December 19, 1991

When Serbian irregulars withdrew last weekend from this picturesque hillside village 80 miles east of Zagreb, they left behind a vista of death and destruction. Drunken men in uniform, backed by at least one tank, moved methodically through this community of 2,000, blasting Croatian houses, killing civilians, and blowing to pieces the 550-year-old Roman Catholic Church at the town center, witnesses say.

Red bows, silver cardboard snowflakes and Christmas carols gave City Hall a proper holiday atmosphere today. But the mood was hardly festive here a day after Mayor Gerald McCann was found guilty of Federal fraud charges. One visitor likened the almost palpable sense of apprehension to "sitting on top of a volcano," while Brian K. Dorf, Mr. McCann's spokesman, said the dominant mood was "introspective."

The United States, Britain and France have agreed to begin a campaign to win international support for sanctions against Libya for the part they say it played in the bombings of a Pan American World Airways plane over Scotland and of a French airliner in Africa, in which a total of 440 people were killed, officials of the three countries said today. The three countries are considering a Security Council resolution that would at a minimum ban all international flights in and out of Libya, the sale of commercial planes and spare parts, and the delivery of any airline-related services.

Mideast Talks Recessed Israel and its Arab neighbors adjourned peace talks until January after failing to advance beyond procedures and agendas. Page A3. South Korea Nuclear-Free Trying to press North Korea to halt its nuclear weapons program, Seoul certified that the U.S. nuclear stockpile had been removed. Page A3. Sharpton and His Allies The Rev. Al Sharpton has used a variety of often surprising alliances to win a key role in the debate on race in the New York region. Page B1. Setback in the Drug War A year after President Bush proudly announced a sharp drop in illicit drug use, cocaine and heroin use is again on the rise. Page A18. Robin Hood of the Arts Prof. John Quentin Feller is an expert on Chinese ceramics. He is also a thief who would steal from one museum and give to another. Page C11.

One year after the bitter breakdown of a proposed merger they had billed as "made in family entertainment heaven," the Walt DisneyCompany and Jim Henson Productions said today that they had struck a narrower deal for Disney to distribute 30 years worth of Henson's Muppet programming on home video. The companies said the deal gave Disney distribution rights to the entire Henson library, including hundreds of hours of movies and television shows with Kermit, Miss Piggy and the other Muppets -- but not the "Sesame Street" characters -- for the next five to six years. Disney also agreed to finance the production of new home video shows from Henson Productions.