The Week November 27-December 3

By Kathleen Adams, Tamala M. Edwards, Christine Gorman, Lina Lofaro, Lawrence Mondi, Michael Quinn and Jeffery C. Rubin

NATION

Tidings of Comfort and Jobs

The U.S. economy delivered an outpouring of good cheer as the Christmas shopping season got into full swing. The economy created a whopping 350,000 new jobs in November, far exceeding the forecast of economists and dropping the unemployment rate .2%, to a four-year low of 5.6%. The new jobs helped boost the Conference Board's index of consumer confidence in November to its highest level in four years; the personal income of Americans grew a healthy 1.4%. Measures of consumer spending and manufacturing strength also surged. About the only dissonant note was the likelihood that all the good news will cause the Federal Reserve, which has already jacked up interest rates six times this year, to raise them again by early 1995 in order to slow the economy and keep inflation in check.

GATT Passes

Both the House and Senate voted -- with large bipartisan majorities -- to enact historically wide-ranging changes to the 124-nation General Agreement on Tariffs and Trade, or GATT. Among other things, the new measure lowers tariffs by a third, removes trade quotas and, for the first time, protects intellectual property.

America's Newest Minority

Winter's coming took on a symbolic chill for congressional Democrats as they eulogized 40 years of majority rule during a last lame-duck session, convened for GATT. Preparations for the bleak unknown began with Democratic House leadership elections. Representative Richard Gephardt of Missouri briefly climbed out of his hospital bed to secure the nod as minority leader before returning for a gallbladder operation; he will be joined by newly elected minority whip David Bonior of Michigan and California's Vic Fazio, now the House Democratic caucus chairman. In the Senate, Tom Daschle of South Dakota was voted in as minority leader over Connecticut's Christopher Dodd. On the other side of the aisle, veteran Senate Republican whip Alan Simpson of | Wyoming was edged out by Mississippi's Trent Lott for the party's No. 2 leadership spot, while Kansan Bob Dole was unsurprisingly elected majority leader.

Whitewater Springs Anew

Former Associate Attorney General Webster Hubbell has tentatively agreed to plead guilty to counts of mail fraud and tax evasion, the first charges brought by Kenneth Starr, the Whitewater independent counsel. Hubbell, a longtime friend of President and Mrs. Clinton's, is a former law partner of the First Lady's. Sources close to Hubbell's family told Time that it was "cheaper and easier" to settle. Hubbell had already spent $1 million to defend himself against an investigation so exhaustive that even the bank account of his 22-year-old son was examined -- all the way back to the sixth grade. Curiously, despite Starr's involvement, the charges relate to Whitewater only tangentially. Said a source close to the Clintons: "They ((stem from)) Mr. Hubbell's billing procedures as an attorney in private practice before he came to Washington."

A Gift for the Pentagon

President Clinton announced that he will seek a $25 billion increase in military spending over the next six years -- a step many saw as a postelection effort to neutralize Republicans on the issue, though Administration officials claimed the move was long in the works. G.O.P. members of Congress welcomed the plan but said it still does not come close enough to their "Contract with America" key proposal to increase military spending by $60 billion.

Embryo Research Banned

Continuing the policies of his Republican predecessors, President Clinton banned the use of federal money to fund research on human embryos. The move came hours after a scientific advisory panel endorsed proposed guidelines that would have allowed scientists to create human embryos for study as long as they were destroyed within two weeks. The ban does not affect research on fetal tissue that has been discarded during an abortion.

She's a Minor? Who Knew?

By a 7-to-2 vote, the Supreme Court decided to uphold a federal law against child pornography, throwing out a lower court's argument that the law impinges upon the First Amendment. But the high court also ruled that under the law defendants must have been aware that the material in question depicted minors -- a caveat that could undermine the law and make it harder for prosecutors to convict.

WORLD

Serbs Snub Boutros-Ghali

As fighting in Bosnia raged on, Bosnian Serb leader Radovan Karadzic snubbed the world's top diplomat, Boutros Boutros-Ghali, refusing to meet with the U.N. Secretary-General at the Sarajevo airport. Boutros-Ghali later said if the Bosnian Serbs and Muslims fail to cooperate with the U.N. protection force, the organization may find it necessary to evacuate its peacekeepers.

U.S. Shift on Bosnia

Amid a flurry of sometimes conflicting statements from sundry officials, the White House announced a major change in its Bosnia policy that brings the U.S. into line with its NATO allies. The Administration will abandon its strategy of threatening the use of military force in order to bring the Bosnian Serbs to the bargaining table. "Our only hope," said White House chief of staff Leon Panetta, "is that at some point the parties recognize there's no use continuing the kind of carnage that's going on there at the present time."

Norway Says No to Europe

Norwegians declined an invitation to join the European Union, with 52.2% of voters opposing E.U. membership and 47.8% supporting it. With its rich fisheries and large North Sea oil and gas deposits, Norway saw no advantage in joining the 12-member trading bloc, due to expand to 15 on Jan. 1 with the admission of Austria, Finland and Sweden. It was not the first time the country had spurned a proposal from Europe: in 1972 Norwegians passed up the opportunity to join what was then the European Economic Community.

Donors Give Arafat Aid

A group of 22 countries and three international aid organizations agreed to accelerate delivery of funds to Yasser Arafat and his Gaza-based Palestinian Authority. Donors agreed to provide $125 million through next March to cover Arafat's budget deficit, plus $23 million to create jobs. Meanwhile, Israel transferred the responsibilities for taxation and health services in the West Bank to the Palestinian Authority in preparation for wider self-rule there.

Arab Axes Israeli Soldier

An ax-wielding Palestinian killed a female Israeli soldier in the northern Israeli town of Afula, where a suicide bomber killed eight Israelis in April. Wahib Abu Alrub struck 19-year-old Liat Gabai in the head several times as she waited at the town's bus station. Abu Alrub said he committed the crime on behalf of the militant Islamic group Hamas to rehabilitate himself after being accused of collaborating with Israel.

BUSINESS

Dream Team's First Deal

Capital Cities/ABC, Inc., announced a joint venture with Steven Spielberg, Jeffrey Katzenberg and David Geffen, the powerful Hollywood figures who recently formed their own entertainment conglomerate. The new company, in a deal indicative of the changing relationships between networks and studios, entered a seven-year contract to produce programming for networks, cable services, syndication and other media; ABC, in turn, will invest $100 million in the TV studio, giving it a 50% share in both financing and profits.

Space-Age Venture

The Boeing Co. and the McDonnell Douglas Corp. announced that they will jointly compete for a National Aeronautics and Space Administration contract to build a space vehicle for the future: a reusable launch vehicle that would probably replace the shuttle. The new rocket is expected to cut costs. It will operate somewhat like a jetliner, thereby eliminating numerous ground crews and some of the facilities needed in current shuttle launches.

SCIENCE

A Gene for Fat

Scientists at the Rockefeller University in New York City announced they have discovered a gene that, when defective, triggers obesity in mice. The gene apparently works by helping the body regulate appetite and metabolism. Already the team has found a similar gene in humans. Experts hope the finding could someday lead to better medical treatments for obesity, although they caution that any practical applications will take at least a decade to develop.