February 20, 1992

IN the sea of parents and nannies waiting outside Public School 87 on the Upper West Side of Manhattan the other afternoon, Marilise Flusser was hard to overlook. She was the mother in the Mickey Mouse colors -- canary yellow clogs and matching sweatsuit under a tomato red raincoat lined in more canary yellow. The one-green-sock, one-red-sock mother. "Kids love color," she said as girls and boys in bright parkas and backpacks began spilling out of the school door and onto the sidewalk. Suddenly this stretch of West 78th Street between Amsterdam and Columbus Avenues became a fashion runway with Ms. Flusser, a former children's fashion coordinator at Saks Fifth Avenue, doing curbside commentary.

A leading candidate to become the next chairman of I.B.M. stunned the giant computer maker by announcing today that he would leave to head the Hughes Aircraft Company, the military contractor that is reshaping itself into a commercial technology company. The executive, 53-year-old C. Michael Armstrong, is one of five members of I.B.M.'s management committee and the chairman of the company's foreign operations. He was widely considered to have the best shot at replacing John F. Akers as chairman three and a half years from now, when Mr. Akers is scheduled to retire at age 60. Struggling to Streamline

U.N. Presses Iraq on Arms The United Nations Security Council sent an envoy to Baghdad to seek new assurances that Iraq will cooperate in the destruction of arms. Page A3. New Look at '83 Jet Downing A navigator has undercut a theory that simple error led a South Korean airliner to stray over Russia before it was shot down in 1983. Page A12. Hospital Pact Is Reached A Manhattan hospital reached an agreement with its union that guarantees all 4,000 employees their jobs and free medical benefits. Page B1. Hollywood's February Rite "Bugsy's" 10 nominations lead an Oscar pack that includes an animated feature in the best-picture category and a 24-year-old director. Page C15.

In a vote that may affect the shape of Israel's next Government and the course of Middle East peace talks, Yitzhak Rabin outpolled Shimon Peres early today for the leadership of the opposition Labor Party in national elections early this summer. In a four-candidate party primary, the first ever conducted in Israel, Mr. Rabin barely scraped together the 40 percent share of the vote that he needed to avoid a runoff against Mr. Peres, the incumbent leader and his political rival for nearly two decades.

NEW YORK CITY WITHOUT A TRACE In a hushed courtroom, a 23-year-old woman testified about the day her father suddenly disappeared in 1988, never to be heard from again. The man was Liborio Milito, one of several men whose murders John Gotti is charged with authorizing. B3.