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The US

President Clinton's lawyer suggested he was the victim of a political "sting." Robert Bennett told reporters he was troubled by a flood of leaks alleging the president had engaged in an affair with Monica Lewinsky and tried to cover it up by urging her to lie under oath. Special investigator Kenneth Starr defended controversial techniques used in the case, reported to have included hidden devices to record a conversation with the former White House intern. Also, Clinton acknowledged for the first time that he had an extramarital affair with cabaret singer Gennifer Flowers, The Washington Post reported. He had denied the relationship during his 1992 campaign for the presidency.

Fifty-four percent of Americans say it's at least probably true that Clinton had an affair with Lewinsky, according to a USA Today/CNN/Gallup poll. Another 37 percent say it probably or definitely isn't true. They poll found an even 46-46 split over whether they would favor an effort to impeach Clinton if they became convinced he lied under oath about possible involvement, or attempted to get Lewinsky to lie. An ABC poll found that 28 percent of Americans surveyed were inclined to think Clinton engaged in the affair, 26 percent didn't, and 46 percent said they don't know enough to register an opinion.

Palestinian leader Yasser Arafat met with Clinton at the White House and was expected to ask the president to back his request for a 30 percent pullback of Israeli forces in the West Bank. "I'm not asking for the moon" he told reporters.

The Clinton administration warned of serious threats to the US economy from Asia's financial turmoil unless a billion-dollar bailout plan is implemented. Thirty percent of US exports go to Asia, Treasury Secretary Rubin said. Asia's collapse has pinched a broad range of manufacturing and agricultural industries in the US, a Federal Reserve survey showed. The administration is gearing up for a fight over its request for increased US commitment to the International Monetary Fund when Congress reconvenes next week.

Microsoft Corp. avoided a contempt-of-court citation by agreeing to offer the most current version of its Windows 95 operating system without requiring computermakers to also install Internet Explorer software. The surprise settlement resolves the charge that Microsoft violated a Dec. 11 order by a Washington, D.C., judge that required the company not to force computer- makers to install Internet Explorer software as a condition of licensing the Windows 95 operating system. Meanwhile, Microsoft's profits rose 52 percent in the latest quarter.

AT&T is expected to announce Monday up to 19,000 layoffs, massive expense reductions, and organizational changes, communications industry sources said. The company is expected to slash $3 billion to $5 billion in expenses, they said.

Poor weather conditions threatened to delay last night's liftoff from Cape Canaveral, Fla., of the space shuttle Endeavour, which was to carry a crew of seven to the Mir space station. Crew member Andrew Thomas is expected to replace astronaut David Wolf, who has been living on the Russian space station since late September. Thomas is expected to spend 4-1/2 months there conducting medical experiments and helping with operations.

US Sen. Frank Murkowski (R) of Alaska said he will seek a fourth term, ending speculation that he would retire or seek to unseat Democratic Gov. Tony Knowles. Murkowski chairs the Senate Energy and Natural Resources Committee.

Housing starts slipped 0.8 percent in December, after three consecutive monthly gains, the Commerce Department said. And the nation's homeownership rate hit a record high of 65.7 percent last year, the Department of Housing and Urban Development reported.

The World

Israeli Prime Minister Netanyahu was hailed back home for what right-wing lawmakers and editorial writers called his refusal to cave in to pressure from President Clinton on yielding more West Bank territory to Palestinians. Newspapers in Jerusalem said he had resisted withdrawing from more than 9.5 percent of West Bank areas under full Israeli control. Clinton met Thursday with Palestinian Authority President Arafat.

On his first full day in Cuba, Pope John Paul II headed to the old colonial city of Santa Clara to conduct a mass on the theme of preserving the family unit - a subject said to be of prime interest to the Roman Catholic Church because of the high rates of divorce and abortion on the communist-led island.

Suspected Protestant guerrillas killed one Catholic and wounded another in Northern Ireland, and one Protestant was severely wounded in retaliation, casting new doubts on the future of peace negotiations.

At least 1 million Indonesians can expect to lose their jobs this year - on top of the 2.7 million already unemployed - because of the country's deep economic problems, the government said. The announcement came as the rupiah sunk to yet another new low: 16,300 to the US dollar. The currency has lost 85 percent of its value in the past seven months.

Activists for the unemployed vowed to widen the protests that have nagged the French government for six weeks after Prime Minister Lionel Jospin rejected demands for a substantial increase in welfare benefits. He told a national TV audience economic growth would not be sacrificed, the budget deficit inflated, or taxes raised to help those out of work. He offered a $33 a month hike in benefits, but the activists had sought a $250 increase. A record 12.4 percent of France's workforce is unemployed.

Algeria's government issued its first account of the number of casualties in the insurgency that has gripped the country over the past six years. It said 26,536 people - civilians, security forces, and Muslim extremists - were killed between the cancellation of national elections in 1992 and the end of last year, with 21,000 others hurt. The numbers are three times lower than those circulated by news organizations and don't include casualties in the current wave of violence that began with the onset of Ramadan, the Islamic holy month.

Prosperous southern states demanded "more fairness" in the way Germany's central government distributes tax revenues, saying they consistently pay more into the system than they get back. Led by Bavaria, they warned of an appeal to the Supreme Court if other states - especially those in poorer regions such as the formerly communist eastern Germany - refuse to renegotiate the distribution.

Hundreds of thousands of Greece's unionized state employees joined a nationwide strike, shutting down banks, post offices, government-owned broadcast outlets, and utilities and halting public transportation. The walkout was called to protest a proposed law that would weaken union influence on public utilities so they can be privatized more easily.

US troops helped in the capture of an alleged Bosnian Serb prison camp commander wanted for genocide by the UN's Yugoslav war-crimes tribunal. Goran Jelisic, who reportedly called himself the "Serb Adolf," was arrested without incident at Bijeljina in eastern Bosnia and was expected in The Hague within hours for trial. Tribunal documents accuse him of 16 murders of Muslim prisoners.


"Regardless of whether the allegations turn out to be true ... this is something

the president's going to have a hard time living down."

- Former White House spokeswoman Dee Dee Myers, on NBC TV, commenting on the alleged Lewinsky affair.

If you lost a wallet full of money, how tempted would you be after - say - a week to give up hope that you'd ever see it again? Imagine, then, how Richard Hallett felt when a caller to his York, Neb., home said his billfold containing $700 was being returned. It had disappeared in 1993. Construction workers Kelly and Matthew Epp found the prize while tearing out the walls of a house that had been damaged by fire.

The identical amount of money found its way back to Salinas, Calif., resident Leah Winter, who'd left her purse in a taxi on a visit to New York before Christmas. Said driver Sal LoCascio, who shipped handbag, cash, some checks, and credit cards untouched all the way across the US: "If it's not mine, it's not mine."

Then there's New York policeman Daniel Fraser, who enlisted two transit authority workers to help him look for Cecile Stein's diamond ring. It had rolled through a grate in the street above a subway station. They found it on a ledge, inches from where it would have fallen onto the tracks.

The Day's List

Women's Hall of Fame to Induct 21 New Members

The National Women's Hall of Fame in Seneca, N.Y., has announced its 1998 class of inductees, selected for their lasting contributions to society and to the progress and freedom of women. Eleven will be inducted posthumously. Those still active:

Madeleine Albright, Secretary of State

Maya Angelou, poet

Mary Steichen Calderone, sex-education pioneer

Joan Ganz Cooney, creator of "Sesame Street"

Shirley Ann Jackson, first woman chair, Nuclear Regulatory Commission

Shannon Lucid, astronaut

Roxanne Ridgway, ambassador, foreign policy specialist

Eunice Kennedy Shriver, Special Olympics founder

Beverly Sills, opera star

Florence Wald, Hospice-movement founder

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