August 19, 1986

The Reagan Administration has begun a review of what officials term the ''evolving situation'' in the Middle East, Administration officials said today. They said the aim of the discussions was to identify ways in which the United States could play a more active role in the region. Among key events that led to the review, the officials said, were a recent meeting in Morocco between King Hassan II and Prime Minister Shimon Peres of Israel; talks today in Finland between Israeli and Soviet officials, and the increasing political isolation of Yasir Arafat, chairman of the Palestine Liberation Organization. Shultz Trip Is Considered Officials said one step under consideration was a trip to the region by Secretary of State George P. Shultz this fall.

The Soviet Union may increase its oil exports substantially this fall, prompted by sharply higher energy production and by a need for hard currency, according to a Washington-based consulting firm. The report refocused attention on the Soviet potential for playing a big role in the world oil markets. The analysis was published last week by Plan Econ, a firm that specializes in research on the economies of the Soviet Union and Eastern European countries. Several oil analysts knowledgeable about Soviet activities, while agreeing that Soviet production had ended a period of decline, questioned the export forecast. They said that the Soviet Union had traditionally maintained a nonpolitical stance in the world oil market, simply trading in oil to meet foreign exchange needs.

GENETIC analysis to predict a person's health and life expectancy may soon give society unprecedented influence over people's choices in areas ranging from life insurance to careers or even mates. Ethical questions raised by this new ability have been a concern for some time, but as geneticists learn how to discover more and more about human beings, some are growing concerned over the possible uses to which society may put this new power. Scientists believe that all diseases are influenced by genes. Over the years, they have learned how to detect in fetuses or infants some well-known genetic disorders such as Down's syndrome, sickle cell anemia and Tay Sachs disease and many other rare ailments. Today, however, advances in genetics research are making it increasingly possible to identify various genetic traits that predispose people to more widespread health problems including diabetes and heart disease, the most common of all life threatening diseases among Americans.

Two Wall Street firms have toughened their drug testing programs of employees, apparently becoming the first brokerage houses to check not just incoming, but existing employees for use of illegal drugs. Kidder, Peabody & Company and Smith Barney, Harris Upham & Company said yesterday that the firms had recently made the changes. Kidder began its program last month and had all of its management committee members take urine tests, which they passed, a Kidder executive said. The program upgrades the firm's policy of testing all incoming employees for drug use.

Mikhail S. Gorbachev announced today that the Soviet Union was continuing its yearlong halt of underground nuclear testing until next Jan. 1. Mr. Gorbachev, in announcing the latest extension in a half-hour televised speech, said: ''The Soviet Union has sufficient reasons for resuming its nuclear testing, and yet we are convinced even now that the ending of nuclear testing not only by the Soviet Union but also by the United States would be a real breakthrough in arresting the nuclear arms race. On behalf of the Soviet people, I am appealing to the wisdom and dignity of the Americans not to miss another historic chance on the way toward ending the arms race.'' Looking to a Summit Meeting The Russians began the halt in testing Aug. 6, 1985, and have extended it several times, urging the Americans to join in and make it permanent. Washington has declined on the ground that the Soviet move was a public relations gesture, that a ban cannot be adequately verified and that testing was needed for weapon development.