January 5, 2001

News analysis: Palestinians have dared Israelis to return to negotiating table, despite significant gaps between sides, rather than be labeled roadblock to peace; leading Palestinian newspaper says Palestinians hope their 'acceptance' of Pres Clinton's proposal will prevent Israeli negotiatiors from holding Palestinian side responsible for possible collapse of peace process; now it is Israel's turn to seek clarifications on peace proposal from Americans, to suggest that other side is bluffing and to seek way to shift attention to Palestinians; getting or keeping world opinion on their side is as important to Israelis and Palestinians now as more elusive goal of securing peace deal; photo (M)

Mexico City's air, called worst in world by United Nations in 1992, is getting fresher--or at least less foul; Dr Mario J Molina, Nobel Prize winner in chemistry who has lead most intensive study of problem yet undertaken, says there are data suggesting that air may be improving; notes there has been no smog alert for 15 months, and that amount of lead, carbon dioxide and sulfur dioxide in air is down; other pollution levels are still often unacceptably high, but on many days, especially weekends, air is sometimes clear enough to breathe with pleasure, in city where foul air contributed to deaths of hundreds of people in one week four years ago; improving air is result of increasingly stringent environmental rules, which call for cleaner fuels, catalytic converters on cars, emissions tests and rules on industry; photos (M)

Gen John M Shalikashvili, former chairman of Joint Chiefs of Staff, who conducted comprehensive study of nuclear test ban treaty at request of Pres Clinton, concludes that United States must ratify it in order to mount effective campaign against spread of nuclear weapons; his assessment is part of last-ditch attempt by Clinton to build support for treaty, which Senate Republicans rejected in 1999 and on which Pres-elect George W Bush's own top aides have sharply disagreed; Bush assailed treaty as unverifiable and unenforceable during presidential campaign, but he promised to continue Clinton administration's moratorium on nuclear testing for time being; some Republican lawmakers say they might reconsider if treaty is modified or accompanied by new safeguards and if new Republican administration supports it; Shalikashvili's report outlines measures intended to assuage critics of treaty (M)

Sen Strom Thurmond of South Carolina reportedly will nominate his son, Strom Thurmond Jr, to be United States attorney for South Carolina shortly after George W Bush is inaugurated; little opposition to Thurmond Jr's confirmation is expected in Senate, where elder Thurmond, who is 98, has served since 1954, longest tenure in Senate's history; younger Thurmond, who is 28, is praised by leaders of both parties in South Carolina as excellent choice for job; he has for last two years been prosecutor in Aiken County solicitor's office; photos (M)

Gates Leading the Charge Into Consumer Electronics The bearish news from the personal computer industry may be sowing fear in Silicon Valley, but none of that anxiety is apparent at Microsoft, whose software fortunes were built on the PC boom. For even with domestic PC sales down 24 percent in December from a year earlier -- and even as Microsoft is warning that its own revenue is likely to falter as a consequence -- consumer electronics is increasingly seen as the next big thing. Indeed, William H. Gates, the Microsoft co-founder who now calls himself chief software architect, seems focused on an entirely different business as his company prepares to introduce its X-Box video game system, its first foray into the high-stakes, high-risk consumer electronics business. [Page C4.]