The NewsHour with Jim Lehrer

MR. LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, more threats to peace in Northern Ireland, two reporters explain; gambling in America, Spencer Michels reports, Margaret Warner conducts a debate; and farewell to John Chancellor of NBC News, welcome to a new brand of NBC News. It all follows our summary of the news this Monday.NEWS SUMMARY

MR. LEHRER: Thousands attended the funeral today of an anti-British militant killed in the latest Northern Ireland violence. He was crushed by an army vehicle Saturday during street fighting. More than 230 people have been hurt in the past week of rioting. In London, police conducted an anti-terrorist raid at what they called a bomb factory. They said they had seized material for thirty-six bombs and arrested seven men. We'll have more on this story right after the News Summary. In Moscow today, Boris Yeltsin skipped a meeting with Vice President Gore and triggered new concerns about the Russian president's health. Instead, Gore met with Vice--with Prime Minister Viktor Chernomyrdin as part of their ongoing talks on bilateral economic issues. The Vice President said he was still expecting to meet Yeltsin tomorrow. Yeltsin's spokesman said there were no grounds for panicky assertions that Yeltsin was seriously ill. On Bosnia today, Serbia was accused of being in serious non-compliance with the Dayton Peace Accords. That charge was made by Richard Holbrooke, the former U.S. official who negotiated the peace agreement. He returns to Bosnia tonight at the request of the State Department to negotiate the removal from office of Bosnian Serb leaders Radovan Karadzic and Ratko Mladic. Both have been indicted as war criminals by the International War Crimes Tribunal. The U.S. official in charge of overseeing the September elections in Bosnia today postponed the official start of the political campaign. He said the campaign could not begin until Karadzic is out of political life. In Washington today, there was a congressional hearing about so-called sweat shop labor. At the center of the event was TV talk show host Kathie Lee Gifford. She had been criticized for promoting and profiting from a line of clothing manufactured by child laborers in Honduras. At the hearing, Gifford said she will work to make sure children are not exploited.

KATHIE LEE GIFFORD: Every one of us, from the entertainer, the sports figure, whomever, who lends their name to the consumer in the store who buys the product has an obligation to know how and why a garment was made. We are now morally compelled to ask, each of us, what can we do to protect labor rights in factories around the world and right here in America? Fortunately, there are those seeking to identify and penalize abusers. Walmart, which distributes my fashions, has prevented some 100 countries--I mean, factories--excuse me--in 16 different countries from working on their garments, our garments, because of violations that they've discovered.

MR. LEHRER: Legislation introduced last Friday in the House would prohibit importing products from countries using child labor and ban most U.S. aid to those countries. Administrator David Hinson said today the FAA wants new cargo security measures on airliners. He said the initiative would cost $14 million. Investigators have said a fire on the ValuJet passenger plane that crashed May 11th may have been ignited by oxygen generators improperly stored in the cargo hold. Hinson spoke at a Washington news conference.

DAVID HINSON, FAA Administrator: Not all air carriers want to carry hazardous material and, therefore, do not. Some want to because it's appropriate for their marketing niche and so forth. If they do, they have to have special training. When haz mat is shipped, the pilot has to be notified. He has to be given a list. It has to say where it is, what it is, and what particularly causes it to be hazardous material. It is a very, very well run program. It is circumstances like that that we apparently had in, in ValuJet's case that are causing us to reassess. Itis that last little perhaps tiny problem we want to deal with, and we're going to deal with it in this fashion. MNEIL

MR. LEHRER: Hinson said that new funding would increase the number of FAA hazardous materials inspectors from 22 to 150. NASA astronaut Shannon Lucid broke the United States in space record today. This was the 53 year old biochemist's 115th day aboard the Russian space station Mir where she's working with two cosmonauts. She will be there at least 70 more days before returning to Earth in September. The stock market took a sharp nose dive today. The Dow Jones Industrial Average lost 161 points to close at 5349.51. It was the Dow's fourth worst drop ever and was blamed on poor performance projections by technology companies. And that's it for the News Summary tonight. Now it's on to Northern Ireland, gambling in America, and farewell John Chancellor. FOCUS - THREATS TO PEACE

MR. LEHRER: We start tonight with the growing new problems in Northern Ireland. Elizabeth Farnsworth has the story.

MS. FARNSWORTH: Just seven months ago, President Clinton toured Northern Ireland and received an enthusiastic welcome from Catholics and Protestants alike. His visit and the friendly crowds symbolized the administration's role in bringing about a cease-fire there, but in the months since, the optimism in Ireland and Britain about the prospects for a Northern Ireland peace has been fading. We begin with a background report from Charles Krause.

CHARLES KRAUSE: The American-brokered cease-fire in Northern Ireland was abruptly shattered last February 9th when a powerful bomb exploded in London's financial district, leaving two dead and dozens wounded. The Irish Republican Army claimed responsibility, saying the bomb had been set in response to Britain's refusal to negotiate a comprehensive peace settlement for Northern Ireland in good faith. The bombing last February marked the end of nearly 18 months of peace in Northern Ireland. Still, despite the bombing in London and subsequent bombings elsewhere in Britain and in Germany, peace talks between the parties continued under the auspices of a peace commission headed by former U.S. Senator George Mitchell. There was little progress even before the violent events of the past week. The latest troubles began on July 9th when Protestant loyalists called Orange Men decided to hold an annual parade celebrating a Protestant victory over Catholics at the Battle of the Boyne in 1690. Initially, British authorities refused to allow the parade, a decision which touched off a wave of Protestant demonstrations and violence, including the sacking and burning of Catholic homes in Protestant neighborhoods. Faced with the prospect of continued Protestant unrest, a local police chief decided to reverse the initial decision, allowing the Protestants to proceed with their annual march, protected not only by the Royal Ulster Constabulary, Northern Ireland's overwhelmingly Protestant police force, but also by the British army. Protestants paraded through Catholic neighborhoods in a town called Portodaum last Friday. Frustration and anger among Catholics boiled over.

SPOKESMAN: Get back. Get back.

WOMAN: The world sat back and watched Hitler annihilate the Jews. They watched--annihilate his people. Are they going to sit back and watch the Catholics of Northern Ireland be ethnically cleansed and wiped off the face of Northern Ireland?

MR. KRAUSE: What followed was three nights of rioting by Catholics in Belfast, Londonderry, and elsewhere throughout Ulster. At least two Catholics died, one of them killed by a British armored car, while at least three policemen were reportedly injured. Belfast, which was just beginning to rebuild after a quarter century of violence, advertising itself to the world as a promising business and manufacturing center, suddenly took on its old appearance of a barricaded war zone. But the worst was yet to come on Saturday night when a bomb exploded at luxury hotel in Ineskilen, just after a wedding party was evacuated. It was the first such bombing in two years, and despite initial suspicions, the IRA denied it was responsible. In a scene so familiar after 25 years of violence, there was a funeral for one of the Catholic victims of last week's demonstrations. It was a scene which many Protestants and many Catholics had hoped just a few months ago would be a thing of the past.

MS. FARNSWORTH: We get two perspectives now. Tom Rhodes is a correspondent for the "Times of London." Ray O'Hanlon is a senior editor at the "Irish Echo" Newspaper in New York. He just returned MNEIL from a trip to the Irish Republic and North Ireland. Thank you both for being with us. Ray O'Hanlon, those pictures look so familiar from the past. Was the, the peace that preceded this week of violence an illusion?

RAY O'HANLON, Irish Echo: Well, I think a lot of people are saying now, well, it was something of an illusion. People are throwing their hands in the air in despair, saying what has the last two years been for, and what was the IRA cease-fire for, and where have the politicians been that they've let the peace process really rot in front of their faces, and now we have a situation in which even sober politicians and the Irish government are saying that the entire island of Ireland could be destabilized for an entire new generation.

MS. FARNSWORTH: So it seems worse even than some of the periods when things were pretty bad?

MR. O'HANLON: There are quotes in newspapers in Ireland over the weekend saying, oh, yes, as bad as 1969, no, in fact, like the 1920's all over again, so I think the mood is very black, indeed. What we've seen in the last week is a failure of politics, a failure of politicians to enforce the law impartially and fairly, the difference being this time is that it was in front of the eyes of the world.

MS. FARNSWORTH: What about that? Was the peace before--I mean, I know there were bomb explosions in Manchester and in London and in Germany, but in Ireland there had been basically many months of peace, was that just an illusion, and this is the real thing?

TOM RHODES, Times of London: I think it probably was an illusion. I think people expected those who'd been following along in place they expected that there was a problem. There's been growing concern about the situation over the months after the cease-fire was organized. I mean, I think the real problem is that at the end of the day we may now look at the loyalists and blame them for what's taken place there, but the background is that when the IRA and Sinn Fein were asked to come to peace talks, they didn't, and they claimed that the British government had in some way prevented them from doing so by calling on them to de-commission their weapons, and I think that's an explanation which everyone would understand for peace talks.

MS. FARNSWORTH: Okay. I want to get back to this in a minute, but Ray O'Hanlon, how do you explain the escalating violence? The Orange Men have marched before, apparently in that very place, right? Why this week did it get so bad?

MR. O'HANLON: Well