July 2, 1992

President Bush made a bristling defense of his prewar policy toward Iraq today, saying the White House had no evidence in 1989 that President Saddam Hussein was misusing federally guaranteed bank loans to buy nuclear-arms technology illegally. That suspicion, still unproved, had been raised in State Department documents and has since become the focus of investigations by Federal prosecutors and a House committee.

The criminals faced Mecca, staring beyond the window bars and glittering rolls of razor wire lying between their basement prison mosque and the world outside. As they prayed, a bluejay burst freely above the sharply bladed gyres and out toward a cow herd grazing by an interstate highway that laced across the horizon, a teasing reminder to the prison Muslims of how sweetly meandering freedom can be.

Economic growth among manufacturers slowed somewhat in June, according to a survey of the nation's purchasing managers. Economists contend that the survey indicates that the rebound from recession will be gradual and drawn out. The National Association of Purchasing Management said that its index of economic activity had fallen to 52.8 percent in June, from 56.3 percent in May. The decline was largely a result of slower growth in production and new orders. A reading below 50 percent indicates that the economy is contracting, the group says, while a reading above 50 is a sign of expansion.

The 64,000 steelworkers at the Magnitogorsk Metallurgical Complex, the world's largest steelworks, are beginning to get nervous. The company is 90 days behind in paying wages and is offering instead 50-pound sacks of sugar and pieces of steel that the workers can try to resell. As production falls, 5,000 of the workers do not have a full day's work and some have been sent home on forced vacations.

ON a Saturday in June, two angel-faced boys named Chris Kelly and Chris Smith were led into a sterile, empty office in a secluded rehearsal studio here. They arranged their small, muscled bodies on folding chairs, and with the expressions of young, frisky dogs being forced into a bathtub, began their 50th-or-so interview of the last few months. So what if these longtime best pals, who happen to be the rap duo Kris Kross, are the fastest-selling new artists to hit the record industry in 20 years? So what if their first CD -- a collection of spunky, danceable hip-hop numbers called "Totally Krossed Out" -- outsold Bruce Springsteen and Garth Brooks before going double platinum (two million copies)? So what if they've been on "Arsenio Hall," "Today," "In Living Color," "Good Morning America," "A Current Affair" and a roster of other programs since the CD was released?