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EUROPE AND ASIA In Yugoslavia, the central leadership issued a new warning to Croatia Saturday to step into line or face Army action. President Borisav Jovic accused the northwestern republic of not demobilizing its police reserves as promised, failing to return weapons, and not turning over its defense minister to face investigation. South Korean President Roh Tae Woo put the nation's armed forces on full alert, saying the Gulf war had heightened chances of a North Korean attack, Yonhap News Agency said Sunday. In Moscow, a liberal radio station said Saturday that Soviet broadcasting authorities had barred its access to main frequencies after it angered President Mikhail Gorbachev with its coverage of the situation in the Baltics.


In Israel, Prime Minister Yitzhak Shamir's plan to broaden his Cabinet with a far-right party sparked a political storm Sunday, with critics saying the move would cost Israel its newly earned international goodwill. Despite the opposition of four ministers from his own Likud party, Shamir seeks the inclusion of the two-man Moledet Party that advocates the ``transfer'' of all Palestinians from the occupied territories. The US State Department, in its annual report on the state of human rights around the world, Friday saw some improvements in sub-Saharan Africa, where Namibia became an independent state and democratic reforms were passed in Gabon, Ivory Coast, Congo, and Zambia. But the report said inter-ethnic violence is rising in other African countries such as Somalia, Liberia, and the Sudan.


The US Federal Reserve cut its discount rate that it charges banks for overnight loans to 6 percent, from 6.5 percent Friday. The Fed announcement followed news that unemployment rose in January for the third straight month to 6.2 percent. USX Corporation and the United Steelworkers of America reached a tentative three-year contract agreement late Saturday night, narrowly averting a strike. The contract, which covers 18,000 workers, improves benefits and restores $1 per hour of wages given up by the union in earlier contracts.


The survival of Pan Am Corporation and Trans World Airlines Inc. hangs on the US Department of Transportation resuming talks with British authorities over transatlantic air routes, industry analysts say. They say American officials refused to allow greater access for British carriers to the US domestic market. Pan Am wants to sell its Heathrow landing slots to UAL Corporation, while TWA wants to sell its London routes to American Airlines. TWA said Friday it was withholding payment of about $75.5 million in bond obligations. In Los Angeles, investigators studying the collision of a USAir 737-300 and a commuter plane that killed 18 people found that in 70 seconds an air traffic controller gave the two planes permission to use the same runway.

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