November 30, 2004

American officials say Iraqi police and national guard forces, whose performance is crucial to securing Jan elections, are foundering in face of coordinated efforts to kill and intimidate them and their families; Iraqi recruits have been victims of assassinations and car bombs aimed at lines of applicants as well as police stations; in latest attack, suicide bomber rammed car into group of police officers west of Ramadi, killing 12 people; local American commanders and security officials say both Iraqi forces are riddled with problems; say that in most violent provinces, they are so intimidated that many are reluctant to show up and do not tell their families where they work; say they have not yet received adequate training or weapons, and they present danger to American troops they fight alongside; say they are unreliable because of corruption, desertion or infiltration; Lt Gen David H Petraeus, American commander overseeing training of Iraqi security forces, acknowledges shortcomings in Iraqis' performance, particularly by police in Mosul and in Anbar Province; says they have done well in Falluja, Najaf, Kut, Hilla, Karbala and much of southern Iraq, where security situation is not as dangerous; photo (M)

Sarah Boxer Critic's Notebook column on ringtones for cellphones that can be downloaded from Internet; Billboard magazine has started Hot Ringtones chart and says American ringtone business will probably rake in $300 million this year; photo (M)

Merck Sets Up Bonus Plan For 230 Senior Executives With its stock falling since it withdrew the arthritis drug Vioxx and its ability to thrive as an independent company uncertain, Merck has adopted a plan to give its executives a chance for bonuses if the company is taken over. Merck said in a securities filing that its board had decided to give its 230 most senior managers the opportunity for a payment of up to three years of salary and bonus if another company buys Merck -- or merely buys more than 20 percent of its shares. [Page A1.] Another Purchase by UnitedHealth UnitedHealth said that it would buy Definity Health for $300 million. The acquisition was the latest move in the company's strategy of diversifying away from its signature managed care business. Earlier this year, UnitedHealth acquired Oxford Health Plans and Mid-Atlantic Medical Services. Shares of UnitedHealth are up 42.6 percent so far this year. Market Place. [C2.] Traders Accused of False Reports Five former traders for Reliant Energy, the El Paso Corporation and Dynegy were indicted on charges of reporting false trades to newsletters to manipulate natural gas prices. [C2.] 4 Studios Back DVD Format A group of companies led by Toshiba made a major advance in the effort to define a new DVD standard as Paramount and three other Hollywood studios announced that they would release films in the group's high-definition DVD format by the end of next year. [C6.] Witness Deferred to Eisner's Wish Richard A. Nunis, a former director of Walt Disney, testified that he deferred to the decision of Michael D. Eisner in the firing of former president Michael Ovitz and in giving him a $140 million severance package. [C14.] Bhopal Victims Not Fully Paid Almost 20 years after a gas leak from a Union Carbide pesticide factory in Bhopal, India, that killed 7,000 people, the victims are poorly compensated and the companies have gone unpunished, a study by Amnesty International found. [World Business, Section W.] Kellogg Picks Director as Chief James M. Jenness, left, was named chairman and chief executive of Kellogg to succeed Carlos M. Gutierrez, who was nominated by President Bush to be commerce secretary. Mr. Jenness has been a Kellogg director since 2000 and serves as head of the board's consumer-marketing committee. He was once a vice chairman and chief operating officer of the Leo Burnett Company. [C4.] Editor of Le Monde Steps Down The editor in chief of Le Monde, Edwy Plenel, resigned from the paper, which has been struggling with a downturn in advertising and circulation. [World Business, Section W.] Wal-Mart Appeals Earlier Ruling Wal-Mart Stores asked an appeals court to overturn a ruling allowing 1.6 million women workers seeking back pay to sue the company for discrimination as a group. [C12.] S.&P. and Dow Fall; Nasdaq Gains The Standard & Poor's 500-stock index fell 4.08 points, to 1,178.57, on disappointing November sales at Wal-Mart. The Dow Jones industrial average lost 46.33 points, to 10,475.90. The Nasdaq composite gained 4.90 points, to 2,106.87, after three analysts raised their share-price forecast for Apple Computer, the maker of iPod digital music players. [C13.] Saudi Arabia to Raise Capacity Saudi Arabia plans to expand oil output capacity by 14 percent to avert shortages. [C13.] Another View on Airport Security Men take issue with seemingly inconsistent or incomplete security measures at many airports. Joe Sharkey: On the Road. [C9.]

German development bank Kreditanstalt fur Wiederaufbau plans to sell shares in German postal service, Deutsche Post, worth 1.15 billion euros ($1.52 billion) (S)

Article on Cavalia, new equestrian-based circuslike extravaganza developed by Cirque du Soleil founder Normand Latourelle that is being presented inside tent on beach near Santa Monica Pier in California; Latourelle says he expects to bring show to New York in spring; photos (M)