July 11, 1985

The Defense Department said yesterday that it would seek cooperation from the nation's allies to keep the Soviet bloc from obtaining important biotechnology products and manufacturing processes. The announcement brought immediate protests from industry executives and academics who fear the move could hamper international research. Pentagon officials said their concern arose from reports, some published and some from intelligence sources, that the Soviet Union was preparing to create biological weapons using recombinant DNA, or gene-splicing, techniques. They are also concerned about the potential leakage of early research in so-called biochips - biological membranes used in electronic circuitry - that may have extensive military applications.

White House officials and Congressional budget negotiators agreed today that a framework was emerging on a 1986 budget compromise, but they provided varied assessments on whether it could yield a House-Senate agreement. Optimism was voiced Tuesday night by some leaders from both parties, who said an understanding had been reached resolving an impasse over Senate and House proposals for military spending and Social Security benefits in the fiscal year 1986, which starts Oct. 1. The framework provides a broad outline for the Federal budget for 1986. But some of those involved in the Congressional budget process expressed skepticism that the details could be worked out to the satisfaction of all parties: the White House, the House-Senate budget conferees and the leaders of both chambers.

When summer arrived and classes let out in late June, 10-year-old Angelique Medrano looked forward to two whole months without having to set foot in school. But yesterday, Angelique, who will enter fifth grade in the fall, was once again at Public School 2, at 122 Henry Street on the Lower East Side. She was lured back into the lunchroom with friends and classmates from her neighborhood by the Board of Education's free Summer For lunch, there was a bologna and cheese sandwich on a kaiser roll, potato salad and a cup of grape juice. For dessert, there was a strawberry ice pop made from fruit juice.

THERE is a secret society, worldwide, that loves the Musee des Arts Decoratifs in Paris. Its members grieved when between 1980 and 1982 the museum gradually closed some rooms, then closed down entirely for three years for renovation and refurbishing, mostly to give more space to a collection of 20th-century objects that had been in storage. And when DESIGN NOTEBOOK the museum reopened early this summer, they could have sung and danced in the streets. What they prize in this museum is the element of private affection that has always animated its activities. This is a museum that has been built up very largely from gifts and bequests. It buys, when it can, but fundamentally it is a record of Parisian taste as it has expressed itself in the decorative arts and of Parisian generosity. (It is also a memorial to the persistence of its curators, at least one of whom stalked piece after piece through 20 and more years of taking tea every second or third Friday of the month in this or that noble house.) What this means in practice is that there is almost nothing in the Musee des Arts Decoratifs that someone has not loved. There are examples of wonderful pieces of furniture dating from the Middle Ages to almost yesterday.

An Israeli court today convicted 3 Jewish settlers of murder and 12 others of different violent crimes against Arabs, ending a 13-month trial of Jewish terrorists. The verdict also marked the first time a group of Israeli Jews had been convicted of being part of a terrorist organization. Those Israelis previously convicted of violent political crimes against Arabs tended to be fringe elements, but the Jewish settlers convicted today came from the leadership of the West Bank settlement movement. Some were decorated army officers and were widely respected in settler circles as members of a new generation of pioneers.

Because of an editing error, a Washington dispatch yesterday about a proposed Chinese-American nuclear energy accord incorrectly described a dispute over the interpretation of a key section. The disagreement arose because the Chinese apparently believed that the accord permitted certain nuclear advice they were providing to Pakistan.

ELSE SNEDEMARK'S baby was already two weeks past due. After Miss Snedemark had been in intermittent labor for 39 hours, doctors decided to perform a Caesarean section. A local anesthetic was administered, making her numb from about the waist down, but otherwise leaving her conscious. As the doctors prepared for the surgery, Miss Snedemark's husband, Dr. David Margulies, took his place beside her, holding her hand and speaking softly. Wearing a surgical gown, he remained beside his wife, an art teacher, throughout the operation.

The City's Landmarks Preservation Commission has conferred landmark status on the New York Stock Exchange, the neo-classical symbol of American finance, and on two twin-towered apartment buildings that help etch the Central Park West skyline. The designation of one of the twin-towered buildings, the Eldorado at 300 Central Park West, between 90th and 91st Streets, had stirred a heated controversy among the building's cooperative shareholders. The designation had been sought by a group of tenants who objected to a plan by the building's board of directors to replace the original casement windows, which are said to leak and cause water damage. Any designs for new windows would now have to be approved by the Landmarks Commission.

Mexico reduced the average price of its crude oil today by as much as $1.24 a barrel and announced a new pricing system that differentiates among geographical areas. An announcement by the Department of Energy, Mines and Parastate Industries said the action was taken because of a sagging world market in which the 13 members of the Organization of Petroleum Exporting Countries have been undercutting each other in their pricing. Mexico is not a member of OPEC, but had been following its pricing policies until some months ago.

A picture yesterday with an article about life in North Korea was published in error. It showed Hong Kong, not Pyongyang.

In an important step toward creation of a 24-hour trading system, the New York Stock Exchange said yesterday that it would begin trading at 9:30 A.M., a half-hour earlier than at present, starting Sept. 30. If the change receives the approval of the Securities and Exchange Commission, it will mark the first time in more than a decade that the Big Board has extended its hours. The market now closes at 4 P.M. Lengthening the Big Board's trading session would put pressure on other major domestic exchanges to extend their hours, since all the exchanges compete to list companies' shares. Late yesterday, the American Stock Exchange issued a statement saying that it had been considering extending its hours for some time and that a proposal would be brought before its directors today to start trading at 9:30 A.M. as well. It was not known whether the National Association of Securities Dealers' over-the-counter market would be extending its hours.

International An Israeli court convicted three Jews of murder and 12 other settlers of various violent crimes against Arabs, culminating a 13-month trial of Jewish terrorists. The verdict marked the first time a group of Israeli Jews had been found guilty of being part of a terrorist group. [Page A1, Column 2.] Officials found the voice recorder from the Air India jumbo jet that was lost off the Irish coast last month with 329 people aboard, raising hopes that the mystery of the crash could be solved. The recorder, one of two so-called black boxes, was recovered by a robot submarine from an ocean depth of 6,700 feet. [A1:5.]