August 14, 1989

LEAD: For the first time since the present round of violence began in Lebanon five months ago, large-scale ground fighting broke out today, with Muslim and Christian forces battling for control of a strategic area in the hills above Beirut.

LEAD: Does it matter who's mayor?

LEAD: Credit market analysts predict that short-term interest rates, which have been in a fairly constant decline since late March, are likely to move higher in coming weeks.

LEAD: Social Force or Monument? Resignations have called attention to disputes over the direction of the Martin Luther King Jr. Center for Nonviolent Social Change. Page A13. Contras on Regional Accord At base camps in Honduras, Nicaraguan rebels reacted to the regional accord disbanding them with defiance and apprehension.

LEAD: THE ECONOMY Vast sums of illegal drug profits are being clandestinely sent from the United States, hidden by electronic money transfers through computers and facsimile machines. Although many U.S. banks are being used unwittingly in these transfers, estimated to total as much as $100 billion a year, at least two are under investigation to determine whether they knowingly assisted drug operations.