July 21, 1992

A deal seemed to be shaping up today for housing loan guarantees from the United States to Israel, in which Washington would give the Israelis the guarantees they are seeking in exchange for broad limits on settlement-building activity, but not a total freeze. A senior State Department official briefed reporters after the second day of talks here between Secretary of State James A. Baker 3d and Israel's new Prime Minister, Yitzhak Rabin. The official said he was now hopeful that an arrangement for loan guarantees could be worked out in a way that would "match their needs as well as ours."

Ross Perot's plan for restoring the nation's economic health, nearly complete when he withdrew from the Presidential race last week, included a far-reaching program of investment in education, transportation and communications, as well as higher income taxes for the well-to-do, increased gasoline taxes and holding down increases in Social Security benefits. The center of the Perot blueprint, his senior aides said, was balancing the budget in five years, with cuts in spending as well as new taxes to reduce the deficit by an average of $150 billion a year over the five years. Gasoline Tax Increase The plan, about 50 pages long, included many steps long regarded by economic experts as necessary and by political experts as untenable. Among them were slowing increases in Social Security benefits and increasing the gasoline tax by a total of 50 cents a gallon over five years.

IS it Satan or is it Salem? A wave of cases in which men and women suddenly remember traumatic events from their childhood has set off a debate among psychologists who study memory and trauma. Some psychotherapists say that symptoms like depression can result from childhood sexual abuse, even if the memories of it have been repressed. A few even claim that some of these cases of sexual abuse were part of the rituals of Satanic cults.

NEW YORK CITY SCHOOL-SECURITY CHIEF UNDER FIRE The chief security officer for New York City's public schools and his two top aides were accused of an array of improper activities, including a conflict of interest involving a private real estate deal and the hiring of a dozen relatives. In an 80 page-report, the school system's top investigator concluded the chief security officer, Bruce A. Irushalmi, was a "silent partner" in a Bronx apartment with one of his top aides, Joseph Capalbo. The report also said Mr. Irushalmi's deputy, Henry R. Murphy, had hired a dozen relatives as security guards in violation of nepotism rules. A1. BOUNCER ACCUSED OF SHOOTING OFFICER A 24-year-old bouncer at a Queens bar is suspected in the fatal shooting of an off-duty Housing Authority police officer and another man after a brawl on a Bayside street early Saturday morning, the police said. B3. REP. SCHEUER WILL NOT RUN AGAIN New York's Congressional redistricting claimed another incumbent when Representative James H. Scheuer of Queens said he would not seek a 14th term. The 72-year-old Queens Democrat had earned the sobriquet "The Flying Dutchman" for frequently switching districts. B3. WORKERS CHARGED IN TICKET SCHEME Two employees of the city's Department of Transportation and one former employee have been arrested and charged with accepting bribes to fix traffic tickets. Officials said the three were all using different methods to pocket money that was properly owed the city. B3. SPARING A COLONIAL-ERA CEMETERY Mayor Dinkins has asked the Federal Government to "suspend all excavation and construction activities" on part of a 34-story office tower being built on the site of a colonial-era cemetery for black New Yorkers in lower Manhattan. He also said Congress should designate the area a national historic district. B3. HOUSING PLAN CLEARS HURDLE A much-disputed plan to replace the historic Brighton Beach Baths with a housing development cleared a major hurdle when it won the endorsement of the New York City Planning Commission. But approval of the Brooklyn project, known as Brighton-by-the-Sea, came only after the developer agreed to several changes, including scaling down the project and adding subsidized housing. B4. Neighbors seem to welcome new arraignment court on West 54th Street. B2. REGION TRENTON REJECTS LAWMAKING BILL In a stunning rejection of their party's primary platform and campaign promises, Republican legislators in Trenton have rejected proposals to provide citizen lawmaking through initiative and referendum. The votes, which left grass-roots backers stunned and angry, were among a blur of activity following a break in which the Republican-controlled Legislature took a brief post-budget vacation and Governor Florio attended the Democratic National Convention. B5. NASSAU POLICE OFFICERS GET RAISES Nassau County approved a contract to give its police officers salaries that are among the highest in the country, saying they were the last bulwark against criminals from New York City. B5. Our Towns by Lynda RichardsonB5 ChronicleB18

The BankAmerica Corporation said today that it earned $240 million, or 63 cents a share, for the second quarter, in what analysts and bank executives called an impressive show of strength after its acquisition of the Security Pacific Corporation last year. BankAmerica agreed to acquire its California rival last August in a $4 billion deal. The combination of the two largest banks in the West created the nation's second-largest banking company, after Citicorp. Because this was the first quarter in which the resulting company reported combined results, financial performance cannot be directly compared with previous quarters.

The first 24 hours of a cease-fire negotiated by the European Community passed today amid such heavy fighting that the United Nations military commander here closed Sarajevo Airport and suspended the airlift of food and medicine that has been sustaining this besieged city. Because of the airport closing, ordered by Maj. Gen. Lewis W. MacKenzie of Canada, no relief aircraft flew in here for the first time in 23 days.

The Federal Government today approved New Jersey's proposal to drastically revise its welfare system, including a plan to deny additional benefits to mothers on welfare who have more children. The New Jersey plan, which its supporters say is intended to reward work and encourage stable families, will allow welfare mothers to retain more of their benefits if they go to work to support additional children, and allow them to marry without endangering benefits for their children.

A decade after "Star Wars" proponents first sought development of nuclear-powered laser weapons that could destroy enemy missiles as they streaked through space, the X-ray laser program suffered a final debilitating setback last week when the Energy Department quietly canceled its last scheduled test. Implementing the Bush Administration's new policy that limits nuclear testing to improving the safety and reliability of weapons, Energy Secretary James D. Watkins canceled a classified test of the nuclear-powered X-ray laser. No public announcement of the cancellation was made.

LAST fall the mummified corpse of a late Stone Age man melted out of a glacier high in the Tyrolean Alps. That spectacular discovery is providing archeologists with a startlingly vivid picture of how Stone Age man was clothed and equipped. Yet with other archeological material from the area so skimpy, there is almost no context in which to place this amazing individual, who stepped out of the ice nearly intact from the day he died some five millennia ago. "We look at cultures, and here is an individual," said Dr. Markus Egg, a prehistorian at the Roman-Germanic Central Museum in Mainz, which is restoring and studying the equipment found with the man. "That means it's really a forensic case."

President Bush delivered his strongest attack so far on his Democratic rival, calling Governor Clinton's economic proposals "smoke and mirrors" and "a big mistake" that would increase the Federal deficit. The remarks appeared to herald a tougher campaign style by Mr. Bush, who trails Mr. Clinton in opinion polls. Article, page A14.

At a time when states are feeling increasingly poor, David N. Levinson might seem a white knight, having brought more than $100 million in investments into the state from companies operating outside its borders. For seven years Mr. Levinson, the state's elected insurance commissioner, has put pressure on the insurance companies he regulates to invest in a list of local businesses drawn up by his office. What's wrong with hitting up these Goliaths for what amounts to small change, Mr. Levinson argues, to help a tiny state create desperately needed jobs?

The West Virginia glass industry has become a kind of prism through which North America's steady march toward a sweeping new free-trade agreement can be seen. The new pact with Mexico and Canada, which the three Governments now seem likely to reach within weeks, will clearly have widespread economic ramifications.