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The US

Republican congressional leaders, prodded by members of their own party, moved close to a deal on the disaster-relief bill that would free billions of dollars for Midwestern flood victims. Senate majority leader Trent Lott said the accord with Democrats would remove or resolve controversial provisions in the bill, but cut "by as much as one-third" the $8.6 billion in an earlier package vetoed by the president.

The House tax-writing committee finished considering the child-credit portion of its wide-ranging bill, defeating proposals from Democrats who said the GOP plan did not help lower-income families. The GOP child credit, the single biggest item in the bill, would give families a $400 tax deduction in 1998 for each child under age 17, increasing the aid to $500 in subsequent years. Republicans dropped plans to repeal the minimum corporation tax, opting instead to raise the estate-tax exemption more rapidly.

The White House objected to a Senate Republican plan to slowly raise the eligibility age for Medicare to 67 and to charge $5 for each home visit by health-care workers. The Senate Finance Committee plans to vote on the measures next week in an effort to turn part of the bipartisan balanced-budget agreement into law.

President Clinton decided to push for admission of only three new members to NATO - Poland, Hungary, and the Czech Republic. The statement threatened to pit the US against allies who also want Romania and Slovenia admitted.

The Clinton administration and key senators reportedly reached a tentative accord on paying off US debts to the UN. Unnamed officials said $819 million would be disbursed over a three-year period if the UN cuts its personnel rolls and budget - and also accepts the $819 million as full payment of US arrears. The UN contends the actual figure is $1.3 billion.

The House voted to abolish two agencies, reorganize the State Department, and spend more on diplomacy. The $6.1 billion appropriation includes elements opposed by the White House: a ban on family-planning aid to private groups connected with abortions, recognition of Jerusalem as undivided capital of Israel, and a call for banning aid to Russia if it sells missiles to China. The measure shifts to the State Department the work of the Arms Control and Disarmament agency by Oct. 1, 1998, and the work of the US Information Agency a year later.

Prosecutors and defense attorneys in the penalty phase of the Oklahoma City bombing trial were to give their closing arguments before Judge Richard Matsch turned the case over to the jury. Meanwhile, a district judge in Oklahoma City ordered a grand-jury probe into an alleged coverup by US agents investigating the bombing. The inquiry was forced by state Rep. Charles Key (R), who collected 10,600 signatures on a petition for an investigation.

Clinton was to name an advisory panel to help him promote racial harmony. Aides said he wants the panel to spend the next year holding town meetings and canvassing Americans on how to improve race relations. He is planning a White House conference on the subject in November.

Television evangelist Pat Robertson picked a former congressman, Randy Tate (R) of Washington, as executive director of the Christian Coalition and named a former Reagan administration official as its president. Don Hodel, who will succeed Robertson as president, served as secretary of energy and secretary of the interior.

Retail sales fell in May for a third straight month, the Commerce Department said. The three straight declines were the first since the end of the severe 1980-81 recession. Sales slipped 0.1 percent last month, after falling 0.9 percent in April and 0.3 percent in March.

The World

The US dollar surged against the Japanese yen in trading in Tokyo after a senior finance ministry official sought to assure that the government would intervene to prevent a dramatic increase in the country's trade surplus. Concerns that a growing gap would revive friction between the US and Japan and become a major issue at next weekend's G-7 summit in Denver had sent the dollar into a tailspin. From a 4-1/2-year high of 127.27 against the yen May 1, it fell to 110.52 earlier this week.

Hundreds of economists sign-ed an open letter to European Union leaders, urging them to reconsider plans for a single currency. It said measures to pave the way for introduction of the "euro" by Jan. 1, 1999, are undercutting efforts to reduce massive unemployment - estimated at 20 million people. The letter was scheduled for publication in newspapers across the continent. Meanwhile, an Organization for Economic Cooperation and Development report said France, Germany, and Italy would fail next year to meet criteria for the single currency.

Hundreds of Palestinians heaved stones at Israeli troops in the Gaza Strip in protest against construction of a Jewish settlement. One man died and two others were hurt when the soldiers retaliated with tear gas and rubber bullets. The incident came as leaders from the two sides were to meet with an Egyptian envoy to try to restart peace negotiations.

Despite reports that he is seriously ill and may be unable to complete another five-year term, Croatian President Franjo Tudjman was expected to win easily in Sunday's national election. Tudjman faces two opponents, but analysts say they lack his charisma and that sympathy for him has grown as he undergoes medical treatment. The US has led recent international criticism of Tudjman for dragging his feet on implementing the Dayton peace agreement.

South Korea sent the first of 50,000 tons of food aid to famine-stricken North Korea. The corn and flour, which traveled by train through China, were accompanied by South Korean Red Cross officials - their first visit to the communist North since 1985. Meanwhile, the Seoul government said it would build a refugee camp for 500 North Koreans by late next year.

By an overwhelming margin, a ban on all handguns passed the lower house of Britain's Parliament. The vote was 384-181. While it still faces two more votes, approval seems assured because of the new Labour government's 179-seat majority. An earlier ban, enacted by the Conservative government in November, does not cover .22-caliber pistols, although it specifies that they be kept at gun clubs.

Reports circulated around Asia that notorious Khmer Rouge leader Pol Pot was about to leave Cambodia for exile in a "friendly country" - or already had. Such a move would be part of a plan to end years of conflict with the Cambodian government. China ruled out any offer of asylum, saying it "would have no relations" with the Khmer Rouge.

Another US Army instructor was found guilty of sex crimes at the Darmstadt training center in Germany. Sgt. Paul Fuller of Columbus, Ohio, was convicted by a military court of rape, indecent assault, kidnapping, unlawful entry, and three counts of forcible sodomy. Last week the same court convicted Sgt. Julius Davis of multiple sex crimes.

Regulations covering all operations of the Panama Canal were signed into law by the country's president, Ernesto Perez Balladares. The legislation provides for formation of an authority to succeed the Panama Canal Commission, which is due to expire when the US hands over control Dec. 31, 1999. Balladares sought to assure international users that the canal would continue to operate at least as efficiently as before the transfer.


"Panama is telling the world that it's prepared to administer the canal."

- President Ernesto Perez Balladares, authorizing the agency that will run the waterway when 85 years of US control ends in 1999.

In town on a vacation, Floridian Tom Murnane only wanted to look around when he strolled into the Reagan Presidential Library and Museum in Simi Valley, Calif. He strolled out under far different circumstances. As the 1 millionth visitor, he was treated to a weekend at a posh hotel for himself and his family, lunch at a favorite Reagan restaurant, and a trip to the Reagan ranch - all in the comfort of a limousine. Yes, he's a Republican.

No other airline is as famous for its rigid security precautions as Israel's El Al. So it was not unusual when the carrier held up a flight from Tel Aviv because of reports that a stowaway had sneaked aboard. A thorough search of the plane turned up nothing, however, and it took off for New York seven hours late. The intruder no one could find: a mouse.

Speaking of safety precautions, the city of Milwaukee is $37.50 richer because of a crackdown on jaywalkers. E. Michael McCann was properly contrite in paying the fine for crossing a downtown street in mid-block rather than at an intersection. Why is he more significant than anyone else caught in the police net? Because he's the district attorney.

The Day's List

Best Quality of Life Is in Canada, UN Report Says

The UN's Development Program released its findings on countries with the highest standards of living, according to such measurements as per capita income, life expectancy, and educational standards. The study used 1994 statistics. The rankings:

Industrial Countries

1. Canada

2. France

3. Norway

4. US

5. Iceland

6. Netherlands

Developing Countries

1. Hong Kong

2. Cyprus

3. Barbados

4. Singapore

5. Bahamas

6. Antigua and Barbuda

- Associated Press

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