Usama al-Baz, political adviser to Egyptian President Hosni Mubarak, returned from Israel yesterday after discussing ways to resume Middle East peace talks.

This action comes amid some unrest in Israel. In Tel Aviv, a Palestinian wielding two knives killed two Israelis and wounded nine. The 19-year-old assailant said he wanted to hurt Jews because he could not find work in Israel.

Mr. Rabin, under pressure to quiet public outrage over Arab attacks, said he would consider retaliatory steps. But Israel would not pull out of Middle East peace talks because of the attacks, he said. Airdrop completed

US Air Force officials said that the first US airdrop of food and medicine into Bosnia went well, but reports from the ground indicated the aid went to Serbs, not hungry Muslims. Haiti policy

President Clinton reversed his campaign-period promises to open American doors to Haitian refugees because that policy is now regarded as "unsound," Secretary of State Warren Christopher said Sunday. "I don't suppose you'd want anybody to keep a campaign promise if it was a very unsound policy," he said. Home sales decline

Sales of previously owned homes dropped 6.4 percent in January, pausing after four straight monthly increases, the National Association of Realtors reported yesterday. Sales fell in every region of the country. Kohl in South Korea

German Chancellor Helmut Kohl arrived in South Korea yesterday on the last leg of an Asian trip aimed at promoting trade and improving ties with the economically dynamic region. Mr. Kohl is the first German head of government to visit Korea. Arizona flooding

Crossings along Arizona's flood-swollen Gila River have been closed and much of the nation's winter vegetable crop is threatened, although water releases into the flooded area appear to have peaked, officials said. The normally dry river has been fed by record winter rains and snow. Sikh movement

Indian police in the northern state of Punjab say they have dealt a crippling blow to the 10-year-old Sikh separatist rebellion by shooting and killing the rebels' leader, Gurbachan Singh Manochahal. He had escaped police Saturday, but was cornered Sunday in a farmhouse. Cult standoff

In Waco, Texas, a wounded cult leader and his followers maintained a tense standoff with law officers yesterday following fierce gun battles that left four federal agents and two cult members dead. The violence erupted Sunday morning when 100 federal agents stormed the fortified compound. Algiers arrest

A commander of the underground Islamic extremist movement in Algeria has been arrested, police said yesterday. Ikhlef Cherati had directed anti-government terrorist operations in a conflict that has killed some 600 people, including 250 soldiers and police officers.

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