Two Argentine planes shot down

As diplomatic efforts to resolve the Falkland Islands dispute continued, military action flared again in the South Atlantic.

Two Argentine warplanes were shot down Wednesday while attacking a British Navy ship off the Falkland islands, the British Defense Ministry announced. Three Argentine planes attacked the ship, but the third escaped, a ministry spokesman said. The ship suffered no casualties or damage.

The spokesman did not make clear whether the attacking planes were shot down by the warship or whether British aircraft were sent up to engage them. He did not name the ship, but identified the Argentine planes as American-built A-4 Skyhawks.

In Washington, President Reagan conferred with Brazilian President Joao Baptista Figueiredo amid cautious hopes Britain and Argentina were moving toward a settlement of their conflict over the Falkland Islands.

General Figueiredo, whose country shares a 1,200-mile border with Argentina and supports the Buenos Aires government's claim of sovereignty over the Falklands, told Mr. Reagan: ''In a world where crises multiply, diplomacy must continue to build bridges between states.''

Both President Reagan and General Figueiredo pledged to do all they could to fully restore what they called historically close ties between their countries.

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