LEAD: The school district in the suburban city of Chelsea, which is the most troubled and impoverished system in the state, is on the verge of ceding control of its five schools to Boston University this fall.

Ailing School System Seeks Control by Boston University

LEAD: The executive director of the New York City Emergency Medical Service, James Kerr, resigned yesterday, saying he could no longer effectively manage the beleaguered agency.

Ambulance Director in New York Resigns as Agency Is Under Attack

LEAD: The Federal Deposit Insurance Corporation tonight announced a bailout of the First Republicbank Corporation of Dallas, one of the nation's largest and most troubled banking companies.

U.S. WILL PROVIDE BILLIONS TO RESCUE AILING TEXAS BANK

LEAD: An appeals court told the agency that it must release a tape of conversations aboard the Challenger just before the craft exploded. Page 31.

Court Setback for NASA

INSIDE

LEAD: In the first verdict of its kind, the Inter-American Court of Human Rights today found the Honduran Government guilty in the disappearance of a Honduran citizen in 1981.

O.A.S. Tribunal Finds Honduras Responsible for a Political Killing

LEAD: A critical test firing of the space shuttle Discovery's main engines was set back another three days today, until next Thursday, as engineers grappled with two new malfunctions - a mysterious hydrogen leak on the launching platform and a balky oxygen pump at some distance from the launching platform.

Shuttle Test Firing Delayed Again After New Malfunctions Surface

LEAD: Mikhail S. Gorbachev, the Soviet leader, presented the Communist Party Central Committee today with a compressed timetable for introducing several key changes in the political system that were endorsed at the recent party conference.

'TIME IS PRESSING,' SOVIET CHIEF SAYS

LEAD: Nelson Mandela, speaking through his lawyer, today repudiated a claim by a public relations consultant from North Carolina who said he had been given power of attorney to represent the Mandela family interests and prevent ''the rip-off'' of the imprisoned anti-apartheid leader's name.

Who Speaks for Nelson Mandela?

LEAD: A Federal appeals court ruled today that a Federal Communications Commission ban on the broadcasting of ''indecent'' language during evening hours violated the rights of free speech.

Court Rejects an F.C.C. Curb On 'Indecency' in Broadcasts

LEAD: ''Any time you have to stop, it frustrates you.'' - Sterling Walker, chief of mechanical systems at the Kennedy Space Center.  [ 1:5. ]

Quotation of the Day

LEAD:  International 2-6, 26  Mikhail S. Gorbachev urged speed in putting into practice changes in the Soviet political system that were endorsed at the Communist Party conference. The changes would reduce the power of the party. Page 1  Israelis in Moscow went to services at the Central Moscow Synogogue.

NEWS SUMMARY

LEAD: The Burmese authorities seized more than 10 critics of the Government and the Burmese correspondent of The Associated Press, Western diplomats contacted in Rangoon, the Burmese capital, said today.

Authorities in Burma Round Up Dissidents

LEAD: Speaking to the families of soldiers still unaccounted for in the Vietnam War, President Reagan warned today that the ''deep pain'' felt by the American people will continue to poison relations between Washington and Vietnam until Hanoi helps to resolve all questions concerning the men. ''It is in the interests of Hanoi,'' he said, ''to position itself for a new era and to help bring this to pass.

Reagan Says Ties to Hanoi Hinge on Issue of the Missing

LEAD: A front-page article yesterday about a new computer system for controlling air traffic misstated the meaning of a yellow display. It will indicate to the controller that an action is required, not that action is required immediately and urgently.

Corrections

LEAD: A collision in Tokyo Bay last week between a submarine and a fishing boat that left 30 people dead has touched off fierce criticism of Japan's armed forces and revealed the depth of public ambivalence about the role of Japan's military.

Japanese Ask Which Side Navy Is On

LEAD: South Korean parliamentary leaders approved a proposal today for lawmakers from North Korea and the South to meet at the border village of Panmunjom to discuss Pyongyang's participation in the Olympic Games.

Seoul Backs Plan to Discuss Olympic Games With North

LEAD: Because of an editing error, a brief article in some editions yesterday about the National Medal of Arts misstated the number of recipients.

LEAD: An article on the Health page on Thursday about contraceptive choices gave incorrect figures for unmarried women who were sterilized.

LEAD: Undertaking the most decisive political battle of his career, Prime Minister Noboru Takeshita told Parliament today that he was determined to press ahead with a tax overhaul that is Japan's predominant domestic issue.

Takeshita Stakes Prestige on Tax Plan

LEAD: For most Muscovites, the ideal summer vacation is a week or two at a Black Sea or Baltic Sea beach.

A Lunch, a Walk and a Beach, Maybe

LEAD: ''Shalom,'' said Rabbi Adolf Shayevich of the Central Moscow Synagogue, who has welcomed a lot of Israeli visitors lately but none like this.

Israelis in Moscow: A Bit of Banter, and Prayers

LEAD: Saudi Arabia, which is helping Iraq pay the cost of its involvement in the war with Iran, appeared today to step up pressure on Baghdad to compromise, urging it to accept a quick cease-fire, diplomats and United Nations officials said.

Saudis Are Said to Step Up Pressure on Iraq to Reach a Cease-Fire

LEAD: A Soviet literary journal began serial publication today of Arthur Koestler's classic anti-Stalinist novel ''Darkness at Noon,'' condemned for almost 50 years in Moscow as a slander on Communism.

Daylight Falls On 'Darkness'

LEAD: The Persian Gulf peace talks here are the latest indication that the United Nations, long faulted for failing to act as a world policeman, is finding growing importance in the more modest role of a kind of international go-between, resolving regional conflicts. It is not the role the

Regional Successes Bring New Support

Chrystal Lim Wen Chean is a Malaysian rhythmic gymnast.

July 30, 1988

Headlines from July 30, 1988

Ailing School System Seeks Control by Boston University

Ambulance Director in New York Resigns as Agency Is Under Attack

U.S. WILL PROVIDE BILLIONS TO RESCUE AILING TEXAS BANK

Court Setback for NASA

INSIDE

Billboard 200

Hysteria

Appetite For Destruction

OU812

Dirty Dancing

Roll With It

Notable Births

Historical Context for July 30, 1988