The Week December 26-January 1

By Christopher John Farley, Sophfronia Scott Gregory, Michael D. Lemonick, Michael Quinn, Jeffery C. Rubin, Alain L. Sanders, Sidney Urquhart

NATION

New Deputy at State

Warren Christopher announced that he would nominate Strobe Talbott to replace ousted Clifton Wharton as Deputy Secretary of State, the No. 2 post in the department. An Oxford roommate of President Clinton's and still his close friend, Talbott now serves as ambassador-at-large to the states of the former Soviet Union, and has helped formulate the Administration's staunchly pro- Yeltsin Russian policy.

Gays in Military Appeal

In a strange turn of events, the Clinton Administration will challenge a court ruling that said the Pentagon's old policy toward gays was unconstitutional. The appeal, which avoids the constitutional aspects of excluding gays from the military, is based on the narrowest technical grounds: whether it is within the purview of the court to order the Pentagon to commission Midshipman Joseph Steffan, an admitted homosexual. The White House says it must challenge the ruling in order to ultimately defend its new and slightly more liberal "Don't ask, don't tell" policy when, as expected, it meets with legal challenges.

Compensation for Test Victims

With hitherto classified examples of cold war-era radiation tests on humans being revealed on a weekly basis, an appalled Energy Secretary Hazel O'Leary said the government should compensate the victims. The department estimates that 800 people were purposely used as "nuclear guinea pigs" in an effort to study the effects of radiation. It is still not known how many of the subjects understood what was being done to them. Defense Secretary Les Aspin has ordered a review of all files on the issue, and Congress will hold hearings on the tests soon after it reconvenes this month.

Erasing a Z in Louisiana

A panel of federal judges ruled that the Louisiana state legislature went too far when it tried to create a second black-majority congressional district after the 1990 census. In the judges' view the resulting district, which zigzags in a thin line for 600 miles along the state's northern and eastern borders, was the product of impermissible racial gerrymandering. Now the map must be redrawn before the state's 1994 elections.

First Suit for Disabilities Act

) The Justice Department filed suit against the state of Illinois and the city of Aurora, charging that the state allows policemen and fire fighters with certain medical conditions to be denied pension and disability coverage. Two men on the Aurora police department, one with diabetes and the other with back problems, were excluded from the group's pension fund because they had failed medical tests. The suit is the first under the new Americans with Disabilities Act.

Huge HMO Damages

A California jury has determined that Health Net, the state's second largest HMO, must pay $89.1 million in compensatory and punitive damages to the family of a now deceased cancer patient denied coverage for a bone-marrow transplant, a procedure that the HMO considers experimental. The company will appeal.

Bombs of Vengeance

Five people were killed and two wounded last week when a Rochester, New York, man, upset with members of his girl friend's family, sent bombs to their homes and workplaces across the state. Michael Stevens, 53, and his friend Earl Figley, 56, have been arrested.

Clinton's Winter Holiday

After a high-profile day of duck hunting in Maryland, President Clinton flew to Little Rock for a vacation that differed markedly from his celeb-studded retreat on Martha's Vineyard last summer. The President's average-guy holiday included bowling and sitting in on a University of Arkansas basketball game. Clinton then headed for Hilton Head, South Carolina, to spend New Year's at the annual Renaissance Weekend, a social and policy retreat for caring, sensitive power brokers.

WORLD

Borders Bedevil Mideast Talks

The question of who will control the border passages to the Gaza Strip and the West Bank near the town of Jericho after the Palestinians begin self-rule in those areas continued to trouble Israeli and Palestinian negotiators. The size of the area around Jericho that the P.L.O. will administer has reportedly been resolved, but the border-control dispute was seen as more crucial since it so sharply reflects the negotiations' essential conflict: Israel's concern for security and the Palestinians' desire for the trappings of statehood.

Israel, Vatican Announce Ties

Creating hope for greater tolerance and cooperation between Jews and Roman Catholics, Israel and the Vatican agreed to establish diplomatic relations. The Holy See will have its embassy in Tel Aviv rather than in the disputed city of Jerusalem, but Catholic officials clearly hope to participate in any negotiations on the future status of Jerusalem.

North Korean Nukes

U.S. and North Korean negotiators were closer to an agreement in their talks at the United Nations on international inspection of North Korea's nuclear facilities. No one is certain whether the politically isolated state possesses a nuclear bomb, but a new, classified CIA study says that North Korea has probably already built one or two atomic weapons. Meanwhile, China said it would not support sanctions against North Korea.

No Welcome for Zhirinovsky

Russian ultranationalist Vladimir Zhirinovsky was given 24 hours to leave Bulgaria after he called for President Zhelyu Zhelev's resignation. Zhirinovsky, whose far-right Liberal Democratic Party was the top vote getter in Russian parliamentary elections last month, was also denied a visa by Germany.

I.R.A. Sends a Grim Message

A 22-year-old British soldier was killed by an I.R.A. gunman in the town of Crossmaglen on the border between Northern Ireland and the Irish Republic. The killing was the first by the I.R.A. since Ireland and Britain signed the Downing Street Declaration, which outlines a step-by-step peace plan for Northern Ireland. One element of the plan is that the I.R.A. must forswear violence for three months in order to be included in negotiations.

Hundreds Flee Sarajevo

A long-delayed convoy of 15 buses accompanied by a U.N. escort carried 700 people to safety from the besieged Bosnian capital of Sarajevo. The evacuation effort had been planned for months but was thwarted by fighting and bureaucratic tangles. Most of the refugees were Muslims, who went on to Split, Croatia; the remaining 100 were Serbs, who went to Yugoslavia.

Russian Kidnappers

After a dramatic five-day pursuit, Russian security forces captured four masked gunmen who kidnapped 11 students, a teacher and a bus driver from their school at Rostov-on-Don. The kidnappers, who collected from the Russian government a ransom of $10 million in U.S. currency, forced two military pilots to fly them in a helicopter to the Caucasus Mountains. Using a massive, special forces-style operation to track the kidnappers, authorities captured all four of them and recovered most of the ransom.

December Deluge in Europe

Sleet, snow and torrential rain along a front traversing northwestern Europe dumped too much water for the land and the rivers to handle. The result was flooding over thousands of acres that left 100,000 people without fuel and electricity. In several cities the water reached levels not seen since the 18th century.

BUSINESS

Strong Economy

The economy continues to quicken. The real estate market continued to surge in November as existing single-family homes sold at an annual rate of 4.21 million, breaking a record set in 1978, and new ones sold at an annual rate of 807,000 -- the highest level in more than seven years. The government's index of leading indicators also rose 0.5% in November, the fourth consecutive monthly increase. And the Conference Board business-research group said its consumer-confidence index jumped more than 8 points, to 80.2, in December.

Chip Wars

A new trade brawl over computer chips erupted between the U.S. and Japan as Washington called for "emergency consultations" with Tokyo following the release of figures showing yet another drop in the share of Japan's semiconductor market held by foreign companies. For the first three quarters of 1993, the foreigners' share has fallen and has been stuck below a benchmark 20% share negotiated by the two governments. The Administration wants to fight for the U.S. computer-chip industry, but it does not want trade friction to topple Japan's fragile reform coalition government.

SCIENCE

Dinosaur-Bird Connection

The theory that birds are the closest living relatives of dinosaurs has received more confirmation from some baby maiasaur bones found in Montana. As reported in Science, the evidence comes in the form of fossilized growth plates -- disks of cartilage found at the ends of bones -- which act as a sort of scaffolding around which new bone can grow. The plates are found in mammals, reptiles and birds -- but the structure of the dinosaur plates was clearly birdlike.

Nessie Is a Sturgeon

Loch Ness contains at most 30 tons of fish, nowhere near enough to support the presumably voracious appetite of the legendary Loch Ness monster, according to a comprehensive study of Loch Ness to be published in an upcoming issue of the Scottish Naturalist. The most likely explanation for the spate of sightings of the beast that began in 1868, says the study, is the presence in the lake of a school of sturgeon. Sturgeon can weigh up to 500 lbs.; their long snouts might be mistaken for monstrous necks, and their dorsal fins could appear to be humps.

THE ARTS AND MEDIA

Haydn Sonatas Faked?

Only last month the discovery in Germany of six keyboard sonatas attributed to Franz Joseph Haydn was hailed as one of the greatest musicological finds in decades by one of its authenticators. But last week a consensus among experts began to emerge: the works may simply be fakes, although well-composed ones.

New Super Bowl Record

Advertisers will pay a record $900,000 for a 30-second spot during NBC's broadcast of the Super Bowl later this month.