SOURCE: The St. Petersburg Times
DATE: Issue #612 (0), Tuesday, October 17, 2000
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TITLE: Belarus Election Draws Criticism
AUTHOR: By Dmitry Solovyov
PUBLISHER: Reuters
TEXT: MINSK - Europe's leading democracy bodies said on Monday that Belarus's weekend parliamentary election failed to meet international standards, but authorities said the criticism just proved the West was biased.


Election officials reported higher turnout figures than previously, saying an opposition boycott of the poll had failed. The small-but-vocal opposition said the turnout was inflated to hide the impact of its boycott campaign.

A handful of opposition candidates stood in the poll despite the boycott, but none was elected.

The outcome was likely to deepen a split between Moscow and the West over ties to the ex-Soviet state of 10 million people, located strategically between Russia and Poland.

The West has mostly shunned President Alexander Lukashenko over the slow pace of democratic and economic reforms in Belarus. But Russian President Vladimir Putin phoned Lukashenko to congratulate him on carrying out a free and democratic poll.

The Organization for Security and Cooperation in Europe (OSCE) said in a statement: "The minimum requirements were not met for the holding of free, fair, equal, accountable and open elections."

In the run-up to the poll, the democracy and security watchdog had sent a technical observation mission to Belarus, which also included experts from the European Parliament and the Council of Europe in a so-called "troika."

The OSCE's Russian-language state ment said authorities "severely limited basic rights of citizens, including rights of free expression, assembly and association, and brought elements of intimidation and bans into the election campaign."

Belarus's foreign ministry quickly denounced the assessment.

"The biased judgment of many conclusions, and the disregard of the process achieved by Belarus in meeting its obligations, testify to the prejudiced, premeditated nature of the negative assessment of Belarus's election," the ministry said in a statement.

Adrian Severin, a former Romanian foreign minister who presented the OSCE's findings, said Belarus's frosty relations with the West would not improve soon after Sunday's vote.

"Under the current circumstances, our parliamentary troika can only recommend that a decision on normalizing relations with relevant institutions of Belarus should be taken at a later stage," he told an often hot-tempered news conference.

He also described the poll as "a lost opportunity" for the opposition, adding, "We have noticed with regret that different approaches and policies applied to this election have led to the split of democratic forces in Belarus."

Other foreign delegates at the news conference questioned those remarks, saying Severin should not have given the impression he favored the opposition openly.

Lukashenko's spokesman, Nikolai Borisevich, said: "The election took place as expected by the president. It was valid."

The opposition had hailed initial low turnout figures on Sunday evening as a victory for their boycott campaign. But the figures released on Monday morning were higher.

The Central Election Commission (CEC) had said on Sunday that 28 of 110 constituencies had failed to secure the 50 percent turnout needed to make the polling valid. But on Monday, it said the result was valid in all but 14 districts.

CEC head Lidia Yermoshina said overall turnout was 60.6 percent. The figure was still below the 70 percent Lukashenko had predicted, and turnout in the capital was only 49 percent.

Yermoshina added that no opposition candidate had won a seat.

Anatoly Lebedko, head of the opposition United Civic Party, said the authorities had inflated turnout figures.

Opposition leaders said they would try to stage nationwide protests. However, previous opposition rallies met only lukewarm support.

Lebedko said the opposition would designate a single candidate to face Lukashenko in a presidential poll next year.

Yermoshina said run-off votes would be held on October 29 in 53 districts where no candidate had won an outright majority. In the 14 districts where turnout fell short, a new election must be held in three months.

TITLE: Belarus Keeps Soviet Massacre Secret
AUTHOR: By Anna Badkhen
PUBLISHER: Staff Writer
TEXT: KURAPATY, Belarus - Maria Tolstik lets tears roll down her face as she recalls how for four years more than half a century ago her sleep was interrupted nightly by the sound of people being shot to death.


But Tolstik's memories are not of the terrors of the 1941-44 Nazi occupation of Belarus.

The shootings she remembers are from just before the war, from 1937 to 1941, when Stalin's secret police shot an estimated 200,000 people in a field just several hundred meters away from her house.

Their remains now lie in mass graves under the pine trees of a forest planted after the war. They lie virtually forgotten, their names unknown, and lately the Belarus government has begun to cast doubt on the cause and time of their deaths.

For more than a decade now, Tolstik, 66, and Liza Matskevich, 67, have been giving accounts of the killings to prosecutors and journalists. In the late 1980s, archaeologists from the Soviet Academy of Sciences determined that the people buried in Kurapaty were killed with Soviet-made bullets fired from Soviet-manufactured guns, and the Belarussian Prosecutor General's Office officially confirmed in 1995 that the remains belong to victims of the NKVD, the predecessor of the KGB.

But lately, Belarus has been trying to shift the blame off the NKVD and onto Nazi Germany.

The site became public knowledge in 1988, when trenches for gas pipes were being dug in the forest. In the spirit of Soviet leader Mikhail Gorbachev's perestroika, the Soviet government ordered an investigation into the killings. There were calls to turn the site into a memorial, and to erect a church.

But then the Soviet Union collapsed and a few years later, Alexander Lu ka shen ko became president of Belarus and revived nostalgia for all things Soviet. 

Lukashenko's government now maintains that the mass graves are of Jews killed by the Nazis, according to Ales Belyatsky, chairman of the Minsk-based Vesna human rights group.

"Lukashenko's policy is based on the idea that life in the Soviet Union was great," Belyatsky said Saturday. "It is in his interest that this place is forgotten." 

The Belarussian KGB was less definitive on the origins of the graves but pointed toward the Nazis.

"It's too early to jump to conclusions about the origin of these graves," said KGB spokesman Fyodor Kotov. "There are many versions of this tragedy [and] the Nazi massacre is one of them."

No documents identifying the victims have been found.

Today, few Minsk residents know about Kurapaty - a patch of forest marked by a rotting, rain-washed wooden cross hidden among pine trees just beyond the capital's southern border. Those who do know are unsure about who was killed there and by whom.

"Kurapaty? Some say it was the KGB, some say the Germans," said Viktor, a taxi driver in Minsk who did not give his last name. "Who knows?"

But Tolstik and Matskevich will have none of it.

"The shootings began long before the war and they ended when the war started," Tolstik says firmly Saturday, mixing Belarussian and Russian words. 

"They try to blame it on the Germans, but there were no Germans when the shootings took place," Mats ke vich adds. 

The two women recall how one of their childhood friends, Vasya, went to the site to pick mushrooms in the late 1930s - at the height of Stalinist repression - when he saw trucks going into a field surrounded by a three-meter-high fence.

Vasya, who has since left the village and whose last name the women don't remember, climbed a pine tree, partially out of curiosity, partially out of fear. 

"He saw it all, how they shot, how they screamed," Tolstik recalls. "He ran back and told us."

"All these years we knew but were afraid to tell," Matskevich says. 

"Then we could finally talk about it, pour it all out. Now the government is trying to make people forget about it again."

TITLE: Cherkesov Reveals Agenda to Regions
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: When Viktor Cherkesov, governor general of the Northwest region, took office in May, he raised a storm. First, he requisitioned - some thought unromantically - the single wedding palace in town where foreigners and Russians could tie the knot as the headquarters for his regional bureaucracy. 


That was followed by a minor press flap about a certain beer pavilion that had been required to move, as it spoiled the governor general's beach view from his dacha.

This circus was played out against the background of fear rekindled by the local intelligentsia who remembered Cherkesov's 25-year career in the KGB - and then its successor, the Federal Security Service, or FSB - persecuting dissidents at the Bolshoi Dom. 

Then, he slipped out of sight. When his press service was asked, reporters were told he was "on trips" throughout the Northwest region "examining the situation." 

Now that Cherkesov's quiet travels are over, he has revealed the results of his findings and has handed down an edict to all the oblasts, cities, towns and municipalities under his control: Bring your regional laws into accord with federal law by Jan. 1. 

In short, he has been out - along with the other six governor generals appointed with him in May - trying to reverse a 10-year-old process of regional devolution, a time during which hundreds of laws, decrees, charters and constitutions were written nationwide that side-stepped or came into direct conflict with federal law. 

According to Cherkesov's press service, literally hundreds of inconsistencies with, or outright contradictions to, federal law were found on the books of various administrations around the Northwest region, one of seven now under control by governor generals like Cherkesov. 

Bringing them all in line may be frustrating when federal law, by several decrees of then President Boris Yeltsin, gave regions the go-ahead to act on their own. 

But few are complaining. 

Since Cherkesov ended his tour Sep tember, regional parliaments have been clamoring to meet the deadline with astonishing energy. In an effort to prove their new-found loyalty to the Kremlin, many regions are shedding key articles they enshrined in legislation during the decentralization rush of a decade ago. 

"[Regional authorities] do not want to jeopardize their relationships with the federal authorities," said Leonid Kesselman, a political analyst at the Russian Academy of Sciences.

"They understand that those currently in power have arrived for a long time and that's why they are trying to avoid any unpleasantness. The rush for decentralization and sovereignty is over." 

Andrei Ryabov of the Moscow-based Carnegie Endowment for International Peace, said that fear of losing a place at the table is a further reason behind the race to comply - though he added this only applies to weakened regional leaders. 

"The big role here is being played by the presidential representative. Cher ke sov, for instance, is close to Putin and most of the regional authorities are scared of him," Ryabov said.

"Only those regions [such as Karelia] who do not feel politically stable, started changing their laws," Ryabov said, adding that Tatarstan has politely sent suggested changes to its legislation back to Moscow - unread. 

Some of the laws Cherkesov is making regional leaders abandon are in complete contradiction of the Russian Civil Code. Others are dusty anachronisms. But together, they have created a legal thicket that Northwestern republics like Komi and Karelia have to use a legislative machete to navigate 

The Komi Republic, for instance, has been forced to redraft its prized constitution, which, written in 1990, made provisions for the republic's eventual independence.

"We've got many laws that should be changed, and there was a special schedule introduced to complete the process by the end of the year," said Sergei Dobrovoltsev, the Komi Republic Supreme Council spokesman in a telephone interview on Tuesday.

The document, Dob rovoltsev said, was amended last month. 

As difficult as such an undertaking may seem, the Karelian Republic may have it worse. The review by Cherkesov's team revealed that the heavily Finnish-influenced republic, located north of St. Petersburg, has more that 300 laws on its books that contradict federal legislation. 

"There is total chaos in local administrations throughout Karelia," said Andrei Rayev, a Karelian Legislative Assembly spokesman.

"Local authorities passed a huge number of decrees, many of which will have to be abolished very soon or have already been abolished for the time being." 

Rayev said that since the campaign started in September, sheaves of contradictory laws and decrees have been put on the bonfire. 

One example, Rayev said, was the republic's law on the use of natural resources found underground. According to Karelian law, underground natural resources belong to the republic. But this comes into direct conflict with federal law, which regulates the ownership of underground natural resources and claims them for both the republic and the state. 

As for St. Petersburg, there is now a list of 19 laws which may have to be discarded as they conflict with federal legislation. But the most difficult aspect of St. Petersburg's adaptation will concern the hard-won City Charter that it adopted in 1998. 

"There are so many problems with the Charter, the devil himself couldn't make head or tail of it," said Alexander Afanasiyev, spokesman for St. Petersburg Gov. Vladimir Yakovlev.

TITLE: Kremlin Courting Duma Over Budget
AUTHOR: By Igor Semenenko
PUBLISHER: Staff Writer
TEXT: MOSCOW - The Kremlin showed them the stick, and now comes the carrot. 


After adopting a no-nonsense attitude to beat the 2001 budget through parliament in its first reading, the government started Monday to sweet talk lawmakers into approving the legislation on a second reading set for Friday. 

"The government thinks it appropriate to make a compromise to facilitate the second reading," Finance Minister Alexei Kudrin told deputies on the State Duma's budget committee.

And major compromises came quickly.

The government gave up on a hotly debated fight over income tax and agreed to let the regions keep most of the revenues they collect. It also pledged more money to the army and police. 

To plug the new gap in the 1.19 trillion ruble ($42.64 billion) budget, the deputies agreed to lower subsidies for the regions, trim the salaries of state bureaucrats and pay less interest on state debt to the Central Bank. 

The government had fought hard to keep 16 percent of income tax revenues and had included that amount in the first draft of the budget. But Monday it caved in to deputies' demands that the regions be allowed to keep 99 percent. 

In return, the budget committee agreed that the government would slash subsidies to the regions by 21.2 billion rubles. 

The military, its pride wounded by the sinking of the Kursk submarine and the lack of a resolution to the ongoing war in Chechnya, will get 12.6 billion rubles more than the 206.3 billion rubles earmarked in the first draft of the budget. 

The police will get 2 billion rubles in addition to the original 129 billion rubles they were alloted. 

But cuts loomed with the new expenses as the committee looked for ways to fill the widening gaps in the budget. 

Lawmakers came close to slashing the budget of war-torn Chechnya from 4.5 billion rubles to 2.5 billion rubles. 

"If you do not specify how the money will be spent, it will be simply stolen," said Georgy Boos from the Fatherland-All Russia faction. 

"What is the purpose of putting money into Chechnya if we're periodically destroying everything we build there?" echoed one of Boos' aides on the committee. 

But the measure was voted down 11-10 with seven abstentions. 

The committee cut diplomats' budgets by $100 million. 

Lawmakers also wanted to slash the budgets of all the ministries by 1.5 billion rubles, but settled on 1.2 billion rubles after hearing a fierce defense mounted by the Tax Ministry. 

The Tax Ministry, which plans to bloat its payroll by another 7,000 employees, will get to keep the 300 million rubles. 

"Hey, they did not cut our budget," a clearly delighted Deputy Tax Minister Sergei Shulgin exclaimed after the vote. 

Still short on cash, the law makers decided to pay off interest on the government's debts to the Central Bank at a 1 percent interest rate instead of 2 percent. The adjusted rate would cost the Central Bank 2.9 billion rubles in revenues. 

"They can offset [the loss] from their profits," said Deputy Nikolai Gonchar, who earned recognition in 1999 for loudly attacking the Central Bank's decision to conduct activities through the offshore FIMACO company. 

The government hopes that the changes ironed out with the budget committee will help the budget gain stronger approval from law makers Friday than it got in the first reading Oct. 6. The budget passed with a narrow six-vote margin. 

The budget committee's approval does not necessarily mean the budget will pass the Duma. But the committee's position is a clear indication of the mood in parliament as all of the factions are proportionally represented on it. 

"The second reading is no less important because it sets the balance of interests of various social groups," Prime Minister Mikhail Kasyanov said Monday in remarks reported by Prime-Tass. 

After the second reading, the budget goes through a third and a fourth reading in the Duma before going to the Federation Council for approval. President Vladimir Putin must then sign it into law.

TITLE: IN BRIEF
TEXT: Kursk Theory Sinks


MOSCOW (AP) - No fragments of a foreign submarine have been found near the sunken submarine Kursk, and officials no longer consider a collision with another vessel to be the most likely cause of the tragedy, Deputy Prime Minister Ilya Klebanov said Friday.

Investigators still haven't determined what caused an explosion that sunk the Kursk on Aug. 12. Officials had insisted that the most likely cause was a collision with a foreign submarine or ship. Klebanov said submersibles inspected a 150-square-kilometer area around the Kursk but found no pieces of a foreign submarine.



Latvia Hot and Cold


MOSCOW (AP) - The Russian Foreign Ministry on Thursday protested a decision by Latvia to tighten visa requirements along its border with Russia, a ministry statement said. The new rule affects Russians living in border regions and will hinder cross-border contacts and trade, the statement said.

Also Thursday, in Riga, Latvian legislators rejected a bill that would have asked Russia to compensate Latvia for the nearly five decades of Soviet rule.

Deputies in the 100-seat parliament voted 14 to 13 against the bill. The other 73 either weren't present or abstained.

The proposal said claims should be made for Soviet-era repressions and environmental damage. A commission would have been set up to determine how much to ask from Russia. 



Reporter Beaten


MINSK, Belarus (AP) -An opposition journalist and parliamentary candidate has been beaten up in his apartment building hallway in Minsk, his wife said.

Alexander Feduta, 35, a reporter for Russia's Moskovskiye Novosti weekly and Belarus' opposition newspaper People's Will, suffered concussion, a broken tooth and a broken nose in the attack Thursday night, said Marina Feduta. Moscow News said in a statement carried by Interfax that "We are inclined to think the attack was carried out because of his journalistic activities and his political opposition to the regime of President [Alexander] Lukashenko."

Feduta worked as a Lukashenko public relations aide until 1994, when he quit in protest against the crackdown on independent media.



Meat Smuggling


MOSCOW - (SPT) Authorities discovered 15 tons of meat in a railroad sleeping car coming from Ukraine, apparently smuggled into Russia to avoid customs duties, a customs spokesman said Thursday. The meat had not passed health inspection and was packed into several compartments meant for passengers, the spokesman said on condition of anonymity. 

The meat was apparently intended for sale in Moscow stores or markets, he said. He did not say what type of meat was smuggled. The meat was sent back to Ukraine, the spokesman said.



Security Tightened


NAZRAN, Ingushetia - (SPT) Federal troops on Friday tightened security at checkpoints across Chechnya and posted extra guards near administrative buildings following a deadly bomb blast in Grozny, officials said.

At least 10 people were killed and 16 were injured on Thursday when a powerful bomb went off inside a car parked near a police station in Grozny.

An official in the pro-Russian Chechen administration said that police had detained three men in Grozny in connection with the bombing. Twelve others were also detained in a sweep of the neighborhood where the bombing occurred.

TITLE: Georgia Hit by Rebel Attack
PUBLISHER: The Associated Press
TEXT: NAZRAN, Ingushetia - Federal combat helicopters swarmed above Chechnya's border with Georgia on Monday after border guards came under intense rebel shelling overnight, officials said.


No casualties were reported in the attack on the border guards' checkpoint in the Itum-Kale region of Chechnya. For the second night running, the guards had to call in artillery bombardment to disperse their attackers.

Rebels over the weekend attacked a 20-truck military convoy as it passed through Grozny, and four soldiers were wounded when the lead truck veered onto a remote-controlled land mine, officials said. The rebels opened fire Saturday from two sides as the convoy passed through the city's Oktyabrsky district, the press service of the United Army Group in the North Caucasus told Itar-Tass.

The soldiers were wounded when the personnel carrier leading the convoy struck the mine, the press service said. The attackers were dispersed by intense fire from the federal troops.

The attack occurred in the same Grozny district where a car bomb went off outside a police station on Thursday, killing at least 10 people and injuring 16. A total of five people have been detained in connection with the bombing, a military official said Sunday.

Also Sunday, NTV television said that former Chechen police chief Bislan Gan tamirov had been reappointed Friday to his post as deputy chief of the Kremlin-appointed administration in Chechnya.

Gantamirov, who once supported the separatists but later switched sides and became the mayor of Grozny, was dismissed from his post after a conflict with his boss, head of the Chechen administration Akhmad Kadyrov. 

Throughout the day on Sunday, Russian planes and helicopters bombed the Nozhai-Yurt and Kurchaloi districts of eastern Chechnya, while artillery pounded the southwestern Urus-Martan region and the southern Shali region, said an official in the pro-Russian Chechen administration. Combat helicopters strafed the Itum-Kale district, trying to destroy small bands of rebels and created blockages on the mountain paths they use to transport men and supplies.

Rebels fired 16 times at federal checkpoints and administrative buildings, including seven times in Grozny, using small weapons and grenade-launchers. Seven servicemen were killed over the past 24 hours, the official said on condition of anonymity.

TITLE: Russia and U.S. Forge Bear-Hunting Quota
AUTHOR: By H. Josef Hebert
PUBLISHER: The Associated Press
TEXT: WASHINGTON - The United States and Russia, concluding several years of negotiations, were to sign an agreement Monday to increase the protection of polar bears in the arctic region of northeastern Siberia and Alaska.


The agreement will for the first time establish quotas on how many bears can be hunted for subsistence by native tribes in both Siberia and Alaska. Bear management decisions would be made by new commissions in both Russia and the United States.

It also puts polar bear denning areas off limits and prohibits all commercial hunting and the killing of female bears with cubs, bears younger than one year, and the use of aircraft, traps or snares to hunt bears.

There are an estimated 3,000 polar bears in the Chukotka region of northeastern Siberia and in Alaska, said David Cline of the World Wildlife Fund, who participated in the negotiations that led to the agreement.

The bears range widely across northeastern Siberia, on the ice and islands of the Chukchi and Bering seas, as well as in the arctic region of Alaska.

The pact was to be signed Monday at a State Department ceremony by Yury Ushakov, Russia's ambassador to the United States, and David Sandalow, assistant secretary of state for oceans and international environmental and scientific affairs.

While the Chukotka and Alaska polar bears are growing in numbers, many conservationists fear they may one day begin to decline under the threat of poachers and commercial hunting if bilateral agreement on management plans are not established by both Russia and the United States.

Bear hides are worth thousands of dollars. There has also been illegal trading in bear gallbladders, which are viewed as having medicinal value, particularly in certain parts of Asia.

"This agreement is extremely important for this particular bear population," Cline said. "It's better to have legalized [subsistence] hunts rather than widespread poaching."

He noted, for example, that it assures bears are protected in what has become known as "the polar bear nursery" - a Russian island straddling the Siberian and Chukchi seas about 100 kilometers north of the Siberian mainland.

"Eighty-five percent of female polar bears in this population actually go there to build their maternity caves," said Cline, who lives in Anchorage, Alaska, and has worked on conservation programs there for three decades.

The new U.S.-Russia agreement for the first time establishes a bear management and conservation plan that includes participation of native tribes in both Alaska and Russia on the management commissions, he said.

"It brings these two nations together to protect and manage this particular population. If we can have agreement on polar bears, why not on walruses and other wildlife in the future?" said Cline.

TITLE: MirCorp Invests Millions in Space Tourists
AUTHOR: By Peter Graff
PUBLISHER: Reuters
TEXT: MOSCOW - They have already promised to blast a winning U.S. game show contestant into space and turn the Mir space station into a money-spinning cosmic tourist Mecca. 


Now, Western investors who bought the commercial rights to the 14-year-old Russian orbiter have announced another project ready for take-off - a $117 million stock market flotation that would value their company at $1.3 billion. 

Never mind current poor market conditions for initial public offerings. MirCorp has to convince the Russian government not to turn their only asset into a fireball. And deal with a nasty problem of solar flares. 

"It's a real company," Jeffrey Manber, president and CEO of MirCorp said in a brisk New York accent down the line of his Moscow mobile phone. "We've put in over $30 million and committed to another $20 million this year. We're not wackos." 

MirCorp aims to list shares simultaneously in Europe, the United States and Asia some time in February or March. 

"So far, we've been focusing our attention on institutional investors, at the level of $5, 10 million," Manber says. "We've been getting tons of e-mails from people saying, 'I want to invest $10,000.'" 

The announcement jumped the gun: Manber himself was surprised to hear that his headquarters had already put out the IPO news release on Thursday, before MirCorp even picked a bank to underwrite it. But that's a good sign, he says. 

"Frankly, we weren't planning to announce it yet, but it got leaked," he says. "It's one of the things that shows just how much people around the world care about this. We're holding meetings and suddenly it's in the friggin' Wall Street Journal." 

MirCorp's business plan is simple. Lots of people want to go to space, and some of them are very rich. Russia has a space station that it can't afford to keep flying on its own. 

Match the demand to the supply and presto. Earth's first commercially funded manned space program. 

Last year, after Russia announced that it was planning to ditch Mir to focus its meager resources on the new International Space Station, MirCorp rushed in. Since February it has paid for a series of space flights to keep the station aloft. 

It plans to charge $20 million to space tourists - it calls them "citizen explorers" - for a weeklong trip to Mir. 

Business looked good. The first customer, an American multimillionaire space buff, is already being put through his paces at Star City near Moscow. James Cameron, director of the film "Titanic," said he'd like to go. 

Best of all, the producer of the hit U.S. television show "Survivor" signed on for "Destination Mir," a game show that would end with the winning contestant being blasted into space. NBC wants to air it in the 2000-01 television season. 

But last week two top Russian officials made announcements that threatened to blow a big black hole into MirCorp. Deputy Prime Ministers Ilya Klebanov and Alexei Kudrin both said Russia was going to let Mir fall out of orbit and burn up in the atmosphere. A rare shower of solar flare activity has been knocking the Mir off course, and if steps are not taken, it will plummet. 

That requires urgent launches, at a time when NASA wants Russia to use its rocket-launching capabilities to build the new $60 billion International Space Station, which is already years behind schedule. 

Manber says the Russians have agreed to send a vital resupply mission to Mir next week, on credit. MirCorp's private and institutional investors have promised to come up with the cash after the launch takes place. 

Manber acknowledges that Russia's threat to vaporize Mir is a big problem. 

"Officially, we have not talked them out of it yet," he says. "What they are saying is: If you meet your financial commitments, we will boost the Mir."

TITLE: Bykov's 'Victims' Found Alive and Well
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Television stations broadcast images of police loading the black-bagged bodies onto ambulances.


An investigator gave an interview to Kommersant about the autopsies.

Tearful relatives visited a funeral home to find out how much it would cost to bury their loved ones.

But it was all a hoax.

The much publicized double murder investigation that landed aluminum tycoon Anatoly Bykov in jail took an abrupt turn Friday when authorities admitted they had staged the killings.

The Prosecutor General's Office downgraded the charges against Bykov, a former head of the mammoth Krasnoyarsk Aluminum Plant, from murder to conspiracy to commit murder.

Deputy prosecutor Sergei Lapin said that former Bykov ally Pavel Stru ga nov and his bodyguard are alive and well and the prosecutor's office had carried out the elaborate deception to prevent an assassination plot from being carried out.

Bykov is being held in Moscow's Lefotovo Prison. 

"Measures to ensure [Struganov's] safety and to find those who were conspiring the murder have been taken," Lapin said. He added that investigators have evidence to prove Bykov ordered a hit, but would not elaborate. He also would not say what motivation Bykov has to order Struganov's killing.

A former boxing instructor, Bykov built up a fortune that includes a 28 percent stake in the Krasnoyarsk plant, Russia's second largest aluminum smelter. A series of disputes led to a falling out with Krasnoyarsk regional Gov. Alexander Lebed last year before Bykov left for Hungary.

While he was there, Russia issued an arrest warrant on charges of money laundering, gun-running and murder. Hungary sent him to Krasnoyarsk in April and the police locked him in prison. By kov was released in August pending trial.

Struganov, who is thought to have links to criminal circles, was found shot dead with his bodyguard Vyacheslav Ismendirov in his Moscow apartment in a wealthy neighborhood on Kutuzovsky Prospect on Sept. 29.

Major television stations beamed footage of bodies being carried out of the apartment building. Bykov was arrested on suspicion of murder last week.

Some reports suggested the murder charges were lodged to pressure Bykov into giving up his stake in Krasnoyarsk Aluminum.

Questions about the deaths arose after confusing contradictions became apparent. The bodies were carried out of the building head first and not feet first, as is usually done with corpses. Also, the bodies were put in an ambulance instead of a hearse.

Andrei Kuzin, editor of the "Road Patrol" crime show that taped the event, said Friday he had not noticed anything out of the ordinary and it had looked like murders had really been committed.

Then Struganov's funeral, scheduled for Oct. 5, was postponed. NTV television showed an interview with a Krasnoyarsk undertaker who said Struganov's relatives visited his office and inquired about prices but placed no orders.

Then the warrant used to search Bykov's dacha surfaced. The warrant said the search was authorized on the basis of "testimony from the victim."

"How can we trust our law enforcement agencies after that and why should we believe that the rest of the case has not been staged as well?" Genrikh Padva, Bykov's chief lawyer, said in a telephone interview. But Lapin said the operation had been carried out "within the boundaries of the law."

TITLE: Apathy Wins Out in State Duma Election
AUTHOR: By Masha Kaminskaya
PUBLISHER: Staff Writer
TEXT: The election for the vacant Duma seat in St. Petersburg's district No. 209 finally took place on Sunday - and was promptly declared null and void since not enough people cast their ballots.


But that may have been a blessing in disguise, after two weeks of campaigning marred by recriminations, lawsuits, and allegations of vote-buying on the day itself.

According to preliminary results released Monday, Yury Savelyev got 36.8 percent of the votes, leaving behind Natalya Petukhova and Anatoly Golov with 26 percent and 17 percent respectively.

But according to Rita Valova, an official with the City Electoral Committee, only 18.67 percent of the potential 435,000 voters took part in the election - well short of the necessary 25 percent required to make it valid.

On Sunday evening - traditionally the most active time on election day - polling station No. 184 was eerily quiet, as several members of the electoral committee sat chatting in low voices under the gaze of eight observers.

"People are tired of elections. We had a municipal election in December, the presidential election in March, and we elected a governor in May," said Tamara Bystrova, head of the polling station in the city's Vyborgsky district.

"Another reason [for the low turnout] is that the central heating is out in a lot of buildings nearby," she said. "And in one of them, an elevator is out of order. Who would bother to go out and vote [in such conditions]?"

"During the campaign, a voter is piled with information from the media and with candidates' promises. Once the election is through, the winner forgets his voters altogether," said Viktor Shishov, a member of the electoral committee for the district. 

The district - which includes two of most populated regions of the city, Kalininsky and Vyborgsky - was represented in the Duma by Galina Starovoitova, who was murdered in St. Petersburg in 1998, and by Sergei Stepashin, who resigned the seat when he became head of the Federal Audit Chamber.

Twelve candidates were contesting the vacant seat, with the most colorful including Yury Shutov, a businessman and former aid to Gov. Vladimir Yakovlev, in jail on charges of masterminding contract killings, and Mikhail Zhivilo, a Moscow-based businessman wanted by federal investigators in connection with an assassination attempt against Aman Tuleyev, governor of the Kemerovo region. Zhivilo is still missing.

The "winner," Yury Savelyev, is the rector of Baltic State Technical University, and has attracted the ire of the U.S. government, which has accused him of handing over missile technology to Iran.

The election - which cost taxpayers 2.6 million rubles - was as much about the court room as the campaign trail. 

In early October, Ruslan Linkov, former aide to Starovoitova, filed a suit against Shutov, accusing him of libel and demanding that court annul Shutov's candidacy. According to Linkov, Shutov had published an article that reportedly connected Linkov with the assassination of Starovoitova. The City Civil Court rejected the law suit.

Two days before voting, the court likewise rejected a lawsuit filed by candidate Sergei Andreyev, a Legislative Assembly lawmaker, who charged Petukhova with illegal campaigning.

Ovcharenko said that he and his colleagues saw a group of people wandering inside and outside the station, and reputedly offering money for votes - between 50 to 100 rubles each time.

Occasionally, a BMW would arrive delivering more money to be spent on the votes. The guards chased the group away from the station, said Ovcharenko.

"All these elections are fake. People will tell television how they support this or that candidate. In reality, they just don't give a damn," he said. 

According to an Interfax report quoting the City Electoral Committee chairman Alexander Garusov, a new election will probably be held in March.

TITLE: EU, Russia Get Ready for Summit
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: MOSCOW - In a meeting more wrought with philosophy than detail, representatives from the European Union on Thursday reiterated their long-standing support for Russia's entry into the World Trade Organization - but conceded that a free-trade zone is still far off in the distant future. 


"We will do everything possible to accelerate their accession," said Cathe rine Day, deputy director general of the European Commission, at a press conference after the day-long session. 

At the fourth annual meeting of the Cooperation Committee, which is under the Partnership and Cooperation Agreement between the EU and Russia, delegates discussed issues ranging from egg imports and intellectual property rights to the energy trade. 

In addition to WTO membership, Russia expressed interest in aligning its financial regulatory system closer to that of the EU, and in defining energy trade rules. 

This meeting was a warm-up for the Oct. 30 EU-Russia summit in Paris between President Vladimir Putin and French President Jacques Chirac, who will be holding the revolving EU presidency at that time. Between now and then, teams of experts from both sides will hammer out the details of trade, energy and tariff agreements. 

The EU is ready to share its expertise with Russia as it sits down to the WTO bargaining table, Day said. Because the EU is a large importer of Russian oil, it has a vested interest in doing so. 

Many of the bumps in EU-Russian bilateral trade relations will be beaten out during WTO talks, Day said. 

"Those WTO negotiations will take care of questions that concern the establishment of a free-trade zone," she said. 

These statements, however, don't necessarily mean that Russia's WTO status or lack thereof will change. This will become clearer at the Oct. 30 summit. 

Europe is also very interested in further penetrating Russia's banking sector, but thus far, restructuring has left potential investors in limbo, said Ma xim Medvedkov, deputy economic development and trade minister, and head of Russia's delegation. Ways of getting Russia out of this "limbo" will be clarified at the Putin-Chirac summit. 

Russia's energy sector is also badly in need of new technology and fresh investment, said Medvedkov. 

"This is key in creating an 'energy space' with Europe," Medvedkov said. 

The "energy space" and the so-called "energy charter" will formalize trade in this sector. The charter has already been ratified by a majority of European governments and is now being looked over by the State Duma, Medvedkov said.

TITLE: MARKET WRAP
TEXT: Worst May Lie Ahead For Record-Low RTS 


Equities lost 6.57 percent on the week following the Nasdaq's every move.


The Nasdaq was down 1.3 percent to 3,316.77, but its Friday gain of 242.09 points - the second-largest ever - inspired hope in the battered emerging markets.

"I will be surprised if it [the RTS index] declines this week," said James Fenkner, equity strategist with Troika Dialog.

Liquidity on the local market dried up after prices for blue chips hit a freezing point.

Most clients were not eager to unload their portfolios seeing oil prices shoot up close to $36 per barrel, a presage for windfall profits in the books of the oil majors at the end of the year.

Brent futures were up 8 percent to $32.52 on the week, though lower than at the close Thursday when the Brent hit $34.59.

"What happened here is amazing," said Fenkner. "No one had the courage to buy Russia."

Like in 1998, corporate governance remains an issue in the local market. But macro risks have been taken off the checklist after the government put the budget in order and oil rain poured into the state coffers.

But no one exactly knows when the RTS will bottom out from its spin of recent weeks. "I do not like to sound sour, but there is a chance that we haven't hit a year low yet," said Yevgeny Morozov, head of domestic sales at Renaissance Capital.

LUKoil and Tatneft weathered the storm best, shedding respectively 4.66 percent to $13.7 and 3.1 percent to $0.50. But the rest of the pack moved south at a faster pace.

Bellweather Unified Energy Systems lost 7.5 percent to 11.6 cents; Mosenergo declined 15.6 percent to 3 cents a share and Rostelecom - a local proxy for the Nasdaq - slumped 9.5 percent to $1.29.

But liquidity is low, so the market can shoot up any time, even if only a couple of buyers take the floor.

"It is difficult to buy stocks when the market is in such a non-liquid state," Fenkner said. "It can take off with a bang as soon as the first buyers turn up."

TITLE: THE TAX ADVISER
TEXT: Tax Code Amendments We Can Expect for 2001 


ALTHOUGH additional amendments to Part I and the newly passed Part II of Russia's Tax Code may pass this year, it looks unlikely that the long-anticipated chapter on Profit Tax will pass in time to become effective by January 1st of 2001.


Some of the amendments being put forward by the government include:


. Transfer pricing rules. Current transfer pricing regulations allow transaction prices between related entities to deviate up to 20 percent from market prices. As this has been used as de facto permission to allow entities to transfer profits offshore, the government would like very much to clean up this loophole.

. VAT exemption. Part II of the new Tax Code provides for VAT exemption for businesses with a turnover of less than 1 million rubles ($35,700) within a three-month period. Once the turnover of a small business exceeds 1 million rubles within three months, one interpretation of the law as it is now worded provides for a retroactive liability in tax and penalties for the entire amount. The proposed amendment would provide for tax liability only on the excess.

. Moment of tax-liability settlement. At the moment, Russian legislation considers a taxpayer's tax obligation as fulfilled the moment a payment order is presented to the bank. This has led to a number of instances where payment orders were deliberately provided to insolvent banks, satisfying the taxpayer's obligation to pay but without transferring funds to the state. The proposed changes would deem the liability of the taxpayer fulfilled only when funds are in fact transferred from the taxpayer's account.

. VAT accrual. As part of its long-term goal of moving Russia to a complete accruals accounting basis, proposed changes would require taxpayers to use the accrual method for determining their VAT liability. Currently, only those taxpayers that do not have an established accounting policy may use the accrual method of accounting.

. Local exemptions. The issue regarding the ability of local administrations to grant concessions on their portion of federal taxes continues to flow back and forth. Recent amendments to the law on profit tax brought the ability of the regions to grant these types of concessions into question. The passage of Part II of the Tax Code restored this ability (despite the objections of the Finance Ministry). As the ministry remains opposed, this debate will most likely continue.




Tom Stansmore is head of the St. Petersburg branch of Deloitte & Touche CIS. For more information or advice, call Deloitte & Touche on 326-93-10.

TITLE: THE LAW ADVISER
TEXT: On Domain Name Legislation 


EVERYONE who has ever dealt with the Internet has encountered "domains" and "domain names." From the technical point of view, a domain is a place mark used on the Internet to represent the location of a computer server. Usually, domains are the locations of Web sites or e-mail addresses. Every domain must be unique. Therefore, specialized organizations have been established to register all domains, so as to ensure that each domain is used on the Internet not more than once. 


In addition to this purely technical function, domains are also important identifiers for their owners, since they allow the Internet-surfing public to find out various information about their domain owners. Unfortunately, for many years there were no clear regulations about who would be permitted to register a particular domain. This led to a situation where anyone could register a well-known name of a company or individual as its own Internet address. For some less-than-scrupulous people this became a profitable new business.

This "business," which is now called cyber-squatting, has given birth to a new type of litigation: domain-related lawsuits. Moreover, many countries have adopted new legislation devoted specifically to the protection of domains. In other countries, where there is no special legislation, the courts have been using the general trademark and unfair-competition laws as the basis for rendering their judgments in disputes over domains.

Russia is also affected by cyber-squatting and domain litigation. Although the Russian court practice on this issue cannot yet be considered to be prolific, several recent milestone cases have produced some major legal developments here.

One of the most famous and influential of these cases is Eastman Kodak Company vs. Grundul. Mr. Grundul, a private entrepreneur, registered the domain www.kodak.ru as his personal Web site. On it, he offered consumers various cameras and films for sale, some of which were produced by Kodak.

In Kodak's opinion, Mr. Grundul violated Russian trademark law, since he used in his domain name Kodak's trademark "kodak," which is registered in Russia. The Moscow Arbitration Court initially ruled in favor of Mr. Grundul: In the court's opinion, Russian trademark law does not apply to domains, because the latter cannot be described as goods or services, which must be the subject of a trademark. The courts in the appeal and cassation instances also supported this ruling.

However, the vice chairman of the Higher Arbitration Court challenged this ruling, pointing out that, first, in today's commercial practice, domains are similar to trademarks, because they are able to distinguish goods and services of one legal entity or individual from similar goods and services of other legal entities or individuals; and secondly, domains that contain trademarks or trade names actually themselves have commercial value.

As a result of this challenge, the Higher Arbitration Court has decided itself to review this case. We hope that, for the sake of good commercial business practice in Russia, this court will issue its ruling in favor of Kodak. 

Similarly, Quelle Aktiengesellschaft AG challenged a third party's use of the domain www.quelle.ru, and Mosfilm, the famous Russian movie production company, challenged a third party's use of the domain www.mosfilm.ru. In both cases, these two companies received decisions supporting their challenges.

Nevertheless, quite a number of issues associated with domain disputes still need to be resolved. We hope that future court practice and legislative developments in Russia will help to resolve these, and other, Internet-related issues.



For more information or advice, please contact James T. Hitch or Igor Gorchakov at Baker & McKenzie's St. Petersburg Office (tel: 325-83-08, fax: 325-60-13).

TITLE: Global Business Is Driving Workers Around the Bend
AUTHOR: By Robert Wiemer
TEXT: ACCORDING to a Reuters dispatch out of the Geneva headquarters of the International Labor Organization last week, one of the side effects of globalization is a worldwide work force gradually being driven into depression, anxiety, stress and burnout.


An ILO subsidiary, the World Federation for Mental Health, surveyed conditions in the United States, Britain, Germany, Finland and Poland. Last week, it issued a report that says depression is now the second most disabling illness, after heart disease.

The report echoes a study issued late last year by Surgeon General David Satcher. It was the product of two years of reviewing thousands of published research studies on mental health. It estimated that mental illness would affect one out of every five Americans during their lifetimes. Reacting to that, Laurie Flynn, executive director of the National Alliance for the Mentally Ill, said: "The gap between what we know about mental illness and what we are actually doing to help people is huge - and deadly. We'd like to see this report move beyond the printed page into policy action." Dr. Allan Tasman, president of the American Psychiatric Association, said: "The 1999 Surgeon General's report can do for mental illness what the Surgeon General's 1964 report did for smoking and health." So far, however, nothing much has happened.

Neither of these reports comes as any great surprise at the grassroots level of American politics. That is where people use bumper stickers to express their most profound fears and feelings, and sanity has for years been a leading topic of bumper commentary, which is the mobile equivalent of the sound bite.

These anonymous writers manage to edit their comments down to bumper length, as in: "I don't deserve self esteem," or "Some days, it's just not worth gnawing through the straps." The ILO report said clinical depression has become one of the most common illnesses in the United States, afflicting one in 10 working-age adults. The economic cost of this disease is estimated at $44 billion in the United States and four percent of the European Union's gross national product.

According to the ILO, much of this is caused by the pace of globalization, work-place surveillance, dysfunctional office politics, overwork and job insecurity. Because of the economic loss associated with this trend, the ILO describes the report as a wake-up call. What's more, the organization paints a grim picture of the future if nothing is done. It predicts that within 20 years mental, neurological and behavioral disorders will outrank traffic accidents, AIDS and violence as a primary cause of work years lost from early death and disability.

Translated into bumper-sticker terms, that means: "Where are we going? Why am I in this handbasket?" 

One bumper sticker advises: "Ignore the propaganda. Focus on what you see." If the ILO is even half right, Americans are seeing a lot of strange behavior. It says many Americans are afflicted by severe mental illness. And it estimates about 80 million Americans have some psychiatric impairment. As another bumper sticker says: "Normal is a setting on my washing machine."



Robert Wiemer is a columnist for Newsday.

TITLE: Trustees Sign Deal on Berezovsky's ORT Stake
PUBLISHER: The St. Petersburg Times
TEXT: Fourteen journalists and intellectuals signed an agreement Monday to create a new company through which they would hold in trust Boris Berezovsky's 49 percent stake in ORT television, news reports said.


The decision to create Teletrust was "purely political," Berezovsky said in televised remarks.

Berezovsky proposed the share transfer last month, saying that handing his stake in ORT to the intelligentsia would safeguard the channel against what he called increasing government pressure. ORT is 51 percent state-owned.

The documents were signed by writer Vasily Aksyonov, theater director Yury Lyubimov, the former deputy head of the presidential administration, Igor Shabdurasulov, and journalists Sergei Dorenko, Vladimir Pozner, Vitaly Tretyakov, Yegor Yakovlev, Natalya Gevorkyan, Otto Latsis, Igor Golembiovsky, Georgy Gulia, Tamara Zamyatina, Kirill Kleymenov and Rustam Khamdamov.

Berezovsky also said that he would meet with prosecutors on Tuesday as a witness in the so-called Aeroflot case, which involves allegations of the misappropriation of up to $600 million. He added that his onetime rival Vladimir Gusinsky advised him not to attend the meeting with prosecutors, Interfax reported.

TITLE: State Sets New Standards for Coffee
AUTHOR: By Dina Vishnya
PUBLISHER: Vedomosti
TEXT: Manufacturers sneaking chicory, acorns and caramel into their low-quality coffees are soon to be publicly exposed. They will be required to label their products as coffee drinks once a new state standard for instant and natural coffee is introduced.


The new standard is being lobbied for by the recently established Organization of Coffee Manufacturers in Russia, which includes Kraft Foods, Tchibo, Montana Coffee, Paulig and Douwe-Egberts, who produce Moccona brand coffee. 

At present, generic and low-grade coffee controls about 30 percent of the coffee market, said a representative with a major coffee firm.

A significant number of these products do not meet international standards and, by the same token, the proposed state standard. 

Annual retail sales of coffee comprise between $600 million and $1 billion in Russia, according to various assessments. The Grand trading house assesses the instant coffee market at 60,000 metric tons with a wholesale turnover of $800 million per year.

According to international standards, the word coffee means a dry product mixed with water and made exclusively from coffee beans. 

"Russian standards differ radically from those that are accepted internationally," said Jennifer Galencamp, director for foreign corporate affairs with Nestle Food. 

The Russian standard is stopping larger firms from pushing their comparatively expensive caffeine-free coffee on the domestic market. Douwe-Egberts, Kraft Foods, Tchibo and Montana Coffee all offer caffeine-free products.

"The current state standard is based on antiquated criteria and determines the quality of a product in terms of the caffeine and the sugar it contains," Galencamp said.

"Under this standard, caffeine-free coffee made from high quality beans is not coffee. Coffee drinks that at best are made from chicory and at worst from production leftovers - from shells or grain - are formally known as coffee."

Mysore Gold and companies with less-memorable names that make coffee by "the client's recipe" - ubiquitous in Russia and many other ex-Soviet Republics - fall within the low-quality category, the more well-known manufacturers say unofficially.

According to several major players in the coffee market, once the standard has been finalized, a large portion of low-grade brands will be relegated to the coffee-drink category and marked accordingly.

"Because of the muddle over the standard," said Alexei Melnikov, head of Douwe-Egberts in Russia, "manufacturers of natural coffee lose their potential consumers, who, by purchasing so called 'real Brazilian coffee' and realizing that it is a poor-quality product, lose faith in the big brands through association."

Melnikov said that international manufacturers of the brands for the mass market, such as Nestle and Kraft Foods, are the first to be affected. The price-sensitive Russian consumer chooses coffees of dubious brands because they are around 5 rubles to 10 rubles cheaper.

Rostest-Moscow is working on the state standard for coffee and is bringing it in line with international standards. This process could take several months, an employee with the State Standards Agency said.

TITLE: IN BRIEF
TEXT: $100M Baltika Boost


ST. PETERSBURG (SPT) - Baltika, the country's largest brewery, plans to invest over $100 million to increase production in 2001, compared with $70 million for this year, Interfax quoted Baltika general director Taimuraz Bolloyev as saying on Monday.

Bolloyev said the investment plan - which has already been approved by Baltika's board - includes purchasing new plants in Siberia and the CIS, Interfax reported.

Other company projects for next year include improving its distribution system and warehouse capacity, as well as building a trucking transport terminal and an automated loading and unloading system.

With 569 million liters of output from January to August - up year-on-year from 352 million - Baltika holds 20 percent of Russia's beer market.



Bank Capital Rules


MOSCOW (SPT) - The Central Bank has issued new regulations detailing capital requirements for banks, Segodnya newspaper reported Monday. 

Newly created Russian banks must have at least 24.5 million rubles ($878,000) on hand, while a subsidiary of a foreign bank operating in Russia must have 244 million rubles.

To receive a general license, which gives a bank the right to perform all financial operations, the minimum capital is 122 million rubles, the paper said.



Port Volumes Up


MOSCOW (Interfax) - Russia's sea ports in the first eight months of this year handled 52.3 million tons of dry cargo, 7.4 percent more than during the same period last year, the Transport Ministry said Monday.

Rosmorflot, the ministry's commercial sea shipping service said that more than 20 million tons of cargo was processed through port facilities owned by other sector enterprises - 8 percent more than last year for the same period.

Rosmorflot said that Russian sea ports also handled about 100 million tons of liquid cargo, which contributed to the strong showing by ports in the Northwest, where the Vysotsk port volume was up 41.5 percent, St. Petersburg 16.4 percent, Kaliningrad 9.5 percent and Murmansk 12.3 percent.

TITLE: LMZ Gets Much-Needed Chinese Order
AUTHOR: By John Varoli
PUBLISHER: Special to The St. Petersburg Times
TEXT: Russia's largest and oldest maker of turbines for power stations, Lenin grad Metal Factory (LMZ), has just signed off on a deal for $120 million to make two 1,000 megawatt turbines for a Chinese nuclear power station.


While the Russian government signed the contract with the Chinese government to make the turbines for the Tyan Van nuclear power plant at the end of 1999, work on the LMZ turbines only began recently. The new turbines will be ready for action in 2003, said LMZ spokesperson Maria Aleyeva. 

"The Chinese order proves that other countries have faith in Russian engineering," said Aleyeva. "This is the largest order LMZ has, and it will allow us to earn hard currency and a total of 2 billion rubles in profit." 

This profit of nearly $71.7 million is, to say the least, a vast improvement over LMZ's postings for the first half of 2000 - a mere $5.3 million rubles in profit with $8 million forecasted for the whole year, according to Aleyeva. 

Indeed, the company has been struggling out of bankruptcy for the past two years and the three-year Chinese turbine order could be just the ticket to help it do so.

Since being sued in March 1997, the LMZ plant had been run by a court-appointed council of creditors. but last month, the council declared the company to be on the road to financial health and ended its tenure as the factory's ruling body. 

Part of the action that helped make that possible was a series of cost-cutting measures over the past 18 months, the installation of financial controls as well as discontinuing the manufacture of outdated turbines, Aleyeva said. 

LMZ was founded during the reign of Tsar Alexander II in 1857. It began making turbines in 1907 and was requisitioned by the Bolsheviks in their effort to electrify the entire nation. Indeed, the Bolsheviks themselves were known for occasional capitalist forays when they sold turbines to the outside world. Within Russia, 80 percent of the turbines in use come from LMZ. 

Part of LMZ's reclaimed success is not new innovation, however, but old tradition: Russian engineering firms that produce equipment for power stations have always been more competitive on the world market than their foreign counterparts. 

At present, LMZ's debt totals 423 million rubles ($15.27 million), and about 64 percent of the debt is held by Vladimir Potanin's Interros Group, while Lenenergo, the St. Petersburg power company, owns 28 percent.

In March, LMZ completed four power turbines worth $19.2 million for a power station in Colombia.

LMZ's main shareholder is also Potanin's Interros, with a 51 percent stake. His holding company also owns a controlling stake in OAO Norilsk Nickel, the world's No. 1 palladium and nickel producer. Interros also has assets in oil, banking, and media.

"Potanin wants to have control over those parts of the St. Petersburg economy that can earn money, and especially those that earn hard currency through exports," said Lev Savulkin, senior analyst at the Leontieff Center for Economic Research, a local research institute.

"Therefore he has established control over profitable companies, like LMZ, Electrosila, LOMO [St. Petersburg-based maker of high-tech optical equipment formerly run by Deputy Prime Minister Ilya Klebanov] and others."

Germany's engineering giant, Sie mens AG, owns a 10 percent stake in LMZ, and also has a small joint venture, called ZAO Interturbo, which with LMZ also makes turbines.

Besides lucrative export deals, LMZ also expects to win new contracts from Unified Energy Systems - the Anatoly Chubais-run national power grid - when it carries out plans to upgrade its equipment over the next decade.

TITLE: Union Member Wins In McDonald's Case
AUTHOR: By Ana Uzelac
PUBLISHER: Staff Writer
TEXT: MOSCOW - A forklift operator at the McDonald's factory outside Moscow won a court case Monday against his employer - a precedent that might help unionize the Russian branch of a company famous for its dislike of workers' organizations.


A Moscow city court decided that McDonald's wrongly issued a strict reprimand against Yevgeny Druzhinin, said his lawyer, Vladimir Lutoshkin.

Druzhinin challenged the company's accusations of causing major financial damage, saying McDonald's falsified charges and broke the labor code.

Judge Tatyana Feodosova did not explain her motives for ruling in Druzhinin's favor, Lutoshkin said.

In a faxed statement, the McDonald's food-processing plant, McComplex, refused to comment on the court decision on Monday, explaining that it has not received or reviewed it yet.

McComplex reprimanded Dru zhi nin for damaging one forklift battery and destroying another while recharging them. Druzhinin claimed he had damaged only one battery and had never even seen the other, which was worth $2,500. 

It was the alleged ruining of the second battery that was the basis for the "strict reprimand" that McDonald's issued against Druzhinin - his second "strict reprimand" this year, more than enough to fire him.

Druzhinin said the accusations were part of a campaign to build a case for his dismissal and punish him for his activity in the company's fledgling trade union.

"Before I joined the union last year, my relationship with the management was very good," he said. "I was praised for my work and awarded the 1996 Best Worker prize."

But ever since joining the union, he's been subjected to a series of reprimands and warnings aimed at pressuring him to quit either the union or his job, he says.

"All of a sudden, I started being reprimanded for 'drinking at work' or 'abusing the company telephone,'" he said. Last year, Druzhinin was disciplined six times. "In private conversation, my superiors advised me to quit the union or face the consequences," he said.

The small McDonalds's trade union was formed in late 1998 as a response to large-scale wage cuts introduced after the August financial crash. It now includes just 18 of some 400 company employees.

The multinational corporation has never recognized the union's existence, though Moscow's trade union committee confirmed the union submitted its registration at the end of 1998. In a faxed statement, McComplex said it is "committed to following the law ... if the legal requirements are fulfilled."

However, a McDonald's statement said the majority of employees voted against a collective agreement and "never authorized a trade union to represent their interests."

In comparison to most other Russian workers, McDonald's employees are relatively well-off - their average salary is around $100, well above the national average of $82, according to The Associated Press, and they receive it regularly.

Russian law states a trade union can be made up of as few as three employees and is considered registered after it holds its founding meeting. Trade unions don't have to register with the Justice Ministry unless they want to obtain the status of a legal entity, which is necessary to open a bank account.

Refusing to recognize the existence of trade unions is a common way for companies to avoid negotiating with them, said Irina Stevenson of the American Center for International Labor Solidarity in Moscow, which also provided Druzhinin with a lawyer. "Both Russian and foreign employers are equally guilty of playing this card," she explained.

One of Druzhinin's arguments at the court hearing was that the decision to reprimand him had not been agreed to with the trade union as required by law.

McDonalds's operates 58 restaurants in Russia and is one of the largest international investors. Among 119 countries where the company operates, only five can boast of having a trade union within the McDonald's structure.

TITLE: OPEC Members Say Panic Is Not Justified
PUBLISHER: The Associated Press
TEXT: ABU DHABI, United Arab Emirates - Gulf oil producers sought to reassure consumers that oil supplies will not be disrupted, despite last week's violent events in the Middle East.


Attending a weekend oil exhibition in Abu Dhabi, ministers from Saudi Arabia, Kuwait, Qatar and the United Arab Emirates - whose countries provide about half of OPEC's current supply to the market - attributed Thursday's 11 percent oil price surge to traders' and consumers' fears of supplies being delayed or cut, and not to any real actions.

"There is no justification for this panic," said Saudi Arabia's oil minister, Ali Naimi.

And as a result, they said, there was no need to act on this now.

An attack on a U.S. warship Thursday in the Gulf of Aden, amid growing concern over the Israeli-Palestinian violence spilling over to politics and oil production throughout the Middle East, sent crude oil futures on the International Petroleum Exchange to a fresh post-Gulf War high of $35.30 a barrel.

The violence continued Friday, although with less intensity, and Brent November futures closed down at $32.52 a barrel.

It was no surprise that the ministers didn't say whether there would be another output increase by OPEC this year. Naimi said all options were open and OPEC may or may not act before its Nov. 12 meeting, depending on market conditions.

But they pointedly noted that after three output increases this year totaling 3.2 million barrels a day, OPEC's spare capacity is severely limited. Only one producer - Saudi Arabia - is still capable of significant increases.

Saudi Arabia has about 2 million barrels a day of spare capacity. Naimi said that if the market warrants it, his country would be willing to act alone on output.

The ministers, who met Sunday on the first day of the four-day oil exhibition, differed on the circumstances under which OPEC should use its price band mechanism.

OPEC has said it will raise output by 500,000 barrels a day if its basket price holds above $28 a barrel for 20 consecutive trading days, or lower output by 500,000 barrels a day if the basket price moves below $22 a barrel for 10 consecutive trading days.

Naimi said OPEC's priority now is to bring prices down to within the price band's target range.

The value of the OPEC basket of seven crude oils was $32.57 a barrel Thursday, the ninth consecutive day it has stayed over $28 a barrel since the mechanism restarted on Oct. 1.

The ministers reiterated previous calls they've made for industrialized consuming nations to reassess their high taxation of oil products, saying this was one of the main factors behind current high prices.

TITLE: Chevron Makes Deal To Buy Texaco
AUTHOR: By Robin Sidel
PUBLISHER: Reuters
TEXT: NEW YORK - Chevron Corp., the second-largest U.S. oil company, Sunday agreed to buy third-ranked Texaco Inc. in a $35 billion stock deal that will form an energy powerhouse, sources familiar with the situation said.


If approved by regulators, the deal will be the latest in a wave of transactions that have reshaped the industry by creating behemoths such as Exxon Mobil and BP Amoco.

Chevron and Texaco rank as the world's fifth- and seventh-largest oil companies and long have been viewed as ripe to participate in the consolidation sweeping the industry.

The new company, to be called Chevron Texaco Corp., will also go head-to-head against other industry leaders like Royal Dutch/Shell and TotalFina Elf.

The boards of both companies approved the deal Sunday after details of the transaction were finalized over the weekend, said the sources, who spoke on condition of anonymity.

Chevron and Texaco declined to comment.

Cost-cutting is a key goal of the transaction and Chevron plans to shave $1.2 billion in costs from the combined company, the sources said. Some of those savings will come in the form of 4,000 job cuts, which reflect seven percent of the combined companies' work force.

Although the deal is expected to raise an outcry from consumer advocates and politicians who say oil mergers result in higher prices by reducing competition, Chevron and Texaco are hoping regulators will be swayed by their contention that the U.S. will benefit from having a strong domestic energy supplier.

PaineWebber analyst Christopher Stavros wrote in a research note, "While we believe it is likely that regulators will require the companies to divest of some assets - most notably in U.S. refining and marketing - before granting approval, we do not see this as standing in the way of a deal.''

The combined company will have 11.2 billion barrels of oil equivalent (boe) and daily production of 2.7 million boe, making it the fourth largest, behind Exxon Mobil, Shell and BP.

Chevron expects the deal to boost earnings per share and cash flow after it achieves the cost-cutting goals, the sources said.

PaineWebber's Stavros wrote, "If we assume pretax $1 billion of cost savings and synergies from the combination, we estimate that the deal would be accretive to Chevron's earnings by roughly 20 cents a share in its first full year in 2002.''

The transaction values White Plains, New York-based Texaco at $64.87 a share, a premium to its closing price Friday of $55.125 on the New York Stock Exchange. Chevron will exchange a fixed 0.77 share for each of Texaco's approximate 545 million outstanding shares.

Chevron will also assume about $7 billion in Texaco debt.

The deal comes more than a year after previous discussions between the two companies fell apart over a disagreement about price. Since then, however, longtime Chevron boss Kenneth Derr retired and was replaced by Dave O'Reilly, who was viewed as having a softer touch in negotiating a deal.

But this time, Texaco is agreeing to less than the $70 a share that was offered last year by Chevron. At that time, it was widely reported that Texaco was seeking $80 a share.

Industry analysts this weekend expressed surprise that Texaco would be willing to sell out at a lower price during a time of high oil prices.

They also noted, however, that Texaco's stock has barely risen this year despite some of the strongest oil and natural gas prices in recent memory, and its shares are down more than 10 percent since it called off the talks with Chevron last year.

"Given that it looks as if the bid will be about $5 a share less than last year and Texaco has done some things to try to improve itself, it looks like a reasonably good opportunity for Chevron,'' PaineWebber's Stavros told Reuters.

Stavros wrote that although Chevron has the assets, profits and management to go it alone, "we also believe that the decision was made partly out of frustration for its own anemic share valuation.''

TITLE: Meteorite Holds Clues to Primordial Life
AUTHOR: By Paul Recer
PUBLISHER: The Associated Press
TEXT: WASHINGTON - A bus-sized meteorite that blazed to Earth in a spectacular fireball last January may have delivered to scientists the most pristine primordial matter ever recovered from space and could carry important new clues about the origin of life. 


The meteorite, estimated to weigh 220 tons when it smashed into the atmosphere, shattered and sprayed bits of space rock over a frozen lake in Canada's British Columbia. More than 70 eyewitnesses saw the fireball, and, a week later, Canadian Jim Brook went out in sub-zero temperatures and found bits of the meteorite on the frozen surface of Tagish Lake. He collected the black, charcoal-like fragments in a plastic bag and stored them in a freezer, preserving them in a pure state. 

Brook's careful handling will allow scientists to study matter that is virtually unchanged since the solar system formed some 4.6 billion years ago, said Peter Brown of the University of Western Ontario in London, Ontario, Canada. 

"These are the most pristine meteorite specimens on the planet right now,'' said Brown, who is first author of a study in Friday's edition of the journal Science. 

Brook collected about 1 kilogram of specimens. Expeditions in later months gathered some 410 additional fragments. But by then the material was beginning to weather away. The material is about the consistency of dried mud. Rain can cause it to crumble and wash away. 

Preliminary tests of the pristine material find that it is loaded with organic molecules of the type that some experts have suggested could have been the original raw materials for the formation of life on Earth. 

"Stuff like [the] Tagish Lake [meteorite was] pelting the early Earth,'' said Brown. "It is natural to assume that not only could organic molecules have been synthesized in the primordial soup on Earth, but they could have been brought here from an extraterrestrial origin.'' 

The meteorite's fireball was detected by satellites, enabling Brown and others to estimate the path of the space rock and backtrack it into space. They believe the object came from the asteroid belt, between the orbits of Mars and Jupiter. Brown said the object was probably jolted off a larger body and could have spent millions of years in orbit before being captured by Earth's gravity. 

Bits of the meteorite have been distributed to a number of worldwide labs and researchers are painstakingly analyzing it. They are looking for amino acids and other organic compounds. A report on those studies may be a year away, Brown said. 

When Michael Zolensky, a researcher at NASA's Johnson Space Center meteorite labs in Houston, thawed a bit of the material, he got quite a surprise. 

"It had a strong sulfur smell,'' said Zolensky. That showed just how pristine the material is, he said, because the volatile chemicals that cause a sulfur smell are usually lost long before meteorite specimens get to a laboratory. 

Lucy McFadden, a University of Maryland astronomer and asteroid expert, called the Tagish Lake meteorite "a treasure trove'' for scientists and said it could "add a tremendous amount to our knowledge of extraterrestrial material and the origin of the solar system.'' 

"This kind of finding makes one wonder about the origins of life - was it from the meteorites or did it just happen here?'' said McFadden. "It is tantalizing.''

TITLE: Global Eye
TEXT: Southern Exposure 


This week was a bad one for Christianier-than-thou political activists, it seems. Exhibit A: Bush-backer and Clinton-basher Matthew Glavin, grand poobah of the hard-right Southeastern Legal Foundation.

Glavin is best known for his ongoing court battle to have Bill Clinton disbarred by the state of Arkansas. He won a Supreme Court case last year, arguing that the federal government should not be allowed to use Census Bureau sampling data (which tends to reveal large pockets of hitherto-uncounted, less-than-white citizens) when drawing up congressional districts.

But now Glavin, 47, will have to leave off his efforts to keep them southeastern darkies in their places, The Associated Press reports. Instead, the Christian soldier will be facing indecency charges, having allegedly waggled his privy member at an undercover cop in the shadowy copse of an Atlanta park. He also allegedly obliged the officer with a friendly bit of cross-waggling before the cuffs came out.

Glavin's unseemly love handles have sent shock waves through the anti-Clinton, pro-darkies-in-their-place-keeping Right. "I'm absolutely shocked and dismayed that these sort of allegations would come up," said Georgia Representative Bob Barr, best known for his monomaniacal pursuit of Clinton over the years. "If this took place, the conduct itself is absolutely shocking."

Well, perhaps it's not quite so shocking, is it, Bob? After all, Glavin pleaded no contest to similar charges in 1996, before taking up the great white banner of the Lord. This time, he says, he really is innocent, but is stepping down to "protect the foundation."

And what a shame, too. For in addition to his vitally important battle to keep Bill Clinton out of Arkansas courtrooms, Glavin also had another red-hot iron in the legal fire: supporting the Boy Scouts of America in their righteous crusade to root out, er, gays from the organization.


Refrocked


Now we come to Exhibit B - or is that Exhibit AC-DC? Yet another hard-right holy warrior was forced to make a public exit this week, and once again, the cause was dat ole debbil, man-love.

At least John Paulk, national leader of the "ex-gay" movement, is not facing legal charges. No, it's the mere appearance of unseemly contact with the gentleman gender that has forced his ouster from the chairmanship of Exodus International, the Denver Post reports.

Exodus is dedicated to bringing men and women out of the bondage of homosexuality. And Paulk has been their high-profile Moses: Once an evil poofter in panty hose and frilly frocks, he was turned into a real he-man heterosexual by Jesus Christ. Paulk converted, got married - to an "ex-lesbian," no less! - and acquired so much man-musk that he even begat children. In return, the Lord rewarded him with the clearest possible signs of divine favor: a bestseller and his mug on the cover of Newsweek.

Then last week, Paulk dishonored his God and his organization in the most disgusting way imaginable: He (brace yourself) walked into a (O, children, avert your eyes!) gay bar in Washington. Paulk was quickly recognized (that's what plastering your big homophobic grin on the cover of Newsweek will do for you) and a photographer from the gay press recorded the scene. Even before Paulk was back in the bosom of his formerly gay family, news of his visit had hit the Internet.

Thus outed, Paulk at first claimed he'd simply ducked into the bar to use the bathroom, without realizing the establishment's gender exclusivity. Later, however, he changed his story, and said he'd gone to the bar merely to see if the "gay lifestyle had changed" since his salad days in silks and saffron.

His colleagues at Exodus were full of Christian forgiveness of Paulk's backsliding, of course - but that didn't keep them from deposing him as chairman. Exodus is part of "Focus on the Family," a right-wing Republican pressure group currently cheering lustily (but heterosexually) for that rootin', tootin', macho leader-type guy, George W. Bush. And for whited sepulchers like these, the outward show of evil (or righteousness) is all that matters.

For example, Bob Davies, an Exodus director, voted to oust Paulk even though he believed his story. "John was not going into that bar to have sex with another man," said Davies. "There's just been a lot of pressure on him. Homosexuality has always been an escape for John. When he went to bars in the past, he was a beautiful woman named Candy. He loved to escape."

Unfortunately, there is no escape from the "tough love" of overheated orthodoxians, so Paulk must walk the plank. Still, there is a bright side: Paulk may have lost his job - but the "beautiful Candy" has gained an ardent admirer.



Old Flame 


In other religious news, a 35,000-year-old "warrior spirit" is on tap to testify in a child-abuse case in the state of Washington. 

Both prosecutors and defense lawyers are considering calling the gigantic purple flame known as "Ramtha," who allegedly received the confession of two of his acolytes, the Seattle Post-Intelligencer reports.

Ramtha devotees Wayne Geis and Ruth Martin are charged with raping a 15-year-old girl as part of a campaign to turn her into their sex slave. The girl's father said the lovely couple were finally shamed into confessing their crime to the blazing Neanderthal entity at a Ramtha bull session.

The court will not have to lay on extra asbestos and fire extinguishers for Ramtha's appearance, however; the ancient one makes his communications to the world through the channel of medium J.Z. Knight, a former cable TV sales woman who has parlayed Ramtha's pronouncements on world peace, divine essence and really good deals on HBO into a profitable religiocommercial empire.

No word yet on whether Ramtha will be sworn in with his hand on the Bible or on a steaming pile of ritually slaughtered saber-tooth tiger meat.

TITLE: Peace Process Dying Amid Violence in Mideast
AUTHOR: By Anthony Lewis
TEXT: IN April 1993, as South Africans were negotiating an end to the apartheid system, white extremists assassinated a popular black leader, Chris Hani. Black anger brought riots that threatened to derail the negotiations. Nelson Mandela, asked by the white government to speak on state television, called for calm. The negotiations went on, and succeeded. 


But there is no Palestinian Mandela. The shattering events of the last two weeks have made clear that Yasser Arafat is unwilling or unable to play that role. He played a great part in putting the Palestinian cause on the world's agenda. But he does not have the vision, or the serenity, to turn his people toward the difficult compromises of peace and democracy. 

Palestinians say that Ariel Sharon's visit to the Temple Mount was a deliberate provocation for his own political purposes, and that is true. They say that their violent protests reflect deeply felt grievances, and that also is true. Their land has been seized, settlements planted in their midst by force and expanded even now. 

But black South Africans had grievances at least as profound. They had lived under white domination for centuries, their land taken from them, their status reduced to virtual serfdom. Yet under the leadership of Nelson Mandela and his colleagues they understood that patience and negotiation were the best way to vindicate their rights. 

The particular pain of these last days is that a negotiated settlement of the Israeli-Palestinian conflict seemed so near. At Camp David, Prime Minister Ehud Barak had offered concessions that were surely a basis for agreement. But Mr. Arafat did not respond with any show of flexibility. He evidently decided that it was time to move from the negotiating table to the streets. Once let loose, violence is hard to stop. It has led to the lynching of Israeli soldiers. Israel's weapons have taken nearly 100 Palestinian lives. 

On both sides hearts have hardened. Bitterness and fear mock the very idea of negotiation. "I have been eternally optimistic," an Israeli friend who was a founder of the Peace Now movement said to me on the telephone. "But right now it's hard to see a way out." 

The first step has to be an end to the violence. That means a clear signal from Chairman Arafat - the opposite of the signal he sent the other day by releasing some Hamas members from prison. It also requires restraint on the Israeli side. In the end the fundamental logic of the situation, human and geographical, points toward a solution something like the Barak proposals at Camp David. 

Before the recent events, more and more Israelis had come to understand that peace for them required allowing the Palestinians to have a political expression of their national feeling: a state in most of the West Bank and Gaza with its capital in East Jerusalem. It will be difficult to return to the negotiating process that had come close to that end. If Prime Minister Barak brings the right-wing Likud Party and its leader, Mr. Sharon, into an emergency government, that will be a further obstacle. Mr. Sharon is a symbol, to Palestinians, of disregard for their humanity. 

But I would not write off the possibility of some progress if and when calm is restored. Mr. Sharon, for all his jingoism and arrogance, has an interest in reducing the level of tension. And the only way to do that is to take practical steps on the ground. There could be another interim agreement giving the Palestinians political control over more of the West Bank. It could ease their lives by reducing the number of Israeli checkpoints they must pass to travel between their own cities and towns. Israel could impose a true freeze at last on all settlement activity. 

Of course all this would depend on a credible end to Palestinian violence. "The Palestinians are our neighbors forever," Prime Minister Barak said Thursday in an interview with CNN. "We will never lose hope of peace." Yes, the presence of the Palestinians is the inescapable reality of Israel's existence. But there is an alternative to peace: endless conflict, swelling now and again to cruel bloodshed. The horror of that alternative is what should eventually turn both sides back to the search for peace. 


Anthony Lewis is a foreign affairs correspondent for the New York Times, where this comment originally appeared. 


By Helen Schary Motro


"WHERE I live is safer than Lake Wobegon!'' That's what I always told friends from abroad who were jittery about visiting a place like Israel. "In my town you can walk down the street alone at 3 a.m. and not worry what's over your shoulder,'' I would say. "People lock their doors at night against burglars, not murderers or arsonists.''


I cannot say that anymore.

From my window in Herzlia, Israel, I glimpse a thin strip of the Mediterranean Sea half a kilometer away and, rising from a seaside cliff, the minaret of the old Arab mosque called Sidnei Ali. On Fridays, buses from all over Israel pull up, filled with Muslims who attend prayers. Last winter my daughter and I took sketchbooks and drew the beautiful mosque, the palm trees surrounding it and the worshipers on their way inside. 

On Monday, 250 Jewish demonstrators charged up to Sidnei Ali shouting "death to Arabs!'' A grenade landed on its balcony, thankfully causing no damage. When the mayor of Herzlia arrived on the scene after midnight to plead with the mob, they shouted invectives at her. Police found a barrel of gasoline; the caretaker's son discovered a crate of grenades. Police arrived, keeping the mob away from the mosque. Arrests were made and finally the mob dispersed. The night after the mob, two policemen and a soldier stood guard beside its doors. 

I had passed by the outside of Sidnei Ali countless times on my way down to the most beautiful beach in Herzlia. On Tuesday, I went into the mosque. The imam (priest) had only words of praise for the police protection and for the mayor. 

"We have to keep talking,'' the imam said. "We cannot throw away the thin threads of friendship that have been sewn.'' He plans to hold Friday prayers this week as usual. 

The mosque's caretaker considers the surrounding Jewish neighbors friends. The troublemakers are thought to have come from other, poorer neighborhoods. The mosque sits near an affluent area; the U.S. ambassador lives nearby. On Tuesday, a steady stream of local residents arrived to convey their solidarity. 

Jewish people are also stopping by a longtime Arab restaurant on the highway in Herzlia, and not because they are hungry. They drink a cup of dark coffee and shake the owner's hand. The restaurant is open for business. 

Another restaurant nearby is shut, a tarpaulin covering its doors where a photo of slain Israeli Prime Minister Yitzhak Rabin has been displayed for years. At 2 a.m. Monday, arsonists burned down its warehouse and the adjacent rented house where the Arab owners live. Luckily the house was empty - the owners had stayed in their home village near Tiberias because of the tensions. A smell of smoke hangs over the corner where the buildings stood; crates of lemons that escaped the fire wait for the tahina that was to be prepared. 

The overwhelmingly Jewish city of Herzlia is making efforts in its schools, community centers and houses of worship to cool tempers of frustrated youth, the element prone most to violence. 

This week's destruction, until now far away, mirrors all of Israel. Jews are attacked by Arabs, Arabs by Jews. The country feels like a ship springing a thousand leaks at once. 

Usually we listen to the morning radio to get traffic updates. These days, it reports dozens of roads closed as too dangerous to travel - main highways where thousands drive every day to work, to school. The boundaries have suddenly become constricted. 

This week, television showed tires burning, gutted vehicles, synagogues and their holy books destroyed by fire. They read out a long list of towns where lawless crowds - Jewish and Arab - were amassing. On the highway near my town, a concrete block hurled from an overpass at a car hit the Jewish driver, killing him. The police have ordered new equipment for crowd control. 

The dunes outside the mosque at Sidnei Ali are a place where lovers usually go to park. No lovers came there this week. 

Nobody I know shares the hatred that targeted Sidnei Ali, but all of us are overwhelmed with uncertainty and a terrible dread that, along with Jewish and Arab holy places, a serenity that was almost within our grasp has been trampled. Lake Wobegon it isn't. 


Helen Schary Motro, who is originally from New York, lives in Israel and is an attorney and a columnist for the Jerusalem Post. She contributed this comment to the Los Angeles Times.

TITLE: No Go-Getters in Small Town's Tourist Trade
TEXT: ALTHOUGH my tan is fading, I still have pleasant memories of my week-long vacation in Anapa, a town on the northern coast of the Black Sea - the beach, the sun, the sea, and the myriad fruit and wine markets. I soon recognized the fact that vacations don't run on these delights alone. The inhabitants of Anapa understand this, too.


About the only steady jobs in that town center on catering for tourists, and most people survive the winter on whatever they earn during the summer. Judging by the number and the style of the brick cottages that are either under construction or brand new, incomes in Anapa are not that bad.

Never let it be said, however, that Anapa's standards of service are high. For starters, at the bus terminal, one encounters taxi drivers who, when you decline to pay the sum they are demanding, will give you a hundred reasons why they cannot possibly take you for less. They also refuse bookings in advance on the grounds that they might miss a "client" while on their way to pick you up.

The pleasant aspects of the beach are marred by litter, and by the decaying holiday homes and sanatoria whose best days are gone. The tourist complexes were all erected courtesy of Soviet funding, and none has been renovated for at least 10 years.

There are small exceptions, such as the rest houses belonging to Gazprom, the Central Bank or the Tax Inspectorate, and a number of private hotels I was told about. But the remaining examples of holiday accommodation are in a pretty bad way.

However, they are by no means empty. One reason for this is the mass bookings from organizations who have reserved rooms for their employees through the company's welfare department, thus obtaining discounts of up to 90 percent - the kind of deal that allows people to overlook damp sheets, poor food and a lack of entertainment.

Privatization has left this industry almost untouched. Resthouses are owned by the municipal administration, and I saw no sign of old buildings having been snapped up by businessmen and converted into modern hotels. Restaurants and cafes are rare, and the main tourist attractions in the evening are shashlik barbecues, and karaoke.

Those who go to Anapa do so because it is cheap. But this state of affairs cannot last forever. The town needs tourists' money, money spent on decent service and worthwhile attractions. Those who should be providing it, however, are waiting for the clients to come to them - like the taxi drivers waiting endlessly at the bus terminal.

TITLE: U.S. Investigates Ship Attack in Yemen
PUBLISHER: Combined Reports
TEXT: ADEN, Yemen - U.S. Navy divers were trying to retrieve bodies from the mangled wreck of the USS Cole in Yemen's Aden port on Monday as plans were being made to take the warship to the United States for repairs, U.S. officials said.


Specialist teams have been brought into the poor Arab state to salvage the destroyer, which lies stricken in the southern Yemeni port of Aden after a suspected suicide bomb blew a gaping hole in its side and killed 17 U.S. sailors.

"The divers are in the water," said one U.S. defense official. "There are groups working to get rid of the twisted metal and carry out remains recovery."

The divers are among about 100 U.S. personnel sent to Yemen to conduct the investigation and salvage operation, code-named Determined Response, and which includes Federal Bureau of Investigation agents and a marine security platoon.

U.S. Navy officials have said a small boat in a group helping to moor the Cole for refueling had been laden with explosives and blew up alongside the ship, one of the world's most sophisticated guided missile destroyers.

Witnesses described two men aboard the boat standing to attention just before it exploded.

Yemen has arrested dozens of suspects for questioning in connection with the incident, which Yemen's President Ali Abdullah Saleh initially said was not a deliberate act but has since indicated he now believes it was an attack. 

The United States has said it is receiving full cooperation from the Yemeni government in the investigation, while Yemen has pledged to spare no effort in track down the perpetrators if it is proven that the ship was attacked.

But it remains to be seen how far the government of Yemen will go in cooperating with the investigation, said people familiar with the situation. FBI agents and other American investigators have no authority to detain or even interrogate people in Yemen, so the aid of local authorities is essential. 

Two little-known Muslim groups have claimed responsibility for the attack. One group under investigation has previously been linked to the kidnapping of tourists in Yemen, one official said.


- Reuters, The Washington Post

TITLE: Secret Memo Returns To Dog Gore's Campaign
TEXT: IN June 1995, U.S. Vice President Al Gore signed a secret agreement with Viktor Chernomyrdin, then the prime minister, calling for an end to all Russian sales of conventional weapons to Iran by the end of 1999.


But the deadline passed with no sign of a halt to such sales, despite complaints late last year and this year to senior Russian officials by Gore, U.S. Secretary of State Madeleine Albright and U.S. Deputy Secretary of State Strobe Talbott. Moscow continues to be a significant supplier of conventional arms to Tehran despite the Gore-Chernomyrdin deal, the CIA reported in August.

The 1995 agreement allowed Mos cow to fulfill existing sales contracts for specified weaponry, including a diesel submarine, torpedoes, anti-ship mines and hundreds of tanks and armored personnel carriers. But no other weapons were to be sold to Iran, and all shipments were to have been completed by last Dec. 31.

In exchange for the Russian promises, the United States pledged not to seek penalties against Russia under a 1992 law that requires sanctions against countries that sell advanced weaponry to countries the State Department classifies as state sponsors of terrorism. Iran is on that list.

Though Gore and Cherno myr din mentioned an arms agreement in general terms at a news conference the day it was signed, the details have never been disclosed to Congress or to the public.

The Gore-Chernomyrdin agreement appeared to undercut a 1992 law, the Iran-Iraq Arms Nonproliferation Act, known as Gore-McCain after its principal sponsors, Gore, then a senator from Tennessee, and Republican Senator John McCain, of Arizona. The law was rooted in concerns about Russian sales to Iran of some of the same weapons that the Gore-Chernomyrdin agreement expressly allowed to be delivered.

McCain said this month that he was unaware of the deal that Gore struck with Chernomyrdin, which was codified in a document stamped "Secret" and signed in Moscow on June 30, 1995. McCain said a "strong case can be made" that the Russian delivery of arms, especially the submarine, should have triggered sanctions against Moscow under the provisions of the Gore-McCain law.

"If the administration has acquiesced in the sale, then I believe they have violated both the intent and the letter of the law," he said.



How Else to Get Results?


Gore's chief foreign policy adviser, Leon Fuerth, said the deliveries were not subject to sanctions because they did not meet the 1992 act's definition of "advanced conventional weapons" and did not significantly change the balance of power in the Persian Gulf. But, he said, Gore brandished the threat as leverage to induce the Russians to sign the agreement, in part to learn more about what arms Moscow was sending to Tehran.


"We deliberately used the Gore-McCain law as a fulcrum to negotiate an understanding with Russia to put constraints on their exports to Iran," Fuerth said, by setting a cut-off date of Dec. 31, 1999.

Strengthening the lever was the submarine being supplied, the third of three Kilo-class subs that Russia sold to Iran. The sub was of particular concern to American policy-makers because it can be hard to detect and could pose a threat to oil tankers or American warships in the gulf.

Gore and McCain specifically cited the submarine and its deadly long-range torpedoes as one reason the 1992 nonproliferation act was needed, according to the Congressional Research Service.

Fuerth acknowledged that Russia had failed to live up to its promise to cease deliveries by the end of last year. "We have indicated we are not satisfied with a unilateral decision by the Russians to modify the terms of this understanding," he said.

Critics in Congress who have become aware of the 1995 deal, conceived in secrecy and at best only partly successful in achieving its goals, said it is symptomatic of flaws in Gore's approach to handling relations with Russia.

President Bill Clinton entrusted his vice president with an extraordinary degree of authority to manage one of the most important accounts in American diplomacy. Gore used that authority to pursue a broad agenda on issues from arms control to the environment to cooperation in space.

Much of that work was carried out in a channel known as the Gore-Chernomyrdin Commission, which was established in 1993 and which met twice a year until Boris Yeltsin dismissed Chernomyrdin in March 1998. Gore has cited the work of the commission as among his signal achievements as vice president and also an important part of his resume for the presidency.

Some critics in Congress, as well as Texas Governor George W. Bush's foreign policy advisers, say that Gore placed too much faith in his close personal relationship with Chernomyrdin, and that this led Gore to turn a blind eye to strong evidence of corruption by Chernomyrdin and associates, who appear to have profited handsomely from the rapid privatization of Soviet state enterprises.

Bush himself touched on this criticism during his debate Wednesday night with Gore when he said in a discussion of Washington's world role:

"Take Russia, for example. We went into Russia, we said here's some IMF money. It ended up in Viktor Chernomyrdin's pocket, and others. And yet we played like there was reform." (Chernomyrdin has threatened to sue Bush for slander, and the International Monetary Fund has also challenged Bush's account.)

The vice president and his advisers respond that the Gore-Chernomyrdin channel produced scores of agreements on a wide range of topics in part because of the strong bond between the men. Gore was fully aware of the allegations of corruption against Chernomyrdin, Fuerth said, but he also believed that the prime minister was dedicated to reform and had the clout to cut through the bureaucracy.

"How else do you talk to leaders about difficult issues unless you have developed a relationship with them?" Fuerth asked. "The bureaucratic approach can take you only so far."

The vice president's office has produced a catalog of Gore's achievements in Russia policy: the removal of nuclear weapons from Ukraine, Belarus and Kazakstan, trade deals on steel and poultry, diversion of Russian weapons scientists to peaceful pursuits, increased cooperation on corruption and money laundering, joint efforts on the international space station.

But critics respond that Gore's eagerness to pile up agreements led, in some cases, to bad deals.

For example, E. Wayne Merry, the former director of the political section of the U.S. Embassy in Moscow, said in congressional hearings earlier this year that the Gore-Chernomyrdin Commission had required hundreds of hours to pad its list of achievements, racking up piles of "taxpayer-supplied evidence of American goodwill regardless of Russian performance, honesty or even desires."

The 1995 accord, which essentially exempted Russia from American sanctions on arms deliveries to Iran, emboldened Moscow to ignore other agreements, particularly on sales of missile and nuclear technology to Iran, according to Gordon Oehler, who directed the Nonproliferation Center of the CIA until 1998.

"It was one more of these strange deals that Gore and Chernomyrdin had that were kept from people," said Oehler. "If this had been disclosed to Congress, the committees would have gone berserk, absolutely. But the larger problem is, if you have these under-the-table deals that give the Russians permission to do these things, it gives the signal that it's OK to do other things."



'Strictly Confidential'


The 1995 arms agreement between Gore and Chernomyrdin was just one of more than a dozen during a three-day meeting in Moscow, the fifth session of the Gore-Chernomyrdin Commission, but it was not, however, included in a list of the meeting's accomplishments released by the White House.


Still, the men mentioned it in passing at a news conference at the end of their meeting. Chernomyrdin said the Iran accord was the product of "difficult and lengthy talks." Gore indicated that deliveries of conventional arms to Iran would end within a few years.

"This is significant, very significant," Gore said at the news conference. "I would say that this has been resolved in a specific, mutually agreed fashion that does not leave any uncertainty or open ends that would create problems in the future."

Such undertakings between executive branch officials do not carry the force of law or treaty, which require legislative ratification; either party can unilaterally withdraw from executive agreements without notice or pe nal ty, an aide to Gore said.

A copy of the aide-memoire and related classified documents were provided to The New York Times by a government official concerned about the proliferation of Russian arms to Iran.

Administration officials briefed Congress on the outlines of the aide-memoire in closed hearings in July 1995 but did not disclose details, specifically the U.S. promise not to seek sanctions as a result of arms deliveries.

The Gore-McCain law provides for waivers of its penalties, but the administration did not seek a waiver from Congress because, in its view, the types and numbers of military hardware Russia planned to send did not cross the threshold of sanctionable items.

The older contracts for conventional weapons that Russia was allowed to fulfill dated to 1989 and were intended to help Iran rearm after the devastating Iran-Iraq war of 1980-88.

A classified annex specifies the weapons Russia was committed to supply to Iran: one Kilo-class diesel-powered submarine, 160 T-72 tanks, 600 armored personnel carriers, numerous anti-ship mines, cluster bombs and a variety of long-range guided torpedoes and other munitions for the submarine and the tanks. Russia had already provided Iran with fighter aircraft, surface-to-air missiles and other armored vehicles.

The weapons are not the top of the Russian lines, but they are among the best in the region and bolstered a military force in Iran that continues to grow in quality and quantity.

Russia was to sign no new arms contracts with Iran and was to deliver no weapons other than those specified.

The United States, for its part, would "take appropriate steps to avoid any penalties to Russia that might otherwise arise under domestic law with respect to the completion of the transfers," the document states.

The United States also said it would help Russia join international arms-trading organizations and would take steps to remove Russia from the list of countries ineligible to receive American arms or technical assistance.

The United States would also help Russia's weapons industry to find customers. And the United States would also ensure that its own customers in the Middle East would not transfer American-made weapons to countries on the borders of Russia. But Moscow was concerned that Saudi Arabia and other the Middle Eastern buyers of American arms were sending some on to Islamic fundamentalists in the Central Asian republics of the former Soviet Union.



An Angry Congress


Members of Congress have repeatedly complained about Russian arms shipments to Iran and demanded sanctions against Moscow.


But because of frustration with the administration's apparent unwillingness to penalize Russia, Congress amended Gore-McCain in 1996. The new law required sanctions for any supplier of arms to nations that sponsor terrorism, not just weapons sales that upset regional stability, as specified in the 1992 law. But the new law has not been invoked, administration officials said, because sanctions laws cannot be applied retroactively.

From 1997 on, members of the House Armed Services Committee on several occasions questioned Pentagon and State Department officials about the submarine and why the administration was not taking stronger measures to stop delivery.

And a few days ago, Republican Senator Sam Brownback of Kansas and chairman of the Near East and South Asia subcommittee of the Senate Foreign Relations Committee, said at a hearing that the administration had failed to inform Congress of confidential deals with Russia and had looked the other way as Russia sent significant quantities of arms to Iran and elsewhere.

"You've seemed to conclude your own sidebar agreements and the development continues to take place with alarming speed," Brownback lectured Robert Einhorn, the State Department's top nonproliferation official. "The problem has grown worse, and the world is a more dangerous place because of that."

TITLE: Nobel Peace Prize Winner Upstages His Predecessor
AUTHOR: By Sang-Hun Choe
PUBLISHER: The Associated Press
TEXT: SEOUL, South Korea - A day of glory for President Kim Dae-jung and all of South Korea was a day of humiliation for Kim Young-sam, his predecessor and longtime rival. 


While the nation celebrated President Kim's Nobel Peace Prize on Friday, the former president was sitting in his car for 14 hours as students blocked him from delivering a lecture. 

He eventually went home early Saturday - but not without venting his resentment toward the president and his disdain for the Nobel Committee. 

"It is total nonsense that Kim Dae-jung won the Nobel Peace Prize. The prestige of Nobel prizes has dropped to the bottom," Kim was quoted by his spokesman, Park Jong-woong, as saying. 

The barbs illustrate the intensity of the rivalry between the two men, living symbols of South Korea's long struggle for democracy. 

They also say much about the divisive domestic political environment President Kim must overcome to win a strong mandate to pursue his quest for peace with communist North Korea. 

In awarding this year's Nobel Peace Prize to Kim Dae-jung on Friday, the committee lauded his efforts toward easing the Cold War-era conflict on the divided Korean peninsula. 

But Kim Young-sam and other conservatives oppose the rapprochement, accusing the president of granting too much aid and other concessions to Pyongyang without extracting solid tension-reducing measures from the hard-line Stalinist regime. 

The two Kims have long been rivals in their mutual struggle for democracy. 

For decades, both were favorites among student activists for battling South Korea's military-backed governments. Kim Dae-jung, a methodical thinker, is sometimes accused of being a bore; Kim Young-sam is known for his determination, a trait sometimes described as stubbornness. 

Kim Dae-jung, 76, has been jailed, sentenced to death and, he says, the target of four assassination attempts under military regimes. 

Kim Young-sam, 72, staged a 23-day-long hunger strike against military strongman Chun Doo-hwan in 1983. 

But both sought the presidency with a rivalry so deep that they failed to field a single opposition candidate in free elections in 1987 and split the antimilitary vote. 

In 1992, Kim Young-sam beat out Kim Dae-jung for the presidency, winning wide praise in his early years in office for jailing his two military-backed predecessors, Chun and Roh Tae-woo, for corruption and staging coups. 

However, during his presidency, the South Korean economy virtually collapsed, forcing the country to accept a $58 billion bailout from the International Monetary Fund. Kim Young-sam left office disgraced in early 1998. 

Kim Dae-jung stepped in, finally winning the presidency after three failed attempts and presiding over South Korea's dramatic economic recovery in 1999. 

But his greatest achievement came in June, when he traveled to Pyongyang for a historic summit with North Korea's Kim Jong Il. 

The first-ever meeting between the two sides' leaders - and their agreement to work toward reunification of the peninsula divided after World War II - led to the internationally lauded warming of relations.

TITLE: IN BRIEF
TEXT: Floods Sweep Alps


TURIN, Italy (Reuters) - The death toll from flooding in the southern Alps crept upwards Monday as torrential rain continued to fall.

Ten people were confirmed dead in northern Italy and another 10 were provisionally reported missing. In Switzerland rescue teams resumed a forlorn search for 13 people still missing and presumed dead after a mudslide ravaged the southwestern village of Gondo on Saturday.

Flooding has also affected southern England. 

The Italian government said it planned to declare a state of emergency Monday in Piedmont, the region around Turin, as well as the worst affected region Valle d'Aosta.



Chinese Military Force


BEIJING (AP) - China has reiterated threats to use force against Taiwan and said tensions with the island and bullying by major powers are forcing it to beef up its armed forces.

In a policy paper presented Monday, China responded to foreign concerns about its growing military strength. It insisted that its defense expenditure remained low compared to other countries and said its military modernization is "purely for self-defense."

The paper also said that the foundation for a peaceful reunification of China and Taiwan "is seriously imperiled" because of "hegemonism and power politics," Beijing's code words for what it regards as U.S. domination.



Uzbeks Accept Taleban


TASHKENT, Uzbekistan (AP) - In a sharp break from its neighbors' united opposition to the Taleban, Uzbekistan is considering recognizing the radical Islamic government in Afghanistan, a move that would make it only the fourth country to do so.

President Islam Karimov said because the Taleban controls 95 percent of Afghanistan's territory and is accepted by the country's people, Uzbekistan is willing to go along with their choice.

Pakistan, Saudi Arabia and the United Arab Emirates are the only other nations to recognize the Taleban government.



Lithuanian War Crimes


VILNIUS, Lithuania (AP) - A judge ruled Friday that the trial of alleged Nazi war criminal Kazys Gimzauskas may proceed in absentia even though he suffers from Alzheimer's and other debilitating illnesses.

The 93-year-old is charged with genocide for allegedly sending scores of Jews to their deaths when he was an officer in the Vilnius security police during 1941-44.

Lithuania's in absentia law, as revised last February, allows a lawyer to represent a mentally incapacitated war crimes suspect at trial. If convicted, Gimzauskas wouldn't have to serve a sentence. Trial is set to begin Nov. 13.



Bangladesh PM in U.S.


DHAKA, Bangladesh (AP) - Prime Minister Sheikh Hasina, seeking more American investment and the extradition of three men linked to her father's assassination, left Dhaka on Monday for the first state visit to the United States by a Bangladeshi leader.

Hasina is returning Bill Clinton's visit to Bangladesh in March, the first visit by a U.S. president to this poverty-stricken country. 

Clinton and Hasina are scheduled to meet Thursday for talks on trade, energy, environment, technology and immigration.

Washington, meanwhile, wants Bangladesh to allow trade unions in the country's Export Processing Zones, which produce goods exclusively for export. 




Hornet Juice the Key


TOKYO (Reuters) - A Japanese marathon star who won Olympic gold in Sydney got a crucial extra buzz by drinking the stomach juice of giant, killer hornets. Naoko Takahashi, who became a national heroine by winning the women's marathon, drank the unusual beverage before and during the race after Japanese scientists found it gave an astonishing boost to human performance.

The drink, which is 100 percent natural, does not fall foul of any Olympic laws against performance-enhancing drugs.

Scientists at the Institute of Physical and Chemical Research near Tokyo found the juice helped the eight-centimeter long hornets to fly the equivalent of more than two marathons in search of food - and had a similar effect on humans.

The juice reduced muscle fatigue and improved the body's efficiency, according to scientists.

TITLE: Ebola Outbreak Strikes Uganda
AUTHOR: By Henry Wasswa
PUBLISHER: The Associated Press
TEXT: KAMPALA, Uganda - The death toll from an Ebola virus outbreak in northern Uganda has risen to 33 people and left another 63 hospitalized, a government-owned newspaper reported Monday. 


The Ministry of Health had said in a statement Saturday that at least 31 people had died, but New Vision newspaper said two more people died Sunday in Gulu, a town about 225 miles north of Uganda's capital, Kampala. 

Reports from the site of the outbreak say the victims are bleeding from the mouth, nose and ears. The area is unsafe due to attacks by the rebel Lord's Resistance Army. 

The hemorrhagic virus, which kills with devastating speed, turned up two weeks ago and the victims include three student nurses who treated the first Ebola patients in Gulu, the Ministry of Health said. Ninety percent of Ebola victims die, according to the World Health Organization. 

While not as deadly as HIV, Ebola is terrifying because of its speed and how it kills. Within four days of coming in contact with the bodily fluids of someone carrying the virus, flu-like symptoms set in, followed by vomiting and diarrhea. Ten to 15 days later, the victim "bleeds out" through the eyes, nose, ears and other bodily orifices. 

Ebola outbreaks usually only last a few weeks since the victims die faster than they are able to spread the virus. The Ebola virus then disappears, only to re-emerge later. 

Four investigators from the Atlanta-based Centers for Disease Control and Prevention will leave for Gulu either Monday or Tuesday to confirm the Ugandan diagnosis and determine how to contain it, CDC spokeswoman Barbara Reynolds said. 

There is no known cure for Ebola and it is not understood why some patients survive. Scientists also do not know where the virus lives when it is not infecting humans, though contact with monkeys has led to many of the cases in humans. 

Uganda had never before recorded an outbreak of Ebola, but there have been cases of the closely related Marburg virus. Ebola was named after a river in Congo, where it was first detected in a number of villages in 1976. 

Ebola first gained worldwide attention in Richard Preston's 1994 best seller "The Hot Zone," which recounted how the virus turned up in research monkeys in Reston, Virginia. It was also the subject of the 1995 fictional film "Outbreak," starring Dustin Hoffman.

TITLE: Summit Seeks To Stop West Bank Crisis
PUBLISHER: The Associated Press
TEXT: SHARM EL-SHEIK, Egypt - Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat met face to face Monday at an emergency summit brokered by President Clinton and other world leaders struggling to end the bloodshed in the West Bank and Gaza. 


In Israel, a gun battle erupted near Nablus, and scores of Palestinian rock-throwers clashed with Israeli soldiers in two other West Bank towns. About 1,500 Palestinians marched toward an Israeli army checkpoint on the outskirts of the town. About 500 broke away from the march and began throwing stones at three Israeli army jeeps. Several gunmen, shooting from olive groves, fired on Israeli soldiers, drawing return fire. Two Palestinians were injured, witnesses said. 

The firefight in the West Bank came less than an hour after President Clinton, addressing the summit at this Red Sea resort, urged Israelis and Palestinians to work hard to end the violence. "We cannot afford to fail," Clinton said. "The future of the peace process and the stability of the region are at stake." 

Expectations were low for the meeting, hosted by Egyptian President Hosni Mubarak amid intense security. Also participating were King Abdullah of Jordan, UN Secretary General Kofi Annan and Javier Solana, the European Union's foreign affairs chief.

The leaders, with sober expressions, filed into the room and took their places 3 meters apart around a horseshoe-shaped table, with Clinton and Mubarak at the head. 

In his opening remarks, Mubarak called for "saving what is left of the credibility of the peace process." 

He pointed the finger at Israel, saying, "The aggressions to which the Palestinian people were subjected during the last two weeks persuaded me to convene this meeting." 

Clinton didn't take sides. "We have to move beyond blame," he said. 

He urged both Arafat and Barak to remember how far they have come since 1993, when they agreed to resume peace talks. "We shouldn't give it all up for what has happened in the last few weeks," he said. "And what has happened in these last few weeks reminds us of the terrible alternative to continuing to live in peace and to continue in the peace process." 

More than 100 people, mostly Palestinians, have died in clashes on the West Bank and Gaza over the past few weeks. 

With a little more than three months left in his presidency, Clinton still hopes to mediate a peace accord between Israel and the Palestinians. For this emergency summit, though, the most optimistic outlook was for a truce and a date for new negotiations. 

Barak and Arafat each held individual one-on-one meetings with the other assembled leaders. 

The Israeli prime minister told Mubarak that he would not pull back Israeli forces or reopen Palestinian areas until Arafat re-arrests dozens of militants released from Palestinian jails in recent days and tells security forces to stop shooting and participating in street rioting, according to a senior Israeli official. 

"It's pretty somber," Israeli government spokesman Moshe Fogel said about the summit. "It's difficult to know where to go from here. You always have to keep up hope, but it appears problematic." 

The Palestinian leader, while agreeing reluctantly to the talks, showed no indication of curbing his demands. 

"We are on the way to Jerusalem until a Palestinian child raises the Palestinian flag on the walls of Jerusalem," he said Sunday. 

His top adviser, Nabil Aburdeneh, said the two sides were now at a crossroads. "Either we return back to the way of peace or we continue this deadlock." 

Before departing for Egypt, Clinton made calls to Middle East leaders, and received a briefing from Secretary of State Madeleine Albright and Sandy Berger, his national security adviser. 

He hopes to return home in time for a memorial service Wednesday in Norfolk, Virginia, to honor the 17 U.S. sailors killed in an attack Thursday on a U.S. destroyer in Yemen. 

Albright told ABC's "This Week" on Sunday that the prospects for renewed peace negotiations were dim, but the United States hoped at least to persuade Arafat to assume more responsibility for calming inflamed tensions. "The peace process is the only road," she said. 

Senior Palestinian negotiator, Saeb Erekat, said too much was being expected of Arafat. 

"I really don't want to raise anyone's expectations," Erekat said. "I think Mr. Barak went a long way in his exit strategy from the peace process. We will go to Sharm el-Sheik hoping he is going to stop the war against us." 

Erekat, a longtime Arafat aide, said that by ordering violent retaliation, Barak really "is strengthening Palestinian extremists," and that "all hell will break loose" if the summit fails. The Palestinians want an international inquiry into the violence. Barak has said that he wants a U.S.-led investigation. 

Solana said setting up the inquiry was one issue the parties might be able to resolve. "The structure of that mechanism shouldn't be a major difficulty," Solana said.

TITLE: Hijack of Saudi Plane Ends With Surrender
AUTHOR: By Adnan Malik
PUBLISHER: The Associated Press
TEXT: RIYADH, Saudi Arabia - They had been in the air only two hours when first class passengers noticed a flight attendant emerge from the cockpit with tears in her eyes. Passengers became more concerned when the "fasten seat belts" warning light failed to go off and the monitor tracking their flight went blank.


Saudi Arabian Airlines Flight 115, bound for London with 105 people on board, had been hijacked.

But passengers weren't told this while they were in the air. The crew remained so calm that some passengers learned of it only after the plane landed in Baghdad, Iraq, late Saturday after a 7-hour odyssey that began in Jiddah, Saudi Arabia.

"I first thought we landed at Heathrow in London. But when I looked through the window I said to myself, 'This is not London,'" said Iqbal Dawood, a passenger from Pakistan.

Half an hour after landing in Baghdad, the captain announced to passengers that the plane had been hijacked and that negotiations were under way.

Hours later, the two hijackers, both Saudis, surrendered peacefully and were detained.

The plane flew back to Saudi Arabia on Sunday night, landing at Riyadh's King Khaled International Airport.

At 4:43 a.m. local time, another Saudi Arabian Airlines Boeing 777 took off carrying all but seven of the 88 passengers to London. Airline officials said the seven who chose to stay behind were six Saudi citizens and the flight's sole American.

Hours earlier, there were joyful scenes at Baghdad airport as the plane was readied for departure. Some passengers were so excited to be going home after 24 hours in Iraq that they ran across the tarmac to the aircraft.

The passengers and crew had stayed at Baghdad's best hotel, the Rasheed, in the heart of the city. They were brought to the airport late Sunday.

A member of the Saudi royal family, Prince Bandar bin Mohammed bin Saad bin Abdul-Rahman, 19, was among the passengers as he had been flying to London to study English.

The hijacking ended after high-ranking Iraqi government officials negotiated with the two hijackers, Iraqi state television said. Details of the negotiations were not revealed.

Saudi Arabia's Interior Minister Prince Naif told reporters at Riyadh airport Monday that his country would do all in its power to procure the extradition of the hijackers. His government has identified them as Faisal al-Biloowi and Ayish al-Faridi. Hijacking carries the death penalty in Saudi Arabia.

It is unclear whether Iraq will extradite them. The countries have had no relations since Iraqi troops invaded Kuwait in 1990, but a pre-Gulf War treaty provides for extradition.

Taher Haboush, the Iraqi official who led negotiations with the hijackers, said they had asked for political asylum. But, in their news conference at the airport Sunday, the hijackers denied asking for asylum and said they would eventually like to leave Iraq.

The men, who appeared to be in their 20s, said they hijacked the plane to demand rights for the Saudi people. "We want to choose our own leaders. The time of kings and monarchies is over," al-Faridi said.

TITLE: Cypriot Clergy in Sex Scandal
AUTHOR: By Michele Kambas
PUBLISHER: Reuters
TEXT: NICOSIA, Cyprus - Greek Cypriots are watching in horror as an ugly power struggle plays itself out in their scandal-tainted Church.


Already suffering from the fallout of earlier financial scandals, the Greek Orthodox Church of Cyprus is now having to deal with allegations of sexual misconduct by some of its highest-ranking clerics.

Perhaps more damagingly, the crisis has revealed an institution where relations between its bishops - they call themselves saints - are tinged with venom, and where some have gone to great lengths to smear their adversaries.

In one such case, a man maintained he had sexual relations with a senior male cleric and told a local radio station that he could describe every inch of his lover's body beneath its black vestments. Another has been accused of fathering two children with a devout parishioner.

The accusations, which have been appearing in the media for months, have rattled a society which is conservative by nature and in which sex is a hush-hush subject and homosexuality is definitely taboo.

"People don't want to see the leaders of their church falling to such depths. We don't even see this sort of behavior even during a political election campaign," said theologist Kostis Kyriakides.

Widely credited with preserving the island's Greek Cypriot community during the dominance of numerous conquerors over the centuries, the church, an independent branch of the Eastern Orthodox Church, is now the butt of crude jokes.

Barnabas, one of Christ's first companions and founder of the Church of Cyprus almost 2000 years ago, would be turning in his grave.

The main feud pits Athanassios, the Bishop of the Limassol district, against his "brother" Bishop Chrysostomos, of the neighboring Paphos district.

Athanassios swept to victory in elections for the bishopric of the sprawling southern port city two years ago, pulling through a campaign tainted with allegations that his mentor was an old man with a particular fondness for young nuns.

Church insiders say Chrysostomos views Athanassios as an upstart who poses a serious obstacle to him ascending to the post of Archbishop of Cyprus when the present incumbent dies.

Chrysostomos has pointedly avoided any official church functions where Athanassios is present.

"Everyone knows that the present archbishop was grooming Chrysostomos to be his successor. There was apparently a change of heart," said one insider.

That apparently occurred six years ago when the present archbishop, also called Chrysostomos, visited the all-male monastic community of Mount Athos in Greece, where Athanassios was then based.

Once in Cyprus, a whispering campaign against Athanassios came to a head when he accused a subordinate of fathering two children in violation of his strict vows of celibacy. The subordinate, reportedly encouraged by the Paphos bishop, responded by openly accusing his superior of being gay.

The Church has questioned the allegations. But overcoming initial reluctance, notably from the archbishop, Athanassios now has to testify to a board of inquiry into accusations that he has had homosexual affairs with at least two men.

Radio listeners were astounded last week when a man claimed during a chat show that he had homosexual relations with Athanassios.

He went so far as to say he had described the cleric's body to church investigators. "Three clerics can have a look and see if what I said was true, so that the truth might shine forth," he told the local radio station.

A former monk has maintained that he too was seduced by the bishop when a novice and has promised a tell-all news conference. The bishop is threatening to sue.

Others have not been so forthcoming. One man withdrew his accusations against Bishop Athanassios after claiming he had been bribed to make them. Legal authorities are now investigating allegations there was a conspiracy to defame the bishop.

Athanassios' supporters have denounced the allegations as a vicious plot. "He is a unique person in our church. He is pure and saintly," said Father Andreas, one of the bishop's supporters in the Limassol parish.

Other supporters describe Athanassios as a quiet, unassuming man with an uncanny knack of appealing to the most skeptical of believers - youngsters.

In a rare display of contrition, the church has apologized for scandalizing the faithful. "I am sorry," said Archbishop Chrysostomos. "I continue to believe Athanassios is innocent."

Some believe the crisis will not affect the public's trust in the church itself, but are angry at the depths to which some clergy have stooped.