The coalition of 18 states that sued Microsoft for antitrust violations splintered, with two-thirds poised to settle the case and others saying they were determined to go to trial. Last week, the Justice Department agreed to a deal that would require Microsoft to help rivals make products compatible with its monopoly Windows operating system. Lawyers said a third of the states were ready to accept terms of the deal, and another third had reached a supplemental arrangement allowing them to accept the settlement. But the remaining states, notably California and Massachusetts, reportedly want to go trial.

President Bush warned that Osama bin Laden's Al Qaeda network is seeking chemical, biological, and nuclear weapons in an attempt to "destabilize nations." In an address via satellite TV to Eastern and Central European leaders in Warsaw, Poland, he compared Afghan-istan's terrorist-harboring regime and its "mad global ambitions" to "fascists and totalitarians" who enslaved Europe for much of the last century. Bush is seeking to build support from European governments to join his counterterrorism campaign and to reverse doubts among allies about the US-led military action in Afghanistan.

Postal Service officials warned the impact of terrorism and anthrax on the mail system will be long-lasting and cost billions of dollars. Prior to the attacks, Postal Service revenue was $300 million below forecasts and mail volume had dropped almost 10 percent. The service has predicted it will lose $1.35 billion this year. Separately, Pentagon officials said there were no signs that anthrax spores found in two of its postal boxes had migrated to other parts of the military complex. (Story, page 3.)

The working poor are bearing the brunt of layoffs in New York following the Sept. 11 terrorist attacks, a study by the liberal Fiscal Policy Institute found. It estimated that 60 percent of the almost 80,000 people receiving pink slips earned an average of $11 per hour. Many are recent immigrants or lack skills to attain high-paying jobs, it said.

CORRECTION: An item in this space Friday, Nov. 2, should have said the Bush administration would accept the same stricter standard for arsenic in drinking water that was issued in the final days of the Clinton presidency.

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