March 8, 1997

There are reports that Peruvian police forces are burrowing tunnel to Japanese Ambassador's residence, as part of plan to rescue hostages; Defense Min denies existence of any tunnels, and a police official dismisses rebels' reports of hearing digging noises as 'an invention'; Pres Alberto K Fujimori says he remains dedicated to resolving crisis peacefully, but he adds that peaceful approach will last only as long as rebels 'fully respected the life and health of the hostages'; photo (M)

Labor Dept reports that job market grew at unexpectedly brisk pace in February, buoyed by unusually favorable weather for construction, as unemployment rate slipped tenth of a point, to 5.3 percent; payrolls expanded by 339,000, much more than was generally expected; charts (M)

Flood Crest Hits Louisville The highest flood crest on the Ohio River in 33 years reached Louisville, Ky., but the city remained mostly dry behind its flood wall. Page 7. Changes for Sports Viewers Cablevision plans to overhaul the way New Yorkers pay to watch local teams on cable TV, raising concerns about higher prices. Page 37. Jamaican Statesman Dies Michael Manley, the former Jamaican Prime Minister, who became an eloquent spokesman for third world causes, is dead at 72. Page 52.

R W Apple news analysis of Pres Clinton's cool style in dealing with hot questions about fund-raising in White House; finds that Clinton, at news conf, stood his ground on issue, and indicated that he is convinced it is inside-the-Beltway phenomenon, not a national preoccupation, and that he need only stay cool and let it peter out (M)

Pres Clinton, at White House news conf, gives doggedly genial but unapologetic defense of fund-raising for his re-election; says that like Vice Pres Gore, he might have asked supporters for money during telephone conversations from White House but that he could not remember any specific calls; says that he had always disliked making such calls but that he could have placed them legally; although he defends Gore's telephone calls, he adds that he agrees with Gore's decision to stop soliciting money from his White House office; Clinton also firmly defends Margaret A Williams, Hillary Rodham Clinton's chief of staff, who admitted this week that she accepted $50,000 check from contributor in First Lady's offices; asserts that no one at White House would ever accept such checks again and that he knows of no other instances when anyone had; photo (L)