiting a popular zoo and theme park south of London. Holland was moved to a more secure centre earlier this year after a similar incident. His escape at the zoo caused outrage in Britain. A child sex scandal in Belgium in which two eight-year-old girls were murdered and two other sexually abused girls were rescued has focused new attention on the problem. 6528 !GCAT !GPOL !GVOTE British Labour Party leader Tony Blair won a narrow victory on Saturday when the party's Scottish executive voted 21-18 in favour of his plans for a referendum on a separate parliament for Scotland. Blair once pledged to set up a Scottish parliament if the Labour won the next general election, which must be held by May 1997. But many activists were dismayed when he abruptly decided earlier this year to hold a two-question referendum on the issue, asking Scots if they wanted a separate parliament and if it should have tax-raising powers. Many party members argued that a general election win would demonstrate popular support for a separate parliament and others said a single question referendum would suffice. Prime Minister John Major says the 300-year-old union of the Scottish and English parliaments will be a main plank in his Conservative Party's election platform. Conservatives have only 10 of the 72 Scottish seats in parliament and consistently run third in opinion polls in Scotland behind Labour and the independence-seeking Scottish National Party. 6529 !GCAT !GPOL The office of Margaret Thatcher on Saturday denied a report that the former British prime minister intended to quit the Conservative Party she led for 15 years. "We deny this whole-heartedly - 110 percent. It's absolute poppycock," a spokesman told reporters. The report in Saturday's Guardian newspaper said Thatcher was ready to cut her ties with the Conservatives and lend her support to the recently-formed Referendum Party, which wants a referendum on closer British ties with the European Union. "She's not joining the Referendum Party. She's not supporting it. She's going to the (Cosnervative) party conference in October as a loyal supporter of the prime minister," her spokesman added. Thatcher, never a fan of the European Union, has spoken out strongly since leaving office against a single European currency and what some British MP's see as interference by Brussels in British affairs. She has given donations to Conservative "Eurosceptic" groups and has also let it be known that she will not campaign for Conservatives who oppose the holding of a referendum on Europe during general elections to be held by May 1997. 6530 !GCAT !GDIP !GVIO An Iraqi-supported attack on the Kurdish city of Arbil, deep inside a U.N.-declared safe haven, demonstrates a desire by Saddam Hussein to crush internal opposition and challenge the West to act against him, Middle East experts said on Saturday. U.N. officials said Iraqi troops supported by tanks and heavy artillery fought their way into the city on Saturday and raised the Iraqi flag after heavy fighting. Iraq said its troops were aiding the Kurdish Democratic Party (KDP) in their attack on Arbil -- a major base of opposition to Saddam which is controlled by the rival Iranian-backed Patriotic Union of Kurdistan (PUK). "He is trying to challenge the West at its own game. If he thinks he can intervene on one side, he can tell the West "who are you protecting'?" , said John Roberts, editor of the Middle East Monitor. "He is being an opportunist. Whether he pursues it will be dependent totally on the Western reponse," Roberts told Reuters. A senior administration official said President Bill Clinton had authorized the repositioning of U.S. firepower in the Gulf region in response to the Iraqi move. He gave no details. London-based Kurdish expert and writer Hazhir Teimanon said Saddam had deliberately chosen a city within the U.N. declared no-fly zone in a bid to test American resolve. "He has gone for the heart of the safe haven, the biggest town, because he may feel that President Clinton has been indecisive in his policies. "He must be tempted to try to inflict humiliation on the West, particularly the Americans in this election year, by showing they would not take action against him," Teimanon told Britain's Sky News television. Kurdish experts said the city of Arbil was a target because it was one of the major bases of opposition to Saddam. It lies on the exposed plains rather than the mountainous regions of northern Iraq and is therefore relatively easy to attack. Ahmad Chalabi, president of the Iraqi National Congress exile group based in London, said Saddam had found encouragement in recent stand-offs with United Nations weapons inspectors and the clinching of an oil-for-food agreement. "His defiance of UNSCOM (U.N. Special Commission) in the past two months went unpunished. There was no adequate response...so he felt the international community has lost heart and has lost the will to act against him," said Chalabi. United Nations arms experts seeking to implement the scrapping of Iraqi weapons have twice been barred from entering sensitive sites in the past three months. Chalabi also cited U.N Security Council resolution 986, yet to be implemented, under which Iraq will be allowed to sell $2 billion of oil over six months to buy food and medicine for its population. "He has resolution 986...He feels that this is immune to any kind of activity he does now so he will try to get this money to bolster his forces," Chalabi said. Roberts said he also believed that resolution 986 had given encouragement to Saddam to take advantage of a divided Kurdish opposition and send a bold signal to the rest of the world. "The front lines have remained more or less unchanged since the end of the Gulf War in 1991. "He now has a real chance to change those front lines to his advantage and that would send a very powerful message to the opposition as a whole that says "I"m in charge not you. I"m expanding my influence not diminishing it," said Roberts. 6531 !GCAT !GDIP !GVIO Britain on Saturday condemned Iraqi involvement in an attack on the Kurdish city of Arbil and said it was in close touch with its allies. "We condemn Iraqi involvement. In no way can Iraqi involvement be seen as helpful," said a Foreign Office spokesman. U.N. officials said that a Kurdish rebel faction backed up by Iraqi tanks, heavy artillery and helicopters had taken control of half of the city after heavy fighting. Arbil lies within the so-called safe haven set up at the end of the 1991 Gulf War on the suggestion of British Prime Minister John Major to protect Iraqi Kurds from attack by the Iraqi military. The area is patrolled by U.S., French and British planes. "We are in close touch with all our allies," said the Foreign Office spokesman. He declined to give any further information. 6532 !GCAT !GDIP !GVIO U.S.-sponsored peace talks taking place in London between rival Kurdish factions were abandoned on Saturday after an attack on the Kurdish city of Arbil in northern Iraq, spokesmen for the two sides said. The meeting at the U.S. embassy between the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) started on Friday and had been scheduled to continue on Saturday to try to secure a tenuous ceasefire. But a spokesman for the PUK said the Saturday's meeting had been called off by telephone. "The head of the American delegation said it was pointless to continue given the new breach of the ceasefire in Arbil," Latif Rashid told Reuters. The U.S. embassy could not be reached for comment but a KDP spokesman confirmed that Saturday's session had been called off. Arbil residents, U.N. officials and Iraqi officials said the PUK-controlled city came under attack early on Saturday morning by KDP rebels backed by Iraqi troops in tanks and helicopters. The London meeting had been expected to try to push forward agreements early last year which put an end to more than a year of clashes between the rival groups in which about 3,000 people died. 6533 !GCAT !GCRIM !GVIO Seven Iraqi men appeared in court on Saturday charged with air piracy following the hijacking to Britain of a Sudanese airliner with 199 people aboard. The seven, including a carpenter and a businessmen and whose ages ranged from 25 to 38 years old, were ordered to be held in jail until another hearing next week. No pleas were entered at the preliminary hearing. They were accused of taking over Flight 150 which was flying from Khartoum, Sudan, to Amman, Jordan. All the hostages were freed on Tuesday after the plane landed at Stansted airport, north of London. The men have claimed political asylum in Britain saying they were persecuted while in Iraq. Their court appearance means they will face trial and possible imprisonment in Britain before their applications for asylum are considered. Under English law the maximum sentence for hijack is life imprisonment but there has been widespread speculation that the seven will receive lesser sentences. After a search of the aircraft following the hijack, police found only knives and fake explosives. 6534 !GCAT !GPOL !GVIO Northern Ireland's turbulent "marching season" reached a peaceful conclusion on Saturday when tens of thousands of Protestants paraded without incident in the divided province. Members of the Royal Black Institution, a church-based Protestant order, held parades in several communities and no violent incidents were reported, police said. Saturday's events were in stark contrast to July marches by the Protestant Orange Order which sparked the worst violence in the province for years and violent opposition from members of its 40-per-cent Roman Catholic minority. The Royal Black Institution, which is seen as a less politicised organisation than the pro-British Orange Order, voluntarily rerouted its parades to avoid Catholic areas in a gesture aimed at defusing simmering tension. In trademark bowler hats, white gloves and best suits, up to 30,000 men marched to pipe bands in Newry, Dunloy and Belfast itself, ending months of such events by allied organisations committed to continued British rule. On July 12, police had banned the main Orange Order parade passing through a Catholic area of Portadown but they reversed the ban after violent Protestant demonstrations across the province, igniting a wave of Catholic anger instead. The marching season ended as Northern Ireland counted down to the resumption of Anglo-Irish peace talks in Belfast on September 9 which are given scant chance of forging a lasting political settlement for the province's 1.5 million people. They include all of Northern Ireland's political parties except Sinn Fein, the political wing of Irish Republican Army (IRA) guerrillas who ended a 17-month ceasefire in February and resumed a guerrilla war to end British rule and reunite the province with Ireland. Gerry Adams, the Sinn Fein president, said in a statement: "The onus is now on the British and irish governments to take a new intiative for peace, to lead all of the parties away from the failures of the past towards a new and brighter future." His statement was issued to commemorate the August 31, 1994, declaration of the IRA ceasefire which the guerrillas abandoned because of British insistence that they disarm before any politial settlement could be reached. Sinn Fein is barred from the talks until the IRA restores its truce but there are no signs that the guerrillas will have a change of heart as long as the surrender of their arsenal remains a topic on the peace talks' agenda. The talks include representatives of the IRA's sworn foes, Protestant Loyalist guerrilla groups which killed 900 Catholics in a war to avenge IRA attacks and terrorise Catholics. One leading Loyalist, Billy Wright, has been given until Saturday night to leave the province by the Combined Loyalist MIlitary Command (CLMC), the umbrella group for the main Protestant guerrilla groups which called a truce two years ago. The CLMC has threatened Wright with "summary justice" because of his opposition to its strategy and the unsolved killing of a Catholic taxi driver in July when the marching season pushed the province to the brink. Wright, reputed commander of the mid-Ulster branch of Ulster Volunteer Force guerrillas, said at the weekend that he had no intention of leaving the province and would ignore the threat. 6535 !GCAT Following are some of the major events to have occurred on September 6 in history. 1522 - Juan Sebastian Del Cano completed the first circumnavigation of the world. He set out from Seville in Spain in 1519 with five ships and 270 men with navigator Ferdinand Magellan in command. On this day, Del Cano arrived back in Spain with one ship and under 20 crew, having taken command after Magellan's death. 1566 - Suleiman I died. Known as "The Lawgiver", he was Sultan of the Ottoman Empire from 1520. He built up the strength of the empire and surrounded himself with lawyers and architects who added much to his splendid rule. 1666 - Great Fire of London ended after destroying much of the city in a conflagration that began on September 2. Ninety-seven churches burned to the ground, including St Paul's Cathedral. 1757 - Marie-Joseph-Paul-Yves-Roch Marquis de Lafayette was born. French nobleman and reformer, he was hailed as "Hero of Two Worlds" for battles against the British in the American War of Independence. In France, he sat in the National Assembly of 1789. 1766 - John Dalton, the English scientist who established the quantitive atomic theory in chemistry in 1808, was born. 1860 - Jane Addams was born. U.S. sociologist and reformer, she founded the social settlement Hull House in Chicago in 1899 and won the Nobel Peace Prize with N.M. Butler in 1931. 1876 - John James Rickard Macleod, Scottish physiologist, was born. Along with Sir Charles Banting, he discovered insulin in 1921, for which he jointly shared the Nobel Prize for medicine or physiology in 1923. 1880 - The first cricket Test match in England was played at the Oval, between England and Australia. 1885 - Otto Kruger, notable U.S. character actor of stage and screen, was born. Among his film appearances are "High Noon" and "A Dispatch from Reuters". He died on this day in 1974. 1888 - Joseph Patrick Kennedy born. A U.S. businessman and diplomat, he was the father of President John Kennedy and his brothers Robert and Edward. 1901 - William McKinley, 25th U.S. president from 1896 to 1901, was shot by anarchist Leon Czolgosz while attending Pan American Exposition in Buffalo, New York. He died eight days later. 1914 - In World War One, the first Battle of the Marne began along a 300-mile (500-km) front when the French launched a counter-offensive against the German advance. 1940 - King Carol II of Romania was forced to abdicate by the Axis powers in World War Two in favour of his son Michael. 1965 - India invaded West Pakistan in an attack aimed at Lahore and intended to prevent further Pakistani offensives against India in Kashmir. Almost 2,500 Indians died in the 17-day war. 1966 - South African prime minister from 1958, Henrik Frensch Verwoerd was killed in parliament by Dimtric Tsafondas, a parliamentary messenger. Verwoerd was responsible for much of the apartheid legislation. 1968 - Swaziland became independent within the Commonwealth. 1970 - Palestinian guerrillas hijacked four airliners travelling to New York from Europe. One Pan Am Jumbo was blown up the next day in Cairo and two Boeing 707s which landed at Dawson's field in Jordan were blown up on September 12. The fourth plane landed in London and hijacker Leila Khaled was arrested. 1975 - In Turkey an earthquake measuring 6.8 on the Richter scale devastated the town of Lice and surrounding villages. At least 2,350 people were killed and 3,000 injured. 1988 - Thomas Gregory, aged 11, became the youngest person to swim the English Channel from Cap Griz-Nez to Shakespeare Point, Dover. The crossing took 11 hours and 54 minutes. 1990 - Sir Leonard Hutton, Yorkshire and England cricketer, died. In 1938 he scored 364 runs in an innings against Australia, still the highest test match score by an Englishman. 1991 - The Soviet Union recognised the Baltic republics of Estonia, Latvia and Lithuania as independent. 1994 - Irish Prime Minister Albert Reynolds held his government's first talks with Gerry Adams, head of the IRA's political wing Sinn Fein. 6536 !GCAT !GDIP !GVIO An Iraqi exile group appealed on Saturday for international help to stop what it said was an "savage bombardment" by Iraqi troops on the Kurdish city of Arbil in northern Iraq. "Arbil is being attacked by (Iraqi President) Saddam Hussein. A city of a million people is being savagely bombarded. He has closed the access routes to Arbil. Shells are falling at the rate of 12 shells per minute," said Ahmad Chalabi, President of the London-based Iraqi National Council. "The people are trapped. Saddam is about to commit a massive human rights violation. There will be a tragedy if Saddam is not stopped now," Chalabi told Reuters. Chalabi was speaking as his exile group reported that Iraqi tanks had entered the outskirts of the city on Saturday. Scores more tanks were reported to be massed outside the city, controlling all exits. There was no independent confirmation of the report. Chalabi said Arbil, inside the safe haven zone patrolled by U.S., British and French planes since the end of the Gulf War, had been a major base for opposition to Saddam. "I appeal to the international community, to the United Nations and to the coalition behind operation "Provide Comfort" to take urgent action to save the people of the city of Arbil," he said. "There are thousands of people who have opposed Saddam actively in Arbil. They are resisting. Saddam is using heavy artillery and tanks to try to destroy them," Chalabi added. Asked to specify what kind of action he wished the international community to take, Chalabi said: "They can make a resolution condemning it, or make a statement saying this situation is unacceptable. But ultimately the threat of military action is the only thing that will stop Saddam," he said. A spokesman for the INC said earlier that around 60 Iraqi tanks were advancing on the city, which is controlled by the Patriotic Union of Kurdistan (PUK), and that nine tanks had been destroyed by Kurdish forces. He said one of the INC contacts within Arbil, Ahmed Allawi, believed the town would fall in about two hours. 6537 !GCAT !GVIO An Iraqi opposition group in exile said on Saturday it had received reports that Iraqi forces were shelling and advancing on the Kurdish town of Arbil in northern Iraq. A London-based spokesman of the Iraqi National Congress said Iraqi artillery was shelling the city and Iraqi tanks had advanced to within 10 km (six miles) of Arbil, the administrative centre of the Kurdish rebel-controlled region of northern Iraq. "At 4.50 a.m. Iraq time (0050 GMT) Iraqi forces began an artillery attack on the outskirts of Arbil," the spokesman, who asked not to be identified, told Reuters in a telephone call. There was no independent confirmation of the report which the spokesman said came from the organisation's members in Arbil. He said damage and casualties in the city were heavy and Kurdish forces were defending the city. President Bill Clinton on Friday ordered the U.S. military to ready itself for any possible action as Washington turned up the heat in an escalating crisis over Iraqi troop movements in northern Iraq. On Thursday, Iraq accused Iran of aggression and said it reserved the right to retaliate for Tehran's alleged deployment of troops into northern Iraq, where fighting broke out between the two main Iraqi Kurdish rebel groups two weeks ago. 6538 !GCAT !GVIO Two people were killed when a hand grenade exploded in a restaurant near Algiers late on Friday, Algerian radio reported on Saturday. The report, monitored by the British Broadcasting Corporation (BBC), quoted security services as saying six other people were injured in the blast in the town of Staouelli. An estimated 50,000 people had been killed in political violence in Algeria since 1992, when army-backed authorities cancelled a general election that Islamic fundamentalists had been expected to win. 6539 !GCAT !GSPO Alaska Milk routed Formula Shell 93-86 in the second game of the Philippine Basketball Association finals on Friday to square the series 1-1. The Milkmen stepped up a gear in the second half and tight defense on Shell import Kenny Redfield limited him to only 18 points in the game. Milkmen import Sean Chambers topped his team's score with 28 points. The best-of-seven final series is scheduled to resume on Sunday. 6540 !GCAT !GSPO Friday result of the second game in the final round of the Philippine Basketball Association second conference which includes one American import on each team: Alaska Milk beat Formula Shell 93-86 (50-43) 6541 !GCAT !GSPO Results of South Korean pro-baseball games played on Friday. OB 5 Samsung 0 Ssangbangwool 2 Hyundai 1 Standings after games played on Friday (tabulate under won, drawn, lost, winning percentage, games behind first place) W D L PCT GB Haitai 64 2 43 .596 - Ssangbangwool 60 2 49 .550 5 Hanwha 58 1 49 .542 6 Hyundai 57 5 50 .531 7 Samsung 49 5 57 .464 14 1/2 Lotte 46 6 54 .462 14 1/2 LG 46 5 59 .441 17 OB 43 6 62 .414 20 6542 !GCAT !GCRIM !GDIP !GSPO Belgian police said they arrested about 50 people during a World Cup soccer qualifying match between Belgium and Turkey on Saturday. Gendarmerie major Daniel Yansenne said most of the fans were arrested outside the stadium early in the second half of the game which Belgium won 2-1. "Most of them were hard core fans preparing to start riots and attack Turks," Yansenne said. He said most of them were held for disorderly behaviour but some also for carrying banned weapons such as knives. "But the situation never got out of control," he added. Inside the stadium, Turkish fans, upset about their team's 2-0 first-half deficit, tore up dozens of plastic seats and threw them over the fence. Riot police took around 10 minutes to restore order. Thirty-nine people, mostly Italians, died on the same site in the Heysel stadium riot before the 1985 European Cup final between Liverpool of England and Juventus of Italy. The stadium has since been razed, rebuilt and rebaptised the King Baudouin stadium after the country's fifth monarch who died three years ago. 6543 !GCAT !GDIP Burundi's Tutsi military ruler Pierre Buyoya dismissed on Saturday a U.N. Security Council threat of an arms embargo and flatly ruled out talks with Hutu rebels. "I am in favour of negotiations, but you can't negotiate without conditions. We can't negotiate with people we are fighting. It simply isn't possible," he told business leaders. On a resolution by the U.N. Security Council on Friday to press for talks, he said: "Peace isn't decided in the Security Council...it is Burundians who must demand and live to make peace." His spokesman said earlier Buyoya was willing to negotiate with rebels of the ethnic Hutu majority, provided they renounced violence and what he said was their "ideology of genocide". Hutu rebel groups in turn accuse the Tutsi-dominated army of planning ethnic genocide, a charge denied by the military. The rebels also refuse negotiations, saying they will defeat the army militarily. Buyoya, a retired army major, said the point of the July 25 army coup against civilian President Sylvestre Ntibantunganya was "to install a regime of peace, peace for everybody". "The international community must understand these changes were necessary," said Buyoya, adding sanctions imposed by regional African states were "sad and difficult" but he was sure they would soon be relaxed. In a resolution adopted by a 15-0 vote on Friday, the U.N. Security Council for the first time condemned the coup and backed steps including the economic embargo by regional states. Neighbouring states have cut air and road links with Burundi since July 31 in a campaign to pressure Buyoya to return the country to constitutional rule and agree to talks with rebels. The main thrust of Friday's Security Council resolution was to pressure Burundi's military leaders into unconditional negotiations with all parties and factions "without exception". It said if such talks had not begun by October 31 the council would consider imposing an arms embargo or applying selective measures against leaders of the regime and all factions encouraging violence and obstructing a settlement. More than 150,000 people have been killed in the last three years in Burundi in massacres and a civil war between the army and rebels that have raised fears of bloodletting on a scale similar to Rwanda's genocide in 1994 when one million died. Rebel forces this week increased the isolation of Bujumbura, a Tutsi stronghold, by twice cutting power lines to the city, forcing residents to use dwindling fuel stocks or generators. They have also cut the main road north from Bujumbura to the Rwandan border with a series of ambushes and by digging it up to make it impassable for all vehicles, witnesses said on Saturday. Rebels mounted three ambushes on National Route One earlier in the week, including an attack on a beer truck. An army spokesman said two people were burned alive in the vehicle. He reported heavy fighting on Wednesday and Thursday when rebels attacked a school near the northern town of Kayanza and the army launched a counter-attack. He gave no casualty figures. An official of the National Council for the Defence of Democracy (CNDD), the political wing of the main Hutu rebel group, backed away on Saturday from a threat earlier this week to shoot down any aircraft landing in Burundi. Innocent Nimpagaritse, CNDD's East Africa representative, said CNDD would take no unilateral action without consulting a committee set up by regional states to monitor the sanctions. 6544 !GCAT !GPOL South African right-wing Afrikaners on Saturday revived their campaign for a form of self-rule, identifying a sparsely-populated area in Northern Cape province as the best place for a home of their own. Constand Viljoen, leader of the Freedom Front party, told a news conference in Pretoria self-determination for Afrikaners could begin at local government level. "Certain powers can be delegated from the provincial level, towards the sub-regions," he said. "We think that the Afrikaner model within this new, multi- ethnic society of South Africa will have to develop experimentally with world thinking in this regard." Viljoen broke with other right-wing whites in 1994 by taking part in the country's first all-race elections in April of that year, saying the only way to attain self-determination was by cooperating with President Nelson Mandela's majority African National Congress. Some right-wingers demanded sovereignty in their own territory in the run-up to the elections, saying the alternative was war. Their threats came to nothing. Viljoen has hailed clauses in South Africa's new constitution as making possible a form of self-rule for the Afrikaners, descendants of the country's Dutch, German and French settlers. According to state television, Viljoen told the news conference the self-rule model should be introduced in parts of the Northern Cape provinces where a majority of people -- whites and mixed-race Coloureds -- speak Afrikaans. 6545 !GCAT !GCRIM !GVIO Three former police generals promised South Africa's truth commission on Saturday they would tell it their versions of human rights violations from the apartheid era, commission chairman Archbishop Desmond Tutu said. Tutu told a news conference the generals had agreed to urge those who had served under them to come clean with the commission. He and fellow commissioners had two hours of talks in Cape Town with the generals, all police commissioners during the years when white-led governments tried to crush black resistance to minority rule. Tutu told a news conference afterwards the generals had requested the meeting after learning they were on a list of people who the commission planned to subpoena to give evidence in its probe of gross human rights violations. "These commissioners and other high-ranking officers were ready to cooperate with the commission and thought the use of subpoenas would be counter-productive," he said. Tutu said the generals -- Johann van der Merwe, Mike Geldenhuys and Johan Coetzee -- told him they represented "a substantial constituency". "They were saying, and we agreed, that they would make an omnibus submission which they would let the commission have ahead of a public hearing," Tutu said. "There would be a supplementary list on which they would list certain incidents. They spoke of about 50 or so incidents where they would be able to speak in general terms, initially. "On the basis of the nature of the reception by the commission of the submission, they would make a strong plea on all their former colleagues, especially their subordinates, to give as much information as possible relating to various incidents." Tutu said the generals gave the impression they wanted to cooperate, but he added that victims of abuses wanted specific information about who had done what and when. "If all they give is a generalised picture, obviously we will not be satisfied. We will be probing," Tutu said. President Nelson Mandela set up the truth commission with a mandate to probe abuses by all sides in three decades of race war. The commission has power to grant amnesty to perpetrators of abuses who voluntarily admit to their deeds, but has to yet to make any breakthroughs in exposing those with blood on their hands from apartheid's dirty war. One of the most notorious of South Africa's apartheid hit-squad killers, Colonel Eugene de Kock, was convicted of six murders this week. He is expected to name those who gave him his orders when he gives evidence in mitigation of sentence. 6546 !GCAT !GCRIM !GPOL !GVOTE The president of Gambia's electoral commission on Saturday called on the military government to free all political detainees before the start of campaigning for September 26 presidential elections. "Decree 89 places no limits on political activity and we do not believe that electoral campaigning should begin with any persons still being detained on political grounds," Gabriel Roberts said. Thirty-one people, including two former ministers, have been in detention since October, accused of planning demonstrations at the U.S. embassy and the British High Commission to demand the reinstatement of former civilian president Sir Dawda Jawara. Four political parties had applied for registration to contest the elections by Friday's deadline. Army ruler Captain Yahya Jammeh plans to contest the presidential election as a civilian and has launched a party, the Alliance for Patriotic Reorientation and Construction (APRC), linked to his Armed Forces Provisional Ruling Council (AFPRC). Roberts told a news conference the commission had invited international organisations including the Commonwealth, the Organisation of African Unity, the United Nations, and the European Commission to send election observers. So far Jammeh's main declared opponent is prominent lawyer Ousainou Darboe, vice-president of the Gambia Bar Association. Darboe will launch his United Democratic Party at a rally in the town of Brikama, south of Banjul, on Sunday. Jammeh has banned the three main political parties from contesting the elections and excluded anyone who served as a minister under Jawara. The small People's Democratic Organisation for Independence and Socialism is putting up Sidia Jatta, who polled 5.6 percent in presidential elections in 1992 won by Jawara. Another contender is Amath Bah, who holds a managerial post at a hotel in Serekunda. The Commonwealth has said rules for the presidential elections and for parliamentary polls in December were obviously flawed and would allow the military leaders to strengthen their grip on power. 6547 !GCAT !GDIP !GVIO Somali faction leader Ali Mahdi Mohamed and a delegation from his clan alliance left Mogadishu on Saturday for talks in Yemen on preparations for a national conference. A radio station run by Ali Mahdi's alliance said he would meet Yemeni President Ali Abdullah Saleh in Sanaa and Somali faction leader Ali Hassan Osman Atto, an ally who was already there. Following the death of south Mogadishu faction leader Mohamed Farah Aideed on August 1, President Saleh invited all Somali factions to Yemen for talks to end their six-year civil war. Aideed was succeeded by his 33-year-old son Hussein, who was elected by his supporters as president of Somalia. Ali Mahdi also holds he is president and rejects the Aideed government. Ali Mahdi and Osman Atto have said their alliance will meet on September 10 to prepare for a national reconciliation conference on October 10. It was unclear if both meetings would be held in Yemen. Hussein Aideed vowed to follow the policies of his father, who ruled out attending a reconciliation conference unless he was invited as president rather than just as a faction leader. Another Ali Mahdi delegation left Mogadishu on Friday for Addis Ababa for talks on the reconciliation conference. A team from Aideed's government has also gone to the Ethiopian capital. A series of conferences in Mogadishu and regional capitals have failed to bring peace to Somalia, which has had no central government since the fall of late president Mohamed Siad Barre in 1991. 6548 !GCAT !GDIP A Rwandan refugee lobby group called on Saturday for calm in refugee camps in eastern Zaire during a census from Sunday to be conducted by aid workers. The Rally for the Return of Refugees and Democracy in Rwanda (RDR) urged the U.N. High Commissioner for Refugees to avoid any "policing approach" and to calm refugees by explaining the aims of the operation. "The RDR appeals to all refugees to prepare themselves calmly for the demands of the census agents because it will be in their ultimate interest," the group said in a statement. It said refugees feared census takers would use indelible ink to mark them so they could be detected by Rwandan government troops and mistreated if they were forced back into Rwanda. U.N. officials said more than 1,000 aid workers will take part in the census from Sunday until Tuesday of the estimated 727,000 refugees in camps around the eastern Zairean border town of Goma. Only about 100 refugees a week are returning voluntarily to Rwanda in contrast to the 600 babies born in the camps weekly. Zairean Prime Minister Kengo wa Dondo said at the end of a visit to Rwanda last week that the Zairean and Rwandan governments agreed on an "organised, massive and unconditional repatriation" of the 1.1 million Rwandan refugees in Zaire. He said the repatriation would be carried out swiftly and would be enormous, starting with the closure of refugee camps. RDR said it feared forced expulsions would start in days. Zairean troops expelled 15,000 refugees in August last year. Many of the 1.1 million Rwandan Hutu refugees in Zaire and nearly 600,000 in Tanzania refuse to go home, saying they fear reprisals for the 1994 genocide in Rwanda of up to a million people by Hutus. 6549 !GCAT !GVIO The Roman Catholic church said on Saturday six missionaries held for nearly two weeks believed rebels seized them in an attempt to take over their mission base in south Sudan. Three Australian nuns, an American priest and an Italian brother arrived in Nairobi on Friday after being freed by the Sudan People's Liberation Army (SPLA) at their mission in Mapourdit, south Sudan. A Sudanese priest stayed behind to keep the mission open. The Sudan Catholic Information Office said the main charge of opposing recruitment made by SPLA rebels against the six was the result of a misunderstanding over what two nuns wrote home. "The principal charge brought against the missionaries arose from a misunderstanding of what was written by two Sisters in personal letters to their families and friends in Australia," it said. "These letters referred to the recent forced recruitment of teachers and students by the SPLA and the mobilisation and movement of the young recruits out of the area," it added. "Other charges of being spies for foreign countries and for the Khartoum government, working for the spread of Islam under the disguise of the Cross and attacking the SPLA movement were made...by individual members of the SPLA local Yirol leadership. "These were never officially referred to and were not mentioned at the time of arrest or release," the statement said. It said the six were in good health and were not tortured "but they were physically mistreated". It gave no details. It did not say how the rebels received the information in the letters. SPLA leaders have apologised for the detention of the six and said it was the work of local rebel commanders. "They (the six missionaries) believe the real reason for their arrest was the desire of the local SPLA leadership to take over the mission. The letters simply provided an excuse to arrest the missionaries," the Catholic information office said. The SPLA has denied forcibly recruiting schoolchildren, saying there are plenty of "young people" in southern Sudan who were not in education who could join the rebel movement. Monsignor Caesar Mazzolari, apostolic administrator for the region including Mapourdit, urged the SPLA to conduct a serious inquiry into the incident to find out who was responsible. He also said rebels should return food and other items looted from the mission when the six were detained on August 17. He added the Mapourdit mission would not be closed. Australian Sisters Moira Lynch, 73, Mary Batchelor, 68, and Maureen Carey, 52, were released on Wednesday night with American Father Michael Barton, 48, Sudanese Father Raphael Riel, 48, and Italian Brother Raniero Iacomella, 28. The incident was an international embarrassment for the SPLA, the largest rebel group in the south. An order for their release took days to reach local commanders because of communications problems. Mapourdit is 1,000 km (620 miles) southwest of Khartoum. The SPLA has fought Sudanese government forces in the south since 1983 for greater autonomy or independence of the mainly Christian and animist region from the Moslem, Arabised north. 6550 !GCAT !GDIS !GENV Ethiopia said on Saturday floods had forced 50,000 people to leave their homes when the Awash river burst its banks and flooded sugar estates and other land. The state Disaster Prevention and Preparedness Commission said 40,000 people left the Methara, Shoa and Wonji sugar estates hit by floods when a dam released large amounts of water. It said another 10,000 people threatened by floods in the Afar region to the east were also moved to higher ground. The commission said floods damaged irrigated agricultural projects and plantations in the upper and lower Awash valley, a centre for cash crops such as cotton, fruit and vegetables, but gave no estimate of the cost. One person was killed when the river burst its banks in central Ethiopia on August 23. The commission said the government was trying to protect people threatened by high water levels in Lake Tana and Lake Awasaa in the south which were likely to flood because of heavy rain. Authorities said on Friday Ethiopia would import sugar to meet a significant shortfall caused by the Awash river flooding the three sugar estates but it did not indicate how much. Independent estimates put annual production from the three factories at around 220,000 tonnes -- an amount which meets Ethiopia's domestic demand and with a small surplus for export. 6551 !GCAT These are significant stories in the Nigerian press on Saturday. Reuters has not verified these stories and does not vouch for their accuracy. WEEKEND TIMES - Head of State General Sani Abacha receives national health plan for 1996-2005. Says he will make Nigeria a healthier country. THE GUARDIAN - Fifty million naira withdrawn from Lagos state bank account in spite of governor's order freezing it. All state commissioners (ministers) sacked. - Britain, South Africa and Israel have all indicated interest in investing in the Nigerian coal industry. THISDAY - Oil service company is under investigation by petroleum ministry for tax evasion of $18 million, Thisday checks reveal. ($1=80 naira) --Lagos newsroom +234 1 2630317 6552 !GCAT These are the leading stories in the Kenyan press on Saturday. Reuters has not verified these stories and does not vouch for their accuracy. DAILY NATION - A gang of 20 unleashes mindless violence on a Kiambu village, leaving two people dead and four critically wounded. - Police in full combat gear chase away participants in a seminar on political reform. - Joseph Mugalla's election victory as secretary-general of the Central Organisation of Trade Unions is challenged by delegates saying the election breached the organisation's constitution. EAST AFRICAN STANDARD - A university student is shot dead and robbed of his car by an armed gang in Nairobi. - Public anger rises over alleged massive grabbing of public plots in various parts of the country. - A former Kenyatta University professor jailed for sedition in 1991 sues university authorities over his sacking. KENYA TIMES - An assistant minister for education says a call for the formation of a woman-led political party is untenable and unrealistic. - Nairobi city has technically had no mayor for the last month. - A driver with Kenya Posts and Telecommunications is shot and two of his colleagues are arrested when police mistook them for gangsters. ($1=56 Kenya shillings) 6553 !GCAT !GPOL !GVOTE Refugees and other Bosnian citizens in Croatia, watched by 260 international monitors, began two days of advance voting on Saturday in Bosnia's first postwar elections. The in-country election day for Bosnia is September 14. But some 640,000 Bosnian citizens abroad, a vast majority of them refugees from the 1992-95 war, were called on to vote in 55 countries over one week from last Wednesday. Of 117,421 eligible Bosnian citizens in Croatia, 35 percent turned out at 86 polling stations throughout the country by the 7 p.m. (1700 GMT) close of Saturday's voting, Croatia's central electoral commission said. "There have been some technical problems but according to the information we have now we haven't had any major problems," Organisation for Security and Cooperation in Europe (OSCE) liaison officer Maria Emilia Arioli told Reuters. "Technically, these elections are running." Under the 1995 Dayton peace treaty, Moslem, Serb and Croat citizens of Bosnia living abroad or displaced within Bosnia may vote for representatives in their pre-war addresses. Three million people in all are called on to elect a three-member Bosnian presidency and multi-ethnic parliament to govern a loose union of Serb and Moslem-Croat entities. Voting is supposed to lay foundations for a democratic reunification of a country torn along communal lines, but analysts believe the three dominant Serb, Moslem and Croat nationalist parties are likely to win. "There is little hope for things to change after this election but still it's better than nothing. It's a step forward," said Zvonimir Komarica, a Croat refugee from Bosnain Serb northern stronghold of Banja Luka. Polls were open for 12 hours on Saturday and will reopen for the same period on Sunday, supervised by 260 monitors from the Organisation for Security and Cooperation in Europe and other international agencies. Ballots from all polling places abroad will be sent to the Sarajevo office of the OSCE, which is running the elections, and counted along with those from the in-country voting. Final results will not be announced until later in September. Two three-member OSCE supervision teams toured 18 Croatian polling stations, improvised in primary schools and social welfare centres in the Croatian capital on Saturday. "We want to make sure that people have secure places to vote, that there are no manipulations, no party posters," Caroline Katan, an OSCE team member, told Reuters. OSCE sources said some refugees complained at finding only Serb candidates entered on ballot forms for formerly Moslem- and Croat-populated towns in Serb-controlled Bosnia. "They are sad and bitter about this," one said. In the Adriatic coast town of Dubrovnik, several hundred Croat refugees from Serb-held Trebinje in nearby Bosnia refused to vote in protest at ballots printed only in Serb Cyrillic script and showing only Serb candidates. In another incident, supporters of exiled Bosnian Moslem warlord Fikret Abdic voting at Gasinci refugee camp accused the local electoral commission of contriving to have disabled and uneducated people vote for Bosnia's central government SDA party. They said that to test the committee, a pro-Abdic voter went into the booth posing as a blind man and a commission member ticked off SDA candidates on the ballot form instead of Abdic party candidates as he had asked for. Arioli said most incidents could blamed on "technical reasons" caused by the complexity of the voting system. "We are trying to find practical solutions and we are continuously in contact with Sarajevo and (OSCE headquarters in) Vienna," she said. 6554 !GCAT !GVIO NATO freed 75 Moslem men detained for identity and security checks on Saturday, two days after Moslems resettling a village on Bosnia's internal boundary clashed with local Serb police. NATO blocked off Mahala, a Moslem village assigned to Serb republic territory under the Dayton treaty, and searched the men and nearby buildings for possible concealed weapons that could provoke fresh violence with the Serbs. NATO troops set up checkpoints on roads in and out of Mahala after one Moslem was recognised as a major in the Bosnian government army, raising questions about the real objective of military-age men arriving on Saturday. NATO soldiers refused comment to reporters and left after completing their search and freeing the Moslems, a Reuters reporter on the scene said. Villagers went back to restoring war-smashed homes. In Sarajevo, Lieutenant Colonel Max Marriner, a spokesman for the NATO-led peace Implementation Force (IFOR) said his last report, two hours old, was that 50 of 75 Moslems had been checked and let go. He said IFOR troops took photographs of men arriving in Mahala on Saturday to build up a precautionary security file. Marriner said IFOR also brought the regional Bosnian government army commander into Mahala to keep him informed and have him remove known soldiers if he spotted them. Mahala lies in a demilitarised "Zone of Separation" from which uniformed local soldiers and weapons are banned. "Everything is under control," said Marriner. Earlier, U.N. police monitors' spokesman Alex Ivanko said in Sarajevo that the spectacle of dozens of military-age Moslem men entering the hamlet together on Saturday could potentially aggravate the local Serb authorities. "Our view is to the security of the overall situation. We would not wish to see any repeat of the Thursday situation in Mahala," Ivanko said. Most Mahala residents were driven into exile early in the 1992-95 war and their homes destroyed by Serb militia. About 300 Moslems including women and children returned to Mahala last week to rebuild dwellings. Fist fights and shooting broke out between Moslems and arriving Serb police on Thursday and NATO peacekeepers swept in to calm the situation. But when the number of Moslems filtering back into Mahala jumped considerably on Saturday, NATO went in to search them. "They (NATO soldiers) used force to keep us here. We were all detained and searched -- I was searched thoroughly six times -- and they found nothing but a couple of knives," Safet Muminovic, 18, told Reuters. "They surrounded us and held us at gunpoint ... We weren't allowed to leave," said Senad Alic, 33. NATO said Serb authorities pledged to keep their police out of Mahala on Saturday. Five Serb police later tried to enter and were turned away by NATO troops, eyewitnesses said. NATO deployed several tanks and armoured personnel carriers around the village and helicopters flew overhead in what it said was more a monitoring than a protection activity. 6555 !GCAT !GPOL !GVIO President Boris Yeltsin expects his Chechnya envoy Alexander Lebed to explain last-minute changes made to a peace deal signed with Chechen rebels, a Kremlin spokesman said on Saturday. Yeltsin, said to be on holiday at the hunting lodge Rus outside Moscow, did not respond personally to the overnight deal, which Lebed said marked the end of the 20-month-old conflict. But his spokesman, speaking over the telephone, said: "The Russian president expects from the Security Council Secretary a detailed report with a clarification of the details of the agreements." Lebed returned to Moscow from the North Caucasus on Saturday saying he hoped to brief Yeltsin on the deal, which put off a decision on the key issue -- whether Chechnya should be independent or remain part of Russia -- until December 31, 2001. But the spokesman said Yeltsin needed time to analyse the agreement because changes had been made by both sides during the latest round of talks near the Chechen border. "That is it, the war is over," Lebed told dozens of people crowded into the conference room after the talks, which lasted more than eight hours, and a signing ceremony. Lebed's words were shouted by a rebel fighter to crowds waiting outside, who greeted them with jubilant cries of "Allahu Akbar" (God is the Greatest) and "Lebed for president". He and Maskhadov signed a three-page document which contained a joint declaration and a list of basic principles of relations between Moscow and the rebels for the next few years. A joint commission will also be set up by October 1 to monitor the complete withdrawal of Russian troops and coordinate steps in fighting crime and terrorism in the region. The commission is authorised to work out proposals on financial relations between Russia and Chechnya as well as a programme for the social and economic recovery of the region, devasted in the conflict in which some 30,000 people have died. Fighting broke out in Chechnya in December 1994 when Yeltsin sent troops to crush independence moves. Two weeks ago he ordered Lebed, who is his national security adviser and secretary of his Security Council, to end the conflict. Since then, Yeltsin has not seen his envoy. Kremlin spokesmen say Yeltsin, 65, is keeping in touch with events and have denied rumours he is ill. They say he merely needs to rest after a vigorous re-election campaign. The spokesman said the essence of the joint statement agreed by Lebed and rebel chief-of-staff Aslan Maskhadov was approved in advance by a meeting of top officials ordered by Yeltsin and chaired by Prime Minister Viktor Chernomyrdin on Thursday. "But that statement needs additional consideration in connection with the fact that the sides made some changes in the text of the document discussed at the meeting with Chernomyrdin," he said. Lebed said Chernomyrdin was expected to chair a further meeting of government officials on Monday to review the results of his latest discussions with Maskhadov. Rebel leader Zelimkhan Yandarbiyev praised Lebed's efforts and said the rebels were ready to play their part. "We are prepared to give full consideration to Russia's interests, if Russia is also prepared to consider our interests," he told Russian television. But Lebed's peace plan is controversial because the withdrawal of troops leaves the rebels with the upper hand and some in Moscow fear even discussing Chechen secession could trigger separatism in other Russian regions. The ceasefire has held since it began formally last Friday, but Interfax news agency said on Saturday that rebels had seized a Russian armoured personnel carrier and taken 10 soldiers hostage. It earlier quoted the military as saying Russian troops had completed their withdrawal from the Chechen capital. 6556 !GCAT !GVIO Iraqi troops, backed by heavy armour and artillery, battled their way into Arbil in northern Iraq on Saturday and raised the Iraqi flag in the mainly Kurdish city, a U.N. relief official said. "My people on the ground confirm that Iraqi troops have entered Arbil at 3.45 p.m. (1145 GMT) and have raised the national flag," the official, refusing to be named, said. U.N. guards in the area said the Iraqis were aiding rebels of Massoud Barzani, leader of the Kurdistan Democratic Party (KDP), and were in control of half the city. Forces of the rival Patriotic Union of Kurdistan (PUK) were leaving. U.N. sources said about 12,000 Iraqi troops were aiding the KDP to capture the PUK stronghold. Residents reported heavy casualties from shelling and said terrified civilians were fleeing. PUK leader Jalal Talabani told Reuters by telephone from Arbil that he had warned Washington three days in advance that the Iraqi forces were prepared to attack Arbil. "The Americans promised to attack them (the Iraqis). They did not act decisively," Talabani said. Talabani said he had not yet given up hope for U.S. intervention, adding a meeting was expected in Washington in several hours' time to review the situation. He did not elaborate. There was no immediate reaction from the United States to Iraq's attack on Arbil which lies about 20 km (12 miles) north of the 36th parallel -- the line that Iraqi forces have been barred by allied forces from crossing since just after the end of the 1991 Gulf War when Iraq tried to seize control of the area. U.S., British and French warplanes are based in southern Turkey under Operation Provide Comfort to protect the zone. KDP leader Massoud Barzani said his faction was being backed by Iraqi heavy armour and artillery, a senior U.N. official in Baghdad said. "They have confirmed to us that Iraqi troops are taking part in the attack on Arbil...We got the information from KDP leaders in KDP headquarters in Saladdin," the official, who asked not to be identified, told Reuters. The two factions, split along political and tribal lines, have a long history of fighting each other and forging shifting alliances with the main powers in the region -- Iraq and Iran. The Iraqi government in Baghdad said it had decided to "provide support and military aid" for the KDP in its fight against the PUK. In a statement carried by the official Iraqi News Agency (INA) Deputy Prime Minister Tareq Aziz said Iraq's military intervention was in response to a plea from Barzani to President Saddam Hussein to back him militarily against attacks by Iran and Talabani. The KDP has long sought to break the grip of the PUK over Arbil, the seat of a Kurdish government and parliament that was created jointly by the two factions in elections after the 1991 Gulf War after a rebellion against Iraqi rule. The United States twice negotiated a ceasefire between the two rival Kurdish factions this month. But there were repeated violations. The two factions met at the U.S. embassy in London on Friday for talks to consolidate the ceasefire. President Bill Clinton on Friday ordered the U.S. military to prepare for possible deployment in the Gulf and a White House spokesman said Washington was carefully monitoring Iraqi troop activity in the Kurdish region of northern Iraq. A U.S. Navy spokesman in Bahrain said American forces, combat vessels and fighter planes patrolling the Gulf could respond to threatening Iraqi troop movements in northern Iraq immediately if called upon, "We would be able to respond immediately to the threat in northern Iraq. Within hours," Commander T. McCreary, spokesman for the U.S. Fifth Fleet based in Bahrain, told Reuters. "We will consider any aggression by Iraq to be a matter of very grave concern," White House spokesman Mike McCurry told reporters on Friday. 311421 GMT aug 96 6557 !E51 !ECAT !G15 !G158 !GCAT !GDIP Greece said on Saturday stormy relations with Albania were over and pledged to push its European Union partners to provide more aid to improve infrastructure in the impoverished state. Greek Foreign Minister Theodoros Pangalos, the first senior EU minister to visit Albania since a disputed general election in May, said Greece aimed to strengthen ties with Albania and help in major projects to build and repair roads. "The period of misunderstandings...is over," Pangalos told reporters in the southern town of Gjirokaster, near the Albanian-Greek border. "We are very happy with our relations and would like to put them on a new level, towards more constructive ties," he said at Gjirokaster town hall before opening a new Greek consulate. Tension between the two countries rose to fever pitch in 1994 when Athens deported thousands of Albanian immigrants following Tirana's deportation of a senior Greek cleric. Albania accused the churchman of inciting unrest among its large ethnic Greek minority in the south. Greece charged that Tirana was persecuting the ethnic Greeks. Washington and the EU urged both countries to exercise restraint. The Bosnian war was at its height and the West feared further conflict in the Balkans would ignite fighting across the region. Pangalos held 45 minutes of talks with Albanian Foreign Minister Tritan Shehu, focusing on bilateral ties, more visas for Albanians and road building, Albanian government spokesman Gilbert Galanxhi told reporters after the meeting. Albania and Greece signed a landmark friendship treaty last March. Athens agreed to legalise the status of Albanian immigrants working in Greece, estimated at around 350,000. In exchange, Tirana vowed to set up three Greek schools in the south, settling one of the main grievances of the minority. Road construction is an important economic and social issue in Albania, where cars were a rarity during 45 years of communist rule, brought to an end by popular protest in 1990. Driving 200 km (160 miles) can take four hours on narrow, pit-holed roads, clogged with second-hand cars bought by Albanian workers abroad, and carts drawn by horses or oxen. Albania plans to upgrade roads from Gjirokaster to Fier, 120 km (80 miles) northwest of the town, and from Fier to the port town of Vlora on the southern coast. A road from Gjirokaster to the Greek border, linking it to a route leading to the Greek town of Ioannina, was also discussed by the ministers, Galanxhi said. He said Athens pledged to give its own assistance and encourage the EU to step up cooperation projects like PHARE, the EU's technical aid programme for East European countries. Relations between Tirana and the EU have cooled since President Sali Berisha's ruling Democrats won almost all parliamentary seats in an election criticised by foreign observers as failing to meet international standards. Washington, the EU and the Council of Europe have said they would closely watch nationwide local elections in Albania on October 20 to gauge the Democrats' commitment to democracy. Lord Finsberg, who headed a Council of Europe delegation to Tirana this week, said the body could not rule out suspending Albania if the government failed to open serious dialogue with the opposition boycotting parliament, including the Socialists. 6558 !GCAT !GDIP NATO said it was closely monitoring the movement of about 75 Moslem men towards the village of Mahala in Bosnia's Serb republic on Saturday, two days after a violent confrontation with Serbs took place there. "Fifty Moslem men have been detained in the area for identification purposes and are currently being checked," said U.N. police spokesman Alex Ivanko in Sarajevo. "NATO troops are checking the men and the buildings in Mahala for weapons but to the best of my knowledge no arms have been found so far," he said. NATO troops set up checkpoints on the roads in and out of Mahala to control movement and to establish the identities and intentions of men headed towards the village. Ivanko said one of the men moving into the area had been recognised as a Major serving in the Bosnian government army, raising questions about the real objective of the group, most of whom were of military age. Mahala is a Moslem village on Bosnian Serb republic territory. Residents were driven from the settlement during the 43-month Bosnian war and most of their homes were destroyed. Some Moslems began returning to rebuild their properties earlier in the week. Fist fights and shooting broke out between the Moslems and Serb police on Thursday and NATO troops were dispatched to calm the situation. About 30 Moslems who returned to Mahala on Friday morning spent the night there in sleeping bags, Ivanko told reporters. NATO said Serb authorities had committed to keep their police out of the village on Saturday, a pledge apparently violated when five policemen tried to enter Mahala and were turned away by NATO troops. A Reuters reporter who went to Mahala on Saturday morning found it calm but busy, with NATO troops, U.N. police and European Union monitors on the ground and NATO helicopters in the air. He spotted six NATO tanks and two armoured personnel carriers posted in the vicinity. "We're not there in a protection mode, we're there at the moment to find out what if any reason these (Moslem) men have to go to Mahala," said NATO spokesman Lieutenant-Colonel Max Marriner. "We also see it more as a provocation that up to 75 are actually moving to Mahala. Our view is to the security of the overall situation. We would not wish to see any repeat of the Thursday situation in Mahala," he added. U.N. officials said Thursday's trouble began with an unprovoked attack by Serb police on unarmed Moslem civilians. 6559 !GCAT !GPOL !GVIO Russia's peace envoy Alexander Lebed declared the 20-month Chechen conflict over on Saturday and said he would seek President Boris Yeltsin's backing for his deal with separatist leaders. Itar-Tass news agency quoted Lebed as saying he hoped to brief Yeltsin on the deal, which put off a decision on the central issue of the conflict, whether Chechnya should be independent or remain part of Russia, until December 31, 2001. Yeltsin's office could not be reached for comment. RIA news agency quoted presidential spokesman Sergei Yastrzhembsky as saying Yeltsin, who is vacationing at the hunting lodge Rus outside Moscow, did not plan any meetings on Saturday. Lebed said Prime Minister Viktor Chernomyrdin was expected to chair a meeting of government officials on Monday to review the results of his discussions with rebel military chief Aslan Maskhadov in the settlement of Khasavyurt just outside Chechnya. A joint commission will also be set up by October 1 to monitor the complete withdrawal of Russian troops and coordinate steps in fighting crime and terrorism in the region. "That is it, the war is over," Lebed told dozens of people crowded into the conference room after the talks, which lasted more than eight hours, and a signing ceremony. He and Maskhadov signed a three-page document which contained a joint declaration and a list of basic principles of relations between Moscow and the rebels for the next few years. Lebed's words were shouted by a rebel fighter to crowds waiting outside, who greeted them with jubilant cries of "Allahu Akbar" (God is the Greatest) and "Lebed for president". The document also provided for the creation of a joint commission which whould monitor Russian troop withdrawal from Chechnya. The commission is authorised to work out proposals on financial relations between Russia and Chechnya as well as a programme for the social and economic recovery of the region. Rebel leader Zelimkhan Yandarbiyev praised Lebed's efforts and said the rebels were ready to play their part. "We are prepared to give full consideration to Russia's interests, if Russia is also prepared to consider our interests," he told Russian television. Chernomyrdin said on Friday that Yeltsin, who has disappeared from the public eye since late June, had backed Lebed's peace plans. Yeltsin, who ordered Lebed two weeks ago to end the Chechen war in which tens of thousands have died, giving him vast unspecified powers to carry out the mission, has not seen his peace envoy since then. Kremlin spokesmen say Yeltsin, 65, is keeping in touch with his envoy without needing to meet him. They have denied rumours the president is ill but say he needs to rest after a vigorous re-election campaign. Lebed said postponing a decision on Chechnya's future would give vital breathing space. "Then with cool heads, calmly and soberly we will sort out our relations," he said after the late-night signing ceremony. Lebed's peace plan may face protests in Moscow from nationalist groups and some moderate figures who have argued that even discussion on Chechnya's right to secede could trigger separatism in other Russian regions. Tass quoted the Russian military in Chechnya as saying the rebels were preparing to hold massive celebrations in Grozny on September 6, when the mark the 5th anniversary of their self- proclaimed independence. The military said the celebrations were being planned as a rebel military triumph. This could enrage the Kremlin and cast a shadow over Lebed's deal. The ceasefire has held since it began formally last Friday. Russian troops have been withdrawing from their front-line positions and joint Chechen-Russian patrols have started. 6560 !GCAT !GVIO NATO said it was closely monitoring the movement of about 75 Moslem men towards the village of Mahala in Bosnia's Serb republic on Saturday, two days after a violent confrontation with Serbs. "I have to report this morning that we have in fact received reports...that up to 75 Moslem men are believed to be approaching Mahala," NATO spokesman Lieutenant-Colonel Max Marriner said in Sarajevo. Marriner said that NATO troops had set up a checkpoint on the road between Tuzla and Mahala to establish the identities and intentions of the men headed towards the village. Mahala is a Moslem village on Bosnian Serb republic territory. Moslems were driven from the village during the 43- month Bosnian war and most of their houses were destroyed. Some Moslems began returning to rebuild their properties earlier in the week. Fights and shooting broke out between the Moslems and Serb police on Thursday and NATO troops finally brought restored order. A Reuters reporter who entered Mahala on Saturday morning found it tranquil but NATO troops and U.N. police were seen on the ground and NATO helicopters flew overhead. 6561 !GCAT !GPOL !GVIO Russia's peace envoy Alexander Lebed declared the 20-month Chechen conflict over on Saturday after he and rebel leaders agreed steps to bring lasting peace to the breakaway region. Lebed signed a deal with rebel chief-of-staff Aslan Maskhadov deferring any decision on whether Chechnya should be independent from the Russian Federation until December 31, 2001. A joint commission will also be set up by October 1 to monitor the complete withdrawal of Russian troops and coordinate steps in fighting crime and terrorism in the region. "We have just now signed a statement and attached the basic principles of relations between the Russian Federation and the Chechen Republic," Lebed told dozens of people crowded into the conference room. "That is it, the war is over," Lebed said after the talks, which lasted more than eight hours. Lebed's words were shouted by a rebel fighter to crowds waiting outside, who greeted them with jubilant cries of "Allahu Akbar" (God is the Greatest) and "Lebed for president". The commission is also authorised to work out proposals on financial relations between Russia and Chechnya as well as a programme for the social and economic recovery of the region. A member of Lebed's delegation said his aides were in constant contact with Moscow during the talks, although he did not say whether the contact was with the Kremlin. Prime Minister Viktor Chernomyrdin said on Friday that President Boris Yeltsin, holidaying outside Moscow, had backed Lebed's peace plans. Itar-Tass news agency quoted Lebed as saying after the talks that he hoped to brief Yeltsin on the deal. Lebed said Chernomyrdin was expected to chair a meeting of top government officials on Monday. Yeltsin, who ordered Lebed to end the 20-month Chechen war which had killed tens of thousands of people two weeks ago and had given him vast unspecified powers to carry out the mission, has not seen his peace envoy since then. He disappeared from public eyes in late June and is now vacationing in the Rus hunting lodge, some 100 km (60 miles) outside Moscow. Kremlin spokesmen say Yeltsin, 65, is keeping in touch with his envoy without needing to meet him. They have denied rumours the president is ill but say he needs to rest after a vigorous re-election campaign. Lebed said postponing a decision on Chechnya's future would give vital breathing space. "Then with cool heads, calmly and soberly we will sort out our relations," Lebed said after the late-night signing ceremony in this village close to Chechnya's eastern border in the Russian region of Dagestan. Maskhadov praised Lebed's efforts to end a war that has seen ceasefires come and go and other failed peace plans. "We could have ended the war long ago but only now has a politician emerged who was capable of closing the bloodiest page in the history of the Chechen people," Maskhadov said. The Kremlin, which sent troops in December 1994 to quell Chechnya's independence bid, never managed to gain control of the whole of the region and its troops suffered several humiliating defeats by the Chechen fighters. Lebed signed a truce last week to end some of the worst fighting in the Chechen capital Grozny after the rebels attacked the capital on August 6 to humiliate Yeltsin three days before his inauguration for a second term. The ceasefire has held since it began formally last Friday. Russian troops have been withdrawing from their front-line positions and joint Chechen-Russian patrols have started. 6562 !GCAT !GPOL !GVIO Russian President Boris Yeltsin has yet to endorse a peace accord signed by his security chief, Alexander Lebed, with rebel leaders to end more than 20 months of fighting in breakaway Chechnya. Instead of congratulating his envoy, Yeltsin refrained on Saturday from comment on the deal, hammered out in more than eight hours of talks in the North Caucasus. Furthermore, Kremlin officials indicated that Lebed had some explaining to do. Lebed claimed to have succeeded, where many other Russian leaders previously failed, in finding a compromise to resolve a conflict in which more than 30,000 people have been killed. But he now clearly has his work cut out to convince the Russian leadership, military and public that he has not given in to the rebels, who greeted him like a hero. Kremlin officials said Yeltsin, now on holiday outside Moscow, needed time to consider the agreement and expected a full report from Lebed clarifying changes introduced during the latest round of negotiations. Yeltsin's spokesman, who has faced a barrage of awkward questions about the 65-year-old president's health since his virtual disappearance from public life in June, said Yeltsin should be allowed to rest and act as he saw fit. "The president must have the right to take a break and the president must have room for manoeuvre. I think that we cannot refuse him that," Sergei Yastrzhembsky told Russian television. The Chechnya deal signed by Lebed consolidated a week-old official ceasefire and military agreement which he reached earlier after some of the worst fighting in more than a year. It would defer a decision for five years on whether the region should remain part of Russia or become independent and it would set up a joint commission to oversee economic reconstruction and the withdrawal of Russian troops. Russian officials had backed the essence of the agreement before Lebed's latest talks with the rebels, but delegates to the negotiations admitted there had been some changes. "The talks were based on the draft agreement which we had brought with us," liberal parliamentarian Vladimir Lukin, who accompanied Lebed, told Russian television. "Of course the Chechens who were conducting the talks...put their teeth into it." Lukin did not elaborate on what changes the Chechens had introduced, but he said that a lot now depended on how Russia used the five-year breathing space laid down in the deal, saying things could go wrong if Russia was "obstinately wilful". Other liberal politicians and human rights activists urged Yeltsin at a rally of several hundred people in a central square in Moscow to back the deal. Speakers said the rally, called to oppose the war, had become a celebration. "Instead of a protest meeting we are holding a meeting of hope...Hail to the peace deal!" said human rights activist Anatoly Shabad. In Chechnya, independence-seeking rebels greeted the deal with exuberant celebrations, driving triumphantly through the streets and firing in the air. Their reaction stoked fears by Russian military officials, who are squabbling with the rebels over troop withdrawals agreed in earlier talks , that they will treat the agreement as a victory and use it to grab power in the region. 6563 !C13 !CCAT !GCAT !GPOL News agencies that act as key suppliers of information to newspapers and broadcasters worldwide adopted a declaration in Warsaw on Saturday demanding that governments allow them full journalistic independence. "News agencies must have the right to gather and distribute information freely," said the Warsaw Declaration adopted after a meeting on the future of such bodies in Central and Eastern Europe, organised by the International Press Institute (IPI). The document is backed by the United Nations Educational, Scientific and Cultural Organisation and will help formulate Council of Europe policies on media freedom, the director of the Vienna-based IPI, Johann Fritz, told a news conference. News agencies range from large organisations operating internationally, such as the U.S.-based Associated Press or Reuters, to national or local ones whose journalists gather news mostly from or about their own countries. Many are vital sources of news for their clients among other media, but some state-owned agencies are tightly controlled by their governments and obliged to act as conduits for official views. In formerly-communist Central and Eastern Europe, many agencies are striving to gain independence and adapt their business and technology to new market conditions. "State-owned news agencies must be granted full journalistic independence," the Warsaw Declaration said. "Neither government representatives nor any state authority should be allowed to impose any kind of official judgment on the journalistic performance of a news agency," it said. It stipulated that national and foreign news agencies, regardless of their form of ownership, should have equal rights to gather, receive and distribute information. Fritz said an IPI study showed that of 186 countries only one third had real press freedom, another third had none, and about a third were half way between the extremes. The IPI had also found that 40 countries insisted foreign agencies distribute news through local ones, Fritz said, adding that he regarded this as a kind of censorship. The IPI, grouping editors and media executives, will check implementation of the document and protest if it is infringed. The three-day meeting, hosted by the Polish Press Agency (PAP), was attended by representatives of 24 agencies in Europe, Africa, Asia, the Middle East and North America. It mainly aimed to share ideas on ensuring the freedom and commercial future of agencies of Central and Eastern Europe. Fritz said Czech, Polish and Hungarian agencies had made most progress. There was a middle group including Baltic states and Slovenia. "The rest have a lot of problems," he said. PAP's president Wlodzimierz Gogolek said all participants from the region had said there was now no going back. "Unfortunately...barely seven of 16 agencies in our part of Europe have begun any work on transformation and gaining total independence from parties or state administrations," he said. Fritz argued that their best course was privatisation, but whether agencies were private, had mixed ownership or remained state-owned, they had to reduce political influence or their credibility would fall and competitors would take their place. 6564 !GCAT !GVIO Crowds of pro-independence Chechens greeted a newly-signed peace deal by singing, dancing and firing guns in the air on Saturday, but the celebrations held a trace of uncertainty. More than a thousand women, children and men gathered in a field to the north of the town of Urus-Martan on Saturday to wait for a column of rebels to withdraw from the capital Grozny about 25 km (12 miles) away. The men fired weapons into the air as groups of women danced. Adults in the crowd carried posters of former Chechen leader Dzhokhar Dudayev -- who declared independence in 1991 -- and children, carrying photographs of him, called "Troops out!" . Russian military officials have expressed fears that the rebels and their supporters will see the deal signed by Russian peace envoy Alexander Lebed in the early hours of Saturday as a military victory for the separatists. It involves the withdrawal of Russian troops sent to Chechnya in December 1994 to crush the separatists and a postponement of the issue at the heart of the conflict -- the status of the mainly-Moslem North Caucasus region. But the people in the crowd on Saturday, who had turned out in support of the rebels, did not seem sure that the war was over. "We hope for the best, that it really has ended so we can live in peace. It's our only dream," said a 30-year-old woman, Mubatik Dagayeva. Aiza Dudayeva, with her 10-year-old son beside her, shared the guarded optimism. "We really want the war to end, we hope and believe that our sons and brothers will win," said Dudayeva, adding that she was from Urus-Martan. Urus-Martan is a traditionally anti-separatist pocket in Chechnya and Moscow-backed leader Doku Zavgayev, who has been sidelined in the peace deal, has warned that it and places like it could become centres of civil war if Russian troops leave. But on Saturday the people gathered just outside the town seemed to be united in favour of the separatists. Two columns of rebels appeared in jeeps and cars, firing their guns in the air, as the crowd rushed towards them. Mouldi Mamatuyev, in his late 20's, dressed in black and carrying a machine gun, was welcomed by his mother and sister. "Two sons have come back," said his mother Nurbika Mamatuyeva. "It's the end. We believe in God." Mamatuyev joked that his sister Lisa was a rebel too, and she responded by grabbing hold of his gun and shouting the Chechen war cry "Allahu Akhbar" (God is Greatest) and "Freedom for Chechnya!" . The fighter, sitting next to a man dressed in green and carrying a grenade-launcher, said that the strict Islamic law adopted by the rebels during the conflict was now needed to impose peace. "The war has ended if everything works out, if there is law there will be power. Only Sheriat (Islamic law) can end the war." 6565 !GCAT !GPOL President Boris Yeltsin must have a chance to take a break and should be allowed room for manoeuvre, his spokesman said on Saturday. "We must obviously give the president a chance to choose that rhythm of work and actions that he considers necessary," Sergei Yastrzhembsky said in an extract of an interview to be broadcast by Russian Television on Sunday. "The president must have the right to take a break and the president must have room for manoeuvre, I think that we cannot refuse him that," Yastrzhembsky added. His comments came amid instense media speculation about the health of Yeltsin, 65,, who has rarely been seen in public since June. The president, said to be on holiday in a hunting lodge near Moscow, has kept his distance from peace efforts by his national security adviser Alexander Lebed, whom he assigned two weeks ago to end the 20-month-old conflict in Chechnya. Lebed signed a deal with Chechen chief-of-staff Aslan Maskhadov in the early hours of Saturday morning, but Yeltsin did not respond to it in person. A Kremlin official said he wanted Lebed to give him a full report on the deal, which involves postponing a decision on Chechnya's status, and clarifying changes introduced during final negotiations with the rebels. 6566 !GCAT !GDIP !GPOL !GREL President Franjo Tudjman's government distanced itself on Saturday from the publication in Croatia of an infamous anti-Semitic book, seeking to avoid damage to delicate relations with Israel and Croatian Jews. "Given the timing of (the privately-funded) publication, we cannot ignore the opinion of those who condemn it as a deliberate provocation meant to weaken Croatia's relations with its Jewish community and the state of Israel," said a statement by the president's office broadcast on state radio. The first group of Israeli tourists to visit Croatia since it won independence from Yugoslavia five years ago were due to arrive in the Adriatic port of Split on Sunday. "The Protocols of the Elders of Zion", history's most notorious anti-Semitic forgery, was published in Croatia in mid-August, drawing strong criticism from both Jews and mainstream Croatian conservatives. Historians believe the "Protocols" were written around 1900 by agents of Russian Tsar Nicholas II to incite pogroms against imperial Russia's large Jewish community. The book alleged that powerful Jews were conspiring to take over the world. Tudjman, a hard-line nationalist and former historian, drew international criticism a few years ago for a book he wrote playing down the extent of Nazi Germany's anti-Jewish Holocaust. He publicly apologised in 1994 for the impressions he had made, saying he had since gained a better grasp of the issue and was seeking better relations with Jews everywhere. But he again exasperated the Jewish community last April in proposing to turn a monument to the mainly Jewish and Serb victims of a death camp run by Croatia's World War Two Nazi puppet regime into an "all-Croatian" memorial. The plan was shelved after a critical firestorm. Veteran Nazi hunter Simon Wiesenthal accused Croatia in 1995 of reviving ideas and icons from its 1941-45 fascist regime and contended that Croatian Jews were living in fear. The government rejected the charges, saying symbols such as its kuna currency dated to mediaeval times. Local Jews disagreed with Wiesenthal's portrayal of their lives. A quarter of the initial 2,000-copy print run of the Croatian-language "Protocols" has been sold so far, according to its small private publisher. The president's office said there was freedom of expression in Croatia and denied any responsiblity for the publisher's acts. Slavko Goldstein, a prominent member of Croatia's small Jewish community, said he could not accuse the publisher of anti-Semitism but rather of recklessness and failure to explain the "Protocols" adequately in the preface. "This book was the theoretical basis for (the Holocaust)." Ivan Krtalic, Croatian editor of the book, said it was printed to broaden Croats' awareness of "political thought". Copies of the "Protocols" can still be found through much of the world but it is banned or condemned in most countries. 6567 !GCAT !GVIO President Boris Yeltsin expects his Chechnya envoy Alexander Lebed to report to him on a peace deal signed with Chechen rebels and explain last-minute changes made to it, a presidential spokesman said. "The Russian president expects from the Security Council Secretary a detailed report with a clarification of the details of the agreements," a presidential spokesman said by telephone. The spokesman said Yeltsin, who is on holiday, needed time to analyse the deal because changes had been made by both sides during the latest round of talks, which ended early on Saturday with Lebed declaring that the 20-month-old conflict was over. He said the essence of the joint statement agreed by Lebed and rebel chief-of-staff Aslan Maskhadov had been approved in advance by a meeting of top officials ordered by Yeltsin and chaired by Prime Minister Viktor Chernomyrdin. "But that statement needs additional consideration in connection with the fact that the sides made some changes in the text of the document discussed at the meeting with Chernomyrdin," said the spokesman. The deal put off a decision on the central issue of the conflict, whether Chechnya should be independent or remain part of Russia, until December 31, 2001. It also provided for the creation of a joint commission which would monitor Russian troop withdrawal from Chechnya and work out proposals on financial relations between Russia and Chechnya as well as an economic and social recovery programme. Yeltsin, on holiday near Moscow, has distanced himself from Lebed's peace efforts. He has not met Lebed since he appointed him as his special envoy to Chechnya earlier this month although the two men are reported to have spoken by telephone. Some commentators have taken Yeltsin's low profile as a sign he is not well, although presidential officials have denied this. Others have argue that Yeltsin is waiting to see whether the peace deal will succeed before giving it his overt support. 6568 !GCAT !GPOL A Latvian fishing boat plucked a Russian asylum seeker from the Baltic Sea on Friday afternoon as he was attempting to reach Sweden on a makeshift raft, the Baltic News Service (BNS) reported on Saturday. BNS said Alexander Surov, 46, was rescued by the fishing boat Bravo after it spotted him floating on the open sea in a raft made from two poles lashed together. BNS quoted Surov as saying that he wanted to seek political asylum in Sweden because of the discrimination he faced as a Russian-speaker living in Latvia. The small Baltic state of Latvia inherited a huge Russian minority after it quit the former Soviet Union in 1991. Most of them have not been granted citizenship and are excluded from politics, but human rights bodies have dismissed allegations that there are widespread human rights violations against Latvia's Russian speakers, who comprises more than 45 percent of the country's 2.6 million people. 6569 !GCAT !GPOL The Solidarity trade union, mustering to fight Poland's ruling ex-communists in next year's elections, flexed its muscles with a major protest march in Warsaw on Saturday to mark its 16th anniversary. "Today we want to show we have a constructive strength which radically, but without violence, will secure our rights," Solidarity chief Marian Krzaklewski told supporters, who then staged one of the capital's largest marches of recent years. A crowd of many thousands first heard Poland's Roman Catholic Primate, Cardinal Jozef Glemp, celebrate mass at the church where the activist priest Jerzy Popieluszko worked before being murdered by communist security police in 1984. Krzaklewski then launched into an attack against the leftist coalition government dominated by the Democratic Left Alliance (SLD) of former communists, now social democrats. The head of the fiercely Catholic, patriotic union accused the left of undermining the family, monopolising power, spreading its ideology in education and the media, avoiding vital economic reforms and letting foreigners buy Polish land. He vowed that Solidarity would try to reverse an SLD-backed bill liberalising abortion, passed by the lower house of parliament on Friday in the teeth of Church opposition. "There can never be real solidarity, if there is no solidarity with life," Krzaklewski declared. The union, Poland's biggest, has formed an alliance with some 20 small parties. Opinion polls suggest this offers the best chance for an opposition victory in the parliamentary elections due in September 1997. The rally, commemorating the 1980 Gdansk accord in which Solidarity became the Soviet bloc's first free union, partly aimed to show Solidarity can beat the well-organised SLD which leads opinion polls and presides over strong economic growth. Krzaklewski sketched out key policies which any other allies will have to accept to join the union's bandwagon. These included a general share-out of remaining state assets, rather than the current policy of selling state firms piecemeal or through a limited mass privatisation scheme. He proclaimed Solidarity's vision for a new national constitution and called for the rooting out of former communist security police collaborators from official posts. Then the crowd, estimated by police and organisers at around 30,000, brought on 700 buses from around the country and set out through the streets behind a band and a black-clad figure carrying a cross, for a festival by the Vistula river. The mood was often sombre or passionate, recalling Popieluszko and the movement's other martyrs who died before the 1989 fall of communism. "Everything I love is under threat," read a banner held by miners from the troubled coal industry of Silesia in the south. Workers from the bankrupt Gdansk shipyard where the union was born, who face an uncertain future, also took part and joined in the repeated chants of "Commies Out". But Lech Walesa, the union's founder who was Poland's first democratically-elected president before his defeat by ex-communist Aleksander Kwasniewski last year, was not present. Walesa this week declared he would support his old union's election bid, on the condition that its members did not themselves enter government. But he preferred to mark the occasion in Gdansk. 6570 !GCAT !GVIO Russian President Boris Yeltsin expects his Chechnya envoy Alexander Lebed to report to him on a peace deal signed with Chechen rebels, his office said on Saturday. "The Russian president expects from the Security Council Secretary a detailed report with a clarification of the details of the agreements," a presidential spokesman said by telephone. The spokesman said the president needed time to analyse the agreements because changes had been made by both sides during the latest round of talks, which ended early on Saturday with Lebed declaring that the 20-month-old conflict was over. He said the essence of the joint statement agreed by Lebed and rebel chief-of-staff Aslan Maskhadov had been approved in advance by a meeting of top officials chaired by Prime Minister Viktor Chernomyrdin on Yeltsin's specific instruction. "But that statement needs additional consideration in connection with the fact that the sides made some changes in the text of the document discussed at the meeting with Chernomyrdin," said the spokesman, who declined to be named. He said he was reading remarks made by Yeltsin's press secretary Sergei Yastrzhembsky to Russian news agencies. 6571 !C13 !C21 !CCAT !E21 !E211 !ECAT !GCAT !GPOL Poland's Ombudsman will ask the country's Constitutional Tribunal to examine government plans to make banks reveal details of citizens' accounts to tax inspectors, PAP news agency reported on Saturday. The tribunal's task is to check whether proposed new laws comply with the country's constitution. "I took this decision as I have received many signals from citizens complaining of infringement of their rights in this area," Ombudsman Tadeusz Zielinski told PAP in an interview, He said his motion to the tribunal would probably be ready within one month. The Finance Ministry has sponsored a bill creating an elite team of tax inspectors and giving all treasury collectors more policing powers to curb tax evasion in the vast shadow economy. Among other provisions, the bill gives tax collectors more access to banking information so far protected under confidentiality rules. Businesspeople blame high taxes for widespread evasion. The corporate income tax is now at 40 percent and personal income tax rates range between 21 percent and 45 percent. -- Warsaw Newsroom +48 22 653 9700 6572 !GCAT !GVIO Russian peacemaker Alexander Lebed, who agreed with a top rebel negotiator on Saturday to end the Chechen war and defer the decision on the region's future by five years, has still to defend his deal in Moscow. Political experts said that the breakthrough nature of the deal, struck by Lebed and rebel chief-of-staff Aslan Maskhadov, exposed it to attacks by potential opponents. "The deal is a breakthrough but it is far from clear how the Kremlin and the country will meet it," said Alexander Konovalov, a leading expert in the USA and Canada Institute. Lebed and Maskhadov agreed that a decision on the future status of Chechnya -- the heart of the conflict launched in December 1994 when Moscow sent troops to quell the region's independence drive -- should be made by December 31, 2001. They signed a document saying that the problem should be solved "on the basis of international law and the nation's right of self-determination". But the document did not say whether Chechnya's secession would be negotiated among other options. The document also provided for the creation of a joint commission which would monitor Russian troop withdrawals from Chechnya and coordinate financial relations with Russia, post-war reconstruction and humanitarian aid. "The deferral of a decision on Chechnya's future status is only logical because the problem cannot be solved now in the rage of fighting and mutual distrust," Konovalov said. But he said the wording of the deal left scope for different interpretations. Russian nationalist groups as well as some moderate politicians have said that any compromise over the region's independence would trigger separatism in other Russian regions. The Russian constitution does not provide any legal mechanism for the secession of any part of the country. Yeltsin, who had given Lebed sweeping powers to restore peace in Chechnya, has stressed that any peace plan should not violate the constitution. A government expert said the deal will be first challenged on September 6, when rebels plan to mark the fifth anniversary of their independence campaign in the regional capital Grozny, from which Russian troops will have by then been withdrawn. "The deal might survive if both sides agree that there are no winners, as Lebed had announced," the expert, who spoke on condition of anonymity, said. "But, according to our information, they want to turn the occasion into a celebration of what they see as their victory over Moscow," he added. "If that happens, Lebed might find it difficult to justify the deal." Experts said that Lebed's authority to strike deals tackling the political status of any Russian territory was far from obvious. Yeltsin has ordered Lebed to restore peace in Chechnya and gave him unspecified sweeping powers to carry out the task. But the two men have not met since Lebed received his orders. "Lebed acted like a president in signing the deal," Konovalov said. "It is for the president to sign such papers and he cannot hand over his powers to anyone just saying "act as a substitute president for me today, please'. "Someone may question the deal later," he added. In the meantime, Yeltsin's position was far from obvious. Prime Minister Viktor Chernomyrdin said on Friday that Yeltsin had backed Lebed's plan. But there was no word from Yeltsin himself, who had been seen in public only once since late June, sparking rumours about his bad health. Yeltsin aides have said the president's health was alright but the 65-year-old president needed a rest after a vigorous re-election campaign and was vacationing at a hunting lodge outside Moscow. Yeltsin's press office could not be reached for comment on the deal between Lebed and Maskhadov. "On the one hand, there may be something which had prevented Yeltsin from intervening in the Chechnya talks, and the first guess would be his health," Konovalov said. "But there is also a possibility that Yeltsin wants to leave his hands free". "If Lebed succeeds, Yeltsin will come out from the shade, and grab the fruits of the victory," he added. "If things go wrong, Yeltsin could put the blame on aides unable to run the country in his absence." 6573 !GCAT !GDIP Greek Foreign Minister Theodoros Pangalos said on Saturday that stormy relations between Greece and Albania were over and the Balkan neighbours were working towards strengthening ties. "The period of misunderstandings...is over," Pangalos told reporters in the southern town of Gjirokaster, near the Albanian-Greek border. "We are very happy with our relations and would like to put them on a new level, towards more constructive ties," he said at Gjirokaster town hall before opening a new Greek consulate. Tension between the two countries rose to its highest pitch in 1994 when Athens deported thousands of Albanian immigrants in a tit-for-tat move against Tirana's deportation of a senior Greek cleric. Albanian authorities accused the churchman of inciting unrest among Albania's large ethnic Greek minority in the south. Greece charged that Tirana was persecuting the ethnic Greek minority. The United States and the European Union called on both countries to exercise restraint. The Bosnian war was at its height and the West was concerned that a further conflict in the Balkans would cause fighting to spread across the region. Pangalos was due to meet Albania's new Foreign Minister Tritan Shehu later on Saturday and to fly by helicopter to the town of Vlora for talks with President Sali Berisha. Albania and Greece signed a landmark friendship treaty last March to put their differences behind them. Athens agreed to legalise the status of Albanian immigrants working in Greece, estimated at around 350,000. In exchange, Tirana took steps to allow the establishment of three Greek schools in the southern provinces, settling one of the main grievances of the minority. Pangalos said legislation allowing seasonal work by Albanian immigrants would be ratified by parliament after the snap September 22 general election. "I would like to take this opportunity to welcome the decision by the Albanian government to set up Greek schools in southern Albania," the Greek minister said before meeting Shehu. Pangalos said, however, that his government wanted to resolve the outstanding issue of illegal border crossings between the two countries. Shehu complained this week that Greek authorities were again deporting Albanians but a Greek government spokesman said those immigrants without legal documents allowing them to remain in Greece had to be sent back to Albania. 6574 !GCAT !GPOL !GVOTE Refugees and other Bosnian citizens in Croatia, watched by 260 international monitors, began two days of voting on Saturday in Bosnia's first postwar elections that are likely to shape the country's future. The in-country election day for Bosnia is September 14. But some 640,000 Bosnian citizens abroad, a vast majority of them refugees from the 1992-95 war, were called on to vote in 55 countries over one week from last Wednesday. Voting is supposed to lay foundations for the development of democracy in a country torn apart along communal lines, and analysts believe three dominant nationalist Serb, Moslem aand Croat parties were likely to win. "There is little hope for things to change after this election but still it's better than nothing. It's a step forward," said Zvonimir Komarica, a Croat refugee from Bosnain Serb northern stronghold of Banja Luka. Croatian state radio said 117,421 Bosnian citizens in Croatia, over two-thirds of them Croats driven out of north Bosnia during its wartime conquest by separatist Serbs, were eligible to vote at 86 polling stations throughout the country. Polls opened at 7 a.m. (0500 gmt) and were to close at 7 p.m. (1700 gmt). Voting will be conducted during the same period on Sunday, supervised by 260 OSCE and other international monitors. Two three-member OSCE supervision teams toured the 18 polling stations, improvised in primary schools and social welfare centres in the Croatian capital on Saturday. "We want to make sure that people have secure places to vote, that there are no manipulations, no party posters," Caroline Katan of one of the OSCE teams, told Reuters. "We've been to seven polling stations already and we are quite satisfied with what we've seen," she said. Ballots from all polling places abroad will be sent to the Sarajevo office of the OSCE, which is running the elections, and counted along with those from the in-country voting but final results would not be announced until later in September. Under the 1995 Dayton peace treaty, Moslem, Serb and Croat citizens of Bosnia living abroad or displaced within Bosnia may vote for representatives in their pre-war addresses. Three million people in all are called on to elect a three-member Bosnian presidency and multi-ethnic parliament to govern a loose union of Serb and Moslem-Croat entities. Nationalist Serbs, led by their SDS party, now rule half of Bosnia and a skeletal Moslem-Croat federation the rest. Analysts say most of the Moslems will probably vote for the Bosnian central government's Moslem nationalist SDA party because of its strong commitment to reintegrating the country and repatriating refugees. "What we would like to happen most after the election is that we return home but I rather doubt it will be possible," said Muhamede Huseinspahic, 53, a Moslem from Bosanska Dubica. "I expect there will still be three separate sides. We'll see whether they will be able to make agreements," he said. The choice of Croat voters was slightly less certain even though Croatia's ruling nationalist HDZ party dominates most parts of Bosnia where minority Croats still live. "I've cast my ballot so that in the end Croats get as many votes as possible and we become equal to the other two nations," said Filip Ivancic, 38, from Tomislavgrad in HDZ-ruled southwestern Bosnia. But many Croat refugees from Serb-ruled north Bosnia and Moslem-run central Bosnia are embittered by the HDZ's apparent preference to resettle them in depopulated parts of Croatia and west Bosnia rather then return them to their ancestral homes, Western analysts say. They believe some could vote instead for moderate Croat opposition parties who have accused Croatian President Franjo Tudjman of abandoning refugees from north and central Bosnia in order to consolidate power in the south-west. 6575 !GCAT Here are highlights of stories in Romania's press at the weekend. Reuters has not verified these stories and does not vouch for their accuracy: Business: ADEVARUL - Transport ministry's budget was increased by 24 billion lei for modernisation of Bucharest's international airport and upgrading of several railway tracks. - Company arrears at mid-August reached 14,000 billion lei, newspaper says quoting industry ministry sources. - Efes Pilsener will invest $140 million for a brewery in oil city of Ploiesti expected to produce 300 million litres per year. - Local state-owned automobile maker Dacia Pitesti SA has produced and delivered 8,800 cars in August. ROMANIA LIBERA - Finance ministry launched 90-day treasury bill issue to cover 1995 budget deficit and is expected to launch more t-bills on September 12, October 10 and 24. CURIERUL NATIONAL - The leu is expected to fall to more than 4,000 lei to the dollar by end-1996. General: ROMANIA LIBERA - Number of HIV-infected or AIDS cases increased in Bucharest to a rate of 20 new cases per week. Some 500 cases were detected in the first six months of 1996. EVENIMENTUL ZILEI - Three policemen are charged with illegal arresting and torturing of three suspects in a burglary case. - National Unity Party (PUNR) leader Gheorghe Funar and Socialist Party leader Tudor Mohora expected to launch their candidacy for president over the weekend. - Greater Romania Party (PRM) leader Corneliu Vadim Tudor warns that President Ion Iliescu's bid for a third term is a coup. - Some 215 people mainly in Bucharest were hospitalised and 11 died in a viral meningitis epidemics. ADEVARUL - The epidemic threatens to spread, Bucharest chief epidemiologist Laurentia Velea said. - Urban transport fares expected to rise by 30 percent in September. - State subsidies cover 76 percent of urban transport costs. - Tenants of nationalised houses party merged with ruling Party of Social Democracy. - Newspaper publishes interview with Foreign Minister Teodor Melescanu. CURIERUL NATIONAL - Sibiu county police found two people who grew cannabis in their gardens and arrested one of them. ZIUA - General Prosecutor's Office extended to September 28 a suspension of a seven-month jail sentence for calumny for two journalists in Constanta. JURNALUL NATIONAL - PRM is looking at a coalition with PUNR and Socialist Labour Party ahead of November polls. CRONICA ROMANA - Former Premier Theodor Stolojan will not run for deputy or senator in parliament elections. VOCEA ROMANIEI - Romanian-Hungarian treaty will have the necessary majority to pass through parliament. ($=3,162 lei) -- Bucharest Newsroom 40-1 3120264 6576 !GCAT !GVIO Three Russian servicemen were killed on Saturday when unidentified gunmen attacked guards at an anti-aircraft installation outside Moscow, Interfax news agency said. It quoted military officials as saying the attack took place in Sergiyev Posad 70 km (45 miles) from the capital. The officials said the attackers had seized two Kalashnikov assault rifles and disappeared. Attacks on servicemen aimed at seizing their guns have become frequent in Russia where the number of violent crimes committed with the use of fire arms is growing. 6577 !GCAT !GVIO Leftist rebels killed about 50 security force members in the latest round of fighting and hit-and-run attacks across Colombia, military sources said on Saturday. They said the flurry of apparently closely coordinated guerrilla attacks, which began late on Friday, marked the worst rebel offensive in more than a year and government troops had been placed on a maximum state of alert nationwide. The worst attack occurred on Saturday when about 100 suspected Revolutionary Armed Forces of Colombia (FARC) rebels overran the Las Delicias military base on the border between jungle-covered Caqueta and Putumayo provinces in the country's southwest, Defence Ministry sources said. They said about 20 soldiers had been killed in the attack. Other punishing strikes on military and police targets included a rare rebel foray into the southern outskirts of the capital, Bogota, where five policemen were killed and three others wounded in a series of rocket and dynamite attacks on Friday night, Gen. Euclides Sanchez Vargas, commander of the 13th Army Brigade, told reporters. At least seven soldiers were killed, meanwhile, in heavy fighting on Saturday between government troops and FARC rebels in the municipality of Mesetas in eastern Meta province. Four members of the National Police Force were killed in another rebel attack in northern Santander province, but the death toll was expected to rise there since a dozen policemen were still officially listed as "missing" late on Saturday, hours after the attack occurred. At least a dozen other security force members were reported killed in rebel attacks on several towns in Cundinamarca province, of which Bogota is the capital, in the central coffee-growing province of Tolima, in Magdalena to the north and Guaviare and Valle del Cauca to the south. The mayor of the small town of Susa in Cundinamarca was among the victims of an attack there overnight. All told the Caracol radio network reported late on Saturday that more than 60 soldiers and police had been killed in guerrilla attacks over the previous 24 hours. In addition to the FARC military sources said National Liberation Army (ELN) members were participating in the latest wave of violent attacks across the country. The FARC and ELN, Colombia's largest and oldest guerrilla groups, have been fighting to topple the government since the mid-1960s. 6578 !GCAT !GDEF !GOBIT !GPRO Retired Admiral Jose Toribio Merino, a leader of a 1973 coup and a durable survivor of Chilean politics and military intrigue for 17 years, died on Friday at the age of 80, the navy said. Merino died in a military hospital in the port of Valparaiso, the navy said in a statement. He was diagnosed with lymphatic cancer last year and had been in and out of hospitals since then. Merino and two other admirals originated the plot to overthrow Marxist President Salvador Allende in 1973, and Merino later persuaded army chief General Augusto Pinochet to join the uprising, according to their later accounts of the coup. Merino, an implacable opponent of the Allende government, commanded a naval blockade of Valparaiso in support of the uprising while warplanes bombed the presidential palace, where Allende died. Other junta leaders came and went during the 17 years of military rule that followed, but Merino stayed to the end when the military yielded power to elected civilians in 1990. He was the only member of the original junta who stayed in power during the regime's full 17 years. Pinochet left the junta when he was named president under the military's 1980 constitution. The navy issued a statement regretting the death of Merino, "member of the honourable junta of government for more than 16 years." Pinochet, 80, visited Merino in the hospital Friday only hours before he died. Two other members of the military junta which took control in 1973 are also in ill health -- retired generals Gustavo Leigh and Cesar Mendoza. Known for his dry humour and his disdain for politicians, Merino survived a long line of political tremors during Pinochet's rule although they had occasional friction. In November 1986, Merino met with political opponents of the military regime to hear their calls for a transition to democracy. Merino said he "just listened" to the politicians but the meeting displeased Pinochet. But Merino was best known for his outspokenness and his ironic comments, which made him a favourite of journalists. A year after the coup, the archbishop of Santiago gave a sermon on respect for human rights while Merino and other military chiefs were present. Asked later about his opinion, Merino said he had none because "due to the bad acoustics of the cathedral, I couldn't hear him." He was the first member of the junta to take an interest in free-market economics, which the regime later adopted wholesale and were often credited for Chile's later economic growth. Merino said he learned about economics from the Encyclopaedia Britanica. Married with three daughters, Merino kept a low profile after the return to civilian rule in 1990 and spent time playing golf and riding motorcycles, his favourite hobbies. 6579 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Workers at Codelco's Salvador mine voted to lift their strike as of Saturday after a 24-hour walkout, an official for the state copper company said. 6580 !GCAT !GVIO The Mexican government stepped up security measures across the country on Friday after a wave of rebel attacks that killed up to 14 people and wounded more than 20. Mexico's Radio Red said one soldier was killed and two others were wounded on Friday after a group of heavily armed men attacked a military convoy in the western state of Michoacan. The report could not immediately be confirmed. Radio Red quoted a police commander in the town of Tacambaro, about 50 miles (80 km) south of the state capital Morelia, saying some 40-50 men attacked the convoy. It was not clear if the attack was linked to a series of attacks by the Popular Revolutionary Army (EPR) guerrilla group in three other Mexican states -- Oaxaca, Mexico and Guerrero -- on the night of Aug. 28. In a statement published on Friday in a local newspaper, the EPR called for a popular uprising. But the government said the guerrillas had no popular support, even though it acknowledged their presence in at least eight states. Talks with the rebels were not possible in the current situation, it said. The White House on Friday strongly condemned the rebel violence, but the State Department said it saw no threat to Mexican political or economic stability. "We condemn the violent actions of what appears to be a very ruthless, small, armed organisation of obscure groups dedicated to the overthrow of the Mexican government," White House spokesman Mike McCurry told reporters travelling with President Bill Clinton on a campaign trip in Missouri. State Department spokesman Glyn Davies, praising Mexico's economic performance since the December 1994 peso crisis, added: "It's important to underscore that the United States does not consider these actions threatening to Mexican political or economic stability." Nervous investors, attracted by higher U.S. interest rates and worried about political risk in Mexico, bailed out of Mexican stocks and drove the peso weaker in early trade. Mexican markets recovered most of the losses later. The peso closed 4.4 centavos weaker at 7.584 per dollar and the stock market ended 29 points, or less than one percent, lower. Deputy Interior Minister Arturo Nunez told international journalists the official death toll from the attacks was 13, although he added a severely wounded policeman might also have died since his last update. "Security measures have been reinforced in the strategic installations of the country," Nunez said, listing oil and gas installations, telecommunications facilities and roads. Security forces would also be "very alert" on Sunday, when President Ernesto Zedillo is due to give his second annual State of the Nation address, he said. Nunez said officials calculated between 150 and 200 rebels had taken part in the attacks, but declined to say what proportion of the EPR's combatants that represented. He repeated the government's belief that the EPR was the armed wing of a clandestine radical group called the Worker and Campesino Revolutionary Party-Union of the People (PROCUP), which first appeared in the early 1970s. "The hard core of the PROCUP would be about 50 people," he said, although he alleged that other radical organisations in different parts of the country were lending it their members for specific actions, some with no military training, to give an impression that the EPR is bigger than it really is. "New actions cannot be ruled out by this group aimed at generating ... an image abroad of a destabilised Mexico, in a situation of turbulence and war, which does not correspond to the reality of the country," he said in an earlier TV interview. Nunez said the EPR had a presence in the states of Guerrero, Puebla, Oaxaca, Chiapas and the central state of Mexico and had also carried out propaganda actions in the eastern Huasteca area, which includes Hidalgo and Veracruz states. The attacks were the worst political violence in Mexico since the Zapatista rebellion in early 1994 in the southeastern state of Chiapas. 6581 !GCAT !GVIO As many as 40 soliders were killed when hundreds of leftist guerrillas overran an army base in a jungle-covered region of Colombia's southwestern Putumayo province, military sources said on Saturday. They said the attack -- one of the worst in more than three decades of armed conflict -- raised the number of security force members killed in a stunning nationwide rebel offensive that began on Friday to about 70. The Las Delicias military base was destroyed in the attack Friday evening after being overrun by about 400 Revolutionary Armed Forces of Colombia (FARC) rebels, a senior military official told Reuters. The official, who asked not to be identified, said an undetermined number of soldiers were wounded in the attack. He said he was unable to confirm reports that the wounded numbered at least 30 and that another 20 soldiers were taken prisoner. 6582 !GCAT !GOBIT !GPOL !GPRO President Eduardo Frei on Saturday declared a period of national mourning for Adm. Jose Toribio Merino, a leader of a violent 1973 coup, but declined to say if he would attend his funeral. Merino, a close confidant of president Gen. Augusto Pinochet during Chile's 17 years of military government, died late on Friday at the age of 80. "I've expressed our feelings and our sorrow to his family, who are most deeply affected by this, and we join them in our prayers," Frei, an elected leader who often has had prickly relations with the military, told reporters. He declared three days of national mourning for Merino, and flags were at half-mast. He declined to say whether he would attend Merino's funeral on Monday in the port of Valparaiso, a sign of the civilian government's coolness toward Chile's former military leaders. Asked his opinion of Merino's role in the military government, Frei said, "There'll be time later for reflection and evaluation." Merino and two other admirals originated the plot to overthrow Marxist President Salvador Allende in 1973, and Merino later persuaded Pinochet to join the uprising, according to their later accounts. Pinochet remains army commander-in-chief. Merino's death revealed Chileans' deeply divided opinions of the government he served in, with rightists extolling his role in the 1973 coup and leftists mixing their condolences with criticism. "Admiral Merino formed part of a cruel and inhuman government," congressman Jorge Schaulsohn of the centre-left Party for Democracy said. "The death of a person is sad and a time for reflection, but it is not a time to expect people to change." Juan Pablo Letelier, son of Allende's foreign minister, killed in a car bomb placed by agents of Pinochet's government, said he felt the Merino family's pain, "but I'm not going to be so hypocritical as to praise the man." The right-wing UDI party issued a statement eulogising Merino for "writing one of the most brilliant pages in our history" by leading the 1973 coup with other military chiefs. "The UDI, like millions of Chileans, will always be grateful," it said. Merino, an avid golfer and an accomplished landscape painter, was known as a durable survivor of military politics and intrigue during the government. His dry, ironic sense of humour made him a favourite among journalists. He was the only member of the original junta who stayed in power during the regime's full 17 years. Pinochet left the junta when he was named president under a 1980 constitution. 6583 !GCAT !GDIP Fifteen Cubans who were attempting to flee the island in a boat were returned to Cuba on Saturday by a U.S Coast Guard vessel that intercepted the would-be exiles in the Straits of Florida, Prensa Latina reported. In 1995 Washington and Havana signed an agreement that called for the repatriation of all illegal Cuban emigrants who are picked up at sea by U.S vessels or cross into the U.S Naval Base at Guantanamo in southeast Cuba. At the same time, the Cuban government pledged to prevent all illegal departures for the United States. The accords put an end to Washington's long-standing policy of accepting automatically all Cubans who fled to Florida. The Clinton administration signed the accord in order to put a stop to the wave of uninvited Cuban immigrants who set out in rafts and boats for U.S shores. During the summer of 1994 more than 30,000 "rafters" crossed the Straits of Florida or were picked up by the U.S Coast Guard and sent to the United States Naval Base at Guantanamo in southeast Cuba. Under the accord with Havana, Washington also agreed to facilitate legal immigration by guaranteeing that at least 20,000 entry visas a year would be given to Cubans. At the same time it allowed virtually all of the detainees at the Guantanamo Base to enter the United States. Since the accords were signed in May 1995, the United States has repatriated 309 Cubans picked up at sea and another 98 that crossed into the U.S Naval Base at Guantanamo. Earlier this month Cuba demanded that Washington honour the immigration accords fully by repatriating a group of Cubans who had fled the island in a wooden boat that capsized south of Marathon, Florida. Eight of the Cubans were given asylum by the United States and three others were sent to the Guantanamo Naval base to await permission to enter a third country. Sixteen passengers on the same boat were sent back to Cuba. 6584 !GCAT !GPRO One of Cuba's most acclaimed authors, Jose Soler Puig, died at the age of 79, the official newspaper Granma reported on Saturday. Puig's first novel, "Bertillon 166," was published in 1960, a year after the Cuban revolution brought President Fidel Castro to power. The book, which has been translated into 40 languages, deals with a day in the life of Santiago de Cuba, Puig's native city, under the pre-Castro government of Fulgencio Batista. The titles of his other novels translate as "In the Year of January" (1963), "The Collapse" (1964), "Sleeping Bread" (1975), "The Decaying Mansion" (1977) and "A World of Things" (1982), followed by "The Knot," "Soul Alone" and, most recently, "A Woman." Granma called "Sleeping Bread" Puig's "greatest gift to the modern novel in our America." The author said in an interview shortly before his death that his own experiences had lent his books their strong sense of realism. "I'm a thief of ideas," he said. "The stories have been given to me by people." In the same interview, published by Prensa Latina on Saturday, Puig was asked if he feared death. "Death is not a punishment -- death is the end of life's punishment," he said. 6585 !GCAT !GVIO A new guerrilla group in Mexico is likely to be a far greater military threat to the Mexican armed forces than the rebellion by Zapatista rebels in southern Chiapas state, analysts say. Rebels of the leftist Popular Revolutionary Army (EPR) stunned Mexicans on Aug. 28 by launching coordinated attacks in at least three states -- Oaxaca, Guerrero and the state of Mexico -- killing 14 people and wounding 20. On Friday one soldier was killed and two were wounded after a group of 40 to 50 heavily armed men attacked a military convoy in the western state of Michoacan, media reports said. It was not clear if the Friday attack involved the EPR or drug traffickers. Although no one believes the rebels would be a match for Mexico's approximately 150,000-strong army in head-on battle, the EPR seems versed in classic hit-and-run guerrilla tactics that will make it an elusive target. "Fighting and fleeing. ... Our mobility has not given the Mexican army an open front to attack, it has frustrated their battle plan," the rebels' Commander Vicente said in a recent interview with Proceso magazine. A negative factor for the rebels may prove to be a lack of popular support. Although many Mexicans dislike the government of President Ernesto Zedillo and have been hard hit by a recession, most are against violence and wary of the EPR's Marxist rhetoric. So far the EPR has lived up to its claims to be a highly mobile and well-armed group. It has made its presence known through attacks or propaganda acts in at least eight states in poorer areas of central and southern Mexico, officials said. By contrast, the Zapatista rebels who launched a 1994 rebellion were largely confined to one corner of the southernmost state of Chiapas. The Zapatistas are currently negotiating peace with the government. "The EPR will have an impact far beyond their numbers. ... The Zapatistas are larger in numbers, but they are easier to control, because they are confined to a much smaller area," said Roderic Camp, an expert on the Mexican military at the University of Tulane. Camp said Mexico's military might not be quick to resort to the "dirty war" tactics used by Latin American armed forces in the 1970s because of increased international attention on human rights. Counterinsurgency efforts in several parts of Mexico will prevent the military from focusing on anti-drug efforts, which the U.S. government has pressed Mexico to pursue. "The Mexican military is not big in numbers for the size of the country or its population. They will be pretty spread out if they have to hunt rebels in several states," Camp said. The EPR has a modern arsenal of assault rifles such as AK-47s, AR-15s and submachine guns, compared with the Zapatistas' mostly ancient collection of rifles and guns, analysts said. Officials suspect the new rebel group, which appeared two months ago in Guerrero, obtained money from kidnappings, including the high-profile abduction of a rich banker in 1994 that yielded a reported ransom of $5 million to $35 million. 6586 !GCAT !GODD The son of Colombia's barrel-chested and tough-talking national police chief will represent Colombia in the first-ever "Mr. World" beauty pageant, Bogota's El Tiempo newspaper said on Saturday. It said the pageant, organised by the same people responsible for the annual "Miss World" contest, would be held in mid-September in Istanbul, Turkey, and that Colombia would be among about 50 countries participating. Gen. Rosso Jose Serrano Serrano's 25-year-old son, Franz, is a professional model who El Tiempo said was recently elected "Mister Colombia" in a local run-up to the "Mister World" contest. He told El Tiempo that the upcoming event in Istambul was "a great opportunity" for him, "not just because it's the most important male modelling contest in the world but because I like to do things that no one's ever done before." His father had no immediate coment. 6587 !GCAT !GVIO Leftist rebels killed five policemen and wounded three others in a series of hit-and-run attacks in the Colombian capital, authorities said on Saturday. Gen. Euclides Sanchez Vargas, commander of the 13th Army Brigade, said the attacks began on Friday night and included an assault on the police station in Los Libertadores, a working-class neighbourhood on the southern outskirts of Bogota. The attacks, which Sanchez Vargas blamed on Revolutionary Armed Forces of Colombia (FARC) rebels, coincided with a surge in FARC attacks on small towns in and around central Cundinamarca province, of which Bogota is the capital. At least one guerrilla and one policeman were killed during FARC attacks on Friday night on three towns in Cundinamarca, Sanchez Vargas said. In all, at least 15 people including five guerrillas were killed in political violence across the country on Friday, military sources said. The FARC, Colombia's largest and oldest guerrilla group, has been fighting to topple the government since the mid-1960s. 6588 !C42 !CCAT !E41 !ECAT !GCAT !GJOB State-owned Codelco's Salvador copper mine was working normally again early Saturday after workers voted to lift a strike after 24 hours, a spokesman for the mine said. "The mine has been normalized as of 2400 hours today (0400 GMT)," said the spokesman, Luis Lodi, by telephone from Salvador, about 800 km north of Santiago. The mine's 2,400 workers voted to accept Codelco's last wage offer, which they had originally rejected when they voted Wednesday to strike, after the strike failed to shut the mine's smelter and refinery, he said. The mine paralyzed the mine and the concentrator, but staff levels were near normal at the smelter and refinery, Codelco officials said. --Roger Atwood, Santiago newsroom +56-2-699-5595 x211 6589 !GCAT !GDIP The U.S. ambassador to the United Nations, Madeleine Albright, arrived in Chile late Friday for talks on various Security Council issues with Chilean officials as part of a five-nation Latin American tour. Albright will meet Foreign Minister Jose Miguel Insulza Monday for talks on issues currently up for debate on the council, of which Chile is a non-permanent member, a U.S. embassy statement said. The two will also discuss various issues affecting relations between the United States and Chile, local officials said. Albright, who arrived from Uruguay, will rest most of the weekend in Chile, officials said. Her official programme will begin on Monday, and she will leave that day for Bolivia to attend a Latin American summit meeting in the city of Cochabamba. Her tour will also include Honduras and Guatemala. 6590 !E12 !E41 !ECAT !GCAT !GJOB !GWELF Argentine President Carlos Menem has vowed to push ahead with labour and welfare reforms to foster economic recovery and fight unemployment. "Severance payment and unemployment benefits regimes will be replaced by a compensation system to be agreed upon by the parties involved," he said late on Friday. Many Argentine businessmen say severance payments are a stumbling block in hiring workers in a country where unemployment is at 17.1 percent. In a speech to the Argentine Industrial Union (UIA), Menem also said his government would deepen social welfare reform to allow workers to choose their own welfare firms. Present Argentine law obliges workers to receive the welfare services given by their respective trade unions. Menem urged the Parliament to agree to the proposed changes in legislation, but made it clear that would introduce the reforms by decree if necessary. The president also warned trade unions, which are planning a general strike in September after bringing the country to a halt in August, against further strikes. "What did workers get when they struck? Nothing. And they will get nothing with another strike ... It is they and the country who will be the losers, not the government," he said. Economy Minister Roque Fernandez said earlier that the economy would grow by more than 6.0 percent in the second half of this year and by 5.0-6.0 percent in 1997. He also forecast that the budget deficit would be less than one percent of gross domestic product next year and "we will return to fiscal balance in 1998". Argentina's GDP was about $280 billion last year. -- Guillermo Haskel, Buenos Aires Newsroom, 541 318-0650 6591 !GCAT !GVIO Mexican President Ernesto Zedillo pledged on Friday to hunt down a new guerrilla group following a series of deadly rebel attacks across the country earlier this week. Amid unconfirmed reports of a fresh ambush on the Mexican army by armed men in western Michoacan state, Zedillo branded rebels of the self-styled Popular Revolutionary Army (EPR) as criminals and vowed to bring them to justice. "Who has given them the right to try to take power by force? That is definitely not acceptable; it cannot be tolerated ... the state, acting within the law, will use every available means to bring these people to justice," Zedillo said in an interview with television network TV Azteca. Hundreds of masked rebels launched surprise attacks on military and police posts in the central and southern states of Mexico, Guerrero and Oaxaca on the night of August 28, killing at least 14 people and wounding 20 others. On Friday, Mexican media reports said one soldier was killed and two others were wounded after a group of 40 to 50 men carrying AK-47 assault rifles attacked a military convoy near the town of Tacambaro, about 50 miles (80 km) south of the Michoacan state capital of Morelia. Although the group wore military-style fatigues similar to those worn by rebels, it was not clear if the attack was linked to the EPR. Michoacan state spokesman Jaime Lopez told Televisa network officials suspected the armed group was linked to drug trafficking and were not guerrillas. During the televised interview, Zedillo promised he would not allow security forces to commit human rights abuses in their chase of the rebels. "I have taken the decision that everything done to prosecute these criminals must be done within the law -- without violating individual rights ... and cautiously abiding by judicial procedure," he said. The rebel group, which officials admitted had a presence in at least eight Mexican states, called for a popular revolt against the government in a statement published on Friday by a local newspaper. But Zedillo, due to give his second State of the Union address on Sunday, said the group had little popular support and was trying to prompt the government into a repressive counter-insurgency that might gain the rebels' local support. "We will not give them that pleasure," he said. Zedillo was criticised in local newspapers on Friday for not having taken the rebels' seriously after they first appeared two months ago. Zedillo's Interior Minister Emilio Chuayffet called the group a "pantomime." But the president defended Chuayffet on Friday, saying the group was indeed a "pantomime" because they were trying to convince the public they represented a legitimate social movement. "They have no social cause; their cause is violence," Zedillo said. The White House on Friday strongly condemned the rebel violence, but the State Department said it saw no threat to Mexican political or economic stability. "We condemn the violent actions of what appears to be a very ruthless, small, armed organisation of obscure groups dedicated to the overthrow of the Mexican government," White House spokesman Mike McCurry told reporters travelling with President Bill Clinton on a campaign trip in Missouri. State Department spokesman Glyn Davies, praising Mexico's economic performance since the December 1994 peso crisis, added: "It's important to underscore that the United States does not consider these actions threatening to Mexican political or economic stability." Nervous investors, attracted by higher U.S. interest rates and worried about political risk in Mexico, bailed out of Mexican stocks and drove the peso slightly weaker on Friday. Mexican officials told reporters the government had stepped up security measures across the country. "Security measures have been reinforced in the strategic installations of the country," said Deputy Interior Minister Arturo Nunez, listing oil and gas installations, telecommunications facilities and roads. 6592 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Workers at Codelco's Salvador mine voted to end their strike as of Saturday after a 24-hour walkout, an official for the state copper company said on Friday. "The decision by workers has been positive; that is, to accept the wage offer presented by the company," said a Codelco official. The strike would be lifted as of Saturday shifts, said the official. Workers at Salvador, the smallest of Codelco's four copper pits, went on strike 24 hours ago to support wage demands. The official did not have details on the terms of the agreement which the workers voted to accept. --Roger Atwood, Santiago newsroom +56-2-699-5595 x211 6593 !GCAT !GOBIT !GPOL !GPRO Retired Admiral Jose Toribio Merino, one of the leaders of a Chilean military coup in 1973, died Friday after a long illness at the age of 80, the navy said. Merino, who died in a military hospital in the port of Valparaiso, was diagnosed with lymphatic cancer last year and had been in and out of hospitals since then. Merino and General Augusto Pinochet were two of the main leaders of the 1973 coup in which elected Marxist President Salvador Allende was killed. With Pinochet as president and Merino chief of the navy, the military then ruled Chile until 1990. The navy issued a statement regretting the death of Merino, "member of the honourable junta of government for more than 16 years." Pinochet, also 80, visited Merino in the hospital on Friday only hours before he died. Two other members of the military junta which took control in 1973 are also in ill health -- retired generals Gustavo Leigh and Cesar Mendoza. Known for his dry humour and his disdain for politicians, Merino survived a long line of political tremors during Pinochet's rule to remain the second-ranking junta member until the military turned power over to elected civilians in 1990. 6594 !GCAT !GVIO A group of heavily-armed men attacked a military convoy in the western Mexican state of Michoacan on Friday, killing one soldier and wounding two, radio reports said. Radio Red quoted local police in the town of Tacambaro, Michoacan, 80 km (50 miles) south of the state capital Morelia, as saying 40 to 50 armed men attacked the convoy. Gonzalo Montoya, a police commander in Tacambaro, told Radio Red the group was armed with AK-47s and other high-powered assault rifles and wore military-style fatigues. Montoya said he thought the attackers were criminals linked to drug trafficking or kidnapping in the area. "We often see people dressed in military-style clothing here," he said. The attack comes a day after rebels of the self-styled Popular Revolutionary Army (EPR) launched coordinated attacks in at least three Mexican states, killing up to 14 people and wounding about 20. 6595 !GCAT !GPOL !GVIO Cambodia's co-Prime Minister Hun Sen said on Saturday that dissident Khmer Rouge guerrillas would have to hand over their territory before they could set up a political party. Hun Hun Sen's remarks reflected a toughening in the government's position towards the breakaway guerrillas, who have been negotiating peace with the government in northwest Cambodia, analysts said. Hun Sen, in a speech to mark the opening of a market in this northwest city, said: "The constitution says Cambodia cannot be divided...The government cannot negotiate with other political or military organisations that hold territory." "Anyone can set up an (political) organisation or association after their territory is put under the control of the government and they must obey the constitution and law of the kingdom of Cambodia," added Hun Sen, who is co-prime minister along with Prince Norodom Ranariddh. Hun Sen announced on August 8 that two Khmer Rouge divisional commanders had defected to the government with some 3,000 fighters in the northwest bases of Phnom Malai and Pailin. Ieng Sary, a founder of the Khmer Rouge and foreign minister during its reviled 1975-79 "killing fields" rule, this week confirmed that he and followers in the northwest had broken with Pol Pot and other hardliners of the Maoist guerrilla group. The dissident leader, who in 1979 was sentenced to death in absentia for his role in the deaths of more than one million people during the Khmer Rouge reign, announced the formation of the Democratic National United Movement to end the war and negotiate reconciliation. Hun Sen had earlier said the dissidents would be able to keep their land and retain their positions in the northwest. But the guerrillas appear to be demanding an autonomous zone and the right to fight elections nationwide in 1998, analysts said. Senior Khmer Rouge divisional commander Sok Peap said on Saturday he believed Ieng Sary would meet Hun Sen soon but not before holding talks with co-Defence Ministers Tea Banh and Tea Chamrath. "I think Ieng Sary will meet Hun Sen in the future but I do not know when," said the commander of breakaway Division 450, contacted by telephone in his Phnom Malai base. Khmer Rouge official Long Norin said on Wednesday that Ieng Sary had decided "that government troops will be allowed to be deployed in the liberated zones only after the next general election, when our faction also plans to file candidates". Hun Sen noted that a 1994 law banning the Khmer Rouge was still in effect, but the government still welcomed defectors and it was no longer necessary to maintain the legislation as the situation was improving. He said several factors had contributed to the demise of the guerrilla group, including the end of the Cold War, 1993 elections that ushered in a government recognised worldwide, improved relations and economic and rural development. The split within the movement had provided the final ingredient, and Hun Sen said: "These five factors can end the Khmer Rouge very soon." 6596 !GCAT !GDIS The death toll from a landslide that swamped a Malaysian aborigine village rose to 18, as searchers neared the end of a second day of digging out victims, officials said on Saturday. Twenty-four people were reported missing in the disaster, in which a landslide set off by rain and floods triggered a torrent of water and mud that swept at least 20 houses from the remote Pos Dipang aborigine village into the Dipang river on Thursday. Earlier reports of 42 missing had included the dead, a police spokesman said on Saturday. Excluding the dead, he said 24 people were still unaccounted for. Nearly 200 searchers hampered by thick mud strewn with tree trunks, collapsed houses and other debris, resumed operations on Saturday at the disaster site near Kampar town in the northern state of Perak, police said. At least 30 other houses in the village of some 700 tribespeople were damaged. Rescue efforts have also focused on Kampung Sahom, another village about five km (three miles) downstream, where the wrecked houses were swept. Most of the inhabitants of Pos Dipang are from the Orang Asli Semai tribe, the largest of Malaysia's 18 aborigine groups. An estimated 30,000 Semai dwell in peninsula Malaysia, many in Perak state. Pos Dipang village was a typical aborigine settlement, built in a remote location on a river bank. Located some 4-5 km (2.5-3 miles) from the nearest town, it has no treated water, no phone lines and is accessible by just one road. The original settlers of Malaysia lead relatively primitive lives, clustered in villages or government settlements. Some still live off the jungle, while others have entered the mainstream of Malaysia's economy. Prime Minister Mahathir Mohamad said on Friday the disaster was unlikely to have been caused by construction work. 6597 !GCAT !GCRIM Chinese police have detained veteran dissident Wang Donghai amid accusations by Amnesty International that those who dare to speak up face torture, imprisonment and even death at the hands of the government. Police in Hangzhou, capital of the eastern province of Zhejiang, told Wang's family that Wang would be sent to a "study class", a euphemism for coercive ideological reform, his sister, Wang Yisu, told Reuters on Saturday. Two public security officers took Wang away on Friday but would not say why Wang was being sent to a study class -- a holdover from the chaotic 1966-76 Cultural Revolution -- or say when he would be released, the sister said. Police would not let Wang's family meet him or say where he was being held, the sister said. The sister said she suspected police detained her brother because he was trying to help fellow dissident Chen Longde, who jumped from a third-floor window on August 17 because he could no longer stand being beaten by a prison official. Chen suffered serious injuries and was taken to hospital after the fall. "I think it (Wang's detention) had to do with Chen Longde ... My brother was angry, shocked and surprised when he heard about what happened to Chen Longde," the sister said in a telephone interview. "My brother and Chen Longde were very close," she said. Hangzhou police could not be reached for immediate comment. Wang, 45, and Chen, 39, were ordered last month to serve one year and three years of "re-education through labour", respectively, but Wang was released because of poor health. Re-education through labour is an administrative punishment with a maximum of three years that can be imposed by police without recourse to prosecutors or the courts. Wang, a veteran of the 1979 Democracy Wall movement, was jailed for two years for organising street protests after armed forces crushed pro-democracy demonstrations by students at Beijing's Tiananmen Square on June 4, 1989, with heavy loss of life. Western diplomats say Chinese authorities appear to be using administrative punishment more frequently to take dissidents out of circulation without having to go through a more complicated judicial process to impose criminal sentences. London-based human rights group Amnesty International criticised China's human rights record. "The Chinese authorities do not tolerate any form of dissent," Amnesty said. "They allow torture to continue, use the death penalty to try to cure social problems, brutally crack down on ethnic groups calling peacefully for more independence and detain hundreds of thousands of people every year without charging them with any crime," it added. "When China's rulers refuse to respect fundamental human rights, they set a precedent for repressive governments worldwide. When they argue that local conditions and economic necessity mean human rights must take second place, their words are echoed by governments through the Asia-Pacific region." A commentary by the official Xinhua news agency earlier this year said that a plot by the West to force its human rights standards and values on other countries was doomed to failure. In April, China quashed a resolution drafted by the United States and the European Union to avert censure at the United Nations Human Rights Commission for the sixth year in a row. 6598 !GCAT !GCRIM !GPOL Former South Korean president Chun Doo Hwan on Saturday appealed against his death sentence, ending days of speculation about whether he was prepared to go meekly to the gallows. Chun, who was sentenced on Monday, was convicted of leading a 1979 putsch and then ordering troops to crush democratic resistance in the southern city of Kwangju in a 1980 massacre. His successor, Roh Tae-woo, appealed against his 22-1/2 year jail term for playing a secondary role in the coup and Kwangju killings. Both men were convicted of amassing vast fortunes by soliciting bribes from business tycoons. "I decided to appeal because it is the duty of former presidents to reveal the truth," Chun was quoted by his lawyer, Chun Sang-suk, as saying, according to a report by the domestic Yonhap news agency. Court officials declined to give details about the grounds for appeal. Chun and Roh had seven days to challenge the court's verdicts, but media reports at one point quoted Chun's lawyers as saying he may not bother. Appeals could drag on for up to eight months if the two former generals fight all the way to the Supreme Court. Many Koreans believe that regardless of the result, current President Kim Young-sam is likely to pardon Chun and Roh before he steps down at the end of next year. The judges indicated at sentencing that they had treated Roh leniently because of his role in leading South Korea out of three decades of authoritarian rule towards democracy. The one-time military academy classmates defended their grab for power as necessary to restore order and avert possible North Korean military adventures following the assassination of president Park Chung-hee. More than a score of former presidential aides and ex-generals were sentenced with Chun and Roh along with nine leading businessmen convicted of offering bribes. South Koreans hailed the convictions of Chun and Roh as evidence of how far the country has marched towards democracy since the days when military-backed strongmen occupied the presidential Blue House. Some saw it as proof that South Korea, unlike other fledgling Asian democracies with authoritarian pasts, was ready to confront its brutal recent history rather than sweep it under the carpet. But critics -- including Chun and Roh -- accuse president Kim of waging a personal vendetta to boost his sagging popularity. Kim inherited the political machine built up by his two predecessors, and his rise to the presidency came only after he joined forces with Roh's supporters. At one point, Kim said the actions of Chun and Roh should be judged by history. Offering a pardon would be a grave decision for Kim, who needs to hold on to the political supporters of Chun and Roh in their home provinces, but must be seen to be upholding justice and protecting the memory of the Kwangju victims. About 200 people were killed, by official count, when battle-hardened paratroopers stormed Kwangju to put down a citizen's revolt against martial law. 6599 !GCAT !GPOL !GVIO Indonesia's official human rights commission said on Saturday that it had confirmed that at least five people were killed in riots in Jakarta on July 27. The unrest, the worst in the capital in more than two decades, broke out after police raided the office of the Indonesian Democratic Party (PDI) in central Jakarta which was being occupied by loyalist supporters of ousted party leader Megawati Sukarnoputri. Megawati had been replaced in June by deputy parliamentary speaker Surjadi at a government-backed congress in Medan, North Sumatra. The human rights commission's deputy chairman, Marzuki Darusman, and its secretary-general, Baharuddin Lopa, told a news conference on Saturday night that preliminary findings showed 74 people were reported missing and 149 people, including security officials, were injured during the disturbances. "We hope this brief statement will lessen the atmosphere of uncertainty and speculation," Darusman told reporters. He said the commission would provide a full report on the riots, including an analysis of its causes, in the near future. Lopa told reporters the deaths had been confirmed by doctors at Jakarta hospitals but the commission did not have complete details about where and when the five men died. He named the dead as Uju bin Asep, 31, Asmayadi Soleh, 19, Suganda Siagian, 21, Slamet, 52, and Sariwan, 40. Lopa said information on those missing was often incomplete and contradictory. "This information needs to be checked and checked againg to see if they are indeed lost," he added. 6600 !GCAT !GCRIM !GPOL !GVIO The detention of veteran dissident Wang Donghai showed China's determination to crush any vestige of dissent during the current profound transitions in the nation's leadership, a human rights activist said on Saturday. Xiao Qiang, executive director of the New York-based group Human Rights in China, said Wang's arrest on Friday appeared to be part of the national "Strike Hard" campaign that has imprisoned thousands and sent hundreds to their death. Although supposedly aimed at criminals, dozens of human rights activists have been detained in the campaign, which is meant to strengthen the Communist Party's grip on power as senior leader Deng Xiaoping nears death, Xiao said in an interview. "China is going through this power transition period. The authorities are apparently extremely afraid of any political and social discontent," said Xiao, in Manila to attend an Amnesty International conference on human rights in China. He said one of Wang's apparent offences was to write a public letter in May suggesting that a free press and an independent judicial system were vital if the government really meant to stamp out rampant corruption. Xiao said crushing legitimate dissent was only making the problem worse and one day China would pay a high price. "Those issues are not going to go away by repression. You only make things more hidden but potentially more explosive," he said. Wang was arrested in the east China city of Hangzhou by security officers who told the dissident's family he would be sent to a study class -- a euphemism for coercive ideological reform. Wang, 45, was sentenced last month to one year's "re-education by labour" but was released because of ill-health. Xiao said conditions in the labour camp were so brutal they drove another activist sentenced with Wang to attempt suicide. Police beat Wang and his colleague, Chen Longde, and encouraged other camp inmates to attack them as well, Xiao said. 6601 !GCAT !GDIP !GVIO Philippine president Fidel Ramos expressed gratitude to Indonesian president Suharto and the Organisation of Islamic Conference (OIC) on Saturday for supporting talks that ended a conflict with local Moslem rebels. "I extend the deepest gratitude ... to your excellency for your untiring and invaluable friendship and support," Ramos told Suharto in a letter. The full text of the letter was released to reporters on Saturday. Jakarta served as the host to the series of negotiations which culminated in the initialling of the agreement last Friday. The formal signing of the peace agreement is scheduled on Monday in Manila. Ramos said the peace agreement "shall bring down the curtain on a long and storied era of strife in Philippine history." The war claimed more than 125,000 lives in the southern Mindanao island over a quarter of a century. 6602 !GCAT !GDIP !GVIO Senior Cambodian military and provincial officials said on Saturday they had received no evidence to confirm a report that Khmer Rouge guerrillas have executed British mines disposal expert Christopher Howes. Prom Sanein, deputy commander of the fourth military region where Howes and his interpreter Houn Hourth were abducted in late March, had heard nothing new on the 36-year-old Briton. Howes, from the Mines Advisory Group (MAG), was part of a five-man team of expatriate mine specialists training civilians in the detection and destruction of anti-personnel mines. Hem Bunheng, a deputy governor of the northwest province of Siem Reap, said by telephone that he and the military had received no information that Howes had been killed, adding: "the situation is normal." A source in Thailand, citing an informant, said he believed Howes was still alive and being held in areas controlled by one-legged Khmer Rouge commander Ta Mok. The Bangkok Post on Friday carried a front page report from the Thai-Cambodian border citing an unnamed Khmer Rouge officer as saying that Howes had been executed at noon on Thursday in Ta Mok's northern stronghold of Anlong Veng. The officer, loyal to Khmer Rouge supremo Pol Pot and Ta Mok in a split within the secretive movement, gave no clear reason for the alleged murder saying only that it was linked to a rebellion on Wednesday by dissidents in a Pol Pot camp. The report said one of two Cambodians seized with Howes in March had died of malaria in July, but observers said Houn Hourth was the only known Cambodian captive. A MAG official in Phnom Penh said that as far as the organisation was concerned the latest development was still an unconfirmed report, while a British diplomat said the embassy was trying to corroborate the report. Troops loyal to Ieng Sary, foreign minister in Pol Pot's brutal 1975-79 Khmer Rouge regime, have broken with the hardliners and opened peace negotiations with the government. Khmer Rouge radio, which remains under the control of Pol Pot and Ta Mok loyalists, signalled the rift on August 8 when it accused Ieng Sary of massive embezzlement and ordered his execution. Ieng Sary was sentenced to death in absentia for his roles in the premature deaths of more than one million people during the Khmer Rouge rule. The Maoist faction was included in the U.N.-brokered peace pact of 1991 but later reneged on the deal and has been fighting the coalition government that emerged from general elections in 1993. The rebels have since abducted at least seven westerners and are known to have killed six of them. 6603 !GCAT !GDIP !GVIO The Philippines plans to use the signing ceremony of a peace deal with local Moslem rebels on Monday as an opportunity to urge Indonesia to free 81 Filipino fishermen, the presidential palace said on Saturday. "President Ramos can take advantage of the presence of Indonesian officials at the signing rites for the Mindanao peace agreement to regain the freedom of 81 Filipino fishermen," the palace said in a statement. The Filipino fishermen were caught while fishing around Gebe and Waigeo islands of Indonesia. They have been detained in Sorong province and are scheduled to face trial this month. An Indonesian delegation, to be led by its foreign minister Ali Alatas, will witness the signing of a peace agreement which was finalised and initialled in Jakarta. Member-countries of the Organisation of Islamic Conference will lead observers at the signing of an agreement that will end the 24-year-long conflict in the southern Philippines. President Ramos earlier assured the families of the fishermen that they would be freed soon. 6604 !GCAT !GVIO Six more Indonesian hostages were freed by kidnappers in remote Irian Jaya province on Saturday morning after three were found on Friday, the Suara Pembaruan newspaper reported. The daily said the nine men were part of a group of 12 forestry workers of PT Kamundan Raya, a unit of timber giant Djajanti group. They were kidnapped by bandits on August 14 from a base camp 60 km (37 miles) east of the mining town of Timika. It quoted district military chief Colonel Frans de Wanna as saying the bandits, who were surrounded by troops, managed to escape and left the hostages at different locations. "We continue to chase after the bandits while we pursue the search for the remaining three hostages," de Wanna said. De Wanna, commanding a search involving more than 100 troops with tracking dogs, said the six freed hostages were physically weak but in good condition. De Wanna described the kidnappers as a security disturbing group, a name used by the military for the separatist Free Papua Movement (OPM), whose armed rebels have campaigned against Indonesian rule in the former Dutch colony since 1963. Earlier this year, the OPM held 11 people, including five Europeans, for more than four months in what it said was an act aimed to publicise its fight for an independent Irian Jaya. In May, all but two of the hostages escaped after an army operation to free them. Two Indonesians were killed by their captors. 6605 !GCAT !GPOL Asia settled in this weekend to a back-of-the-bus look at the U.S. presidential race with North Korea the only regional issue likely to cause sparks between President Clinton and Bob Dole. With both Clinton and Dole now formally nominated, no Asian diplomat expects U.S. policy in the region to be anything but a minor sideshow to the main campaign event. "If Asia figures at all, it will be a re-run of recent U.S. presidential races where each candidate boasts about carrying the biggest stick on trade and human rights," one Southeast Asian diplomat said. Even on trade with Japan, usually the favourite Asian topic of recent U.S. presidential candidates, the rhetoric ahead this time looks less threatening. "Foreign relations issues have not been taken up at length in recent U.S. presidential campaigns, and this time it is unlikely Japan will be singled out for bashing," said Seizaburo Sato, professor of International Politics at Keio University. "It is true trade friction still exists between the United States and Japan, but it is not as tense at it used to be, and if trade was to become a campaign issue, then the U.S. has China and other countries to worry about as well," Sato said. "Things will be quiet during the campaign period." A policy platform adopted during the Democratic convention vowed to keep up pressure on Japan but also boasted: "We have put in place the most sweeping agreements to lower foreign trade barriers of any administration in modern American history, including over 20 such agreements with Japan alone -- and American exports to Japan in the sectors covered by those agreements have increased by 85 percent." Dole has been dismissive of Clinton's efforts on Japan and made his own trade vow: "My administration will fully enforce our trade laws, negotiate effective trade agreements, and not let our national sovereignty be infringed by the World Trade Organization or any other international body. "By any measure trade policy of the Clinton administration has been a disaster -- trade deficits are skyrocketing and middle-income families are paying the price." However with their economies booming and increasingly diversified, most Asian leaders no longer feel a need to factor in who will occupy the White House as part of economic planning. Indeed this time round, the man who wins the White House may be more preoccupied with who is leading Asia when he takes office, rather than the other way round. During his four years in office, Clinton mainly saw a stable political shore when he looked West across the Pacific Ocean. That is changing. Just since Clinton and Dole took to the campaign trail this year, new governments have come to power in India and Australia and signs of unrest have emerged in Indonesia where President Suharto has had a long unchallenged grip on power. On the horizon, Japan and South Korea go to the polls in the next year while there is the always-present worry about China's leadership after the death of paramount leader Deng Xiaoping. And finally there is North Korea, ironically the least significant Asian nation on the trade front, but the most worrisome in security terms. Dole vows to stop "coddling" the secretive communist nation with agreements worked out by President Clinton to persuade Pyongyang to drop its suspected nuclear weapons programme. The issue is one that diplomats believe may come to the fore in the presidential campaign debates over the next month with Dole seeking to show Clinton lacks foreign policy iron. North Korea already has opened debate on the subject, warning that if the White House is being readied for a president who is against the agreements that it is ready to drop them at a minute's notice. 6606 !GCAT !GPOL Burma's democracy leader Aung San Suu Kyi hit out at the government on Saturday for recent arrests and jailing of activists, saying the military abused the law to try to crush the democracy movement. "The main purpose of this press conference is to make it known to the world that the authorities are misusing the law all the time in order to try to crush the democracy movement," Suu Kyi told reporters at her Rangoon home. Suu Kyi said at least 61 democracy supporters had been arrested since May, and about 30 of them had been sentenced, most to long prison terms. In May the government launched a sweeping crackdown on the democracy movement, detaining over 260 members of Suu Kyi's National League for Democracy (NLD) ahead of a party congress. Most were released but several dozen remain in custody. The Burmese government last week confirmed the recent sentencing of nine democracy activists who were arrested in the May crackdown, including Suu Kyi's assistant Win Htein. The military government, which in May said it had detained the politicians to prevent anarchy, said the activists were charged with attempting to destroy the peace and stability of the state. But Suu Kyi disagreed with the methods, saying officials often arrested NLD supporters in the middle of the night, then did not give them the opportunity to defend themselves in trials. "When our people are tried, they are tried in a very secretive way. Their families are not told," she said. Suu Kyi, who spearheads a campaign for sanctions on Burma's government, was under house arrest for six years without being tried before being released in July 1995. Several other leading members of the NLD have served prison terms. The NLD party won a landslide victory in a 1990 election but the State Law and Order Restoration Council (SLORC), which assumed power in 1988 after crushing pro-democracy demonstrations, never recognised the poll. "This lack of rule of law is an indication that the authorities are not interested in fair play," she said. "They are using a travesty of the law to try and crush our movements and to sentence our people to long terms in prison without proper trial." Suu Kyi said once the activists were sentenced, they suffered inhuman conditions and lack of rights in prison. "Almost all of the prisoners start suffering from various health problems after a couple of years in jail," she said. "Some of our people have been in prison for five to six years." Most political prisoners are held in Rangoon's Insein Prison. Some who have been released have recounted torture methods like sleep and food deprivation and physical abuse. "If there are any more instances of death in custody it will be further proof that a prison sentence for political prisoners is sometimes almost the same as a death sentence," Suu Kyi said. Hla Than, an elected member of parliament for the NLD, died in early August after being at Insein for six years. His death came five weeks after James Leander (Leo) Nichols, a close friend of Suu Kyi and Danish honorary consul, died while serving a prison term at Insein. Suu Kyi said the government had increased its repression tactics on the democracy movement because it feared the growing popularity of the movement. But she said she and the NLD would not stop their efforts to bring democracy to Burma even if it meant more arrests of party members or even herself. "We will carry on. Nobody is free from arrest in Burma." 6607 !GCAT !GVIO Christian militants set off five explosions in a southern Philippine town in protest against Manila's peace deal with Moslem rebels, police said on Saturday. No casualties or damage was reported in the blasts which occurred before dawn on Friday in the main square of Dumingag town in Zamboanga del Sur province, a centre of Christian resistance to the accord. Police said the blasts were caused by home-made bombs but a report from an army unit stationed in Dumingag said the explosions came from big firecrackers. The militants, calling themselves the Mindanao Christian Unified Command (MCUC), left behind leaflets warning of bloodshed if President Fidel Ramos went ahead with the accord with the Moro National Liberation Front (MNLF). The accord calls for the setting up of a Southern Philippine Council for Peace and Development (SPCPD) led by MNLF chief Nur Misuari to supervise development of 14 southern provinces in the Mindanao region. The council will be followed by a plebiscite and regional autonomy three years later. "Ramos and Misuari, don't force the SPCPD on us so that there will be no bloodshed in Mindanao," said one leaflet . The explosions occurred the day government and MNLF panels initialled the peace agreement in Jakarta, Indonesia, on Friday. A formal signing of the accord is to be held in Manila on Monday. Christian residents of Mindanao have opposed the accord, accusing Ramos of a sell-out, and threatened to form vigilante groups to fight the deal. The Philippines' five million Moslems regard Mindanao as their ancestral homeland although they are now outnumbered three-to-one by Christian settlers in the region. 6608 !GCAT !GDIP !GVIO North Korea demanded on Saturday that South Korea return a northern war veteran who has been in the South since the 1950-53 war, Seoul's unification ministry said. "...I request the immediate repatriation of Kim In-so to North Korea where his family is waiting," North Korean Red Cross president Li Song-ho said in a telephone message to his southern couterpart, Kang Young-hoon. Li said Kim had been critically ill with a cerebral haemorrhage. The message was distributed to the press by the South Korean unification ministry. Kim, an unrepentant communist, was captured during the Korean War and released after spending more than 30 years in a southern jail. He submitted a petition to the International Red Cross in 1993 asking for his repatriation. The domestic Yonhap news agency said the South Korean government would consider the northern demand only if the North accepted Seoul's requests, which include regular reunions of families split by the Korean War. Government officials were not available to comment. South Korea in 1993 unconditionally repatriated Li In-mo, a nothern partisan seized by the South during the war and jailed for more than three decades. 6609 !GCAT !GPOL Cambodia's co-Prime Minister Hun Sen said on Saturday that dissident Khmer Rouge guerrillas would have to hand over their territory before they could set up a political party. Hun Sen's remarks reflected a toughening in the government's position towards the breakaway guerrillas, who have been negotiating peace with the government in Cambodia's northwest provinces of Battambang and Banteay Meanchey, analysts said. "The constitution says Cambodia cannot be divided...The government cannot negotiate with other political or military organisations that hold territory," he said in a speech to mark the opening of a market in this northwest city. "Anyone can set up an (political) organisation or association after their territory is put under the control of the government and they must obey the constitution and law of the kingdom of Cambodia," added Hun Sen, who is co-prime minister along with Prince Norodom Ranariddh. Hun Sen announced on August 8 that two Khmer Rouge divisional commanders had defected to the government with some 3,000 fighters in the northwest bases of Phnom Malai and Pailin. Ieng Sary, a founder of the Khmer Rouge and foreign minister in its reviled 1975-79 "killing fields" rule, this week confirmed that he and followers in the northwest had broken with Pol Pot and other hardliners of the Maoist guerrilla group. The dissident leader, who in 1979 was sentenced to death in absentia for his role in the deaths of more than one million people during the Khmer Rouge reign, announced the formation of the Democratic National United Movement to end the war and negotiate reconciliation. Hun Sen had earlier said the dissidents would be able to keep their land and retain their positions in the northwest. But the guerrillas appear to be demanding an autonomous zone and the right to fight elections nationwide in 1998, analysts said. Khmer Rouge official Long Norin said on Wednesday that Ieng Sary had decided "that government troops will be allowed to be deployed in the liberated zones only after the next general election, when our faction also plans to file candidates". Hun Sen noted that a 1994 law banning the Khmer Rouge was still in effect, but the government still welcomed defectors and it was no longer necessary to maintain the legislation as the situation was improving. He said several factors had contributed to the demise of the guerrilla group, including the end of the Cold War, 1993 elections that ushered in a government recognised worldwide, improved relations and economic and rural development. The split within the movement had provided the final ingredient, and Hun Sen said: "These five factors can end the Khmer Rouge very soon." The prime minister neither confirmed nor denied speculation that he had come to the northwest to meet Ieng Sary, noting only that many journalists were in Battambang in the belief he would meet the dissident leader. 6610 !GCAT !GCRIM Chinese police have detained veteran dissident Wang Donghai, the New York-based pressure group Human Rights in China said on Saturday. Police in Hangzhou, capital of the eastern province of Zhejiang, told Wang's family that Wang would be sent to a study class, a euphemism for coercive ideological reform, the group said. Police gave no reason for detaining Wang on Friday and would not let his family meet him or say where he was being held, the group said. Police also would not say why Wang was being sent to a study class -- a holdover from the chaotic 1966-76 Cultural Revolution -- or say when he would be released, the group said. Wang's family and Hangzhou police could not be reached for immediate comment. The group demanded Wang's release and said his detention was a dangerous signal China was returning to its Cultural Revolution days. Last month, Wang, 45, a veteran dissident of the 1979 Democracy Wall movement, was ordered to serve one year of "re-education through labour", but released because of poor health. Re-education through labour is an administrative punishment with a maximum of three years that can be imposed by police without recourse to prosecutors or the courts. Wang was jailed for two years for organising street protests after the military crushed pro-democracy demonstrations by students at Beijing's Tiananmen Square on June 4, 1989, with heavy loss of life. Chinese authorities appeared to be using administrative punishment more frequently to take dissidents out of circulation without having to go through a more complicated judicial process to impose criminal sentences, Western diplomats have said. 6611 !GCAT !GCRIM !GPOL Former South Korean president Chun Doo Hwan on Saturday appealed against his death sentence handed down on Monday, ending days of speculation about whether he was prepared to go meekly to the gallows. Chun was convicted of leading a 1979 coup and then ordering troops to crush resistance by pro-democracy activists in the southern city of Kwangju in a 1980 massacre. His successor, Roh Tae-woo, also appealed against his 22-1/2 year jail term for playing a secondary role in the coup and Kwangju killings. Both men were further convicted of amassing vast fortunes by soliciting bribes from business tycoons. "I decided to appeal because it is the duty of former presidents to reveal the truth," Chun was quoted by his lawyer, Chun Sang-suk, as saying, according to a report by the domestic Yonhap news agency. Chun and Roh had seven days to challenge the court's verdicts, but media reports at one point quoted Chun's lawyers as saying he may not bother. The appeals could drag on for up to eight months if the two former generals fight all the way to the Supreme Court. But many Koreans believe that regardless of the result, current President Kim Young-sam is likely to pardon Chun and Roh before he steps down at the end of next year. The one-time military academy classmates have defended their grab for power as being necessary to restore order and avert possible North Korean military action following the assassination of president Park Chung-hee. More than a score of former presidential aides and former generals were sentenced with Chun and Roh along with nine leading businessmen convicted of offering bribes. 6612 !GCAT !GCRIM A fishing boat on which 11 seamen died during an apparent mutiny in the South Pacific arrived in South Korea on Saturday, and the suspected mutineers were led away in handcuffs. The Honduras-registered Pescamar No. 15, a rusty tuna fishing vessel, was towed into Pusan by a South Korean maritime police vessel. Six mainland Chinese of Korean descent, who police say mutinied over harsh conditions imposed by the South Korean skipper, were transferred from the police vessel to a smaller police launch outside the harbour. Media reports of death on the high seas, including one account of victims perishing in the Pescamar's deep freeze, have gripped South Koreans. The incident has drawn attention to cruel treatment meted out by South Korean employers to Asian workers. Roped together and handcuffed as they clambered from one boat to another at around dawn, the Chinese appeared exhausted and frightened. Later they were led ashore by two police officers and marched into a police station on the pier where they were given medical checks. They were dressed in T-shirts and jeans and their heads were bowed. The six have not yet been formally charged. Seven other survivors -- one Korean and six Indonesians -- were also hustled into the police station after stepping off the Pescamar, whose decks were cluttered with empty wooden fish boxes. Investigators were expected to spend several days quizzing all the seamen. Contact with the 250-gross ton Pescamar was lost on August 3 after the captain radioed to say he was heading for the South Pacific island of Samoa to drop off Chinese crew members who refused to work. The vessel was found last Sunday by Japanese maritime police drifting without fuel south of Japan. In addition to captain Choi Ki-taek, six other South Koreans, one mainland Chinese of Korean descent and three Indonesians were killed. All the bodies are lost at sea, although it is not clear whether the victims were dumped overboard dead or alive. The domestic Yonhap news agency quoted a South Korean police officer as saying when he first boarded the Pescamar, the surviving Indonesians were in the wheelhouse "quivering with fear". "I couldn't see blood, but I could smell it," he said. South Korean police earlier quoted survivors as saying the mutineers murdered the captain and loyal crew after he refused to put them ashore at the nearest port. They killed one of their own and the Indonesians by locking them in the deep freeze. Somehow, the survivors managed to turn the tables on the mutineers. The return of the Pescamar to South Korea ended a five-nation wrangle involving South Korea, Japan, Indonesia, Honduras and Oman. The boat has Omani owners. South Korean media reports said China, too, was likely to insist on access to the suspects. 6613 !GCAT !GCRIM !GPOL Former South Korean president Roh Tae-woo on Saturday appealed against his 22-1/2 year jail sentence on charges of mutiny, treason and corruption, a court official said. One of his lawyers filed the appeal with the Seoul District Criminal Court against the sentence imposed on Monday, the official said. 6614 !GCAT !GCRIM Chinese police have detained dissident Wang Donghai, the New York-based pressure group Human Rights in China said on Saturday. Police detained Wang on Friday and would not let his family meet him or say where he was being held, the group said. The pressure group said Wang would be sent to a study class, often a euphemism in China for ideological reform. Wang's family could not immediately be reached for comment. Last month, Wang, 45, a veteran dissident of the 1979 Democracy Wall movement, was ordered to serve one year of "re-education through labour", but released because of poor health. Re-education through labour is an administrative punishment with a maximum of three years that can be imposed by police without recourse to prosecutors or the courts. Wang was jailed for two years for organising street protests after the military brutally crushed pro-democracy demonstrations by students at Beijing's Tiananmen Square on June 4, 1989, with heavy loss of life. 6615 !GCAT !GCRIM !GPOL Disgraced former South Korean president Roh Tae-woo will appeal against a 22-1/2 jail sentence handed down on Monday on charges of mutiny, treason and bribery, an official in his lawyer's office said on Saturday. He said the appeal would be filed later on Saturday in the Seoul District Criminal Court. Roh was jailed for his secondary role in a 1979 coup masterminded by his predecessor Chun Doo Hwan and an army massacre of pro-democracy students the following year in the southern city of Kwangju. Chun appealed against his death sentence on Saturday. Both men were also convicted of taking huge bribes from business tycoons during their terms from 1980-93. Chun and Roh had seven days to appeal against their convictions. 6616 !GCAT !GCRIM An 88-year-old army veteran was jailed for 15 years by a Hong Kong court for drugs trafficking after he admitted he had stashed heroin under his mattress, a newspaper said on Saturday. "I am sorry to my ancestors for five generations," Chen Chun-yeh told the High Court after sentencing on Friday, the Hong Kong Standard said. "Tell my sons to collect my bones," he said after hearing he was likely to die behind bars. Chen, a former army secretary of the Chinese Nationalist regime which fled from mainland China to Taiwan in 1949, pleaded guilty to trafficking 42 kg (92 pounds) of drugs that could have been turned into 25 kg (55 pounds) of heroin. The ex-officer admitted stashing heroin under his mattress. 6617 !GCAT !GCRIM Former South Korean president Chun Doo Hwan on Saturday appealed against a death sentence imposed on Monday for mutiny, treason and corruption, a Seoul court official said. He said one of Chun's lawyers, Chung Sang-suk, filed the application. Chun had seven days to make an appeal, although media reports at one point quoted his lawyers as saying he may not appeal. He was sentenced along with his successor Roh Tae-woo, who was handed a 22-1/2 year jail sentence for playing a secondary role with Chun in a 1979 coup and a 1980 army massacre of pro-democracy rebels in the southern city of Kwangju. Both men were also convicted of taking huge bribes from business tycoons during their terms from 1980-93. There was still no word on whether Roh would appeal. 6618 !GCAT !GPOL !GPRO China's ailing patriarch Deng Xiaoping received visits from several senior Chinese leaders in Beijing on his 92nd birthday on August 22 but he was too frail to talk, a Hong Kong newspaper said on Saturday. The leaders who visited Deng included President Jiang Zemin and Premier Li Peng, the South China Morning Post quoted a source close to Deng's family as saying. It said several children of Communist Party elders and retired People's Liberation Army generals also made the trip to the Deng house, just north of the Zhongnanhai party office. "There is no focus to Deng's gaze ... He has lost a lot of weight. He seemed to recognise his visitors and on a few occasions nodded his head slightly to show recognition. But he failed to manage a smile," the source was quoted as saying. "The old man said very little and could not finish a single sentence. In any case, his voice was so weak not even his daughters could make out what he said." One visitor had tried to shake Deng's hand as it lay on an arm-rest, but the patriarch made no effort to lift his hand. The report said Deng's health had worsened since his 91st birthday, when he was said to be still able to utter a few audible words and issue political instructions. Deng, who retired from formal political life in 1992, has not been seen in public for more than two years, but analysts say the man who sent China down the road to market reforms still influences his appointed successors. 6619 !C13 !CCAT !GCAT !GENV Two Chinese cities are to ban the use of disposable plastic containers as part of efforts to fight pollution, the China Daily said on Saturday. Authorities in Wuhan, capital of the central province of Hubei, would punish those who sell or use disposable plastic containers from September 1, the newspaper said. It did not elaborate. The city's industrial and commercial departments would confiscate disposable plastic containers and police would prevent new ones from entering the city, it said. Wuhan consumes more than 200 million disposable plastic containers a year, the newspaper said. The boomtown of Guangzhou, capital of the southern province of Guangdong, would ban disposable plastic containers by the end of 1996, it said. Guangzhou uses up 500,000 such containers each day, the newspaper said. It gave no further details. 6620 !GCAT !GVIO Iraqi troops and tanks supporting a Kurdish rebel faction captured the city of Arbil in northern Iraq from a rival Kurdish force on Saturday, prompting President Bill Clinton to place U.S. forces in the region on high alert. Residents in Arbil reported heavy casualties from shelling and said terrified civilians were fleeing. "My people on the ground confirm that Iraqi troops have entered Arbil at 3.45 p.m. (1145 GMT)," said a U.N. official who declined to be named. He said a joint force of Iraqi troops and rebels from Massoud Barzani's Kurdistan Democratic Party (KDP) had seized control of Arbil from forces of the rival Patriotic Union of Kurdistan (PUK) and by evening there was only sporadic shooting. The Iraqi flag was flying above what used to be the Kurdish parliament building in Arbil, a U.N. official in Geneva said. Clinton, speaking at a stop on a campaign bus tour in the midwest, said the developments caused him "grave concern". "I have placed our forces in the region on high alert and they are now being reinforced," he said. "Early this morning the military forces of Iraq overran the city of Arbil which is in the portion of northern Iraq controlled and populated by the Kurds. The situation there remains unclear. There are reports of heavy fighting and firing in populated areas," Clinton told a crowd at the Tennessee town of Troy. "It is premature at this time, and I want to emphasise that, highly premature to speculate on any response we might have," Clinton said. U.N. sources said about 12,000 Iraqi troops helped the KDP to capture Arbil, which had been a PUK stronghold since fighting between rival factions in the city in 1994 and used to have a population of some 800,000. There were unconfirmed reports that Iran had sent troops into northern Iraq in response to the Iraqi attack on Arbil. "They entered this morning. They have occupied the area to the depth of 40 km (25 miles). They have established a headquarters in Chuman," Faik Nerweyi of the KDP told Reuters in Ankara. Chuman is on the main highway leading to Arbil from the Iranian border, some 90 km (55 miles) northeast of Arbil as the crow flies but further by the winding, mountainous road. Arbil lies about 20 km (12 miles) north of the 36th parallel -- the line that Iraqi forces have been barred by allied forces from crossing since the aftermath of the 1991 Gulf War. U.S., British and French warplanes are based in southern Turkey under Operation Provide Comfort to enforce a no-fly zone above the 36th parallel. PUK leader Jalal Talabani told Reuters by telephone from Arbil that he had warned Washington three days in advance that the Iraqi forces were prepared to attack Arbil. "The Americans promised to attack them (the Iraqis). They did not act decisively," Talabani said. The British Broadcasting Corporation quoted Talabani as saying his forces were still resisting the Iraqi attack but that much of the city was under Iraqi control. There had been no mass exodus of civilians, he said. A senior administration official accompanying Clinton said the Iraqi troops surrounding Arbil consisted of three tank divisions of 30,000 to 40,000 Republican guard troops equipped with heavy artillery and surface-to-air missiles. He said it was the first such deployment by Iraq since shortly after the end of 1991 when President Saddam Hussein tried to seize control of northern Iraq, creating an exodus of some two million Kurdish refugees. Defence officials said at 1600 GMT that no U.S. forces had actually moved. But they said planning had been completed for the use, if ordered by Clinton, of the 200 U.S. warplanes in the region plus up to 40 others from the United States. They said 79 of the 200 fighter planes in the region were on the aircraft carrier Carl Vinson and the rest were enforcing no-fly zones in both northern and southern Iraq, where they said flights have doubled. The two Kurdish factions, split along political and tribal lines, have a long history of bloodshed and shifting alliances with the main powers in the region -- Iraq and Iran. The Iraqi government in Baghdad said it had decided to "provide support and military aid" for the KDP in its fight against the PUK. In a statement carried by the official Iraqi News Agency (INA), Deputy Prime Minister Tareq Aziz said Iraq's military intervention was in response to a plea from Barzani to Saddam to back him against attacks by Iran and Talabani. The KDP has long sought to break the grip of the PUK over Arbil, the seat of a Kurdish government and parliament that was created jointly by the two factions in elections in 1992. The United States twice negotiated a ceasefire between the two rival Kurdish factions this month. But there were repeated violations. The two factions met at the U.S. embassy in London on Friday for talks to consolidate the ceasefire. 6621 !GCAT !GVIO Iraqi troops and tanks supporting a Kurdish rebel faction captured the city of Arbil in northern Iraq from a rival Kurdish force on Saturday and raised the Iraqi flag there, a U.N. relief official said. Residents reported heavy casualties from shelling and said terrified civilians were fleeing. President Bill Clinton placed U.S. forces in the Gulf region on "high alert". "My people on the ground confirm that Iraqi troops have entered Arbil at 3.45 p.m. (1145 GMT)," said a U.N. official who declined to be named. He said a joint force of Iraqi troops and rebels from Massoud Barzani's Kurdistan Democratic Party (KDP) had seized control of Arbil from forces of the rival Patriotic Union of Kurdistan (PUK) and by evening there was only sporadic shooting in the city. The Iraqi flag was flying above what used to be the Kurdish parliament building in Arbil, a U.N. official in Geneva said. U.N. sources said about 12,000 Iraqi troops were helping the KDP to capture the city, which had been a PUK stronghold since fighting between rival factions in the city in 1994 and used to have a population of some 800,000. There were unconfirmed reports that Iran had sent troops into northern Iraq in response to the Iraqi attack on Arbil. "They entered this morning. They have occupied the area to the depth of 40 km (25 miles). They have established a headquarters in Chuman," Faik Nerweyi of the KDP told Reuters in Ankara. Chuman is on the main highway leading to Arbil from the Iranian border, some 90 km (55 miles) northeast of Arbil as the crow flies but further by the winding, mountainous road. Arbil lies about 20 km (12 miles) north of the 36th parallel -- the line that Iraqi forces have been barred by allied forces from crossing since the aftermath of the 1991 Gulf War. U.S., British and French warplanes are based in southern Turkey under Operation Provide Comfort to enforce a no-fly zone above the 36th parallel. PUK leader Jalal Talabani told Reuters by telephone from Arbil that he had warned Washington three days in advance that the Iraqi forces were prepared to attack Arbil. "The Americans promised to attack them (the Iraqis). They did not act decisively," Talabani said. The British Broadcasting Corporation quoted Talabani as saying his forces were still resisting the Iraqi attack but that much of the city was under Iraqi control. There had been no mass exodus of civilians, he said. Speaking at a stop on an election campaign bus tour in the midwest, Clinton said Iraqi forces had overrun Arbil and heavy fighting was underway there. "These developments, however, cause me grave concern. I have placed our forces in the region on high alert and they are now being reinforced," he said. He added it was premature to speculate on U.S. actions. A senior administration official accompanying Clinton said the Iraqi troops surrounding Arbil consisted of three tank divisions of 30,000 to 40,000 Republican guard troops equipped with heavy artillery and surface-to-air missiles. He said it was the first such deployment by Iraq since shortly after the end of 1991 when President Saddam Hussein tried to seize control of northern Iraq, creating an exodus of some two million Kurdish refugees. Defence officials said at 1600 GMT that no U.S. forces had actually moved. But they said planning had been completed for the use, if ordered by Clinton, of the 200 U.S. warplanes in the region plus up to 40 others from the United States. They said 79 of the 200 fighter planes in the region were on the aircraft carrier Carl Vinson and the rest were enforcing no-fly zones in both northern and southern Iraq, where they said flights have doubled. The two Kurdish factions, split along political and tribal lines, have a long history of bloodshed and shifting alliances with the main powers in the region -- Iraq and Iran. The Iraqi government in Baghdad said it had decided to "provide support and military aid" for the KDP in its fight against the PUK. In a statement carried by the official Iraqi News Agency (INA), Deputy Prime Minister Tareq Aziz said Iraq's military intervention was in response to a plea from Barzani to Saddam to back him against attacks by Iran and Talabani. The KDP has long sought to break the grip of the PUK over Arbil, the seat of a Kurdish government and parliament that was created jointly by the two factions in elections in 1992. The United States twice negotiated a ceasefire between the two rival Kurdish factions this month. But there were repeated violations. The two factions met at the U.S. embassy in London on Friday for talks to consolidate the ceasefire. Analysts said Saddam was testing the West's resolve. "He is trying to challenge the West at its own game...He is being an opportunist. Whether he pursues it will be dependent totally on the Western reponse," John Roberts, editor of the Middle East Monitor, told Reuters. 6622 !GCAT !GCRIM !GPOL !GVIO Palestinian authorities on Saturday released 33 Islamic activists jailed since a wave of suicide bombings in Israel beginning in February, a Palestinian security official said. He said the 22 prisoners were released from Jenin prison in the West Bank. Later on Saturday officials freed 11 other activists from the prison in Bethlehem. Palestinian police rounded up hundreds of Islamists in a crackdown on the Hamas and Islamic Jihad groups which have spearheaded opposition to Israel-PLO peace deals. Relatives of the prisoners have assailed Arafat for holding the activists for months without trial. Hundreds remain behind bars. The official said the freed prisoners had signed a commitment to respect the law and refrain from violent activity. The bombings carried out by Moslem militants in February and March killed 59 people in the Jewish state. 6623 !GCAT !GPOL Palestinian President Yasser Arafat said on Saturday Palestinians might resurrect their national uprising against Israeli occupation if the peace process failed. But in a move that could ease tensions, a PLO official said Arafat and Israeli Prime Minister Benjamin Netanyahu would meet "very soon". "A meeting btween Arafat and Netanyahu will take place very soon. No date has been set yet. There are contacts to prepare for this meeting," the official, who refused to be named, told Reuters. Netanyahu has angered Palestinians by refusing so far to meet with Arafat, Israel's partner in a landmark 1993 peace deal forged by the former Labour government of Shimon Peres. "One of our options is to return to the intifida (uprising)," Arafat told high school students in the West Bank town of Nablus on the first day of the new school year. "You remember I described you as the generals of the stones. Keep up the spirit of resistance," he said, referring to a seven-year Palestinian uprising against Israeli rule launched in 1987 by stone-throwing youths. It was the second time in two days Arafat warned Israel that Palestinians had other options to peace. Arafat called on Christian Palestinians to stage a mass prayer on Sunday at the Church of the Holy Sepulchre, the holiest Christian site in Jerusalem, to protest against Israel's plans to expand Jewish settlements. Arafat turned up the heat on the Israeli leader this week to withdraw from Hebron in the West Bank and honour other peace deal commitments, calling strikes and protests against the Jewish state. Netanyahu responded by sending aides and negotiators on Thursday to meet PLO officials, but Palestinians said the talks were useless. "The Israeli side has rejected any attempt at advancing the peace process. Its policy is to play the game of foot-dragging and stalling," said Palestinian Authority member and peace negotiator Saeb Erekat. He spoke after members of the Authority met in Nablus to assess the latest contacts with Israel. Members of Netanyahu's government insist the talks are moving forward and a decision on Hebron will be made soon. A cabinet statement issued on Friday said Netanyahu had formed a ministerial committee, that included himself, Foreign Minister David Levy and Defence Minister Yitzhak Mordechai, to oversee contacts with the Palestinians. Israeli media reports said Netanyahu refused to add hardline cabinet minister Ariel Sharon to the committee. Israel agreed in a deal with the Palestinians last year to withdraw troops from most of Hebron, home to 100,000 Arabs and around 400 Jewish settlers, but postponed the pullback after a Islamic suicide bombing spree in February and March. Netanyahu has said he is considering ways to implement the withdrawal while protecting Jewish settlers in the city. "The Palestinian Authority rejects Israeli attempts to renegotiate any issue that has been agreed upon with the Israeli government," Erekat said after Saturday's cabinet meeting. Arafat said this week the Israeli government's decision to expand Jewish settlements and its demolition of an Arab community centre under construction in East Jerusalem were tantamount to war. But only about 20,000 Moslems participated in a protest prayer at the al-Aqsa mosque on Friday in Jerusalem. Israeli soldiers blocked West Bank Arabs from reaching the mosque. 6624 !GCAT !GVIO Iranian troops on Saturday entered Kurdish-controlled northern Iraq in the wake of an assault backed by Baghdad into the region, an Iraqi Kurdish group told Reuters. "They entered this morning. They have occupied the area to the depth of 40 km (25 miles). They have established a headquarters in Chuman," Faik Nerweyi of the Kurdistan Democratic Party (KDP) told Reuters by telephone from Ankara. Nerweyi said he did not know the size or nature of the Iranian force in northern Iraq, but said KDP fighters had been easily outgunned in the area close to the Iranian border and had quickly withdrawn further west. "They were far too strong," he said. Nerweyi said he did not know if there were any casualties. A U.N. official in Baghdad said the KDP, backed by Iraqi tanks, heavy artillery and helicopters had taken control of the main northern Iraqi city of Arbil after fighting on Saturday. U.S. President Bill Clinton has authorised the repositioning of U.S. firepower in the Gulf region in response to the Iraqi attacks. The KDP charges that the rival Patriotic Union of Kurdistan, which took control of Arbil in fighting in December 1994, has backing from Iran. The PUK accuses the KDP of collaborating with Baghdad. Northern Iraq has been under Iraqi Kurdish control since after the 1991 Gulf War. U.S.-led allied planes based in Turkey are intended to protect the Kurds from Baghdad. 6625 !GCAT !GDIP !GVIO Kurdish leader Jalal Talabani said on Saturday he had warned Washington of impending attack on the main city of the rebel Kurdish zone by Iraqi President Saddam Hussein, winning a promise of "lethal" retaliation. But Talabani chided the United States, which leads western air patrols over a safe zone in northern Iraq, for so far failing to make any real response to Iraq's aggression against the Kurds. "The Americans promised to attack them (the Iraqis). They did not act decisively," Talabani told Reuters by telephone from the city of Arbil, now under joint assault by a rival Kurdish faction and Iraqi forces. He said he had given Washington three days warning of the attack but was ignored, effectively emboldening the Iraqi leader to strike. White House aides, on the campaign trail with President Bill Clinton, have warned Saddam they were following events in northern Iraq closely. On Saturday, a senior official said the United States had repositioned its firepower in the Gulf. "Watching is one thing. Acting is something else," said Talabani, veteran leader of the Patriotic Union of Kurdistan. "It is the only kind of action that Saddam understands." In remarks read on his Voice of the People of Kurdistan radio, Talabani said the Western allies had promised to strike at Saddam's forces if an attack was launched. "The coalition states in general, and the United States in particular, assured us... they will soon strike a lethal blow to the aggressors in Baghdad," the radio said in a broadcast monitored by the British Broadcasting Corporation. The PUK has held Arbil since 1994, when it seized the city from joint control with the rival Kurdistan Democratic Party. KDP irregulars, together with Iraqi forces, attacked Arbil early this morning, with heavy casualties. Reports from the remote region said Iraqi troops, backed by heavy armour and artillery, battled their way into Arbil and raised the Iraqi flag in the mainly Kurdish city. However, Talabani said his own peshmerga guerrillas were putting up fierce resistance and Iraqi control was so far confined to just two districts. "There are a lot of casualties among the civilians. The resistance is good, but we may have to retreat to the nearby Kurdish villages," he said. Talabani said the joint operation followed an August 22 letter from KDP leader Massound Barzani to Saddam, requesting military support for his fight with Talabani. The KDP leadership, meanwhile, has charged Iran with backing Talabani with heavy weapons and logistical support. The rival Kurdish factions have clashed off and on since U.S.-led air forces carved predominantly-Kurdish northern Iraq from Baghdad's control in the aftermath of the 1991 Gulf war. After heavy clashes and thousands of casualties, the PUK seized Arbil in May 1994, giving it control over the region's administrative centre and home to its embryonic parliament. The latest fighting flared again August 17. For its part, the KDP controls the border region with Turkey, collecting an estimated $250,000 per day in "taxes" from Turkish traders and smugglers. Periodic mediation by Washington has so far failed to shape a self-sufficient Kurdish enclave, despite a Western air umbrella that keeps Baghdad's forces at bay. 6626 !GCAT !GVIO Iraqi troops, backed by heavy armour and artillery, battled their way into Arbil in northern Iraq on Saturday and raised the Iraqi flag in the mainly Kurdish city, a U.N. relief official said. "My people on the ground confirm that Iraqi troops have entered Arbil at 3.45 p.m. (1145 GMT) and have raised the national flag," the official, refusing to be named, said. U.N. guards in the area said the Iraqis were aiding rebels of Massoud Barzani, leader of the Kurdistan Democratic Party (KDP), and were in control of half the city. Forces of the rival Patriotic Union of Kurdistan (PUK) were leaving. U.N. sources said about 12,000 Iraqi troops were aiding the KDP to capture the PUK stronghold. Residents reported heavy casualties from shelling and said terrified civilians were fleeing. PUK leader Jalal Talabani told Reuters by telephone from Arbil that he had warned Washington three days in advance that the Iraqi forces were prepared to attack Arbil. "The Americans promised to attack them (the Iraqis). They did not act decisively," Talabani said. Talabani said he had not yet given up hope for U.S. intervention, adding a meeting was expected in Washington in several hours' time to review the situation. He did not elaborate. There was no immediate reaction from the United States to Iraq's attack on Arbil which lies about 20 km (12 miles) north of the 36th parallel -- the line that Iraqi forces have been barred by allied forces from crossing since just after the end of the 1991 Gulf War when Iraq tried to seize control of the area. U.S., British and French warplanes are based in southern Turkey under Operation Provide Comfort to protect the zone. KDP leader Massoud Barzani said his faction was being backed by Iraqi heavy armour and artillery, a senior U.N. official in Baghdad said. "They have confirmed to us that Iraqi troops are taking part in the attack on Arbil...We got the information from KDP leaders in KDP headquarters in Saladdin," the official, who asked not to be identified, told Reuters. The two factions, split along political and tribal lines, have a long history of fighting each other and forging shifting alliances with the main powers in the region -- Iraq and Iran. The Iraqi government in Baghdad said it had decided to "provide support and military aid" for the KDP in its fight against the PUK. In a statement carried by the official Iraqi News Agency (INA) Deputy Prime Minister Tareq Aziz said Iraq's military intervention was in response to a plea from Barzani to President Saddam Hussein to back him militarily against attacks by Iran and Talabani. The KDP has long sought to break the grip of the PUK over Arbil, the seat of a Kurdish government and parliament that was created jointly by the two factions in elections after the 1991 Gulf War after a rebellion against Iraqi rule. The United States twice negotiated a ceasefire between the two rival Kurdish factions this month. But there were repeated violations. The two factions met at the U.S. embassy in London on Friday for talks to consolidate the ceasefire. President Bill Clinton on Friday ordered the U.S. military to prepare for possible deployment in the Gulf and a White House spokesman said Washington was carefully monitoring Iraqi troop activity in the Kurdish region of northern Iraq. A U.S. Navy spokesman in Bahrain said American forces, combat vessels and fighter planes patrolling the Gulf could respond to threatening Iraqi troop movements in northern Iraq immediately if called upon, "We would be able to respond immediately to the threat in northern Iraq. Within hours," Commander T. McCreary, spokesman for the U.S. Fifth Fleet based in Bahrain, told Reuters. "We will consider any aggression by Iraq to be a matter of very grave concern," White House spokesman Mike McCurry told reporters on Friday. 6627 !GCAT !GVIO Iraqi troops, backed by heavy armour and artillery, battled their way into Arbil in northern Iraq on Saturday and raised the Iraqi flag in the main Kurdish city, a U.N. relief official said. "My people on the ground confirm that Iraqi troops have entered Arbil at 3.45 p.m. (1145 GMT) and have raised the national flag," the official, refusing to be named, said. U.N. guards, patrolling the area of Arbil, said the Iraqis and rebels of Massoud Barzani, leader of the Kurdistan Democratic Party (KDP), were in control of half of the city and forces of the rival Patriotic Union of Kurdistan (PUK) were leaving. It appeared to be a matter of time before all the city fell to the combined Iraqi-KDP forces, a U.N. official said. U.N. sources said about 12,000 Iraqi troops were aiding the KDP to regain control of Arbil which the PUK seized in fighting from the KDP in 1994. Arbil lies about 20 km (12 miles) north of the 36th parallel which allied forces led by the United States forbid Iraqi forces from crossing. A senior U.N. official said the KDP, led by Massoud Barzani, had confirmed it was being backed by Iraqi heavy armour and artillery in the fight for Arbil. "They have confirmed to us that Iraqi troops are taking part in the attack on Arbil...We got the information from KDP leaders in KDP headquarters in Saladdin," the official, who asked not to be identified, told Reuters. Earlier Barzani's KDP denied it was being supported by Iraqi troops. It said the PUK, led by Jalal Talabani, made the claims to incite Washington to intervene in the area. Iraq's Deputy Prime Minister Tareq Aziz, in a statement on Saturday, said Iraqi armed forces were helping Barzani against Talabani whom he described as an agent and a traitor. Aziz said Iraq's military intervention would be limited, confined to the provision of support and logistics to Barzani's group to check a "vicious aggression" by neighbouring Iran on the Kurdish region. Iraq's state television broadcast national anthems and patriotic songs in Kurdish soon after a broadcaster read Aziz's statement. There was a festive mood on Iraq's official radio and television stations. The U.N. official said he was in contact with the KDP in Saladdin, about 25 km (16 miles) north of Arbil to guarantee the safety of international staff in the city and elsewhere in the Kurdish region. "We got assurances from them (KDP leaders) and an Iraqi liaison officer that all international staff, whether of the United Nations or NGOs (non-governmental organisations), will be safe," he said. He said there were about 200 international staff in Kurdish areas, 100 of them in Arbil. The official, who asked not to be identified, said there were "a lot of soldiers on the ground", but his staff in Arbil could not differentiate the Iraqis from KDP guerrillas as both were wearing the same unifrom. He said U.N. personnel in Arbil, about 100 international staff, most of them U.N. guards, had no knowledge of how many people had left the city or the number of casualties. He said U.N. personnel stood on rooftops in the town monitoring the advancing troops and the fighting inside the city. "Very few people were seen on the streets," he said. "It seems numbers of people fleeing or number of casualities is very limited," he said. "Our people noticed a demonstration of a few hundred Kurds welcoming the attacking forces," the official added. 6628 !GCAT !GVIO Iraqi troops, backed by heavy armour and artillery, battled their way into Arbil in northern Iraq on Saturday and raised the Iraqi flag in the main Kurdish city, a U.N. relief official said. "My people on the ground confirm that Iraqi troops have entered Arbil at 3.45 p.m. (1145 GMT) and have raised the national flag," the official, refusing to be named, said. U.N. guards, patrolling the area of Arbil, said the Iraqis and rebels of Massoud Barzani, leader of the Kurdistan Democratic Party (KDP), were now in control of half of the city. According to U.N. sources about 12,000 Iraqi troops were aiding the KDP to regain control of Arbil, the stronghold of their rival rebels of Jalal Talabani's Patriotic Union of Kurdistan (PUK). "The fighting is heavy but nothing like 1994 when the PUK and KDP fiercely fought for its (Arbil's) control," said the U.N. official. It seems, the official said, PUK forces were leaving the city and it "is just a matter of time for Arbil to fall into Iraqi troops and KDP hands." 6629 !GCAT !GVIO Iraqi troops are helping a Kurdish rebel group in its fight against a rival faction in northern Iraq, Deputy Prime Minister Tareq Aziz said on Saturday. He said Iraqi troops were aiding Kurdish rebel leader Massoud Barzani of the Kurdistan Democratic Party (KDP) against the rival Patriotic Union of Kurdistan (PUK) to check what he described as a vicious aggression by Iran on the Kurdish region. "The leadership has decided to provide support and military aid to Mr Massoud Barzani and his comrades to enable them confront the vicious aggression...from (PUK chief) Jalal Talabani," Aziz said in a statement carried by the official Iraqi News Agency (INA). U.N. relief officials confirmed reports that tanks were advancing on Arbil, a PUK stronghold in northern Iraq. They said the tanks advanced from KDP-controlled areas and raised KDP flags. Aziz said Iraq's military intervention, the first on such scale since the United States and its allies began protecting Iraqi Kurds against Baghdad after the 1991 Gulf War, was in response to a plea from Barzani to President Saddam Hussein to back him militarily against attacks by Iran and Talabani. He said Barzani sent a message to Saddam on August 22 in which he said: "The conspiracy is beyond our capability therefore we plead with your excellency to order Iraqi armed forces to interfere to help us to evade the foreign threat and put an end to Talabani's treason and conspiracy." Aziz said though Iraq had the full right to defend its sovereignty and territorial integrity, "we have decided to keep our military intervention on a limited scale and within the framework of providing support and logistics and move in case of self-defence." Barzani's group has so far denied that it was being supported by Iraqi armour and artillery in a bid to seize control of Arbil. It said its rival, the Patriotic Union of Kurdistan (PUK), led by Jalal Talabani made the claims to incite Washington to intervene in the area. U.S., British and French warplanes, based in southern Turkey have been protecting Kurdish rebels of northern Iraq from attacks by Iraqi armed forces since shortly after the Gulf War. Aziz said Washington was imposing "an illegitimate military presence under the pretext of protecting the Kurds but this presence has brought nothing but killing, loss and anarchy." "Time has come for America and Britain to reconsider their stand, respect Iraq's sovereignty and stop meddling in its domestic affairs," Aziz said. U.N. relief officials said the fighting for Arbil, the administrative centre of Iraqi Kurdistan, was still going on. "Our people in Arbil up to this moment have not seen Iraqi troops in the city. The advancing tanks are raising the KDP's yellow flag. We have seen at least 10 tanks and 10 heavy artillery pieces," one official, refusing to be named, said. He said heavy fighting was raging for control of the parliament building in Arbil. He said his people had failed in their attempts to get in touch with the PUK leadership in the city. "Iraqi Kurds in the city are afraid and concerned," he said. 6630 !GCAT !GDIP !GVIO American forces, combat vessels and fighter planes patrolling the Gulf could respond to threatening Iraqi troop movements in northern Iraq immediately if called upon, a U.S. Navy spokesman said on Saturday. "We would be able to respond immediately to the threat in northern Iraq. Within hours," Commander T. McCreary, spokesman for the U.S. Fifth Fleet based in Bahrain, told Reuters. Asked whether they had been put on alert since reports of Iraqi troop movements in northern Iraq, he said: "Naval forces are always ready to respond." President Bill Clinton on Friday ordered the U.S. military to prepare for possible deployment in the Gulf and a White House spokesman said Washington was carefully monitoring Iraqi troop activity in the Kurdish region of northern Iraq. The London-based opposition Iraqi National Council said Iraqi tanks had entered the outskirts of the mainly Kurdish city of Arbil. More tanks were said to be massed outside the city. The leader of the Patriotic Union of Kurdistan (PUK) said both Iraqi troops and rival Kurdistan Democratic Party (KDP) forces were attacking Arbil which is held by the PUK. U.S., British and French planes based in Turkey have enforced the establishment of a "safe zone" in northern Iraq to prevent Baghdad's forces from attacking Kurds there since President Saddam Hussein tried to take control of the region shortly after the end of the 1991 Gulf War. McCreary said an aircraft carrier group armed with 80-100 aircraft, cruisers, destroyers -- some capable of firing Tomahawk cruise missiles -- as well as frigates and at least one submarine are serving in the Central Command area, most of them in Gulf waters. Central Command is the arm of the U.S. military responsible for operations in an area from the Red Sea and Horn of Africa in the west to Pakistan in the east. The aircraft carrier Enterprise had been in the eastern Mediterranean for exercises for the past several weeks, and a U.S. official said there were no plans to move the carrier. A total of about 23,000 U.S. military personnel are in the region to help enforce United Nations sanctions against Iraq or train with forces of Gulf Arab allies. "Our forces are forward deployed and able to respond immediately to any crisis," McCreary said. Fifteen thousand U.S. troops earlier this month ended military exercises in the Gulf that tested their ability to gather and organise forces rapidly. The U.S. military presence in the Gulf includes 4,000-5,000 personnel in Saudi Arabia who help enforce a "no-fly" zone over southern Iraq, as well as Patriot anti-missile operators, air ground crews, and communications specialists. Their mission is called Operation Southern Watch. When asked if Operation Southern Watch has been put on any special alert in light of the tensions in northern Iraq, Director of Public Affairs Joint Task Force Southwest Asia, Lt-Col Andrew Bourland, said: "We are committed to ensuring compliance with U.N. resolutions...We continue to be able to meet all of our mission's requirements." 6631 !GCAT !GPOL !GVIO Palestinian President Yasser Arafat said on Saturday Palestinians might resurrect their national uprising against Israeli occupation if peace moves failed. "One of our options is to return to the intifida (uprising)," he told high school students in the West Bank town of Nablus on the first day of the new school year. "You remember I described you as the generals of the stones. Keep up the spirit of resistance," he said. It was the second time in two days Arafat warned Israel that Palestinians had other options to peace. He has accused Isralei Prime Minister Benjamin Netanyahu, who ousted peacemaker Shimon Peres in elections three months ago, of going back on commitments the Jewish state made in peace deals with the PLO since 1993. The Palestinian leader has demanded that Israel honour its agreement to withdraw troops from Hebron, the last West Bank town still under Israeli occupation. Netanyahu appointed a ministerial committee on Friday to oversee peace moves with the Palestinians and decide on the fate of Hebron but has enjoined Palestinians to keep their own peace deal promises. Arafat has said this week that Netanyahu's policies on Jewish settlements and Jerusalem were tantamount to war. His Palestinian self-rule Authority was convening on Saturday in Nablus. Stone-throwing youths led the Palestinians' seven-year national uprising against Israeli rule in the West Bank and Gaza beginning in 1987. An interim Israel-PLO peace deal ended the intifada in 1993. 6632 !GCAT !GVIO An Iraqi opposition group said Iraqi tanks on Saturday entered the Kurdish city of Arbil, administrative centre of northern Iraq. "Iraqi tanks have entered the city in the last hour and nine tanks have been destroyed by Kurdish forces," a spokesman for the Iraqi National Congress (INC) told Reuters by telephone from London. There was no independent confirmation of the report. The spokesman said around 60 Iraqi tanks were advancing on the city, which is controlled by the Patriotic Union of Kurdistan (PUK). He could not say how many tanks had entered Arbil. "They are on the outskirts. They are not in the central parts of the city." He said one of the INC contacts within the city, Ahmed Allawi, believed the town would fall in about two hours. Iraqi forces began an artillery attack on Arbil at 4.50 a.m. (0050 GMT) and heavy shelling has continued since then, the INC said. The spokesman said the centre of Arbil was under severe bombardment by Iraqi forces and there had been heavy casualties among Kurdish civilians. "There is severe panic. Everyone who can get petrol for their car is getting out. The hospitals are in pandemonium," the spokesman said. President Bill Clinton on Friday ordered the U.S. military to prepare for any possible action in response to the Iraqi troop movements near the Kurdish areas. U.S.-led air power has been protecting the Kurds in northern Iraq from any attack by Baghdad's forces since shortly after the Gulf War in 1991. Northern Iraq has been split into rival zones since large-scale fighting broke out between the two major Kurdish factions in 1994. The PUK said in a statement on Saturday that its rival, the Kurdistan Democratic Party (KDP), has cooperated with Iraqi forces in the advance of Iraqi military units. 6633 !GCAT !GPOL Palestinian leaders voiced growing anger at a lack of progress towards peace in contacts with the Israelis and President Yasser Arafat warned that further delays could be met with Palestinian unrest. Although one official of the Palestine Liberation Organisation said a meeting between Arafat and Israeli Prime Minister Benjamin Netanyahu was imminent, other Palestinians complained that the talks were going nowhere. "The Israeli side has rejected any attempt at advancing the peace process. Its policy is to play the game of foot-dragging and stalling," said Palestinian Authority member Saeb Erekat, a leading negotiator with Israel. Representatives of the two sides were due to meet again on Sunday while Palestinians planned to hold a mass prayer protest at Jerusalem's holiest Christian site. Egyptian President Hosni Mubarak, who has mediated between Palestinians and Israelis, was to have talks with Israeli Foreign Minister David Levy in Alexandria. The PLO official, who declined to be identified, told Reuters: "A meeting between Arafat and Netanyahu will take place very soon. No date has been set yet. There are contacts to prepare for this meeting." Members of Netanyahu's government insist the talks are moving forward. A cabinet statement last week said a ministerial committee, including Netanyahu, Levy and Defence Minister Yitzhak Mordechai, would oversee contacts with the Palestinians. Arafat has turned up the heat on the Israeli leader, calling strikes and other protests against the Jewish state, to try to force him to withdraw troops from Hebron in the West Bank. Israel agreed in a deal with the Palestinians last year to withdraw from most of Hebron, home to 100,000 Arabs and around 400 Jewish settlers, but postponed the pullback after a series of Islamic suicide bombings in February and March. Netanyahu has said he needs time to consider the matter but has angered Palestinians further with decisions to expand Jewish settlements in the West Bank. "One of our options is to return to the intifida (uprising)," Arafat told high school students in the West Bank town of Nablus on the first day of the new school year. "You remember I described you as the generals of the stones. Keep up the spirit of resistance," he said, referring to a seven-year Palestinian uprising against Israeli rule launched in 1987 by stone-throwing youths. Arafat also called on Christian Palestinians to stage a mass prayer at the Church of the Holy Sepulchre, the holiest Christian site in Jerusalem, to protest against Israel's plans to expand Jewish settlements. He said earlier that the settlement expansion plans and Israel's demolition of an Arab community centre under construction in East Jerusalem were tantamount to war. About 20,000 Moslems took part in a protest prayer meeting at al-Aqsa mosque in Jerusalem on Friday. Israeli soldiers blocked Arabs from the West Bank Arabs from reaching the mosque. 6634 !GCAT !GVIO Iraq said on Sunday it would soon pull back the troops which it sent to capture the city of Arbil in northern Iraq, expelling one Kurdish faction and installing a rival group more amenable to Baghdad. The seizure of the city in the biggest Iraqi military incursion into northern Iraq in five years prompted the United States, Iraq's Gulf War enemy, to put its forces in the Middle East on high alert. Arbil is 20 km (12 miles) north of the 36th parallel, the line that allied forces had barred Iraqi troops from crossing since the 1991 Gulf War. U.S., British and French warplanes based in Turkey enforce a no-fly zone above the 36th parallel. A U.N. official in Iraq said a joint force of Iraqi troops and fighters from Massoud Barzani's Kurdistan Democratic Party (KDP) seized control of Arbil from forces of the rival Patriotic Union of Kurdistan (PUK) on Saturday. Hours later Iraq announced its intention to withdraw. "In accordance with the plan agreed upon to extend aid and support for Mr Massoud Barzani and his comrades in their resistance to Iranian aggression...our troops will return to former positions in a very short period," a government spokesman said. The official Iraqi news agency INA said the spokesman issued his statement after a joint meeting of the Revolutionary Command Council (RCC) and leaders of the ruling Baath party chaired by President Saddam Hussein. The spokesman said Iraq decided to withdraw "because the political leadership has not decided yet to resume the government administration of the (Kurdish) autonomous region." U.S. President Bill Clinton, speaking earlier during a campaign bus tour of the U.S. Midwest, said the developments caused him "grave concern". "I have placed our forces in the region on high alert and they are now being reinforced," he said. U.S. defence officials in Washington said more than 300 U.S. warplanes and 20 warships were immediately available if Clinton should order the use of U.S. force in the crisis. The U.N. official in Iraq said shooting in Arbil was dying down on Saturday evening, but residents earlier reported heavy casualties from shelling and said terrified civilians were fleeing. But in Ankara, the Turkish capital, KDP representative Faik Nerweyi said: "The casualties have been minimal and if the people keep quiet there normal life will commence tomorrow." U.N. sources said about 12,000 Iraqi troops helped the KDP to capture Arbil, a PUK stronghold since fighting in 1994 between rival factions in the city, which once had a population of some 800,000. The two Kurdish factions, split along political and tribal lines, have a long history of bloodshed and shifting alliances with the main powers in the region -- Iraq and Iran. Nerweyi said Iran, which fought an eight-year war with Iraq in the 1980s, sent troops into northern Iraq in response to the attack on Arbil. "They entered this morning. They have occupied the area to the depth of 40 km (25 miles). They have established a headquarters in Chuman," he told Reuters. Chuman is on the main highway leading to Arbil from the Iranian border, some 90 km (55 miles) northeast of the city as the crow flies but further by the winding, mountainous road. PUK leader Jalal Talabani told Reuters by telephone from Arbil that he had warned Washington three days in advance that Iraqi forces were prepared to attack Arbil. "The Americans promised to attack them (the Iraqis). They did not act decisively," Talabani said. The British Broadcasting Corporation quoted Talabani as saying his forces were still resisting the Iraqi attack but much of the city was under Iraqi control. A senior U.S. official accompanying Clinton said the Iraqi troops surrounding Arbil consisted of three tank divisions of 30,000 to 40,000 Republican guard troops equipped with heavy artillery and surface-to-air missiles. He said it was the first such action by Iraq since the 1991 Geul War over Kuwait ended and Saddam tried to seize control of northern Iraq, creating an exodus of some two million Kurdish refugees. 6635 !GCAT !GPOL !GVOTE Polling in Lebanon's month-long parliamentary elections reaches Beirut on Sunday, with billionaire Prime Minister Rafik al-Hariri hoping to receive a ringing endorsement from voters. He heads a list of 17 candidates seeking to sweep aside all opponents and march into parliament together in a drive by the pro-Syrian government for a "unified" parliament virtually free of opposition. Hariri, 51, a dynamic construction tycoon who has ruled Lebanon for four years, is standing for parliament for the first time and is trying to build himself a solid electoral base. His rivals accuse him of wanting a parliament that is "odourless, colourless and tasteless, in which he will meet no opposition to his projects." The opposition complained of widespread electoral abuses by government supporters in voting on the previous Sundays in Mount Lebanon and north Lebanon and has expressed fears of more violations on Sunday. An independent electoral monitoring group said the government committed a "huge number of constitutional, legal, administrative, media and political violations" in the earlier ballots and warned Beirut candidates to watch out for more. Hariri has pegged his future to the outcome, saying he will not stand for the premiership in the new government if he fails to win when Beirut's 377,000-strong electorate votes to elect 19 members for the 128-seat parliament. No one doubts Hariri will get a seat. He is popular in Beirut for the achievements of his multi-billion dollar drive to rebuild Lebanon from the ashes of the 1975-90 civil war. But he may not carry all his 16 supporting candidates with him. Hariri faces a determined challenge from Selim al-Hoss, 66, a respected former prime minister who heads a 13-man list and should win votes from the Sunni Moslem establishment and from Christians disaffected with Hariri's pro-Syrian rule. Many Beirut Sunnis resent the onslaught of power and money on the capital that Hariri and his supporters represent. They see Hoss as a balanced and independent politician who would help to ensure that Hariri does not ride roughshod over parliament. Radical Christian parliamentary deputy Najah Wakim, a sworn enemy of Hariri whom he has often accused of political and financial corruption, leads a third, eight-man list that has forged an anti-Hariri electoral deal with Hoss. Analysts say many Beirutis find Hariri's list of candidates uninspiring and even distasteful and believe he will do well if half of them get into parliament with him. The final shape of the parliament may not be clear until the election ends with voting in Lebanon's remaining regions on the next two Sundays. 6636 !GCAT !GVIO Iraq will soon withdraw troops it sent to back a Kurdish rebel leader in the inter-Kurdish fight for the city of Arbil, an authoritative spokesman for the Revolutionary Command Council (RCC) said on Sunday. "In accordance with the plan agreed upon to extend aid and support for Mr Massoud Barzani and his comrades in their resistance to Iranian aggression.....our troops will return to former positions in a very short period of time," the spokesman said in a statement carried by the official Iraqi News Agency (INA). INA said the spokesman made the remarks following a joint meeting by the RCC and leaders of the ruling Baath party chaired by President Saddam Hussein to discuss operations by Iraqi armed forces in the Kurdish north. The spokesman said Iraq's decision to pull back the troops was "because the political leadership has not decided yet to resume the government administration of the (Kurdish) autonomous region." Northern Iraq, now split between rival guerrillas of the Kurdistan Democratic Party (KDP) led by Massoud Barzani and the Patriotic Union of Kurdistan (PUK) headed by Jalal Talabani, has been under U.S. and allied protection since shortly after the 1991 Gulf War over Kuwait. A joint force, comprising heavy Iraqi armour and artillery and KDP rebels, overtook Arbil on Saturday. PUK forces had thrown Barzani rebels out of the city in 1994. The spokesman accused Talabani of preparing the ground for the Iranian troops to "commit their vicious aggression" on Iraqi Kurdistan. He said the administration of the Kurdish region would be left to the "influential powers" in the region until they and the Kurdish people realised for themselves that it would be better for their stability and security to return to the central government in Baghdad. Both the PUK and KDP have been running northern Iraq away from Baghdad's authority. The spokesman said the return of Baghdad to the region would be carried "via democratic methods and dialogue" in a way expressing the will of Iraqi Kurds in the area. The spokesman said Iraq's latest military thrust in the area, the largest since Baghdad quelled a post-Gulf War Kurdish uprising in northern Iraq in 1991, should be "in part a clear lesson to those conspiring againt their country and national leadership, turning themselves into a vessel for the foreigner." In an indirect reference to Talabani, the spokesman said he hoped Iraq's military operations on Saturday "would constitute a deep lesson for those who have deviated in their behaviour...(so that) they will respect our Kurdish people in areas they are still present in particularly in the province of Sulaimaniya". Sulaimaniya is now the last major Kurdish stronghold in Talabani's hands. 6637 !GCAT !GVIO Iraq will soon withdraw troops it sent to back a Kurdish rebel leader in the inter-Kurdish fight for the city of Arbil, an authoritative spokesman for the Revolutionary Command Council (RCC) said on Saturday. "In accordance with the plan agreed upon to extend aid and support for Mr Massoud Barzani and his comrades in their resistance to Iranian agression...our troops will return to former positions in a very short period," the spokesman said in a statement carried by the official Iraqi news agency INA. INA said the spokesman made the statement following a joint meeting of the RCC and leaders of the ruling Baath party chaired by President Saddam Hussein to discuss operations carried out by Iraqi armed forces in northern Iraq. The spokesman said Iraq decided to withdraw the troops "because the political leadership has not decided yet to resume the government administration of the (Kurdish) autonomous region". On Saturday Iraqi troops and tanks supporting Barzani's faction captured the city of Arbil in northern Iraq from rival Kurdish forces of Jalal Talabani. 6638 !GCAT !GDIP !GVIO A committee monitoring the ceasefire agreement between Israel and Hizbollah guerrillas will meet in south Lebanon on Sunday to discuss an Israeli complaint against the Islamic group, the Israeli army said. Representatives of the five nations making up the committee -- Israel, Lebanon, Syria, France and the United States -- will meet at 11 a.m. (0800 GMT) in Naqoura, the coastal headquarters of the U.N. Interim Force in Lebanon (UNIFIL). "The committee will meet following a complaint by Israel over an incident in which two Lebanese residents were injured by Hizbollah fire in the Sikhin village...on August 29," an Israeli army spokeswoman said on Saturday. The monitoring committee was set up to deal with violations of an April 25 ceasefire understanding that ended 17 days of fighting between Israel and the guerrillas. The understandings forbid firing from or at civilian targest but do not rule out guerrilla attacks on Israeli troops and their local militia allies in south Lebanon. Around 1,000 Israeli troops patrol a 15 km (nine-mile) south Lebanon occupation zone which the Jewish state carved out in 1985 to prevent attacks on its northern bordder. Hizbollah (Party of God) gunmen have waged a guerrilla war to oust Israel from the area. 6639 !GCAT !GPOL A PLO official said on Saturday Palestinian President Yasser Arafat and Israeli Prime Minister Benjamin would meet very soon and both sides were now preparing the meeting. "A meeting between Arafat and Netanyahu will take place very soon. No date has been set yet. There are contacts to prepare for this meeting," the official, who refused to be named, told Reuters. Netanyahu, who ousted Israeli peacemaker Shimon Peres in a national election three months ago, has angered Palestinians by refusing so far to meet with Arafat. Israel signed a landmark interim peace deal with the former guerrilla leader in 1993 launching Palestinian self-rule in the West Bank and Gaza Strip. Netanyahu, leader of the right-wing Likud party, opposed the agreement. Arafat has accused Netanyahu of dragging his feet in peace moves and not living up to Israel's commitments, including a promised withdrawal of troops from parts of Hebron in the West Bank. He warned on Saturday that Palestinians might resurrect their national uprising against Israeli occupation if the peace process failed. 6640 !GCAT !GDIP !GVIO Ankara said on Saturday it was responding to an Iraqi-backed attack on a Kurdish city in northern Iraq by taking measures to prevent a repeat of a post Gulf War exodus of millions of Iraqi Kurds into Turkey. "Turkey is determined not to allow a new migratory movement to its own borders from northern Iraq," the foreign ministry said in a statement. "It will take all necessary measures to prevent such developments." A U.N. official in Baghdad said a joint force of Iraqi troops and rebels from Massoud Barzani's Kurdistan Democratic Party (KDP) have captured the Kurdish stronghold of Arbil in northern Iraq from the rival Patriotic Union of Kurdistan (PUK). Turkey's Western allies have often warned Ankara in the past that failure to protect Iraqi Kurds from Baghdad could lead to a new exodus of Kurdish refugees. An estimated two million Iraqi Kurds entered southeast Turkey to flee attacks by Baghdad after the 1991 Gulf War. A U.S.-led allied air force has been based in southeast Turkey since after the Gulf War to shield the mainly-Kurdish northern Iraqi region from Iraqi President Saddam Hussein. Turkish deputies, who regularly vote to extend the mandate of the force, have increasingly expressed worries that the presence of the allied operation enables Turkish Kurdish separatists to operate in the region. More than 20,000 people have been killed in a 12-year battle between the guerrilla Kurdistan Workers Party (PKK) and the Turkish army. "Turkey, keeping its security concerns in mind, is closely following developments and continuing its consultations with the countries concerned," the foreign ministry statement said. 6641 !GCAT !GVIO A joint force of Iraqi troops and rebels from Massoud Barzani's Kurdistan Democratic Party (KDP) have captured the Kurdish stronghold of Arbil in northern Iraq, a U.N. official in Baghdad said on Saturday. "The situation has calmed down in Arbil. There is only sporadic shooting now. The KDP together with Iraqi armed forces have controlled the city," the official told Reuters. 6642 !GCAT !GPOL !GVIO The following are the main groups in Kurdish-controlled northern Iraq, where Iraqi troops have intervened in fighting among Kurdish factions on Saturday by backing an attack against the main Kurdish city of Arbil. KURDISTAN DEMOCRATIC PARTY - The KDP was founded in 1946 by Mollah Mustafa Barzani while in exile in the Soviet Union. The KDP was briefly legalised after an Iraqi coup d'etat in 1958, and in 1970 it secured agreement with Baghdad over self-rule in Kurdish areas as well as Kurdish participation in the Baghdad government. Both attempts at legitimacy collapsed. The party was taken over by his son Massoud after the death of Mustafa in 1979. The younger Barzani has also spent years in exile, living and traveling in the Middle East, the former Soviet Union, Europe and the United States. He speaks Farsi, Arabic, English and both the Kurmanje and Sorani dialects of Kurdish. He enjoys solid support among mountain tribes. Many educated, urban Kurds also follow him as they see his policy of reconciliation with Baghdad as the only realistic choice. Barzani, 50, controls the north-west of the country, including the border with Turkey, where it charges duties on the lucrative and illicit oil trade from Iraq. Around a quarter of Iraqi Kurdistan territory is under KDP control. The rival Patriotic Union of Kurdistan (PUK) says it is currently supported by the regime in Baghdad. PATRIOTIC UNION OF KURDISTAN - The PUK is led by Jalal Talabani, previously a leading KDP member who often had disputes with Mustafa Barzani in the 1960s, accusing the party of being a backward, tribal organisation. He finally quit the KDP and set up the PUK in June 1975. The party soon began fighting the KDP. Talabani linked up with Iraqi forces to fight the KDP in a feud which lasted into the 1980s. Recognizing he could never lay claim to a traditional network of clan support like that enjoyed by the Barzanis, Talabani built the PUK as a modern political party. He developed broadcast and newspaper outlets to reach educated, urban Kurds. After the 1991 Gulf War, the PUK appeared reconciled with the KDP. And in 1992 elections, the two parties took 50 seats each in the regional Kurdish government, based in the main city of Arbil. But the disputes have continued, often violently. The PUK controls the centre and the south-east of the country. It took the regional capital Arbil after an assault in December 1994. It says around half of Iraqi Kurdistan territory and 70 percent of the population is under its control. The KDP says the PUK has recently received military support from Iran. IRAQI NATIONAL CONGRESS - The London-based INC was set up in 1992. It brings together Iraqi opposition groups, including the KDP, PUK and Islamic parties. Led by Iraqi businessman Ahmad Chalabi, it has worked to lobby for Western support and often mediated in conflicts among rival Kurdish factions. It says it has high-level contacts and support among officers of Saddam's army in Baghdad, as well as offices in northern Iraq and London. KURDISTAN WORKERS PARTY - The Kurdistan Workers Party (PKK) has been fighting a 12-year-old campaign for independence or autonomy in southeast Turkey in which more than 20,000 people have died. Ankara says PKK rebels use northern Iraq as a base from which to attack southern Turkey. The party leader Abdullah Ocalan, believed to be based in Syria, declared a unilateral ceasefire in December though fighting has continued. Relations with the two warring Iraqi Kurd factions have been uneasy, but Ocalan's son attended the KDP's 50th anniversary celebrations earlier this month, prompting concerns in Ankara of cooperation between the two groups. TURKOMAN COMMUNITY - The Turkomans are a Turkic community of around two million, 200,000 of them living in northern Iraq. The main party is the Iraqi National Turkoman Party, which boycotted the 1992 elections for the Iraqi Kurdish parliament. The Turkomans want the autonomous region in northern Iraq to be extended southwards to include the oil-rich Kirkuk region and other areas mainly populated by Turkomans. 6643 !GCAT !GPOL !GVOTE A leading Iranian parliamentarian called in remarks published on Saturday for the removal of legal barriers blocking the re-election of President Akbar Hashemi Rafsanjani to a third term. "We should not tie our hands by referring to the Constitution's legal barrier against Rafsanjani's third term," Abdullah Nuri was quoted by Hamshahri newspaper as saying. Rafsanjani's second term ends in July 1997. The consitution bars three consecutive terms and Rafsanjani has repeatedly stressed his unwillingness to seek a third term by changing the constitution "for the sake of one person". But Nuri, speaker of parliament's radical-centrist coalition, said the constitution could be "amended through a referendum...Interests of the country call for the extension of the presidency of Rafsanjani for a third term." 6644 !GCAT !GDIP Oman's Sultan Qaboos arrived in Jordan on Saturday for a four-day private visit during which he will hold talks with King Hussein on the stalled Middle East process and bilateral ties, a palace spokesman said. Sultan Qaboos, who has strong personal ties with King Hussein, is expected to stay until Tuesday as a guest of the monarch at his seafront palace in Jordan's Red Sea port city of Aqaba. Jordan's ties with most Gulf states were damaged after King Hussein refused to join Saudi Arabia and other Arab and Western allies in condemning the 1990 Iraqi invasion of Kuwait. But ties with Oman have remained close. Jordan's ties improved dramatically with its southern neighbour Saudi Arabia and other Gulf Arab states when King Hussein turned against Iraqi President Saddam Hussein after the defection of two senior Iraqi officers to Jordan a year ago. Kuwait is the only Gulf state that has yet to forgive Amman for its Gulf War stand. 6645 !GCAT !GDIP Syrian Foreign Minister Farouq al-Shara and PLO's foreign affairs chief Farouk Kaddoumi urged on Saturday leaders of Arab states neighbouring Israel to meet and plot peace moves, a Palestinian spokesman said. Anwar Abdul-Hadi, information consultant of Kaddoumi, said the two officials held talks in Damascus on regional developments in light of the peace policies of Israel's right-wing government. "Talks of Shara and Kaddoumi covered Arab coordination to face the Israeli measures...," Abdul-Hadi said. "And to hold a conference of Arab countries neighbouring israel to discuss the views over the next period of the peace process." Palestinians condemned Israel's recent decision to boost Jewish settlements in the West Bank and accused the government of Prime Minister Benjamin Netanyahu of trying to impose a "de facto" status to block Israel's withdrawal from the area. 6646 !GCAT !GDIP !GVIO Iraqi Kurdish leader Jalal Talabani said on Saturday that he had warned Washington three days in advance that the forces of President Saddam Hussein were prepared to attack the northern rebel city of Arbil. "The Americans promised to attack them (the Iraqis). They did not act decisively," Talabani told Reuters by telephone from Arbil, now under assault by a rival Kurdish faction, backed by Iraqi forces. Talabani, veteran leader of the Patriotic Union of Kurdistan (PUK), said he had not yet given up hope for U.S. intervention, adding a meeting was expected in Washington in several hours' time to review the situation. He did not elaborate. Earlier, the White House said it was monitoring events in northern Iraq very closely and that U.S. forces were standing by. "Watching is one thing. Acting is something else," said Talabani. "It is the only kind of action that Saddam understands." The PUK has held Arbil since 1994, when it seized the city from joint control with the rival Kurdistan Democratic Party. KDP forces, backed by Iraqi forces, attacked Arbil early this morning, with heavy casualties. 6647 !GCAT !GVIO The Western-protected safe haven in northern Iraq, where one Kurdish faction backed by Iraq battled with another on Saturday, has suffered numerous bouts of violence since it was set up more than five years ago. The enclave was hastily created on the suggestion of British Prime Minister John Major in April 1991 as a no-fly zone to protect Iraqi Kurds from attack by the Iraqi military. The Kurdish minority had revolted in the northern part of the country after the defeat of Iraq by a Western-led force in the Gulf War. Up to 50,000 Kurds were reported to have been slaughtered in the rebellion. Iraq had crushed previous revolts, using poison gas on at least one occasion. Fear of similar attacks sent up to two million Kurds fleeing into the Turkish and Iranian mountains where many died in the freezing cold. Establishment of the no-fly zone prevented an even greater human catastrophe, encouraging many Kurds to return to northern Iraq within weeks. The zone above the 36th parallel, about 75 miles (120 km) wide and 35 miles (55 km) deep, is policed under Operation Provide Comfort by U.S., British and French warplanes from a base in Turkey. Many Turkish politicians criticise the operation for creating a power vacuum for Kurdish guerrillas fighting Ankara. But the country's new Islamist-led government has backed down from a pre-election pledge of telling the force to leave. Soon after its creation, the zone became the scene of fighting between the two main Iraqi Kurdish factions which are now fighting over the city of Arbil: the Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP). Iraq has often violated the no-fly zone and President Saddam Hussein has frequently vowed to win the area back, saying: "We shall not relinquish our people in northern Iraq." 6648 !GCAT !GVIO Kurdistan Democratic Party (KDP) of Massoud Barzani said that it was being backed by Iraqi heavy armour and artillery in a battle with rival Kurds for the city of Arbil, a senior U.N. official in Baghdad said. "They have confirmed to us that Iraqi troops are taking part in the attack on Arbil...We got the information from KDP leaders in KDP headquarters in Saladdin," the official, who asked not to be identified, told Reuters. 6649 !GCAT !GDIP Egypt has asked the Arab League to call an emergency meeting of Arab foreign ministers to take a united stand on recent developments in Arab-Israeli relations, diplomatic sources said on Saturday. The meeting, if approved by a majority of members, would probably be on September 13 and the League would bring forward a regular six-monthly ministerial meeting to September 14 and 15, they said. The regular meetings usually start a week later. "They will review developments in the (Middle East) peace process and formulate a united Arab position on the negative and grave steps being taken in the region," one source said. The meeting would take its cue from the Arab summit in Cairo in June, they said. The summit told Israel that Arab states might reconsider steps towards peace with Israel if it did not fulfil its agreements or tried to change the basis for talks. The Arab League secretariat was contacting member states on the Egyptian proposal, the sources said. The ministerial meeting would also be an opportunity for Egypt to sound out Arab opinion on plans to hold a Middle East economic summit in Cairo in November. Egypt has said the economic conference would be pointless if Israel did not ensure progress towards Middle East peace. 6650 !E51 !ECAT !GCAT !GDIP Yemen hopes Saudi Arabian aid and investments will follow a landmark visit by Saudi Defence Minister Prince Sultan which appeared to put an end to years of tension and mistrust, officials said on Saturday. "With time, meetings and exchange of visits trust will be cemented and ties will improve," a Yemeni official told Reuters. Before returning to the kingdom on Friday night, Prince Sultan said: "We consider any Saudi Arabian citizen who invests in Yemen as someone who has carried out his duty and satisfied the Saudi Arabian government." Prince Sultan, the most senior member of the Saudi royal family to visit Yemen since before Iraq's 1990 invasion of Kuwait, held three meetings with Yemeni President Ali Abdullah Saleh during the three-day visit. Gulf Arab allies cut off crucial financial aid to Yemen when it and Cuba, then United Nations Security Council members, were the only two states to vote against a resolution which sanctioned the 1991 Gulf War against Iraq. Some one million Yemeni workers, with annual remittances of about $1 billion, were also expelled from Saudi Arabia and neighbouring Gulf Arab states. Riyadh alone gave Sanaa around $100 million a year prior to the Gulf crisis to balance the budget in addition to financing several development projects and paying for some arms purchases. Ties further soured when Gulf and some other Arab states appeared to side with a failed bid to revive the former Marxist South Yemen which merged with the north in 1990. Sanaa crushed southern troops in a tw-mont civil war in 1994. Impoverished Yemen and much larger Saudi Arabia had several clashes in a potentially oil and gas-rich border area before the two sides signed last year a memorandum of understanding to resolve the 60-year-old dispute. During Prince Sultan's visit the two sides signed an accord aimed at promoting bilateral cooperation in economic, commercial, investment and technical fields. He also discussed measures needed to speed up progress by committees set up after last year's memorandum to demarcate disputed land and sea borders. 6651 !GCAT !GDIP Egyptian and Palestinian officials met in Cairo on Saturday in advance of a meeting between President Hosni Mubarak and Israeli Foreign Minister David Levy on Sunday, Egyptian foreign ministry officials said. Osama el-Baz, a senior adviser to President Mubarak, Palestinian security chief Mohamed Dahlan and Palestinian negotiator Hassan Asfour discussed the rising tension in Israeli-Palestinian relations, they said. Palestinian President Yasser Arafat said on Saturday that Palestinians might resurrect their national uprising against Israeli rule if peace moves fail. On Friday Israel thwarted Arafat's call for a mass prayer protest at Jerusalem's al-Aqsa mosque by ringing the city with police and roadblocks. Israeli Prime Minister Benjamin Netanyahu telephoned Mubarak on Friday evening and Mubarak then called Arafat. Levy's visit to the Mediterranean city of Alexandria on Sunday will be his first venture into the Arab world since he took office after elections in May. 6652 !GCAT !GDIP Iraq's Deputy Prime Minister Tareq Aziz on Saturday reviewed with Russia's deputy foreign minister Baghdad's relations with the U.N. Special Commission disarming it, the official Iraqi News Agency (INA) said. INA said Aziz also told Viktor Posuvalyuk that Russian firms were welcome to supply Iraq with humanitarian goods in line with a partial oil sales deal with the United Nations. The U.N. and Iraq signed a deal on May 20 under which Baghdad is to export oil worth $2 billion over six months to pay for urgent humanitarian needs. INA said Aziz reiterated that Iraq had come clean on the 1991 Gulf War ceasefire terms on weapons and called on the Security Council members to remove the economic embargo. Russia, supported by France and China, all permanent members of the U.N. Security Council, is for a gradual easing of international sanctions on Iraq. "He (Aziz) stressed that it is the Security Council's responsibility not to allow any attempt to touch on Iraq's sovereignty, its dignity and national security," INA said. Baghdad has in recent months clashed repeatedly with U.N. arms experts overseeing the destruction of Baghdad's weapons programme. 6653 !GCAT !GPOL !GVIO Palestinian President Yasser Arafat said on Saturday Palestinians might resurrect their national uprising against Israeli occupation if peace moves failed. "One of our options is to return to the intifida (uprising)," Arafat told high school students in the West Bank town of Nablus on the first day of the new school year. "You remember I described you as the generals of the stones. Keep up the spirit of resistance," he said, referring to a seven-year Palestinian uprising against Israeli rule launched in 1987 by stone-throwing youths. It was the second time in two days Arafat warned Israel that Palestinians had other options to peace. Arafat called on Christian Palestinians to stage a mass prayer on Sunday at the Church of the Holy Sepulchre, the holiest Christian site in Jerusalem, to protest against Israel's plans to expand Jewish settlements. This week Arafat turned up the heat on Israeli Prime Minister Benjamin Netanyahu to withdraw from Hebron in the West Bank and honour other peace deal commitments, calling strikes and protests against the Jewish state. Netanyahu, who was elected in May, responded by sending aides and negotiators on Thursday to meet PLO officials, but Palestinians said the talks were useless. "The Israeli side has rejected any attempt at advancing the peace process. Its policy is to play the game of foot-dragging and stalling," said Palestinian Authority member and peace negotiator Saeb Erekat. He spoke after members of the Authority met in Nablus to assess the latest contacts with Israel. Members of Netanyahu's government insist the talks are moving forward and a decision on Hebron will be made soon. A cabinet statement issued on Friday said Netanyahu had formed a ministerial committe that including himself, Foreign Minister David Levy and Defence Minister Yitzhak Mordechai to oversee contacts with the Palestinians. Israeli media reports said Netanyahu refused to add hardline cabinet minister Ariel Sharon to the committee. Israel agreed in a deal with the Palestinians last year to withdraw troops from most of Hebron, home to 100,000 Arabs and around 400 Jewish settlers, but postponed the pullback after a Islamic suicide bombing spree in February and March. Netanyahu has said he is considering ways to implement the withdrawal while protecting Jewish settlers in the city. "The Palestinian Authority rejects Israeli attempts to renegotiate any issue that has been agreed upon with the Israeli government," Erekat said after Saturday's cabinet meeting. Arafat said this week the Israeli government's decision to expand Jewish settlements and its demolition of an Arab community centre under construction in East Jerusalem were tantamount to war. But only about 20,000 Moslems participated in a protest prayer at the al-Aqsa mosque on Friday in Jerusalem. Israeli soldiers stopped West Bank Arabs from reaching the mosque. On Friday, Arafat addressed residents of the Balata refugee camp in the West Bank, where Palestinian youths frequently clashed with Israeli soldiers during the intifada. "I say to them (Israel)...if you will not implement what we have already agreed upon, our people still have other options," he told cheering residents of the camp. "They have airplanes but I have the Palestinian children," he said. Stone-throwing youths led the Palestinians' national uprising against Israeli rule in the West Bank and Gaza beginning in 1987. An interim Israel-PLO peace deal ended the intifada in 1993. 6654 !GCAT !GVIO Tanks and heavy weapons pounded the Kurdish-held city of Arbil in northern Iraq on Saturday, causing heavy casualties and forcing terrified civilians to flee, residents contacted by telephone said. Jalal Talabani, head of the Patriotic Union of Kurdistan (PUK) which is defending Arbil, accused Iraqi President Saddam Hussein of sending hundreds of Iraqi tanks and armoured cars to help forces of a rival faction, the Kurdistan Democratic Party (KDP), in attacking the city. "Hundreds of Iraqi tanks and hundreds of Iraqi armoured cars are attacking the town and there are huge artillery bombardments," Talabani told Radio France Internationale in an interview from his base near Suleymaniye in northern Iraq. "The KDP is cooperating with the Iraqi government and attacking the city side-by-side with Iraqi soldiers," he said, alleging that Iraqi troops had entered the city in one location. The Iraqi government in Baghdad said it had decided to "provide support and military aid" for the KDP in its fight against the PUK which Baghdad alleged was backed by neighbouring Iran. A witness in Arbil, reached by telephone, reported panic and heavy casualties as tanks and other heavy weapons pounded the city. "Shelling has been continuous for about five and half hours. They are not distinguishing between military and civilian areas," Ahmed Allawi, of the opposition Iraqi National Congress (INC), told Reuters from Arbil. "There are too many fires and too much smoke," he said. U.N. officials in Arbil said there was heavy shelling of Arbil but could not confirm that Iraqi forces were responsible. A KDP spokesman said his group was behind the assault. "We attacked Arbil," the representative told reporters, adding allegations of Iraqi involvement were designed to bring U.S. forces into action against Baghdad. The United States twice negotiated a ceasefire between the two rival Kurdish factions this month. But there were repeated violations. The two factions met at the U.S. embassy in London on Friday for talks to consolidate the ceasefire. The mainly Kurdish city of Arbil lies about 20 km (12 miles) north of the 36th parallel which marks the line that Saddam's forces have been barred from passing since shortly after the end of the Gulf War in 1991 when he tried to seize control of the region. U.S., British and French warplanes are based in southern Turkey under Operation Provide Comfort to protect the zone. President Bill Clinton on Friday ordered the U.S. military to prepare for possible deployment in the Gulf and a White House spokesman said Washington was carefully monitoring Iraqi troop activity in the Kurdish region of northern Iraq. The KDP has long sought to break the grip of the PUK over Arbil, the seat of an embryonic Kurdish government and parliament that was created jointly by the two factions in elections after the Gulf War. In Baghdad Deputy Prime Minister Tareq Aziz said Iraqi troops were aiding KDP leader Massoud Barzani against the PUK to check what he described as a vicious aggression by Iran on the Kurdish region. In a statement carried by the official Iraqi News Agency (INA) Aziz said Iraq's military intervention was in response to a plea from Barzani to President Saddam Hussein to back him militarily against attacks by Iran and Talabani. U.N. relief officials said tanks advancing on Arbil raised KDP flags. A U.S. Navy spokesman in Bahrain said American forces, combat vessels and fighter planes patrolling the Gulf could respond to threatening Iraqi troop movements in northern Iraq immediately if called upon, "We would be able to respond immediately to the threat in northern Iraq. Within hours," Commander T. McCreary, spokesman for the U.S. Fifth Fleet based in Bahrain, told Reuters. Asked whether they had been put on alert since reports of Iraqi troop movements in northern Iraq, he said: "Naval forces are always ready to respond." "We will consider any aggression by Iraq to be a matter of very grave concern," White House spokesman Mike McCurry told reporters. A spokesman for an Iraqi opposition group, INA, in Jordan alleged that tanks belonging to the Iraqi-based Iranian opposition group Mujahedeen Khalq had surrounded the northern city of Arbil. "Last night about 50 tanks under the flag of the Mujahedeen Khalq, the Iranian opposition group which is controlled by Saddam Hussein...surrounded Arbil from all sides," he said. 6655 !GCAT !GDIS A fire has completely gutted a Turkish-operated restaurant in a Bahraini village, residents said. They said a fire broke out at Shul'ala restaurant in the early hours on Saturday in al-Daih village, five km (three miles) west of the capital Manama. It was not immediately clear what caused the fire or if there were any casualties. Government officials had no immediate comment. 6656 !GCAT !GDIP !GPOL The pretender to the Libyan throne attacked U.S. black leader Louis Farrakhan and the Egyptian government on Saturday for financial dealings with the government of Libyan leader Muammar Gaddafi. Farrakhan, leader of the Nation of Islam, is in Libya for celebrations of the anniversary military coup in which Gaddafi overthrew the Libyan monarchy in 1969. He has accepted a $250,000 human rights prize from Gaddafi but the U.S. Treasury has turned down his application to receive $1 billion in Libyan subsidies. Prince Muhammed al-Hassan al-Senoussi, nephew of the last king of Libya, said in a statement: "Farrakhan has now earned the hate of four million Libyans who will never forget what he or others like him are doing. In the long term Farrakhan has betrayed all those who trustingly followed him." The prince, who is based in London, repeated allegations that senior Egyptian officials including President Hosni Mubarak and his sons benefit from Egypt's close relations with Libya. "At least $2 billion a year of Libyan money finds its way to Egypt alone without the knowledge or consent of Libyans...How can there be any confusion as to why Mr Mubarak remains an ardent supporter of Gaddafi and champions Gaddafi's cause as he meets politicians around the world?" he said. Egypt has supported Libya's attempts to solve its dispute with Britain and the United States over a Pan Am plane blown up over the Scottish town of Lockerbie in 1988. The United Nations has imposed an air embargo and other sanctions on Libya for refusing to hand over for trial in Briatin two Libyan men accused of planting a bomb on the plane. But Mubarak has denied that Egypt has in any way helped Libya circumvent the sanctions. The prince added: "Not all those who work in Gaddafi's inner circle are sympathetic to him...Many are far from happy. I have received messages that several from this inner circle, both inside and outside Libya, are planning action." "With or without help Libyans will remove this wicked tyrant and establish constitutional government," he concluded. 6657 !GCAT !GCRIM !GVIO Palestinian gunmen on Saturday shot and wounded two Romanian workers who crossed from Israel to the West Bank to shop, the Israeli army said. "Two Romanian workers were wounded today, one seriously, the other lightly, from a pistol fired by a local resident who fled. The workers were shopping in Baka el Sharqia near Tulkarem (in the West Bank)," an army spokesman said. Security sources said Palestinians might have mistaken the two for Israelis. Israel has allowed around 100,000 foreigners from Eastern Europe and Asia to work in Israel, replacing Palestinian labourers from the West Bank and Gaza which the Jewish state has kept sealed off for much of the last six months. Palestinian President Yasser Arafat said on Saturday Palestinians might resurrect their national uprising against Israel if peace moves failed. 6658 !GCAT !GPOL !GVOTE Lebanon's billionaire Prime Minister Rafik al-Hariri has pegged his political future to winning a seat in the third round of Lebanon's parliamentary elections in Beirut on Sunday. Hariri, who has set Lebanon well on the road to recovery in four years as prime minister, has said he will not seek the premiership of the new government if he loses the "Battle of Beirut". The vote is the third round of an election to Lebanon's 128-seat parliament spread over five Sundays. Polling began in Mount Lebanon on August 18 and ends in the eastern Bekaa Valley on September 15. Hariri is expected to score an easy win when Beirut's 377,000 eligible voters pick 19 parliamentary deputies. Newspapers have nicknamed his rich and powerful electoral machine "the bulldozer". They say he aims at winning 100,000 votes, a total likely to eclipse all rivals. Analysts say Hariri, a 51-year-old construction tycoon who has never held electoral office, wants to build an electoral base that would make him a political fixture in Lebanon. Dynamic and affable, he is popular in Beirut thanks to his multi-billion dollars reconstruction drive that has restored 24-hour electricity, improved telephone services and roads and is changing the face of much of the capital. But Hariri may not achieve his aim of sweeping into parliament at the head of 16 allied candidates -- part of a drive for a "unified" parliament virtually free of opposition. He faces a tough battle with Selim al-Hoss, a respected former prime minister and champion of Beirut's Sunni Moslem political establishment, which resents the onslaught of power and money that Hariri and his supporters represent. The Sunni establishment sees Hoss as representing the rule of law, non-partisan, balanced politics and relative independence from Syria -- whereas Hariri and his ministers flock to Damascus for rulings on almost every domestic issue. While Hariri and probably Hoss are shoo-ins on Sunday, the real battle is between their lists of candidates. Analysts say Hariri needs half his list to win to claim a solid victory. But many Beirutis consider most of his list colourless and his inclusion of a representative of the Shi'ite Moslem Amal movement, which frightened west Beirut during the 1975-90 civil war, an insult. Hoss, 66, heads a 13-man list including several parliamentary deputies. Christian deputy Najah Wakim, 52, a bitter critic of Hariri who accuses the government of fraud in the first two rounds and planning the same in Beirut, heads an eight-man list. The Lebanese Association for Democracy of Elections, Lebanon's only independent electoral watchdog, also accused the government on Friday of a "huge number" of violations in the first two rounds and warned against more. Wakim and Hoss have agreed to swap votes in a bid to stop Hariri's juggernaut. They have done a similar deal with the pro-Iranian Hizbollah (Party of God). 6659 !GCAT !GDEF !GPOL !GVIO An Iraqi opposition group in Jordan urged Iraqi troops on Saturday to rebel against President Saddam Hussein to thwart any attacks on Kurdish-held territory. "The Iraqi National Accord (INA) warns of frightening movements and premeditated plans and preparations by (Iraqi President) Saddam Hussein to strike against the liberated areas of northern Iraq," the group said in a faxed statement. "The INA calls on the Iraqi army and armed forces to rebel and thwart Saddam's plans, abort his rash adventure and stop his orders being carried out." An INA spokesman said around 50 tanks had been shelling the northern city of Arbil since 3.30 a.m. (2330 GMT). He said the tanks were stationed between four to 10 km (two to six miles) from Arbil. London-based Iraqi exiles said earlier that Iraqi tanks had entered Arbil but the INA spokesman, who said he was in touch with members in Arbil and Mosul, could not confirm their reports. Arbil is inside the safe haven zone patrolled by U.S., British and French planes since the end of the 1991 Gulf War. The Iraqi National Accord was the first Iraqi opposition group to set up a base in Jordan after King Hussein broke ties with Saddam last year and called for a change of leadership in Baghdad. 6660 !C13 !CCAT !GCAT !GENV Egyptian authorities have impounded two oil tankers suspected of spilling oil near a port in the Red Sea, an official in the Suez Canal Authority said on Saturday. The Egyptian Environmental Affairs Agency (EEAA) is investigating a slick suspected to have been caused by either a Greek or an Egyptian tanker or both at Ras Adabiya port, 15 km (10 miles) south of Suez town, he said. The Nabila III, which is owned by the Egyptian General Petrolum Corporation, was carrying 23,000 tonnes of oil, while the Greek-registered World Kudos was carrying 33,000 tonnes. The captains have been questioned and released. Last April Egyptian officials demanded $23.5 million in compensation from the Norwegian company Kvaerner for damage caused to 2,000 square metres of Red Sea coral reef by one of its luxury cruise liners. 6661 !GCAT !GDIP Egyptian state newspapers attacked the British government for naivety and hypocrisy on Saturday in a row over a conference of Islamists in London on September 8. Front-page editorials in the newspapers al-Ahram and Akhbar el-Yom said the British government was aiding and abetting "terrorism" by allowing the Islamists to meet. Egyptian fundamentalist Sheikh Omar Abdel-Rahman is expected to send the conference a recorded message from prison in the United States. Other Moslem militant opponents of the Egyptian government are likely to attend. Akhbar el-Yom editor in chief Ibrahim Siada said he hoped Arab countries would show their anger at London's behaviour by cancelling commercial contracts with Britain. British Foreign Secretary Malcolm Rifkind has said he will act against the conference only if British law is broken. "People who wish to hold conferences of course don't need to seek permission from the government in Britain...As long as they obey our laws then that is not something the government would normally interfere with," he said. The Egyptian newspapers ignored his explanation of the legal situation and speculated that the British government had some ulterior motive for letting the conference take place. "It could be that it's a question of some kind of neo-colonialism...by which Arab and Islamic societies would be weakened by indirect support for terrorism, so that they would become pliant and obedient to the orders of the West, with Britain in the forefront," said al-Ahram. "Or we could be dealing with a new Crusader war against Islam, this time by polishing the image of the terrorists as representatives of true Islam...so that squeezing the Arab and Islamic world is comprehensible and justifiable," it added. "Whatever the purpose, Britain's behaviour will be no more than unprecedented political naivety. However accustomed we might be to Western and especially British political hypocrisy, what is happening in London goes beyond all bounds," it said. "We do not think it will be long before those who play with fire in Britain will have their fingers burnt," it added. Akhbar el-Yom said the British government was actively facilitating the conference by giving out visas to Moslem militants from all over the world. "It really surprises us that this democratic right (of assembly and freedom of expression) be granted to people proven to be involved in assassinations, in financing operations aimed at killing dozens and hundreds of innocents," it said. The Egyptian and Algerian governments have asked the British government for explanations on the conference. 6662 !GCAT !GPOL !GVIO Iraq's Deputy Prime Minister Tareq Aziz said on Saturday Iraqi troops were fighting in northern Iraq to aid Kurdish rebel leader Massoud Barzani against rival forces. "The leadership has decided to provide support and military aid to Mr Massoud Barzani and his comrades to enable them confront the vicious aggression...from (Patriotic Union of Kurdistan chief) Jalal Talabani," Aziz said in a statement carried by the official Iraqi News Agency (INA). Aziz said Iraq's military intervention, the first on such scale since the U.S. and allies decided to protect Iraqi Kurds against Baghdad, was in response to a plea from Barzani to President Saddam Hussein to back him militarily and save his people from attacks by Iran and Talabani. He said Barzani sent a message to Saddam on August 22 in which he said: "The conspiracy is beyond our capability therefore we plead with your excellency to order Iraqi armed forces to interfere to help us to evade the foreign threat and put an end to Talabani's treason and conspiracy." U.N. relief officials said they were not aware that the tanks advancing on Arbil were manned by Iraqi troops as they advanced from KDP-controlled areas and raised KDP flags. 6663 !GCAT These are the leading stories in the Moroccan press on Saturday. Reuters has not verified these stories and does not vouch for their accuracy. LE MATIN DU SAHARA - Tunisian Prime Minister Hamed Karoui due to visit Morocco on Wednesday. - King Hassan meets Egyptian ambassador. LIBERATION - Youth representatives from southern provinces meet government ministers to discuss jobs creation and development programmes. - Former Israeli prime minister Shimon Peres says Israel and Arabs have only one choice: Peace. AL-MAGHRIB - National Rally party plans meetings throughout Morocco to urge people to vote "yes" in September 13 referundum. 6664 !GCAT !GCRIM !GPOL !GVIO Palestinian prison officials on Saturday released 22 Islamic activists jailed since a wave of suicide bombings in Israel beginning in February, a Palestinian security official said. He said the prisoners were released early on Saturday from the Jenin prison in Nablus where Palestinian President Yasser Arafat was a holding a meeting of his self-rule Authority. Palestinian police rounded up hundreds of Islamists in a crackdown on the Hamas and Islamic Jihad groups which have spearheaded opposition to Israel-PLO peace deals. Relatives of the prisoners have assailed Arafat for holding the activists for months without trial. Hundreds remain behind bars. The official said the freed prisoners had signed a commitment to respect the law and refrain from violent activity. The bombings carried out by the Moslem militants in February and March killed 59 people in the Jewish state. 6665 !GCAT !GVIO An Iraqi Kurdish group said it -- not Baghdad forces -- was responsible for an attack on Saturday on the main northern city of Arbil. "We attacked Arbil. The PUK (Patriotic Union of Kurdistan) came out with claims that Iraq attacked so the United States would intervene," a representative of the Kurdistan Democratic Party (KDP) told reporters. The PUK have held the disputed northern Iraqi "capital" of Arbil -- seat of the autonomous Iraqi Kurdish parliament -- since December 1994. The rival Iraqi Kurds have presided uneasily over northern Iraq -- protected from Baghdad by U.S.-led allied air power -- since the 1991 Gulf War. Turkish reporters recently in northern Iraq said they had seen KDP troops mass around Arbil. 6666 !GCAT !GDIP !GVIO United Nations relief officials said on Saturday the fighting in Arbil in northern Iraq was between rival Kurdish factions and they were not aware of any Iraqi military advance on the city. "KDP (Kurdistan Democratic Party) is trying to overtake the city. They are using tanks. I think they will succeed. We have in no way seen any Iraqi troops in the city or in its approaches," a U.N. relief official told Reuters. 6667 !GCAT These are the leading stories in the Tunisian press on Saturday. Reuters has not verified these stories and does not vouch for their accuracy. LA PRESSE - After Tunisia called on France to respect Tunisian immigrants' dignity, France says it welcomes legal Tunisian residents. - Tunisia's exports of spare parts amounted to 220 million dinars in 1995. LE TEMPS - Trade talks between Tunisia and the Palestinian Authority. - Speaker of parliament Habib Boulares arrives in Tripoli to represent President Zine al-Abidine Ben Ali at the Libyan revolution anniversary celebrations. ($1 = 0.96 dinar) 6668 !GCAT !GVIO Palestinian President Yasser Arafat said on Saturday Palestinians might resurrect their national uprising against Israeli rule if peace moves fail. "One of our options is to return to the intifida (uprising)," he told high school students in the West Bank town of Nablus on the first day of the new school year. "You remember I described you as the generals of the stones. Keep up the spirit of resistance." Arafat said this week the Israeli government's hardline policies on Jewish settlement and Jerusalem were tantamount to war. It was the second time in two days he warned Israel that Palestinians had other options to peace. Stone-throwing youths led the Palestinians' seven-year national uprising against Israeli rule in the West Bank and Gaza beginning in 1987. A landmark Israel-PLO interim peace deal ended the intifada in 1993. Prime Minister Benjamin Netanyahu, who ousted Israeli peacemaker in a national election three months ago, opposed the Israel-PLO peace agreement and has refused so far to meet Arafat. 6669 !GCAT !GVIO An Iraqi opposition group on Saturday said Iraqi tanks had entered the Kurdish city of Arbil, administrative centre of northern Iraq. "Iraqi tanks have entered the city in the last hour and nine tanks have been destroyed by Kurdish forces," a spokesman for the Iraqi National Congress (INC) told Reuters by phone from London. There was no independent confirmation of the report. The spokesman said around 60 Iraqi tanks were advancing on the city. Iraqi forces began an artillery attack on Arbil at 4.50 a.m. (0050 GMT) and heavy shelling has continued since then, the INC said. The spokesman said people from the city and surrounding villages were trying to leave the area. According to first reports there was a large number of casualties in Arbil, he said. 6670 !GCAT These are some of the leading stories in the Jordanian press on Saturday. Reuters has not verified these stories and does not vouch for their accuracy. AD DUSTOUR - Jordanian-Omani summit in Aqaba on Saturday. - Saudi delegation visits agricultural areas in Jordan Valley; a list of goods to be exported to be announced via official channels. - Stock prices to rise gradually after a series of economic measures to boost private sector investment. AL RAI - Transport minister says he plans to restructure transport sector on new basis. AL ASWAQ - Customs chief to meet private sector to explain new customs law. 6671 !GCAT These are the leading stories in the Egyptian press on Saturday. Reuters has not verified these stories and does not vouch for their accuracy. AL-AHRAM - President Hosni Mubarak discusses containing the tension between Israel and the palestinians, in phone calss with Netanyahu and Arafat. Egypt condemns the policy of judaising Jerusalem. Foreign Minister Amr Moussa will visit Oaslo this week for talks on the peace process. British Foreign Office says relations with Egypot wil not be affected by small irritants like the September 8 conference of Moslem extremists in London. The Egyptian Foreign Ministry summoned the British charge d'affaires in Cairo and asked him for clarifications about this conference. - Information Minister Safwat el-Sherif will go to Tripoli today to attend celebratons of Gaddafi's revolution. - Turmoil in Liberal party after party leader Mustafa Kamel Murad dismisses party newspaper editor Mustafa Bakri. AKHBAR EL-YOM - Amr Moussa criticises Israeli policy in interview with Israeli newspaper Maariv. - Presidential security refused to hold up the traffic for President Mubarak's motorcade when he visited Alexandria University last Wednesday. Ordinary people were amazed to see Mubarak's car among the buses, cars and taxis! - Washington remains enthusaistic about the Middle East economic summit planned for Cairo in November. AL-GOMHURIA - Finance Minister Mohieddin el-Gharib says tourists may be able to reclaim sales tax on goods they have bought. - Prime Minister Kamal Ganzouri today opens a project to supply gas to 60,000 houses in Alexandria. -- Cairo newsroom +20 2 578 3290/1 6672 !GCAT These are some of the leading stories in the official Iraqi press on Saturday. Reuters has not verified these stories and does not vouch for their accuracy. JUMHOURIYA - Russian deputy foreign minister arrives in Baghdad - Energy committee at the National Assembly discusses prospects of future investments in oil and gas in Iraq - Informatioon minister calls for the immediate withdrawal of Iranian troops from northern Iraq AL-IRAQ - Iraqi workers to elect their trade union leaders tomorrow QADISSIYA - Transport ministry gears up for the ferrying of humanitarian supplies once Iraq's oil deal with the United Nations goes into effect - Ministry of industry and minerals urges citizens to rationalise use of electricity 6673 !GCAT !GCRIM !GPOL Controversial black U.S. Nation of Islam leader Louis Farrakhan promised on Friday to mount "the mother of all court battles" against a U.S. decision to bar him from accepting a $250,000 human rights award in Libya. Speaking at the award ceremony in Tripoli, the Libyan capital, Farrakhan thanked the prize committeee for presenting him with the Muammar Gaddafi Human Rights Award for 1996, but asked it to retain the accompaying prize money. "While I will accept the honour of the prize, I will ask you to hold the monies until this matter is decided in a (U.S.) court of law," he said. The U.S. Treasury Department on Wednesday denied Farrakhan's application to receive either the $250,000 or $1 billion that Gaddafi, the Libyan leader, had pledged to the Nation of Islam after meeting Farrakhan in January. The Treasury said Libya had been on Washington's list of states that sponsor international terrorism since December 1979. Farrakhan, a black Moslem minister, organised last October's Million Man march that brought many thousands of black men to Washington for a peaceful rally. He told the awards ceremony that the gift "has no attachment whatsoever to the government of Libya" and was simply named after its leader. He said that instead of blocking the gift, which would have helped to build mosques, schools and hospitals in African-American districts, the U.S. administration should have matched it with a gift of its own. "And so we fight what we consider the mother of all court battles, and we believe we will prevail," he said. In a statement read during the ceremony, the International Popular Committee, which Libyan officials say is a non-government organisation of Libyans and international figures interested in human rights, said it awarded Farrakhan the prize as a representative of African-American people. Previous recipients include South African President Nelson Mandela and former Algerian leader Ahmed Ben Bella. "Louis Farrakhan and the other Million Man March leaders are true fighters who appeal for freedom, justice, equity and human dignity. For this reason we decided to award our 1996 prize to Louis Farrakhan," the committee said. Farrakhan appealed to U.S. President Bill Clinton to reverse the Treasury decision. "I appeal to President Bill Clinton to allow Louis Farrakhan and the Nation of Islam to receive the gift that will allow me to continue my good work in America," he said. In a reference to Clinton's campaign call to voters to help build a bridge to the 21st century, Farrakhan said: "I would very humbly like to help you build that bridge to the future. It can't lead to a good future if it is not built on truth and justice." Farrakhan brushed off criticism in Washington of his visit to Tripoli and his ties to Gaddafi. "As a Moslem, I should be free to offer words of comfort to those who are suffering under sanctions and embargo in Libya, Iran, Iraq, or even non-Moslems in Cuba," he told the ceremony. "If I disagree with another government or ... live in another society and disagreed with that government you might find me dead in a ditch. "I still might end up that way, unless it pleases Allah. I don't think that it pleases Allah that any force in America will be able to take my life," he added to loud applause. 6674 !C13 !CCAT !GCAT !GDIS California legislators gave final approval on Friday to a controversial plan creating a $10.5 billion agency to sell earthquake insurance to homeowners, sending it to the governor for his signature. After months of lobbying in the state Legislature, the two final and most important California Earthquake Authority (CEA) bills passed in the state Senate Friday by votes of 28-to-5 and 28-to-6. The Assembly had already approved the measures. A spokesman for Gov. Pete Wilson said the Republican governor would sign the bills. The authority will be a privately financed, publicly managed state agency that will provide insurance coverage for earthquake damage to residential property owners, mobile homeowners and renters in the state. "More than anything, we have brought stability to the homeowners market," said state Senator Charles Calderon, a Democrat and a key backer of the CEA legislation. "It brings certainty for the insurance companies and it brings certainty to the homeowners." Calderon said the California legislation could be "a model for all states to follow." The earthquake authority was proposed as part of a plan to help solve the state's homeowners' insurance crisis. Because state law requires insurers to offer earthquake coverage with every homeowners' policy, many insurance companies stopped selling new homeowners' policies and some considered dropping their existing customers to reduce their exposure to earthquake losses in California. The $10.5 billion CEA will be funded with premiums paid by those who purchase earthquake coverage, cash from participating insurance companies, reinsurance, as well as capital market investors. The plan requires the participation of insurance companies representing at least 70 percent of the homeowners insurance market. The Personal Insurance Federation of California said the CEA would help increase insurer competition in the homeowners market and would help to lower homeowners insurance prices. Its critics in the state Legislature said the CEA was little more than a bailout for insurance companies. "This is essentially an insurance protection act and not true assistance to the homeowner," state Senator Herschel Rosenthal, a Democrat, said. State Insurance Commissioner Chuck Quackenbush maintains that the CEA would, in its first year of operation, have enough resources to pay all claims from an earthquake more than twice as destructive as the 1994 Northridge quake, which caused billions of dollars of damage in Los Angeles. Under the complex plan that will fund the CEA, insurance companies that participate in the authority will provide the first non-reimbursable $1 billion in cash and will commit an additional $3 billion if needed to pay earthquake claims. The CEA will purchase $2 billion in reinsurance and will be authorized to borrow an additional $1 billion. Capital market investors would provide $1.5 billion to pay claims in excess of $7 billion, and if claims exceed $8.5 billion, the next $2 billion would be raised by another assessment on participating insurance companies. If an earthquake produces more claims than available resources can handle, the California state Treasurer would be authorized to incur debt up to $1 billion, which would be repaid through assessments on CEA policyholders. "Much of the groundwork has already been done, and barring unforeseen complications, I am confident that the CEA will be up and running by Dec. 1," Quackenbush said. 6675 !GCAT !GDIP !GVIO President Bill Clinton on Saturday reacted strongly to a budding Gulf crisis, ordering U.S. forces in the region on high alert in response to Iraqi attacks on Kurdish rebels. In a most unusual setting for a policy announcement -- an unscheduled roadside stop during a post-convention campaign swing by bus through west Tennessee -- Clinton said Iraq's storming of the Kurdish stronghold of Arbil was a matter of "grave concern" to the United States. "Today I have placed our forces in the region on high alert and they are being reinforced," Clinton said. His announcement followed telephone consultations with advisers in Washington and a huddle with Gore between campaign stops. Clinton told the crowd that Iraqi forces had overrun Arbil, in a part of northern Iraq controlled and populated by the Kurds, but that the situation was unclear, with reports of heavy fighting in populated areas. He added that there were indications that Kurdish factions might be involved in the operations with Iraq. "These developments ... cause me grave concern," Clinton said, adding: "It is premature at this time, and I want to emphasize that -- highly premature -- to speculate on any response we might have." A spokesman for Iraq's Revolutionary Command Council said late on Saturday that Iraq would soon withdraw its troops, but White House spokesman Mike McCurry said he had heard nothing to corroborate the report. McCurry also sharply rejected criticism from Republican presidential candidate Bob Dole, who called for the ban on Iraqi oil sales to continue given the movement of Iraqi forces into northern Iraq and disregard by Iraq for U.N.-approved inspections of its nuclear facilities. These developments, Dole said, "reinforce my belief that the move to relax sanctions on the sale of Iraqi oil was premature and ill-advised and should not be implemented." "We would strongly dispute the notion that the action was ill-advised," McCurry said. "These were tightly structured sales for humanitarian relief." U.S. defense officials said U.S. military flights to enforce no-fly zones in both northern and southern Iraq had doubled over the weekend. A senior administration official traveling with the president said Iraq had not violated an allied no-fly zone established to protect the Kurds. U.S. plans rely heavily on air power to deter any advances by Baghdad, but there are also 23,000 U.S. troops in the area. In addition to 158 F/A-18, F-14 and other fighter planes on the aircraft carriers Vinson and Enterprise, which are in the region, an Air Force air expeditionary force of 30 to 40 F-15 and F-16 fighter planes and fuel tankers is ready to fly from three bases in the United States, defense officials said. This would include nearly 1,000 Air Force personnel in ground and support crews, they said. McCurry told reporters the administration was puzzled about what the military objectives of Saddam Hussein might be, but he said the Iraqi president "never misses an opportunity to miscalculate." A senior administration official said the United States had repeatedly warned Iraq that it would be making "a very serious mistake" if it intervened in an internal power struggle among Kurdish factions that has caused bloody fighting in northern Iraq. But the official played down chances of an imminent U.S. military response to Iraqi defiance of Washington. "I expect to see over the course of coming days a fairly extensive diplomatic effort as the international community understands and addresses what we see happening in Iraq," the official said. Defense officials said no U.S. forces had actually moved because of events in northern Iraq. But they said contingency planning had been completed. 6676 !GCAT !GWEA The receding threat of Hurricane Edouard on Saturday persuaded residents and tourists on the Outer Banks of North Carolina to stick to plans to spend the Labor Day holiday weekend at beach communities. Edouard, with maximum winds of 115 mph (185 kph), was a diminished threat to coastal North Carolina but an increased threat to the northeastern United States up to New England, a National Hurricane Center spokesman said. All hurricane warnings and watches have been dropped for North Carolina. On the Outer Banks all roads and campgrounds were open, as were inns and most shops, and ferries were functioning. "We could afford to sit and wait and watch very carefully the progress of Edouard as it moves past our coastline," said Clarence Skinner, vice chairman of the Dare County Board of Commissioners. He said there appeared to be no threat to life or limb and that gale force winds were not expected actually to strike the coast. But ocean overwash during high tides remained a concern. "That could stop traffic on Highway 12," the only road to get people in some of the villages back to the mainland, Skinner said. Although cars with surfboards on the roof had headed toward the beach, red flags indicating "no swimming" flapped in heavy winds along the beaches. "The water's a little angry and you can have these sudden high washes that can take you off shore, and it can happen without warning," Skinner said. Overall foot traffic was lighter than usual, too. "For a Saturday, on Labor Day weekend, this place should be packed," a rescue worker patrolling the beach said. Instead, a few people walked the beaches, some with children and pets. Earlier, people were biking, jogging, in-line skating and playing golf in Manteo and neighboring Nags Head, Kill Devil Hills and Kitty Hawk. At 5 p.m. EDT (2100 GMT), the center of Edouard was located at latitude 33.2 north, longitude 70.1 west, about 340 miles (545 kms) east-southeast of Cape Hatteras, North Carolina, and was moving north at 12 mph (19 kph). Forecasters posted a hurricane watch from Cape Charles to Plymouth, Massachusetts, and a tropical storm warning from Cape Charles to Cape Henlopen, Delaware, during the U.S. Labor Day holiday weekend. The Federal Emergency Management Agency geared up for Edouard's possible arrival on the East Coast, putting on alert emergency teams armed with communications equipment, power generators and supplies, officials said. But for Susan Scofield, visiting North Carolina from Washington state, Edouard was less a threat than a spectacle. "It's exciting," she said, watching from a walkway near her Nags Head hotel as the waves climbed. The Outer Banks are a slender strip of islands inside the Gulf Stream and in some places more than 20 miles (32 km) from the North Carolina mainland. The barrier islands, as they are called, prevent big ocean waves and storm surges from reaching the mainland. They are home to about 42,000 people and a prime tourist attraction. Members of the hotel industry said Edouard was not affecting business. "The Weather Channel didn't overreact this time. It just destroyed us last time," Holiday Inn manager Michelle Sears said, referring to Hurricane Bertha, which struck last month. Forecasters were also tracking Tropical Storm Fran, which bordered on hurricane strength late Saturday with maximum winds of 70 mph (112 kph), but it was not an immediate threat to any land area. At 5 p.m. EDT (2100 GMT), Fran was located at latitude 21.7 north and longitude 61.9 west about 360 miles (575 kms) northeast of San Juan, Puerto Rico, and moving to the northwest at 7 mph (11 kph). 6677 !GCAT !GPOL !GVIO President Bill Clinton on Saturday reacted strongly to a budding Gulf crisis, ordering U.S. forces in the region on high alert in response to Iraqi attacks on Kurdish rebels. In a most unusual setting for a policy announcement -- an unscheduled roadside stop during a post-convention campaign swing by bus through west Tennessee -- Clinton said Iraq's storming of the Kurdish stronghold of Arbil was a matter of "grave concern" to the United States. "Today I have placed our forces in the region on high alert and they are being reinforced," Clinton said. His announcement followed telephone consultations with top advisers in Washington and a huddle with Gore between campaign stops. Clinton told the crowd that Iraqi forces had overrun Arbil, in a part of northern Iraq controlled and populated by the Kurds, but that the situation was unclear, with reports of heavy fighting in populated areas. He added that there were indications that Kurdish factions might be involved in the operations with Iraq. "These developments ... cause me grave concern," Clinton said, adding: "It is premature at this time, and I want to emphasize that -- highly premature -- to speculate on any response we might have." U.S. defense officials said military flights to enforce no-fly zones in both northern and southern Iraq had doubled over the weekend. A senior administration official traveling with the president said Iraq had not violated a United Nations no-fly zone established to protect the Kurds. U.S. plans rely heavily on air power to deter military adventurism by Baghdad, but there are also 23,000 U.S. troops in the region. In addition to 158 F/A-18, F-14 and other fighter planes on the aircraft carriers Vinson and Enterprise, which are in the region, an Air Force air expeditionary force of 30 to 40 F-15 and F-16 fighter planes and fuel tankers is ready to fly from three U.S. bases in the United States, defense officials said. This would include nearly 1,000 Air Force personnel in ground and support crews, they said. White House spokesman Mike McCurry told reporters the administration was puzzled about what the military objectives of Saddam Hussein might be, but he said the Iraqi president "never misses an opportunity to miscalculate." A senior administration official said the United States had repeatedly warned Iraq that it would be making "a very serious mistake" if it intervened in an internal power struggle among Kurdish factions that has caused bloody fighting in northern Iraq. But the official downplayed chances of an imminent U.S. military response to Iraqi defiance of Washington. "I expect to see over the course of coming days a fairly extensive diplomatic effort as the international community understands and addresses what we see happening in Iraq," the official said. Defense officials said no U.S. forces had actually moved because of events in Northern Iraq. But they said contingency planning had been completed. Also on Saturday, Republican presidential candidate Bob Dole called for the ban on Iraqi oil sales to continue given the movement of Iraqi forces into northern Iraq and disregard by Iraq for U.N.-approved inspections of its nuclear facilities. These developments, Dole said, "reinforce my belief that the move to relax sanctions on the sale of Iraqi oil was premature and ill-advised and should not be implemented," he said. 6678 !GCAT !GPOL President Bill Clinton and Vice President Al Gore took their post-convention bus tour along country roads in Tennessee and Kentucky on Saturday, preaching a gospel of family values and economic prosperity. Creeping along at about 30 to 40 miles an hour (48 to 64 kph), Clinton and Gore and their wives Hillary and Tipper and their 14-bus caravan stopped often at tiny rural communities stirring up grassroots support for their re-election on Nov. 5. The two-day bus tour wound through parts of Missouri, Illinois, Kentucky and Tennessee, Gore's home state. Clinton carried them all in 1992 and hopes to fend off a challenge for them this year from Republican Bob Dole. After a mid-afternoon rally in the west Tennessee city of Dyersburg, the tour was to end in Memphis on Saturday night, and Clinton was to fly on to his home state of Arkansas for the weekend. "Tipper and Hillary and Al and I love these bus trips, but the closer they get to home, the better I like them," Clinton said. In Troy, Tennessee, up the road from Dyersburg, Clinton with one breath talked about getting a kiss from 101-year-old Mrs. Jim Bob Robertson, and with the next announced he had put U.S. forces on high alert in response to Iraqi troop attacks in northern Iraq. "She may be 101 years old, but she still kisses real good," Clinton said. At rally speeches, Clinton said his policies have led to strong economic growth in America, and he rejected Republican Bob Dole's proposed 15 percent across-the-board tax cut as unaffordable. He promoted his more modest proposals for tax reductions for middle-class families, including a new one announced on Thursday at the Democratic National Convention in Chicago to free home sellers of a burdensome capital gains tax. The White House announced Clinton would cut short by one day his current campaign schedule, skipping a trip to Pennsylvania on Tuesday, because the president is exhausted from travel including a four-day whistle-stop train tour to Chicago last week. Rolling through western Kentucky's tobacco country, after an overnight stay in Paducah, Clinton and Gore saw some signs on the road opposing the Food and Drug Administration's decision to regulate nicotine as a drug as part of Clinton's efforts to restrict marketing and sale of cigarettes to minors. The opposition prompted Kentucky Democratic Sen. Wendell Ford, travelling on the bus with Clinton and Gore, to say, "I like disagreement once in a while." "Hell, it makes you talk about the issues," the gravelly voiced Ford told several hundred people at a Clinton-Gore rally in tiny Mayfield, Kentucky. "If you didn't talk about the issues, you wouldn't be an American. If you're not an American, you're under a dictatorship." Clinton and Gore steered clear of any tobacco-related comments in their speeches. In Mayfield a knot of Dole-Kemp supporters gathered in the back of the crowd, one holding a sign that said: "Let us keep our cigarettes -- We won't inhale." 6679 !GCAT !GPOL !GVIO President Bill Clinton on Saturday placed U.S. forces in the Gulf on high alert and said he was reinforcing them in response to Iraqi attacks on Kurdish dissidents in northern Iraq. During an unscheduled stop of his campaign bus in the tiny town of Troy, Clinton told the crowd he was gravely concerned about Iraq's storming of the Kurdish stronghold of Arbil but considered it too early to speculate on a U.S. response to Iraqi actions. A senior administration official said Iraq had amassed as many three tank divisions and 40,000 troops composed of elite Iraqi Republican Guard troops armed with heavy artillery and surface-to-air missiles near Arbil. Clinton told the crowd: "Early this morning the military forces of Iraq overran the city of Arbil, which is in the portion of northern Iraq controlled and populated by the Kurds. The situation there remains unclear. There are reports of heavy fighting and firing in populated areas." He added there were indications that Kurdish elements might be involved in the operations with Iraq. "These developments, however, cause me grave concern. I have placed our forces in the region on high alert and they are now being reinforced," he said. The president added that he was in touch with those "in the international community that share our concern," and declined to discuss any further action. "It is premature at this time, and I want to emphasize that, highly premature to speculate on any response we might have," Clinton said. Clinton had on Friday ordered the U.S. military to prepare for possible deployment in the Gulf as concern mounted over what the White House called the "provocative" and "saber-rattling" massing of troops by Iraq in the region. Clinton and Vice President Al Gore are on a post-convention campaign bus trip through four states that is to end tonight in Memphis, Tennessee. White House spokesman Mike McCurry said the administration was unclear on what might be the military objectives of Iraqi President Saddam Hussein. The area has been part of a "no fly zone" enforced by U.S.-led forces since the end of the Gulf War in 1991 to protect Kurdish-controlled areas from Iraqi forces. McCurry added that Saddam, "never misses an opportunity to miscalculate." A senior administration official told reporters earlier Saturday the president had authorized "a change in force posture in the region" involving military assets in the eastern Mediterranean and the Gulf and had ordered his top foreign policy officials to review of the situation. Defense officials said at noon EDT (1600 GMT) no U.S. forces had actually moved. But they said planning had been completed for the use, if ordered, of the 200 U.S. warplanes in the region plus up to 40 others from the United States. They said 79 of the 200 fighter planes in the region were on the aircraft carrier Carl Vinson and the rest were enforcing no-fly zones in both northern and southern Iraq, where they said flights have doubled. What made the situation especially menacing, the senior administration official said, was that the Iraqi troops had been issued live ammunition. The official said this was unusual since Saddam, fearful of a military coup, normally does not allow such arming during training exercises. "We haven't seen this type of deployment since 1991," the official said, referring to Iraqi efforts to repress Kurdish dissidents following the Gulf War. That war was halted by the U.S.-led alliance, which rolled back Saddam's 1990 invasion of tiny neighbor Kuwait. The senior official who spoke with reporters said the United States had issued repeated warnings to Baghdad that it would be making "a very serious mistake" if it resumed efforts to repress the Kurds. 6680 !GCAT !GWEA Residents and tourists on the Outer Banks of North Carolina stuck to plans to spend the Labor Day holiday weekend at beach communities on Saturday as the threat of Hurricane Edouard receded. Edouard, with maximum winds of 120 mph (190 kph), was a threat to coastal areas from the Carolinas to New England. But on its current northerly track, the storm was more likely to threaten northeastern coastal areas, National Hurricane Center meteorologist Bill Frederick said. "With the forecast track, the threat decreases some for North Carolina," Frederick said. "If it continues on its present track, it increases the threat to the northeast coast." In the Outer Banks, all roads and campgrounds were open, as were inns and shops, and ferries were functioning. "We have not been touched with storm-force or gale-force winds whatsoever," Sandy Sanderson, director of Dare County Emergency Management Services, said. "We're not encouraging people to stay away." Although cars with surfboards on the roof were headed toward the beach, swimming was banned, Sanderson said. People instead were biking, jogging, in-line skating and golf in Manteo and neighboring Nags Head, Kill Devil Hills and Kitty Hawk. At 2 p.m. EDT (1800 GMT), the center of Edouard was located at latitude 32.6 north, longitude 70.2 west, about 350 miles (560 km) east-southeast of Cape Hatteras, North Carolina, and was moving north at 12 mph (19 kph). Forecasters posted a hurricane watch and tropical storm warning from Cape Lookout, North Carolina, north to Cape Henlopen, Delaware, including the Pamlico and Albemarle Sounds, and said watches and warnings might be extended farther north during the U.S. Labor Day holiday weekend. The Federal Emergency Management Agency geared up for Edouard's possible arrival on the East Coast, putting on alert emergency teams armed with communications equipment, power generators and supplies, officials said. But for Susan Scofield, visiting North Carolina from Washington state, Edouard was less a threat than a spectacle. "It's exciting," she said, watching from a walkway near her Nags Head hotel as the waves climbed. The Outer Banks are a slender strip of islands inside the Gulf Stream and in some places more than 20 miles (32 km) from the North Carolina mainland. The barrier islands, as they are called, prevent big ocean waves and storm surges from reaching the mainland. They are home to about 42,000 people and a prime tourist attraction. Members of the hotel industry said Edouard was not affecting business. "The Weather Channel didn't overreact this time. It just destroyed us last time," Holiday Inn manager Michelle Sears said, referring to Hurricane Bertha, which struck last month. Forecasters were also tracking Tropical Storms Fran and Gustav, but neither presented any immediate threat to land. At 11 a.m. EDT (1500 GMT), Fran's center was located at latitude 21.3 north, longitude 61.6 west, about 350 miles (560 km) northeast of San Juan, Puerto Rico, and was moving northwest at 6 mph (9 kph). Maximum sustained winds were near 70 mph (110 kph), and forecasters said Fran could regain hurricane strength later on Saturday. Tropical Storm Gustav was located near latitude 18.8 north, longitude 42.8 west, about 1,250 miles (2,010 km) east of the Leeward Islands, and was moving northwest at almost 12 mph (19 kph). It had had maximum winds of 40 mph (65 kph) and was not expected to strengthen during the next 24 hours. 6681 !GCAT !GDIP !GVIO President Bill Clinton on Saturday ordered a high-level review of Iraqi troop movements in northern Iraq and authorized a repositioning of U.S. firepower in the Gulf region as contingency moves, a senior administration offical said. The official, who spoke to reporters traveling with Clinton on a campaign tour in the Midwest, said three Iraqi tank divisions composed of elite Iraqi Republican Guard troops and armed with heavy artillery and surface-to-air missiles had massed near the Kurdish stronghold of Arbil. Defense officials said at noon EDT (1600 GMT) no U.S. forces had actually moved. But they said planning had been completed for the use, if ordered by Clinton, of the 200 U.S. warplanes in the region plus up to 40 others from the United States. They said 79 of the 200 fighter planes in the region were on the aircraft carrier Carl Vinson and the rest were enforcing no-fly zones in both northern and southern Iraq, where they said flights have doubled. What made the situation especially menacing, the official said, was that the troops had been issued live ammunition. The official said this was unusual since Iraqi President Saddam Hussein, fearful of a military coup, normally does not allow such arming when troops are involved in training exercises. "We haven't seen this type of deployment since 1991," the official said, referring to Iraqi efforts to repress Kurdish dissidents following the Gulf War. That war was halted by the U.S.-led alliance, which rolled back Saddam's 1990 invasion of tiny neighbor Kuwait. White House spokesman Mike McCurry said Clinton, in the midst of a four-state, post-convention bus trip, had delayed his schedule for an hour on Saturday morning to receive a telephone update from U.S. National Security Adviser Tony Lake back in Washington. "The President and the U.S. government continue to closely monitor the situation in northern Iraq and the movements of Iraqi units," McCurry said. He described the situation on the ground as "very confusing" and said this was due in part to Iraqi Foreign Minister Tareq Aziz's announcement that the Kurdish Democratic Party had asked for the support of Iraqi forces. "We obviously take very seriously any indication that relevant U.N. Security Council resolutions are not being honored," McCurry said in reference to the ban on Iraqi movements against the Kurds imposed after the 1991 Gulf War. A U.N. relief official in Baghdad said Iraqi forces battled their way into Abril on Saturday at 3:45 p.m. local time (1145 GMT) and had raised the national flag, but the White House did not confirm this account. The senior official who spoke with reporters said the United States had issued repeated warnings to Baghdad that it would be making "a very serious mistake" if it resumed efforts to repress the Kurds, but said these warnings have so far gone unheeded. Clinton ordered his senior foreign policy advisers to meet in Washington on Saturday to review the situation and the administration was consulting with allies, including Turkey, on the situation in northern Iraq, the official said. A National Security Council staff member traveling with Clinton was keeping him briefed on the situation and another official source said the president "was not ruling in or out" any of the contingencies open to him to respond to Iraq's action. Clinton had authorized "a change in force posture in the region" involving military assets in the eastern Mediterranean and the Gulf as contingency measures, the senior Clinton administration official said. The United States has two super aircraft carriers, the U.S.S. Enterprise and the U.S.S. Vinson in the region. A U.S. Navy spokesman in Bahrain said American forces, combat vessels and fighter planes patroling the Gulf could respond immediately if called upon. But an official in Washington familiar with the situation downplayed the possibility of U.S. military action. "We are still really early in the process here, real early," the official said. 6682 !GCAT !GWEA Residents and tourists on the Outer Banks of North Carolina stuck to plans to spend the Labor Day holiday weekend at beach communities on Saturday as the threat of Hurricane Edouard receded. Edouard, with maximum winds of 120 mph (190 kph), was a threat to coastal areas from the Carolinas to New England. But on its current northerly track, the storm was more likely to threaten northeastern coastal areas, National Hurricane Center meteorologist Bill Frederick said. "With the forecast track, the threat decreases some for North Carolina," Frederick said. "If it continues on its present track, it increases the threat to the northeast coast." In the Outer Banks, all roads and campgrounds were open, as were inns and shops, and ferries were functioning. "We have not been touched with storm-force or gale-force winds whatsoever," Sandy Sanderson, director of Dare County Emergency Management Services, said. "We're not encouraging people to stay away." Although cars with surfboards on the roof were headed toward the beach, swimming was banned, Sanderson said. People instead were biking, jogging, in-line skating and golf in Manteo and neighboring Nags Head, Kill Devil Hills and Kitty Hawk. At 11 a.m. EDT (1500 GMT), the center of Edouard was located at latitude 32.1 north, longitude 70.3 west, about 370 miles (590 km) southeast of Cape Hatteras, North Carolina, and was moving north at 12 mph (19 kph). Forecasters posted a hurricane watch and tropical storm warning from Cape Lookout, North Carolina, north to Cape Henlopen, Delaware, including the Pamlico and Albemarle Sounds, and said watches and warnings might be extended farther north during the U.S. Labor Day holiday weekend. The Federal Emergency Management Agency geared up for Edouard's possible arrival on the East Coast, putting on alert emergency teams armed with communications equipment, power generators and supplies, officials said. But for Susan Scofield, visiting North Carolina from Washington state, Edouard was less a threat than a spectacle. "It's exciting," she said, watching from a walkway near her Nags Head hotel as the waves climbed. The Outer Banks are a slender strip of islands inside the Gulf Stream and in some places more than 20 miles (32 km) from the North Carolina mainland. The barrier islands, as they are called, prevent big ocean waves and storm surges from reaching the mainland. They are home to about 42,000 people and a prime tourist attraction. Members of the hotel industry said Edouard was not affecting business. "The Weather Channel didn't overreact this time. It just destroyed us last time," Holiday Inn manager Michelle Sears said, referring to Hurricane Bertha, which struck last month. On Hatteras Island, home to seven villages, townspeople were viewing the hurricane casually, although shopkeepers had stacks of cut plywood ready if they needed to board windows quickly. Work crews had removed sand from ocean overwash on Highway 12, the only main road, after high tide on Friday. Residents said it was not unusual for the road to become impassable. In Virginia Beach, Virginia, people played volleyball and strolled along an oceanfront boardwalk, but swimmers were warned away from the water because of strong undertows. Forecasters were also tracking Tropical Storms Fran and Gustav, but neither presented any immediate threat to land. At 11 a.m. EDT (1500 GMT), Fran's center was located at latitude 21.3 north, longitude 61.6 west, about 350 miles (560 km) northeast of San Juan, Puerto Rico, and was moving northwest at 6 mph (9 kph). Maximum sustained winds were near 70 mph (110 kph), and forecasters said Fran could regain hurricane strength later on Saturday. Tropical Storm Gustav was located near latitude 18.8 north, longitude 42.8 west, about 1,250 miles (2,010 km) east of the Leeward Islands, and was moving northwest at almost 12 mph (19 kph). It had had maximum winds of 40 mph (65 kph) and was not expected to strengthen during the next 24 hours. 6683 !GCAT !GPOL !GVOTE President Bill Clinton and Vice President Al Gore took their post-convention bus tour along country roads in Kentucky and Tennessee on Saturday preaching a gospel of family values and modest tax cuts. "On this Labour Day weekend, I know that our values are strong, our confidence is high, and hope is back in America," Clinton said in his weekly radio broadcast. "We are on the right track." The two-day bus tour wound through parts of Missouri, Illinois, Kentucky and Tennessee, Gore's home state. Clinton carried them all in 1992 and hopes to fend off a challenge for them this year from Republican Bob Dole. After a mid-afternoon rally in the west Tennessee city of Dyersburg, the tour was to end in Memphis on Saturday night. At rally speeches, Clinton rejected Dole's proposed 15 percent across-the-board tax cut as unaffordable. He promoted his more modest proposals for tax reductions for middle-class families, including a new one announced on Thursday at the Democratic National Convention in Chicago to free home sellers of a burdensome capital gains tax. The White House announced Clinton would cut short by one day his current campaign schedule, skipping a trip to Pennsylvania on Tuesday, because the president is exhausted from travel that included a four-day whistle-stop train tour to Chicago last week. Rolling through western Kentucky's tobacco country, after an overnight stay in Paducah, Clinton and Gore saw some signs on the road opposing the Food and Drug Administration's decision to regulate nicotine as a drug as part of Clinton's efforts to restrict marketing and sale of cigarettes to minors. The opposition prompted Kentucky Democratic Sen. Wendell Ford, travelling on the bus with Clinton and Gore and their wives Hillary and Tipper, to say: "I like disagreement once in a while." "Hell, it makes you talk about the issues," the gravelly voiced Ford told several hundred people at a Clinton-Gore rally in tiny Mayfield. "If you didn't talk about the issues, you wouldn't be an American. If you're not an American, you're under a dictatorship." Clinton and Gore steered clear of any tobacco-related comments in their speeches. In Mayfield a knot of Dole-Kemp supporters gathered in the back of the crowd, one holding a sign that said: "Let us keep our cigarettes -- We won't inhale." The president found his small-town reverie disrupted by world events. He ordered a high-level review of a massive movement of Iraqi troops in northern Irag and authorised a respositioning of U.S. forces in the Gulf region as a precautionary measure. The developments managed to divert attention from the alleged sex scandal involving his former top campaign manager, Dick Morris, who resigned on Thursday. A sensationalist supermarket tabloid weekly, The Star, reported on Thursday that the married Morris had a year-long affair with a prostitute named Sherry Rowlands and confided in her some White House secrets. In an interview on Friday with MTV, Clinton said he had no plans to rely on Morris as a political adviser in the future but would talk to him as a friend. In that same interview, Clinton denied Dole's frequent charges that he has stolen some ideas from Republicans on ways to promote family values to position himself as a centrist. "I didn't steal their values agenda," he said. "I believe they're American values." The bus tour has generated some large crowds, but some people have been spotted leaving before the president had finished speaking, a possible sign that they simply wanted to see a celebrity in their tiny communities. The oft-criticised Mrs. Clinton spoke at every rally but she avoided making any kind of political message. 6684 !GCAT !GDIP !GVIO President Bill Clinton on Saturday ordered a high-level review of Iraqi troop movements in northern Iraq and authorized a repositioning of U.S. firepower in the Gulf region as contingency moves, a senior administration offical said. The official, who spoke to reporters traveling with Clinton on a campaign tour in the Midwest, said three Iraqi tank divisions composed of elite Iraqi Republican Guard troops and armed with heavy artillery and surface-to-air missiles had massed near the Kurdish stronghold of Arbil. What made the situation especially menacing, the official said, was that the troops had been issued live ammunition. The official said this was unusual since Iraqi President Saddam Hussein, fearful of a military coup, normally does not allow such arming when troops are involved in training exercises. "We haven't seen this type of deployment since 1991," the official said, referring to Iraqi efforts to repress Kurdish dissidents following the Gulf War. That war was forceably halted by the U.S.-led alliance, which rolled back Saddam's 1990 invasion of tiny neighbor Kuwait. White House spokesman Mike McCurry said Clinton, in the midst of a four-state, post-convention bus trip, had delayed his schedule for an hour on Saturday morning to receive a telephone update from U.S. National Security Adviser Tony Lake back in Washington. "The President and the U.S. government continue to closely monitor the situation in northern Iraq and the movements of Iraqi units," McCurry said. He described the situation on the ground as "very confusing" and said this was due in part to Iraqi Foreign Minister Tareq Aziz's announcement that the Kurdish Democratic Party, one of the factions involved in internal strife in the Kurdish area, had asked for the support of Iraqi forces. "We obviously take very seriously any indication that relevant U.N. Security Council resolutions are not being honored," McCurry said in reference to the ban on Iraqi movements against the Kurds imposed after the 1991 Gulf War. A U.N. relief official in Baghdad said Iraqi forces battled their way into Abril on Saturday at 3:45 p.m. local time (1145 GMT) and had raised the national flag, but the White House did not confirm this account. The senior official who spoke with reporters said the United States had issued repeated warnings to Baghdad that it would be making "a very serious mistake" if it resumed efforts to repress the Kurds, but said these warnings have so far gone unheeded. Clinton ordered his senior foreign policy advisers to meet in Washington on Saturday to review the situation and the administration was consulting with allies, including Turkey, on the situation in northern Iraq, the official said. A National Security Council staff member traveling with Clinton was keeping him briefed on the situation and another source in a position to know said the president "was not ruling in or out" any of the contingencies available to him to respond to Iraq's action. Clinton had authorized "a change in force posture in the region" involving military assets in the eastern Mediterranean and the Gulf as contingency measures, the senior Clinton administration official said. The United States has two super aircraft carriers, the U.S.S. Enterprise and the U.S.S. Vinson in the region. A U.S. Navy spokesman in Bahrain said American forces, combat vessels and fighter planes patroling the Gulf could respond immediately if called upon. But an official in Washington familiar with the situation downplayed the possibility of U.S. military action. "We are still really early in the process here, real early," the official said. The crisis erupted as Clinton sought to build on convention momentum by greeting voters along a bus caravan route that began in Cape Girardeau, Missouri on Friday and was to end in Memphis, Tennessee, late Saturday night. 6685 !GCAT !GWEA Powerful Hurricane Edouard continued its northward trek in the Atlantic on Saturday and forecasters cautioned residents along a wide swath of the U.S. Eastern seaboard to track the storm's progress through the Labor Day weekend. Heavy surf was reported as coastal residents began to fill East Coast beaches at the start of the holiday weekend. Edouard, packing maximum winds of 120 mph (190 kph), was a threat to coastal areas from the Carolinas to New England. But on its current northerly track, the storm was more likely to threaten northeastern coastal areas, said National Hurricane Center meteorologist Bill Frederick. "With the forecast track, the threat decreases some for the North Carolina," said Frederick. "If it continues on its present track it increases the threat to the northeast coast." At 8 a.m. EDT (1200 GMT), Edouard's center was located at latitude 31.6 north, longitude 70.6 west, about 375 miles (600 km) southeast of Cape Hatteras, North Carolina, and moving north at 10 mph (16 kph), the National Hurricane Center said. The storm was expected to continue north on Saturday, meteorologists at the center said. Forecasters posted a hurricane watch and tropical storm warning from Cape Lookout, North Carolina, north to Cape Henlopen, Delaware, including the Pamlico and Albemarle Sounds, and said watches and warnings might be extended farther north during the U.S. Labor Day holiday weekend. A hurricane watch indicates that storm conditions are expected within 36 hours, while a warning means conditions are due within 24 hours or less. Along the coastline of New Jersey, Belmar and Point Pleasant closed their beaches entirely, and some towns asked bathers to stop at the waist or at the knees. Surfers ignored warnings to enjoy the storm-driven waves. Edouard's maximum sustained winds were near 120 mph (193 kph), a strong Category Three hurricane capable of severely damaging structures. Little significant change in strength was expected on Saturday. Hurricane force winds extended outward up to 115 miles (185 km) from the center and tropical storm force winds extended outward up to 200 miles (325 km). Forecasters said gale force winds could arrive as early as Saturday night. Riptides and high waves were reported on Friday, and swells were expected to rise even higher as the storm traveled up the coast. Emergency workers said an evacuation of North Carolina's Outer Banks -- a popular vacation destination -- was a strong possibility on Saturday. "We're just keeping a wary eye," said Peter Stone of the emergency management department on Ocracoke Island, which has about 800 residents. "They don't know. We don't know." The National Parks Service announced that its campgrounds along the Outer Banks would close at mid-day on Saturday, and officials said tourism was off. "The number of people down here is way, way down," said Tommy Gray, coordinator for the Hatteras Island Emergency Operations Center. Forecasters were also watching Tropical Storms Fran and Gustav, which were far from land as they traveled across the Atlantic. Fran was downgraded to a tropical storm on Friday afternoon after its winds dropped to 65 mph (105 kmh). Fran was about 340 miles (551 km) east-northeast of San Juan, Puerto Rico at 5 a.m. EDT (0900 GMT). The storm's movement had slowed to just eight mph (13 kph) northwest. It was not expected to draw close enough to Edouard to be drawn into the more powerful storm's path. Tropical Storm Gustav appeared to be breaking up as it moved away from Africa's coast. At 5 a.m. (0900 GMT), its center was about 1,270 miles (2,043 km) east of Antigua and moving northwest near 12 mph (19 kph). Maximum sustained winds were near 40 mph (65 kph). 6686 !GCAT !GDEF !GPOL !GVIO President Bill Clinton has authorized the repositioning of U.S. firepower in the Gulf region in response to Iraqi troop movements near Kurdish strongholds in northern Iraq, a senior administration official said on Saturday. The official, who spoke on condition he not be identified, said the president had authorized "a change in force posture in the region," but did not identify what military assets were affected by the presidential move. The White House did confirm that Iraqi troops had stormed the town of Arbil in northern Iraq. The senior administration official accompanying Clinton on a campaign bus trip in Kentucky said the Iraqi troops surrounding Arbil consisted of three tank divisions of 30,000 to 40,000 Republican guard troops equipped with heavy artillery and surface-to-air missiles. "We haven't seen this kind of deployment since 1991 after the Gulf War when Iraq first moved against the Kurds," leading to the establishment of Operation Comfort by the United States and coalition governments, the official said. The official described the Iraqi movements as especially alarming because live ammunition had been issued to the troops. He said this is a rare development because Iraqi President Saddam Hussein does not allow troops on training exercises to use live ammunition for fear of a military coup. An official in Washington downplayed the possibility of U.S. military action. "We're still early in the process, real early," the official said. At the United Nations, U.S. officials were consulting with their counterparts to decide if the Security Council should meet to discuss the situation in Iraq, diplomats said. 6687 !CCAT !GCAT !GDIS Adds deaths, other details) An explosion leveled Rochester's one-story Lilac Falls Motel, killing two people, fire officials said Friday. "It was an explosion, and then it got involved in fire. As far as I know, it's been to four alarms -- more trucks, more people," said Don Penney of the Rochester Fire Department said. Eyewitnesses told Boston television stations they saw a gasoline truck parked behind the Lilac Falls Motel and smelled gasoline shortly before the explosion. Fire department officials said they were investigating the cause of the blast and searching for any more casualties. Officials did not immediately identify the victims. Local hospital officials said a few firemen were treated for smoke inhalation but there were no other injuries. 6688 !GCAT !GDEF !GDIP President Bill Clinton on Friday ordered the U.S. military to ready itself for any possible action as Washington turned up the heat in the escalating crisis over Iraqi troop movements in northern Iraq. White House spokesman Mike McCurry said Washington was monitoring Iraqi troop movements in the Kurdish region of northern Iraq very carefully and was consulting with other members of the international community about the situation. "The United States is monitoring very closely indications that Iraqi military units near Irbil, in northern Iraq, have been brought into positions and levels of readiness that would enable them to undertake offensive action," McCurry said in a written statement. "We have made clear to Iraq the seriousness with which we view this situation." McCurry said Clinton, who is campaigning in the small Illinois town of Cairo, "has ordered that steps be taken to ensure the United States is prepared for any contingency." "We are confident that Iraq knows how seriously we will take any aggressive behavior," McCurry told reporters. Earlier, in Thebes, Illinois, he said, "We will consider any aggression by Iraq to be a matter of very grave concern." Administration officials described the latest massing of Iraqi troops as "provocative" and "saber-rattling," but appeared confident that Washington's tough reaction would prompt Baghdad to back down. A senior U.S. official said the United States had been communicating its concern over the situation over the past several weeks, mainly through diplomats at the United Nations. Washington has been watching the Iraq situation in recent days, and earlier on Friday a U.S. official who requested anonymity said, "We're concerned. U.S. forces have been told to be prepared to deploy to the region if the president so directs." The official said the concerns were focused on the area around Irbil, near the Iraqi border with Iran and Turkey. There have been U.S. military aircraft deployments to Bahrain, Jordan and Qatar in the last 18 months, and there are U.S. ships in the region "that could be turned at a moment's notice," the official said. CNN reported that Washington was considering sending an air expeditionary force of 30 planes and up to 1,000 support troops to the region. Another similar air expeditionary exercise to Qatar just ended. "There is contingency planning, but we're not ruling anything in and we're not ruling anything out," said one Pentagon official. "No decisions have been made." The official said the United States already had 21 ships, including the aircraft carrier Carl Vinson, and 200 aircraft in the region, operated by more than 20,000 military personnel. The aircraft carrier Enterprise had been in the eastern Mediterranean for exercises for the past several weeks, and one official said there were no plans to move the carrier. CNN also reported that two B-52 bombers were being moved to Guam, about halfway between the United States and the Gulf. The Defense Department had no comment on the report. At the State Department, spokesman John Dinger said late on Friday, "We are keeping close watch on the situation in the north of Iraq and we would take any aggressive Iraqi moves in the area very seriously." On Thursday, Iraq accused Iran of military aggression and said it reserved the right to retaliate for Tehran's alleged deployment of troops into Kurdish-populated regions of northern Iraq. Foreign Minister Mohammed Saeed al-Sahaf, in a statement carried by official newspapers, accused Tehran of sending troops to northern Iraq and said Baghdad "preserved the full right to retaliate." The Kurdistan Democratic Party (KDP) of Massoud Barzani has said that Iran sent troops and military equipment into northern Iraq in support of the guerrillas of its rival, the Patriotic Union of Kurdistan (PUK), led by Jalal Talabani. A cease-fire between the warring Kurdish factions took effect on Wednesday, and the State Department has said it appears to be holding. This latest truce replaced one that took effect on last Friday before collapsing with renewed clashes. Northern Iraq has been split into rival zones since fighting broke out between the two groups in 1994. About 3,000 people died before a previous cease-fire last March. A U.S.-led air force contingent has protected the region against possible attack by Baghdad since shortly after the 1991 Gulf War. Barham Salih, the Washington representative of the PUK, said Iraqi infantry and armor units had advanced by as much as 4.3 miles (seven km) into the no man's land toward the villages of Sheikh Sherwan, Adalok and Bashtapa, whose citizens were now fleeing the army. "The order-of-battle and posture of Iraqi forces indicate aggressive intent," he said. 6689 !CCAT !GCAT !GDIS Investigators have found more microscopic traces of explosives on debris from TWA Flight 800 but said they could not conclude that a bomb or missile caused the plane to crash last month, officials said on Friday. Further evidence, such as physical damage characteristic of a bomb, was needed to determine if the plane was downed by an explosive device, the National Transportation Safety Board and the Federal Bureau of Investigation said in a joint statement. Other traces of chemical explosive were found on the plane's wreckage last week. Although investigators officially said they were "of unknown origin," they have said privately that PETN, a chemical used in plastic explosives, was found on a piece of a passenger seat located near the centre fuel tank where the two wings join the fuselage. "We still cannot conclude that TWA Flight 800 crashed as the result of an explosive device," the NTSB and FBI said. "Investigators still cannot conclude whether this tragedy was the result of a criminal act." CBS News reported on Friday that a compound found in the wreckage was "strikingly similar" to one discovered at the crash site of Pan Am Flight 103, which exploded over Lockerbie, Scotland, in 1988 killing all 259 people aboard and 11 on the ground. CBS News said it had learned that the FBI lab had identified residue of a plastic explosive called "RDX" found on a curtain in the rear of the jet. It said the discovery further bolstered the bomb theory because "RDX and PETN are mixed together to make high-powered explosives." The Paris-bound Boeing 747 exploded and crashed into the Atlantic Ocean on July 17, just minutes after taking off from Kennedy International Airport. All 230 passengers and crew on board were killed. Investigators say evidence so far does not prove or discount any of their three leading theories -- that a bomb, missile or mechanical failure caused the jet to crash. A computer simulation by investigators of the final moments before the crash placed the blast on the jet's right side, The New York Times reported on Friday. The NTSB would not comment on the Times report. The simulation showed almost everything in the first spray of metal, luggage and other material blown from the plane came from a confined area above and ahead of the right wing, the newspaper said. But investigators told the Times the new evidence did not push them much closer to the point where they could declare that the crash was caused by a criminal act. An aviation expert and a law enforcement official who is an explosives specialist both told the newspaper they saw several fist-sized holes punched through the backs of two seats on the far right side of row 23. That is in the centre of the area pinpointed by the computer as the site of the initial blast. The microscopic traces of PETN also were found in that general area. No similar holes have been found in other seats. Officials voiced concern that recovery efforts at the scene of the crash off the coast of Long Island, New York, would be hampered over the weekend by storms brewing in the Caribbean. The storms could churn up wreckage still lying on the ocean floor and force search vessels back into port. Searchers have recovered more than half of the debris that stretched in a mile-and-a-half-long (2.5 km) swath at sea. Of the 230 passengers and crew killed, the bodies of 211 have been recovered. 6690 !C42 !CCAT !E14 !E141 !E41 !ECAT !GCAT !GJOB The pay of working women fell in the early 1990s after rising for more than a decade, reversing a trend that had helped steady family incomes as men's wages tumbled, a study said Sunday. Pay for most men also fell in the latest period, and the wage declines came as compensation for corporate chief executive officers soared, according to the study by the Economic Policy Institute, a liberal think tank in Washington. At the same time, business profitability rose to the highest level in 30 years, according to the study, "The State of Working America", released to coincide with the Labour Day holiday. "The changes in the economy have been 'all pain, no gain' for most workers," the authors of the study wrote. "The economy is clearly in transition, but it is far from certain that it is headed to a better place." "It seems that women who were previously immune have caught a touch of the male wage disease," said Jared Bernstein, a labour economist at the institute and one of the authors of the study. He said the decline was the first time that wages for most working women had dropped, according to the institute's research going back to the late 1970s. The study follows recent reports that have pointed to a modest pickup in wages for American workers. But Bernstein said the recent evidence of rising wages amounted to "a lot of smoke and very little fire" and that wages appear to be stagnating after falling earlier in the decade. For the period between 1989 and 1995, the typical male worker's hourly wages fell 6.3 percent, after inflation, which was consistent with the pace of decline in the 1980s, the study said. But the typical working woman's wages fell 1.7 percent over the same period, reversing some of the 5.7 increase experienced in the 1980s. The decline in wages was not offset by an increase in benefits, according to the study. Total compensation, including wages and benefits, has grown just 0.1 percent faster than hourly wages alone since 1979, the study said. Not suprisingly, the drop in wages contributed to a decline in family income. The annual income of a median family, which means half earn more and half earn less, fell 5.2 percent, or nearly $2,200, between 1989 and 1994, the last year for which data were available. The drop in women's wages also meant families could no longer offset men's lower earnings with increased earnings from wives, the study said. Although wages fell for the typical working woman, the highest-paid women have not suffered a decline. The worst decline in wages came in entry-level jobs. Hourly wages for typical high-school graduates fell almost 7 percent. College graduates also suffered a drop in pay, 9.5 percent for men and 7.7 percent for women. While wages were falling, corporate chief executives' pay soared to 173 times that of the average worker in 1995, from a multiple of 122 in 1989 and about 60 in 1978, the study found. It said the rise in companies' return on invested capital, which hit a 30-year high in 1995, came not from greater investment or improved productivity, but rather was fuelled by stagnant or falling wages. Wages are one of a company's biggest expenses, so any reduction would help profits. "Profit rates are at a 30-year high. That would not be so objectionable if the fruits of growth were being shared equally," economist Bernstein said by telephone. While the study painted a picture of continued tough times for most low- and middle-income families, there were some bright spots. It noted that while job security has dropped, unemployment has dipped to about 5.3 percent, inflation remains relatively low near 3 percent and some tax changes enacted in 1994, especially expanding the earned income tax credit, have helped boost earnings of poor workers. The other authors were Lawrence Mishel, the institute's research director, and John Schmitt, a labour economist at the institute. All figures were adjusted for inflation. The fourth edition of the biennial study can be ordered by calling (800) 374-4844. A summary can be found at the institute's Web site (http://www.epinet.org). A final version is due out in book form in December. 6691 !GCAT !GENT The largest exhibition in 60 years of paintings by post-impressionist master Paul Cezanne ends a three-nation tour on Sunday after setting an attendance record at the Philadelphia Museum of Art. The exhibition, an artistic and financial success, had drawn more than 700,000 visitors to its Philadelphia venue by Friday since its opening on May 30, museum spokesman Matt Singer said. That exceeds by about 200,000 both the originally expected attendance and the museum's previous record, set in 1995 with an exhibition of the Barnes Foundation art collection. At its two other stops, at Paris's Grand Palais and London's Tate Gallery, the exhibition drew 640,000 and 410,000 visitors respectively. Tickets for the Philadelphia exhibition had been sold out since July 26. Musem memberships with ticket purchase privileges also were sold out. In addition to setting attendance records, the exhibition also helped cement and enrich the reputation of Cezanne as a vital precursor of the modern art movement. "It made me realise...the complexity and the pervasion of his influence," said Joseph Rishel of the Philadelphia Museum of Art. Rishel was a co-curator of the exhibit, along with Francoise Cachin of the Musees de France. Said Rishel, "I think one comes out with a lot of new questions...such as, 'How did he do it? , Why is it so remarkably effective still? , Why was the hard core of our audience younger artists looking very hard at Cezanne to figure out how he did it?" "It was just wonderful to see the number of artists really using this show," Rishel said. After the last visitor sees the exhibit on Sunday, the 112 paintings and 75 drawings and watercolors will be taken down and shipped to the private collection and museums, such as the Hermitage in Russia and the Louvre in France, that loaned them. City tourism officials have estimated the exhibition in Philadelphia, the only United States stop for the show, will have contributed $60 million to the city's economy. Final attendance and economic figures will be released next week, Singer said. Rishel said his next challenge as a curator will be preparing a show for 1998 to celebrate the 100th anniversary of French Romantic painter Eugene Delacroix. "One of Cezanne's favourite artists was Delacroix, so I've decided to stay in the family," Rishel said. 6692 !E21 !E211 !ECAT !GCAT Fourteen million children will return this fall to schools needing extensive repairs that will cost an estimated $112 million, building contractors said Friday. The Associated General Contractors of America said school districts have put off maintenance and rehabilitation of buildings to save money as states and local governments have cut taxes. "A third of America's school children are trying to get a leg up in life inside buildings that are overcrowded, poorly ventilated, structurally unsafe or lacking adequate plumbing or lighting," ACG president Lee Wray Russell said in releasing a report on the physical state of schools. In Washington, D.C., a judge declared several schools too unsafe to open next week, forcing city officials to scramble to find classrooms for the children. The contractors' group found 74 percent of schools, about 59,000, were more than 25 years old and nearly one-third were more than 50 years old. It said the age of the buildings was not a problem itself unless the buildings were not maintained. Construction of a new elementary school would cost on average $6 million while a middle school costs $15 million, the report said. The contractors' report was based on a U.S. General Accounting Office study of public schools. 6693 !GCAT !GPOL !GVIO President Bill Clinton coped with a Gulf mini-crisis on Saturday while his campaign bus caravan rolled through the Midwest and his Republican rival Bob Dole's anti-drug message was forced to take a back seat. Travelling along country roads in Kentucky and Tennessee, Clinton made an unscheduled stop at the tiny town of Troy, Tennessee, to announce he had placed U.S. forces in the Gulf on "high alert" in response to Iraqi President Saddam Hussein's aggression against Kurdish strongholds in northern Iraq. The area was supposed to be off-limits to Hussein as part of a "no-fly zone" enforced by U.S.-led forces after the 1990 Gulf War. In apparent disregard of the international position, Iraqi forces took control of the Kurdish city of Arbil early on Saturday. Vice President Al Gore, introducing Clinton to a small crowd in Troy and the international contingent of reporters on the 14-bus tour, pointed out that as president Clinton was in charge of U.S. foreign policy even while campaigning for re-election. Dole remained in Washington on Saturday working on an anti-drug policy, and he used his Saturday radio address to chide the Clinton White House for its anti-drug policy, which he said amounted to a message that drugs are "no big deal." "Unfortunately, from its very first days in office, the Clinton administration -- through neglect and ineptitude -- has sent a ... a message that drugs are no big deal," Dole said. His criticism was overshadowed by developments in Iraq. Still, in an address on Sunday before the National Guard Association, Dole planned to call for the National Guard to take an active role in fighting illicit drugs. Dole's running mate, Jack Kemp, headed for his own campaign tour in Nevada and other Western states. A poll by Newsweek showed that the resignation of Clinton campaign strategist Dick Morris had damaged the president, with nearly a quarter of voters now less likely to vote for Clinton. But among those who said they were Clinton supporters, only 6 percent said the Morris resignation made them less likely to vote for Clinton. Morris quit the campaign on Wednesday after a sensationalist supermarket tabloid reported he had had a year-long affair with a prostitute and had confided White House secrets to her. Among all voters, 27 percent said the resignation made them doubt Clinton's or the Democratic Party's commitment to family values. A broader poll taken Aug. 28-29 showed that 54 percent of voters backed the president, while 33 percent intended to vote for Dole and 5 percent for Texas billionaire Ross Perot. Clinton and Gore's caravan travelled into tobacco country in Kentucky and found some needling opposition from Dole-Kemp supporters. "Let us keep our cigarettes -- we won't inhale," one sign in Mayfield, Kentucky, read. 6694 !GCAT !GCRIM !GDIS An illegal drag race on a Dallas street turned deadly when another vehicle veered into the crowd, killing two people and injuring a dozen more, police said Saturday. Organisers tried to block off traffic while preparing the drag race late on Friday, but an allegedly drunk driver was unable to slow down in time and ran into a group of spectators as he swerved to avoid one of the cars that was to take part in the race. A 26-year-old man and an 18-year-old woman were killed. The driver, aged 51, was arrested and charged on two counts of intoxicated manslaughter. A police spokesman said the straight, flat stretch of road was often used illegally as a drag strip by Dallas youths. 6695 !GCAT !GPOL !GVIO More than 300 U.S. warplanes and 20 ships were available on Saturday in case President Bill Clinton ordered the use of U.S. force against Iraqi military action in northern Iraq, U.S. defense officials said. They said 200 fighter planes, including 79 on the aircraft carrier Carl Vinson, were already in the Gulf; the aircraft carrier Enterprise was in the eastern Mediterranean with 79 more, and an air expeditionary force with up to 40 more was ready to fly from the United States if ordered. "Yesterday the president ordered the Department of Defense to take prudent planning steps to have forces ready to deploy to the region should he direct us to do so," Pentagon spokesman Doug Kennett said. "We have taken those prudent planning steps." Clinton said on Saturday he had ordered U.S. forces in the Gulf to go on high alert and was reinforcing them in response to Iraqi attacks on Kurdish dissidents in northern Iraq. "These developments ... cause me grave concern," Clinton said at a campaign stop in Troy, Tennessee. But he added, "It is premature at this time, and I want to emphasize that, highly premature to speculate on any response we might have." The U.S. defense officials said military flights to enforce no-fly zones in both northern and southern Iraq doubled over the weekend. Clinton said Iraqi military forces overran the city of Arbil, which has been held since 1994 by Kurdish rebels who Baghdad says are backed by Iran. There were unconfirmed reports that Iran had sent troops into northern Iraq in response to Iraq's attack. U.S. plans rely heavily on U.S. air attacks on Iraqi forces, but there are also 23,000 U.S. troops in the region, according to defense officials. In addition to the 158 F/A-18, F-14 and other fighter planes on the aircraft carriers Vinson and Enterprise, the Air Force air expeditionary force of 30 to 40 F-15 and F-16 fighter planes and fuel tankers is ready to fly from three U.S. bases in the United States, they said. The expeditionary force would include nearly 1,000 Air Force personnel in ground and support crews, they said. The 23,000 U.S. military people already in the Gulf consist of 15,000 sailors and Marines, 6,000 U.S. servicemen based primarily in Saudi Arabia and 2,000 U.S. troops in the area for military exercises. Most of the Marines are on three ships in the Tarawa Amphibious Readiness Group. The Carl Vinson leads a battle group that includes seven other ships, and there are nine other U.S. ships in the Gulf for a total of 20. 6696 !C42 !CCAT !E41 !ECAT !GCAT !GENT !GJOB Nude dancers at a San Francisco club have voted to become the only ones in the United States to belong to a union, union officials said on Saturday. Employees of the Lusty Lady club in San Francisco's North Beach district voted 57-15 to unionize in a National Labour Relations Board election held on Thursday and Friday, a spokeswoman for Local 790 of the Service Employees International Union said. No other exotic dancers in the nation are known to belong to a union. Strippers at a San Diego club set up an open union shop several years ago, but the club is no longer unionized, union officials said. Club managers, who are reported to oppose the union drive, could not be reached for comment on Saturday. Customers enter booths at the club and pay to watch scantily clad dancers on a stage. The dancers have demands on various issues, including job security, working conditions, sick leave and health insurance. "We're workers. Our work is to be a sex object, but that doesn't mean that we shouldn't be guaranteed certain basic protections and rights," a dancer at the club, identified only as Jane, told San Francisco's KCBS radio this week. The push for union representation at the club gained pace when some of the women objected that some booths had one-way windows that they said allowed customers to videotape them dancing. "The workers approached us. We had discussions with them. They formed their own committee. We supported them by filing a petition with the labour board," Jim Philliou, organising director with Local 790, said earlier this week. 6697 !GCAT !GVIO Mexican President Ernesto Zedillo vowed in an interview published on Saturday that he would never negotiate with the rebels who staged lightning attacks in southern Mexico this week that left 14 people dead. Zedillo, interviewed by the Los Angeles Times in his presidential residence, said he expected key arrests in coming days as the Mexican army and federal agents systematically "dismantle" the so-called Popular Revolutionary Army of the leftist rebels, known by the Spanish acronym EPR. "No way. No way," he said when asked about negotiations. "They have acted criminally, with extreme violence, and their social platform is incoherent and absurd," Zedillo said. Rebels of the leftist Popular Revolutionary Army (EPR) stunned Mexicans on Aug. 28 by launching coordinated attacks in at least three states -- Oaxaca, Guerrero and the State of Mexico -- killing 14 people and wounding 20. Calling the rebels "terrorists and criminals," he drew a clear distinction between that movement and the Zapatista National Liberation Army in Chiapas. "Even though the Zapatistas began with violence, they soon took the decision to stop it. Also (the Zapatistas) are a movement with a social base," which the EPR lacks. Zedillo stressed that the army and federal police were under strict orders not to use strong-arm arrest or interrogation tactics as they stepped up their two-month search for EPR members in southern Mexico. "There are still some open wounds in our country from the way some guerrilla groups were dealt with in the '70s," Zedillo said. He acknowledged that "there were serious violations of human rights" at that time. 6698 !GCAT !GPOL !GVOTE Nearly a quarter of U.S. voters surveyed said they were less likely to vote for President Bill Clinton following the resignation of his top campaign advisor Dick Morris, a poll released on Saturday said. Morris quit the campaign on Wednesday after a sensationalist supermarket tabloid reported he had a year-long affair with a prostitute and had confided White House secrets to her. The latest Newsweek poll conducted on Aug. 29 found 24 percent of 401 respondents "less likely" to vote for Clinton because of the Morris resignation. However, among those who described themselves as Clinton supporters, just 6 percent said the resignation made them less likely to vote for the president in his bid for re-election this November. Among all voters, 27 percent said the resignation made them doubt Clinton or the Democratic Party's commitment to family values. The margin of error on these questions was 5 percent. Also on Saturday, the Washington Post reported that Clinton-Gore campaign will examine thousands of dollars of expense account payments to Morris to ensure the campaign did not pay any expenses related to his alleged affair with the prostitute. In a wider Newsweek sample of 862 registered voters taken Aug. 28-29, 54 percent said they would vote for Clinton if the election were held today, compared to 33 percent fo Republican nominee Bob Dole and 5 percent for Texan billionaire Ross Perot. That question had a 4 percent margin of error. A week prior, just before the Democratic convention, 47 percent supported Clinton, 40 percent supported Dole, and 7 percent favoured Perot. 6699 !GCAT !GENV When employees of southwestern Alaska's Togiak National Wildlife Refuge saw about 225 walruses waddle up a hill next to their normal beach, they rushed to protect the bulky animals. Cape Peirce staffers herded 155 of them back from the edge of a 200-foot cliff, U.S. Fish and Wildlife Service officials said on Friday. But 70 remained near the precipice, and by the end of the day, most had toppled over. Up to 60 died, and others were seriously injured. Three days later, federal biologists still do not know why. "The only theory we're kicking around right now is the beach has changed," refuge manager Aaron Archibeque said. He cited a large sand dune that had been eroded by wind. Its absence allowed the walruses, which can weigh up to two tons each, to wander farther back from the beach than before, he said. Ruled out are any notions of emotional distress. "It's not a suicide. They're not doing it on purpose," Archibeque said. Walrus death plunges have occurred twice before at the same location. Seventeen fatalities were recorded in October 1995 and 42 in September 1994, officials said. But biologists believe those incidents were connected to fierce winds and stormy weather. This week's carnage occurred during warm, clear, calm weather, Archibeque said. Nothing similar has been known to take place anywhere else, he said. Cape Peirce is the biggest walrus haulout, or resting place, on mainland North America, accommodating up to 12,500 animals at a time. The day after the accident, about 500 walruses were on the beach, Archibeque said. All were males, as were all those that fell off the cliff. Bulls and cows mingle only during mating season in January and February, according to the Alaska Department of Fish and Game. This week's deaths are not considered to pose a biological threat to the walrus population, Archibeque said. He said the carcasses would be allowed to wash out to sea after the tusks had been cut off and given to local Yupik Eskimos, who hunt the animals for meat and ivory. 6700 !C13 !CCAT !GCAT !GHEA The U.S. Food and Drug Administration Friday issued a nationwide alert, warning that injections of an unapproved drug derived from the adrenal glands of cattle and other livestock can lead to serious bacterial infections or abscesses. The agency said the alert concerned 30 millilitre vials of the injectable "adrenal cortex extract", distributed by Phyne Pharmaceuticals of Scottsdale, Ariz., and labeled Hallmark Labs. Since April 1996, the FDA, the U.S. Centres for Disease Control, and state agencies had received 54 reports of infections forming at sites where patients had been injected with the product. Adrenal cortex extract is not approved for use by the FDA for any medical condition. "Although it has never been shown to be effective for treating any medical condition, it has been promoted over the years for a wide variety of uses including weight loss, burn treatment and lessening substance abuse addictions," the FDA said in a statement. FDA said it was working with other government agencies to investigate how the product was manufactured and distributed. It was taking regulatory steps to identify the parties responsible for any contamination and to ensure that the products were removed from the market. Patients experiencing swelling, tenderness, other other signs of infection at the site of the injection or other adverse reactions should contact their physician immediately. 6701 !GCAT !GPOL !GVOTE President Bill Clinton says he does not plan to seek political advice from his former top campaign strategist, Dick Morris, who abruptly resigned amid explosive charges of confiding White House secrets to a Washington prostitute. "I don't plan to do that, no," Clinton said on Friday as he and Vice President Al Gore teamed up on a four-state bus tour through the American heartland designed to give them momentum coming out of the Democratic National Convention and cement their support in a region they carried in 1992. Having visited Missouri, Illinois and Kentucky on Friday, Clinton and Gore and their wives Hillary and Tipper rumble into Tennessee Saturday for rallies in Dyersburg and Memphis. Morris' resignation, announced on Thursday, sent shock waves through the Chicago convention on the day Clinton accepted his party's nomination for a second term. The White House was doing its best to put the controversy swirling around the 48-year-old strategist behind Clinton as quickly as possible. Clinton refused to answer shouted questions as he shook hands and spoke to large crowds along his bus route Friday from Cape Girardeau, Mo., to Paducah. The president gave his first comments about Morris during an MTV interview taped aboard the music station's "Choose or Lose" bus as the bus caravan tooled slowly down country roads. The White House released a transcript of the interview. In it, Clinton said he was not worried about Morris' absence going into the last two months of his re-election campaign "because we have a good team... I'm going to keep the team I've got and I'm going to keep the decision-making process in place." Clinton, who has relied on Morris off and on for years, insisted he would hold out the right to talk to Morris. "I don't say I won't communicate with him." He said he and his wife Hillary and Vice President Al Gore all called him Friday and "just had a purely personal conversation." Suggesting Morris would not be badly missed, he said that "this campaign is now the product of the record we have made and the proposals we have out there." A supermarket weekly, The Star, reported in a story picked up by the New York Post Thursday that the married Morris had a year-long affair with a prostitute named Sherry Rowlands and confided in her some White House secrets, such as the discovery of possible life on Mars. Some people interviewed along the bus route were not dwelling on the controversy. "It means nothing to me," said Clinton supporter Abie Choate of LaCenter, Ky. "I'm for high morals but I don't think President Clinton had anything to do with what that man did." Undecided voter George Brooks of Cairo, Ill., said of the Morris flap, "No, that wouldn't bother my vote. We all make mistakes." Voice raspy after his 66-minute convention speech, Clinton kept his speeches to the point and repeated a mantra to all along the bus route that he wants to be a "bridge to the future." He and Gore are using against Republican Bob Dole his argument that at age 73, he can help be a "bridge to the past" and help bring back an era of good moral virtues. Reunited in a replay of their energetic 1992 bus tours, Clinton and Gore were performing what the White House likes to call "retail politics," which basically means press as much flesh as possible. And they got just what they wanted. Local television stations gave breathless accounts and live coverage to the bus tour's slow progress through the region. They drew large crowds, from economically depressed Cairo (pronounced KAY-roe), to a crowd of about 17,000 at Paducah's Harbour Plaza on the bank of the Ohio River. "I want you tonight, for the next four years, to help me build that bridge to the 21st century," Clinton told the Paducah crowd. "Will you do it?" 6702 !GCAT !GCRIM !GPOL California's legislature passed a controversial bill on Friday that would make the state the first in the United States to require repeat child molesters to undergo "chemical castration." The state Assembly voted 51-8 for the bill, which had already easily passed the state Senate. It now goes to California Gov. Pete Wilson, a Republican, who has said he will sign it. The bill's author, Republican Assemblyman Bill Hoge of Pasadena, expressed delight over the passage of the bill, which he said had received significant bipartisan support. "Child molestations are going to go down, and they are going to go down dramatically, because of this legislation," he said after the vote. Hoge predicted California would set a trend and other states would soon adopt similar legislation. He said Californians were outraged by the "horrible, heinous crime" of child molestation and wanted something done about it. Wilson's spokesman, Sean Walsh, said the governor would sign the bill. "If it helps save one child, it's worth the effort," he said. Under the legislation, an offender convicted twice of molesting a child would, after his release, receive regular injections of a drug to reduce his sex drive unless he agreed to surgical castration. Courts would have the discretion to order first-time offenders to undergo the treatment in particularly bad cases. The bill is the latest tough anti-crime measure adopted by California. Two years ago the state passed a "three strikes, you're out" law mandating long sentences for career criminals. The "chemical castration" measure has drawn opposition from civil rights advocates, who say it raises serious constitutional questions about the right to privacy and the right to procreate, and from some medical experts, who question whether the treatment will be effective in all cases. "We all want to protect our kids, but this bill isn't the way to do it," Valerie Small Navarro, a Sacramento lobbyist for the American Civil Liberties Union (ACLU), said. "It gives the public a false sense of having solved a terrible problem." Hoge said the drug treatment had been used in some European countries and was effective in reducing the high repeat rate of child molesters. The term "chemical castration" is not strictly accurate, since the drug stops working after the patient stops taking it. Hoge had said offenders would be treated only while on parole, which lasts three years in child molestation cases. 6703 !GCAT !GCRIM !GPOL !GVOTE The Clinton-Gore campaign will examine thousands of dollars of expense account payments to former political strategist Dick Morris to ensure the campaign didn't pay any expenses related to his alleged affair with a prostitute, the Washington Post reported Saturday. The paper quoted campaign general counsel Lyn Utrecht as saying she didn't think the review would find anything amiss because the campaign has strict rules on what it will reimburse. Morris resigned from the campaign early Thursday after a supermarket tabloid said he had a year-long affair with a prostitute and had confided White House secrets to her. Campaign records show the Clinton-Gore '96 Primary Committee Inc. paid Morris a total of $231,048 in consulting fees and expenses from April 1995 through this July, of which nearly $27,000 was listed as hotel or travel expenses, the Post reported. 6704 !GCAT The Washington Post carried the following items on the front page of its business section on Aug 31: --- WASHINGTON - Senior Federal Reserve say they still aren't sure whether the Fed will need to raise short-term interest rates this fall. --- WASHINGTON - Twenty-year old golfer Tiger Woods has already signed $60 million worth of contracts since turning pro earlier this week. --- WASHINGTON - Analysts were critical of NationsBank Corp.'s announcement that it plans to merge with Boatmen's Bancshares Inc., sending the company's share price tumbling by $2.17 billion in Friday trading. 6705 !GCAT !GCRIM !GPOL California's Senate Friday rejected a last-ditch Republican attempt to put the teeth back into a state law cracking down on career criminals. Republican lawmakers back a measure to repair some of the damage they believe was done to the state's tough "three strikes and you're out" law by a state Supreme Court ruling in June. The measure passed last month in the Republican-controlled state Assembly but failed in committee in the Democratic-dominated state Senate. As the state legislature dealt with a barrage of bills on the next-to-last day of the legislative session, Republicans tried to amend their "three strikes restoration" measure into a Democratic bill in a bid to get a vote on the Senate floor. But senators voted 21-16 to shelve the amendment, effectively killing it for this year. The three strikes law, passed by the state legislature and approved by California voters in 1994, imposes a minimum sentence of 25 years to life when people with two prior convictions are found guilty of a third felony. Some lawmakers credit three strikes with reducing California's crime rate but critics cite cases in which people convicted of a relatively minor third offence, such as petty theft, were given life prison terms. The state Supreme Court ruled in June that judges have discretion to disregard prior "strikes" and to hand down shorter sentences if they believe it serves the interests of justice. The Republican measure, authored by Senate Republican leader Rob Hurtt, would have disallowed a judge's discretion in cases where the third crime was for a serious or violent felony or if any of the prior convictions were for a violent felony. It would also have disallowed judicial discretion if an offender's latest felony occurred less than five years after his release or conviction for a prior serious felony. Democratic opponents said the Republican measure was flawed and that more careful consideration was needed. 6706 !GCAT !GDIS !GENV A hurricane watch was posted on Friday for beach resorts along the mid-Atlantic and forecasters warned that powerful Hurricane Edouard posed a threat to coastal regions from North Carolina to New England. At 11 p.m. EDT (0300 GMT), Edouard's center was about 475 miles (765 km) south-southeast of Cape Hatteras, North Carolina, near latitude 30.0 north, longitude 75.5 west, and moving north-northwest at 14 mph (23 kph), the National Hurricane Center said. The storm was expected to continue that motion into Saturday. Forecasters posted a hurricane watch and tropical storm warning from Cape Lookout, North Carolina, north to Cape Henlopen, Delaware, including the Pamlico and Albemarle Sounds, and said watches and warnings might be extended farther north during the U.S. Labor Day holiday weekend. "On this track, the center of Edouard will be gradually approaching the mid-Atlantic coast," the center said. A hurricane watch indicates that storm conditions are expected within 36 hours, while a warning means conditions are due within 24 hours or less. "If Edouard was to turn to the northwest again sometime tomorrow, then the Carolinas would feel the effects," said Michelle Huber, a meteorologist at the National Hurricane Center. "Further on, then you are talking about New England." Edouard's maximum sustained winds were near 130 mph (209 kph), making Edouard the most powerful storm of the season, a strong Category Three hurricane capable of severely damaging structures. Little significant change in strength was expected Friday night. Hurricane force winds extended outward up to 145 miles (230 km) from the center and tropical storm force winds extended outward up to 200 miles (325 km). The U.S. coast was already feeling Edouard's effects, as forecasters warned swimmers of high seas and said gale force winds could arrive as early as Saturday night. Riptides and high waves were reported, and swells were expected to rise even higher as the storm traveled up the coast. In coastal areas of North Carolina battered by Hurricane Bertha in mid-July, officials were preparing in case Edouard turned toward them. Emergency workers said an evacuation of the Outer Banks was a strong possibility on Saturday. "We're just keeping a wary eye," said Peter Stone of the emergency management department on Ocracoke Island, which has about 800 residents. "They don't know. We don't know." The weather on Friday was partly cloudy, with a light breeze and heavy surf, and "no swimming" signs were posted at some beaches. Residents noted nervously that Saturday would mark three years to the day since Hurricane Emily came ashore, causing severe damage. The National Parks Service announced that its campgrounds along the Outer Banks would close at mid-day on Saturday, and officials said tourism was off. "The number of people down here is way, way down," said Tommy Gray, coordinator for the Hatteras Island Emergency Operations Center. Forecasters also were watching Tropical Storms Fran and Gustav, which were far from land as they traveled across the Atlantic. Fran was downgraded to a tropical storm on Friday afternoon after its winds dropped to 65 mph (105 kmh). Fran was about 1,280 miles (2,060 km) east-southeast of Miami, at latitude 20.8 north and longitude 61.2 west. The storm's movement had slowed to just 8 mph (13 kph) northwest. It was not expected to draw close enough to Edouard to be drawn into the more powerful storm's path. Tropical Storm Gustav appeared to be breaking up as it moved away from Africa's coast. At 11 p.m. EDT (0300 GMT), its center was near latitude 17.7 north and longitude 41.3 west, or about 1,040 miles (1,670 km) west of the Cape Verde Islands, and moving northwest near 9 mph (15 kph). Maximum sustained winds were near 40 mph (65 kph), and Gustav was expected to weaken further over the next 24 hours. 6707 !C31 !CCAT !GCAT !GVIO A presidential commission on aviation security is considering plans that would require U.S. airlines to scrutinise all passengers at U.S. airports using massive computer files, the Washington Post reported on Saturday. If the plan is enacted, the federal government would require creation of a computer profiling system that would examine passengers' bill-paying records, flying habits and other data to identify potential terrorists and other suspicious individuals, the paper said. The Post quoted senior officials involved in the deliberations as saying a plan combining computerized profiling and sophisticated explosives detection equipment was the chief option being presented by federal agencies and the White House staff. However numerous legal issues still need to be resolved, including the issue of whether airlines would be given access to information from government computer systems like those containing criminal records. The commission was created by President Bill Clinton after the suspicious July 17 explosion of Trans World Airlines flight 800, which killed 230 people. 6708 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Unionized workers at the former BP Refinery in Marcus Hook, Pennsylvania, voted to accept an offer from new owner Tosco Refining Co., officials of the Oil, Chemical and Atomic Workers said Friday night. Philadelphia media quoted workers as saying they voted reluctantly for a deal that would cost 100 union jobs. They were accepting an agreement similar to one they rejected in February, when Tosco bought the refinery and BP's East Coast retail operations. The refinery was closed when the union rejected Tosco's offer. Company officials say they plan to reopen the 172,000-barrel-a-day facility in mid-1997, but with a payroll of 216 union jobs instead of more than 320. The jobs would pay more than $20 an hour to members of the union's Local 8-234. 6709 !CCAT !GCAT !GDIS A bus struck and ruptured a natural gas line near Washington's National Airport on Friday, forcing the evacuation of hundreds of people and wreaking havoc on air traffic along the U.S. eastern seaboard. Airport and gas company officials said the main terminal at the city's airport was evacuated around 8:30 p.m. EDT (0030 GMT Saturday) after an airport shuttle bus hit a one-inch (2.5 cm) exposed natural gas pipeline in a traffic tunnel near the airport. The ruptured line began spewing gas and the fumes could be detected several hundred feet away, a reporter for local FOX Television affiliate WTTG-TV said, adding that at least one woman was taken to a local hospital. Washington Gas workers capped the leak and turned the gas off around 10 p.m. (0200 GMT), said spokeswoman Lynn Scruggs. "The situation has been made safe. We'll be making repairs," she said. Airport spokeswoman Tara Hamilton told WRC-TV the evacuation had affected the main terminal, including the air traffic control tower, but operations had resumed around 11 p.m. EDT (0300 GMT). She also said several flights had been diverted to Dulles International Airport, another airport in the Washington area. Dozens of passengers evacuated hastily after the accident were still waiting to claim their luggage, nearly two hours after arriving at the airport. The Friday night incident interrupted or delayed holiday plans for many of the passengers. The Labour Day holiday on Monday is considered the last holiday weekend of the summer. "Some of the fire people just came out and were waving, come out, there's a gas leak. They just forced us out and now we're waiting for our luggage," one man told WTTG-TV. The evacuation also stranded the people aboard at least one United Airlines flight that had already landed at the airport as well as delaying the arrival of many other flights. No information was immediately available about the exact number of flights affected by the evacuation. Federal Aviation Administration officials referred all queries to the airport, where phones went largely unanswered. Dave Schultz, pilot of United Airlines Flight 634, landed his plane at the airport around 8:40 p.m.(0040 GMT Saturday), but told passengers they would have to remain on board because he could not reach anyone at the airport to bring the necessary equipment out to allow passengers to disembark. He told passengers at least one other plane, an Air Canada flight, was circling Baltimore after trying to land at the Washington airport. "We're making the best out of what is obviously a very bad situation," Schultz told Reuters. Passengers on the flight, many of whom were returning from this week's Democratic National Convention in Chicago, were eventually taken by bus to another terminal and told to get their luggage on Saturday. 6710 !GCAT The Washington Post carried the following stories on its front page on August 31: --- MOSCOW - Russian national security chief Alexander Lebed reached agreement with Chechen rebels to postpone their demand for independence for five years. --- CAPE GIRARDEAU, Missouri - President Clinton embarked on a back-roads tour intended to recapture the populist flavor of his successful 1992 campaign. --- RIVERSIDE, California - President Clinton swayed many voters with his speech at the Democratic National Convention, which included promises for an education tax credit and a zero deficit. --- WASHINGTON - A presidential commission on aviation security is considering a bomb detection plan that would require U.S. airlines to scrutinise all passengers using massive computer files. --- WASHINGTON - A federal appeals court panel ruled that a U.S. district court judge should not have used her authority to tell the D.C. prison system how to treat female inmates. --- WASHINGTON - Nine months after the winter blizzard of 1996, area hospitals, doctors and midwives are gearing up for what they say could be the busiest baby season in years. 6711 !GCAT !GCRIM !GVIO Two foreign forensic scientists believe crime lab reports that prosecutors may use as evidence in the Oklahoma City bombing trial are seriously inadequate, attorneys for defendant Timothy McVeigh told the trial judge on Friday. The attorneys also asked U.S. District Judge Richard Matsch to order prosecutors to turn over statements by prosecution witnesses five months before the trial and revealed that prosecutors may call more than 400 witnesses. Matsch is expected to set a trial date after he hears arguments next month from attorneys for McVeigh and co-defendant Terry Nichols on why they should have separate trials. The former Army buddies, now at odds, are accused of the April 19, 1995, bombing of the Alfred P. Murrah Federal Building that claimed 168 lives. Their attorneys have said McVeigh's and Nichols' defences will be mutally antagonistic. The positions stated on Friday by McVeigh's attorneys were in documents they filed as part of their trial preparation. The claims by the scientists, retained as experts by the attorneys, were part of a defence request that Matsch order prosecutors to turn over detailed information about the Federal Bureau of Investigation lab's examination of forensic evidence. The attorneys are using the scientists' claims to buttress an allegation by a lab supervisor that the bombing case and others "have been seriously compromised" by sloppy lab work and fabrications. "If these (FBI lab) reports are the ones to be presented to the court as evidence, then I am appalled by their structure and the information content," wrote Brian Caddy, forensic science professor at the University of Strathclyde in Glasgow, Scotland. John Lloyd, identified by the attorneys as a British Home Office prosecution witness for many years, is the other scientist who challenged the reliability of the lab work. Prosecutors should be required to turn over the "underlying data, methodologies and protocols" used in the examinations of scores of materials from the bombing scene, the attorneys said. The attorneys said they also would challenge the qualifications of 38 expert witnesses expected to testify for the prosecution. There has been no official estimate of the trial's length, but it is sure to take months. In another document, McVeigh's lawyers stepped up their claim that McVeigh likely was misidentified as the bombing perpetrator. They asked the judge to order prosecutors to turn over a long list of information about how a FBI composite drawing of McVeigh was made and how FBI identification "lineups" were conducted. 6712 !C13 !CCAT !GCAT !GDIS California's Senate Friday approved landmark legislation to create a $10.5 billion agency to sell earthquake insurance to homeowners, sending it to the Governor for his signature. After months of lobbying in the state Legislature, the two final and most important California Earthquake Authority (CEA) bills passed in the Senate by votes of 28-to-5 and 28-to-6. The state Assembly had already approved the measures. A spokesman for Gov. Pete Wilson said the Republican governor would sign the bills. The authority will be a privately financed, publicly managed state agency that will provide insurance coverage for earthquake damage to residential property owners, mobile homeowners and renters in the state. "More than anything, we have brought stability to the homeowners market," said state Senator Charles Calderon, a Democrat and a key backer of the CEA legislation. "It brings certainty for the insurance companies and it brings certainty to the homeowners." The earthquake authority was proposed as part of a plan to help solve the state's homeowners insurance crisis. Because state law requires insurers to offer earthquake coverage with every homeowners policy, many insurance companies stopped selling new homeowners policies and some considered dropping their existing customers to reduce their exposure to earthquake losses in California. "Now that the CEA has passed its toughest test, I strongly urge insurers to begin selling homeowners insurance without delay," state Insurance Commissioner Chuck Quackenbush said. The $10.5 billion CEA will be funded with premiums paid by those who purchase earthquake coverage, cash from participating insurance companies, reinsurance, as well as capital market investors. The legislation requires the participation of insurance companies representing at least 70 percent of the homeowners insurance market. "Much of the groundwork has already been done, and barring unforeseen complications, I am confident that the CEA will be up and running by Dec. 1," Quackenbush said. 6713 !CCAT !GCAT !GDIS Washington's National Airport was evacuated due to a suspected gas leak on Friday, stranding hundreds of passengers aboard flights returning from the Democratic National Convention in Chicago, airport officials said. The pilot of a United Airlines flight from Chicago landed at the airport, but told passengers they would have to remain on board because he could not reach anyone at the airport to bring the necessary equipment out to allow passengers to disembark. He told passengers at least one other plane, an Air Canada flight, was circling Baltimore after trying to land at the Washington airport. Airport officials said the evacuation was ordered late on Friday, sometime after 8 p.m. EDT, but were unable to give any additional details. 6714 !GCAT !GCRIM A long custody battle fought over a 6-year-old Albuquerque boy has been resolved with his adoptive parents and birth father agreeing to raise him jointly, officials said Friday. New Mexico District Judge John Brennan decided this week that the natural father, who never gave up his parental rights, and the adoptive parents were entitled to equal access to the boy. "This landmark decision allows all adults to have a relationship with the child, albeit on a reduced basis," Brennan said. "He needs all of them in his life." The child currently spends most of his time with his adoptive parents, Kyle and Karla Roth, but arrangements are being made so he will spend half of the time with them and the other half with his natural father, John Bookert. The Roths and Bookert will share in medical and educational decisions for the boy and agreed to resolve any conflicts that arise, turning to counsellors if necessary. "It's truly the adults putting their desires and wants second to the child's needs," said Michael Hart, an attorney for the Roths. Bookert was separated from the boy's birth mother when she gave him up for adoption at nine months old. When an adoption agency called Bookert to see if he would give up his parental rights, he refused to do so and said he wanted full custody. But the agency gave the boy to the Roth family anyway, and Bookert began his legal battle to gain custody in 1991. The adoption agency was put on a one-year probation for its handling of the adoption and the boy's natural mother was given no visitation rights under the settlement. In other similar custody cases surrounding adopted children, the courts have traditionally given custody to one or the other set of parents. 6715 !CCAT !GCAT !GDIS Two Russian rescue workers taking part in a salvage operation following the crash of a Russian passenger plane on the island of Spitzbergen were taken in for questioning on Saturday, Norwegian officials said. Ann-Kristin Olsen, governor of the Norwegian Arctic territory, said two members of the Russian specialist rescue team had illegally entered a secure area at the top of the mountain where the Russian airliner crashed on Thursday killing all 141 people on board. "I see this as a clear breach of trust and lacking in respect for the unyielding insistence on the Norwegian side that this accident occurred on Norwegian soil. It must be investigated under Norwegian leadership," Olsen told a news conference. The incident followed Russian criticism earlier in the day for delays in recovering bodies from the wreck as howling winds and tough terrain hampered rescue services. On the other side, Norwegian officials complained that the Russian team of 11 mountaineering experts and other officials had tried to take over the recovery operation, a sensitive issue on Norwegian territory. The icy blast of mistrust in the air was a reminder of Cold War days when the Norwegians and Russians on Spitzbergen found themselves on different sides. Norway, which governs the island, is a member of NATO. Olsen said the Russian team had set up a base camp below the steep face of the crash site at about 5 p.m. local time (1500 GMT). Less than four hours later three Russians were sighted on the mountain plateau where they were not permitted without Norwegian escort, she said. "Two people have been brought down to the governor's office for questioning, a third person is being searched for. I ordered the base camp to be dismantled," Olsen said. "This makes cooperation with the Russians difficult." She said information on the incident had been passed to the Russians, who said they would investigate why the men were found off limits. Twenty frozen and shattered bodies were brought down from the crash site by helicopter on Saturday to the town of Longyear despite strong winds in the area. The bodies were due to be flown to the northern Norwegian town of Tromsoe, 500 miles (800 km) to the south, for formal identification and autopsy. Norwegian Justice Minister Grete Faremo visited the island's Russian mining community of Barentsburg to offer condolences, but ran into a barrage of criticism from local people distraught at losing relatives in the crash. Pavel Serikov, head of the Russian mine's rescue service, lost his daughter, son-in-law and one grandchild in the crash. He said Russians should be more involved in the operation. "We demand to take part...We want our dead back," he told the Norwegian minister. Faremo said she felt the recovery operation had gone well given the bad weather. "I know emotions are running high and it's almost impossible to meet all expectations," she told reporters. The dead were Russian and Ukrainian miners, some with their families, who were on their way to work in the coal mines on the island. Fewer than 3,000 people live on Spitzbergen, which has one of the world's harshest climates. Officials said it could take weeks to bring all the bodies down from the mountain to Longyear, the island's main town just a few miles from the crash site. Accident investigators recovered a flight recorder buried in the snow near the Tupolev Tu-154's tail section on Friday. It will be taken to Moscow for examination and could provide the explanation for the worst air disaster in Norway's history. Officials said it was either the flight data recorder, containing vital information about the height and speed of the plane when it crashed, or a second device used to record the pilots' voices and communications. 6716 !GCAT !GCRIM Two Belgian teenage girls missing since Thursday have been found unharmed, police said on Saturday. "The girls, Rachel and Severine, have been found. They are unharmed," a police official in Liege said. He declined to say whether the girls had been kidnapped or whether they had gone away of their own accord. Late on Friday, the two girls -- Rachel Legeard, 18, and Severine Potty, 19 -- were reported missing after failing to return home from a shopping trip to the eastern town of Liege on Thursday. Earlier, police declined to comment on whether it suspected a link with the Marc Dutroux case, the paedophile kidnap, sex abuse and murder scandal which has rocked Belgium in the past two weeks. 6717 !CCAT !GCAT !GDIS Distraught Russians criticised Norway on Saturday for delays in recovering bodies from a Russian airliner that crashed on an Arctic mountain, as the first dead were flown out amid howling winds. Bad weather and tough terrain on the Arctic island of Spitzbergen hampered the efforts of rescue teams to recover the frozen and shattered bodies of the 141 people killed when the plane crashed while coming in to land on Thursday. But Finn Bjoernar Hansen, a spokesman for the island's governor, said helicopters had brought 20 bodies from the crash site to the town of Longyear despite strong winds in the area. The bodies would be flown later on Saturday to the northern Norwegian town of Tromsoe, 500 miles (800 km) to the south, for formal identification and autopsy. Norwegian Justice Minister Grete Faremo visited the island's Russian mining community of Barentsburg to offer condolences, but ran into a barrage of criticism from local people distraught at losing relatives in the crash. People gathered in the street to tell her they were uhappy with information provided about the disaster. They wanted the bodies brought to Barentsburg, not flown to mainland Norway, and complained about the time taken to recover the dead. Pavel Serikov, head of the Russian mine's rescue service, lost his daughter, son-in-law and one grandchild in the crash. He said Russians should be more involved in the operation. "We demand to take part...We want our dead back," he told the Norwegian minister. Faremo said she felt the recovery operation had gone well given the bad weather. "I know emotions are running high and it's almost impossible to meet all expectations," she told reporters. Nevertheless, there was an icy blast of mistrust in the air, reminiscent of Cold War days when the Norwegians and Russians on Spitzbergen found themselves on different sides. Norway, which governs the island, is a member of NATO. Norwegian officials complained that a Russian team of 11 mountaineering experts and other officials had tried to take over the whole recovery operation, a sensitive issue on Norwegian territory. Russian officials initially objected to the plan to fly the dead to northern Norway for identification. The dead were Russian and Ukrainian miners, some with their families, who were on their way to work in the coal mines on the island. Fewer than 3,000 people live on Spitzbergen, which has one of the world's harshest climates. Officials said it could weeks to bring all the bodies down from the mountain to Longyear, the island's main town just a few miles from the crash site. The task was complicated by strong winds, sudden weather changes and a danger of avalanches. Accident investigators recovered a flight recorder buried in the snow near the Tupolev Tu-154's tail section on Friday. It will be taken to Moscow for examination and could provide the explanation for the worst air disaster in Norway's history. Officials said it was either the flight data recorder, containing vital information about the height and speed of the plane when it crashed, or a second device used to record the pilots' voices and communications. Western aviation experts have raised questions about the safety of Russian airline operations following the breakup of the Soviet Union in 1991. But the pilot was experienced and did not report any trouble before the crash. 6718 !GCAT !GVIO A bomb damaged a tax office in Corsica on Saturday as four suspected separatist guerrillas were due to appear before a judge in Paris. The latest in a spate of bombings occurred at about three a.m. (0100 GMT). It caused serious damage to the office in Aleria near Bastia in the north of the French Mediterranean island. No-one was hurt and there were no immediate claims of responsibility. More than 20 bombs have exploided since mid-August, chiefly hitting public buildings and blamed by police on separatists. Seven suspects detained in a series of police raids on Thursday and Friday were still being held in custody. Judicial sources said four would be brought before an anti-terrorism judge in Paris at the weekend while the rest were being held in Corsica. Praising the police round-up, Prime Minister Alain Juppe said on Friday: "Several of the main culprits behind bomb attacks committed since August 14 in Corsica, notably in the Ajaccio region, have been identified." He pledged to stick to a hard line against guerrillas and rejected criticism that Paris had previously gone easy on guerrillas in hopes of secretly negotiating an end to their 20-year campaign for more autonomy. Police have searched the homes of those detained and seized arms, ammunition, masks and detonator fuses. The detentions marked the first concrete action by police on Corsica since August 14, when nationalist militants called off a shaky seven-month truce. 6719 !GCAT !GVIO A bomb explosion in a restaurant west of Algiers on Friday killed seven people, an Algerian newspaper said on Saturday. Algerian security forces said in a statement that two people were killed and six were wounded when a home-made bomb ripped through a restaurant in the coastal town of Staoueli. But Le Matin newspaper, quoting witnesses, said the bomb killed seven people and wounded 20. Liberte newspaper said the bomb was hidden in a bag in front of the restaurant and that a booby-trapped car was defused near the restaurant shortly before the bomb went off. A week ago a home-made bomb exploded in a market in the western coastal town of Bou Haroun, 65 km (40 miles) from Algiers. Newspapers said it killed two women and five children. Algerian newspapers quoted the Human Rights National Observatory (ONDH), a government-appointed watchdog, as saying earlier in August that about 1,400 civilians had been killed in bomb attacks blamed on Moslem guerrillas in the past two years. An estimated 50,000 people have died in Algeria's violence pitting Moslem rebels against government forces since early 1992 when the authorities cancelled a general election in which radical Islamists had taken a commanding lead. 6720 !E12 !ECAT !G15 !G154 !GCAT Italian separatist leader Umberto Bossi wrote to the European Commission on Saturday asking what provisions had been made allowing the northern state he wants to create to join Economic and Monetary Union on its own. "Italy can't enter a single currency, causing dramatic consequences for Padanaia and the subsequent rupture of the country," Bossi said in the written request issued by his party's news agency. "Padania" is the name he uses for the area of northern Italy he wants to turn into an independent republic. Bossi said Italy currently had two entirely different economies. Northern Italy, he said, was close to the great international powers while southern Italy, known as the Mezzogiorno, was more like a developing country. "The introduction of two different currencies for the two different production systems, and consequenlty independence for Padania, is therefore inevitable," Bossi said. The European Union plans to launch the "Euro" in 1999 as the currency of those states which have met tough economic targets. Renato Brunetta, an economist in former prime minister Silvio Berlusconi's Forza Italia party, said in a study that a hypothetical northern lira would be worth 500 to the mark, while a southern lira would be worth 2,000 at current exchange rates. The Italia lira is currently trading around 1,020 against the German unit. But commentators pointed out that could create an export disadvantage and said "Padania" was likely to shoulder a higher burden if Italy's debt mountain were split. They also forecast galloping unemployment and hyperinflation in the south. Bossi, who has set up a self-styled parliament of "Padania" with its own government, plans to declare independence in Venice on September 15 while supporters form a human chain along the River Po, which marks the boundaries of his would-be state. 6721 !GCAT !GCRIM !GDIP Sweden's Queen Silvia, who recently caused a storm by publicly critising Sweden's soft child pornography laws, on Saturday called for global action to rescue children from sex slavery. Closing the first World Congress Against Commercial Sexual Exploitation of Children, Queen Silvia urged all sectors of society to join forces on regional, national and international levels. "We owe this to the children that have been abused, tortured and even killed by sex offenders and to the children who are at risk of becoming victims," said the queen, patron of the conference. "This modern form of slavery has to be stopped." The five-day conference, overshadowed by a horrific child sex scandal unfolding in Belgium, focused on ways to deal with child prostitution, the sale of children for sexual purposes and child pornography. The queen, who attacked Swedish politicians in an uncharacteristic outburst last month for not yet criminalising the possession of child pornography, kept her comments global. "Much has been achieved during this congress but the most important work remains to be done," Queen Silvia told the conference that attracted 1,341 government and non-governmental representatives from some 130 countries. "We know as long as there is any child who is being sexually exploited, there is work to do." The United Nations Children's Fund (UNICEF) has estimated that every year another one million children worldwide are forced into the sex trade. The congress, organised by UNICEF, End Child Prostitution in Asian Tourism (ECPAT), the NGO Group on the Rights of the Child, and the Swedish government, has drawn up a declaration and agenda for action by the turn of the century. No decision has yet been made for a follow-up conference but organisers said several countries had already expressed willingness to host a similar event in a few years time. Child abuse is an issue that the German-born Queen Silvia, 52, who has three children herself, takes to heart. Last year she shocked a international women's meeting when she announced she had seen some child pornography, seized from the homes of Swedish paedophiles, and it had disgusted her. Sweden lags behind other countries with its child pornography laws although they are currently under review. Although Sweden has changed dramatically since the 1970s when it allowed the commercial production of child pornography, possession is still not considered a crime. Sweden protects possession of child pornography under a constitutional law designed to guarantee freedom of speech and to outlaw possession requires constitutional amendments. A survey by the University of Minnesta in the United States, presented at the conference, found that 127 countries out of 165 questioned legislated against child pornography. Of these 46 had specific laws prohibiting child pornography and 81 had a general law prohibiting all forms of pornography. But 26 countries, including South Africa, had no laws prohibiting any form of pornography. Twelve countries left sections of the survey blank. 6722 !GCAT !GODD !GREL Austria's first homosexual wedding took place on Saturday after days of controversy among Protestant clerics over whether to allow the service to go ahead. Around 100 people gathered in the Evangelical Church in Vienna's Simmering district to witness the service for the lesbian couple, the first homosexual wedding to be officially blessed by a religion in this staunchly Roman Catholic country. The two women, named only as Jutta and Irene, wore skirts and black jackets and both carried bouquets of white and yellow flowers. One is a Viennese woman, the other a German. The head of the Evangelical Church in Vienna Werner Horn objected to the service, arguing that it would attract a glare of publicity. But the local minister refused to back down. Homosexual rights campaigners hailed the service as a step forward in the fight for official recognition of homosexual partnerships in Austria. Reporters were allowed into the church but photographers and cameramen were refused entry. The couple later slipped out of a side entrance. One friend said one of the women was afraid of losing her job if her photograph appeared in the newspapers. Some onlookers waiting outside the church were upset that the couple refused to come out of the main entrance. "This is a scandal. The whole thing is being paid for by money coming from our congregation," one woman said. "If they felt they really had to get married, why don't they come out and show their faces," another said. Gay rights officials have called for the homosexual age of consent to be reduced from 18 to 14 in line with the age of consent for heterosexuals. While some members of Chancellor Franz Vranitzky's Social Democrats have supported changing the law, their coalition partners, the conservative, Christian Democratic People's Party has refused to consider the plea. 6723 !GCAT !GCRIM !GPRO Sweden's Queen Silvia, who recently caused a storm by publicly critising Sweden's soft child pornography laws, on Saturday called for global action to rescue children from sex slavery. Closing the first World Congress Against Commercial Sexual Exploitation of Children, Queen Silvia urged all sectors of society to join forces on regional, national and international levels. "We owe this to the children that have been abused, tortured and even killed by sex offenders and to the children who are at risk of becoming victims," said the queen, patron of the conference. "This modern form of slavery has to be stopped." The five-day conference, overshadowed by a horrific child sex scandal unfolding in Belgium, focused on ways to deal with child prostitution, the sale of children for sexual purposes and child pornography. The queen, who attacked Swedish politicians in an uncharacteristic outburst last month for not yet criminalising (corrects from decriminalising) the possession of child pornography, kept her comments global. "Much has been achieved during this congress but the most important work remains to be done," Queen Silvia told the conference that attracted 1,341 government and non-governmental representatives from some 130 countries. "We know as long as there is any child who is being sexually exploited, there is work to do." The United Nations Children's Fund (UNICEF) has estimated that every year another one million children worldwide are forced into the sex trade. The congress, organised by UNICEF, End Child Prostitution in Asian Tourism (ECPAT), the NGO Group on the Rights of the Child, and the Swedish government, has drawn up a declaration and agenda for action by the turn of the century. No decision has yet been made for a follow-up conference but organisers said several countries had already expressed willingness to host a similar event in a few years time. Child abuse is an issue that the German-born Queen Silvia, 52, who has three children herself, takes to heart. Last year she shocked a international women's meeting when she announced she had seen some child pornography, seized from the homes of Swedish paedophiles, and it had disgusted her. Sweden lags behind other countries with its child pornography laws although they are currently under review. Although Sweden has changed dramatically since the 1970s when it allowed the commercial production of child pornography, possession is still not considered a crime. Sweden protects possession of child pornography under a constitutional law designed to guarantee freedom of speech and to outlaw possession requires constitutional amendments. A survey by the University of Minnesta in the United States, presented at the conference, found that 127 countries out of 165 questioned legislated against child pornography. Of these 46 had specific laws prohibiting child pornography and 81 had a general law prohibiting all forms of pornography. But 26 countries, including South Africa, had no laws prohibiting any form of pornography. Twelve countries left sections of the survey blank. 6724 !GCAT !GPOL Palestinian President Yasser Arafat was quoted on Saturday as saying Israel was leading an attack on peace by expanding settlements on the West bank but predicted a Palestinian state would soon be a reality. "You can't roll an avalanche back up the mountain," he said. "The independent state of Palestine will soon be born, and Arab Jerusalem will be our capital, whether the enemies of peace like it or not," he told the German news weekly Der Spiegel, according to an advance release from Monday's edition. Arafat has been trying in recent days to put pressure on Israeli Prime Minister Benjamin Netanyahu to honour peace deal commitments, accusing Israel of declaring war on Palestinians with its decision to expand West Bank Jewish settlements. "The struggle for peace goes on, there is no alternative," Arafat told Der Spiegel. "We cannot allow ourselves even to consider failure." Asked if he doubted Netanyahu's good will, Arafat replied: "The construction and expansion of Jewish settlements are an attack on the peace process, led by the Israeli government. "Someone who, at this time of all times, presses on with a population displacement in the occupied territories to the advantage of illegal Jewish settlers can hardly let himself be praised as an apostle of peace." But Arafat added: "I would be a bad negotiator if I ruled out the possibility of reaching a solution together with Netanyahu to the great problems which stand in the way of peace." 6725 !C17 !C34 !CCAT !G15 !G157 !GCAT Volkswagen AG and the German state of Saxony moved closer to a showdown with the European Union over planned industrial subsidies on Saturday as the EU's competition commissioner warned legal action was imminent. At issue are 91 million marks of subsidies that the state of Saxony has granted Volkswagen to build two plants -- a grant which exceeds 540 million marks worth of subsidies that the EU approved in June. Karl Van Miert, the EU's competition czar, told the daily Hannoverscher Allgemeine Zeitung he would take the German pair before the European Court of Justice if they did not agree to the EU's decision by Wednesday. And European Union President Jacques Santer said the pair must "return to legality" but hinted that a compromise was possible to avert a legal battle between the EU and Europe's largest economy. Volkswagen and Saxony claim the extra aid is allowed under Treaty of Rome rules on German unification, but the EU claims the grant will tilt the playing field of European car makers in Volkswagen's favour. Although both side are sticking to their guns, the EU officials said they hoped to avert a legal battle. "We want an amicable agreement," Santer told the magazine Der Spiegel. "A confrontation is not in the interest of either party." The EU's competition commissioner also offered an olive branch. "We can do without a temporary order if Saxony's breach of the law is neutralised," Van Miert said in the interview, suggesting that funds provided so far be frozen. But Volkswagen, which has threatened to take its investment elsewhere, has refused to back down. Chairman Ferdinand Piech said on Tuesday, "We believe that the decision by the premier of Saxony to grant subsidies to Volkswagen is a decision for the people and for jobs in Saxony." Van Miert said talks between the federal German government and the EU to break the impass are continuing, adding it was a good sign that the federal government has not filed a counter complaint against the EU as Saxony has done. German Economics Minister Guenter Rexrodt has, however, indicated he stands behind VW and Saxony, saying the car maker deserves the full allotment of subsidies. Saxony and the European Commission locked horns in June when the Commission approved only 540 million marks of a proposed 780 million marks in subsidies for VW to build two plants in the formerly communist east German state of Saxony saxony premier Kurt Biedenkopf has defended the subsidy plans, saying that 23,000 jobs depend on it and that the state needs such help to catch up with west Germany. Saxony was one of the most industrialised regions in Germany before World War Two, and suffered greatly under the communist east German government. Unemployment there now is near 15 percent. The debate is turning on Article 92 of the Treaty of Rome which says that subsidies are acceptable in regions affected by the former separation of Germany. Brussels, however, contends that the cash grant gives VW an unfair advantage in a European car market already suffering from over capacity. Van Miert is showing no sign of giving ground. "There are many Biedenkopfs in Europe," he said. 6726 !E12 !ECAT !G15 !G154 !GCAT Britain could be in the first group of nations to form a single European currency union, European Union President Jacques Santer said on Saturday. In an interview with Der Spiegle magazine, Santer said that if British industry wished to join European Economic and Monetary Union (EMU), then the country probably would. Santer also said he expected that EMU would start on schedule on January 1, 1999. "I have never seen such a good political mood for currency union as now," Santer said. A copy of the article was distributed to the media before the magazine was published. -- Frankfurt Newsroom + 49 69 756525 6727 !G15 !G156 !GCAT !GENV Thousands of European bikers rode past the European Commission building in central Brussels on Saturday to protest against planned EU laws which they say pose a threat to their motorcycle lifestyle. If passed, the laws will limit engine noise and make it illegal to change manufacturers' specifications, outlawing the painstaking customisation favoured by bike enthusiasts and sharply increasing home-maintenance costs. "We are absolutely fed up," said Simon Milward, general secretary of the Federation of European Motorcyclists (FEM) -- one of the organisers of the demonstration. "It probably comes because there are so many bureaucrats who don't like bikes, who have a stereotype image of bikers as portrayed on TV and so forth, which is wrong," he told Reuters. Three members of the European Parliament were to join the demonstration, Milward said. A final decision on the new rules are expected in October after a meeting between the European Parliament and the EU's decision-making Council of Ministers. The Commission argues that the measures are needed on environmental and health grounds. "We are not against motorcycles in principle," a spokeswoman said. Another aim of the demonstration is to draw attention to the fact that motorcycles can reduce traffic congestion, a growing problem around Europe. "The third main aim of the demo is to highlight the democratic deficit in the European legislation process," Milward said. REUTER 6728 !GCAT !GDIP Iranian security forces burst into the home of a German cultural attache in Tehran a month ago and seized his guests for questioning, Bonn's foreign ministry said on Saturday. A spokesman said he could substantially confirm a report in the news weekly Der Spiegel, which said Iranian secret police burst in while attache Jens Gust was entertaining six Iranian writers and their wives. Gust was threatened with violence, then locked into a room to be interrogated on suspicion of "promoting activities hostile to the state" while his guests were taken away, the magazine said. The ministry spokesman said the German embassy immediately made a sharp protest to the Tehran government. The Iranian ambassador was also summoned to the ministry in Bonn to hear a sharp protest and "disapproval of this glaring breach of the principles of international law", he added. Iran subsequently said it regretted the incident, which it said had been the result of a misunderstanding. All those detained appeared to have been freed, the spokesman said. Relations between the two countries are currently under strain because of the testimony in a Berlin court of former Iranian president Abolhassan Banisadr. Banisadr, an avowed opponent of the Tehran government who now lives in exile, accused top Iranian leaders of personally ordering the assassination of three exiled Kurdish leaders in a Berlin restaurant in 1992. Iran has asked Germany to extradite Banisadr, who is due is due back in Berlin next Thursday to continue his testimony. Banisadr, who received political asylum in France after fleeing there in 1981, told Der Spiegel he did not plan to ask for a guarantee of safe conduct. If Germany were to extradite him, he said, it would "lose face before the whole world". German prosecutors have already accused Iran's intelligence minister Ali Fallahiyan of ordering the killing of the Kurdish leaders. Iran, which denies the allegations, urged German authorities to disregard Banisadr's testimony and said it could hurt relations. 6729 !GCAT !GDEF !GDIP The United States said on Saturday it was jointing Greece, Italy, Romania and Ukraine for 10 days of military exercises in the Black Sea focusing on humanitarian and peacekeeping operations. The U.S. Sixth Fleet said in a statement that Exercise Classica 96, an Italian invitation exercise, would be held near Constanta, Romania until September 9 and would be conducted in the spirit of NATO's Partnership for Peace (PfP). "U.S. participation in classica 96 demonstrates our commitment to and an enduring interest in the stability of eastern Europe," the statement said. PfP is aimed at forging closer links between eastern and central Europe and NATO members by organising military exercises and joint training projects. 6730 !GCAT !GDIP !GVIO Italian Foreign Minister Lamberto Dini on Saturday met former Tanzanian president Julius Nyerere, the international negotiator for Burundi, the ministry said. Nyerere arrived in Rome this week on a private visit and held talks with the U.S. special envoy to Burundi, Howard Wolpe, and the Sant' Egidio Community, an Italian Roman Catholic organisation which has been monitoring Burundi closely. "(Nyerere) informed Minister Dini of the latest developments in the (Great Lakes) region, with particular respect to Burundi following the military coup d'etat on July 25," the ministry said in a statement. It gave no details of their talks. Nyerere was due to be presented with an "Artisans for Peace" prize by the Lay Volunteers' International Organisation on Sunday. He leaves Rome on Monday. The U.N. Security Council on Friday condemned the coup by retired Tutsi major Pierre Buyoya and for the first time said in a resolution it intended to pressure Buyoya into unconditional negotiations with all parties and factions "without exception". Buyoya on Saturday dismissed its threat of an arms embargo against Burundi and flatly ruled out talks with Hutu rebels. Some 150,000 people -- mostly civilians -- have died in Burundi since 1993 when the country's first democratically elected Hutu president was killed in an attempted army coup. 6731 !C17 !C34 !CCAT !G15 !G157 !GCAT European Union President Jacques Santer hinted a compromise may be struck in its subsidy fight with Volkswagen AG and the state of Saxony, but said EU laws must obeyed, a German magazine reported Saturday. In an interview with Der Spiegel magazine, Santer called on the German pair to "return to legality" but hoped that a deal could yet be struck which would avoid a legal battle. "We want an amicable agreement," Santer told the magazine. "A confrontation is not in the interest of either party." A copy of the article was provided to the media in advance of the magazine's publication. At issue are 91 million marks of subsidies that the state of Saxony has granted Volkswagen to build two plants -- a grant which exceeds 540 million marks worth of subsidies that the EU approved in June. The EU president said a compromise might include a declaration from the Commission which would more strongly note the difficulties faced in eastern Germany and a statement from Saxony saying that it would reduce the amount of subsidies it will provide. Santer said the EU and German authorities are working to develop a common understanding of Article 92 of the Treaty of Rome which says that subsidies are acceptable in regions affected by the former separation of Germany. Saxony claims the article allows it to give VW wide state support, but Santer said there are limitations, adding it was not a "carte blance." Santer said the EU is working with the German government to more clearly define the criteria for state subsidies to help rebuild the east. According to a German newspaper report on Saturday, EU competition commissioner Karl Van Miert said the EU would take VW and Saxony to the European Court of Justice if no solution to the subsidy fight is found by Wednesday. 6732 !E12 !E21 !E211 !ECAT !G15 !G154 !GCAT Bundesbank board member Reimut Jochimsen said on Saturday he was pessimistic that a satisfactory stability pact would be agreed to ensure long-term compliance with budget and debt criteria in Europe's planned currency union. "I am very pessimistic on the stability pact," he told reporters after a European youth seminar. "The political will is not there." Jochimsen stressed how necessary he believed such a pact was, not only to maintain budgetary discipline among countries who joined the single currency, but also to ensure that European Union members which initially remained outside monetary union did not relax their efforts to meet the economic criteria. To be an effective deterrent, he said, sanctions must be tough enough to be an additional burden to the country concerned. He said he would prefer the application of sanctions to be automatic rather than governed by political decisions. To ensure adherence to the criteria before monetary union starts in 1999, Jochimsen said it would be desirable to carry out "dry run" at the end of 1996 -- a serious and strict evaluation of whether countries qualify for currency union. "It's disquieting that the evaluation laid down in the treaty (for 1996) -- originally intended for a 1997 start of the single currency -- is now to be dispensed with," Jochimsen said in his remarks to the seminar. -- Kevin Liffey, Bonn newsroom +49 228 26097160 6733 !GCAT !GCRIM Captured Mafia boss Giovanni Brusca has told magistrates that Sicily's Cosa Nostra is in crisis and has been leaderless since "boss of bosses" Salvatore "Toto" Riina was arrested in 1993, a newspaper said on Saturday. "Since Toto Riina ended up in jail, Cosa Nostra has been without a real leader...at the moment, it has no charismatic figure at its head," La Repubblica quoted Brusca as saying. Brusca, one of Sicily's most feared Mafia godfathers before his arrest in May, suddenly decided to turn state's evidence a week ago and has promised to reveal all. Magistrates are treating his evidence with caution and have not yet admitted him to Italy's witness protection programme. La Repubblica said Brusca had confessed that the Mob knew it was in trouble. "The Mafia is going through a critical time," it quoted him as saying. "The bosses don't consider themselves done for but they know that times have changed and the state is taking them on in earnest." Italy has gone on the offensive since capturing Riina, who had been a fugitive for more than 23 years. Respected anti-Mafia expert Pino Arlacchi, a leftist deputy, said Italy should now seize a historic opportunity to beat the Mob. "Riina's Mafia is on the ropes. A good part of the current Mafia leadership could follow Brusca's example," he wrote in Saturday's edition of the Corriere della Sera newspaper. "We have a unique opportunity ahead of us. For the first time in the history of republican Italy, we're are in the position of turning a temporary defeat into a historic debacle for the Mafia." But he cautioned: "We've still got a long way to go and we face unforseen difficulties." As if to prove him right, the Mafia was flexing its muscles in Sicily. Gunmen shot dead Giuseppe Giovanni Caffri, a mobster seen as loyal to Brusca, near Palermo on Friday night in what investigators believed was a vendetta and warning to turncoats. Caffri was related by marriage to Francesco Di Carlo, a Mafia boss accused by some prominent turncoats of killing the head of crashed Banco Ambrosiano in 1982 and who was reported to have recently begun collaborating with investigators. Roberto Calvi, the bank's chairman, was found hanged under Blackfriars bridge over the river Thames in central London several weeks before his bank went under but the circumstances of his death remain murky. Brusca, publicly branded "a beast" by another turncoat whose 12-year-old son he was alleged to have strangled and disposed of in a vat of acid, has been charged with several Mafia attacks. But La Repubblica said he was fed up with being blamed for crimes he did not commit. "I don't like it when people say Brusca this, Brusca that, Brusca did everything. I want to defend myself from monstrous things," it quoted him as saying. Investigators believe Brusca pushed the button detonating a bomb under anti-Mafia judge Giovanni Falcone's motrocade near Palermo in 1992, killing Falcone, his wife and three bodyguards. Brusca is also accused of helping plan 1993 Mafia bombings against cultural monuments in Rome, Florence and Milan. La Repubblica quoted him as saying Riina's brother-in-law Leoluca Bagarella was behind the strategy and that he always believed "it would severely damage our organisation, which it has done". Interior Minister Giorgio Napolitano is due to give a report on turncoats to parliament next week amid debate over the merits of a witness protection system that some feel is flawed. A Mafia turncoat was detained on Thursday after allegedly ordered killings while on the protection programme, which offers ex-mobsters reduced sentences, a salary and a new identity. 6734 !E21 !E211 !ECAT !GCAT !GPOL Germany's opposition Social Democrats (SPD) want a clear cut in income taxes by the start of 1998, the daily Bild reported on Saturday. The newspaper said the SPD executive committee aims to reduce the lowest marginal tax rate to 20 percent from 25.9 percent and the top rate to around 45 percent from 53 percent. The party also wants to lift the level at which people start to pay taxes. Under the scheme, the minimum taxable income for single people would be 14,000 marks and married couples would start paying when their incomes reached 28,000 marks. Currently, the minimum income at which singles pay tax is 12,096 marks and the lowest taxable income for married couples is 24,192. The SPD figures that the changes would reduce government receipts by 60 billion marks. But that shortfall could be made up by tightening tax rules on activities such as private speculation in real estate. -- Frankfurt Newsroom +49 69 756525 6735 !GCAT !GDIP !GVIO The North Atlantic Treaty Organisation's spokesman on Saturday declined all comment on reports of armed conflict in northern Iraq. But a NATO official told Reuters: "We are watching the situation closely." Earlier on Saturday, an Iraqi Kurd leader said both Iraqi troops and Kurdistan Democratic Party (KDP) forces were attacking the city of Arbil in northern Iraq. 6736 !C42 !CCAT !E41 !ECAT !GCAT !GJOB !GPOL !GVIO Marc Blondel, head of France's Force Ouvriere union which led last year's crippling transport strike, said on Saturday growing discontent pointed to likely social unrest in coming weeks and called for wage increases. Unemployment at a record high, layoffs in the state and private sectors, and general gloom have all prompted several leading unions to predict strikes and protests in the autumn. "We have the same situation as last year. All ingredients of discontent are there," Blondel said in an interview published in the daily Le Monde. "Until now the French viewed difficult times as unavoidable and unemployment as a trial. But gloom is progressively turning into discontent and anger," he said, whose union has called for a protest march on September 21 as a test of union members' fighting spirit and a warning to the government. Blondel criticised the centre-right government for "holding to an economic policy that brings no solution to the economic slowdown and worsening unemployment." "We want a mobilisation on wages, because that's an economic necessity," he said. He blasted government plans for austerity in the 1997 budget, and the march towards European Union. "We are building the Europe of the anti-Europeans, one that follows the line of the ultra-liberals," he said. 6737 !GCAT !GCRIM Spanish customs officials said on Saturday they had confiscated more than a million packs of contraband cigarettes, destined for Spain and Britain, and arrested two leaders of a smuggling ring. "The ring, whose nerve centre was Barcelona, was involved in smuggling and distributing large quantities of tobacco in clandestine commercial circuits in the (Iberian) peninsula and the United Kingdom," a customs statement said. Most of the cigarettes were hidden in containers in Barcelona's port and had come by sea from Greece. A cargo of Benson & Hedges made in Andorra and destined for Britain was also seized in a transport company's offices. Customs officials estimated the street value of the haul was around 320 million pesetas ($2.6 million). 6738 !GCAT !GDIP !GPOL A Mauritanian immigrant, served with an expulsion order after his appeal for refugee status in France failed, refused to board a plane on Saturday and was ordered brought before a judge, his lawyer said. Police had tried to make Berke Camara, seized in a controversial raid on a Paris church, board a scheduled Air Afrique flight which took off from Roissy-Charles de Gaulle airport outside Paris bound for Nouakchott. "They tried to make him board the plane at 11 a.m. (0900 GMT). He refused and he has been ordered to go before a judge," his lawyer Brigitte Plazza said. Camara, prosecuted for his beliefs in Mauritania three times and jailed, had described himself as a political refugee and had expressed concern for his safety if he was sent back. The interior ministry earlier confirmed that an expulsion order had been served and that he had been due to be sent home on a regular flight some time on Saturday. "If I go back, I will be in danger. I fled to save my life," Camara, who arrived in France in December 1993, told Reuters on Wednesday. His lawyer had appealed to the U.N. High Commissioner for Refugees. Both the U.N. High Commissioner and the French consultative commission on human rights appealed to the French interior ministry on Friday, demanding it suspend the expulsion order, another of his lawyers said. Eight Africans among 210 people evicted from the church, after a 50-day occupation aimed at securing residence permit, have been deported. Most of the others have been released after a brief stay in detention. 6739 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Iberia ground staff called off two hour strikes scheduled for Saturday and Sunday afternoons after reaching an agreement with management, a spokeswoman said. The strikes were in protest over staffing levels which unions say are too low and which the company has agreed to reconsider, she added. Early morning strikes this week delayed some flights, but weekend action at peak hours could have seriously disrupted thousands of passengers returning from holiday on Spain's south coast. -- Madrid newsroom +34 1 585 2151 6740 !GCAT !GVIO An Iraqi Kurd leader said on Saturday both Iraqi troops and Kurdistan Democratic Party (KDP) forces were attacking the city of Arbil in northern Iraq. "Hundreds of Iraqi tanks and hundreds of Iraqi armoured cars are attacking the town and there are huge artillery bombardments," Jalal Talabani, head of the Patriotic Union of Kurdistan (PUK), told Radio France Internationale. "The KDP is co-operating with the Iraqi government and attacking the city side-by-side with Iraqi soldiers," Talabani said in the interview from his base near Suleymanli, a text of which was made available to Reuters before its broadcast. Talabani, whose movement has since December 1994 held the disputed Arbil, seat of the autonomous Iraqi Kurdish parliament, said the attack began at 5 a.m. local time and the Iraqi troops had managed to enter the city in one location. "There is heavy fighting so there are a number of casualties among civilians," he said, adding that the Iraqi troops were trying to encircle the city and cut all lines between it and other "liberated" areas of Kurdistan. "We expect that the Iraqis after finishing with Arbil will attack other places in Kurdistan. They want to reoccupy Iraqi Kurdistan regardless of the (United States) Provide Comfort operation," he said. The attack was one of Iraqi President Saddam Hussein's "biggest foolish acts" and Baghdad was not expecting any response from Washington or its allies, he said. But Talabani said that he was in continuous contact with the Pentagon and the State Department in Washington. "Our representatives are talking to them. We are promised there will be a response very soon," he said. Iraqi's Deputy Prime Minister Tareq Aziz said earlier on Saturday that Iraqi troops were fighting to aid Kurdish rebel leader Massoud Barzani against "the vicious aggression...from Jalal Talabani". The rival Iraqi Kurds have presided uneasily over northern Iraq -- protected from Baghdad by U.S.-led allied air power -- since the 1991 Gulf War. 6741 !CCAT !GCAT !GDIS Norwegian and Russian climbers worked on an Arctic mountainside on Saturday to bring down the frozen and shattered bodies of those who died when a Russian airliner crashed this week on the island of Spitzbergen. All 141 on board were killed when the plane hit the mountain as it was coming in to land on Thursday. The dead were Russian and Ukrainian miners, some with their families, on their way to work in the coal mines on the island. Norwegian officials said the weather had improved after early fog cleared on Saturday, allowing helicopters to fly the rescue teams and investigators to the remote crash site. "We will start bringing down the bodies today," said a spokeswoman for the island governor's office. Russia has sent a group of 11 top-class mountaineers to help Norwegian teams recover bodies from the steep, snow-covered slopes. Their grisly task is complicated by the danger of avalanches, strong winds and sudden changes in the weather. Officials say it could take weeks to bring all the bodies down from the mountain to Longyear, the island's main town just a few miles (km) from the crash site. From there, they will be flown to the city of Tromsoe in northern Norway -- more than 500 miles (800 km) to the south -- for autopsies and formal identification of the dead. Accident investigators working on the mountain recovered a flight recorder buried in the snow near the Tupolev Tu-154's tail section on Friday, which could provide the explanation for the worst air disaster in Norway's history. The shockproof orange box will be taken to Moscow for examination. Officials said it was either the flight data recorder, containing vital information about the height and speed of the plane when it crashed, or a second device used to record the pilots' voices and communications. Western aviation experts have raised questions about the safety of Russian airline operations following the breakup of the Soviet Union in 1991. But the pilot was experienced and did not report any trouble before the plane crashed. The close-knit, hardy Norwegian and Russian mining communities on the island have been plunged into grief and shock by the disaster. The miners were on their way to start work in the Russian towns of Barentsburg and Pyramiden. Fewer than 3,000 people live on Spitzbergen, which has one of the world's harshest climates. The island is governed by Norway but Russia has rights of access under an international treaty from the 1920s. 6742 !E12 !ECAT !G15 !G154 !GCAT !M13 !M132 !MCAT Italian Foreign Minister Lamberto Dini said on Saturday he expected the lira to return to the European Exchange Rate Mechanism (ERM) late this year or early next. "We have begun contacts, the climate is absolutely favourable for us to achieve this by the end of the year or the start of 1997," Dini told La Stampa newspaper in an interview. He said Italy was "recovering great international credibility". The lira crashed out of the European exchange grid amid currency turmoil in September 1992 but Prime Minister Romano Prodi's centre-left government has vowed to return it swiftly and to make Italy a founding member of European economic and monetary union. Dini said Italy would stick to the rigorous economic criteria for joining a single currency, which is due for launch in 1999. "We cannot allow ourselves to fail in this objective nor to dawdle along the road to achieving the aim," he said. Prodi said in an interview with news magazine Panorama this week that Italy was sticking to the single currency criteria as laid down in the Maastricht Treaty but that Italy might need a little leeway from its European partners. -- Rome newsroom +396 678 2501 6743 !GCAT !GCRIM More than 10 weapons, including automatic Kalashnikov rifles, were stolen from an arms store in Belgium, police said on Saturday. A policeman in the southern Belgian town of Chatelet told Reuters that thieves used a car to ram the window of an arms store in neighbouring Chatelineaux last night. It was the second arms robbery this week. On Tuesday, thieves stole about 40 forearms from a shooting range in southern Belgium, including Kalashnikov, Uzi and Fal automatic weapons. 6744 !GCAT !GCRIM Belgian police said on Saturday they had found no trace of two teenage girls reported missing during a shopping trip three days ago. "There is no trace so far, the enquiry is continuing," a Liege police official told Reuters. Late on Friday, Liege police said in a statement that on Thursday, Rachel Legeard, 18, and Severine Potty, 19, had gone shopping to the eastern town of Liege on Thursday, where Legeard's wallet had been stolen. After reporting the theft to the police, they took a bus home and reportedly got off the bus before arriving in their home village of Nandrin. They have not been seen since. Police declined to comment on whether it suspected a link with the Marc Dutroux case, the paedophile kidnap, sex abuse and murder scandal which has rocked Belgium in the past two weeks. 6745 !GCAT !GENT !GPOL !GVIO Dublin-born director Neil Jordan says he never lost more sleep over a film than over "Michael Collins", his controversial epic about the IRA which has its premiere on Saturday at the Venice Film Festival. The film, starring Liam Neeson and Julia Roberts, recounts the life of Michael Collins, the Irish Republican Army's Director of Intelligence who fought for Irish independence from 1919 to 1921. Although not due for release in Britain until early next year, some politicians have already said they feared it would fan sectarian tensions in British-ruled Northern Ireland. Jordan defends his decision to make the film, whose screenplay he wrote himself after years of research, saying it was "more about history than any political statement". "The film spares neither the Irish nor the British in its depiction of the savagery of the time," Jordan said in a statement released by Warner Bros. "How often has independence been achieved without bloodshed? Very rarely." Jordan, whose 1992 film "The Crying Game" also came under fire for what was perceived as a sympathetic portrayal of the IRA, said Collins was more than just a revolutionary. "He developed techniques of guerilla warfare later copied by independence movements around the world, from Mao Tse-Tung in China to Yitzak Shamir in Israel," Jordan said. "Collins would never be a proponent of contemporary terrorism as practised today. He was a soldier and a statesman and, over time, a man of peace." Leeson, the Northern Ireland-born actor who was nominated for an Oscar for best actor for his performance in "Schindler's List", plays the lead role in Jordan's film. Aidan Quinn portrays Harry Boland, Collins' best friend, and rival for the love of Kitty Kiernan, played by Roberts. Much of the film was shot on location in Dublin with Jordan using thousands of its citizens as unpaid extras. A set, however, was used for the fighting scenes. Noting that information about Collins was "as mysterious as the existence he maintained", Jordan said he made some historical assumptions in the film. "I have made choices about certain events based on my own extensive research into his letters and reported speeches," he said. "I wanted to make this a story as accurate as possible without killing it dramatically and I think I have. It is a very true film." One of the assumptions is his interpretation of the murky circumstances surrounding the shooting death of Collins, who had broken with his comrades when he sought a negotiated settlement with Britain, in an ambush in 1922. "I have never lost more sleep over the making of a film than I have over 'Michael Collins', but I'll never make a more important one," Jordan said. "In the life of one person you can tell the events that formed the north and south of Ireland as they are today." 6746 !C17 !C34 !CCAT !G15 !G157 !GCAT The European Commission threatened to take Volkswagen AG and the state of Saxony to court if they fail to agree to halt planned state subsidies by Wednesday, a European Union commissioner said on Saturday. Karl Van Miert, the EU's competition commissioner, told the daily Hannoverschen Allgemeinen Zeitung he would take the German pair before the European Court of Justice if no compromise is reached on 91 million marks of aid that Saxony wants to give VW to build cars in two east German cities. The competition czar said he hoped that legal action could still be avoided. "We can do without a temporary order if Saxony's breach of the law is neutralised," Van Miert said in the interview, suggesting that funds provided so far be frozen. But Volkswagen, which has threatened to take its investment elsewhere, has refused to back down. Chairman Ferdinand Piech said on Tuesday, "We believe that the decision by the premier of Saxony to grant subsidies to Volkswagen is a decision for the people and for jobs in Saxony." Van Miert said talks between the federal German government and the EU to break the impass are continuing, adding it was a good sign that the federal government has not filed a counter complaint against the EU as Saxony has done. German Economics Minister Guenter Rexrodt has, however, indicated he stands behind VW and Saxony, saying the car maker deserves the full allotment of subsidies. Saxony and the European Commission locked horns in June when the Commission approved only 540 million marks of a proposed 780 million marks in subsidies for VW to build two plants in the formerly communist east German state of Saxony. Saxony has so far given 91 million marks over the amount apoproved by the EU to build two plants. Saxony premier Kurt Biedenkopf has defended the subsidy plans, saying that 23,000 jobs depend on it and that the state needs such help to catch up with west Germany. Saxony was one of the most industrialised regions in Germany before World War Two, and suffered greatly under the communist east German government. Unemployment there now is near 15 percent. The debate is turning on Article 92 of the Treaty of Rome which says that subsidies are acceptable in regions affected by the former separation of Germany. Brussels, however, contends that the cash grant gives VW an unfair advantage in a European car market already suffering from over capacity. Van Miert is showing no sign of giving ground. "There are many Biedenkopfs in Europe," he said. 6747 !E12 !ECAT !G15 !G154 !GCAT Spanish Prime Minister Jose Maria Aznar said on Saturday that European monetary union was vital for Spain if it wanted to form part of the core of Europe. "It's an opportunity from the political point of view for Spain to form part of the most important political decision nucleus in Europe and one of the most important in the world," Aznar told Efe news agency. "The possibility of creating a single currency means the possibility of joining the most important area of growth, prosperity and employment that will exist in Europe and therefore one of the most important in the world," he said. Spain would have to suffer a "restrictive" budget in 1997 to meet the monetary union deficit target but this would put it on the road to stability, he added. At present Spain meets none of the criteria for monetary union but economists say it could be borderline for inclusion based on its performance in 1997. The conservative Popular Party government has to cut the public sector deficit by at least a trillion pesetas next year to take it to three percent of gross domestic product. -- Madrid newsroom +34 1 585 2160 6748 !GCAT These are the leading stories in the Algerian press on Saturday as reported by the official Algerian news agency APS. Reuters has not verified these stories and does not vouch for their accuracy. LIBERTE - A bomb explosion kills two people and wounds six in a restaurant at Staoueli, near Algiers. EL MOUDAJHID - The government, workers union and employers organisations agree to reduce working hours from 44 hours to 40 hours weekly and raise school allowances. - African Youth Movement holds congress in Algiers on Sunday. AL KHABAR - Political parties await President Liamine Zeroual's decision on political reforms to reshape multi-party rules. 6749 !GCAT !GDIP !GVIO Foreign Secretary Malcolm Rifkind on Saturday condemned the guerrilla attacks of Tamil Tiger rebels in Sri Lanka but said Britain would allow the group to continue its political campaigning in London. Rifkind said Britain respected political freedom and ruled out any crackdown on the LTTE's political activities even if the Sri Lankan government decided to ban the group. The Tigers have their international propaganda headquarters in London. Rifkind, speaking at a Colombo dinner hosted by Sri Lankan Foreign Minister Lakshman Kadirgamar, urged Colombo not to abandon efforts to find a peaceful solution to its conflict with the separatist Liberation Tigers of Tamil Eelam (LTTE). He condemned the LTTE for bombing Sri Lanka's central bank in January, killing more than 80 people, and for the July bombing of a train in the suburb of Colombo in which 57 died. "I should like to take this opportunity unreservedly to condemn the LTTE for its terrorist atrocities in Colombo and elsewhere in Sri Lanka over the past twelve months," he said. "Britain's policy towards Sri Lanka has one overriding objective -- to help the people of this island work out a stable, fair and permanent solution to their differences," he said. "That must emerge from negotiations." Kadirgamar said the Tigers did not represent the Tamil people. He said the LTTE continued its guerrilla operations aided by funds it extorted from expatriate groups in Britain and other Western nations. Rifkind, in Colombo as part of a five-nation Asian trip, told a news conference earlier on Saturday that the LTTE, fighting for an independent homeland for Sri Lanka's minority Tamils, had the right to express their political views. "We have great sympathy with the people of Sri Lanka because we also, in Britain, have been victims of terrorism. We also have a terrorist organisation that has destroyed innocent lives and brought damage and destruction to innocent people in pursuit of their political objectives." The Sri Lankan government says more than 50,000 people have died in the 13-year-old war between the LTTE and the army. Colombo has so far not outlawed the LTTE, wanting to retain the option of eventually resuming peace talks with the rebels. But Sri Lankan officials said hardliners in the government and military were pushing for a ban, hoping it would curb the group's international propaganda and funding. Hardliners noted that Western governments had told Sri Lanka they could not crack down on rebel activities on their soil as long as the LTTE did not break their laws and remained a legal organisation in Sri Lanka. "There are in London many people from many countries around the world who have their political differences with their governments," Rifkind said. Tamils, like anyone from any country, must obey British law that prohibits support of terrorism. "If they simply express political views, that is their right in a country that believes in free speech. If they have a building or an office the law cannot prevent them from doing so," Rifkind said. "We have to act in London according to British law, and the law acts as a result of a decision taken by individuals, not by organisations." Kadirgamar said Colomo battled terrorism but respected minority concerns. His government says it wants to table a devolution package to parliament next year to allow greater automomy to the Tamil minority in the country's north and east. 6750 !GCAT Following are some of the main stories in Saturday's Pakistani newspapers: DAWN - The World Bank, fearing that 34 power projects in the private sector given letters of support will generate far more electricty than needed by Pakistan, has advised the government to withdrew such letters if the projects fail to reach financial closure within the allowed time. - The government is likely to allow a 16 percent increase in the prices of all imported medicines from next month. Both controlled and decontrolled drugs will be affected. - The U.S. Narcotics Control Agency has issued a report about poppy cultivation in Pakistan's Federally Administered Tribal Areas according to which the crop yield has recorded a decrease of more than 50 percent since 1992. - The Pakistani government has formulated a new comprehensive policy to attract foreign oil and gas exploration companies for offshore drilling in a big way. - Pakistan has set itself an annual investment target of $5 billion from the year 2000, while India has set a target of $10 billion, preferable from the current year. BUSINESS RECORDER - The Corporate Law Authority may allow a second credit rating agency to begin services in Pakistan from October. - A public sector Korean corporation is desirous of running the main plant at the Saindak copper and gold project in Baluchistan province and investing on equity basis in other mineral projects. THE NATION - The World Bank has suggested to the Pakistani government to establish autonomous bodies on federal and provincial levels for modernising the educational examination system, preparing curriculum and training teachers. But a committee of chairmen of education boards, at a recent meeting in Islamabad, raised serious objections to the proposal and termed it against national interest. - High flood in Chenab river has devastated 40 villages in Muzaffargarh district of Punjab province. -- Islamabad newsroom 9251-274757 6751 !GCAT !GDEF !GDIP Prime Minister Benazir Bhutto said on Saturday that Pakistan still wanted to get U.S. F-16 jet fighters, although Washington blocked an earlier deal, but was looking at other options, mainly French Mirages. She made the remarks while formally receiving a second consignment from long-delayed weapons released by the United States after easing an arms embargo against Pakistan. The consignment did not include any F-16s and Washington is seeking to sell 28 F-16s to other countries to reimburse the $658 million that Pakistan has already paid for them. "We are informed that efforts are being made to sell these warplanes and the negotiations are under way with Indonesia, Jordan and some other countries," Bhutto, quoted by the APP news agency, told reporters at Chaklala air base near Islamabad. "But I am eager to get F-16s for my country. It not only costs us less but also we will be able to save a reasonable amount." Bhutto said the equipment received on Saturday, worth $49 million. would help to keep Pakistan's existing fleet of F-16s operational. The United States halted military sales to Pakistan in 1990 because of its alleged programme to develop nuclear weapons. The U.S. Congress later approved an exemption to let Pakistan get military equipment it had already paid for, but not the F-16s. Bhutto said Pakistan was looking at other options to replace the blocked F-16s but she indicated that the government would go for more expensive Mirage 2000-5s from France. She said Pakistan had no option but to buy Mirages after Russia refused to sell it SU-27 fighter-bombers. British planes do not suit its needs while Swedish planes have U.S. engines that can be affected by U.S. sanctions on Pakistan, she said. Bhutto described the release of the U.S. military equipment as a diplomatic victory of her government, which has come under increasing criticism from political opponents at home. "This equipment will greatly strengthen our defences," she said, noting that it arrived only a week before Pakistan is to mark the 31st anniversary of its second of the three wars against arch-rival India. 6752 !GCAT !GVIO Seven soldiers and one civilian have been killed in two days of fighting between Indian troops and separatist guerrillas in the northern state of Jammu and Kashmir, Indian police said on Saturday. They said the clash began early on Friday in Kalaroosh village in Kashmir's Kupawara district, 110 km (70 miles) north of the state's summer capital of Srinagar. There was no word on rebel casualties. The village, situated in a dense forest amid rugged hills, is a stronghold of the pro-Pakistan Harakat ul Ansar guerrillas. Moslem militants and separatist politicians back Pakistan's opposition to Indian plans to hold state elections in Jammu and Kashmir next month. Police said militant groups had stepped up their violent campaign to try to disrupt the September polls. The Press Trust of India said 21 people, including 12 rebels, five security men and an activist of India's former ruling Congress Party, were killed in the Kashmir valley in separate incidents over the last two days. India is reinforcing the region with additional paramilitary forces ahead of the polling, the first local elections since simmering discontent against New Delhi's rule in Kashmir erupted into open rebellion in 1990. Separatist politicians on Saturday accused government-backed militia groups of threatening their leaders if they campaigned against the polls. In a statement issued in New Delhi, the Kashmir Awareness Bureau, representing the state's All Party Hurriyat (Freedom) Conference umbrella group, said one such miltia group had seized three senior leaders -- Syed Ali Shah Geelani, Abdul Ghani Lone and Yasin Malik -- at gunpoint on Friday. They were later relased unharmed, it added. The cult of violence in Kashmir has brought international calls for independent obersevrs to monitor the polls. British Foriegn Secretary Malcolm Rifkind, who was visiting New Delhi on Friday, said his country wanted India to permit official international observers to monitor local polls next month in Kashmir, but New Delhi has refused to admit any. "We would prefer to see official international observers but that is not currently on offer," Rifkind, on a two-day visit to the Indian capital, told Reuters in an interview. On Wednesday, a spokesman for the government of Jammu and Kashmir state said foreign individuals would not be barred from observing assembly elections which start on September 7, but that teams of official observers would not be permitted. 6753 !C13 !C21 !CCAT !GCAT !GPOL Bangladesh Prime Minister Sheikh Hasina said on Saturday her two-month-old government was committed to respecting press freedom but urged journalists to avoid "falsehood" in reporting. "My government believes in full freedom of press but journalists should make good use of it by not resorting to falsehood and motivated reporting," she told a convention of the Bangladesh Federal Union of Journalists (BFUJ) at the Dhaka Press Club. "I urge you all to uphold the principles of correct, responsible and objective journalism in the greater national interest," Hasina said. The prime minister described the press as a mirror and said: "I want to see the true picture of the society reflected in it." Hasina's Awami League regained power in a June general election 21 years after it was overthrown in a military coup in which the country's independence leader Sheikh Mujibur Rahman was killed. Hasina said she would welcome any constructive criticism that would help her establish the rule of law and and speed up economic development. She said her government would not "use distribution of government advertisements as a means to throttle press freedom" and pledged to contribute generously if journalists set up a welfare programme for themselves. 6754 !GCAT !GDIP !GVIO Britain will allow Sri Lanka's Tamil Tiger rebels to continue political activities in London despite its condemnation of the group's guerrilla attacks, British Foreign Secretary Malcolm Rifkind said on Saturday. Rifkind, in Colombo as part of a five-nation Asian trip, told a news conference that the Liberation Tigers of Tamil Eelam (LTTE), fighting for an independent homeland for Sri Lanka's minority Tamils, had the right to express their political views. "We are aware of the problems of terrorism that exist in this country," he said after meeting Sri Lankan President Chandrika Kumaratunga and Foreign Minister Lakshman Kadirgamar. "We have a great sympathy for the people of Sri Lanka because we also, in Britain, are victims of terrorism. We also have a terrorist organisation that has destroyed innocent lives and brought damage and destruction to innocent people in pursuit of their political objectives." The Sri Lankan government says more than 50,000 people have died in the 13-year-old war between the LTTE and the army. Colombo has so far not outlawed the LTTE, wanting to retain the option of eventually resuming peace talks with the rebels. Colombo officials said, however, that hardliners in the government and military were pushing for a ban, hoping it would curb the group's international propaganda and funding. Hardliners noted that Western governments had told Sri Lanka they could not crack down on rebel activities on their soil as long as the LTTE did not break their laws and remained a legal organisation in Sri Lanka. But Rifkind said Britain respected political freedom and ruled out any crackdown on the LTTE's political activities even if the Sri Lankan government did ban the group. The Tigers have their international propaganda headquarters in London. "There are in London many people from many countries around the world who have their political differences with their governments," Rifkind said. Tamils, like anyone from any country, must obey British law that prohibits support of terrorism. "If they simply express political views, that is their right," Rifkind said. "If they have a building or an office the world cannot prevent them from doing so." He added: "We have to act in London according to British law, and the law acts as a result of a decision taken by individuals, not by organisations. Organisations are made up of people. We cannot take an organisation to court," Rifkind added. "Terrorism in an international evil, and I believe there is a common responsibility of all democratic governments who believe in a rule of law to cooperate in eradicating terrorism wherever it exists." He said Colombo's efforts "to eliminate terrorism do deserve the support of the international community," adding however that only individual violators could be punished in his country. The British minister said London welcomed Sri Lanka's efforts to find a peaceful solution to the ethnic war. "A democracy in Sri Lanka, like a democracy in the United Kingdom, instinctively looks for a political resolution while at the same time fighting resolutely against terrorism and they need support," he said. The Sri Lankan government has said it wants to present a devolution package to parliament next year to allow greater automomy to the Tamil minority in the country's north and east. 6755 !GCAT !GPRO Mother Teresa, recovering from malaria and heart trouble, spent half an hour praying in the intensive care ward in her hospital on Saturday, saying prayers worked like vitamins. Doctors attending on the 86-year old Roman Catholic nun told reporters on Saturday that her progress, including short walks in the room, was steady but slow. "She had a half-hour prayer this morning," said Dr S.K. Sen, one of six doctors treating her at a Calcutta hospital since August 20. "This is the vitamin for me," he quoted Mother Teresa as saying after the prayers. "The moment she sees anyone coming into her room she starts talking," he said. "She is in high spirits." But the Nobel Laureate was still weak and suffering from irregular heartbeat, forcing the doctors to delay plans to shift her to a private room. "We will see her fully mobile within the intensive care unit, then we will shift her," Sen said. "Mother Teresa is showing slow and steady improvement," her medical bulletin said on Saturday. "She is being made ambulatory within her room in the intensive coronary care unit. Her cardiac irregularity is still there and she is stil receiving chest physiotherapy." It said Mother Teresa was put on a normal diet from Friday. Sen said the Alabanian-born nun may continue to suffer from irregular hearbeat for two more weeks. Doctors had hoped to move Mother Teresa, who was awarded the Nobel peace prize for her work with the destitute and dying in Calcutta's slums, to a private room earlier this week. 6756 !GCAT !GDIP !GPOL !GVIO Britain will allow political activities of Sri Lanka's Tamil Tiger rebels even if Colombo bans the group in its own country, British Foreign Secretary Malcolm Rifkind said on Saturday. Colombo officials said hardliners in the government and military were pushing for the ban hoping it would curb the rebels' international propaganda and funding. Rifkind, in Colombo as part of a five-nation Asian trip, told a news conference that Britain allowed activities of different political groups that criticise their governments. Asked if Britain would curb political acitivites of Sri Lanka's Liberation Tigers of Tamil Eelam (LTTE) if Colombo outlawed it as a terrorist group, he said: "We have to act in London according to British law and the law acts as a result of a decicion taken by individuals not by organisations. Organisations are made up of people. We cannot take an organisation to court." The LTTE, which fights for an independent homeland for minority Tamils in north and east of the island coutry, bases its international propaganda headquarters in London. 6757 !CCAT !GCAT !GDIS A Bangladeshi ship with 750 tonnes of imported cement sank in the Chittagong port channel after colliding with another local vessel, port officials said on Saturday. They said the accident occurred early on Friday when MV Momin, a lightering vessel, was returning to a jetty after loading the cargo from the 182-meter long Bahama-flag carrier Corinthian Trader anchored in the Bay of Bengal. The other ship, MV Masud-1, was partially damaged and remained afloat. The Corinthian Trader came to the Bangladesh coast with 20,000 tonnes of cement from Singapore on August 24. The port officials said the ship has yet to be salvaged and has not created any problems for navigation through the channel. 6758 !C17 !C34 !CCAT !G15 !G157 !GCAT Volkswagen AG and the German state of Saxony moved closer to a showdown with the European Union over planned industrial subsidies on Saturday as the EU's competition commissioner warned legal action was imminent. At issue are 91 million marks of subsidies that the state of Saxony has granted Volkswagen to build two plants -- a grant which exceeds 540 million marks worth of subsidies that the EU approved in June. Karl Van Miert, the EU's competition czar, told the daily Hannoverscher Allgemeine Zeitung he would take the German pair before the European Court of Justice if they did not agree to the EU's decision by Wednesday. And European Union President Jacques Santer said the pair must "return to legality" but hinted that a compromise was possible to avert a legal battle between the EU and Europe's largest economy. Volkswagen and Saxony claim the extra aid is allowed under Treaty of Rome rules on German unification, but the EU claims the grant will tilt the playing field of European car makers in Volkswagen's favour. Although both side are sticking to their guns, the EU officials said they hoped to avert a legal battle. "We want an amicable agreement," Santer told the magazine Der Spiegel. "A confrontation is not in the interest of either party." The EU's competition commissioner also offered an olive branch. "We can do without a temporary order if Saxony's breach of the law is neutralised," Van Miert said in the interview, suggesting that funds provided so far be frozen. But Volkswagen, which has threatened to take its investment elsewhere, has refused to back down. Chairman Ferdinand Piech said on Tuesday, "We believe that the decision by the premier of Saxony to grant subsidies to Volkswagen is a decision for the people and for jobs in Saxony." Van Miert said talks between the federal German government and the EU to break the impass are continuing, adding it was a good sign that the federal government has not filed a counter complaint against the EU as Saxony has done. German Economics Minister Guenter Rexrodt has, however, indicated he stands behind VW and Saxony, saying the car maker deserves the full allotment of subsidies. Saxony and the European Commission locked horns in June when the Commission approved only 540 million marks of a proposed 780 million marks in subsidies for VW to build two plants in the formerly communist east German state of Saxony saxony premier Kurt Biedenkopf has defended the subsidy plans, saying that 23,000 jobs depend on it and that the state needs such help to catch up with west Germany. Saxony was one of the most industrialised regions in Germany before World War Two, and suffered greatly under the communist east German government. Unemployment there now is near 15 percent. The debate is turning on Article 92 of the Treaty of Rome which says that subsidies are acceptable in regions affected by the former separation of Germany. Brussels, however, contends that the cash grant gives VW an unfair advantage in a European car market already suffering from over capacity. Van Miert is showing no sign of giving ground. "There are many Biedenkopfs in Europe," he said. 6759 !G15 !G159 !GCAT Thousands of bikers from all over Europe rode past European Union buildings in Brussels on Saturday to protest against plans for tighter motorcycle laws. If passed, the new EU laws will limit engine noise and make it illegal to change manufacturers' specifications, outlawing the customisation favoured by bike enthusiasts. "They want to stop our machines from making sound," Belgian Patricia Godelieve, owner of a Honda Shadow, told Reuters, screaming above the thundering noise of fellow bikers' machines. "This is my bike, this is how I like it," said Belgian Alain Barbieux, a poodle peeking out of his leather jacket. His 1400 cc customised Suzuki has an extended front-fork and extra-wide handlebars, his helmet is a non-authorized model. Simon Milward, general secretary of the Federation of European Motorcyclists (one of the organisers of the demonstration) said that 15,000 bikers had attended the rally. Police estimated their number at 10,000. Traffic in central Brussels was disrupted all afternoon by the demonstration. Most of the bikers rode standard bikes, some had custom-made tanks or elongated front-forks, while a few two- or three- wheelers looked like they came straight out of a Mad Max-movie. "We are fighting for the right to wear what we want," said German biker Oliver Walter, straddling a standard 900 cc BMW and wearing a colourful racing suit. Walter said he was against plans to oblige all bikers to wear fluorescent clothes. Another biker from Austria atop a very un-standard-looking black machine with two wheels said he just wanted to get rid of "the damm helmet". "We do not want (the EU bureaucrats) to tell us how we move about," French Harley-Davidson rider Jean-Marie Mignolet said. A final decision on the new rules is expected in October after a meeting between the European Parliament and the EU's decision-making Council of Ministers. The European Commission argues that the measures are needed on environmental and health grounds. "We are not against motorcycles in principle," a spokeswoman said earlier. 6760 !GCAT !GSPO Colombia beat Chile 4-1 (halftime 3-0) in a South American World Cup qualifying match on Sunday. Scorers: Colombia - Faustino Asprilla (3rd, 31st and 47th minutes), Jorge Bermudez (43rd) Chile - Ivan Zamorano (55th minute, penalty) Attendance: 50,000 South American group standings (tabulate under played, won, drawn, lost, goals for, goals against, points) Colombia 4 3 1 0 9 3 10 Ecuador 4 3 0 1 8 5 9 Argentina 4 1 2 1 4 4 5 Bolivia 3 1 1 1 7 4 4 Paraguay 3 1 1 1 3 2 4 Chile 3 1 1 1 6 6 4 Uruguay 3 1 0 2 3 5 3 Peru 4 0 3 1 2 5 3 Venezuela 4 0 1 3 2 10 1 Note: top four qualify for the World Cup finals in France. Brazil qualify automatically as holders. 6761 !GCAT !GSPO Daniel Komen of Kenya made it third time lucky on Sunday when he shattered Noureddine Morceli's 3,000 metres world record by nearly five seconds at an international meeting. The 20-year-old Kenyan, who failed to qualify for the Atlanta Olympics, clocked seven minutes 20.67 seconds, breaking Morceli's time of 7:25.11 set two years ago in Monte Carlo. The Kenyan failed to qualify for the Olympics but has been on blistering form on the grand prix circuit since and was only 0.05 of a second outside Morceli's mark in Monaco last month. He then clocked 7:25.87 at the Brussels grand prix on August 23, the third fastest time in history, with Morceli finishing well back in sixth place. Kenyan David Kisang led the field through 1,000 metres in 2:25.89 before Komen took the lead, clocking 4:53.18 at the 2,000 mark and carrying on to finish more than 20 seconds ahead of his nearest rival. Kenyas's Shem Kororia, was second in 7:43.17 with Italian Gennaro di Napoli third in 7:46.39. Morceli, the Olympic and world 1,500 metres champion, said he would be back. "Komen is young and very good and deserves today's result," Morceli told reporters. "I'm sure he has the means to do other things, but I've still got something to say." Morceli, who holds the world 1,500 metre and mile records, comfortably won the 1,500 in 3:29.99 ahead of Burundi's Olympic 5,000 metres champion Venuste Niyongabo. Kenyan-born Wilson Kipketer, who runs for Denmark, set the third fastest time in history in the 800 metres clocking one minute 41.83 seconds. 6762 !GCAT !GSPO QUITO, Sept 1 (Ecuador) - Ecuador took another step towards their first World Cup when they beat Venezuela 1-0 on Sunday to record their third win in four qualifying games. Captain Alex Aguinaga scored the winner in a game featuring the only two South American nations who have never played in the World Cup tournament. Despite three more precious points, Ecuador were jeered off the field by a 45,000 crowd who had expected a higher score against South American's weakest team who have taken only one point from their four games so far. Aguinaga snapped up a rebound following a shot by Brazilian-born Gilson de Souza in the fourth minute but Ecuador were unable to add to their tally. Ecuador, coached by Colombia's former national team boss Francisco Maturana, have already beaten Argentina at home in their impressive start and have a good chance of finishing in the top four of the nine-team group. But they still have a long way to go and questions were asked when they lost 4-1 defeat by Chile in Santiago last month on their only venture outside Ecuador so far. Ecuador - Carlos Morales; Wagner Rivera, Ivan Hurtado, Maximo Tenorio, Luis Capurro; Jorge Diaz (Alfonso Obregon, 79th minute), Hector Carabali, Alex Aguinaga, Jose Garcia (Angel Fernandez, 46th); Gilson de Souza, Eduardo Hurtado. Venezuela - Rafael Dudamel; Luis Filosa, William Gonzalez, Edson Tortolero, David Macintosh; Sergio Hernandez, Jess Valiente (Gabriel Urdaneta, 40th), Luis Vera, Gabriel Miranda; Juan Socorro (Luis Hernndez, 79th), Juan Garcia. 6763 !GCAT !GSPO Florian Rousseau of France completed a unique double when he won the world sprint cycling championship on Sunday only five weeks after taking the Olympic gold medal in the 1-km time trial at Atlanta. On the final day of the five-day championships, Rousseau defeated 1994 sprint champion Marty Nothstein of the United States 2-0 in the best-of-three final. The Frenchman said: "I didn't expect to win. The last time I beat Nothstein was two years ago at the Bercy track in Paris." The American appeared to be drained by a three-race battle to overcome the defending champion Darryn Hill of Australia in the semifinals. Hll crossed the line first in two matches but was relegated to second place for rough riding in the last 200 metres. "I think I got robbed, I always seem to get bad decisions against Marty. I'll be out to beat him in next year's worlds on my home track in Perth," he said. After losing the final Nothstein said: "I felt good thanks to my win in the keirin earlier in the series, but today I could not find my power. The motor was not there I was riding on pure heart and determination." Marion Clignet completed a double for France, beating Lucy Tyler-Sharman of Australia in the women's individual pursuit final. Clignet, Tyler-Sharman and third-placed Antonella Bellutti all broke the world 3,000 metres record during the event. Clignet has adopted the streamlined "Superman" riding style, developed last year by Britain's ex-world champion Graeme Obree. "It made an amazing difference, as much as four or five seconds, I got more power and did not move about so much on my bike," Clignet said. A countback was needed to decide the 40-kms points race title, won by Rossello Llaneras of Spain from Michael Sandstod of Denmark. Llaneras and Sandstod lapped the field with an early attack, and spent the rest of the race battling for sprint points. Neither rider succeeded in gaining an advantage and they finished level on 29 points. Llaneras was awarded the gold medal, becoming the first Spanish winner of the title, thanks to scoring more lap wins than Sandstod. Defending champion Silvio Martinello of Italy missed the breakaway and had to settle for the bronze medal, one lap in arrears, despite having the highest points score. France, winners of this year's grand prix-style World Cup competition, confirmed their status as the world's most successful track nation, winning four of the 12 championships here. Italy and Australia took two each, with the rest going to Britain, Russia, Spain and the United States. 6764 !GCAT !GSPO Results of the final round of the world 250cc motocross championships on Sunday: First race 1. Stefan Everts (Belgium) Honda 2. Marnicq Bervoets (Belgium) Suzuki 3. Frederic Bolley (France) Kawasaki 4. Pit Beirer (Germany) Honda 5. Tallon Vohland (U.S.) Kawasaki 6. Yves Demaria (France) Yamaha Second race 1. Bolley 2. Bervoets 3. Everts 4. Demaria 5. Beirer 6. Werner Dewit (Belgium) Suzuki Overall on day: 1. Bolley 35 points 2. Everts 35 3. Bervoets 34 4. Beirer 24 5. Demaria 23 6. Dewit 19 Final provisional standings (after 13 rounds): 1. Everts 390 points 2. Bervoets 381 3. Vohland 346 4. Demaria 253 5. Bolley 240 6. Andrea Bartolini (Italy) Yamaha 230 6765 !GCAT !GSPO Wicketkeeper Rashid Latif kept his head while wickets tumbled to steer Pakistan to a two-wicket victory over England in the third and final one-day international at Trent Bridge on Sunday. England won the series 2-1 after losing the three-test series 2-0. Rashid calmly square cut Adam Hollioake for four from the second ball of the final over then chipped the Surrey all-rounder into vacant territory for the winning run with two balls to spare. He finished on 31 not out after Hollioake had threatened to steal the match for England by taking four quick wickets as Pakistan chased England's 246 all out from their 50 overs. "I would like to pay tribute to Rashid," said Pakistan captain Wasim Akram. "He played very well." Hollioake took four for 23 from 6.5 overs for England in Saturday's 107-run win at Edgbaston and was on course to repeat his match-winning performance on Sunday before Rashid took control. "He bowled well in two pressure situations," said England captain Mike Atherton. "He dragged us back into the game today." Warwickshire opener Nick Knight hit his second hundred in two days to provide the backbone for the England innings. Knight, who scored his maiden test century in the recent series against the Pakistanis, hit a fine 113 in the second one-day match on Saturday. On Sunday he capped that and completed a superb weekend by carrying his bat for 125 not out from 145 balls. Knight played with brisk assurance despite seeing wickets fall regularly at the other end and in the 42nd over he pushed occasional left-arm spinner Asif Mujtaba through midwicket for two and punched the air in celebration. His century came from 120 balls and included nine fours. Pakistan made a brisk start in reply with Saeed Anwar and Shahid Anwar putting on 93 runs for the first wicket and singling out left-arm paceman Allan Mullally for particular punishment. Saeed was eventually out for the top score of 61 and it was then left to Ijaz Ahmed (59) to keep the runs coming as the remainder of the Pakistan middle order lost their way against Hollioake's medium pace. 6766 !GCAT !GSPO Pakistan beat England by two wickets to win the third and final one-day cricket international at Trent Bridge on Sunday. Scores: England 246 all out in 50 overs (N.Knight 125 not out), Pakistan 247-8 off 49.4 overs (Ijaz Ahmed 59). England won the series 2-1. 6767 !GCAT !GSPO Results from an international meeting on Sunday: Men's 3,000 metres 1. Daniel Komen (Kenya) seven minutes 20.67 seconds (world record) 2. Shem Kororia (Kenya) 7:43.17 3. Gennaro di Napoli (Italy) 7:46.39 Men's 1,500 metres 1. Noureddine Morceli (Algeria) 3:29.99 2. Venuste Niyongabo (Burundi) 3:31.01 3. Laban Rotich (Kenya) 3:31.06 Men's 800 metres 1. Wilson Kipketer (Denmark) 1:41.83 2. David Kiptoo (Kenya) 1:43.42 3. Philip Kibitok (Kenya) 1:43.55 Men's 400 metres 1. Davis Kamoga (Uganda) 44.57 2. Calvin Harrison (U.S.) 45.22 3. Iwan Thomas (Britain) 45.23 Men's 100 metres 1. Osmond Ezinwa (Nigeria) 10.06 2. Davidson Ezinwa (Nigeria) 10.14 3. Deji Aliu (Nigeria) 10.17 Men's 200 metres 1. Geir Moen (Norway) 20.17 2. Davidson Ezinwa (Nigeria) 20.35 3. Claus Hirsbro (Denmark) 20.44 Men's 400 metres hurdles 1. Torrance Zellner (U.S.) 49.27 2. Rusian Mashchenko (Russia) 49.38 3. Jon Ridgeon (Britain) 49.45 Men's pole vault 1. Igor Trandenkov (Russia) 5.70 metres 2. Tim Lobinger (Germany) 5.60 3. Pyotr Bochakaryov (Russia) 5.60 Men's triple jump 1. Yoelvis Quesada (Cuba) 17.17 2. Gennadiy Markov (Russia) 16.81 3. Charles-Michael Freidek (Germany) 16.24 Men's shot put 1. Paolo dal Soglio (Italy) 21.00 2. Corrado Fantini (Italy) 20.78 3. Manuel Martinez (Spain) 20.12 Women's 100 metres 1. Irina Privalova (Russia) 11.00 2. Juliet Cuthbert (Jamaica) 11.09 3. Chandra Sturrup (Bahamas) 11.11 Women's 1,500 metres 1. Leah Pells (Canada) 4:04.39 2. Anna Brezrezinska (Poland) 4:04.60 3. Mayte Zuniga (Spain) 4:09.89 Women's 3,000 metres 1. Sonia O'Sullivan (Ireland) 8:50.14 2. Sally Barsosio (Kenya) 8:50.71 3. Pauline Konga (Kenya) 8:52.21 Women's long jump 1. Inessa Kravets (Ukraine) 6.99 2. Chioma Ajunwa (Nigeria) 6.95 3. Shana Williams (U.S.) 6.77 Women's javelin 1. Xiomara Rivero (Cuba) 66.14 2. Oksana Ovchinnikova (Russia) 64.24 3. Isel Lopez (Cuba) 63.14 6768 !GCAT !GSPO Daniel Komen, who has twice been within a fraction of a second of Noureddine Morceli's world 3,000 metres record, shattered the mark by nearly five seconds on Sunday. The 20-year-old Kenyan clocked seven minutes 20.67 seconds for the non-championship event at an international meeting to break the Algerian's two-year-old mark of 7:25.11. Kenyan David Kisang took the field through 1,000 metres in 2:25.89 before Komen took the lead, clocking 4:53.18 at the 2,000 mark and carrying on to finish more than 20 seconds ahead of his nearest rival. Kenyas's Shem Kororia, was second in 7:43.17 with Italian Gennaro di Napoli third in 7:46.39. Komen, who did not make the Kenyan team for the Atlanta Olympics, was only 0.05 of a second outside Morceli's mark in Monaco last month. He clocked 7:25.87 at the Brussels grand prix on August 23, the third fastest time in history, with Morceli finishing well back in sixth place. In the previous week Komen came close to breaking Ethiopian Haile Gebreselassie's world 5,000 metres record, clocking the second fastest time in history of 12:45.09 at the Zurich grand prix. 6769 !GCAT !GSPO Kenyan Daniel Komen set a world men's 3,000 metres record on Sunday when he clocked seven minutes 20.67 seconds at an international meeting here. The previous mark of 7:25.11 was set by Algerian Noureddine Morceli in Monte Carlo on August 2, 1994. 6770 !GCAT !GSPO Scoreboard of the third and final one-day cricket international between England and Pakistan on Sunday: England N.Knight not out 125 A.Stewart c and b Wasim Akram 3 M.Atherton c Shahid Nazir b Wasim Akram 30 M.Maynard b Shahid Nazir 24 G.Lloyd c Shadab Kabir b Saqlain Mushtaq 15 R.Irani b Shahid Nazir 0 A.Hollioake c Ijaz Ahmed b Saqlain Mushtaq 13 D.Gough b Wasim Akram 5 R.Croft b Waqar Younis 0 P.Martin run out 6 A.Mullally b Waqar Younis 2 Extras (b-2 lb-8 w-9 nb-4) 23 Total (50 overs) 246 Fall of wickets: 1-10 2-108 3-137 4-139 5-178 6-216 7-226 8-231 9-240. Bowling: Wasim Akram 10-1-45-3, Waqar Younis 10-1-49-2, Shahid Nazir 10-0-47-2, Asif Mujtaba 5-0-27-0, Saqlain Mushtaq 10-0-35-2, Aamir Sohail 5-0-33-0. Pakistan Saeed Anwar b Martin 61 Shahid Anwar lbw b Martin 37 Ijaz Ahmed c Lloyd b Gough 59 Aamir Sohail b Croft 29 Shadab Kabir c Irani b Hollioake 0 Asif Mujtaba b Hollioake 2 Wasim Akram lbw b Hollioake 5 Rashid Latif not out 31 Saqlain Mushtaq c Maynard b Hollioake 12 Waqar Younis not out 0 Extras (lb-5 w-6) 11 Total (for 8 wickets, 49.4 overs) 247 Fall of wickets: 1-93 2-114 3-177 4-182 5-187 6-199 7-219 8-240. Did Not Bat: Shahid Nazir. Bowling: Gough 10-1-43-1, Mullally 9-0-66-0, Martin 10-0-38-2, Croft 10-0-38-1, Irani 2-0-12-0, Hollioake 8.4-0-45-4. Result: Pakistan won by two wickets. First match: England won by five wickets Second: England by 107 runs. England won series 2-1. 6771 !GCAT !GSPO Walter Swinburn, who suffered terrible injuries following a bad racefall in Hong Kong in February, celebrated his first group one win since returning to the saddle last month in Germany on Sunday. The triple Epsom Derby winning jockey guided the English-trained, Pilsudski, the outsider of seven at 11-1, to a three quarters of a length victory in the Grosser Preis von Baden over a mile and a half (2.4 km). Pilsudski equalled the track record with a delighted Swinburn saying: "He is a very good and brave horse and the beauty of him is that he can act on any ground." Second in the big Baden Baden event was last year's winner, Germany, ridden by Frankie Dettori, with Sunshack, doing the best of the French duo a length and three quarters further back in third. Dermot Weld's Definite Article, fourth on a previous visit to Germany, again had to settle for the same place in a cosmopolitan field, with Agnelli, Protektor and Poliglote completing the finishing order. 6772 !GCAT !GSPO BADEN BADEN, Germany, Sept 1 - Result on Sunday of the group one Grosser Preis Von Baden for three-year-olds and upwards run over 1 1/2 miles (2.4 kms): 1. Pilsudski (Walter Swinburn) 2. Germany (Frankie Dettori) 3. Sunshack (Sylvain Guillot) 4. Definite Article (Michael Kinane) Seven ran. Distances: Three quarters of a length, a length and three quarters, a length and a quarter. Winner owned by Lord Weinstock and the estate of the late Simon Weinstock, trained by Michael Stoute in England. Value to the winner: $227,000. Tote (includes a 10 mark stake): Win 120; places 21, 13, 14. 6773 !GCAT !GSPO Results at the world track cycling championships on Sunday: Women's individual pursuit semifinals (over 3,000 metres): Lucy Tyler-Sharman (Australia) 3:33.886 beat Antonella Bellutti (Italy) 3:33.917. Z Marion Clignet (France) caught and eliminated Natalia Karimova (Russia) after 2:41.504. Bellutti takes the bronze medal as fastest losing semifinalist. Men's sprint championship semifinals (best of three): Florian Rousseau (France) 10.914 seconds and 11.208 seconds (for last 200 metres) beat Roberto Chiappa (Italy) 2-0. Marty Nothstein (U.S.) 10.878/10.959 beat Darryn Hill (Australia) 10.825, 2-1. Women's individual pursuit final (over 3,000 metres): Marion Clignet (France) 3:31.023 beat Lucy Tyler-Sharman (Australia) 3:36.100. Men's sprint final (best of three matches): Florian Rousseau (France) 10.790 seconds and 10.820 seconds (for last 200 metres) beat Marty Nothstein (U.S.) 2-0. Third place: Darryn Hill (Australia) 10.959/11.081 beat Roberto Chiappa (Italy) 2-0. World points race championship (40 kms) 1. Rossello Llaneras (Spain) 29 points (47 mins 19.912 seconds) 2. Michael Sandstod (Denmark) 29 (Llaneras wins on countback of sprint laps won) one lap behind 3. Silvio Martinello (Italy) 45 4. Juan Curuchet (Argentine) 14 5. Jose Velasquez (Colombia) 7 two laps behind 6. Marco Villa (Italy) 20 7. Bruno Risi (Switzerland) 19 8. Christophe Capelle (France) 17 9. Tomoya Kano (Japan) 13 10. Franz Stocher (Austria) 11 11. Vasyl Iakovlev (Ukraine) 10 12. Rob Hayles (Britain) 6 13. Andreas Beikirch (Germany) 2 three laps behind 14. Peter Pieters (Netherlands) 4 6774 !GCAT !GSPO World championship-leading Briton Damon Hill will leave the Williams motor racing team at the end of this season, it was confirmed on Sunday. Team owner Frank Williams said in a brief statement: "I can confirm that the Williams-Renault team will not be using Damon Hill's services in 1997. His replacement will be made known in due course." Hill's manager and lawyer Michael Breen told a news conference in London that the Williams team had ended contract discussions with the 35-year-old Englishman abruptly last Wednesday. Breen said both he and Hill were surprised and disappointed by the news. Sources in Germany and Britain told Reuters on Saturday and again on Sunday that Hill's seat with the championship-winning team had already been filled for next season by rising German star Heinz-Harald Frentzen. Frentzen, currently with Sauber, has not won a Grand Prix but is believed to be a driver of potential who is admired by many Germans. It is thought that Williams are keen to use German BMW engines in 1998 when their current deal with Renault ends. The news that Hill was effectively being dumped by Williams in the season when he is expected to win his first drivers' championship stunned many observers but left hardened veterans in Formula One recalling the Williams teams' handling of many similar situations in the past. In 1992, Briton Nigel Mansell secured the drivers' championship before being replaced in the team by Frenchman Alain Prost. Prost himself won the title in 1993 only to find he was being replaced the following season by Brazilian Ayrton Senna. Breen pointed to Hill's excellent record with Williams which has included 20 Grand Prix victories, 19 fastest laps and 18 pole positions. "Those facts speak for themselves and I am sure that many team owners will be interested in taking him on," said Breen. It seemed certain that Frentzen was approached at the same time as Hill was told his agreement with Williams was little more than a formality. Breen said he had received many calls from interested parties and stressed that Hill still had "a lot to offer in Formula One racing," because he was both an outstanding racing driver and a first-class test and development driver. Hill now looks likely to move to the Peugeot-powered Jordan team on a two-year contract but may also interest newcomers Stewart Grand Prix, owned by his father's old friend Jackie Stewart. Breen said Hill was as disappointed for the team as he was for himself as they had been together for six years and he wanted to defend his title in a Williams with a number one on the nose of his car. Breen said: "To set the record straight, we only began negotiations with Frank Williams in mid-August. Obviously, there were several points put on the table. "On Wednesday, Frank called to withdraw from discussing Damon's contract any further, giving no reason for his decision." Breen gave the clear impression that he believed there were no financial or other problems in his dealings with Williams and that the only obstacle had been that the team owner had already committed himself to another driver. "Personally, I think we could have done a deal if there was a deal to be done," said Breen. Hill, 13 points ahead of Williams team mate Jacques Villeneuve at the top of the championship standings, was not at the news briefing. He remained at home in Dublin but is expected to give his thoughts on his future when he arrives at Monza for the Italian Grand Prix on Thursday. 6775 !GCAT !GSPO Heavy rain on the 17th lap stopped the Imola 500cc motorcycling Grand Prix on Sunday, giving Australian Michael Doohan victory in the 500th championship race since 1949. The sudden storm literally cast a cloud over what was shaping up to be a gripping wheel-to-wheel battle between the world champion and Honda team mate Alex Criville. Young Spaniard Criville had taken the previous two grands prix and was just 0.104 of a second behind Doohan on the 16th lap, which counted as the final result. Race rules state that a grand prix must be two-thirds completed before a victory can be given, with the results being counted from the lap before the stoppage. Otherwise, the race is re-started with wet tyres. Sunday's grand prix was supposed to have been over 24 laps, meaning that the race would have had to restart had the torrential downpour arrived just one lap earlier. "Even before it started I was worried about the clouds coming," said Doohan. "I had heard it was raining in Milan and the wind started to blow five laps before the stop. "I'm sure that it was blowing Alex around a lot because it was blowing me about quite a bit," he said. The result left Doohan 57 points clear of Criville in the championship with just three races left. Doohan, whose qualifying time on Friday gave him pole position when rain on Saturday ruled out any attempt to better it by his rivals, led the race from start to finish. Criville, who had to start on the second row after a high-speed fall on Friday, snatched third place at the green light and swiftly moved up into Doohan's slipstream on the second lap by overtaking Japan's Tadayuki Okada. Okada, in the same team as the two leaders but on a different bike, was third at the end while France's Jean-Michel Bayle was fourth -- his best in his first season. "We were getting faster and faster," said Doohan, who predicted an even closer race if it had continued. The two men played cat-and-mouse as the race progressed, Doohan occasionally pulling away slightly for a lap and then being reeled in again by the start of the next. "I upped the pace with 10 laps to go and would have done so again with five left," said Doohan. "I think I had a little in reserve and he hadn't come past yet." None of the riders had raced before at Imola, which was returning to the Grand Prix circuit after eight years with the track redesigned after Formula One drivers Ayrton Senna and Roland Ratzenberger died in crashes here in 1994. Certainly, none of the riders were complaining about the decision to stop the race on Sunday. "We could have kept running on for a lap," said Doohan, who slowed and raised his left hand to warn Criville as the downpour started and marshalls flagged down riders. "One or all of us could have crashed and the race would still have been taken back a lap anyway." "It's better to stop and restart than to try and play games with 200 horsepower on a wet track with slicks. Doohan dedicated his win to race doctor Claudio Costa, son of the founder of Imola racetrack, who treated the Australian after a bad crash in the Netherlands in 1992. Italian Max Biaggi, two time 250cc champion, fell at Piratello corner in the 11th lap of a 250 race on by Germany's Ralf Waldmann on a Honda. The result blew the world championship wide open again, with Biaggi leading by 12 points. The 125cc championship also tightened when overall leader Haruchika Aoki went out on the 15th lap, with compatriot Masaki Tokudome winning and cutting Aoki's lead to three points. There are three races remaining this season. 6776 !GCAT !GSPO Warwickshire opener Nick Knight hit his second hundred in two days as England reached 246 all out from their 50 overs in the third one-day international against Pakistan at Trent Bridge on Sunday. Knight, who scored his maiden test century in the recent series against the Pakistanis, hit a fine 113 in the second one-day match on Saturday. On Sunday, though, he capped that and completed a superb weekend when he carried his bat for 125 not out from 145 balls. Opening the innings, Knight played with brisk assurance despite seeing wickets fall regularly at the other end. In the 42nd over he pushed the occasional left-arm spinner Asif Mujtaba through midwicket for two and punched the air in celebration. His century came from 120 balls and included nine fours. Captain Mike Atherton, batting at number three, had to retire hurt on 14 when he was struck a painful blow on his right hand by Shahid Nazir's second delivery. He went to hospital for an x-ray and then returned to the crease at the fall of the fifth wicket when Adam Hollioake hit a ball from Saqlain down Ijaz Ahmed's throat at deep midwicket. Atherton went on to make 30 from 48 balls before he holed out a delivery from Wasim to Nazir at mid-off. Otherwise England's batsmen failed to capitalise on good starts. After the early dismissal of Alec Stewart, caught and bowled by Wasim Akram, Matthew Maynard (24), Graham Lloyd (15) and Hollioake (13) all got themselves in but were unable to go on. Maynard was beautifully bowled by Nazir, who later removed Ronnie Irani for a duck in the same fashion, and Lloyd skied a leading edge to Shadab Kabir as he tried to clip Saqlain over midwicket. Wasim put in two excellent spells to finish with three for 45 from his 10 overs and he also ran out Peter Martin off his own bowling. England lead the three-match series 2-0. 6777 !GCAT !GSPO England scored 246 all out from their 50 overs in the third and final one-day international against Pakistan at Trent Bridge on Sunday. 6778 !GCAT !GSPO World championship-leading Briton Damon Hill will leave the Williams motor racing team at the end of this season, it was confirmed on Sunday. Team owner Frank Williams said in a brief statement: "I can confirm that the Williams-Renault team will not be using Damon Hill's services in 1997. His replacement will be made known in due course." Hill's manager and lawyer Michael Breen told a news conference in London that the Williams team had ended contract discussions with the 35-year-old Englishman abruptly last Wednesday. Breen said both he and Hill were surprised and disappointed by the news. Sources in Germany and Britain told Reuters on Saturday and again on Sunday that Hill's seat with the championship-winning team had already been filled for next season by rising German star Heinz-Harald Frentzen. Frentzen, currently with Sauber, has not won a Grand Prix but is believed to be a driver of potential who is admired by many Germans. It is thought that Williams are keen to use German BMW engines in 1998 when their current deal with Renault ends. The news that Hill was effectively being dumped by Williams in the season when he is expected to win his first drivers' championship stunned many observers but left hardened veterans in Formula One recalling the Williams teams' handling of many similar situations in the past. In 1992, Briton Nigel Mansell secured the drivers' championship before being replaced in the team by Frenchman Alain Prost. Prost himself won the title in 1993 only to find he was being replaced the following season by Brazilian Ayrton Senna. Breen pointed to Hill's excellent record with Williams which has included 20 Grand Prix victories, 19 fastest laps and 18 pole positions. "Those facts speak for themselves and I am sure that many team owners will be interested in taking him on," said Breen. It seemed certain that Frentzen was approached at the same time as Hill was told his agreement with Williams was little more than a formality. Breen said he had received many calls from interested parties and stressed that Hill still had "a lot to offer in Formula One racing," because he was both an outstanding racing driver and a first-class test and development driver. Hill now looks likely to move to the Peugeot-powered Jordan team on a two-year contract but may also interest newcomers Stewart Grand Prix, owned by his father's old friend Jackie Stewart. Breen said Hill was as disappointed for the team as he was for himself as they had been together for six years and he wanted to defend his title in a Williams with a number one on the nose of his car. Breen said: "To set the record straight, we only began negotiations with Frank Williams in mid-August. Obviously, there were several points put on the table. "On Wednesday, Frank called to withdraw from discussing Damon's contract any further, giving no reason for his decision." Breen gave the clear impression that he believed there were no financial or other problems in his dealings with Williams and that the only obstacle had been that the team owner had already committed himself to another driver. "Personally, I think we could have done a deal if there was a deal to be done," said Breen. Hill, 13 points ahead of Williams team mate Jacques Villeneuve at the top of the championship standings, was not at the news briefing. He remained at home in Dublin but is expected to give his thoughts on his future when he arrives at Monza for the Italian Grand Prix on Thursday. 6779 !GCAT !GSPO Australian world champion Michael Doohan won the San Marino 500cc motorcycle Grand Prix on Sunday after rain stopped the race in the 17th lap. Doohan's Spanish Honda team mate Alex Criville was second and Japan's Tadayuki Okada was third. 6780 !GCAT !GSPO Leading results at the San Marino motorcycle Grand Prix on Sunday: 125cc (21 laps, 102.732 km): 1. Masaki Tokudome (Japan) Aprilia 42 minutes 47.711 seconds (average speed 144.033 kph) 2. Emilio Alzamora (Spain) Honda 42:48.085 3. Jorge Martinez (Spain) Aprilia 42:48.931 4. Garry McCoy (Australia) Aprilia 42:51.292 5. Valentino Rossi (Italy) Aprilia 42:56.636 6. Tomomi Manako (Japan) Honda 43:02.907 7. Ivan Goi (Italy) Honda 43:05.186 8. Yoshiako Katoh (Japan) Yamaha 43:12.286 9. Manfred Geissler (Germany) Aprilia 43:15.230 10. Frederic Petit (France) Honda 43:17.316 11. Noboru Ueda (Japan) Honda 43:18.732 12. Kazuto Sakata (Japan) Aprilia 43:27.043 13. Jaroslav Hules (Czech Republic) Honda 43:28.161 14. Dirk Raudies (Germany) Honda 43:35.200 15. Herri Torrontegui (Spain) Honda 43:35.678 Fastest lap: Rossi (lap 17), 2:00.362, average speed 146.319 kph. World championship standings (after 12 rounds): 1. Aoki 164 points 2. Tokudome 161 3. Manako 135 4. Alzamora 125 5. Stefano Perugini (Italy) Aprilia 121 6. Rossi 109 250cc (23 laps, 112.516 km): 1. Ralf Waldmann (Germany) Honda 44:02.620 (average speed 153.279 kph) 2. Olivier Jacque (France) Honda 44:07.390 3. Tohru Ukawa (Japan) Honda 44:07.918 4. Jurgen Fuchs (Germany) Honda 44:26.752 5. Marcellino Lucchi (Italy) Aprilia 44:27.024 6. Luis d'Antin (Spain) Honda 44:40.264 7. Takeshi Tsujimura (Japan) Honda 44:45.474 8. Jurgen van den Goorberg (Netherlands) Honda 44:50.446 9. Jamie Robinson (Britain) Aprilia 44:55.036 10. Davide Bulega (Italy) Aprilia 45:01.762 11. Gianluigi Scalvini (Italy) Honda 45:04.230 12. Roberto Locatelli (Italy) Aprilia 45:04.406 13. Jose Luis Cardoso (Spain) Aprilia 45:04.620 14. Luca Boscoscuro (Italy) Aprilia 45:06.844 15. Yasumasa Hatekeyama (Japan) Honda 45:10.342 Fastest lap: Waldmann (lap 17), 1:53.594, average speed 155.036 kph. World championship standings (after 12 races): 1. Max Biaggi (Italy) Aprilia 224 points 2. Waldmann 212 3. Fuchs 136 4. Jacque 132 5. D'Antin 118 6. Harada 104 500cc (stopped after 16 laps due to rain, 78.272 km) 1. Michael Doohan (Australia) Honda 29:40.732 (average speed 158.238 kph) 2. Alex Criville (Spain) Honda 29:40.836 3. Tadayuki Okada (Japan) Honda 29:43.018 4. Jean-Michel Bayle (France) Yamaha 29:50.773 5. Norifumi Abe (Japan) Yamaha 29:52.964 6. Luca Cadalora (Italy) Honda 29:53.098 7. Scott Russell (U.S.) Suzuki 29:56.205 8. Alex Barros (Brazil) Honda 29:57.060 9. Shinichi Itoh (Japan) Honda 29:59.231 10. Kenny Roberts jr. (U.S.) Yamaha 29:59.542 11. Carlos Checa (Spain) Honda 30:01.324 12. Alberto Puig (Spain) Honda 30:17.926 13. Lucio Pedercini (Italy) Yamaha 30:32.279 14. Doriano Romboni (Italy) Aprilia 30:40.840 15. Eugene McManus (Britain) Yamaha 30:42.524 Fastest lap: Criville (lap 13), 1:50.191, average speed 159.824 kph. World championship standings (after 12 races): 1. Doohan 256 points 2. Criville 199 3. Cadalora 136 4. Abe 126 5. Barros 126 6. Russell 121 7. Okada 93 8. Bayle 90 9. Puig 78 10. Checa 70 11. Loris Capirossi (Italy) Yamaha 62 12. Roberts 61 13. Itoh 55 14. Juan Borja (Spain) Elf 32 15. Fredric Protat (France) Yamaha 26 Constructors: 1. Honda 295 2. Yamaha 168 3. Suzuki 134 6781 !GCAT !GSPO Englandcaptain Mike Atherton won the toss and elected to bat first in the third one-day international against Pakistan at Trent Bridge on Sunday. England lead the series 2-0. Teams: England: Nick Knight, Alec Stewart, Mike Atherton (captain), Mike Maynard, Graham Lloyd, Ronnie Irani, Adam Hollioake, Robert Croft, Darren Gough, Peter Martin, Allan Mullally. Pakistan: Saeed Anwar, Shahid Anwar, Ijaz Ahmed, Aamir Sohail, Shadab Kabir, Asif Mujtaba, Rashid Latif, Wasim Akram, Waqar Younis, Saqlain Mushtaq (corrects name from Mushtaq Ahmed), Shahid Nazir. 6782 !GCAT !GSPO Brett Hull of the St Louis Blues had two third-period goals and two assists as the United States held on to upset Canada 5-3 in World Cup ice hockey Saturday. "Gretzky, Lindros, Coffey, Messier, these guys are our idols -- and we beat them," exulted Hull, referring to the Canadians' top stars Wayne Gretzky, Eric Lindros, Paul Coffey and Mark Messier. "This is a huge thing because if we can go through undefeated we get the bye in the single-game eliminations in the second round. A bad bounce and you can lose and you're out. This is huge." The United States had never beaten Canada in the Canada Cup, the predecessor tournament to the World Cup, losing seven times and tying once. "Tonight we proved we could play physically with Canada," said U.S. caoch Ron Wilson. "That was oldtime hockey. All hell broke loose in the first minute," he said, referring to fights that broke out 20 seconds into the game. "In the second period we outskated them, and then we simply held on. We were a better team than they tonight." "I don't think we played too well," said Canadian coach Glenn Sather. "You do have to give the U.S. credit. We knew they would come out and play physically and take it to us, and they did." Hull was born in Canada and has dual citizenship, but chooses to play for the United States in international competition. His power-play goal 25 seconds into the final period extended the U.S. lead to 4-2 and he scored into an empty net with 25 seconds remaining to seal the victory. Mike Richter of the New York Rangers made 23 saves for the Americans. "Mike Richter made some big stops and they played with intensity," said Sather. John LeClair of the Philadelphia Flyers, Doug Weight of the Edmonton Oilers and Scott Young of the Colorado Avalanche scored the other goals for the United States, which is now 1-0 in the three-game round-robin stage of the tournament. The favoured Canadians are tied with Russia at 1-1. Gretzky scored twice and his New York Rangers' teammate Messier had the other goal for Canada. Gretzky put a backhander past Richter -- also his NHL teammate -- with 1:03 to play in regulation to cut the margin to 4-3, but Hull scored his empty-netter before Canada had a chance to press for the equaliser. "I thought Wayne played great but I thought overall we played very poorly," said Messier. The United States trailed 2-1 entering the second period but tied it on Weight's goal at 3:37. The Americans grabbed the lead just over seven minutes later when Young picked up a loose puck off a broken play at the left faceoff circle, spun and fired a wrist shot that snuck between goaltender Martin Brodeur's glove and the goal post. Gretzky was in the penalty box for hooking when Hull, his former Blues' teammate, took a feed from Chris Chelios of the Chicago Blackhawks and ripped a one-timer over Brodeur's left shoulder for his 10th goal in international competition. Richter protected the lead, making an acrobatic save on Joe Sakic during a late power play and getting help when Sakic put the rebound off a defenceman in the crease. The two teams scuffled when they met in a pre-tournament game and it didn't take long for tempers to flare in this contest. Canada's Keith Primeau squared off with Bill Guerin and Claude Lemieux brawled with Keith Tkachuk of the U.S. just 20 seconds into the game. Lemieux and Tkachuk were ejected. Canada next plays Slovakia (0-1) Sunday in Ottawa. "I'm not concerned about Slovakia," said Sather. "This was a wakeup call. We'll play a lot better tomorrow." The United States plays Russia Monday in New York. Russia lost to Canada Thursday in Vancouver but beat Slovakia earlier Saturday. "We can skate with the Russians," said Wilson. "And we'll prove that." In Montreal, Sergei Fedorov of the Detroit Red Wings and Alexander Mogilny of the Vancouver Canucks each had two goals and two assists as Russia converted three of their five power plays and beat Slovakia 7-4. Mogilny scored twice in a three-goal first period and set up third-period tallies by Sergei Gonchar and Sergei Nemchinov. Fedorov had a power-play goal in the first period and gave Russia a 5-3 lead by scoring with two seconds left in the second. Viacheslav Kozlov scored the other goal for Russia. Zigmund Palffy, Jergus Baca, Peter Bondra and Zdeno Ciger scored for Slovakia. 6783 !GCAT !GSPO Result of a British rugby league premiership semifinal on Sunday: St Helens 25 London 14 St Helens play Wigan in the final. Wigan beat Bradford Bulls 32-26 on Saturday to go through to the final on September 8. 6784 !GCAT !GSPO New Zealand all-rounder Chris Cairns took four for 26 on Sunday as Nottinghamshire secured a comfortable win over Kent to maintain the pressure on Sunday league leaders Yorkshire. A fiery spell from Cairns at Tunbridge Wells reduced Kent to 34 for six at one stage before Graham Cowdrey (38) helped last year's champions to a paltry 99 all out. Nottinghamshire easily scored the winning runs for the loss of only three wickets with 16 overs in hand. "We put the ball in the right places, it swung and seamed and we got our rewards," said Nottinghamshire skipper Paul Johnson. "That makes it seven games unbeaten and with two left against Leicestershire and Yorkshire we'd like to make it nine." Yorkshire retained their two-point lead at the top of the table over Nottinghamshire, Surrey and Northamptonshire after England discard Craig White helped dismiss Essex for 108 with four for 21 from his eight overs. Captain David Byas ensured his team's eighth victory in nine matches with an unbeaten 40 in the six wicket victory at Headingley. Surrey and Northamptonshire kept their hopes alive with wins over Warwickshire and Gloucestershire respectively. 6785 !GCAT !GSPO Standings in the English Sunday League (tabulated - played, won, lost, tied, no results, points, run-rate): Yorkshire 16 11 5 0 0 44 12.87 Surrey 15 10 4 0 1 42 17.22 Nottinghamshire 15 10 4 0 1 42 9.01 Northamptonshire 15 10 4 0 1 42 0.79 Warwickshire 15 9 5 0 1 38 6.00 Somerset 15 9 5 0 1 38 1.16 Middlesex 15 8 6 0 1 34 -1.09 Worcestershire 15 7 5 0 3 34 2.95 Kent 16 7 8 1 0 30 -8.33 Derbyshire 15 6 6 1 2 30 3.70 Leicestershire 15 6 6 0 3 30 -3.76 Lancashire 15 7 8 0 0 28 -0.92 Glamorgan 15 6 7 0 2 28 4.05 Sussex 15 5 8 0 2 24 -11.72 Hampshire 15 4 8 0 3 22 -6.69 Gloucestershire 16 4 9 0 3 22 -8.46 Essex 15 3 11 0 1 14 -5.19 Durham 16 1 14 0 1 6 -12.54 6786 !GCAT !GSPO Heinz-Harald Frentzen, the man set to succeed Damon Hill, has earned his reputation as much through his loyalty to the unfashionable Swiss Sauber team as through his speed on the track. But the opportunity at Williams gives him a real chance to emerge at last from the shadow of his contemporary and compatriot, world champion Michael Schumacher. Widely-believed to be one of the fastest drivers around, but without the results to prove it, Frentzen has become better known during Schumacher's era as "the other German", especially as his former girlfriend left him in 1991 for Schumacher. She is now Schumacher's wife. Born in Moenchengladbach in 1967, Frentzen is the son of a Spanish mother and German father, a carpenter who specialised in building coffins. Frentzen often returned home to work in the family business when his racing career hit a lull as he grew up. He began in karting before he was 12 and won the German junior championship and other titles between 1980 and 1985 before climbing via Formula Ford and the Opel Lotus series to finish as runner-up in the German Formula Three series in 1989. At that time he was a member of the famous Mercedes-Benz juniors scheme and one of a trio who were expected to go on and dominate European motor sport. The other two youngsters were Schumacher and Karl Wendlinger. Wendlinger's Formula One career came to a sad and abrupt early end when he crashed at Monaco in 1994 and suffered serious head injuries, but Schumacher has twice won the world drivers' title to leave Frentzen in the shade. Frentzen left the Mercedes school to try F3000 in Germany and Japan before arriving in F1 with Sauber in 1994. For Frentzen, the chance to join Williams concludes a lengthy period during which the Anglo-French team have admired him, despite the fact that this season he has managed only six world championship points and is just 11th in the standings. The German stayed loyal to Sauber, however, although now it looks as if Williams have finally got their man. 6787 !GCAT !GSPO Results of English Sunday League matches: At Tunbridge Wells: Nottinghamshire beat Kent by 7 wickets. Kent 99 (C.Cairns 4-26), Nottinghamshire 103-3. At Headingley: Yorkshire beat Essex by 6 wickets. Essex 108 (C.White 4-21), Yorkshire 109-4. At Portsmouth: Middlesex beat Hampshire by 7 wickets. Hampshire 184-9 innings closed (S.Udal 54), Middlesex 185-3 (M.Gatting 55 not out, M.Ramprakash 54 not out). At Chester-le-Street: Glamorgan beat Durham due to a higher run rate. Durham 173-7 innings closed, Glamorgan 112-2. At Chesterfield: Derbyshire beat Worcestershire by 6 wickets. Worcestershire 158, Derbyshire 159-4 (K.Barnett 51). At Leicester: Somerset beat Leicestershire by 7 wickets. Leicestershire 194-8 innings closed (D.Maddy 57), Somerset 195-3 (P.Bowler 76, M.Lathwell 63). At Bristol: Northamptonshire beat Gloucestershire by 5 wickets. Gloucestershire 175-9 innings closed, Northamptonshire 179-5. At The Oval (London): Surrey beat Warwickshire by two wickets. Warwickshire 185 (D.Brown 66), Surrey 186-8 off 36.4 overs. At Hove: Lancashire beat Sussex by 4 wickets. Sussex 204-8 innings closed, Lancashire 207-6 (N.Fairbrother 93). 6788 !GCAT !GSPO Evolution of the men's 3,000 metres world record since 1956 (tabulate under - time, name, nationality, date): 7:55.6 Gordon Pirie (Britain) 1956 7:52.8 Pirie 1956 7:49.2 Michel Jazy (France) 1962 7:49.0 Jazy 1965 7:46.0 Siegfried Herrmann (West Germany) 1965 7:39.6 Kip Keino (Kenya) 1965 7:37.6 Emiel Puttemans (Belgium) 1972 7:35.2 Brendan Foster (Britain) 1974 7:32.1 Henry Rono (Kenya) 1978 7:29.45 Said Aouita (Morocco) 1989 7:28.96 Moses Kiptanui (Kenya) 16.8.92 7:25.11 Noureddine Morceli (Algeria) 2.8.94 7:20.67 Daniel Komen (Kenya) 1.9.96 6789 !GCAT !GSPO World champion Damon Hill and manager Michael Breen faced an unpalatable if not unprecedented truth on Sunday. For Frank Williams the constructors' prize represents everything; the drivers' championship is of little interest. Only two hours after Breen had explained that team boss Frank Williams had abruptly ended their talks about a 1997 contract, Williams himself said the Briton's services were no longer required. Breen, speaking at a London news conference, went to great lengths to avoid apportioning blame but left it to the reporters present to read between the lines of the facts he presented. The only conclusion possible was that Williams had been negotiating on more than one front and that Hill, a loyal servant for six years, was dumped when he was ruled surplus to requirements once German Heinz-Harald Frentzen became available. Williams now has a driver who should appeal to the German market if he is successful in obtaining a supply of BMW engines for 1998 and beyond when his current deal with Renault comes to an end. Hill has a frantic search to find a team in need of a world champion-elect, who should be able to offer the coveted number one for their top car. The scenario is not unfamiliar. In 1987, Brazilian Nelson Piquet won the world crown and left for Lotus then in 1992 Briton Nigel Mansell triumphed and departed for Indycar racing in the United States. In the following year Frenchman Alain Prost decided to retire, only two days before lifting the title, after he had learned that Williams had signed Ayrton Senna for 1994. The Silverstone-based Jordan team, powered by Peugeot, now look favourites as Hill's new home providing sponsors Benson & Hedges can satisfy the pay demands. Breen, a shrewd negotiator, was stunned by the manner in which his talks with Williams were ended, but remained upbeat on his driver's behalf and cited his career record of 20 wins, 19 fastest laps and 18 pole positions as evidence that in Hill he has not only an accomplished racing driver but also a winner. For Formula One, however, the tawdry saga has left a bad taste in the mouth again for those sports fans who like to see loyalty rewarded. 6790 !GCAT !GSPO Pontypridd beat Neath 60-19 (halftime 17-12) in the final of the Welsh Champions Cup on Sunday. 6791 !GCAT !GSPO Following is Damon Hill factfile: Born 1960 in north London, son of Graham Hill, ex-world champion who died in light plane crash in 1975. 1982-85: Worked as motorcycle despatch rider to fund his racing career. 1984: First car win in race at Brands Hatch in England. 1986: Ninth in Formula Three championship. 1988: Third in Formula Three championship. 1989: Racing restricted by lack of finance. 1991: Fourth place at Le Mans. Took over as test driver for Williams Grand Prix team. 1992: Made Grand Prix debut for Brabham at British Grand Prix, finishing 16th. 1993: Joined Alain Prost at Williams. Won for first time in Hungary, then added victories in Belgium and Italy. Finished third in championship. 1994: Partnered Ayrton Senna at Williams and took over as unofficial number one after Senna's death, Beaten to the championship by Michael Schumacher by one point. 1995: Again second to Schumacher in championship. Retained by Williams with Jacques Villeneuve as 1996 partner. 1996: Williams terminate negotiations for 1997 contract. 1996 record: Australia: 1st; Brazil: 1st; Argentina: 1st; European: 4th; San Marino: 1st; Monaco: Did Not Finish; Spain: DNF; Canada: 1st; France: 1st; Britain: DNF; Germany: 1st; Hungary: 2nd; Belgium: 5th. Total Points: 81; championship position: 1st. Grand Prix facts: Starts: 64; wins: 20; pole positions: 18. 6792 !GCAT !GSPO Result of an English division one soccer match on Sunday: Queens Park Rangers 1 Bolton 2 Standings (tabulated - played, won, drawn, lost, goals for, goals against, points): Bolton 4 3 1 0 7 3 10 Stoke 4 3 1 0 7 4 10 Barnsley 3 3 0 0 8 2 9 Norwich 4 3 0 1 5 3 9 Tranmere 4 2 1 1 6 4 7 Queens Park Rangers 4 2 1 1 6 5 7 Wolverhampton 4 2 1 1 5 3 7 Swindon 4 2 1 1 5 4 7 Bradford 4 2 0 2 4 3 6 Portsmouth 4 2 0 2 4 5 6 Ipswich 4 1 2 1 9 7 5 Crystal Palace 4 1 2 1 4 3 5 Port Vale 4 1 2 1 4 4 5 Birmingham 2 1 1 0 5 4 4 Reading 4 1 1 2 5 10 4 Huddersfield 3 1 1 1 4 4 4 Oxford 4 1 0 3 6 5 3 Manchester City 3 1 0 2 2 3 3 West Bromwich 3 0 2 1 2 3 2 Oldham 4 0 1 3 5 9 1 Sheffield United 2 0 1 1 4 5 1 Grimsby 4 0 1 3 4 8 1 Southend 4 0 1 3 2 10 1 Charlton 2 0 1 1 1 3 1 6793 !GCAT !GSPO The Williams motor racing team have called off contract negotiations with world championship-leading driver Damon Hill, the Briton's lawyer and manager Michael Breen said on Sunday. Breen told a news conference that Hill, who could wrap up the world championship in next Sunday's Italian Grand Prix, was looking for another team for next season. He said team boss Frank Williams terminated discussions over extending Hill's contract last Wednesday but gave no reason for his decision. Hill, 35, is said to have demanded a salary rise of some three million pounds ($4.67 million) to stay with Williams. "We only began negotiations with Frank Williams in mid-August," Breen said. "Needless to say, both Damon and I were very surprised and disappointed by the news." Hill was still prepared to reopen discussions with Williams, Breen added. "Damon was very keen to drive for Williams. He's been there six years and why would he not want to continue?" But Williams, who have a reputation for dropping successful drivers, are rumoured to have already offered German Heinz-Harald Frentzen a driver's berth for next season. In 1987, Brazilian Nelson Piquet left Williams after winning the drivers' title. Briton Nigel Mansell fell out with the team in 1992 after taking the title and Frenchman Alain Prost quit the following year after a row about the choice of his driving partner. Hill, who was at home with his family in Dublin on Sunday, has already spoken to the Jordan and Stewart teams about his future, according to motor racing sources, and he has also been linked with McLaren. The British driver leads the championship standings by 13 points and could wrap up his first world title if he wins in Monza and Canadian team mate Jacques Villeneuve fails to finish in the first three. 6794 !GCAT !GSPO The Williams motor racing team have dropped world championship-leading driver Damon Hill, the Briton's lawyer Michael Breen said on Sunday. Breen told a news conference that Williams had terminated negotiations with Hill over a possible contract for next season. Hill would be talking to other Formula One teams regarding a car to drive for next season, Breen said. Breen, who is also Hill's manager, said team chief Frank Williams terminated discussions about the driver on Wednesday. Williams said the problem was not a financial one but gave no reason for the decision, Breen said. "Needless to say, both Damon and I were very surprised and disappointed by the news," Breen added. Motor racing sources said Hill, who leads the championship by 13 points with three races left, had approached the Jordan and Stewart teams and had also been linked with McLaren. Williams have developed a reputation for ditching successful drivers and are rumoured to have already offered German driver Heinz-Harald Frentzen a contract for next season. 6795 !GCAT !GSPO Michael Andretti vaulted into the middle of a three-way points race for the IndyCar Series Championship as he held off Bobby Rahal winning the Molson Indy Vancouver Grand Prix on Sunday. It was Andretti's second successive victory, fifth this year and 35th in his career. Andretti led the last 82 laps after polesitter Alessandro Zanardi of Italy was eliminated in a crash with a backmarker on lap 19. Driving a Lola Ford Cosworth, Andretti claimed his third victory at the 1.703 mile (2.741 km), 10-turn temporary circuit at Concord Pacific Place at an average speed of 94.374 mph (151.876 kph) to finish 1.905 seconds ahead of Rahal's Reynard Mercedes-Benzz by Christian Fittipaldi, Andretti's Brazilian teammate, finished third 7.088 seconds behind the winner. There is now a three-way battle for the points lead. Jimmy Vasser, who finished seventh, now has 142 points, Andretti is second with 128 and Al Unser Jr, who finished fifth, is third with 125 with one race remaining in the series. "It was just one of those perfect days out there," Andretti said. "I didn't have a close call all day and the pit stops were perfect." After Zanardi was eliminated, the only question for Andretti's Newman/Haas team was a matter of fuel economy: could they finish the race on one tank of methanol after piting on lap 54? "We were okay on fuel," Andretti said. "When Bobby slowed down, we slowed down." Said Rahal: "I couldn't get a break in traffic, Michael got all the breaks." Although Vasser can claim the title with a fifth place or better at the series finale at Laguna Seca Raceway, in Monterey, California, on September 8, Andretti has plenty of confidence that he can win his second series title. "It's pretty remarkable where we are because he's (Vasser) finished every race and we've dropped out of six races. I don't think Jimmy's going to sleep very well this week," Andretti said with a grin. 6796 !GCAT !GSPO Top 10 finishers in the Vancouver grand prix IndyCar race on Sunday (tabulate by driver, country, chassis, motor and laps completed): 1. Michael Andretti (U.S.), Lola Ford Cosworth, 100 (94.374 mph/151.876 kph) 2. Bobby Rahal (U.S.), Reynard Mercedes-Benz, 100 3. Christian Fittipaldi (Brazil), Lola Ford Cosworth, 100 4. Gil de Ferran (Brazil), Reynard Honda, 100 5. Al Unser, Jr. (U.S.), Penske Mercedes-Benz, 100 6. Bryan Herta (U.S.), Reynard Mercedes-Benz, 100 7. Jimmy Vasser (U.S.), Reynard Honda, 100 8. Adrian Fernandez (Brazil), Lola Honda, 100 9. Scott Goodyear (Canada), Reynard Ford Cosworth, 100 10. Robby Gordon (U.S.), Reynard Ford Cosworth, 99 6797 !GCAT !GSPO Michael Andretti won the Vancouver IndyCar Grand Prix in a Lola Ford on Sunday. Bobby Rahal finished second in a Reynard Mercedes-Benz. Christian Fittipaldi finished third in a Lola Ford. 6798 !GCAT !GSPO Britain's Nick Faldo and the three Americans, Steve Jones, Tom Lehman and Mark Brooks, the winners of the four major golf titles in 1996, will head a 12-man field in the Million Dollar Challenge at Sun City from November 28 to December 1. Announcing 10 of the 12-man invitation field for the biggest individual prize in the game, Sun City marketing director Tobin Pryor said on Sunday: "This is a big scoop for us. A lot of big names have taken part in this event over the last 16 years, but we've never had all four Major winners before." Faldo is a Million Dollar veteran who took the title in 1994. It will be the third time for British Open winner Lehman, but for Jones (U.S. Open) and Brooks (USPGA) it will be a first visit to the Gary Player Country Club Course. The other names announced are defending champion Corey Pavin, Nick Price, Ernie Els, Colin Montgomerie, Bernhard Langer and Mark O'Meara. Pryor said, "We've already got eight of the top 12 players in the world coming out. It should be a brilliant spectacle of golf." The two remaining places will be announced nearer the time, with speculation that American rookie pro Tiger Woods and 1995 British Open champion John Daly are top of the shopping list. 6799 !GCAT !GSPO Denmark beat Slovenia 2-0 in a World Cup European group one qualifier on Sunday. Scorers: Allan Nielsen (78th min), Soeren Andersen (89th). Attendance: 5,000. Standings (tabulated under played, won, drawn, lost, goals for, goals against, points): Greece 2 2 0 0 5 0 6 Denmark 1 1 0 0 2 0 3 Bosnia 1 0 0 1 0 3 0 Slovenia 2 0 0 2 0 4 0 Croatia 0 0 0 0 0 0 0 Next matches: Denmark v Greece, Bosnia v Croatia, October 9. 6800 !GCAT !GDIP !GSPO Ferenc Orosz punished a defensive blunder to give Hungary a 1-0 win over Finland in their opening World Cup qualifier on Sunday. Orosz scored into an open goal after a terrible mix-up between Finnish goalkeeper Antti Niemi and defender Rami Nieminen in the European group three match. Nieminen headed the ball past the advancing Niemi, leaving Orosz with a simple tap-in. Hungary, missing four key players through injury, dominated throughout the first half but failed to make the most of their chances. Twice Niemi foiled Orosz with fine saves from close range and the Hungarians wasted several other good opportunities. In the second half the Finns gained more possession. But without injured Ajax Amsterdam striker Jari Litmanen they lacked punch in attack and could not break through a well-organised Hungarian defence. Teams: Hungary - 1-Szabolcs Safar, 2-Mihaly Mracsko, 3-Andras Telek, 4-Norbert Nagy, 5 - Vilmos Sebok, 6-Gabor Halmai, 7-Tibor Dombi (18-Attila Plokai 18th), 8-Florian Urban, 9-Ferenc Orosz (14-Tibor Balogh 62nd), 10-Tamas Sandor (15-Gabor Egressy 87th), Laszlo Klausz. Finland - 1 - Antti Niemi, 2 - Kari Rissanen, 3 - Sami Hyppia, 4-Rami Nieminen (15-Jyrki Huhtamaki 45th), 5 - Jukka Koskinen, 6-Janne Lindberg, 7 - Antti Sumiala, 8-Sami Mahlio (17-Kim Suominen 81st), 9 - Petri Jarvinen, 10-Kai Nyyssonen (13-Joonas Kolkka 65th), 11-Jarni Vanhala. 6801 !GCAT !GSPO A 16th minute goal from Ferenc Orosz earned Hungary all three points in their opening game in Group 3 World Cup Qualifier against Finland in Budapest. Orosz scored into an open goal after a terrible mix-up between the Finnish goalkeeper Antti Niema and defender Rami Nieminen. Nieminen headed the ball past the advancing Niemi, leaving Orosz with a simple tap-in. Hungary, missing four key players through injury, dominated throughout the first-half but failed to capitalise on their chances. Twice Niemi foiled Orosz with fine saves from close-range and the Hungarians wasted several good opportunities. In the second-half the Finns saw more possession but without injured Ajax striker Jari Litmanen lacked punch in attack and could not break through a well-organised Hungarian defence. Teams: Hungary - 1-Szabolcs Safar, 2-Mihaly Mracsko,3-Andras Telek, 4-Norbert Nagy, 5-Vilmos Sebok,6-Gabor Halmai,7-Tibor Dombi (18-Attila Plokai 18th), 8-Florian Urban, 9-Ferenc Orosz (14-Tibor Balogh 62nd),10-Tamas Sandor (15-Gabor Egressy 87th), Laszlo Klausz. Finland - 1 - Antti Niemi, 2 - Kari Rissanen, 3 - Sami Hyppia, 4-Rami Nieminen (15-Jyrki Huhtamaki 45th), 5 - Jukka Koskinen, 6-Janne Lindberg, 7-Antti Sumiala,8- Sami Mahlio (17-Kim Suominen 81st), 9 - Petri Jarvinen, 10-Kai Nyyssonen (13-Joonas Kolkka 65th), 11-Jarni Vanhala. 6802 !GCAT !GDIP !GSPO Hungary beat Finland 1-0 (halftime 1-0) in their World Cup soccer European group 3 qualifier on Sunday. Scorer: Ferenc Orosz (16th minute) Attendance: 10,000 Norway 1 1 0 0 5 0 3 Azerbaijan 2 1 0 1 1 5 3 Hungary 1 1 0 0 1 0 3 Finland 1 0 0 1 0 1 0 Switzerland 1 0 0 1 0 1 0 Next match: Finland v Switzerland, October 6. 6803 !GCAT !GSPO Sweden beat Latvia 2-1 (halftime 2-0) in a World Cup soccer European group 4 qualifier on Sunday. Scorers: Latvia - Vits Rimkus (56th minute) Sweden - Martin Dahlin (16th), Kennet Andersson (21st) Attendance 2,000 Standings (tabulated - played, won, drawn, lost, goals for, goals against, points): Sweden 2 2 0 0 7 2 6 Belarus 2 1 0 1 2 5 3 Austria 1 0 1 0 0 0 1 Scotland 1 0 1 0 0 0 1 Estonia 1 0 0 1 0 1 0 Latvia 1 0 0 1 1 2 0 Next matches: Latvia v Scotland, Estonia v Belarus, October 5. 6804 !GCAT !GSPO Hungary beat Finland 1-0 (halftime 1-0) in their World Cup soccer European group 3 qualifier on Sunday. Scorer: Ferenc Orosz (16th) Attendance: 10,000. 6805 !GCAT !GSPO Olympiakos of Greece beat Partizan Belgrade 67-65 (halftime 31-29) to win the Trofej Beograd 96 international basketball tournament on Sunday. 6806 !GCAT !GSPO England opened their World Cup campaign with a 3-0 win over Moldova in a European group two qualifier on Sunday. Nick Barmby and Paul Gascoigne scored two goals in quick succession midway through the first half to put England on their way to victory in their first match under new manager Glenn Hoddle. Alan Shearer, the world's most expensive footballer, celebrated his first game as England captain with the third goal just over an hour into the game. Moldova squandered the chance of a consolation goal three minutes before the final whistle when they missed a penalty. England, who reached the European championship semifinals in June under the guidance of Terry Venables, took a while to assert their supremacy over the underdogs from the former Soviet Union and had to wait until the 24th minute before they went ahead through Barmby. Right back Gary Neville supplied the cross for Barmby to sidefoot home from close range. Less than two minutes later Paul Ince lobbed the ball up for Gascoigne to score with a looping header. Shearer should have made it 3-0 three minutes before halftime but lofted Barmby's cutback pass over the bar from close range. However, Shearer, who cost Newcastle 15 million pounds sterling ($23.4 million) from Blackburn after his goalscoring heroics in the European championship, made amends when he pounced to score in the 61st minute. Shearer was denied a penalty near the end of the first half when he tangled with Moldovan defender Ion Testimitanu, who in turn was responsible for his side's wasted penalty. England defender Stuart Pearce was unlucky to concede the penalty when Radu Rebeja launched the ball into the England box and it hit his outstretched arm. But Testimitanu hammered his spot kick against the angle of the post and crossbar. David Beckham and Andy Hinchcliffe made promising debuts but Pearce and Ince collected bookings which could prove costly for the future. Hinchcliffe played a part in the first goal, swinging in a cross from the left which landed at Neville's feet out on the right. Neville returned the ball to the middle, Shearer letting it fly by for Barmby to score. Little more than a minute later, Ince found room to lob on Barmby's ball and Gascoigne headed over goalkeeper Denis Romanenco and under the bar. Shearer sealed victory with his first England goal away from Wembley. Gareth Southgate launched the ball high and long down the right, Neville headed it inside and Shearer punished the overstretched home defence, slipping in between Serghei Secu and the goalkeeper to hook in his 11th goal in 29 international appearances. Hoddle was pleased to collect three points from England's first encounter in group two, which also includes Italy, Poland and Georgia, in the contest for qualification for the 1998 World Cup finals in France. But he was not entirely satisfied with the performance. "We can't be happy with that. I think we've got to say there is room for a big improvement but it'll have to take time," he said. " (But) all in all it's a nice way to start. "The grass was too long for us. It was a very slow-paced game. We wanted to up the tempo a little bit and we didn't manage to do that enough...We got the points but there's room for improvement." Teams: Moldova - Denis Romanenco, Serghei Secu, Ion Testimitanu, Serghei Nani, Serghei Belous (Oleg Shishkin, 58th), Vladimir Gaidamasciuc, Alexandru Curtianu, Serghei Epuraenau, Iurie Miterev (Radu Rebeja, 61st minute), Alexandru Popovici, Serghei Clescenco, England - David Seaman, Gary Neville, Stuart Pearce, Paul Ince, Gary Pallister, Gareth Southgate, David Beckham, Paul Gascoigne (David Batty, 81st), Alan Shearer, Nick Barmby (Matthew Le Tissier 81), Andy Hinchcliffe. 6807 !GCAT !GSPO Russia beat Cyprus 4-0 (halftime 2-0) in a World Cup soccer European group 5 qualifier on Sunday. Scorers: Yuri Nikiforov (7th and 50th minutes), Igor Kolyvanov (34th), Vladimir Beschastnykh (82nd). 6808 !GCAT !GSPO England beat Moldova 3-0 (halftime 2-0) in a World Cup soccer European group 2 qualifier on Sunday. Scorers: Nick Barmby (24th minute), Paul Gascoigne (25th), Alan Shearer (61st). Attendance: 9,500. 6809 !GCAT !GSPO Goalkeeper Jose Luis Chilavert scored from a free kick to give Paraguay a 1-1 draw way to Argentina in a World Cup qualifying match on Sunday. Chilavert thumped his free kick past Argentina goalkeeper German Burgos in the 42nd minute to give underdogs Paraguay a point that few outside the country had expected them to obtain. Earlier, striker Gabriel Batistuta had put the two-times world champion Argentines, who have won only one of their four qualifying games so far, in front with a 26th-minute goal. Chilavert, who plays his club soccer with Argentine champions Velez Sarsfield, scored four goals in the Argentine championship which finished last month, two from penalties and two from free kicks. One of the free kicks was scored against Burgos from 60 metres in a match against River Plate. Chilavert had said before the match: "Burgos is mediocre. If I can I will score a goal to help my country in this important meeting." Argentina's previous results have included a 2-0 defeat by Ecuador and a 0-0 draw with Peru. 6810 !GCAT !GSPO Peru survived the dreaded trip to the thin air of La Paz when they drew 0-0 away to Bolivia on Sunday to gain a precious World Cup qualifying point. Bolivia twice hit the post in dramatic second half which also saw Peru miss two golden chances on the counter-attack. Bolivia had won their previous seven home World Cup matches at the Hernando Silas stadium, which lies 3,600 metres above sea level. Their victims included mighty Brazil, beaten 2-0 in 1993. They won all four home games on their way to reaching the 1994 World Cup finals and beat Venezuela 6-1 in their first home game of the current qualifying tournament in July. But a week of preparation at high altitude paid off for Peru, who after losing 4-1 away to Ecuador have drawn their last three qualifying games. Peru missed three good chances on the break in a first half which saw playmaker Marco Etcheverry fire Bolivia's best chance over the crossbar when he had a free shot on the edge of the penalty area. Bolivia took control early in the second half when Erwin Sanchez, with a long range shot, and Etcheverry, from a free kick, both threatened the Peruvian goal. In the 53rd minute, defender Oscar Sanchez headed against the Peruvian crossbar and three minutes later Etcheverry again hit the Peruvian woodwork with an angled shot. But Bolivia, who often undo their good results at home with bad performances away, left themselves open at the back as they pressed forward. In the 67th minute, Peru's Pablo Zegarra, unmarked in the penalty area, fired his shot over the bar and two minutes from the end German Carthy had another chance on the break but saw his effort saved by goalkeeper Carlos Trucco. Teams: Bolivia - Carlos Trucco; Miguel Rimba, Oscar Sanchez, Juan Manuel Pena, Marco Sandy, Ivan Castillo; Julio Baldivieso, Marco Etcheverry, Erwin Sanchez (Roly Paniagua, 85th minute), Ramiro Castillo; Milton Coimbra (Jaime Moreno, 65th). Peru - Julio Cesar Balerio, Manuel Marengo, Juan Reynoso, Percy Olivares, Roger Serrano (Julinho, 47th); Jose Soto, Juan Jose Jayo, Pablo Zegarra, Jose Pereda; Roberto Palacios (Jorge Soto, 81st), Flavio Maestri (German Carthy, 80th). 6811 !GCAT !GSPO Bolivia and Peru drew 0-0 in a South American World Cup qualifier on Sunday. Attendance: 45,000 6812 !GCAT !GSPO Former Argentina coach Alfio Basile has returned to soccer for the first time since leading his country at the 1994 World Cup finals. Basile has taken charge of Buenos Aires side Racing Club with the intention of bringing the once-great club their first Argentine title for 30 years. "What most interests us is to win the Argentine championship," said Basile, who succeeds Miguel Brindisi. Basile played for the club during their heyday in the 1960s and was also in charge eight years ago when the team won the South American Supercup. Racing last won the Argentine title in 1966. Basile was in charge of Argentina for four years during which they twice won the Copa America. However, his reign also saw one of the blackest days in Argentine soccer history when they were beaten 5-0 at home by Colombia in a World Cup qualifier. Their performance in 1994, when they were knocked out in the second round by Romania, was also seen as a failure. 6813 !GCAT !GSPO Ecuador beat Venezuela 1-0 (halftime 1-0) in a South American World Cup qualifying match on Sunday. Scorer: Alex Aguinaga (4th minute) Attendance: 45,000 6814 !GCAT !GSPO Roberto "Hands of Stone" Duran kept his epic career alive on Saturday night with an easy first round victory over little-known Mexican Ariel Cruz. The super middleweight non-title fight lasted less than two minutes as Duran, 45, attacked Cruz, 30, with a series of hard body punches that sent the Mexican to the canvas three times. The victory brings the four-time world champion's record to 98-12 in a career spanning three decades. The Panamanian, who has never retired, said he wanted a re- match with Puerto Rican Hector "Macho" Camacho who took a controversial points decision against Duran in June. Duran told reporters: "Mexican fighters are very strong. I was well-prepared for him. I'm ready for Camacho now." Duran's Miami-based promoter Luis DeCubas said he had already lined up three, non-title bouts for the ageing boxer before a Camacho re-match. 6815 !GCAT !GSPO Four tries from discarded international wing John Hopoate helped Manly to claim first place in the Australian Rugby League (ARL) standings as they completed their regular season matches with a resounding 48-10 defeat of lowly South Sydney on Sunday. Manly, coached by Australia boss Bob Fulton, lived up to their early season status as favourites by running in nine tries in all to end their campaign two points clear of fast-finishing Brisbane who secured second place with a 38-6 defeat of Auckland on Friday. North Sydney beat Gold Coast 38-8 on Sunday for third place while Sydney City managed to reverse a recent slump in form to beat Sydney Tigers 24-10 and grab fourth place. Cronulla secured fifth place with a 22-0 defeat of Newcastle on Saturday, with Canberra sixth after trouncing South Queensland 36-10 on Sunday. On Friday, St George eased past Western Reds 22-16 for seventh while Western Suburbs claimed eighth place by beating Illawarra 12-8. The top eight sides in the standings now go through to the ARL's complicated system of play-offs which begin next week. The top four have two chances of reaching the final while the bottom four play sudden-death matches. Manly now play Sydney City next Sunday while Brisbane take on North Sydney on Saturday. In the elimination finals, Cronulla play Western Suburbs on Friday and St George meet Canberra on Saturday. The winners of those matches go on to play the defeated teams from the play-offs among the top four sides. 6816 !GCAT !GSPO Results of Australian rugby league matches played at the weekend: Played Sunday: Sydney Bulldogs 50 North Queensland 22 South Queensland 10 Canberra 36 North Sydney 38 Gold Coast 8 South Sydney 10 Manly 48 Sydney Tigers 10 Sydney City 24 Played Saturday: Western Suburbs 12 Illawarra 8 Cronulla 22 Newcastle 0 Played Friday: Auckland 6 Brisbane 38 Penrith 24 Parramatta 16 Western Reds 16 St George 22 Premiership standings (tabulate under played, won, drawn, lost, points for, against, total points): Manly 22 18 0 4 549 191 36 Brisbane 22 17 0 5 607 263 34 North Sydney 22 15 2 5 598 325 32 Sydney City 22 15 1 6 521 321 31 Cronulla 22 14 2 6 399 268 30 Canberra 22 13 1 8 538 384 27 St George 22 13 1 8 443 360 27 Western Suburbs 22 12 1 9 394 434 25 Newcastle 22 11 1 10 416 388 23 Sydney Bulldogs 22 11 0 11 375 378 22 Auckland 22 11 0 11 412 427 22 Sydney Tigers 22 11 0 11 319 459 22 Parramatta 22 10 1 11 404 415 21 Illawarra 22 8 0 14 403 444 16 Penrith 22 7 1 14 363 464 15 Western Reds 22 6 1 15 313 420 13 North Queensland 22 6 0 16 288 643 12 Gold Coast 22 5 1 16 359 521 11 South Sydney 22 5 1 16 314 634 11 South Queensland 22 4 0 18 220 496 8 Schedule for first round of play-off matches: Friday September 6: Cronulla v Western Suburbs Saturday September 7: Canberra v St George Brisbane v North Sydney Sunday September 8: Manly v Sydney City 6817 !GCAT !GSPO Singapore needed a goal in the last two minutes to scrape a point in a tough 1-1 draw with Malaysia in the opening game of the 1996 Tiger Cup on Sunday night. Starting favourites to qualify for the semifinals along with regional powerhouse Thailand, Singapore stumbled through the opening 75 minutes of the game and were eventually made to pay when Malaysia's Sambagamaran rounded defender Abdul Kadir after a fine solo run and rifled a shot that put Malaysia in front. The Malaysians, fielding a young side in front of a capacity 55,000 crowd, showed greater composure throughout the match with Rusdee Sulong and Yap Wai Loon heading their counter-attacks. Singapore - dubbed the Lions - looked ill at ease inspite of almost five months of a new professional league regime and it was only in the closing minutes that their play took on a sense of real urgency. Army striker Selvaraj hit the crossbar in the 87th minute after the ball was nodded down to his feet but it was veteran Fandi Ahmad who squeezed home the equaliser running on to a throughball that found him in the six-yard box with only the keeper to beat. The draw upsets Singapore's plans of coasting through to final stages. They play Brunei on Wednesday and the Philippines on Friday before their next tough match against Thailand on September 8. With only a point against Malaysia, the hosts will be looking over their shoulders, anxious not to repeat their Asian Cup qualifying disaster in July when two late goals conceded against Thailand cost them a berth in December's final round in the United Aab Emirates on goal difference. Philippines take on SEA Games champions Thailand in Monday's other Group B match, while in Group A Cambodia face Vietnam and Laos play Indonesia in a pool that also features Myanmar. The Tiger Cup, worth US$80,000 to the champion side, ends on September 15. 6818 !GCAT !GSPO Result on Sunday of the first game in the 1996 Tiger Cup soccer competition: Singapore 1 Malaysia 1 (halftime 0-0) Scorers: Malaysia - K. Sambagamaran (75th) Singapore - Fandi Ahmad (88th) Attendance: 55,000 6819 !GCAT !GSPO Australia's Rodney Eyles inflicted a rare defeat on Pakistani world number one Jansher Khan on Sunday to lift the Hong Kong Open title. Eyles, whose career has been overshadowed by Jansher since he lost to him in the 1986 world junior final, had a surprisingly easy 15-10 15-10 15-5 victory over the top seed to deny him an eighth Hong Kong Open triumph. It was only the sixth defeat Jansher had suffered in major championships since 1992 and his first since England's Del Harris beat him in the super series play-offs earlier this year. Eyles, the second seed, found his length and rhythm quickly and completely dominated the match. Jansher was slow in reacting to the Australian's drop shots, made several uncharacteristic errors on seemingly simple shots and appeared to throw in the towel midway through the third game. In his semifinal win over Australia's Anthony Hill on Saturday, Jansher had looked less than fully fit and Eyles exploited his lack of stamina by forcing him into long rallies early in the match. Jansher led briefly during the second game but a series of deft drop shots brought Eyles level and the Australian went on to take control. "I am very satisfied with today's win -- I was desperate to beat him," said the 28-year-old Eyles after receiving his winner's cheque for $11,220. "It is good for the sport to see someone's elses name on the winner's cheque. It must be hard for him to keep fronting at tournaments and winning," Eyles added. Jansher, who has won the World Open a record seven times, said that he had experienced a rare bad day but was confident of bouncing back. "I had a bad day and Rodney had a good day and he won," he said. "I could not do anything right today -- my backhand volley is usually a winning shot but today it kept going in to the tin. "I am not a machine and sometimes it's good to lose. It will mean I will train harder and concentrate better at the next tournament. Just because I have lost once does not mean I will lose my confidence." 6820 !GCAT !GSPO Result of the final in the Hong Kong Open on Sunday (prefix number denotes seeding): 2-Rodney Eyles (Australia) beat 1-Jansher Khan (Pakistan) 15-10 15-10 15-5. 6821 !GCAT !GSPO Israel beat Bulgaria 2-1 (halftime 1-1) in a World Cup soccer European group 5 qualifier on Sunday. Scorers: Israel - Ronnen Harazi (35th minute), Tal Benin (57th, penalty). Bulgaria - Krassimir Balakov (3rd, penalty). Attendance: 24,000 Standings (tabulated - played, won, drawn, lost, goals for, goals against, points): Russia 1 1 0 0 4 0 3 Israel 1 1 0 0 2 1 3 Bulgaria 1 0 0 1 1 2 0 Cyprus 1 0 0 1 0 4 0 Luxembourg 0 0 0 0 0 0 0 Next match: Luxembourg v Bulgaria, October 8. 6822 !GCAT !GSPO Matches scheduled for the featured courts Monday at the U.S. Open tennis championships at the National Tennis Centre (prefix denotes seeding): Stadium (starting at 11 a.m., 1500 GMT) 3-Arantxa Sanchez Vicario (Spain) v 16-Martina Hingis (Switzerland) 1-Steffi Graf (Germany) v Anna Kournikova (Russia) 6-Andre Agassi (U.S.) v David Wheaton (U.S.) Grandstand Rita Grande (Italy) v Judith Wiesner (Austria) Javier Sanchez (Spain) v Arnaud Boetsch (France) 3-Thomas Muster (Austria) v 13-Thomas Enqvist (Sweden) 7-Jana Novotna (Czech Republic) v 17-Karina Habsudova (Slovakia) Stadium evening session (starting 7:30 p.m., 2330 GMT) 2-Michael Chang (U.S.) v Jakob Hlasek (Switzerland) 6823 !GCAT !GSPO Stefan Edberg relishes the chase for a seventh Grand Slam title but insists that nothing -- not even another U.S. Open championship -- will change his mind about retirement. Edberg ensured his place in the second week of the Open with an emphatic 6-4 7-6 6-1 victory over Dutchman Paul Haarhuis on Sunday. "The way I'm playing, I definitely have a chance of moving forward here into the tournament," said the 30-year-old Edberg, who announced before the season that this would be his last campaign. "A good thing is that I played three matches and there hasn't been any long matches. Physically, mentally, I feel good about my game. I'm looking forward to the rest of it." Edberg still makes the trip from service line to the net with silky grace and makes the volley as deftly as a fencer going for the kill. The sting may be gone from his once-biting serve, and endurance may yet come into question, but so far the National Tennis Centre crowds have been enthralled by the farewell performance of the 1991 and 1992 Open champion. "At the moment I'm feeling good about my game, and I feel excited being out there," said Edberg. "When you're playing good tennis, it's such a good feeling. I think in order to come up with some good tennis, I need to be fired up, I need to be excited out there, I need to feel the tension and be part of it. It's important." Edberg, playing in a remarkable 54th successive Grand Slam tournament, can sense a difference in how he is being treated here. "I think a lot of the players are coming up and saying 'Well done, well played.' Probably a little more than usual." "It's going to be really difficult to win it, because everybody keeps asking, 'Do you feel you have a chance?' "I feel I have a little chance, because so many things can happen." Edberg said winning would not change his retirement plans. In fact, it would be icing on the cake. "That was the intention, to go away on a high note," he said. "I know that I can't keep going forever, it's just not physically and mentally possible. I want to finish playing good tennis. It's so much nicer to do it that way." "I may have a fantastic end towards the end here, so much the better," he said. "I'll be so much more happy retiring." 6824 !GCAT !GSPO Results of National Football League games played on Sunday (home team in CAPS): BALTIMORE 19 Oakland 14 CAROLINA 29 Atlanta 6 Kansas City 20 HOUSTON 19 INDIANAPOLIS 20 Arizona 13 JACKSONVILLE 24 Pittsburgh 9 MINNESOTA 17 Detroit 13 ST LOUIS 26 Cincinnati 16 Philadelphia 17 WASHINGTON 14 DENVER 31 NY Jets 6 MIAMI 24 New England 10 SAN DIEGO 29 Seattle 7 SAN FRANCISCO 27 New Orleans 11 Green Bay 34 TAMPA BAY 3 Buffalo at NY GIANTS (night game) 6825 !GCAT !GSPO Results of Major League Baseball games played on Sunday (home team in CAPS): American League Chicago 4 TORONTO 2 (in 11) Kansas City 3 DETROIT 2 (in 13) Minnesota 6 MILWAUKEE 2 Cleveland 8 TEXAS 2 CALIFORNIA 4 New York 0 Boston 8 OAKLAND 3 Baltimore at SEATTLE (night game) National League Florida 6 CINCINNATI 1 MONTREAL 7 San Diego 6 PITTSBURGH 9 Houston 5 NEW YORK 6 San Francisco 5 (in 10) ST LOUIS 15 Colorado 6 CHICAGO 2 Atlanta 1 (in 12) Ls Angeles at PHILADELPHIA (night game) 6826 !GCAT !GSPO Top-seeded defending champion Pete Sampras knows exactly what it means to face Mark Philippoussis in a hard-serving showdown, as he will in the next round of the U.S. Open. "It's dangerous," Sampras said of his round-of-16 clash with the unseeded Australian. "He's got a big game." Sampras and the 19-year-old Philippoussis were both in a rush to renew their rivalry as they took an identical one hour, 29 minutes on Sunday to advance. Sampras had 18 aces and never faced a break point in beating Russian Alexander Volkov 6-3 6-4 6-2 on the Stadium Court while on the adjoining Grandstand Court, Philippoussis overpowered 16th-seeded Cedric Pioline 6-3 6-2 6-4 with 25 aces. The Frenchman also never had a break point chance. Experience has taught Sampras how much trouble the rocket-launching Philippoussis can be. In the third round of the Australian Open, Philippoussis delighted the hometown fans in Melbourne by upsetting Sampras. The American got revenge by reversing the outcome in the second round at Wimbledon. There will be no secret stratgey in the rubber match, according to Sampras. "We're both going to be coming in, serving big," said Sampras. "It'll be a match that comes down to a point here and there. It will depend on who is putting pressure on the other guy's service games. "When you get that opportunity to break, try to convert. Stay solid on my service games," said Sampras. "That's what it really boils down to." Philippoussis is eager to take another shot at the world number one. "I like playing the top players because there's no reason why I can't beat them, I have already," said Philippoussis, oozing confidence. "If I go with my game plan and stick to it, there's no reason why not." 6827 !GCAT !GSPO Aces were wild on Sunday and two of the slickest dealers in tennis arranged a showdown game of stud for the fourth round of the U.S. Open. Top-seeded defending champion Pete Sampras and big-hitting Australian teenager Mark Philippoussis bashed their way to a third Grand Slam match-up this year, and Goran Ivanisevic powered his way to rare visit to the second week of the Open. Sampras smashed 18 aces, Philippoussis pounded 25 and so did Ivanisevic to make the winds whipped up by the off-shore approach of Hurricane Edouard whistle at the National Tennis Centre. "It's the best match I've played so far," said Sampras, who scuffled through a five-set win Friday against 47th-ranked Czech Jiri Novak. "I felt real fresh today." Sampras swept Alexander Volkov 6-3 6-4 6-2, Philippoussis pushed past 16th seed Cedric Pioline of France 6-3 6-2 6-4, and Ivanisevic drubbed Hendrik Dreekmann of Germany 6-3 6-2 7-6. Advancing in a more sedate style was Stefan Edberg, who put off his retirement yet again and even gave himself some hope of chasing a seventh Grand Slam title with a 6-4 7-6 6-1 victory over Dutchman Paul Haarhuis. "I'm playing good tennis and I'm into the second week," said the 30-year-old Swede, who is playing in his 54th successive -- and last -- Grand Slam championship. "I've had some good matches. Anything can happen now." Anything can happen in the explosive fourth-round match between Sampras and the 19-year-old Philippoussis, as far as the American is concerned. "It's dangerous," said Sampras, who lost to the Australian in the third round of the Australian Open and then beat him in the second round at Wimbledon. "We're both going to be coming in, serving big. It'll be a match that comes down to a point here and there." Sampras's match against Volkov held no such drama. The 25-year-old Sampras, hungry to win his first Grand Slam title of the year in his last shot this season, devoured the Russian in one hour, 29 minutes. Volkov was made to order for Sampras, who improved his Open mark against lefties to 8-0. "I served real big. When I serve real big that makes my game better all around," said Sampras. "I never felt like I was threatened on my serve." Volkov never had a single break point in the match. "You saw the game, how many aces. You saw the forehand. No chance today," said Volkov, who then concluded one of the shortest post-match interviews in Open history. Philippoussis did not give Pioline, runner-up to Sampras here in 1993, much of a chance either in a performance eerily similar to that of Sampras. The big Australian matched Sampras by yielding just nine games, also never faced break point and took an identical 89 minutes to advance. Scarier still, he feels he can improve. "I wouldn't say I'm at the top of my game," said Philippoussis, who like Sampras is the son of a Greek immigrant. "I just would say I'm playing solid. Just nice, solid tennis." Ivanisevic, the fourth seed, kept his balance to reach a goal of his -- to make it to the second week of the Open. The volatile Croatian, a first-round loser the last two years, maintained his cool despite being called for a foot fault that negated an ace on match point at 11-10 in his final-set tiebreaker. Although Ivanisevic then served up a double fault, he did not allow the incident to throw him and won the next two points to finish off Dreekman. "I didn't want to lose my mind then," said Ivanisevic, who has twice reached the Wimbledon final. "You have to deal with it, you have to stay cool." Next up for Ivanisevic will be Andrei Medvedev of Ukraine, a 6-2 6-4 6-3 winner over Czech Petr Korda. French veteran Guy Forget also reached the fourth round as he reversed momentum after squandering a two sets to none lead to beat Sjeng Schalken of the Netherlands 6-2 7-5 4-6 4-6 6-0. Forget will face Spain's Alex Corretja, a 6-2 4-6 4-6 6-4 6-3 winner against Swede Jonas Bjorkman. Edberg's meets the winner of the last men's third-round contest pitting 12th-seeded Todd Martin and Briton Tim Henman, in a rematch of the Wimbledon quarterfinal won by the American. On the women's side, second seed Monica Seles, fourth seed Conchita Martinez and unseeded South African Amanda Coetzer booked berths in the quarters. Seles came back from 3-5 down in the first set to win 7-5 6-0, Spain's Martinez trounced Swede Asa Carlsson 6-2 6-1 and Coetzer beat American Lisa Raymond 6-4 6-1. Seles will meet Raymond, while Martinez faces the winner of Sunday night's match between Olympic champion Lindsay Davenport and her fellow-American Linda Wild. 6828 !GCAT !GSPO Monica Seles took her expected place in the quarter-finals of the U.S. Open on Sunday after surviving a first-set scare, then turned her thoughts to a pair of intriguing match-ups in the other half of the draw. Seles battled back after trailing 5-3 in the first set to beat France's Sandrine Testud 7-5 6-0 and join fourth-seeded Conchita Martinez of Spain in the last eight. Martinez mauled Sweden's Asa Carlsson 6-2 6-1 to advance. After running off the last 10 games of her fourth-round match to secure victory, Seles pondered the challenges awaiting longtime rivals Steffi Graf and Arantxa Sanchez Vicario. Top-seeded defending champion Graf and third seed Sanchez, a finalist at each Grand Slam stop this season, go up against two of the most talented young players to surface in the women's game -- Martina Hingis and Anna Kournikova -- Monday. "I know Steffi and Anna have not played each other. I think it's going to be a great match," said the second-seeded Seles, "If Anna stays aggressive and plays like she did yesterday, it's hard to predict. "Between Arantxa and Martina, I don't know. Martina has a great chance. It's a hard call. I think you'll have to see who is playing better that day, who is less nervous, who is going to be a little more focused." Two 15-year-olds knocking the cover off the ball and giving the favourites an honest run for their money in the fourth round of the U.S. Open? Sounds like a throwback to the early days of Graf, Seles and Capriati. Hingis is the more celebrated and polished of the two youngsters. The Swiss teenager exploded on the pro scene last year as an exception to new rules governing the age of rookie pro players and the number of tournaments they may play in. Hingis, who also reached the fourth round here last year, was a quarter-finalist at the Australian Open this year. She has lost just 13 games in posting three straight-set victories on the way to her showdown with Sanchez. Kournikova, a Russian who has been schooled at Nick Bollettieri's tennis academy, has made a big splash here by beating 14th seed Barbara Paulus to reach the round of 16. "I think they're definitely good," said Seles. "I think Anna, Martina, then Venus (Williams) and probably a couple more will come up in the next few years, definitely. "That's the evolution of the game. It was Gaby (Sabatini), Steffi, then it was Jennifer (Capriati), Monica. "I think it's great. They're attacking the ball, always raising the level of women's tennis the next step higher." 6829 !GCAT !GSPO Goran Ivanisevic has historically been his own worst enemy at the U.S. Open, losing his temper as well as first-round matches the last two years. On Sunday, the fuse was lit again on the Croatian's explosive disposition when he was called for a foot fault that negated an ace on his third match point at 11-10 in a final-set tiebreaker. And though Ivanisevic promptly served up a double fault, this time the incident did not set off a calamitous tantrum. Instead he regrouped to launch a 128 mph (206 kph) ace on the next point followed by a forehand volley winner to wrap up a 6-3 6-2 7-6 win over Germany's Hendrik Dreekman to reach the fourth round of the Open for the first time in five years. "It's too important this tournament, I didn't want to lose my mind then," the fourth-seeded Ivanisevic said of his mellow approach. "You have to deal with it, you have to stay cool. If I didn't stay cool you can lose the match. "Maybe I would lose before, but this time I was so focused," said Ivanisevic. "I said, No, no, no, you're still in there. You just have to keep cool, then maybe after the match you deal with the guy'." Did he deal with the linesman after the match? "I told him lot of things afterwards," a smiling Ivanisevic replied. Smiles and wins have been scarce for Ivanisevic at the Open and only now can he finally enjoy this Grand Slam, he said. "I think I have achieved one of goals, to play Tuesday," said Ivanisevic, who twice has reached the Wimbledon final. "Usually I was already back in Croatia watching TV. "Now I think I can play more relaxed. If I'm here in the second week, anything is possible." Dreekmann is a believer after being overwhelmed by Ivanisevic's rocket serve for 25 aces. "If he serves like that, two or three aces in a game, it's tough, you can't do anything against it " said Dreekmann. "You just think of one corner and go for it. If he's taking the other corner, it's too late." The 24-year-old Ivanisevic has emerged as a fan favourite with his high voltage playing style and personality. "I think they like a little action," Ivanisevic said. "They like action movies so they like me. There is always something interesting going with me when I play, some aces, a little talking to people around, a little fighting, a little throwing the racquets. "They don't like it when somebody's too boring. They like this." 6830 !GCAT !GSPO Stefan Edberg put off retirement for another day and gave himself hope for a seventh Grand Slam title chase on Sunday with a decisive straight-set victory over Paul Haarhuis at the U.S. Open. Edberg, playing in his 54th successive -- and last -- Grand Slam championship, glided past Dutchman Paul Haarhuis 6-4 7-6 6- 1 to reach the fourth round here for the first time since 1992, the year he won the second of his back-to-back Open titles. "I'm playing good tennis and I'm into the second week," said the 30-year-old Swede. "I've had some good matches. Anything can happen now." Edberg has a pair of U.S., Australian and Wimbledon crowns in his Grand Slam collection but says not even an inspiring Open triumph this year would change his mind about the retirement he announced at the beginning of the season. "Once I make a decision then I stand for it," he said. Haarhuis fell to 0-5 lifetime against Edberg. "He played too good for me," said the Dutchman. On the women's side, fourth-seeded Conchita Martinez of Spain became the first player to reach the quarter-finals. Martinez, the 1994 Wimbledon champion, beat unseeded Asa Carlsson 6-2 6-1 to continue her charge through the draw. "I played great tennis out there. I was concentrating in the whole match, trying to win all the points," said Martinez, who has lost just 16 games in four matches without the loss of a single set. "I'm playing some good tennis here at the Open. I played great my first four matches." Haarhuis has also played some great tennis in the past at the National Tennis Centre. As a qualifier in 1989, Haarhuis upset John McEnroe in the second round on the way to reaching the round of 16 himself. Two years later, Haarhuis ousted top seed Boris Becker in straight sets in the third round and advanced to the quarters where he fell to Jimmy Connors in an epic confrontation. In 1994, Haarhuis and Jacco Eltingh won the second of their three Grand Slam doubles titles. But there were no heroics on Sunday for Haarhuis. "I would have liked to beat him and finish his Grand Slam career here," said Haarhuis. "It would be a nice thing for me and him." That response drew laughter in the interview room. "He could tell his friends back home he lost to me," Haarhuis joked. Edberg, as usual, claimed victory from the net, where he waged 102 points, more than half the points contested in the one hour, 57 minute match. "I wasn't returning too good," explained Haarhuis, who is one month younger than Edberg. "Every ball I returned was shoulder high. I barely made a single return to his feet." Edberg cracked 22 volley winners against three for Haarhuis but gave the appreciative audience its biggest thrill with a dash across the baseline that clinched the second set. Haarhuis had earned a minibreak on the second point of the tiebreaker and went to 3-1 with an ace. Edberg then ran off six of the next seven points to claim the decider. The last point showed there was still life in the great Swede. Haarhuis looked to be in control of the spirited rally, having driven Edberg deep into the backhand corner. The Swede retrieved it but Haarhuis was in position to drive a searing forehand into the opposite corner for an apparent winner. But Edberg raced along the baseline, stretched and whipped a running, crosscourt winner that sizzled over the net on an impossible angle and left Haarhuis frozen in disbelief and two sets down. Edberg faces the winner of Sunday night's contest between 12th seed Todd Martin and 21-year-old Tim Henman of Britain, in a re-match of the Wimbledon quarter-final won by the American. "We're pretty even," Edberg said about Martin. "I need to be on top of my game. "Henman, I've never played. He's an up-and-comer." 6831 !GCAT !GSPO Results from the U.S. Open Tennis Championships at the National Tennis Centre on Sunday ( prefix number denotes seeding): Women's singles, fourth round 4-Conchita Martinez (Spain) beat Asa Carlsson (Sweden) 6-2 6-1 2-Monica Seles (U.S.) beat Sandrine Testud (France) 7-5 6-0 Amanda Coetzer (South Africa) beat Lisa Raymond (U.S.) 6-4 6-1 Men's singles, third round Stefan Edberg (Sweden) beat Paul Haarhuis (Netherlands) 6-4 7-6 (7-4) 6-1 4-Goran Ivanisevic (Croatia) beat Hendrik Dreekmann (Germany) 6-3 6-2 7-6 (13-11) Guy Forget (France) beat Sjeng Schalken (Netherlands) 6-2 7-5 4 -6 4-6 6-0 Alex Corretja (Spain) beat Jonas Bjorkman (Sweden) 6-2 4-6 4-6 6-4 6-3 Mark Philippoussis (Australia) beat 16- Cedric Pioline (France) 6-3 6-2 6-4 1-Pete Sampras (U.S.) beat Alexander Volkov (Russia) 6-3 6-4 6- 2 Andrei Medvedev (Ukraine) beat Petr Korda (Czech Republic) 6-2 6-4 6-3 6832 !GCAT !GSPO Young Willie Adams threw a five-hit shutout and mighty Mark McGwire hit his major league-leading 46th homer as the Oakland Athletics blanked the Boston Red Sox Saturday for the second straight game, 8-0. Adams (2-2), a 23-year-old right-hander making his ninth career start, walked one and struck out nine in his first complete game and first shutout. Adams retired 12 consecutive batters in one stretch from the second through the sixth. "Shutouts are nice when they happen," Adams said. "But it's more important to be solid and keep your team in the ball game. I've learned a ton since I've been up here." His performance gave the Athletics three consecutive shutouts. The pitching staff, which blanked Baltimore on Wednesday, has not allowed a run in 29 innings. The Red Sox were unable to get an extra-base hit in dropping their second straight since winning five in a row. McGwire's two-run homer off Red Sox knuckleballer Tim Wakefield (11-12) gave the Athletics a 2-0 lead in the first. Geronimo Berroa connected for a three-run homer, his 35th, off Wakefield to give Oakland a 7-0 advantage. Brian Lesher homered in the sixth for Oakland. Wakefield was tagged for eight runs and seven hits over six innings. The right-hander had won six of eight decisions over nine starts. In Seattle, Bobby Bonilla had three RBI, including two on a homer that broke a tie in the fifth inning and lifted the Baltimore Orioles to a 7-6 victory over the Mariners. Baltimore won for the fourth time in six games but remained four games behind the first-place Yankees in the American League East. The Orioles remained tied with the Chicago White Sox in the wild-card race while the Mariners fell two games off the wild-card pace. Scott Erickson (9-11) gave up five runs and six hits with four walks and three strikeouts in 6 1/3 innings, but stayed around long enough to get the win. Brady Anderson hit his 41st homer and Pete Incaviglia added his second homer in as many games since getting traded to Baltimore. Ken Griffey hit a two-run homer, his 41st, for Seattle. Alex Rodriguez went 2-for-4 to extend his hitting streak to 16 games (.477, 31-for-65) and raise his league-leading average to .375. At California, Derek Jeter had a career-high four RBI and Jimmy Key pitched eight strong innings in his longest outing of the season as the New York Yankees routed the Angels 14-3. The Yankees struck for seven runs in the third and chased starter Jason Dickson (1-2). Jeter was in a 5-for-32 slump before his two-run single gave the Yankees a 6-0 lead. Key (10-10), who left his last start in the first inning after he was struck in the left elbow by a line drive, gave up three runs and five hits with two walks and three strikeouts. New York has won consecutive games after a season-high five-game losing streak. In Texas, Darren Oliver came within two outs of his second complete game and Dean Palmer and Warren Newsom homered on consecutive pitches in the second as the Rangers defeated the Cleveland Indians 6-3. Oliver (11-6) allowed three runs and nine hits in 8 1/3 innings for Texas, which improved to 5-0 at home against the Indians this season. Ed Vosberg recorded the final two outs for his seventh save. The Rangers are 8-3 versus Cleveland this year. In Milwaukee, pinch-hitter Matt Mieske's disputed two-run homer in the eighth lifted the Brewers to a 3-2 victory over the Minnesota Twins. With one out and Marc Newfield on first, Mieske belted a 1-0 pitch off reliever Rich Robertson (6-13) over the left-field fence for his 12th homer. Left fielder Roberto Kelly went back to the wall and a fan reached over the fence to catch the ball. Minnesota manager Tom Kelly argued that the fan interfered but the call stood. In Toronto, Wilson Alvarez allowed just one run over eight innings to earn his first win in five starts and Danny Tartabull doubled in two runs in the fifth as the Chicago White Sox posted a 5-1 victory over the Blue Jays. Alvarez (15-7) gave up seven hits and three walks with four strikeouts. His 15 victories tie a career high. Roberto Hernandez struck out the side in the ninth for Chicago, which has won three in a row after losing seven of eight. Robin Ventura belted his 30th home run for Chicago. In Detroit, Doug Linton allowed one run and struck out a career-high nine batters in 6 1/3 innings and Keith Lockhart's sixth-inning sacrifice fly snapped a tie as the Kansas City Royals edged the Tigers 3-1. Linton (6-9), who retired the first 12 batters he faced, allowed three hits and walked one batter. Jaime Bluma allowed two hits over 1 2/3 innings and Jeff Montgomery pitched out of a bases-loaded jam in the ninth for his 24th save. 6833 !GCAT !GSPO Kevin Mitchell drove in a career-high six runs and pinch-hitter Lenny Harris hit a grand slam as the Cincinnati Reds overcame an early five-run deficit and pounded the Florida Marlins 22-8 Saturday. Mitchell had a three-run homer and a three-run single and scored three times, Hal Morris added a three-run homer and four RBI and Willie Greene had three RBI for the Reds, who won for just the third time in nine games. Eddie Taubensee, who scored four times, hit a two-run homer for Cincinnati, which posted season highs in runs and hits (18) to beat Florida for just the third time in 11 meetings this year. The Reds sandwiched 40 runs of offence around a 3-1 loss Friday to the Marlins, having beaten Colorado 18-7 Thursday. "I don't know what to think with two ball games with that much offence," said Reds manager Ray Knight. "We're swinging the bats as well as we have all season collectively. I don't remember scoring that many runs in two games." Reds starter Kevin Jarvis (7-7) got the win despite allowing six runs -- three earned -- and seven hits over five innings. Marlins starter Kurt Miller (1-2) was shelled for six runs and three hits in 1 1/3 innings. Devon White homered for the Marlins, who had their seven-game winning streak snapped. The 22 runs were the most scored against Florida since it entered the National League in 1993. "Hey, those things happen," Marlins manager John Boles said. In Chicago, Frank Castillo threw 6 2/3 scoreless innings to upstage the Braves debut of Denny Neagle as the Cubs hammered Atlanta 12-0. Ozzie Timmons homered and drove in four runs, Brian McRae homered and drove in three, and Luis Gonzalez hit a two-run shot as the Cubs won for the third time in four games. Castillo (7-14) allowed two hits and four walks with seven strikeouts. Terry Adams held the Braves scoreless in 2 1/3 innings and completed the three-hitter for his fourth save. Neagle (14-7), acquired in a four-player trade from Pittsburgh on Wednesday, gave up three runs and three hits with three walks and a pair of strikeouts in 5 2/3 innings. In Montreal, Omar Daal allowed one hit over five innings in his first major-league start and Mike Lansing and Mark Grudzielanek each had two hits and an RBI as the Expos snapped the San Diego Padres' six-game winning streak, 4-2. Daal (3-2), all of whose 156 previous appearances were as a reliever, limited the Padres to a two-out single by John Flaherty in the second. He walked three and recorded a career-high eight strikeouts. Ugueth Urbina allowed two runs over 2 2/3 innings before Mel Rojas got the last four outs for his 26th save. The loss cut the Padres' lead over second-place Los Angeles to one game in the National League West. In Philadelphia, Greg Gagne and Todd Hollandsworth each had two-run doubles and Raul Mondesi clubbed a two-run homer during an eight-run fourth inning as the Los Angeles Dodgers beat the Phillies 11-7. Mondesi had three hits and Wayne Kirby had three including a two-run triple for the Dodgers, who won for the eighth time in nine games and lead the National League wild-card race. Ismael Valdes (12-7) laboured for his first win since July 23, allowing six runs and nine hits over seven innings. The Phillies, the first team officially eliminated from post-season contention, have dropped six of their last seven. In Pittsburgh, the Houston Astros scored three times in the ninth to beat the Pirates 5-4. Jeff Bagwell led off the ninth with a double and came home on Derek Bell's game-tying double, making it 3-3. Bell and James Mouton, who singled, came home on a two-run single by pinch-hitter Tony Eusebio. Xavier Hernandez (4-4) pitched two innings for the win, despite surrendering an eighth-inning homer to Jermaine Allensworth that gave Pittsburgh a 3-2 lead. John Hudek earned his first save since June 13, 1995, despite allowing a leadoff home run to Jason Kendall in the bottom of the ninth. The first-place Astros have just four games remaining against N.L. Central opponents. In St Louis, Andy Benes scattered four hits over eight innings for his 12th win in 13 decisions and Ray Lankford belted a two-run homer to give the Cardinals a 2-1 triumph over the Colorado Rockies. Benes (15-9) allowed one run, walked five and struck out eight to improve to 12-1 since June 19. In New York, Roberto Petagine and Alvaro Espinoza hit back-to-back homers in the sixth and three pitchers combined on a six-hitter as the Mets broke an eight-game losing streak, 7-2 over the San Francisco Giants. The losing streak was New York's longest since 1993. Manager Bobby Valentine got his first win in five games since replacing the fired Dallas Green Monday. 6834 !GCAT !GSPO Major League Baseball standings after games played on Saturday (tabulate under won, lost, winning percentage and games behind): AMERICAN LEAGUE EASTERN DIVISION W L PCT GB NEW YORK 76 59 .563 - BALTIMORE 72 63 .533 4 BOSTON 69 67 .507 7 1/2 TORONTO 63 73 .463 13 1/2 DETROIT 49 87 .360 27 1/2 CENTRAL DIVISION CLEVELAND 80 55 .593 - CHICAGO 73 64 .533 8 MINNESOTA 67 69 .493 13 1/2 MILWAUKEE 66 71 .482 15 KANSAS CITY 62 75 .453 19 WESTERN DIVISION TEXAS 77 58 .570 - SEATTLE 70 65 .519 7 OAKLAND 66 72 .478 12 1/2 CALIFORNIA 62 74 .456 15 1/2 SUNDAY, SEPTEMBER 1 SCHEDULE CHICAGO AT TORONTO KANSAS CITY AT DETROIT MINNESOTA AT MILWAUKEE CLEVELAND AT TEXAS NEW YORK AT CALIFORNIA BOSTON AT OAKLAND BALTIMORE AT SEATTLE NATIONAL LEAGUE EASTERN DIVISION W L PCT GB ATLANTA 84 51 .622 - MONTREAL 72 62 .537 11 1/2 FLORIDA 65 71 .478 19 1/2 NEW YORK 60 76 .441 24 1/2 PHILADELPHIA 54 82 .397 30 1/2 CENTRAL DIVISION HOUSTON 74 63 .540 - ST LOUIS 71 65 .522 2 1/2 CHICAGO 67 67 .500 5 1/2 CINCINNATI 67 68 .496 6 PITTSBURGH 56 79 .415 17 WESTERN DIVISION SAN DIEGO 76 61 .555 - LOS ANGELES 74 61 .548 1 COLORADO 70 67 .511 6 SAN FRANCISCO 58 75 .436 16 SUNDAY, SEPTEMBER 1 SCHEDULE FLORIDA AT CINCINNATI SAN DIEGO AT MONTREAL HOUSTON AT PITTSBURGH SAN FRANCISCO AT NEW YORK COLORADO AT ST LOUIS ATLANTA AT CHICAGO LOS ANGELES AT PHILADELPHIA 6835 !GCAT !GSPO Results of Major League Baseball games played on Saturday (home team in CAPS): American League Kansas City 3 DETROIT 1 Baltimore 7 SEATTLE 6 Chicago 5 TORONTO 1 MILWAUKEE 3 Minnesota 2 TEXAS 6 Cleveland 3 OAKLAND 8 Boston 0 New York 14 CALIFORNIA 3 National League CHICAGO 12 Atlanta 0 Houston 5 PITTSBURGH 4 NEW YORK 7 San Francisco 2 CINCINNATI 22 Florida 8 Los Angeles 11 PHILADELPHIA 7 MONTREAL 4 San Diego 2 ST LOUIS 2 Colorado 1 6836 !GCAT !GSPO Thomas Muster had every reason to smile after easily reaching the fourth round of the U.S. Open Saturday, but he never did. The third-seeded Austrian bulldozed Sergi Bruguera out of the way, pounding the Spaniard 6-2 6-4 6-3 under the National Tennis Centre stadium lights. Muster, who plays with a perpetual scowl, pumped his fists in celebration but never broke a smile on the court, nor in his news conference afterwards. "When I go on the court I have to be intense," said the 28-year-old Muster. "That's the way I play, that's the way I train. That's not the way I am usually outside the court, it's just when I go on the court." However, Muster has added to his established reputation for grumpiness at this Open. He complained about being seeded third despite being ranked second in the world. He was among the more vocal critics of the first men's draw, which Open officials re-did under siege from players who alleged favouritism towards American stars. And Muster complained about being relegated to the grandstand court for his first two matches rather than the stadium court. In reaching the final 16 for the fourth year in a row at the hardcourt major, Muster has not lost a set and he was never seriously challenged by Bruguera. "His game suits mine perfectly," the more powerful Muster said of his fellow clay court specialist after the one hour, 41 minute win that sets up a meeting next with 13th-seeded Swede Thomas Enqvist. The matchup was expected to be a lengthy baseline battle. But Muster, the 1995 French Open champion, played with too much firepower and confidence for the 1993 and 1994 French titlist on this court surface. "I don't have the same confidence in myself when I play on hard court as when I play on clay," said Bruguera, the Olympic silver medallist. "I think he can play on any surface." 6837 !GCAT !GSPO Precocious 15-year-old Russian Anna Kournikova joined some of her more recognised elders in the fourth round of the U.S. Open by upsetting 14th-seeded Barbara Paulus Saturday. Kournikova, playing with seasoned poise in her first Grand Slam, won the last three games to beat the Austrian 3-6 6-2 6-4 in the spotlight of the National Tennis Centre stadium lights. "I tried to stay calm and I didn't lose my concentration,' said Kournikova, the youngest player in the field. Top-seeded defending champion Steffi Graf, third-seeded Arantxa Sanchez Vicario and seventh-seeded Jana Novotna had already made it safely through to the round of 16 earlier in the day. Their straight-set victories lacked the drama of Kournikova's one hour, 45 minute victory, which earned her a surprising second-week meeting with Graf. "It is definitely my dream to play Steffi," Kournikova said of Graf, who beat Natasha Zvereva of Belarus 6-4 6-2. "I was expecting to get to somewhere but I didn't expect to get this far. But this is definitely what I have worked far," said Kournikova, who has lived and trained at Nick Bollettieri's well-known tennis school in Florida since coming from Russia six years ago. Knotted at 2-2 in the second set, Kournikova rattled off seven games in a row to take the set and extend to a seemingly comfortable 3-0 third-set lead. But Paulus rallied with her own streak, taking the next four games for the lead. When Paulus went up 0-40 on Kournikova's serve in the next game, it appeared she was set to turn the lights off on the 15-year-old's Open. "I thought I had the match. I didn't think she would come back," said Paulus, who turns 26 on Sunday. Kournikova did come back, mixing up her shots with a veteran's guile. "She is very cool," said Paulus. "She doesn't get worried when she makes a mistake, she just plays." So far, Sanchez, the 1994 Open champion, has also just played, or toyed, with her opponents. Her latest victim was an overmatched Elena Likhovtseva. "Today was a perfect match for me," Sanchez said of her 6-1 6-0 romp over the Russian. Sanchez has not lost more than four games in a match here, but her task should become dramatically tougher starting in the next round against 16th-seeded Martina Hingis of Switzerland. Hingis, who turns 16 next month, reached the Open fourth round for the second consecutive year by beating Japan's Naoko Kijimuta 6-2 6-2. Sanchez is ready for Hingis, whom she edged in three sets earlier this year in their only career meeting. "I'm just thinking to play my game like I did today and see what happens," said Sanchez, who made just 11 unforced errors. 6838 !GCAT !GSPO Results in the Portuguese first division soccer matches on Sunday: Maritimo 3 Chaves 3 Leca 3 Uniao Leiria 0 Rio Ave 1 Salgueiros 1 Farense 1 Estrela Amadora 0 6839 !GCAT !GSPO Summaries of games played in the Spanish first division on Sunday: Betis 3 (Finidi George 14th minute, Roberto Rios 45th, Juan Sabas 85th) Athletic Bilbao 0. Halftime 2-0. Attendance 41,000. Atletico Madrid 2 (Juan Eduardo Esnaider 46th, Kiko Narvaez 49th) Celta Vigo 0. 0-0. 36,000. Racing Santander 3 (Pachi Ferreira own goal 45th, Cervera Alvaro 47th, Jose Luis Zalazar 80th). Valencia 2 (Goran Vlaovic 33, Romario 41st). 1-2. 17,000. Real Sociedad 1 (Andoni Imaz 34th) Sevilla 0. 1-0. 22,000 Rayo Vallecano 1 (Klimowicz 90th) Valladolid 2 (Alen Peternac 50th, Victor Manuel 67th). 0-0. 10,000. Hercules 2 (Manuel Alfaro 29th pen, Dubravko Pavlicic 81st) Extremadura 1 (Jose Tirado 84th pen). 1-0. 26,000. Zaragoza 2 (Gustavo Poyet 20th, 49th) Logrones 2 (Manel Martinez 56th, 85th). 1-0. 25,000. Oviedo 2 (Oli Alvarez 67th, Toni 86th) Barcelona 4 (Hristo Stoichkov 47th, 50th, Luis Enrique Martinez 76th, 89th). 0-0. 23,000. Tenerife 6 (Slavisa Jokanovic 12th, Antonio Pinilla 19th, Francisco Rojas 32nd, Chano Cruzado 69th, Oliver Neuville 81st, Juanele Castano 84th) Compostela 0. 3-0. 15,000. 6840 !C24 !CCAT !GCAT !GSPO Sweden recovered from a two goal deficit on Sunday to beat traditional rivals Finland 5-2 and win their World Cup ice hockey group. The victory, giving Sweden a clean sweep over all three group teams, puts the Swedes directly into the semifinals. Played in front of a capacity 13,500 crowd at the Stockholm Globe arena, Finland began strongly, scoring the only goal in the first period through Teemu Selanne. Sweden, although constantly threatening, fell further behind three minutes into the second period when Mika Nieminen put Finland 2-0 up. The Swedes levelled the scores with two goals in a minute then let rip with a three-goal blast in the final period that the Finns could not counter. Mats Sundin scored twice, once seconds from the end of the game with the Finnish goalminder off the ice, then captain Peter Forsberg scored the goal of the evening, cheekily fooling goalminder Kari Takko and scoring from the tightest of angles. 6841 !GCAT !GSPO Bulgarian striker Hristo Stoichkov struck twice in the second half to help Barcelona to a 4-2 win over Oviedo on the first weekend of the Spanish championship on Sunday. Champions Atletico Madrid began their title defence with a comfortable 2-0 victory over Celta Vigo. Stoichkov scored twice early after the interval but the home side fought back to take advantage of mistakes in the Barcelona back four before two late headed goals by Luis Enrique Martinez guaranteed Bobby Robson's men their three points. Former Barcelona striker Romario also scored on his return to Spain but Valencia squandered a 2-0 lead at Racing Santander to go down 3-2 after seeing international goalkeeper Andoni Zubizarreta sent off for handling the ball outside the area. Atletico played what should have been a home fixture in the Santiago Bernabeu stadium of arch-rivals Real Madrid because of pitch problems at their own ground. Former Real forward Juan Eduardo Esnaider obviously found the move to his liking and the Argentine international opened the scoring with a fine goal early in the second half. Kiko Narvaez made it two shortly afterwards with a spectacular effort. Celta played most of the game with 10 men after Chemo del Solar was sent off for handllng a shot by Jose Luis Caminero in the 15th minute. Serbian set-piece specialist Milinko Pantic was unable to convert the penalty. Former Ajax midfielder George Finidi scored on his home debut for Real Betis who recorded an impressive 3-0 win over Athletic Bilbao, while first-division newcomers Extremedura scored their first goal ever in the top flight, only to go down 2-1 at Hercules. Real Sociedad beat Sevilla 1-0 and Zaragoza surrendered a 2-0 lead to Logrones, who fought back to draw 2-2. On Saturday Real Madrid disappointed their fans and new manager Fabio Capello with a scrappy 1-1 draw at Deportivo Coruna. Tenerife shocked last year's surprise outfit Compostela with a 6-0 drubbing that makes them the first leaders of this year's championship ahead of Monday night's game between Espanyol and Sporting Gijon. Compostela ended the game with just eight men while six different Tenerife players found the target. 6842 !GCAT !GSPO Sweden beat Finland 5-2 (period scores 0-1 2-1 3-0) in their World Cup ice hockey European group first round match on Sunday: Scorers: Sweden - Niklas Sundstrom (32.28), Niklas Lidstrom (33.09), Mats Sundin (43.48, 59.32) Peter Forsberg (55.44) Finland - Teemu Selanne (11.04), Mika Niemenen (22.41) Final group standings (tabulated under played, won, drawn, lost, goals for, against, points): Sweden 3 3 0 0 14 3 6 Finland 3 2 0 1 17 11 4 Germany 3 1 0 2 11 15 2 Czech Republic 3 0 0 3 4 17 0 6843 !GCAT !GSPO Results in the Spanish first division on Sunday: Oviedo 2 Barcelona 4 Real Sociedad 1 Sevilla 0 Racing Santander 3 Valencia 2 Real Betis 3 Athletic Bilbao 0 Rayo Vallecano 1 Valladolid 2 Zaragoza 2 Logrones 2 Hercules 2 Extremadura 1 Atletico Madrid 2 Celta Vigo 0 Tenerife vs Compostela late kick-off Played on Saturday: Deportivo Coruna 1 Real Madrid 1 To be played on Monday: Espanyol vs Sporting Gijon Tenerife 6 Compostela 0 6844 !GCAT !GSPO AC Milan's veteran captain Franco Baresi will be out for a month after twisting his left ankle in an Italian Cup victory on Sunday, doctors said. The former international defender sustained the injury in the 28th minute of Milan's 2-0 victory over Empoli in a second-round cup replay and will miss start of the Serie A season next week. "We'll be missing a man who's crucial to the defence," Milan's new Uruguayan coach Oscar Tabarez said. Milan were held to a 1-1 draw by Empoli in their first encounter but in the return they outclassed opponents who have just been promoted to the second division. Marco Simone scored Milan's goals in the seventh and 41st minutes. Liberian striker George Weah, the World Player of the Year who has been struggling to rediscover his form, came on for 15 minutes in the second half. 6845 !GCAT !GSPO Britain's Chris Boardman staged a perfect dress rehearsal for his attempt to break the world hour record by winning the prestigious 52-km Grand Prix Eddy Merckx time trial in impressive style on Sunday. Boardman, who broke the world 4-km pursuit record at the world championships last week, plans to attack the record of Swiss Toni Rominger of 55.291 km, set in Bordeaux in October 1994, on the Manchester indoor velodrome, probably on Friday. The Briton hurtled twice round the 26-km course in Brussels at an average speed of 51.25 kph, finishing one minute 37 seconds clear of American Lance Armstrong with Belgian Johan Museeuw, last year's winner, another 12 seconds adrift in third place. Museeuw started fastest, leading Boardman by three seconds after four kilometres. But Boardman, the winner here in 1993, then moved up a gear and was five seconds faster after 13 kms before taking full control. Tour de France winner Bjarne Riis of Denmark suffered the indignity of being overtaken by Museeuw after 37 kms although the Belgian had started two minutes behind him. Riis finished in ninth place, four minutes eight seconds behind Boardman. Merckx's son Axel took 11th place, more than five minutes behind. 6846 !GCAT !GSPO Results of the Grand Prix Eddy Merckx individual time trial over 52 kms on Sunday: 1. Chris Boardman (Britain) 1 hour 0 minutes 53 seconds 2. Lance Armstrong (U.S.) 1:37 behind 3. Johan Museeuw (Belgium) 1:49 4. Jan Ullrich (Germany) 3:10 5. Viatcheslav Ekimov (Russia) 3:13 6. Abraham Olano (Spain) 3:15 7. Rolf Aldag (Germany) 3:20 8. Marc Streel (Belgium) 3:45 9. Bjarne Riis (Denmark) 4:08 10. Andrea Ferrigato (Italy) 4:43 11. Axel Merckx (Belgium) 5:06 12. Nico Mattan (Belgium) 5:49 13. Eddy Seigneur (France) 7:03 14. Marco Serpellini (Italy) 7:10 15. Magnus Backstedt (Sweden) 8:24 6847 !GCAT !GSPO Result of an Italian Cup second round replay match played on Sunday. Milan beat Empoli 2-0 (halftime 2-0). Scorer: Marco Simone (7th, 41st) Atttendance: 23,000 Verona beat Bari 3-0 (halftime 1-0) Scorers: De Vitis (penalty 40th), Corini (84th, penalty 90th) Attendance: 7,000 6848 !GCAT !GSPO Bundesliga pace-setters Cologne on Sunday suffered their second major shock in two days when Zwickau of the second division dumped them out of the German Cup 3-1 after extra time. Only a day earlier, Cologne learned out of the blue that their former international goalkeeper Bodo Illgner had signed for Real Madrid in the middle of the night, minutes before the expiry of the Spanish transfer deadline. Cologne, who led the league until last week after three straight wins, appeared to have put the shock behind them on Sunday when Holger Gaissmayer gave them the lead in the 17th minute. But Zwickau gained the upper hand in the second half, equalising in the 70th minute and clinching a deserved win with two goals in extra time. 6849 !GCAT !GSPO Greece beat Bosnia 3-0 (halftime 1-0) in a European zone group 1 World Cup qualifier in Kalamata on Sunday. (Corrects group). Scorers: Greece - Marinos Ouzounidis (42nd minute), Stratos Apostolakis (77th), Demis Nikolaidis (83rd) Attendance - 7,000 6850 !GCAT !GSPO Result in the second round of the German Cup on Sunday: Zwickau 3 Cologne 1 (after extra time. Score after 90 minutes 1-1) 6851 !GCAT !GSPO Barcelona and their former coach Johan Cruyff begin what could become a lengthy legal battle on Monday when a Spanish court will decide whether the Dutchman's dismissal was reasonable. Cruyff's lawyers are claiming around 100 million pesetas ($800,000) from the club, while Barcelona allege that the coach, who was sacked in May, committed "grave professional faults". Cruyff -- who won four successive Spanish league titles and the European Cup in his eight-year stint at Barcelona -- has also asked his lawyers to take action over remarks made by club president Josep Lluis Nunez. Nunez accused Cruyff of "selling himself" to groups looking to take control of the club in a highly-charged news conference the day after the dismissal. 6852 !GCAT !GSPO The Netherlands needed a last minute penalty, converted by substitute Jean Paul van Gastel, to salvage a 2-2 draw against World Cup holders Brazil in a soccer friendly on Saturday. The Dutch, captained for the first time by Frank de Boer, had the best of the early play, but it was Brazil who broke the deadlock after 14 minutes through Giovanni. Finding himself unmarked on the edge of the six-yard area, the Barcelona striker slotted the ball past Edwin van der Sar's outstretched right hand. Both teams had further chances in the first half but failed to convert them. The game's tempo picked up in the second half with Bergkamp looking increasingly dangerous around the box. In the 52nd minute the Arsenal striker broke down the right wing and pulled the ball back for Ronald de Boer, who fired a low hard shot into the left-hand corner of the goal. But the Dutch supporters, who only half-filled Ajax Amsterdam's big new stadium, had just three minutes in which to celebrate before Marcello Goncalves put the Brazilians ahead again with another close range goal. The Brazilians looked on course for victory until Bergkamp was pulled down just inside the penalty area with seconds remaining. After the Brazilian players' protests died down, second-half substitute van Gastel of Feyenoord stepped up and gave 'keeper Carlos Germano no chance with the spot kick. -- Amsterdam newsroom +31 20 504 5000, Fax +31 20 504 5040 6853 !GCAT !GSPO India collected their first points in the four-nation Singer World Series one-day limited overs cricket tournament on Sunday when they comfortably beat Zimbabwe by seven wickets. Powered by 68 from opening bat Ajay Jadeja, who took the "Man of the Match" award, and excellent leg-spin bowling by Anil Kumble, who captured four wickets for 33, India passed Zimbabwe's total of 226 with six overs to spare. Jadeja and skipper Sachin Tendulkar provided India with an excellent start hitting 91 in the first 15 overs. The fast outfield gave the fielders little chance of stopping the boundaries and Zimbabwe's total was made to look small in the face of the run-flow from the two Indian openers. Tendulkar, driving fluently, was out for 40 to a bad shot when he tried to pull Heath Streak from outside off stump, only to see it end up in mid-wicket's hands. Sourav Ganguly and Mohammed Azharuddin kept up the momentum with 36 and 40 not out before Vinod Kambli (29 not out) put the finishing touches to the match with his fourth four. Earlier, Andy Flower with a well-struck 78 figured in half-century partnerships with brother Grant Flower (26) and Craig Wishart (53) to push Zimbabwe past the 200-run mark, but other contributions were sparse. 6854 !GCAT !GSPO Scoreboard of the fourth Singer world series limited overs cricket match, between India and Zimbabwe on Sunday: Zimbabwe A. Campbell c Tendulkar b Prasad 10 P. Strang st Mongia b Joshi 19 A. Flower c Prasad b Kumble 78 C. Evans c Mongia b Joshi 4 G. Flower b Kumble 26 C. Wishart c Joshi b Kumble 53 G. Whittall run out 1 M. Dekker c Kumble b Srinth 3 H. Streak b Kumble 2 A. Shah c Azharuddin b Prasad 6 B. Strang not out 1 Extras (lb-12 nb-2 w-9) 23 Total (all out, 49.4 overs) 226 Fall of wickets: 1-22 2-50 3-61 4-117 5-201 6-204 7-217 8-218 9-220 10-226 Bowling: Srinath 10-2-42-1, Prasad 7.4-0-42-2, Joshi 10-1-37-2, Jadeja 5-0-20-0, Tendulkar 4-0-20-0, Kumble 10-2-33-4, Ganguly 3-0-20-0. India A.Jadeja c A.Flower b Evans 68 S.Tendulkar c B.Strang b Streak 40 S.Ganguly c B.Strang b P.Strang 36 M.Azharuddin not out 40 V.Kambli not out 29 Extras (lb-1 nb-6 w-9) 16 Total (three wickets, 43.5 overs) 229 Fall of wickets: 1-91 2-148 3-161. Did not bat: R.Dravid, N.Mongia, A.Kumble, S.Joshi, J.Srinath, V.Prasad. Bowling: Streak 10-1-46-1, B.Strang 7.5-0-52-0, P.Strang 10-0-73-1, G.Whittall 9-0-28-0, G.Flower 2-0-10-0, Evans 5-0-19-1. Man of the Match: Ajay Jadeja Next Series match: Sri Lanka v Zimbabwe, September 3. 6855 !GCAT !GSPO India beat Zimbabwe by seven wickets in the fourth match of the Singer World Series one-day limited overs cricket tournament on Sunday. Scores: Zimbabwe 226 in 49.4 overs, India 229-3 in 43.5 overs. 6856 !GCAT !GSPO Zimbabwe were all out for 226 in 49.4 overs after being put in to bat in their 50 overs against India in the fourth limited overs match of the Singer world series tournament on Sunday. 6857 !GCAT !GDIS !GENV A minor earthquake shook eastern Romania on Sunday, but no incident was reported, state television said. The state television quoted the National Earth Physics Institute as saying the tremor -- with a preliminary magnitude of 4.3 degrees on the Richter open-ended scale -- occured at 4.26 p.m. local (1326 GMT) in the eastern mountain region of Vrancea, 300 km (190 miles) northeast of the capital. It said the tremor was not felt in Bucharest. 6858 !GCAT Prepared for Reuters by The Broadcast Monitoring Company SUNDAY TELEGRAPH -- SECRETIVE PARTNERS SWOOP ON LONDON LANDMARKS A group of secretive foreign multimillionaires are to spend 275 million stg on some of London's best-known landmarks. One of the prime targets is the Royal Court Mint. Their vehicle is Capital and Income Group, a West End-based holding company for 24 off-shore subsidiaries, which is in talks with pensions firm Hermes for its long leasehold interest in Royal Mint Court, which is worth more than 80 million stg. -- FLEMING LIFTS 700 MILLION STG FUNDS FROM JARDINE The British investment bank Robert Fleming has withdrawn 700 million stg of funds placed with Jardine Fleming, its Far Eastern joint venture. The money is to be managed in London. The news comes as Jardine is engaged in a damage limitation exercise following its public humiliation by regulators last week. -- AIRBUS TO LAND 3.5 BILLION DOLLAR ORDERS Airbus Industrie is to announce aircraft orders worth 3.5 billion dollars. The manufacturer has beaten off Boeing to secure a big order from the South Korean carrier Asiana. Airbus is expected to announce that it has signed contracts with several other international airlines, including Cathay Pacific. -- WINTERTHUR IN SKIPTON LINK The Skipton Building Society is to unveil plans for an alliance with Europe's fourth largest insurer Winterthur, which has expressed its intention to buy a building society to bolster its UK presence. The joint venture is intended to be an attack on the supremacy of traditional high street lenders by the Swiss insurance giant, attracted to the market by a surge in home loan demand and a recovery in house prices. -- F AND C STALLS HYPO TAKEOVER There is the possibility of collapse in talks between five Foreign and Colonial investment trusts and Germany's Hypo bank over the future of their 30 billion stg fund management joint venture. Hypo is prepared to quit the talks unless a series of emergency meetings breaks the deadlock. SUNDAY TIMES -- ROLLS-ROYCE SET TO CLINCH EGYPTIAN ORDER Rolls-Royce is poised for a two billion stg order from a private Egyptian company to power a fleet of Russian passenger jets. And five groups, including GKN, Vickers and British Aerospace, stand to make gains from a one billion stg defence deal with Qatar, one of the Gulf emirates. -- TUCKEY GOES TO PHOENIX FROM BARINGS The corporate financier who was deputy chairman of Barings at the time of its collapse Andrew Tuckey is to make his City comeback by joining the investment-bank boutique Phoenix Securities. After the collapse of Barings he stood down from his job and was not disciplined by the Securities and Futures Authority. -- AND NOW IT'S TIME FOR VIRGIN COSMETICS In an attempt to take on the Body Shop, Virgin Group is planning to launch a range of branded cosmetics and toiletries. The move is part of a two-pronged attack by Branson and his partners Rory and Tim McCarthy, who head the Alberta-quoted McCarthy Corporation. A new vehicle, Victory Corporation, will act as the holding company for the new business, including a jeans company. -- APM HEADS FOR SPENDING SPREE Australian Mutual Provident, Australia's top life insurance company, is poised for a three million stg spending spree in Britain and America. It has appointed the American investment bank Morgan Stanley to draw up a list to include life and pension providers and fund managers. The three billion stg will be used partly to expand Virgin Direct, the successful financial-services operation launched by Branson. -- UNILEVER PLANS A CULL OF ITS WEAKER BRANDS The Anglo-Dutch consumer-goods giant Unilever is to cull businesses accounting for up to seven billion stg of annual sales, nearly 20 per cent of its total. In group plans to sell or wind down brands that stand little chance of holding one of the top two spots in their sector. THE OBSERVER -- MILLIONS TO LLOYD'S ACTION GROUPS Action group committees are set to earn millions out of a settlement in the five-year campaign against Lloyd's of London to gain a rescue deal for Names. They are to gain a multi-million stg slice of the 3.2 billion stg Lloyd's rescue package with some chairmen receiving personal cash bonuses of up to 500,000 stg. The bonuses have infuriated ordinary Names, who accuse their leaders of greed and hypocrisy. -- CHARGECARD DELUGE AS BT SCHEME GOES MAD British Telecom is bombarding people with chargecards they have not ordered. BT blames an administrative error which they intend to investigate. The free chargecards allow callers to ring from a pay phone in Britain and abroad and charge the call to their home phone numbers. BT launched an extensive promotion campaign in April and so far seven million cards have been distributed. -- MANAGERS MIGRATE TO LABOUR An opinion poll, carried out by the Institute of Management, suggests that there is a large and sustained swing to the Labour Party among Britain's managers. 66 per cent now believe New Labour is more in tune with business than old Labour. The findings vindicate Tony Blair's drive to end the former image of Labour's corporatist identity. On Wednesday Labour will launch its Business Prospectus, designed to reassure industrialists and the City the economy is safe under a Labour government. -- CITY FORECASTS 'POLITICAL' RATE CUT According to a survey carried out by financial information company MMS International, most City economists expect Chancellor Kenneth Clarke to brush aside resistance from the Bank of England and cut interest rates again for political reasons. Three in every four believe there is no economic justification for a further base rate cut from 5.75 per cent. -- SPECIALISTS TAKE OVER AT DSL Hambros, the merchant bank, has sold control of Defence Systems Limited, the security specialist, to a management buyout lead by Alastair Morrison, DSL founder, in a deal worth eight to 10 million stg. Hambros has been keen to sell DSL as part of a programme to boost profits and its City standing by disposing of non-banking interests. INDEPENDENT ON SUNDAY -- P AND O ACTS TO BEAT OFF EUROTUNNEL The transport and construction giant P&O has started negotiations with rival ferry company Stena Line over collaboration on cross-channel ferry routes. It has also begun talks with Brittany Ferries and SeaFrance with the aim of creating a wide-ranging response to the threat from Eurotunnel. -- LLOYDS TO MERGE INSURERS Lloyds TSB is planning a merger of TSB's insurance business with its majority-owned subsidiary Lloyds Abbey Life, as part of its rationalisation programme. Lloyds TSB will sell the TSB insurance business to Lloyds Abbey Life at a fair market price, in the region of 600 million stg, in return for shares. -- LABOUR ON ATTACK OVER ATOMIC SALE The privatisation of the former commercial arm of the UK Atomic Energy Authority, AEA Technology, has been attacked by the Labour Party as being against the national interest because of its role in the country's nuclear defence. The Government hopes to raise 200 million stg from the sell-off, possibly the last before a general election. -- GEC RETREATS ON BOSS'S PAY GEC will back down over the most controversial aspect of the remuneration package it intends to pay its new managing director George Simpson. Lord Rees-Mogg, chairman of GEC's remuneration committee, indicated that the company was prepared to be flexible over Mr Simpson's bonus scheme to pacify the institutions. -- BRENT WALKER BANKS REJECT PUBMASTER BIDS The sale of Brent Walker's Pubmaster subsidiary is in doubt after the debt-laden betting and pubs group's banks rejected all four bids as substantially below the price expected. The board was expecting offers of 150 to 160 million stg, however, the four leading bidders had offered closer to 130 million stg and had been told to think again. MAIL ON SUNDAY -- TORIES SET TO AXE 'UNFAIR' RATE BILLS The Department of Environment is working on plans to scrap the controversial uniform business rate in the run-up to the next general election. The rate has been criticised for crushing small businesses since it replaced local business rates in 1990. The Conservative Party considers the vote from small businesses as crucial to its election fortunes and will be included in the party's manifesto. -- LLOYD'S FIRM IN PREMIUM 'STING' Brokers at Bain Hogg have been secretly inflating corporate clients' insurance premiums by up to 180 per cent. The firm is believed to have benefited from at least half of the extra cash. Its accounting system allowed both the inflated and real premiums to be entered in its records. Bain's parent company Inchcape hopes to demerge the company soon. -- BRANSON ANGER OVER ADS ATTACK The Advertising Standards Authority has asked Richard Branson to tone down an advertising campaign for Virgin Direct after offending the life insurance industry. Branson has been running the two million stg campaign in national newspapers and with direct marketing literature since Virgin Direct was launched 17 months ago. The ASA council is expected to make an announcement next month after reviewing evidence from Virgin. -- REUTERS IN DRIVE FOR BUSINESS BONANZA Peter Job, chief executive of Reuters, the news and information group, is planning a new drive to increase the company's share of the growing business-information market. He has approved plans for trebling sales by the business products division by the end of 1997. The move is designed to recover ground already captured by rivals such as Pearson's Profile and Reed Elsevier's Lexis-Nexis, and will intensify the competition against market leader MAID. -- SOCCER'S 2.3 BILLION STG TELEVISION SCORELINE Due to the growth of pay-TV Premier League football clubs are to make up to 2.3 billion stg a year from TV by 2004. Revenue from TV rights has soared 1,600 per cent since 1989. The latest BSkyB/BBC deal with the Premier League pays 743 million stg over four years. BMC +44-171-377-1742 6859 !C42 !CCAT !E41 !ECAT !GCAT !GJOB !GPOL The number of workers made redundant in Britain has almost doubled over the last year, the opposition Labour party said on Monday. Using information from the government's Labour Force survey, it said the number of people made redundant in the winter months of 1995/96 was 225,000 compared with 119,000 the year before. The Party also said that on average 57.7 percent of those who became unemployed between October 1995 and January 1996 were last unemployed and claiming benefit less than 12 months previously. "This shows that more than half of people finding new jobs are in work for less than a year," it said. Labour's employment secretary Ian McCartney said the government has created a revolving door economy. "These figures show why job insecurity has become the main growth industry in Britain and why no-one believes ministers' false boasts about the economy." -- London Newsroom +44 171 542 7717 6860 !E21 !E211 !E41 !E411 !ECAT !GCAT !GJOB !GPOL Britain's Trades Union Congress (TUC) urged the Government on Monday to adopt a package of investment and employment measures costing some three billion stg in its November budget for 1997/98. The TUC, Britain's main union confederation, called for one billion stg of investment in social housing, school buildings and urban regeneration, calculating this could create up to 30,000 jobs in the short term. It also wanted a 1.4 billion stg "Back to Work" scheme that would provide 330,000 training places and jobs for the long-term unemployed and those likely to be affected by industrial change. The TUC wants the government to tackle the growing problem of labour market insecurity by reversing cuts in unemployment benefits to be introduced from October, and in the help given to unemployed people with home mortgages. This would cost 450 millon stg in 1997/98, it said. The TUC reckons the number of people out of work for over a year will still be more than 700,000 by the end of 1997; yet the government is slashing training programmes for these people at the same time as reducing the period of entitlement to unemployment benefit, it said. -- Alan Raybould, London Newsroom +44 171 542 7717 6861 !GCAT Following are some of the major events to have occurred on September 8 in history. 1157 - Richard I, Coeur de Lion (the Lion Heart) born. He became king of England in 1189. He took the vow of the crusader and travelled to the Holy Land with Philip II of France, conquering Cyprus on the way. 1565 - Spaniard Don Pedro Menendez de Aviles founded the first Catholic settlement in America at St Augustine, Florida. 1664 - The settlement of New Amsterdam was seized from Dutch governor Peter Stuyvesant by the English under Colonel Richard Nicholls without a shot being fired. It was later renamed New York after James, Duke of York, the future King James II. 1755 - In the Seven Years War in which the Indians struggled against the French for control of North America, Colonel William Johnson with his English militia defeated a combined French and Indian force in the Battle of Lake George. 1760 - British troops under Jeffrey Amherst defeated the French in the Battle of Montreal in the Seven Years War. The resulting loss made the French surrender their arms throughout Canada thus making the country a British dominion. 1831 - Russians under General Paskevich defeated 30,000 Poles under General Dembinski in the battle for Warsaw in the second Polish rising. Over 9,000 Poles died in the three-day battle. 1841 - Antonin Dvorak born. Czech composer, he became director of the National Conservatory of Music, New York 1892-95. He wrote nine symphonies including "From the New World". and is also famous for his Cello Concerto and "Slavonic Dances". 1888 - Annie Chapman was found disembowelled in an East London street, the second victim of "Jack The Ripper". 1900 - A hurricane with winds of 120 m.p.h. and a following tidal wave at Galveston, Texas, killed at least 8,000 people and destroyed over 2,500 buildings in the city. 1925 - Peter Sellers, British comedian and actor born. Best known for his part in the British radio series "The Goon Show" and his role as Inspector Clouseau in several "Pink Panther" films. 1935 - Louisiana Senator Huey P. Long was shot while attending a session of the state House of Representatives in Baton Rouge. Fatally wounded, he died two days later. 1941 - In World War Two, the blockade of Leningrad began as the German army encircled the city, cutting it off from the rest of the country. The siege lasted until January 1944 with almost one million civilians being killed. 1943 - General Eisenhower announced the unconditional surrender of Italy in World War Two. 1944 - Fired from The Hague, the first German flying V-2 bombs landed at Chiswick in London. Three people were killed. 1949 - Richard Strauss died. German composer known for his songs and operas especially "Der Rosenkavalier". His tone poem "Also Sprach Zarathustra" became more widely known after being used in the film "2001-A Space Odyssey". 1951 - Treaty of Peace was signed in San Francisco with Japan and representatives of 49 other nations. The treaty came into force in April 1952 when Japanese sovereignty was again recognised. 1954 - The South East Asia Defence Treaty was signed in Manila by representatives of eight nations including New Zealand USA and the Philippines. The treaty provided for collective response should any signatory be attacked. 1967 - A new constitution came into effect in Uganda, making the country a republic. 1974 - President Ford granted Richard Nixon an unconditional pardon for all federal crimes he may have committed while he was in office. 1979 - Jean Seberg U.S. born actress was found dead in her car in Paris. She had appeared in "Saint Joan" but was best remembered for her appearance in "Breathless" and "Lilith". 1994 - A USAir Boeing 737 crashed near Pittsburgh International Airport as it was coming in to land from Chicago. All 132 people on board were killed. 1995 - Major players in the Yugoslav crisis agreed on principles for peace in Bosnia, taking a significant step towards ending Europe's worst conflict since World War Two. 6862 !GCAT !GDIS Three climbers, two Britons and a New Zealander, are missing on a mountain in Pakistan, the British Foreign Office said on Sunday. A spokesman said the two Britons were Stephen Thornley and Andrew Boas, but did not give their ages. He said a family member had asked his office and the British High Commission (embassy) in Islamabad to investigate. The British Broadcasting Corporation (BBC) reported the other climber was New Zealander Chris Hoare and said the three were part of a team trying to climb Disteghil Sar, one of the world's highest mountains. The BBC said they were last seen three weeks ago, but the Foreign Office could not confirm this. 6863 !GCAT !GVIO About 1,500 Kurds living in London demonstrated for peace on Sunday in a protest made timely by an upsurge of violence in northern Iraq. The Peace in Kurdistan festival had been scheduled anyway, but took on extra significance amid reports that Iraqi President Saddam Hussein's troops had moved into rebel Kurd-held areas. The demonstrators, carrying Kurdish flags and placards reading "Saddam's Troops out of Kurdistan," chanted "Long Live Kurdistan" and danced to traditional folk music during the rally in central London. 6864 !GCAT !GDIP !GVIO British Prime Minister John Major and U.S. President Bill Clinton held a 20-minute telephone conversation on Sunday on the crisis in northern Iraq, a spokesman for Major said. "They discussed the situation in northern Iraq and they are working closely together on how they should respond," the spokesman said. Clinton placed U.S. forces in the region on high alert after Iraqi troops supporting Kurdistan Democratic Party (KDP) leader Massoud Barzani captured the city of Arbil from a rival Kurdish group on Saturday. About 70 U.S., British and French aircraft have been based in southern Turkey to prevent Baghdad's forces from attacking Kurds in northern Iraq since President Saddam Hussein tried to take control of the region shortly after the 1991 Gulf War. The force includes six British Tornado GR1 fighter-bombers equipped with laser-guided bombs, anti-armour cluster bombs and the JP233 runway-busting device. Britain also has two destroyers on patrol in the Gulf with Sea Dart missiles, torpedoes and Lynx helicopters. Iraq has warned the United States to keep out of its Kurdish north and threatened to turn the area into another Vietnam if Washington intervened. 6865 !GCAT !GODD His neighbours call it noise pollution and local authorities say it's as bad as a ghetto blaster, so bagpiper Gary Stronach says he is taking his music where it will be appreciated -- the United States. Stronach, one of only 25 professional bagpipe teachers in Scotland, said he would give lessons at a university in Virginia after his local council told him he could not practise at home. "I am really angry with my neighbours," Stronach said. "I don't think it is the volume of noise that is the problem but the amount of time that I practise. I have to put in three or four hours a day." A spokesman for Perth and Kinross Council was unsympathetic. "There are no set rules as to what constitutes noise pollution -- there is no difference between someone playing the bagpipes and a ghetto-blaster," he said. Stronach said he would leave next week and had been awarded a U.S. visa because he was an "exceptional ethnic musician". "I am extremely bitter that I have got to leave Scotland to do this. It is my country and it will be extremely hard to leave," he said. 6866 !GCAT !GENT Edinburgh's festival month ended at the weekend with organisers claiming a record-breaking box office success for the 50th annual arts extravaganza. Ticket sales for the official International Festival passed the two million pound ($1.5 million) mark for the first time, despite cancellations of some major offerings and a mixed reception from both critics and public for much of the rest. The Fringe, the world's largest art festival, sold more than 1.5 million tickets for 1,301 different shows offered by 650 companies over four weeks. The Military Tattoo on Edinburgh Castle esplanade had even more success. It sold 99.38 percent of 217,000 tickets available for performances of precision drill, Zulu warriors, military bands, and massed pipes and drums from Scotland, Canada and Hong Kong. The Film Festival kicked off with a gala premiere featuring its Edinburgh-born patron Sean Connery and notched up a record 110,000 ticket sales in two weeks. The one-week International Jazz Festival also topped previous sales. Lord Provost (Lord Mayor) Eric Milligan said the festivals add about 140 million pounds ($218 million) to the city economy. "Edinburgh is bursting," said Brian McMaster, director of the official festival. "I don't think it's ever been so busy." "It's really satisfying to see so many people queuing up in the street to buy tickets," added Fringe director Hilary Strong. "We have sold tickets to a much wider audience than ever before." The official festival suffered several cancellations. Concerts were not greatly affected by the withdrawal of leading conductors like Mariss Jansons. But cancellation of two solo drama pieces -- Robert Lepage's "Elsinore" after equipment failure and "The Seven Sacraments of Nicholas Poussin" by Nicolas Bartlett's illness -- were costly blows. The world premiere of "Ines de Castro", first full-length opera by contemporary Scottish composer James MacMillan, was judged to fall short of his earlier promise. Critics were also disappointed in Houston Grand Opera's "Four Saints in Three Acts" by U.S. composer Virgil Thomson with libretto by Gertrude Stein. Two Gluck operas produced by dancers, one by the American Mark Morris and the other by Germany's Pina Bausch, also had a mixed reception. "I don't think dancers prancing about centre stage as the real characters sing from the wings is opera," one disgruntled visitor said as he left the Festival Theatre. ($1=.6420 Pound) 6867 !GCAT !GVIO A push by Iraqi armed forces into the north of the country to help one of two major Kurdish factions could lead to the region being split into pro-Iraq and pro-Iran camps, the leader of the rival faction said on Sunday. Jalal Talabani, head of the Patriotic Union of Kurdistan (PUK), told BBC radio it could also spell the end of the West's operation in northern Iraq to protect the Kurds in the hope of forging a united opposition to President Saddam Hussein. Iraqi troops backed by armour and artillery intervened on Saturday on the side of Massoud Barzani, leader of the Kurdistan Democratic Party (KDP), to recapture the Kurdish stronghold of Arbil from the PUK. Iraq said earlier on Sunday it would withdraw its troops. Washington expressed scepticism about the pledge. In the radio interview, Talabani dropped a broad hint that his group would look to Tehran for support if Washington and its allies did not respond to Saddam's intervention. "I am going to tell you frankly. We are going to wait some days, or let us say one week, to see what the reaction is of the United States and the West. If the West betrays us...we will surely turn to anyone who is ready to help us," he said. Asked whether this could lead to an escalation of he conflict, Talabani said: "Of course, it means that the West will be finished in the area. The area will be divided into one group pro-Iraqi and one pro-Iranian." The Iraqi thrust into Arbil was the first in the area since Washington and its Western allies set up an air exclusion zone in northern Iraq after the 1991 Gulf War to protect Iraqi Kurds against attacks by Baghdad. Interviewed on the same BBC programme, London-based KDP spokesman Hoshiyar Zebari said he did not think Saddam would move deep into northern Iraq for fear of provoking Washington and its allies. "My understanding is that this was a limited operation and he's planning to pull back immediately to his lines. "He did not move to the actual safe haven area which is protected by the Allies against any Iraqi ground troops' movement. He has moved only slightly, about 15 km or so, into the No Fly zone. He has not come back to control the Kurdish areas," Zebari said. With elections looming in the United States and Britain, Saddam will think twice, Zebari added. "I doubt very much that they will dare to come back completely because of the consequences. I personally don't think that he will come and challenge at this stage the western coalition forces," he said. 6868 !GCAT !GPOL Britain's opposition Labour party said on Sunday it had accepted a one million pound ($1.5 million) donation from an animal rights group, the largest single cash gift from an outside body in its 90-year history. The Political Animal Lobby (PAL) said it had made the donation partly because Labour, favoured to win power at the next general election, was more open than the ruling Conservatives to a ban on fox hunting. Labour leader Tony Blair on Sunday reaffirmed that he would allow members of parliament a free vote on whether to ban fox hunting -- a move the Conservatives have thwarted -- but said his party's policy would not be swayed by the donation. "To anyone who gives funding, we made this absolutely clear to the animal welfare people and all the rest: we don't change an iota or a jot of policy," Blair told BBC television's "Breakfast with Frost" programme. PAL, founded in 1990, has made large contributions in the past to all of Britain's leading political parties. "Our supporters are British voters from across the spectrum who want to help animals by working through the democratic process. This work includes making donations to political parties in the same manner as the commercial sector has done for years," PAL said in a statement. Labour said it was delighted by the donation, which it saw as a significant endorsement of its animal rights policy, and contrasted its disclosure with the Conservatives' reticence on its funding sources. "We are receiving a donation from British donors which we are declaring publicly because our long-established policies accord with the organisation's aims. "The Tories receive donations often from foreigners, which they keep secret because organisations are trying to influence their decisions," the party said. Labour also published a list of 17 donors who gave more than 5,000 pounds to the party in 1995. They included a small fund management company, GLC, as well as better-known names such as media and leisure group Pearson Plc, whose flagship Financial Times newspaper urged its readers at the 1992 general election to vote Labour. Blair called on Prime Minister John Major to throw open the Conservatives' books in the same way as Labour. "Let's see where their money comes from. Perhaps we would have a cleaner election campaign that would do a bit more for politics of this country," he said. The Conservatives decline to disclose the source of their cash. But the party said last week that a steady stream of donations from businessmen and individuals had enabled it to pay off a 15.4 million pound overdraft. Blair said Labour, seen in the past as the enemy of business, would name more big donors in the run-up to the next general election, now at most eight months away. "For the first time you're going find substantial business people openly contributing to the Labour party," he said. "I think that will be a great breakthrough for Britain. I think it's absolutely appalling if you end up with one party that's supposed to be the party of business and the other party, not," the Labour leader said. ($1=.6420 Pound) 6869 !GCAT !GREL !GVIO Northern Ireland's dream of peace is fading fast, trampled underfoot by violent sectarian marches and under fire from Catholic and Protestant gunmen alike. On September 1, 1994, IRA guerrillas opened the door on peace by calling an unprecedented halt to their 25-year war against British rule of the province to try to join peace talks. Two years later the IRA is back at war, a matching ceasefire by their Protestant foes is creaking, and peace talks which resume on September 9 are deadlocked by age-old rivalries. "Everybody must realise that violence is not going to achieve anything in Northern Ireland," Irish Foreign Minister Dick Spring said of the IRA ceasefire anniversary. "Now more than ever, because of the difficulties during the summer, we've got to be around the table in serious and substantial negotiations," he said. But the omens are bad. Sinn Fein, political arm of Irish Republican Army guerrillas, is barred from the negotiations until the IRA calls a new ceasefire, which is judged unlikely. Their Protestant "Loyalist" rivals are courting expulsion from the peace negotiations in a row over a death threat against a wayward "hard man" called Billy Wright. And the province'e established political parties are back in their traditional trenches after a trial of strength this summer over the right of Protestants to parade their British loyalty. The British and Irish governments, sponsors of the Belfast peace talks, publicly cling to the negotiations as the only route to reconciliation between pro-British Protestants and pro-Irish Catholics and their political spokesmen. But the talks, chaired by former U.S. Senator George Mitchell, will suffer a serious loss of credibility if the spokesmen for Loyalists are expelled in row over Billy Wright, who is hostile to the Loyalist truce. It would leave at the table Protestant Unionist parties, who want continued British rule, and the moderate Catholic-backed Social Democratic and Labour Party (SDLP), who have been unable to reach a political settlement for a quarter century or more. Wright served a jail term for security offences but has never been convicted of membership of the outlawed Ulster Volunteer Force guerrillas of which he is a reputed leader. But the Combined Loyalist Military Command (CLMC), the umbrella group for Protestant militia, said he had to leave by Saturday night or face "summary justice" for opposing the Loyalist truce in effect since October 1994. He is at odds with the UVF's political representatives, the Progressive Unionist Party of David Ervine, who wants to maintain the Loyalist truce to remain at the negotiating table. The row is the latest shadow to fall across the talks since the IRA went back to war in February with a series of attacks on targets in Britain and a British army base in Germany. The IRA, which is said by security sources to have enough guns and explosives to keep fighting well into the 21st century, has not carried out any attacks in the province itself for fear of revisiting its backers with Protestant revenge attacks. Wright and other militant Loyalists believe the IRA should be punished for its renewed campaign with attacks in the province and in the predominantly Catholic Irish Republic. If his backers in the Loyalist camp carried out their policies, the IRA would inevitably be sucked into a war in the province itself and cast itself as the guardian of a 40 percent Catholic minority under attack from the Protestant majority. Security sources said known IRA leaders held talks with Catholic communities in July when Protestants demonstrated across the province at a ban on a march through the Catholic Garvaghy Road area of Wright's home town of Portadown. Police scrapped the ban, igniting a wave of Catholic anger which newly-appointed police chief Ronnie Flanagan said pushed the province "to the edge of the abyss." Martin McGuinness, senior strategist with Sinn Fein, said at the weekend that the Anglo-Irish peace process was "a shambles" that would have to be completely rebuilt, implying that a new IRA truce was extremly unlikely, if not impossible. Sinn Fein, whose demands for a united Ireland are at the heart of the conflict, says that the IRA will not discuss British or Unionist demands for a surrender of weapons until a political settlement is reached. His party is said by Irish officials to be pinning its peace strategy to a change of government in Britain where the ruling Conservative party must call elections by May next year which the Labour party is tipped to win. 6870 !GCAT !GPOL !GVOTE British opposition chief Tony Blair said on Sunday he would not abandon his firm leadership style or moderate policies to placate increasingly vocal critics on the left wing of his Labour party. Returning to the political fray after the summer break, a defiant Blair pledged to lead Labour into the next election offering a middle way between its old-style socialist policies and a ruling Conservative party that he said had grown stale. "As a country we shouldn't have to chose between a clapped-out Tory party that has failed the country, that has really no fresh ideas or energy to offer Britain, and switching the clock back under Labour. "There is a different way forward, where we are creating a more just, more fair society but we are also encouraging and rewarding enterprise and initiative. And that's the type of society I think the vast majority of people in Britain want to live in," Blair told BBC television's "Breakfast with Frost". Labour under Blair has carved out a twenty percentage point lead in opinion polls that the Conservatives, in power since 1979, will find it hard to overturn in the eight months before Prime Minister John Major must call a general election. But a vocal rump of veteran left-wingers is increasingly concerned that Blair has bought popularity by abandoning Labour's ideals and is running the party like a dictator. Blair was unrepentant, however. He agreed some in the party found change uncomfortable but said only by modernising itself could Labour be fit to lead Britain into the 21st century. "We can't live on the old ways, just like Britain can't live on its past. We've got a great past as a country but if we're going to have a great future we've got to put behind us some of the traditions of the past. "And exactly the same way for the Labour party: if you want to address the future you've got to modernise, and even though I will listen, I can't do something that I believe to be wrong," Blair, who has headed the party for two years, said. The Labour leader in effect challenged critics who say he ignores others' views to back him or sack him. "I don't act on some arrogant assumption that I always know best. But in the end leaders have got to lead. We've had six years of weak leadership in this country... I can only lead in the way that I do," the Labour leader said. Anticipating a Conservative pre-election onslaught on Labour as a tax and spend party, Blair said he had no plans to raise taxes and he did not believe that "soaking the rich" was the way to tackle unemployment and get people off welfare. Blair claimed a new survey showed that businessmen, once Labour's implacable foes, were warming to its economic policies. A Sunday Times poll of the chief executives of 50 leading companies showed 82 percent of them expected higher taxes and more inflation under Labour. But 44 percent said Labour would be no worse at running the economy and 48 percent backed the party's plans for a minimum wage. Blair, who will step up the charm offensive in London on Wednesday when he launches "Labour's Business Prospectus", said more and more firms were making financial donations to Labour. "Increasingly the Labour party is the party of business as well in this country. I think that will be a great breakthrough for Britain. I think it's absolutely appalling if you end up with one party that's supposed to be the party of business and the other party, not," the Labour leader said. 6871 !GCAT These are some of the leading stories in two London-based Arabic-language newspapers on Sunday. Reuters has not verified these stories and does not vouch for their accuracy. AL-HAYAT - Subscription at Kaznah Insurance of the United Arab Emirates exceeded $500 million. - Saudis consume fresh milk worth $1.72 billion a year. - Saudi Arabian Monetary Agency starts to pay $800 million to farmers. - Construction work on a new Gaza seaport to start next month. ASHARQ AL-AWSAT - Kuwait Petroleum Company posts $2.7 billion net profit in 1995. - National utility company starts activities on Sunday in Jordan. - Arab Investment Company posts $15.6 million operating income in the first half of 1996. - Lebanon seeks to market investment projects worth $1.7 billion. 6872 !GCAT !GPRO Prince Charles, less than a week after his divorce was finalised, is committed to becoming king with Camilla Parker Bowles, his long-time mistress, at his side, a British newspaper reported on Sunday. "I will never give either of them up. Never," the News of the World, a top-selling tabloid, quoted the 47-year-old prince and heir to the throne as telling a senior member of his inner circle. But the Mail on Sunday newspaper published a poll saying nearly 80 percent of Britons thought Parker Bowles must not be queen and 54 percent said Charles should give up the throne if he married her. Almost half said they actively disliked her. The Sunday Times reported: "The prince is motivated by two aims: he feels personal attacks on her are vicious and unfair and he realises that a huge shift in public opinion is needed it they are ever to marry." Public opinion seems to be squarely behind Charles's ex-wife, now known as Diana, Princess of Wales, who reluctantly agreed to the divorce that ended their 15-year-old marriage on Wednesday. She has always attributed the breakup of the union to Charles's long-running affair with Parker Bowles, a divorced mother of two. The MORI poll in the Mail on Sunday suggested that Britons were angry over the treatment of Diana, who was forced to relinquish her royal title as part of a reported 17 million pound ($26.5 million) divorce settlement. The newspaper said the findings posed "a question mark over whether Charles can ever combine his royal destiny with his desire for personal happiness without gravely offending his own subjects." Charles has publicly stated that he has no intention of remarrying and sources close to him say he has assured Queen Elizabeth that he will not risk damaging the already tarnished image of the monarchy by marrying without public support. One friend of the prince and Parker Bowles told The Sunday Times: "What is much more important to them both is that a very close and mutually supportative relationship is allowed to continue and thrive." Whether Parker Bowles is eventually accepted by the British public remains to be seen. She is older, stouter and less photogenic than Diana who has also proved herself to be a master manipulator of the media. The princess vowed she would not disappear quietly and held true to her promise when she flaunted her engagment ring on her first public appearance after the divorce. 6873 !GCAT (Compiled for Reuters by Media Monitors) THE AUSTRALIAN The weekend's Australian Football League competition produced some interesting results with merger club Hawthorn defeating its inevitable other half by one point. Brisbane lost to Collingwood on Saturday by 49 points and emotional scenes were at Subiaco Ova yesterday when Fitzroy played the last game in the clubs 113-year history, losing to Fremantle by 86 points. Page 19. -- Australian golfing ace Robert Allenby took out a close victory in the British Masters in Northampton on Saturday as he dedicated his third European tour victory to a friend who recently died of an AIDS-related illness. Page 21. -- Champion jockey Damien Oliver is set to team up with the promising three-year-old Paint in Saturday's A$251,000 (1200m)Ascot Vale Stakes at Flemington. However, any threat of poor weather for the Melbourne track could see Paint staying in the stables and missing out on a wet-day run. Page 23. -- THE SYDNEY MORNING HERALD Sydney Swans 35-point defeat of the Australian Football Leagues third-placed West Coast Eagles, 12.13 (85) to 6.14 (50), was achieved in the absence of star full-forward Tony Lockett. They are set to meet eighth-placed Hawthorn next Saturday at the SCG. Page 23. -- Australian Rugby League top placed Manly disposed of South Sydney 48-10 at the Sydney Football Stadium yesterday. Wests outlasted Illawarra 12-8 at Campbelltown on Saturday, the Sharks' gave Newcastle a 22-0 thrashing and Canberra bagged a much needed 36-0 win over South Queensland at the Sun Corp Stadium. Page 25. -- Australia has won their fifth medal in the world cycling track championships in Manchester with Michelle Ferris finishing third in the 500m women's time trial on Saturday. Ferris completed the circuit with a time of 35.694s behind France's Felicia Ballangr and Germany's Annett Neumann. Page 26. -- THE AGE Sydney's Australian Football League premiership chances are threatened by an injury to full-forward Tony Lockett, who has a groin strain and is in doubt for the club's first home final. Page SM3. -- Australian tennis player Jason Stoltenberg has lost his third-round match at the US Open after holding four match points against Javier Sanchez of Spain. The Spaniard put in a convincing performance, the final scores at 6-4, 3-6, 4-6, 6-2, 7-6. Page SM15. -- If a suitable television deal is struck, the National Basketball League is set to move to a summer season from October 1998. If all proceeds as planned for the League the familiar April-October season will continue next year before moving to a one-off February-June season in 1998. Page SM17. -- HERALD SUN For the first time in the history of the Australian Football League competition, finals matches will be played in four states, with Melbourne missing out on a first-round football final next Saturday. Sydney and Brisbane will host finals for the first tim, with Victoria only having one qualifying final when North Melbourne meet Geelong at the Melbourne Cricket Ground on Sunday. Page 1. -- Australian Football League's Tigers coach Robert Walls yesterday claimed 'you can toss a coin between any of the eight teams' in the finals. Walls, shortly after Richmond was defeated by North Melbourne, declared the premiership wide open. North coach Dens Pagan supported Walls' claim, saying competition was tight. Page 88. -- In a move which would make him the highest paid coach in the Australian Football League, Malcolm Blight has confirmed he will coach Adelaide next year. It is understood the contract is worth A$1.2 million over a three year term. After meeting with chairman Bob Hammond and chief executive Bill Sanders last night, a formal announcement will be made today. Page 88. -- THE DAILY TELEGRAPH Despite rife speculation in the racing industry that News Limited was poised to take over Kerry Packer's half share of Sky Channel, News Limited senior executives denied the rumours. The basis of much of the speculation has been the protracted racing Pay TV negotiations. A spokesperson for News Limited said there were no plans at this stage of a takeover. Page 25. -- Australian golfer Robert Allenby has won the British Masters at Northampton. He defeated Spanish Miguel Angel for the win of A$230,555, which is Allenby's biggest in his four-year professional career. Allenby dedicated his third European tour victory of te season to a young Melbourne man who died recently of an AIDS-related illness. Page 25. -- Financially struggling clubs in the National Basketball League will be told to smarten up their act or get out. A summer competition was also discussed at the NBL's biennial Owners Conference and Board Meeting after a proposal to switch from a winter to smmer sport was carried by a margin of 10 votes to four. NBL chairman Mal Speed said the switch would attract more television viewers and help the sport achieve every aspect of their potential. Page 27. -- Reuters Sydney Newsroom 61-2 373-1800 6874 !GCAT !GSPO Results of Australian rugby league matches played at the weekend: Played Sunday: Sydney Bulldogs 50 North Queensland 22 South Queensland 10 Canberra 36 North Sydney 38 Gold Coast 8 South Sydney 10 Manly 48 Sydney Tigers 10 Sydney City 24 Played Saturday: Western Suburbs 12 Illawarra 8 Cronulla 22 Newcastle 0 Played Friday: Auckland 6 Brisbane 38 Penrith 24 Parramatta 16 Western Reds 16 St George 22 Premiership standings (tabulate under played, won, drawn, lost, points for, against, total points): Manly 22 18 0 4 549 191 36 Brisbane 22 17 0 5 607 263 34 North Sydney 22 15 2 5 598 325 32 Sydney City 22 15 1 6 521 321 31 Cronulla 22 14 2 6 399 268 30 Canberra 22 13 1 8 538 384 27 St George 22 13 1 8 443 360 27 Western Suburbs 22 12 1 9 394 434 25 Newcastle 22 11 1 10 416 388 23 Sydney Bulldogs 22 11 0 11 375 378 22 Auckland 22 11 0 11 412 427 22 Sydney Tigers 22 11 0 11 319 459 22 Parramatta 22 10 1 11 404 415 21 Illawarra 22 8 0 14 403 444 16 Penrith 22 7 1 14 363 464 15 Western Reds 22 6 1 15 313 420 13 North Queensland 22 6 0 16 288 643 12 Gold Coast 22 5 1 16 359 521 11 South Sydney 22 5 1 16 314 634 11 South Queensland 22 4 0 18 220 496 8 Schedule for first round of play-off matches: Friday September 6: Cronulla v Western Suburbs Saturday September 7: Canberra v St George Brisbane v North Sydney Sunday September 8: Manly v Sydney City --Sydney Newsroom 61-2 373-1800 6875 !GCAT !GSPO Australia will defend the Ashes in a six-test series against England during a four-month tour starting on May 13 next year, the Test and County Cricket Board said on Friday. Australia will also play three one-day internationals and four one-day warm-up matches at the start of the tour. The tourists will play nine first-class matches against English county sides and another against British Universities, as well as one-day matches against the Minor Counties and Scotland. Tour itinerary: May May 13 Arrive in London May 14 Practice at Lord's May 15 v Duke of Norfolk's XI (at Arundel) May 17 v Northampton May 18 v Worcestershire May 20 v Durham May 22 First one-day international (at Headingley, Leeds) May 24 Second one-day international (at The Oval, London) May 25 Third one-day international (at Lord's, London) May 27-29 v Gloucestershire or Sussex or Surrey (three days) May 31-June 2 v Derbyshire (three days) June June 5-9 First test match (at Edgbaston, Birmingham) June 11-13 v a first class county (to be confirmed) June 14-16 v Leicestershire (three days) June 19-23 Second test (at Lord's) June 25-27 v British Universities (at Oxford, three days) June 28-30 v Hampshire (three days) July July 3-7 Third test (at Old Trafford, Manchester) July 9 v Minor Counties XI July 12 v Scotland July 16-18 v Glamorgan (three days) July 19-21 v Middlesex (three days) July 24-28 Fourth test (at Headingley) August August 1-4 v Somerset (four days) August 7-11 Fifth test (at Trent Bridge, Nottingham) August 16-18 v Kent (three days) August 21-25 Sixth test (at The Oval, London). 6876 !GCAT !GSPO Johannesburg, Sept 2 - Michael Jones and Olo Brown were unable to fully appreciate reaching personal rugby milestones for the All Blacks in the third rugby test against South Africa, NZPA reported on Monday. New Zealand's 22-32 third test loss to the Springboks at Ellis Park flattened an already weary All Blacks team as they missed out on a clean sweep of their 10-test season. Jones was given the ball by captain Sean Fitzpatrick to lead the team out in front of 65,000 crowd to mark the great flanker's 50th test. "I was very honoured. I can't really describe the feeling -- it was awesome," Jones said later. "But I wish I could have done a bit more. We just fell flat and they came at us." Prop Brown, a member of the tight five who had a clear edge on the Springboks, said the team's late comeback to score 14 points in the final four minutes didn't make up for the loss. "It's a disappointing way to finish the tour. On reflection we'll be happy with nine wins from 10," said Brown, who played his 50th match for New Zealand on Sunday (NZT). "The guys were motivated before the game. I think South Africa wanted it a bit more than us. "I think they were a lot better today. They defended very well and aggressively and we couldn't get our game going." All Blacks coach John Hart said Brown was one of the unsung heroes of the tour. "He is the best tighthead prop in the world," Hart said. Lock Robin Brooke reflected the New Zealanders' disappointment. "I don't think they won it, we lost it and it's real disappointing to go out like that," Brooke said. Springboks captain Gary Teichmann felt his team's commitment paid off. "I don't think we needed any motivation. We were facing a whitewash and that worried us. We were scared to lose again today." Springboks coach Andre Markgraaff said his team had improved with each test and he knew they'd eventually put a victory together. "This does us a lot of good for our tour of Argentina and France," he said. 6877 !GCAT !GSPO Johannesburg, Sept 2 - South Africa have paid New Zealand rugby a great compliment -- in a backhanded sort of way, NZPA reports. Despite winning the third test at Ellis Park 32-22, South Africa's pride has been hurt by the All Blacks who secured a 2-1 series win. Losing to the New Zealanders for the first time on South African soil dug deep into the South African psyche, so much so that they want to emulate the way the All Blacks do things. South African rugby has launched a major reconstruction of its structure, and they plan to follow the formula followed by New Zealand. For a start, one man, coach Andre Markgraaff, has been given full power over the Springboks and his assistants, medical staff and media liaison -- which is similar to the control New Zealand coach John Hart has over the All Blacks setup. Their plan was put together by South African Rugby Football Union chief executive Rian Oberholzer, who looked and learnt in his brief stint as SANZAR's (Super 12 organisers) chief executive in Sydney. That the new structure resembles New Zealand's is no coincidence, Oberholzer admitted. He studied New Zealand's style and, in particular Hart's plans, for their national team. It's a testimonial to Hart's vision and ability. Back coaching after four years in the wilderness, the shrewd Hart showed this year he has lost nothing of the skills and motivational tools he used to great success with Auckland in the 1980s. Nine wins from 10 tests -- with six coming against the Wallabies and the Springboks -- represent a magnificent year for the All Blacks, for those involved with the team and for New Zealand rugby in general. Hart plotted and executed such a successful campaign that victories in the Bledisloe Cup, the tri-series and New Zealand's first ever test series triumph in South Africa were achieved, all within the space of just 12 weeks. "It's a super-season for all," Hart declared. Hart's motivational power and man-management skills are widely known. He has the uncanny ability to draw strength from deep inside the players' minds and hearts. That was reflected in some wonderful victories -- particularly in Brisbane and Cape Town -- when they were so far behind on the scoreboard that they had been written off by many. It was illustrated best in the historic second test victory when the players picked themselves up four times to hold the South African juggernaut from rolling over their tryline. Had they failed, the series would have depended on yesterday's lost third test. The emotions that followed that victory, which secured New Zealand's first ever series win in South Africa in the two nations' 75-year rugby history, brought tears to the eyes of some of New Zealand's greatest players like Fred Allen, Don and Ian Clarke and Andy Leslie. Don Clarke said New Zealand had finally proved superior to South Africa. "It's the players, not me," the modest Hart said. "It's a reflection of their pride and determination to do well for each other and the people back at home." Hart has been surprised by his team's success against Australia and South Africa. He thought he'd lose some games simply because of the intensity of the season -- 10 tests in 12 weeks with the bulk of them against class outfits like the Wallabies and the Springboks. "I had doubts about myself, too, because I hadn't coached for four years. I didn't think we'd win all of them, but nine out of 10 was still beyond my wildest dream. "It think it has a lot to do with the selection and planning. start of the year we didn't focus on South Africa. "We focused on the season and South Africa was an important part of it. Had we not had Western Samoa and Scotland right, had we not begun well, it would have been an impossible dream to come here (South Africa) and win. "A lot of our planning, a lot of what we did in the first four weeks together with the All Blacks was probably the critical moment in building to win in South Africa. Our fitness programme from Martin Toomey should take a lot of credit for it. "When we asked for 36 players we got a lot of flak for it, but this tour couldn't have been a success with less than that number. "Then our selection of the 46 players we had in February was spot-on. Our planning, on reflection, was just about 100 percent. "On the field I think we had consistency. The same pack fronted up for 10 straight tests, a world record. "In Olo Brown we have the best tighthead prop in the world and Sean Fitzpatrick is the best hooker and captain in the world at present. "Our backline has a lot of firepower and skills." Hart said the difference between the All Blacks of 1996 and last year, both with the same player base, was the present team's ability to express themselves and their positive attitude. "They've been encouraged to take ownership themselves, be able to express themselves, (there is) far more relaxation as a team and they're motivated to perform. The backs probably have more skills than in 95." Hart's tour highlights were the performances at Cape Town when the team stormed back from 6-18 to win with a brilliant display in the last 20 minutes, and the second tour test victory at Pretoria which won them the series. "We achieved history, the team came into altitude conditions and played a fired up Springboks side, and we won well. We could have won by more," he said. "Outside the game my highlight was the way we managed 36 players. It was such a heavy unit but we had an excellent management and medical team." 6878 !GCAT !GSPO Draw for the 1998 African Nations Cup finals after the completion of the last preliminary round matches at the weekend: Group One: Angola, Ghana, Sudan, Zimbabwe Group Two: Algeria, Benin, Ivory Coast, Mali Group Three: Egypt, Ethiopia, Morocco, Senegal Group Four: Central African Republic, Guinea, Sierra Leone, Tunisia Group Five: Cameroon, Gabon, Kenya, Namibia Group Six: Liberia, Tanzania, Togo, Zaire Group Seven: Malawi, Mauritius, Mozambique, Zambia Fixtures: Group One: Ghana v Angola, October 5 Sudan v Zimbabwe, October 6 Angola v Sudan, January 26, 1997 Zimbabwe v Ghana, January 26 Sudan v Ghana, February 24 Zimbabwe v Angola, February 24 Angola v Ghana, June 22 Zimbabwe v Sudan, June 22 Ghana v Zimbabwe, July 13 Sudan v Angola, July 14 Ghana v Sudan, July 27 Angola v Zimbabwe, July 28 Group Two: Algeria v Ivory Coast, October 4 Benin v Mali, October 6 Ivory Coast v Benin, January 26, 1997 Mali v Algeria, January 26 Benin v Algeria, February 24 Mali v Ivory Coast, February 24 Ivory Coast v Algeria, June 22 Mali v Benin, June 22 Algeria v Mali, July 12 Benin v Ivory Coast, July 14 Algeria v Benin, July 26 Ivory Coast v Mali, July 28 Group Three: Egypt v Morocco, October 4 Ethiopia v Senegal, October 5 Senegal v Egypt, January 25, 1997 Morocco v Ethiopia, January 26 Ethiopia v Egypt, February 23 Senegal v Morocco, February 23 Senegal v Ethiopia, June 21 Morocco v Egypt, June 22 Egypt v Senegal, July 12 Ethiopia v Morocco, July 13 Egypt v Ethiopia, July 26 Morocco v Senegal, July 28 Group Four: Tunisia v Sierra Leone, October 5 Central African Republic v Guinea, October 6 Sierra Leone v Central African Republic, January 25, 1997 Guinea v Tunisia, January 26 Central African Republic v Tunisia, February 24 Guinea v Sierra Leone, February 24 Sierra Leone v Tunisia, June 21 Guinea v Central African Republic, June 22 Tunisia v Guinea, July 13 Central African Republic v Sierra Leone, July 14 Sierra Leone v Guinea, July 27 Tunisia v Central African Republic, July 27 Group Five: Namibia v Kenya, October 5 Gabon v Cameroon, October 6 Kenya v Gabon, January 25, 1997 Cameroon v Namibia, January 26 Kenya v Cameroon, February 23 Namibia v Gabon, February 23 Kenya v Namibia, June 21 Cameroon v Gabon, June 22 Namibia v Cameroon, July 13 Gabon v Kenya, July 14 Cameroon v Kenya, July 28 Gabon v Namibia, July 28 Group Six: Togo v Tanzania, October 6 Zaire v Liberia, October 6 Tanzania v Zaire, January 25, 1997 Liberia v Togo, January 26 Tanzania v Liberia, February 23 Togo v Zaire, February 24 Tanzania v Togo, June 21 Liberia v Zaire, June 22 Togo v Liberia, July 14 Zaire v Tanzania, July 14 Liberia v Tanzania, July 28 Zaire v Togo, July 28 Group Seven: Mauritius v Malawi, October 6 Zambia v Mozambique, October 6 Malawi v Zambia, January 25, 1997 Mozambique v Mauritius, January 26 Malawi v Mozambique, February 23 Mauritius v Zambia, February 24 Malawi v Mauritius, June 21 Mozambique v Zambia, June 22 Mauritius v Mozambique, July 14 Zambia v Malawi, July 14 Mozambique v Malawi, July 28 Zambia v Mauritius, July 28 The top two teams in each group qualify for the finals in Burkina Faso along with the hosts and holders South Africa. 6879 !GCAT !GSPO WELLINGTON, Sept 2 - They're great, but maybe not the greatest. Former All Blacks are united in their praise of the current All Blacks, who won nine of 10 rugby tests this season, but none was prepared to compare them with other great New Zealand sides of the past. Most can even forgive them for losing the final test 32-22 to the Springboks in Johannesburg yesterday. Former wing Stu Wilson suggests a bonus for being fine entertainers along the way. The Evening Post newspaper talked to nine former All Black greats. Murray Mexted (1978-85): "Potentially when they went to South Africa we had a great side. I think they realised part of their potential. To win three out of four tests in South Africa is a huge achievement, albeit with neutral referees (and) a 36-man squad." Dave Loveridge (1978-85): "Overall to win nine from 10 was a tremendous effort and they've played some great football on the way too, even if they never reached the standard of the Athletic Park match again. This team is obviously up there at the top of the tree but it's difficult to judge how they compare." Colin Meads (1957-71): "The All Black effort has been unbelievable. Most people would have said seven or eight out of 10 would have been a great effort. The ability of the side goes right over the 15 players -- each of them in their own way is a bit of a star. There was tremendous talent there. The planning that went into the tour and the 36 players they were able to take was also a great help." Warwick Taylor (1983-88): "The side would have to rate right up there with the best, though I find it difficult to put a team from one era against others -- different laws, professional versus amateur, etc. But this team was strong all the way through, very much an all-round one capable of changing tactics on the field if necessary." Bryan Williams (1970-78): "The All Blacks have been a fantastic side this year and they've really lifted the image of rugby both on and off the field. The PR has been a great credit to John Hart, Sean Fitzpatrick and the rest of the team. And there's probably still some improvement left -- the backline is still young and can improve its consistency." Stu Wilson (1976-83): "The All Blacks have earned every cent they're being paid this year -- in fact, they can rightly claim a bonus. They've had a great season, though I would have preferred they lost one of the tests before the last, if they had to lose one. But we've been entertainers, and you have to be these days -- not like the South Africans, who are in a time warp." Mark Shaw (1980-86): "There's usually so little between Australia, New Zealand and South Africa these days that this team has done great things. And the front rowers are the boys for me -- with guys like Craig Dowd, Sean Fitzpatrick and Olo Brown making seven, eight or nine tackles a game that frees up the loose forwards to get wider and provide a strong defensive cover." John Gallagher (1986-89): "The second test match had to be one of the greatest ever. It was a true pressure series, but on top of that the All Blacks played just unbelievable rugby. I'm just full of admiration for guys like Fitzy and Zinny who have been playing at this level since 1986-87." Bruce Robertson (1972-81): "It was absolutely fantastic. This team planned for success and John Hart and Mike Banks have concentrated on getting everything right, including taking 36 players. The other thing was they were on a level playing field from the outset. Having neutral referees gave them confidence to go out and play 6880 !GCAT !GSPO Results of Australian Rules matches played at the weekend. Played Sunday: Fremantle 24.13 (157) Fitzroy 10.11 (71) Richmond 16.13 (109) North Melbourne 21.15 (141) Played Saturday: Geelong 9.11 (65) Carlton 16.11 (107) Collingwood 15.10 (100) Brisbane 6.15 (51) St Kilda 20.24 (144) Adelaide 11. 9 (75) Sydney 12.13 (85) West Coast 6.14 (50) Melbourne 15.11 (101) Hawthorn 15.12 (102) Played Friday: Essendon 11.13 (79) Footscray 11.10 (76) Standings (tabulate under played, won, drawn, lost, points for, against, percentage, total points): Sydney 22 16 1 5 2152 1737 123.9 66 North Melbourne 22 16 0 6 2526 1982 127.4 64 Brisbane 22 15 1 6 2174 1731 125.6 62 West Coast 22 15 0 7 2201 1758 125.2 60 Carlton 22 15 0 7 2116 1909 110.8 60 Essendon 22 14 1 7 2209 2023 109.2 58 Geelong 22 13 1 8 2353 2047 114.9 54 Hawthorn 22 11 1 10 1893 1921 98.5 46 Richmond 22 11 0 11 2282 1944 117.4 44 St Kilda 22 10 0 12 2053 2033 101.0 40 Collingwood 22 9 0 13 2203 2142 102.8 36 Adelaide 22 8 0 14 2233 2327 96.0 32 Fremantle 22 7 0 15 1830 1983 92.3 28 Melbourne 22 7 0 15 1743 2463 70.8 28 Footscray 22 5 1 16 1654 2139 77.3 22 Fitzroy 22 1 0 21 1452 2935 49.5 4 Schedule for first round of play-off matches: Friday, September 6: Brisbane v Essendon Saturday, September 7: West Coast v Carlton Sydney v Hawthorn Sunday, September 8: North Melbourne v Geelong 6881 !GCAT !GSPO Results of South Korean pro-baseball games played on Saturday. Hyundai 6 Ssangbangwool 5 Ssangbangwool 4 Hyundai 0 OB 4 Samsung 3 * Note: Ssangbangwool and Hyundai played two games. Standings after games played on Saturday (tabulate under won, drawn, lost, winning percentage, games behind first place) W D L PCT GB Haitai 64 2 43 .596 - Ssangbangwool 61 2 50 .549 5 Hanwha 58 1 49 .542 6 Hyundai 58 5 51 .531 7 Lotte 46 6 54 .462 14 1/2 Samsung 49 5 58 .460 15 LG 46 5 59 .441 17 OB 44 6 62 .419 19 1/2 6882 !GCAT !GSPO Final results from the $175,000 1996 Sony Badminton Indonesian Open completed on Saturday night in Medan, North Sumatra. (Players Indonesian unless stated) Men's singles Joko Suprianto bt Budi Santoso 15-8 15-4 Ladies singles Susi Susanti bt Wang Chen (China) 11-8 11-8 Men's doubles Antonius Irianto/Denny Kantono bt Halim Heryanto/Davis Efraim 15-3 15-10 Women's doubles Elisa/Zelin Resina bt Rikke Olsen/Helen Kirkegaard (Denmark) 15-7 15-4 Mixed doubles Haryanto Trikus/Minarti Timur bt Flandy Nimpele/Rosalina Riseu 15-8 15-1 6883 !GCAT !GSPO Ireland's Sonia O'Sullivan enjoyed a winning return to competitive athletics after an illness when she won a 3,000 metres race in Rieti, Italy, on Sunday. O'Sullivan won in a time of 8:50.14. Pauline Konga, silver medallist in the 5,000 metres at the 1996 Olympic Games in Atlanta, came home in third place behind fellow Kenyan Sally Barsosio. A bug upset O'Sullivan's plans to complete a 5,000 and 1,500 metres double in Atlanta. -- Damien Lynch, Dublin Newsroom +353 1 6603377 6884 !GCAT !GSPO The Richard Hannon-trained Miss Stamper stretched her unbeaten run to four races when she landed the Tattersalls Breeders Stakes, a valuable race for two-year-olds, at The Curragh on Saturday. Always prominent over the early stages of the six furlong (1,200 metres) race, the 3-1 joint-favourite was driven to the front by jockey David Harrison just over a furlong (200 metres) out and she triumphed by three lengths at the post. There was further joy for Hannon, who trains in Wiltshire in England, when 10-1 chance Pelham got up in the final strides to take third. It ensured a clean sweep for English trained horses with 16-1 chance Paddy Lad finishing second, two-and-a-half lengths ahead of Pelham. The race was worth $233,600 to the winner. -- Damien Lynch, Dublin Newsroom +353 1 6603377 6885 !GCAT !GSPO A powerful right hook followed by a straight left gave defending champion Nate Miller a seventh round knock-out win over fellow American James Heath in their WBA cruiserweight title bout on Saturday. Miller, who went into the contest with a record of 24 knock-out wins in 32 fights, took charge from the opening bell and had his opponent on the canvas inside 90 seconds when he landed a deft left-hook to the head. Heath did score with two brusing lefts to Miller's head in the third round but failed to put his opponent under any real pressure. Miller raised the pace of the contest at the start of the fifth round and, once he started to get his right-left combinations working for him, the fight was never likely to go the distance. 6886 !GCAT !GSPO The father of German tennis star Steffi Graf, going on trial this week for tax evasion, has paid 20 million marks ($13.5 million) in back taxes, the news weekly Focus reported at the weekend. Peter Graf, who has been in detention for 13 months, goes on trial on Thursday while his daughter, if all goes to plan, will continue the defence of her U.S. Open tennis title in New York. The world number one again displayed her legendary steely nerves on Saturday to brush aside Natalia Zvereva of Belarus and enter the fourth round. But then she betrayed signs of the mounting strain by irritably replying "I don't want to talk about it" to a German television interviewer who asked about her father. Last week she told a newspaper she had even considered pulling out of the event because of the likely media pressure. Graf herself, who says she handed her financial affairs over to her father at an early age, is still under investigation in the affair, although prosecutors have said they do not plan to call her as a witness. But the mass-circulation newspaper Bild am Sonntag said on Sunday lawyers for her father's co-defendant, financial advisor Joachim Eckardt, planned to call her into the stand in the course of the trial, expected to last several months. Peter Graf, who could face up to 10 years in prison, has not made any public comment on the allegations against him. Media reports say his lawyers plan to argue that authorities gave Graf the impression his schemes to minimise the tax on his daughter's earnings were legitimate, and failed to tell him of their suspicions in time for him to limit the damage. Focus said Graf's family had settled the tax debt in advance of the trial in an attempt to show goodwill. Family representatives could not be reached for comment. 6887 !GCAT !GPOL KUWAIT GOVERNMENT LIST (960901) ************************************************************** * 7 October 1996 - Parliamentary elections. * ************************************************************** Emir (Ruler)....................Sheikh JABER al-Ahmad al-Sabah Heir Apparent (Crown Prince) & Prime Minister..............Sheikh SAAD al-Abdulla al-Sabah - - - - - - - CABINET (Formed 13 April 1994) Prime Minister............................... . See Crown Prince Deputy Prime Minister & Foreign Minister........... . Sheikh SABAH al-Ahmad al-Jaber al-Sabah Second Deputy Prime Minister & Finance and Planning Minister..............Nasser Abdulla al-RODHAN - - - - - - - MINISTERS: Communications, Electricity and Water........... . Jassem al-OUN Defence ................ . Sheikh AHMAD Hamoud al-Jaber al-Sabah Education and Higher Education.........Ahmad Abdallah al-RUBAI Finance ..................................See Second Deputy PM Foreign Affairs..................................See Deputy PM Health...........................Abdul-Rahman Saleh al-MHEILAN Information................ Sheikh SAUD Nasser al-Saud al-Sabah Interior....................Sheikh ALI Sabah al-Salem al-Sabah Islamic Affairs.............................Ali Fahd al-ZMEI'A Justice & Administrative Affairs.............Mishari al-ANJARI Oil......................................Abdul-Mohsen al-MUDEJ Planning..................................Abdul-Aziz al-DAKHIL Public Works and Housing Affairs.............Habib Gohar HAYAT Social Affairs.......................... Ahmad Khaled al-KULAIB Trade & Industry.......................... Ali Hilal al-MUTAIRI - - - - - - - Minister of State for Cabinet Affairs....See Planning Minister - - - - - - - Parliament Speaker............................Ahmad al-SAADOUN - - - - - - - Central Bank Governor. Sheikh SALEM Abdul-Aziz al-Saud al-Sabah - - - - - - - NOTE: Any comments/queries on the content of this government list, please contact the Reuter Editorial Reference Unit, London, on (171) 542 7968. (End government list) 6888 !GCAT !GODD !GSPO An international team led by a 41-year-old New Zealander won a gruelling, eight-day race after battling extreme heat, frigid waters and snow, organisers said on Sunday. Less than one third of the 70 teams that began the so-called Eco-Challenge last Saturday finished the 323-mile (517-km) endurance race through the Canadian wilderness -- travelling by horseback, canoe, mountain bike and by foot over a demanding mountainous terrain. The event was part of a growing sport known as adventure racing in which competitors test their limits over a perilous wilderness course. "The course was superb, really, really challenging," said John Howard, of Christchurch, New Zealand, a member of the winning team of four men and one woman from New Zealand, Australia and the United States. The team arrived at Pemberton, about 100 miles (160 km) northeast of Vancouver, early on Saturday morning while the remaining 14 surviving teams were expected to complete the course by Sunday evening, in time for the closing ceremonies, organisers said. Ian Anderson, a 31-year-old Australian also on the winning team, said their strategy was to make sure they got at least four hours of sleep a night. Close team work also helped. "A good sense of humour broke the tension and the pressure of the race," Anderson said. During the weekend more than a dozen teams, along with journalists and television crews, were forced to wait out a raging mountainside snowstorm that had cut visibility to zero and knocked out satellite communications. The Eco-Challenge, modelled on similar races overseas, has been staged twice before, in Utah, and in Maine last year. Eco-Challenge competitors race in teams of five that must include both men and women. Team members must remain within 100 yards (91 metres) of each other at all times and finish together. With racers carrying about 40 pounds (18 kg) of gear on their backs, broken bones, sunstroke, dehydration and exhaustion are common. 6889 !GCAT !GDIP !GPOL U.N. agencies in Zaire began a census on Sunday of Rwandan refugees encamped in the east of the country but a senior official said there was no link with a Zairean pledge to repatriate the refugees before elections next year. The census is the second since the Hutu refugees flooded into Zaire in 1994 in fear of reprisals following the massacre by Hutu hardliners of up to one million minority Tutsis and moderate Hutus. The last census was in February 1995. "It's a census firstly with statistical aims and secondly with budgetary planning aims," Hubert Edongo Menye, Central African regional delegate for the U.N. High Commissioner for Refugees, told Radio France International on Sunday. "We would like to have as exact an idea as possible of the presence of refugees in the camps so that we can organise ourselves to be able to help and protect them," he said. "The operation has no link whatsoever with any forced repatriation," he said, adding that it would be wrong to put such doubts in the minds of the refugees. U.N. officials say more than 1,000 aid workers will take part in the census until Tuesday of an estimated 727,000 refugees in camps round the border town of Goma. Zairean Prime Minister Kengo wa Dondo said at the end of a visit to Rwanda in mid-August that Zaire and Rwanda agreed on an "organised, massive and unconditional repatriation" of the 1.1 million Rwandan refugees in Zaire. The two neighbours agreed the refugees would leave before presidential and legislative polls, which must be held by next July, the end of Zaire's much-delayed democratic transition. A Rwandan refugee lobby group, The Rally for the Return of Refugees and Democracy in Rwanda (RDR), called on Saturday for calm in the camps during the census. It said refugees feared census takers would use indelible ink to mark them so they could be detected by Rwandan government troops and mistreated if they were forced back into Rwanda. "The RDR appeals to all refugees to prepare themselves calmly for the demands of the census agents because it will be in their ultimate interest," the group said in a statement. Rwanda has played down talks of a hasty repatriation. Zaire's president, Mobutu Sese Seko, in Switerland for medical treatment, halted previous bids to expel the refugees by force. Zairean troops expelled 15,000 refugees in August last year. Only about 100 refugees a week are returning voluntarily to Rwanda in contrast to the 600 babies born in the camps weekly. 6890 !GCAT !GPOL So many supporters turned out on Sunday to witness the launch of a political party by military leader Captain Yahya Jammeh's main rival in this month's presidential race that the launch had to be postponed. Witnesses and party officials said the launch was put back until a day to be fixed after prominent lawyer Ousainou Darboe's car was blocked by up to 70,000 jubilant supporters, preventing him reaching the launch venue. Darboe, Vice-Chairman of the influential Gambia Bar Association, plans to call his party the United Democratic Party (UDP). "I was contacted by a cross-section of the community from Banjul to up country and asked to contest the presidential elections," he said on August 23. Supporters flocked to this town, 32 km (20 miles) from the capital Banjul, for the ceremony. They sang, danced and wore T-shirts and badges carrying his portrait. They chanted slogans calling for peace, reconciliation and democracy. Politicians banned by Jammeh from contesting the September 26 election because of their association with Sir Dawda Jawara, the elected president he accused of corruption and toppled in 1994, attended the launch. So too did their supporters. Jammeh, 31, has banned the country's main politicians from standing. He plans to stand as a civilian. He and fellow military rulers launched their own party -- the Alliance for Patriotic Reorientation and Construction -- on August 26. Four candidates will contest the presidential election in the West African tourist haven. The Commonwealth has described rules for the election and for parliamentary polls in December as flawed, saying they will allow the military to strengthen their grip on power. The pro-Jammeh July 22 Movement described the criticism as insulting and damaging to the democratic process. 6891 !C42 !CCAT !E41 !ECAT !GCAT !GJOB South Africa's petroleum industry said on Sunday talks with the chemical workers' union on wages and working hours had stalled. "The union rejected a ten percent across the board wage offer and a reduction in average hours worked, taking the maximum in the sector to 43 hours a week," said a statement by Simon Drysdale, chief negotiator for the petroleum industry. He said the union wanted shorter hours, a 12 percent across the board increase and a mimimum wage of 1,800 rand a month. The union had refused to give an undertaking beyond Sunday (September 1) that it would not strike during wage negotiations, Drysdale said. -- Cape Town newsroom 2721 252238 6892 !GCAT !GVIO Demonstrations broke out in the streets of the Sudanese capital Khartoum on Sunday to protest the shortage of bread and police used teargas to disperse people, eyewitnesses said. Protestors rioted in the streets of the capital and its twin city Omdurman, smashing vehicles and stoning security forces, they added. After three hours, calm returned to the capital. The Sudanese government passed new regulations on Saturday to increase the weight of bread, but bakery owners complained that high prices of wheat flour made it unprofitable and they refused to work. Hours after the riots started, the state Omdurman radio announced that the government said some of the bakery owners had misunderstood the government policy. The radio said the government had met with bakery owners and urged them to start production. Sudan is suffering a series of crises ranging from water and electricity shortages to rising food prices. 6893 !GCAT !GCRIM !GPOL South Africa's ruling African National Congress is to consider reinstating the death penalty in view of a wave of violent crime that is engulfing the country, Justice Minister Dullah Omar said on Sunday. Omar, summing up after a two-day meeting of ANC leaders on crime, told delegates: "The view of the summit is that the ANC, as the leading liberation force and democratic force in our country, representing the will of the people, should not be afraid to reassess its position with regard to the death penalty. "The summit has taken the position that the national executive committee (NEC) should as a matter of urgency review the whole question of the death penalty and if it is necessary the whole policy position of the ANC should be reviewed." No one has been executed in South Africa since the then president F.W. de Klerk imposed a moratorium on hangings as part of his political reforms early in 1990. The death penalty is still on the statute books but the constitutional court has ruled that it cannot be carried out in terms of the country's new democratic constitution. The ANC, which won the country's first all-race elections in April 1994, has until now opposed capital punishment. But grass-roots pressure for it to be reimposed has gathered pace in recent months as violent crime rages unabated with police apparently powerless to bring it under control. The constitution can be amended by a two-thirds majority vote in parliament. Addressing the weekend conference, Omar said action had to be taken to address the socio-economic causes of crime but legislation also had to be tightened. "We want to send out a clear signal from the ANC that we cannot allow criminality to prevail in our society. We want to ensure our women, our girls, can live in safety," he said. "The death penalty is an issue of concern to communities throughout our country. We are saying that therefore it has to be discussed." The conference brought together influential ANC committees involved in studying issues such as policing, crime, defence, prisons and intelligence on a national and provincial level. President Nelson Mandela was quoted in a newspaper interview on Sunday as saying crime was out of control in some parts of the country. "People have cause to be worried and we appreciate that," he said. "When people decide to take the law into their own hands, then the social fabric is breaking down." Last month a militant Moslem group launched a campaign against gang leaders in Cape Town, shooting and burning to death a notorious drug dealer in a public lynching. Last week an executive of the German car maker BMW, Bernd Pischetsrieder, said South Africa's level of violent crime was a disincentive to investors. The head of another German company in South Africa was shot dead by car hijackers in Johannesburg last month. Days later hijackers killed the father of Doc Khumalo, a member of the national soccer squad. The president of the constitutional court, Arthur Chaskalson, was robbed at knife point in his home last month. 6894 !GCAT !GVIO Somali clan leader Hussein Aideed said on Sunday he would disarm other armed militias operating in the country. Aideed, 33, was picked by supporters last week as chairman of clan alliance Somali National Alliance (SNA) founded by his late father, Mohamed Farah Aideed. Speaking in his south Mogadishu stronghold at the final condolence ceremony for his father, he promised to defend Somalia from both internal and external enemies. "My father resisted neocolonialism. We will continue that struggle," he said. He did not specify which armed groups he would target. The Horn of Africa country has had no central government since the fall of late president Mohamed Siad Barre in 1991. Hussein was elected by supporters in southern Mogadishu to succeed his father, whose fighters humbled U.S. and U.N. military forces in 1993, as president of Somalia on August 4. But his power base remains in south Mogadishu facing an alliance of north Mogadishu rivals who refuse to accept his government, which has only been recognised by Sudan and Libya. 6895 !GCAT These are significant stories in the Nigerian press on Sunday. Reuters has not verified these stories and does not vouch for their accuracy. SUNDAY TIMES - Lack of funds delays elections of executives of national labour unions. THE GUARDIAN - Electoral commission fine-tunes modalities for verifying claims made by political associations seeking party status. - Bourse regulator Securities and Exchange Commission sanctions four trading houses for violating its regulations. - Era of large-scale fraud in Nigerian banking sector is over, deputy governor of regulator Central Bank says. SUNDAY CONCORD - Nigerian Security Printing and Minting Company workers to face probe for various alleged sharp practices. - Environmental campaign group plans Remembrance Day activities for executed author Ken Saro-Wiwa and his eight minority rights associates. ($1=80 naira) --Lagos newsroom +234 1 2630317 6896 !GCAT !GPOL !GPRO South African President Nelson Mandela is in love with Graca Machel, widow of the former Mozambican president Samora Machel, a spokesman for Mandela said on Sunday. Asked to comment on a local newspaper report that Mandela, 78, was in a "steady relationship" with the 50-year-old Machel, spokesman Parks Mankahlana said: "All I can say is, the story is not untrue. But I'm not aware of any marriage plans." Mandela left his second wife Winnie in a bitter divorce earlier this year, saying she was a spendthrift who no longer showed him any affection. Their marriage began breaking up shortly after Nelson Mandela was released from jail in February 1990 after 27 years behind bars. The Johannesburg-based Sunday Independent newspaper quoted sources close to Mandela as saying he was smitten with Machel and that his face lit up at the mention of her name. "President Nelson Mandela is in love. After months of speculation, the Sunday Independent can now confirm that Mandela and Graca Machel...are involved in a steady relationship and are ready to go public. "The couple plan to spend as much time together as possible," the paper added. "They plan to spend two weeks of each month together at Mandela's Johannesburg home. Machel will spend the rest of her time in her home country." Samora Machel, who supported Mandela's African National Congress in its fight against apartheid, was killed in a plane crash in October 1986. Reports that romance was blossoming between Graca Machel and Mandela first emerged early last year. This year they have been seen together during trips to Paris and Harare. Mandela is due to step down as president in 1999 when South Africa's next elections will be held. 6897 !GCAT !GDIP !GPOL !GVIO A separatist Croat mini-republic in southwest Bosnia formally ceased to exist at midnight on Saturday under a U.S.-engineered accord but there were no signs on Sunday that it would fade quickly away. Institutions of the "Croatian Republic of Herceg-Bosna" and Bosnia's pre-war Moslem-led republic must be merged within two weeks to invigorate a federation mandated by the 1995 Dayton peace treaty but still at the drawing-board stage. Herceg-Bosna was carved out in a 1993-94 war by a Bosnian Croat militia, permeated by paramilitary racketeers and sponsored by the Croatian government, and a significant Moslem population was driven out. The September 15 deadline for Moslems and Croats to start sharing power in the federation, redeeming dozens of abortive commitments to do so, is symbolically important because it will be one day after landmark general elections to reunify Bosnia. The two-week schedule for phasing out non-federal bodies was signed on Friday by the Croat president and Moslem vice- president of the federation. Herceg-Bosna officials were left out to signal that their writ had no legitimacy. But Croats in Herceg-Bosna, a Roman Catholic nationalist echo of the Orthodox Serb Republic that obtained half of Bosnia under Dayton, said on Sunday they could hardly imagine their "sovereign" domain vanishing by the mere stroke of a pen. Some Croats interviewed in the "capital" of Herceg-Bosna, the west half of the divided city of Mostar, vowed to preserve the symbols of their state, including flag and currency. Others conceded that the physical evidence of statehood might have to go to satisfy Big Power "geopolitics" in Bosnia -- but its spirit would never die. The evidence was all there on Sunday. Croatian flags waved and police in navy blue uniforms worked on both sides of the Croatian border, evoking Herceg-Bosna's virtual annexation by local Croats' "Mother Country". Herceg-Bosna state seals bearing the ancient Croatian chequerboard coat-of-arms still adorned all public buildings to the total exclusion of the Bosnian state lily symbol. Several Croat policemen said they had to take a test this weekend on the constitution of the federation but no one had told them any Herceg-Bosna insignia would be removed. "We'll do as we're told. But the problem is that the federation is not functioning," said one. Zoran Buntic, president of the Herceg-Bosna judicial council, resigned in protest at the Croat entity's dissolution. He complained that Croats faced the "legal anarchy" of a federation still without judicial structures. "Herceg-Bosna may be abolished formally or legally but it will live on in the people. Tudjman is our supreme leader," said a 30-year-old former Croat militiaman, referring to the president of Croatia, Franjo Tudjman. "We know that Croats are prisoners of world politics and we know we must suffer certain things now. Croatia also waited for many centuries to have its own state," he added. Croat political bosses denied in the run-up to the official demise of Herceg-Bosna there was any deadline to self-destruct because Sarajevo's Moslem leadership was doing nothing to abolish their ministries. U.S. diplomats denied this on Friday, saying the Moslems had kept their end of the deal and it was now the authorities in Herceg-Bosna who were impeding progress. Colum Murphy, spokesman for Bosnia peace coordinator Carl Bildt, said there was concern that the two-week grace period given to Herceg-Bosna would leave the Croats room to manoeuvre out of the agreement as attention turned to the elections. Evictions of minority Moslems from west Mostar continue to this day, more than two years after a European Union mission arrived to reconstruct a united municipality. But last month the Croats agreed under American duress -- threats of sanctions against Croatia -- to join Moslems on a new joint city council formed after EU-sponsored elections. 6898 !GCAT !GHEA !GREL Pope John Paul said on Sunday he was filled with pain over last week's parliamentary vote in his native Poland to liberalise the law on abortion. "With great distress I learn that the Polish parliament passed a bill which again legalises the practice of killing unborn children," the Pope said in a message read to about 100,000 pilgrims gathered at Poland's holiest shrine, in Czestochowa. "It fills one with pain that in our Fatherland, which suffered so much during World War Two, the drama continues of the deaths of thousands of innocent and defenceless human beings who are being denied the right to life," PAP news quoted the message as saying. Poland's lower house, in which the ruling Democratic Left Alliance (SLD) of ex-communists forms the largest bloc, passed a bill on Friday amending the current anti-abortion law. The measure will allow women to end pregnancies before the 12th week for reasons of poverty or other social problems. The present law, passed by a previous centre-right government in 1993, allows abortions only if pregnancy threatens a woman's life or health, results from rape or incest, or when the foetus is irreparably damaged. During an address to the faithful delivered in several languages at his Castelgandolfo summer residence south of Rome, the Pontiff revealed the full strength of his feelings. "A nation which kills its own children is a nation without a future," he said in Polish, his voice trembling with emotion. The Polish Church and its political allies had waged a desperate campaign to halt the bill. In churches across Poland bishops denounced it and its sponsors. The SLD and other backers of the new law, which also involves enforcement of sex-education in schools and cheaper contraception, say it will help prevent such tragedies as bungled back-street abortions and abandoned babies. But Poland's right-leaning opposition, notably the pro-Catholic Solidarity trade union, saw it as a further attack on the Church which championed its pre-1989 struggle against communist rule. Solidarity leader Marian Krzaklewski vowed at a major rally in Warsaw on Saturday to try to block the bill -- either in the Senate or Poland's Constitutional Tribunal. "There can never be real solidarity, if there is no solidarity with life," Krzaklewski declared. The new abortion bill was adopted at an emotionally-charged moment, as Solidarity marked the anniversary of the 1980 Gdansk accord which made it the Soviet bloc's first free trade union. Poles were also recalling the catastrophic German invasion on September 1, 1939, arousing the patriotic feelings which many, especially on the right, associate with Catholicism. During a ceremony in Gdansk marking Solidarity's 16th anniversary, attended by the union's founder Lech Walesa, Archbishop Tadeusz Goclowski said the new bill was a crime against the nation, adopted for "purely political reasons." The Church and its allies are already at odds with the SLD over religious content in Poland's new constitution and over delays in ratifying a treaty between Warsaw and the Vatican. Such issues look set to become a key theme in parliamentary elections next year, for which Solidarity wants to rally much of the divided opposition to beat the ruling left. 6899 !GCAT !GPOL !GVIO Russian Prime Minister Viktor Chernomyrdin appeared to give a cautious nod of approval on Sunday to a peace deal announced by Kremlin security chief Alexander Lebed and Chechen separatists. But more than a day after the accord, Chernomyrdin said he had not yet seen the final document. And there was still no word from President Boris Yeltsin, who is said to be resting on holiday. Aides said the president first wanted some clarification from Lebed, his personal envoy to the breakaway region. The agreement defers a final settlement of Chechen claims to independence for five years and has raised hopes of peace after 21 months of war. But it leaves room for disagreement. Separatist leader Zelimkhan Yandarbiyev said Chechnya was and remained independent -- something Moscow firmly opposes. "I haven't yet seen the final document...but I am convinced that we are on the right path," Chernomyrdin said in the central Russian city of Nizhny Novgorod. He added that he would meet Lebed on Monday to consider the accord signed early on Saturday. "We must have courage, endurance and patience. We should continue moving ahead but Russia's interests should not be infringed," the prime minister told ORT television. Chernomyrdin had said on Friday that Yeltsin approved the draft accord Lebed was to take to the rebels. But it was amended during eight hours of tough talks with separatist chief-of-staff Aslan Maskhadov and Kremlin aides said Yeltsin expected a full report from Lebed clarifying the changes. "The Russian president expects from the Security Council Secretary a detailed report with a clarification of the details of the agreements," a Yeltsin spokesman said on Saturday. "The president is having a rest," a spokesman said on Sunday. He could not say if he would meet Lebed on Monday. Yeltsin returned to his country residence 100 km (60 miles) northwest of Moscow after visiting his wife Naina on Friday in a Moscow clinic where she is recovering after a kidney operation. Lebed's accord also involves setting up a joint commission to oversee economic reconstruction and the withdrawal of troops. Most Russian troops and rebel units have been withdrawn from the capital Grozny, Itar-Tass news agency said. Both the rebels and the Russians said there had been no serious incidents. Lebed returned to Moscow to convince the Russian leadership, military and public that he has not given in to the rebels. Yandarbiyev, president of the self-styled Republic of Ichkeria, said the document was "a serious step towards peace" but warned of a danger coming from "the party of war" -- those in the Russian establishment who want to continue the conflict. In asserting that the separatists had made few concessions, he may be seeking to quiet hardliners in his own camp. But that may not help Lebed in getting the deal accepted in Moscow. "To interpret this as going back on our current status is not correct," Yandarbiyev told reporters on Sunday. "We are not part of Russia," he said. "We are simply leaving a lot of space, in time and politically, for the establishment of bilateral relations. We are an independent state." He said the deferment of a final settlement allowed Chechnya time to win compensation from Moscow before signing a final agreement defining "the degree of our mutual dependence". Yeltsin's spokesman, who has faced a barrage of awkward questions about the 65-year-old president's health since his virtual disappearance from public life in June, said on Saturday Yeltsin should be allowed to rest and act as he saw fit. "The president must have the right to take a break and the president must have room for manoeuvre. I think that we cannot refuse him that," Sergei Yastrzhembsky told Russian television, while promising greater openness on the president's health. Separatist spokesman Movladi Udugov told Ekho Moskvy radio on Sunday that elections would be held in Chechnya following the troop withdrawal. The newly-elected authorities would function for five years until the start of talks on Chechnya's status. A deputy prime minister in the pro-Moscow Chechen government, which the separatists regard as a puppet regime, said he resigned on Sunday and called for a new administration in the region including separatists and the current leadership. 6900 !GCAT !GPOL !GVIO Kremlin envoy Alexander Lebed, who claims to have ended the war in Chechnya, must still persuade the Russian government that the deal he reached with Chechen separatists achieved peace with honour. Prime Minister Viktor Chernomyrdin gave a cautious welcome to the accord but said he would go over the final document with Lebed only on Monday. There was no sign that Lebed would have an early meeting with President Boris Yeltsin, whom aides say is still resting. "I haven't yet seen the final document...but I am convinced that we are on the right path," Chernomyrdin said. "We must have courage, endurance and patience. We should continue moving ahead but Russia's interests should not be infringed." He had said last week that Yeltsin had approved Lebed's proposals. But amendments were made during the negotiations with rebel chief-of-staff Aslan Maskhadov and Chernomyrdin said he needed to discuss the accord again with Lebed. The deal defers a final decision on Chechen claims for independence for five years and commits Moscow to pulling out the troops sent to crush a bid for secession in December 1994. Yeltsin too wants an account, a spokesman said. But aides could not say if he would meet Lebed, who has so far failed to get a face-to-face meeting with the 65-year-old president. Lebed, 46, an ex-general chosen by Yeltsin as his security chief in June after running a strong anti-establishment campaign in the first round of Russia's presidential election, has sometimes seemed out on a limb during his Chechnya negotiations. Kremlin spokesman Sergei Yastrzhembsky told Russian Television that Yeltsin had "normal, working, businesslike" relations with Lebed. Yeltsin's near-total absence from public view for over two months has caused speculation -- denied by aides -- that he is ill. His spokesman said Yeltsin was simply resting at his holiday home but was in full control of the Chechnya situation. But analysts have speculated that Lebed and Chernomyrdin, among others, have been wrangling over Chechnya to further their own careers in the event of an early succession to Yeltsin. Apart from defering a decision on Chechen independence claims, the deal involves setting up a joint commission to oversee economic reconstruction and the withdrawal of troops. Most Russian forces and rebel units have now left the capital Grozny, the scene of heavy fighting last month. Yet a host of problems remain as both parties to the accord try to convince hardliners in their own camps that it is a good deal. A variety of fudged-over issues, from the number of troops being withdrawn to the status of the existing pro-Moscow administration in Chechnya, also demand a final resolution. "This wound will keep on bleeding for a fairly long time," former Russian prime minister Yegor Gaidar told Russian Television. "The scars of such a war are hard to heal." Separatist leader Zelimkhan Yandarbiyev said the agreement was "a serious step towards peace" but he warned of a danger coming from "the party of war" -- those in the Russian establishment who want to continue the 21-month conflict. His assertion that his side had made no concessions -- "We are an independent state," he told reporters -- was unlikely to help Lebed to convince sceptics in Moscow. He also insisted all Russian troops must be withdrawn while Moscow has in the past said it would remove all those based "temporarily" in Chechnya, leaving its "permanent" garrison. 6901 !GCAT !GPOL !GVOTE Poland's ruling Democratic Left Alliance (SLD) and an opposition alliance grouped round the Solidarity trade union would each win 21 percent of the vote if elections were held now, an OBOP survey suggested on Sunday. The August opinion poll by public television's OBOP agency showed that the ex-communist SLD, larger partner in the leftist ruling coalition, would tie for first place with Solidarity Election Action (AWS). The rightist Movement for the Reconstruction of Poland (ROP) of former prime minister Jan Olszewski, which has some similar policies to Solidarity, would come third with 14 percent, public television news reported. The SLD's smaller coalition partner, the Polish Peasant Party (PSL) would win 10 percent, the centrist opposition Union for Freedom (UW) would have six percent and the Labour Union (UP) four percent. According to the poll, Solidarity's AWS gained six points in August, while the SLD lost three points. However, OBOP found that 35 percent of those surveyed expected a victory by the SLD, which has long enjoyed a lead in opinion polls, against only 21 percent who thought the AWS would win an election. The poll was conducted from August 23 to 27 among a representative sample of 1,000 adults. It had an error margin of three percent. Poland's parliamentary elections are due in September 1997. 6902 !GCAT !GDIS !GENV An earth tremor shook eastern Romania on Sunday but no casualties or damage was reported, state television said. It quoted the National Earth Physics Institute as saying the tremor, with a preliminary magnitude of 4.3 degrees on the Richter open-ended scale, was centred in the mountain region of Vrancea, 300 km (190 miles) northeast of Bucharest. 6903 !GCAT !GPOL Boris Yeltsin's chief spokesman promised a new era of Kremlin openness about the president's health and, in a television interview broadcast on Sunday, maintained that the 65-year-old leader was not ill. Sergei Yastrzhembsky, 42, a suave former ambassador who took up his present post just last month, told Russian Television's Zerkalo (Mirror) current affairs programme that it took time to break Soviet-era taboos over the health of Kremlin leaders. But it was "normal and natural" for the media and the public to be informed and the Kremlin press office had taken the initiative in announcing last week that Yeltsin's wife, Naina, had been operated on for a kidney complaint, Yastrzhembsky said. "It was not fortuitous and I would be very glad if this became the rule," he said in the interview recorded on Friday. "This subject is a normal and natural one to be discussed, but within the limits of privacy and medical ethics." "We want to make certain efforts...to hold discussions of these subjects, in principle, in a more civilised way," Yastrzhembsky said, though adding that this was not purely a matter for the president's press service. He was asked why the president, hardly seen in public for over two months, had not met his personal envoy to Chechnya, Alexander Lebed. The lack of contact in recent weeks has fueled speculation that Yeltsin is ill or not in control of policy. Yastrzhembsky said that "not a single day" had passed in which Yeltsin was not fully in control of the situation in Chechnya and actively took part in preparing the proposals which Lebed announced on Saturday led to a deal with the separatists. But the spokesman insisted that Yeltsin, who aides say has been on holiday since last Monday at his Rus residence 100 km (60 miles) northeast of Moscow, should be allowed to rest. "The president must have the right to take a break and the president must have room for manoeuvre. I think that we cannot refuse him that," Yastrzhembsky said. 6904 !GCAT !GPOL !GVIO Russian Prime Minister Viktor Chernomyrdin appeared to give a cautious nod of approval on Sunday to a peace deal signed by Kremlin security chief Alexander Lebed and Chechen separatists. But two days after the accord, there was still no word from President Boris Yeltsin, who is said to be resting on holiday. Aides said Yeltsin would first be looking for some clarification from Lebed, his personal envoy to the breakaway region. The agreement defers a final settlement of Chechen claims to independence for five years and has raised hopes of peace after 21 months of war. But it leaves room for disagreement. Separatist leader Zelimkhan Yandarbiyev said Chechnya was and remained independent -- something Moscow firmly opposes. "I am convinced that we are on the right path," Chernomyrdin said in the Russian city of Nizhny Novgorod. He is due to meet Lebed on Monday to consider the accord signed early on Saturday. "We must have courage, endurance and patience. We should continue moving ahead but Russia's interests should not be infringed," Interfax news agency quoted him as saying. Chernomyrdin had said on Friday that Yeltsin approved the draft accord Lebed was to take to the rebels. But it was amended during eight hours of tough talks with separatist chief-of-staff Aslan Maskhadov and Kremlin aides said Yeltsin expected a full report from Lebed clarifying the changes. "The Russian president expects from the Security Council Secretary a detailed report with a clarification of the details of the agreements," a Yeltsin spokesman said on Saturday. "The president is having a rest," a spokesman said on Sunday. He could not say if he would meet Lebed on Monday. Yeltsin returned to his country residence 100 km (60 miles) northwest of Moscow after visiting his wife Naina on Friday in a Moscow clinic where she is recovering after a kidney operation. Lebed's accord also involves setting up a joint commission to oversee economic reconstruction and the withdrawal of troops. Most Russian troops and rebel units have been withdrawn from the capital Grozny, Itar-Tass news agency said. Both the rebels and the Russians said there had been no serious incidents. Lebed returned to Moscow to convince the Russian leadership, military and public that he has not given in to the rebels. Yandarbiyev, president of the self-styled Republic of Ichkeria, said the document was "a serious step towards peace" but warned of a danger coming from "the party of war" -- those in the Russian establishment who want to continue the conflict. In asserting that the separatists had made few concessions, he may be seeking to quiet hardliners in his own camp. But that may not help Lebed in getting the deal accepted in Moscow. "To interpret this as going back on our current status is not correct," Yandarbiyev told reporters on Sunday. "We are not part of Russia," he said. "We are simply leaving a lot of space, in time and politically, for the establishment of bilateral relations. We are an independent state." He said the deferment of a final settlement allowed Chechnya time to win compensation from Moscow before signing a final agreement defining "the degree of our mutual dependence". Yeltsin's spokesman, who has faced a barrage of awkward questions about the 65-year-old president's health since his virtual disappearance from public life in June, said on Saturday Yeltsin should be allowed to rest and act as he saw fit. "The president must have the right to take a break and the president must have room for manoeuvre. I think that we cannot refuse him that," Sergei Yastrzhembsky told Russian television, while promising greater openness on the president's health. Separatist spokesman Movladi Udugov told Ekho Moskvy radio on Sunday that elections would be held in Chechnya following the troop withdrawal. The newly-elected authorities would function for five years until the start of talks on Chechnya's status. A deputy prime minister in the pro-Moscow Chechen government, which the separatists regard as a puppet regime, said he resigned on Sunday and called for a new administration in the region including separatists and the current leadership. 6905 !GCAT !GVIO Chechen separatist leader Zelimkhan Yandarbiyev on Sunday welcomed a peace deal agreed with Russian security chief Alexander Lebed and said that it did not mean giving up Chechnya's independence. "To interpret this as going back on our current status is not correct," he told reporters at a village south of the Chechen capital Grozny. "We are not part of Russia," said Yandarbiyev, 44, who took over as self-styled president of the Republic of Ichkeria in April after Dzhokhar Dudayev, the charismatic leader of the secession movement, was reported killed in a rocket attack. "We are simply leaving a lot of space -- in time and politically -- for the establishment of bilateral relations. We are an independent state," he said. Lebed and rebel chief-of-staff Aslan Maskhadov signed an accord early on Saturday which raised hopes of turning a two-week-old truce between the separatists and Russian troops into a lasting peace. The accord would defer a decision for five years on whether the region should remain part of Russia or become independent and involve setting up a joint commission to oversee economic reconstruction and the withdrawal of Russian troops. "We are not demanding that Russia give us our independence now," Yandarbiyev said. "We want to sign such documents and establish such agreements as allow us first to receive compensation for all the damage done, including moral damage." He said that during the period of delay both sides would work on "an inter-state agreement which will define the degree of our mutual dependence". Yandarbiyev also stressed that he expected all Russian troops to be withdrawn from Chechnya, to restore the situation that existed before Moscow sent its forces to crush the secession movement on December 11, 1994. One big question mark hanging over the accord is whether the Russian government and President Boris Yeltsin will stand by it. Yandarbiyev said the separatists were unsure how Moscow's top leadership would react to Lebed's deal and said he found it odd that Lebed had found it hard to speak to the president. Yeltsin's aides deny rumours he is ill and say he is simply resting. Tim Guldimann, the Swiss diplomat who heads the Chechen mission of the Organisation for Security and Cooperation in Europe (OSCE) was with Yandarbiyev at the location, which the rebels said they preferred to keep secret for security reasons. Guldimann, who helped broker an earlier, failed, ceasefire this year, said the latest agreement was "an important step", because it set down a framework for settling the political dispute that had been at the root of the military conflict. Separatist spokesman Movladi Udugov told Ekho Moskvy radio on Sunday that elections would be held in Chechnya following the troop withdrawal. The newly-elected authorities would function for five years until the start of talks on Chechnya's status. 6906 !GCAT !GPOL !GVOTE Absentee voting for Bosnia's election held in Croatia at the weekend gave many Croat and Moslem refugees a bitter taste of post-war reality -- a future where their former homes would be ruled by Serbs. Election day in Bosnia itself is September 14. But some 640,000 Bosnian citizens abroad, a vast majority of them refugees from the 1992-95 war, were called on to vote in 55 countries over one week from August 28. Watched by 260 international monitors, refugees and other Bosnian citizens in Croatia voted in advance on Saturday and Sunday. There are 117,421 eligible voters. A good turnout of 36 percent was recorded at 86 polling stations midway through the event on Saturday evening. The Organisation for Security and Cooperation in Europe (OSCE), charged with supervising Bosnia's first post-war election, reported only minor incidents caused by "technical problems and the complexity of voting". But the absentee polling in Croatia highlighted a grim gap between the dream of the Dayton peace treaty to reunite Bosnia through democratic elections and the reality of the aftermath of ethnic conquest on the ground. The main Croat party, the Bosnian wing of Croatia's ruling HDZ, fielded no candidates in Serb-held northern Bosnia in what analysts say reflects Zagreb's preoccupation with cementing power in Croat-populated southwest Bosnia. Many refugees, expelled from north Bosnia's Posavina region by separatist Serb militia at the outset of war in 1992, were stunned to find no candidates of their own nation on the list. They found it hard to believe that democracy promoted by the international community consisted of voting for enemies. A large number voting at the polling station in Samobor, 20 km (12 miles) from the capital Zagreb, preferred to cross out ballot papers written in Serb Cyrillic script rather than choose between Serb candidates. "What on earth is this? If I had known there would be only Serb candidates on the list I wouldn't have bothered to come!" exclaimed Petar Josipovic, 48, a Croat refugee. The Dayton peace treaty signed last December assigned the whole of northern Bosnia, notorious for a campaign of ethnic cleansing in which the Serbs decimated ancient Moslem and Croat communities, to the Bosnian Serb republic. Former warring parties pledged to guarantee free return of all refugees but in reality very few people have gone back to homes in areas now ruled by members of another nation. "Are they joking? Am I supposed to vote for the same people who came to my flat and said I am a Croat and I'd better leave Banja Luka for good?" Josipovic said caustically. "People were surprised at first, than angered and embittered to find out they have no one to vote for," said a member of the local electoral commission in Samobor. The OSCE has called on voters to choose a three-member (Serb-Moslem-Croat) Bosnian presidency, a multi-ethnic parliament and, depending on where they were from, a federation (Croat-Moslem) parliament or a Serb assembly. But critics say the elections will wind up ratifying the partition of Bosnia achieved by war rather than reverse the cruel tide of "ethnic cleansing" and restore unity. Squeezed into their improvised polling boxes, voters in Samobor often commented in loud disapproving tones and looked up to meet the eyes of confused compatriots. Some swore and wept after spoiling their ballot forms. "I didn't vote for anyone because my town now belongs to the Serbs. I will vote only when it is not Serb anymore and I am able to go back," said K.J., 40, from Derventa, another north Bosnian town overrun by the Serbs in 1992. 6907 !GCAT !GPOL !GVIO Russian Prime Minister Viktor Chernomyrdin appeared to give cautious approval on Sunday to a peace deal signed between Kremlin security chief Alexander Lebed and Chechen separatists. "I am convinced that we are on the right path," Interfax news agency quoted Chernomyrdin as telling reporters in the central Russian city of Nizhny Novgorod. He added he would meet Lebed on Monday to consider the accord. "We must have courage, endurance and patience. We should continue moving ahead but Russia's interests should not be infringed." Lebed and the rebels' chief-of-staff, Aslan Maskhadov, signed an accord in the early hours of Saturday which raised hopes of bringing an end to the 20-months-old conflict in which more than 30,000 people have been killed. The accord deferred a decision for five years on whether the region should remain part of Russia or become independent and involved setting up a joint commission to oversee economic reconstruction and the withdrawal of Russian troops. Lebed returned to Moscow to convince the Russian leadership, military and public that he has not given in to the rebels. Chernomyrdin said on Friday that Yeltsin had approved the draft accord Lebed was due to take to the rebels. But it was amended during eight hours of tough talks with Maskhadov and Kremlin officials said Yeltsin expected a full report from Lebed clarifying the changes. 6908 !GCAT !GPOL !GVIO A big question hangs over the peace deal Russian security chief Alexander Lebed signed with Chechnya's rebels at the weekend. What to do with the region's Moscow-backed leader Doku Zavgayev? The mention of Zavgayev brought a scowl to Lebed's face just minutes after he had triumphantly declared that the war, which has dragged on for more than 20 months, was now over. A Russian reporter wanted to know whether the deal he had just signed effectively annulled the powers of the man recognised by Moscow as Chechnya's legitimate head. "What does anulling Zavgayev's power mean?" he growled. "Did he have any?" Lebed, a former paratroop general who likes to talk tough and thinks he can cut through the hypocrisy which has grown up around Moscow's bloody and fruitless conflict, clearly hopes that will be that. As far as Lebed is concerned, Zavgayev has not been sidelined by the political settlement he signed with the rebels on Saturday because he was never really in power. Chechnya's last communist boss, Zavgayev owes his return to power in the region to the thousands of Russian troops sent there to crush the separatists who forced him out in 1991. Those troops are now due to leave under Lebed's peace deal, and Zavgayev is outraged. All last week he was in Moscow, making his point in a string of interviews. Accusing Lebed of aiding in a coup in Chechnya, he said the deal amounted to giving power to criminals. As a former official in the Kremlin administration, he claims to have Boris Yeltsin's ear, although Yeltsin, whose virtual disappearance from public life has raised doubts about his health, has barely spoken to his own envoy Lebed. Certainly Russia's Prime Minister Viktor Chernomyrdin, who is due to chair a meeting of top officials to review the deal on Monday in Yeltsin's absence, appears to be worried about Zavgayev's position. Chernomyrdin's spokesman said he was concerned by signs that the rebels were setting up parallel power structures across the region, saying that their actions violated earlier agreements. Interfax news agency said Chechnya's pro-Moscow government might resign on Sunday to make way for the coalition Lebed has said will have to be set up in the wake of the deal, which postpones the issue of Chechen independence for five years. But Zavgayev himself, elected in December 1995 in a vote hailed by Moscow but condemned by independent observers as widely falsified, shows few signs of fading away. He presents a problem for Moscow because, having been elected in a vote officials said was free and fair, it cannot simply sack him. Moscow Ekho radio quoted Zavgayev as saying that he had thought about resigning -- as Lebed has suggested -- but that he was driven by a sense of duty to stay on. Chernomyrdin may decide to take Lebed's advice and encourage Zavgayev to step down to smooth things over with the rebels, who see Zavgayev as a traitor and a Moscow puppet. But apart from the humiliation that would involve for Moscow, Zavgayev and some independent commentators have warned that handing over power to the rebels would lead to civil war. Zavgayev says thousands of people in traditionally anti-separatist areas of the region are ready to take up arms against the separatists. There have so far been few signs of them. Indeed, Interfax quoted a Russian interior ministry troop commander, Partagen Andrievsky, as saying on Sunday that the pro-Moscow local administrators and many police had either joined the rebels or simply disappeared. Zavgayev has lost the respect of many Chechens with his distinctly ambivalent attitude to the Russian bombardment of civilian targets. In July, he denied there had been any attacks on villages, provoking disgust from refugees who had been forced to flee bombing. But Viktor Kremenyuk, deputy head of the USA and Canada Institute, said Moscow may decide that Zavgayev had a point. "Regardless of my lack of love for Zavgayev, he has raised a justified question -- how can you have peace among all groups in Chechnya if you seal a deal with just one group?" Zavgayev could end up being the spanner in the works of Lebed's plan. "Yeltsin might decide to insist that Zavgayev be taken into account in any peace deal," he said. 6909 !GCAT !GPOL Russian President Boris Yeltsin kept quiet on Sunday over a peace plan his security supremo Alexander Lebed had signed with Chechen separatists. "The president is having a rest," a presidential spokesman said by telephone. He could not say whether a meeting between Yeltsin and Lebed was scheduled for Monday. The spokesman said Yeltsin had returned to his Rus country residence 100 km (60 miles) northwest of Moscow after visiting his wife Naina on Friday in a Moscow hospital where she is recovering after a kidney operation. Lebed and the rebels' chief-of-staff Aslan Maskhadov signed an accord in the early hours of Saturday which raised hopes of turning a two-week-old truce between the separatists and Moscow troops into a lasting peace. The accord would defer a decision for five years on whether the region should remain part of Russia or become independent and involved setting up a joint commission to oversee economic reconstruction and the withdrawal of Russian troops. Most Russian troops and rebel units have been withdrawn from the capital Grozny, Itar-Tass news agency said on Sunday. Both the rebels and the Russians said there had been no serious incidents. Lebed, Yeltsin's personal envoy to Chechnya and secretary of powerful Security Council, claimed to have succeeded where many other Russian leaders had failed, in finding a compromise to end a conflict in which more than 30,000 people have been killed. He returned to Moscow to convince the Russian leadership, military and public that he has not given in to the rebels, who greeted him like a hero. Instead of congratulating his envoy, Yeltsin has refrained from comment on the deal, hammered out in more than eight hours of talks in the North Caucasus. Furthermore, Kremlin officials indicated that Lebed had some explaining to do. "The Russian president expects from the Security Council Secretary a detailed report with a clarification of the details of the agreements," a Yeltsin spokesman said on Saturday. Zelimkhan Yandarbiyev, president of the self-proclaimed Republic of Ichkeria (Chechnya), told Interfax news agency he was satisfied with the latest accord aimed at resolving the conflict which broke out in December 1994 when Yeltsin sent troops to quell Chechnya's independence drive. He called the document "a serious step towards peace" but warned of a danger coming from "the party of war" -- those in the Russian establishment who are interested, financially or politically, in the continuation of the conflict. All previous accords have failed but the Lebed-Maskhadov one appeared to be the most far-reaching. Prime Minister Viktor Chernomyrdin said on Friday Yeltsin had approved the draft accord Lebed was due to take to the rebels. But it was amended during eight hours of tough talks with Maskhadov and Kremlin officials said Yeltsin expected a full report from Lebed clarifying the changes. Yeltsin's spokesman, who has faced a barrage of awkward questions about the 65-year-old president's health since his virtual disappearance from public life in June, said on Saturday Yeltsin should be allowed to rest and act as he saw fit. "The president must have the right to take a break and the president must have room for manoeuvre. I think that we cannot refuse him that," Sergei Yastrzhembsky told Russian television. 6910 !E14 !E141 !E41 !ECAT !GCAT !GJOB A Polish trilateral commission grouping government, employers and unions suggested that average wage increases in the enterprise sector should not exceed 17 percent in 1997, PAP news agency reported on Sunday. The decision leaves room for increases in real terms as the government projects inflation at 13 percent year-on-year in December 1997. The limit, also meant as a guideline for the private sector, applies only to pay rises that would increase costs of goods and services, and does not affect wages paid out of enterprises' profits, PAP said. It applies to firms employing more than 50 people. Managers of less-profitable state-owned companies, who grant rises breaching the indicator and thereby cause a worsening of the firm's finances, can by law be disciplined. The commission reached a deal at the last moment late on Saturday -- had it failed to do on August 31, the government would have set the average monthly wage indicator itself. "Our lack of satisfaction over the level of the indicator is offset by the fact that a deal was reached," PAP quoted a union negotiator, Adolf Gil, as saying. Last week unions and employers had sought an 18 percent rise in the sector and the government, concerned to curb inflation, suggested 16 percent. In 1996 an average monthly wage in the sector was 929 zlotys ($339.1), and the commission's decision means it could be about 158 zlotys higher next year. The commission also agreed on quarterly guidelines for increases, in relation to the same period a year earlier. These would total 11 percent in the first quarter of 1997, 15 percent in the second quarter, 18 in the third and 24 in the fourth. Last week a trilateral commission meeting agreed that wages of the two million people employed in the non-trading civilian public sector should rise on average by 5.5 percent above inflation in April next year -- a rise of 149 zlotys a month. Some categories, such as education and the health service would get higher real increases. ($1=2.7390 Zloty) 6911 !GCAT Hundreds of thousands of Finns every year make the short trip to their small neighbour Estonia, bringing a consumer boom to the post-Soviet Baltic state as they seek cheap food, fun and especially drink. "We come here for women and for alchohol," said Jari Huttanen, fresh off the ferry from Finland, swigging from a can and already a little drunk. Estonians view their guests with some amusement, glad for the cash the Finns spend in their capital but look askance at their sometimes rowdy, alchohol-fuelled behaviour. Finns feel at home in Estonia, independent from the former Soviet Union for five years, as the two peoples speak a similar language. But the real impetus for the consumer invasion is the incredibly cheap cigarettes, drink and food. Finns say prices can be around 30 to 40 percent cheaper than at home. Finland was even forced to adopt laws in May that cut the amount of drink that can be taken duty-free as day-trippers to Estonia and Russia flooded the home market with cheap booze. Finns now have to stay overnight if they want to qualify for big duty-free allowances and hoteliers and tourist officials say many are choosing to do just that. "People are staying longer and they are staying in hotels," said Yrjo Vanhannen, the Finnish manager of the Viru Hotel, a mini sky-scraper that has been a magnet for Finns since the Soviet days. During 1995, of the 2.1 million visitors to Estonia more than 70 percent were Finns. Most came only for the day, possible by ferry or fast hydrofoil across the short 90 km (55 miles) which separates Tallinn and Helsinki. Estonian officials say passenger numbers fell immediately after the May 1 start of the new law but are now rising again. The Port of Tallinn said 989,323 people passed through it in the second quarter of the year, versus 834,730 people in the second quarter of 1995. The Finnish visitors have helped turn Tallinn into a mini version of Helsinki, with its own branches of well-known Finnish stores, such as Stockmanns. Finns spent an estimated four to five billion kroons last year in Estonia ($340-420 million). This comes on top of the millions of dollars which has been invested by Finnish companies into the Estonian economy. Estonians, more reserved than Finns, are generally positive about their cousins but Vanhanen said some people have a mixed attitude. "There is an ambivalent, love-hate relationship," he said. "They (Estonians) call us reindeers because we act a little bit stupid and we walk around in herds," Vanhannen added. The Viru has been a magnet for Finnish day-trippers since the Soviet days, when boatloads of notorious "vodka tourists" began to hit the city. He is candid over the drinking habits of his countrymen. "When they came here they were all drunk, they were like kings because they had money," Vanhannen said, speaking of the first vodka tourists. Although the Finns feel at home in Estonia given the lingustic links, a mutual inferiority/superiority complex operates between the two nations, locals say. Some Finns view Estonians as the poor relations, still recovering from communism and with living standards well below those of Finland. The Estonians on the other hand see some vulgarity in the rowdy behavior of their cousins. As one Estonian official said jokingly: "You can tell which are the Finns, they are the loud ones". But Estonians say that being so close to Finland during the 50 years of Soviet rule helped them escape the worst excesses of Sovietisation. Many people in the north of the country, including Tallinn, could watch Finnish television and had a better idea than most in the Soviet Union of what life was like in the West and what was going on in the world. One Estonian diplomat said Finnish television caused one of the largest population shifts in Estonian history when thousands of people travelled from the south to watch the famous French erotic film "Emanuelle" on Finnish television. 6912 !GCAT !GCRIM Helmer "El Pacho" Herrera, the last Cali cartel drug kingpin still at large, surrendered to police in southwest Colombia on Sunday in a gesture he described as "a gift" to the nation. A National Police spokesman said Herrera, a master of disguise and the target of a nationwide manhunt for more than a year, surrendered shortly after noon (1700 GMT) at a prearranged meeting place outside the southwestern city of Cali, where his criminal drug syndicate was based. The police spokesman said Herrera, the object of a recent U.S. extradition request, had surrendered in the presence of National Police director Gen. Rosso Jose Serrano and other senior security force members. Wearing a blue business suit and glasses and looking more like a successful bank executive than a dangerous fugitive, Herrera told reporters shortly after his arrest that his surrender was "a gift." "I believe in Colombian justice and its institutions," he said. "It was time to give the country a truce. This is a gift to the country that has suffered and been so stigmatized because of drug trafficking." Six of the seven top leaders of the cartel were arrested last summer in an unprecedented crackdown on what has often been described as the world's leading drug trafficking organisation. The 45-year-old Herrera, considered highly dangerous, was the only cartel heavyweight who remained at large. A reported billionaire, Herrera recently rose to the No. 3 position within the cartel after the shooting death in March of Jose Santacruz Londono, his closest partner inside the drug organisation. U.S. drug experts maintain that brothers Gilberto and Miguel Rodriguez Orejuela -- the undisputed leaders of the Cali drug mob, arrested in June and August 1995 -- continue to run their criminal empire from inside Bogota's La Picota prison. But the experts had also been working on the assumption that Herrera was taking care of a lot of cartel business on the outside, and his arrest could deal a serious setback to the syndicate's daily operations. President Ernesto Samper, who has been accused of using a fortune in Cali cartel narcotics money to finance his 1994 election campaign, has denied that drug lords are able to continue operating from inside any Colombian jail. In brief remarks to reporters in Bogota, he said the Cali cartel was now "finished" and the country had closed the book on one of its most notorious criminal gangs. "He (Herrera) was the only person from the Cali cartel's leadership who hadn't been submitted to justice," Samper said. U.S. Ambassador Myles Frechette also welcomed Herrera's arrest, saying the United States was "delighted that the unrelenting pressure of the Colombian police" had finally made it happen. That pressure included nearly 400 raids on apartments, farms, houses and business linked to Herrera during a manhunt that began 16 months ago, a police statement said late on Sunday. "Pacho was the last of the Cali kingpins still at large," Frechette said in a statement. "The United States government is gratified by his arrest." U.S. Attorney General Janet Reno formally requested the extradition of the Rodriguez Orejuelas, Herrera and Juan Carlos Ramirez Abadia, a cartel enforcer, in June. The government has refused to act on the extradition requests, arguing that to do so would violate a ban on extradition written into Colombia's constitution in 1991. Legislation introduced under Samper's predecessor, Cesar Gaviria, offers substantial sentence reductions to drug lords who turn thmeselves in and confess to their crimes. That legislation, known as the "law of submission," is expected to be rewritten in the current session of Congress to ensure tougher sentences for drug traffickers. It could still benefit Herrera, however, since government sources say the new legislation would not take effect retroactively. 6913 !GCAT !GVIO At least one suspected leftist rebel was killed and four people arrested on Saturday in a new clash with government security forces in the southern Mexican state of Oaxaca, officials said. "In the early hours of today members of the Mexican army and state judicial police ... clashed with a group of armed people in the municipality of San Mateo Pinas on the Oaxaca coast," the state government said in a statement. "One of the members of the aggressor group was killed and four people were arrested." The joint army-police operation was aimed at arresting those responsible for a wave of attacks by up to 200 members the Popular Revolutionary Army (EPR) on the night of Aug. 28 in Oaxaca and several other states, in which at least 14 people die, officials said. Radio station Radio Red said one policeman was also killed on Saturday during an operation against the EPR, but state officials could not confirm the report. The body of another suspected EPR rebel was found on Saturday in a village near the Oaxaca tourist resort of Huatulco. He was thought to have died of wounds sustained in the Aug. 28 attacks, the state government said. Mexican President Ernesto Zedillo pledged on Friday to hunt down the EPR following the wave of attacks, the most serious in Mexico since the Zapatista rebel uprising in 1994. He called the EPR actions "terrorist." "Who has given them the right to try to take power by force? That is definitely not acceptable; it cannot be tolerated ... the state, acting within the law, will use every available means to bring these people to justice," Zedillo said in an interview with television network TV Azteca. Zedillo promised though that he would not allow security forces to commit human rights abuses in their hunt for the rebels, as they have done in previous attempts to stamp out guerrilla movements. "I have taken the decision that everything done to prosecute these criminals must be done within the law -- without violating individual rights ... and cautiously abiding by judicial procedure," he said. The rebel group, which officials said on Friday had a presence in at least eight Mexican states, have called for a popular revolt against the government. But Zedillo, who is due to give his second State of the Union address on Sunday, said the group had little popular support and was trying to prompt the government into a repressive counter-insurgency campaign that might gain the rebels local support. "We will not give them that pleasure," he said. "They have no social cause; their cause is violence." Reforma newspaper reported on Saturday that the rebels, in a statement released in Huatulco, threatened to carry out further attacks in the tourist resorts of Acapulco, in neighbouring Guerrero state, and in Cancun, in the Yucatan peninsula. The report could not be independently confirmed. The White House on Friday strongly condemned the rebel violence, but the U.S. State Department said it saw no threat to Mexican political or economic stability. Mexican officials said security measures had been stepped up for Zedillo's State of the Nation address and at oil and gas installations, telecommunications facilities and roads across the country. 6914 !GCAT !GVIO More than 70 soldiers and police, including at least 40 at a single military base, were killed by leftist guerrillas in a widespread offensive in the past 24 hours nationwide, military sources said on Saturday. At least 40 soliders were killed when hundreds of leftist guerrillas overran an army base in a jungle-covered region of Colombia's southwestern Putumayo province. They said the attack -- one of the worst in more than three decades of armed conflict -- raised the number of security force members killed in a stunning nationwide rebel offensive that began on Friday to about 70. The Las Delicias military base was destroyed in the attack on Friday evening after being overrun by about 400 Revolutionary Armed Forces of Colombia (FARC) rebels, a senior military official told Reuters. The official, who asked not to be identified, said an undetermined number of soldiers were wounded in the attack. He said he was unable to confirm reports that the wounded numbered at least 30 and that another 20 soldiers were taken prisoner. Military sources said government troops had been placed on a maximum state of alert nationwide because of the flurry of apparently closely coordinated guerrilla attacks, which began late on Friday. Other punishing strikes on military and police targets included a rare rebel foray into the southern outskirts of the capital, Bogota, where five policemen were killed and three others wounded in a series of rocket and dynamite attacks on Friday night, Gen. Euclides Sanchez Vargas, commander of the 13th Army Brigade, told reporters. At least seven soldiers were killed, meanwhile, in heavy fighting on Saturday between government troops and FARC rebels in the municipality of Mesetas in eastern Meta province. Four members of the National Police Force were killed in another rebel attack in northern Santander province. The death toll was expected to rise there because a dozen policemen were officially listed as "missing" late on Saturday, hours after the attack occurred. At least a dozen other security force members were reported killed in rebel attacks on several towns in Cundinamarca province, of which Bogota is the capital, in the central coffee-growing province of Tolima, in Magdalena to the north and Guaviare and Valle del Cauca to the south. The mayor of the small town of Susa in Cundinamarca was among the victims of an attack there overnight. All told the Caracol radio network reported late on Saturday that more than 60 soldiers and police had been killed in guerrilla attacks over the previous 24 hours. In addition to the FARC military sources said National Liberation Army (ELN) members were participating in the latest wave of violent attacks across the country. The FARC and ELN, Colombia's largest and oldest guerrilla groups, have been fighting to topple the government since the mid-1960s. 6915 !E12 !ECAT !GCAT !GPOL Panama's President Ernesto Perez Balladares acknowledged on Sunday that his economic platform has not been popular and it has cost him politically over the past two years. "During the past two years we have made difficult and painful decisions that no one would have wanted to make due to their high political costs. We do what is needed, not to win applause," Perez Balladares said on Sunday during his second State of the Nation address. "Modernizing the economy, deregulating markets and stimulating private and foreign investment are crucial to generate employment and long-term economic growth," the president said. He said he will continue plans to attract foreign investment by privatising state agencies to make "Panama a strong force like the tigers of Southeast Asia." Perez Balladares said he has not forgotten his national agenda to create jobs and lower unemployment rates. The president said he created a new High Level Commission made up of his Cabinet and a private sector economist to track unemployment rates, which, according to government statistics, those rates stood at 14 percent in 1994 and 1995. Perez Balladares also announced, without providing detail, an initiative to give credits to start family companies. The president urged lawmakers to quickly pass the Canal Authority law "to ensure that the canal operation and administration remains transparent and that tolls are competitive," he said. Under treaties signed in 1977, the United States will hand over control of the canal to Panama at noon on Dec. 31, 1999. The treaties also call for the withdrawal of all U.S. bases and troops. 6916 !GCAT !GCRIM Helmer "El Pacho" Herrera, the only Cali cartel drug kingpin who was still at large, surrendered to police on Sunday in southwest Colombia, authorities said. A National Police spokesman said Herrera, a master of disguise and the elusive target of a nationwide manhunt for more than a year, surrendered shortly after midday at a pre-arranged meeting place outside the southwest city that gave his criminal drug syndicate its name. The police spokesman said Herrera, the target of a recent U.S. extradition request, surrendered in the presence of National Police director Gen. Rosso Jose Serrano and other senior security force members. He was then whisked away to a police headquarters in Cali, the spokesman said. Six of the seven top leaders of the cartel were arrested last summer in an unprecedented crackdown on what has often been described as the world's leading drug trafficking organisation. Herrera, considered highly dangerous, was the only cartel heavyweight who still remained at large. A reported billionaire, Herrera recently rose to the No. 3 position within the cartel following the shooting death in March of Jose Santacruz Londono, his closest partner inside the drug organisation. U.S. drug experts maintain that brothers Gilberto and Miguel Rodriguez Orejuela -- the undisputed leaders of the Cali drug mob who were arrested in June and August of last year -- continue to run their criminal empire from inside Bogota's La Picota prison. But the experts have also been working on the assumption that Herrera was taking care of a lot of cartel business on the outside, and his arrest could deal a serious setback to the cartel's daily operations. "Pacho has been offering for many months to turn himself in," U.S. Ambassador said in a statement, referring to on-again-off- again negotiations since late last year regarding the drug lord's possible move to give himself up. "We are delighted that the unrelenting pressure of the Colombian police has forced him to surrender," the statement said. "Pacho was the last of the Cali kingpins still at large," it added. "The United States government is gratified by his arrest." U.S. Attorney General Janet Reno formally requested the extradition of the Rodriguez Orejuelas, Herrera and Juan Carlos Ramirez Abadia, a lower-ranking cartel enforcer, in June. The government has refused to act the extradition requests, however, arguing that any move to do so would violate the ban on extradition written into Colombia's 1991 Constitution. Two senators, including a member of President Ernesto Samper's own Liberal Party, proposed constitutional amendments last week aimed at lifting the ban on extradition. But the government has declined to support the move and neither amendment is expected to win sufficient support for passage by the ruling party controlled Congress. 6917 !GCAT !GCRIM The only Cali cartel drug kingpin still at large surrendered to police on Sunday on the outskirts of the city in southwest Colombia that gave the infamous drug organization its name, authorities said. A National Police spokesman said Helmer "El Pacho" Herrera, the No. 3 man in the cartel and the elusive target of a nationwide manhunt for more than a year, gave himself up shortly after midday at a pre-arranged meeting place outside Cali. The police spokesman said Herrera, the target of a recent U.S. extradition request, surrendered in the presence of National Police director Gen. Rosso Jose Serrano and other senior security force members. He was then whisked away to a police headquarters in Cali, the spokesman said. Six of the seven top leaders of the cartel were arrested last summer in an unprecedented crackdown on what has often been described as the world's leading drug trafficking organisation. Herrera, considered highly dangerous and a master of disguises, was the only cartel heavyweight who still remained at large. 6918 !GCAT !GPOL An opposition congressman almost upstaged President Ernesto Zedillo on Sunday by carrying out a silent protest wearing a pink pig's head mask during the leader's second State of the Nation address. Marco Rascon, a well-known rebellious deputy with the leftist Democratic Revolution Party (PRD), walked calmly up to the foot of the podium in the Chamber of Deputies 10 minutes into Zedillo's annual speech. Rascon slipped on a latex hog's head mask and began to unveil about 25 posters. Some were political and critical of the government, while others brought fits of laughter from onlooking legislators and media. Television viewers had little chance to see the protest, with official cameras remaining unerringly trained on the Yale-educated Zedillo. One poster read simply "Oink, OinK, Oink, Oink", another "Long Live the 19th Century" -- refering to opposition claims that Mexico is still relatively backward -- and a third said "We get rid of our corn fields and import Corn Flakes", attacking government agricultural policy. When Rascon unrolled a poster refering to Luis Donaldo Colosio, the ruling party presidential candidate assassinated in March 1994, emotions erupted. Diego Fernandez de Cevallos, the fiery former presidential candidate for the conservative National Action Party, stood up, shouted at Rascon and moved as if to confront the PRD legislator. Other lawmakers rose to their feet and a pushing match ensued between a dozen deputies, including Irma "The Tigress" Serrano, a PRD congresswoman and former entertainer, herself known for her extravagant outbursts and dress sense. Security guards rushed down the aisles of congress and restored order. Rascon quickly ended his protest, removing his mask and returning to his seat. 6919 !E11 !ECAT !GCAT !GPOL President Ernesto Zedillo on Sunday declared that Mexico's economic crisis was over, but he warned that it would be a long time before ordinary citizens saw any improvement in their living standards. In his second State of the Nation address, Zedillo spoke against a backdrop of guerrilla violence that has emerged in Mexico in the last two months and increased social protest, partly fuelled by the country's economic collapse last year. "With complete confidence, today I can affirm that thanks to the efforts of all Mexicans, the country has overcome the stage of economic emergency and has clearly begun to recover," Zedillo said. He acknowledged that growth was still insufficient, however, and made clear Mexicans were still not back to the living standards of December 1994, when he took office and shortly afterward devalued the peso. "It is my duty to point out that the beginning and the consolidation of the recovery will not be enough to immediately repair the damage that the crisis did to the living standards of the population, and even less to remedy the lags that have historically accumulated." In the wake of the catastrophic devaluation, Mexico's economy fell more than 6 percent in 1995 -- its worst recession since the 1930s Great Depression. In the first half of this year, however, it has grown more than 3 percent, already exceeding the government's year-end growth target. Zedillo, whose campaign slogans of "Well-being For All The Family" and "He Knows How To Do It" came back to haunt him after the devaluation, laid out a three-point plan for long-term sustained growth that marked no apparent change in policy. It was based on continued application of stiff austerity measures that have helped drag Mexico out of crisis, structural reforms to improve efficiency and an increase in national savings, mostly via pension reform. He said the fiscal and monetary discipline that has brought spiralling inflation back under control would be maintained next year, as would the free-floating exchange rate that has actually helped the peso strengthen this year. Next year's budget, Zedillo said, would be based on a growth projection of at least 4 percent, which he expected to rise higher from 1998. "I am fully convinced that because of its positive effect on long-term domestic savings, the reform of the pension system will be what most contributes to sustained growth in our economy," Zedillo said. 6920 !GCAT !GPOL !GVIO Mexico's President Ernesto Zedillo, delivering his second State of the Nation address on Sunday, condemned political violence by a new leftist rebel force as "terrorism" and pledged to fight it with "the full force of the State." "We Mexicans do not accept the appearance of bloody and outdated uprisings that attempt to close the path to democracy and...to impose their intolerant will on the country," Zedillo said at the San Lazaro legislative palace in Mexico City. "We do not accept the appearance of groups that use terrorism to murder and destroy and cause fear." Zedillo, his voice breaking with emotion as he spoke, received a standing ovation from legislators. "We will pursue every terrorist act...we will act with the full force of the state," he said. Zedillo pledged that security forces would respect the law as they hunt down the rebels of the Popular Revolutionary Army (EPR), which launched coordinated attacks on the night of Aug. 28 in several states which left at least 14 people dead. Sporadic clashes also took place on Friday and on Saturday as police and army forces hunted the rebels, killing at least two more people in the states of Michoacan and Oaxaca. "Those who take recourse to violence seek to promote repression," Zedillo said. "The government will not be provoked in that way." Officials say the EPR, which made its first appearance just two months ago in the southern state of Guerrero, is a hardline Marxist-inspired rebel force which has no popular support. The EPR accuses the government of using murder, torture and political oppression to maintain a corrupt regime. Zedillo said political reforms, including a pact between all four main parties to overhaul electoral laws, meant Mexico was on the way to a fully-functioning democracy in which political violence was invalid. The country's justice system and police forces were still in need of deep reform before they can win the respect and trust of the Mexican people, he added, though he pledged to battle corruption and impunity. He called for a negotiated solution to Mexico's other armed uprising of Zapatista rebels in the southern state of Chiapas. Officials have drawn a clear distinction between the Zapatistas and the EPR, praising the former's willingness to negotiate with the government. Legislator Marco Rascon of the leftist Democratic Revolution Party (PRD) briefly interrupted Zedillo's speech by donning a mask of a pig's head and holding up a series of posters criticising the government. Zedillo, who took office on Dec. 1, 1994 for a six-year term, within weeks found himself battling the collapse of the peso and an ensuing deep recession. He declared Mexico's economic "emergency" over, saying the economy was clearly on the road to recovery. He projected economic growth next year of at least 4 percent and said growth rates in the following years would be even higher. Inflation unleashed by the peso crisis was increasingly under control, he added. "Between January and August 1995, price levels increased 38 percent. It is estimated that the increase this year in the same period will be around 18.5 percent," he said. "I will propose a strategy for 1997 that will allow a growth rate of gross domestic product of at least 4 percent, (and) that will favour a further reduction in inflation and interest rates," he said. He said his government would maintain fiscal and monetary discipline and the free-floating exchange rate of the peso. 6921 !GCAT !GPOL !GVOTE Panamanian lawmakers elected an ally of President Ernesto Perez Balladares as president of the General Assembly, officials said on Sunday. Cesar Pardo, a ruling party legislator from the western Cocle province, won a majority vote in the single-house Congress where Perez Balladares' Democratic Revolutionary Party (PRD) holds 38 of 72 seats, a presidential spokesman said. The congressional president's term is one year. 6922 !GCAT !GPOL !GVIO Mexico's President Ernesto Zedillo on Sunday condemned political violence by a new leftist rebel force as "terrorism" and pledged to fight it with "the full weight of the State." "We Mexicans do not accept the appearance of bloody and outdated uprisings that attempt...to impose their intolerant will on the country," Zedillo said during his second State of the Nation address. "We do not accept the appearance of groups that use terrorism to murder and destroy." Zedillo, his voice breaking with emotion as he spoke, received a standing ovation from legislators. "We will pursue every terrorist act...we will act with the full weight of the state," he said. He nevertheless pledged that security forces would respect the law as they hunt down the rebels of the Popular Revolutionary Army, which launched coordinated attacks on the night of Aug. 28 in several states which left at least 14 people dead. "Those who take recourse to violence seek to promote repression," he added. "The government will not be provoked in that way." 6923 !GCAT !GVIO The military launched a counter-offensive in Colombia's southwest jungle on Sunday following a stunning leftist rebel attack on an army base there in which at least 34 soldiers were killed. The attack, which came amid a nationwide guerrilla offensive that took nearly 100 lives in two days of fighting beginning late on Friday, was the worst in more than three decades of guerrilla war and a humiliating defeat for the army. A senior military official, who spoke on condition of anonymity, said Sunday's counter-offensive was taking place near the burned-out remains of the Las Delicias military base in Putumayo province, along the banks of the Caqueta river. The base was totally overrun by Revolutionary Armed Forces of Colombia (FARC) rebels on Friday evening. There were unconfirmed reports in Colombian newspapers on Sunday that at least 54 soldiers had died at Las Delicias and that more than 25 others had been taken prisoner by rebels. Army commander General Harold Bedoya told a news conference on Saturday night that the official death toll stood at 34, but he conceded that the number could rise once military inspectors drafted a final report from the area. The military official, who asked not be identified, said army reinforcements flown into Putumayo early on Sunday had been ordered to conduct search-and-destroy missions throughout the province. The troops engaged in several firefights with guerrillas early in the day but there was no immediate report on casualties, the official said. Prior to Friday's night's attack, the single worst guerrilla strike against a military target came last March, when 30 soldiers died in a FARC ambush on a military convoy in southwestern Narino. Friday's attack was considered far worse, however, not only in terms of sheer numbers but because it was coupled with what appeared to be carefully coordinated guerrilla attacks involving FARC and National Liberation Army (ELN) rebels in 11 other provinces apart from Putumayo. All told, authorities said 67 security force members and 25 rebels were killed between Friday night and Saturday night in what Defence Minister Juan Carlos Esguerra described as "two days of madness and bloodshed." Esguerra said guerrillas launched their "spiral of terrorism" in reprisal for government efforts to wipe out illicit coca leaf plantations in Putumayo and other southern provinces but vowed that there would be no turning back on the U.S.-backed drug crop eradication programme. The FARC, Colombia 's largest and oldest guerrilla group, specialises in the protection of rural drug crops and laboratories. Government and military have repeatedly accused it of orchestrating mass peasant protests against the eradication programme in Putumayo and two other southern provinces since last month. Peace overtures between rebels and the government have been made since last month as both sides held out tentative olive branches and talked, yet again, about the possiblity of negotiating an end to Latin America's largest and longest- running insurgency. President Ernesto Samper said Friday's rebel offensive ruled out the possibility of moving toward peace talks with guerrillas anytime soon, however. "At this point there is no climate or prospect for dialogue with the guerrillas," he said. He added that the FARC's "barbaric and belligerent attitude" showed they were only interested in pursuing "a spiral of violence and terror" which the government and military would ulimately have to stop by force. "There will be no corner of this country where the presence of the military isn't felt," Samper said. 6924 !GCAT !GODD !GREL A Haitian woman possessed by the spirit of Gede, the Voodoo god of the cemetery, plunges a knife into the neck of a bleating goat. Blood spurts from the animal as it convulses to the beat of a drum. The sacrifice marked the last day of Sucre, a recently ended fifteen-day ceremony in the north of Haiti, where the rich cultural tradition of Voodoo contrasts with the chaotic political violence in Haiti's capital city, Port-au-Prince. The rules of the spirits provide respite from the lawlessness of the streets. "Sacrifice does not symbolise death, it is an offering of the life force of the animal to the spirit," said Lalo, a Voodoo congregant at Sukri -- the spelling of Sucre in Haiti's native Creole. Twenty-one of the 101 spirits in the Voodoo religion are celebrated at the Sucre ceremony. The rest are spirits that are said to serve the devil. During the long, hot days under the shade of the great Lenba tree whose roots provide seating in the middle of the Sucre temple yard, people discuss the political news brought by city folk who visit during the ceremony. Haiti's capital has been engulfed by violence in the past two weeks, including an armed assault on the main police station by a band of men wearing military fatigues, two political assassinations and a wave of grenade attacks. The instability is widely perceived as an attempt by former members of Haiti's defunct army to destabilise the democratic government. The tales of bombs and threats have an all-too-familiar ring to Haitians, for whom democracy was restored in 1994 by U.S.-led multinational forces following three years of repressive military rule. "For three years we were too scared to walk the streets, but that will not happen again. We live in a democracy now," said Pierre Constant, a painter sitting under the Lenba tree. "Those who hunger for power at the cost of the people will be judged. The spirit's eyes see all and know what is just." The spirits, which offer Haitians respite from decades of turmoil and grinding poverty, are never far from political life. They are said to have started the revolution which eventually won Haiti its independence from the French in 1804. Each night of the ceremony in Sucre, near the city of Gonaives, the intoxicating Congo drum beat draws the spirits into the heads of the dancers who pound their feet to the floor, adding to the rhythm of the drum, Voodoo adherents say. The Voodoo priest of the temple douses the dancers with Klerin, a strong Haitian moonshine. Some nights the dancing lasts until dawn in the hot atmosphere of the temple. "Congo is the most charged of all the voodoo rythms. These spirits are the ones that like to go wild and drink and dance all night," said Edelle Joseph, a mambo, or voodoo priestess. Sucre, which calls on the Congo spirits, is one of three annual ceremonies in this northern region of Haiti, a three-hour bus ride from Port-au-Prince. The other two ceremonies pay homage to the Dahommey and Nago rhythms and spirits. All three of the rhythms descend from western Africa, where people were enslaved and brought to the Caribbean, scholars say. The displaced Africans were prevented by their French masters from practicing their own religion and so masked their own African spirits with Catholic saints. The convergence of the different cultures created the Voodoo religion, much like the creation of Creole, Haiti's native tongue, which incorporates many different languages. Although officially 80 percent of Haiti is Catholic, Voodoo remains at the root of all aspects of the country ranging from herbal health care to community heirarchy. The Mambo tree towers over a small river that runs through Sucre. Under it, a man possessed by the spirit of Zinga, bathes a woman with leaves and sacred water. She lights a candle to make a demand of the mambo spirit who represents mother earth. "One day you will bring life to me Mambo, I will wait patiently because my life is in your hands," she said. 6925 !GCAT !GCRIM !GPOL !GVIO The Mexican government on Saturday named a little-known lawyer to become the new head of its investigation into the 1994 assassination of top politician Luis Donaldo Colosio. Luis Raul Gonzalez Perez, who officials said was previously at the government's National Human Rights Commission, will be the fourth special prosecutor to take up the case, the most serious political killing in Mexico in half a century. His predecessor, police investigator Pablo Chapa Bezanilla, was fired earlier this month after a key suspect in the case was acquitted by a judge for lack of evidence. One man is in prison for the killing, serving a 45-year sentence, but authorities believe the assassination was a plot involving several other people. Prosecutors have been unable to make charges stick against anyone else in the case, however. Colosio, the presidential candidate of the long-ruling Institutional Revolutionary Party (PRI), was shot dead on March 23, 1994, after a campaign rally in the northern city of Tijuana. He had been widely expected to win August 1994 elections for the PRI, which has been in power since 1929. His place was taken by his campaign manager, Ernesto Zedillo, who is now Mexican president. 6926 !GCAT !GDIS !GENV Three people died in the central Mexican town of Leon on Saturday when a sudden storm caused a river to burst its banks, the government news agency Notimex said. The flooding destroyed more than 50 homes in the west of the city, blocked 15 streets and forced more than 1,000 people to move into temporary shelters, Notimex said. Local officials could not immediately be reached for comment. Notimex said the dead were two children who were washed away and drowned, and a man who was electrocuted by a downed power cable. 6927 !GCAT (Compiled for Reuters by Media Monitors) THE AUSTRALIAN FINANCIAL REVIEW Federal Communications Minister Richard Alston has described the full privatisation of Telstra as both 'inevitable' and 'highly desirable' and said the Federal Government will probably seek a mandate at the next election to sell the remainder of the telecmmunications carrier. Page 1. -- ACTU President Jennie George phoned Labor Opposition Leader Kim Beazley over the weekend, requesting he put an end to the campaign of destabilisation she believed is being waged against her within the ranks of the Federal ALP. Beazley assured George he would look into it, with Shadow Industrial Relations Minister Bob McMullan already putting the wheels in motion. Page 1. -- The CSIRO has launched a national awareness campaign in conjunction with the release of a report which shows the commercialisation of three CSIRO breakthroughs has the potential to reap up to A$1.6 billion for Australia. Page 4. -- New South Wales will today usher in a new era of labour market re-regulation, as State Industrial Relations Minister Jeff Shaw describes the 1996 New South Wales Industrial Relations Act, to take force today, as the "first attempt in the 1990s by a Labor overnment to roll back the excesses of a Coalition model." Page 5. -- THE AUSTRALIAN Federal Communications Minister Richard Alston yesterday pledged his support for the full sale of Telstra, saying it would be a viable option for the next Federal election. As Alston's confidence increases over the passing of the one-third sale of the telecommunications giant in the Senate, he said it was always the intention of the Government to push for the total sale of Telstra, yet he was the first to actually spell it out. Page 1. -- For many involved with the 113-year-old Australian Rules Football club Fitzroy, yesterday's final game was a sigh of relief, yet for others it was as hard to come to terms with as a family death. As the team came last on the AFL ladder, the Sydney Swans were celebrating the minor premiership and the chance to play their first game of the finals at their home ground. Page 1. -- Gusts of over 100 kilometres an hour were part of an unusual east coast cyclone that marked the end of an otherwise uneventful winter. The storms have left one man dead, over 50,000 Sydney homes without power, many trees uprooted and six metre swells on New South Wales' south coast. Page 3. -- The New South Wales Bureau of Crime Statistics has released a report which has found methadone treatment cuts property and drug-related crime rates by as much as half. The report, which will be studied by State Governments, points out that any expansion of methadone treatment as a crime control measure should be looked at carefully, as it could spark a public backlash. Page 3. -- THE SYDNEY MORNING HERALD The Australian Federal Police will pursue the manipulation of the 1994 election of the New South Wales branch of the postal and telecommunications section of the Communication Electrical Plumbing Union (CEPU), a scandal that was ignored by the Keating Govrnment and former Justice Minister Duncan Kerr. Page 1. -- The Australian Federal Police are yet to lay charges over the riot which broke out during a union rally at Parliament House in Canberra two weeks ago. While more than 100 people were injured and A$75,000 worth of damage to Parliament House, a special five-member police taskforce has failed to lay charges, even after a Herald report on Saturday that union officials were actively involved in the rally. Page 1. -- Former ABC managing director David Hill has criticised the broadcaster's board and senior management for not presenting a united front against the Federal Government's funding cuts, has estimated 1,000 jobs will be lost under the cuts, and revealed he beleves the ABC has been relying too heavily on imported product, rather than encouraging Australian programming. Page 3. -- University vice-chancellors and administrators have predicted a drop in applications from school-leavers next year, as they fear Federal Government plans to increase fees. The drop in numbers could see some courses facing a 'collapse' in enrolment numbes. Page 3. -- THE AGE Experts are warning that the nation faces growing social unrest and racial division after new research has revealed that racist attitudes and remarks are widespread in Australian schools, as much between ethnic groups as from those of English-speaking bacgrounds. Page 1. -- Australia has secured agreement from key Asian and Pacific countries for an ambitious scheme which will give business travellers automatic visa clearance and priority entry to 18 nations via an Asia Pacific Economic Cooperation business travel card, valid for 10 years. Page 1. -- Melbourne City Council is drafting an amendment to planning laws which would allow it to bypass its requirements to notify adjoining landowners of planning applications, in a bid to encourage development in the central business district by reducing delays caused by objections. Page 1. -- Communication Minister Richard Alston has been forced to restate the Federal Government's position on the Telstra sale after he had declared that a total sale was inevitable. Alston still maintained, however, that a further 25,000 jobs could be lost as apart of the sale and there would be subsequent restructuring. Page 3. -- Reuters Sydney Newsroom 61-2 373-1800 6928 !GCAT (Compiled for Reuters by Media Monitors) THE AUSTRALIAN FINANCIAL REVIEW In its fifth successive year of decline, Australia's market share in Japan in 1995 slipped from five per cent to 4.3 per cent. Australia is one of the few countries to have a trade surplus with Japan, yet the four biggest exporters to Japan - the US, China, South Korea and Taiwan - have either improved their market share or held their ground. Page 1. -- After a court decision in May abolished an old restriction on third parties paying for legal action undertaken by others in return for a share of damages awarded, company liquidators are discovering a new weapon to use against the heads of failed companies - insurance company funding for legal actions. Page 2. -- In an attempt to recover losses and improve its position in the interstate market, Ansett Australia AIRa NZ is considering dropping first class on its domestic flights, after a 45 per cent fall in those tickets over the past two years. Corporate customers and Government departments are being sounded out this week over the move, which would see Australia move in line with the rest of the world, as it is one of the few countries where a domestic first class still exists. Page 3. -- Mining and forestry group North Ltd has settled a long-running legal action in the Industrial Relations Court in which it was seeking more than A$250,000 in damages from unions involved in a strike at a Tasmanian paper mill four years ago. An out-of-court settlement was negotiated with the ACTU and the unions. Page 3. -- MIM Holdings Ltd shareholders have been asked to accept their lowest annual dividend payment in ten years, despite a big bounce back into profit for 1995-96. The final dividend has been halved to A$1.25 a share to help the company fund its billion dollar commitments to new projects over the next three years. Page 20. -- The National Mutual Holdings senior management team have finalised the retail price, as well as the indicative institutional price, for the company's sharemarket listing on October 8, after determining the exact number of shares sought by NatMut's 1.2 milion policy holders. Page 21. -- THE AUSTRALIAN United Kingdom telecommunications carrier Cable & Wireless plc CW. L, a 24.5 per cent shareholder in Optus Communications, has supported a move to align Optus Vision with the Australis Media Ltd ALM. AX satellite pay-TV business. Page 29. -- Multinational JR Simplot acquired some of Australia's most famous food brands, including Four'n Twenty Pies, Edgell Birdseye and Nanna's when it paid A$1.3 billion to Pacific Dunlop Ltd PDP. AX for its Pacific Brands Food group, and the results have been rewarding. Page 29. -- Building and construction materials company CSR Ltd CSR. AX, will attempt to get itself out of trouble with a sale of A$506 million in debt securities to fund the expansion of its growing United States operations. The funds will be used by subsidiary CSR America, a concrete group, and CSR Finance, the company's finance arm. Page 29. -- In the lead up to the Sydney 2000 Olympic Games, Puma Australia, the best performing subsidiary of the international Puma AG sportswear group, will launch a fresh assault on the A$450 million wholesale sporting footwear market. Page 31. -- Richard Sheppard, executive director of Macquarie Bank Ltd MBL. AX, believes medium-sized business are set to reap significant rewards from increased competition within the financial sector. Sheppard claims the current outlook is good for medium-sized businesses looking to borrow. Page 31. -- As former Amcor Ltd MAC. AX managing director Stan Wallis retired from his position to head the banking inquiry, the new managing director of the paper and packaging giant, Don Macfarlane, must today face the market to report the company's first profit decline. Page 31. -- THE SYDNEY MORNING HERALD A bumpy ride is expected for financial markets this week as concerns in the United States over inflation is fuelling ideas of an interest rise there. Meanwhile, the Reserve Bank is meeting tomorrow, yet an adjustment of interest rates is not expected and National Australia Bank chief economist Alan Oster believes that post-Budget local interest rates are more likely to go up than down. Page 31. -- Many in Australia's banking industry are speculating over the findings of the Wallis Inquiry into Australia's financial systems, with expectations the market may head for another round in the bank mergers game that shook the industry 10 years ago. Page 31. -- Film and Production company Southern Star, maker of Blue Heelers, Police Rescue and Water Rats, is to be floated on the stockmarket. The A$134 million public float, underwritten by Bain & Co involves the issue of 43 million Southern Star shares at A$1.40 apiece, which comprises 14.65 million new shares and the vendor's sale of 28.4 million shares. Page 31. -- Australia's resources sector faces a dismal six months as pressure on commodity prices and a strong currency threaten to wipe out efficiency gains. A number of profit reports have come with sombre predictions about the direction of prices for the rest ofthe year. Page 31. -- ABN Amro Hoare Govett chairman Dr John Hewson has been appointed to chair multimedia company Network Entertainment as it prepares for a stockmarket float in early November. As a former division of Shomega, Network is raising about A$12 million and will be capitalised at A$30 million on listing. Page 33. -- Uncle Tobys managing director Peter McLoghlin said new Uncle Tobys products - Uncle Tobys Nut Feast and In-Cred-I-Bites - were being promoted to take advantage of the new demand for healthier foods. The company will benefit from the return of its Olympic stars Kieran Perkins and Samantha Riley, who are now available for more promotional work. Page 33. -- THE AGE Greenpeace is alarmed at the increasing production rate of PVC in Australia and believes the substance is so dangerously toxic that it should be banned. PVC is a fine white substance that manufacturers buy at $1100 a tonne to produce everyday items like gumboots, catheters, guttering and car trim. Page C1. -- The patent to two 'air' labels of Nike is coming to an end after 17 years. The air label has given Nike a 36 per cent share of the athletic shoe market and has sold more shoes in this area than any of its competitors since 1987. Page C1. -- Prime Minister John Howard's trip to the South Pacific has been overshadowed by the region's report that at least a half of its 16 members are suffering some form of economic crisis. The report claims that many of the South Pacific nation economies are runing large trade deficits and the Australian Government has recently cut $3.5 million worth of aid to this region. Page C2. -- Communications Minister Richard Alston yesterday said the Fairfax newspaper group FXJ. AX, whose three main papers are The Age, The Sydney Morning Herald and The Australian Financial Review could be split up and sold to different parties, possibly to Kerry Packer and Rupert Murdoch becoming its new owners. Page C3. -- Having suffered a downturn in advertising dollars from local services, real estate, motoring and employment, country newspapers are beginning to feel the pinch of financial constraint. When Australia's rural account was strong, these newspapers were healthy, and their readership is still there, but without crucial advertising dollars, the future for country papers will not improve. Page C3. -- Anaconda Nickel's A$900 million Murrin Murrin nickel project is under strong fire after scenes at the WA Supreme Court on Friday. In a complete turn around of the company's plan to seek orders for dismissal of action, Anaconda has now supported the decision to quit the action. Page C3 -- Reuters Sydney Newsroom 61-2 373-1800 6929 !GCAT THE DOMINION Front page - State houses sold for $21,000 - Prisoner faces assault charges - National's popularity dips after forestry sale Editorial - Alliance impotent by choice - David Lange column Business - CIL lifts profit 46pc to $19mil - Council to retain shares in Egmont - Lifecare lifts result Sport - Joubert the destroyer as bubble pricked - No reason for despondency, say greats NEW ZEALAND HERALD Front Page - Kiwi fights to get plane back in air - New Sydney job must wait for stranded passenger - Death faked by pyromaniac in Herald advt Editorial - Returning conquerors Business - South-East Asian economies head down Mexican path - Punters push Sky City shares close to peak - US women workers take home less in play packet - Most Lloyds investors accept $7.3b share offer Sport - The battle lost but the war won - Series win has yet to sink in - Professional fouls irk Hart 6930 !GCAT !GENV Two minor eruptions at Mt Ruapehu on Sunday hinted at a new round of volcanic activity, the Institute of Geological and Nuclear Sciences (IGNS) said on Monday. "Further minor eruptive activity is expected from Ruapehu and further larger events are a possibility," IGNS spokesman Brad Scott said. After some early evening grumblings, the central North Island volcano belched back to life about 11.30 p.m. on Sunday with ashfall forcing the closure of the snow-laden Turoa skifield. Scott said yesterday's activity was consistent with the current alert level. The level was downgraded recently after a decrease in eruptions and seismic activity. "Eruptive activity consistent with level 2 (continued minor eruptive activity) has occurred at Mt Ruapehu over the weekend. "There were two short lived periods of activity on Sunday evening. The latter activity caused minor ashfall over the Turoa skifield area," Scott said in a statement. The eruption plume trailed about 50km. "The institute will continue to monitor the activity at Ruapehu and advise... as the level of activity changes," he said. Turoa management said its skifield would be closed for at least. "It's not looking too pretty. It's black and grey," a spokesman said this morning. The mountain's other commercial skifield, Whakapapa, was not affected by last night's eruption and was likely to be open for skiing today, a spokeswoman said. -- Wellington newsroom 64 4 4734 746 6931 !C12 !CCAT !GCAT !GCRIM The chief executive of New Zealand budget carrier Kiwi International Airlines said on Monday it would be a "fatal blow" if the company lost a Brisbane court battle over a contract with Singapore's Region Air. Kiwi leases an A320 Airbus from Region Air but the plane is currently grounded in Brisbane over a contract dispute. Chief Executive Ewan Wilson said he was applying to the Superior Court of Queensland for an order to get Region Air to resume flights. "If we lose, it will be a fatal blow to Kiwi. If we win, we will bounce back immediately and we will fly the aeroplane," he told Radio New Zealand. Wilson said the dispute was over invoices from Region Air for pilot training and accommodation, on which Kiwi was seeking further documentary proof. Kiwi, in turn, was seeking to recover from Region Air costs incurred because of mechanical problems with the Airbus. It was not immediately possible to obtain comment from Singapore. Wilson said Kiwi would seek damages against Region Air if it continued to refuse to fly the plane even after a court order. Kiwi has paid for the aircraft and running costs to the end of September, together with deposits - a total of US$2.1 million, he said. Kiwi last week said it was making 90 of its 250 staff redundant in a restructuring forced by a series of setbacks including mechanical breakdowns and disruption from the eruption of Mount Ruapehu volcano earlier this year. It also trimmed weekly flights between New Zealand and Australia to 14 from 30. -- Wellington newsroom 64 4 473-4746 6932 !GCAT !GSPO Four tries from discarded international wing John Hopoate helped Manly to claim first place in the Australian Rugby League (ARL) standings as they completed their regular season matches with a resounding 48-10 defeat of lowly South Sydney on Sunday. Manly, coached by Australia boss Bob Fulton, lived up to their early season status as favourites by running in nine tries in all to end their campaign two points clear of fast-finishing Brisbane who secured second place with a 38-6 defeat of Auckland on Friday. North Sydney beat Gold Coast 38-8 on Sunday for third place while Sydney City managed to reverse a recent slump in form to beat Sydney Tigers 24-10 and grab fourth place. Cronulla secured fifth place with a 22-0 defeat of Newcastle on Saturday, with Canberra sixth after trouncing South Queensland 36-10 on Sunday. On Friday, St George eased past Western Reds 22-16 for seventh while Western Suburbs claimed eighth place by beating Illawarra 12-8. The top eight sides in the standings now go through to the ARL's complicated system of play-offs which begin next week. The top four have two chances of reaching the final while the bottom four play sudden-death matches. Manly now play Sydney City next Sunday while Brisbane take on North Sydney on Saturday. In the elimination finals, Cronulla play Western Suburbs on Friday and St George meet Canberra on Saturday. The winners of those matches go on to play the defeated teams from the play-offs among the top four sides. 6933 !GCAT !GPOL !GVOTE The radical right and their counterparts on the left fired the first formal shots in New Zealand's election campaign on Sunday in a poll that will give voters more diverse choices than ever before. Campaigning began as a new opinion poll by TV1 showed support for the ruling conservative National Party falling four points to 35 percent, its lowest level for six months. New Zealanders go to the polls on October 12 in their first election under a German-style mixed proportional system that has replaced the British-style, first-past-the-post system. The right-wing Association of Consumers and Taxpayers (ACT) was the first of more than 20 parties to formally launch its campaign with a platform of cutting government to the bone and eventually abolishing income tax. Despite heavy financial backing from big business, ACT has only made a moderate impact on the polls, with support in the TV1 poll registered at 4.6 percent. The big winner in the poll was Labour, up five points to 19 percent from a record low of 14 percent, while the economic nationalist New Zealand First was steady on 20 percent. According to the TV1 poll, if those trends held in the polling booths, National would win 47 seats, NZ First 26, Labour 25, the Alliance 15 and the Christian Coalition seven, giving the most likely grouping of NZ First, Labour and the Alliance a slight majority to rule. Parties need at least five percent support before they win seats in the 120-seat parliament. The poll showed support for the Alliance, a formal grouping of five parties, falling by one point to 12 percent, less than half that of earlier polls. Leader Jim Anderton opened the Alliance campaign in an Auckland movie theatre currently screening "Mission:Impossible". The packed theatre was roused by Pacific Island drummers and dancers in a multi-cultural theme, before Anderton was led in to the tune of the film "2001:A Space Odyssey". "We have to restore to New Zealanders trust in the political process and in their political leadership," he said. The Alliance will campaign to reverse New Zealand's radical economic reforms of the last 12 years, brought in under the National Party and earlier under the Labour Party. Anderton argues those parties broke faith with the electorate by introducing reforms without campaigning on them. He promised the Alliance will not coalesce with other parties unless there is a pre-election agreement, something others won't agree to and which may serve to keep the Alliance out of government. Polls show education and health concern New Zealanders most and Anderton promised to rescind user-pay programmes in favour of raising taxes for the wealthy and middle class. "Let them pay for their education through a progressive tax system after they get it, not have a heap of debt all through their lives while they are getting it for God's sake," he said. Financial markets have shown few pre-election jitters, and Sunday's poll has given some fresh comfort despite National's falling support. As well as ACT nearing the five percent threshold, National's other natural partner of government, the Christian Coalition, registered 5.4 percent support. 6934 !GCAT !GPOL !GVOTE Support for the ruling National Party fell to its lowest level in six months less than six weeks before a general election, a TV1 poll published on Sunday showed. Support for the conservative party fell four points to 35 percent, but rose by five points for the centre-left Labour Party to 19 percent. Backing for the economic nationalist New Zealand First was steady at 20 percent and the left-wing Alliance fell one point to 12 percent. The Christian Coalition registered 5.4 percent support, crossing the five percent threshold parties need to get representation in parliament under the new mixed proportional electoral system. The radical right-wing Association of Consumers and Taxpayers Party (ACT) was also close to the threshold with 4.6 percent. Both the ACT and the Christian Coalition are likely to be partners for the National Party. The election is scheduled for October 12. TV1 said that if the support was translated into seats, National would get 47, NZ First 26, Labour 25, the Alliance 15, and the Christian Coalition seven. TV1 said it appeared the government's recent privatisation of Forestry Cororation of New Zealand had undermined its support. Some 61 percent of those polled did not support the sale. However, Prime Minister Jim Bolger was the most preferred choice as prime minister, his support rising one point to 25 percent. Populist NZ First leader Winston Peters fell two to 19 percent, Alliance leader Jim Anderton gained two to 11 percent and Labour Party leader Helen Clark rose two points to seven percent. 6935 !GCAT NIHON KEIZAI SHIMBUN Shiseido Co Ltd plans to spend more than one billion yen to build one of the world's largest cosmetics plants in the United States. Target annual output is 15,000 tonnes in the year 2003. Shiseido hopes to sell its products in the United States, Europe and Asia. It also boost output at existing plants in the United States and France, aiming to triple its overseas production capacity in five years. ---- Marubeni Corp and Motorola Inc are to set up a joint venture in September for a telecommunication service using cable TV networks. Marubeni plans to expand the service nationwide, enrolling 100,000 households over the next five years. The company will be owned 66 percent by Marubeni, 30 percent by Motorola and four percent by Fuji Bank Ltd, which plans to invest 70 million yen. ---- Itochu Corp plans to license to Japanese game machine makers and other consumer electronics firms a California firm's software enabling Internet access over conventional TV sets. ---- Saison Information Systems Co plans to conduct an experiment in shopping through the Internet from September 1997, in cooperation with Seiyu Ltd, Seibu Department Stores Ltd and other Saison group affiliates. ---- 6936 !C13 !C41 !CCAT !GCAT !GPRO Rogue Japanese copper trader Yasuo Hamanaka emerged from hiding Sunday to reveal that for the past two months, he evaded the media and overseas authorities who wanted to question him simply by hiding out at his own home. Hamanaka, fired by Sumitomo Corp. for running up $1.8 billion in losses from unauthorised copper trading, was spotted by Reuters late Sunday afternoon casually shopping at his local supermarket. "I have been living in my home since leaving Sumitomo," Hamanaka said. He seemed to have put on weight from his enforced stay at home and his hair appeared greyer. He first came out of hiding three weeks ago, when he met this correspondent at a location he insisted should not be divulged. At that time he refused to say where he had been since his dismissal. Asked Sunday when he would give his side of the story of the world's biggest financial trading loss, Hamanaka replied:"I have nothing to say on that." He also declined to comment on whether he expected to face any legal action, either by Sumitomo or authorities, over his trading losses. British and U.S. authorities have said they want to question Hamanaka to see if he breached any of their trading rules in his transactions. Sumitomo and Japanese authorities have so far given no indication of whether they plan legal action against a man who ruled the world copper market for more than a decade with his huge buy and sell orders. Accompanied by his wife, Hamanaka walked up and down the aisles of the small supermarket about 300 yards from his home, buying groceries. Then he drove the short distance back to his two-storey house in a middle-class Tokyo suburb. When this reporter went to the house to interview Hamanaka further and to ask if he would agree to be photographed, his teenaged son answered the door and said his father was unavailable. "We have nothing to say," the boy said. Supermarket employees said they were unaware of Hamanaka's fame, but added that he had been a regular customer there for years. 6937 !GCAT !GDIP !GVIO Moslem rebel chieftain Nur Misuari arrived in Manila under heavy guard on Sunday to sign a historic peace pact with the government ending a 24-year revolt for Moslem self-rule in the southern Philippines. The leader of the insurgent Moro National Liberation Front (MNLF) is scheduled to sign the accord, fiercely opposed by many Christian Filipinos, with chief government negotiator Manuel Yan in a ceremony at the Malacanang presidential palace on Monday. Dozens of police and rebels threw a tight security cordon around Misuari and kept him away from mobs of journalists after he emerged from an Indonesian Air Force plane that flew him from Jakarta, where the peace accord was initialled on Friday. The special flight landed at a Philippine Air Force base in Manila. Minutes later a convoy of cars whisked away the guerrilla leader to the posh Manila Hotel where he was to stay. It was the first time in about a quarter of a century that the 55-year-old Misuari had set foot in Manila where as a student he took part in street protests in the late 1960s and early 1970s against U.S. involvement in the Vietnam war. He went underground after then president Ferdinand Marcos proclaimed martial law in September 1972. A month after Marcos declared the emergency, young MNLF guerrillas seized a state university in southern Marawi city signalling the start of a rebellion that was to claim more than 120,000 lives. Misuari gave no arrival statement. He was accompanied by Indonesian Foreign Minister Ali Alatas and other Islamic envoys who will witness the signing ceremony along with Philippine President Fidel Ramos. The peace accord calls for the setting up a rebel-led council in the Mindanao region to supervise development of 14 provinces followed by a plebiscite and regional autonomy three years later. Church bells will ring in Manila, government supporters will stage marches around the country and helicopters will shower confetti over the capital to celebrate the signing of the agreement. But in southern Zamboanga city, a bastion of Christian opposition to the deal, residents will stage a symbolic funeral march to dramatise their protest. 6938 !GCAT !GCRIM A man with a gun and two grenades shot and wounded two passengers on a Philippine ferry and escaped on a lifeboat with a woman hostage but surrendered after nine hours at sea, police said on Sunday. Before fleeing, the man had demanded 50,000 pesos ($1,925) but crew and passengers could produce only 24,000 pesos ($925), which the man took before leaving the ship on Saturday, police colonel Jovencio Condorra said. The 5,873-tonne ferry St Francis of Assisi followdd the raft for nine hours before 21-year-old Rolando Elauria surrendered on Sunday to the ship's captain, the coast guard said. The ferry was carrying 650 passengers to central Iloilo city when Elauria grabbed hostages while the ship was on the open sea. As the raft drifted towards islands where police were waiting, Elauria signalled to the ferry that he was giving up. The ferry took the man and his hostage back on board. Condorra said the man told Iloilo police he had been involved in another shooting incident earlier and was fleeing from the law when he boarded the ferry. Nervous that he was being followed, he shot and wounded two passengers then took seven others as hostage. He freed six of them before escaping on the life boat. "He could not get very far because the boat they gave him had only a pedal and no motor," Condorra said. 6939 !GCAT !GVIO A man with a shotgun and two grenades seized a passenger aboard a Philippine ferry and escaped with her on a life raft, but surrendered after drifting for nine hours at sea, the coast guard said on Sunday. Before fleeing, the man had demanded 50,000 pesos ($1,925) from the crew and passengers but they could produce only 24,000 pesos ($925), which the man took before leaving with his hostage on Saturday, the coast guard said. The ferry tailed the raft for nine hours before the hostage-taker, 21-year-old Rolando Elauria, surrendered on Sunday morning to the ship's captain, coast guard spokesman Commander Ernesto Caballero said. The ferry, the 5,873-tonne St Francis of Assisi, was carrying about 600 passengers, he said. Elauria initially grabbed seven hostages while the ferry was cruising in central Philippine waters but freed six of them and took only the woman with him on the raft. Two of the hostages were injured in the incident. As the rubber boat drifted towards islands where police were waiting, Elauria signalled to the ferry that he was giving up, Caballero said by telephone. The ferry sailed up to the raft and took the man and his hostage back on board. Police were preparing criminal charges against the man, Caballero said. He said he did not know if the man had any other motive besides wanting money. 6940 !C11 !C17 !C18 !C182 !C24 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Japanese drug maker Green Cross Corp plans to close two of its four domestic plants and reduce the number of its employees as part of its restructuring programme, a Japanese newspaper reported over the weekend. The company, which will have to pay compensation to people who were infected with HIV through its contaminated blood products, will also ask Sakura Bank Ltd for financial help for the restructuring, the Nihon Keizai Shimbun economic daily said on Saturday. A spokesmen for Green Cross was not immediately available for comment. The paper said Green Cross would close two of its four plants by 2000 and sell the land. It would also cut the number of its employees to 2,000 in three to four years from 2,400 currently, the paper said. 6941 !GCAT !GDIP Visiting British Foreign Secretary Malcolm Rifkind told Japanese Prime Minister Ryutaro Hashimoto there may be "difficulties" in the return of Hong Kong to China in 1997, a Japanese news agency reported on Sunday. "British Foreign Secretary Malcolm Rifkind told Japanese Prime Minister Ryutaro Hashimoto on Sunday that there may be difficulties in the reversion of Hong Kong to China next year, Foreign Ministry officials said," Kyodo News Service reported. "In a meeting with Hashimoto at the prime minister's official residence, Rifkind reportedly said he does not think China will intentionally cause confusion, but hitches in the transition cannot be ruled out because China does not understand how free economies work," Kyodo added. Rifkind arrived in Tokyo earlier on Sunday from the Sri Lankan capital Colombo as part of an Asian tour. He has also visited Pakistan and India and leaves for Mongolia on Wednesday on the last stop of the tour. British officials confirmed Rifkind briefed Hashimoto at the prime minister's request on progress on Hong Kong's return but made no mention of the comments reported by Kyodo. Kyodo said Hashimoto told Rifkind that Hong Kong should act as a "display window" helping outsiders to understand China. 6942 !GCAT !GDIP More than 250 Chinese citizens have called on Beijing's top military leaders to take tough action in a dispute with Tokyo over a group of islands in the East China Sea, a petition organiser said on Sunday. Beijing should send Chinese forces to the disputed Diaoyu Islands, known in Japan as the Senkakus, to destroy a makeshift lighthouse built there by a right-wing Japanese group in July, organiser Tong Zeng said in a telephone interview. "We are calling for troops to be sent to get rid of the Japanese lighthouse," Tong said. "Japan has violated our territorial integrity...we are very angry." The rare petition was addressed to Jiang Zemin, Chinese president and chairman of the Central State Military Commission, and to other top military leaders. It had been signed by 257 ordinary citizens, Tong said. Petitioners included officials, retired servicemen, workers and students, he said. Tong is a leading anti-Japanese campaigner in China whose high-profile approach led authorities to confiscate his passport and order him to leave Beijing temporarily during last year's 50th anniversary of the Japanese surrender. Beijing and its arch-rival, Chinese Nationalist-ruled Taipei, both claim the Diaoyu Islands, which are located about 300 km (190 miles) west of Okinawa and 200 km (125 miles) east of Taiwan. Tokyo says the uninhabited group has always been part of Japan. The dispute over the islands' ownership flared in July after the Nihon Seinen-sha (Japan Youth Federation) moved to buttress Japan's claims by building an aluminium lighthouse on one of them, prompting howls of protest from China's state media. "The Chinese side must take strong and concrete action to protect our nation's territorial integrity," the Chinese petitioners wrote in their appeal to Beijing. The military should immediately remove the five-metre (16-ft) Japanese lighthouse, or at least should send warships to protect any Taiwanese or Hong Kong groups who attempted to destroy it, they said. While China's Communist Party-controlled media quickly condemns any perceived signs of resurgent Japanese militarism, Beijing has in the past suppressed unofficial protests against Tokyo and campaigns for Japanese compensation for war victims. Petitions to parliament judged hostile to the government have often prompted the detention of signatories, but Tong said the Diaoyu petition was a private move by ordinary people that would be welcomed by the Beijing leadership. "There is nothing wrong with this action, this is to protect China," he said. "I think the government could not but welcome it." 6943 !GCAT !GCRIM !GPOL A Chinese dissident who spent years in jail after the 1989 pro-democracy demonstrations in Beijing has sent a rare open letter to parliament calling for legislation to hold back a rising tide of official corruption. Former magazine editor and historian Bao Zunxin said he had written to the National People's Congress, or parliament, last week to push for tougher anti-corruption laws. Legislation was needed to force more openness and fuller disclosure of officials' private assets and existing laws were inadequate to cope with endemic graft, the 58-year-old dissident said in a telephone interview. "Without an end to corruption, there will not be a day of peace in our country," Bao wrote in his letter, a copy of which was faxed to news agencies by the Information Centre of Human Rights and Democratic Movement in China. "Corruption has seeped into every level of the government, and requiring only officials above the county level to declare their property is far from enough," he wrote. Petitions to parliament, always a risky venture for China's tiny band of dissidents, have in the past been either greeted with stony silence or followed by the detention of signatories. Bao, who spent more than three years in prison for his role in the 1989 Tiananmen Square demonstrations that were bloodily crushed by the army, said he could not guess what the reaction to his letter would be but it was impossible to be optimistic. Public security officials took Bao from his Beijing home in July for a week-long "tour" to Qingdao in eastern China after discovering he had granted an interview to a French reporter, he said. Some dissidents see demands for action against corruption as a rallying call that can strike a chord among a populace bitter at the wealth and privilege enjoyed by some senior officials. Anger at leaders and bureaucrats who use their power to amass wealth in China's new market economy helped send hundreds of thousands of Beijing residents into the streets in support of the 1989 student-led demonstrations in Tiananmen Square. Many Chinese say graft has since spread even more as economic reforms continue to weaken social controls and multiply profit-making opportunities for those with political clout. Bao's open letter follows a July appeal to parliament from leading dissident Liu Xiaobo for speedy legislation to curb corruption in the state media and to loosen the ruling Communist Party's monopoly on news. Beijing has repeatedly declared war on graft, calling it a scourge that threatens the very basis of communist rule, but many Chinese say the campaigns have had only limited success. Short-term actions such as the on-going "Strike Hard" anti-crime campaign were not enough to clean up China's government, Bao wrote in his letter to parliament. "Corruption, especially systemic and all-pervasive corruption as in China, cannot be stopped with a short period of "Striking Hard'," he wrote. "An effective system of (property) declaration should be made available to the public through legislation, and should have legal authority, openness, transparency and supervisory mechanism," he wrote. 6944 !C12 !C41 !C411 !CCAT !GCAT !GCRIM !M14 !M142 !MCAT Rogue Japanese copper trader Yasuo Hamanaka emerged from hiding on Sunday to reveal that for the past two months he evaded the media and overseas authorities who wanted to question him simply by hiding out at his own home. Hamanaka, fired two months ago by Sumitomo Corp. for running up $1.8 billion in losses from unauthorised copper trading, was spotted by this Reuter correspondent late on Sunday afternoon casually shopping at his local supermarket. "I have been living in my home since leaving Sumitomo," Hamanaka said. He seemed to have put on weight from his enforced stay at home and his hair appeared greyer. He first came out of hiding three weeks ago, when he met me at a location he insisted should not be divulged. At that time he refused to say where he had been since his dismissal. Asked on Sunday when he would give his side of the story of the world's biggest financial trading loss, Hamanaka replied:"I have nothing to say on that." He also declined comment on whether he expected to face any legal action, either by Sumitomo or authorities, over his trading losses. British and United States authorities have said they want to question Hamanaka to see if he breached any of their trading rules in his transactions. Sumitomo and Japanese authorities have so far given no indication of whether they plan legal action against a man who ruled the world copper market for more than a decade with his huge buy and sell orders. Accompanied by his wife, Hamanaka walked up and down the aisles of the small supermarket about 300 yards (metres) from his home, buying groceries. Then he drove the short distance back to his two-storey house in a middle-class outer Tokyo suburb. When I went to the house to interview the trader further and to ask if I could photograph him, Hamanaka's teenaged son answered the door and said his father was unavailable. "We have nothing to say," the boy said. Supermarket employees said they were unaware of Hamanaka's fame, but added he had been a regular customer there for years. 6945 !E51 !E512 !ECAT !GCAT !GDIP British Foreign Secretary Malcolm Rifkind, on an Asian tour intended to boost British trade, arrived two hours late in Japan on Sunday after mid-air re- routing forced his plane to stop and refuel in Hong Kong. Rifkind was met by Prime Minister Ryutaro Hashimoto who greeted him in gum (wellington) boots and overalls, the attire he donned throughout the day for Japan's annual disaster drills. The drills, held on the anniversary of the 1923 Great Kanto Earthquake which killed 100,000 people in Tokyo, involved 13 million people and are to prepare for any future catastrophe. Rifkind's Royal Air Force VC-10 was scheduled to fly direct to Tokyo from the Sri Lankan capital of Colombo with only a single fuelling stop in Bangkok. But after taking off from Bangkok, air traffic controllers in the region routed the plane on a path that might have left the VC-10 low on fuel if it had continued straight on to Tokyo. "There was never any suggestion of problems and the fuelling stop in Hong Kong was simply a prudent measure by the pilot," Rifkind's press spokesaman told Reuters. The foreign secretary is on an Asian visit that has taken him so far to Pakistan, India and Sri Lanka. On Wednesday he leaves for his final stop in Mongolia. "The meeting was extremely friendly," Rifkind's spokesman said of the talks with Hashimoto. Britain has become a key staging nation for Japanese business in Europe and there are growing trade and political links between the two countries. British officials said Hashimoto asked Rifkind for an update on progress in Hong Kong's 1997 transfer to China, indicating the importance Japan attached to a smooth transition. The only small cloud on the horizon in British-Japan relations are demands for compensation by former British prisoners of war who say Japan has not done enough to atone for their treatment in World War two. British officials said Rifkind did not raise the POW issue with Hashimoto but would bring the matter up in his talks with other Japanese officials. A group representing prisoners of war and civilian internees are pursuing legal action in Tokyo demanding compensation from the government for their ordeal and lobbied Rifkind last month to press their long-running case. Although Britain believes the question of compensation was legally settled by the San Francisco peace treaty of 1951, Rifkind was left in no doubt that passions are still running high among prison camp survivors. "It's in those sorts of terms that he'll mention the issue," a British official told reporters before Rifkind left London. More than 12,000 Britons died from disease and starvation in Japanese war camps or in work gangs. Former Japanese Prime Minister Tomiichi Murayama apologised last August for his country's actions during the war, but British veterans had been hoping for an unequivocal apology on behalf of the entire nation to mark the 50th anniversary of World War Two. 6946 !GCAT !GCRIM !GPOL A leading Indonesian writer who heads the country's independent election monitoring committee (KIPP) said on Sunday he had been summoned by authorities for questioning as a witness in a subversion case. Gunawan Mohamad, founder and former editor-in-chief of the banned Tempo magazine, said he had been summoned for questioning on Tuesday by officials in the Attorney-General's department. "I am ready to answer the summons," Gunawan told Reuters. "But because I must give a speech at a seminar of the American Publishers Association in Puncak (in West Java) I have asked that it be postponed, its up to them when," he said. Gunawan said he was called as a witness in the case of Budiman Sudjatmiko, leader of the small left-wing People's Democratic Party (PRD), and his colleagues. He did not have further details. The government blames the PRD for inciting the worst riots in the capital Jakarta for more than 20 years on July 27. The official National Human Rights Commission said on Saturday at least five people were killed and 74 were missing after the riots which began when police seized the office of the Indonesian Democratic Party (PDI). The military had said four had died. Loyalists supporters of PDI leader Megawati Sukarnoputri had been occupying the building since she was removed from office at a government-backed rebel congress in June. Sudjatmiko was part of a group of 11 PRD members who were detained in mid-August (corrects to make clear that Megawati is not in detention) and are who are now facing subversion charges which carry the maximum penalty of death. KIPP, launched in March by a who's who of government critics, was set-up to monitor Indonesia's tightly-controlled general election due around June next year in which only the ruling Golkar, Christian-nationalist PDI and Moslem-orientated United Development Party are allowed to contest. Gunawan said he knew Sudjatmiko as she sat on KIPP's 11-member presidium which he chaired. Gunawan's summons bring the number of KIPP office bearers called by authorities in the wake of the riots to at least eight. 6947 !GCAT !GREL Chinese authorities have called for a clean-out of Buddhist monasteries in the Himalayan region of Tibet, saying many of the monks were supporters of the exiled god-king Dalai Lama. The Tibet Daily edition of August 23, available in Beijing on Sunday, attacked the Dalai Lama's efforts to achieve Tibetan autonomy, saying he was a puppet of anti-China forces and that it was clear he had no intention of changing. "Many unsavoury people have wormed their way into the temples and monasteries, ignoring the law and religious discipline, inciting the young monks to engage in activities to split the motherland," the paper said. It called for intensive education work in the monasteries to counter the influence of the Dalai Lama, and warned that protecting freedom of worship in the intensely Buddhist region depended on a solution to the problem. Tibet has in recent years been rocked by periodic unrest, with many monks and nuns jailed for rioting. Many Tibetans still revere the Dalai Lama, who fled to India in 1959 after an abortive uprising against Beijing. 6948 !GCAT A Hong Kong charity group plans to stage a 2,800 km (1,750 mile) sponsored walk from the British colony of Hong Kong to China's Great Wall near Beijing next year to raise money for schools in poor Chinese villages. The China-backed walk was announced in Hong Kong on Sunday when 2,800 people, all dressed in red and one for every kilometre of the walk, unfurled colourful umbrellas in the shape of a giant foot in Hong Kong's Victoria Park. The "Big Foot Campaign" is organised by the Sowers Action charity to promote rural education. The Beijing Walk aims to raise HK$20 million ($2.6 million), organisers said. China's second most senior official in Hong Kong, Zhang Junsheng, inaugurated the show by unfurling the first umbrella. Supporters include senior Chinese officials as well as personalities from leading Hong Kong businesses and institions. China resumes sovereignty over Hong Kong next July 1 after a century and a half of British colonial rule. The Beijing Walk is timed to finish shortly before the handover and the climax will form part of pre-handover celebrations. Some 200 participants are expected to walk the first section from Hong Kong to Guangzhou in southern China, while 19 people have so far registered for the entire hike to the Great Wall. 6949 !GCAT !GCRIM !GPOL South Korean prosecutors are preparing to challenge court sentences imposed during the "trial of the century", including a 22-1/2 year jail sentence to former president Roh Tae-woo, Yonhap televsion said on Sunday. Except for the death sentence given to ex-president Chun Doo Hwan, prosecutors were not satisfied with lighter-than-expected court judgements given to Roh and to 13 military aides of the two former disgraced presidents, the television said. Prosecutors were not available for comment. The Seoul District Criminal Court last Monday sentenced Chun a death, as prosecutors had requested, on charges of leading a 1979 military coup and then ordering troops to crush democratic resistance in the southern city of Kwangju in a 1980 massacre. Despite a similar charge for Roh, the court gave him a more lenient sentence because of his role in helping South Korea out of three decades of authoritarian rule towards democracy. Prosecutors had demanded life in prison for Roh. Chun and Roh also were convicted of amassing vast fortunes by soliciting bribes from business tycoons. Thirteen of the former presidents' ex-military colleagues were handed jail sentences of four to 10 years, sharply lower than the 10 years to life in jail that prosecutors had demanded. All nine business tycoons got jail sentences for bribing Roh but the judgements on four of them, including the Samsung Group chairman, were suspended. On Saturday, Chun appealed against the court judgments, ending days of speculation about whether he was prepared to go meekly to the gallows. Roh also appealed on Saturday. Their presidential aides, ex-generals and business leaders who received jail terms also followed suit. 6950 !GCAT !GCRIM !GVIO A South Korean captain's decision to fire six crew prompted a high seas mutiny on a rusty fishing vessel in which 11 people were killed in the South Pacific, a maritime police official said on Sunday. The official was speaking after the six, all mainland Chinese of Korean descent, had been questioned over the deaths of the captain, Choi Ki-taek, six other South Koreans, one Chinese and three Indonesians. The tuna fishing vessel, the Honduran-registered Pescamar, was found last Sunday by Japanese maritime police drifting without fuel south of Japan and towed to the South Korean port of Pusan. Sa Chan-soo, head of the maritime police investigation team, told reporters the mutineers plotted to kill all their fellow crew members and escape to Japan or South Korea. Police found two crude rafts fashioned from wooden planks on board the vessel. The rafts were prepared for the escape bid. "Being obsessed with personal bankruptcy by dismissal...the Chinese committed the murder to take over the vessel," Sa said. Sa contradicted media reports that some crew members perished in the vessel's deep freeze, adding that the victims were dumped overboard. Four men were locked in the deep freeze for four days after they refused to participate in the mutiny, but they survived because the refrigerating system was out of order. Along with the six alleged mutineers, one South Korean navigator and six Indonesians survived the tragedy. Sa said police are still questioning the Indonesians who gave conflicting accounts about throwing a young South Korean seaman overboard alive. The Chinese said they forced the Indonesians to commit the deed, but they strongly denied this, he said. The incident has focused attention on the cruel treatment meted out by South Korean employers to other Asian workers. All contact with the 250-ton Pescamar was lost on August 3 after the captain radioed to say he was heading for the South Pacific island of Samoa to drop off the Chinese crewmembers who refused to work in protest against harsh conditions. Yonhap said police were expected to send the case to state prosecutors on Wednesday. The six Chinese have not yet been formally charged. 6951 !GCAT !GDIS !GENV Rescuers toiling in mud and debris have found 23 bodies of victims of a huge landslide that swamped a remote aborigine village in northern Malaysia, officials said on Sunday. Nineteen people were still missing from the disaster that struck the village of Pos Dipang in Perak state on Thursday. Rescue work was slow because the deluge of mud and a swollen river hampered the use of heavy equipment. Heavy rain and floods set off a torrent of mud down a hill, sweeping at least 20 houses into the Dipang river. About 200 searchers have sifted through mud strewn with huge logs, remnants of wooden houses and other debris at Kampung Sahom, another village about five km (three miles) downstream, where the wrecked houses were swept by raging river currents. At least 30 other houses in the village of some 700 tribespeople were damaged. A 10-member investigation team travelled up the Dipang river on Sunday to probe the cause of the disaster, the national Bernama news agency reported. Most of the inhabitants of Pos Dipang are from the Orang Asli Semai tribe, the largest of Malaysia's 18 aborigine groups. Pos Dipang village was a typical aborigine settlement, built in a remote location on a river bank. It has no treated water, no phone lines and is accessible only by a narrow dirt road. The original settlers of Malaysia lead relatively primitive lives, clustered in villages or government settlements. Some still live off the jungle, while others have entered the mainstream of Malaysia's economy. An aborigine group has called on the government to study the safety of Orang Asli settlements on river banks, Bernama reported. "The study should also include the relocation of settlements considered unsafe to safer sites, but the residents' livelihood should not be affected," Peninsular Malaysia Orang Asli Association president Majid Sohot was quoted by Bernama as saying. 6952 !GCAT !GVIO A civil war that has killed 125,000 people is expected to formally end on Monday when Manila signs a peace pact with the Moro National Liberation Front (MNLF), spearhead of a 24-year revolt for Moslem self-rule in the southern Philippines. The government has spent 73 billion pesos ($2.8 billion), or 40 percent of its total national budget, in fighting the rebels. Sixty-one percent of its ground troops, more than 40 percent of its artillery and 50 percent of its armour are deployed in the southern Mindanao region. Here is a chronology of key events in the rebellion: 1972 September - Then president Ferdinand Marcos declares martial law. He orders all civilians disarmed, fuelling long simmering anger among Moslems, who accuse Manila of treating them like second-class citizens and of tolerating military abuses. 1972 October - Young MNLF guerrillas seize Mindanao State University in Marawi city, signalling the start of the rebellion. 1974 February - Rebel stronghold of Jolo is burned down in fighting. Hundreds of people, mostly civilians, are believed killed in one of fiercest clashes of the war. 1976 December - Government and MNLF panel sign peace agreement in Tripoli, Libya, calling for autonomy for 14 provinces after MNLF renounces goal of an independent Moslem state. The accord is brokered by the Organisation of the Islamic Conference (OIC). 1979 July - Marcos sets up two semi-autonomous regions covering 10 provinces. MNLF refuses to join, saying the autonomy is a sham. 1986 September - Seven months after ousting Marcos in a "people power" revolt, new president Corazon Aquino flies to Jolo and meets Misuari. Both sides sign ceasefire accord. 1988 May - Talks between the Aquino government and the MNLF collapse. Rebels accuse Aquino of offering paper autonomy. 1989 August - Aquino, hoping to win over Moslem moderates, creates new semi-autonomous region covering four provinces. MNLF again refuses to participate. 1993 October - First round of talks between President Fidel Ramos government and MNLF are held in Jakarta, Indonesia. 1995 April - Breakaway Moslem guerrillas, including extremist Abu Sayyaf group, torch Christian town of Ipil and kill more than 50 people, mostly unarmed civilians. Officials stress urgency of peace settlement to curb growth of Islamic extremism. 1996 June - Government and MNLF announce interim peace deal, sparking widespread protests in Christian-dominated cities. 1996 August - Peace agreement is initialled in Jakarta, Indonesia. 6953 !GCAT !GPOL !GVIO China and other Asian governments use what they claim are traditional "Asian values" as a pretext to justify torture, summary execution and widespread repression, human rights activists said on Sunday. These governments argue that Western standards cannot be applied in their countries, where traditional values mean the collective good often outweighs individual rights. But delegates to an Amnesty International conference on China dimissed this as fraudulent and a slur on the region's rich ethnic and religious diversity. "It is sacrilegious to impugn Asian culture by saying somehow torture can be legitimised by Asian culture," Ross Daniels, an Amnesty International executive committee member, told Reuters. He said there was room for legitimate disagreement over the role of genuine Asian values, but none at all over the kind of gross abuses prevalent in China and other nations in the region. "We're talking about people having electrodes planted on their genitalia. We are talking about people being put in forced labour camps, forced re-education camps. We are talking about people being executed without a fair trial," Daniels said. "There is a wonderful, legitimate debate to be had about culture and values -- but don't use that to justify barbaric torture practices," the veteran Australian rights activist said. Somchai Homlaor, secretary-general of Thai-based Forum Asia, said the "Asian values" argument was first developed in Singapore and Malaysia but had since spread to other nations, including China. One view these nations sometimes expressed was that economic progress had to take priority and would eventually provide a more lasting degree of individual security. However, Somchai said that the region's rapid economic growth had in some instances produced worse abuses. "The economic situation in China has improved but the human rights situation is worse," he said. "In Indonesia, economic growth is very fast, but what happened there last month? The situation is getting worse," he said, referring to Jakarta's crackdown on followers of opposition leader Megawati Sukarnoputri. The two-day Manila conference, which ended on Sunday, was marred by the Philippine government's decision to deny visas to two Tibetan delegates who had hoped to travel here from India. Visas were also denied to two Pakistani delegates, but no reason was given. Somchai said the Philippines and other regional governments often bowed to pressure from China, partly because of their close business ties. The Manila conference was one of a series being held to maintain pressure on China. Part of that pressure will involve contacts with business groups in the hope that they could also bring their influence to bear. Daniels said the goal was not to organise boycotts or press for trade sanctions but to let China know that "people do not feel good about the fact they are buying goods made on the back of slave labour". 6954 !E21 !E212 !ECAT !GCAT !GDIP A Burmese minister has urged Tokyo to release a multi-billion yen loan suspended after the bloody suppression of Burma's democracy movement, but Japanese officials said curbs on lending were still in force. Planning and development minister Brigadier General David Abel called on Japan to restart support for the upgrading of Rangoon's airport that was suspended in 1988 after the military bloodily crushed a pro-democracy uprising. Speaking after a conference on regional cooperation held in China's southwestern Kunming city, Abel told reporters Japan's Overseas Economic Cooperation Fund (OECF) had itself proposed restarting the loan, worth over 20 billion yen ($185 million). "We have signed an agreement with the OECF for them to continue the loan," Abel said on Saturday. "They proposed it, so they should agree it." Some Japanese officials have long hoped to step up financial assistance to Burma, one of southeast Asia's poorest nations, but OECF officials said on Saturday that curbs on lending to the nation's ruling military junta remained in force. "This (loan) was stopped due to the political situation in Burma in 1988," said Kenzi Yoshida of the OECF's operations department. "The situation remains the same, it remains suspended," Yoshida said, adding that under government guidelines the state-backed fund had banned all new loans to Rangoon. Differences of opinion over how to deal with Burma formed an unspoken backdrop to the Kunming meeting of ministers from the Mekong River region, which ended on Friday. Ministers from six nations -- Burma, China, Cambodia, Laos, Thailand and Vietnam -- attended the conference but the meeting was backed by Asian Development Bank, which is funded and managed partly by western nations. The leader of Burma's democratic opposition, Aung San Suu Kyi, is spearheading a campaign for sanctions to heap pressure on the ruling State Law and Order Restoration Council (SLORC) -- raising pressures in the west for economic action against the military rulers. Western anger at the SLORC was fuelled in May when it detained more than 260 members of Suu Kyi's National League for Democracy (NLD) and in June following the death in a Rangoon jail of Danish honorary consul James Nichols. A number of major Western firms have in recent months cut or scaled back investment in Burma following intense lobbying by activists protesting against its human rights record. Burma's neighbours in the seven-country Association of Southeast Asian Nations have rejected calls for sanctions, favouring instead a policy of "constructive engagement" toward Rangoon. Japan had last year considered resuming yen loans to Burma following the release of Nobel Peace prize Laureate Suu Kyi from almost six years of house arrest and suggestions that Rangoon would begin paying its debt arrears, Yoshida said. Such ideas were shelved when suppression of the democracy movement continued and the arrears were not paid, he said. "Both things have to be resolved," he said, adding Japan remained involved in only a few small-scale projects in Burma's electricity generation and transmission sectors. 6955 !C12 !CCAT !GCAT !GCRIM Hong Kong customs agents swooped on a Chinese ship on Sunday and made a record seizure of obscene video compact discs, a customs spokesman said. The cache of 30,000 pornograpic discs worth more than HK$3.0 million was found aboard the Yuet Hong 015, intercepted as it was steaming out of Hong Kong waters. Officers found the VCDs in a secret compartment along with unmanifested audio appliances in the cargo hold. The Customs Department said the master of the ship and three crew would be charged with exporting unmanifested cargo and the possession of obscene articles for the purpose of publication. The vessel was now under guard at a berth in Hong Kong's Island's Causeway Bay harbour. 6956 !GCAT !GDIP !GPOL The contest for power in Hong Kong heated up at the weekend as the pro-China lobby cast a top judge into the race as the candidate to lead the territory after sovereignty reverts from Britain to China in 1997. Controversial Chief Justice Sir Ti Liang Yang re-emerged as a rival to existing favourites after influential pro-Beijing publisher Xu Shimin said he would nominate him and that the judge was keen to take up the challenge. Hong Kong, the last significant outpost of the British empire, reverts to China on July 1, ending a century and a half of colonial rule. China is setting up a 400-member panel called the Selection Committee, which will nominate the first post-colonial governor, to be known as the Chief Executive, and appoint a provisional legislature to replace the present elected Legislative Council. Nominations in the month-long process to create the committee close in two weeks' time, and almost 20,000 nomination forms have been requested and issued. China has ruled out a universal democratic vote by Hong Kong's people to pick their post-handover political leaders. The committee is expected to pick the chief executive around November. Yang's return to the contest comes as a surprise after he faded from the picture last year in a row about his remarks on human rights. Lawyers and pro-democracy politicians attacked him last November after he said the Bill of Rights, which was introduced in Hong Kong by the colonial administration and which China plans to dilute next year, had sown chaos in the judiciary. The 67-year-old China-born lawyer left his home to study law in London after the Communists took power. He later settled in Hong Kong, where he has worked for 30 years in the judiciary. A poll last week showed the public's hot favourite for post-colonial leader is Anson Chan, the colony's Chief Secretary and deputy to British-appointed Governor Chris Patten. She scored a stunning 60.1 percent of respondents' support. Runner-up in the poll was shipping magnate Tung Chee-hwa with 10.4 percent, and the leader of the biggest political party, the Democratic Party's Martin Lee, came third with 10 percent. But China has kept Lee and his Democrats out of the handover stakes and he has scant chance of being nominated. Chan is also unlikely to be accepted by the committee because she is closely identified with Britain. Last week a top Chinese official attacked Britain's chief diplomat in Hong Kong for touting London's favoured candidate -- presumed to be Chan. The poll showed Yang would come into the picture if neither Chan nor Lee were candidates. In that case Yang would get 9.8 percent, but Tung would rise to 21.6 percent. However, the Selection Commitee is what will count, not public opinion, and China has insisted the nomination list remain secret, arousing suspicions of foul play. Xu said Yang was happy to be proposed by him and that the judge's independence was a strong factor. "A judge has no business connections, and there are many against Mr Tung because of his business background," Xu said. Tsang Yok-sing, a senior member of the panel overseeing the entire handover process for China, said Yang was "unbiased and neutral". Political analyst Chris Yeung said the latest move showed Beijing seemed undecided who it wanted in charge in Hong Kong. "Sir Ti Liang, a judge not known for his business links, might not be the perfect choice, but he might yet win out as a compromise figure," Yeung wrote in the South China Morning Post. The chief justice was out of town on Sunday and unavailable to comment. 6957 !GCAT !GVIO Khmer Rouge radio on Sunday denied a report that guerrillas of the radical left-wing organisation had executed British mine disposal expert Christopher Howes. The clandestine radio, which is controlled by hardliners in the secretive movement, said the Khmer Rouge "was never involved in this story" and rejected reports that the guerrillas had killed any foreigner. Howes, of the Mines Advisory Group (MAG), and his interpreter Houn Hourth were abducted in the northwest province of Siem Reap last March. They were believed to have been taken to Anlong Veng base commanded by Khmer Rouge hardliner Ta Mok near Thailand. The Bangkok Post on Friday quoted a Khmer Rouge officer as saying Howes had been executed on Thursday in Anlong Veng. The officer, loyal to Khmer Rouge leader Pol Pot and Ta Mok, gave no clear reason for the alleged murder saying only that it was linked to a rebellion on Wednesday by dissidents in a Pol Pot camp. Military and government officials said on Saturday they had no evidence to confirm the report, while a MAG official said they were currently treating it as an unconfirmed report. Troops loyal to Ieng Sary, foreign minister in Pol Pot's brutal 1975-79 Khmer Rouge "killing fields" rule, have broken with the Pol Pot's hardliners and opened peace negotiations with the government. Khmer Rouge radio, which remains under the control of Pol Pot and Ta Mok loyalists, signalled the rift on August 8 when it accused Ieng Sary of embezzlement and ordered his execution. The Khmer Rouge was included in Cambodia's U.N.-brokered peace pact of 1991 but reneged on the deal and has fought the government that emerged from general elections in 1993. The rebels have since abducted at least seven Westerners and are known to have killed six of them. 6958 !GCAT !GPOL !GVIO Church bells will peal when the Philippines signs a pact with Moslem rebels on Monday ending a war that has killed more than 120,000 people, but analysts say economic growth will decide if it will bring real peace. Government supporters will stage marches around the country and helicopters will shower Manila with confetti in official rejoicing when rebel chief Nur Misuari signs the accord signifying his loyalty to a government he once fought to secede from. Completed over fierce Christian opposition, the agreement formally ends a 24-year revolt for Moslem self-rule on the main southern island of Mindanao and clears the way for the development of a poor region that is home to the country's five million Moslem minority. Government negotiator Manuel Yan will co-sign the agreement in a ceremony at the Malacanang presidential palace to be witnessed by President Fidel Ramos, Islamic envoys and other diplomats. But with Mindanao Christians bristling and other Moslem rebel factions left out of the deal, the accord could stir new unrest, some analysts said. "There are so many obstacles, so many landmines, so many people opposed to it that it can be sabotaged and torpedoed," political analyst Teodoro Benigno said. "What will make the agreement succeed is the speed and scope of incoming investments. Without the investments it will blow up." Failure by Manila to deliver on its promise to turn Mindanao into a growth area could boost the ranks of other guerrilla groups in the region fighting for an Islamic state, other analysts said. "The problem is how to succeed in a short time, and that means bread and butter issues," said Moslem lawyer Macapanton Abbas. "Everybody will expect to get a job but what if there is none, what if bureaucracy delays the release of funds? Then there will be disenchantment and that is the danger," he said. Christians oppose the accord because they fear it will lead to Moslem rule. Moslems regard Mindanao as their ancestral homeland although they are now outnumbered 3-to-1 by Christian settlers. While churches in Manila will ring their bells on Monday to celebrate the accord, Christian residents will hold a symbolic funeral march in Zamboanga city in a show of protest. The deal calls for the setting up of a Southern Philippines Council for Peace and Development (SPCPD) headed by Misuari to supervise development in 14 provinces, followed three years later by a plebiscite and regional autonomy. It also provides for integration into the armed forces and police of 7,500 of the estimated 16,000 guerrillas of Misuari's Moro National Liberation Front (MNLF). Livelihood programmes are to be launched for other rebels who cannot be absorbed into the army so they are not tempted to go back to the hills. "The transition will not be very clean. There will not be instant peace after the signing in the same way that you make instant coffee," University of the Philippines political science professor Alex Magno told Reuters. But while there will be small bands of adventurers who will try to undermine the accord, Magno said he believed they would become marginalised once economic development took hold. "The signing ceremony...is an important signal for business which is looking at opportunities in Mindanao," the Philippines' front door to a future southeast Asian common market, he said. Development "is the real war that Ramos must win, the economic war," Magno added. 6959 !GCAT !GPOL !GVIO A report by Indonesia's official human rights body saying five people died in riots in Jakarta in July and 74 were missing left many questions unanswered, human rights activists said on Sunday. The unrest, the worst in the capital in more than two decades, broke out after police raided the headquarters of the Indonesian Democratic Party (PDI) which was occupied by supporters of ousted party leader Megawati Sukarnoputri, daughter of Indonesia's late founding president Sukarno. The two-page preliminary report of the National Commission for Human Rights, released on Saturday night, added one to the death toll reported by the Indonesian military and said 149 were injured, including security force members, in the riots on July 27. "There is actually nothing new except that the commission added one more confirmed death. Things are still very unclear," said Kwik Gian Gie, a PDI member. "The commission's report is more or less the same as PDI data with so many missing, (but) it is impossible up until now to confirm if those missing are dead or not," Kwik told Reuters. The commission named the dead men as Uju bin Asep, 31, Asmayadi Soleh, 19, Suganda Siagian, 21, Slamet, 52, and Sariwan, 40, but did not give details of how they died. "We did not focus our investigation on when, how and why they died, went missing or were injured. We mainly relied on documented data from the hospitals," commission member Soegiri said. Commission secretary-general Bahruddin Lopa told a news conference that those missing could not be assumed dead as they could be hiding out of fear, resting or just staying out of public view. Lopa said information on those missing was incomplete and contradictory. "This information needs to be checked and checked again to see if they are indeed lost," he added. "We hope this brief statement will lessen the atmosphere of uncertainty and speculation," commission deputy chariman Marzuki Darusman said, adding the commission would provide a full report on the riots in the near future. Sidney Jones, executive director of the New York-based Human Rights Watch/Asia, told Reuters she was surprised that the commission went public with such a high number of missing. "I think it was very courageous of the commission to come out with that figure because that it still makes the figure of only five dead questionable," Jones said. "With 74 people that even the commission regards as having disappeared, the potential for many more deaths is still very much alive," she said. Human Rights Watch/Asia and the Washington-based Robert F. Kennedy Memorial Centre for Human Rights condemned the Indonesian government for its crackdown after the riots. President Suharto blamed the riots on the small left-wing People's Democratic Party (PRD) whose leaders were rounded up and branded Communists. They face subversion charges which carry a maximum penalty of death. The PRD members are part of the more than 250 people detained after the riots. About 130 are still in detention awaiting trial. The PDI's Megawati was replaced as party leader in June by deputy parliamentary speaker Surjadi at a government-backed congress in Medan, North Sumatra. 6960 !GCAT !GODD The Islamic government of Malaysia's Kelantan state has defended its recent ban on the excessive use of lipstick by women, saying that such practices were a prelude to illicit sex. "The early move by the (UMNO) leadership to stop money politics is similar to the ban on excessive use of lipstick which is an early step towards fighting illicit sex," Kelantan chief minister Nik Aziz Nik Mat was quoted on Sunday by the national Bernama news agency as saying. Nik Aziz, who was speaking on Saturday night, was referring to the dominant United Malays National Organisation's ban on all forms of campaigning for party elections and its efforts to stamp out vote-buying. Nik Aziz is also head of the northeastern Kelantan state's Malaysia Islamic Party, known by its initials in Malay as PAS, which seeks to create an Islamic society in Malaysia's only opposition-ruled state. Prime Minister Mahathir Mohamad's government adamantly opposes the setting up of an Islamic state in multicultural but predominantly Moslem Malaysia. Nik Aziz said the prohibition on excessive use of lipstick was part of Islamic teachings and should not be viewed lightly, Bernama reported. In Kelantan, gambling is outlawed, liquor controlled and even unisex hair salons are banned. This year the state began segregating store checkout counters by gender and bans carnival rides, song and dance shows and beauty pageants except by special permission. 6961 !GCAT !GDIP Some countries that recognise China instead of Taiwan are mulling further relations with the island, the China Times reported on Sunday. Taiwan has representatives in Nigeria, Mauritius, Madagascar, Zaire, Angola, Libya and Congo -- none of which recognise Taipei -- and relations are improving, the newspaper quoted a report by Vice-President and Premier Lien Chan as saying. "Among them, some countries plan to establish further ties with us and we will carefully review the cases," said Lien's report. It did not elaborate on what the further ties were. Only 30 countries, most of them in Africa and central America, recognise Taiwan instead of China. Beijing won the latest round of the diplomatic battle in August, winning Niger back four years after the African state turned to Taiwan from China. Foreign Minister John Chang denied media reports that Taiwan would soon establish diplomatic ties with three African states, the United Daily newspaper said. Lien's report said Taiwan and Ukraine would exchange representative offices and Belarus would open an economic office in Taipei. Lien's secretive visit to Ukraine in late August was hailed by local media as a breakthrough in Taiwan's effort to end the international isolation imposed by China. Since the Chinese civil war ended in 1949, Beijing has regarded Taiwan as a Chinese province not entitled to foreign ties. 6962 !C24 !CCAT !GCAT !GDIP China formally opened on Sunday what it bills as its first direct rail link between the capital Beijing and the British colony of Hong Kong, which will revert to Chinese rule next year. As railway workers waved bouquets and a marching band played a rousing farewell, the East Wind Number Four locomotive chugged out of the massive Beijing West Railway Station to mark the inauguration of the rail link. The railway was built over three years at a cost of 40 billion yuan ($4.8 billion), making it China's biggest single railway investment. The line stretches 2,356 km (1,414 miles), crosses 1,045 bridges and threads through 150 tunnels as it snakes its way to the edge of Hong Kong. China calls it the Beijing-Kowloon railway, referring to the British colony's northern district, but the train actually stops at the Chinese border town of Shenzhen. For the time being, passengers will have to walk across the border to Hong Kong where they catch a local train. The trip from Beijing to the Hong Kong border will take about 40 hours, considerably less time than in the past, when passengers had to travel to the southern city of Guangzhou and then switch trains to Shenzhen. The official media have played up the theme of China's political capital now being more closely linked to the economic and financial centre of Hong Kong that will soon be returned to the motherland. Under a Sino-British agreement signed in 1984, the colony reverts to Chinese rule on July 1, 1997. Nearly every senior Chinese leader has been photographed inspecting the key project during its construction, which mobilised 210,000 workers and was completed four months ahead of schedule. Vice Premier Zou Jiahua took the honours this time, cutting a red ribbon to symbolically open the rail line while other dignitaries looked on. Among those invited to the ceremony were some of the state bankers who helped pay for the project. China has used some other innovative measures to raise cash for the railway. It auctioned pure gold train tickets with one of them fetching 51,000 yuan ($6,100). 6963 !GCAT !GDIS !GENV Japan, one of the most earthquake-prone nations, carried out annual disaster drills on Sunday with rescue dogs, heroes of last year's Kobe earthquake, out in force for the first time. In another lesson from the 1995 Kobe disaster, questions were raised on how the safety of non-Japanese speaking foreigners could be ensured in future catastrophes. There is a tremor almost every day in some part of Japan, particularly in northern parts of the country which include Tokyo. Nearly 13 million Japanese -- one-tenth of the country's population -- took part in the nationwide exercises, which have been held on September 1 for the past 25 years. The date was selected to commemorate Japan's worst modern earthquake at 11.58 a.m. on September 1, 1923, when a 7.9 Richter scale tremor, known as the Great Kanto Earthquake, devastated Tokyo. The disaster killed about 100,000 people, made 3.4 million homeless and set off fires that burned down nearly 500,000 buildings. Troops, police, firemen, doctors, other rescue personnel and business employees took part in Sunday's drills, which simulated a devastating eartquake that would cut power, water supplies, transport and communication links and set off widespread fires. But the stars of this year's exercises, bounding from helicopters and sniffing through rubble piles, were the unwanted rescue dogs of the Kobe earthquake, in which 5,500 people died. During the Kobe disaster, a scandal broke out when 12 rescue dogs from Switzerland's famed alpine unit which searches for victims of avalanches were delayed from entering Japan for quarantine reasons. Critics say the delay, and Japan's lack of its own rescue dogs, cost many people their lives as they suffocated under rubble. Once brought into the search in Kobe, the dogs several times found victims who had been given up for dead. The lesson was learned and since then dozens of new rescue dogs have been trained, with many of them on display on Sunday. "It's the year of the rescue dog," Naotaka Oyama, head of the Japan Rescue Association, told the Asahi Evening News. However the newspaper said this year's drills raised questions about how foreigners could be protected in a disaster. It said in the Tokyo region, home to 260,000 foreigners and the location of all embassies, there were no specific arrangements made for foreigners in the drill. "No specific programmes involving foreigners have been included in this year's drill," a rescue spokesman told the newspaper. "But we hope we will be able to incorporate some measures next year." In the Kobe earthquake, many foreigners caught in the disaster complained that because they did not speak Japanese they were left to their own devices in finding help as they staggered from destroyed buildings or sought food and shelter. Foreign associations want the government to make better arrangements to broadcast information in languages other than Japanese in the event of future disasters. 6964 !GCAT !GCRIM Burma's military government seized nearly 143 kg of heroin in the northeastern Shan state and arrested six people in an operation near the Chinese border, official media reported on Sunday. Acting on information from military intelligence that a clandestine opium refinery camp was operating in Shan state, government troops raided the area on August 29, state newspapers and television reported. Officials opened fire on passengers in two unregistered jeeps as they tried to flee. A total of 417 packages of heroin amounting to about 142.9 kg were found in the vehicles, the media said. It is the largest single seizure of heroin in Burma that has been reported by state media. Six people were arrested and two others escaped during the raid, the state media said. Officials are now searching the area for more heroin refineries, it added. 6965 !E51 !E512 !ECAT !GCAT !GDIP China, trying business rather than military bullying to woo back Taiwan, has found willing partners in the estranged island's powerful commercial circles -- much to the chagrin of the Taipei government. Political and commercial analysts say it is increasingly clear that China's communist leaders have little interest or intention in resuming semi-official talks with Nationalist-ruled Taiwan that they broke off 14 months ago. The festering political impasse has left Taiwan's main negotiating body, the technically private but state-funded Straits Exchange Foundation, sidelined for well over a year. Taiwan reports say the foundation's leader, Koo Chen-fu, is increasingly frustrated at losing the limelight to business. "Cross-straits relations are heating up again, but the focus is not on the Straits Exchange Foundation," the China Times Express said in a commentary. Beijing has spurred Koo's disappointment by sweetening its courtship of Taiwan's industrial and commercial circles, which see the mainland's huge markets as key to breathing fire back into their island's faltering "Asia dragon" economy. It has been five months since China dropped its heavy-handed strategy toward Taiwan -- round after round of missile tests and war games in waters near the prosperous island that Beijing has seen as a rebel province since a civil war split them in 1949. Since April, Beijing has sent numerous high-level officials on ostensibly private visits to Taiwan to pressure it to end a 47-year-old ban on direct contacts with communist China. Taipei has acceded to intense local pressure to welcome the private visitors, who have been feted by Taiwan business groups and even held informal meetings with Taiwan officials. Last week, the limelight shifted to Beijing, which rolled out the red carpet for a blue-ribbon delegation of Taiwan tycoons and even a smattering of senior Taiwan officials. Making clear that it means business despite the political impasse, Beijing arranged audiences with Communist Party chief and President Jiang Zemin and other leaders and laid on tours of potential investment projects. One visit was to a proposed Taiwan-funded industrial zone at Shanhaiguan, where the Great Wall meets the sea just north of China's northeast coal port at Qinhuangdao. The project would involve special preferences to attract Taiwan investors. But Beijing has drawn a line around political contacts with Taiwan, saying almost daily that it wants talks but carefully stopping short of letting them take place. After the Taiwan delegation invited China's top Taiwan affairs policymaker to visit Taipei, Beijing quickly quashed reports that the official, Wang Zhaoguo, had accepted. Daniel Chen, chief economist at Taiwan's aggressive Chinatrust Commercial Bank, said he doubts China will return to earnest bargaining with Taiwan until late 1997 at the earliest. That would enable Beijing to sort out two more pressing priorities -- Hong Kong's mid-1997 return to China after 150 years of British colonial rule and a crucial late-1997 Communist Party conclave at which party chief Jiang will have to fend off internal challenges to his supremacy. "I think the best possibility is that after Hong Kong goes back to China and Jiang Zemin is sustained in his post -- only then will Jiang come back to have some negotiations with Taiwan," Chen told Reuters by telephone. Analysts also expect China will try to get as much political mileage as it can out of Hong Kong's handover, squeezing Taiwan for concessions as Beijing gains influence over a territory where Taiwan has huge commercial interests. Taiwan President Lee Teng-hui regularly expresses his desire to meet with China's leaders, but Beijing has rejected ideas for encounters at regional economic forums or at other neutral-ground gatherings for fear of according political legitimacy to Lee. 6966 !GCAT !GCRIM A man armed with a shotgun and grenades seized a passenger aboard a Philippine ferry at sea and escaped with her on a life raft, the coast guard said on Sunday. Before fleeing, the man demanded 50,000 pesos ($1,925) from the crew and passengers but they could produce only 24,000 pesos ($925), which the man took before escaping with his hostage on Saturday, the coast guard said. The ferry, identified as the St Francis of Assisi, was following the raft at a distance and reporting its movements to the coast guard by telephone, coast guard commander Ernesto Caballero said. The coast guard said it did not know how many passengers were on the ferry but radio reports said more than 600 people were aboard. "We do not want to get close to the life boat because the man might harm his hostage. We do not know how desperate he is," Caballero said by telephone. He said the man initially grabbed seven hostages while the ferry was cruising in central Philippine waters but freed six of them and took only one, a woman, with him on the raft. Caballero said the coast guard did not know what the man's motive and plans were but he was apparently headed towards one of the small islands in the Cuyo island group, 400 km (248.5 miles) south of Manila. "We have a welcome party there for him in case he makes for land," Caballero said. 6967 !GCAT !GPOL !GVIO Iraqi President Saddam Hussein has ordered that armed forces pull back from areas captured during the operation in Iraq's Kurdish north, state-run television said, reporting a cabinet meeting held late on Sunday. "The Defence Minister told the conferees that President Saddam Hussein Commander-in-Chief of the armed forces has issued orders to him to return Iraqi (Army) units to their former positions," the television said, quoting Gen. Sultan Hashim Ahmed. The television did not give a time frame for the withdrawal. The cabinet meeting reviewed the tasks carried out by the Iraqi armed forces to provide support and logistics to Massoud Barzani, leader of the Kurdistan Democratic Party (KDP), the television said. Iraqi troops backed by armour and artillery intervened on Saturday on the side of the KDP to capture the main Kurdish city of Arbil from Jalal Talabani of the rival Patriotic Union of Kurdistan (PUK). Arbil is 20 km (12 miles) north of the 36th parallel, the air-exclusion zone set by a U.S.-led airforce to protect the Kurds after the 1991 Gulf War. Talabani and the Iraqi National Congress (INC) -- an umbrella group of Iraqi opposition forces -- said the Iraqi offensive continued on Sunday. Iraqi officials had said late on Saturday that Iraq would pull back its forces but Washington expressed scepticism. U.S. defence officials in Washington said more than 300 U.S. planes and 20 warships were immediately available if U.S. President Bill Clinton should order the use of U.S. force in the crisis. Iraq warned the United States on Sunday to keep out of its Kurdish north, vowing to turn the area into another Vietnam if Washington intervened. It also warned neighbouring Iran, which Baghdad accuses of siding with Talabani, not to meddle in the affairs of its ethnic Kurds. The two Kurdish factions, split along political and tribal lines, have a long history of bloodshed and shifting alliances with the main powers in the region -- Iraq and Iran. PUK leader Talabani told BBC radio that the region could split into pro-Iraq and pro-Iran camps and dropped a broad hint that his group would look to Tehran for support if Washington and its allies did not respond to Saddam's intervention. Iran has not commented on allegations by KDP officials that Iranian forces had pushed 40 km (25 miles) into northeast Iraq. 6968 !E51 !E512 !ECAT !GCAT !GDIP !GVIO Iraqi President Saddam Hussein on Sunday ordered his troops to pull out of Kurdish areas of northern Iraq after a day of fighting in which rebel leaders reported Iraqi air strikes and tank movements. But word of the intended withdrawal came too late to save Iraq's much-needed oil-for-food deal with the United Nations. U.N. Secretary-General Boutros Boutros-Ghali announced in New York he would delay the plan which allows Iraq to sell $2 billion of oil over six months to buy humanitarian supplies for Iraqis suffering under sanctions imposed after Baghdad's troops invaded Kuwait in August 1990. Boutros-Ghali said he was "very much concerned about the deterioration of the situation in northern Iraq" and had delayed sending U.N. personnel to Iraq to implement the deal. Iraqis had hoped the oil would start flowing this month. In Baghdad Saddam issued orders to return Iraqi units to their former positions, Iraqi state television said, quoting Defence Minister General Sultan Hashim Ahmed after a cabinet meeting late on Sunday. Iraqi tanks and troops supporting the Kurdistan Democratic Party (KDP) captured the main Kurdish city of Arbil from the rival Patriotic Union of Kurdistan (PUK) on Saturday after an artillery barrage. The Iraqi flag was hoisted over what used to be the Kurdish parliament. PUK leader Jalal Talabani and the opposition Iraqi National Congress (INC) said the Iraqi offensive continued on Sunday and that government soldiers executed nearly 100 former soldiers who had defected earlier to the INC. President Bill Clinton placed U.S. forces in the region on high alert on Saturday and spoke by telephone on Sunday to British Prime Minister John Major and Saudi Arabia's King Fahd. White House spokesman Mike McCurry said Clinton, spending the weekend in his home state, called several world leaders. "I am not drawing lines in the sand, that is not the purpose of the consultations we have under way," McCurry told reporters. He added: "There is no justification for the military action Saddam Hussein has taken in the north of his country directed apparently against one faction of the Kurdish population there, and the United States believes that he cannot conduct himself with impunity, that there should be consequences..." U.S. defence officials in Washington said more than 300 U.S. planes and 20 warships were immediately available. "The Iraqi air force is now bombing our forces in a village which is close to Arbil. The Iraqi aircraft have crossed the 36th parallel and are attacking our forces in this village," Talabani told Radio France Internationale. He said Hassani village, also known as Bustaneh, was inside the air-exclusion zone Western allies imposed on northern Iraq after the 1991 Gulf War. An INC spokesman said from London that Iraqi Swiss-made Pilatus planes had attacked the village, 20 km (12 miles) east of Arbil. There was no independent confirmation of Iraqi air strikes. "The first crime committed by the Iraqi armed forces was the massacre of 97 Arab soldiers and officers who defected from the army to the INC," Talabani said. Speaking by telephone from northern Iraq, he also said KDP forces had captured his wife in Arbil and that thousands of civilians were fleeing towards his stronghold of Sulaimaniya. Areas 15 km (10 miles) from the northeastern town near the Iranian border came under heavy shelling on Sunday, he said. The INC said a column of Iraqi T-72 tanks was moving deeper into rebel Kurdish territory, apparently headed for Sulaimaniya. "There is no withdrawal. This is an Iraqi invasion of Iraqi Kurdistan," an INC spokesman in London said before Baghdad's announcement of a pullback. The column was last reported near the village of Koi Sanjaq, 60 km (40 miles) east of Arbil. A senior U.N. official told Reuters that Iraqi troops were holding positions outside Jemjal, a sizeable Kurdish town also known as Chamchamal, about 60 km (38 miles) west of Sulaimaniya. The INC spokesman said special intelligence units, armed with lists of names, were hunting opposition figures in the fallen city of Arbil and had seized files and destroyed buildings. Iraqi officials had said late on Saturday that Iraq would pull back its forces but Washington expressed scepticism. A senior KDP official in the northern Iraqi town of Zakho said, however, Baghdad had already pulled more than half of its total forces of some 40,000 soldiers out of Arbil. Iraq warned the United States to stay out of the area. "The Iraqi people, in the forefront Iraqi Kurds, are ready to provide an example that will inevitably remind the Americans of the Vietnam complex," the government newspaper al-Jumhouriya declared in a front-page editorial. The two Kurdish factions, split along political and tribal lines, have a long history of bloodshed and shifting alliances with the main powers in the region -- Iraq and Iran. PUK leader Talabani told BBC radio that the region could split into pro-Iraq and pro-Iran camps and dropped a broad hint that his group would look to Tehran for support if Washington and its allies did not respond to Saddam's intervention. Iran has not commented on allegations by KDP officials that Iranian forces had pushed 40 km (25 miles) into northeast Iraq. 6969 !GCAT !GDIP !GVIO A Kurdish rebel leader said Iraqi aircraft bombed a village in northern Iraq on Sunday and government soldiers executed nearly 100 defectors after capturing the Kurdish city of Arbil on Saturday. Iraq warned the United States to keep out of its Kurdish north and threatened to turn the area into another Vietnam if Washington intervened. President Bill Clinton placed U.S. forces in the region on high alert on Saturday. "The Iraqi air force is now bombing our forces in a village which is close to Arbil. The Iraqi aircraft have crossed the 36th parallel and are attacking our forces in this village," Jalal Talabani, leader of the Patriotic Union of Kurdistan (PUK), told Radio France Internationale. He said Hassani village, also known as Bustaneh, was inside the air-exclusion zone Western allies imposed on northern Iraq after the 1991 Gulf War. An opposition Iraqi National Congress (INC) spokesman said from London that Iraqi Swiss-made Pilatus planes had attacked the village, 20 km (12 miles) east of Arbil. There was no independent confirmation of Iraqi air strikes. Iraqi tanks and troops supporting Talabani's old rival -- Kurdistan Democratic Party (KDP) leader Massoud Barzani -- captured Arbil from the PUK on Saturday after an artillery barrage. The Iraqi flag was hoisted over what used to be the Kurdish parliament. Talabani, speaking by telephone from northern Iraq, said KDP forces had captured his wide in Arbil. Areas 15 km (10 miles) from his northeast stronghold of Sulaimaniya came under heavy shelling on Sunday, he said. He told the U.S. network CNN that Iraqi soldiers had executed 97 Iraqi soldiers who had defected to the side of the INC, an umbrella opposition group that includes the PUK. "The first crime committed by the Iraqi armed forces was the massacre of 97 Arab soldiers and officers who defected from the army to the INC," Talabani said. The INC alleged that Baghdad's forces overran an opposition camp in Qushtapa near Arbil and executed 96 former Iraqi soldiers who had defected. "They were actually executed after capture as a kind of warning," the spokesman said. The INC said a column of Iraqi T-72 tanks was moving deeper into rebel Kurdish territory, apparently headed for Sulaimaniya. "There is no withdrawal. This is an Iraqi invasion of Iraqi Kurdistan," an INC spokesman in London said. The column was last reported near the village of Koi Sanjaq, 60 km (40 miles) east of Arbil. A senior U.N. official told Reuters in Baghdad that Iraqi troops were holding positions outside Jemjal, a sizeable Kurdish town also known as Chamchamal, about 60 km (38 miles) west of Sulaimaniya. The INC spokesman said special intelligence units, armed with lists of names, were hunting opposition figures in Arbil. "All of the buildings and facilities of the INC have been visited by the intelligence troops...Computers and files were taken away and the buildings were blown up," he said. Iraq said earlier on Sunday it would withdraw its troops from Arbil. Washington expressed scepticism. But a senior KDP official in the northern Iraqi town of Zakho said Baghdad had already pulled more than half of its total forces of some 40,000 soldiers out of Arbil. Washington reiterated its warnings to President Saddam Hussein but would not be drawn on how it would actually respond. White House chief of staff Leon Panetta said on NBC television that a team of high-ranking U.S. officials was likely to be sent shortly to the region for talks with U.S. allies. "There will be a response," Panetta said. "Saddam Hussein continues to remain a threat to his own people and to the region and we have made it clear that this is unacceptable. We have warned him that if he took that kind of action there will be consequences," he said. U.S. defence officials in Washington said more than 300 U.S. planes and 20 warships were immediately available. But Iraq warned the United States to stay out. "The Iraqi people, in the forefront Iraqi Kurds, are ready to provide an example that will inevitably remind the Americans of the Vietnam complex," the government newspaper al-Jumhouriya declared in a front-page editorial. In Paris the French government expressed its concern at Baghdad's offensive. "We urge Baghdad...to ensure that civilian populations are not affected by the fighting and to take all measures aimed at avoiding anything that could jeopardise their security," a French foreign ministry statement said. Iran has not commented on allegations by KDP officials that Iranian forces had pushed 40 km (25 miles) into northeast Iraq. The two Kurdish factions, split along political and tribal lines, have a long history of bloodshed and shifting alliances with the main powers in the region -- Iraq and Iran. PUK leader Talabani told BBC radio that the region could split into pro-Iraq and pro-Iran camps and dropped a broad hint that his group would look to Tehran for support if Washington and its allies did not respond to Saddam's intervention. 6970 !GCAT !GDIP Israel promised Egypt on Sunday that an agreement on talks with the Palestinians was imminent but Egypt said it would be content only when it saw action on the ground, not just words on paper. Challenged on Jewish settlements in the West Bank, Israeli Foreign Minister David Levy said the Israelis were not confiscating land or building new settlements. Egyptian Foreign Minister Amr Moussa jumped on the remark, describing it as "distinct progress". "I want you to take note of what Minister Levy said, that Israel is not going to confiscate any more land, let us put that on record," he added. Levy and Moussa were speaking at a joint news conference after talks in the Egyptian city of Alexandria. Egyptian President Hosni Mubarak also took part in the talks. Levy, seeking to answer Egyptian concerns at the slow pace of peace talks under the new Israeli government, said he was confident that talks between Israel and the Palestinian Authority would bear fruit within days, possibly on Sunday. "I hope that today the delegation of the Israeli government and the Palestinian Authority will reach an agreement... There were problems that we are overcoming. I am certain that in coming days there will be tangible progress," he said. Moussa said Egypt would welcome an agreement but that in itself it may not be enough to persuade Egypt to go ahead with the Middle East economic conference due in Cairo in November. The main point of the conference would be to work towards integrating Israel into the regional economy after peace. Mubarak has put the fate of the conference in the balance by saying that there must first be progress towards peace. Moussa said: "If there is progress (between Israel and the Palestinians) then we will take that as a sign but it is not enough. The important thing is implementation on the ground. "I cannot imagine that the economic summit would take place when withdrawal from Hebron has not happened yet. In the absence of implementation, it will be a very serious situation." "It is impossible to imagine that we can talk about regional cooperation when the peace process is obstructed or paralyzed. It would be illogical, out of the question," Moussa added. Israeli troops were originally to have withdrawn from the West Bank town of Hebron in March but the previous Israeli government postponed the process until after elections in May. In Arab eyes the future arrangements in the town, which has a large Jewish settler presence, has become a test case for the intentions of Israeli Prime Minister Benjamin Netanyahu. The ministers both said the talks in Alexandria had been excellent but Moussa repeatedly stressed the need for Israel to carry out old agreements on the ground. "The minister has mentioned that there are negotations which will produce something today. We don't know so we will wait. It is nice to promise, nice to expect some agreements but the essential is the implementation, correct implementation. In the absence of that, it will be very serious," Moussa said. Moussa and Levy differed most strikingly on the Jewish settlements, an issue that has persuaded most Palestinians that the Israeli government is not serious about peace. Levy said the Oslo agreement between Israel and the Palestinians did not ban settlement activity and that this was a matter for negotiations only with the Palestinians. "Nevertheless, we do not confiscate land and we don't build new settlements," he added. Moussa retorted: "The settlement policy remains for us, and it's not a question for the Palestinians only, it is for all of us, the building of settlements is a very serious mistake and constitutes a serious blow to the process of peace." 6971 !GCAT !GPOL !GVOTE New charges of electoral abuse were raised during the third round of Lebanon's parliamentary election on Sunday after representatives of Prime Minister Rafik al-Hariri were seen handing out bribes to Beirut voters. About 30 percent of Beirut's 377,000 voters cast their ballots in the election, interior ministry officials said after polls closed at five p.m. (1400 GMT). First unofficial results were expected late on Sunday night. Dozens of voters queuing at a Hariri election office in the capital during the afternoon told a Reuters reporter they were waiting for payments of 100,000 Lebanese pounds ($64) each which they had been promised for voting for Hariri. They said they were promised the money if they swore on the Koran, the Moslem holy book, to go and vote for the billionaire construction tycoon who was running for parliament for the first time. One woman said she was paid 100,000 pounds after voting for Hariri in the morning. The reporter then saw Hariri's representatives hand money to a man at the head of a crowd of voters who surged towards the office demanding payment. The handouts ended abruptly when a dozen Lebanese army soldiers arrived, told the crowd to disperse and seized the cameras of two private Lebanese television stations and Reuters Television who were filming the event. They accused the television crews of filming the soldiers, which is banned in Lebanon. An opposition candidate earlier said on television "a rich candidate" was bribing voters. But Hariri's office denied any involvement in bribery, saying supporters of other candidates were posing as Hariri's representatives and paying voters. Hariri, who has been prime minister for nearly four years, headed a 17-man list of candidates running for all but two of Beirut's 19 seats in the 128-member parliament. Hariri rolled out a powerful election machine, hoping to forge a solid electoral base after winning popularity in the country through the achievements of his multi-billion dollars reconstruction drive. Thousands of campaign workers in Hariri t-shirts handed out literature and urged voters to vote for him, and hundreds of rented taxis plastered with Hariri posters shuttled supporters to polling stations. Hariri and his chief rival, ex-premier Selim Hoss who is widely respected as a moderate, independent politician, were both expected to win easily. But it was unclear how many of the 16 other candidates on Hariri's list would get in. Hoss headed a rival 13-man list. Radical Christian deputy Naja Wakim, a sworn foe of Hariri, also headed an eight-man list. The bribery incident was one of the most serious in a flood of alleged violations marring the first three rounds of the five-stage elections which continue on the next two Sundays in south Lebanon and the eastern Bekaa Valley. Opposition candidates and an independent monitoring group alleged widespread abuses in the first two rounds when supporters of Hariri's pro-Syrian government swept aside all but a handful of opposition candidates. There were more charges of fraud on Sunday. Wakim, other opposition candidates and the independent Lebanese Association for Democracy of Elections said electoral lists were manipulated, opposition delegates barred from monitoring the voting at some polling stations and the interior ministry illegally handed stamped voting envelopes to Hariri's campaign team. Some voters also found someone had already voted in their name when they arrived at their polling station. "A major fraud is taking place...I will sue Hariri and his supporters and the interior minister who are carrying out fraud," Wakim told reporters. 6972 !GCAT !GPOL !GVOTE Dozens of Beirut voters said on Sunday they had been paid or promised 100,000 Lebanese pounds ($64) each for voting for billionaire Prime Minister Rafik al-Hariri in Lebanon's parliamentary election. They told a Reuters reporter they were promised the money by Hariri election representatives after they agreed to swear on the Koran, the Moslem holy book, to go and vote for Hariri. But Hariri's electoral office issued a denial that it was involved in bribery and accused representatives of rival candidates of making the payments. The Reuters reporter saw more than 200 people waiting to be paid outside a petrol station in the Tarek al-Jdeideh district of west Beirut, which was plastered with Hariri election posters and marked as Hariri's election office number 19. They told Reuters they had sworn on the Koran as requested, and their identity documents had been stamped at the election office with the letters q and b for Hariri's 17-man list of candidates called "Qarar Beirut" (Decision of Beirut). They then went to vote and had returned to the office where they were told to wait until the money arrived. As the voters spoke to the reporter a cry suddenly went up: "The money came. The money came," and the crowd surged forward into the election office. Several people brandished up to 10 identity documents, demanding payment for each of them as they rushed forward. The Reuters reporter saw a man at the head of the queue hand over his identity document to Hariri officials in the management office of the petrol station, who apparently checked that it had been stamped after he swore on the Koran. The reporter then saw the man receive 100,000 pounds but he refused to give Reuters his name as he left. A few minutes later camera crews from two private Lebanese television stations and Reuters Television arrived and began filming. They were followed in minutes by a dozen Lebanese army soldiers in an armoured personnel carrier who leaped out and ordered people to leave and seized the television cameras and the camera of Reuters photographer Jamal Saidi. An officer told the journalists the cameras were seized because they took pictures of the troops, which is banned in Lebanon. Saidi's camera was quickly returned but the television cameras were not immediately released. Hariri's campaign office issued a statement saying it would never resort to bribery. "The list of the Decision of Beirut (Hariri's list) warns that members of other lists have been posing as members of the list and paying people to vote for it," the statement said. Stories of voter bribery in Lebanese elections are not rare. The price of a vote in Beirut during the last parliamentary elections in 1992 is said to have been $50. Opposition candidate Issam Naaman told the private Beirut television station LBC earlier on Sunday that "a rich candidate" was handing out $100 each to voters at Tarek al-Jdeideh and another election office in Beirut. Um Bassam, a woman in her 40s, told the Reuters reporter that young men from the Hariri office had knocked on her door to offer her money. "They told me to come and swear to vote for Hariri and I would get 100,000 pounds. So I came and swore on the Koran and I voted for Hariri, although I had been planning to vote for (former prime minister Selim) Hoss if anyone," she said. 6973 !GCAT !GVIO A Kurdish rebel leader and an opposition group said Iraqi aircraft bombed their positions in northern Iraq on Sunday, a day after Iraqi troops and tanks overran the Kurdish city of Arbil. Iraq warned the United States to keep out of its Kurdish north and threatened to turn the area into another Vietnam if Washington intervened. President Bill Clinton placed U.S. forces in the region on high alert on Saturday. "The Iraqi air force is now bombing our forces in a village which is close to Arbil. The Iraqi aircraft have crossed the 36th parallel and are attacking our forces in this village," Jalal Talabani, leader of the Patriotic Union of Kurdistan (PUK), told Radio France Internationale. He said Hassani village was inside the air-exclusion zone Western allies imposed on northern Iraq after the 1991 Gulf War. Iraqi tanks and troops supporting Talabani's old rival -- Kurdistan Democratic Party (KDP) leader Massoud Barzani -- captured Arbil from the PUK on Saturday after an artillery barrage. The Iraqi flag was hoisted over what used to be the Kurdish parliament. Talabani said areas 15 km (10 miles) from his northeast stronghold of Sulaimaniya came under heavy shelling on Sunday but not the city itself. A senior U.N. official told Reuters in Baghdad that Iraqi troops, reinforced in the past few weeks, were holding positions outside Jemjal, a sizeable Kurdish town about 60 km (38 miles) west of Sulaimaniya. An opposition Iraqi National Congress (INC) spokesman said from London that Iraqi Swiss-made Pilatus planes had attacked the town of Bustaneh, 20 km (12 miles) east of Arbil. There was no independent confirmation that Iraq had deployed its air force. The INC spokesman said special intelligence units, armed with lists of names, were hunting opposition figures in Arbil. "All of the buildings and facilities of the INC have been visited by the intelligence troops," the spokesman said. "Computers and files were taken away and the buildings were blown up." The INC alleged that Baghdad's forces overran an opposition camp in Qushtapa near Arbil and executed 96 former Iraqi soldiers who had defected to fight against President Saddam Hussein. "They were actually executed after capture as a kind of warning," the spokesman said. Iraq said earlier on Sunday it would withdraw its troops from Arbil. Washington expressed scepticism. But a senior KDP official in the northern Iraqi town of Zakho said Baghdad had already pulled more than half its forces out of Arbil. "About 40,000 Iraqi soldiers had entered. A large portion of that -- more than half of them -- have withdrawn," Husameddin Mohammed told Reuters. Washington reiterated its warnings to Saddam but declined to be drawn on how it would actually respond. White House chief of staff Leon Panetta said on NBC television that a team of high-ranking U.S. officials was likely to be sent shortly to the region for talks with U.S. allies there. He gave no details. "There will be a response," Panetta said. "Saddam Hussein continues to remain a threat to his own people and to the region and we have made it clear that this is unacceptable. "We have warned him that if he took that kind of action there will be consequences," he said. U.S. defence officials in Washington said more than 300 U.S. planes and 20 warships were immediately available. But Iraq warned the United States to stay out. "The Iraqi people, in the forefront Iraqi Kurds, are ready to provide an example that will inevitably remind the Americans of the Vietnam complex," the government newspaper al-Jumhouriya declared in a front-page editorial. In Ankara, Turkish Foreign Minister Tansu Ciller declared: "Saddam must withdraw immediately." Iran's Parliament Speaker Ali Nateq Nouri told parliament on Sunday the attack on Arbil "has been definitely carried out in coordination with and a green light from Washington". Iran has not commented on allegations by KDP officials that Iranian forces had pushed 40 km (25 miles) into northeast Iraq. The two Kurdish factions, split along political and tribal lines, have a long history of bloodshed and shifting alliances with the main powers in the region -- Iraq and Iran. PUK leader Talabani told BBC radio that the region could split into pro-Iraq and pro-Iran camps and dropped a broad hint that his group would look to Tehran for support if Washington and its allies did not respond to Saddam's intervention. Interviewed on the same BBC programme, London-based KDP spokesman Hoshiyar Zebari said he did not think Saddam would move deep into northern Iraq for fear of provoking Washington and its allies. "My understanding is that this was a limited operation and he's planning to pull back immediately to his lines." 6974 !GCAT !GPOL !GVIO Baghdad's forces overran an opposition camp near the city of Arbil and executed 96 former Iraqi soldiers who had defected to fight against President Saddam Hussein, an opposition spokesman said on Sunday. "Ninety-six soldiers and officers were executed...in full view of the residents of Qushtapa," 22 km (15 miles) south of Arbil, the spokesman for the Iraqi National Congress (INC) told Reuters from London. "They were actually executed after capture as a kind of warning," the spokesman said, citing what he said were "several" witness accounts of the killings. All were former Iraqi troops who had gone over to the INC umbrella opposition. Thirty-two INC troops escaped the Iraqi assault, late on Saturday, fleeing after the opposition forces had resisted to the last bullet, the spokesman said. He said that special intelligence units, armed with lists of names, were hunting opposition figures in Arbil, which fell to Iraqi forces backing the Kurdistan Democratic Party, one of the two main Kurdish factions. "All of the buildings and facilities of the INC have been visited by the intelligence troops," the spokesman said. "Computers and files were taken away and the buildings were blown up." The combined forces took the city, the region's administrative centre, after fierce fighting on Saturday and expelled forces of the rival Patriotic Union of Kurdistan. 6975 !GCAT !GDEF !GDIP Turkey, troubled by mounting instability in neighbour and trade partner Iraq, demanded on Sunday that Baghdad troops leave the main Kurdish city of Arbil in northern Iraq and pursue peaceful solutions for its problems. "(Iraqi President) Saddam (Hussein) must withdraw immediately," Turkish Foreign Minister Tansu Ciller was quoted by the state-run Anatolian news agency as saying. "It is imperative for peace that Saddam ends the attack it has mounted with the (Massoud) Barzani forces around Arbil." Iraqi troops backed by armour and artillery intervened on Saturday in inter-Kurdish fighting in northern Iraq on the side of KDP leader Massoud Barzani to recapture Arbil from Jalal Talabani of the Patriotic Union of Kurdistan (PUK). Iraq earlier pledged to withdraw from northern Iraq, without setting a date. Washington expressed scepticism over Iraq's intentions, but a KDP official in the northern Iraqi town of Zakho said many of the troops had already left Arbil. Turkey sided with the allies in the 1991 Gulf War against Iraq, then its third biggest trade partner. But it is also wary of Kurdish autonomy in northern Iraq and fears the authority void there enables Turkey's own Kurdish separatist rebels to operate in the region and launch attacks on southeast Turkey. "Turkey will not allow its security and economic concerns in the region and on its borders to be compromised," Ciller said, adding that Turkey's policy on Iraq was unchanged. "It is not right for an independent state to be formed in northern Iraq," she said. "Iraq's territorial integrity and its sovereignty are vital conditions for Turkey." Turkey, while adhering to U.N. sanctions on Baghdad that it says has lost it more than $27 billion since 1990, hopes for an eventual reunification of the country and an end to factional fighting in northern Iraq. A U.N. Security Council committee last week decided to postpone action on Turkey's application for special allocations of Iraqi crude above and beyond what would be permitted under a new oil-for-food deal between Baghdad and the United Nations. Ciller said she did not expect the original oil-for-food deal to be affected by the Arbil attack. "But Saddam must also help Iraq on this point and withdraw without delay," she said. 6976 !GCAT !GDEF Baghdad has withdrawn many of its troops from the main Kurdish city of Arbil in northern Iraq, an Iraqi-backed Kurdish group said on Sunday. "About 40,000 Iraqi soldiers had entered. A large portion of that -- more than half of them -- have withdrawn," Husameddin Mohammed, a senior official for the Kurdistan Democratic Party (KDP) in the northern Iraqi town of Zakho, told Reuters. Iraqi troops backed by armour and artillery intervened on Saturday in inter-Kurdish fighting in northern Iraq on the side of KDP leader Massoud Barzani to recapture Arbil from Jalal Talabani of the Patriotic Union of Kurdistan (PUK). "Talabani joined with Iran, and in response, we came closer to Iraq. We got their support," Mohammed said. He said Talabani's troops had withdrawn to Sulaimaniya, in the south of the Kurdish-controlled region. Mohammed said the tanks used in the assault on Arbil -- captured in December 1994 by the PUK -- did not belong to Baghdad, but had been bought from Iraq by the KDP. Iraq earlier pledged to withdraw from northern Iraq, but has not set a date. Washington expressed scepticism over Iraq's intentions. President Bill Clinton put U.S. troops in the Gulf on high alert after the attack on Arbil. Iraq warned the United States to keep out of its Kurdish north and vowed to turn it into another Vietnam if Washinton intervened. All was quiet in the towns of Zakho and Dohuk of the Kurdish-controlled northern Iraqi region on Sunday. KDP officials say they have told the people of Arbil to return to their jobs and continue life as normal. The two Kurdish factions have a history of bloodshed and shifting alliances with Iraq and Iran. The fighting in Arbil derailed the latest in a series of peace talks, which had been scheduled to take place in London. 6977 !GCAT !GDIP !GVIO Iraq warned the United States on Sunday to keep out of its Kurdish north, where Iraqi forces have moved in to help a Kurdish faction, and threatened to turn the area into another Vietnam if Washington intervened. "The Iraqi people, in the forefront Iraqi Kurds, are ready to provide an example that will inevitably remind the Americans of the Vietnam complex," the government newspaper al-Jumhouriya declared in a front-page editorial. "Beware of the wrath of Iraqi Kurds...They should not believe that what happened can be controlled by force," it said. Iraqi troops backed by armour and artillery intervened on Saturday on the side of Massoud Barzani, leader of the Kurdistan Democratic Party (KDP), to recapture the Kurdish stronghold of Arbil from Jalal Talabani's Patriotic Union of Kurdistan (PUK). Iraq said earlier on Sunday it would withdraw its troops. Washington expressed scepticism about the pledge. But a senior KDP official in the northern Iraqi town of Zakho said on Sunday that Baghdad had already pulled more than half its forces out of Arbil. "About 40,000 Iraqi soldiers had entered. A large portion of that -- more than half of them -- have withdrawn," Husameddin Mohammed told Reuters. Earlier a U.N. source in Baghdad said the Kurdish stronghold of Sulaimaniya, the last remaining major Iraqi city held by Talabani, was the target of artillery fire on Sunday morning. "According to our reports there has been shelling in Sulaimaniya but we cannot determine where it came from," the source told Reuters. Iraq's official news agency INA later said people arriving in Kirkuk from Sulaimaniya reported the area was not shelled during operations by Iraqi forces around Arbil. The Iraqi thrust into Arbil was the first in the area since Washington and its Western allies set up an air exclusion zone in northern Iraq after the 1991 Gulf War to protect Iraqi Kurds against attacks by Baghdad. It prompted the United States, Iraqi President Saddam Hussein's Gulf War foe, to put its forces in the Middle East on high alert and posed a difficult challenge to U.S. President Bill Clinton in the middle of the American election campaign. Clinton, speaking during a bus tour of the U.S. Midwest, said the developments caused him grave concern. "I have placed our forces in the region on high alert and they are now being reinforced," he said. In Ankara, Turkish Foreign Minister Tansu Ciller declared on on Sunday: "Saddam must withdraw immediately." Iran's Parliament Speaker Ali Nateq Nouri told parliament on Sunday the attack on Arbil "has been definitely carried out in coordination with and a green light from Washington". Iran's official news agency IRNA quoted him as saying both Washington and Baghdad "have deprived the Iraqi people of the right to decide their fate and have kept them under pressure". Announcing Iraq's intention to pull back, a government spokesman said: "...Our troops will return to former positions in a very short period." Iraq would withdraw "because the political leadership has not decided yet to resume the government administration of the (Kurdish) autonomous region". The INA news agency said the spokesman issued his statement after a meeting of the Revolutionary Command Council (RCC) and leaders of the ruling Baath party chaired by Saddam. At the United Nations, Iraq's deputy U.N. ambassador said Baghdad's decision to withdraw would be implemented shortly. In an interview with Reuters Television late on Saturday, Dr Saeed Hasan also warned Iran not to interfere in the affairs of the Kurdish north but said Baghdad would not reassert its control over these areas at this time. He dismissed suggestions the military action would affect a limited oil sales deal between Iraq and the U.N.: "Since this is a limited operation and has already been finished and achieved, I don't think it has an impact on the oil-for-food (deal)." Arbil is 20 km (12 miles) north of the 36th parallel, the line that allied forces had barred Iraqi troops from crossing since soon after the Gulf War. U.S., British and French planes based in Turkey enforce a no-fly zone above the 36th parallel. U.S. defence officials in Washington said more than 300 U.S. planes and 20 warships were immediately available if Clinton should order the use of U.S. force in the crisis. On Saturday, Arbil residents reported heavy casualties from shelling and said terrified civilians were fleeing. But in Ankara, the Turkish capital, KDP representative Faik Nerweyi said: "The casualties have been minimal and if the people keep quiet there, normal life will commence tomorrow." The two Kurdish factions, split along political and tribal lines, have a long history of bloodshed and shifting alliances with the main powers in the region -- Iraq and Iran. Nerweyi said Iran, which fought an eight-year war with Iraq in the 1980s, sent troops into northern Iraq in response to the attack on Arbil. 6978 !GCAT !GDIP !GVIO A key Iranian official on Sunday accused the United States of complicity in Kurdish infighting in northern Iraq but ignored charges of Iranian intervention. Majlis (parliament) Speaker Ali Akbar Nateq-Nouri said the Iraqi attack on the city of Arbil on Saturday could not have taken place without Washington's consent. "The latest killings of the inhabitants of Arbil have undoubtedly not taken place without America's consent and coordination," Tehran radio and the official Islamic Republic News Agency (IRNA) quoted him as saying. "America and the (Iraqi) Ba'ath regime will not let the people of Iraq decide matters for themselves and always place them under pressure and create problems for them," he told the first open session of the Majlis after the summer recess. "American leaders have adopted an anti-Iran stance because of their electioneering activities and also because they want to divert public opinion from that country's domestic problems. This has really disgraced the Americans," Nateq-Nouri said. An Iraqi Kurdish group said Iranian troops entered Kurdish-controlled northern Iraq on Saturday in the wake of an assault backed by Baghdad. Separately, Iraq's deputy envoy to the United Nations warned Iran not to interfere in the affairs of its Kurdish north. The presence of Iranian troops in Iraq, if confirmed, would put the two neighbouring oil states -- who fought from 1980 to 1988 in a war in which up to a million people were killed -- on opposite sides of another bloody conflict. Faik Nerweyi of the Kurdistan Democratic Party (KDP) told Reuters by telephone from Ankara on Saturday Iranian forces had occupied an area of northern Iraq close to the Iranian border to a depth of 40 km (25 miles) and set up a headquarters in Chuman. Nerweyi said he did not know the size or nature of the Iranian forces, but said KDP fighters had been easily outgunned and had quickly withdrawn further west. Iraq's charge d'affaires at its U.N. mission in New York, Saeed Hasan, warned Iran not to interfere in the affairs of the Kurdish north but said Baghdad would not reassert its control over those areas at this time. U.S. officials said Iraq amassed 30,000-40,000 troops in its three northern Kurdish provinces and on Saturday captured the city of Arbil, expelling the Patriotic Union of Kurdistan (PUK), and installing the rival KDP. The two factions have a history of bloodshed and shifting alliances with Iraq and Iran. The KDP charges that the PUK, which took control of Arbil in fighting in December 1994, has backing from Iran. The PUK accuses the KDP of collaborating with Baghdad. Hasan maintained the military action was necessary because Iran was reported to have sent 300 Revolutionary Guards to the area two weeks ago and earlier had infiltrated Kurdish groups. He said Iran as well as "other parties" should realise that Iraq's three northern provinces were still a part of Iraq and not a "no man's land". "So our message to Iran is clear: 'Don't interfere in our internal affairs. Don't hurt our sovereignty'. And at the same time, it's the same appeal to other parties." Iran News daily in an editorial on Sunday called the charges "flimsy" and said the movements of Iraqi forces seemed to be a prelude to more adventurism which was so characteristic of Iraqi President Saddam Hussein. The Kurds live in a mountainous region where the borders of Turkey, Syria, Iran and Iraq meet. Years of bitter infighting and the strong opposition of all four countries have frustrated Kurdish aspirations for autonomy. Iran News said the regional countries, particularly Iran, Syria and Turkey, shouldered crucial responsibility for easing tensions in northern Iraq. 6979 !GCAT !GDIP !GVIO Turkish Foreign Minister Tansu Ciller on Sunday called for the immediate withdrawal of Iraqi government forces from the main Kurdish city of Arbil in northern Iraq. "(Iraqi President) Saddam (Hussein) must withdraw immediately," Ciller was quoted by the Anatolian news agency as saying. "It is imperative for peace that Saddam ends the attack it has mounted with the (Massoud) Barzani forces around Arbil." "Turkey is in the side of peace," Ciller said. "It prefers that all the powers in the region resolve their problems through dialogue and not through fighting." She said Ankara was in close contact with the United States, Iraq and Iran over the attack on Arbil. Ciller said that Turkey had received no request from the United States to use the base in Incirlik in southern Turkey where U.S. jets patrolling northern Iraq to protect the Kurds are stationed. Ankara did not see the matter as going that far, she said. Iraqi troops backed by armour and artillery intervened on Saturday in inter-Kurdish fighting in northern Iraq on the side of Barzani, leader of the Kurdistan Democratic Party, to recapture Arbil from Jalal Talabani of the Patriotic Union of Kurdistan. Iraq said on Sunday it would withdraw its troops, but Washington expressed scepticism about the pledge. Turkey sided with the allies in the 1991 Gulf War against its neighbour and trade partner Iraq, but it has also been wary of Kurdish autonomy in northern Iraq and fears the authority gap and fighting there enables Turkey's own Kurdish separatist rebels to operate in the region. "Turkey will not allow its security and economic concerns in the region and on its borders to be compromised," Ciller said, adding that Turkey's policy on Iraq was unchanged. "It is not right for an independent state to be formed in northern Iraq -- we will not allow it. On this vein, Iraq's territorial integrity and its sovereignty are vital conditions for Turkey." Turkey's new Islamist-led government has recently made overtures of reconciliation to its valued trade partner Iraq, proposing that it attend meetings of regional powers. But Iran and Syria, also approached by Turkey, were cool on the idea of Iraq joining in. 6980 !GCAT !GDIP !GVIO Iraq warned the United States on Sunday to keep out of its Kurdish north, where Iraqi forces have moved in to help a Kurdish faction, and threatened to turn the area into another Vietnam if Washington intervened. "The Iraqi people, in the forefront Iraqi Kurds, are ready to provide an example that will inevitably remind the Americans of the Vietnam complex," the government newspaper al-Jumhouriya declared in a front-page editorial. "Beware of the wrath of Iraqi Kurds...They should not believe that what happened can be controlled by force," it said. A short time later, a United Nations source in Baghdad said the Kurdish stronghold of Sulaimaniya, the last remaining major Iraqi city held by Kurdish rebel Jalal Talabani, was the target of artillery fire early on Sunday morning. "According to our reports there has been shelling in Sulaimaniya but we cannot determine where it came from," the source told Reuters. Iraqi troops backed by armour and artillery intervened on Saturday on the side of Massoud Barzani, leader of the Kurdistan Democratic Party (KDP), to recapture the Kurdish stronghold of Arbil from Jalal Talabani of the Patriotic Union of Kurdistan (PUK). Iraq said on Sunday it would withdraw its troops, but Washington expressed scepticism about the pledge. The Iraqi thrust into Arbil was the first in the area since Washington and its Western allies set up the air umbrella. It prompted the United States, Iraqi President Saddam Hussein's Gulf War foe, to put its forces in the Middle East on high alert and posed a difficult challenge to U.S. President Bill Clinton in the middle of the American election campaign. Unlike Arbil, Sulaimaniya is outside the air exclusion zone Western allies imposed on northern Iraq after the 1991 Gulf War to protect Iraqi Kurds against military attacks by Baghdad. The U.N. source said he was not aware of any casualties and U.N. guards and relief personnel in Sulaimaniya could not determine the source of artillery fire. Clinton, speaking during a bus tour of the U.S. Midwest, said the developments caused him "grave concern". "I have placed our forces in the region on high alert and they are now being reinforced," he said. Announcing Iraq's intention to pull back from Arbil, an Iraqi government spokesman said: "In accordance with the plan agreed upon to extend aid and support for Mr Massoud Barzani and his comrades in their resistance to Iranian aggression...our troops will return to former positions in a very short period." He said Iraq decided to withdraw "because the political leadership has not decided yet to resume the government administration of the (Kurdish) autonomous region". The Iraqi news agency INA said the spokesman issued his statement after a meeting of the Revolutionary Command Council (RCC) and leaders of the ruling Baath party chaired by Saddam. At the United Nations, Iraq's deputy U.N. ambassador said Baghdad's decision to withdraw was "clear cut" and would be implemented shortly. In an interview with Reuters Television late on Saturday, Dr Saeed Hasan also warned Iran not to interfere in the affairs of the Kurdish North but said Baghdad would not reassert its control over these areas at this time. He dismissed suggestions the military action would affect a limited oil sales deal between Iraq and the U.N., saying, "since this is a limited operation and has already been finished and achieved, I don't think it has an impact on the oil-for-food (deal)." A U.N. relief official in Baghdad said on Sunday: "(Iraqi) government forces and KDP are patrolling Arbil. The situation seems to have calmed down. We have no more reports of fighting in the city." Arbil is 20 km (12 miles) north of the 36th parallel, the line that allied forces had barred Iraqi troops from crossing since soon after the Gulf War. U.S., British and French planes based in Turkey enforce a no-fly zone above the 36th parallel. U.S. defence officials in Washington said more than 300 U.S. planes and 20 warships were immediately available if Clinton should order the use of U.S. force in the crisis. On Saturday, Arbil residents reported heavy casualties from shelling and said terrified civilians were fleeing. But in Ankara, the Turkish capital, KDP representative Faik Nerweyi said: "The casualties have been minimal and if the people keep quiet there, normal life will commence tomorrow." U.N. sources said about 12,000 Iraqi troops helped the KDP to capture Arbil, a PUK stronghold since fighting in 1994 between rival factions in the city, which once had a population of some 800,000. The two Kurdish factions, split along political and tribal lines, have a long history of bloodshed and shifting alliances with the main powers in the region -- Iraq and Iran. Nerweyi said Iran, which fought an eight-year war with Iraq in the 1980s, sent troops into northern Iraq in response to the attack on Arbil. "They entered this morning. They have occupied the area to the depth of 40 km (25 miles). They have established a headquarters in Chuman," he told Reuters. Chuman is on the main highway leading to Arbil from the Iranian border, some 90 km (55 miles) northeast of the city as the crow flies but further by the winding, mountainous road. 6981 !GCAT !GDIP !GVIO The Kurdish stronghold of Sulaimaniya, the last remaining major Iraqi city held by Kurdish rebel Jalal Talabani, was the target of artillery fire early on Sunday morning, a U.N. source in Baghdad said. "According to our reports there has been shelling in Sulaimaniya but we cannot determine where it came from," the source told Reuters. Unlike Arbil, now under the control of a combined force of Iraqi troops and Massoud Barzani's rebels, Sulaimaniya is outside the air-exclusion zone Western allies imposed on northern Iraq after the 1991 Gulf War to protect Iraqi Kurds against military attacks by Baghdad. The source said he was not aware of any casualties in the city and U.N. guards and relief personnel in Sulaimaniya could not determine the source of artillery fire directed against the city. Iraq warned the United States on Sunday to keep out of its Kurdish north, vowing to turn the area into another Vietnam if Washington intervened. Iraq's official press also warned neighbouring Iran, which Baghdad accuses of siding with Talabani, not to meddle in the affairs of its ethnic Kurds. 6982 !GCAT !GPOL Israeli Prime Minister Benjamin Netanyahu, facing threats of a renewed Palestinian uprising, gave on Sunday his strongest indication so far he would soon hold talks with Palestinian leader Yasser Arafat. Asked about Israeli media reports he would meet Arafat this week, Netanyahu told Army Radio: "I have said that when the developments allow, we would announce the meeting -- and indeed, there are all sorts of developments." He did not elaborate. Foreign Minister David Levy said preparations for talks between Netanyahu and the Palestinian president were under way. "I hope so," Levy replied, when asked on Israel Radio if the meeting would be this week. "But I am not the one who decides for the prime minister." Levy spoke before leaving for Egypt for talks with its president, Hosni Mubarak, on relations between Israel and the PLO which have dropped in the past week to their lowest point since the right-wing Netanyahu was elected last May. "One of our options is to return to the intifida (uprising)," Arafat told high school students in the West Bank town of Nablus on Saturday. "You remember I described you as the generals of the stones. Keep up the spirit of resistance," he said, referring to a seven-year Palestinian uprising against Israeli rule launched in 1987 by stone-throwing youths. Arafat also called on Christian Palestinians to stage a mass prayer on Sunday at the Church of the Holy Sepulchre, the holiest Christian site in Jerusalem, to protest against Israel's plans to expand Jewish settlements. He stunned Israel on Wednesday by telling the Palestinian legislature that the Netanyahu government's policy on settlements and Jerusalem was tantamount to declaring war on the Palestinians. Arafat also triggered an Israeli security alert on Friday by calling for Moslems to converge on al-Aqsa mosque in Arab East Jerusalem for prayers. Israeli roadblocks blocked West Bank Palestinians from reaching the mosque, where only about 20,000 Moslems attended prayers, close to the number that usually congregate at the holy site on Fridays. On Saturday, a PLO official, who declined to be identified, told Reuters: "A meeting between Arafat and Netanyahu will take place very soon. No date has been set yet. There are contacts to prepare for this meeting." Netanyahu, who opposes trading occupied land for peace, had said he was in no hurry to meet Arafat but softened his line a week ago after President Ezer Weizman signalled he would see the Palestinian leader if the prime minister refused. Palestinian leaders voiced growing anger at a lack of progress towards peace in contacts with the Israelis. "The Israeli side has rejected any attempt at advancing the peace process. Its policy is to play the game of foot-dragging and stalling," said Palestinian Authority member Saeb Erekat, a leading negotiator with Israel. Representatives of the two sides were due to meet again on Sunday. Members of Netanyahu's government insist the talks are moving forward. A cabinet statement last week said a ministerial committee, including Netanyahu, Levy and Defence Minister Yitzhak Mordechai, would oversee contacts with the Palestinians. Palestinians are demanding that Israel carry out a troop withdrawal from the West Bank city of Hebron agreed by the previous Labour-led government. The partial pullback from Hebron, home to 100,000 Arabs and around 400 Jewish settlers, was postponed after Islamic suicide bombings in February and March. 6983 !GCAT !GPOL !GVOTE Beirutis queued up to vote on Sunday in the third round of Lebanon's parliamentary election in which billionaire Prime Minister Rafik al-Hariri is seeking a parliamentary seat for the first time. Some 4,000 troops, some in armoured personnel carriers with helmets, flack jackets and automatic rifles, patrolled the streets as polls opened at 7.00 a.m. (0400 GMT) Squads of armed police also guarded polling stations as lines of voters formed outside. Up to 100 people lined up to vote at some polling stations in predominantly Moslem west Beirut, with crowds of candidates' supporters gathered round them. Hardline Christian opposition leaders have repeatedly called for a boycott of the election, saying there is no possibility of a free and fair vote, but many voters appear to have ignored the calls in the first two rounds of voting. Some 377,000 Beirutis are registered to vote for 19 deputies to Lebanon's 128-member parliament. Mount Lebanon, the Christian heartland, and north Lebanon voted on the previous two Sundays and south Lebanon and the eastern Bekaa valley will vote on the next two Sundays. Hariri, who hopes to make a strong showing by leading a list of 16 supporting candidates into parliament, faces a challenge from former prime minister Selim al-Hoss at the head of a 13-man list. Both Hariri, who has gained popularity thanks to the achievements of his multi-billion dollars national reconstruction drive, and Hoss are expected to win seats. But they are locked in a battle to get as many of their supporters into parliament as possible. Christian deputy Najah Wakim, a sworn foe of Hariri who has gained popularity with fierce attacks in parliament on alleged government corruption, leads another list of eight candidates challenging Hariri. He has formed an unwritten accord with Hoss to back each other to try to beat Hariri's rich and powerful electoral machine. Hoss has also done a deal with the pro-Iranian Hizbollah (Party of God) to swap votes in the capital. Some opposition candidates and an independent monitoring group complained of widespread electoral abuses by officials and supporters of the pro-Syrian government in the first two rounds of the election. Hoss, Wakim and the Lebanese Association for Democracy of Elections (LADE) -- Lebanon's only independent electoral watchdog -- have warned against further abuses during the Beirut vote. 6984 !GCAT !GPOL !GVOTE Allegations of bribery soured voting in Beirut in the third stage of Lebanon's parliamentary elections in which billionaire Prime Minister Rafik al-Hariri hoped to win an overwhelming endorsement. Witnesses said they saw Hairi representatives bribing voters during Sunday's polling in the capital. Hariri's office accused supporters of rival candidates of making the payments. The charges were the latest in a series of complaints about electoral malpractices during the month-long elections, which are being held in five regions on five successive Sundays. Interior Ministry officials said about 30 percent of Beirut's 377,000-strong electorate voted to choose 19 deputies for the 128-seat parliament. Results were expected on Monday. Hariri, who has been in power since late 1992 and was standing for parliament for the first time, headed a 17-man list of candidates against a 13-member list led by ex-premier Selim Hoss, a well-respected non-partisan politician. Both men were expected to win easily, but it was unclear how many of the candidates on their rival lists would also be elected. Najah Wakim, a firebrand Christian deputy and a sworn foe of Hariri, headed a separate eight-man list. Hariri, a 51-year-old tycoon. who won popularity by spearheading Lebanon's reconstruction drive after the 1975-90 civil war, rolled out a powerful election machine in his efforts to secure a wide electoral base. The bribery allegations followed charges of widespread electoral malpractices during the earlier voting in Mount Lebanon and north Lebanon. People in south Lebanon and the eastern Bekaa valley have yet to vote. Dozens of voters at a Hariri election office in Beirut told a Reuters reporter they were paid or promised 100,000 Lebanese pounds ($64) each after they swore on the Koran, Islam's holy book, to vote for the prime minister. The reporter saw Hariri representatives hand out money to a man at the head of a crowd of voters demanding payments for voting for Hariri. The handouts ended abruptly when a dozen Lebanese soldiers arrived, told the crowd to disperse and seized the cameras of television reporters filming the event. Hariri's office denied any involvement in bribery, saying supporters of other candidates were posing as Hariri's representatives and paying voters. Paul Salem , head of the Lebanese Association for Democracy of Elections (LADE), an independent watchdog, said there were hundreds of electoral malpractices during the Beirut voting. But he said the abuses were not as bad as in polling in Mount Lebanon or north Lebanon when pro-government candidates swept aside all but three opposition candidates. Salem and opposition candidates said electoral lists were manipulated on Sunday, opposition delegates were barred from monitoring the vote at some stations and the Interior Ministry illegally gave stamped voting envelopes to Hariri's campaign team. Interior Minister Michel el-Murr said judicial authorities were investigating the allegations concerning the envelopes. 6985 !GCAT !GDEF !GPOL !GVIO Iraqi President Saddam Hussein ordered his forces to withdraw from northern Iraq after two days of fighting in support of one Kurdish rebel faction against a rival guerrilla group. Iraq's state-run television said Saddam gave the order to his defence minister at a cabinet meeting late on Sunday. It gave no timetable for a withdrawal. U.N. Secretary-General Boutros Boutros-Ghali, saying he was "very much concerned about the deterioration of the situation in northern Iraq," announced that he was delaying implementation of an oil-for-food deal with Baghdad. The plan would allow Iraq to sell $2 billion of oil over six months to buy humanitarian supplies for people suffering under sanctions imposed after Iraqi troops invaded Kuwait in 1990. Oil had been expected to start flowing onto world markets in September. A U.N. statement issued later in New York said Iraqi Deputy Prime Minister Tareq Aziz told Boutros-Ghali on Sunday that Iraqi troops had received orders to pull out of northern Iraq. Iraqi troops supporting the Kurdish Democratic Party (KDP) captured main Kurdish city of Arbil from rival forces of the Patriotic Union of Kurdistan (PUK) on Saturday and hoisted the Iraqi flag over what used to be the Kurdish parliament. Fighting between the two Kurdish factions -- long-time rivals who have shifted alliances between Iraq and Iran -- flared in mid-August despite U.S. efforts to broker a ceasefire. PUK leader Jalal Talabani said Iraqi aircraft bombed its forces near Arbil on Sunday in contravention of a "no-fly zone" imposed over northern Iraq by the United States and its allies after the 1991 Gulf War. U.S. officials denied there had been Iraqi air strikes. President Bill Clinton has placed U.S. forces in the region on high alert and spoke by telephone to several world leaders, including British Prime Minister John Major and Saudi Arabia's King Fahd, about the crisis. "I am not drawing lines in the sand, that is not the purpose of the consultations we have under way," White House spokesman Mike McCurry told reporters. "There is no justification for the military action Saddam Hussein has taken...The United States believes that he cannot conduct himself with impunity, that there should be consequences." Iraq warned the United States to stay out. "The Iraqi people, in the forefront Iraqi Kurds, are ready to provide an example that will inevitably remind the Americans of the Vietnam complex," the government newspaper al-Jumhouriya said in a front-page editorial. U.S. officials said General John Shalikashvili, chairman of the joint chiefs of staff, and Assistant Secretary of State John Pelletreau were in Saudi Arabia for diplomatic discussions, Washington said U.N. Security Council resolutions approved after the Gulf War provided the legal basis for responding to Iraq's offensive, though officials admitted that Saddam had the right to move troops around within that part of his own country. Arbil was not in a zone placed off-limits to Iraqi troops by the United Nations after the Gulf War to protect the Kurds. But U.S. officials said it was within the "no-fly zone" and U.N. resolutions broadly protecting Kurds against repression applied. A senior member of the KDP, Sami Abderrahman, said the faction's fighters received arms and ammunition from Iraq but he denied that Iraqi forces took part in the battle for Arbil. "The fighting yesterday in Arbil was all done by our peshmerga (fighters). We got military support from Iraq, which was confined to arms and ammunition," he told reporters in Salahuddin in northern Iraq. Abderrahman also said the KDP looked to Baghdad for support after the PUK started to get backing from Iran -- an allegation denied by Iran. Talabani told BBC radio that the region could split into pro-Iraq and pro-Iran camps and dropped a broad hint that his group would look to Tehran for support if Washington and its allies did not respond to Saddam's intervention. 6986 !GCAT !GCRIM !GPOL A Israeli cabinet minister said on Sunday there may soon be an announcement about whether the Jewish state will free Sheikh Ahmed Yassin, wheelchair-bound founder of the militant Islamic Hamas organisation. Internal Security Minister Avigdor Kahalani, asked if Israel planned to release the ailing cleric, said late on Sunday: "I think you'll soon hear tidings on this subject." Yassin, 60, is serving a life sentence for ordering attacks by Hamas militants against Israeli targets. Though jailed since 1989, he remains the spiritual leader of Hamas, whose guerrillas have killed scores of Israelis in suicide attacks aimed at foiling PLO peace deals with the Jewish state. Responding to a reporter's suggestion Yassin's release might be announced as part of an expected meeting in the near future between Prime Minister Benjamin Netanyahu and Palestinian President Yasser Arafat, Kahalani said: "If I were the prime minister, I would say different things, at the moment I am only internal security minister, and, as such, I assume that soon you will hear a more orderly announcement on the matter." He declined to elaborate. Arafat has repeatedly demanded Yassin be released on humanitarian grounds. In July, following the recovery of the body of Ilan Saadon, an Israeli soldier kidnapped by Hamas seven years ago, Israel said it would consider freeing Yassin. An Israeli military court convicted and sentenced Yassin for ordering the kidnap and killing of Saadon and another soldier. Saadon's body was recovered with the aid of information supplied by Arafat's Palestinian Authority. 6987 !GCAT !GDIP !GVIO Iran on Sunday blamed its declared enemy the United States for the fighting in northern Iraq and denied that Tehran was backing either of the rival Kurdish groups. "The clashes in northern Iraq are not the fruits of Iran's intervention but those of Washington's secret attempts to block Iran's diplomatic effort in northern Iraq," state television said in a commentary. Earlier on Sunday Iran's parliament speaker Ali Akbar Nateq- Nouri said the Iraqi attack on the city of Arbil on Saturday could not have taken place without Washington's consent. The television, monitored by the British Broadcasting Corporation (BBC), said: "America is worried that Iran's attempts to bring about peace in northern Iraq would weaken America's position in that area. "Now (Washington's) interests lie in allowing yesterday's oppressors (Iraqi President Saddam Hussein) to once again have free access, albeit for a short while, to that region." It denied Iranian involvement in the fighting and said Tehran's mediation efforts between the rival Kurdish factions were seen by the United States as "taking sides". U.S.-mediated peace talks between the two Kurdish factions broke down in London last week. A U.S.-negotiated ceasefire between the KDP and PUk collapsed. Iraqi troops backed by armour and artillery intervened on Saturday on the side of the Kurdistan Democratic Party (KDP) to recapture the Kurdish stronghold of Arbil from the rival Patriotic Union of Kurdistan (PUK). Faik Nerweyi of the KDP earlier told Reuters by telephone from Ankara that Iranian forces had occupied an area of northern Iraq close to the Iranian border to a depth of 40 km (25 miles) and set up a headquarters. 6988 !GCAT !GPOL Palestinian President Yasser Arafat said on Sunday Israel has been spying on his forces in the self-ruled Gaza Strip and Palestinian sources said wiretaps had been secreted in the heart of Gaza's military headquarters. The wiretapping equipment was rigged to self-destruct if discovered, and a telephone maintenance worker and a Palestinian policement were hurt when the devices exploded, Palestinian sources said. The spy story was the latest in a series of incidents over the last week that have plunged relations between Arafat's Palestinian Authority and the government of Prime Minister Benjamin Netanyahu to their lowest point since Shimon Peres was ousted in May elections. Asked to comment on reports that Israel had spied on Palestinian security forces with telephone listening devices, Arafat told Reuters: "Yes, this is true." He declined to give details, saying the investigation was ongoing and a statement would follow. The devices are believed to have been installed prior to the PLO's assumption of control of the Gaza Strip in 1994 in a peace deal with Israel. They have been operational throughout the self-rule period, the sources said. They said the first of the devices was uncovered by chance last month. A Palestinian telephone serviceman working on communications cables near the military headquarters discovered the wiretap equipment, which exploded when touched and injured him lightly. Last week a second device was discovered in a courtyard in the heart of the complex, which served as Israeli army headquarters in Gaza during the Jewish state's 27-year occupation of the strip captured in the 1967 war. A Palestinian sapper sustained moderate injuries when the second device exploded as he inspected it, the sources said. The Israeli army had no immediate comment on the report. 6989 !GCAT !GPOL !GVIO Iraqi President Saddam Hussein has ordered that the armed forces should pull back from areas captured during an operation in Iraq's Kurdish north, state-run television said reporting a cabinet meeting held late on Sunday. "The Defence Minister told the conferees that President Saddam Hussein, Commander-in-Chief of the armed forces, has issued orders to him to return Iraqi units to their former positions," the television said, quoting Gen. Sultan Hashim Ahmed. 6990 !GCAT !GPOL Libyan leader Muammar Gaddafi celebrated 27 years in power on Sunday as dozens of jet fighters roared overhead and hundreds of his revolutionary "Green Guards" shouted defiance against Western-led sanctions. Gaddafi, 54, led a group of young army officers who seized power from King Mohammed Idris on September 1, 1969. The Libyan leader attended half of a four-hour parade along Tripoli's seafront, flanked by three African presidents, U.S. Nation of Islam leader Louis Farrakhan and several ministers from Arab and African countries. The parade began with jet fighters performing air-loops and dozens of Soviet-made MIG fighters and French Mirages flying in formation to applause from crowds of Libyans. Guests of Gaddafi's celebrations did not enjoy the same freedom in the sky. They had to travel to Libya by land or sea because of U.N. sanctions imposed on the country for its refusal to hand over to Britain or the United States two Libyan suspects in the bombing of a Pan Am airliner over Scotland in 1988. The sanctions include an air and arms blockade and the freezing of Libyan assets abroad. "We will give our lives to you, our leader, we are your guards," shouted young men wearing army fatigues and green head-dresses. "Increase your challenge, increase your challenge and stop the sanctions! Stamp out the infidel enemy with your true revolution," the men from the Commando Unit of the "Green Guard of the Revolution" added. Thousands of cadets from the "armed people", who replaced the regular Libyan army in 1989, shouted "Victory, strength and will!" as they ran past Gaddafi holding their rifles. The Libyan leader, wearing an army uniform and sunglasses, smiled and saluted. Gaddafi did not speak at the parade but vowed on Saturday never to surrender to U.S. pressure, saying a huge man-made river project showed his country was concerned with development and peace. "This the biggest answer to America and all the evil forces who accuse us of being concerned with terrorism. We are only concerned with peace and progress. America is against life and progress. It pushes the world towards darkness," Gaddafi said at the inauguration of a new phase of his "great man-made river" project. The huge scheme pumps water from the south of the country to the Mediterranean coast. "Just becasue someone refuses hegemony and colonialism doesn't mean he wants war. We want peace but we refuse to surrender. America present propaganda. We present clear action to the world," Gaddafi said. 6991 !GCAT !GDIP U.S. President Bill Clinton on Sunday telephoned Saudi Arabian King Fahd to discuss latest world developments, Saudi television reported. It said Clinton and the Saudi monarch "discussed regional, Arab and world developments" but the television made no reference to Baghdad's military offensive in northern Iraq. The television said the two close allies also discussed bilateral ties and "eagerness to further boost relations." Saudi Arabia, the launch pad for the 1991 Gulf War to force Iraq out of Kuwait, and other Gulf Arab allies have so far remained silent on the campaign in Iraq's Kurdish north. Some 5,000 U.S. forces and warplanes are based in the conservative kingdom as part of the enforcement of no-fly zones in northern and southern Iraq. Clinton has placed U.S. forces in the region on high alert. Saudi Arabia boasts the region's most advanced airforce, with a sophisticated military infrastructure and bases capable of hosting and maintaining a large visitng force. Like other Arab states Riyadh has repeatedly expressed its opposition to the division of Iraq into three states including a Kurdish one in the north and a Moslem Shi'ite one in the south. 6992 !GCAT !GVIO A column of Iraqi T-72 tanks was on the march on Sunday deeper into rebel Kurdish territory and apparently was headed for the stronghold of Sulaimaniya, Iraqi opposition forces said, citing latest reports from the region. "There is no withdrawal. This is an Iraqi invasion of Iraqi Kurdistan," a spokesman for the umbrella opposition Iraqi National Congress (INC) told Reuters from London. "These are Iraqi tanks, with Iraqi soldiers," the INC spokesman said. "This is not inter-Kurdish fighting." He said the tanks' objective appeared to be Sulaimaniya, centre for the Patriotic Union of Kurdistan (PUK). The column was last reported near the village of Koi Sanjaq, 60 km (40 miles) east of the main northern Iraqi city of Arbil. PUK forces were thrown back from Arbil on Saturday, after Baghdad intervened on behalf of a rival Kurdish group, the Kurdistan Democratic Party (KDP). Latest reports from Arbil, long a centre for Kurdish opposition, said Iraqi security forces were hunting down opponents for President Saddam Hussein. Ninety-six captured defectors were said by the opposition to have been executed. 6993 !GCAT !GPOL Israeli and Palestinian officials indicated on Sunday that agreement was near on a landmark face-to-face meeting between Prime Minister Benjamin Netanyahu and Palestinian President Yasser Arafat. Their remarks followed Netanyahu's strongest indication yet that the Israeli leader, facing threats of a renewed Palestinian uprising should the peace process founder, would soon hold talks with Arafat. "When the matter is agreed upon, and I hope that already today it will be settled, then within days there will be such a meeting," Israeli Foreign Minister David Levy told reporters following talks in Alexandria with Egyptian leaders. Levy and Egyptian President Hosni Mubarak discussed Israeli-Palestinian relations, which have plunged in the past week to their lowest point since Netanyahu's right-religious government was elected last May. Ahmed Tibi, an adviser to Arafat, said behind-the-scenes talks had been underway since Friday to pave the way for a Netanyahu-Arafat summit. "Last night and this morning there were prolonged contacts in one of the cities of (Israel's) coastal plain," Tibi said. "I hope that the Israeli side can improve its proposals with respect to substance, because the principle of holding the meeting has already ceased to be a problem," he told army radio. Earlier, asked about reports he would meet Arafat this week, Netanyahu told the radio: "I have said that when the developments allow, we would announce the meeting -- and indeed, there are all sorts of developments." He did not elaborate. Netanyahu, who opposes trading occupied land for peace, had said he was in no hurry to meet Arafat but softened his line a week ago after President Ezer Weizman signalled he would see the Palestinian leader if the prime minister refused. Netanyahu has angered Palestinians by rejecting Jewish settlement construction curbs declared by the centre-left governments of former prime minister Shimon Peres and his slain predecessor Yitzhak Rabin. Israel formally dismissed the PLO chief as a "terrorist" until secret talks were capped by a Rabin-Arafat handshake in a historic White House ceremony in 1993. Last week, in a move widely seen as a slap to Arafat, Israel demolished an Arab community centre it said was built illegally in East Jerusalem, just two days after the PLO leader bowed to a Netanyahu demand to close two Palestinian offices in the city. Israel views Palestinian political activity in the holy city's Arab eastern half as a challenge to the Jewish state's claims of sovereignty over the sector it captured in the 1967 Middle East war. Both sides see East Jerusalem as their capital. Arafat, going on the offensive, then stunned Israel by telling his legislature Netanyahu's policy on settlements and Jerusalem was tantamount to declaring war on the Palestinians. Arafat also sparked an Israeli security alert by urging Moslems to converge on East Jerusalem's al-Aqsa mosque for prayers on Friday, and calling on Christians to flock to Jerusalem's holiest church on Sunday, to protest at the policies of the Netanyahu government. But Israeli roadblocks blocked West Bank Palestinians from reaching the places of worship, where numbers of congregants were close to that of usual crowds of worshippers. Arafat warned Israel on Friday that Israel had other options if the Jewish state did not honour its agreements with the PLO, citing resumption of the intifada, the Palestinian uprising that began in late 1987. Palestinians are demanding that Israel carry out a troop withdrawal from the West Bank city of Hebron agreed by the previous Labour-led government. The partial pullback from Hebron, home to 100,000 Arabs and around 400 Jewish settlers, was postponed after Islamic suicide bombings in February and March killed 59 people in Israel. 6994 !GCAT !GDEF !GVIO Almost 100 Iraqi defectors were executed as Baghdad's forces searched houses in the rebel northern Iraqi city of Arbil after intervening in factional Kurdish fighting, reports from the region said on Sunday. Baghdad's forces executed 96 Iraqi defectors from President Saddam Hussein's army in a camp outside Arbil, hunted opposition figures in house-to-house searches in the town, blew up their buildings and confiscated computers and files, opposition and Iraqi Kurdish officials said. Panicked residents, meanwhile, fled Iraqi aircraft and artillery strikes on Kurdish towns, one close to Arbil, the officials said. "Ninety-six soldiers and officers were executed...in full view of the residents of Qushtapa," 22 km (15 miles) south of Arbil, an Iraqi National Congress (INC) spokesman said. "They were actually executed after capture as a kind of warning," the spokesman told Reuters from London, citing what he said were "several" witness accounts of the killings. All were former Iraqi troops who had joined the INC umbrella opposition. The Patriotic Union of Kurdistan (PUK), the Kurdish faction that held Arbil until an Iraqi-backed rival group attacked on Saturday, said Baghdad's soldiers were going from house to house, seeking out opposition forces in Arbil. "The Iraqi troops, the republican guards are in Arbil. They are searching houses," PUK London representative Latif Rashid told Reuters from London. "All opposition buildings were exploded," PUK leader Jalal Talabani told CNN television. He said Saddam was keeping a large number of tanks and armoured cars in Arbil. The INC spokesman said 32 opposition troops escaped the Iraqi assault on the Quashtapa camp late on Saturday, fleeing after resisting. The camp's commanding officer was wounded and was taken off by an Iraqi helicopter, he said. Arbil, the administrative centre of the autonomous Kurdish regions in northern Iraq, has been a large centre for opposition to Saddam. Defectors from Saddam's army often flee there and train in the area to fight him. Talabani said his forces had withdrawn on Saturday night from Arbil, which they captured in fighting in December 1994, but were still fighting Iraqi troops east of the town. On Sunday, Iraqi aircraft attacked Bustaneh, a town 20 km (14 miles) east of Arbil, and Iraqi artillery shelled the town of Kifri at the southern tip of the Kurdish enclave, the INC said. But the Kurdistan Democratic Party (KDP), which with Iraqi forces assaulted Arbil, said the city was calm. "In Arbil the situation is calm and quiet. The administration is working normally -- the city is under full control of the KDP," Faik Nerweyi, a spokesman for the group in Ankara, told Reuters. "We have asked people to report to work as normal today." Nerweyi said the PUK's control of Arbil -- seat of the Iraqi Kurdish administration -- and its refusal to demilitarise and share the area forced the KDP to attack. "For two years we have been telling the PUK to get out with no success," he said. "We were forced to end one-party rule in Arbil. We are not interested in occupying our own capital city." He said his party would be interested in continuing aborted U.S.-sponsored peace talks with the PUK in London, and that all chance of peace depended on the PUK. The PUK's Rashid said the prospects for the resumption of the peace talks in the circumstances were extremely slim. 6995 !GCAT !GPOL Iran's parliament speaker on Sunday expressed opposition to suggestions that the constitution should be amended to allow President Akbar Hashemi Rafsanjani to run for a third term in office. The "constitution should not be changed as a matter of course and, if we were to call the constitution into question on the slightest pretext, this would be tantamount to weakening the constitution and this is not a good idea", speaker Ali Akbar Nateq-Nouri, was quoted by Iran's IRNA news agency as saying. His remarks follow a call by a leading parliamentarian for the removal of legal barriers blocking Rafsanjani's re-election. "To do this would mean that there are no other (suitable) forces...and this is a shame...The president himself has agreed that this would not be a correct thing to do and he has declared his opposition to the idea," Nateq-Nouri said. On Saturday Abdullah Nuri was quoted by Hamshahri newspaper as saying: "We should not tie our hands by referring to the constitution's legal barrier against Rafsanjani's third term." Rafsanjani's second four-year term ends in August 1997. The consitution bars three consecutive terms and Rafsanjani has repeatedly stressed his unwillingness to seek a third term by changing the constitution "for the sake of one person". But Nuri, leader of parliament's radical-centrist coalition, said the constitution could be changed by referendum. "Interests of the country call for the extension of the presidency of Rafsanjani for a third term." Nateq-Nouri, a Shi'ite Moslem cleric like Rafsanjani, replied when asked if he would run for president next year: "My answer remains the same as before. I do not intend to become a candidate unless I feel it is my religious duty and I have not felt this yet." 6996 !GCAT !GDIP !GVIO The Kurdish stronghold of Sulaimaniya is quiet and so far there is no evidence of an Iraqi advance to capture the city, a senior U.N. official said on Sunday. "Nothing right now is happening in the city. It is still under PUK control," the official, speaking to Reuters on condition of anonymity, said. He said U.N. staff and guards have not detected any troops approaching the city. "There was some shelling in the morning but still we have not determined its source," he said. Sulaimaniya is the last remaining major Iraqi city held by Kurdish rebel leader Jalal Talabani of the Patriotic Union of Kurdistan (PUK). Iraqi troops, backed by heavy armour and artillery and forces of Kurdish rebel leader Massoud Barzani of the Kurdistan Democratic Party (KDP), captured Arbil on Saturday. The U.N. official said Iraqi troops, reinforced in the past few weeks, were holding positions outside Jemjal, a sizeable Kurdish town almost half way between Kirkuk and Sulaimaniya. Sulaimaniya is 109 km (68 miles) east of Kirkuk. The Iraqi News Agency (INA), quoting travellers arriving in Kirkuk from Sulaimaniya, said on Sunday the city had not been shelled since the start of military operations in and around Arbil. Talabani, in a French radio interview, denied an earlier report by a U.N. source in Baghdad that Iraqi forces had shelled Sulaimaniya. "Areas some 15 kms from the city were under heavy shelling but not the city itself...The road to Sulaimaniya is mountainous and the city and the area are liberated and under the strong hold of PUK forces," he said. "I am expecting that (Iraqi President) Saddam Hussein and Massoud Barzani will try to attack but it will be very difficult for them. It is not like Arbil which was surrounded by Iraqi forces," Talabani said. Unlike Arbil, Sulaimaniya is outside the air-exclusion zone Western allies imposed on northern Iraq after the 1991 Gulf War to protect Iraqi Kurds against military attacks by Baghdad. 6997 !GCAT !GPOL !GVOTE Kuwait's government on Sunday announced parliamentary polls would be held on October 7 in the second race since the 1991 Gulf War for the only elected legislature on the Arab side of the Gulf. A cabinet statement said four ministers who are also elected MPs offered to resign in compliance with a law barring civil servants and ministers from standing for parliament. "The cabinet approved a decree proposal to call voters for the eighth National Assembly's elections on Monday...October 7, 1996," it said. The election date and resignations must be approved by the emir, Sheikh Jaber al-Ahmad al-Sabah. The fortunes of the 50-seat chamber are watched closely around the Gulf by liberals who see it as a potential model for other states in the region in generations to come. Commentators say the government headed by the ruling Sabah family is working hard to wrest control of the chamber from liberal and Islamist opposition MPs who have scored stinging attacks on official policy since the last elections in 1992. The opposition has secured more parliamentary control over state finances, passed laws expanding government accountability and campaigned for more elected MPs serving in the government headed by Prime Minister Sheikh Saad al-Abdulla al-Sabah. It has also used the assembly to criticise Kuwaiti leaders for alleged failings in the 1980s and in 1990, notably the crisis with Iraq that culminated in Baghdad's 1990 invasion. Whatever the outcome of the all-male elections the prime minister is by tradition a member of the Sabah, but his cabinet choice usually reflects the assembly's political complexion. The ministers seeking re-election are Oil Minister Abdul-Mohsen al-Mudej, Minister of Education and Higher Education Ahmad Abdullah al-Rubai, Minister of Justice and Adminstrative Affairs Mishari al-Anjari and Minister of Social Affairs Ahmad Khaled al-Kulaib. The cabinet statement did not say who will take over their duties until a new cabinet is formed after the elections. So far 231 people have announced their intention to run. Two members are elected from each of 25 constituencies. Political parties are banned but the authorities tolerate a range of political groups that act much as parties at election time. There are some 107,000 listed voters from the native population of almost 700,000. Kuwait allows civilian males born to Kuwaiti fathers to vote. Military personnel, policemen, women, naturalised Kuwaitis and foreign residents cannot vote. 6998 !GCAT !GDIP !GVIO An Iraqi Shi'ite Moslem opposition leader on Sunday condemned an Iraqi attack on Arbil, the Kurdish stronghold in northern Iraq, and urged the United Nations to oust Baghdad forces from the Kurdish area. Ayatullah Mohammed Taki Mudarisi, head of the Islamic Action group, said in a statement in Damascus the regime of Iraqi President Saddam Hussein "will always be a source of tension and anxiety for the Iraqis and peoples of the region". "Northern iraq should be kept as a safe haven for the Kurdish people according to the decisions implemented after the (1991) Gulf War, and the Security Council should take the initiative to oust the forces of Saddam from this region," Mudarisi said. Iraqi troops and tanks supporting Kurdish rebel faction of Masoud Barzani stormed Arbil on Saturday, ousting rival rebel faction of Jalal Talabani. Iraq has announced it would withdraw its forces from the region which the United States, Britain and France declared an exclusion zone shortly after the 1991 Gulf War. 6999 !GCAT !GVIO Iraqi jets and heavy weapons attacked two Kurdish towns as fighting continued into a second day in northern Iraq on Sunday, an opposition Iraqi National Congress (INC) spokesman told Reuters from London. "Iraqi...aircraft are currently attacking the town of Bustaneh, near Arbil. I just spoke to someone there," the spokesman said. "The town of Kifri has been shelled and evacuated by its residents. The Iraqis are attacking." No casualty figures were available, the INC spokesman said. He said witnesses speaking by satellite telephone said Swiss-made Pilatus aircraft had started to attack Bustaneh. The town lies 20 kilometres (12 miles) east of Arbil, he said. Kifri, a town of 7,000 residents, was south of the city of Sulaimaniya. Iraqi toops and a Kurdish militia took the main Iraqi Kurdish city of Arbil and expelled forces of a rival Iraqi Kurdish faction after fierce fighting on Saturday. 7000 !GCAT !GDIP Egypt and Israel on Sunday agreed on the importance of pushing forward the Middle East peace process, seriously hit by Israeli settlement policies in the occupied West Bank. "We agreed on the importance of continuing the peace process in the whole area," visiting Israeli Foreign Minister David Levy said. Levy arrived earlier to hold talks with President Hosni Mubarak to try to defuse the tensions provoked by Israel's new policy of expanding Jewish settlements, halted under former prime minister Shimon Peres. But Levy hinted that such a policy would continue. "We emphasise that in the Oslo agreement there is no ban of settlements...in an unequivocal way," Levy told a press conference in the Egyptian Mediterranean city of Alexandria. "Nevertheless, we do not conifscate land and we do not build new settlements...," he added. "Minister Levy showed Israeli desire to continue the peace process with emphasis on implementing what has been agreed upon," Egyptian Foreign Minister Amr Moussa, told the joint news conference. "But in the absence of implementation, it will be a serious situation," Moussa added. Israeli Prime Minister Benjamin Netanyahu, facing threats of a renewed Palestinian uprising, on Sunday gave his strongest indication so far he would soon hold talks with Yasser Arafat. Moussa said the talks between Mubarak and Levy were excellent but needed to be strengthened by practical steps. He added: "The implementation is the important and principal matter which can push the peace process forward." Asked about the Israeli-Palestinian talks, Levy said he expected tangible progress. "I hope...they will lead to an agreeement between the representatives of the government of Israel and the Palestenian National Authority. I am certain that in the flollowing days there will be tangible progress," he added. Asked about the Middle East and North Africa economic summit, which Mubarak linked to progress in the peace process, Moussa said the Egyptian position had not changed. "Our position on the economic summit continues as expressed last week by President Mubarak... For the summit to take place it has to convene in a suitable and conducive atmosphere," Moussa said. "It must be in the context of progress toward peace." Citing Israeli reluctance to redeploy its troops from Hebron as an obstacle to holding the summit in Cairo in mid-November, Moussa said: "I cannot imagine that the economic summit would take place when withdrawal from Hebron has not happened yet." PLO officials have accused Israel of trying to back out of deals reached with the former government of Peres, particularly the agreed Israeli troop redeployment in the West Bank city of Hebron. 7001 !GCAT !GDEF !GPOL !GVIO Baghdad's forces overran an opposition camp near the city of Arbil and executed 96 former Iraqi soldiers who had defected to fight against President Saddam Hussein, an opposition spokesman said on Sunday. "Ninety-six soldiers and officers were executed...in full view of the residents of Qushtapa," 22 km (15 miles) south of Arbil, the spokesman for the Iraqi National Congress (INC) told Reuters from London. "They were actually executed after capture as a kind of warning," the spokesman said, citing what he said were "several" witness accounts of the killings. All were former Iraqi troops who had gone over to the INC umbrella opposition. He said that special intelligence units, armed with lists of names, were hunting opposition figures in Arbil, which fell to Iraqi forces backing the Kurdistan Democratic Party, one of the two main Kurdish factions. The combined forces took the city, the region's administrative centre, after fierce fighting on Saturday and expelled forces of the rival Patriotic Union of Kurdistan. 7002 !GCAT !GPOL !GVOTE Dozens of Beirut voters said on Sunday they had been paid or promised 100,000 Lebanese pounds ($64) each for voting for billionaire Prime Minister Rafik al-Hariri in Lebanon's parliamentary election. They told a Reuters reporter they were promised the money by Hariri election representatives after they agreed to swear on the Koran, the Moslem holy book, to go and vote for Hariri. The voters were among more than 200 people the reporter saw queuing outside a petrol station in the Tarek al-Jdeideh district of west Beirut which was plastered with Hariri election posters and marked as Hariri's election office number 19. They told Reuters they had sworn on the Koran as requested, and their identity documents had been stamped at the election office with the letters q and b, apparently representing the Arabic word "qabd" -- to be paid. They then went to vote and had returned to the office where they were told to wait until the money arrived. As the voters spoke to the reporter a cry suddenly went up: "The money came. The money came," and the crowd surged forward into the election office. Several people brandished up to 10 identity documents, demanding payment for each of them as they rushed forward. The Reuters reporter saw a man at the head of the queue hand over his identity document to Hariri officials in the management office of the petrol station, who apparently checked that it had been stamped after he swore on the Koran. The reporter then saw the man receive 100,000 pounds but he refused to give Reuters his name as he left. A few minutes later camera crews from two private Lebanese television stations and Reuters Television arrived and began filming. They were followed in minutes by a dozen Lebanese army soldiers in an armoured personnel carrier who leaped out and ordered people to leave and seized the television cameras and the camera of Reuters photographer Jamal Saidi. An officer told the journalists the cameras were seized because they took pictures of the troops, which is banned in Lebanon. It was not immediately possible to contact members of Hariri's campaign team for comment. Stories of voter bribery in Lebanese elections are not rare. The price of a vote in Beirut during the last parliamentary elections in 1992 is said to have been $50. Opposition candidate Issam Naaman told the private Beirut television station LBC on Sunday that "a rich candidate" was handing out $100 each to voters at Tarek al-Jdeideh and another election office in Beirut. Um Bassam, a woman in her 40s, told Reuters that young men from the Hariri office had knocked on the door of her home nearby to offer her money. "They told me to come and swear to vote for Hariri and I would get 100,000 pounds. So I came and swore on the Koran and I voted for Hariri, although I had been planning to vote for (former prime minister Selim) Hoss if anyone," she said. ($=1,562.50 pounds) 7003 !GCAT !GDIP Saddam Hussein's foray into northern Iraq will encourage Gulf Arab states haunted by memories of Iraq's lightning invasion of Kuwait to maintain a hard line on Baghdad, diplomats said on Sunday. "This move will give Saudi Arabia and Kuwait ammunition. They can tell other Gulf states that gave Saddam Hussein the benefit of the doubt 'We told you so. He is not to be trusted'," said a Western diplomat in the Saudi capital Riyadh. Iraqi troops backed by armour and artillery entered the Kurdish-run north on Saturday to help a Kurdish faction in a safe haven set up by the Western allies after the 1991 Gulf War to shield the Kurds from Baghdad's forces. The move was a harsh reminder to the oil-rich Gulf Arab states that Iraq, whose 1990 invasion of Kuwait triggered security fears throughout the Gulf, was still capable of bold moves despite international isolation, the diplomats said. They said Iraq's capture of the Kurdish-controlled city of Arbil was likely to strengthen the hand of Gulf Arab states that refused to reconcile with the Iraqi president. Since the 1991 Gulf War, some Gulf Arab states have adopted a softer line on Iraq, opening up political differences in the Gulf Cooperation Council -- a military, political and economic alliance composed of Saudi Arabia, Kuwait, United Arab Emirates, Bahrain, Oman and Qatar. Kuwait and Saudi Arabia refuse any direct contact with the Iraqi leader, while Qatar and Oman both have resident Iraqi ambassadors and have received senior Iraqi ministers. A UAE official in May said Abu Dhabi would press Arab states and Western superpowers to help lift sanctions on Iraq. Last year, UAE President Sheikh Zaid bin Sultan al-Nahayan made conciliatory remarks, saying the time had come to reconcile with Baghdad. He urged the lifting of United Nations sanctions to ease the suffering of the Iraqi people. Qatar and Oman backed the call, but it raised concerns in Saudi Arabia and Kuwait who insisted on a harder line. Analysts said Baghdad's move into the north would give Saudi Arabia and Kuwait a stronger hand in pushing a tough policy against Iraq. "The Gulf states who said let bygones be bygones will be in a weaker position," said another Western diplomat. The Gulf states, like other Arab countries, fear a divided Iraq could trigger instability and undermine Baghdad's position as a regional counterweight to non-Arab Iran, diplomats said. But they said that if the United States did not react firmly to Baghdad's action, it could raise fears among Gulf states that Saddam could make other defiant moves. "I'm sure the Kuwaitis and Saudis are hoping that the Americans and the international community take strong measures," said a Western diplomat. "They don't want Saddam to feel he can do whatever he wants," he said. 7004 !GCAT !GDIP !GVIO President Saddam Hussein's decision to storm the Kurdish stronghold of Arbil shows the Iraqi leader remains unbowed by crippling trade sanctions and Western air power aimed at speeding his downfall, diplomats said on Sunday. They said six years after his invasion of Kuwait, which brought international isolation and humiliating military defeat, Saddam was still able to exploit divisions among his rivals and impose an iron rule over most of Iraq. "I don't see any sign that his control over the country has weakened," a Western diplomat said. "This operation was a clear message to the West and his own people -- he's in charge of his military and he will confront any challenge to his authority." Iraqi troops and tanks supporting the Kurdish rebel faction of Massoud Barzani took the northern city of Arbil on Saturday, raising the Iraqi flag and ending five years of fragile autonomy from Baghdad after a few hours of artillery bombardment. Baghdad later announced the army would withdraw. The United States, which has placed its troops in the Middle East on high alert, said it remained sceptical but officials played down chances of an imminent military response. Diplomats said the offer to withdraw from Arbil, which lies within a "safe haven" patrolled by U.S. jets, was one more example of Saddam's brinkmanship with the West. Iraq has not controlled its three northern provinces since Kurds rebelled against Saddam at the end of the 1991 Gulf War and the United States, Britain and France declared the area an exclusion zone and forbid Iraq to fly over it. "There are all sorts of downsides (for Saddam) if he shows signs of pushing further north. He could never control the area completely and might trigger another civilian exodus and unite the Kurdish factions again," one said. "But it's tough to move against him when he's promising to get out." Iraqi opposition figures based in Jordan, shocked by Saddam's boldness in sending troops to take Arbil, said he had highlighted once again the fragility of the Western strategy against him. "Saddam has shown up the superficial American policy on Iraq," said a former Iraqi government official who fled Baghdad three years ago. "He has split the Kurds and even if he withdraws now, he can leave (Barzani's) forces to do his work for him." Diplomats said Saddam risked losing a $2 billion food-for-oil deal agreed with the U.N. after years of wrangling. Under the deal Iraq would be able to sell the oil over six months to buy food and medicine for its population. "It's not just political goodwill he's losing, there's also a technical problem of distributing the food in northern areas if there's a shift of power," one diplomat said. But the Iraqi opposition said Saddam, who complained that the terms of the U.N. deal undermined Iraqi sovereignty, would not mourn the accord if it were not implemented. "The United States has always said Saddam was responsible for the suffering of the Iraqi people because he would not accept the deal," the former government official said. "Now he can say: We accepted it and the West refused." Saddam's move into Arbil followed reports in late July of an unsuccessful coup attempt and the execution of 25 to 30 members of his elite Republican Guards. But Baghdad's strongman, whose leadership has survived ruinous wars against Iran and the 1991 U.S.-led Western coalition as well as countless other reported coups, emerged unscathed yet again. Diplomats said his taste for confrontation was undiminished, as shown by a series of stand-offs between Iraqi officials and UNSCOM (U.N. Special Commission) inspectors trying to implement the scrapping of Iraqi weapons. One diplomat said the attempts to stall the UNSCOM team showed Saddam was prepared to sacrifice everything to maintain his over-riding priority -- "security and sovereignty". 7005 !GCAT !GDIP !GPOL !GVIO The return of Iraqi forces to the rebel Kurdish north has skilfully exploited the underlying weakness in the West's containment policy against President Saddam Hussein and may doom it altogether. Analysts say Saddam's thrust into the city of Arbil, under the eyes of a U.S.-led air force, exposed the inability of the West to mould rival Kurdish clans into an effective, modern polity that could govern the north and confront Baghdad. As a result, Washington may be forced to wind down its use of a military exclusion zone to protect the Kurds, abandon its five-year-old quest for a united Iraqi opposition and search for new pressure points against the resilient Iraqi leader. "Saddam has been able to exploit the divisions we always knew were there between the main Kurdish factions," said a western diplomat closely involved in policy toward Iraq. "This (attack) is undoubtedly a setback for what the West wants to talk about," the diplomat said. Elite Iraqi armoured units attacked Arbil on Saturday and displaced forces of the Patriotic Union of Kurdistan (PUK) in favour of the Kurdistan Democratic Party (KDP). The groups had coexisted uneasily since a failed Kurdish uprising against Saddam after the 1991 Gulf war. Together they made up the bulk of the Iraqi opposition in the north. Baghdad has promised to withdraw its troops from around Arbil soon, a pledge greeted by scepticism in Washington. A KDP official in the northern Iraqi town of Zakho said about 40,000 Iraqi soldiers had entered Arbil but more than half of them had already withdrawn by Sunday. Whatever the immediate plans of the Iraqi divisions, the damage has been done to the myth of Kurdish solidarity against Saddam and the U.S.-led air force that nurtured it. "This is a humanitarian disaster for the people of Arbil and it is a political disaster for the Iraqi opposition," said an opposition official, speaking by telephone from London. "Arbil was a centre for opposition groups to Saddam," he said of the adminstrative capital of the Kurdish region and home to its embryonic parliament. "We are more demoralised than anything." The rapprochement between KDP leader Massoud Barzani and Saddam has raised fresh doubts about the future of Operation Provide Comfort -- flown over the north from a Turkish airbase by U.S., British, and French jets to keep Saddam's forces away. In the aftermath of the 1991 Gulf War, the U.S.-led alliance carved the predominantly Kurdish north and Shi'ite south from Baghdad's central control, shielding these rebel minorities beneath an air force umbrella. "Now we have to ask ourselves, who are we protecting? If the KDP has aligned itself with Saddam and against their fellow Kurds, what point are the western jets?" said one NATO-member diplomat. Provide Comfort, a quick-fix to end an influx of Kurdish refugees across the Turkish border after the failed anti-Saddam uprising, has never been popular in Turkey. Nationalists see it as a violation of Turkish sovereignty, while others say it has created a power vacuum in the north exploited by Kurdish separatists waging a 13-year insurgency for autonomy or independence from Ankara. New Islamist Prime Minister Necmettin Erbakan campaigned against the mission but reversed himself once in office under enormous pressure from Washington and its friends in the Turkish military. Supporters of Provide Comfort will now be hard-pressed to win continued backing from a wary prime minister and public. 7006 !GCAT !GPOL !GREL Only several hundred Palestinian Christians answered Palestinian President Yasser Arafat's call to flock to Jerusalem's holiest church on Sunday for prayers of protest against Israeli policies. Witnesses on the border between the West Bank and Arab East Jerusalem said there was no increase in the usual number of Palestinians trying to pass through Israeli army checkpoints. Arafat called on Wednesday for Moslems to attend Friday prayers at Jerusalem's al-Aqsa mosque and Christians to converge on Sunday on the Church of the Holy Sepulchre, the traditional site of the crucifixion, burial and resurrection of Jesus. But Israeli travel restrictions, imposed after bombings by Islamist militants in February and March, ban most of the two million Arabs in the West Bank and Gaza from entering Jerusalem. Israel on Friday ringed the city with police and roadblocks. Palestinians said barely 20,000 Moslems made it to the mosque complex, less than normal for Friday prayers. On Sunday, security was still heavy but bored soldiers were left leaning on their rifles in the mid-day heat of Jerusalem's walled Old City. Faisal Husseini, top PLO official in Jerusalem, dismissed media speculation that the low turnout reflected popular dissatisfaction with Arafat, who has slammed Israel's decision to expand Jewish settlements on the West Bank. "This call was not for all the Palestinian people," Husseini told reporters after attending services at a Greek Orthodox chapel adjacent to the sacred Christian shrine. He said Arafat's call had been intended only for leaders of the Palestinian community in Jerusalem and that the PLO could have mobilised tens of thousands of protesters but had chosen not to escalate tensions. "The world must know that Moslems and Christians are not free to arrive at their holy places," Husseini, a Moslem, said. Less than five percent of the two million Palestinians in the West Bank and Gaza are Christian. Netanyahu on Sunday said Arafat's call to prayer was "ill-considered and irresponsible" but was pleased the weekend passed calmly. "I.. . noticed, to say the least, there was no mad rush to the Temple Mount and it's good there wasn't one," Netanyahu told reporters at Jerusalem school, referring to the al-Aqsa mosque compund where ancient Jewish temples once stood. Netanyahu has said Palestinian offices in Jerusalem violate interim peace deals and must be shut. Israel captured East Jerusalem in the 1967 Middle East war and later annexed it, declaring both halves of the city its capital. Palestinians want East Jerusalem as the capital of a future state. Arafat bowed to Netanyahu's demand last week by closing two Palestinian offices in Jerusalem, only to be rebuffed when Israel two days later demolished an Arab community centre it said was built illegally. Arafat, who has said Israeli policies were tantamount to a declaration of war, has warned the Jewish state that Palestinians might reignite their national uprising against Israeli occupation if the peace process failed. Israeli media reports have said Netanyahu would meet Arafat, for the first time, this week. Asked about the reports, the Israeli leader told reporters: "I said the meeting...would take place based on developments and not based on a calendar date. Those developments are taking place as we speak. "I cannot tell you that they will materialise by such and such date. But we are in contact with the Palestinian Authority in order to arrive at certain understandings that will facilitate this meeting," he said. 7007 !GCAT !GPOL Palestinians will declare an independent Palestinian state with Arab East Jerusalem as its capital if Israel refuses to resume talks on a final peace agreement, a PLO official said on Sunday. The statement by Faisal al-Husseini, the PLO's top official in Jerusalem, was another sign of tension in Israeli-Palestinian relations that in the last week dropped to their lowest point since Benjamin Netanyahu was elected prime minister last May. "We will declare a Palestinian state with Jerusalem as its capital if Israel refuses to start permanent status negotiations," Husseini told foreign reporters based in Israel. "But as long as we start permanent status negotiations, we are not going to do that, it will not be the time for it." Interim self-rule deals signed by Israel and the PLO since 1993 set the framework for negotiations on the final status of the West Bank, Gaza and Jerusalem. Final status talks got under way in a symbolic session under the previous Labour-led government but there have been no such negotiations since Netanyahu took power on a platform rejecting the exchange of occupied territory for peace. Palestinian President Yasser Arafat warned Israel on Friday that Palestinians had other options if the Jewish state did not honour its agreements with the PLO. One option, he said, was the possible resumption of the six-year-long Palestinian uprising that began in 1987. Arafat said the other choice was unilateral declaration of an independent Palestinian state, to which Israel objects. Palestinian officials said although the PLO had declared a state from exile in 1988, such a call now would have more significance because Arafat was in charge of self-rule areas in the West Bank and Gaza. PLO officials have accused Israel of trying to back out of deals reached with the government of former prime minister Shimon Peres, particularly an agreed Israeli troop redeployment in the West Bank city of Hebron. "This government is creating an atmosphere which will lead to explosion. There will be explosion if the agreements are not implemented," Husseini said. "On the issue of Jerusalem things have reached the point of explosion." Under Israeli pressure, the Palestinian Authority closed two offices in East Jerusalem last week which Israel contended had engaged in activity connnected with self-rule, which under the peace deals is confined to parts of the West Bank and Gaza. Palestinian leaders denied the Israeli charge. Angering Palestinians further, Israel demolished a community centre in East Jerusalem last Tuesday. Municipal authorities said the building had been constructed without a permit. Israel occupied East Jerusalem in the 1967 Middle East war and later annexed it, a move not recognised by the international community. Israel declared both halves of the city its united capital. 7008 !GCAT !GPOL !GVOTE Billionaire Prime Minister Rafik al-Hariri rolled out a powerful electoral machine on Sunday, seeking to sweep aside all opposition as Beirut voted in the third round of Lebanon's parliamentary election. Hariri, running for parliament for the first time after nearly four years as prime minister, headed a 17-man team vying to capture all but two of Beirut's 19 seats in the 128-member house. Hundreds of taxis plastered with Hariri posters ferried his supporters to polling stations and thousands of campaign workers in Hariri t-shirts handed out his list of candidates for voters to place in ballot boxes. The 51-year-old construction tycoon was seeking to establish a strong electoral base and a solid parliamentary bloc to help him push his ambitious projects for reconstructing Lebanon through the new parliament. Ex-premier Selim Hoss, a respected 66-year-old moderate backed by Beirut's Sunni Moslem establishment, headed a rival 13-man list seeking to blunt Hariri's assault on parliament. Radical Christian parliamentary deputy Najah Wakim, 52, known for his repeated allegations of corruption against Hariri and the government, headed an eight-man list. Hoss has accused Hariri of seeking the return of a parliament with no real opposition. Opposition candidates and an independent monitoring group alleged fraud in the first two rounds as the government machine crushed all but a handful of opposition candidates. Wakim and Mohammed Berjawi of the pro-Iranian Hizbollah (Party of God) accused the government on Sunday of again committing abuses. Wakim told reporters people had been brought in from the countryside to vote for Hariri with the identity cards of dead or emigre voters. The charge could not be independently confirmed, but a Reuter reporter saw the names of voters born as long ago as 1882 on polling station lists. Wakim said many of his electoral delegates were not given official permits to watch the voting and vote-counting in polling stations. Berjawi showed reporters scores of voting envelopes bearing the interior ministry stamp which he said were illegally given to Hariri's team to be stuffed with their voting list and handed to voters. "It seems like the usual collection of infractions," Paul Salem, secretary-general of the Lebanese Association for Democracy of Elections (LADE), told Reuters. He said some voters lists were incomplete, preventing people from voting, and other people arrived at polling stations to find that someone had voted for them. Police said nine people were arrested for voting with false documents. Voting was brisk during the morning in west Beirut, the predominantly Moslem part of Beirut, but slow in predominantly Christian east Beirut where nationalist opponents of the pro-Syrian government called for a boycott. Graffiti, posters and leaflets in the east side urged voters to stay away in protest at alleged electoral fraud and the presence in Lebanon of 35,000 Syrian troops who give Damascus a controlling voice in the country's affairs. "No to occupation...no to fraud...no to a Syrian parliament, Yes to Lebanon," the opposition leaflets said. The interior ministry said more than 15 percent of Beirut's 377,000 registered voters cast their ballots by noon (0800 GMT) compared with 10.1 percent who voted in Beirut in the last election in 1992 when most Christians and many Moslems responded to similar boycott calls. 7009 !GCAT !GPOL !GVOTE Yemen plans to invite international observers to monitor parliamentary elections in April 1997, the first polls since the country's 1994 civil war. "The government has been directed to invite non-governmental organisations...to follow up the election process and monitor it to guarantee its fairness," Yemeni President Ali Abdullah Saleh said in an interview with the official al-Thawra daily published on Sunday. International observers monitered the last poll in 1993 when 22 parties vied for 301 seats in parliament. Saleh's General People's Congress won a majority, followed by the Islamist Islah Party and the opposition Yemen Socialist Party (YSP). The three parties governed Yemen until the YSP, some of whose leaders launched the civil war separatist campaign, was dismissed from the coalition. The YSP has more than 50 seats in parliament. 7010 !GCAT !GDEF !GVIO Baghdad has withdrawn many of its troops from the main Kurdish city of Arbil in northern Iraq, an Iraqi-backed Kurdish group said on Sunday. "About 40,000 Iraqi soldiers had entered. A large portion of that -- more than half of them -- have withdrawn," Husameddin Mohammed, a senior official for the Kurdistan Democratic Party (KDP) in the northern Iraqi town of Zakho, told Reuters. Iraqi troops backed by armour and artillery intervened on Saturday in inter-Kurdish fighting in northern Iraq on the side of KDP leader Massoud Barzani to recapture Arbil from Jalal Talabani of the Patriotic Union of Kurdistan. "Talabani joined with Iran, and in response, we came closer to Iraq. We got their support," Mohammed said. Iraq earlier pledged to withdraw from northern Iraq, but had not set a date. Washington expressed scepticism over Iraq's intentions. The two Kurdish factions have a history of bloodshed and shifting alliances with Iraq and Iran. The fighting in Arbil derailed the latest in a series of peace talks, which had been scheduled to take place in London. 7011 !GCAT !GCRIM A Moroccan court has sentenced two French nationals to eight years imprisonment each for drug trafficking, Moroccan news agency MAP said on Sunday. The two men identified as Raymond Jean-Michel Buteaux and Lucien Andre Wanner were arrested after being denounced by one of their accomplices Gerard Charles Shmitt, known for a previous drug conviction, MAP said. It said Buteaux and Wanner ran a supply network of six people including their Moroccan wives who were sentenced to two years in jail. Among the four other members, two got six year prison terms while two were acquitted. Buteaux was also fined $34,883 and Wanner $15,000. 7012 !GCAT !GDIP !GVIO Iran on Sunday maintained an official silence on charges that its forces intervened in Kurdish infighting in Iraq, its foe in an eight-year war in the 1980s. The Iranian foreign ministry said it had no comment. "When there is a reaction we will let you know," an official said. An Iraqi Kurdish group said Iranian troops entered Kurdish-controlled northern Iraq on Saturday in the wake of an assault backed by Baghdad. Separately, Iraq's deputy envoy to the United Nations warned Iran not to interfere in the affairs of its Kurdish north. The presence of Iranian troops in Iraq, if confirmed, would put the two neighbouring oil states -- who fought from 1980 to 1988 in a war in which up to a million people were killed -- on opposite sides of another bloody conflict. Faik Nerweyi of the Kurdistan Democratic Party (KDP) told Reuters by telephone from Ankara on Saturday Iranian forces had occupied an area of northern Iraq close to the Iranian border to a depth of 40 km (25 miles) and set up a headquarters in Chuman. Nerweyi said he did not know the size or nature of the Iranian forces, but said KDP fighters had been easily outgunned and had quickly withdrawn further west. Iraq's charge d'affaires at its U.N. mission in New York, Saeed Hasan, warned Iran not to interfere in the affairs of the Kurdish north but said Baghdad would not reassert its control over those areas at this time. U.S. officials said Iraq amassed 30,000-40,000 troops in its three northern Kurdish provinces and on Saturday captured the city of Arbil, expelling the Patriotic Union of Kurdistan (PUK), and installing the rival KDP. The two factions have a history of bloodshed and shifting alliances with Iraq and Iran. The KDP charges that the PUK, which took control of Arbil in fighting in December 1994, has backing from Iran. The PUK accuses the KDP of collaborating with Baghdad. Hasan maintained the military action was necessary because Iran was reported to have sent 300 Revolutionary Guards to the area two weeks ago and earlier had infiltrated Kurdish groups. He said Iran as well as "other parties" should realise that Iraq's three northern provinces were still a part of Iraq and not a "no man's land". "So our message to Iran is clear: 'Don't interfere in our internal affairs. Don't hurt our sovereignty'. And at the same time, it's the same appeal to other parties." Iran News daily in an editorial on Sunday called the charges "flimsy" and said the movements of Iraqi forces seemed to be a prelude to another adventurism which was so characteristic of Iraqi President Saddam Hussein. Iran's Parliament Speaker Ali Nateq Nouri told parliament on Sunday the attack on Arbil "has been definitely carried out in coordination with and a green light from Washington". The official Iranian news agency IRNA quoted him as saying both the United States and the government in Baghdad "have deprived the Iraqi people from the right to decide their fate and have kept them under pressure". The Kurds live in a mountainous region where the borders of Turkey, Syria, Iran and Iraq meet. Years of bitter infighting and the strong opposition of all four countries have frustrated Kurdish aspirations for autonomy. Iran News said the regional countries, particularly Iran, Syria and Turkey, shouldered crucial responsibility for easing tensions in northern Iraq. 7013 !E51 !E512 !ECAT !GCAT !GDIP Iranian President Akbar Hashemi Rafsanjani begins a tour of six African states on Monday to boost economic ties in the face of a U.S. campaign to isolate the Islamic republic. Rafsanjani will visit Kenya, Uganda, South Africa, Zimbabwe, Tanzania and Sudan over a period of up to 12 days, a spokesman at the president's office said. The tour comes less than a month after U.S. President Bill Clinton tightened sanctions against Iran by signing a law which penalises non-U.S. firms that invest $40 million or more a year in the oil and gas sectors of Iran or Libya. Tehran intensified its diplomatic activity to woo developing countries by stressing solidarity against the West and offering economic cooperation deals after Washington, which accuses Iran of sponsoring terrorism, imposed trade sanctions in June 1995. Iran rejects the U.S. charges and says Washington wants to topple its Islamic government for opposing U.S. hegemony. Africa has figured prominently in Iran's diplomatic drive, with frequent contacts and visits to about 10 African states by senior Iranian delegations in the past month. "Africa has strategic importance for Iran," Iranian Deputy Foreign Minister Hossein Sheikholeslam said during a recent visit to Uganda. "African states have backed Iran on many international issues because they can understand us better than others," said Sheikholeslam, who also visited Kenya and Sudan. Tehran has doubled the number of its embassies in Africa to about 23 since its 1979 Islamic revolution and Iranian state radio has launched daily broadcasts in Hausa and Swahili. Rafsanjani will start his tour in Kenya. He will also visit South Africa which buys up to 65 percent of its oil imports, or about 250,000 barrels per day, from Iran. Tehran signed a deal with Pretoria last year to store 20 million barrels of its oil in a facility on South Africa's west coast. The project, which has drawn U.S. objections, has been delayed by an environmental impact study but South African officials say they have no political problems with the accord. Iran's Oil Minister Gholamreza Aghazadeh last year offered to undercut Western companies on oil projects in African states. Iran had cooperation ties with South Africa, Kenya, Morocco, Sudan, Tanzania, Libya, Madagascar and Senegal, he said. Iran is also eyeing African countries for its non-oil exports. It has signed trade deals with several of them and exhibited Iranian products in Kenya and South Africa. Although the economic results of Iran's drive to woo African and other developing states remain to be seen, Iranian officials have repeatedly expressed satisfaction over most of the nations ignoring U.S. calls to join in a boycott of Tehran. Some officials have even seen this as a sign of increasing support to Iran in its confrontation with the United States. "Iranian media boasts of international opposition to U.S. policies and interpret it as being supportive to the Islamic republic," said an Asian diplomat based in Iran. "As if all of a sudden we all have fallen in love with Iran. I wonder how many top Iranian officials realise the difference between disapproving of extra-territoriality and supporting Iran," said the diplomat, referring to the U.S. sanctions law. 7014 !GCAT These are the leading stories in the Moroccan press on Sunday. Reuters has not verified these stories and does not vouch for their accuracy. LE MATIN DU SAHARA - Pro-government parties call for yes vote in referendum for constitutional reform due September 13. L'OPINION - French human rights delegation in two-day visit to Morocco starting September 3. - Two French nationals sentenced to eight years imprisonment on drug charges. AL-MAGHRIB - Owners of gas stations threaten to stage strike in protest against sale price which they say does not take into account world market. 7015 !GCAT !GDIP !GVIO Turkish Foreign Minister Tansu Ciller on Sunday called for the immediate withdrawal of Iraqi government forces from the main Kurdish city of Arbil in northern Iraq. "(Iraqi President) Saddam (Hussein) must withdraw immediately," Ciller was quoted on the Anatolian news agency as saying. "It is imperative for peace that Saddam ends the attack it has mounted with the (Massoud) Barzani forces around Arbil." "Turkey is on the side of peace," Ciller said. "It prefers that all the powers in the region resolve their problems through dialogue and not through fighting." She said that Turkey had received no request from the United States to use the base in Incirlik in southern Turkey where U.S. jets patrolling northern Iraq to protect the Kurds are stationed. Ciller said Ankara did not see the matter as going that far. Turkey sided with the allies in the 1991 Gulf War against its neighbour and trade partner Iraq, but it has also been wary of Kurdish autonomy in northern Iraq and fears the authority gap and fighting there enable Turkey's own Kurdish separatist rebels to operate in the region. 7016 !GCAT These are some of the leading stories in the Saudi Arabian press on Sunday. Reuters has not verified these stories and does not vouch for their accuracy. AL-RIYADH - Saudi and Yemen affirm commitments to Taif agreement to settle their border dispute. Saudi Defence Minister Prince Sultan paid a land-mark visit to Sanaa on Wednesday to boost economic relations and try to settle border dispute. AL-YAUM - Share prices rise this week in the Saudi stock market, Riyad Bank shares lead trading. ARAB NEWS - Foreign investment in Saudi Arabia hits 88.5 billion riyals in 340 joint industrial projects during the past 15 years, industry and electricity minister says. - Saudi shipping companies have reduced cargo charges and fares of passengers sailing from Jeddah to the ports of the Red Sea. - Saudi Ministry of Islamic Affairs allocates 15.7 million riyals for manufacturing and importing carpets for use in mosques. 7017 !GCAT !GDIP Israel's Foreign Minister David Levy arrived in the Egyptian Mediterranean city of Alexandria on Sunday for talks with President Hosni Mubarak on Middle East peace. Levy went immediately into a meeting with Egyptian Foreign Minister Amr Moussa. He is expected to meet Mubarak shortly. Before flying to Alexandria, Levy told Israel Radio he hoped to improve the atmosphere between Israel and Egypt for the sake of regional peace. "This is an opportunity to brief the Egyptian president and to have...a general discussion about the entire region and Egypt's responsibility, together with Israel's responsibility towards the peace process," Levy said. 7018 !GCAT These are some of the leading stories in the Iraqi press on Sunday. Reuters has not verified these stories and does not vouch for their accuracy. JUMHOURIYA - President Saddam Hussein chairs meeting of the Revolutionary Command Council (RCC). After the meeting a spokesman for the RCC says Iraqi troops to pull back from Arbil. - The paper carries an editorial warning the U.S. to keep out of Iraq's Kurdish north. - Massaud Barzani leader of the Kurdistan Democratic Party (KDP) thanks the (Iraqi) leadership for responding to his appeal. - Russian deputy foreign minister opens talks with Iraqi senior officials including Vice-President Taha Yassin Ramadan, Deputy Premier Tareq Aziz and Foreign Minister Mohammed Saeed al-Sahaf. - National Assembly (parliament) condemns the Iranian regime's backing of elements of Jalal Talabani. - Tunisia says it is ready to supply Iraq with food and medicine. - Northern Iraq and the lie of the (U.S.-led) Operation Provide Comfort -- Commentary. (The above stories except for the editorial and the commentary were also carried by Thawra and Qadissiya) THAWRA - Iraq's response (to Barzani's call) is on the basis of its sovereignty (Editorial). - Kurds stage rallies in northern Iraq in support of Iraqi troops. - An official Vietnamese delegation to hold trade talks in Baghdad soon. BABEL (Owned by Saddam's eldest son Uday) - Its editorial says Washington is gripped by hysteria in its reaction to the support extended by Iraqi troops to the KDP. 7019 !GCAT These are some of the leading stories in Kuwait's press on Sunday. Reuters has not verified these stories and does not vouch for their accuracy. AL-QABAS - Parliament approves the budget of state-owned conglomorate Kuwait Petroleum Corporation, which runs the Gulf state's oil industry. - Kuwait tightens airport security to prepare for the end of the summer vacations season. AL-WATAN - Supreme Petroleum Council to allow the private sector to take part in oil by-products marketing locally. Kuwait is preparing to privatise some 80 state-owned petrol stations. AL-RAI AL-AAM - Diplomatic crisis between Yemen and Kuwait after Yemeni authorities harrass Kuwaiti diplomat, sources say. - Four ministers to resign today (Sunday) ahead of the October elections. Kuwaiti law bars ministers from running for parliament seats. 7020 !GCAT !GCRIM !GPOL !GVIO Bahrain has freed about 100 Shi'ite Moslem detainees held in connection with anti-government unrest, residents said on Sunday. They said the detainees had been freed in the past few days, some of whom had been held for about eight months. A government official confirmed the report and said "groups of detainees" had been released, but did not give an exact number. Members of Bahrain's Shi'ite Moslem community have staged protests calling for political and economic reforms. At least 26 people, including three policemen, have been killed and hundreds arrested since the unrest erupted in 1994. 7021 !GCAT !GENT !GPOL !GPRO A new film about Egyptian revolutionary leader Gamal Abdel Nasser has broken local box office records by tapping a rich vein of Egyptian nationalism. The film "Nasser 56", which tells the story of Nasser's nationalisation of the Suez Canal in 1956 and the Suez war that followed, has pulled two million people into the cinemas in the first three weeks since its premiere on August 3. Released to coincide with the 40th anniversary of the nationalisation, the film has helped revive the long debate about Nasser's role in history. Was he really the selfless saint and hero depicted in the film, the man who stood up for the poor and the oppressed of the Third World against the evil machinations by the likes of John Foster Dulles and Sir Anthony Eden? Or was he just another tyrant, who fed the Egyptian people on empty slogans and led his country to economic and military disaster through socialist central planning and by grave mistakes before and during the Middle East war of 1967? The film, shot in black and white to blend in with documentary footage from the period, takes the hagiographic approach and the audiences have responded with enthusiasm. Egyptian youngsters, too young to remember the real-life Abdel Nasser, who died in 1970, cheered and clapped at all the right moments, in unison with the crowds in the film. "The film takes on a nationalistic stance I found hard to accept. Anybody who has read about or lived in Nasser's era should know this film is not realistic and plays on people's feelings," said political science student Nancy Mostafa. "One of the scenes I could not believe has Abdel Nasser insisting that his secretary send his children postcards by air mail and not in the diplomatic bag," she added. "It is not so much the art of the film that interests the audience. It is the emotional reenactment of those crucial months for the Arab world," said student Mahmoud Kassem. "The film portrays a pan-Arabist sentiment that has since faded." But for the diehard Nasserites, deliberately marginalised under the late president Anwar Sadat and unable to make a political comeback under President Hosni Mubarak, the film is a godsend for their version of Egyptian history. "The premiere of 'Nasser 56' turned into a new referendum on the personality and policies of Abdel Nasser," wrote the Nasserite party newspaper al-Arabi. The guests of honour at the premiere helped to set the tones -- the ambassadors of Syria and Iraq were there, along with Nasser's information minister Mohamed Fayek and opposition Labour Party leader Ibrahim Shukri. Commentator Mohamed Salima, writing in the government newspaper al-Ahram, said the popular response to the film had shaken those who have tried to undermine Nasser's reputation. "They are worried because 'Nasser 56' showed up what some people have been trying to present to the young in books and newspapers," he wrote, referring to the criticism directed at Nasser for the intolerance of his domestic policies. "But 26 years after he died, Abdel Nasser is still among us. The masses remember him and keep pictures of him...Abdel Nasser is the hero who had a date with destiny," Salima said. Egyptian superstar Ahmed Zaki plays the charismatic leader, one of the group of officers who overthrew the Egyptian monarchy in a bloodless coup in 1952. Zaki has impressed both fans and critics with his portrayal of Abdel Nasser as he tries to overcome doubts that Egypt could nationalise the canal and run it as efficiently as the French and the British had done. "I didn't care much for the movie but I liked Ahmed Zaki's acting. He seemed so real and his makeup made him look like all the pictures I had seen of Abdel Nasser. He even had Abdel Nasser's gruff voice," said cinema-goer Alaa Moneib. Films about recent politics have been relatively rare in the Egptian cinema and the makers of "Nasser 56" faced especially difficult problems finding out about Nasser's private life. Actress Fardous Abdel Hameed, who plays Nasser's retiring wife Tahiya, says she had to put on weight for the part. "Researching the character was very difficult because there was almost nothing known about the late president's wife. She was rarely photographed and was never in the limelight," said Abdel Hameed, herself the wife of film director Mohamed Fadel. She at least is happy with the historical accuracy of the film, including the scene with the postcards. "We got this from the memoirs of Abdel Nasser's bodyguard, who compiled them in a book and published it," she said. 7022 !GCAT !GDIP Israel's Foreign Minister David Levy flew to Egypt for talks with President Hosni Mubarak on Sunday, saying he hoped to improve the atmosphere between the two countries for the sake of Middle East peace. "This is an opportunity to brief the Egyptian president and to have...a general discussion about the entire region and Egypt's responsibility, together with Israel's responsibility towards the peace process," Levy said. "I hope that I will be able to change the atmosphere because if we want to continue the peace process...there must be a mutuality," he told Israel Radio before flying to Alexandria. Egypt has said a Middle East economic conference scheduled for Cairo in November would be pointless if Israel did not ensure progress towards Middle East peace. On Friday, Israel's Maariv newspaper quoted Egyptian Foreign Minister Amr Moussa as telling it in an interview that Prime Minister Benjamin Netanyahu's peace moves with the Palestinians have been mere "window dressing". Levy said Israel was making preparations for an as yet unscheduled meeting between Netanyahu and Palestinian President Yasser Arafat, calling such talks "a natural thing which must take place". Netanyahu gave his strongest indication that he would see Arafat soon by telling Army Radio: "I have said that when the developments allow, we would announce the meeting -- and indeed, there are all sorts of developments." He did not elaborate. Diplomatic sources in Cairo said on Saturday that Egypt had asked the Arab League to call an emergency meeting of Arab foreign ministers to take a united stand on recent developments in Arab-Israeli relations. The meeting would take its cue from the Arab summit in Cairo in June, they said. The summit told Israel that Arab states might reconsider steps towards peace with Israel if it did not fulfil its agreements or tried to change the basis for talks. 7023 !GCAT These are the leading stories in the Egyptian press on Sunday. Reuters has not verified these stories and does not vouch for their accuracy. AL-AHRAM - President Hosni Mubarak's discussions with Israeli Foreign Minister David Levy today in Alexandria concentrate on Israel's obstincacy, settlement policy and Jerusalem judaization bids. - Foreign Minister Amr Moussa presents to President Mubarak a report on his Arab and African tour. Moussa says that the peace process enters a crisis stage due to Israel's stubborn policy. - Interior Minister Hassan el-Alfi to Al-Ahram: London's conference proves the prsence of supporters to terrorism. AL-AKHBAR - A report to President Mubarak on the Nile flood. AL-GOMHURIA - Egyptian contacts to push the Palestinian-Israeli peace negotiations. - Prime Minister Kamal Ganzouri inaugurates new projects in Alexandria. - Egyptian-Saudi naval excercises achieved their goals. -- Cairo newsroom +20 2 578 3290/1 7024 !GCAT !GVIO The Kurdish stronghold of Sulaimaniya, the last remaining major Iraqi city held by Kurdish rebel Jalal Talabani, was the target of artillery fire early on Sunday morning, a U.N. source in Baghdad said. "According to our reports there has been shelling in Sulaimaniya but we cannot determine where it came from," the source told Reuters. 7025 !GCAT !GDIP !GVIO Prime Minister Benjamin Netanyahu said on Sunday that Israel, a target of Iraqi Scud missiles during the 1991 Gulf War, was closely watching the situation in northern Iraq. "We certainly are closely monitoring events there. We have no estimates at the moment about the possibility of this conflict spreading in our direction but we must be alert and prepared," Netanyahu told Army Radio. Asked if he had spoken with U.S. President Clinton about the situation, Netanyahu said: "There was contact between the two governments." Iraqi troops, backed by heavy armour and artillery, intervened on Saturday on the side of Massoud Barzani, leader of the Kurdistan Democratic Party, to recapture the Kurdish stronghold of Arbil from Jalal Talabani of the Patriotic Union of Kurdistan (PUK). The Israeli newspaper Maariv reported on Sunday the United States had promised Israel early warning of any U.S. military action against Iraq to allow the Jewish state "to prepare adequately for any possible development". Israel geared for the opening of the allied offensive to drive Iraq out of Kuwait in 1991 by distributing gas masks and advising the public to seal rooms against possible attack by Scuds carrying chemical warheads. Iraq fired dozens of Scuds, armed with conventional warheads, at the Jewish state during the Gulf War. 7026 !GCAT These are some of the leading stories in the Jordanian press on Sunday. Reuters has not verified these stories and does not vouch for their accuracy. JORDAN TIMES - Jordan warns of possible Iranian armed incursion after Iraqi and KDP forces seize control of Arbil. Sources say Jordan will not interfere in Iraq or allow itself to be used as a base for military action. - Oman's Sultan Qaboos on a private visit to Jordan. Holds talks with King Hussein in Aqaba. - Minister of Energy and Mineral Resources Hashem Dabbas says government has suspended all discussions with foreign groups on setting up $2.5 billion oil refinery. Says government might invite new bids for the project. AD-DUSTOUR - King Hussein and Sultan Qaboos discuss bilateral relations and regional affairs in their Aqaba talks. - Iraqi army enters Arbil. Rapid and radical changes in the Iraqi issue. - Planned changes to publishing laws will protect identity of sources from courts, Ad-Dustour has learned. AL-ASWAQ - Jordan will not interfere in northern Iraq, official sources say. - Prime Minister Abdul Karim al-Kabariti tours southern governorate of Karak. - State Customs cut period of bank guarantees on custom duties and other taxes on transit and re-export goods to four months from six months. AL-RAI - Al-Rai learns of plans to cut custom duties on mobile phones and increase subscription costs by one dinar ($1.4) a month. - High Council for the Protection of the Environment agrees plans for a $20 million methane-powered electricity plant proposed by U.S. firm. 7027 !GCAT A combined force of Iraqi troops and Kurdish rebels of the Kurdistan Democratic Party (KDP) are now patrolling the Kurdish city of Arbil, a U.N. relief official in Baghdad said on Sunday. "Government forces and KDP are patrolling Arbil. The situation seems to have calmed down. We have no more reports of fighting in the city," the official, asking for anonymity, said. Iraqi troops backed by heavy armour and joined by KDP rebels battled their way into Arbil on Saturday and captured it from the guerrillas of the Patriotic Union of Kurdistan (PUK) of Jalal Talabani. The U.N. official said Iraqi troops were still surrounding the city and "it seems they have been very careful to avoid casualties among civilians". Early on Sunday Baghdad said it would withdraw its troops soon to their former positions. Arbil is within the no-exclusion zone the United States and allies declared soon after the 1991 Gulf War to protect Iraqi Kurds against attacks by Iraqi forces. Iraq warned the United States on Sunday to keep out of its Kurdish north, vowing to turn the area into another Vietnam if Washington intervened. 7028 !GCAT !GDIP !GVIO Iraq warned the United States on Sunday to keep out of its Kurdish north, vowing to turn the area into another Vietnam if Washington intervened. "The Iraqi people, in the forefront Iraqi Kurds, are ready to provide an example that will inevitably remind the Americans of the Vietnam complex," the government newspaper al-Jumhouriya declared in a front-page editorial. "Beware of the wrath of Iraqi Kurds...They should not believe that what happened can be controlled by force," the paper said in the editorial signed by editor-in-chief Salah al- Mukhtar. Iraqi troops, backed by heavy armour and artillery, intervened on Saturday on the side of Massoud Barzani leader of the Kurdistan Democratic Party, to recapture the Kurdish stronghold of Arbil from Jalal Talabani of the Patriotic Union of Kurdistan (PUK). It was the first Iraqi military thrust in the region since the United States and its Western allies set up an air umbrella over northern Iraq to protect rebel Kurds from possible attacks by Iraqi armed forces. Iraq said early on Sunday it would withdraw the troops it sent to back Barzani. Washington has expressed scepticism over Baghdad fulfilling this pledge. 7029 !GCAT These are some of the leading stories in Israeli newspapers on Sunday. Reuters has not verified these stories and does not vouch for their accuracy. HAARETZ - Foreign Minister Levy to discuss Hebron redeployment with Egyptian President Mubarak in Alexandria today. - Palestinian negotiator says Israeli representatives refused to provide dates for Israeli troop redeployment in West Bank city of Hebron and release of Palestinian prisoners. - Big provident funds made no profit in August, but also made no losses. - Prime Minister Netanyahu supports public offer of Bezeq overseas instead of sale to strategic investor. JERUSALEM POST - Israel, Palestinian Authority close to written understandings. - Palestinian President Arafat hints at renewal of intifada. - Israeli Infrastructure Minister Sharon steamed at being left off of negotiating team. YEDIOTH AHRONOTH - Hizbollah received $25 million from Germany for returning bodies of two Israeli soldiers. MAARIV - U.S. to Israel: We'll inform you before we attack in Iraq. - Hamas spiritual leader Sheikh Yassin will be freed as a gesture to Arafat. 7030 !GCAT These are some of the leading stories in the United Arab Emirates press on Sunday. Reuters has not verified these stories and does not vouch for their accuracy. AL-ITTIHAD -Iraqi forces enter Arbil in northern Iraq. - Gulf committee discusses commercial cooperation between Gulf Arab states. KHALEEJ TIMES - UAE urged to mull tea processing industry. - Bank credits in the UAE surged to around 91.5 billion dirhams in 1995 from from 62.8 billion in 1991. GULF NEWS - Bids invited for natural gas pipeline project to link Abu Dhabi with Jebel Ali. - Japanese car sales in Dubai gather speed. 7031 !GCAT !GPOL Israeli Prime Minister Benjamin Netanyahu gave on Sunday his strongest indication so far that would soon meet Palestinian President Yasser Arafat. Asked about Israeli media reports he would meet Arafat this week, Netanyahu told Army Radio: "I have said that when the developments allow, we would announce the meeting -- and indeed, there are all sorts of developments." He did not elaborate. In a separate interview with Israel Radio, Foreign Minister David Levy said a Netanyahu-Arafat meeting would be "a natural thing which must take place" and that Israel was making preparations for the talks. "I hope so," Levy replied, when asked if the meeting would be this week. "But I am not the one who decides for the prime minister." Levy spoke before leaving for Egypt for talks with its president, Hosni Mubarak. On Saturday, a PLO official, who declined to be identified, told Reuters: "A meeting between Arafat and Netanyahu will take place very soon. No date has been set yet. There are contacts to prepare for this meeting." Netanyahu, elected last May on a platform opposing the exchange of occupied land for peace, had said he was in no hurry to meet Arafat. But Israel-PLO relations reached crisis point last week after Arafat accused the right-wing Netanyahu government of declaring war on the Palestinians. 7032 !GCAT !GPOL !GVOTE Beirutis began voting on Sunday in the third round of Lebanon's election in which billionaire Prime Minister Rafik al-Hariri is seeking a parliamentary seat for the first time. Some 4,000 troops, some in armoured personnel carriers with helmets, flack jackets and automatic rifles, patrolled the streets of the capital as polls opened at 7.00 a.m. (0400 GMT). 7033 !GCAT !GDIP Libyan leader Muammar Gaddafi vowed on Saturday never to surrender to U.S. pressure, saying a huge man-made river project in his country was proof that his country was concerned with development and peace. "The world can see that we are making life with water," Gaddafi said at the inauguration of a new phase of his "Great Man-Made River" project 25 km (15 miles) southeast of Tripoli. "This is the biggest answer to America and all the evil forces who accuse us of being concerned with terrorism. We are only concerned with peace and progress. America is against life and progress, It pushes the world towards darkness," he said. Libya has been on Washington's list of states that sponsor international terrorism since December 1979. Tripoli's refusal to hand over to Britain or the United Staes two Libyan suspects in the 1988 bombing of a Pan Am plane over Scotland led to the imposition of U.N. sanctions on Libya. "Just because someone refuses hegemony and colonialism doesn't mean he wants war. We want peace, but we refuse to surrender. America presents propaganda. We present clear action to the world," Gaddafi said. The Libyan leader and dignitaries celebrating the 27th anniversary on Sunday of the coup that swept him to power simultaneously pressed buttons to open a barrier that allowed water to rush out across a small valley. The huge project pumps water from the south of the country to the Mediterranean coast. U.S. Nation of Islam leader Louis Farrakhan, who on Friday received the 1996 Muammar Gaddafi Human Rights Award in Tripoli, called the project "another miracle in the desert". Many of the 2,000 Libyans at the celebration ran or dived into the water while men dressed in traditional clothes gave a display of horsemanship. Women ululated while young men shouted slogans urging Gaddafi to stand up to the United Nations and the West. "Increase your challenge -- stuff the sanctions," they shouted to Gaddafi, who smiled and raised his fist. Gaddafi is spending an estimated $25 billion on the water project, which he has described as the eighth wonder of the world. South Korea's Dong Ah construction company is the overall contractor for the scheme. Work on the first phase, which takes water to the towns of Sirte and Bengazi, began in 1984 and ended seven years later. The second, which was inaugurated on Saturday, started in 1992 and supplies Tripoli with water via the Tarhunah regulating station 60 km (35 miles) southeast of the capital. Tarhunah is where the United States has accused Gaddafi of building an underground chemical weapos plant. Libya has strongly denied the allegation, saying tunnels at the site are part of the "Great Man-Made River". Three more phases will complete the river project. Environmentalists are divided over the impact of the project. Water reservoirs under the desert in the south of the country were formed in the last Ice Age which ended about 10,000 years ago and are not renewable. The Libyans have said the project can be maintained fairly easily for at least 50 years, after which new wells will have to be dug and some pipes replaced. Gaddafi has offered to resettle one million Egyptian farmers on land to be irrigated by the project and has said he hopes to link the river project with the Nile to bring the waters of the natural river to his country. 7034 !GCAT !GDIP Republican presidential candidate Bob Dole on Sunday assailed President Bill Clinton's Middle East policy, faulting weak leadership on Iraq, meddling in Israel and "moral confusion" about state-sponsored terror. In a pair of Washington speeches before the U.S. National Guard Association and the Jewish service group, B'Nai B'rith, Dole accused Clinton of a "failure of American leadership" in confronting Iraqi President Saddam Hussein. "Saddam Hussein has been testing American leadership and found it lacking," Dole said of Iraqi attacks this weekend in Kurdish areas of northern Iraq. He faulted Clinton for relegating Iraqi affairs to "low level" officials and said it was no surprise that Saddam Hussein has "ignored those barely audible" U.S. warnings. Dole recalled that he objected, but Clinton "acquiesced" when the United Nations last May decided to relax some sanctions and allowed some Iraqi oil sales. "We don't need to analyse Saddam's actions. We need to condemn Saddam's actions and do it very strongly," said Dole. Clinton's spokesman Mike McCurry said that the president has been on the phone with other world leaders about the events in northern Iraq, where troops have apparently intervened in fighting between Kurdish factions. Dole, though acknowledging Clinton's "basic goodwill" toward Israel, told B'nai B'rith that he and running mate Jack Kemp could "work more smoothly" with the new Israeli Prime Minister Benjamin Netanyahu of the conservative Likud party. "The Dole administration will find it easy to harmonise our policies with those of Mr. Netanyahu," he said, adding that he would not "pre-empt Israel's sovereign right" to its own national security policies or push for Israel to return the Golan Heights to Syria. Alluding to Clinton's clear preference for Netanyahu's Labour Party opponents in the recent elections, Dole accused the president of meddling inappropriately in internal Israeli politics. "The Clinton administration's intervention in Israel's recent election was harmful -- and embarrassing -- for America," said Dole, who referred to the Nazi Holocaust and his past as a soldier wounded in the Second World War. The former Senate Republican leader also lambasted Clinton's policy on Iran, Syria and Libya, which he called "terrorist states." He said it was wrong to focus on the "root cause" of terrorism when the goal should be wiping it out. "We cannot have an effective policy against terrorism if our leaders are lost in moral confusion," he declared, adding that in a Dole administration, "there will be no more mixed signals to states that sponsor terrorism." In both speeches, Dole also dwelled on his anti-drug stance, a centrepiece of his campaign since a survey about 10 days ago showed illegal drug use among teenagers had gone up since President Bill Clinton took office. Dole pledged that if he is elected president, he would restore National Guard funding for anti-drug programmes to 1993 levels of $230 million from the current $158 million and develop ways of using the Guard along the Southwest border with Mexico. Noting that much of the marijuana on U.S. streets was now grown domestically, Dole said he would use the Guard's intelligence capacities to find the fields and send a message to growers, "If you're growing this trash -- beware: You'll be whacked, stacked and jailed." 7035 !GCAT !GDIP President Bill Clinton called several world leaders on Sunday to discuss a "course of action" in response to Iraqi military action against the Kurdish minority in northern Iraq, the White House said. With Clinton already having put U.S. forces in the region on high alert in response to the Iraqi moves, officials insisted that no options were being ruled in or out. Two U.S. envoys, Joint Chiefs of Staff Chairman General John Shalikashvili and assistant secretary of state John Pelletreau, were in Saudi Arabia for diplomatic discussions, officials said. White House spokesman Mike McCurry said Clinton, spending the weekend in his home state, called less than a half dozen world leaders "who share our concern about Iraqi military activity in northern Iraq" and the outcome was "strong agreement that we should work together to fashion the appropriate response." "The United States government is consulting closely with those who share our concerns about (Iraqi President) Saddam Hussein's behavior. We are sharing with them ideas on what course of action the United States government might pursue to make it clear that there are consequences for behavior by Saddam Hussein that have no justification," he said. McCurry would not say what plans were being discussed but insisted that no options were being ruled in or out. "The outcome of these calls was strong agreement that we should work together to fashion the appropriate response," he said. He would not give specifics on the calls, but other officials said Clinton talked to British Prime Minister John Major and was likely to speak with French President Jacques Chirac and German Chancellor Helmut Kohl as well as a number of Arab leaders, including Saudi Arabia's King Fahd, Egyptian President Hosni Mubarak and Jordan's King Hussein. "I am not drawing lines in the sand, that is not the purpose of the consultations we have under way," McCurry told reporters. Washington believes Saddam sent three tank divisions composed of 30,000-40,000 elite Republican Guard troops into northern Iraq to help a Kurdish faction involved in a bloody power struggle with another Kurdish group with links to Iran. The United States said U.N. Security Council resolutions approved after the Gulf War provided the legal basis for responding to Saddam's actions, although officials admitted the Iraqi leader had the right to move troops around within that part of his own country. Arbil, a Kurdish stronghold overrun by Iraqi forces on Saturday, was not in a zone placed off-limits to Iraqi troops by the United Nations after the Gulf War to protect the Kurdish minority. But U.S. officials said it lies within a "no-fly zone" and that U.N. resolutions broadly protecting against the repression of the Kurds apply. Despite claims by a Kurdish opposition leader that Iraq was using warplanes to attack his forces, U.S. officials said this was not the case and that there had been no violations of the "no-fly" zone. The budding crisis in the Gulf provided a tricky foreign policy challenge for Clinton during his re-election campaign. He needed to balance looking tough with putting U.S. lives at risk in a Kurdish factional struggle that few Americans understood or cared about. A senior U.S. official said containing Saddam was the aim. "You can't put him in a position to do whatever the hell he wants," the official said. Clinton's Republican opponent, Bob Dole, said in a speech to the U.S. National Guard Association in Washington on Sunday that the Clinton administration had brought the crisis on itself by failing to adequately warn Saddam against renewed aggression against the Kurds. "Saddam Hussein has been testing American leadership and found it lacking," Dole said, adding that Clinton relegated Iraqi affairs to "low-level" officials and that it was no surprise Saddam ignored "barely audible" U.S. warnings. McCurry sharply rejected the criticism, saying "we are confident that Saddam Hussein knows how gravely we take the situation." "This is a moment in which the United States would best speak with one voice in making it clear to Saddam Hussein that unjustified behavior cannot be accepted," he said. 7036 !GCAT !GPOL !GVOTE President Bill Clinton, described by aides as "dog tired" after a gruelling week of re-election politicking, caught his breath on Sunday as growing confidence gripped his campaign. Clinton, who courted voters in eight battleground states by train and bus before and after accepting the Democratic presidential nomination at his party's Chicago convention last Thursday, had only one event on his official schedule -- an evening rally with hometown supporters. White House spokesman Mike McCurry told reporters the president made a flurry of phone calls to foreign leaders to discuss unspecified U.S. "ideas" on how to punish Iraq for attacks on Kurds in northern Iraq. McCurry rejected Republican presidential candidate Bob Dole's claim that Iraqi President Saddam Hussein had been emboldened by the Clinton administration's failure to speak out firmly enough. "We are confident that Saddam Hussein knows how gravely we take this situation. That was communicated to him in a variety of ways," he said. Clinton was to return to the campaign trail on Monday with two appearances in Wisconsin before returning to Washington. Clinton, his voice hoarse and sore from more than two dozen speeches during the week, scrubbed a planned visit to Pennsylvania on Tuesday to get more rest. The Clinton campaign was elated by "October-size" throngs of cheering supporters who turned out wherever the president went last week. A "good sign" said a beaming Vice President Al Gore, who teamed with Clinton on a post-convention trip through Missouri, Illinois, Kentucky and Tennessee. The Clinton camp was further heartened by an array of polls showing Clinton leading Republican challenger Bob Dole by up to 21 percentage points in spite of a convention-week "speed bump" -- a sex scandal that forced the resignation of Dick Morris, Clinton's top political adviser. No challenger has ever overcome a lead that great this late in a U.S. presidential campaign. Voters choose between Clinton and Dole on Nov. 5. In an interview in Sunday's edition of the Arkansas Democrat-Gazette, Clinton expressed more sorrow than anger at reports that Morris shared White House secrets with a $200-an-hour prostitute with whom the married aide allegedly engaged in a year-long affair. "It was a painful story. I don't know whether it's true or not, but it was a painful story," said Clinton, whose own political career has been buffetted by allegations of womanizing. Turning to a domestic political issue, Clinton defended his decision to sign a welfare reform bill that many of his fellow Democrats claim will force more than one million children into poverty. He said he did so to try to galvanise the country into solving one of its most difficult social problems -- a cycle of dependency that grips an underclass largely made up of undereducated, single-parent families -- but he admitted the bill, which ends a 60-year guarantee of federal aid to the poor, was a gamble. "I think it's a real shame in a country with as much prosperity as we have to have an underclass that's big and intractable and alienated and isolated and which is generating a lot of our social problems," Clinton said. He added that the welfare reform bill will challenge critics of the present public assistance programme to come up with jobs for the poor and find ways of fighting out-of-wedlock pregnancy and other social ills that contribute to swelling the welfare rolls. 7037 !C11 !C18 !C181 !CCAT !E41 !ECAT !GCAT !GJOB Several thousand employees of Chase Manhattan Corp. were labouring over the Labour Day weekend to put the finishing touches on the consolidation of branches of the old Chase Manhattan and Chemical Banking Corp. New signs and new fliers describing bank products will be in place Tuesday morning after the holiday, said Lee Wilson, senior vice president of Chase. When the doors open Tuesday, customers of Chase and Chemical can make deposits and withdrawals and use automated teller machines at any of the combined organisation's 612 branches in New York, New Jersey and Connecticut. The 40 New Jersey branches will be a separate legal entity for a few months, although they will be integrated into the combined system over the weekend. There are 49 branches in Connecticut. When the merger of the old Chase Manhattan into Chemical was announced last year, officials said they planned to close 100 branches. Wilson said is still the plan, but that all branches will be open Tuesday and about 25 will be closed later this year. The remainder will be closed in 1997. Chase is also starting previously announced changes in its deposit products, which it says will result in lower costs for individual consumers and small business customers. Chase is also advertising that it is the first big New York bank to offer lower balance requirements for customers who confine their use of banking services to telephones, personal computers and other methods that bypass the teller. Wilson said new MasterCard ATM debit cards have been mailed to 700,000 customers in the New York metropolitan area. They permit customers to make purchases of merchandise and services with the payment taken out of their checking accounts. Another 600,000 cards will be mailed in the New York City area and 500,000 will be sent to customers in Texas, where the parent company has a separate retail banking business. "We're the only bank in New York issuing it on a mass basis," Wilson said. Chase Manahttan is touting its consolidation and new products with a multi-million dollar ad campaign that includes television, radio, outdoor and print advertising. The merger of the old Chase Manhattan and Chemical bank holding companies was completed April 1 in an $11.4 billion transaction. Although it was the second-biggest U.S. bank merger based on value of the deal, the resulting combination is the largest U.S. bank, with $321.8 billion in assets. The largest banking merger based on the value of the deal was the $12.3 billion combination of Wells Fargo & Co. and First Interstate, which created a Western banking giant. 7038 !GCAT !GDIS !GWEA Hurricane Edouard churned northwards Sunday, its 105 mph (168 kmph) winds presenting a threat to the vacation hotspots of Cape Cod and Nantucket Island off the coast of Massachusetts. At 2 p.m. EDT (1800 GMT), the center of Hurricane Edouard was located at latitude 37.6 north, longitude 70.1 west, about 220 miles (354 km) south of Nantucket. The storm was moving north at 15 mph (24 kmph). Edouard was expected to pass over Nantucket Island at 3 a.m. or 4 a.m. (0700-0800 GMT) on Monday and continue north over Chatham on Cape Cod by about 8 a.m. (1200 GMT) on Monday, meterologist Glenn Field said. "However, I advise extreme caution. There are a few subtle indications that it's drifting towards the west of north," he said. "If it were to move westwards...then we're looking at it going across Martha's Vineyard and across Plymouth and up into Boston Harbor." All Massachusetts state parks from Cape Cod north to the coast of New Hampshire were ordered closed from 6 p.m. (2200 GMT) on Sunday night and vacationers spending the Labor Day holiday along the shore will be urged to head in-land, said Arlene Margolis, a spokeswoman with the Massachusetts Emergency Management Agency. The storm was expected to pass east of New York's Long Island, according to meterologist Glenn Field, who said the island remains under a hurricane watch. Forecasters extended a hurricane warning from Rhode Island north to the Merrimack River in Massachusetts, with hurricane watches posted from New Jersey north to Rhode Island and from Massachusetts north to Eastport, Maine. The Federal Emergency Management Agency geared up for Edouard's arrival on the East Coast, putting emergency teams on alert. Teams were armed with communications equipment, power generators and supplies, officials said. Forecasters were also tracking Hurricane Fran, which had slowed to a speed of northwest at eight miles an hour at 11 a.m. EDT (1500 GMT) and was maintaining minimum hurricane strength of 75 mph (120 kph). Fran was located about 310 miles (498 km) northeast of San Juan, Puerto Rico. The storm remained in the open waters of the Atlantic and had the potential to strengthen, but forecasters said it was at least several days from threatening any land. Tropical storm Gustav has also been the object of Hurricane Center tracking. Forecasters said Gustav, with winds of about 40 mph (64 kph) was barely moving at 11 a.m. (1500 GMT) staying about 1,040 miles east ofof the Leeward Islands. 7039 !GCAT !GDIS !GWEA Hurricane Edouard churned northwards Sunday, its 110 mph (177 kmph) winds presenting a threat to the vacation hotspots of Cape Cod and Nantucket Island off the coast of Massachusetts. At 11 a.m. EDT (1500 GMT) Edouard was 275 miles (442 km) south of Nantucket Island, and headed north at 16 miles per hour (25 kmph) according to forecasters at the National Weather Service in Taunton, Mass. Edouard was expected to pass over Nantucket Island at 3 a.m. or 4 a.m. (0700-0800 GMT) on Monday and continue north over Chatham on Cape Cod by about 8 a.m. (1200 GMT) on Monday, meterologist Glenn Field said. "However, I advise extreme caution. There are a few subtle indications that it's drifting towards the west of north," he said. "If it were to move westwards...then we're looking at it going across Martha's Vineyard and across Plymouth and up into Boston Harbour." All Massachusetts state parks from Cape Cod north to the coast of New Hampshire were ordered closed from 6 p.m. (2200 GMT) on Sunday night and vacationers spending the Labour Day holiday along the shore will be urged to head in-land, said Arlene Margolis, a spokeswoman with the Massachusetts Emergency Management Agency. The storm was expected to pass east of New York's Long Island, according to meterologist Glenn Field, who said the island remains under a hurricane watch. Forecasters extended a hurricane warning from Rhode Island north to the Merrimack River in Massachusetts, with hurricane watches posted from New Jersey north to Rhode Island and from Massachusetts north to Eastport, Maine. The Federal Emergency Management Agency geared up for Edouard's arrival on the East Coast, putting emergency teams on alert. Teams were armed with communications equipment, power generators and supplies, officials said. Forecasters were also tracking Hurricane Fran, which had slowed to a speed of northwest at eight miles an hour at 11 a.m. EDT (1500 GMT) and was maintaining minimum hurricane strength of 75 mph (120 kph). Fran was located about 310 miles (498 km) northeast of San Juan, Puerto Rico. The storm remained in the open waters of the Atlantic and had the potential to strengthen, but forecasters said it was at least several days from threatening any land. Tropical storm Gustav has also been the object of Hurricane Centre tracking. Forecasters said Gustav, with winds of about 40 mph (64 kph) was barely moving at 11 a.m. (1500 GMT) staying about 1,040 miles east ofof the Leeward Islands. 7040 !GCAT !GDIP !GVIO U.S. forces were on high alert on Sunday for possible action in northern Iraq as the White House waited for Baghdad to honor its pledge to withdraw its troops from the Kurdish stronghold of Arbil. U.S. President Bill Clinton on Saturday made an unscheduled roadside stop during a post-convention campaign swing by bus through west Tennessee to denounce Iraq's storming of the Kurdish city as a matter of "grave concern." "Today I have placed our forces in the region on high alert and they are being reinforced," Clinton said. His announcement followed telephone consultations with advisers in Washington and a huddle with Vice President Al Gore between campaign stops. Baghdad later announced it would withdraw its troops from the region, but the White House remained skeptical and said it was waiting for proof. White House spokesman Mike McCurry, in Memphis with Clinton, said, "Given the provocations of Iraq, we don't put a lot of credibility in this. It's not what they say, it's what they do." McCurry was responding to comments by Iraq's deputy ambassador to the United Nations, Saeed Hasan, who told Reuters TV that Iraqi troops would soon be withdrawn. Clinton told a crowd in Troy, Tennessee, that Iraqi forces had overrun Arbil, in a part of northern Iraq controlled and populated by the Kurds, but that the situation was unclear, with reports of heavy fighting in populated areas. He added that there were indications that Kurdish factions might be involved in the operations with Iraq. "These developments ... cause me grave concern," Clinton said, adding: "It is premature at this time, and I want to emphasize that -- highly premature -- to speculate on any response we might have." White House chief of staff Leon Panetta said on NBC television's "Meet the Press" program that a team of high ranking U.S. officials was likely to be sent shortly to the region for talks with U.S. allies there, but did not provide specifics. "There will be a response," Panetta said. "Saddam Hussein continues to remain a threat to his own people and to the region and we have made it clear that this is unacceptable. "We have warned him that if he took that kind of action there will be consequences," he said. Panetta said that even if one of the Kurdish factions invited Iraqi troops to intervene, the move by Hussein was not justified. "Regardless of that (an invitation by the Kurdish faction) it's still not justified," he said. In Washington, Republican presidential candidate Bob Dole criticized U.N. Security Council resolution 986, yet to be implemented, which would allow Iraq to sell $2 billion of oil over six months to buy food and medicine for its population. The latest developments, Dole said, "reinforce my belief that the move to relax sanctions on the sale of Iraqi oil was premature and ill-advised and should not be implemented." Dole's comments prompted an angry response from McCurry. "We would strongly dispute the notion that the action was ill-advised," he said. "These were tightly structured sales for humanitarian relief." U.S. defense officials said U.S. military flights to enforce no-fly zones in both northern and southern Iraq had doubled over the weekend. A senior administration official traveling with the president said Iraq had not violated an allied no-fly zone established to protect the Kurds. U.S. plans rely heavily on air power to deter any advances by Baghdad, but there are also 23,000 U.S. troops in the area. Pentagon officials said four B-52 bombers were dispatched on Saturday to Guam, halfway between the United States and the Gulf. In addition to 158 F/A-18, F-14 and other fighter planes on the aircraft carriers Vinson and Enterprise, which were in the region, an Air Force air expeditionary force of 30 to 40 F-15 and F-16 fighter planes and fuel tankers was ready to fly from three bases in the United States, defense officials said. This would include nearly 1,000 Air Force personnel in ground and support crews, they said. Secretary of State Warren Christopher cut short a California vacation and returned to Washington on Saturday. He was reported to be consulting U.S. allies in the region about a united response. A senior administration official said the United States had repeatedly warned Iraq that it would be making "a very serious mistake" if it intervened in an internal power struggle among Kurdish factions that has caused bloody fighting in northern Iraq. But the official played down chances of an imminent U.S. military response to Iraqi defiance of Washington. "I expect to see over the course of coming days a fairly extensive diplomatic effort as the international community understands and addresses what we see happening in Iraq," the official said. 7041 !GCAT !GWEA Hurricane Edouard, with maximum winds of 115 mph (185 kph), was a diminished threat to coastal North Carolina on Saturday but an increased threat to the northeastern United States up to New England, the National Hurricane Center said. The receding threat persuaded residents and tourists on the Outer Banks of North Carolina to stick to plans to spend the Labor Day holiday weekend at beach communities. All hurricane warnings and watches were dropped for North Carolina. On the Outer Banks all roads and campgrounds were open, as were inns and most shops, and ferries were functioning. "We could afford to sit and wait and watch very carefully the progress of Edouard as it moves past our coastline," said Clarence Skinner, vice chairman of the Dare County Board of Commissioners. He said there appeared to be no threat to life or limb and that gale force winds were not expected actually to strike the coast. But ocean overwash during high tides remained a concern. "That could stop traffic on Highway 12," the only road to get people in some of the villages back to the mainland, Skinner said. Although cars with surfboards on the roof had headed toward the beach, red flags indicating "no swimming" flapped in heavy winds along the beaches. "The water's a little angry and you can have these sudden high washes that can take you off shore, and it can happen without warning," Skinner said. Overall foot traffic was lighter than usual, too. "For a Saturday, on Labor Day weekend, this place should be packed," a rescue worker patrolling the beach said. Instead, a few people walked the beaches, some with children and pets. Earlier, people were biking, jogging, in-line skating and playing golf in Manteo and neighboring Nags Head, Kill Devil Hills and Kitty Hawk. At 11 p.m. EDT (0300 GMT), the center of Edouard was located at latitude 34.7 north, longitude 70.2 west, about 450 miles (720 km) south-southeast of Long Island, New York, and was moving north at 16 mph (26 kph). Forecasters extended a hurricane watch from Cape Charles north to the Merrimack River, Massachusetts, and a tropical storm warning was in effect from Cape Charles to Cape Henlopen, Delaware. The Federal Emergency Management Agency geared up for Edouard's possible arrival on the East Coast, putting on alert emergency teams armed with communications equipment, power generators and supplies, officials said. But for Susan Scofield, visiting North Carolina from Washington state, Edouard was less a threat than a spectacle. "It's exciting," she said, watching from a walkway near her Nags Head hotel as the waves climbed. The Outer Banks are a slender strip of islands inside the Gulf Stream and in some places more than 20 miles (32 km) from the North Carolina mainland. The barrier islands, as they are called, prevent big ocean waves and storm surges from reaching the mainland. They are home to about 42,000 people and a prime tourist attraction. Members of the hotel industry said Edouard was not affecting business. "The Weather Channel didn't overreact this time. It just destroyed us last time," Holiday Inn manager Michelle Sears said, referring to Hurricane Bertha, which struck last month. Forecasters were also tracking Fran, which was upgraded to a hurricane with maximum winds of 75 mph (120 kph). At 11 p.m. EDT (0300 GMT), Hurricane Fran was located at latitude 21.9 north and longitude 62.4 west about 330 miles (530 km) northeast of San Juan, Puerto Rico, and moving to the northwest at 7 mph (11 kph). The storm remained in the open waters of the Atlantic and had the potential to strengthen, but forecasters said it was at least several days from threatening any land. 7042 !GCAT !GCRIM !GPOL Republican presidential candidate Bob Dole on Saturday said President Bill Clinton's anti-drug strategy sends a "no big deal" message to youth and has led to an increase in drug use in the past four years. "Unfortunately, from its very first days in office, the Clinton administration -- through neglect and ineptitude -- has sent a very different message. A message that drugs are no big deal," Dole said in an radio address. Dole was to unveil an anti-drug strategy on Sunday before the National Guard Association which would call on the guard to help in the fight and would beef up funding for the Office of National Drug Control Policy. In Washington where he was meeting with campaign staff in advance of the Sunday speech, Dole said the Democratic president had reversed the strong anti-drug message of the Republican administrations of Ronald Reagan and George Bush. Dole dismissed as "one day of rhetoric" the president's reference in his nomination acceptance speech to the damage done by drugs in his own family where he said his half-brother was nearly killed by drugs. Dole said he would use the White House as a "bully pulpit" against the glamorization of drugs. "I will not be afraid to criticise those in the entertainment industry and elsewhere who glamorize drug use," he said. Dole's campaign manager, Scott Reed, told CNN the campaign would take on the fight against drugs as "a moral issue, that this country will now do something about this drug epidemic that is wiping out generations of our kids in school." He said Dole would propose ways to improve coordination between the military and law enforcement and other federal agencies such as the Immigration and Natural Service and the U.S. Customs Service. The Clinton campaign fired back on Saturday with a new advertisement rebutting the Dole anti-drug ad, which accused Clinton of cutting the budget for the campaign against drugs by 83 percent and cited a statement by Clinton's former surgeon general, Jocelyn Elders, that she considered legalising drugs. The new Clinton ad said the president expanded the federal death penalty to include drug kingpins, increased funding by 40 percent for border agents and put a record number of drug felons in federal prisons. 7043 !GCAT !GPOL !GVOTE As the sun went down over the Mississippi River, President Bill Clinton and Vice President Al Gore on Saturday rolled into Memphis to end a two-day bus tour that drew welcoming crowds in tiny towns in four key states. Creeping along at about 30 to 40 miles (48 to 64 km) an hour, Clinton and Gore and their wives Hillary and Tipper and their 14-bus caravan stopped often at rural communities stirring up grass roots support for the Clinton-Gore ticket's re-election on Nov. 5. The bus tour wound through parts of Missouri, Illinois, Kentucky and Tennessee, Gore's home state, all states that Clinton carried in 1992 and considers important to his re- election bid. After travelling about 225 miles (362 km) over 21 hours on Friday and Saturday, the buses stopped, two hours late, at a boisterous Memphis rally of more than 10,000 people, where Clinton and Gore preached their gospel of economic prosperity and urged supporters to help them "build a bridge" to the 21st century. "You've made us very happy tonight -- everyone here," Clinton said sweeping his arm out toward the crowd. "Hillary and Tipper and Al and I, we kind of like doing this. Can you tell it?" The crowd roared. Gore apologised for being late but said "in every little town we've gone through there's been a big crowd and in many of them the crowd was of such a size that the president said, 'we've just got to stop.'" Since Clinton began campaign travelling a week ago, he has delivered over two dozen speeches, some long and some short, and talked to countless voters. It has left his voice hoarse and his throat sore, and White House spokesman Mike McCurry said Clinton was treating his throat with an anti-inflammatory spray. The president, described as "dog tired" by aides, cancelled a planned trip to Pennsylvania on Tuesday in order to get some rest from his relentless schedule. Along the bus route the candidates passed flocks of people on the roadside waving their hands. The rural setting was lined with cornfields as well as mobile homes and abandoned cars. A cemetery in Covington, Tennessee, had a U.S. flag and a Confederate flag. In Troy, Tennessee, Clinton with one breath talked about getting a kiss from 101-year-old Mrs. Jim Bob Robertson and with the next announced that in keeping with his commander-in- chief duties he had put U.S. forces on high alert in response to Iraqi attacks on Kurdish rebels in Northern Iraq. "She may be 101 years old, but she still kisses real good," Clinton said as the crowd roared with laughter. At rally speeches, Clinton insisted his policies have led to strong economic growth in America and rejected Republican Bob Dole's proposed 15 percent across-the-board tax cut as unaffordable. He promoted his more modest proposals for tax reductions for middle-class families, including a new one announced on Thursday at the Democratic National Convention in Chicago to free homesellers of a burdensome capital gains tax. New polls showed Clinton getting a boost out of the convention and leading Dole by up to 21 percentage points despite the alleged sex scandal involving his former top campaign manager, Dick Morris, who resigned on Thursday. In an interview on Friday with MTV, Clinton said he had no plans to rely on Morris as a political advisor in the future but would talk to him as a friend. 7044 !GCAT !GPOL The White House on Sunday accused Bob Dole's presidential campaign of "grasping" in demanding the release of President Clinton's medical records, and said Clinton has made public more health data than Dole had provided. "The Dole campaign, frankly, is just grasping at anything they can find. You know, when you're 20 points behind (in the polls) or 10 points behind or however far behind they are, I guess that's what you do," White House spokesman Mike McCurry said. The matter of Clinton's medical records arose because of questions about a small but noticeable growth on the side of the president's neck. McCurry reminded reporters that the growth was diagnosed as a "benign inclusion cyst" when Clinton, 50, had his annual medical checkup in May. Clinton "has an ingrown pimple that's not a problem," McCurry said, adding that it will be removed at some point on an outpatient basis. McCurry said Clinton, as a candidate for president in 1992, had given the public "more complete medical information ... than Senator Dole has released to date." "We are not going to make health an issue in this campaign, nor will we make age an issue in this campaign," the White House spokesman said. Dole, 73, is the oldest candidate ever to seek a first term as president. 7045 !E41 !ECAT !GCAT !GJOB !GPOL Companies charged with workplace safety violations, most of them considered serious, did $38 billion in business with the federal government two years ago, according to a report issued Sunday. The 261 companies, which include many Fortune 500 firms, represent only a fraction of the estimated 60,000 federal contractors but took in about one-fifth of the money the government spent for goods and services in 1994, the report by the General Accounting Office said. The GAO, the investigative arm of Congress, prepared its report for Sen. Paul Simon, D-Illinois, who has sponsored legislation that would deny federal contracts to chronic violators of workplace safety laws. "This legislation will help to ensure that employers who repeatedly disregard the safety and health of their workers will face consequences for their failure to abide by the law," said Simon, who is retiring from the Senate after this year. The GAO said that many government agencies that make contracting decisions already have the authority to suspend companies from federal contracts for up to three years, but are unaware of the companies' safety violations. It recommended that the agencies regularly share information with the Labor Department's Occupational Safety and Health Administration, which enforces workplace safety laws. Better information-sharing "would increase the likelihood that a company's safety and health record is considered in decisions to award a contract or to debar or suspend an existing contractor," the report said. "Agencies could use the awarding of federal contracts as a vehicle to encourage companies to take more affirmative steps ... to improve workplace safety and health," it added. More than three-fourths of the $38 billion in government business that went to the 261 companies was for defense contracts, the GAO said. There were 35 deaths at the workplaces of the companies cited by OSHA in 1994 and 89 percent of the violations involved at least one "serious" violation that posed a risk of death or physical harm to workers, the GAO said. In 69 percent of the cases OSHA deemd the violations "willful," it said. Most of the violations were of general industry standards, such as failing to protect workers from electrical hazards and injuries from inadquate guarding of machines, the GAO said. The report noted that the workplaces cited for violations sometimes represented only a small fraction of the companies' work sites and that some of the companies' other work sites had exemplary safety records. In all, there were 6,588 deaths -- and average of 18 a day -- in American workplaces in 1994, according to the Labor Department's Bureau of Labor Statistics. In examining the safety records of federal contractors, the GAO said its investigators selected only those companies for whom OSHA proposed "significant" penalties of at least $15,000, which narrowed the study to the most serious 3 percent of the violations discovered by the government. During settlement discussions, the size of the penalties the companies eventually pay are usually reduced signifiantly. In the case of the 261 cited companies, penalties totaling $24.1 million were proposed after 345 inspections, but that was cut to $10.9 million by the time the cases were closed. Simon also has offered legislation to disqualify violators of federal labor law from receiving federal contracts. Neither of the two bills are given must chance of passage before the current session of Congress ends later this year. 7046 !GCAT !GDIP !GPOL !GVOTE President Bill Clinton and his Republican rival Bob Dole squared off on Sunday over the latest Gulf tensions as Iraqi President Saddam Hussein's renewed aggression pushed international issues to the forefront of the election campaign. Clinton took a break from a grueling schedule that included courting voters in eight states by bus and train over the past week, but soon was occupied instead with fashioning a U.S. response to Hussein's defiant attack against the Kurds in northern Iraq. The storming of Arbil took the Iraqis across a line the United States had insisted Baghdad not cross and into an area populated mostly by Kurds whom U.S.-led forces were pledged to protect. Clinton, in Little Rock, Arkansas, called world leaders including British Prime Minister John Major, French President Jacques Chirac, German Chancellor Helmut Kohl and several Arab leaders who, the White House said, shared the administration's concern about the military activity in northern Iraq. While the president discussed possible responses with foreign policy and diplomatic advisers in Washington and waited for Baghdad to honour a reported pledge to withdraw its troops, his Republican challenger in the November election criticised the White House for failing to be firm enough with Hussein. "Saddam Hussein has been testing American leadership and found it lacking," Dole told a meeting of the National Guard Association. He faulted Clinton for relegating Iraqi affairs to "low level" officials and said it was no surprise that Hussein had ignored "barely audible" U.S. warnings. Clinton, who made an unscheduled stop on his campaign bus trip on Saturday to denounce Iraq's move and express "grave concern," left it to his aides on Sunday to take up the public refrain. White House chief of staff Leon Panetta declared that Hussein remained a threat to his own people and to the region and said the United States needed to make clear that "this is unacceptable." In Little Rock, White House spokesman Mike McCurry told reporters the attack was unjustified and said the president believed Hussein "cannot conduct himself with impunity, that there should be consequences." Dole kept up a full day of campaign appearances but used each to make some remarks about the Iraqi situation and the Clinton Administration's handling of it. He criticised U.N. Security Council Resolution 986, yet to be implemented, which would allow Baghdad to sell $2 billion of oil over six months to buy food and medicine. The latest developments, Dole said, reinforced his belief that the move to relax sanctions was "premature, ill-advised and should not be implemented." The White House strongly disputed Dole's comments, pointing out that the sales were "tightly structured" and for humanitarian relief only. Speaking to a meeting of B'nai B'rith, Dole took aim at Clinton's overall Middle East policy, saying he would be better placed as president to develop a close relationship with Israel's new conservative Prime Minister Benjamin Netanyahu. With Clinton taking a break from the hurly-burly of campaigning on Sunday, and Dole watching the gulf between them widen to as much as 15 points in some polls, the domestic political stage also was left to the Republican who pressed ahead with his effort to make drug abuse one of the centerpieces of his underdog campaign. Dole seized upon the issue several weeks ago when a government survey showed that illegal drug use among teenagers had soared since Clinton took office and on Sunday he vowed to enlist the National Guard in the war on narcotics. Noting that much of the marijuana on U.S. streets was now being grown domestically, Dole said he would use the Guard's intelligence capacities to track those fields and send the message: "If you're growing this trash -- beware. You'll be whacked, stacked and jailed." 7047 !GCAT !GVIO A small crowd of people who are disaffected and suspicious of the federal government held a rally Sunday calling for greater personal freedom and railing against gun control. Organisers of the event, billed as "Liberty Weekend: A Rally for the Bill of Rights," had predicted a turnout of 15,000 people near the U.S. Capitol but fewer than 500 showed up for the two-day protest. Speakers denounced the United Nations, immigration, the Department of Education, the Internal Revenue Service, "media elites," the "New World Order" and both political parties. The demonstration was sponsored by The Committee of 1776, an anti-gun control organisation, and Citizens Against Legal Loopholes, a company that markets videos and books that describe various conspiracy theories and warn of armed confrontation scenarios. Participants carried signs and displayed stickers stating "Love Your Country, Fear Your Government," "Slaves R Us: New World Order," "Gun Control Kills Kids," and "Don't Tread on Me Big Brother." Speakers voiced support for right-wing militia causes and said the government was active in widespread wiretapping and illegal searches and seizures. There were numerous references to the federal raid on the Branch Davidian compound in Waco, Texas, on April 19, 1993, in which about 80 people were killed. Former FBI agent Ted Gunderson said the bombing of a federal building in Oklahoma City that killed 168 people on April 19, 1995, "was an incident that was created by an evil element within our government to hasten the passage of anti-terrorism legislation." Gunderson predicted riots and disorder that will "be the excuse to bring in the troops, declare martial law ... take over the airports, take over transportation, take over the food supply." 7048 !GCAT !GPOL Republican presidential candidate Bob Dole on Sunday vowed to enlist the National Guard in the war on drugs, promising to use the Guard to protect U.S. borders and a "whack and stack" policy against marijuana. Dole has placed drugs at the centre of his underdog campaign since a recent survey showed illegal drug use among teenagers had gone up since President Bill Clinton took office. He outlined the role for the military in a speech to the U.S. National Guard Association. Expanding on comments made earlier this weekend, Dole also condemned the Clinton administration for failing to adequately warn Iraqi leader Saddam Hussein against renewed aggression against the Kurds. "Saddam Hussein has been testing American leadership and found it lacking," Dole said of Iraqi incursions into Kurdish areas. He faulted Clinton for relegating Iraqi affairs to "low level" officials and said it was no surprise that Saddam Hussein has ignored "barely audible" U.S. warnings. Dole pledged that if he is elected president, he would restore National Guard funding for anti-drug programmes to 1993 levels of $230 million. Funding for the programme was cut to $158 million in the current fiscal year. He also said he would immediately work with Guard leaders to develop a drug strategy for the National Guard, a voluntary state-based militia that serves as a reserve branch of the army for emergencies. Noting that much of the marijuana on U.S. streets is now grown domestically, Dole said he would use the Guard's intelligence capacities to find the fields and send a message to growers, "If you're growing this trash -- beware: You'll be whacked, stacked and jailed." Dole vowed to cut off military, technology and trade assistance to any country that does not cooperate in battling drugs. "We will halt all assistance and cooperation," he said. "We will impose comprehensive sanctions, no ifs, ands, no buts." Calling illegal drugs the "moral equivalent of terrorism" and using nuclear war allusions in his campaign ads, Dole has hit hard at the drug issue and accused Clinton of "running up the white flag" in the drug war. In a recent spate of speeches on drugs, Dole has noted the traditional reluctance to use the military to confront domestic problems but said drugs come from abroad and are thus not only a home-grown problem. Dole has said that if elected he would call on his defence secretary and military leaders to draw up battle plans for the war on drugs, including contingency plans for interdiction along the southern U.S. border. 7049 !GCAT !GDIP President Clinton on Sunday called several world leaders to discuss how to react to Iraqi military action against the Kurdish minority in Northern Iraq, the White House said. "The outcome of these calls was strong agreement that we should work together to fashion the appropriate response," White House spokesman Mike McCurry said, adding that Iraq would face unspecific "consequences" for military action the United States believes is unjustified. McCurry said Clinton, spending the weekend in his home state, called less than a half dozen world leaders "who share our concern about Iraqi military activity in Northern Iraq." He would not give specifics but other officials said Clinton talked to British Prime Minister John Major and was likely to speak with French President Jacques Chirac and German Chancellor Helmut Kohl as well as a number of Arab leaders, including Saudi Arabia's King Fahd, Egyptian President Hosni Mubarak and Jordan's King Hussein. "I am not drawing lines in the sand, that is not the purpose of the consultations we have under way," McCurry told reporters. He added: "There is no justification for the military action (Iraqi President) Saddam Hussein has taken in the north of his country directed apparently against one faction of the Kurdish population there, and the United States believes that he cannot conduct himself with impunity, that there should be consequences..." 7050 !GCAT The Olympics are over. The athletes have gone home. The excitement and intensity of hosting the Games after years of preparation has begun wearing off, but a myriad of social, political and financial questions remain for the city of Atlanta. Sidewalks built for Olympic visitors are already cracking because they were installed in haste. Trees shoved in the ground weeks before the Games started have begun to die. The lingering problems may be minor inconveniences for most residents, but they could play a role when Atlanta Mayor Bill Campbell seeks re-election next year. The city's emergency telephone system is under investigation after the embarrassing revelation that law enforcement personnel at Centennial Olympic Park were never told about a bomb threat on July 27, about 20 minutes before a pipe bomb killed two people and injured 111 others. Campbell has named a "blue-ribbon task force" to examine the $38 million system but said a dispatcher who did not call a bomb centre until two minutes after the explosion had acted properly. "If something had been done differently, it would not have prevented the tragedy in Centennial Olympic Park," he said. When a public hearing on the 911 system was held last month, residents lined up to complain that for years they have been getting a recording or have been put on hold when they call the emergency number. Campbell also defended an Olympics street vendor programme -- criticised internationally as excessively commercial -- as "a festival atmosphere...enjoyed by all." The programme was administered by longtime Campbell friend Munson Steed, who was awarded the multi-million dollar contract by a City Council dominated by the mayor's allies. Lawsuits have been filed against the city, Steed, and the Atlanta Economic Development Corporation, which has already agreed to refund city permit fees for some vendors because of their complaints. The city's problems, which are at odds with Campbell's national image as a popular big-city mayor, may hurt his attempts to win re-election next year, said Horace Tate, a longtime state legislator. "A lot of people I talk to are upset with him. They don't think city services are there for them. They see garbage sit and they see potholes that don't get fixed," Tate said. Aside from questions about Atlanta government, there was disappointment about the economic benefits from the Olympics. Georgia's economic growth will be "substantially slower" in the wake of the Games and unemployment will rise, said Donald Ratajczak, a Georgia State University economist. He estimated that the six-year economic impact of the Olympics will be about $4 billion, less than the $5.1 billion figure touted by local organisers. Many Atlanta merchants saw business drop during the Games and nearby cities did not see the tourism benefits they had hoped for, officials said. Many visitors stayed with friends and family and local residents accounted for a higher proportion of ticket sales than anticipated. Leaders of impoverished neighbourhoods near Olympic venues also said they did not see the gains they anticipated. "I had hoped this would be a bonanza for us, but we might wind up in the hole," said Douglas Dean, community activist in the Summerhill neighbourhood adjacent to the Olympic Stadium. The Olympics also raised the broader question of Atlanta's image and future. Emory University urban studies professor Dana White said Atlanta has been in the business of "civil celebration and self-promotion" for more than a century and continues to rely on big events like the Super Bowl, the World Series and the Olympics to attract attention. 7051 !GCAT !GPOL !GVOTE By Alan Elsner, U.S. Political Correspondent President Bill Clinton enters the final two months of the 1996 presidential election campaign with a powerful and likely overwhelming advantage over Republican nominee Bob Dole. Emerging from the Democratic convention, Clinton's lead over Dole in two polls was back around 20 percentage points. Put simply, no challenger has ever overcome a lead that great this late in the campaign. With Clinton, the unexpected can never be ruled out. The forced resignation last Thursday of his chief campaign strategist Dick Morris in the face of sleazy sexual allegations was a reminder that this president has lived his entire political career close to the edge. New Middle East Gulf tensions arising from menacing troop movements by Iraqi leader Saddam Hussein provide a warning that an unexpected foreign crisis could always erupt, injecting uncertainty into the domestic campaign. However, with the economy strong and Clinton's personal approval ratings hovering close to 60 percent, it would probably take a genuinely major setback at home or abroad to stop the president winning re-election on Nov. 5. The candidate leading in the first polls of September in past elections almost invariably goes on to win the election in November. "Polling over the past six decades suggests that for Bob Dole to overcome Clinton's popularity and current lead in the polls would be unprecedented," said an analysis by pollsters David Moore, Frank Newport and Lydia Saad of Gallup. It was published in early May when Clinton's lead over Dole stood at 21 points and his personal approval rating was just over 50 percent. What was true in early May is doubly true in early September. Of course, U.S. presidential elections actually consist of 51 separate winner-take-all elections in the 50 states and the District of Columbia. Each state elects representatives to an Electoral College, where 270 votes are needed to win the presidency. Examining the state-by-state situation, Clinton's advantage over Dole is equally impressive. In polls last week, before Clinton received an additional boost from the Democratic convention, Clinton held leads outside the statistical margin of error in 25 states -- enough to give him 309 Electoral College votes. Dole led in only four states with 21 votes. The president led Dole in an additional nine states, but his advantage in these was within the polls' margin of error. Dole led Clinton in an additional 12 states within the margin of error. Adding these in, Clinton would win the election by 404 to Dole's 126 in the Electoral College. Democratic strategists expect the race to tighten somewhat in the next few weeks as Dole brings Republican voters home. There is also the unpredictable factor of Texan billionaire Ross Perot, running as nominee of the Reform Party which he created. Perot's support has collapsed in recent week. But even if it recovers as he starts to run his half-hour television "infommercials", analysts do not believe the president's overall lead will suffer much. Dole has to make a move quickly to be seen as credible. The problem is, it is difficult to see what he can do and some of his supporters may begin to lose hope if Clinton's lead remains solid. The first of three scheduled presidential debates is not planned until Sept. 25, by which time the election will only be six weeks away. In any case, Clinton is such a superb debater that Dole's backers place no great hopes of landing a knock-out blow in a face-to-face confrontation. Dole will soon begin to face some unenviable choices. He has $62 million to spend, but it is impossible to fight a real campaign in all 50 states. Just to put television advertisements on the air in California can cost $15 million or more. The Republican nominee must simultaneously shore up his southern base, which is not yet secure, and decide where he is going to put the bulk of his resources. Does he concentrate on the Midwestern belt of Ohio, Michigan and Illinois and concede California, with its 54 electoral votes, to Clinton? Or does he pour good money after bad into California, and risk losing the Midwest? For Clinton, the choices are easier. He is still highly competitive in states he does not have to win, like Florida and Texas. He is unassailable in the Northeast and leads solidly in the Midwest. It all adds up to a probable victory in November. 7052 !GCAT !GDIS !GENV Hurricane Edouard headed north on Sunday, its 115 mph (185 kph) winds presenting a threat to the northeast Atlantic coast. At 5 a.m. EDT (0900 GMT) Edouard was 375 miles (603 km) south of Nantucket Island, Mass., and headed north at 15 miles per hour (24 kph) according to forecasters at the National Hurricane Center in Miami. The storm was expected to pass east of New York's Long Island, according to meteorologist Mike Hopkins, who said the island remains under a hurricane watch. Forecasters extended a hurricane warning from Rhode Island north to the Merrimack River in Massachusetts, with hurricane watches posted from New Jersey north to Rhode Island and from Massachusetts north to Eastport, Maine. The Federal Emergency Management Agency geared up for Edouard's possible arrival on the East Coast, putting emergency teams on alert. Teams were armed with communications equipment, power generators and supplies, officials said. Forecasters were also tracking Hurricane Fran, which had slowed to a speed of northwest at six miles an hour (10 kph) at 5 a.m. EDT (0900 GMT) and was maintaining minimum hurricane strength of 75 mph (120 kph). Fran was located about 320 miles (514 km) northeast of San Juan, Puerto Rico. The storm remained in the open waters of the Atlantic and had the potential to strengthen, but forecasters said it was at least several days from threatening any land. Tropical storm Gustav has also been the object of Hurricane Center tracking. Forecasters said Gustav, with winds of about 40 mph (64 kph) was barely moving at 5 a.m. (0900 GMT) staying about 1,100 miles (1,770 km) east of Antigua. 7053 !C42 !CCAT !E41 !ECAT !GCAT !GJOB The American labour movement may not be growing, but on Labour Day 1996 it is on the move. From college campuses to the halls of Congress, from the public airwaves to the political arena, a reinvigorated union movement is making its presence known. "What we have is a labour movement that's more visible and active and aggressively trying to do some things, both in the political arena and in organising," said Richard Hurd, director of labour studies at Cornell University. Less evident, however, is the impact labour's new-found enthusiasm is having on its membership, which has yet to show any sign of ending its decades-long downward trend and last year skidded to 14.9 percent of all wage and salary workers and just 10.4 percent in the private sector. Even labour-friendly scholars do not foresee the kind of great surge in union membership that marked labour's heyday of the 1930s and 1940s and peaked in the mid-1950s when one-third of American workers carried union cards. "That kind of upsurge is not going to happen again," said American University historian Michael Kazin. "The conditions are just very different." Kazin, who said it would be "a great accomplishment" for unions to regain a 20 percent share of the workforce, said such a rebound would require vigorous union leadership, political support and "some receptivity" among employers. Labour, he said, now has only one of those ingredients: an energetic leadership team that took office last October in the 76-union AFL-CIO's first contested race in 40 years after forcing the ouster of its low-key president, Lane Kirkland. Led by President John Sweeney, the AFL-CIO has undertaken ambitious drives to oust hostile lawmakers and to amass a $20 million organising warchest that has since prompted some of its affiliated unions to beef up their own organising budgets. The effort included recruiting 1,500 young people, mostly from college campuses, for a 1960s civil rights era-like "Union Summer" series of organising drives that Newsweek magazine covered in a July story headlined "It's Hip To Be Union." Most of the organising drives have been aimed at low paid workers with jobs in hotels, cleaning services, nursing homes and other service industries that cannot be exported. On the political front, Sweeney, whose book "America Needs A Raise" goes on sale Monday, won a coveted prime-time speaking role at the last week's Democratic National Convention in Chicago where 28 percent of the delegates were union members. The AFL-CIO, which is backing President Bill Clinton despite differences over trade and welfare, has raised an unprecedented $35 million for issue-oriented TV spots, voter registration and political training aimed at ousting its congressional enemies. Republicans and business groups are taking note. The House Republican Conference started issuing its regular "Washington Union Boss Watch" that attacks union leaders and asserts that they are out of touch with rank-and-file workers. Business groups have banded together to form "The Coalition" to raise money for their own advertising campaign. "One thing that does strike me ... is the degree to which labour's presence is being noticed by Republicans," said labour historian Robert Zieger of the University of Florida. Even if labour's new leaders can win strong political support for all of their efforts, a membership rebound still must overcome a new anti-union animus among employers who for decades accepted unionization as preferable to labour unrest. 7054 !GCAT !GPOL After a month-long recess, Congress returns this week for a final effort to pass laws before members leave the capital once again to campaign for re-election in the Nov. 5 poll. The last session of the 104th Congress will be overshadowed by the presidential campaign, getting its traditional Labour Day start this weekend after the Republican and Democratic national political conventions. Of course, President Clinton and Republican nominee Bob Dole have been campaigning for months. Now members of Congress are feeling the itch to concentrate on electoral politics. "Everybody will be in their political partisan mode" this month, Senate Majority Leader Trent Lott, a Mississippi republican, predicted before Congress adjourned. An expert on elections said that means not much will be accomplished. "My guess is they will do the bare minimum they have to do, get out of here and go back and campaign," said Candice Nelson, an American University professor who directs the Campaign Management Institute there. But Before Congress leaves, late this month or early in October, it must complete work on appopriations bills needed to keep government running. Polls show the public has blamed Republicans for two government shutdowns in deadlocks over government spending. In his convention speech Clinton dared them to make another "blackmail threat," promising to resist again. But Republican leaders are anxious to avoid a confrontation that could hurt them and say they will reach agreement with the administration. Twelve of the 13 spending bills, which together cover about $500 billion in spending for fiscal 1997 starting Oct. 1, remain to be completed. Leaders say if they do not finish, then a stop-gap bill will keep government running. There is also other business. This week the Senate will take up the Defence of Marriage bill, passed earlier by the House, which bars federal pension benefits for individuals in same-sex marriages and says states need not recognise such marriages made in other states. Clinton has promised to sign the bill. No state permits such marriages. Clinton called on Congress to ratify a treaty aimed at banning production, possession or use of chemical weapons. The Senate is expected to vote by Sept. 14 on ratification. The House will consider bills which are given little chance of becoming law in the near future, but will highlight Republican views for voters. For example, the House may complete action on a juvenile justice bill which permits children of 13 or 14 to be tried as adults for federal crimes. The bill would also slap a mandatory 20-year sentence on top of other penalties in drug or violent crime cases if a weapon is fired. The House will also try to override Clinton's veto of a bill banning some late-term abortions. While the effort is expected to fail, it will help underscore the Republican opposition to abortion. Democrats are also trying to make political points. In his speech, Clinton renewed a call for Congress to expand the government's authority to wiretap and to put chemical markers or taggants in gunpowder, powers he said were needed to fight terrorism. But Republicans have already turned down that request once and no action is expected now. 7055 !GCAT !GPOL The Kremlin is using old-style propoganda tricks to hide the ill health of Russian President Boris Yeltsin, the Washington Post reported on Sunday. The newspaper quoted a Russian political source as saying the camera crews that taped a preelection speech by Yeltsin that was broadcast on July 1 found Yeltsin pale and weak and breathing heavily, although his spokesman said at the time that he was "in good form." In fact, Yeltsin could barely get through the brief speech, which had to be taped three times and edited heavily to produce the tape that was eventually broadcast. Yeltsin had retreated to Barvikha shortly before the final vote in the two-part Russian election. One of those who saw Yeltsin during the taping later told colleagues in Moscow, "The grandfather is in bad shape," the Post reported. To hide Yeltsin's condition, the videotape was heavily edited, including the cropping out of white-coated doctors visible when Yeltsin cast his vote on July 3. Editors took 10- and 15-second sections of the videotape of the preeelection speech and spliced them together, leaving out any in which Yeltsin looked bad, the paper said. "It was like trying to find gold in the sand," the source told the paper. "Our job was to show he looked better than in reality." 7056 !C42 !CCAT !E14 !E21 !E211 !E41 !ECAT !GCAT !GJOB !GPOL President Clinton, complying with a midnight statutory deadline, Saturday gave white-collar federal workers a 2.3 percent increase in their base pay for 1997, the Washington Post reported Sunday. Lawrence Haas, spokesman for the Office of Management and Budget, told the paper that the increase was the first step toward giving nearly two million federal workers a three percent pay raise next year. Clinton called for a three percent pay raise in his budget request to Congress earlier this year. 7057 !GCAT The Washington Post carried the following items on the front page of its business section: --- WASHINGTON - AFL-CIO president John Sweeney is trying to reach out to young people and convince them that unions are the best way to achieve social justice. --- WASHINGTON - Rupert Murdoch's Fox network is in a rut, despite the billions spent on it over the past 10 years. --- WASHINGTON - A federal appeals court has handed banks a major victory in their drive to limit the growth of credit unions, ruling that large credit unions with members who work at different companies are forbidden by law. 7058 !GCAT The Washington Post carried the following stories on its front page on September 1: --- WASHINGTON - Iraqi President Saddam Hussein defied U.S. warnings and sent armoured columns into a northern Kurdish enclave, triggering a new confrontation with the United States and its allies. --- WASHINGTON - Minorities account for more than two-thirds of the Washington area's population increase since 1990. --- WASHINGTON - The Nation of Islam and many businesses and properties linked to it are beset by financial problems. --- CHICAGO - Democrats are wary of overconfidence, but have no trouble seeing a rosy ending to Bill Clinton's bid to stay in the White House for four more years. --- MOSCOW - Russian President Boris Yeltsin was in far worse health just before the final vote of the Russian election in June than his advisers admitted. 7059 !GCAT !GDIP !GVIO The White House reacted cautiously on Saturday to Iraq's announcement that it planned to withdraw its troops from the Kurdish region of northern Iraq. White House spokesman Mike McCurry, traveling with Clinton in Memphis, said, "given the provocations of Iraq, we don't put a lot of credibility in this. It's not what they say, it's what they do." McCurry was responding to comments by Iraq's deputy ambassador to the United Nations, Saeed Hasan, who told Reuters Television in an interview that Iraqi troops would "very soon" be withdrawn from the Kurdish city of Arbil. 7060 !GCAT !GDIP !GVIO Iraq's deputy ambassador to the United Nations on Saturday confirmed that Iraqi troops would be withdrawn from the Kurdish city of Arbil. Saeed Hasan, Iraq's deputy permanent representative to the U.N., told Reuters TV in a telephone interview that no date had been set for the troops' return, but it would be soon. Hasan, who was interviewed by Reuters Television in New York after a meeting of the Iraqi government leadership in Baghdad early on Sunday, said it was decided that "the Iraqi armed forces have achieved their goals and the troops will return to their original positions, but no date has been set for the return." Hasan said the troops would return in a very short period. A spokesman for the Revolutionary Command Council earlier said the troops would be withdrawn in a statement carried by the official Iraqi news agency INA, but Hasan's comments were the first official confirmation of this decision. Iraqi troops and tanks on Saturday captured the city of Arbil, expelling one Kurdish faction and installing a rival group more amenable to Baghdad. The seizure of the city in the biggest Iraqi military incursion into northern Iraq in five years prompted the United States, Iraq's Gulf War enemy, to put its forces in the Middle East on high alert. 7061 !C13 !C21 !CCAT !GCAT !GENT U.S. News & World Report screened the pilots for 34 television shows debuting this fall and rated only five "suitable for all ages." In its Monday edition, the magazine said a poll it conducted of 373 parents with children younger than 18 found that 62 percent of families want a television ratings system that sheds light on programme content. Spurred by the poll the magazine created its own ratings system that graded programmes for sexual content, violence, language, horror and age appropriateness. Of the 34 pilots, only five were rated "suitable for all ages" -- "Life with Roger" to air on the Warner Brothers cable network on Sunday nights, "Cosby" on CBS Monday nights, "Promised Land" on CBS Tuesday nights, "Nick Freno: Licensed Teacher" on the WB Wednesday nights and "Clueless" on ABC Friday nights. Twenty-six of the pilots reviewed were rated "12," suggested parental advisory for children 12 and under. "Dark Skies," a programme that will air on NBC Saturday nights, got the only "17" rating, suggested parental advisory for children 17 and under, because of its violence, horror and occasional vulgarities, the magazine said. It noted that several programmes, including "Sabrina, the Teenage Witch," "Suddenly Susan" and "Life's Work" were not ready for previewing and were not included. The magazine's poll of parents, conducted Aug. 12-14, had a margin of error of plus or minus 6 percentage points. According to the poll 27 percent felt the television ratings system to be created by the networks by January 1997 should be modelled on the motion picture ratings. But 62 percent wanted a system naming programme content such as adult language or violence. Thirty-eight percent of the parents polled watch television with their children nightly, 30 percent a few nights a week, and 11 percent about once a week. Fifty-one percent said at least one of their children had television in their room, compared to 47 percent who did not. Two percent said they did not know. Most parents said they were "very concerned" or "somewhat concerned" about obscene language, references to sex, visual images of nudity and references to casual sex in television programmes. 7062 !GCAT !GPOL !GVOTE Vice President Al Gore on Saturday welcomed the participation of Ross Perot in this fall's presidential debate, and said he assumed Perot's running mate would take part in the vice presidential debate. Asked in an interview with CNN whether he wanted Perot's running-mate there when he debated Republican vice presidential candidate Jack Kemp in October in Hartford, Conn., Gore said, "Oh I think he or she should be, yes." "Mr. Perot is a well-known candidate," Gore said. "He's qualified to be a candidate with the Federal Elections Commission and is receiving federal funding and so I would just assume he would be a part of the debate and that his running mate would be a part of the vice presidential debate. Asked about his own presidential aspirations for 2000, Gore said he was concentrating exclusively on the campaign to re-elect Bill Clinton. "My top three priorities for politics are number one, to re-elect Bill Clinton in 1996. Number two, to re-elect Bill Clinton. And number three, to re-elect the Clinton-Gore team," Gore said. "I am not focusing beyond that." He cited a story somebody told him at the Democratic National Convention that illustrated the point. "It was about a dog with a bone that sees his reflection in the water and he wants that other bone and opens his mouth to get it and he loses both bones," Gore said. "You can't lose focus," he said. "I've always believed that if you do a good job, do the very best you can with the responsibilities you have before you, the future will take care of itself." Gore, a quintessential Washington insider, plunged into the presidential race in 1988 and did well in southern primaries but pulled out when he failed in northern states. 7063 !E51 !E512 !ECAT !GCAT !GDIP Secretary-General Boutros Boutros-Ghali on Sunday put off plans to implement an oil-for-food deal that would allow Baghdad to re-enter oil markets for the first time in six years. "He decided to hold off," said chief U.N. spokeswoman Sylvanna Foa. "Security for the staff is the main problem." "The situation in northern Iraq right now is extremely tense and he doesn't feel he can send people into a situation like that," she said The oil-for-food programme, signed on May 20 between Iraq and the United Nations, permits Baghdad to sell $2 billion worth of oil over six months in order to buy food and medicine for its people, hard-hit by six-years of U.N. trade sanctions. The embargoes were imposed in August 1990 shortly after Baghdad's troops invaded Kuwait. She also said that Iraq's deputy prime minister Tareq Aziz had assured Boutros-Ghali in a telephone call that Baghdad's troops had been told to withdraw from the Kurdish areas where they captured the city of Arbil on Saturday. Aziz reported that the situation was calm in Arbil, an "assessment that has been confirmed by U.N. headquarters in Baghdad," Foa added. President Bill Clinton has already called several world leaders to discuss a "course of action" in response to the Iraqi military onslaught against one faction of rebel Kurds in norther Iraq, the White House said. Boutros-Ghali, in a statement issued by Foa's office, said he had "decided to delay the deployment of certain personnel who will supervise the implementation of Resolution 986," a reference to the document that sets out the oil-for-food plan. The programme had been expected to be implemented within the next two weeks, presumably after the arrival of 14 oil monitors sent by the Dutch-based Saybolt company and 32 customs officials fielded by the Britain's Lloyd's Register. An advance team to make arrangements for the oil monitors arrived in Baghdad late last week, but the 14 had been expected to leave this week, U.N. officials said. In order tor the plan to be implemented, Boutros-Ghali must assure the Security Council that all arrangements are in place, including the first group of monitors to be stationed in the north as well as the rest of the country. Said one key Security Council envoy: "He has put the thing on ice for the time being, which is very sensible on prudency and political grounds." But diplomatic sources said one other detail was still open -- arrangements for an escrow account to be set up at France's Banque Nationale de Paris. Arrangements for this have to be approved by a Security Council committee and the United States could delay approval, they said. The United Nations eventually intends to send a total of 260 foreign monitors to Iraq for the deal, with about 900 Iraqis hired as support staff. 7064 !E21 !E211 !ECAT !GCAT !GPOL Italy's cabinet ministers start meetings this Tuesday to thrash out details of the 1997 financial budget set to deliver tough measures to show the nation's commitment to join the European single currency in 1999. Milan financial daily newspaper Il Sole 24 Ore said that cuts in expenditure were confirmed at 21 trillion lire as part of its plan to cut the public sector borrowing requirement by the promised 32.4 trillion lire. Commentators have said the budget will include big cuts in subsidies for state companies, a crackdown on excess spending by ministries and a new campaign to stamp out tax evasion. Il Sole said it will be difficult to scrape together the last 6-7 trillion lire of cuts in the budget, but the total package will still aim to cut the deficit by 32.4 trillion lire for the budget, including possible increases in taxes. Prime Minister Romano Prodi's centre-left administration must present its budget to parliament by the end of September and the package has to pass into law before the year is out. Meanwhile, Finance minister Vincenzo Visco said in an interview also in Il Sole that he plans a number of financial reforms within the budget package including measures aimed a simplifying and decentratising central government's role and the setting up a new special zone for the impoverished south. For Prodi, the battle over the budget will be played out against a background of a slowing Italian economy and threats by union leaders of strikes this autumn as they renegotiate wage contracts with industrial employers. However, the key question remains how can the goverment cut the public sector borrowing requirement by 32.4 trillion lire while holding true to a pledge to leave its pensions system and public healthcare arrangements largely unscathed. -- Milan newsroom +392 66129502 7065 !E51 !E512 !ECAT !GCAT !GDIP Secretary-General Boutros Boutros-Ghali said on Sunday he would delay arrangements to implement the oil-for-food plan until he could assess the situation in nothern Iraq. The U.N. chief, in a statement, said he had "decided to delay the deployment of certain personnel who will supervise the implementation of Resolution 986," a reference to the Security Council document that sets out the plan. The oil-for-food programme, signed on May 20 between Iraq and the United Nations, permits Baghdad to sell $2 billion worth of oil over six months in order to buy food and medicine for its people, hard-hit by six-years of U.N. trade sanctions. The embargoes were imposed in August 1990 shortly after Baghdad's troops invaded Kuwait. In order tor the plan to be implemented, Boutros-Ghali must assure the Security Council that all arrangements are in place, including the first batch of oil monitors and customs officials to be stationed in the north as well as the rest of the country. Diplomats and U.N. officials said last week they expected his report to be ready shortly, perhaps within a week. A statement attributed to a U.N. spokesman said that "the secretary-general is very much concerned about the deterioration of the situation in northern Iraq." "In light of developments there, he has decided to delay the deployment of certain personnel who will supervise the implementation of Resolution 986. "He is following the situation closely, and he is in continuing contact with the United Nations Coordinator in Baghdad," the statement said, adding that he had been informed that all U.N. personnel in northern Iraq were safe. Iraq, according to U.S. officials, amassed 30,000-40,000 troops this week in northern Kurdish provinces and captured the city of Arbil, expelling one Kurdish faction and installing a rival group more favourable to Baghdad. The United Nations since the 1991 Gulf War has had a large humanitarian programme to aid the Kurds, who were no longer under the control of the central government. The oil-for-food deal makes special arrangements for assistance to the Kurds, separately from the rest of the country. But the plan cannot be implemented before 14 oil monitors are in place as well as 32 customs officials, who would be supervising borders between Iraq and its neighbours, including those in the north. U.N. officials said earlier that some of the oil monitors had already arrived in Baghdad but the bulk of the customs group was not in Iraq yet. 7066 !E51 !ECAT !G15 !G158 !GCAT !GDIP European Union officials say U.S. special envoy Stuart Eizenstat, given the task of selling Washington's anti-Cuba legislation to the rest of the world, faces stiff resistance when he meets EU officials in Brussels this week. They said he was unlikely to win any support from a 15-nation bloc already pondering counter-measures. Eizenstat, appointed by President Clinton last month, is due to meet EU Trade Commissioner Sir Leon Brittan on Tuesday on the first leg of a round-the-world swing aimed at explaining Washington's controversial Helms-Burton Act. He will also meet European Commissioners Manuel Marin and Emma Bonino -- responsible for Latin American affairs and the EU's humanitarian affairs office respectively -- suggesting the bloc's executive is treating his visit very seriously. "We are looking forward to the meeting, to hear what he has to say, but I don't see how anything can change," said one European Union official. The Helms-Burton Act, an amalgamation of decades of anti-Cuba legislation, was passed in July to a chorus of indignant opposition from many of Washington's strongest allies on the grounds that it is extra-territorial -- that is, it imposes U.S. laws on a second country. Among other things, the act allows American citizens to sue in U.S. courts foreign companies that have benefited from investments made in property confiscated by Havana since the Cuban revolution of 1959. Although the practical implications of this part have been suspended until next year, the EU -- along with Canada and Mexico -- are concerned that liability is accruing. Much European Commision business comes to a standstill during the August holidays. Officials have nevertheless been working to finalise a response to the act by Wednesday, the next full Commission meeting. In July, foreign ministers gave the commission a mandate to pursue four measures they believed would best counter the laws -- named after its U.S. congressional sponsors Dan Burton and Jesse Helms. These were to forbid EU individuals or companies to comply with any U.S. court action; allow them to counter-sue to recover any damages awarded; prohibit individuals from litigant U.S. companies from travelling to the EU; and compile a "watch list" of American companies or individuals involved in any litigation. The EU also has to decide whether to escalate a dispute on the matter lodged with the World Trade Organisation. If commissioners approve these measures on Wednesday -- and sources say it will be a formality -- they will go for discussion to an informal EU foreign ministers meeting in Tralee, Ireland, on Sept. 7. Eizenstat -- no stranger to Europe having served as U.S. ambassador to the EU from 1993 to earlier this year -- said last month he would not be drawn into specific targets, but that he hoped to seek "cooperative measures" against the government of Fidel Castro. "Eizenstat has an impossible task," one EU diplomat said. "The best he can hope for is a statement saying Europe backs the promotion of democracy in Cuba. 7067 !E12 !ECAT !G15 !G151 !G153 !G154 !GCAT German Chancellor Helmut Kohl and French President Jacques Chirac on Sunday reaffirmed their joint support for a European Union single currency as planned in 1999 and said the EU's farmers needed help now. The two men, meeting at Kohl's bungalow next to the Bonn chancellery, said there was no reason to consider wavering from the Maastricht Treaty's strict criteria despite what the German leader called some "light and shadows" in their economies. They gave no hint of what the EU could do for farmers, especially in the cattle sector where sales have been hit badly by "mad cow" disease in Britain, but said European agriculture ministers meeting in mid-September would address the problem. "We are both determined to meet the criteria of the Maastricht treaty without delay," Kohl said before they began dinner. "It is our common goal and we will reach it together." Chirac, standing at his side, told reporters: "The Germans and the French will be at the same rendezvous at the same time and under the same conditions." Financial markets have become increasingly worried that France, plagued by a stagnant economy and record unemployment, may be falling behind in its attempts to cut public spending. Equally worrying for the French government are signs that the autumn of discontent which last year undermined its attempts to slash the welfare budget could be repeated. Bonn faces a struggle of its own to get its budget deficit inside the limits required to qualify for monetary union (EMU) in 1999, but has so far been more effective than Paris in pushing through welfare cuts against massive union opposition. Both Kohl and Chirac played down recent pressure on the French franc and said currency market fears were unfounded. Both men also emphasised that the the next meeting of EU agriculture ministers on September 16 must address the growing problems that European farmers faced. "We shared the same view about the worries of the farmers, especially the cattle growers," Chirac said. "We are determined to work together to confront these worries. Chirac also said the EU must find a way to ensure that countries which did not join monetary union in 1999 did not engage in competitive devaluations against the first states to take part in the single currency, the Euro. "It is unacceptable to have a devaluation by those who have not joined," he said. "That would cause grave damage to the European economy." Germany and France shared the view that there would have to be an agreement within the European Union between the so-called "ins" and "outs" to prevent this, Chirac said. Experts working on this issue were making good progress, he added. Kohl said foreign policy issues such as the Middle East, Bosnia and Chechnya would be discussed during the dinner and there were no plans to make a statement afterward. Chirac was due to fly back to Paris late on Sunday. "We both want the shooting and the war in Chechnya to end as soon as possible so what Boris Yeltsin said before the election can come about," he said. Asked if the Franco-German army brigade, a joint project that has never been sent abroad, could be deployed in Bosnia after the current United Nations peacekeeping mandate runs out, Kohl said: "We will find a common line and I do not exclude anything." 7068 !E12 !ECAT !G15 !G154 !GCAT French President Jacques Chirac held informal talks with German Chancellor Helmut Kohl in Bonn on Sunday on Paris's struggle to meet the conditions for the European Union's flagship project, a European single currency. Financial markets have become increasingly worried that France, plagued by a stagnant economy and record unemployment, may be falling behind in its attempts to cut public spending. Equally worrying for the French government are signs that the autumn of discontent which last year undermined its attempts to slash the welfare budget could be repeated. Chirac, who arrived at the Bonn chancellery by helicopter from nearby Cologne airport, was due to appear with Kohl to make a short statement to the press at 7 p.m. (1900 GMT). He was due to fly back to Paris after dinner. Marc Blondel, the head of France's Force Ouvriere union which led a crippling transport strike last year, said on Saturday growing discontent pointed to social unrest in coming weeks and attacked plans for austerity in the 1997 budget. "We have the same situation as last year. All ingredients of discontent are there," Blondel said in an interview published in the daily Le Monde. "Until now the French viewed difficult times as unavoidable and unemployment as a trial. But gloom is progressively turning into discontent and anger," he said. Force Ouvriere has called a protest march on September 21 as a warning to the government. Bonn faces a struggle of its own to get its budget deficit inside the limits required to qualify for monetary union (EMU) in 1999, but has so far been more effective than Paris in pushing through welfare cuts against massive union opposition. Kohl has in the past used regular Franco-German summits to express his confidence that France will fulfil the EMU criteria on time and underline that a single currency is inconceivable without France's participation. A German government spokesman said on Friday that it was likely EMU would top the agenda at Sunday's talks, taking place at Kohl's private bungalow next to the Rhine-side chancellery. Kohl and Chirac may also return to the subject of defence cuts which have introduced an element of strain into bilateral relations this year. Budget restrictions have forced Bonn and Paris to reevaluate defence projects on which they had planned to cooperate, exposing different priorities on both sides of the Rhine. France is withdrawing many of the troops it has stationed in Germany as part of a radical overhaul to convert its conscript army into a volunteer force better equipped for long-range rapid deployment. The cuts have called into question a number of joint procurement and task-sharing projects. While France has appeared less committed to two projects for new transport and attack helicopters, German Defence Minister Volker Ruehe has said a cut in his own budget means he cannot finance Bonn's promised participation in France's pet project to build two military spy satellites. A joint task force is producing a comprehensive review of all 27 joint defence projects which is due to be completed before the end of the year. 7069 !GCAT !GDIP !GDIS Norway and Russia settled a dispute over jurisdiction on Sunday and agreed to cooperate in recovering the 141 victims of a Russian plane crash on the Norwegian Arctic island of Spitzbergen. Officials from both sides said they agreed the operation would continue under the leadership of Norway, which governs the coal-rich island, after two Russian rescue workers were handcuffed and detained by Norwegian police on Saturday. The incident delayed Russian assistance in the difficult salvage operation in tough terrain and unpredictable weather by about 24 hours and illustrated the distrust between NATO member Norway and the former Communist superpower that is rooted in the Cold War. Russia and Norway share the island's coal resources under a treaty dating back to the 1920s. "The Russian rescue workers will be put to work again on the crash side," Spitzbergen governor Ann-Kristin Olsen told a news conference. "It is accepted that Norway leads the operation." Olsen on Saturday ordered the two Russian mountaineers to be detained after they were found off limits on the mountain into which the TU-154 slammed last Thursday. They were released after explaining they had not meant to violate Norwegian authority. Ironically, the Russians found the voice recorder of the doomed plane before being hauled off the plateau. Norwegian rescue workers last Friday recovered the flight recorder. The boxes, which could help explain the accident, will now be flown to Moscow for examination. Russian Deputy Crisis Minister Aleksander Moskalets said the 11-member Russian team of mountaineers, who were ordered by Norwegian authorities to leave their base camp at the crash site the day before, would return in the afternoon to resume work. He said he accepted Norway's explanation that the men would not have been detained had the Norwegian police realised immediately that they were rescue workers. "The episode is over and forgotten. I will refrain from taking diplomatic steps," Moskalet said. "Common sense shall prevail in this investigation. Russia will respect Norwegian law, customs and tradition. Our only wish is to get started as soon as possible." Norwegian police investigator Arne Bjoerkaas said the Russian mountaineers would be assigned to "climb up and bring down the dead who are hanging near the top of the slope. We can see those bodies from the valley." He said Norwegian workers were continuing to collect human remains further down the slope in a grisly operation that could take weeks. Twenty bodies have been flown in green bags to the northern Norwegian city of Tromsoe, 500 miles (800 km) to the south, for formal identification. "We have decided to use DNA technology to identify the dead because they are so badly crushed, you can forget about recognising anyone at all," Bjoerkaas said. "Dental methods are traditionally used in this kind of work but the bodies have enormous damage to the jaws. The number of bags does not necessarily equal the number of bodies." The dead were Russian and Ukrainian miners, some with their families, who were on their way to work in the coal mines on the island. Fewer than 3,000 people live on Spitzbergen, which has one of the world's harshest climates. 7070 !GCAT !GVIO Kurdish rebel Jalal Talabani said on Sunday the Iraqi air force had bombed his forces in a village close to the city of Arbil, inside the air exclusion zone Western allies imposed after the 1991 Gulf War. "The Iraqi air force is now bombing our forces in a village which is close to Arbil. The Iraqi aircraft have crossed the 36th parallel and are attacking our forces in this village," Talabani told Radio France Internationale in an interview. Talabani, who leads the Patriotic Union of Kurdistan, said this was the first time that Iraqi aircraft had crossed the parallel and bombed a village. Earlier, an opposition Iraqi National Congress (INC) spokesman in London told Reuters that the Iraqi air force and heavy weapons attacked the two Kurdish towns of Bustaneh, near Arbil, and Kifri. Talabani denied an earlier report by a U.N. source in Baghdad that Iraqi forces had shelled the Kurdish stronghold of Sulaimaniya, the last remaining major Iraqi city held by his forces. "Areas some 15 kms from the city were under heavy shelling but not the city itself...The road to Sulaimaniya is mountainous and the city and the area are liberated and under the strong hold of PUK forces," he said. "I am expecting that (Iraqi President) Saddam Hussein and Massoud Barzani (leader of the Kurdistan Democratic Party) will try to attack but it will be very difficult for them. It is not like Arbil which was surrounded by Iraqi forces," he said. Unlike Arbil, now under the control of a combined force of Iraqi troops and rebels of the Kurdistan Democratic Party, Sulaimaniya is outside the air exclusion zone Western allies imposed on northern Iraq after the 1991 Gulf War to protect Iraqi Kurds against military attacks by Baghdad. Asked about reports that many Iraqi troops had pulled out of Arbil, Talabani answered: "The Iraqi dictatorship is always lying. When they attacked Kuwait they said the same thing." The Iraqi-backed KDP had said that Baghdad has withdrawn many of its troops from Arbil in northern Iraq. Iraqi troops backed by armour and artillery intervened on Saturday in inter-Kurdish fighting in northern Iraq on the side of Barzani to recapture Arbil from Talabani. 7071 !GCAT !GPOL !GVIO Police on Sunday defused a bomb placed outside the former offices of France's ruling RPR party in the Corsican capital Ajaccio, the latest in a series of blasts and failed attacks by suspected separatist guerrillas. The building had served as campaign headquarters for local deputy Jose Rossi of the Gaullist Rally For the Republic (RPR), who is President of the General Council of Corsica and a former industry minister. It now houses an association headed by a local councillor who is a former RPR member. There were no immediate claims of responsibility. Socialist opposition leader Lionel Jospin, in a speech before a party conference in the Atlantic port of La Rochelle, put part of the blame for the resurgence in violence on the centre-right national government. More than 20 bombs have exploded on the French Mediterranean island since mid-August, chiefly hitting public buildings, and have been blamed by police on separatists who on August 14 called off a shaky seven-month truce. "The government contributed significantly to the current situation by negotiating secretly with a hardline faction of the separatists, and then by suddenly taking a firm stand, and no one knows whether that will be temporary or lasting," Jospin said. He said that any dialogue should be "in the open and with everyone", and called for more flexibility on institutional reform but a firmer defence of law and order. Corsican politicians and judges have accused the government of conducting secret and failed talks with separatists while taking a lax stand on the violence. The failure of the talks reportedly led to the truce being called off. Prime Minister Alain Juppe last month promised to crack down on guerrilla violence and seven suspects were detained in a series of police raids on Thursday and Friday. 7072 !GCAT !GPOL Socialist leader Lionel Jospin, launching a new offensive against France's centre-right government, on Sunday ridiculed President Jacques Chirac's call for "optimism" and predicted social unrest soon. Chirac, chairing his first post-summer holiday cabinet meeting, urged ministers on Wednesday to "get yourselves together" and exude optimism to help France out of the doldrums as trade unions threaten protests and strikes in coming weeks. "Who is demoralising the French if not those who showered them with promises in a presidential campaign, who deceive them cruelly today and who remain deaf to their demands?" Jospin asked in a closing speech to a party conference in the Atlantic port of La Rochelle. "Confidence cannot be decreed, or ordered; it must be deserved," said Jospin, who was narrowly defeated by the Gaullist Chirac in last year's presidential election. Jospin's speech opened a new campaign targetting both Chirac and the government. The Socialist leader has kept such a low profile in recent months, officially drafting a new policy platform, that newspapers have asked: "Where is Jospin?" . Socialist Party officials said Jospin had decided to raise the stakes and no longer spare Chirac personally because he expected the head of state to lead the ruling coalition in general elections due in 1988. In a detailed indictment of Chirac and the government of Prime Minister Alain Juppe, Jospin accused them of fuelling record unemployment, botching a protest by illegal African immigrants who occupied a Paris church until a police raid, and mishandling a resurgence of separatist violence in Corsica. "France is doing badly because there is a crisis of confidence and because of a patent economic and social failure. Depression is being relayed by fear and disarray. Everywhere, anxiety and anger are coming to the fore," he said in a reference to widely-expected social unrest. "Massive layoffs, irrepressible unemployment, frozen growth, record taxes, an explosive welfare deficit, a franc rocked by speculators," Jospin listed. Chirac and Juppe's Gaullist party, the Rally For the Republic (RPR), accused Jospin of "selling wind and illusion". "Politics consists in showing determination, courage and tenacity as Jacques Chirac and Alain Juppe have done for more than a year," said RPR secretary-general Jean-Francois Mancel. Record unemployment, planned public spending cuts and layoffs have infuriated unions, who are threatening a fresh wave of unrest in a possible revival of the lengthy public-sector strikes which virtually crippled France late last year. According to a CSA opinion poll this week, 54 percent of voters are pessimistic as they go back to work after the summer holidays, with strikes, poverty and job losses topping worries. The poll found that 77 percent expected strikes and trouble for the centre-right government in the autumn. "Conservatism, corporatism, authoritarianism -- the Right has slipped off its mask," Jospin said. " (Chirac's campaign) talk of social divisions, of a France for all, is over. Where is the Marshall Plan for the inner cities promised during the campaign?" . 7073 !GCAT Two young Belgian women missing since Thursday have been found in Cologne, Germany, and sent home, police in the German city said on Sunday. The Cologne police said in a statement that Rachel Legeard, 18, and Severine Potty, 19, were found at 3:45 p.m. (1345 GMT) on Saturday sleeping in a hollow in the ground beside a motorway in the Buchforst area of Cologne. One of the women told Cologne police she and her companion had been asked for directions at a bus stop in Liege, Belgium, at around 3 p.m. on Thursday by a man aged around 40 sitting in the passenger seat of an old Mercedes-Benz car with German licence plates. She said she remembered nothing else until she was woken up in Cologne. The young women were turned over to police in Liege on Saturday night. Liege is about 120 km (75 miles) southwest of Cologne. Liege police said in a statement on Sunday that the girls were unharmed. "The young girls have been examined by a doctor and seem, considering the circumstances, in good condition." The statement added that, based on the young women's statements, it appeared they had been kidnapped. "It was a kidnap," Marianne Legeard, mother of one of the young women told Belgian television station VTM, which showed filmed coverage of the girls' return home. The young women were reported missing after they failed to return home to the village of Nandrin from a shopping trip to Liege on Thursday. On Saturday Belgian police had declined to comment on whether they suspected a link with the Marc Dutroux case, the paedophile kidnap, sex abuse and murder scandal which has rocked Belgium in recent weeks. 7074 !GCAT !GDIP !GVIO Iraq's deputy prime minister, Tareq Aziz informed the United Nations on Sunday that Iraqi troops had received instructions to pull out from areas they captured in the northern Kurdish regions, the U.N. said. Secretary-General Boutros Boutros-Ghali, in a statement, said Aziz had telephoned him to say the situation in the northern city of Arbil was calm and that "Iraqi troops had received instructions to withdraw from the region." The Iraqi government earlier on Sunday had made a similar statement in Baghdad. "Mr. Aziz further states that from its inception, the intervention in Abril was temporary and limited to preventing possible intervention from Iran on the side of one of the Kurdish parties," the statement said. Boutros-Ghali earlier on Sunday said he was delaying sending staff to Iraq who would be involved in implementing the oil-for-food deal, which allows Baghdad to sell $2 billion of oil over six months to buy food and medicine for its population under sanctions. He did not say how long the delay would be but emphasised that his "greatest concern is for peace in the region and the well-being of United Nations observers." U.N. officials said the delay concerned 14 oil monitors from the Dutch-based Saybolt firm 32 customs inspectors from the British Lloyd's Register, who were hired by the United Nations to help implement the programme. 7075 !GCAT !GDIP Secretary-General Boutros Boutros-Ghali said on Sunday he would delay implementing the oil-for-food plan for Iraq because of the deteriorating situation in the north. The U.N. secretary-general, in a statement, said he would postpone deploying certain personnel who were necessary to supervise the implementation of Resolution 986, which sets out conditions for the plan. The program had been expected to go into effect shortly after Boutros-Ghali had assured the Security Council that all arrangements were in place. The oil-for-food plan allows Iraq to sell $2 billion worth of petroleum over six months to purchase food, medicine and other goods for its people suffering under sanctions imposed after Baghdad's troops invaded Kuwait in August 1990. Iraq, according to U.S. officials, amassed 30,000-40,000 troops this week in northern Kurdish provinces and captured the city of Arbil, expelling one Kurdish faction and installing a rival group more favourable to Baghdad. In a statement issued by the United Nations through a spokesman, Boutros-Ghali was "very much concerned about the deterioration of the situation in northern Iraq. In light of developments there, he has decided to delay the deployment of certain personnel who will supervise the implementation of Resolution 986." "He is following the situation closely, and he is in continuing contact with the United Nations coordinator in Baghdad," the statement said, adding that Boutros-Ghali had been assured that all U.N. personnel in northern Iraq were safe." 7076 !GCAT !GDIP German Foreign Minister Kinkel was quoted on Sunday as saying Russia was ready to intensify talks with the North Atlantic Treaty Organisation on an eastward enlargement of the Western military alliance. Kinkel, who will be hosting Russian Foreign Minister Yevgeny Primakov in Bonn on Wednesday and Thursday, said Moscow had signalled it was ready to "enter concrete talks on a charter to comprehensively regulate cooperation with NATO". Primakov told an alliance meeting in Berlin in June that Moscow could live with enlargement, suggesting it would be acceptable as long as no troops or weapons were stationed on the territory of new members. Kinkel told the Sueddeutsche Zeitung, according to an advance release from Monday's edition of the newspaper, that, since the Berlin meeting, Russia's comments on enlargement had taken on a "new quality". "The intensified dialogue which we offered Russia on all these questions begins now," he said. While in Bonn, Primakov will also meet Chancellor Helmut Kohl, who returns on Wednesday from a trip to Ukraine and heads off again on Saturday for a meeting with President Boris Yeltsin. Poland, Hungary and the Czech Republic are in the forefront of former communist countries now pushing to join NATO. The three Baltic republics are also keen to join, but NATO has been cooler on the prospect of admitting them soon because of Russian sensitivities about seeing NATO come into what Moscow considers its back yard. 7077 !E12 !ECAT !G15 !G151 !G154 !GCAT German Chancellor Helmut Kohl and French President Jacques Chirac on Sunday reaffirmed their expectation that both Germany and France would enter a European single currency on schedule in 1999. "We are both determined to meet the criteria of the Maastricht treaty without delay," Kohl told reporters after the meeting. "It is our common goal and we will reach it together." Chirac added: "The Germans and the French will be at the same rendezvous at the same time and under the same conditions." Chirac also said it was imperative that an agreement be reached ensuring that countries which did not join monetary union in 1999 did not engage in competitive devaluations against the single curency, the euro. "It is unacceptable to have a devaluation by those who have not joined," he said. Financial markets have become increasingly worried that France, plagued by a stagnant economy and record unemployment, may be falling behind in its attempts to meet the conditions for a single currency. Germany, too, is experiencing difficulty in meeting the specified limit for its budget deficit. 7078 !GCAT !GDIP !GVIO France expressed concern on Sunday at Baghdad's offensive on the Kurdish stronghold of Arbil and said it respected Iraqi sovereignty and territorial integrity. The French Foreign Ministry noted the appeal made to Baghdad by Kurdish rebel leader Massoud Barzani of the Kurdistan Democratic Party (KDP) "because of the presence of foreign forces on the ground". Iraqi troops flanked by KDP forces attacked the city of Arbil on Saturday, previously held by the rival Patriotic Union of Kurdistan (PUK) and the Iraqi air force attacked two other PUK towns near Arbil on Sunday. "We urge Baghdad...to ensure that civilian populations are not affected by the fighting and to take all measures aimed at avoiding anything that could jeopardise their security," a ministry statement said. "We recall our commitment to regional stability and our concern shared by all members states of the United Nations to respect the sovereignty and territorial integrity of Iraq and all states in the region," it said. U.S. forces were on high alert on Sunday for possible action in northern Iraq as the White House waited for Baghdad to honour its pledge to withdraw its troops from Arbil. White House chief of staff Leon Panetta told a television interviewer that even if one of the Kurdish factions invited Iraqi troops to intervene, the move by Hussein was not justified. 7079 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Portuguese international and intercity trains were halted on Sunday for the third successive day by a strike called by drivers to press demands for better working conditions. The Portuguese state railway company -- Caminhos de Ferros Portugueses (CP) -- was using buses to take Paris-bound travellers to the Spanish frontier where they could continue their journey by train. Passengers for Madrid, the other international destination served by CP, were being taken all the way be coach. Drivers began their strike on Friday to press for improved career structures, a nine-hour limit to the working day and longer rest periods between trains. A spokesman for the railway company said that he was unaware of any new meetings being called to seek a solution to the strike, which is due to continue until September 6. The drivers' action was hitting train links between major cities, particularly between Lisbon and Oporto, although passengers could use the slower regional services which make frequent stops. 7080 !GCAT !GPOL Irene Pivetti, a prominent member of Italy's separatist Northern League until a high-profile falling-out with its leader Umberto Bossi, said on Sunday she was now looking to the centre ground of Italian politics. She told Il Giornale newspaper in an interview that she thought the two main centre-right and centre-left blocs would not last and Italy was not heading for a bi-polar system. Most people wanted "something different, something we could call social centre", Pivetti said, adding that she would like the support of Fiat cars boss Cesare Romiti. "I don't think Romiti will enter politics directly, but certainly I would like him allied to my project," Pivetti said. Pivetti, the sharp-tongued former speaker of the Chamber of Deputies, has fallen out with Bossi over his increasingly strident calls for independence for northern Italy. The League recently disowned her, saying she had not paid her subscriptions for two years and was not therefore a member. "With these affirmations she has broken off her relationship with the League," said Roberto Maroni, a former interior minister and leading party member. "If Pivetti confirms these statements it will mean she has resigned...But it's a mistaken decision because this way she is ending a promising and brilliant political career. "Anyone who leaves the League goes nowhere, they're not recyclable," he said. Bossi plans to declare "independence" for his would-be northern republic of "Padania" on September 15, while supporters form a human chain along the banks of the River Po, which he would like to be the frontier. Pivetti is planning not to go. 7081 !GCAT !GPOL A Mauritanian immigrant, among 210 Africans seized in a controversial raid on a Paris church, won a reprieve on Sunday when a judge ordered him released after he refused to board a plane and obey an expulsion order. Berke Camara, ordered expelled after his appeal for refugee status in France failed, despite support from the U.N. High Commissioner for Refugees, said he had been ordered to go before a court in the Paris suburbs on October 4. "I'd been told I was free on Saturday but then police put me in a bus to take me to the airport," Camara, prosecuted for his beliefs in Mauritania three times and jailed, told Reuters. Camara, who arrived in France in December 1993, said he would appear before the Bobigny court to answer charges that he had refused to board a scheduled Air Afrique flight bound for Nouakchott and obey the expulsion order. He has described himself as a political refugee and expressed concern for his safety if he was sent back. Both the U.N. High Commissioner and the French Consultative Commission on Human Rights appealed to the French Interior Ministry on Friday, demanding it suspend the expulsion order. Eight Africans among 210 people evicted from the church, after a 50-day occupation aimed at securing residence permits, have been deported. Most of the others have been released after a brief stay in detention. 7082 !E21 !E211 !ECAT !GCAT !GPOL German Finance Minister Theo Waigel on Sunday warned his coalition partner, the Free Democrats (FDP), against trying to move forward the start of his planned major tax reform. Speaking in a televised interview on Germany's ZDF, Waigel threatened a fight within the ruling coalition if the FDP continued to insist on moving the tax reform package to 1998 from 1999. "The FDP must stand by what has already been agreed," Waigel said. The finance minister said the tax package must not be flogged to death with debate about details, adding that the timeframe and extent of the tax plan is determined by reason and not by the wishes of FDP General Secretary Guido Westerwelle. "One must do what is possible," he said. Waigel said the minimum tax rate should remain at around 20 percent, but that the maximum rate should be cut to less than 40 percent from 53 percent. He said debate should center on how to reduce special tax privileges, but added that details cannot be publicly discussed until the tax commission has worked out its own position. But he disagreed with proposals to raise taxes on life insurance. Waigel said a tax increase should not be considered and therefore debate about tax reform should not start with the value-added tax. Rather, the discussion should be about the relationship between direct and indirect taxes, he added. The leader of the opposition Social Democrats (SPD), Oskar Lafontaine, meanwhile proposed cutting income taxes and covering the state revenue through radical cuts in special tax breaks and tax deductions. Lafontaine told the daily Bild newspaper that special tax rules and loopholes benefit high-income people the most. The SPD has also proposed lifting the minimum income at which individuals start paying tax to 14,000 marks from 12,000 marks. For married couples, the minimum taxable income should climb to 28,000 marks from 24,000 marks, the party maintains. Waigel confirmed that rising unemployment has put a huge burden on the Federal Labour Office, saying that it will spend eight billion marks more than was planned for. The office originally had a budget of 4.3 billion marks. 7083 !GCAT !GPOL Rome's city council wants to honour Italians killed by Yugoslav leader Josip Broz Tito's communists in Italian fascist-ruled Istria during World War Two by naming a street after the victims, newspapers said on Sunday. "I think the time has come to look more courageously at our history," said Piero Sandulli, the head of the place names department at the council. "I think we need to remember the tragic events of the reprisals against Italians in Istria in 1943-44 which brought together fascist leaders and innocent victims in the same fate." The Istrian peninsula was ceded to Italy after the collapse of the Austro-Hungarian empire at the end of World War One. But Italy was forced to hand it over to Yugoslavia in 1947 after the defeat of fascism in World War Two and Istria now is divided between Slovenia and Croatia. At least 150,000 Italians fled from Istria and Dalmatia, which was occupied by Italy in the war and now is in Croatia, or were expelled by Tito and had their property confiscated. Thousands killed during the explusion were tossed into the "foibe" -- natural underground caverns typical to the region. A lingering dispute between Italy and Slovenia about confiscated property held up Slovenia's application to join the European Union and some far-right ministers have argued in recent years that Italy has a historic claim to the area. Sandulli said the plan to name a street or square after the "foibe" victims would be considered as soon as possible. But a councillor from the ex-communist Democratic Party of the Left was unimpressed. Victor Magiar said he was still waiting for Rome to get around to naming streets after South African anti-apartheid hero Steve Biko, Italian author Primo Levi and assassinated Israeli prime minister Yitzhak Rabin as it has already promised. 7084 !GCAT !GVIO Kurdish rebel Jalal Talabani said on Sunday Iraqi air force jets had bombed his forces in a village close to the city of Arbil, inside the air-exclusion zone Western allies imposed after the 1991 Gulf War. "The Iraqi air force is now bombing our forces in a village which is close to Arbil. The Iraqi aircraft have crossed the 36th parallel and are attacking our forces in this village," Talabani told Radio France Internationale in an interview. Talabani, who leads the Patriotic Union of Kurdistan, said this was the first time that Iraqi jets had crossed the parallel and bombed the village of Hassani. He denied an earlier report by a U.N. source in Baghdad that Iraqi forces had shelled the Kurdish stronghold of Sulaimaniya, the last remaining major Iraqi city held by his forces. "Areas some 15 kms from the city were under heavy shelling but not the city itself...The road to Sulaimaniya is mountainous and the city and the area are liberated and under the strong hold of PUK forces," he said. Unlike Arbil, now under the control of a combined force of Iraqi troops and rebels of the Kurdistan Democratic Party, Sulaimaniya is outside the air-exclusion zone Western allies imposed on northern Iraq after the 1991 Gulf War to protect Iraqi Kurds against military attacks by Baghdad. 7085 !GCAT !GCRIM !GDIP The first World Congress against Commercial Sexual Exploitation of Children has highlighted the scale of the problem and the need for vigorous international action to tackle it. For five days over 1,300 government and non-government representatives from 125 countries discussed ways to combat child prostitution, child pornography and the sale of children for sexual purposes. The conference coincided with a major child sex scandal in Belgium that pointed to possible cross-border paedophile rings in Europe. The problem, it now seemed, was not confined to developing countries. Repeatedly organisers of the Stockholm conference dismissed calls by some delegates for broader statements condemning prostitution, pornography or sex tourism as a whole. "We have to focus specifically on the commercial sexual exploitation of children," June Kane, spokeswoman for the United Nations Children's Fund (UNICEF), told Reuters. The conference concentrated on child prostitution, not abuse in families or the sex trade in general. "(This) constitutes a form of coercion and violence against children and amounts to forced labour and a contemporary form of slavery," rapporteur general Vitit Muntarbhorn told the conference as it closed on Saturday. He said all countries involved unanimously accepted a declaration and agenda for action, but now it would be necessary to ensure promises were kept. The list included legal reforms to protect children and punish offenders, raising public awareness and urging businesses including tourism groups to counter child sexual exploitation. "But the real test of follow-up will be at the regional, national and local levels," said Muntarbhorn. He said it was disappointing that not all countries invited took part in the congress, particularly those that are badly affected by the child sex trade, but they would be encouraged to join if another conference is held in a few years. "Some countries in my region in Southeast Asia are not here and they have problems too," said Muntarbhorn, a Thai national. "Some of their nationals come to my country to perpetuate crimes against children." Malaysia and Singapore were not present at the congress. But organisers agreed that the conference had succeeded in its major purpose -- putting the issue of the commercial sexual exploitation of children on the international agenda. The international outrage at the horrific child sex case unfolding in Belgium may have contributed to putting the conference in the spotlight. The discovery of the bodies of two eight-year-old girls, abducted and used for sexual purposes, and the release of two others has triggered a Europe-wide search for a paedophile ring, suggesting child sexual exploitation is a global problem, not confined to developing countries. Ron O'Grady, coordinator of End Child Prostitution in Asian Tourism (ECPAT) and a conference organiser, said his group had been on a lonely road until now. But following the conference, ECPAT will be expanded globally, keeping its acronym but changing its name to End Child Prostitution, Child Pornograhy and the Trafficking of Children for Sexual Purposes. "We will monitor what is happening not just in Asia as in the past but throughout the world," O'Grady told a press conference. 7086 !GCAT !GPOL !GVOTE Socialist Prime Minister Costas Simitis, giving his first press interview since calling an early general election for September 22. pledged greater efforts to push the Greek economy closer to European Union standards. Simitis, who set the election date 10 days ago, did not indicate how he would achieve such convergence but said the country was on track to do so within a stable environment. He warned in the interview with the Athens newspaper Eleftherotypia that the conservative opposition would ruin the momentum if it won power. "At this point the convergence plan is being executed in the way it was designed...the economy is doing well but this is not enough. We need leaps, a qualitative upgrading of our politics and harder effort on our part," he was quoted as saying. Simitis began the campaign as clear favourite but political analysts said his low-key approach, a reluctance to announce any popular measures and a habit of dodging media questions after giving after prepared speches was eroding his position. "We need a more aggressive campaign on the part of the prime minister," a senior member of Simitis' PASOK party told Reuters. "We need to specifically explain what we will do. We need to spread enthusiasm among our voters." But Simitis, who has pledged to change the face of Greece with deep cuts in state spending, an all-out attack against hundreds of thousands of tax evaders and radical reforms in the public sector, has said little so far to excite voters. "Today the country is heading to elections with a strict adherence to the the convergence plan, without pre-election favours, without false promises on our part," he said. "My target is not to be left in history as simply an administrator prime minister. The time to say yes to the future has come," Simitis added. He is an antithesis of Andreas Papandreou, his late mentor and founder of PASOK, who rallied the lower middle-class with popular welfare programmes and thousands of hirings in the public sector and scored election wins in 1981, 1985 and 1993. Seizing on Simitis' reservations, conservative New Democracy party leader Miltiadis Evert has been promising the hardest hit voters such as farmers and small-business owners higher incomes and tax breaks in his first 30 days as prime minister. Evert pledged to increase farmers' pensions by about 30 percent, slash fuel costs and abolish a PASOK tax law which forces small and medium businesses -- the backbone of the Greek economy -- to pay a minimum fixed tax despite their income. "In this election the roles have changed," one analyst said. "It is PASOK that calls for belt-tightening measures while New Democracy has embarked on the old Papandreou path with "populist" promises." Simitis and Finance Minister Alexandros Papadopoulos are in the final stages of putting together next year's budget which includes cuts equivalent to $1.2 billion in state spending and the restructuring of public companies to boost growth. Papadopoulos has warned that Greece is still far from meeting the criteria necessary to join European monetary union (EMU) in 1999 and that in the next two years Greeks must make sacrifices to slash inflation and a towering public debt. Inflation was running at a rate of 8.6 percent year-on-year in June -- the highest by far in EU -- and the public debt was still well over 100 per cent of the country's GDP. The EMU target is for the debt to drop to 60 percent of GDP and inflation to be slashed to about two points above the average inflation of the three best performing EU members. 7087 !GCAT !GDEF !GDIP Germany's army is inching towards becoming a full partner in multinational missions and could take a mainstream role in Bosnia if the international peacekeeping mandate is extended, Defence Minister Volker Ruehe said. Germany's current participation in the NATO-led IFOR peacekeeping force would itself have been unthinkable before unification, when the country began to shed its post-war compunction about sending troops abroad on any mission. Now its soldiers provide medical and logistics support for IFOR in an area which was occupied by the Nazis over half a century ago. But they remain based in Croatia rather than Bosnia to avoid rekindling old enmities with the Serbs. Ruehe told the daily Bild at the weekend that if there was a new peacekeeping mandate after the end of this year, he could imagine "infantry in armoured vehicles and reconnaissance tanks" playing their part alongside NATO partners. A new mandate seems increasingly likely to be approved as tensions continue between Bosnian Croats, Moslems and Serbs, thwarting planned municipal elections and preventing refugees returning to their homes. Last week Ruehe suggested Germany should no longer play a special role to make allowances for its wartime past, but simply take a full part alongside its military partners. He said the German force had earned the respect of all the conflict parties in Bosnia, including the Serbs. After years spent battling the parliamentary opposition through the courts to establish its right to send troops abroad, the government has succeeded in calming the fears of a public still mindful of the dangers of militarism. The centre-left Social Democrats have also largely given up their opposition to sending German soldiers on multinational peace missions, and are likely to give their approval in parliament to any new Bosnian peacekeeping mandate. 7088 !GCAT !GDIS A Russian seaman died and 11 others escaped without injury when a Russian cargo ship caught fire in the southern Swedish harbour of Stenungsund early on Sunday morning, a fire service spokesman said. Spokesman Anders Larsson said a fire broke out in the crew's cabin of the MV Volgo-Balt shortly after midnight and quickly spread through the captain's cabin and other quarters as most of the vessel was furnished with a wooden interior. He said the captain's dog smelt the smoke and awoke most of the crew who escaped over the side of the vessel, moored at Senungsund harbour. A 12th crew member, however, slept through the commotion. "We found him dead in his cabin this morning," Larsson told Reuters. He said the MV Volgo-Balt, recorded as owned by Transonega A/O, regularly sailed from Leningrad to Stenungsund near Gothenberg to collect cargoes of rocks, stones and pebbles. He said police were investigating the cause of the fire. 7089 !GCAT !GDIS Russian miners insist on being allowed to identify their loved ones killed when a Russian airliner crashed into a mountain on the Norwegian Arctic territory of Spitzbergen. But Norwegian officials say the victims of the worst plane crash in Norwegian history are so badly mangled they cannot be identified by simply viewing them. The Russian flag was flying at half mast at the weekend in Barentsburg, a grimy mining settlement with 900 inhabitants living in rows of two-storey houses between the barren mountains. Norway governs Spitzbergen under a 1920 treaty, which allows Russia to exploit the island's coal resources. Amid the mourning, a sense of bitterness was spreading among the Russian community after the TU-154 airliner crashed into the mountainside near the Norwegian town of Longyear on Thursday killing all 141 people on board. The dead, Russian and Ukrainian miners and family members, were on their way to the coal mines on the island. Their remains are being flown to the northern Norwegian city of Tromsoe, 500 miles (800 km) to the south for identification. "We want the identification process either to take place here or we want to be flown to Tromsoe to help identify our relatives," Vyateslav Grebernjok, a bearded 26-year-old wearing a black leather jacket, told reporters. Grebernjok lost his wife Olga, 25, who was coming to visit him, leaving their five-year-old daughter behind in Donetsk, on the river Don in the Rostov region of southern Russia. He is one of 16 people in Barentsburg to have lost family in the crash. Spitzenbergen governor Ann-Kristin Olsen, who was in Barentsburg on Saturday to accompany Norwegian Justice Minister Grete Faremo on a brief visit, rejected the demand. "The reality is so tough that you cannot identify the victims visually," Olsen told reporters. "It will take blood tests, finger prints and dental examinations to find out who is who. This is obviously painful for the relatives. We want them to take a dignified farewell in front of the coffins later." Dozens of grim looking miners gathered in the street to catch a glimpse of Faremo, who came to offer her condolences but ran into a storm of criticism over the rescue efforts from local people distraught at losing relatives. Pavel Serikov, head of the Russian mine's rescue service, lost his daughter, son-in-law and one grandchild in the crash. "I know what grief means. We demand to take part, we want our dead back," he angrily told the Norwegian minister. Faremo said she felt the recovery operation had gone well given the bad weather and tough terrain. Sergei Schnidko, a 29-year-old miner who lost his wife in the accident, walked up to Faremo to shake hands but was overcome with grief and ran away. Smoking a cigarette, he said Natalya, 22, was coming to live with him in Barentsburg, where he has worked one year of a two-year contract. "She was meant to follow me here. This was her first visit. I was waiting at the helicopter pad when I got word the plane had crashed," said Schnidko. Miners arriving at Longyear airport from Moscow are shuttled by helicopter to Barentsburg 30 miles (50 km) away. "I will go home for the funeral and I don't know if I'm coming back. I can't make up my mind," said Schnidko, who is also from Donetsk. "The main thing is to get the bodies home." 7090 !GCAT !GCRIM Austrian far-right leader Joerg Haider said on Sunday convicted child sex offenders should be sent behind bars for life, days after Austrian police detained five men for suspected sexual abuse of children. "There must be no mitigation for child abusers," the leader of the Freedom Party said in a statement released by his office. Producers of and dealers in child pornography should serve life in prison. Under Austrian law, sexual abuse of children carries a maximum of ten years in prison. Producers of child pornography can be sentenced to up to one year, while customers of such materials risk up to six months imprisonment. Austrian police on Friday arrested two men for suspected sexual abuse of children aged between four and 15 living in a refugee shelter in the city of Linz. Two days earlier, Vienna police detained three men on charges of child sex abuse and producing child pornography in a suspected "child-for-hire" network spread across central Europe. Austrian police declined to say whether the arrests were connected to the Belgian case of Marc Dutroux, alleged to be the leader of a peadophile pornography ring. Dutroux has been named by police in the Slovak capital Bratislava, about one hour's drive from Vienna, as a suspect in the murder of one Slovak woman and the kidnapping of another. 7091 !GCAT !GCRIM !GREL The Vatican on Sunday welcomed the first global conference on child abuse and called on Christians and governments everywhere to tackle the problem. "We welcome with hope and enthusiasm the World Congress Against Commercial Sexual Exploitation of Children," Cardinal Angel Trujillo, head of the Vatican's Pontifical Council for the Family, said in a document on the subject. The conference, held in Sweden, closed on Saturday. "It is a great challenge and the Holy Father says: 'How is it possible to remain indifferent in the face of the suffering of so many children, especially when it is caused in this way'," Trujillo said. "This challenge represents a particular duty for the Church, for all Christian communities in the world -- for bishops, for the bishops conferences, for all families and pastoral agents. "It is also a challenge for governments, in particular for lawmakers and jurists and for all civil authorities." Trujillo described children as a "precious treasure" and said the causes of child abuse included the collapse of families and the "widespread banalisation of sex, in particular where the traditional values of the person and the family have been weakened under the Western influence of secularisation". 7092 !GCAT !GPOL Socialist leader Lionel Jospin, launching a new offensive against France's centre-right government, on Sunday ridiculed President Jacques Chirac's call for "optimism" and predicted social unrest soon. Chirac, chairing his first post-summer holiday meeting, urged his ministers this week to "get yourselves together" and exude optimism to help the country out of the doldrums as trade unions threaten protests and strikes in coming weeks. "Who is demoralising the French if not those who showered them with promises in a presidential campaign, who deceive them cruelly today and who remain deaf to their demands?" Jospin asked in a closing speech to a party conference in the Atlantic port of La Rochelle. "Confidence cannot be decreed, or ordered; it must be deserved," said Jospin, who was narrowly defeated by the Gaullist Chirac in last year's presidential election. Jospin's speech opened a new campaign targetting both Chirac and the government. The Socialist leader has kept such a low profile in recent months, officially drafting a new policy platform, that newspapers have asked: "Where is Jospin?" . Socialist Party officials said Jospin had decided to raise the stakes and no longer spare Chirac personally because he expected the head of state to lead the ruling coalition in general elections due in 1988. In a detailed indictment of Chirac and the government of Prime Minister Alain Juppe, Jospin accused them of fuelling record unemployment, botching a protest by illegal African immigrants who occupied a Paris church until a police raid, and mishandling a resurgence of separatist violence in Corsica. "France is doing badly because there is a crisis of confidence and because of a patent economic and social failure. Depression is being relayed by fear and disarray. Everywhere, anxiety and anger are coming to the fore," he said in a reference to widely-expected social unrest. "Massive layoffs, irrepressible unemployment, frozen growth, record taxes, an explosive welfare deficit, a franc rocked by speculators," Jospin listed. Record unemployment, planned public spending cuts and layoffs have infuriated unions, who are threatening a fresh wave of unrest in a possible revival of the lengthy public-sector strikes which virtually crippled France late last year. According to a CSA opinion poll this week, 54 percent of voters are pessimistic as they go back to work after the summer holidays, with strikes, poverty and job losses topping worries. The poll found that 77 percent expected strikes and trouble for the centre-right government in the autumn. "Conservatism, corporatism, authoritarianism -- the Right has slipped off its mask," Jospin said. "(Chirac's campaign) talk of social divisions, of a France for all, is over. Where is the Marshall Plan for the inner cities promised during the campaign," he said. 7093 !GCAT !GDIP !GREL Pope John Paul, his voice trembling with emotion, launched a blistering attack against his native Poland on Sunday over a new law to liberalise abortion. "A nation which kills its own children is a nation without hope," the Pontiff said in Polish during an address to the faithful at his summer residence south of Rome. Italian television later translated the remark, which was made during a routine set of greetings in various languages. The Pope did not translate his comments or make them in any other language. The Pontiff branded abortion a "terrible crime" on Friday within hours of a vote in Poland's lower house of parliament allowing women to end pregnancies before the 12th week if they were too poor to raise a child or had other personal problems. The vote was a big blow to the Roman Catholic Church, which fought a desperate campaign against the change. The Church considers birth control and abortion a sin. 7094 !E12 !ECAT !G15 !G154 !GCAT !GDIP French President Jacques Chirac was meeting German Chancellor Helmut Kohl in Bonn on Sunday to discuss Paris's struggle to meet the conditions for the European Union's flagship project, a European single currency. Financial markets have become increasingly worried that France, plagued by a stagnant economy and record unemployment, may be falling behind in its attempts to cut public spending. Equally worryingly for the French government are signs that the autumn of discontent which last year undermined its attempts to slash the welfare budget could be repeated. Marc Blondel, the head of France's Force Ouvriere union which led a crippling transport strike last year, said on Saturday growing discontent pointed to social unrest in coming weeks and attacked plans for austerity in the 1997 budget. "We have the same situation as last year. All ingredients of discontent are there," Blondel said in an interview published in the daily Le Monde. "Until now the French viewed difficult times as unavoidable and unemployment as a trial. But gloom is progressively turning into discontent and anger," he said. Force Ouvriere has called a protest march on September 21 as a warning to the government. Bonn faces a struggle of its own to get its budget deficit inside the limits required to qualify for monetary union (EMU) in 1999, but has so far been more effective than Paris in pushing through welfare cuts against massive union opposition. Kohl has in the past used regular Franco-German summits to express his confidence that France will fulfil the EMU criteria on time and underline that a single currency is inconceivable without France's participation. A German government spokesman said on Friday that it was likely EMU would top the agenda at Sunday's talks, taking place at Kohl's private bungalow next to the Rhine-side chancellery. Kohl and Chirac may also return to the subject of defence cuts which have introduced an element of strain into bilateral relations this year. Budget restrictions have forced Bonn and Paris to reevaluate defence projects on which they had planned to cooperate, exposing different priorities on both sides of the Rhine. France is withdrawing many of the troops it has stationed in Germany as part of a radical overhaul to convert its conscript army into a volunteer force better equipped for long-range rapid deployment. The cuts have called into question a number of joint procurement and task-sharing projects. While France has appeared less committed to two projects for new transport and attack helicopters, German Defence Minister Volker Ruehe has said a cut in his own budget means he cannot finance Bonn's promised participation in France's pet project to build two military spy satellites. A joint task force is producing a comprehensive review of all 27 joint defence projects which is due to be completed before the end of the year. 7095 !GCAT Two young Belgian women who were missing since Thursday have been found in Cologne, Germany, Cologne police said on Sunday. The police said in a statement that the two young women -- Rachel Legeard, 18, and Severine Potty, 19 -- were found at 3.45 p.m. local time on Saturday in the Buchforst area of Cologne, sleeping in a hollow in the ground just beside the motorway. One of the women told police they had been asked for directions at a bus stop in Liege at around 3 p.m. on Thursday by a man aged around 40 in the passenger seat of an old Mercedes with a German licence plate. She then remembered nothing else until she was woken up in Cologne. The young women were handed over to the Liege police on Saturday night. Liege police said on Saturday that the two had been found unharmed. They were reported missing after failing to return home from a shopping trip to the eastern town of Liege on Thursday. 7096 !GCAT !GCRIM !GPOL Two aides of late French president Francois Mitterrand have called on the courts to seize a book by a member of his anti-terrorist unit which details telephone taps and his alleged "political police", a weekly reported on Sunday. The Journal du Dimanche said ex-Socialist minister and Mitterrand adviser Michel Charasse, and former Mitterrand chief of staff Gilles Menage have both filed suits against the book, "Secret Wars at the Elysee", by ex-police captain Paul Barril. "I have filed a suit to have the defamatory and incorrect parts suppressed. It's now up to the judges to deal with it," Charasse told the newspaper. Neither Charasse nor Menage could be immediately contacted to comment on the report. The book, published on Friday, alleges that Mitterrand's old friend and confidant Francois de Grossouvre, found dead in 1994 in his office at the Elysee Palace, did not commit suicide as officially reported but was murdered. Barril writes that he has no absolute proof for this assertion but calls for a judicial investigation into the death, pointing to several factors which he says make murder the most likely explanation. The book also alleges that the anti-terrorist cell, created by Grossouvre when the Socialist Mitterrand came to power in 1981, was turned against his advice into a "secret police specialising in shadowy missions and espionage against anyone seen as dangerous by the Socialist regime". Barril says that Grossouvre was most likely murdered because he knew too much about corruption and other scandals undermining the Mitterrand administration. 7097 !CCAT !GCAT !GDIS Norwegian officials said on Sunday the voice recorder of a crashed Russian passenger plane had been found by Russian rescue workers on a mountain top on the Arctic island of Spitzbergen. The find followed the recovery of the flight recorder in the snow near the Tupolev TU-154's tail section on Friday, the day after the plane slammed into the mountainside killing all 141 people on board. Both boxes were to be flown to Moscow for examination of flight data. The voice recorder was discovered by two Russian rescue workers who had illegally entered a secure area on the mountain plateau on Saturday. The two, belonging to an 11-member team of mountaineering experts flown in from Moscow, were taken in for questioning by Norwegian police and only released at midnight. "They found some passports and also something they said must be the voice recorder," deputy Spitzbergen governor Rune Hansen told a news conference. "They marked the recorder with a stone. Our personnel this morning recovered the voice recorder where the Russians said they had found it." Ann-Kristin Olsen, governor of the Norwegian Artic territory, on Saturday accused the Russians of breach of trust and of failing to respect that the investigation was headed by Norway. Hansen said the men apologised for entering the area alone and explained that they had not deliberately violated Norwegian authority. They had been flow in by a Russian helicopter to survey the top of the crash site hours after setting up a base camp in the valley below. Asked why Norwegian rescue workers had not found the voice recorder despite having searched for three days, Hansen said: "We are doing a systematic search according to plan. They were eager to go to work and they went ahead of the plan. "We are happy that they found the voice recorder...but this operation is 100 percent led by Norwegian staff. This is Norwegian territory," Hansen said. The incident was a reminder of Cold War days when the Norwegians and Russians on Spitzbergen found themselves on different sides. Norway, which governs the island, is a member of NATO. Olsen, who on Saturday ordered the Russian base camp dismantled and the team sent to the nearby Russian settlement of Barentsburg, said the Russians would return during the day by helicopter, weather permitting. A meeting with Russian officials would determine how the cooperation would continue, she said. Twenty bodies were brought down from the crash site on Saturday to the town of Longyear and flown to the northern Norwegian city of Tromsoe, 500 miles (800 km) to the south, for formal identification and autopsy. The recovery work was hampered on Sunday by fog. The dead were Russian and Ukrainian miners, some with their families, who were on their way to work in the coal mines on the island. Fewer than 3,000 people live on Spitzbergen, which has one of the world's harshest climates. 7098 !GCAT !GCRIM Police resume digging for bodies on Monday in houses owned by Marc Dutroux, the chief suspect in Belgium's child sex scandal, while teachers brace for a barrage of questions from shocked children starting the new school year. After resting for the weekend following two gruelling weeks of searching in the six houses owned by convicted child rapist Dutroux in and around the southern city of Charleroi, police will return to one in the city's Jumet suburb. Radar-imaging equipment, used in Britain's "House of Horrors" serial murder investigation, located two suspicious underground cavities in the cellar of the house on Friday. These will be investigated on Monday, as will an "anomaly" found by the equipment in another Dutroux house in the suburb of Marcinelle, where they found two other sexually abused girls -- Laetitia Delhez and Sabine Dardenne -- in a dungeon. Police will also return to another house where trench-like cells for holding kidnapped children were found. In two weeks of hunting police have discovered the bodies of eight-year-olds Julie Lejeune and Melissa Russo in the garden of another of Dutroux's houses in Sars-La-Buissiere near Charleroi. They are still searching for at least two others -- An Marchal and Eefje Lambrecks -- whom Dutroux admits kidnapping. The discovery of the web of paedophile abduction, porn and death has horrified Europe, prompted the government into tightening the rules on early release from jail of sex offenders and triggered calls for a global war against the trade. Dutroux, an unemployed electrician, was released 10 years early in 1992 after serving only three years of a 13-year sentence for raping five children. This, and the fact that he has fathered three children by his two wives, has bewildered adults and children alike. "We know we will get questions about the Dutroux case, and we are preparing for it," Myriam Eynikel, a primary school teacher in Brussels' Strombeek suburb, told Reuters. "My daughter is terrified, she is glued to every newscast. We have tried to tell her there are adults with bad intentions, without focusing on the sex-abuse aspect," she said. Belgian Prime Minister Jean-Luc Dehaene summed up the national mood when announcing tougher sex offence rules on Friday. "Children represent our future. They deserve a happy childhood. We must protect and guarantee their rights. Everything must be put in place so that this drama is never repeated," he said. The hunt for missing girls has spread beyond Belgium's borders. Belgian police have visited Slovakia and the Czech Republic, and have contacted colleagues in Austria and Germany. Dutroux has been named in Bratislava as a suspect in the murder of a young Slovak woman. Interpol's Slovak office has said he was also believed to have planned the kidnapping of at least one other Slovak woman. Dutroux has said Julie and Melissa starved to death early this year while he was in jail for car theft. Belgian newspapers said his second wife Michelle Martin -- also under arrest -- has admitted that she failed to feed the children out of fear of facing them in their cell. Nine people are now under arrest in the affair including Martin who has been charged as an accomplice. Dutroux and an associate are charged with abduction and illegal imprisonment. 7099 !GCAT These are the leading stories in the Algerian press on Sunday as reported by the official Algerian news agency APS. Reuters has not verified these stories and does not vouch for their accuracy. EL MOUDJAHID - Some 70 delegates from 40 African countries meet on Sunday in Algiers to review African Youth Movement. LIBERTE - President Zeroual's aides put last touches on political reform plan ahead of national conference between opposition parties and authorities. EL WATAN - Government prepares economic conference to assess economy's performance. 7100 !GCAT !GENT England has Shakespeare, Germany has Goethe and now Norway is wondering how to get more mileage out of its most famous son -- Henrik Ibsen, the dramatic master of Nordic gloom and claustrophobia. Ibsen's plays, angst-ridden masterpieces of late 19th century drama, are performed all over the world. But those who come to Norway looking for a major Ibsen museum or memorial will be disappointed. Fjords and mountains are used to promote Norway's image, while Ibsen rates only a brief mention in travel brochures and tourism literature. The great man has paid a high price for his fierce criticism of Norwegian society, often depicted as hypocritical, narrow and stifling in his plays. Norwegians respect his work and fame but have never really warmed to the man hailed as the father of modern drama. About the only time Norwegians leap to his defence is when foreigners make the common mistake of assuming that Ibsen was Swedish. Now, all that may be about to change. "It is time for Norway to reclaim Ibsen," said Culture Minister Aase Kleveland in a newspaper interview. If Ibsen is given his proper place at home, he can be used to market Norway, much as William Shakespeare pulls in the tourists in England or Johann Wolfgang Goethe is used as a symbol of German culture around the world. Kleveland told the daily Dagbladet on Saturday she backed the idea of an "Ibsen project" that would boost his image and prestige in the service of Norway. A two-week international festival of Ibsen plays that opened in Oslo on Saturday shows just how far his fame and influence have spread in the 90 years since his death in 1906. Theatre groups from China, Russia, Israel, the Czech Republic and Canada have come to perform such classics as "Ghosts", "An Enemy of the People" and "Hedda Gabler". "All these years, we have had a rather distant relationship with Ibsen. We have never been quite sure whether we liked him...After all, he criticised some of our national values at times," said Kleveland. Many Norwegians see thrift, modesty and conformity as worthwhile values, but Ibsen often portrayed them as a brittle cover for appalling secrets and unpleasantness that lay just beneath the surface. There are just two small Ibsen institutes in Norway. One is in the small southern port of Skien where he was born in 1828. The other is in the town of Grimstad where he worked as an apprentice chemist and, at the age of 18, got a servant girl pregnant. Their illegitimate child was Ibsen's own dark secret. The playwright and poet travelled and lived abroad for much of his life, mostly in Germany and Italy. Ibsen seemed uncomfortable in Norway and, on returning from abroad at the age of almost 70, he wrote to a friend: "Up here by the fjords is my native land, but...where do I find my homeland?" 7101 !GCAT !GDIP !GVIO Iraq's deputy U.N. ambassador said that Baghdad's decision to withdraw its troops from Kurdish strongholds in northern Iraq was "clear cut" and would be implemented shortly. In an interview with Reuters Television late on Saturday, Dr Saeed Hasan also warned Iran not to interfere in the affairs of the Kurdish North but said Baghdad would not reassert its control over these areas at this time. He dismissed suggestions that the military action would have an impact on the forthcoming limited oil sales plan between Iraq and the United Nations saying, "since this is a limited operation and has already been finished and achieved, I don't think it has an impact on the oil-for-food (deal)." This arrangement allows Iraq to sell $2 billion worth of oil to raise funds for food, medicine and other supplies for its people suffering under sanctions imposed shortly after Baghdad troops invaded Kuwait in August 1990. Hasan, Iraq's charge d'affaires at its U.N. mission, said Baghdad's decision to pull out its troops was "clear cut, a declaration of intention that will soon be followed by implementation. It is planned for very soon, So please wait." But Hasan did not give a timetable. None was given in Baghdad in a statement issued after a meeting of the Revolutionary Command Council and leaders of the ruling Baath party chaired by President Saddam Hussein. Iraq, according to U.S. officials, amassed 30,000-40,000 troops this week in the northern Kurdish provinces and on Saturday captured the city of Arbil, expelling one Kurdish faction and installing a rival group, headed by Massoud Barzani, which is more amenable to Baghdad. The two Kurdish factions, Barzani's Kurdistan Democratic Party and the Patriotic Union of Kurdistan, have a history of bloodshed and shifting alliances with Iraq and Iran. Kurdish populations live in both countries as well as in Turkey and have been under siege by all three for decades. Hasan maintained the military action was necessary because Iran was reported to have sent 300 Revolutionary Guards to the area two weeks ago and earlier had infiltrated Kurdish groups. He never directly commented on President Bill Clinton's warnings and the ordering of U.S. forces in the region on high alert but said Iran as well as "other parties" should realize that the three northern provinces were still a part of Iraq and not a "no man's land." "So our message to Iran is clear: 'don't interfere in our internal affairs. Don't hurt our sovereignty," he said. "And at the same time, it's the same appeal to other parties." Iraq has not controlled its three northern provinces since Kurds rebelled against Saddam Hussein at the end of the 1991 Gulf War and the United States, Britain and France declared the area an exclusion zone and forbid Iraq to fly over it. Both Hasan and the statement in Baghdad sought to allay fears that Iraqi troops would retake the north immediately. "The Iraqi leadership is convinced that circumstances are not ripe yet to include the autonomous part of Iraq within the government administration. This question needs to be dealt with through dialogue, with our people in the north," he said. But he said Iraq's ultimate goal was to gain "unity of our country and this is the right of all Iraqi people." Most experts believe Washington does not want an independent Kurdish homeland or the disintegration of Iraq. But apprehensive of a powerful Iraq under Saddam Hussein, the United States apparently prefers to maintain the Kurds in the north as a semi-independent entity. At the United Nations, the United States and other Security Council members consulted on Saturday by telephone on whether to call a meeting during the holiday weekend but came to no decision, diplomats said. The United Nations has protested Iraq's treatment of the Kurds but the exclusion zone was imposed by the allies without a U.N. mandate. 7102 !C24 !CCAT !GCAT !GODD When European Union leaders talk about building Europe, they do not usually mean on a scale of 1:25, with the Arc de Triomphe coming to just above eye level. Nor does talk of uniting Europe generally apply to putting a baby Tower of Pisa next to a midget Berlin Wall. But at Mini-Europe, a theme park in Brussels, hundreds of thousands of visitors each year are met by pint-sized replicas of European landmarks and a wealth of publicity about the virtues of the European Union. A scaled-down Acropolis looks down from a tiny, rocky outcrop. Mount Vesuvius, not much bigger than a Fiat Uno, belches smoke and shakes the ground. Barbie-doll sized spectators shout "Ole!" in Seville's Plaza de Toros. Elsewhere, visitors gaze in miniature at the grandeur of Brussels' Grand' Place, the monastic simplicity of Ireland's Glendalough, and the elegance of Lisbon's Torre de Belem fortress. All around, European technological achievements compete for attention with the continent's more traditional sights. A mock-up of the European Space Agency's Ariane 4 rocket "takes off" every five minutes. A tiny French TGV, or high-speed train, clocks up 10,000 km (6,215 miles) a year. A see-through Channel Tunnel links Britain and France across a few metres (yards). The park, a subsidiary of Belgian leisure company Walibi Group, opened in 1989 with the goal of taking visitors on a trip across Europe. Since then, however, it has become more and more a showplace for the expanding European Union. "We decided to emphasise the presence of the European Union. We want the people first of all to have a good visit...(and) to discover Europe," said Thierry Meeus, Mini-Europe's director. Visitors get a taste right from the start. European Commission President Jacques Santer and European Parliament President Klaus Haensch stare out from the welcoming page of the official guidebook and the first exhibit is a scale model of the Commission's usual headquarters building, the Berlaymont. Unlike the real thing, however, it is not currently covered in a white sheet while workers spend years stripping it of deadly asbestos. Half way around the park, visitors are invited to break off to enter a multimedia centre featuring computer games about Europe and stacked high with information on the EU. Apart from the odd glitch -- one map in the centre implies that Norway was a founding member of the EU, even though its people have rejected membership twice -- the centre has proved highly successful. Meeus said he had been told by the European Commission that with its 300,000 plus visitors a year Mini-Europe brought more people in contact with the EU than any other information centre across the 15-nation bloc. With EU sponsorship, Mini-Europe also hosts a European Class, a programme in which school children spend an hour in the park and an hour being taught with slides about the EU, its institutions, treaties and goals. Meeus said the emphasis was on using the park's models to explain to European children the links between their countries, for example, how the Dutch built Copenhagen harbour. "The children can imagine the roots of the European Union," he said. But it is the park's scale models and working cars, boats and planes rather than learning that really bring in the crowds. Each model requires accurate scale drawings and thousands of photographs before construction work can begin. Once it does, it takes time and money to complete. For example, Spain's Santiago de Compostela model took 24,000 man hours to make, while Brussel's Grand' Place cost more than $425,000. The growing popularity of Mini-Europe has meant that the theme park itself no longer always has to come up with the models itself. EU countries and regions, keen to display their architectural treasures, have begun donating models. One of the latest, due to be put in place next year, is a model of the City of Melk being given to the park by the government of Lower Austria. It was not always so. Meeus remembers trying to get designs of buildings in Florence before the park was opened. Italian authorities, then suffering from a wave of terrorist attacks, refused. Even today, when the park has the official blessing of the European Union, it is not always smooth sailing. Although Finland and Austria, two newcomers to the EU in 1995, were keen to participate, Meeus said the response from Sweden, the third new member, was less robust. "With Sweden I had to contact them 10 times for suggestions," he said. "They told me "We are not so enthusiastic about Europe'." A model from Sweden will nonetheless be inaugurated next year. 7103 !GCAT Following are some of the main stories in Sunday's Pakistani newspapers: DAWN - Pakistan recorded the seventh highest growth rate in consumer prices among East and South Asian countries in 1995, according to an International Monetary Fund report. - The annual meetings of the IMF and the World Bank Group will be held in Washington from September 25 to October 3. - Asia remained the biggest market for Pakistani goods, according to the Federal Bureau of Statistics. - Prime Minister Benazir Bhutto said the release of the embargoed U.S. arms under the Brown amendment was the close of a difficult phase of U.S.-Pakistani relations. - Prime Minister Benazir Bhutto is expected to visit New York on September 30 to lead the Pakistani delegation at the 51st session of the U.N. General Assembly. BUSINESS RECORDER - The government has increased prices of controlled drugs by six percent and those of decontrolled ones by 12 percent effective November 1. - Textile mills have decided to import cotton and export yarn. - Pakistan's cigarette trade is expected to transform itself by switching from local manufacture to importing popular brands. FINANCIAL POST - The State (central) Bank of Pakistan has issued another warning to state-run banks expressing its dissatisfaction over their performance regarding recovery of huge outstanding loans totalling 123 billion rupees ($3.44 billion). THE NEWS - Sugar prices have started falling in the local market due to imports. - The government has overspent 60 billion rupees of the amount it had budgeted for fiscal 1995/96 (July-June). - The Asian Development Bank has approved Pak-Kuwait Investment Company's participation in $100 million financial sector intermediate loan for Pakistan. - Afghan currency has reached its lowest ebb in Peshawar where 50 Afghanis are available for only one rupee. THE MUSLIM - Pakistan has decided to import potatoes from Saudi Arabia. - Prime Minister Benazir Bhutto said Pakistan has no option but to buy French-made Mirage 2000-5 fighters for its air force. - Pakistan and the United States will form a joint development forum of public and private sectors to promote commerce and trade during the visit of U.S. Assistant Secretary for Commerce Raymond Vickery to Islamabad from September 5 to 7. -- Islamabad newsroom 9251-274757 7104 !GCAT !GDIP !GVIO Rockets killed two civilians in Kabul on Sunday as an Iranian envoy visited the city to invite Afghan Foreign Minister Najibullah Lafrai to a peace conference in Tehran, government-controlled radio reported. It said the rockets, fired by the Islamic Taleban militia entrenched in hills south of the Afghan capital, also wounded 14 people and destroyed six houses. The Iranian envoy, Murtaza Sarmadi, invited Lafrai to a conference of regional foreign ministers to be held in Tehran in October to promote peace in Afghanistan, the radio said. Iran is inviting the foreign ministers of all Afghanistan's other neighbours -- Pakistan, Tajikistan, Turkmenistan and Uzbekistan -- to the meeting, but not rival Afghan factional leaders. A Russian delegation led by Ivgini Mikhailov, a special envoy of President Boris Yeltsin for Tajik affairs, held talks with Prime Minister Gulbuddin Hekmatyar about security on the Afghan-Tajik border, the radio said. Moscow says Islamic Tajik rebels fighting the Russian-backed government in Dushanbe use bases inside northern Afghanistan. Hekmatyar, quoted by the radio, told Mikhailov that the solution to the Tajik conflict lay inside Tajikistan. He added that his government would encourage the Tajik opposition to hold talks with the Tajik government to pave the way for elections. 7105 !GCAT !GDEF !GDIP !GVIO Pakistani police have arrested four men accused of planting bombs at India's behest, Punjab province Senior Minister Malik Awan said on Sunday. He told a news conference that the unnamed men had confessed their part in seven bomb attacks that had killed 57 people and wounded 120, the official APP news agency reported. Awan said the suspects had told interrogators that they had received money and training from India's Research and Analysis Wing intelligence agency, but gave few details. The minister said the men had been caught by police in Sheikhupura, 40 km (25 miles) northwest of Lahore, but did not say when. He said investigations were still under way. Pakistan has frequently accused arch-rival India of sponsoring bomb attacks in the populous province of Punjab. India denies the charges and says Pakistani agents are responsible for armed attacks on its territory. 7106 !GCAT !GDIS !GENV Floods triggered by heavy rain and bursting rivers have killed at least 14 people in Bangladesh's northern Rajshahi and Chapainawabganj districts, local officials said on Sunday. They said three bodies were seen floating on Sunday in the river Padma, which raised its level following rain and a rush of floodwater from across the Indian border. The river Mahananda was also above its danger level after what officials said was release of floodwater through India's Farakka barrage, close to the Bangladesh border. Some 165,000 people have been badly affected by the week-long floods that have also inundated low areas in Ranshahi city and threatened several embankments. "The whole city may go under water...if the Padma overflowed or breached its embankment," Kazi Farid Ahmed, Rajshahi district commissioner, told the official BSS news agency. Authorities have distributed 100 tonnes of rice as immediate relief to the flood victims, he said. Floods sweeping northern Bangladesh in July killed at least 65 people and left over half a million homeless, according to official figures. 7107 !GCAT !GPRO !GREL Mother Teresa has developed a chest complication, her doctors said on Sunday after an X-ray showed dark patches on her lungs. "We have found some dark patches in her chest in the X-ray," Dr S.K. Sen medical director of Calcutta's Woodland nursing home told reporters. Sen said doctors decided to conduct an X-ray on the 86-year old Roman Catholic nun to monitor her treatment for pneumonia. She was earlier said to be suffering only from malaria and heart trouble. A medical bulletin on Mother Teresa's condition said: "Mother Teresa remains fully alert and conscious. "Cardiac irregularity is still present. She has developed a chest complication for which she is being investigated." The Nobel laureate is being treated at the hospital's intensive care ward after she was admitted there on August 20. 7108 !C11 !C13 !CCAT !GCAT !GPOL Prime Minister H.D. Deve Gowda's left-leaning Janata Dal party said on Sunday it was opposed to foreign media setting up business in India. Party spokesman Jaipal Reddy said the issue was discussed at the decision-making national executive meeting of the Janata Dal on Saturday. "The Janata Dal reiterated its views that the multinational companies may enter areas of technology gap and infrastructure, but not agricultural and small scale industrial sectors and the media," he said, quoting a party statement that also covered other political issues. The statement came as Britain's Financial Times, owned by Pearson Plc, was pressing to buy a stake in India's salmon-coloured Business Standard newspaper. The alliance would have broken new ground in India, where the foreign media has been barred from publishing or broadcasting since 1955 under a policy designed to protect domestic firms and cultural values. The Times proposal, the latest of a slew by foreign firms, was recently referred to a special cabinet committee. It has spurred debate over the role of the foreign media in India, which is engaged in a five-year economic liberalisation programme. The debate has split the government, with several low caste Hindu deputies differing from the two main communist parties, and the rightwing Hindu Bharatiya Janata party spearheading the drive against the entry of foreign media companies. Among those seeking a greater role for the foreign media are Phoolan Devi, a former woman bandit-turned parliament deputy, who hails from the low caste family of mallahs, or boatmen, and a government minister who declined to be named. They accuse much of the Indian media of harbouring a bias against lower caste Hindus. Information and Broadcasting Minister C.M. Ibrahim, a close confidant of the prime minister, was recently quoted as opposing any move to scrap a 1955 cabinet decision preventing foreign networks from broadcasting from India or foreign newspapers and magazines from publishing in the country. Former prime minister P.V. Narasimha Rao's Congress party, which ushered India's liberalisation programme in 1991, has been equally divided over the issue. The United News of India (UNI) quoted Congress deputy Ajit Jogi on Sunday as supporting the foreign media companies. "When multinationals can produce potato chips, generate power and sell computers in India, why can't they bring out newspapers," he was quoted as telling a seminar entitled "Entry of Foreign Media" in the central Indian city of Bhopal. UNI quoted other participants as complaining that Indian newspapers spent just two percent of their advertisement revenue on news gathering. Others accused newspaper owners of having unidentified vested interests that curbed their ability to report freely. Foreign networks, notably media baron Rupert Murdoch's STAR TV, beam programmes into India by satellite. Publishers are permitted to sell in India their editions printed overseas. The 1955 ruling does not bar news-gathering operations by foreign media. But broadcasters cannot uplink from Indian soil, and publishers cannot print in India or own an Indian journal. 7109 !GCAT !GDIP Bangladesh Foreign Minister Abdus Samad Azad leaves for Burma on Monday for a three-day visit in the wake of mounting border tension. The minister will be accompanied by senior officials of the foreign and home (interior) ministries, a foreign ministry official said. Azad told parliament on Saturday that Bangladesh wanted to focus on regional diplomacy, especially with members of the South Asian Association for Regional Cooperation (SAARC). "It's time for multiplying efforts to step up regional cooperation, not confrontation. We are looking at Pakistan, Nepal, India and other countries for their support to our efforts," he said. Relations between Bangladesh and Burma have become strained after Dhaka said five people had been killed and several others wounded by landmines planted by Burmese troops on the border over the past few days. On Wednesday, Bangladesh police said the Burmese border guards, called Nasaka, had entered several miles into Bangladesh territory at Naikhyangchhari, 45 km (30 miles) from Cox's Bazar, and opened fire, killing two people. They said the attackers also abducted nine woodcutters. On Friday, a Burmese Moslem was killed and two wounded as the trio attempted to flee into Bangladesh, Bangladeshi frontier guards said. Up to two Bangladeshis were shot and killed by the Nasakas on Saturday, they added but they gave no further details. Colonel Mahbubur Rahman, local Commander of Bangladesh Rifles border guards said the landmines had apparently been planted to "deal with Burmese separatist Moslem guerrillas such as the RSO (Rohingya Solidarity Organisation)". More than 44,000 Burmese Moslems, called Rogingya, are now in Bangladeshi refugee camps, awaiting repatriation. They were among more than 250,000 Rohingyas who fled to Bangladesh from west Burma's Moslem-majority Arakan province in early 1992 to escape what they said was persecution by the military junta. 7110 !GCAT !GPOL !M11 !MCAT A spokesman for Prime Minister Benazir Bhutto denied on Sunday a rumour moving the Karachi Stock Exchange that an attempt had been made on her life. "It is absolutely wrong. No such thing took place. The Prime Minister is at home and will attend the National Assembly session this afternoon," the spokesman said. He said Bhutto had been conducting meetings at her residence all morning and had not left the building. Dealers in Karachi said the rumour had helped depress the 100-share index, which fell 4.41 points, or 0.31 percent, to 1,413.83 points at midday. -- Islamabad newsroom 9251-274757 7111 !GCAT !GDIP !GVIO Sri Lanka, stepping up a drive to curb separatist Tamil Tiger rebels' activities overseas, seeks to sign extradition treaties with Western countries, government officials and diplomats said on Sunday. Foreign Minister Lakshman Kadirgamar discussed with visiting British Foreign Secretary Malcolm Rifkind on Saturday a repatriation agreement between the two countries. "Both Britain and Sri Lanka are grappling with the problem of terrorists and they agreed to pursue action on the issue of repatriation," Kadirgarmar's spokesman Ravinatha Aryasinha told Reuters. "For the repatriation of those who committed crimes of a terrorist nature, an extradition treaty is a natural course." At a recent meeting of Group of Seven industrialised nations and Russia in Paris, Britain proposed action against the abuse of asylum, saying an additional protocol to the 1951 Convention on Refugees was needed to prevent terrorists, or those who help them, from claiming asylum in other countries. Aryasinha said Colombo was also negotiating an extradition treaty with Switzerland. Nadarajah Muralidaran, Swiss-based leader of the Liberation Tigers of Tamil Eelam (LTTE) rebel organisation, has been held in a Zurich jail since April on charges of extortion. Sri Lanka has accused the Tigers of extorting funds from expatriates in the United States, Britain, France, Switzerland and other Western countries to finance its guerrilla operations. The LTTE has been fighting the Sri Lankan army for the past 13 years, demanding an independent homeland for minority Tamils in the country's north and east. But Colombo says most Tamils oppose the war, which has cost more than 50,000 lives. "Colombo has been gearing up its international campaign against the Tigers as some Western governments have started criticising the rebels," an Asian diplomat said. Rifkind on Saturday condemned the LTTE for bombing Sri Lanka's central bank in January, killing nearly 100 people, and for the July bombing of a train in a suburb of Colombo in which 57 died. "We unreservedly condemn terrorist acts that have been carried out by that organisation," he told reporters. The U.S. State Department's coordinator for counter-terrorism, Philip Wilcox, said last month Washington sympathised with the predicament that Colombo faced. He promised that Washington would "do all within its prevailing legal framework to prevent the use of American soil to perpetrate violence against" the Sri Lankan government said. However Rifkind said Britain respected political freedom and ruled out any crackdown on the LTTE's political campaigning even if the Sri Lankan government decided to formally ban the group. "I think Sri Lankan officials were disappointed by Rifkind's statement openly assuring the LTTE's political activities in London, but they are putting on a bold face and pressing ahead with its diplamatic drive against the LTTE," the diplomat said. The Tigers, who have their international propaganda base in London, are not formally banned by Colombo, which wants to retain the option of eventually resuming peace talks with the rebels. "I think Sri Lanka will actively seek contacts with India in the next few weeks as India is critical for any diplomatic initiative against the LTTE," said Sarath Cooray, editor of pro-government Dinamina newspaper. Sri Lanka needs neighbouring India's support to block arms supplies and other assistance to the LTTE by the Tamil-dominated south Indian state of Tamil Nadu. 7112 !GCAT !GDIS At least 44 people were feared drowned when their vessel capsized in the Nagavalli river in the southern state of Andhra Pradesh, the United News of India said on Sunday. It quoted official sources as saying the boat was carrying some 50 people, mainly tribespeople, when it sank on Saturday. Six people swam to safety, it said. 7113 !CCAT !GCAT !GDIS Mohsina Begum consoled her weeping four-year-old daughter, telling her that her father will come home soon. Sharea Khatoon looked far out to sea, breast-feeding her 18-month-old son who is still too young to be aware of the tragedy that has befallen the family. Mohsina and Sharea are among hundreds of women who rush to the sea shores at Maheshkhali island, seven kilometres (four miles) from Cox's Bazar resort town, at least once a day. At water's edge, they wait and hope for their loved ones, missing fishermen, to appear. Fishing is the main livelihood of the many small Bangladeshi islands dotting the Bay of Bengal and it is a tough, hard life that has taken heavy toll on the people. "He has been lost in the sea," Mohsina said of her husband, struggling to hold back her tears. "But I don't know if he is dead." A few people walked past but hardly noticed as Sharea spoke to Reuters. "Tragedies have struck almost every house on this island," she said. "I am keeping an endless vigil, for years. My conscience is divided -- one says he is dead but the other would not agree," said Mohsina. Her husband Abdul Barek, a fisherman, has been lost in the Bay of Bengal since a storm struck his boat more than three years ago. Sharea's husband, Mohammad Mohiuddin, went fishing eight months ago but has not returned. The bodies of a few of his colleagues were collected on the beach days after the island was battered by strong winds but Mohiuddin remains unaccounted for. "I believe the sea will return my husband -- dead or alive," said the young mother. Her neighbours believe otherwise. "She is too shocked to accept he will never return. They had a sweet family full of hopes. Now everything has been shattered," one neighbour said. People on the islands and the coast say they have no statistics on those killed by storms and other accidents at sea. "It's impossible to keep track. Some people are known to have died immediately after a disaster. Others, presumed dead, sometimes come back months after they had been reported missing or killed," said Shafiqur Rahman, a fishing community leader. Boats sometimes drift into Indian waters, some towards Burma and some even farther. "We also rescue fishermen from Sri Lanka, India and other countries. So it happens to our fishermen too," he told Reuters. Fishing vessel owners offer up to 20,000 taka ($500) to families of each crew killed, but there is no compensation for families of those missing. "This is an unwritten law. We try to honour it," one leader said. The greatest number of fishermen died in 1991, when a cyclone killed more than 138,000 people. Shamsu Miah, a Maheshkhali trawler crewman and veteran of many storms in his 26 years of fishing, estimated nearly 1,500 fishermen are still missing from that cyclone. About 12,000 people died on Kutubdia island alone, 12 km (eight miles) from Maheshkhali, local officials said. Many survivors have managed to resume their lives, get new boats and moved back to the sea. "But the women and children rendered widows and orphans have been thrown into a totally uncertain future," said Mohammad Kamal, who described himself as a social worker. Sharea has found shelter in her parents' home, but they are too poor to provide her with two square meals a day. She works in Cox's Bazar at a fish processing house owned by a local vessel owner. "I will live for my son only. I have no hopes except for him," she said. Clad in a torn sari, Sharea recalls her brief married life and sheds silent tears. "The marriage was built on years of love. People in our community are conservative about love and free choice... but we managed to. Perhaps Allah did not approve of it," she said, referring to her marriage not being arranged by her family. Islanders insist that the sareng (pilot) and the crew on fishing vessels, which sail up to 160 km (100 miles) or more into the Bay, are highly skilled though not formally trained. "Knowing by practice makes one more efficient," said 70-year-old fisherman Hamid Ali. "Tragedies are mainly to blame on inadequate warning, lack of life-saving gear onboard and the indomitable lure for big catch." 7114 !GCAT !GDIS A fire tore through a senior citizens home on Saturday killing two men and four women in the building that was not equipped with a sprinkler system, Montreal police said. Police said they believed the fire was ignited by a match dropped by a woman in her apartment. She was treated for serious leg burns. The Canadian Press, quoting police officials, reported at least one other woman remained unaccounted for at the home, where 41 elderly citizens lived. Firefighters said the building had no sprinkler system because it was exempt under a recent bylaw that required only new buildings to install such systems. 7115 !GCAT !GWEA Hurricane Edouard remains a threat to shipping and coastal regions at this time. The storm, currently 220 miles south of Nantucket Island, and is moving north at 16 mph. Top winds are 105 mph. Large ocean swells will occur from the Bahamas to Bermuda and along the East Coast of the USA. Edouard is expected to make landfall Monday morning, so all interests along the coast should keep updated on the progress of the storm. Hurricane Fran, with 75 mph winds, is northwest of Dan Juan Puerto Rico. Fran will continue its west northwest track with top winds remaining near 75 mph today, and will be a threat mainly to shipping during the next 24-36 hours. It may threaten the Bahamas' early Wednesday, however this is still uncertain. Tropical Storm Gustav, with 40 mph winds, is 1040 miles east of the Leeward Islands, moving west northwest at 14 mph, and is expected to weaken within the next 24-36 hours. Tropical Storm Orson is centered about 310 miles southeast of Tokyo, Japan, with top winds near 80 mph. Orson is has begunb to poleward and is expected to continue to track norhteastward for the next 24 hours. Tropical storm 22W activity is expected to reamin the same as it tracks norhtward form near 33.3n/175.6e for the next 36 hours. 7116 !GCAT !GPOL A controversial measure that could have made it easier for the San Fernando Valley to secede from the city of Los Angeles was effectively killed late on Saturday in a California state Senate committee. State Assemblywoman Paula Boland's bill would have removed the Los Angeles City Council's veto power over any attempt by the San Fernando Valley to secede from Los Angeles. Some residents of the Valley complain they pay too much in taxes to the city but do not receive enough services in return. Boland had amended her bill to allow residents throughout Los Angeles to vote on the issue of secession. She amended the proposal in a bid to appease the bill's critics. Under the original measure, only San Fernando Valley residents would have had the right to decide for or against secession. The Boland proposal cleared the Assembly. But it was held up late on Saturday in the Senate appropriations committee. By holding the measure, the Senate panel effectively killed the bill for the year because Saturday was the final day of the legislative session. 7117 !C22 !CCAT !GCAT !GDEF Britain on Monday launched its largest ever air show by giving the go-ahead for production of the much-delayed Eurofighter fighter aircraft. Britain's vote of confidence in the four-nation consortium building the 21st century plane gave a boost to the European industry battling U.S. aviation giants in a cut-throat market. The 40 billion pound ($60 billion) fighter, delayed several years by technical problems and political wrangling, is to be the star of the Farnborough air show where it will be put through its paces before the world's leading buyers. "Our assessment is that Eurofighter is the best available combat aircraft to meet the needs of the post-Cold War strategic environment," Deputy Prime Minister Michael Heseltine said at this southern English airfield. As Heseltine inaugurated the show, Defence Minister Michael Portillo announced that Britain is to go ahead with the purchase of 232 of the jets, opening the way for the production programme to start. The fighter, a joint venture by Britain, Germany, Italy and Spain, is costing around 12 billion pounds to develop. But now the four industrial partners need their governments to invest another 30 billion pounds on the production programme. Due to the delays, Portillo had contemplated leasing or buying some U.S. F-16 fighters either as a stop gap or even as an alternative to Eurofighter. That is now firmly ruled out. The Eurofighter consortium is led by British Aerospace, Daimler Aerospace, Italy's Alenia and Casa of Spain, who plan a initial production line of 620 planes. Shares in British Aerospace rose 9p to 1005p on the news. Following the resolution earlier this year of a bitter Anglo -German row over worksharing, British industry is to get 37 percent of the production programme followed by Germany with 30 percent and the rest shared out between Italy and Spain. The first civil aviation orders at the biennial air show were announced by the American giant McDonnell Douglas which is selling six aircraft to four airline customers in a deal worth $365 million. Farnborough, which has attracted more than 1,000 exhibitors from 60 nations, is the perfect showcase for European hi-tech companies. This is the first time that the Eurofighter, France's Rafale jet and Sweden's Gripen have all been on display at the same show. Defence companies face a dogfight battling for orders but civil aviation is booming. Heseltine was upbeat, saying: "Civil aircraft traffic is set to grow by five percent per year in the medium term. That means a doubling of demand in the course of 15 years." In the Transatlantic battle, the American giant Boeing Co is pitched against Europe's Airbus Industrie group. In the vital new "superjumbo jet" market, Boeing is eager to trump Airbus by announcing plans for a new version of its B-747 jet. Airbus is developing its own 500 plus seater A3XX. The British engineering group Rolls Royce said development of its Trent 900 aero-engine gave it a head start over its U.S rivals in supplying Boeing. Rolls Royce chairman Sir Ralph Robins said the Trent was cost effective and lighter. "Our weight advantage is going to be very, very tough to erode," he told reporters. 7118 !C12 !CCAT !GCAT !GCRIM Japanese prosecutors are to launch a special task force this month to probe huge losses on unauthorised copper trading by a Sumitomo Corp trader and question company officials, sources close to the case said. The Tokyo District Public Prosecutor's Office plans to probe the case with a view to charging Yasuo Hamanaka, 48, the trader blamed by Sumitomo for the $1.8 billion dollar loss, with breach of trust, sources close to the case said. "The Tokyo prosecutor's office is going to set up a special task force within this month with up to five or six specialists," a source close to the prosecutor's office said. "As a first step, they will start questioning Sumitomo Corp officials who had connections with Hamanaka," he said. The Sumitomo officials to be questioned soon by the Tokyo prosecutor's office include Masahiro Mogari, who worked as a senior copper trader until July, and Akio Imamura, general manager of its non-ferrous metals division, they said. A copper trader who is currently assigned to its New York branch is also on the prosecutors' list, they said. Sumitomo, one of Japan's giant trading houses, said on June 13 that Hamanaka lost the money in unauthorised copper trading, mainly on the London Metal Exchange, over a 10-year period. It fired Hamanaka in June 14 and he has been in seclusion at his home without commenting on the matter. U.S. and British law enforcement authorities have already opened investigations into the case to determine if any illegal trading practices were involved in their countries. In early August, Britain's Serious Fraud Office searched the homes of two British businessmen as part of its probe. When the Tokyo prosecutors will interview Hamanaka, the man at the heart of the scandal, is unclear, the sources said. Hamanaka emerged from hiding on Sunday to reveal that for the past two months he has evaded the media and overseas authorities who wanted to question him simply by staying secluded at his own home. "I have been living in my home since leaving Sumitomo," Hamanaka told a Reuters reporter on Sunday afternoon as he walked along the aisles of a small supermarket near his home with his wife. He first came out of hiding three weeks ago when he met a Reuters reporter. Asked when he would give his side of the story of the world's biggest financial trading loss, Hamanaka replied: "I have nothing to say on that." He also declined comment on whether he expected to face legal action, either by Sumitomo or authorities, over trading losses. Meanwhile, Sumitomo reiterated that it will continue to cooperate with investigative authorities. "We have been cooperating and will fully cooperate with official probes," a Sumitomo spokesman said. But he refused to comment on Tokyo prosecutors' launch of the task force. 7119 !C12 !CCAT !GCAT !GCRIM A suit launched by a Portuguese firm against Eurocopter, accusing it of not paying commission on an alleged sanctions-busting helicopter sale to South Africa, will be heard in a French court later this month, the law firm representing the plaintiffs said on Monday. Lawyers for Beverley Securities Inc (BSI) said in a statement that the suit accusing Eurocopter of "unjust enrichment" would begin hearings at Bobigny commericial court in the Paris suburbs on September 12 (at 0800 GMT). The proceedings would be conducted in open court, contrary to Eurocopter's desire for them to take place behind closed doors, London law firm Roodyn Porter Manski said in a statement. Eurocopter is a joint venture between French state-owned aerospace group SNI Aerospatiale and Germany's Daimler-Benz Aerospace AG. Eurocopter could not be reached for comment. Aerospatiale said it had no comment. BSI is suing Eurocopter International for 10 to 15 percent of the total value of the helicopter deal, which it estimates to have been worth $3.0 billion. It says it facilitated the transaction through its contacts in the Portuguese defence force. BSI has alleged that the kitsets were delivered between 1989 and 1994 and were assembled in South Africa as "Oryx" medium-lift helicopters. The lawyers for BSI said that among the witnesses it planned to summon are Tony de Klerk, former director of Armscor for foreign procurement and clandestine operations based in Paris and General Soares Carneiro, former President of the Portuguese Supreme Military Court and, at the time, the Armed Forces Chief of Staff. South Africa's state weapons agency Armscor has refused to comment on the allegations it obtained 50 Oryx helicopters from France via Portugal during the UN arms embargo. It said last April that "the terms of the contract reflects the international practice of confidentiality with respect to arms contracts." 7120 !G15 !GCAT * (Note - contents are displayed in reverse order to that in the printed Journal) * Study: 'Potential developments in the European Market for combinations of network services and telecommunications terminal equipment' Open call for tenders (96/C 253/12) Study: 'The current and projected size of the European telecommunications terminal equipment market classified by type' Open call for tenders (96/C 253/11) Study: 'The progress in the development of a harmonized PSTN terminal equipment market' Open call for tenders (96/C 253/10) Study: 'The progress and planning of activities associated with the standardization and regulation of mobile communications (GSM/DCS) terminal equipment' Open call for tenders (96/C 253/09) Notice of initiation of an anti-dumping proceeding concerning imports of certain seamless pipes and tubes of iron or non-alloy steel originating in Russia, the Czech Republic, Romania and the Slovak Republic (96/C 253/08) Notice of initiation of an interim review of the anti-dumping measures applicable to imports of certain seamless pipes and tubes of iron or non-alloy steel originating in Hungary, Poland and the Republic of Croatia (96/C 253/07) Notice of initiation of an interim review of the anti-dumping measures applicable to imports of disodium carbonate originating in the United States of America (96/C 253/06) Notice of initiation of anti-subsidy proceedings concerning imports of farmed Atlantic salmon originating in Norway (96/C 253/05) Notice of initiation of an anti-dumping proceeding concerning imports of farmed Atlantic salmon originating in Norway (96/C 253/04) Reference numbers for the notification of the export of certain dangerous chemicals (96/C 253/03) Communication of Decisions under sundry tendering procedures in agriculture (cereals) (96/C 253/02) Ecu (1) 30 August 1996 (96/C 253/01) END OF DOCUMENT. 7121 !G15 !GCAT * (Note - contents are displayed in reverse order to that in the printed Journal) * Corrigendum to Commission Directive 96/37/EC of 17 June 1996 adapting to technical progress Council Directive 74/408/EEC relating to the interior fittings of motor vehicles (strength of seats and their anchorages) (Official Journal of the European Communities No L 186 of 27 July 1996) COMMISSION DECISION of 30 August 1996 concerning certain protection measures with regard to foot-and-mouth disease in Greece and repealing Commission Decision 96/440/EC (Text with EEA relevance) (96/526/EC) COMMISSION DECISION of 23 August 1996 on applications for import licenses for rice and broken rice submitted in the first five working days of August 1996 under the arrangements provided for in Council Regulation (EC) No 1522/96 (96/525/EC) COMMISSION REGULATION (EC) No 1723/96 of 30 August 1996 determining the world market price for unginned cotton and the rate for the aid COMMISSION REGULATION (EC) No 1722/96 of 30 August 1996 amending representative prices and additional duties for the import of certain products in the sugar sector COMMISSION REGULATION (EC) No 1721/96 of 30 August 1996 determining to what extent applications for import rights for calves not exceeding 80 kilograms lodged pursuant to Regulation (EC) No 1462/96 can be met COMMISSION REGULATION (EC) No 1720/96 of 30 August 1996 fixing the maximum buying-in price and the quantities of beef to be bought in under the 166th partial invitation to tender as a general intervention measure pursuant to Regulations (EEC) No 1627/89 and (EC) No 1124/96 COMMISSION REGULATION (EC) No 1719/96 of 30 August 1996 on the supply of milk products as food aid COMMISSION REGULATION (EC) No 1718/96 of 29 August 1996 initiating an investigation concerning the circumvention of anti-dumping measures imposed by Council Regulations (EEC) No 993/93 and (EEC) No 2887/93 on imports of certain electronic weighing scales originating respectively in Japan and Singapore, by imports of parts thereof assembled in the European Community and making the latter imports subject to registration COMMISSION REGULATION (EC) No 1717/96 of 29 August 1996 initiating an investigation concerning the circumvention of anti-dumping measures imposed by Council Regulation (EEC) No 993/93 on imports of certain electronic weighing scales originating in Japan by imports of the same product assembled in and/or transhipped through Indonesia and making the latter imports subject to registration COMMISSION REGULATION (EC) No 1716/96 of 29 August 1996 concerning the stopping of fishing for sprat by vessels flying the flag of Sweden COMMISSION REGULATION (EC) No 1715/96 of 30 August 1996 fixing the rates of the refunds applicable to certain cereal and rice-products exported in the form of goods not covered by Annex II to the Treaty COMMISSION REGULATION (EC) No 1714/96 of 30 August 1996 fixing the rates of refunds applicable to certain products from the sugar sector exported in the form of goods not covered by Annex II to the Treaty COMMISSION REGULATION (EC) No 1713/96 of 30 August 1996 fixing the rates of the refunds applicable to certain milk products exported in the form of goods not covered by Annex II to the Treaty COMMISSION REGULATION (EC) No 1712/96 of 30 August 1996 fixing the corrective amount applicable to the refund on cereals COMMISSION REGULATION (EC) No 1711/96 of 30 August 1996 establishing the standard import values for determining the entry price of certain fruit and vegetables COMMISSION REGULATION (EC) No 1710/96 of 30 August 1996 fixing the production refund for olive oil used in the manufacture of certain preserved foods COMMISSION REGULATION (EC) No 1709/96 of 30 August 1996 fixing the export refunds on cereal-based compound feedingstuffs COMMISSION REGULATION (EC) No 1708/96 of 30 August 1996 fixing the export refunds on products processed from cereals and rice COMMISSION REGULATION (EC) No 1707/96 of 30 August 1996 fixing the export refunds on syrups and certain other sugar products exported in the natural state COMMISSION REGULATION (EC) No 1706/96 of 30 August 1996 altering the export refunds on white sugar and raw sugar exported in the natural state COMMISSION REGULATION (EC) No 1705/96 of 30 August 1996 amending Regulation (EEC) No 1833/92 setting the amounts of aid for the supply of cereals products from the Community to the Azores and Madeira COMMISSION REGULATION (EC) No 1704/96 of 30 August 1996 amending Regulation (EEC) No 1832/92 setting the amounts of aid for the supply of cereals products from the Community to the Canary Islands COMMISSION REGULATION (EC) No 1703/96 of 30 August 1996 fixing the refunds applicable to cereal and rice sector products supplied as Community and national food aid COMMISSION REGULATION (EC) No 1702/96 of 30 August 1996 amending Regulation (EEC) No 391/92 setting the amounts of aid for the supply of cereals products from the Community to the French overseas departments COMMISSION REGULATION (EC) No 1701/96 of 30 August 1996 setting the amounts of aid for the supply of rice products from the Community to the Azores and Madeira COMMISSION REGULATION (EC) No 1700/96 of 30 August 1996 setting the amounts of aid for the supply of rice products from the Community to the Canary Islands COMMISSION REGULATION (EC) No 1699/96 of 30 August 1996 fixing the import duties in the rice sector COMMISSION REGULATION (EC) No 1698/96 of 30 August 1996 fixing the import duties in the cereals sector COMMISSION REGULATION (EC) No 1697/96 of 30 August 1996 fixing the export refunds on rice and broken rice END OF DOCUMENT. 7122 !GCAT !GSPO Sheffield Wednesday maintained their 100 percent record and went five points clear at the top of the English premier league on Monday by beating newly-promoted Leicester City 2-1. Wednesday, who escaped relegation on the final day of last season, have now made their best start in 65 years, winning their first four matches and scoring twice in every game. Ritchie Humphreys set the Yorkshire side on their way in the 25th minute with his third goal of the season. Collecting a loose ball on the halfway line, the 18-year-old apprentice striker cut through the heart of the Leicester defence, pulled the ball on to his left foot, and coolly lobbed goalkeeper Kasey Keller from the edge of the area. Three minutes later an equally spectacular goal brought Leicester level. Steve Claridge, who sealed his side's promotion to the premier league with a last-minute extra-time goal in a play-off at Wembley in May, surged past former England defender Des Walker and blasted the ball into the top left-hand corner of Kevin Pressman's goal from 25 metres. Andy Booth, who joined Wednesday for 2.65 million pounds ($4.1 million) from first division Huddersfield in the close season, scored their winner six minutes into the second half, latching on to a long pass from defence and slotting the ball under Keller. Wednesday, whose previous victims were Leeds, League Cup holders Aston Villa, and last season's championship runners-up Newcastle, lead the table by five points from Chelsea on seven points, with Arsenal and Villa a further point back. 7123 !GCAT !GSPO English premier league Middlesbrough are prepared to listen to offers for their Norwegian international striker Jan Fjortoft. Manager Bryan Robson said on Monday: "Fjortoft has not figured in my premier league side this season. At this stage of his career Fjortoft needs first team football." Fjortoft joined Middlesbrough for 1.3 million pounds ($2.03 million) from Swindon two years ago. 7124 !GCAT !GSPO Fifteen-year-old Martina Hingis struck a blow for the youth brigade and claimed the highest-seeded scalp of the U.S. Open so far by upending third seed Arantxa Sanchez Vicario on Monday. The 16th-seeded Swiss teen opened second-week play with a 6-1 3-6 6-4 upset of the 1994 Open champion to reach the second Grand Slam quarter-final of her fledgling career after becoming the youngest-ever Australian Open quarter-finalist in January. "This is a Grand Slam, and Arantxa Sanchez is not an easy player," said the beaming Hingis, who leaped for joy after stopping the Spaniard. Sanchez had reached the final of her last five tournaments, including the French Open, Wimbledon and the Olympics. "I just had my best match today, and I'm very happy about it," Hingis said. But world No. 1 and defending champion Steffi Graf showed that if the torch is to be passed, it will have to be taken by force. Fraulein Forehand took on 15-year-old Russian up-and-comer Anna Kournikova in the second Stadium Court match on a hot, sunny day and needed just 51 minutes to pound out a 6-2 6-1 victory over the projected star. The unusually poised Russian qualifier managed to break Graf once in each set, but the German superstar shrugged off the setbacks, breaking Kournikova three times in each, converting all three break points in the second. "I guess maybe it was a little easier than probably everybody expected," Graf said. "When you're 15, you try to go for a lot of shots, and you have nothing to lose. "I figured it would be tougher," the four-time Open champion said. "She's gutsy. Experience is missing, but she definitely has the shots." In the quarter-finals, Graf will face 24th-ranked Austrian veteran Judith Wiesner, who coasted to a 6-0 6-3 fourth-round win over Italian Rita Grande. Graf, who will be playing her 12th consecutive U.S. Open quarter-final, looks a safe bet to reach the semifinals. She holds a perfect 9-0 career mark against Wiesner. Hingis lived up to her famous namesake, Martina Navratilova, in zooming through the first set in just 19 minutes with a mere four unforced errors along the way. She and Sanchez traded early breaks in the second set, but an overrule by chair umpire Jane Harvey in the seventh game completely changed the tone of the match. At deuce for the fourth time in an exciting game, Hingis hit a forehand that the chair called long after the line judge had signalled it in. Hingis became unhinged by the call and television replays showed that the ball had, in fact, hit squarely on the baseline. The Swiss teen quickly lost the next point, giving Sanchez the game, and hurled her racket at her chair as she stormed off court for the changeover. "Sometimes it makes you really angry," Hingis said. "I'm lucky that I could come back." Still rattled, Hingis promptly lost the next four games, giving Sanchez the second set and a 2-0 third-set lead. But where most 15-year-olds would have been finished, Hingis managed to regain her composure. "I'm very disappointed with myself, because I let her get back," said Sanchez, who assisted the Swiss teen's comeback by making 22 of her 52 unforced errors in the deciding set. Hingis broke Sanchez in the fourth game to level the set at 2-2 and captured the Spaniard's serve for the sixth time in the eighth game for a 5-3 edge. Suddenly Hingis appeared to act her age, playing a terribly nervous and tentative game while serving for the match as the Barcelona battler broke at love. But Sanchez was unable to take advantage as Hingis put the Spaniard in a 15-40 hole to reach double match point. The match point was halted midway as an empty water bottle got lose and rolled toward the court, breaking the tension. But when they played the pivotal point over, Sanchez sailed a backhand slice well out and Hingis had her big victory. Graf said of Hingis and Kournakova: "It's important to have these new faces come up, especially since in the last few years, there hasn't been that much excitement around. "It's good to know the future of women's tennis is going to show up." 7125 !GCAT !GSPO Portuguese Antonio Pacheco has become the seventh foreign player on the books of Reggiana this season, the newly-promoted serie A club said on Monday. The former Benfica and Sporting Lisbon winger was with Belenenses last season. 7126 !GCAT !GSPO Goalkeeper Jose Luis Chilavert scored from a free kick to give Paraguay a 1-1 draw away to Argentina in a World Cup qualifying match on Sunday. The burly, outspoken goalkeeper also made a splendid save at the other end to deny Gabriel Batistuta a last-gasp winner for Argentina, who have won only one of their four qualifying matches. Chilavert thumped his free kick past the Argentine wall and into the goal off goalkeeper German Burgos in the 42nd minute to give underdogs Paraguay a point that few had expected them to obtain. Sixteen minutes earlier, Chilavert had watched helplessly as a perfectly executed free kick by striker Batistuta flew past him and into the top corner of the Paraguayan goal. It was Batistuta's 35th international goal, making him the top scorer in the history of the Argentine national team. The record previously belonged to Diego Maradona. Chilavert, who plays his club soccer with Argentine champions Velez Sarsfield, scored four goals in the Argentine championship which finished last month, two from penalties and two from free kicks. One of the free kicks was scored against Burgos from 60 metres in a match against River Plate. Chilavert, whose goalkeeping made him the hero when Paraguay beat Uruguay 2-0 away in their last game, had said before the match: "Burgos is mediocre. If I can I will score a goal to help my country in this important meeting." "If we get a free kick on the edge of the penalty area, I want to take it because I want to score against Argentina." When Argentine full-back Jose Chamot gave away a free kick on the edge of the penalty area, Chilavert, with no hesitation, rushed straight out of his goal and stood over the ball. The two-times world champions, whose previous results have included a 2-0 defeat by Ecuador, dominated the first half when defensive-minded Paraguay left Richard Baez as their lone striker. But the Paraguayans grew in confidence after the equaliser and Baez twice scared the home side with long-range shots in the second half. Argentina, who are third in the group from which four of the nine teams qualify, concentrated too many of their attacks through the middle of the solid Paraguayan defence. Paraguay, who have a game in hand, are fifth but have a game in hand over the top three teams. Argentina - German Burgos; Javier Zanetti (Jose Albornoz, 88th minute), Roberto Ayala, Fernando Caceres, Jose Chamot; Guillermo Barros Schelotto (Claudio Lopez, 53rd), Christian Bassedas (Sebastian Veron 53rd), Matias Almeyda, Hugo Morales; Ariel Ortega, Gabriel Batistuta. Paraguay - Jose Luis Chilavert; Celso Ayala, Silvio Suarez, Carlos Gamarra, Julio Cesar Enciso; Catalino Rivarola, Aristides Rojas (Gabriel Gonzalez 60th), Roberto Acuna (Jorge Alcaraz 87th), Harles Bourdier; Vidal Sanabria (Francisco Esteche 80th), Richard Baez. 7127 !GCAT !GSPO Aggressive, highly-opinionated and blisteringly fast on a bike? Then 500cc Grand Prix motorcycling could use you. As the world championship roared to another milestone on Sunday, clocking up the 500th race since Briton Harold Daniell won the first Grand Prix in June 1949, some feared that the sport was looking a little grey in middle age. Former world champion Kenny Roberts, the 'King' who won three 500 titles from 1978 to 1980, was one of those convinced that it was time to apply a spot of colouring. "I think they need to kick it (the sport) in the butt a little bit right now," said the American, who manages a Yamaha team with son Kenny Jr. as one of his riders. "We need to get some people who are going to kick Mick's butt," he added, figuratively of course. 'Mick', world champion Michael Doohan of Australia, won the 500th race at Imola, his seventh victory in 12 races in a season that has long looked a procession towards the quiet-spoken, greying Australian's third consecutive title. It is not the Australian's fault, but the lack of genuine rivals has made much of the season less than gripping. There were only two riders really competing in Imola: Doohan and Spaniard Alex Criville -- whose two wins in the last three races have been real highpoints -- and the limited excitement fizzled out in a downpour long before the finish. The 500th win put Doohan in good company with Briton Mike 'The Bike' Hailwood who won the 100th race, Italian Giacomo Agostini who won the 200th, Briton Barry Sheene the 300th winner and American 'Steady' Eddie Lawson the 400th victor. Those names alone are enough to bring back memories of legendary track battles and high-octane excitement from times when the world championship was more basic, more dangerous and light years from the current professional operation. Organisationally and financially, most agree that the championship is fit and well after going through the doldrums on more than one occasion in the last 47 years. There is no more talk of rival circuits tearing the championship in two directions and the superbikes have not yet materialised as a serious challenge. But excitement levels are not what they were. "When you make wine you have some years that are exceptional and some that are pretty lean," said Roberts, who identified 1991 as the last truly great year for the sport. "You'd have to say 91 was the real cream of vintages. Wayne (Rainey) and Kevin (Schwantz) and Doohan. "It's come down to one name at the moment. It's kind of a low point in 500 grand prix racing." The problems, as identified by Roberts and one or two others, is that the hard-riding older stars have made way for new riders who have yet to find their feet. The likes of American John Kocinski, well known for expressing his views in a forceful and not altogether pleasant fashion, or Australian world champion Wayne Gardner -- whose aggression on the track was legendary -- have gone. Randy Mamola, famous for clowning and roaring down the pits on one wheel and a prayer, has long retired. American former world champion Kevin Schwantz, a flamboyant and forceful spokesman for the riders, has called it a day, while Californian triple world champion Wayne Rainey is in a wheelchair, running his own Yamaha team. Roberts, at least, wants more of a show. "At times I'd like to see it more entertaining and that comes down to the people on the racetrack," he said. "I think the world champion actually guides a lot of that himself. I think when I was world champion I was a little more forceful and a little more controversial. "I think Mick's probably too nice, too quiet. I think if Kevin were racing with him it would be different. "Wayne Gardner was what we need." Sito Pons of Spain, a former 250cc world champion, sympathised with Doohan, however. "The championship has certainly lost some of its spectacularity," he wrote in a team newsletter. "It's not that the old days were better but that the racing was different. Some of the powerful teams are in an investment phase with their riders mostly beginners in the category." The Spaniard added that recent technical changes, such as increased weights and smoother engines, had also reduced the fierceness of the bikes, making them easier to ride. That had made races less spectacular but should ensure closer racing longer term when the newcomers learnt the ropes and began to push their machines to the limits. Rainey agreed. "I think next year will be a lot better," he said. "Everybody's still adjusting this year." Roberts said the top class could be swiftly improved by encouraging talented riders to move up from the 250s and 125s. "The thing about this sport is that it can turn around so quickly," he said. "It doesn't take much." 7128 !GCAT !GSPO Striker Faustino Asprilla scored a hat-trick, including a superb individual goal, as Colombia hammered Chile 4-1 in a World Cup qualifying match on Sunday. Asprilla scored with two first-half headers but saved the best for the second half when he dribbled through a bemused Chilean defence and scored with a powerful left-foot shot. The result kept Colombia, who finished with ten men after defender Alexis Mendoza was sent off, top of the South American World Cup qualifying competition with ten points out of a possible twelve. They are one point ahead of Ecuador but five clear of third-placed Argentina in a contest which sees the top four of the nine teams going into the 1998 tournament in France. Colombia coach Hernan Dario Gomez was forced to make rare changes to his side due to the suspension of midfielders Freddy Rincon and Leonal Alvarez. But it was veteran Carlos Valderrama who put Colombia on the road to victory with a perfect cross onto the head of Asprilla in the third minute. Asprilla, who plays for English club Newcastle, was on hand again to head in Jose Santa's cross in the 31st minute. Two minutes from halftime Colombia scored with another header, this time through defender Jorge Bermudez, who rose to connect with a cross from Harold Lozano. Asprilla completed his scoring in the 47th minute with his fifth goal of the qualifying competition. Chile striker Ivan Zamorano, who had a chance to equalise in the 13th minute but headed wide, scored his country's consolation goal in the 55th minute from a penalty after suffering the foul which resulted in Mendoza's dismissal. "Colombia were very dynamic with plenty of variety in attack," said a satisfied Gomez. Teams: Colombia: Farid Mondragon; Jose Fernando Santa, Hugo Galeano, Jorge Bermudez, Alexis Mendoza; Harold Lozano, Luis Quinones (Osman Lopez), Mauricio Serna, Carlos Valderrama; Faustino Asprilla (John Mario Ramirez), Victor Hugo Aristizbal (Anthony de Avila). Chile: Nelson Tapia; Jose Luis Sierra (Francisco Rojas), Juan Carlos Gonzalez, Javier Margas, Christian Mora; Luis Musrri, Fabian Estay, Christian Romero, Marcelo Vega; Ivan Zamorano, Marcelo Salas. 7129 !GCAT !GSPO Summary of an English premier league soccer match on Monday: Sheffield Wednesday 2 (Ritchie Humphries 25th min, Andy Booth 51st) Leicester 1 (Steve Claridge 28th). Halftime 1-1. Attendance 17,657 7130 !GCAT !GSPO Result of an English premier league soccer match on Monday: Sheffield Wednesday 2 Leicester 1 Standings (tabulated under played, won, drawn, lost, goals for, against, points): Sheffield Wednesday 4 4 0 0 8 3 12 Chelsea 3 2 1 0 3 0 7 Arsenal 3 2 0 1 4 2 6 Aston Villa 3 2 0 1 4 2 6 Manchester United 3 1 2 0 7 4 5 Sunderland 3 1 2 0 4 1 5 Liverpool 3 1 2 0 5 3 5 Everton 3 1 2 0 4 2 5 Tottenham 3 1 2 0 3 1 5 Nottingham Forest 3 1 1 1 5 5 4 Leeds 3 1 1 1 4 5 4 West Ham 3 1 1 1 3 4 4 Leicester 4 1 1 2 3 5 4 Newcastle 3 1 0 2 3 4 3 Middlesbrough 3 0 2 1 4 5 2 Derby 3 0 2 1 4 6 2 Southampton 3 0 1 2 2 4 1 Blackburn 3 0 1 2 2 5 1 Coventry 3 0 1 2 1 6 1 Wimbledon 3 0 0 3 0 6 0 7131 !GCAT !GSPO Kent moved to the top of the English county championship on Monday after cruising to a seven-wicket victory over Nottinghamshire at Tunbridge Wells. They edged one point ahead of previous leaders Derbyshire, who beat Worcestershire on Saturday, nine points ahead of Leicestershire, and 10 ahead of Surrey. Kent's eighth championship win of the season came courtesy of a century stand between Trevor Ward (54 not out) and Carl Hooper, whose 86 included 13 fours and a six. Nigel Llong joined in with 34 not out, including a six which shattered a nearby window. Nottinghamshire had set the home side a target of 213 by advancing from an overnight 167 for six to 242 all out, thanks mainly to lower order resistance from Chris Tolley (67) and Kevin Evans (54). Kent's Martin McCague finished with four for 80 and a match analysis of eight for 135, while Mark Ealham, playing his first match since recovering from a rib injury, took five for 52. Yorkshire needed just an hour to mop up Essex's last five wickets and clinch a 98-run win at Headingley which revived their slender title hopes. Left-arm spinner Richard Stemp took four for 19 in 10 overs as Essex, who had won their previous five matches, slumped from 100 for five to 149 all out. John Crawley, who hit a debut test century against Pakistan at The Oval eight days ago, compiled an unbeaten 112 as Lancashire beat Sussex by five wickets at Hove. He shared a third-wicket stand of 150 in 29 overs with Neil Fairbrother as Lancashire claimed only their second championship win of the season. 7132 !GCAT !GSPO English county championship cricket table standings on Monday (tabulate under - played, won, lost, drawn, batting points, bowling points, total): Kent 15 8 1 6 43 44 233 Derbyshire 14 8 2 4 45 47 232 Leicestershire 14 7 1 6 45 49 224 Surrey 14 7 1 6 41 52 223 Essex 14 7 3 4 49 47 220 Yorkshire 15 7 5 3 43 50 214 Warwickshire 14 6 5 3 32 45 182 Middlesex 14 6 5 3 26 49 180 Glamorgan 14 5 5 4 38 36 166 Sussex 14 5 7 2 31 47 164 Somerset 14 4 6 4 27 53 156 Worcestershire 14 3 4 7 34 52 155 Gloucestershire 15 4 6 5 19 51 149 Hampshire 14 3 6 5 29 50 142 Lancashire 14 2 4 8 39 41 136 Northamptonshire 14 2 7 5 30 47 124 Nottinghamshire 14 1 7 6 35 44 113 Durham 15 0 10 5 22 54 91 7133 !GCAT !GSPO Results of four-day English county championship matches on Monday: At Bristol: Gloucestershire beat Northamptonshire by 15 runs. Gloucestershire 183 and 249. Northamptonshire 190 and 227. Gloucester 20 points Northants 4. At Headingley: Yorkshire beat Essex by 98 runs. Yorkshire 290 and 329. Essex 372 and 149 (R.Stemp 5-38). Yorkshire 22 points Essex 8. At Hove: Lancashire beat Sussex by five wickets. Sussex 363 and 144. Lancashire 218 and 290-5 (J.Crawley 112 not out, N.Fairbrother 79). Lancashire 21 points Sussex 8. At Tunbridge Wells: Kent beat Nottinghamshire by seven wickets. Nottinghamshire 214 and 242 (C.Tolley 67, K.Evans 54; M.Ealham 5-52). Kent 244 and 215-3 (C.Hooper 86, T.Ward 54 not out). Kent 21 points Nottinghamshire 5. 7134 !GCAT !GSPO Damon Hill has been promised the full backing of Williams as he fights out the destination of the world drivers' championship with team mate Jacques Villeneuve. Williams have vowed not to undermine Hill's hopes of winning the title, even though he has been dropped by team boss Frank Williams for next season. "As far as the team are concerned Damon will be given 100 percent support in the remaining races, as will Jacques," said a Williams spokeswoman on Monday. "They will be given the same equipment and the same support as has been the case throughout the season. The team will make sure they both have an equal chance of winning the championship." Hill's axing had prompted speculation that Williams might concentrate their efforts on Canadian Villeneuve, 13 points behind the Briton with three races left, so that they have a world champion in one of their cars next year. Hill would clinch the title with victory in Sunday's Italian Grand Prix at Monza if Villeneuve fails to finish in the top three. Jordan have emerged as candidates for Hill's services next season. The team confirmed they had already held talks with the driver and would do so again in the near future. Current drivers Martin Brundle and Rubens Barrichello are both on one-year contracts, although Jordan have also been linked with Michael Schumacher's younger brother, Ralf. Jordan have secured a major sponsorship deal which should help them meet Hill's wage demands, which are likely to be less than the estimated six million pounds ($9.38 million) paid by Williams. "There are seats available for 1997," a Jordan spokeswoman said. "We are and will continue to talk to every driver who is available and who we feel meets our criteria." McLaren and Stewart Grand Prix, the new team headed by former world champion Jackie Stewart, are other possibilities. Williams are expected to sign Heinz-Harald Frentzen, the German they have courted ever since Ayrton Senna's death at the San Marino Grand Prix in 1994. Frentzen's contract with Sauber ends this season. Villeneuve plans to take advantage of Hill's uncertainty over his future. "I know that I am in the team next season," said Villeneuve. "It is one less thing for me to think about than Damon. "The battle is on and all I can do is be aggressive. Either we get the points or we go off. I have to be in front of him, then we will see what happens. "I respect Damon, he's very quick, especially when he's in front, and this year he has been mostly at the front. But he seems to make more mistakes when he's not in the lead and it's my plan to keep him behind me." 7135 !GCAT !GSPO England striker Teddy Sheringham will be out for up to three weeks with a thigh strain, adding to premier league Tottenham Hotspur's early-season injury crisis. The 30-year-old pulled a muscle during an England training session last week, leaving the Londoners short of goalscorers. Sheringham's striking partner Chris Armstrong is sidelined with a damaged ankle and manager Gerry Francis may be forced to give 18-year-old Rory Allen his first team debut against Wimbledon on Wednesday night. "He's an excellent prospect but still probably a year away from first team level," Francis admitted on Monday. Midfielder Darren Anderton, who missed England's 3-0 win in Moldova on Sunday with a groin strain, is doubtful to start, as is reserve England goalkeeper Ian Walker, who damaged his back while warming up with the World Cup squad. Long-serving captain Gary Mabbutt broke his leg on the opening day of the season and is out for at least four months. "I don't know what we've done to deserve this but I am going to be without my two main strikers and, probably, my most gifted midfielder (Anderton) as well," an exasperated Francis said. The only good news for Spurs was the arrival of new 1.65-million-pound ($2.58-million) signing Allan Nielsen, who scored for Denmark in their 2-0 World Cup win in Slovenia. The 25-year-old midfielder flew into London on Monday and will probably make his debut on Wednesday. 7136 !GCAT !GSPO Britain's new football season has provided the latest emerging market -- soccer club shares, a trend spotted by Nomura chief equity strategist Nick Knight. "One for aficionados only initially, our thesis that the combination of fundamentals plus reasonable valuations plus rising market capitalisation would broaden appeal to institutional investors with no particular interest in the game itself seems to be coming true," Knight said in a research note. Knight, a West Ham supporter, notes that, as with all emerging markets, liquidity in the shares is a problem, but he says that in the first two weeks of the English league season his Football Clubs Index has risen 2.2 percent, compared with a 0.1 percent fall in the FTSE-100 index of top British shares. "This sort of absolute performance is not to be sneezed at, and given the strong support to the sector -- in particular the BSkyB deal and some promising attendance figures -- it seems a highly suitable vehicle to ride out the potential downside in the broader market," Knight said. News Corp's BSkyB has signed a 670-million-stg deal to televise England's Premier League for the next five years. Sadly for Knight, his beloved West Ham United is standing 12th out of the 20 teams in the Premier League. -- David Chance London newsroom 44 171 542 5887 7137 !GCAT !GSPO English and Scottish league soccer fixtures for period September 6-9: Friday, Sept 6: English division one - Wolverhampton v Charlton Saturday, Sept 7: English premier - Aston Villa v Arsenal, Leeds v Manchester United, Liverpool v Southampton, Middlesbrough v Coventry, Nottingham Forest v Leicester, Sheffield Wednesday v Chelsea, Tottenham v Newcastle, Wimbledon v Everton. Division one - Bradford v Norwich, Grimsby v Swindon, Ipswich v Huddersfield, Manchester City v Barnsley, Oldham v Sheffield United, Portsmouth v Port Vale, Queen's Park Rangers v West Bromwich, Southend v Bolton, Stoke v Crystal Palace, Tranmere v Birmingham,. Division two - Blackpool v Walsall, Bournemouth v Crewe, Bristol City v Preston, Bury v Rotherham, Chesterfield v Brentford, Gillingham v Burnley, Millwall v Bristol Rovers, Plymouth v Notts County, Watford v Stockport, Wrexham v Peterborough, Wycombe v Luton, York v Shrewsbury. Division three - Barnet v Northampton, Brighton v Scarborough, Cambridge v Torquay, Cardiff v Exeter, Carlisle v Swansea, Chester v Lincoln, Doncaster v Mansfield, Fulham v Colchester, Hereford v Hartlepool, Hull v Rochdale, Leyton Orient v Darlington, Wigan v Scunthorpe. Scottish premier - Celtic v Hibernian, Hearts v Dundee United, Kilmarnock v Dunfermline, Motherwell v Rangers, Raith v Aberdeen. Scottish division one - Clydebank v St Mirren, Dundee v Airdrieonians, Morton v East Fife, St Johnstone v Partick, Stirling v Falkirk. Scottish division two - Berwick v Queen of the South, Clyde v Dumbarton, Livingston v brechin, Stenhousemuir v Ayr, Stranraer v Hamilton. Scottish division three - Albion v Caledonian Thistle, Cowdenbeath v Queen's Park, East Stirling v Forfar, Montrose v Arbroath, Ross County v Alloa. Sunday, Sept 8: English premier - Sunderland v West Ham. Division one - Reading v Oxford. Monday, Sept 9: English premier - Blackburn v Derby. 7138 !GCAT !GSPO Paraguay goalkeeper Jose Luis Chilavert scored from a free kick, Faustino Asprilla inspired Colombia with a hat-trick and Alan Shearer, soccer's costliest player, made a winning start as England captain. The exploits of this trio marked a weekend of vivid World Cup action as European teams began in earnest a journey already started by those in South America, with France in 1998 as the ultimate destination. Qualifying for the finals of the game's most prestigious tournament was being contested by South American countries even before a ball had been kicked in Euro 96, and Colombia are setting a lively pace. Colombia stayed top of the nine-team South American group, from which the top four qualify, after Asprilla's hat-trick enabled them to trounce Chile 4-1 in the steamy Caribbean port of Barranquilla. Striker Asprilla, who plays for English premier league Newcastle, scored with two first-half headers but kept his best effort for early in the second half when he pierced a demoralised defence and scored with a powerful left-foot shot. Equally stunning was Chilavert's free kick to earn unfancied Paraguay a 1-1 draw against Argentina in Buenos Aires where his 25-metre shot beat the defensive wall and went into the net off rival 'keeper German Burgos. Chilavert also pulled off a splendid save to deny Gabriel Batistuta a last-gasp winner for Argentina, who have won only one of their four qualifying matches. England, seeking to build on the improvement they showed as hosts of the European championship finals, launched their World Cup campaign with a 3-0 win over Moldova in Chisinau. Shearer, bought by Newcastle from Blackburn for 15 million pounds sterling ($23.36 million) just before the recent start of the English season, sealed victory with the third goal after strikes from Nick Barmby and Paul Gascoigne. New skipper Shearer made it a double celebration with new coach Glenn Hoddle, who started his reign as England coach in succession to Terry Venables on a winning note. Hoddle was among a number of new men in charge of European teams, though not all enjoyed such an encouraging start as the England boss. Switzerland, now guided by Rolf Fringer, lost 1-0 in Azerbaijan while Turkey, with Mustafa Denizli having taken over from Fatih Terim, went down 2-1 to Belgium in Brussels in a game marred by crowd trouble. Turkish fans, upset by their team's 2-0 first-half deficit, tore up plastic seats and threw them over the fence. Riot police took around 10 minutes to restore order. There were 50 arrests, mostly outside the stadium early in the second half. It was on the same site in the Heysel stadium riot that 39 people died before the 1985 European Cup final between Liverpool and Juventus. The stadium has since been razed, rebuilt and rebaptised the King Baudouin stadium after the country's fifth monarch. Artur Jorge, who has returned to coach his native Portugal after an unhappy stint with Switzerland, saw his new charges draw 0-0 in Armenia. The new team chief with former European champions Denmark, Swedish-born Bo Johannsen, got off to a victorious start when Allan Nielsen and Soeren Andersen scored in the last 12 minutes to overcome Slovenia 2-0 in Ljubljana. Spain, beaten quarter-finalists in Euro 96, launch their bid for a berth in the France finals when they travel to play the Faroe Islands on Wednesday. The next round of qualifying matches is at the beginning of October when European champions Germany make their entrance with a trip to Armenia. 7139 !GCAT !GSPO Leading world golf rankings issued on Monday (U.S. unless stated): 1. Greg Norman (Australia) 10.33 points average 2. Ernie Els (South Africa) 8.93 3. Tom Lehman 8.79 4. Nick Faldo (Britain) 8.73 5. Masashi Ozaki (Japan) 8.61 6. Colin Montgomerie (Britain) 8.56 7. Fred Couples 8.26 8. Corey Pavin 8.16 9. Phil Mickelson 7.53 10. Mark O'Meara 7.06 11. Nick Price (Zimbabwe) 6.98 12. Bernhard Langer (Germany) 6.70 13. Steve Elkington (Australia) 6.57 14. Davis Love III 6.54 15. Loren Roberts 5.94 16. Mark McCumber 5.90 17. Vijay Singh (Fiji) 5.49 18. Scott Hoch 5.26 19. Steve Stricker 5.25 20. David Duval 5.15 7140 !GCAT !GSPO Steve Yzerman's goal at 16:10 of the third period broke a 2-2 tie and lifted Canada to a a 3-2 win over underdog Slovakia in the World Cup of ice hockey on Sunday. Just prior to the goal by the Detroit Red Wings star, Canadian goalkeeper Curtis Joseph of the Edmonton Oilers made three brillant saves, stopping Richard Zednik of the Washington Capitals from in close twice and Zigmund Palffy of the New York Islanders on another. The win left Canada with a 2-1 record in the opening round and Slovakia facing elimination with a 0-2 record. The United States (1-0) plays Russia (1-1) Monday in New York. Slovakia, whose lineup included only nine players with National Hockey League experience, had taken a 2-1 lead at 18:22 of the second period when Lubomir Kolnik took a pass out from Jan Varholik and beat Joseph from close in. Slovakia tried to play defensively early in the third period to protect the lead, but it backfired when the Calgary Flames' Theoren Fleury put his own rebound behind Roman Mega, the Slovak goalkeeper, at 2:02 to tie the game at 2-2. After a scoreless first period in which Canada outshot Slovakia 12-7, Vincent Damphousse of the Montreal Canadiens put Canada ahead at 5:49 of the second period. He tipped in a 50-foot point shot by Paul Coffey of the Red Wings on which Mega had no chance. At 8:06 of the middle stanza Coffey was penalised for hooking, and during the ensuing power play Slovakia tied it at 1-1 when the Washington Capitals' Peter Bondra drilled a 30-footer past Joseph on his short side. Canada outshot Slovakia 37-23. "Joseph saved us, and Steve Yzerman got the winner," said Canadian coach Glen Sather. "Slovakia played a great game. They were very tough and we were in a real struggle." Bondra, a 50-goal scorer with Washington, observed: "Canada had everything they could handle. We lost to Russia 3-1 and to Canada 3-2. The European countries are getting better all the time and we are getting closer to winning against the big countries." Earlier in the day, Sweden captured the European pool championship by scoring the final five goals and defeating Finland 5-2 at Stockholm. The Swedes completed pool play at 3-0 and earned a bye in next weekend's single-elimination semifinals in North America. Finland finished 2-1 in pool play and will face the third-place finisher from the North American pool Friday at Ottawa. Germany (1-2) will play the second-place team from the North American pool Thursday at Montreal. 7141 !GCAT !GSPO Top 10 IndyCar points leaders after the Vancouver grand prix on Sunday and with one race left in the series in Laguna Seca, California, on September 8: 1. Jimmy Vasser (U.S.) 142 points 2. Michael Andretti (U.S.) 128 3. Al Unser Jr (U.S.) 125 4. Alex Zanardi (Italy) 110 5. Christian Fittipaldi (Brazil) 107 6. Gil de Ferran (Brazil) 104 7. Bobby Rahal (U.S.) 96 8. Andre Ribeiro (Brazil) 76 9. Greg Moore (Canada) 76 10. Bryan Herta (U.S.) 70 7142 !GCAT !GSPO Result of Yugoslav league soccer match played on Monday: Division B Radnicki (N) 1 Spartak 0 7143 !GCAT !GSPO Romanian soccer trainer Ion Oblemenco died from a heart attack during a league match involving his Moroccan team Hassair Agadir at the weekend, a Romanian soccer official said on Monday. "Oblemenco died five minutes from time and despite doctors' efforts, his life could not be saved," Universitatea Craiova club vice-president Marcel Popescu told Reuters. Oblemenco, 51, was named this summer as Hassair Agadir's trainer after being general manager of Romanian second division club Electroputere Craiova. He played for Rapid Bucharest and Universitatea Craiova in the 1960s and 1970s, scoring 170 goals in the domestic championship. 7144 !GCAT !GSPO Results of the Czech Republic's first division soccer matches played over the weekend: Viktoria Zizkov 1 SK Hradec Kralove 1 AC Sparta Praha 3 FC Bohemians 4 Boby Brno 4 Petra Drnovice 1 Sigma Olomouc 1 Kaucuk Opava 1 Slovan Liberec 1 Viktoria Plzen 0 FK Jablonec 0 SK Ceske Budejovice 0 FK Teplice 1 SK Slavia Praha 0 Standings (tabulate under games played, won, drawn, lost, goals for, against, points): Boby Brno 4 4 0 0 9 3 12 FK Jablonec 4 2 1 1 5 2 7 Slovan Liberec 4 2 1 1 6 4 7 FK Teplice 4 2 1 1 4 4 7 Banik Ostrava 3 2 0 1 7 3 6 Kaucuk Opava 4 1 3 0 3 2 6 Sigma Olomouc 4 1 2 1 7 4 5 SK Slavia Praha 4 1 2 1 6 4 5 SK Ceske Budejovice 4 1 2 1 3 5 5 Petra Drnovice 4 1 1 2 8 9 4 FC Bohemians 4 1 1 2 5 7 4 FC Karvina 3 1 1 1 3 5 4 Viktoria Plzen 4 0 3 1 3 4 3 AC Sparta Praha 4 0 2 2 7 9 2 Viktoria Zizkov 4 0 2 2 4 9 2 SK Hradec Kralove 4 0 2 2 2 8 2 7145 !GCAT !GSPO Local authorities in the town of Craiova have declared Jiul Petrosani soccer club president Miron Cozma persona non grata in their city, the daily Adevarul said on Monday. "Cozma's presence in Craiova... will be a danger for local order", said Adevarul, quoting an official statement from Craiova, 230 kms west of Bucharest. Cozma is Romania's miners' leader and has a history of violent behaviour. The Romanian Soccer Federation last week banned and fined Cozma for headbutting a Dinamo Bucharest player during a half-time fracas at the Petrosani stadium. Jiul Petrosani are due to play a first division league match against Universitatea next Saturday in Craiova. Under Romanian law, towns can ban individuals they consider to be a threat to public order. 7146 !GCAT !GSPO A Mexican judge has ordered the arrest of former world champion boxer Julio Cesar Chavez on tax fraud charges, the Finance Ministry said on Monday. Mexican Chavez and his business partners in his home state of Sinaloa failed to pay some 10.58 million pesos ($1.39 million) in taxes to the government, according to the ministry. Tax officials have been auditing Chavez's tax records for more than a year. He has denied any wrongdoing and said his former business partners, family and friends have betrayed him in order to get at his money. Chavez lost his WBC super-lightweight title to American Oscar De La Hoya in Las Vegas on June 7. He was stopped in the fourth round. 7147 !GCAT !GSPO Goalkeeper Jose Luis Chilavert stunned Argentina when he scored from a free kick to earn unfancied Paraguay a 1-1 draw in Buenos Aires in a World Cup qualifying match on Sunday. Striker Faustino Asprilla scored a hat-trick, including a brilliant individual goal, as Colombia hammered Chile 4-1 to stay top of the single South American qualifying group while Ecuador are second after beating Venezuela. Chilavert, who as far as most South Americans are concerned is the world's best goalkeeper, thumped a 25-metre shot past the Argentine wall and into the net off rival keeper German Burgos just before halftime. Earlier, Chilavert had been helpless as Gabriel Batistuta's exquisite free kick flew past him and into the net to put the two-times world champions ahead. It was Batistuta's 35th international goal, making him the top scorer in the history of the Argentine national team. In the dying minutes, Chilavert, who plays his club soccer for Argentine champions Velez Sarsfield, made a fine save to deny Batistuta a last-gasp winner. Chilavert scored four goals in the Argentine championship which finished last month, two from penalties and two from free kicks when Burgos was one of the victims. "Burgos is mediocre," Chilavert said before the match. "If we get a free kick on the edge of the penalty area, I want to take it because I want to score against Argentina." Asprilla, who plays for English premier league side Newcastle, scored with two first-half headers in the steamy Caribbean port of Barranquilla. But he saved the best for early in the second half, when he ran through a demoralised defence and scored with a powerful left foot shot. Defender Jorge Bermudez scored Colombia's other goal, also from a first-half header, while Ivan Zamorano converted a penalty to give Chile a consolation. Colombian defender Alexis Mendoza was sent off for the challenge on Zamorano which led to the penalty. Colombia lead the group, from which the top four teams qualify for the 1998 tournament, with ten points out of a possible twelve. Each team plays 16 matches. Francisco Maturana, the man who led Colombia to the last two World Cups, is now in charge of Ecuador, whose 1-0 home win over minnows Venezuela kept them one point. Midfielder Alex Aguinaga scored the only goal for Ecuador in the fourth minute but the 45,000 crowd in Quito jeered them off the field, having expected a bigger tally against opponents who lost their last game 6-1 to Bolivia. Ecuador, who have never taken part in the finals, and Colombia have both played three of their games so far at home. Argentina are third with five points, followed by Paraguay, Bolivia and Chile with four each. However, Paraguay are in a healthier position, having played all three of their games so far away and with a game in hand over Argentina. Bolivia missed a chance to improve their position when they were held to a 0-0 draw in La Paz, where they had won their previous seven World Cup qualifying matches, by Peru. Bolivia twice hit the woodwork. Peru, who like Chile are hoping to qualify for the first time since 1982, have drawn their last three games but desperately need a win. For the second match in a row, their finishing let them down as they wasted several good chances on the break. South America's other country, Brazil, are exempt from the marathon, qualifying automatically as holders. 020221 GMT sep 96 7148 !GCAT !GSPO Goalkeeper Jose Luis Chilavert stunned Argentina when he scored from a free kick to earn unfancied Paraguay a 1-1 draw in Buenos Aires in a World Cup qualifying match on Sunday. Striker Faustino Asprilla scored a hat-trick, including a brilliant individual goal, as Colombia hammered Chile 4-1 to stay top of the single South American qualifying group while Ecuador are second after beating Venezuela. Chilavert, who as far as most South Americans are concerned is the world's best goalkeeper, thumped a 25-metre shot past the Argentine wall and into the net off rival keeper German Burgos just before halftime. Earlier, Chilavert had been helpless as Gabriel Batistuta's exquisite free kick flew past him and into the net to put the two-times world champions ahead. It was Batistuta's 35th international goal, making him the top scorer in the history of the Argentine national team. In the dying minutes, Chilavert, who plays his club soccer for Argentine champions Velez Sarsfield, made a fine save to deny Batistuta a last-gasp winner. Chilavert scored four goals in the Argentine championship which finished last month, two from penalties and two from free kicks when Burgos was one of the victims. "Burgos is mediocre," Chilavert said before the match. "If we get a free kick on the edge of the penalty area, I want to take it because I want to score against Argentina." Asprilla, who plays for English premier league side Newcastle, scored with two first-half headers in the steamy Caribbean port of Barranquilla. But he saved the best for early in the second half, when he ran through a demoralised defence and scored with a powerful left foot shot. Defender Jorge Bermudez scored Colombia's other goal, also from a first-half header, while Ivan Zamorano converted a penalty to give Chile a consolation. Colombian defender Alexis Mendoza was sent off for the challenge on Zamorano which led to the penalty. Colombia lead the group, from which the top four teams qualify for the 1998 tournament, with ten points out of a possible twelve. Each team plays 16 matches. Francisco Maturana, the man who led Colombia to the last two World Cups, is now in charge of Ecuador, whose 1-0 home win over minnows Venezuela kept them one point. Midfielder Alex Aguinaga scored the only goal for Ecuador in the fourth minute but the 45,000 crowd in Quito jeered them off the field, having expected a bigger tally against opponents who lost their last game 6-1 to Bolivia. Ecuador, who have never taken part in the finals, and Colombia have both played three of their games so far at home. Argentina are third with five points, followed by Paraguay, Bolivia and Chile with four each. However, Paraguay are in a healthier position, having played all three of their games so far away and with a game in hand over Argentina. Bolivia missed a chance to improve their position when they were held to a 0-0 draw in La Paz, where they had won their previous seven World Cup qualifying matches, by Peru. Bolivia twice hit the woodwork. Peru, who like Chile are hoping to qualify for the first time since 1982, have drawn their last three games but desperately need a win. For the second match in a row, their finishing let them down as they wasted several good chances on the break. South America's other country, Brazil, are exempt from the marathon, qualifying automatically as holders. 7149 !GCAT !GSPO Thailand and Indonesia cruised to comfortable wins in their 1996 Tiger Cup debuts, with both teams boasting talented line-ups which should see them through to the semifinals. But Vietnam, runners-up in the Southeast Asian Games last year, were rattled by their Mekong rivals Cambodia and had to fight hard for a 3-1 win. Thailand made easy work of the Philippines with a four-goal burst in the first half. Thithaya Santawong scored twice and Kiatisuk Senamuang and Natipong Sri-Tongin bagged a goal apiece to put the result beyond doubt by halftime. Yutthana Polsak added the only goal of the second half to complete a 5-0 win. Indonesia totally dominated their match against Laos and, like Thailand, took a four-goal lead before halftime. Laos pulled one back after the break before Indonesian captain Savatdy Saysana restored his side's four-goal lead 15 minutes from time to give Indonesia a 5-1 victory. Vietnam, led by German coach Karl-Heinz Weigang, started their match against Cambodia comfortably enough with goals from Tran Cong Minh in the 21st minute and Le Huyng Duc nine minutes later. Nuth Sony's scored for Cambodia in the 67th minute and the home side threatened to equalise before Vietnam scored their third goal 10 minutes from time. 7150 !GCAT !GSPO Results on the second day of the Tiger Cup soccer competition on Monday: Group A Cambodia 1 Vietnam 3 (halftime 0-2) Scorers: Cambodia - Sony (67th) Vietnam - Tran (21st), Duc (30th), Duu (80th) Attendance: 1,500 Laos 1 Indonesia 5 (0-4) Scorers: Laos - Sandria (65th) Indonesia - Fachri (5th), Irianto (15th), Kurniawan (17th), Darwis (34th), Saysana (75th) Attendance: 1,500 Group B Thailand 5 Philippines 0 (4-0) Scorers: Thithaya (10th and 38th), Kiatisuk (15th), Natipong (41st) Yutthana (60th) Attendance: 2,000 Standings (tabulate under - played, won, drawn, lost, points: Group A Indonesia 1 1 0 0 5 1 3 Vietnam 1 1 0 0 3 1 3 Cambodia 1 0 0 1 1 3 0 Laos 1 0 0 1 1 5 0 Myanmar 0 0 0 0 0 0 0 Group B Thailand 1 1 0 0 5 0 3 Malaysia 1 0 1 0 1 1 1 Singapore 1 0 1 0 1 1 1 Philippines 1 0 0 1 0 5 0 Brunei 0 0 0 0 0 0 0 7151 !GCAT !GSPO Results of Moroccan first division soccer matches played at the weekend: Oujda 2 Raja Casablanca 2 Tetouan 0 Settat 0 Wydad Casablanca 1 Wydad Fes 1 Mohammedia 0 Jeunesse Massira 2 Marrakesh 1 Sporting Sale 0 Royal Armed Forces 2 Khouribga 1 Meknes 1 El Jadida 0 Hassania Agadir 1 Sidi Kacem 1 Standings (tabulate under: played,won,drawn,lost,goals for,against,points.) Meknes 2 2 0 0 2 0 6 Raja Casablanca 2 1 1 0 6 2 4 Widad Casablanca 2 1 1 0 3 1 4 Widad Fes 2 1 1 0 4 2 4 Royal Armed Forces 2 1 1 0 2 1 4 Settat 2 1 1 0 1 0 4 Khouribga 2 1 0 1 4 2 3 El Jadida 2 1 0 1 1 1 3 Marrakesh 2 1 0 1 1 1 3 Jeunesse Massira 2 1 0 1 2 2 3 Sidi Kacem 2 0 2 0 1 1 2 Hassania Agadir 2 0 1 1 1 2 1 Oujda 2 0 1 1 3 5 1 Tetouan 2 0 1 1 0 4 1 Sporting Sale 2 0 0 2 0 2 0 Mohammedia 2 0 0 2 0 5 0 7152 !GCAT !GSPO Results of Tunisian first division soccer matches played on Sunday: Esperance ST 3 C O Transport 1 O Kef 0 ES Sahel 3 Stade Tunisien 2 ES Zarzis 0 JS Kairouan 3 OC Kerkenah 1 CA Bizertin 0 Club Africain 1 Stade Soussien 1 O Beja 4 CS Sfaxien 0 AS Marsa 0 7153 !GCAT !GSPO Tennis heavyweights Andre Agassi and Thomas Muster are ready to rock the U.S. Open with a quarter-final clash between two titanic hitters. "It's going to be big tennis," the sixth-seeded Agassi said of his marquee showdown against the third-seeded Austrian. "Big tennis is when you get two guys trying to establish their will out there on the court," Agassi said. "We both are going to be beating the ball pretty good from the baseline. You'll hear explosions off the racket four, five, six times a point. That's big tennis." Neither player needed to raise the decibel level of his game on Monday. Muster, in fact, prevailed over 13th-seeded Swede Thomas Enqvist 7-6 6-2 4-6 6-1 despite being weakened by the effects of an upset stomach. "The more pain I felt, the worse my opponent played," Muster told a reporter after receiving treatment. There were no such concerns for Agassi after his 4-6 6-2 6-3 6-4 Stadium Court win over countryman David Wheaton. Regardless of Muster's health, Agassi is expecting the gritty left-hander to give his usual all-out effort. "I think he punches the clock every time he steps on the court," Agassi said of the 1995 French Open champion. "Every time he gets out there, he busts his ass to win. I don't expect him to do anything less." Other story lines heightened the rivalry between the two players who split their eight previous encounters. Muster was one of the most vocal critics of the Open's decision to elevate Agassi two spots in the seedings from his ATP ranking and drop the Austrian one spot. Earlier in the year Agassi questioned Muster's legitimacy as the ranking number one since he had won only on clay. But Agassi said he did not see the upcoming confrontation between the two former Grand Slam champions in personal terms. "I think if anyone makes this more than a tennis match, it's their own issue," said Agassi, winner of the 1994 Open as well as the 1995 Australian Open and 1992 Wimbledon. "Come on, we're in the quarter-finals of the U.S. Open. We both have won big events before. We both want to do it again. "That's what we're both going out there and trying to do. To make it anything more than that is a waste of time." 7154 !GCAT !GSPO Andre Agassi and Thomas Muster, on opposite sides of the U.S. Open seeding controversy, will get to settle their differences on the tennis court after each scored four-set, fourth round victories on Monday. The sixth-seeded Agassi, who felt he deserved his promotion from his ranking of eight, played just well enough to get past fellow American David Wheaton. Agassi rallied from a set down to score a 4-6 6-2 6-3 6-4 victory that set up a quarter-final clash with second-ranked Austrian clay court king Muster. "You've got to prove youself day after day. It doesn't matter what your ranking is," said Agassi, who won the 1994 Open as an unseeded player, said of his Grand Slam philosophy. Muster, who complained about favouritism toward Agassi after his own demotion to third seed, overcame a strength-sapping stomach virus to hold off 13th-seeded Swede Thomas Enqvist 7-6 6-2 4-6 6-1 in the only fourth-round matchup of seeded players. Agassi was broken at love in the seventh game and it cost him the first set. He didn't make that mistake again, never giving Wheaton another break point. "I think he played very steady the whole match," said Wheaton, the lowest-ranked player to reach the fourth round at 131 in the world. "Basically he just waited for me to miss a lot of balls, like I did," added the one-time Wimbledon semifinalist. Enqvist got off to a fast start but squandered his golden opportunity to take the opening set from the Austrian while serving at 5-3. "The first set was very important," said Enqvist, a quarter-finalist at this year's Australian Open. "I had 5-3 and a set point. In that game I had three double faults. Against the number two player in the world, you can't do that," added Enqvist, who then dropped the tie-break 7-4. Both players had trouble holding serve over the first three sets with each being broken seven times. But when Enqvist extended the match by taking the third set, Muster made it clear there would be no fifth. Though drained by the heat and a shaky stomach, a determined Muster raced through the fourth set. The Austrian lost just 12 points in the set and only two off his serve, serving notice that Agassi had better be ready when they square off. "We're both going to be beating the ball pretty good from the baseline," promised Agassi. "You'll hear explosions off the racket four, five, six times a point. That's big tennis." The other men's quarter-final berth up for grabs on the Labour Day holiday programme was claimed by 67th-ranked Spaniard Javier Sanchez, who surprised 20th-ranked Frenchman Arnaud Boetsch 6-4 7-6 7-6. Sanchez, who had lost in the first round of eight of his previous nine Grand Slams, reached the quarters here for the second time in 10 U.S. Open campaigns. As if it were not surprising enough to find Sanchez alive and well into the second week at a major, there is not an oddsmaker on the planet who would have predicted he would last longer than his famous sister, Arantxa Sanchez Vicario. But that was just what happened. The third-seeded Sanchez, who won the Open in 1994, got a look at the future of women's tennis as she fell to 16th-seeded rising star Martina Hingis of Switzerland 6-1 3-6 6-4. In the quarter-finals, the 15-year-old Hingis will face another battle-tested veteran in seventh-seeded Czech Jana Novotna, who clobbered 17th seed Karina Habsudova of Slovakia 6-2 6-0 in just 50 minutes. Top seed and defending champion Steffi Graf was not about to give way to the youth movement, however. The German superstar ended the exciting run of 15-year-old Russian up-and-comer Anna Kournikova 6-2 6-1 to reach the Open quarter-finals for the 12th consecutive year. "It's important to have these new faces come up," the four-time champion said of Hingis and Kournikova. "It's good to know the future of women's tennis is going to show up." In the present, however, Graf will continue her run at a 21st Grand Slam singles title with a quarter-final against Austrian Judith Wiesner, a 6-0 6-3 winner over Italian Rita Grande. Wiesner has won a total of two sets from Graf in nine previous defeats. 7155 !GCAT !GSPO After suffering a surprise fourth-round defeat at the U.S. Open on Monday the always optimisitc Arantxa Sanchez Vicario managed to put a positive spin on a year of near misses. "I'm very happy with the year that I've been having," the 24-year-old Spaniard said of a 1996 campaign that has seen her win two titles and reach six other finals. "If I would not get to the final is when I have to worry more. I mean it's better to win when you get to the final, but I just think that I have had a great year." Not that the bubbly Barcelonan wasn't disappointed with her failure to capitalise on a 2-0 third-set lead, instead allowing 16th-seeded Swiss teenager Martina Hingis to rally for a 6-1 3-6 6-4 win. "I'm a little bit disappointed with myself because I let her get back," said the third seed, who won the Open in 1994 but now has consecutive fourth-round exits. "I did have my chances to close it out and I didn't do it." Sanchez's year has been a series of close calls. After losing a marathon Australian Open quarter-final to American Chanda Rubin 16-14 in the final set in January, Sanchez played runner-up to Steffi Graf titles at the French Open and Wimbledon. Her 6-3 6-7 10-8 loss to world number one Graf at Roland Garros is recognised as a recent classic. This summer, Sanchez extended her runner-up streak, losing to American Lindsay Davenport in the Olympics, then to Monica Seles at the Canadian Open and Kimiko Date of Japan in San Diego. "You just have to see that I didn't stop playing for three months, not injured , doing my best getting to the finals losing three sets all the time, " said Sanchez. "That means that I'm in very good shape, so I have to be happy. "Most other players would like to be where I am right now." 7156 !GCAT !GSPO Fifteen-year-old Martina Hingis struck a blow for the youth brigade and claimed the highest seeded scalp of the U.S. Open so far by upending third seed Arantxa Sanchez Vicario on Monday. The 16th-seeded Swiss opened second-week play with a 6-1 3-6 6-4 upset of the 1994 Open champion to reach the second Grand Slam quarter-final of her fledgling career. Earlier this year, Hingis became the youngest-ever Australian Open quarter-finalist and she will next play either seventh seed Jana Novotna or Karina Habsudova (17) with a final-four berth on the line. "This is a Grand Slam and Arantxa Sanchez is not an easy player," said the beaming Hingis, who leaped for joy after stopping the Spaniard who had reached the final of her last five tournaments, including the Olympics. "I just had my best match today and I'm very happy about it," added Hingis, who handed Steffi Graf one of her two WTA Tour defeats this year at the Italian Open. The match was not without its strange twists with a pair of bad overrules by the chair umpire causing frustration on both sides of the net and a match point that was interrupted by a rolling water bottle. On the Grandstand, 24th-ranked Austrian veteran Judith Wiesner moved into the final eight, coasting to a 6-0 6-3 win over 21-year-old Italian Rita Grande. Wiesner became the third unseeded quarter-finalist on the women's side, joining Sunday winners Amanda Coetzer and Linda Wild. Hingis lived up to her famous namesake, Martina Navratilova, in zooming through the first set in just 19 minutes with a mere four unforced errors along the way. A miserable Sanchez service game, punctuated by a double fault at break point, temporarily put Hingis in the driver's seat at 3-2. But the never-say-die Spaniard broke right back to draw even in the second set. At deuce for the fourth time in the following game, Hingis hit a forehand that the line judge called in. But as the two continued hitting, chair umpire Jane Harvey called the forehand long. Hingis became unhinged by the call and television replays showed that the ball had in fact hit squarely on the baseline. The Swiss teen quickly lost the next point, giving Sanchez the game and threw her racket at her chair as she stormed off court for the changeover. "Sometimes it makes you really angry," admitted Hingis. "I'm very lucky I could come back. I just kept fighting in the third set." Still rattled, Hingis promptly lost the next four games, giving Sanchez a 2-0 third-set lead. "I'm very disappointed with myself because I let her get back," said Sanchez. Hingis was assisted in her comeback by Sanchez, who smacked 22 of her 52 unforced errors in the third set. After breaking Sanchez in the fourth game to put the set back on serve, it was Hingis who got the benefit of an overrule. This time, Sanchez put the ball on the baseline only to have the chair call it out, giving the teenager the game and a 4-3 lead. Hingis then broke Sanchez for the sixth time and a 5-3 edge. But she appeared terribly nervous serving for the match and was broken at love by the Barcelona battler. Sanchez, however, was unable to take advantage and Hingis put the Spaniard in a 15-40 hole to reach double match point. The next point was halted midway as an empty water bottle got lose and rolled toward the court during the pivotal point. When they played it over, Sanchez sailed a backhand slice well out and Hingis won her big victory. "It's nice to be able to see young players (come along)," said the Wimbledon and French Open runner-up, shaking off the defeat. "It's good for the game." 7157 !GCAT !GSPO Results from the U.S. Open Tennis Championships at the National Tennis Centre on Monday (prefix number denotes seeding): Women's singles, fourth round Judith Wiesner (Austria) beat Rita Grande (Italy) 6-0 6-3 16-Martina Hingis (Switzerland) beat 3- Arantxa Sanchez Vicario (Spain) 6-1 3-6 6-4 Women's singles, fourth round 1-Steffi Graf (Germany) beat Anna Kournikova (Russia) 6-2 6-1 Men's singles, fourth round Javier Sanchez (Spain) beat Arnaud Boetsch (France) 6-4 7-6 (7-5) 7-6 (7-3) Mixed doubles, quarter-finals Rachel McQuillan and David MacPherson (Australia) beat 2 - Helena Sukova and Cyril Suk (Czech Republic) 6-4 7-6 (7-5) 4-Manon Bollegraf (Netherlands) and Rick Leach (U.S.) beat Sandrine Testud (France) and Paul Kilderry (Australia) by walkover 3-Lisa Raymond and Patrick Galbraith (U.S.) beat Caroline Vis (Netherlands) and Byron Talbot (South Africa) 6-4 6-4 Men's singles, fourth round 6-Andre Agassi (U.S.) beat David Wheaton (U.S.) 4-6 6-2 6-3 6-4 Men's singles, fourth round 3-Thomas Muster (Austria) beat 13-Thomas Enqvist (Sweden) 7-6 (7-4) 6-2 4-6 6-1 Women's singles, fourth round 7-Jana Novotna (Czech Republic) beat 17-Karina Habsudova (Slovakia) 6-2 6-0 7158 !GCAT !GSPO The Kansas City Wiz rallied from a two-goal deficit in the final 20 minutes to record a 3-2 shootout victory over the New York/New Jersey MetroStars in Major League Soccer Sunday to take undisputed possession of first place in the Western Conference. The one-point shootout win for Kansas City (17-13, 41 points) broke a tie with the idle Dallas Burn (16-11, 40), who clinched a playoff spot when the Colorado Rapids dropped a 2-1 decision to D.C. United Thursday. Dallas next plays at New England on Wednesday. Ian Hennessy and A.J. Wood had given the MetroStars a 2-0 halftime lead, but the Wiz, the league's highest scoring team (60 goals), equalised on an own goal by midfielder Damian Silvera in the 70th minute and a score by Zimbabwean Digital Takawira six minutes later. Kansas City outscored New York (12-14), which dropped a third consecutive match, in the shootout, 3-1, as goalkeeper Garth Lagerway made three saves. Former Scottish international Mo Johnston, Preki and Mike Sorber converted their shootout attempts. The Los Angeles Galaxy (16-11, 40) had an opportunity to move into first place with a regulation victory, but had to settle for a 2-1 shootout win over the host San Jose Clash that snapped a four-game losing streak. Greg Vanney, John Garvey and Jorge Salcedo scored goals for the Galaxy in the 3-1 shootout triumph, which clinched a playoff berth and moved the Galaxy into a second-place tie with Dallas. U.S. international Cobi Jones scored for Los Angeles in regulation, Missael Espinoza for San Jose. Roy Lassiter scored his league-high 21st goal for the Tampa Bay Mutiny (15-12) in a 3-1 win over the New England Revolution (13-14) Saturday. Steve Ralston and Goran Hunjak also tallied for Tampa Bay. Imad Baba spoiled goalkeeper Steve Budnick's bid for a shutout in the 73rd minute. The Columbus Crew (12-16)), considered a longshot to reach the playoffs last month, moved into fourth place over the Revolution after stopping Los Angeles at home Wednesday, 2-0. The Crew, who had goals from Brian McBride and U.S. international defender Paul Caligiuri, won for the sixth consecutive time without a loss under coach Tom Fitzgerald. U.S. international goalkeeper Brad Friedel recorded his second shutout in five appearances since joining the Crew. Steve Rammel scored his sixth game-winning goal of the season in United's 2-1 triumph over Colorado (10-19), whose playoff chances are virtually nil after four consecutive losses, in Denver. Shawn Medved had given United (14-14) a 1-0 lead before Jean Harbour equalised for the Rapids. 7159 !GCAT !GSPO Alex Rodriguez, flattered that Baltimore manager Dave Johnson asked for his bat to be checked, smacked a three-run homer to break a fifth-inning tie and help the Seattle Mariners beat he Orioles 5-1 Sunday. "Actually, I thought it was very flattering," said Rodriguez, who uses Ken Griffey Jr's bats. "A shortstop with a corked bat? It's pretty sweet. But I just grabbed another one of Junior's. I've been using them all year." Seattle manager Lou Piniella had asked for Bobby Bonilla's bat to be confiscated after his fourth-inning single. "I didn't want to let him hit with it, so I might as well take it out of his hands," said Johnson about why he asked home plate umpire Ted Barrett to confiscate Rodriguez's bat for X-rays as the shortstop approached the plate. "It didn't affect much of anything. "Not that I thought it was altered in any thing or any way, it's just that if you take one of my guys' bats, I'm going to take one of your guys' bats." "I could care less, that's why I got six dozen," said Griffey." Rodriguez, who extended his hitting streak to 17 games with a third-inning double, is 33-for-68 (.485) during that span. The double gave him the major-league lead with 49, one more than teammate Edgar Martinez. Terry Mulholland (3-1) over 6 1/3 innings allowed one run, seven hits, walked three and struck out two for Seattle, which split the four-game series and won for the fifth time in seven games. Norm Chartlon and Mike Jackson combined for 2 2/3 scoreless innings. David Wells (10-13) was reached for four runs and seven hits in 6 2/3 innings. Bonilla hit his 23rd homer for Baltimore, which stayed four games behind the Yankees in the American League East, one game behind Chicago in the wild-card race and one ahead of Seattle. At California, Chuck Finley and two relievers combined on a four-hitter and Tim Salmon hit a three-run homer as the Angels defeated the struggling New York Yankees 4-0. Finley (13-13) scattered four hits in 7 1/3 innings with four walks and nine strikeouts. The veteran left-hander has won all four of his starts against the Yankees this season. Mike James made just one pitch and got Cecil Fielder to ground into a double play to end the eighth. Troy Percival worked the ninth. The Yankees have lost six of their last eight games and 11 of 17 and are just 24-27 since the All-Star break. The Angels scored all of their runs in the third off Kenny Rogers (10-8). In Oakland, Aaron Sele pitched six scoreless innings and Jeff Frye, Mike Greenwell and rookie Nomar Garciaparra each drove in a pair of runs to lead the Boston Red Sox to an 8-3 victory over the Athletics. Sele (6-9), activated off the disabled list for the game, scattered four hits, walked none and struck out three. Five relievers finished up for the Red Sox, who snapped a two-game skid and have won 10 of their last 13. Garciaparra, making his first career start, homered for his first major-league hit. At Texas, Julio Franco's fifth-inning grand slam capped a five-run fifth inning and Charles Nagy allowed one run over 7 2/3 innings as the Cleveland Indians decked the Rangers 8-2. Nagy (14-4) gave up seven hits, walked three and struck out eight for Cleveland, which salvaged the final game of the three-game series. The Indians won only four of 12 games between the teams this season. Cleveland's Kevin Seitzer, acquired from Milwaukee Saturday, went 4-for-5. Sandy Alomar homered for Cleveland. Will Clark homered for Texas. In Toronto, the Chicago White Sox scored three runs without a hit in the top of the 11th off reliever Paul Spoljaric (2-1) on two walks, a wild pitch, a hit batsman, an error, another wild pitch and a sacrifice fly to complete a three-game sweep of the Blue Jays, 4-2. Roberto Hernandez (6-1) pitched two innings to get the win, despite allowing Shawn Green an RBI single in the 11th. Chicago, which managed only five hits off three Toronto pitchers, won its fourth straight. Danny Tartabull's 20th homer gave the White Sox four players with 20 homers for the fifth time in franchise history and the first time since 1987. Toronto starter Juan Guzman fanned three and lowered his league-leading ERA to 2.93. In Detroit, Tom Goodwin's single with two outs in the top of the 13th scored Jose Offerman and lifted the Kansas City Royals to a 3-2 victory over the Tigers. Royals starter Chris Haney had a two-hit shutout going into the ninth, but closer Jeff Montgomery allowed a game-tying two-run homer to Travis Fryman. In Milwaukee, Rich Becker (6-7) homered and drove in three runs and Scott Aldred scattered nine hits over eight innings to lead the Minnesota Twins to a 6-2 win over Brewers. Chuck Knoblauch led off the game with a homer for Minnesota. Jeff Cirillo and Matt Mieske homered for Milwaukee. 7160 !GCAT !GSPO Briton Tim Henman achieved another milestone for his country at the U.S. Open on Sunday. After becoming his country's first Wimbledon quarterfinalist in 23 years earlier this year, the unseeded Henman became the first Englishman to reach the fourth round at the Open since 1984 by upsetting 12th-seeded Todd Martin 6-2 7-6 6-4. The last Englishman to get this far was John Lloyd, who watched from courtside at the National Tennis Centre stadium. Henman's one hour, 49 minute victory under the stadium lights was particularly sweet for the 22-year-old since it was the lanky American who had stopped his Wimbledon run with a three-set victory. "It gives me a great deal of satisfaction to put the past behind me and come up with a win," said Henman, ranked 39th in the world. "It's very special, this was one of the biggest and best matches in my career." Martin, who in the Wimbledon semifinals went on to lose to countryman Mal Washington after leading 5-1 in the fifth set, agreed with Henman's assessment. "I think I played Tim on one of his best nights," said Martin. Henman's victory sets up a match with the tournament's sentimental favourite Stefan Edberg, who is retiring at the end of this year and is playing his last Open. "I'm delighted have the opportunity," Henman said of playing Edberg, with whom he has practised frequently in London where the 30-year-old Swede has a home. But Henman promised not to lose focus of the task at hand when he plays the six-time Grand Slam champion. "The last thing you have to do is to look up and see that you are playing one of the real greats," said Henman. Martin played with his right elbow heavily wrapped after hyper-extending it during his first-round win over Younes El Aynoui, but refused to use it as the reason for his demise. "My elbow felt fine, the only problem out there today was that I wasn't copmfortable playing without a real good serve against a guy who was very aggressive," said Martin, who collected just seven aces. Martin threatened in the second set when he had two set points on Henman's serve at 5-4. Henman fought his way into a tiebreaker where he took a a 5-4 lead by swatting a forehand return winner. Henman then raised the voltage on his serve, taking the next two points and the set with a pair of booming service winners. "There is a point where you have to say that's a little too good," Martin said. 7161 !GCAT !GSPO National Football League standings after games on Sunday (tabulate under won, lost, tied, points for and points against): AMERICAN FOOTBALL CONFERENCE EASTERN DIVISION W L T PF PA BUFFALO 1 0 0 23 20 INDIANAPOLIS 1 0 0 20 13 MIAMI 1 0 0 24 10 NEW ENGLAND 0 1 0 10 24 NY JETS 0 1 0 6 31 CENTRAL DIVISION W L T PF PA BALTIMORE 1 0 0 19 14 JACKSONVILLE 1 0 0 24 9 CINCINNATI 0 1 0 16 26 HOUSTON 0 1 0 19 20 PITTSBURGH 0 1 0 9 24 WESTERN DIVISION W L T PF PA DENVER 1 0 0 31 6 KANSAS CITY 1 0 0 20 19 SAN DIEGO 1 0 0 29 7 OAKLAND 0 1 0 14 19 SEATTLE 0 1 0 7 29 NATIONAL FOOTBALL CONFERENCE EASTERN DIVISION W L T PF PA PHILADELPHIA 1 0 0 17 14 DALLAS 0 0 0 0 0 ARIZONA 0 1 0 13 20 NY GIANTS 0 1 0 20 23 WASHINGTON 0 1 0 14 17 CENTRAL DIVISION W L T PF PA GREEN BAY 1 0 0 34 3 MINNESOTA 1 0 0 17 13 CHICAGO 0 0 0 0 0 DETROIT 0 1 0 13 17 TAMPA BAY 0 1 0 3 34 WESTERN DIVISION W L T PF PA CAROLINA 1 0 0 29 6 SAN FRANCISCO 1 0 0 27 11 ST LOUIS 1 0 0 26 16 ATLANTA 0 1 0 6 29 NEW ORLEANS 0 1 0 11 27 MONDAY, SEPTEMBER 2 SCHEDULE DALLAS AT CHICAGO 7162 !GCAT !GSPO Results of National Football League games played on Sunday (home team in CAPS): BALTIMORE 19 Oakland 14 CAROLINA 29 Atlanta 6 Kansas City 20 HOUSTON 19 INDIANAPOLIS 20 Arizona 13 JACKSONVILLE 24 Pittsburgh 9 MINNESOTA 17 Detroit 13 ST LOUIS 26 Cincinnati 16 Philadelphia 17 WASHINGTON 14 DENVER 31 NY Jets 6 MIAMI 24 New England 10 SAN DIEGO 29 Seattle 7 SAN FRANCISCO 27 New Orleans 11 Green Bay 34 TAMPA BAY 3 Buffalo 23 NY GIANTS 20 (OT) 7163 !GCAT !GSPO A throwing error by second baseman Mark Lemke with two out in the bottom of the 12th allowed Luis Gonzalez to score the winning run from second as the Chicago Cubs edged the Atlanta Braves 3-2 Sunday. With Joe Borowski (2-2) pitching, Gonzalez doubled to left over the head of Ryan Klesko and Dave Magadan was walked intentionally before Ryne Sandberg hit a slow roller towards Lemke, who rushed his throw. First baseman Fred McGriff got a piece of the throw, but it rolled towards the Braves' dugout and Gonzalez scored without a throw. "I really didn't think I could reach the ball," said McGriff about the throw. "It just went off my glove and was over, bang, bang." Mike Campbell (3-0) pitched a scoreless 12th inning for the win, allowing one hit and one walk. Atlanta starter John Smoltz, winless in his last three starts since recording his 20th win, allowed only Magadan's solo homer in the second and Mark Grace's infield single in the seventh. He walked three and struck out nine. "I never get down on this team," said Smoltz. "They've won so many games for me. To be honest, I should have thrown a shutout. Magadan went down and got a good pitch and hit it out." Chicago starter Dave Swartzbaugh, making his major-league debut, allowed one run and five hits with one walk and four strikeouts in four innings. "It was certainly a surprise when they told me I was starting," said Swartzbaugh. "One day you're down in Triple-A, the next you're pitching against the best team in baseball." In Philadelphia, pinch-hitter Ruben Amaro delivered a three-run double during a five-run eighth inning that vaulted the Phillies to a 6-3 victory over the Los Angeles Dodgers. Wendell Magee, who hit his first major-league homer in the fifth, singled home Amaro to cap the rally. The Dodgers, who had a three-game winning streak snapped, squandered a chance to tie the Padres for first place in the National League West. Instead, Los Angeles remained one-half game ahead of Montreal in the race for the wild-card berth. In Montreal, Cliff Floyd homered and drove in three runs and F.P. Santangelo added two RBI as the Expos built a six-run lead then hung on for a 7-6 win over the San Diego Padres. San Diego's Steve Finley cut the deficit to a run with his 22nd homer to lead off the ninth and Mel Rojas walked Rickey Henderson before getting Tony Gwynn to bounce into a double play and Ken Caminiti to ground out for his 27th save. Jeff Fassero (14-8) won for the fifth time in his last six decisions. Henderson finished 2-for-4, including a leadoff homer for the Padres. It was the 70th leadoff homer for Henderson and the third this season. In Pittsburgh, Jermaine Allensworth's two-run single snapped a tie and highlighted a six-run seventh inning as the Pirates defeated the Houston Astros 9-5. Dave Wainhouse (1-0) picked up his first major-league win, allowing just one walk in 2 1/3 scoreless innings. Pittsburgh snapped a four-game losing streak and won for only the second time in its last eight games. Jeff King, Carlos Garcia and Al Martin hit solo homers for Pittsburgh. Danny Darwin (9-11) took the loss for Houston, which now leads St Louis by just 1 1/2 games in the N.L. Central. In St Louis, pinch-hitter Gary Gaetti's bases-loaded single highlighted a six-run seventh inning and the Cardinals tied a season high with 18 hits as they completed a three-game sweep of the Colorado Rockies with a 15-6 rout. John Mabry had four hits and two RBI and scored three runs for St Louis, which had lost eight of its first nine meetings with the Rockies this season. Ray Lankford, Willie McGee and starting pitcher Danny Jackson also drove in two runs apiece for the Cardinals. Vinny Castilla homered and drove in three runs for the Rockies, who have lost four straight. In Cincinnati, Mark Hutton allowed five hits over six innings and Gary Sheffield hit a two-run homer, his career-high 38th, as the Florida Marlins defeated the Reds 6-1 for their eighth victory in nine games. Hutton (3-1) struck out six and walked one as he shut down the Reds, who exploded for 22 runs the day before. He allowed Willie Greene's 12th homer in the fourth but not much else. Felix Heredia started the seventh and was relieved by Robb Nen with two out and two on in the eighth. Nen got the final four outs for Florida. In New York, Andy Tomberlin doubled home the tying run in the bottom of the 10th and scored the winning run on a fielder's choice as the Mets rallied for a 6-5 victory over the San Francisco Giants. John Franco (4-3) got the win, although he had yielded a 10th-inning go-ahead run and was ejected after the inning for arguing with home plate umpire Larry Poncino. Rod Beck (0-7) took the loss. 7164 !GCAT !GSPO Major League Baseball standings after games played on Sunday (tabulate under won, lost, winning percentage and games behind): AMERICAN LEAGUE EASTERN DIVISION W L PCT GB NEW YORK 76 60 .559 - BALTIMORE 72 64 .529 4 BOSTON 70 67 .511 6 1/2 TORONTO 63 74 .460 13 1/2 DETROIT 49 88 .358 27 1/2 CENTRAL DIVISION CLEVELAND 81 55 .596 - CHICAGO 74 64 .536 8 MINNESOTA 68 69 .496 13 1/2 MILWAUKEE 66 72 .478 16 KANSAS CITY 63 75 .457 19 WESTERN DIVISION TEXAS 77 59 .566 - SEATTLE 71 65 .522 6 OAKLAND 66 73 .475 12 1/2 CALIFORNIA 63 74 .460 14 1/2 MONDAY, SEPTEMBER 2 SCHEDULE KANSAS CITY AT TORONTO DETROIT AT CHICAGO CLEVELAND AT MILWAUKEE NEW YORK AT OAKLAND MINNESOTA AT TEXAS BOSTON AT SEATTLE BALTIMORE AT CALIFORNIA NATIONAL LEAGUE EASTERN DIVISION W L PCT GB ATLANTA 84 52 .618 - MONTREAL 73 62 .541 10 1/2 FLORIDA 66 71 .482 18 1/2 NEW YORK 61 76 .445 23 1/2 PHILADELPHIA 55 82 .401 29 1/2 CENTRAL DIVISION HOUSTON 74 64 .536 - ST LOUIS 72 65 .526 1 1/2 CHICAGO 68 67 .504 4 1/2 CINCINNATI 67 69 .493 6 PITTSBURGH 57 79 .419 16 WESTERN DIVISION SAN DIEGO 76 62 .551 - LOS ANGELES 74 62 .544 1 COLORADO 70 68 .507 6 SAN FRANCISCO 58 76 .433 16 MONDAY, SEPTEMBER 2 SCHEDULE HOUSTON AT ST LOUIS SAN FRANCISCO AT MONTREAL LOS ANGELES AT NEW YORK COLORADO AT PITTSBURGH CHICAGO AT FLORIDA ATLANTA AT CINCINNATI SAN DIEGO AT PHILADELPHIA 7165 !GCAT !GSPO Unseeded American Linda Wild smudged up the golden reputation of her country's Olympic champion Lindsay Davenport with a smashing 6-2 3-6 6-0 fourth-round upset at the U.S. Open Sunday. Wild didn't hold back on any shots, blistering the National Tennis Centre stadium court with 24 winners in sending the eighth-seeded Davenport crashing to her first loss of the summer. "I knew going into the match I had to go for the first strike, go after her," said Wild after reaching the quarterfinals of a Grand Slam for the first time in the 25-year-old's career. "If I got into a rally, and I didn't get her moving before she got me moving, then I was dead. "I thought the key was that I was playing more of a first-strike match than her," said Wild, ranked 32nd in the world. After losing in the second round of Wimbledon to Larisa Neiland, the 20-year-old Davenport had put together a 16-match winning streak, punctuated by a win over Arantxa Sanchez Vicario in the Atlanta Games final and a victory the following week over Steffi Graf in the Los Angeles semifinals. "This is definitely a huge disappointment after I had a great two months," said Davenport, who had lost just 10 games in her first three Open wins. "I was looking forward to doing well here. It's going to be hard because this was pretty much the biggest tournament of the year for myself." Except for Davenport's nighttime exit, things went as expected for the seeded women in action as number two Monica Seles and number four Conchita Martinez cruised into the final eight. Seles flirted briefly with trouble, trailing 3-5 in the first set, before winning the last nine games to beat Frenchwoman Sandrine Testud 7-5 6-0. "I just told myself, just go for your shots, even if you lose the set, no big deal, there's still another set to go," said Seles. Martinez never was troubled by Swede Asa Carlsson in the Spaniard's 6-2 6-1 win. Davenport was in trouble right away. The match was not even 10 minutes old when she was already down 3-0. It was 5-0 after just 16 minutes. "She started off playing unbelievable tennis, some of the best tennis I've played against in a very long time," said Davenport. "She came in fighting hard and ready to take it, as she did." Said Davenport: "Once I got down in the beginning, I lost my confidence a lot." Davenport regrouped in the second set to find her golden touch long enough to sweep three games in a row for a 5-2 lead and then held serve at love at 5-3 to even the match. But the comeback stopped there. Davenport made 13 unforced errors and won just 10 points in the final set. Davenport had been lighter and faster around the court this summer after sheding 20 pounds (nine kg) off her 6 foot, 2 inch (1.89 metres) frame. But she could only lumber around the court in futile pursuit of Wild's winners. "I felt a little out of it," said Davenport. "I don't know what it was. I was just flat." 7166 !GCAT !GSPO The NFL is back in Baltimore, and Jimmy Johnson is back in the NFL. Vinny Testaverde rushed for one touchdown and scrambed 12 yards to set up the go-ahead score by Earnest Byner in a 19-14 season-opening win for the Baltimore Ravens -- the former Cleveland Browns -- over the Oakland Raiders Sunday. It was a special return for head coach Ted Marchibroda, who was head coach of the Baltimore Colts from 1975 to 1979. "To come from behind like that in front of a full house, it probably doesn't get too much better than this," said Marchibroda, who won his first game as head coach of the Ravens after taking the Indianapolis Colts to within one win of the Super Bowl last season. Testaverde was 19-for-33 for 254 yards and was not intercepted. He also rushed eight times for 42 yards. "We played the no-huddle and they couldn't get any rest between plays," Testaverde said. "The crowd pumped us up big time." The game was played before 64,124 fans at Memorial Stadium, the largest crowd for a sporting event in Baltimore. It was the first National Football League regular-season game in Baltimore since December 18, 1983, when the home team was the Colts, who left for Indianapolis after the season. But Cleveland Browns owner Art Modell moved his team to Baltimore this season, breaking hearts in one city and thrilling them in another. Also in a new city is Jimmy Johnson, the former Dallas coach who made a successful debut in Miami when rookie Karim Abdul-Jabbar rushed for 115 yards and a touchdown in a 24-10 Dolphins victory over the New England Patriots. Johnson led Dallas to two Super Bowl titles in five years before taking over in Miami for the legendary Don Shula. "Going into the game, I was nervous," Johnson said. "You never know how a young team will respond. Our owner Wayne Huizenga gave me a game ball and I told our players that this game ball meant more to me than any other game ball than I've ever received." Dan Marino threw for 176 yards as the Dolphins relied on their running game. In San Francisco, wide receiver Jerry Rice had a two-yard scoring run as the 49ers scored all three of their touchdowns on the ground in a 27-11 victory over the New Orleans Saints. Rice, who had five receptions for 88 yards, posted his 10th career rushing score and extended his NFL record with his 157th touchdown. Steve Young completed 18-of-29 passes for 199 yards and carried six times for 52 yards for the Niners. In Jacksonville, Mark Brunell threw for 212 yards and a pair of first-half touchdowns and James Stewart added a late scoring run as the Jaguars surprised the defending AFC champion Pittsburgh Steelers 24-9. Pittsburgh star linebacker Greg Lloyd suffered a season-ending torn left patella tendon in the third quarter when he collided with teammate Rod Woodson. In Denver, John Elway completed 16-of-33 for 183 yards and led the Broncos to four first-half touchdowns en route to a 31-6 rout of tne New York Jets. Neil O'Donnell, who quarterbacked the Steelers to the Super Bowl last season, in his first start for the Jets was sacked eight times and completed just 7-of-13 passes for 50 yards with an interception. At Tampa Bay, Brett Favre threw four touchdown passes as the Green Bay Packers demolished the Buccaneers 34-3, spoiling the debut of coach Tony Dungy. Favre, the 1995 Most Valuable Player who spent part of the off-season in a rehabilitation centre recovering from an addiction to painkillers, hooked up with Keith Jackson in the first half on scoring passes of one, four and 51 yards. Favre tied Joe Namath as the third-fastest to reach 15,000 yards, doing so in 66 games. Only Dan Marino (56) and Jim Everett (64) reached the milestone faster. In Minnesota, Brad Johnson replaced injured starter Warren Moon and hit Cris Carter with a 31-yard touchdown pass with 66 seconds left to lift the Vikings to a 17-13 victory over the Detroit Lions. Minnesota linebacker Jeff Brady intercepted a pass by Detroit's Scott Mitchell at the Vikings' 10-yard line with 20 seconds left to preserve the win. Moon suffered a right ankle injury late in the first half and did not return. In Indianapolis, Jim Harbaugh shook off an arm bruise and threw two touchdown passes, one with 1:54 remaining, as the Colts beat the Arizona Cardinals 20-13, spoiling the coaching debut of former defensive coordinator Vince Tobin. The Colts were victorious in their first game under new head coach Lindy Infante. In Washington, Rodney Peete passed for 257 yards and two touchdowns in the first half and the Philadelphia Eagles held on for yet another close victory over the Redskins, 17-14. The Eagles have won the last eight meetings by a total of 29 points, an average of less than four points a game. In Houston, Steve Bono threw two touchdown passes as the Kansas City Chiefs erased an early 10-point deficit and pulled out a 20-19 victory over the Oilers. Only 27,725 fans showed up in the Astrodome to see the Oilers, who are scheduled to move to Nashville, Tennessee after the 1997 season. In San Diego, John Carney kicked five field goals and the Chargers rushed for 185 yards in a 29-7 victory over the Seahawks. The Chargers have won five straight and nine of the last 10 meetings from Seattle. In St Louis, rookie Lawrence Phillips had two short touchdown runs and the Rams used turnovers to score 19 unanswered points in a 26-16 win over the Cincinnati Bengals. In East Rutherford, New Jersey, quarterback Dave Brown's fumble in his own territory set up Steve Christie's 34-yard field goal with 4:52 left in overtime as the Buffalo Bills erased a 17-point deficit and beat the New York Giants 23-20. The Giants raced to a 17-0 lead 23 minutes into the game. But Thurman Thomas scored on a one-yard run with 3:14 left in the second quarter and turned the momentum in Buffalo's favour. The Bills dominated the second half, getting a pair of field goals and a 60-yard touchdown pass from Jim Kelly to Andre Reed to force overtime. 7167 !GCAT !GSPO Loren Roberts sank a six-foot birdie putt on the first playoff hole to defeat Jerry Kelly at the $1.2 million PGA Greater Milwaukee Open on Sunday and capture his second title of the year. Roberts, who was three shots back entering the final round, birdied four of the last six holes to force a playoff with Kelly, a Wisconsin native who could not ride the home-state advantage to his first career PGA Tour victory. Tiger Woods completed his first tournament as a professional in grand style by firing a final-round three-under-par 68, including a hole-in-one. He finished at seven-under 277 and received his first check of $2,544. Roberts shot a three-under 68 to finish at 19-under 265. The 1994 runner-up birdied the fourth hole and bogeyed the ninth and 10th before his surge on the last six regulation holes. "I thought I'd have to be 22 under par, but the course didn't play as easy for me with the wind," said Roberts. "I was trying to be patient. After 10, I thought I'd have to pull something out. I didn't hit a whole lot of good shots, but the three-putt on 10 snapped me out of it." Roberts, who earned $216,000 for the victory, became the sixth multiple winner on Tour this year, having also taken the MCI Classic in April. This was Roberts' fourth career title. Kelly, who started the day seven shots off the pace, carded a seven-under 64 at the Brown Deer Park Golf Course. Kelly stormed through the front nine, birdying five of the first six holes, including two from over 20 feet out and a 35-footer on the par-three 164-foot fifth hole. He bogeyed the eighth hole but continued his torrid play on the back nine, birdying three of the last four. "I really came on strong," said Kelly. "The playoff was nervous. After the tee shot, I was fine. I'm happy to gain the experience." Jesper Parnevik of Sweden, who was the leader entering the final round, had a chance to join Roberts and Kelly in the playoff, but missed a six-foot par putt on the final hole to finish at one-over 72 for the day and in a four-way tie at 18-under 266. "I thought I had a good shot on 18, but it took a huge bounce," said Parnevik. "I knew if I could get to 20-under, I would win." Nolan Henke, who fired a course record-tying 62 in the opening round, shot a 71 to join Parnevik, Steve Stricker and Andrew Magee in third place. The 20-year-old Woods, who turned professional Tuesday after winning an unprecedented third successive U.S. Amateur Championship, amazed the crowd by eagling the par-five 485-yard fourth hole before firing a hole-in-one on the par-three 188-yard 14th hole. "Overall, it was a lot of fun," said Woods. "Once you start playing for a living, everything changes. I thought the media would have died down, but it didn't. The fan support was outstanding." 7168 !GCAT !GSPO Leading scores in the $1.2 million Greater Milwaukee Open, won by Loren Roberts with a birdie on the first playoff hole on Sunday (players U.S. unless stated): 265 Loren Roberts 66 65 66 68, Jerry Kelly 67 66 68 64 266 Andrew Magee 68 70 65 63, Steve Stricker 66 67 66 67, Jesper Parnevik (Sweden) 65 66 63 72, Nolan Henke 62 66 67 71 267 Olin Browne 67 67 69 64, David Ogrin 68 66 66 67 268 Fred Funk 69 66 67 66, Steve Lowery 70 64 67 67, Duffy Waldorf 65 65 70 68 269 John Maginnes 68 70 68 63, Billy Mayfair 67 68 70 64, Clarence Rose 70 66 67 66, Ken Green 67 69 66 67, Woody Austin 71 65 65 68, Billy Andrade 65 68 67 69, Brian Claar 66 68 66 69, Frank Lickliter 68 68 64 69, Stuart Appleby 69 66 64 70, Bob Estes 64 67 67 71 7169 !GCAT !GSPO Spanish first division summary on Monday: Espanyol 2 (Miguel Angel Benitez 16, Nicolas Ouedec 40 - pen) Sporting Gijon 3 (Francisco Villaroya 67, Jesus Velasco 80, Ricardo Bango 90). Halftime 2-0. Attendance 15,000. 7170 !GCAT !GSPO Spanish first division result on Monday: Espanyol 2 Sporting Gijon 3 7171 !GCAT !GSPO French first division summary on Monday: Nantes 2 (N'Doram 42, 85) Lyon 2 (Caveglia 17, Sylvain Deplace 71). Halftime: 1-1. Attendance: 9,000. 7172 !GCAT !GSPO French first division result on Monday: Nantes 2 Lyon 2 7173 !GCAT !GSPO Internazionale striker Nwankwu Kanu, who helped Nigeria win the Olympic soccer tournament in Atlanta, has a heart problem that could end his career, a leading cardiologist was quoted as saying on Monday. The Italian serie A club said earlier that tests carried out by three heart specialists had shown the 20-year-old Nigerian, who played in the Ajax team that won the European Cup in 1995, had a cardiac anomaly. A statement said that the club would "do everything necessary to achieve a clearer medical picture aimed at protecting the player's health as a priority." It promised more details on Tuesday. Cardiologist Bruno Caru, one of the three who tested Kanu, was quoted by Italian news agency Ansa as saying after meeting Inter officials that in his professional opinion the Nigerian "cannot play". "What surprises me, is that nobody knew about this up to now," said Caru, who leads the medical staff working for the Stefanel Milano basketball team. "This lad has played for Ajax, he has been through the Olympics, he is not just anyone." "And yet all that was needed was a simple electrocardiogram to detect that something was not right. The electrocardiogram would have shown that his left ventricle is overloaded, which should not be the case in an athlete. "And subsequent tests, as has now happened, would have revealed that he has a valvular insufficiency of the aorta." Caru said that by continuing to play, Kanu risked accelerating the problem and he compared the player to someone who had a coronary obstruction. "If he smoked two packets a day, what would have taken three years to develop will take six months. In this case, the efforts required by sporting endeavour provoke the same kind of acceleration," the cardiologist said. "This lad, must, sooner or later, be operated on. There is definitely a valve replacement in his future." Kanu, who scored two brilliant goals when Nigerian beat Brazil 4-3 in the semifinals of the Olympic soccer tournament in Atlanta, joined Inter in July for a reported fee of around $2.0 million after his contract with Ajax expired. 7174 !GCAT !GSPO Austrian national radio said on Monday that German tennis ace Michael Stich was apparently at loggerheads with Austria's revenue service over how much income tax he must pay in his adopted Alpine home. ORF radio said Stich, who has lived in the central Austrian city of Salzburg since 1992, was contesting the bill from local tax authorities. The tennis pro's tax file was currently being examined by the Finance Ministry in Vienna, ORF added. Neither the Salzburg tax bureau, the Finance Ministry nor Stich were immediately available for comment. The squabble centres on whether Stich qualifies for tax relief under Austria's so-called "skiers' edict" which exempts athletes, who compete across the globe but reside in Salzburg, from paying tax on three-quarters of their income. ORF said the tax authorities and Stich also disagreed over whether income from advertising or sponsors' contracts fell into the same category as other income. It was not immediately apparent how much money was in dispute. 7175 !GCAT !GSPO With the Spanish league only a game old, the pressure of the multi-billion-peseta summer spending spree is starting to show at several clubs. Two big-money teams -- Real Madrid and Valencia -- have already been hit by highly-visible clashes between chairmen and coaches. Valencia chairman Paco Roig has had to downplay his differences with manager Luis Aragones after a television station disclosed that the two had engaged in a heated argument while waiting for a plane. Aragones reportedly accused his employer of buying new players only when he had money in from transfers. Everything seemed to be put in order when one of those signings -- Brazilian World Cup star Romario -- helped Valencia to a 2-0 lead at their destination, Racing Santander. But then Valencia let in an own goal, had goalkeeper Andoni Zubizarreta sent off and went down 3-2. Real Madrid's debut game at Deportivo Coruna was also played under the shadow of remarks made by new coach Fabio Capello. After spending four billion pesetas ($34 million) renovating the squad, Capello complained that he still needed midfielders. The Italian was asked to explain his comments by club chairman Lorenzo Sanz, who concluded that Capello's Spanish had been misunderstood. Bobby Robson's own improvised Spanish is coming on well. Helped by bits of Portuguese from his time at Oporto, the new Barcelona coach was able to tell reporters that he had been annoyed with his players before Hristo Stoichkov set them on the way to a somewhat fortunate 4-2 victory at Oviedo. The hottest seat in Spanish football undoubtedly belongs to Radomir Antic, the coach who must placate the hire-and-fire instincts of controversial Atletico Madrid owner Jesus Gil. Antic begun the defence of the league title -- and with it his job -- with a comfortable 2-0 win over Celta Vigo. But the tension is high for a man who knows he must do with 13 front-line players what other teams are doing with 22. To add to the worries, Antic will be without Kiko Narvaez for at least four games after the international striker was carried off injured during Sunday's game. By contrast Jupp Heynckes seems to have the perfect job on the island of Tenerife. The expectations are lower at Tenerife, a side who made it into the UEFA Cup last season but are otherwise best known for spoiling Real Madrid's championship hopes. With the pressure off, Heynckes' team recorded their best-ever victory in the top flight, beating Compostela 6-0. 7176 !GCAT !GSPO With Brazilian striker Anderson set to return from injury, Monaco will fancy their chances of ending the glorious run of unlikely leaders Lens in the French first division on Tuesday. Anderson, top scorer in the league last season, faces a late fitness test after recovering from a thigh injury faster than expected. Scoring, however, has so far not been a worry for either side. They are the highest scorers in the championship so far, Lens having found the net nine times in four games and Monaco not far behind with seven. "If we remain concentrated and serious as we have so far, then we'll be dangerous," said Lens coach Slavo Muslin. Lens' loss through suspension of Cameroon forward Marc-Vivien Foe is compensated by the return from injury of Guinea international Aboubacar Camara. For Monaco, midfielders Enzo Scifo and John Collins are back after World Cup duty for Belgium and Scotland respectively. Lens are the only side on maximum points after four rounds of the championship, their young Euro 96 Czech striker Vladimir Smicer having earned them a last gasp win at home to Montpellier last week. Montpellier, after failing to dent Lens' pride, will be looking to end the unbeaten run of second-placed Paris Saint-Germain, the title favourites, at home. PSG welcome back a host of internationals including Bernard Lama, Patrice Loko and Vincent Guerin who were involved in France's 2-0 win over Mexico in Saturday's friendly. There is also Leonardo who played for Brazil on their brief European tour and Julio Cesar Dely Valdes, back from World Cup duty with Panama. Champions Auxerre, whose strong defence like PSG's has yet to concede a goal this season, will be looking for more strike power at Strasbourg as they prepare for the visit of Ajax Amsterdam in the European Champions' League next week. The only other unbeaten teams face each other, with Bordeaux looking to turn a penchant for draws into a victory at home to Bastia. Bordeaux coach Rolland Courbis indicated he would have preferred three wins and a defeat to one victory and three draws. "We'd have nine points and be better placed," he said. Promoted Marseille, in 12th place, are set to drop Irish striker Tony Cascarino in favour of the fitter Marc Libbra following a goalless draw with Auxerre and a 2-1 defeat by Metz. Nice, away to Lille, will be under new coach Daniel Sanchez, appointed after former France goalkeeper Dominique Baratelli lasted little more than 48 hours in the job. Baratelli, the club's goalkeepers' trainer, took over from the sacked Albert Emon on Thursday but had a change of heart and resigned on Saturday. "After a long night of reflection, (I realised) I've been away from the field for much too long and I'm not up to taking on this formidable challenge," said Baratelli. The 1994 champions Nantes, making their worst start to a season for 30 years, were one from bottom with only one point going into their home match with Lyon on Monday night. 7177 !GCAT !GSPO Former road world champion Lance Armstrong of the United States. will head the new professionnal cycling team Cofidis next season, the team said on Monday. The 24-year-old Texan, who won the world title in 1993, has been looking for a new team since Motorola announced they were retiring from cycling at the end of the current season. In the team coached by France's Cyrille Guimard -- the man who launched the careers of Bernard Hinault and Greg LeMond -- Armstrong will be supported by a strong French squad. Christophe Capelle and Francis Moreau, both team pursuit Olympic champions, Laurent Jalabert's younger brother Nicolas and Tour de France stage winner Cyril Saugrain will be among Armstrong's team mates next season. 7178 !GCAT !GSPO Results of soccer match in the Danish super league over the weekend. Silkeborg 1 Hvidovre 1 Standings (tabulated under played, won, drawn, lost, goals for, against, points): Brondby 6 6 0 0 15 4 18 Aalborg 5 4 0 1 14 4 12 Aarhus 6 3 1 2 13 10 10 Lyngby 6 3 0 3 13 13 9 Silkeborg 5 2 2 1 8 7 8 FC Copenhagen 6 2 2 2 9 9 8 Hvidovre 6 1 3 2 5 6 6 Odense 6 2 0 4 7 12 6 Herfoelge 6 2 0 4 3 10 6 Vejle 6 1 2 3 10 10 5 AB 6 1 2 3 8 14 5 Viborg 6 1 2 3 6 12 5 7179 !GCAT !GSPO Bulgarian striker Hristo Stoichkov struck twice in the second half to help Barcelona to a 4-2 win over Oviedo on the first weekend of the Spanish championship on Sunday. Champions Atletico Madrid began their title defence with a comfortable 2-0 victory over Celta Vigo. Stoichkov scored twice early after the interval but the home side fought back to take advantage of mistakes in the Barcelona back four before two late headed goals by Luis Enrique Martinez guaranteed Bobby Robson's men their three points. Former Barcelona striker Romario also scored on his return to Spain but Valencia squandered a 2-0 lead at Racing Santander to go down 3-2 after seeing international goalkeeper Andoni Zubizarreta sent off for handling the ball outside the area. Atletico played what should have been a home fixture in the Santiago Bernabeu stadium of arch-rivals Real Madrid because of pitch problems at their own ground. Former Real forward Juan Eduardo Esnaider obviously found the move to his liking and the Argentine international opened the scoring with a fine goal early in the second half. Kiko Narvaez made it two shortly afterwards with a spectacular effort. Celta played most of the game with 10 men after Chemo del Solar was sent off for handllng a shot by Jose Luis Caminero in the 15th minute. Serbian set-piece specialist Milinko Pantic was unable to convert the penalty. Former Ajax midfielder George Finidi scored on his home debut for Real Betis who recorded an impressive 3-0 win over Athletic Bilbao, while first-division newcomers Extremedura scored their first goal ever in the top flight, only to go down 2-1 at Hercules. Real Sociedad beat Sevilla 1-0 and Zaragoza surrendered a 2-0 lead to Logrones, who fought back to draw 2-2. On Saturday Real Madrid disappointed their fans and new manager Fabio Capello with a scrappy 1-1 draw at Deportivo Coruna. 7180 !C42 !CCAT !E21 !E211 !E41 !ECAT !GCAT !GJOB !GPOL The South African government has proposed an amendment to the Public Service Act that would allow civil servants to retire from the age of 55 and which could save the state 400 million rand in the first year. The Department of Public Service and Administration said in a memorandum to members of parliament that the package would form part of its post-apartheid review of civil service rules. "The need to provide a right to early retirement from the public service has become increasingly evident during recent years," the department said. Plans to implement the new rule July 1, 1996, had been abandoned and the provision would be invoked by ministerial proclamation after the rules of the government pension fund have been adapted. The bill proposes that officials should be allowed to retire without penalty from the age of 60, rather than only at the present retirement age 65. Officials wanting to retire from the age of 55 should be allowed to do so, but with a four percent pension and gratuity penalty for every year of early retirement prior to 60. The department estimated that allowing officials to retire prior to 65 without penalty would directly cost 570 million rand for the first year. But lowering the pensionable age also would allow the state to cut its contribution to pension funds by one percentage point to 17 percent of pensionable salary. Even after allowing for the cost of early retirement, this would yield a net saving of 400 million rand in the first year, the department said. Other amendments in the pipeline, but not included in the bill submitted on Monday, include: - Enhanced cash benefits for people who resign; - A provision allowing for the transfer of state pension benefits to other funds on resignation; - Restructuring of disability and death benefits; - Introduction of a 24-month average rather than a last-day salary as a basis for pension calculation. -- Cape Town parliamentary office, +27-21 403-2502 7181 !E51 !E512 !ECAT !G15 !G158 !GCAT Legislators insisted on Monday that the government should not finalise its trade negotiations with the European Union until the South African negotiating mandate had been subjected to public comment. They decided at a joint sitting of parliament's trade and industry, foreign affairs and agriculture committees to hold public hearings on the negotiating mandate as soon as a draft is available. "It is not our intention to delay the process. But the European Union mandate took several months to prepare, has gone through all kinds of processes and is well anchored in their political process," trade and industry committee chairman Rob Davies told Reuters. "We feel that our mandate must also go through the various channels in our decision-making process. We think it is very important to hold these hearings." Davies said parliament had no formal right to influence the negotiations prior to the presentation of the trade agreement for ratification and said its report would advisory. He said the committees would invite people from all sectors likely to be influenced by the outcome of the talks on a free trade agreement with the EU. "It seems it has taken some time for a number of relevant parties to realise the importance of these negotiations. It might occur to some parties at this point that they have something important that they want to say and haven't been able to say until now," he said. The three committees jointly adopted a critical submission to the government's negotiating team, calling for tougher bargaining with the EU on terms for future trade with South Africa. The EU has denied South Africa full accession to the Lome Convention on preferential trade terms for developing countries in Africa, the Caribbean and the Pacific. Instead, Europe has offered South Africa a free trade area agreement with strict protection for vulnerable EU markets. "It is our view that the South African negotiating team should focus on our own proposals and not simply react to the mandate approved by the European Council as an instruction to the EU's negotiators," the committee said. "The EU negotiators need to recognise that the negotiations take place between two parties, each with constituencies to whom they are accountable and in which no one mandate is privileged over the other." The committee said the existing EU mandate failed to take account of the different sizes of the two economies. "The EU's proposal would have the effect of requiring of South Africa rather severe adjustment costs to secure only modest additional duty free access to the EU," the committee said. The committee warned that it's submission was just the first move in its active monitoring of the full process of negotiation, "It is a statement of our intention, while respecting the separation of powers between the executive and legislature, to assume an active and engaged stance and to remain seized with this issue," the committee said. 7182 !E12 !E21 !E211 !ECAT !GCAT !GPOL The introduction of tax incentives announced in the recently released macro-economic strategy could be delayed amid misgivings within the parliamentary finance committee. Committee members on Monday expressed concern about government's ability to monitor the tax incentives and prevent abuse. Chairman Zingile Dingani has asked Finance Minister Trevor Manuel, his deputy Gill Marcus and Trade and Industry Minister Alec Erwin to attend his next meeting on Tuesday to discuss the concerns. The bill was originally due to be discussed in the National Assembly on September 11 and in Senate on September 17 but this could be delayed if the finance committee decides to hold hearings. "If hearings are to be held it is likely to delay the passing of the legislation," Democratic Party finance spokesman Ken Andrew said. Committee members objected to efforts to push the Revenue Laws Amendment Bill through parliament this month without giving the committee time to hold public hearings into the planned accelerated depreciation allowances and tax holidays. "The bill is also supposed to be geared towards job creation but it is not clear how this will be enforced," Dingani told Reuters. The bill also did not seem to take into consideration what effect tax holidays for new ventures could have on existing, viable businesses. "The Katz Commission said that we need to make tax laws as simple as possible, but these regulations are very complex and could lead to confusion," Dingani said. Andrew said the bill was "overambitious given the lack of administrative capacity" in the South African Revenue Services. Commissioner of Inland Revenue Trevor van Heerden and top officials from the Department of Trade and Industry (DTI) said that they would monitor the tax incentives jointly and would be strengthened by staff from the Regional Industrial Development Boards now being disbanded. Andrew said he was still sceptical, especially given reports by Auditor General Henri Kleuver on "the inability of the DTI to monitor export incentives such as the general export incentive scheme (GEIS)". DTI officials, who have been criticised for not doing enough quickly enough to implement the new strategy, are particularly anxious to get the bill passed as soon as possible and will now have to make an unscheduled overnight stay in Cape Town to attend Tuesday's meeting. -- Cape Town newsroom, +27 21 252-238 7183 !GCAT These are the leading stories in the Angolan press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. - - - - JORNAL DE ANGOLA - Angola's National Bank said it would halt all of its commercial activities as of Monday (September 2) and resume its "normal" functions. It said it would transfer the commercial activities to the state-owned Caixa de Credito Agro-Pecuaria e Pescas (CAP) created in 1991 to finance the development of agricultural sectors in Angola. - Namibia's Prime Minister Hage Geingob is due to arrive in Luanda on Monday for talks with government officials. - Vietnam's ambassador to Angola, Pham Tien Tu, speaking on the 51th anniversary of his country's independence, said he had confidence in Angola's peace process to end two decades of fighting between government and opposition UNITA forces. 7184 !C24 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Production losses at Gold Fields Namibia Ltd's Tsumeb operations due to strike action were running at around a million rand in revenue and 80 tonnes of copper a day, a company spokesman said on Monday. The company's Tsumeb Corp Ltd (TCL) mines have been shut down since August 23 when Mineworkers' Union of Namibia members took control of key areas, including the copper smelter. Gold Fields spokesman Dermot Whyte told Reuters the mines remained closed on Monday and revenue losses were about a million rand a day. Whyte said production losses as a result of the strike was about 80 tonnes of copper a day or 960 tonnes of copper since the strike began 12 days ago. TCL sold about 6,789 tonnes of copper in the quarter to end-June. Whyte said there still was no end in sight to the labour action. "We are in the process of trying to find a mediator to try and solve the problem but for the last few days we've been deadlocked," Whyte said. He said Gold Fields had been in contact with the union. "We have been talking on and off". The company said last week the copper smelter had been badly damaged by strikers and could remain shut for six weeks or longer. The lead smelter, which was shut down before the strike, also remained out of commission. Union members took control of certain key areas of TCL, including the copper smelter and Kombat property almost two weeks ago. The company obtained an urgent interim court interdict on August 22 declaring the strike unlawful but Namibian police have found it difficult to enforce the court order. -- Marius Bosch, Johannesburg newsroom, +27-11 482 1003 7185 !GCAT !GCRIM !GPOL An inquiry into last-minute promotions under apartheid could uncover irregularities worth about two billion rand, but will be useless if no action is taken, Judge Colin White said on Monday. White told parliament's committee on the public service that no action had been taken on irregular promotions ordered reversed a year ago in the former Transkei homeland. He said scores of justice department officials were still occupying ranks and drawing salaries to which they were not entitled. "If the commission's findings are not going to be enforced, is there any purpose in its continued existence?" he asked. White said the commission, established in terms of the interim constitution, had dealt with about 5,000 cases worth an estimated 200 million rand. He said the vast majority of complaints were valid. With about 50,000 promotions to be probed before the commission's mandate expired at the end of 1997, the total cost of irregular promotions could top two billion rand, he said. The commission was established to examine reports of massive promotions and salary grade hikes in the civil service during the last days of apartheid. In some cases, White said, departments promoted themselves three notches and awarded themselves 100 percent pay increases. But the recovery of overpaid salaries should be handled by departments themselves, and not by the commission's 11 overworked investigators. "Determining the amounts overpaid or their recovery does not fall within the terms of reference of the commission," he said. White said there were reports of similar promotions and pay hikes outside of the former homelands, where most of the fraud appeared to have occurred. But he stressed that his commission could only respond to complaints by "interested parties". He said his investigators had been instructed to solicit complaints from department heads where they uncovered evidence of selective reporting about junior staff that left senior staff unaffected. 7186 !GCAT These are the leading stories in the Malawi press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. - - - - THE STAR - The first contingent of Malawian businessmen trekking to Malaysia to seek new business openings left the country over the weekend. The trip coincides with one by Malawi president Bakili Muluzi expected to visit Malaysia this week. THE NATION - Government will meet this week to discuss the controversial issue of salaries for university lecturers who last month boycotted classes and forced nearly 3,000 students to return home before the end of term. The lecturers are demanding a 100 percent pay rise and claim their plight has not been addressed since two years ago. 7187 !GCAT These are the leading stories in Zimbabwe's state-owned Herald newspaper on Monday. Reuters has not verified these stories and does not vouch for their accuracy. - Zimbabwe's rural district councils and development committees have been challenged not to operate in secrecy when dealing with public and donor funds as lack of transparency will create suspicion. - All lower-grade workers at the Zimbabwean capital Harare's city council will benefit from a salaries review exercise by a firm of consultants to redress previous anomalies. - The annual Harare Agricultural Show which ended on Saturday achieved a record attendance of over 164,000 people. ---Harare Newsroom: +263-4 72 52 28/9--- 7188 !GCAT These are the leading stories in the South African press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. - - - - BUSINESS DAY - African National Congress national and provincial leaders recommended on Sunday that the party reviewed its policy on the death penaly as a possible way of addressing increasing crime and lawlessness. - State pension funds managers, the Public Investment Commissioners (PIC), have more than doubled investment in equities in the past year, with an increase of about seven billion rand to 13 billion rand. - Zambia Copper Investments' share price shot up by a third on Friday, prompting speculation that controlling shareholder Anglo American was increasing its stake to take advantage of the imminent Zambian copper industry privatisation. - The ground-breaking three-year wage agreement signed in the motor vehicle manufacturing industry last year could be in jeopardy because of Mercedes-Benz SA's decision last week to distance itself from a final employer offer on the basis that it deviated from the agreement's spirit and principles. - Three predominantly white unions settled a month-long wage dispute with Transnet yesterday when they signed an agreement based on the same principles as a recent deal struck with four other unions. - A virtual hiatus in new car price increases appears to have ended as a number of manufacturers bow to rand depreciation cost pressures and lift prices today. - - - - BUSINESS REPORT - The World Bank will not loan money for the next phase of the South African-funded Lesotho Highlands Water Project unless villagers affected by the building of the Katse Dam are adequately compensated for upheaval caused by the project. - The customs and excise department moved to put up an umbrella on Friday against the recent rain on its parade over astonishingly high trade surplus figures released last week. - Protea Assurance (Prosure), the composite insurer now up for sale, notched up markedly higher interim earnings of nine million rand from 2.4 million rand previously in the six months to June 30, mainly because of strong gains on income from investments. - Regional Resources, the struggling diamond exploration company under new management, was taken to task by its shareholders at a lively yearly meeting on Friday for running up exorbitant auditing charges. - - - - THE STAR - The African National Congress's top safety and security leaders yesterday came up with the party's most radical recommendation yet in its fight against crime when they announced that the party should review its stance on the death penalty. - Graca Machel, widow of former Mozambican president Samora Machel, will spend two weeks of every month at the Houghton, Johannesburg, home of her new love, President Nelson Mandela. -- Johannesburg newsroom +27 11 482 1003 7189 !GCAT !GPOL Radio Romania news headlines: * Ruling Party of Social Democracy (PDSR) decided to break an alliance with partner National Unity Party (PUNR) due to repeated attacks by PUNR leader Gheorghe Funar against PDSR and President Ion Iliescu. PDSR said Funar's attitude was detrimental to national interests and ran counter to the requirements of an efficient governing. The ruling party also recommended Prime Minister Nicolae Vacaroiu to take needed measures after the break within the coalition set up in January 1995. * Transport Minister Aurel Novac -- one of the three PUNR ministers in Vacaroiu's cabinet -- announced on Monday he had resigned from his position as PUNR vice-president and head of the party's electoral campaign in Bucharest. Novac said he was dissatisfied with PUNR policy and was resigning in reaction to PDSR's step to break the alliance. * Parliament is expected to pass bank law and law on dignitaries' assets in session which resumed on Monday, parliament speaker Adrian Nastase said. Criminal code would also be finalised. * Main opposition National Peasant Party (PNTCD) would vote for ratification of Romanian-Hungarian treaty in its present form, party secretary general Radu Vasile told journalists. * Vasile said PNTCD would not contest President Iliescu's candidacy for a third term in the November 3 polls, but would merely inform Romanian citizens of the anti-constitutional character of this candidacy. -- Bucharest Newsroom 40-1 3120264 7190 !GCAT !GENT !GPOL The ensemble of Slovakia's National Theatre, the country's prestigious leading stage, on Monday called for the resignation of Culture Minister Ivan Hudec on grounds of incompetence. The call came at the end of a meeting of the theatre's dramatic ensemble to protest Hudec's surprise sacking of its artistic director and the appointment of his successor during the summer holiday. "We call on Minister of Culture Ivan Hudec to resign on the basis of the incompetent decisions of the ministry of culture," said a statement. signed by 66 actors and technicians and 18 other leading artistic personnel. The statement was also signed by the heads of the theatre's opera and ballet ensembles. The actors said Hudec had violated the autonomy of the theatre by appointing Lubomir Paulovic to the post of artistic director and sacking Peter Mikulik without consulting the theatre's general manager Dusan Jamrich. "We consider (the changes) as gross and directive administrative breaches of the autonomy of artistic institutions which threaten their very existence," the protest statement said. Paulovic on Monday announced he had resigned and was quitting the national theatre. Several of the theatre's leading actors had threatened to resign in protest over the personnel changes. Their resignation would have disrupted the theatre's entire repertoire and forced it to close down. The last time the National Theatre closed down was in November 1989 when the actors of all the stages in then Czechoslovakia went on strike and held protest meetings in their theatres, a move which precipitated the "velvet revolution" which brought down the communist regime. Artists and intellectuals have always enjoyed high respect in the Czech and Slovak lands and wield greater authority than in many other countries. 7191 !G15 !G158 !GCAT !GDIP The European Union (EU) on Monday, welcomed last week's agreement between Hungary and Romania on the text of a basic treaty and urged its rapid ratification. "The EU considers that the conclusion of the treaty will reinforce stability and the principles of good neighbourliness in Central Europe and that it will contribute to the process of European integration," a statement issued by the Irish Embassy in Budapest said. Ireland current holds the six-monthly EU presidency. It has taken Romania and Hungary four years to reach agreement on the treaty, which enshrines protective rights for ethnic minorities and renounces any claims by either country over the other's territory. Both countries have come under strong pressure from Western nations to sign a friendship agreement as a preliminary step to admission to the EU and NATO. The statement, which added that the EU looked forward to the early ratification of the pact, came on the eve of what is expected to be a stormy emergency debate in Hungary's parliament on Tuesday. The extraordinary session was convened by opposition parties which oppose the treaty as it stands on the grounds that the rights laid down are only individual and do not apply collectively to all 1.6 million Hungarians living in the Transylvania area of Romania. The governing coalition of Socialists and Free Democrats, which is united in favour of the agreement, has a 72 percent majority of parliamentary seats. 7192 !G15 !G158 !GCAT !GDIP The European Union on Monday joined the United States and Britain in welcoming Romania and Hungary's agreement on the text of a long-delayed friendship treaty, which it said would reinforce stability in the area. "The European Union considers the conclusion of the treaty will reinforce stability and the principles of good neighbourliness in Central Europe and...contribute to the process of European integration," said a statement issued by the Dutch embassy on behalf of the Irish presidency of the EU. The treaty, unexpectedly agreed in August, is expected to end years of disputes over the status of the 1.6 million ethnic Hungarians living in Romania's central region of Transylvania. The treaty, vital for both countries ambitions to join the European Union and NATO, is due to be signed later this month. "(The) EU looks forward to the early signature and ratification," the statement said. 7193 !C41 !C411 !CCAT !GCAT !GPOL An influential cabinet economic adviser resigned from his post of the cabinet's undersecretary of state after Poland's biggest insurer PZU SA appointed him president, the government spokeswoman said on Monday. "Professor Jan Monkiewicz handed over his resignation to Prime Minister Wlodzimierz Cimoszewicz," Aleksandra Jakubowska told a news briefing. She added Cimoszewicz has not yet approved the resignation. Monkiewicz has been in charge of the government's privatisation policy, notably concerning financial institutions. -- Warsaw Newsroom +48 22 653 9700 7194 !GCAT !GCRIM Local authorities in the town of Craiova have declared Jiul Petrosani soccer club president Miron Cozma persona non grata in their city, the daily Adevarul said on Monday. "Cozma's presence in Craiova... will be a danger for local order", said Adevarul, quoting an official statement from Craiova, 230 kms west of Bucharest. Cozma is Romania's miners' leader and has a history of violent behaviour. The Romanian Soccer Federation last week banned and fined Cozma for headbutting a Dinamo Bucharest player during a half-time fracas at the Petrosani stadium. Jiul Petrosani are due to play a first division league match against Universitatea next Saturday in Craiova. Under Romanian law, towns can ban individuals they consider to be a threat to public order. 7195 !E51 !E512 !ECAT !GCAT !GDIP Four years since its inception, the Black Sea Economic Cooperation Pact (BSEC) has developed into a confidence-building catalyst for peace and stability in the region, diplomats said on Saturday. "As is stipulated in the Istanbul declaration of 1992, the basic objective of the BSEC is to turn the Black Sea region into an area of peace, stability and prosperity through friendly relations," Romanian foreign ministry official Nikolae Mikou told an international conference on the "post-Dayton Balkans." He told the conference, held in this Ionian Sea island, that all 11 participating nations were united by one prevailing common interest: faster economic and social progress and multilateral cooperation. "The BSEC is an inseparable part of the integration processes going on throughout the continent and, hence, of the efforts to build a democratic, peaceful, prosperous and united Europe," Mikou said. He said the BSEC has received applications by the five new states established on the territory of former Yugoslavia to join the organisation and this could further extend the area of cooperation to the entire Balkan peninsula, Mikou said. Large natural and human resources, a market of 350,000 people, geographic proximity along with cultural interaction and complementary economies are few of the pillars of the 11-nation pact. Its backbone is the 1994 agreement to establish the Black Sea Trade and Development Bank with an initial capital of one billion Special Drawing Rights (SDRs) ($1.6 bilion) but is hindered by delays. SDRs are reserve assets created by the International Monetary Fund (IMF). Their value is a composite of the dollar, yen, mark, pound and franc. So far the agreement to set up the bank has been ratified by only seven BSEC members -- Greece, Albania, Armenia, Moldova, Romania, Turkey and Russia. The bank will be based in Salonika, Greece. Bulgaria and Ukraine have not pushed for approval of the pact by their parliaments, a step necessary prior to setting up the bank. Greece, BSEC's only European Union member, has secured finacial backing of 250,000 Ecu for an action plan for the pact, but can't use the money unless the bank opens. Still, with clearly established goals and a financial institution of its own, BSEC has become an organisation of regional cooperation, Mikou said. "It is undeniable that successful cooperation among the BSEC nations in the economic field is likely to bring about a more favourable political climate, in which acceptable solutions to outstanding issues can be reached more easily," he said. --Athens Newsroom +301 3311812-4 7196 !GCAT !GPOL Journalist Panos Panayiotopoulos will not be a candidate with the conservative New Democracy party, he told Flash radio on Monday. Earlier press reports had said Panayiotopoulos, son-in-law of New Democracy veteran parliamentarian Athanassios Tsaldaris, would have run in New Democracy' slate in the predominantly conservative Athens first district. --Dimitris Kontogiannis, Athens Newsroom +301 3311812-4 7197 !E51 !E512 !ECAT !GCAT !GDIP Australia's Prime Minister Dean Brown will visit Greece on Friday on a business mission, joined by cabinet officials and businessmen, the Thessaloniki Chamber of Commerce and Industry said on Monday. Brown will have business meetings and speak on business opportunities and incentives in south Australia, the chamber said. --George Georgiopoulos, Athens Newsroom +301 3311812-4 7198 !GCAT !GPOL Greek conservative New Democracy party fired Joseph Glick, an American advisor to the campaign, for referring to its leader Miltadis Evert in unfavourable terms in an interview to Sunday's Ethnos, said daily Ethnos. New Democracy officials said they could not confirm the information. "I do not know about it," a party official at the party's press office told Reuters. "I do not know anybody else who could help you on this now or later." Sunday's Ethnos quoted Glick as saying: "He (Evert) has no clear cut point. Contrary to Simitis, his image is confusing, hazy." "Greeks cannot be sure what Mr. Evert stands for," he told Ethnos. Evert accused Premier Simitis on Sunday for applying monetarist policies and being close to neo-liberalism. Evert was running the risk of isolating the pro-market, neo-liberal wing of his party, analyst said. --Dimitris Kontogiannis, Athens Newsroom +301 3311812-4 7199 !GCAT !GCRIM !GDIP Hussein Aideed, the new president of Somalia's self-proclaimed government, said in an interview broadcast on Monday that an Australian pilot jailed for 25 years for a forced landing in Somalia might be freed this month. Justin Fraser was forced to land at an airstrip in May in the western Somali town of Huddur held by Aideed's militia forces when the plane he was flying had engine trouble. Aideed, 31, who took over as head of the government when his father Mohamed Farah Aideed died on August 1, spoke about Fraser in an interview with the BBC in his south Mogadishu stronghold. Asked whether he might release the Australian as a gesture of goodwill, California-educated Aideed replied: "Definitely... as you know it was something that happened before I took over the administration, so when it comes I will review and I don't see a problem with that." Pressed again to say whether the pilot might be freed, Aideed said: "Yes, I think so." He agreed when the interviewer, the BBC's foreign editor, asked whether Fraser could be released within a week or two. "Within that time, you could say," Aideed said. Fraser was charged with violating the Aideed faction's air-space and was put on trial in the southwestern town of Baidoa, found guilty and sentenced to 25 years in jail and a fine of $485,000. Officials said Fraser was jailed in Baidoa, which Aideed's forces seized when they thrust out of Mogadishu last September. Australia said in June Fraser was seriously sick after languishing in militia jails. Fraser's plane was loaded with qat, the leaves and bark of a bush which when chewed acts as a mild stimulant. It is flown in as part of a multi-million dollar business from Kenya and Ethiopia and chewed daily by Somalis. 7200 !C42 !CCAT !E12 !E41 !ECAT !G15 !G151 !G154 !GCAT !GJOB A senior City of London official has added his voice to recent warnings of job losses in the capital's financial heartland if Britain does not join France and Germany in a single European currency. "It's only just coming through the realisation that the French and Germans are determined to see this through by the end of the decade, that Britain could well be out of the process and therefore there is a potential threat to jobs in the city," Michael Cassidy of the Corporation of London told the BBC. Earlier on Monday a report by an independent think tank said Britain's lack of preparation for the single European currency could cost up to 20,000 jobs in industry and the City of London's financial district. But Howard Davies, deputy governor of the Bank of England, said the City of London's fundamental strengths remained. "There will inevitably be a difference between in countries and out countries (of monetary union) but we don't yet know which category we shall be in," Davies said on BBC radio. "The difference will be primarily in the retail market. People will not be doing their day-to-day transactions in Euros," he said, adding he believed London would be a major player in the Euro. "I believe London's strength - and London is hugely dominant particularly in foreign exchange - will remain and will not be damaged by the EMU decision," he said. He said the single currency would not begin in wholesale markets where capital transactions are carried out until January 1, 1999. And Euro notes or coins would not be in circulation until 2002. British media reports said Bank of England governor Eddie George would fight restrictions on banks operating in countries outside a future single European currency during negotiations with German and French banking officials at a meeting of the European Monetary Institute in Frankfurt on Tuesday. 7201 !GCAT !GDIS Fifty-four crew members were rescued and one was killed on Monday after fire broke out on a cargo ship carrying livestock from Australia to the Jordanian port of Aqaba, Lloyds shipping service said. Lloyds, quoting a radio report from Stavanger in Norway, said the ship's engineer fell overboard and was lost as the crew abandoned ship in the Indian Ocean near the Tanzanian coast. The blaze, aboard the 14,990 ton Uniceb, had begun in the engine room and spread to the crew accommodation. The 22 Filipinos, 17 Chileans and 15 Indians were picked up by another cargo ship. None was injured. Lloyds said the Uniceb, owned by Lugano-based Sistrin Services, was now unmanned and adrift in the Indian Ocean and constituted a danger to navigation. It did not identify the livestock cargo or mention the fate of the animals. Australia exports a large number of sheep to the Middle East. 7202 !GCAT !GODD !GPRO Princess Diana had to dip into her reported 17 million pound ($26.6 million) divorce settlement to pay in cash for two lipsticks when her credit card was rejected at her favourite store, the Sun newspaper reported on Tuesday. The tabloid said Diana, whose divorce from heir to the throne Prince Charles became final last week, looked furious as her store card was turned down twice for the 24 pound payment. Her spokesman told the paper that Diana's card had expired and blamed the shop, up-market Harvey Nicholls in London's Knightsbridge district, for being to slow to send her a new one. 7203 !GCAT Following are some of the major events which occurred on September 9 in history. 1087 - Norman King William I, known as "William the Conqueror", died. After a victory over King Harold at the Battle of Hastings in southern England 1066, William became king of England. He was also instigator of the Domesday book, first exhaustive survey of England. 1513 - Forces of James IV of Scotland battled English troops in Flodden near Branxton, in the English county of Northumberland. The Scots were heavily defeated and James IV was killed along with all his nobles. 1585 - Armand-Jean Du Plessis, Cardinal et Duc de Richelieu born. French statesman, he became chief minister to Louis XIII (1629) and virtual ruler of France. He built up the power of the French crown. 1737 - Luigi Galvani born. Italian physicist and physician who established bioelectric forces exist within living tissue. 1754 - William Bligh, British captain of HMS Bounty who was cast adrift by a mutinous crew, born. 1828 - Leo (Lev) Nikolayevich Tolstoy born. Russian author famous for his novels "War and Peace" and "Anna Karenina". In his later years he became a social thinker and reformer. 1850 - California entered the Union as the 31st U.S. state. 1901 - Henri de Toulouse-Lautrec died. French painter and lithographer, he recorded and drew with great insight characters from Parisian cabaret and nightlife. 1914 - In World War One, the chief of the German general staff Helmuth von Moltke called off the German advance after the British and French counter-attacked, thus ending the first Battle of the Marne. German casualties were estimated at 800,000. 1943 - In World War Two, Allied forces under U.S. Lieutenant General Mark Clark made amphibious landings at the Salerno beachhead. The port of Naples was their ultimate target. 1948 - After the withdrawal of Soviet forces from North Korea, the Democratic People's Republic of Korea was proclaimed with Pyongyang as its capital. 1976 - Chairman Mao Zedong, Chinese revolutionary soldier and statesman, died. He proclaimed the People's Republic of China in 1949 in Beijing. His ideas were set out most famously in the "Little Red Book". 1990 - Presidents George Bush of the United States and Mikhail Gorbachev of the Soviet Union ended a summit in Helsinki, pledging unity in their "struggle against Iraqi aggression". The summit occurred shortly after Iraq's invasion of Kuwait. 1990 - In Liberia, President Samuel Doe was captured by a rebel group led by Prince Yormie Johnson who then declared himself in charge of the country. 1991 - The Soviet Central Asian republic of Tajikistan declared independence from Moscow. 1993 - Arch foes Israel and the Palestine Liberation Organisation agreed to recognise each other, clearing the way for an end to the century-old conflict between Arabs and Jews. 7204 !GCAT !GHEA !GSCI British researchers said on Monday that a gene linked to breast cancer could also be connected to a common form of leukaemia. Doctors at the Institute of Cancer Research in London found that a chromosome on the second gene associated with inherited breast cancer, BRCA2, is missing in patients with Chronic Lymphocytic Leukaemia (CLL). "This could be a very important finding," Professor Daniel Catovsky, head of the Institute's department of haematology, told Reuters. He found that the chromosome is missing in 80 percent of patients with CLL, the most common form of leukaemia among people over 50 years old which affects about 1,000 people each year in Britain. "It could initiate a new stage in our research into chronic lymphocytic leukaemia and related diseases" Catovsky added. 7205 !GCAT !GODD Archaeologists on Monday discovered a mediaeval casket which they believe contains the embalmed heart of Robert the Bruce, the king who secured Scotland's independence from England In a two-hour operation, two experts drilled through a modern lead casket found last week during excavations at Melrose Abbey in the Scottish Borders. Inside was an ancient cone-shaped casket believed to contain Bruce's heart. King Robert I of Scotland, with only 6,000 soldiers and 500 horse, routed English King Edward II and his army of 20,000 at Bannockburn in 1314. The two-day battle forced England to drop its claim to Scotland, though peace was not signed until The Bruce was near death 14 years later. Legend has it that his doggedness was inspired by watching a spider weave its web as he sat in a cave. The ancient inner casket was discovered in 1921 at the abbey and found to contain an embalmed heart thought to have belonged to The Bruce, who wanted to be buried there. It was later reburied and its exact location was not known until last week. Monday's operation was carried out by experts from the government body Historic Scotland at a laboratory in Edinburgh. Doreen Grove of Historic Scotland said: "It is definitely what we are looking for and it looks as if we will be able to take it out of the outer container. It looks strong enough." The inner casket would not be opened because that was done in 1921 and there was no reason to repeat the operation. Experts could not be certain it contained The Bruce's heart, but his was the only heart known to have been buried at Melrose. Historic Scotland intends to return the casket to Melrose Abbey and mark the site with a memorial. Bruce's dying wish was that his heart should be taken to Jerusalem on a crusade against the Saracens. He was buried in Dunfermline Abbey and his trusted companion Sir James Douglas set off with the embalmed heart in a lead casket. Douglas was killed fighting the Moors in Spain and the heart brought home to be buried at Melrose. 7206 !GCAT !GSPO (Compiled for Reuters by Media Monitors) THE AUSTRALIAN Rugby league veteran Andrew Leeds is poised to leave Wests and return to Parramatta - the club which did not want to keep him five years ago. Leeds will leave as early as next season, meaning that if he does not overcome injury he has already played his last game for the Maggies. Page 18. -- The Illawarra Hawks basketball club's future in the National Basketball League is in doubt following the NBL's decision to switch to summer in 1998. The Hawks' home-court is not air-conditioned and will not be considered suitable for NBL matches. Page 16. -- Brisbane Turf Club plans to convert its premier sprint, the A$500,000 Doomben 10,000 (1350 metres), to a weight-for-age race next May. BTC chief executive Roy Beckerman says the move will place the race on the international map. Page 16. -- THE SYDNEY MORNING HERALD Multi-millionaire Joe Gutnick has found a tax loophole which will not only boost the funds of the Melbourne Demons AFL club but will surely save the many Australian Rugby League clubs on the verge of financial ruin. Page 42. -- Australian Rugby League chief executive John Quayle has slammed Canberra over the Raiders' decision not to send a representative to tonight's Rothmans Medal presentation. Among the runners for the best and fairest award, Laurie Daley claims it will detract from finals preparations. Page 42. -- Michael Doohan is only 19 points away from a third successive 500cc world motorcycle championship following a victory in Imola, Italy, which he dedicated to Italy's grand prix medical officer, Claudio Costa. Page 40. -- THE AGE Carlton full-back Stephan Silvagni was the surprise choice in the AFL's team of the century last night. Beating a host of big names to the key defensive post, Silvagni was the only present player to be named in the starting line-up of all-time greats. Pae C12. -- The domination of overseas horses in the Melbourne Cup weights released yesterday has played into the hands of champion trainer Lee Freedman, who is now considering preparing last year's winner Doriemus for another Cup campaign, rather than follow a weight-for-age program this spring. Page C11. -- Australia has hauled itself back among track cycling's elite with its performance at the world championships, finishing with seven medals, two of which were gold. The performance was a vast improvement on the Olympic tragedy. Page C11. -- HERALD SUN Garry Ablett apologised to team-mates for being late to training on Sunday, but is still in doubt for the Cats' clash with North Melbourne this week, according to coach Garry Ayres, who refused to guarantee Ablett a start in the qualifying final at the Mlbourne Cricket Ground. Page 80. -- European trainers last night blasted handicapper James Bowler over his ratings for this year's Melbourne Cup. Dermot Weld among the foreign trainers, was shocked to see Vintage Crop, a 10 year-old with 58kgs, was asked to give 1.5kgs to last season's Horse-of-the-Year Octagonal. Page 78. -- Olyroo and Melbourne Knight Danny Tiatto has switched to talks with a Swiss first division soccer club after pulling out of proposed trials in Italy with second division club Genoa. The Knights will ask for a A$500,000 release fee for the young star. Page 71. -- THE DAILY TELEGRAPH A passionate defence by trainer and racing personality Gai Waterhouse has saved champion jockey Shane Dye's million-dollar spring carnival. After accusing the tribunal of bias in an extraordinary outburst, Waterhouse had charges for alleged riding offence on Iron Horse dropped. Page 1. -- Sydney's emergence as an AFL superpower was rubber stamped last night with the naming of the AFL All-Australian team of the year. Brownlow Medallist Paul Kelly is captain with all key positions filled by Swans. Page 64. -- Mark Philippoussis has dispatched a warning to incumbent world leader Pete Sampras, declaring he is capable of blasting the defending US Tennis Open champion out of the tournament. The "Scud" has served 78 aces in only three matches in the tournament. Page 60. -- Reuters Sydney Newsroom 61-2 9373-1800 7207 !GCAT !GSPO Shell import Ken Redfield led his team to a 85-77 victory against Alaska Milk in the third game of the Philippine Basketball Association second conference finals on Sunday. Redfield scored 35 points, including a three-point shot in the last minute of the game to end Alaska's hopes for a win. The teams battled ferociously in the first three quarters, but Shell overpowered Alaska players who tied the series last Sunday by subduing Redfield. "I didn't even have to tell him what to do. He knows what our game plan is. That's Ken Redfield for you," Shell coach Chito Narvasa said after the game. The fourth game in the best-of-seven series is scheduled for Tuesday. 7208 !GCAT !GSPO Result of the third game on Sunday in the finals of the Philippine Basketball Association second conference, which includes one American import for each team: Formula Shell beat Alaska Milk 85-77 (44-39) 7209 !GCAT !GSPO Fourteen-man Wexford bridged a 28-year gap since the county last won an All-Ireland senior hurling final when they beat Limerick on a scoreline of 1-13 to 0-14 at Croke Park on Sunday. Wexford had forward Eamonn Scallan sent off in the 33rd minute of the first half for a dangerous pull with his hurley across the body of Limerick defender Stephen McDonagh. But Limerick, who used defender David Clarke as their extra-man for the duration of the second-half, failed to make the most of their numerical advantage. Wexford faced an uphill struggle as they led by a single point, 1-08 to 0-10, at the interval. But in the second-half Wexford played as though they were the team with the extra-man. Their defenders hunted for the ball in packs and their forwards covered acres of ground to put the Limerick defenders under pressure. Wexford made sure of victory over the opening 20 minutes of the second-half when they recorded five points, against two points for Limerick, to leave the scoreline at 1-13 to 0-12. Limerick substitute forward Brian Tobin did have the ball in the Wexford net in the 56th minute. But referee Pat Horan from Offaly disallowed the score and instead awarded a free to Wexford for an earlier foul. Defenders David Clarke and Ciaran Carey, the team captain, did score a point apiece inside the final four minutes to cut Wexford's lead to two points but Limerick did not have anyone on the field who was capable of turning the game. On another day Gary Kirby, Limerick's top scorer in recent seasons, might have been the player to snatch a dramatic late winning goal but this was not to be his day. Kirby picked up a nasty hand injury in an accidental collision after just seven minutes and that proved decisive. While he struggled to even grip his hurley for the remaining 63 minutes of the match, Limerick found themselves without a ball-winner and play-maker up front. The point that Kirby scored from a free inside a minute of having picked up the injury was his only score of the final. Wing-forward Barry Foley did his best to lift Limerick as he scored four points in the first-half but he was eventually substituted in the 64th minute. In forwards Garry Laffan and Tom Dempsey, Wexford had two players who were capable of winning possession and getting crucial scores. Wexford's goal came in the 19th minute when Dempsey ran on to a loose ball 10-yards out from the Limerick goal and hit a shot low to goalkeeper Joe Quaid's right. That score put Wexford 1-03 to 0-05 ahead and proved a huge psychological blow to Limerick who had led by four points after 14 minutes. Limerick, who had led Offaly by five points with as many minutes remaining before they were beaten in the 1994 All-Ireland final, last won the title in 1973. WEXFORD: 1-Damien Fitzhenry; 2-Colm Kehoe, 3-Ger Cushe, 4-John O'Connor (0-1); 5-Rod Guiney (replaced by Paul Finn, 69th minute), 6 - Liam Dunne, 7-Larry O'Gorman (0-2); 8-Adrian Fenlon, 9 - George O'Connor; 10-Rory McCarthy, 11-Martin Storey (0-2), 12-Larry Murphy (0-1)(replaced by Billy Byrne, 65th); 13-Eamonn Scallan (0-1), 14-Garry Laffan (0-3)(replaced by Paul Codd, 72nd), 15-Tom Dempsey (1-3). LIMERICK: 1-Joe Quaid; 2-Stephen McDonagh, 3 - Michael Nash, 4-Declan Nash; 5-David Clarke (0-1), 6-Ciaran Carey (0-3), 7 - Mark Foley; 8-Michael Houlihan, 9 - Sean O'Neill; 10-Frankie Carroll (0-1), 11-Gary Kirby (0-2), 12-Barry Foley (0-4)(replaced by Turlough Herbert, 64th); 13-Owen O'Neill (0-1)(replaced by Padraig Tobin, 48th), 14-Damien Quigley (0-1), 15-T.J. Ryan (0-1)(replaced by Brian Tobin, 55th). -- Dublin Newsroom + 6603377 7210 !GCAT !GPOL CONGO GOVERNMENT LIST (960902) *********************************************************** * 2 Sep 96 - New prime minister Charles David Ganao named* * an expanded government to run the country * * until presidential elections next year. * * It has 39 members and many members of the * * old government retain their portfolios. * *********************************************************** President (sworn in 31 Aug 92)................ Pascal LISSOUBA - - - - - - - Prime Minister (apptd 27 Aug 96)..........Charles David GANAO - - - - - - - OUTGOING GOVERNMENT: (Formed 23 Jan 95, resigned 24 Aug 96) Prime Minister (apptd 23 June 93)........... Jacques Joachim YHOMBI-OPANGO - - - - - - - MINISTERS OF STATE: Administrative & Economic Decentralisation...... . Martin MBERI Interior, Security & Urban Development.....Philippe BIKINKITA - - - - - - - MINISTERS: Agriculture, Livestock, Water & Forestry, Fisheries.......................... Prosper KOYO Communication & Govt Spokeswoman...... Albertine Lipou MASSALA Culture......................................Gabriel MATSIONA Defence.......................Maurice Stephane BONGHO-NOUARRA Development, Mines & Energy, Post & Telecommunications..............Jean ITADI Economy & Finance....................Nguila MOUNGOUNGA-NKOMBO Education & Scientific Research & Technology.............Martial de Paul IKOUNGA Equipment & Public Works....................Lambert NGALIBALI Foreign affairs.........................Arsene TSATY-MBOUNGOU Health & Social Affairs.......................... Jean MOUYABI Justice, Administrative Reform................ . Joseph OUABARI Labour, Civil Service, Social Security...... Anaclet TSOMAMBET Oil......................................... . Benoit KOUKEBENE Trade, Small & Medium-Sized Businesses...... Marius MOUAMBENGA Transport & Civil Aviation....................Seraphin GOMPET Women's Integration in Development......Marie-Therese AVEMEKA Youth & Sports...............General Claude Emmanuel ETA-ONKA - - - - - - - National Assembly Speaker.......................Andre MILONGO - - - - - - - Central Bank Governor....................Jean-Felix MAMALEPOT (Central bank of Central African States) Central Bank Director.......................... Gabriel BOKILO - - - - - - - NOTE: Any comments/queries on the content of this government list, please contact the Reuter Editorial Reference Unit, London, on (171) 542 7968. (End Government List) 7211 !GCAT !GPOL ROMANIA GOVERNMENT LIST (960902) ************************************************************* * 3 Nov 96 - Parliamentary & presidential elections. * ************************************************************* - - - - - - President (Sworn in 30 Oct 1992 for four-year term)............................Ion ILIESCU Economic Adviser to President..................Misu NEGRITOIU - - - - - - PARTY OF SOCIAL DEMOCRACY OF ROMANIA (PDSR)-LED GOVERNMENT (Sworn in 20 Nov 92, reshuffled 23 Aug 96) Prime Minister (Appointed 4 Nov 1992)........Nicolae VACAROIU - - - - - - MINISTERS OF STATE: Economic Reform..................................Mircea COSEA Finance......................................Florin GEORGESCU Foreign Affairs.......................Teodor Viorel MELESCANU Labour & Social Security...................Dan Mircea POPESCU - - - - - - MINISTERS: Agriculture & Food Industry..................Valeriu TABARA** (** Sacked 2 Sept 96) Communications.......................... Ovidiu Ioan MUNTEAN** (** Sacked 2 Sept 96) Culture......................................... . Grigore ZANC Defence........................................Gheorghe TINCA Education......................................... Liviu MAIOR Environment, Forestry & Water........... Aurel Constantin ILIE Health......................................... Daniela BARTOS Industry...................................Alexandru STANESCU Interior...................................Doru Ioan TARACILA Justice.............................Iosif Gavril CHIUZBAIAN** (** Sacked 2 Sept 96) Parliamentary Relations.......................... Petre NINOSU Public Works.................................... Marin CRISTEA Research & Technology..................... Doru Dumitru PALADE Tourism.................................... . Matei Agathon DAN Trade........................................Dan Ioan POPESCU Transport......................................... Aurel NOVAC Youth & Sports..............................Alexandru MIRONOV - - - - - - Central Bank Governor.......................... Mugur ISARESCU - - - - - - NOTE: Any comments/queries on the content of this government list, please contact the Reuter Editorial Reference Unit, London, on (171) 542 7968. (End Government List) 7212 !GCAT !GDIP The U.N. refugee agency suspended operations on Monday in teeming Rwandan refugee camps around the eastern Zairean town of Goma because refugees were boycotting a census. "UNHCR has suspended all operations in the camps for the next seven days except for emergency ones such as water and medical supplies," said Paul Stromberg, spokesman for the U.N. High Commissioner for Refugees (UNHCR). Stromberg blamed the suspension on a refusal by the more than 700,000 refugees to respond to a census ordered by UNHCR in camps around Goma that was supposed to have started on Sunday. "We want to show them that we intend to continue with this programme (census)," Stromberg told Reuters. He had earlier told Reuters the census would resume on Tuesday. Stromberg said refugees boycotted the census on Sunday after rumours swept camps: "Some of the refugees said the ink used for registration would sterilise them and kill them in five years time." Aid workers said the Hutu refugees also feared census takers would mark them with ink so they could be detected by Rwandan government troops of the Tutsi-led army and mistreated if they were forced into Rwanda. Many of the estimated 1.1 million Rwandan Hutu refugees in Zaire and nearly 600,000 in Tanzania refuse to go home for fear of reprisals for Rwanda's 1994 genocide of up to a million people. "We are not stopping this verification programme which has been planned for two weeks. What happened yesterday was that due to numerous rumours very few people turned up for the process, amounting to a boycott," Stromberg said. "We have not stopped the exercise and we'll be carrying on tomorrow." Aid workers said the UNHCR suspended the census of an estimated 727,000 refugees in five camps around the Zairean border town of Goma after a few hours. They said UNHCR officials had been shocked by the boycott, having been told by refugee leaders they would cooperate. The UNHCR estimates there are up to 1.1 million Rwandan Hutu refugees in camps in Goma and another eastern town, Bukavu. "UNHCR suspended the census operation at 1 a.m. on Sunday and have also suspended all services to the camps except for emergency medical services and water," said an aid worker. "There was a general boycott of the census by the refugee population and now there is a standoff with refugees refusing to be counted and UNHCR trying to work out what to do," she said. Aid workers say many refugees are being intimidated against returning by former members of the Rwandan army and Hutu militias who took part in the genocide and face detention if they go home. Only about 100 refugees a week are returning voluntarily to Rwanda in contrast to the 600 babies born in the camps weekly. Zairean Prime Minister Kengo wa Dondo said after visiting Rwanda last month that the Zairean and Rwandan governments agreed on a big repatriation of the Rwandan refugees in eastern Zaire. 7213 !GCAT !GDIP Iranian President Akbar Hashemi Rafsanjani began an African tour in Kenya on Monday hoping to cement ties in the face of U.S. sanctions against the Islamic republic. American displeasure over the bridge-building trip was immediately evident when U.S. diplomats in Nairobi boycotted the official airport welcome for Rafsanjani. "We don't have relations with Iran so we saw no reason to be there," a U.S. diplomat told Reuters. The diplomat, who declined to be quoted by name, denied that the U.S. had put pressure on Kenyan President Daniel arap Moi to cancel the state visit. But he added: "We have expressed our hope that this visit does not lead to improved relations between Kenya and Iran." After leaving Kenya on Thursday, Rafsanjani will visit Uganda, South Africa, Zimbabwe, Tanzania and Sudan, his spokesman in Tehran announced. The tour comes less than a month after U.S. President Bill Clinton tightened sanctions against Iran, which Washington accuses of sponsoring terrorism, a charge Iran denies. The law penalises non-U.S. firms that invest $40 million or more a year in the oil and gas sectors of Iran or Libya. "The Iranians have come to Africa in search of support to try to break their isolation," a European diplomat commented. A Western diplomatic source said Namibia decided last week not to be included on Rafsanjani's itinerary. Iran has steadily stepped up its diplomatic presence in Africa and tried to boost cultural and religious links with Moslems on the continent. With the exception of Sudan none of the countries Rafsanjani is visiting has a Moslem majority and in most of them Christianity is the main religion. Pro-western Kenya, which has close military links with the United States and Britain, has banned a Moslem fundamentalist party centred on its Indian Ocean coast. "The visit is to improve our relations and seek ways to better trade and the things common between us," Kenyan Foreign Minister Kalonzo Musyoka told reporters at the airport. After talks with Moi, a visit to parliament and a state banquet on Monday night, Rafsanjani was due in the port city of Mombasa on Tuesday to inspect the harbour and an oil refinery. South Africa has historically relied on Iranian crude oil and Kenya switched some of its oil imports from Saudi Arabia to Iran after Moi's visit to Tehran in 1995. The official Iranian news agency IRNA said Rafsanjani told reporters at Tehran airport before leaving on Monday that "Iran in its foreign policy gives top priority to expansion of ties with African countries." "Expansion of political, economic, cultural, educational and technical cooperation will be discussed during the visits," he added. "Iran intends to establish air links with African countries and expand banking cooperation with them." 7214 !E51 !E512 !ECAT !GCAT !GDIP Iranian President Akbar Hashemi Rafsanjani and Kenya's president held talks on expanding ties on Monday in the face of U.S. sanctions to isolate the Islamic republic. Asked by reporters after a first round of talks with Kenyan President Daniel arap Moi about northern Iraq, Rafsanjani said: "Conditions are not good and it has raised some serious concern. "We do hope there will be tranquility prevailing there." State-run Iranian television blamed Tehran's declared enemy the United States for fighting in northern Iraq since Saturday and denied Iran was backing either of the rival Kurdish groups. The Iraqi-backed Kurdistan Democratic Party said on Saturday Iranian troops had entered Kurdish-controlled northern Iraq. Kenyan officials said Monday's meeting between Moi and Rafsanjani at State House, Nairobi, centred on expanding ties. Rafsanjani visited the Kenyan parliament before a state dinner in his honour to end the first day of his four-day visit. On arrival in Nairobi's international airport, the smiling Iranian president left his plane to the beat of African drums and inspected an honour guard before driving to the presidency. Security was unusually tight. Kenyan Foreign Minister Kalonzo Musyoka told journalists at the airport the visit would cement close bilateral ties between the countries and enhance trade. "The visit is to improve our relations and seek ways to better trade and the things common between us," he said. The official Iranian news agency IRNA said Rafsanjani told reporters at Tehran airport before leaving on Monday that "Iran in its foreign policy gives top priority to expansion of ties with African countries." "Expansion of political, economic, cultural, educational and technical cooperation will be discussed during the visits," he added. "Iran intends to establish air links with African countries and expand banking cooperation with them." IRNA quoted Rafsanjani as saying he would discuss international developments during his talks in Uganda, South Africa, Zimbabwe, Tanzania and Sudan over a 12-day period. Rafsanjani's tour comes less than a month after U.S. President Bill Clinton tightened sanctions against Iran, which Washington accuses of sponsoring terrorism, a charge Iran denies. The law penalises non-U.S. firms that invest $40 million or more a year in the oil and gas sectors of Iran or Libya. It was Rafsanjani's first visit to Kenya, East Africa's economic powerhouse. Nairobi has also given facilities to the U.S. military for operations in the region since the 1980s. The Kenyan government has banned a Moslem fundamentalist party centred on its Indian Ocean coast and last year refused to issue its leader a new passport, stranding him in Germany. Moi visited Iran in 1995. This trip led to improved ties between the two countries and resulted in Kenya switching some of its oil orders to Iran from Saudi Arabia. Officials said Rafsanjani would visit the Kenyan port city of Mombasa and inspect the harbour and an oil refinery. Iran is eyeing African countries for oil and non-oil exports and has signed trade deals with several of them and exhibited products in Kenya and South Africa. Analysts in Cape Town said righting trade imbalances caused by South Africa's historical reliance on Iranian crude oil would probably dominate Rafsanjani's visit there. 7215 !GCAT !GDIP !GPOL A census of Rwandan refugees in Zaire will resume on Tuesday after camp inmates boycotted the exercise, fearing that indelible ink used by census takers would sterilise and poison them, the U.N. refugee agency said. Many of the estimated 1.1 million Rwandan Hutu refugees in Zaire and nearly 600,000 in Tanzania refuse to go home for fear of reprisals for Rwanda's 1994 genocide of up to a million people. Paul Stromberg, spokesman for the U.N. High Commissioner for Refugees (UNHCR) in Rwanda, told Reuters on Monday that refugees boycotted the census on Sunday after rumours swept camps. "Some of the refugees said the ink used for registration would sterilise them and kill them in five years time," he said. Aid workers said the Hutu refugees also feared census takers would mark them with ink so they could be detected by Rwandan government troops of the Tutsi-led army and mistreated if they were forced into Rwanda. "We are not stopping this verification programme which has been planned for two weeks. What happened yesterday was that due to numerous rumours very few people turned up for the process, amounting to a boycott," Stromberg said. "We have not stopped the exercise and we'll be carrying on tomorrow." Aid workers said the UNHCR suspended the census of an estimated 727,000 refugees who live in five camps around the Zairean border town of Goma after a few hours when most refused to cooperate. They said UNHCR officials had been shocked by the boycott, having been told by refugee leaders that they would cooperate. The UNHCR estimates there are up to 1.1 million Rwandan Hutu refugees in camps in Goma and another eastern town, Bukavu. "UNHCR suspended the census operation at 1 a.m. on Sunday and have also suspended all services to the camps except for emergency medical services and water," said an aid worker. "There was a general boycott of the census by the refugee population and now there is a standoff with refugees refusing to be counted and UNHCR trying to work out what to do," she said. Aid workers said refugees on Saturday night destroyed two sites where the census was to be taken in Katale camp and stole plastic sheeting in Mugunga camp. "Leaders led UNHCR to believe the census would work. The motive for their opposition is political," an aid worker said. Aid workers say many refugees are being intimidated against returning by former members of the Rwandan army and Hutu militias who took part in the genocide and face detention if they go home. A Rwandan refugee lobby group, the Rally for the Return of Refugees and Democracy in Rwanda (RDR), urged the UNHCR on Saturday to avoid any "policing approach" during the census and to calm refugees by explaining the aims of the operation. The UNHCR said the census was not directed against anyone and was aimed at establishing how many refugees were in the area so aid could be better directed in the face of a shortage of donor funding. Only about 100 refugees a week are returning voluntarily to Rwanda in contrast to the 600 babies born in the camps weekly. Zairean Prime Minister Kengo wa Dondo said after visiting Rwanda last month that the Zairean and Rwandan governments agreed on a big repatriation of the Rwandan refugees in eastern Zaire. 7216 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Nigerian conglomerate UTC is to get rid of 1,000 workers as part of a restructuring program, national news agency reported Monday. News Agency of Nigeria said workers affected would be mainly those who have been with the company for more than 25 years and those with poor medical records. Workers without qualifications for the company's new focus on farming, food processing and light manuafacturing would also lose their jobs, it said. UTC currently has around 3,000 employees. Last month UTC announced a fall in first half after-tax profits to 27.0 million naira from 34.4 million naira in 1995. ($1=80 naira) -- Lagos newsroom +234 1 2630317 7217 !GCAT !GHEA Cholera has killed eight people in poor districts of Togo's capital Lome, the head of its epidemiology division said on Monday. Doctor Aleki Kodjo told reporters that the outbreak, which began in August and coincides with the rainy season, had caused 23 confirmed cases. A further 51 patients showed symptoms of the disease, which flourishes in conditions of poor hygiene. Kodjo said 512 cases of cholera had been recorded nationwide since January, of whom 23 people had died. 7218 !GCAT !GDIP !GVIO The U.N. Human Rights Office in Rwanda said on Monday up to 111 people, mainly civilians, were killed in August in operations by the Tutsi-dominated army against Hutu rebels in the northwest of the country. A situation report compiled by the agency and released on Monday said the incidents in the town of Ruhengeri took place between August 6 and 8. It said the army also arrested 300 male residents of Ruhengeri of whom 52 subsequently disappeared. "Between 6th and the 8th of August 111 people were killed during the course of military cordon and search operations in five communes in Ruhengeri by the RPA (Rwanda Patriotic Army). "Some of those killed were former members of the Rwandan government forces, former members of the militia and infiltrators from Zaire," the report said. "As of August 28 52 people were missing after these operations. Many of those killed were unarmed civilians," the report added. Last month, the U.N. rights office reported a large rise in killings by "state agents" in Rwanda as the number of prisoners reached nearly 80,000. The U.N. Human Rights Field Operation in Rwanda said in July it received reports of killings of 365 people in 93 incidents, "a very significant increase compared with...other months". "Of these, 220 occurred in Gisenyi prefecture, which has seen a marked rise in insurgency activity by infiltrators opposed to the government," said the monitors' monthly report. It said anti-rebel operations by the government Rwanda Patriotic Army (RPA) accounted for 182 of the killings in July. The Rwandan army says it is fighting Hutu rebels infiltrating from neighbouring Zaire. Human rights groups accuse the army and rebels of killing civilians in reprisal attacks. Up to a million members of the Tutsi minority and allied Hutus were killed in genocide in Rwanda in 1994 by Hutu troops, militiamen and mobs. The rebels infiltrating into border regions of Rwanda are mostly former troops who fled to Zaire in 1994. The U.N. human rights report said after an operation on July 9 and 10 it received names of 113 local people reported killed and 58 reported disappeared in two communes in Gisenyi and Ruhengeri prefectures. Rwandan troops arrest anyone suspected of involvement in the genocide of up to one million Tutsis and Hutu moderates and prisons have been filling since the end of the genocide in 1994. The London-based human rights group Amnesty International said last month reprisal killings by Rwandan troops and rebels of civilians including women and children were rising in Rwanda. 7219 !GCAT !GPOL Congo's new prime minister, Charles David Ganao, named an expanded government on Monday to run the country until presidential elections next year. The new government, announced in a statement, has 39 members against 26 in the previous administration and the number of opposition ministers rises from four to five. It includes a new face at the defence ministry -- General Francois Ayayen, interior minister in the 1991-1992 democratic transition -- but many ministers retain their portfolios. These include the ministers of the interior, oil, economy and finance, energy and foreign affairs. President Pascal Lissouba, elected in 1992 during the transition to democraacy in the Central African oil-producing nation, named Ganao as prime minister on August 27. Ganao, 68, was foreign minister in the 1970s under the Marxist-Leninist rule of President Marien Ngouabi. Lissouba appointed outgoing prime minister Jacques Joachim Yhombi-Opango as head of his Presidential Movement and as his campaign manager for next year's elections. Congo, impoverished despite its oil, signed a three-year programme with the International Monetary Fund in June. The Paris Club of official creditors agreed in July to write off part of its foreign debt, which previously topped $5 billion. Disputed parliamentary elections in May and June 1993 were followed by urban warfare between tribal militias in the capital Brazzaville. At least 2,000 people are thought to have died before a truce in January 1994 halted the worst of the fighting. Opposition leaders and Lissouba supporters signed a peace pact last December agreeing to disarm their militias. 7220 !GCAT !GPOL !GVOTE Niger's opposition parties, angered and alienated by military leader Ibrahim Bare Mainassara's July election as president, have spelled out conditions for taking part in November parliamentary elections. Spokesmen from various opposition parties said in interviews over the weekend on private local radio stations that their participation in the November 10 poll depended in part on ending a ban on demonstrations and on access to state media. The spokesmen, whose leaders were placed under house arrest after the presidential election, have welcomed creation of a new electoral commission but some doubted its impartiality. Hama Amadou, prime minister when Mainassara seized power in January, said the commission was "a snare and a delusion" if there was no guarantee "that security forces will not once again seize the ballot boxes as they did on July 8". Hama is secretary-general of the National Movement for a Development Society (MNSD), Niger's former single party, whose leader Tandja Mamadou was one of five candidates for president. Spokesmen for two other parties who contested the presidency -- the Democratic and Social Convention (CDS) of Mahamane Ousmane, the civilian president Mainassara toppled, and the Niger Party for Democracy and Socialism of former national assembly speaker Mahamadou Issoufou -- voiced similar doubts. They said the new commission was dominated by state officials, security force members and traditional chiefs. Election conditions listed by the parties included revision of the constitutional chamber of the supreme court, which ratified military leader Mainassara's disputed victory, and neutrality of the administration in electoral matters. The opposition also wants observers from the Organisation of African Unity, the United Nations, the European Union, Canada and the United States to monitor the November poll. Mainassara sacked the independent electoral commission on the second day of voting, accusing it of irregularities and favouring the opposition. He appointed a new body which declared him the winner with 52.22 percent of votes cast. His four civilian opponents spent two weeks under house arrest. The United States described the presidential election as fraudulent and suspended development aid. Mainassara set up a new commission on August 20 but postponed the election from September 22. Government sources said they wanted to give the new commission time to prepare and avoid a repetition of the chaotic presidential poll, during which voting had to be extended to a second day because many areas lacked voters lists and cards. Apart from healing a country traumatised by political bickering and the arbitrary nature of military rule, Mainassara, sworn in on August 7, needs to deal with economic problems. External debt stands at 673 billion CFA ($1.33 billion), the equivalent of 88 percent of Niger's entire earnings for 1994. Mainassara took power in a coup on January 27, ending a paralysing 16-month political standoff between Mahamane and his opponents who held the majority in parliament. A new 83-seat parliament will replace the military National Salvation Council appointed by Mainassara after the coup. 7221 !GCAT !GVIO Political wrangling and dangerous delays in implementation are threatening Angola's fragile peace accord that has ended two decades of civil war, analysts said on Monday. A military timetable to integrate former rebel UNITA generals and thousands of their troops into a single national army with their former foes, as well as the demobilisation of some 60,000 other UNITA men, is far behind schedule. Dates for full demobilisation have been pushed forward three times since the original deadline of July 15, and the start of September rains could turn crowded assembly camps, where UNITA soldiers started disarming since January, into mud baths. "These delays are very dangerous and both sides seem no closer to finding a political solution," a Western diplomat said. "Both President Jose Eduardo dos Santos and UNITA leader Jonas Savimbi want to be president of Angola. They both want to be winners in this process," he said. Confidence in the peace process took a beating last week when a UNITA congress rejected the nomination of Savimbi as vice president in a proposed unity government with the ruling MPLA, which with Cuban backing fought UNITA for two decades. The post had been agreed to in private talks between Savimbi and dos Santos in March this year. A senior African diplomat said the congress had prolonged the uncertainty about the country's future, even though UNITA reaffirmed its commitment to the November 1994 peace plans and its transformation from a rebel movement to a political party. "Savimbi side-stepped vital issues that people need to hear at this stage. They said nothing new. The government is feeling very pessimistic at this stage," he said. Diplomats said dos Santos was growing impatient with UNITA and had expressed concern in a letter to the United Nations Security Council. A western economist said that while both sides were wasting precious time trying to wring concessions out of each other, the government faced a socio-economic time bomb. Many Angolans are struggling to survive below the poverty line, with inflation sky-rocketing by 10,000 percent per year. "Dos Santos' new government has done nothing to change the lives of ordinary people. It has so far failed to implement real economic change. Instead it has deepened bureaucracy, corruption and the illegal black market," he said. The U.N. special envoy to Angola, Alioune Blondin Beye, this week tried to muster confidence in the peace plan, playing down delays after meeting Savimbi last week. "I have answers that I find satisfactory...Next week we will see, for example, changes in quartering," he said, referring to the demobilisation of troops. Beye said he had also held discussions with Savimbi on surrendering weapons and raised concerns about the 10,000 UNITA troops that had deserted assembly camps. He said he had reminded the UNITA leader that the international community, funding the peacekeeping operation at a cost of one million dollars a day, was running out of patience. 7222 !E51 !E512 !ECAT !GCAT !GDIP !GVIO The wife and two children of Burundi's Tutsi military strongman Major Pierre Buyoya flew out of the capital Bujumbura on Monday in defiance of sanctions imposed by African states. Airport security officials said the family flew out of Bujumbura airport at 1130 GMT and headed for the Ugandan city of Entebbe. The sanctions agreed at an African summit in Tanzania on July 31 were imposed in response to the military coup against Burundi's Hutu president on July 25. The measures include severing air, road and water links with Burundi. The sanctions also ban its military leaders and their families from leaving the small, landlocked African nation. "The wife of President Buyoya and two children left at 1330 local time for Entebbe in the presidential aircraft," said a police guard at Bujumbura airport. Presidential spokesman Jean-Luc Ndizeye told Reuters the children of President Buyoya had the right to go anywhere they wanted and added that they were studying abroad. "The children have the right to go wherever they want," Ndizeye added. Ethiopia, Cameroon, Rwanda, Tanzania, Kenya, Uganda, Zaire and Zambia are signatories to the sanctions package aimed at toppling Buyoya's military government and returning the tea and coffee-growing nation to constitutional legality. 7223 !GCAT !GDIP An Eritrean minister denied on Monday that Israel and the United States were giving his country security assistance in a dispute with Yemen over several islands in the Red Sea. "The Arab propaganda is always out to get Israel. It is a country with which we have a normal relationship. We don't need military help," Saleh Meki, the minister for marine resources, told Reuters. In an interview before he left for Paris for the third round of French-led mediation with Yemen, Meki dismissed suggestions in Arab circles that Israel and the U.S. backed mainly Christian Eritrea in the dispute over the Hanish islands. "We have good relationships with both Israel and the U.S., but we have no military relationship with them. Neither have we taken advice from them," Meki said. "We don't want to be used by Israeli and U.S. policies. Yemen is our neighbour, culturally and geographically, not theirs." Eritrea and Yemen fought briefly over the potentially oil- and gas-rich islands last December. At least 12 people were reported killed. After French mediation, the two countries agreed to go to international arbitration to settle the issue and began talks in Paris on May 21. The mediation will resume in Paris on Wednesday. Each country will nominate two arbiters for a tribunal who in turn will select the presiding judge. Once the tribunal is composed it will decide on the two countries' maritime boundaries in the Red Sea and therefore on sovereignty over the Hanish islands. The dispute reared up last month when Yemen accused Eritrea of occupying Lesser Hanish on August 10. Eritrea said it had troops on the island as far back as December but withdrew them on August 27 as a goodwill gesture. Meki said Eritrea would abide by the future tribunal's verdict. He did not deny Yemeni allegations that Eritrea laid mines on Lesser Hanish before withdrawing. "As a ground principle we don't use mines. But we will use any means to defend our lands. And the Yemeni has no business on Lesser Hanish," he said. 7224 !GCAT !GDIP Brazilian President Fernando Henrique Cardoso will be hosted by President Nelson Mandela on his first state visit to South Africa from November 26 to 28, the foreign ministry said on Monday. Brazil is South Africa's biggest trading partner in Latin America with bilateral trade totalling two billion rand ($444 million) in 1995. Brazil is also a leader in tourism from the region to South Africa. "This will be the first visit to South Africa by a Brazilian head of state and will further strengthen the extensive bilateral relations between the two countries," the ministry said in a statement. Brazil's foreign ministry said late last month that the end of apartheid in South Africa and the election of Mandela as the country's first democratic president in 1994 had made possible a "new phase" in relations. ($=4.5 rand) 7225 !GCAT !GCRIM Malawian police arrested former president Kamuzu Banda's two closest associates on Monday on charges of attempted murder and conspiracy to murder, state-run radio reported. Banda's aide John Tembo, who was his heir-apparent as leader of the opposition Malawi Congress Party, and his long-time companion Cecilia Kadzamira were arrested on charges related to the recent shooting of an Asian shopowner, the radio said. A former police officer was also arrested on Monday. The radio bulletin did not say if the trio would be freed on bail or held in police custody. Two days ago, police arrested another three suspects on the same charges. The shopowner was shot and robbed of over $20,000 during the incident. Last year, Banda stood trial with Tembo and Kadzamira on charges of ordering the assassination of four political opponents in 1983 but they were all aquitted by the High Court. Malawi's undisputed ruler for three decades, Banda lost power in the first all-party elections in 1994 to current president Bakili Muluzi. 7226 !GCAT !GVIO Burundi's Tutsi-dominated army said on Monday Hutu rebels killed civilians in heavy fighting in the northwestern province of Kayanza and destroyed government buildings. Stepping up their attacks after a month of sanctions against the Tutsi military which seized power on June 29, the rebels hit Gatara village five km (three miles) south of Kayanza town on Saturday. State-run Burundi radio said all government buildings were destroyed in Gatara, a day before a visit to the region by Burundi's prime minister to explain what the army holds were the reasons for its coup. "The rebels killed people because they were suspected of giving information to the military. That is a fact," army spokesman Lieutenant-Colonel Longin Minani told Reuters. He gave no details. Rebels destroyed government buildings, a bank and a chemist in the attack but left private homes untouched, a witness said. "The rebels said they had finished with Gatara because they had destroyed all the administrative buildings. They said their mission was to do likewise in the rest of the country," he added. Minani said rebels also attacked a military position at Kigazi in the northwestern province of Cibitoke on Monday morning. But he gave no more details. Civilians have paid the heaviest price in Burundi's ehtnic strife which has killed more than 150,000 people in the last three years, fuelling fears of slaughter on a scale similar to Rwanda's 1994 genocide in which up to one million were killed. Burundi's Tutsi military ruler Pierre Buyoya dismissed on Saturday a U.N. Security Council threat of an arms embargo in 60 days, ruling out talks with Hutu rebels unless they laid down their arms. Neighbouring states have cut air and road links with Burundi since July 31 to try to pressure the Tutsi-dominated army to return to constitutional rule and agree to talks with rebels. Thirteen Burundian civil action groups on Monday appealed to Julius Nyerere, the internationally-backed mediator on the Burundi problem, to lighten regional sanctions, saying innocent people were dying because of the blockade, state radio said. Hutu rebels have stepped up their attacks across the north of the country after a month-long lull that followed the coup. The London-based human rights group Amnesty International said last month the army killed 4,050 people in Giheta district in central Burundi in the first three weeks after the coup. Buyoya denied the report. Rebel forces last week increased the isolation of Bujumbura, a Tutsi stronghold, by twice cutting power lines to the city, forcing residents to use dwindling fuel stocks or generators. They have also cut the main road north from Bujumbura to the Rwandan border with a series of ambushes and by digging it up to make it impassable for all vehicles for most of the weekend. Hutu rebels stepped up attacks in Kayanza region last week, operating from their stronghold in nearby Kibira forest, which analysts say is virtually off limits to Burundi's army. Two truck drivers were last week burned alive in their vehicle in one of a series of ambushes by Hutu rebels on the country's main national route one, which runs through Kayanza. 7227 !C42 !CCAT !E41 !ECAT !GCAT !GJOB The majority of workers at Driefontein Consolidated Ltd's east gold mine reported for work on Monday after staying away since last Wednesday, mine managers Gold Fields of South Africa Ltd said. Employees began returning to work on Sunday night, the company said in a statement. "Discussions with employee and union representatives to effect a return to work by those who have not yet done so are continuing," the company said. It gave no further details. At least 17 miners were killed in labour unrest -- sparked by ethnic differences -- at Dries and Gold Fields' Kloof Gold Mining Co last month. Dries produced 11,680.6 kg of gold in the three months to end-June. Kloof produced 9,877.7 kg of gold in the June quarter. -- Johannesburg newsroom, +27-11 482 1003 7228 !GCAT !GPOL South Africa's right-wing white separatists approached the country's black rulers as supplicants on Monday, asking for whites-only schools where they could keep Afrikaner traditions alive. The Conservative Party (CP), which boycotted all-race elections in April 1994, appeared before a parliamentary education committee to ask that new schools legislation be amended to allow for state schools for Afrikaners. CP representative Daan van der Merwe told committee members he could not pretend that children of other races would be welcome in an Afrikaner school. "I want to be frank and I want to look at you when I say: The Afrikaner is white and I want a school for the Afrikaner people ... Just give the Afrikaner his schools, with his ethos, then you will have the Afrikaner off your back." Earlier this year police were deployed at a school in the northern town of Potgietersrus to prevent white parents from barring black children from enrolling. The CP, which has the support of a minority within South Africa's Afrikaner minority, has fought since the early 1980s to block political reforms that it correctly predicted at the time would lead to black majority rule. Van der Merwe said his party had refused to take part in the 1994 elections because it did not acknowledge their legitimacy. But it realised that it would have to deal with the government if it wanted to win concessions for its supporters. "We lost to the English in the Anglo-Boer war, but we continued the struggle. The same is happening now." He said Afrikaners were not being racist in demanding the right to maintain their cultural identity. "In America you have the black caucus, and there's nothing wrong with that. But when a white person tries it, you're a racist." Van der Merwe said the CP and other Afrikaner groups were starting to bury their differences and conditionally supported fresh proposals presented over the weekend for an Afrikaner state or "volkstaat". The Freedom Front, a right-wing party with seats in parliament, unveiled a plan for an Afrikaner territory stretching south of the Orange River in the sparsely-populated Northern Cape province. "The (party) reiterates that in its endeavour to obtain self-determination for the Afrikaner people, it will not do this to the detriment of another community or people," it said. "It will be done in accordance with the new constitution." Right-wing Afrikaners, descendants of Dutch, French and German settlers, threatened in the early 1990s to go to war to block majority rule but their resistance was limited to a series of bomb blasts on the eve of the 1994 polls. 7229 !C31 !C312 !CCAT !E51 !E512 !ECAT !GCAT !GDIP Righting trade imbalances caused by South Africa's historical reliance on Iranian crude oil would probably dominate Iranian President Akbar Hashemi Rafsanjani's visit next week, economic analysts said on Monday. Rafsanjani, who has started a tour of six African countries, is due to visit South Africa on September 12 and 13 and will meet President Nelson Mandela. South Africa's links with Iran go back to the days of the Shah of Iran. During the years of the oil embargo on South Africa, Iran supplied up to 65 percent of South Africa's 400,000-450,000 barrels per day of oil imports. Last year, Iran was South Africa's fifth largest source of imports totalling about 4.4 billion rand. But it bought goods worth only 145.7 million rands from South Africa. "Our trade is very out of kilter and South Africa would be very keen to balance it out," an analyst told Reuters. Former Minerals and Energy Affairs Minister Pik Botha, who visited Iran last year in his official capacity, told Reuters that there was a great deal of scope for increased trade between the two countries. "Iran is quite willing to assist South African exporters if credit facilities could be negotiated," Botha said. Asked whether Iran might be interested in buying troubled oil-from-gas producer Mossgas, Botha said: "I doubt it." One issue that is likely to be discussed during Rafsanjani's visit is the planned deal to store Iranian crude at the Central Energy Fund's (CEF) Saldanha Bay storage tanks, north of Cape Town. CEF general manager Kobus van Zyl told Reuters that the environmental impact study on the project had been delayed and was not likely to be released before the end of the year. But he did not believe that there was any urgency in finalising the deal "because the simple fact of the matter is that there is not a lot of oil available on the market today". The deal was initiated when Iran had surplus stocks. Since the lifting of the oil embargo after South Africa's first democratic elections in 1994, oil companies have started diversifying crude purchases with their choice determined by price and quality. "But we still get most of our crude from Iran because our refineries are geared for light crudes and the Iranian crude is preferred," an industry observer said. -- Cape Town newsroom +27 21 25-2238 7230 !C24 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Production losses at Gold Fields Namibia Ltd's Tsumeb operations due to strike action were running at around a million rand in revenue and 80 tonnes of copper a day, a company spokesman said on Monday. The company's Tsumeb Corp Ltd (TCL) mines have been shut down since August 23 when Mineworkers' Union of Namibia members took control of key areas, including the copper smelter. Gold Fields spokesman Dermot Whyte told Reuters the mines remained closed on Monday and revenue losses were about a million rand a day. Whyte said production losses as a result of the strike were about 80 tonnes of copper a day or 960 tonnes of copper since the strike began 12 days ago. TCL sold about 6,789 tonnes of copper in the quarter to end-June. Whyte said there still was no end in sight to the labour action. "We are in the process of trying to find a mediator to try and solve the problem but for the last few days we've been deadlocked," Whyte said. He said Gold Fields had been in contact with the union. "We have been talking on and off". The company said last week the copper smelter had been badly damaged by strikers and could remain shut for six weeks or longer. The lead smelter, which was shut down before the strike, also remained out of commission. Union members took control of certain key areas of TCL, including the copper smelter and Kombat property almost two weeks ago. The company obtained an urgent interim court interdict on August 22 declaring the strike unlawful but Namibian police have found it difficult to enforce the court order. -- Marius Bosch, Johannesburg newsroom, +27-11 482 1003 7231 !C42 !CCAT !E41 !ECAT !GCAT !GJOB A strike by thousands of Zimbabwean civil servants dragged into its third week on Monday, with the strikers refusing to return unless their jobs are guaranteed. Last week the government agreed to pay wage rises of 20 percent, on top of a previous award of nine percent, in response to demands for rises of between 30 and 60 percent. But Public Service Minister Florence Chitauro said at the weekend that she was sticking to her earlier position that about 7,000 of the workers fired for striking would not get their jobs back. In the capital Harare, about 6,000 of the strikers gathered in the central park where they have met daily since stopping work on August 20. "It is crucial that we get an undertaking from the government that those dismissals are revoked, otherwise our strike will have been in vain," one of the strike leaders, Arthur Bene, said on Monday. The strike -- which Public Service Association officials said was supported by 70 to 80 percent of Zimbabwe's 180,000 civil servants -- has crippled public services. Hospitals have been the hardest hit, with many forced to close some wards. Senior doctors were handling emergencies with help from army medical personnel and the Red Cross. 7232 !GCAT !GPOL Togo's parliament is to hold a special session on Tuesday to debate and vote on the government programme of newly appointed Prime Minister Kwassi Klutse. National Assembly President Dahuku Pere, in a weekend statement carried by state radio, invited deputies to attend the special session. Klutse, an economist appointed by President Gnassingbe Eyadema on August 20, has said he plans to focus on developing Togo's economy. Real Gross Domestic Product grew 8.3 percent in 1995, the second highest rate in Africa after Malawi. Edem Kodjo, who took the job of prime minister when opposition parties held a notional majority in parliament after a 1994 general election, resigned after Eyadema's party won three by-elections in August. Klutse was planning and regional development minister in the Kodjo government. He named a 24-member cabinet drawn mainly from Eyadema's party, which has an effective majority in parliament. Eyadema, an army general, seized power in 1967 and was elected in 1993. Parliament resumes on October 2 for its budget session. 7233 !GCAT These are significant stories in the Ivorian press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. FRATERNITE MATIN - Prime Minister Daniel Kablan Duncan inaugurates bus terminal, city market and other installations worth more than 500 million CFA in central town of Bouafle. - Four armed robbers shot dead in Abidjan residential district by special police unit SAVAC, which is spearheading government crackdown against violent crime in Ivory Coast. LA VOIE - President Henri Konan Bedie, following pressure from France, withdraws controversial draft law giving police wide-ranging search powers as part of crackdown against crime. Opposition and human rights groups assailed the draft law for allowing police to search homes without a magistrate's warrant. LE JOUR - Senior officials of the Ivorian Refining Company placed under surveillance in connection with loss of 30,000 tonnes of petroleum products; government expected to act after receiving audit report later this week. - $1 = 500 CFA -- Abidjan newsroom +225 21 90 90 7234 !GCAT !GDIP The U.N. refugee agency suspended a census of Rwandan refugees estimated to be over 700,000 in the eastern Zairean town of Goma on Sunday when the majority of refugees refused to cooperate, aid workers said on Monday. They said U.N. High Commissioner for Refugees (UNHCR) officials were shocked by the boycott of the census by refugees in five camps around Goma. UNHCR estimates there are up to 1.1 million Rwandan Hutu refugees in camps in Goma and another eastern town of Bukavu. "UNHCR suspended the census operation at 1 a.m. (1100 GMT) on Sunday and have also suspended all services to the camps except for emergency medical services and water," an aid worker told Reuters. "There was a general boycott of the census by the refugee population and now there is a standoff with refugees refusing to be counted and UNHCR trying to work out what to do," she said. A UNHCR spokesman said he could not comment on the reports and it was unclear if the census would restart on Monday after talks between UNHCR officials in Goma and Zairean officials. Aid workers said there was no violence but refugees on Saturday night destroyed two sites where the census was supposed to be conducted in Katale camp and stole plastic sheeting in Mugunga camp. "Refugee leaders led UNHCR to believe the census would work. The motive for their opposition is political manoeuvring. The refugees are now asking how long services will be suspended," an aid worker said. Many of the 1.1 million Rwandan Hutu refugees in Zaire and nearly 600,000 in Tanzania refuse to go home, saying they fear reprisals for the 1994 genocide in Rwanda of up to a million people. Aid workers say many refugees are being intimidated against returning by hardline former members of the Rwandan army and Hutu militias who took part in the genocide and face detention if they go home. A Rwandan refugee lobby group, the Rally for the Return of Refugees and Democracy in Rwanda (RDR) urged UNHCR on Saturday to avoid any "policing approach" during the census over several days and to calm refugees by explaining aims of the operation. It said refugees feared census takers would use indelible ink to mark them so they could be detected by Rwandan government troops and mistreated if they were forced back into Rwanda. UNHCR said the census was not directed against anyone and was aimed at establishing how many refugees were in the area so aid could be better directed in the face of a shortage of donor funding. U.N. officials had planned for more than 1,000 aid workers to take part in conducting the census from Sunday until Tuesday of the estimated 727,000 refugees in camps around Goma town. Only about 100 refugees a week are returning voluntarily to Rwanda in contrast to the 600 babies born in the camps weekly. Zairean Prime Minister Kengo wa Dondo said at the end of a visit to Rwanda the previous week that the Zairean and Rwandan governments agreed on an "organised, massive and unconditional repatriation" of the 1.1 million Rwandan refugees in Zaire. He said the repatriation would be carried out swiftly and would be enormous, starting with the closure of refugee camps. RDR said it feared forced expulsions would start in days. Zairean troops expelled 15,000 refugees in August last year. 7235 !C13 !C21 !CCAT !GCAT !GVIO Two people were killed and seven injured in bread riots in and around the Sudanese capital Khartoum on Sunday, an Interior Ministry statement said on Monday. The injured included three policemen. The protests broke out after bakeries refused to bake bread, on the grounds that new government regulations on the weight of loaves made it unprofitable. In riots that lasted three hours, protesters smashed vehicles and threw stones at the police, eyewitnesses said. The Interior Ministry statement named the two dead men as Khartoum bakery worker Karrar Ali Mohammad Ali, 18, and Afaf Mohammad Adam from Ed Dueim south of the capital. It did not say how they were killed. The ministry said some people had tried to exploit the bread shortage to start riots and destroy public and private property. The police had to intervene, it added. Small quantities of bread appeared in the markets on Monday and heavy rain overnight helped keep people indoors. In an apparent sign of differences within the government over the bread affair, Finance Minister Abdel Wahhab Osman said he was not consulted on the new bread pricing policy. In an interview with the newly established Arabic daily Alwan he criticised the policies of the Khartoum provincial government as contrary to the policies of economic liberation. "Control is the way to scarcity, the blackmarket and corruption," the minister said. "It is better for the public to get high prices with abundance than high prices with scarcity," he added. He suggested the Khartoum province authorities confine their activities to checking weights and curbing the activities of middlemen, whom he accused of raising the price of bread after it has left the bakery. Sudan is suffering a series of crises ranging from water and electricity shortages to rising food prices. 7236 !GCAT These are significant stories in the Nigerian press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. DAILY TIMES - Government warns striking university lecturers to return to work or face the sack. BUSINESS TIMES - Crude oil production joint-venture partners to meet petroleum minister to discuss new rules for the industry announced last month. - Nigerian Breweries to acquire Schweppes bottling franchise from Coca-Cola bottlers Nigerian Bottling Company . THE GUARDIAN - Geneva-based International Committee of Jurists recommends that the European Union and the United States impose sanctions on Nigeria. THISDAY - Government has dispatched a delegation to Equatorial Guinea capital, Malabo, to try and resolve a dispute over ownership of an ill-defined offshore boundary considered to be rich in crude oil, Thisday checks reveal. - Commonwealth officials expected in Nigeria next week to try and resolve the diplomatic row over hanging of minority rights activist Ken Saro-Wiwa for murder. --Lagos newsroom +234 1 2630317 7237 !C13 !C24 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Mauritius is drawing up plans to cut costs, raise factory efficiency and streamline management in its sugar sector, a senior industry official said on Monday. Patrick D'Arifat, director of the Mauritius Sugar Producers Association (MSPA), told Reuters that an expected government policy paper on centralisation of sugar mills would set out the direction for the industry into the next century. He said the paper would deal with investments in mills and compensation for workers likely to lose their jobs through factory closures. It would also deal with the question of extra transport costs for small cane planters who would have to sell their products to other factories as a result of closures. "Centralisation will be a means to consolidate the milling sector. From now until the year 2000, there might be three or four (factory) candidates for closure," D'Arifat said. Consolidation from the present 17 units to 13 or 14 by 2000 is seen in the industry as essential if competitiveness is to be improved. Under the Sugar Protocol of the Lome Convention, Mauritius has an annual 508,000 tonnes export quota to the European Union at guaranteed prices that are between two and three times above world market levels. The sugar protocol will outlive the Lome Convention which runs out in 2000 and the export quota will stay. But analysts say prices will no longer be guaranteed after 2000. A government economic report issued early this year said expenditure in the sugar sector rose by 13 percent between 1991 and 1994, largely on a 21 percent rise in wages and salaries. "It is seen that Mauritian costs are about 20 percent higher than those of major cane sugar exporting countries," it said. "The sugar sector is investing between 400 million ($19.7 million) and 500 million rupees every year. There is a possibility that this will increase in the future, may be to the tune of 700 million per year," D'Arifat said. He said factories were also diversifying into producing electricity from bagasse, the residual cane stem once sugar juice has been extracted. "A good deal of the sugar mills which will remain (after centralisation) will produce electricity, some 10 of them. Three or four will produce throughout the year while the rest only during the harvest season," he said. D'Arifat said that for the 1996 harvest season sugar production was still forecast at 610,000 tonnes. 7238 !GCAT These are the leading stories in the Kenyan press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. DAILY NATION - National Council of Churches of Kenya says recent talks between the opposition and the ruling Kenya African National Union party were part of its initiative to restore peace. - Attorney-General Amos Wako says he will prosecute those implicated in the public accounts and investment committees reports if he found sufficient evidence. - Memmber of parliament says more than 40 people starved to death in Kenya's northeast province in the past month. EAST AFRICAN STANDARD - Police shot and seriously wounded a boy on a lorry for allegedly refusing to part with a 200 shilling bribe. - Outspoken cleric terms the constitution "oppressive and colonial" and says Kenyans must urgently change it. - Rehabilitation centres for disabled persons do not have enough instructors because of a lack of funds for salaries. KENYA TIMES - South African President Nelson Mandela is in love with Graca Machel, widow of the former Mozambican president Samora Machel, a spokesman says. - Iran's president arrives in Kenya at start of tour of six African states to boost economic ties. - The government appoints a 10-man team to probe the financial mess at the ministry of health. THE EAST AFRICAN - Ugandan President Yoweri Museveni says his government is soon to propose a new structure for the National Resistance Movement. - The Burundi government asks Tanzania to respect the Vienna Convention on the protection of diplomats in a protest letter against the removal of its newly-appointed representative to Dar es Salaam. - Ugandan members of parliament express dismay at conditions in Ugandan prisons. ($1=56 Kenya shillings) 7239 !GCAT !GVIO Rebels have attacked in Burundi's northwest Kayanza province and nearly a dozen government buildings were looted and burned, state-run radio said on Monday. It said Hutu rebels attacked Gatara village five km (three miles) south of Kayanza town on Saturday, a day before Burundi's Hutu prime minister Pascal Firmin Ndimira visited the region. "There was heavy fighting in Gatara on Saturday morning. Nearly a dozen administrative buildings were burned, pillaged and destroyed," the radio said. It gave no casualty figures. It said in the northern province of Kirundo people had accepted changes resulting from the July 25 coup by the Burundi military but in Kayanza the Hutu rebels remained very active. It gave no more details. State-run radio has been heavily censored since the coup and has had few reports of violence, according to local journalists. More than 150,000 people have been killed in the last three years in Burundi in massacres and a civil war between the army and rebels that have raised fears of bloodletting on a scale similar to Rwanda's genocide in 1994 when one million died. Burundi's Tutsi military ruler Pierre Buyoya dismissed on Saturday a U.N. Security Council threat of an arms embargo in 60 days and ruled out talks with Hutu rebels unless they laid down their arms. "I am in favour of negotiations, but you can't negotiate without conditions. We can't negotiate with people we are fighting. It simply isn't possible," he told business leaders. On a resolution by the U.N. Security Council on Friday to press for talks within 60 days, he said: "Peace isn't decided in the Security Council...it is Burundians who must demand and live to make peace." Neighbouring states have cut air and road links with Burundi since July 31 to try to pressure the Tutsi-dominated army to return the country to constitutional rule and agree to talks with rebels. Rebel forces last week increased the isolation of Bujumbura, a Tutsi stronghold, by twice cutting power lines to the city, forcing residents to use dwindling fuel stocks or generators. They have also cut the main road north from Bujumbura to the Rwandan border with a series of ambushes and by digging it up to make it impassable for all vehicles for most of the weekend. Hutu rebels stepped up attacks in Kayanza region last week, operating from their stronghold in nearby Kibira forest, which analysts say is virtually off limits to the Burundi's army. Two truck drivers were last week burned alive in their vehicle in one of a series of ambushes by Hutu rebels on the country's main national route one, which runs through Kayanza. 7240 !GCAT !GPOL !GPRO President Boris Yeltsin was shown briefly on television on Monday, looking relaxed and smiling in a meeting with Prime Minister Viktor Chernomyrdin -- his first such appearance for more than a week. Yeltsin, who has been dogged by rumours of ill health, was shown from a distance on Russian Public Television's evening news for just a few seconds, sitting in an armchair dressed in jeans and a cardigan. He looked tanned and a little thinner than before, with no signs of the puffiness which sometimes appears around his face. He smiled as Chernomyrdin made a point, which was not audible. Part of the tape made available to Reuters but not aired showed Yeltsin walking with Chernomyrdin outside. He walked stiffly, as he has done at times in the past. His appearance did not differ significantly from the way he has looked during brief appearances in the past few weeks, but it contrasted sharply with the energetic image he presented during most of his campaign for reelection in early summer. Yeltsin, 65, has more or less less disappeared from the public eye since late June. He appeared on August 9 at his inauguration for a second term in office and has been seen a couple of times on television. The Kremlin has been repeatedly forced to deny that the president, who suffered two minor heart attacks last year, had fallen ill again. Itar-Tass news agency quoted a highly-placed Kremlin source as saying on Monday that Yeltsin had had a series of medical tests and a course of "preventative" treatment and needed rest. The head of the presidential press service Igor Ignatyev told Reuters by telephone this had been nothing more than regular checks, but he could not give the results. "The president is in a brisk mood," he said. "He is having a real rest now. (But) he is active and is in control of affairs." The head of his administration Anatoly Chubais, said he had spoken to Yeltsin by telephone on Friday and Monday. "He was speaking energetically. I had some proposals that he rejected and others which he approved. "I don't think there are grounds to worry," Chubais added, referring to media speculation that Yeltsin might be ill or not be controlling events in Russia. The meeting with Chernomyrdin was the first since Yeltsin arrived at the Rus residence 100 km (60 miles) northwest of Moscow a week ago. 7241 !GCAT !GPOL Romania's ruling leftist party on Monday threw its nationalist junior partner out of the governing coalition for attacking President Ion Iliescu over a friendship treaty with neighbouring Hungary. Iliescu's Party of Social Democracy (PDSR) instructed Prime Minister Nicolae Vacaroiu to reform the 21-month-old alliance quickly to rid it of National Unity Party (PUNR) members. The PUNR, a nationalist anti-Hungarian grouping with a firebrand leader, holds four ministerial portfolios. One of them, the transport minister, quickly announced he would resign from the PUNR to stay in the government. The government later sacked the justice, agriculture and communications ministers, the three other PUNR members in the administration, but did not announce replacements. A PDSR statement said leading PUNR members had shown "no will to disown themselves from the statements of PUNR leader Gheorghe Funar". Funar last week called for Iliescu to be impeached for agreeing a much-delayed friendship treaty with Hungary which is vital for both countries' ambitions to join the European Union and Nato. The treaty is due to be signed later this month. Funar, the PUNR's presidential candidate and mayor of the Transylvanian city of Cluj, argues the treaty is "an act of national treason granting privileges to Romania's ethnic Hungarian minority". Analysts see the ruling PDSR's move as an attempt to rid itself of unwholesome allies ahead of Romania's third post-communist presidential and parliamentary elections due on November 3. "As long as the PUNR agreed with the government they were part of it. Now they don't so they are out," presidential campaign spokesman Ioan Pascu told Reuters. Iliescu said the PUNR needs to derail the treaty, agreed unexpectedly in August and supposed to end years of disputes over the status of the 1.6 million Hungarians in Romania, if it is to have any political future. "The PUNR has no platform but being against the treaty," he told journalists. "With it they've lost their raison d'etre." Agreeing the treaty has helped the PDSR and Iliescu claim the centre ground in politics, further marginalising the extreme political elements from which they once drew support and stealing a march on popular centre-right rivals. The now defunct January 1995 coalition protocol committed the PUNR, the anti-Semite Greater Romania Party and the neo-communist Socialist Labour Party to support Vacaroiu's fragile leftist administration. 7242 !GCAT !GVIO NATO peacekeepers in northern Bosnia confiscated unauthorised weapons on Saturday which Bosnian Serbs had hidden in a military ambulance, a NATO statement said on Monday. It said a NATO patrol in the Serb stronghold of Doboj tried to inspect an ambulance belonging to the Bosnian Serb army but its driver tried to pull away. He stopped when NATO soldiers fired a warning shot in the air. "The patrol found two anti-tank grenade launchers and 48 rounds of 12.7 mm ammunition in the back of the vehicle," said the statement, faxed to Reuters. NATO troops were deployed in Bosnia last December to monitor a peace accord calling for the demilitarisation of former confrontation areas and the return of refugees. 7243 !GCAT !GDIP !GPOL Serbia has signed a breakthrough deal with ethnic Albanian leaders in the troubled province of Kosovo to return Albanian students to mainstream education after a six-year boycott, Serbia's prime minister said on Monday. Prime Minister Mirko Marjanovic unveiled the deal apparently ending the boycott of Serbia's education system, but a Rome-based peace group which mediated the accord said it would hold talks on Monday evening on a new dispute over its wording. According to a spokesman for the Sant'Egidio Community, Albanian opposition leader Ibrahim Rugova had raised objections, saying the text did not refer explicitly to university education. Spokesman Mario Marazziti said Sant'Egidio Community officials were due in the provincial capital of Pristina to meet Rugova to try to resolve his objections. "It is not clear if he (Rugova) is having second thoughts or if he is trying to show hardliners in his ranks that he can play tough," Marazziti told Reuters. "We hope to have his final "yes' by tomorrow morning." According to Marazziti, the agreement is intended to have immediate effect, and will apply to all levels of education. Western diplomats praised the accord as a significant and welcome breakthrough in the Kosovo dispute, which has threatened to trigger a new Balkan war. Tensions between ethnic Albanians, who outnumber Serbs nine to one in Kosovo, and Belgrade are considered the most potentially explosive unresolved ethnic conflict in the region. "The Republic of Serbia welcomes the agreement, evaluating it as a humanitarian and civilising agreement which will enable the Albanian children in Kosovo to stop suffering from negative political consequences," Marjanovic told a news conference. It comes two months ahead of federal Yugoslav elections, and a deal with the Albanians could shore up the position of Serbian President Slobodan Milosevic who signed the deal with Rugova. The Albanian boycott of the Serbian education system began in 1990 in protest at Belgrade's move to revoke Kosovo's autonomous status a year earlier. The Albanians instead set up their own parallel education system for some 500,000 students and established an unofficial administration. "The agreement foresees the unconditional return of Albanian students and teachers and other educational staff to their premises in Kosovo. Other education-related issues will be addressed and settled at a later stage," the accord said. Marazziti said a six-person commission, including three from each side, will oversee the accord's implementation. "This could become a place for (broader) dialogue," he said. The United States and Germany have led diplomatic pressure on Belgrade to settle its differences with the Albanian leadership, before a so-called "outer wall" of economic sanctions against rump Yugoslavia can be lifted. One Western diplomat who declined to be named warned that although the new accord was good news, hardline Albanian separatists might react with violence to what they regard as capitulation to the Belgrade authorities. Sporadic violence has flared in recent months in Kosovo, which Serbs regard as the cradle of their civilisation, with a series of attacks on Serbian policemen. International human rights groups accuse Serbia of using police-state methods to repress Albanians and protect Serbs. 7244 !GCAT !GPOL !GVIO Prime Minister Viktor Chernomyrdin acted as go-between on Monday (corrects day from Wednesday), briefing President Boris Yeltsin on a deal to end the war in Chechnya struck by Alexander Lebed, who is still waiting for Yeltsin's endorsement. No details of Chernomyrdin's meeting with Yeltsin were released and there was no sign yet of a meeting between security chief Lebed and Yeltsin, whose staff again reassured the world that the president was well. Yeltsin aide Anatoly Chubais told a news conference he had held two telephone conversations with Yeltsin who is on holiday outside Moscow, last Friday and earlier on Monday. The president sounded "energetic", Chubais said. Yeltsin, who suffered two heart attacks last year, has not met Lebed since the latest peace missions and he has rarely been seen in public. The former paratroop general is Yeltsin's special envoy in breakaway Chechnya. Chubais said he thought the two men would speak on the telephone later on Wednesday. Lebed told Russian Public Television that on "yet another attempt" to call Yeltsin earlier on Monday he had been told to try later. Describing his phone conversations with Yeltsin, Chubais said: "He was speaking energetically. I had some proposals that he rejected and others which he approved. "I don't think there are grounds to worry," Chubais added, referring to media speculation that Yeltsin, 65, might be ill or not be controlling events in Russia. The Kremlin said Yeltsin met Prime Minister Viktor Chernomyrdin on Monday at his holiday home outside Moscow. It was Yeltsin's first meeting with any government official since he left for vacation at the Rus hunting lodge a week ago. Itar-Tass news agency quoted a Kremlin source as saying that Yeltsin had undergone a course of "preventative" treatment. Ignatyev said this had been nothing more than regular checks, but he could not give the results. On Saturday Lebed declared an end to the Chechen conflict, in which tens of thousands of people have died, after signing an agreement with rebel chief-of-staff Aslan Maskhadov. Lebed's office said Chernomyrdin had backed the agreement, which postponed for five years any decision on Chechnya's independence, the issue that lay at the heart of the war. But Chernomyrdin's press secretary made clear that the premier had certain reservations about the deal. Interfax news agency quoted the spokesman as saying Russia's territorial integrity was paramount and that "the political price of the deal" had yet to be discussed. He also said Chernomyrdin had told Lebed that the pullout of Russian troops must go hand in hand with the demilitarisation of the Chechen population -- something which has not materialised from Lebed's peace efforts so far. Analysts have speculated that Lebed and Chernomyrdin have been wrangling over Chechnya to further their own careers if something happens to Yeltsin and elections are held early. As well as deferring the question of Chechnya's political status, Lebed's agreement with Maskhadov also provided for a joint commission to monitor troop withdrawals and the economic reconstruction of war-shattered Chechnya. An earlier ceasefire signed by the two men has held although some commanders in Chechnya were sceptical of the truce. "One would like to believe that the war was over but I seriously doubt it," Interfax quoted the head of Russian Interior Ministry forces, Anatoly Shkirko, as saying. He said the Chechens were breaking the ceasefire by leaving some 2,000 fighters in Grozny when only 270 were allowed to form the joint Chechen/Russian patrols to monitor the city. Shkirko said this had forced him to leave some of his men there too. Tass said the separatists had installed their own regional commanders in several towns, ousting leaders installed there by the Russian-backed administration of Doku Zavgayev. Zavgayev, who is resented by the separatists as a Moscow "puppet", told Tass he expected to play an important role in a future coalition government. He has accused Lebed of handing Chechnya over to "bandits". 7245 !GCAT !GPOL !GVOTE Slovenian President Milan Kucan opened a second round of consultations with political parties on Monday to try to agree on a date for a general election which must take place between October 27 and December 8. Under the constitution, the president must announce the date of the election between 60 and 90 days in advance. Kucan met leaders of five parliamentary parties on Monday and planned to consult representatives of the remaining six parties on Tuesday. Political sources said the general consensus seemed to lean towards November 10 for the poll in the ex-Yugoslav republic. The right-wing Social Democratic Party (SDSS) was the only political grouping pushing for a later election date, arguing that Slovenia should hold a referendum on reforming the electoral system before the poll. The SDSS lodged an appeal to the Constitutional Court in August after parliament voted to hold the referendum once the new assembly is elected. The Constitutional Court is due to issue its ruling on September 10. Slovenians, whose country has one of the most successful economies among Europe's former communist states, will elect candidates to a 90-seat lower house of parliament and a 30-seat upper house called the state council. An opinion poll conducted by the daily newspaper Delo and published on Monday showed that Prime Minister Janez Drnovsek's centrist Liberal Democrats (LDS), senior partner in a government coalition with rightists, would win most support if the country went to the polls this week. The LDS, which currently holds 30 parliamentary seats, would win most votes with 15.4 percent support, according to the survey. The main opposition right-leaning Social Democratic Party would come second with nine percent and the right-wing People's Party, the junior coalition partner, would be third with 8.3 percent, it found. The leftist United List of Social Democrats, the former ruling communists, received 5.7 percent in the survey. The poll showed 28.9 percent of voters were undecided. 7246 !GCAT !GPOL !GVIO President Boris Yeltsin was likely to have a telephone conversation on Monday with security supremo Alexander Lebed about the new Chechnya peace deal, the Russian leader's chief-of-staff, Anatoly Chubais, said. Lebed signed the accord with Chechen separatists on Saturday in the latest bid to end the 21-month-old conflict in the breakaway region. Chubais told a news conference that he had spoken twice on the telephone to Yeltsin -- once on Friday and again earlier on Monday. He added that the president, who has been on holiday outside Moscow since last week, sounded "energetic". "I cannot rule out that a phone conversation between Yeltsin and Lebed will take place later today," Chubais said. "Frankly speaking, I think it will take place." Describing his own telephone conversations with Yeltsin, Chubais said: "He was speaking energetically. I had some proposals that he rejected and others which he approved. "I don't think there are grounds to worry," Chubais added in a reference to media speculation that Yeltsin, 65, might be ill or not be controlling events in Russia. But Lebed himself, speaking on Public Russian Television, said he had made "yet another" attempt to call Yeltsin on Monday but was told that a conversation could only take place later. "I am optimist," he added dryly. The Kremlin said Yeltsin met Prime Minister Viktor Chernomyrdin on Monday at his holiday home outside Moscow and discussed the Chechnya peace deal. It was Yeltsin's first meeting with any government official since he left for vacation at the Rus hunting lodge a week ago. Lebed's office said Chernomyrdin had backed the agreement, which postponed for five years any decision on Chechnya's independence, the issue that lay at the heart of the war. Chubais said the accord was "not the final fullstop" in the conflict and added: "I am far from euphoric. There are many questions -- economic and political -- to be solved." Chernomyrdin's press secretary made clear that the premier had certain reservations about the deal. Interfax news agency quoted the spokesman as saying Russia's territorial integrity was paramount and that "the political price of the deal" is yet to be discussed. 7247 !GCAT !GPOL !GVIO Russian President Boris Yeltsin met Prime Minister Viktor Chernomyrdin on Monday to discuss the peace deal Alexander Lebed struck with Chechen separatists, Itar-Tass news agency said. Tass quoted Yeltsin's press office as saying the meeting took place at the Rus hunting lodge outside Moscow where the president is currently vacationing. Yeltsin's first meeting with any government official since he began his holiday one week ago lasted two hours, the press office said. Lebed's press office had earlier said Chernomyrdin viewed the peace plans brokered by Lebed, Yeltsin's special envoy to Chechnya, as successful. The meeting between Yeltsin and Chernomyrdin took place amid persistent rumours that Yeltsin had again fallen ill after two minor heart attacks last year. Yeltsin, 65, has rarely been seen since late June but his aides say he is just worn out after a gruelling re-election campaign. The head of presidential press office Igor Ignatyev said on Monday that Yeltsin was in "brisk mood" on vacation, adding that Yeltsin had undergone regular medical tests and analyses before going to Rus, some 100 km (60 miles) from Moscow. Lebed declared an end to the 21-month war after signing the agreement with rebel chief-of-staff Aslan Maskhadov on Saturday. The pact would defer a decision on Chechen independence until 2001 and provide for a joint commission to run the region until then. In a statement on Monday Lebed's office quoted Chernomyrdin as saying he was satisfied with the deal and that it did not differ fundamentally from an earlier draft agreed between the two men. Chernomyrdin was ready to participate in further efforts to regulate the situation in the republic, Lebed's office added. 7248 !GCAT !GDIP !GPOL Romania's ruling leftist party on Monday threw its nationalist junior partner out of the governing coalition for attacking President Ion Iliescu over a friendship treaty with neighbouring Hungary. Iliescu's Party of Social Democracy (PDSR) instructed Prime Minister Nicolae Vacaroiu to reform the 21-month-old alliance quickly to rid it of National Unity Party (PUNR) members. The PUNR, a nationalist anti-Hungarian grouping with a firebrand leader, holds four ministerial portfolios. One of them, the transport minister, quickly announced he would resign from the PUNR to stay in the government. A PDSR statement said leading PUNR members had shown "no will to disown themselves from the statements of PUNR leader Gheorghe Funar". Funar last week called for Iliescu to be impeached for agreeing a much-delayed friendship treaty with Hungary which is vital for both countries' ambitions to join the European Union and Nato. The treaty is due to be signed later this month. Funar, the PUNR's presidential candidate and mayor of the Transylvanian city of Cluj, argues the treaty is "an act of national treason granting privileges to Romania's ethnic Hungarian minority". Analysts see the ruling PDSR's move as an attempt to rid itself of unwholesome allies ahead of Romania's third post-communist presidential and parliamentary elections due on November 3. "As long as the PUNR agreed with the government they were part of it. Now they don't so they are out," presidential campaign spokesman Ioan Pascu told Reuters. Iliescu said the PUNR needs to derail the treaty, agreed unexpectedly in August and supposed to end years of disputes over the status of the 1.6 million Hungarians in Romania, if it is to have any political future. "The PUNR has no platform but being against the treaty," he told journalists. "With it they've lost their raison d'etre." Agreeing the treaty has helped the PDSR and Iliescu claim the centre ground in politics, further marginalising the extreme political elements from which they once drew support and stealing a march on popular centre-right rivals. The now defunct January 1995 coalition protocol committed the PUNR, the anti-Semite Greater Romania Party and the neo-communist Socialist Labour Party to support Vacaroiu's fragile leftist administration. While Transport Minister Aurel Novac said he would resign from the PUNR his party colleague Agriculture Minister Valeriu Tabara told state radio he would rather quit his post than abandon Funar's anti-Hungarian platform. The other two PUNR ministers, of communications and justice, were not available for comment. 7249 !GCAT !GPOL Russian President Boris Yeltsin was due to meet Prime Minister Viktor Chernomyrdin on Monday to discuss the peace deal Alexander Lebed struck with Chechen separatists, Yeltsin's press office said. The head of Yeltsin's press service, Igor Ignatyev, said the president had invited the premier to the Rus hunting lodge outside Moscow where he is currently vacationing. It will be Yeltsin's first meeting with any government official since he began his holiday one week ago. Lebed's press office had earlier said Chernomyrdin viewed the peace plans brokered by Lebed, Yeltsin's special envoy to Chechnya, as successful. The meeting between Yeltsin and Chernomyrdin was announced amid persistent rumours that Yeltsin had again fallen ill after two minor heart attacks last year. Yeltsin, 65, has rarely been seen since late June but his aides say he is just worn out after a gruelling re-election campaign. Ignatyev said on Monday that Yeltsin was in "brisk mood" on vacation, adding that the president had undergone regular medical tests and analyses before going to Rus, some 100 km (60 miles) from Moscow. Lebed declared an end to the 21-month war after signing the agreement with rebel chief-of-staff Aslan Maskhadov on Saturday. The pact would defer a decision on Chechen independence until 2001 and provide for a joint commission to run the region until then. In a statement on Monday Lebed's office quoted Chernomyrdin as saying he was satisfied with the deal and that it did not differ fundamentally from an earlier draft agreed between the two men. Chernomyrdin was ready to participate in further efforts to regulate the situation in the republic, Lebed's office added. 7250 !GCAT !GSCI France's first woman in space and two Russian cosmonauts returned to earth on Monday and officials said their mission to the orbiting Mir station had been successful. A mission control spokeswoman said the capsule with Claudie Andre-Deshays, Yuri Usachev and Yuri Onufrienko had landed at 11.41 a.m (0741 GMT) in steppeland some 110 km (75 miles) south west of the planned new Kazakh capital Akmola. "The cosmonauts are in good condition...they have left the capsule...and greeted ground specialists with smiles," she said. Andre-Deshays spent 16 days aboard Mir carrying out biological and medical experiments. Usachev and Onufrienko have been on Mir since February. A French space agency spokesman said officials were satisfied with Andre-Deshays' mission. "She worked well," he said, adding that the cosmonaut would now undergo post-flight medical tests near Moscow. Russians Valery Korzun, Alexander Kalery and U.S. astronaut Shannon Lucid are still aboard Mir, although Lucid, on her first mission to Mir, will leave this month aboard a U.S. shuttle. In Paris, the daily Le Monde quoted French junior space minister Francois Fillon as saying an agreement was signed in Moscow on Monday for a French astronaut to spend four months aboard Mir in 1999. France's Post, Telecommunications and Space Ministry had no immediate comment on the report. Fillon spoke in Moscow before heading to greet Andre-Deshays on her return to earth. 7251 !GCAT !GPOL !GPRO Russian President Boris Yeltsin, dogged by health scares, has had a series of medical tests and a course of "preventative" treatment and needs rest, Itar-Tass quoted a highly-placed Kremlin source as saying on Monday. The agency gave no details about the tests or what treatment the president, who has been on holiday outside Moscow for the last week, had undergone. The Kremlin has been repeatedly forced to deny that Yeltsin, who suffered two minor heart attacks last year, is ill again. But the president, 65, has more or less disappeared from the public eye since late June. He made appeared on August 9 at his inauguration for a second term in office and has been seen a couple of times on television. Tass quoted the source as saying that Yeltsin felt "alright" and that the main thing for him was to rest. Yeltsin's aides have insisted the president is simply worn out after a gruelling re-election campaign and needs to rest. Tass quoted the Kremlin source as saying Yeltsin would continue his vacation and that he had no plans to leave the Moscow region. The source said Yeltsin was closely following developments in breakaway Chechnya, where security chief Alexander Lebed signed a peace deal early on Saturday which he said ended the 20-month war. Yeltsin has appointed Lebed as his special envoy to the region with vast but unspecified powers to end the war. To the surprise of many, Yeltsin has so far failed to meet Lebed, fuelling the rumours he is too ill to handle affairs of state. Tass quoted the Kremlin source as saying Yeltsin had no plans to meet anyone at present, but that the president's programme could be changed at any moment. 7252 !GCAT Here are highlights from Polish newspapers this morning. RZECZPOSPOLITA - Solidarity trade union staged a major protest march in Warsaw on Saturday on its sixteenth anniversary. Many parties in oppostion to the ruling leftist coalition joined the demonstration. - According to a survey by the PBS polling institute, 66 percent of Poles did not go on holiday this year, while most of the remainiong 44 percent spent less than their avarage monthly family income on holiday trips. - The opposition centrist Union for Freedom (UW) party chairman Leszek Balcerowicz has launched an attack on the ruling ex-communist coalition education policies. - Poland's Defence Minister Stanislaw Dobrzanski has said his ministry will change its organisation structure by the end of January next year to adapt to the demands of the expected NATO membership. - The Helm Dauelsberg container ship has left the docks of Gdynia shipyard. The 30.6 DWT ship will carry 2,100 containers. It is the fourth ship built in Gdynia for Germany's Dauelsberg contractor. - PT Centrala telecom firm, based in the eastern city of Mielec, has applied to the Anti-monopoly Office to fine Poland's state-owned telecommunications company TPSA for alleged monopolist practices which made PT Centrala lose 320,000 zlotys. NOWA EUROPA - The Polish capital consortium comprised of POLSAT satellite TV station, BRE bank and Multico mineral water firm will compete with France's Hachette in bidding for Poland's major press distrtibution chain Ruch SA. - International news agencies have adopted a declaration in Warsaw demanding that governments allow them full journalistic independence at a conference organised by International Press Institute (IPI). - Bank Przemyslowo Handlowy (BPH) board has dismissed deputy president Jan Pamula, who was arrested in June over bribery allegations, the bank's statement said. - "Germany will provide know-how and advisers for the creation of commodity exchanges in Poland", Germany's Agriculture Minister Joachen Borchert said. - Falling prices of NFI units on the Warsaw bourse may have been caused by big investors who sold off these papers, some analysts said. GAZETA WYBORCZA - Radio Lodz FM broadcaster reporters have issued an open letter in which they accused the new radio board of incompetence and persecution of the best reporters. - Former Pekao SA's deputy president Andrzej Dorosz has unanimously been chosen as the only candidate for the bank's new president. ZYCIE WARSZAWY - The socialist Union of Labour (UP) party turned down a proposal to form a coalition before the coming parliamentary elections with the ex-communist Democratic Left Allaince (SLD). - Investments from South Korea and other Asian countries in Poland will grow if not blocked by legal limitations. - Three developers including Holding Wars, Samsung Corporation, and ING Real Estate International will put up Centrum Zachodnie office area complex worth $200 million in the centre of Warsaw. -- Warsaw Newsroom +48 22 653 9700 7253 !GCAT !GPOL !GVIO Kremlin envoy Alexander Lebed, who says he has ended the war in Chechnya, met Prime Minister Viktor Chernomyrdin on Monday to try to convince Moscow the deal he reached with Chechen separatists brought peace with honour. Chernomyrdin has given a cautious welcome to the accord, but said on Sunday he had not yet seen the final document. But there was no sign that Lebed would have an early meeting with President Boris Yeltsin, who is on holiday outside Moscow Aides say the president, 65, is not ill, but his long absence has prompted much speculation about his health. Chernomyrdin said last week that Yeltsin had approved Lebed's draft proposals. But amendments were made during negotiations with rebel chief-of-staff Aslan Maskhadov and Chernomyrdin said on Sunday he needed to discuss the accord again with Lebed. The amended deal defers a final decision on Chechen claims for independence for five years and commits Moscow to pulling out the troops sent to crush a secession bid in December 1994. It also sets up a joint commission to oversee economic reconstruction and the withdrawal of troops. A spokesman said Yeltsin also wanted an account of the latest accord. But aides could not say if the president would meet Lebed. Lebed, 46, chosen by Yeltsin as his security chief in June after he took a strong third place in the first round of Russia's presidential election, has sometimes seemed out on a limb during his Chechnya negotiations. But Kremlin spokesman Sergei Yastrzhembsky told Russian Television that Yeltsin had "normal, working, businesslike" relations with Lebed. Analysts have also speculated that Lebed and Chernomyrdin have been wrangling over Chechnya to further their own careers if something happens to Yeltsin and elections are held early. The situation in Chechnya has been calm since an initial deal was signed and most Russian forces and rebel units have now left the capital Grozny, the scene of heavy fighting last month. Itar-Tass news agency said the separatists had installed their own regional commanders in several towns, ousting leaders installed there by the Russian-backed administration of Doku Zavgayev. Zavgayev, who is resented by the separatists as a Moscow puppet, told Tass he expected to play an important role in a future coalition government. A host of problems remain as both Lebed and the rebels try to convince hardliners in their own camps that it is a good deal. "This wound will keep bleeding for a fairly long time," former Russian acting prime minister Yegor Gaidar told Russian Television. "The scars of such a war are hard to heal." Separatist leader Zelimkhan Yandarbiyev said the agreement was "a serious step towards peace" but he warned of a danger coming from "the party of war" -- those in the Russian establishment who want to continue the 21-month conflict. His assertion that his side had made no concessions -- "We are an independent state," he told reporters -- was unlikely to help Lebed to convince sceptics in Moscow. Yandarbiyev also insisted all Russian troops be withdrawn. Moscow has in the past said it would remove all those based "temporarily" in Chechnya, leaving its "permanent" garrison. 7254 !GCAT DELO - Slovenia lost 0-2 against Denmark in a World Cup soccer qualifier on Sunday. - Some 29 percent of Slovenians surveyed said they were still undecided about whom they would support in general elections due by December, a Delo opinion poll said. - A nine-day agricultural fair at Gornja Radgona, located 170 km (104 miles) northeast of Ljubljana, ended on Sunday. About 1,500 exhibitors from 30 countries participated in the fair, which was visited by 190,000 people. - Industrial output in July rose 5.8 percent from June, the Slovenian Statistical Office said. DNEVNIK - President Milan Kucan is due to start a second round of consultations with leaders of political parties on Monday to agree on an exact date for the upcoming general elections. REPUBLIKA - Since 1990, some 1,172 industrial or building companies ceased operations, most of them (783) due to reorganization. Only 2.3 percent of the companies went into liquidation, the government said. 7255 !GCAT SME - Ivan Gasparovic, chairman of the Slovak parliament, has officialy called the 17th session of the parliament for September 11. - The session's agenda comprises 38 items but does not include personnel changes to the National Property Fund or to parliamentary committees supervising the activities of the secret service SIS, state radio or television. NARODNA OBRODA - Prime Minister Vladimir Meciar said the government was not preparing any further personnel changes. - Michal Kovac Junior, son of President Michal Kovac, said he would appeal to the Constitutional Court for the return of his passport seized by police this summer. Kovac said he would appeal to the international authorities if the ruling was negative. - One year after the abduction of Kovac Junior, the kidnappers still remain unknown. Kovac Junior said the case would not be solved while Meciar remains prime minister. - Altogether 31 banks and branches of foreign banks were active in Slovakia as of July 1, 1996. Two banks were fully state-owned, six banks were without any foreign capital and in seven banks foreign capital accounted for less than 50 percent. - Steel maker VSZ in June became the 100-percent owner of Narodna Obroda, the leading Slovak economics newspaper . - Slovakia's largest pharmaceutical company, Slovakofarma, posted turnover of 2.2 billion crowns in the first half of this year, some 177 million crowns more than in the same period last year. Slovakofarma's net profit totalled around 388 million crowns, compared to a net profit of 377 million in the first half 1995. HOSPODARSKE NOVINY - The state-owned monopoly energy utility Slovenske Elektrarne plans investments of 64.3 billion crowns by the year 2000, including completion of all four blocks of the Mochovce nuclear power plant. - A new law banning advertising of alcoholic drinks and tobacco products on television, radio newspapers, came into effect on September 1. PRAVDA - So far only one Slovak girl has admitted she was used for pornograpic pictures sold by a recently accused Slovak-born Austrian citizen, who came under investigation following the hunt for evidence against Marc Duthroux, a Belgian accused of the murder of several children and an adult in part of a child sex and pornography ring. Duthroux visited Slovakia several times. -- Bratislava Newsroom, 42-7-210-3687 7256 !GCAT These are some of the main stories in Sofia newspapers today. Reuters has not verified these stories and does not vouch for their accuracy. 24 CHASA -- Bulgaria's food prices rose by 15.4 percent in August, National Statistics Institute preliminary figures show. -- Bulgaria's Privatisation Agency is expected to decide this week on the sale of 75 percent stake in the debt-ridden Plama oil refinery, initially slated for liquidation under the government's structural reform programme, Privatisation Agency's executive director Vesselin Blagoev said. -- The liquidation of 10 industrial enterprises has cut the losses of Bulgaria's industry by 5.4 billion levs over six months, Industry minister Lyubomir Dachev said. -- The International Monetary Fund's mission currently in Bulgaria has said that the Bulgarian National Bank's monetary policy is not restrictive enough, a central bank official said. -- Voucher privatisation funds will be allowed to merge after raising separately the minimum required capital of 70 million levs and being licensed by the Securities and Stock Exchanges Commission, a commission official said. STANDART -- The Supreme Court is expected to rule today on the appeal by the Socialist Party against the electoral commission's refusal to register its candidate, the U.S. born Foreign Minister Georgi Pirinski for the presidential elections due on October 27. -- Bulgaria's cabinet is expected to approve this week the sale of a 67-percent stake in the five-star Sofia-based Sheraton Sofia Balkan hotel to the South Korea's giant Daewoo Corp for $22.3 million. -- The EU is expected to decide by September 15 on Bulgaria's request for a 60 million Ecu credit for balance of payments support, the Economy Ministry said. PARI -- The visiting International Monetary Fund's mission has not demanded that the Bulgarian cabinet should raise the flat Value Added Tax by six points to 28 percent to boost budget revenue, Finance Minister Dimitar Kostov said, thus rejecting allegations to the contrary by government sources. -- The Russian oil company Lukoil is expected to submit this week a bid for the Pleven-based oil refinery Plama, the newspaper said without naming sources. -- Sofia Newsroom, 359-2-84561 7257 !GCAT PRAVO - Even though the government promised to increase the availability of mortgage loans, the loans are continually becoming more expensive. - Skoda's new line of automobiles, the Octavia, was premired in a gala ceremony on Prague's Old Town Square on Sunday evening. Dealers will begin selling the Octavia on November 15th with the basic model going for 335,700 crowns. - Utility CEZ agreed to a delay in the delivery of its information system connecting all of its power plants. The information system is being supplied by the American firm Westinghouse. - Mitsubishi Heavy Industries Ltd., one of the leading Japanes heavy industry companies, announced that it opened an office in Prague on September 1. - The Czech Agrarian Chamber has decided to financially support the consumption of milk and dairy products by providing one heller for each litre of milk provided or purchased to dairies. - The general director of Chemopharma a.s. has criticised a move by a regional court in Usti nad Labem to privatise the company, the leading Czech manufacturer of plasters. HOSPODARSKE NOVINY - The Czech Republic's trade deficit with Russia decreased by 700 million crowns to 17.4 million crowns in the first half of 1996 as compared to the same period a year earlier. - By the end of 1997, all changes to legislation concerning foreign trade should be in place. An anti-dumping law should be in place in the second quarter of next year. - Matsushita has begun construction of a $66 million factory in Plzen. The factory, scheduled to open in April next year, will produce Panasonic colour televisions. - EuroTel has lowered its mobile phone connection fee to 3,450 crowns from 5,000 crowns. It also intends to cut prices of mobile phones in half during the course of September. - Sources from the Ministry of Finance stated that 70 percent of the shares in Podnikatelske Penzijni Fond have been sold to Foresbank. -- Prague Newsroom, 42-2-2423-0003 7258 !GCAT !GPOL !GVIO Russian Prime Minister Viktor Chernomyrdin has questioned the price of a Chechen peace accord while President Boris Yeltsin maintains a dogged silence about the plan to end a devastating 20-month war. Yeltsin's security chief Alexander Lebed told Public Television on Monday that he had made "yet another attempt" to telephone Yeltsin to discuss the accord he concluded with rebels on Saturday. He had been told, however, to try again later. Lebed's frustration over the absence of top-level public backing for his deal shone through his comment. But he might suppose the televised scenes of celebration among rebels in Chechnya can hardly have warmed hearts in the Kremlin. The former paratroop general, for his efforts, was granted a meeting with Chernomyrdin on Monday. The premier then briefed Yeltsin on the deal that has ended fighting in the rebel region. Chernomyrdin's and Lebed's press offices gave conflicting reports about the meeting. Lebed's press office said Chernomyrdin had backed the agreement, but Chernomyrdin's press secretary made no mention of his chief endorsing the deal. The premier, he said, had certain reservations about it. Interfax news agency quoted Chernomyrdin's spokesman as saying Russia's territorial integrity was paramount and that "the political price of the deal" had yet to be discussed. He was clearly referring to the issue of Russia's sovereign control over Chechnya -- the heart of the conlict launched in December 1994 when Moscow sent troops to quell Chechnya's three-year independence bid. Lebed and rebel leader chief-of-staff Aslan Maskhadov agreed to defer by five years the decision on Chechnya's future status. Yeltsin has always insisted Chechnya must remain part of Russia and the constitution does not allow for secession. Lebed's deal also included creation of a joint commission to oversee Russian troop withdrawal from Chechnya and coordinate reconstruction of a region devastated by war. Analysts have speculated that Lebed and Chernomyrdin have been wrangling over Chechnya to further their own careers should something happen to Yeltsin and elections be held early. As part of his scrutiny of the Chechnya deal, Chernomyrdin was due to meet leaders of other regions of Russia's North Caucasus for consultations during his one day trip to the ethnic republic of Kabardino-Balkaria on Tuesday. Yeltsin's word, when it comes, will be decisive. The 65-year-old president, who suffered two heart attacks last year, has rarely been seen in public since late June. Yeltsin has not met Lebed since he had granted him unspecified sweeping powers to end a war that has killed tens of thousands. In a clear effort to dispel rumours about Yeltsin's health, chief aide Anatoly Chubais said he had two telephone conversations with the president, on Friday and on Monday. Describing his conversations with Yeltsin, Chubais said: "He was speaking energetically. I had some proposals that he rejected and others which he approved. "I don't think there are grounds to worry," he added. Late on Monday Yeltsin was shown briefly on television meeting Chernomyrdin. Yeltsin, sitting in an armchair dressed in jeans and a cardigan, looked relaxed and smiled. 7259 !GCAT !GENT !GPOL Actors and other artistic staff at Slovakia's prestigious National Theatre on Monday accused Culture Minister Ivan Hudec of incompetence and called on him to resign. They issued their demand following a staff meeting to protest against Hudec's surprise recent sacking of the theatre's artistic director and his appointment of Lubomir Paulovic to replace him. "We call on Minister of Culture Ivan Hudec to resign on the basis of the incompetent decisions of the ministry of culture," a statement issued after the meeting said. It was signed by 66 actors and technicians and 18 other artistic personnel and by the heads of the theatre's opera and ballet ensembles. The staff said Hudec had violated the autonomy of the theatre with the change of artistic director because he had not consulted the theatre's general manager, Dusan Jamrich. "We consider (the changes) as gross and directive administrative breaches of the autonomy of artistic institutions which threaten their very existence," their statement said. Paulovic on Monday announced he had resigned and was leaving the national theatre. Artists and intellectuals have always enjoyed high respect in the Czech and Slovak lands and wield greater power than their counterparts in many other countries. 7260 !GCAT !GPOL !GVOTE A special poll will have to be held for refugees in the Croatian port town of Dubrovnik after they received the wrong ballot papers for Bosnia's post-war elections, international organisers said on Monday. "They got the wrong ballots," said Tom Leary, a spokesman for the Organisation for Security and Cooperation in Europe (OSCE) which is overseeing the country's elections later this month. The OSCE plans to send 1,178 new ballots to Bosnian refugees in the historic Adriatic port who had asked to vote in the Moslem-Croat federation but instead received ballots for the Serb republic. "The people there were pretty upset," Leary told Reuters. The special poll for the refugees from the southern Bosnian town of Trebinje will be held the same day as elections in Bosnia itself on September 14, Leary said. Absentee voting for refugees abroad began last week and some 117,421 refugees in Croatia are eligible to vote in the elections which will select governing bodies for a Bosnian union comprised of Serb and Moslem-Croat entities. Refugees, many of whom were expelled from nothern Bosnian early in the war, complained that only Serb candidates were on the ballot in towns inside the Bosnian Serb republic. Some were so disgusted they refused to fill out their ballots rather than choose between Serb candidates. Serb refugee voters in rump Yugoslavia have complained they failed to receive election materials before the one-week voting period began last week. OSCE officials postponed municipal elections in Bosnia because of abuses reported in the voter registration process. 7261 !GCAT !GPOL !GVOTE Bulgaria's Supreme Court on Monday blocked the presidential candidacy of Socialist Georgi Pirinski on the grounds that he was born and spent his early childhood in the United States. Pirinski, a reform-minded socialist and currently foreign minister, was born in New York in 1948 of a Bulgarian father and American mother. His family moved in the mid-1940s to Bulgaria where Pirinski made a career in the old ruling communist party. But the Bulgarian Supreme Court upheld a ruling by the Central Electoral Commission (CEC) that Pirinski, who has a Bulgarian passport, be disqualified from the presidential race because he was not born in Bulgaria. "The five judges unanimously ruled that Pirinski was not a Bulgarian citizen at the time of his birth," said the official. The constitutional court ruled last month that the country's president must be a Bulgarian citizen by birth. The Bulgarian Socialist Party (BSP), which filed Monday's appeal to the Supreme Court, consists largely of ex-communists. It has backed Pirinski, saying the court had not acted impartially in interpreting the constitution. BSP officials had believed the father's nationality would be sufficient to determine Pirinski junior was also a Bulgarian. "The BSP will hold an extraordinary plenum this week to decide on a new candidate," BSP high council member Valentin Vatzev told reporters. The BSP is expected to set a date of the plenum at a meeting due to end later on Monday. Presidential elections are due on October 27 and candidates can submit papers and amendments to their applications in CEC until September 22. 7262 !GCAT !GPRO World motor racing champion Michael Schumacher paid a brief visit to the Bosnian capital Sarajevo on Monday in a charity mission for UNESCO. The world's Formula One title holder delivered medicine to Sarajevo hospitals in a one-day trip to the city, which endured 3-1/2 years of siege by Bosnian Serb forces. Fresh from a victory last month at the Belgian Grand Prix, Schumacher flew to Bosnia as an ambassador for the U.N.'s Educational, Scientific and Cultural Organisation to get a first-hand look at war damage and reconstruction efforts. 7263 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Bulgaria's association of air traffic controllers (Bulatka) said on Monday it plans to hold one-hour-per-day warning strikes after failing to reach agreement with their employer. "We will launch one-hour warning strikes every day until the argument with the employer is settled by a specially designed arbitrary commission," Bulatka's chief Stefan Raichev told Reuters. The first strike hour for Tuesday has yet to be decided, he said. No planes will be guided for landing or take off during the yet unannounced busy hour but transit flights will be guided. Transiting traffic will be warned 48 hours in advance through international air authorities Brussels, said Raichev. The controllers are demanding the monthly wage be increased from some $230 to some $1,000 per month, as well as the resignation of the air traffic service's management. They also demand the financial separation of the 350 air controllers from the technical staff. The director general of the air traffic service Valentin Valkov said that he has filed a claim in court saying that a controllers' strike would be illegal and expected the court to rule on Tuesday. "This strike would be blackmail. For a state employee it is immoral to demand a wage increase to 200,000 levs from current 100,000 levs, when the average salary for the country is 20,000 levs," said Valkov. "The employers are trying to threaten us but we will not give in," said Raichev. More than 1,500 planes per 24 hours fly over Bulgaria. -- Sofia Newsroom, 359-2-84561 7264 !E51 !E512 !ECAT !G15 !G158 !GCAT !GDIP Portuguese Prime Minister Antonio Guterres on Monday soothed fears in Warsaw that Lisbon might impede Poland's rapid entry into the European Union (EU) for fear it might harm Portugal's economic interests. "I wish to express our solidarity with the Polish government's will to enter European organisations, because this is the basis of...European security," he said after talks in Warsaw with his Polish counterpart Wlodzimierz Cimoszewicz. Portugal, among the four least wealthy EU members, is concerned that the entry of poorer Central and East European states like Poland should not dilute benefits Lisbon derives from the EU, such as structural funds for regional development. Guterres said talks on Polish membership would start in 1998 and admitted there would be difficulties. "There will certainly be many problems, many issues, concerning, for instance, transition periods, which have to be determined," he told a news conference, without giving details. "All this takes second place by comparison with our political line," he added. Asked whether Portugal stood to lose from Polish entry or competition for EU funds, he said a solution could be found that would also involve a fair deal for Poland, which threw off communist rule in 1989 and is eager to bind itself to the West. "I am sure that in discussion it will be possible to safeguard our interests and produce a proper situation for Poland," said Guterres, who also backed Poland's other key goal of joining the Western NATO military alliance soon. Cimoszewicz said in reply he welcomed Guterres's "confirmation of Portugal's full support for the process of expanding European and Euro-Atlantic structures," Poland's chief negotiator on EU matters, Jacek Saryusz-Wolski, commented: "It is important that the stereotype has been broken that smaller EU countries, more distant from Poland, oppose our membership." Guterres thanked Poland for its past stance over East Timor, a former Portuguese colony invaded by Indonesia in 1975 and annexed a year later. He said he had asked Cimoszewicz for further support in defending democracy there. The prime ministers called for increased economic exchanges and for cooperation in fighting crime and the narcotics trade. The socialist Guterres, in power since last October, was later due to hold talks with President Aleksander Kwasniewski. 7265 !GCAT !GPOL !GVOTE Romanian President Ion Iliescu pledged on Monday to adopt a centrist pro-Western platform for his re-election campaign, ridding himself of the leftist rhetoric that marked his last leadership race in 1992. "I have shed all kind of dogmatism, be it of the right or of the left," said Iliescu, 66, a former communist functionary who inherited power after the firing squad death of Stalinist dictator Nicolae Ceausescu in the country's 1989 revolution. "My winning edge...will by my political experience," Iliescu told foreign reporters. He defended his track record for nurturing gradual reform while maintaining stability and appealed for cross-party support for modernising Romania. "This is the theme of the campaign, to integrate Romania directly with the source of development, which is the West," presidential campaign spokesman Ioan Pascu said. Iliescu is favourite to retain power when the general election is held on November 3. Latest opinion polls give him 36 percent support, while Emil Constantinescu, an academic standing for the opposition Democratic Convention bloc, has 28 percent and Petre Roman, Romania's first post-communist prime minister, 21 percent. Iliescu, mindful of foreign doubts about the quality of Romania's democracy and eager to prove his credentials as a moderate leader, pledged to run a gentlemanly campaign. "I shall not respond to personal attacks," said Iliescu, who the opposition say ousted Ceausescu in a coup plotted with his aides in order to seize power for themselves. Since then he has moved slowly to remake himself as a national father-figure and statesman. Political analysts point to warming relations with the United States and the European Union as a reward for his shift towards the political middle ground. "The question that arises at the end of this century...is how can we change the destiny of Romania, how can we bridge this (development) gap?" he said of his country, still impoverished six years after the fall of communism. "It's clear that in the past four years we have achieved a qualitative leap in terms of economic development," Iliescu said. His leftist Party of Social Democracy hopes that his popularity will boost their chances, as it did in 1992. Iliescu and his party used communist slogans to win those elections, scaring voters by painting the opposition as exploiters who would sell Romania cheaply to the West and bring back former landowners and industrialists. The Moscow-educated president no longer uses such communist-era language. Ironically he now is accused of selling out to the West by nationalists. They were dumped from his ruling coalition on Monday for attacking his support of a friendship treaty with Hungary. The treaty, due to be signed later this month, is vital to both countries' hopes of gaining European Union and NATO membership -- the stated goals of Iliescu's pro-Western policy. "Romania meets all the requirements needed to be included in the first wave of admissions to both NATO and the EU," added Iliescu, striking another theme likely to win him votes. He said opposition threats to challenge him in court over accusations his candidacy was unconstotutional were "politically motivated and lacking legal foundation." The Romanian constitution limits Presidents to two four- year terms. Iliescu, who was elected both in 1990 and 1992, said the post-communist constitution, introduced in 1991, applies only to his second ballot victory. 7266 !GCAT !GVIO Rising tensions in ethnically partitioned Mostar has prompted the multi-national police force to increase its presence in the city's hot spots, a police spokesman said on Monday. "The security situation in Mostar has recently significantly deteriorated," Howard Fox, spokesman for the West European Union Police said. The WEU's 90 policemen patrol the city together with joint Croat-Moslem police units. "Because of the incidents on the Boulevard and some of the recent unpleasant situations in Mostar we have increased the police presence on the (former) confrontation line," he said. The Boulevard is a street running along the confrontation line in downtown Mostar, where some of the heaviest street fighting between Croats and Moslems took place in 1993 during their 10-month war for land. Over two and a half years after they halted the war under immense U.S. pressure and joined in a bi-national federation, Mostar still remains divided in two strictly ethnic parts. Fox said the safety of Mostar's Croats and Moslems was threatened by an increase in both organised crime and street incidents, most of which were stonings of vehicles on the east (Moslem) side of the Boulevard. One child was slighty injured in a firing incident last Saturday, when two men fired four rounds at children who were swimming in the river. 7267 !GCAT !GPOL !GVOTE Albania's key opposition Socialist Party on Monday pledged its full commitment to participate in nationwide local polls in October, but only if a series of preconditions were met. The Socialists, who boycotted the country's disputed general election three months ago along with most opposition groups, have called on the government to avoid the alleged irregularities of the last ballot and ensure a free vote. "We are working with total commitment...to take part in the local polls," senior Socialist leader Et'hem Ruka told a news conference. "But we demand that the present government guarantees free and fair (local) elections." Albania, still smarting from international criticism of its third multi-party parliamentary elections on May 26 and June 2, will hold local polls on October 20. Opposition parties accused President Sali Berisha's ruling Democrats of rigging the general election and foreign observers said the vote failed to meet international standards. Western governments have said they would keep an eye on the local poll and consider it a test of Albania's young democracy. To ensure what they consider an unbiased vote, the Socialists demand a round table be held to change the electoral law ahead of the local ballot. They also call for a new constitution and fresh general elections as soon as possible. The Socialists also want the government to annul a controversial so-called "genocide law" which bars all former senior communist officials from political office. The Socialists, heirs to the former communist party of Stalinist Enver Hoxha, last Friday elected Rexhep Mejdani as acting leader. Socialist party boss Fatos Nano has three years left to serve of a jail sentence imposed for corruption. 7268 !GCAT !GPOL President Boris Yeltsin was shown briefly on television on Monday, looking relaxed and smiling in a meeting with Prime Minister Viktor Chernomyrdin. The pictures of Yeltsin, shown briefly on Russian Public Television's evening news, was his first television appearance since August 22 and followed renewed speculation about the 65-year-old president's health. Yeltsin was shown from a distance for just a few seconds, sitting in an armchair dressed in jeans and a cardigan. He looked tanned and a little thinner than before. He smiled as Chernomyrdin made a point, which was not audible The meeting was the first since Yeltsin arrived at the Rus residence 100 km (60 miles) northwest of Moscow a week ago. The head of the presidential press service Igor Ignatyev earlier told Reuters by telephone that Yeltsin was in a brisk mood and in full control of affairs despite his holiday. The Kremlin has been repeatedly forced to deny that Yeltsin, 65, who suffered two minor heart attacks last year, had fallen ill again. 7269 !GCAT !GENT The ancient Czech capital has suffered invasions of dictators and demonstrators but nothing and no-one so extraordinary as Michael Jackson and his cohorts. The controversial and self-styled "King of Pop" plays his first concert in two years when the "HiStory" world tour starts on Saturday on Prague's Letna Plain, where Communist leaders once reviewed troops and Pope John Paul II held mass. On Tuesday, Jackson is expected to receive the kind of welcome usually reserved for heads of state when his jet lands at Prague's VIP terminal and he is wisked away in a Rolls Royce. This tour is Jackson's first since he was cleared of child molestation charges by a U.S. court because of lack of evidence. Like Britain's Queen Elizabeth in May, he will get a full police escort through the ancient Czech capital, but not even monarchs can compete with the huge fleet of luxury cars readied to carry the star's entourage. Police have asked Czechs to stay away from the airport, but officials have encouraged well-wishers to come out and wave along the 15 km (10 mile) route into the city. Jackson's Prague date has avoided the controversy at other stops on his three-month tour through Europe, Africa and Asia. In South Korea, civic and religious groups reacted bitterly to a decision to let Jackson play two concerts in Seoul in October, saying it was unbelievable that the government agreed to to make an "amoral singer" the teenagers' idol. A planned stop in Casablanca was cancelled by Moroccan authorities, without explanation. A concert organiser said the government did not want 100,000 youths all in the same place. Jackson's Prague promoter, Serge Grimaux, said the normally reclusive Jackson wanted to arrive several days before the concert to mix with the thousands who throng the bridges and palaces of the Bohemian capital "like a normal tourist". "He has a big interest in meeting people and doesn't want to be too incognito," Grimaux told reporters. For those who don't see enough of Jackson, organisers are planning to erect a 10-metre (33 foot) water-filled statue of the singer on the same rock platform hovering above Prague where a monument to Soviet-leader Josef Stalin once stood. Never before has the sprawling parade ground adjacent to Prague Castle prepared for a spectacle like the one planned for the expected 130,000 paying guests on Saturday. Huge walls for two security perimeters -- to keep out those not paying the $21 for a ticket -- are being built on the Letna grounds which usually host ball fields, car parks, and a major east-west thoroughfare. "I'm not building Alcatraz, I'm just building a perimeter for the people that have paid for their tickets to get what they deserve," Grimaux said. 7270 !C13 !C33 !CCAT !GCAT !GENT A leading German architect has won an international competition to reshape huge parts of Bucharest ruined by late Stalinist dictator Nicolae Ceausescu's grandiose building programme. But the international jury warned the project might stay on the drawing board unless the Romanian government supported it with funds the still poor Balkan state will struggle to find. The $100,000 prize went to Mainhard von Gerkan for what the jury chairman, Columbia University Professor Kenneth Frampton, called "a beautiful and above all responsible plan for the development of Bucharest in the future." Von Gerkan, from Hamburg, is well-known in his homeland for designing airports and for building the eye-catching centrepiece of the Leipzig trade fair complex. The competition's goal was to "heal the urban tissue" ripped apart by Ceausescu's megalomaniac project to build the monstrous People's Palace in his own honour. The vast eyesore is inspired by monumental communist buildings in North Korea. A fifth of old Bucharest, including fine onion-domed mediaeval churches, was bulldozed to make way for the palace and avenues of pastiche neo-classical office blocks around it. After violent revolt ended communism in 1989 and Ceausescu died by firing squad, Romania was left with the unfinished palace, the second largest inhabited building in the world after the Pentagon in Washington, but with little idea how to use it. Reluctantly the city and government decided to complete the lavish interior decoration of marble and wood-panelling, while acknowledging a plan was needed to bring the vast hill-top edifice more into harmony with its surroundings. Local architects described the palace as an enormous wound in the city that could only be healed by bringing back some of the elegance and architectural good taste that won Bucharest the "Little Paris of the East" tag during the 1920s and 30s. Von Gerkan's project strives to "tame" the palace by surrounding it with medium-sized blocks, open parks and tree plantations. A business centre with high-rise blocks to the south should tower over Ceausescu's dream project, reducing it in scale. "The mixed uses the plan proposes are what every city needs," said visiting Mexican architect Jose Grinberg. "Also it's good because it's feasible to do at different stages." But the jury would put no figure on the costs of the plan or the length of time it would take, calling instead for the government to set up a task force for city development. "Bucharest should look to Barcelona, where the mayor set up a team 20 years ago to refurbish and develop the city," said Frampton. "That proved a very successful way of working." Only Berlin has offered more scope for ambitious city centre architecture in Europe in recent years, say Bucharest architects, but Romania has few of Germany's economic assets. So far new office building has focused on the historic centre and foreign investment has been small. Other renovation projects have already collapsed amid bureaucratic chaos and charges of corruption. Money that might have been spent on urban renewal has so far gone to the palace itself, finishing off what Ceausescu failed to accomplish. The palace currently houses a convention centre, galleries and the lower house of parliament. 7271 !E21 !E211 !ECAT !GCAT Russia was in festive mood for the first day of the school year on Monday, but the music, flowers and smartly-dressed children could not hide the fact that a good education -- once taken for granted -- is becoming a luxury. The celebratory atmosphere which traditionally marks the beginning of the school year for more than 21 million Russian children was echoed at a news conference given by new education minister, Vladimir Kinelyov. It began with music and ended with the distribution of bouquets but in between Kinelyov and, in a sign of the times, a banker, tried to explain why many of the pupils would find a shortage of textbooks when they turned up for lessons. "The gradual withdrawal of the state from tackling the problem of education, from ensuring schools have new textbooks, is hitting secondary schools across the country for a third year in a row," the ministry said in a statement. Kinelyov, introduced as a former top pupil, said publishers, interested in making money, were slow in fulfilling their state orders and that even private funding was difficult to get because banks did not want to lend without state guarantees. Textbooks are not the only problem. Young teachers get less than $100 a month and many of all ages and experience go unpaid for months, especially in remote regions of this huge country. Many Russians feel nostalgia for Soviet days, when a free and effective, if dull, education was provided by the state. Now, school buildings are crumbling and Western ills like truancy, drugs and vandalism are creeping in, although you could not guess it from the scrubbed faces of the children, the girls with huge white bows on their heads, starting school on Monday. "It's very difficult and tomorrow will not be easier," said Kinelyov. He clung to the idea that education should be provided by the state, but said private enterprise was gaining ground. New Russians -- the class of people who have got super-rich from the chaotic economic changes of the past five years -- view a foreign education for their children as important as an island villa, yacht or clutch of bodyguards. Russian President Boris Yeltsin's 15-year-old grandson plans to study at one of Britain's most expensive schools, British newspapers reported 10 days ago. They said the boy, also called Boris, would start next month at Millfield School in Somerset, western England, where the fees reach 15,000 pounds ($23,230) a year. Lower down the social scale, many middle class families are finding that the only way to get a good education for their children is to scrimp and save. One young Moscow father, Viktor, said he had to move his 13-year-old son Pavel to a partly-private school, where the fees are more than $1,000 a year. "He had to change schools because he was not getting a proper education. He had no foreign language lessons and only one year of geography. These subjects were on the curriculum but there were not enough teachers," he said. Kinelyov tried to console his audience, saying Russia had got out of similar crises before and could do so again -- without help from the West, which had lured many of its academics. "Western universities always had better facilities, but now that we've had a chance to compare we've realised that our education is the best," he said. But a group of teenagers waiting at the back turned the tables on the minister and his team, proving that, whatever its faults, a Russian education had made them very articulate. Yulia Greshena foiled attempts by the official running the news conference to bypass her question and told the minister politely but firmly to let her have her say. "My mother has gone out and bought books for 396,000 roubles ($80) even though her monthly pay is only 435,000 ($90). We bought them not because we did not have enough at school, there were lots, but because the teachers couldn't teach from them and we couldn't study from them," she said. "Why are we given books that are no good, when there are good books around?" she said. The minister was left floundering and an official turned quickly to the distribution of bouquets. 7272 !C12 !C18 !C182 !CCAT !GCAT !GCRIM Russia's Rosneft oil firm won a new lease of life on Monday after a Moscow court ruled it could keep its crown-jewel asset, a key Siberian oil producer coveted by a major rival. An arbitration court said prize producer AO Purneftegaz would stay at Rosneft, ending a high-stakes tussle between Rosneft and the big SIDANKO oil company for control over the enterprise. "The decision is key to Rosneft's survival," said Dan Lubash, managing director of Emerging Markets Europe at Merrill Lynch in London. Rosneft, the state oil holding company which is slowly being privatised, lost most of its assets in recent years when President Boris Yeltsin carved up the once government-owned oil industry into vertically-integrated, privatised companies. Monday's ruling could help keep Rosneft -- once Russia's number-one producer but now near the bottom of the list -- alive by letting it keep a company sitting on big untapped reserves. "Purneftegaz is not just a promising producer now -- it has a lot of promising reserves," said Rosneft press director Vladimir Tumarkin. "We consider today's decision an act of legal justice in Russia and a victory for Rosneft." Attractive Purneftegaz, a Western Siberian enterprise that pumped over eight million tonnes of crude in 1995, has long been the object of a corporate wrangle between Rosneft and SIDANKO. Under Yeltsin's sweeping oil industry restructuring, a 1994 government resolution awarded Purneftegaz to SIDANKO (the Siberian-Far Eastern Oil Company) -- but a 1995 executive order shifted ownership back to Rosneft. Vladimir Vetluzhky, an arbitration court member, told Reuters that the body had ruled against SIDANKO's lawsuit to have the 1995 decision reversed. Purneftegaz's output accounted for about two-thirds of Rosneft's production of 13 million tonnes last year. "Purneftegaz is much more important to Rosneft than it is to SIDANKO," said Stephen O'Sullivan, associate director of oil and gas at MC Securities in London. Spokesmen at SIDANKO, one of Russia's top five oil majors in terms of output, were not available for comment. SIDANKO, which energy analysts said wields little control over its key subsidiary, producer Chernogorneft, badly wanted Purneftegaz and its exports to pay off debts and taxes. "Purneftegaz is one of Russia's most promising oil firms," said petroleum economist Rustem Shagiyev of the government's Academy of Economics. "The ruling is very positive for Rosneft." But other analysts said Rosneft may need more to prosper in Russia's newly-competitive oil industry. "The decision means Rosneft is still in business as a vertically-integrated oil company -- but it will need more than just one big producer to compete," said oil analyst Steve Allen of CentreInvest consultancy in Moscow. Rosneft's other major asset is Sakhalinmorneftegaz, partner to four giant foreign energy projects in Russia's Far East. O'Sullivan said the tug-of-war for Purneftegaz may yet continue and that SIDANKO could appeal against Monday's court ruling -- but Tumarkin said the corporate tussle had come to an end. Purneftegaz shares barely reacted to the decision, nudging down to $2.28 on the Russian Trading System at 1445 GMT from Friday's close of $2.30. "If the decision had been different, it would have been a major blow to Rosneft," Lubash said. 7273 !GCAT !GDIS !GHEA The death toll in Romania's worst viral meningitis epidemic for a decade has risen to 14, a health ministry statement said on Monday. It said the epidemic had spread outside the capital to neighbouring areas, with 66 new patients hospitalised over the weekend. "Most of the dead were people in the over-59 age group," the statement said, adding that a total of 281 cases have been registered. Illness from viral meningitis lasts around a week. It affects the gastro-intestinal tract, causing high fever, headaches and vomiting. In 1986, Romania suffered an epidemic of the more dangerous bacterial meningitis which has killed some 15,000 people in central Africa this year. 7274 !GCAT !GVIO A Moslem warehouse and three homes were bombed overnight in the disputed Brcko area of northern Bosnia, where Serb authorities have vowed to prevent Moslems from returning to their homes, NATO said on Monday. "There were four explosions in Brcko overnight," Major Brett Boudreau, a spokesman for the NATO-led peace force, told a news briefing in Sarajevo. "Shortly after midnight, three explosions damaged homes and at around 0330 hours, one explosion damaged a Moslem warehouse containing building materials," he said. The bombings occurred on the edge of Serb-controlled territory around Brcko, a strategic, narrow corridor that links Serb territory in the west and east. The violence comes less than two weeks before post-war elections are to be held in Bosnia and less than a month since three Moslem houses were blown up in the Brcko area. The bombings early on Monday appeared to fit a pattern which sent "a message to the Moslems how welcome they are in the area," said Kris Janowski, a spokesman for the U.N. High Commissioner for Refugees (UNHCR). International relief workers say the Moslem-led Bosnian government has been pushing Moslem refugees to settle just inside Serb territory around Brcko to press Serb authorities into allowing Moslems to return to their homes. The Dayton peace agreement which ended fighting in Bosnia last November failed to resolve the future status of the Brcko area, which is considered the country's most volatile flashpoint. Bosnia's former warring factions are supposed to settle the territorial dispute through international arbitration by the end of the year. But Serb leaders and the Moslem-led government remain deeply divided. Citing the recent spate of violence around Brcko, Bosnian Prime Minister Hasan Muratovic said in a statement on Monday his government wanted an increased U.S. military presence in the Brcko corridor to defuse tensions. "This should increase the confidence of all people in the region -- Bosniak (Moslem), Croat or Serb -- that peace ultimately can be solidified," Muratovic said. Tensions were also running high in eastern Bosnia as Moslems kept up an effort to move back to the village of Mahala, which lies inside Bosnia's Serb republic. American troops serving in the NATO-led peace implementation force (IFOR) have stepped up patrols and set up checkpoints around the village after a violent confrontation last week. A group of Moslems, some of whom were armed, clashed with Serb police armed with clubs and guns last week when they tried to enter the village. Hundreds of Serb civilians blockaded U.N. police in their office in nearby Zvornik last Thursday in retaliation for NATO's detention of Serb police in Mahala. "We are concerned with the fallout of the Mahala incident, specifically in Zvornik," Alex Ivanko, spokesman for the U.N. International Police Task Force (IPTF) told reporters. "We understand the population in Zvornik is extremely unhappy with the resettlement of Mahala, and this has manifested itself in an anti-IPTF campaign being conducted by local radio (and television)," he said. NATO turned back 10 soldiers of the Moslem-led Bosnian army who tried to enter the village over the weekend, Boudreau said. U.N. relief officials were working to come up with an accurate list of pre-war residents from the formerly Moslem village to prevent Bosnian soldiers from slipping into the village posing as refugees, Janowski of the UNHCR said. "We are trying to establish with absolute certainty who used to live there before the war and these people will be allowed to go back and we will give them support," he said. "We will not support, however, attempts to put troops under disguise in the village of Mahala with weapons or without weapons. That just raises tension and stirs up trouble." 7275 !GCAT !GDIP !GPOL Albania on Monday hailed an agreement between Serbia and ethnic Albanian leaders in Kosovo, ending a six-year boycott of the state school system, as key to the guarantee of human rights in the region. "Albanian President (Sali Berisha) considers it a very important step towards guaranteeing national and human rights and freedom in Kosovo," Albanian television reported. Serbian President Slobodan Milosevic and the leader of the Albanian Democratic League of Kosovo (LDK), Ibrahim Rugova, signed the accord to establish a joint committee to reintegrate Albanian students into the Serbian education system. The agreement calls for the "normalisation of the education system of Kosovo for Albanian children", ending the boycott in which Albanian students studied in parallel schools. "President Berisha congratulated both sides and those who helped to bring about this agreement and said he hoped other important steps could be carried out through dialogue and good will for resolving the Kosovo problem," Albania's state-run television said. The deal is a major breakthrough in relations between the ethnic Albanian majority and Belgrade, which has been accused of human rights abuses since it revoked the province's autonomous status in 1989. The LDK pulled its students out of state-run education in protest and established its own unofficial administration the following year. Students were taught in private homes and community buildings in the Albanian language by Albanians. Albania had called for the Kosovo problem to be ironed out during negotiations last year in Dayton, Ohio, which ended Bosnia's 43-month war. But the United States and Germany led diplomatic pressure on Belgrade to settle its differences with the Albanian leadership, before lifting a so-called "outer wall" of economic sanctions that remain in place. Western governments have praised Berisha in the past for his repeated calls for calm in Kosovo, which borders Albania, and for his use of moderate language when criticising the conditions of Albania's ethnic kin in the region. 7276 !E21 !E211 !ECAT !GCAT !GPOL The Russian government sent its proposed 1997 budget to parliament on Monday with new spending and the revenue figures, a senior official said. Mikhail Zadornov, chairman of the State Duma lower house of parliament's budget committee, told Reuters the documents had been recieved for parliament to begin work on the draft. But he said data for revenue and spending were both bigger than discussed by the government last week, although the projected budget deficit was constant at 3.3 percent of gross domestic product. Zadornov said the draft sent to parliament envisaged spending 524.34 trillion roubles, revenue of 433.64 trillion and a deficit of 90.70 trillion. Interfax news agency said the government's original version had envisaged revenue of 422 trillion roubles, spending of 511 trillion and a deficit of 89 trillion. "That is quite a serious change, and I cannot say immediately what has caused this. I need a couple of days to study these documents," Zadornov said. The 1996 budget envisages a deficit of 3.85 percent of GDP, though ministers acknowledge revenue, especially from taxes, slipped badly in the first half of the year. The budget must be approved by both houses of the Russian parliament and signed into law by President Boris Yeltsin. This has previously been a lengthy procedure and Itar-Tass news agency quoted Zadornov as saying it could be difficult to get the current draft through parliament, which is dominated by communists and other conservatives. --Moscow Newsroom, +7095 941 8520 7277 !GCAT !GPOL !GVIO President Boris Yeltsin's chief-of-staff said the Russian leader was likely to have a phone conversation on Monday with his security supremo Alexander Lebed about the accord Lebed had signed with Chechen rebels. Anatoly Chubais told a news conference he had held two telephone conversations last Friday and earlier on Monday with Yeltsin, who is on holiday outside Moscow. The president sounded "energetic", Chubais said. "I cannot rule out that a phone conversation between Yeltsin and Lebed will take place later today," Chubais said. "Frankly speaking I think it will take place." Describing his phone conversations with Yeltsin, Chubais said: "He was speaking energetically. I had some proposals that he rejected and others which he approved. I don't think there are gronds to worry," Chubais added, referring to media speculation that Yeltsin, 65, might be ill or not be controlling events in Russia. The Kremlin said Yeltsin met Prime Minister Viktor Chernomyrdin on Monday at his holiday home outside Moscow. It was Yeltsin's first meeting with any government official since he left for vacation at the Rus hunting lodge a week ago. 7278 !GCAT !GREL Workers raced on Monday to complete renovations for the reopening on Thursday of Europe's biggest synagogue, a building Hungary's Jewish community says represents a triumph over persecution. The 137-year-old synagogue, on the edge of what became Budapest's Jewish ghetto under the Nazis, was hit by 27 bombs during World War Two. It has been painstakingly rebuilt at a cost of 1.35 billion forints ($9 million), 80 percent of which was donated by the Hungarian government. "This building symbolises the survival and the continuity of the Jewish people," said Gusztav Zoltai, acting chairman of the Association of Hungarian Jewish Communities. "It symbolises that Hitler came but the Jewish people cannot be destroyed." Former Israeli prime minister Yitzhak Shamir and his wife will attend the ceremony, along with Hungarian President Arpad Goncz, U.S. congressman Tom Lantos, who was born in Hungary, and members of the Hungarian Jewish community, officials said. Reconstruction began in 1991 on the Moorish-style building, which is half the length of a soccer field and can seat 3,000 people downstairs and in two balconies, where women must sit separately for certain ceremonies. Workers were busy polishing the mosaic floors, waxing wooden pews and painstakingly putting gold leaf on the 8.2-metre (26-foot) tall facade of the Ark of the Convenant which contains the Torah, the Jewish religious scroll. "I've been doing this for more than a month and now I am working night and day," said Eva Kovats, 35, as she applied postage-stamp-sized gold wafers using a paintbrush dipped in a coffee cup filled half and half with water and alcohol. The building, where thousands of members of Hungary's once powerful Jewish community took shelter during the war, had been in serious danger of collapse, architect Kalman Kalman said. "Big tiles were falling down from the roof and the pillars holding up the balconies in some places were paper thin," Kalman, who oversaw the project, told Reuters. He said restoration had been impossible while Hungary was under communist rule but the democratic government which took office in 1990 agreed to provide much of the funding. The remaining 20 percent came from Hungarian Jews, who number 80,000 to 100,000, and the international Jewish community. Hungary had a population of 800,000 Jews before the war but 600,000 died in camps under the Nazis. Zoltai said he regretted that the German government had not contributed to the rebuilding costs. "It would have been better if Germany had contributed, but this didn't happen," he said. But Jozsef Korn, president of the Jewish Community of Budapest, said the renovated synagogue, which is the world's biggest outside the United States, should revitalise Hungary's Jewish community, many of whom are ambivalent about their religion. "It (the community) certainly will grow," he said. "Young people will learn they are Jews and this gives them an opportunity to understand the Jewish culture and traditions." Korn said a spate of attacks by vandals this past year on Jewish cemeteries in Budapest and elsewhere in Hungary was worrying, but was a sign that Hungary, after years of being locked up behind the Iron Curtain, "is approaching Europe". "This is what happens in a democracy -- before (under communism) we couldn't talk about it," he said. "Of course we are worried but if these extreme things come up to the surface, the government knows it has to be kept under control." 7279 !GCAT !GPOL Moldova's breakaway Dnestr region staged a pompous holiday on Monday to mark the sixth anniversary of "independence". Soviet-era marches boomed out of the loudspeakers in central Tiraspol, the 200,000-strong capital of the Dnestr region, as several thousand Dnestr troops marched on the main Alexander Suvorov Square. "Happy birthday, republic!" read one poster in the square, which was decorated with flags of the self-styled republic. Some 5,000 local residents gathered to watch the parade. Several helicopters -- one trailing a huge Dnestr flag -- flew over the square, which is named after the 18th century Russian general who won the region from the Turks. The majority of the population there are Russian and Ukrainian speakers. "During these six years, Dnestr people have achieved a lot. We have defended our right to live on this land," Dnestr leader Igor Smirnov told a weekend meeting. He read out congratulatory telegrams from the heads of several autonomous Russian regions, and from the leader of Russia's Liberal Democratic Party Vladimir Zhirinovsky. Dnestr, a narrow slice of land in eastern Moldova, broke away in 1990 fearing its Slav residents could be left on the sidelines if Moldova merged with ethnic kin in Romania. But no other country has recognised its claim to statehood. The Dnestr government has barely started economic reforms and the festivities were marred by bread queues in Tiraspol. Inflation is high and the region has just reissued old currency, printing on extra zeroes to take account of a slump in the value of the rouble-coupon, which trades at around 520,000 to the dollar. Hundreds of people were killed in fighting between Moldovan security forces and separatists in 1992, before Russian troops led by Moscow's present-day security supremo Alexander Lebed intervened to impose a ceasefire. 7280 !GCAT !GDIP !GPOL Bosnian Croat leaders have ignored a U.S.-brokered deadline to abolish a separatist mini-state, saying on Monday they would act only after getting guarantees from Bosnian Moslem authorities. A senior official in the ultra-nationalist "Croat Republic of Herceg Bosna" said the Croats had still obtained no assurances that institutions of Bosnia's pre-war, Moslem-led republic were being dissolved simultaneously. Both the old republic and Herceg Bosna ministries are to be merged into a bi-national federal government enshrined by the 1995 Dayton peace treaty but still at the theoretical stage because of communal obstructionism on both sides. Herceg Bosna was carved out of southwest Bosnia in a 1993-94 war by a Croat militia full of rightist gangsters and sponsored by the government of neighbouring Croatia. Many Moslem inhabitants were driven out of their homes. As far as Moslems and U.S. mediators were concerned, Herceg Bosna formally ceased to exist on August 31 but the two sides were given until September 15 to complete the federal fusion. "Practically nothing has happened since August 31. The Croat Republic of Herceg Bosna exists today because we haven't got necessary guarantees that our federal partner transferred powers to the federation," said Ivan Bender, president of the entity's assembly and a member of its leadership. His statement contradicted an assessment by U.S. mediators last Friday that the Moslems had honoured their end of the deal and it was now the Croats holding things up. "All (agreements) signed by our senior officials in Geneva and elsewhere will be respected, but not unilaterally," Bender said in an interview in the Croat-controlled western half of divided Mostar, the "capital" of Herceg Bosna. "(Our) republic will cease to exist only when there are institutions which will take over its powers. We expect our federal partner to make a move simultaneously with us. "Herceg Bosna will not go up in a 'puff of smoke'," he said, rejecting a remark by a U.S. negotiator in Sarajevo last Friday that the Croat entity would do just that on August 31. Moslem and Croat leaders earlier agreed to do away with symbols of Herceg Bosna "statehood" by September 15 such as official seals on buildings and stationery. But Bender noted the two sides had not agreed on a federal flag and coat-of-arms -- a serious problem in a region whose people treat national insignia as a matter of life and death. Other Herceg-Bosna officials insisted their mini-state was not being disbanded but only combined with the federation. They said an undefined "Croat Community of Herceg-Bosna" would be retained as a minimum to protect Roman Catholic Croats against any move by more numerous Moslems to dominate them. Moderate Croats in Mostar said resistance to federal authority in southwestern Bosnia could be expected from a powerful Croat criminal underworld keen not to see profitable fiefs of racketeering crumble. Seizures of Moslem homes in west Mostar by Croat gangs continue to this day, more than two years after a European Union mission arrived to reconstruct a united municipality. Last month the Croats agreed under American duress -- threats of sanctions against Croatia -- to join Moslems on a new joint city council formed after EU-sponsored elections. But aides to Bosnia peace coordinator Carl Bildt said there was concern the two-week grace period given to Herceg-Bosna would leave the Croats room to manoeuvre out of the agreement as attention turned to Bosnia's elections on September 14. 7281 !G15 !G158 !GCAT !GDIP Portugal's Prime Minister Antonio Guterres arrived in Warsaw on Monday for a three-day official visit, during which Polish leaders were set to quiz him on their country's bid for rapid European Union membership. The socialist prime minister, in power since October, met his Polish counterpart Wlodzimierz Cimoszewicz and was later due to hold talks with President Aleksander Kwasniewski -- both former communists turned social democrats. Western diplomats said Portugal, among the four least wealthy existing EU members, is concerned that the entry of poorer formerly communist states like Poland should not undermine benefits Lisbon derives from the EU, such as structural funds for regional development. Poland is in turn keen that such problems should not be a stumbling block to its EU entry, its key foreign policy goal. On Tuesday Guterres will meet Poland's Roman Catholic Primate Cardinal Jozef Glemp and senior parliamentarians, before speaking at the European Institute in Lodz, southwest of Warsaw. He will address Warsaw's elite National School of Public Administration on Wednesday before returning to Lisbon. 7282 !GCAT !GPOL The Kremlin sent out a positive message about the health of President Boris Yeltsin on Monday but a barrage of questions remained unanswered. "The president is in a brisk mood," said Igor Ignatyev, the head of the presidential press service. "He is having a real rest now. (But) he is active and is in control of affairs." Yeltsin's near-total absence from public view for more than two months has caused speculation, denied by aides, that he is ill. His spokesman said Yeltsin, 65, had undergone medical tests and was now resting at his holiday home. He did not elaborate. Ignatyev's remarks gave more details than previous vague statements about the president's activities but it is still unclear why Yeltsin has been seen so rarely since June. Secrecy about the health of Kremlin leaders is traditional for Russia and the former Soviet Union but the public had become used to openness from the Yeltsin camp during four months of vigorous campaigning for presidential elections. There was surprise in June when Yeltsin simply disappeared. Early explanations included a lost voice, a sore throat and a cold caught during a trip to Kaliningrad at the end of June, which turned out to be Yeltsin's last campaign trip because he cancelled the next ones. July 3, the date of the runoff vote for presidential elections, raised eyebrows. The Kremlin assembled the world's media at a Moscow polling station to watch Yeltsin vote and kept reporters there for several hours until Prime Minister Viktor Chernomyrdin said the president had already voted at the Barvikha sanatorium. "The president is tired and is recovering from the campaign," said the Kremlin. Yeltsin had two heart attacks last year. His stiff demeanour and wooden 45-second inauguration speech on August 9 did little to quell speculation about his health. Aides publicly urged Yeltsin to take a proper holiday, but the Russian leader stayed in the Kremlin. He had two big policy questions to settle. One was coped with quickly -- forming a new government under Chernomyrdin. The second issue was war in Chechnya, where tens of thousands of people have been killed since Yeltsin sent in troops in December 1994 to crush an independence movement. Yeltsin has described it as his biggest and most painful problem. Last month he appeared to find a solution by making security chief Alexander Lebed his personal envoy in Chechnya with sweeping powers. Lebed burst into action and now awaits a decision on his solution from the president. But so far Lebed has so far failed to get a face-to-face meeting with the president. Analysts, doubting Kremlin denials about the president's health, said Yeltsin was either ill or unable to control the state of 150 million people. The rumour mill since June has been going non-stop -- new heart problems, liver disease, a nervous breakdown or a stroke. The Kremlin never explained why recent Yeltsin television appearences were obviously edited heavily and why only one trusted television crew was allowed to tape them. Aides could not say why he chose the Rus residence -- a hunting lodge 100 km (62.14 miles) from Moscow -- for his vacation instead of the well-equipped Barvikha resort and sanatorium closer to home. He left for Rus one week ago. Sceptics said Rus was so well sealed off there was no chance of saying for sure if the president was really there. It is unclear also why Yeltsin has stayed away from Lebed, who signed a deal with the separatists which could bring peace to Chechnya. Liberal member of parliament Vladimir Lukin said it could be a typical wait-and-see approach. "They will watch attentively for reaction at home and abroad," he told reporters. "Depending on the reaction they will either jump on the bandwagon of public approval and say they are drivers or say Lebed was wrong and things should have been done differently." Ignatyev said Yeltsin would meet Chernomyrdin on Monday to discuss Lebed's peace deal. 7283 !GCAT !GPOL Romania's ruling leftist party on Monday called for its nationalist junior partner to be thrown out of the governing coalition for attacking President Ion Iliescu over a friendship treaty with neighbouring Hungary. Iliescu's Party of Social Democracy (PDSR) urged Prime Minister Nicolae Vacaroiu to reform the 21-month-old alliance quickly to rid it of National Unity Party (PUNR) members. The PUNR, a nationalist anti-Hungarian party with a firebrand leader, holds four ministerial portfolios. One of them, the transport minister, quickly announced he would resign from the PUNR to stay in the government. A PDSR statement said leading PUNR members had shown "no will to disown themselves from the statements of PUNR leader Gheorghe Funar." Funar last week called for Iliescu to be impeached for agreeing a much-delayed friendship treaty with Hungary which is vital for both countries' ambitions to join the European Union and Nato. The treaty is due to be signed later this month. Funar, the PUNR's presidential candidate and mayor of the Transylvanian city of Cluj, argues the treaty is "an act of national treason granting privileges to Romania's ethnic Hungarian minority." 7284 !CCAT !GCAT !GDIS !GENV Gasoline spilled from Russia's far northern port of Dudinka into the Yenisei River early on Sunday, but the accident, at the port used by Norilsk Nickel, has been contained, the emergency situations ministry said on Monday. A spokeswoman said floating booms had been erected to prevented the slick, which was five km long and 10-15 metres wide, from spreading. Norilsk spokesman Sergei Vetchinin said he had no information about the accident. Norilsk, a major nickel exporter, uses Dudinka to export and receive supplies. The ministry spokeswoman said the spill took place at 2328 GMT on Saturday when gasoline leaked from a port refuelling station where ships anchor for fuel. The leak was brought under control about 12 hours later. "Past experience suggests this will be cleaned up in the next few days," she said. --Peter Henderson, Moscow Newsroom, +7095 941 8520 7285 !GCAT !GDIP !GVIO Russia on Monday welcomed Iraq's troop pullout from the Kurdish region of northern Iraq but called for international restraint in responding to the issue. "We are counting on all countries, including those neighbouring Iraq, not to use forceful methods to resolve this problem, (or) to threaten the sovereignty and territorial integrity of Iraq," a foreign ministry statement said. Iraqi leader Saddam Hussein on Sunday ordered his forces to withdraw from the northern region after two days of fighting in support of one Kurdish rebel faction against another, although some sources say Iraqi troops are still in the region. Saddam gave no timetable for the withdrawal and the United States has expressed scepticism that the pledge will be kept. U.S. President Bill Clinton has put American forces near Iraq on alert and speculation has mounted about possible military retaliation from Washington. Russia has generally taken a softer line on dealing with Iraq than Western countries since the end of the 1991 Gulf War. 7286 !GCAT !GDIP !GPOL Ethnic German families from Central Asia who moved to southern Ukraine in 1992 seeking a better life are disillusioned, frustrated and ready to leave. Four years waiting in vain for the good land, steady work, and decent housing they were promised when they came have eroded their hopes and their spirit. Six German families left this village last year for a new life in Germany. More plan to leave soon, seeing Germany as their only hope for a better deal. "We were promised we would drink wine in our private homes within a year. Time passed, but we still live in trailers with rats, humidity and dirt," said Vladimir Engel, a leader of Varyushyno's Wiedergeburt (rebirth) German society. "The mood is very low here. Our problems will only be solved with our departure for Germany. All of our hopes for Ukraine have died." The ethnic Germans, part of a community which has lived in the countries of the former Soviet Union for generations, arrived in Ukraine in 1992 at the invitation of Leonid Kravchuk, Ukraine's first post-Soviet president. But, four years on, they still live in temporary metal trailers and say they have neither hope nor illusions. They say German Chancellor Helmut Kohl, who was due in Kiev later on Monday for a three-day visit, can do little to change things. The Bonn government has already has given money to help the resettled Germans, but the Varyushyno Germans said this humanitarian aid had been stopped after several scandals within the Ukrainian-German Fund, responsible for the financing. Many of the former Soviet Union's ethnic Germans lived in an autonomous region on the Volga river until Nazi Germany invaded the Soviet Union in 1941. Soviet dictator Josef Stalin responded by branding the ethnic Germans fascists and spies and deporting them from the Volga region, and from other settlements in Russia and in southern Ukraine, to Central Asia. The slow journey back began in 1992, but only 4,000 Germans returned to Ukraine, including Varyushyno's 78 residents. "We already lost a sense of life. In 1931 the communists grabbed everything and said we were kulaks (landowning peasants). After the war started we were deported to Asia. Then we were sent to work in gold mines in the Ural mountains," said David Velsh, 72. "Why should we have any hopes because Kohl is coming to visit? He is such an important man and has some more significant tasks -- why he should he be bothered with us." Varyushyno's Germans say it is not easy to get Ukrainian citizenship or land. German dictionaries and books sit on many tables in homes as clear signs of future intentions. "We have not been paid wages for a year. We have no water or electricity. During the winter it is absolutely horrible when the heavy winds blow through our homes," said Elza Velsh. "Many of our children were born here in Ukraine but when we ask about citizenship we're told to collect 14 different certificates, including one on AIDS." 7287 !C42 !CCAT !E41 !ECAT !GCAT !GJOB !GVIO The general manager of rump Yugoslavia's biggest arms manufacturer said on Monday he had resigned as a strike by workers demanding unpaid wages and fresh orders entered its third week. Colonel Vukasin Filipovic was replaced at the head of the Zastava Arms plant by Branko Smigic but union leaders said they would not talk to management until their claims were met. "We will not go for talks with the new director until all the workers' demands are met," Zastava Arms trade union president Zoran Nedeljkovic said at the factory in Kragujevac south of Belgrade. On Monday, several hundred workers appeared at work, but many later joined colleagues continuing two weeks of demonstrations in the town centre. Some 98 Zastava Arms workers went on hunger strike last Tuesday, but "due to deteriorating health, we convinced some of our colleagues to give up the hunger strike, so now there are 82 of us in the factory," Nedeljkovic said. The Director of the Zastava Group, Srboljub Vasovic, visited the hunger strikers on Sunday and promised part of July wages would be paid by September 6 and holiday pay "a little later", but the protesters said this was not enough. Filipovic told Radio Kragujevac on Sunday a 9.74 million dinar ($1=4.88 dinars) contract had been signed with the Yugoslav Army, but Nedeljkovic dismissed this saying the sum would only cover one and a half salaries for each worker. "Support for the protest is growing and more workers are leaving the factory grounds after appearing at work this morning," a trade union source told Reuters. State media played down the strike and published only brief reports about the resignation, the appointment of Smigic and continuing protests. -- Amra Kevic, Belgrade newsroom +381 11 2224305 7288 !GCAT !GPOL Serbia has signed a breakthrough deal with leaders of the ethnic Albanian population in the troubled province of Kosovo, returning Albanian students to mainstream education, Serbia's prime minister said on Monday. "The Republic of Serbia welcomes the agreement, evaluating it as a humanitarian and civilising agreement which will enable the Albanian children in Kosovo to stop suffering from negative political consequences," Prime Minister Mirko Marjanvovic told a news conference. Serbian President Slobodan Milosevic and the leader of the Albanian Democratic League of Kosovo (LDK), Ibrahim Rugova, signed the accord to establish a joint committee to reintegrate Albanian students into the Serbian education system. The agreement calls for the "normalisation of the education system of Kosovo for Albanian children", ending a six-year boycott in which Albanian students studied in parallel schools. The deal is a major breakthrough in relations between the ethnic Albanian majority and the Serbian administration which has been accused of human rights abuses since it revoked the province's autonomous status in 1989. The LDK pulled its students out of state-run education in protest and established its own unofficial administration the following year. Students were taught in private homes and community buildings in the Albanian language by Albanians. "The agreement forsees the unconditional return of Albanian students and teachers and other educational staff to their premises in Kosovo. Other education-related issues will be addressed and settled at a later stage," the accord said. Diplomats regard tensions between the Albanian majority, which outnumbers Serbs by nine to one, and the Belgrade administration as potentialy the most explosive unresolved ethnic conflict in the Balkans. The United States and Germany have led diplomatic pressure on Belgrade to settle its differences with the Albanian leadership, before lifting a so-called "outer wall" of economic sanctions that remain in place. Sporadic violence has flared in recent months in Kosovo, which Serbs regard as the cradle of their civilisation, with a series of attacks on Serbian policemen. International human rights groups have accused Serbia of running a virtual police state with military and special police units to repress Albanians and protect Serbs. 7289 !GCAT !GPOL Russian President Boris Yeltsin will meet Prime Minister Viktor Chernomyrdin on Monday at his holiday home outside Moscow, Kremlin press service head Igor Ignatyev said. It will be Yeltsin's first meeting with any government official since he left for vacation at the Rus hunting lodge one week ago. Interfax news agency said Chernomyrdin would give Yeltsin his assessment of a meeting earlier on Monday with security chief Alexander Lebed, when the two men discussed Lebed's efforts to resolve the conflict in breakaway Chechnya. Lebed's press office has already said that Chernomyrdin viewed Lebed's peace plans as successful and that the prime minister was satisfied that a peace agreement signed last Saturday did not differ fundamentally from an earlier draft. Yeltsin, 65, has been seen rarely since before he won a second term in office in a presidential election on July 3. The absence has prompted speculation that the president is ill, but Kremlin officials have denied all reports. Ignatyev said earlier that Yeltsin was in "brisk mood" during his vacation. He had undergone regular medical tests and analyses before going to Rus, located some 100 km (60 miles) from Moscow. 7290 !GCAT !GPOL !GVIO Russian Prime Minister Viktor Chernomyrdin views the peace plans for breakaway Chechnya brokered by security chief Alexander Lebed as successful, Lebed's office said in a statement on Monday. The statement, released after a meeting between Lebed and Chernomyrdin, said the prime minister was satisfied that a peace agreement signed on Saturday did not differ fundamentally from an earlier draft document. The statement said Chernomyrdin was ready to participate in further efforts to regulate the situation in the republic. Noting that both sides had agreed not to use force, the statement said the peace plan was creating the preconditions for the formation of a transitionary coalition government in Chechnya, where separatists seek full independence from Russia. "All this, as was already stressed at the meeting, points to an optimistic forecast for the future," it said. Lebed, who returned at the weekend from signing the deal with separatist leaders, has yet to win approval for the agreement from Russian President Boris Yeltsin. 7291 !GCAT !GPOL Russian President Boris Yeltsin is in "a brisk mood" during an increasingly active vacation at his country residence, the head of the presidential press service said on Monday. Igor Ignatyev told Reuters by telephone that Yeltsin had undergone regular medical tests and analyses before going to the Rus residence 100 km (60 miles) northwest of Moscow last Monday. Earlier on Monday the Itar-Tass news agency quoted a Kremlin source as saying that Yeltsin had undergone a course of "preventative" treatment. Ignatyev said this had been nothing more than regular checks, but he could not give the results. "The president is in a brisk mood," he said. "He is having a real rest now. (But) he is active and is in control of affairs." The Kremlin has been repeatedly forced to deny that Yeltsin, 65, who suffered two minor heart attacks last year, had fallen ill again. The president has not met any officials since he arrived at the Rus residence. But Ignatyev said some meetings with top Russian officials were possible this week before Yeltsin receives German Chancellor Helmut Kohl on Saturday. 7292 !GCAT !GCRIM !GVIO War-crimes investigators prepared on Monday to exhume a mass grave in a Serb-held enclave of Croatia believed to contain 260 Croats executed in 1991 in an infamous early episode of "ethnic cleansing" in old Yugoslavia. The U.N. team of forensic scientists arrived at the Ovcara grave site in Eastern Slavonia on Sunday and were expected to map and clear the area before starting to dig later this week, U.N. spokesman Philip Arnold said on Monday. He said by telephone from the enclave that the project would be carried out over some six weeks under tight security. Exhumed remains will be examined and identified at a pathology laboratory in Zagreb, the Croatian capital. U.N. war-crimes prosecutors say Serb forces fighting to thwart Croatia's secession from Yugoslavia massacred the Croats after conquering Vukovar in a notorious three-month siege that devastated the Danube River town. Three officers of the Yugoslav federal army (JNA), which armed the minority Serb insurrection in Croatia, have been indicted for the killings by the International Tribunal on War Crimes in former Yugoslavia (ICTY), based in The Hague. Vukovar's fall and the ensuing murder of the hospital patients became the blueprint for "ethnic cleansing" -- sealing conquests by killing or expelling populations -- perpetrated on a broader scale in Bosnia's war, diplomats say. The excavation became possible after Serbs, stunned by the 1995 defeat of fellow rebels in west Croatia by the Croatian army, agreed to hand Eastern Slavonia back to the government after a transitional period under U.N. administration. Guarded by Jordanian troops in the 5,000-strong U.N. Transitional Authority (UNTAES) force, the Ovcara site is located in a field a few km (miles) south of Vukovar near the Danube border with rump Yugoslavia. "The ICTY team, numbering about 15, have begun their work. The first thing they will do is plot the site from different angles, do a grid. We expect they will start digging later this week," Arnold said by telephone from Vukovar. A British television documentary crew hired by ICTY will record the excavation "for historical purposes", he said. But regular news media will be barred from the site during digging to avoid stirring volatile public reaction on the Croat or Serb sides that might disturb the project. The destruction of Vukovar and the purge of Eastern Slavonia's majority Croat community amount to the most bitter grievance held by Croats against Serbs today as Croatia and Yugoslavia slowly begin to normalise their relations. Hundreds of Croat men in besieged Vukovar sought refuge in its main hospital, hoping they would be evacuated safely. But they were instead led away to slaughter after the town fell to JNA troops and local Serb irregulars, the ICTY says. On November 20, 1991, Serb forces removed some 300 wounded Croat patients, hospital staff, soldiers and political activists from the hospital, tribunal prosecutors say. They were taken to a farm at Ovcara where they were beaten, herded into groups of 15-20, loaded onto trucks and driven away onto a dirt track between a field and wooded ravine, they say. JNA troops and Serb paramilitaries then shot some 260 men and bulldozed them into a mass grave, prosecutors say. JNA officers Mile Mrksic, Miroslav Radic and Veselin Sljivancanin were indicted last November for war crimes and crimes against humanity for the Ovcara massacre. President Slobodan Milosevic of Serbia, main republic in rump Yugoslavia, has disregarded numerous demands by the ICTY to extradite the three officers, who are believed to be living in the Belgrade area or in Serb-controlled Bosnia. ICTY teams spent much of this summer excavating several mass graves of Moslems in eastern Bosnia believed to have been executed by separatist Serb forces in the July 1995 conquest of Srebrenica, a supposed U.N. "safe area". 7293 !GCAT !GPOL !GPRO Russian President Boris Yeltsin has completed a series of medical tests and a course of "preventative" treatment and he now needs to rest, Itar-Tass news agency said on Monday, quoting a highly-placed Kremlin source. Tass gave no details about the tests or what preventative treatment had been undergone by the president, who has been on vacation outside Moscow for the last week. The agency quoted the Kremlin source as saying Yeltsin would continue his vacation and that the president had no plans to leave the Moscow region. "Rest is the main thing for him," the source said. The source said Yeltsin felt well and was closely following developments in breakaway Chechnya, where security chief Alexander Lebed signed a peace deal early on Saturday. Yeltsin had no plans to meet anyone at present, but the source noted that the president's plans could be changed at any time. Yeltsin's prolonged absence has prompted speculation that he is ill, but the Kremlin has denied all rumours, saying only that Yeltsin, 65, is tired after a gruelling election campaign. The president had two heart attacks last year. 7294 !GCAT These are the leading stories in the Skopje press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. DNEVNIK - Despite the changes to the territorial division law reached after talks with the ethnic-Albanian party of Democratic Prosperity, the Macedonian government does not offer a new municipal order in the country but an ethnic separation done according to the ambitioins of the ruling coalition. - The breakout of polio in Albania should not raise concern. There is no risk of an epidemic in Macedonia, said health authorities that claim to have eradicated the illness from this region. NOVA MAKEDONIJA - Defense authorities will have to rigorously control the recruitment of soldiers and prepare the necessary groundwork for a professional, voluntary army. The authorities worried by the extremely high rate of military service evasion. VECER - Members of parliament are bound to get involved in the dispute about the jurisdiction of the capital, Skopje, over its five municipalities. The PDP is asking for the addition of a sixth ethnically Albanian municpality. -- Skopje newsroom +389 91 201196 7295 !GCAT !GPOL !GVOTE A top Moldovan communist said on Monday he would run for president in the tiny former Soviet republic, joining 13 other candidates in the presidential race. But only three candidates -- incumbent Mircea Snegur, parliamentary chairman Petru Lucinschi and Prime Minister Andrei Sangheli -- have so far submitted lists with the signatures needed to compete in the November 17 election. Communist candidate Vladimir Voronin told Reuters he had a good chance and expected support from those disillusioned by painful market reforms. "Like in Russia, the surge of anticommunism in Moldova started to subside in late 1993, and too many people find "the damned Soviet past' very attractive now," said Voronin, the Communist Party's 55-year-old chairman. Snegur, backed by his Party of Revial and Harmony and a group of pro-Romanian forces, agrarian Sangheli and independent Lucinschi had so far been considered favourites. Voronin, the last Interior Minister of Soviet Moldova, which is wedged between Romania and Ukraine, said he did not plan an alliance with any of the three and was convinced that his party would win. He hoped the former Soviet republics would reunite "voluntarily". But he added: "We understand present-day realities and have to formulate the issue mildly." 7296 !GCAT Lithuanian newspapers carried the following reports on Monday. Reuters has not verified these stories and does not vouch for their accuracy: LIETUVOS RYTAS - All Lithuanian inhabitants of legal age who have lived in the country for more than 183 days in the current year will have to declare their property and income to local tax inspectors starting in 1998. - Lithuanian Airlines expects a 9.3 million litas profit this year. The company had 6.992 million litas profit during the first seven months of 1996. RESPUBLIKA - The draft project on the Kaunas Free Economic Zone will be submitted for parliament's consideration in September. - The director general of the Swedish company Baltic Fast Food Company AB Gustav Vegert sent a letter to Lithuanian President Algirdas Brazauskas and accused his former business partners of threatening to send mafia hitmen to kill him. -- Riga newsroom +371-7226693 7297 !GCAT The following are the main reports in Estonia's newspapers on Monday. Reuters has not verified these reports and does not vouch for their accuracy: ALL NEWSPAPERS - A new school year begins in Estonia today. - The Labour Party will back former Communist leader Vaino Viljas for president in the September 20 election. POSTIMEES - Kuressaare is the first town in Estonia to place video cameras on the main streets to help police keep law and order. EESTI PAEVALEHT - Leaders of Estline reject allegations by Meyers shipping yard that the shipping firm's failure to carry out urgent repairs was the reason for the sinking of the ferry Estonia. ARIPAEV - The Bank of Estonia will confirm the merger of Savings Bank and Industrial Bank today. -- Riga newsroom +371-7226693 7298 !GCAT These are the main stories in Latvian newspapers on Monday. Prepared for Reuters by the Co-operation Fund. Reuters has not verified these reports and does not vouch for their accuracy. ALL NEWSPAPERS - Prime Minister Andris Skele said it was necessary to discharge the chief of the tax collection service, Imants Grikis. Skele said Grikis was a weak administrator. DIENA - The government working group, which was established to draft legislation for dealing with refugees, has submitted its proposal to the state chancellor. - Nineteen Latvian soldiers returned on August 31 from military exercises in the United States. NEATKARIGA RITA AVIZE - Environment protection activists organised a common prayer near the sea coast. BIZNES & BALTIYA - The Bank of Latvia suspended last Friday the activity of the bank Atmoda. - Prime Minister Andris Skele announced last Friday that he is still preparing to meet Russian Prime minister Viktor Chernomyrdin. DIENAS BIZNESS - The Bank of Latvia on Tuesday celebrates its fifth anniversary. - In the first six months of 1996 the insurance company Balta posted a profit of 207 thousand lats. -- Riga newsroom +371-722 6693 7299 !GCAT Here are highlights of stories in Romania's press on Monday. Reuters has not verified these stories and does not vouch for their accuracy: Business: ROMANIA LIBERA - Oustanding debts to Romania from other countries amount to $2.37 billion and 1.3 billion transferable roubles, unchanged since revolution of 1989. - Multinational company Efes Pilsener will invest $140 million to build factory in Romania. - Swedish group Electrolux opened branch in Romania to boost sales in Romania. ADEVARUL - National Bank will launch 50,000 lei banknote which will be put in circulation starting November. TINERETUL LIBER - Arrears in economy amounted to 14 trillion lei in mid- August, Industry Ministry sources say. ZIUA - Employees of Bucharest hotel Ambasador bought 41 percent of hotel, which means they now own it as they had already held 59 percent. LIBERTATEA - Government approved 10.1 billion lei fund to subsidise interest on CEC savings bank credits for housing construction but parliament has yet to adopt special law on these credits. CURIERUL NATIONAL - ARO SA carmaker signed cooperation accord with Spanish car manufacturer Suzuki-Santana. Spanish company will assemble ARO cars. General: ROMANIA LIBERA - Opposition Democratic Convention (CDR) bloc to start electoral campaign in Transylvanian town of Alba Iulia on September 8. - CDR presidential candidate Emil Constantinescu starts electoral campaign for the November 3 presidential polls in the village of Ruginoasa, Iasi county, on September 4. - President Ion Iliescu's candidacy for a new presidential term is unconstitutional and his campaign for the November 3 polls is breaching present laws, CDR says in statement. - Human rights defence league LADO says it needs some 16,000 local observers for the November 3 polls to cover all polling stations. ADEVARUL - Tenants living in houses nationalised by the former communists threaten to stage rallies on September 5 to protest against delays in implementing a new law allowing them to buy the houses. - Newspaper publishes speech by Socialist Party (PS) leader Tudor Mohora at the official launch of his candidacy for presidential elections and his electoral programme. EVENIMENTUL ZILEI - Iliescu said Prime Minister Nicolae Vacaroiu might sign the Romanian-Hungarian treaty. AZI - Former Prime Minister Theodor Stolojan quoted as saying he would not get involved in politics. VOCEA ROMANIEI - PDSR, "the country's strongest political force", gets ready to rule Romania until year 2000, reads a front page headline including a report on the four years of governing by Prime Minister Nicolae Vacaroiu. LIBERTATEA - As many as 250 people hospitalised so far due to epidemic of mild meningitis. DIMINEATA - Newspaper publishes speech by PDSR executive president Adrian Nastase at meeting with PDSR mayors. ($=3,162 lei) -- Bucharest Newsroom 40-1 3120264 7300 !GCAT These are the leading stories in the Belgrade press on Monday. Reuters has not verified them and does not vouch for their accuracy. POLITIKA - Polish Foreign Minister to visit Yugoslavia on September 3 and 4. - Banks must find ways to attract depositors, says president of Union Banka Dragoljub Vukosavljevic. He says long-term dinars savings practically non existent. - School year starts in Yugoslavia's elementary and secondary schools. - Teachers will be paid July and August wages by the end of the month says Serbian education minister Dragoslav Mladenovic. - Director of Zastava arms Vukasin Filipovic resigns and Branko Smigic, formner head of the maintenance department appointed acting director. NASA BORBA - Yugoslav-Macedonian expert commission for border demarkation to meet in Belgrade today. - Serbs in eastern Slavonia are not thinking of separation from Croatia but there are proposals for a special status, says president of the government of the area Vojislav Stanimirovic. - the Hague tribunal investigators start exhumations of mass grave from 1991 in Ovcara near Vukovar, says U.N. spokesman Philip Arnold. VECERNJE NOVOSTI - Yugoslav airlines JAT soon to open routes from Belgrade to Abou-Dhabi to Singapore as well as lines to Banja Luka in Bosnia, and Sofia. BORBA - Sombor oil plant Sunce building a new 30 cubic meter silo. The works will cost 11 million dinars. -- Belgrade newsroom +381 11 2224305 7301 !GCAT These are the leading stories in the Sarajevo press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. OSLOBODJENJE - No visible signs in Mostar that Bosnian Croat mini-state of Herceg-Bosnia has dissapeared as required under deal that should have taken effect on August 31 . DNEVNI AVAZ - Former food production company "Agrokomerc" from Bosnia's northwestern Bihac area renamed "Agrokar". It restarts chicken breeding with injection of 24 million German Marks from Turkish "Kargroup". - International food, agriculture and textile fair to be held in Sarajevo September 3-7. --Sarajevo newsroom, +387-71-663-864. 7302 !GCAT !GSCI A Russian Soyuz space craft with two Russians and France's first woman cosmonaut aboard landed safely in Kazakhstan on Monday, a spokeswoman for Russian space officials said. "The capsule landed successfully at 11.41 a.m (0741 GMT)," she told Reuters by telephone. The spokeswoman said the capsule with Frenchwoman Claudie Andre-Deshays and Russians Yuri Usachev and Yuri Onufrienko had landed in steppeland some 110 km (75 miles) south-west of the planned new Kazakh capital Akmola. "The cosmonauts are in good condition...they have left the capsule...and greeted ground specialists with smiles," she said. Andre-Deshays spent 16 days aboard the Mir orbiting space station carrying out biological and medical experiments. Usachev and Onufrienko have been on Mir since February. Russians Valery Korzun, Alexander Kalery and U.S. astronaut Shannon Lucid are still aboard the station. Lucid, on her first mission to Mir, is to leave this month aboard a U.S. shuttle. 7303 !GCAT Following are the main stories in Croatian newspapers on Monday. VJESNIK - 77 percent of the registered Bosnia-Herzegovina voters went to the polls in Croatia. - Exhumation that started at the Ovcara mass grave to last three weeks and to be followed by identification efforts. VECERNJI LIST - The housing market: Flats most expensive in Zagreb and Split, the price of a square meter ranging between 1,700 and 3,600 German marks depending on the flat's quality. SLOBODNA DALMACIJA - The American IFOR soldiers to remain in Bosnia even after the expiration of their one year mandate. - The church is independent from politics: Croatian bishop's conference will not take part in the resolving of the Zagreb crisis. - 1,000 pieces of medical equipment to be purchased using the finances of the World Bank's $40 million loan. -- Zagreb Newsroom, 385-1-4557075 7304 !GCAT Here are highlights of stories reported by Hungary's press, based on information by Nepszabadsag's Hungary Around the Clock service. For further details on how to subscribe to Hungary Around the Clock, please contact Monica Kovacs at (361) 351 2440 or fax your request to (361) 351 7141. ALL PAPERS - The leading bodies of the two governing parties Saturday gave their blessing to the draft Hungarian-Romanian basic treaty, while the opposition parties continued to criticise the text of the agreement, setting the stage for a stormy debate during tomorrow's special session of Parliament. - Peter Tolgyessy, a former president of the Free Democrats, declared Saturday that he is quitting the party. - Free Democrat President Ivan Peto Saturday said he considers it unacceptable that the Socialist Party and the National Federation of Trade Unions have worked out a new tax table. - Prime Minister Gyula Horn said the government attaches great significance to efforts aimed at improving the state of Hungarian agriculture as he opened the 72nd national agricultural and food industry exhibition in Godollo on Friday. (Sat.) - Romanian President Ion Iliescu said on the weekend that he would prefer to sign the basic treaty with Hungary either in Budapest or Bucharest rather than in Vienna. - A Hungarian military contingent has departed for the Sinai peninsula to replace Hungarian troops serving as UN peacekeepers since last September. - Hungary began its football World Cup challenge on the right foot Sunday with a 1-0 victory over Finland in Budapest. VILAGGAZDASAG - This paper details the trends in the Hungarian economy as forecast by the research firm GKI and Postabank. - The Health Insurance administration approved a supplementary budget on Friday, forecasting a HUF 29.3 billion annual deficit for 1996, instead of HUF 1.5 billion in the original budget. - According to a recent list in the Economist, office rents are higher in Moscow and Prague than in Budapest, this paper reports, indicating that the real estate market is more developed here. - The national oil and gas firm MOL released its first-half results Friday, showing after-tax profits of HUF 10.07 billion on revenues of HUF 239.2 billion. - The Budapest power plant Elmu is likely to record a loss of well over HUF 3 billion in 1996, according to the HUF 2.05 billion projected for this year. MAGYAR HIRLAP - Welfare Minister Gyorgy Szabo Friday pledged that monthly family allowance could increase by HUF 300-500 per child next year. (Sat.) - Real wages were down 7.2 per cent in the first half of 1996, according to a Central Statistics Office report, unable to keep pace with average annual inflation of 25.8 per cent. - The delay in the energy price hike will likely cost energy companies between HUF 100 million and HUF 1 billion, with electricity firms getting the worst of it and gas firms absorbing the lesser loss. - The BUX index skyrocketed by 98 points on Friday, reaching a record high of 3,470. Most of the increase is due to record prices for shares in pharmaceutical companies. NAPI GAZDASAG - Representatives of the State Privatisation and Holding Co. and California-based ICN Pharmaceuticals signed the sales contract for the Hungarian pharmaceutical producer Alkaloida last Friday. (Sat.) -- Budapest newsroom (36-1) 266 2410 7305 !GCAT !GREL The 1,000-year-old Benedictine monastery at Pannonhalma that Pope John Paul will visit this week has been menaced by Mongols, raided by Turks and had its wealth confiscated by an Austrian emperor. But Archabbott Asztrik Varszegi says one of the biggest challenges lies ahead as this Roman Catholic outpost in western Hungary helps forge new links with the huge Orthodox community to the east. The Pope will celebrate the 1,000th anniversary and meet retired monks, but Varszegi had hoped the monastery would also host a historic meeting of the Pontiff and Alexiy II, patriarch of Russia's Orthodox Christian Church. The patriarch cancelled in July and no alternate date has been set. Varszegi admitted it was a disapointment but added: "This is a temporary short circuit because necessarily this dialogue will have to start." The abbott, who is 50 and known as one of the more forward-looking clerics in Hungary, said the Vatican had been laying the groundwork for years to heal the centuries-old rift with Orthodoxy. The Great Schism of 1054 split Christendom after a host of theological feuds, including one over the bodily nature of Christ. Pope Pius XI, during the 1920s, urged the foundation of three Benedictine monasteries in the U.S., Germany and Belgium using the Byzantine rites, to prepare for the day when the bulk of the Orthodox world was freed from communism. "But when Orthodoxy regained its freedom the old wounds unfortunately were reopened," Varszegi said. "And this tension is the background as to why...there is no meeting. "Time and patience are required," he added. In its 1,000-year history, Pannonhalma has often been a crossroads of east and west, and not always in a way the monks would have wished. The monastery was founded in 996, supposedly by Szent Istvan, Hungary's first Christian king. It is situated on a hilltop, and built like a fortress, because Hungary's early Christians had plenty of enemies. In 1241 and 1242 Hungary was overrun by Mongols who forced the king to flee to the Adriatic and destroyed about half of Hungary's 80 Benedictine monasteries, though not Pannonhalma. The monastery was not so lucky 300 years later when the Turks occupied most of Hungary. They conquered the castle in 1585, torched buildings and forced the monks to leave. The monastery revived again in the early 1600s and flourished in the 18th century until the Austrian emperor Joseph II in 1786 prohibited monastic vows and closed it. Its assets were confiscated but later returned. During World War Two Pannonhalma served as a refuge for people persecuted by the Nazis, while the Jewish community stored its torah scrolls there for safekeeping, Varszegi said. After the war, Hungary's communist authorities allowed Pannonhalma to stay open but the order was partially suppressed and the monks had to find work outside. Today 68 monks live amidst the monastery's eclectic but splendid buildings, which include an exquisite mediaeval church, a cloister, a baroque refectory where the Pope will eat at least one meal, and a library filled with illuminated manuscripts and other treasures. But the monastery is up to date, too. It has its own homepage on the Internet and its museum contains a homemade computer built by a monk in 1978 when such devices were banned under communism. "During the dictatorship...while in the rest of Hungary little was known about electronic technology it was already being taught in Pannonhalma," Varszegy said. "Among the monks you will find traffic engineers, mathematicians and landscape architects...so it was most natural to suggest that Pannonhalma should enter the Internet." Varszegi sees the homepage as one way Pannonhalma can reach out to its sister religions to the east. "We have had no concrete feedback but I trust that this is the case," he said. But Varszegi isn't relying on the Internet alone. He has invited the pope of the Coptic church as well as leaders of Hungarian Protestant churches and the Serbian, Romanian and Bulgarian Orthodox to a meeting at Pannonhalma on September 14. "It is a one day meeting," he said. "Protocol is often counterproductive so this is going to be a fraternal meeting where they will be able to speak on a fraternal basis. "We (Pannonhalma) are a fortress and whoever enters within our walls has to lay down his arms -- whether they are of the ecclesiastical or worldly kind. "It is only on the human level that we are really able to communicate." 7306 !GCAT !GDIS Twenty people died and another 19 were injured, many of them seriously, when a bus swerved off a country road outside Mexico City and crashed into a parked truck and a pickup, police said. The bus, which was carrying poor Mexican workers and students from the capital to the town of Cuautla 45 miles (70 km) to the south, was destroyed. "It left the road and on tipping over crashed into the parked vehicles," Federal Highway Police commander Marco Antonio Vargas Rodriguez told Reuters Television. "Evidently it was travelling at excessive speed." The crash tore off the roof and cabin of the bus, hurling passengers, possessions and seats over a wide area. Red Cross workers recovered bodies and body parts with stretchers from the grass, tipping the corpses in a heap inside a local forensic medicine van. Women and children were among the dead. The truck and the pickup, which were parked off the road while their owners harvested tomatoes and cucumbers from a nearby field, were also destroyed. "It is terrible. I have seen a lot of tragedies in my life but this is one of the worst," a reporter for Radio Red, a private radio network, said from the crash scene. Relatives of the victims, however, displayed characteristic Mexican fatalism. "I think it was bad luck. When death comes it can strike anywhere, even at home," Maria de la Luz Sanchez told reporters. 7307 !GCAT !GCRIM A member of Pakistan's Under-19 cricket team was released on bail on Monday after being charged with allegedly raping a woman at her hotel, where the cricket team was also staying, a police spokesman said. Zeeshan Pervez, 18, was released from jail after posting US$5,700 bail, the spokesman said. A court hearing will be held on Wednesday to determine if there is sufficient evidence to warrant a trial, authorities said. The 36-year-old visitor, a Jamaican who has lived in the United States since 1978, told police the incident occurred on Saturday night. Pervez allegedly entered her hotel room and offered two of her three children some of his towels so they could go to the pool, the police spokesman said. Two children left the room, leaving their three-year-old sibling asleep in the room with the woman and Pervez. The children returned 30 minutes later and found their mother on the phone, crying and saying she had been raped, police said. Pervez told police that the woman pulled him onto the bed and asked him to have sex with her. The 15-member Pakistani youth cricket team began a four-day match against Jamaica on Saturday in Kingston. Pervez batted for 6 that day but did not play on Sunday. Team officials told reporters he was out due to "food poisoning" but in fact he was in police custody at the time. 7308 !GCAT !GCRIM !GPRO A Mexican judge has ordered the arrest of Mexican boxing idol Julio Cesar Chavez on tax fraud charges, the Finance Ministry said on Monday. The ministry said it asked police to arrest the former world champion on charges he and two former business partners failed to pay taxes worth some $1.3 million in 1993. "The first district judge in Sinaloa ... decided to order the arrest of Mr. Julio Cesar Chavez" and two others "on tax fraud charges," the ministry said in a statement. Auditors discovered that during the 1993 fiscal year, Chavez and his associates had falsified documents in order to obtain large tax deductions and had also tried to illegally write off paying value-added taxes, the statement said. Chavez, who has denied charges of tax fraud, has reportedly been in San Diego training for an upcoming fight with little-known Joey Gamache. Attempts to reach him were unsuccessful. Chavez lost his WBC super-lightweight title to Oscar de la Hoya on July 6, and said a win over Gamache would gain him a rematch with de la Hoya in January. Chavez has amassed an impressive pro boxing record of 97-2-1. Considered the world's greatest fighter pound-for-pound just a few years ago, Chavez has since been plagued by a series of problems both in and out of the ring. Tax officials began to audit Chavez's records several years ago after a former attorney general accused him publicly of tax fraud. He has denied all charges of tax evasion. Earlier this year, Chavez's wife charged him with assault and a Mexican newspaper alleged that Chavez's businesses were linked with drug lords in his home state of Sinaloa. Chavez recently took out full-page ads in Mexican newspapers to deny those claims. He said former friends and family had betrayed him. 7309 !GCAT !GVIO The whereabouts of 41 soliders were unknown on Monday, three days after leftist guerrillas overran their military base in a jungle-covered region of southwest Colombia, authorities said. Defence Minister Juan Carlos Esquerra said at least 27 soldiers were killed in the stunning attack late on Friday on the Las Delicias military base in Putumayo province and 41 others were unaccounted for. "Apparently they were taken as hostages by the guerrillas," Esguerra said in an interview with the Caracol radio network. Shortly after he spoke, Caracol said six soliders from the military base had been discovered in the surrounding jungle by army reinforcements sent into the area over the weekend. It also said the Revolutionary Armed Forces of Colombia (FARC), the rebel group responsible for Friday's attack, had announced in a communique that it was holding 59 prisoners from the military base and planned to release them this week. Esguerra said 60 security force members were killed in two days of fighting after guerrillas launched a nationwide offensive on Friday evening that included attacks in the capital, Bogota, and 12 of the country's 32 provinces. The worst attack by far was in Putumayo where hundreds of FARC rebels overran the Las Delicias base on the banks of the Caqueta River. Survivors have said some 100 soliders at the base were caught totally off guard by the attack and had no time, under a hail of automatic gunfire and explosions from mortars, grenades and dynamite, to take cover in a protective trench dug around the base camp's perimeter. "They attacked us from all sides," Norbey Villa Gutierrez, a 19-year-old solider recovering from gunshot wounds in Bogota's central military hospital, told the El Tiempo newspaper. "We couldn't do anything, nothing at all." The attack was the single bloodiest guerrilla assault since last March when FARC rebels killed 30 soldiers in an ambush in Narino province, near its border with Putumayo. That attack was described at the time as the worst in more than three decades of armed insurgency in Colombia. 7310 !GCAT !GPOL !GVIO Mexico's President Ernesto Zedillo, delivering on Sunday his second State of the Nation address, condemned political violence by a new leftist rebel force as "terrorism" and pledged to fight it with "the full force of the State." "We Mexicans do not accept the appearance of bloody and outdated uprisings that attempt to close the path to democracy and ... to impose their intolerant will on the country," Zedillo said at the San Lazaro legislative palace in Mexico City. "We do not accept the appearance of groups that use terrorism to murder and destroy and cause fear." Zedillo, his voice breaking with emotion as he spoke, received a standing ovation from legislators. "We will pursue every terrorist act ... we will act with the full force of the state," he said. Zedillo ploughed through his speech despite a bizarre protest by an opposition lawmaker who donned a mask of a pig's head at the foot of the podium where he was speaking. Marco Rascon of the opposition leftist Democratic Revolution Party (PRD) held up placards criticising the government, although one read simply: "Oink oink oink oink." Television viewers watching the live speech were spared the spectacle as cameras remained trained on a clearly annoyed Zedillo. Rascon's party leaders later expressed embarrassment. Across town up to 3,000 people took part in a peaceful "alternative address" while Zedillo spoke. Gathered at the landmark Angel of Independence monument on the central Reforma boulevard, the protesters condemned Zedillo's economic policies for not doing enough for the poor. Participants included debtors' groups, a representative of the fledgling civil arm of Mexico's Zapatista rebels and peasant farmers from Oaxaca and Guerrero states. Zedillo pledged that security forces would respect the law as they hunt down the rebels of the Popular Revolutionary Army (EPR), which launched attacks Aug. 28 in several states in which at least 14 people died. The EPR was not linked to the Zapatistas, who were in peace talks with the government. At least two more people died in sporadic clashes on Friday and on Saturday as police and army forces hunted the EPR rebels in the states of Michoacan and Oaxaca. There were no reports of incidents on Sunday. "Those who take recourse to violence seek to promote repression," Zedillo said. "The government will not be provoked in that way." Officials say the EPR, which made its first appearance just two months ago in the southern state of Guerrero, is a hardline Marxist-inspired rebel force with no popular support. The EPR accused the government of using murder, torture and political oppression to maintain a corrupt regime. Zedillo said political reforms, including a pact between all four main parties to overhaul electoral laws, meant Mexico was on the way to a fully functioning democracy in which political violence was invalid. The country's justice system and police forces were in need of deep reform before they could win the respect and trust of the Mexican people, he added, though he pledged to battle corruption. He also called for renewed efforts to find a negotiated solution to the 32-month-old Zapatista uprising in the southern state of Chiapas. Zedillo, who took office on Dec. 1, 1994, for a six-year term, within weeks found himself battling the collapse of the peso and an ensuing deep recession. He declared Mexico's economic "emergency" over, saying the economy was clearly on the road to recovery. He projected economic growth next year of at least four percent and said growth rates in the following years would be higher. Inflation unleashed by the peso crisis was increasingly under control, he said. He said his government would maintain fiscal and monetary discipline and the free-floating exchange rate of the peso. 7311 !GCAT !GDEF !GPOL !GVOTE The head of Nicaragua's army on Monday quashed rumours that members of former dictator Anastasio Somoza's National Guard would be given army posts after the Oct. 20 presidential election. "I want to make it very clear, so that nobody raises false expectations -- no former member of the disbanded National Guard, independent of their rank or the position they occupied, can enter the Nicaraguan Army," Gen. Joaquin Cuadra said at a ceremony to honour the 17th anniversary of the Nicaraguan Army. The rumours began circulating Friday when the Sandinista-owned newspaper Barricada reported right-wing presidential candidate Arnoldo Aleman, ahead in the polls, had offered the position of army chief, if he won, to Somoza's son, Anastasio Somoza Portocarrero, known as "El Chiguin." It also reported that former officers in Somoza's National Guard were meeting with officials of Aleman's Liberal Alliance. But Cuadra said Nicaraguan law did not permit the return of former members of the National Guard to the Nicaraguan Army. "The law doesn't permit it and history condemns it. Nostalgia for the past, in any colour, clouds the present and puts the nation's peace at risk," he said. Aleman denied the rumours at a news conference, saying they were "more Sandinista slander." The Somoza dynasty ruled Nicaragua with an iron fist for more than 40 years before being toppled by the 1979 Sandinista revolution. 7312 !GCAT !GOBIT !GPOL !GPRO The military buried former navy chief Adm. Jose Toribio Merino with full honours on Monday but Chileans remained deeply divided over the memory of the 1973 coup he plotted and the 17 years of dictatorship that followed. Former military ruler General Augusto Pinochet read a eulogy at the funeral on a hill overlooking the Pacific Ocean, where Merino spent much of his life as commander of a navy destroyer and later as commander-in-chief. Pinochet proudly remembered the coup that he and Merino led to overthrow the elected Marxist president, Salvador Allende, on Sept. 11, 1973. Allende died in the coup. "At the most dramatic hour of our civic existence in this century ... the figure of Admiral Merino was decisive in reestablishing the underlying values that sustain Chile," said Pinochet, his voice choking with emotion. "During the period of national restoration," said Pinochet, referring to the military government, "I shared with the admiral ... the tensions and apprehensions of this delicate task, as well as the legitimate satisfaction of our mission." Merino, who died on Friday of lymphatic cancer at the age of 80, and Pinochet were the only members of the original military junta to hold power until the military returned the government to civilians in 1990. Reactions to his death revealed the split in Chilean society over the Pinochet legacy. "I'm not going to say that because the admiral died, I'm in mourning and feel such terrible sorrow. I'm no good at lying," said Rodolfo Seguel, a union leader and opponent of Pinochet's rule, on Sunday. Rightists praised Merino as a saviour and noted his early support of the free-market economic policies that Pinochet later adopted wholesale. 7313 !C13 !C18 !C183 !CCAT !E12 !ECAT !GCAT !GWELF Ecuadoran President Abdala Bucaram Monday said he will give a boost to privatizations, but ruled out selling off the pension fund system. "If rich countries can develop thanks to capitalizations, why shoudn't we?" he told reporters after a meeting with Bolivian President Gonzalo Sanchez de Lozada. The Bolivian experience with capitalizations -- privatizations that include selling half the shares of the newly privatized state companies to their employees and the rest to foreign investors -- should help Ecuador, he said. But asked if his privatization plans included the state-run pension system, Bucaram said, "No, not precisely." The Ecuadoran leader, who is in Cochabamba to attend the summit of the Rio Group of 14 Latin American countries, said he would carry on with his privatization plans even if he runs into popular opposition. "The whole world is taking the same path," he said. "And what did (the people) have before?" he continued. "They had no progress." Bucaram, who took power last month after winning the election on a populist platform but has since started extolling the virtues of the market, said the Bolivian example could be particularly useful to simplify the tender process for the sell-off of state-run firms. "They (in Bolivia) don't have some many technical evaluations. We and many other countries sometimes get really entangled in those evaluations," he said. -- David Haskel, Cochabamba Press Center +591 411-7173 7314 !GCAT !GDEF !GPOL !GPRO An Argentine Navy officer known as the "Blond Angel," wanted in France and Sweden for human rights crimes, has retired from active service, Navy officials said on Monday. Capt. Alfredo Astiz had become a symbol of impunity for the human rights violations of the 1976-83 military regime and the Navy was forced to put him on leave in March because of pressure from rights campaigners and foreign governments. But the Navy insisted he was an "officer and a gentleman" while Navy chief Adm. Enrique Molina Pico caused a political stir last year by saying Astiz had "all the moral conditions to be a Navy officer." The Navy said Astiz was entitled to keep his rank and a full service pension. "It was not a discharge, it was a retirement," a Navy spokesman told Reuters. Rights campaigners were outraged by the fact that the blond 46-year-old officer was still in uniform, despite being sentenced to life in prison by a French court, in absentia, for the murder of French nuns Leonie Duquet and Alice Domon, who were snatched from a Buenos Aires church in 1977. The nuns were helping the Mothers of the Plaza de Mayo rights group in the grim task of trying to trace their missing relatives -- but ended up joining the ghostly ranks of the 30,000 people who "disappeared" in the military regime. Astiz infiltrated the Mothers then betrayed their founder, Azucena de Villaflor, two other Mothers and the French nuns with a kiss on the cheek. He is wanted in Sweden for the 1977 disappearance of Swedish student Dagmar Hagelin. Human rights groups said all three were held at the Navy School of Mechanics (ESMA), an infamous torture centre. Thousands of ESMA detainees were drugged, stripped and thrown to their deaths from "death flights" over the River Plate and Atlantic. Like all so-called Dirty War officers, Astiz was absolved by the Law of Due Obedience passed by a civilian government in 1987. He also walked away free from a court martial for cowardice in the 1982 Falklands War with Britain. Hebe de Bonafini, leader of the Mothers of the Plaza de Mayo, said she "couldn't care less" about Astiz being forced into retirement. "Astiz won't be able to wear his blood-stained white uniform any more. But the ESMA is still full of men like him and we want them to go to prison, not to be retired on full pensions," she said. 7315 !GCAT !GDIP Colombia and Cuba were pushing their way on Monday to the top of the agenda of Latin American leaders gathering in this Bolivian city to discuss drugs, poverty and regional integration. Although not originally on the agenda, the two issues, with the potential to sour otherwise excellent U.S.-Latin American ties, could become the centre of attention of the 10th presidential summit of the Rio Group of Latin American and Caribbean states, delegates said. "There will be a rejection of interventionist acts, wherever they originate," Panamanian Foreign Minister Ricardo Arias told reporters, in a reference to the U.S. Helms-Burton law. The Helms-Burton Act, passed earlier this year, tightens sanctions against foreign firms doing business in Cuba, strengthening the longstanding U.S. embargo against the island. Drugs in general and Colombia in particular are also dividing the United States from its southern neighbours. The Clinton administration, accusing Colombian President Ernesto Samper of having undeniable ties with drug lords, last July declared him "not welcome in the United States" and stripped him of his U.S. travel visa. The move has been condemned by the Rio Group and was a hot topic of debate among delegates to Cochabamba, meeting ahead of the presidental summit on Tuesday and Wednesday. "Revoking Samper's visa breaks the rules of international courtesy. It affects the good relations between nations," Peruvian Foreign Minister Francisco Tudela told reporters. Colombian Foreign Minister Maria Mejia said she would hold talks with the visiting U.S. ambassador to the United Nations, Madeleine Albright, but would not raise the visa issue. She said the U.S. envoy had requested the meeting and therefore should define the topics of discussion. Bogota is also proposing that the Rio Group define a strategy for fighting drug trafficking and related crimes, such as arms dealing. Colombia is the world's top producer of cocaine, most of which finds its way to the lucrative U.S. market. Peru and Bolivia come in second and third. Several delegates said they resented the U.S. approach on drugs. Washington should do a better job fighting consumption at home rather than demanding that other countries eradicate production, they said. Delegates will also seek ways to fight poverty, not only to improve the lot of the region's legion of poor people but also as a means of strengthening its fledgling democracies. "Poverty can debilitate democracy," Paraguay's Foreign Minister Ruben Melgarejo explained. On regional integration, Venezuelan Foreign Minister Miguel Angel Burelli said Latin America's two main trade blocs, Mercosur and the Andean Group, would seek to negotiate a free trade agreement. The Andean Pact groups Venezuela, Colombia, Ecuador, Peru and Bolivia, while Mercosur -- South America's biggest trade bloc -- consists of Brazil, Argentina, Uruguay and Paraguay. 7316 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Chile's state-owned copper company Codelco said production at its Salvador mine was barely affected by a 24 hour strike over pay which paralyzed part of the division's operations Friday. "It turned out to be a half-hearted action which only affected the pit itself. The refinery and port worked as normal," said a Codelco spokesman. If the whole division had been paralyzed for 24 hours, this would have lost Codelco 259 tonnes of copper and cost the corporation $567,000, he told Reuters. Full production at the pit resumed as soon as the strikers returned to work at midnight Friday as operations at the Potrerillos smelter and refinery had not been halted, he said. "They did not stop the processes so production restarted rapidly," he said. Salvador is the smallest of Codelco's four copper mines and produced nearly 86,000 tonnes of copper last year. --Margaret Orgill, Santiago newsroom, 562-699-5595x212 7317 !GCAT !GDIP Madeleine Albright, the U.S. ambassador to the United Nations, said on Monday that she believed she had the support of Security Council member Chile in her efforts to replace U.N. Secretary General Boutros Boutros-Ghali. But she quickly added that she did not want to "pre-empt" Chile's decision on whether to support Boutros-Ghali for re-election, which the United States has vowed to stop. Chile is a member of the 15-seat Security Council that has the key role in selecting a secretary-general. So far, Albright has been unsuccessful in getting the council to even address the election issue. "I came here in order to explain why the United States had decided what it had (decided) on Boutros-Ghali," she told reporters in Santiago after meeting Foreign Minister Jose Miguel Insulza. Asked if Chile supported U.S. efforts to find a replacement for Boutros-Ghali, she replied: "I think you would have to ask the Chilean government that question directly. But I do believe that we have support in the process of getting a new secretary-general." "I don't want to pre-empt the decision of the Chilean government. I only want to say that they understood the process which we have undertaken," she added. The United States has said it will use its veto power, if necessary, to prevent the re-election this year of Boutros-Ghali, whom it accuses of dragging his feet on reforms sought by the Clinton administration. Many U.N. members believe Washington's stand was based less on substance than on domestic politics where Republicans have harshly criticised the secretary-general and the United Nations as a whole. Consequently, Albright's efforts to begin the selection process have met with few results, prompting her several weeks ago to call council members "irresponsible." Boutros-Ghali's five-year term expires at the end of 1996. Albright's current five-nation swing through Latin America includes Honduras, which also has a seat on the council. But Chile's U.N. ambassador, Juan Somavia, has a high profile among developing countries, having organised a poverty summit in Copenhagen two years ago. Insulza signalled that his government was not yet ready to state its position on Boutros-Ghali nor was it chafing under U.S. pressure. "We're not talking about abuse of power or arrogance, as people have been saying all over the place. It's simply that one of the five permanent members has said it does not support the re-election," Insulza told reporters. "We respect fully the United States' right to exercise its prerogatives under the laws of the United Nations," he said. "We will vote when the time comes, for whoever we think is the best candidate." Albright, who arrived on Friday from Uruguay, was due to fly to a summit meeting of Latin American democracies in Cochabamba, Bolivia, later on Monday where she will meet with Chilean President Eduardo Frei and other leaders. 7318 !GCAT !GDIP The Cuban government is "an embarrassment" to the Americas, and its downing of two U.S. civilian planes shows how it treats its own people, Madeleine Albright, U.S. ambassador to the U.N., said on Monday. Before leaving for a summit meeting of Latin American democracies in Bolivia, Albright said the region's governments might quarrel with aspects of U.S. policy on Cuba but all agreed on the need for democracy on the island. "Frankly, we believe that the Cuban government is an embarrassment for the Americas, both north and south," Albright told a news conference in the Chilean capital, Santiago. Cuba's shooting down of two light planes piloted by Cuban-American exiles in February was "an example of the way that they deal with their own people and the way they deal with us," she said. Nearly all Latin America's democracies have protested against the Helms-Burton law, which is aimed at tightening the U.S. trade embargo on Cuba by punishing investors who buy assets confiscated by Fidel Castro's government. "Every country whose citizens have not been properly compensated for confiscation does have the responsibility of dealing with that problem," she said. "While we may not agree on various aspects of Helms-Burton, I do think we all agree on the importance of democratization," she said. Albright, who arrived on Friday from Uruguay, said she came to Chile, currently a member of the U.N. Security Council, to explain why Washington opposed the re-election of Secretary-General Boutros Boutros-Ghali. She was due to visit the meeting of the 14-member Rio Group in Cochabamba, Bolivia, on Monday. She said she had not asked to attend the gathering officially but saw it as a good chance to see Latin American leaders. "I never asked to be received officially by the Rio Group. We are not members of the Rio Group, and I would not even dare to consider to be asked to come to the group officially," she said. "I thought, however, ... that it is a great opportunity to elicit their views on a number of a subjects and to listen to them on the margins of the Rio Group meeting," she said. The group includes regional heavyweights Brazil, Argentina and Mexico. 7319 !GCAT !GPOL !GPRO Argentine President Carlos Menem, stung by criticism of him for playing golf on foreign visits and during a general strike, accused his detractors of envy and argued that golf helped him think. "Perhaps this is the product of the impotence of those who can't play this sport," said the sports-mad Peronist leader, who is frequently shown by Argentine television playing golf and depicted by cartoonists with a golf club in his hands. "I think almost all presidents, kings and prime ministers have played golf," he said, citing present and past U.S. presidents Bill Clinton and Dwight Eisenhower as leaders who found the game helped them decide matters of state. "But I always think, not just when I'm playing golf," he added in an interview with ATC state television. 7320 !GCAT !GVIO A mob of angry Indians burst into a municipal jail in the southern Mexican state of Chiapas, doused three alleged criminals with gasoline and set them on fire, local officials said on Monday. Two of the prisoners died and the third survived with severe burns, Ariel Jarquin, deputy interior secretary in Chiapas state, told Reuters. The three were brothers. The mob, enraged at what they saw as a lack of justice in the racially divided state, stormed the jail near the town of Motozintla, some 30 miles (50 kms) from the Guatemalan border. Hundreds of Indians were involved in the attack and dragged out the three prisoners who were being held on various charges, including rape, Jarquin said. He said the three were tied to stakes, soaked with gasoline and set ablaze by the mob. Alfredo and Marcelino Gomez died in the attack, while the third brother, Jose Luis, was taken to a nearby clinic with severe burns, Jarqin said by telephone from the state capital Tuxtla Gutierrez. The area where the burning took place is far from the indigenous communities in the south of Chiapas where the Zapatista National Liberation Army (EZLN) launched a rebellion on Jan. 1, 1994. Mob killings, which until recently were rare in Mexico, have become more common as crime has soared in the aftermath of last year's economic crisis. Many of those involved have accused police of failing to take tough enough steps to stamp out crime. 7321 !GCAT !GCRIM A Mexican judge has ordered the arrest of Mexican boxing idol Julio Cesar Chavez on tax fraud charges, the Finance Ministry said on Monday. "The first district judge in Culiacan, Sinaloa ... decided to issue an arrest warrant against Julio Cesar Chavez" and three other men "for the crime of tax fraud," the ministry said in a statement. Chavez and his business partners in his home state of Sinaloa failed to pay some 10.58 million pesos ($1.39 million) in taxes to the government, according to the ministry. Tax officials have been auditing Chavez's tax records for more than a year. He has denied any wrongdoing and said his former business partners, family and friends have betrayed him in order to get at his money. Chavez, a former world champion in at least three different boxing divisions, has amassed a record of 97-2-1 but has lost his once-golden reputation as the best pound-for-pound fighter in the world. 7322 !GCAT !GDIS At least six people died over the weekend in widespread floods across Mexico, partly caused by the menacing Tropical Storm Elida, authorities and media reports said on Monday. Four people died in the central state of Guanajuato where downpours caused flooding in several towns. TV network Televisa said one person was swept away in strong currents and another three were electrocuted. Two others died in the southern state of Chiapas, both also electrocuted, Televisa said. Tropical Storm Elida was blamed for the heavy rains across most of central and northwestern Mexico, while a separate southern weather front was reportedly what caused the flash floods in Chiapas. Elida, in the Pacific Ocean 53 miles (85 km) east southeast of Isla Socorro in the state of Colima, was inching northwesterly at 4 mph (6 kph) with sustained winds of 41 mph (65 kph) and gusts up to 53 mph (85 kph), the National Meterological Service said. "Tropical Storm Elida is seen picking up steam gradually over the next 24 to 48 hours," the service said in an update. Elida was expected to continue to dump heavy rains across central and northwestern Mexico, causing waves between six and 12 feet (two to four metres) high along the northern section of Mexico's Pacific coast. "A storm alert is out because of Elida for the Islas de Revillagigedo archipelago, for Islas Marias and the south of the Gulf of California," the service said, in warnings to shipping and coastal inhabitants. 7323 !GCAT !GCRIM The reputed Cali cartel drug lord who surrendered to police on Sunday was the target of a nationwide manhunt for more than a year but never came close to being captured, authorities said on Monday. National Police Chief Gen. Rosso Jose Serrano and other officials conceded that Helmer "El Pacho" Herrera, the only cartel kingpin who was still at large, probably could have remained free indefinitely since they had no idea what he looked like. "We were looking for another Pacho Herrera," Serrano said, referring to an ageing photograph of Herrera that bore little resemblance to the man who surrendered to police in a church in an industrial area outside the southwest city of Cali on Sunday afternoon. "He never came close to being captured," Herrera's lawyer, Gustavo Salazar, told the Caracol radio network. "Our client could have evaded the dragnet authorities laid out for him for a long time." U.S. drug experts said several factors contributed to Herrera's success in eluding authorities and building a reputation as an "artful dodger." But the key was the fact that he was notoriously camera shy and had allowed no pictures to be taken of him for years, the experts said. They said Herrera, believed to be a master of disguise, had also been careful to avoid calling attention to himself by living the ostentatious lifestyle typical of many drug barons. "This guy literally goes against the grain in every way," one U.S. official said. "He didn't go in for fancy houses and cars ... he'd travel aboard commuter buses dressed as a lady." The official, who spoke on condition of anonymity, said Herrera had also built up a loyal following in Cali and other cities across the country by making generous handouts to the poor. A Robin Hood figure in the eyes of many Colombians, he could be "extremely kind" and made sure that children were looked after around Christmas time, the official added. Herrera, 45, told reporters on Sunday that his surrender was intended as "a gift to the country that has suffered and been so stigmatized because of drug trafficking." Authorities believe his real motive had more to do with legislation introduced under President Ernesto Samper's predecessor that offers substantial sentence reductions to drug lords who turn themselves in and confess to their crimes. That legislation, known as the "law of submission," was expected to be re-written in the current session of Congress to ensure tougher sentences for drug traffickers. It could still benefit Herrera, however, since government sources say the new legislation would not take effect retroactively. 7324 !GCAT !GDIS At least 20 people died when a bus and a truck collided early on Monday just outside Mexico City, news reports said. TV network Televisa showed the local bus on its side around 55 miles (88 km) south of Mexico City with debris and luggage strewn over a wide area. Radio Red network quoted a local official in the town of Cuautla as saying 20 people died and another 15 were injured. Televisa said 23 had died. "It is terrible. I have seen a lot of tragedies in my life but this is one of the worst," Radio Red's local reporter said from the crash scene. Women and children were among the dead, he added. Reports said the bus hit the truck at around 9:10 a.m. CDT (1410 GMT) on its way to Cuautla in the state of Morelos from Mexico City. There was no immediate indication that any foreigners were aboard the bus. Local officials were not immediately available to comment. 7325 !C42 !CCAT !E12 !E41 !ECAT !GCAT !GJOB !GPOL The Argentine government Monday tried to counter criticisms of President Carlos Menem's proposals for more flexible labor laws, arguing that not just workers would contribute to new unemployment insurance. Menem angered trade unions, already in disagreement over his fiscal austerity programmes, by announcing a labor reform package Friday including suspending collective wage deals and replacing redundancy payouts with unemployment insurance. 7326 !GCAT !GPOL When Argentine President Carlos Menem was asked recently whether he had lost the political initiative in running the county, he snapped: "Those who are saying that are just stupid." Called "The Chief" by ruling Peronist Party cadres for his firm grip on power, Menem was clearly stung by the suggestion he may be losing his image as a master of political control. In recent weeks he has faced Peronists increasingly hostile to his fiscal austerity plans, a discontented labour movement that had long been supportive and plummeting public approval ratings. After being re-elected last year with a 50 percent majority, his popularity has dwindled to 20 percent. Menem appeared to have recognised his recent lack of visibility and has taken to the streets to sell his economic and labour reforms and raise his profile as the man in charge. "It is quite clear that things cannot carry on like this," said political analyst Hugo Haime. "The Peronists have got to get back in shape so Menem can work effectively." Menem's main problem these days, analysts say, is the lost luster of economic policies that trounced inflation and brought rapid growth from 1991-94 but that have shown an ugly side-effect: unemployment at 17.1 percent. He fired his once powerful and respected Economy Minister Domingo Cavallo a month ago and replaced him with Central Bank chief Roque Fernandez, who was left with the task of launching austerity measures to reduce a growing budget gap. Menem repeatedly expressed confidence the measures would breeze through Congress where the Peronists have an ample majority in both houses. But lawmakers have been unwilling to rubber stamp the package, worried the unpopular measures could harm their chances of re-election next year. "Now the Peronist Party is worrying if this plan will continue winning elections as it did over the past years," leading political analyst Rosendo Fraga said. Some say it is only natural that Menem's power should begin to wane after almost eight years in power. He is barred by the constitution from a third consecutive term and there is talk inside the party that Menem's once trusted political fixer, former Chief of Staff Eduardo Bauza, is now closer to Buenos Aires province Gov. Eduardo Duhalde, long seen as Peronism's natural choice for president in 1999. The Peronist trade unions, which over recent years have silently watched their power slip as neo-liberalism advanced, now seem ready to revert to their combative old ways with a call for the second general strike in two months. Analysts say Menem needs a change of style to cope with this harsh new political reality and can no longer count on his two pillars, Cavallo and Bauza. "He used to be worried about Cavallo overshadowing him. Now he no longer has that problem. But he's got to take on Cavallo's responsibilities," said political analyst Joaquin Morales Sola. "Menem has never had so many unsolved problems." Fraga agrees: "People complain he is playing too much golf. He has always played lots of golf, except now the situation has changed and he cannot carry on the same way." While dismssing criticism, Menem has seemed to take note. He has called for a full-fledged Peronist party meeting on Sept. 5 to which he invited unionists -- the "lads" as he called them -- to discuss the future of the country. "I think it would be wise to wait until that meeting to see what comes out of it," Haime said. "It could signal a new beginning." 7327 !GCAT !GPOL !GVOTE Peru's President Alberto Fujimori said he had not yet made a decision on whether to stand in the country's next presidential elections scheduled for 2000. "I have taken no decision on the matter," Fujimori said in a television interview late Sunday. He added, however, that last month's congressional ruling, which cleared the way for him to stand should he wish, allowed the possibility of running again if a candidate came along wanting to undo the work of Fujimori's two administrations. "It is necessary to leave the door open to remove this number one fear," he said. The president said he would decide whether or not to run for a third consecutive term "depending on the circumstances at the time." Fujimori was elected president in 1990 and again in 1995. Under Peruvian law, a president who has been elected for two consecutive terms in office cannot run in the following election. But congress voted last month in favor of a legal interpretation that means Fujimori's first term in office will not be taken into account should he wish to stand for re- election. After Fujimori dissolved parliament in 1992, a new constitution was written the following year by a reformulated congress. Congress upheld that only elections under the new constitution had validity when an incumbent president wished to put himself forward as a candidate for the next term. Opposition daily, La Republica, published Sunday a survey by leading pollster Imasen that showed 50.4 percent of Lima residents disagreed with the congressional ruling. However, Fujimori's popularity is above 60 percent, according to most local polls. -- Saul Hudson, Lima newsroom, 511 221-2134 7328 !GCAT !GENT Indian tribes gathered over the weekend in Brazil's remote Indian reserve of Xingu to celebrate their annual festival of the dead with dancing and wrestling matches. Ten tribes from the reserve in the Amazonian state of Mato Grosso took part in the Kuarup festival, which has taken place during a full moon between the months of August and September since before Portuguese settlers arrived in the 1500s. Some 3,671 Indians from 17 tribes live in the Xingu National Park. This year's event was attended by Brazilian Justice Minister Nelson Jobim, who caused a stir by bathing naked in a lake near the village of Kuikuru. The two-day Kuarup festival opens with traditional Indian dances and culminates in wrestling matches known as Huka-Huka. Xingu is protected under the Brazilian Constitution from outside interference. But in recent years farmers and wildcat gold diggers have been pouring into the area, causing rising tensions with Indians, occasionally leading to bloodshed. 7329 !GCAT These are the highlights of the main Sao Paulo and Rio de Janeiro newspapers this morning. - - - GAZETA MERCANTIL -- MARKET EXPECTS HIGH REAL INTEREST RATES IN 1997 Brazil's financial markets expect real interest rates to remain high and foreign exchange policy to bring no surprises over the next 12 months. These expectations were confirmed after Friday's auction of Treasury Notes and Letters. -- ELETROBRAS NETS 1.5 BILLION REAIS Brazilian state power utility Eletrobras reported a 1.5 billion real net profit in the first half, an increase of 228 percent when compared with the same period last year. -- CHILE TO BENEFIT FROM MERCOSUR Chilean consumers will benefit most from the country's participation in the Mercosur customs union as of October 1997, according to a study by Celfin Research and Salomon Brothers. Under the Mercosur agreement, Chile's import tariffs will drop to 4.8 percent from 11 percent. - - - FOLHA DE SAO PAULO -- NUMBER OF POLICEMEN IN SAO PAULO STATE CUT BY 10 PCT Sao Paulo state's Military Police shrank by 10.4 percent in 20 years, considering the number of policemen per inhabitant. Last year, there was one policeman per each group of 460.3 people. In 1975, there was one policeman per each group of 416.8 inhabitants. -- ITAMAR "WAS NOT EVEN PRESIDENT", SAYS MOTTA Communications Minister Sergio Motta criticized former President Itamar Franco, who opposes a proposal for presidential reelection. "Itamar was not even president. He was Collor's vice-president." - - - O GLOBO -- LANDLESS MOVEMENT (MST) CHALLENGES THE GOV'T AND ANNOUNCES WAVE OF INVASIONS Brazil's Landless Movement (MST) prepares for this week land invasions and demonstrations throughout the country. The wave of invasions began Saturday when 2,300 families occupied a farm at Pontal do Paranapanema in Sao Paulo state. - - - -- Reuters has not verified these stories and cannot vouch for their accuracy. -- Fatima Cristina, Sao Paulo newsroom, 55-11-2324411 7330 !GCAT !GCRIM !GPOL President Alberto Fujimori expressed support on Sunday for embattled security adviser Vladimiro Montesinos, who was recently accused by a captured drug lord of taking bribes to protect traffickers. "I have faith and complete confidence that he has worked efficiently in the fight against drug-trafficking," Fujimori said in a television interview, without referring to the specific accusation against Montesinos. He added it was the National Intelligence Service (SIN) -- where Montesinos is the top legal adviser -- that was responsible for Chavez's capture. Montesinos, a mysterious figure seldom seen in public but widely regarded as Fujimori's right-hand man, was accused in court earlier this month of taking $50,000 a month in 1991 to protect traffickers in Peru's drug heartland, the Upper Huallaga Valley. But his accuser, self-confessed drug-trafficker Demetrio Chavez "El Vaticano," retracted the accusation last week, claiming he had been confused. The initial accusation caused a storm in local political circles, while the retraction brought accusations that intelligence officers induced a memory loss in Chavez while in prison. Polls published at the weekend showed more than 80 percent of Peruvians want a full investigation into Chavez's charge against Montesinos. Congress last week rejected calls for an investigation, but the court hearing Chavez's case still has the option of ordering an inquiry. Chavez, who was captured in Colombia in 1994, has already been sentenced to life for treason on evidence he collaborated with Peru's Shining Path guerrillas. The current case against him is for drug-trafficking. 7331 !GCAT PM WANTS TO AVOID CONFRONTATION The Prime Minister says he's happy to talk to the Maritime Union over waterfront reform, as long as the union understands the Government has a mandate to make changes. The Government has announced a national transport committee to examine major transport inefficiences as part of its push to improve waterfront productivity. The union has voiced concern about Government plans to reduce the union's coverage of waterfront workers. Mr Howard says he'll try to avoid confrontation on the waterfront in his push for reform, without surrendering vital principles. - - - - FEARS OF RISING RACISM A leading academic says new research shows racism is rising in Australia which he warns could lead to urban conflict in Australia's inner cities. Woolongong University's, Stephen Castles, says the Federal Government's budget cuts, may prompt racial unrest seen in countries like the United States and Britain. His comments are backed by a Melbourne-based study which reveals racism, which is now also occuring between ethnic groups, is wide-spread in Australian schools. Professor Castles, says the Commonwealth's cuts to schemes, including job training programs, may add to the resentment building towards migrants. - - - - TELSTRA NOT FOR SALE - HOWARD The Federal Opposition says the Prime Minister is now in full damage control over plans to fully privatise Telstra. Communications Minister Richard Alston has backed away from his comments yesterday, that it's possible the Government would go to the next election, proposing to sell the rest of Telstra. But John Howard has told his minister that there's been no policy change to selling one-third of Telstra. Shadow Communications minister Chris Schacht says the Prime Minister has panicked. Tasmanian Independent Senator Brian Harradine, whose support the Government needs to get the Telstra bill passed, says he's disturbed to hear the Government's ultimate intention is to sell the whole of Telstra. - - - - PM SAYS GEORGE OWES AN EXPLANATION The Prime Minister says ACTU leader Jennie George has to accept political responsibility for the riots at Federal Parliament two weeks ago. John Howard says the public is still waiting for some expression of outrage from Ms George, but Ms George says a Federal police report has cleared her of any involvement in the riots. She says Mr Howard should reschedule another meeting with her after the last one was cancelled because of the violence. - - - - FORMER WA DEPUTY PREMIER ON TRIAL A former West Australian Deputy Premier is on trial in the District Court in Perth, on charges of giving false evidence to the WA Inc Royal Commission. David Parker is facing six counts of perjury over evidence he gave about the source of thousands of dollars in cash. Mr Parker has denied all the charges. Mr Parker had told the Royal Commission he kept about 25 thousand dollars in a satchel in his office in the 1980s. He said he had received the money from his late wife, from accumulating travel expenses and cashing travellers cheques. But in Court today, Prosecutor John McKechnie Q-C said those explanations were bare-faced lies, and that there never was a satchel containing 25 thousand dollars or more. - - - - ACTU SAYS GOVERNMENT'S SHIPPING FOCUS IS TOO NARROW The ACTU has accused the government of not taking a broad enough view in its attempts to improve productivity in the shipping industry. ACTU Assistant Secretary, Greg Combet, has told a waterfront conference in Sydney the government's focus on the Maritime Union is too narrow and other factors must be considered. He's welcomed Transport Minister John Sharp's announcement of a Transport Interface Committee to improve efficiency in sea, air, road and rail links. But Mr Combet says a continued emphasis on the Maritime Union as the source of all waterfront problems won't work. -- Reuters Sydney Newsroom 61-2 373-1800 7332 !GCAT ON THE SPOT QUARANTINE FINES ANNOUNCED Federal Primary Industries Minister, John Anderson, says a study's revealed that 180,000 people breach Australia's quarantine laws every year. Mr Anderson says the message to these people must be "declare it or dump it". Launching Quarantine Week at Sydney Airport this morning, Mr Anderson announced on-the-spot fines of between A$50 to A$100 will be introduced for minor quarantine breaches. He says the most common items brought into the country include fruit and meat, wood artefacts and straw hats. Mr Anderson says as the number of international travellers coming to Australia increases, so the risk of exotic pests and diseases being introduced rises. - - - - AUSTRALIA'S RACIAL RECORD UNDER THREAT A Sociology Professor says new research shows that Australia is endangering its reasonably good record of race relations over the past 20 years. Professor of Sociology at Wollongong University, Stephen Castles, says race relations in Australia are deteriorating and could lead to urban violence across the nation. His remarks are reinforced by a Melbourne-based study which reveals racism, which is now also occuring between ethnic groups, is wide-spread in Australian schools. Professor Castles says if anti-racism programs are allowed to slip then possibly five or 10 years from now there will be serious urban conflicts. - - - - FRED NILE'S PLAN FOR THE ABC New South Wales Call To Australia MP, Fred Nile, says he agrees with Prime Minister John Howard about bias in the ABC. In a submission to the Mansfield review of the ABC, Mr Nile said the broadcaster gave extravagant coverage to the gay and lesbian mardi gras compared with its coverage of the swearing in of the Prime Minister. Mr Nile has also advocated the ABC be privatised, saying shares should be offered to churches, RSL clubs and Country Women's Associations to force the ABC to take notice of public opinion. He's also called for the closure of the youth network Triple-J. - - - - VANSTONE ATTACKS UNIVERSITY STUDENTS Federal Education and Training Minister, Amanda Vanstone, has accused students of, in her words, "squealing like stuck pigs", about changes to higher education contributions. Senator Vanstone has dismissed the student campaign against rises in HECS, calling it "the ugly face of self interest". Her comments come after a student demonstration last Thursday turned violent when protestors stormed the BHP building in Melbourne. Senator Vanstone says university students are in the box seat for the rest of their lives yet they complain more loudly than other school leavers who will battle just to get jobs. - - - - UNION TO OUST CONVICTED RIOT PARTICIPANTS The head of the construction union says CFMEU officials convicted of offences as a result of the Parliament House riot two weeks ago will be barred from holding paid positions with the union. Stan Sharkey says he hasn't seen video footage or photographs of the riot which allegedly show CFMEU officials involved in the attack. Mr Sharkey has dismissed claims that his union and the ACTU were responsible for the violence. - - - - CHANGES LOOM FOR ROO QUOTA Queensland Environment Minister, Brian Littleproud, says he is considering a number of changes to the harvesting periods for kangaroos. These include the introduction of specific harvesting regions for shooters. The news comes as the on-off harvest period for grey kangaroos is again temporarily halted. The four weeks on, two weeks off, staggered shooting season was introduced earlier this year in an attempt to prolong the quota. Harvesting of red kangaroos and wallaroos ended some time ago when the quotas were extinguished. Mr Littleproud says only just over half of the quota for greys had been filled by August the 24th, meaning closures for the remainder of the year may not be necessary. -- Reuters Sydney Newsroom 61-2 9373 1800 7333 !GCAT (Compiled for Reuters by Media Monitors) THE AUSTRALIAN FINANCIAL REVIEW Following Communications Minister Richard Alston's revelation on Sunday that the Government was likely to seek a mandate for the sale of the rest of Telstra at the next election, key Independent Senator Brian Harradine has raised objections to the Governmnt's plan for partial privatisation of the telecommunications giant. Page 1. -- The Federal Government's new approval process for health insurance premium increases will soon come under strong pressure, with at least five of 11 health insurers that fail to meet minimum reserve requirements yet to receive approval for price rises. Eleven funds are not meeting the minimum requirements of the National Health Act - which demands reserves of either A$1 million or two month's worth of contributions - and continue to operate under an exemption from these requirements. Page 3. -- Qantas Airways has virtually finalised negotiations with its unions for a new enterprise agreement that will deliver pay rises totalling eight per cent over the next two years together with scope for employee share issues worth up to A$1000 for each worke. The airline has also settled negotiations with most of its unions on specific changes to work practices to apply in return for the pay rises. Page 4. -- According to Transport Minister John Sharp, former ALP Senator Mal Colston's decision to remain in the Senate as an Independent has increased the chances of the Government's industrial relations reforms being passed by the Senate as early as October, although Colston denied any deal had been struck with the Government. Page 5. -- THE AUSTRALIAN In an effort to reassure key Independent Brian Harradine, Prime Minister John Howard said yesterday he was not completely satisfied that the public would benefit from the selling of more than one third of Telstra. Howard's remarks followed the announcemet by Communications Minister Richard Alston on the weekend that the total sale of Telstra was both inevitable and desirable. Page 1. -- The Federal Government will pay out A$23 million to three of Australia's biggest businesses, Mackay Refined Sugars, BHP Transport and Shell Australia, in a move that breaks an election pledge to end a construction subsidy to shipbuilders. Although the Government was to end the subsidy from mid-1996, the three firms will now enjoy subsidies for vessels completed by mid-1997. Page 1. -- Health Minister Michael Wooldridge's office yesterday confirmed that the Minister was notified of private health insurance premium increases a month before the Budget, despite Prime Minister John Howard's public questioning of the Department's political judgement for failing to advise Wooldridge. The increases threaten to erode the value of the health insurance tax rebate measure that was introduced in the August 20 Budget. Page 1. -- Despite claims by ACTU president Jennie George that the union organisation would only accept responsibility for failure in the organisation of the rally that erupted into violence at Canberra's Parliament House last month if the Australian Federal Police dentified any liability in a report, Industrial Relations Minister Peter Reith said yesterday there would be no public report from the AFP. Page 1. -- THE SYDNEY MORNING HERALD Sacked by Australia Post in the middle of his legal campaign to overturn the 1994 Communication Electrical Plumbing Union (CEPU) election and last week rejected as a candidate in the upcoming September 16 election for the New South Wales branch of the postal and telecommunications section of the CEPU because he had not been a financial member of the union for 12 months before the election, Quentin Cook has filed an unfair dismissal suit in a judgement that could trigger a Federal inquiry. Page 1. -- In a bid to save the Government's legislation to partially sell Telstra, Prime Minister John Howard yesterday publicly reprimanded Communications Minister Richard Alston and flatly denied the Government had any plans to fully privatise the telecommunicatins carrier. Page 1. -- Under a Federal Government plan to force all State housing authorities to operate as commercial landlords, tens of thousand of families in public housing face huge rent rises and many tenants may be forced to move. The proposal will convert the A$1 billion the Federal Government gives the States each year for construction and management of public housing into a direct cash payment for both public housing tenants and low income earners renting privately. Page 1. -- New South Wales Labor left-wing MPs yesterday vowed to fight the plan to give police the power to break up groups of three or more young people and to demand names and addresses of suspected gang members, fearing that the policy will discriminate against young people and ethnic groups. Page 3. -- THE AGE Following Crown Casino's announcement of a A$58.4 million profit a few weeks ago, Tabcorp Holdings has sent another signal that the gaming industry is alive and well, with a 27.3 per cent rise in profit to A$87.2 million in the year ended 30 June. Tabcor's gaming turnover jumped 37 per cent from A$3.11 billion to A$4.27 billion. Page A1. -- A move by the Victorian Department of Education and the Board of Studies to publish a list of the names of the top 10 per cent of secondary students and their schools has attracted criticism from some schools, who believe that ranking schools by students'grades gives a false picture of schools' performances. Page A1. -- Victorian Trades Hall Council secretary Leigh Hubbard yesterday accused the ACTU of leaving president Jennie George "out to dry" over the issue of the Parliament House riot and said the issue had been allowed to progress. Hubbard said failure to deal with the issue quickly showed a "lack of collective leadership" in the ACTU. Page A1. -- Following Communications Minister Richard Alston's comments on Sunday that the total sale of Telstra was "not only inevitable but it is highly desirable", Independent Senator Brian Harridine has expressed reservations over the partial sale of the telecommnications body and Prime Minister John Howard has angrily tried to limit the fallout from Alston's remarks. Page A3. -- Reuters Sydney Newsroom 61-2 9373-1800 7334 !GCAT (Compiled for Reuters by Media Monitors) THE AUSTRALIAN FINANCIAL REVIEW Despite facing a last-minute attempt by Air NZ to stop News Corp retaining the right to effectively control Ansett for another five years, the A$475 million partnership deal between Air New Zealand and Ansett has finally been sealed. Under the terms of the agreement, TNT has agreed to end its 17-year partnership with News Corp in Ansett for A$325 million and Air NZ has pledged to inject A$150 million into the troubled Australian airline. Page 1. -- Tabcorp Holdings yesterday announced a 27 per cent rise in annual profit to A$87.2 million, boosting chief executive Ross Wilson's executive remuneration package by A$734,000. The company celebrated its increase in earnings by awarding an unexpected 12 cent special dividend, on top of the 10 cent payout for the second half. Page 1. -- Amcor Ltd managing director Don Macfarlane has blamed pressures in its Australasian packaging businesses, sluggish business activity in Australia and falls in paper prices for the paper and packaging giant's first fall in net profit since 1977-78. Amcor eported a 12 per cent drop in net profit to A$356 million for the year to June 30. Page 17. -- After reporting a fall in net profit for 1995-96 from A$36 million to A$23 million, FH Faulding and Co Ltd is hoping an earnings turnaround from its loss-making United States operations and quick industry acceptance of its cancer pain-relieving drug Kadia will provide the healthcare major with a stronger year in 1996-97. Page 19. -- Although Mayne Nickless Ltd announced an 85.4 per cent slump in net profit to A$11.6 million for the year to June 30, managing director Bob Dalziel said yesterday the company's "go forward" businesses in the core areas of health care, express freight and contract logistics had grown by 12.6 per cent on the previous year. Page 19. -- Despite volatile grain prices, stockfeed and salt products group Ridley Corporation Ltd yesterday predicted it would continue to increase sales and profits across all divisions, after reporting a 4.3 per cent rise in net profit to A$22.4 million. Page 19. -- THE AUSTRALIAN Following the release of strong results by TabCorp Ltd and QBE Insurance Ltd, the chief executives of Mayne Nickless Ltd, Southcorp Holdings and Amcor Ltd, reporting yesterday, agreed that the earnings outlook had improved and analysts said the 1997 calendar year would bring improved earnings. Page 19. -- Mayne Nickless Ltd yesterday recorded its lowest result since 1979, showing an 85 per cent dive in 1995-96 bottom-line profit to A$11.5 million and its pre-abnormals net profit dropped by almost one-third to A$85 million, its lowest level this decade. Pag 19. -- Boosting speculation that it is planning a major acquisition, possibly New South Wales-based gaming concern AWA Ltd, Tabcorp Ltd yesterday announced a 27 per cent rise in net profit to A$87.2 million in the June 30 year. The gaming and wagering operator provided investors with a 12 cent special dividend, payable on top of a 10 cent final dividend. Page 19. -- Seeking to offload its 50 per cent Ansett stake for about two years, TNT Ltd will receive A$325 million upfront from the airline's new joint parent Air New Zealand AIRa. NZ, with shareholders facing the prospect of a further payment of up to A$75 million if News Corporation Ltd decides to offload its half share of the airline within seven years. Page 19. -- Despite difficult conditions for its home appliance and water heater businesses, Southcorp Holdings Ltd has increased its annual profit by 2.5 per cent to A$118.2 million. Managing director Graham Kraehe said yesterday the diversified industrial group hoed to overcome continuing uncertainty over the company's American water heater business and weak demand in the domestic housing market to improve earnings in the current year. Page 21. -- According to North Ltd managing director Campbell Anderson, lower metals prices impacting on the mining business helped to keep profits for the June 30 year down to A$111.9 million, but new projects in Australia and offshore should accelerate profit growt over the next few years. Page 21. -- THE SYDNEY MORNING HERALD Air New Zealand is set to expand into the Australian domestic aviation market after yesterday finally completing the A$325 million purchase of TNT's half share in Ansett Australia. The move will lead to some integration of Air New Zealand and Ansett's oprations in a bid to reduce costs and improve market shares through code-sharing. Page 23. -- Tabcorp will pay shareholders a fully franked special dividend of 12 cents a share, on top of the final payout of a fully franked 10 cents after reporting a 27 per cent increase in net profit to A$87.2 million. Tabcorp's gaming and wagering turnovers rose more than 23 per cent to A$6.17 billion, with gaming revenues alone rising 37 per cent to A$4.27 billion. Page 23. -- Current Ten Network shareholders would exit Ten at about A$13 a share under a proposal to use a single purpose unit structure for the sharemarket listing instead of using Telecasters North Queensland as the vehicle. The plan offers a higher exit price than the estimated A$10 to A$11 a share achievable through the option of using TNQ. Page 23. -- Hit hard by soft economic conditions and stiff competition in its packaging and paper businesses, Amcor yesterday reported a 5.8 per cent fall in annual profit for the June 30 year to A$338.8 million, the first fall in profit in 18 years. Page 23. -- Unrealised investment gains of A$40.2 million helped QBE Insurance to a strong 78.5 per cent lift in net profit to A$147.3 million for the June 30 year. QBE will pay a partially franked final dividend of 17 cents a share on the increased share capital, aainst 15.2 cents last year, to bring the full year payout to 24.2 cents a share. Page 25. -- Despite reporting an 85.4 per cent plunge in net profit to A$11.6 million in the June year, Mayne Nickless managing director Bob Dalziel said yesterday that 1997 would bring improved performance after selling 10 businesses that generated more than A$600 mllion in annual revenue during the last year. Page 25. -- THE AGE Reflecting the phenomenal growth in the Victorian gaming industry, Tabcorp yesterday posted a 27 per cent increase in net profit to A$87.2 million for the year to June 30, compared with a previous profit of A$68.5 million. Page C1. -- The personal fortune of Tabcorp head Ross Wilson increased by more than A$1 million yesterday after the privatised Victorian wagering and gaming group reported a record net profit. Wilson's 3.34 million shares reached a peak of A$6 by late morning, taking the combined value of his holding to A$20.04 million. Page C1. -- Air New Zealand finally completed its A$325 million purchase of TNT's half share in Ansett Australia yesterday, in a deal which is expected to result in intense competition with Qantas over trans-Tasman and Asian routes. Also part of the deal, News Ltd wll pay TNT up to A$75 million if it sells its Ansett stake before June 2003. Page C2. -- At a time when New Corporation is making a push into Asian and Japanese television markets and when Australia's links with Asia are rapidly expanding, News Corporation has decided to close its Tokyo news bureau after 32 years. Page C2. -- A strong second-half performance and a stringent cost-containment program in all areas boosted Southcorp's net profit by 2.5 per cent to A$118.22 million. Earnings before interest and tax rose 12.3 per cent to A$251.16 million for the June year because of big profit growth from the successful wines business and the first full year of returns from PET operations in the packaging division. Page C3. -- Low inflation, stiff market competition, excess industry capacity and thinner margins have forced Amcor to reset targets for earnings growth, after yesterday reporting a 12 per cent decrease in net profit to A$356 million - the first fall since the late 1970s. Page C3. -- Reuters Sydney Newsroom 61-2 373-1800 7335 !GCAT ** BIRTHDAYS ** The person to blame for the skyscraper, American archtiect LOUIS SULLIVAN, was born in 1856. He was the first to design the tall steel-frame high rise building - it was built in Chicago. Australian inventor HENRY SUTTON was born in 1870. He developed a range of devices from radios to television transmitters, but he rarely appplied for patents. ALEXANDER BELL made a special visit to Australia at one time to see SUTTON's telephone. Australian satirical cartoonist WILL DYSON was born in 1880. He married NORMAN LINDSAY's sister RUBY. Australian immunologist SIR FRANK MACFARLANE BURNETT, who won the 1960 Nobel Prize, was born in 1889. American film actor ALAN LADD was born in 1913. British stage and screen actress PAULINE COLLINS, who was nominated for an Oscar for her part in the film "Shirley Valentine", was born in 1940. British bass player GEORGE BINDO, who replaced NICK ST.NICHOLAS in 'Steppenwolf', was born in 1945. British guitarist with the group 'Thin Lizzy' ERIC BELL was born in 1947. U.K. pianist with 'Sweet Sensation' LEROY SMITH was born in 1952. ** EVENTS ** 1189 : "RICHARD the LIONHEART" was crowned King RICHARD I of England. His first royal act was to free his mother, ELEANOR of Aquitaine, who had been imprisoned in the tower by King HENRY II for supporting her son. 1658 : Puritan Lord Protector of the English Commonwealth, OLIVER CROMWELL, died. His death came seven years after his forces defeated the army of CHARLES II in the battle of Worcester. 1783 : Britain formally recognised the independence of the United States. 1901 : Australia's federal flag was flown for the first time. The flag, on a blue background, had the Union Jack in the left top corner, the star of Australia with six points representing the states of the new federation and to the right, the Southern Cross. The flag design was the combination of five entries in a national competition. More than 30,000 entries were received from all over the world in the Australian government competition. The winners were from New Zealand and Australia, and shared the 200-pounds in prize money. 1907 : A New Zealand court declared all strikes to be illegal. 1930 : The first non-stop flight from Paris to New York was made by DIEDONNE CASTE and MAURICE BELLONTE. 1935 : Britain's Sir MALCOLM CAMPBELL set a new world record in his "Bluebird" car by reaching a speed of 301.337 miles per hour. CAMPBELL broke his own record of just over 276 miles per hour, he set five months earlier. Two years later, CAMPBELL set a world water speed record. 1939 : New Zealand, Australia, Britain and France declared war on Germany, after Hilter invaded Poland with one million troops two days earlier. 1950 : The first world driving championship was won by NINO FARINA of Italy at the Monza Grand Prix. 1966 : Captain JOHN RIDGEWAY and CHAY BLYTH completed their journey across the Atlantic in a rowing boat. It took 91 days. 1975 : Australia's IAN CHAPPELL made 192 in the drawn fourth test against England at the Oval in London. 1976 : The American spacecraft "Viking II" landed on Mars and sent photographs back to Earth. 1980 : A summit of Aboriginal land council leaders banned all mining on Aboriginal land, until the West Australian government guarranteed protection for sacred sites in the oil exploration area in the state's north west. 1989 : The majority of passengers on board a Boeing 737 survived a crash in the Amazon jungle. Forty-five of the 54 on board walked away from the wreckage. (Compiled from ABC ARCHIVES, ABC RADIO NATIONAL, "On This Day" published by REED INTERNATIONAL BOOKS LIMITED, "The Chronicle Of The 20th Century" published by PENGUIN BOOKS and "Rock And Pop (Day By Day)" published by BLANDFORD BOOKS) -- Reuters Sydney Newsroom 61-2 373-1800 7336 !GCAT THE DOMINION Front page - Air NZ doubles in size with Ansett buy - Labour wants controls on radio news - Kiwi wins plane battle in court - NZ mountaineers die on highest untamed peak Editorial - Man who could be kingmaker (Election comment on Winston Peters) Business - Air NZ chases savings after profit fall - Hellaby earnings down despite better trading - Manufacturers' sales fall - Allflex assets stripped - union Sport - Go easy on my boys, says Hart NEW ZEALAND HERALD Front page - Kiwi out to clear flights backlog - Politicians to fore in All Black bash - Bull home to baby challenge - Mountain victim 'born to climb' Editorial - Alliance's tired tune Business - Rights issue to raise $240m will follow entrance to Ansett - Met Lifecare critic sells - Wineries over production feared - Political poll awakens market fears Sport - Otago on player shopping spree 7337 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Qantas Airways Ltd confirmed on Tuesday that it was close to finalising a new enterprise bargaining agreement following recent talks with the Australian Council of Trade Unions (ACTU) and other unions. "Further details are still to be worked out with a number of unions," the airline said in a statement. "The objective is to finalise an agreement within the next week for ratification by union members thereafter." Qantas has held talks with the Australian Services Union (ASU), Flight Attendants Association of Australia (FAAA), Licence Aircraft Engineers Association and four unions representing metal workers. It struck an agreement with the Transport Workers Union (TWU) on August 23 for an eight percent pay rise over two years. -- Sydney Newsroom 61-2 9373-1800 7338 !GCAT !GPOL Former Australian Labor senator Mal Colston, seen a key player in the Senate power balance, said on Tuesday that he was likely to vote against the government's new labour relations legislation when it comes before the Senate later this year. But he said he he had yet to decide which way he would vote on the government's legislation to sell a third of telecommunications firm Telstra Corp. "I've indicated fairly clearly that I'm disinclined to support the industrial relations legislation," Colston said in an interview with Australian Broadcasting Corp radio. Colston resigned from the opposition Labor party on August 20 to become an independent and was voted deputy president of the senate with the support of the governing Liberal and National parties. The government currently is two votes short of a majority in the senate and Colston's new independent status was seen by the government as improving its chances of passing legislation such as the Industrial Relations and Telstra bills. Colston said in his resignation letter, his only public statement before this interview, that his Senate voting patterns would be influenced by his long-held Labor beliefs and by his acceptance that the government had an electoral mandate to pursue a number of issues. The Liberal-National coalition government elected on March 2 campaigned to reform industrial relations laws and to sell a third of Telstra. "I think it's fairly clear it has a mandate for its industrial relations legislation, but I'm not going to support that," Colston said. He said he had some concerns about the Telstra sale bill, which has already been blocked once in the Senate, but that he had not made a decision yet. "At this stage I'm not indicating which way I'm looking at the Telstra issue," he said. Colston said he was taken aback by reported comments from Telecommunciations Minister Richard Alston on Sunday that the government would eventually sell all of Telstra. But Prime Minister John Howard's comments on Monday that the government was only committed to a one third sale had corrected that, Colston said. Fellow independent senator Brian Harradine was widely reported on Monday as being concerned by Alston's comments and was reconsidering his position on Telstra. Colston, a senator from Queensland, said he was concerned that Telstra employees working outside metropolitan areas in Queensland continue to do so once it is privatised. He said also it was not clear that the Telstra sale was one of the issues the government had a mandate for. "I don't think it's as clear as that because that partial sale of Telstra is tied up with a number of other things and I'm not prepared to say at this stage there's a clear cut mandate, but I'm not prepared to say there isn't," he said. -- Sydney Newsroom 61-2 373-1800 7339 !C12 !C33 !CCAT !GCAT !GCRIM New Zealand airline operator Kiwi International said on Monday it had won a Queensland Supreme Court order allowing its stranded A320 Airbus aircraft to return to regular services. "We expect to have our schedules operating normally from tonight with the first flight leaving Brisbane for Auckland at 2355 hours (1555 GMT)," Kiwi International chief executive Ewan Wilson said in a statement. Wilson said 75 passengers had been affected over the weekend when the Airbus was grounded at Brisbane airport following a dispute with the aircraft lessors, Singapore-based Region Air. There was no backlog this evening of passengers waiting for flights from Brisbane, Wilson said. "The company is operating strongly and is in no danger of discointinuing any further services," Wilson said. He said the privately-held airline's Boeing 737 that had been ferrying passengers during the dispute would also be rescheduled to transport all remaining passengers to intended destinations by Tuesday night. Earlier, an airline spokesman said the dispute between Kiwi International and Region Air involved "commercial matters" in an airline lease. Lease payments on the aircraft had been pre-paid until the end of September, the spokesman said. -- Sydney Newsroom 61-2 373-1800 7340 !GCAT NIHON KEIZAI SHIMBUN Japan's Posts and Telecommunications Ministry has decided to develop a next-generation advanced mobile communication system from this autumn, in cooperation with Japanese and overseas telecommunication firms. The ministry will set up a R&D group in October with telecommunication companies and electronic makers, including Motorola Inc and Northern Telecom Ltd. Japanese and major overseas semiconductor makers have started shifting production of DRAM chips to larger capacity next-generation 64-megabit DRAMs from 16-megabit DRAM chips due to the sharp decline in 16 MB prices. Fujitsu Ltd is targeting annual output of one million units, which is the same level as the largest chip maker NEC Corp, in 1997. ---- Nissan Motor Co Ltd is expected to post a consolidated net profit of 40 to 50 billion yen in the second half to March 31, 1997, agianst a loss of 88.4 billion in the first half, helped by sharp increase in overseas earnings. ---- Lorenzi Diamonds Ltd, a major Israeli diamond exporter, plans to purchase 44 percent of Hohrin Co Ltd, a Tokyo-based jewellery importer. ---- 7341 !GCAT !GDIP !GVIO British Foreign Secretary Malcolm Rifkind heatedly warned on Monday that Iraq's push into Kurdish areas was a pretext to regain territory lost in the Gulf War and was a launching point for new attacks on Baghdad's neighbours. In a hard-hitting dismissal of suggestions that Iraq was acting on behalf of Kurdish factions in its troop and tank advance, Rifkind said the United States, Britain and its allies would address the provocation "sooner rather than later". Rifkind also cautioned against accepting that just because Iraqi forces appeared to be withdrawing from the town of Abril, site of the inter-Kurd fighting, Baghdad was giving up control of the area. "It all depends if they are withdrawing five kilometres (three miles) or 50 miles (80 kms)," Rifkind told reporters. "They can still control the town even if they are not inside its city limits," he said. Iraqi troops supporting the Kurdistan Democratic Party (KDP) captured Arbil from rival forces of the Patriotic Union of Kurdistan (PUK) on Saturday and hoisted the Iraqi flag over what used to be the Kurdish parliament. Fighting between the two Kurdish factions -- longtime rivals which have shifted alliances between Iraq and Iran -- flared in mid-August despite U.S. efforts to broker a ceasefire. Arbil was not in a zone placed off-limits to Iraqi troops by the United Nations after the Gulf War to protect the Kurdish minority. But U.S. officials said it lies within a "no-fly zone" and that U.N. resolutions broadly protecting the Kurds apply. U.N. relief officials and guards in Baghdad said on Monday that Iraqi troops along with their heavy armour and artillery had evacuated Arbil but opponents of Iraqi President Saddam Hussein reported executions in the streets. "I don't think the world should be fooled by the pretext given by Saddam Hussein," Rifkind said. "It is not because of Kurdish rivalry that he has sent tanks to the area. His objective is to re-establish his control over all of the Kurdish area and to try to regain control of northern Iraq," Rifkind added. "If he regained control of all of Iraq he could contemplate a renewal of aggression." Rifkind said Iraq's actions were "extremely disturbing" and must not be allowed to stand. "It is clearly a grave violation of the safety area, the safe zone and I believe there can be no justification for action of this kind," he said. Rifkind is in Japan for a three-day visit on a tour that has already taken him to Pakistan, India and Sri Lanka. On Wednesday he leaves Tokyo for his last stop in Mongolia. As well as U.S., forces in the region, about 70 U.S., British and French aircraft have been based in southern Turkey to prevent Baghdad's forces from attacking Kurds in northern Iraq since Saddam Hussein tried to take control of the region shortly after the 1991 Gulf War. The force includes six British Tornado GR1 fighter-bombers equipped with laser-guided bombs, anti-armour cluster bombs and the JP233 runway-busting device. Britain also has two destroyers on patrol in the Gulf armed with Sea Dart missiles, torpedoes and Lynx helicopters. 7342 !GCAT !GPOL !GVIO Moslem rebels and the Philippine government signed a peace pact on Monday ending 24 years of war in the south that killed 125,000 people and ushering in what President Fidel Ramos said could be unprecedented prosperity. But the Moslem rebel leader cautioned that the hard work had only just begun. More war was inevitable if the pact failed to produce concrete benefits for the Moslems of the southern Philippines, Nur Misuari, chairman of the Moro National Liberation Front (MNLF), said in a speech at the signing ceremony in the presidential palace in Manila. "Failure has the habit of instinctively unleashing the fury of war... How many times have we seen the monster get loose and unchained?" said the former university professor who led his rebels through a war that killed 125,000, most of them innocent civilians caught in the crossfire. The crucial phase of the accord, which took four years to negotiate with the help of Islamic nations led by Indonesia, was only just beginning, he told a news conference later. "Signing the agreement is one thing... the more crucial test, the real acid test, will be in the implementing phase," he said. "We are already telling our brothers and sisters in Mindanao not to expect too much from us. We are not magicians. We cannot produce anything overnight," he said. At the ceremony, Misuari called for a standing ovation for Philippine President Fidel Ramos, praising his "boldness and heroism" in pushing ahead with the accord despite bitter opposition from Christian groups in the southern Philippines. Ramos himself said the pact cleared the way not just for the development of Mindanao, the main southern island and home to most of the country's five million Moslems, but for the further growth of the nation as a whole. The pact was signed two days after the Philippines announced its strongest economic growth figures in six years, Ramos said. "We can now strive for higher economic growth never heretofore anticipated or imagined by our economic planners," the president said. Ramos has said he takes personal responsibility for the success of the Southern Philippines Council for Peace and Development, which will be set up under the pact as a prelude to an autonomous regional government covering almost all of the main southern island of Mindanao and nearby islands. Moslem nations which helped broker the accord have also pledged investment funds to promote development of the region that is fertile and rich in minerals. Christian opponents of the pact staged protests in several parts of the south on Monday, with a cavalcade of horn-blaring cars circling the city of Zamboanga and a Philippine flag being flown at halfmast in the city of Iligan. "Here there is only mourning, cries of sorrow not joy. Look at our flag, this is a symbol of mourning because democracy has died," Iligan city councillor Lawrence Cruz told reporters. The pact was also signed by chief government negotiator Manuel Yan, Indonesian Foreign Minister Ali Alatas and Hamid Algabid, secretary general of the Organisation of the Islamic Conference. 7343 !GCAT !GDIS !GENV An intense earthquake was recorded 145 kilometres (90 miles) southwest of the Pacific island of Guam on Tuesday morning, the Royal Hong Kong Observatory said. The quake, estimated to be 5.7 on the Richter scale, was recorded at 4.48 a.m. (20.48 gmt Monday). The epicentre was initially determined to be in the vicinity of the Mariana Islands about 145 km southwest of Guam at 12.6 N 143.7 E, the observatory said. 7344 !GCAT !GDIP !GPOL China on Monday responded coolly to a request for talks from Hong Kong's populist Democratic Party, insisting the party first play by Beijing's rules. Beijing told the party it had to abide by rules governing the creation of the Selection Committee, a 400-member body which will chose Hong Kong's post-handover leader and provisional legislature, replacing the present elected chamber. "The Preparatory Committee secretariat...welcomes the Democratic Party's posture and willingness to communicate with us (Beijing)," said a statement from Xinhua news agency, China's de facto embassy in Hong Kong. The Preparatory Committee is an influential panel of members handpicked by China that is overseeing the transfer of sovereignty. "We hope the Democratic Party...can abide by the Basic Law and rules governing the setting up of the Selection Committee as laid down by the National People's Congress and the Preparatory Committee," Xinhua said. The agency was referring to Hong Kong's post-handover constitution, promulgated in 1990. "At the same time, (this statement) clearly points out that this is the first step towards communication between the Democratic Party and us and the rest of Hong Kong people," Xinhua said. The British colony reverts to China at midnight on June 30, 1997. China's reply follows a letter from the party in mid-August seeking dialogue with Beijing after China's Foreign Minister Qian Qichen opened the door a crack by suggesting that dissenting views would be permitted on the Selection Committee. Xinhua on Monday did not mention any time nor venue for talks but Beijing's latest move was seen as positive by the Democratic Party. "We welcome it," vice-chairman Yeung Sum told reporters on Monday. The Democratic Party's long-standing advocacy of democracy has angered Beijing which has dubbed its leaders as subversives and pointedly excluded it from the Preparatory Committee. 7345 !C13 !CCAT !GCAT !GDIP !GPOL Hong Kong's Bar Association said on Monday it will not nominate any of its members for a seat on the China-backed panel that will choose the colony's post-handover legislature. The territory returns to Chinese rule at midnight June 30, 1997. The association said it would not nominate any of its members to serve on the Selection Committee, government radio quoted association chairman Gladys Li as saying. The committee's tasks include choosing members of a provisional legislature to be formed to replace the current fully elected legislature. An emergency general meeting of the Bar Association returned an overwhelming majority vote upholding resolutions that the provisional legislature was illegal and that the association should not nominate anyone to the Selection Committee, Li said. China has insisted it will dismantle Hong Kong's fully elected legislature -- a result of Governor Chris Patten's political reforms and fiercely condemned by Beijing -- and replace it with a provisional legislature of its own choosing. The Bar Association has said China should stick to a Sino-British treaty and Hong Kong Basic Law, a mini-constitution drawn up for the handover. 7346 !GCAT !GHEA Mongolia has postponed the start of the autumn school term by two weeks to prevent the spread of cholera in the remote north Asian nation, officials said on Monday. "The Mongolian government has decided to postpone the beginning of the autumn term to September 16," State Emergency Commission spokesman Bayaraa told Reuters by telephone. "This is because of the epidemic." The decision would affect 517,000 students in nursery, elementary, high schools and universities, he said. An outbreak of cholera has killed 11 people and infected at least 156 in the past four weeks, health officials said. Health authorities have reopened several quarantined areas in the north and said were hopeful the killer bacteria had been contained. At least 2,866 people had been quarantined after having direct or indirect contact with contaminated people, health officials said. 7347 !GCAT !GDIP China said on Monday it was impossible for South Africa to develop ties with China as long as it had diplomatic relations with Taiwan. South African President Nelson Mandela said last week his country would maintain diplomatic relations with Taiwan but wanted to improve relations with China as well. "(Mandela's) speech went so far as to assert that Taiwan is a 'country' and advocate 'dual recognition'," the Xinhua news agency quoted Foreign Ministry spokesman Shen Guofang as saying. "If South Africa persists in this manner, it will be impossible for it to realise the normalisation of state relations with China," Shen said. Beijing has regarded Taiwan as a rebel province since the end of the Chinese civil war in 1949 and has blocked the island's attempts to break out of diplomatic isolation. "The Taiwan question...is a serious matter of principle," Shen said. Shen said Beijing would be willing to establish diplomatic ties with Pretoria if South Africa abandoned formal relations with Taiwan. Only 30 countries, mostly in Africa and central America, recognise Taiwan instead of China. 7348 !GCAT !GDIP !GPOL The last batch of Vietnamese boatpeople in Indonesia were repatriated on Monday from the remote island where they have been housed for years. A total of 486 boat people peacefully boarded two Indonesian naval ships anchored off Galang Island, near Singapore, for a three-day journey to Vung Tau in Vietnam, military officials said. Some women among the boatpeople were in tears but there were no protests as Indonesian police gently shepherded them on to barges which took them to the ships in driving rain. Some were sick as the barges pitched and rolled in the choppy sea and had to helped on board the ships. There, the boatpeople queued up before being allowed into the hold. Their possessions, bound in hessian sacks, were tagged and brought on board separately. It was the last chapter of Indonesia's Orderly Repatriation Programme, under which the Vietnamese are sent home non-voluntarily. Major-General Arif Kumaat, the officer-in-charge of the repatriation, said the operation was carried out peacefully because Indonesian authorities had used a conciliatory approach in persuading the boatpeople to leave. "We used a persuasive approach and we never used guns. We treated them like family," he told reporters on Galang, a small island dotted with scrub-covered hills. He said the use of films to depict current conditions in Vietnam had persuaded many of the boatpeople to accept their repatriation with fortitude. "They didn't know life had changed and we showed them films every day," Kumaat said. At its peak in the early 1990s, the Galang Island refugee camp held more than 10,000 boatpeople. On Monday, it was deserted, with desolate shacks within the perimeter nestled against abandoned churches and Buddhist shrines. Eleven of the boatpeople have been registered as refugees and have been moved to the office of the United Nations High Commissioner for Refugees (UNHCR) in nearby Tanjung Pinang. The rest have either been repatriated or accepted by third countries. Indonesia plans to develop Galang and neighbouring islands as part of a special industrial zone tapping into growth in Singapore and Malaysia. But the refugee camp and its shrines will be left untouched, said Research and Technology Minister Jusuf Habibie, who is in charge of development of the industrial zone. The boatpeople started fleeing Vietnam, mostly in flimsy boats to neighbouring Southeast Asian nations, after the Communist victory in 1975. Their numbers were estimated at about 850,000 but many died at sea in maritime disasters and in attacks by pirates. Some 100,000 have been returned to Vietnam since 1989, but hundreds of thousands have found refuge in third countries. In June, the UNHCR ended funding for boatpeople camps across Asia with the exception of Hong Kong, where an estimated 13,000 are still awaiting repatriation. 7349 !E11 !ECAT !GCAT !GPOL !GVIO A peace deal between the Philippine government and Moslem rebels opens up to investment what is potentially one of the richest parts of the country, economists and analysts said on Monday. "Mindanao has always been described as the land of promise because of its rich natural resources. Maybe, it can now fulfil that promise," said Joey Roxas at Equitable Equities. Nur Misuari, chief of the rebel Moro National Liberation Front (MNLF), signed a peace deal on Monday with the government, ending a 24-year-old war that has claimed more than 125,000 lives and cost the government millions of dollars to fight. The conflict has also frozen the development of Mindanao, the main southern island which remains the country's poorest area despite its rich mineral resources, which include gold and copper, and fertile agricultural land. "Except for some pockets of development, vast areas of Mindanao have remained in the backwater as the fighting between rebels and troops drove away investors," a fund manager at a foreign-owned investment firm said in an interview. "Mindanao is one of the most exciting areas for investments in the Philippines, especially for agriculture," the fund manager added. Analysts said the first investments would probably come from government funds aimed at high impact projects such as roads and bridges. "In the last three months of this year, we expect (President Fidel Ramos) to release from his contingency fund some money for highly visible projects -- bridges, roads," political science professor Alex Magno said. "Then President Ramos expects to rally businessmen to support development projects, particularly those with short turnkey periods, to move into the area," he added. Further down the line, there is likely to be increased investment in Mindanao as part of the East ASEAN Growth Area, which links the southern Philippines with Brunei and less developed parts of Malaysia and Indonesia. "Western Mindanao is now our front door to the ASEAN common market and that makes this peace treaty all the more crucial, not only in terms of achieving peace per se but in terms of strengthening our (national) economic recovery," Magno said. Islamic nations which brokered the peace have pledged investment funds for the region although specific details have not been announced. Brokers said the peace deal helped boost the Philippine Stock Exchange's main index on Monday which closed 28.68 points higher at 3,249.39. Shares were also boosted by figures released on Saturday that showed the strongest national economic growth rate in six years. The government reported that gross national product grew by 7.06 percent in the first six months of the year from 5.6 percent a year ago. "The immediate beneficiaries of the peace accord are firms that have existing investments in Mindanao," said Helen Alvarez, vice president for research at Citytrust Investment Bank. 7350 !GCAT !GCRIM !GENV Hong Kong conservationists were left horrified when a passerby took the eggs laid by the endangered Green Turtle after the reptile returned to the water, an official said on Monday. Green Turtles used to nest on one of Hong Kong's offshore islands until pollution and increasing numbers of people drove them away. So when word spread over the weekend that a rare Green turtle had been spotted for the first time in many years laying eggs on the beach on the southern side of Lamma Island, conservationists were delighted. But their delight soon turned fury when they realised the eggs had been pinched by the passerby, said Frazer McGilvray, spokesman for the Hong Kong Marine Conservation Society. The collecter gave the protected eggs away his friends as presents, he added. It is a criminal offence to take turtle eggs in Hong Kong. But it was not immediately known whether the passerby, whose identity was not divulged, would be charged. 7351 !GCAT !GPOL The race for Hong Kong's first post-colonial leader widened on Monday with opinion polls showing a top judge would fare better than the candidate long regarded as Beijing's favourite. The contest for power took a new twist over the weekend when the pro-Bejing lobby cast Hong Kong's controversial Chief Justice as a contender for Chief Executive after the handover of Hong Kong to China next year. The pro-democracy lobby, however, dismissed the emergence of Chief Justice Sir Ti Liang Yang as a contender as a charade designed to obscure the fact that China had already made a choice. "China has decided (shipping tycoon) Tung Chee-hwa will be the chief executive," said pro-democracy politician Emily Lau. "The whole thing about Sir Ti Liang running for the job is a charade," she said. "China feels it will look bad if there is no one to compete against Tung." Hong Kong politicians say they believe Chinese president Jiang Zemin annointed Tung as the front-runner when he singled him out from a roomful of prominent Hong Kong advisers early this year and pointedly shook his hand. The vice chairman of Hong Kong's largest pro-democracy political party, the Democratic Party, echoed Lau's sentiments. "We believe an election based on a small group of people is undemocratic," party vice-chairman Yeung Sum said. If an election were to be held, the results of a survey published on Monday by the mass circulation Apple Daily newspaper indicate neither Sir Ti Liang nor Tung would carry the day. The poll, conducted by the mass circulation Apple Daily newspaper, found Hong Kong's Chief Secretary, Anson Chan remained the firm favourite of the rank and file. Chan, whose role as Governor Chris Patten's deputy is believed to rule her out of the race in Beijing's eyes, received 54 percent of the vote, the poll of 432 people conducted on Sunday, showed. Sir Ti Liang was second with 16 percent. Tung won the support of 11 percent. China is setting up a 400-member panel called the Selection Committee, which will nominate the first post-colonial governor, to be known as the Chief Executive, and appoint a provisional legislature to replace the present elected body. More than 150 years of colonial rule ends at midnight on June 30 next year when Britain hands Hong Kong over to China. Nominations in a month-long process to create the Selection Committee close in two weeks, and almost 20,000 nomination forms have been requested and issued. Hong Kong's pro-democracy lobby opposes a selection process and has agitated for the top job to be returned by universal suffrage. In an additional twist, the prominent Hong Kong businessman who has publicly endorsed Tung said he was now beginning to doubt whether the shipping magnate was interested in the job. "I have no idea now," Henry Fok, a long-time investor in China now visiting Beijing, told the South China Morning Post newspaper. "The question is whether (such people) are willing to accept the nomination." Fok, who backed Tung in January ahead of the first meeting of the Preparatory Committee which is overseeing the formation of the Selection Committee, said Tung had not made his intentions known. 7352 !GCAT !GPOL !GVIO Cambodian co-premier Hun Sen said on Monday he believed that Ieng Sary, leader of a dissident group of guerrillas from the Khmer Rouge, should be granted an amnesty by King Norodom Sihanouk. "I think now is the suitable time to have the King (Sihanouk) give amnesty to Ieng Sary," he told reporters after a meeting with leaders of the breakaway faction in this western Cambodian town. Hun Sen said the dissidents had asked for an amnesty for their leader Ieng Sary at a meeting and also indicated they wanted to join the ranks of government troops gradually. He had earlier met Ieng Vudh, son of Ieng Sary, and Long Norin, Ieng Sary's general secretary and some dissident Khmer Rouge divisional commanders. Ieng Sary and his group of dissidents broke away from hardline Maoist Khmer Rouge leader Pol Pot last month. Clandestine Khmer Rouge radio has attacked Ieng Sary, who is known to be in poor health, as a traitor and called for his destruction as well as the arrest of field commanders loyal to him in northwestern Cambodia. The French-educated Ieng Sary, now is his 60s and a former brother-in-law of Pol Pot, was sentenced to death in absentia for his role in mass genocide in Cambodia by the Khmer Rouge who ruled from April 1975-December 1978. Ieng Sary was foreign minister during the Khmer Rouge's reign of terror during which more than one million people were executed or died of starvation, disease or overwork in mass labour camps. The Khmer Rouge were driven out of Phnom Penh in late 1978 by Vietnamese troops who appointed as Cambodian prime minister Hun Sen, a former Khmer Rouge officer who defected from the mainstream group led by Pol Pot. The Khmer Rouge were allowed to take part in a Cambodian peace process leading to the signing of peace pact between various Cambodian factions in 1991. But they refused to honour the accord and resumed all-out fighting after the U.N.-run elections that ushered in the royal coalition government in 1993. Hun Sen and Long Norin both said after their meeting that their discussions had been successful. "Today was the historic meeting between former enemies now turned to brothers. The meeting can be regarded as a successful one because what they (dissidents) have requested are not big deals," Hun Sen said. "They asked for two things; firstly is to join the government troops step by step and secondly to grant amnesty to Ieng Sary," he said. Ieng Vudh said: "The meeting was 80 percent successful and we need to continue discussions." Ieng Sary has led the commanders of at least four divisions in their break from Khmer Rouge hardliners. He said he has formed a new group called the Democratic National United Movement (DNUM) to work for peace in Cambodia. 7353 !GCAT !GDIS !GENV Unusually heavy rain triggered a landslide that swept away a remote village in northern Malaysia, killing at least 30 people with another 12 feared dead, an official report on the disaster said on Monday. Ramli Ngah Talib, chief minister of the northern state of Perak, said a preliminary report into the cause of the Thursday night mudslide also blamed topographical and geological conditions, the national news agency Bernama reported. According to the report, rainfall last month measured 461 milimetres compared to 281mm in the same period last year, 197mm in 1994 and 137mm in 1993, Ramli said. Rescuers continued the slow work of recovering bodies from the aboriginal settlement located in thick rainforest, four days after the disaster. The bodies of three boys -- ages 2, 6 and 19 -- were found on Monday along with a fourth unidentified victim, Bernama said. Twelve people were still missing and feared buried under the mudslide that struck the village of Pos Dipang. Rescue work has been slow because the deluge of mud and a swollen river hampered the use of heavy equipment, officials said. Heavy rain and floods set off a torrent of mud and timber down a heavily forested hillside, sweeping at least 20 houses into the Dipang river. About 200 searchers have sifted through mud strewn with huge logs, remnants of wooden houses and other debris at Kampung Sahom, another village about five km (three miles) downstream, where the wrecked houses were swept by raging river currents. 7354 !GCAT !GDIP South Korea on Monday rejected North Korea's demand for the return of a war veteran who has been in the South since the 1950-53 war, Seoul's unification ministry said. "The Red Cross president today sent a telephone message to his northern counterpart and rejected the demand," said a ministry spokesman. Instead, Kang Young-hoon of the South Korean Red Cross repeated his earlier call for the resumption of talks with leaders of the North Korean Red Cross, he said. Last Saturday North Korean Red Cross president Li Song-ho requested in a telephone message to Kang that Kim In-so be immediately repatriated to the North. Li said Kim had been critically ill with a cerebral haemorrhage, according to the message that was distributed to the press by the South Korean Unification Ministry. "In 1993 we unconditionally repatriated Li In-mo but the North Korean side made political use of the case," the spokesman quoted Kang's message as saying. South Korea in 1993 unconditionally repatriated Li In-mo, a nothern partisan seized by the South during the war and jailed for more than three decades. 7355 !GCAT !GDIP !GVIO British Foreign Secretary Malcolm Rifkind on Monday called Iraq's storming of a Kurdish stronghold in northern Iraq "extremely disturbing". "The action by (President) Saddam Hussein in northern Iraq is extremely disturbing," Rifkind told a news conference in Tokyo. "It is clearly a grave violation of the safety area, the safe zone and I believe there can be no justification for action of this kind," he said. Iraqi troops supporting the Kurdistan Democratic Party (KDP) captured Arbil from rival forces of the Patriotic Union of Kurdistan (PUK) on Saturday and hoisted the Iraqi flag over what used to be the Kurdish parliament. Fighting between the two Kurdish factions -- longtime rivals which have shifted alliances between Iraq and Iran -- flared in mid-August despite U.S. efforts to broker a ceasefire. Arbil was not in a zone placed off-limits to Iraqi troops by the United Nations after the Gulf War to protect the Kurdish minority. But U.S. officials said it lies within a "no-fly zone" and that U.N. resolutions broadly protecting the Kurds apply. U.N. relief officials and guards in Baghdad said on Monday that Iraqi troops along with their heavy armour and artillery had evacuated Arbil. Rifkind is in Japan for a three-day visit on a tour that has already taken him to Pakistan, India and Sri Lanka. On Wednesday leaves Tokyo for his last stop in Mongolia. About 70 U.S., British and French aircraft have been based in southern Turkey to prevent Baghdad's forces from attacking Kurds in northern Iraq since Saddam Hussein tried to take control of the region shortly after the 1991 Gulf War. The force includes six British Tornado GR1 fighter-bombers equipped with laser-guided bombs, anti-armour cluster bombs and the JP233 runway-busting device. Britain also has two destroyers on patrol in the Gulf armed with Sea Dart missiles, torpedoes and Lynx helicopters. 7356 !C12 !C13 !CCAT !GCAT !GCRIM Hong Kong's top financial watchdog and investment funds association on Monday defended as both severe and fair the the penalties meted out to securities house Jardine Fleming for flouting trading rules. Financial regulators in the British colony, which prides itself as Asia's top financial centre, also said they had no plans to bring criminal charges against the firm or Colin Armstrong, the rogue trader in the middle of the scandal. "Investigations have been concluded. We deem the fine to be fair and reasonable," a spokesman with the Securities and Futures Commission (SFC) told Reuters. Asked if there were plans to bring criminal or other charges against Armstrong or his former employer, Hong Kong-based Jardine Fleming Investment Management (JFIM), he said "no". The Hong Kong Investment Funds Association (HKIFA), an industry group, also said Jardine Fleming had been punished enough. "I think the penalty is quite severe," HKIFA chairman Andrew Lo said at a news conference. "The reprimand, compensation fund...I believe the right level of punishment has been given." A five-month investigation by London's Investment Management Regulatory Organisation (IMRO) and Hong Kong's SFC last week exposed a pattern of late allocation of trades by Armstrong, a charismatic top member of Hong Kong's fund management community. The late trades, many involving Armstrong's personal accounts, allowed Armstrong to turn to his benefit a change in the trading price to the disadvantage of funds he managed. Jardine Fleming was fined 700,000 sterling, London-based Jardine Fleming Asset Management (JFAM) lost its authorisation, and the former chief executive of JFIM and JFAM, Robert Thomas, had his United Kingdom and Hong Kong registrations revoked. Jardine Fleming, which is jointly owned by the Jardine Matheson and Robert Fleming groups, also paid clients US$19.3 million in compensation. Newpaper commentaries in the colony have blasted authorities for not placing more stringent controls over trading in financial instruments. But the HKIFA's Lo said the SFC had acted appropriately. "The SFC has done a good job...it did not hesitate to take tough action when required to do so," Lo said, adding that upholding a "clean operating environment" was the foremost task of bodies such as the HKIFA and SFC. "The assurance that the public should have is that the authority doesn't take into account whether it's a big or small company...but it is responsive and takes prompt action." -- HONG KONG NEWSROOM (852) 2843-6441 7357 !GCAT !GPOL !GVIO Cambodian co-premier Hun Sen said on Monday he believed that Ieng Sary, leader of a dissident group of guerrillas from the Khmer Rouge, should be granted an amnesty by King Norodom Sihanouk. "I think now is the suitable time to have the King (Sihanouk) give amnesty to Ieng Sary," he said after a meeting with leaders of the breakaway faction in this western Cambodian town. Hun Sen said the dissidents had asked for an amnesty for their leader Ieng Sary and also indicated they wanted to join the ranks of government troops gradually. Ieng Sary and his group of dissidents broke away from hardline Maoist Khmer Rouge leader Pol Pot last month. Ieng Sary was sentenced to death in absentia for his role in mass genocide in Cambodia by the Khmer Rouge who ruled from April 1975-December 1978. During the Khmer Rouge's reign of terror, more than one million people were executed or died of starvation, disease or overwork in mass labour camps in the country. Hun Sen earlier on Monday met Ieng Vudh, son of Ieng Sary, and Long Norin, Ieng Sary's general secretary. 7358 !GCAT !GDIP Waving their white caps in greeting, South Korean sailors on Monday welcomed into port the first Japanese warships to visit since World War Two, signalling warmer ties between the two Asian adversaries. The 4,050-tonne training ship Kashima and 2,950-tonne destroyer Sawayuki docked to the strains of a Japanese brass band playing "When the Saints Come Marching In". Their goodwill visit to the southern port of Pusan would have been unthinkable just a few months ago when South Korean fighter jets were conducting mock attacks over a group of islands claimed by both Seoul and Tokyo. Anti-Japanese protesters were kept well away from the Pusan port by riot police. About 20 demonstrators, mostly elderly men, were held back as they tried to mob a black limousine whisking Japanese officers into town. "Go home, stay away," they shouted. The visit was made possible by a meeting in June between Japanese Prime Minister Ryutaro Hashimoto and Korean President Kim Young-sam. They agreed to bury centuries of enmity to prepare for the joint hosting of the 2002 soccer World Cup. In what was dubbed the "soccer summit", Hashimoto said he apologised "from the bottom of my heart" for one of the darkest episodes in Japan's 1910-45 (corrects years from 1910-55) colonial occupation of Korea -- the sexual enslavement of thousands of Korean women and girls in Japanese military brothels. Monday's ceremonies were relatively low-key -- officially, the visit returns a similar courtesy call to Japan by the South Korean navy in 1994. About 100 Korean sailors standing in formation at the dockside removed their caps and waved as tugs manoeuvred the vessels to their moorings. Sailors lining the decks of the Japanese ships returned the gesture. The ships are carrying 500 officers and enlisted sailors. A South Korean defence ministry spokesman said the six-day visit was designed to "help mutual understanding and to promote mutual friendship between South Korea and Japan". Although Japan and South Korea came nowhere near to clashing in a dispute over ownership of a scattering of rocky islands that Koreans call Tokto and Japanese refer to as Takeshima, the incident in February raised anti-Japanese feelings in Korea to boiling point. Many Koreans have never forgiven Japan for its brutal occupation. And they are still waiting for a government apology to the sex slaves. On Monday the Pacific War Victims and Bereaved Families Aossociation, a leading anti-Japanese lobbying group, issued a statement opposing the visit by the warships. "Japan is still making aggressive blunders, such as saying Tokto is theirs," it said. "Fifty-one years after the collapse of the Japanese militaristic government there has been no official apology and compensation to the victims," Kim In-hwan, a director of the association, said in an interview. "We are asking them to apologise from their hearts not from their mouths." During their stay, Japanese sailors will visit the National Cemetery in Seoul and the border with North Korea. The Japanese commander will meet Seoul Defence Minister Lee Yang-ho. From Wednesday the warships will be open to the public. 7359 !GCAT !GCRIM !GPOL !GVOTE Billionaire Prime Minister Rafik al-Hariri and 13 supporters celebrated on Monday night with fireworks after winning a crushing victory in Lebanon's third round of parliamentary polls marred by charges of abuse. Official results showed that Hariri, a 51-year-old construction tycoon who gained popularity with a multi-billion dollars postwar reconstruction drive, won a seat after receiving 78,714 votes, the highest score in Beirut's Sunday vote. Thirteen candidates on Hariri's 17-man ticket also won -- a hard defeat for opponents who only captured five of the 19 parliametary seats reserved for Beirut in the 128-member house. Hariri's victory also meant he has achieved his declared aim of forging a strong parliamentary bloc against rivals who have blocked many of his projects in the house in the past. Moslem fundamentalists including the pro-Iranian Hizbollah (Party of God) were defeated, suffering a new setback after losing in the first rounds of voting in Mount Lebanon and the north. Hariri may end up with the biggest parliamentary bloc -- up to 24 MPs -- after seven supporters won in the first two rounds and if two or three more win in the coming votes in south Lebanon and the Bekaa valley the following two Sundays. Hariri's top rival, Sunni Moslem ex-premier Selim Hoss, won re-election with 64,259 votes but only one other member of his 13-man list got into the house while two supporters lost their Beirut seats, the official results showed. Newspapers said the turnout of 31 percent of Beirut's 377,000 voters was the lowest of the polls -- Mount Lebanon and north Lebanon turnout was 45 and 40 percent respectively -- and indicate voter disillusion after alleged violations in earlier rounds. Hariri's score was less than the 100,000 votes that Beirut newspapers said the Sunni Moslem premier, who ran for parliament for the first time, had hoped to secure. Hariri told a news conference after the results were announced by Interior Minister Michel al-Murr that the turnout was in fact "relatively high" since the voters' lists included the names of many expatriate Lebanese or emigrees. Afterwards Hariri supporters celebrated for hours with a colourful show of fireworks that lit the night sky over his Beirut residence. Charges of widespread abuse also soured the Beirut vote. Violations alleged by the opposition, newspapers and an independent monitoring group, include bribery, intimidation, faulty voters' lists, vote-counting fraud, votes cast for dead or emigre voters and exclusion of opposition candidates' observers from polling stations during voting and vote-counting. In the bribery incident, one of the most serious violations alleged so far, a Reuters reporter witnessed Hariri supporters paying voters 100,000 Lebanese pounds ($64) each to vote for Hariri's ticket during Sunday's round of voting in Beirut. Three opposition candidates who lost in the first rounds have said they are preparing appeals to the constitutional court which can cancel the votes if it finds serious violations occurred. Radical Christian deputy Najah Wakim, who won a seat on Sunday with 53,088 votes, expressed outrage at the violations, saying he would sue Hariri, his supporters and Murr who organised the vote, for carrying out "a major fraud." 7360 !GCAT !GPOL Palestinian President Yasser Arafat, piling pressure on Israel, said on Monday he would seek international arbitration if Israeli-PLO peace efforts faltered. He raised the option -- and ante -- as Israeli and PLO negotiators struggled to find a formula for resuming full-fledged peace talks and holding the first summit between Arafat and Israeli Prime Minister Benjamin Netanyahu. "We are committed to the peace process and we are seeking through all means to maintain and protect it and in case it faces difficulties, we are going to seek arbitration," Arafat told Reuters by telephone from Gaza. He did not elaborate. Asked about Arafat's comments, a spokesman for Prime Minister Benjamin Netanyahu rejected arbitration and said the Palestinian leader was trying to pressure Israel during on-going negotiations. An agreement on a peace formula, a top PLO negotiator said, would be followed "within hours" by an Arafat-Netanyahu meeting. David Bar-Illan, Netanyahu's director of communications, said: "We are not going to anything like arbitration". Israel and the PLO have been holding talks in the Tel Aviv apartment of Terje Larsen, a Norwegian and the U.N.'s top official in Palestinian self-rule areas. The Palestinians are seeking a clear commitment from Netanyahu to implement all outstanding issues in Israel-PLO peace deals, such as Israeli troop redeployment from Hebron and other parts of the West Bank, a PLO official said. Netanyahu's representative, Yitzhak Molho, would meet Palestinian officials in Gaza late on Monday in further efforts to arrange the summit, another PLO official said. Commenting on Arafat's proposal, Bar-Illan told Reuters that arbitration ran against the spirit of the 1991 Middle East peace conference that sanctioned direct peace talks between the parties. "I think it is traditional tactic to pull this kind of thing at the very last minute before an agreement is reached," Bar-Illan said. "I hope the very plain goal of the negotiations in the past few weeks, namely the achievement of an agreed upon agenda, will be achieved without any serious hitches and that the subsequent meeting between Prime Minister Netanyahu and Arafat will take place," he said. Egypt's ambassador to Israel, Mohammed Bassiouny, put the Jewish state on notice on Monday it must start to carry out commitments it made to the PLO or face cancellation of a Middle East economic conference planned for Cairo in November. "The Egyptian government has given the Israeli government three weeks to start implementing five points Israel was committed to and did not implement. Otherwise the economic conference will not be held. "The five points that Israel must implement are redeployment from Hebron, further redeployments from the West Bank, opening safe passages between Gaza and the West Bank, release of all women prisoners and lifting the closure completely," Bassiouny said. "We don't want promises, we need actions," he said. Netanyahu's office said in reaction: "The Egyptian pronouncement constitutes an unfortunate threat which can only exacerbate tensions in the region". The Israeli leader, elected in May, opposes trading occupied Arab land for peace, a concept that has been the bedrock of the Middle East peace process that began in Madrid five years ago. 7361 !GCAT !GDIP !GVIO U.N. officials said Iraqi troops had withdrawn from the capital of Iraqi Kurdistan on Monday, two days after installing their Kurdish allies, but the United States dismissed the pullback as insignificant. Opponents of Iraqi President Saddam Hussein reported executions in the streets of Arbil and said his forces were firmly in control with over 200 tanks ringing the city. "All Iraqis have left Arbil. We cannot see any more tanks or vehicles or artillery. They are about five km (three miles) away now," one U.N. official in Arbil told Reuters by telephone. The White House dismissed the reported withdrawal of troops because Iraqi forces still remained outside the city. White House spokesman Mike McCurry told reporters aboard Air Force One travelling with President Bill Clinton to Wisconsin, that reports of Iraqi forces leaving Arbil "is not terribly significant." "There is some evidence of an Iraqi redeployment," McCurry said. "But we see no indication that they are preparing withdrawal back to their original forward positions." Clinton, he said, has "a defined course of action" to take against Saddam. He declined to elaborate. Irraq announced on Sunday night it would pull back its forces to their former positions. But an Iraqi Kurdish group said Baghdad's troops remained in Arbil, captured in a joint assault with the Kurdistan Democratic Party (KDP), and were carrying out mass executions of members of the rival Patriotic Union of Kurdistan (PUK). "(Iraqi troops) have committed mass executions in Arbil itself of PUK members -- some of them have been executed in the streets. A few hundred have been killed. Many hundreds have been arrested," PUK Ankara representative Shazad Saib told Reuters. He said the KDP was guiding Iraqi troops from door to door armed with lists to find people opposed to Saddam's government. A spokesman of the opposition Iraqi National Congress (INC), in telephone contact with an INC member in Arbil, said more than 270 Iraqi tanks remained in and around Arbil on Monday. There was no confirmation of the PUK or INC reports. Reuters reporters in northern Iraq were prevented by KDP members from reaching Arbil. Despite the reports of an Iraqi pullout and uncertainty over Saddam's intentions, the attack on an area outside Saddam's control since the Gulf War had continuing repercussions. U.S. Secretary-General Boutros Boutros-Ghali, saying he was "very much concerned about the deterioration", announced he was delaying the start of an oil-for-food deal with Baghdad. Crude oil prices rose on Monday in reaction. Oil had been expected to start flowing onto world markets in September. Turkish officials, hoping to resume the trade blocked since 1990, said Ankara would appeal to the United Nations and its Western allies to prevent any delay. The plan would let Iraq sell $2 billion of oil over six months to buy humanitarian supplies to ease suffering from sanctions imposed after Iraq invaded Kuwait in 1990. Clinton placed U.S. forces in the region on high alert. General John Shalikashvili, chairman of the joint chiefs of staff, and Assistant Secretary of State Robert Pelletreau were touring regional capitals before leaving for Washington from Cairo late on Monday. But Jordan said it would give no assistance in military action against Iraq. Washington said U.N. Security Council resolutions approved after the 1991 Gulf War gave a legal basis for responding, but officials admitted Saddam had the right to move troops within that part of his own country. Arbil was not in a zone placed off-limits to Iraqi troops by the United Nations after the Gulf War to protect the Kurds. But U.S. officials said it was within the "no-fly zone" and U.N. resolutions protecting Kurds against repression applied. Fighting between the two Kurdish factions -- longtime rivals who have shifted alliances between Iraq and Iran -- flared in mid-August despite U.S. efforts to broker a ceasefire. A senior KDP member, Sami Abderrahman, said the KDP under the leadership of Massoud Barzani looked to Saddam for support after the PUK gained backing from Iran -- an allegation denied by Iran. PUK leader Jalal Talabani has warned of a split into pro-Iraq and pro-Iran regions and hinted at seeking Iranian support if Washington and its allies did not respond. Talabani's wife was reported detained by the KDP but the INC said later she and one other PUK executive, believed missing, had been found. Sulaimaniya is a PUK stronghold to the south of the Kurdish enclave. 7362 !GCAT !GPOL Palestinian President Yasser Arafat said on Monday he might seek international arbitration to keep the peace process with Israel alive. Asked about Arafat's comments, a spokesman for Prime Minister Benjamin Netanyahu rejected arbitration and said the Palestinian leader was trying to pressure Israel as negotiators sought a formula for resuming full-fledged peace talks. "We are committed to the peace process and we are seeking through all means to maintain and protect it and in case it faces difficulties, we are going to seek arbitration," Arafat told Reuters by telephone from Gaza. David Bar-Illan, Netanyahu's director of communications, said in response: "We are not going to anything like arbitration". Bar-Illan told Reuters that arbitration ran against the spirit of the 1991 Middle East peace conference that sanctioned direct peace talks between the parties. "I think it is traditional tactic to pull this kind of thing at the very last minute before an agreement is reached," Bar-Illan said. "I hope the very plain goal of the negotiations in the past few weeks, namely the achievement of an agreed upon agenda, will be achieved without any serious hitches and that the subsequent meeting between Prime Minister Netanyahu and Arafat will take place," he said. Earlier, Palestinian officials said Israeli and PLO negotiators had failed to reach agreement to resume full peace talks and arrange a first summit between Arafat and Netanyahu. One PLO official said the Palestinians were seeking a clear commitment from Netanyahu to implement all outstanding issues in Israel-PLO peace deals, such as Israeli troop redeployment from Hebron and other parts of the West Bank. Israel, he said, proposed to divert to committees for further negotiation issues already agreed in past pacts signed by previous Labour governments. "We asked for reassurances this government would honour the agreements, implement them and not seek to fragment them," the official, who asked not to be identified, said. 7363 !GCAT !GVIO An Iraqi Kurdish group said on Monday Baghdad's troops remained in the northern city of Arbil and were carrying out mass executions in the streets. Asked to confirm U.N. reports that Iraqi troops had evacuated Arbil, Patriotic Union of Kurdistan (PUK) Ankara representative Shazad Saib said: "It is not true. "(Iraqi troops) have committed mass executions in Arbil itself of PUK members -- some of them have been executed in the streets. A few hundred have been killed. Many hundreds have been arrested," Saib told Reuters. He said there were reports that those arrested, including members of the Iraqi Turkoman community and communists, were being taken to the town of Mosul, under Iraq's central control. U.N. officials contacted in Arbil by telephone said they had not heard about any mass executions. "We have seen the Iraqis leaving," one official said. "It is quiet, almost." The opposition Iraqi National Congress (INC) said that Baghdad secret police had occupied one of the group's buildings in Salahuddin, 25 km (15 miles) northeast of Arbil, and was questioning opposition figures. The secret police arrived when Iraqi troops swept into northern Iraq at the weekend to help the Kurdistan Democratic Party (KDP) ousts its rivals, the PUK, from Arbil, an INC spokesman said from London. United Nations officials in the region have said that Iraqi troops had withdrawn from Arbil, which Iraqi troops backing the captured in two days of fighting from the rival PUK. But the INC spokesman said Iraqi tanks were still on the outskirts of Arbil and that the KDP had allowed Iraqi secret police to cordon off the INC building in Salahuddin which is a KDP stronghold. "Early today the KDP brought the Iraqi Mukhabarat (secret police) to our main office and surrounded it with our people inside," the spokesman told Reuters from London. KDP officials said they had no comment. The INC spokesman said about 150 people -- INC members and their families -- were being questioned by the secret police. The INC umbrella opposition group has said Baghdad's troops had executed nearly 100 defectors from Saddam's army in a camp near Arbil, bombed INC offices inside the town, searched out opposition figures and confiscated files when it swept into the city on Saturday. The INC said the Iraqi secret service had made its headquarters in the former Kurdish parliament building in Arbil, the administrative centre of the Kurdish-controlled north. 7364 !GCAT !GDIP !GVIO Iraqi forces have pulled out of the captured northern Kurdish city of Arbil after installing an allied faction there and long columns of tanks and other vehicles have moved south, U.N. officials said. But it was not clear early on Tuesday how far President Saddam Hussein was pulling back his forces. The United States dismissed the redeployment as "insignificant". Exiled Iraqi opposition officials said 270 Iraqi tanks were within striking distance of Arbil. "All Iraqis have left Arbil. We cannot see any more tanks or vehicles or artillery," a U.N. official in Arbil told Reuters by telephone. Iraq announced on Sunday night it would pull back its forces to their former positions after seizing Arbil from rebels of the Patriotic Union of Kurdistan (PUK) on Saturday. Rupert Colville, an official of the U.N. High Commissioner for Refugees, told the U.S. network CNN that long columns of tanks were heading south and one U.N. worker had seen a convoy of some 240 military vehicles moving "well away" from Arbil. Shops were reopening in the city but there was no water or electricity, which could present a health hazard, Colville said. The White House dismissed the reported withdrawal of troops because Iraqi forces still remained outside the city. White House spokesman Mike McCurry told reporters travelling with President Bill Clinton to Wisconsin that reports of Iraqi forces leaving Arbil was "not terribly significant". "There is some evidence of an Iraqi redeployment," McCurry said. "But we see no indication that they are preparing withdrawal back to their original forward positions." Clinton, he said, has "a defined course of action" to take against Saddam. He declined to elaborate. Clinton placed U.S. forces in the region on high alert on Saturday. A PUK spokesman said Baghdad's troops remained in Arbil, along with their new allies, the Kurdistan Democratic Party (KDP), and were carrying out mass executions of PUK members. Iraqi troops "committed mass executions in Arbil itself of PUK members -- some of them have been executed in the streets. A few hundred have been killed. Many hundreds have been arrested," PUK Ankara representative Shazad Saib told Reuters. He said the KDP was guiding Iraqi troops from door to door armed with lists to find people opposed to Saddam's government. KDP rebels refused to allow reporters into Arbil. The next obvious target for the combined KDP-Iraqi forces would be the PUK stronghold of Sulaimaniya, southeast of Arbil near the mountainous border with Iran. Shelling was reported on the road to Sulaimaniya on Sunday but U.N. officials said the area appeared to be quiet on Monday. Saddam's military move and the U.N. decision to delay the implementation of Iraq's oil-for-food deal sent the price of crude oil rising on international markets on Monday. Iraqi oil had been expected to start flowing onto world markets in September under a plan that would let Iraq sell $2 billion of oil over six months to buy humanitarian supplies to ease suffering from sanctions imposed after Iraq invaded Kuwait in 1990. General John Shalikashvili, chairman of the joint chiefs of staff, and Assistant Secretary of State Robert Pelletreau were touring regional capitals before leaving for Washington from Cairo late on Monday. But there was little sign of Arab or Turkish support for Western military intervention in Iraq, reflecting what analysts said was a widespread feeling that a breakup of Iraq would only lead to further insecurity and possible Iranian intervention. Jordan said bluntly on Monday it would give no assistance in military action against Iraq. But Western analysts did not rule out the possibility of a punitive U.S. strike against Iraq, possibly at known military targets near Baghdad. The United States fired missiles at Baghdad in June, 1993, in response to an alleged Iraqi plot to kill former president George Bush during a visit to Kuwait. Washington said U.N. Security Council resolutions approved after the 1991 Gulf War gave a legal basis for responding. Arbil was not in a zone placed off-limits to Iraqi troops by the United Nations after the Gulf War to protect the Kurds. But U.S. officials said it was within the "no-fly zone" and U.N. resolutions protecting Kurds against repression applied. Fighting between the two Kurdish factions -- longtime rivals who have shifted alliances between Iraq and Iran -- flared in mid-August despite U.S. efforts to broker a ceasefire. The KDP said it turned to Saddam for help because the PUK was being backed by Iran. 7365 !GCAT !GPOL Palestinian President Yasser Arafat held talks stretching into early Tuesday with an Israeli negotiator on arranging his first summit with Prime Minister Benjamin Netanyahu, PLO officials said. The late-night session with Netanyahu's representative Yitzhak Molho followed a warning by Arafat he would seek international arbitration if Israeli-PLO attempts to resume full-fledged peace negotiations faltered. "We are committed to the peace process and we are seeking through all means to maintain and protect it and in case it faces difficulties, we are going to seek arbitration," Arafat told Reuters by telephone from Gaza. He did not elaborate. Asked about Arafat's comments, a spokesman for Netanyahu rejected arbitration and said the Palestinian leader was trying to pressure Israel during negotiations. The Palestinians are seeking a clear commitment from Netanyahu to implement all outstanding issues in Israel-PLO peace deals, such as Israeli troop redeployment from Hebron and other parts of the West Bank, a PLO official said. An agreement on such a peace formula, a top PLO negotiator said, would be followed "within hours" by an Arafat-Netanyahu meeting. Asked how soon the men might meet, Netanyahu's aide and peace negotiator Dore Gold told CNN: "It really of course depends on the content of the understandings that are reached. "In fact, I would say the understandings for proceeding ahead with the negotiations and implementation are far more important than the drama of the meeting itself. Once we have these elements put in place, I see a meeting as being feasible." Netanyahu, who won election in May pledging not to trade occupied land for peace, has said security concerns dictated a reexamination of where Israeli troops would be stationed in Hebron, home to 400 Jewish settlers and 100,000 Palestinians. PLO officials have said they would not renegotiate the redeployment agreed by the previous Israeli government led by former prime minister Shimon Peres. Israel and the PLO have been holding talks in the Tel Aviv apartment of Terje Larsen, a Norwegian and the U.N.'s top official in Palestinian self-rule areas. Gold called the tone of those negotiations "very productive" and said Israel's new government and the PLO realised they had to move cautiously. "I think both sides understand that we are basically in this boat together. If either of us take rash decisions, we can sink the boat," he told CNN. Gold said detailed Israeli-PLO discussions on Hebron would take place only after the initial meeting between Arafat and Netanyahu and a decision to "re-engage" in full negotiations. "The kind of negotiations we have to go into with the Palestinian (self-rule) Authority are not negotiations in which one side wins and one side loses," Gold said. "That takes a little bit of time and that's why people have to have patience with the way in which we are building our channels of communication for negotiation," he said. Egypt's ambassador to Israel, Mohammed Bassiouny, put the Jewish state on notice on Monday it must start to carry out commitments it made to the PLO or face cancellation of a Middle East economic conference planned for Cairo in November. "The Egyptian government has given the Israeli government three weeks to start implementing five points Israel was committed to and did not implement. Otherwise the economic conference will not be held," he told foreign reporters. Besides Hebron and other West Bank redeployment, the points included "safe passages" for Palestinian travel between Gaza and the West Bank, the release of some two dozen women prisoners held by Israel and the lifting of a closure over the two areas. 7366 !GCAT !GDIP !GVIO Libyan leader Muammar Gaddafi said on Monday the Iraqi army's attack on Kurds in northern Iraq was no business of the West, and could not be called aggression. "They say Iraq has carried out an act of aggression. What act of aggression is this?" Gaddafi said in a speech to a large public gathering in the Libyan capital held as part of celebrations of the 27th anniversary of his seizure of power. "The Iraqi army has entered Arbil. What country is Arbil in? It's in Iraq. "They say...America must hit Iraq with planes and rockets," he added. "This is unbelievable." Gaddafi said Libya saw the Kurds as a nation "like the Arab nation and the Persian and Turkish nation". Most Kurds live in neighbouring areas of Iraq, Turkey or Iran. "But how can we (the international community) support the slaughter of Kurds in Turkey and pretend we are protecting them in Iraq? "This is part of (the West's) attempt to destroy the Arab nation and it has nothing to do with caring for the Kurds," he added. 7367 !GCAT !GDIP !GVIO Iran on Monday blamed the United States for the crisis in northern Iraq, stressing that regional powers held the key to ending inter-Kurdish fighting. Foreign Ministry spokesman Mahmoud Mohammadi said U.S. interference was "the main cause for disputes and insecurity" in Kurdish northern Iraq. "Iran is closely watching the situation in northern Iraq." Mohammadi, quoted by state-run Tehran radio, also denied that his country was involved in the conflict. He was responding to claims by Baghdad and the Kurdish Democratic Party (KPD) that Tehran was backing the rival Patriotic Union of Kurdistan (PUK). "There can be no military solution to the crisis in northern Iraq, which should be resolved peacefully," Mohammadi said, adding that "the problems of northern Iraq could be best resolved through cooperation between Syria, Turkey and Iran." He was referring to regular consultations held by Iraq's three neighbours, which also have strong Kurdish minorities, over Kurdish-run northern Iraq. "If the borders of the Islamic Republic of Iran are violated, we would strongly deal with it," Mohammadi warned. Iranian troops in July attacked positions of an Iranian Kurdish opposition group in northern Iraq after Tehran accused the rebels of cross-border raids. Iranian President Akbar Hashemi Rafsanjani, on a visit to Kenya, said on Monday: "Conditions (in northern Iraq) are not good and it has raised some serious concern. "We do hope there will be tranquility prevailing there." Iran's media have said that the Iraqi attack on Arbil could not have taken place without Washington's consent. The United States has placed its forces in the region on top alert and warned Iraq over the attack. Tehran radio said on Monday the lack of further action by Washington against Baghdad showed that the United States and Iraq had common interests. "What has prevented America from taking any action against the Saddam (Hussein) government...is that the White House and Baghdad have common interests in suppressing the people of Iraqi Kurdistan," the radio said in a commentary. "Saddam has an interest in suppressing the people of this area because the Kurds have opposed his policies, and America because it is upset at Iraqi Kurds as it has not been able to carry out its interventionist plans there," the radio said. The radio was referring to U.S.-mediated peace talks between the two Kurdish factions which broke down in London last week. Iran has blasted the U.S. mediation, saying Washington was trying to gain influence in northern Iraq by countering Tehran's diplomatic efforts there. 7368 !GCAT !GCRIM A Moroccan court will decide next week on an appeal by an elderly French couple jailed for up to four years last month for drug smuggling, a court spokesman said on Monday. The couple, Andre and Jeanne-Marie Gangneux, were caught in July trying to smuggle nearly 130 kg of cannabis resin to France. The husband and wife, aged 69, and 68, were sentenced to four and three years imprisonment respectively by a Tangier court, in northern Morocco. They also were fined a total of 27,000 dirhams ($3,140). "The Tangier court of appeal on Monday postponed the verdict until September 9. The court decision aimed at more consultation on the case," a court spokesman told Reuters by telephone from Tangier. The Gagneux couple, who come from the Moselle region of northeast France, told the court earlier they had come to Morocco as tourists but turned to drug smuggling because they were desperate for money. They were arrested on July 26 while driving their van onto a ferry at Tangier port bound for Spain. Police said they discovered 129.5 kg of hashish in the van. According to the defence, Jeanne-Marie had health problems because she was diabetic and partly blind. Earlier this year, to improve its image abroad, Morocco launched a natiowide crackdown on drug smuggling. Several British, German, Spanish, French, and Hungarian nationals have been arrested for involvement in drugs trafficking. 7369 !GCAT !GCRIM !GVIO An inquest in Cyprus has ruled that the death of a Greek Cypriot Kurd activist two years ago was premeditated murder, but avoided stating who was responsible for the death. The inquest ruling into the death of Cypriot Theofilos Georgiades was given to the Cypriot Attorney General on Monday after inquiries lasting more than two years. During the inquest hearing witnesses had stated that Georgiades was killed by Greek Cypriots who had been recruited by the Turkish Secret Service, known as MIT. Georgiades, 37, representative of the Nicosia-based Kurdistan Solidarity Committee, was gunned down outside his home at a Nicosia suburb in March 1994 by an unknown killer. Witnesses had testified during the inquest that a convict serving a life sentence at Nicosia central prison was recruited by the Turks to seek a person to carry out the killing. The inquest stated it was impossible to reach any findings based on the witnesses' statements without the possibility of the persons named answering the charges in a trial. The person witnesses said was the killer disappeared two months after Georgiades's murder, and was later found shot dead on a remote mountainside in the southern Limassol district. 7370 !GCAT !GDIP U.S. Nation of Islam leader Louis Farrakhan said on Monday Washington blocked his $1 billion gift from Libyan leader Muammar Gaddafi because it was afraid of the power it would bring. The U.S. Treasury Department last week denied Farrakhan's application to receive either the $1 billion Gaddafi pledged to The Nation of Islam after meeting Farrakhan in January or a $250,000 human rights prize. The Treasury said Libya had been on Washington's list of states that sponsor international terrorism since December 1979. "There is fear first of a black man who is gaining influence and is a man they do not control. Second, if we have accomplished what we have accomplished so far without money then they (U.S.) are afraid of what we can accomplish if we did have money," Farrakan told a news conference. "The American people are captive to those in power who manipulate them by falsehood. With $1 billion we could effectively effect the thinking of all of the American people," he added. Farrakhan, a black Moslem minister who organised last October's Million Man March that brought many thousands of black men to Washington for a peaceful rally, has vowed "the mother of all court battles" against the U.S. Treasury's decision. Asked about his chances for success, Farrakhan said: "The same as David had when he fought Goliath. David's brothers did not think he had a chance. David picked up his stone. I have picked up my stone. "I can assure you that with the help of Allah I will be victorious and then you will know that Allah is with us in the West," he said. Farrakhan has said Gaddafi pledged to put Libya's wealth behind The Nation of Islam because he was so impressed with the Million Man March. He said the gift would have built mosques, schools and hospitals for African Americans and the U.S. administration should have matched it with a gift of its own instead of barring him from accepting the money. Washington has criticised Farrakhan for his visits to Libya and his ties to its leader. He arrived in Tripoli on Wednesday to receive the 1996 Muammar Gaddafi human rights award and attend celebrations for the Libyan leader's 27th year in power. Farrakhan, who has lashed out at Western-led sanctions against Libya, said The Nation of Islam wanted to be a political force in the United States to influence U.S. foreign policy in favour of African and Middle East countries. He said the movement had registered nearly eight million blacks to vote in November's presidential race and was trying to do the same for Arab immigrants. Farrakhan said his duty was to link wealthy educated blacks to poorer blacks. He said most Nation members would vote for President Bill Clinton because they were members of the Democratic Party but added neither candidate would help blacks unless they helped themselves. "Neither President Clinton nor Senator (Bob) Dole will do for us unless we have the power to leverage our vote to bring about change," he said. "We can no longer rely on the good-sounding promises of any presidential candidate or president. We must rely on the power or our unity and the leveraging of that power to bring about change," he added. 7371 !GCAT !GPOL Palestinian President Yasser Arafat, putting pressure on Israel, said on Monday he might seek international arbitration to keep the peace process alive. "We are committed to the peace process and we are seeking through all means to maintain and protect it and in case it faces difficulties, we are going to seek arbitration," Arafat told Reuters by telephone from Gaza. Earlier, Palestinian officials said Israeli and PLO negotiators had failed to find a formula to resume full-fledged peace talks and arrange a first summit between Arafat and Israeli Prime Minister Benjamin Netanyahu. One PLO official said the Palestinians were seeking a clear commitment from Netanyahu to implement all outstanding issues in Israel-PLO peace deals, such as Israeli troop redeployment from Hebron and other parts of the West Bank. Israel, he said, proposed to divert to committees for further negotiation issues already agreed in past pacts signed by previous Labour governments. "We asked for reassurances this government would honour the agreements, implement them and not seek to fragment them," the official, who asked not to be identified, said. 7372 !GCAT !GVIO More than 270 Iraqi tanks remained in and around Arbil on Monday after Baghdad's forces and a Kurdish faction captured the northern Iraqi city in a weekend assault, an Iraqi opposition group said. "There are over 270 tanks still in the Arbil area," a spokesman of the Iraqi National Congress (INC) said after telephone contact with an INC member in Arbil. "There are 100 tanks in Kesnezan -- the outer suburbs of Arbil," he said. Sixty were in Ankawa, a former Iraqi army base in the western sector of Arbil, and the others were in towns close to the city, the spokesman said. He said tanks had also been seen deployed on the central University Road in Arbil. United Nations officials in Arbil said earlier Iraqi tanks had withdrawn from the city. The spokesman for the INC, a general opposition group, said regular Iraqi army troops were manning checkpoints in Ankawa, a nearby camp for Iraqi defectors in Qushtapa, 22 km (15 miles) south of Arbil, and another point close to Arbil. "All Kurdish regional government buildings are now flying the Iraqi flag," he said. "Tens of thousands of posters of (Iraqi President) Saddam (Hussein) have been put up around city. All major public buildings, including hospitals, and hundreds of homes have been looted by Iraqi soldiers." A spokesman for the Kurdistan Democratic Party (KDP), which joined with Baghdad's troops to take Arbil from the rival Patriotic Union of Kurdistan (PUK), said Iraqi troops had left Arbil. "They have withdrawn...It was agreed that this involvement would be very limited," Faik Nerweyi, a KDP Ankara representative, told Reuters. He said the KDP had been forced to ask for Iraq's help -- "the last thing that we would have wanted" -- because the PUK had recently collaborated with Iran and because it had occupied Arbil since 1994. "If we had tried to regain Arbil...there would have been much bloodshed," he said. "With the Iraqi troops, the PUK fled...It's poison. We had to drink it." 7373 !GCAT !GHEA !GSCI Researchers have localised a second gene responsible for the most common type of diabetes and believe severe mutation of the same gene may cause a rare form of the disease among younger people. An international team of scientists studied 217 individuals from the Botnia region on the western coast of Finland, considered an ideal locale for genetic studies because its largely homogeneous population makes it easier to detect genetic defects, the researchers said. The 217 subjects were from 26 families who had three or more members stricken with non-insulin dependent, or type 2, diabetes (NIDDM), which afflicts more than 100 million people worldwide. The researchers located a gene called NIDDM2 on chromosome 12 that may be involved in a significant fraction of adult-onset diabetes, according to the study published in Monday's edition of the journal Nature Genetics. Researchers from the Howard Hughes Medical Institute at the University of Chicago reported in May they had found among a group of Mexican-Americans the first gene linked to type 2 diabetes, located on chromosome 2. The complex disease is caused by different chromosomes in different groups of families. "Our study has narrowed it to a very small part of the genome on chromosome 12. So essentially it's like finding a needle in a haystack," said Dr. Melanie Mahtani, a geneticist at the Whitehead Institute for Biomedical Research in Cambridge, Massachusetts and principal author of the study. The gene was found in the same part of the genome as the gene that causes a rare form of diabetes, MODY3, which afflicts less than five percent of those suffering from diabetes and mostly people under the age of 30. "Both the MODY3 patients and the NIDDM patients show abnormally low levels of insulin and this suppports the theory the two diseases may be caused by mutations of the same gene," Mahtani told Reuters. "MODY3 may well be caused by a very severe mutuation of the gene and the more common form, NIDDM, may be caused by a milder mutation," she said. The researchers were unsuccessful in finding the gene until they limited their study to those who suffered from low insulin levels, which runs contrary to popular wisdom in the medical community, said Elisabeth Widen, a Whitehead physician and co-author of the study. The results may spur other researchers to change their methods and subdivide patient populations based on physiological parameters, she said. "It's important in other genetic studies in that many of the common diseases may be caused by several genes. It may be necessary to divide the population in order to localise the disease-causing genes in hypertension, obesity, asthma -- all examples of common complex diseases," Mahtani said. Identifying the gene can lead to greater understanding of diabetes and eventually perhaps to treatments or cures. Type 2 diabetes, which strikes an estimated one in 10 people over the age of 45, costs about $85 billion a year in health care in the United States alone and is a major cause of death. 7374 !GCAT !GDIP !GVIO The United States said on Monday that Iraqi troops appeared to be moving deeper into Kurdish opposition-held territory in northern Iraq, and President Bill Clinton readied a "course of action" in response. White House spokesman Mike McCurry, speaking with reporters as the president campaigned in Wisconsin, said there was evidence that some of the Iraqi forces which overran the Kurdish stronghold of Arbil over the weekend were "penetrating deeper" into northern Iraq. The Iraqi military advance threatened the town of Sulaymaniyah, the administrative capital of the Kurdish opposition, he said. McCurry said there was also "reason to believe" that some Iraqi troops were involved in executions of leaders of an anti-Baghdad Kurdish faction in Arbil. Clinton, who placed U.S. forces in the Gulf region on high alert on Saturday when the crisis blossomed, had defined "a course of action and has been consulting some governments and informing some governments of that course of action," McCurry said. Although there were reports that Clinton had signed off on military action, McCurry refused to confirm this, saying "political, diplomatic, economic measures (or) any combination of those things could be included in an appropriate response." Clinton made no mention of the crisis in his Labour Day speeches, but after addressing a crowd of about 25,000 in the Green Bay suburb of De Pere, he went to a house trailer set up near the podium as a temporary headquarters and telephoned French President Jacques Chirac. "It was a useful, productive and candidate discussion of the situation in northern Iraq," McCurry said. Clinton also conferred twice by telephone with White House chief of staff Leon Panetta and National Security Adviser Tony Lake, who were both back in Washington following the fast-breaking situation. The White House believes Iraqi President Saddam Hussein sent three tank divisions composed of 30,000-40,000 elite Republican Guard troops into northern Iraq to help a Kurdish faction involved in a bloody power struggle with another Kurdish group with links to Iran. It says U.N. Security Council resolutions approved after the 1991 Gulf War provide the legal basis for responding to Saddam's actions. "Our interest is in keeping Saddam Hussein from believing that unjustifiable behaviour of this nature is cost-free," McCurry said. He added that every time Saddam "has miscalculated and believed that he could use his military power with impunity, the international community has reminded him that he has obligations in the aftermath of his defeat in the Persian Gulf War." Asked about the timing of a possible U.S. strike on Iraq, McCurry said "I'm not going to speculate on that." The United States has powerful air and naval firepower in or near the Gulf region, including a carrier battle group led by the aircraft carrier Carl Vinson. 7375 !GCAT !GDIS !GWEA Hurricane Edouard, its winds weakened to 80 mph (128 kph), veered east of Cape Cod and Nantucket Island on Monday, sparing the New England coast its full wrath and causing only slight property damage. Winds of 50 to 70 mph (80 to 112 kph) with hurricane force gusts as high as 90 mph (145 kph) blew a few boats from their moorings, uprooted trees and knocked out power to more than 47,000 customers along the Massachusetts coast and on Nantucket and Martha's Vineyard islands south of Cape Cod. "There's a couple of sailboats sunk in the harbor," said Dave Fronzuto, a harbormaster on Nantucket. "We've got a couple of .... trawlers up on the beach, a couple of sailboats up on the beach, but besides that it's not too bad." At 5 p.m. EDT (2100 GMT), the center of Hurricane Edouard was located at latitude 41.9 north, longitude 66.9 west, about 165 miles (233 km) east-northeast of Nantucket and moving north northeast at 12 mile mph (19 kph), said meterologist Bob Burton of the National Weather Service in Taunton, Massachusetts. Edouard's maximum winds had dropped from 115 mph (185 kph) on Sunday as the storm moved over cooler North Atlantic waters and forecasters said they expected the hurricane to pose no major threat to the Canadian provinces further north. Tides ran one to three feet (0.3 to one meter) above normal at high tide, causing some flooding and beach erosion, Doug Forbes of the Massachusetts Emergency Management Agency said. About 1,000 people on the Cape and the islands spent the night in emergency shelters set up in schools, he said. "There's some minor broken windows, shingles blown off houses, especially on the southeastern part of the Cape and Nantucket," Forbes said. Edouard's winds blew off the new roof at the fire department in Hyannis, home of the Kennedy's Cape Cod compound. "The winds got underneath the membrane and just peeled it back," causing about $50,000 of damage, said firefighter Tim Lanman. Three-fourths of Martha's Vineyard residents had power outages early on Monday and Nantucket and towns along the mid-Cape Cod section such as Hyannis, Falmouth and Chatham were also without electricity intermittently during the day, utility officials said. The U.S. Coast Guard warned fishing vessels to seek shelter and closed ports in Boston, Fall River and New Bedford in Massachusetts and Providence, Rhode Island, to commercial ships, a Coast Guard spokesman said. Many commercial airline flights in and out of Logan Airport in Boston were delayed or canceled. State parks and beaches from Rhode Island to Cape Cod and north into New Hampshire and Maine were ordered closed on Sunday and vacationers were urged to head inland. Edouard's northward path was expected to dump several inches (cm) of rain on the New Hampshire and Maine coasts on Monday and on the Canadian provinces of Nova Scotia, Prince Edward Island and New Brunswick late on Monday and on Tuesday, Burton said. Meanwhile, far out in the Atlantic, Hurricane Fran was aiming its 80 mph (128 kph) winds for the Bahamas and the southeast United States. "We're looking for it to strengthen and by the latter part of the week we could be looking at 90 mph (145 kph) winds," meterologist Burton said. "It looks like perhaps by Thursday or so, Fran would be a threat to the Bahamas and certainly to the southeast United States." 7376 !GCAT !GENV !GWEA A hurricane watch was issued for the sparsely populated central Bahamas as Hurricane Fran sped toward the chain of tiny islands, National Hurricane Center forecasters said on Monday. Fran could threaten the central or northern coast of Florida by late on Thursday, forecasters said. At 5 p.m. EDT (2100 GMT) Fran was 560 miles (940 km) east of Nassau at latitude 24.1 north, 68.6 west. The storm, with 80 mph (130 kmh) winds, picked up speed and was moving west- northwest at 14 mph (19 km), which could put it near the chain of tiny Bahamian islands by Tuesday, the National Hurricane Center said. The Bahamian government issued a hurricane watch for the central portion of the 600-mile (965 km) long archipelego, including the islands of San Salvador, Great Exuma, Long Islnd and Cat Island. In Miami, hurricane center forecaster Jerry Jarrell said an upper-level ridge of air was steering Fran northwest and could help the storm grow stronger over the next few days. "It's difficult to see why it would hit South Florida and northern or central Florida seems like a much better bet. But we're still three days away from U.S. landfall and a lot could happen," Jarrell said. "It's not a given that it's going to hit the Florida coast." Hurricane-force winds extended outward about 60 miles (95 km) from Fran's center. In Central Florida, the U.S. space agency said it would decide on Tuesday whether to move the shuttle Atlantis off its seaside launch pad. Atlantis is being prepared for a Sept. 14 launch to rendezvous with the Russian space station and pick up American astronaut Shannon Lucid. Over the Labor Day holiday weekend, the southeastern United States dodged Hurricane Edouard, which blew north and whipped up waves and heavy surf in New England. 7377 !GCAT !GDIP !GVIO U.S. officials on Monday played down Iraq's announced withdrawal of its troops from the Kurd stronghold of Arbil, saying the Iraqis remained in force outside the northern city they overran this weekend. White House spokesman Mike McCurry told reporters aboard Air Force One travelling with President Bill Clinton to this Wisconsin town for a campaign speech that reports of Iraqi forces leaving Arbil were "not terribly significant." He said Clinton had "a defined course of action" to take against Iraqi President Saddam Hussein for violating an understanding not to take military action against the rebelious Kurds, who have split into battling factions. McCurry said National Security Adviser Tony Lake briefed Clinton on Iraq in Little Rock, Arkansas, on Sunday night. "Tony wanted to show him some things that he would need to look at that you can't really see on the telephone," he said. In Washington a foreign policy official said Lake had brought Clinton "graphics, maps, that sort of thing." Like others in the administration, the official, who asked not to be identified, declined to discuss a possible response to the Iraqi action or its timing. "We are going to do whatever we choose to do whenever we choose to do it. We are being deliberately ambiguous until we choose to unveil our chosen response," he said. Clinton made no mention of Iraq in his campaign speech to a crowd at a Labour Day picnic. But after he spoke, Clinton immediately telephoned French President Jacques Chirac to discuss Iraq and called Lake and chief of staff Leon Panetta from aboard Air Force One en route to Milwaukee. McCurry estimated there were three divisions of Iraqi troops north of the 36th parallel, set by the United States, Britain and France as a line Iraqi military flights are not allowed to cross. "There is some evidence of an Iraqi redeployment. But we see no indication that they are preparing a withdrawal back to their original forward positions," McCurry said. "It really is not terribly significant because they still have a significant force arrayed around Arbil." Lake's trip to Little Rock late on Sunday was kept secret until McCurry mentioned it to reporters. Clinton has been contacting U.S. allies to discuss what to do in response to Iraq's military action. He talked to British Prime Minister John Major on Sunday. Aides said he was expected to contact German Chancellor Helmut Kohl as well as a number of Arab leaders. U.S. forces in the region were on high alert in response to the Iraqi moves and two envoys, Joint Chiefs of Staff Chairman Gen. John Shalikashvili and Assistant Secretary of State John Pelletreau, were sent to Saudi Arabia for talks. Saddam Hussein ordered three tank divisions composed of 30,000-40,000 elite Republican Guard troops into northern Iraq to help the Kurdish Democratic Party (KDP), which is involved in a bloody power struggle with another Kurdish group, the Patriotic Union of Kurdistan (PUK), which has links with Iran. After PUK guerrillas were driven from Arbil by Iraqi forces, their leader Jalal Talabani called for U.S. help, playing down his ties to Iran. The United States says U.N. Security Council resolutions approved after the Gulf War provide the legal basis for responding to Saddam's actions, although officials admit the Iraqi leader has the right to move troops around within that part of his own country. Bob Dole, the Republican presidential opponent, has raised the Iraqi issue in his campaign, saying on Sunday that the Clinton administration had brought on the crisis by failing to warn adequately against renewed aggression against the Kurds. "Saddam Hussein has been testing American leadership and found it lacking," Dole said. 7378 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Before Anand Sharma shows your company how to streamline operations, he will extract your pledge that any employees whose jobs are cut as a result of his work will be reassigned, not fired. "Layoffs are exactly the wrong thing to do with skilled workers when orders are slow," the efficiency expert said. "Instead, we should be using all those freed-up minds to help us get our manufacturing operations ready for the next uptick in demand. "What I'm worried about specifically," Sharma said, "is the danger of worker layoffs as a cost-cutting device in response to the normal fluctuations in the business cycle." Sharma is not alone in his outlook. Labour Secretary Robert Reich said in an August "Training" magazine interview that instead of downsizing, management should be "relying on the work force as a source of innovation and quality." Corporations that don't, warns outplacement authority John Challenger of Chicago, will only be worse off. With layoffs in the first half of the year at 270,513 running 28 percent ahead of the first half of 1995, Challenger says: "With each new layoff, corporations lose more of their memory ... to solve problems, sell products and services, interact with customers, develop new technologies, or design marketing campaigns." Yet, according to a new survey by the Society For Human Resource Management, in Alexandria, Va., 23 percent of corporations surveyed reported that they laid off workers due to "poor economic conditions" and 22 percent were due to a "profit decline." Sharma, president of TBM Consulting Group, in Durham, N.C. -- which utilizes efficiency methods pioneered by Japanese automaker Toyota Motor Corp. -- said financially strapped businesses have an alternative. "I don't tell a company to have a no-layoff policy and harbour all the mediocre and non-productive people," he said. "I am telling them that, unlike equipment and buildings, the human resource is the only investment that you can make that appreciates over time." Since machines "don't reinvent themselves" but human beings do "by adapting to changing conditions," Sharma calls it "dumb" to replace them with robots. He should know. His firm consults for some of the stars of the industrial world: Allied Signal Aerospace, Chrysler Corp., Pitney-Bowes, and Mercedes-Benz in Sao Paulo, Brazil. Four years ago, Sharma showed stretch-wrapping manufacturer Lantech, of Louisville, Ky., how to build the same machine with 20 fewer people in just three days instead of a month, using continuous improvement methods pioneered by Toyota's Taiichi Ohno. Sharma's "no layoff" policy inspired employee cooperation. "If you are extremely good at making this machine," he told them, "you will be assigned to teach other workers what to do. "So the reassignment is taken as a reward, not a punishment," he said. The 20 workers were reassigned "to find a project they were thinking of, or a new product, or to team up with engineers to develop new products better and faster," Sharma said. "The word got out that they were making more machines, not dead on arrival." Lantech's sales of $40 million in 1992 climbed to $60 million last year and are expected to exceed $75 million this year, company Chairman Pat Lancaster said. "The impact they had on us was tremendous, particularly shortening the cycle time needed to create a new product from four years to nine months," Lancaster said. Sharma added, "They still have the same 300 people and they are doing almost twice as much work as they were doing when we started with them and there has not been a single layoff." Another plus: Lantech "has started sharing in terms of bonuses and improved working conditions with the employees," Sharma said. "Many people have been promoted into higher positions, so everyone has gained." (EDITORS: Sherwood Ross is a freelance writer who covers workplace issues for Reuters. Any opinions in the column are solely those of Mr. Ross.) 7379 !GCAT !GWEA Hurricane Edouard, its winds weakened to 80 mph (128 kph), veered east of Cape Cod and Nantucket Island on Monday, sparing the New England coast its full wrath and causing only slight property damage. Winds of 50 to 70 mph (80 to 112 kph) with hurricane force gusts as high as 90 mph (145 kph) blew a few boats from their moorings, uprooted trees and knocked out power to more than 47,000 customers along the Massachusetts coast and on Nantucket and Martha's Vineyard islands south of Cape Cod. "There's a couple of sailboats sunk in the harbor," said Dave Fronzuto, a harbormaster on Nantucket. "We've got a couple of .... trawlers up on the beach, a couple of sailboats up on the beach, but besides that it's not too bad." At 2 p.m. EDT (1800 GMT), the center of Hurricane Edouard was located at latitude 41.3 north, longitude 67.3 west, about 145 miles (233 km) east of Nantucket and moving north northeast at 12 mile mph (19 kph), meterologist Bob Burton of the National Weather Service in Taunton, Massachusetts, said. Edouard's maximum winds had dropped from 115 mph (185 kph) on Sunday as the storm moved over cooler North Atlantic waters and forecasters said they expected the hurricane to pose no major threat to the Canadian provinces further north. Tides ran one to three feet (0.3 to one metre) above normal at high tide, causing some flooding and beach erosion, Doug Forbes of the Massachusetts Emergency Management Agency said. About 1,000 people on the Cape and the islands spent the night in emergency shelters set up in schools, he said. "There's some minor broken windows, shingles blown off houses, especially on the southeastern part of the Cape and Nantucket. One of the things that we're most concerned about is the storm surge of five feet (two metres) or more at high tide at 3 p.m. (1900 GMT). It could cause beach flooding and minor property damage," Forbes said. Three-fourths of Martha's Vineyard residents had power outages and Nantucket and towns along the mid-Cape Cod section such as Hyannis, Falmouth and Chatham were also without electricity, utility officials said. The U.S. Coast Guard warned fishing vessels to seek shelter and closed ports in Boston, Fall River and New Bedford in Massachusetts and Providence, Rhode Island, to commercial ships, a Coast Guard spokesman said. State parks and beaches from Rhode Island to Cape Cod and north into New Hampshire and Maine were ordered closed on Sunday and vacationers were urged to head inland. Edouard's northward path was expected to dump several inches (cm) of rain on the New Hampshire and Maine coasts on Monday and on the Canadian provinces of Nova Scotia, Prince Edward Island and New Brunswick late on Monday and Tuesday, Burton said. Meanwhile, far out in the Atlantic, Hurricane Fran was aiming its 80 mph (128 kph) winds for the Bahamas and the southeast United States. "We're looking for it to strengthen and by the latter part of the week we could be looking at 90 mph winds," meterologist Burton said. "It looks like perhaps by Thursday or so, Fran would be a threat to the Bahamas and certainly to the southeast United States." 7380 !GCAT !GPOL !GVOTE After a week of rolling across the countryside by train and bus, President Bill Clinton on Monday returned to a more traditional mode of presidential transportation -- Air Force One -- and stormed into another Midwestern state. He was greeted by one of the biggest crowds yet on this nine-day, 10-state campaign swing -- about 25,000 gathered on the bank of the Fox River at Voyageur Park, where explorers Pierre Marquette and Louis Joliet landed in the 1600s. It was the last day of the long haul that centred around his acceptance last week of the Democrats' nomination for a second four-year term at their convention in Chicago. After a stop in Milwaukee, he was to return to Washington and concentrate on how to respond to Iraq's military actions against the Kurdish minority in northern Iraq. At a sunny Labour Day family picnic in this suburb of Green Bay, a largely Republican area that Clinton lost in 1992 to George Bush by 5 percentage points, the president honoured the work ethic and stressed his education proposals including the launch of a national literacy campaign for children and granting families a tax deduction of up to $10,000 a year for the cost of college tuition. "That is a bridge worth fighting for," he said, continuing his post-convention campaign slogan that he represents "a bridge to the future" as opposed to Republican Bob Dole's claim that he would serve as "a bridge to the past" to hearken America back to a time of higher moral virtues. Clinton took the opportunity to attack Dole's proposal for a 15 percent across-the-board tax cut, saying it would trigger deeper deficit spending and cause interest rates on such everyday matters as credit cards and home mortgages to go up. "Folks, we tried this once before," he said, referring to 1980s tax cuts under Republican President Ronald Reagan. "Would you go to the bank yourself to borrow money to give yourself a tax cut? Then why would you hire somebody to do it for you?" Clinton was heartened by a sign in the crowd, "Republicans for Clinton," telling its owner "God bless you." Asked later about the size of the crowd, he said: "It's amazing." He won Wisconsin by more than 100,000 votes in 1992. Internal Clinton campaign polls show him considerably ahead in this important state. Then it was back to Air Force One for Clinton, who spent four days on a train and two on a bus in the last nine days. Clinton campaign aides believed that during the trip his message got out to 75 percent of the "persuadable" voters who are independent, not beholden to either party, and who may hold the key to victory in the Nov. 5 election. Campaign aides estimated Clinton may have been seen personally by almost half a million people on this trip. "An extraordinary week of campaigning by the president," said White House spokesman Mike McCurry. Clinton also appeared to have used the trip to blunt Dole's surge in the national opinion polls. After Dole received the Republican nomination, he got a "bounce" that drew him within single digits of Clinton, but recent surveys put the incumbent back to 12 to 21 points ahead. No challenger has ever overcome a lead that great this late in a U.S. presidential campaign. Clinton aides expect the race to tighten but say an eight-to-10-percent margin of victory -- a landslide that could give him long coattails for Democratic congressional candidates -- is not out of the question. 7381 !GCAT !GDIP The White House on Monday accused Iraqi forces of moving deeper into Kurdish-held territory in northern Iraq and said President Bill Clinton had engaged in extensive consultations on a "course of action" in response. While Iraq claimed it had withdrawn its troops from the Kurdish stronghold of Arbil, which it overran at the weekend, White House spokesman Mike McCurry said there was "evidence that some of the forces were penetrating deeper and threatening the Kurdish opposition town of Sulaymaniyah." McCurry said Clinton, who spent the day campaigning at Labour Day picnics in Wisconsin, had consulted extensively on an appropriate response. "The president has a course of action and has been consulting some governments and informing some governments of that course of action," McCurry told reporters. Although there were television reports that Clinton had decided on military action, McCurry refused to confirm this, saying "political, diplomatic, economic measures (or) any combination of those things could be included in an appropriate response." 7382 !GCAT !GCRIM Four children were shot and killed in a trailer on the Navajo Indian Reservation in northeast Arizona and the father of the victims was arrested Monday, police said. A fifth child was critically wounded in the shootings, which took place Sunday in the Indian community of Dennehotso, Navajo Police Chief Leonard Butler said. The suspect, Norman Yazzie, 33, was scheduled to appear Tuesday for arraignment on four counts of murder, one count of attempted murder and one count of assault on a federal officer before a federal magistrate in Flagstaff, Arizona. The victims -- who were shot with a .22-calibre rifle -- were identified as Veneshia Yazzie, 11; Jazana Yazzie, 13; Cara Yazzie, 8, and Nathalie Yazzie, 5. The fifth child, Rhyan Yazzie, 11, was in critical condition at Flagstaff Medical Centre Monday afternoon. Police said the suspect tried to set the trailer on fire after the shootings. A motive was not immediately clear, authorities said. Butler said the children were found by their grandparents, who lived nearby and saw smoke billowing outside the trailer. Butler said gasoline was spread around the residence and a car outside the trailer was set on fire. He said the grandparents grabbed Yazzie and called police, but he escaped before authorities arrived. Yazzie was arrested by an FBI agent Monday morning after he was spotted in a nearby residence, hiding between two mattresses, said Jack Callahan, an FBI spokesman in Phoenix. He apparently tried to stab an agent while being apprehended. 7383 !GCAT !GPOL President Bill Clinton dropped in on the Green Bay Packers on Monday and compared notes on the plight of being a front runner. Chatting and joking with the NFL team and coaches gathered in the end zone of Lambeau Field, Clinton told them: "You're in the same position as I am. I am ahead in the polls but there are 65 days to go. You're on the cover of Sports Illustrated but there is a season to play." "I think you have a great season ahead of you, a great team," said Clinton, who in the past professed to be a follower of the rival Dallas Cowboys. "I think there are a lot of people in the country pulling for you and I hope you have a wonderful season," Clinton told the Packers, picked by many experts as the favourite in the National Football Conference. They beat Tampa Bay 34-3 on Sunday in their season opener and were at Lambeau Field to review game tapes. Clinton posed for pictures with the team for nearly a half hour after a rally in a Green Bay suburb that drew an estimated 25,000 people. Clinton congratulated quarterback Brett Favre who has fought an addiction to pain killers, telling him: "you show up and do your best." 7384 !C42 !CCAT !E41 !ECAT !GCAT !GJOB United Auto Workers leaders said Monday they will likely choose a strike target in the next few days among the Big Three automakers, giving the union less than two weeks to craft a pattern-setting labour agreement. Speaking to reporters at Detroit's annual Labour Day parade, UAW Vice President Ernest Lofton said the UAW is currently focusing on General Motors Corp. and Ford Motor Co. for its later-than-normal choice. Chrysler Corp. will not likely be the lead company because it has been chosen as the Canadian Auto Workers' strike target, he said. Labour contracts covering about 400,000 UAW and 53,000 CAW hourly workers at Detroit's Big Three automakers expire Sept. 14. The Canadian union has extended its deadline until Sept. 17. "I imagine we've got to do it this week," Lofton said of the U.S. target selection. Some UAW officials said an announcement could come as early as Tuesday. Historically, the UAW's target choice has come before Labour Day. The union normally focuses negotiations on a single company and the resulting agreement serves as a pattern for the other two to follow. The target company is threatened with a national strike, but none has occurred since 1976. UAW President Stephen Yokich this year delayed the choice of a target to allow one of the companies to show itself more willing to meet union demands on job security and outsourcing issues. Yokich, who ultimately will decide the target, said little at the Labour Day Parade, where more than 100,000 unionized workers marched through downtown Detroit. "I'm not here to talk about negotiations. I'm here to talk about Labour Day," he told reporters. Lofton, who heads the union's negotiations with Ford, said he believes Ford has a very good chance of being chosen because of its willingness to cooperate with the union on job security. He also sees little chance of a strike at the No. 2 carmaker. "When we need to get a principle established, we've gone to Ford," Lofton said. Ford has shown some willingness to encourage its suppliers to allow the UAW to organise some of their plants, including Johnson Controls Inc. UAW officials also have said Ford has offered the union some opportunities to shift work back into Ford plants from outside suppliers and is interested in a contract longer than the normal three-year period. Lofton said it matters little that Ford negotiated the pattern agreement for the current contract in 1993. "We never have taken turns," he said. "We go where we think we can get the best contract with the least amount of difficulties." UAW Vice President Richard Shoemaker, who heads negotiations with GM, said talks with the world's largest automaker have not progressed much since Aug. 22, when the union announced that it would delay its target choice. "There hasn't been a lot of difference in the status" at General Motors, Shoemaker said. In an unusual twist to the UAW-dominated parade, a group of 18 Japanese trade unionists marched to show support for U.S. rubber workers in a dispute with Bridgestone-Firestone Inc., a unit of Japan's Bridgestone Corp. The tire company hired more than 2,000 replacement workers during an 11-month strike that ended in May 1995 and has failed to call back several hundred former strikers. "We're very upset about the way they've been treated," said Yoshiaki Jingu, a member of Japan's National Railway Workers Union. He added that the delegation also was "hoping to strengthen the labour movement back home" by coming to Detroit. Also marching in the parade was AFL-CIO President John Sweeney, who was arrested Friday during a peaceful protest against the lack of negotiations in the nearly 14-month-old strike against the The Detroit News and Free Press. "I'm always happy to go to jail on behalf of striking workers. We're fighting against some of the greediest employers," said Sweeney, who received a $50 ticket for disorderly conduct when he blocked the entrance to the News building. Striking newspaper workers led the parade for the second consecutive year. Sweeney said he was pleased with the support shown by union members for the Clinton-Gore presidential ticket, but said that labour needs to rebuild its grass-roots orgaization to regain its political clout. "We have to move from a Washington-based organisation to a strong, active movement in every congressional district," he said. 7385 !C42 !CCAT !E41 !ECAT !GCAT !GJOB AMR Corp.'s American Airlines and pilots union leaders struck a tentative labour contract deal on Monday after two years of tortuous negotiations, ending the threat of a crippling strike. Jim Sovich, president of the Allied Pilots Association, said the Labour Day breakthrough came when his team decided to back the airline's "final, final, final" offer. He said he would take the deal to the union's board of directors for approval. "In my opinion, it is a very fair contract that provides the pilot with job security, pension security and compensation he and she needs in exchange for the productivity enhancements the company needs to compete," Sovich said in a recorded message to the 9,400 union members. He did not give details, but said the proposed package -- which would run until the year 2000 -- includes "pay raises and stock options during the length of the contract that ensure the compensation package is industry-leading." American Airlines President Don Carty, who joined the negotiations in mid-August in a bid to force through an agreement, said the deal would allow the company to focus on its business. "We are pleased to have reached an agreement," Carty said in a statement. "With this matter behind us, we can now focus our full attention on providing the outstanding service our customers expect." The Fort Worth-based airline, which is making hefty profits again after some lean years for the industry, is currently trying to win government approval for its global alliance with British Airways. Union leaders had demanded a minimum 5 percent per year wage hike backdated to August 1994, while the airline wanted a 2 percent pay cut and a four-year wage freeze. But both sides recently eased their demands and swapped a series of proposals in round-the-clock negotiations over the last week. Sovich said the proposed contract includes changes to boost productivity but that the airline's controversial short-haul proposal, under which it would assign 20 percent of its pilots to a small-airplane unit and pay them up to 30 percent less, did not get through. "The short-haul proposal is off the table," Sovich said. The labour contract negotiations began in mid-1994 but showed little advance until the National Mediation Board was brought in to broker a deal earlier this year. Sovich said it was "ironic" that the deal was finally struck on Labour Day. The package still requires ratification by the APA's board of directors and membership. APA leaders had threatened strike action within weeks if a package was not agreed on and Sovich told his members the threat of industrial action had been key. "Your support, your overwhelming strike vote and your strength have provided the impetus needed to force this agreement." American's 21,000 flight attendants held a five-day strike in 1993 that cost the airline an estimated $190 million. They then went on to win strong pay increases under binding arbitration. But the airline won some leverage in its negotiations with pilots this year when Delta Air Lines pilots accepted a 2 percent pay cut and a short-haul proposal cutting wages by 30 percent on small planes in return for stock options, a profit-sharing plan and improved retirement benefits. 7386 !GCAT !GPOL !GVOTE By Alan Elsner, U.S. Political Correspondent President Bill Clinton and Republican Bob Dole clashed over taxes on Monday at Labour Day rallies marking the traditional kickoff of the presidential election campaign. With two months to go before the Nov. 5 election, the two candidates and their running mates fanned out across the nation to begin the sprint to the finishing line. Clinton had three stops in Arkansas and Wisconsin, Dole was in Missouri and Utah, Vice President Al Gore campaigned in Minnesota and Republican vice presidential candidate Jack Kemp planned a rally in Michigan. With Clinton leading by around 15 percentage points, Dole faced an uphill fight. No candidate has ever closed such a wide gap after Labour Day. But in a New York Times interview, the Republican nominee disputed the polling data and said his own internal surveys put him only 10 points behind. "Plus I've got a base in rural areas. Obviously we're going to have strong support from veterans, people in uniform. People with disabilities ... We're going to compete for every vote," he said. Dole was putting his faith in his proposal to cut income taxes by 15 percent to turn the election around. Clinton argues that would blow a hole in the federal budget and cause interest rates to rise. Standing beneath the gleaming 630-foot (190-meter) Gateway Arch in downtown St. Louis, Dole told an enthusiastic crowd of more than 10,000 that he would cut taxes while Clinton would raise them. "Jack Kemp and I believe (it's) the time to give a break to every American who works and every American who pays taxes. That's what this campaign is all about," Dole said. "My opponent says he wants to be a bridge to the future, but as Jack has said, he's a toll bridge. You pay every inch of the way, every step of the way, you pay and pay and pay." Clinton addressed some 25,000 in De Pere, Wisconsin, and focused immediately on the Dole tax cut proposal. "Folks, we tried this once before," he said, referring to tax cuts in the 1980s under Republican President Ronald Reagan. "Would you go to the bank yourself to borrow money to give yourself a tax cut? Then why would you hire somebody to do it for you?" After a stop in Milwaukee, he was to return to Washington to concentrate on how to respond to Iraq's military actions against the Kurdish minority in northern Iraq. Dole has already criticised Clinton's response to the latest challenge by Iraqi leader Saddam Hussein as too weak. The president has been contacting other world leaders and has placed U.S. forces in the region on high alert. Reform Party candidate Ross Perot made an inaugural campaign appearance on Sunday in a television infomercial. "Our country has huge problems that must be solved now. We need action, not words. Time is our enemy," he said. "If we do not solve these problems soon, we will have a financial meltdown and millions of great people in this country will suffer for decades." A state-by-state analysis of the election put Clinton in a strong position. Surveys show him with double-digit leads in California and New York and in other Northeast states that would give him 161 of the 270 Electoral College votes needed. Clinton was ahead by a lesser margin in 16 other states with 178 electoral votes, including the Midwest. Dole led comfortably in only eight states with 42 electoral votes and more narrowly in another eight with 93 votes. The rest, with 74 votes, were a tossup. 7387 !E21 !E211 !ECAT !GCAT !GPOL !GVOTE Republican candidate Bob Dole began the final two months of his drive for the White House on Monday, saying President Bill Clinton was a bridge to "a future of higher taxes (and) more teenage drug use." Trailing by about 15 percentage points in two new polls, Dole brought his message of cutting taxes, boosting growth and fighting drugs to St. Louis, his first stop on a four-day tour of seven states. He was seeking to do what no presidential candidate has done before: overcome a big Labour Day lead by a sitting president. Standing beneath the gleaming 630-foot (190-meter) Gateway Arch in downtown St. Louis, Dole told an enthusiastic crowd of more than 10,000 that he and his vice presidential running mate would cut taxes while Clinton would raise them. "Jack Kemp and I believe (it's) the time to give a break to every American who works and every American who pays taxes. That's what this campaign is all about," he said. "My opponent says he wants to be a bridge to the future, but as Jack has said, he's a toll bridge. You pay every inch of the way, every step of the way, you pay and pay and pay." The Republican candidate was playing on Clinton's references at last week's Democratic National Convention in Chicago to his serving as a bridge to the 21st Century. Appearing with Kemp and their wives, he also attacked Clinton on drugs, capitalising on a recent study showing teenage drug use had risen since he came into office. "He would be a bridge to a future of higher taxes, more teenage drug use, a government-run health care system," Dole said, promising to deliver on his plan for an across-the-board 15 percent cut in tax rates and balance the budget. "We are going to be a bridge to lower taxes, to fewer teenagers using drugs," he said. A Clinton-Gore campaign spokeswoman said Dole should spell out how he will pay for his proposed $548 billion tax cut. "If Senator Dole wants the American people to trust him, he should tell what he will cut," she said. After the rally, Dole shook hands with the crowd and climbed a stage to sing along with musicians playing his campaign theme song "I'm a Dole man." He later attended a baseball game between the St. Louis Cardinals and the Houston Astros, entering the stadium to cheers mixed with a few loud boos. He was to fly to Salt Lake City later in the day to attend an evening fundraiser and speak to the American Legion on Tuesday. Dole-Kemp campaign spokesman Nelson Warfield said Dole had chosen Missouri to begin his campaign trip because it was a swing state in the critical Midwestern region. "The Gateway Arch is the gateway to the Midwest," Warfield told reporters travelling on Dole's plane. "It's an important battleground for the entire region." Missouri has been carried by the winner in the last nine elections since it went for Adlai Stevenson in 1956. Clinton took the state easily in 1992, defeating George Bush by 44 to 34 percent, with independent Ross Perot getting 22 percent. Warfield said Dole was beginning the last two months of the campaign to the Nov. 5 election with confidence, untroubled by Clinton's lead in the polls. In an interview with The New York Times published on Monday, Dole said his campaign put Clinton's real advantage at about 10 percentage points. The latest ABC News poll gave Clinton a 54-37 advantage, while the most recent CNN/USA Today/Gallup poll gave the president a lead of 51 to 38. Perot got 6 and 7 percent respectively in the two polls. 7388 !C31 !CCAT !GCAT !GENT "The Crow: City of Angels", a sequel to the ill-starred 1994 movie, "The Crow", flew to the top of the box office during the four-day Labour Day holiday, according to studio estimates released Monday. The supernatural thriller opened with an estimated $10.1 million during the Friday to Monday period, comfortably ahead of Kevin Costner's "Tin Cup" with $9.1 million and another new release, "First Kid" with 8.2 million. In its third weekend, "Tin Cup" has earned a total of $34 million. "The Crow: City of Angels" stars Vincent Perez as a man who returns from the dead to avenge his own horrific murder. Brandon Lee, son of the late martial arts hero Bruce Lee, starred in the original but was accidentally killed during filming. Last week's No. 1, "The Island of Dr. Moreau", slipped to fifth with $6.5 million. Its 11-day gross is $18.7 million. Two other new releases did not even make the top 10. "The Trigger Effect", starring Academy Award-nominated actress Elisabeth Shue, opened in 12th with $1.9 million. "The Stupids" was 13th with $1.5 million, marking the second consecutive flop for Tom Arnold following "Carpool". Following are the top 10 movies at the U.S. box office during the Labour Day holiday from Friday to Monday, according to studio estimates released by Exhibitor Relations Co. Final data will be released on Tuesday. (Last weekend's position in parenthesis, * = new release). 1 (*) The Crow: City of Angels ........ $10.1 million 2 (2) Tin Cup .......................... . $9.1 million 3 (*) First Kid ......................... $8.2 million 4 (4) A Time To Kill .................... $6.8 million 5 (1) The Island Of Dr. Moreau .......... $6.5 million 6 (6) Independence Day .................. $5.7 million 7 (5) Jack .............................. $5.4 million 8 (3) A Very Brady Sequel ............... $4.9 million 9 (8) Emma ........... . ................ . $3.1 million 10 (7) The Fan .......................... . $2.6 million NOTE: "The Crow: City of Angels" and "Emma" are released by Miramax Films, a unit of Walt Disney Co.. "Tin Cup" and "A Time To Kill" are released by Time Warner Inc.'s Warner Bros. "First Kid" and "Jack" are released by Disney. "The Island Of Dr. Moreau" is released by New Line Cinema, a unit of Turner Broadcasting System Inc.. "Independence Day" is released by News Corp.'s 20th Century Fox. "A Very Brady Sequel" is released by Viacom Inc.'s Paramount Pictures. "The Fan" is released by Sony Corp.. 7389 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Union leaders for American Airlines' pilots have endorsed a contract proposal, a spokesman said Monday, ending two years of negotiations and the threat of a strike. Jim Sovich, president of the Allied Pilots Association, said in a message to members that his team decided to back the airline's "final, final, final" offer and would take it to the union's board for acceptance. "In my opinion, it is a very fair contract that provides the pilot with job security, pension security and compensation he and she needs in exchange for the productivity enhancements the company needs to compete," Sovich said in a recorded message. He did not give details, but said the proposed package includes "pay raises and stock options during the length of the contract that ensure the compensation package is industry-leading." Airline President Don Carty, who joined the negotiations in mid-August in a bid to force through an agreement, said the deal would allow the company to focus on its business. "We are pleased to have reached an agreement," Carty said in a statement. "With this matter behind us, we can now focus our full attention on providing the outstanding service our customers expect." 7390 !GCAT !GCRIM A 32-year-old Manhattan woman has been charged with murdering her four-year-old daughter by allegedly starving the girl to death, a spokeswoman for New York's prosecutor said on Monday. The woman, Carla Lockwood, has also been charged with endangering the welfare of a child. The child, Nadine, was found dead in her crib by police Saturday night after they responded to a 911 call that said she was having difficulty breathing. Police said six other children, three boys and three girls aged one to 13, were also found in the rat-and-roach-infested apartment. The six appeared healthy. The dead girl appeared malnourished with sunken cheeks, protruding ribs and patches of hair missing. She also had extremely thin arms and legs, the complaint said. "She has admitted to not feeding the child," Barbara Thompson, a spokeswoman for Manhattan District Attorney Robert Morgenthau, said Monday. 7391 !GCAT !GCRIM A seminary student was arrested at the Tampa International Airport after officials searched his duffel bag and knapsack and found a virtual arsenal inside, Tampa police said on Monday. Roman Regman, a student at St. Tikhon's Seminary in northeastern Pennsylvania, tried to board a USAir flight on Saturday with two carry-on bags that were so full the airport X-ray machine could not detect their contents. Airport officials searched the bags by hand and found a 9 mm pistol, two hand grenades, six military-style knives, 181 rounds of ammunition and a ski mask and homemade handcuffs, police said. Tampa police charged Regman with 14 state weapons and explosives charges. Regman, who was being held at the Hillsborough County jail, also faces a federal investigation by the FBI, authorities said. An FBI spokesman could not be immediately reached for comment. A third-year student at the Orthodox Church in America seminary, Regman studied the Bible but also subscribed to military magazines and dressed like a soldier, neighbours said. The Romanian native was studying to become a monk. Police said Regman had bought a round-trip plane ticket to Pennsylvania and had a reservation for an immediate return to the Tampa area. Classes at the seminary were scheduled to resume on Tuesday. A neighbour in the Tampa suburb of Hernando said she often saw Regman wearing shorts, a pressed shirt, a military-style hat and black leather gloves. "I couldn't imagine why anyone would be wearing black leather gloves all the time. Especially in Florida," she told the Tampa Tribune. A spokesman for the Tampa airport police said they had no idea what Regman intended to do with the weapons inside his carry-on bags. He had no checked luggage. 7392 !GCAT !GDIP !GPOL !GVIO The White House on Monday dismissed as insignificant Iraq's reported withdrawal of troops from the Kurdish stronghold of Arbil because Iraqi forces still remained outside the city. White House spokesman Mike McCurry told reporters aboard Air Force One travelling with President Bill Clinton to Wisconsin that reports of Iraqi forces leaving Arbil "is not terribly significant." Clinton, he said, has "a defined course of action" to take against Iraqi President Saddam Hussein, but he declined to elaborate. McCurry said that National Security Adviser Tony Lake briefed Clinton on Iraq in Little Rock, Arkansas, on Sunday night. "Tony wanted to show him some things that he would need to look at that you can't really see on the telephone," McCurry said. He estimated that there were three divisions of Iraqi troops north of the 36th parallel which the United States, Britain and France have marked as a safe haven for Kurds in northern Iraq. "There is some evidence of an Iraqi redeployment," McCurry said. "But we see no indication that they are preparing withdrawal back to their original forward positions." McCurry said "it really is not terribly significant beacause they still have a significant force arrayed around Arbil." Clinton has contacted other leaders to discuss what to do in response to Iraq's military action. He has put U.S. forces in the region on high alert in response to the Iraqi moves and two U.S. envoys, Joint Chiefs of Staff Chairman Gen John Shalikashvili and assistant secretary of state John Pelletreau, went to Saudi Arabia for discussions. 7393 !GCAT !GDIS !GWEA The Bahamas and the Florida coastline escaped the fury of Hurricane Edouard but may not be so lucky with Hurricane Fran, which gathered strength as it moved across the Atlantic, forecasters said on Monday. At 11 a.m. EDT (1500 GMT) Fran was 655 miles (1,054 km) east of Nassau at latitude 23.8 north, 67.1 west. The storm with 80 mph (130 kmh) winds was moving west-northwest at 12 mph (19 km), which could put it near the chain of tiny Bahamian islands by late on Tuesday, the National Hurricane Center said. "Some strengthening is likely during the next 24 hours," said forecaster David Chorney. "Florida looks like it's in a little bit more of a threat area this time around. But anybody along the Florida, Georgia and Carolina coasts needs to keep an eye on this storm." Hurricane-force winds extended outward about 30 miles (45 km) from Fran's center. Forecasters said that if Fran remained on its current westerly course, it could strike somewhere along the southeastern U.S. coastline by Thursday. In Central Florida, the U.S. space agency said it would decide on Tuesday whether to move the shuttle Atlantis off its seaside launch pad. Atlantis is being prepared for a Sept. 14 launch to rendezvous with the Russian space station and pick up American astronaut Shannon Lucid. 7394 !GCAT !GCRIM !GVIO Six suspect Corsican guerrillas were brought before an anti-terrorism judge in Paris on Monday and judicial sources said they would be placed under investigation and remanded in custody. The six, all believed to be members of the clandestine Corsican National Liberation Front - Historical Wing, appeared before judge Laurence Le Vert. Judicial sources said they would likely be formally placed under investigation on suspicion of conspiracy, terrorist links, and illegal possession of arms, ammunition and explosives. Investigators in Ajaccio, capital of the French Mediterranean island, said the suspects had been questioned little about their politics but chiefly about their activities since August 14, when nationalists called off a truce. Bombs set off since the truce ended have among other targets hit a villa owned by regional authorities, the home of the deputy and former industry minister Jose Rossi, and two cars used by the Ajaccio public prosecutor. Investigators said they were able to round up the suspects after police spotted and then followed a masked man wearing a bullet-proof vest in front of an Ajaccio public building where police had defused a bomb. Among them was Toussaint Andarelli, 36, a former kick-boxing world champion, officials said, adding that arms and ammunition were found in his training room. Seven suspects were held in a series of police raids last week and six of them were brought to Paris. Prime Minister Alain Juppe last month promised to crack down on guerrilla violence. Early on Monday a blast destroyed a garage in Ajaccio, the 30th bomb attack since mid-August, police said. The explosion started a fire which was fuelled by paint stored in the garage. The fresh wave of violence, chiefly hitting public buildings, has been blamed by police on separatists. Unions called on staff at the island's tax offices to stop work on Monday to protest at insecurity -- tax offices are regularly targeted by the guerrillas. 7395 !GCAT !GDIP French President Jacques Chirac and Syrian Foreign Minister Farouq al-Shara on Monday expressed concern at threats to the Middle East peace process. "There is a concern common to France and Syria about the impasse currently faced by the peace process," al-Shara told reporters after meeting Chirac at the Elysee presidential palace in Paris. According to Chirac's spokeswoman Catherine Colonna, the French head of state "did not hide the fact that we are concerned, worried by the current situation". "There are threats weighing on the peace process". France believes the slowdown in peace efforts is largely attributable to the policies of Israel's new right-wing cabinet but has soft-pedalled criticism, presumably to keep channels of communication open to both sides. Israeli Prime Minister Benjamin Netanyahu is due to visit Paris for talks with Chirac at the end of this month, part of France's drive to play a peacemaking role in the Middle East. It will be the first since the hardline Israeli leader was elected in May, and follows a series of visits to Paris by other Middle East players, including Netanyahu's own foreign minister, David Levy, on September 10. Al-Shara accused Israel of "not showing any desire to settle peace and (of) talking of negotiations instead of basics...and the objectives of these negotiations." "Global peace means the Lebanese and Syrian aspects must come together...Syria cannot sign a separate accord with Israel without Lebanon, just as Lebanon cannot sign a separate accord with Israel without Syria," he added. Egyptian Foreign Minister Amr Moussa will be in Paris on Wednesday and U.S. Secretary of State Warren Christopher is due on Thursday. Chirac is expected to tour Israel, Lebanon, the Palestinian territories and Syria next month. Al-Shara confirmed Chirac would visit Israel in the second half of October. 7396 !GCAT !GCRIM French police have seized 20 tonnes of cannabis in what authorities said was Europe's biggest-ever such haul and arrested four suspected traffickers, judicial sources said on Monday. Investigators said the drugs were found on Friday in a depot near the city of Rouen hidden in a container among a stack of jeans. A Frenchman, a Belgian and two Colombians were detained. The cannabis was reportedly shipped to France by Colombia's Cali cartel. Police acting on a tip-off from Colombian police had placed the depot under surveillance. Investigators said the owner of the depot knew nothing about the drugs in the container, which had been deposited there after it was unloaded from a ship in the port of Le Havre. 7397 !GCAT !GCRIM Belgian children returned to school on Monday after the summer break in a grim mood over the deaths from starvation of two eight-year-old girls while in the hands of a paedophile sex gang. As the schools reopened police began fresh searches for bodies and clues at four of the six houses in and around the southern city of Charleroi owned by convicted child rapist Marc Dutroux, key suspect in an affair that has shaken Europe. "I find what they did disgusting. We should do the same to them," one young girl at a small school in the village of Herbeumont told RTBF television. "They should be killed." Claudy Labiouse, the school's head teacher, handed out sheets of paper to the children for them to write down their feelings or questions about the scandal. At some schools in the Flemish part of the country pupils turned up wearing white T-shirts as a gesture of solidarity with two other girls -- An Marchal and Eefje Lambrecks -- who Dutroux admits kidnapping a year ago. The girls' fate remains a mystery. Dutroux led police on August 17 to the bodies of eight-year-olds Julie Lejeune and Melissa Russo in the garden of a house he owns in Sars-La-Buissiere, south west of Charleroi. Two days earlier police had rescued Laetitia Delhez, 14, and Sabine Dardenne, 12, from a basement dungeon in Dutroux' house in another Charleroi suburb. Both had been sexually abused. On Monday, following new leads, police resumed digging at Dutroux' house in the Charleroi suburb of Jumet formerly occupied by Frenchman Bernard Weinstein and in the next door house he used for eight months where they found new-turned soil. Dutroux admits murdering Weinstein, an accomplice. His body was found next to Julie and Melissa. "During the weekend we established that between September 1995 and April 1996 Bernard Weinstein occupied this neighbouring house", Gendarmerie spokesman Major Jean-Marie Boudin said. "In the garden as well as in the cellar, we have found places where the earth has been turned. One in the cellar and one in the garden. We will investigate further," he added. Investigators using special British radar-imaging equipment to locate underground cavities that may contain bodies, found two "hot spots" in the cellar of the Dutroux' house on Friday. Police demolished a shed in the garden where they spent three days digging last week, and began excavating the whole area to a depth of five metres (yards). Investigators also emptied another Dutroux house in the Charleroi suburb of Marchienne-au-Pont, the home of Michel Lelievre who like Dutroux has been charged with abduction and illegal imprisonment of children. Trench-like cells have been found in the cellar. The discovery of the web of paedophile abduction has horrified the country, prompted the government to tighten the rules on early release of sex offenders and triggered calls for a global war against the child sex trade. The fact that Dutroux was released early from a 13-year sentence for child rape, and that he has fathered three children by his two wives, has bewildered adults and children alike. The hunt for missing girls has crossed frontiers. Belgian police have visited Slovakia and the Czech Republic and have contacted colleagues in Austria and Germany. Dutroux is a suspect in Bratislava in the murder of a Slovak woman and the planned kidnapping of at least one other. Nine people are now under arrest in the Belgian affair including Dutroux's second wife Michelle Martin. The international nature of disappearances was illustrated at the weekend when police searching for two teenage girls who went missing late on Thursday near Liege found them in the German city of Cologne. It was unclear what had happened but police were treating it as attempted kidnapping. 7398 !GCAT !GCRIM Austrian police said on Monday they were holding a total of four men on suspicion of producing child pornography in an international child prostitution ring spanning central Europe. A fourth suspect, a 48-year-old Austrian citizen from Salzburg, was arrested on August 31 and is in detention by court order pending further investigation, a police spokeswoman told Reuters. Three others, aged between 40 and 51 and based in Vienna, were arrested last week and also remain in detention pending investigation. Two are Austrian citizens, one born in Slovakia and the other in the Czech Republic. The third is Polish. In what marked the start of a major operation to hunt down suspected child sex abusers in Austria, vice squad officers last week seized boxes of videos and other pornographic material from the home of one of the four suspects. Police said the search for others involved in the child sex trade ring could spill over into neighbouring Slovakia, the Czech Republic and Germany. Police declined to comment on whether there was any connection between the arrests and a Belgian child pornography scandal in which at least two young girls were murdered. Belgian Marc Dutroux, alleged to be the ringleader in a paedophile pornography circuit, has been named by police in the Slovak capital Bratislava as a suspect in the murder of one Slovak woman and the kidnapping of another. The series of sex scandals has deeply shocked Austrians, already troubled by last week's revelations of another alleged sex case in Linz, 200 km (120 miles) west of Vienna, involving the abuse of refugee children as young as four. The prosecuting attorney in Linz said on Monday that two Austrian men arrested for suspected sex abuse of children from a refugee home had been released pending further investigation. The news of the releases provoked an outcry from social workers, who expressed concern about the young victims' safety. "It doesn't seem to be sensible that the two alleged culprits are free again," said Josef Weidenholzer, head of the social organisation Volkshilfe in Linz. "Someone must not have been thinking what consequences this could have." The men were alleged to have lured children from the refugee shelter by offering them between 500 and 5,000 schillings ($50 to $500) for sex, sources close to the investigation said. "One of the men allegedly focused on little girls and the other only dealt with little boys," Weidenholzer said. Austrian current affairs weekly News last week published a investigative report into extensive child sexual exploitation in the region. It said the ring provided clients in Vienna with a choice of 70 girls, largely from Slovakia, aged between seven and 13. The Volkshilfe, which has been investigating the refugee sex abuse claims for an undisclosed period, said that case also probably involved a larger ring of professional child abusers. "The sums of money involved are too large and our investigations have shown the contact between the children and their abusers was frequent," Weidenholzer said. "There were certainly more people involved in this terrible tragedy." 7399 !C42 !CCAT !E41 !ECAT !GCAT !GJOB !GPOL The head of France's Ouvriere union which spearheaded last year's crippling strikes warned on Monday there was a risk public unhappiness over government austerity plans could explode but added one rider to his prediction. "There's a danger it could explode," Marc Blondel said on French television station LCI. "The ingredients are just the same as in 1995 but I should add one adjustment." He noted that last year's unrest had been triggered by Prime Minister Alain Juppe's announcement in November of radical plans to overhaul France's debt-laden social security system. "It was the catalyst," for the public sector strike that paralysed France for more than three weeks, he said. His union has called for a protest march on September 21 as a test of union members' fighting spirit and as a warning to the government. The demonstration "would be a warning to the government that we must discuss certain things right away," he said. Meanwhile, Louis Viannet, secretary general of the Communist-led CGT, called on President Jacques Chiract to "roll up his sleeves" to prevent massive job losses in the public and private sector. "If we add up the various job cuts that are already planned, we are at more than 200,000 jobs," he told radio station France- Info. -- Paris Newsroom +33 1 4221 5452 7400 !G15 !G155 !GCAT !GPOL !GVOTE Austria's far-right leader Joerg Haider, often criticised by rivals for making racist comments, sprung a political surprise on Monday by including a Jewish writer on his party's list for European elections in October. Haider, head of the nationalist Freedom Party (FPOe), presented his candidates for the October 13 vote which will elect Austrian members to the European parliament. The inclusion of Jewish author and journalist Peter Sikrovski on the number two slate of the FPOe list was not only a surprise because of his religion and his family's past but also because he has criticised Haider's policies in the past. "One of my most bitter opponents has become my dear friend," Haider told reporters. Sikrovski, whose parents fled to Britain from Austria before the outbreak of World War Two, said he had joined the far-right ticket because "democracy needs a strong opposition". He said he did not want to be told which party's banner he should stand under. Franz Linser, an Innsbruck University sports lecturer, tops the party list. Haider has played on growing disillusionment over EU membership, tapping the frustration felt among many Austrians that their country is a net contributor to EU coffers at a time when they are being told to tighten their belts to reduce a huge budget deficit. Haider has argued that Austria should remain in the 15-member bloc, but insists its membership treaty should be re-negotiated to reduce the financial burden placed on the Alpine republic. "We aim to raise Austria's profile in Europe and act as an early-warning system when Austrian interests are being threatened," Haider said. The far right won nearly a quarter of the votes in last December's general election and is expected to win five of Austria's 21 seats to the European assembly. 7401 !GCAT !GHEA The World Health Organisation said on Monday it had joined a global campaign against one of the world's most debilitating and little-treated brain diseases. Together with the International League Against Epilepsy (ILAE), it will seek to raise professional and public awareness of epilepsy as a treatable brain disorder and lobby governments to devote more resources to treatment, the two bodies told the European Epileptology Congress in The Hague. "Epilepsy is one of the biggest world health economic burdens, affecting some 40 million people across the world at any one time," campaign initiator and ILAE president Dr Edward Reynolds told Reuters in an interview. ILAE is an international non-governmental organisation officially linked to WHO with 52 national affiliates. A 1994 survey by the World Health Organisation of the man-hours lost annually through illness showed epilepsy ranked second only to depression among neurological and psychological diseases prompting workers to report sick, he said. But only two national governments had devoted significant resources to the disease, Reynolds said. "The United Kingdom and China are the only two countries where government health departments have shown a major interest in care for epilepsy," he said. Centuries of stigma, fear and shame meant epilepsy -- the collective term for seizures that affect the electronic circuits in the brain known as neurotransmitters -- had been neglected as a public health problem, he said. These fears were particularly prevalent in developing countries, where sufferers were traditionally thought to have been possessed by spirits. But there was also a lasting stigma in developed societies where epilepsy was often confused with mental illness, he said. "Epilepsy is a very treatable condition which is not being treated because of inadequate sympathy and social support," Reynolds said. "As a result, epilepsy remains a hidden disease even though an estimated one in 20 people suffer an epileptic seizure at some time in their lives." He said this 'treatment gap' was more worrying because of evidence that early treatment had a higher success rate. 7402 !GCAT !GDIP Norway has once again emerged as a discreet force helping to pull the flagging Middle East peace process back on track. Foreign Minister Bjoern Tore Godal confirmed on Monday that his country has been involved in new diplomatic efforts in recent weeks to ease relations between Israel and the Palestine Liberation Organisation. Norway made an impressive debut in Middle East relations when it brokered a historic peace pact between the two sides in 1993. Godal said in an interview with Reuters that Norway had again been working behind the scenes, overseeing fresh talks between key Israeli and Palestinian personalities in a private Tel Aviv apartment during the past two weeks. He said these discussions were expected to lead to a landmark meeting between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Yasser Arafat. "This is a promising development," Godal said. "But we are still awaiting a meeting between Prime Minister Netanyahu and President Arafat. It could take place over the next few days." Godal declined to elaborate on the contents of the new discussions, held under the guidance of United Nations special envoy Terje Larsen, a Norwegian, and his wife Mona Juul, a diplomat at the Norwegian embassy. But negotiators in Jerusalem said the talks were focused on agreeing a joint formula for the fully fledged resumption of peace talks. "We are particularly interested in discussing two projects, the donor committee and the situation in Hebron," Godal said. "But the main issue is to speed up the peace train, and this is essentially the responsibility of both parties." Netanyahu, who succeeded the former labour government of Shimon Peres in May, has yet to meet the Arab leader. He has pledged not to trade occupied Arab land for peace and said he would only meet Arafat out of Israeli security concerns. Last week, however, as Israeli-Palestinian relations sank to their lowest point since Netanyahu took office in June, his position softened, prompted partly by Israeli President Ezer Weizman saying he himself would meet Arafat. Netanyahu's position may also have been influenced by Egypt which has been pressuring him to meet Arafat. Eygpt has given Israel three weeks to start implementing the PLO-Israel peace deals or face cancellation of a Middle East economic conference planned for Cairo in November. The revelation of Norway's role in the latest negotiations coincides with Egyptian Foreign Minister Amr Moussaa's visit to the Norwegian capital this week. Moussa arrives on Wednesday for talks with Godal and Prime Minister Gro Harlem Brundtland. A Foreign Ministry spokesman said the Middle East peace process would be high on the agenda. Norway has more than 20 observers in the West Bank city of Hebron, where 450 Jewish settlers live among more than 100,000 Palestinians. The mandate for the observers, the only international monitors present, expires on September 12. 7403 !C13 !C21 !CCAT !GCAT !GENV The International Air Transport Association (IATA) said on Monday that London's key position as an world airline hub could be threatened by a British government decision to impose more stringent airport noise controls. IATA, which links 232 major international carriers, said its members opposed the move which they regarded as discriminatory. The measures, to be applied from next January to departures from London's three airports -- Heathrow, Gatwick and Stansted -- would have no impact on the overall perceptions of aircraft noise experienced by people living close to the airports, an IATA statement said. It said aircraft engines were quieter than ever before, noise infringements had never been fewer and older and noisier so-called Chapter 2 aircraft would have disappeared altogether by the year 2002 under a long-standing international agreement. Next year, IATA said, more than 90 per cent of flights at Heathrow -- the British capital's main airport and a major international hub -- would be made by the world's quietest airliners, listed as Chapter 3 aircraft. The statement said IATA members concern over the British measures centred around operations with older models of the Boeing 747. "These, in common with other Chapter 2 aircraft, are rapidly being replaced, but at the moment they form a high proportion of the fleets of non-U.K. (United Kingdom) long-haul airlines," it said. "The U.K.'s unilateral decision, without consultation with its air-trading partners, could have serious effects on foreign relations and on the pre-eminent position of London's airports in world transport," IATA added. 7404 !GCAT !GDIP Russia's foreign minister will agree to hand back the Liechtenstein royal family's archives as part of a swap of historic treasures to be signed during a trip to Vaduz this week, officials said on Monday. Moscow in return will get back a valuable document that outlines circumstances surrounding the death of Tsar Nicholas II and his family, killed by Bolsheviks in 1918, the principality's press office said. "This agreement is going to be signed," said a spokeswoman for the tiny Alpine principality wedged between Switzerland and Austria. She said Liechtenstein's ruling Prince Hans-Adam II was set to exchange letters with visiting Russian Foreign Minister Yevgeny Primakov on Tuesday expressing both sides' willingness to swap the documents. Soviet troops who marched into Austria in 1945 seized the royal archive from Liechtenstein Castle and shipped them back to Moscow, where they have remained despite persistent reequests from the royal family. Hans-Adam won added leverage in the dispute when he acquired at auction in London the so-called Sokolov Archive, named for a Russian military officer who documented the firing-squad execution of the last tsar and his family in the Urals city of Yekaterinburg on July 17, 1918. The timing of the document swap remains unclear. 7405 !GCAT !GDIP Israeli Prime Minister Benjamin Netanyahu will visit Paris for talks with French President Jacques Chirac at the end of this month, Chirac's office said on Monday. The meeting, an apparent part of France's drive to play a bigger peace-making role in the Middle East, will be the first since the hardline Israeli leader was elected in May. It will follow a series of visits to Paris by other Middle East players, including Netanyahu's own foreign minister, David Levy, on September 10, officials said. No date was given for Netanyahu's visit, which was disclosed as Chirac met visiting Syrian Foreign Minister Farouq al-Shara. Egyptian Foreign Minister Amr Moussa will be in Paris on Wednesday and U.S. Secretary of State Warren Christopher is due on Thursday for talks also expected to centre on the Middle East. Foreign Minister Herve de Charette spoke by telephone last week to both Levy and Moussa to express French unease at what Paris says are threats to the Middle East peace process. France believes the slowdown in peace efforts is largely attributable to the policies of Israel's new right-wing cabinet but has soft-pedalled criticism, presumably to keep channels of communication open to both sides. Chirac, who wants France to play an increasing diplomatic role in the region, is expected to tour Israel, Lebanon, the Palestinian territories and Syria next month. 7406 !G15 !G158 !GCAT !GDIP !GVIO The European Union on Monday welcomed the successful conclusion of peace talks between the Philippines and the Moro National Liberation Front. "The European Union expresses the hope that the agreement concluded in Jakarta and the establishment of the Southern Philippines Council for Peace and Development will lead to a general reconciliation and usher in a new era of peace and prosperity," current EU president Ireland said in a statement. Moslem rebels and the Philippine government signed a peace pact on Monday ending 24 years of war in the south that killed 125,000 people. The accord, signed at a ceremony in the presidential palace in Manila, took four years to negotiate with the help of Islamic nations led by Indonesia. 7407 !GCAT France said on Monday one of its most important cultural figures in the 20th century, writer Andre Malraux, will be reburied in the Pantheon in November. His remains will be transferred on November 23 in a special honours ceremony in the French capital's Latin Quarter, Cultural Affairs Minister Douste-Blazy said. His final resting place will put him next to such illustrious figures as Voltaire, Rousseau and Victor Hugo. Malraux travelled extensively in the Far East, fought on the Republican side in the Spanish Civil War and narrowly escaped a German firing squad as a World War Two Resistance fighter. He drew on his own adventures for his best-known works "La Condition Humaine" (Man's Estate) about revolutionary tensions in China in the 1920s and "L'Espoir" (Days of Hope) after setting up a squadron of foreign volunteer pilots for the Republicans in Spain's Civil War. As culture minister throughout De Gaulle's presidency from 1959 to 1969, Malraux is remembered for fiery oratory, cleaning up Paris landmarks, including Notre-Dame cathedral, and establishing cultural centres across France. Malraux died on November 23, 1976 and was buried near Paris. The last national heroes to be reburied in the Pantheon were Nobel prize-winning physicist Marie Curie -- the first woman to earn such an honour on her own merits -- and her scientist husband Pierre. The late president Francois Mitterrand presided over that ceremony last year shortly before leaving office. French President Jacques Chirac will deliver the keynote address in the same way Malraux delivered one of his most famous speeches on the same spot in 1964, a passionate eulogy for Resistance hero Jean Moulin when he was reburied in the Pantheon. 7408 !G15 !G158 !GCAT !GDIP The European Union on Monday welcomed Romania and Hungary's agreement on the text of a long-delayed friendship treaty, which it said would reinforce stability in the area. "The European Union considers the conclusion of the treaty will reinforce stability and the principles of good neighbourliness in Central Europe and that it will contribute to the process of European integration," said a statement issued by the Irish presidency of the EU. The treaty, unexpectedly agreed in August, is expected to end years of disputes over the status of the 1.6 million ethnic Hungarians living in Romania's central region of Transylvania. The treaty, vital for both countries ambitions to join the European Union and NATO, is due to be signed later this month. "(The) EU looks forward to the early signature and ratification," the statement said. 7409 !C13 !CCAT !GCAT !GENV A summit in Zimbabwe on solar energy this month, helped by new cooperation from oil producers, could throw an economic lifeline to more than a third of the world's population, UNESCO said on Monday. Delegates from 100 countries will meet in Harare on September 16 and 17 seeking more use of solar energy, wind power and other renewable energy resources under a 1996-2005 World Solar Programme. "Through solar energy we can reach out to the unreached," UNESCO Secretary General Federico Mayor told a news conference, referring to 2.4 billion people, mostly in Africa, Asia and Latin America, who now live without electricity. He said preparations for the so-called "World Solar Summit" were helped by a change of heart by oil producers, long suspicious of alternative energy. Saudi Arabia, for instance, has paid $300,000 towards the $800,000 cost of staging the summit. "Oil producers have realised that perhaps 30 percent of the world's population will be cut off forever from electricity. So they are not in competition," Mayor said. For example, many third world villages are simply too remote to be linked into any national electricity grids burning fossil fuels like oil. A draft declaration from the summit, to be attended by more than a dozen leaders including South African President Nelson Mandela and U.N. Secretary-General Boutros Boutros-Ghali, makes no firm pledges of funding for solar energy. But Mayor said that about 300 solar energy projects, from desalination of the Red Sea for drinking water in Jordan to a plan to provide African villages with solar-powered cookers, would be launched at the summit. The declaration itself commits participants to vague goals such as "to work towards the wider use of solar energy to enhance the economic and social development of all people". According to UNESCO (United Nations Educational, Scientific and Cultural Organisation), about 18 percent of the world's primary energy now comes from renewable sources, most of it firewood. Hydro-electricity follows with only a tiny fraction from solar, wind, geo-thermal or wave power. By the year 2050, UNESCO reckons the share of renewable resources in energy consumption could rise to between 25 and 30 percent. It says wider use of solar energy would help cut pollution from fossil fuels, avoid the potential dangers of nuclear power plants and reduce the threat of desertification caused by the stripping of third world forests for firewood. Reducing foraging for wood also would free people, especially women, for other tasks, giving time for education that is crucial to restraining explosive birth rates in the third world. "Solar technology is feasible, it's already there," said Boris Berkovski, director of UNESCO's science division. "We don't use it because it's expensive. And it's expensive because no one's interested in mass production." 7410 !GCAT !GDIP !GPOL !GVOTE Bosnias's cantonal and presidential elections must go ahead as planned on September 14 as a step to post-war stability even though they are unlikely to be fully democratic, German Foreign Minister Klaus Kinkel said on Monday. Municipal elections planned for the same day have been postponed by the Organisation for Security and Cooperation in Europe (OSCE), charged with supervising the elections, because of irregularities in the registration of Bosnians abroad. Kinkel, addressing a news conference with international peace coordinator Carl Bildt, said that decision had been correct. "But the "big' elections will without doubt go ahead," he said. "This must happen because it is the start of the self-supporting stabilisation process," Kinkel said. "They won't include all the things that we would like from the point of view of democracy, but that has also happened in other parts of the world such as Africa and Latin America," Kinkel said. "At some stage you have to make a democratic beginning." Kinkel added his voice to the growing body of support for a renewal of the international peacekeeping mandate after the end of the year, to help shore up Bosnia's tortuous return to peace. "It very much looks as though we have not yet reached the self-sustaining stabilisation in the region and it will be necessary to continue to provide support with troops from outside," he said. He said he believed Germany would be prepared to participate. 7411 !GCAT !GHEA French healthcare spending in July fell 0.3 percent from the previous month to 37.69 billion francs, national health insurance fund Caisse Nationale d'Assurance Maladie (CNAM) confirmed on Monday. Prime Minister Alain Juppe had announced the fall last week but given no details. Spending was up 2.1 percent from July 1995 and up 0.5 percent in the first seven months of 1996 compared with December 1995, it said in a statement. The government has said it aims to limit the rise in non-hospital spending to 2.1 percent this year to curb public deficits in preparation for European monetary union. CNAM gave the following figures for July . Total vs pvs month vs year-ago (bln Ffr) (pct change) (pct change) Hospital spending 20.73 -0.4 -2.8 of which public 18.03 -0.5 -3.3 Non-hospital spending 19.66 -0.2 1.0 (excludes public hospitals but not private hospitals) Prescriptions 8.34 +0.1 3.3 Total healthcare 37.69 -0.3 2.1 Cumulative health spending excluding public hospitals up to the end of July was 136.38 billion francs. Total cumulative health spending was 260.43 billion. NOTE - Figures are not seasonally adjusted. Table does not include all areas of spending and therefore figures do not add up to total. -- Paris Newsroom +33 1 42 21 53 81 7412 !E31 !E311 !ECAT !GCAT !GENV Industry is using twice as much energy as necessary worldwide, but even if consumption in the sector is halved, increased industrial output from emerging economies will offset any savings made, an energy expert said on Monday. Jeff Masters, formerly programme controller for international development and gas markets at British Gas Research and Technology, told an International Energy Agency conference that industrial consumption in Britain and by extension in most OECD countries could be halved while leaving output unchanged. Industrial energy use accounts for around 40 percent of all energy consumption, he said. Of this, natural gas accounts for 25 percent. The ratio of industrial use to total energy use varies considerably. In the OECD, industry accounts for only 30 percent of the total, with a large share taken up by transport. But in China, Masters said, industrial use is 60 percent of the total. The challenge for industrial countries is to increase industrial output while reducing energy use through new technologies. Masters said that in Britain between 1980 and 1990, industry's share of consumption fell from 34 percent to 27.3 percent through improved technology in three areas, low temperature heating processes, high temperature processes and heating of industrial buildings. As a result, gas use in some industries fell by more than half. Gas consumption as a petrochemical feedstock fell from 1,810 million therms in 1980 to 798 million in 1990. In Britain's case falling industrial demand has been offset by rising gas use in power generation. Gas use for this purpose rose from 245 million therms in 1980 to 2,678 million in 1990. Masters noted that with 40 percent of the world's energy use accounted for by industry, a halving of consumption for this purpose would cut global energy use by 20 percent. "But should emerging economies grow to similar energy per capita levels in industry as in the OECD, then this should be offset by a fivefold rise in the industrial energy consumption even if the limits of efficiency were attained," he added. Natural gas will have the lowest environmental impact of all fossil fuels if these rises continue, and its growth in industrial consumption looks set as emerging economies mature, Masters said. 7413 !C13 !CCAT !GCAT !GDIS A panel of experts has determined that poor maintenance and sloppy repair work on the Estonia were responsible for the ferry sinking in 1994 when 852 people drowned, an investigator said on Monday. Werner Hummel, who led a four-member team of researchers hired by the ship's builder, said their 20-month study had concluded the ship was in good seaworthy condition when it was first delivered by the Meyer Werft shipyard in 1979. The blame for the disaster, he said, lay not with the ship's construction or design but with the ship's operator, because repair work on the ship had been improperly carried out. The operator, Estline of Tallinn, has denied any fault. "We were able to prove that there were substantial deficits such as bad maintenance and very poorly performed repairs," Hummel said in a telephone interview with Reuters. The panel of independent German experts presented excerpts of their findings to two groups of friends and relatives of the ship's victims at a meeting last week in Hamburg. The report fills four thick folders and comprises several hundred pages. The experts plan to release a summary of their findings within the next four weeks. Only 137 people survived when the Estonia sank in the Baltic Sea on September 28, 1994. Other investigations into the disaster have unearthed a series of errors which contributed to the fatalities, including weaknesses in the structure of the ship and basic design flaws that allowed all the water to run to one side of the car deck, causing the list. The huge car and passenger ferry sank off the coast of Finland during a vicious autumn squall. The bow visor of the roll-on, roll-off ferry worked loose and fell off, allowing water to flood in to the ship's cavernous car deck. With thousands of tonnes of water flooding the car deck, stability was impossible and the ship keeled over before sinking rapidly to the bottom of the Baltic Sea. 7414 !C13 !C17 !C31 !C311 !C34 !CCAT !G15 !G153 !G157 !GCAT The European Commission said on Monday it was looking into Scottish complaints that imports of salmon from Norway were being subsidised and dumped, thereby hurting the European Union industry. The Commission said in its Official Journal C 253/18 and c 253/20 that it had decided to open separate anti-dumping and anti-subsidy investigations concerning imports of farmed Atlantic salmon from Norway, which is outside the Union. The Scottish Salmon Growers' Association Ltd and the Shetland Salmon Farmers' Association lodged the complaints. The two groups, which filed their complaints in July, said they represented 70 percent of EU production last year. "The complainants allege and have provided evidence that imports from Norway have increased significantly in absolute terms and in terms of market share," the Commission said. The prices and volumes of the imported salmon had allegedly hit the quantities sold and prices charged by EU producers, "resulting in substantial adverse affects on the performance of the Community industry." Norwegian salmon growers had allegedly benefited from state aid of between 450 and 500 pounds (between $700 and 780) per tonne. The Commission said there was sufficient evidence to justify the opening of proceedings. 7415 !E41 !E411 !ECAT !GCAT !GJOB Germany's government and business leaders said on Monday they were confident of creating 20,000 new places for job trainees this year to help maintain the country's strong position in the global skills league. Education Minister Juergen Ruettgers told a conference in Bonn, of delegates from Germany's 170 chambers of industry and trade and chaired by Chancellor Helmut Kohl, that he was confident the shortfall would be closed in the next few weeks. Hans Peter Stihl, head of the Federation of German Chambers of Commerce (DIHT), said employers would offer apprenticeships to all young people seeking training by the end of the year. Germany has been locked in a debate over whether its high labour costs and the mark's appreciation have made its economy uncompetitive. Unemployment, at nearly four million, is close to post-war highs, and the government has scheduled a series of meetings with employers to try to force the pace of jobs training. One of the pillars of Germany's export-led economic boom after 1945 was offering of on-the-job apprenticeships as an alternative to further education. But employers hit by a slow economy and pressure to slash costs now complain apprentice wages are too high. Bernhard Jagoda, head of the Federal Labour Office, said that while new positions had been created recently, more had to be done to eliminate the shortage in apprentice positions. "If everybody involved makes a big effort, this gap can definitely be closed," Jagoda said. Jagoda said that of 620,000 young people seeking training positions, 117,000 had not found one by the end of August -- around 20,000 higher than the number available. -- Douglas Busvine, Bonn newsroom, 49-228-2609750 7416 !E12 !ECAT !G15 !G154 !GCAT Two experts forecast on Monday that the third stage of the European Union's economic and monetary union (EMU) would be launched in 1999 with six to eight members initially. "In my main scenario eight countries will take part from the very start - Germany, France, the Benelux countries, Austria, Finland and Ireland," Niels Thygesen, professor at Copenhagen University, said in a newsletter published by Denmark's European Political Council. Thygesen said he saw an 80 percent possibility of EMU starting on January 1, 1999. In the same newsletter British former EU-commission employee Bernard Connolly agreed but said he was only completely sure about core states Germany, France, the Benelux countries and Austria participating from the start. Connolly saw however Finland and Ireland still being able to take part at some early juncture. Connolly, author of the controversial "The Rotten Heart of Europe" book strongly opposed to EMU and published last year, foresaw EMU would happen even if some countries failed to meet the Maastricht convergence criteria, but probably not get underway until mid-1999. "Germany will sooner or later let all the countries mentioned take part in EMU even if some of them are far from meeting the necessary criteria," Connolly said. "The project has always been political rather than economic. German politicians will not let convergence criteria stop the EMU coming about," Connolly said. Thygesen and Connolly disagreed in the newsletter on the impact of the European common currency on economic growth and unemployment in Europe. Thygesen saw EMU having a positive impact here while Connolly feared instability and increased joblessness. "EMU will bring with it instability and rising unemployment. The more countries participatiing the higher is the risk," Connolly said. "The European economies are simply not convergent enough to pursue a common monetary policy without suffering," he said. Denmark, which meets the EMU convergence criteria, will not be able to participate without holding a fresh referendum, having opted out in its 1993 vote on the Maastricht treaty. --Per Bech Thomsen +45 33969656 7417 !C13 !C31 !C311 !CCAT !G15 !G153 !GCAT !M14 !M141 !MCAT The European Union raised import duties for high-quality wheat, rye, barley, maize and sorghum, effective on Tuesday, the European Commission said. EFFECTIVE FROM SEPTEMBER 3 IN ECUS PER TONNE NEARBY ORIGIN (1) DISTANT ORIGIN (2) DATE OF CURRENT PREVIOUS CURRENT PVS CHANGE DURUM WHEAT 8.55 4.69 0.00 0.00 01SEP96 COM WHT HIGH QUAL 31.94 21.82 21.94 11.82 03SEP96 MEDIUM QUALITY 35.48 35.23 25.48 25.23 01SEP96 LOW QUALITY 48.04 48.79 38.04 38.79 01SEP96 BARLEY 74.17 68.38 64.17 58.38 03SEP96 RYE 74.17 68.38 64.17 58.38 03SEP96 SORGHUM 88.28 82.49 78.28 72.49 03SEP96 MAIZE 69.48 57.00 59.48 47.00 03SEP96 Exchange Kansas Mid Mid Minneapolis City Chicago Chicago America America Products percent protein and 12 percent humidity HRS2(14%) HRW2(11.5%) SRW2 YC3 HAD2 US barley2 (ECUS per tonne) Quotes 131.62 137.38 130.20 113.65 168.45 102.85 Gulf - 12.71 7.34 16.56 - - Great Lakes 13.46 - - - - - Gulf of Mexico-Rotterdam 9.15 Ecus per tonne Great Lakes-Rotterdam 17.73 Ecus per tonne (1) Nearby origin covers imports by land, river or sea from Mediterranean, Black Sea and Baltic ports. (2) Distant origin covers other ports. The import duty may be adjusted if during the two-week reference period the average import duty differs by five Ecus per tonne from the fixed duty. Importers may claim a two Ecus per tonne reduction for Atlantic and Suez canal shipments to British, Danish, Swedish, Finnish and to Spanish and Portuguese Atlantic ports. A three Ecus per tonne reduction can be claimed for imports into Med ports. Importers who show they have paid a quality premium can claim a 14 or eight Ecus reduction for shipments of high quality common wheat, malting barley and flint maize. 7418 !C13 !CCAT !G15 !G152 !GCAT The European Union will work to finalise its telecommunications liberalisation package and draw up a new action plan for promoting the information society during the final months of the year. In new moves to bolster the EU's plan to open up telecoms markets to competition by January 1, 1998, the Telecoms Council is expected to agree an initiative on licensing phone companies while the European Commission will issue a much-anticipated draft directive on access to voice telephone networks. The Council is also set to finalise legislation on "interconnections" between competing telecoms operators, data privacy and Open Network Provision (ONP) principles guaranteeing fair access to telecoms networks. It will also try to resolve a sensitive dispute over how quickly to liberalise postal services. Following are details of initiatives that are expected in the coming months, EU officials and diplomats said: LICENSING. The September 27 Telecommunications Council is scheduled to try again to reach a common position on a draft directive setting up a telecoms licensing and authorisation regime for the post-liberalisation era. Ministers were unable in June to resolve a conflict over the limits that governments may place on licenses once state monopolies are abolished. But diplomats said COREPER, the EU Committee of Permanent Representatives, was moving towards a compromise before the summer break. The Commission's proposal, COM(95)545, would oblige governments to set up "general authorisation" schemes, requiring individual licenses only in specific circumstances -- for example, to allocate radio frequencies or numbers. But the compromise text would allow them to require individual licenses for companies offering voice telephone services or public infrastructure. That provision would be reviewed, however, on a specified date, a diplomat said. SATELLITE COMMUNICATIONS. EU member states are finally moving towards agreeing legislation on licensing satellite personal communications systems now that the text has been watered down to dilute the European Commission's role. Officials are optimistic that the Telecommunications Council will be able to adopt a common position on the draft decision, COM(95)529, at its September 27 meeting. The Council has up to now rejected the Commission's efforts to set up a single EU system for licensing the new satellite networks that will be able to offer telephone and data-transmission services via satellite. Most member states objected specifically to provisions that would authorise the Commission to draw up criteria for licensing operators for the European market and play a major role in selecting the operators. But a Council working group has made some progress on a compromise text that was drafted by the Italian presidency and taken up by the Irish presidency, officials said. That text calls on member states to coordinate licensing activities within the European Conference for Postal and Telecommunications Administrations (CEPT), with the EU taking decisions only if CEPT does not act within certain deadlines. Member states are set to discuss the text again in a working group that meets September 10. ONP. The Commission is scheduled to issue on September 11 a draft directive to update legislation that applies ONP principles to voice telephone services. The existing directive, 95/62/EC, sets out rules to ensure that users and competing service providers have fair access to public voice telecoms networks. The Commission wants to amend it to take account of the EU's plans to open voice telephone markets to competition by January 1, 1998. Rather than apply rules to operators with "special or exclusive rights", the new text would apply provisions to all telecoms operators or to those with "significant market share". The November 28 Telecoms Council is tentatively set to adopt legislation, COM(95)543, to update two other ONP directives -- the framework directive, 90/387/EEC, which sets out general principles covering access to telecoms networks, and 92/44/EEC, which applies specifically to lines leased from phone companies. The Telecoms Council reached a political agreement on the text in June. EU ministers are expected to adopt a formal common position as an "A" (non-discussion) point within the next few weeks and to send it to the European Parliament for a second reading. INTERCONNECTIONS. The parliament is scheduled to give a second reading in September to the draft directive on telecoms interconnections, COM(95)379, clearing the way for final adoption under the Irish presidency. The measure aims to ensure that customers of different phone companies can communicate with each other once the EU opens its telecoms markets to competition. UNIVERSAL SERVICE. The Commission is expecting to issue a communication on how to calculate how much it costs to provide universal service -- affordable basic telephone service to all citizens -- by the end of the year, possibly in November. That information is needed as governments determine how to cushion the financial burden on companies that will be required to offer unprofitable universal service. DATA PRIVACY. The November 28 Telecoms Council is tentatively set to adopt the draft directive on privacy on telecommunications networks, COM(94)128. The legislation lays down rules for protecting personal data in areas ranging from billing to caller-identification schemes. The Council reached a political agreement on the text in June. EU ministers are expected to adopt a formal common position within the next few weeks and to send it to the parliament for a second reading. NUMBERING. The Commission is expected to issue a Green Paper in September on what kind of policy the EU should adopt towards telephone numbers in the post-liberalisation era. The paper will look at issues such as number "portability", or the ability of subscribers to keep the same phone number if they change phone companies. POSTAL SERVICES. The Telecoms Council will continue debating the draft directive on postal services, COM(95)227, especially provisions on how quickly to open up direct mail and cross-border mail services to competition. An orientation debate is scheduled for the September 27 Council. INFORMATION SOCIETY. The October 8 Industry Council is scheduled to give the Commission guidance as it prepares an updated action plan for promoting the information society. The Council is expected to hold an orientation debate and to adopt a resolution identifying the issues the Commission should explore. It will act on the basis of four initiatives on the information society that the Commission adopted in July -- communications on implications for EU policies and on standardisation, a green paper on social aspects and a draft directive on a "transparency mechanism" for monitoring national regulations. The Commission is also set to adopt two new papers on the information society in the coming months -- a communication on the space sector that will highlight the growing importance of satellite communications and a green paper on exploitation of the information society by the public sector. 7419 !C23 !C31 !CCAT !GCAT !GENV Increased use of natural gas as a transport fuel depends on a much greater range of government incentives to boost its demand, a conference was told on Monday. Ferdinando Russo of Italy's Snam told an International Energy Agency conference on natural gas that the development of gas for transport depended on its environmental advantages, and so technological developments already under way needed government support to prosper. The market potential is gigantic, said Russo, pointing out that of 500 million vehicles in use worldwide, only just over a million are fuelled by gas. Argentina leads the way, with 345,000 vehicles using 480 refuelling stations accounting for 4.6 percent market penetration. Italy has 290,000 gas-powered vehicles, but few other countries are seriously pursuing natural gas. In New Zealand, 45,000 vehicles use it, in the U.S. 40,000 and in Canada, 38,000. There are also indications that Russia has about 100,000 gas powered vehicles, down from a peak of around 250,000 in the whole Soviet Union immediately before its break up, said Russo, although accurate data is hard to obtain. Further development is threatened by high equipment costs, heavy onboard gas storage units, reduced range in comparison with a gasoline engine, reduced power and limited refuelling options. Set against this, gas is extremely clean burning. It has excellent anti-knock qualities and better cold start performance than a gasoline engine. It also offers longer engine life, safe and reliable use, and quiet performance, industry sources say. Both BMW and Volvo already produce bi-fuel vehicles, Russo said. Although transport fuel is a potential growth area for gas in the domestic and commercial - as opposed to heavy industrial - sectors, more growth is seen from traditional areas, he added. These are space heating, the largest area, cooking and water heating, and, increasingly, space cooling. Technology allowing gas-powered air conditioning is improving, said Russo, and the market is little developed. While the penetration rate of air conditioning in the residential sector has reached 73 percent in Japan and 70 percent in the U.S., it is a mere nine percent in Spain and five percent in Italy. 7420 !E12 !ECAT !G15 !G154 !GCAT Two experts forecast on Monday that the third stage of the European Union's economic and monetary union (EMU) would be launched in 1999 with eight members initially. "In my main scenario eight countries will take part from the very start - Germany, France, the Benelux countries, Austria, Finland and Ireland," Niels Thygesen, professor at Copenhagen University, said in a newsletter published by Denmark's European Political Council. Thygesen said he saw an 80 percent possibility of EMU starting on January 1, 1999. In the same newsletter British former EU-commission employee Bernard Connolly agreed but said he was only completely sure about core states Germany, France, the Benelux countries and Austria participating from the start. Connolly, author of the controversial "The Rotten Heart of Europe" book strongly opposed to EMU and published last year, foresaw however that EMU would happen even if some countries failed to meet the Maastricht convergence criteria but would probably not begin until mid-1999. "Germany will let all the countries mentioned take part in EMU even if they are far from meeting the necessary criteria," Connolly said. "The project has always been political rather than economic. German politicians will not let convergence criteria stop the EMU coming about," Connolly said. Thygesen and Connolly disagreed in the newsletter on the impact of the European common currency on economic growth and unemployment in Europe. Thygesen saw EMU having a positive impact here while Connolly feared instability and increased joblessness. "EMU will bring with it instability and rising unemployment. The more countries participatiing the higher is the risk," Connolly said. "The European economies are simply not convergent enough to pursue a common monetary policy without suffering," he said. Denmark, which meets the EMU convergence criteria, will not be able to participate without holding a fresh referendum, having opted out in its 1993 vote on the Maastricht treaty. 7421 !E12 !E41 !ECAT !G15 !G154 !G155 !G158 !GCAT !GDEF !GJOB Negotiations on changes to the Maastricht Treaty are to speed up over the next few months as pressure mounts for the inter-governmental conference (IGC) to stay on track. A draft treaty is to be prepared by the end of the year, and EU leaders are to meet in a special European Council in Ireland in October to discuss the direction the bloc should take as it prepares for an influx of new members. The idea is to wrap up the IGC by the middle of next year -- at the end of the Dutch presidency -- allowing for negotiations with applicant countries to begin by the end of 1997 or the beginning of 1998. EU sources said heads of state and government were keen to wrap up this latest review of the EU treaty as soon as possible -- but for a number of differing reasons. France, for example, worries that delaying the IGC would mean ratification bumping up against its next elections. British Prime Minister John Major also wants the negotiations -- highly controversial among Euro-sceptics in his Conservative Party -- out of the way. Even Luxembourg, which takes over the EU presidency in the second half of next year, is said to be eager not to have to host the end of the IGC but to be able to focus on pending economic and monetary union (EMU) instead. But despite the new intensity of purpose, officials in Brussels say many member states remain unwilling to show their hand in negotiations until other issues facing the bloc, including the single currency and future EU finances, have become clearer. "Can you expect a country to be ready to make a compromise on the treaty (without decisions on) big important issues such as structural funds, and the ins and outs (of EMU)," said one EU diplomat. Others have said that countries are also unwilling to begin making serious concessions before the British elections, believing a change of government will make it easier for the IGC to achieve agreement. But even then, officials say, what emerges from the IGC will almost certainly be a modest adjustment to the landmark Maastricht Treaty and not a radical new step towards European integration. Impetus for accelerating the negotiations has been a belief that since treaty talks began in Turin in March, they have been little more that an airing of individual countries' positions. "They (negotiators) have gone through the whole treaty now a couple of times," the diplomat said. There has been widespread agreement on the need for a more organised approach to the bloc's Common Foreign and Security Policy (CFSP) which is likely to mean the setting up of a forward planning unit in the Council of Ministers. Who will head the unit -- a top-level bureaucrat or a high-profile Mr or Ms CFSP -- remains in question. Most EU countries also want the fight against unemployment to be formalised somehow by being included in the treaty, with some countries calling for a special Employment Chapter. Irish Finance Minister Ruairi Quinn has suggested this might mean the creation of an Employment Committee to work something like the Monetary Committee. Diplomats said at least 10 countries are in favour of some kind of employment language, although Germany and Britain remain firmly opposed to anything too stringent, fearing it could lead to centralised meddling in what they believe to be a largely local issue. The five months of talks have also made it clear that the new treaty will contain some system for improving efficiency in the Third Pillar. The issue is how, given strong opposition among some member states to watering down the inter-governmental nature of the justice and home affairs. Some officials have suggested that what may emerge is a system in which special Third Pillar directives and regulations, rather than conventions and treaties, are issued inter-governmentally without a role for the European Commission or the European Parliament. Some treaty language is also expected concerning joint defence issues, particularly in light of NATO's recent agreement to allow the Western European Union (WEU) to use its equipment for peacekeeping and humanitarian projects. Britain, one of the EU's two defence powers, is firmly opposed to any move to incorporate the WEU within the Union. It has said, however, that WEU summits and EU summits could be held back to back. Others envision having the EU direct the WEU in so-called Petersburg tasks (humanitarian, peace-keeping). This in part stems from an idea proposed by Sweden and Finland, two neutrals with only observer status in the WEU. On internal EU decision making, there is widespread agreement that changes need to be made to allow the EU to work with another dozen or so members, but little sign yet of the required unanimity over what to do. Britain remains opposed to an extension of Qualified Majority Voting. It is alone in being opposed in principle, but has allies in various areas -- for example, Greece in CFSP matters and Luxembourg concerning taxation. The bloc's smaller countries also remain steadfast against any change in their representation in the Commission or as EU president. What promises to be a key debate over so-called flexibility -- the right of some countries to integrate faster than others -- has also moved forward, with most countries favouring the concept being incorporated into the treaty. Again, however, no agreement has been reached over how. France and Germany have called for a general clause permitting flexibility across a broad swathe of issues. Others, however, have argued that flexibility should be specific and limited to certain areas. A report issued last month by the London-based European Policy Forum noted that most EU leaders have come out in favour of flexibility but that each has a different notion of what it means. Some countries, meanwhile, have started worrying about the process that will follow an IGC pact -- ratification. Officials have noted the potential for some countries to hold up ratification in order to press the others to give them what they want -- structural funds, a smaller contribution to EU finances or preferential treatment to a particular applicant country. 7422 !C16 !C17 !CCAT !GCAT The three-star Auberge de l'Eridan in southeastern France is likely to become the second top-rated restaurant this year to close its doors due to huge bank debts, owner-chef Marc Veyrat said on Monday. The restaurant in Veyrier-du-Lac at the foot of the French Alps plans to shut down on October 9, Veyrat said. Technically, he is giving his employees only a three-week paid holiday, but the restaurant will not reopen unless its bankers reverse their refusal to renegotiate its debt of 45 million francs ($9 million), Veyrat told Reuters. "We are doing well enough, but the bankers want it all," said Veyrat, who is 45. The restaurant is known for its use of wild herbs and roots in combination with fish taken from Lake Annecy, which it overlooks. It borrowed heavily in 1992 for renovations and won its third star from Michelin, France's most prestigious guide, in 1995. Its closure would cut to 18 the number of Michelin three-stars in the world, down from 20 in the guide's 1995 edition. The elite fraternity of top-rated restaurants was badly shaken in January when chef-owner Pierre Gagnaire declared bankruptcy for the restaurant that bore his name in the depressed central French town of Saint-Etienne. The establishment was the first three-star eatery in history to go broke. Gagnaire is now preparing to open a more modest restaurant in Paris. Should Veyrat's restaurant close down for good, "I am going to move to my sister's farm and restaurant, where I can continue to cook my food near the herbs that I love," he said. His sister's Chalet-Hotel Croix-Fry, which has no Michelin stars, is located in the Alpine town of Manigod, 26 km (16 miles) outside of Annecy. 7423 !E12 !ECAT !G15 !G154 !GCAT Dropping or delaying Europe's planned monetary union (EMU) would be more expensive for national economies than introducing the single currency, European Union Farm Commissioner Franz Fischler said on Monday. "Dropping the Euro would be more expensive than introducing it," Fischler said during a visit to Vienna. The introduction of a single currency could save up to 200 billion schillings in exchange costs across Europe every year and would rule out the option of costly devaluations, he added. "Delaying entry would also hurt the schilling," Fischler, an Austrian, said. "We want to continue being regarded as a country with a strong currency." The commissioner reiterated that member countries would have to keep their fiscal house in order even after they join the union, scheduled to begin in 1999. -- Vienna newsroom +431 53112 274 7424 !GCAT !GDIP !GVIO The German government condemned Iraq and Iran on Monday for violating a United Nations protection zone for the Kurds in northern Iraq, saying both countries were in breach of U.N. resolutions. Foreign ministry spokesman Martin Erdmann said the incursions were "a flagrant breach" of the resolutions, and that all troops must be withdrawn from the region. U.N. officials said on Monday that Iraqi troops had withdrawn from Arbil, the capital of Iraqi Kurdistan, two days after installing their Kurdish allies, the Kurdistan Democratic Party (KDP), in power there. Iran denies being involved in the fighting or backing either of two rival Kurdish groups. But a KDP official said on Sunday that Iranian forces had occupied an area of northern Iraq close to the Iranian border. Some KDP officials say Iran has been supporting the KDP's main rival, the Patriotic Union of Kurdistan, now driven out of Arbil by Baghdad's forces and the KDP. 7425 !GCAT !GPOL Exiled Lebanese Christian leader and former army commander General Michel Aoun on Monday cautiously welcomed an offer to return home from serving Lebanese Prime Minister Rafik al-Hariri. "Certainly I intend to return but this statement of good intentions by the Lebanese government must first be followed by the repeal of certain past administrative decisions taken against me," Aoun told Reuters by telephone from his closely guarded home at Crecy-la-Chapelle, east of Paris. He said the decisions he wanted cancelled dealt largely with the freezing of his assets in Lebanon. The French newspaper Liberation said Aoun had $32 million dollars in Lebanese bank accounts, a "war chest" he could use to relaunch political activities. Aoun was commenting on a weekend statement to a Lebanese television station by Hariri who was quoted by French media as saying: "He (Aoun) can now return when he wants and carry out political activities in a climate of freedom and democracy. The date of his return is up to him." Aoun was forced into exile in 1990 for a five-year period after heading the Christian-led Lebanese army in an unsuccessful and bloody effort to oust Syrian forces from the country. More recently, he called on Lebanese voters, especially his Christian Maronite backers, to boycott parliamentary elections in whose third round Syrian-backed Hariri and his supporters won a resounding victory amid charges of widespread abuses. "The results of these elections must be annulled. . ," Aoun said, adding that if he returned, he would not create a new political party but would seek to head those forces which agreed with his aim of ridding Lebanon of Syrian and Israeli troops. "My goals will never change. I will always defend Lebanon's independence and sovreignty," he said. Aoun said that one condition for his return would be official permission for him to dispose of "official protection by elements chosen by me." The former Lebanese army chief was embroiled this year in controversy with his French hosts when he said he would sue French authorities before their own courts for restricting his freedom of speech and movement. The row was sparked by Paris banning Aoun from addressing the European Parliament in May, saying he had agreed to shun all political activity as a condition for being admitted to France. Paramilitary gendarmes sealed off his home to prevent him from travelling to the parliament in Strasbourg. The French government then came under fire from its own back benches in parliament who complained about selective enforcement of restrictions on political exiles, recalling Paris allowed the late Ayatollah Ruhollah Khomeini to spearhead the 1979 Iranian Islamic revolution from exile in France. Middle East analysts said Aoun's muzzling was a favour to Hariri, a friend of President Jacques Chirac, and a gesture to avoid antagonising Syria, which recently accepted an increased French role in the Middle East. Aoun had planned to deliver a speech proposing a government of national unity in Beirut to prepare for free elections, and calling for a summit between Lebanon, Syria and Israel to plan a pullout of foreign troops from his country. 7426 !C12 !C33 !CCAT !GCAT !GCRIM Four suspects have been released from detention in an investigation into alleged corruption during the construction of Frankfurt airport's second terminal. A spokesman for the High Court in Frankfurt said the four men were still under suspicion but that investigations had been largely concluded and the judges saw no danger of suppression of evidence. The released suspects included two Flughafen AG (FAG) staff and two employees of a communications firm. The Frankfurt state prosecution office alleged that the two FAG workers had received bribes amounting to millions of marks in return for passing contracts to preferred companies. A total of five accused had been placed under detention as part of an investigation which has involved some 50 managers from 20 companies. --Frankfurt newsroom +49 69 756525 7427 !GCAT !GVIO Rockets rained on Kabul on Monday, killing at least eight civilians, as Afghan government forces fought Islamic Taleban rebels near the city, witnesses said. Government troops unleashed a deafening early morning rocket barrage against Taleban positions in the Arghandi area, about 20 km (13 miles) southwest of Kabul, before launching a ground offensive towards the strategic town of Maidan Shahr. Witnesses said government planes had bombed Taleban positions and both sides used heavy artillery and rockets in the fighting, which went on for much of the day. A Taleban spokesman in the southern city of Kandahar confirmed there had been heavy clashes on frontlines around Arghandi, but said neither side had made any gains. The Pakistan-based Afghan Islamic Press agency (AIP) said the Taleban had lost at least two fighters. Another six Taleban were wounded. It had no word on government casualties. The fighting closed the main road from the Taleban-held town of Maidan Shahr, 30 km (19 miles) southwest of Kabul, one of the capital's main supply routes for food and fuel. Government troops also attacked Taleban positions south of the capital, beyond the Darulaman Palace area, provoking rebel gunners to target residential areas in southwest Kabul. Sources at the Karte Seh hospital said at least four civilians had been killed and 15 wounded in the exchanges. Government-controlled Kabul radio later put the toll at eight civilians killed and 18 wounded. Ten houses were damaged. The battles coincided with a visit to Kabul by Iranian Deputy Foreign Minister Murtaza Sarmadi, who invited Afghan Foreign Minister Najibullah Lafrai to a planned conference of regional foreign ministers in Tehran in late October. Sarmadi told a news conference that the Afghan government, while accepting the invitation, had proposed that Iran also invite the five permanent U.N. Security Council members -- Britain, China, France, Russia and the United States. He said Iran would consider the Afghan suggestion. Tehran has invited the foreign ministers of Afghanistan's neighbours -- Pakistan, Tajikistan, Turkmenistan and Uzbekistan -- but not rival Afghan faction leaders to the conference. The Taleban, entrenched in hills south of Kabul for the past year, have sworn to oust President Burhanuddin Rabbani and impose strict Islamic rule throughout Afghanistan. 7428 !GCAT !GVIO Rockets crashed into Kabul on Monday, killing at least four civilians, as Afghan government forces launched a two-pronged offensive on Islamic Taleban rebels south and southwest of the city, witnesses said. Government troops unleashed a deafening early morning rocket barrage against Taleban positions in the Arghandi area, about 20 km (13 miles) southwest of Kabul, before launching a ground offensive towards the strategic town of Maidan Shahr. Taleban sources in the Pakistani city of Peshawar confirmed there had been heavy fighting on frontlines around Arghandi, but said the government side had been unable to advance. The Pakistan-based Afghan Islamic Press (AIP) agency said both sides had suffered casualties, with the Taleban losing at least two fighters. Another six Taleban warriors were wounded. Witnesses said both sides used heavy artillery during several hours of fighting, which closed the Maidan Shahr road. Although the Taleban control Maidan Shahr, they have allowed the highway to remain open as the main route for Kabul's supplies of firewood, cooking oil, flour, fuel and livestock. Government troops also attacked Taleban positions south of the capital, beyond the Darulaman Palace area, provoking rebel gunners to target residential areas in southwest Kabul. Sources at the Karte Seh hospital said at least four civilians had been killed and 15 wounded in the exchanges. The AIP said fighters loyal to President Burhanuddin Rabbani's top commander Ahmad Shah Masood, Prime Minister Gulbuddin Hekmatyar and Abdurrab Rasul Sayyaf, leader of the Ittehad-i-Islami faction, had all taken part in the government assault on the Taleban. Differences between Masood and former opposition leader Hekmatyar, who rejoined the Kabul government in June, had previously inhibited joint military operations. The Taleban, entrenched in positions to the south and southwest of Kabul for the past year, have sworn to oust Rabbani and impose strict Islamic rule throughout Afghanistan. 7429 !GCAT These are some of the leading stories in the Bangladesh press on Monday. Reuters has not varified these stories and does not vouch for their accuracy. --- DAILY STAR Deadly arsenic pollution of sub-soil water has threatened lives of thousands of people in Southern district of Bagerhat and adjoining areas. Two members of a family died of arsenic intoxication in the district in recent months, health officials said. --- THE INDEPENDENT Swelling of the rain-fed Ganges and Brahmaputra rivers has deteriorated flood situation in northern districts. Northern Rajshahi city protection embankment developed breaches. Flood waters inundated some parts of the highway between Rajshahi and Chapai Nawabganj districts, halting vehicular transport. --- BANGLADESH OBSERVER Police arrested Nasiruddin Pintu, acting chief of the student wing of main opposition Bangladesh Nationalist Party, triggering violent protests in Dhaka University campus. Activists fired blank shots and damaged at least 15 vehicles in and around the campus. --- FINANCIAL EXPRESS Cooperation with Non-Governmental Organisations (NGOs) would be the "key element" of all future operations of the Asian Development Bank, said Kazi F Jalal, chief of ADB's environment and social development office, in Dhaka on Sunday. -- Dhaka Newsroom 880-2-506363 7430 !GCAT Following are some of the main stories in Monday's Pakistani newspapers: DAWN - A team from South Korea's Daewoo company met government officials to explore areas of business cooperation and investment in Pakistan. Representatives of South Korea's L.G. International Corporation met government officials and discussed investment opportunities in the mineral sector, including the Saindak copper and gold project. - The government has allowed textile mill owners the option of importing duty-free cotton for bonded storage and utilisation for yarn processing and export. - Police have arrested four alleged Indian agents involved in seven bomb blasts in which 57 people were killed and 120 wounded in the past few months. - Interior Minister Naseerullah Babar said the government had substantial proof of India's involvement in recent terrorist attacks in Punjab and could take the matter to the international community. - The Food and Agriculture Ministry said floods destroyed some 75,000 (375-lb) bales of cotton in Punjab province. BUSINESS RECORDER - The government plans to withdraw a subsidy of four billion rupees on wheat, which may increase wheat prices by at least 130 rupees ($3.64) per maund (37.32 kg). - The government is considering how to restructure the Saindak copper and gold project to make it economically viable. THE NEWS - The Central Board of Revenue has accepted the demand of All Pakistan Textile Mills Association (APTMA) to charge 11 per cent interest, instead of 14 percent, on consignments which arrived on or before June 14. - Prime Minister Benazir Bhutto has formed a committee to resolve differences between APTMA and cotton growers on the issue of cotton export. - A sizeable number of students of religious institutions in semi-autonomous Waziristan Agency in North West Frontier Province have left for Khost province of Afghanistan to join the Taleban militia in its fight against Kabul government forces. FRONTIER POST - Top Pakistani nuclear scientist Dr Abdul Qadeer Khan has said the Comprehensive Test ban Treaty will have no impact on the working of famous Kahuta Research laboratories. THE NATION - The vegetable oil industry plans to raise ghee and cooking oil prices by 3.50 rupees per kg in the next few days. -- Islamabad newsroom 9251-274757 7431 !GCAT VEERAKESARI Government officials in north say students and public servants need permission to come into army-held areas from rebel-held north. --- THINAKARAN Army detains 24 people, including children, at Pesalai, in Mannar, while trying to go by boat to Tamil Nadu in south India. --- DAILY NEWS Japan to grant 750 million rupees to improve Sri Lanka's food production and help thousands of farmers. Government ratifies Optional Protocol to the International Covenant on Civil and Political Rights, Foreign Ministry says. --- THE ISLAND Education Ministry spokesman says 40 percent of school children in northern Jaffna have returned to school. --- LANKADEEPA Two people killed in clash between ruling People's Alliance and opposition United National Party supporters in Negombo. --- DIVAINA Seven soldiers protecting farmers killed in Tamil rebel ambush in Ridipokuna in Polonnaruwa. --- DINAMINA British Foreign Secretary Malcolm Rifkind says international community appreciates Sri Lanka's efforts to protect human rights. --Colombo newsroom tel 941-434319 7432 !GCAT Following is a summary of major Indian business and political stories in leading newspapers prepared for Reuters by Business News and Information Services Pvt Ltd, New Delhi. Telephone: 11-3324842, 11-3761233; Fax: 91-11-3351006 Internet : biznis. news@forums. sprintrpg. sprint. com -------oo0oo------- TOP STORIES Hindustan Times SCAM-TAINTED FORMER MINISTER SAID READY TO RETURN SOON Former Indian communications minister Sukh Ram, facing possible corruption charges, is willing to return home from London soon. This was reported to have been conveyed by Sukh Ram's counsel to the Central Bureau of Investigation (CBI). The counsel said Sukh Ram was keen on joining the inquiry into the corruption charges. A letter to this effect has been sent by the counsel to the CBI. ---- Indian Express PAKISTAN SAID SEEKING TO DISRUPT KASHMIR POLLS Indian army sources said Pakistan's Inter Services Intelligence (ISI) was seeking to disrupt this month's local assembly polls in Jammu and Kashmir. The sources said the strategy included planting explosive devices on roads to scare away voters. In May's parliamentary elections, more than 45 percent of eligible voters took part in the polls. Some people have been killed and many injured in firing across the border in the Poonch sector in the past two months. ---- Business Standard PROPOSAL TO GIVE COMPANIES FREE HAND ON RECAST DECISIONS The department of company affairs has proposed giving company managements a free hand on corporate decisions. Sources said these decisions might include restructuring, streamlining, winding up existing businesses and entering new ones without central government interference, provided any move has the backing of two-thirds of the shareholders. This is being attained by freeing companies from the requirement of seeking clearance of the company law board for changing the objects clause of the memorandum of association. MINISTRY SEEKS TO ERASE SOME CURBS ON CONSUMER GOODS IMPORTS The Commerce Ministry is finalising a cabinet note on the removal of quantitative restrictions on consumer goods imports. The note would address the time schedule to be adopted for easing these controls. This is being done ahead of balance of payments consultations in Geneva in the World Trade Organisation forum in October. 25 PERCENT GROWTH IN CUSTOMS RECEIPTS Government customs receipts continued to grow, registering an increase of 25 percent by the end of July. But excise collections remained sluggish at five percent. The finance ministry has projected growth of 25 percent for excise. Total collections in the current fiscal (April-March) are targeted at 444.35 billion rupees under customs and 468.84 billion rupees under excise. MAHARASHTRA SEEKS APPROVAL FOR POWER PROJECTS Maharashtra has requested priority approval for three power projects, proposed to be developed through independent power producers (IPPs) to generate 5000 mw in the state. The Maharashtra State Electricity Board has identified two projects, both coal-based, of 2000 mw each for development by IPPs. The board has applied to the central government for clearance of these projects, along with the expansion of Nippon Denro Ispat's 1082 mw Bhadravati project by another 1000 mw. ---- Economic Times REVISED MODVAT CREDIT SCHEME COMES INTO EFFECT The Central Excise Department brought into force a new scheme regarding changes in the Modified Value-added Tax (Modvat) credit. Under the scheme, invoices issued by the first and second stage dealer would only be admissible for Modvat credit, in addition to the input manufacturer's original invoice. Finance ministry sources said the scheme provided that the second stage dealer's invoices should be pre-authenticated by the jurisdictional central excise officers for their admissibility as modvatable invoices. GLOBAL DEPOSITORY RECEIPT MARKET PICKS UP Western investors are shifting attention from directly investing in the Indian market to investing through purchases of Indian offerings abroad. In the past month, foreign institutional investors bought up about $500 million worth of global depository receipts (GDRs). Managers say many foreign investors are being driven to GDRs rather than stocks for both financial and administrative reasons. ---- Financial Express CENTRAL BANK URGED TO RAISE EXPORT CREDIT LIMIT Commerce Minister Bolla Buli Ramaiah has asked the central bank to consider raising the minimum level of lending by banks to the export sector by 50 percent to 15 percent of the total credit from the current 10 percent. This would enable exporters to face fierce competition in the international market, he said. He agreed with exporters that adequate bank credit at reasonable interest rates should be made available to exports. INFLATION SURGES TO 5.54 PCT Maintaining an upward trend for the second successive week, the annual rate of inflation gained 0.13 percentage points to touch 5.54 percent for the week ended August 17. MINISTRY BEATS RETREAT ON CLEAN COAL STIPULATION Strong objections from the coal and power ministries have compelled the environment ministry to reconsider plans to impose clean coal norms on power utilities. Government sources said the environment ministry would now set up a new committee to assess the techno-economic feasibility of washing coal for power plants. Among suggestions the environment ministry would consider is the power ministry's recommendation to raise the ash content limit of boiler grade coal to at least 34 percent. ---- The Observer LNG CRISIS HITS POWER PROJECTS The implementation of 10,000 MW liquefied natural gas (LNG) based power projects has been delayed due to lack of co-ordination between the power ministry and the petroleum and natural gas ministry. The projects are languishing for want of an adequate LNG supply. In recent months, owners of the power plants have not received the required raw material from oil companies such as Oil India, Oil and Natural Gas Corp and Indian Oil Corp. This has affected their progress. SAMSUNG MAY SHIFT UNITS FROM INDIA South Korea-based Samsung's future investments in India may be affected by the crash in international prices of semi-conductor chips. Sources say, Samsung is planning to shift its colour picture tube production capacity, planned for India, to other countries such as Mexico and Brazil, where labour costs will be low. Semi-conductor chip prices crashed recently from $50 per unit to $12 per unit. LONG-TERM POWER POLICY SOUGHT The government has been urged to come out with a white paper on the future role of the public sector, state electricity boards and private power developers. Such a paper should envisage their role in the next 20 years with a 50-year perspective planning from the domestic and international energy security viewpoint. This was sought by the Independent Power Producer's Association of India's director-general, Harry Dhaul. The paper should focus on the issue of indigenous resources, the needs of the economy and the location of fuel resources, Dhaul said. 7433 !GCAT !GCRIM !GVIO A Russian jailed in Pakistan for his part in a 1990 hijacking of an Aeroflot plane has committed suicide, a senior prison official said on Monday. Saleemullah Khan, inspector general of prisons in North West Frontier Province, told Reuters that Sergey Shukinkov, 36, had hanged himself with his belt in a locked toilet on the night of August 25-26. Khan said Shukinkov was a heroin addict and had been buried in the prison graveyard. The Russian embassy had been informed. Shukinkov was among 11 former Soviet convicts who overpowered their guards on a domestic Aeroflot flight in August 1990 and forced the pilot to fly to the southern Pakistani city of Karachi, where they surrendered and sought political asylum. The authorities rejected their request and they were sentenced in March 1992 to life imprisonment. Another court later reduced their terms to 10 years on the grounds that they had not understood much of their trial due to language barrier. One hijacker, Igor Suslor, committed suicide in a Karachi jail during trial in October 1990. Another, Petrov Uulandimir, died of a heart attack in January in the central city of Multan. 7434 !GCAT !GDIP !GPOL !GVOTE Pakistani Prime Minister Benazir Bhutto was quoted on Monday as saying that India's plan to hold state elections in disputed Kashmir had put prospects for renewed talks with India on hold. "It is very difficult to have a dialogue while elections are being held because it might be misinterpreted by the Kashmiri people as an endorsement of the state elections by Pakistan," she told the Dubai-based daily Khaleej Times. Bhutto said Pakistan would like to resume talks with its arch-rival, but could not do so for the moment. "I hope that we can take stock of the situation after the state elections and then perhaps we can see what should be done," the newspaper quoted her as saying in an interview. Bhutto and Indian Prime Minister Deve Gowda exchanged messages in June in which they expressed willingness to revive peace talks, but there has been no visible progress since then. India plans to hold state assembly elections in Jammu and Kashmir this month, the first local polls to be staged since Moslem discontent against Indian rule erupted into open revolt in 1990. The uprising has cost an estimated 20,000 lives. India, which controls two thirds of Kashmir, and Pakistan, which holds the rest, have fought three wars since independence in 1947, two of them over the disputed Himalayan region. Pakistan denies Indian accusations that it arms, trains and finances Moslem Kashmiri guerrillas, saying its support for the Kashmiris is only moral and diplomatic. Islamabad says state elections cannot substitute for a U.N.-mandated plebiscite that would allow Kashmiris to decide whether to join Islamic Pakistan or Hindu-majority India. 7435 !GCAT !GDIP !GVIO Afghanistan wants Iran to invite the five permanent members of the U.N. Security Council to attend a planned regional peace conference on Afghanistan, Iranian Deputy Foreign Minister Murtaza Sarmadi said on Monday. He told a news conference in Kabul that his government would take the suggestion into consideration, though diplomats said it seemed unlikely that the United States would agree to send a representative to the Tehran meeting, even if invited. Sarmadi said that Iran had invited the foreign ministers of Afghanistan and its neighbours to Tehran at the end of October to discuss how to restore peace in the war-shattered country, but did not want to impose any outside settlement. "Presenting a complex prescription for Afghanistan by foreigners is not the solution," he said. Iran and the United States have both stepped up the pace of their diplomacy in Afghanistan in recent months, though both countries say they support U.N. peace efforts there. Sarmadi said Afghanistan's neighbours wanted an end to the Afghan conflict, in which rival factions have been battling for power since the fall of a communist government in April 1992. He said President Burhanuddin Rabbani's government had accepted the invitation and proposed that the five permanent U.N. Security Council members -- Britain, China, France, Russia and the United States -- also be asked to attend. "We have invited Afghanistan's neighbours and representatives of the United Nations and the Organisation of Islamic Conference to the conference. We will take the suggestion of the Afghan government into consideration about the involvement of the U.N. five permanent members," Sarmadi said. He said Iran was trying to persuade Rabbani's foes to negotiate instead of fighting. "One of our policies is to persuade the opponents to join the government," he said. Sarmadi met Rabbani, Prime Minister Gulbuddin Hekmatyar, military commander Ahmad Shah Masood and other government officials during his two-day visit to Kabul. He was due to fly to the central province of Bamiyan to meet Shi'ite opposition leader Karim Khalili and then to the north to see rebel militia leader General Abdul Rashid Dostum. 7436 !GCAT !GPOL !GVOTE Prime Minister H.D. Deve Gowda's United Front alliance confronts a dangerous foe and a crucial ally in Uttar Pradesh, where state polls this month could hold the key to his future, politicians said on Monday. India's most populous state has announced a three-phased poll in late September and October, putting the United Front in a triangular contest with former prime minister P.V. Narasimha Rao's Congress Party and the rightwing Hindu Bharatiya Janata Party (BJP). Deve Gowda formed a minority government in June after Rao promised to support him following inconclusive general elections, and remains beholden to the Congress to survive the BJP's unceasing challenge in parliament. The polls in the northern state Uttar Pradesh will test that equation, analysts said. Seven of 10 Indian prime ministers have come from Uttar Pradesh, which according to the 1991 census had a population of 140 million people out of over 920 million in India. "We are going to fight the elections to win an outright victory. It doesn't matter what effect it has on the central government," Congress President for Uttar Pradesh, Jitendra Prasada, said in a television interview. Prasada, a Rao loyalist in a fractious Congress, was hoping that a good showing in Uttar Pradesh would take the heat off his leader over a string of scandals that have brought calls for Rao's resignation as party president, Congress leaders said. Prasada's remarks signal Rao's worries about his own survival even if that means dumping Deve Gowda if it came in the way of its campaign in Uttar Pradesh, Congress leaders said. Uttar Pradesh was the main support base of the Congress until 1989 when its fortunes began to wane in successive local polls in Uttar Pradesh, variously against the BJP and the regional Samajwadi Party of socialist Defence Minister Mulayam Singh Yadav. The Samajawadi Party won 16 seats in parliament in the general polls, highest after the BJP's 52 from the state's 85 seats. Deve Gowda's Janata Dal party won two seats and the Congress five, a far cry from all the 85 seats it won in 1984. The BJP emerged as the single largest group in parliament in the April/May elections, with the largest share of its 160 deputies coming from Uttar Pradesh, where it is campaigning to build a Hindu temple at the site of a mosque razed by its supporters in December 1992. Most analysts say the BJP which won 34 percent votes in the state in this year's general elections looked likely to win a majority in the state assembly. The United Front on Monday moved to check bickerings among its varied groups to prevent that from happening, saying the alliance would contest the polls under one common poll symbol. "We hope to sort it out within three or four days," Information Minister C.M Ibrahim, a key Deve Gowda aide, said. He has accompanied the prime minister on a string of recent visits to the state to canvass support for the alliance. The Congress which got eight percent votes in the general polls in Uttar Pradesh has struck an alliance with the Bahujan Samaj Party (BSP) of mostly low caste Hindus. The state was put under New Delhi's direct rule after the BSP ditched Yadav and formed its own government last year. But unable to prove a majority, the BSP governmnent resigned. Yadav's Samajawadi Party and the BSP had an equal share of 21 percent votes each. Deve Gowda's Janata Dal party with four percent votes won two seats in the state. A Janata Dal meeting over the weekend decided to accept Yadav's leadership in the state polls, a point stressed again by the prime minister on Monday when he dismissed reports of a rift within the United Front. 7437 !GCAT !GPRO !GREL Dark patches discovered on Mother Teresa's lungs are no cause for concern and the Roman Catholic missionary is expected to be released from intensive care soon, doctors said on Monday. Doctors said the dark patches which an X-ray revealed on Sunday stemmed from an old attack of pneumonia. "Suspicion of fresh chest complications proved wrong after the second X-ray," said Dr S.K. Sen, medical director at Calcutta's Woodlands Nursing Home where the Nobel Peace Prize winner has been kept for nearly a fortnight. "Mother Teresa continues to remain in a stable condition. Her chest condition has improved and her breathing is satisfactory," said Sen, who is part of a team of doctors monitoring her condition. Sen said Mother Teresa, 86, was suffering from a mild bout of pneumonia along with malaria when she was rushed to Woodlands on August 20. The nun's heart later failed and had to be revived. Doctors said her breathing was now irregular but not alarming. "We plan to discharge her from the intensive care unit soon," said Sen. He did not say when she may be released. 7438 !GCAT !GVIO The International Committee of the Red Cross (ICRC) said on Monday it was helping the Sri Lankan government hold high school examinations in the Tamil Tiger rebel-held north. The government has said nearly 172,000 students are sitting for the examinations which started on Monday, including students in the northern Wanni mainland, most of which is controlled by Liberation Tigers of Tamil Eelam (LTTE) rebels. "We're escorting education ministry examiners at their request," the ICRC's Gerard Peytrignet told Reuters. "We have guarantees from the LTTE that everything will run smoothly and the ICRC work will be accepted." He said the government had asked the ICRC to help conduct the national examinations for "A" level students in the north where a big battle near a rebel-held town displaced more than 200,000 civilians from their homes in July. Peytrignet also said the flow of food to the refugees displaced by the fighting was back to normal. The ICRC in early August escorted government food convoys across no-man's land into the Wanni after the army lifted a three-week blockade on food to the rebel-held north. The LTTE, in a statement issued from their London office, on Monday accused the government of blocking food supplies to the north. But the government has said it was the LTTE which deprived refugees of food by confiscating large stocks of government supplies for use by their own fighters. The LTTE is fighting for an independent homeland for minority Tamils in the majority Sinhalese Indian Ocean island's north and east. The government has said more than 50,000 people have died in the ethnic war, now in its 14th year. 7439 !GCAT !GVIO Afghan government forces launched an offensive against Islamic Taleban rebels southwest of Kabul on Monday, but made little progress, an Afghan news agency reported. The Pakistan-based Afghan Islamic Press said both sides had used heavy artillery in the 5-1/2 hour battle at Arghandi, about 20 km (13 miles) southwest of Kabul. Taleban sources in the Pakistani city of Peshawar confirmed there had been heavy fighting around Arghandi, but said the government side had been unable to advance. The agency said both sides had suffered casualties, with the Taleban losing at least two fighters. Another six Taleban fighters were wounded. It said fighters loyal to President Burhanuddin Rabbani's top commander Ahmad Shah Masood, Prime Minister Gulbuddin Hekmatyar and Abdurrab Rasul Sayyaf, leader of the Ittehad-i-Islami faction, had all taken part in the assault. Differences between Masood and former opposition leader Hekmatyar, who rejoined the Kabul government in June, had previously inhibited joint military operations. The Taleban, entrenched in positions to the south and southwest of Kabul, have sworn to oust Rabbani and impose strict Islamic rule throughout Afghanistan. 7440 !GCAT !GDIS Three missing climbers, two Britons and a New Zealander, have died in an avalanche high on a mountain in northern Pakistan, officials said on Monday. A Pakistani official in the northern town of Gilgit said the climbers, whom he identified as Stephen Thornley, 25, and Andrew Boas, 24, both British, and Christopher Hoare, a New Zealander, had died on August 12 in the Shamshal Valley on the 7,885-metre (25,869-foot) peak of Disteghil Sar. He said death certificates for the three men had been issued on Sunday, though no bodies had been recovered. A British diplomat said he could not confirm that the missing climbers were dead. He said all three men were British, although Boas might hold dual nationality. Three other climbers from the same expedition, all New Zealanders, set off by road from Gilgit for Islamabad, where they were expected to arrive late on Monday or on Tuesday. The six men arrived in Pakistan in June and told a local newspaper that they aimed to climb Disteghil Sar by a previously unattempted route. According to a Pakistani liaison officer, the team left their base camp on July 8 to attempt the climb. They later split into two groups for a final ascent by different routes. One group, which had tried a rocky route to the summit, returned to Camp Three in bad weather on August 12. The surviving climbers, named as Thomas Davies, Dominic Harmond and Peter Marriott, said they had seen their companions, who were attempting a snow- and ice-covered route, through a long camera lens the same day, but then did not see them again. They climbed back up to Camp Two and waited there until August 23, returning to Base Camp on August 26. They arrived in Gilgit, 280 km (175 miles) north of Islamabad, on August 31. 7441 !GCAT !GDIS !GENV Floods that have killed at least 14 people in northern Bangladesh worsened on Monday as engineers worked to mend a damaged embankment and save Rajshahi city from the swelling Padma river, local officials said. They said engineers from the Bangladesh Water Development Board in Dhaka rushed to Rajshahi to plug the breaches in the city's protective embankment. "We have been working day and night to save the embankment," Kazi Farid Ahmed, Rajshahi district commissioner, told Reuters on Monday. "Now it's out of immediate danger," he said. Ahmed said the Padma, which was flowing 13 centimetres (five inches) above the danger level on Sunday, was still rising but very slowly. Authorities have stopped traffic on a highway linking Rajshahi to the neighbouring district of Chapainawabganj, which is also in grip of the floods set off by heavy rain and rush of water from across the Indian border. Local officials said on Sunday about 165,000 people had been badly hit in the two districts. Relief Minister Begum Matia Chowdhury, accompanied by senior officials, flew to the affected areas on Monday to see the extent of damages. She ordered relief for the affected people. Floods sweeping northern Bangladesh in July killed at least 65 people and left half a million homeless, according to official figures. 7442 !GCAT !GPOL !GVIO A Sri Lankan human rights group accused the government on Monday of covering up extra-judicial killings and abductions by the army in northern Jaffna, former stronghold of Tamil Tiger rebels. The rights group, the University Teachers for Human Rights Jaffna, also accused Liberation Tigers of Tamil Eelam (LTTE) rebels of carrying out assassinations of those promoting peace and rehabilitation in the peninsula. "Though security forces showed a refreshing level of care in Jaffna, cases of human rights violations continue to be covered up and the government remains unaccountable for many of their actions," the group said in a report. "Cases of unauthorised arrests, beatings, torture and killings by security forces continue and have become notably worse after Mullaitivu," said the report by the group. It was referring to the army's worst debacle in its 13-year ethnic war with the rebels when the LTTE either killed or captured 1,400 soldiers in a remote camp in Mullaitivu in July. A military spokesman declined to comment, saying: "We don't want to comment just because someone is making allegations." The report came less than one week after the government approved a plan to allow Sri Lankans to appeal directly to a United Nations committee if they had any complaints of rights violations. The cabinet approved a plan to ratify the Optional Protocol to the International Covenant on Civil and Political Rights that would allow appeals to the United Nations's Human Rights Committee. Predominantly Sinhalese government forces seized the Jaffna peninsula, 320 km (200 miles) north of Colombo, in April after a series of major offensives against the rebels. The Tigers, who are fighting for an independent homeland for minority Tamils in Sri Lanka's north and east, had ruled Jaffna as a mini-state for almost a decade with their own administration, courts and police. "(Since July) there has been an institutionalisation of torture to a point where people see it as part of policy rather than as an isolated misdemeanor," the report said. "The ease with which people could go missing is alarming." The rights group, which issues regular reports on human rights issues, also said the LTTE continues to use civilians as cover to attack government troops in Jaffna. "The LTTE remains determined to block any attempt at peace or rebuilding, focusing their efforts on selective assassinations," it said. The LTTE was not immediately available for comment. The human rights group said the government should be more accountable, open and admit mistakes. London-based human rights group Amnesty International last month accused the Sri Lankan government of turning a blind eye to widespread violations, including extra-judicial executions, disappearances and torture. An Amnesty report said the government was trying to justify such violations in the context of the ethnic war in which Colombo says more than 50,000 people have been killed. Colombo reacted angrily to the Amnesty charges, saying it was unhappy with "highly coloured language" in the report. The Indian Ocean nation has tried to improve its human rights image after a government crackdown on a left-wing insurgency in the late 1980s left more than 60,000 people dead or missing. 7443 !GCAT !GDIS Three missing climbers, two Britons and a New Zealander, have died in an avalanche high on a mountain in northern Pakistan, officials said on Monday. A Pakistani official in the northern town of Gilgit said that Stephen Thornley, 25, and Andrew Boas, 24, both British, and Christopher Hoare, a New Zealander, had died on August 12 in the Shamshal Valley on the 7,885-metre (25,869-foot) peak of Disteghil Sar. He said death certificates for the three men had been issued on Sunday. Three other climbers from the same expedition, all New Zealanders, were expected to arrive in Islamabad on Monday or Tuesday. 7444 !E21 !E211 !ECAT !GCAT !GPOL The lower house of the Indian parliament, the Lok Sabha, adjourned without transacting any business on Monday as a mark of respect to a sitting member, Nathu Ram Mirdha, who died at the weekend, officials said. As a result, a speech by Finance Minister P. Chidambaram to the house in reply to a debate on the federal budget for 1996/97 (April-March), will not take place as scheduled on Monday, they said. The speech would have been in reply to a debate on the general aspects of the budget. This is now expected to take place on Tuesday, officials said. Chidambaram plans to make a more detailed reply on the finance bill, including offering any amendments to tax proposals, next week, probably on September 9 or 10, a finance ministry official said. The budget is expected to be put to the vote in parliament by September 13, when the current session is set to end. 7445 !GCAT !GDIS Rescuers recovered six bodies from a river and 15 people were missing two days after a vessel capsized in southern India, the Press Trust of India (PTI) said on Monday. On Sunday officials said they feared at least 44 of the approximately 50 passengers had drowned when the boat, carrying mainly tribespeople, sank on the Nagavalli river in the southern state of Andhra Pradesh on Saturday. PTI said at least two dozen people swam to safety. 7446 !GCAT !GPOL While Quebec's economy falters with rising unemployment, weak growth and flagging investment, its French-speaking majority and English-speaking minority are embroiled in another bitter battle over language. Certain Quebec nationalists advocating the secession of the French-speaking Canadian province want the separatist Parti Quebecois government to further restrict the use of English. After threatening to boycott Quebec retail stores that do not post signs in English, activists for the rights of the province's 700,000 English speakers are set to take their protest campaign to Wall Street, which bankrolls much of the province's C$100 billion ($73 billion) of public debt. At the center of the squabble are Quebec government inspectors -- referred to derisively by English speakers as the "language police" or "tongue troopers" -- who examine commercial signs to ensure the French text is twice the size of the English wording. In August, language officials notified Schwartz's, a landmark Montreal delicatessen, that its luncheon special placards contravened the language law. The deli's accusers were anonymous. Last spring, language officials ordered the removal of Kosher products from grocery store shelves just before Passover because they were not properly labelled in French. After an outcry from Montreal's Jewish community, the Quebec government agreed in August to exempt certain Passover products from language regulations. The incongruous images of the latest flare-up in Quebec's interminable language feud are fertile fodder for the Canadian province's political columnists, cartoonists and commentators. "In Quebec, we have grown men who earn their daily bread by going out every day, armed with tape measures, to ensure that the English on commercial signs is half the size of the French lettering," internationally acclaimed author and humorist Mordecai Richler wrote recently in Montreal's English-language daily newspaper, The Gazette. Quebec officials insist that Richler's tongue-in-cheek depiction of the language inspectors is off the mark. "It is an amusing, but enormously wrong caricature," said Hubert Troestler, spokesman for Quebec's Office de la langue francaise. "The law speaks of clear predominance, which means visually, French should be prevail over all other languages. There is no need to measure," he said. Quebec's official language is French, and several laws enacted since 1974 have variously toughened, then relaxed restrictions on the rights of its 7.3 million residents to be educated in English or post commercial signs in languages other than French. Under pressure from its more militant members, the Parti Quebecois government recently hired 15 inspectors who will act on complaints that English is not deferring to French on commercial signs. In the last week of August, the Quebec government began parliamentary hearings on Bill 40, which among other things, would reincarnate the Commission de la protection de la langue francaise (Protection of the French Language Commission). The commission and its language inspectors were disbanded in 1993 by Quebec's previous Liberal government. Monique Vezina, a former federal Conservative cabinet minister and currently president of the separatist organization Mouvement National des Quebecois, told the hearings that Quebec needs a tougher law to counteract Canada's official bilingualism. "This law does not go far enough. Quebec must be freed of the federal government's constraints," Vezina said. Opposition members and English-rights activists attacked the government's language policy plans as provocative and undemocratic. Mario Dumont, head of the tiny Action Democratique du Quebec, who campaigned for sovereignty in the referendum separatists narrowly lost last October, told the hearings that the Quebec government is obsessed with language at the expense of the province's economy. "The Parti Quebecois is caught up with its linguistic obsessions. It should re-examine its priorities," Dumont said. Dumont said the government is reviving the language debate while the province's 12.4 percent unemployment rate is in danger of heading higher. Louis Balthazar, political science professor at Laval Universty, said in an interview that the latest language skirmish is simply a precursor to Quebec's next referendum on sovereignty, which may be more than two years away. "You have an English-speaking minority that fears that Quebec will become sovereign one day," Balthazar said. At the parliamentary hearings, Quebec culture minister Louise Beaudoin left little doubt the language issue is central to the separatists' independence drive. "French is still not Quebec's common language. Only sovereignty will allow the development of our identity and our culture," Beaudoin said. Yet according to Canada's 1991 census, 2.4 million Quebec residents said they understood both French and English, while 4 million said they spoke French only and 374,000 indicated they were unilingual English speakers. As for the unusual outry from Quebec's English-speaking community, Reed Scowen, Quebec's former delegate-general for the United States, said it is simply finding its democratic voice after getting a big scare in the close referendum vote. "The trauma of the referendum and its result was a wake-up call for the English community here," Scowen said. 7447 !GCAT !GDIS !GWEA Hurricane Edouard, its winds weakened to 80 mph (128 kph), drifted slightly east on Monday and the National Hurricane Center predicted that Cape Cod and Nantucket, Mass., might be spared hurricane conditions. "Edouard should pass to the east of Nantucket and Cape Cod sometime today (Monday)," meteorologist Brian Maher said at the National Hurricane Center in Miami. "If it continues on this track, it's possible that Nantucket will not experience hurricane-type conditions but tropical storm conditions," Maher said. At 5 a.m. EDT (0900 GMT), Edouard was located 80 miles (128 km) southeast of Nantucket and moving north at a speed of 14 mph (22 kph). CNN reported the Massachusetts coast was receiving winds of more than 50 mph (80 kph) and some power outages were reported, along with some local flooding. The U.S. Coast Guard warned fishing vessels to seek shelter and closed ports in Boston, Fall River and New Bedford in Massachusetts and Providence, R.I., to commercial ships, Boston television reported. All Massachusetts state parks and beaches from Cape Cod north to the coast of New Hampshire were ordered closed on Sunday night and vacationers were urged to head inland, said Arlene Margolis, a spokeswoman with the Massachusetts Emergency Management Agency. Traffic heading off Cape Cod on Sunday in advance of the threatened hurricane was at a near standstill, with bumper-to-bumper backups for nearly 20 miles (32 km). Several towns on Cape Cod declared a state of emergency and the Red Cross opened shelters. Emergency teams were armed with communications equipment, power generators and supplies and three units of the National Guard were put on high alert, officials said. With tides along Martha's Vineyard, Nantucket Island and eastern parts of the Cape expected to be five feet (1.5 metres) higher than normal, crews were prepared to deal with coastal flooding. Earlier Sunday along Thames Street in Newport, R. I., the sounds of plywood being nailed over windows reminded Labor Day vacationers of the storm. Tourists turned their eyes from the oceanfront, million dollar mansions toward surfers braving 10-foot (three-metre) waves. Meanwhile, Hurricane Fran was drifting in the Atlantic and was no immediate threat to any land, but forecasters said it appeared to be getting better organized and was strengthening. At 5 a.m. EDT (0900 GMT), the center of Hurricane Fran was about 750 miles (1,206 km) east-southeast of Nassau in the Bahamas and moving west-northwest at 10 mph (16 kph). Fran's top winds were clocked at 80 mph (128 kph); forecasters said the storm was expected to strengthen during the next 24 hours. 7448 !C12 !CCAT !GCAT !GCRIM A federal court ruled that a lawsuit filed in 1994 by five Dairy Queen store owners can proceed as a class action. These store owners will now have the option of taking part or being excluded. The defendants in the suit are International Dairy Queen Inc and American Dairy Queen Corp. In response to the Aug 30 ruling of the Macon, Ga., court, the two companies jointly said that the certification of the case as a class action determines only who the parties could be, and it does not reflect anything about the merits or lack of the claims made. They said they believe the claims are without merit and intend to vigorously defend the case. No trial date has been established. Neither the companies nor the court could not be reached for additional information. 7449 !C42 !CCAT !E41 !ECAT !GCAT !GJOB The average doctor's pay fell in 1994 by nearly four percent to $187,000, possibly a result of patients moving to managed care from traditional insurance, according to a report on Monday in Health Affairs. The journal said the drop in 1994, the last year for which figures were compiled, from the 1993 average was the first time doctor earnings had fallen since income statistics were first collected in 1982. "The 1994 physician income numbers may be the first evidence that managed care has had a widspread effect on physicians' earnings in particular and health spending in general," it said. Project Hope, the health education organization that publishes the journal, said the pay drop suggested that managed care was cutting doctor reimbursement and curbing patient access to physician services. "This is a remarkable turnaround because physicians have enjoyed strong earnings growth over the past decades," said the authors of the report, Carol Simon, an associate professor at the University of Illinois at Chicago, and Patricia Born, an American Medical Association economist. Until 1994, average doctor income had risen nearly six percent a year and even adjusted for inflation the rise was 2.2 percent, the report said. In 1995, more than 83 percent of all doctors had at least one fee-limiting managed care contract, up from 61 percent in 1990 and 43 percent in 1986. Other factors that may have driven doctors' pay down were a shift toward group practice and changes in Medicare reimbursements, the report said. It cited these specialty earnings, compiled by the American Medical Association: -- Primary care such as family practice and pediatrics, down 1.7 percent, to $129,353; -- Hospital-based such as anesthesiology and emergency medicine, down 4.6 percent, to $214,634; -- Subspecialists in internal medicine, surgery and pediatrics, down 5.1 percent, to $243,828; -- Other specialities such as general surgery, psychiatry and obstetrics/gynecology, down 5.3 perent,to $179,072. 7450 !C31 !CCAT !GCAT !GENT "The Crow: City of Angels", a sequel to the ill-starred 1994 movie, "The Crow", flew to the top of the box office during the four-day Labor Day holiday, according to studio estimates released Monday. The supernatural thriller, released by Walt Disney Co's Miramax Films unit, opened with an estimated $10.1 million during the Friday to Monday period. According to Exhibitor Relations Co., which collects the studios' estimates, this is the biggest Labor Day weekend opening ever. The previous record was held by last year's "The Prophecy", with $7.5 million, the company said. 7451 !GCAT !GWEA The hurricane warning for southeastern Massachusetts has been lowered to a tropical storm warning - which goes from Woods Hole to Plymouth including Nantucket and Marthas Vineyard. Edouard is centered 115 miles east of Nantucket, moving northeast at 12 mph. Top wind are 75 mph. Weakening is expected and Edouard will likely be downgraded to a tropical storm during the next few hours. The main threat from Edouard at this time will be lingering heavy rain bands over the warned area which may produce local flooding. Conditions will improve tonight. Hurricane Fran is becoming a concern to the Bahamas and the southeastern USA. Fran is currently centered about 655 miles east of Nassau in the Bahamas, and moving west northwest at 12 mph. Top winds are 80 mph and some strengthening will likely occur during the next 12 to 24 hours. At this time Fran is only a threat to shipping and boating east of the Bahamas, but all interests in the Bahamas and in the coastal southeastern USA should monitor the progress of the storm. In the eastern Pacific, Tropical Storm Elida is only a threat to shipping. The storm, currently about 300 miles south of the southern tip of Baja California is moving slowly to the northwest, and is expected to continue this motion while strengthening during the next couple days. Tropical Storm Orson will weaken from 65 mph to 45 mph during the next 36 hours as it tracks northeastward through the northwestern Pacific, over open water, from near 39n/150e to near 45n/166e. Orson is a moderate threat to shipping. 7452 !C42 !CCAT !E41 !ECAT !GCAT !GJOB An American Airlines contract proposal for its pilots was endorsed by union leaders, ending two years of negotiations and the threat of a strike. Jim Sovich, president of Allied Pilots Association (APA), said in a recorded message to members that his team decided to back the airline's "final, final, final" offer and would take it to the union's board for acceptance. "In my opinion, it is a very fair contract that provides the pilot with job security, pension security and compensation he and she needs in exchange for the productivity enhancements the company needs to compete," Sovich said. Sovich did not give details but said the proposed package includes "pay raises and stock options during the length of the contract that ensure the compensation package is industry-leading." Airline president Don Carty, who joined the negotiations in mid-August in a bid to force through an agreement, said the deal would allow the company to focus on its business. "We are pleased to have reached an agreement," Carty said in a statement. "With this matter behind us, we can now focus our full attention on providing the outstanding service our customers expect." APA initially demanded a minimum five percent per year wage hike backdated to August 1994, while the airline wanted a two percent pay cut and a four-year wage freeze. But both sides recently eased their demands and swapped a series of proposals in round-the-clock negotiations over the last week. Sovich said the proposal includes changes to boost productivity but that the airline's controversial "short-haul proposal", under which it would assign 20 percent of its 9,400 pilots to a small-airplane unit and pay them up to 30 percent less, did not get through. "The short-haul proposal is off the table," Sovich said. The labor contract negotiations began in mid-1994 but showed little advance until the National Mediation Board was brought in to broker a deal earlier this year. Sovich said it was "ironic" that the deal was finally strck on Labor Day. The package still requires ratification by the APA's board of directors and membership. APA had threatened a strike within weeks if a package was not agreed on and Sovich told his members the threat of industrial action had been key. "Your support, your overwhelming strike vote and your strength have provided the impetus needed to force this ageement," he said. 7453 !C12 !CCAT !GCAT !GCRIM !GPOL Mississippi's Republican governor and Democratic attorney general were set to square off before the state supreme court this week over who has the authority to sue the tobacco industry to recover Medicaid payments to sick smokers. The Mississippi Supreme Court will hear arguments on Wednesday in a case brought by Gov. Kirk Fordice, who says only he can sue on behalf of the state Medicaid division, which is under his authority. Democratic Attorney General Mike Moore filed a landmark lawsuit against tobacco manufacturers in May 1994 to recover Medicaid money that was paid to sick smokers. Moore, the first state attorney general to sue the industry and an active recruiter of others to join the courtroom assault, called the governor's action a national embarrassment and said he has sole power to file lawsuits on behalf of state taxpayers. "There is one governor in America who is suing the attorney general and that's here in Mississippi," Moore said recently. "George Bush ... is a Republican, last time I checked. Why didn't he sue Dan Morales?" he asked, referring to Texas' Republican governor and its Democratic attorney general, who was also suing the tobacco industry. A ruling in favor of Fordice would not end the lawsuit but would erase the biggest claim for damages. The attorney general's $940 million suit seeks to recover the state's costs for treating smokers through Medicaid, state employee health insurance and indigent care at University of Mississippi Medical Center and county hospitals statewide. "The biggest chunk of our case obviously is Medicaid," Moore said. Fordice has insisted that if Moore's lawsuit was allowed to proceed, other industries will be targeted by lawsuits. "The floodgates will certainly open and the progressive, pro-business reputation Governor Fordice has carefully nurtured may be ruined," said Fordice spokesman Heath Hall. The 1,500-member Mississippi Manufacturers' Association filed a "friend of the court" brief siding with Fordice. The American College of Chest Physicians and 38 state attorneys general filed similar briefs on behalf of Moore. Fifteen states, 12 of which have Republican governors, are suing tobacco manufacturers, wholesalers, industry research groups and a public relations firm. Attorneys general or governors are plaintiffs in 14 of those. Alabama's lieutenant governor filed suit as a private plaintiff. Moore said that if the court rules in favor of Fordice, it could hurt the other states' tobacco lawsuits. "I think it would do some damage to the national case," he said. Tobacco industry attorneys were expected to argue that Moore lacked authority to sue for Medicaid reimbursement and that his case was in the wrong court. The industry has sought unsuccessfully to move the case to state circuit court for a jury trial. Moore's lawsuit was pending in Jackson County Chancery Court, where decisions rest with a judge. If the case were moved to Circuit Court, R.J. Reynolds Tobacco attorney Joe Colingo said, "the state would have to take the position of an injured party. It would be like any other cigarette case." A Florida jury's $750,000 verdict for an ill smoker last month was only the second major lawsuit lost by the tobacco industry and it will be appealed. Part of the industry's defense has been that smokers have a choice and assume a risk. 7454 !GCAT !GDIS !GWEA Hurricane Edouard remains a threat to shipping and extreme southeastern Massachusetts. The storm about 140 miles south southeast of Nantucket Island is moving towards the north northeast 14 mph with highest winds near 90 mph. Edouard will continue to weaken during the next 24 hours. Large ocean swells will occur from the Bahamas to Bermuda and along the East Coast of the USA. Hurricane Fran continues to slowly gain strength north of Puerto Rico and Hispaniola and now has top winds of 85 mph. Fram is about 800 miles east of Nassau, Bahamas and will continue to track to the west northwest. Fran will be a threat to shipping during the next 24-36 hours and may threaten the Bahamas and Florida Wednesday and Thursday, however, this is still uncertain. Minimal Typhoon Orson is about 375 miles east of Tokyo with highest winds of 75 mph. Orson is tracking off to the northeast and will slowly weaken and become extratropical during the next 36-48 hours. 7455 !C34 !E71 !G154 !G157 !GCAT The following are the main stories from Saturday morning's German newspapers: FRANKFURTER ALLGEMEINE ZEITUNG - Kohl and Chirac plan for 21st century Europe, warn against new unilateralism - Economics ministry says arms export rules do not need tightening despite illegal shipments to Libya - Health Minister Seehofer wants health insurance contributions frozen - Cartel office reviews Lufthansa ticket prices - High earners to be checked more closely by tax authorities HANDELSBLATT - Veba and Ruhrgas to cooperate on telecommunications network - Handelsblatt September leading indicator rises - Finance Minister Waigel wants top marginal tax rate to be below 40 percent - EU says compromise still possible on row over Saxony's subsidies to VW , gives Bonn until September 4 - Retailers not enthusiastic about longer opening hours but opposed to restricting their own use of new rules - Cartel office reviews Lufthansa ticket prices on domestic flights SUEDDEUTSCHE ZEITUNG - Moscow to intensify talks on eastward extension of NATO - Defence Minister Ruehe can imagine German armoured infantry in Bosnia mission - Agriculture Minister Borchert insists reform process is under way - Bundesbank board member Jochimsen says one percent growth is possible in 1996 - Santer doubtful that German contribution to EU budget will be lower after 1999 DIE WELT - EU Commissioner gives Bonn until Wednesday to make move on VW subsidy row - Christian Democrats urged opposition SPD and Greens to reject cooperation with reform communists - 210,000 visit home electronics trade fair - Waigel wants to cut top tax rate to 40 percent - Every third VW coming off production line has defects -- Bonn Newsroom +49 228 2609760 7456 !GCAT !GPOL !GVIO Russian Prime Minister Viktor Chernomyrdin on Monday backed a deal to end the 20-month Chechen war brokered by peace envoy Alexander Lebed and was due later to brief President Boris Yeltsin on the agreement. But there was no sign yet of a meeting between security chief Lebed and Yeltsin, whose spokesman again reassured the world that the president was well. Kremlin press service chief Igor Ignatyev said Yeltsin was in brisk mood during his vacation and he would meet Chernomyrdin at his holiday home on Monday to discuss the Chechen peace deal. Yeltsin, who suffered two heart attacks last year, has not met Lebed since the latest peace missions and he has rarely been seen in public. The former paratroop general is Yeltsin's special envoy in breakaway Chechnya. Itar-Tass news agency quoted a Kremlin source as saying that Yeltsin had undergone a course of "preventative" treatment. Ignatyev said this had been nothing more than regular checks, but he could not give the results. On Saturday Lebed declared an end to the Chechen conflict, in which tens of thousands of people have died, after signing an agreement with rebel chief-of-staff Aslan Maskhadov. Lebed's office said Chernomyrdin had backed the agreement, which postponed for five years any decision on Chechnya's independence, the issue that lay at the heart of the war. Analysts have speculated that Lebed and Chernomyrdin have been wrangling over Chechnya to further their own careers if something happens to Yeltsin and elections are held early. As well as deferring the question of Chechnya's political status, Lebed's agreement with Maskhadov also provided for a joint commission to monitor troop withdrawals and the economic reconstruction of war-shattered Chechnya. An earlier ceasefire signed by the two men has held although some commanders in Chechnya have yet to be convinced the war is actually over. Interfax news agency quoted the head of Russian Interior Ministry forces, Anatoly Shkirko, as saying he was not ready to accept that the fighting had finished. "One would like to believe that the war was over but I seriously doubt it," Shkirko told the agency. He said the Chechens were breaking the ceasefire by leaving some 2,000 of their fighters in Grozny when only 270 were allowed to form the joint Chechen/Russian patrols which are monitoring the city. Shkirko said this had forced him to leave some of his men in the city. Tass said the separatists had installed their own regional commanders in several towns, ousting leaders installed there by the Russian-backed administration of Doku Zavgayev. Zavgayev, who is resented by the separatists as a Moscow "puppet", told Tass he expected to play an important role in a future coalition government. Other members of the government have accused Lebed of handing Chechnya over to "bandits". Separatist leader Zelimkhan Yandarbiyev said the agreement was "a serious step towards peace" but he warned of a danger coming from "the party of war" -- those in Russia who want to continue the 21-month conflict. 7457 !C12 !C13 !CCAT !GCAT !GCRIM Hong Kong's top financial watchdog and investment funds association on Monday defended as both severe and fair the the penalties meted out to securities house Jardine Fleming for flouting trading rules. Financial regulators in the British colony, which prides itself as Asia's top financial centre, also said they had no plans to bring criminal charges against the firm or Colin Armstrong, the rogue trader in the middle of the scandal. "Investigations have been concluded. We deem the fine to be fair and reasonable," a spokesman with the Securities and Futures Commission (SFC) told Reuters. Asked if there were plans to bring criminal or other charges against Armstrong or his former employer, Hong Kong-based Jardine Fleming Investment Management (JFIM), he said "no". The Hong Kong Investment Funds Association (HKIFA), an industry group, also said Jardine Fleming had been punished enough. "I think the penalty is quite severe," HKIFA chairman Andrew Lo said at a news conference. "The reprimand, compensation fund...I believe the right level of punishment has been given." A five-month investigation by London's Investment Management Regulatory Organisation (IMRO) and Hong Kong's SFC last week exposed a pattern of late allocation of trades by Armstrong, a charismatic top member of Hong Kong's fund management community. The late trades, many involving Armstrong's personal accounts, allowed Armstrong to turn to his benefit a change in the trading price to the disadvantage of funds he managed. Jardine Fleming was fined 700,000 sterling, London-based Jardine Fleming Asset Management (JFAM) lost its authorisation, and the former chief executive of JFIM and JFAM, Robert Thomas, had his United Kingdom and Hong Kong registrations revoked. Jardine Fleming, which is jointly owned by the Jardine Matheson and Robert Fleming groups, also paid clients US$19.3 million in compensation. Newpaper commentaries in the colony have blasted authorities for not placing more stringent controls over trading in financial instruments. But the HKIFA's Lo said the SFC had acted appropriately. "The SFC has done a good job...it did not hesitate to take tough action when required to do so," Lo said, adding that upholding a "clean operating environment" was the foremost task of bodies such as the HKIFA and SFC. "The assurance that the public should have is that the authority doesn't take into account whether it's a big or small company...but it is responsive and takes prompt action." 7458 !C17 !C34 !CCAT !G15 !G152 !G157 !GCAT The German government was to hold a last-ditch meeting with the European Commission in Brussels on Monday to try to avert a court battle over subsidies to carmaker Volkswagen, European Union sources said. Johannes Ludewig, state secretary at the German Economics Ministry, and European Competition Commissioner Karel Van Miert were to meet over lunch to discuss a compromise consisting mainly of freezing the funds, the sources said. Failing this, they said, the Commission would decide on Wednesday to ask the European court for an interim ruling, effectively blocking the money until a final decision on the case was taken. The government of Saxony, which is at the heart of the battle by deciding to go ahead with the payments to VW despite an EU refusal, indicated earlier it agreed with the Commission on the compromise. But this was far from having the blessing of the powerful German manufacturer, the sources added. There were no details on the compromise itself, other than discussions were still going on about how long the funds would be frozen and unspecified commitments to be given by the German authorities. The Commission allowed in late June an investment aid of 540 million marks ($364.2 million) for two VW plants in the formerly communist east German state out of a promised 780 million marks. In an unprecedented challenge of the EU's authority, Saxony announced in July it would go ahead with the payment of 141.9 million marks, part of the money declared illegal. The EU sources said Volkswagen had so far received "over 100 million marks illegal money" with more pencilled in for 1996 and the coming two years. -- Amelia Torres 322 2876841 ($ = 1.482 German Marks) 7459 !C13 !C31 !CCAT !E51 !E512 !ECAT !GCAT !GDIP An Iranian ship is expected to arrive in Libya over the next few days carrying arms and explosives in contravention of U.N. sanctions, Middle East shipping sources and Arab diplomats said on Monday. "This is in direct breach of the U.N. sanctions against Libya, imposed following the indictment of two Libyans for the destruction of Pan Am (flight) 103," a Lebanon-based diplomat told Reuters by telephone. Official Libyan or Iranian comment was not immediately available. In December 1988, a Pan American World Airways Boeing 747 crashed on the town of Lockerbie, Scotland, killing the 259 people aboard. Eleven people in Lockerbie were also killed. Investigators said Flight 103 was blown up by a bomb. They blamed two Libyan security officials, and demanded that they face trial in the West. An air travel and arms embargo was imposed for Libya's failure to hand over the suspects. Shipping sources, speaking on condition of anonymity, said the ship, the Iran Ershad, had made the long journey around South Africa's Cape of Good Hope on its way to Libya rather than the normal, much shorter route through the Suez Canal. "This avoided the customary and thorough inspection of the ship's papers and cargo by Egyptian port authorities (who control the canal)," one source said. The freighter was expected to dock in Tripoli sometime this week, he added. The sources said the same vessel transited from Tripoli to Bandar Abbas in 1981, again using the Cape route. Last year, they added, the Ershad was used as part of an attempt to ship two oil rigs from Iran to Serbia in violation of U.N. sanctions against Belgrade for its role in the 43-month Bosnian conflict. The sources said they did not know if the oil rigs ever reached Serbia, but on March 14 Belgian authorities intercepted explosives and weapons, including a mortar, on board another Iranian vessel, the Iran Kolhadooz, at Antwerp. "We believe Iran has been transporting light weapons and ammunition through Kuwait to oppositionist groups in Saudi Arabia and other Gulf states," the diplomat said. He did not give details. In June, a truck bomb killed 19 Americans and wounded about 400 people at the al-Khobar military complex in Saudi Arabia, but so far, diplomats and analysts say, there is no evidence of foreign involvement in the attack. The sources said they had no details of the arms the Iran Ershad is alleged to be carrying to Libya. The United States has accused Libyan leader Muammar Gaddafi of building an underground chemical weapons plant, a charge Tripoli denies. Sanctions against both Libya and Iran were tightened a month ago by U.S. President Bill Clinton, who signed a law penalising non-U.S. firms that invest $40 million or more a year in the oil and gas sectors of the two states. 7460 !E12 !ECAT !G15 !G154 !GCAT !M13 !M131 !M132 !MCAT The Bank of England (BoE) said on Monday it has formed a working group of market practitioners and British officials to discuss issues for the gilt market under European economic and monetary union (EMU). "This forms part of the Bank's efforts to ensure the practical issues arising from a single currency, whether the UK is "in" or "out", are fullly understood and appropriate action taken," a BOE official told Reuters. The official's comments follow an article in the Financial Times on Monday, which noted the group's formation and said the BOE was looking at various market conventions. The BOE official said the group, which is due to meet on Friday, would be known as the "Working Group on Practical Issues for the Gilt Market after EMU". It will include around 15 members, ranging from BoE and British Treasury officials to industry figures to market practitioners, the BoE official said. The BoE said separately it was due to publish its second quarterly paper on practical issues surrounding EMU in around two weeks. -- London Newsroom +44 171 542 6784 7461 !GCAT !GDIP !GVIO By Nicholas Doughty, Diplomatic Correspondent Despite talks of Western action against Iraq, the United States and its allies may be limited in what they can really do about Saddam Hussein's latest gambit. Diplomats say the Iraqi leader, who gambled and lost over his decision to invade Kuwait six years ago, is rolling the dice again with his attack on the Kurdish stronghold of Arbil in nothern Iraq. This time, the odds could be more in his favour. Western divisions over what should be done, the lack of a clear legal U.N. basis for military action and wider concerns about stability in the Gulf and the Middle East are all factors. The United States is beefing up its air power in the region and diplomats say Britain and France may follow suit, sending a warning to the Iraqi leader. The United Nations has delayed implementation of a planned oil-for-food deal with Iraq. "We don't want Saddam to think he can get away with anything but we have to proceed very cautiously," said one European diplomat. "I think the chances of military action are limited unless Saddam presses on with more attacks." So far, the signs are that Iraqi forces are pulling out of Arbil after helping one Kurdish faction to take it from another group. There are frantic diplomatic consultations between Western capitals, but no sign of real action as yet. "The West is behaving cautiously. It's fraught with difficulties," said Rosemary Hollis of London's Royal Institute for International Affairs (RIIA). U.S. and Western officials, while taking care to say that no options have been ruled out, are playing down expectations of immediate strikes to punish Saddam. Iraq is already crippled by U.N. sanctions imposed after the Gulf War. For U.S. President Bill Clinton, Saddam's action is a major foreign policy challenge just weeks before the November presidential election. Republican challenger Bob Dole has already accused Clinton of weakness and vacillation on Iraq. A tough response in the form of air or missile strikes could go down well with voters, if there are no U.S. casualties. But any attack on Iraq risks strengthening the hand of Iran, Washington's sworn enemy. Western allies are already worried by signs of unrest in Bahrain, Saudi Arabia and elsewhere in the Gulf, the world's major oil-producing region. Moreover, military action could cause Clinton real trouble with allies and partners in NATO and at the United Nations. Russia and Jordan, the latter a key player in the Middle East peace process, both called for restraint on Monday. NATO member Turkey, fearing another mass influx of refugee Kurds from northern Iraq, said on Monday it would ask the United Nations and its allies not to delay the plan under which Iraq can sell some oil in exchange for food for its people. The United States has led attempts to try and bring together rival Kurdish clans in northern Iraq so that they could mount an effective challenge to Baghdad's authority. But diplomats say the fact that one of the major groups, the Kurdistan Democratic Party (KDP), asked for support from Baghdad for the attack on Arbil shows that this remains a dream. The Iraqi attack also shows the world that Saddam remains in control in a country where the opposition is weak and divided, despite frequent reports of challenges to his authority. Western air strikes, some diplomats say, would therefore simply cause Saddam to crack down harder at home. Tougher Western measures are certainly ruled out since Washington and its allies have never been willing to oust Saddam, one reason why they did not move on to occupy Baghdad after defeating Iraqi forces in the 1991 Gulf War. Instead, they have sought to contain his power and provide short-term aid to the Kurds, mindful of the need for stability in the Gulf and with a wary eye on Iran. With the Middle East peace process at a sensitive stage, diplomats say Western military action against an Arab nation -- even one as isolated as Iraq -- could be counterproductive. There are other concerns, too, about whether there is any basis for Western military action in existing U.N. resolutions. France has said pointedly that it respects Iraq's sovereignty. When Turkey sent troops into northern Iraq last year to attack Kurdish bases, Paris was highly critical. "The French feel that we cannot have a situation where the Turks are allowed to go rampaging into Iraq, across an international border, and then we punish Iraq for doing the same within its own borders," said another European diplomat. 7462 !C13 !C22 !CCAT !GCAT !GDEF Europe's four nation consortium building the controversial Eurofighter combat aircraft called Britain's decision on Monday to proceed to the production stage and buy 232 planes a huge vote of confidence. "We have got a little way to go in terms of getting the other governments to support (the production contract)...but I still think it's a colossal vote of confidence," John Weston, chairman of British Aerospace's defence arm, told reporters at the Farnborough air show. "We would emphasise that Eurofighter will ensure that the European aerospace industry remains at the forefront of technology," he added. As the show opened this morning, Britain announced it was confirming its commitment to press on towards a production investment contract which would allow BAe and its partners Daimler Aerospace, Alenia SpA of Italy and Spain's CASA to gear up for manufacturing planes for service. The industrial partners hope to sign a four-way Memorandum of Understanding with the governments by the end of the year. The three other governments are preparing the final paperwork to allow the parallel processes to be finalised, and spokesmen for the other member companies said they were confident it would be done by the year end. Although the German parliament has yet to give its final approval to a Luftwaffe order for 180 planes, Bill McNaughton, Eurofighter's managing director, said that the company was encouraged by the fact that a pricing decision is ready. "We don't anticipate any problems (in Germany)," he said. Executives said they were confident that the development and outline production programmes are coming together on plan and with minimal cost variance from the planned levels. Weston said he was sure that, after a radical streamlining of the group's production plans, construction times would be cut to a level where it would be possible to deliver Eurofighter to its first customer, Britain's RAF, in 2001. He added that the price would be "more competitive" than the Tornado, the three-nation fighter-bomber which the new warplane is set to replace in the UK. In the world market, he added, Eurofighter would be able to produce its plane "in broad terms at about the same cost" as the McDonnell Douglas F-18, its closest current rival. However, Eurofighter is claiming its aircraft has two and a half times the combat capability of such planes. Consortium officials have said they believe there will be an export market of 300 to 400 aircraft one to two years after the first deliveries to its sponsor governments. In the first years of next century Eurofighter's likely competitors should include France's Rafale, being developed by Dassault, Saab AB's Gripen, the developing F-22 from U.S. giants Lockheed and Boeing Co, as well as Russian aircraft. -- Farnborough newsroom +44 1252 519141 7463 !C22 !CCAT !GCAT !GDEF Britain on Monday launched its largest ever air show by giving its go-ahead for production of the four-nation Eurofighter 2000 fighter aircraft. The 40 billion pound ($60 billion) fighter, delayed several years by technical problems and political wrangling, is to be the star of the Farnborough air show where it will be put through its paces before the world's leading aircraft manufacturers and buyers. As the show was launched at this southern English airfield, British Defence Minister Michael Portillo announced that Britain is to go ahead with the purchase of 232 of the planes, opening the way for the production programme to start. "Britain is now ready to commit to production of this Eurofighter. We want to buy initially 232 of them," he said. The single-seat, twin-engined fighter, which is being developed by Britain, Germany, Italy and Spain, costs around 12 billion pounds to develop of which Britain bears one third. But now the four industrial partners need their governments to invest another 30 billion pounds on the production programme. The companies have said they need the sponsor governments to give a commitment to buy the aircraft by early next year in order to get the first planes delivered by the year 2001. Due to the delays, Portillo had contemplated leasing or buying some U.S. F-16 fighters either as a stop-gap or even as an alternative to Eurofighter. But today's announcement firmly rules out the American option. "We have compared this fighter to the alternatives we could afford. We could afford American," Portillo said. "I don't think in the end we would have saved much money. I certainly don't think we would have got the same product...and we certainly would not have done as much for Britain." The Eurofighter consortium of British Aerospace, Daimler Aerospace, Italy's Alenia and Casa of Spain, wants a firm memorandum of understanding from their governments to buy the plane by the end of this year so they can set up production lines for the estimated 620 aircraft required. Portillo's statement was welcomed by British Aerospace. "The statement on the Production Investment programme will, I hope, give our friends in Germany, Italy and Spain some indication of the commitment by the UK on this programme," chief executive Sir Richard Evans told reporters at the airshow. Following the resolution earlier this year of a bitter Anglo -German row over worksharing, British industry is to get 37 percent of the production programme followed by Germany with 30 percent and the rest to be shared out between Italy and Spain. The first aircraft are due to be delivered to Britain's air force in 2001 so that it can enter service the following year, replacing the Tornado and Jaguar. The biennial air show has attracted a record 1,164 exhibitors from 60 nations. Defence companies can expect a real dogfight battling for orders in the sharply reduced post-Cold War market but civil aviation is booming. Both have developed into a Transatlantic battle with the American giant Boeing Co pitched against Europe's four-nation Airbus Industrie group. In the new "superjumbo jet" market, Boeing wants to trump Airbus by announcing plans for a new version of its B-747 jet. Airbus is going head to head with Boeing with its own 500 plus seater A3XX. The current advantage for Boeing is that its 747-600X could be ready for first deliveries by the year 2000 if it can get launch orders confirmed by the end of this year. Airbus has said its A3XX would not be ready before 2003. ($1=.6420 Pound) 7464 !E51 !E512 !ECAT !GCAT !GDIP !GVIO !M14 !M143 !MCAT World oil prices bolted higher on Monday after the United Nations put on hold an Iraqi oil-for-food exchange in response to Baghdad's military incursion into its northern Kurdish region. October futures for international benchmark North Sea Brent blend were trading up 92 cents at $21.70 a barrel shortly after markets opened in London. U.N. Secretary General Boutros Boutros Ghali said on Sunday he would respond to Iraq's military move into Iraqi Kurdistan by delaying the deployment of U.N. personnel to supervise aid distribution under the oil exchange plan. Oil traders had been expecting Iraq's first oil sales for six years since the Gulf War to hit markets in the next few weeks. Iraq massed 30,000 to 40,000 troops in its northern Kurdish provinces and captured the city of Arbil at the weekend, expelling one Kurdish factor and installing a rival group. By Monday Iraqi troops, along with heavy armour and artillery, were reported by U.N. personnel to have evacuated the Iraqi Kurdistan capital. But Turkey, which provides a pipeline link for Iraqi oil exports, said it expected to see the first Iraqi oil sales that had been expected later this month to be delayed "for some time." "The question may be not when will Iraqi oil sales start but whether they will start," said energy analyst Geoff Pyne at Swiss finance house UBS. "This is a real kick for the markets," said Oystein Berentsen, international crude trading manager for Norway's Statoil. "With demand so strong and oil stocks so low the market was looking as if it could quite easily have absorbed some Iraqi exports." The Kurdish Democratic Party invited Iraqi President Saddam Hussein to intervene in the Kurdish-ruled region after it said the rival Patriotic Union of Kurdistan received backing from Iran in recent fighting. Iran denies any involvement. The U.N. oil-for-food deal would allow Iraq to sell $2 billion worth of oil over six months to purchase food, medicine and other goods for its people suffering sanctions imposed after Iraq invaded Kuwait in August 1990. The deal signed on May 20 and renewable every six months under a U.N. review, was expected to supply tight world markets with about an extra 550,000 barrels a day (bpd) of crude at current prices. Under the U.N. plan, dozens of monitors must be deployed across Iraq to make sure aid is fairly distributed among rebel populations. An advance team to make arrangements for the oil monitors arrived in Baghdad late last week and 14 monitors from Dutch-based Saybolt had been expected to travel this week. Further delays to the oil sale agreement come at a time when oil prices already are running some $4 higher than at the same time last year. Low stocks of heating oil and diesel (distillates) in Europe and the United States helped drive European heating oil futures on Monday to five-year highs. London gas oil futures were trading up $7 at $204 a tonne. A strong demand outlook for industrialised consumer countries and a delay in some new North Sea oilfield projects have added to the bullish market sentiment. "We can't expect Iraqi oil in the near future and distillate demand is still there for the winter," said Alastair Harris at brokers Mees Pierson Derivatives in London. 7465 !GCAT !GDIP !GPOL Israeli and PLO negotiators searched on Monday for an elusive peace formula that would open the way for a first meeting between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Yasser Arafat. "The two leaders will not meet today because negotiators are still engaged in talks to prepare for the meeting," Mahmoud Abbas, better known as Abu Mazen, told Reuters, dampening speculation of an imminent summit. "There will be another meeting tonight to try to finalise a joint document," he said. Abu Mazen spoke after the latest round of talks in Tel Aviv between the PLO's Saeb Erekat and Dore Gold, an aide to Netanyahu. They were to reconvene later on Monday. Egypt, trying to pile up the pressure on Netanyahu, gave Israel three weeks to start implementing the PLO-Israel peace deals or face cancellation of a Middle East economic conference planned for Cairo in November. Egyptian Ambassador to Israel Mohammed Bassiouny told reporters: "The Egyptian government has given the Israeli government three weeks to start implementing five points Israel was committed to and did not implement. Otherwise the economic conference will not be held. "The five points that Israel must implement are redeployment from Hebron, further redeployments from the West Bank, opening safe passages between Gaza and the West Bank, release of all women prisoners and lifting the closure completely," Bassiouny said. "We don't want promises, we need actions," he said. Netanyahu's office said in reaction: "The Egyptian pronouncement constitutes an unfortunate threat which can only exacerbate tensions in the region". Abu Mazen said the Israeli and PLO negotiators were working on a joint formula for the full-fledged resumption of peace talks, an agreement that could be followed "within hours" by a meeting between Netanyahu and Arafat. Another PLO official said the Palestinians were seeking a clear commitment from Netanyahu to implement all outstanding issues in the peace deals, such as Israeli troop redeployment from Hebron and other parts of the West Bank. "It was a real battle," the official said about the Erekat-Gold meeting. Israel, he said, proposed to divert to committees for further negotiation issues already agreed in past pacts signed by previous Labour governments. "We asked for reassurances this government would honour the agreements, implement them and not seek to fragment them," the official, who asked not be identified, said. "We expect them to respond in tonight's meeting." Palestinians have been pressing Israel to carry out a partial troop pullout from Hebron, delayed since Moslem suicide bombers killed 59 people in the Jewish state in February and March. Other Palestinian demands include the release of about two dozen Palestinian women prisoners held by Israel and implementation of further Israeli redeployment from the West Bank that had originally been slated to begin on September 7. A Netanyahu spokesman said Israel's talks strategy team -- Netanyahu, Foreign Minister David Levy and Defence Minister Yitzhak Mordechai -- was meeting in Jerusalem on Monday afternoon. Netanyahu was elected in May, pledging not to trade occupied Arab land for peace. He has resisted meeting Arafat, saying originally he would do so only out of Israeli security concerns. The Israeli prime minister softened his position last week after Israeli President Ezer Weizman put him on the spot by saying he himself would meet Arafat. 7466 !GCAT !GDIP !GVIO U.N. officials said Iraqi troops had withdrawn from the capital of Iraqi Kurdistan on Monday, two days after installing their Kurdish allies, but opponents of Iraqi President Saddam Hussein reported executions in the streets. There was no immediate reaction from the United States, where President Bill Clinton had conferred with U.S. allies on how to respond to Iraq's surprise capture of Arbil on Saturday. "All Iraqis have left Arbil. We cannot see any more tanks or vehicles or artillery. They are about five km (three miles) away now," one U.N. official in Arbil told Reuters by telephone. In Ankara, Turkish Foreign Minister Tansu Ciller also said Baghdad's troops had left: "I know that as of today Saddam's forces have withdrawn and that this order has been given. We are pleased about this." The U.N. official in Arbil spoke hours after Saddam ordered his forces to withdraw following two days of fighting. But an Iraqi Kurdish group said Baghdad's troops remained and were carrying out mass executions. "It is not true," Patriotic Union of Kurdistan (PUK) Ankara representative Shazad Saib said when asked if Iraqi troops had left Arbil, captured in a joint assault with the Kurdistan Democratic Party (KDP), the PUK's rival. "(Iraqi troops) have committed mass executions in Arbil itself of PUK members -- some of them have been executed in the streets. A few hundred have been killed. Many hundreds have been arrested," Saib told Reuters. He said the KDP was guiding Iraqi troops going door to door armed with lists to find people opposed to Saddam's government. There was no confirmation of the PUK report. Reuters reporters in northern Iraq were prevented by KDP members from reaching Arbil. Despite the reports of an Iraqi pullout and uncertainty over Saddam's intentions, the attack on an area outside Saddam's control since the Gulf War had continuing repercussions. U.N. Secretary-General Boutros Boutros-Ghali, saying he was "very much concerned about the deterioration" announced on Sunday, said he was delaying the start of an oil-for-food deal with Baghdad. Crude oil prices rose sharply in Asian trading on Monday in reaction. Oil had been expected to start flowing onto world markets in September. Turkish officials, hoping to resume the trade blocked since 1990, said Ankara would appeal to the United Nations and its Western allies to prevent any delay. The plan would let Iraq sell $2 billion of oil over six months to buy humanitarian supplies to ease suffering from sanctions imposed after Iraq invaded Kuwait in 1990. Clinton placed U.S. forces in the region on high alert. General John Shalikashvili, chairman of the joint chiefs of staff, and Assistant Secretary of State Robert Pelletreau were touring regional capitals before leaving for Washington from Cairo late on Monday. But Jordan said it would give no assistance in military action against Iraq. White House spokesman Mike McCurry said: "There is no justification for the military action Saddam Hussein has taken...The United States believes that he cannot conduct himself with impunity, that there should be consequences." With the U.S. presidential election only two months away, Republican candidate Bob Dole said on Sunday that "Saddam Hussein has been testing American leadership and found it lacking." Washington said U.N. Security Council resolutions approved after the 1991 Gulf War gave a legal basis for responding, but officials admitted Saddam had the right to move troops within that part of his own country. Arbil was not in a zone placed off-limits to Iraqi troops by the United Nations after the Gulf War to protect the Kurds. But U.S. officials said it was within the "no-fly zone" and U.N. resolutions protecting Kurds against repression applied. Fighting between the two Kurdish factions -- longtime rivals who have shifted alliances between Iraq and Iran -- flared in mid-August despite U.S. efforts to broker a ceasefire. A senior KDP member, Sami Abderrahman, said the KDP under the leadership of Massoud Barzani looked to Saddam for support after the PUK gained backing from Iran -- an allegation denied by Iran. PUK leader Jalal Talabani warned of a split into pro-Iraq and pro-Iran regions and hinted at seeking Iranian support if Washington and its allies did not respond. 7467 !E51 !E512 !ECAT !GCAT !GDIP !GPOL Egypt on Monday gave Israel three weeks to start implementing PLO-Israel peace deals or face cancellation of a Middle East economic conference planned for Egypt in November. Israel said the ultimatum was an "unfortunate threat". Egyptian Ambassador to Israel Mohammed Bassiouny told reporters: "The Egyptian government has given the Israeli government three weeks to start implementing five points Israel was committed to and did not implement. Otherwise the economic conference will not be held." "The five points that Israel must implement are redeployment from Hebron, further redeployments from the West Bank, opening safe passages between Gaza and the West Bank, release of all women prisoners and lifting the closure completely," Bassiouny said. "We don't want promises, we need actions," he said. Israeli Prime Minister Benjamin Netanyahu's office said in reaction: "The Egyptian pronouncement constitutes an unfortunate threat which can only exacerbate tensions in the region". An Israeli government official who spoke on condition he not be named said: "The Egyptians need this conference more than we do." Israel agreed to four of the five points in interim peace agreements signed by its previous centre-left government with the Palestine Liberation Organisation (PLO) that set up and expanded self-rule in the West Bank and Gaza Strip. The closure, which bans entry to Israel of thousands of Palestinian labourers, was imposed in March after the first of four Islamic militant suicide bombings that killed 59 people in Israel. Palestinians label the closure collective punishment. It has devastated the Palestinian economy. Netanyahu, who ousted Nobel Peace Prize laureate Shimon Peres in May elections, has yet to implement outstanding issues in the peace accords. He says the closure can only be adjusted if security conditions warrant. Egyptian President Hosni Mubarak has tried to use the conference on regional economic integration, greatly desired by Israel, to pressure Netanyahu to honour the previous government's commitments. Egyptian Foreign Minister Amr Moussa said on Sunday the conference could not possibly take place until Israel at least redeployed its troops in the West Bank town of Hebron. "It is impossible to imagine that we can talk about regional cooperation when the peace process is obstructed or paralysed. It would be illogical, out of the question," Moussa added. Palestinians view the redeployment in Hebron, the only Palestinian city with Jews living in it, as a litmus test for Netanyahu's intentions on Middle East peace moves. Egyptian civil servants are pressing on with preparations for the conference despite the threat to cancel it. Diplomats in Cairo have said there was too much at stake for Egypt's own economic aspirations to take lightly a decision to postpone or cancel the conference, the third of its kind since Israel and the Palestinians began to make peace in 1993. 7468 !GCAT !GDIP !GVIO Turkey's Kurdish rebel leader threatened on Monday to intervene in fighting between two rival Iraqi Kurdish factions in northern Iraq. Abdullah Ocalan, leader of the Kurdistan Workers Party (PKK) which is fighting for self-rule in southeast Turkey and has bases in northern Iraq, warned an Iraqi Kurdish group newly allied to Baghdad's forces not to execute its prisoners. "I will warn (Kurdistan Democratic Party leader Massoud) Barzani, he definitely must not do anything to the captives...If he massacres them we will join in the fighting front," Ocalan was quoted by the pro-Kurdish DEM news agency as saying. "Barzani must finish with the minimum damage," said Ocalan whose 12-year war with the Turkish military has cost more than 20,000 lives. Combined forces of Barzani's KDP and Iraqi troops captured the town of Arbil, the administrative centre of the Kurdish north of Iraq, from the Patriotic Union of Kurdistan (PUK) in an assault on Saturday. PUK and Iraqi opposition spokesmen have said the Iraqi secret service has killed and arrested hundreds of their people in Arbil. Ocalan said the KDP held senior PUK members, as well as the wife of its leader, Jalal Talabani. Turkey has accused Talabani of being close to the PKK, but PUK officials have denied this. Ocalan also criticised Talabani for calling on the West to help him against the joint attack on Arbil. "He has pursued a diplomacy reliant on the West for years. This diplomacy he trusted so much unfortunately made his valuable wife a prisoner," Ocalan said, adding that he had cautioned Talabani recently to change his line or face destruction. Talabani warned at the weekend that if Washington and its allies did not intervene he would be forced to turn to "anyone who is ready to help us", in a broad hint that his group would look to Iran. 7469 !GCAT !GDIP !GVIO Two senior U.S. envoys arrived in Egypt on Monday on a stopover during a regional tour related to the Iraqi crisis. General John Shalikashvili, chairman of the joint chiefs of staff, and assistant secretary of state Robert Pelletreau arrived from Jordan and will probably leave for Washington later in the day, a U.S. embassy spokesman said. Airport sources earlier said they had flown in from Izmir in Turkey. The envoys, who have also visited Saudi Arabia, had lunch with the Egyptian military and might meet Egyptian President Hosni Mubarak in the Mediterranean city of Alexandria. Iraqi troops backed by armour and artillery intervened on Saturday on the side of the Kurdistan Democratic Party (KDP) to capture the main Kurdish city of Arbil from the rival Patriotic Union of Kurdistan (PUK). Arbil is 20 km (12 miles) north of the 36th parallel, the air-exclusion zone set by a U.S.-led airforce to protect the Kurds after the Gulf War in 1991. Egyptian Foreign Minister Amr Moussa has called for an end to the bloodshed in Iraqi Kurdistan and respect for Iraqi sovereign and territorial integrity. In Amman King Hussein of Jordan told Shalikashvili that outside parties should not intervene in Iraq's affairs in response to Baghdad's military incursion into Kurdish-held northern Iraq. The king told him no "party or force should be allowed to make use of the extraordinary situation in Iraq to intervene in its affairs," the state-run news agency Petra said. He also told the U.S. General that Jordan supported "the brethren Iraqi people and its (Iraq's) legitimate sovereignty rights over its territory," as well as the need to protect Iraq's independence. 7470 !E51 !E512 !ECAT !GCAT !GDIP !GVIO Turkey will appeal to the United Nations and its Western allies to reverse a U.N. decision to delay a $2 billion oil-for-food plan for Iraq after fighting in the country's Kurdish north, officials said on Monday. "We will hold appeals to the United Nations and to our allies to stop this," said a senior government official, who declined to be named. "We cannot pay the price of the developments in northern Iraq," he told Reuters. The U.N. Secretary-General Boutros Boutros Ghali said on Sunday that he would delay implementing the oil-for-food plan for Iraq on concerns of safety of U.N. oil monitors because of the deteriorating situation in northern Iraq. According to U.S. officials, Iraq amassed up to 40,000 troops over the weekend in northern Iraq and captured the city of Arbil, expelling one Kurdish faction and installing a rival group more favourable to Baghdad. Earlier on Monday, Turkish Energy Minister Recai Kutan said he expected a delay "for sometime" in the flow of Iraqi oil through a trans-Turkish pipeline under the U.N. deal. "I think the oil flow will be delayed for sometime. But we will make efforts that it is flowed by September 15, as we expected earlier," he told Reuters. "We are in liaison with the foreign ministry but the picture in the northern Iraq is not clear yet," he said. The government official said Turkey was opposed "to an indefinite delay of the plan". "We are aware that things are not in our control but we will do our best to have the implementation of the (Iraqi oil) sales realised without delay," he said. Officials said Turkey had lost some $25 billion in overall trade with Iraq since the U.N. sanctions were in place after its invasion of Kuwait in August 1990. Iraq was Turkey's top oil supplier and third largest trade partner before the Gulf crisis. Turkish food and medicine companies have sent several missions to Iraq since June to win the lion's share of Iraq's food and medicine purchases, worth about $1.3 billion under the U.N. deal. The United Nations decided last week to delay a formal Turkish request that Ankara be given permission under the U.N. Charter 50 to help it recoup trade losses in a similar manner to Iraq's neighbour Jordan. The government official did not say when Turkey would take its appeal to the United Nations and its allies -- the United States, Britain and France -- in the Security Council. Foreign Minister Tansu Ciller said on Sunday before Ghali's decision that the United Nations should not change the timing of the oil-for-food plan. The U.N. oil-for-food plan, agreed on May 20, allows Iraq to sell oil worth $2 billion over six months to buy food and medicine for its people suffering under sanctions since it invaded Kuwait in 1990. Iraq would sell more than half of its oil through the 986-km (616-mile) Turkish pipeline, shut down in 1990 as part of the U.N. embargo on Iraq. Turkey has repeatedly said the oil would flow through the pipeline by September 15. 7471 !GCAT !GDIP !GVIO King Hussein of Jordan told General John Shalikashvili, chairman of the U.S. Joint Chiefs of Staff, on Monday that outside parties should not intervene in Iraq's affairs in response to Baghdad's military incursion into Kurdish-held northern Iraq. The king told him no "party or force should be allowed to make use of the extraordinary situation in Iraq to intervene in its affairs," the state-run news agency Petra said. He also told the U.S. General that Jordan supported "the brethren Iraqi people and its (Iraq's) legitimate sovereignty rights over its territory," as well as the need to protect Iraq's independence. Shalikashvili, who flew into Jordan's Red Sea port city of Aqaba from Riyadh, briefed the monarch on the outcome of his talks in Saudi Arabia, the main base for U.S. forces in the region since the 1990-91 Gulf crisis. They have been put on high alert since Iraqi President Saddam Hussein sent his forces into Kurdish-held territories in northern Iraq on Saturday. Shalikashvili later flew to Cairo. Earlier, Jordan's information minister Marwan Muasher told reporters Amman would not join any military response to Saddam's incursion and would not be a base for any military action against Iraq. "Jordan will not be used as a base, that has been a longtime position...We are not involved and we will not be involved in any effort involving a military operation," he said. He said a report carried by the U.S. network CNN that additional U.S. troops would be sent to Jordan was "totally and catagorically untrue." He said he was unaware of any request for U.S. deployment in Jordan, which has repeatedly expressed its opposition to the division of Iraq into three states including a Kurdish one in the north and a Moslem Shi'ite one in the south. Muasher said Jordan was concerned about the Iranian role in northern Iraq, saying it had long warned of the dangers of foreign intervention in Baghdad's internal affairs that threatened Iraq's unity. U.S. servicemen ended three months of exercises in Jordan in June. Muasher said all the U.S. servicemen had left Jordan at the end of June. "This was totally different," he said. "It was not a military operation." Jordan, Iraq's main link with the outside world since U.N. sanctions were imposed on Baghdad after its August 1990 invasion of Kuwait, fears any violence in Iraq might harm Jordan. However relations between Iraq and Jordan deteriorated after King Hussein gave sanctuary to two senior Iraqi defectors in August 1995 and called for change in Baghdad. 7472 !GCAT !GPOL !GVOTE Billionaire Prime Minister Rafik al-Hariri and his supporters won a crushing victory in the third round of Lebanon's parliamentary elections, winning 14 of Beirut's 19 seats according to unofficial results on Monday. Hariri's opponents won only five seats between them in Sunday's vote in the capital, according to government officials who said vote-counting had been completed and official results would be announced shortly. The turnout among Beirut's 377,000 eligible voters was 31 percent, officials said, even lower than in the previous two rounds of voting in Mount Lebanon and north Lebanon where turnout was 45 percent and 40 percent respectively. The vote was marred by charges of a host of electoral violations -- including bribery of voters by Hariri supporters witnessed by a reporter -- and threats of formal protests. Hariri's main rival, Sunni Moslem ex-premier Selim Hoss was elected with only one other member of his 13-man list, the officials said. Two of his supporters lost their Beirut seats and the result weakened his position in parliament. However, radical Christian deputy Najah Wakim, who has often accused Hariri and the pro-Syrian government he leads of corruption, was elected. Wakim was the only member of the outgoing parliament who acted as a watchdog, keeping a close eye on the government's actions and issuing a relentless stream of criticism and commentary on its behaviour. The other two successful candidates were independent Tamam Salam, son of a former prime minister and head of the Makassed, a big Sunni Moslem philanthropic organisation, and a Maronite Christian belonging to the Syrian National Social Party (SNSP). Moslem fundamentalists suffered a new setback after losses they suffered in the earlier rounds, the officials said. The candidates of the pro-Iranian Hizbollah (Party of God) and the Sunni Moslem Gama'a Islamiyeh (Moslem Group), which cooperated in parliament, both failed to win election. The candidate of Ahbash, a pro-Syrian Sunni fundamentalist group, also lost. Hizbollah has so far failed to win a seat in parliament after the first three rounds of the five-stage election. It has lost two of the eight seats it won at the last election in 1992 but is likely to win seats when south Lebanon votes next Sunday. Gama'a Islamiye has retained only one of its three seats and appears unlikely to win any more seats. 7473 !GCAT !GPOL Israeli Prime Minister Benjamin Netanyahu and Palestinian President Yasser Arafat could hold a landmark meeting on Monday if talks between their negotiators are successful, an authoritative source said. "They have bridged some gaps and if they finalise arrangements this morning, the meeting might even be today," the source told Reuters. Asked to confirm the report, Netanyahu's office said: "No meeting has been set at the moment and we have no additional information." Arafat told reporters in self-rule Gaza he was not certain when the meeting would take place. "There have been meetings...between Saeb Erekat and Dore Gold yesterday and today but until now we have not reached common ground. We hope to reach common ground," Arafat said. Erekat is head of the Palestinian negotiating team. Gold is Netanyahu's political adviser. The source said talks between the two sides that went into the early hours of Monday in a Tel Aviv apartment under the auspices of U.N. special envoy Terje Larsen were to resume at 1000 GMT at an undisclosed location. It was not immediately possible to confirm that the meeting had begun. A Netanyahu spokesman said Israel's talks strategy team -- Netanyahu, Foreign Minister David Levy and Defence Minister Yitzhak Mordechai -- was meeting in Jerusalem on Monday afternoon. Netanyahu was elected in May. Last week, Israeli-PLO relations sank to their lowest point since he took office. Arafat launched a general strike in the West Bank and Gaza Strip on Thursday after saying Netanyahu's decision to expand Jewish settlements in the Israeli-occupied West Bank was tantamount to a declaration of war on the Palestinians. The source said Gold and Erekat were trying to draft a joint communique which would pave the way for an Arafat-Netanyahu meeting immediately after. He said conceptual rather than procedural differences divided the two sides. A PLO official told Reuters that Arafat had discussed the draft communique with senior officials and proposed amendments. Another PLO official said Palestinians rejected Netanyahu's intention to renegotiate a deal on a redeployment of Israeli troops in the West Bank town of Hebron agreed to by Israel's previous government. They demanded he move on all aspects of the peace deals. "We want a clear commitment from Netanyahu that he will implement the Oslo accords. We are arguing with the Israelis over their choice of words in the communique which shows they want to negotiate a new agreement," one PLO official said. He said Palestinians would not rush the issue: "We are not in a hurry. We will continue to negotiate until we get results." Netanyahu, elected on a platform of getting tough in peace talks, has resisted meeting Arafat, saying he would do so only out of Israeli security concerns. A meeting with Netanyahu is important for Arafat, who risked his political life on the peace deal which Palestinians say has not yet delivered results. But meeting Arafat poses a dilemma for Netanyahu, who is caught between the right-wing constituency that elected him and Arab and international pressure to advance peace moves. A PLO official said the Palestinians had submitted a paper to the Israeli side demanding a halt to Jewish settlement, land confiscation and house demolitions in Arab East Jerusalem and West Bank areas still under Israeli security control. The official said the paper also demanded immediate resumption of final-status peace talks last held before Israel's May 29 elections. 7474 !C13 !C31 !C312 !CCAT !E51 !E512 !ECAT !GCAT !GDIP !GVIO Turkey will appeal to the United Nations and its Western allies to cancel a U.N. decision to delay the implementation of the oil-for-food plan for Iraq because of the deteriorating situation in northern Iraq, a government official said on Monday. "We will hold appeals to the United Nations and to our allies to stop this," said the official, who declined to be named. "We cannot pay the price of the developments in northern Iraq," he told Reuters. He said Turkey was opposed "to an indefinite delay of the plan". "We are aware that things are not in our control but we will do our best to have the implementation of the (Iraqi oil) sales realised without delay," he said. He did not say when Turkey would take its appeal to the United Nations and its allies -- the United States, Britan and France -- in the Security Council. Turkey's Energy Minister Recai Kutan said earlier on Monday he expected a delay "for sometime" in the flow of Iraqi oil through a trans-Turkish pipeline under the U.N. deal because of latest incidents in the Kurdish north Iraq. "I think the oil flow will be delayed for sometime. But we will make efforts that it is flowed by September 15, as we expected earlier," he told Reuters. "We are in liaison with the foreign ministry but the picture in the northern Iraq is not clear yet," he said. U.N. Secretary-General Boutros Boutros-Ghali said on Sunday that he would delay implementing the oil-for-food plan for Iraq on concerns of safety of U.N. oil monitors because of the deteriorating situation in the north. But he did not say how long the delay could be. According to U.S. officials, Iraq amasses up to 40,000 troops over the weekend in northern Iraq and captured the city of Arbil, expelling one Kurdish faction and installing a rival group more favourable to Baghdad. Foreign Minister Tansu Ciller said before the Ghali decision on Sunday that the United Nations should not change the timing of the plan. The U.N. oil-for-food plan, agreed on May 20, allows Iraq to sell oil worth $2 billion over six months to buy food and medicine for its people suffering under sanctions in place since it invaded Kuwait in 1990. Iraq would sell more than half of its oil through the Turkish pipeline. Turkey has repeatedly said the oil would flow through the pipeline by September 15. --Ercan Ersoy, Ankara Newsroom, 90-312-4462940 7475 !GCAT !GDIP !GVIO Turkey said on Monday Baghdad's troops had left the northern Iraqi town of Arbil, which it took in a joint assault with a Kurdish faction at the weekend. "I know that as of today (President) Saddam (Hussein)'s forces have withdrawn and that this order has been given. We are pleased about this," Foreign Minister Tansu Ciller told reporters in Ankara. United Nations officials said earlier that Iraqi tanks had left Arbil, the administrative centre of the Kurdish-controlled north. But the Patriotic Union of Kurdistan (PUK) faction said Iraqi soldiers remained in Arbil and were carrying out mass executions there. "It was of course not the right approach for Iraqi forces to enter Arbil," Ciller said. Asked if Turkey there was any question of Turkey massing troops on its border with northern Iraq, where it launched a six-week incursion early last year in pursuit of its own rebel Kurds, Ciller said: "Turkey has taken the necessary measures." She did not elaborate. The foreign ministry said at the weekend Ankara would not allow a repeat of a post-Gulf War exodus of Iraqi Kurdish refugees into Turkey. An estimated two million Iraqi Kurds had crossed into southeast Turkey at the time. Ciller said Ankara had heard that Iranian troops had entered northern Iraq: "We are following-up this information. Intense diplomacy is taking place on this subject." 7476 !GCAT !GVIO Iraqi troops along with their heavy armour and artillery have evacuated Arbil, Iraqi Kurdistan's capital which they captured on Saturday, U.N. relief officials and guards said on Monday. "All Iraqis have left Arbil. We cannot see any more tanks or vehicles or artillery. They are about five km (three miles) away now," one U.N. official in Arbil told Reuters by telephone. In Ankara, Turkish Foreign Minister Tansu Ciller also said Baghdad's troops had left. "I know that as of today (President) Saddam (Hussein)'s forces have withdrawn and that this order has been given. We are pleased about this," she told reporters. But an Iraqi Kurdish group said Baghdad's troops remained and were carrying out mass executions in the streets. "It is not true," Patriotic Union of Kurdistan (PUK) Ankara representative Shazad Saib said when asked to confirm that Iraqi troops had left Arbil, captured on Saturday in a joint assault with the Kurdistan Democratic Party (KDP), the PUK's rival. "(Iraqi troops) have committed mass executions in Arbil itself of PUK members -- some of them have been executed in the streets. A few hundred have been killed. Many hundreds have been arrested," Saib told Reuters. He said the KDP was guiding the Iraqi troops who went from door to door armed with lists and rooted out people opposed to to Saddam's government. There was no confirmation of the PUK report. Reuters reporters in northern Iraq said they had been prevented by KDP members from going near Arbil. There was no immediate reaction from the United States, where President Bill Clinton had been conferring with American allies on how to respond to the Iraqi move. The U.N. official spoke just hours after Saddam ordered his forces to withdraw following two days of fighting. U.N. Secretary-General Boutros Boutros-Ghali, saying he was "very much concerned about the deterioration of the situation in northern Iraq," announced on Sunday that he was delaying implementation of an oil-for-food deal with Baghdad. The plan would allow Iraq to sell $2 billion of oil over six months to buy humanitarian supplies for people suffering under sanctions imposed after Iraq invaded Kuwait in 1990. Oil had been expected to start flowing onto world markets in September. Crude oil prices rose sharply in Asian trading on Monday in reaction to Boutro-Ghali's announcement. One U.N. official said on Monday that rebels of KDP leader Massoud Barzani were in control of Arbil and their yellow flag was flying over administrative buildings in the city. Fighting between the two Kurdish factions -- longtime rivals who have shifted alliances between Iraq and Iran -- flared in mid-August despite U.S. efforts to broker a ceasefire. Clinton has placed U.S. forces in the region on high alert and on Sunday telephoned world leaders, including British Prime Minister John Major and Saudi Arabia's King Fahd. U.S. officials said General John Shalikashvili, chairman of the joint chiefs of staff, and Assistant Secretary of State Robert Pelletreau were in Saudi Arabia for diplomatic talks. White House spokesman Mike McCurry said: "There is no justification for the military action Saddam Hussein has taken...The United States believes that he cannot conduct himself with impunity, that there should be consequences." Republican presidential candidate Bob Dole said on Sunday that "Saddam Hussein has been testing American leadership and found it lacking." He accused Clinton of relegating Iraqi affairs to "low level" officials and said it was no surprise that Saddam had ignored "barely audible" U.S. warnings. Washington said U.N. Security Council resolutions approved after the 1991 Gulf War provided the legal basis for responding, but officials admitted that Saddam had the right to move troops around within that part of his own country. The opposition Iraqi National Congress said in a statement from London that two brigades of Iraqi Republican Guard tanks were massed one km (half a mile) west of the Kurdish-held town of Chamchamal on Sunday evening. It was not clear if the tanks were to protect the eastern flank of Iraqi forces that captured Arbil or were poised to press eastward and attack Sulaimaniya, stronghold of the PUK. Arbil was not in a zone placed off-limits to Iraqi troops by the United Nations after the Gulf War to protect the Kurds. But U.S. officials said it was within the "no-fly zone" and U.N. resolutions broadly protecting Kurds against repression applied. Analysts have said that Saddam's thrust into Arbil exposed the West's inability to mould rival Kurds into an effective, modern polity that could govern the north and confront Baghdad. A senior KDP member, Sami Abderrahman, said the KDP looked to Baghdad for support after the PUK started to get backing from Iran -- an allegation denied by Iran, which fought a war with Iraq from 1980 to 1988. PUK leader Jalal Talabani told BBC radio that the region could split into pro-Iraq and pro-Iran camps and hinted that his group would look to Tehran for support if Washington and its allies did not respond to Saddam's intervention. Iran and the United States, once close allies, have been at odds since the Islamic revolution swept the Shah aside in 1979 and disagree about everything from the Middle East peace process to the post-Cold War world order. 7477 !GCAT !GCRIM !GPOL !GVIO The Palestinian self-rule Authority freed 120 supporters of the militant Islamic groups Hamas and Islamic Jihad during President Yasser Arafat's visit to the West Bank last week, PLO security sources said on Monday. Arafat visited Ramallah and Nablus from Wednesday through Sunday when he returned to the Gaza Strip self-rule enclave, his base of operations. The sources said 22 prisoners were freed from Jenin prison, 14 from Jneid, 36 from Nablus central prison, 36 from lockup in Ramallah, and 12 from jail in Bethlehem. Palestinian police rounded up some 900 Islamists in a crackdown on Hamas and Islamic Jihad after suicide bombers killed 59 people in Israel in February and March. Hamas and Islamic Jihad have led violent opposition to the interim peace deals between Israel and the Palestine Liberation Organisation (PLO) by attacking Israel. Palestinians have assailed the detentions without trial and in one case stormed a West Bank jail and released a number of men who later turned themselves in to Palestinian authorities. In recent weeks there was a trickle of releases. Palestinian sources said some 700 men rounded up in the crackdown were still behind bars. 7478 !GCAT !GDIP Egyptian Foreign Minister Amr Moussa will visit France and Norway between September 4 and 6 as part of an Egyptian diplomatic campaign to save Middle East peace talks, Egyptian officials said on Monday. Moussa may also visit Britain, under attack in Egypt because it has not prevented Islamist militants from holding a conference in London on September 8. "A visit (to London) is possible during this tour but I cannot be definite about that now," Egyptian assistant foreign minister Fathi el-Shazli told reporters. Egypt has told Israel it has to implement peace deals with the PLO if a Middle East economic conference is to go ahead in Cairo in November. One of the aims of the diplomatic campaign is to muster support for pressure on Israel to implement the pacts. 7479 !C13 !C31 !CCAT !GCAT !GCRIM !GVIO Jordan will put on trial between 30 to 50 men, many of them activists in a pro-Iraqi party, for alleged involvement in riots after the government doubled bread prices last month, a government official said on Monday. Many are members in the Jordanian Arab Socialist Baath Party (JASBP), blamed by the government for instigating Jordan's worst civil disturbances in seven years, and other activists who took part in torching and damaging public buildings and banks. A special security court will try them soon, he added. The official, who requested anonymity, said 142 of a total of 190 people detained in the unrest had been released. The JASBP, which has one seat in the 80-member lower house, denied it was behind the unrest that it blamed on government policies and rising economic hardships. The two-day trouble began in the southern city of Karak on August 16 and spread to nearby towns before reaching a poor district in Amman. Security forces quelled the unrest but tension between the Moslem-led opposition of 11 political parties and the government of Prime Minister Abdul-Karim al-Kabariti has continued. Parliamentary deputy Nazih Amareen, one of nine lawmakers representing Karak in the lower house, handed his resignation in a letter to speaker Saed Hayel al-Srour on Monday. Parliamentary sources said Amareen wanted to quit the house to protest against harsh language used against him by Kabariti during the unrest. The house will accept or reject his demand when it reconvenes for its ordinary session sometime after October 1. King Hussein dissolved parliament's summer session after the unrest and vowed an iron fist policy to return calm and order. An opposition bloc of 23 deputies, including members of the Islamic Action Front, the single largest party in the house, have also repeated long-standing demands for Kabariti's resignation. In a faxed statement they said the government had to leave office "because of the current shocking situation witnessed by our people from higher prices widening arrests and limitations on public freedoms." Kabariti said last month he had to raise bread prices to close a gaping budget deficit that threatened to undermine the next stage of an IMF economic reform plan and the vital loans it would bring. But the bread price hikes had a knock-on effect on at least 50 other food items, economists and traders said. Bread is a staple for the poor majority of Jordan's 4.2 million population, facing falling standards of living, unemployment and still awaiting promised economic dividends from the controversial 1994 peace treaty with Israel. 7480 !GCAT !GPOL Jewish settlers hailed the opening on Monday of a tunnel and bridge network bypassing Arab areas to link a West Bank settlement block to a Jewish neighbourhood in Jerusalem. "With God's help, today, the battle was finally decided, a direct connection between Gush Etzion and Jerusalem," said Shlomo Gal, regional council head of Gush Etzion in a speech at the dedication ceremony. The Gush Etzion block of settlements is in the southern West Bank, close to Israel's pre-1967 Middle East war border. Israel captured and occupied the West Bank and Gaza Strip in 1967. The new road, comprising the longest tunnels and bridge built by Israel, cuts through the occupied West Bank, burrowing under the Arab village of Beit Jala to reach the settlements. The project, at a cost of 130 million shekels ($41 million), was the most ambitious in an Israeli programme of bypass roads linking Jewish settlements and the settlements to Israel and bypassing Arab areas. Palestinians, who hope to establish an independent state in the territories, have hotly opposed the bypass road programme which has consumed large chunks of the territories and which they fear is a means of sealing them into isolated cantons impossible to unite into a state. Some 130,000 Jewish settlers live amidst nearly two million Palestinians in the territories. Dozens of Israeli peace activists protested at Monday's dedication. Israeli National Infrastructure Minister Ariel Sharon, long a champion of Jewish settlement and an opponent of Israel-PLO peace deals, referring to the protesters, said: "There were days when a new road didn't bypass problems, but solved problems...I believe if we succeed in defining clear national goals and stick to them, those great days will return and with them peace and security." The road was begun under the last right-wing Likud-led government in 1992 and continued by the centre-left Labour coalition that signed peace agreements with the Palestine Liberation Organisation (PLO) but hoped to hold settlements around Jerusalem in a final peace deal. Prime Minister Benjamin Netanyahu, of Likud, who ousted the Labour-led government in May elections, has yet to resume final status peace talks with the Palestinians begun by the previous government just before the elections. The road comprises two tunnels. One under the Jewish neighbourhood of Gilo on Jerusalem's outskirts and another under Beit Jala -- 270 and 900 metres (yards) long respectively. The bridge is 350 metres long and 50 metres high. ($1=3.1440 shekels) 7481 !GCAT !GDIP !GPOL !GVIO Saddam Hussein's tactical alliance with a Kurdish rebel faction to retake the northern city of Arbil may be the most calculated move of his many showdowns with the West, diplomats said on Monday. The Iraqi leader, a gambler with a patchy track record, has exploited a split in his Kurdish opponents, extended his influence towards the key Turkish border, and found a proxy force to police provinces he lost control of five years ago. All this while the United States, Saddam's nemesis in countless run-ins with the West since his disastrous 1990 invasion of Kuwait, struggles to find international legal grounds to confront him. "He (Saddam) doesn't have many chips to play with and sometimes he doesn't mind losing them," said one Western diplomat. "But this time maybe he's calculated that he can get away with it." Iraqi troops and tanks supporting the Kurdish rebel faction of Masoud Barzani took the northern city of Arbil on Saturday, raising the Iraqi flag and ending five years of fragile autonomy from Baghdad in a few hours of intense artillery bombardment. Iraq has not controlled its three northern provinces since Kurds rebelled against Saddam at the end of the 1991 Gulf War. The United States, Britain and France declared the area an exclusion zone and forbade Iraq to fly over it. "For Saddam, this is a domestic matter," the diplomat said. "No one in the last six years has proposed that Iraq be partitioned, so he sees that he is acting within his rights." The Arbil attack followed a series of stand-offs with UNSCOM (U.N. Special Commission) weapons inspectors which further boosted Saddam's reputation in the West for wanton confrontation. But the Iraqi leader, who led his country through eight years of ruinous war with Iran before his overwhelming defeat in the Gulf War, appears to have sound strategy behind him this time, diplomats said. "In the long term to ally himself with (Barzani's) Kurdistan Democratic Party makes sense," a diplomat familiar with northern Iraq. "It controls the border with Turkey, gets revenue from border crossings and has the best chance of local support." He said the Iraqi forces could help Barzani establish authority and then withdraw, leaving him as a proxy force to control the area where Kurds have struggled for decades to establish self-rule from Baghdad. "Saddam has no interest in staying there. The terrain is too difficult to control," he said. One diplomat said Saddam may have learned a lesson from his invasion of Kuwait, when an early or partial withdrawal by Iraqi troops from the Gulf emirate could have fatally split the U.S.-led military coalition which rallied against Baghdad. "This time it looks like they are withdrawing. Maybe things are more calculated," he said. "After all, he's had six years to think about it." The only question mark over Saddam's logic was the timing of his move against Arbil, just weeks before the implementation of a $2 billion oil-for-food deal which would have allowed Iraqi oil back onto world markets for the first time in six years. "If he's blown his chances of the oil-for-food deal then it could still turn out to be a bad calculation on his part," said another diplomat. "But it wouldn't be the first one". 7482 !E21 !E41 !ECAT !GCAT !GJOB Morocco is to invest 200 million dirhams ($23.2 million) in the disputed Western Sahara provinces to start small and medium businesses to provide work quickly for thousands of jobless graduates, the interior ministry said on Monday. "The government decision to invest 200 million dirhams in the southern provinces' (Western Sahara) economic and social sectors was taken after the ministerial delegation visit to Laayoun last week," a ministry spokesman said. The visit, led by Interior Minister Driss Basri, to the territory's capital of Laayoun followed demonstrations by hundreds of young Saharan jobless to press for jobs and social benefits earlier last month in Rabat. The Saharans ended their protests after meeting Basri, who promised to visit Laayoun and examine their requests. "Half of the amount will be disbursed by the government and the remaining 100 million dirhams will be invested by the local council and other private groups in the short term starting from end 1996," the ministry said. Morocco, which controls four-fifths of the territory, claims Western Sahara as an integral part of the kingdom. Its claims have been contested since 1976 by the Algeria-backed Polisario Front which fought for independence of the area. A long-delayed referendum, under U.N. supervision, is supposed to enable those living in the former Spanish colony to decide between independence, as sought by Polisario, or integration with Morocco. ($1=8.6 dirham) 7483 !GCAT !GCRIM !GPOL !GVOTE Billionaire Prime Minister Rafik al-Hariri and his supporters won a resounding victory in the third round of Lebanon's parliamentary elections, winning 14 of Beirut's 19 seats according to unofficial results on Monday. Charges of widespread abuses marred Sunday's vote in the capital, including bribery of voters by Hariri representatives witnessed by a reporter. Hariri, a dynamic 51-year-old construction tycoon who gained popularity with his multi-billion dollars reconstruction drive in the past four years, won a seat in parliament at his first attempt in Sunday's vote. He also achieved his declared aim of crushing his opponents and forging a strong bloc of supporters in the 128-member parliament that will help him tackle rivals who have in the past blocked many of his projects in the house. Hariri's rivals won only five seats and Moslem fundamentalists including the pro-Iranian Hizbollah (Party of God) were defeated, suffering a new setback after losing seats in the first rounds of voting in Mount Lebanon and the north. With seven supporters who won seats in the first two rounds, and the possibility of two or three more in the coming votes in south Lebanon and the Bekaa valley, Hariri could end up with 24 supporters in parliament -- possibly the biggest bloc. Officials who gave out the results said vote-counting had ended and official results would be announced shortly. Hariri's main rival, Sunni Moslem ex-premier Selim Hoss, managed to win re-election but only one other member of his 13-man list got in with him, the officials said. Two of Hoss's supporters lost their Beirut seats, weakening his position in parliament. The turnout, 31 percent of Beirut's 377,000 voters, was the lowest of the election so far and indicated voter disillusion after the alleged violations in the first two rounds, newspapers said. Turnout in Mount Lebanon and north Lebanon was 45 percent and 40 percent respectively. Violations alleged by the opposition, newspapers and an independent monitoring group, include bribery, intimidation, faulty voters' lists, vte-counting fraud, votes cast for dead or emigre voters and exclusion of opposition candidates' observers from polling stations during voting and vote-counting. On Sunday, in one of the worst violations alleged so far, a Reuters reporter witnessed Hariri supporters paying voters 100,000 Lebanese pounds ($64) each to vote for Hariri's ticket. Three opposition candidates who lost in the first rounds have said they are preparing appeals to the Constitutional Council which can cancel the votes if it finds serious violations occurred. Radical Christian deputy Najah Wakim, who won a seat on Sunday, expressed outrage at the violations, saying he would sue Hariri, his supporters and Interior Minister Michel al-Murr who organised the vote, for carrying out "a major fraud." Wakim is renowned for his frequent accusations of corruption against Hariri and the pro-Syrian government he leads. Officials said Sunday's other two winners were independent Tamam Salam, son of a former prime minister and head of the Makassed, a Sunni Moslem philanthropic organisation, and a Christian member of the Syrian National Social Party (SNSP). The fundamentalist candidates of Hizbollah and the Sunni Moslem Gama'a Islamiyeh (Moslem Group), which cooperated in parliament, both lost. The candidate of al-Ahbash, a pro-Syrian Sunni fundamentalist group, also lost. Hizbollah has now failed to win a seat in the first three rounds of the five-stage election. It has lost two of the eight seats it won in 1992 but should win some seats in the coming two rounds. Gama'a Islamiye has retained only one of its three seats. 7484 !GCAT !GPOL Israeli Prime Minister Benjamin Netanyahu and Palestinian President Yasser Arafat will not meet on Monday, a top Palestinian negotiator said. "The two leaders will not meet today because negotiators are still engaged in talks to prepare for the meeting," Mahmoud Abbas, better known as Abu Mazen, told Reuters. "There will be another meeting tonight to try to finalise a joint document." Earlier, an authoritative source said Arafat and Netanyahu could meet on Monday if talks in Tel Aviv between PLO and Israeli negotiators were successful. Abu Mazen spoke after the latest round of Tel Aviv talks between the PLO's Saeb Erekat and Dore Gold, an aide to Israeli Prime Minister Benjamin Netanyahu. The negotiators are working on a joint formula for the full-fledged resumption of peace talks, Abu Mazen said. Another PLO official said the Palestinians were seeking a clear commitment from Netanyahu to implement all outstanding issues in the Israel-PLO peace deals, such as Israeli troop redeployment from Hebron and other parts of the West Bank. 7485 !E51 !ECAT !GCAT !GDIP Austrian Chancellor Franz Vranitzky on Monday pledged support for the Palestinian Authority and said his country offered Palestinians $30 million in aid for development projects. "We have signed agreements for 300 million shillings ($30 million) of which $100 million shillings ($10 million) will go to housing projects and 200 million shillings ($20 million) will be for water, education, health and training projects," Vranitzky said at a news conference with Palestinian President Yasser Arafat in Gaza. Vranitzky said peace should be based on the principle of trading occupied Arab land for peace, a concept opposed by Israeli Prime Minister Benjamin Netanyahu. Arafat said the Palestinian Authority remained committed to the peace process and that he hoped the new Israeli government would keep its side of the agreements signed with the Palestine Liberation Organisation (PLO). He said although meetings between PLO and Israeli negotiators were still taking place, the sides had yet to reach common ground on crucial issues. "There are some meetings between (PLO negotiator) Saeb Erekat and (Israeli negotiator) Dore Golde to clarify what we have to do in the coming stage to help to push the peace process forward," Arafat said. 7486 !E51 !E512 !ECAT !GCAT !GDIP !GVIO Baghdad's military action in its breakaway north has highlighted the risks for neighbouring Turkey's new Islamist-led government, banking on a renewed flow of Iraqi crude and a general realignment toward the East. Necmettin Erbakan, NATO-member Turkey's first Islamist prime minister, has long touted a new accomodation with the country's estranged eastern neighbours -- Iraq, Iran and Syria -- to supplement or even replace Ankara's pro-western approach. Turkey has also counted on fat pipeline fees for carrying Iraqi oil to western markets and an eventual restoration of trade ties with Baghdad, once Turkey's third biggest partner. Now, say analysts and diplomats, both objectives are at risk, victims of President Saddam Hussein's decision on Saturday to dispatch his tanks into the predominatly Kurdish north to support one Kurdish group fighting another Kurdish group. "What has happened in the region has changed the balance of power unexpectedly. Erbakan's plan for a four-way pact is now a dream," foreign affairs analyst Sami Kohen told Reuters. "The other countries involved are at each others' throats. This was just wishful thinking by the Turkish Islamists," Kohen said. "As I see it, things have turned against Turkey." While Baghdad openly backed Massoud Barzani's Kurdistan Democratic Party in the two days of fighting, the group's long-time rival the Patriotic Union of Kurdistan has been accused of getting support from Iran -- something Tehran denies. Meanwhile, Ankara has been sidelined as Washington and its Western allies weigh a military response to President Saddam Hussein's push into the rebel Kurdish enclave. Turkey's hopes this summer to organise a four-way summit in the region with Iraq were dashed when Iran rejected the proposal and Erbakan's quiet overtures to Syria have not soothed problems between the two countries. News on the oil front is no less discouraging for the prime minister, whose generous pay rises for Turkey's public-sector workforce and other populist hand-outs have put renewed strain on an already battered budget. On Sunday, U.N. Secretary-General Boutros Boutros-Ghali put off implementation of a $2 billion oil-for-food deal that would have returned Iraq to world oil markets for the first time in six years. "Security for (U.N.) staff is the main problem," his spokeswoman told reporters at U.N. headquarters. "The situation in northern Iraq is extremely tense." Analysts say Turkey stands to reap millions in transit fees for Iraqi crude and renewed trade as Baghdad stocked up on the humanitarian supplies it is allowed to buy under the U.N. plan. "We cannot pay the price of the developments in nothern Iraq," lamented a senior Turkish official said, adding that Ankara would try to get the U.N. decision to delay the deal overturned. "It's the oil that really hurts," said one western diplomat. "Again, Turkey has been disappointed after trying to cozy up to Iraq. More delay can only strain the economy further." Under the U.N. programme, which Turkey had confidently predicted would begin on September 15, Iraq was to ship more than half its allotment of crude through the 986-km (616-mile) Turkish pipeline, idle since the 1990 sanctions imposed on Iraq for its invasion of Kuwait. Already, a number of political commentators are pointing the finger at the Turkish leadership, charging it with failing to formulate a coherent Iraq policy. "Turkey acts as if it is unaware of its importance in the region. Turkey must reestablish its weight in the area," said Ferai Tinc, columnist for the daily Hurriyet. 7487 !E51 !E512 !ECAT !GCAT !GDIP !GPOL !GVIO President Saddam Hussein's incursion into northern Iraq is an attempt to unite the country and enjoys wide Kurdish backing, the United Arab Emirates semi-official newspaper al-Ittihad said on Monday. In a message of support for Baghdad by one of its Gulf War enemies, the daily also called for the implementation of a deal with the United Nations allowing Iraq to return to oil export markets for the first time in six years. "What is happening in northern Iraq can be seen as an expression of Iraq's attempts to impose sovereignty on its land and an attempt to regain the unity of the country and its peoples with all their factions and ethnic groups," it said. Diplomats said the front-page editorial portrayed official thinking by a close U.S. regional ally which appears to regard the fighting as Iraq's response after repeated violations of its territory by Iran and Turkey to pursue Kurdish rebels. Gulf Arab states in the past have repeatedly expressed firm opposition to any attempts to divide Iraq into three states, including a Kurdish one in the north and a Moslem Shi'ite one in the south. Diplomats said the UAE appeared opposed to military action against Iraq by the 1991 Gulf War alliance, regarding Iraq's intervention on the side of one of the rival Kurdish factions as an internal issue within Baghdad's right to defend its national sovereignty. The Iraqi military campaign "enjoys the support of wide segments of the Kurdish powers and elements," the newspaper said. "This is clear as there is no mass (Kurdish) exodus as in 1991." It also called on the United States, which has placed its forces in the region on top alert, to resume mediation between rival Kurdish groups "if it is indeed keen for peace to prevail in northern Iraq". The United Nations on Sunday delayed plans to implement the oil deal with Iraq, citing fears for the security of staff who would monitor the operation. Al-Ittihad called on Washington "to allow the implementation of the 'oil-for-food' deal and put an end to the slow death of the brotherly Iraqi people caused by the (U.N.) sanctions" imposed against Iraq since its 1990 invasion of Kuwait. 7488 !GCAT !GDIP !GVIO Turkey's rebel Kurd leader warned an Iraqi Kurdish group on Monday that if it killed members of a rival faction captured during fighting in northern Iraqi his own group would join in the fray. "I will warn (Kurdistan Democratic Party leader Massoud) Barzani, he definitely must not do anything to the captives...If he massacres them we will join in the fighting front," rebel leader Abdullah Ocalan was quoted by the pro-Kurdish DEM news agency as saying. "Barzani must finish with the minimum damage," said Ocalan, leader of the Kurdistan Workers Party (PKK) which is fighting with the Turkish army for control of southeast Turkey in a 12-year battle that has cost more than 20,000 lives. KDP and Baghdad forces captured the town of Arbil, the administrative centre of the Kurdish north of Iraq, from the Patriotic Union of Kurdistan (PUK) in an assault on Saturday. PUK and Iraqi opposition spokesmen have said the Iraqi secret service has killed and arrested hundreds of their people in Arbil. Ocalan said the KDP held senior PUK members as well as the wife of its leader, Jalal Talabani. Turkey has accused Talabani of being close to the PKK, but PUK officials have denied this. 7489 !C13 !C31 !C311 !C312 !CCAT !E51 !E512 !ECAT !GCAT !GDIP Israel's Minister of National Infrastructure Ariel Sharon is opposed to involving politics in purely business matters such as the purchase of natural gas from Egypt, a spokesman for the minister said on Monday. "Our policy on economic issues is not to mix politics with business," the spokesman said. The statement follows reports in the Arab press that Egypt has decided to halt talks with Israel over a natural gas supply agreement because of lack of progress in the Middle East peace. Egypt on Monday gave Israel three weeks to start implementing a PLO-Israeli peace deal or face cancellation of a Middle East economic conference planned for Cairo in November. Israeli energy industry sources said contacts with Egypt are continuing. "Israel has a number of proposals regarding natural gas supplies and these are all being studied," Sharon's spokesman said. In late July, shortly after taking office, Sharon announced that Israel would purchase natural gas from several suppliers. He said the policy is in order to prevent dependence on one supplier. The minister who has control of energy matters, ordered a speeding up of negotiations with the various suppliers who have approached Israel. These include Egypt, Qatar, France, Georgia and Germany. At the time, the minister said it was in the interest of both Israel and Egypt to reach an agreement on natural gas supplies. 7490 !GCAT !GVIO Iraqi troops disguised as Kurds were still in the Kurdish city of Arbil in northern Iraq and were hunting down the foes of Iraqi President Saddam Hussein, an Iraqi Shi'ite Moslem opposition group said on Monday. Iraqi forces, supporting Massoud Barzani's Kurdistan Democratic Party (KDP) faction, entered Arbil on Saturday and ousted the rival Patriotic Union of Kurdistan (PUK). Baghdad announced on Monday it had withdrawn from Arbil. Bayan Jabr, a representative in Damascus of the Supreme Council of the Islamic Revolution in Iraq (SCIRI), said Iraqi troops had not left the city but were pursuing the opposition. "Iraqi tanks pulled outside the city while troops remained disguised in Kurdish dress to give a picture of a withdrawal. Thousands of troops are inside chasing the opposition," he said. Jabr told Reuters that the groups' members were fighting Saddam's troops and said the opposition National and Islamic Committee for Cooperation and Coordination would meet in the next few days to discuss the Iraqi situation. "Our forces are confronting the Iraqi troops but we also urge the U.N. to stop the Iraqi regime from committing more crimes against our people in the region announced as a safe haven...Saddam should be put on trial and that is the only way to give stability to the region," Jabr added. 7491 !E51 !E512 !ECAT !GCAT !GDIP !GPOL Egypt on Monday gave Israel three weeks to start implementing a PLO-Israel peace deal or face cancellation of a Middle East economic conference planned for Cairo in November. Egyptian Ambassador to Israel Mohammed Bassiouny told reporters: "The Egyptian government has given the Israeli government three weeks to start implementing five points Israel was committed to and did not implement. Otherwise the economic conference will not be held." "The five points that Israel must implement are redeployment from Hebron, further redeployments from the West Bank, opening safe passages between Gaza and the West Bank, and lifting the closure completely," Bassiouny said. "We don't want promises, we need actions," he said. Egyptian President Hosni Mubarak has tried to use the conference on regional economic integration, greatly desired by Israel, to pressure Israeli Prime Minister Benjamin Netanyahu to honour peace deals signed by the previous governments. 7492 !GCAT !GCRIM !GREL !GVIO Egypt's state security police are holding more than 60 Islamists at Interior Ministry headquarters in Cairo from the same group as an Islamist who died in custody in mid-August, an Islamist lobby group said on Monday. Islamic Media Watch, in a statement naming 59 of the men, said the detainees were undergoing torture and may meet the same fate as Ahmed Higazi, the man who died. An Interior Ministry official said the ministry would look into the allegations. The ministry has not commented on reports of Higazi's death or appeals it investigate torture reports. But Interior Minister Hassan el-Alfi said on Saturday that the state security police had recently thwarted several attempts to disrupt security. "They have not been announced yet and investigations with the accused are taking place in complete secrecy," he told the government newspaper al-Ahram. Under Egyptian emergency laws, the authorities can in effect detain people indefinitely without charge or court appearance. The detainees are believed to be members of the militant Islamist group Vanguards of Conquest, which said in August that Higazi and 43 others were detained in the second half of July. The group, one of several fighting to overthrow the government and make Egypt a strict Islamic state, is a revival of the organisation that killed president Anwar Sadat in 1981. The list of 59 names includes the five men mentioned by the international human rights group Amnesty International in an appeal to the Egyptian authorities on August 21. Islamic Media Watch gave few details of the men but said they had nothing to do either with Iran or with Ayman Zawahri, fugitive leader of the militant group Jihad (Holy Struggle). 7493 !GCAT !GPOL !GVOTE Billionaire Prime Minister Rafik al-Hariri won a crushing victory in the third round of Lebanon's parliamentary election, according to unofficial results on Monday. Hariri and his supporters won 14 of the 19 Beirut seats in Sunday's vote in the capital, government officials said. They said vote-counting had been completed and official results were expected within hours. Hariri's main rival, ex-premier Selim Hoss who led a list of 13 candidates, was elected with only one of his supporters. The other three Beirut seats went to radical Christian deputy Najah Wakim, a sworn foe of Hariri, independent Sunni Moslem candidate Tamam Salam and a Maronite Christian belonging to the Syrian National Social Party (SNSP). Moslem fundamentalists suffered a setback. The candidates of the pro-Iranian Hizbollah (Party of God) and the Sunni Moslem Gama'a Islamiyeh (Moslem Group), which cooperated in parliament, both lost. The candidate of Ahbash, a pro-Syrian Sunni fundamentalist group, also lost. Hizbollah has yet to win a seat in parliament after the first three rounds of the five-stage election. It has lost two of its eight seats and Gama'a has retained only one of its three seats. 7494 !GCAT !GDIP !GVIO Saddam Hussein's bold entry into northern Iraq served as a potent reminder that the Kurds and Shi'ites shielded by U.S.-led forces are still within his reach. Iraqi forces backed by armour and artillary intervened on the side of an Iraqi Kurdish faction on Saturday to capture the main city of Arbil in northern Iraq from a rival Kurdish group. The Iraqi troops started withdrawing after two days of fighting. The thrust into the north underscored the vulnerability of Iraq's Kurds and Shi'ites -- both of which staged failed revolts after the 1991 Gulf War -- despite the U.S.-led force that imposed no-fly zones over parts of northern and southern Iraq. Arbil was not in a zone placed off-limits to Iraqi troops by the United Nations after the Gulf War to protect the Kurds. But Washington has criticised the Iraqi troop offensive and hinted at a military response and U.S. officials have said U.N. resolutions broadly protecting Kurds against repression applied. A similar zone was set up over the south to protect the Shi'ites, but the force's mandate appears wider with limits included also on Iraqi troop build-up. Lieutenant-Colonel Andrew Bourland, Director of Public Affairs Joint Task Force Southwest Asia, said there had been few Iraqi violations of the southern zone since it was set in 1992 to prevent Iraqi planes from flying south of the 32nd parallel. "There has been nothing lately," he said. U.S. warplanes that fly daily sorties and strike practice targets over the country's southern safe haven for Shi'ites are primed for a response to any potential threat. "We are (always) at a high state of readiness. This is a seven day a week, go to war operation, as if we had to turn around and fight a war. We are prepared for any contingency Iraq may throw our way," he said. The United States and its Western Gulf War allies, Britain and France, set up the no-fly and no-go zone in southern Iraq. Every day, U.S. fighters including F15s and F16s roar across the south to send Iraqi president a powerful message. "We go through training such as target practice and air refuelling and reconnaissance," Bourland told Reuters by telephone from Saudi Arabia. "Our mission is to attack enhancements of Iraqi military capability, as well as to attack positively identified military units penetrating the south," he said. There are some 4,000-5,000 U.S. military personnel in Saudi Arabia who help enforce the southern no-fly zone, as well as Patriot anti-missile operators, air ground crews, and communications specialists. A total of about 23,000 U.S. military personnel are in the Gulf region to help enforce United Nations sanctions against Iraq and train with forces of Gulf Arab allies. 7495 !E12 !ECAT !GCAT !GDIP Egyptian civil servants are pressing on with preparations for a Middle East economic conference in Cairo in November but opinion is divided over whether Israel will meet Egypt's conditions for the conference to take place on time, officials and diplomats said on Monday. Egyptian Foreign Minister Amr Moussa, in the clearest statement yet on his government's minimum requirements, said on Sunday the conference could not possibly take place until Israel at least redeploys its troops in the West Bank town of Hebron. "It is impossible to imagine that we can talk about regional cooperation when the peace process is obstructed or paralyzed. It would be illogical, out of the question," Moussa added. But Raouf Saad, a deputy assistant foreign minister, told reporters on Monday that doubts about the fate of the conference had not yet disrupted work on the conference, which would discuss integrating Israel's economy into the region. "In spite of all these circumstances, Egypt is making thorough preparations for the conference, in line with the timetable. Egypt wants the conference to succeed," he said. "There's an organic relationship between the peace process and regional economic cooperation. Economic cooperation cannot be complete without complete peace," he added. Some diplomats said there was too much at stake for Egypt's own economic aspirations for Cairo to take lightly a decision to postpone or cancel the conference, the third of its kind since Israel and the Palestinians began to make peace in 1993. Egypt still wants the conference to be a showcase for investment opportunities in Egypt under the liberalisation and privatisation which the government of Prime Minister Kamal Ganzouri has pursued since taking office in January. The government has adopted with enthusiasm the foreign community's argument that economic reforms in the months leading up to the conference would be crucial to foreign perceptions of Egypt as an investment destination. Egypt would also be reluctant to upset the World Economic Forum, which is organising the conference, diplomats said. "I believe the Egyptians are looking for a figleaf from Israel to ensure the conference goes ahead," said one. But a second school of thought believes that Egypt would risk a postponement or cancellation if that was the best way to tell the new Israeli government of Prime Minister Benjamin Netanyahu that it could not reap the economic fruits of peace without making political concessions to the Palestinians. Egyptian President Hosni Mubarak, explaining his reservations about the conference last month, said many countries would stay away if Israel does not change its tack. "Egypt has plenty of other ways to advertise its investment opportunities. And it doesn't want to have its fingers burned twice in the same year," one diplomat said. He was referring to the grand international summit in the Egyptian resort of Sharm el-Sheikh in March, called to prevent political violence from disrupting Middle East peace talks. From the Arab point of view, the Sharm el-Sheikh summit badly misfired when Israel took it as an Arab carte blanche to attack guerrillas in south Lebanon, with U.S. approval. 7496 !GCAT !GDEF !GDIP !GPOL Greece's defence pact with the divided island of Cyprus has boosted the negotiating position of both countries and changed the military balance that previously favoured Turkey, Greece's defence minister said on Monday. "The doctrine of unified defence is a reality," Greece's Defence Minister Gerassimos Arsenis told a news conference in Nicosia. "It is being implemented at a rapid pace and has already changed the military balances in the wider region and has had a positive impact for Greece and Cyprus at the negotiating table." The 1993 defence pact envisaged close cooperation between the two countries on defence planning. Greece has also promised to come to Cyprus' aid in the event of another Turkish offensive. Cyprus has been divided since Turkey invaded and occupied the northern third of the island in 1974 after a coup engineered by the military regime ruling Greece. The protracted dispute has partitioned the island between Greek and Turkish Cypriots and the problem remains a source of tension between NATO partners Greece and Turkey. The northern part of Cyprus, declared a Turkish Cypriot breakaway state recognised only by Ankara in 1983, is, according to the United Nations, one of the most heavily militarised areas in the world with 30,000 mainland Turkish troops. The Greek Cypriot national guard is considerably weaker with a conscript force of 10,000, but is engaged in a comprehensive programme to upgrade its defence capabilities. Tensions peaked last month when two young Greek Cypriots were killed - one beaten to death and the other shot dead by forces on the Turkish Cypriot side - during demonstrations against the division of the island in a U.N. manned buffer zone. The pact, he said, was part of wide ranging cooperation between Greece and Cyprus to deal with national issues "among which the priority is given to the viable and just solution of the Cyprus problem". Arsenis, who during his two-day visit in Cyprus met with Cypriot President Glafcos Clerides and other officials, came to the island for the end of a cultural festival marked by the visit of the Samos carrier of the Greek navy to the island. 7497 !GCAT !GDIP !GVIO Jordan said on Monday it would not join any military response to President Saddam Hussein's incursion into Kurdish territories in northern Iraq. Information Minister Marwan Muasher told reporters his country, which has been calling for changes in Baghdad since last year, would not be a base for military action against Iraq. "Jordan will not be used as a base, that has been a longtime position...We are not involved and we will not be involved in any effort involving a military operation," Muasher said. The minister said a report carried by U.S. television network CNN report that additional U.S. troops will be arriving in Jordan was "totally and catagorically untrue." He said he was unaware of any request for U.S. deployment in Jordan. Muasher said Jordan was concerned about the Iranian role in northern Iraq, saying it had long warned of the dangers of foreign intervention in Baghdad's internal affairs that threatened Iraq's unity. In June U.S. servicemen completed three months of exercises in Jordan involving 32 U.S. planes, training Jordanian pilots and flying reconnaissance over Iraq from the desert air base at Azraq. Muasher said all the U.S. servicemen had left Jordan at the end of June. "This was totaly different," he said. "It was not a military operation." 7498 !C24 !C31 !C312 !CCAT !E51 !E512 !ECAT !GCAT !GVIO Turkish Energy Minister Recai Kutan said on Monday he expected a delay "for sometime" in the flow of Iraqi oil through a trans-Turkish pipeline under a U.N. deal because of latest incidents in the Kurdish north Iraq. "I think the oil flow will be delayed for sometime. But we will make efforts that it is flowed by September 15, as we expected earlier," he told Reuters. "We are in liaison with the foreign ministry but the picture in the northern Iraq is not clear yet," he said. He made no further comments. U.N. Secretary-General Boutros Boutros-Ghali said on Sunday that he would delay implementing the oil-for-food plan for Iraq because of the deteriorating situation in the north. According to U.S. officials, Iraq amassed up to 40,000 troops over the weekend in northern Iraq and captured the city of Arbil, expelling one Kurdish faction and installing a rival group more favourable to Baghdad. The U.N. oil-for-food plan, agreed on May 20, allows Iraq to sell oil worth $2 billion over six months to buy food and medicine for its people suffering under sanctions in place since it invaded Kuwait in 1990. Iraq would sell more than half of its oil through the Turkish pipeline. Turkey has repeatedly said the oil would flow through the pipeline by September 15. --Ercan Ersoy, Ankara Newsroom, 90-312-4462940 7499 !GCAT !GPOL !GVIO Iraqi President Saddam Hussein, who ordered his troops to help a Kurdish faction capture a key city in north Iraq, has again exploited the Iraqi opposition and shown it to be anything but a united force capable of ousting him. The invitation for Saddam to intervene in the internal fighting in the Kurdish-ruled region of northern Iraq by rebel leader Massoud Barzani caught every Baghdad watcher by surprise -- not least Barzani's Kurd rival and Arab opposition factions. Barzani's Kurdish Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) of Jalal Talabani had been sharing power uneasily in northern Iraq since shortly after the 1991 Gulf War. The two Kurdish factions are rivals who have shifted alliances between Iraq and Iran over the last three decades. Intermittent fighting marred their five-year-old hold on the enclave until fighting flared in mid-August despite U.S. efforts to broker a ceasefire. The KDP said it looked to Baghdad for support after the PUK started to get backing from Iran in the latest fighting -- an allegation denied by Iran. "Saddam has been able to exploit the divisions we always knew were there between the main Kurdish factions," said a western diplomat in the Middle East. Saddam's willingness -- and the ease with which his forces pushed into the Kurdish region -- threw exiled opposition leaders into confusion and alarmed the Western powers protecting the Kurds and waiting for Saddam's downfall. "This operation was a clear message to the West and his own people -- he's in charge of his military and he will confront any challenge to his authority," another diplomat said. Iraqi opposition groups have in the past years grabbed world headlines for shedding some light on goings-on in Baghdad. Their main weapon has been the fax machine and satellite telephone as they attempted to spread news of what they say is the resistance to Saddam's iron-fist rule and his brutal counter measures -- though many of their reports were proved to be exaggerated. Their ineffectiveness was apparent last year when two high-level officials defected to Jordan. The opposition groups grappled for months with how to deal with them, eventually giving Saddam the chance to lure the defectors home and then execute them. Arab and Western diplomats say in fact most opposition groups are united by only one thing -- their hatred of Saddam. They differ on almost everything else: ideology, aspirations and religion. And each has its own -- very different -- view of post-Saddam Iraq. The dissidents include Moslem fundamentalists, Baathists, pro-Syrians, pro-Iranians, communists, liberals, democrats and secularists who are divided ethnically and religiously: Kurds, Shi'ites, Sunnis, Syriac-Christians and Turkomen. Diplomats generally dismiss the groups because they are so fragmented. They believe any change in Baghdad has to come from the armed forces in the capital or from Saddam's inner circle. Before the Gulf War of 1991, when U.S.-led allies drove Iraqi forces from Kuwait, there were already 20 Iraqi opposition groups. That number rose to more than 100 in the months that followed with defections of military and political officials. The groups have since formed coalitions and alliances to try to limit the fragmentation into various factions. Excluding the Kurdish opposition, there are two main groups: The Iraqi National Council (INC) and the Supreme Council of the Islamic Revolution in Iraq (SCIRI). The INC was formed in mid-1992 combining more than 30 opposition groups that included democrats, liberals, secularists and Kurds. The SCIRI is an Iranian-backed coalition of six Shi'ite fundamentalist groups. It has its headquarters in Tehran and maintains an army of a few thousand deployed near the Iranian border with southern Iraq. SCIRI, which calls for an Iranian-style Islamic state in Iraq, played a key role in a 1991 uprising in southern Iraq and, diplomats say, seems the only group capable of military action. 7500 !E41 !ECAT !GCAT !GJOB Most Americans are satisfied with their work, and slightly fewer than last year fear they might lose their jobs in the next six months, according to a poll released Monday. Fifty-nine percent said they were extremely or quite satisfied at work, while just 6 percent said they were extremely or quite angry, according to the poll conducted by the Gallup Organisation. Twenty-seven percent said they were very concerned or somewhat concerned about losing their jobs, compared with 32 percent last year, it said. "Given corporate downsizing and the demands that come with strategies to increase corporate competitiveness, the finding that the labour force still has very positive workplace attitudes ... is quite surprising," Sigal Barsade, of the Yale School of Management and an author of the poll, said in a statement. But Barsade warned, "I do not believe that employers should take this positive relationship as a given, because if employees feel much more pressure than they feel now, this positive mood may not be sustainable." The poll was commissioned by The Marlin Company, a Connecticut-based consulting firm that helps companies communicate with employees on workplace issues. It showed women were happier in their jobs than men, at 64 percent versus 55 percent, and that 53 percent of women felt it would be difficult to find another job they liked, compared with 44 percent of men. The poll also pointed out regional differences in job frustration levels, with 12 percent of Easterners saying they felt extremely or quite angry at work, compared with 6 percent of Midwesterners, 4 percent of Southerners and 3 percent of Westerners. Easterners and Southerners had highest expectations for job security, with 30 percent saying they expected their employer to provide security "to a great extent," compared with 21 percent of Westerners and 18 percent of Midwesterners. In age differences, 72 percent of workers 50 and older said they felt extremely or quite energetic at their jobs, ahead of 58 percent of those ages 35-49, and 62 percent of those 18-34. The telephone survey of 1,000 full-time or part-time employed adults was conducted July 13-Aug. 7, and had a margin of error of plus or minus three percentage points. 7501 !E14 !E41 !ECAT !GCAT !GJOB The pay of working women fell in the early 1990s after rising for more than a decade, reversing a trend that had helped steady family incomes as men's wages tumbled, a study said Sunday. Pay for most men also fell in the latest period, and the wage declines came as compensation for corporate chief executive officers soared, according to the study by the Economic Policy Institute, a liberal think tank in Washington. At the same time, business profitability rose to the highest level in 30 years, according to the study, "The State of Working America", released to coincide with the Labor Day holiday. "The changes in the economy have been 'all pain, no gain' for most workers," the authors of the study wrote. "The economy is clearly in transition, but it is far from certain that it is headed to a better place." "It seems that women who were previously immune have caught a touch of the male wage disease," said Jared Bernstein, a labor economist at the institute and one of the authors of the study. He said the decline was the first time that wages for most working women had dropped, according to the institute's research going back to the late 1970s. The study follows recent reports that have pointed to a modest pickup in wages for American workers. But Bernstein said the recent evidence of rising wages amounted to "a lot of smoke and very little fire" and that wages appear to be stagnating after falling earlier in the decade. For the period between 1989 and 1995, the typical male worker's hourly wages fell 6.3 percent, after inflation, which was consistent with the pace of decline in the 1980s, the study said. But the typical working woman's wages fell 1.7 percent over the same period, reversing some of the 5.7 increase experienced in the 1980s. The decline in wages was not offset by an increase in benefits, according to the study. Total compensation, including wages and benefits, has grown just 0.1 percent faster than hourly wages alone since 1979, the study said. Not suprisingly, the drop in wages contributed to a decline in family income. The annual income of a median family, which means half earn more and half earn less, fell 5.2 percent, or nearly $2,200, between 1989 and 1994, the last year for which data were available. The drop in women's wages also meant families could no longer offset men's lower earnings with increased earnings from wives, the study said. Although wages fell for the typical working woman, the highest-paid women have not suffered a decline. The worst decline in wages came in entry-level jobs. Hourly wages for typical high-school graduates fell almost 7 percent. College graduates also suffered a drop in pay, 9.5 percent for men and 7.7 percent for women. While wages were falling, corporate chief executives' pay soared to 173 times that of the average worker in 1995, from a multiple of 122 in 1989 and about 60 in 1978, the study found. It said the rise in companies' return on invested capital, which hit a 30-year high in 1995, came not from greater investment or improved productivity, but rather was fueled by stagnant or falling wages. Wages are one of a company's biggest expenses, so any reduction would help profits. "Profit rates are at a 30-year high. That would not be so objectionable if the fruits of growth were being shared equally," economist Bernstein said by telephone. While the study painted a picture of continued tough times for most low- and middle-income families, there were some bright spots. It noted that while job security has dropped, unemployment has dipped to about 5.3 percent, inflation remains relatively low near 3 percent and some tax changes enacted in 1994, especially expanding the earned income tax credit, have helped boost earnings of poor workers. The other authors were Lawrence Mishel, the institute's research director, and John Schmitt, a labor economist at the institute. All figures were adjusted for inflation. The fourth edition of the biennial study can be ordered by calling (800) 374-4844. A summary can be found at the institute's Web site (http://www.epinet.org). A final version is due out in book form in December. 7502 !GCAT !GENV !GWEA Hurricane Edouard veered east of its northward course early on Monday and forecasters said the worst of its 90 mph (144 kph) winds could pass east of Nantucket Island and Cape Cod on the coast of Massachusetts at daybreak. Tropical storm-force winds of 40 mph (64 kph) and several inches of rain lashed the tourist haven, forecasters said. "The hurricane is expected to remain offshore. However the center has been wobbly for the last couple of hours so it's still possible its center could come in over southeast New England," said meterologist Mike Carbone of the National Weather Service in Taunton, Mass. At 11 p.m. EDT on Sunday 0300 GMT, the center of Hurricane Edouard was located about 125 miles (201 km) south of Nantucket Island, and moving north northeast at 14 mph (22 kph), Carbone said. Edouard's maximum winds dropped to 90 mph (144 kph) from 115 mph (185 kph) earlier on Sunday as the storm moved over cooler north Atlantic waters. The U.S. Coast Guard warned fishing vessels to seek shelter and closed ports in Boston, Fall River and New Bedford in Massachusetts and Providence to commercial ships, Boston television reported. All Massachusetts state parks and beaches from Cape Cod north to the coast of New Hampshire were ordered closed on Sunday night and vacationers were urged to head inland, said Arlene Margolis, a spokeswoman with the Massachusetts Emergency Management Agency. Traffic heading off Cape Cod on Sunday was at a near standstill, with bumper-to-bumper backups for nearly 20 miles (32 km). Several towns on Cape Cod declared a state of emergency and shelters opened in case of coastal flooding. Emergency teams were armed with communications equipment, power generators and supplies; three units of the National Guard were put on high alert, Margolis said. With tides along Martha's Vineyard, Nantucket Island and eastern parts of the Cape were expected to be up to five feet higher than normal, crews were readying for coastal flooding. "We are ready to meet it if it's bad, we will applaud heartily if it goes away," she said. Earlier on Sunday along trendy Thames Street in Newport, Rhode Island, the sound of pounding hammers and gray skies reminded Labor Day vacationers of the impending storm. Along the famous Cliff Walk, tourists turned their eyes from the oceanfront, million dollar mansions toward surfers braving 10-foot (three-metre) waves. Meanwhile, Hurricane Fran was drifting in the Atlantic and was no immediate threat to any land, but forecasters said it appeared to be getting better organized and was strengthening. At 11 p.m. EDT (0300 GMT), the center of Hurricane Fran was about 800 miles (1,287 km) east-southeast of Nassau in the Bahamas and moving west-northwest at nine mph (14 kph). Fran's top winds climbed to 85 mph (136 kph). 7503 !GCAT !GDIS !GWEA Shop owners boarded up windows and offered hurricane sales as Hurricane Edouard and its 100 mph (160 kph) winds neared the New England coastline on Sunday. On trendy Thames Street in Newport, Rhode Island, the sound of pounding hammers and gray skies reminded Labor Day vacationers of the impending storm. Along the famous Cliff Walk, tourists turned their eyes from the oceanfront, million dollar mansions toward surfers braving 10-foot (three-metre) waves. At 8 p.m. EDT (0000 GMT), the center of Hurricane Edouard was located at latitude 38.7 north, longitude 69.7 west, about 180 miles (289 km) south of Nantucket Island, and moving north at 14 mph (22 kph). Forecasters said on its current track, hurricane conditions could reach southeastern New England early on Monday. Edouard was expected to pass over Nantucket Island about 5 a.m. (0900 GMT) on Monday and continue north over Chatham on Cape Cod, said meterologist Bob Burton of the National Weather Service in Taunton, Massachusetts. Maximum winds dropped to 100 mph (160 kph) as the storm moved over cooler north Atlantic waters. All Massachusetts state parks and beaches from Cape Cod north to the coast of New Hampshire were ordered closed from 6 p.m. (2200 GMT) Sunday night and vacationers were urged to head in-land, said Arlene Margolis, a spokeswoman with the Massachusetts Emergency Management Agency. Emergency teams were armed with communications equipment, power generators and supplies and three units of the National Guard were put on high alert, Margolis said. "We are ready to meet it if it's bad, we will applaud heartily if it goes away," she said. Several towns on Cape Cod declared a state of emergency, shelters opened in case of coastal flooding and traffic backed up for 20 miles (32 km) on the highway off the vacation hot spot, she said. The storm was expected to pass east of New York's Long Island, said meterologist Glenn Field, who said the island remains under a hurricane watch. A hurricane warning was in effect from Watch Hill, Rhode Island, to the Merrimack River in Massachusetts, including Nantucket, Martha's Vineyard and Block Island. A tropical storm warning was in effect from the Merrimack River to Eastport, Maine, and from Fire Island Inlet on Long Island to Watch Hill, including Long Island Sound east of Port Jefferson Harbor. Meanwhile, Hurricane Fran was drifting in the Atlantic and was no immediate threat to any land, but forecasters said it appeared to be getting better organized and was strengthening. At 5 p.m. EDT (2100 GMT), the center of Hurricane Fran was located at latitude 22.5 north, longitude 64.2 west, about 290 miles (465 km) north of San Juan, Puerto Rico, and moving west-northwest at 8 mph (13 kph). Fran's top winds climbed to 80 mph (128 kph). 7504 !GCAT !GDIS !GENV A rockslide brought debris crashing down on a popular hiking trail in California's Yosemite National Park Sunday, but no one was injured, officials said. The slide occurred less than two months after a powerful rockslide killed one person and injured 14 at Yosemite, a vast, scenic wilderness area 150 miles (240 km) east of San Francisco. In Sunday's rockslide, stones slid down from a hillside, littering a 200-foot (60-metre) section of the Upper Yosemite Falls trail with debris, rangers said. Park ranger Kendell Thompson said searchers with dogs had gone through the rockslide area and found no victims. No one was injured or missing, he said. The trail winds up from the Yosemite valley floor to the top of Yosemite Falls. Thompson agreed that it was lucky no one was hit by the rockslide. The trail is one of the most popular in the park, but Thompson said it was less busy in late summer than earlier in the year, when Yosemite Falls is running more strongly and is more of a magnet for tourists. The Labour Day weekend is a peak tourist period at Yosemite National Park. The trail was closed to hikers and people at the top of the trail, above the rockslide, were led to safety by another route. The trail will remain closed at least until Tuesday, when experts will be brought in to assess the damage and the debris will be cleared from the trail, Thompson said. The rest of the park is open. Park ranger Chip Jenkins said the rockslide was "relatively small" and, unlike the July fall, in which a huge section of granite gave way, involved smaller rocks. Rockslides are part of a natural process in Yosemite and happen often, he said. In the July 10 rockslide, a 31,500-ton slab of granite broke away from a cliff, uprooting about 2,000 trees. Emiliano Morales, a 20-year-old tourist from southern California, was killed by a falling tree, and 14 tourists were injured. More than 4 million people visit the 1,170-square-mile park each year to see its spectacular mountain scenery and waterfalls, hike, climb, or camp. The park receives about 20,000 visitors per day in summer. 7505 !GCAT !GPOL !GVOTE Buoyed by a nostalgic Arkansas sendoff, President Bill Clinton returns to the campaign trail on Monday with Labour Day rallies in the Midwest election swing state of Wisconsin. In a speech to about 3,000 friends and supporters at the Old State House, where he launched his first bid for the White House in 1991, Clinton called his battle with Republican challenger Bob Dole "our last go-round, with the highest stakes for the largest number of people." "The kind of country we'll be at the dawn of the new century and a new millenium will be determined by this election," he said after asking his Arkansas allies to help him win re-election. The mood of the Little Rock sendoff rally was buoyant because of a variety of signs that Clinton, 50, is headed for victory -- perhaps by a substantial margin -- in his contest with Dole on Nov. 5. His aides were elated by "October-size" crowds that turned out last week as Clinton campaigned by train and bus before and after the Chicago Democratic Convention. "A good sign," Vice President Al Gore said after a post-convention trip with Clinton through Missouri, Illinois, Kentucky and Tennessee. The Clinton camp was further heartened by an array of polls showing Clinton leading Dole by as much as 21 percentage points in spite of a convention-week "speed bump" -- alleged sex-and-security indiscretions that forced the resignation of Dick Morris, Clinton's top political adviser. No challenger has ever overcome a lead that great this late in a U.S. presidential campaign. Clinton aides expect the race to tighten but say an eight-to-10-percent margin of victory -- a landslide that could give Clinton long coattails for Democratic congressional candidates -- is not out of the question. In an interview in Sunday's edition of the Arkansas Democrat-Gazette, Clinton expressed more sorrow than anger at reports that Morris shared White House secrets with a $200-an-hour prostitute with whom the married aide allegedly had a year-long affair. Clinton, his wife, Hillary, and Gore placed separate phone calls to Morris the day after he abruptly quit the campaign and left the Chicago convention in disgrace. Asked why he would sympathise with someone who allegedly betrayed his trust, Clinton said he did not want to "never acknowledge the fact that he must be undergoing some personal pain and that he did a good job for me in the last year and a half and in previous campaigns on which we worked." "You know, you work with someone repeatedly over a long period of time and you're worried about them being hurt," the president said. Meanwhile, his campaign attacked Dole's promise in a CBS "60 Minutes" interview on Sunday to exempt Medicaid government health benefits for the poor, disabled and elderly from any cuts he might make to balance the budget. "Bob Dole took one more step tonight on the bridge to economic fantasyland," Clinton campaign spokesman Joe Lockhart said. "In the past two weeks, he's taken Medicare, Medicaid, veterans' programmes, national labs and defence off the table." Lockhart challenged Clinton's Republican rival to release a detailed plan that "lays out the details line by line, dime by dime," of how he will fill the budget shortfall resulting from his proposed 15 percent across-the-board tax cut. 7506 !GCAT !GDIS !GWEA Hurricane Fran continues to slowly gain strength north of Puerto Rico and has top winds of 85 mph, private forecaster Weather Services Corporation said. Fram is about 800 miles east of Nassau, Bahamas and will continue to track west northwest. Fran will be a threat to shipping during the next 24-36 hours and may threaten the Bahamas and Florida Wednesday and Thursday. However, this is still uncertain. 7507 !GCAT The Washington Post carried the following stories on its front page on Monday: --- WASHINGTON - U.S. pledged to respond to Iraqi assualt on the main Kurdish city of Arbil, but gave little indication of what response it was contemplating. --- HARTFORD, Connecticut - Senate hopeful Mark Warner, a middle class boy from the Hartford suburbs, amassed a fortune in just 14 years but faces an uphill campaign to oust Republican Senator John Warner. --- WASHINGTON - The Christian Coalition, whose ranks are predominantly evangelical Protestant, has embarked on a campaign to recruit Catholic members with the intent of building a united bloc of conservative religious voters. --- DENVER - In this season of rampaging wildfires, the debate over what is best for the great forests of the West has been rekindled. --- WASHINGTON - Suburbs' motor vehicle agencies test the public's patience as a steady stream of people wait in line to renew their licences and take driving tests. --- 7508 !GCAT The Washington Post carried a local business news section on Sept. 2. --- 7509 !GCAT !GDIS The lake in which Susan Smith drowned her two sons in 1994 took seven more lives when a car holding four children and an adult rolled into it and two adults in the same party drowned trying to save them. Union County Sheriff Howard Wells said on Saturday those killed were among a group of 10 who had driven to John D. Long Lake to see memorials erected last year for Smith's two young sons, who were killed Oct. 25, 1994, when she strapped them into car seats and let the car roll down a ramp into the lake. Wells said a Chevrolet Suburban carrying five members of the group, including four small children, rolled forward between the memorials and down a steep embankment into the lake about 20 feet (six metres) from the boat ramp. Two adults who had gotten out of the car to look at the memorials also drowned after they jumped into the lake to rescue the others. Authorities identified the dead as Tim Phillips, 26 years old; his wife, Angela, 22; their three children, Courtney, 4, Meleana, 1, and Kinsleigh, 4 months; Cody Roodvoets, 3; and Sidney White, 29. Wells said the group had been attending a cookout at the Phillipses' Union home when they decided to visit the lake. Smith, who initially said a black carjacker had abducted her children but later broke down under questioning by Wells, is serving a life sentence at the Women's Prison in Columbia, South Carolina, for first-degree murder. Wells called Saturday's incident a "tragic accident" that had no real similarities to the murders at Long Lake. He said investigators do not know why the car rolled into the lake but said the absence of marks on the ground showed there had been no attempt to brake or steer it. The car's transmission was in the park position when it was found upside down in 20 feet of water about 80 feet (24 metres) from the shore. 7510 !GCAT !GPOL Billionaire businessman Ross Perot, running far behind his rivals in all presidential campaign polls, urged voters on Sunday to abandon the two main parties he said have bankrupted the country. Turning to the half-hour "infomercials" that were the trademark of his 1992 campaign for the White House, Perot, nominee of the Reform Party that he founded and largely financed from his personal funds, accused Democrats and Republicans of running up a huge government debt and selling out to special interest groups. "In plain talk, we are bankrupt," Perot said during the 30-minute televised campaign ad broadcast on ABC. He said the United States has lost more than 2.5 million jobs and run up massive trade deficits to Asia and Mexico because of "one-sided" trade treaties and called for urgent reform of the Social Security system as well as the publicly funded Medicaid and Medicare health programmes. Although he did not mention President Bill Clinton or Republican candidate Bob Dole by name, the maverick Texan also took a swipe at the tax cut promises of both men. "We love free candy -- the politicians know that -- but we also know that there is no free candy," Perot said, adding that tax cut policies failed spectacularly in the 1980s. "Even the people who created it called it 'Voodoo Economics.' It will put us in deep voodoo if we go through this again," he said. Perot won 19 percent of the popular vote in 1992 and was last month named the candidate of his fledgling Reform Party, but most recent polls showed him with less than 10 percent support this time around. In a bid to catch up, Perot decided to again use the infomercials that he introduced to campaign politics four years ago. Pointing repeatedly to charts and graphs throughout Sunday's infomercial, Perot pushed the folksy, straight-talking style that characterised his 1992 campaign. In arguing that Social Security is headed for disaster, Perot said the contributions of workers and their employees are sent to Washington but then "go out the door to people who are retired faster than Domino's can deliver pizza." Later he compared tax cut proposals to advising a man who is hopelessly in debt to ask his boss for a lower wage. But there was a new emphasis on building up Perot's image as a patriotic hero with testimony from one of the two former employees Perot rescued from an Iranian prison in 1979. Former executive Bill Gaylord and another employee of Perot's computer services company were jailed after the Shah of Iran was deposed in an Islamic revolution. Both the Pentagon and State Department had been unable to negotiate their release when Perot decided to launch a daring rescue mission made up of company employees. "Ross refused to accept that it couldn't be done. He could have been killed in the streets before he reached the prison ... but he was willing to take whatever risks were required to save us," Gaylord said. Perot wrapped up his first infomercial of the 1996 election by urging voters to send in campaign contributions. Perot spent $70 million of his personal fortune in 1992 but this year opted to accept $29.2 million in federal funds and so can put in no more than $50,000 from his own pocket. 7511 !C42 !CCAT !E41 !ECAT !GCAT !GJOB French Education Minister Francois Bayrou sought on Monday to appease teachers' fears of job cuts as children return to school after the summer vacation. Bayrou told a news conference the number of primary and secondary education classes would not be cut despite a slight drop in the number of pupils. He said he was creating 4,000 new teaching jobs in higher education this year, with a further 3,000 next year. The teachers' union SE accused Bayrou of concealing plans to cut 5,000 teaching jobs in primary and secondary education next year and repeated a call for a strike later this month. Bayrou told the daily Le Parisien that some planned job cuts would target administrative rather than teaching personnel, while others were justified by a drop in school enrolment. "I make a simple commitment: Although the number of jobs is being tailored to the number of pupils, there will be as many and I hope more teachers next year than this year," he said. Bayrou said the number of students had fallen steadily by about 50,000 every year for the past five years as post-war baby boomers became adults and left the education system. It fell by 60,000 this year to 12.5 million pupils. Teachers' unions have threatened strikes this month to protest against plans to eliminate several thousand jobs in education in a 1997 austerity budget, designed to cut state deficits to help France qualify to join a single European currency from 1999. Teachers' unions are to meet on Tuesday to set a date for a joint strike and plan more protests. The country's major unions have warned of a wave of social unrest this autumn over austerity and near-record unemployment. After a rise in attacks against pupils and teachers last year, Bayrou said he would increase to 5,000 from 4,700 the number of conscripts serving their army time in schools in order to increase security. School insecurity, a new phenomenon in France, has caused widespread concern. Teachers reporting for work on the eve of Tuesday's start of the school year kept a minute's silence in tribute to a colleague beaten to death last month by a former pupil who blamed him for his expulsion from school. 7512 !GCAT !GDIP Serbia has signed a breakthrough deal with leaders of the ethnic Albanian population in the troubled province of Kosovo, returning Albanian students to mainstream education, Serbia's prime minister said on Monday. "The Republic of Serbia welcomes the agreement, evaluating it as a humanitarian and civilising agreement which will enable the Albanian children in Kosovo to stop suffering from negative political consequences," Prime Minister Mirko Marjanvovic told a news conference. Serbian President Slobodan Milosevic and the leader of the Albanian Democratic League of Kosovo (LDK), Ibrahim Rugova, signed the accord to establish a joint committee to reintegrate Albanian students into the Serbian education system. The agreement calls for the "normalisation of the education system of Kosovo for Albanian children", ending a six-year boycott in which Albanian students studied in parallel schools. The deal is a major breakthrough in relations between the ethnic Albanian majority and the Serbian administration which has been accused of human rights abuses since it revoked the province's autonomous status in 1989. In Rome, a Roman Catholic peace group which helped broker the deal, the Sant'Egidio Community, said some 500,000 ethnic Albanian students would benefit from the development. A senior source at the group, which has been active in peace mediation in several of the world's trouble spots, said the agreement covered all levels of education. The source said differences in the wording of the Albanian and Serbian language texts of the accord where it relates to universities had caused some late problems with the agreement though these were expected to be resolved. The LDK pulled its students out of state-run education in protest and established its own unofficial administration the following year. Students were taught in private homes and community buildings in the Albanian language by Albanians. "The agreement forsees the unconditional return of Albanian students and teachers and other educational staff to their premises in Kosovo. Other education-related issues will be addressed and settled at a later stage," the accord said. Diplomats regard tensions between the Albanian majority, which outnumbers Serbs by nine to one, and the Belgrade administration as potentially the most explosive unresolved ethnic conflict in the Balkans. The United States and Germany have led diplomatic pressure on Belgrade to settle its differences with the Albanian leadership, before lifting a so-called "outer wall" of economic sanctions that remain in place. Sporadic violence has flared in recent months in Kosovo, which Serbs regard as the cradle of their civilisation, with a series of attacks on Serbian policemen. International human rights groups have accused Serbia of running a virtual police state with military and special police units to repress Albanians and protect Serbs. 7513 !GCAT !GVIO A blast destroyed a garage in Corsica's capital city early on Monday, the 30th bomb attack since mid-August on the French Mediterranean island, police said. The explosion started a fire which was fuelled by paint stored in the garage. The fresh wave of violence, chiefly hitting public buildings, has been blamed by police on separatists who called off a shaky seven-month truce on August 14. Unions called on staff at the island's tax offices to stop work on Monday to protest at insecurity -- tax offices are regularly targeted by the guerrillas. Prime Minister Alain Juppe last month promised to crack down on guerrilla violence and seven suspects were detained in a series of police raids last week. Six of the suspects, all believed by police to be members of the clandestine Corsican National Liberation Front - Historical Wing, were flown on Monday by military transport from Corsica to Paris, where they remained in custody, officials said. Among them was Toussaint Andarelli, a former kick-boxing world champion, the officials said. 7514 !C31 !C312 !CCAT !E51 !E512 !ECAT !GCAT !GDIP !GVIO Secretary-General Boutros Boutros-Ghali on Sunday put off plans to implement an oil-for-food deal that would allow Baghdad to re-enter oil markets for the first time in six years. "He decided to hold off," said chief U.N. spokeswoman Sylvanna Foa. "Security for the staff is the main problem." "The situation in northern Iraq right now is extremely tense and he doesn't feel he can send people into a situation like that," she said The oil-for-food programme, signed on May 20 between Iraq and the United Nations, permits Baghdad to sell $2 billion worth of oil over six months in order to buy food and medicine for its people, hard-hit by six-years of U.N. trade sanctions. The embargoes were imposed in August 1990 shortly after Baghdad's troops invaded Kuwait. She also said that Iraq's deputy prime minister Tareq Aziz had assured Boutros-Ghali in a telephone call that Baghdad's troops had been told to withdraw from the Kurdish areas where they captured the city of Arbil on Saturday. Aziz reported that the situation was calm in Arbil, an "assessment that has been confirmed by U.N. headquarters in Baghdad," Foa added. President Bill Clinton has already called several world leaders to discuss a "course of action" in response to the Iraqi military onslaught against one faction of rebel Kurds in northern Iraq, the White House said. Boutros-Ghali, in a statement issued by Foa's office, said he had "decided to delay the deployment of certain personnel who will supervise the implementation of Resolution 986," a reference to the document that sets out the oil-for-food plan. The programme had been expected to be implemented within the next two weeks, presumably after the arrival of 14 oil monitors sent by the Dutch-based Saybolt company and 32 customs officials fielded by the Britain's Lloyd's Register. An advance team to make arrangements for the oil monitors arrived in Baghdad late last week, but the 14 had been expected to leave this week, U.N. officials said. In order tor the plan to be implemented, Boutros-Ghali must assure the Security Council that all arrangements are in place, including the first group of monitors to be stationed in the north as well as the rest of the country. Said one key Security Council envoy: "He has put the thing on ice for the time being, which is very sensible on prudency and political grounds." But diplomatic sources said one other detail was still open -- arrangements for an escrow account to be set up at France's Banque Nationale de Paris. Arrangements for this have to be approved by a Security Council committee and the United States could delay approval, they said. The United Nations eventually intends to send a total of 260 foreign monitors to Iraq for the deal, with about 900 Iraqis hired as support staff. 7515 !C13 !C31 !C311 !C34 !CCAT !G15 !G157 !G158 !GCAT The European Commission said on Monday it was investigating allegations that Japanese and Singapore manufacturers were circumventing dumping duties on electronic weighing scales. The Commission said in the Official Journal that it was opening two investigations following complaints from companies representing 65 percent of the European Union sector that the Japanese producers were illegally avoiding the duties. According to the EU producers Japan's TEC Corporation Tokyo was sending the scales to Indonesia to be assembled, or shipped while Teraoka Seiko Co Ltd Japan and Teraoka Weigh System PTE Ltd Singapore were sending parts for assembly in the Union, thus getting round the duties. The EU said the imports should now be registered to assess the allegations. The Commission said that the complainants had demonstrated that a change in the pattern of trade had taken place between Japan, the 15-nation Union and Indonesia after the anti-dumping duties were imposed. It said that imports of the scales from Japan had decreased from 25,470 units in 1992 to 652 units in the first half of 1995, whereas the imports from Indonesia have increased from zero in 1993 to well over 1,000 in the first half of 1995. It said a similar change of trade pattern had taken place with regard to the scales coming from Japan and Singapore towards the EU. 7516 !GCAT !GDIP Algerian President Liamine Zeroual met Ghanaian leader Jerry Rawlings in Algiers on Monday, the official Algerian news agency APS said. Algerian Foreign Minister Ahmed Attaf and other senior officials accompanied Zeroual to greet the Ghanaian president on his arrival at Algiers' airport for a brief visit to the North African country, it said. Rawlings was on his way back home from Tripoli where he took part in celebrations commemorating the 1969 revolution that brought Muammar Gaddafi to power in Libya. 7517 !GCAT !GPRO Austrian national radio said on Monday that German tennis ace Michael Stich was apparently at loggerheads with Austria's revenue service over how much income tax he must pay in his adopted Alpine home. ORF radio said Stich, who has lived in the central Austrian city of Salzburg since 1992, was contesting the bill from local tax authorities. The tennis pro's tax file was currently being examined by the Finance Ministry in Vienna, ORF added. Neither the Salzburg tax bureau, the Finance Ministry nor Stich were immediately available for comment. The squabble centres on whether Stich qualifies for tax relief under Austria's so-called "skiers' edict" which exempts athletes, who compete across the globe but reside in Salzburg, from paying tax on three-quarters of their income. ORF said the tax authorities and Stich also disagreed over whether income from advertising or sponsors' contracts fell into the same category as other income. It was not immediately apparent how much money was in dispute. 7518 !E51 !E512 !ECAT !G15 !G158 !GCAT The European Union hopes to put differences with trade partners on hold for the rest of the year and focus instead on preparations for the World Trade Organisation's December ministerial meeting in Singapore. The WTO meeting -- the most important gathering of global policy makers since the organisation was formed in January 1995 -- will set the international trade agenda for the next decade. But various disputes between between the world's biggest trading partners -- the EU, the United States, Japan and China -- are undermining efforts for a unified approach to the December 9-13 meeting. Much of the EU's trade activities for the remainder of 1996 reflect these differences, but also highlight many areas where progress is being made in breaking down barriers. One of the key issues on the Singapore agenda is integrating multilateral clothing and textile pacts under the General Agreement on Tarrifs and Trade -- the precursor to the WTO. Sir Leon Brittan is due to present a report on the issue to his fellow commissioners on September 11. This report will also form part of discussion at a special informal meeting of trade ministers to be held in Dublin on September 18-19. The meeting will focus entirely on the WTO ministerial. Renato Ruggiero, head of the Geneva-based body, will also attend. The next General Affairs Council -- in Luxembourg on October 1 and 2 -- will also focus on the WTO meeting, but ministers will also hope to move forward on MEDA -- the ambitious EU-backed plan that aims to turn the Meditterranean region into a free-trade zone. October sees a series of eagerly awaited conferences on trade, multilateralism and European external relations. The European Institute for Legal Studies is holding a conference on regional trade agreements on October 2, the European Institute for Asian Studies discusses "The EU and APEC" (Asian-Pacific Economic Cooperation forum) on October 11 and Promethius Europe meets on the Euro-Meditterranean partnership on October 31. All are to be held in Belgium except Promethius Europe, which is to be in Marrakesh, Morocco. The WTO ministerial will be discussed at the special European Council in Dublin and again at the GAC on October 22. Over the course of the next five months the Commission also hopes to finalise the negotiations for new or renewed agreements with over a dozen countries. First up is a specific issue-based agreement with Albania (SEC(96)479&/2), which still requires scrutiny from the European parliament following irregularities in elections earlier this year. Another thorny agreement is that with South Africa (neg. SEC (95)1748). France is angered by what it sees as too-liberal agricultural concessions, while South Africa still feels its farm exports do not threaten Europe because they are generally not competing within the same growing season. Association agreements are due to be settled with Jordan (neg. SEC(95)418), Lebanon (neg. SEC(95)1025) and Egypt (neg. SEC(95)1772) as part of the Euro-Med accord, while Algeria's role in vaunted free-trade zone is subject to a separate agreement (neg. SEC(95)766) because of parliamentiary concern over democracy and human rights there. Framework agreements -- the lowest-ranked that the Union signs with other countries -- are due to be finalised with Australia (Neg. SEC(96)149), New Zealand, Cambodia (Neg. SEC(96)776), Mexico(Neg. SEC(96)1682), Bangladesh (Neg. SEC(96)777, Pakistan (Neg. SEC(96)776) and Laos (Neg. SEC(96)769). New agreements on relations with Bulgaria, Hungary, Poland, Romania, the Czech Republic and Slovenia will be discussed by the Commission later this month, while October will see them trun their attention to ties with states that made up the former Yugoslavia. 7519 !C13 !C17 !CCAT !G15 !G152 !GCAT !M12 !MCAT German mortgage banks fear that the German Pfandbrief mortgage backed securities, making up the fifth-largest bond market in the world, may lose appeal unless certain guidelines are altered. Walter Dieck, head of the German association of mortgage banks, told journalists in Bonn that capital markets could be disrupted if a European Union ruling planned to be enacted in 1998 comes into effect. So far, all German banks have to back only 10 percent of their holdings in Pfandbriefe with first tier equity capital. The commission is suggesting a change towards a 20 percent capital backing for mortgage Pfandbriefe. Dieck demanded that Pfandbrief owners should not be required to secure these instruments with a higher percentage of equity capital, arguing new EU rules would only make Pfandbriefe more expensive. Pfandbriefe, backed by a pool of mortgages on German real estate, generally have a very high credit quality because they can only be issued by specially authorised banks. Dieck also said investors may turn away from the instruments unless their status within Europe's planned currency union is cleared up. The group said it was still unclear whether the mortgage bonds could be used as assets in a securities repurchase agreement operation once European nations join a planned currency union and a European central bank sets policies. In light of their high credit ratings, Dieck also demanded that the Pfandbriefe be exempt from a consumer warning, which is envisioned in draft law. --Frankfurt Newsroom, +49 69 756525 7520 !GCAT !GODD While everyone living in Sweden is identified by an individual number, it may soon become commonplace for pets to also carry their own ID - on a tiny microchip injected under their fur. Sweden's Kennel Club said it was urging pet owners to take advantage of technology now available to electronically tag domestic dogs and cats using a microchip with the animal's name, sex, breed and owner's details. The chip can be read by special equipment held by authorities such as police and customs officials. The club said the chip could be inserted into the animal by injecting it under the animal's fur. It should last for the life of the animal. "It feels about the same as an ordinary vaccination and is not injurious to the animal," the Kennel Club said in a statement. The club said the microchip, costing about 200 crowns ($30), would replace an existing identification method of tattooing an animal's left ear, which proved unsatisfactory because dark, furry or small ears made tattoos hard to read. It said it hoped all animals registered with the club would be carrying either a microchip or a tattoo by January next year. ($1=6.6335 crowns) 7521 !C13 !C24 !C31 !CCAT !G15 !G153 !GCAT !GHEA The European Parliament will begin a public inquiry into mad cow disease on Tuesday and is likely to question the European Commission over whether it had placed market concerns above those of consumers. The French daily newspaper Liberation alleged on Monday that the Commission's chief agriculture official, Guy Legras, had suggested in 1993 that European Union veterinary experts avoid discussing the risk to humans posed by the disease. A memorandum which the newspaper says was sent by Legras said: "In my experience all discussions on BSE (bovine spongiform encephalopathy) inevitably cause problems in the beef market." The memorandum allegedly referred to the effects on the public of a German television programme about the fatal brain disease and went on to say that in order to maintain public confidence, discussion by the EU Scientific and Veterinary Committee should be avoided. Legras was not available for comment. It was the second time the Commission has been accused of taking such a stance. Reports of a memorandum from another official expressing similar sentiments were published earlier this year. The Commission said at the time that it did not reflect the executive's policy. On Monday, Commission chief spokesman Nikolaus van der Pas declined to confirm or deny the authenticity of the Legras memorandum. "I have nothing to add to statements we have made on a number of occassions to the effect that the Commission's actions speak for themselves," he said. It was a reference to the Commission's speedy ban of British beef exports after evidence of a possible link between BSE and a deadly human equivalent. Van der Pas added that the Commission would respond to all questions by the parliament and provide requested documents. EU Farm Commissioner Franz Fischler and Irish Farm Minister Ivan Yates, representing the current EU president, will speak to the inquiry on Tuesday. Asked whether Commission President Jacques Santer continues to have confidence in Legras, van der Pas replied: "There is no reason to say anything else but yes." In France, anti-EU campaigner and Euro-MP Philippe de Villiers said in a statemnent he would start legal action against the Commission following Liberation's disclosures. He said the documents "confirmed the commissioners' attempt to prevent at any cost the public being informed of the dangers of BSE for consumers". 7522 !GCAT !GPOL !GVIO France's ex-Marxist revolutionary Regis Debray on Monday responded with an attack on Communist Cuba to a charge that he was to blame for the 1967 capture and killing of Cuban revolutionary Ernesto "Che" Guevara. Debray, a theorist of Latin American leftist guerrilla struggle, told the daily Le Monde that Guevara's daughter Aleida made the charge under orders from the Cuban leadership. "The unfortunate Aleida Guevara is acting on official assignment," he said. "The Cuban leadership is hounding me because it wrongly believes that I am encouraging resistance networks." Aleida Guevara told the Argentine daily Clarin last week that Debray "talked more than he should have" when he was detained in Bolivia after visiting Guevara and his small group of Cuban guerrillas in the jungle. The Bolivian army hunted down and crushed the guerrillas, killing Guevara while Debray was in prison in Bolivia. Debray, a former adviser to the late French president Francois Mitterrand and author of a recent book critical of Cuban leader Fidel Castro, said he had described his captivity in Bolivia in a previous work and would not comment on the charge. Debray received the support of Daniel "Benigno" Alarcon Ramirez, one of Guevara's few surviving companions who lives in exile in France. He told Le Monde that Debray had no reason to respond to "stupid accusations". "(The charge) is fresh evidence of the cynical Stalinism that has pervaded a revolution which I loved and served when it was still a revolution," he said. "The Castroite regime dodges the precise questions I have asked it: why were we abandoned to our fate in Bolivia? It's among Cubans, and with history looking on, that we will have to talk things out," he said. 7523 !GCAT !GENT !GPRO Screen star Liam Neeson has had an emergency operation for an intestinal obstruction after being taken ill at the Venice Film Festival, the Warner Bros movie company said on Monday. Its Rome office said Neeson underwent surgery on Sunday at a hospital in Padua after he collapsed at the festival premiere of the controversial film "Michael Collins", in which he plays the lead role. "He has had an operation for a blockage of the intestine," a spokeswoman said, adding that Neeson was "doing well". She had no further information. The Northern Ireland-born actor's agent, who is based in Los Angeles and to whom queries were being referred, was not immediately available for comment. Michael Collins, directed by Dubliner Neil Jordan, recounts the life of the Irish Republican Army's director of intelligence who fought for Ireland's independence from Britain from 1919 to 1921. Although not due for release in Britain until early next year, some politicians have already said they feared the film would fan sectarian tensions in British-ruled Northern Ireland. Neeson, who co-stars in the film with Julia Roberts, was nominated for an Oscar for best actor for his performance in "Schindler's List". The press office of the Venice Film Festival said it had no information on Neeson's condition. 7524 !C21 !C42 !CCAT !E41 !ECAT !GCAT !GJOB A four-day strike by Portuguese train drivers has disrupted supplies of coal to a power station and car parts to a minivan saloon plant, a railways spokesman said on Monday. "The train strike has halted the transport of 4,500 tonnes a day of coal from the port of Sines to the Pego power station," Americo Ramalho, spokesman of Portuguese state railway company Caminhos de Ferros Portugueses (CP), told Reuters. A source in Tejo Energia, a private company which owns the 600 MegaWatt power station in central Portugal, confirmed that the usual three train loads of coal had been suspended since the strike began on Friday when only one load reached Pego. He said the power station presently had stocks of 190,000 tonnes of coal -- enough to meet the electricity needs of customers across Portugal. "I think it is a manageable situation," he said. But the source said that the stocks could drop below the strategic minimum level of 170,000 tonnes by Thursday if CP did not manage to deliver some supplies to the power station. CP, which was negotiating with trade unions to resume supplies to Pego, had a contractual obligation with Tejo Energia to maintain stocks of at least 170,000 tonnes, the source added. CP expected to reduce the daily transport of car parts from five train loads to three to the Ford -Volkswagen plant at Palmela, 30 km (18 miles) south of Lisbon, Portugal's biggest foreign investment project, Ramalho said. AutoEuropa officials were not immediately available. The rail strike had also suspended a daily train load of ammonia to a private Portugese company, Ramalho said. Portuguese international and intercity trains were halted on Monday for the fourth straight day by the strike called by some 1,500 drivers pressing for better working conditions. CP was using buses to take Paris-bound travellers to the Spanish border where they could continue their journey by train. Passengers for Madrid, the other international destination served by CP, were being taken all the way by coach. Drivers were striking to press for improved career structures, a nine-hour limit to the working day and longer rest periods between trains. Ramalho said he was unaware of any new meetings being called to try to end the strike, due to continue until September 6. "We are open to dialogue," he said, but declined to identify the main hurdles in talks. CP management last met unions for informal talks last Friday, he added. The drivers' action was hitting train links between major cities, particularly between Lisbon and Oporto, although passengers could use the slower regional services which make frequent stops. 7525 !GCAT !GCRIM Belgian children returned to school on Monday after the summer break in a grim mood over the deaths from starvation of two eight-year-old girls while in the hands of a paedophile sex gang. As the schools reopened police began fresh searches for bodies and clues at four of the six houses in and around the southern city of Charleroi owned by convicted child rapist Marc Dutroux, key suspect in an affair that has shaken all Europe. "I find what they did disgusting. We should do the same to them," one young girl at a small school in the village of Herbeumont told RTBF television. "They should be killed." Claudy Labiouse, the school's head teacher, handed out sheets of paper to the children for them to write down their feelings or questions about the scandal. At some schools in the Flemish part of the country pupils turned up wearing white T-shirts as a gesture of solidarity with two other girls -- An Marchal and Eefje Lambrecks -- who Dutroux admits kidnapping a year ago. The girls' fate remains a mystery. Dutroux led police on August 17 to the bodies of eight-year-olds Julie Lejeune and Melissa Russo in the garden of a house he owns in Sars-La-Buissiere, south west of Charleroi. Two days earlier police had rescued Laetitia Delhez, 14, and Sabine Dardenne, 12, from a basement dungeon in Dutroux' house in another Charleroi suburb. Both had been sexually abused. On Monday, following a weekend of rest after two gruelling weeks of searches, police returned to both the houses. They also resumed digging at the Dutroux' house in the Charleroi suburb of Jumet, formerly occupied by Frenchman Bernard Weinstein, an accomplice whom Dutroux admits murdering. His body was found next to Julie and Melissa. Investigators using special British radar-imaging equipment to locate underground cavities that may contain bodies, found two "hot spots" in the cellar of the house on Friday. British police superintendent John Bennett was in Jumet on Monday. Police plan to demolish a shed in the garden where they spent three days digging last week, excavate the whole area to a depth of five metres (yards) and begin digging the "hot spots". Investigators, who met on Monday in Charleroi to set out a timetable for their searches, also finished emptying another Dutroux house in the Charleroi suburb of Marchienne-au-Pont, the home of Michel Lelievre who like Dutroux has been charged with abduction and illegal imprisonment of children. Police have already found trench-like cells dug in the cellar of the house along with evidence of occupation by abducted children, and plan further searches. The discovery of the web of paedophile abduction, porn and death has horrified the country, prompted the government to tighten the rules on early release of sex offenders and triggered calls for a global war against the child sex trade. Dutroux, an unemployed electrician, was released 10 years early in 1992 after serving only three years of a 13-year sentence for raping five children. This, and the fact that he has fathered three children by his two wives, has bewildered adults and children alike. The hunt for missing girls has spread beyond Belgium's borders. Belgian police have visited Slovakia and the Czech Republic, and have contacted colleagues in Austria and Germany. Dutroux has been named in Bratislava as a suspect in the murder of a young Slovak woman and the planned kidnapping of at least one other. Nine people are now under arrest in the Belgian affair including Dutroux's second wife Michelle Martin. 7526 !GCAT !GPRO Britain's Prince Charles, in his first public appearance since the official end to his marriage to Princess Diana, attempted to turn the spotlight away from his private life on Monday. Speaking about architecture to German community leaders in this city just outside Berlin, the Prince of Wales did not utter a single word about the divorce last week from Diana that formally ended their marriage after 15 years. Prince Charles delivered a 15-minute address to local community leaders, expounding his views on architecture and urban renewal and quickly left afterwards without taking any questions. He received a frosty reception from the group of about 100 after arriving 45 minutes late for his speech, which was scheduled to begin at noon (1000 GMT). There was no explanation for his delay. "It is a shame that many architects today think that architecture, to be real, must reflect what they perceive to be the awfulness of life, the impossibility of social interaction," Prince Charles told the local leaders. "On the contrary, I believe architecture has always had a role to play in reminding us of, and making visible, a higher view of things, which as human beings we also aspire to," he added. His speech was held in a villa near the Glienicke Bridge, which connects Potsdam to Berlin and where numerous spy swaps took place during the Cold War era. The American U2 pilot Gary Powers was once held in the villa's basement shortly before he was exchanged for a Soviet spy in 1962. The prince appeared tanned and energetic, if slightly nervous, while delivering the address to the local leaders. He made no comment on the end of his marriage and a press aide travelling with the prince made it clear he would not discuss the matter in any form. Prince Charles had spent the remainder of last week vacationing with his sons in Scotland avoiding the public eye. It was his second visit to the Berlin area within the last year. He was to spend the rest of his one-day trip to eastern Germany reviewing the work of his urban design task force with young architects from 11 countries who had spent two weeks studying in Potsdam. Potsdam, a city of decaying houses, cold communist-era housing blocks and budding building projects, served as host to the task force of students for two weeks, during which they offered suggestions for the city's future development. Charles's ex-wife, now known as Diana, reluctantly agreed to the divorce that was finalised last Wednesday. She has always attributed the break-up of the union to Charles's long-running affair with Camilla Parker Bowles, a divorced mother of two. 7527 !E51 !E512 !ECAT !GCAT !GDIP Dutch industrial inspectors Saybolt said on Monday their plans to despatch 14 monitors to Iraq and Turkey had been temporarily suspended. "Everything is on hold for the time being. The situation is not clearly established. We have spoken to the U.N. and are awaiting further instructions from them," Peter Boks, manager of business development at Saybolt, told Reuters. Boks said the situation may become clearer after Monday's Labor Day holiday in the U.S. 7528 !E12 !E21 !E211 !ECAT !G15 !G154 !GCAT !GPOL Italy's ministers start meetings on Tuesday to thrash out a critical 1997 financial budget package with the measures set to come under scrutiny from economists as signs of Italy's commitment to a single European currency. The country needs a tough budget to persuade markets it is serious about its aim of joining European and Monetary union (EMU) and stick as close as possible to the criteria laid down by the 1992 Maastricht Treaty on EMU. Italy's near-term goal to re-enter the ERM is likely to wait until the budget becomes law, inflation slips below three percent and there is another interest rate cut, and this is likely to be late this year or early next year, economists said. Foreign minister Lamberto Dini gave a similar timetable for the lira return to the ERM at the weekend. More immediately the government faces a tricky balancing act between measures strigent enough to please financial markets while keeping its key left-wing Communists allies happy in parliament. Ministers need to cut the public sector borrowing requirement by the 32.4 trillion lire ($21.4 billion) promised in its own three-year economic programme (DPEF), while not alienating the hard-left Communist Refoundation party on which the government depends for support in the lower house of parliament. "It's going to be a difficult balancing act and the fear is that the government will err on the side of caution and the budget will be less austere than first hoped," said Ken Wattret international economist at Paribas in London. Romano Prodi's centre-left administration must present its budget to parliament by the end of September and the package has to pass into law before the year is out, signalling a nervous time for Italy's notoriously volatile financial markets. Slowing Italian economic growth in the second quarter of 1996 and previous pledges not to touch Italy's two biggest areas of expenditure -- pensions and healthcare -- make the task of Prodi and his ministers even more difficult. Data last week showed GDP growth slowing more markedly than first forecast in the second quarter, showing that the economy if not already near recession was certainly pretty flat, and with a slowing economy tax revenues are likely to suffer. The DPEF forecast 1996 GDP growth at 1.2 percent in 1996 but Lorenzo Codogno, economist at Bank of America in Milan, sees growth of just 0.9 percent, although within the overall rise he does sees a recovery in the second half led by a small increase in private consumption. Prodi's undersecretary Enrico Micheli said today it would be difficult to touch pensions in the forthcoming budget after recent major revisions, while he would not be drawn on commenting on the healthcare side. Newspapers have reported the budget will contain cuts of some 21 trillion lire with the rest of the cash coming from increasing tax revenues. Many cuts have been agreed but the last 6-7 trillion were proving difficult to scrape together. Economists pointed out the great fear for the Italian financial markets is that the budget turns out to be a compromise fudging many issues with the cuts and revenue increases not seen as "concrete" and unlikely to be sustained. "We suspect the budget will be fudge, and the markets are right to be worried. Prodi is stuck between the hard-left and Europe," said one economist who declined to be named. Italy's inflation has fallen to 3.6 percent in July and is set to slip to 3.3-3.4 percent in August, while the downward trend prompted the Bank of Italy to cut its discount rate in late July to 8.25 percent from nine percent. ($1=1511 Lire) 7529 !GCAT !GDIS Fifteen Italians were injured when a tanker truck carrying waste sulphuric acid spilled its load near a popular beach resort early on Monday, police said. Most of the injured, two of whom suffered severe burns, were holidaymakers at a seaside chalet complex which was flooded by 22.7 tonnes of acid when the truck overturned. The accident happened on a bridge near the seaside town of Sperlonga, midway between Rome and Naples. Police said the truck tipped over in a collision with a vehicle in front of it. The driver was among the injured. Some of the acid, which was being taken to a waste disposal plant, seeped onto a beach and into the sea. Anti-pollution experts were sent to the scene. 7530 !GCAT !GCRIM !GDIP !GPOL A group of African immigrants fighting French expulsion orders said on Monday they would wage their legal battle for residence permits as a group and refuse to face the courts individually. The protesters, who were evicted from a Paris church after a two-month occupation last month, accused the authorities of trying to divide them. "We have decided that we would no longer individually dispute the expulsion orders or answer summons from the authorities, to whom we are proposing collective meetings," the group said in a statement. They called for a demonstration in Paris on Thursday, the third in as many weeks, to back their demands. The 210 protesters claim they are all entitled to stay in France. They say many of them enjoyed residence rights until hardline laws to curb immigration plunged them into illegality in 1993. The government says none of them has a legal right to stay but it has promised to review their situation individually on humanitarian grounds, predicting as many as two-thirds would get residence permits. Eight of the protesters have been deported to their home countries since police raided their church refuge. The protesters said two of these were fathers forced to leave their children behind while a third was dependent on medical treatment in France, contrary to Interior Minister Jean-Louis Debre's pledge that he would not break up families or deport anyone who was seriously ill. Most of the other immigrants have been released after a brief stay in detention though some still face deportation. One of them, Mauritanian Berke Camara, won a reprieve at the weekend when a judge ordered him freed after he refused to board a plane and obey an expulsion order. Although his request for asylum has been rejected, he describes himself as a political refugee fearing for his safety if sent back home. 7531 !C17 !C34 !CCAT !G15 !G157 !GCAT The German government was to hold a last-ditch meeting with the European Commission in Brussels on Monday to try to avert a court battle over subsidies to carmaker Volkswagen AG, European Union sources said. Johannes Ludewig, state secretary at the German Economics Ministry, and Competition Commissioner Karel Van Miert were to meet over lunch to discuss a compromise consisting mainly of freezing the funds, the sources said. Failing this, they said, the Commission would decide at its weekly meeting on Wednesday to ask the European court for an interim ruling, effectively blocking the money until a final decision on the case was taken. The spokesman for Commission president Jacques Santer also said on Monday that the issue would "undoubtedly" be discussed on Wednesday. Nikolaus van der Pass said the Commission had taken all necessary steps to go to court if necessary. The government of Saxony, which is at the heart of the battle for its decision to go ahead with the payments to VW despite EU qualms, indicated earlier it agreed with the Commission on the compromise. But this was far from having the blessing of the powerful German manufacturer, the sources, speaking on condition of anonymity, added. There were no details on the compromise itself other than it must be "legally acceptable". Discussions were still going on about how long the funds would be frozen and unspecified commitments to be given by the German authorities. The Commission allowed in late June an investment aid of 540 million marks for two VW plants in the formerly communist east German state plagued by unemployment out of a promised 780 million marks. In an unprecedented challenge to the EU's authority, Saxony announced in July it would go ahead with the payment of 141.9 million marks, part of which was declared illegal. The EU sources said Volkswagen had so far received "over 100 million marks illegal money" with more pencilled in for 1996 and the coming two years. There has been no complaint from rival car manufacturers or national governments about the episode, the sources said. Saxony has repeatedly argued that, together with the other former east German states, it is entitled under EU law to special treatment to compensate for decades of communist rule Kurt Biedenkopf, premier of Lower Saxony state, told German television on Monday that Germany and the Commission must get together and set a framework for subsidies until 2005. But an EU source said that this was not part of the discussion on the Volkswagen subsidies which came under general rules on state aid to the car industry. Under article 92(c) of the Treaty of Rome, the EU has allowed aid to compensate for the effects of Germany's division. This resulted in billions of marks being channeled from the central government to an ailing state-controlled eastern industry before it was privatised, but Van Miert has said publicly and repeatedly that this must end. 7532 !C13 !C31 !C312 !CCAT !G15 !G153 !GCAT The European Commission said on Monday it has used its emergency powers to buy-in young calves following a collapse in France's summer export trade to Italy, It said in a statement the measure allowed calves weighing a minimum 300 kg to be bought into intervention up to a maximum age of 10 months at a price 23 percent higher than the normal intervention price. "The Commission has used its emergency powers to buy in young calves because the market for weaning calves normally exported by French producers to Italy in the summer has collapsed," a Commission official said. The measure only applied during the month of September. Farm Commissioner Franz Fischler has included the introduction of a temporary intervention policy for young calves as part of his beef sector support plan, to be considered by agriculture ministers on September 16. "The proposal to introduce an intervention programme for young calves is considered to be one of the least controversial in the package amending the CAP beef regime (EEC-No 805/68). "Should ministers not approve the proposal the Commission would not be able to use its emergency powers to continue the programme beyond September," the official said. --Brussels newsroom, +32 2 287-6830 7533 !E12 !ECAT !G15 !G154 !GCAT !M13 !M132 !MCAT Investors have little to fear from a single European currency in any legal sense as their rights to redeem investments in the currency of their choice will remain in force, a new study showed on Monday. Worries that a contract denominated in a national currency would not be redeemable in the same currency after the start of economic and monetary union (EMU) are unfounded, say Charles Proctor and Gilles Thieffry of Norton Rose, a London law firm. While the European Commission has already gone to great lengths to dispel such concerns, Proctor and Thieffry say the nature of British and international law currently provides investors with ample protection. "English law already has at its disposal the tools which are necessary for dealing effectively with EMU and continuity of contracts; and existing contracts will continue in force, EMU notwithstanding," the authors write. Since much of Europe's currency and bond trading is conducted in London, English law is seen as the relevant factor for many investors. Under English law a financial contract could be terminated by the "doctrine of frustration" if its obligations become incapable of being met or the nature and quality of meeting them changes radically. But the doctrine could not apply to a contract "merely on the ground that it is expressed in a national currency which participates in the changeover" to the single currency. "EMU and the changeover to the Euro cannot result in the frustration or termination of a contract governed by English law; any contracting party who seeks to allege otherwise will be on course for an expensive dissapointment," they added. A separate question is the legal standing of financial contracts entered into in London but written in law outside of Britain. A large percentage of such contracts are under New York law, but again, the risks to investors are considered minimal. Given the constraints of international law, "New York courts...would have to recognise the Euro and give effect to the officially stipulated exchange rates," the study says. "Otherwise, the U.S. would be placed in breach of an obligation which it owes to Euro-participating states." Agreement on a legal framework for EMU is one of major hurdles the European Union faces this year in ensuring the Euro is launched smoothly on January 1, 1999. Financial markets want a framework in place as soon as possible so that the necessary preparatory work for the changeover process can begin. Hopes are to have such a framework agreed by year-end. It is one of the items on the agenda when EU finance ministers meet in Dublin on September 20 and 21. 7534 !GCAT !GCRIM Two Austrian men arrested on suspicion of sexually abusing young refugee children have been released pending further investigations, the prosecuting attorney's office said on Monday. News that the two suspects had been freed provoked an outcry from social workers, who expressed concern for the children's safety. Some demanded the men be held in detention throughout the probe. "It doesn't seem to be sensible that the two alleged culprits are free again," said Josef Weidenholzer, head of the social organisation Volkshilfe in Linz, 200 km (120 miles) west of Vienna where the abuse was said to have taken place. "Someone must not have been thinking what consequences this could have," he told Reuters. He said the children and their families were in shock, adding there were widespread fears the two alleged child abusers could now erase any possible traces of a crime. The men had supposedly lured children as young as four from a refugee shelter in Linz to their homes by offering them between 500 and 5,000 schillings ($50 to $500) for sexual favours, sources close to the investigation said. "One of the men allegedly focused on little girls and the other only dealt with little boys," Weidenholzer said. Police declined to confirm newspaper reports which said the two men lived in the same building which houses the refugee shelter. The men, aged 62 and 37 respectively, were arrested on August 12 on suspicion of sexually abusing a series of refugee children aged between four and 15, a spokesman for the Linz regional court said. "The older one was released on August 14 due to lack of immediate evidence. The other was released on August 26 on the condition that he change his place of residence," he said. The prosecuting attorney's office in Linz said the older suspect had been set free unconditionally. Police have completed their probe but the court is still investigating the case, a prosecutors' spokesman said. The suspects have not been officially charged and it was not known if or when a charge would be brought, he said. Revelations of the child sex abuse scandal came less than a week after Vienna police detained three men on charges of sexually abusing minors and producing child pronography in a suspected network spread across central Europe. The Austrian cases follow on the heels of a child abuse and murder case in Belgium, involving a suspected child pornogrpahy ring stretching as far as Austria's neighbour Slovakia. The Slovak capital of Bratislava is less than an hour's drive from Vienna. Austrian police declined comment on any possible link between the Belgian case and the Austrian arrests. But Weidenholzer, whose organisation is involved in refugee support work and has been investigating the abuse claims for an undisclosed period, said the case in Linz probably involved a larger ring of professional child abusers. "The sums of money involved are too large and our investigations have shown the contact between the children and their abusers was frequent," Weidenholzer said. "There were certainly more people involved in this terrible tragedy." 7535 !GCAT !GPOL Here are the latest opinion polls tracking national support for Germany's main political parties: SEPTEMBER 1996 CDU/CSU SPD FDP Greens PDS Emnid Sept 1 41.0 33.0 6.0 10.0 6.0 AUGUST 1996 CDU/CSU SPD FDP Greens PDS Elect Res Aug 23 41.0 35.0 5.0 11.0 4.0 Emnid Aug 25 41.0 34.0 7.0 10.0 6.0 Allensbach Aug 21 37.2 32.8 8.0 13.0 5.6 Emnid Aug 18 41.0 34.0 6.0 10.0 5.0 JULY 1996 CDU/CSU SPD FDP Greens PDS Emnid July 7 39.0 32.0 7.0 11.0 5.0 Elect Res July 40.0 33.0 6.0 12.0 4.0 JUNE 1996 CDU/CSU SPD FDP Greens PDS Emnid June 30 39.0 33.0 6.0 12.0 5.0 Elect Res June 21 42.0 33.0 6.0 12.0 4.0 Allensbach June 12 37.4 32.8 7.3 12.3 5.4 Forsa June 6 39.0 36.0 6.0 12.0 5.0 MAY 1996 CDU/CSU SPD FDP Greens PDS Emnid May 26 40.0 31.0 6.0 13.0 6.0 Elect Res May 25 43.0 32.0 6.0 12.0 4.0 Forsa May 23 38.0 37.0 7.0 11.0 5.0 Allensbach May 15 38.5 32.5 8.1 12.0 4.4 APRIL 1996 CDU/CSU SPD FDP Greens PDS Emnid April 28 40.0 32.0 5.0 11.0 5.0 Elect Res April 20 43.0 32.0 6.0 12.0 4.0 Allensbach April 17 38.1 32.3 6.5 12.9 6.3 OFFICIAL RESULTS OF THE OCTOBER 16, 1994 GENERAL ELECTION: CDU/CSU SPD FDP Greens PDS 41.5 36.4 6.9 7.3 4.4 NOTE: Elect Res = Electoral Research Group (Forschungsgruppe Wahlen) -- Bonn newsroom, +49 228 2609760 7536 !GCAT !GDIP !GVIO France said on Monday that clashes were continuing between Kurdish factions in northern Iraq and called for the fighting to stop. A Foreign Ministry spokesman said the situation on the ground appeared "confusing" but noted the announcement by Baghdad that it had withdrawn its forces from the area, and said the withdrawal appeared to have been confirmed by the United Nations. "The situation continues to be marked by confrontations between rival Kurdish groups, and we would like these clashes to stop," spokesman Jacques Rummelhardt told reporters at a regular ministry briefing. "We are worried by the damage being caused to civilian populations that have already been severely tried." The spokesman declined all comment relating to possible major power military action in the region beyond saying that France would act in conformity with international law. The United Nations said on Monday that Baghdad's troops had left the northern Iraqi town of Arbil, the administrative centre of the Kurdish-controlled north which Iraq took in a joint assault with a Kurdish faction at the weekend. But the Patriotic Union of Kurdistan (PUK) faction said Iraqi soldiers remained in Arbil and were carrying out mass executions there. 7537 !G15 !GCAT Questions over mad cow disease, the single European currency, and trade with America faced the European Union on Monday when institutions reopened and officials returned from their August break. Also on the agenda as the 15-nation bloc ended its traditional month-long holiday were negotiations on a new EU treaty and a row with Germany over government aid to Volkswagen. A crisis caused by the ban on British beef exports over bovine spongiform encephalopathy (BSE), or mad cow disease, dominated EU business for much of June and July. Officials on both sides of the English Channel had hoped a plan agreed by the EU for dealing with the disease -- including a massive cull -- would ease the political strain. But a recent scientific report that BSE is likely to disappear early in the next decade has triggered demands in Britain for the cull to be limited. The rest of the EU is unlikely to agree, leading to renewed tensions. On the economic front, EU countries seeking to adopt a single currency in January 1999 will be struggling to get their budgets in order and EU officials will be under pressure to solve some tricky technical issues facing the project. A budget stability pact, a new Exchange Rate Mechanism and the legal underpinnings of a common currency will all be addressed by the European Commission, the EU's executive, during the early part of this month. Together with the views of the European Monetary Institute, forerunner to Europe's central bank, the conclusions will form the basis for discussion among EU finance ministers meeting in Dublin on September 21. Germany and France reiterated over the weekend their intention to stick with the strict criteria for joining the currency despite worries that they will not themselves qualify. In international matters, the EU, along with most of the rest of the world, has been infuriated by new U.S. laws that impose restrictions on foreign companies conducting certain kinds of business with Cuba, Iran and Libya. Stuart Eizenstat, a special U.S. envoy given the task of selling Washington's anti-Cuba law to the rest of the world, was to talk to Brussels officials on Tuesday and Wednesday. He faces a tough task. In July, EU foreign ministers, while hoping to avoid a trade war with America, gave the Commission a mandate to draft counter measures against the laws. Some of these should be formalised at the Commission's weekly gathering on Wednesday, then handed to foreign ministers for discussion at an informal meeting in Tralee, Ireland, on Saturday and Sunday. The ministers will also focus their attention on the bloc's plans for a new treaty, currently being negotiated as a precursor to bringing in a dozen or more countries from eastern Europe and the Mediterranean. Talks on the new treaty -- conducted in a so-called inter-governmental conference (IGC) -- are to speed up over the next few months following an instruction from EU leaders for a draft treaty to be ready for their December summit in Dublin. Meanwhile, a row with Germany over subsidies paid to Volkswagen by the state of Saxony was set to be discussed by commissioners at the executive's Wednesday meeting, the first for a month. At issue is a 91 million marks ($61 million) chunk of aid paid in a package towards two plants in the formerly communist east German state. The Commission considers the aid illegal, while Germany considers the former East Germany still in need of special treatment under EU law. A compromise was in the works. 7538 !C13 !C31 !C311 !CCAT !G15 !G152 !GCAT Germany is starting to deregulate its natural gas distribution business in accordance with EC guidelines, Dr Elmar Becker, Ministerial Director of the Federal Ministry of Economic Affairs said on Monday. Becker told an industry conference here that discussion of a single market for gas under EC guidelines, and boosted by the Irish presidency, was under way. "If market liberalisation across Europe is to work, then parallel market liberalisation in member states must first take place," he said. "To give credibility to this and to set a good example, the Federal government has set an initiative for the distribution of gas. We expect it to be approved in September or October". Becker was echoing comments made by economics minister Guenther Rexrodt on Friday. "It should mean lower prices for consumers and will also be good from an ecological point of view," Becker added. Gas use in Germany has grown at a tremendous pace, he told the conference, organised by the International Energy Agency. "Thirty years ago, gas accounted for only one percent of primary energy in Germany and Europe. Now it's 20 percent". In eastern Germany, the change has been particularly rapid. "Since unification, we have converted households and pipelines to natural gas at a cost of 10 billion marks in four and a half years," he said. "All agree natural gas will enjoy excellent prospects for growth." The ministry estimates that gas as a proportion of Germany's primary energy will reach 22 percent by 2010, and 24 percent by 2020. "At present imports from Russia and North Africa are particularly important for Germany. But Norway is growing in importance - its supplies are on the doorstep of Europe". Becker added that the federal government is working with German industry towards a voluntary commitment to reduce carbon dioxide emissions by 20 percent by 2005. "To prevent further global warming it's important to use gas in vehicles - especially buses and freight fleets," he said adding that the government has reduced the tax on natural gas vehicles to boost the fleet's size. --Sebastian Alison, Berlin Newsroom. 7539 !G15 !GCAT Following are highlights of the midday briefing by the European Commission on Monday: Spokesman Nikolaus van der Pas confirmed that the Commission had agreed two new measures to support the beef market following the opinion of the beef management committee which met on Friday. In response to a question, spokesman Gerard Keily announced that the Scientific Veterinary Committee would meet on Friday to discuss possible transmission of mad cow disease from cow to calf. Van der Pas said the Commission would discuss the dispute over aid to Volkswagen, the future of the European Coal and Steel Community (ECSC), production quotas for hydrochloroflourocarbons (HCFCs) and plurality of the media during its Wednesday meeting. - - - - The Commission released the following document: -Midday Express ME96/2.9 7540 !GCAT !GODD A German woman was so taken with a man she saw fishing while on holiday in Ireland that she placed an advert in an Irish newspaper to track him down, and was "astonished" when he telephoned her. Tina Rutschlin from Grenzach, Germany, placed an advert in the Examiner newspaper saying: "ME - German woman, long black hair, on holiday with my girlfriend. YOU - Irishman from Cork, blond hair. You were fishing. We have only spoken a few words but now I cannot forget your smile". Her quest was rewarded on Sunday when the man phoned her, the Examiner reported. "I was astonished when he rang. I could not speak with surprise. He said he remembered me too. He asked me when I could come back to Ireland," it quoted her as saying. 7541 !GCAT !GPOL One of Sweden's most colourful political leaders, tub-thumping left-winger Gudrun Schyman, admitted to the nation on Monday that she had a drink problem. Schyman, 47, leader of the Left Party who has been seen at rave parties, said she had decided to own up publicly to her drink problem rather than risk being exposed by the media. "I have never taken any political decisions while under the influence," Schyman told a morning nationwide television programme, Rapport. Friends said she would seek treatment at a substance abuse centre. "I assume that I will remain party leader," she said. The Left Party has just 22 seats in the 349-seat parliament but has often saved the ruling Social Democratic Party, which governs with a minority. Other representatives from the Left Party, formerly the Swedish communist party, said no decision had yet been made on the group's future leadership. The Left Party met at the weekend to discuss the fate of Schyman, who became the second woman to lead a Swedish political party when she took the helm of the Left Party in January 1993. The party was to hold further talks on Monday. Schyman, a former social worker and unmarried mother, has frequently grabbed headlines for her party's ambiguous relationship with the ruling centre-left government of Prime Minister Goran Persson. Schyman has roundly condemned moves by Persson to cut state spending but has stopped short of voting with the main right-wing opposition in parliament. 7542 !GCAT These are leading stories in afternoon daily Le Monde. FRONT PAGE -- Socialist party secretary Lionel Jospin prepares 1998 legislative election, criticises President Jacques Chirac for not meeting his electoral promises. BUSINESS PAGES -- European aircraft industry seeks to unite and fend off U.S. competition. -- Aerospatiale aircraft manufacturer expects a return to profit for 1996, says civil aircraft manufacturing is its main source of profit. -- Paris Newsroom +33 1 42 21 53 81 7543 !GCAT Following are some of the leading stories in Norwegian papers this morning: AFTENPOSTEN -The Russian community of Barentsburg on the Norwegian arctic island of Spitzbergen is in a rage over the recovery operation of a Russian airliner, which crashed into a mountain there last Thursday killing all 141 people on board. The community has sent a letter to Prime Minister Gro Harlem Brundtland complaining about the Norway's rescue efforts. -U.S. pharmaceutical company Abbot has made an agreement with Norwegian drugs group Axis to buy Axis' comercial test for homocystein. Axis, which is listed at the Oslo Bourse, will launch the homocystein test at the turn of the year. DAGENS NAERINGSLIV -Despite the risk of an acute power shortage next winter due to low water levels in hydropower reservoirs, Norway's power imports have not increased. The latest report from the government Statistics Bureau shows imports should be considerably higher to secure supplies for industry. -Norwegian oil company DNO has sued insurer Vital for violation of Vital's obligation to inform its shareholders. DNO says it suffered financial losses when Vital failed to inform sharholders over a bid last year by Dutch insurer Aegon to take over Vital. -The Norwegian Associasion for Trade and Industry has an image problem, says outgoing president Didrik Schnitler. The organisation has been criticised for its stance on salaries for the top jobs in industry. 7544 !GCAT !GDIS Norwegian and Russian rescue workers had by Monday morning recovered the bodies of 91 of the 141 people killed in a Russian plane crash on the Arctic island of Spitzbergen, the Norwegian news agency NTB said. Improved weather conditions overnight allowed rescuers to bring down 71 bodies from the crash site, which were to be flown later by helicopter to the nearby town of Longyear, NTB said. The Tupolev TU-154 passenger plane was bringing Russian and Ukrainian miners, some with families, to work from Moscow when it crashed into a mountaintop in an accessible part of Spitzbergen on Thursday, killing all on board. On Saturday 20 bodies were flown to the northern Norwegian city of Tromsoe, 500 miles (800 km) to the south, for identification. Blood samples from relatives of the dead were being flown from Moscow for use in identification. Most of the bodies were so badly damaged in the crash that DNA technology will be the only means to identify the dead. Salavage operations have been hampered by tough terrain, unpredictable weather and a disagreement between Norwegian and Russian officials over jurisdiction. Norway governs Spitzbergen but shares the island's coal resources with Russia under a treaty dating back to the 1920s. NTB said the rescue was suspended for two hours on Sunday night while Russian workers investigated a piece of wreckage stamped with the international symbol for radioactive material. Search leader Paul Nauste said the wreckage was believed to be part of the plane's instrumentation. No radioactive leakage was found and rescue operations were resumed, he said. Relatives of the victims from the island's Russian mining communities of Barentsburg and Pyramiden were due to hold a memorial service near the crash site later on Monday, NTB said. 7545 !GCAT Following are some of the main stories in Dutch newspapers today. Reuters has not verified these stories and does not vouch for their accuracy. HET FINANCIEELE DAGBLAD - Analysts upgrade recommendations for transport firm Nedlloyd. (p1) - Shareholders in investment company Nederlandse Elevator Beleggingsmaatschappij (NEBM) reject 1995 accounts. (p1) - Amsterdam Stock Exchange Association seeks to tighten issue prospectus criteria. (p1) - Public Prosecutor to press ahead with taking suspension maker Weweler insider trading case to court. (p1) - Engineering bureau Grontmij books first-half net three million guilders higher at 5.1 million guilders. (p3) - Retailer De Boer Winkelbedrijven hikes margins, market share, boosts first-half net by five percent to 16.8 million guilders. (p3) - Suspension maker Weweler reports both lower first half net and gross margin. (p3) - Row escalates between investment group Robeco and shareholders' lobby group VEB on information supply during Rabobank takeover. (p 13) DE VOLKSKRANT - Christian Democrat MP wants chemical castration for sex offenders. (p1) - The Netherlands remains a prime agribusiness location despite all the gloomy news of late, says agricultural economist Dirk Strijker. (p2) - Environment minister Margreet de Boer orders inquiry into chloro-fluoro carbon (CFC) emissions during scrapping of used fridges. (p3) DE TELEGRAAF - Cabinet to allow employees greater freedom in choosing size of pension and retirement date. (p1) - Study by accountants Moret Ernst & Young indicates independent insurance agents appear the biggest single source of fraud in Dutch insurance sector. (p3) - Plastic producer Nyloplast's first half net drops 43 pct to 0.8 million guilders. (p13) TROUW - Central government wants more grip on steadily rising municipal taxes. (p1) - Dutch banks reluctant pioneers with electronic purse. (p4) ALGEMEEN DAGBLAD - Next year's petrol excise hike is the first in a series of measures to get people to use public transport, says environment minister Margreet de Boer. (p1) - Dutch horticulture should be relocated to Kenya, where it is environment-friendlier and cheaper, according to report: Make room for Africa. (p11) -- Amsterdam Newsdesk +31-20-504-5000 (FAX 31-20-504-5040) 7546 !C22 !CCAT !GCAT !GENT Up-market magazine publisher Conde Nast said on Monday it planned to launch two new UK titles in 1997, one focusing on travel and the other on health and sport. A British editon of U.S. magazine Conde Nast Traveler will be launched in September 1997. The American title, set up in 1987, has a circulation of 850,000. GQ Active, a health, fitness and sports magazine for men, will be launched as a monthly from April 1997. It will seek to build on the success of GQ, a UK men's monthly lifestyle magazine which has a circulation of 130,000. Conde Nast will run the two GQ titles as separate operations. A pilot edition of GQ Active in May of this year sold 70,000 copies and a second pilot is planned for October. Conde Nast managing director Nicholas Coleridge said the two new magazines would probably each have a 2.50 stg cover price. Asked about the start-up costs, he said it usually cost some five million stg to get a glossy magazine off the ground. Target circulation for each of the new magazines is around 75,000. They will publish 10 times a year, monthly except for combined December/January and July/August editions. Vogue and Tatler are among other British magazines published by Conde Nast Publications Ltd. The company is privately owned by the American Newhouse family through their Advance Publications Inc unit. -- Keith Weir, London Newsroom +44 171 542 8793 7547 !E51 !E512 !ECAT !GCAT !GDIP Iranian President Akbar Hashemi Rafsanjani arrived in Kenya on Monday at the start of a tour of six African countries aimed at expanding trade ties with African nations despite U.S. sanctions to isolate the Islamic republic. A smiling Rafsanjani walked out of his plane to the beat of African drums at the Nairobi airport where he was received by his host President Daniel arap Moi. The Iranian leader inspected a guard of honour mounted by the Kenyan Army before proceeding to State House, the presidency, for his first round of talks with Moi. Rafsanjani made no comments on his arrival at the airport where security was unusually tight. Members of his delegation also made no comments. But Kenyan Forein Minister Kalonzo Musyoka told journalists at the airport the visit would cement close bilateral ties between the two countries and enhance trade. "The visit is to improve our relations and seek ways to better trade and the things common between us," he said. The official Iranian news agency IRNA said Rafsanjani told reporters at Tehran airport before flying to Kenya that "Iran in its foreign policy gives top priority to expansion of ties with African countries." "Expansion of political, economic, cultural, educational and technical cooperation will be discussed during the visits," he added. "Iran intends to establish air links with African countries and expand banking cooperation with them." IRNA quoted Rafsanjani as saying he would discuss international developments during his talks in Uganda, South Africa, Zimbabwe, Tanzania and Sudan over a 12-day period. Rafsanjani's tour comes less than a month after U.S. President Bill Clinton tightened sanctions against Iran, which Washington accuses of sponsoring terrorism, a charge Iran denies. The law penalises non-U.S. firms that invest $40 million or more a year in the oil and gas sectors of Iran or Libya. It was Rafsanjani's first visit to Kenya. Moi visited Iran in 1995. This trip led to improved ties between the two countries and resulted in Kenya switching some of its oil orders to Iran from Saudi Arabia. Iran is eyeing African countries for oil and non-oil exports and has signed trade deals with several of them and exhibited products in Kenya and South Africa. 7548 !C33 !C331 !CCAT !GCAT !GDEF Britain will go ahead with the 40 billion pound ($60 billion) Eurofighter advanced combat jet, Defence Secretary Michael Portillo said on Monday. He told BBC radio that Britain intended to buy 232 of the planes, which he described as being "at the frontier of technology". "Britain is now ready to commit to production of this Eurofighter," Portillo said in an interview. "We want to buy initially 232 of them." "It means 14,000 jobs in Britain. It is very good news for British industry and indeed for the Royal Air Force." The plane, which will be the most advanced combat jet in the world when it enters service, has been developed by British Aerospace Plc, Germany's Daimler Aerospace AG, Alenia SpA of Italy and CASA of Spain. Sources in the industrial partnership say they want to see a firm memorandum of understanding between Britain, Germany, Italy and Spain by the end of this year so that they can complete the plane's development phase and begin work on the estimated 620 aircraft in the first production run. Following the resolution earlier this year of a bitter dispute over production work shares, Britain will have the largest share of the work on the project at 37 percent, followed by Germany with 30 percent. Portillo said he did not believe that Germany, which has shown reluctance for the high cost, could afford to drop out of the project. "I don't believe that Germany can afford in any sense to do without Eurofighter, not in terms of defence, not in terms of technology," he said. The first of Britain's fighters is expected to be delivered by 2001 so that they can enter service in 2002, industry sources say. The decision means the British Ministry of Defence is ready to spend 1.5 billion pounds to install production facilities. Asked about the commitment of the other European partners, Portillo said: "I am giving them a nudge, certainly, I am showing them that the British government is there first ready to commit to production. I very much hope that they will to." Portillo said the Eurofighter project would have enormous benefits for Britain's aerospace and defence industries. "I don't think we can dip out of producing this sort of aircraft with all the spin-offs, all the way across industry...that is the product of being involved in a project of this calibre." Portillo defended the 15.4-billion-pound development and production cost for the 232 Eurofighters to be ordered by Britain. "These prestige projects are not just the projects themselves. They are what they do for the country that produces them, what they say about that country and the expertise that they develop in that country." The jet is fitted with a "look and shoot" system so that the pilot can turn his head towards a target and a missile is automatically fired. It is also fitted with voice control so that the pilot can issue instructions without having to move his hands. 7549 !GCAT Prepared for Reuters by The Broadcast Monitoring Company DAILY TELEGRAPH -- AEA HARD LINE ON SELL-OFF. AEA Technology has fought off government attempts to keep a permanent "golden share" in the science and engineering based research and consultancy business. The government will on Monday publish the prospectus for AEA, the last privatisation candidate before the general election. It has promised employees there will be no special treatment for senior executives in the form of share options in the privatisation package. -- LONRHO HOPES TO SELL SHARES CHEAPLY. Directors of Lonrho are looking at ways of allowing shareholders to buy the company's trading division at a cut price giving them an instant profit on the shares in the demerged company. The move follows criticism of the demerger of Lonrho's Princess Metropole hotel group through a sale of shares in which the company's existing investors will have to subscribe on the same terms as others to retain an interest. -- M&S AND TESCO FIGHT FOR CITY APPETITES. Marks & Spencer will today open its first department store in the City. The store has an expanded food hall, while Tesco admits it is no coincidence that it will open its own Tesco Metro in Cheapside, as the two battle for City workers' stomachs. Marks has invested 30 million stg in the 53,000 square foot four floor store in Finsbury Pavement. THE TIMES -- SIMPSON ACCEPTS TOUGHER TARGETS OVER 10 MILLION POUNDS PACKAGE. GEC, the electronics group, in a move to head off an institutional revolt, is to tell institutional investors today that it will amend the contract of George Simpson, its new chief executive, adding stricter performance targets before he receives the lion's share of his 10 million pounds stg package. -- REFUGE MERGER FACES OPPOSITION. Prudential will this week decide whether to oppose the proposed merger between Refuge Assurance and United Friendly. Prudential which holds a 6 per cent stake in Refuge, is believed to be unhappy about the 1.4 billion pounds stg deal and is among a number of major shareholders who are considering voting against it at a meeting next week. -- AIRBUS 800-SEATER TAKING WING. The world's biggest jetliner is expected to get the go-ahead from Airbus Industrie this week at the Farnborough Air Show. Growing interest from airlines has convinced Airbus that the $8 billion development of the 800 seat capacity jet is viable and inevitable. The first passenger carrying jet could be in operation by 2003. THE GUARDIAN -- IMF BACKS DEBT RELIEF PLAN. As part of the plan approved by G7 leaders at the Lyon summit in June, the International Monetary Fund has indicated in a series of confidential papers prepared for a discussion by executive directors of the World Bank and IMF that it is willing to provide grants to reduce the debts of the world's poorest countries. -- FLEMING LEAVES HK VENTURE 700 MILLION POUNDS POORER. Robert Fleming, the blue chip investment bank, said yesterday that it had repatriated 700 million pounds stg of funds to London from its Hong Kong joint venture, Jardine Fleming. A spokesman for Robert Fleming insisted that the decision to move the portfolios in February or March, was not related to the regulatory scandal involving Jardine Fleming which emerged last week, despite the fact that the Hong Kong and British regulators started their investigations in January. -- NEW SETBACK FOR BA'S US ALLIANCE. The proposed alliance between British Airways and American Airlines will have another setback this week when the Office of Fair Trading is expected to rule that the deal is anti-competitive. Ian Lang, the Trade and Industry Secretary, who ordered the report, has the responsibility to decide whether the matter should now be referred to the Monopolies and Mergers Commission. THE INDEPENDENT -- EASTERN SET TO LOSE MILLIONS IN DASH FOR GAS. Eastern Group, the regional electricity company, is facing losses of tens of millions of pounds stg from its aggressive assault on the commercial gas market. Industry sources have suggested that Eastern's policy of grabbing market share by selling gas too cheaply has cost it at least 40 million pounds stg. In addition huge losses have been incurred on so-called take or pay contracts to buy gas from North Sea fields at fixed prices above the market price. -- FOUR MILLION "TO LOSE OUT" ON CHANNEL 5. The Government have been accused by Channel 5 Broadcasting of depriving up to 2 million British households of the ability to receive the Channel 5 signal. A request by Channel 5 Broadcasting, the backers of Britain's fifth terrestrial channel, for use of an additional frequency to transmit the service was being resisted by the Department of Trade & Industry. -- VIRGIN MOVE INTO BOOKS OPENS A NEW CHAPTER. The Virgin Megastore chain is to launch a full-scale attack on the book market with a range of titles aimed at its youth audience. The move into books is part of a strategy to improve sales at the Virgin-Our Price chain. Virgin hopes to achieve book sales of 25-30 million pounds stg by 1999, giving it around a 2 per cent share of the UK book market. BMC +44-171-377-1742 7550 !GCAT Prepared by The Broadcast Monitoring Company for Reuters FINANCIAL TIMES -- MINISTERS GIVE GO-AHEAD FOR 40 BILLION STG EUROFIGHTER The government is expected to use the Farnborough air show on Monday to announce that it will go ahead with production of the 40 billion stg Eurofighter advanced combat jet. Britain's other partners in the project, Germany, Italy and Spain, are expected to declare their approval for production later this year. The announcement commits the Ministry of Defence to spending 1.5 billion stg to install production facilities, with these funds to be channelled through BAe. -- ENGINEERS IN 20 MILLION STG CAMPAIGN TO ATTRACT APPRENTICES Yearco, a charity backed by leading engineering groups, is to launch an unprecedented 20 million stg campaign to improve the image of the industry and attract more apprentices. The move follows a decline in the numbers of appropriate young people taking up engineering apprenticeships, as 16- and 17-year olds face increasing pressure to stay on at school. -- CARNABY STREET FOR SALE IN UK PROPERTY REVIVAL Carnaby Street, the London shopping promenade which symbolised the affluence of fashionable young things in the swinging sixties, has been put up for sale by Dutch owners the Wereldhave property group. The move comes amid signs of increasing activity in the UK commercial property market. -- GAP OF 80 MILLION STG HITS HOSPITAL PFI DEALS The Department of Health has been forced to intervene to help meet funding gaps in two projects involving local health trusts constructing flagship hospitals under the Private Finance Initiative. Contract negotiations on the two hospitals -- one at North Durham and another for the Swindon & Marlborough trust -- have stalled because the trusts cannot afford to pay for the annual payments even though both projects meet their original specifications. Analysts warn the same problems could affect up to 10 other FFI hospital projects. -- TUC URGES 3 BILLION STG INVESTMENT IN JOBS AND TRAINING The TUC will publish its budget submission on Monday in which it calls for up to 3 billion sterling to be allocated in the next financial year for training and employment measures. The TUC claims the proposals contained in its report would create at least 360,000 new jobs and help stimulate faster growth in the economy. -- EURO '96 SOCCER GIVES ECONOMY A KICK A report to be published Monday from HSBC Markets in London reveals that a rise in retail sales and an increase in tourism income during the Euro '96 soccer championships in England in June contributed an extra 0.1 per cent to Britain's annual gross domestic product. Supermarket sales of lager during the week before England's national team was eliminated rose 55 per cent, and one pizza company reported an 89 per cent rise in home deliveries on the day of the England-Germany semi-final. -- ROLLS ROYCE LEADS ENGINE RACE UK aero-engines manufacturer Rolls Royce has emerged as a frontrunner ahead of U.S. rivals General Electric and Pratt & Whitney in the race to supply engines to power the new generation of 'super jumbo' jets. Rolls' advantage stems from a need for airlines to make an early choice as to which engines they want in their new Boeing 550-seat aircraft. Rolls is adapting existing technology while the U.S. companies are developing a new engine from scratch, enabling the British firm to bring its own engines to market quicker and at a lower cost. -- FLEMINGS MOVES FUNDS TO LONDON UK investment banking group Flemings, which has just moved the management of 700 million stg of investment funds to Britain from Hong Kong, has insisted that links with its Hong Kong-based fund manager Jardine Fleming remain as strong as ever. Flemings owns Jardine Fleming jointly with Jardine Matheson. However, the company says the decision to repatriate management of the funds was made before last week's disclosure of malpractice by one of Jardine Fleming's top Hong Kong fund managers. -- FORGEMASTERS SEEKS ADVICE ON 80 MILLION STG FLOAT Yorkshire-based engineering and steel forgings group Sheffield Forgemasters has sought advice from four rival stockbrokers on a possible 70-80 million stg flotation to take place this autumn or early next year. The company says previous plans for a flotation were delayed by its unwilling involvement in the Iraqi supergun affair, in which parts made by Forgemasters supposedly for a petrochemical plant were in fact destined for an Iraqi supergun. -- CME STARTS SLOVAKIA TV STATION Central European Media Enterprises (CME), the U.S. company which has pioneered commercial television in east Europe, has added a fourth national, privately-owned station to its holdings in the region. TV Markiza, a joint venture station, began broadcasting in Slovakia last week. CME already has operations in the Czech Republic, Romania and Slovenia, in addition to several local stations in Germany. For a full range of news monitoring services, phone BMC +44-171-377-1742 7551 !E12 !E41 !ECAT !G15 !G151 !G154 !GCAT !GJOB !M13 !M132 !MCAT Britain's lack of preparation for the single European currency could cost up to 20,000 jobs in industry and the City of London's financial district, an independent think tank said in a report on Monday. "London, which dominates the intra-European foreign exchange market, will lose foreign exchange business from a single currency whether the U.K. participates or not," said Douglas McWilliams, chief executive of the Centre for Economics and Business Research (CEBR). "London's lack of preparation will disadvantage the U.K. in becoming the leader in trading euros against other currencies." McWilliams warned London's status as Europe's leading financial market will be damaged if Britain cannot have access to the target system for banking settlements on competitive terms. Not only will other countries, particularly Germany, try to grab financial business from Britain, but international companies operating in Europe may relocate treasury departments away from London and other departments may follow, he added. "By contrast, if the U.K. were to become an early member of the euro area, this would almost certainly enhance the U.K.'s position as Europe's leading financial centre," McWilliams said. He sees a single currency emerging in some form by 2002. "The idea that the single currency is unworkable or that it will result in the long-term impoverishment of the European economies is implausible," he argued. 7552 !C13 !CCAT !GCAT !GHEA Doctors from across Europe urged airlines on Monday to ban smoking on all flights that use European airports to improve the health and safety of passengers and staff. "There is no such thing as a smoke-free area on any aircraft where even one passenger is smoking, as the air is recycled," Sandy Macara, chairman of the British Medical Association, said in a statement. Macara, who heads the 47-country European Task Force of Medical Associations, said: "The many airlines which have already successfully implemented smoking bans are to be congratulated for their responsible attitude to the safety and well-being of their passengers and staff." The European group is fighting a smoking ban on flights in conjunction with the World Health Organisation. 7553 !GCAT !GPOL Labour's about-turn over a separate Scottish parliament has cut its lead over the pro-independence Scottish National Party (SNP) by nine points, an opinion poll showed on Monday. The monthly System Three poll published in the Herald newspaper gave Labour 48 percent support, SNP 29, Conservatives unchanged on 15, and Liberal Democrats down three to seven. Party squabbles over leader Tony Blair's plan to hold a two-question devolution referendum if Labour wins an election -- to be held before May 1997 helped the SNP surge six points. The poll was held in 39 of Scotland's 72 constituencies between August 21 and 26, before Labour's Scottish executive met on Saturday to consider the referendum plan. A narrow victory for Blair was complicated by a call for a second referendum before a Scottish parliament used tax-raising powers. Opponents and some party dissidents said this showed Labour was back-tracking over home rule for Scotland. Labour originally pledged a separate Scottish parliament if it won the election but three months ago Blair said he planned a two-question referendum first. Prime Minister John Major says keeping the 300-year old union between England and Scotland will top his election agenda. Labour has 49 Scottish M.Ps, Conservatives 10, Liberal Democrats 9, and SNP four. In the 1992 election Labour won 39 percent of the Scots vote, Conservatives 26, SNP 22, and Liberal Democrats 13. -- London Newsroom +44 171 542 7717 7554 !C18 !C183 !C42 !CCAT !E41 !ECAT !GCAT !GJOB The privatised British water companies should be brought back under public ownership by a future Labour government, along with the railways, the leader of one of Britain's biggest general trade unions said. "We would in time bring the water industry back under public ownership, and under the control and ownership of the regional councils," GMB leader John Edmonds told Reuters in an interview. Before privatisation the water companies of England and Wales were run by local authorities, but the regional bodies planned by Labour would be more appropriate today, he said. Water shortages and high prices have made the privatised companies highly unpopular, and some union leaders believe nationalisation could be a vote-winner. Edmonds said his union also wanted the railway system back in public hands, but he acknowledged Labour's priority would not lie with any re-nationalisations, but rather with creating jobs, improving industrial training and raising education standards. The Labour Party -- which has cut back the influence of the unions over its policies even though it still gets much of its money from them -- has no plans to re-nationalise the water firms, and full-scale railway nationalisation is unlikely, too. On the other hand, Labour has pledged to introduce a national minimum wage, and Edmonds backed Labour's idea of setting up a commission including union and employer representatives to fix a level. At the annual conference of the Trades Union Congress (TUC) next week, the unions will debate a call by the National Union of Mineworkers for a minimum wage of 4.26 stg per hour to be brought in within three months of a new government. "That sounds like a recruiting slogan for Socialist Labour rather than anything that's got much to do with negotiations with the government," Edmonds said. The Socialist Labour Party was set up by miners' leader Arthur Scargill earlier this year after he left Labour in disgust at its centrist turn under Tony Blair. Edmonds said there was a case for setting a minimum wage in August, "as part of the clearing-up process" at the end of the pay round, but Labour seemed more likely to bring it in at the end of 1997 or early 1998, assuming an April or May 1997 poll. He accepted that as a realistic target date, but he said the minimum wage should be meaningful. "Certainly that figure will not be below four pounds," he said. Edmonds, one of the thinkers of the British labour movement, chaired the TUC committee that recently backed British membership of European Monetary Union, if EMU goes ahead. But Edmonds said the TUC would prefer EMU to be delayed from its planned 1999 start date, since it could be damaging to bring it in when European economies were depressed, and the GMB was more optimistic than the TUC about the chance of achieving that. The prospect of having a British government ready and willing to play a positive role in Europe -- in contrast to the "cavalier and maverick" behaviour of the present government -- might persuade the rest of Europe to listen, he said. "Having a UK government actually in the European Union, rather than the UK in and the UK government out, could make some significant difference," Edmonds said. He also hoped that a new government, offering "a much more consultative and participative approach", would help restore morale in industry, where resentment and insecurity were behind an increase in industrial unrest. In the short term, more strikes were to be expected, especially in the public and private services sector. "It's not going to come through in a new "winter of discontent', but there is going to be an increase in industrial action, much more selective than in the past," Edmonds said. --London Newsroom +44 171 542 7717 7555 !E12 !ECAT !G15 !G151 !G154 !GCAT !M13 !M132 !MCAT The Bank of England (BOE) will begin talks with London's financial community about how capital markets would be converted to the new euro currency if Britain joins a single currency, the Financial Times reported on Monday. A BOE official was not immediately available to comment on the report. The article said the Bank will also discuss the conventions that the market will operate under for issues such as trading days under European economic and monetary union (EMU), which is due to start in 1999. The FT said the BOE was due to publish a report in a fortnight summing up the preparations underway for EMU. "Meanwhile, it has also decided to establish a special co-ordinating committee to look at the way that bond markets will operate if the UK does join EMU," the newspaper said. The committee will include British Treasury officials and industry bodies and will look into how outstanding government debt should be treated if Britain joins EMU, the report said. --London Newsroom +44 171 542 6784 7556 !C33 !C331 !CCAT !GCAT !GDEF Britain wil go ahead with the 40 billion pound ($60 billion) Eurofighter advanced combat jet, Defence Secretary Michel Portillo said on Monday. He told BBC radio that Britain intended to buy 232 of the planes. "Britain is now ready to commit to production of this Eurofighter," Portillo said in an interview. "We want to buy initially 232 of them." The plane has been developed by British Aerospace Plc, Germany's Daimler Aerospace AG, Alenia SpA of Italy and CASA of Spain. Sources in the industrial partnership say they want to see a firm memorandu, of understanding between Britain, Germany, Itsaly and Spain by the end of this year so that they can complete the plane's development phase and begin work on the estimated 620 aircraft in the first production run. Following the resolution earlier this year of a bitter dispute over production work shares, Britain will have the largest share of the work on the project at 37 percent, followed by Germany with 30 percent. The first of Britain's 232 fighters is expected to be delivered by 2001 so that they can enter service in 2002, industry sources say. 7557 !GCAT These are some of the leading stories in two London-based Arabic-language newspapers on Monday. Reuters has not verified these stories and does not vouch for their accuracy. AL-HAYAT - Thirteen shipping firms operating between the Far East and the Gulf increase their cargo freight rates. - Jordanian Prime Minister Kabariti says increasing bread prices was a tough decision; says Jordan took the move to help save the economy. ASHARQ AL-AWSAT - Saudi health minister signs contracts worth 666 million riyals to import pharmaceutical products. - French and British firms sign contracts to build Sheraton and Hilton hotels in Jordan at a cost of $67 million. - More than four billion riyals is expected to be invested in 170 new plants in Saudi Arabia's eastern province. 7558 !GCAT !GVIO The home of the parents of a pro-British Northern Ireland "Loyalist" ordered to leave the country by his former associates was bombed early on Monday, police said. They said a device was thrown into the home of the parents of Alex Kerr, an associate of Billy Wright, a controversial Protestant militant who faces a death threat from Loyalist militants for opposing their ceasefire strategy. Police said Kerr's parents were treated for shock but escaped serious injury when the device exploded in the living room of their home on the outskirts of Belfast. Kerr himself is in jail facing charges connected to an attempted show of strength by armed Loyalists, so called because of their unswerving allegiance to the British Crown and opposition to Catholics who want Ireland reunited. He and Wright were ordered to leave Northern Ireland by the Combined Loyalist Military Command (CLMC), the umbrella group for Loyalist militia fighting to maintain British rule. The attack highlighted tensions in the Loyalist movement over a 23-month ceasefire they called to get their political spokesmen involved in Northern Ireland peace talks. Wright, known as "King Rat" to his supporters, is reported to be the commander of the mid-Ulster branch of Ulster Volunteer Force (UVF) guerrillas, which killed 900 Catholics in a 25-year war to avenge attacks by Irish Republican Army (IRA) units. He has survived six assassination attempts by the IRA, which wants an end to British rule, and has served one jail term for security offences but has never been imprisoned for membership of the outlawed UVF. Wright opposes the CLMC's strategy of maintaining a ceasefire and is suspicious of the peace talks because of the involvement of the Irish government. He was given until midnight on Saturday to leave Northern Ireland but says he has no plans to quit his home and claims widespread support in the Portadown area south of Belfast. David Trimble, leader of the province's most powerful mainstream Protestant party, has called for mediation to end the dispute, which threatens to lead to the explusion of the UVF's political spokesmen fromt he peace talks. Trimble, leader of the Ulster Unionist Party, said at the weekend that an attack on Wright would infringe the principles of non-violence which all parties to the peace talks have to espouse to take part. The IRA's political arm, Sinn Fein, is excluded from the talks until the guerrillas call a new ceasefire to replace a truce they broke in February with attacks on London and a British army base in Germany. 7559 !C11 !CCAT !GCAT !GENT Retailer J. Sainsbury Plc is considering taking part in the millennium exhibition planned for Greenwich in south east London, but has yet to make a firm decision. The company's plans were outlined in an article in Building magazine, which said the retailer could invest 12 million stg in the project as part of plans to upstage rival food superstore group Tesco Plc. Sainsbury said in response to the article it was "premature to say that we are committed to any project in particular at this stage." It said the Greenwich millennium project was one of many ideas which had been brought to its attention. The 350 million stg millennium exhibition is being financed in part by a grant from Britain's National Lottery. The article also said Sainsbury might be interested in building a supermarket on part of the Greenwich peninsula not earmarked for the millennium exhibition. Sainsbury said in response it was aware that the site, owned by British Gas, had planning consent for both food and non-food use. It said it was also aware of a number of development opportunities in the Greenwich area and had just given evidence supporting the development of a foodstore on Shooters Hill in Greenwich. -- London Newsroom +44 171 542 7974 7560 !C13 !CCAT !GCAT !GENV By Neil Winton, Science and Technology Correspondent Air travel could be the prerogative of the rich if environmentalists' plans to protect the skies from pollution are successful. The Green lobby says aircraft are a serious threat to the atmosphere and the pollution they cause is increasing. The industry must be curbed and ending the tax free status of fuel used for international air travel is the way to do it. "If the airline industry was a country it would rank about eighth in the world in terms of emissions, equivalent to a large Euorpean Union country, with the growth rate of an Asian Pacific tiger economy," said the Climate Action Network at a meeting in July of a United Nations commission on global warming. The tax free status for international aviation jet fuel, set by the 1944 Chicago Convention on Civil Aviation, should be ended, Climate Action Network added. The aerospace industry, gathering this week for the biennial air show in Farnborough, southern England, wants none of this. The industry insists it is not a major polluter, just an easy target compared with cars, lorries and power stations. Any increase in taxes would be unlikely to curb air travel. Taxes would simply raise the cost to ordinary people, slap down the growing air freight business, bring windfall gains to national treasuries, and ruin the hard-won efficiency of the world's airline industry. Because air travel is so crucial to modern life, it would be curbed only by huge tax increases, the industry says. The environmentalists will not be deflected. "An aviation fuel tax or some variation is coming and the industry should take appropriate action. We are the blinking warning light to the manufacturers and the airlines on global warming and aviation emissions," said Annie Petsonk, international counsel with the U.S. lobby group, the Environmental Defence Fund in Washington. Petsonk said although the aviation industry had made itself more efficient, overall emissions would continue to increase as demand for aviation rises. There was a possibility that an aviation tax would make serious inroads into the mass market for travel, she said, adding that this depended on the strength of the public's appetite for flight. "Leisure and business are all different. It may be that the tax would increase load factors," Petsonk said. The increasing level of pollution from planes had to be tackled urgently, she continued. "Aviation emissions are projected to increase from roughly three percent (of the world's total) today to as much as 10 percent in the midterm time frame. The altitude of the emissions means it is most active as a greenhouse gas and possible ozone layer depletion," Petsonk said. Greenpeace International's Bill Hare also sees this as a growing problem, but has a more conciliatory proposal. "The airline business is growing at about seven percent a year and current global emissions are between two and three percent. But because of the altitude the effect is more like five to six percent," said Hare, Greenpeace's climate policy director in Amsterdam. Hare says the best solution would be to include emissions from planes in each country's official pollution count, something which is not done currently. Emissions could then be subject to a national carbon tax and governments could decide on aviation's share. The independent World Energy Council (WEC) said those clamouring for action against airline pollution in the name of curbing global warming were aiming at the wrong target. "These proposals are misdirected. You should be phasing out huge energy subsididies, then tackle the biggest examples of inefficiency and waste," said Michael Jefferson, the WEC's deputy secretary general. Jefferson said air travel growth was in fact declining, from over 13 percent a year in the 1960s, to about nine percent in the 1970s, and less than six percent a year since then. Jefferson said the first losers from an aviation fuel tax would be the poor, and air freight which has been growing at about 12 percent a year since the 1960s. "All this to tackle about three percent of carbon dioxide emissions, about one twentieth of road vehicles, at least in the U.K. This shouldn't be the number one priority," Jefferson said. The International Air Transport Association (IATA) is understandably nervous about the tax possibility, especially after watching world airlines turn huge losses from 1990 to 1993 into expected profits this year of $6 billion. "We think that aviation has done a superb job of cleaning up its act and becoming more efficient, more so than most tranpsort industries," said IATA spokesman Tim Goodyear. "We would resist any attempts to introduce fuel taxes on international aviation," he said from his office in Geneva. But environmentalists believe the change is inevitable. "The pressure is building," said Dr Dan Lashof, senior scientist with the Natural Resources Defence Council in Washington. "We have to believe that the current situation where the average motorist has to pay in the U.K, for example, 50 pence (75 cents) a litre in tax every time he drives up to a filling station, while an aircraft can do the same and pay nothing cannot go on and pressure is clearly building to change it," Lashof said. 7561 !C33 !C331 !CCAT !GCAT !GDEF The UK government will announce on Monday that it is ready to go-ahead with production of the Eurofighter combat jet, the Financial Times said in its Monday edition. The paper said the decision means the UK is prepared to spend 1.5 billion stg to install production facilities for the advanced jet, product of a consortium from the UK, Germany, Spain and Italy. It said the announcement would be made at the Farnborough airshow, which begins on Monday, and comes after months of negotiations between the four goverments and the manufacturers of the jet over pricing for its initial production. But a formal go-ahead for the production investment phase will await similar announcements from the other partner governments, expected to made this autumn. The paper said the four main contractors, British Aerospace, Daimler Benz Aerospace, Italy's Alenia and Spain's Casa, had produced prices below previously indicated levels which had allowed quick UK approval of the process. -- Alexander Smith, London Newsroom ++ 44 171 542 7719 7562 !GCAT !GPOL One of the new foundation stones of Australian politics is becoming apparent: the Australian Labor Party is moving strikingly to the left. The shift suits Labor's new need for oppositionism, opposing for opposition's sake. This means that, as some have predicted, economic reform might be a paradoxically harder task under the new conservative Liberal-National government than it was under Labor. Whereas Labor now attacks the new government's reforms, its own reforms were generally attacked for not going far enough. "Inside Canberra" newsletter comments this week that Labor looks set to end its 1980s adherence of economic rationalism, a dogma that implies hands-off industry policy, market solutions to economic problems, balanced budgets and a hostility to big government and all its works. As Inside Canberra notes, Opposition Leader Kim Beazley last week justified the need to prop up Australian National, a loss-making government-owned rail operator, "in recognition of its contribution to the nation's rail system." Now that sounds an awful lot like the Australian Democrats, who have never paused to consider the economics before hugging a platitude. But we can now expect to hear much more of that sort of thing from Labor as the former government discovers that hard economics makes unattractive policies in opposition. The Liberal-Nationals discovered this in the 1980s but could do little about it. Labor then had the conservatives trapped. Bob Hawke, Paul Keating and (though often overlooked) ex-finance minister Peter Walsh came to power and strode into the right-wing ground and chased their opponents' into more extreme territory. Labor adopted unpopular reformist policies, but the conservatives were trapped into offering more of the same, which hardly won any votes. When that failed the Liberal-Nationals tried moderating their act, but at the cost of looking little different to Labor. It was the secret to 13 years of Labor government. But Labor in opposition is in no such trap; to look different from the government it need only trenchantly oppose every reform the government proposes. Moreover, the election cost many seats for Labor's Right faction, and the Left is now a much stronger force than it was before the election. Moving left also means more enthusiastic grass-roots support, which Labor has lost over the past 13 years. And it means that every hard government policy becomes an opportunity to score a political point. Already the budget tightening -- which would have won Liberal-National endorsement had Ralph Willis implemented it last year -- has been described as excessive by Labor. A slightly tougher user-pays system in higher education, which differs from Labor policy only by degree, is decried as an assault on equality in education. Get used to it. Everything propels Labor to the Left now. Nothing pushes it to the Right. This presents yet another quandrary for the Democrats. The Democrats' relevance declined when the new government arrived, armed with enough senators to get legislation through the Senate without the Democrats. It falls further with Senator Mal Colston quitting the Labor party, perhaps perhaps giving the government easy access to one of the two votes it needs in the upper house. (Independent Brian Harradine is the likely source of the other vote.) But the Democrats will hit rock bottom if they become indistinguishable from Labor. What would be the point of voting for a minor party that has little influence and is little different to a big party that might form government? The Democrats seem to have a choice. They can avoid looking like Labor by returning to their origins as a centrist party, or they can move further to the Left again. Moving to the Left would probably be a mistake, because an oppositionist Labor Party may chase them all the way, but that appears to be what Democrats Leader Cheryl Kernot has chosen to do. -- Canberra Bureau 61-6 273-2730 7563 !E12 !ECAT !GCAT !GPOL (From the "Inside Canberra" Newsletter) A sea change in political debate is emerging with the prospect of the Labor Opposition decisively moving away from the economic rationalist policies which since 1983 have been followed by the Hawke and Keating governments and by the Coalition. Senior Labor figures are prepared to shift to a far more interventionist policy approach and offer the electorate a re-industrialisation of Australia as its central policy. To do this will mean Labor will have to publicly spurn the policies of Paul Keating and his government. This will be tricky, because the opposition leadership, as Keating ministers, went along with it. But Labor believes it has no chance at the next election if it continues the same basic Treasury economic rationalist line which it pursued, and which is now being pursued by the Howard government with even more vigour. It is the failure of Labor to publicly reject its former policies and admit the failure of the Keating government which is weakening its credibitlity when it attacks the Howard budget. One senior Labor figure said to us this week of the policies of economic rationalism and free trade pursued by Keating: "We always knew it was bullshit." An admission indeed. Less colourfully but more specifically, Opposition Leader Kim Beazley in an interview in The Advertiser, Adelaide (August 26) said the government must be prepared to "prop up" operations such as the heavily loss-making Australian National "in recognition of its contribution to the nation's rail system." (It was propped up by the Keating government, but only because the election was approaching. There would have been no more propping up had Labor won the election.) Beazley said South Australia was in danger of being "de-industrialised." "We've got to re-establish the industrial heartland of SA," he said. There was no mention of this in Keating's day, only of glories awaiting us with APEC free trade. Lindsay Tanner, regarded as one of the best thinkers of the Left and now shadow minister for transport, told the Victorian Fabian Society recently: "The Labor Government was heavily constrained by Treasury ideology." And getting to the heart of the politics of economic policy he said the Keating government's agenda of deregulation, internationalisation, multiculturalism and Aboriginal reconciliation was dominated by his generation -- the generation of the '70s. "Unfortunately, much of the rest of Australia, including larger sections of Labor's base, does not share these views," he said. "They no longer merely tolerate or ignore these themes; in the 1996 federal election many actively rebelled against them." (The views expressed here are those of Inside Canberra, not Reuters.) -- Inside Canberra, 61-6 273-1600 7564 !GCAT !GDIP Australian Prime Minister John Howard left for the 27th South Pacific Forum on Monday saying he would support France's readmission as a dialogue partner to the group if that was the consensus of small island states. "I will be guided by the views of the smaller island states on that issue. If the consensus were to emerge for France to be readmitted, I'd be favourable to that," Howard said enroute to the Marshall Islands where the three-day Forum starts on Tuesday. The Forum suspended France as a dialogue partner last year after Paris' decision to stage a final series of nuclear tests in French Polynesia, between September 1995 and January 1996. Despite France signing the South Pacific Nuclear Free Zone Treaty in March, banning nuclear weapons and tests in the region, and offering post-test financial assistance to the region, some island states are not keen to readmit France. This is Howard's first overseas trip since his conservative government came to power in March. High on Howard's Forum agenda is economic reform for the South Pacific's small island states, some of whom are bankrupt or near bankruptcy. "It is an opportunity to discuss ways in which we can help each other in the area of economic development because it is in that area where I believe that Australia can make a very positive contribution," Howard said. A report by the Forum secretariat released on Sunday found poverty and inequality increasing in the South Pacific and that at least half the 16-member countries are "facing some form of economic crisis". A recent Australian National University report on economic reforms for Pacific island states recommends a free trade association, similar to the North American Free Trade Agreement (NAFTA), allowing guest workers into Australia and reviewing areas such as tariffs. "The idea of focusing on economic reform and openness is very important," said Howard, but added Australia did not favour a guest worker policy. Howard said that despite his government's stringent budget cuts, Australian aid to the Pacific would remain steady, but he declined to say whether it would be tied to economic reforms. "It's always undesirable for Australia, being the largest country in the forum, to be laying down the law in advance of the discussion," Howard said. The annual Forum brings together leaders from Australia, the Cook Islands, the Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, New Zealand, Niue, Palau, Papua New Guinea, the Solomon Islands, Tonga, Tuvalu, Vanuatu and Western Samoa. 7565 !C22 !C23 !CCAT !GCAT !GSCI The Australian government on Monday launched a packaging system which the developers, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and industrial group Southcorp Holdings Ltd, say could double the shelf life of packaged food. Science and Technology Minister Peter McGauran said the technology absorbed all of the oxygen from the packaging of products such as beer, wine, cheese and nuts. David South, general manager of Southcorp's packaging division, said other packaging methods left an oxygen residue inside the pack which caused mould and product deterioration. McGauran said the overseas demand for quality fresh food was rapidly increasing and this technology would greatly expand the Australian food industry. "The Asian food market, in particular, is expected to grow by A$160 billion during the next 10 years," he said in a statement. South told Reuters said Japan would be one of the major growth markets for the technology. "Japan is very much a strategic target for growth, particularly the dairy industry, from dried milk powders through to cheeses," South said. McGauran said the long life potential of the new packaging would reduce transportation costs by enabling processors to deliver quality foods by land and sea instead of air. He said a further advantage would be that foods would require less additives to stay fresh. The technology was still in its research and development stage and would not be available commercially for another two years, South said. -- Canberra Bureau 61-6 273-2730 7566 !E21 !E211 !ECAT !GCAT !GPOL Australian Democrats Leader Cheryl Kernot said on Monday she and her six colleagues had had constructive talks on the budget with Treasurer Peter Costello. "It was a constructive and informative meeting which respected the public starting points already raised by the Democrats and the Government," Kernot said in a statement. "The treasurer agreed to provide further information on certain aspects, as requested, and some matters will be discussed in greater detail with individual ministers." The Democrats would consider the information in assessing the budget, she said. "We are committed to a credible, medium-term deficit reduction strategy and will be assessing the budget with a view to fairness and equity," Kernot said. The government is two votes short of a majority in the Senate, the upper house of parliament. To get legislation, such as budget measures, through the Senate it must get those two votes from the Labor Opposition, the Democrats, two loosely allied Greens or a pair of Independents. Kernot said the meeting had covered budget items such as federal grants to the states, which have been temporarily reduced, a subsidy on private health insurance, foreign aid, legal aid, the Australian Broadcasting Corporation and labour market programmes. Kernot said the meeting lasted two hours. -- Canberra Bureau 61-6 273-2730 7567 !GCAT !GPOL Australian Treasurer Peter Costello will act as Australian prime minister in the absence of Prime Minister John Howard, who is attending the South Pacific Forum in the Marshall Islands, Howard's office said. Howard returns on Thursday. Trade Minister and National Party Leader Tim Fischer, who's in China, would normally act as prime minister in Howard's absence. -- Canberra Bureau 61-6 273-2370 7568 !GCAT !GHEA !GPOL !GVOTE Forty-two percent of respondents in a TV3/CM opinion poll published on Monday rated health the single main issue that the October 12 election will be fought over. No other issue rated in double figures. The economy and economic growth were cited by nine percent of voters, as was education. Next came unemployment (six percent) and superannuation (three percent). Only two percent mentioned the sale of government assets as the key election issue. Incumbent Jim Bolger was voted preferred prime minister, up four points to 23 percent since the last TV3 poll two weeks ago. New Zealand First's Winston Peters was up one at 21 percent, while the Alliance's Jim Anderton slipped three to eight percent and Labour's Helen Clark fell two to five percent. -- Wellington newsroom 64 4 473-4746 7569 !GCAT !GPOL !GVOTE New Zealand's governing National Party gained one percentage point to 38 percent in an opinion poll published by TV3 on Monday but its potential coalition partners were below the threshold needed to win seats. The TV3/CM poll showed National at 38 percent, up from 37 percent in the previous poll two weeks earlier. The centre-left Labour Party and economic nationalist New Zealand First were also up a point each, at 21 percent and 18 percent respectively. The left-wing Alliance eased two to 12 percent. Don't knows totalled 16 percent. A general election is due on October 12, the first under a new German-style proportional representation system that will favour coalition governments. The TV3 poll showed the Christian Coalition and radical free-market ACT party, both seen as potential coalition partners for National, both falling short of five percent. The Christians registerd 3.9 percent, down from 4.3 percent two weeks earlier, and ACT scored 2.4 percent, down from 3.4 percent. To win seats, a party must score at least five percent of the party vote or get a candidate directly elected in a local constituency. A TV1 poll on Sunday showed National down four ponts at 35 percent, with New Zealand First on 20, Labour 19, Alliance 12, Christians 5.4 and ACT 4.6. TV3 also surveyed voter intentions in the constituency vote. National fell three points to 40 percent, Labour was steady on 26 percent and the Alliance and NZ First scored 13 percent each. Twenty-seven percent didn't know or were undecided, up from 22 percent in the previous poll. -- Wellington newsroom 64 4 473-4746 7570 !C31 !CCAT !GCAT !GDIS !GWEA Australian insurance companies on Monday said a storm that hit Sydney over the weekend, leaving 30,000 homes without power, unroofing houses and flooding streets, caused A$5-10 million (US$4-8 million) in damage. However, the Insurance Council of Australia said the storm was not the worst to have hit Sydney in recent years and that insurance firms would be little affected. "Insurers estimate Sydney's weekend storm will generate claims of between five and 10 million dollars," Council spokesman Mark Sheehan said. "At this stage we have had 10,000 claims, but most have been small," Sheehan said. "Because it happened during the weekend people were at home and able to prevent further damage." Insurance and motoring group NRMA Ltd said its claims alone would amount to A$6.0 million. The NRMA said it had only received 100 claims for structural damage to houses, the rest had been for minor damage to buildings and motor vehicles. "Other storms have been worse, but they are usually localised. This one was widespread, but the damage has been less," said NRMA spokesman John Bowman. A low pressure storm off Sydney's coast hit the northern suburbs of the city on Friday night. Winds gusting up to 60 knots uprooted trees, unroofed houses, and caused widespread electiricty blackouts with about 30,000 homes without power for part of the weekend. Heavy rains and huge seas also caused localised flooding. "The majority of jobs we still have to do are a result of trees falling down," State Emergency Service duty officer Gary Grant said on Monday. The storm lasted throughout Sunday as it moved south along Sydney's coastline. "We usually only get one or two of these east coast low pressure systems a year," said Weather Bureau forecaster Philip Kinghe. "This one was particularly strong and close to the coast and that's why we got the storms and fierce winds," he said. -- Sydney Newsroom 61-2 373-1800 7571 !C42 !CCAT !E11 !E41 !ECAT !GCAT !GJOB Australian Treasury Secretary Ted Evans said on Monday that the outlook for wages was uncertain due to recent divergent movements in the main indicators of wage pressures and uncertainty about wage outcomes. Evans told a business luncheon that these uncertainties reinforced the need for wages to be underpinned by genuine productivyity improvements. "The concern is in seeing such wage pressures with unemployment still at 8.5 percent and employment growth rate not unusually strong," he said. "Macroeconomic policies cannot solve that dilemma. The only satisfactory answer lies in the successful shift to enterprise bargaining but that is a topic for another day," Evans said. The Liberal-National Coalition, elected in March, has moved to a decentralised enterprise based bargaining system, compared to the previous Labor government's centralised wage-fixing system. The government forecast average earnings to rise 5.0 percent in its budget for the year to June 30, 1997, from 4.4 percent in 1995/96. Employment growth was forecast at 1.5 percent in year average terms, while unemployment was expected to be 8.25 percent in the June quarter of 1997. The Australian Treasury said in the 1996/97 budget that wages pressures were not expected to intensify over the year but that they required continued policy vigilance. The Reserve Bank of Australia has previously expressed concern that the level of annual wage increases should not exceed 4.5 percent to avoid threatening low inflation. -- Sydney Newsroom 61-2 9373-1800 7572 !E11 !E21 !E211 !ECAT !GCAT !GPOL Australian Treasury Secretary Ted Evans said Australia should continue to enjoy quite robust growth during the process of reducing the budget deficit by the equivalent of 1.5 percent of GDP over the next two years. Evans also said the budget forecast for business investment was impressive, but was warranted by the fundamentals and well supported by the expectations survey. Evans said the reason the budget deficit was not being returned to balance in one year was a matter of balancing risks and objectives, and the short term impact of such a substantial fiscal shock may yield unpredictable results. Evans said while Australia did not need to take on the substantial risk of cutting the budget so dramatically in just one year, "we nevertheless require urgent fiscal consolidation, amounting to 1.5 percent of GDP over two years." "For these reason, this course can be pursued as now proposed, while continuing to enjoy quite robust growth in the short term," Evans said. 7573 !C13 !C18 !C181 !CCAT !GCAT !GPOL New Zealand's opposition Labour Party on Monday promised a probe into cross-media ownership and the degree of foreign control if it wins power at next month's general election. In an interview with Reuters after the release of his party's broadcasting policy, spokesman Graham Kelly said the media was "concentrating in fewer and fewer hands". "The takeover of the New Zealand Herald by foreign interests is one example of that," Kelly said. The Herald is New Zealand's biggest-circulation newspaper. Dublin-based Independent Newspapers and interests associated with principal Tony O'Reilly own 45.1 percent of its publisher, Wilson and Horton. "INL have indicated they would like to buy into television, and in a small country like this, having the concentration of the media in one or two hands is just not healthy for a democracy and the variety and extent of information," Kelly said. "So we think it is important to investigate cross-media ownership, and that should be done reasonably quickly so there are some ground rules." Independent Newspapers Ltd (INL) is just under half owned by Rupert Murdoch's News Corp Ltd. "The Commerce Act and the (anti-monopolies) Commerce Commission have given no indication they would decline an application whether it was from Murdoch or INL or someone else," Kelly said. He said the party's policy of examining anti-competitive behaviour, foreign acquisitions and concentration of ownership was linked to its policy on cross-media ownership. He noted the recent sale of Radio New Zealand's commercial stations to New Zealand Radio Network, a grouping in which Wilson and Horton, Australian Provincial Newspapers Holdings Ltd and Clear Channel Communications Inc of the United States each have a one-third interest. "In itself there are no problems with anti-competitive behaviour so far, but I don't believe they will stand still," Kelly said. He said the group last week bought three private radio stations in the South Island city of Nelson. "So they have started the aggregation of ownership without hardly waiting for the ink to dry on the purchase of Radio New Zealand Commercial." Kelly said after probing these issues Labour may find there was no need to act. "But we want to give notice we are concerned about the changes that are taking place and that they don't swallow up the New Zealand-owned companies to the extent that we end up either being in the hands of foreigners and/or where the New Zealand public have little or no effective choice." Labour would introduce measures to ensure free-to-air broadcast of sports and cultural events of national importance such as All Black rugby tests, cricket, netball, national day celebrations and the Comonwealth and Olympic Games. But it would not interfere with existing contracts. Labour pledged to retain ownership of the two state-owned television channels, but lower the amount of advertising on TV1 to about eight minutes an hour from the current 15 minutes. It would forego a dividend (currently $35 million a year), and levy pay television providers to help fund TV1, at a rate to be determined. TV1 would adopt a public service charter. Kelly said "the last thing we want is heavy-handed state inteference" and the measures would only be introduced after consultation and negotiation. Among its other broadcasting policies, Labour would extend the discount on the broadcasting fee available to single superannuitants ($73 instead of $110) to all superannuitants. He said a significant amount of the cash needed by broadcasting funding agency New Zealand On Air would come from general taxation. -- Wellington newsroom 64 4 473-4746 7574 !GCAT -- SOUTH CHINA MORNING POST - Japan had warned that its investors might pull out of Hong Kong the 1997 handover if the territory's economic autonomy was undermined. -- ORIENTAL DAILY - Shipping tycoon Tung Chee-hwa was expected to announce by the end of the month his intention to run for the post of chief executive to replace British governor Chris Patten after the 1997 handover. -- HONG KONG STANDARD - A group of 257 people in Beijing had demanded that Chinese authorities send troops to the Diaoyu islands in the East China Sea, currently at the centre of a territorial row with Japan. -- WEN WEI PO - China opens the Beijing-Kowloon Railway which will cross the border into Hong Kong after the 1997 handover. ORIENTAL DAILY - The biggest fake credit card gang in the world had moved its base from Hong Kong to Taiwan after a number of its members were prosecuted in the southern Chinese city in Guangzhou in July. -- HONG KONG ECONOMIC TIMES - The rapid growth of large-scale construction projects had pushed up the salaries of construction workers in Hong Kong but exposed a serious shortage of workers. The completion of many projects possibly would be postponed. -- Hong Kong newsroom (852) 2843 6441 7575 !C12 !CCAT !GCAT !GCRIM Japanese prosecutors are to launch a special task force this month to probe huge losses on unauthorised copper trading by a Sumitomo Corp trader and question company officials, sources close to the case said. The Tokyo District Public Prosecutor's Office plans to probe the case with a view to charging Yasuo Hamanaka, 48, the trader blamed by Sumitomo for the $1.8 billion dollar loss, with breach of trust, sources close to the case said. "The Tokyo prosecutor's office is going to set up a special task force within this month with up to five or six specialists," a source close to the prosecutor's office said. "As a first step, they will start questioning Sumitomo Corp officials who had connections with Hamanaka," he said. The Sumitomo officials to be questioned soon by the Tokyo prosecutor's office include Masahiro Mogari, who worked as a senior copper trader until July, and Akio Imamura, general manager of its non-ferrous metals division, they said. A copper trader who is currently assigned to its New York branch is also on the prosecutors' list, they said. Sumitomo, one of Japan's giant trading houses, said on June 13 that Hamanaka lost the money in unauthorised copper trading, mainly on the London Metal Exchange, over a 10-year period. It fired Hamanaka in June 14 and he has been in seclusion at his home without commenting on the matter. U.S. and British law enforcement authorities have already opened investigations into the case to determine if any illegal trading practices were involved in their countries. In early August, Britain's Serious Fraud Office searched the homes of two British businessmen as part of its probe. When the Tokyo prosecutors will interview Hamanaka, the man at the heart of the scandal, is unclear, the sources said. Hamanaka emerged from hiding on Sunday to reveal that for the past two months he has evaded the media and overseas authorities who wanted to question him simply by staying secluded at his own home. "I have been living in my home since leaving Sumitomo," Hamanaka told a Reuters reporter on Sunday afternoon as he walked along the aisles of a small supermarket near his home with his wife. He first came out of hiding three weeks ago when he met a Reuters reporter. Asked when he would give his side of the story of the world's biggest financial trading loss, Hamanaka replied: "I have nothing to say on that." He also declined comment on whether he expected to face legal action, either by Sumitomo or authorities, over trading losses. Meanwhile, Sumitomo reiterated that it will continue to cooperate with investigative authorities. "We have been cooperating and will fully cooperate with official probes," a Sumitomo spokesman said. But he refused to comment on Tokyo prosecutors' launch of the task force. 7576 !GCAT !GPOL Burma's ruling military government on Monday launched renewed attacks on the democracy movement and accused National League for Democracy (NLD) members of joining forces with dissident exiles bent on destabilising the country. Senior military officials told a monthly government news conference they had recently made arrests and seized documents that proved some NLD members had been colluding with exiled "subversives" who wanted to unsettle the government. "Their aim, obviously, is to commit in collaboration with the legitimate party, subversive acts both within and without the country and thus try to put pressure on the government," said Colonel Kyaw Thein, a senior military intelligence officer. He said authorities would take "necessary or appropriate" measures against the NLD, led by Nobel Peace laureate Aung San Suu Kyi, "if and when required". Suu Kyi said on Saturday at least 61 NLD supporters had been arrested since May and about 30 had been sentenced to long jail terms. This comes after a sweeping crackdown in May when over 260 NLD members were arrested ahead of a controversial party meeting. Burmese officials on Monday reaffirmed the State Law and Order Restoration Council's (SLORC) commitment to democracy, but could not say how long it might take before the country would be ruled by a government elected by the people. "Right now our country has given a priority to develop the country into a new democratic state. Our ultimate aim is to make this country become a new multi-party democratic state," Kyaw Thein said. But neither Kyaw Thein nor other officials could say when the country might change from military rule to democratic rule. The SLORC, which assumed power in 1988 after quashing bloody pro-democracy uprisings that left thousands dead or in jail, has often said it will hand over power to a democratic government. But although it organised a 1990 general election, it never recognised the results of the poll or allowed the NLD -- which won a landslide victory with more than 80 percent of the seats -- to assume power. Thang Nyunt of the National Convention Convening Committee said the convention, which is trying to draft guidelines for a new constitution, would reconvene soon but could not give a date. Last month foreign minister Ohn Gyaw told reporters in Malaysia the National Convention, which comprises hand-picked delegates and has been meeting intermittently since 1993, would reconvene in October or November but was not expected to complete its work in that session. Suu Kyi angered the SLORC last November when she pulled her NLD out of the convention, saying it was not democratic. Ohn Gyaw bristled on Monday when asked if the process used at the convention, which does not allow much discussion by delegates, was fair. "This is the Asian way," he snapped when a reporter said some delegates from ethnic groups had complained they could not voice objections at the convention. "We have not yet established a democracy." Government officials also denied allegations by Suu Kyi that NLD members were not allowed a fair trial, and Kyaw Thein said all prisoners were allowed legal consul when being tried. Suu Kyi told a news conference on Saturday that the SLORC misused the law in order to crush the democracy movement. She said officials often arrested NLD members in the middle of the night and did not give them the opportunity to defend themselves. She also complained about poor conditions in jails, citing a recent NLD member who had died while in custody. A military official told the news conference on Monday the prisoner, Hla Than, likely contracted the disease that killed him before being imprisoned. 7577 !GCAT Following is a summary of major Chinese political and business stories in leading newspapers, prepared by Reuters in Beijing. Reuters has not checked the stories and does not guarantee their accuracy. Telephone: (8610) 6532-1921. Fax: (8610) 6532-4978. - - - - PEOPLE'S DAILY A front-page commentary said the popularisation of science and technology was crucial for raising the quality of China's workforce. - - - - CHINA DAILY The first passenger train on the much publicised Beijing-Shenzhen line left China's capital on Sunday. The rail link is designed to boost economic ties with Hong Kong, which lies across the border from Shenzhen. - - - - CHINA SECURITIES The director of the State Administration of Foreign Exchange control said China's income under the capital account has been the major contributor to China's rapidly growing foreign exchange reserves. Vice Minister of the State Economic and Trade Commission Chen Qingtai said now is the time to push reforms of state enterprises but they cannot be given to the private sector. - - - - FINANCIAL NEWS Governor of China's central bank Dai Xianglong said China's retail price inflation could be controlled at around seven percent this year. Dai said the recent interest rate cut did not signal a relaxation of China's tight monetary policy. He attacked some listed firms and monopoly industries for making usurious loans amid China's tight monetary policy. China would set up a unified network for different bank cards. State Statistical Bureau predicts China's grain output at 475 million tonnes in 1996, cotton output at 3.5 million tonnes. 7578 !GCAT Newspaper headlines CHINA TIMES - Navy general Lu Lee-kang detained for alleged involvement in bribery case. Tokyo newspaper says China wants to establish new channel for cross-strait talks. UNITED DAILY NEWS - Taiwan will allow froeign funds to enter island freely in 2000. Vice-President Lien Chan denies report that nuclear issues discussed during his visit to Ukraine in late August. COMMERCIAL TIMES - Communication ministry to strictly review China Airlines' plan to release shares overseas. Taiwan executives visiting China plan to link with Chinese counterparts for electricity generation. ECONOMIC DAILY NEWS - Finance ministry plans to establish Taiwan as asset management centre. International oil prices may rise over Iraq tensions. -- Taipei Newsroom (2-5080815) 7579 !GCAT Following is a summary of major Indonesian political and business stories in leading newspapers, prepared by Reuters in Jakarta. Reuters has not checked the stories and does not guarantee their accuracy. Telephone: (6221) 384-6364. Fax: (6221) 344-8404. - - - - KOMPAS Members of the Muhammadiyah Moslem organisation staged a rally Sunday in support of President Suharto's New Order government on condition that it continued to fight against corruption. - - - - JAKARTA POST A report by the National Commission on Human Rights on the July 27 riots which was released on Saturday said five people had died, 149 were injured and 74 were missing. The commission said that its findings were independent of official government figures. Nur Misuari -- head of the Moro National Liberation Front -- (MNLF) returned to Manila Sunday to a welcoming marching band. Misuari and officials from the Philippines government concluded negotiations in Jakarta on Friday on a treaty which is set to end almost 25 years of conflict in the southern Philippines. - - - - MEDIA INDONESIA Indonesian cement prices rose rapidly last week, traders said. In Yogyakarta, the price per sack rose to 12,500 rupiah from 9,600 rupiah. - - - - REPUBLIKA The total of 74 people missing from the July 27 riots reported by the National Commission on Human Rights riots was misleading, General Syarwan Hamid, head of the army's socio-political affairs unit, said. It was wrong for these people to be considered missing because it was normal for people to simply not go home he said. 7580 !GCAT Following are some of the main stories in Monday's Malaysian newspapers. NEW STRAITS TIMES - Rescuers recover four more bodies from landslide, bringing the death toll in Thursday's disaster to 26. - Primary Industries Minister Lim Keng Yaik urges palm oil companies to invest in Third World countries as a solution to land and manpower shortages faced by the country. STAR - Leaner drivers who use small cars for the test will find that they have to park in smaller lots under new regulations to be implemented from September 15. - Seven more bodies were found, bringing the number of bodies recovered from the aborigine settlement landslide tragedy to 28. BUSINESS TIMES - Trade and business ties between Britain and Malaysia are set for a very busy year ahead due to improved relations, according to Brendan Doyle, the Overseas Trade Services head of Southeast Asia Section of London's Department of Trade and Industry. - New Tenaga Nasional executive chairman Ahmad Tajuddin Ali has as his top priority the restoration of confidence of the government and the people in the company. 7581 !GCAT DAY'S TOP STORIES - The government and the Moro National Liberation Front will finally sign at 9.0 a.m. (0100 GMT) today at Malacanang the peace agreement ending the 24-year seccessionst war that killed more than 120,000 people in Mindanao. (MANILA BULLETIN) - A man with two grenades and a shotgun held hostage seven passengers aboard a ship bound for Iloilo City from Manila and demanded 50,000 pesos cash from the ship's crew and passengers. Two passengers were wounded in the nine-hour drama which ended when the man surrendered. (MANILA BULLETIN) - Just two months before the holding of the Asia-Pacific Economic Cooperation forum, hotel workers are planning to go on an "industry-wide strike" to protest against exploitative practices in the hotel industry, the president of the National Union of Workers in Hotel and Allied Industries said. (THE MANILA TIMES) - The government reported over the weekend the country's gross national product grew 7.69 percent in the second quarter and 7.06 in the first semester. (BUSINESSWORLD) - A clandestine gold rush in Davao where operators have been using explosives and heavy equipment since 1989 is threatening to destroy the environment on a large scale. Government investigators have confirmed that the mining activities had churned out billions of pesos in profits without paying taxes. (THE PHILIPPINE STAR) ++++ BUSINESS - The Securities and Exchange Commission is investigating the recent rush of "backdoor listings". It has said it will come out with new rules and guidelines to govern such practices within two weeks. (MANILA BULLETIN) - Despite government assurances that the country's trade deificit is manageable, a recent National Economic Development Authority (NEDA) report submitted to the Senate has confirmed earlier projections that the trade imbalance will worsen next year. (MANILA BULLETIN) - The United States has agreed to renew for two years the Philippines' status as a recipient of its generalised system of preference, a programme granting duty-free status to selected U.S. imports from eligible countries, trade and industry secretary Cesar Bautista said. (THE MANILA TIMES) - The delayed passage of the Comprehensive Tax Reform Programme is sending the wrong signals to foreign investors and may affect the country's exit from the International Monetary Fund (IMF) programme, IMF's senior resident representative for the Philippines, Kadhim A. Al-Eyd said. (BUSINESSWORLD) - Manila newsroom (632) 841 8934 7582 !GCAT !GDIP !GPOL British Foreign Secretary Malcolm Rifkind, closely questioned by wary Japanese officials about Hong Kong's future, said on Monday he was optimistic the colony's transfer to China in 1997 would go smoothly. Damping down Japanese press reports which said he gave Prime Minister Ryutaro Hashimoto a bleak assessment of the transfer, Rifkind said China wanted the transition to go well. But Rifkind said the next few months were "crucial" for China in showing by word and deed that it fully respected Hong Kong's free way of life. "I have a considerable degree of optimism with regard to the future of Hong Kong," he told a news conference. "If we have a concern, it is that the Chinese government, because they come from a different system with different values, may on some occasions not fully understand what makes Hong Kong so successful," Rifkind said. He said what made Hong Kong so successful an economy was that it had confidence and security in its "free way of life". "Therefore it is going to be very important for the Chinese government to be very careful that however unintentionally, they don't either say things or do things that may damage that confidence, even if they do not intend that." Japan's Kyodo news agency, quoting foreign ministry officials, had reported that on his arrival in Tokyo on Sunday, Rifkind told Hashimoto there may be "difficulties" in the return of Hong Kong because China did not understand how free economies worked. In a report on Monday, Hong Kong's South China Morning Post said Japan has warned its investors might leave Hong Kong if the colony's economic autonomy and the rule of law were undermined. It quoted unidentified sources as saying the warning was given by Japanese Foreign Minister Yukihiko Ikeda last week when he met Acting Governor Anson Chan during a visit to Hong Kong. Ikeda told Chan that Japanese investments -- now ranked second after China -- would remain in Hong Kong if the systems that made the territory tick were retained, the newspaper said. Japanese investments in Hong Kong totalled $14.3 billion as of March 1995, according to the Consulate-General of Japan. After more than 150 years of colonial rule, Hong Kong will revert to China at midnight on June 30 next year. Rifkind is in Japan for a three-day visit on a tour that has already taken him to Pakistan, India and Sri Lanka. On Wednesday he leaves Tokyo for his last stop in Mongolia. He hailed Britain-Japan relations as "extremely healthy in all respects", with exports to Japan growing 26 percent in 1995 and showing no signs of stopping. Rifkind said Britain had become the "main pillar" of Japan's relations with Europe and that 40 percent of Tokyo's investments in Europe were concentrated in Britain. In his talks, Rifkind did not shy away from raising with Japanese officials complaints by former British prisoners of war that Japan was ignoring their demands for compensation. More than 12,000 Britons died in Japanese war camps during World War Two. A group representing prisoners of war and civilian internees is pursuing legal action in Tokyo to demand compensation from the government for their ordeal, and lobbied Rifkind last month to press their long-running case. Although Britain believes compensation was legally settled by the San Francisco peace treaty of 1951, Rifkind made clear that passions still ran high on the issue. "We hope Japanese authorities see the continuing need to deal with this in a sensitive manner," he said. 7583 !E51 !ECAT !G15 !G158 !GCAT !GDIP The European Union will give Ulan Bator 20.5 million ECUs ($25 million) in aid to help smooth Mongolia's path to democracy and a market economy, visiting EU officials said on Monday. The aid would be channelled into projects aimed at improving Mongolia's banking and energy systems, as well as modernisation and employment programmes, European Commissioner Hans van den Broek told a news conference in the capital. The aid had yet to be approved by the Mongolian government, van den Broek told reporters after a meeting with Mongolia's new Prime Minister M. Enkhsaikhan. He gave no details of when the grants would begin. "The main objective...is to support Mongolia in its transformation process to democracy...and economic transformation to the market economy," he said. Mongolia, which has seen economic hard times since the collapse of its former sponsor the Soviet Union, would need more aid than the EU alone could provide, van den Broek said. Mongolian Prime Minister Enkhsaikhan on Friday called for energy price liberalisation and rapid privatisation of state firms to salvage the struggling nation's economy. Enkhsaikhan, who was swept to power with the reform-minded Democratic Union Coalition in a suprise election victory in June, accused the previous government of consuming state fuel reserves to the point of endangering national security. 7584 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Wanted: Eccentrics, risk-takers and free-thinkers for challenging posts at Japan Inc to dream up new business for the 21st century. Japanese companies are complaining loudly that the creative individuals needed to cook up corporate success are in short supply, and are pointing the finger of blame at an education system still geared to producing the uniform human cogs that Japan's catch-up economy needed in the post-war decades. "Until now, Japan learned from the United States and Europe and strove to catch up, and for that it was thought sufficient to have average sort of people," said Kazuhide Ito, manager of business lobby Keidanren's human resources development group. "Now we need front-runners who can take the lead...so we need a flexible education system in which children can think for themselves and learn to take responsibility," Ito said. The corporate complaints, along with proposals for reform of the education system and companies' own personnel practices, were summed up in a recent Keidanren position paper. "The economic system that sustained the nation's development until now...has come to a complete dead end," the paper said. " ....Japan will need a creative work force to work vigorously in all fields of society, so the development of "creative human resources' is a matter of great urgency." Many economists and other experts agree that the education system which cultivated the model workers who served Japan Inc well for the past 40 years is in need of a major overhaul. Foremost among the targets is the system's emphasis on forcing students to memorise masses of information and regurgitate it in fiercely competitive entrance exams, success in which opens the door to top-ranked universities and guarantees jobs at leading firms or elite government agencies. Also under fire is the overwhelming sameness of Japan's classrooms in which deviation, whether by slow learners or the gifted, tends to get short shrift. "The old rule in education was that people have to be the same and no deviation should be allowed, because we needed cyborgs, robotic-type people, to follow the United States," said Haruo Shimada, an economist at Keio University. "That worked well for the last 30 years...but now what we need to do is create something entirely new, and the question is -- who can do it?" Shimada said. "Teaching kids to be the same was good for bringing the average level higher, but now many hypothesise that we might have destroyed brains that were deviating in an upward direction." Ironically, many experts say the education system's worst ills are in fact the result of blue-chip corporations' own penchant for grabbing graduates of top-ranked universities with no attempt to assess ability by other means. "Industry has actually messed up the the education system by getting a massive amount of people from top universities produced according to the old paradigm," said Kenichi Ohmae, a former director in Japan of consultant firm McKinsey & Co, who who has written a book on Japan's education woes. "They should have shifted their source of intake a long time ago... this is overdue by probably more than two decades." Other critics agree. "The companies that belong to Keidanren are saying they want creative people, but they are the same ones hiring top university graduates," said Takanori Matsuura, acting dean at Tama University's School of Management and Information Services. "The whole system of evaluating people in post-war Japan has been one which evaluated the "container' -- such as the university one graduated from or the corporation where one worked -- rather than individual capabilities. "One reason companies are calling for reform is that they have been singled out as a cause of the problem," he added. The corporate lament over education coincides with other efforts to address deficiencies of a system plagued by bullying of those who somehow stand out, children's refusal to attend classes, and disturbing signs of teenage prostitution. In July a government advisory panel, the Central Council for Education, issued an interim report urging the paring down of Japan's school week from six days to five and the introduction of other changes aimed at giving children more scope for individual growth. A separate panel is gearing up to consider the first major curriculum reform for a decade. "There is a general effort to come to grips with where the education system would be improved or enhanced to encourage creativity and individual expression," said Samuel Shepherd, executive director of the Japan-United States Educational Commission, which administers the Fulbright Program. "There is a feeling of trying to create education with some space, some room for growth," said Shepherd, who is a member of the panel's subcommittee on foreign languages. That said, experts say reform is likely to come slowly -- if at all. "I don't think there is a recognition of the nature of the problem and the speed at which reform has to take place," Ohmae said. "Kids are setting up their own agendas and revolting." Recommendations by a blue-ribbon advisory panel to then prime minister Yasuhiro Nakasone in 1987 for education reforms that would cultivate more creative and individualistic students largely came to nothing, some experts said. "It all ended as talk," Matsuura said. "They fiddle at the edges without attacking the fundamentals." Although Keidanren has urged companies to alter the standards they use to evaluate whom to hire, actually doing so would involve costs many firms are reluctant to bear. "It is difficult for companies to determine what type of people are actually creative," Ito said. "Given limits on what can be spent for recruitment, it is easier to use graduation from "brand name' universities for initial screening." Behind the pessimistic predictions, experts say, is a general belief that a system which produces high rates of literacy, sends some 40 percent of high school graduates to college and emphasises that teamwork over individualism is actually not so bad. Some also fear that change could easily go too far. "The implications of moving radically in the direction of individual expression are enormous, and I'm not sure how far people, even on the (Central Education) Council, let alone at the Ministry of Education or among the people at large, are prepared to accept radical change," Shepherd said. Working out how to create creativity is anyway a tough challenge, though experts reject the stereotypical notion that Japanese are culturally incapable of innovation. "It has almost nothing to do with Japanese culture," Shimada said. "The 1950s, '60s and '70s were a unique period in Japanese development. It was a period when a robotic-type work force...created a tremendous success story in catching up with front runners," Shimada said. "That great success actually destroyed Japanese creativity, but if the incentive structure is redesigned, there can be change." 7585 !E51 !E511 !ECAT !GCAT !GTOUR China will develop Tibet's tourism industry in a bid to attract 60,000 foreign tourists to the restive Himalayan region in 2000, the China News Service said on Monday. Authorities aimed to earn $30 million in foreign exchange from tourism in 2000, the agency quoted Zhou Lizong, head of the Tibet Tourism Bureau, as saying. The impoverished region would improve its roads, build holiday resorts, develop mountain climbing, hold car rallies and other activities to attract more vistitors, Zhou said. Foreign travellers say they are often denied permission to visit Tibet, which is frequently rocked by protests against Chinese rule and crackdowns by Beijing on monasteries and temples. 7586 !GCAT !GDIP Singapore's patriarch Lee Kuan Yew arrived in Beijing on Monday for a working visit and will meet several Chinese leaders, including President Jiang Zemin, the Xinhua news agency said. Lee, accompanied by his wife and 16 senior Singaporean officials, would be in China until September 11, Xinhua said. He arrived in Beijing from the eastern city of Qingdao. He was scheduled to meet Jiang, Premier Li Peng and Li Ruihuan, head of a parliamentary body that serves as an advisory group to the government, the agency said. Lee, who resigned as Singapore's prime minister in 1990 and is now senior minister, has unrivalled influence with both Beijing and Taipei, arch-rivals since the end of the Chinese civil war in 1949. Tensions between Beijing and Taipei that began easing in the late 1980s have escalated since Taiwan's President Lee Teng-hui made a landmark trip to the United States last year. The two Lees are not related. Beijing, which regards Taiwan as a rebel province and has sought to isolate the island, slammed Lee Teng-hui for trying to break the island out of diplomatic isolation. Both Singapore and the United States recognise China but not Taiwan. 7587 !GCAT !GPOL !GVIO Cambodia's co-prime minister, Hun Sen, met representatives of a breakaway guerrilla faction of the Khmer Rouge on Monday to try to strike a deal for national reconciliation. Hun Sen, accompanied by Defence Minister Tea Ban and other government officials, flew to this western Cambodian province for his first direct talks with the leaders of the breakaway guerrilla group. He met a team of Khmer Rouge dissidents led by Ieng Vudh, son of breakaway faction leader Ieng Sary, officials told Reuters. Also present at the talks were Long Norin, Ieng Sary's general secretary, and some other divisional commanders of the Khmer Rouge breakaway group, they added. "Today I met the people from Phnom Malai and Pailin. On behalf of the Royal Cambodian Government I want to inform you that these people have opposed Pol Pot and are working with the government for national reconciliation," Hun Sen said in a statement. The dissident faction broke away from the main hardline Khmer Rouge led by paramount leader Pol Pot last month. The Khmer Rouge under Pol Pot and Ieng Sary ruled Cambodia from April 1975 to December 1978 in a reign of terror dubbed "the killing fields". During their rule more than a million people were executed or died of starvation, disease or overwork in mass labour camps. Ieng Sary and Pol Pot were both sentenced to death in absentia for their role in the mass killing. The Khmer Rouge were allowed to take part in a Cambodian peace process leading to the signing of peace pact between various Cambodian factions in 1991. But they refused to honour the accord and resumed all-out fighting after the U.N.-run elections that ushered in the royal coalition government in 1993. Hun Sen also appealed to Cambodia's armed forces and its people to forget the past and foster reconciliation with the former Khmer Rouge. "Cambodians cannot be separated like Korea or China so we have to bring about the national reconciliation as soon as possible in order to end the Cambodian bloodshed," he said. "I would like to take this opportunity to appeal to the armed forces of the Royal Cambodian Government and all Cambodians to forget the past and prepare to welcome our Cambodians brothers and sisters from Pailin and Phnom Malai," he added, avoiding use of the word Khmer Rouge in his statement. Hun Sen, himself a former Khmer Rouge officer who defected from the mainstream group led by Pol Pot, was appointed Cambodian prime minister by Vietnamese troops who drove out the Khmer Rouge from Phnom Penh in late 1978. He is the key Cambodian official who has been pushing for peace talks with the Khmer Rouge. Cambodian government troops were sent to help the Khmer Rouge dissidents beat off an attack by their former comrades in northwestern Cambodia, army sources said on Friday. Ieng Sary, former minister of foreign affairs in the Pol Pot-led Khmer Rouge government of Cambodia, has led the commanders of at least four divisions in their break from Khmer Rouge hardliners. He said he has formed a new group called the Democratic National United Movement (DNUM) to work for peace in Cambodia. 7588 !C12 !C13 !CCAT !GCAT !GCRIM Southeast Asian broadcasters and officials met in Singapore on Monday to promote the Internet and discuss how it can best be policed. Delegates to a three-day Internet forum said all countries in the region wanted to stop the spread of offensive material such as pornography and racist literature. But there appeared to be little consensus on how far such censorship should go or how it could be exercised. Host-nation Singapore imposes strict control of the web, licensing only three Internet Service Providers and obliging them to screen all material accessed by clients. But most neighbouring countries have a far more liberal Internet system, encouraging self-regulation but imposing few controls on the number of service providers or their networks. "It's still up in the air what agreement on policing we can come to...but self-policing will be the thrust," said Glenn Sipir, deputy executive director of the Philippines Council for Advanced Science and Technology. The seven member states of the Association of Southeast Asian Nations (ASEAN), which organised the forum, are at widely different stages in the development of the Internet. ASEAN groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Singapore, with a wealthy population of just three million, has more than 150,000 individual Internet users and encourages its citizens to use the web to do a range of routine tasks, including applying for government permits and even some jobs. At the other end of spectrum, most of Vietnam's 74 million people have almost no access to computers and the easiest Internet access is often via providers outside the country. Officials said ASEAN states were also divided philosophically on the Internet, with some wanting to impose more political control over material on the web. Opening the forum, Singapore's parliamentary secretary for the ministry of information and the arts, Mohamad Maidin Packer Mohamad, said some ASEAN countries had worried the Internet could erode "our traditions and social values". "Our concerns include pornography, hate literature and other objectionable materials in cyberspace. ASEAN countries will need to develop their responses to these concerns to maintain values that they hold dear," he said. Singapore Internet service providers use computer "proxy servers" which filter out requests for undesireable material. Such material includes "issues pertaining to national security, religious harmony and morals", said Ling Pek Ling, the director of policy and planning at the Singapore Broadcasting Authority. But Sipin said some other countries, including the Philippines, were committed to more liberal "freedom of speech" on the Internet. "Political control would not be on the Philippines' agenda," he said. Another delegate, who declined to be identified, said national control systems might not work because Internet users could simply by-pass them by dialing into Internet service providers in other countries. 7589 !GCAT !GDEF !GDIP North Korea said on Monday that an immediate withdrawal of U.S. troops from South Korea should be discussed at proposed four-nation negotiations for peace on the Korean peninsula. "If the U.S. is not interested in discussing an immediate withdrawal of the U.S. troops from South Korea at the talks, such talks are undesirable," a spokesman for the North Korean Foreign Ministry said in a statement. The statement was carried by the official Korean Central News Agency (KCNA) which was monitored in Tokyo. In April, U.S. President Bill Clinton and South Korean President Kim Young-sam proposed at a bilateral meeting on Cheju Island off South Korea that Washington, Seoul, Beijing and Pyongyang hold talks to work out a lasting peace on the Korean peninsula. Communist North Korea, suffering severe food shortages after floods destroyed its crops for two years in a row, has yet to give a formal reply on whether it is ready to hold such talks. "The U.S. said in the 'Cheju Island declaration' on April 16 that the purpose of the 'four-way talks' is to launch a 'process of a durable peace agreement'," the North Korean spokesman said. "If true, a main point of discussion at the talks should be the U.S. military pullout. The U.S. must make clear its position concerning it," he added. About 37,000 U.S. troops are stationed in South Korea. North and South Korea have technically remained at war since the 1950-53 Korean War ended with a truce agreement but not a formal peace treaty. "The U.S. military occupation of South Korea divided the Korean nation and, though the cold war was terminated, it has still posed a major stumbling block to peace and reunification of the Korean Peninsula," the North Korean spokesman said. "The time is now opportune for the U.S. to make an 'honourable pullout of troops'. Nevertheless, the U.S. has still kept its troops in South korea, expressing no willingness to withdraw them," he said. 7590 !GCAT !GPOL Japanese Prime Minister Ryutaro Hashimoto is in no hurry to convene parliament or draw up a supplementary public works budget -- steps that would point to general elections in early autumn -- aides said on Monday. Hashimoto huddled with cabinet and ruling party officials at the weekend to sketch out the political calendar for what is expected to be a turbulent autumn, with a looming showdown with the island of Okinawa over U.S. bases, his party's mounting calls for early elections, and opposition attacks on ethics and policy. In meetings on Sunday with Chief Cabinet Secretary Seiroku Kajiyama, Finance Minister Wataru Kubo and Koichi Kato, secretary-general of his Liberal Democratic Party (LDP), Hashimoto said he would decide the parliamentary schedule by mid-September. The decision on whether to draft a supplementary budget to stimulate the economy, the chief legislative business of the autumn extraordinary parliamentary session, would depend on gross domestic product (GDP) data for the April-June quarter, to be released in mid-September, Kajiyama said. "We have not yet assembled all the information necessary to make an overall decision," he told a news conference. In the first quarter of this year, Japan's real GDP grew at an annualised rate of 12.7 percent over the preceding quarter, but a key Bank of Japan business survey released last week showed manufacturers held a gloomy view of the economy. Hashimoto must weigh the GDP data against a steady drumbeat of calls for a big supplementary budget from his LDP, for which public works spending is a key element of electoral strategy. A growing number of LDP lawmakers are pressing Hashimoto, who must call elections by July of next year, to hold early polls. They argue that by exercising his right to dissolve the lower house of parliament to call snap elections, Hashimoto can pre-empt the opposition and his government can fare better in elections than if it were pressured into holding polls. The main opposition Shinshinto (New Frontier Party) has threatened to boycott parliamentary deliberations unless the the LDP's Kato resigns his secretary-generalship over a political donation Shinshinto has called into question. Shinshinto has also attacked the government's commitment to raising the consumption tax to five percent from three percent next April, finding sympathy among voter-wary LDP lawmakers. Hashimoto must also ponder the results of a referendum on Sunday in the southernmost prefecture of Okinawa over U.S. military bases, to be followed on September 10 by a key meeting with Okinawa Governor Masahide Ota. Of eligible Okinawan voters, 86 percent plan to take part in the non-binding referendum, with 78 percent of those likely to approve Ota's plan to phase out U.S. bases on the island by 2015, a survey in the Mainichi Shimbun newspaper showed. The referendum takes place just over a week before Japanese and U.S. officials are slated to hold high-level talks in Washington on the military bases and security ties. The central government has pledged to trim Okinawa's bases and move unwanted activities like artillery drills to other parts of Japan, but says it is committed to maintaining bases as a pillar of the U.S.-Japan security alliance. The bases row that erupted last year after the rape of an Okinawan schoolgirl by three U.S. servicemen has exposed rifts between the conservative LDP and its coalition partner, the Social Democratic Party, which has traditionally opposed the U.S. military presence and has a strong Okinawa support base. 7591 !GCAT !GCRIM !GPOL South Korean prosecutors on Monday challenged as too lenient a 22-1/2 year jail term on former President Roh Tae-woo, appealing instead for the life sentence they originally sought. Roh was sentenced last Monday for his part in a 1979 coup and a 1980 army massacre in the southern city of Kwangju that crushed democratic resistance. His predecessor, Chun Doo Hwan, was sentenced to death for masterminding the putsch and ordering the assault on Kwangju, in which 200 people were killed by official count. Apart from appealing against Roh's sentence, prosecutors will fight to increase sentences imposed on 13 former generals and appeal against the acquittal of another general, an official at the Seoul prosecutors office said. They also want to increase jail sentences handed to nine former presidential aides. No challenge however will be made against sentences on nine businessmen. In passing judgement on the tycoons, the official said, "our demands were met to some extent". Prosecutors had seven days to appeal last Monday's court sentences. The one-time generals were handed jail terms of between four and 10 years, whereas prosecutors asked for between 10 years and life. The maximum jail sentence handed the aides was 14 years for Roh's bodyguard Lee Hyon-woo. Four of the tycoons received jail terms of up to 2-1/2 years. Daewoo Group chairman Kim Woo-choong got two years. Five others, including Samsung Group chairman Lee Kun-hee who decided on Monday not to appeal, were given suspended sentences. On Saturday, lawyers for both Chun and Roh submitted appeals against their sentences. Chun kept Koreans guessing for days about whether he intended to go meekly to the gallows. In the end, he said he had to defend the truth about his administration. The three-judge panel said Roh was spared the death sentence because of his role in returning democracy to South Korea and in recognition of his diplomatic triumphs while in office. Roh became the first democratically-elected president in more than three decades in 1988 after refusing to be rubber-stamped in office by Chun. During his presidency, which lasted until 1993, Seoul scored a series of impressive diplomatic breakthroughs, gaining entry to the United Nations and reaching out to China and the former Soviet bloc countries. The domestic Yonhap news agency quoted prosecutors as saying they were unappy with the outcome of what was dubbed the "trial of the century". If they did not appeal, the defendents could end up with even lower sentences. President Kim Young-sam is widely expected to offer his predecessors a pardon if their appeals fail. The cases could reach the Supreme Court and the whole legal process may drag out for up to eight months. Death sentences are rarely carried out in South Korea. But if Chun were to hang, it could cost Kim the support of a large number of voters in his home province. 7592 !GCAT !GPOL !GPRO Thai telecomunications tycoon and leader of a popular Bangkok-based political party, Thaksin Shinawatra, said he plans to retire from politics. Thaksin, who heads the Palang Dharma Party (PDP), was a deputy prime minister in the 13-month-old coalition government of Prime Minister Banharn Silpa-archa until he pulled his party out of the administration last month. Viewed by some political analysts as a rising star in Thai politics, Thaksin made his fortune as a major shareholder in top Thai telecommunications and computer conglomerate, the Shinawatra Group. "For me, it is almost definite that I will give up (politics) and at the moment I am only concerned about my party followers. I have already warned them not to attach themselves to any one individual," Thakshin told reporters. Thaksin, whose PDP holds 23 of the 391 seats in the Thai parliament, said he would not run in any fresh general election. However, some political analysts said they did not believe Thaksin will quit politics so soon. They said he could swing back into active politics if Banharn's government falls after a debate set for September 18 to discuss an opposition-sponsored no-confidence motion in parliament and a new election is set. 7593 !GCAT !GPOL !GVIO Burma's military government on Monday accused the party of democracy leader Aung San Suu Kyi of colluding with exiled dissidents and foreigners in a bid to destabilise the country. Senior military officials told a monthly government news conference they had recently made arrests and seized documents that proved some National League for Democracy (NLD) party members had been colluding with exiled "subversives". "They (exiled pro-democracy groups) have established contacts with the officially recognised National League for Democracy," said Colonel Kyaw Thein, a senior military intelligence officer. "Their aim, obviously, is to commit in collaboration with the legitimate party, subversive acts both within and without the country and thus try to put pressure on the government." He said authorities would take "necessary or appropriate" measures against Suu Kyi's NLD "if and when required". Kyaw Thein said many of the exiled pro-democracy members had fled Burma after a 1990 election. The NLD won a landslide victory in the election, gaining more than 80 percent of the seats. The ruling State Law and Order Restoration Council (SLORC) never accepted the result. After the election, the government cracked down on NLD members and many fled to neighbouring countries, including Thailand and India. Kyaw Thein said NLD members living in exile in India had been distributing anti-government publications abroad and in Burma. The SLORC recently jailed 19 NLD supporters for plotting unrest, accusing them of contacting fellow NLD members in India and distributing anti-government leaflets. Kyaw Thein also lashed out at foreigners, mainly Americans, who he said were also trying to create unrest. "These aliens and mercenaries are trying to create chaos and confusion in Myanmar (Burma) in order to destabilise the country," he said. "It is obvious that some citizens of superpower nations are blatantly trying to meddle in the internal affairs of Myanmar and thereby disrupt peace and tranquility in the country," he said. 7594 !C31 !C312 !CCAT !E51 !E512 !ECAT !GCAT !GDIP !M14 !M143 !MCAT Asian crude oil prices surged to a four-month high on Monday after the United Nations delayed limited oil sales by Iraq after Baghdad sent troops into Kurdish areas, traders said. SIMEX October Brent futures rose 82 cents to $21.60 a barrel in early trading from Friday's London close in response to U.N. Secretary General Boutros Boutros Ghali's announcement on Sunday that he would delay the oil-for-food plan until he could assess the situation in northern Iraq. Singapore gas oil swaps soared 50 U.S cents per barrel in early trade. Iraqi tanks and troops captured Arbil, Iraqi Kurdistan's capital, on Saturday in the biggest Iraqi military incursion in the allied-imposed northern "no-fly" zone since the Gulf War. Troops expelled one Kurdish faction and installed a rival group more favourable to Baghdad. Oil prices began slipping from their highs around midday and lost further ground when U.N. relief officials and guards said Iraqi troops, heavy armour and artillery had evacuated Arbil. As of 0700 GMT October Brent had lost 30 cents from its high and was trading at $21.30. "All Iraqis have left Arbil. We cannot see any more tanks or vehicles or artillery. They are about five kilometres (three miles) away now," one U.N. official in Arbil told Reuters. There was no immediate reaction from the United States where President Bill Clinton had been conferring with American allies on how to respond to the Iraqi move. Asian oil traders said they were now awaiting more news from the United Nations and the United States, the leader of the Gulf War coalition which defeated Saddam Hussein in early 1991 but left him in power. "While the news (of the withdrawal) may cause levels to drift lower, the market would remain supported until we hear more of U.N.'s decision on the oil deal," one broker said. Boutros Ghali said he had "decided to delay the deployment of certain personnel who will supervise the implementation of Resolution 986", a reference to the Security Council document that sets out the oil-for-food plan. The $2-billion oil-for-food plan would allow Baghdad to sell oil over six months to buy food and medicine in a temporary easing of U.N. economic sanctions imposed after Iraq invaded Kuwait in August 1990 and triggered the Gulf war. Before the delay was announced, Baghdad had hoped to resume oil sales this month. Iraq, which holds the world's second largest oil reserves behind Saudi Arabia, has been effectively barred from oil shipments since the invasion. The world oil market has been watching the plan's progress closely, fearing prices would slump when up to 700,000 barrels of Iraqi oil per day begins flooding the market. Clinton has placed U.S. forces in the region on high alert and spoke by telephone on Sunday to several world leaders, including British Prime Minister John Major and Saudi Arabia's King Fahd, about the crisis. U.S. officials, however, said Arbil was not in the zone placed off limits to Iraqi troops at the end of the Gulf war, oil traders noted. But U.S. officials said it was within the "no-fly zone" and U.N. resolutions broadly protecting Kurds against repression applied. "We are watching the market closely. It will be a news-driven market for a while until the deal eventually pulls through," a broker said. Brokers also noted that White House officials have said that the deal would go through because of its humanitarian aims despite criticism from Republican presidential candidate Bob Dole. 7595 !GCAT !GHEA Japanese children returned to school on Monday, ending a vaction ruined by a deadly food poisoning epidemic that swept across the country this summer. School children from the western city of Sakai, which was hit hardest by the deadly bacteria, assembled in school courtyards to offer a moment of silence for the two children from the city who died in the epidemic. "I need to apologise to everyone. Many people suffered from eating your favorite school lunches and we lost our dear friends. It ruined the summer vacation. I'm really sorry," said the principal of one Sakai school. The O-157 colon bacillus has been found responsible for a widespread food poisoning epidemic in Japan that has killed 11 people and made over 9,500 ill this year. The government said late last month that the threat from the germ, while still requiring vigilance, appeared to be receding in Sakai, a city near the regional commercial centre of Osaka in western Japan, where over 6,500, mostly school children, came down with the disease. Health authorities believe school lunches were responsible for the food poisoning in Sakai, but researchers have been unable to pinpoint the exact source of the infection. The outbreak has prompted authorities to tighten sanitary standards at slaughterhouses and meatpacking plants and sparked calls for an overhaul of the nation's school lunch programme. Sakai city officials said they are still unsure when schools will resume serving lunches. Children will bring box lunches when full-day classes start from September 24. Schools in Tokyo are serving lunches and teachers are warning students to wash their hands carefully before eating. One elementary school in central Tokyo served curry rice and egg soup -- instead of salad -- for lunch. "I hope the children can start eating school lunches safely as as soon as possible. People are still worried," Prime Minister Ryutaro Hashimoto told reporters. As of Sunday, about 40 victims were still in hospital in Sakai, one in critical condition. 7596 !C12 !CCAT !GCAT !GCRIM The chairman of South Korea's Samsung Group, Lee Kun-hee, will not appeal against a two year jail term suspended for three years on charges of bribery, a group spokesman said on Monday. Lee had seven days to appeal the sentence handed down last Monday by the Seoul District Criminal Court for bribing former President Roh Tae-woo. The suspended term means he will not spend time in jail. "Chairman Lee decided not to appeal and instead accept the court judgement," the spokesman said. "As the case settles, Lee will concentrate on business operations and management." A total of nine tycoons were found guilty of bribing Roh. Five were handed suspended sentences, while four others received jail terms of up to 2-1/2 years. All the tycoons facing jail, including the chairman of Daewoo Group, have appealed. Prosecutors said on Monday they would not seek to challenge sentences against the nine as they were reasonably satisfied with the outcome. -- Seoul Newsroom (822) 727 5647 7597 !C24 !CCAT !GCAT !GENV NKK Corp said on Monday that it would start burning used plastics to supplement coke in its steel-making process from October. It will initially use 30,000 tonnes of used plastics a year but plans to increase the amount in the future, a company spokesman said. Used plastics will be used to smelt iron ore, currently done by burning coke, the spokesman said. Used plastic is already used in steel making in Germany but NKK will be the first Japanese company to use the material. The method is expected to help reduce the amount of used plastics and also help Japanese steel makers diversify sources of energy to use for steel making, the NKK spokesman said. The system is more environment-friendly as it produces less carbon dioxide and produces no other toxic gases, he said. But he added that used plastic is unlikely to replace coke in the near future as it needs to be processed before being used for steel making. Steel makers need to invest in equipment for processing used plastics, he said. 7598 !GCAT !GCRIM !GREL A Tokyo court on Monday ordered doomsday cult guru Shoko Asahara and two of his lieutenants to pay 790 million yen ($7.3 million) in damages to the victims and families of those killed in last year's subway gas attack. At the Tokyo District Court, presiding judge Hisashi Yamazaki ordered the Aum Shinri Kyo (Supreme Truth Sect) leader, Masami Tsuchiya and Ikuo Hayashi to pay the damages because they failed to present a defence against the suit. "I judge that the three do not want to fight the court battle because they neither attended hearings nor submitted any written reply," Yamazaki said in his ruling. The damage suit was filed last October by a 38-member group of victims and relatives of those who died in the sarin gas attack on the Tokyo subway system on March 20, 1995, which killed 11 people and made thousands ill. The three also face murder and conspiracy to commit murder charges. It was not clear whether or how the accused would be able pay the damages because the sect has already been declared bankrupt. "The victory in the court battle is meaningless because the accused have no assets," said Miori Noda, a plaintiff who was injured in the gas attack. "People may wonder why we may ask the government to buy the sect's property," Noda told reporters, "but we are economically worse off because of the expenses for the lawsuit and other things." ($1=108 yen) 7599 !E51 !E512 !ECAT !GCAT !GDIP President Kim Young-sam set off on a "sales diplomacy" trip to Latin America on Monday to blaze a trail for South Korean businesses in a region they have so far largely neglected. Kim's first stop is Guatemala, followed by Chile, Argentina, Brazil and Peru. He will be the first South Korean head of state to visit a region whose economic growth is surpassed only by East Asia. Local Korean media dubbed the 12-day tour "sales diplomacy" because it is designed to lay the groundwork for a commercial assault by South Korean business conglomerates who have so far skirted the region in favour of Europe, Asia and the Middle East. "It's very important for Korean businessmen to get the go-ahead from government. They follow what the government tries to implement," said Jose Eyzaguirre, the commercial attache at Peru's embassy in Seoul. "The focus will now be on South America and we hope to take full advantage of that." An editorial in the Dong-Ah Ilbo newspaper on Monday hailed Latin America as the "land of hope and opportunity". "We should seize this opportunity by reinforcing the economic relationship through active trade diplomacy," the editorial said. Kim is accompanied by 42 business leaders, including Chey Jong-hyon, chairman of the mighty Sunkyong Group who also heads the Federation of Korean Industries. His visit closely follows a similar trip to the region last month by Japanese Prime Minister Ryutaro Hashimoto, who stopped off in Mexico, Chile, Brazil, Peru and Costa Rica. Japan and South Korea compete in similar export markets, and their business executives chase each other around the world in search of cheap production bases. South Korea is just now waking up to the huge potential in a region whose economies are emerging from a decade of debt and social unrest and are again sucking in imports of cars, electronics and textiles. Korean businessmen will be looking at ways to exploit the region's mineral, oil and fisheries resources. Through joint ventures, Latin America also offers them a launch-pad to lucrative markets in North Anerica and Europe. Last Friday South Korea's top industrial conglomerate, Hyundai, announced it plans to invest $3.38 billion exploiting natural resources and joining infrastructure projects in Brazil, Peru and Chile. That figure is more than the combined total of South Korean investment in the region to date of $3.3 billion. Investment is mainly in textiles, electronics, fishing and automobiles. By contrast, Japan has pumped $14 billion of direct investment into Latin America in the past 14 years. Kim will initial agreements covering investment guarantees, aviation rights and visa exemptions. In Guatemala he will also meet with leaders of Honduras, El Salvador, Nicaragua and Costa Rica. Politically, Kim will be seeking to find commond ground with governments of countries which, like Korea, have recently thrown off authoritarian controls and replaced military-backed leaders with democratically-elected representatives. A South Korean court last Monday sentenced former president Chun Doo Hwan to death for abuses while in power. His sucessor, Roh Tae-woo, was given 22-1/2 years in jail. 7600 !GCAT !GVIO An Indonesian army official said the government has no intention of investigating the reported disappearance of scores of people after riots in Jakarta last month, the Republika daily newspaper said on Monday. General Syarwan Hamid, chief of the army's socio-political affairs unit, was quoted by the newspaper as saying that the figure of 74 people missing reported by Indonesia's official human rights body was not a serious issue. "They (the missing people) have simply just not gone home. That's all," he was quoted as saying. A two-page preliminary report issued on Saturday by the National Commission for Human Rights on the riots -- the worst unrest in the capital in more than two decades -- said five people had died, 74 were still missing and 149 injured, including security force members. Human rights groups last month criticised the government for its crackdown in the wake of the July 27 riots and have said that the high number of missing people reported by the commission casts doubt on the official army toll of four dead. The rioting broke out after police raided the headquarters of the Indonesian Democratic Party (PDI) which was being occupied by supporters of ousted party leader Megawati Sukarnoputri. Megawati, daughter of Indonesia's late founding president Sukarno, was replaced as party leader by deputy parliamentary speaker Surjadi at a government-backed rebel congress in Medan, North Sumatra. Despite being an official body appointed by President Suharto, the National Commission for Human Rights has been critical of the security forces in several cases. 7601 !GCAT !GPOL !GVIO Moslem rebels and the Philippine government signed a peace pact on Monday ending 24 years of war in the south that killed 125,000 people and ushering in what President Fidel Ramos said could be unprecedented prosperity. The president said the pact, which took four years to negotiate with the aid of Moslem nations led by Indonesia, was being signed two days after the Philippines announced its strongest economic growth figures in six years. "We can now strive for higher economic growth never heretofore anticipated or imagined by our economic planners," Ramos said in a speech at a glittering ceremony in the presidential palace. Rebel leader Nur Misuari had earlier led a standing ovation for Ramos, praising his "boldness and heroism" in pushing ahead with the accord despite bitter opposition from Christian groups in the southern Philippines. But he also warned that failure to translate the accord into genuine development could bring new fighting to the region that has known little else for 400 years. "Failure has the habit of instinctively unleashing the fury of war... How many times have we seen the monster get loose and unchained?" said the former university professor who now leads the Moro National Liberation Front (MNLF). He said the pact ended a war that began in 1972 when Moslems believed they faced a "campaign of genocide and extermination" by the government of then president Ferdinand Marcos. Ramos has said he takes personal responsibility for the success of the Southern Philippines Council for Peace and Development, which will be set up under the pact as a prelude to an autonomous regional government covering almost all of the main southern island of Mindanao and nearby islands. Moslem nations which helped broker the accord have also pledged investment funds to promote development of the region that, although fertile and rich in minerals, remains the country's poorest area. The Philippines' five million Moslems regard the south as their ancestral homeland although they are outnumbered by some 15 million Christians. Christian opponents of the pact staged protests in several parts of the south on Monday, with a noisy barrage in the city of Zamboanga and a Philippine flag being flown at halfmast in the city of Iligan. "Here there is only mourning, cries of sorrow not joy. Look at our flag, this is a symbol of mourning because democracy has died," city councillor Lawrence Cruz, one of the leaders of the Iligan protest, told reporters. The pact was also signed by chief government negotiator Manuel Yan, Indonesian Foreign Minister Ali Alatas and Hamid Algabid, secretary general of the Organisation of the Islamic Conference. "This is indeed a historic moment for the Filipino nation. It is also a great day for all the peoples of Southeast Asia and for a world yearning for peace," Alatas said in a speech. After the signing, Misuari told a news conference he would encourage other Moslem rebel groups to help make the pact work and had maintained contacts with the MNLF's main rival, the Moro Islamic Liberation front. "The only problem I have is with this Abu Sayyaf group," he said, referring to an extremist group blamed for a series of murders, bombings and kidnappings in the south in recent years. 7602 !GCAT !GCRIM !GPOL South Korean prosecutors on Monday appealed against a 22-1/2 year jail term imposed on former President Roh Tae-woo on charges of corruption, sedition and mutiny, a court official said. Prosecutors had demanded life in prison for Roh. They are also appealing against what they called lenient sentences handed to former presidential aides and one-time generals. Prosecutors had seven days to appeal the court judgements handed down last Monday. Local media have quoted prosecutors as saying that apart from a death sentence handed to Roh's predecessor Chun Doo Hwan, they are unhappy with the outcome of what was dubbed the "trial of the century". Sentenced with Roh and Chun were 13 former generals, nine business tycoons plus former administration aides. One ex-general was acquitted. The Seoul District Criminal Court sentenced Chun and Roh over a 1979 military coup, an army massacre the following year in the city of Kwangju and for pockeing bribes. Roh was spared death because of his role in bringing democracy to South Korea, the court said. 7603 !C22 !CCAT !GCAT !GDIP A retired speaker of Taiwan's parliament plans to open a law office in Shanghai to smooth economic ties between the island and the mainland, the Commercial Times reported on Monday. Former Legislative Yuan speaker Liang Su-yung said his planned Peace International Law Office in Shanghai would help Taiwan executives with trademarks, patents and other legal questions in China. "I hope to use my professional knowledge to help people from the two sides," 76-year-old Liang, who was born on the mainland, said. Liang said he would set up the office this month. Some 30,000 Taiwanese businesses have poured more than US$20 billion into China since a political thaw in the late 1980s. An 80-member Taiwanese business delegation has been visiting Beijing and other Chinese cities since August 27. Before he lost his last title as a senior adviser to President Lee Teng-hui in May, Liang had been one of a quickly diminishing number of Taiwan politicians originally from the Chinese mainland who were still in government. "Since I lost the senior adviser title, I have been all alone. But with no government or party titles, it should be more convenient for me to do things there (in China)," he said. Before democratic reforms begun in the late 1980s, Taiwan had been ruled by exiled mainland politicians who fled to the island after China's communists toppled their Nationalist government in 1949. Beijing considers Taiwan a rebel province. The mainlanders began losing power after Lee, the island's first native-born president, took office in 1988 and deepened reforms initiated by late President Chiang Ching-kuo. An increasing number of native Taiwanese have taken over key government positions since the 1980s, easing aside politicians who came from mainland China in 1949. Taiwan's mainland-born population has shrunk to below 15 percent. The central bank's loose monetary policy, including repeated cuts in reserve requirements, had lowered banks' operating costs and increased their profit margins, the report said. But many electronics firms were forced to scale back their more optimistic profit forecasts due to a worldwide slowing in their industry, it said. Taiwan computer giant Acer Inc last week slashed its 1996 profit target by half to T$3.0 billion on expected sales of T$68.52 billion, citing slow demand and low prices. Mosel Vitelic Inc, one of Taiwan's leading dynamic random-access memory chip makers, also lowered its 1996 net profit forecast to T$4.029 billion from T$8.268 billion, the second time in 1996 that it had lowered its net forecast. 7604 !GCAT !GPOL !GVIO Cambodia's co-prime minister, Hun Sen, said on Monday he had met representatives of a breakaway guerrilla faction of the Khmer Rouge to try to strike a deal for national reconciliation. Hun Sen, accompanied by Defence Minister Tea Ban and other government officials, flew to this western Cambodian province and met a team of Khmer Rouge dissidents led by Ieng Vudh, son of breakaway faction leader Ieng Sary, officials told Reuters. Also present at the first direct talks between Hun Sen and the dissident guerrillas were Long Norin, Ieng Sary's general secretary, and some other divisional commanders of the Khmer Rouge's breakaway divisional commanders, they added. "Today I met the people from Phnom Malai and Pailin. On behalf of the Royal Cambodian Government I want to inform you that these people have opposed Pol Pot and are working with the government for national reconciliation," Hun Sen said. The dissident faction broke away from the main hardline Khmer Rouge led by paramount leader Pol Pot last month. Cambodian government troops have been sent to help the Khmer Rouge dissidents beat off an attack by their former comrades in northwestern Cambodia, army sources said on Friday. 7605 !E51 !E511 !ECAT !GCAT !GDIP Taiwan investment in China started to pick up in the second half of 1996 and could reach $50 billion in the next two years, the chairman of the Taiwan Business Association of Shanghai said. Yang Dazheng said an improvement in the political atmosphere between Beijing and Taipei had led to an increase in investment which would continue during the second half of 1996. "In the second half of 1995 and first half of 1996, the political atmosphere was very bad," he said in an interview. "Companies are very sensitive to this and suspended projects that were already approved by the companies and the Taiwan government. "Now the atmosphere is not so tense, investment has begun to increase. Bilateral investment is good for both sides. If political differences are not so big, investment will speed up." Yang put the level of cumulative Taiwan investment in China at $30 billion, directly employing five million people. He said the real figure was higher because companies under-reported their investment or directed it through third countries. Other estimates have put Taiwan investment in China at $20 billion since the late 1980s. More money was going into manufacturing, especially of electronics, foodstuffs, consumer goods, computers, machinery and petrochemicals and proportionally less into real estate and service companies, such as restaurants and karaoke bars, he said. He forecast a steady increase in investment. "Since the base is already large, I do not expect such a rapid growth in investment (in percentage terms)," he said. "It will increase gradually. There will be small differences (between Beijing and Taipei) but they will not be so serious as in the past." He said the total could reach $50 billion within two years. Beijing has viewed Taiwan as a rebel province since the Nationalist government lost a civil war to the communists and fled to the island in 1949. Beijing insists Taiwan is not entitled to official links with other states. China has stepped up pressure on the island to lift a decades-old ban on direct trade and transport links with Taiwan. On August 20, Beijing unilaterally announced a set of regulations to pave the way for direct shipping links. Taiwan has banned direct trade, transport and mail links since 1949. Indirect trade and investment has been allowed since the late 1980s. 7606 !GCAT !GOBIT !GPOL !GPRO One of the first Cambodians to organise resistance against Pol Pot's brutal 1975-79 Khmer Rouge rule has died and was cremated on Monday, a political colleague said on Monday. Family members, military officials and members of the Buddhist Liberal Democratic Party (BLDP) paid their last respects to Keth Reth, a two-star general who died last Wednesday aged 60 from a liver ailment, BLDP member Pol Ham said. Keth Reth, a member of the BLDP board of directors and an adviser to Cambodian co-Defence Ministers Tea Banh and Tea Chamrath, was "one of the first freedom fighters...he was against the Khmer Rouge and then against the Vietnamese". Keth Reth took up arms against Pol Pot in 1978 from bases on the northwest border with Thailand and continued the fight against Vietnamese forces that ousted the Khmer Rouge in 1979. He commanded forces for the Khmer People's National Liberation Front, which was to form an alliance with the Khmer Rouge in 1982 against the Phnom Penh government. Pol Ham said Keth Reth's main base was at Phnom Malai, which is now under the control of dissident Khmer Rouge guerrillas loyal to Pol Pot's former foreign minister Ieng Sary, who wants reconciliation with the government. Keth Reth ran as a BLDP candidate for Phnom Penh in U.N.-run elections of 1993 which led to the formation of the current coalition government, which includes the BLDP. Pol Pot's administration is blamed for the deaths of more than one million people through overwork, starvation or disease during the Khmer Rouge's "killing fields" reign. The Khmer Rouge signed a peace pact in 1991 but boycotted the 1993 polls and took up arms against the coalition. It is now said to be racked by its gravest rift since the 1970s. 7607 !GCAT !GPOL !GVIO Burma's military government said on Monday opposition leader Aung San Suu Kyi's National League for Democracy (NLD) was colluding with dissident exiles and some foreigners bent on destabilising the country. "Their aim obviously is to commit, in collaboration with a legitimate party, subversive acts both within and without the country and thus put pressure on the government," Colonel Kyaw Thein, a senior military intelligence officer, told a monthly government news conference. Kyaw Thein warned that the government would take necessary or appropriate action against the NLD if and when required. He also said some foreigners, mostly from the United States, were trying to disrupt the stability of the country ruled by the military-led State Law and Order Restoration Council (SLORC). "It is obvious that some citizens of superpower nations are blatantly trying to meddle in the internal affairs of Myanmar (Burma) and they are trying to disrupt peace and tranquillity in our country," he added. Burma recently jailed 19 NLD supporters, alleging that they plotted unrest with counterparts residing in India. The NLD supporters were also accused of distributing anti-government propaganda. 7608 !GCAT !GDEF !GDIP !GPOL A large majority of Okinawan voters plan to take part in a referendum this week and vote in favour of cutting U.S. bases in Japan's southernmost prefecture, according to a survey published on Monday. The daily Mainichi Shimbun reported that 86 percent of Okinawan voters said they planned to take part in Sunday's non-binding referendum on Governor Masahide Ota's plan to phase out U.S. bases on the island by the year 2015. Only 12 percent of those the Mainichi surveyed by telephone said they would stay away from the referendum, which Ota's conservative opponents the Liberal Democratic Party have urged supporters to boycott, the newspaper said. The other two percent did not reply. Of Okinawan voters who said they would vote, 78 percent said they would vote yes to Ota's plan to phase out the bases in Okinawa, home to 75 percent of U.S. military bases in Japan and half of the 47,000 U.S. forces stationed in the country. Ota has said that a high turnout was a strong reflection of islanders' sentiment and has promised to use the results of the referendum to buttress his campaign to press the central government and the United States for the base cuts. Last week, the 15-member Grand Bench of the Supreme Court ruled unanimously that Okinawa must appropriate land for U.S. military bases, rejecting an appeal by Ota that the military presence was unconstitutional. A bitter row between Okinawa and Tokyo erupted in September of last year after the rape of an Okinawan schoolgirl by three U.S. servicemen, who were jailed earlier this year. 7609 !GCAT !GPOL !GPRO !GVIO A former Filipino Moslem professor who raised an army against what he saw as a dictatorial regime in 1972 could think of no more fitting dowry when he took his first wife than three bullets wrapped in a piece of cloth. The bullets, aides of rebel chief Nur Misuari said, were symbols of his and his people's struggle to set up an independent nation in their ancestral homeland on the main southern Philippine island of Mindanao. On Monday, the 55-year-old rebel chieftain bowed to reality and signed a peace pact with a former enemy he must have realised he could never hope to beat on the battlefield. "War, no matter how just, is in the end still very ugly," he said recently. Born in the fishing village of Kabingaan in the Sulu islands, Misuari was the son of a merchant and grandson of a Moslem warrior. Five feet three inches (1.57 metres) tall and with a slight stoop, Misuari was a soft-spoken young man who drew little notice even when he was taking part in rowdy Manila street protests as a student at the state-run University of the Philippines. The targets of his anger then were the presence of U.S. military bases in the Philippines and American involvement in the Vietnam War. "At that time, no one thought Nur would amount to anything," fellow Moslem dissident and now lawyer Macapanton Abbas recalled. Misuari radiated intensity and was fiercely proud of being a follower of Islam in a largely Christian country where many people treat Moslems with deep distrust, those who knew him say. He was a political science instructor at the university when he abandoned the classroom for the gun after the country was rocked in 1968 by disclosures that army officers had ordered the massacre of Moslem trainees recruited by President Ferdinand Marcos to raid the neighbouring Malaysian state of Sabah, a territory Manila claims. Misuari went with 89 other Moslem militants to undergo guerrilla training in Sabah before launching his armed struggle as chairman of the fledgling Moro National Liberation Front (MNLF). They were the first warriors of a guerrilla army which grew to 30,000 at the height of the rebellion in the early 1970s. In his weapons training, the slightly built academic turned out to be a deadly marksman. "He can hit you with a bullet between your eyes, whether he is firing a .45 pistol or an Armalite," fellow warrior Abubakar Jul said. The first shot in the revolution was fired in October 1972 when, a month after Marcos declared martial law, the MNLF seized Mindanao State University in Marawi city. Hunted by soldiers, Misuari had by then gone into exile to direct the war from Libya, one of the revolution's backers. The woman he gave the three bullets to in 1974 was Desdemona, also an MNLF guerrilla. She died in 1987 after a gall bladder illness, leaving three sons and three daughters. A year later, Misuari married her eldest sister, Eleanora. They have no children. In 1994, he took another bride, 19-year-old nursing student Tarhata, whose face he had picked out from a batch of 50 pictures of women aides sent him to help him choose another wife. They saw each other for the first time on the day they were married. The following year, she gave him a son. Misuari, who is running for governor in elections on September 9 in a semi-autonomous Moslem region, said one of his priorities would be to stamp out official corruption. "The burden of peace is much heavier than the burden of war," he said. "While in war you have to face only one dreadful dragon, in this social order of ours, we have too many dragons. Corruption is one dragon." 7610 !C41 !C411 !CCAT !GCAT !GOBIT !GPRO Sport shoe maker Liang Shing (Holdings) Ltd said on Monday its president David Ma died on August 25. "The directors believe that there will be no material adverse changes to the business operation of the company... notwithstanding the death of the late Mr Ma," said managing director Chang Tsung Yuan in a statement. Ma's Robinson Management Ltd held about 39.3 percent of Liang Shing as of August 30. Chang said "the directors are not aware of any changes to such shareholding at this stage." The company shares were untraded at HK$0.234 in mid-morning. -- Hong Kong Newsroom (852) 2843 6370 7611 !GCAT !GDIP United States Deputy Assistant Secretary of Commerce Marjory Searing will visit Japan in mid-September to discuss access to Japan's construction market, a U.S. embassy official said on Monday. Washington expressed dissatisfaction with access to Japan's construction market last June following an annual review of a 1994 U.S.-Japan agreement on the sector. Searing said after the annual review that the United States could file a complaint with the World Trade Organisation in Geneva if Tokyo failed to take further steps to open construction projects to foreign bidders. 7612 !E11 !ECAT !GCAT !GPOL !GVIO President Fidel Ramos said on Monday that a peace agreement between the government and Moslem rebels paved the way for even faster economic growth than the country was already enjoying. Ramos said the pact, signed two days after the Philippines reported its highest growth rate since 1990, cleared the way for the development of the mineral-rich southern Mindanao region which is also at the heart of the rapidly growing East ASEAN Growth Area. "We can now strive for higher economic growth never ... anticipated or imagined by our economic planners," Ramos said in a speech at the signing ceremony in the presidential palace. The government reported on Saturday that Gross National Product grew in the first six months of the year by 7.06 percent against 5.16 percent in the same 1995 period. Philippine officials have said that Islamic countries which helped broker the accord with the Moro National Liberation Front had pledged to back the deal with investment funds. Mindanao, the main southern island and home to the Philippines' five million Moslems, is the country's poorest region. "The growth that this peace will generate that never again will Filpinos be so desperate as to take up arms against one another," Ramos said. 7613 !GCAT !GPOL !GVIO The Philippine government signed a peace pact on Monday with Moslem rebels in a glittering ceremony at the presidential palace, formally ending 24 years of war that killed more than 125,000 people. Nur Misuari, chief of the rebel Moro National Liberation Front (MNLF), signed the pact that took four years to produce with chief government negotiator Manuel Yan while President Fidel Ramos and foreign diplomats looked on. In a speech after the signing, Misuari led a standing ovation for Ramos, praising him for his "boldness and heroism" in pursuing the peace accord, which is bitterly opposed by Christians in the southern Philippines. But the university professor turned revolutionary warned that the accord was just a beginning. He said its success would be measured by whether it produced concrete economic benefits for the main southern island of Mindanao and neighbouring islands, home to the Philippines' five million Moslems and the country's poorest region. The cost of failing to follow this through would be extremely high, he said. "Failure has the habit of unleashing the fury of war. How many times have we seen the monster get loose and unchained?" he said, referring to the south's long history of war which stretches back 400 years. The pact was also signed by Indonesian Foreign Minister Ali Alatas, who helped broker the accord, and by Hamid Algabid, secretary general of the Organisation of Islamic Conference. "This is indeed a historic moment for the Filipino nation. It is also a great day for all the peoples of Southeast Asia and for a world yearning for peace," Alatas said in a speech. "It will have a profound and positive impact on the economic stability and progress of Southeast Asia." The pact envisages a Misuari-led Southern Philippines Council for Peace and Development as a prelude to a Moslem autonomous region covering most of the south. Until the two sides came to the negotiating table, the MNLF had waged a seccessionist war against Manila. Though Moslems consider the southern Philippines as their homeland, years of Christian migration have reduced them to a minority in this nation of 68 million people. The signing of the peace agreement was hailed by the financial markets with the Manila stock index rising by 38.53 points, or 1.20 percent, to 3,259.24 points in early trade. Brokers said the peace pact would enhance confidence in the local economy. "After so many years, peace has finally landed in Mindanao," said Joey Roxas at Eagle Equities. The peace accord will boost sentiment on listed firms which have investments in Mindanao, Roxas added. 7614 !GCAT With 302 days to go before the British colony reverts to China, the Hong Kong media focused on the dispute between China and Japan over the Diaoyu islands, the inauguration of the Beijing-Shenzhen railway, and China-Taiwan relations. The Beijing-funded TA KUNG PAO said the new railway, which will be extended across the border into Hong Kong after the handover, would inject new vitality into the territory. It would strengthen Hong Kong's role as a bridge between China and the world, and would bring remote areas of the mainland to the attention of investors, the paper said. The Chinese language SING TAO DAILY said the railway would improve north-south transportation in China and play an important role in opening up inland provinces. After the 1997 handover, when the rail link crossed the border into Hong Hong, trade connections between the mainland and the territory would be strengthed, the paper said. HONG KONG ECONOMIC JOURNAL said that after military threats failed, China had devised a new strategy aimed at stimulating Taiwanese investment on the mainland as a lever to accelerate reunification. But the paper said this new trick would not work either as Taiwanese businessmen were clever and would avoid any action which might offend their government. Taiwanese businessmen would continue to invest on the mainland, but with a low profile and on a small scale, it predicted. The English language SOUTH CHINA MORNING POST said China's condemnation of Japan's claim over the disputed Diaoyu islands was not adequate. It was time to tell the Japanese that enough was enough, the paper said. Beijing should send navy boats to dismantle a Japanese-built lighthouse on the islands and remove Japanese flags to reassert Chinese sovereignty. -- Hong Kong newsroom (852) 2843-6441 7615 !C11 !C18 !C182 !C24 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Japanese drug maker Green Cross Corp on Monday confirmed a newspaper report that it would close two of its four plants in Japan and reduce its workforce as part of its restructuring programme. Green Cross plans to close the plants by 2000 and sell the land, a spokesman for the company said. Its subsidiaries will also take over the operations of the other two plants. The company will reduce its workforce to 2,000 from the current 2,400 within three or four years by cutting back on new hires and transferring workers to subsidiaries, he said. The company is also asking Sakura Bank Ltd for several billion yen worth of financial aid for the restructuring, the spokesman said. Green Cross faces compensation payments totalling about 24 billion yen to people who were infected with HIV through its contaminated blood products. The company expects to post a parent current loss of more than five billion yen in the 1996/97 fiscal year ending March 31. 7616 !GCAT !GPOL !GVIO The Philippine government signed a peace pact on Monday with Moslem rebels in a glittering ceremony at the presidential palace, formally ending 24 years of war that killed more than 125,000 people. Nur Misuari, chief of the rebel Moro National Liberation Front, signed the pact with chief government negotiatior Manuel Yan while President Fidel Ramos and foreign diplomats looked on. The pact was also signed by Ali Alatas, foreign minister of Indonesia, which helped broker the accord, and by Hamid Algabid, secretary general of the Organisation of Islamic Conference. 7617 !C12 !C13 !CCAT !GCAT !GCRIM Japanese prosecutors plan to set up a task force to investigate huge losses on unauthorised copper trading by a Sumitomo Corp trader, a major Japanese daily reported on Monday. The Yomiuri Shimbun said in a front-page story the Tokyo District Public Prosecutor's Office plans to probe the case with a view to charging Yasuo Hamanaka, the 48-year-old trader blamed by Sumitomo for the $1.8 billion dollar loss, with breach of trust. Sumitomo, one of Japan's giant trading houses, announced in June that Hamanaka lost the money in unauthorised copper trading, mainly on the London Metal Exchange, over a 10-year period. The company fired Hamanaka in June and he has been in seclusion at his home without commenting on his actions. The newspaper said prosecutors were likely to ask for help in the probe from British and United States authorities. U.S. and British law enforcement authorities have already opened investigations into the case to determine if any illegal trading practices were involved in their countries. In early August, Britain's Serious Fraud Office searched the homes of two British businessmen as part of its probe. 7618 !GCAT !GPOL Israeli Prime Minister Benjamin Netanyahu and Palestinian President Yasser Arafat could hold a landmark meeting on Monday if talks between their negotiators are successful, an authoritative source said. "They have bridged some gaps and if they finalise arrangements this morning, the meeting might even be today," the source told Reuters. Asked to confirm the report, Netanyahu's office said: "no meeting has been set at the moment and we have no additional information." The source said talks between the two sides that went into the early hours of Monday in a Tel Aviv apartment under the auspices of U.N. special envoy Terje Larsen would resume at 1000 GMT. The source said Israeli negotiator Dore Gold and his PLO counterpart Saeb Erekat were trying to agree on a joint communique which would pave the way for an Arafat-Netanyahu meeting immediately after. He said conceptual, rather than procedural, differences divided the two sides. A PLO official told Reuters that Arafat had discussed the draft communique with senior officials and proposed amendments to be discussed at the meeting later on Monday. Another PLO official said Palestinians rejected Netanyahu's intention to renegotiate parts of the historic 1993 Oslo peace accord setting up Palestinian autonomy signed by Israel's previous government. "We want a clear commitment from Netanyahu that he will implement the Oslo accords. We are arguing with the Israelis over their choice of words in the communique which shows they want to negotiate a new agreemeent," one PLO official said. He said Palestinians would not rush the issue: "We are not in a hurry. We will continue to negotiate until we get results." Netanyahu, elected in May on a platform of getting tough in peace talks, has resisted meeting Arafat, saying he would do so only out of Israeli security concerns. A meeting with Netanyahu is important for Arafat, who risked his political life on the peace deal which Palestinians say has not yet delivered results. But meeting Arafat poses a dilemma for Netanyahu, who is caught between the right-wing constituency which elected him and Arab and international pressure to advance peace moves. A PLO official said Palestinian ideas submitted in a paper to the Israeli side demands a halt to all Jewish settlement activities, land confiscation and house demolitions in Arab East Jerusalem and in West Bank areas still under Israeli security control. The official said the paper also demanded the immediate resumption of negotiations on the final status of the West Bank and Gaza Strip which have yet to resume under Netanyahu. 7619 !GCAT !GVIO An Iraqi Kurdish group said on Monday Baghdad's troops remained in the northern city of Arbil and were carrying out mass executions in the streets. Asked to confirm U.N. reports that Iraqi troops had evacuated Arbil, Patriotic Union of Kurdistan (PUK) Ankara representative Shazad Saib said: "It is not true. "(Iraqi troops) have committed mass executions in Arbil itself of PUK members -- some of them have been executed in the streets. A few hundred have been killed. Many hundreds have been arrested," Saib told Reuters. He said there were reports that those arrested, including members of the Iraqi Turkoman community and communists, were being taken to the town of Mosul, under Iraq's central control. U.N. officials contacted in Arbil by telephone said they had not heard about any mass executions. "We have seen the Iraqis leaving," one official said. "It is quiet, almost." Reuters reporters in northern Iraq said they had been prevented by KDP members from going near Arbil, which Iraqi troops captured on Saturday in a joint assault with the Kurdistan Democratic Party (KDP). PUK officials in London said they had no information that the Iraqis were leaving. "But in any case they will leave the "Mukhabarat" (secret service) and a lot of equipment behind -- like they did in Kuwait," a PUK spokeswoman said by telephone. The umbrella opposition Iraqi National Congress (INC) said the secret service had made its headquarters in the Kurdish parliament building in Arbil, the administrative centre of the Kurdish-controlled north. The KDP was guiding the Iraqi troops who went from door to door armed with lists and rooted out figures of opposition to President Saddam Hussein, INC officials said. The INC and PUK leader Jalal Talabani said Saddam's troops had executed nearly 100 defectors from the Iraqi army in a camp near Arbil on Saturday. Saib denied reports by the KDP that Iraninan troops had entered northern Iraq, and said this was a ploy to justify the KDP's involvement with Saddam. 7620 !GCAT !GDEF !GDIP !GVIO Iraqi troops along with their heavy armour and artillery have evacuated Arbil, Iraqi Kurdistan's capital which they captured on Saturday, U.N. relief officials and guards said on Monday. "All Iraqis have left Arbil. We cannot see any more tanks or vehicles or artillery. They are about five kilometres (three miles) away now," one U.N. official in Arbil told Reuters by telephone. There was no immediate reaction from the United States where President Bill Clinton had been conferring with American allies on how to respond to the Iraqi move. The U.N. official's comments came just hours after Iraqi President Saddam Hussein ordered his forces to withdraw from northern Iraq following two days of fighting in support of one Kurdish rebel faction against another. Iraq's state-run television said Saddam gave the order to his defence minister at a cabinet meeting late on Sunday. It had given no timetable for a withdrawal. U.N. Secretary-General Boutros Boutros-Ghali, saying he was "very much concerned about the deterioration of the situation in northern Iraq," announced on Sunday that he was delaying implementation of an oil-for-food deal with Baghdad. The plan would allow Iraq to sell $2 billion of oil over six months to buy humanitarian supplies for people suffering under sanctions imposed after Iraqi troops invaded Kuwait in 1990. Oil had been expected to start flowing onto world markets in September. Crude oil prices rose in early Asia trading on Monday in reaction to Boutros-Ghali's announcement. Iraqi troops supporting the Kurdistan Democratic Party (KDP) captured main Kurdish city of Arbil from rival forces of the Patriotic Union of Kurdistan (PUK) on Saturday and hoisted the Iraqi flag over what used to be the Kurdish parliament. On Monday, one U.N. official said rebels of KDP leader Massoud Barzani were in control of Arbil and their yellow flag was flying over administrative buildings in the city. Fighting between the two Kurdish factions -- long-time rivals who have shifted alliances between Iraq and Iran -- flared in mid-August despite U.S. efforts to broker a ceasefire. Clinton has placed U.S. forces in the region on high alert and spoke by telephone on Sunday to several world leaders, including British Prime Minister John Major and Saudi Arabia's King Fahd, about the crisis. U.S. officials said General John Shalikashvili, chairman of the joint chiefs of staff, and Assistant Secretary of State John Pelletreau were in Saudi Arabia for diplomatic discussions. "I am not drawing lines in the sand, that is not the purpose of the consultations we have under way," White House spokesman Mike McCurry told reporters with Clinton in Little Rock, Arkansas. "There is no justification for the military action Saddam Hussein has taken...The United States believes that he cannot conduct himself with impunity, that there should be consequences." Washington said U.N. Security Council resolutions approved after the Gulf War provided the legal basis for responding to Iraq's offensive, though officials admitted that Saddam had the right to move troops around within that part of his own country. Arbil was not in a zone placed off-limits to Iraqi troops by the United Nations after the Gulf War to protect the Kurds. But U.S. officials said it was within the "no-fly zone" and U.N. resolutions broadly protecting Kurds against repression applied. A senior member of the KDP, Sami Abderrahman, said the faction's fighters received arms and ammunition from Iraq but he denied that Iraqi forces took part in the battle for Arbil. "The fighting ... in Arbil was all done by our peshmerga (fighters). We got military support from Iraq, which was confined to arms and ammunition," he told reporters in Salahuddin in northern Iraq. Abderrahman also said the KDP looked to Baghdad for support after the PUK started to get backing from Iran -- an allegation denied by Iran. Talabani told BBC radio that the region could split into pro-Iraq and pro-Iran camps and dropped a broad hint that his group would look to Tehran for support if Washington and its allies did not respond to Saddam's intervention. 7621 !GCAT These are some of the leading stories in the Iraqi press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. JUMHOURIYA - France says that U.N. resolutions do not prevent the presence of Iraq's troops in Kurdish areas. - Vice-chairman of the Revolutionary Command Council Izzat Ibrahim met with Talabani tribe (which Jalal Talabani head of the Patriotic Union of Kurdistan belong to) in northern Iraq. The tribe expresses loyalty to President Saddam Hussein. - Mayalsia wants to establish good trade ties with Iraq. 7622 !GCAT These are the leading stories in the Moroccan press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. AL-BAYANE - More than third of foreigners' requests in Spain for residence permits come from Moroccans. LIBERATION - Gas price expected to rise on world market and this could affect local businesses. AL-ALAM - World Bank report says illiteracy puts Morocco at 119th rank. The report advises the education ministry to take over building schools -- rather than local communities -- to curb corruption and embezzlement. 7623 !GCAT !GDIP !GVIO Turkish Foreign Minister Tansu Ciller said on Monday Baghdad's troops had left the northern Iraqi town of Arbil, which it took in a joint assault with a Kurdish faction at the weekend. "I know that as of today (President) Saddam (Hussein)'s forces have withdrawn and that this order has been given. We are pleased about this," Ciller told reporters. United Nations officials said earlier that Iraqi tanks had left Arbil, the administrative centre of the Kurdish-held north. But the Patriotic Union of Kurdistan faction said Iraqi soldiers remained in Arbil and were carrying out mass executions there. "It was of course not the right approach for Iraqi forces to enter Arbil," Ciller said. Asked if there was any question of Turkey massing troops on its border with northern Iraq, where it launched a six-week incursion early last year in pursuit of its own rebel Kurds, Ciller, without elaborating, said: "Turkey has taken the necessary measures." The foreign ministry said at the weekend Ankara would not allow a repeat of a post-Gulf War exodus of Iraqi Kurdish refugees into Turkey. An estimated two million Iraqi Kurds had crossed into southeast Turkey at the time. 7624 !GCAT These are some of the leading stories in Syrian newspapers on Monday. Reuters has not verified these stories and does not vouch for their accuracy. Syria Times - Egyptian Foreign Minister Amr Moussa at a news conference with Israeli counterpart David Levy says: "Practical steps needed to push the peace process forward." - New road project serves Israeli settlers at the expense of Arab land. Tishreen - Egypt links holding of the Middle East economic conference to advancing the peace process. - Syrian Foreign Minister Farouq al-Shara starts a visit to Paris to discuss the peace process and bilateral ties. al-Baath - Arab media stress the comprehensive peace solution of the Middle East and links between the Syrian and Lebanese tracks. - Arab League discusses Zionist settlements in Arab lands and says Israel should be stripped of its nuclear weapons. - Israel and Germany cooperate in military field. 7625 !GCAT !GPOL !GVIO The following are the main groups in Kurdish-controlled northern Iraq where Iraqi troops have intervened in fighting among Kurdish factions, prompting the United States to place its Gulf forces on high alert. KURDISTAN DEMOCRATIC PARTY - The KDP was founded in 1946 by Mollah Mustafa Barzani while in exile in the Soviet Union. The KDP was briefly legalised after an Iraqi coup d'etat in 1958, and in 1970 it secured agreement with Baghdad over self-rule in Kurdish areas as well as Kurdish participation in the Baghdad government. Both attempts at legitimacy collapsed. The party was taken over by his son Massoud after the death of Mustafa in 1979. The younger Barzani has also spent years in exile, living and traveling in the Middle East, the former Soviet Union, Europe and the United States. He speaks Farsi, Arabic, English and both the Kurmanje and Sorani dialects of Kurdish. He enjoys solid support among mountain tribes. Many educated, urban Kurds also follow him as they see his policy of reconciliation with Baghdad as the only realistic choice. Barzani, 50, controls the north-west of the country, including the border with Turkey, where it charges duties on the lucrative and illicit oil trade from Iraq. Around a quarter of Iraqi Kurdistan territory is under KDP control. The rival Patriotic Union of Kurdistan (PUK) says it is currently supported by the regime in Baghdad. PATRIOTIC UNION OF KURDISTAN - The PUK is led by Jalal Talabani, previously a leading KDP member who often had disputes with Mustafa Barzani in the 1960s, accusing the party of being a backward, tribal organisation. He finally quit the KDP and set up the PUK in June 1975. The party soon began fighting the KDP. Talabani linked up with Iraqi forces to fight the KDP in a feud which lasted into the 1980s. Recognizing he could never lay claim to a traditional network of clan support like that enjoyed by the Barzanis, Talabani built the PUK as a modern political party. He developed broadcast and newspaper outlets to reach educated, urban Kurds. After the 1991 Gulf War, the PUK appeared reconciled with the KDP. And in 1992 elections, the two parties took 50 seats each in the regional Kurdish government, based in the main city of Arbil. But the disputes have continued, often violently. The PUK controls the centre and the south-east of the country. It took the regional capital Arbil after an assault in December 1994. It says around half of Iraqi Kurdistan territory and 70 percent of the population is under its control. The KDP says the PUK has recently received military support from Iran. IRAQI NATIONAL CONGRESS - The London-based INC was set up in 1992. It brings together Iraqi opposition groups, including the KDP, PUK and Islamic parties. Led by Iraqi businessman Ahmad Chalabi, it has worked to lobby for Western support and often mediated in conflicts among rival Kurdish factions. It says it has high-level contacts and support among officers of Saddam's army in Baghdad, as well as offices in northern Iraq and London. KURDISTAN WORKERS PARTY - The Kurdistan Workers Party (PKK) has been fighting a 12-year-old campaign for independence or autonomy in southeast Turkey in which more than 20,000 people have died. Ankara says PKK rebels use northern Iraq as a base from which to attack southern Turkey. The party leader Abdullah Ocalan, believed to be based in Syria, declared a unilateral ceasefire in December though fighting has continued. Relations with the two warring Iraqi Kurd factions have been uneasy, but Ocalan's son attended the KDP's 50th anniversary celebrations earlier this month, prompting concerns in Ankara of cooperation between the two groups. TURKOMAN COMMUNITY - The Turkomans are a Turkic community of around two million, 200,000 of them living in northern Iraq. The main party is the Iraqi National Turkoman Party, which boycotted the 1992 elections for the Iraqi Kurdish parliament. The Turkomans want the autonomous region in northern Iraq to be extended southwards to include the oil-rich Kirkuk region and other areas mainly populated by Turkomans. 7626 !GCAT !GCRIM !GPOL !GVOTE A private Lebanese watchdog group denounced on Monday the "high level" of infractions and irregularities reported in the third round of Lebanon's parliamentary elections in Beirut. The Lebanese Association for the Democracy of Elections (LADE), an independent group established in March to monitor the elections, said its monitors reported hundreds of violations in Sunday's round including buying votes for government candidates. "LADE denounces the continuingly high level of infraction and irregularities and intervention in the election process," the group said in a statement. Campaigners at an electoral office of billionaire Prime Minister Rafik al-Hariri -- heading a list of 17 candidates -- were seen by a Reuters reporter bribing voters. Hariri's office denied the incident and accused rival candidates' supporters of making the payments. "The vote for the government list was being purchased at 100,000 Lebanese pounds (approximately $64)," LADE reported. LADE said official monitors of the main opposition list headed by ex-premier Selim Hoss were kicked out of some polling stations. "Also reported were thousands of omissions from the voters lists, long delays in the processing of corrections for these lists and hundreds of cases in which voters arrived to voting stations to find that someone else had already voted in their place," LADE said. However, the group said that most of the infractions in Beirut were administrative and the level slightly lower than in previous rounds of voting in Mount Lebanon and North Lebanon. Opposition candidates and LADE had alleged wide abuses in the first two rounds, when pro-government candidates swept aside all but three opposition candidates. Christian opposition leaders seeking a political comeback were crushed in the first round of polling in Mount Lebanon. But Sunday's bribery incident was one of the most serious of all alleged violations in the five-stage polls in which south Lebanon and the eastern Bekaa valley will vote on the two following Sundays. 7627 !GCAT These are some of the leading stories in the Bahraini press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. AL-AYAM - Bahrain's commerce minister arrives in Damascus and holds talks on ways of developing trade and economic links with Syria. - A small fire breaks out at a power station unit in Manama. AKHBAR AL-KHALEEJ - Cabinet discusses developing Shura council and plans to increase its members. The council will focus on reactivating the economy and pushing forward the development process. 7628 !GCAT These are the leading stories in the Turkish press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. SABAH - Fourteen people are killed and thirty-five injured in a traffic accident caused by an insane person attacking the driver of a coach. - The opening of the Kirkuk-Yumurtalik oil pipeline between Turkey and Iraq under a U.N. "oil-for-food" deal is at risk as Iraqi President Saddam Hussein joins fighting in northern Iraq. MILLIYET - Islamists in government menace university deans by narrowing their budget if they do not allow students with Islamic headscarves to get an education under school dress rules. HURRIYET - Foreign Minister Tansu Ciller calls on Saddam to withdraw his troops from Arbil in northern Iraq. - The energy minister's plans to build 13 new natural gas power plants found unrealistic as it contradicts current policy and regulations. CUMHURIYET - Markets are sick of price rises enforced by the Islamist-led government to combat the budget deficit. YENI YUZYIL - Islamists criticise the chief of general staff for likening the Islamist Welfare Party to Iranian Islamists. DUNYA - Islamist Prime Minister Necmettin Erbakan is aiming to raise $10 billion in his second "economic package" since he came to power in June. ZAMAN - The United States is gearing up to include Turkey in the black list of countries that take a role in drug trafficking. This is supported by a mounting consumption of drugs in Turkey. 7629 !GCAT These are some of the leading stories in the Jordanian press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. AL-RAI - Prime Minister Kabariti says "will transfer those involved in recent troubles (bread riots) to courts". - Kabariti says "the weakness of Iraq and the suffering of its people have opened the door for all forms of regional interference." AD-DUSTOUR - Karak deputy Nazih Amareen submits his resignation from parliament. - Approval of the first stage of Queen Alai international airport's expansion plan undertaken with Dutch assistance. - Release of a group of detainees held after bread riots. AL-ASWAQ - State-run Telecommunications Corporation to be transferred into a state-owned publicly listed company by end of next month. - Increase in Jordanian agricultural produce exports to Saudi Arabia soon. JORDAN TIMES - Jordan denies report of planned deployment of U.S. fighter planes. - Kabariti reaffirms commitment to closely cooperating with legislature, deputy says premier promised to free all but 30 detainees held after riots. 7630 !GCAT These are the leading stories in the Egyptian press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. AL-AHRAM - President Hosni Mubarak holds an important meeting with Prime Minister Kamal Ganzouri and seven ministers. A giant project to dig a canal to the New Valley in the Western Desert to cultivate 500,000 acres and create new jobs. - Seven new private airports. Airports in central Delta to be used for exporting goods. - President Mubarak and U.S. President Bill Clinton review during a telephone call developments in the peace process. AL-AKHBAR - Egyptian contacts with Britain to make it reconsider its approval to hold a terrorist conference. - Water level continues to rise in the Nile. - Egypt watch with concern Iraqi developments. AL-GOMHURIA - Mubarak approves the private sector building six new airports to attract international tourism. - President of the United Arab Emirates Sheikh Zaid bin Sultan al-Nahayan to visit Cairo before the end of September. -- Cairo newsroom +20 2 578 3290/1 7631 !GCAT NICOSIA, Sept 2 (Reuter) These are some of the leading stories in Greek Cypriot newspapers on Monday. Reuters has not verified these stories and does not vouch for their accuracy. ALITHIA - Cyprus's military spending will not stop the country meeting the Maastricht criteria for European economic and monetary union, says President Glafcos Clerides. - Western diplomats are pushing for another initiative on the Cyprus problem with the more prominent involvement of the U.N. Secretary General. - Shortage of potatoes forces prices up at local street markets. - More than 400 industrial units have applied for subsidies offered by the government under a support scheme. HARAVGHI - The Cyprus problem is a priority for Greece, says National Defence Minister Gerassimos Arsenis. - Turkish Grey Wolves are the 'children' of the American CIA, which financed the creation of training camps in Turkey in 1965. - Vast amounts are spent by placing illegal bets on dog races beamed via satellite from abroad. PHILELEPHTHEROS - Recent crisis in Cyprus instigated by (Turkish Cypriot leader Rauf) Denktash aimed at undermining Cyprus' accession talks with the European Union and to justify any possible attempt to integrate the occupied areas with Turkey. - The military balance in the region has been overturned, says Greece's National Defence Minister Gerassimos Arsenis. - Defence spending this year is to be lower, says independent defence expert. SIMERINI - Thrace, Aegean and Cyprus have a common fortune and future, says Greek national defence minister. - Settlers and students are members of the Grey Wolves branch which operates in the occupied areas. - Bill on the creation of casinos is to be processed by the Attorney-General's office. 7632 !GCAT These are some of the leading stories in Kuwait's press on Monday. Reuters has not verified these stories and does not vouch for their accuracy: AL-QABAS - Kuwait to name acting ministers who will temporarily take over the duties of four cabinet ministers who have resigned in order to run for election to the national assembly. Kuwaiti law does not allow serving ministers and state officials to stand as candidates for parliament. Parliamentary elections will be held on October 7. - Bankers expect all debtors to comply with a September 6 deadline to settle the latest in a series of annual instalments in a private sector bad debt recovery programme. The original debt owed to the state amounts to about $20 billion. AL-WATAN - Property firms lead trade at the Kuwait Stock Exchange with 52.8 percent of volume. AL-RAI AL-AAM - Kuwait Investment Authority in talks with banks to manage a mutual fund worth 50 million to 100 million dinars ($167 million to 334 million). - Information minister says turning Kuwait's privately-owned newspapers into public shareholding companies is an idea that could be examined in the future. 7633 !GCAT These are the leading stories in the Beirut press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. AN-NAHAR -Reoccurrence of law violations in Beirut elections. -The government accuses Hizbollah of rigging. -Indifference among West Beirut voters and boycotting by east Beirut voters. -Preliminary results: Prime Minister Hariri first then former prime minister Hoss followed by MP Wakim. AS-SAFIR -Lebanon refuses Israel's complaint to the five-nation committee, monitoring the April ceasefire understanding. -Parliament Speaker Berri: Hizbollah refused to be our ally in the south Lebanon elections. AL-ANWAR -Hizbollah to announce its list in the Bekaa valley. AD-DIYAR -Hariri: Beirut elections will determine our future. -Maronite Patriarch Sfeir Nasrallah: Democracy is hollow in Lebanon. NIDA'A AL-WATAN -Supporters of exiled former army commander General Aoun demonstrated in east beirut. 7634 !GCAT !GPOL Israeli Prime Minister Benjamin Netanyahu and Palestinian President Yasser Arafat could meet on Monday if talks between their negotiators are successful, an authoritative source said. "They have bridged some gaps and if they finalise arrangements this morning, the meeting might even be today," the source told Reuters. The source said that talks between the sides that went into the early hours of Monday morning would resume at 0730 GMT. Some of the problems between the sides had been bridged, the source said, but gave no details. Israeli and PLO officials, hoping to nail down agreement on a landmark meeting between Netanyahu and Arafat, are holding marathon closed-door talks to rescue their flagging peace process. Palestinians on Sunday said a number of issues remained unresolved, and Arafat convened his senior officials for a meeting early on Monday in Gaza to discuss them. Palestinians have so far rejected Netanyahu's plan to renegotiate an Israeli troop redeployment in the West Bank town of Hebron committed to by Israel's previous government. 7635 !GCAT These are some of the leading stories in Israeli newspapers on Monday. Reuters has not verified these stories and does not vouch for their accuracy. JERUSALEM POST - Netanyahu-Arafat meeting imminent, negotiators said close to reaching understanding. - Internal Security Minister Kahalani: Israel should find a way to leave south Lebanon. - U.S. sceptical about Iraqi withdrawal reports. - Peres says Netanyahu will meet Arafat out of pressure, not leadership. - Budget deficit already exceeds target for all of 1996. - Bidders shun Leumi request to up Africa Israel ante. - Dankner group has not ruled out selling Hapoalim Investments to Dovrat-Shrem group. HAARETZ - Israel-PLO agreement to renew negotiations delayed over argument over Israeli redeployment from Hebron. - Treasury worried as January-August budget deficit reaches 8.6 billion shekels. - United States: 'we have prepared a strategy against Iraq including operational decisions.' - Bank of Israel proposes establishment of monetary authority, price stability main goal. YEDIOTH AHRONOTH - Feverish struggle to set up Netanyahu-Arafat meeting. - U.S. decides to attack Iraq. - Hamas spiritual leader Sheikh Yassin to be released soon. - May-June industrial production grew by 4-5 percent. MAARIV - Battle to prepare the way for Netanyahu-Arafat meeting. - Soon: 1,000 more apartments in settlements around Jerusalem. - Egyptian Foreign Minister Moussa: no economic conference without Hebron redeployment. GLOBES - August budget deficit 2.1 billion shekels; expected annual deficit 13 billion shekels. - Bank of Israel proposes establishing monetary authority headed by central bank governor without representation of interested parties. 7636 !GCAT !GDIP Iranian President Akbar Hashemi Rafsanjani left on Monday for Kenya at the start of a tour of six African countries, Tehran radio reported. The radio, monitored by the British Broadcasting Corporation, did not give other details. Rafsanjani will visit Kenya, Uganda, South Africa, Zimbabwe, Tanzania and Sudan over a period of up to 12 days to boost economic cooperation in the face of U.S. sanctions. The tour comes less than a month after U.S. President Bill Clinton tightened sanctions against Iran, which Washington accuses of sponsoring terrorism, a charge Iran denies. Iran is eyeing African countries for oil and non-oil exports and has signed trade deals with several of them and exhibited Iranian products in Kenya and South Africa. 7637 !GCAT !GPOL Israeli and Palestinian officials held marathon closed-door talks to try to nail down terms for a landmark meeting between Israeli Prime Benjamin Netanyahu and Palestinian President Yasser Arafat. As the talks lasted into Monday morning, Foreign Minister David Levy told Israel's Channel One television that a first face-to-face encounter between the two leaders could "very possibly" take place by the end of this week. But Palestinians said several issues remained unresolved and Arafat convened his senior officials for an pre-dawn meeting on Monday in Gaza to discuss them. Levy met Egyptian President Hosni Mubarak on Sunday to discuss Israeli-Palestinian relations, which have plunged in the past week to their lowest point since Netanyahu was elected in May at the head of a right-religious government. Netantahu, facing the threat of a rekindled Palestinian uprising should the peace process founder, gave his strongest indication yet that he would agree to meet Arafat soon. But Arafat aide Nabil Abu Rdeineh said the Palestinian leader would withhold agreement until he was certain a meeting would be more than merely "a show for the world, a handshake for the sake of world media on Netanyahu's part." Abu Rdeineh, asked by Reuters what points must be settled before a Netanyahu-Arafat meeting, said the Israeli government must commit itself to carrying out all remaining elements of the interim peace agreement. He said the Palestinians demanded "a full Israeli commitment to implement the peace deal and, at the top of the list, the agreed-upon troop redeployment in Hebron and freeing of Palestinian woman prisoners." Palestinians accuse Netanyahu of trying to shelve or back out of interim accords reached with the former government of Shimon Peres, who froze the planned Hebron pullback amid a wave of Islamic suicide bombings in Israel early this year. One official said the negotiators, meeting in a Tel Aviv apartment under the auspices of U.N. special envoy Terje Larsen, were working on a joint communique which would pave the way for an Arafat-Netanyahu meeting "directly thereafter." Israeli negotiators, led by Netanyahu adviser Dore Gold, were pressing the Palestinians to agree to a rediscussion of elements of the Hebron withdrawal agreement, state-run Israel Radio said. Netanyahu, asked about reports that he would meet Arafat this week, replied: "I have said that when the developments allow, we would announce the meeting -- and indeed, there are all sorts of developments." He did not elaborate. Netanyahu, who opposes trading occupied land for peace, had said he was in no hurry to meet Arafat but softened his line a week ago after President Ezer Weizman signalled he would see the Palestinian leader if the prime minister refused. Netanyahu has angered Palestinians by rejecting curbs on Jewish settlement construction declared by the the previous Israeli government. Last week, in a move widely seen as a slap to Arafat, Israel demolished an Arab community centre it said was built illegally in East Jerusalem. Two days earlier Arafat had bowed to a Netanyahu demand to close two Palestinian offices in the city. Israel regards Palestinian political activity in the city's Arab eastern half as a challenge to its claims of sovereignty over the sector it captured in the 1967 Middle East war. The Palestinians regard East Jerusalem as their future capital. Arafat warned Israel last week that Palestinians had other options if it did not honour its peace agreements and he hinted they could resume the intifada, the Palestinian uprising that began in late 1987 against Israeli rule. 7638 !GCAT !GVIO A blast destroyed a garage in Corsica's capital city early on Monday, the 30th bomb attack since mid-August on the French Mediterranean island, police said. The explosion started a fire which was fuelled by paint stored in the garage. The fresh wave of violence, chiefly hitting public buildings, has been blamed by police on separatists who called off a shaky seven-month truce on August 14. Unions called on staff at the island's tax offices to stop work on Monday to protest at insecurity -- tax offices are regularly targeted by the guerrillas. Prime Minister Alain Juppe last month promised to crack down on guerrilla violence and seven suspects were detained in a series of police raids last week. 7639 !GCAT Headlines from major national newspapers. Reuters has not verified these stories and does not vouch for their accuracy. EL PAIS - Basque separatist group ETA (Basque Homeland and Freedom) and its political wing Herri Batasuna (Popular Unity) pressure moderate Basque Nationalist Party to break with state. EL MUNDO - Former minister of public works Jose Borrell squandered funds for "clearly electoral" purposes. - New witness reveals details of numbered bank accounts held abroad by Civil Guard General Enrique Rodriguez Galindo, on trial for his alleged involvement in the kidnapping, torture and deaths of two presumed ETA rebels while in custody in 1983. ABC - Prison officers denounce harrassment from ETA. CINCO DIAS - Diesel motors represent 37 percent of Spanish car market. - Social security to Economy Minister Rodrigo Rato: look but don't touch. - Catalan President Jordi Pujol insists budget accord is difficult. EXPANSION - Government rules out new rises in special taxes in 1997. - Inflexibility of Spanish labour law slows bank mergers. - Telefonica, Repsol and Endesa begin key year. GACETA DE LOS NEGOCIOS - La Caixa invests 100 billion pesetas to jostle with large banks. - Prime Minister Jose Maria Aznar says Maastricht is "a great opportunity which we must take advantage of". 7640 !GCAT NEUE ZUERCHER ZEITUNG - Waser Holding boosted 1995-96 sales by 14 percent to 76 million Swiss francs. - Fines for automobile, bicycle and pedestrian traffic and parking violations increased markedly throughout Switzerland as of this past Sunday. Cyclists caught on the road without a bell on their bicycles, riding "no-hands" or double, will be hit with a 20 franc fine. TAGES ANZEIGER - Zurich airport now forbids excessively loud jets from using the airport on weekends. 7641 !C12 !CCAT !GCAT Former Mannesmann AG chief executive Werner Dieter has agreed to pay one million marks ($674,000) sought by Duesseldorf prosecutors to end an investigation against him, lawyers for Dieter said on Monday. The money is not a fine or penalty, and Dieter has made no admission of guilt, they said. He merely sought to end negative publicity for himself and the companies concerned, and avert a trial that could have lasted years. He was under investigation for channelling Mannesmann contracts on terms favourable to a family-run company since 1963. Dieter was management board chairman of Mannesmann from 1985 to 1994. -- Terence Gallagher, Bonn newsroom, 49 228 26097150 ($ = 1.482 German Marks) 7642 !C12 !CCAT !GCAT !GCRIM Danish biotechnology and pharmaceuticals group Novo Nordisk A/S said on Monday it welcomed a preliminary New York district court injunction in its favour against competitor Ely Lilly & Co in a case centred on alleged packaging irregularities concerning an insulin product. "By granting a preliminary injunction, the court has supported Novo Nordisk's assertion that the packaging for Eli Lilly's Humulin insulin cartridges confuses patients and health care professionals in violation of federal unfair competition law and was created in bad faith," Novo wrote in a statement. It said the injunction ordered Lilly to cease distribution of its Humulin insulin cartridge products in the United States until it changed its current labelling to ensure Novo Nordisk trademarks were distinguished from its own to prevent confusion. The injunction came in response to a lawsuit Novo Nordisk filed on August 1 alleging that in marketing its Humulin cartridges, Lilly deliberately created packaging materials with false and misleading statements concerning Novo's insulin pen delivery systems and trademarks. The case is due for trial in New York on November 4. --Chris Follett, Copenhagen newsroom +45-33969652 7643 !GCAT !GDIS !GENV Dozens of forest fires fanned across northern and central Portugal in soaring temperatures on Monday and one fire threatened houses, an official spokesman said. "There are five fires in north and central Portugal that are especially worrying because they cover a wide area and need many firemen to tackle them," Pedro Araujo, coordinator of emergency operations for the civil defence, told Reuters. He said one fire threatened houses near Macedo de Cavaleiros in northern Portugal. Forest fires are an annual problem during the hot Portuguese summers and cause millions of dollars worth of damage. Araujo said temperatures were forecast to remain high until at least Wednesday. Under-Secretary for the Interior, Armando Vara, said authorities suspected that criminals caused some of the fires and vowed to crack down on arsonists. "There are people who do not have legitimate interests," he told TSF radio, without giving further details. 7644 !GCAT !GENT !GOBIT !GPRO Denmark's leading modern composer Vagn Holmboe died on Sunday aged 86, music publisher William Hansen Edition said on Monday. Holmboe, the greatest Danish symphonist in the generation after Carl Nielsen (1865-1931), was influenced by Hungarian composer Bela Bartok and Romanian folk music which he studied in the 1930s. A rather subdued and ascetic composer, Holmboe composed more than 350 works, notably 13 symphonies, string quartets and vocal works, characterised by their feeling for the bleak Nordic nature and local folk melody. He was renowned internationally as one of the leading symphonists of the late 20th century, working closely with the British Broadcasting Corporation (BBC) orchestras. 7645 !GCAT !GDIS Floods have killed five people in the southern Algerian town of Ksar Chellala, Algerian state-run radio said on Monday. Lashing rain on Sunday night also caused damage in Ksar Chellala, 190 km (118 miles) south of Algiers, said the radio without elaborating. 7646 !GCAT These are the leading stories in the Maltese press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. THE TIMES - Rate of legal and illegal gambling leads to concern. Gamblers Anonymous see a huge gambling problem in Malta and express disappointment that the government is doing too little about it. IN-NAZZJON - Trade between Malta and Australia up. Trade was valued at $2.3 million in 1987 and at $6.5 million last year. L-ORIZZONT - Opposition leader insists on more capital investment in Gozo. Alfred Sant says capital investment on the sister island is not comparable to the island's population. 7647 !C17 !CCAT !G15 !G152 !G157 !GCAT Kurt Biedenkopf, premier of Lower Saxony state, said on Monday he backed European Commission President Jacques Santer's plan to solve the row over subsidies for auto maker Volkswagen AG. Santer indicated in an interview with news magazine Der Spiegel published on Monday that a compromise might include stronger EU consideration for circumstances in east Germany, and that Saxony should agree to reduce the VW subsidies. More precise EU guidelines might lead Saxony to revise its subsidies for VW, Santer said. "I see Commission President Santer's approach to a solution as absolutely correct," Biedenkopf told German television. "We have to get together and set a framework for subsidies." But Biedenkopf warned the Commission against filing a complaint to block the disputed subsidies. Even a temporary suspension of the subdidies would endanger the entire project, he said. Chancellor Helmut Kohl's cabinet was due to discuss the row on Monday. At issue is 91 million marks ($61.4 million) in subsidies Saxony paid to VW over and above 540 million marks approved by the EU for the construction of two plants in the foremerly communist east German state. The Treaty of Rome restricts state subsidies to industry, but allows exceptions for funds aimed at correcting problems related to the former separation of Germany into east and west. The Commission views the additional money given by Saxony to VW as illegal. Saxony lodged a complaint 10 days ago with the European Court of Justice in Luxembourg, seeking clarity over what subsidies were eligible for exceptions from the ordinary restrictions. Biedenkopf said he also was not seeking an unlimited exception for east Germany. He proposed allowing subsidies to run until 2005. ($ = 1.482 German Marks) 7648 !GCAT Following are some of the leading stories in the Swedish papers on Monday. Reuters has not verified these stories and does not vouch for their accuracy. DAGENS NYHETER - McDonald's hamburger chain is steadily increasing its market share in Sweden, where it now has 191 restaurants. - The Swedish government believes giving the Baltic states European Union membership and getting Russia to join in next year's military peace exercises with the West as crucial to stability in the region. SVENSKA DAGBLADET - Analysts are divided over the Swedish forestry sector. Some believe forestry shares are very cheap while others say the sector will not be able to raise prices. - Sweden's state nuclear inspection authority (SKI) has been severely criticised by an international group of nuclear experts for failing to carry out adequate inspections at power stations. - Figures show the bad summer weather in Sweden did not dissuade tourists from coming here but many more visited the cities instead of going camping and hiking. DAGENS INDUSTRI - Saying no to European Monetary Union for the time being could benefit Sweden and lead to lower interest rates, U.S. investment bank Lehman Bros says. - The Stockholm bourse will stay open one hour longer from today, to 1700 local time, enabling Stockholm to trade for one and a half hours while New York markets are open. -- Paul de Bendern, Stockholm newsroom +46-8-700 1006 7649 !GCAT These are the leading stories in the Algerian press on Monday as reported by the official Algerian news agency APS. Reuters has not verified these stories and does not vouch for their accuracy. EL MOUDJAHID - President Liamine Zeroual adresses African Youth Movement's congress in Algiers. LIBERTE - Algeria Islamist Hamas's hardline wing attacks the "soft" policy followed by its leader Mahfoud Nahanah. EL WATAN - Opposition parties await Zeroual's final words over reforms plan ahead of the national conference. LE MATIN - The government adopts measures to curb tax evasion. 7650 !E21 !E211 !ECAT !GCAT !GHEA !GPOL Spanish Economy Minister Rodrigo Rato said the government would not cut health spending, the main bone of contention in talks on the crucial 1997 budget between the government and its Catalan nationalist allies in parliament. "Health spending will not fall," Rato told a breakfast radio programme. "There is an agreement for health spending to grow in line with the growth of the economy every year, and that will be maintained." Health spending emerged last week as the main source of conflict in talks on budget between the conservative government and the Catalan nationalist Convergence and Unity (CiU) coalition. Catalan president Jordi Pujol warned late last week that both the drawing up of the budget and its negotiation looked difficult. Prime Minister Jose Maria Aznar needs the support of CiU to command a majority in parliament. 7651 !GCAT The following are leading domestic stories in Portuguese newspapers. DIARIO ECONOMICO - Prime Minister Antonio Guterres arrives in Poland for a three day visit that will underline Portugal's support for Poland's integration into the EU and Nato. - Doubts overshadowing the recovery of the paper and pulp industry caused a fall in Portucel shares last Friday. - Banco Espirito Santo (BES) is to launch a bid for Banco Internacional de Credito (BIC) at 2,790 escudos per share. PUBLICO - Portugal's Government ready to offer the concession for operating of some 272 km (170 miles) of new motorway to the private companies that will build them. The costs are around 220 billion escudos but the revenue from tolls make it an attractive business. - Siemens' new factory in Vila do Conde will be functioning fully at the end of 1997. The investment contracts have been signed and the first workers will be taken on next month, Volker Muller, number two at Siemens in Portugal, told the paper. DIARIO DE NOTICIAS - Portuguese exports grew 8.6 percent in the first five months of 1996 which means a decrease when compared to 13.9 percent growth in the same period of 1995. - Banco Portugues de Investimento (BPI) and Banco de Fomento & Exterior (BFE) attracted the investors attention last week. --Lisbon bureau 3511-3538254 7652 !GCAT !GDIP Following is the text of Security Council Resolution 688, adopted on April 5, 1991, on the plight of Kurds and other minorities in Iraq. The United States is basing its restrictions for Iraqi troops in the north, including a no-fly zone, on this document. THE SECURITY COUNCIL, MINDFUL of its duties and its responsibilities under the Charter of the United Nations for the maintenance of international peace and security, RECALLING Article 2, paragraph 7 of the Charter of the United Nations, GRAVELY CONCERNED by the repression of the Iraqi civilian population in many parts of Iraq, including most recently in Kurdish populated areas which led to a massive flow of refugees towards and across international frontiers and to crossborder incursions, which threaten international peace and security in the region, DEEPLY DISTURBED by the magnitude of the human suffering involved, TAKING NOTE of the letters sent by the representatives of Turkey and France to the United Nations dated 2 April 1991 and 4 April 1991, respectively (S/22435 and S/22442), TAKING NOTE ALSO of the letters sent by the permanent representative of the Islamic Republic of Iran to the United Nations dated 3 and 4 April 1991, respectively (S/22436 and S/22447), REAFFIRMING the commitment of all member states to the sovereignty, territorial integrity and political independence of Iraq and of all states in the area, BEARING IN MIND the Secretary -General's report of 20 March 1991 (S/22366), 1. CONDEMNS the repression of the Iraqi civilian population in many parts of Iraq, including most recently in Kurdish populated areas, the consequences of which threaten international peace and security in the region; 2. DEMANDS that Iraq, as a contribution to removing the threat to international peace and security in the region, immediately end this repression and expressing the hope in the same context that an open dialogue will take place to ensure that the human and political rights of all Iraqi citizens are respected; 3. INSISTS that Iraq allow immediate access by international humanitarian organisations to all those in need of assistance in all parts of Iraq and to make available all necessary facilities for their operations; 4. REQUESTS the Secretary-General to pursue his humanitarian efforts in Iraq and to report forthwith, if appropriate on the basis of a further mission to the region, on the plight of the Iraqi civilian population, and in particular the Kurdish population, suffering from the repression in all its forms inflicted by the Iraqi authorities; 5. REQUESTS FURTHER the Secretary-General to use all the resources at his disposal, including those of the relevant United Nations agencies, to address urgently the critical needs of the refugees and displaced Iraqi population; 6. APPEALS to all member states and to all humanitarian organisations to contribute to these humanitarian relief efforts; 7. DEMANDS that Iraq cooperate with the Secretary-General to these ends; 8. DECIDES to remain seized of the matter. (end text) 7653 !GCAT !GDIP By hinting at military action in response to Iraq's offensive against Kurds in its northern provinces, the Clinton administration is basing a potential use of force on murky international legal grounds. The United States for several years has invoked U.N. Security Council Resolution 688, which in April 1991 condemned the Iraqi government's repression of minorities, as an underpinning for creating no-fly zones in the north and the southern parts of the country. U.S. officials argue now that Arbil, a stronghold of one Kurdish faction overrun by Iraqi ground forces on Saturday, violates that resolution. But Resolution 688, while encouraging widespread relief aid to the Kurds by international organisations after the Gulf War, did not specifically set up a safe haven off limits to Iraqi troops. It also deliberately excluded military force. China had threatened to veto any measure that would justify foreign military intervention during the debate on the resolution which France's late president, Francois Mitterrand, insisted the council adopt. In subsequent years, the United States and its allies kept their dealings with Iraq on the no-fly zones away from the Security Council, thereby giving credence to those who maintained the West was stretching the interpretation of Resolution 688. But at the same time, most council members turned a blind eye to exclusionary zones, with many states believing that allied protection was necessary to prevent a humanitarian catastrophe that followed the Gulf War, which the U.N. authorised. The then-Soviet Union supported the zones. "It's a measure of Iraq's isolation and unpopularity that states are treating this as an exceptional case," one senior envoy said at the time. Nevertheless, the United States will have difficulties in crafting any kind of Security Council statement that might approve military action or obliquely lend credence to it. U.S. officials have been consulting privately with key council members all weekend. According to one council envoy, the legal mandate for council consideration is "one of the questions under discussion, depending on what the United States decides to do." Resolution 688 was adopted when Kurds in the north and Shi'ites in the south rose up against Saddam Hussein's government in the spring of 1991 after the Gulf War. The Kurds fled to Turkey and Iran, pursued by Iraqi troops and strafed from the air, prompting a worldwide outcry. Shortly afterwards the allies as well as U.N. humanitarian groups moved in to provide shelter for the Kurds and Iraq was warned not to fly any aircraft over the area. In the summer of 1992, the allies cited the same resolution when they banned Iraq from flying over the southern marshes where Shi'ite rebels were hiding. But even in early 1993 when President Bill Clinton launched a raid on Iraqi missile batteries in the south, the council made sure its statements ignored the bombing. Iraq, however, has frequently pointed out the legal difficulties and did so again over the weekend. "The no-fly zone north of 36th parallel and the use of Hammer Force (Operation Provide Comfort) using Turkish bases is rather a unilateral decision by the United States, Britain and France and not part of a resolution issued by the U.N. Security Council," said Saad Qassim Hammoudi, head of the ruling Baath Party's Foreign Relations Office. Iraqi troops, backed by armour and artillery, intervened on Saturday on the side of Massoud Barzani, leader of the Kurdistan Democratic Party (KDP), to recapture the Kurdish stronghold of Arbil from Jalal Talabani of the Patriotic Union of Kurdistan (PUK), who is favoured by Iran. The Kurds now number more than 25 million and are spread across the common border of Turkey, Iraq and Iran. In addition to Iraq, which used poison gas against Kurds in 1988, Turkey and Iran have conducted military campaigns against them within their respective territories. 7654 !GCAT The following are the main stories from Saturday morning's German newspapers: FRANKFURTER ALLGEMEINE ZEITUNG - Kohl and Chirac plan for 21st century Europe, warn against new unilateralism - Economics ministry says arms export rules do not need tightening despite illegal shipments to Libya - Health Minister Seehofer wants health insurance contributions frozen - Cartel office reviews Lufthansa ticket prices - High earners to be checked more closely by tax authorities HANDELSBLATT - Veba and Ruhrgas to cooperate on telecommunications network - Handelsblatt September leading indicator rises - Finance Minister Waigel wants top marginal tax rate to be below 40 percent - EU says compromise still possible on row over Saxony's subsidies to VW, gives Bonn until September 4 - Retailers not enthusiastic about longer opening hours but opposed to restricting their own use of new rules - Cartel office reviews Lufthansa ticket prices on domestic flights SUEDDEUTSCHE ZEITUNG - Moscow to intensify talks on eastward extension of NATO - Defence Minister Ruehe can imagine German armoured infantry in Bosnia mission - Agriculture Minister Borchert insists reform process is under way - Bundesbank board member Jochimsen says one percent growth is possible in 1996 - Santer doubtful that German contribution to EU budget will be lower after 1999 DIE WELT - EU Commissioner gives Bonn until Wednesday to make move on VW subsidy row - Christian Democrats urged opposition SPD and Greens to reject cooperation with reform communists - 210,000 visit home electronics trade fair - Waigel wants to cut top tax rate to 40 percent - Every third VW coming off production line has defects -- Bonn Newsroom +49 228 2609760 7655 !GCAT Here are the highlights of stories in the Danish press on Monday. Reuters has not verified these stories and does not vouch for their accuracy. BERLINGSKE TIDENDE --- Danish prime minister Poul Nyrup Rasmussen says he supports the mounting of a rescue effort for troubled shipyard Danyard in northern Denmark. The loss-making shipyard, owned by J.Lauritzen group, is to close in 1998 unless there is a sharp change in market conditions. POLITIKEN --- Danish police are to train more experts to deal with international organised crime which is expected to escalate further in Denmark in future. --- Danish Rail (DSB) is to launch its first environmental plan for goods traffic, using more and longer electrically-powered trains to save on energy consumption. JYLLANDS POSTEN --- New education ministry figures indicate that four out of ten Danish students drop out of studies despite major efforts to encourage new students to complete their courses. BORSEN --- Danish tax minister Carsten Koch considers the latest flurry of international firms leaving Denmark to set up plants in Ireland instead on advantageous low-tax terms as a major problem. Koch says he will discuss the issue with the European Union internal market commissioner with the aim of getting Ireland's special low 10 percent corporate tax abolished. DET FRI AKTUELT --- Several local authorities in Denmark threaten now to increase local taxes in breach of their agreement with the Danish central government following prime minister Poul Nyrup Rasmussen's criticism of the way local authorities run hospitals. 7656 !GCAT !GENT Dublin-born director Neil Jordan said he never lost more sleep over a film than over "Michael Collins", his controversial epic about the IRA which had its premiere on Saturday at the Venice Film Festival. The film, starring Liam Neeson and Julia Roberts, recounts the life of Michael Collins, the Irish Republican Army's Director of Intelligence who fought for Irish independence from 1919 to 1921. Although not due for release in Britain and Ireland until early next year, some politicians have already said they feared it would fan sectarian tensions in British-ruled Northern Ireland. Jordan defends his decision to make the film, whose screenplay he wrote himself after years of research, saying it was "more about history than any political statement". "The film spares neither the Irish nor the British in its depiction of the savagery of the time," Jordan said in a statement released by Warner Bros. "How often has independence been achieved without bloodshed? Very rarely." Jordan, whose 1992 film "The Crying Game" also came under fire for what was perceived as a sympathetic portrayal of the IRA, said Collins was more than just a revolutionary. "He developed techniques of guerilla warfare later copied by independence movements around the world, from Mao Tse-Tung in China to Yitzak Shamir in Israel," Jordan said. "Collins would never be a proponent of contemporary terrorism as practised today. He was a soldier and a statesman and, over time, a man of peace." Leeson, the Northern Ireland-born actor who was nominated for an Oscar for best actor for his performance in "Schindler's List", plays the lead role in Jordan's film. Aidan Quinn portrays Harry Boland, Collins' best friend, and rival for the love of Kitty Kiernan, played by Roberts. Much of the film was shot on location in Dublin with Jordan using thousands of its citizens as unpaid extras. A set, however, was used for the fighting scenes. Noting that information about Collins was "as mysterious as the existence he maintained", Jordan said he made some historical assumptions in the film. "I have made choices about certain events based on my own extensive research into his letters and reported speeches," he said. "I wanted to make this a story as accurate as possible without killing it dramatically and I think I have. It is a very true film." One of the assumptions is his interpretation of the murky circumstances surrounding the shooting death of Collins, who had broken with his comrades when he sought a negotiated settlement with Britain, in an ambush in 1922. "I have never lost more sleep over the making of a film than I have over 'Michael Collins', but I'll never make a more important one," Jordan said. "In the life of one person you can tell the events that formed the north and south of Ireland as they are today." 7657 !GCAT These are leading stories in this morning's Paris newspapers. -- President Jacques Chirac and German Chancellor Helmut Kohl reaffirm their determination to meet the criteria of the Maastricht treaty and enter a European single currency on schedule in 1999. -- Nuclear power plant builder Framatome to be merged with GEC Alsthom in an 80 billion franc turnover unit controlled by Alcatel Alsthom and General Electric Co Plc. LES ECHOS -- Prime Minister Alain Juppe to tackle tax cuts worth 20 billion francs promised for 1997. -- Credit Foncier de France posts a 400 million franc profit for the first half of 1996, after a 10.8 billion franc loss for full year 1995. LA TRIBUNE DESFOSSES -- GEC Alsthom shipyard unit Chantiers de L'Atlantique wins a 2.5 billion franc order for two cruise ships from U.S. Renaissance Cruise. LE FIGARO-ECONOMIE -- New car registrations rose 23 percent in August, boosted by a government incentive measure favouring buyers of new cars. LIBERATION (Economic section) -- Aerospatiale expects to return to profit in 1996, a year earlier than forecast. -- Paris Newsroom +33 1 4221 5381 7658 !E12 !ECAT !G15 !G151 !G153 !G154 !GCAT !GDIP German Chancellor Helmut Kohl and French President Jacques Chirac on Sunday reaffirmed their joint support for a European Union single currency as planned in 1999 and said the EU's farmers needed help now. The two men, meeting at Kohl's bungalow next to the Bonn chancellery, said there was no reason to consider wavering from the Maastricht Treaty's strict criteria despite what the German leader called some "light and shadows" in their economies. They gave no hint of what the EU could do for farmers, especially in the cattle sector where sales have been hit badly by "mad cow" disease in Britain, but said European agriculture ministers meeting in mid-September would address the problem. "We are both determined to meet the criteria of the Maastricht treaty without delay," Kohl said before they began dinner. "It is our common goal and we will reach it together." Chirac, standing at his side, told reporters: "The Germans and the French will be at the same rendezvous at the same time and under the same conditions." Financial markets have become increasingly worried that France, plagued by a stagnant economy and record unemployment, may be falling behind in its attempts to cut public spending. Equally worrying for the French government are signs that the autumn of discontent which last year undermined its attempts to slash the welfare budget could be repeated. Bonn faces a struggle of its own to get its budget deficit inside the limits required to qualify for monetary union (EMU) in 1999, but has so far been more effective than Paris in pushing through welfare cuts against massive union opposition. Both Kohl and Chirac played down recent pressure on the French franc and said currency market fears were unfounded. Both men also emphasised that the the next meeting of EU agriculture ministers on September 16 must address the growing problems that European farmers faced. "We shared the same view about the worries of the farmers, especially the cattle growers," Chirac said. "We are determined to work together to confront these worries. Chirac also said the EU must find a way to ensure that countries which did not join monetary union in 1999 did not engage in competitive devaluations against the first states to take part in the single currency, the Euro. "It is unacceptable to have a devaluation by those who have not joined," he said. "That would cause grave damage to the European economy." Germany and France shared the view that there would have to be an agreement within the European Union between the so-called "ins" and "outs" to prevent this, Chirac said. Experts working on this issue were making good progress, he added. Kohl said foreign policy issues such as the Middle East, Bosnia and Chechnya would be discussed during the dinner and there were no plans to make a statement afterward. Chirac was due to fly back to Paris late on Sunday. "We both want the shooting and the war in Chechnya to end as soon as possible so what Boris Yeltsin said before the election can come about," he said. Asked if the Franco-German army brigade, a joint project that has never been sent abroad, could be deployed in Bosnia after the current United Nations peacekeeping mandate runs out, Kohl said: "We will find a common line and I do not exclude anything." REUTER 7659 !C13 !CCAT !G15 !G152 !GCAT EU member states are finally moving towards agreeing legislation on licensing satellite personal communications systems now that the text has been watered down to dilute the European Commission's role, Commission officials said. The Telecommunications Council may be able to adopt a common position on the draft decision, COM(95)529, at its September 27 meeting, they said. The Council has up to now rejected the Commission's efforts to set up a single EU system for licensing the new satellite networks that will be able to offer telephone and data-transmission services via satellite. Most member states objected specifically to provisions that would authorise the Commission to draw up criteria for licensing operators for the European market and play a major role in selecting the operators. But a Council working group has made some progress on a compromise text that was drafted by the Italian presidency and taken up by the Irish presidency, officials said. That text calls on member states to coordinate licensing activities within the European Conference for Postal and Telecommunications Administrations (CEPT), with the EU taking decisions only if CEPT does not act within certain deadlines, one official said. The question would then be taken up by an ad hoc committee of member state representatives, chaired by the Commission, he said. Member states, who are set to discuss the text again in a working group that meets September 10, are still debating exactly what procedures should be followed in such cases, he said. Italy's text gave the committee a very "proactive" role, but some member states think it should act only after the EU first discusses the question with CEPT, he added. Under the compromise text, the work of the ad hoc committee would be taken over by the licensing committee that will be set up under the separate draft directive setting out a general framework for telecommunications licensing procedures, COM(95)545. 7660 !GCAT The following are the main stories from Monday morning's Austrian newspapers. DER STANDARD - Chancellor Franz Vranitzky, after meeting Prime Minister Benjamin Netanyahu during a two-day official visit to Israel, says he is optimistic about the peace prospects for the Middle East. - Vice Chancellor Wolfgang Schuessel demands tougher sentences for convicted child sex abusers. - Gustav Raab, head of the Austrian banking association, says banks will have to downsize and improve customer service to remain competitive in Austria's overcrowded financial sector. - Car maker Steyr-Daimler-Puch Fahrzeugtechnik to increase output of Chrysler Jeeps to 52,000 in 1997 from 39,000 this year, expects turnover to rise 500 million schillings to 4.7 billion schillings. KURIER - Consortium of bidders for Creditanstalt met in London over the weekend amid growing controversy over the proposed holding company's structure. Results of meeting to be presented to Finance Minister Viktor Klima today. - EA-Generali units Erste Allgemeine Versicherungs AG and Generali Allgemeine Lebensversicherung say premium income increased in the first half of the year. - Austrian exports to the U.S. have risen to 10.9 billion schillings in the first half of the year from 9.6 billion last year, says U.S. Department of Trade. Austria's trade surplus with the U.S. stood at 834 million schillings. - Analysts say turnover on the Vienna bourse will remain slow, ATX index seen locked in between 1,020 and 1,040 points this week. DIE PRESSE - Brick maker Wienerberger's operative unit Ziegelindustrie expands number of seats on its executive board to five after recent merger with Belgium's Terca Bricks. - Bank Austria and industrialist Herbert Liaunig to present joint bid for aluminum maker Amag, currently owned by state holding OeIAG. 7661 !GCAT Following are the highlights of stories reported in the Irish press on Monday. IRISH TIMES - Coca-Cola completed a 4 million Irish pound investment in warehousing in its plant in Dublin. - Two 13-year-old boys who damaged the roof of a detention centre in County Wicklow during a six-hour protest on Sunday appeared in court on Monday morning. - More than 80,000 primary and secondary students returned to school on Monday to the threat of possible industrial action by teachers' unions. - The 70 million pound Irish cider market will be the subject of a dispute in the Irish High Court next month when Tipperary drinks company Showerings and British competitor Symonds do battle over the right to use the trademark "scrumpy". IRISH INDEPENDENT - The home of the parents of renegade loyalist Alex Kerr, who faces death threats from Protestant guerillas along with his friend Billy Wright, was attacked with an explosive device on Sunday night. - Irish department store chain Dunnes Stores was set to have 70 of its outlets picketed on Monday as unions and management failed to agree over the weekend on a staff pay rise. - The climax of the All Ireland Hurling Series took place on Sunday when County Wexford defeated County Limerick by two points in the final in Croke Park, Dublin. - English language schools in Dublin will display their facilities to around 50 agents from 17 countries in a bid to boost a business estimated to be worth 150 million Irish pounds a year to the Irish economy. -- Dublin Newsroom +353 1 660 3377 7662 !GCAT The following are some of the top headlines in leading Italian newspapers. ---------- TOP POLITICAL STORIES * Umberto Bossi, leader of seperatist party the Northern League, announces September 15 as election day for his northern government. (All). ---------- TOP BUSINESS STORIES. * French/German summit says monetary union criteria will not change and must begin in 1999. (All). * Inflation continues to slow down, even through summer months. (Corriere). * The market awaits incentives from stock exchange. (La Repubblica). * Financial cut backs in the 1997 budget means prices of train tickets do not cover railway costs. (La Repubblica). ---------- Reuters has not verified these stories and can not vouch for their accuracy. -- Rome bureau ++396 6782501 7663 !C21 !CCAT !GCAT !GENT Sex, soap operas and game shows have lost their lustre for ratings-hungry German television stations as broadcasters seek to build audiences with hard-hitting news rather than titillation. Responding to growing demand for fast and accurate information, nearly all nationwide broadcasting stations have expanded their news coverage or plan to do so soon. The new approach is replacing the widespread assumption only a few years ago that Germany's audience of 80 million would only tune in for light entertainment. Even the "Tagesschau", the public ARD network's stodgy 8 p.m. broadcast considered the benchmark for serious TV news in Germany, is undergoing its first major facelift in four decades in response to the new interest in the news. The stone-faced newscasters, many of whom are stars after 20 or more years on screen, will still read some reports from sheets of paper, a quaint touch Germans say gives the 15-minute show more credibility. But the programme, which a critic once said would enjoy high ratings even if it were broadcast in Latin, will expand and adopt a slightly flashier appearance for the record-setting 8.5 million viewers it draws every evening. "We are looking into the biggest redesign the Tagesschau has seen in 40 years, including a new studio and introducing new and improved graphic elements in early 1997," said editor-in-chief Ulrich Deppendorf. Deppendorf will jazz up news presentation in a 15-minute early edition of Tagesschau at 5 p.m. starting in January, replacing announcers with journalists reporting on camera. While other stations spend millions of marks for their upgrades, ARD's investment in a new look seems cheap at 1.5 million marks ($1 million) in the high-stakes TV world where often talk shows command a similar price -- per show. Tagesschau should not stray too far from its decades-old concept, competitors say. They consider it the prototype for news Germans wants to see -- and like to watch it themselves. "The dry Tagesschau got engraved in our minds for 40 years. No German has accepted "infotainment' as serious news since," says Karl-Ulrich Kuhlo, founder of n-tv, a news station majority owned by Cable News Network (CNN) of Turner Broadcasting. Aimed at professionals, n-tv will expand its news coverage in place of featured programmes from October this year. From 6 to 9 a.m., viewers will see an hour-long mix of world and business news on a rotating basis with continuous updates in place of programmes like health magazines, Kuhlo said. Germany's other private TV stations -- which in their early days established small news operations only to interrupt a steady mix of shows, movies and commercials flooding the country's living rooms -- are gearing up considerably as well. Pro 7, which in 1997 becomes the first German station to raise capital by way of a public share issue, now employs about 120 people in its newsroom and has opened several news bureaux. "Five years ago, it was a handful," said news editor Claudia Merkle. A new studio, a new design and expanded news coverage introduced at the beginning of this year is beginning to pay off. A daily average of one million viewers zapped to Pro 7's news in July, after a low of 800,000 earlier this year. More news programmes in the afternoon and late at night are under consideration, Merkle said. Sat 1, once a station devoted to replaying family-oriented series and talk shows, veils its news projects in secrecy. A spokeswoman declined to comment before a news conference next month to present new programming highlights. The biggest news impact at Sat 1 might come from Bild-TV, a screen version of Germany's mass-circulation Bild daily better known for spectacular headlines than facts-only reporting. "But we have one problem. We don't know their concept and which persons will do it," the spokeswoman said. VOX, one of the first stations to attempt producing a full programme like the public stations, recently introduced live newsbreaks for events like the Olympics park bomb attack. But the station was only a distant runner-up to Germany's biggest private TV station, RTL, in broadcasting news several hours after the tragedy. Satisfied with its current news programme, VOX increasingly supplements its daily news with broadcasts done by a team from the weekly magazine Der Spiegel, said director Andrej Henkler. Market-leader RTL has leapt into the information age, dropping the late-night bare-breasts show Tutti Frutti and introducing early morning news over the years. Its latest move led to live coverage of breaking news and follow-ups every two hours but it has no plans to copy other news stations further. "We are a mass broadcaster and reach 21 to 25 percent of 14 to 49-year-olds with our news," said editor-in-chief Hans Mahr. "We are number one (in terms of viewers) at any time of the day," he claimed. RTL is not resting on its laurels. Autumn could bring news about news on RTL, said Mahr: "It will certainly not be a programme aimed at small groups. We only do mass programmes. Our viewers are not interested in political discussions." $1=1.4793 Mark) 7664 !CCAT !ECAT !GCAT Wanted: Eccentrics, risk-takers and free-thinkers for challenging posts at Japan Inc to dream up new business for the 21st century. Japanese companies are complaining loudly that the creative individuals needed to cook up corporate success are in short supply, and are pointing the finger of blame at an education system still geared to producing the uniform human cogs that Japan's catch-up economy needed in the post-war decades. "Until now, Japan learned from the United States and Europe and strove to catch up, and for that it was thought sufficient to have average sort of people," said Kazuhide Ito, manager of business lobby Keidanren's human resources development group. "Now we need front-runners who can take the lead...so we need a flexible education system in which children can think for themselves and learn to take responsibility," Ito said. The corporate complaints, along with proposals for reform of the education system and companies' own personnel practices, were summed up in a recent Keidanren position paper. "The economic system that sustained the nation's development until now...has come to a complete dead end," the paper said. " ....Japan will need a creative work force to work vigorously in all fields of society, so the development of "creative human resources' is a matter of great urgency." ECONOMIST AGREE EDUCATION SYSTEM NEEDS MAJOR OVERHAUL Many economists and other experts agree that the education system which cultivated the model workers who served Japan Inc well for the past 40 years is in need of a major overhaul. Foremost among the targets is the system's emphasis on forcing students to memorise masses of information and regurgitate it in fiercely competitive entrance exams, success in which opens the door to top-ranked universities and guarantees jobs at leading firms or elite government agencies. Also under fire is the overwhelming sameness of Japan's classrooms in which deviation, whether by slow learners or the gifted, tends to get short shrift. "The old rule in education was that people have to be the same and no deviation should be allowed, because we needed cyborgs, robotic-type people, to follow the United States," said Haruo Shimada, an economist at Keio University. "That worked well for the last 30 years...but now what we need to do is create something entirely new, and the question is -- who can do it?" Shimada said. "Teaching kids to be the same was good for bringing the average level higher, but now many hypothesise that we might have destroyed brains that were deviating in an upward direction." Ironically, many experts say the education system's worst ills are in fact the result of blue-chip corporations' own penchant for grabbing graduates of top-ranked universities with no attempt to assess ability by other means. INDUSTRY TO BLAME FOR EDUCATION STAGNATION, EXPERTS BELIEVE "Industry has actually messed up the the education system by getting a massive amount of people from top universities produced according to the old paradigm," said Kenichi Ohmae, a former director in Japan of consultant firm McKinsey & Co, who who has written a book on Japan's education woes. "They should have shifted their source of intake a long time ago...this is overdue by probably more than two decades." Other critics agree. "The companies that belong to Keidanren are saying they want creative people, but they are the same ones hiring top university graduates," said Takanori Matsuura, acting dean at Tama University's School of Management and Information Services. "The whole system of evaluating people in post-war Japan has been one which evaluated the "container' -- such as the university one graduated from or the corporation where one worked -- rather than individual capabilities. "One reason companies are calling for reform is that they have been singled out as a cause of the problem," he added. The corporate lament over education coincides with other efforts to address deficiencies of a system plagued by bullying of those who somehow stand out, children's refusal to attend classes, and disturbing signs of teenage prostitution. In July a government advisory panel, the Central Council for Education, issued an interim report urging the paring down of Japan's school week from six days to five and the introduction of other changes aimed at giving children more scope for individual growth. A separate panel is gearing up to consider the first major curriculum reform for a decade. "There is a general effort to come to grips with where the education system would be improved or enhanced to encourage creativity and individual expression," said Samuel Shepherd, executive director of the Japan-United States Educational Commission, which administers the Fulbright Program. "There is a feeling of trying to create education with some space, some room for growth," said Shepherd, who is a member of the panel's subcommittee on foreign languages. That said, experts say reform is likely to come slowly -- if at all. "I don't think there is a recognition of the nature of the problem and the speed at which reform has to take place," Ohmae said. "Kids are setting up their own agendas and revolting." Recommendations by a blue-ribbon advisory panel to then prime minister Yasuhiro Nakasone in 1987 for education reforms that would cultivate more creative and individualistic students largely came to nothing, some experts said. "It all ended as talk," Matsuura said. "They fiddle at the edges without attacking the fundamentals." FIRMS RELUCTANT TO PAY FOR CHANGES Although Keidanren has urged companies to alter the standards they use to evaluate whom to hire, actually doing so would involve costs many firms are reluctant to bear. "It is difficult for companies to determine what type of people are actually creative," Ito said. "Given limits on what can be spent for recruitment, it is easier to use graduation from "brand name' universities for initial screening." Behind the pessimistic predictions, experts say, is a general belief that a system which produces high rates of literacy, sends some 40 percent of high school graduates to college and emphasises that teamwork over individualism is actually not so bad. Some also fear that change could easily go too far. "The implications of moving radically in the direction of individual expression are enormous, and I'm not sure how far people, even on the (Central Education) Council, let alone at the Ministry of Education or among the people at large, are prepared to accept radical change," Shepherd said. Working out how to create creativity is anyway a tough challenge, though experts reject the stereotypical notion that Japanese are culturally incapable of innovation. "It has almost nothing to do with Japanese culture," Shimada said. "The 1950s, '60s and '70s were a unique period in Japanese development. It was a period when a robotic-type work force...created a tremendous success story in catching up with front runners," Shimada said. "That great success actually destroyed Japanese creativity, but if the incentive structure is redesigned, there can be change." 7665 !GCAT !GDIP !GVIO The United States pounded Iraq with 27 cruise missiles on Tuesday in retaliation for its capture of a rebel Kurdish city but an unbowed Iraqi President Saddam Hussein vowed to fight back. Washington, receiving a mixed international response, portrayed its reprisal for Saddam's weekend attack on the northern Iraq city of Arbil as a deterrent to Iraqi aggression against its neighbours. U.S. President Bill Clinton said a U.N. plan for Iraq to sell oil to buy food and medicine could not proceed at present and announced the expansion of a no-fly zone for Iraqi aircraft in southern Iraq to the outskirts of the Iraqi capital. "This will deny Saddam control of Iraqi air space from the Kuwaiti border to the southern suburbs of Baghdad," Clinton said in a statement from the White House. "It significantly restricts Iraq's ability to conduct offensive operations." Saddam, in a speech soon after the attacks that Iraq said killed five people and wounded 19, urged his air force to attack U.S. and allied planes policing the Western-imposed air exclusion zones in the south and north of his country. "You men of our air defence and falcons of the skies, consider from now their damned imaginary lines north of the 36th parallel and south of the 32nd parallel non-existent," said Saddam, appearing on television in his field marshall's uniform. "Hit back with capability and efficiency, relying on God, the Almighty, at any hostile plane the aggressors fly to violate the airspace of your great country throughout Iraq from now and in future." The U.S. attack sent oil prices soaring to post-Gulf War highs but by late on Tuesday had settled back, nearly unchanged on the day as traders saw little effect for markets beyond the continued absence of Iraqi oil. Iraq has not been allowed to export since invading Kuwait six years ago. But in Iraq, the attack and fading prospect of oil exports sent the dinar plummetting to 1,750 from 1,250 dinars to the dollar before recovering to 1,500. The state Iraqi News Agency said Iraqis took to the streets to denounce the U.S. strikes. "We must make it clear that reckless acts have consequences or those acts will increase," Clinton said. " ... Our objectives are limited but clear: to make Saddam pay a price for the latest act of brutality, reducing his ability to threaten his neighbours and America's interests." U.S. Defence Secretary William Perry said Iraq's action in driving one Kurdish faction from Arbil and installing its Kurdish allies posed a "clear and present danger" to neighbouring countries and the flow of oil. He said the United States reserved the right to take further action. The United States said its attacks were "effective" but did not have a final assessment. Washington denied Iraqi claims it had destroyed many of the approaching cruise missiles. In the north of Iraq, aid workers headed north from Arbil toward the Turkish border in the wake of the Iraqi attack and the U.S. reprisal. The White House had said there was evidence that some Iraqi forces were "penetrating deeper" into northern Iraq and threatened Sulaimaniya, administrative capital of the Kurdish opposition. But Iraq's Deputy Prime Minister Tareq Aziz said after Saddam spoke that Baghdad would complete a withdrawal from the Kurdish north on Tuesday and denied reports Iraq was massing forces close to Sulaimaniya. The White House believes Saddam sent three tank divisions composed of 30,000-40,000 elite Republican Guards into northern Iraq to help the Kurdistan Democratic Party (KPD), involved in a bloody power struggle with another Kurdish group with links to Iran, the Patriotic Union of Kurdistan (PUK). The U.S. attack was one of the largest on Iraq since the end of the Gulf War, when a U.S.-led coalition drove Iraq from Kuwait in 1991. B-52 bombers and American warships in the Gulf unleashed the 27 cruise missiles at about 15 targets identified as air defence radars, missile sites and command and communication centres near several areas in southern Iraq. Washington says U.N. Security Council resolutions approved after the Gulf War provide the legal basis for its attack but Aziz said the action violated international law. The international reaction also showed uncertainty over the legality, a contrast to the near universal backing Washington gained when Saddam invaded Kuwait in 1990. While German and Britain endorsed the U.S. action, France was silent and Russia called it "inappropriate and unacceptable." Countries of the region, even traditional enemies of Saddam, expressed deep unease. 7666 !GCAT !GDIP !GVIO Canada voiced support for the U.S. cruise missile attack on Iraq on Tuesday, and said Iraqi President Saddam Hussein may only understand force. "An intervention of this nature was necessary to avert a larger human tragedy in northern Iraq," Prime Minister Jean Chretien said in a statement. "I think we knew the history and background of Saddam Hussein. I think his interest in provocation and these kinds of transgressions are both prevalent and almost Pavlovian," Foreign Minister Lloyd Axworthy told a news conference. "Perhaps the only thing he understands is when you provide the kind of forceful reaction so you can draw a line where he has to stand, and we hope that he will get the message," he said. Chretien said: "Saddam Hussein has cynically used local Kurdish groups to move his forces into the no-fly zone, and launch a massive attack on Arbil. "The use of cruise missiles against military targets constitutes a measured and clear response to Iraqi military actions, while ensuring to the extent possible the safety of civilian populations in Iraq." Canadian forces took part in Desert Storm, the 1991 operation that drove Saddam out of Kuwait. Chretien called on Saddam to "withdraw his troops immediately and completely from the Kurdish regions in the north, and to end his oppression of the civilian Iraqi population, especially in the northern region." Axworthy said two private Canadian trade missions were hastily leaving Iraq and Canada was complying with U.N. Secretary-General Boutros Boutros-Ghali's suspension of plans to implement an oil-for-food deal for Iraq. Asked whether Canadian troops might be drawn into the conflict, he said the question was hypothetical and he hoped the action taken so far would be enough to deter Saddam. 7667 !GCAT !GDIP !GVIO The Arab world's reaction to U.S. cruise missile attacks on Iraq on Tuesday was mixed, with some countries saying the strikes violated Iraq's sovereignty and raised tension in the Middle East. Kuwait approved the bombing but most Gulf Arab states, including Washington's biggest regional ally Saudi Arabia, did not react officially hours after U.S navy ships and B-52 bombers fired 27 missiles at targets in southern Iraq in response to Iraqi attacks on Kurds in the north. Egypt and Jordan were concerned the action could spawn further violence, while Syria and Libya condemned the attacks, one of the biggest military strikes by the United States on Iraq since the 1991 Gulf war. "The bombing of targets in Iraq this morning constitutes a threat to the unity of Iraq and its regional safety and increases the suffering of the Iraqi people," a Syrian foreign ministry spokesman said. "It contradicts the United Nations charter and international laws which protect the unity and sovereignty of countries and reject the interference in internal affairs." The official Libyan news agency JANA quoted (Pan-Arab) Unity Affairs Jomaa al-Fezzani as saying: "The American aggression against Iraq constitutes an infringement to an Arab country's sovereignty and an interference in its internal affairs." An Iraqi army spokesman said five people were killed and 19 wounded - including civilians - in the U.S. missile strike. U.S. Defence Secretary William Perry said Iraq's military actions posed a "clear and present danger" to the region. Kuwait, Iraq's small southern neighbour occupied by Baghdad in 1990-91, expressed "full understanding" for the attack, the official news agency KUNA said. "Kuwait reaffirms the necessity north Iraq, in southern Iraq for that matter, will further aggravate the situation." Jordanian Information Minister Marwan Muasher told reporters: "Jordan is following with concern the latest escalation in the situation and the military operations which might return Iraq to the cycle of violence and counter-violence." Jordan's Islamist-led opposition deputies, in a show of solidarity, met the Iraqi envoy to denounce the U.S. attack. Palestinian officials condemned the attack as unjustified and said Iraq was entitled to protect its borders. Two radical Palestinian groups accused Washington of playing the role of an international policeman. 7668 !GCAT !GVIO The United States on Tuesday launched the biggest military strike against Iraq since the Gulf War, firing 27 cruise missiles at air defence targets in retaliation for Iraqi attacks on Kurds in northern Iraq. Iraqi President Saddam Hussein responded in a defiant speech by urging his air force and anti-aircraft gunners to attack U.S. and allied planes policing Western-imposed air exclusion zones in the south and north of his country. "You men of our air defence, consider their damned imaginary lines north of the 36th parallel and south of the 32nd parallel non-existent and hit back with capability and efficiency, depending on the Almighty, (at) any hostile plane violating the airspace of your country now and in future," Saddam said on television and radio. He told his forces to give "a new lesson in the meanings which they (Americans) with their empty...souls do not carry". Saddam said God "humiliated the aggression and the aggressors" and Iraqi losses were minimal. "The sons of Iraq were on their guard for the aggressors, downing a great number of their missiles," he said, without specifying how many. Shortly after Saddam spoke, Iraq's Deputy Prime Minister Tareq Aziz said Baghdad would complete a troop withdrawal from the Kurdish north on Tuesday and denied reports that Iraq was massing forces close to the town of Sulaimaniya. The Defence Department in Washington said the U.S. raids were launched on orders from President Bill Clinton. U.S. defence officials said the unmanned, highly accurate missiles were fired from B-52 bombers and American warships in the Gulf at air defence command and control military targets in and around Baghdad. A Pentagon statement said: "At the direction of the president, the Department of Defence has launched cruise missiles to attack selected air defence targets in Iraq. No further details are available at this time. "The president plans to make a formal statement on this operation at approximately 8 a.m. (1200 GMT)," it added. In London, British Defence Secretary Michael Portillo told BBC radio: "The Americans have launched a number of military attacks against rural areas. They are purely military targets. They have been selected to minimise collateral damage, that is to say loss of civilian life. "The no-fly zone in southern Iraq will be extended to allow the allies operating there to have a greater opportunity to control more of Saddam's airspace and bring greater control over him." Raising the prospect of more strikes, Portillo told BBC television: "Of course that possibility does have to remain open." In 1993 Clinton launched a cruise missile attack on Iraq in response to its alleged plot to assassinate former president George Bush while Bush was visiting Kuwait that year. The 23 missiles destroyed an Iraqi intelligence headquarters in central Baghdad where U.S. officials said the plot had been hatched. Six civilians were killed. White House spokesman Mike McCurry told reporters earlier there was evidence that some of the Iraqi forces that overran the northern Iraqi city of Arbil during the weekend were "penetrating deeper" into northern Iraq and threatened Sulaimaniya, administrative capital of the Kurdish opposition. McCurry said there was also reason to believe that some Iraqi troops were involved in executions of leaders of an anti-Baghdad Kurdish faction in Arbil. The White House believes Saddam sent three tank divisions composed of 30,000-40,000 elite Republican Guard troops into northern Iraq to help the Kurdistan Democratic Party (KPD), involved in a bloody power struggle with another Kurdish group with links to Iran, the Patriotic Union of Kurdistan (PUK). It says U.N. Security Council resolutions approved after the 1991 Gulf War provide the legal basis for responding. Oil prices shot briefly to post-Gulf War highs of $23.50 a barrel early on Tuesday. Gold and the dollar rose and stocks and bonds fell, although price movements were not dramatic. On the diplomatic front, initial reaction was mixed. In Cairo, the Arab League condemned the attack as infringing the sovereignty of an Arab country. Russia's Interfax news agency quoted a foreign ministry source as saying that Moscow viewed the situation in the Gulf as "extremely dangerous". German Foreign Minister Klaus Kinkel said the attacks were an "appropriate and justified" response, but France withheld support for the U.S. move while urging Baghdad to withdraw from Kurdish areas. Japan said it supported the air raid as a way to ensure Iraqi compliance with U.N. resolutions ending the 1991 Gulf War. China called for restraint, saying "We hope all sides will not take action that could further aggravate the situation in that area." Clinton's political rival, Republican presidential nominee Bob Dole, said in a statement: "I trust that this development marks the beginning of decisive action by the United States to curtail the power of Saddam Hussein, and the end of his defiance of the international community and of his atrocities against the Kurdish minority in Iraq." PUK Kurdish leader Jalal Talabani welcomed the strikes but said they had so far failed to deter tank and artillery movements toward his rebel positions. An Iraqi opposition group also welcomed the U.S. action while expressing concern about possible civilian casualties. "We welcome any action to reverse Saddam Hussein's invasion of northern Iraq," a spokesman for the Iraqi National Congress told Reuters. "But we are concerned about civilian casualties. Saddam often puts military facilities in residential areas." Iraqis in Baghdad shrugged off news of the cruise missile attacks and life went on as normal. "Whatever America does it will be nothing in comparison to what it did in the war over Kuwait. Their sabre-rattling finds more of a hearing at home," said a taxi driver on his way to the northern city of Kirkuk. In Geneva, the United Nations refugee agency said it had set up an emergency task force to draw up contingency plans in case of a refugee exodus from Iraq. 7669 !GCAT !GDIP !GVIO The U.S. military on Tuesday fired 27 long-range cruise missiles against air defense and communications targets in southern Iraq in retaliation for Iraqi military attacks against Kurds. The Defense Department said that the unmanned missiles were fired from bombers and warships against "selected air defense targets in Iraq" on orders from President Bill Clinton. The results of the attack were not immediately known, but U.S. defense officials said 13 Tomahawk cruise missiles were fired by the U.S. Navy cruiser Shiloh and destroyer Laboon in the Persian Gulf. Another 14 AGM-86 air-to-ground missiles were fired from B-52 bombers off Iraq. In Baghdad, Iraqi television reported that Iraq's defiant President Saddam Hussein said damage from the strike was minimal and that many missiles were shot down. He urged Iraqi troops to resist and said his country would no longer recognize "no fly zones" policed by allied warplanes over northern and southern Iraq. U.S. defense officials said that no U.S. missiles were fired at military targets in and around Baghdad, although reports from the Iraqi capital said air raid sirens had blared there. Clinton administration officials warned on Monday that Saddam must be made to pay for ignoring U.S. warnings and launching weekend attacks against Kurds north of the 36th parallel in his country. No details or results of the raids were given in the Pentagon's brief formal announcement issued at 2 a.m. EDT (0600 GMT), which was about 10 a.m. in Baghdad. It said Clinton ordered the strikes and planned to make an announcement at the White House at about 8 a.m. EDT (1200 GMT). That was to be followed by a news conference by Defense Secretary William Perry. In Baghdad, residents said air raid sirens had blared in parts of the Iraqi capital on Tuesday but were not heard all over the city. Witnesses said anti-aircraft fire was launched from positions in Baghdad, but it was not immediately clear what the fire was aimed at. An Iraqi television channel run by Saddam's son, Uday, confirmed the U.S. strikes against Iraq. "At the direction of the president, the Department of Defense has launched cruise missiles to attack selected air defense targets in Iraq. No further details are available at this time," Tuesday's brief Pentagon announcement said. The $1.2 million ship-launched Tomahawk missiles can fly unmanned nearly 700 miles (1,120 km) and strike targets with high accuracy. In London, British Defense Secretary Michael Portillo told BBC Radio in an interview on Tuesday that no British planes were involved but that Britain provided logistical support for the attack. "The Americans have launched a number of military attacks against rural areas. They are purely military targets. They have been selected to minimize collateral damage, that is to say loss of civilian life," Portillo said. U.S. and allied fighter jets have been policing "no fly" zones north of the 36th parallel in northern Iraq and south of the 32nd parallel in southern Iraq to keep Saddam's forces from attacking Kurds in the North and Shiite Moslems in the south. But Portillo said in a CNN interview the Western allies were extending the no-fly zone over southern Iraq northward to within some 30 miles (48 km) of Baghdad to give allied warplanes more control over Saddam's forces in the south. Interfax news agency quoted a Russian Foreign Ministry source as saying on Tuesday that Moscow viewed the situation in the Gulf as "extremely dangerous" and warned it could move out of control after U.S. air strikes against Iraq. In Beijing, a Chinese Foreign Ministry spokesman urged the United States and Iraq to use restraint and not take action that could further aggravate conflict in Iraq. Republican presidential nominee Bob Dole said he hoped Clinton's missile strike against Iraq marked the start of decisive action to curtail Saddam's power. "I trust that this development marks the beginning of decisive action by the United States to curtail the power of Saddam Hussein, and the end of his defiance of the international community and of his atrocities against the Kurdish minority in Iraq," Dole said in a statement. The White House believes Saddam sent three tank divisions composed of 30,000-40,000 elite Republican Guard troops into northern Iraq over the weekend to help a Kurdish faction involved in a bloody power struggle with another Kurdish group with links to Iran. It says U.N. Security Council resolutions approved after a U.S.-led coalition defeated Iraq in the 1991 Gulf War provide the legal basis for responding to Saddam's actions. The State Department on Monday night urged all American citizens to leave Iraq, citing "soaring violence" in the north and Baghdad's "renewed campaign of repression." 7670 !GCAT !GCRIM The first criminal trial arising from the largest municipal bankruptcy in U.S. history neared an end on Tuesday as attorneys in Orange County presented their closing arguments. Former Orange County Budget Director Ronald Rubino, 44, was indicted by a county grand jury in December for allegedly aiding former county Treasurer Robert Citron in diverting funds from other government agencies for the county's benefit. Prosecution and defence attorneys were expected to complete their closing statements later on Tuesday. The jury could then begin its deliberations. Prosecutor Jan Nolan wrapped up the county's case, challenging the defence assertion that Rubino did not know about the alleged diversions. "You get the idea that this was no big secret," Nolan told the jury in Santa Ana, California. "They're skimming money ... and having meetings discussing how to do it. That's how cavalier things had become." Defence Attorney Rodney Perlman said prosecutors failed to prove their case and asserted his client never thought to second-guess Citron, whom Rubino admired and respected. "Ron Rubino was an employee of county government ... getting information from a man beyond reproach with immense personal integrity and great success. That's the context in which all this takes place," Perlman said. "The evidence shows that while this diversion was going on it was not in any way done with Rubino's knowledge," he said. "The government knows that and its evidence proves nothing." Rubino, who has denied any wrongdoing, faces up to nine years in prison if convicted on the felony counts. Rubino was one of several former and current county officials formally accused with wrongdoing in connection with the bankruptcy. He was the first to go on trial. Orange County filed for protection under Chapter 9 of the federal Bankruptcy Code on December 6, 1994 after sustaining investment losses of more than $1.6 billion. The county emerged from bankruptcy in June of this year. During the Rubino trial, which began in early August, the prosecution portrayed the former county budget director as an ambitious county employee who helped to divert millions of dollars away from unsuspecting cities and school districts. The defence presented Rubino as an honest and highly-respected public servant. In a surprising twist, Citron, who was expected to be a key witness against Rubino, testified during the trial that he never discussed with Rubino the alleged scheme to divert funds. Citron pleaded guilty in April 1995 to several felonies related to the county's financial crisis and is awaiting sentencing. 7671 !G15 !GCAT MONDAY, MAY 26 BRUSSELS (NEW ITEM) - Energy Council. TUESDAY, MAY 27 BRUSSELS (NEW ITEM) - Justice and Home Affairs Council (to May 28). WEDNESDAY, MAY 28 BRUSSELS (NEW ITEM) - European Parliament holds mini session (To May 29). THURSDAY, MAY 29 BRUSSELS (NEW ITEM) - Telecoms Council. MONDAY, JUNE 2 LUXEMBOURG (NEW ITEM) - General Affairs Council (To June 3). THURSDAY, JUNE 5 LUXEMBOURG (NEW ITEM) - Health Council. LUXEMBOURG (NEW ITEM) - Development Council. MONDAY, JUNE 9 LUXEMBOURG (NEW ITEM) - Farm Council (To June 10). LUXEMBOURG (NEW ITEM) - ECOFIN Council. STRASBOURG (NEW ITEM) - European Parliament holds plenary session (To June 13). THURSDAY, JUNE 12 LUXEMBOURG (NEW ITEM) - Social Affairs Council. MONDAY, JUNE 16 AMSTERDAM (NEW ITEM) - Dutch presidency hosts European Council of heads of state and government (To June 17). LUXEMBOURG (NEW ITEM) - Transport Council (To June 18). THURSDAY, JUNE 19 LUXEMBOURG (NEW ITEM) - Fisheries Council. MONDAY, JUNE 23 LUXEMBOURG (NEW ITEM) - Environment Council (To June 24). LUXEMBOURG (NEW ITEM) - (possibly) ECOFIN Council. WEDNESDAY, JUNE 25 BRUSSELS (NEW ITEM) - European Paliament holds mini session (To June 26). THURSDAY, JUNE 26 LUXEMBOURG (NEW ITEM) - Education Council. MONDAY, JUNE 30 LUXEMBOURG (NEW ITEM) - General Affairs Council. LUXEMBOURG (NEW ITEM) - Culture Council. - Dutch EU presidency ends. Luxembourg takes over to December 31, 1997. MONDAY, JULY 14 STRASBOURG (NEW ITEM) - European Parliament holds plenary session (to July 18). MONDAY, SEPTEMBER 15 STRASBOURG (NEW ITEM) - European Parliament holds plenary session (To September 19). WEDNESDAY, OCTOBER 1 BRUSSELS (NEW ITEM) - European Parliament holds mini session (To October 2). MONDAY, OCTOBER 20 STRASBOURG (NEW ITEM) - European Parliamnt holds plenary session (To October 24). WEDENESDAY, NOVEMBER 5 BRUSSELS (NEW ITEM) - European Parliament holds mini session (To November 6). MONDAY, NOVEMBER 17 STRASBOURG (NEW ITEM) - European Parliament holds plenary session (To November 21). WEDNESDAY, DECEMBER 3 BRUSSELS (NEW ITEM) - European Parliament holds mini session (To December 4). MONDAY, DECEMBER 15 STRASBOURG (NEW ITEM) - European Parliament holds plenary session (To December 19). If you have items for inclusion in the Reuter European Community diary, please contact: Telephone: Cynthia Simpson (322) 287 6851 Fax: (322) 230 5573 For technical queries regarding the service, please call (322) 287 6666 - - - - - - - - - - - - - - - - - - - - - - - EC Report (C)opyright Reuters Limited. 7672 !G15 !GCAT MONDAY, JANUARY 13 STRASBOURG (NEW ITEM) - European Parliament holds plenary session (To January 17). MONDAY, JANUARY 20 BRUSSELS (NEW ITEM) - General Affairs Council (To January 21). BRUSSELS (NEW ITEM) - Farm Council (To January 21). MONDAY, JANUARY 27 BRUSSELS (NEW ITEM) - (possibly) ECOFIN Council. WEDNESDAY, JANUARY 29 BRUSSELS (NEW ITEM) - European Parliament holds mini session (To January 30). FRIDAY, JANUARY 31 AMSTERDAM (NEW ITEM) - Informal Transport Council (To February 1). WEDNESDAY, FEBRUARY 5 NOORDWIJK, The Netherlands (NEW ITEM) - Informal Justice and Home Affairs Council (To February 6). FRIDAY, FEBRUARY 14 ROTTERDAM (NEW ITEM) - Informal Social Arfairs Council (To February 15). MONDAY, FEBRUARY 17 BRUSSELS (NEW ITEM) - ECOFIN Council. BRUSSELS (NEW ITEM) - Farm Council (To February 18). STRASBOURG (NEW ITEM) - European Parliament holds plenary session (To February 21). MONDAY, FEBRUARY 24 BRUSSELS (NEW ITEM) - General Affairs Council (To February 25). FRIDAY, FEBRUARY 28 AMSTERDAM (NEW ITEM) - Informal Development Council (To March 2). MONDAY, MARCH 3 BRUSSELS (NEW ITEM) - Environment Council (To March 4). ROTTERDAM (NEW ITEM) - Informal Education Council. THURSDAY, MARCH 6 BRUSSELS (NEW ITEM) - Telecoms Council. MONDAY, MARCH 10 BRUSSELS (NEW ITEM) - Internal Market Council. STRASBOURG (NEW ITEM) - European Parliament holds plenary session (To March 14). TUESDAY, MARCH 11 BRUSSELS (NEW ITEM) - Transport Council (To March 12). SATURDAY, MARCH 15 APELDOORN, The Netherland (NEW ITEM) - Informal General Affairs Council (To March 16). MONDAY, MARCH 17 BRUSSELS (NEW ITEM) - ECOFIN Council. BRUSSELS (NEW ITEM) - Farm Council (To March 19). TUESDAY, MARCH 18 BRUSSELS (NEW ITEM) - Justice and Home Affairs Council (To March 19). MONDAY, MARCH 24 BRUSSELS (NEW ITEM) - General Affairs Council (To March 25). FRIDAY, APRIL 4 NOORDWIJK, The Netherlands (NEW ITEM) - Informal ECOFIN Council (To April 6). MONDAY, APRIL 7 STRASBOURG (NEW ITEM) - European Parliament holds plenary session (To April 11). THURSDAY, APRIL 10 LUXEMBOURG (NEW ITEM) - Consumers Council. MONDAY, APRIL 14 LUXEMBOURG (NEW ITEM) - Fisheries Council (To April 15). THURSDAY, APRIL 17 LUXEMBOURG (NEW ITEM) - Social Affairs Council. FRIDAY, APRIL 18 AMSTERDAM (NEW ITEM) - Informal Environment Council (To April 20). MONDAY, APRIL 21 LUXEMBOURG (NEW ITEM) - Farm Council (To April 22). WEDNESDAY, APRIL 23 LUXEMBOURG (NEW ITEM) - ACP-EU Council (To April 24). BRUSSELS (NEW ITEM) - European Parliament holds mini session (To April 24). TUESDAY, APRIL 29 LUXEMBOURG (NEW ITEM) - General Affairs Council. MONDAY, MAY 5 BRUSSELS (NEW ITEM) - (possibly) General Affairs Council. MONDAY, MAY 12 BRUSSELS (NEW ITEM) - ECOFIN Council. BRUSSELS (NEW ITEM) - Farm Council (To May 13). STRASBOURG (NEW ITEM) - European Parliament holds plenary session (To May 16). WEDNESDAY, MAY 14 BRUSSELS (NEW ITEM) - Research Council (To May 15). TUESDAY, MAY 20 BRUSSELS (NEW ITEM) - Internal Market Council. SUNDAY, MAY 25 VENUE TO BE CONFIRMED - EU foreign ministers hold Inter-governmental conference (IGC) conclave ahead of European summit (To May 26). DOMBURG, The Netherlands (NEW ITEM) - Informal Farm Council (To May 27). END OF DOCUMENT. 7673 !G15 !GCAT SUNDAY, DECEMBER 15 STRASBOURG - Council of Europe holds symposium on "Medically-assisted procreation and the protection of the human embryo" (To December 18). MONDAY, DECEMBER 16 BRUSSELS - Farm Council (To December 17). TUESDAY, DECEMBER 17 BRUSSELS - Economic and Social Committee (ECOSOC) holds plenary session (To December 19). THURSDAY, DECEMBER 19 BRUSSELS - Fisheries Council (To December 20). Provisional agenda includes: - Proposal for a Council regulation fixing, for certain fish stocks and groups of fish stocks, the total allowable catches for 1997 and certain conditions under which they may be fished. - (possibly) Proposal for a Council regulation amending Council regulation (EC) No. 3074/95 fixing, for certain fish stocks and groups of fish stocks, the total allowable catches for 1996 and certain conditions under which they may be fished. - (Possibly) Proposal for a Council regulation laying down certain rules for the access to Community waters of research vessels for scientific purposes. - (Possibly) Commission proposal on the financing of collection of scientific data. - (Possibly) Proposal for a Council regulation (EC) amending regulation (EEC) No. 2847/93 establishing a control system applicable to the common fisheries policy (establishment of a Community catch-reporting data-base). - (Possibly) Proposal for a Council decision on MAGP IV. - Proposals for Council regulations a) laying down, for 1997, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of Norway; b) allocating, for 1997, certain catch quotas between member states for vessels fishing in the Norwegian exclusive zone and the fishing zone around Jan Mayen. - Proposals for Council regulations: a) laying down, for 1997, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of the Faroes; b) allocating, for 1997, certain catch quotas between member states for vessels fishing in Faroese waters. - Proposal for a Council regulation allocating, for 1997, Community catch quotas in Greenland waters. - Proposal for Council regulation allocating, for 1997, certain catch quotas between member states for vessels fishing in Icelandic waters. - Proposals for Council regulations: a) laying down, for 1997, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of Estonia; b) allocating, for 1997, catch quotas between member states for vessels fishing in Estonian waters. - Proposals for Council regulations: a) laying down, for 1997, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of Latvia; b) allocating, for 1997, catch quotas between member states for vessels fishing in Latvian waters. - Proposals for Council regulations a) laying down, for 1997, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of Lithuania; b) allocating, for 1997, catch quotas between member states for vessels fishing in Lithuanian waters. - a) laying down, for 1997, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of Poland; b) allocating, for 1997, catch quotas between member states for vessels fishing in Polish waters. - a) laying down, for 1997, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of the Russian Federation; b) allocating, for 1997, catch quotas between member states for vessels fishing in Russian waters. - Proposal for Council regulation laying down, for 1997, certain conservation and management measures for fishery resources in the regulatory area as defined in the Convention on future multilateral cooperation in the North West Atlantic Fisheries. - Proposal for a Council regulation laying down, for 1997, certain measures for the conservation and management of fishery resources applicable to vessels flying the flag of certain non-member countries in the 200-nautical-mile zone off the coast of the French Department of Guiana. - (Possibly) NAFO: New STACFAC regulations. - Proposals for Council decisions: a) Authorising the Kingdom of Spain to extend the agreement on mutual fishery relations with the Republic of South Africa; b) Authorizing the Portuguese Republic to extend the agreement on mutual fishery relations with the Republic of South Africa. LUXEMBOURG - Executive committee of Schengen group on free movement of people meets at ministerial level under Luxembourg presidency. Venue: Kirchberg conference centre. Luxembourg is hoping to achieve admittance of Nordic countries to Schengen accord during its presidency of the group, with signature of accession protocols for Denmark, Finland and Sweden and association protocols for Iceland and Norway at the meeting. TUESDAY, DECEMBER 23 BRUSSELS - EU institutions closed for Christmas holidays until January 2. TUESDAY, DECEMBER 31 - Irish EU presidency ends. The Netherlands takes over to June 30, 1997. END OF DOCUMENT. 7674 !G15 !GCAT FRIDAY, NOVEMBER 29 BRUSSELS - European Parliament hosts conference on "Europe and its nations - before Maastricht II". Participants include: European Commission President Jacques Santer and Belgian Prime Minister Jean-Luc Dehaene. MONDAY, DECEMBER 2 BRUSSELS - ECOFIN Council. Provisional agenda includes: - Preparation for December 13-14 Dublin European Council: - Commission report on the coordination of the Community's economic and structural policies. - EIB loans to third countries. - Taxation issues. - SEM 2000 (sound and efficient management) final report of personal representatives group. - (possibly) Protection of the financial interests of the Community: - Monitoring of national measures; - Extension of administrative controls and sanctions. BRUSSELS - Social Affairs Council. Provisional agenda includes: - Follow-up of the Essen European Council: draft single report to the European Council of Dublin. - Directive proposal on posting of workers in the framework of services. - Proposal for a directive on the burden of proof in sex discrimination cases. - Proposal for a directive modifying directive 76/207/EEC (Kalanke European Court of Justice judgment). - Amendment to regulation on civil servants and students (social security for migrant workers). - Proposed regulation on modification of regulations (EEC) 1408/71 and 574/72 (social security of migrant workers: beneficiaries of pre-retirement benefits). - Proposed regulation on various modifications of the regulations on social security for migrant workers. - (possibly) Proposed regulation on codification of the regulations on social security for migrant workers. - (possibly) Draft resolution on lifelong learning. - Draft resolution on the future of social protection. LISBON - Statistics Office of the European Community (SOEC) holds summit. TUESDAY, DECEMBER 3 BRUSSELS - Energy Council. Provisional agenda includes: - Proposal for a directive concerning common rules for the internal market in electricity. - Proposal for a directive concerning common rules for the internal market in gas. - White paper on energy: Community strategy on renewables. - Proposal for a decision on ALTENER II. - White paper on energy: proposal for a decision on analysis and forecasts. - Proposal for a decision on SAVE II programme. - Proposal for a directive on energy efficiency requirements for households: electric refrigerators, freezers and combinations thereof. - Proposal for a regulation on a SYNERGY programme. - Report on the situation of oil supply, refining and markets in the European Community. - Proposal for a directive to introduce rational planning techniques in the electricity and gas distribution sectors. - Proposal for a decision on the conclusion of the Energy Charter Treaty. - Euro-Mediterranean conference. - Revision of Community law in the energy sector. WEDNESDAY, DECEMBER 4 LONDON (NEW ITEM) - Financial Times (FT) hold conference on "Venture '96 Europe" (To December 6). Main topics discussed: overview of venture capital and buyouts markets in Europe; update on eastern Europe; fund raising for European investments; technology-a hot investment sector; mezzanine and senior debt-a look at availability and terms; managing the European portfolio; deal flow channels; exit and IPO markets in Europe. Contact: FT conferences (44) 171 896 2626. THURSDAY, DECEMBER 5 BRUSSELS - Research Council. Provisional agenda includes: - Financial supplement to the fourth framework programme/task force. - Action plan on follow-up to the green paper on innovation. - Fifth RTD framework programme. - Presidency initiative on the contribution of research to drug detection and prevention of abuse. - International cooperation in the RTD field: - Science and technology cooperation strategy with central and eastern European countries; - (possibly) Bilateral S/T agreements with several third countries. - Commission communication on the EU and space. - Commission communication on agronomic research for development. - SMEs. - (possibly) Fusion: - ITER; - Evaluation report from the Commission on the fusion programme. - High flux reactor (HFR) programme. CASABLANCA - Euro-Mediterranean summit of industrial federations. FRIDAY, DECEMBER 6 BRUSSELS - General Affairs Council. Provisional agenda includes: - Preparation of Dublin European Council. - Discussion of 53rd U.N. Commission on human rights (including definition of EU position on China). - Approval of policy document on peacekeeping operations. - Submission of report on European armaments policy. - Adoption of common position on U.N. register of conventional arms. - Former Yugoslavia. - Middle East. - Mediterranean policy: - Report on the follow-up to the Barcelona Conference; - Algeria and Egypt: decision to sign agreements; - Syria: Commission proposal for a negotiating mandate. - Preparation of EEA ministerial council. - Internal financial regulation on ACP. - Radiation protection of persons undergoing medical examination or treatment. - Negotiating directives for a nuclear cooperation agreement between EURATOM and Japan. - Approval of mandate to negotiate an agreement on wine with Slovakia, Slovenia and the Czech Republic. - Agreement on steel with central and eastern European countries. - Approval of negotiating mandate for a partnership and cooperation agreement with Turkmenistan. - Asia: - Decision to sign a protocol relating to the accession of Vietnam to ASEAN; - Preparation for EU-ASEAN ministerial (February 1997); - Follow-up to Bangkok ASEM and preparation for Singapore ministerial. - Decision to sign framework agreement with Australia. - Decision to sign mutual recognition agreements with Australia and New Zealand. - Decision on signature of free trade agreement with South Africa. END OF DOCUMENT MONDAY, DECEMBER 9 SINGAPORE (EXPANDED ITEM) - Inaugural World Trade Organisation (WTO) ministerial conference (To December 13). Provisional agenda includes: - (NEW ITEM) European Commissioner Brittan presents report on integrating multilateral clothing and textile pacts under the General Agreement on Tariffs and Trade. - Review of the implementation of Uruguay Round commitments. - Endorsement of results of negotiations on services. - Report from the committee on trade and environment. - Any other trade-related issues. BRUSSELS - Environment Council (To December 10). Provisional agenda includes: - Proposal for a decision of the European Parliament and of the Council on the review of the European Community programme of policy and action in relation to the environment and sustainable development "Towards sustainability". - Proposal for a Council directive amending directive 90/219/EEC on the contained use of genetically modified micro-organisms. - Auto oil: a) Draft directive relating to the quality of petrol and diesel fuels; b) Draft directive on measures against air pollution by emissions from motor vehicules - amendment of directives 70/229//EEC and 70/156/EEC. - Proposal for a Council directive concerning the quality of water intended for human consumption. - Commission communication on waste policy. - Proposal for a Council regulation amending Council regulation (EEC) No 3254/91 prohibiting the use of leghold traps in the Community and the introduction into the Community of pelts and manufactured goods of certain wild animal species originating in countries which catch them by means of leghold traps or trapping methods which do not meet international humane trapping standards. - Proposal for a Council regulation establishing common rules and procedures to apply to the shipments to certain non-OECD countries of certain types of waste. - Follow-up to the conference on climate change. - Fifth session of the Commission on sustainable development. STRASBOURG - European Parliament plenary session (To December 13). THURSDAY, DECEMBER 12 BRUSSELS - Transport Council. Provisional agenda includes: - External relations: - Relations with the United States in the field of air transport. - Recommendation for a Council decision authorising the Commission to open negotiations on air transport agreements between the Community and Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia. - Negotiations between the European Community and Switzerland on land and air transport. - Other measures: - (possibly) Follow-up to green paper on the citizens' network. - (possibly) Follow-up to green paper on internalisation of external costs. - (possibly) Proposal for an European Parliament and Council directive on summertime arrangements. - Surface transport: a) Rail transport: - (possibly) Follow-up to the white paper on the future of the railways. b) Road transport: - (possibly) Access to the road haulage profession. - (possibly) Taxation of goods vehicles to replace directive 93/89/EEC. - Proposal for a Council regulation laying down the conditions under which non-resident carriers may operate national road passenger transport services within a member state. - Proposal for a Council regulation amending Council directive and regulation on recording equipment in road transport. - Proposal for a Council regulation (EEC) No 684/92 on common rules for the international carriage of passengers by coach and bus. - Air transport: - Follow-up to white paper on air traffic management. - (possibly) Follow-up to high level group on air safety. - Proposal for the establishment of a single European authority for air safety. - (possibly) Proposal on airport charges. - Proposal for a Council regulation on air carrier liability in case of accidents. - (possibly) Revision of regulation on slot allocation. - (possibly) Proposals to update rules on denied boarding compensation and passenger protection. - Maritime transport: - (possibly) Licensing regime for roll-on roll-off ferry operations. - (possibly) Compiling lists of passengers on roll-on roll-off ferries. - Proposal for Council directive setting up a harmonised safety regime for fishing vessels of 24 metres in length and over. - (possibly) Commission strategic document. - (possibly) Proposal to amend Council directive 94/58/EC on the minimum level of training of seafarers. - (possibly) Proposal to amend Council directive 93/75/EEC concerning minimum requirements for vessels bound for or leaving Community ports and carrying dangerous or polluting goods. - (possibly) Shipping agreements with third countries, especially China and India. - (possibly) Report on competition in the multimodal sector. FRIDAY, DECEMBER 13 DUBLIN - Irish presidency hosts European Council of heads of state and government (To December 14). Provisional agenda includes: - Council report on the development of tax systems within the Union, taking into account the need to create a tax environment that stimulates business and the creation of jobs and promotes a more efficient environmental policy. - Commission and European Monetary Institute (EMI) report on progress in stage three of European Monetary Union (EMU). - Commission report on subsidiarity. - Presentation of draft revision of the treaties, addressing in particular: * Bringing the Union closer to its citizens; * Strengthening and enlarging the scope of the Union's common foreign and security policy; * Assuring, in view of enlargement, the proper functioning of the institutions while respecting their balance of powers and the efficiency of the decision-making process; * Simplification of the treaties. - Commission report on appropriate initiatives for reinforcing regional cooperation in Europe. - Report on the evolution of the trade policies and the preferential agreements of the Community in relation to the World Trade Organisation (WTO). - Final European Commission report on the mutually beneficial effects of greater coordination of the Union's economic and structural policies. - Review of December 1995 Madrid summit recommendations on fighting unemployment and on application of multiannual employment programmes. - Joint ECOFIN/Social Affairs Council annual employment monitoring report. - Review of progress in application of Madrid December 1995 drug experts group report on the fight against drugs. - Territorial pacts for employment within the framework of the confidence pact for employment. END OF DOCUMENT. 7675 !G15 !GCAT MONDAY, NOVEMBER 25 BRUSSELS - General Affairs Council (To November 26). In margins of the Council, EU/African Unity Organisation ministerial meeting. Provisional agenda includes: - Preparation for Dublin European Council. - Transatlantic relations. - Preparation for December WTO ministerial meeting. - Middle East. - Mediterranean policy: - Status report on contacts with Syria; - Middle East (post-Cairo summit). - Albania: decision to sign a new accord. - Relations with Turkey. - Former Yugoslavia. - Decision to sign trade and cooperation agreement with FYROM. - Nigeria: renewal of sanctions. - Biological and toxin weapons convention: approval of statement on the opening of the fourth review conference. - Ratification of chemical weapons convention: statement welcoming ratification. - Determination of EU position for structured dialogue with Cyprus and Malta. - Conclusion of negotiations on framework agreement with Australia. - Relations with central and eastern European countries: - Approval of conclusion of Europe agreements with Baltic States; - Approval of interim protocols to Europe agreements. - Russia: review of action plan. - Food aid for Central Asian Republics. - Status of negotiations with South Africa. - Preparation for OSCE conference, Lisbon. BRUSSELS - Consumers Council. Provisional agenda includes: - Commission proposal on access to justice (injunctions). - Commission communication on access to justice (settlement). - Directive amending existing consumer credit directives. - Commission green paper on commercial communications in the internal market. - Commission green paper on financial services meeting consumers' expectations. - Guarantees and after sales services. - Consumer protection within the information society. - Protection of vulnerable and disadvantaged consumers. - Continuation of consumer education theme. BRUSSELS - Brussels institute for management of the environment (IBGE), European federation of regional energy and environment agencies (FEDARENE) and Eurocities hold joint conference on "Plans and strategies for waste management on regional and local level" (0900/0800 GMT). Venue: General de Banque auditorium. Contact: IBGE by fax (322) 775 7679. TUESDAY, NOVEMBER 26 BRUSSELS - Internal Market Council. Provisional agenda includes: - (possibly) 1996 study of the impact and effectiveness of single market legislation. - Simpler legislation for the internal market (SLIM). - Directive on legal protection of designs and industrial models. - (possibly) 16th amendment of the directive 76/769/EEC on the marketing and use of certain dangerous substances and preparations. - Citizens First initiative. - Directive concerning the free movement of lawyers. - European company statute. - (possibly) Directive concerning the free movement of doctors. - Proposal for a directive amending directive 93/7/EEC concerning the return of cultural objects unlawfully removed from the territory of a member state. - (possibly) Proposal for a directive on the supplementary supervision of insurance undertakings in an insurance group. - Amendments to directive 89/398/EEC - dietary foods: a) Vertical directives; b) Temporary authorization; - Amendments to directive 2/95/EEC - miscellaneous additives: a) Prohibition of use in traditional products; b) Classification of processed euchema seaweed. - Amendment to sweeteners directive 94/35/EEC. - In-vitro medical diagnostic devices. - Amending public procurement directives following the adoption of G.P.A. - (possibly) Green paper on public procurement. LUXEMBOURG - European Commission DG XI hosts standing conference on "Health and safety in the nuclear age: informing the public on European radiation standards" (1030/0930 GMT) (and 27/11). Topics include: major changes in the Euratom basic safety standards directive. Venue: Jean Monnet building, room M6. Contact: Mrs Eisen, DG IX (352) 4301 33 164. BRUSSELS - Economic and Social Committee (ECOSOC) holds plenary session (to 28/11). DUBLIN - European Finance Convention holds tenth anniversary meeting (to 30/11). Contact: (44) 171 381 9291. WEDNESDAY, NOVEMBER 27 BRUSSELS - European Parliament mini-session (To November 28). VENICE - Second ministerial conference on the management of fish stocks in the Mediterranean (To November 29). THURSDAY, NOVEMBER 28 BRUSSELS - Justice and Internal Affairs Council (To November 29). BRUSSELS - Telecoms Council. Provisional agenda includes: - Telecommunications terminal and satellite earth station equipment. - TENs: Proposal for a European Parliament and Council decision on a series of guidelines for trans-European telecommunications networks. - Data protection: modified proposal for a directive of the European Parliament and of the Council concerning the processing of personal data and the protection of privacy in the telecommunications sectors, in particular in the integrated services digital network (ISDN). - (possibly) Numbering. - (possibly) ONP voice telephony. - (possibly) Proposal for a Council decision on inter-administration telematic networks for statistics relating to the trading of goods between member states (EDICOM). - Proposal for a European Parliament and Council directive on interconnection in telecommunications. - Update of framework and leased lines directives on open network provision (ONP). BRUSSELS - European Commission and the Indian government hold joint forum on trade and investment in India. BRUSSELS (NEW ITEM) - European Institute for Asian Studies (EIAS) hold conference on "EU-Asia cooperation in the WTO context" (To November 29). Main discussions focus on how and to what extent Asians and Europeans can cooperate in opening up markets within the WTO. Speakers include: European Commissioner Sir Leon Brittan. Contact: EIAS, Kerstin Bergloef (322) 230 8122. BRUGES, Belgium - European Society of Transport Institutes (ESTI) holds conference on "The citizens' network" (and 29/11). Topics discussed include: the implications of external costs principles on urban transport; the network benefits principles; the modernising of the regulatory framework in public transport. Venue: Castle Prinsenhof. Contact: Laetitia Hoste, ESTI (322) 230 0514. LEIPZIG, Germany (NEW ITEM) - Verband Saechssicher Bildungsinstitute hold conference on "Education 2000" (To November 30). Topics include: the European education market; training in the latest skills; multimedia ability for both suppliers and users; innovation through personal development. Contact: Verband Saechssicher Bildungsinstitute, Dieter Webner (49) 341 490 5910. LONDON - Agra Europe holds fifth annual European sugar, sweetners and starch conference (to November 29). Contact: Agra Europe (44) 1892 511 807. END OF DOCUMENT. 7676 !G15 !GCAT THURSDAY, NOVEMBER 14 BRUSSELS - Industry Council. Provisional agenda includes - Steel: a) State aids code; b) Sixth monitoring report on state aids in steel sector; c) (possibly) Future of ECSC Treaty. - Competition: a) State aids; b) Merger regulation; c) Agreement with Canada. - Shipbuilding: - (possibly) State of ratification procedure - OECD agreement. - SMEs: a) Proposal for a Council decision on a third multiannual programme for small and medium sized enterprises (SMEs) in the European Union (1997-2000); b) Report on integrated programme. - Competitiveness policy: a) Commission's first report on the competitiveness of European industry; b) A European policy for quality promotion; c) Benchmarking; d) Standards. - Merger regulation: - Review of regulation 4064/89 on the control of concentrations between undertakings. - Automobile industry. - Chemicals industry. - Textiles: - Communication from the Commission on the competitiveness of subcontracting in the textile and clothing industry in the European Union. - (possibly) Recycling industry and environmental technology. - (possibly) Space industry. - (possbly) Cooperation with third countries. BRUSSELS - EuroCommerce holds conference on "The business of adding value - European retailing and distribution". Main discussions focus on commerce in the cashless society and the challenges of multimedia. European Commission President Jacques Santer attends. Contact: Catherine Piana (322) 230 5874. SUNDAY, NOVEMBER 17 QATAR - European Commission DG XVII and the Cooperation Council for the Arab States of the Gulf (GCC) hold joint conference on "EU-GCC: extending the partnership to natural gas" (and 18/11). MONDAY, NOVEMBER 18 BRUSSELS - Farm Council (To November 19). TUESDAY, NOVEMBER 19 BRUSSELS - Budget Council. Provisional agenda includes: - Draft Community budget for 1997 (second reading). BRUSSELS - Euro-Mediterranean Committee for the Barcelona process meets (To November 20). LONDON - Agra Europe holds ninth annual European and international dairy conference "Dairy '96" (To November 20). Contact: Agra Europe (44) 1892 511 807. BRUSSELS - Forum Europe, UNICE, the European Round Table of Industrialists (ERT), Eurochambres, the EU Committee of AmCham, the European Automobile Manufacturers Association (ACEA) and the European Chemical Industry Council (CEFIC) hold one-day conference (0930/0830 GMT) on "Europe's competitive edge". Main topic is: assessing the state of EU competitiveness, an agenda for future action. Main speaker is Martin Bangemann, Member of the European Commission with responsibility for Industrial Affairs, Information and Telecommunications technologies. Venue: Concert Noble, rue d'Arlon 82, 1040 Brussels. Contact: Clare Richardson, Forum Europe (322) 736 1430. THURSDAY, NOVEMBER 21 BRUSSELS - Education/Youth Council. Provisional agenda includes: - Proposal for a decision on TEMPUS II. - Conclusions on school effectiveness. - European year of lifelong learning. - Green paper on obstacles to mobility in higher education. - Proposal for a recommendation concerning the assessment of quality in higher education. - White paper on teaching and learning: towards the learning society. - In-career development for teachers. - (possibly) "SOCRATES" programme: draft decision amending the Socrates decision. - Quality of higher education. - General assessment of first and second level education systems. - Commission proposal for a Council recommendation on the transferability of grants. - Preparation of the structured dialogue with counterparts from central and eastern European countries. FRIDAY, NOVEMBER 22 BRUSSELS - Development Council. Provisional agenda includes: - First ministerial exchange of views on ACP/EU relations post-Lome IV (Commission green paper). - Further exchange of views on relief, rehabilitation and development. - Resolution on the forestry sector. - Adoption of a common position on the regulation on north/south cooperation in the fight against drugs. - Adoption of a common position on the regulation on aid for population policies and programmes. - Approval after EP second reading of the regulations on rehabilitation and construction in developing countries, refugees in Asia and Latin America, environmental measures in developing countries and HIV/AIDS related operations in developing countries. - Horizon 2000 - coherence, complementarity and coordination. BRUSSELS - Fisheries Council. Provisional agenda includes: - Proposal for Council regulations (EC) fixing: - The guide prices for the fishery products listed in Annex I (A), (D) and (E) of Regulation (EEC) No. 3759/92 for the 1997 fishing year; - The guide prices for the fishery products listed in Annex H to Regulation (EEC) No. 3759/92 for the 1997 fishing year; - The Community producer price for tuna intended for the industrial manufacture of products falling within CN code 1604 for the 1997 fishing year. - Proposal for a Council regulation (EC) temporarily suspending totally or partially the autonomous duties of the Common Customs Tariff for certain fishery products (1997). - (Possibly) Proposal for a Council Regulation laying down (new) technical measures for the conservation of fishery resources. - (Possibly) Proposal for a Council decision on MAGP IV. - Commission report on third countries' activities in Community waters. - Proposals for a Council regulation on the conclusion of the protocol establishing the fisheries rights and financial compensation provided in the agreement between the European Economic Community and the government of Senegal. - (Possibly) Conclusion of new fisheries agreements with: a) Certain countries of South America; b) South Africa; c) Namibia; d) Mozambique. END OF DOCUMENT. 7677 !G15 !GCAT NOVEMBER - Irish presidency hosts conference on "Local employment initiatives". Date and venue to be announced. VENICE, Italy - Conference on fish management in the Mediterranean. Date to be confirmed. FRIDAY, NOVEMBER 1 BRUSSELS - EU institutions closed for All Saints Day holiday. MONDAY, NOVEMBER 4 EUROPEAN UNION - 1996 European Telework week begins (To November 11). The aim is to raise awareness of the business and work opportunities presented by telework and to provide opportunities to understand and use telework technologies. Contact: Horace Mitchell (44) 1 635 253 802. VIENNA - Third European assembly on telework and new ways to work (To November 6). Main topics discussed are: getting people to work; training for life in the information society and working towards sustainability. Contact: Josef Hochgerner (43) 1 4950 442 42. TUESDAY, NOVEMBER 5 BRUSSELS - European Transport Safety Council (ETSC) holds conference on "Low-cost/high-return engineering measures for road accident reduction". Contact: ETSC (322) 230 4106. BRUSSELS - CENELEC holds conference on "Standards on trial: case studies in European standardisation" (To November 6). Venue: Sheraton Hotel. Contact: Annick Colman, CENELEC (322) 519 6889. THURSDAY, NOVEMBER 7 BRUSSELS - Culture Council. Provisional agenda includes: - (possibly) Debate on European funds promoting cinema and television production. - Directive amending the television without frontiers directive. - Decision establishing an audiovisual guarantee fund. - Proposal for a directive harmonising rules on media concentrations. - Decision on Ariane programme. - Decision on Raphael programme. - First Commission report on consideration of cultural aspects of EU action. - Proposal for a decision on rules concerning the European city of culture after the year 2000. - (possibly) Green paper on new audiovisual services. - Proposal for a directive amending directive 93/7/EEC concerning the return of cultural objects unlawfully removed from the territory of a member state. CORK, Ireland - European Commission hosts European conference on "Rural development" (To November 9). Discussions will focus on the future perspectives for the Union's rural development policy. This policy seeks to address the challenges faced by rural areas in a way that considers all economic sectors and aspects of rural life and builds on their strengths. BRUSSELS - European Trade Union Confederation (ETUC) holds conference on "Social protection" (To November 8). Contact: ETUC (322) 224 0411. FRIDAY, NOVEMBER 8 CHICAGO - Transatlantic Business Dialogue (TABD NEWS) holds conference (To November 9) to discuss transatlantic trade relations and develop creative solutions to remaining barriers to transatlantic trade. Speakers are: US Commerce Secretary Mickey Kantor, European Trade Commissioner Sir Leon Brittan and European Industry Commissioner Martin Bangemann. Contact: Stephen Johnston, EU Contact Point (322) 548 0693. MONDAY, NOVEMBER 11 BRUSSELS - ECOFIN Council. Provisional agenda includes: - Preparation for December 13-14 Dublin European Council: - EMU; - Employment; - Report on taxation; - (possibly) Banking and financial directives; - Taxation issues. STRASBOURG - European Parliament plenary session (To November 15). TUESDAY, NOVEMBER 12 BRUSSELS - Health Council. Provisional agenda includes: - Proposal for an EP and Council decision adopting a programme of Community action on the prevention of drug dependence within the framework for action in the field of public health. - Proposal for a decision adopting a programme of Community action on health monitoring in the context of the framework for action in the field of public health. - Proposal for a Council directive on the approximation of the laws, regulations and administrative provisions of the member states relating to the advertising of tobacco products. - Proposal for a decision of the European Parliament and of the Council creating a network for the epidemiological surveillance and control of communicable diseases in the European Community. - Setting-up of an EU-U.S. task force to develop and implement a global early warning system and response network for communicable diseases. - (possibly) Transmissible Spongiform Encephalopathies (TSE). - Blood safety/self sufficiency. - State of health in the EU. - Health protection requirements in Community policies. - European health card. - Pollution-related diseases: - Rare diseases; - Accidents/injuries. - Statement by presidency on Alzheimers Disease conference (November 21-22, 1996). WEDNESDAY, NOVEMBER 13 BRUSSELS - Committee of the Regions holds plenary session (To November 14). BRUSSELS - EuroCommerce launches the business of adding value, an analysis of European retail and distribution based on a study by London economics, and the EuroCommerce recommendations for future policy in recognition of the vital importance of this sector to th European economy (1030/0930 GMT). Venue: International Press Centre (IPC). Contact: Catherine Piana (322) 230 5 874. BRUSSELS - Agra Europe holds third annual European grain conference (To November 14). Contact: Agra Europe (44) 1892 511 807. END OF DOCUMENT. 7678 !G15 !GCAT SUNDAY, OCTOBER 20 FINLAND - Finland holds municipal elections and the first elections to the European Parliament on the same day. VILNIUS - Parliamentary elections in Lithuania. TIRANA - Albania holds local elections; all parties, including those which withdrew from the controversial general election, have agreed to participate in the local vote. MONDAY, OCTOBER 21 STRASBOURG - European Parliament plenary session (To October 25). TUESDAY, OCTOBER 22 DUBLIN - European Union leaders hold special summit to discuss a wide range of issues including trade, drugs and the EU's future. Agenda likely to include the IGC, employment and social protection, the fight against drugs, and preparations for the December ministerial meeting of the World Trade Organisation in Singapore. STRASBOURG - Confederation of European Paper Industries (CEPI) holds conference on "Forest management and paper: growing cooperation". Contact: CEPI (322) 627 4911. THURSDAY, OCTOBER 24 LUXEMBOURG - Tourism Council. Provisional agenda includes: - Commission report on the evaluation of the Community's action plan to assist tourism (1993-1995). - Proposal for Council decision on a first multiannual programme to assist European tourism (1997-2000) "PHILOXENIA". - (possibly) Report by the Commission on the situation regarding travel guides and ski instructors in the EU. MADRID - European Investment Bank (EIB) holds forum on "The Mediterranean: a space for partnership" (1500/1300 GMT) (To October 25). Agenda includes: - The Mediterranean, a common destiny: - The EU's Mediterranean policy: from cooperation to partnership; - The sea, water and cities: preserving a common heritage. - An area for joint development: - The dynamic role of trans-national projects; - The banking sector and north-south partnership. Speakers include: EIB President Sir Brian Unwin; European Commissioner for Relations with the Mediterranean Manuel Marin; MEP Willy de Clercq; Egyptian Minister of State for Economic Affairs Youssef Boutros-Ghali; Greek Deputy Foreign Minister George Romeos; Jordanian Planning Minister Rima Khalaf; Barcelona Mayor and EU Committee of the Regions President Pasqual Maragall. Contact: Yvonne Berghorst, EIB (352) 4379 3154. FRIDAY, OCTOBER 25 LUXEMBOURG - Internal Market Council. Provisional agenda includes: - Operation of the internal market: - Oral report of the Commission including progress report on the SLIM initiative; - Administrative cooperation; - Transposition. - Citizens first. - Preparation for structured dialogue with central and eastern European countries: - White paper on approximation of the laws of central and eastern European countries in the field of the internal market. - Three proposed directives concerning the free movement of persons: a) elimination of controls on persons crossing internal frontiers; b) abolition of restrictions on movement and residence within the Community; c) (possibly) the right of third-country nationals to travel in the Community. - Proposal for a directive on pluralism and media concentration. - The "Robert Schuman" action. - Transparency mechanism for national regulations concerning the information society. SUNDAY, OCTOBER 27 - European summer time ends - Central European time changes from GMT +2 to GMT +1. SOFIA - Bulgaria holds its second post-communist presidential election. MONDAY, OCTOBER 28 LUXEMBOURG - General Affairs Council (To October 29). Provisional agenda includes: - Preparation for December WTO ministerial meeting. - Mediterranean policy: - Status report on negotiations with Egypt and Algeria; - Decision on signature of agreements with Jordan and Lebanon; - Preparation for EU political profile at Cairo Summit (November 12-14). - Middle East. - Former Yugoslavia. - Ukraine action plan. - OSCE - Proposed guidelines for review and summit. - Determination of EU's position for structured dialogue with central and eastern European countries. - Commission presentation of green paper on post-Lome scenario. - Relations with South Africa; state of negotiations. - Relations with Switzerland. - Interpretation and implementation of European Council common criteria to be applied to arms exports. - Status of negotiations on framework agreement with Australia. - Structured dialogue with central and eastern European countries. - Signature of new partnership accords with Jordan and Lebanon. - Signature of a framework accord with Korea. - IGC ministerial session (first day). LUXEMBOURG - Farm Council (To October 29). BRUSSELS - Second European forum for social partners on services of general interest (To October 29). Agenda includes: role and missions of services of general interest in achieving the goals of the EU and guaranteeing the fundamental rights of its residents and citizens; role of the actors (public authorities, operators, consumers, employees); subsidiarity, regulation, control, evaluation; globalisation and European strategy towards third countries. Venue: Palais des Congres. Contact: First & Top Travel - L'Universelle Travel Group (322) 647 4935. TUESDAY, OCTOBER 29 BRUSSELS - Economic and Social Committee (ECOSOC) holds plenary session (To October 31). WEDNESDAY, OCTOBER 30 BRUSSELS - EU senior officials meet in the framework of the Euro-Mediterranean partnership on political and security questions (To October 31). PARIS - Euroforum holds conference on "Gas and electricity '96 - deregulation: what is the impact?" (To October 31). Venue: Pavillon Royal, Bois de Boulogne. Contact: Alexandra Galeza (33) 1 44 88 14 98. THURSDAY, OCTOBER 31 MARRAKESH, Morocco - Prometheus-Europe holds conference on "Articulate the Euro-Mediterranean partnership and decentralised cooperation" (To November 1). Topics include: the objectives of the Euro-Mediterranean partnership; the functioning of the EMP - circuits of decision-making, financial control and the MEDA regulation; the functioning of Euro-Mediterranean programmes in the context of decentralised cooperation. Contact: Euro-Med (33) 1 43 43 03 07. END OF DOCUMENT. 7679 !G15 !GCAT MONDAY, OCTOBER 14 LUXEMBOURG - ECOFIN Council. Provisional agenda includes: - EMU third stage: preparation for Dublin European Council. - European Investment Bank (EIB) loans to third countries: - New guarantee system; - Renewal of envelopes for eastern Europe, the Mediterranean and ALA. - Protection of the Community's financial interests: regulation on on-the-spot checks and inspections (final adoption). - Fight against fraud: transit sector. - Taxation issues. LUXEMBOURG - Fisheries Council. Provisional agenda includes: - Proposal for a Council regulation laying down (new) technical measures for the conservation of fishery resources. - Proposal for a Council regulation on logbooks and landing declarations. - (possibly) Commission report on direct landing of fish. - Commission report on fishing and responsible marketing. - Proposal for Council regulation fixing the conditions of access to waters and resources of the Baltic Sea. - Proposal for a Council decision on Multi-Annual Guidance Programme (MAGP) IV. - (possibly) Proposal for a Council regulation on the fixing of management objectives and strategies for certain fisheries for the period 1994-1997. - (possibly) Proposal for a Council regulation amending for the sixteenth time regulation (EEC) No. 3094/86 laying down certain technical measures for the conservation of fishery resources (drift-nets). - (possibly) Proposal for a Council regulation amending previous Council regulations opening and providing for the administration of autonomous Community tariff quotas for certain fishery products (1996) or for tariff suspensions (1996). - (possibly) Proposal for a Council regulation (EC) amending regulation (EEC) No. 2847/93 establishing a control system applicable to the common fisheries policy (establishment of a Community catch-reporting database). - Proposal for a Council regulation (EC) laying down common marketing standards for certain fishery products. - Proposal for a Council regulation introducing transitional measures into regulation (EC) No 1624/94 laying down certain technical measures for the conservation of fishery resources in the Mediterranean. - (possibly) Proposal for a Council regulation (EC) amending regulation (EEC) No. 2847/93 establishing a control system applicable to the common fisheries policy (satellite monitoring). - Commission report on the application of the basic regulation (No. 3760/92). - (possibly) Proposal for Council regulation (EC) amending for the fourth time regulation (EEC) No 3699/93 laying down the criteria and conditions for Community structural funding in the fishing and aquaculture sector as well as the processing and marketing of their products. - (possibly) Commission report on control operations in 1995. - (possibly) Commission report on MAGP III. - (possibly) Conclusion of new fisheries agreements with: a) Estonia; b) Latvia; c) Lithuania. - (possibly) Venice conference on marine management in the Mediterranean, November 1996 - final arrangements. - (possibly) Negotiating mandate for future South Atlantic Fisheries Organisation (SAFO). - (possibly) Proposal for Council decisions on the conclusion of the agreement in the form of an exchange of letters concerning the provisional application of the protocol setting out the fishing opportunities and financial contribution provided for in the agreements between the European Economic Community and: a) Angola; b) Sao Tome; c) Gambia; d) Mauritius. - (possibly) Proposals for the conclusion of a new fisheries agreement with Mauritania. - (possibly) Conclusion of fisheries agreements with Russia on behalf of: a) Sweden; b) Finland. - Recommendations for a Council decision authorising the Commission to negotiate fisheries agreements with certain Mediterranean countries. - Commission report on third countries' activities in Community waters. LILLE, France - European Commission (DG VII-transport, XI-environment, XVII-energy) and Nord-Pas de Calais Region organise congress (To October 16) on "City and mobility; moving ideas around!" . Venue: Alteris, avenue de la Creativite 3, 59650 Villeneuve d'Ascq. Contact: Marianne Ryckewaert (33) 20 67 08 21) CYPRUS - Experts on the implementation of the multiannual rolling work programme for maritime transport in the Mediterranean hold their first meeting. WINDHOEK, Namibia - EU/Southern Africa Development Council ministerial meeting (To October 15). TUESDAY, OCTOBER 15 LUXEMBOURG - Environment Council. Provisional agenda includes: - Proposal for a decision of the European Parliament and of the Council on the review of the European Community programme of policy and action in relation to the environment and sustainable development "Towards sustainability". - Proposal for a Council regulation amending Council regulation (EEC) No 3254/91 prohibiting the use of leghold traps in the Community and the introduction into the Community of pelts and manufactured goods of certain wild animal species originating in countries which catch them by means of leghold traps or trapping methods which do not meet international humane trapping standards. - (possibly) Follow-up of the conference on climate change and preparation of EU position for protocol negociations. - Preparation for the conference on biodiversity. - Preparation for the eighth meeting of the parties to the Montreal protocol on substances that deplete the ozone layer. - (possibly) Commission communication on waste strategy. - Proposal for a Council directive amending directive 90/219/EEC on the continued use of genetically modified micro-organisms. - Proposal for a Council directive concerning the quality of water intended for human consumption. - Auto oil: a) Draft directive relating to the quality of petrol and diesel fuels; b) Draft directive on measures against air pollution by emissions from motor vehicules - amendment of directives 70/229/EEC and 70/156/EEC. WEDNESDAY, OCTOBER 16 BRUSSELS - Centre for European Policy Studies (CEPS) holds seminar on "Water, politics and security in the Mediterranean Region" (0915/0715 GMT). Venue: Place du Congres 1. Contact: Shireen Hunter, CEPS (322) 229 3911. THURSDAY, OCTOBER 17 LUXEMBOURG - Executive committee of Schengen group on free movement of people meets at ministerial level under Luxembourg presidency. Venue: Kirchberg conference centre. Luxembourg is hoping to achieve admittance of Nordic countries to Schengen accord during its presidency of the group, with signature of accession protocols for Denmark, Finland and Sweden and association protocols for Iceland and Norway at December 19 meeting. END OF DOCUMENT. 7680 !G15 !GCAT THURSDAY, OCTOBER 3 LUXEMBOURG - Transport Council (To October 4). Provisional agenda includes: - External relations: - Recommendation for a Council decision authorising the Commission to open negotiations on air transport agreements between the Community and Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia. - Relationship with central and eastern European countries. - Negotiations between the EU and Switzerland on land and air transport. - Other measures: - Proposal for a European Parliament and Council directive on summertime arrangements. - Surface transport: a) Road transport: - (possibly) Access to the road haulage profession. - (possibly) Taxation of goods vehicles to replace directive 93/89/EEC. - Proposal for a Council regulation laying down the conditions under which non-resident carriers may operate national road passenger transport services within a member state. - Proposal for the modification of Council regulation (EEC) No 684/92 on common rules for the international carriage of passengers by coach and bus. b) Rail transport: - (possibly) White paper on the future of the railways. - Air transport: - (possibly) Follow-up to white paper on air traffic management. - Proposal for a Council regulation on air carrier liabilities in case of accidents. - Proposal for a Council regulation amending regulation EEC/3922/91 on the harmonisation of technical requirements and administrative procedures in the field of civil aviation. - Maritime transport: - (possibly) Proposal on the compilation of lists of passengers on roll-on roll-off ferries. - Proposal for a Council directive setting up a harmonised safety regime for fishing vessels of 24 metres or more in length. - (possibly) Proposal for a Council directive amending Council directive 93/75/EEC concerning minimum requirements for vessels bound for or leaving Community ports and carrying dangerous or polluting goods. - (possibly) Proposal for a Council directive amending directive 94/58/EEC on the minimum level of training for seafarers. LIEGE, Belgium - European Institute for Legal Studies "Fernand Dehousse" holds conference on "Regional trade agreements and multilateral rules after the Uruguay Round: convergence, divergence and interaction" (To October 5). Venue: Palais des Congres. Contact: Xavier Denoel, Liege University (32) 41 66 3156. MONDAY, OCTOBER 7 LUXEMBOURG - Research Council. Provisional agenda includes: - Financial supplement to the fourth framework programme/task forces. - Follow-up to the green paper on innovation. - International cooperation in the research and technological (RTD) development field: - Science and technology cooperation strategy with Mediterranean countries; - (possibly) Bilateral science and technology agreements with several third countries. - Joint Research Centre (JRC): Commission report on progress in the implementation of Council conclusions of April 21, 1994 on the role of the JRC. - Fifth RTD framework programme. - (possibly) Evaluation of Community RTD activities. TUESDAY, OCTOBER 8 LUXEMBOURG - Industry Council. Provisional agenda includes: - Implications of the information society for EU policies. - Review of the action plan "Europe's way to the information society". - Member state experiences. - The information society and services for industry. - Standardisation and the information society. - Information society and the citizen. - (possibly) Multilingual information society. - The information society and space. - Green paper on the social aspects of the information society. BRUSSELS - Euro-Mediterranean committee for the Barcelona process meets (To October 9). GALICIA, Spain - European Commission's DG XVI, Committee of the Regions and Galicia hold seminar on land-use planning in the Atlantic Arc region. LONDON - Agra Europe holds third annual European meat industry conference "Meat '96". Topics include: EU policy for meat and livestock; EU policy, European meat producation and trade - perspectives from UK and Germany; market outlook for beef, sheepmeat, pigmeat and poultry; BSE and the effects on European meat consumption; rebuilding the image of meat; regaining consumer confidence. Venue: Copthorne Tara Hotel. Contact: Agra Europe (44) 1892 51 18 07. THURSDAY, OCTOBER 10 BRUSSELS - Cogen Europe holds third annual conference on "Europe's cogeneration markets of the future: prospects and challenges" (To October 11). Venue: Sheraton Hotel. Contact: Cogen Europe (322) 772 8290. FRIDAY, OCTOBER 11 BRUSSELS - European Institute for Asian Studies (EIAS) holds conference on "APEC and the EU". Main discussions focus on what APEC is, what it actually does and what it means for EU policy makers and business. Contact: EIAS, Kerstin Bergloef (322) 230 81 22. SUNDAY, OCTOBER 13 AUSTRIA - Austria holds its first elections to the European Parliament, electing 21 deputies. END OF DOCUMENT. 7681 !G15 !GCAT THURSDAY, SEPTEMBER 26 DUBLIN (EXPANDED ITEM) - Informal Justice and Home Affairs Council (To September 27). Discussions include the fight against drugs. BERLIN - The Kangaroo Group in collaboration with the Fondation Europe et Societe host European Parliament and Commission conference on "On the way to the European home market: the single currency" (To September 28). Agenda includes: role of the single currency in the development of the EU; priorities of the Irish Presidency regarding the single currency; preparation for the move to the single currency; impact on the French banking system; impact on financial services and policy; impact on business; single currency and social aspects; relations between the single currency and the currencies which will join the EMU later; single currency and political union. Speakers include: MEPs Karl von Wogau, Giorgos Katiforis and Elmar Brok; Irish Finance Minister Ruairi Quinn; European Economy Commissioner Yves-Thibault de Silguy. Venue: Steigenberger Hotel. Contact: Kangaroo Group conference office (322) 284 4438. BRUSSELS - Club de Bruxelles hold conference on "The future of Biotechnologies in Europe" (To September 27). Topics include: development and role of biotechnology R&D in the EU; innovation in health care: novel pharmaceutical products; new crops from plant biotechnology; the "greening" of industry: clean products and processes; biotechnology in Europe society: public perceptions; industrial competitiveness and biotechnological innovation. Contact: Club de Bruxelles (322) 743 1520. WARSAW - Euromoney Seminars holds third annual conference on "The 1996 Polish investment forum" (To September 27). Venue: Bristol Hotel. Contact: Euromoney Seminars (44) 171 7798793. ROME - European Association of Advertising Agencies (EAAA) holds annual conference on "The future of brand-building across borders". Contact: Paola di Discordia, EAAA (322) 280 1603. FRIDAY, SEPTEMBER 27 BRUSSELS - Telecoms Council. Provisional agenda includes: - Proposal for a European Parliament and Council directive on a common framework for general authorisations and individual licences in the field of telecommunications services COM(95)545. - Proposal for a European Parliament and Council decision on action at Union level in the field of satellite personal communications services in the European Union COM(95)529. - (possibly) Commission communication on ITU policy forum. - Proposal for a European Parliament and Council directive on telecoms terminal and satellite earth station equipment. - TENs: proposal for a European Parliament and Council decision on a series of guidelines for trans-European telecommunications networks. - (possibly) ONP voice telephony: proposal for a European Parliament and Council directive. - (possibly) proposal for a Council decision on inter-administration telematic networks for statistics relating to the trading of goods between member states (EDICOM). - (possibly) Draft Council decision on promotion of multilingualism in the information society. - Proposal for a European Parliament and Council directive on common rules for the development of Community postal services and the improvement of quality of service COM(95)227. - (possibly) Proposal for a Council decision regarding the definition and implementation of Community policy in the field of telecommunications and postal services. - (possibly) Health aspects of mobile phones. BRUSSELS - Centre for European Policy Studies (CEPS) holds workshop on "Completing the internal market for electricity: the meaning of the June 20th decision" (1300/1100 GMT). Speakers include MEP Claude Desama. Venue: Place du Congres 1. Contact: CEPS (322) 229 3911. MONDAY, SEPTEMBER 30 BRUSSELS - IGC Working Party of EU foreign ministers' representatives meets to continue review of EU treaties. Topics include: flexibility, follow-up of specific issues in the light of first round of discussions. DUBLIN - People First holds conference on "Challenges of living and working in the European information society" (0830/0630 GMT) (To October 1). Topics include: employment and economic structure in the information society; the future of work in the information society; labour market and learning in the information society; living in the information society. Venue: Dublin Castle. Contact: People First (353) 1 661 8904. TUESDAY, OCTOBER 1 LUXEMBOURG - General Affairs Council (To October 2). Provisional agenda includes: - Preparation for December WTO ministerial meeting. - Mediterranean policy; - MEDA regulation: adoption of the guidelines for the indicative programmes; - Conclusion of negotiations with Jordan and Lebanon; - West Bank and Gaza: Commission proposal for a negotiating mandate. - Relations with Albania: approval of mandate to negotiate a new agreement. - Former Yugoslavia: - Follow-up to electoral process; - Peace process; - Medium/long-term strategy. - Middle East. - Mandate for negotiation of extension of steel agreements with the former USSR. - Relations with central and eastern European countries; decisions of association councils. - Approval to sign supplementary protocols to Baltic FTAs. - India - Council conclusions on Commission communication. - ASEAN - Council conclusions on Commission communication; protocol to ASEAN agreement to take account of Vietnam's accession. - Preparation for SADC ministerial meeting on October 14-15. - Food aid distribution regulation. - Mid-term review of decisions on the association of overseas countries and territories. - Draft joint action on anti-personnel landmines (possible adoption of further joint action). - KEDO (Korean Peninsular Energy Development Organisation). - (possibly) Preparation of the association council with Turkey. - IGC ministerial session. BRUSSELS - European Parliament, Regions and Local authorities hold joint conference designed to improve it's relations with Union's regional and local authorities and to discuss with them how to strenghten democracy and solidarity in the EU (To October 3). Contact: EP fax (352) 4300 2673. BRUSSELS - Touchstone exhibitions and conferences hold conference on "Managing economic transition in central and eastern Europe and central Asia" (To October 3). Venue: Palais des Congres. Contact: Olga Arola, Touchstone exhibitions and conferences (44) 181 332 0044. BRUSSELS - Agra Europe holds conference on "CAP reform 1996-2000 and beyond" (To October 2). Venue: Sheraton Hotel. Contact: Agra Europe (44) 1892 511 807. WEDNESDAY, OCTOBER 2 BRUSSELS - European Trade Union Confederation (ETUC) holds conference on "European works councils" (To October 4). Contact: ETUC (322) 224 0411. END OF DOCUMENT. 7682 !G15 !GCAT FRIDAY, SEPTEMBER 13 BRUSSELS - Centre for European Policy Studies (CEPS) holds workshop on "The strategic implications of the Euro for banks and corporates" (1000/0800 GMT). Agenda includes: implication of the empirical findings on economies of scale and scope in European banking; mergers and acquisitions in European banking; European banking: a cross-country comparison; Euro pricing and marketing strategies in Europe; implications for corporate finance; place of business and taxation. Venue: Place du Congres 1. Contact: CEPS (322) 229 3911. ROME - NATO Secretary General Javier Solana addresses NATO Defence College; (possibly) meets Italian Prime Minister Romano Prodi and Foreign Minister Lamberto Dini. SUNDAY, SEPTEMBER 15 BARCELONA, Spain - Eurotextil exhibition on the textile and clothing industry takes place (To September 17). Venue: Fira de Barcelona. Contact: Eurotextil (34) 93 233 2000. CRACOW, Poland - European Commission and the Polish government hold joint conference on "Industrial property in European integration" (1900/1700 GMT) (To September 17). Speakers include: Head of the Commission delegation in Poland Rolf Timans, Commission DG XV Director General John Mogg. Contact: Kserkop (48) 12 33 39 24. MONDAY, SEPTEMBER 16 BRUSSELS - Farm Council (To September 17). STRASBOURG - European Parliament plenary session (To September 20). BRUSSELS - IGC Working Party of EU foreign ministers' representatives meets to continue review of EU treaties (To September 17). Topics include: institutional issues, budgetary issues, national parliaments. BRUSSELS (NEW ITEM) - Centre for European Policy Studies (CEPS) holds conference on "How to maintain momentum on the movement towards peace and cooperation in the Mediterranean region: an Egyptian perspective" (1800/1600 GMT). Speaker is Political Councellor to President Hosni Mubarak Osama al Baz. Venue: Place du Congres 1. Contact: CEPS: (322) 229 3911. TUESDAY, SEPTEMBER 17 BRUSSELS - Knibb, Gormezano and Partners hold conference on "The automotive industry and the environment" (To September 18). Venue: Renaissance Hotel. Contact: Automotive Matters International Ltd (44) 1628 526 060. GRIMBERGEN (NEW ITEM) - COPA holds conference on "Women farmers: more than a job, a life". Venue: Salons De Romree, Beiaardlaan 31. Contact: COPA (322) 287 2711. WEDNESDAY, SEPTEMBER 18 DUBLIN (EXPANDED ITEM) - EU trade ministers hold informal meeting (To September 19) to prepare for the first ministerial conference of the World Trade Organisation (WTO) in Singapore on December 9-13 (especially focusing on integrating multilateral clothing and textile under the General Agreement on Tariffs and Trade). Participants include: Trade Commissioner Sir Leon Brittan and WTO Director General Renato Ruggiero. Venue: Dublin Castle. BRUSSELS - Committee of the Regions holds plenary session (To September 19). BRUSSELS - Centre for European Policy Studies (CEPS) holds seminar on "Banning chemical weapons" (1315/1115 GMT). Speaker is Ian R. Kenyon, Executive Secretary, Preparatory Commission for the Organisation for the Prohibition of Chemical Weapons. Venue: Place du Congres 1. Contact: CEPS (322) 229 3911. LONDON - AIG conferences Ltd holds "The European power forum: regulatory developments and strategic opportunities" (To September 20). Venue: Park Lane Hotel. Contact: AIG conferences Ltd (44) 171 2422324. THURSDAY, SEPTEMBER 19 BRUSSELS - European Commission hosts "Restpor '96 - Regional Science & Technology Policy Research" conference (To September 21). Discussions focus on a comparative analysis of various regional models of technological innovation as well as on presenting various examples of cooperation and technology transfer among companies, universities, research establishments and public authorities. Contact: DG XII, Mr Mathieu fax (322) 296 0560. BRUSSELS - IBC Legal Studies and Services holds conference on "Telecommunications and EC competition law" (To September 20). Venue: SAS Hotel. Contact: Anna D'Alton, IBC Legal Studies and Services (44) 171 453 2043. FRIDAY, SEPTEMBER 20 DUBLIN (EXPANDED ITEM) - Informal ECOFIN Council (To September 22). Main discussions focus on new ERM, budgetary stability pact and legal framework for the Euro. ATHENS (NEW ITEM) - Greek national elections; two main parties running are Panhellenic Socialst Movement (PASOK) headed by Prime Minister Costas Simitis and conservative New Democracy main opposition party led by Miltiades Evert. SUNDAY, SEPTEMBER 22 KILLARNEY, Ireland - Informal Farm Council (To September 24). Provisional agenda includes beef market trends and sales promotion. MONDAY, SEPTEMBER 23 BRUSSELS - Centre for European Policy Studies (CEPS) holds seminar on "World competition rules" (1315/1115 GMT). Speaker is Karel Van Miert, member of the European Commission responsible for competition policy. Venue: Place du Congres 1. Contact: CEPS (322) 229 3911. TUESDAY, SEPTEMBER 24 BRUSSELS - Social Affairs Council. Provisional agenda includes: - Proposal for a decision on the establishment of an employment and labour market policy committee. - Modification of the "carcinogens" directive. - Amendment of directive 86/378/EEC on equal treatment in occupational social security schemes. - Council resolutions on equal opportunities between men and women and the European structural funds. - Information and consultation of workers. - Future of social dialogue. - Joint report on employment. BRUSSELS - IGC Working Party of EU foreign ministers' representatives meets to continue review of EU treaties (To September 24). Topics include: issues on which proposals become available from delegations. LONDON - European Commission hosts conference on "Private security industry in society: a European perspective" (To September 25). Topics include: vocational training, regulation, standards of service and employment. Venue: Forte Crest Hotel. Contact: Nigel Greaves Associates, Andrew Mackay (44) 1886 833 034. BRUSSELS - Economic and Social Committee (ECOSOC) holds plenary session (To September 26). BRUSSELS - Centre for European Policy Studies (CEPS) holds seminar on "The inter-governmental conference" (1315/1115 GMT). Speaker is Michael Patijn, State Secretary for Foreign Affairs, The Netherlands. Venue: Place du Congres 1. Contact: CEPS (322) 229 3911. ROTTERDAM, The Netherlands (NEW ITEM) - Royal Dutch Jaarbeurs holds conference on "The European market for infrastructural projects - EMIP '96" (1400/1200 GMT) (To September 26). Venue: Erasmus Expo and Congress Centre. Contact: Pieter Kannegieter (31) 30 2955 453. WEDNESDAY, SEPTEMBER 25 BERGEN, Norway - NATO defence ministers hold informal meeting (To September 26). END OF DOCUMENT. 7683 !G15 !GCAT **** HIGHLIGHTS **** DUBLIN - EU leaders hold special European Council (October). SINGAPORE - Inaugural World Trade Organisation (WTO) ministerial conference (December 9-13). DUBLIN - Irish Presidency European Council of heads of state and government (December 13-14). MONDAY, SEPTEMBER 9 BRUSSELS (MODIFIED ITEM) - ECOFIN Council is CANCELLED. BRUSSELS (EXPANDED ITEM) - EU Monetary Committee meets (To September 10). Main discussions on new ERM, budgetary stability pact and legal framework for the Euro. BRUSSELS - Euro-Mediterranean meeting on projects concerning cultural heritage (To September 10). BRUSSELS - European Newspaper Publishers Association (ENPA) holds conference on "Journalists and the world of politics, publishers and politicians" (1100/0900 GMT). Venue: Royal Crown Hotel. Contact: ENPA (322) 551 0190. DUBLIN - Stuart Eizenstat, U.S. special envoy named by U.S. President Bill Clinton to advise on Washington's Helm-Burton legislation, makes official visit. TUESDAY, SEPTEMBER 10 EDINBURGH - European Commission's DG XVI, Committee of the Regions and Scotland hold conference on land-use planning in the North Sea and Baltic regions. LUXEMBOURG - COURT OF JUSTICE, PLENARY COURT (0930/0730 GMT) - Judgment C-61/94 Commission v/ Germany: external relations. - Judgment C-222/94 Commission v/ United Kingdom: free movement of persons. - Judgment C-277/94 Z. Taflan-Met and others v/ Bestuur van de Sociale Verzekeringsbank: external relations. - Judgment C-11/95 Commission v/ Belgium: free movement of persons. - Oral procedure C-24/95 Land Rheinland-Pfalz v/ Alcan Deutschland GmbH: state aid. - (1100/0900 GMT) Oral procedure C-59/95 Francisco Bastos Moriana and others v/ Bundesanstalt fuer Arbeit: free movement of persons. - (1530/1330 GMT) Oral procedure C-169/95 Spain v/ Commission: state aid. BRUSSELS - Centre for European Policy Studies (CEPS) holds seminar on "NATO enlargement" (1315/1115 GMT). Speaker is Andras Simonyi, Ambassador and Head of Hungarian Liaison Mission with NATO and the Western European Union. Venue: Place du Congres, 1. Contact: CEPS (322) 229 3911. BUCHAREST (NEW ITEM) - Council of Europe and council for national minorities of Romania's government holds third annual meeting on "Governments and minorities" (To September 11). WEDNESDAY, SEPTEMBER 11 BRUSSELS - European Commission holds regular weekly meeting. Provisional agenda, liable to change, includes: - Commissioner Bjerregaard presents communication on production quotas for HCFCs. - Commissioner Neil Kinnock presents communication on an internal market in aviation. - Commission President Jacques Santer presents communication on public services. - Commissioner Christos Papoutsis presents communication on nuclear industries in the EU - indicative nuclear programme under article 40 of the Euratom treaty COM(96)339. - Commissioner Martin Bangemann presents communication on the proposal for an EP and Council directive on the application to voice telephony of the principle of open network provision and universal service for telecoms in a competitive environment. - Commissioner Sir Leon Brittan presents communication on the second phase of the integration of textile and clothing products under GATT. - Commission President Jacques Santer and Commissioners Yves-Thibault de Silguy and Mario Monti present communication on the legal framework for the use of the Euro. - Commission President Santer and Commissioner de Silguy present communication on Commission proposal on a budgetary stability pact. - Commissioner de Silguy presents communication on foreign exchange in the EU. LUXEMBOURG - COURT OF FIRST INSTANCE, SECOND CHAMBER - ENLARGED (0930/0730 GMT) - Oral procedure T-227/95 AssiDoman Kraft Products and others v/ Commission: competition. THURSDAY, SEPTEMBER 12 LUXEMBOURG - COURT OF JUSTICE, PLENARY COURT, FIRST CHAMBER (0930/0730 GMT) - Judgment joined cases C-58/95 Gallotti, C-75/95 Censi, C-112/95 Salmaggi, C-119/95 Pasquire, C-123/95 Zappone, C-135/95 Segna, C-140/95 Cervetti, C-141/95 Gasbarri, C-154/95 Narducci, C-157/95 Smaldone: environment and consumers. - Oral procedure C/241/95 The Queen, ex parte: Accrington Beef Co Ltd v/ Intervention Board for Agricultural Produce: commercial policy. THIRD CHAMBER (0930/0730 GMT) - Oral procedure C-255/95 S. Agri and others v/ Regione Veneto: agriculture. - (1030/0830 GMT) Oral procedure C-273/95 Impresa Agricola Buratti Leonardo, Pierluigi e Livio v/ Tabacchicoltori Associati Veneti Soc. coop. a.r.l. (TAV): agriculture. FIFTH CHAMBER (0930/0730 GMT) - Judgment C-251/94 Eduardo Lafuente Nieto v/ Instituto Nacional de Seguridad Social (INSS) and Tesoreria General de la Seguridad Social (TGSS): free movement of persons. - Judgment joined cases C-254/94, C/255/94, C-269/94 Fattoria autonoma tabacchi and others v/ Ministero dell'Agricoltura et delle Foreste and others: agriculture. - Judgment C-278/94 Commission v/ Belgium: free movement of persons. - Judgment C-236/95 Commission v/ Greece: company law. - Opinion C-340/94 E.J.M. de Jaeck v/ Staatssecretaris van Financieen: free movement of persons. - Opinion joined cases C-88/95, C-102/95 and C-103/95 Bernardina Martinez Losada and others v/ Instituto Nacional de Empleo (INEM), Instituto Nacional de la Seguridad Social (INSS): free movement of persons. - Opinion C-139/95 Livia Balestra v/ Istituto nazionale per la previdenza sociale (INPS): social policy. - (1530/1330 GMT) Phytheron International SA v/ Jean Bourdon SA: free movement of goods. SIXTH CHAMBER (0930/0730 GMT) - Opinion C-221/94 Commission v/ Luxembourg: approximation of legislation. - Opinion C-142/95-P Associazione agricoltori della provincia di Rovigo and others v/ Commission, Mauro Girello and Greguoldo Daniele: environment and consumers. - Opinion C-262/95 Commission v/ Germany: environment and consumers. - Opinion C-314/95 Commission v/ Italy: agriculture. - Oral procedure C-69/95 Italy v/ Commission: agriculture. COURT OF FIRST INSTANCE, FOURTH CHAMBER (0930/0730 GMT) - Oral procedure joined cases T-454/93, T-455/93, T-456/93 and T-457/93 Elders Trading Ltd and Paterson Elders (Produce) Ltd. and others v/ Commission: agriculture. BRUSSELS - Union of Industrial and Employee's Confederation of Europe (UNICE) hold press briefing on "Taxation in the EU" (1530/1330 GMT). Venue: UNICE, rue Joseph II. Contact: UNICE (322) 231 1445. BRUSSELS - Friends of the Earth Europe hold conference on "International biosafety" (To September 13). Topics include: the EU and international biosafety actions; experiences with international legislation on the transfer of potentially hazardous substances; north-south transfer of genetically modified organisms; legal instruments to be included in an international biosafety protocol, implementation and control. Venue: Palace Hotel. Contact: Friends of the Earth Europe (322) 542 0180. END OF DOCUMENT. 7684 !G15 !GCAT Please note that BC-DIARY-LONGTERM, transmitted this afternoon, now includes a provisional listing of councils under the Dutch presidency and European Parliament plenary and mini sessions to the end of December 1997. 7685 !G15 !GCAT * (Note - contents are displayed in reverse order to that in the printed Journal) * MINUTES OF THE SITTING OF FRIDAY, 22 MARCH 1996 (96/C 254/04) MINUTES OF THE SITTING OF WEDNESDAY, 20 MARCH 1996 (96/C 254/03) MINUTES OF THE SITTING OF TUESDAY, 19 MARCH 1996 (96/C 254/02) MINUTES OF THE SITTING OF MONDAY, 18 MARCH 1996 (96/C 254/01) END OF DOCUMENT. 7686 !G15 !GCAT * (Note - contents are displayed in reverse order to that in the printed Journal) * COMMISSION RECOMMENDATION of 30 July 1996 on the use of the Common Procurement Vocabulary (CPV) for describing the subject matter of public contracts (Text with EEA relevance) (96/527/EC) COMMISSION REGULATION (EC) No 1727/96 of 2 September 1996 establishing the standard import values for determining the entry price of certain fruit and vegetables COMMISSION REGULATION (EC) No 1726/96 of 2 September 1996 fixing, for August 1996, the specific agricultural conversion rate for the amount of the reimbursement of storage costs in the sugar sector COMMISSION REGULATION (EC) No 1725/96 of 2 September 1996 amending the import duties in the cereals sector COMMISSION REGULATION (EC) No 1724/96 of 2 September 1996 amending Regulation (EC) No 1179/96 increasing to 650 000 tonnes the quantity of barley held by the German intervention agency for which a standing invitation to tender for export has been opened END OF DOCUMENT. 7687 !GCAT !GDIS Damon Hill's abrupt exit notice from Williams typified decisions taken by the man in charge of the leading team in Formula One. Frank Williams, urbane, witty, multilingual and wheelchair-bound, has rarely allowed emotion to hinder his pursuit of success in grand prix racing. He possesses a ruthless streak when it comes to the cold-hearted business of winning. Personal feelings are unwanted intruders in his arena of technology, engineering and speed. Always known as a tough taskmaster, Williams became one of the great characters in motor sport through his hard work and incessant endeavour, particularly as he recovered from a devastating road accident in 1986 which left him severely disabled. Returning to the airport at Nice, France, his car plunged off the road. His injuries left him paralysed from the neck down, but his brain remained intact and as agile and piercing as ever. When his wife Virginia visited him in hospital for the first time after his accident, he was so detached that he was able to sweep his feelings aside. In her book about their life together, she wrote, after being told of his paralysis: "I told him that I thought they had said it was a possibility. There was a long silence. Hot tears streamed down my face. "Frank watched me, dry-eyed. He was so much braver than I was. As I fought to control my sobs he spoke to me again very clearly. "'Ginny, as I see it, I have had 40 fantastic years of one sort of life'. He paused and stared at me unblinking. Then, he said very slowly and deliberately: 'Now, I shall have another 40 years of a different kind of life'." It was a shaft of light which illuminated the character within Frank Williams, his outlook on life and his determination not only to live, but to continue working in motor racing. He believed in competition, sport and the pursuit of success. For him, nothing was more thrilling than to see his racing cars battling for victory. For Williams, it has always been the pursuit of the world constructors' championship that has mattered most. This explains why, after the weekend confirmation that leading world title candidate Hill was not being retained in 1997, there was little effort made by the team to offer excuses for what was a cold business decision. Williams has never cared for the drivers' crown or valued any driver's individual successes in pursuit of that goal. Since 1987, when Brazilian Nelson Piquet won his third world title while driving for Williams, he has made no effort to retain any of his champions and he has developed a reputation in the Formula One paddock as much for his ruthlessness as his ability to weld and motivate a top team. Piquet left in 1988 and in 1992, when Briton Nigel Mansell won the crown, he too ended up departing in uproar and acrimony for the Newman-Haas IndyCar team. A year later, Mansell's successor as number one driver, Frenchman Alain Prost, won his fourth championship with Williams. But he announced his retirement before he had clinched his success when he discovered that Williams had already signed Ayrton Senna for 1994. In his autobiography, Mansell said he had reached his decision to leave Williams with regret, but added that he half-expected Hill to end up facing the same problems. Mansell wrote: "I worked for Williams for six years and from the point of view of success we achieved an awful lot together. "But on a human level, that achievement seems to count for very little with them. I won more races and scored more points for Williams than anyone else, but they never seemed to appreciate or derive strength or satisfaction on a human level from what we did together, perhaps because the 'family' relationship that I wanted was beyond their scope or understanding. "Even today, the new drivers at Williams are finding that they are portrayed as greedy when they ask for more representative salaries. It is very sad, but some people are jealous of their success. "I believe that Damon Hill will probably find this, because they've given him a chance, picked him out of nowhere and made him successful, yet they will always want to control things." Mansell's words appear to have been borne out by these latest events, but will not influence Williams and the manner in which he operates his team. As one seasoned paddock observer said at the recent Hungarian Grand Prix: "Don't waste any tears or sympathy on Frank Williams because he wouldn't waste any on you." 7688 !GCAT !GSPO English rugby moved closer to all-out civil war on Tuesday when their top players opted to boycott a national training session, widening the rift between the Rugby Football Union (RFU) and its senior clubs. The 43-man squad have all indicated they will not turn up for the first session of the new season on Wednesday, agreeing instead to attend a meeting called by the English Professional Rugby Union Clubs (EPRUC) to discuss the current situation. All the players' RFU contracts ran out at the weekend, and EPRUC, who plan to split from the union and run their own competitions, have moved swiftly to grab the initiative. The clubs, who point out they are currently the players' sole employers, want more money and power in the new professional era and have declared they will set up as an independent organisation in October. EPRUC chairman Donald Kerr said: "The decision was rock-solid after the clubs had stated the case when players met for training over the last day or so. "The issue is not so much whether the players train with England but whether they support their clubs. "They are paid reasonable salaries by us and we are asking for their backing in this dispute. We have stuck our necks out for them. Now they are sticking their necks out for us." The major weapon held by the RFU would be banning the players from international consideration but, for the moment, Twickenham are holding that card in reserve. They claimed the session would go ahead, even if only the management turned up, but are now under serious fire from several sides. Barring a last-minute reprieve, England are expected to be ejected from the Five Nations championship next Monday following a row over television revenue and coach Jack Rowell now has no clear idea of who he can select or against whom the team will play. England are scheduled to play Italy in November and Argentina in December but, if the disputes with the clubs and the other Five Nations countries are not resolved, the top players may not be involved. Ironically, the most famous names in England did not have to make a decision. Will Carling, Jeremy Guscott, Rory Underwood and Dean Richards were all omitted from this squad, which contained a large number of young players. British Lions tour manager Fran Cotton issued an appeal for the warring factions to get together. The former England forward said: "I really do feel sorry for the players. They are becoming pig in the middle and all they want to do is play for their clubs and their country." "There are two issues here. The Rugby Union have to accept the need to restructure and change to cope with a new era and the clubs need to come to terms with the fact they are over-valuing their product. "The dispute is preventing the opportunity for the exciting development of rugby." Welsh first division clubs are also threatening to break away from their union to negotiate their own television and sponsorship deals. 7689 !GCAT !GSPO Several England rugby union players have indicated they will boycott a national squad training session on Wednesday in the continuing row between the Rugby Football Union (RFU) and its senior clubs. Leicester, who have four forwards in the 43-man squad, were the first to announce their international players would not be attending and others are expected to follow their example. The English Professional Rugby Union Clubs (EPRUC), who last week announced their intention to break away from the RFU, believe the majority of the squad will also side with the clubs, currently their sole employers. The players' RFU contracts ran out at the weekend, and EPRUC are clearly keen to put extra pressure on Twickenham to grant the clubs more money and a bigger say in the new professional era. Former England hooker and current Leicester chief executive Peter Wheeler said: "We didn't say to them `You will not go'. We told them the position as we saw it and left it up to them. They decided not to go." EPRUC chairman Donald Kerr commented: "The players are the key to this dispute. They are being paid reasonable salaries by their clubs and we are asking them to support us in this dispute," he said. The RFU issued a statement saying the date of the session had been confirmed in July and that it would go ahead. Don Rutherford, the RFU technical director said: "It would be very sad, with international rugby having moved to a higher level as seen in the southern hemisphere, if England's preparations were impinged upon at this stage." Wheeler said he hoped to have "a meaningful meeting" with the RFU before the end of the week. British Lions tour manager Fran Cotton appealed for the warring factions to get together. The former England forward said: "I really do feel sorry for the players. They are becoming pig in the middle and all they want to do is play for their clubs and their country." "There are two issues here. The Rugby Union have to accept the need to restructure and change to cope with a new era and the clubs need to come to terms with the fact they are over-valuing their product. "The dispute is preventing the opportunity for the exciting development of rugby." Welsh first division clubs are also threatening to break away from their union to negotiate their own television and sponsorship deals. 7690 !GCAT !GSPO Three English premier league soccer managers have been charged with bringing the game into disrepute, the national Football Association (FA) said on Tuesday. Graeme Souness of Southampton, Bryan Robson of Middlesbrough and Ron Atkinson of Coventry were all involved in rows with referees. Souness and Robson tangled in successive matches with referee Michael Riley in the official's first week in the premier league. Atkinson and his assistant Gordon Strachan were in trouble with referee Tony Green after Strachan, who still plays for Coventry, refused to leave the pitch after being ordered off for foul language in a reserve match against West Bromwich Albion. Referee Tony Green eventually restarted the match, without ex-Scotland international Strachan, after a 14-minute delay. Atkinson was charged for remarks he made to the referee in the dressing-room area after the incident. New Southampton manager Souness, a former Scotland international, was incensed by the dismissal of captain Barry Venison and shouted at Riley both at halftime and at the end of his club's 2-1 defeat at Leicester on August 21. Robson, former captain and assistant manager of England, lost his temper when Riley booked nine players and sent off Middlesbrough's Nigel Pearson in a 1-1 draw at Nottingham Forest on August 24. All have 14 days to answer the charges. The FA has also asked Atkinson and Strachan to explain incidents in a match at Chelsea on August 24 which Coventry lost 2-0. The pair were involved in angry touchline scenes over Chelsea's first goal, scored by Frank Leboeuf after Dan Petrescu was alleged to have handled. An FA spokesman said referee Paul Danson's report had raised the question of their conduct: "As a result we have written to them, asking them for their observations." Premier league newcomers Sunderland also face charges of contravening rules following allegations that they fielded a suspended player in a reserve team friendly. 7691 !GCAT !GSPO In 1994, FIFA general secretary Sepp Blatter urged national soccer coaches to stand up at a news conference and promise the world's media their "stars" would play fair at the World Cup. "That's easy," joked Roy Hodgson, coach of the Swiss side at the time. "I don't have any stars." How times have changed. When the Italian serie A season starts next weekend, Englishman Hodgson will find himself at the helm of an Inter Milan team laden with the world's best players. After a high-spending summer, Internazionale Milano Football Club is living up to its name, and has transformed itself into a truly international team. When Hodgson leads his men out at Udinese next Saturday, he will have chosen a team from eight nationalities and three continents. Chilean Ivan Zamorano and Nigerian Nwankwo Kanu lead the attack, ahead of Argentine Javier Zanetti, Dutchman Aron Winter, England's Paul Ince, France's Youri Djourkaeff and Swiss international playmaker Ciriaco Sforza, while French defender Jocelyn Angloma covers at the back. "At the moment the squad looks good," Hodgson, exercising his habitual understatement, told Reuters in an interview at Inter's training ground north of Milan. "As far as I'm concerned, we lack nothing. There's no player that I would really have liked that we haven't got. "This year we've improved the team, we've taken the type of players that we thought were lacking last year and our aim is to really be one of the main contenders for the title," he said. "More than that you can't be." Even when they dominated continental soccer in the mid-1960s, winning the European Cup in 1964 and 1965, Inter were never as cosmopolitan as they are now. The club still has top Italians such as strikers Marco Branca and Maurizio Ganz, but there could be times this season when they field only four home-grown players. Sforza, the 26-year-old who was central to Hodgson's Swiss team, could ultimately prove the most astute signing along with Angloma, who has already made himself indispensable. Zamorano, 31, "a strong bustling centre-forward" in Hodgson's words, has a wealth of experience as a leading goalscorer at Real Madrid, while Ince, Djourkaeff and Angloma are also mature internationals. "The only really young one is Kanu but he's just come from fantastic success and three years at the highest level," said Hodgson, referring to the player's European Cup win with Ajax and Olympic gold medal with the Nigerian team. As far as the fans and the club are concerned, Hodgson has the tools to take the "Neroazurri" (Blue-Blacks) back to the top in Italy for the first time since 1989. The club finished seventh in the league last season, scraping a UEFA Cup place only after Juventus won the European Cup and Fiorentina the Italian Cup. "This time it's the right Inter," declared the Gazzetta dello Sport after the new-look Inter twice beat Manchester United in friendlies. After being hailed as a saviour when he took over from Ottavio Bianchi last year, Hodgson knows the pressure is on. As club president Massimo Moratti clearly stated over the summer, he expects a return on his investment in the shape of the "Scudetto" (title shield), captured four times in the last five seasons by rivals AC Milan. Only five players remain from the 24 at Inter when Moratti took over in April 1995. "Now Hodgson has no excuses," said the Gazzetta after Sforza joined from Bayern Munich in August. "After a buying spree of some 40 billion lire ($24 million), if Inter do not win the title it will be hard to blame anyone other than the coach." Hodgson said his team would play in the same hard-working style as last season in their bid to keep pace with Milan and Juventus. "If we are in that group, as we hope to be, then I think that's as much as we can hope for at the moment. "If we are able to stay there for a couple of years, then I think we can win something. Because you don't necessarily win something you want to in the first year." 7692 !GCAT !GSPO Striker Dean Windass scored four goals in extra time to fire Scottish League Cup holders Aberdeen to a stunning 7-3 third-round victory over Greenock Morton on Tuesday. Aberdeen seemed to be heading for a comfortable win when they led 2-0 with 13 minutes remaining, only for the whole shape of the match to be suddenly transformed. First, referee Tom McCurry awarded a penalty after Aberdeen defender John Inglis brought down Scott McArthur, and Derek Lilley scored from the the spot. A minute later Greenock equalised through John Anderson and then seized the lead with a goal by Lilley three minutes from time. A dramatic 13-minute spell came to a climax with Aberdeen winger Joe Miller being floored in the penalty area and Billy Dodds putting the holders level with a last-minute spot kick to add to his two earlier goals. Windass then won the tie for Aberdeen in compelling style by scoring in the 104th, 109th, 111th and 117th minutes of extra time. 7693 !GCAT !GSPO Results of Scottish soccer matches on Tuesday: Division one East Fife 1 Clydebank 1 Scottish League Cup, third round Albion 0 Hibernian 2 Dundee United 2 Dundee 2 (after extra time. 90 mins: 2-2. Dundee won 4-2 on penalties) Greenock Morton 3 Aberdeen 7 (after extra time. 90 mins: 3-3) Partick 1 Airdrieonians 0 St Johnstone 1 Hearts 3 (after extra time. 90 mins: 1-1) 7694 !GCAT !GSPO Results of English soccer matches on Tuesday; Division one Manchester City 2 Charlton 1 Football League Cup first round, second leg Barnet 2 Exeter 0 (aggregate 6-0) Barnsley 2 Rochdale 0 (3-2) Blackpool 2 Scunthorpe 0 (3-2) Bournemouth 0 Ipswich 3 (1-5) Bradford 1 Sheffield United 2 (1-5) Bristol City 1 Torquay 0 (4-3) Burnley 2 Mansfield 0 (5-0) Bury 1 Notts County 0 (2-1) Cambridge 1 Hereford 1 (1-4) Chester 1 Carlisle 3 (1-4) Chesterfield 1 Stockport 2 (2-4) Crewe 1 Port Vale 5 (1-6) Fulham 1 Southend 2 (3-2) Gillingham 2 Swansea 0 (3-0) Grimsby 0 Oldham 1 (after extra time. 90 mins: 0-1, aggregate 1-1. Oldham won 6-5 on penalties) Lincoln 3 Hartlepool 2 (aggregate 5-4) Northampton 2 Cardiff 0 (2-1) Peterborough 2 Millwall 0 (after extra time. 90 mins: 1-0. aggregate 2-1) Plymouth 0 Brentford 0 (0-1) Preston 4 Wigan 4 (after extra time. 90 mins: 3-4. aggregate 7-6) Rotherham 0 Darlington 1 (0-2) Scarborough 3 Hull 2 (5-4) Tranmere 1 Shrewsbury 1 (3-1) Watford 2 Walsall 0 (2-1) West Bromwich 1 Colchester 3 (4-5) Wrexham 1 Huddersfield 2 (1-5) Wycombe 2 Reading 0 (3-1) York 2 Doncaster 0 (3-1) 7695 !GCAT !GSPO England newcomer Adam Hollioake and Australian pace bowler Brendon Julian combined to rescue title-chasing Surrey with hard-hitting centuries in the county championship on Tuesday. Hollioake hammered his hundred off 115 deliveries and Julian reached three figures in 141 balls, putting Northamptonshire to the sword in a seventh wicket stand of 181. They led a fightback which lifted Surrey from 147 for six to 378 for nine at the close on the first day of the four-day match at The Oval. Melbourne-born Hollioake, whose has lived in England long enough to have qualified for his impressive international debut in the weekend one-dayers against Pakistan, filled his 129 with a sequence of stunning shots. Hollioake lashed hit 14 fours, and hit two sixes off West Indies fast bowler Curtly Ambrose. He made his runs from 164 deliveries. Julian, who struck 14 fours and one six on the way to his century, finished with 117, his second hundred in first-class cricket. Fourth-placed Surrey, who went into the current round of matches 10 points behind leaders Kent with a game in hand, are among five sides still with realistic title ambitions in one of the most open championships for many seasons. With Kent not playing, second-placed Derbyshire swiftly closed the one-point gap at the top with a vigorous batting display to earn four bonus points on the first day against Somerset at Taunton. Opener Adrian Rollins led the way with 127 off 230 balls, hitting 19 fours, as Derbyshire punished a depleted Somerset attack to reach 389 for seven at the close, Rollins was effectively supported by England paceman Dominic Cork, who smashed 10 fours and a six in his 77, and ex-England seamer Phillip DeFreitas, whose 60 included three sixes. Third-placed Leicestershire, nine points adrift of the leaders, experienced mixed fortunes as Nottinghamshire recovered from 111 for five to end the day on 320 for nine at Trent Bridge. West Indian Phil Simmons, who took three for 64 with his medium pacers, helped to give Leicestershire the initiative before a sixth wicket stand of 117 between Kevin Evans (71) and Chris Tolley (40) restored Notts' fortunes. Essex, 13 points behind Kent in fifth spot, were dismissed for a moderate 238 by defending champions Warwickshire before hitting back late in the day at Edgbaston. Neil Williams snapped up two wickets and left-armer Mark Ilott took one as the new ball pair reduced Warwickshire to 14 for three at the close. All-rounder Ronnie Irani's 69 was the highest innings for Essex, leading a revival from 87 for five as seamer Gladstone Small captured his season's best of four for 41. West Indian all-rounder Vasbert Drakes blasted his maiden century for Sussex to haul his side out of trouble against Worcestershire at Worcester. Drakes scored 103 off 134 balls, hitting 16 fours and two sixes, which took Sussex from 64 for five to 219 all out. 7696 !GCAT !GSPO Close of play scores on the opening day of four-day English county championship cricket matches on Tuesday: At Southampton: Glamorgan 229-5 (S.James 103, H.Morris 80) v Hampshire. At Trent Bridge: Nottinghamshire 320-9 (K.Evans 71) v Leicestershire. At Taunton: Derbyshire 389-7 (A.Rollins 127, D.Cork 77. P.DeFreitas 60) v Somerset. At The Oval: Surrey 378-9 (A.Hollioake 129, B.Julian 117) v Northamptonshire. At Edgbaston: Essex 238 (R.Irani 69; G.Small 4-41). Warwickshire 14-3. At Worcester: Sussex 219 (V.Drakes 103). Worcestershire 109-2. At Old Trafford: Middlesex 160 (M.Watkinson 5-15; P.Martin 4-31). Lancashire 175-7. 7697 !GCAT !GSPO England's chairman of cricket selectors Ray Illingworth won his appeal against charges of bringing the game into disrepute on Tuesday. Illingworth had been found guilty last June of the charges whioh were brought over the content of newspaper articles taken from his controversial book "One-Man Committee". Consequently, former England captain llingworth was fined 2,000 pounds sterling ($3,122) by the Test and County Cricket Board (TCCB) discipline committee, plus 500 pounds ($780.5) costs. Illingworth's appeal was heard by a four-man Cricket Council appeal panel during a five-hour session at Lord's, after which his solicitor Michael Lawrence said that all charges had been dropped. Lawrence said: "The fine has been rescinded and the costs have gone as well. There was, in effect, a re-hearing today and it was perfectly conducted." Illingworth, who steps down as chairman of selectors next week, said: "I didn't want to leave the game with a disrepute charge hanging over me. As far as I'm concerned, my name has been cleared." Lawrence condemned the TCCB's original handling of the affair, which blew up principally because of Illingworth's criticism in print of fast bowler Devon Malcolm, with whom he had fallen out publicly during England's 1995-96 tour of South Africa. 7698 !GCAT !GSPO He has been known to mystify fans with his unique brand of philosophy, but Channel Tunnel train operator Eurostar believes soccer star Eric Cantona can pull in passengers with a series of obtuse television commercials. "Does the bird in a cage sing sweetly as the bird who is free?" the French striker, who plays for English champions Manchester United, muses in one of the series. Eurostar said on Tuesday the French striker would apply his perplexing blend of humour and metaphysics to the promotion of the launch on Sunday of its business class service. "The ads reflect the footballer's widely acknowledged interest in the arts generally as well as his sense of irony and humour. He appears as himself -- in the role of a French philosopher," Eurostar said in a statement. The self-styled poet and intellectual established his philosphical reputation last year after a successful appeal against a two-week jail sentence for a "kung-fu" kick attack on a football fan. He was sentenced instead to community service. "When seagulls follow the trawler, it is because they think that sardines will be thrown into the sea," Cantona inscrutably told reporters at the time. New "Cantonisms" to appear in the television and poster campaign being organised by the London advertising agency St Luke's include: -- On the service travelling direct from London to the centre of Paris and Brussels: "To truly see how the crow flies, one must sit on the train" and "Is it not simpler to leap the stream than to pause on each stepping stone?" -- On the lack of airport delays: "The expectation of departure should not be hindered by the ignominy of waiting" and "The man who is always on the move is often just travelling in circles." 7699 !GCAT !GSPO England soccer international Paul Gascoigne is backing an emergency appeal to help orphans in Moldova. Gascoigne, who played a World Cup qualifier in the Moldovan capital Chisinau on Sunday, was shocked by the plight of 200 girls living in the Casa de Coppii orphanage, where children are dying from extreme cold, malnutrition and neglect. He learned of the abandoned children during his stay in the former Soviet republic, where England beat Moldova 3-0 in the first match of their World Cup campaign. Gascoigne said on Tuesday: "We may have won in Moldova but the children are losing." There is no hot water in the orphanage and the children, aged between three and 16, live two or three to a bed. The European Children's Trust has launched an emergency appeal, aiming to raise at least 40,000 pounds sterling ($60,000) to prevent children dying from cold and hunger this winter. 7700 !GCAT !GSPO England's rugby union players may boycott a national squad training session on Wednesday in the continuing row between the Rugby Football Union (RFU) and its senior clubs. The players' contracts with the RFU expired at the weekend and Donald Kerr, chairman of the English Professional Rugby Union Clubs (EPRUC) who have announced their intention to break away from the union, admitted support for a boycott was being canvassed. "The players are the key to this dispute. They are being paid reasonable salaries by their clubs and we are asking them to support us in this dispute," he said. "We have stuck our necks out for them and it's their turn to stick their necks out for us. But we do not wish to put them in an invidious position and we know the RFU are threatening the players with losing their England places if they fail to attend." EPRUC are keen to put the RFU under pressure, but appear to have given up on further talks with Twickenham. "I have been asked to meet the president of the RFU, John Richardson, but there will be no more talks," said Kerr. "The old order is just not working and the new order has to come in." The big clubs want to be in charge of their own competitions, but money is also a major sticking point. The clubs state they need one million pounds ($1.56 million) from the union to run the professional game, but have been offered only 300,000 pounds ($468,000) each. 7701 !GCAT !GSPO Va'aiga Tuigamala has finally been granted a work permit to ensure he can make a rugby union comeback with London club Wasps. The 26-year-old Samoan, currently still playing league with Wigan in 1993, had originally been refused a permit on the grounds he had not played international rugby union in the last 18 months. His last match for the All Blacks was in 1993, but legal pressure has persuaded the government and the Rugby Football Union (RFU) to change their stance. "Inga Tuigamala has demonstrated he has been a truly outstanding rugby union player and is currently at international standard in rugby league," said an RFU spokesman. 7702 !GCAT !GSPO Former Australian Test batsman David Boon will join English county side Durham next season, cricket officials said on Tuesday. Boon, 35, signed a two-year contract after Durham's director of cricket Geoff Cook flew to Australia to clinch the deal, the club said. Boon retired from Test cricket last year after scoring 7,422 runs, including 21 centuries, in 107 Tests at an average of 43. He will take over as captain from Mike Roseberry, who resigned on Saturday with Durham bottom of both the English county championship and the Sunday league. Boon, currently captain of Tasmania, is expected in England in April, the club said. 7703 !GCAT !GSPO Coventry manager Ron Atkinson and player Gordon Strachan have been charged with bringing the game into disrepute after Strachan had a row with a referee last week, the English Football Association (FA) said on Tuesday. Former Scotland international Strachan, who is also Coventry's assistant manager, brought last Thursday's reserve game against West Bromwich Albion to a temporary halt when he refused to leave the pitch after being ordered off for foul language. The game was eventually restarted, without Strachan, after a 14-minute delay. Atkinson's charge relates to remarks the manager made to referee Tony Green in the dressing-room area after the incident. Both have 14 days to answer the charges. The FA has also asked Atkinson and Strachan to explain incidents in a match at Chelsea on August 24 which Coventry lost 2-0. The pair were involved in angry touchline scenes over Chelsea's first goal, scored by Frank Leboeuf after Dan Petrescu was alleged to have handled. An FA spokesman said referee Paul Danson's report had raised the question of their conduct: "As a result we have written to them, asking them for their observations." 7704 !GCAT !GSPO Damon Hill's abrupt exit notice from Williams typified decisions taken by the man in charge of the leading team in Formula One. Frank Williams, urbane, witty, multilingual and wheelchair-bound, has rarely allowed emotion to hinder his pursuit of success in grand prix racing. He possesses a ruthless streak when it comes to the cold-hearted business of winning. Personal feelings are unwanted intruders in his arena of technology, engineering and speed. Always known as a tough taskmaster, Williams became one of the great characters in motor sport through his hard work and incessant endeavour, particularly as he recovered from a devastating road accident in 1986 which left him severely disabled. Returning to the airport at Nice, France, his car plunged off the road. His injuries left him paralysed from the neck down, but his brain remained intact and as agile and piercing as ever. When his wife Virginia visited him in hospital for the first time after his accident, he was so detached that he was able to sweep his feelings aside. In her book about their life together, she wrote, after being told of his paralysis: "I told him that I thought they had said it was a possibility. There was a long silence. Hot tears streamed down my face. "Frank watched me, dry-eyed. He was so much braver than I was. As I fought to control my sobs he spoke to me again very clearly. "'Ginny, as I see it, I have had 40 fantastic years of one sort of life'. He paused and stared at me unblinking. Then, he said very slowly and deliberately: 'Now, I shall have another 40 years of a different kind of life'." It was a shaft of light which illuminated the character within Frank Williams, his outlook on life and his determination not only to live, but to continue working in motor racing. He believed in competition, sport and the pursuit of success. For him, nothing was more thrilling than to see his racing cars battling for victory. For Williams, it has always been the pursuit of the world constructors' championship that has mattered most. This explains why, after the weekend confirmation that leading world title candidate Hill was not being retained in 1997, there was little effort made by the team to offer excuses for what was a cold business decision. Williams has never cared for the drivers' crown or valued any driver's individual successes in pursuit of that goal. Since 1987, when Brazilian Nelson Piquet won his third world title while driving for Williams, he has made no effort to retain any of his champions and he has developed a reputation in the Formula One paddock as much for his ruthlessness as his ability to weld and motivate a top team. Piquet left in 1988 and in 1992, when Briton Nigel Mansell won the crown, he too ended up departing in uproar and acrimony for the Newman-Haas IndyCar team. A year later, Mansell's successor as number one driver, Frenchman Alain Prost, won his fourth championship with Williams. But he announced his retirement before he had clinched his success when he discovered that Williams had already signed Ayrton Senna for 1994. In his autobiography, Mansell said he had reached his decision to leave Williams with regret, but added that he half-expected Hill to end up facing the same problems. Mansell wrote: "I worked for Williams for six years and from the point of view of success we achieved an awful lot together. "But on a human level, that achievement seems to count for very little with them. I won more races and scored more points for Williams than anyone else, but they never seemed to appreciate or derive strength or satisfaction on a human level from what we did together, perhaps because the 'family' relationship that I wanted was beyond their scope or understanding. "Even today, the new drivers at Williams are finding that they are portrayed as greedy when they ask for more representative salaries. It is very sad, but some people are jealous of their success. "I believe that Damon Hill will probably find this, because they've given him a chance, picked him out of nowhere and made him successful, yet they will always want to control things." Mansell's words appear to have been borne out by these latest events, but will not influence Williams and the manner in which he operates his team. As one seasoned paddock observer said at the recent Hungarian Grand Prix: "Don't waste any tears or sympathy on Frank Williams because he wouldn't waste any on you." 7705 !GCAT !GSPO Damon Hill's abrupt exit notice from Williams typified decisions taken by the man in charge of the leading team in Formula One. Frank Williams, urbane, witty, multilingual and wheelchair-bound, has rarely allowed emotion to hinder his pursuit of success in grand prix racing. He possesses a ruthless streak when it comes to the cold-hearted business of winning. Personal feelings are unwanted intruders in his arena of technology, engineering and speed. Always known as a tough taskmaster, Williams became one of the great characters in motor sport through his hard work and incessant endeavour, particularly as he recovered from a devastating road accident in 1986 which left him severely disabled. Returning to the airport at Nice, France, his car plunged off the road. His injuries left him paralysed from the neck down, but his brain remained intact and as agile and piercing as ever. When his wife Virginia visited him in hospital for the first time after his accident, he was so detached that he was able to sweep his feelings aside. In her book about their life together, she wrote, after being told of his paralysis: "I told him that I thought they had said it was a possibility. There was a long silence. Hot tears streamed down my face. "Frank watched me, dry-eyed. He was so much braver than I was. As I fought to control my sobs he spoke to me again very clearly. "`Ginny, as I see it, I have had 40 fantastic years of one sort of life'. He paused and stared at me unblinking. Then, he said very slowly and deliberately: `Now, I shall have another 40 years of a different kind of life'." It was a shaft of light which illuminated the character within Frank Williams, his outlook on life and his determination not only to live, but to continue working in motor racing. He believed in competition, sport and the pursuit of success. For him, nothing was more thrilling than to see his racing cars battling for victory. For Williams, it has always been the pursuit of the world constructors' championship that has mattered most. This explains why, after the weekend confirmation that leading world title candidate Hill was not being retained in 1997, there was little effort made by the team to offer excuses for what was a cold business decision. Williams has never cared for the drivers' crown or valued any driver's individual successes in pursuit of that goal. Since 1987, when Brazilian Nelson Piquet won his third world title while driving for Williams, he has made no effort to retain any of his champions and he has developed a reputation in the Formula One paddock as much for his ruthlessness as his ability to weld and motivate a top team. Piquet left in 1988 and in 1992, when Briton Nigel Mansell won the crown, he too ended up departing in uproar and acrimony for the Newman-Haas IndyCar team. A year later, Mansell's successor as number one driver, Frenchman Alain Prost, won his fourth championship with Williams. But he announced his retirement before he had clinched his success when he discovered that Williams had already signed Ayrton Senna for 1994. In his autobiography, Mansell said he had reached his decision to leave Williams with regret, but added that he half-expected Hill to end up facing the same problems. Mansell wrote: "I worked for Williams for six years and from the point of view of success we achieved an awful lot together. "But on a human level, that achievement seems to count for very little with them. I won more races and scored more points for Williams than anyone else, but they never seemed to appreciate or derive strength or satisfaction on a human level from what we did together, perhaps because the `family' relationship that I wanted was beyond their scope or understanding. "Even today, the new drivers at Williams are finding that they are portrayed as greedy when they ask for more representative salaries. It is very sad, but some people are jealous of their success. "I believe that Damon Hill will probably find this, because they've given him a chance, picked him out of nowhere and made him successful, yet they will always want to control things." Mansell's words appear to have been borne out by these latest events, but will not influence Williams and the manner in which he operates his team. As one seasoned paddock observer said at the recent Hungarian Grand Prix: "Don't waste any tears or sympathy on Frank Williams because he wouldn't waste any on you." 7706 !GCAT !GSPO Just one year after winning the World Cup the Springboks are again struggling to shake off the sport's apartheid image. Rugby in South Africa was historically reviled by blacks as a white game, until the home team's victory in the World Cup final temporarily united the rainbow nation in an outpouring of triumph and patriotism. But during a bleak August the country's moderate Sports Minister Steve Tshwete accused rugby administrators of lacking commitment to bringing blacks into the game and Finance Minister Trevor Manuel openly cheered New Zealand's All Blacks. Apart from losing the whole-hearted support of the country, the national side has also lost a historic test series 2-1 against the New Zealand All Blacks, the team they beat in the World Cup final. The problems extended to the field when 29-year-old hooker Henry Tromp was selected for the August 3 test against Australia in the central town of Bloemfontein. Tromp is seen as representing the worst of the old South Africa after he and his father were convicted in 1992 of beating to death a 16-year-old black youth. The Tromps were found guilty of assault with intent to do grievous bodily harm and outrage at the incident increased when Henry served only nine months in prison. His selection reopened old wounds, which were exacerbated by the reappearance of the old orange, white and blue South African flag, associated with Afrikaners, at the Bloemfontein test. Springbok manager Morne du Plessis issued a statement in the name of the team condemning those fans who had carried the flag but captain Francois Pienaar then told Afrikaans radio: "The crowds will be welcome even if they bring the old flag." The stony silence of the South African Rugby Football Union's (SARFU) unpopular president, Louis Luyt, on all the issues fuelled the belief that the game, unlike cricket, was happy to turn its back on the new South Africa. Rugby administrators, desperate to defuse the growing anger, are now on the defensive, handing out cash and organising compulsory coaching sessions for the Springboks in previously disadvantaged areas. Late in August, the Springboks returned to Soweto, where they had staged coaching sessions before the Cup final. Rugby is not a major sport in Soweto, despite its population of four million. South Africa's largest black township supports only one rugby club although the tradition of the game in the area goes back to 1935. Cash provided by SARFU has helped to grass the pitch in the past year and an 80,000-rand ($17,700) clubhouse is nearing completion. "I don't care if people accuse us of window-dressing," du Plessis told Reuters. "The money for this field was donated a year ago when we were last in Soweto. If the critics were really sincere they should say `well, let's give them that -- they are actually standing on grass that they helped to plant'. "For the hour that these youngsters are having here there is laughter and there is great joy. Is that not enough? For me that is already enough." SARFU's development programme has gained momentum in 1996 with 15 million rand ($3.3 million) spent on projects in black and mixed-race areas. Another 20 development officers have been assigned in addition to the 23 already on the job and building work has begun on 42 township sports facilities. A "club aid" scheme was also devised to provide 20,000-rand grants to 20 rugby clubs in underprivileged areas and 10 teenaged black players spent a week with the Springboks in a programme called "rising stars". But the accusation that it is merely superficial change continues to stick with Edwards Griffiths, sacked as SARFU chief executive, claiming that the game is living in the past. "Rugby's Nelson Mandela is still in prison," he said, in a reference to the President who donned a Springbok shirt at the World Cup final in a gesture of reconciliation. Sas Bailey, SARFU`S development general manager, disputes Griffiths's allegation. "Sean Plaatjies, a coloured (mixed-race) boy, was selected on merit to captain the S.A. Schools under-19 side -- the first non-white ever to captain a South African merit side," he said. In Soweto soccer holds sway over the sporting imagination and SARFU's task is akin to launching a rugby programme on the basketball courts of Harlem in New York. But Charl Beukes, a white rugby enthusiast and a founding member of the Soweto Rugby Development Trust, believes there is an untapped enthusiasm for the game in the black community. "The enthusiasm for rugby is incredible. It's really easy to get people playing," he said. "A player from Soweto will be in the Springbok side sooner than you think." 7707 !GCAT !GSPO Spartan Romanian stadiums will get temporary floodlights for two European soccer clashes next week, local officials said on Tuesday. A Swiss television company, which plans to show the Rapid Bucharest v Karlsruhe match and the Gloria Bistrita v Fiorentina game, had offered to provide lights to allow the matches to be staged in the evening, they said. Neither Rapid's stadium in Bucharest nor Gloria's in central Transylvania has floodlights. Rapid Bucharest are playing in the UEFA Cup first round against German side Karlsruhe on September 11 and Gloria Bistrita face Italy's Fiorentina in the Cup Winners' Cup less than 24 hours later. The two stadiums are 425 kms apart but Bistrita club president Ioan Horoba said he was optimistic that there would be no problems on Romania's notoriously bad roads to delay the four lighting trucks which require six hours to set up. 7708 !GCAT !GSPO Sponsors will ship mobile floodlights to spartan Romanian stadiums next week to help them televise German and Italian clubs playing in european soccer competitions, local officials said on Tuesday. Romanian soccer clubs Rapid Bucharest and Gloria Bistrita have agreed to reschedule afternoon clashes with Karlsruhe and Fiorentina to the evening to allow Swiss company Telesport to beam the matchs back to Western Europe. Neither Rapid's stadium in the capital city of Bucharest nor Gloria's stadium in central Transylvania are equipped with floodlights. "Our sponsor from Telesport will bring portable night lights from Switzerland, first to Bucharest and than to Bistrita," said Bistrita club president Ioan Horoba. Rapid Bucharest are playing in the UEFA Cup first round against German side Karlsruhe while Gloria Bistrita face Italy's Fiorentina in the Cup Winners Cup. The two stadiums are 425km (265 miles) apart and the two matches follow within less than 24 hours of each other. But Horoba was optimistic there would be no problems with Romania's notorious roads that would delay the four lighting trucks, which require six hours to set up. 7709 !GCAT !GSPO Los Angeles Lakers rookie guard Kobe Bryant, who came to the NBA straight from high school, broke his left wrist in a pick-up game Monday and will miss the start of training camp. The team announced the diagnosis Tuesday after Bryant was examined at a clinic in Los Angeles. Training camp begins in early October. Bryant is expected to be unable to play for at least six weeks. The 18-year-old Bryant was chosen 13th overall by the Charlotte Hornets, who traded him to the Lakers July 11 for centre Vlade Divac. Bryant signed a three-year, $3.48 million contract on July 24th and averaged 25 points per game in the team's Summer Pro League. The 6-foot-6 (1.98 metres) son of former NBA player Joe Bryant was one of two high schoolers selected in the first round of this year's draft. He averaged 30.8 points, 12 rebounds and 6.5 assists per game last season at Lower Merion High School in Pennsylvania. He is the shortest player to make the jump from high school to the NBA. 7710 !GCAT !GSPO The Stefan Edberg Grand Slam farewell bandwagon rolled into the quarter-finals at the U.S. Open on Tuesday. Facing the best homegrown British tennis player to come along in more than a generation, Edberg, 30, called on his vast Grand Slam experience to get past 21-year-old Tim Henman 6-7 7-6 6-4 6-4 in a struggle that lasted for three hours and five minutes. "I'm happy to come through to the quarters and have a day off," said Edberg, who last reached the U.S. Open quarter-finals in 1992, the year he won the second of his consecutive titles, and who has announced this will be his last Grand Slam. "Now starts the really tough matches," he said after delighting fans who cheered his every winner and gasped at his miscues. The first of his "really tough" matches will come against fourth seed Goran Ivanisevic, who declared himself a title threat after unleashing another 20 aces in a 6-4 3-6 6-3 7-6 fourth-round win over Andrei Medvedev of Ukraine. "Whoever wants to beat me has to play unbelievable," said the fiery two-time Wimbledon runner-up who had lost in the first round here the past two years. "This is my best tournament ever here and now anything is possible, even winning," said the confident Croatian. Henman, who became the darling of Wimbledon fans on reaching the quarter-finals this year, also appears to have the strokes to win here someday. But Edberg, playing his 54th and final major, imposed his will and his athletic serve-and-volley game on Henman to keep his inspirational run alive and raise his career record against British players to 9-0. Edberg thrilled the partisan crowd with his stabbing, leaping and lunging volleys and with his uncanny escape artistry as he staved off 13 of Henman's 15 break opportunities. Henman admitted that he would have liked to have gone home as the player who ended Edberg's illustrious Grand Slam career. "You know, it wasn't to be," he said. "I still think I can reflect on a very good tournament, another positive step in my career," said Henman, who upset 12th seed Todd Martin to reach the fourth round. "Stefan's obviously at the end of his and hopefully I'm at the beginning of mine." Edberg lost his chance at a straight-sets win when he let Henman break him while serving for the first set at 5-4. He didn't allow Henman to convert another break point until the fourth set. But the Briton jumped on Edberg's serve early in the first tie-break to grab a 4-0 lead and took it 7-2. "I had control of the first set and I let it slip, let him back in," said the Swede, who makes his home in London and has practised with Henman back home. "As the match went on I played some pretty good tennis," added Edberg, who saved five break points in the first game of the second set to steal back the momentum. "Maybe if I could have taken one of those, the momentum would have really swung my way," Henman said. Edberg played some of his most inspired tennis in the second tie-break. To get to 6-2 in the breaker, Edberg hit a perfect defensive lob to stay alive and ran down an apparent Henman winner, getting off an incredible backhand winner down the line. "That's what it takes to win tennis matches. That was one of the great points. "It's so important to have these points when you lift your game and get the shots that are impossible," Edberg said. The tight third set went on serve until Edberg finally broke through in the ninth game. The service break for 5-4 energised Edberg and he raced off the court as if he were the one playing on 21-year-old legs. "I suddenly just broke him from nowhere and served out the set and then it's a different ball game," said the soft-spoken Swede. Edberg parlayed that lift into a service break in the first game of the final set. But Henman was not ready to fold up the tent and go home as he broke Edberg for the second and last time in the fourth game to put it back on serve at 2-2. In the eighth game, however, Edberg raised his play beyond Henman's reach. He reeled off the final 12 points of the match, ending it with his 10th ace, and thrust his fists into the air as the crowd roared its approval. "Today was hard work, I gutsed my way through," said Edberg. "Now is the time you need to raise your game and be out there and be hungry." 7711 !GCAT !GSPO Los Angeles Dodgers centre fielder Brett Butler, after months of hard work and radiation treatment to recover from cancer, said Tuesday he will be in the lineup Friday when the Dodgers host the Pittsburgh Pirates. "I know it hasn't been announced yet, but I will be in the lineup," Butler, 38, told ESPN Radio. Butler, who underwent tonsil cancer surgery on May 21, has been in uniform and seated with the team in the dugout since it began an East Coast road trip at Montreal's Olympic Stadium August 26. Butler's cancer, found during a tonsillectomy, was in just one of his 50 lymph nodes. It was extracted on May 1. Butler also received 32 radiation treatments, then had to undergo a rigorous training programme to regain his playing weight and conditioning. Butler is hitting .265 with seven runs batted in and seven stolen bases in 29 games this season. He is on the disabled list for just the second time in his 16-year career. In his absence, Los Angeles tried Roger Cedeno in centre field, then traded with the Detroit Tigers for Chad Curtis. Curtis and Todd Hollandsworth have manned Butler's customary leadoff spot in the batting order. A career .291 hitter, Butler has 2,274 career hits and 542 stolen bases. 7712 !GCAT !GSPO After nearly giving away the first set, Conchita Martinez stormed back to claim the first semifinal berth at the U.S. Open on Tuesday with a 7-6 6-0 win over American Linda Wild. The fourth-seeded Spaniard at times appeared a bit thrown off by Wild's high loopy offspeed topspin shots in the one-hour first set. But she had it all figured out by the 24-minute second set. "I feel very confident this U.S. Open. I haven't had my best year but I hope that will change in the semis," said Martinez, who was stopped in the semifinals of all four Grand Slams last year. The first-set was a battle of shifting momentum with each player seizing the advantage before squandering a lead. Wild, who had played one of the best matches of her career in knocking out Olympic champion Lindsay Davenport in the previous round, jumped out to a 4-2 lead only to watch the Spaniard pull ahead 5-4. Martinez then reached triple set point at 0-40 on Wild's serve, but let them all slip away as the American held before sending the set went into a tie-break. This time it was Wild's turn to falter as she built a commanding 5-2 tie-break lead with a perfect lob and reached her own triple set point at 6-3. Instead of seizing the moment, Wild tightened up as Martinez chipped away, running off the next five points to take the set. "I just wanted to hit a winner and get it over with," said the 32nd-ranked Wild. "I think I just rushed too much." The Spaniard simply steamrolled the demorolized American in the second set as she cut her errors down from 18 in the opener to a near perfect three in the second set. "What was going through my mind was just keep fighting," said Martinez of facing triple set point in the breaker. "I knew I had three set points before she did. She came back. If you keep fighting, you can always come back," said Martinez. The fourth seed will learn her semifinal opponent on Tuesday night, though she will likely have to prepare for a battle with two-time champion Monica Seles. The second-seeded Seles takes on South African Amanda Coetzer, who ousted sixth seed Anke Huber in the opening round, in Tuesday's opening night match. The other two semifinal slots will be decided on Wednesday when top seed and defending champion Steffi Graf takes on Austrian Judith Wiesner, and 16th-seeded Swiss teen sensation Martina Hingis faces seventh-seeded Czech Jana Novotna. 7713 !GCAT !GSPO Goran Ivanisevic had become so accustomed to early exits at the U.S. Open that when he arrived at the National Tennis Centre on Tuesday, he had to remind himself why he had come. "Today when I came, I said 'What are you doing here?' Then I said, 'Okay, you play'," he joked. "Usually I was coming here to pick up my prize money," he said of his second-week experiences at eight previous U.S. Opens. This time around the fourth-seeded Ivanisevic finds himself alive and well in the quarter-finals after a 6-4 3-6 6-3 7-6 fourth-round win over Andrei Medvedev on a sun-baked Stadium Court. And as the victories and the aces have piled up for the fireballing Croatian, his confidence has soared. "I mean, now anything is possible, even winning," said Ivanisevic, twice a Wimbledon finalist. "I can do now a lot of good things here. Now it is just luck and keep my mind. If I do that, it can be good, I don't know how good, but we see," added Ivanisevic, who can be picked out from a distance as the player who has his cap on backwards. For Ivanisevic to keep rolling, however, he knows he will have to control his volatile temper. A few questionable calls Tuesday brought the Croatian's wrath down on the chair upmire, but he was sincerely contrite about his outbursts after the battle was won. "I just lose my mind a little," he said in explaining his occasional tirades. "If you want to win this thing, you have to stay cool. I say stupid things that I don't mean during the match," he said. Medvedev, who was burned by 20 aces and managed to convert just one of nine break opportunities, warned that others who face Ivanisevic should be prepared to suffer a similar fate. "If he keeps playing like this, he has a good chance to win." 7714 !GCAT !GSPO Fourth seed Goran Ivanisevic earned his first taste of a U.S. Open quarter-final with a hard-fought fourth-round win over Andrei Medvedev on Tuesday and is suddenly feeling like a title threat. The Croatian backed up his big serve -- piling up another 20 aces -- with solid groundstrokes to hold off the tough Ukrainian 6-4 3-6 6-4 7-6 on a hot and hazy late summer day at the National Tennis Centre. Ivanisevic, who had lost in the first round the past two years and had never been past the fourth, came into the Open just hoping to survive the first week. After a match in which he was able to raise his game on nearly all the crucial points, however, the lanky Croatian is oozing confidence and finally feeling he can live up to his seeding. "I'm playing better and better every match. Whoever wants to beat me has to play unbelievable," said the fiery two-time Wimbledon runner-up. "I'm very happy that I reached the quarter-finals. This is my best tournament ever here and now anything is possible, even winning." Also advancing was Alex Corretja, becoming the second unseeded Spaniard to reach the quarter-finals after a surprising Javier Sanchez grabbed a final-eight berth on Monday. The 21-year-old Corretja, who gave Andre Agassi a tough match here last year, beat veteran Frenchman Guy Forget for the second time in three weeks, 6-4 6-3 7-6. Ivanisevic was on fire early in the year, reaching the final of seven of his first nine tournaments. But it was Medvedev who came in hot after winning the Hamlet Cup the week before the Open. Still, Medvedev confessed to being a bit tight in his first match on the Stadium Court. "Overall I played okay but not well enough to win the big tournament," said Medvedev, a former top-10 player making a comeback from an injury-plagued year. "He's a great player and he played very well today. He deserves the credit," Medvedev said of the fourth seed. Ivanisevic dropped his serve just once -- in the second game of the second set -- and it ultimately cost him the set. But he faced break points on eight other occasions and saved them all, including one at set point in the 10th game of the fourth set to level it at 5-5 and propel it into the tie-break. "I served very good every time he had a break point," said the emotional Ivanisevic, who had several contentious moments with line judges and the chair umpire. "I just lose my mind a little," he said of one such tirade. But rather then let those moments rattle him, Ivanisevic used the heightened emotions to fire himself up, usually winning the next point. He forced the tie-break with his 20th ace, a 128 mile per hour (206 kph) screamer, and then dominated the breaker 7-2, allowing Medvedev to win just one of his own service points. "It was very tough for both of us mentally and I came through," said a proud Ivanisevic. "In the end, I came up with the better shots when I needed them." 7715 !GCAT !GSPO Results from the U.S. Open Tennis Championships at the National Tennis Centre on Tuesday (prefix number denotes seeding): Men's singles, fourth round 4-Goran Ivanisevic (Croatia) beat Andrei Medvedev (Ukraine) 6-4 3-6 6-3 7-6 (7-2) Alex Corretja (Spain) beat Guy Forget (France) 6-4 6-3 7-6 (7-5) Stefan Edberg (Sweden) beat Tim Henman (Britain) 6-7 (2-7) 7-6 (7-2) 6-4 6-4 Women's singles, quarter-finals 4-Conchita Martinez (Spain) beat Linda Wild (U.S.) 7-6 (8-6) 6-0 2-Monica Seles (U.S.) beat Amanda Coetzer (South Africa) 6-0 6-3 Women's doubles, quarter-finals 4-Martina Hingis (Switzerland) and Helena Sukova (Czech Republic) beat Patricia Hy-Boulais (Canada) and Rosalyn Nideffer (U.S.) 6-4 6-4 6-Lori McNeil (U.S.) and Gabriela Sabatini (Argentina) beat 5-Nicole Arendt (U.S.) and Manon Bollegraf (Netherlands) 4-6 6-3 7-5 1-Jana Novotna (Czech Republic) and Arantxa Sanchez Vicario (Spain) beat Anna Kournikova and Elena Likhovtseva (Russia) 7-5 6-2 Men's doubles, quarter-finals 4-Jacco Eltingh and Paul Haarhuis (Netherlands) beat 15-Trevor Kronemann (U.S.) and David Macpherson (Australia) 7-5 6-7 (5-7) 6-2 1-Todd Woodbridge and Mark Woodforde (Australia) beat 7-Sebastian Lareau (Canada) and Alex O'Brien (U.S.) 6-3 7-5 4-Guy Forget (France) and Jakob Hlasek (Switzerland) beat 12-Luis Lobo (Argentina) and Javier Sanchez (Spain) 6-7 (4-7) 7-6 (8-6) 7-6 (7-2) Mixed Doubles, quarter-finals Martina Hingis (Switzerland) and Christo van Rensburg (South Africa) beat 7-Rennae Stubbs and Joshua Eagle (Australia) 6-4 3-6 6-3 : Add men's singles, fourth round 1-Pete Sampras (U.S.) beat Mark Philippoussis (Australia) 6-3 6-3 6-4 7716 !GCAT !GSPO The 1997 Fed Cup World Group semifinals will take place July 12 and 13 with the final to be contested on October 4 and 5, a U.S. Tennis Association spokeswoman confirmed on Tuesday. The International Tennis Federation (ITF) had included incorrect dates for the final two rounds in its press kit issued at Saturday's draw ceremony. The first-round dates remain March 1-2 as originally issued by the ITF. The 1996 final between Cup holders Spain and the United States is set for September 28 and 29 in Atlantic City. 7717 !GCAT !GSPO The Chicago Bears crushed the defending Super Bowl champion Dallas Cowboys 22-6 on Monday night, but the Cowboys had much greater concerns than the game's final score. Pro Bowl running back Emmitt Smith was carted off the field at Chicago after suffering an apparent head or neck injury with 3:41 remaining. Smith, the Super Bowl 28 Most Valuable Player, dove into the line of scrimmage on a play-action fake and reportedly landed on his head. Smith stayed on the field for several minutes while physicians and paramedics immobilized his head and neck. A team official told television reporters that Smith felt a sharp pain through his back, though he was able to move all of his extremities. Bears linebacker and ex-teammate Vinson Smith was on the field for the play and remained close to Smith while he was receiving attention. "I was very sad," said Vinson. "I stood there and waited until I knew he was all right. When he was speaking and when he was moving everything.... Emmitt is a very important person to me, he's a good friend. I hate to see good friends get hurt, but he's OK, and he let me know that." Smith finished with 70 yards on 18 carries. Accompanied by Cowboys' owner Jerry Jones, Smith was taken by ambulance to Chicago's Northwestern Memorial Hospital, where he will be held overnight for observation. "Tonight, we got beat by a good team," Smith said in a statement issued by the team. "I don't see this loss as the end of the season." But it was a humbling loss. Linebacker Bryan Cox recovered a fumble in the end zone and Carlos Huerta kicked three field goals for the Bears. Huerta booted field goals of 42 and 34 yards in a 2:08 span in the fourth quarter to extend Chicago's lead to 16-3 with 9:48 remaining. On the ensuing possession, Cowboys quarterback Troy Aikman was hit by cornerback Kevin Miniefield as he tried to throw and the ball rolled into the end zone, where Cox, an off-season free-agent acquisition, pounced on it to give Chicago a 22-3 lead with 8:47 left. The Bears took the lead for good when wide receiver Curtis Conway hooked up with Raymont Harris on a 33-yard TD pass. Conway took a handoff from Eric Kramer and threw a pass down the left sideline to Harris, who came back to the underthrown ball, caught it and fell into the end zone for 33-yard scoring play with 3:31 left in the half. Deion Sanders saw extensive action playing both wide receiver and cornerback for the Cowboys. He was on the field for 106 plays, catching nine passes for 87 yards. Sanders fumbled while trying for extra yards on one reception in the fourth quarter, setting up Huerta's third field goal. Chris Boniol kicked two field goals for Dallas. The Cowboys already are without suspended wide receiver Michael Irvin and injured tight end Jay Novacek. 7718 !GCAT !GSPO Willie McGee singled home Ozzie Smith with two out in the bottom of the 10th inning as the St. Louis Cardinals rallied from a four-run deficit on Monday to defeat Houston 8-7 and move within a half-game of the first-place Astros in the N.L. Central. "It was just a hellacious ballgame on both sides," Cardinals manager Tony LaRussa said. "It just makes the race tighter and makes it more fun for all of us." Alan Benes (13-8) faced two batters, walking one and striking out one in his first major-league relief appearance. Houston jumped on starter Donovan Osborne in the first. Jeff Bagwell and Sean Berry delivered RBI doubles and James Mouton singled home a run to make it 3-0. The Cards scored in the bottom half on McGee's RBI single and tied it in the second on Osborne's RBI double and an RBI ground out by Smith, who drove in three runs and scored four. The Astros chased Osborne with a four-run fourth. Sean Berry led off with his 14th homer, Ricky Gutierrez delievered an RBI single and Bagwell smacked a two-run double. St. Louis answered in the bottom of the inning on Smith's two-run homer, just his fifth career blast from the left side of the plate, and McGee's RBI single in the sixth. In Philadelphia, Fernando Valenzuela allowed six hits over seven shutout innings for his seventh straight win and Wally Joyner drove in three runs as the San Diego Padres beat the Phillies 5-1 and maintained their one-game lead over the second-place Los Angeles Dodgers in the N.L. West. Valenzuela (12-7) walked two and struck out two as he improved 7-0 with a 2.52 ERA in his last nine starts. The Padres struck for three runs in the first inning against starter Rich Hunter (2-5) who gave up a two-run single to Joyner and a sacrifice fly to John Flaherty. Hunter gave up five runs and six hits over three innings. In New York, Todd Hollandsworth's go-ahead, two-run homer in the seventh and Pedro Astacio's strong pitching lifted Los Angeles over the Mets 8-5 maintained the Dodgers' half-game lead over the Montreal Expos in the N.L. wild-card race. L.A.'s Eric Karros added a two-run homer in the eighth. Astacio (9-7) won his fifth straight game, allowing three runs, six hits and four walks in six innings. Todd Worrell pitched a scoreless ninth for his franchise-record 38th save. Todd Hundley hit his 39th homer for the Mets, tying a club record hit by Darryl Strawberry in 1987 and 1988. In Montreal, F.P. Santangelo's sacrifice fly and Lenny Webster's RBI single in the bottom of the 11th inning rallied the Expos to a 4-3 victory over the San Francisco Giants. The Giants had taken the lead in the top of the inning when Marvin Bernard hit a grounder up the middle that Mike Lansing fielded behind second base and threw over the head of first baseman Dave McCarty, allowing Jacob Cruz to score. Barry Bonds hit his 36th homer for the Giants, whose closer Rod Beck fell to 0-8. Mark Grudzielanek went 4-for-5 for Montreal and Barry Manuel (3-1) earned the win in relief. In Pittsburgh, Dante Bichette homered and drove in four runs and Kevin Ritz allowed three runs in seven innings and also hit his first career homer as the Colorado Rockies stopped their four-game losing skid, beating the Pirates 8-3. Vinny Castilla, Ritz and Walt Weiss hit solo homers in the third, and Bichette's three-run homer in the eighth turned a 5-3 lead into a five-run game. Ritz (14-10) allowed two earned runs 7719 !GCAT !GSPO David Cone made a stunning return from a four-month absence caused by an aneurysm in his right shoulder, pitching seven hitless innings as the New York Yankees came within two outs of a combined no-hitter in a 5-0 one-hit victory over the Oakland Athletics on Monday. Cone (5-1), who last pitched on May 2 and underwent surgery eight days later, was kept to a 100-pitch limit. Cone faced just two batters over the minimum in seven innings, striking out six and walking three with 85 pitches. "It did surprise me," Cone said of the no-hit bid. "I was really struggling. I did not have a feel for anything. The first five pitches weren't even close. Towards the middle innings, I started to relax." Mariano Rivera set down the side in order in the eighth and got the first out in the ninth before Jose Herrera's infield single ended the bid for New York's first combined no-hitter in franchise history. The Yanks scored first when Ariel Prieto (4-7) hit Cecil Fielder with a pitch with the bases loaded in the fifth. Charlie Hayes hit a solo homer before Derek Jeter and Bernie Williams added run-scoring singles in the sixth, before Fielder's long homer off Buddy Groom, making it 5-0. In Seattle, Mike Greenwell drove in a career-high nine runs, including two homers and the go-ahead tally with an RBI single in the 10th inning, as the resurgent Boston Red Sox overcame a 5-0 deficit to defeat the Mariners 9-8. Greenwell broke the major-league record for most runs driven in while driving in all his teams' runs. The Red Sox, on a 22-7 run, closed within 2 1/2 games of the Baltimore Orioles and the Chicago White Sox in the A.L. wild-card race. Seattle is two games off the pace. Heathcliff Slocumb (3-5) pitched 2 1/3 scoreless innings for the win. In Milwaukee, Jose Valentin's two-out single scored John Jaha with the winning run as the Brewers rallied for two runs in the bottom of the ninth inning and a 7-6 victory over the Cleveland Indians. Earlier in the inning Cleveland closer Jose Mesa (2-5) uncorked a pitch that sailed to the screen, allowing David Hulse to score the tying run. In the top half, Albert Belle doubled in the top of the ninth with one out and scored on a single by Julio Franco. Omar Vizquel and Jaha each homered for Clevelend, which let a 5-1 lead slip away. In Chicago, Travis Fryman's three-run homer off Roberto Hernandez (6-2) with two out in the top of the ninth lifted the Detroit Tigers to an 8-6 victory over the White Sox, who had their four-game winning streak snapped. Mike Myers (1-5) retired the only two batters he faced in the eighth to post the win. Jose Lima pitched a perfect ninth for his third save. Harold Baines hit his 21st homer for Chicago. Phil Nevin and Mark Lewis homered for the Tigers. In Toronto, Tim Belcher pitched a four-hitter for his first shutout in three years and Jon Nunnally homered in the fourth inning as the Kansas City Royals beat Blue Jays 2-0. Belcher (13-8), walked none and struck out five for his 17th career shutout. He retired the first 11 batters before Joe Carter singled with two out in the fourth. Erik Hanson (11-16) took the major-league lead in losses, allowing six hits and two walks with six strikeouts. The Royals added an insurance run in the sixth as Jose Offerman led off with a single, stole second and later scored when Keith Lockhart grounded into a double play. In Texas, Chuck Knoblauch led off the game with a homer for the second time in as many days and Matt Walbeck added two hits and two RBI as the Minnesota Twins beat the Rangers 6-4. Knoblauch hit the fourth pitch from starter Ken Hill (14-8) over the left-field fence for his 12th homer. Rick Aguilera (7-7) got the win, despite allowing three runs and eight hits in five innings with five walks. Eddie Guardado limited Texas to one hit and a walk over the final two innings for his fourth save. Hill pitched six-plus innings allowing six runs and 10 hits with five walks and two strikeouts. At California, Chris Hoiles and Brady Anderson each homered and drove in three runs and Mike Mussina pitched seven innings to become the second 18-game winner in the league as the Baltimore Orioles held off the Angels 12-8. Mussina (18-9) allowed four runs and six hits with two walks and eight strikeouts. The Orioles remained four games behind the Yankees atop the East and one game behind the White Sox for the wild card. Todd Zeile hit his first two homers as an Oriole and Bobby Bonilla hit his fifth homer in as many games. Shawn Boskie (12-8) gave up seven runs in three innings. 7720 !GCAT !GSPO Major League Baseball standings after games played on Monday (tabulate under won, lost, winning percentage and games behind): AMERICAN LEAGUE EASTERN DIVISION W L PCT GB NEW YORK 77 60 .562 - BALTIMORE 73 64 .533 4 BOSTON 71 67 .514 6 1/2 TORONTO 63 75 .457 14 1/2 DETROIT 50 88 .362 27 1/2 CENTRAL DIVISION CLEVELAND 81 56 .591 - CHICAGO 74 65 .532 8 MINNESOTA 69 69 .500 12 1/2 MILWAUKEE 67 72 .482 15 KANSAS CITY 64 75 .460 18 WESTERN DIVISION TEXAS 77 60 .562 - SEATTLE 71 66 .518 6 OAKLAND 66 74 .471 12 1/2 CALIFORNIA 63 75 .457 14 1/2 TUESDAY, SEPTEMBER 3 SCHEDULE KANSAS CITY AT TORONTO DETROIT AT CHICAGO CLEVELAND AT MILWAUKEE MINNESOTA AT TEXAS BALTIMORE AT CALIFORNIA NEW YORK AT OAKLAND BOSTON AT SEATTLE NATIONAL LEAGUE EASTERN DIVISION W L PCT GB ATLANTA 84 53 .613 - MONTREAL 74 62 .544 9 1/2 FLORIDA 67 71 .486 17 1/2 NEW YORK 61 77 .442 23 1/2 PHILADELPHIA 55 83 .399 29 1/2 CENTRAL DIVISION HOUSTON 74 65 .532 - ST LOUIS 73 65 .529 1/2 CHICAGO 68 68 .500 4 1/2 CINCINNATI 68 69 .496 5 PITTSBURGH 57 80 .416 16 WESTERN DIVISION SAN DIEGO 77 62 .554 - LOS ANGELES 75 62 .547 1 COLORADO 71 68 .511 6 SAN FRANCISCO 58 77 .430 17 TUESDAY, SEPTEMBER 3 SCHEDULE CHICAGO AT FLORIDA ATLANTA AT CINCINNATI SAN FRANCISCO AT MONTREAL SAN DIEGO AT PHILADELPHIA LOS ANGELES AT NEW YORK HOUSTON AT ST LOUIS 7721 !GCAT !GSPO Results of Major League Baseball games played on Monday (home team in CAPS): American League Kansas City 2 TORONTO 0 Detroit 8 CHICAGO 6 MILWAUKEE 7 Cleveland 6 New York 5 OAKLAND 0 Minnesota 6 TEXAS 4 Boston 9 SEATTLE 8 (in 10) Baltimore 12 CALIFORNIA 8 National League FLORIDA 4 Chicago 3 Los Angeles 8 NEW YORK 5 MONTREAL 4 San Francisco 3 (in 11) ST LOUIS 8 Houston 7 (in 10) Colorado 8 PITTSBURGH 3 CINCINNATI 7 Atlanta 6 San Diego 5 PHILADELPHIA 1 7722 !GCAT !GSPO National Football League standings after game on Monday (tabulate under won, lost, tied, points for and points against): AMERICAN FOOTBALL CONFERENCE EASTERN DIVISION W L T PF PA BUFFALO 1 0 0 23 20 INDIANAPOLIS 1 0 0 20 13 MIAMI 1 0 0 24 10 NEW ENGLAND 0 1 0 10 24 NY JETS 0 1 0 6 31 CENTRAL DIVISION W L T PF PA BALTIMORE 1 0 0 19 14 JACKSONVILLE 1 0 0 24 9 CINCINNATI 0 1 0 16 26 HOUSTON 0 1 0 19 20 PITTSBURGH 0 1 0 9 24 WESTERN DIVISION W L T PF PA DENVER 1 0 0 31 6 KANSAS CITY 1 0 0 20 19 SAN DIEGO 1 0 0 29 7 OAKLAND 0 1 0 14 19 SEATTLE 0 1 0 7 29 NATIONAL FOOTBALL CONFERENCE EASTERN DIVISION W L T PF PA PHILADELPHIA 1 0 0 17 14 DALLAS 0 1 0 6 22 ARIZONA 0 1 0 13 20 NY GIANTS 0 1 0 20 23 WASHINGTON 0 1 0 14 17 CENTRAL DIVISION W L T PF PA GREEN BAY 1 0 0 34 3 MINNESOTA 1 0 0 17 13 CHICAGO 1 0 0 22 6 DETROIT 0 1 0 13 17 TAMPA BAY 0 1 0 3 34 WESTERN DIVISION W L T PF PA CAROLINA 1 0 0 29 6 SAN FRANCISCO 1 0 0 27 11 ST LOUIS 1 0 0 26 16 ATLANTA 0 1 0 6 29 NEW ORLEANS 0 1 0 11 27 7723 !GCAT !GSPO Results of National Football League game played on Monday (home team in CAPS): CHICAGO 22 Dallas 6 7724 !GCAT !GSPO Pat LaFontaine, who sat out the World Cup opener with a slight groin injury, had a shorthanded goal and two assists as the United States clinched first place in the North American pool by shutting down Russia 5-2 on Monday in the World Cup of Ice Hockey. By finishing atop the North American pool, the U.S. (2-0) earned a bye into the semifinals, where it will meet the winner of the quarterfinal between Russia and Finland on Sunday at Ottawa. Sweden, first in the European pool, also has a bye into the second round. "My groin was a little sore, but the adrenaline got going and I felt good," said LaFontaine, a member of the 1984 U.S. Olympic team and now a star with the NHL's Buffalo Sabres. "There's a lot of pride in this room. All these guys are world-class competitors. Everybody's focused and we know the job is not finished. We've proven we can beat Canada and Russia, but the bottom line is winning." The U.S. completes the opening round against Slovakia on Tuesday at New York. The United States never trailed after LaFontaine set up a goal by Adam Deadmarsh of the Colorado Avalanche just 26 seconds into the game. LaFontaine carried the puck down the right wing and slid a cross-ice pass to Deadmarsh, who ripped a one-timer from the left faceoff circle past goaltender Nikolai Khabibulin of the Phoenix Coyotes. "He said he was ready to go," U.S. coach Ron Wilson said of LaFontaine. "I knew he would come out and play well right off the bat." The U.S. doubled its lead at 7:08 when LaFontaine assisted on a goal by John LeClair of the Philadelphia Flyers. LaFontaine's shot trickled through Khabibulin and was resting in the crease when LeClair one-handed it over the goal line as he went behind the net. Mike Richter of the New York Rangers, playing on his home rink, finished with 32 saves, including nine in the first period. Russia's best chance during the first 20 minutes came when Sergei Nemchinov of the Rangers was left alone in front, but Alexander Mogilny could not handle the puck to set him up. "We played three very solid periods," Richter said. "But we have to continue to improve and be at our best when the playoffs come. We kept the quality scoring chances down and when you do that to a team like Russia, you have to do an awful lot right." Keith Tkachuk of the Coyotes backhanded a loose puck into the net to make it 3-0 at 4:46 of the second period after Bill Guerin of the New Jersey Devils whistled a shot off the crossbar. LaFontaine added a shorthanded goal just under five minutes later. Defenceman Chris Chelios of the Chicago Blackhawks stole the puck from Igor Larionov at the U.S. blue line and sent LaFontaine up the right wing. He drove to the net and waited for Khabibulin to commit before sliding a backhander into a virtually open goal. Russia (1-2) finally got on the board at 12:33 when defenceman Oleg Tverdovsky of the Coyotes took a pass from Larionov and put a backhander through Richter's legs. The play started when Larionov intercepted Chelios' clearing attempt at the U.S. blue line. "We didn't play well," Larionov said. "You have to give it to the U.S. They got off to a good start and we were in trouble from there." The United States answered on the next shift. Doug Weight of the Edmonton Oilers was left alone in the crease and whacked Brett Hull's centering pass into the net for his second goal of the tournament. Hull has two goals and three assists in Team USA's first two games. Khabibulin surrendered five goals on 22 shots and was replaced by Andrei Trefilov of the Sabres to start the third period. "We played three very good periods," said Wilson. "Whenever you hold a team like Russia down to two goals, you know you've done a good defensive job. I believe we're the best conditioned team in the tournament." Russia had the best scoring chances of the third period and finally cashed in with 27 seconds to go when Andrei Kovalenko of the Montreal Canadiens used defenceman Mathieu Schneider as a screen and put a low wrister through Richter's pads. 7725 !GCAT !GSPO Michael Chang, the hottest player on hard courts this summer, pounded forward on Monday on the softest seeded path at the U.S. Open. Chang, the second seed, took his place in the last eight with a 6-3 6-4 6-2 romp over Swiss Jakob Hlasek to round out the quarter-final berths from the lower half of the draw. While Chang's main championship rivals face high-risk tests immediately ahead, the diminutive Asian-American continues a stealthy assault on the season's final Grand Slam prize. Top-seeded defender Pete Sampras has a fourth-round date with huge-serving Mark Philippoussis of Australia, who beat him in straight sets at the Australian Open. Sixth-seeded Andre Agassi, the 1994 Open champion, tackles third seed Thomas Muster of Austria, who earlier this year took a turn at number one in the rankings, in the quarters. The 24-year-old Chang's next hurdle is 28-year-old Javier Sanchez of Spain, ranked 67 and with a 1996 record of 23-27. He has not played Sanchez in four years but won all three of their early encounters. Chang, who improved his match record to 20-2 since Wimbledon, is on course to reach the semifinals without having to face a seeded opponent. "I think whenever you're able to win a match you never complain. You do what you have to do," said Chang, who denied feeling the need of a sterner challenge. "Sometimes it takes three sets, sometimes four sets, sometimes five. You do what you have to do to get it done. The last one was a very tough match." Chang needed only one hour, 47 minutes to demolish the 51st-ranked Hlasek. Against the 69th-ranked Vince Spadea in the third round, Chang found his back against the wall. Spadea served for the match leading two sets to one and 5-4 in the fourth set. Chang, who served a woeful 35 percent first serve percentage, pulled out a 6-4 5-7 2-6 7-5 6-3 win in three hours 50 minutes -- the longest match at this year's Open. "I was pleased that my serve was better tonight," said Chang, who used his new long racket to slash 11 aces and win 86 percent of his first-serve points. "I knew that Jakob would be coming in on my second serve. That was an important part of my match tonight." The two traded service breaks in the second and third games of the first set before Chang took charge with a break in the eighth game for 5-3 and then served out the set. In the second set, Chang lashed a forehand crosscourt that splattered at the Swiss players feet as he approached the net. Chang broke Hlasek twice in the third set and finished off the match with a booming ace. Chang likes his draw just fine. The seemingly indefatigable Chang, the 1989 French Open champion, said too many tough tests can wear you out. "I think Pete Sampras is a good example of that at the French Open this year. He had so many tough five-set matches going into semis he was very tired," Chang said of the world number one, who had three five-setters before losing to Yevgeny Kafelnikov, the eventual champion. Chang said he had nothing special planned for his upcoming time off from the National Tennis Centre grind. "I'll just watch the other guys bust their butt, and take it easy." 7726 !GCAT !GSPO World Cup of Hockey standings after games played on Monday (tabulated under played, won, drawn, lost, goals for, against, points): EUROPEAN DIVISION Sweden 3 3 0 0 14 3 6 Finland 3 2 0 1 17 11 4 Germany 3 1 0 2 11 15 2 Czech Republic 3 0 0 3 4 17 0 AMERICAN DIVISION U.S. 2 2 0 0 10 5 4 Canada 3 2 0 1 11 10 4 Russia 3 1 0 2 12 14 2 Slovakia 2 0 0 2 7 9 0 7727 !GCAT !GSPO Results of World Cup Hockey Games played on Monday: U.S 5 RUSSIA 2 7728 !GCAT !GSPO Matches scheduled for the featured courts Tuesday at the U.S. Open tennis championships at the National Tennis Centre (prefix denotes seeding): Stadium (starting at 11 a.m., 1500 gmt) 4-Goran Ivanisevic (Croatia) v Andrei Medvedev (Ukraine) 4-Conchita Martinez (Spain) v Linda Wild (U.S.) Stefan Edberg (Sweden) v Tim Henman (Britain) Grandstand Alex Corretja (Spain) v Guy Forget (France) Stadium evening session (starting 7:30 p.m., 2330 g) 2-Monica Seles (U.S.) v Amanda Coetzer (South Africa) 1-Pete Sampras (U.S.) v Mark Philippoussis (Australia) 7729 !GCAT !GSPO Feyenoord Rotterdam completed their third consecutive victory by beating Fortuna Sittard 2-0 away on Tuesday to go top of the Dutch first division. A sixth minute goal by Swedish international Henke Larsson and a spot kick converted by Ronald Koeman took Feyenoord one point clear of second-placed PSV Eindhoven, who have a game in hand. Koeman was returning after a three-match suspension for a red card received at the end of last season. He scored from the penalty spot after winger Gaston Taument was brought down by midfielder Robert Loontjens. After Larsson's early goal gave Feyenoord the initiative they had little trouble in controlling the match. PSV can regain the lead on Thursday when they are at home to RKC Waalwijk. 7730 !GCAT !GSPO Nigerian striker Viktor Ikpeba hit two goals in the first six minutes of the match as Monaco trounced Lens 5-1 on Tuesday and ended their short reign at the top of the French first division. Lens, who had won their first four games, surrendered the leadership to favourites Paris St Germain, who won 3-0 away at Montpellier. Ipkeba, a member of Nigeria's Olympic gold medal side, struck immediately after the kick-off by lobbing the ball into the net and then heading home the second six minutes later. Sylvain Legwinski added a third after 27 minutes and 12 minutes later Belgian international Enzo Scifo put the result beyond doubt with the fourth. Goals did not come so easily in the second half and Monaco's fifth came through an own goal by Frederic Dehu one minute from the end. Another Nigerian, Godwin Opkara, also scored twice as Strasbourg beat champions Auxerre 2-1, their first defeat of the season. But the real star of the night was veteran Marseille captain Jean-Philippe Durand who completed a superb hat-trick within 12 minutes in their 3-1 home win against Rennes. Durand, the only player left from the side who won the European Cup in 1993, opened his account with a punishing 30-metre shot in the 27th minute, seconds after team mate Xavier Gravelaine had been sent off. He added two more in the 33rd and 39th minutes. Durand's former team mate Jean-Pierre Papin, back in France after four lacklustre seasons with AC Milan and Bayern Munich, showed some glimpses of his old form when he scored twice for Bordeaux, who beat Bastia 3-1. Paris St Germain's move to the top spot was largely due to their two Latin American internationals Julio Cesar Dely Valdes and Leonardo, both returning after playing for their national sides at the weekend. Panama's Dely Valdes opened the scoring in the 55th minute while Brazil's Leonardo made it two in the 77th. Veteran Laurent Fournier sealed the match with seven minutes left. The victories by PSG and Monaco make their clash on Friday all the more promising. The Parisians top the table on 13 points with Lens second on 12 and Monaco third on 10. For Monaco, who had a mediocre start to the season, the crushing win over Lens was all the more of a morale booster as they were without key Brazilian striker Sonny Anderson. 7731 !GCAT !GSPO Leading scorers in the French first division after Saturday's matches: 4 - Alain Caveglia (Lyon), Miladin Becanovic (Lille) 3 - Anton Drobnjak (Bastia), Jean-Pierre Papin (Bordeaux), Vladimir Smicer (Lens), Jean-Philippe Durand (Marseille), Xavier Gravelaine (Marseille), Robert Pires (Metz), Enzo Scifo (Monaco) 7732 !GCAT !GSPO Summary of Dutch first division soccer matches on Tuesday: Fortuna Sittard 0 Feyenoord Rotterdam 2 (Larson 6th, Koeman 26th penalty). Halftime 0-2. Attendance. 7,000 Heerenveen 0 NAC Breda 1 (Arnold 75th). Halftime 0-0. Attendance 13,000. Utrecht 0 Groningen 0. Attendance 8,500. 7733 !GCAT !GSPO Result of Dutch first division soccer matches on Tuesday: Fortuna Sittard 0 Feyenoord Rotterdam 2 Heerenveen 0 NAC Breda 1 Utrecht 0 Groningen 0 Standings (tabulate under played, won, drawn, lost, goals for, goals against, points): Feyenoord Rotterdam 4 3 1 0 8 2 10 PSV Eindhoven 3 3 0 0 11 3 9 Vitesse Arnhem 3 2 1 0 4 1 7 NAC Breda 4 2 1 1 3 2 7 Ajax Amsterdam 3 2 0 1 2 2 6 Heerenveen 4 2 0 2 7 6 6 Twente Enschede 3 1 2 0 4 2 5 RKC Waalwijk 3 1 1 1 7 6 4 Graafschap Doetinchem 3 1 1 1 5 5 4 Fortuna Sittard 4 1 1 2 3 6 4 Roda JC Kerkrade 3 0 3 0 3 3 3 Utrecht 4 0 3 1 2 3 3 Groningen 4 0 3 1 2 5 3 Sparta Rotterdam 3 0 2 1 1 2 2 NEC Nijmegen 3 0 2 1 2 5 2 Willem II Tilburg 3 0 1 2 1 4 1 AZ Alkmaar 3 0 1 1 0 3 1 Volendam 3 0 1 2 2 7 1 7734 !GCAT !GSPO Summaries of French first division matches on Saturday: Bordeaux 3 (Papin 12th, 73rd Ziani 61st) Bastia 1 (Laurent 65th). Half-time: 1-0. Attendance: 10,000. Caen 0 Metz 0. 0-0. 8,000 Guingamp 0 Cannes 1 (Charvet 60th). 0-0. 10,000. Lille 3 (Carrez 18th, Garcia 58th, Becanovic 76th) Nice 2 (Chaouch 37th, De Neef 87th). 1-1. 7,000 Marseille 3 (Durand 27th, 33rd, 39th) Rennes 1 (Denis 77th). 3-0. 20,000 Monaco 5 (Ipkeba 1st, 6th, Legwinski 27th, Scifo 39th, Dehu 89th own goal) Lens 1 (Meyrieu 52nd). 4-0. 3,000. Montpellier 0 Paris St Germain 3 (Dely Valdes 55th, Leonardo 77th, Fournier 83rd). 0-0. 14,000. Nancy 0 Le Havre 1 (Brando 30th). 0-1. 6,000. Strasbourg 2 (Okpara 20th, 45th) Auxerre 1 (Saib 56th). 2-0. 20,000. 7735 !GCAT !GSPO Standings in the French first division after Tuesday's matches (tabulate under played, won, drawn, lost, goals for, against, points): Paris SG 5 4 1 0 7 0 13 Lens 5 4 0 1 10 8 12 Monaco 5 3 1 1 12 5 10 Lille 5 3 1 1 7 5 10 Cannes 5 3 1 1 5 4 10 Bordeaux 5 2 3 0 6 3 9 Marseille 5 2 2 1 8 5 8 Lyon 5 2 2 1 8 6 8 Metz 5 2 2 1 6 4 8 Auxerre 5 2 2 1 4 2 8 Bastia 5 2 2 1 5 4 8 Guingamp 5 2 1 2 4 4 7 Strasbourg 5 2 0 3 4 7 6 Le Havre 5 1 2 2 3 4 5 Rennes 5 1 1 3 5 11 4 Caen 5 0 3 2 2 6 3 Nantes 5 0 2 3 4 8 2 Montpellier 5 0 2 3 3 8 2 Nice 5 0 1 4 5 10 1 Nancy 5 0 1 4 2 9 1 7736 !GCAT !GSPO French first division soccer results on Tuesday: Monaco 5 Lens 1 Montpellier 0 Paris-SG 3 Bordeaux 3 Bastia 1 Strasbourg 2 Auxerre 1 Caen 0 Metz 0 Lille 3 Nice 2 Guingamp 0 Cannes 1 Marseille 3 Rennes 1 Nancy 0 Le Havre 1 Played Monday: Nantes 2 Lyon 2 7737 !GCAT !GSPO Italy's professional cycling league said on Tuesday it had banned two of the country's top riders, Fabiano Fontanelli and Franco Ballerini, for doping offences. Fontanelli was banned for six months after testing positive for having a too high testosterone/epitestosterone ratio during the Amstel Gold Race on April 27. The 31-year-old rider finished fifth in the 253-km Dutch World Cup race from Heerlen to Maastricht and went on to win a stage of the Giro d'Italia the following month. Ballerini, who won the Paris-Roubaix classic in France last year, was given a 20-day suspension for testing positive for ephedrine in the Grand Prix of Wallonia on May 16. 7738 !GCAT !GSPO Spain's national team are to drop Seville as a permanent home for competitive games, coach Javier Clemente announced on Tuesday. "There will be no more fixed headquarters," said Clemente, who was speaking in the Faroe Islands ahead of Wednesday's World Cup qualifier. Clemente added that November's tie with Slovakia would be played in Tenerife, and that several other cities, among them Valencia, La Corunna and Alicante, were also being considered as future venues. For nearly 30 years Spain played all their qualifying games in Seville, where fans became known as the "12th player" because of their vociferous support. Spain have lost only once in the city -- a "dead" game to France in 1991 -- and in 1984 beat Malta 12-1 in Seville when needing a 10-goal margin to ensure a place in the European championship finals. With qualification already guaranteed, Spain's last European championship group game was moved to Elche. In an earlier match, supporters angered by the exclusion of a player from local club Real Betis sang abusive songs about the manager which left Clemente close to tears. 7739 !GCAT !GSPO The man behind Seville's bid to host the 2004 Olympic Games has asked the city to recognise the work of Juan Antonio Samaranch, president of the International Olympic Committee, on his forthcoming visit to the city. "It is an opportunity to recognise publicly and solemnly the merits of the man who undoubtedly has done most for sport in the world in all of the 20th century," said deputy mayor Alejandro Rojas Marcos, who as mayor initiated Seville's Olympic bid. Rojas Marcos said the city sports institute will also field a motion calling for an important crossroads to be named after the Olympic movement. Samaranch comes to Seville with an IOC evaluation commision next month and will be the guest speaker at an event held in the city on Spain's national day, October 12, which commemorates Columbus' arrival in the Americas. 7740 !GCAT !GSPO Atletico Madrid announced on Tuesday the turf at their Vicente Calderon ground is to be relaid barely a week before their first Champions League fixture with Steaua Bucharest. The Spanish club had to move the opening game of the new season to the Santiago Bernabeu stadium of rivals Real Madrid after an invasion of worms at the beginning of August made their own pitch unplayable. 7741 !GCAT !GSPO Italian captain Adriano Panatta on Tuesday named an unchanged team for the Davis Cup World Group semifinal clash with France later this month. The line-up of Andrea Gaudenzi, Renzo Furlan, Diego Nargiso and Stefano Pescosolido previously beat Russia and South Africa in earlier rounds in Rome. The semifinal is in Nantes from September 20-22. 7742 !GCAT !GSPO FIFA, in a bid to eliminate use of exploitative child labour, said on Tuesday it had agreed with international trade union officials on a code of labour for the production of FIFA-authorised footballs. World soccer's ruling body said the text would be presented to the World Federation of the Sporting Goods Industry, which is holding a special conference on child labour in London in November. 7743 !GCAT !GSPO World record holders Noureddine Morceli and Daniel Komen on Tuesday both called on "athletes of the world" to take part in an IAAF-backed meeting in war-ravaged Sarajevo next week. The event, titled the Solidarity Meeting for Sarajevo, venue of the 1984 Winter Olympics, will be held in the rebuilt Kosevo Olympic stadium on Monday. Morceli, the Algerian holder of three world records, said he wanted to race as "an inspiration to the young athletes of Bosnia and Herzegovina", the International Athletic Federation reported in a statement. Kenyan Komen, who took a fourth world record, the 3,000 metres, away from Morceli last Sunday, said: "I will be in Sarajevo and I believe it is very important for everybody to go there." 7744 !GCAT !GSPO Internazionale said on Tuesday the brilliant soccer career of newly-signed young Nigerian Nwankwo Kanu could be over because of a heart problem. Cardiologists on Monday diagnosed the 20-year-old striker, a key player for Ajax and Nigeria's gold medal winning Olympic soccer team, as having a serious heart problem that threatened the player's life if left untreated. Club doctor Piero Volpi said that in his opinion there was little prospect of Kanu playing again. "The diagnosis is merciless but that is the situation. Kanu has a valvular insufficiency of the aorta." "My only consolation, as a doctor, is that the illness was discovered so that the lad can be treated." Despite the doctor's words, Inter were still insisting officially that Kanu might yet play again while indicating that the attacker's short but sensational career was over. "We are dealing with a player who had a career and probably no longer has one," a club spokesman told Reuters, adding that Inter's main concern was for his wellbeing. "We don't yet know if he can still play in the future but if he does, it will be with Inter," he added. Inter president Massimo Moratti said he hoped Kanu would be able to play again "but it doesn't look easy. We must be realistic and keep our feet on the ground." Moratti said the club were first informed by cardiologists that there was a problem 10 days ago and had immediately stopped the Nigerian from playing. "It's a real shame," said Moratti. "Kanu was a phenomenon and would have done incredible things at Inter. It's a huge loss for the team but we won't be going back to the transfer market. That's the last thought on my mind." Kanu was a member of Ajax's 1995 European Cup-winning team and scored two brilliant goals against Brazil in the Olympic semifinals to steer Nigeria to a memorable 4-3 victory. The Italian news agency ANSA reported that Kanu was "emotionally shattered" and wanted to be left to himself. Dutch team mate Aron Winter, one of eight foreign players including Kanu on Inter's books, said the whole team was devastated and amazed by the news which broke only days ahead of the start of the serie A season. Inter's first match is at Udinese on Saturday. "We are all really upset," said Winter. "We will do everything that we can to help him. "I don't understand why the problem was only discovered now. When I was at Ajax four years ago I had tests. I can only say that in Italy they are more accurate," he added. Moratti, who has spent a fortune on building Inter into what he hopes will be a title-winning team this season, agreed the episode was extraordinary. "It's really sad from a human perspective. We are always close to our players and will give him whatever help he needs. He must be going through agonies at the moment." He said the club would give Kanu the chance to work for them off the pitch but it was up to him. "If he must have an operation, we will give him all the help he needs," he added. 7745 !GCAT !GSPO German athletics chiefs plan to warn all their athletes to stop drinking tea and coffee around competitions to avoid the risk of being banned for doping. After studying the case of a minor athlete who failed a drug test for the stimulant caffeine after drinking just two cups of coffee, the German athletics federation (DLV) said on Tuesday that it had revised its recommendations on refreshments. "No tea or coffee should be drunk at all from before the start of a competition to the time when an athlete provides urine for a doping sample," the DLV said in a statement. The Germans want to discuss the controversial area of sports medicine with track and field's governing body, the International Amateur Athletic Federation (IAAF). Germany's late doping expert Manfred Donike had previously said that athletes could drink up to three cups of coffee without worrying about going over the IAAF limit. At first glance the new recommendations may seem ridiculously strict since coffee and tea are a far cry from the performance-enhancing steroids and human growth hormones which some athletes use to cheat their way to glory. But caffeine belongs to a grey area of sports medicine and German sport has struggled with controversial cases in the past, notably one involving former world swimming champion Sylvia Gerasch who was banned for two years after a positive test. DLV doping expert Theo Rous said the decision to change the advice to athletes was made after the federation studied the case of long jumper Astrid Mannes who tested positive for caffeine at a minor German meeting last year. Mannes claimed she drank only two cups of coffee before the event. Medical checks on the athlete, who is particulary light in weight, showed that high levels of caffeine could appear in her urine after a small intake of coffee. "Repeated experiments...showed that Astrid Mannes would go over the IAAF limit after just two cups of coffee," Rous said. "The DLV has concluded that Astrid Mannes did not try to take a substance to boost her performance and regrets that the impression was given in public that she was a doping offender." Rous said he planned to take the findings to the IAAF together with Wilhelm Schaenzer, the head of Cologne's respected doping laboratory which used to be run by Donike. "In the short term we do not expect a change to the IAAF levels which is legally binding," Rous said. Former East German Gerasch failed to persuade international swimming chiefs that her positive test for caffeine at the 1993 European sprint championships in Gateshead, England, was due to drinking coffee and was suspended for two years. Last November the International Swimming Federation (FINA) decided to reduce its compulsory bans for the substance to three months. 7746 !GCAT !GSPO French international striker Florian Maurice severed his Achilles tendon in a soccer league match for his club Lyon at Nantes on Monday night, the team doctor said on Tuesday. "He will be out of action for four to six months and may have to be operated on as soon as Wednesday," the doctor said . The 22-year-old striker, one of the most gifted marksmen in the French league, was called up for the first time in France's "A" team only last week for a friendly against Mexico. 7747 !GCAT !GSPO Ireland winger Simon Geoghegan said on Tuesday he will travel to the United States at the weekend for surgery on the big toe joints in both feet. "I am going to San Diego on Sunday and will have operations on both toe joints by an orthopaedic surgeon who specialises in that particular area," said Geoghegan. "I just hope it works out and that I will be able to regain full fitness. It has been frustrating and extremely disappointing," he added. Geoghegan, 28, has had recurring trouble with the joints and an operation in London during the summer failed to rectify the trouble. Geoghegan played for his club Bath against Orrell in an English national league match on Saturday and scored a try but he did not finish the match. Geoghegan has been capped 37 times for Ireland. His last appearance was against England in March. 7748 !GCAT !GSPO Dutch soccer referees called off a strike planned for later this month after the soccer union (KNVB) offered improved terms, news agency ANP said on Tuesday. Referees had threatened to go on strike and wipe out a week's entire first division programme unless the KNVB increased match fees, pension rights and other payments. ANP said the KNVB had made a move towards the referees but details of the improved terms were not disclosed. 7749 !GCAT !GSPO Aravinda de Silva hit a brilliant unbeaten century, his sixth in one-day cricket, to steer Sri Lanka to a comfortable six-wicket win over Zimbabwe in the Singer world series tournament on Tuesday. The win ensured the World Cup champions finished top of the league standings in the four-nation limited-overs tournament with a maximum six points from three wins and qualified for Saturday's final. Sri Lanka must wait until Thursday's clash between Australia and India to find out who will meet them in the final. Both teams have two points from two games. De Silva, hero of Sri Lanka's World Cup triumph over Australia in Lahore earlier this year, maintained his outstanding form in this tournament and took his aggregate to 259 in three innings without being dismissed once. De Silva's exceptional exploits with the bat have put him in line for the player-of-the-series award, a choice between a luxury car and a four-wheel-drive jeep. Chasing Zimbabwe's total of 227 for five from 50 overs, Sri Lanka were in difficulties at 129 for four in the 29th over. But De Silva, displaying superb temperament and a wide range of shots, shared an unfinished stand of 99 for the fifth wicket with Hashan Tillekeratne to steer his side to victory with three overs to spare and claim his second successive man-of-the-match award, following his unbeaten 83 against Australia last Friday. He hit one six and 13 fours off 123 balls. Zimbabwe, put in to bat by Sri Lanka, reached their total largely thanks to a career-best 96 not out by hard-hitting right-hander Craig Evans. He struck three sixes and six fours in an aggressive display and was unfortunate to miss his maiden century when the overs ran out. Skipper Alistair Campbell also struck form with a stylish 54 off 96 balls and shared with Evans a fifth-wicket stand of 114 from 146 balls to lift Zimbabwe from 66 for four to a total their bowlers had a chance of defending. Sri Lanka wicket-keeper Romesh Kaluwitharana made four dismissals but missed an equal number of chances during the Campbell-Evans partnership. Zimbabwe are now out of the tournament, having lost all their three matches. 7750 !GCAT !GSPO Sri Lanka beat Zimbabwe by six wickets in the fifth match of the Singer World Series one-day limited overs cricket tournament on Tuesday. Scores: Zimbabwe 227-5 innings closed (C.Evans 96 not out, A.Campbell 54), Sri Lanka 228-4 in 47 overs. 7751 !GCAT !GSPO Scoreboard of the fifth Singer World Series limited overs cricket match between Zimbabwe and Sri Lanka on Tuesday: Zimbabwe G. Flower c Kaluwitharana b Pushpakumara 0 P. Strang c Kaluwitharana b Pushpakumara 24 A. Flower c Kaluwitharana b Wickremasinghe 11 A. Campbell stmd Kaluwitharana b Muralitharan 54 C. Wishart c Chandana b Ranatunga 7 C. Evans not out 96 G. Whittal not out 15 Extras (lb-7 w-13) 20 Total (five wickets in 50 overs) 227 Fall of wickets: 1-13 2-48 3-48 4-66 5-180. Did not bat: A.Whittall, H.Olonga, W.James, H.Streak. Bowling: Wickremasinghe 9-1-32-1, Pushpakumara 6-0-28-2, Muralitharan 10-1-36-1, Ranatunga 5-0-22-1, Chandana 10-0-48-0, Jayasuriya 10-0-54-0. Sri Lanka S.Jayasuriya b Olonga 5 R.Kaluwitharana c Wishart b Olonga 12 A.Gurusinha run out 15 A.de Silva not out 127 A.Ranatunga c Olonga b A.Whittall 20 H.Tillekeratne not out 34 Extras (b-1 lb-2 w-8 nb-4) 15 Total (for 4 wickets, 47 overs) 228 Fall of wickets: 1-18 2-25 3-100 4-129. Did not bat: M.Muralitharan, U.Chandana, M.Atapattu, P.Wickramasighe, R.Pushpakumara. Bowling: Streak 8-0-24-0, Olonga 6-0-47-2, G.Whittal 5-0-26-0, A.Whittall 10-1-30-1, Strang 10-0-50-0, Campbell 4-0-24-0, G.Flower 1-0-10-0, Evans 3-0-14-0. Man of the Match: Aravinda de Silva Next Series match: Australia v India, September 5. 7752 !GCAT !GSPO Zimbabwe were 227 for five wickets in 50 overs after being put into bat by Sri Lanka in the fifth Singer World Series limited-over cricket match on Tuesday. 7753 !GCAT !GSPO Sri Lanka won the toss and put Zimbabwe in to bat in the fifth limited-overs cricket match in the Singer world series tournament on Tuesday. Teams: Zimbabwe - Alistair Campbell (captain), Andy Flower, Craig Evans, Grant Flower, Paul Strang, Heath Streak, Andrew Whittall, Guy Whittal, Craig Wishart, Wayne James, Henry Olonga. Sri Lanka - Arjuna Ranatunga (captain), Sanath Jayasuriya, Romesh Kaluwitharana, Asanka Gurusinha, Aravinda de Silva, Hashan Tillekeratne, Muthiah Muralitharan, Upul Chandana, Marvan Atapattu, Promodya Wickramasighe, Ravindra Pushpakumara. 7754 !GCAT !GSPO Sri Lanka won the toss and put Zimbabwe into bat in the fifth limited overs cricket match in the Singer World Series tournament in the Sri Lankan capital on Sunday. Teams: Zimbabwe - Alistair Campbell (captain), Andy Flower, Mark Dekker, Craig Evans, Grant Flower, Paul Strang, Heath Streak, Ali Shah, Andrew Whittall, Guy Whittall, Craig Wishart. Sri Lanka - Arjuna Ranatunga (captain), Sanath Jayasuriya, Romesh Kaluwitharana, Asanka Gurusinha, Aravinda de Silva, Hashan Tillekeratne, Muthiah Muralitharan, Upul Chandana, Marvan Atapattu, Promodya Wickramasighe, Ravindra Pushpakumara. 7755 !C13 !CCAT !GCAT !GENV !GPOL South Africa is about a year away from a comprehensive water law revision that is likely to separate water rights from land ownership, an official told parliament's water affairs and forestry committee on Tuesday. Deputy director general of water affairs and forestry Mike Muller told the committee that riparian rights and protection of existing water rights had become the most controversial aspects of a national debate on water legislation. A ministerial discussion document likely to form the basis of the new legislation states: "The location of the water resource in relation to land should not in itself confer preferential rights to usage. "The development, apportionment and management of water resources should be carried out using the criteria of public interest, sustainability, equity and efficiency of use in a manner which reflects the value of water to society," it says. Muller said the notion that water should be treated as a resource in a way similar to minerals was being questioned by various groups including farmers, who could be seriously affected by its implementation. "A political decision is going to have to be taken on that matter," he told the committee. "The other issue...is how does the constitution treat water rights. Are they a property right, are they susceptible to constitutional protection and to what extent," he said. Muller told Reuters later that a central theme of the new law would be that water should be bought and not just subject to a delivery charge as is the case at present. He said 60 to 70 percent of the nation's water usage was beyond the reach of legislation at present, coming mainly from rivers and private sources. "Industry is at least in the habit of paying the cost of water, unlike farmers. They are easier to convince, though they will complain," he said. "The price isn't about money for government. The price is about encouraging people to share the resource. "It would be crazy to charge people in areas where it is running into the sea so much that they don't use it - much rather that they use it productively," he said. Muller said 11 specialist teams were analysing existing South African and foreign laws on water rights in preparation for the drafting of new legislation. He said the department hoped to present proposals for a white paper on water law at a consultative conference in East London on October 17 and 18. The white paper should be drafted by November and approved by cabinet in April. "We are hoping that a bill will be approved by parliament in October, 1997," he said. 7756 !GCAT !GDIP Taiwanese Vice-Premier Hsu Li-teh said on Tuesday he was reassured that South Africa would continue to be the island's diplomatic ally even after the retirement of President Nelson Mandela. Hsu told a joint briefing with South African Foreign Minister Alfred Nzo he believed the Pretoria government would not dump Taiwan after Mandela retires in 1999. Deputy President Thabo Mbeki is widely expected to succeed Mandela and Hsu said he was reassured by a meeting with the anointed successor on Monday. "He is a far-sighted statesman. He, of course, follows the policies of your president so in this regard I am very confident that he is very friendly to my country," Hsu said. Mandela has said it would be immoral to cut ties with Taiwan after years of support from the island, which China has regarded as a renegade province since 1949. Pretoria is the biggest of Taipei's 30 diplomatic allies but has publicly expressed its desire for relations with Beijing, which demands it cut ties with Taiwan first. Aides said Mandela might offer South Africa's services to mediate between Taipei and Beijing. Hsu said he believed South Africa had strategic importance as a partner for Taiwan. "We anticipate you are going to have a vital role to play in the future... You are destined to become the powerhouse, the locomotive, the operation centre of all Africa and it is our selfish interest to join hands with you and become strategic partners in your development," Hsu said. Nzo repeated Mandela's belief that it would be "immoral" to break off ties with Taiwan and that the Pretoria government wanted China and Taiwan to solve their differences. South Africa would help if asked to, he added. "If there is a possibility of the president meeting the president of the People's Republic of China, that would present an opportunity for a discussion on this question," Nzo said. A senior South African Foreign Ministry source said officicals were trying to set up a meeting between Mandela and Chinese President Jiang Zemin. "It is something that is being worked on, but we don't have a date as yet," he said. Hsu said South Africa was expected to present a proposal on a $3.5 billion petrochemical complex joint venture with Taiwan. "A petrochemical complex has been proposed to your government and businessmen. I think the chance is quite promising. We will let your government and your businessmen think further. I understand they are going to give us a proposal before the end of September. He said that if the project went ahead Taiwanese experts expected about 80,000 jobs to be created in South Africa. 7757 !GCAT These are the main stories on the Angolan press on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy. JOURNAL DE ANGOLA - The United Nations special envoy to Angola Alioune Blendin Beye said after talks with Angolan president Jose Eduardo dos Santos that no progress had been registered in Angola's peace process in two months. Beye is due to meet UNITA leader Jonas Savimbi on Thursday. - Namibia's prime minister Hage Geingob, on a three-day visit to the capital Luanda, met his Angolan counterpart Fernando Franca Van Dumen on cooperation in fishing, tourism, trade, energy and water. 7758 !GCAT These are the leading stories in the Malawi press on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy. - - - - THE NATION - Malawi Congress Party treasurer John Tembo, former president Kamuzu Banda's right-hand man, and former official hostess Cecilia Kadzamira, Banda's confidante, have been arrested on charges of conspiracy and attempted murder. - Former cabinet minister and ruling United Democratic Front executive member Rolf Patel has quit his party, voicing allegations of corruption in government. - - - - THE DAILY TIMES - Police said the arrests of Tembo and his niece Cecilia Kadzamira were not politically motivated. 7759 !GCAT These are the leading stories in Zimbabwe's state-owned Herald newspaper on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy. - Twenty-five heads of state and government have so far confirmed that they will attend the World Solar Summit to be held in the Zimbabwean capital Harare in two weeks time, vice president Simon Muzenda said on Monday. - Zimbabwe's cabinet will discuss on Tuesday the mass strike action by the majority of civil servants demanding salary increases and will decide on what course of action to take to bring back normality and ensure ordinary citizens get basic social services. - Zimbabwe's information, posts and telecommunications minister Joyce Mujuru on Monday said most development projects in the country failed because the experts and professionals who drew them did not include the beneficiaries at planning stages. -- Harare Newsroom: +263-4 72 52 28/9 7760 !GCAT These are the leading stories in the South African press on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy. - - - - BUSINESS DAY - Three parliamentary committees have agreed to get tough with the European Union over its mandate for a free trade agreement with South Africa, and have criticised EU tactics as threatening the integrity of domestic policy-making. - The Automobile Manufacturers Employers' Organisation yesterday denied claims by Mercedes-Benz South Africa that its final pay offer contravened the principles of the industry's three-year wage agreement. - An inquiry into last-minute promotions under apartheid could uncover irregularities worth about two billion rand, but would be useless if no action was taken, Judge Colin White said yesterday. - The African National Congress's weekend security summit has recommended a range of tough new crime-fighting measures, including the creation of a special state crime-fighting fund, a category of non-bailable offences and the imposition of minimum sentences for certain serious crimes. - South Africa's top company executives received higher salary increases this year than in any year since 1992. - - - - BUSINESS REPORT - The planned multibillion rand merger between Premier Pharmaceutical (Prempharm) and Adcock Ingram , two of South Africa's bigggst drug companies, is being held up by difficulties in concluding a new agreement between Prempharm and Mer-National, one of its most important foreign principals. - Raymond James Stewart, a stockbroking firm, said yesterday it had hired five analysts from competitor Mathison & Hollidge, including Rob Gillan, the head of research, to bolster its research capability. - NewFarmers Development, a private agricultural investment company, said yesterday it would raise 40 million rand in a private share placing which would be invested mainly in emergent farmers. - - - - THE STAR - The African National Congress has moved swiftly to stem the rising furore over its security leaders' call for a review of the death penalty. - The blockbuster movie, Independence Day, is set to break South African cinema attendance records. -- Johannesburg newsroom +27 11 482 1003 7761 !CCAT !GCAT !GVIO The hijacker who seized a Bulgarian charter plane on a flight from Beirut to Varna on Tuesday and took off again for Oslo after freeing the 150 passengers was a Palestinian, airport official said. "The hijacker is Palestinian and his name is Nadir Abdulah," a Varna Airport official told reporters. He is around 35 years old and six feet high, the official added. Abdulah, who seized the TU-150 aircraft 15 minutes before it touched down in Varna, near Bulgaria's Black Sea coast, freed the passengers at the airport but kept the eight crew aboard and demanded refueling. The plane took off for Oslo at 1810 (1510 GMT). "The man (Abdulah) had most of his face veiled with a handkerchief and refused to take food or drink during the flight. Before touch down he became nervous," said one of the passengers. "The hijacker entered the crew cabin with a bomb in hand 15 minutes before landing and demanded to continue the flight either to Helsinki or to Oslo," Varna airport director Atanas Atanasov told reporters. "The pilot convinced him that the plane needed refuelling and a cleared passage to the final destination," said Atanasov. The hijacker refused to negotiate directly with airport authorities and communicated only through the plane's captain, who at the time described him as an Arab speaking broken English, Atanasov said. In Oslo, a spokeswoman for the justice ministry said the ministry's political department and the police had been alerted. The Norwegian news agency NTB quoted an aviation official as saying the plane was expected to reach Oslo at 1800 GMT. When the flight left Varna, flights to and from the city resumed after being suspended for three hours. Bulgaria has been involved in two recent incidents of threats to airliners. Last week a Turkish plane bound from Vienna to Istanbul landed at Sofia airport after receiving a bomb threat. In March a Turkish Cypriot airliner, hijacked on a flight from northern Cyprus to Istanbul, landed in Sofia to refuel before flying to Munich, where the hijacker was arrested. 7762 !GCAT DELO - Slovenian President Milan Kucan on Monday started a second round of consultations with political parties concerning the election date. - The police said it introduced special traffic controls for the first two weeks of September in order to prevent accidents that could involve children starting the new school year on Monday. - Succession negotiation groups of Slovenia, Bosnia, Croatia and Macedonia meet in Ljubljana on Tuesday to continue a debate on succession problems of the states of the former Yugoslavia. The groups are scheduled to meet Sir Arthur Watts, who is leading succession talks on behalf of the international community, in Brussels from September 9 to 12. - Dutch Foreign Minister Joris Voorhoeve, who visited Slovenia on Monday, said his country supported Slovenia's strive to join NATO. - Experts said Slovenian assets in Bosnia and Herzegovina are estimated to be worth about 840 million marks ($566 million). - The business results of Slovenian Steelworks are improving although some parts of the company still produce at a loss. DNEVNIK - Slovenian general Health Insurance company said the number of medicines that would not be paid by the insurance increased by about 30 percent in September. REPUBLIKA - Experts of the Institute of Jozef Stefan on Monday started rehabilitation of a waste area in Zavratec, about 40 km (25 miles) west of Ljubljana, where a Ljubljana hospital deposited radioactive waste 35 years ago. 7763 !GCAT IZVESTIA - The coming days will reveal the true intentions of the federal administration concerning the war in Chechnya - President Boris Yeltsin must decide whether the rebel region has lasting peace or merely a truce. - The rise of energy tariffs from October 1 is a forced measure aimed at encouraging domestic industrial production. Last year Russians paid four times more for vodka then for energy, Russia's Energy Minister is quoted as saying. SEVODNYA - A postponment of the definition of the status of Chechnya until December 31, 2001 is the main result of the peace talks held in Khasavyurt between Alexander Lebed and Aslan Maskhadov. - The Kremlin is celebrating its first victory in regional elections after Yeltsin's candidate won a local administration election in Saratov last Sunday. Russians will have to elect 52 regional governors by the end of the year. NEZAVISIMAYA GAZETA - Chernomyrdin has aproved Lebed's actions in Chechnya, according to the press office of Russia's security chief. - Belarussian opposition parties and movements are warning against the creation of a totalitarian regime since a new Constitution, published on Sunday for public consideration, is expanding President Alexander Lukashenko's powers greatly. SOVIETSKAYA ROSSIYA - We must simply admit - Russia has been defeated in Chechnya and Lebed managed to ensure the retreat of Russian troops. MOSKOVSKY KOMSOMOLETS - Peace in Chechnya will depend now more on the will of the separatists to share power with others than on the aproval of the Russian president. A coalition government is expected to be formed under the agreement signed between Lebed and Maskhadov. Tatyana Ustinova, Moscow Newsroom, +7095 941 8520. 7764 !GCAT Radio Romania news headlines: * New justice, agriculture and communications ministers were sworn in after ruling Party of Social Democracy (PDSR) scrapped government coalition with National Unity Party (PUNR). * Health Minister Daniela Bartos outlined before cabinet the spread of a current meningitis epidemic. She said the ministry added an extra 200 million lei to the budgets of Bucharest hospitals handling meningitis cases . * Lower Chamber of Deputies started debates on a bill on control of dignitaries' wealth. * Upper Senate approved bank privatisation bill. -- Bucharest Newsroom 40-1 3120264 7765 !GCAT !GENT !GPRO Pop singer Michael Jackson came to Prague on Tuesday to launch his first tour in two years as promoters erected a huge statue of the star on a hill over the city where a monument to Soviet boss Josef Stalin once stood. Jackson's three-month "HIStory" tour through Europe, Africa and Asia kicks off on Saturday with a concert on Prague's Letna Plain where 130,000 are expected, but he arrived four days early to do some sightseeing in and around the Czech capital. After his jet sat for half an hour on the tarmac of Prague airport's VIP terminal, the flamboyant but reclusive Jackson emerged in a gold lame and red outfit under a white parasol blocking the bright sun. Several hundred fans handpicked by promoters greeted the star, and he hugged several fans who presented gifts on the tarmac before Jackson's motorcade left. After waving at others lining the 15 km (10 mile) route into the city from a gleaming Rolls Royce, Jackson and his police-escorted phalynx of luxury cars carrying his entourage drove through a screaming hotel welcoming party. Thousands of fans amassed at the hotel on the river Vltava (Moldau), climbing over each other for a glimpse of the star on his first tour since he was cleared of child molestation charges by a U.S. court because of lack of evidence. Pavel Klika, in his late teens from the southern Czech city of Tabor, played a human "K" in a seven-member group spelling out J-A-C-K-S-O-N for his arrival. "I had to come here to see him to really beleive he was in the Czech Republic, even though I have a ticket to see him on Saturday -- I just couldn't wait," Klika said. The singer's penthouse suite Prague faces the hill where a 10-metre (33 foot) water-filled statue of Jackson takes up the rock pedastal where Communists built a massive monument to Stalin which they later blew up up after his death in 1953. Despite complaints about the Jackson statue in some quarters, Prague City Hall finally approved its placement until the concert is completed on Saturday. Two huge torches on either side of Jackson's statue were lit recalling the days when Stalin's Cult of Personality kept two Olympic-style flames burning. The Prague stop, Jackson's first visit to the Czech capital in a long series of rock concerts since the fall of Communism here in 1989, has so far avoided the controversy at other planned dates on his tour. In South Korea, civic and religious groups reacted bitterly to a decision to let Jackson play two concerts in Seoul in October, saying it was unbelievable that the government agreed to to make an "amoral singer" the teenagers' idol. A planned stop in Casablanca was cancelled by Moroccan authorities, without explanation. A concert organiser said the government did not want 100,000 youths all in the same place. 7766 !E51 !E512 !ECAT !GCAT !GDIP Polish and Malaysian firms clinched new contracts and forged closer links during a Poland-Asia economic forum which ended in Warsaw on Tuesday. "The impact of the forum will be very positive. We can expect a boost in mutual trade and closer cooperation among companies," Dato Paduka Affendi, chairman of the Polish-Malaysian Chamber of Commerce, told a news conference. The Malaysian companies were especially active during the two-day event, which brought government and business officials from 15 South Asian countries, completing two contracts and initiating many new areas of cooperation. Polish trading firm Kolmex SA and Malaysia's Darian Motors company were set to sign a contract on a joint venture to assemble rolling stock for the Asian country's railways modernisation programme. Affendi, who heads Darian Motors, told reporters the new company could count on Malaysian government orders for railway coaches worth about $100 million over the next three years. In another deal, Poland's SAG Industries signed a $5 million letter of intent to distribute steel ropes in Malaysia and then to manufacture them there. Polish steel trader Stalexport said it had discussed with Malaysian officials plans to take part in the Asian country's $2 billion railways investment programme. Stalexport's director Andrzej Lis told the news conference his firm hoped to win contracts to deliver rail track worth 10 to 15 percent of the programme over the next three years. Polish-Malaysian economic exchanges, which slumped after the fall of Poland's communist system and centrally planned economy in 1989, started to grow in 1992 and doubled to $113 million last year, compared to 1994. Poland's state-owned heavy machines producer Bumar Labedy SA hopes to win a contract to sell Malaysia 300 modernised T-72 tanks. The tank tender is to be resolved this year. During the Polish-Asian forum, the first such event in Poland, business executives held more than 260 meetings and discussed 228 trade and investment offers, said Krzysztof Loth of the United Nations Development Organisation (UNIDO), which helped organise the conference. Many of these will soon turn into contracts, he said. Among other countries at the forum were Hong Kong, Vietnam, Laos, Indonesia, the Philippines, Singapore, and Thailand. Senior observers from China, Japan and South Korea, the Czech Republic, Hungary, Slovakia and Slovenia also attended. -- Warsaw Newsroom +48 22 653 9700 7767 !GCAT !GDIP Hungarian opponents of a friendship treaty with Romania said on Tuesday that signing it would be an act of "treason", but Prime Minister Gyula Horn said it would be approved anyway. "(The signing of this treaty) amounts to treason," said Jozsef Torgyan, the outspoken head of the opposition party Smallholders. Torgyan was speaking at a stormy emergency session of Hungary's parliament called by the opposition in a last-ditch effort to scuttle the treaty which Romania and Hungary agreed last month but which has yet to be formally ratified. After listening for several hours, Prime Minister Gyula Horn said, "So far, I have heard nothing that would make me change my mind." Horn's Hungarian Socialist Party and the Free Democrat coalition partner have a commanding 72 percent majority in Parliament which is more than enough to ratify the treaty. Hungary and Romania announced two weeks ago that the friendship treaty, four years in the making, had been completed and was ready to be signed. It enshrines protective rights for ethnic minorities and renounces any claims by either country over the other's territory. The opposition says the treaty addresses only rights of individuals and not the collective rights of the 1.6 million ethnic Hungarians living in Romania. Most analysts agree that the treaty has been completed as a prerequisite of both countries' aspirations for NATO and European Union membership. However, some opposition politicians questioned the validity of this argument. "If they want us to join NATO and the EU they will accept us regardless of the basic treaty," said Viktor Orban, leader of FIDESZ-MPP. 7768 !GCAT !GPOL Following is the revised list of Romania's government after the reshuffle confirmed by the cabinet on Tuesday. ROMANIA GOVERNMENT LIST President (Sworn in 30 Oct 1992 for four-year term)............................Ion ILIESCU Economic Adviser to President..................Misu NEGRITOIU - - - - - - - PARTY OF SOCIAL DEMOCRACY OF ROMANIA (PDSR)-LED GOVERNMENT (Sworn in 20 Nov 92, reshuffled 3 Sept 1996) Prime Minister (Appointed 4 Nov 1992)........Nicolae VACAROIU - - - - - - - MINISTERS OF STATE: Economic Reform..................................Mircea COSEA Finance......................................Florin GEORGESCU Foreign Affairs.......................Teodor Viorel MELESCANU Labour & Social Security...................Dan Mircea POPESCU - - - - - - - MINISTERS: Agriculture & Food Industry................ . Alexandru LAPUSAN Communications.................................Virgil POPESCU Culture......................................... . Grigore ZANC Defence........................................Gheorghe TINCA Education......................................... Liviu MAIOR Environment, Forestry & Water........... Aurel Constantin ILIE Health......................................... Daniela BARTOS Industry...................................Alexandru STANESCU Interior...................................Doru Ioan TARACILA Justice......................................... . Ion PREDESCU Parliamentary Relations.......................... Petre NINOSU Public Works.................................... Marin CRISTEA Research & Technology..................... Doru Dumitru PALADE Tourism.................................... . Matei Agathon DAN Trade........................................Dan Ioan POPESCU Transport......................................... Aurel NOVAC Youth & Sports..............................Alexandru MIRONOV - - - - - - - Central Bank Governor.......................... Mugur ISARESCU (End Government List) 7769 !GCAT !GDIP !GPOL An expectedly stormy emergency session of Hungary's parliament on Tuesday afternoon will give opposition the chance to voice their protests on the controversial Hungarian-Romanian treaty, but will change little, analysts said. "This session will only give them the opportunity to air their objections in front of the largest possible audience," political analyst Attila Ledenyi told Reuters. Hungary and Romania announced two weeks ago that a friendship treaty, four years in the making, had been completed and was ready to be signed. It enshrines protective rights for ethnic minorities and renounces any claims by either country over the other's territory. Opposition parties last week called for an extraordinary session of parliament to discuss the accord despite the fact that the government coalition's 72 percent majority denies them the possibility of blocking the treaty. They oppose the treaty on the grounds that the rights laid down are only individual and do not apply collectively to all 1.6 million Hungarians living in the Transylvania area of Romania. Hungary's senior coalition partner, the Socialists, while not expecting the pact to herald great changes in the two countries' relations, believe the treaty will have a positive effect. "Only time can decide, whether relations will actually improve," said Imre Szekeres, head of the Socialist parliamentary group. "But I think that chances of an improvement are better with a treaty." Laszlo Valki, head of the department of International Law at the Eotvs Lorand University is more certain of the benefits of the accord. "The very existence of the treaty could trigger further steps towards better relations," he told Reuters. "I am sure relations will improve as a result." Most analysts agree that the treaty has been completed as a prerequisite of both countries' NATO and European Union membership while some said it might help Romanian President Ion Iliescu's reelection campaign. "That's why he wants it to be signed either in Romania or Hungary," Ledenyi said. Valki, however, believes there are as many in Romania who oppose the deal as support it. "I don't think this could be of a measurable benefit to Iliescu's campaign," Valki said. "Positive and negative reactions would probably cancel each other out," he said. 7770 !GCAT !GPOL Romanian Prime Minister Nicolae Vacaroiu appointed new agriculture, justice and communications ministers after the country's leftist ruling party kicked its nationalist junior partner out of the governing coalition, an official said on Tuesday. "Premier Vacaroiu has designated the three new ministers and they are expected to be sworn in later today after President Ion Iliescu signs the decree," government spokesman Ioan Rosca told Reuters. The new agriculture minister would be state secretary Alexandru Lapusan, Rosca said. He said state secretary Virgil Popescu was appointed communications minister, while senator Ion Predescu, head of parliament's juridical commission was the new justice minister. The three of them are members of the PDSR, Rosca said, adding that the new ministers would attend cabinet's weekly meeting on Tuesday. Iliescu's ruling Party of Social Democracy (PDSR) on Monday broke a 21-month alliance with the anti-Hungarian National Unity Party (PUNR) over repeated attacks by PUNR leadership against the president. As a result, the government sacked its PUNR members which held the agriculture, justice and communications portfolios. The fourth PUNR cabinet-member, the transport minister, had announced he would resign from his party soon after the coalition broke. Analysts see the ruling PDSR's move as an attempt to rid itself of unwholesome allies ahead of Romania's third post-communist presidential and parliamentary elections due on November 3. 7771 !GCAT !GCRIM A prominent Polish investigative journalist, whose week-long disappearance prompted a nationwide search, has been found alive in Warsaw -- but mystery still surrounds the episode, private Radio Zet reported on Tuesday. Jerzy Slawomir Mac, known for his probes into intelligence and crime issues for the weekly Wprost, was spotted sitting groggily on a bench at a Warsaw railway station early on Monday and later discharged himself from hospital. He declined to speak with other reporters. Mac vanished on Tuesday last week after telling office colleagues he was going for a stroll. Wprost deputy editor Marek Zieleniewski told Radio Zet that Mac said he had been abducted from a nearby park by two men. "Suddenly he saw two men. He heard the word 'police', and lost consciousness," Zieleniewski said. "We can suppose that he was held against his will, in an unspecified place. He remembers little of the period -- laughter, darkness -- and regained consciousness not far from the station," Zieleniewski said. A witness present when railway employees recognised Mac at the station said he was incoherent and looked drugged. Police, who launched a major search for Mac, are investigating the episode. In March arsonists set fire to Mac's apartment and he suggested the attack could be tied to his reports on political and intelligence issues, but police later said the attack was revenge for a complaint he made against local drug dealers. 7772 !GCAT !GCRIM Belgian police found bones, probably human, on Tuesday while searching a property owned by convicted child rapist Marc Dutroux, the chief suspect in the country's child abduction, sex and death scandal, a police spokesman said. "We discovered bones, probably of a human nature," Gendarmerie spokesman Major Jean-Marie Boudin told reporters. Police have been digging in and around the house in the Charleroi suburb of Jumet for a week. The house is one of six owned by Dutroux. Public Prosecutor Michel Bourlet, leading the hunt for a suspected paedophile sex gang and its victims, was at the site, as was the Charleroi police pathologist. The bodies of two eight-year-old children were found alongside that of an adult accomplice of Dutroux on August 17 at a house owned by Dutroux in Sars-La-Buissiere south of Charleroi. No human remains had been found previously at the house in Jumet. 7773 !GCAT !GCRIM Belgium reeled in horror from the discovery of the dead bodies of two more girls, taking the total so far to four, in the paedophile abduction, sexual abuse and murder case that has sparked an international hunt. The badly decomposed bodies of teenagers An Marchal and Eefje Lambrecks were found on Tuesday buried in a metal container 2.5 metres under a shed in the garden of a house in Charleroi owned by convicted rapist Marc Dutroux. Dutroux has admitted kidnapping the two on August 22 last year with accomplice Michel Lelievre who is also under arrest. The house in the Jumet suburb of the city of Charleroi where they were found was formerly occupied by Frenchman Bernard Dutroux, an accomplice whom Dutroux admits killing and who he accuses of the murders. Harry Jongen, a Dutch specialist in finding buried corpses who is helping Belgian police, said a credit card belonging to Dutroux was found with the bodies. The girls were identified by a wristwatch belonging to Eefje, and their dental records. The bodies were taken in white coffins back to their home town of Hasselt late on Tuesday as Belgium went into mourning for the second time in two weeks. Prime Minister Jean-Luc Dehaene sent sent his condolences to the parents of the two and pledged to never let the fate of the girls be repeated. "This is truly monstrous. We must do everything we can to make sure this doesn't happen ever again," he said. Paul Marchal, An's father, said it was clear the girls had been dead for a considerable time. Belga news agency, citing official sources, said they had been dead since the autumn. Tuesday's grim discovery followed that of the bodies of eight-year-olds Julie Lejeune and Melissa Russo and of Weinstein on August 17 at a house owned by Dutroux in Sars-La-Buissiere, south of Charleroi. Dutroux said the two children, abducted in June 1995, starved to death earlier this year. They were buried in what amounted to a state funeral in Liege on August 22. Two other girls, Laetitia Delhez and Sabine Dardenne, were rescued from another of Dutroux's houses 12 days ago. Both had been sexually abused. The governor of Arlon jail where Dutroux is being held said he was being monitored every seven and a half minutes, day and night, to stop him committing suicide. British "House of Horrors" serial killer Fred West hung himself in jail before he could be tried. Several other Belgian girls have gone missing in recent years. Their files are all now pooled in Neufchateau, nerve centre of the international paedophile investigation. The discovery of the paedophile web has stunned the country, prompted the government to tighten rules on early release of sex offenders and triggered calls for a global war against the child sex trade. The fact that Dutroux was released early from a 13-year sentence for child rape, and that he has fathered three children by his two wives, has bewildered adults and children alike. There have also been allegations of police bungling or worse. One of the people held is chief detective Georges Zicot. The hunt for missing girls has spread well beyond Belgium's borders. Investigators have visited Slovakia and the Czech Republic and contacted colleagues in Austria and Germany. Authorities in Bratislava suspect Dutroux of the murder of a Slovak woman and the planned kidnapping of at least one other. Nine people are now under arrest in the Belgian affair, including Dutroux's second wife Michelle Martin. Police have found trench-like cells allegedly for holding kidnapped children in one of Dutroux's houses and seized more than 300 paedophile porn video tapes -- some featuring Dutroux himself -- plus magazines, childrens clothing and a gun. On Tuesday, as the bodies of An and Eefje were being unearthed, police began new searches in Keumiee near Namur and Jemappe-sur-Sambre near Charleroi -- the former home of Dutroux' parents. There were no immediate results. 7774 !GCAT !GPOL !GVOTE Yannis Manolis, vice-president at the General Confederation of Greek Workers Union (GSEE) will be a candidate with the conservative New Democracy (ND) Party in the second district of Athens, he told Reuters. Manolis, a member of the social and economic committee, is also a leading figure of the conservative DAKE union and an advisor of ND party president Miltiadis Evert on labour issues. --Dimitris Kontogiannis, Athens Newsroom +301 3311812-4 7775 !GCAT !GPOL !GVOTE Professor George Bitros, an economics professor and aide to former conservative minister Andreas Andrianopoulos, will be a candidate in the first district of Pireaus with the conservative New Democracy party, he told Reuters. Bitros is an advisor of New Democracy party president Miltiadis Evert on economic affairs. --Dimitris Kontogiannis, Athens Newsroom +301 3311812-4 7776 !C42 !CCAT !E21 !E211 !E41 !ECAT !GCAT !GJOB There may be scope for another income tax cut in connection with the next incomes settlement talks, due in autumn next year, Prime Minister Paavo Lipponen told a news conference on Tuesday. The government on Tuesday presented its 1997 budget which will lower income taxes by 5.5 billion markka. The total tax rate will fall 0.5 percentage points to 48 percent. Asked when income taxes could again be lowered, he said: "Next round of incomes settlement talks, then it can be about lowering income taxes if there is will to reach a comprehensive all-round agreement." The previous pay talks in 1995 produced a two-year settlement which has increased and will increase wages moderately and -- at least so far -- has created little or almost no inflationary pressures, economists say. Moderate labour cost increases are key for employment and the government may also lower employers' social security contributions, Lipponen said. "The most important thing for employment is to keep labour costs under control," he said, adding that studies by the Government Institute of Economic Research (VATT) suggested that the difference between a two percent increase and status quo in labour costs was 100,000 jobs. --Roland Moller, Helsinki newsroom +358 0 6805 0247 7777 !GCAT !GPOL !GVOTE Incumbent Socialist Prime Minister Costas Simitis said his government would push for a new and more productive Greece if his PASOK party won the September 22 snap vote. "There are two Greeces: The Greece of hard work and productivity with both eyes set in the future and the Greece of corruption, misery and easy money. We choose the Greece of the future," he told a party meeting. Simitis laid out PASOK's new targets, 22 years after the late Andreas Papandreou founded the party on September 3, 1974. "We want a united Europe with common foreign and defence policy not only to safeguard us from Turkish threats but for a safer world in general," he said. Simitis said Greece should participate in the European Union's integration from the start and play a leading role in the Balkans for peace and stability. "If our Balkan neighbours can't look up to us then they will turn elswhere, to Turkey. We need a foreign policy with an open line to Washington, Moscow, Brussels, Israel and the Arabs. With an open line to Sofia, Bucharest and Belgrade," he said. Simitis said his government would push for the modernisation of the country's armed forces if PASOK won the elections, to deter any Turkish moves in the Aegean Sea or Cyprus. He called for above-inflation pay rises in the public sector and a push to attract foreign investments, Simitis said he would announce his specific plans on the economy and foreign policy at a news conference on Wednesday at Zappion Hall which will start at 12:00 local time. --Costas Paris, Athens Newsroom +301 3311812-4 7778 !E21 !E211 !ECAT !GCAT !GPOL Finnish Finance Minister Sauli Niinisto said on Tuesday he expected the parliament to approve the government's 1997 state budget proposal so that the deficit would not widen. "I think that the essential elements from the finance minister's point of view will remain on target. There will certainly not be any cracks," he said, adding he was referring to the deficit. The five-party left-right-green government's budget proposal was introduced on Tuesday as the parliament reconvened for its autumn session. The 200-member legislature's opening budget debate is due to start next Tuesday. After this debate the budget moves to various parliamentary committees and it is scheduled to come back for final approval in December. The 1997 budget put total spending at 191 billion markka and the deficit at 29 billion markka. --Helsinki Newsroom +358 - 0 - 680 50 245 7779 !E12 !ECAT !G15 !G151 !G154 !GCAT !GPOL !M13 !M132 !MCAT The Finnish government's economic policy minister committee did not at its meeting on Tuesday discuss Economic and Monetary Union or Europe's exchange rate mechanism, European affairs minister Ole Norrback said. "They were not even on the agenda," Norrback told a Reuters reporter when asked whether the committee had discussed issues relating to EMU or ERM. The committee grouping key ministers in the left-right-green government including the Prime Minister and the Finance Minister met on Tuesday morning. Norrback is on the committee because he is chairman of one of the five coalition parties. Prime Minister Paavo Lipponen said last Friday a decision whether to link the floating Finnish markka to ERM would be made in the near future. He did not specify which decision-making body would rule for or against an ERM peg. The economic policy minister committee is the chief political body preparing economic policy decisions. If Finland decided to link the markka, the formal decision would be made by the full government on the Bank of Finland's proposal. Some analysts say ERM membership is a condition for participation in the third stage of EMU. Finland has repeatedly said it wants to be part of EMU from the start in 1999. The goverment on Tuesday released an updated convergence programme outlining the path towards EMU. It said Finland had good prospects for fulfilling the EMU criteria, but was silent on ERM. --Helsinki Newsroom +358 - 0 - 680 50 245 7780 !GCAT !GPOL The ruling socialist PASOK party has a narrow lead in the Greater Athens area ahead of national elections in three weeks, according to an opinion poll by Flash radio. PASOK had 29.7 percent backing and the main conservative New Democracy party 26.2 percent in the poll of 1,200 people between August 27 and September 1 in Greater Athens and Piraeus. Smaller parties, especially on the left, had a strong showing in the poll. The Coalition of the Left had six percent, the new left-wing DHKKI party -- which split from PASOK -- had 5.9 percent and the Communist Party had 5.3 percent. The nationalist Political Spring party, which split from New Democracy, had 3.5 percent. A party must score at least three percent of the national vote to win a seat in parliament. --Athens Newsroom +301 3311812-4 7781 !GCAT Leading stories in the Greek financial press: FINANCIAL KATHEMERINI -- Telecom organisation (OTE): Thoughts about an interim dividend. The distribution of the dividend to investors will take place by end-September in cash or shares -- Sales of T-bills exceed 750 billion drachmas. -- Five more banks cut interest rates IMERISIA -- Injection of 750 billion drachmas from T-bills. -- Hilton International plans to give up on Corfus -- Crude oil shoots up to $21.99 per barrel KERDOS -- The drachma at the centre of pre-election fighting. Conflicting statements on foreign exchange policy -- Demand for new state debt paper is high EXPRESS -- We need a new EU convergence plan till 2002 says Andreas Kanelopoulos, chairman of the Greek Industrialists Union (SEB) -- Profit taking drags the general index down at the Athens bourse NAFTEMBORIKI -- Support of 750 billion drachmas to state drachma titles. New sales exceed maturities of 606 billion drachmas -- The EU is suddenly re-examining the cabotage issue --Dimitris Kontogiannis, Athens Newsroom +301 3311812-4 7782 !GCAT !GDIP !GVIO Canada voiced support for the U.S. cruise missile attack on Iraq on Tuesday, and said Iraqi President Saddam Hussein may only understand force. "An intervention of this nature was necessary to avert a larger human tragedy in northern Iraq," Prime Minister Jean Chretien said in a statement. "I think we knew the history and background of Saddam Hussein. I think his interest in provocation and these kinds of transgressions are both prevalent and almost Pavlovian," Foreign Minister Lloyd Axworthy told a news conference. "Perhaps the only thing he understands is when you provide the kind of forceful reaction so you can draw a line where he has to stand, and we hope that he will get the message," he said. Chretien said: "Saddam Hussein has cynically used local Kurdish groups to move his forces into the no-fly zone, and launch a massive attack on Arbil. "The use of cruise missiles against military targets constitutes a measured and clear response to Iraqi military actions, while ensuring to the extent possible the safety of civilian populations in Iraq." Canadian forces took part in Desert Storm, the 1991 operation that drove Saddam out of Kuwait. Chretien called on Saddam to "withdraw his troops immediately and completely from the Kurdish regions in the north, and to end his oppression of the civilian Iraqi population, especially in the northern region." Axworthy said two private Canadian trade missions were hastily leaving Iraq and Canada was complying with U.N. Secretary-General Boutros Boutros-Ghali's suspension of plans to implement an oil-for-food deal for Iraq. Asked whether Canadian troops might be drawn into the conflict, he said the question was hypothetical and he hoped the action taken so far would be enough to deter Saddam. 7783 !GCAT The following are top headlines from selected Canadian newspapers. Reuters has not verified these stories and does not vouch for their accuracy. THE GLOBE AND MAIL: - U.S. approves strike against Iraq: Swift, hard retribution urged in wake of Hussein's action in Kurdish-controlled areas. - Chechen accord gaining strength: Too late to stop deal, analyst says. - Atlantic seamen dip nets off British Columbia: Eastern wave upsets the locals. - Rural MDs' burden grows with cutbacks: Hospital closings in Alberta drive country doctors away with little hope of replacements. - Germans indulge their love of Wild West: Anxious to profit from that German fascination with cowboys and Indians, a promoter from Nevada organized Indian Summer, a weekend festival celebrating the Wild West and things native. Report on Business Section: -Potash Corp to buy Arcadian Corp: C$1.18-billion deal tops Freeport-McMoRan's bid to acquire leading fertilizer producer. - Canadian Radio-television and Telecommunications Commission set to licence more TV channels: Forty applicants await decision. - Home on the links: Communities that combine upscale housing and golf courses are catching on with baby boomers. - Summitville probe looks beyond Friedland: Robert Friedland may not be the only target of a massive U.S. investigation into an environmental catastrophe at a Colorado gold mine. THE FINANCIAL POST: - Nova, U.S. firm to build US$700M Chilean pipeline: Nova Corp of Calgary and CMS Energy Corp of Dearborn, Mich., have agreed to build a US$700-million natural gas pipeline from northern Argentina to Chile to power Chile's fast-growing mining sector. - IBM again leads PC pack: Aggressive approach pushes Compaq out of No. 1 spot in first half of 1996. -- Reuters Toronto Bureau 416 941-8100 7784 !GCAT For the week of Sept 2, here are some of the top stories reported in major U.S. technology trade publications. ----------- PC WEEK - IBM is recharging its mainframe computer into a server with increased scalability, better performance and hardware and software links to the Internet, with a series on product announcements, including a System/390 product launch next week and others from the AS/400 family and the RS/6000 workstation line, PC Week reported Sept 2. IBM's final release of OS/2 Warp 4, code-named Merlin, revealed an improved operating system that will be a compelling upgrade for current corporate OS/2 users, PC Weeks Labs reported in the September 2 issue. ---------- INFOWORLD - In the next few weeks, Microsoft Corp will announce plans to lay the foundation for distributed application development on its popular Windows 95 operating system, which would enable software developers to write to communication services instead of building connectivity into the applications. NCR Corp., which will be spun off by AT&T Corp at the end of the year, will unveil a new server designed around Intel Corp's PentiumPro processor, ushering in a new level of PC computing by linking two four-processing PentiumPro boards, resulting in an eight-way processing server, InfoWorld reported in its Sept. 2 issue. ----------- INFORMATION WEEK - The intense rivalry between Computer Associates and IBM's Tivoli Systems was turned up a notch last week when CA announced partnerships with Intel Corp, Tandem Computer Systems and Vanstar, Information Week reported in its Sept. 2 issue. Novell Inc needs a more dynamic leader who will push products out the door faster and articulate a clearer message that former CEO Bob Frankenberg was able to deliver, Information Week reported in its Sept 2 issue. ---------- COMPUTER RESELLER NEWS - Ingram Micro Inc is formalizing a large accounts program for computer resellers, in a move to compete on a new level with master reseller/systems integrators, CRN reported in its Sept. 2 issue. The abrupt departure of Novell CEO Bob Frankenberg amid poor sales is raising questions about the once-mighty networking company's future, CRN reported in its Sept 2 issue. IBM will begin bundling its collaborative computing software, Lotus Notes, and Internet products, with its AS/400 minicomputer line, in a move seeking to aggressively expand its base on Notes users and reposition the AS/400 family, CRN reported in its September 2 issue. ------- COMPUTERWORLD - Bay Networks Inc CEO and president Andy Ludwick dismissed widespread reports of his impending resignation, in an interview with Computerworld. Speculation has been rampant since Bay's meeting with analysts in July, when Ludwick described his succession plans and since Bay reported a disappointing fourth quarter, Computerworld reported in its online edition, on August 30. Iomega Corp will introduce this week the Ditto drive, the next piece in its line of peripheral storage products that fills out the rest of its product line, Computerworld reported in its online edition August 30. Toshiba Computer Systems will announce a home desktop computer line September 10, and then will jump into the corporate desktop and server markets in the first quarter of 1997, Computerworld reported in its online edition August 30. ---------- ELECTRONIC ENGINEERING TIMES - A group of over 25 semiconductor and computer companies will announce Tuesday an alliance for developing system on a chip that will foster standards that will let users combine intellectual property from multiple sources onto one chip, EE Times reported in its Sept. 2 issue. Digital satellite TV will have its first serious competitor next month when Tele-Communications Inc, General Instrument Corp and other cable providers launch the first digital cable TV service to cable viewers in Hartford, Conn., beginning in mid-October, EE Times reported Sept 2. --------- ELECTRONIC BUYERS' NEWS - The flash memory chip market is being stampeded by relative newcomers who are poised to begin marketing flash devices by the end of 1996 or early 1997, including Hyundai, Micron Technology Corp, Mitsubishi, NEC, and Texas Instruments Corp. The new players will be competing with Intel Corp and Advanced Micro Devices which together account for two-thirds of the market, EBN reported in its Sept 2 issue. A boost in production and orders put the electronics industry back in a growth mode in August, according to Electronic Buyers' News QUEST composite index, which measures growth and contraction in the industry, EBN reported Sept. 2. As the PC industry gears up for the Christmas shopping season, analysts are already warning that this year's market is nothing to get excited about, but not because they foresee weak sales, but they are concerned that PC makers will flood the market with too much product, EBN reported Sept 2. 7785 !C12 !C13 !CCAT !GCAT !GCRIM A federal regulator said that Augustus Cavallari, former legal counsel of Summit National Bank, of Torrington, Connecticut will pay $425,000 to settle charges that he had engaged in unsafe practices. The Office of the Comptroller of the Currency's action represents the first OCC litigation against an attorney under a 1989 law designed to recover money from failed financial institutions. The OCC said in a statement the administrative action against Cavallari was the last in a series of actions brought against individuals associated with the Penta Group institutions in Connecticut with over $1.2 million recovered. 7786 !C12 !C13 !CCAT !GCAT !GCRIM Philip Morris Cos Inc said it is cooperating fully with the U.S. Department of Justice investigation of the cigarette industry. In response to recent news accounts, the company said none of its executives have failed to cooperate with the government and none have been asked to testify before a grand jury. Philip Morris said it can again confirm it has been served subpoenas for documents and certain employees have been subpoenaed to give testimony. These employees are cooperating with the government as well, the company said. Philip Morris said it is concerned the sources for inaccurate news accounts are said to be "government officials." Recent news accounts the company called inaccurate claim Philip Morris executives have been subpoenaed to testify before a grand jury after failing to cooperate with government investigators. 7787 !C12 !CCAT !GCAT !GCRIM Publicly traded corporations that are sued by the government stand to lose money no matter how the lawsuit turns out, according to a university study released on Tuesday. The study of 618 lawsuits involving publicly held corporations found lawsuits brought by the Environmental Protection Agency, violations of securities laws and product liability to be the most damaging, said Sanjai Bhagat, finance professor at the University of Colorado at Boulder. "Those types of lawsuits are what really hurt shareholders," Bhagat said in a statement. The study was co-authored by finance professors John Bizjak of Texas A&M University and Jeffrey Coles of Arizona State University. The study of lawsuits brought between 1981 and 1983 resulted in defendant companies losing almost one percent of market value or nearly $16 million. The authors said the general legal climate has not changed significantly since the early 1980s. According to the study all kinds of lawsuits against a corporation hurt, but ones brought by the government were the most severe because government lawyers do not have the same incentives to settle a lawsuit and government agencies are less likely to face financial or legal constraints in pursuing legal action. "When the government sues they have clout. They're not going to go away just because you want to settle," Bhagat said. 7788 !C13 !CCAT !GCAT !GENV !GPOL Maine's legislature plans to take up three bills at a special session on Thursday, but most of the attention remains focused on the governor's plan to reduce clear-cutting in forests, officials said on Tuesday. Saying that the session is more controversial than previous ones, a spokesman for Gov. Angus King explained that some legislators believe voters should be given a chance to approve or reject a stiffer bill proposed by the Green Party. "What we're asking the legislature to do is to simply put it on the ballot and let voters vote on it," said Dennis Bailey on Tuesday. He said the clear-cutting measure proposed by the governor, which would restrict the practice to a 75-acre lot instead of the current 250-acre limit, represents a consensus between landowners and environmental groups. "The Green Party's ban goes too far and really hurts the industry," he said, adding the competing measure also would impose overly severe curbs on how the industry runs its forests, with measures limiting new roads, for example. If the legislature approves adding the governor's bill to the ballot, Maine's voters will be able to choose between the different measures proposed by the governor and the Green Party or reject them both. During the special session, which is expected to end as soon as Friday, the legislature also will weigh a technical bill designed to ensure the state can accept block grants mandated by the sweeping new federal welfare bill. If Maine's technical measure is not approved, the state could lose from $9 to $12 million in federal aid, explained the spokesman for King. King is an Independent. Further, the legislature will decide whether to provide the C.F. Hathaway Co factory, which is owned by the Warnaco Group and located in Waterville, with tax breaks, in an effort to keep the unprofitable plant open. The measure, proposed by state Senator Richard Carey, D-Waterville, would let the factory obtain as much as 50 percent of the state income taxes paid by its employees as the town's unemployment rate is higher than that for the state. A group of investors led by Maine's former governor, John McKernan, who is the husband of U.S. Senator Olympia Snow (R-Maine), is negotiating to buy the factory, which now employs about 450 workers. The new owners could have no connection with the present group if they wished to qualify for the tax break. The new investors also are in talks with Waterville, in an effort to sell the factory, which has an assessed value of about $1.66 million, to the town for approximately $4 million, Carey said. "They're negotiating that down, hopefully," he said, adding that approximately $1.6 million is available in state and federal funds to help pay for the purchase. --Joan Gralla, 212-859-1654 7789 !C13 !CCAT !E41 !ECAT !GCAT !GJOB The flight attendands union will file a challenge with the Transportation Department over its tentative approval to allow ValuJet Airlines to begin flying again, a union spokeswoman said on Tuesday. The spokewoman for the Association of Flight Attendants declined to disclose the details of the challenge, which will be in a letter to be sent on Wednesday to the department's Inspector General. The Atlanta-based airline was grounded on June 17 because of a series of safety shortcomings uncovered after the crash of a ValuJet DC-9 on May 11 in Florida, killing 110 people. Last Thursday, federal transport officials said the airline had met safety, management and financial standards in demonstrating it was ready to resume flying. It gave the low-cost airline tentative approval, subject to a 7-day comment period, before making it final. The flight attendants have previously complained that the carrier's top management -- president and chief operating officer Lewis Jordan and chairman Robert Priddy -- did not meet the Transportation Department's standards for running an airline. They blamed the two for ValuJet's safety lapses. The department, asked about this at a briefing last Thursday, said the two men had good safety records over their aviation histories. 7790 !GCAT !GPOL !M14 !M143 !MCAT The U.S. Energy Department said Tuesday it was monitoring oil markets closely and the White House has consulted with it on energy issues in the wake of the U.S. missile attack on Iraq. "The Energy Department and the administration are monitoring the situation very closely and watching the markets, and we have not ruled anything in nor have we ruled anything out," said department spokesman Bill Wicker. "The White House has been in touch with the Department of Energy, and we have been in close contact all day long," Wicker said. The department declined to comment until late in the day. Wicker said he could not comment on the reaction to the Iraq situation in the NYMEX markets, where October crude oil closed up $1.15 to $23.40 a barrel, off a contract high set earlier in the day of $24.25 a barrel. Analysts said the market jumped mostly because the conflict may delay indefinitely a deal to allow Iraq to sell $2 billion of oil to buy food and medicine for its people. The most obvious tool at the administration's disposal if it felt oil supplies were threatened or market disruptions were too severe is the Strategic Petroleum Reserve. Wicker also had no direct comment on the reserve, saying its use was up to the White House. The government oil reserve can be tapped to increase supplies and keep prices in check. Rep. Dan Schaefer, R-Colorado, who chairs a House Commerce Energy subcommittee, earlier Tuesday said the Iraq situation highlighted the importance of the reserve. Schaefer has opposed efforts to sell reserve oil to raise money to help defray the federal deficit. "We tend to get comfortable, when we need to make sure that we are protecting ourselves against an energy crisis, and the best way to do that is with SPRO," Schaefer's spokeswoman said. 7791 !GCAT !GENV !GWEA The National Hurricane Center said Tuesday a hurricane watch could be issued for part of the southeastern United States Tuesday night or Wednesday, as Hurricane Fran headed west-northwest through the Atlantic. At 5 p.m. EDT (2100 GMT), Fran's center was near latitude 25.4 north, longitude 72.9 west, or about 285 miles (460 km) east of Nassau in the Bahamas, and moving west-northwest near 13 mph (20 kmh). Forecasters said they continued to expect a gradual turn toward the northwest expected Tuesday night or Wednesday. Maximum sustained winds were near 105 mph (165 kmh), making Fran a Category 2 hurricane, and further strengthening was expected during the next 24 hours. Hurricane force winds extended outward up to 70 miles (110 km) from the center and tropical storm force winds extended outward up to 230 miles (370 km). A hurricane watch was in effect for the northwestern Bahamas and a hurricane watch and a tropical storm watch were in effect for the central Bahamas from Acklins Island to Cat Island. 7792 !E41 !ECAT !GCAT !GJOB Negotiations between Northwest Airlines Corp and Teamsters Local 2000, which represents flight attendants, are scheduled to begin Wednesday, the union said Tuesday. The current contract expired August 1, Teamsters said. A survey of more than 6,000 flight attendants indicated the most important issues in the negotiations were compensation, retirement and scheduling flexibility, Teamsters said. --Chicago newsdesk, 312 408-8787 7793 !C42 !CCAT !E41 !ECAT !GCAT !GJOB More than 550 unionized workers went on strike at an assembly and shipping facility of Recoton Corp's Calibron Division in Lake Mary, Florida, union representatives said Tuesday. The Glass, Molders, Pottery, Plastics & Allied Workers said Local Union 184 and supporters had stopped working because Recoton allegedly tried to remove workers from the bargaining table while negotiating the purchase of a company. The union said it planned to charge the company with unfair labor practice as well as launch a nationwide campaign to protest against its labor relations. Recoton, which provides audio and video electronics gear to companies like Blockbuster, recently bought International Jensen Inc for $85 million. -- New York Newsdesk 212 859-1610 7794 !C12 !C17 !C171 !CCAT !GCAT !GCRIM Pyramid Breweries Inc, which before May operated under the name Hart Brewing Inc, was sued Tuesday in a class action suit alleging misrepresentation and insider trading. The suit, filed by a Pyramid shareholder in the California Superior Court, charges the company misled investors about its growth potential at the time of its initial public offering last December. Pyramid, then known as Hart Brewing, went public with 2.6 million shares sold at $19 per share. Pyramid's shares are currently selling around 6-3/4. The suit specifically charges the company generated interest in its public offering by stating that stong earnings growth would continue into 1996. It says such statements helped push the stock price as high as 22-1/2 before concerns over operations began to surface, causing it to plummet. 7795 !C12 !CCAT !GCAT Talley Industries Inc said Tuesday it received a final $16.6 million payment from TRW Inc settling all outstanding litigation between the two companies. Talley said it already received $140 million from TRW. The settlement resolved six years of lawsuits including patent litigation and a local real estate dispute. Specific terms of the settlement were not available. 7796 !E21 !ECAT !GCAT !GCRIM The first criminal trial arising from the largest municipal bankruptcy in U.S. history neared an end on Tuesday as attorneys in Orange County presented their closing arguments. Former Orange County Budget Director Ronald Rubino, 44, was indicted by a county grand jury in December for allegedly aiding former county Treasurer Robert Citron in diverting funds from other government agencies for the county's benefit. Prosecution and defense attorneys presented their closing statements on Tuesday. The jury could begin its deliberations later this afternoon. Prosecutor Jan Nolan wrapped up the county's case, challenging the defense assertion that Rubino did not know about the alleged diversions. "You get the idea that this was no big secret," Nolan told the jury in Santa Ana, California. "They're skimming money ... and having meetings discussing how to do it. That's how cavalier things had become." Defense Attorney Rodney Perlman asserted that his client was unaware of the alleged diversion scheme and never thought to second-guess Citron, whom Rubino admired and respected. "Ron Rubino was an employee of county government ... getting information from a man beyond reproach with immense personal integrity and great success. That's the context in which all this takes place," Perlman said. "The evidence shows that while this diversion was going on it was not in any way done with Rubino's knowledge," he said. "The government knows that and its evidence proves nothing." Rubino, who has denied any wrongdoing, faces up to nine years in prison if convicted on the felony counts. Rubino is one of several former and current county officials formally accused with wrongdoing in connection with the bankruptcy. He was the first to go on trial. Orange County filed for protection under Chapter 9 of the federal Bankruptcy Code on December 6, 1994 after sustaining investment losses of more than $1.6 billion. The county emerged from bankruptcy in June of this year. During the Rubino trial, which began in early August, the prosecution portrayed the former county budget director as an ambitious county employee who helped to divert millions of dollars away from cities and school districts. The defense presented Rubino as an honest and highly-respected public servant. Citron, who was expected to be a key witness against Rubino, testified that that he never discussed with Rubino the alleged scheme to divert funds. 7797 !C15 !C152 !C42 !CCAT !E41 !ECAT !GCAT !GJOB In its new contract with American Airlines pilots, AMR Corp negotiated some productivity gains but the deal could still hold back airline's ambitious growth plans, analysts said. The contract -- a tentative agreement struck with union leaders on Monday after two years of talks -- will give pilots modest wage increases, new stock options and job protection. Management won scheduling and work-rule concessions. Most analysts said the pact would narrow but not eliminate American's cost disadvantages vis-a-vis other airlines. "It is not enough for American to begin a big expansion program that (Chief Executive Officer Robert) Crandall has talked about," said Glenn Engel, an analyst at Goldman Sachs. Crandall had repeatedly said he would not launch his expansion plans until he negotiated a contract with the pilots, and all orders for new jets were put on hold. With the deal still requiring approval of the Allied Pilots Association board of directors and its 9,400 members, neither American Airlines nor the APA would release details of the pact, which will run until August 2000. But American Airlines was forced to drop its plans to set up a low-fare short-haul unit in which pilots would take a pay cut of up to 30 percent. AMR shares opened 2-3/4 lower on Tuesday but rebounded in later trade and were down 1/4 at 81-3/4 by midafternoon. Analysts said it was difficult to assess the package until the details of work-rule changes were released. They said the problem with pilot contracts was not that they are paid too much to fly but rather that they are paid to much not to fly. Analysts said AMR would likely begin ordering regional jets for American Eagle once APA pilots approve the new contract, but that the new contract did not radically change American's cost structure and would not fuel rapid growth. "It doesn't give them huge amounts of incentive to increase capacity," said James Higgins, an analyst with Donaldson Lufkin and Jenrette. He said the contract would limit American's ability to compete in some short-haul markets, especially the point-to-point routes that do not feed its longer system. It was not clear what the new contract deal would do to American's marketing agreements with Reno Air Inc and Midway Airlines Inc. American currently allows those carriers to give American AAdvantage frequent-flier miles to their passengers. Pilots complained that American was effectively "out-sourcing" their jobs. During the negotiations, the airline offered to walk away from the marketing agreements, but not until 2005. Union leaders wanted the agreements abandoned as soon as possible. 7798 !GCAT !GWEA The extratropical storm that was formerly Edouard is still a risk to shipping as it moves south of Nova Scotia and out to sea this period. Winds up to 55 mph were still being reported. Seas in the region are quite rough. Hurricane Fran is becoming a concern to the Bahamas and the southeastern USA. A Huricane Watch and a Tropical Storm Warning is in effect fro the central Bahamas, including Acklins Island, Long Island, San Salvador, Great Exuma, and Cat Island. Fran is currently centered about 395 miles east of Nassau in the Bahamas, and moving west northwest at 13 mph. Top winds are 80 mph and some strengthening will likely occur during the next 24-36 hours. At this time Fran is only a threat to shipping and boating east of the Bahamas, but all interests in the Bahamas and in the coastal southeastern USA should monitor the progress of the storm. In the eastern Pacific, Tropical Storm Elida is only a threat to shipping. The storm, currently about 210 miles south of the southern tip of Baja California is moving slowly to the northwest, and is expected to continue this motion while strengthening during the next couple days. Tropical Storm Orson is transitioning into an extratropical weather system at this time as it tracks northeastward at 25 mph near 41n/145e. This system is becoming less and less of a threat to shipping and should become fully extratropical by 24-36 hours. 7799 !C15 !C152 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Precision Systems Inc said on Tuesday it expected to report a restructuring charge of $22 million to $25 million and an additional charge for job cuts for the fiscal year ended August 31, 1996. The non-cash restructuring charge is related to an evaluation of previous acquisitions made by the company. The company is taking a $1 million cash charge for the elimination of 60 jobs worldwide and for the relocation of 10 employees. 7800 !C12 !CCAT !GCAT !GCRIM A plaintiff sued Housecall Medical Resources Inc on behalf of purchasers of common stock from April 4, 1996 to August 28, 1996 in a class action, the law firm of Appel, Chitwood & Harley said Tuesday. The suit, filed in U.S. District Court in the northern district of Georgia, accuses Housecall, its officers and directors, and the lead underwriters of the company's initial public offering, of misrepresentation and omissions. Housecall Medical had its initial public offering of 3.6 million shares, up from 3 million, at the beginning of April 1996, pricing at $16 per share, above an estimated range of $13.50 to $15.50. The deal was managed by lead underwriter Merrill Lynch & Co. In early afternoon trading Tuesday, shares of Housecall Medical were down 1/4 to 7. A spokesman for Housecall was not immediately available to comment. 7801 !C11 !C15 !C151 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Advanced Energy Industries Inc said on Tuesday it is cutting personnel and carrying out a number of programs to keep costs in line with customer demand. The company said it will take a pretax restructuring charge of about $750,000 in the third quarter, for costs including severance compensation, costs to consolidate facilities and other related costs. The company said it is responding to recent declines in orders to the semiconductor capital equipment market. Advanced Energy said it is reducing its headcount by 7 percent, including 21 full time and 23 temporary positions. Also, the company said senior management recently initiated a 10 percent decrease in their salaries. The company said other cost control measures will be implemented as necessary, including a reduction in leased facilities. 7802 !C12 !CCAT !GCAT Bergen Brunswig Corp said it had won a $3.4 million jury verdict last week from Milton and Barbara Sloban, former owners of the Drug Barn pharmaceutical chain. In a statement on Friday, the pharmaceutical company said the verdict was handed down in San Francisco Superior Court. Bergen Brunswig had lent Drug Barn $5 million from 1988 to 1992 and the Slobans had personally guaranteed the debt. Drug Barn went into Chapter 11 bankruptcy in July 1993 and the couple had paid back part of the debt. "The company's lawsuit against the Slobans provided Bergen Brunswig with the balance of the $5 million note," the statement said. -- New York newsroom, (212) 859-1610 7803 !GCAT !GWEA All Hurricane and Tropical Storm Warnings have been lifted along the coast of the Northeastern United States as Tropical Storm Edouard tracks northeastward toward Nova Scotia. Top winds are near 70 mph. Edouard will continue to steadily weaken and should transition into an extratropical gale center within 24-48 hours. Heavy rains and gusty winds are expected through Nova Scotia over the next 24 hours, possibly causing some localized flooding. Hurricane Fran is becoming a concern to the Bahamas and the southeastern USA. A Huricane Watch and a Tropical Storm Warning is in effect fro the central Bahamas, including Acklins Island, Long Island, San Salvador, Great Exuma, and Cat Island. Fran is currently centered about 495 miles east of Nassau in the Bahamas, and moving west northwest at 13 mph. Top winds are 80 mph and some strengthening will likely occur during the next 24-36 hours. At this time Fran is only a threat to shipping and boating east of the Bahamas, but all interests in the Bahamas and in the coastal southeastern USA should monitor the progress of the storm. In the eastern Pacific, Tropical Storm Elida is only a threat to shipping. The storm, currently about 330 miles southwestof the southern tip of Baja California is moving slowly to the northwest, and is expected to continue this motion while strengthening during the next couple days. Tropical Storm Orson is transitioning into an extratropical weather system at this time as it tracks northeastward at 25 mph near 41n/145e. This system is becoming less and less of a threat to shipping and should become fully extratropical by 24-36 hours. 7804 !GCAT The North American box office pulled out of a seven-week nose dive over the weekend, Daily Variety reported on Tuesday. The box office rose on the wings of Walt Disney Co's "The Crow: City of Angels," which becomes the highest Labour Day weekend opener ever. "City of Angels" soared to an estimated $10.1 million take for the four-day frame. Although its $10.1 million estimate appears slightly optimistic -- given the 20 percent drops the film suffered both Friday to Saturday and Saturday to Sunday -- the picture will inevitably surpass the Labour Day Holiday record of $7.5 million set last year by "The Prophecy." The newspaper also reported: * Hugh Grant, who just completed the thriller "Extreme Measures," for Turner Broadcasting System Inc's Castle Rock, is in negotiations to star in "Love Crazy," a comedy that will mark the directorial debut of Nancy Meyers at Disney's Touchstone studio. * The combination of weak product and post-Olympic blahs saw August box office dip to a notch above $510 million, its lowest level in the past five years. * The Telluride Film Festival, the only important fest on the international calendar that never discloses its lineup before the event, once again rewarded the trust of its audiences with a flavorsome 23rd edition that served up a satisfying mix of international titles old and new. * While a group of cineastes and critics huddle on one end of the Lido to muse on film's ability to survive the onslaught of digital technology, a giant billboard for "Independence Day" from News Corp's Twentieth Century Fox a few blocks away shows a spacecraft hovering over Venice's Piazza San Marco. * Britain's Channel 5 Broadcasting has sent a loud warning shot across the bows of rival networks ITV and Channel 4 by appointing David Elstein, one of the heavyweights of British television, as its new chief executive. -- New York newsroom, (212) 859-1610 7805 !GCAT !GPOL Prime Minister John Major on Tuesday launched his fiercest attack yet on the opposition Labour Party's plan to give Scotland its own parliament, warning that it could even wreck Britain's centuries-old democracy. In a speech to businessmen at the start of a two-week pre-election swing, he said the proposed parliament's tax-raising powers would also destroy jobs and deter investors. "Today, life in Scotland is better. People need to ask themselves if it makes sense to risk the opportunities that lie ahead in favour of the most reckless and ill-thought out package this country has ever seen," Major, accompanied for the first time on a political tour by his wife, Norma, said. Far from helping reinvigorate British politics as Labour leader Tony Blair argues, Major said separate parliaments in Scotland and Wales would mark a step toward the break-up of the United Kingdom. "Good for democracy?" Major asked rhetorically. "That wouldn't be good for democracy -- a system that's envied around the world. It could destroy democracy." Major, who trails badly in opinion polls, took aim at two other central planks of Blair's preliminary manifesto -- plans to introduce a minimum wage and to adopt European Union laws on worker protection. "It's always tempting for politicians to sing the tune that people want to hear. To promise people new rights, new conditions at work, new minimum wages. It's easy -- but dangerous. Because all these carry a price tag. And the price tag would be in investment and jobs," the prime minister said. He said it was a line of attack to which the Conservatives, in power since 1979, would return "again and again and again" in the run-up to the election, now no more than eight months away. "Change, something different, something new might sound tempting. But new things, untried, untested, have a habit of going wrong," Major said. 7806 !C11 !C18 !C181 !C41 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Anglo-U.S. motor components manufacturer LucasVarity, created by the merger of Lucas Industries and Varity Corp, plans to shed a third of its senior management as part of a 115 million stg cost cutting plan, the Financial Times reported in its Wednesday edition. It said the group is expected to unveil a new management structure, confirming the loss of 50 operating and administrative management jobs. "There are 150 people for 100 jobs. We will only retain those who can perform," the newspaper quoted Victor Rice, the new chief executive of the company, as saying. Along with a further 450 redundancies elsewhere, the job cuts will be funded from provisions of 50 million stg this year and 65 million stg next year, the FT said, adding that Rice described these provisions as conservative. It said Rice has drawn up a strategy document that commits the group to doubling annual sales to 10 billion stg by 2005, with more than 50 percent of the turnover coming from Asia. The FT said Rice plans to mark the first stage of a strategic review of its braking, diesel, aerospace, electrical and aftermarket interests by naming seven new divisional managing directors an a new corporate management committee. LucasVarity forecast significant growth from its aerospace division, which remained a core business and could be expanded through bolt-on acquisitions, the paper added. It said Rice had confirmed LucasVarity was in talks to acquire Boeing's cargo handling division, but did not say when the deal might be completed. The group denied any target had been set for divestments, but Rice hinted that any business, which did not have "critical mass" was likely to be sold and he was focusing attention on underperforming parts of the aftermarket and electronic and electrical divisions, the paper said. -- Alexander Smith, London Newsroom ++ 44 171 542 7719 7807 !GCAT Following are some of the major events to have occurred on September 10 in history. 1487 - Julius III (Giovanni Maria Ciocchi Del Monte), Pope from 1550 to 1555, born in Rome. 1721- The Treaty of Nystad was signed in Finland between Sweden and Russia which ended the Great Northern War (1700-21). Sweden was forced to cede Livonia, Estonia and Ingria, part of Karelia. 1771 - Mungo Park, Scottish explorer and doctor who charted the course of the River Niger, born. 1890 - Franz Werfel, poet and novelist and member of the Expressionist Movement, born in Prague. In 1941, he wrote "Song of Bernadette", which was turned into a popular film. 1914 - Robert Wise, U.S. film director, born. Films included "The Day the Earth Stood Still", "The Sound of Music" and "West Side Story". 1915 - Edmond O'Brien, U.S. film actor, born. Starred in films such as "The Hunchback of Notre Dame", "D.O.A." and "White Heat". 1919 - The Treaty of Saint-Germain was signed by the victorious Allied powers and Austria, by which parts of pre-war German Austria were ceded to Italy and Czechoslovakia and Austria was forbidden to unite with Germany. 1929 - Arnold Palmer, one of the post-war golfing greats, born. Popular on both sides of the Atlantic, he attracted huge galleries known as "Arnie's Army". 1943 - In World War Two, German troops occupied Rome and took over the protection of Vatican City. 1945 - Vidkun Quisling, head of the puppet regime set up by the Nazis in Norway in World War Two, was found guilty of treason and sentenced to death. 1945 - Jose Feliciano, blind singer-guitarist who was largely self-taught, born in Puerto Rico. 1961 - A President Airlines aircraft flying from Shannon Airport in Ireland to New Zealand crashed into the River Shannon shortly after take-off, killing all 77 passengers and six crew. 1967 - The people of Gibraltar voted by almost 100 percent to retain British sovereignty, rejecting Spanish rule. 1974 - Portugal recognised the independence of Guinea-Bissau, under the leadership of Luiz Cabral. 1976 - A British Airways Trident jet and a Yugoslav DC-9 collided over northern Yugoslavia, killing 176 people. 1981 - The painting "Guernica" by Pablo Picasso was returned to Spain. Painted in 1937, it hung in New York since 1939 and commemorated the Nazi bombing of the Basque city-shrine of Guernica during the Spanish Civil War. Picasso vowed it would not enter Spain until democracy was restored. 1989 - Hungary opened its border to the West, allowing thousands of East Germans to leave in a mass exodus which led to the toppling of the Berlin Wall. 1990 - A dozen Arab states agreed to move the headquarters of the deeply divided Arab League back to Cairo from Tunis in a move by the group's anti-Iraqi camp to isolate Baghdad and its supporters in the Gulf crisis. 1993 - The body of former president Ferdinand Marcos was laid to rest on Philippine soil, encased in a glass casket and put on display, four years after he died in exile in Hawaii. 1994 - Pope John Paul made an impassioned plea for peace in the Balkans on his arrival in Croatia. The Pontiff was making the first papal visit to the region of former Yugoslavia. 1995 - NATO sent U.S. cruise missiles into action against Bosnian Serb anti-aircraft sites in a campaign to make the Serbs remove their siege guns from Sarajevo. Tomahawk missiles from the USS Normandy in the Adriatic were sent flying more than 200 km (160 miles) over the mountains of Bosnia to slam radar and missile positions near the Serb stronghold of Banja Luka. 7808 !GCAT !GENT !GPRO Former Beatle Paul McCartney was quoted on Wednesday as saying his wife Linda had won her battle against breast cancer. "She's doing incredibly well," he told The Daily Mirror newspaper. McCartney spokesman Geoff Baker said the singer-songwriter's American-born 53-year-old wife, who underwent an operation for the disease after a routine examination late last year, was feeling great and horseriding daily. Linda, a photographer, vegetarian campaigner and mother-of-four, has not been seen in public since the operation, leading to speculation that she was ill. McCartney's mother died of breast cancer when he was 14 years old. 7809 !C18 !C183 !CCAT !E12 !ECAT !GCAT !GDEF The Times newspaper said on Wednesday a consortium led by Japanese bank Nomura had won a deal worth an estimated 1.6 billion pounds ($2.5 billion) to buy 58,000 married quarters from Britain's Ministry of Defence. The ministry refused to confirm the report but acknowledged it had narrowed the number of potential bidders for the married quarters to just one from an original list of four. "We have a preferred bidder but no financial deal has been struck," an MOD spokesman said. "There is no firm price and no firm dates on the price or the timing of the sale of the married quarters." The Times said that the winning Annington Homes consortium also included the Royal Bank of Scotland, Hambros Bank, Midland Bank, Abbey National Treasury Services and the AMEC Group. Plans to sell the homes were highly critised when they were announced earlier this year. News that Nomura was part of the consortium hightened the controvesy. David Clark, defence spokesman for the opposition Labour party described the sale as scandalous and disgraceful. War veterans were also angerered. "This is the last straw," Harold Payne of the National Federation of Far East Prisoners of War told The Times. "Anything to do with money these days seems to have Japanese attached to it. I am appalled." ($1=.6406 Pound) 7810 !C13 !C41 !CCAT !GCAT !GPOL The chairman of Anglo-French paper and packaging group Arjo Wiggins Appleton Plc is to announce his support for the UK's Labour opposition party on Wednesday, the Times newspaper said in its Wednesday edition. The paper said Cob Stenham would become the first head of a top UK-listed company to publicly back Labour leader Tony Blair. It said Stenham will also forecast a Labour victory at the next general election. "There are a lot more business supporters of Labour than meets the eye. Businessmen don't like to talk about politics. People won't shout their support from the rooftops. But support is slowly and undramatically widening," the paper quoted Stenham as saying. It said Stenham's statement of support for Labour would coincide with the publication of Labour's new manifesto for industry on Wednesday. -- Alexander Smith, London Newsroom ++ 44 171 542 7719 7811 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Britain's Express Newspapers, seeking to halt a long-term sales decline, announced plans Tuesday to shed around 85 jobs as it puts its Daily and Sunday Express national titles under a single editorial team. Express Newspapers, part of the recently enlarged United News & Media empire, said it would invest around 10 million British pounds ($15.6 million) in an effort to improve the quality of the two ailing newspapers. The planned job cuts will cost around 6 million pounds ($9.3 million) in charges, an Express spokesman said. The Daily Express has average sales of around 1.2 million copies, a far cry from its heyday in the 1960s, when it had circulation of over four million and could boast with some justification of being "The Voice of Britain." The Daily Mail, its rival in the mid-market area, sells more than two million copies daily. Express Newspapers plans to offer colour supplements on Saturdays and Sundays, plus a seven-day-a-week pull-out sports section. The number of pages in the titles will be increased and more of them will be in colour. The establishment of a single editorial team is intended to make the changes easier to implement and to maximize cross readership of the two newspapers. The Sunday title also sells just over 1.2 million copies. There had been speculation that the company might seek to divest its national titles following its merger earlier this year with MAI Plc, the television and financial services group. United News also owns the down-market Daily Star. The Star is unaffected by the changes. 7812 !GCAT !GPOL Amnesty International said on Tuesday it feared Iraq's seizure of the Kurdish-controlled city of Arbil may signal a wave of human rights violations. "Reports of unlawful killings and arbitrary arrests of Patriotic Union of Kurdistan (PUK) members and of suspected Iraqi opposition activists raise fears that this could be the start of a purge by the Iraqi government of groups politically opposed to it, and whose members had gone into hiding in the Kurdish-controlled zone," the human rights group said in a statement. Amnesty said it had been unable to confirm the reports made by "a wide variety of sources, including people who have fled the area in recent days". Iraqi President Saddam Hussein's forces joined the PUK's rival, the Kurdistan Democratic Party (KDP), to seize Arbil on August 31. On Tuesday, the United States retaliated with the biggest military strike against Iraq since the 1991 Gulf War, firing 27 cruise missiles at air defence targets. Amnesty said it had been told the Iraqi troops had publicly executed 96 members of the Iraqi National Congress, an Iraqi opposition group, in a suburb of Arbil, and that they had captured leading members of the PUK since August 31. It said Iraqi intelligence forces are reported to have rounded up suspected opposition activists, including PUK members and non-Kurds, and taken them to towns outside Kurdish-controlled areas. After the Gulf War, Saddam's forces brutally suppressed an uprising by Iraq's Kurdish population with the use of chemical weapons and opponents of his rule have been brutally repressed. "The recent reports, therefore, raise fears of new (human rights) violations," Amnesty said. 7813 !C16 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Receivers have been called in at DS Crawford Ltd, a bakery chain with stores throughout Scotland, putting 1,000 jobs at risk. Receivers Coopers & Lybrand said it would endeavour to sell off the whole business as a going concern or sell individual divisions. Crawfords also has a catering business and seven restaurants. Total turnover in the year to July 31 was nearly 16 million stg. The receiver Frank Blin, head of Coopers in Scotland, said: "It is early days but interest has already been expressed regarding parts of the business." -- London Newsroom, +44 171 542 7717 7814 !GCAT !GCRIM !GENV British police on Tuesday raided two garages in west London and seized what was believed to be the world's biggest haul of smuggled rhinoceros horns. The 105 horns, valued at 2.8 million pounds ($4.4 million), represented more than one percent of the world's existing white rhino population, according to a spokeswoman for the Royal Society for Prevention of Cruelty to Animals. The RSPCA helped police in the undercover operation to find the cache. Police, who believed the horns came from southern Africa, said they were questioning two men and two women in connection with the discovery. "It's the biggest haul ever in the world," the RSPCA spokeswoman said. The horns are highly valued in Asia, where they are believed to have aphrodisiac qualities. They have become increasingly difficult to obtain because trade in rhino products is strictly regulated under the United Nation's Convention on the International Trade in Endangered Species. ($1=.6406 Pound) 7815 !GCAT !GDIP !GVIO Shooting down an allied aircraft or taking U.N. personnel hostage are the most likely options for Iraqi President Saddam Hussein if he carries out his threat to retaliate after Tuesday's U.S. missile attacks, according to Western intelligence sources. More drastic options such as a fresh strike against Kuwait, which Iraq invaded in 1990 and feinted to attack in 1994, or an act of terrorism against the West were less probable, the sources, who spoke on condition of anonymity, said. One source said the odds on Saddam trying to shoot down a Western plane had paradoxically shortened following the decision by the United States and its allies to extend a "no fly" zone over southern Iraq almost to Baghdad's southern suburbs. Saddam now faced "a significant defensive problem" because two major air bases used to defend southern Baghdad, and to stand guard against attacks from Iran to the east, were now inside the no-fly zone. But the northern limit of the air-exclusion zone, less than 50 kms (30 miles) south of the capital, was also now much closer to Saddam's heaviest concentration of surface-to-air missiles (SAM), the source said. The danger for U.S., British and French planes patrolling the area, imposed after the 1991 Gulf War to protect Shi'ite Moslems in southern Iraq, is that Saddam's own aircraft will try to lure them into a "SAM-trap". "That's obviously an area of some concern... He's perhaps perceiving he has a greater chance of knocking down an allied aircraft," the intelligence expert speculated. "Getting a live crew and a downed aircraft would be quite a propaganda coup," he added. Speaking to the nation hours after the United States launched 27 cruise missiles at military targets in southern Iraq in response to Iraqi attacks on Kurdish rebels in the north, Saddam ordered his forces to ignore the no-fly zones and shoot down any hostile aircraft over Iraqi territory. Another option would be to take U.N. weapons monitors hostage in a chilling repeat of 1990, when Saddam used Western hostages as human shields to deter allied attacks, the intelligence sources said. Although Saddam thrives on being unpredictable, they said another attack on Kuwait was highly unlikely for fear of incurring a massive U.S. response. Driving the pro-Iranian Patriotic Union of Kurdistan into Iran was also improbable because that would give a free rein in northern Iraq to the rival Kurdistan Democratic Party (KDP). Although Iraqi forces intervened on behalf of the KDP at the weekend to seize the town of Arbil, triggering Tuesday's attack, Saddam's strategy in dealing with the rival Kurdish factions has always been one of divide and rule, the sources said. Prime Minister John Major said Britain and the United States would not be deterred by Saddam's threat of retaliation. "I think if there is any suggestion of reprisals by Saddam Hussein it rather illustrates the nature of his regime, of the nature of himself," Major told reporters. 7816 !C18 !C183 !CCAT !GCAT !GDEF Britain's Ministry of Defence said on Tuesday it had narrowed the number of potential bidders for its married quarters stock to just one from an original list of four. "We have a preferred bidder but no financial deal has been struck," an MOD spokesman said. The MOD said it would not release the name of the preferred bidder until after an agreement had been reached. "There is no firm price and no firm dates on the price or the timing of the sale of the married quarters," the spokesman added. Britain's domestic news organisation, the Press Association said a consortium that included the Japanese Nomura Bank International Plc, was to buy military married quarters in a 1.6 billion pounds deal. PA said the Annington Homes consortium was made up of Nomura, the Royal Bank of Scotland, Hambros Bank, Midland Bank, Abbey National Treasury Services, and the AMEC Group. Earlier this year the main opposition Labour party accused the Government of a "total lack of patriotism" after it was disclosed that Nomura was on the shortlist. 7817 !C12 !C33 !CCAT !GCAT !GCRIM Corruption is still rife in the tendering process for major oil industry projects and companies have more work to do to combat the problem, a spokesman for an industry group tackling the issue said on Tuesday. Oil giants British Petroleum Co Plc, Exxon Corp, Royal Dutch/Shell, Mobil Corp and Statoil teamed up two years ago and set up an Information Co-ordination Group (ICG). The group's spokesman said the job of combating industrial espionage in the industry was not yet over. "Corruption is still an issue. Litigation is still being pursued through the courts," the ICG spokesman said on Tuesday. Last week Norwegian police arrested two businessmen for their alleged roles in a corruption case involving Norway's state oil company Statoil. After the arrests of the men, one an employee of Statoil, the company's managing director said oil firms had been infiltrated by international criminal networks. The ICG spokesman said the group did not carry out any investigative work of its own nor could it bring any litigation. He said these were the responsibility of the relevant law enforcement agencies and individual companies. Industry sources said the illicit trade in confidential information on procurement projects could add between three and five percent to the cost of huge contracts and even threaten health and safety if technical specifications were changed during the fixing of a bid. The size and level of organisation of so-called "information brokers", who bribe key staff within an oil company on behalf of firms tendering for huge orders, has become apparent in recent years. In August British Petroleum announced it was seeking damages against 12 defendants over alleged bribery and corruption in North Sea oil contracts. The company filed law suits against six individuals and six companies, including German steel and engineering firm Thyssen Industrie AG and Swiss pumps group Sulzer AG. The court case is expected to start in the latter part of 1997. Last April members of the Oil Industry Exploration and Production (E & P) Forum, set up a working group to look into ways of improving security arrangements in offices and tightening up the control of computer records. British Petroleum warns their employees of the dangers of falling prey to infomation brokering. "It might start with a telephone call, It could end with disgace, unemployment - even prison," the company said in an article in an in-house magazine. --Emma Thomassen, London newsroom +44 171 542 8060 7818 !GCAT !GSPO Top seeded Todd Woodbridge and Mark Woodforde of Australia defeated Sebatian Lareau and Alex O'Brien of the United States in the U.S. Open men's doubles quarter-finals 6-3 7-5. 7819 !GCAT !GPOL SAO TOME AND PRINCIPE GOVERNMENT LIST (960903) President.................................... . Miguel TROVOADA (Sworn in 3 Sept 96 for a second five-year term) - - - - - - MULTI-PARTY GOVERNMENT (Apptd 5 Jan 96) Prime Minister (Apptd 29 Dec 95)...... . Armindo Vaz de ALMEIDA - - - - - - - MINISTERS: Agriculture & Fisheries...................Julio Lima de SILVA Defence & Internal Security. . Carlos Paquete Carneiro de SILVA Education, Youth & Sport..................Guilherme OCTOVIANO Employment & Social Security........... Albano Germano de DEUS Finance & Planning..............................Rafael BRANCO Foreign Affairs & Cooperation...... . Guilherme Posser da COSTA Health.............................Fernanda Roncon de AZEVEDO Industry, Trade, Tourism........... . Arlindo de Ceita CARVALHO Justice, Administrative Reform & Local Government............. Gabriel Ferreira da COSTA Media, Culture..................Ladislau Frederico de ALMEIDA Social Infrastructure & Environment..............Alcino PINTO - - - - - - - Central Bank Governor...................Adelino CASTELO David - - - - - - - NOTE: Any comments/queries on the content of this government list, please contact the Reuter Editorial Reference Unit, London, on (171) 542 7968. (End government list) 7820 !GCAT !GPOL ROMANIA GOVERNMENT LIST (960903) ************************************************************* * 3 Nov 96 - Parliamentary & presidential elections * ************************************************************* President (Sworn in 30 Oct 1992 for four-year term)............................Ion ILIESCU Economic Adviser to President..................Misu NEGRITOIU - - - - - - - PARTY OF SOCIAL DEMOCRACY OF ROMANIA (PDSR)-LED GOVERNMENT (Sworn in 20 Nov 92, reshuffled 3 Sept 1996) Prime Minister (Appointed 4 Nov 1992)........Nicolae VACAROIU - - - - - - - MINISTERS OF STATE: Economic Reform..................................Mircea COSEA Finance......................................Florin GEORGESCU Foreign Affairs.......................Teodor Viorel MELESCANU Labour & Social Security...................Dan Mircea POPESCU - - - - - - - MINISTERS: Agriculture & Food Industry................ . Alexandru LAPUSAN Communications.................................Virgil POPESCU Culture......................................... . Grigore ZANC Defence........................................Gheorghe TINCA Education......................................... Liviu MAIOR Environment, Forestry & Water........... Aurel Constantin ILIE Health......................................... Daniela BARTOS Industry...................................Alexandru STANESCU Interior...................................Doru Ioan TARACILA Justice......................................... . Ion PREDESCU Parliamentary Relations.......................... Petre NINOSU Public Works.................................... Marin CRISTEA Research & Technology..................... Doru Dumitru PALADE Tourism.................................... . Matei Agathon DAN Trade........................................Dan Ioan POPESCU Transport......................................... Aurel NOVAC Youth & Sports..............................Alexandru MIRONOV - - - - - - - Central Bank Governor.......................... Mugur ISARESCU - - - - - - - NOTE: Any comments/queries on the content of this government list, please contact the Reuter Editorial Reference Unit, London, on (171) 542 7968. (End Government List) 7821 !GCAT !GPOL ERITREA GOVERNMENT LIST (960903) President.................................... . Isayas AFEWERKI - - - - - - MINISTERS: Agriculture.................................TESFAI Ghirmazion Construction.................................... ABRAHA Asfaha Defense......................................... SEBHAT Ephrem Education......................................... OSMAN Saleh Energy, Mining & Water Resources.........TESFAY Gebreselassie Foreign Affairs............................... . PETROS Solomon Finance & Development.......................... HAILE Woldense Information & Culture..................... BERAKY Gebreselasie Internal Affairs.............................ALI Said Abdella Justice......................................... FAWZIA Hashim Labour & Human Welfare.........................AHMED Haji Ali Local Government.......................... MAHMUD Ahmed Mahmud Marine Resources...................................SALEH Meki Tourism.................................... WORKU TesfaMichael Trade & Industry..................................OGBE Abraha Transport.................................GIORGIS TekleMikael - - - - - Governor Bank of Eritrea.........................TEKIE Beyene - - - - - NOTE: Any comments/queries on the content of this government list, please contact the Reuter Editorial Reference Unit, London, on (171) 542 7968. (End Government List) 7822 !GCAT !GPOL LIBERIA GOVERNMENT LIST (960903) ************************************************************* * 17 Aug 96 - West African leaders agreed on a new timetable* * for holding elections. A communique said * * elections would be held on or about May 30, * * 1997 and an elected government sworn in on * * June 15. * ************************************************************* COUNCIL OF STATE (Installed 1 Sep 95): Chairman (Inaugurated 3 Sep 96)...................Ruth PERRY Other Members.......................... Charles TAYLOR (NFPL) Alhaji KROMAH (ULIMO) George BOLEY (LPC) Oscar QUIAH Chief Tamba TAILOR - - - - - - - MINISTERS: Agriculture.......................... Roland MASSAQUOI (NPFL) Commerce & Industry................ . Lusinee KAMARA (ULIMO-K) Defence.................................Hezekiah BOWEN (AFL) Education.................................... Moses VAH (LPC) Finance.............................Lansana KROMAH (ULIMO-K) Foreign Affairs........................Momolu SIRLEAF (NPFL) Health & Social Welfare...............Vamba KANNEH (ULIMO-K) Information, Culture & Tourism.............Joe MULBAH (NPFL) Internal Affairs........................Edward SACKOR (NPFL) Justice.............................Francis GARLAWOLO (NPFL) Labour.................................... . Tom WOEWIYU (CRC) Lands, Mines & Energy..................Jenkins DUNBAR (NPFL) Posts & Telecommunications. Alfred KOLLIE (LPC) Public Works.......................... Varlee KEITA (ULIMO-K) Rural Development.................................... . Vacant Youth & Sports..................... . Francois MASSAQUOI (LDF) - - - - - - - FACTIONS: NPFL - Taylor's National Patriotic Front of Liberia ULIMO-K - Kromah's wing of Ulimo. LPC - Boley's Liberia Peace Council CRC - NPFL Breakaway Central Revolutionary Committee LDF - LOFA Defence Force - - - - - - - Central Bank Governor (Acting)...............Eisenhower YORK - - - - - - - NOTE: Any comments/queries on the content of this government list, please contact the Reuter Editorial Reference Unit, London, on (171) 542 7968. (End Government List) 7823 !GCAT !GPOL VANUATU GOVERNMENT LIST (960903) President (Sworn in 4 Mar 94)................ . Jean-Marie LEYE - - - - - - - CABINET (Formed 23 Feb 96): Prime Minister.......................... . Maxime Carlot KORMAN Deputy Prime Minister.........................Donald KALPOKAS (Also Minister of Education) - - - - - - - MINISTERS: Agriculture.................................Vincent BOULEKONE Civil Aviation, Tourism, Telecommunications & Meteorology......................................Vacant Commerce & Industries..............................Barak SOPE (Dismissed for insubordination 22 Aug 96) Education.......................................See Deputy PM Finance...........................................Sela MOLISA Foreign Affairs............................... . Amos BANGABITI Health.................................... . Cyriaque METMETSAN Home Affairs.................................... . Charley NAKO Justice...........................................Joe NATUMAN Lands..................................................Vacant Transport & Public Works.......................... Amos ANDENG - - - - - - - NOTE: Any comments/queries on the content of this government list, please contact the Reuter Editorial Reference Unit, London, on (171) 542 7968. (End Government List) 7824 !GCAT !GPOL President Miguel Trovoada was sworn in on Tuesday for a second five-year term as president of the West African twin island state of Sao Tome and Principe, officials said. In his acceptance speech, Trovoada urged Sao Tomeans to adopt "a spirit of dialogue, tolerance and mutual respect" to resolve the country's problems. The ceremony was attended by dignitaries including Cape Verde President Mascarenhas Monteiro, Guinea-Bissau President Joao Bernardo Vieira and Portuguese Foreign Minister Jaime Gama. Trovoada won 52.74 percent of the vote and his rival Manuel Pinto da Costa took 47.25 percent in a second round run-off on July 21, according to official figures from the Supreme Court. Abstention among the electorate of 50,000 was around 20 percent, officials said. Sao Tome and Principe, a former Portuguese colony located 125 miles (200 km) off Gabon, is one of the poorest countries in the world. 7825 !GCAT !GVIO Hutu rebels attacked an army garrison and local government headquarters in northern Burundi on Tuesday, killing many people, and fired mortar bombs near the capital, an army spokesman said. Stepping up assaults in sanctions-hit Burundi, rebels fired three 60 mm mortar bombs near Bujumbura in the late afternoon, according to army spokesman Lieutenant-Colonel Isaie Nibizi. He gave no details but a Reuters correspondent in Bujumbura heard more than 10 loud explosions. Residents said it was the first time the capital came under mortar attack since last year. Nibizi told Reuters fighting was continuing at Gahombo commune between Kayanza and Ngozi towns in northern Burundi and the Tutsi-dominated army was pouring reinforcements into the area. It was one of the few, if any, attacks reported by Burundi's army on its positions. "The rebels attacked the military post, the displaced camp and the administrative headquarters. It was a big attack and it is still continuing. We have sent for reinforcements," Nibizi added. "The rebels perpetrated a major attack at Gahombo. They have killed the local administrator and there are many civilian casualties as well," said Jean-Luc Ndizeye, spokesman for Burundi's Tutsi military ruler Pierre Buyoya who seized power on July 25. In Nairobi, an official of the exiled main Hutu rebel group National Council for the Defence of Democracy (CNDD), told Reuters the attack in Kayanza was being carried out by its armed wing -- Forces for the Defence of Democracy -- in a strategy to cut off Burundi from neighbouring Rwanda. "Our programme is to take over the regions of Kayanza, Bubanza and Kirundo and cut off the country from Rwanda," she said. The official accused Rwanda's Tutsi-dominated military of aiding the Burundi army in the tiny country's ferocious war which aid workers say is killing 1,000 people monthly. Tuesday's attack came four days after the rebels killed civilians in heavy fighting in the same region and destroyed government buildings. Increasing the pressure after a month of sanctions by regional African states against the Tutsi military, rebels hit Gatara village five km (three miles) south of Kayanza town on Saturday. State-run Burundi radio said all government buildings were destroyed in Gatara. Civilians have paid the heaviest price in Burundi's ethnic strife which has killed more than 150,000 people in the last three years, fuelling fears of slaughter on a scale similar to Rwanda's 1994 genocide in which up to one million were killed. Rebel forces last week increased the isolation of Bujumbura, a Tutsi stronghold, by twice cutting power lines to the city, forcing residents to use dwindling fuel stocks or generators. Buyoya dismissed on Saturday a U.N. Security Council threat of an arms embargo in 60 days, ruling out talks with Hutu rebels unless they laid down their arms and saying sanctions would soon be relaxed. 7826 !GCAT !GVIO Hutu rebels launched a major attack on an army garrison and local government headquarters in northwestern Burundi on Tuesday, killing many people including the local administrator, an army spokesman said. Lieutenant-Colonel Isaie Nibizi told Reuters fighting was continuing at Gahombo commune between Kayanza and Ngozi towns and the Tutsi-dominated army was pouring reinforcements into the area. It was one of the few, if any, attacks reported by Burundi's army on its positions. "The rebels attacked the military post, the displaced camp and the administrative headquarters. It was a big attack and it is still continuing. We have sent for reinforcements," Nibizi added. "The rebels perpetrated a major attack at Gahombo. They have killed the local administrator and there are many civilian casualties as well," said Jean-Luc Ndizeye, spokesman for Burundi's Tutsi military ruler Pierre Buyoya who seized power on July 25. In Nairobi, an official of the exiled main Hutu rebel group National Council for the Defence of Democracy (CNDD), told Reuters the attack in Kayanza was being carried out by its armed wing -- Forces for the Defence of Democracy -- in a strategy to cut off Burundi from neighbouring Rwanda. "Our programme is to take over the regions of Kayanza, Bubanza and Kirundo and cut off the country from Rwanda," she said. The official accused Rwanda's Tutsi-dominated military of aiding the Burundi army in the tiny country's ferocious war which aid workers say is killing 1,000 people monthly. Tuesday's attack came four days after the rebels killed civilians in heavy fighting in the same region and destroyed government buildings. Stepping up their attacks after a month of sanctions against the Tutsi military which seized power on June 29, the rebels hit Gatara village five km (three miles) south of Kayanza town on Saturday. State-run Burundi radio said all government buildings were destroyed in Gatara, Civilians have paid the heaviest price in Burundi's ehtnic strife which has killed more than 150,000 people in the last three years, fuelling fears of slaughter on a scale similar to Rwanda's 1994 genocide in which up to one million were killed. 7827 !E21 !E211 !ECAT !GCAT !GPOL South African Finance Minister Trevor Manuel said on Tuesday 44 members of his department and 861 members of the revenue service have taken early retirement as part of a government programme to cut the size of the public service. He said in a written reply to a parliamentary question the departures as of August 26 represented 8.9 percent of total staff in the finance department and 7.7 percent in the revenue service. The finance department lost one deputy director-general, four directors, two deputy directors and three assistant directors. The revenue service lost one deputy director-general, three chief directors, eight directors and 39 deputy directors, Manuel said. -- Cape Town newsroom 2721 403-2502 7828 !GCAT !GVIO An hour of intense gunfire rocked the Burundian capital on Tuesday night in what appeared to be the first battle close to the city since a coup d'etat on July 25. Heavy machinegun fire and multiple bursts of automatic rifle fire could heard around the city's university at the foot of the hills surrounding Bujumbura. Dozens of grenade explosions and several rounds of tracer lit up the sky in the same area. The fighting started at curfew, 10 p.m. (2000 GMT), and gunfire could also be heard in at least two other locations in the city's eastern suburbs. There were no details of casualties and no military spokesman was available for comment. Hutu rebels earlier launched three 60mm mortar bombs at the university, injuring no one and causing slight damage, according to military spokesman Lieutenant Colonel Isaie Nibizi. Burundi's capital has been largely free from violence since military strongman Pierre Buyoya, an ethnic Tutsi, came to power in an army coup d'etat in July that ousted a Hutu president. The city, which is Tutsi-controlled after a bout of ethnic cleansing last year, is considered highly vulnerable to attack from Hutu rebels because of its position between the north east shore of lake Tanganyika and a range of steep hills. Around 150,000 people -- mainly civilians -- have died in inter-ethnic fighting in Burundi since 1993 when the country's first democratically-elected Hutu president was killed in an attempted coup. Hutu rebels launched a major attack against a commune in north western Kayanza region on Tuesday morning, killing the local administrator and leaving many civilians dead, according to a senior government official. The rebels attacked Gahombo, a commune midway between Kayanza and Ngozi early on Tuesday in the latest of a series of rebel operations in the region. "The rebels attacked the military post, the displaced camp and the administrative headquarters. It was a big attack and it is still continuing. We have sent for reinforcements," Nibizi earlier told Reuters. "The rebels perpetrated a major attack at Gahombo. They have killed the local administrator and there are many civilian casualties as well," presidential spokesman Jean-Luc Ndizeye told Reuters in a telephone interview. The United Nations last week told Burundi's coup leaders to start all-party negotiations within 60 days or face possible sanctions. The economy of the central African country, based on coffee and tea, has been crippled by sanctions imposed after the coup by East African states. Hutu rebels stepped up attacks in Kayanza region last week, operating from the nearby Kibira forest, an area off-limits to Burundi's army, according to analysts. Burundi's army on Monday accused Hutu rebels of killing civilians during heavy fighting at Gatara village, around 5 km (three miles) south of Kayanza town on Saturday. Dozens of government buildings were looted and burned during the attack, state radio reported, but gave no details of casualty figures. "The rebels said they had finished with Gatara because they had completely destroyed all the administrative buildings. They said their mission was to do likewise throughout the rest of the country," the eyewitness told Reuters in a telephone interview. Rebels last week staged a series of ambushes on national route one, Burundi's most important road, which runs through Kayzanza. London-based human rights group Amnesty International last month reported that the Burundi's army killed 4,050 unarmed civilians in central Giheta district in the first three weeks after the July coup. The army denied the report. 7829 !GCAT !GDIP !GVIO U.N. officials in eastern Zaire said on Tuesday they were uncertain when to resume a census of Rwandan refugees after a mass boycott forced its suspension. A spokesman for the U.N. refugee agency UNHCR said in Geneva the census, suspended on Monday, could restart on Sunday. But the UNHCR representative in the provincial capital Goma, Lino Bordin, said the agency had to first explain the objective of the head count to the estimated 700,000 Rwandan Hutus. "The census will be resumed but we do not know exactly when. That could be in October, in November or in December. It's too early to say," Bordin told Reuters by telephone. "Dialogue is necessary between representatives of the refugees and the UNHCR," he said, adding: "The exercise could only resume after some weeks if the UNHCR's message is well received." The UNHCR has effectively become a government for more than one million Hutus in eastern Zaire who fled in fear of revenge for the 1994 Hutu-led genocide of more than half a million minority Tutsis and Hutu moderates in Rwanda. Many refugees, who are among 1.7 million Hutus languishing in neighbouring countries, have been linked to the genocide and are afraid for their lives if they return to Rwanda. Refugees are suspicious of the head count, which U.N. officials say is vital for aid planning and logistics. Many of the refugees said they feared indelible ink used on them for registration might make them sterile or help to identify them if they went home, UNHCR spokesman Ron Redmond said in Geneva. He told a news briefing the census at five camps in the Goma region was suspended on Monday, a day after the refugees refused to respond. "The camps are rife with rumours as to the real intent of this process. Rumours included people thinking that indelible ink that would be put on them (refugees) would lead to sterilisation or would identify them somehow if they went back to Rwanda. There are all kinds of wild rumours circulating." Redmond said the census would resume on Sunday but he added UNHCR also hoped to get support from camp leaders. "Meetings are planned with camp leaders to find ways of continuing the operation," he said. 7830 !E21 !E211 !ECAT !GCAT !GPOL !GVIO An estimated 200,000 traders and supporters marched in the Ethiopian capital Addis Ababa on Tuesday, protesting at rent increases in state-owned properties. Witnesses said the city was virtually paralysed as demonstrators marched to parliament and handed in a letter of protest, demanding the government cancel rent increases because they were exorbitant. The city council said last month new agreements should be drawn up for traders operating 21,000 shops in state-owned properties to allow the government to collect revenues it was owed. 7831 !GCAT !GDIP Iranian President Akbar Hashemi Rafsanjani said on Tuesday Iran offered the hand of brotherhood to Africa instead of raping the continent like colonialists. On the second day of a four-day visit to Kenya, Rafsanjani addressed Islamic prayers and toured the port and an oil refinery in the Indian Ocean port of Mombasa, a gateway to much of East and central Africa. Rafsanjani told Moslems that Western powers had "raped the land in the name of civilisation" when they colonised Africa. "Instead of colonial coercion, Iran wants to extend the hand of brotherhood to Africa," said Rafsanjani, adding Iran had made huge progress in agriculture, commerce and industry and wanted to share it. "We are here and will visit other countries to exploit closer cooperation," said the president on the first leg of an African tour to drum up business in the face of U.S. sanctions on Iran. He hailed "peaceful and harmonious" coexistence between religious communities in Kenya and said this was the result of the good atmosphere created by President Daniel arap Moi's government. Kenya currently imports about 15 percent of its annual crude oil needs of 2.2 million tonnes from Iran, according to a Kenyan government official. He said Mombasa handled 8 million tonnes of cargo per year but had the capacity to take up to 20 million. On Wednesday, Rafsanjani visits an farm research project, tea estates, an ostrich farm and the U.N. office in Nairobi. After leaving Kenya on Thursday, Rafsanjani is expected to visit Uganda, South Africa, Zimbabwe, Tanzania and Sudan. American displeasure over the bridge-building Iranian trip to Kenya was evident when U.S. diplomats in the capital Nairobi boycotted the official airport welcome for Rafsanjani on Monday. The tour comes less than a month after U.S. President Bill Clinton tightened sanctions against Iran, which Washington accuses of sponsoring terrorism, a charge Iran denies. The law penalises non-U.S. firms that invest $40 million or more a year in the oil and gas sectors of Iran or Libya. Iran has steadily stepped up its diplomatic presence in Africa and tried to boost cultural and religious links with Moslems on the continent. With the exception of Sudan none of the countries Rafsanjani is visiting has a Moslem majority and in most of them Christianity is the main religion. Pro-western Kenya, which has close military links with the United States and Britain, has banned a Moslem fundamentalist party centred on Mombasa and refused its leader a new passport, stranding him in Germany. 7832 !GCAT !GDIP Eritrea wants changes in the foreign monitoring of its territorial dispute with Yemen, Foreign Minister Petros Solomon said on Tuesday on the eve of a third round of peace talks in Paris. Petros told Reuters Asmara was dissatisfied with the way France, the mediator in the conflict over the Hanish islands in the Red Sea, monitored Eritrea's alleged occupation of Lesser Hanish on August 10. "The French do not want to say how the monitoring is done, and they were not willing to discuss the evidence (of the August 10 occupation) with us. It was almost a question of believing the French as middlemen or not. We have clearly stated that we were not convinced by the evidence. "We have to amend the monitoring agreement, in order to avoid such incidents in the future." France is empowered as mediator to monitor the military situation in the area and report its findings to the U.N. Eritrea and Yemen fought briefly over the Hanish islands last December. At least 12 people were killed. The two countries agreed to go to international arbitration to decide ownership of the islands which are potentially rich in oil and gas. Petros repeated Eritrea's claim to have had troops on Lesser Hanish since December. But it was ordered by the U.N. Security Council to withdraw its troops and complied on August 27. The head of Eritrea's delegation at Wednesday's talks in Paris, Marine Resources Minister Saleh Meki, told Reuters on Monday there was no truth in claims in Arab circles that his mainly Christian country was backed in the sovereignty dispute by Israel and the United States. Petros repeated the denial. "Arab media wants to portray this issue as an Israel-Arab issue. It is absolute nonsense. What does being Arab mean anyway? Most of the Arab states in this region have good relationships with the U.S., including military and security agreements," he said. He denied that Eritrea had a military or security agreement with the United States. 7833 !GCAT !GPOL !GVOTE Nigeria's electoral commission on Tuesday said it had begun vetting 15 aspiring political parties for the military government's plan to restore democracy. Initially 18 groups had applied but some have been allowed to join together to form new parties, a statement from the National Electoral Commission in the capital Abuja said. Military leader General Sani Abacha last year set out a timetable to restore democracy by October 1998, which critics both at home and abroad say allows too much time. The names of political parties that have been approved will be released at the end of September. Africa's most populous nation has been in political crisis since a previous military government annulled 1993 presidential elections that would have ended a decade of army rule. It has been under fire from Western countries for its lack of democracy and human rights abuses. 7834 !GCAT !GVIO Fourteen people were killed and more than 75 were wounded in a hand grenade attack in southwest Rwanda, the U.N. Human Rights Office in Rwanda said on Tuesday. Spokeswoman Marie Vander Elst said unidentified attackers tossed three hand grenades into a market in Nyakabuye in the Cyangugu region on August 17, killing 14 people and wounding She said investigations were underway to determine who was responsible for the attack. She added that on August 18 and 19 seven people were killed and four wounded in two separate incidents involving the government Rwanda Patriotic Army (RPA) and infiltrators from Zaire. The U.N. human rights office said on Monday up to 111 people, mainly civilians, were killed in August in operations by the Tutsi-dominated army against Hutu rebels in the northwest of the country. The Rwandan army says it is fighting Hutu rebels infiltrating from neighbouring Zaire. Human rights groups accuse the army and rebels of killing civilians in reprisal attacks. Up to a million members of the Tutsi minority and allied Hutus were killed in genocide in Rwanda in 1994 by Hutu troops, militiamen and mobs. The rebels infiltrating into border regions of Rwanda are mostly former troops who fled to Zaire in 1994. Rwandan troops arrest anyone suspected of involvement in the genocide of up to one million Tutsis and Hutu moderates and prisons have been filling since the end of the genocide in 1994. 7835 !GCAT !GPOL Liberia's new head of state Ruth Perry was sworn in on Tuesday with the task of guiding the country's armed factions to disarmament and elections scheduled for next May. Thousands of Liberians crowded streets outside the freshly-painted Centennial Pavilion in the capital Monrovia for the ceremony, attended by the foreign ministers of Nigeria and Guinea, who have troops in a West African peacekeeping force. Perry, a senator during the 1980s under late president Samuel Doe, urged Liberians to reconcile and reunite. "The time has come that we put the past behind us and move our country forward," she said in her inaugural address. "I will play the role of a stabiliser and the Council of State must be seen as one united force speaking with one voice." Charles Taylor, leader of Liberia's biggest militia, missed the ceremony as he is in Tripoli for celebrations of the 27th anniversary of Libyan leader Muammar Gaddafi's seizure of power. The other four members of the Council of State attended, as did ethnic Krahn leader Roosevelt Johnson, the man at the centre of gunbattles which wrecked the capital in April and May. West African leaders nominated Perry, 57, to replace former council chairman Wilton Sankawulo at talks in Nigeria last month which set a new timetable for disarmament and elections. She is modern Africa's first woman head of state, though Britain's Queen Elizabeth was South Africa's titular head of state for a while, and Madagascar's pre-colonial royal family included warrior queens. The United Nations Security Council on Friday voted to keep its 10 military observers in Liberia for another three months and agreed with a proposal from Secretary-General Boutros Boutros-Ghali to send 24 more observers immediately. The United Nations force, known as UNOMUL, was reduced from 93 to 10 military officers because of heavy fighting and looting in April and May. Boutros-Ghali is also considering fielding experts on disarmament, elections, human rights and administration, not exceeding the current authorised strength of 160 personnel. U.S. Ambassador William Milam said the United States would help with demobilisation of the country's estimated 60,000 gunmen and restructuring the police and former national army. Taylor's National Patriotic Front of Liberia started the civil war in December 1989 and more than a dozen different peace accords have failed to end fighting. The latest agreement threatens the faction leaders with sanctions including seizure of assets and war crimes tribunals, if they are seen to be obstructing the peace process. 7836 !GCAT !GDIS !GWEA Floods and torrential rains have killed 15 people and destroyed about 1,000 houses in the town of El Geili, 50 km (30 miles) north of the Sudanese capital Khartoum, state television said on Tuesday. The rains, which hit the Khartoum area on Thursday night and again on Sunday, also washed away railway tracks, it said. The governor of Khartoum province, Badr al-Din Taha, has appealed for aid for those affected, the television said. Hundreds of people are still homeless from floods in central and southern Sudan in August. Egyptian hydrologists who monitor the Nile in Sudan carefully, say the rains in Ethiopia have been the heaviest for years and many parts of Sudan will be liable to flooding. 7837 !GCAT !GCRIM !GPOL More than 1,000 supporters of the main opposition Malawi Congress Party (MCP) danced in the commercial capital to celebrate the release on Tuesday of former president Kamuzu Banda's two closest associates. Banda's aide John Tembo, his heir-apparent as MCP leader, and Banda's long-time companion Cecilia Kadzamira were arrested on Monday on charges of conspiracy and attempted murder. Earlier on Tuesday, police teargassed supporters of the ruling United Democratic Front (UDF) when they clashed with Banda's supporters and threatened to loot MCP offices. MCP Secretary-General Lovemore Munlo, Banda's lawyer, said President Bakili Muluzi's government was striving to frustrate the opposition by harassing its leaders until they abandoned Banda. Last year Banda stood trial with Tembo and Kadzamira on charges of ordering the assassination of four political opponents in 1983 but they were all aquitted by the High Court. Malawi's undisputed ruler for three decades, Banda lost power to Muluzi in the first all-party elections in 1994. 7838 !GCAT !GDIP !GVIO Iranian President Akbar Hashemi Rafsanjani said on Tuesday he was not briefed on U.S. military attacks on southern Iraq so he could not immediately comment on them. "I have not been briefed about the details of the attacks since I have been travelling. After receiving the information I shall be giving my view," Rafsanjani told Reuters on his return to his Nairobi hotel after a visit to the port city of Mombasa. The president visited Mombasa on the second day of a four-day visit to Kenya, his first stop on an African tour to drum up business for Iran in the face of U.S. sanctions against the Islamic republic. After leaving Kenya on Thursday, Rafsanjani is expected to visit Uganda, South Africa, Zimbabwe, Tanzania and Sudan. The United States launched a missile attack on Tuesday on southern Iraq after Iraqi troops intervened in the country's Kurdish north to help a Kurdish faction fighting another Kurdish group. 7839 !GCAT !GPOL !GVOTE A top member of Zaire's National Electoral Commission (CNE) resigned on Tuesday, saying the government and political leaders were not serious about holding elections next year. Georges Nzongola, one of two CNE vice-presidents, said the government had not provided the commission the needed resources to organise elections not later than next May in the vast and largely inaccessible Central African country. "The difficulties encountered by the CNE on the financial and political level have contributed to a loss of credibility by this organisation as regards its ability to steer the country to elections," Nzongola told a news conference. He said less than five percent of the CNE's budget had been released by the government, which is depending largely on the European Union and U.N. agencies to fund the elections. Parliament, which has been meeting in extraordinary session since July, has yet to pass a law to govern the presidential, legislative and local elections, Zaire's first democratic polls. President Mobutu Sese Seko, who seized power in a 1965 coup, introduced a multi-party system in 1990. Zaire's transition has, however, lagged well behind that of other states in the region. In the past, Mobutu has been elected without opposition. 7840 !GCAT !GDIP !GVIO Iraq's minister of information on Tuesday called on the Movement of Non-Aligned Countries to condemn a U.S. missile attack on his country. "We will stand firmly against the American aggression, we implore you to support us because we are defending our nation and people," Abdul Chani-Abdul-Ghafor told information ministers from the Movement of Non-Aligned Countries holding a meeting in the Nigerian capital. The United States on Tuesday launched one of the biggest military strikes against Iraq since the Gulf War, firing 27 cruise missiles at targets in southern Iraq in response to Iraqi attacks on Kurds in the north. The Movement of Non-Aligned Countries meeting this week in Nigeria is discussing the imbalance of information between their countries and the West. 7841 !GCAT !GVIO Students threw stones at police in the Sudanese capital on Tuesday in the second outbreak of anti-government demonstrations in three days, witnesses said. Police fired teargas and shot in the air to disperse them. There were several arrests but no reports of any casualties. Witnesses said the protests were at the medical faculty of Khartoum University, a hot-bed of opposition to successive governments in Sudan. A criminal court in Khartoum sentenced 35 people to between 15 and 20 lashes for bread riots in and around Khartoum on Sunday, the government-owned al-Ingaz al-Watani (National Salvation) newspaper said on Tuesday. Two people were killed and seven injured in the riots, an Interior Ministry statement said on Monday. The injured included three policemen. Sunday's protests broke out after bakeries refused to bake bread on grounds that new government regulations on the weight of loaves made it unprofitable. The daily quoted prosecutor Hashim Osman as saying that most of the accused were university and secondary school students. The maximum penalty for inciting a riot is six months in jail, Osman said. An unspecified number of traders were released for lack of evidence, he added. Sudan is suffering a series of crises ranging from water and electricity shortages to rising food prices. 7842 !GCAT !GVIO Sierra Leone's president has told rebel leader Foday Sankoh that the government has contingency plans to deal with ceasefire breaches and protect civilians, the president's spokesman said on Tuesday. President Ahmad Tejan Kabbah's warning followed a spate of attacks by armed men in August which killed dozens of civilians in villages and on main highways. Survivors blamed rebels but aid agencies said they could be armed gangs foraging for food. Kabbah's special advisor on peace, Sharka Mansaray, told reporters the president had a hot-line to Sankoh, whose Revolutionary United Front took up arms in 1991 and who has been in Ivory Coast since peace talks began in March. Mansaray said the government would not compromise security of civilians, despite the ceasefire. "This is a point of principle and this has been strongly communicated to the RUF leadership," he said. "Contingency plans exist to deal with future ceasefire breaches and also to neutralise any threats to innocent travellers." Kabbah won election in March and pressed on with peace talks begun by military leader Julius Maada Bio, who restored multi-party democracy after four years of army rule that month. "President Kabbah has a special hot-line to Sankoh. Even today we have been in contact with him," Mansaray said. Diplomats say peace talks are stalled over rebel insistence that foreign troops helping the army should leave and rebel demands for some say in the allocation of budget spending. 7843 !C21 !C24 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Northam Platinum Ltd hopes to resume normal production soon following heavy output losses during August as a result of violence and a stayaway at the mine, managers Gold Fields of South Africa Ltd said. "We are hoping that with the additional people we have hired, that it is going to push production up very soon," a Gold Fields spokeswoman said. The company said earlier on Tuesday that throughput at Northam's concentrator plant fell by 20,000 tonnes a result of violence and labour action. It said that following an outbreak of violence at the company's mine on the weekend of August 9, in which at least six people died, some 600 Zulu-speaking workers had not yet returned to work. "This had an impact on production from underground. In the August mine month concentrator plant throughput fell to 130,000 tonnes from the 150,000 tonnes achieved in July," the company said in a statement. The company did not say how much platinum was lost. "It is difficult to etablish exactly what the financial losses are going to be, we hope they are not going to be too severe," the spokeswoman said. Northam produced 77,421 ounces of platinum in concentrates in the quarter ended June 30, 1996. --Johannesburg newsroom +27-11 482 1003 7844 !E21 !E211 !ECAT !GCAT !GPOL South Africa's parliamentary finance committee, concerned about planned new tax incentives, agreed on Tuesday to hold hearings on the incentives without unduly holding up the needed tax legislation. After an in-depth briefing by Deputy Finance Minister Gill Marcus and senior officials, the committee agreed that the incentives were important in attracting investment under the government's Macro-economic Growth Strategy released in June. But, although they agreed to hold hearings, they could not decide on a date and some members doubted whether they would be able to complete their report and pass the Revenue Laws Amendment Bill before October. Committee members expressed disquiet on Monday about certain aspects of the incentives contained in the Bill and asked for a briefing by Finance Minister Trevor Manuel, Marcus or Trade and Industry Minister Alec Erwin. They were also concerned that they had been given a week to consider the Bill and were expected to approve it without enough time to hold public hearings on it. Incentives include tax holidays for certain new job creating investments and accelerated depreciation programmes for new and existing investments. Concerns raised by the committee about the incentives include worries that they might be abused, that tax officials would not be able to monitor them properly, that they would place existing investments at a disadvantage and did not clearly spell out how they would encourage job creation. "This is a very important Bill... but it does not come out of the blue," Marcus told the committee. She said the principle of using tax incentives to attract investment had been discussed in the National Economic Development and Labour Council (Nedlac) since 1995. "The whole approach to the tax incentives have been worked through thoroughly with the Katz Commission," Marcus said. She added that staffing in the South African Revenue Services and the department of trade and industry was being strengthened to ensure the incentives were properly controlled. The committee said it was worried the incentives could turn out to mirror the much abused and discredited "decentralisation" programme under apartheid, when tax incentives were used to encourage firms to move to former black states and homelands. "That is not the case at all," Marcus said. Tax holidays would be granted for new manufacturing projects that were situated in certain areas that needed development, but these areas would not be remote and "away from where people and development are," she said. On whether the incentives would provide an unfair advantage to new ventures at the cost of existing firms, Department of Trade and Industry chief director of industry and technology strategy Alan Hirsch told the committee that other incentives were being made available to existing firms. Marcus said that the incentives would be provided to projects on the basis of criteria that took job creation and training into consideration. -- Parliamentary office +27 21 403-2502 7845 !GCAT !GDIP !GPOL U.N. officials plan to hold talks with leaders of Rwandan Hutu refugees on relaunching a stalled census in camps in eastern Zaire but security must be ensured before the exercise resumes, a U.N. official said on Tuesday. Hubert Edongo, Central African regional delegate of the U.N. High Commissioner for Refugees, told Reuters it was important to explain that the census was in everyone's interests and had no links with any repatriation plan. "The UNHCR will hold talks with the leaders of the refugees from today with a view to resuming this operation," he said. "The census is not being conducted as a prelude to any forced repatriation of refugees but the (international) donors need to know the true figures." Edongo did not identify the leaders and said that Zairean troops would be associated with the operation. "Proper security must be ensured in the camps before the census resumes." The U.N. refugee agency formally suspended the operations on Monday in the teeming refugee camps around the eastern town of Goma because refugees were boycotting a census. Aid workers said the Hutu refugees feared census takers would mark them with indelible ink so they could be detected by Rwandan government troops of the Tutsi-led army if they were forced into Rwanda. Many of the estimated 1.1 million Rwandan Hutu refugees in Zaire and nearly 600,000 in Tanzania refuse to go home for fear of reprisals for Rwanda's 1994 genocide, blamed on Hutu hardliners, of up to a million people, mostly minority Tutsis. The refugees fled after Tutsi-led rebels seized power. 7846 !GCAT These are significant stories in the Ivorian press on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy. FRATERNITE MATIN - Ivorian gas and oil union SYNTEPCI tells government that fuel distribution workers will hold a one-day warning strike on September 11 if there is no progress in resolving a dispute over pay and trades union rights; threatens to halt supplies to Abidjan airport, Sotra public bus company and port. LA VOIE - Soldiers held on suspicion of planning a coup on the eve of Ivory Coast's October 1995 presidential election will be tried in secret on September 5, army officers say, requesting anonymity; a military tribunal plans to proceed with the case even thought President Henri Konan Bedie plans to pardon the men, they add. - Ivorian human rights league LIDHO calls for end to arbitrary arrests and prolonged detention without trial, particularly as relates to opposition militants arrested during bloody protests before the presidential election. LE JOUR - Review by the newspaper of public offerings of state companies privatised since 1990 shows that only minority stakes go to the Ivorian public, undermining suggestions that Ivory Coast is becoming a nation of shareholders LE REPUBLICAIN - State property company SICOGI starts evicting tenants in dispute linked to planned sell-off of its properties; tenants say terms of transfer originally outlined give them the right to become owners on better terms than now proposed as the company has written off its initial investment ($1=509 CFA) -- Abidjan newsroom +225 21 90 90 7847 !GCAT These are significant stories in the Nigerian press on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy. DAILY TIMES - Central bank weekly foreign exchange auctions moved to Abuja from Lagos. - Drugs bought with 1.5 billion naira from Petroleum Trust Fund may be delivered to public hospitals next week. THE GUARDIAN - Elf Production Nigeria announces $0.38 per barrel drop in crude oil production costs below the $2.30 per barrel industry average. NATIONAL CONCORD - Court order scuppers plans by state-run Nigerian Telecommunications to repair burnt telephone exchange by demanding special levies from customers. --Lagos newsroom +234 1 2630317 7848 !GCAT These are the leading stories in the Kenyan press on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy. DAILY NATION - A police inspector attached to (Rift Valley town of) Eldoret police station was on Sunday night ambushed and killed by gangsters and his body dumped on a road. - Kenya lays out colourful reception for Iranian leader, Akbar Hashemi Rafsanjani. - Central Bank of Kenya takes over another (commercial) bank. EAST AFRICAN STANDARD - Police hold wanted gunman. - Traffic police announce that 1,834 people died on the roads between January and August this year. - State firms in Tanzania to be privatised. KENYA TIMES - It's D-Day for (Nairobi City) Mayor Dick Waweru: Full council meeting to decide his fate. - Man robbed banks of 21 million Kenyan shillings. - Coffee Board of Kenya enters new pact on coffee trade: It licenses ABN Amro Bank to operate commodity trading accounts. ($1=56 shillings). 7849 !C21 !CCAT !GCAT !GVIO Production at the Northam Platinum Ltd fell 20,000 tons in August as a result of violence and a stayaway at the mine, managers Gold Fields of South Africa said on Tuesday. It said following an outbreak of violence at the company's mine on the weekend of August 9 in which at least six people died, some 600 Zulu-speaking workers had not yet returned to work. "This had an impact on production from underground. In the August mine month concentrator plant throughput fell to 130,000 tons from the 150,000 tons achieved in July." It said additional workers had been engaged and normal production should resume shortly. Management was continuing its attempts to resolve the problems with the co-operation of union leaders and other worker representatives. -- Johannesburg newsroom, +27 11 482-1003 7850 !C21 !C24 !C31 !C311 !CCAT !GCAT !GWEA !M14 !M141 !MCAT Russia Tuesday revised upward the amount of corn and soymeal it plans to buy this year from the West to four to 4.5 million metric tons and said downpours in Siberia could affect the total grain harvest. Agriculture Minister Viktor Khlystun told an industry meeting in Russia's second city that Moscow would buy corn and soymeal from the United States, Canada and Australia this year. "We intend to import 4.0-4.5 million tons of maize (corn) and soymeal, not only in 1996 but probably also in the coming years," he said. Last month Khlystun said Russia would import three to four million tons of grains, mostly corn and soymeal, and about 500,000 tons of wheat this year. Analysts in the United States said they had not seen any evidence yet of Russian interest in major purchases of U.S. grain and soy meal. "There are occasions when we hear from them and they nibble for 20,000 or 80,000 tons of corn or meal. But it never happens because they end up buying from some eastern European country where they rail it in," one exporter said on condition he not be named. "So they do inquire on occasion but I have not heard anything from them in months," the exporter said. Others said the Russian government would have trouble financing such purchases. "Quite frankly, nobody in the industry expects much interest from them at the moment," another exporter said, also on condition he not be identified. Deputy Prime Minister Alexander Zaveryukha, who is in charge of the harvest, repeated earlier forecasts that the net harvest this year would be 75 million to 77 million tons. But he said a lot depended on Siberia. "There are complex weather conditions in Siberia," Zaveryukha told the industry meeting, adding that the Tomsk and Altai grain-growing regions had had steady rains for up to 10 weeks. "It (net output) will all depend on Siberia." Other regions have experienced drought this summer but the effect will be milder than last year, when grain output dipped to 63.4 million tons, the worst in three decades. Russia's grain imports will be mostly for the Far East, as well as for big cities and for reserves to feed the army. Siberia is not Russia's main-grain growing area, but its output is important because of the high cost of shipping grain from other regions to the far-flung Far East. Traders have said imports from the United States, Canada and Australia could be more economical for Russia than shipping domestic grain from southern regions across the vast country. Khlystun gave no details on when or how Russia would buy grain but said Russia needed corn, largely used as a feed-grain. Zaveryukha said Russia had harvested five million tons more grain than at this time last year but gave no figures. Other government and independent officials have put Russia's 1996 harvest in the range of 72-75 million tons. 7851 !GCAT !GPOL !GVIO Russian Prime Minister Viktor Chernomyrdin on Tuesday publicly backed a peace deal signed by security chief Alexander Lebed and Chechen rebel leaders. "The agreements signed by Lebed cause some concern but on the whole we consider them right," Chernomyrdin, who discussed the issue with President Boris Yeltsin on Monday, told a meeting of top North Caucasus officials. "We should act within the framework of these agreements and keep to their thrust." In Moscow, Lebed told a news conference that about 80,000 people had been killed in fighting in breakaway Chechnya since Russian troops entered the region in December 1994 to crush its bid for independence. "One may say that about 80,000 people have died, plus or minus 10,000," Lebed said. "Accordingly there are three times as many injured." Fighting in Chechnya died down last month after Lebed signed a ceasefire with the rebels, followed by a political agreement last weekend. Lebed is secretary of Russia's policy-making Security Council, which was given sweeping powers by Yeltsin last month to tackle the Chechen crisis after rebels seized most of the capital Grozny in an offensive that humiliated Moscow. Chernomyrdin told the meeting in the ethnic republic of Kabardino-Balkaria that the decision to defer by five years a final decision on Chechnya's status -- the most sensitive issue in talks -- was right. "We should calm down and this issue should be resolved in five years, maybe with the help of a referendum." Chernomyrdin said the Kremlin's initial decision to send troops to Chechnya "did not produce the required results, led to a dead end and to grave consequences". "We must sort out this disgrace and I would even say shame," he said. Yeltsin, on holiday at a country residence northwest of Moscow, has not yet commented publicly on Lebed's peace agreement. But Chernomyrdin's comments suggested that the Kremlin leader would also give a cautious nod of approval. Lebed, who is Yeltsin's personal envoy to Chechnya, has still to report to the president after his talks with rebel chief-of-staff Aslan Maskhadov. A further apparent snub came to Lebed from the Kremlin late on Tuesday in the form of an announcement that Yeltsin had decorated his bitter rival, Interior Minister Anatoly Kulikov. The award, "for services to the fatherland", appeared designed to show Lebed that he was out of line when he called for Kulikov's dismissal earlier this month for alleged mishandling of the Chechen conflict. In addition to postponing a decision on Chechnya's status, Lebed's accord also involves setting up a joint commission to oversee economic reconstruction and the withdrawal of troops. Most Russian troops have been withdrawn from Grozny and southern mountain regions in the past week, but federal forces remain on Chechen soil, mainly at bases near Grozny. Interfax news agency quoted Chernomyrdin's spokesman as saying on Monday that Russia's territorial integrity was paramount and that "the political price of the deal" had yet to be discussed. Analysts have speculated that Lebed and Chernomyrdin have been wrangling over Chechnya to further their own careers should something happen to Yeltsin and elections be held early. Lebed has made no secret of his presidential ambitions, and Chernomyrdin, who would take over for up to three months in the event of Yeltsin being incapacitated, is widely regarded as another possible successor. Yeltsin, 65, who suffered two heart attacks last year, has rarely been seen in public since late June and his failure to meet Lebed has raised speculation about his health. But presidential aides say his health is no cause for concern. 7852 !CCAT !GCAT !GVIO A lone Palestinian hijacker seized a Bulgarian charter plane on a flight from Beirut on Tuesday but released all 150 passengers at Varna airport before ordering the crew to fly on to Oslo. "The plane took off for Oslo at 1810 (1510 GMT)," a Varna airport air traffic controller told Reuters. The hijacker, who seized the TU-150 aircraft 15 minutes before it touched down in Varna, near Bulgaria's Black Sea coast, freed the passengers at the airport but kept the eight crew aboard. "The hijacker entered the crew cabin with a bomb in hand 15 minutes before landing and demanded to continue the flight either to Helsinki or to Oslo," Varna airport director Atanas Atanasov told reporters. "The pilot convinced him that the plane needed refuelling and a cleared passage to the final destination," said Atanasov. An airport official said the hijacker was Palestinian. "The hijacker is Palestinian and his name is Nadir Abdulah," a Varna airport official told reporters. He is around 35 years old and six feet high," the official said. He refused to negotiate directly with airport authorities and communicated only through the plane's captain, who described him as an Arab speaking broken English, Atanasov said. "The man (Abdulah) had most of his face veiled with a handkerchief and refused to take food or drink during the flight. Before touch down he became nervous," said one of the passengers. In Oslo, a spokeswoman for the justice ministry said the ministry's political department and the police had been alerted. The Norwegian news agency NTB quoted an aviation official as saying the plane was expected to reach Oslo at 1800 GMT. When the flight left Varna, flights to and from the city resumed after being suspended for three hours. Bulgaria has been involved in two recent incidents of threats to airliners. Last week a Turkish plane bound from Vienna to Istanbul landed at Sofia airport after receiving a bomb threat. In March a Turkish Cypriot airliner, hijacked on a flight from northern Cyprus to Istanbul, landed in Sofia to refuel before flying to Munich, where the hijacker was arrested. 7853 !GCAT !GDIP !GVIO The main U.N. relief agency evacuated Moslems on Tuesday after a mob drove them from their homes in Bosnia's Serb-controlled town of Banja Luka, a spokesman said. It was the first time the U.N. High Commissioner for Refugees (UNHCR) had evacuated a group of people from a threatened community since the Dayton peace agreement was signed nine months ago, Kris Janowski of the UNHCR told reporters. The decision to pull out the 31 Banja Luka Moslems was made two months after the families were thrown out of their houses. The UNHCR asked the town's mayor and the police chief to allow the Moslems to move back to their homes but repeated appeals failed to produce any action, Janowski said. "We went to the highest level... We received a lot of promises but nothing has ever been done. Indeed more people received eviction threats. "The bottom line is essentially these people cannot remain in Banja Luka since it is unsafe for them to remain in their home city." UNHCR buses took 11 people to neighbouring Croatia via Orasje on Tuesday without incident and the rest of the group would be evacuated probably in a week, he added. The Moslems were forced out of their homes two months ago when a Moslem living in Ireland returned to Banja Luka, infuriating local Serb refugees. An angry crowd then set about expelling every Moslem family from a street in Vrbanja, a district which had a predominantly Moslem majority before the war began in 1992. Many Moslems were beaten and sought shelter with the help of the UNHCR. During 3-1/2 years of war, Bosnian Serb forces expelled hundreds of thousands of Moslems and Croats in the Banja Luka region in a campaign of terror devised to carve out an ethnically "pure" Serb state. The UNHCR evacuation took place less than two weeks before Bosnia holds internationally-organised elections which are supposed to help reunify the country after 43 months of war. Since the Dayton peace agreeement was signed in December, communal authorities in Bosnia, especially the Serb leadership, have continued to expel or intimidate minorities in clear violation of the peace accords, the UNHCR says. The evacuation underscored a climate of violence in the run-up to the September 14 elections, which human rights groups say should be postponed. U.N. officials were concerned about reports of fresh expulsions of Moslems in the eastern town of Bijelina as well as bombings near the northern town of Brcko. In Bijelina, a Moslem woman in hospital for 15 days returned home to find Serb refugees had occupied it, said Alex Ivanko, spokesman for the International Police Task Force (IPTF). "The local police have not taken any action to get her back to her house," Ivanko told reporters. NATO and international police reported three more explosions near the northern town of Brcko, saying Serb authorities seemed determined to discourage Moslems from moving back to the area. Three Moslem houses were bombed near the village of Brod on Monday, just inside Moslem-Croat territory near Serb-controlled Brcko, Ivanko said. Also on Monday, NATO-led troops discovered plastic explosives on a pressure plate on a foot bridge south of Brcko and managed to dismantle the device, a NATO spokesman said. "We believe the destruction of houses and the device on the foot bridge are related," NATO spokesman Lieutenant-Colonel Max Marriner told Reuters. "It doesn't take the brains of a rocket scientist to work out that they are symptomatic of Serb intimidation of Moslems who are trying to resettle and rebuild in the Brcko area," he said. 7854 !E51 !E512 !ECAT !GCAT !GDIP German Chancellor Helmut Kohl promised to back Ukraine's economic and political reforms on Tuesday and appealed to German companies to look at business possibilities in the former Soviet republic. Speaking on the first full day of a two-day official visit, Kohl said reforms were important for Ukraine and for Europe. "We want to be partners in Europe," he said. "Ukraine can be a bridge to the countries in the east and the south of our continent." Speaking at Kiev University, Kohl pledged to support closer relations for Ukraine with the European Union and promised that the EU would start talks with Kiev on a free trade zone in 1998. Ukrainian President Leonid Kuchma has said recently that Kiev was seeking full-fledged membership in the EU and associate membership in the Western European Union. "Ukraine and the European Union agreed on cooperation which is directed into the distant future. It opens the possibility for the start of talks on agreement for a free trade zone at the begining of 1998," Kohl told students. "Germany will further back setting up of a special plan of actions for Ukraine in the European Union," he said. Kohl, who will hold a news conference in Kiev on Wednesday, met Kuchma and Prime Minister Pavlo Lazarenko on Tuesday for talks which dealt with bilateral relations, the Chernobyl nuclear power plant and a range of projects being considered by German firms. These include plans to modernise the Odessa airport in southern Ukraine and to modernise Ukrainian aircraft. Germany will also help to modernise an ageing thermal power plant in the eastern Ukrainian town of Zmiyev on the Russian border. Government sources estimate there will be up to $100 million in German investment put into the project. Ukraine has promised to close the Chernobyl plant, scene of the world's worst nuclear accident, by the year 2000, but is looking for funding guarantees for alternative energy sources and for a new concrete tomb around the plant's stricken reactor. Kohl also received a honorary degree at Kiev University and visited a German cemetery of World War Two soldiers. 7855 !CCAT !GCAT !GVIO A Bulgarian charter plane on a flight from Beirut, hijacked on Tuesday 15 minutes before landing at Varna airport in Bulgaria, is about to take off again for Oslo, an airport official said. Earlier, the lone hijacker had released all 150 passengers on arrival at Varna but had kept crew members aboard. the official said. "The plane will continue to Oslo with the hijacker and the eight-member crew on board," Varna airport director Atanas Atanasov told reporters. In the Norwegian capital, a spokeswoman for the Justice Ministry said Norway was closely following the situation. "The Justice Ministry's political department and the police have been alerted. We are waiting for more information," she said. The hijacker's identity was unknown. He was refusing to negotiate directly with the airport authorities and communicated only through the plane's chief pilot, was an Arab and spoke broken English, said Atanasov, quoting the pilot. He said the hijacker had entered the pilot's cabin carrying a bomb as the plane prepared to land, and demanded to have the plane refuelled and flown either to Oslo or Helsinki. "The plane's transit to Oslo has been cleared," said Atanasov. All flights to Varna, near the Black Sea, were cancelled for the time being. Last week a Turkish airliner bound from Vienna to Istanbul, landed at Sofia airport after receiving a bomb threat. In March a Turkish Cypriot airliner hijacked on a flight from nothern Cyprus to Istanbul landed in Sofia to refuel before flying to Munich, where the hijacker was arrested. 7856 !G15 !G158 !GCAT !GPOL !GVIO Two more minority families were evicted from Croat-controlled Mostar in Bosnia in a "kick in the face" for the European Union, EU officials said on Tuesday. One family was reinstalled in their flat under police guard on Tuesday after EU police monitors went there to confront the illegal occupants, EU mission spokesman Howard Fox said. Sir Martin Garrod, who heads the two-year-old mission overseeing reconstruction in Mostar, had urged Croat gangsters reigning in the west of the city to end evictions of ethnic minorities or jeopardise postwar development aid. But Fox told Reuters two minority families -- one Moslem and the other of mixed Moslem-Serb heritage -- were driven out of their flats in west Mostar on Monday night by masked men. "It's a real kick in the face of Sir Martin Garrod after his appeal against paramilitary organised crime," said Fox. "One family came running to the Hotel Ero (local EU heaquarters) for help. One of the relatives had no shoes on," Fox said. "This family is now back in their flat under west Mostar (Croat) police protection." Garrod took the unusual step last Friday of publicly identifying six Croats reputed to be paramilitary gang bosses in the Croat-held southwest of Bosnia. He called on them to stop ethnic terror. Western officials involved in the troubled effort to reunify and rebuild Mostar hold the six largely responsible for lawlessness in the western half of town, and especially for continued evictions of Moslem residents. None of the six responded to Garrod's appeal. Neighbouring Croatia armed and sponsored the Bosnian Croats in a 1993-94 separatist war, led in part by profiteering ultra-rightist gangs, against Bosnia's Moslem-led central government. Croatia remains the patron of Bosnian Croats who have clung to a mini-republic with west Mostar as "capital" in defiance of the 1995 Dayton peace treaty on Bosnia. The U.N. war crimes tribunal is believed to be investigating some prominent reputed Croat crime barons for atrocities against Moslem inhabitants and prisoners in 1993-94. Garrod had hoped his call for justice in Mostar would find an echo in Croatia, whose government must prove it is complying with peace treaty provisions to reunify Bosnia if it is to qualify for association with the EU. Fox said the rate of ethnic expulsions from west Mostar had soared in August despite EU-sponsored June 30 elections to reintegrate the city and the creation of a joint Moslem-Croat assembly three weeks ago. The safety of both Croats and Moslems was being threatened by increasing street violence, particularly stone attacks on vehicles on the Moslem east side of the Bulevar street which skirts the old inner-city front line, he said. As a result, Mostar's special multi-national police force, including 90 Western European Union officers, had increased its presence in hot spots. 7857 !GCAT !GPOL !GVIO Russian Prime Minister Viktor Chernomyrdin on Tuesday publicly backed a peace deal signed by security chief Alexander Lebed and Chechen rebel leaders. "The agreements signed by Lebed cause some concern but on the whole we consider them right," Chernomyrdin, who discussed the issue with President Boris Yeltsin on Monday, told a meeting of top North Caucasus officials. "We should act within the framework of these agreements and keep to their thrust." In Moscow, Lebed told a news conference that about 80,000 people had been killed in fighting in breakaway Chechnya since Russian troops entered the region in December 1994 to crush its bid for independence. "One may say that about 80,000 people have died, plus or minus 10,000," Lebed said. "Accordingly there are three times as many injured." Fighting in Chechnya died down last month after Lebed signed a ceasefire with the rebels, followed by a political agreement last weekend. Lebed is secretary of Russia's policy-making Security Council, which was given sweeping powers by Yeltsin last month to tackle the Chechen crisis after rebels seized most of the capital Grozny in an offensive that humiliated Moscow. Chernomyrdin told the meeting in the ethnic republic of Kabardino-Balkaria that the decision to defer by five years a final decision on Chechnya's status -- the most sensitive issue in talks -- was right. "We should calm down and this issue should be resolved in five years, maybe with the help of a referendum." Chernomyrdin said the Kremlin's initial decision to send troops to Chechnya "did not produce the required results, led to a dead end and to grave consequences". "We must sort out this disgrace and I would even say shame," he said. Yeltsin, on holiday at a country residence northwest of Moscow, has not yet commented publicly on Lebed's peace agreement. But Chernomyrdin's comments suggested that the Kremlin leader would also give a cautious nod of approval. Lebed, who is Yeltsin's personal envoy to Chechnya, has still to report to the president after his talks with rebel chief-of-staff Aslan Maskhadov. In addition to postponing a decision on Chechnya's status, Lebed's accord also involves setting up a joint commission to oversee economic reconstruction and the withdrawal of troops. Most Russian troops have been withdrawn from Grozny and southern mountain regions in the past week, but federal forces remain on Chechen soil, mainly at bases near Grozny. Interfax news agency quoted Chernomyrdin's spokesman as saying on Monday that Russia's territorial integrity was paramount and that "the political price of the deal" had yet to be discussed. Analysts have speculated that Lebed and Chernomyrdin have been wrangling over Chechnya to further their own careers should something happen to Yeltsin and elections be held early. Lebed has made no secret of his presidential ambitions, and Chernomyrdin, who would take over for up to three months in the event of Yeltsin being incapacitated, is widely regarded as another possible successor. Yeltsin, who suffered two heart attacks last year, has rarely been seen in public since late June and his failure to meet Lebed has raised speculation about his health. But presidential aides say his health is no cause for concern. 7858 !GCAT Here are highlights from Polish newspapers this morning. RZECZPOSPOLITA - According to a telephone survey of Polish political, intellectual and business elites by the PBS polling institute, 76 percent believe the planned central government reform will improve administration while 16 percent think otherwise. - France Telecom will halt funding of the Poznan-based Higher School of Telecommunications as the result of the French telecommunications firm's privatisation and a dispute with TPSA, Poland's telecommunications monopolist, over the Centertel cellular telephone company. - Poland's coal suppliers have agreed to increase prices to electricity suppliers to recover losses caused by inflation. The previously contracted price of $32 per tonne did not make up for the losses. - Lublin's municipal transport company has contracted to buy 60 Jelcz M121M city buses from Jelcz SA-Zasada Group and 50 N4020 mega-buses from Neoplan Poland Ltd. The contract will be financed by the city's coming 90 million zloty bond issue. - Germany's Eurowings News air transport company will start regular flights on the Katowice-Dusseldorf route. Eurowings will conduct five flights a week. It flies ATR 42 planes and previously started flights to four other Polish big cities. - Philips Lighting BV has started Philips Lighting Bielsko (PLB) company in Bielsko-Biala province, southern Poland. PLB will invest 16 million zlotys in the next three years in the local lamp component maker that Philips will buy this year, PLB Anzelm Cizkowicz said. NOWA EUROPA - "We should aim at increasing Asia's share in Poland's exports from the present 2.5 percent to five percent in the first decade of the next century", Poland's Prime Minister Wlodzimierz Cimoszewicz said at the First Poland South East Asia Economic Forum. - Poland's Tax Office granted Poznan-based WBK SA bank a 3.2 million zlotys income tax relief for 1996 on condition that it takes over a branch of Bydgoszcz-based BBB construction bank, WBK representatives said. - Poland's trade gap increased sevenfold in June and July compared with the same period of 1995 and could top $6 billion this year. - The Hestja SA insurance firm may go bankrupt this month following the withdrawal of the U.S. World Health Network which had planned buying Hestja but gave up after the Insurance Guarantee Fund refused to back the scheme, a Hestja official said. GAZETA WYBORCZA - Krakow-based Krakchemia trading company's revenues in August this year totalled 11.55 million zlotys, an 11 percent increase compared with the same period last year. Over the first eight months of 1996 revenues grew by 47 percent compared with the first eight months of 1995. - The city of Poznan court registered the listed Tonsil sound system maker's share capital increase at the level of 8.34 million zlotys. - The listed Novita carpet maker's revenues in August this year amounted to 6.312 million zlotys. ZYCIE WARSZAWY - A new Special Economic Zone (SSE) in Suwalki province, north-eastern Poland, started activities yesterday, SSE Suwalki managing director Tomasz Fimowicz said. The zone covers 430 hectares and will operate for 20 years. - Skoda Auto Poland has introduced a new model of the Skoda Felicia passenger car. The car has a 1300 cubic cm multipoint fuel injection engine and an immobiliser - it will cost 24,890 zlotys. PARKIET - The listed Swarzedz furniture maker supervisory board has chosen Deloitte & Touche auditing firm to carry out its financial restructuring process. - Kielce-based Bank Staropolski has introduced credits for purchasing T-bonds worth up to 3,000 zlotys. -- Warsaw Newsroom +48 22 653 9700 7859 !GCAT !GDIP !GVIO A source in the Russian Foreign Ministry, quoted by Interfax news agency, said on Tuesday that the situation in the Gulf was "extremely dangerous" after U.S. air strikes in southern Iraq. The source said Moscow was watching events in Iraq with growing concern. "The situation could get out of control," the source told the agency. "Developments in the Gulf region are taking an extremely dangerous turn. Now everything depends on further action by the Americans." The Foreign Ministry could not confirm the comments, referring reporters to a briefing due to be held at 2 p.m. The Foreign Ministry usually holds two briefings a week, but unnamed sources often give Russian news agencies an initial reaction. President Boris Yeltsin's press office said the Kremlin was watching the events closely, but a spokesman said any official reaction would come from the Foreign Ministry. Interfax did not make clear whether Russia had been informed in advance about the raid, which the United States said was in retaliation for Iraqi military attacks against Kurds. The agency said Deputy Foreign Minister Viktor Posuvalyuk, who has been visiting Iraq, had already left Baghdad for Jordan. The deputy minister met his Iraqi counterpart, Tareq Aziz, on Saturday. There have been no reports yet of casualties from the missile strikes, fired from B-52 bombers and American warships in the Gulf at air defence and other military targets. Russia has generally taken a softer line on Baghdad than Western countries since the end of the 1991 Gulf War and has favoured the early lifting of sanctions against Iraq. On Monday Moscow called for restraint in the conflict between Iraqi ruler Saddam Hussein and Kurdish rebels and appealed to them not to use force. "We are counting on all countries, including those neighbouring Iraq, not to use forceful methods to resolve this problem, (or) to threaten the sovereignty and territorial integrity of Iraq," a Foreign Ministry statement released on Monday said. Nikolai Stolyarov, the deputy head of the foreign affairs committee of the State Duma (lower house of parliament), criticised the raid. "I think the consequences of this action will be extremely negative," Interfax quoted independent deputy Stolyarov as saying. 7860 !GCAT These are some of the main stories in Sofia newspapers today. Reuters has not verified these stories and does not vouch for their accuracy. 24 CHASA -- Bulgaria's Supreme Court on Monday blocked the presidential candidacy of the Socialist nominee, the Foreign Minister Georgi Pirinski because he was born in the U.S. -- Bulgaria's Kremikovtsi steel works is expected to post some one billion levs profit for the second half of the year, company officials said. @ The plant has reported a 500 million levs profit for the first half of 1996. TRUD -- The International Monetary Fund (IMF) will extend to Bulgaria the next tranches of a standby loan under a funding agreement signed in July only if the structural reform programme of the cabinet is fully implemented, the IMF's mission leader Ann McGuirk said after talks with prime minister Zhan Videnov. @ -- Bulgaria's association of air traffic controllers said it plans to hold one-hour-per-day warning strikes after failing to reach agreement with their employer, chairman of the strike commitee Stefan Raichev said. -- The state-owned Bulgarian Post Bank reported a 1.137 billion lev pre-tax profit for the first seven months of 1996, board chairman Momchil Andreev. STANDART @ -- Bulgaria's Socialist party is expected to nominate at an extraordinary plenum new candidates for the presidential elections in October after the Supreme Court confirmed the central electoral commission's decision to refuse registration to the initial Socialist candidates for president and vice-president. -- Commercial banks could raise their interest rates on deposits to restore confidence in the banking system even if the central bank does not raise its main interest rate, Finance Minister Dimiter Kostov said. @ -- Bulgaria's Privatisation Agency said it has sold the debt-ridden Stamboliiski-based cannery Vitamina, initially slated for liquidation, for 10 million levs to the Bulgarian-Greek joint venture TKM Fruit and Juices Manufacturing Ltd. KONTINENT -- The president of Life Choice International get-rich-quick fund Michael Kapustin was extradited from Germany late last night and was put under police custody in Sofia. Bulgaria requested his extradition on grounds of suspected fraud and emezzlement. -- Sofia Newsroom, 359-2-84561 7861 !GCAT NARODNA OBRODA - Wood processor Drevoindustria Zilina is to issue 200 million crowns in four-year bonds on September 5. The issue will be managed by IRB bank. Interest was set at 13.7 percent for first year, and at the discount rate plus four percentage points for the remaining three years. - Miroslav Knitl, head of the Association of Slovak Enterpreneurs, said the recent central bank measures aimed at restricting commercial bank credit policy would result in lower financial resources for imports of new technology needed to restructure the economy. - Knitl said economic reforms would be delayed as banks will not be able to extend loans and that the negative impact of this policy will be visible within seven months. - The state-run river transport company Slovenska Plavba Dunajska s.p. said it had asked the Transport Ministry for the official status of national carrier. - About 1,000 new Skoda Octavia cars will be imported to Slovakia this year. Up to 10,000 Octavias are expected to be imported to Slovakia in 1997. HOSPODARSKE NOVINY - A total of 1,530 bankruptcy petitions were filed last year, but only in one case did the company go into liquidation. - Stefan Gavornik, President of the National Property Fund (NPF), the state privatisation agency, said not even the country's Supreme Court could reverse the NPF rulings. - Slovakia's sole salt producer Solivary Presov plans a modernisation programme, worth around 1.5 billion crowns, to increase annual production to 390,000 tonnes from the current 100,000 tonnes. About 200,000 tonnes will be exported after the completion of the project in 1998 and the company expects to recover the investment within six years. SME - The opposition may demand the dismissal of Minister of Culture Ivan Hudec and Prosecutor General Michal Valo at the forthcoming session of the parliament. - Slovakia's overall foreign debt totalled $6.1 billion as of June 30, $300 million more than at the end of last year. The official foreign debt of the government and the central bank totalled $1.8 billion, an increase of $200 million from the end of last year. -- Bratislava Newsroom, 42-7-210-3687 7862 !GCAT PRAVO - Tax losses on cigarettes and alcohol exceed the cuts to the budget. In general tax frauds in these areas cost the state billions of crowns in revenues. - The executive council of the Civic Democratic Party, the leading coalition partner, has mobilised its functionaries to investigate the bankruptcy of the Kreditni Banka Plzen. Both Prime Minister Vaclav Klaus and President Vaclav Havel have spoken out about the delay in any action in the affair. - EuroTel has expanded its network of countries offering GSM services to the company's Czech clients to 10 with the introduction of Switzerland on Monday and Germany on Thursday. - The Czech Chamber of Commerce has begun a programme called Komplex Servis which seeks out foreign partners for any type of cooperation with Czech firms. The programme is designed for smaller companies which do not have their own foreign network. - While Kralovopolska Brno posted a profit of 162.1 million crowns in 1995, shareholders will not be receiving dividends this year. Of the profit, 99 million crowns will go to pay off previous losses while the remainder will increase the reserve fund. - Aero Vodochody is considering cooperating with Taiwan in the construction of small business aircraft. - According to research carried out in August among organisations concerned with foreign trade, the total trade deficit could reach 163 billion crowns, 20 billion crowns more than originally predicted by the Czech Statistics Office. - Skoda Plzen recently received a licence to trade in weapons, becoming the 97th Czech company licensed to do so. The licence is one of the first steps by the Plzen-based engineering firm to renew weapons production. - In a shareholders' meeting on Monday, Pragobanka approved a proposal to increase the basic capital from 1.36 billion crowns to 1.86 billion crowns. HOSPODARSKE NOVINY - An independant commission for the control of Prague Stock Exchange's capital market could begin operations in July, 1997. - Banka Hana, which recently announced a gross profit of 52 million crowns for the first half of this year, has moved its central office to Brno from Prostejov. - According to the general manager and the chairman of the board of the arms consortium RDP Group, American F/A-18 aircraft could be exchanged for Tatra lorries. He stated that the American side wholeheartedly supports the exchange and all that remains is for the support of the Czech government and the Defence Ministry's decision to use these particular aircraft to modernise the Czech air force. - Kaucuk Group Kralupy nad Vltava a.s., a manufacturer and processor of petroleum products, posted a gross profit of 443.4 million crowns on sales of 3.2 billion crowns for the first half of 1996. -- Prague Newsroom, 42-2-2423-0003 7863 !GCAT !GPOL President Boris Yeltsin on Tuesday awarded Interior Minister Anatoly Kulikov a medal "for services to the fatherland" in an apparent snub of security chief Alexander Lebed, who has called for Kulikov's dismissal. "A. Kulikov deserves a high award for services to the country, a big personal role in strengthening law and order and many years of conscientious service in the organs of interior ministry," Russian news agencies said, quoting the presidential press office. Last month Lebed, who signed a political deal with the Chechen rebels on Saturday aimed at ending the 21-month-old conflict in the breakaway region, said the president should dismiss Kulikov for allowing rebels to attack the Chechen capital of Grozny twice this year. The last attack, on August 6, left them in control of most of the city, which was patrolled by interior ministry troops. Yeltsin did not respond to Lebed's call for Kukikov's dismissal, which was made at a news conference, but Interfax news agency later quoted sources in the Kremlin as saying that the president had told Kulikov to stay on. Yeltsin, on holiday outside Moscow, has not met Lebed since he signed the deal with the rebels, which the former paratroop general said marked the end of the conflict. Prime Minister Viktor Chernomyrdin briefed Yeltsin on the deal on Monday and Chernomrydin's spokesman later expressed reservations about it. But on Tuesday the prime minister gave the deal his general backing. On the face of it there appeared to be no obvious grounds for rewarding Kulikov. There has been no dramatic improvement in the work of the police and interior ministry troops have been humiliated in Chechnya. The medal -- "Third class" -- was not the top Russian award. The move appeared to be part of a power-play at the top levels of Russian politics aimed at putting the ambitious and outspoken Lebed in his place. 7864 !GCAT !GENT !GPRO Pop singer Michael Jackson flew into Prague on Tuesday to launch his first tour in two years as promoters erected a huge statue of the star on a hill over the city where a monument to Soviet chief Josef Stalin once stood. Jackson's three-month "HIStory" tour through Europe, Africa and Asia kicks off on Saturday with a concert on Prague's Letna Plain where 130,000 are expected, but he arrived four days early to do some sightseeing in and around the Czech capital. After his jet sat for half an hour on the tarmac of Prague airport's VIP terminal, the flamboyant but reclusive Jackson emerged in a gold lame and red outfit under a white parasol blocking the bright sun. Several hundred fans handpicked by promoters greeted the star, and he hugged several who presented gifts on the tarmac before Jackson's motorcade left. After waving at others lining the 15 km (10 mile) route into the city from a gleaming Rolls Royce, Jackson and his police-escorted phalynx of luxury cars carrying his entourage drove through a screaming hotel welcoming party. Thousands of fans massed at the hotel on the river Vltava (Moldau), climbing over each other for a glimpse of the star on his first tour since he was cleared of child molestation charges by a U.S. court because of lack of evidence. Pavel Klika, in his late-teens from the southern Czech city of Tabor, played a human "K" in a seven-member group spelling out J-A-C-K-S-O-N for his arrival. "I had to come here to see him to really believe he was in the Czech Republic, even though I have a ticket to see him on Saturday -- I just couldn't wait," Klika said. The singer's penthouse suite faces the hill where a 10-metre (33 foot) water-filled statue of Jackson takes up the rock pedastal where Communists built a massive monument to Stalin. That statue was blown up after his death in 1953. Despite complaints about the Jackson statue in some quarters, Prague City Hall finally approved its placement until the concert is completed on Saturday. Two huge torches on either side of Jackson's statue were lit recalling the days when Stalin's Cult of Personality kept two Olympic-style flames burning. The Prague stop, Jackson's first visit to the Czech capital in a long series of rock concerts since the fall of Communism here in 1989, has so far avoided the controversy at other planned dates on his tour. In South Korea, civic and religious groups reacted bitterly to a decision to let Jackson play two concerts in Seoul in October, saying it was unbelievable that the government agreed to make Jackson the teenagers' idol. A planned stop in Casablanca was cancelled by Moroccan authorities, without explanation. A concert organiser said the government did not want 100,000 youths all in the same place. 7865 !GCAT !GPOL !GVOTE Slovenian President Milan Kucan on Tuesday ended his consultations with political parties on agreeing a date for a general election, which must be called by December. Political sources said the president could announce the election date within the next couple of days. The announcement has to come 60 to 90 days before the date of the poll which, under the constitution, must take place between October 27 and December 8. Sources said the general consensus for the date among the parties seemed to lean towards November 10 or November 17 for the ex-Yugoslav republic's third multi-party poll. While most parties accepted Kucan's invitation to attend talks, the right-wing Social Democratic Party (SDS) refused to meet the president. The SDS lodged an appeal to the Constitutional Court in August after parliament voted to hold a referendum on reforming the electoral system only after the new assembly is elected. The SDS said consultations should have been arranged only after the Court issued its ruling, which is expected on September 10. An opinion poll on Monday showed the centrist Liberal Democrats of Prime Minister Janez Drnovsek with most voter support, with the SDS in second place. 7866 !C42 !CCAT !E12 !E14 !E41 !ECAT !GCAT !GJOB The Czech government will attempt to keep overall wage increases in the economy under a nominal 13.8 percent next year, a spokeswoman said. Eva Ticha of the cabinet's press department told reporters that the cabinet would allow only a maximum 12.5 percent wage increase in the state sector and state-controlled companies. "Prevention of extreme wage increases is vital for retaining macroeconomic stability, above all for lowering the inflation rate and stopping the growth of the balance of payments deficit," said Ticha after a cabinet meeting on next year's budget . She added that the government would consult employers and unions in order to limit wage increases. Czech industrial wages rose 19.6 percent in July year-on-year, according to preliminary figures. Inflation stood at 9.4 percent year-on-year. Ticha also said that the ministers would next week look into possibilities of how to reduce tax or social insurance rates "if there is some room (in the budget)". The ministers agreed last week that the 1997 budget would be balanced with expenditures rising 11.8 percent from 1996 to 549 billion crowns. -- Jan Lopatka, Prague Newsroom, 42-2-2423-0003 7867 !GCAT !GDIP !GVIO Poland's foreign ministry understands the reasons for U.S. missile strikes in Iraq but is concerned for the fragile peace in the region, a spokesman said on Tuesday. The United States on Tuesday fired 27 cruise missiles at targets in Iraq in retaliation for attacks by Baghdad on Kurds in northern Iraq. Spokesman Pawel Dobrowolski said: "There is some logic behind the American counter-move...but we are concerned over a breaking down of the volatile peace that there was in the region." Poland is seeking rapid entry into the U.S.-led North Atlantic Treaty Organisation. 7868 !GCAT !GDIP Officials from Slovenia, Bosnia, Croatia and Macedonia met on Tuesday for talks about the succession problems of the states of the former Yugoslavia but said they had made little progress. They said an informal proposal put forward by international legal expert Sir Arthur Watts, special negotiator for succession issues at the office of international coordinator Carl Bildt, must be altered significantly before the talks could be concluded. The officials declined to give details of Watts's proposal, but indicated the most important changes related to the former Yugoslavia's assets held abroad. "For example, we cannot agree that the new Yugoslavia simply retains embassies that used to belong to the former Yugoslavia," Miran Mejak, chairman of the Slovenian succession commission, told a news conference. Rump Yugoslavia, now comprising only Serbia and Montenegro, has so far refused to participate in the negotiations. Yugoslavia's pre-1991 assets are estimated to total from $60 to $100 billion. Officials of all the ex-Yugoslav successor states, including rump Yugoslavia, are to meet Watts in Brussels for a series of talks scheduled from September 5 to 12. Over the past weeks Belgrade has appeared to soften its stance on the succession issue and indicated it is now ready to accept International Monetary Fund (IMF) terms for membership. Rump Yugoslavia has also attempted to torpedo other successor republic's moves to settle their shares of the former Yugoslavia's commercial debts, estimated at $4.3 billion. Both Slovenia and Croatia have ignored legal challenges by Belgrade and completed separate rescheduling agreements with their creditors. Resolution of the debt problem is seen as a key condition for a successful conclusion of the succession talks. 7869 !GCAT !GDIP !GPOL !GVOTE Only hours before polls were due to close, organisers of Bosnian absentee elections held in Serbia said they were disappointed with the turnout of about 42 percent of registered voters. "We expected that the number of voters would be higher," said the OSCE's representative Antonos Tsakirs. "We did not expect that all (refugees) would vote, but the cancellation of elections for local municipalities may have influenced some voters." The Organisation for Security and Cooperation in Europe (OSCE) which is organising the Bosnia elections under a UN mandate, said some 85,000 refugees had registered to vote in Serbia ahead of the poll rather than return to Bosnia. About 640,000 Bosnian refugees were registered to vote in 55 countries around the world in the week from last Wednesday. The election day for Bosnia itself is September 14. "Through the week we estimate about 1,500 went to vote in person at our 54 polling stations in Serbia," Tsakirs said. "The situation for voting by mail is better. By noon (on Tuesday) we had received about 30,000 ballots through the post." The polling stations were scheduled to close at 1900 local time (1700 gmt), although over the next week electoral officials will accept ballot papers through the post that have been stamped with a post-mark before midnight on Tuesday. The OSCE has described the election process as the most complicated in history. Bosnian voters are choosing representatives for the Presidency of Bosnia Hercegovina, the House of Representatives of Bosnia Hercegovina, the House of Representatives of the Federation, the National Assembly of the Serb Republic, the Presidency of the Serb Republic and cantonal assemblies. Even before the voting began, reports of widespread manipulation of the registration process in Yugoslavia and Bosnian Serb territory cast a shadow over the election. Citing irregularities that would have handed the Serbs unfair electoral victories in local elections and legalise results of ethnic cleansing, the OSCE mission postponed municipal polls. Soon after the polls opened for absentee ballots, hundreds of refugees complained that they had not received their papers which should have been delivered through the post. OSCE officials said they would be delivered within the following few days, although Tsakirs conceded that some refugees were complaining on Tuesday that their papers had still not arrived. "The figure is not significant," he said. "What I can figure out is that some people changed address and did not go back to pick the papers up, or postmen were unable to deliver them for some reason." Tsakirs said while he was concerned at the relatively low turnout, he said many people may have changed their minds and decided to vote in person on polling day in the villages where they used to live before the war. Western powers including the United States concede that the vote in Bosnia may not be entirely free and fair, but they insist the elections should go ahead to put unified democratic institutions in place and seal the Dayton peace accord. But human rights groups say the poll will only give a thin veneer of democratic legitimacy to ethnic conquests won in battle. 7870 !GCAT !GVIO A Bulgarian charter plane on a flight from Beirut, hijacked on Tuesday 15 minutes before landing at Varna airport in Bulgaria, is about to take off again for Oslo, an airport official said. "The plane, which landed for refuelling, will take off for Oslo shortly," a Varna airport traffic controller told Reuters by telephone. All 150 passengers on board the TU-154 aircraft were freed along with their luggage. "The plane will continue to Oslo with the hijacker and the eight-member crew on board," Varna airport director Atanas Atanasov told reporters. The hijacker, who refused to negotiate directly with the airport authorities and communicated only through the plane's chief pilot, was an Arab and spoke broken English, said Atanasov, quoting the pilot. The hijacker entered the crew cabin with a bomb in hand before landing and demanded to refuel and continue either to Oslo or Helsinki. "The plane's transit to Oslo has been cleared," said Atanasov. 7871 !E12 !E51 !ECAT !GCAT !GDIP !GPOL German Chancellor Helmut Kohl promised to back Ukraine's economic and political reforms on Tuesday and appealed to German companies to look at business possibilities in the former Soviet republic. Speaking on the first full day of a two-day official visit, Kohl said reforms were important for Ukraine and for Europe. "We want to be partners in Europe," he said. "Ukraine can be a bridge to the countries in the east and the south of our continent." Kohl, who holds a news conference in Kiev on Wednesday, met Ukrainian President Leonid Kuchma on Tuesday for talks which dealt with bilateral relations, the Chernobyl nuclear power plant and a range of projects being considered by German firms. These include plans to modernise the Odessa airport in southern Ukraine and to modernise Ukrainian aircraft. Ukraine has promised to close the Chernobyl plant, scene of the world's worst nuclear accident, by the year 2000, but is looking for funding guarantees for alternative energy sources and for a new concrete tomb around the plant's stricken reactor. 7872 !E12 !ECAT !GCAT !GPOL Hungarian Prime Minister Gyula Horn on Tuesday outlined plans for a powerful economic think-tank to advise the government on long-term strategy. "The finance minister is already organising a working group which will formulate national strategy for the next few years," Horn told reporters. Horn said the group, to comprise up to 20 people, will not interfere with the work of the finance and trade and industry ministries but will set priorities and direction for national policy. Horn said the new body, which would be set up this year, would work out economic strategy in the context of European Union accession and would resemble policy bodies in France and other West European countries. The move is part of Horn's reshuffling of economic policy-makers which began last month with the resignation of trade and industry minister Imre Dunai. This was followed by an announcement of a planned merger of the privatisation and trade and industry portfolios under current privatisation minister Tamas Suchman. When asked whether economic policy would be directed by the ministry of trade and industry or by the finance ministry or by the new think-tank, Horn said both ministries and the economic council would feed into the cabinet where final decisions would be made. "There is no rivalry and I don't think there will be because they have different tasks," he said. Horn said he hoped parliament's economics committee would accept Suchman's nomination as minister of industry and trade. Hungary's state privatisation agency, APV Rt, for which Suchman is currently responsible, will come under the industry and trade umbrella. Suchman is known as one of the more left-leaning members of the Socialist Party but under his tenure as privatisation minister Hungary has achieved record privatisation revenues. Dunai was said to have had a falling out with the government over the issue of rate hikes for power companies. He was apparently supporting higher increases than the cabinet thought would be acceptable to the general public. The government announced last week that it was delaying implementation of rate hikes which had been expected by private investors who last year bought up a large segment of Hungary's power and gas distribution business. 7873 !CCAT !GCAT !GVIO A chartered plane of the private Bulgarian Hemus Air company on a flight from Beirut to Varna in Bulgaria was hijacked on Tuesday fifteen minutes before landing, an airport official said. "The hijacker demanded refueling and requested a passage either to Helsinki or to Oslo," Varna airport air traffic controller Dimiter Marinov told Reuters. The TU-154 aircraft with 150 passengers on board was safe on the ground at the airport, said Marinov. The hijacker, whose identity was unknown, refused to negotiate with airport authorities. "The plane will take off when it has refuelled and when we have cleared the plane's transit to its destination which is uncertain so far," said Marinov. All flights to Varna near the Black Sea were cancelled for the next two hours. Last week a Turkish airliner bound from Vienna to Istanbul, landed at Sofia airport after receiving a bomb threat. In March a Turkish Cypriot airliner hijacked on a flight from nothern Cyprus to Istanbul landed in Sofia to refuel before flying to Munich, where the hijacker was arrested. 7874 !GCAT !GDIP !GVIO The Russian government said on Tuesday that U.S. air strikes on Iraqi territory were unacceptable and demanded a halt to all military action against Iraq, Itar-Tass news agency said. "The government of the Russian Federation sees the American military operation as an inappropriate and unacceptable reaction to the latest events in Northern Iraq," it quoted a government statement as saying. "Russia insists that all military actions in Iraq threatening its sovereignty...are stopped." The statement said the U.S. strikes earlier on Tuesday had followed statements by the Iraqi leadership saying that it was withdrawing its forces from Kurdish areas of northern Iraq. It said that in general, threats to use force against Iraq did not help to settle the situation in the Gulf. "Focus on the use of force against Iraq is triggering a series of new crises in the region," Tass quoted the statement as saying. Russian Foreign Minister Yevgeny Primakov earlier criticised the U.S. strikes on Iraq at a news conference in the Swiss capital Berne. He suggested they were prompted by U.S. domestic political considerations in the run-up to the presidential elections in November. 7875 !GCAT !GPOL !GVIO Russia's Alexander Lebed, who brokered a peace deal with Chechen separatists, said on Tuesday his political rivals did not need to fear he would use his success to boost a drive for the presidency. "I cannot understand political organisations and media who allege that I have launched a presidential campaign," Lebed, who came third in the first round of the Russian presidential election in June, told a news conference. "I just want to end the war," he said. Lebed said about 80,000 people had been killed and three times as many injured in 21 months of fighting in Chechnya. The retired paratroop general, appointed by President Boris Yeltsin to be his special representative in Chechnya, sealed a truce there and struck a deal to defer the thorny question of Chechen independence by five years. Lebed said he did not want to claim all the credit. "I offer to share it among all the commissions on Chechnya," Lebed said in a reference to the now defunct state commission on Chechnya chaired by Prime Minister Viktor Chernomyrdin. Analysts see Chechnya as a zone of political rivalry between the charismatic Lebed, whom Yeltsin sees as his political heir, and Chernomyrdin, who is backed by the rich and powerful energy lobby. Yeltsin's disappearance during the final stage of his re-election campaign in late June, which sparked rumours that the 65-year-old leader was in poor health, has fuelled such speculation. Yeltsin has only once showed up in public since June 26, although he has made several brief television appearances. His aides deny any health problems and say Yeltsin is recovering from exhaustion from the reelection campaign. Yeltsin, now on vacation at a hunting lodge outside Moscow, has not met Lebed since he put him in charge of Chechnya. But aides said the president discussed Lebed's plan with Chernomyrdin on Monday. Chernomyrdin initially reacted cautiously, saying that many aspects of Lebed's deal needed clarification. But he openly backed the plan on Tuesday. "The agreements signed by Lebed cause some concern but on the whole we consider them right," Chernomyrdin told a meeting of top North Caucasus officials. Lebed said he was not over-worried by his failure to meet Yeltsin. "I am in permanent touch with the president, on paper and and by telephone," he said. "I think any fuss about this is out of place." He argued against reconsidering the deal. "The fighting has stopped, documents have been signed. May God forgive anyone who tries to say that this was wrong or illegal." 7876 !C13 !CCAT !GCAT !GPOL Poland's biggest opposition party on Tuesday accused the ruling leftist coalition of trying to grab control of public television, the country's main source of news, and use it in the campaign for elections next year. Last week's sacking of the chief of one of television's two channels was a further sign the coalition aimed to steer programmes during the parliamentary election campaign, said Andrzej Potocki, spokesman for the Union for Freedom (UW). "The electoral campaign is coming closer and the coalition wants to subordinate public television to itself," Potocki told Reuters. A dominant group in television management, linked to the two ruling coalition parties of ex-communists and Peasants, fired First Channel director Tomasz Siemoniak on Friday -- prompting nine senior editors to quit in solidarity. Siemoniak said he had been fired by political appointees and alleged: "They want to root out all programmes which do not fall in with the political views of their protectors." But Prime Minister Wlodzimierz Cimoszewicz firmly denied on Tuesday any attempts to influence the television. "The government has not, does not and will not exert any pressure on internal decisions in the television," PAP news agency quoted Cimoszewicz as telling reporters. The head of the television has said the sacking was merely over Siemoniak's failure to carry out agreed guidelines. The latest uproar is part of a sequence that has already aroused concern in Washington and other Western countries over public television -- seen as a vital element in a democracy only established with the 1989 fall of communism. In February, after President Lech Walesa's defeat last year removed a counterweight to the ruling left, the right-leaning head of the television Wieslaw Walendziak quit, alleging pressure from the two parties rooted in the communist era. His successor, Peasant party member Ryszard Miazek, was then quoted as making remarks about the role of journalists which prompted anxious enquiries from senior U.S. officials concerned over democratic progress in a country seeking NATO membership. Foreign Minister Dariusz Rosati returned from talks in Washington saying: "I heard concerns that the new television leadership might conduct a purge of staff." Miazek said at the time that he had been misquoted. Since then, however, some hard-hitting current affairs programmes associated with the former management have been scrapped and, last month, the management aroused a storm by deciding not to take programmes made by outside companies. "I think that people who are not associated with the current coalition will now be systematically eliminated," Potocki said. "The implications of such a move would be the disappearance of objectivity and an independent television. His concerns were echoed by Marek Jurek -- a former right-wing politician who is now a member of the National Radio and Television Council (KRRiT), the broadcasting watchdog. Jurek called for the cancelled programmes to be restored. KRRiT was meeting on Tuesday to discuss the situation in the television. 7877 !C18 !C183 !CCAT !GCAT !GPOL Romania's Senate on Tuesday approved a long-awaited bill on bank privatisation, a key requirement under loan accords with international lenders. The bill must now be debated by the lower Chamber of Deputies, an official said. The draft law was approved by 81 senators, one voted against and six abstained. Earlier this year the bank selloff bill failed to pass the Senate, falling short of the 72 votes needed to pass in the 143-strong upper chamber. Under the bill, bank privatisation will have two stages: bank capital will be increased via share issues and then the majority stockholder, the State Ownership Fund (FPS), will sell its stakes. The five regional private ownership funds (FPPs), which hold 30 percent of the state-run banks due to go private, should transfer their shares to FPS. Banks' shares can only be sold for cash to individuals and private companies and to foreign investors. The government should identify strategic investors and decide the equity stake those investors can hold. Romania has 34 commercial banks of which six are state-run. Development bank Banca Romana pentru Dezvoltare SA (BRD) and farm lender Banca Agricola SA are seen as the most likely to turn private when parliament eventually passes legislation. The European Bank for Reconstruction and Development has in the past expressed an interest in BRD but it has been concerned at the slow progress of the legislation. Romania should have privatised two of the six state banks last year to meet demands under loan arrangements with the International Monetary Fund and World Bank. -- Bucharest Newsroom 40-1 3120264 7878 !GCAT !GWEA No closures of airports in the Commonwealth of Independent States are expected on September 4 and September 5, the Russian Weather Service said on Tuesday. --Moscow Newsroom +7095 941 8520 7879 !GCAT !GCRIM !GDIS An Albanian whose boat capsized in May drowning 13 schoolchildren passengers and their teacher was found guilty of manslaughter and jailed for more than three years, a newspaper said on Tuesday. A court in the southeastern city of Korce found Niko Damo, 22, guilty of reckless behaviour and sentenced him to three years and four months in prison, the daily Gazeta Shqiptare said. It gave no further details. Damo said he would not appeal. Twelve girls and one boy -- all about 18 years old -- and their 44-year-old teacher drowned during an outing on Prespa Lake in southeastern Albania on May 8 when the boat sank about 50 metres (yards) from shore. Three boys and two men survived by swimming to land. Frogmen and rescue workers recovered the victims' bodies. Local villagers who witnessed the accident said they saw the boat owner beating his head with a rock after he found out so many pupils had died. The students attended an agricultural high school in Starove, about 200 km (120 miles) from the capital Tirana. Albania shares Prespa Lake with Macedonia and Greece. 7880 !GCAT !GCRIM An Albanian court sentenced a man to 12 years in jail for the attempted rape of a seven-year-old girl, a local newspaper said on Tuesday. The court in the port town of Durres, 45 km (30 miles) west of Tirana, found the 19-year-old, identified only as D.H., guilty of trying to sexually abuse the child. The man, who confessed to the attempted rape, said he would not appeal, the daily Koha Jone said. D.H. was alleged to have lured the girl into his home and to have tried to take advantage of her, the paper said. "But she screamed so loudly that he was frightened and released her," the daily said. "He tried to hide but police managed to take him into custody after several days." Albanian authorities last week arrested and charged a British man for alleged sexual abuse of two young boys. If found guilty, he could face up to five years in jail. The British embassy in Tirana said the man was still in custody while investigations continued. Koha Jone said police had arrested another man several days ago on suspicion of raping a 14-year-old girl. The age of consent for heterosexual and homosexual sex in Albania is 14. 7881 !C21 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Bulgaria's association of air traffic controllers (Bulatka) said it plans to go on a one-hour warning strike on Tuesday afternoon after failing to reach agreement with their employer. "We are very likely to go on strike for one hour some time during the afternoon," Bulatka's chief Stefan Raichev told Reuters. He said on Monday one-hour-per-day warning strikes were planned. He declined to name the hour. No planes will be guided for landing or take off during this hour. Transit flights will be guided. The country's three international airports in Sofia, Varna and Bourgas are expected to strike at three different hours, so that planes could be diverted from the airport where the air traffic controllers are striking, said Raichev. The controllers are demanding the monthly wage be increased from some $230 to some $1,000 per month, as well as the resignation of the air traffic service's management. They also demand the financial separation of the 350 air controllers from the technical staff. The director general of the air traffic service Valentin Valkov said that he has filed a claim in court saying that a controllers' strike would be illegal and expected the court to rule on Tuesday. The court's decision has not been announced yet. Valkov said the controllers were blackmailing the airport authorities and called their demands immoral. More than 1,500 planes per 24 hours fly over Bulgaria. -- Elisaveta Konstantinova, Sofia Newsroom, 359-2-84561 7882 !E41 !E411 !ECAT !GCAT !GJOB The Central Bureau of Statistics and Ministry of Labour issued the following economic indicator details. Previous figures in brackets. CROATIA UNEMPLOYMENT JULY JUNE JULY '95 Total jobless 257,133 252,524 263,523 Unemployment rate (pct) 18.2 17.9 16.7(16.9) NOTES -- Total workforce figures are being constantly revised to include private sector, but they exclude army, police and farmers. Data exclude unemployed in Serb-held territory. -- Kolumbina Bencevic, Zagreb Newsroom, 385-1-4557075 7883 !GCAT !GVIO About 80,000 people have been killed in fighting in breakaway Chechnya, Russian security chief Alexander Lebed said on Tuesday. "One may say that about 80,000 people have died, plus or minus 10,000," Lebed told a news conference. "Accordingly there are three times as many injured." There have been few official casualty figures for the conflict in the Caucasus region, which started in December 1994, when Russia sent troops into the region to crush an independence bid and there was no way to confirm Lebed's figure. Fighting in Chechnya died down last month after Lebed signed a ceasefire deal with the separatists, followed by a political agreement signed last weekend. Russian Prime Minister Viktor Chernomyrdin backed Lebed's peace deal publicly on Tuesday, although he said there were still some grounds for concern. 7884 !GCAT These are the leading stories in the Skopje press on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy. NOVA MAKEDONIJA - Macedonia and Yugoslavia to sign five agreements on regulation of cooperation between the two countries during the first visit of Yugoslav Prime Minister Radoje Kontic to Skopje. DNEVNIK - Macedonia expects Russian support in the Security council in its demand for the extension of the UNPREDEP mandate, said Macedonian Foreign Minister Ljubomir Frckovski during his meeting with Russian diplomatic representative in Skopje Yuriy Trusin - The head of the Greek liason office in Skopje Alexander Mallas expressed the Greek desire for intensive cultural cooperation with Macedonia during talks with the Macedonian minister of culture Slobodan Unkovski. - New 10, 100, 500 and 5000 denar banknotes to be issued on September 5. Some analysts believe this is a sign of inflation in Macedonia while the central bank categorically says there is no inflation. -- Skopje newsroom +389 91 201196 7885 !GCAT !GPOL !GVIO Russian Prime Minister Viktor Chernomyrdin gave public backing on Tuesday for a peace deal signed by security chief Alexander Lebed with Chechen separatists. "The agreements signed by Lebed cause some concern but on the whole we consider them right," Chernomyrdin, who discussed the issue with President Boris Yeltsin on Monday, told a meeting of top North Caucasus officials. "We should act within the framework of these agreements and keep to their thrust." Chernomyrdin said the decision to defer by five years a final decision on Chechnya's status -- the most sensitive part in talks -- was right. "We should calm down and this issue should be resolved in five years, maybe with the help of a referendum." Chernomyrdin said that the Kremlin's decision to send troops into Chechnya in December 1994 to crush its independence bid "did not produce the required results, led to a dead end and to grave consequences". "We must sort out this disgrace and I would even say shame," he said. Yeltsin, on holiday outside Moscow, is expected to contact Lebed to consider his report and decide whether to back the agreement aimed at ending the 21-month-old conflict in which tens of thousands have been killed. 7886 !GCAT These are the leading stories in the Belgrade press on Tuesday. Reuters has not verified them and does not vouch for their accuracy. POLITIKA - Serbian President Slobodan Milosevic and ethnic Albanian leader Ibrahim Rugova sign agreement on normalisation of the education system in Kosovo. - Polish Foreign Minister Dariusz Rosati arrives in Belgrade. Talks will deal on the promotion of bilateral relations. - Talks on the succession of the former Yugoslavia continue in Brussels on September 5 and 6. Yugoslav delegation headed by academic Kosta Mihajlovic. - Yugoslav Prime Minister Radoje Kontic visiting Macedonia today. - Deputy U.N. administrator in eastern Slavonia Derek Boothby says it will be impossible to organise elections in the area in the first year of the UNTAES mandate. - Yugoslav-Macedonian border commission held its founding session in Belgrade on Monday. It is charged with drafting an internatinal treaty on the state borders between the two countries. - Yugoslav agriculture minister Tihomir Vrebalov opens wine and agriculture fair in Leskovac, southern Serbia. - New paper packaging plant, a Yugoslav-Polish joint venture, was opened Monday by Yugoslav Deputy Prime Minister Jovan Zebic. - Presidents of opposition Serbian Renewal Movement (SPO), Democratic Party (DS) and Civic Alliance of Serbia (GSS) form coalition Zajedno for the forthcoming elections. - Bosnian Refugees in Yugoslavia end their voting today. NASA BORBA - Motor and tractor industry IMT started a strike on Monday organised by the independent trade union Nezavisnost. - Possible changes at the head of the paper Politika, present acting editor in chief Hadzi Dragan Antic to leave his post but remain as director of the company and the paper. - Representatives of large foreign investment funds arriving in Belgrade this week attracted by the opening of the privatisation process in Yugoslavia, says Goran Lazovic of the Indo-Suez Bank. - U.S. still blocking four ships from Kotor-based Jugooceanija nine months after the suspension of Yugoslavia's sanctions. POLITIKA EKSPRES - French bankers have approved a credit of 32.5 million French francs for the shipper Jugooceanija, says director general Milivoje Jaukovic. BORBA - A border crossing opened on Monday between Bosnian Serb Republic and Croatia at Brcko over the Sava bridge. -- Belgrade newsroom +381 11 2224305 7887 !GCAT These are the leading stories in the Sarajevo press on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy. OSLOBODJENJE - Federation Vice-President Ejup Ganic in Albania for an official one-day visit. - Austria donated 45 million German marks for the economic reconstruction of Bosnia. - The head of opposition Bosnian Liberal Party says elections should be held as scheduled on September 14. DNEVNI AVAZ - Paper says it has learned High Representative in Bosnia, Carl Bildt, may be replaced because U.S. administration is not satisfied with his work. An American diplomat may be named to succeed Bildt. - Sarajevo's pre-war Orthodox Christian priest has returned to the city, replacing Avakum Rosic who spent four war years as the only Orthodox priest in besieged Sarajevo. - Reconstruction has begun on the main hydro-electric power plant that supplies southern Bosnia. --Sarajevo newsroom, +387-71-663-864. 7888 !GCAT The following are the main stories from Tuesday morning's Albanian newspapers. Reuters has not verified these stories and does not vouch for their accuracy. KOHA JONE - The Pristina-Belgrade agreement on education appears to be a very important accord in the light of recent bombs and the boycott of the elections by Kosovo's Albanians. - Italy creates commission to lead the government's fight against the Albanian mafia. - Opposition Socialist Party is as modern as the other Albanian parties, new secretary general Rexhep Mejdani says. - Social Democrat Party to strengthen the coalition with the Democratic Alliance Party for the local elections. - Bosnian Vice President Ejup Ganic, on a one-day visit to Albania, pledges to increase ties with the Albanian authorities and continue to work for peace and stability in the region. - After participating in the U.S. Democratic Convention Albanian Republican leader Sabri Godo says U.S.-Albania relations are tense and a high level dialogue should start between them. - Another pregnant woman dies from polio. Three foreign experts to visit Tirana to try to discover its origin. - Authorities begin rigid control of food products in four districts. - Albanian Confederation of Trade Unions asks the government to give full compensation after liberalisation of some articles. GAZETA SHQIPTARE - One Albanian died last Saturday and three others were sent to hospital after Italian authorities discovered a speed boat near the shore illegally carrying 22 people. - Bus tickets and post service prices hiked from September 1. - Following a Council of Europe recommendation President Sali Berisha invites 14 parties to a round-table talk but opposition parties say they have not received it. - A rain storm last Saturday in the eastern area of Prenjas causes more than $400,000 damage. 7889 !GCAT These are the main stories in Latvian newspapers on Tuesday. Prepared for Reuters by the Co-operation Fund. Reuters has not verified these reports and does not vouch for their accuracy: ALL NEWSPAPERS - President Guntis Ulmanis announced following his talks with Prime Minister Andris Skele that he would not ask parliament to dismiss Colonel Juris Dalbins, who was suspended as army commander following a series of murders and suicides in the Armed Forces. DIENA - Several members of the Democratic Party Saimnieks have demanded that Valdis Krisbergs, former president of the bankrupt company Auseklitis, be expelled from the party. - The mayor of the port city of Ventspils, Aivars Lembergs, has not yet given up his positions on the boards of several enterprises, as required by the Latvian Anti-corruption law. Last year the mayor's income was more than 34 thousand lats ($62,000). NEATKARIGA RITA AVIZE - Latvia and China signed a co-operation agreement in the fields of education and culture. BIZNES & BALTIYA - The Riga chinaware plant, Rigas Porcelans, has been delcared insolvent by the Riga district court. - Latvian Radio stopped retransmissions of Russian Radio programmes on September 1. Russian radio has not paid for retransmission of its programmes since April. -- Riga Newsroom +371 7226693 7890 !GCAT The following are the reports carried by Estonia's newspapers on Tuesday. Reuters has not verified these reports and does not vouch for their accuracy: SONUMILEHT - August's drought will reduce this year's potato and vegetable harvest, but the government is not prepared to pay compensation to farmers. - The Estonian subsidary of the Swedish dairy group Arla has terminated its court case against a journalist who revealed possible health risks connected with some of baby food products distributed by the firm. EESTI PAEVALEHT - Baltic Sea states' human rights commissioner Ole Espersen told Foreign Minister Siim Kallas yesterday that Estonia may be among the first Central and Eastern European countries to be admitted to the EU. - A fall in pork supplies will drive prices up in Estonia, meat packing firms warn. -- Riga Newsroom +371 7226693 7891 !GCAT Here are highlights of stories in Romania's press on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy: Business: ADEVARUL - New 50,000 lei banknote to be offically launched on November 20. - Frozen local forex market worries foreign investors. - Bell Helicopters Textron to buy 51 percent stake in Intreprinderea Aeronautica Romana (IAR) helicopter maker. AZI - Indian businessmen are interested in buying area in free trade zone of Constanta to build medicine storehouses. LIBERTATEA - CEC savings bank hopes it will be able to give credits at 15 percent interest for housing construction. - Distribution of shareholders' certificates under mass selloff proceeds at snail's pace. General: ROMANIA LIBERA - Decision to break the governing alliance can not be taken by a single party, said Ioan Gavra, National Unity Party (PUNR) vice-president about ruling Party of Social Democracy's (PDSR) decision to cancel a coalition protocol with PUNR. - Dissident Doina Cornea says she would contest the candidacy of President Ion Iliescu for a new presidential mandate at the Constitutional court. - Cancelling the PUNR-PDSR protocol is natural as long as the document was not respected, President Iliescu said. ADEVARUL - Newspaper publishes history of the PUNR-PDSR alliance. - Judges in Supreme Court to draw lots on September 4 to elect the seven members of the Central Electoral Bureau (BEC) for the November 3 polls. - Newspaper publishes text of Romanian-Hungarian treaty as agreed during last round of negotiations at end-August. EVENIMENTUL ZILEI - The viral meningitis epidemic which killed 14 people could alson affect children as school starts in two weeks, says the newspaper. - Newspaper alleges the deputy justice, agriculture and communications ministers are likely to replace the PUNR ministers sacked on Monday following the breaking of the PUNR-PDSR governing protocol. - President Iliescu will top the list of PDSR candidates for upper house of Senate in the northeastern county of Iasi. - Hungarian Democratic Union (UDMR) will make no alliance before the November 3 polls and has no agreements with opposition parties, said UDMR president Bella Marko. - Newspaper publishes a report on organised crime in Romania. - Ioan Pop De Popa, mastermind of Romanian cardiovascular surgery, running for presidency in the November 3 polls says he wants "social surgery to heal Romania's society". - Recently created National Aviation Security Committee includes representatives of all secret services. - Newspaper publishes national broadcasting body decision to grant air time on radio and television for the electoral campaign. CURIERUL NATIONAL - European Union salutes Hungarian-Romanian understanding over a long-delayed friendship treaty. - Interview with Nicoale Manolescu, presidential candidate of National Liberal Alliance (ANL). ($=3,163 lei) -- Bucharest Newsroom 40-1 3120264 7892 !GCAT Lithuanian newspapers carried the following reports in their Tuesday editions. Reuters has not verified these stories and does not vouch for their accuracy: LIETUVOS RYTAS - Parliamentary opposition leader Vytautas Landsbergis said on Monday Lithuania's political parties were united on the sea border issue which has soured relations with Baltic neighbour Latvia. Both countries have claimed an area containing off-shore oil reserves. - Lithuania's biggest chemical factory Achema, which had a turnover in 1995 of 521 million litas and posted earnings of 48.3 million litas, intends to open its third overseas representative office in the near future. RESPUBLIKA - The Chief Elections Committee has registered 28 independent candidates for the October 20 parliamentary elections. - Deputy Transport Minister Sakalys accused Scandinavian Airlines System SAS of aggresive competition and promised to do everything in his power to withstand SAS's attempts to 'swallow' Lithuanian Airlines. SAS representatives dismissed Sakalys's allegations as "absurd". LIETUVOS AIDAS - The Unit 1 reactor at the Ignalina nulcear power plant came back on line on Monday after a five-day shut-down caused by a leak in its cooling system . - The board of the Bank of Lithuania has decided to register the statutes of the new Industry bank in August, allowing the Achema company to acquire and manage the share portofolio of the Industry bank. VERSLO ZINIOS - The Lithuanian Government faces difficulties in signing contracts with the companies that won the tender to supply 350,000 tonnes of heating oil to Lietuvos Energija for the next heating season. - Russia's Gazprom has not increased the price of natural gas to Lithuania but has doubled the supply to nine million cubic meters per day. -- Riga Newsroom +371 7226693 7893 !GCAT !GDIP !GVIO Interfax news agency quoted a Russian foreign ministry source as saying on Tuesday that Moscow viewed the situation in the Gulf as "extremely dangerous" and warned it could move out of control after U.S. air strikes against Iraq. The source told Interfax that Moscow was watching the events in Iraq with growing concern. "The situation could get out of control," the source told the agency in a comment on the U.S. raid. "Developments in the Gulf region are taking an extremely dangerous turn. Now everything depends on further action by the Americans." Unidentified Russian foreign ministry officials often give an initial reaction to quickly developing events, followed by an official statement. The next foreign ministry briefing is due at two p.m. (1000 GMT) on Tuesday. Russia has generally taken a softer line on dealing with Baghdad than Western countries since the end of the 1991 Gulf War. On Monday it called for restraint in the conflict between Iraqi ruler Saddam Hussein and Kurdish rebels. 7894 !GCAT Following are the main stories in Croatian newspapers on Tuesday. VJESNIK - Slavonia experiences torrential rain and floods. - Croatia to start exporting industrial waste following an agreement with a Belgian firm. - Negotiations on the wages of state clerks to commence soon. - Salaries in Croatia on the rise: Year-on-year rise in August was 2.6 percent in real terms or 8.2 nominally. VECERNJI LIST - Privatisation and small stockholders: Shares will have to be paid in installments or contracts will be broken. - This year's tourist season results edging towards pre-war figures. - The Zagreb city council crisis: HDZ (Croatian Democratic Union) is preparing a new proposal. SLOBODNA DALMACIJA - Bosnia-Herzegovina elections in Croatia: Lowest turnout in Dubrovnik. - 5,500 kuna needed to satisfy the monthly needs of a Croatian family of four. -- Zagreb Newsroom, 385-1-4557075 7895 !GCAT !GDEF !GDIS A Czech MiG-21 jet fighter crashed in eastern Bohemia on Monday night with its pilot receiving severe injuries, the Czech news agency CTK reported. The Soviet-designed jet crashed into a field and the cause was being investigated, CTK quoted police as saying. The Czech Republic, which is a front runner for early membership of the NATO defence alliance, wants to modernise its air force, which is part of the army. It has considered upgrading its old Warsaw Pact-era MiG-21s or buying U.S.-made jets. 7896 !GCAT Here are highlights of stories reported by Hungary's press, based on information by Nepszabadsag's Hungary Around the Clock service. For further details on how to subscribe to Hungary Around the Clock, please contact Monica Kovacs at (361) 351 2440 or fax your request to (361) 351 7141. ALL PAPERS - In an address to Socialist Party MPs, Prime Minister Gyula Horn yesterday set out three priorities for government work: guaranteeing economic growth, curbing social tension and following through on European integration. @ - Socialist caucus leader Imre Szekeres said that it would not be appropriate if Bela Marko, president of the Democratic Federation of Hungarians in Romania, were to make a contribution at today's special session of Parliament. - The Hungarian Investment and Development Bank's management has asked deputy CEO Jozsef Keller to draw up a report on the irregularities revealed last week by the State Audit Office. @ - The Stock Exchange Council decided yesterday to withdraw the shares of Agrimpex and Global from the stock basket determining the BUX Index and add the shares of Borsodchem, Cofinec, Eravis and TVK as of October 1. - The Budapest Stock Exchange index rose more than 100 points to top 3500 yesterday, hitting a record high for the second straight day. - Europe's largest synagogue in Budapest Dohany utca partly restored will be ceremonially reopened on September 5. @ - Security forces held a dress rehearsal Monday for Pope John Paul II's visit to Pannonhalma and Gyor this upcoming weekend. MAGYAR HIRLAP - The European Union has welcomed the agreement reached on the text of the Hungarian-Romanian basic treaty. - July saw foreign currency worth HUF 75 billion exchanged to forints at the central bank. @ - Digital Equipment Magyarorszag Kft., a subsidiary of the U.S. technology company, took in revenue of HUF 5.5 billion in the fiscal year to June 30. The figure is 40 percent higher than in the previous 12-month period. NEPSZABADSAG - Defence Minister Gyorgy Keleti and Norwegian Defence Minister Jorgen Kosmo signed a bilateral military cooperation pact on Monday. - An international conference on the science of translation, particularly on new trends and results of translation and interpreting, opens in Budapest Thursday. @ VILAGGAZDASAG - Privatisation revenues totalled HUF 45.4 billion, HUF 38.9 billion of it in cash in the first six months of 1996, according to a Finance Ministry report. - Several insurance companies may follow the example of AB-Aegon and retire from the market of voluntary car insurance, at least in the capital, due to the ever-increasing number of car thefts. - The HungarHotels chain took in revenue of HUF 1.35 billion in the first seven months of 1996, some 20 per cent more than in January-July 1995. @ MAGYAR NEMZET - A group called the Bocskai Federation plans a mass rally outside Parliament on September 5 to protest the way the Hungarian-Romanian basic treaty is forced on the people. - Defence Minister Gyorgy Keleti said that a Hungarian-Romanian military confidence-building and security enhancing agreement is ready for signing. NAPI GAZDASAG - Voluntry insurance funds show signs of a boom, with aggregate assets of HUF 6 billionb late last year and an expected HUF 21.5 billion by December 1996. @ -- Budapest newsroom (36-1) 266 2410 7897 !GCAT !GPOL !GVOTE The Bosnian elections scheduled for September 14 cap years of turmoil in the former Yugoslavia. May 4, 1980 - Josip Broz Tito dies, signalling the beginning of the Yugoslav Communist Party's decline and opening the way for the rise of nationalism and the disintegration of Yugoslavia. June 28, 1989 - Serbian Communist Party leader Slobodan Milosevic addresses crowd of one million Serbs at Kosovo Polje on 600th anniversary of defeat of mediaeval Serb kingdom by Turks, making a frank appeal to militant Serbs and foreshadowing the violent disintegration of the country. June 25, 1991 - Slovenia and Croatia declare independence from Yugoslavia. June 27, 1991 - Yugoslav army tanks fail to crush Slovenian independence. War begins in Croatia when fighting breaks out between between Croats and local Serbs. January 15, 1992 - A truce goes into effect between rebel Croatian Serbs and Croats in Croatia. The truce lasts until May 1, 1995 when the Croatian army begins an operation which succeeds in recapturing nearly all Serb-held territory in Croatia. March 3, 1992 - Fearing Serb domination, Bosnian Moslems and Croats vote for independence from former Yugoslavia in referendum boycotted by the Serbs. April 6, 1992 - The European Union recognises Bosnia's independence and the Bosnian war begins. March 18, 1994 - A Moslem-Croat federation agreement signed in Washington, D.C., ends fighting between those two groups in central and western Bosnia. August 30, 1995 - NATO launches large-scale air raids to punish Bosnian Serbs for mortar attack on Sarajevo marketplace. Bosnian Moslems and Croats, backed by Croatian army regulars, launch a sweeping offensive which reduces Serb holdings in Bosnia from 70 percent of the country to 49 percent, paving the way for ceasefire and peace talks. November 21, 1995 - Bosnian peace agreement initialled in Dayton, Ohio. December 14, 1995 - Bosnian peace agreement signed in Paris. December 20, 1996 - NATO assumes authority in Bosnia, taking over from discredited U.N. peacekeeping operation. June 25, 1996 - The Organisation for Security and Cooperation in Europe (OSCE) announces Bosnian elections called for under Dayton will be held on September 14. August 27, 1996 - The OSCE announces that municipal level elections will be postponed because of voter registration irregularities and other problems. September 14, 1996 - Elections scheduled for cantonal assemblies, separate parliaments for Bosnia's Moslem-Croat federation and its Serb republic, a national House of representatives and a three-man national Presidency. Election officials say it could take 10 days to tabulate results. Dayton requires the new government to be seated within 30 days. 7898 !GCAT !GPOL !GVOTE As many as 2.9 million Bosnians are expected to vote on September 14 in the country's first national elections since a 43-month war ended here in December 1995. The voters will include at least 641,000 refugees living in 55 countries according to the Organisation for Security and Cooperation in Europe (OSCE), which is supervising the elections with a mandate from the Dayton peace agreement which ended the fighting. Eligible voters include those citizens of Bosnia aged 18 or over whose names appear on the country's 1991 census, subject to OSCE election rules. Each voter will cast four colour-coded ballots. Those voting from towns inside Bosnia's Serb republic, which administers 49 percent of the country, will cast ballots for a president and National Assembly. They will also vote for a House of Representatives for Bosnia and for one of three seats on the country's collective Presidency. Those voting from towns inside Bosnia's Moslem-Croat federation, which controls 51 percent of the country, will cast ballots for cantonal assemblies and for a federation House of Representatives. They will also vote for a House of Representatives for Bosnia and for two of the three seats on the country's collective Presidency. Refugee voting by absentee ballot began on August 28 and ends at midnight on September 3rd. Those absentee ballots will be brought to the Bosnian capital of Sarajevo by the OSCE for counting. Some 4,400 polling stations will be open from 7 a.m. to 7 p.m. (0500-1700 GMT) across Bosnia on election day. About 1,200 OSCE supervisors drawn from 33 countries will oversee the voting and counting process. Hundreds of foreign and domestic observers are expected to be accredited as well. Counting centres established by local election commissions are responsible for counting the ballots under OSCE supervision. Preliminary counts will be reported from the local election commissions to OSCE regional centres and from there to the Provisional Election Commission, the OSCE's supreme election body. The Provisional Election Commission, based in Sarajevo, will report all results, verify whether the elections were valid and certify the results. OSCE officials say that provisional results could be available by September 16 or 17. Final, certified results might not be available for another week after the provisional tally is completed, depending on the nature and extent of any problems discovered during the counting process. 7899 !GCAT !GPOL !GVOTE When Bosnians go to the polls on September 14 they will each be asked to cast four colour-coded ballots for offices in a highly de-centralised government. Bosnia consists of a Moslem-Croat federation, which controls 51 per cent of the country, and a Serb republic which administers the rest. The institutions of the national government will be relatively weak compared with those of the two Moslem-Croat and Serb entities. Residents in the two entities will have slightly different choices on election day. These are the offices they will be voting for. PRESIDENCY OF BOSNIA HERCEGOVINA The collective Presidency will consist of one Moslem, one Croat and one Serb. The Moslem and Croat will be elected by those casting votes in the federation. Residents of the Serb republic will elect the Serb member. The candidate receiving the highest number of votes in the presidential contest will serve as Chairman of the Presidency. Under the Bosnian constitution the collective Presidency has responsibility for foreign policy, proposing an annual budget and implementing decisions of the national parliament. It is supposed to try to govern by consensus. THE HOUSE OF REPRESENTATIVES OF BOSNIA HERCEGOVINA This legislative body will consist of 42 members, two-thirds of whom will be directly elected by voters in the federation and the remainder by residents of the Serb republic. The House is the lower chamber of the Bosnian national Parliamentary Assembly. The upper chamber or House of Peoples consists of 15 delegates -- 10 from the House of representatives of the federation and five from the National Assembly of the Serb republic. The duties of the Parliamentary Assembly are to enact legislation, decide on national revenues and expenditures and ratify treaties. THE HOUSE OF REPRESENTATIVES OF THE FEDERATION This 140-seat body will be directly elected by voters in the Moslem-Croat federation and will enact the basic laws governing life in 51 percent of Bosnia. THE NATIONAL ASSEMBLY OF THE SERB REPUBLIC This 140-seat body will be directly elected by voters in the Serb republic and will enact the basic laws governing life in 49 percent of Bosnia. THE PRESIDENCY OF THE SERB REPUBLIC The president will be elected by direct vote from the Serb republic and will serve as that entity's chief executive. There is no election for a federation President. CANTONAL ASSEMBLIES The federation is divided into 10 cantons, each of which will have its own assembly elected by voters from the municipalities within that canton. There is no election for cantonal assemblies in the Serb republic. 7900 !GCAT !GPOL !GVOTE Bosnia's three main nationalist parties, all formed in the run-up to 1990 elections, are expected to dominate the country's September balloting. The three parties made common cause against the Yugoslav communist party in 1990 elections, split in the run-up to Bosnian independence and became enemies during the Bosnian war. Analysts say there are two main opposition parties worth watching on September 14. PARTY OF DEMOCRATIC ACTION (SDA) - Moslem nationalist party, led by Alija Izetbegovic, which dominates most of the 51 percent of Bosnia held by Moslem-Croat federation. Izetbegovic formed the SDA in 1990 after being released from jail as a political prisoner. During the Bosnian war the SDA preached multi-ethnicity and the need to maintain the integrity of the country's borders as a single, sovereign state. In peace, the SDA has done little to promote the multi- ethnic ideal whose banner it once waved. Control over police and state media on much of Moslem-Croat federation territory gives the SDA a huge advantage among Moslem voters in the elections. Critics say the SDA is authoritarian at best and Moslem fundamentalist at worst. SERB DEMOCRATIC PARTY (SDS) - Serb nationalist party which dominates the 49 percent of Bosnia known as the Serb republic. The SDS was formed on July 12, 1990 and led by Radovan Karadzic for six years until he was forced from power by the international commnity on account of having been twice indicted for war crimes. Karadzic was replaced as chairman of the SDS by Aleksa Buha. The party maintains a mono-ethnic, anti-Dayton, separatist stance which it expects Serb voters to ratify. The SDS has used its tight hold on the police, media and economy to silence any political opposition. Analysts believe the SDS will win the vote in the Serb republic but possibly by a low margin. If true, that could loosen its grip on the Bosnian Serb Parliament and lead to a softening of its policies. CROAT DEMOCRATIC UNION (HDZ) - Croat nationalist party which dominates in the rocky western region of Bosnia known as Herceg Bosna. The HDZ is the Bosnian wing of the nationalist party which has ruled neighbouring Croatia since 1990. The Bosnian HDZ has its own party hierarchy but the real leaders are Croatian President Franjo Tudjman and Defence Minister Gojko Susak, a Bosnian Croat. A Bosnian Croat militia loyal to the HDZ and armed by Susak carved out the breakaway state of Herceg-Bosna during Bosnia's war and drove out non-Croat inhabitants, mainly Moslems. The HDZ rules Herceg Bosna like an extra-territorial province of Croatia although the fief is to be abolished shortly through a U.S.-brokered deal aimed at reintegrating Bosnia. Running on an anti-Moslem platform of Croat sovereignty, the HDZ seems poised to sweep the elections in Herceg Bosna. PARTY FOR BOSNIA HERCEGOVINA (SBIH) - Main opposition party on Moslem-Croat federation territory, led by former Bosnian prime minister Haris Silajdzic. The SBIH campaigns in favour of a unitary, multi-ethnic Bosnia but depends almost entirely on Silajdzic's personal popularity for its appeal. An Islamic scholar, Silajdzic is an articulate and convincing opponent of what some see as the SDA's drift towards Moslem fundamentalism. Silajdzic has little hope of capturing the Moslem seat on the new collective Presidency but could draw enough votes from Izetbegovic to leave a Serb the top vote-getter and thereby Chairman of the body. The former prime minister and his party are viewed as strong contenders for the 1998 elections. SOCIALIST PARTY OF THE SERB REPUBLIC (SPRS) - Main opposition party in the Serb Republic. Headed by Zivko Radisic, a career politician and former communist party member, the SPRS is the Bosnian Serb affiliate of Slobodan Milosevic's Socialist Party in neighbouring Serbia. Milosevic spilt with the SDS over the Dayton peace deal, which he supported, and is thought to want a more reliable political party to deal with in the Serb republic. Centred in Banja Luka and strongest to the west of Brcko, the party is counting on a strong vote from the several hundred thousand Bosnian Serb refugees living in Serbia who allegedly have been well-organized by Milosevic. SPRS candidates have been harassed, attacked and removed from their jobs by the long arm of the SDS during pre-election campaigning. 7901 !GCAT !GPOL !GVOTE Bosnian elections scheduled for September 14 will be dominated by a handful of Moslem, Croat and Serb personalities who came to prominence during the 43-month war which ended in December. A few international figures will also play important roles coordinating arrangements for the balloting. BOSNIAN MOSLEMS ALIJA IZETBEGOVIC - Candidate for the collective Presidency of Bosnia Hercegovina. As current President of Bosnia Hercegovina and of the Moslem nationalist Party of Democratic Action (SDA), Izetbegovic is the country's most prominent Moslem leader. Born in 1925 in Bosanski Samac, Izetbegovic spent virtually his entire life in Sarajevo except for two terms (totalling nine years) as a political prisoner under the former Yugoslavia. Elected to the Yugoslav republic of Bosnia's pre-war collective Presidency in 1990, Izetbegovic won independence for his country in April or 1992, precipitating a 43-month war with Serb and Croat separatists who feared Moslem dominance. Austere and reserved, Izetbegovic's critics say he has used the SDA party machine to harass and intimidate his opposition. Loyalists view him as the father of the country. Critics say he is a Moslem fundamentalist at heart or in the thrall of those who are. HARIS SILAJDZIC - Candidate for the collective Presidency of Bosnia Hercegovina. Silajdzic, 50, served as Bosnia's foreign minister before becoming Prime Minister in 1993. He resigned from his post and from the SDA in January of 1995 to form his own party and contest national elections. Handsome, mercurial, intellectual and combative, Silajdzic is a solo artist rather than a team player. The 50-year-old rebelled against SDA party discipline and what he saw as its flirtation with Moslem fundamentalism. Easily the second most popular Moslem in Bosnia after Izetbegovic, Silajdzic is campaigning for a united, multi-ethnic Bosnia. He appeals to those who want a change from the SDA, but change at the hands of someone tested and familiar. FIKRET ABDIC - Candidate for the collective Presidency of Bosnia Hercegovina. Fikret Abdic won the most votes in Bosnia's last election but traded the job of president of the Presidency to Izetbegovic in exchange for placing one of his men in charge at the Ministry of Interior. As the prosperous director of a large food processing business in the northeast of the country, Abdic had an independent financial and political base which he took with him when the Bosnian war started. Forming his own autonomous province, Abdic worked with separatist Serbs and Croats against the Bosnian government and its troops. The Abdic rebellion collapsed in 1995 and he and his people fled to Croatia where he still lives. Abdic, viewed as a traitor by most Bosnians, is not expected to be a strong candidate. But he and Silajdzic will siphon votes away from Izetbegovic, possibly handing a Serb the Chairmanship of the Presidency as the top vote-getter. BOSNIAN CROATS KRESIMIR ZUBAK - Candidate for the collective Presidency of Bosnia Hercegovina. Zubak, 49, is the current President of Bosnia's Moslem-Croat federation and virtually guaranteed to win the Croat seat on the new national collective Presidency. He was wounded in 1992 while serving as a soldier in the Croat militia in Doboj. Separatist Serb forces burned his family home in the town that same year. Formerly a judge, Zubak is regarded as a relative moderate within the Croat nationalist HDZ party but a man without much of a political base outside the party. RADOVAN KARADZIC - Former president of Bosnia's Serb republic and of its ruling Serb Democratic Party (SDS). Karadzic, a former Sarajevo psychiatrist, helped to found the SDS in 1990. He led separatist Bosnian Serbs through war and peace until being forced from public life in July of 1996 by international pressure on account of having been twice indicted by a U.N. tribunal for war crimes. Karadzic was supposed to have been handed over to the tribunal but remains in seclusion in the Serb republic. Although stripped of public and party office and denied the right to run in elections he almost certainly still wields influence on Bosnian Serb politics behind the scenes. GENERAL RATKO MLADIC - Commander of the Bosnian Serb Army. Mladic is also twice-indicted for war crimes but the international community has not been able to force him from power and NATO troops refuse to mount a manhunt for him. A colonel in the Yugoslav National Army when the Bosnian war broke out, Mladic soon found himself in command of Bosnian Serb forces. He is wildly popular in the Serb republic but most Bosnian Moslems and Croats revile him because of the siege tactics and brutal human rights abuses for which his troops became known. Mladic maintains a low profile and is not running for office, but he still controls the army, the strongest single institution in the Serb republic. BILJANA PLAVSIC - Acting President of the Serb Republic and candidate for the Presidency of the Serb republic. Plavsic, 66, was a charter member of the SDS and the hardliner chosen to replace Karadzic as acting president of the Serb republic when he was forced from office in July 1996. Known as the "Iron Lady" for snubbing Serbian President Slobodan Milosevic, Plavsic is an ultra-nationalist with a record of fierce opposition to the Dayton peace accord. She lacks practical authority within the government and support within the Army and some patriarchal Bosnian Serbs have a hard time accepting that a woman is running the country. MOMCILO KRAJISNIK - President of the Serb republic's Assembly and SDS candidate for the new collective Presidency of Bosnia Hercegovina. Krajisnik, 52, is the main powerbroker in the Serb republic, a man with more clout than even Karadzic as a result of his tight control over police and local authorities and alleged contacts with war profiteers. He served as speaker of the assembly in the pre-war (Yugoslav) republic of Bosnia Hercegovina but resigned that position when the Bosnian war began in April of 1992 to become speaker of the Bosnian Serb assembly. Krajisnik will almost certainly win the Serb seat on the new central government collective Presidency. If the Moslem vote is split among several candidates he could emerge as top vote-getter among all candidates and the body's new Chairman. ALEKSA BUHA - Chairman of the ruling nationalist Serb Democratic Party (SDS) and candidate for Speaker of the new National Assembly of the Serb republic. Buha, 56, was picked as SDS party chairman when Karadzic was forced from office in July. He is a loyal Karadzic supporter whose constant theme in speeches and writing has been the impossibility of co-existence among Bosnia's Orthodox Serbs, Catholic Croats and Moslems. INTERNATIONAL OFFICIALS ADMIRAL T. JOSPEH LOPEZ - Commander of NATO-led air, land and sea forces helping to implement the Dayton peace agreement in Bosnia. Admiral Lopez, an American, will have been in the job for just six weeks when elections are held on September 14. The international community will be looking to his 53,000 ground troops to help provide general security on election day. The possibility that substantial numbers of refugees and displaced persons might try to cross de facto ethnic boundary lines to cast ballots in home towns from which they were "cleansed" during the war has NATO worried. NATO will be aided in its security duties by as many as 1,600 unarmed U.N. police monitors. CARL BILDT - High Representative to Bosnia for the international community. Bildt, a fomer prime minister of Sweden, is the top international mediator in Bosnia and the man charged with overall responsibility for implementing the Dayton peace agreement. Lacking any executive authority over Bosnia's formerly warring factions he is forced to rely on negotiation to move the process forward. Bildt's deputy, Michael Steiner, a German, has spent much of his time trying to strengthen Bosnia's shaky Moslem-Croat federation which is generally viewed as the cornerstone of the Dayton agreement. ROBERT FROWICK - Chief of Mission for Bosnia for the Organisation for Security and Cooperation in Europe (OSCE) Frowick has needed all his experience as a seasoned U.S. diplomat to organise and supervise Bosnian elections, which is OSCE's primary role under the Dayton peace agreement. Ambassador Frowick and OSCE Chairman Flavio Cotti decided in June to proceed with elections on September 14 despite the factions' failure then to create conditions which would permit a fair and free vote. Frowick decided to postpone Bosnian municipal elections because of voter registration irregularities, among other problems. The OSCE is gambling that the Bosnian people will seize the opportunity to cast a secret ballot to break the lock on power currently held by Bosnia's Moslem, Croat and Serb nationalist parties. 7902 !GCAT !GDIP !GPOL !GVOTE Against all odds, and just nine months after signing the Dayton peace agreement which ended Europe's worst war in half a century, Bosnia's Moslems, Croats and Serbs go to the polls on September 14. Representatives of the international community insist the vote will be roughly democratic. Critics scoff, saying the tragedy of the Bosnian war is being followed by the farce of Bosnian elections. Even those who support the vote agree that conditions laid out in the Dayton accord as threshold requirements for elections have not been met. Robert Frowick, who as head of the Organisation for Security and Cooperation in Europe (OSCE) mission in Bosnia is running the elections, admits they will be neither free nor fair by western standards. So why go forward? "Because without elections Bosnia has no hope of creating the joint institutions outlined under Dayton to unify the country," Frowick argues. Dayton did envisage a decentralised, multi-ethnic Bosnian state comprised of a Moslem-Croat federation and Serb republic. But the country has devolved into three ethnically homogenous regions, each controlled by a nationalist party. Bosnian Serbs run 49 percent of the country and do their best to treat the administrative boundary line between the Serb republic and the Moslem-Croat federation as a border. Having killed or expelled virtually all non-Serbs from their territory in the 43-month Bosnian war, the ruling Bosnian Serb SDS party now looks to elections to gain international recognition for itself and for what it hopes will ultimately become a separate state. Hardline Bosnian Croats of the HDZ party identify more with neighbouring Croatia than they do with Bosnia and make no secret of their separatist ambitions for Herceg Bosna, the rocky western section of the country they control. Bosnian Moslems have their own nationalist party as well, the SDA, whose lip service to multi-ethnicity seems to spring more from territorial ambition than tolerance. Moslems want the single, sovereign state that Dayton promised because, as the largest single ethnic group in a reconstituted Bosnia, they would expect to dominate. These three nationalist parties, led by many of the same individuals whose names will appear on the September 14 ballot, led Bosnia to war in 1992. Not surprisingly, given the agendas of the nationalist parties, Bosnia lacks a politically neutral climate in which informed voters could cast ballots free from coercion. Refugees and displaced persons, of whom there are more than 1.5 million, have yet to return home in significant numbers. For fear of violence, virtually none have returned to areas where a rival ethnic group is in the majority. Freedom of movement and association are restricted by local police controlled by one or other nationalist party. Independent observers report little freedom of the press in Serb and Croat-dominated areas of Bosnia. Opposition parties and candidates are being harassed, intimidated and on occasion physically attacked by thugs. "NATO intervened in Bosnia last year and stopped the shooting," said an aid worker with long experience here. "But the war is being fought now by other means and the elections will be just another part of the same battle." The OSCE election monitoring unit reported serious flaws in the voter registration process. Serbs, especially, were criticised for having forced their refugees and displaced persons to register to vote, not in their former homes inside the federation, but in communities in the Serb republic, thus cementing the results of ethnic cleansing. OSCE decided on August 27 to postpone municipal elections, deferring, if not entirely resolving, the problem of attempted electoral engineering by the Serbs. If the election finally falls short of Dayton's soaring multi-ethnic aspirations it won't be for want of OSCE effort. In what Frowick bills as "the most complicated election of the century" each of the 2.9 million Bosnian voters is now expected to cast four colour-coded ballots. Candidates will be elected to cantonal offices on the federation side and to the office of the Presidency of the Serb republic on the republic side; to republic and federation parliaments; to a national parliament and to a three-member national Presidency. This being Bosnia, Moslems, Croats and Serbs are each assured a place on the collective national Presidency. The candidate with the most votes will be Chairman of the Presidency, in effect first among equals for two years. Unopposed, Alija Izetbegovic, Bosnia's current President and the head of the SDA, would likely win. But with former prime minister Haris Silajdzic running against him and splitting the Moslem vote a Serb could take the top job in what will be Bosnia's most closely-watched race. The election's arithmetic is stunning. Nearly 28,000 candidates and 50 political parties are vying for votes. There will be 4,400 polling stations manned by 35,000 election workers, 1,200 foreign supervisors. Hundreds of independent monitors will scrutinise the process. More than 640,000 Bosnian refugees living in 55 countries have registered to vote. About 53,000 NATO-led troops in Bosnia will work with 1,600 U.N. police monitors and tens of thousands of local police to provide election-day security. OSCE officials say it could take 10 days just to count and reconcile the 20 million ballots being distributed. By October 14 the joint institutions of Bosnia's new government must be formed. Only then will the world know whether elections have been a sham or a success, an inspired gamble which helped unite Bosnia or a fraud which reinforced its ethnic division. 7903 !GCAT !GVIO Mexico's newest rebel group that killed at least 15 people in a wave of attacks last week is a collection of 1970s-style "urban terrorists" who will be hard to defeat because of their high mobility, a senior government source said on Tuesday. The Popular Revolutionary Army (EPR), as the Marxist group calls itself, first surfaced at the end of June but did not attack in earnest until its strikes in several southern and central states last week, taking the authorities by surprise. The EPR "is an urban terrorist organisation," the source told a group of foreign correspondents. "It has great mobility ... this is what makes tracking it down difficult." President Ernesto Zedillo's government at first dismissed the group as a collection of bandits and cattle rustlers with no serious political aims, but have now changed their tune. The government source, speaking on condition of anonymity, said the EPR appeared to be more similar to hard-core European "terror" groups such as Germany's Baader-Meinhof gang than to the traditional peasant-based guerrilla armies found in nations such as El Salvador or Nicaragua. His comments, in line with those of other government officials in recent days, contrasted sharply with initial comments dismissing the group as a "pantomime" staged by peasants hired specially for the occasion. Intelligence reports suggested that several foreigners were helping the EPR but no link had yet been uncovered to any established terror group in either Europe or South America, the source said. Its funds "come with a high degree of probability from kidnappings carried out a few years ago" such as the 1994 abduction of Alfredo Harp Helu, chairman of Banamex, the country's biggest bank, as well as from other bank robberies, he added. No evidence has come to light to indicate that the EPR was linked to, or funded by, Mexico's powerful drug traffickers, he said. Its leadership appeared to be largely made up of members of the 1970s radical leftist group PROCUP. The EPR has said in a clandestine news conference that PROCUP is one of 14 leftist political groups that support it. Zedillo has drawn a clear distinction between the EPR and the Zapatista National Liberation Army (EZLN), which launched a January 1994 Indian uprising with the support of local peasants in the southern state of Chiapas. While the government was keen to continue ongoing peace talks with the Zapatistas, Zedillo said it would pursue the EPR with the full force of the law. Thousands of troops and federal police have already been drafted into the mainly poor and rural states such as Guerrero and Oaxaca where the EPR struck but government sources concede that the group's high degree of mobility makes it extremely difficult to predict where it might strike next. The government has not yet made public a list of who it believes the EPR leaders are but the source said most of them were already identified and some had arrest warrants outstanding against them. 7904 !GCAT !GVIO Masked rebels who stormed a string of towns in southern Mexico last week tortured and hanged a sailor, authorities said. The government of the southern state of Oaxaca said the corpse of sailor Juan Borja Santos was dug up in an abandoned rebel camp on Sunday after he had been captured on Aug. 28 when rebels attacked a naval base in the Pacific resort of Huatulco. "His body showed clear signs of having been tortured and hanged," a Oaxaca government statement said. Authorities had previously referred to the sailor as a hostage. The assault on Huatulco was the bloodiest in a series of attacks on police and military posts in several states in which 16 people were killed and 28 wounded, according to government figures released on Monday. The attacks were carried out by up to 200 guerrillas of the Popular Revolutionary Army (EPR), a leftist rebel force that had emerged publicly only two months before. Meanwhile, the Mexican government, top defence officials and state governors met on Monday to forge a strategy to confront the rebel threat, the most serious since a separate uprising of Zapatista rebels in January 1994. The participants looked at how security could be improved. In a statement released late Monday, the Interior Ministry said that since June 28, officials have detained 19 people with ties to the EPR. Unoficials reports have placed the death total from the EPR's coordinated actions since last week at 18. Soldiers and police swept through the rugged Sierra Madre mountains in the states of Oaxaca and neighbouring Guerrero in a bid to find the rebels. In Oaxaca the government said it unearthed a cache of 11 AK-47 assault rifles as well as several other weapons. Radio reports said troops were on alert in other areas, such as Jalisco in central Mexico. The EPR gained a reputation for carrying out actions in places where it is least expected, to give a sense that its reach is wide. 7905 !GCAT !GVIO Mexico's Zapatista rebels said on Monday they had suspended peace talks in the southern state of Chiapas and demanded several conditions be met before they returned to the negotiating table. In a statement, the Zapatista National Liberation Army (EZLN) said it will not take part in the next round of talks scheduled for September 4. The move by the Zaptista rebels, who stunned Mexico on January 1, 1994, by marching into several towns in southern Mexico and declaring war on the Mexican government, is the latest setback in the long-running peace talks in Chiapas. "The EZLN will not take part in the talks until there are conditions that guarantee the promises of the government that there can be a serious political ... conclusion," the EZLN said. The Zapatistas demanded all prisoners that belong to or support the Zapatista movement be set free, and that members of the government team participating in the peace talks be replaced. Among other demands, they asked for an "end to the climate of persecution." The breakdown in talks deepens the troubles facing the Mexican government, which is dealing with a fresh outbreak of violence from the Popular Revolutionary Army (EPR). In a statement released late on Monday, the Interior Ministry said President Ernesto Zedillo had said as recently as Sunday in his annual State of the Union address that the government was taking the talks seriously. "Nobody gains from an interruption of talks and from hardened positions," the Interior Ministry said. The EPR is a new leftist rebel force that recently carried out a series of coordinated attacks that have left 18 dead and The Zapatistas said they did not want the support of the EPR. "We only want to say that we do not want your support. We don't need it, we are not looking for it, and we don't want it," Zapatista leader Subcommander Marcos said in a statement. He said the Zapatistas are looking for peaceful solutions. "It is not armed combatants or military actions that we need," he said. The Zapatistas said the government has taken advantage of the unrest caused by the EPR to crack down on Zapatista supporters. In April 1995 the Zaptista rebels and government envoys agreed to relaunch peace talks in Chiapas village of San Andres Larrainzar. In February this year they signed their first accord on indigenous rights. 7906 !GCAT !GVIO Armed forces chief Adm. Holdan Deldago said 65 soldiers were still unaccounted for on Monday after a leftist guerrilla attack on a military base in Colombia's southwestern jungle. "There are 65," Delgado told reporters when asked about the total number of soldiers missing and presumably held captive by rebels since Friday's attack, in which at least 27 soldiers were killed. Defence Minister Juan Carlos Esguerra said earlier that the whereabouts of 41 soldiers was unknown after the attack on the Las Delicias military base in Putumayo province. Delgado's estimate was apparently based on more recent information. The armed forces commander gave no reason for the discrepancy, but the "News at 7" television news programme said late on Monday that a rebel spokesman in Putumayo claimed a total of 67 soldiers were in the hands of guerrillas. The spokesman said all would be released unharmed once arrangements were made for their peaceful handover to a government representative, the news programme said. Authorities said 60 security force members were killed in two days of fighting after guerrillas launched a nationwide offensive on Friday evening that included attacks in the capital, Bogota, and 12 of the country's 32 provinces. The worst attack by far was on the Las Delicias base camp, which was overrun by hundreds of Revolutionary Armed Forces of Colombia (FARC) rebels. Survivors said about 100 soliders at the base were caught totally off guard by the attack and had no time, under a hail of automatic gunfire and explosions from mortars, grenades and dynamite, to take cover in a protective trench dug around the base camp's perimeter. The attack was the single bloodiest guerrilla assault since last March, when FARC rebels killed 30 soldiers in an ambush in Narino Province, near its border with Putumayo. That attack was described at the time as the worst in more than three decades of armed insurgency in Colombia. 7907 !GCAT !GCRIM !GPRO Mexican boxing legend Julio Cesar Chavez, struggling to save a flagging career inside the ring, on Monday faced what could be his toughest opponent to date outside the ring: the law. Mexican officials said a judge issued an arrest warrant for the three-time world champion on tax fraud charges -- the latest in a series of personal and professional setbacks for Chavez. Chavez, who lost his WBC super-lightweight title to Oscar de la Hoya on July 6, is wanted along with two former business partners for failing to pay taxes worth $1.3 million in 1993. "The first district judge in Sinaloa ... decided to order the arrest of Mr. Julio Cesar Chavez" and two others "on tax fraud charges," Mexico's Finance Ministry said in a statement. Chavez, 33, has reportedly been training in San Diego for an upcoming bout with little-known Joey Gamache, a win that could earn him a rematch with de la Hoya in January. Attempts to reach Chavez, who has amassed a 97-2-1 record over a three-decade period, were unsuccessful on Monday, although in the past he denied all charges of tax evasion. Auditors discovered that Chavez and his partners used fake documents to try to obtain illegal tax rebates during the 1993 fiscal year, the statement said. Considered the world's greatest fighter pound-for-pound only a few years ago, Chavez's many Mexican fans watched in dismay as his hand speed declined and his legal and personal troubles mounted. "It's sad. He was such a great champion. But I guess you can't break the law and get away with it," said Raul Ramirez, a 34-year-old shoe shiner in Mexico City. Tax officials began to audit Chavez's records several years ago after a former attorney general accused him publicly of tax fraud. Earlier this year Chavez's estranged wife charged him with assault and a Mexican newspaper alleged that Chavez's businesses were linked with drug lords in his home state of Sinaloa. Chavez recently took out full-page ads in Mexican newspapers to deny those claims, blasting his former friends and family for betraying him in order to get at his money. WBC head Jose Sulaiman, in a statement released through his office in Mexico City, said he was sorry Chavez had run into trouble with the law. "I am very sorry about Julio Cesar Chavez's situation, but all Mexicans have an obligation to comply with the law, which I am sure he will do," Sulaiman said. The WBC did not comment on how Chavez's legal woes might affect his upcoming fight with Gamache or his efforts to recapture his WBC crown from de la Hoya. Mexican tax officials stepped up tax collection efforts following a severe economic crisis as a result of the 1994 peso devaluation. Some critics of the government measures said they believed tax officials wanted to make an example of Chavez, hounded by accusations of close ties to drug lords despite his equally close ties to the long-ruling Institutional Revolutionary Party (PRI). "The rich in Mexico never pay taxes. The government must be mad at him for some other reason," a Mexico City policeman named Juan told Reuters, refusing to give his last name. 7908 !GCAT !GVIO Colombian rebels killed four soldiers on Tuesday in what military officials have described as a non-stop wave of hit-and-run attacks since a nationwide leftist guerrilla offensive began last week. The latest attack occurred near Cucuta, capital of Norte de Santander province on Colombia's northern border with Venezuela. A report from the 2nd Army Division said National Liberation Army (ELN) rebels ambushed a military patrol on the outskirts of the city, killing four soldiers instantly and wounding 10 others. Military officials say 89 soldiers, police and guerrillas have been killed in fighting across the country since Friday, when rebels launched their most violent offensive in recent history. The bloodiest attack occurred in southwest Putumayo province, where hundreds of Revolutionary Armed Forces of Colombia (FARC) rebels overran the remote Las Delicias army base on Friday, killing 27 soldiers and taking 60 prisoners. In a FARC statement obtained by Reuters on Tuesday, the rebels boasted of making off with 99 army-issued automatic assault rifles from Las Delicias, two M-60 machineguns and five M-79 multiple grenade launchers. The FARC and ELN, Colombia's two largest and oldest guerrilla groups, have been fighting to topple the government since the mid-1960s. 7909 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Labour leaders in Guatemala, unhappy with conditions in the country's Korean-owned textile assembly plants, said they will make their concerns known during South Korean President Kim Young-sam's visit that started on Tuesday. "In many Korean-owned (factories) exist attitudes that violate human and labour rights. There have been innumerable complaints," said Luis Merida, coordinator of the Workers Union of Guatemala. Kim will travel in Central and South America to seek cheap production bases for exports. South Korean investors first looked to Guatemala in the mid-1980s when textile workers went on strike in South Korea and the United States imposed quotas on clothes from South Korea. Under investment incentives, "maquiladoras" (textile-assembly factories) in Guatemala enjoy 10 years of tax-free investment. About 180 Korean-owned factories assemble clothes under contract to U.S. companies and generate $120 million a year in exports, totalling five percent of Guatemala's total exports. "We don't see it as a form of cheap labour, but as job opportunities," Labour Minister Arnoldo Ortiz told Reuters. The Labour Ministry estimates more than 100,000 Guatemalans work in some 225 textile factories owned by foreigners and Guatemalans. Most are women who earn less than $4 a day. Frequent efforts to form unions in domestic and foreign-owned textile factories have all failed. Merida said supervisors in the factories harass workers who try to organise, punish organisers with harder work and, in the most extreme cases, close and move factories to avoid unions. He said other labour violations include unpaid overtime, impossible production demands, physical abuse of workers, and violations of child labour laws. Because of labour violations in the textile factories, Guatemala has been under review since 1992 by the United States, which has threatened to eliminate Guatemala's trade benefits under the General System of Preferences, which include a yearly quota of duty-free exports to the United States. 7910 !C12 !CCAT !GCAT !GCRIM Venezuela said on Tuesday that 40 illegal gold miners, many of them Colombian and Brazilian, had been arrested while working in the Amazon jungle. Defence Minister Nicolas Valencia said the latest captures on Monday brought the total number of miners arrested in the last week in the remote southern Amazonas state to 80. The government decided last week to send a task force of 300 soldiers, eight riverboat launches, two helicopters and six planes to evict an estimated 400 "garimperos," or illegal miners, from the Amazon jungle near the Brazilian border. Environmentalists and local politicians have blamed the illegal miners for causing massive ecological damage in Venezuela's southern region. Valencia said those who were captured would be processed by local courts before being deported to their country of origin. Amazonas state Governor Bernabe Gutierrez said last week that small miners operating without permits produce about 35 tonnes of gold per year, well above official gold production figures of about 10 tonnes per year. 7911 !GCAT !GDIP !GVIO Chile said on Tuesday it understood the United States' reasons for its cruise missile attacks on Iraq but withheld outright support, the country's U.N. ambassador said. "We understand the reasons the United States has for taking this action ... which are that Iraq has not delivered systematically on its obligations and that history shows us not to be soft," said U.N. ambassador Juan Somavia. "With (Iraqi President) Saddam Hussein, you've got to be tough," he told a news conference in Santiago. Chile is one of two Latin American non-permanent members of the U.N. Security Council. 7912 !GCAT !GPOL !GPRO Nicaraguan President Violeta Chamorro's memoirs sparked controversy on Tuesday as a former official denied he considered cancelling the 1990 election that toppled the Sandinista government. In the book "Dreams of the Heart," Chamorro said that as the votes were being counted, former U.S. President Jimmy Carter and the head of the Supreme Election Council, Mariano Fiallos, offered to cancel the elections because of suspected fraud. "(They) decided that if either of us (Chamorro's National Opposition Union or the Sandinistas) wanted to nullify the elections and call a new vote, it would be so," Chamorro said in the book. They offered to cancel the elections after they found the ink used in some voting precincts was so thin it could be washed off voters' fingers, she said. The parties turned down the offer, she said. Fiallos, now the Sandinista's candidate for foreign minister, called a news conference to deny the statements after the newspaper La Tribuna published excerpts from the book. Chamorro's memoirs describe the difficulties of Nicaragua's recent transition to democracy and peace after 11 years of leftist Sandinista government and civil war. They also reveal the human side of Chamorro, 66, whose nearly seven-year term as head of the transition government will end on January 10, 1997. 7913 !GCAT !GDIP !GVIO Cuba on Tuesday condemned the U.S. cruise missile attacks on Iraq as an act of "criminal aggression" that violated Iraqi sovereign territory. "This fresh attack violates the sovereignty and territorial integrity of Iraq," Foreign Ministry spokeswoman Marianela Ferriol told the Cuban news agency Prensa Latina. The agency quoted her as saying the U.S. action was a "criminal aggression" involving an "excessive, unjustified and arbitrary use of force". At the time of the 1991 Gulf War, communist-ruled Cuba, currently the target of U.S. economic sanctions, criticized the Iraqi invasion of Kuwait but then strongly condemned the subsequent U.S.-led military campaign against Iraq. 7914 !GCAT Brazilian summertime will begin on October 6 when most of the country will put its clocks forward one hour, the Mines and Energy Ministry said. Twelve states in the south, south-east and center-west regions, including Sao Paulo and Rio de Janeiro, plus the Federal District, which houses capital Brasilia, will adopt summertime, a ministry spokeswoman said. Energy consumption is expected to fall one percent as a result of the change, she said. Brazilian summertime ends on February 16. -- William Schomberg, Brasilia newsroom 5561 2230358 7915 !GCAT !GENT It looks as if the Starship Enterprise had landed on the coast near Rio de Janeiro, bringing with it a collection of contemporary Brazilian art. The celebrated architect Oscar Niemeyer created the bizarre structure for the city of Niteroi's Contemporary Art Museum, which opened to the public on Tuesday. Known for his controversial role as a principal designer of Brazil's new capital of Brasilia in the 1950s, the 88-year-old architect fell in love with the dramatic promontory site. Looking out over Rio's Guanabara Bay in the direction of Sugar Loaf Mountain and the Christ statue on the Corcovado, the museum boasts a 180-degree view of Rio's landmarks. "I felt that here was an opportunity for a wonderful work of architecture. A central support and the museum rising freely in space like a flower," Niemeyer recalls on a plaque in the forecourt. The idea for the museum came from Jorge Roberto Silveira, former mayor of Niteroi. Silveira initiated the project in 1991, when art collector Joao Sattamini offered his collection of 1,000 paintings and sculptures to the city. The museum, which has 120 of Sattamini's pieces on permanent display, is set in a 27,000-square-foot (2,500- square-metre) courtyard. A spiral ramp leads to the round exhibition centre, which rises from a shallow pool of water. "At night, the building is beautiful. When it's illuminated, it looks like a flying saucer," taxi driver Eduardo Mendes said. "But only a few will really enjoy the museum. It's elitist. Only a minority of people are interested in art and will know how to appreciate it," he added. The museum is conscious to such criticism. Administrators hope to make art more accessible to the average person by organising workshops and outreach programmes. "Our main concern is to integrate the museum so it will benefit society. The museum can transcend its walls," head of education Luiz Guilherme Vergara said. He said now that the project had been completed with public funds, it was necessary to raise private donations for educational work. The building took six years to complete and cost 5.3 million reais ($5.3 million). 7916 !GCAT !GDIP !GPRO Louis Farrakhan, leader of the militant Nation of Islam group, arrived in Cuba on Tuesday saying he wanted to learn about the effects of a longstanding U.S. economic embargo on the island, Cuban news agencies said. Prensa Latina news agency said Farrakhan, accompanied by members of his family and other leading Nation of Islam militants, would be in Cuba on a brief 48-hour visit. Farrakhan, a controversial figure in the African-American community in the United States, told Cuban reporters he was interested in a close view of the impact of recently tightened U.S. economic sanctions against the communist-ruled nation. "We've also come to learn about and learn from Cuba's education and health systems," he said. The Cuban domestic news agency AIN said Farrakhan was met at Havana airport by Jose Arbezu, deputy head of the International Relations department of the Central Committee of the ruling Cuban Communist party, and Caridad Diego, head of the party's religious affairs office. The agencies gave no other details of Farrakhan's agenda, but he was expected to visit social centres in Havana and hold talks with government leaders. 7917 !C21 !C24 !CCAT !GCAT !GWEA !M14 !M141 !MCAT Rains this week in northern parts of Argentina's grain belt did not boost soil moisture to levels sufficient for 1996/97 maize sowing to get into swing but the outlook for the grain is still bright, traders said Tuesday. "Firstly, the rains were localized and pretty thin," a trader said. He said that between five and 14 millimeters fell across Santa Fe, Entre Rios and Cordoba crop areas. "It wasn't enough for the maize," he said, adding that sowing had already begun in part of Entre Rios but had ground to a halt due to dryness. However, he stressed "No one is desperate to sow quickly, because those who sowed eary last year were caught out and got bad yields. So I think the tendency this year is to sow later." He said that he thought the Agriculture Secretariat's forecast of a possible expansion of up to 13 percent in planted maize area was still possible and might even be beaten. He was working with an estimate of potential output of around 14.5 million tonnes. But good rains are needed to kick off the sowing. The Agricultural Secretariat's latest forecast for 1996/97 maize output was 12.9 million tonnes. It predicted 15 million tonnes of wheat, 12.45 million tonnes of soybeans and 5.6 million tonnes of sunflower seed. Another trader said he would not begin to worry about the lack of rain affecting maize sowing until at least the end of September. While stressing it was too early to make a sensible output prediction, he said he thought 13 million tonnes or more was possible given normal weather. The first trader said that the wheat crop is in good condition in the key areas of Buenos Aires and southern Santa Fe, and in excellent shape in southern Buenos Aires. He said wheat output could reach 15 million to 16 million tonnes. "We're on the optimistic side of the market." The second trader, gloomier about the dry northern weather, said the wheat crop may struggle to reach 14 million tonnes. Argentina produced about 9.2 million tonnes of 1995/96 wheat, and 10.5 million tonnes of maize. Some 3.4 million hectares were sown with maize. -- Jason Webb, Buenos Aires Newsroom +541 318-0655 7918 !GCAT !GPOL !GVIO Mexico's Zapatista rebels, rejecting recent government attempts to paint them as "good guerrillas," have broken off peace talks with President Ernesto Zedillo's envoys while clearly marking their distance from a new rebel group that carried out attacks last week. The Zapatistas, in statements released on Monday by leader Subcommander Marcos from the Lacandon jungle in the southern state of Chiapas, said their supporters had ordered them to suspend the talks until the government was prepared to negotiate seriously. The government said it was "surprised" and reiterated guarantees to the Zapatistas. Marcos also bluntly told the Popular Revolutionary Army (EPR), whose attacks killed at least 15 people in several states last week, to stay out of Chiapas and seemed almost as wary of the new guerrilla force as of the government. "The government expects that the Zapatistas will now accept anything offered to them and join the government in its campaign of attacks against the EPR," he said. Accusing the government of "laying the trap of an option between 'good guerrillas' and 'bad guerrillas,'" Marcos added: "The government is wrong ... we are different from the EPR but we are not its enemies." In an open letter to the EPR, which made its debut as a guerrilla group two months ago, Marcos took a different tone. "You fight to take power. We fight for democracy, freedom and justice. It is not the same," he wrote. "Even if you succeed and take power, we will still be fighting for democracy, freedom and justice, regardless of who is in power." He described an EPR action last week, in which the group blocked a Chiapas highway and distributed propaganda, as "in the best case useless and stupid, in the worst case a provocation. The cost of the action will not be paid by you but by the Zapatista indigenous communities who, I remind you, have been in resistance for almost 1,000 days with their armed rebellion ... and their poetry." Marcos is as well known nowadays for his literary musings on the Internet as for the violence with which the Zapatistas launched their rebellion on New Year's Day 1994. His last remark was an apparent reply to an EPR leader's dismissive statement this month that "poetry is not the continuation of politics by other means." Before the Zapatistas will return to peace talks, Marcos demanded all prisoners that belong to or support the Zapatista movement be set free and that members of the government team participating in the peace talks be replaced. He also demanded an "end to the climate of persecution" in Chiapas, which he blamed on the Mexican army. The Interior Ministry, seeking to reassure the Zapatistas, said Zedillo had declared as recently as Sunday in his annual State of the Union address that the government was taking the talks seriously. "Nobody gains from an interruption of talks and from hardened positions," the ministry said. "There is not, nor will there be, any action from the federal government which will lead to the interruption of the talks." 7919 !E12 !E21 !E211 !ECAT !GCAT !GPOL Economy Minister Roque Fernandez and legislators from Argentina's ruling Peronist Party Tuesday tried to iron out differences over Fernandez's fiscal austerity package, submitted to Congress a week ago. "Nothing has been resolved," said Oscar Lamberto, head of the lower house of Congress' budget committee. But lawmakers would try "to find a text on which the blocs in both houses agree" by Thursday's meeting of Peronist chiefs, he said. Fernandez was accompanied by his Treasury Secretary Pablo Guidotti to the talks with President Carlos Menem's political operator Sen. Eduardo Bauza, the head of the Peronist bloc in Senate, Augusto Alasino, the Peronist chief whip in the Chamber of Deputies, Jorge Matzkin, and Lamberto. Lamberto said the meeting discussed "point by point" the fiscal package by which Fernandez hopes to narrow a fiscal deficit which he warns would otherwise hit $6.6 billion this year. He had hoped to boost the budget by $1.6 billion, but the package is being delayed and the bill to be debated first by the deputies has been watered down by the budget committee. They rejected Fernandez's attempt to avoid sharing income from new fuel taxes with the provinces, and want to double the personal wealth tax to 1.0 percent from 0.5 percent. This is opposed by Fernandez and by President Menem, who pledged this week he would not allow any changes that scare off capital. "There are some alternative proposals on the increase in the personal wealth tax, which in the text (passed by the committee) is one percent," Lamberto told reporters. He said these included proposals to replace the increase "with some other tax, such as income tax." -- Stephen Brown, Buenos Aires Newsroom +541 318-0695 7920 !GCAT !GDIP The presidents of Ecuador and Peru, whose troops clashed last year over a border dispute, met here on Tuesday and said they were ready to be friends. Presidents Abdala Bucaram of Ecuador and Alberto Fujimori of Peru held a 30-minute meeting on the fringes of a summit of the Rio Group of 14 Latin American nations and Bucaram told a joint news conference afterwards: "We have agreed that I will visit Peru in January to strengthen our friendship." Fujimori said: "I think we will have a very fluid relationship. We even are on a first-name basis." Bucaram, who took office last month, vowed on Monday that under his administration there would be no repetition of the January 1995 border clashes in which about 100 men died. "That is absolutely ruled out," he said. The two leaders declined to discuss the longstanding border dispute, saying the four peace guarantors -- the United States, Brazil, Argentina and Chile -- had requested a moratorium on declarations. 7921 !C12 !CCAT !GCAT !GCRIM !GPOL Two aides of former strongman Manuel Antonio Noriega who ran Panama's central bank were jailed on Monday for embezzling millions of dollars from the state, a court spokeswoman said on Tuesday. Fourth Circuit Court Judge Yanela Romero de Pimentel sentenced Rafael Arosemena, former director of Panama's central bank, to eight years for embezzling nearly $1 million for the ruling party during Noriega's rule, the spokeswoman said. Arosemana remains exiled in Mexico after fleeing there one year after Noriega was ousted by U.S. forces in 1989. Former central bank comptroller Constantino Peralta, who has been held in Panama City's Modelo Prison, was sentenced to six years for his role in the crimes, according to court documents. 7922 !C13 !C21 !CCAT !GCAT !GPOL !GVIO The government has lifted a controversial gag law that put strict curbs on television coverage of recent peasant protests in the southern coca growing region. In a statement late on Monday, the National Television Commission said the ban on broadcasts of information based on unofficial sources had been lifted with immediate effect. The restrictions were announced by the state-run commission on Aug. 23, during clashes between protesters and security forces in Caqueta province in which at least four people were killed. The measures banned broadcasts of any information from unofficial sources about the situation in Caqueta and neighbouring Putumayo. TV stations were also barred from showing any "images that reflect situations of extreme human suffering." Images of bloodied and fatally wounded protesters have been broadcast repeatedly since late July during sporadic outbreaks of violence stemming from demonstrations against the government's U.S.-backed drug crop eradication programme. The statement said TV news programmes had been urged to use their "good judgment and professional criteria" in coverage of the protests in southern Colombia but would no longer face the threat of sanctions because of the content of their newscasts. The censorship had prompted a public outcry in Colombia, especially after a TV cameraman was beaten by soldiers with rifle butts last Thursday after videotaping a peasant protester being beaten by government troops in Caqueta. 7923 !GCAT !GPOL Argentine Vice President Carlos Ruckauf said Tuesday this week's conclave of Peronist heavyweights would underline party loyalty to President Carlos Menem, when confidence in his leadership seems to be flagging. Menem called Peronist lawmakers and provincial governors for a high-level conference Thursday for a show of unity in the face of attacks from trade unions and business over his drive for fiscal austerity and more flexible labor laws. Polls shows Menem's personal popularity is at its lowest since he came to power in 1989. But Menem dismisses analysts who say he has lost the political initiative as "stupid." "Thursday's summit is very important to let the president know there is real loyalty and faith in party structures for his leadership," Ruckauf told Argentine radio. Ruckauf, also leader of the Senate, said Peronist cadres would pledge support Thursday "for the government's ideas and needs to bridge the budget deficit." Economy Minister Roque Fernandez has submitted a fiscal austerity package to Congress in a bid to head off a $6.6 billion budget deficit this year, but it has already been watered down and tampered with by the lower house. Deputies defied Fernandez by obliging him to share revenue from new tax on fuels with the provinces, and want to double a personal wealth tax to 1.0 percent from 0.5 percent. There are also early signs of resistance to Menem's labor bill proposals presented to business leaders Friday, including replacing redundancy pay with unemployment insurance funded by employers, and scrapping collective wage negotiations. Ruckauf predicted "very deep" party debate on these ideas. Menem's one-time trade union ally, the largest CGT labor federation, will be absent from Thursday's conference. It led a general strike against austerity measures in August and CGT boss Gerardo Martinez refused to back down on another strike later this month in talks with senior Menem aides Monday. "There is no negotiating," said Martinez's press chief Carlos West Ocampo Tuesday, revealing that the union leader met Interior Minister Carlos Corach and Cabinet Chief Jorge Rodriguez to discuss government announcements "which look like attempts to advance in labor legislation." Victor De Gennaro, head of the dissident CTA union group, reminded Menem that one year ago, after his reelection, he had promised to create 350,000 jobs in a much-vaunted five-year plan of public works. "Reality shows we lost 70,000 jobs and they have been taking money out of our pockets," De Gennaro said. Unemployment hit a record 18.4 percent in May 1995, and had only been reduced to 17.1 percent by May this year. -- Stephen Brown, Buenos Aires Newsroom +541 318-0695 7924 !E21 !E212 !ECAT !GCAT !GVIO The Colombian government plans to require rich Colombians to buy war bonds next year to help finance its war against leftist guerrillas. Finance Minister Jose Antonio Ocampo told a news conference late on Monday that the government hoped to raise at least $420 million though the sale of the bonds, which will be proposed in legislation unveiled in Congress this week. The bond sale would be in lieu of a proposed war tax, which the government determined was not permitted under the constitution. Under the plan, any individuals or businesses with a net worth of more 88.8 million pesos ($85,000) will be required to buy the five-year bonds, which will be issued in denominations of 500,000 pesos ($480) and carry an annual interest rate of 6 percent (corrects from 30 percent). Ocampo said the bonds, which could eventually be bought and sold on secondary markets, would receive a 20 percent premium if they were used to purchase assets -- including real estate holdings -- confiscated from Colombian drug lords. President Ernesto Samper said in a national radio and television address on Monday night that money raised through the bond sales would be used to provide the military with new weapons, transportation and intelligence equipment. He did not elaborate, but the Colombian army faces what Western military experts describe as a serious deficit in its ability to transport combat troops. Armed forces chief Adm. Holdan Delgado conceded in a recent interview that the military has less than three dozen working helicopters -- the amount the U.S. Army uses to support a single brigade-sized unit. Guerrillas launched a nationwide offensive last Friday, killing at least 60 security force members in two days of fighting that put a virtual stranglehold on the country of 37 million people. The offensive included an attack by hundreds of Revolutionary Armed Forces of Colombia (FARC) rebels on a military base in southwest Putumayo province in which at least 27 soldiers were killed and 60 others taken prisoner. The FARC, Colombia's largest and oldest guerrilla group, has grown increasingly through banditry, kidnappings and the protection of rural drug operations. Western experts say it poses more of a threat today than at anytime since its founding as a pro-Soviet Maxist group in 1964. 7925 !GCAT !GCRIM !GPOL President Fernando Henrique Cardoso, seeking to stem a rising tide of violence, said on Tuesday he will ask Congress to vote urgently on a bill outlawing unlicensed carrying of firearms. Cardoso also announced that he would send Congress a bill to counter money-laundering and earmark more funds for Brazil's overcrowded jails. "We must be able to walk the streets again, to lean out of our windows without being hit by a stray bullet," he said in a radio address. While violent crime has long been a fact of life in Rio de Janeiro, a string of drug-related killings in the country's biggest city, Sao Paulo, has turned security into a hot issue in the run-up to October and November municipal elections. Government figures show that 31 of every 100,000 Brazilians are homicide victims, compared with 20 in Mexico and 10 in the United States. Murder is the leading cause of death for men aged 20-29. "Incredible as it seems, we do not have effective measures to prohibit the illegal carrying of weapons, and that is why so many people are armed. And that, without a doubt, is one of the causes of the increase in violent deaths," Cardoso said. The new law, which he will ask Congress to treat as a priority, would make the carrying of unlicensed guns, currently punishable by fines, a criminal offence. The president voiced his concern at figures that showed a 26 percent increase over the past year in the smuggling into Brazil of mostly U.S.-made firearms, principally via Paraguay. He pledged his government would crack down on money-laundering by doing away with bank secrecy rules that have helped turn Brazil into a haven for the Italian mafia, South American drug cartels and other organised crime groups. "How can we continue bound by legislation that allows the depositing of vast amounts of money without the depositor having to reveal the origin of so much cash?" he asked. A bill that would punish money-launderers with sentences of between three and five years imprisonment will be sent to Congress at the end of September. More money would also be made available to improve Brazil's prisons, which Cardoso said were currently "the training grounds of violence." The infamous Carandiru prison in Sao Paulo, where 111 rioting inmates were massacred by police in 1992, would be demolished and replaced with a childrens' playground, he said. 7926 !GCAT !GVIO Colombian rebels have confirmed they are holding 60 "prisoners of war" after a stunning attack on a military base in the southwestern jungle, an official said on Tuesday. Pierre Gassmann, chief delegate of the International Committee of the Red Cross, said Revolutionary Armed Forces of Colombia (FARC) rebels confirmed they had 60 soldiers in a communique received by the Red Cross late on Monday. In the communique and in a radio conversation with self-described spokesmen for the FARC's high command, Gassmann said he was assured the soldiers were all in good health and would be released to a committee of government peace negotiators and members of the ICRC. "They told us they would contact us again in a few days," Gassmann told the Caracol radio network. The soliders were taken prisoner on Friday after hundreds of FARC rebels overran the Las Delicias military base in an isolated region of southwest Putumayo province near Colombia's border with Ecuador. At least 27 soldiers were killed in the attack, which came amid a nationwide rebel offensive that claimed the lives of 60 security force members. Armed forces chief Adm. Holdan Delgago told reporters on Monday 65 soldiers were still unaccounted for following the attack on Las Delicias, one of the worst the military has suffered in more than three decades of armed insurgency. Gassmann said the rebels had spoken of just 60 prisoners. The FARC, Colombia's largest and oldest rebel group, specialises in the protection of rural drug farms and laboratories. President Ernesto Samper said in a television and radio address on Monday that the Las Delicias attack was prompted by the fact that soldiers there specialised in eradicating illicit coca crops in Putumayo and neighbouring Caqueta. 7927 !GCAT !GPOL These are the key facts about Surinam where a vote takes place on Thursday to choose a new president. POPULATION: 420,000, of whom 33.5 percent are Creoles of mixed European-African descent, 34 percent East Indians known locally as Hindustanis, 18 percent Indonesians, 8.5 percent Bush Negroes -- descendants of slaves who fled plantations in the 17th Century -- two percent Amerindians and four percent Chinese, European and Lebanese. LANGUAGE: Dutch (official). English is widely spoken and local dialect Sranan Tongo (also known as Taki-Taki) is understood by all ethnic groups. RELIGION: Moslem, Hindu, Christian. CAPITAL: Paramaribo (population 240,000) GEOGRAPHY: 66,090 square miles (163,820 sq km) at the northern tip of South America, bounded by French Guiana to the east, Guyana to the west, Brazil to the south and the Atlantic Ocean to the north. GOVERNMENT: A constitutional democracy with a president elected to a five year term by a two-thirds majority of the 51- member National Assembly following parliamentary elections held every five years. Elections in May failed to produce a single party or coalition with a two-thirds majority. Under the constitution a new president must be chosen by a simple majority of the 869-member United Peoples Assembly which includes national, regional and district representatives. ARMY: The armed forces consists of about 2,000 troops, the majority of whom are deployed as ground security forces. A small air force and navy/coast guard also exist. ECONOMY: Mainstay of the economy is bauxite mining and processing of mineral into alumina and aluminum, which account for over 70 percent of exports. Surinam is world's sixth largest bauxite producer. Surinam has vast timber resources and the government is selling logging concessions to Indonesian timber companies, much to the disgust of environmental groups. In 1993 the government began to implement a programme of free- market reforms. The reforms led to a massive currency devaluation and inflation of 365 percent in 1994. By 1995, the currency had stabilised and inflation dropped to 50 percent. HISTORY: The Netherlands received Surinam in 1667 from Britain under the Breda peace agreement in exchange for New Amsterdam, now New York City. During the 19th Century England and France both briefly claimed sovereignty with eventual independence from the Netherlands coming in 1975. Since independence Surinam has suffered two military coups, seven years of dictatorship and widespread guerrilla activity. A group of junior officers, led by military sports instructor Desi Bouterse, seized power in February 1980, overthrowing the governing coalition led by President Henk Arron. In December 1982, 15 critics of the military government, were shot by the military. The Netherlands cut off aid that was not restored until civilian rule was restored in 1988. In 1986, Ronny Brunswijk, Bouterse's former bodyguard, led a guerrilla uprising against the government. Brunswijk's Jungle Commando, of about 1,000 Bush Negroes and foreign mercenaries waged a war against the army that cost hundreds of lives and drove about 12,000 refugees into neighbouring French Guiana. Under growing international pressure, Bouterse called elections in 1987. Though Bouterese was defeated at the polls, he stayed on as army commander and continued to hold sway behind the scenes. On Christmas Eve 1990, angered by the terms of a peace accord with the rebels and a public snub by Dutch officials on a visit to the Netherlands Bouterse staged a second coup. Bouterse eventually allowed new elections in 1991 won by the New Front coalition led by former education minister Ronald Venetiaan. In mid-1992 the government and Brunswijk's group signed a formal peace to end the civil war. Bouterse resigned as head of the armed forces in 1993 amid allegations he had used his position to enrich himself. He now heads the main opposition National Democratic Party. 7928 !GCAT !GDIP The daughter of guerrilla Ernesto "Che" Guevara denied on Tuesday she was acting for communist Cuba in charging that a prominent French ex-Marxist was to blame for her father's death. Aleida Guevara told the Argentine daily Clarin the charges she made in the newspaper last week against Regis Debray were her own opinion and were not fed to her by Cuba's leadership. "I'm not interested in what Debray says and I'm not working for anyone because this has to do with my father, that and nothing else. No one has told me what to say," she said. Aleida, who works as a pediatrician in Havana, said Debray "talked more than he should have" when he was detained in Bolivia after visiting Guevara and his small band of leftist guerrillas in the Bolivian jungle in 1967. Guevara, who was Fidel Castro's right-hand man and then tried to export Cuban-style revolution to mainland South America, was hunted down and shot by Bolivian troops. Debray, once an advisor to late French President Francois Mitterrand and author of a recent book critical of Castro, said Cuba was hounding him because it thought he was encouraging resistance movements on the island. Guevara stood by what she said: "I don't have any proof. What I said last week is our opinion: that my father went out of his way to get Debray out of the jungle and that our impression is that when Debray was captured he spoke too much." 7929 !GCAT !GPOL !GVOTE Surinamese congressmen and councilors meet on Thursday to choose a new president in the tightest race for power since independence from the Netherlands two decades ago. The vote, which pits a former school teacher against a leading member of Surinam's former military government, should end months of political uncertainty for the South American country following unclear election results in May. Acting President Ronald Venetiaan and Jules Wijdenbosch, who was a close aide to former military strongman Desi Bouterse during the military regime of the 1980s, need a simple majority of the 869-member United Peoples Assembly (VVV) to become president and form a government. The vote follows two failed attempts by the 51-member National Assembly to pick a leader after neither Venetiaan's New Front Coalition nor Bouterse's National Democratic Party secured the two-thirds majority needed in May's election. Venetiaan, 60, led in May but his four-party coalition has since disintegrated. Major defections to the NDP have left the two evenly balanced and party activists were working hard to secure every last vote from supporters. "It's going to be very close," one Western diplomat said. In public, both sides refuse to acknowledge the likelihood of a tight vote and predict easy victories. "Things look much better than people think. People will be very surprised and the opposition very disappointed," Jaggernath Lachmon, speaker of the National Assembly and leading member of the New Front, told reporters on Monday. When the Indonesian Party of Unity and Solidarity (KTPI) defected to the NDP late last week, Bouterse dismissed his opponent's chances. "Justice has been done. We are now the biggest party," he said. The defection was secured only after assurances that Bouterse would not hold any public office in the next government. But a victory for Wijdenbosch, 51, would be viewed nervously by many, including the Dutch government, who hold Bouterse responsible for ordering the 1982 torture and murder of 15 opposition leaders. Bouterse's rule provoked an uprising led by colourful rebel leader Ronny Brunswijk. The six-year conflict, which started in 1986, cost more than 500 lives. "If Wijdenbosch wins, the fear is that Bouterse will be the real power behind the throne," the diplomat said. Diplomatic ties with the Netherlands broken off during Bouterse's regime were re-established after Venetiaan's victory in the VVV 1991. Surinam, a country of 400,000, is one of the world's leading bauxite producers. But the effects of civil war and a tough economic programme launched in 1993 have seen its gross domestic product per capita fall from more than $3,000 to $1,200 in the last 15 years. 7930 !E41 !ECAT !GCAT !GJOB Chile's unemployment rate rose to 7.1 percent in the three months from May to July from 6.6 percent in the April to June period, said the National Statistics Institute. It is not possible to compare the figures with the same period last year as the government has changed the way it gathers the information. Unemployment was especially high in the capital, Santiago, where it rose to 8.4 percent due to a partly seasonal rise in labor supply that has outstripped demand, said the director of the statistics institute, Lenin Guardia. The work force in Santiago grew about two percent in Santiago in the quarter, while demand for labor grew around 1.6 percent, partly because farmworkers come to the capital at this time of year during the off-season, said Guardia. --Roger Atwood, Santiago newsroom +56-2-699-5595 x211 7931 !GCAT !GDIS !GENV A light-to-moderate earthquake measuring 4.9 on the Richter Scale hit southern Mexico early on Tuesday, causing no loss of life or damage, authorities said. The National Seismological Service said the quake struck off the coast of the southern state of Guerrero close to the tourist resort of Acapulco, some 220 miles (350 km) south of Mexico City at 6:45 local time (1145 GMT). The quake was also felt in certain areas of the capital city, although state-owned news agency Notimex said services were not called out to attend to any emergencies. 7932 !E12 !E21 !E211 !ECAT !GCAT !GPOL Social turmoil in Argentina over fiscal adjustments will last a few months but the government deserved praise for "biting the bullet", said Ricardo Hausmann, chief economist at the Inter-American Development Bank (IADB). Hausmann, talking to Reuters late Monday in Brasilia at an international seminar on public finance, said the Argentine government was acting very responsibly on the economic front. "I think the government is acting very responsibly in the sense that it is in the unfortunate position of having to carry out fiscal adjustments in the context of a recession," he said. "But they have bitten the bullet." Hausmann said that as soon as the economy picked up, the government would be able to carry out further adjustments at a much lower political cost. "It will take a few months," he said. -- Michael Christie, Brasilia newsroom 55-61-2230358 7933 !C42 !CCAT !E41 !ECAT !GCAT !GJOB Private firms located in Sao Paulo state laid off 4,202 employees between August 19 and August 24, a spokesman for the Sao Paulo State Industries Federation (Fiesp) said. In the previous week, Sao Paulo's industries dismissed 2,561 workers. Seventeen out of the 46 sectors included in the survey sacked personnel in the period. Three hired new people and 26 maintained their staff unchanged, he said. So far this year, Sao Paulo industries have laid off 127,780 workers or 5.93 percent of the Sao Paulo's industrial workforce, the spokesman said. In the last 12 months, Sao Paulo firms have sacked 264,868 workers, or 11.55 percent of Sao Paulo's industrial workforce, he added. -- Alexandre Caverni, Sao Paulo newsroom, 55-11-2324411. 7934 !GCAT These are the highlights of the main Sao Paulo and Rio de Janeiro newspapers this morning. - - - GAZETA MERCANTIL -- U.S. SEEKS SUPPORT FROM LATIN COUNTRIES AGAINST CUBA The visit of U.S. ambassador to the United Nations, Madeleine Albright, to Cochabamba raised speculation that she was sent by the U.S. government to ease pressure against the Helms-Burton Act which strenghtened the U.S. embargo against Cuba. Latin American leaders are meeting in this Bolivian city for the 10th presidential summit of the Rio Group of Latin American and Caribbean states. -- FINALLY THE GAS PIPELINE WITH BOLIVIA After nearly 30 years of talks, Brazil and Bolivia will sign Wednesday in Cochabamba a contract for the construction of a $1.8 billion gas pipeline linking the two countries. -- U.S. HOLIDAY HALTS BOVESPA The Sao Paulo Stock Exchange (Bovespa) registered its lowest volume since December 11, 1995 due to the U.S. Labor Day holiday. -- "FISCAL ADJUSTMENT IS NOT ENOUGH," SAYS IMF DIRECTOR Vitor Tanzi, fiscal affairs director of the International Monetary Fund (IMF) said the government's efforts to cut its deficit are not enough to fight the country's growing debt. - - - FOLHA DE SAO PAULO -- PITTA HAS 41 PCT, RIVALS TOTAL 46 PCT Celso Pitta, PPB candidate for Sao Paulo's mayor office, continues on the lead, according to a poll among Sao Paulo voters conducted by Datafolha Institute. -- CMN'S DECISION CREATES WAY OUT FOR BAMERINDUS A resolution approved by Brazil's National Monetary Council (CMN) will help out private bank Bamerindus. It creates a special credit line for banks, which does not require change of ownership. - - - O GLOBO -- IBOPE: CONDE FALLS TO 35 PCT FROM 39 PCT AND SERGIO RISES TO 24 PCT Luiz Paulo Conde, from the Liberal Front Party (PFL), who is running for Rio de Janeiro's mayor office fell to 35 percent from 39 percent, according to a poll among Rio voters conducted by Ibope, O Globo and TV Globo. Its main rival Sergio Cabral Filho, from the Brazilian Social Democrat Party (PSDB), rose to 24 percent from 19 percent. - - - -- Reuters has not verified these stories and cannot vouch for their accuracy. -- Fatima Cristina, Sao Paulo newsroom, 55-11-2324411 7935 !E51 !E512 !ECAT !GCAT !GDIP South Korean President Kim Young-sam was due to arrive in Guatemala on Tuesday to meet with Central American presidents and help find cheap production bases for his country's businesses, officials said. "The Korean ecomony is in the stage of moving abroad in search of cheap labour," Buan Ko, press attache for Kim's visit, told Reuters. Kim is the first South Korean head of state to visit the region. On Wednesday he will attend a summit with the presidents of Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica. On Thursday he is to leave for Chile, Argentina, Brazil and Peru. Central American political leaders are enthusiastic about the visit, which they hope will generate investment and joint ventures and lay the groundwork for trade across the Pacific. Buan said South Korean businesses could also be interested in exploring opportunities to bid on state-owned companies being privatised in Guatemala and elsewhere. Currently, South Korea's principal involvement in the Central American economy consists of owning dozens of "maquiladoras," textile assembly plants that export clothes to the United States. The concentration of South Korean capital in Guatemala -- in maquiladoras -- is the highest in the Americas. Buan made it clear that South Korea hoped to continue this investment pattern elsewhere in Central America. Central America will not see the entourage of business leaders from Korea's most important companies, such as Hyundai, Daewoo and Samsung, who will accompany the president to South America. "Those business leaders won't come here, because this is an investment zone of maquiladoras that need intense labour, but we believe the other Latin American countries need another type of investment," Buan said. South Korea, one of the so-called Asian Tigers, has had a boom in exports and production in the past 25 years. Buan said 5.9 percent of South Korea's exports currently go to Latin America and the trade balance is strongly in South Korea's favour. South Korea exported $2.6 billion to Central America in 1995, while imports from Central America were worth $660 million, for a regional trade deficit of close to $2 billion. 7936 !GCAT !GODD Just a five-minute drive from Rio's world famous Maracana soccer stadium Luma the lioness paces up and down in the Costa family's yard, rubbing her imposing body against the iron railings of her cage. Ever since the Costas bought Luma for 100 grams in gold from a local breeder eight years ago she has lived at the back of their house surrounded by the family's army of 15 yelping mongrel dogs and more than 40 cats. Born in Brazil, Luma joined the Costa family as a cuddly cub when she was only 24 days old. Now she weighs nearly 400 pounds (180 kg) and stands six feet (two metres) tall. "She would never attack us but sometimes she is not in a good mood and then she is best left in peace," Joao Costa said. "We can tell by the position of her ears. When they are upright we can enter the cage, but when they're folded back we don't go in." Joao, 51, and his eldest son Marcelo, 23, are the only ones who enter Luma's cage to play with her and scratch her belly. She is simply too big and strong for Costa's wife Maria Aparecida, 47, and their six other children. Luma has her own house in the backyard to which she retires after a day's play in her outdoor cage. Her favourite toy is a ragged car tire she has had for seven years and which she guards jealously. Every so often she sticks her velvety paws out to embrace one of the Costas and lick them affectionately on the face. Her appetite is ravenous, especially for chicken necks, avocadoes and chocolate milk from a baby bottle. She can eat up to 18 pounds (8 kg) of her favourite foods a day. Costa, who has also kept tigers and jaguars in the past, does not consider Luma an unusual pet, saying there are dozens of people in Rio who own lions and other wildcats. "Only 100 metres away from my house there are two people who used to have lions as well. At least 40 or 50 people own lions in Rio, but it is difficult to give an exact figure because many drug dealers in the shantytowns keep lions for protection." A year ago, lion cubs Samson and Delila were taken in by a circus in Rio after their drug-dealing owner was shot dead by a rival gang. But the Costas' choice of pets is not without controversy. "I think it is simply terrible. An animal like Luma belongs in the wild," said Carlos Bernardo Tavares Bontempo of Rio's Environment Department. "It is even worse if she lives with people because she loses her natural behaviour and instincts." Millions of animals in Brazil fall victim very year to the destruction of their habitats or the traps and guns of smugglers and poachers, studies show. Only one out of every 10 animals smuggled out of the country's Amazon rain forest to feed an international exotic pet market survives to reach its final destination, the Worldwide Fund for Nature (WWF) says. But Costa believes Luma is enjoying the good life in her spacious living quarters, far bigger than zoos are required to provide. "Besides, zoos kill lion cubs regularly because there are simply too many and they are not allowed to sell them except to other zoos. But of course they would deny that." Ever since Costa bought Luma he has dreamed of building a safari park in Rio for her to roam around in. "I have found a bank in England that is willing to lend me the $10 million I need to build the park, but I still need to find someone who is willing to put up 60,000 reais ($60,000) to pay for the intermediary between me and the bank," he said. The safari park would be home to other lions, tigers and wildcats, antelopes, crocodiles, insects and flesh-eating plants and one of the biggest aviaries in the world. 7937 !GCAT !GDIP Talks on Monday between the leaders of Bolivia and Chile to improve bilateral ties failed to produce visible progress on a territorial dispute or the restoration of diplomatic relations. "We didn't discuss that," Chile's President Eduardo Frei said at a joint news conference with Bolivia's President Gonzalo Sanchez de Lozada when reporters asked about Bolivia's demand that Chile give it a sea outlet. Bolivia has sought access to the Pacific Ocean ever since losing its westernmost territory in a war with Chile in 1879. Frei said no timetable had been set for restoring bilateral ties, severed by La Paz in 1978 after talks aimed at giving Bolivia access to the sea through a territorial exchange failed to yield concrete results. Sanchez de Lozada said he hoped small steps forward in ties with Chile would eventually lead to the restoration of full diplomatic relations. The two leaders held a one-hour meeting in this central Bolivian city, where they plan to attend the 10th presidential summit of the Rio Group of 14 Latin American nations on Tuesday and Wednesday. 7938 !GCAT !GODD A remarkable herb used as a cure-all by residents of a small town in northern Brazil has turned out to be marijuana, a television station said on Monday. For years, people in Cruzeta, Rio Grande do Norte state, swore by the properties of what they called "liamba." But then a police officer grew suspicious about the true identity of the spindly, green weed and ordered tests, Globo said. "If you've got a wheezing throat, it'll put you right straight away," said Marta Medeiros, recommending a potion made from her backyard marijuana for toothache and head pains. Miguel Matias said he took a tea made from the plant as a pick-me-up. "I've already had two and I'm going to have another three, to keep me young," said the pensioner. A local judge took a dim view of the use of the herb, which is being investigated by police. "The residents could be arrested," Sergio Dantas warned Globo. 7939 !GCAT !GPOL President Fidel Castro on Monday formally opened the new school year in Cuba, scoffing at western criticism of his country's one-party political system. Speaking at an agricultural college in Havana, Castro said no other nation in the Americas was beginning the 1996-1997 school year in the same conditions as Cuba, "with small resources, under blockade and in adverse circumstances." He said the fact that all Cuban children of school-going age, more than two million in all, had schools to go to was a "victory" for Cuba's socialist system in the face of continuing economic problems and a tightened U.S. economic embargo against the island. "For the imperialists, this is not democracy. For the imperialists, democracy must be what was recently discussed in Stockholm, the growing market in child sex," Castro said, referring to a United Nations-backed conference in Stockholm last week that condemned the sexual exploitation of children. This was a clear jibe by the Cuban leader at longstanding western criticism, led by the United States, of Cuba's political system and human rights record. Critics accused Castro's one-party communist government of suppressing free speech and persecuting political opponents. Castro said Cuba was proud of its education record. "Here, our schools are full of healthy, happy children," he added. He finished his short speech with the words "Long live our children, our youth, our people, our Homeland, our Revolution." Cuban officials said the island's free, public education system, hailed as one of the main achievements of the Cuban Revolution, was starting to recover from the impact of a five- year economic recession that badly hit supplies of education equipment and materials. Officials said that despite this not one school was closed. Education Minister Luis Ignacio Gomez said basic minimum supplies of pencils and exercise books were guaranteed at Cuba's more than 12,000 schools this year, although many of these still badly needed new furniture and there were still some delays and problems with school uniforms and shoes. State media said Cuba had the highest ratio in the world of teachers per inhabitant, one for every 41, and the highest ratio in the world of teachers per pupils, one for every 13.6. However, many teachers said the economic recession badly depressed morale and living standards among members of their profession, forcing many to switch to other jobs. Authorities responded by trying to improve conditions for teachers. 7940 !GCAT (Compiled for Reuters by Media Monitors) THE AUSTRALIAN Caulfield Cup favourite Kenbelle will run in the A$121,460 Chelmsford Stakes (1600m) at Randwick on Saturday against four major spring candidates. Her opponents include Saintly, Filante, Nothin' Leica Dane and Dupain. Page 21. -- Despite being sacked by the Adelaide Crows yesterday, midfielder Andrew Jarman remains hopeful that he will be able to continue his 110-game AFL career, possibly with new team Port Power. Page 22. -- Three former presidents, Ron Cook, Sandy Ferguson and Phil Ryan have threatened a Supreme Court injunction if the Hawthorn board continues its plans to consummate a merger with fellow AFL club Melbourne. Hawthorn has until tomorrow afternoon to cancel a merger vote on September 16. Page 22. -- THE SYDNEY MORNING HERALD Assured of the New South Wales Rugby Union minor premiership last weekend, Warringah captain Mark Catchpole will miss the team's final-round game against Eastern Suburbs on Sunday after playing with a disc protruding on his spinal cord last week. Page 45. -- With no point guard winning the Women's National Basketball League's premier award since its inception in 1982, Michelle Timms will have to create history to take out the Most Valuable Player award. The Sydney Flames point guard is having the finest season of her career, featuring in the top four in points per game, assists, steals, free throws and three-point percentages. Page 45. -- Manly chief executive Frank Stanton has accused the New Zealand Rugby League of trying to destabilise the Australian Rugby League series by selecting four ARL-contracted players in the New Zealand team to meet Great Britain next month. Stanton said Manly centre Craig Innes would like to play for his country but is aware of his contract situation with the ARL. Page 46. -- THE AGE Tasmanian captain and former Australian test cricketer David Boon will captain English county side Durham next season. After retiring from test cricket last year with 7422 runs, including 21 centuries in 107 Tests, Boon will take over the bottom placed team for two years. Page C14. -- Following meetings with new coach Malcolm Blight on Sunday and Monday, AFL veterans Andrew Jarman and Wayne Weidmann have been sacked from the Adelaide Crows. Fringe players Brendan Logan and Matthew Powell are also expected to receive their marching ordrs, with Tony McGuinness set to lose the captain's role. Page C16. -- Rather than hurt the AFL club's prospects of continuing beyond the first week of the finals, the Geelong board has decided to fine full-forward Gary Ablett his match payment, about A$10,000, instead of suspending him after the champion broke a club rule by turning up 20 minutes late for an early morning training session. Page C16. -- HERALD SUN Leading the series with 40 points after thirds in the opening two events, Victorian Chris White is favourite to take out today's Australian King of the Mountains Classic between Wangaratta and Mt Buffalo. The 176km event is the last in the Tattersall's Cp series of selection races for the VicHealth Herald Sun Tour. Page 69. -- In an end to the dispute with Soccer Australia, the Melbourne Knights have released a new logo which features a knight bursting through a shield, but still retains the club's traditional Croatian colours of blue, red and white. Knights members adopted the logo by a 95 per cent majority at an extraordinary meeting. Page 70. -- Failing to miss a senior match in three seasons, Carlton coach David Parkin is confident that defender Michael Sexton will make the cut for Saturday's AFL game at Subiaco against West Coast, despite rolling his ankle at a training session last night. Page 72. -- THE DAILY TELEGRAPH Western Suburbs coach Tommy Raudonikis has replaced rookie halfback Willie Newton with the more experienced Steve Georgallis for Friday night's elimination quarter-final against Cronulla. Despite performing well since breaking into first grade three weeks ago, the club held fears that the 18-year-old might not be able to handle the pressure of the rugby league finals. Page 68. -- The brother and manager of jockey Wayne Harris admitted last night that the champion rider had major surgery last Friday, but refused to disclose details of his condition. Greg Harris also refused to speculate on the likelihood of his brother returning to a racing career. Page 70. -- After announcing prizemoney of A$2,100,000 will be paid to Australian Rugby League clubs in the eight-team playoff series starting this weekend, ARL chairman Ken Arthurson admitted the sporting organisation was under financial pressure but denied its was broke. Page 72. -- Reuters Sydney Newsroom 61-2 373-1800 7941 !GCAT (Compiled for Reuters by Media Monitors) THE AUSTRALIAN FINANCIAL REVIEW Communications Minister Richard Alston has attracted the ire of John Fairfax Holdings managing shareholder Conrad Black and chairman Sir Laurence Street over his weekend comments about the ownership and structure of the newspaper group. Black accused Alston of "wildly inaccurate public musing" and Street said the Minister's comments had the potential to be destabilising in the market place and amongst Fairfax staff. Page 1. -- Transport Minister John Sharp indicated yesterday that although there was support from the ACT Government and the Commonwealth, the future of the Very Fast Train project would depend on the New South Wales Government, which has so far shown some reserve on the project. Sharp also dismissed proposals for a second Sydney airport situated in Goulburn and revealed the Federal Government had provided A$1 million to the ACT for a feasibility study on upgrading Canberra airport to handle international freight. page 2. -- In a bid to compensate building workers for a Federal Government decision to tax their award travel allowances, nine of Australia's biggest construction contractors, including Multiplex, Fletcher Challenge, Concrete Constructions, Westfield, Baulderstone and Leighton Constructions, have agreed to pay rises of up to A$37 a week. Page 3. -- Denying responsibility for the actions of a minority of protesters at the Canberra anti-Government rally last month, the ACTU yesterday called on unions to take disciplinary action against any union member or official found guilty of a criminal offence. Page 4. -- THE AUSTRALIAN In its first official statement since last month's protest which culminated in a riot at Parliament House, the ACTU Council accepted the organisation of the rally was inadequate to handle "unforeseen events" although it maintained it was not responsible for the actions of a small minority of protesters. The Council also admitted the violence had harmed the "reputation and standing" of the union movement while blunting the focus of its attack against the Federal Government. Page 2. -- The Australian Bureau of Statistics has released figures which suggest the retail sector may be recovering after a boom in sales during July drove retail turnover to its highest increase in more than two years. Monthly retail turnover figures for August sow an increase of 2.4 per cent for sales, following a five-month period of weak growth for the sector. Page 2. -- Former Labor Senator Mal Colston has warned the Labor party he will be more inclined to support the Coalition in the Senate, if his former colleagues continue to subject him to private and public attack. Colston defected from the Labour party last month to act as an Independent, much to the outrage of his former party. Page 3. -- Following the shock weekend resignation of Gerry Moriarty as the 2000 Sydney Olympic Games chief operating officer, New South Wales Olympics Minister Michael Knight pledged to intervene more in all aspects of the Sydney Organising Committee for the Olympic Games operations. Knight is concerned that the Government and organisers need to work closer to achieve success. Page 3. -- THE SYDNEY MORNING HERALD With the Federal Government on the verge of an announcement of an inquiry into media ownership, Conrad Black, the major shareholder in newspaper group John Fairfax Holdings, attacked the Communications Minister Richard Alston for "wildly inaccurate" specuation over the group's future. Page 1. -- A Sydney school teacher was yesterday charged with possessing child pornography. When Police searched the Belleview Hill Public School teacher, Jason King's house last month, they allegedly found 10 child pornography publications, loose leaf folders full of naked children photographs, and pictures of children at surf carnivals. It was also alleged that King had been distributing the material over the Internet. Page 1. -- Australian Federal Police have begun arrests over last month's riots which occurred at Parliament House following an Australian Council of Trade Unions organised rally. At virtually the same time the ACTU Council released a statement expressing regret over the riot, a 26-year-old Yass man was charged with offences relating to the Parliament House violence. Page 1. -- In a proposal to cut more than A$24 million from the health budget of south-east Sydney, the Prince of Wales and Prince Henry hospitals will lose 100 beds and 290 full-time staff positions. Prince of Wales will also lose its opthalmology unit, a machine to treat kidney stones and 14 of the 256 in-patient drug and alcohol rehabilitation beds at the Langton Centre in Surry Hills. Page 3. -- THE AGE An ACTU council meeting in Victoria yesterday condemned the actions of a small minority of protesters at last month's Canberra riot and although the union body refused to take the blame for the violence, it pledged its full support for the Australian Fedeal Police investigation and endorsed the development of a policy with the AFP Association to prevent violence at future rallies. Page A1. -- Australian diplomats have secretly protested to several South Pacific nations over the sale of Australian passports, which they fear are being used by Asian criminals to gain backdoor entry to Australia. Small island nations such as Kiribati and Tonga sell passports for up to A$25,000 without checking the background of applicants. Page A1. -- In response to Federal Budget cuts of A$1.05 million from ABC radio's A$14.7 million budget this financial year, the ABC is considering a proposal which would see a merger of Victorian regional radio and 3LO, with only the breakfast and drive-time program surviving in their present forms. Page A3. -- Plans for a A$40 million residential/resort development at Victoria's Ninety-Mile Beach have been approved despite deficiencies in a 1995 Environmental Effects Statement on the resort. The health management complex and residential precinct, Lochsands Intrnational, is due to start construction early next year. Page A3. -- Reuters Sydney Newsroom 61-2 9373-1800 7942 !GCAT (Compiled for Reuters by Media Monitors) THE AUSTRALIAN FINANCIAL REVIEW The blue-chip companies are still counting up huge losses and are expected to count even more this year with underperformers posting unexpectedly poor results for 1995-96. ANI and National Foods Ltd yesterday were some of the latest to take extreme action in an attempt to turn around falling profits. Page 1. -- Surprisingly buoyant monthly retail figures for July have been attributed to a cold snap in July on Australia's East Coast. By bringing forward its usual August clearance sale to July, men's clothing chain Gowings boosted monthly turnover by 78 per cent. Page 5. -- Australian National Industries Ltd is desperately attempting to turn around, merge or sell-off the European engineering business Holter. Holter has recorded a A$234 million writedown of its assets and has forced ANI for the first time in 20 years to suspend its dividend payout. Page 19. -- Embattled pay TV provider Australis Media Ltd is currently holding talks to decide its new management structure. It is believed that any compromise with the Packer camp will produce a management control demand from the franchisees, US-based United Internaional Holdings and Century Communications. Page 20. -- National Foods Ltd will have a new managing director following the removal of Graham Reaney yesterday after continuing lower profits. The dairy, juice and packaging group was formed by Reaney five years ago. Page 20. -- Air New Zealand and Ansett will move to reaffirm their regional partnership by aligning their international and domestic flights and launching a code-sharing operation in the next quarter. The managing director of Air New Zealand, Jim McCrea, said the move was to quickly establish strategic initiatives and to lower expenses while expanding revenue. Page 21. -- THE AUSTRALIAN Following US air strikes against Iraq, world oil prices have surged with analysts claiming prices could rise as high as US$25 a barrel in the short term. Australian Oil traders said yesterday offshore and domestic buyers have jumped in to take advantage of the escalating world prices, which could underpin an already strong energy sector. Page 35. -- Canadian media proprietor and strong shareholder in newspaper group John Fairfax Holdings Ltd, Conrad Black, last night moved to kill speculation that his company Telegraph Plc was seeking to shed its 25 per cent stake in Fairfax, suggesting instead, the group was keen for the Government to relax its media ownership laws so it could raise its stake even higher. Page 35. -- General Insurer FAI Insurances Ltd has reversed last year's A$89.8 million loss by posting a net profit of A$10 million for the year to June 30. FAI chief executive Rodney Adler has foreshadowed further gains, based on the group's turnover rising 15 per cent to A$1.5 billion. Page 36. -- A massive A$234 million writedown on the floundering Holter European environmental engineering business has sent parent company Australian National Industries Ltd posting a A$213 million loss for the year to June 30. The Holter business is now valued at lss than half the A$460 million ANI has invested in it since 1991. Page 37. -- Pacific BBA Ltd's share price jumped by 18 cents to A$3.88 yesterday following the news of a A$200 million five-year North American export order for its automotive component, the Banksia parking brake. The brake was developed and designed by subsidiary PBR Automotive. Page 37. -- Air New Zealand yesterday claimed its new half-share of Ansett Airlines would still allow the international carrier to have equal control, despite The News Corporation Ltd retaining the executive chair of the airline. Page 37. -- THE SYDNEY MORNING HERALD Shareholders of Australian National Industries Ltd will not receive a dividend following the engineering group reporting a A$213 million annual net loss. ANI's troubled environmental engineering division Holter made for A$234 million of the group's total asset write-off. Page 25. -- The new Asian shareholders of National Foods, Mingly and Camerlin, have flexed their muscles in the dairy, fruit juice and packaging group boardroom following Max Ould replacing Graham Reaney as managing director. The management changes reflect another disppointing year for National Foods. Page 25. -- John Singleton Advertising has declared that the sale of its five per cent share in the Ten Network is on the agenda. The proposed sale, via a unit trust, was announced as JSA reported a seven per cent increase in net profit from A$5.8 million to A$6.26 mllion in the June 30 year. Page 25. -- FAI Insurance has paid its shareholders a dividend once again after posting a net profit of A$10.04 million in the June year. This follows a remarkable A$100 million turnaround from the previous year's loss of A$89.9 million. The stronger result was attrbuted to higher premiums for compulsory third party insurance. Page 27. -- The Australian wine industry is booming with Australian Bureau of Statistics reports of record export sales of 128 million litres of wine, up 12.6 per cent during 1995-96, with increased sales to South-East Asia, the former Soviet Union and Europe. The good news for the industry was slightly dampened with the news that Australia also imported a record high of wine. Page 27. -- Air New Zealand managing director Jim McCrea has announced the Air New Zealand A$325 million purchase of half of domestic air carrier Ansett Australia was "a critical step" for both airlines which will create the core of a global network. Page 27. -- THE AGE Oil prices shot to post-war highs briefly yesterday, while gold and the US dollar firmed slightly. The cause was the missile launches by the United States into Northern Iraq. Page C1. -- ANI's venture into European engineering company Holter created disaster yesterday pushing the company to a June-year result of A$213.1 million in losses. The company is still attempting to sell off, merge or split up Holter in order to turn itself around. Page C1. -- Conrad Black yesterday lashed out at the comment made by Communications Minister Richard Alston that Fairfax could be broken up. Black said the Senator was creating some "wildly inaccurate musing" on the topic of Fairfax, a company in which his Telegraph group owns a 25 per cent share. Page C1. -- An export contract for Pacific BBA valued at A$200 million to supply banksia vehicle handbrakes to General Motors is the biggest overseas contract the company has, and will boost the value of its current Banksia contracts to about A$600 million. Page C3. -- In a A$100 million turnaround from last year's profits FAI Insurance has recorded a net profit this year of A$10.04 million. The profits are mainly the product of higher premiums for compulsory third party insurance. Page C3. -- National Foods' managing director Graham Reaney has decided to quit the company he set up five years ago after posting a 40 per cent surge in full-year net profits. When asked why, Reaney stated personal reasons and declined further comment. Page C3. -- Reuters Sydney Newsroom 61-2 9373-1800 7943 !GCAT **BIRTHDAYS** Australian journalist EDMUND BANFIELD, who lived on Queensland's Dunk Island for many years, was born in 1852. His most remembered publication was probably "Confessions Of A Beachcomber". American illustrator CHARLES GIBSON, who created the 19th century pin-ups "The Gibson Girls", was born in 1867. The man from Arnott's biscuits, GEOFFREY ARNOTT, was born in 1902. One of Australia's greatest swimmers, DAWN FRASER, was born in Sydney in 1937. She broke the 100 metres freestyle record nine successive times. She won four gold medals at the 1962 Commonwealth Games in Perth. In her 10 years of competitive swimming she also won six gold and five silver Olympic medals. She's the only swimmer to have won a swimming event at three successive Olympiads, and was the first woman to break the one minute barrier for the 100 metres freestyle. American golfer and five-times winner of the British Open and winner of the US Masters in 1982, TOM WATSON, was born in 1949. British drummer with The Pretenders MARTIN CHAMBERS was born in 1951. **EVENTS** 1567 : Queen ELIZABETH I granted a patent to two Flemish merchants to make glass, on the condition that they taught their craft to Englishmen. 1821 : Russian Tsar ALEXANDER closed Alaska to shipping. 1929 : The British Broadcasting Company invited the Baird company to carry out experimental television transmissions. 1939 : Fashion experts came up with a new idea for coat fabric. They suggested using mouse skins. A full-length coat would take 400 skins and cost about 100 pounds. The designers said the cost could be significantly reduced if customers were to able catch and supply their own mice! 1940 : The Battle of Britain began. HITLER threatened to raze British cities in reprisal for RAF bombings in Germany. 1966 : Australia's JACK BRABHAM won the Italian Grand Prix at Monza. He became the first world champion to win in a car he'd built himself. 1970 : The famous Kirov Ballet lost one of its brightest stars when NATALIA MAKAROVA defected in London. MAKAROVA danced her first 'Giselle' with the company in London during their first European tour in 1961, when her partner RUDOLF NUREYEV defected. While MAKAROVA told reporters she was defecting to gain artistic freedom, it was believed she had fallen in love with a Westerner. 1985 : A famous British traffic warden retired. META DAVIS unknowingly wrote herself into musical history when she issued a parking ticket in 1967. She issued the ticket on PAUL McCARTNEY's car and he stopped her to ask her her name. The resulting song was "Lovely Rita, Meter Maid". 1987 : The West German teenager who landed his light plane in Moscow's Red Square was sentenced to four years in a labour camp. MATHIAS RUST flew from Poland through the Russian air defence system, as a prank. 1988 : Queensland's Fitzgerald Inquiry was told that more than 40 SP bookmakers had paid hundreds of thousands of dollars in bribes to police. (Compiled from ABC ARCHIVES, ABC RADIO NATIONAL, "On This Day" published by REED INTERNATIONAL BOOKS LIMITED, "The Chronicle Of The 20th Century" published by PENGUIN BOOKS and "Rock And Pop (Day By Day)" published by BLANDFORD BOOKS) -- Reuters Sydney Newsroom 61-2 9373-1800 7944 !E12 !ECAT !GCAT !GPOL !GVOTE New Zealand's opposition Labour Party leader Helen Clark reiterated her party's strong commitment to an open economy in a speech to a Wellington Chamber of Commerce lunch on Tuesday. But she said a change of government was needed to deliver the social dividend from a better performing economy. In a speech setting the scene for Labour's business-related policy in the run up to the October 12 election, she said for many the recovery of the 1990s had been a purely statistical phenomenon. "I'm shocked at the endemic poverty which exists in New Zealand today," she said. She said a Labour-led government would set up a new body, Strategy New Zealand, involving business and workers who, alongside key ministers, would draft macroeconomic targets. These would then be discussed more widely before being implemented, given that after the election no single party would command a majority in parliament. She confirmed Labour's commitment to widening the inflation target of the Reserve Bank from 0-2 percent to minus one to three percent. She said Labour would amend industrial law by introducing an Employment Relations Act to recognise unions, promote collective bargaining and require good faith bargaining. Labour wanted to support regional and local development strategies. Clark said that as the election approached, voters' attention was focusing on the bread and butter issues of health, education and what can be afforded. -- Wellington newsroom 64 4 473-4746 7945 !GCAT !GDEF !GDIP !GENV The 27th South Pacific Forum began on Tuesday in the Marshall Islands and despite the end of French nuclear testing in the region, nuclear issues again look set to dominate the agenda. "May we work for a Pacific free of nuclear arms and the needless (nuclear) testing which threatens the destruction of your islands...," said Marshall Islands Catholic Bishop Jude Samson in opening the Forum in the capital Majuro. Papua New Guinea has said it will seek from the Forum's 16 island states an extension of the South Pacific Nuclear Free Zone Treaty to ban the movement of nuclear weapons through the region. But New Zealand Prime Minister Jim Bolger on Tuesday said an extension of the treaty could risk losing the support of the five nuclear power signatories to the nuclear-free treaty. "It is certainly something I do not anticipate there will be a unilateral decision sought or made at this Forum," he said. France, Britain and the United States in March signed the 11-year-old South Pacific Nuclear Free Zone Treaty, joining other declared nuclear powers Russia and China. The treaty bans nuclear testing and positioning of nuclear weapons in the region. New Zealand already prohibits the entry to its ports of U.S. warships carrying nuclear weapons. Another nuclear issue facing the three-day Forum is a plan by the Marshall Islands to create a nuclear waste dump on atolls contaminated by U.S. nuclear tests in the 1940s and 1950s. The other issue is whether to readmit France as a dialogue partner after it was suspended last year for staging a final series of nuclear tests in French Polynesia between September 1995 and January 1996. The annual Forum brings together leaders from Australia, the Cook Islands, the Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, New Zealand, Niue, Palau, Papua New Guinea, the Solomon Islands, Tonga, Tuvalu, Vanuatu and Western Samoa. 7946 !GCAT !GPOL Australian Labor Party defector Mal Colston warned his colleagues on Tuesday, saying that before they insult him they should bear in mind whether they need his Senate vote. Asked whether he expected the insults, such as "rat" and "sook", to continue, Colston said: "I don't think so. "It's up to my former colleagues whether it's an ongoing thing and whether my former colleagues would like me to be looking at their amendments to legislation at some stage in the future," he said on Australian Broadcasting Corp television. "I've mentioned that to them." Colston quit the Labor Opposition on August 20, transforming the Liberal-National government's chances of gaining the two votes it needs to get any bill through the Senate. Another Independent, Brian Harradine, can supply the other vote. Colston refused to say whether he would back the government's bill to sell a third of telecoms carrier Telstra Corp. However, he repeated earlier statements that he was concerned about the company's employment levels in regional Queensland, his home state. -- Canberra Bureau 61-6 273-2730 7947 !GCAT !GWEA Australia's spring rainfall is likely to be average to above average for most areas in September through November, the Bureau of Meteorology said in its latest rainfall outlook. All states have areas with an increased chance of higher than average total rainfall over the next three months but most significantly over Western Australia and southern parts of the Northern Territory and Queensland, the bureau said. The predictions are based on recent Southern Oscillation Index (SOI) trends and rainfall patterns, it said. The value of the SOI for August was plus five, continuing the pattern of mostly small positive values that have generally been experienced this year, the bureau said. Cooler than average sea surface temperaturers continue to linger in the eastern Pacific Ocean. However, this feature is not as marked as earlier this year such that conditions now are not too far from average, it said. Slightly stronger than normal trade winds continue. Ocean signals are also indicating an early start to significant rainfall this year in tropical northern Australia, the bureau said. Past records show that warmer than average sea temperatures around northern Australia and Indonesia coupled with positive values of the SOI have often led to above average rainfall early in the northern wet season, the bureau said. -- Sydney newsroom 61-2 9373-1800 7948 !C18 !C183 !CCAT !E12 !ECAT !GCAT !GPOL Two independent politicians hold the key to a controversial government plan to sell a third of Australia's biggest telecommunications carrier Telstra Corp for A$8 billion (US$6.3 billion). Prime Minister John Howard is just two votes short of a majority in the upper house of parliament, the Senate, but all non-government parties are opposed to the privatisation, which would be the biggest in Australian corporate history. The apprehension among non-government parties reflects a broader concern among voters' over economic reform, especially asset sales. "They want to take us down the British road," said Australian Democrats Leader Cheryl Kernot, who said she believes Howard has been inspired by former British prime minister Margaret Thatcher. The government argues that money from the sale will reduce its debt and interest bill and that private participation in Telstra would also reform the massive utility, which has been criticised for being bureaucratic and inefficient. To pass the necessary legislation through the Senate, Howard has attached a sweetener -- Canberra would pay for a A$1 billion environmental repair fund. But the non-government parties, all of them leftist, are simply not biting. "We've shown them a lot of other ways to raise (environmental) money, including using seven percent of Telstra's pre-tax profits for the same purpose," Kernot said on radio on Tuesday. Telstra, one of Australia's most profitable companies, in March posted a net profit of A$1.2 billion for the six months to December. "It does not have to be sold," Kernot said. The Labor Opposition and two senators from another minority opposition party, the Greens, agree, leaving Howard to pin his hopes on the two Independent senators, Mal Colston and Brian Harradine. Colston is a Labor defector. Before his August 20 resignation from the party, the Telstra privatisation seemed to have died when the Senate referred it to a committee in June. But Colston says the government, swept to power with a massive majority in March, might have a mandate to sell Telstra, raising the possibility that he will vote for the sale when the Senate considers the legislation again this month. He said on Tuesday he would want guarantees that Telstra would maintain employment in his home state of Queensland. Communications Minister Richard Alston appeared to imperil the partial Telstra privatisation when he said on Sunday it was inevitable that the government's entire holding would be sold eventually. The remark upset both Independents, who had accepted the government's assurances that it would sell no more than a third of the telecommunications carrier. "I am somewhat perturbed to read of the government's ultimate intention of selling the whole of Telstra," Harradine wrote in a letter to Alston. But Howard stepped in on Monday, rebuked Alston and confirmed that his policy was limited to a one-third sale. Neither Colston nor Harradine will firmly commit to voting for the Telstra bill. Australia's former Labor administration privatised many government businesses, including Qantas Airways Ltd, but none of the sales attracted broad public support. (A$1 = US$0.79) 7949 !GCAT !GDEF !GDIP !GPOL !GVOTE Opposition leader Helen Clark on Tuesday said New Zealand would seek broader ties with Asia and adopt a stronger line on nuclear disarmament should her Labour Party win power in next month's general elections. New Zealanders go to the polls on October 12 and on current polling the ruling conservative National Party has 35 percent support against a combined 52 percent for the three main opposition parties. Clark said the government's foreign policy position on Asia had "really backfired". "We have got to look for much greater breadth in our relationship with Asia," Clark told Reuters in an interview. She said there was an impression that New Zealand had a new-found interest in the region which would not really have happened if Asia had not become wealthy. "...The way that was handled served to obscure the fact NZ was engaged with Asia for quite a long period of time." "I think the emphasis has been excessively narrow on trade. I am the last one to say that trade is not important because it is New Zealand's lifeblood, but you won't trade successfully unless you build up a much broader relationship," she said. Clarke also criticised Wellington's position on recent global nuclear test ban treaty talks in Geneva. The talks last month failed to finalise the Comprehensive Test Ban Treaty (CTBT) after India refused to sign. "(The CTBT)...won't go smoothly as long as access to nuclear weapons is seen as a privilege of a cabal of five. And we didn't stand up against the cabal of five. New Zealand collaborated," Clark said, referring to the five declared nuclear powers of Russia, China, the United States, France and Britain. "The nuclear states have the weapons themselves, they are not tied into any programme of nuclear disarmament and this is now ruining the negotiations for the comprehensive nuclear test ban treaty," she said. Wellington has maintained a strong anti-nuclear stance since its mid-1980s ban on nuclear-powered and armed warships from entering its ports and more recently in its fierce criticism of France's atomic weapons tests in the South Pacific. Clark also called for more recognition of the importance of the European origins of the majority of the population. 7950 !GCAT Following are the main stories in Wednesday's Malaysian newspapers. NEW STRAITS TIMES - The U.S. military today fired 27 long-range cruise missiles against air defence and communications targets in southern Iraq in retaliation against Iraqi military attacks against Kurds. - The Cabinet will discuss the missile attack on southern Iraq by the United States, Deputy Prime Minister Anwar Ibrahim said today. - Umno president Mahathir Mohamad said today the supreme council would discuss complaints made against the three incumbent vice-presidents in the run-up to the October party elections. STAR - The United States yesterday launched the biggest military strike against Iraq since the Gulf War, firing 27 cruise missiles at air defence targets in retaliation for Iraqi attacks on Kurds in northern Iraq. - Bank borrowers, particularly housebuyers, stand to benefit from a slight reduction in interest rates following the easing in the base lending rate (BLR) this month. BUSINESS TIMES - A U.S. missile attack on Iraqi targets sent regional markets plunging yesterday with the exception of Tokyo, which escaped when the market closed without the opportunity to react to the news. - Norway has proposed a North-South dialogue to discuss social issues ahead of or during the World Trade Organisation (WTO) meeting in Singapore in December. - The big question hanging over Sime Darby Bhd's performance for its financial year ended June 30 1996 is not whether it will improve on last year's figure, but by how much. - The U.S. proposal for zero tariff in the field of information technology has Malaysia's support but International Trade and Industry Minister Rafidah Aziz says she could not commit to what extent that support goes. 7951 !GCAT !GDIP Britain's final departure next year from its colony of Hong Kong will be sealed with a handshake, a British minister said on Tuesday, confirming the two countries would share one final last symbolic embrace. Beijing's top Hong Kong policymaker had indicated he was willing to join the British territory's last imperial governor at a ceremony to mark its return to China, said Jeremy Hanley, Minister of State at the Foreign and Commonwealth Office. Chinese official Lu Ping's willingness to join Britain's Governor Chris Patten in the limelight appeared to signal new willingness to set aside differences in the run-up to the colony's return to Beijing rule on July 1, 1997. "I had confirmation from Lu Ping this morning that he is looking forward to shaking the governor's hand at the handover ceremony," Hanley told a news conference in Beijing. London and Beijing have long bickered over the arrangements for Hong Kong's mid-1997 transition to Chinese rule after more than 150 years, with disagreement over the handover ceremony once so entrenched that the prospects for a joint event seemed doubtful. Beijing, infuriated by Patten's drive to expand democracy in the colony ahead of its return, has tried to limit Britain's role, while London is keen to leave in imperial style. Britain in March signaled that a joint ceremony was in doubt, with diplomatic sources reporting that the main hurdle in talks was China's insistence that Patten should not attend. Hong Kong government radio reported late last month that Chinese and British negotiators could reach an outline agreement on the ceremony by the end of September, just nine months before the end of London's rule. A willingness to share the podium with the governor could reflect a muting of Chinese anger at Patten, who has long been the butt of scathing editorials in the Beijing media. Lu Ping has frequently shown reluctance to meet Patten during visits to the colony, although he has often had conferences with other British and Hong Kong officials. Hanley said differences remained to be settled on handover arrangements, but added progress had been made. "We've had very useful discussions," he said. "On the handover ceremony, the Chinese government agree that it should be grand, solemn and dignified, and fitting to the historical importance of the event," Hanley said. Britain and China say relations have warmed in recent months, boosted by high-level exchanges and a May trade visit to Beijing by British Deputy Prime Minister Michael Heseltine. Differences remained over China's determination to scrap Hong Kong's elected legislature, known as Legco, Hanley said. "It is unnecessary for Legco, which has been duly elected, to be replaced before the end of its term in 1999," he said. While Hanley called for urgency to resolve outstanding disagreements before the 1997 handover, China's official Xinhua news agency quoted Lu Ping as saying "minor differences" did not necessarily have to be ironed out before the day arrived. "We will try our best to solve minor differences before the first of July, 1997. If some of the differences cannot be solved by that day, it doesn't matter," Lu said. "They can be resolved gradually by the Hong Kong people themselves." 7952 !GCAT !GDIP A British minister said on Tuesday that China had indicated it was willing to set aside differences and join the last colonial governor at ceremonies marking the transfer of power in Hong Kong next year. Jeremy Hanley, Minister of State at Britain's Foreign and Commonwealth Office, said Lu Ping, China's most senior Hong Kong official, had told him he wanted to attend the ceremonies with the British colony's Governor Chris Patten. "I had confirmation from Lu Ping this morning that he is looking forward to shaking the governor's hand at the handover ceremony," Hanley told a news conference in Beijing. How to mark Britain's mid-1997 withdrawal from Hong Kong, the last bastion of a once-mighty empire, has long been a source of disagreement between London and Beijing. For Britain, the handover marks the end of more than 150 years of ruling the prosperous, capitalist colony. China and Britain have sparred over whether they would hold a joint ceremony for the transfer of power in the colony or mark the occasion at separate functions. Beijing, which has been angered by Patten's drive to expand democracy in the colony before the handover, has tried to limit Britain's role. Foreign diplomats had said privately that they had been invited to handover ceremonies in the colony but had been unsure what precisely they were being asked to attend. "On the handover ceremony, the Chinese government agree that it should be grand, solemn and dignified and fitting to the historical importance of the event," Hanley said. Final arrangements for the ceremony had not been agreed, he said. 7953 !GCAT !GDIP China on Tuesday expressed grave concern and deep regret over cruise missile attacks on Iraqi targets by the United States. "We express grave concern over U.S. air attacks on Iraqi air defence targets," state radio quoted Foreign Ministry spokesman Shen Guofang as saying. "We deeply regret new tensions arising in the Gulf," Shen said. "We have always been against resorting to military force or mutual threats to resolve international incidents." Shen urged the United States and Iraq to practise "restraint to prevent the situation in the Gulf from worsening," the radio said. Hours earlier, at a regular foreign ministry briefing, Shen had urged restraint on all sides and said the territorial integrity and sovereignty of Iraq should be respected. "We hope all sides will not take action that could further intensify the situation in that area," Shen told the briefing. The U.S. military on Tuesday launched cruise missiles at air defence targets in southern Iraq in retaliation for Iraqi military attacks against Kurdish groups in the country's north, the Pentagon said. China, a permanent member of the United Nations Security Council, has in the past supported moves to ease restrictions on exports of Iraqi oil imposed shortly after Iraq invaded Kuwait in August 1990. Sino-U.S. ties have been strained in recent years by disputes over China's arch-rival Taiwan, alleged human rights abuses and nuclear proliferation by Beijing and widespread copyright piracy on the mainland. 7954 !GCAT !GDIP China rejected on Tuesday an invitation for one of its top policymakers to visit Taiwan, saying the island must first abandon its bid to break out of diplomatic isolation. "It is impossible," a spokesman for the cabinet's Taiwan Affairs Office said when asked if the office's director Wang Zhaoguo would accept the invitation from Taiwanese business leader Kao Ching-yuan. The spokesman said the time for such a visit was not ripe because Taiwan had yet decided to abandon its "pragmatic foreign policy" of trying to boost its international standing. "Taiwan...should not seek to enter the United Nations," the spokesman told Reuters by telephone. Taipei lost its seat in the United Nations when Beijing took its place in 1971. China regards Taiwan as a rebel province and insists the island is not entitled to official links with other states. If Wang had accepted and Taiwanese authorities had allowed him to visit, he would have been the most senior Chinese official to set foot on the island since the end of China's civil war in 1949. Last week, a spokesman for a delegation of Taiwanese business leaders visiting Beijing quoted Wang as saying he would be happy to visit Taiwan if he had an opportunity, but that there was no definite commitment to accept. The backpedalling by China on Tuesday indicated it was unwilling to make up with Taiwan for now, said a Chinese analyst familiar with Beijing government policy. Ties between Beijing and Taipei were strained after Taiwan's President Lee Teng-hui made a landmark visit to the United States last year in a bid to lift the island out of diplomatic isolation. China held war games and missile tests off Taiwan in a show of force in the run-up to the island's first presidential elections in March, which Lee won by a landslide. Taiwan, an island with a population of 21 million, is eager to make up with its giant neighbour, the world's most populous nation with 1.2 billion people. Last week, Taiwanese business leader Kao urged China to resume talks with Taiwan, saying the island's investors would lose confidence in China if political friction impeded ties. But China was in no hurry to mend political fences, preferring instead to continue heaping pressure on Taiwan, said the analyst, who spoke on condition of anonymity. "China is trying to use Taiwan's industrial and commercial sector to put pressure on the Taiwan authorities," he said. Last month, China stepped up pressure on Taiwan to lift a decades-old ban on direct trade and transport links between the two sides by unilaterally announcing a set of regulations for such links. Taiwan has banned direct trade, transport and mail links since 1949. Indirect trade and investment has been allowed since the late 1980s, usually through Hong Kong. Many Taiwanese businessmen, who have poured more than $20 billion into China, are eager for direct trade and transport, but Taiwan has been reluctant to remove the curbs, which it views as its last bargaining chip in talks with the communists. Last month, China called for political talks with Taiwan to end the state of hostility to pave the way for reunification. Both China and Taiwan agree to eventually reunify but on very different terms. 7955 !GCAT !GDIP !GVIO China took a stern view on Tuesday of the U.S. missile strike at Iraqi targets while Japan backed the attack, but the quickest and most volatile reaction came on Asia's markets. Indonesia, the world's most populous Moslem nation, said it would have a formal statement on Wednesday but a foreign ministry spokesman said: "We regret that the United States used violence." Apart from China, Japan and Indonesia, initial political comment from Asia-Pacific nations was generally muted, with most opting to wait for more information. But it was a different story in the growing region's markets which began moving sharply even before U.S. forces fired 27 cruise missiles at targets in southern Iraq as a warning to Baghdad to comply with Gulf War ceasefire resolutions. The most dramatic, and immediate, impact was seen in oil prices, which spiked sharply higher on the day. Iraq had been expected to resume limited oil shipments this month for the first time since 1990 but the United Nations on Sunday delayed the plan after Baghdad sent troops into Kurdish areas in northern Iraq. The dollar rose and gold inched slightly higher, but share prices fell sharply, China, only permanent Asian member of the U.N. Security Council, signalled its displeasure through foreign ministry spokesman Shen Guofang. State radio in Beijing quoted Shen as saying China had "grave concern" over the attack. "We deeply regret new tensions arising in the Gulf," he added. Hours earlier, at the regular ministry briefing, Shen urged restraint on all sides and said China felt "the territorial integrity and sovereignty of Iraq should be respected". Japanese government spokesman Kazo Watanabe told a news conference in Tokyo that "Japan basically accepts (such attacks as that by the United States) if Iraq continues its provocative attitude towards the international community". Japan understood and would appropriately support efforts to achieve the goals of the U.N. resolutions that ended the 1991 Gulf War, Prime Minister Ryutaro Hashimoto told reporters. Japan, which follows developments in the Gulf closely because of its reliance on oil from the area, contributed $13 billion to the Gulf War effort in 1991, but cited its pacifist constitution as a barrier to taking part militarily. Philippine foreign ministry spokesman Oscar Valenzuela said Manila hoped the attack would not escalate into a full-blown war. He said the government was concerned for Filipinos in Iraq but had contingency evacuation plans if necessary. Only nine migrant workers and 25 embassy employees and dependents remain in Iraq, down from a peak of 30,000 before the Gulf War. South Korea told its embassy in Jordan to watch closely and report back on Iraq developments, a foreign ministry statement said. South Korea imported about 75 percent of its crude from the Middle East in the first six months of this year. A ministry official said two South Korean employees of Hyundai Engineering and Construction, married to local women, were currently living in Baghdad. Other South Korean residents, businessmen and diplomats in Iraq left after the Gulf War. In Islamic Pakistan, where there was no immediate official comment, a religious party leader labelled the attack "open aggression". Ghafoor Ahmed, deputy chief of Pakistan's Jamaat-i-Islami party, said: "The U.S. attack on Iraq is an open aggression. If Iraq has done a wrong thing, the U.S. should not have reacted by a wrong act. The U.S. should not have acted wrongly." India, Taiwan and New Zealand were among countries which said they were monitoring the situation closely before reacting. A defence analyst at India's Centre for Policy Research, Bharat Karnad, noted that current foreign minister Inder Gujral supported Iraq when he held the same job during the Gulf War. "Then," Karnad said, "he became neutral. I imagine he'll be a little bit more dispassionate in his pronouncements and likely to be quick on the draw... "One of the troubling aspects of the attack reflects the interventionary mindset of the United States. That should create apprehensions in India. To attack the so-called pariah states and people they don"t like in this manner bodes ill for any country that may offend and cross their paths. 7956 !GCAT !GDIP !GVIO Japan said it supported the U.S. air raid on Iraq on Tuesday as a way to ensure Iraqi compliance with U.N. resolutions that ended the 1991 Gulf War. Prime Minister Ryutaro Hashimoto told reporters Japan understood the action and would give appropriate support to efforts to achieve the goals of the U.N. resolutions. Separately, government spokesman Kazo Watanabe told a news conference: "Japan basically accepts (such attacks) if Iraq continues its provocative attitude towards the international community." Formal reaction to the U.S. air strikes would come after an announcement by U.S. President Bill Clinton at the White House at about 1200 GMT, Watanabe said. Clinton sent a message to Hashimoto on Tuesday explaining U.S. policy towards Iraq, Japanese officials said, but they declined to discuss the contents. Japan was urging six Japanese nationals currently in Iraq to leave the country, a Foreign Ministry spokesman said. Five businessmen were staying at hotels in Baghdad and a woman from a Japanese volunteer group was in the northeastern town of Sulamaniya, the spokesman said. Japan's embassy in Baghdad has been closed since the Gulf War. The spokesman said the government's message would be relayed to the nationals via diplomatic channels and the organisations they work for. Prior to the start of the raids, a Foreign Ministry official said: "We are concerned about the situation in the northern part of Iraq and we hope the situation will not get worse." He declined to discuss Japanese policy in detail. Japan, which follows developments in the Gulf closely because of its reliance on oil from the area, contributed $13 billion to the U.N. Gulf War effort in 1991, but cited its pacifist constitution as a barrier to taking part militarily. Any direct participation or military support from Japan during this time would be "inconceivable", Japanese Foreign Ministry spokesman Hiroshi Hashimoto said. "Japan is not in the position to participate in military operations over there," he told a regular news briefing. Japan has contributed about $100 million to Kurdish refugees since 1991, he said. "Apart from that, what the Japanese government can do is very limited," he said. After intense debate inspired by Japan's embarrassment at its inaction in 1991, Japan in 1992 passed a law paving the way for its troops to serve overseas under the U.N. flag. Japanese troops have since engaged in logistics, infrastructure and humanitarian aid missions in Cambodia, Mozambique, Zaire and the Israeli-occupied Golan Heights. 7957 !GCAT !GDIP !GPOL The race for power in Hong Kong accelerated on Tuesday when the colony's top judge said he would compete for the job of leading the territory after the handover to China next year. Chief Justice Sir Ti Liang Yang confirmed in a statement issued by the judiciary he would stand for the post of Hong Kong's post-handover Chief Executive. His emergence as a candidate throws open what had widely been regarded as a one-candidate race, although Hong Kong's democratic lobby dismissed his nomination as a charade. Hong Kong's future Chief Executive, who will take over from British Governor Chris Patten at midnight on June 30 next year, will be chosen by a 400-member Selection Committee now being formed. China's handpicked Preparatory Committee has handed out almost 20,000 nomination forms for the Selection Committee, which is due to name the leader-designate by November. Hong Kong's democrats, who are boycotting the Selection Committee, dismissed Sir Ti Liang's candidacy as a sham. Independent democratic politician Emily Lau argued that China had already plumped for shipping tycoon Tung Che-hwa. "China feels it will look bad if there is no one to compete against Tung," she told Reuters on Monday. The democratic lobby argues that Hong Kong's post-handover leaders should be popularly elected and dismiss the Selection Committee as a rubber stamp to endorse Beijing's choice. Opinion polls, nevertherless, show the chief justice to be a more popular choice than Tung, long regarded as the frontrunner for the job. Chief Secretary Anson Chan, number two in the colonial hierarchy to Patten, routinely tops the polls, but many believe her close association with the British administration has ruled her out in Beijing's eyes. Hong Kong politicians say they believe Chinese president Jiang Zemin anointed Tung as the frontrunner when he singled him out from a roomful of prominent Hong Kong advisers in January and pointedly shook his hand. Their suspicions intensified in June when Tung resigned from Hong Kong's Executive Council, Patten's de facto inner cabinet. Tung's reticence has prompted speculation in Hong Kong his supporters were keen to nudge him into declaring his interest and planned to introduce a "stalking horse". Tung was not available for comment. Constitional expert Nihal Jayawickrama of the University of Hong Kong said that as head of the judiciary, Sir Ti Liang had no choice but to resign immediately from a job which requires independence and impartiality from politics. "The moment it is made public that he has decided to engage in politics, becoming Chief Executive is engaging in politics, he is, in my view disqualified for being the Chief Justice under the constitution," he said. The 67-year-old chief justice was on holiday in London when the announcement was made and was not available for comment. Sir Ti Liang had informed the governor of his plans, a spokesman for Patten said, but declined to comment on the chief justice's future. Sir Ti Liang's term expires at the end of February and the outgoing British administration had already planned to discuss the question of his successor with the Chief Executive-designate once he or she is confirmed to the post. 7958 !GCAT !GPOL !GREL !GVIO Moslem extremists opposing a peace pact with the Philippine government vowed on Tuesday to keep fighting for an Islamic state as Christians demanding guns paralysed this southern city in protest at the accord. Public transport drivers in Zamboanga went on strike in support of the protest by about 5,000 Christians. Schools, banks and other businesses closed hours before rebel chief Nur Misuari was to arrive in the predominantly Christian city of 500,000 people. Many streets were deserted as the strikes took hold and residents stayed at home. On nearby Jolo island, a spokesman for the extremist Abu Sayyaf group denounced Misuari as "a traitor" for signing the accord with Manila, formally ending a 24-year conflict in which more than 120,000 people were killed. "He betrayed our people," Abdulah said in a clandestine interview with local reporters. "We are here to fight until the last drop of our blood. We will push ahead with our goal of an Islamic state," he said. Misuari heads the mainstream Moro National Liberation Front (MNLF), the biggest Moslem guerrilla group in the southern Philippines. The military has described the Abu Sayyaf as the most radical of several rebel groups operating in the southern islands and blamed it for a spate of bombings, kidnappings and raids in the past three years. Abu Sayyaf has shunned any talks with Manila. The accord, viewed by many Christians as a sell-out to the Moslems, would set up a rebel-led council to supervise development of 14 southern provinces, followed by a plebiscite and regional autonomy three years later. Misuari is also running in elections on September 9 for governor of a Manila-sponsored semi-autonomous region covering four Moslem provinces. The protesting Christians marched through the city's Tetuan district, many shouting "We want guns" and "Guns, guns". Church bells tolled as an empty wooden coffin was lowered into a pit in a churchyard in Tetuan, the oldest Christian settlement in Zamboanga, and a local priest said: "We bury this symbol of our dreams and aspirations." Many of the protesters, dressed in black, wept. Local officials say Christians have started forming militias in some communities in the Zamboanga peninsula to fight the peace deal which they fear could lead to Moslem political ascendancy. The country's five million Moslems regard Mindanao as their ancestral homeland but they are now outnumbered 3-to-1 in the area by Christian settlers. On Monday night, long rows of lit candles on street sidewalks gave the city an eerie look. Misuari was to visit Zamboanga for a ceremonial re-enactment of Monday's signing of the peace accord which will be carried out in the Moslem village of Taluksangay on the city's outskirts. The military and the MNLF set up separate checkpoints on the road leading to the village. 7959 !GCAT !GDIP !GVIO China on Tuesday called for restraint from Washington and Baghdad, after the United States launched cruise missile attacks on Iraqi targets. "We hope all sides will not take action that could further aggravate the situation in that area," Foreign Ministry spokesman Shen Guofang told a regular news briefing in Beijing. "We hope all sides will restrain themselves," Shen said. The U.S. military on Tuesday launched cruise missiles at air defence targets in southern Iraq in retaliation for Iraqi military attacks against Kurdish groups in the country's north, the Pentagon said. A Western defence official in the Middle East said U.S. warships in the Gulf and B-52 bombers fired 25 to 30 missiles on military targets in southern Iraq. Shen urged restraint on all parties in the region and said Iraq's borders should be respected. "We think the territorial integrity and sovereignty of Iraq should be respected," he told reporters. China, a permanent member of the U.N. Security Council, has in the past supported moves to ease restrictions on exports of Iraqi oil. 7960 !GCAT Following is a summary of major Chinese political and business stories in leading newspapers, prepared by Reuters in Beijing. Reuters has not checked the stories and does not guarantee their accuracy. Telephone: (8610) 6532-1921. Fax: (8610) 6532-4978. - - - - PEOPLE'S DAILY China expressed grave concerns over South Africa's recognition of China and rival Taiwan, saying it would be impossible for a normal relationship if it insisted on "dual recognition". China's President Jiang Zemin thanked visiting President Teodoro Obiang Nguema Mbasogo of Equatorial Guinea for supporting the "One China" policy. Jiang also said China wanted to step up cooperation with African nations. - - - - CHINA DAILY More than 2,600 delegates from 130 countries came to Beijing to attend the 13th International Congress on Archives, which China's Premier Li Peng called an important safeguard of the state's historical records. - - - - CHINA SECURITIES The China Securities Regulatory Commission fined China Securities, one of the country's top securities brokerages, two million yuan and suspended it from underwriting business for two months for irregularities. It also fined Shengli Oil Field Daming Group Co, an A share company listed on the Shenzhen stock exchange, one million yuan for a share consolidation that violated its regulations. An editorial lashed out on irregularities in share issue and listing. - - - - FINANCIAL NEWS China tightens control of state-assets in the government's administrative units. China and Britain signed a double taxation protocol. Editorial warned of possible illegal fund-raising after the central bank's recent interest rate cuts. - - - - ECONOMIC DAILY Experts said the government should sell more houses to private individuals to push housing reforms. 7961 !GCAT Following are the main stories in Tuesday's Malaysian newspapers. NEW STRAITS TIMES - The Philippine government signed a peace pact with Moslem separatists in a glittering ceremony, formally ending 24 years of war that killed more than 125,000 people. - Czech Republic Prime Minister Vaclav Klaus will make an official visit to Malaysia for the first time from September 8 to 10 to enhance bilateral ties and strengthen trade and economic co-operation. - Malaysia's Economic Adviser to the Government Daim Zainuddin said he was optimistic the overlapping claims by Malaysia and China on the Spratly islands could be resolved through bilateral talks. STAR - Malaysia has denied allegations that it had interfered in and aggravated the conflict in Somalia through projects purportedly being planned by Malaysians there. - Unusual heavy rainfall throughout last month has been identified as the main cause of the mudslide that wiped out an aboriginal settlement last Thursday. - Three more bodies were found on Monday, bringing the total to 31 bodies recovered from the mudslide tragedy. BUSINESS TIMES - An International Monetary Fund economist sees Malaysia's economic growth moderating between seven and eight percent in the next five years. - Tenaga Nasional's new executive chairman Ahmad Tajuddin Ali is not ruling out the possibility of a management restructuring at the power utility. - Amanah Saham Wawasan 2020, Malaysia's first government-managed unit trust fund open to all ethnic groups, saw 2.1 percent of its three billion units, worth 63.27 million ringgit taken up on the first day it was open for subscription. 7962 !GCAT !GDIP !GVIO Iraq's ambassador to Indonesia said on Tuesday that Baghdad was willing to negotiate its differences peacefully with the United States. "We would like to be friends with the whole world, including the United States," Ambassador Sa'doon al-Zubaydi told Reuters in an interview. "Iraq is willing to sit with the United States to come to some agreement on how to organise our bilateral relations," he said. "We are extending the hand of friendship to all. Take it, sit with us, talk to us and see what can be done. But do not continue killing our people with sanctions." Al-Zubaydi described Tuesday's missile strike by the United States against Iraq as "vicious and unjustifiable" and called it part of a conspiracy to derail the oil-for-food agreement that Baghdad had secured from the United Nations in the summer. The deal would have allowed Baghdad limited oil sales for the first time since crippling U.N. sanctions were imposed over Iraq's 1990 invasion of Kuwait. Under the agreement, Iraq was to sell oil worth $2 billion to buy food and medicine. "The first thing we would like to do is feed our people. Hence our acceptance of this formula, which is not a very just formula. But it is something," al-Zubaydi said. "Yet the Americans are intent on seeing this formula either postponed, derailed or shelved. The paralysis of Iraq has to continue. That is their strategic objective." U.N. Secretary General Boutros-Boutros Ghali suspended the oil-for-food exchange plan on Sunday over fears for the safety of aid distribution monitors following Baghdad's military incursion into Kurd areas in northern Iraq. Al-Zubaydi said Iraq was willing to guarantee the safety of U.N. workers in the country. "But nobody can guarantee anybody's safety against U.S. Tomahawks (missiles)," he said. 7963 !GCAT !GDIP !GVIO Malaysia said on Tuesday the U.S. missile strike against Iraq was against "the principle of justice". "I don't think such reaction, particularly during the (presidential) election year in the U.S., is consistent with the principle of justice," the national news agency Bernama quoted Deputy Prime Minister Anwar Ibrahim as saying. Anwar said Malaysia opposes unilateral action by one country against another. He said the missile strike would be discussed at Wednesday's weekly cabinet meeting. The U.S. Defence Department announced on Tuesday that it had launched cruise missile strikes against air defence and communications targets in southern Iraq in retaliation for Iraqi military attacks against minority Kurds in the north. Malaysian Foreign Minister Abdullah Badawi said earlier "there were other ways to ensure (Iraqi President) Saddam Hussein complies with U.N. sanctions". "We hope the U.S. would not continue or enhance the attacks," Bernama quoted him as saying. If the missile strike was merely to help President Bill Clinton's re-election campaign, "we really regret it", Abdullah said. 7964 !GCAT !GPOL Seven Hong Kong activists tried in vain on Tuesday to reclaim their travel documents seized by Beijing during a trip to petition China not to scrap the territory's legislature when it reverts to Chinese rule next year. They made the attempt at a branch of the China Travel Service (Holdings) Hong Kong Ltd, a Beijing-owned company handling China travel documents for locals. But the staff there only told them to write to immigration officials in the Chinese boomtown of Shenzhen adjoining Hong Kong to explain what had happened, ATV news reported. The seven were among a group of eight who flew to the Chinese capital in July to peititon Beijing not to scrap the territory's legislature after London hands it over on July 1 next year. China, however, ejected them from Beijing and confiscated their travel documents. Beijing has vowed to scrap the territory's fully-elected legislature -- a result of Governor Chris Patten's political reforms which Beijing has fiercely condemned -- and replace it with an appointed provisional legislature upon the handover. 7965 !GCAT !GDIP !GPOL Hong Kong's populist Democratic Party said on Tuesday it would seek more dialogue with China after Beijing said it was welcome to join in the work on the British colony's transition to Chinese rule, Cable TV said. Party chairman Martin Lee said the camp would write to Chinese officials to reflect its views on sensitive transitional issues, including the legality of the provisional legislature which China wants to set up to replace the current elected body and the Bill of Rights. The party would write to Qian Qichen, China's Foreign Minister, Lu Ping, China's most senior Hong Kong official, and Zhou Nan, director of the Xinhua new agency which serves as China's embassy in the territory, the television station said. Hong Kong, which reverts to Beijing's rule at midnight on June 30, 1997, will become a Special Administrative Region (SAR) of China. Beijing has said it will scrap the territory's fully-elected legislature -- a result of Governor Chris Patten's political reforms which it has fiercely condemned -- and replace it with an appointed provisional legislature upon the handover. The Democratic Party, which fared the best of all political camps in last September's reformed elections to the legislature, had angered Beijing by its advocacy of democracy. China has dubbed its leaders subversives and pointedly excluded them from the Preparatory Committee, a powerful China-appointed panel preparing Hong Kong for its handover. The party also opposes China's plans to dilute the Bill of Rights here upon the handover. But China has recently toned down its rivalry against the Democrats. On Monday, China said it hoped the Democratic Party could join in the work of preparing and building the SAR, and welcomed the camp's posture and willingness to communicate with Beijing. The comment was in response to a letter from the party in mid-August seeking dialogue with Beijing after China's Qian opened the door a crack by suggesting that dissenting views would be permitted on the Selection Committee being formed to choose Hong Kong's post-handover leader and provisional legislature. 7966 !GCAT !GDIP !GPOL A handpicked China panel preparing Hong Kong for its return to Beijing's rule has proposed the shape of the territory's next legislature. China has said it will install the provisional legislature after Hong Kong reverts to Beijing's control in mid-1997 and dismantle the territory's current elected Legislative Council. Beijing's plans have been fiercely opposed by Hong Kong's government, pro-democracy activitists and legislators. The new legislature should have 60 members, mainly Chinese nationals who are Hong Kong permanent residents without rights of abode overseas, a sub-group of the Beijing-appointed Preparatory Committee proposed on Tuesday. Hong Kong permanent residents who are not Chinese nationals, or who have rights of abode abroad, can constitute no more than 20 percent of the provisional legislature's membership, it said. Candidates to the legislature must be Hong Kong permanent residents aged 18 years or over, who support the Basic Law -- Hong Kong's post-handover constitution promulgated in 1990 -- and are willing to be loyal to the SAR. Hong Kong, a British colony for more than 150 years, reverts to Beijing at midnight on June 30, 1997 and becomes a Special Administrative Region (SAR) of China. The candidates will be nominated and elected by members of the Selection Committee, a 400-member body to be formed to choose Hong Kong's post-handover leader and provisional legislature. The recommendations must still be passed in a committee meeting in October, the preparatory panel said in a statement. 7967 !E21 !E211 !ECAT !GCAT !GPOL !GVIO Philippine President Fidel Ramos on Tuesday approved a 10 billion peso ($385 million) economic package to speed up development of poor Moslem areas in line with his peace pact with Moslem rebels. The package includes a 330 million peso ($13 million) lending window to extend no-collateral loans to farmers and fishermen, a presidential palace statement said. The peace accord formally ends a 24-year conflict in the southern Philippines which killed more than 120,000 people, and calls for the setting up of a rebel-led council to supervise development of 14 provinces in the Mindanao region. It will be followed by a plebiscite and regional autonomy three years later. Rebel chieftain Nur Misuari had said the council had no money and would need aid from the government to make it work. The economic package also involves irrigation, energy, airport, livelihood and education projects. Officials said immediate implementation of the projects would "dispel lingering reservations" about the accord, which has been opposed by Mindanao Christians who fear Moslem political ascendancy in a region they dominate. Moslem extremists have also attacked Misuari for entering into the deal, calling him a traitor. The country's five million Moslem minority regard Mindanao as their ancestral homeland although they are now outnumbered three-to-one by Christian settlers. 7968 !E12 !ECAT !GCAT !GDIP !GPOL !GVOTE Britain supports Mongolia's economic reforms and welcomes the results of its recent elections, British Foreign Secretary Malcolm Rifkind said on Tuesday. "To transform the Mongolian economy from a command economy into a modern market economy is difficult," Rifkind told reporters in the Mongolian capital where he is on an official visit. "But it is, in our view, the only way to insure prosperity for the people of Mongolia in the years to come." Mongolia handed its ex-communist rulers a shock defeat in parliamentary elections on June 30. Since then, the government has announced an ambitious overhaul of its tax and welfare system and called for a rapid drive towards privatisation to help rescue the nation's struggling economy. It also liberalised energy prices, saying that the old system had squandered precious resources to the point of endangering national security. Rifkind, who met Mongolian Prime Minister M. Enkhsaikhan and President Punsalmaagiin Ochirbat on Tuesday, added that Britain would support the reforms initiated by the government since Mongolia had "demonstrated its commitment to democracy". He said Britain would extend help to build up public and government institutions according to Western standards. Rifkind said the two nations had a common desire to expand trade and London would try to encourage more investment in Mongolia by the British private sector. 7969 !GCAT !GPOL !GVIO The leader of a breakaway faction of the Khmer Rouge on Thursday will hold his highest-level meeting with the government since the Maoist group split last month, officials said on Tuesday. Ieng Sary, former Khmer Rouge foreign minister and leader of the breakaway guerrilla faction, will meet co-defence ministers Tea Banh and Tea Chamrath on Thursday to discuss national reconciliation, government officials said. The meeting will take place near Ieng Sary's Phnom Malai base, officials said, although it was not clear if it would be on the Thai or Cambodian side of the border. Ieng Sary and his group of dissidents broke away from hardline Khmer Rouge last month. Ieng Sary said he has formed a new group called the Democratic National United Movement to work for peace in Cambodia. Analysts said the talks could pave the way for co-premiers Prince Norodom Ranariddh and Hun Sen to meet Ieng Sary, who was sentenced to death in absentia for his role in the deaths of more than one million people during the 1975-79 Khmer Rouge regime, which was led by Pol Pot. Hun Sen on Monday held his first talks with senior representatives of the breakaway faction, including Ieng Sary's son Ieng Vudh, since announcing the reconciliation process in early August. Secretary of State for Information Khieu Kanharith said there were still stumbling blocks in negotiations between the government and the dissidents, who have said they want peace with Phnom Penh. One problem is the dissidents' desire to keep the government out of their territory but still be given the go ahead to set up a political party. Another is the question of what to do with Ieng Sary. Hun Sen has already said he is seeking a royal pardon for Ieng Sary, who was viewed as Pol Pot's number two. Opposition leader Sam Rainsy issued a statement late on Monday saying that while Hun Sen was conditionally ready to let Ieng Sary set up a party, the co-premier was refusing this right to Rainsy's law-abiding Khmer Nation Party (KNP). Ieng Sary's rapprochement with the government marks the most serious rift within the Maoist movement since Vietnamese troops toppled Pol Pot's regime in 1979. The guerrillas later spearheaded a resistance movement against the Vietnamese-backed Phnom Penh government before signing a U.N.-brokered peace pact in 1991. They reneged on the accord and resumed guerrilla warfare against the coalition government that emerged from U.N.-run elections in 1993. 7970 !GCAT !GDIP !GPOL !GVIO !GVOTE An Iraqi envoy in Tokyo accused U.S. President Bill Clinton on Tuesday of ordering an unjustified missile attack on his country and said the action was linked to November's U.S. presidential election. "It was totally unjustified," Muhsin M. Ali, charge d'affaires in Tokyo, told Reuters Television. Asked whether he believed the U.S. military attack was linked to the presidential election, Ali said: "Yes, sure". "I think... all the international community knows that this (U.S.) action was fabricated and it is unjustified and it was done for special purposes," he said. Washington launched missile strikes against air defence targets in southern Iraq earlier on Tuesday in retaliation for Iraqi military attacks against Kurdish groups, the Pentagon said. It said Clinton ordered the attack. "Our people stick to their principles, they love their leadership,... and we are just struggling against aggression against our people," Ali said. "We have to resist any aggression against our country," he added. 7971 !GCAT !GCRIM A 48-year-old Dutchman was sentenced on Tuesday to six years in jail and 10 strokes of the cane for smuggling Ecstasy pills, a Netherlands Embassy official said. The official said Anton Alling could have received up to 30 years jail and 15 strokes for the two charges he faced. Alling entered a plea of not guilty but declined to testify, the official said. State television quoted district judge Yap Siew Yong as saying the sentence was meant to send a clear signal that Singapore would deal harshly with people who contravened its drug laws. Driving instructor Alling, the first non-Singaporean to be convicted for smuggling the mood-enhancing drug, was charged with carrying over 2,200 Ecstasy pills packed in cigarette boxes hidden in his pockets. He was arrested on June 9 at Singapore's Changi Airport after arriving from Amsterdam. Singapore has a reputation for tough drug laws and harsh punishments. It has a mandatory death sentence for anyone over 18 years of age found guilty of trafficking in more than 15 grams (half an ounce) of heroin, 30 grams (one ounce) of morphine or 500 grams (18 oz) of cannabis or marijuana. Of the nearly 270 people hanged for various crimes in Singapore since 1975, almost half have been for drug-related offences. Caning is a punishment Singapore applies in a number of crimes. The island-republic drew international attention in 1994 when American Michael Fay, then 18, received four strokes of a rattan cane on his bare buttocks for spray-painting cars and other offences. He was originally sentenced to six strokes but that was reduced to four after United States President Bill Clinton criticised the punishment as extreme. 7972 !C11 !C24 !CCAT !E51 !E511 !ECAT !GCAT !GENV !GVIO The peace accord between the Philippine government and Moslem separatists has made the impoverished Mindanao island ripe for investment, a Philippine minister said on Tuesday. Secretary of Finance Roberto de Ocampo said the peace pact signed on Monday in Manila would allow economic development to spread in Mindanao, which is rich in natural resources but remains poverty-stricken after the bloody 24-year insurgency. "Mindanao is one island in the Philippines where natural resources have been much more preserved than on other islands. (They) continue to be vast," de Ocampo told reporters during a visit to Jakarta to attend a World Bank conference. He said infrastructure, such as an international airport at General Santos on southern Mindanao, had been put in place to take advantage of government investment incentives to promote the East ASEAN Growth Area linking the southern Philippines, Malaysia, Brunei and Indonesia. ASEAN (the Association of Southeast Asian Nations) also groups Thailand, Singapore and Vietnam. "Vast resources of gold and other precious metals can be found on Mindanao which have not been tapped before because they were inaccessible due to the insurgency," de Ocampo said. "Agro-industry could easily flourish in Mindanao because the soil is extremely fertile and it is conducive to cash crops and a variety of agriculture products because it is both fertile and not typhoon-prone," he said. "There are agricultural plains in Mindanao, even larger than the central plain on Luzon, whose potential has barely been scratched," he added. De Ocampo said there would also be opportunities for investors in urban infrastructure. "It was not wishful thinking on our part to call Mindanao for so long the land of promise because it has so many factors which give it advantages over the more known islands such as Luzon," he said. "It has just been waiting for this opportunity to buckle down to development in an environment of peace," he added. 7973 !GCAT !GDIP China and Britain have reached final agreement to swap consulates in Scotland's Edinburgh and the southern Chinese city of Guangzhou, a British minister said on Tuesday. "We have reached final agreement, through an exchange of diplomatic notes, on setting up two new consulates-general," Jeremy Hanley, Minister of State at Britain's Foreign and Commonwealth Office, told a news conference in Beijing. Agreement in principle on a Chinese consulate in Edinburgh and a British post in Guangzhou had been reached almost a year ago, Hanley said. He gave no details of when the consulates would open. Britain and China say relations have warmed in recent months, although lingering friction over the return of the British colony of Hong Kong to Beijing rule in mid-1997 continues to overshadow the relationship. 7974 !GCAT !GDIP China on Tuesday expressed grave concern and deep regret over cruise missile attacks on Iraqi targets by the United States. "We express grave concern over U.S. air attacks on Iraqi air defence targets," state radio quoted Foreign Ministry spokesman Shen Guofang as saying. "We deeply regret new tensions arising in the Gulf," Shen was quoted as saying. Hours earlier, at a regular foreign ministry briefing, Shen had urged restraint on all sides and said the territorial integrity and sovereignty of Iraq should be respected. The U.S. military on Tuesday launched cruise missiles at air defence targets in southern Iraq in retaliation for Iraqi military attacks against Kurdish groups in the country's north, the Pentagon said. Warships fired cruise missiles and B-52 bombers struck military targets in southern Iraq with air-to-ground missiles. China, a permanent member of the U.N. Security Council, has in the past supported moves to ease restrictions on exports of Iraqi oil imposed shortly after Iraq invaded Kuwait in August 1990. 7975 !C33 !C331 !CCAT !GCAT !GDEF The Thai government on Tuesday said it approved an army request to buy a remote control reconnaissance plane from Israel for $11.5 million. At its weekly meeting, the cabinet authorised the army to sign an agreement with Israel to buy a Searcher plane from Israel, the government said in a news release. It did not say when the purchase would be made. The small remote control Searcher is designed to operate without a pilot, the statement said. 7976 !GCAT !GDIP Taiwan's Foreign Minister John Chang left for an unexpected overseas destination on Tuesday, two weeks after Vice-President Lien Chan outraged China by making a secret visit to Ukraine, Taiwan television said. State-funded television said Chang flew abroad for a private visit, his first overseas trip after he took office in May. It did not say where he was going or give other details. The mass-circulation United Evening News said Chang was bound for "some country in the Asia-Pacific region with which we (Taiwan) do not have ties". Chang's office would only say he was not there and declined to deny or confirm either media report. "The minister is on leave and will be back in a few days," a Chang aide said by telephone. "We don't know (about the reports) and we have no comment." Other government officials also declined to comment. An airport source told Reuters that Chang had boarded a flight bound for the Indonesian capital of Jakarta, but it was not known if that was his final destination. That report could not be independently confirmed. Taiwan, diplomatically isolated by rival China, has no diplomatic ally in Asia and a visit by Chang to any country that recognises Beijing is certain to trigger an angry response from China's communist government. Beijing protested bitterly to Ukraine and cancelled a visit by a high-level delegation to Kiev after Taiwan's Vice-President Lien, who doubles as premier, made a secretive trip there in August to promote unofficial ties. Beijing accused the former Soviet republic of violating the "one China" commitment that it made in establishing ties with Beijing. Only 30 countries, mostly in Africa and central America, recognise Taiwan's exiled Republic of China government, which was defeated by China's communists on the mainland in 1949. Since the civil war that split them, Beijing has regarded Taiwan as a Chinese province not entitled to foreign ties. Taiwan, maintaining that its 21 million people have a right to a voice in the United Nations and other forums, has pushed to win new foreign friends and raise its international profile. 7977 !GCAT !GDIP !GPOL A British minister said on Tuesday that China had indicated it would attend ceremonies marking the transfer of power in Hong Kong next year alongside the last governor of the British territory. Jeremy Hanley, Minister of State at Britain's Foreign and Commonwealth Office, said that China's policymaker on Hong Kong Lu Ping had told him he wanted to attend the ceremonies with the British colony's Governor Chris Patten. Attendance by both parties has been an issue of contention. "I had confirmation from Lu Ping that he is looking forward to shaking the governor's hand at the handover ceremony," Hanley told reporters after meeting Lu Ping earlier on Tuesday. China and Britain have sparred over whether they would hold a joint ceremony marking the transfer of power in the colony or each mark the occasion in its own fashion. Beijing, which has been angered by Patten's drive to expand democracy in the colony ahead of the transfer of power, has tried to limit Britain's role. Under a Sino-British agreement, Hong Kong returns to Chinese rule on July 1, 1997. 7978 !GCAT !GDIP !GVIO The U.S. missile attack on Iraqi targets won support on Tuesday from Japan and brought a call for restraint from China, but the quickest and most volatile reaction came on Asia's markets. Apart from Japan and China, initial political comment from the Asia-Pacific was generally muted, with most countries opting to wait for more information. But it was a different story in the growing region's markets which began moving sharply even before U.S. forces fired 27 cruise missiles at targets in southern Iraq as a warning to Baghdad to comply with Gulf War ceasefire resolutions. The most dramatic, and immediate, impact was seen in oil prices, which spiked sharply higher on the day. Iraq had been expected to resume limited oil shipments this month for the first time since 1990 but the United Nations on Sunday delayed the plan after Baghdad sent troops into Kurdish areas in northern Iraq. The dollar rose and gold inched slightly higher, but share prices fell sharply, Japanese government spokesman Kazo Watanabe told a news conference in Tokyo that "Japan basically accepts (such attacks as that by the United States) if Iraq continues its provocative attitude towards the international community". Japan understood and would appropriately support efforts to achieve the goals of the U.N. resolutions that ended the 1991 Gulf War, Prime Minister Ryutaro Hashimoto told reporters. Japan, which follows developments in the Gulf closely because of its reliance on oil from the area, contributed $13 billion to the Gulf War effort in 1991, but cited its pacifist constitution as a barrier to taking part militarily. In Beijing, Chinese foreign ministry spokesman Shen Guofang said: "We hope all sides will not take action that could further aggravate the situation in that area." Shen urged restraint and said: "We think the territorial integrity and sovereignty of Iraq should be respected." Philippine foreign ministry spokesman Oscar Valenzuela said Manila hoped the attack would not escalate into a full-blown war. He said the government was concerned for Filipinos in Iraq but had contingency evacuation plans if necessary. Only nine migrant workers and 25 embassy employees and dependents remain in Iraq, down from a peak of 30,000 before the Gulf War. South Korea told its embassy in Jordan to watch closely and report back on Iraq developments, a foreign ministry statement said. South Korea imported about 75 percent of its crude from the Middle East in the first six months of this year. A ministry official said two South Korean employees of Hyundai Engineering and Construction, married to local women, were currently living in Baghdad. Other South Korean residents, businessmen and diplomats in Iraq left after the Gulf War. In Islamic Pakistan, where there was no immediate official comment, a religious party leader labelled the attack "open aggression". Ghafoor Ahmed, deputy chief of Pakistan's Jamaat-i-Islami party, said: "The U.S. attack on Iraq is an open aggression. If Iraq has done a wrong thing, the U.S. should not have reacted by a wrong act. The U.S. should not have acted wrongly." India, Taiwan and New Zealand were among countries which said they were monitoring the situation closely before reacting. A defence analyst at India's Centre for Policy Research, Bharat Karnad, noted that current foreign minister Inder Gujral supported Iraq when he held the same job during the Gulf War. "Then," Karnad said, "he became neutral. I imagine he'll be a little bit more dispassionate in his pronouncements and likely to be quick on the draw... "One of the troubling aspects of the attack reflects the interventionary mindset of the United States. That should create apprehensions in India. To attack the so-called pariah states and people they don"t like in this manner bodes ill for any country that may offend and cross their paths. 7979 !GCAT !GDIS !GENV Almost 400 people have died in tropical storms and flooding in northern Vietnam since the start of July, the International Federation of the Red Cross and Red Crescent Societies said on Tuesday. Jon Valfells, the Federation's information officer, told Reuters that so far close to half of the $617,000 it was seeking in aid for 90,000 people had been pledged. He said the typhoons Frankies and Niki, tropical storms and flash flooding caused by torrential rains had killed 394 people, seriously affected 262,787 households and caused $362 million worth of damage. The official Vietnam News Agency said on Saturday that 317 people had died, 59 more than the toll given a week earlier, and put the number still missing at 150. Vietnam suffers from a string of floods and storms every year, most between July and October, but the damage to northern areas of the country this year has been particularly acute. Local residents say it was the worst in 25 years. Valfells said one of the worst-hit areas was the remote and mountainous province of Lai Chau, where 76 people had died in one village alone. The official Communist Party daily Nhan Dan said local authorities in Thanh Hoa province had failed to give sufficient warnings to fishermen, about 35 of whom died when a whirlwind storm tore through a fleet of wooden vessels on August 14. The paper was also critical of the rescue operation, saying that fishermen who had survived the onset of storm had died because they were not picked up from the sea. Tu Mao, head of the Agriculture Ministry's anti-flood and dyke management committee, defended his department's action in an unusually probing interview with the Tuoi Tre newspaper. He said responsibility for accidents at sea belonged to the Fisheries Ministry and added that although his committee had previously held a conference on flash flooding in Lai Chau, it was up to local authorities to evacuate residents before storms hit. Separately, VNA said a team of four Dutch dyke experts would arrive in the northern Red River delta area soon to help emergency dyke repairs and make preparations for future storms. 7980 !C13 !CCAT !E51 !E512 !ECAT !GCAT !GDIP A Taiwan shipping executive on Tuesday said Taiwan and China would hold private talks on the island's shipping links with Hong Kong after its mid-1997 return to Chinese rule and on proposed links with China itself. Lin Hsing-shan, chairman of shipping giant Evergreen Marine and head of the Taiwan Strait Shipping Association, said in a statement that the meeting would take place "as soon as possible" but gave no date. The private association was set up by local shipping firms in August to try to end Nationalist-ruled Taiwan's 47-year-old ban on direct transport links with the communist mainland. The talks would focus on the status of shipping links between Taiwan and Hong Kong after the British colony's mid-1997 handover to Chinese sovereignty, Lin said. He denied local media reports that the talks were mainly aimed at discussing direct Taiwan-China links. "Taiwan-Hong Kong links are the more pressing problem and businessmen of both sides want to hold talks as soon as possible," Lin's statement said. "Since both sides (Taiwan and China) would benefit from resolving the problem of Taiwan-Hong Kong links, I am confident that we can reach an agreement by the end of this year." Local newspapers said the meeting would take place in Hong Kong in October. Lin returned to Taipei on Monday from China after meeting senior mainland transport officials and shipping executives. He told reporters the atmosphere was good during his China visit and that Chinese authorities reiterated their view that Taiwan links should be established as soon as possible. To fulfil its ambition of becoming a regional hub, Taiwan proposed in 1995 to set up an offshore transshipment centre at its southern Kaohsiung port from which ships would be allowed to sail directly across the Taiwan Strait. The project has been delayed by sovereignty issues. On August 20, China unveiled rules governing direct shipping links across the Strait, effective immediately, but Taiwan gave a cool response, saying Beijing's rules were "mingled with sensitive political issues". China's rules allow wholly Chinese-owned or Taiwan-owned shipping companies or joint ventures involving Chinese or Taiwanese shipowners to sail between the two sides. Taiwan insists on the transshipment centre scheme, which would allow only transshipment of mainland and third-country cargoes, not those from Taiwan itself. Taiwan has banned direct air and shipping links with China since Chiang Kai-shek's Nationalists lost the civil war to the communists and fled to the island in 1949. With tensions easing since the late 1980s, civilian aircraft and vessels have skirted the ban by stopping over in Hong Kong, Macau or elsewhere. Taiwan investors, who have poured more than $20 billion into China, have pressured the Taiwan government to establish such links to save transport costs. 7981 !E51 !E512 !ECAT !GCAT !GDIP Beijing rejected on Tuesday an invitation for one of China's top policymakers to visit the island, saying Taipei must first abandon its bid to break out of diplomatic isolation. "It is impossible," a spokesman for the Taiwan Affairs Office of the State Council, or cabinet, said when asked if Wang Zhaoguo, director of the office, would accept the invitation from Taiwanese business leader Kao Ching-yuan. The spokesman said the time for such a visit was not ripe because Taiwan had yet to abandon its "pragmatic foreign policy" of trying to break out of diplomatic isolation. "Taiwan...should not seek to enter the United Nations," the spokesman told Reuters by telephone. Beijing replaced Taipei in the United Nations in 1971. China regards Taiwan as a rebel province and insists the island is not entitled to official links with other states. If Wang had accepted and Taiwanese authorities had allowed him to visit, he would have been the most senior Chinese official to set foot on the island since the end of China's civil war in 1949. Last week, a spokesman for a delegation of Taiwanese business leaders visiting Beijing quoted Wang as saying he would be happy to visit Taiwan if he had an opportunity, but that there was no definite commitment to accept. China has stepped up pressure on Taiwan in recent years to lift a decades-old ban on direct trade and transport links between the two sides. Last month Beijing unilaterally announced a set of regulations to pave the way for direct links. Taiwan has banned direct trade, transport and mail links since 1949. Indirect trade and investment has been allowed since the late 1980s, usually through Hong Kong. Many Taiwanese businessmen, who have poured more than $20 billion into China, are eager for direct trade and transport, but Taiwan has been reluctant to remove the curbs, which it views as its last bargaining chip in talks with the communists. 7982 !E41 !E411 !ECAT !GCAT !GJOB China on Tuesday told thousands of unemployed in Shanghai to swallow their pride and work in a profession scorned during 47 years of Communist rule -- domestic help. Hundreds of ailing state firms, especially ones making textiles, instruments and electronics, are closing or cutting production, releasing tens of thousands of workers on to the job market. The People's Daily on Tuesday put the number of those out of work or laid off in Shanghai at "several hundreds of thousands". They compete for jobs with about two million migrant workers from outside the city who work up to 15 hours a day, without holidays. Of 4.5 million households in Shanghai, just five percent employ domestic helpers, nearly all from outside the city. But many households consist of couples who both work, which amounts to a huge potential market, the newspaper said. "Domestic help is a new route for solving the re-employment problem of laid-off women," it said. "You only need to open your mind, get active guidance and a new job is at your side." Domestic service, widespread among rich and middle class families in Shanghai before the 1949 Communist revolution, was actively discouraged by the new rulers as "bourgeois". Workers in Shanghai, China's biggest industrial city, are suffering the brunt of widespread restructuring, with the closure of antiquated plants whose products cannot compete with those of newer and better-run joint venture plants and township factories. Shanghai has set up more than 100 "re-employment service centres" to help find new jobs for the unemployed. Worst off are unskilled people over 35 with only a middle school education. "I was laid off two months ago from a textile factory," said a woman named Liu at one of the centres. "I am healthy and willing to do any job but I am 47. Many employers think this is too old. Shops, restaurants and night clubs want young, pretty women." She received 220 yuan ($26.50) a month from her factory as a subsistence allowance, she said on Tuesday. Men waiting on the street outside the centre were in an angrier mood. "I have been out of work for five years," said a man in his 50s. "And my work-unit has now gone out of existence so I get no monthly allowance or medical benefits. I rely on my family. "I work sometimes on the street selling household goods but get harassed by the police," he said. "It is very hard for us to compete with migrant labourers who work all day and never take a holiday," said a man in his 20s who said he had been out of work for a year. "Don't believe what you read in the newspapers. There are no jobs for us." Shanghai has been singled out as a pioneer in setting up re-employment centres. A front-page story on Saturday in the People's Daily, the Communist Party's mouthpiece, praised Shanghai, saying that 12 textile plants in the city planned to go bankrupt in 1995 but did not because they could not find anywhere for the workers to go. Thanks to the centres, the 12 were now in the process of bankruptcy, reducing the debts of the Textile Holding Company that owns them, it said. Of the 22,400 workers in the 12 plants, 6,970 had chosen to retire early or find their own jobs, while the rest are being found new jobs through the centres, it said. ($1=8.3 yuan) 7983 !E51 !E512 !ECAT !GCAT !GDIP An Australian business delegation led by the country's energy minister arrives in Taiwan on Wednesday for a three-day business forum, a trip which Beijing has described as unacceptable. Minister for Primary Industries and Energy John Anderson and executives from some 120 Australian firms are scheduled to attend. Beijing, which has viewed Taiwan as a renegade province since a civil war split them in 1949, last month described Anderson's visit as unacceptable. China objects to contacts between its diplomatic partners, including Australia, and Taipei. The forum will focus on cooperation in agriculture, minerals, energy commodities, food, telecommunications and transportation. Taiwan is Australia's sixth largest export market, with exports totalling A$3.3 billion in 1995, according to Australia's trade office in Taipei. Business contacts between Taiwan and Australia increased in 1996 after Taiwan's An Feng group landed a major project to build a slab mill in Western Australia. In August, Australia's conservative government said it was considering selling uranium to Taiwan -- a move diplomats said risked straining already tense relations with Beijing. 7984 !GCAT !GCRIM !GPOL Hong Kong's top judge said he would accept nomination as a candidate to be the first chief executive of the territory after its handover to China, the judiciary said in a statement on Tuesday. The statement said a decision would be taken on Chief Justice Sir Ti Liang Yang's future as the head of the judiciary only when the nomination was formally lodged with China's Selection Committee. Hong Kong's next leader, who will take over from Governor Chris Patten at midnight on June 30 next year, will be chosen by a 400-member Selection Committee now being formed. Nominations to the Selection Committee close on September 14 and the chief executive-designate is due to be named by November. 7985 !C12 !C13 !CCAT !GCAT !GCRIM !M11 !MCAT China's top securities watchdog has fined a listed firm and suspended the underwriting rights of a top brokerage for colluding to cover up an illegal share consolidation, an official newspaper said on Tuesday. The China Securities Regulatory Commission (CSRC) also fined an accounting firm and a law office for involvement in the case, one of the first of its kind since China's stock markets were revived in 1990, the China Securities newspaper said. Shenzhen-listed Shengli Oil Field Daming Group Co was fined one million yuan ($120,500) for an illegal share consolidation aimed at gaining approval for the company to list shares in June this year. A CSRC investigation found that the company, which engages in oil exploration, had deliberately concealed the fact that it had reduced its outstanding shares to 48 million shares from 120 million in its prospectus and listing statement. Shanghai brokers said the case was the result of the stock market quota system under which Beijing each year allows each province to authorise the issue of a certain number of shares for listing on either the Shanghai or Shenzhen stock exchanges. Companies compete fiercely for the share quotas, and the provinces consider the number of shares currently issued by companies before allocating quotas. Some companies such as Shengli Daming have tried to improve their chance of winning quotas by reducing their outstanding shares through a share consolidation. Companies with large volumes of outstanding stock would be less likely to gain permission to list further shares. This prompted the CSRC to issue an urgent notice earlier this year which warned that any such consolidation must be approved by the central government. "Shengli Daming supplied fake documents, deliberately hiding the share consolidation," the newspaper quoted a CSRC statement as saying. "This is a serious irregularity. It has caused losses for investors and created a bad influence on society." The CSRC fined China Securities, one of the country's biggest securities brokerages, two million yuan and suspended its underwriting business for two months from July 5 for its involvement in the affair, the statement said. The securities watchdog ordered all the companies involved to find the staff responsible and report them, it said. "Shengli Daming fooled investors to gain a listing," said an angry editorial by the China Securities newspaper. "More significantly, the false act was not done by the company alone, but jointly with middlemen, making it an even bigger deception." Shanghai brokers welcomed the CSRC move, with many applauding the watchdog for acting quickly to prevent further losses for investors. "This time, the irregularites have been punished swiftly, indicating that the securities authorities have become more and more determined to regulate the market," said Xu Zhiling, a senior stock analyst with China Guotai Securities. "In the past, there were cases in which the companies and others involved were just given warnings, but lenience simply encouraged violation," he added. The newspaper urged more exposure and punishment for violators and prosecution of those breaching the law. ($1=8.3 yuan) 7986 !E51 !E512 !ECAT !GCAT !GDIP Beijing on Tuesday rejected an invitation by a Taiwanese business leader for one of China's top policymakers to visit the island. "It is impossible," a spokesman for the Taiwan Affairs Office of the State Council, or cabinet, said when asked if Wang Zhaoguo, director of the office, would accept the invitation from Taiwanese business leader Kao Ching-yuan. The spokesman said the timing for a visit was not ripe because Taiwan had yet to abandon its "pragmatic foreign policy" to break out of diplomatic isolation. China regards Taiwan as a rebel province and insists the island is not entitled to official links with other states. If Wang had accepted and Taiwanese authorities allowed him to visit, he would have been the most senior Chinese official to set foot on the island since the end of China's civil war in 1949. Kao, the Taiwanese business leader, is head of a delegation of nearly 80 Taiwanese businessmen, economists and officials, who arrived in Beijing last Tuesday for a 12-day visit. 7987 !GCAT !GDIP Chinese leaders have thanked Equatorial Guinea for its diplomatic support and its refusal to develop official relations with Taiwan, state media said on Tuesday. Chinese President Jiang Zemin told visiting Equatorial Guinean President Teodoro Obiang Nguema that China was grateful for his "One China" policy of recognising only Beijing, the official China Daily newspaper said. "Jiang thanked Equatorial Guinea for...not developing official relations with Taiwan," the Xinhua news agency said in a separate report late on Monday. China would provide aid to the tiny West African nation and had the capacity to boost its economic construction, China Daily quoted Jiang as saying. Communist Beijing and Nationalist-ruled Taipei, rivals since the Chinese civil war ended in 1949, have long competed for the recognition of African nations in a diplomatic tug-of-war using aid packages and economic support. Beijing sees its African allies as providing vital votes in international forums such as the United Nations to block attempts by Taiwan, which China considers a rebel province, to break out of its diplomatic isolation. China on Monday dismissed hopes expressed by South African President Nelson Mandela for relations with both Beijing and Taipei, saying it was impossible for Pretoria to develop ties with China as long as it had diplomatic relations with Taiwan. 7988 !C12 !CCAT !E11 !ECAT !GCAT !GCRIM China's recent interest rate cuts were likely to provide new opportunities for unauthorised fund raising schemes, the Financial News said on Tuesday. The newspaper said that some firms were offering interest of around 20 percent on illegally collected funds compared with bank interest of 7.47 percent earned on one-year fixed deposits. The central bank has cut interest rates twice in less than four months. The most recent cut on August 23 trimmed interest on bank deposits by an average of 1.5 percentage points. "After the rate cut, fund-raisers will lure large numbers of people through higher interest rates," the newspaper said in an editorial. Many small-sized firms outside big cities were having difficulty getting bank loans and faced capital shortages, it said. China's state banks have increased financial support to state firms, but loans were made chiefly to selected large-sized state entreprises mainly in big cities. The rate cut would allow smaller firms without access to official credits to raise funds through unofficial channels to make up for their credit shortfalls. It did not give details, although it said such illegal fund-raising hurt state banks and could affect social stability. 7989 !GCAT !GDIP !GPOL China on Tuesday slammed Washington for pursuing a policy of "human rights diplomacy" that was sabotaging Sino-U.S. ties and cultivating mistrust. The China Daily newspaper said there were currently no prospects of a breakthrough in long-running disputes over China's human rights record that were hampering relations. "U.S. human rights diplomacy is sabotaging the foundation of normal cooperation between the two countries and is cultivating mistrust," the English-language newspaper said in a signed commentary. "Such U.S. human rights diplomacy has impeded Sino-U.S. ties." It said sensationalised human rights issues such as reports of repression in Tibet, the abuse of orphans and sales of organs from condemned prisoners had been used by Washington, which was following a policy of "containment" against Beijing. "Out of self interest, the United States began to exploit human rights issues and contain China," it said. "To defile China, the United States has not stopped publicly attacking China's human rights record." Washington rejects any suggestion it is pursuing a policy of containment of China, saying economic and political engagement with Beijing is the best way to push for protection of human rights. Sino-U.S. differences over Beijing's treatment of political detainees and separatists in its restive Tibetan and northwestern Xinjiang regions have been overshadowed this year by disputes over trade, copyright piracy and Taiwan. In June, the two sides narrowly averted a multi-billion dollar trade war over intellectual property theft in China. Chinese missile tests off the coast of Beijing's arch-rival Taiwan in March prompted Washington to send two aircraft carrier battle groups to monitor the region. Alleged sales of Chinese nuclear technology to Pakistan and Beijing's big trade surplus with the United States have also strained ties. Both sides hailed a July visit to Beijing by U.S. national security adviser Anthony Lake as having warmed relations and increased mutual trust, but analysts say ties between the two Pacific powers are unlikely to remain smooth for long. This year's U.S. presidential election would probably make the White House's policies toward China more ambiguous, the China Daily said. "Sino-U.S. relations will likely be characterised by conjecture and sounding each other out -- encouraging distrust," it said. 7990 !GCAT !GPOL !GVOTE The race to become Hong Kong's first post-colonial leader moved up a gear on Tuesday when an influential pro-Beijing adviser said he had the go-ahead to nominate the colony's top judge for the job. Veteran adviser Xu Simin told Hong Kong reporters in Beijing he would nominate the judge, Chief Justice Sir Ti Liang Yang, later on Tuesday. Hong Kong newspapers said Yang had already declared his interest and wanted to stand down early from his post as head of the judiciary. The chief executive, who will take over from Governor Chris Patten at midnight on June 30 next year, will be chosen by a 400-member Selection Committee now being formed. China's handpicked Preparatory Committee has handed out almost 20,000 nomination forms for the Selection Committee, due to name the leader-designate by November. Newspapers said the 67-year-old Chief Justice had informed Patten on Monday that he planned to accept the nomination and wanted to cut short his term of office, which ends next March. A spokesman for Patten confirmed the Governor had spoken to Yang but declined to elaborate. "The Chief Justice has been in contact with the Governor following these reports," the spokesman said. "He has indicated that he intends to clarify the position soon. Until he has done so, I have nothing further to add." Yang is on holiday overseas. Patten returned from a summer break in Europe on Sunday. Opinion polls show Yang to be a more popular choice than shipping tycoon Tung Chee-hwa, long regarded as the front-runner for the job. Both Tung and Yang, however, lag far behind Hong Kong's top civil servant in the popularity stakes. Chief Secretary Anson Chan, who is number two in the colonial hierarchy to Patten, routinely tops the polls, but many believe her close association with the British administration has ruled her out in Beijing's eyes. 7991 !GCAT !GDIP !GVIO The United States fired 27 cruise missiles at military targets in Iraq Tuesday in retaliation for its capture of a rebel Kurdish city, but an unbowed President Saddam Hussein vowed to fight back. Washington, receiving a mixed international response, portrayed its reprisal for Saddam's weekend attack on the northern Iraq city of Arbil as a deterrent to Iraqi aggression against its neighbors. President Clinton said a U.N. plan for Iraq to sell oil to buy food and medicine could not proceed at present and announced the expansion of a no-fly zone for Iraqi aircraft in southern Iraq to the outskirts of the Iraqi capital. "This will deny Saddam control of Iraqi air space from the Kuwaiti border to the southern suburbs of Baghdad," Clinton said in a statement from the White House. "It significantly restricts Iraq's ability to conduct offensive operations." The U.N. Security Council, meanwhile, made no change Tuesday to stiff economic sanctions, including the ban on oil sales, imposed on Iraq since its 1990 invasion of Kuwait. The decision, made during a routine review, was not directly related to Iraq's weekend assault. Saddam, in a speech soon after the attacks that Iraq said killed five people and wounded 19, urged his air force to attack U.S. and allied planes policing the Western-imposed air exclusion zones in the south and north of his country. "You men of our air defense and falcons of the skies, consider from now their damned imaginary lines north of the 36th parallel and south of the 32nd parallel non-existent," said Saddam, appearing on television in his field marshal's uniform. "Hit back with capability and efficiency, relying on God, the Almighty, at any hostile plane the aggressors fly to violate the airspace of your great country throughout Iraq from now and in future." The U.S. attack sent oil prices soaring to post-Gulf War highs but by late Tuesday had settled back, nearly unchanged on the day as traders saw little effect for markets beyond the continued absence of Iraqi oil. But in Iraq, the attack and fading prospect of oil exports sent the dinar plummeting to 1,750 from 1,250 dinars to the dollar before recovering to 1,500. The state Iraqi News Agency said Iraqis took to the streets to denounce the U.S. strikes. "We must make it clear that reckless acts have consequences or those acts will increase," Clinton said. " ... Our objectives are limited but clear: to make Saddam pay a price for the latest act of brutality, reducing his ability to threaten his neighbors and America's interests." Defense Secretary William Perry said Iraq's action in driving one Kurdish faction from Arbil and installing its Kurdish allies posed a "clear and present danger" to neighboring countries and the flow of oil. He said the United States reserved the right to take further action. The United States said its attacks were "effective" but did not have a final assessment. Washington denied Iraqi claims it had destroyed many of the approaching cruise missiles. In the north of Iraq, aid workers headed north from Arbil toward the Turkish border in the wake of the Iraqi attack and the U.S. reprisal. The White House had said there was evidence that some Iraqi forces were "penetrating deeper" into northern Iraq and threatened Sulaimaniya, administrative capital of the Kurdish opposition. But Deputy Prime Minister Tareq Aziz said after Saddam spoke that Baghdad would complete a withdrawal from the Kurdish north Tuesday and denied reports Iraq was massing forces close to Sulaimaniya. In Baghdad, Saddam chaired a meeting of Iraq's ruling body to discuss "details of the unjust U.S. aggression" and it took a number of unspecified decisions in response to the missile attack. The Iraqi news agency INA quoted a spokesman for the Revolution Command Council meeting as strongly criticizing the U.S. decision for freezing the oil-for-food deal. "The U.S. is behaving as if it is the decision-maker in the U.N. Security Council and it is the one who launches aggression under the council's resolutions," he said. The U.N. Security Council's decision to make no change to sanctions was not unexpected. Even without Iraq's lunge into Kurdish-held territory, the council would still have retained the embargo intact. The White House believes Saddam sent three tank divisions composed of 30,000-40,000 elite Republican Guards into northern Iraq to help the Kurdistan Democratic Party (KPD), involved in a bloody power struggle with another Kurdish group with links to Iran, the Patriotic Union of Kurdistan (PUK). The U.S. attack was one of the largest on Iraq since the end of the Gulf War, when a U.S.-led coalition drove Iraq from Kuwait in 1991. B-52 bombers and American warships in the Gulf unleashed the 27 cruise missiles at about 15 targets identified as air defense radars, missile sites and command and communication centres near several areas in southern Iraq. Washington says U.N. Security Council resolutions approved after the Gulf War provide the legal basis for its attack but Aziz said the action violated international law. The international reaction also showed uncertainty over the legality, a contrast to the near universal backing Washington gained when Saddam invaded Kuwait in 1990. While Germany and Britain endorsed the U.S. action, France was silent and Russia called it "inappropriate and unacceptable." Countries of the region, even traditional enemies of Saddam, expressed deep unease. Ordinary Iraqis in Baghdad, languishing under sanctions, seemed unconcerned about missile strikes but were dismayed the oil-for-food deal had been scuttled, at least for a while. "Tell me whether oil will flow or not. I have not seen the missiles and I am not interested to hear about them. Twenty or 30 missiles will scare nobody," said Fa'ik Alaf. 7992 !E51 !E512 !ECAT !GCAT !GDIP !GVIO Iraqis in Baghdad were more concerned on Tuesday about the fate of their country's oil-for-food deal with the United Nations than U.S. cruise missile strikes against targets in southern Iraq. Shop owners and traders debated what would happen to the economy if the deal, allowing Iraq's crude exports worth $2 billion over six months, was called off indefinitely. U.S. President Bill Clinton said after the attacks, made in response to Iraq's military incursion into Kurdish-held northern Iraq, that the oil-for-food deal could not proceed under the current circumstances. Iraq's local currency, the dinar, tumbled to around 1,750 to the dollar in late afternoon trading, down from 1,250 early in the morning. Money changers said it closed the day at about 1,500. "Prices will inevitably soar and that is the price ordinary people will pay and the number of beggars at roundabouts will increase. That's what worries everybody and not showers of missiles," said one resident. "Who cares about cruise rockets. They could have cost America more than the damage they inflicted on the ground. We are worried about inflation and value of our currency," said a trader. "Tell me whether oil will flow or not. I have not seen the missiles and I am not interested to hear about them. Twenty or 30 missiles will scare nobody," said Fa'ik Alaf. Iraqis had warmly welcomed the deal which allows it to buy humanitarian supplies for Iraqis suffering under sanctions imposed for Iraq's invasion of Kuwait in 1990. The start of talks with the U.N. on how to put it into action early in the year sent tens of thousands of people dancing and singing in the streets of Baghdad. The dinar rose sharply against the U.S. dollar on the oil deal. It rose to about 1,000 from approximately 3,000 prior to the start of oil talks in February. But the festive mood was over on Tuesday and many Iraqis said they were disappointed to see that what used to be a purely humanitarian offer by the U.N. turn into a pawn in politicians' hands. Some said they were not aware of any air sirens or anti- aircraft fire. "I only heard about the American strike from the radio and I am not interested," said a woman vendor selling cigarettes on the side of a Baghdad thoroughfare. "I have six children and as a government employee my monthly salary is worth two chickens. We have been anxiously waiting for the oil to flow to get the food...It has become clear that America does not care about the suffering of the Iraqi people otherwise it would not link the oil-for-food plan to political differences with our government," said a civil servant. Life went on as normal in Baghdad on Tuesday. Several people interviewed by Reuters cursed President Bill Clinton for linking the oil deal with U.S. interests and policies in the region and said U.S. cruise missiles would not scare their government. "Whatever America does it will be nothing in comparison to what it did in the war over Kuwait. Their (Americans') sabre- rattling finds more hearing at home," said a taxi driver on his way to the northern city of Kirkuk. 7993 !GCAT !GDIP !GVIO The Arab world's reaction to United States cruise missile attacks on Iraq on Tuesday was mixed, with some countries saying the strikes violated Iraq's sovereignty and raised tension in the Middle East. Most Gulf Arab states, including Washington's biggest regional ally Saudi Arabia, did not react officially hours after U.S navy ships and B-52 bombers fired 27 missiles at targets in southern Iraq in response to Iraqi attacks on Kurds in the north. Egypt and Jordan were concerned the action could spawn further violence, while Syria and Libya condemned the attacks, one of the U.S's biggest military strikes on Iraq since the 1991 Gulf war. "The bombing of targets in Iraq this morning constitutes a threat to the unity of Iraq and its regional safety and increases the suffering of the Iraqi people," a Syrian foreign ministry spokesman said. "It contradicts the United Nations charter and international laws which protect the unity and sovereignty of countries and reject the interference in internal affairs." The official Libyan news agency JANA quoted (Pan-Arab) Unity Affairs Jomaa al-Fezzani as saying: "The American aggression against Iraq constitutes an infringement to an Arab country's sovereignty and an interference in its internal affairs." An Iraqi army spokesman said five people were killed and 19 wounded - including civilians - in the U.S. missile strike. U.S. Defence Secretary William Perry said Iraq's military actions posed a "clear and present danger" to the region. Kuwait, Iraq's small southern neighbour occupied by Baghdad in 1990-91, expressed "full understanding" for the attack, the official news agency KUNA said. "Kuwait reaffirms the necessity of Iraq's full compliance with all international resolutions to ensure peace and stability in the region," a cabinet statement said. Analysts in the Gulf region said some Gulf Arab states would find it difficult to support cruise missile attacks against their Gulf War enemy Iraq by their main ally the U.S.. "It is difficult to justify this attack to our peoples," said one, stressing that "ordinary Gulf citizens are surprised and there is no justification for the attack". But Kuwaitis were happy with the attack and said they wanted to see President Saddam Hussein toppled. The Cairo-based Arab league -- which groups all 22 Arab countries but does not always reflect unified policies of its members -- said the attack contradicted international law. "The Arab League Secretary General, Esmat Abdel-Meguid, deeply renounced the attack, which does not rely upon any international legitimacy," it said in a statement. "It is thus considered an infringement of an Arab country's sovereignty...and an interference in its internal affairs." "The use of military force will lead only to more aggravation in the situation and expose the region to factors of tension and instability," it added. Egypt and Jordan expressed concern. "We are all concerned about the situation in Iraq," Egyptian Foreign Minister Amr Moussa said. "The use of force, for example what took place in north Iraq, in southern Iraq for that matter, will further aggravate the situation." "Jordan is following with concern the latest escalation in the situation and the military operations which might return Iraq to the cycle of violence and counter-violence," Information Minister Marwan Muasher told reporters. Jordan's Islamist-led opposition deputies, in a show of solidarity, met the Iraqi envoy to denounce the U.S. attack. Palestinian officials condemned the attack as unjustified and said Iraq was entitled to protect its borders. Two radical Palestinian groups accused Washington of playing the role of an international policeman. 7994 !GCAT !GDIP !GVIO Kurdish leader Jalal Talabani on Tuesday welcomed U.S. missile strikes against Iraqi military targets, but said they had so far failed to deter tank and artillery movements toward his rebel positions. "Forty Iraqi tanks, as well as artillery, moved from Qushtapa toward Bustaneh about one hour ago. Their advance has been stopped by the peshmerga (guerrilla) resistance," Talabani told Reuters from his Iraqi Kurdistan stronghold of Sulaymaniya, more than 100 km (60 miles) to the southeast. He said the Iraqi troop movements came shortly after 25-30 U.S. cruise missiles were launched against military targets in southern Iraq -- approximately 1000 km (600 miles) away from the Kurdish-held north. Talabani, whose Patriotic Union of Kurdistan was ousted from the Kurdish city of Arbil by Iraqi forces at the weekend, said he expected further U.S. attacks should Baghdad not withdraw from the area at once. "This is just the hors d'oeuvre of the conflict," he said of the U.S. strike. "This is not the main course. "We thank President (Bill) Clinton for his brave humanitarian action against the Iraqi leadership in the only langauge (Iraqi President) Saddam Hussein understands. "I sent him a telegram of congratualtions," Talabani said. Talabani later told French radio station France Info in Paris that Iraqi forces were still present in and around Arbil and there were indications they were preparing to attack Sulaymaniya near the Iranian border. Talabani described the rival Patriotic Union of Kurdistan and its leader Massoud Barzani as "traitors to the Kurdish cause, mercenaries of Saddam Hussein." Talabani denied he was backed by Iran. "That is not true, that is propaganda put out by Iraq and its fascist regime. I don't want any Iranian intervention in our domestic affairs." Talabani condemned France's failure to back the U.S. action, saying Paris had "betrayed its promises and its commitments." 7995 !GCAT !GVIO The United States on Tuesday launched one of the biggest military strikes against Iraq since the Gulf War, firing 27 cruise missiles at targets in southern Iraq in response to Iraqi attacks on Kurds in the north. Iraq said five people were killed and 19 wounded. President Saddam Hussein responded in a defiant speech by urging his air force to attack U.S. and allied planes policing Western-imposed air exclusion zones in the south and north of his country, and said many cruise missiles were shot down. In Washington, U.S. President Bill Clinton said the United States was extending a no-fly zone in southern Iraq to "southern suburbs" of the Iraqi capital Baghdad and taking other steps in retaliation for Iraq's military move against Kurds. "First, we are extending the no-fly zone in southern Iraq. This will deny Saddam control of Iraqi air space from the Kuwaiti border to the southern suburbs of Baghdad," Clinton said in a statement from the White House. "It significantly restricts Iraq's ability to conduct offensive operations." He also said a United Nations plan to allow Iraq to sell oil to raise hard currency to buy food and medicines could not proceed under the current circumstances. Oil prices soared to post-Gulf War highs, jumping to $23.95 a barrel in New York. The missile attacks, along with fears of higher interest rates, also rattled Wall Street and other stock markets although prices later recovered ground. "We must make it clear that reckless acts have consequences or those acts will increase," Clinton said. " ... Our objectives are limited but clear: to make Saddam pay a price for the latest act of brutality, reducing his ability to threaten his neighbours and America's interests." U.S. Defence Secretary William Perry said the attack was justified because Iraq's military actions posed a "clear and present danger" to neighbouring countries and the flow of oil, and the United States reserved the right to take further action. "We certainly have indications that, by all means, the raid was effective," U.S. Air Force General Joseph Ralston, deputy chairman of the military Joint Chiefs of Staff, told reporters. He did not have "a complete assessment of the battle damage done as yet". Responding to Saddam's statement that many missiles were shot down, he said there was no indication that any were downed or had malfunctioned. Earlier, Saddam declared in a televised speech: "You men of our air defence and falcons of the skies, consider from now their damned imaginary lines north of the 36th parallel and south of the 32nd parallel non-existent. "Hit back with capability and efficiency, relying on God, the Almighty, at any hostile plane the aggressors fly to violate the airspace of your great country throughout Iraq from now and in future." Saddam said Iraqi losses were minimal. "The sons of Iraq were on their guard for the aggressors, downing a great number of their missiles," he said. The official Iraqi News Agency later said angry Iraqis took to the streets to denounce the U.S. strikes. Shortly after Saddam spoke, Iraq's Deputy Prime Minister Tareq Aziz said Baghdad would complete a troop withdrawal from the Kurdish north on Tuesday and denied reports that Iraq was massing forces close to the town of Sulaimaniya. U.S. defence officials said the unmanned missiles were fired from B-52 bombers and American warships in the Gulf at about 15 targets such as air defence radars, missile sites and command and communication centres near several areas in southern Iraq, including Al Kut, Al Iskandariyah, An Nasiriyah and Tallil. In 1993 Clinton launched a cruise missile attack on Iraq in response to its alleged plot to assassinate former president George Bush while Bush, who led the 1991 Gulf War coalition that drove Iraqi forces from Kuwait, was visiting Kuwait that year. The 23 missiles destroyed an Iraqi intelligence headquarters in central Baghdad where U.S. officials said the plot had been hatched. Six civilians were killed. White House spokesman Mike McCurry told reporters earlier there was evidence that some of the Iraqi forces that overran the northern Iraqi city of Arbil during the weekend were "penetrating deeper" into northern Iraq and threatened Sulaimaniya, administrative capital of the Kurdish opposition. McCurry said there was also reason to believe that some Iraqi troops were involved in executions of leaders of an anti-Baghdad Kurdish faction in Arbil. The White House believes Saddam sent three tank divisions composed of 30,000-40,000 elite Republican Guard troops into northern Iraq to help the Kurdistan Democratic Party (KPD), involved in a bloody power struggle with another Kurdish group with links to Iran, the Patriotic Union of Kurdistan (PUK). It says U.N. Security Council resolutions approved after the 1991 Gulf War provide the legal basis for responding, but in a televised interview, Aziz said the action was illegitimate and against international law. PUK Kurdish leader Jalal Talabani welcomed the strikes but said they had so far failed to deter tank and artillery movements toward his positions. His opponent, KDP leader Massoud Barzani, newly allied with Saddam, echoed Baghdad's defiance and said his alliance was forced by the United States. On the diplomatic front, reaction was mixed. Russia hit out at Washington, suggesting the strikes were launched to help Clinton win November's presidential elections. Foreign Minister Yevgeny Primakov told a news conference in the Swiss capital Berne that the attacks "cannot be supported by anyone at all, except those who put domestic politics, including pre-electoral questions, above all else". Iranian state radio also blasted the attacks as Clinton electioneering, and Jordan, another neighbour of Iraq, called for restraint to avoid a further escalation of violence. Syria, which also borders Iraq, said the U.S. action threatened Iraq's unity. In Cairo, the Arab League condemned the attack as infringing the sovereignty of an Arab country. Britain and France, who weighed in behind Washington during the 1991 Gulf War, held back from Tuesday's attack. Britain loudly applauded the U.S. strikes but stopped short of adding its own hardware, while France said little. But Canadian Prime Minister Jean Chretien voiced support and called on Saddam to withdraw from Kurdish regions in the north. Germany also backed the attacks and said it expected Baghdad to pull out of the north at once and stop attacking civilian Kurds. NATO Secretary General Javier Solana called the military action "a justified, measured and proportionate response". Clinton's political rival, Republican presidential nominee Bob Dole, said: "I trust that this development marks the beginning of decisive action by the United States to curtail the power of Saddam Hussein...." Japan said it supported the air raid as a way to ensure Iraqi compliance with U.N. resolutions ending the Gulf War. China called for restraint, saying "We hope all sides will not take action that could further aggravate the situation in that area." India and Pakistan both expressed grave concern, India saying the attack was likely to affect Middle East peace. 7996 !GCAT !GDIP !GPOL !GVIO The group that mediated a landmark deal between Serbia and ethnic Albanians in Kosovo said on Tuesday that the agreement should cut the risk of conflict in the troubled province and could be followed by further progress. The accord, which will allow Albanian students to return to mainstream education after a six-year boycott, was brokered by the Sant'Egidio Community, a Rome-based Roman Catholic peace group. "The accord weakens the friends of war," the group's founder, Andrea Riccardi, told a news conference. "It is an important political signal." He said Sant'Egidio, which has been active in peace mediation in many world troublespots, would continue to support the nascent dialogue between the Serbian government and the opposition Albanian Democratic League of Kosovo (LDK). "There is no agenda, but I sense the next steps will be in the areas of civil life, culture, ecconomy and health," Riccardi said. Western diplomats have praised the accord as a significant and welcome breakthrough in the Kosovo dispute, which has threatened to trigger a new Balkan war. Tensions between ethnic Albanians, who outnumber Serbs nine to one in Kosovo, and Belgrade are considered the most potentially explosive unresolved ethnic conflict in the region. The United States and Germany have led diplomatic pressure on Belgrade to settle its differences with the Albanian leadership, before a so-called "outer wall" of economic sanctions against rump Yugoslavia can be lifted. Riccardi said he was confident both sides would honour the accord, which Sant'Egidio has said is intended to have immediate effect and will apply to all levels of education. "Kosovo is now under the international spotlight, so it is unlikely either party will go back on its word while being the focus of so much attention," he said. LDK leader Ibrahim Rugova and Serbian President Slobodan Milosevic signed separate copies of the accord in Belgrade and the provincial capital Pristina this week but Rugova then objected that the deal did not refer explicitly to universities. Sant'Egidio said earlier on Monday that Rugova's objections had been overcome at talks with the group on Monday in Pristina. The Albanian boycott of the Serbian education system began in 1990 in protest at Belgrade's move to revoke Kosovo's autonomous status a year earlier. The Albanians instead set up their own parallel education system for some 500,000 students and established an unofficial administration. Sporadic violence has flared in recent months in Kosovo, which Serbs regard as the cradle of their civilisation, with a series of attacks on Serbian policemen. International human rights groups accuse Serbia of using police-state methods to repress ethnic Albanians and protect Serbs. 7997 !GCAT !GVIO Refugees from the fallen rebel city of Arbil huddled in fear in nearby villages on Tuesday, lamenting the loss of family and friends at the hands of Iraqi troops and their new Kurdish allies. "Two of my relatives have died, and some are injured," said a doctor, declining to be identified for fear of retribution. "There was concentrated bombing until four p.m. (on Saturday)." "There are many civilian casualties from the shelling in the suburbs," said the doctor. He last saw his family in hospital at the weekend before he fled the Kurdish capital Arbil as President Saddam Hussein's troops moved in. The Iraqi army and a Kurdish faction captured Arbil from a rival Kurdish group in fighting at the weekend. "There were many civilian casualties from the shelling in the suburbs," said a veteran 'peshmerga' fighter who fled Arbil. He said most people who ran were fighters of the Patriotic Union of Kurdistan (PUK) -- which held the city from December 1994 until the weekend attack -- and their families. The United States on Tuesday launched cruise missile strikes on southern Iraq in retaliation for the Iraqi attacks on Kurds. But Baghdad appeared unbowed, deploying armour and artillery against the rebels and unleashing its secret police against Arbil after the strikes, according to PUK leader Jalal Talabani. "Forty Iraqi tanks, as well as artillery, moved from Qushtapa toward Bustaneh about one hour ago. Their advance has been stopped by the peshmerga resistance," Talabani told Reuters from his Iraqi Kurdistan stronghold of Sulaimaniya, more than 100 km (60 miles) to the southeast. "Hundreds of people have already been rounded up by Saddam's secret police and are facing torture and death," Ahmad Chalabi, leader of tHe umbrella opposition Iraqi National Congress (INC), said in London. A spokesman in Turkey for Iraq's minority Turkomans said about 2,000 of his countrymen had been arrested and deported in trucks from Arbil to Mosul, an oil centre under Baghdad's central control. "We fear for their lives," said Hasan Ozmen. It was impossible to verify the charges of mass arrests, and even public executions, by the secret police. Reporters have been barred from Arbil by the forces of the Kurdistan Democratic Party (KDP), which now control the city. Refugees said they had heard reports of executions and arrests in Arbil. Another Arbil doctor, 35 years old, said the injured had a high chance of dying from neglect: "Some people have died because there is no one to treat them in hospital." A group of MPs in the four-year-old northern Iraqi administration tried to gather a quorum in the town of Salahuddin, around 20 km (14 miles) from Arbil. But they were about 10 short of the required number, so went to lunch in the hope their numbers would swell later. Civilians were pessimistic about the future of the enclave, set up in 1991 as an autonomous Kurdish area under Western protection in reaction to bloody attacks by Saddam. "There will never be peace between the two parties," said one Arbil resident, sitting in a dark room in a tiny village house where he had taken refuge. "We are afraid of becoming another Lebanon." Young KDP peshmerga in Salahuddin, however, were far from deterred by the latest spate of violence, and brushed off criticism levelled at KDP leader Massoud Barzani for allying with Saddam. "Everybody loves Barzani. He's a good man and he doesn't want to fight. But all KDP peshmerga will die to defend Arbil," 15-year-old Amir Salla, a peshmerga three years, told Reuters, fiddling with the hand grenades and knives in his belt. The youthful peshmerga, some just 13, waved their Kalashnikov rifles, resplendent with ribbons in yellow KDP colours, and grinned enthusiastically. Barzani echoed Baghdad's defiance of U.S. military might. "I am not afraid of the cruise missiles," Barzani said in Kurdish through an interpreter. He told a press conference his faction had grown impatient with U.S. promises to nurture Kurdish autonomy in the north, behind a Western air cover. "It is for...years the Americans have played with us and have been onlookers," said Barzani of the KDP decision to throw in its lot with Saddam after years in the U.S. camp. 7998 !GCAT !GDIP !GVIO Israel backed the U.S. attack on Iraq on Tuesday saying it had nothing to fear, but nervous residents traded in old Gulf War gas masks for new ones. Prime Minister Benjamin Netanyahu reassured Israelis there would be no replay of the 1991 conflict when Baghdad fired 39 Scud missiles at the Jewish state. He called the Clinton administration's cruise missile strikes a justified response to President Saddam Hussein's "aggression" in the Kurdish north of Iraq. Palestinian officials denounced the air strikes as unjustified, saying Baghdad was entitled to protect its borders. The bombardment overshadowed a third day of efforts by Israeli, PLO, U.S. and U.N. officials to arrange a first meeting between Netanyahu and Palestinian President Yasser Arafat. Netanyahu, who shot to fame as a government spokesman by wearing a gas mask in a television interview during a Scud attack, tried to calm Israelis. "We do not see, right now, a danger of this conflict spilling over in our direction but we always have to be vigilant and so we're vigilant and taking whatever precautions are necessary," Netanyahu told reporters. Hundreds of Israelis who had not handed in their old gas masks under an on-going swap-out programme rushed to distribution centres after news of the attack. "My husband called me at work and said that the United States had attacked Saddam and told me to get going," said Zamira Golan, 36, queueing for masks at Jerusalem's Malha shopping mall. In all, 43 distribution centres were open, officials said. Golan was replacing masks for her two daughters and getting new ones for a set of twins born since the Gulf War when Israel was restrained by the United States from retaliating for Iraqi Scuds. Israelis wore the masks while sheltering in sealed rooms fearing chemical or biological attacks but the Scuds carried conventional warheads. Netanyahu was informed before the attack by the United States, Israel's main ally, security sources said. "I think that President Clinton enjoys the full support of Israel in stating the principle that aggression of this kind must not go unpunished," Netanyahu said. PLO officials condemned the strikes although Arafat himself made no comment. "We are against the U.S. attacks on Iraq. It is unjustified since it will create tension in the region," Azzam al-Ahmad, the Palestine Liberation Organisation's Ambassador to Iraq, said. "Iraq's attacks against the Kurds in the north of Iraq were an attempt to defend its national borders and to maintain the unity of the country. The international community, including the U.S., doesn't want Iraq's fragmentation," al-Ahmad, who is also minister of public works in Arafat's self-rule Palestinian Authority, told Reuters. Palestinians and other Arabs have in the past charged Washington with double standards in its Middle East dealings. They accuse it of doing nothing when Israel flouts international law while cracking down on Iraq. Palestinians fear the U.S. raids will ease pressure on Netanyahu for a meeting with Arafat and divert attention from Palestinian autonomy talks. But they believe a summit will be held before Netanyahu goes to the United States next week, probably in the next few days. The summit is seen as a vital catalyst to stalled negotiations on the implementation of Palestinian self-rule in the West Bank and Gaza. "President Arafat wants one thing from Mr. Netanyahu, that he honours the agreements and will implement them," PLO negotiator Saeb Erekat said. He and other PLO officials accused the Israelis of refusing to include the word "implementation" in a joint communique reaffirming their commitment to the 1993 Oslo autonomy accord. Netanyahu, citing security concerns, is holding up an Israeli troop redeployment in the West Bank town of Hebron agreed with the previous Labour government. 7999 !GCAT !GDIP !GPOL Officials were edging closer to arranging meeting on Wednesday between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Yasser Arafat, an Israeli official said. "All being equal a meeting should materialise on Wednesday or Thursday," Netanyahu's media adviser David Bar-Illan told Reuters. "The gap is extremely narrow between the sides. There is agreement on practically all points." Preparations for the landmark Netanyahu-Arafat summit, seen as vital for reviving stalled talks on the implementation of Palestinian self-rule in the West Bank and Gaza, were overshadowed by the U.S. attack on southern Iraq on Tuesday. Netanyahu backed the U.S. missile strike, reassuring Israelis there would be no replay of the 1991 conflict when Baghdad fired 39 Scud missiles at the Jewish state. Palestinian officials, who supported Iraq during the Gulf War, denounced the attack as unjustified, saying Baghdad had a right to protect its borders. Palestinians fear the U.S. raids will divert attention from Palestinian autonomy talks. U.S. President Bill Clinton will hold talks with Netanyahu in Washington next Monday. The two leaders are expected to discuss the issue of Iraq and the Middle East peace process. "President Arafat wants one thing from Mr. Netanyahu, that he honours the agreements and will implement them," PLO negotiator Saeb Erekat said. Netanyahu, elected in May pledging not to trade occupied land for peace, has resisted meeting Arafat, saying he would do so only out of Israeli security concerns. Palestinian officials have said Netanyahu is willing to commit himself to the principle of the 1993 Oslo autonomy accord but not to its implementation at this stage. The Palestinians are seeking a clear commitment from Netanyahu that he will fulfil Israel-PLO peace deals, including a long delayed Israeli troop redeployment from Hebron. Netanyahu has said Hebron, where Israeli troops are to remain in parts of the city to ensure the safety of 400 Jews who live among more than 100,000 Arabs, requires re-examination due to security concerns. Earlier this week Netanyahu adviser and negotiator Dore Gold said detailed discussions on Hebron would take place only after the initial meeting between Arafat and Netanyahu. Arafat and Netanyahu are likely to meet on Israel's side of the Erez crossing leading into the Gaza Strip, Bar-Illan said. "The thrust of the meeting between the prime minister and Arafat is to confirm that an agreement has been reached on the agenda of the negotiations and to seal it with a handshake," Bar-Illan said.