US ECONOMY IS GAINING STRENGTH The Federal Reserve issued its most positive assessment of economic strength in months Wednesday, reporting a strong start to holiday shopping but warning of raw-material price increases in a few regions. The Fed noted that California continues to suffer economically and conditions in the Northeast were mixed. But overall the economy ``continued to expand at a moderate pace,'' it said. That is an improvement over the ``slow to moderate'' phrase used by the Fed since June. The report also reflected slightly more concern about inflation than previous assessments, due to materials price increases. Economists said the report, coupled with recent remarks of top Fed officials, lays the groundwork for a small increase in short-term interest rates by the Fed to squelch any possibility of more inflation. US-Syria talks

US Secretary of State Warren Christopher arrived in Damascus yesterday for more talks with Syrian President Hafez-al Assad on resuming Syrian-Israeli peace talks suspended since September, officials said. Mr. Christopher said President Clinton will meet with Mr. Assad in Geneva next month. The meeting will represent a diplomatic victory for Assad, whose nation is on the State Department's list of countries that sponsor terrorism. Rice import bans to fall

South Korean President Kim Young Sam, apologizing for breaking his election pledges, said yesterday that his nation must end its long-standing ban on rice imports. Mr. Kim, facing great public anger, said he had to accept rice imports to enhance South Korea's position in international trade talks. Meanwhile, Japan this week postponed a decision on opening its closed rice market. A gradual opening is expected. The Socialists, the biggest party in the fragile coalition government, have threatened to resign from the government if the plan goes through. Chilean elections

Candidates yesterday wrapped up their campaigns for today's presidential and congressional elections to complete Chile's transition to democracy begun when Gen. Augusto Pinochet stepped down as president in 1990. Polls showed that ruling coalition candidate Eduardo Frei, son of the popular 1960s president of the same name, is favored to win. Yeltsin NATO appeal fails

NATO Secretary-General Manfred Woerner said yesterday the alliance would eventually accept new members, despite a personal appeal from Russian President Boris Yeltsin not to bring in Eastern European states. Mr. Yeltsin, facing crucial elections Sunday, has told the West that if NATO takes on new members from Eastern Europe it will isolate his country and upset already unruly hard-liners. New Serbian talks

International mediators were reported to be due in Belgrade yesterday for talks with Serbian President Slobodan Milosevic that could pave the way for wider Bosnia peace talks this weekend. Humanitarian agencies say Bosnian Serb and Croatian bureaucracies are holding up their aid efforts. Ivory Coast turmoil

The Ivory Coast government of Prime Minister Alassane Ouattara resigned yesterday amid turmoil, two days after the death of longtime President Felix Houphouet-Boigny. His passing has sent the African nation into a political crisis over succession that endangers current economic reform. Clinton rises in polls

A new Times Mirror poll finds 63 percent of respondents say President Clinton is able to get things done, up from 36 percent who thought so in August. According to the survey, the improvement is attributable to Mr. Clinton's recent legislative victories, including passage of the Brady handgun-control bill and the North American Free Trade Agreement. The Dec. 2-5 survey also found widespread approval of Hillary Rodham Clinton's performance as first lady and showed the Democratic Party with a significant edge over Republicans on a long list of domestic issues, including crime and deficit reduction.

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