May 26, 1988

LEAD: THESE days the word country means big business in American towns and cities. Country sells clothing and fabrics, groceries and restaurants, house plans and home furnishings that range alphabetically from afghans to zinc-lined dry sinks.

LEAD: Defying the Organization of Petroleum Exporting Countries' attempt to restrain production by its members, Iraq is making a major effort to expand its oil output and export capacity, its oil minister, Issam Abdul-Rahim al-Chalabi, said here today.

LEAD: New England's largest electric company today filed with the State of Connecticut a conservation plan intended to cut in half the growth in demand for electricity.

LEAD: THE living room of the country-style apartment in the Chelsea section of Manhattan was filled with a dozen women, mostly in their 30's. In another era, they might have been gathered for consciousness raising. But the women, most of them busy with jobs and children, were there to shop: they were looking at children's fashions sold by a new company, Clothes to

LEAD: Carl C. Icahn yesterday offered to buy Texaco Inc., the nation's third-largest oil company, for $60 a share, valuing the company at about $14.6 billion.