January 19, 1981

U.S. military quietly prepares for hostages' release A5 American military personnel in Turkey hope for a better year A10 Flow of arms to rebels cited in U.S. aid to Salvador A11 Canadian and Mexican leaders promoting development talks A11 Leningrad cultural events are reported broken up A12 Around the World A13 China assails U.S. over Dutch submarine sale to Taiwan A14 Panel feels there is still time for U.S-Soviet strategic talks A15 Soviet press starts to criticize Reagan policies and aides A22 Government/Politics Government efforts provide little hope for saving dusky sparrow A18 Inaugural concerts range from opera to film score A20 Republicans in Washington reemerging from social Siberis A20 About Washington A20 At parties in capital, the game is seeing and being seen A21 A Federal report says pollution is threatening ground water B2 California Democrats seek to revive party's appeal D11 Style Relationships B10 When married children come home to live B10 The 37th annual black-tie ball for the unsung superintendent B10 PARKING REGULATIONS Because of expected bad weather, alternate-side parking rules are suspended in New York City today. All other parking regulations remain in effect. SportsMonday Basketball: South Alabama and Ellis gaining esteem C7 Aguirre sets scoring mark as De Paul wins, 90-75 C8 Nets winning streak ends at one as Bullets win, 110-99 C8 Celtics defeat Lakers for 7th in row, 98-96 C8 Boxing: Lopsided Hagler bout delights rival Antuofermo C12 Columns: Dave Anderson on Super Bowl team of all time C5 Red Smith on the ages of sin C8 Features: Sports World Specials C2 Sporting Gear C11 Question Box C11 Football: Super Bowl scouting reports C1 Player auction at the Senior Bowl C4 Pro coaches bidding for jobs C4 Lester Hayes the Raiders' last defense C6 Wilbert Montgomery rushing to stardom for Eagles C6 Pro Football Briefs C5 West takes Japan Bowl, 25-13 C3 Golf: Lietzke hangs on and wins by 2 on 69-335 C9 Hockey: Rangers stopped by Sabres, 4-0, in Buffalo C3 Outdoors: Saltwater flyfishing becoming competitive C12 Sports News Briefs C2 Statistics C11 Tennis: Borg beats Lendl and retains Masters title C1 General Families of hostages react to news with joy and relief A2 Joy and anger mingle in New York area at hope of release A2 Around the Nation A18 Landlord stays with angry tenants and turns up heat B2 Contaminated wells a source of worry to L.I. residents B2 Roosevelt Island's tram is expected to be out another month B3 Burglary is a major topic in Ridgewood, N.J. B4 Company negotiates to ship toxic wastes to Bahamas D11 B8 Arts/Entertainment Top money-making films of 1980 are studied C13 Emanuel Ax plays first of three chamber-music concerts C14 City Ballet in ''Midsummer Night's Dream'' C15 Dance Theater of Harlem offers Balanchine's ''Serenade'' C15 Boris Bloch, pianist, at Y C15 Alexander Zinoviev's novel ''The Radiant Future'' is reviewed C16 Marten Sameth, baritone, offers varied song recital C16 Liz Pasquale in ''Bird Fauve Cat'' at Danspace C17 Olatunji gives first of farewell concerts C17 ''Oh Me, Oh My, Oh Youmans'' staged at the Wonderhorse C23 Monteverdi's opera ''Poppea'' on Channel l3 tonight C24 Survey shows people in TV shows are rarely elderly C25 Obituaries Sydney Zelinka, television comedy writer D11 Features/Notes Men in the News: Algeria's 3 intermediaries in hostage talks A5 Going Out Guide C14 Notes on People C23 Editorials/Letters/Op-Ed Editorials A24 Proposals for election reform Communications deregulation Impasse on Namibia Letters A24 Flora Lewis: a French perspective on America's ills A25 William Safire: Iran's second spectacular A25 Thomas J. Watson Jr.: dealing with Moscow A25 Robert S. England: patience in closing black/white gap

Diamonds may still be a girl's best friend, but they have proven to be unfaithful companions for investors and dealers in recent months. After soaring last February, the wholesale price of diamonds fell steeply last spring and has continued to drop steadily this winter. Since September, according to Martin Rapaport, author of a monthly report on wholesale diamond prices, prices have fallen by nearly 11 percent, including a drop of 6 percent in the last month alone. The tumbling diamond prices have not yet reached the consumer, but they are taking their toll among the people who buy and sell precious stones. On New York's 47th Street, which is usually lined with people haggling over fistfuls of precious stones, dealer enthusiasm has waned as have the number of deals. While many of the long-time residents of the street refuse to discuss the matter - there is a general fear that mention of falling diamond prices will further the decline - others admit that times have rarely been so hard.

Bjorn Borg reaffirmed his dominance as the No. 1 player in tennis with a 6-4, 6-2, 6-2 rout of Ivan Lendl for the $100,000 first prize in the Volvo Masters tournament at Madison Square Garden yesterday. It was Borg's second consecutive Masters crown, and he won both without losing a set in the finals. John McEnroe and Peter Fleming took the $40,000 top prize in doubles with a 6-4, 6-3 victory over Peter McNamara and Paul McNamee of Australia. In the five-day, $400,000 event that had its share of controversies, Borg survived, beating McEnroe in a third-set tiebreaker on Thursday night and Jimmy Connors in a three-set semifinal on Saturday. In between, he lost the one match that did not matter, a 6-0, 6-3 blitzing by Gene Mayer in the round-robin after having already been assured a spot in the semifinals.

The United States and Iran reached formal agreement early this morning on the terms for releasing the 52 American hostages and returning to Iran billions of dollars of its assets frozen by American authorities. The agreement was signed in Algiers by Deputy Secretary of State Warren M. Christopher on behalf of the United States. Behzad Nabavi, the chief Iranian negotiator, had signed it earlier in Teheran. President Carter planned to fly to West Germany later today to be on hand when the hostages are flown there, with a stop in Algeria, after being released by Iran, presumably today. Medical Examinations Planned Algerian transport planes flew to Teheran to pick up the hostages, and a team of Algerian doctors left their hotel in Teheran to examine the Americans before their departure.

The Federal Communications Commission's approval 10 days ago of a plan to allow hundreds of new low-power television stations has touched off an angry reaction from commercial and public broadcasting interests, possibly derailing the project. The commission has responded to the complaints by extending the deadline for applications for the new stations to Feb. 17. The F.C.C. promised last year to promote the concept of low-power television, giving minorities and others greater access to television and furthering competition. The concept has not been formally approved, but the commission wants to let the new stations on the air on an interim basis. Low-power stations would broadcast with a weaker signal than regular stations and thus cover only a neighborhood, not a whole region.