August 9, 2003

South African government, bowing to regional and international clamor for more vigorous attack on AIDS epidemic, says it will develop plan to offer drugs to combat HIV virus to infected people through its public health system by Oct 1; announces shift in drug policy after special meeting to assess financial costs of national drug plan and to explore treatment options; about 5 million South Africans, over 11 percent of population, are infected with HIV, including 20 percent of population aged 15 to 49; epidemic poses major threat to nation's future by primarily affecting young sexually active adults and incapacitating tradition extended family system that cares for sick and orphaned relatives; Pres Thabo Mbeki and his top aides have long resisted national drug programs; government is also expected to provide prevention programs; Bush administration lauds plan (M)

New York State Governor George E Pataki offers compromise to assume portion of New York City's debt payments from 1970's fiscal crisis, but Mayor Michael R Bloomberg administration rejects offer in attempt to hold out for possibility that aid package Legislature has approved will be upheld in court (M)

Gasoline prices continue to rise, due to rising oil prices and low stockpiles in US; price of oil reaches $32.85 per barrel, highest since March 18, and economists predict that prices will remain high for remainder of 2003; factors driving down inventories include Iraq war, production cuts by OPEC and general strike in Venezuela (M)

Travelers Property Casualty Corporation, American International Group and Radian Asset Assurance will stop writing insurance policies for American brokerage houses; three companies are only insurers currently to offer such policies, which insure investors in event of brokerage declaring bankruptcy; have yet to pay single claim but are exiting business in wake of spate of recent corporate bankruptcies (M)

Allianz and AXA insurance companies are arguing that Deutsche Bank building near World Trade Center site should not be torn down, but should instead be cleaned and repaired, even though Deutsche officials cite thousands of samples taken from building proving it is too contaminated to occupy; ground zero developers' plans include building's destruction, complicating rebuilding efforts; photo (M)

Violence Flares in Mideast Three Palestinians, including two militants, and an Israeli soldier were killed as five weeks of relative calm were shattered. PAGE A2 Proof Is Cited in Terror Case Prosecutors have told a judge that they have proof that Zacarias Moussaoui plotted to fly a hijacked plane into the White House. PAGE A7

Verizon announces break in negotiations with Communications Workers of America and International Brotherhood of Electrical Workers; talks to resume Aug 12 at two separate locations; parties remain at odds over health care and job security provisions of workers' contracts (M)

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Government officials say Defense Intelligence Agency experts believe that most likely use for two mysterious trailers found in Iraq was to produce hydrogen for weather balloons used in artillery practice, not biological weapons; agency and Central Intelligence Agency officials say agencies still stand by their May 28 report that trailers were for making biological arms; it was not previously known that majority of Defense Intelligence Agency's engineering teams had come to disagree with that report; officials say teams had not completed work at time report was drafted and that their views were not taken into account at that time (M)

A group of conservative Episcopalians said they would ask the worldwide Anglican Communion to create a second province for the church in the United States following approval of an openly gay bishop. And the spiritual leader of the world's Anglicans said he would call a meeting to avert a schism over the issue. Articles, Page A8.

Co-op City, sprawling apartment complex in Bronx (NYC) that has provided housing for lower-income, working families since 1968, is in financial and physical ruin; buildings and grounds are falling apart and complex has not raised maintenance fees since 1995, driving complex into debt and constant disrepair; Co-op City has become wedge between New York State and residents, who do not want to accept state's offer of $200 million for repairs, for fear that they will not receive larger sum; photos (M)

Democratic leaders quarrel over how best to beat back drive to recall California Gov Gray Davis; some favor continuing fight, while others want to endorse Democrat to replace Davis; his aides, joined by some state and national leaders, insist party should focus on persuading voters to reject recall; 33 members of state's Democratic Congressional delegation, led by Nancy Pelosi, House minority leader, reportedly favor opposing ouster while endorsing Lt Gov Cruz M Bustamante to replace Davis; photo (M)