LEAD: The dispute over the Federal Bureau of Investigation's report on John G. Tower erupted with extraordinary bitterness today as the Senate began debate over his nomination as Secretary of Defense.

F.B.I. Report on Tower Provokes Bitterness as Senate Opens Debate

LEAD: The Internal Revenue Service said today that the nation's three and a half million employers have until July 1 to begin complying with an ambitious new law covering benefit plans, and it said no penalties would be imposed this year so long as honest efforts to comply with the measure are made.

I.R.S. Grace Period Satisfies Few Critics of Benefits Rule

LEAD: The West German police said yesterday that they had broken up a major computer spy ring that worked with Soviet intelligence agents to steal United States military computer passwords, software and other data. Five people were arrested as investigators searched more than 15 houses and apartments in three cities.

West Germans Raid Spy Ring That Violated U.S. Computers

LEAD: When Mayor Edward I. Koch let Joseph DeVincenzo, a former aide responsible for the Talent Bank, resign with his full pension, the administration was in possession of documents that appeared to establish a conflict with Mr. DeVincenzo's testimony to a state investigative commission.

Letters Clash With Account Of Ex-Official

LEAD: The debate over the Tower nomination carried a grim sense of history, a sense underscored as Congress celebrated its Bicentennial. Page A22..

Making and Honoring History

LEAD: Two days after Iran threatened to break off diplomatic relations, Britain's Foreign Secretary today sharply distanced the Government from Salman Rushdie's novel ''The Satanic Verses.'' He said the book was not only offensive to Muslims but had also compared Britain to Hitler's Germany.

Britain, in Talk Aimed at Iran, Calls Rushdie Book Offensive

BUSINESS DIGEST

LEAD: George Fallon, the undersheriff of Camden County, N.J., is a lawman to the core, and he finds it a little hard to take the black arts of Satan worship altogether seriously.

A Jersey Enigma: Do Satanists Lurk Among Us?

LEAD: Sales of new single-family homes increased by 4.9 percent in January, the biggest gain in seven months, but analysts said the rise resulted in part from unusually mild winter weather.

New-Home Sales Up 4.9% In January

LEAD: In the early hours of Nov. 11, the police arrested a Queens woman, saying she had planted a bomb at the Norwalk headquarters of the United States Surgical Corporation. The bomb plot - called a protest against the company's use of dogs in surgical training - was quickly condemned by the company as an example of growing fanaticism in the animal-rights movement.

Animal-Rights Case: Terror or Entrapment?

LEAD: Industry and Government officials are expressing increasing concern over the erosion of the little-known but crucial American industry that supplies the silicon wafers, etching equipment and other machinery and materials used in making computer chips.

Pillar of Chip Industry Eroding

LEAD: IF the American musical comedy is an endangered species, its precarious state cannot be attributed to a shortage of talented singers. Not only in New York, but around the country where light-opera companies and community theaters perpetuate the classic shows of Broadway's golden age, young performers are emerging who have been bitten hard by the musical-theater bug.

Three Young Singers Make Show Tunes Hum

LEAD: Nearing a strike deadline, Eastern Airlines made a new proposal today in the long-deadlocked contract talks with its machinists' union.

New Proposal Made By Eastern Airlines In Machinist Talks

LEAD: The budget director, Richard G. Darman, told Congress today that the long-term assumptions on interest rates and other economic factors underlying the Bush plan to bail out the savings and loan industry were optimistic and ''almost certain to be wrong.''

Darman Calls Savings Numbers Optimistic

LEAD: Although money market accounts at banks were designed to be competitive with money market mutual funds, the only similarity between the two these days is their name.

Why Banks Pay Less on Funds

INSIDE Coach Cites Steroid Role

LEAD: In a development that could lead to widespread debate over Government sponsorship of foreign research efforts, the Sony Corporation of America said yesterday that it had submitted a bid to the Defense Department for contracts to develop a high-definition television system.

Sony Seeks TV Grant From U.S.

LEAD: Negotiators for the Government and the Solidarity union have agreed in principle to issue a joint appeal for relief of Poland's crushing foreign debt, diplomats and members of the two negotiating teams said today. Such a plea that would challenge Western governments to lift the last vestiges of the financial quarantine imposed after martial law was declared seven years ago.

SOLIDARITY PLANS TO JOIN THE REGIME IN ASKING DEBT AID

LEAD: In the latest border hostilities between New York and New Jersey officials, state legislators here today introduced ''retaliatory'' bills to raise income taxes for some of the 100,000 people who live in New York but work in New Jersey.

Jersey Lawmakers Plan Retailiatory Tax on New Yorkers

LEAD: With a surge of arrests, most of them on drug charges, adding 200 inmates a week to New York City's overcrowded jails, the City Correction Department proposed yesterday a package of emergency measures that include housing prisoners on barges moored on both sides of Manhattan by the early summer.

Jail Influx Brings Plan For 2 Barges

LEAD: In an unexpectedly strong move, the 12 European Community countries agreed today to eliminate by the end of the century their production and use of chemicals that harm the atmosphere's ozone shield.

12 EUROPE NATIONS TO BAN CHEMICALS THAT HARM OZONE

LEAD: IN a season when the New York art world may seem to be wrapped in slick surfaces, status and money, three surprising sculpture shows, in three different boroughs, zero in on a more naked and physical reality. Each show is, in a way, exclusive. All 11 artists in one are black; all six artists in another are women; in the third, the four artists are men.

Review/Art; Going Beyond Slickness: Sculptors Get Back to Basics

LEAD: In an effort to slow the spread of AIDS among intravenous drug abusers, Federal health agencies yesterday proposed a major liberalization in the availability of methadone to addicts seeking treatment.

U.S. to Ease Methadone Rules For Addicts to Combat AIDS

WEEKENDER GUIDE

LEAD: Six members of what the police and prosecutors described as a large and violent drug gang were indicted yesterday by a Brooklyn grand jury in nine murders, seven attempted murders, several assaults and other crimes.

6 Indicted in 9 Murders Linked to a Drug Gang

Erwin Gerardus Theodorus Franc Mulder is a Dutch professional footballer who plays as a goalkeeper. He is a former Netherlands U20's international and also received a call up to the senior Netherlands side in 2012.

March 3, 1989

Headlines from March 3, 1989

F.B.I. Report on Tower Provokes Bitterness as Senate Opens Debate

I.R.S. Grace Period Satisfies Few Critics of Benefits Rule

West Germans Raid Spy Ring That Violated U.S. Computers

Letters Clash With Account Of Ex-Official

Making and Honoring History

Billboard 200

Don't Be Cruel

Appetite For Destruction

Electric Youth

Traveling Wilburys

Shooting Rubberbands At The Stars

Notable Births

Historical Context for March 3, 1989