January 12, 1987

LEAD: The Soviet Union has given signs in recent pronouncements of tilting further toward Iraq in the Iran-Iraq war, according to Western and Arab diplomats and experts on Iran.

LEAD: Across the street from the town houses where Henry James and John Dos Passos once lived, on the edge of New York University in the heart of Greenwich Village, stands one of the city's most enduring landmarks and one of its most blatant drug bazaars - Washington Square Park.

LEAD: West Germany, the Netherlands and Belgium agreed today to increase the value of their currencies in an attempt to end the turbulence that engulfed international currency markets last week.

LEAD: BankAmerica, which formally rejected First Interstate Bancorp's acquisition offer last Monday, has suddenly heightened its efforts to remain independent. BankAmerica is lobbying Government officials, enlisting its own employees and retirees in a public relations campaign and circulating documents critical of the proposed merger to get regulators to reject it.

LEAD: Hampered by political and physical ailments, President Reagan has pared down his agenda for his final two years in office, and will focus on protecting past gains rather than on promoting new programs, White House officials say.