THE WEEK

By KATHLEEN ADAMS, MELISSA AUGUST, NICK CATOGGIO, LINA LOFARO, MICHAEL QUINN, ALAIN L. SANDERS, ANASTASIA TOUFEXIS AND SIDNEY URQUHART

NATION

IT HURTS MORE IN CALIFORNIA

With Congress out of town for the July 4 recess, President Clinton used the political quiet time to seek a way to avoid a potential electoral problem: the closing of McClellan Air Force Base, located in voter-rich California. An independent commission has recommended the money-saving shutdown, one of many scheduled military-base closings around the U.S. As White House aides and Pentagon officials searched for a more politically palatable alternative, sources reported progress toward a possible deal: work done at the base might be privatized, thus allowing the military to erase McClellan from its books but giving California workers a chance to hold on to many--though not all--of the 11,000 jobs.

GOOD MORNING, VIETNAM

President Clinton was said to be poised to recognize Vietnam and establish full diplomatic relations with the former U.S. enemy. The President's senior policy advisers--convinced that normalization would be good for diplomacy, for business and for prompting a full accounting of American soldiers still missing in action--have recommended that the step be taken very soon. At the same time, Hanoi said it would let an ailing Vietnamese human-rights activist and his wife join relatives in the U.S.

"THE PEOPLE REST"

After 92 days of testimony, 58 witnesses and more than 400 exhibits, prosecutors in the O.J. Simpson murder trial ended their not always tidy case with testimony from fbi expert Douglas Deedrick on hair and fiber evidence, which the prosecution maintains links Simpson to the murders of his ex-wife and her friend. Current--repeat, current--estimates of the length of the defense case: four to six weeks.

SINCERELY YOURS...

The increasingly bizarre--and epistolary--Unabomber case took another odd turn when Tom Tyler, a University of California, Berkeley, social psychology professor, wrote an open letter to the serial bomber in the pages of the San Francisco Chronicle. Tyler was responding to a letter he had received from the Unabomber that came with a copy of the terrorist's as yet unpublished 35,000-word anti-technology manifesto. The correspondence followed remarks that the professor made about the case to the press. The gist of Tyler's message to the Unabomber: your manifesto raises some valid points, but none that justify blowing people up.

WORLD

JOHN MAJOR WINS--FOR NOW

British Prime Minister John Major quelled a rebellion within his ranks, winning reelection as Conservative Party leader by a vote of 218 to 89 over challenger John Redwood. Major wasted no time in reshuffling his Cabinet to reward loyalists from the center and the left of his party. At issue: Britain's future role in the European Union, which Conservative "Euro-skeptics'' fear will diminish their country's independence. Analysts say the real winner in the leadership contest was the Labour Party--now enjoying a nearly 30-point lead in polls and gaining strength for the general election, which must take place by spring 1997.

MORE BLOOD IN BELFAST

One of Major's more solid achievements as Prime Minister--the I.R.A. cease-fire in Northern Ireland--looked a bit shaky when riots broke out in Belfast and other areas. The violence erupted after the early release of a British soldier convicted two years ago of murdering a Roman Catholic teenage girl, who was joyriding in a stolen car that crashed through an army checkpoint.

A CONFESSION FROM IRAQ

After four years of adamant denials, the Iraqi government admitted to producing "large quantities" of biological weapons in 1989-90. Meeting with U.N. inspectors in Baghdad, Iraqi officials said their government had manufactured two forms of deadly bacteria that could cause outbreaks of botulism and anthrax infections. They also said they destroyed the stockpiles just before the Gulf War to prevent contamination of the countryside during enemy bombing raids.

COLLAPSING CARTEL

Colombia's ongoing crackdown has put more of the country's drug lords behind bars. Josa Santacruz Londono, the billionaire co-founder of the Cali cartel, was arrested while enjoying steak in a Bogota restaurant. Known as "Don Chepe" (Sir Joe), Santacruz set up networks among coca-paste producers in Peru and Bolivia, cocaine labs in Colombia, and the streets of New York City. Phanor Arizabaleta Arzayuz, another alleged senior cartel member, also surrendered, leaving only two of the bosses at large.

BUSINESS

SPECIAL INTEREST

Fearing recession, the Federal Reserve reduced short-term interest rates for the first time since 1992. Chairman Alan Greenspan said the federal funds rate, which banks charge one another for overnight loans, would drop from 6% to 5.75%. Several banks responded by trimming prime lending rates to 8.75%. Recession worries eased on Friday when the Labor Department reported that unemployment dropped from 5.7% to 5.6% in June.

FILMING THE SEQUEL

The Clinton Administration faced more trade trouble with Japan, announcing it would investigate charges by the Eastman Kodak Co. that rival Fuji Photo Film conspired with Japan's government to deny Kodak fair access to the Japanese market for more than 20 years. Fuji noted that it owns roughly the same share of its domestic market, 70%, as Kodak enjoys in the U.S.

SCIENCE

MISSION COMPLETED

Eight astronauts and cosmonauts who took part in the first American-Russian space linkup in 20 years returned safely to Earth aboard the U.S. shuttle Atlantis. Dr. Norman Thagard now holds the record for the longest space flight for an American, having spent almost four months on the Russian orbiting station Mir.

THE ARTS & MEDIA

THE SONG REMAINS THE SAME

Ticketmaster was cleared of monopoly charges when the Justice Department announced that it would close its antitrust investigation of the agency. Attorney General Janet Reno said the emergence of new competitors in the ticket-selling industry prompted the decision. Pearl Jam, the rock group whose complaints of high ticket markups spurred the investigation 13 months ago, called the move a "cave-in."

A BAD WEEK FOR DEADHEADS

More than 100 Grateful Dead fans were hurt, five critically, when a covered wooden deck at a campground near the site of a St. Louis-area concert collapsed, apparently under the weight of hundreds of youths seeking shelter from rain. Earlier, two fans were found dead at the campground, possibly from drug-related causes. And a concert near Indianapolis was canceled after a crowd of unruly fans without tickets had to be quelled by riot police. --By Kathleen Adams, Melissa August, Nick Catoggio, Lina Lofaro, Michael Quinn, Alain L. Sanders, Anastasia Toufexis and Sidney Urquhart