January 5, 1994

YOU may never have thought of drying fruit at home, but then you've probably never thought much about practicing alchemy, either. The two processes actually have a lot in common. Removing the moisture from fruit almost magically changes its nature, concentrating sweetness and adding deep complexities of flavor. It's as if, when the common denominator of water is removed, the core of the fruit's particular character is revealed. This culinary metamorphosis has a long history. People in hot, dry climates have been drying fruits for centuries -- from tomatoes laid out on Italian porticos to apricots drying in Iranian courtyards to chilies on tables outside Tunisian restaurants. Until recently, the primary purpose of this exercise was preservation; when deprived of its water, fruit lasts for months, making it an ideal provision for long and difficult journeys.

The peasant guerrilla army that burst into Mexican life with the New Year retreated today from this town and others it had occupied in the southern state of Chiapas as army troops moved in. Fighting continued around the city of San Cristobal de las Casas and the town of Ocosingo as rebels from the force, which calls itself the Zapatista Army of National Liberation, battled soldiers backed by planes and helicopter gunships. Military officials said at least 93 people had been killed since the rebels seized the state's second-largest city and three sizable towns just hours after the North American Free Trade Agreement went into effect.

MCI Communications, the company that pried open A.T.& T.'s monopoly on the long-distance telephone business more than 20 years ago, announced today a $2 billion plan to invade the local telephone market. MCI also announced a vaguely defined "vision" to team up with unspecified partners on a $20 billion effort to upgrade its long-distance network for an array of voice, video and high-speed data communications.

The American auto industry finished 1993 on a strong note with sales in December roughly 5 percent ahead of 1992 levels and overall sales for the year up about 8.4 percent. Several foreign manufacturers, including Volkswagen and Mercedes-Benz, had not finished tallying their numbers late today, preventing an exact accounting. However, sales analysts at the Ford Motor Company estimated total industry sales of 8.6 million cars for 1993 and 5.6 million light trucks for a total of 14.2 million vehicles, the best year since 1989 and up from 13.1 million in 1992.

Varnishing sidewalks and streets with a treacherous icy coating, a wintry blast of snow, sleet and freezing rain closed major highways, disrupted air traffic and halted trains from Boston to Washington yesterday. New York City officials deployed a rumbling platoon of plows -- 360 in all -- and spread 16 tons of salt on the streets. To make matters worse, a 115-year-old water main that burst before dawn flooded a Manhattan subway station and disrupted rush-hour service for more than 250,000 passengers. One death was reported in the city yesterday, a 47-year-old contractor who slipped and fell on the ice and hit his head against his snowplow, the police said.

Backing away from their previous insistence that North Korea accept frequent nuclear inspections, Administration officials said today that they were prepared to accept North Korea's offer of one full inspection of seven atomic sites now in the hope that more could be agreed upon later. The officials said further that, under the terms of a tentative agreement with the North Koreans, the United States would urge South Korea to suspend joint military exercises with the United States if such an inspection is arranged and North Korea resumes talks with South Korea on guaranteeing the removal of all nuclear weapons from the Korean peninsula.

In the troubled East New York section of Brooklyn, Stanley Evans constantly corrects his students' English and lectures on the difference between the language of the office and the language of the streets. Just a few miles away in a similar neighborhood, another English teacher, Cathie Wright-Lewis, refuses to fault her already overwhelmed students; instead, she concentrates on being a role model, using crisp diction and good grammar.

Medicaid officials in many states have objected to a new directive from the Clinton Administration that requires states to help pay for abortions for low-income women in cases of rape or incest. In a letter written on behalf of the State Medicaid Directors' Association, Ray Hanley, the chairman of the group, strongly objected to the Administration position. Mr. Hanley is also the Medicaid director of Arkansas.

With three days left for Viacom Inc. to raise its bid against QVC Network Inc. in the battle for Paramount Communications, Viacom sent out mixed signals about such a prospect yesterday. Viacom's chairman, Sumner M. Redstone is "leaning against going forward," a person close to the company said yesterday. But people close to Viacom and the Blockbuster Entertainment Corporation, an equity partner in the offer, acknowledged that talks about a possible capital infusion continued into last night. No Firm Structure, Yet Viacom still has no firm structure for a new bid, the person close to Viacom said, adding that several of Viacom's top executives had also opposed a merger because they felt it could deprive their operations of capital for expansion.

The biggest class-action settlement offered by Prudential Securities in the scandal involving investors in 35 oil and gas limited partnerships has run into a significant roadblock. California's top securities regulator on Monday night filed a letter calling for a temporary halt in hearings on the company's $120 million settlement of the class action involving the Prudential-Bache Energy Income partnerships, which raised about $1.4 billion from 130,000 investors.

Federated Department Stores' bid for R. H. Macy & Company appears to have put Macy into play, putting pressure on others that are interested in the retailer to come up with competing plans. Chief among them is Dillard Department Stores Inc., whose past advances had been rebuffed by Macy. But Dillard is now said to be planning to enter the fray with a bid.

MCI Plans Local Phone Links MCI Communications plans to build 20 local telephone networks to bypass regional Bell companies. Page D1. Last-Minute Policy Scramble With NATO and Russia summit meetings looming, the United States lacks a cohesive policy. Page A3. Assessing Cuomo's Record As the Governor weighs another run, politicians and others offer mixed reviews of his 11-year tenure. Page B1. Losing Coaches Are Out Richie Petitbon of the Redskins and Jerry Glanville of the Falcons were dismissed. Page B11. Auschwitz's Future Debated A debate over whether the Auschwitz death camp should become a museum or be allowed to decay raises historical and moral issues. Page A6.