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WAR IN THE GULF President Bush is sending Defense Secretary Richard Cheney and Gen. Colin Powell to the Persian Gulf this week to help him decide if and when to launch a ground offensive to expel Iraq from Kuwait. Bush said Tuesday he was skeptical that air power alone would bring an Iraqi withdrawal. Meanwhile, Gen. H. Norman Schwarzkopf, commander of US forces in the Gulf, said it was ``too early to tell'' whether a ground attack would be needed to drive Iraq from Kuwait.... Israeli police said Wednesday they had arrested two more Israeli Arabs suspected of belonging to a pro-Iraqi spy ring, bringing to 12 the number arrested in the past two weeks.... A knife-wielding Palestinian wounded an Israeli soldier on a bus Wednesday in the first such incident since the war began. ... In Athens, bomb blasts rocked the offices of Citibank and destroyed the car of a French state employee Wednesday, in what police said were guerrilla attacks in support of Iraq.... In Washington, Treasury Undersecretary David Mulford urged Japan and Germany Tuesday to speed up their aid to the front-line states encircling Iraq, who have been hard hit by the Gulf crisis. Japan said it would soon provide Turkey, Jordan, and Egypt with $1.03 billion in low-interest loans it had promised.

ASIA AND THE MIDDLE EAST

In the Philippines, military intelligence agents Wednesday captured two leading figures in a 1989 coup attempt by right-wing Army rebels. The men were Maj. Abraham Purugganan and Lt. Col. Victor Batac.... The Soviet Union is sharply cutting aid to its longtime Asian ally Vietnam under a one-year agreement that shifts their trade relationship to hard currency payments at world market prices, a Soviet diplomat said. Cambodia's Vietnamese-backed government, saying it had conceded enough to try to end a 12-year civil war, said it would hold parliamentary elections next year if no peace agreement was reached with Khmer Rouge-led guerrillas. The guerrillas said they wanted polls held under United Nations auspices.... In south Lebanon, several Katyusha rockets hit Israel's self-declared security zone Wednesday, a day after Israeli air strikes on Palestinian guerrilla strongholds to the north, security sources said.

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AIRLINE INDUSTRY

In New York, a bankruptcy judge approved the sales of various Eastern Airlines assets to rival carriers Tuesday, after a competitive auction that boosted bids for the failed airline's remains. The Justice Department will have 10 days to examine the deals for possible antitrust violations.... Pan Am Corporation said Tuesday it will cut 4,000 jobs.... Transportation Secretary Samuel Skinner told Congress that US airlines took a $2 billion loss last year, but said the industry predicted it would break even this year and return to profitability in 1992 if the war and the recession are over. Richard Mathias, senior vice president for Pan Am, told the hearing that American, Delta, and United were the only airlines with enough money to weather the current crisis of higher fuel prices and fewer passengers.

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