December 17, 1977

Dec 17: Begin, in 2-hr conf with Pres Carter, says that Israel, in response to Egyptian Pres Sadat's peace initiatives, was ready to restore to Egypt complete sovereignty over Sinai Peninsula and to give Palestinians control over internal affairs in West Bank of Jordan and Gaza Strip; Begin also would negotiate with Egypt right to keep security corridor along Sinai's frontier with Israel and right for Israeli forces to remain in West Bank for strategic reasons; map; Carter has no immediate comment on proposals but later phones Sadat to discuss plan; Begin also outlines proposals to Sens Javits, Case, Jackson and Stone; they hail it (L)

US officials say Cuba and USSR have more than doubled size of mil missions in Ethiopia in last wk in conjunction with airlift of USSR arms; some officials believe increases in USSR supplies and in USSR and Cuban mil personnel indicate preparations for Ethiopian counteroffensive aimed at recapturing Ogaden region (M)

Peru has exhausted its reserves of foreign currencies and can no longer pay its foreign creditors; econ implications detailed; illus (L)

NYS Environmental Comr Peter A A Berle denies air-quality permit vital to Westway; says he believes Transportation Dept underestimated traffic and pollution Westway would produce; says he may reconsider (M)

State and Federal officials urged the Emergency Financial Control Board yesterday to block raises for City Council members and other elected city officials, arguing that the increases would undermine the city's efforts to secure firrncial aid from Albany and Washington.