December 21, 1985

A weary and depleted Congress ended its 1985 session this evening after failing to approve a three-year, $74 billion deficit-reducing package. Fewer than two-thirds of the Senate and apparently far less than half the House members were present for the end of the 99th Congress's first session, the longest of the Reagan Administration's tenure. The last action was an extension of the cigarette tax of 16 cents a pack through March 14. The Senate adjourned at 6:28 P.M., followed by the House at 6:40.

The State Department said today that Israel had dismantled the unit that directed the activities of Jonathan Jay Pollard, a United States Navy analyst accused of stealing hundreds of pages of classified documents. In a statement this afternoon, the State Department said it was satisfied that a team of American officials dispatched to Israel to investigate the case had received ''full cooperation.'' It also said Israel had returned all of the documents obtained ''in an unauthorized manner.'' The American team left Israel today after a week of discussions conducted under unusual secrecy.

The White House appeared today to modify its policy on polygraph, or lie detector, tests for Government officials in an effort to satisfy the concerns of Secretary of State George P. Shultz. After a meeting between President Reagan and Mr. Shultz this afternoon, the President indicated that the Secretary's fears of widespread use of the tests had been resolved. A senior State Department official said tonight that Mr. Shultz now believed that he and the President basically agreed that polygraph tests should be limited to cases of suspected espionage. Last week the White House indicated that thousands of Government employees with access to sensitive information would be subject to the tests.

A fire today swept through the upper floors of Fauchon, the renowned luxury food store, killing the owner and her daughter and injuring at least 11 people. A spokesman said the store, which has been damaged by radicals in the past as a symbol of inequality and privilege, would open as usual Saturday for the rest of the Christmas and New Year shopping season. The fire occurred eight years after Fauchon was gutted by fire, on Dec. 19, 1977, when a bomb exploded outside the store's well-stocked windows at 28 Place de la Madeleine. The windows traditionally contain the finest and most expensive display of wines, foods and exotic fruits in France.

A Brooklyn contractor was convicted of reckless endangerment yesterday for his role in the late-night demolition of four buildings on West 44th Street in January. Acting Justice Alfred H. Kleiman of State Supreme Court in Manhattan also found the contractor, Eddie Garofalo, and his demolition company, Mitron Associates of Brooklyn, guilty of performing the work without a demolition permit. City officials charged that the work had taken place while there were active gas and electric connections to the buildings. In handing down his decision in the two-week trial without a jury, Justice Kleiman urged the State Legislature and the city to strengthen the penalties against those who do not obtain permits that are required ''for the protection of the public.''