LEAD: The Panamanian Government has been mismanaging sections of the former Panama Canal Zone and installations important to the canal that have already been handed over by the United States, according to Panamanian employees of the canal and shipping industry experts here.

NEGLIGENCE IS SEEN IN PARTS OF CANAL CEDED TO PANAMA

LEAD: Prime Minister Yitzhak Shamir today blocked an attempt by his rival, Foreign Minister Shimon Peres, to force a Cabinet vote on the new peace initiative brought by Secretary of State George P. Shultz.

SHAMIR FOILS VOTE ON U.S. PEACE PLAN

LEAD: NO sooner had Jim Boeheim walked into the lobby of a local televison station last week than a man wearing an Orangeman cap bounced over and cheerfully thrust out his hand. ''Good win over Villanova the other night, coach,'' he said. Boeheim smiled weakly and nodded.

His Record of Success Is Sure, But Boeheim Is Still a Mystery

LEAD: Jayson Williams, St. John's 6-foot-7-inch sophomore center, yesterday became the first player suspended under the Big East's anti-fighting legislation.

Big East Penalizes Jayson Williams

LEAD: They may live by the edge of the Pacific Ocean or in the shadow of the San Gabriel Mountains, but a small army of Los Angeles residents march to the temporal rhythms of New York.

The Los Angeles Life, but on New York Time

LEAD:  Russians Attacked in Iran  Iranians attacked the Soviet Embassy in Teheran, throwing rocks and firebombs and trying to break into the compound, Tass said. Page A3.  A Harsh Nicaraguan Critic  The Government hoped the paper La Prensa would support compromise after its forced closure, but it has been an unrelenting critic.

INSIDE

LEAD: One of the museum's designers once described their task as the creation of an institution ''charged with telling what cannot be told, showing what cannot be shown, sharing what cannot be shared.''

A Museum Taking Shape To Tell the Holocaust Story

BUSINESS DIGEST: MONDAY, MARCH 7, 1988

LEAD: Rarely, if ever, have prospects for the nation's economy been scrutinized so closely as they have since October's stock market plunge. Yet rarely has it been harder, given the contradictory mixture of recent statistics, to draw conclusions with confidence.

Interpreting Economic Signs

LEAD: Pittsburgh survived a late Syracuse surge today to capture the Big East regular-season title with an 85-84 victory.

Pitt Tops Syracuse By 85-84

LEAD: For the second month in a row, the growth rate of the nation's economy slowed in February, the National Association of Purchasing Management said in its monthly report, scheduled to be released today.

Purchasers Find Ongoing Sluggishness

LEAD: Starting more than a decade ago, Japan has been achieving a level of innovation greater than that of the United States, according to conclusions based on an experimental technique for analyzing the quality of patents.

Novel Technique Shows Japanese Outpace Americans in Innovation

LEAD: When Rupert Murdoch ends his 11 years as owner of The New York Post, the moment will mark, perhaps, the greatest failure in a career of stunning successes.

Murdoch's Post: Futile Battle or Missed Opportunity?

LEAD: Despite protests from Mayor Koch and other officials, the Federal Government plans to reduce the size of its monthly employment survey in New York City, thus sharply limiting its ability to track employment trends among black, Hispanic, teen-age and other workers.

U.S. TO CUT BACK WORKER SURVEYS

LEAD: President Reagan's AIDS Commission, once derided by critics as incompetent, poorly managed and biased toward a right-wing agenda, has suddenly emerged as a bold, decisive champion of Government spending to help the victims of the disease.

Washington Talk; PANEL ON AIDS TURNS VOICES OF CRITICISM INTO SONGS OF PRAISE

LEAD: The Queens crack wars that claimed the life of Police Officer Edward Byrne reflect an ominous development - one that, in part, represents the other side of law enforcement's success in disrupting the Mafia.

Metro Matters; Crack Dealers Rewriting Rules Among Criminals

LEAD: With the campaigns of Pat Robertson and Representative Jack F. Kemp flattened by their showings in the South Carolina primary, Republicans looked today toward Tuesday's unprecedented number of primaries as a chance for Vice President Bush to take a wide lead.

South Carolina Result Sets Stage For a Bush Showdown With Dole

LEAD: Tomorrow voters in 20 states will pick nearly a third of the delegates to the parties' conventions. A state-by-state summary, page A17.

A Guide to Super Tuesday

LEAD: Seton and Brian Beckwith bought a brownstone here seven years ago amid hopes that this old waterfront city, minutes from Wall Street and with spectacular views of New York, would be transformed into a new middle-class community.

A Dream Falls Flat: Fleeing Hoboken for the Suburbs

LEAD: The Financial Times, Britain's salmon-pink business daily, has just marked its centenary with a $100,000 banquet, testimonials from a bevy of knights and peers, and a door-stopper of an official history that runs 543 pages. Indeed, there has been much to celebrate at a paper that began as a few-page handout and whose first editor was described as having ''no notion of writing and poorly educated.

Financial Times Seeks Its Own Pace

LEAD: Seven months after Congress approved a $10.8 billion rescue of the nation's savings and loan insurance system, the industry, regulators and financial experts are formulating contingency plans for a second bailout, which many predict will come out of taxpayer dollars.

F.S.L.I.C.'s 2d Bailout Is Studied

LEAD: Neoax Inc. said yesterday that it had agreed to acquire the IU International Corporation for about $670 million.

IU Accepts Sweetened Bid Of $670 Million From Neoax

LEAD: The Soviet Union is making fundamental changes in its strategic military doctrine, from one of offense to defense, American military experts and scholars agree.

Soviet Arms Doctrine in Flux: An Emphasis on the Defense

LEAD: Joe Dulle, the president of a group of retail stores in Texas whose headquarters is in Fort Worth, often drives to visit his store in San Antonio. If he flies, he normally takes a commuter airline that goes out of a nearby airport.

Fliers Sweat and Fret For Triple-Mileage Deal

LEAD: In a savings climate clouded by changes in the Federal tax law and uncertainties about the stock market, the business of Individual Retirement Accounts is shifting gears. Fewer people are opening accounts, and those who do show a preference for investments that have historically been safe and stable.

I.R.A. Demand Slows And Caution Prevails

Harris Glenn Milstead, better known by the stage name Divine, was an American actor, singer and drag queen. Closely associated with independent filmmaker John Waters, Divine was a character actor, usually performing female roles in cinematic and theatrical productions, and adopted a female drag persona for his music career.

Divine, American drag queen and film actor (born 1945)

Divine_(performer)

Ülo Õun was an Estonian sculptor whose career began in the late 1960s and came to prominence in the 1970s. Õun mainly worked as a portrait and figural sculptor and was known for his works in colored plaster and bronze.

March 7, 1988

Headlines from March 7, 1988

NEGLIGENCE IS SEEN IN PARTS OF CANAL CEDED TO PANAMA

SHAMIR FOILS VOTE ON U.S. PEACE PLAN

His Record of Success Is Sure, But Boeheim Is Still a Mystery

Big East Penalizes Jayson Williams

The Los Angeles Life, but on New York Time

Billboard 200

Faith

Dirty Dancing

Kick

Tiffany

Bad

Notable Deaths

Historical Context for March 7, 1988