The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this Thursday, the Supreme Court ruled drunk driving checkpoints are legal and thousands of pro-government workers helped put down protests in Romania. We'll have the details in our News Summary in a moment. Judy Woodruff is in New York tonight. Judy.

MS. WOODRUFF: After the News Summary we turn to the violence in Romania that the government is calling a fascist coup attempt [FOCUS - ROMANIA - SECOND REVOLUTION?], next the latest split [FOCUS -BIG CHILL] between two longtime allies over finding peace in the MidEast, then a high stakes sprint for profits between two corporate giants [FOCUS - PROFIT PLAY], and we close with some thoughts [ESSAY - BETTER WITH AGE] about one athlete's winning ways despite Father Time. NEWS SUMMARY

MR. LEHRER: The Supreme Court today approved road blocks to check for drunk driver. Today's case came from Michigan. Courts there had said such checkpoints were a violation of individual liberty. The Supreme Court overruled them in a 6 to 3 vote. Chief Justice Rehnquist writing for the majority said the privacy intrusion is slight compared to the magnitude of the drunk driving problem. About 25,000 people are killed in this country each year in drunk driving accidents. The court also ruled on a Medicaid case. In a 5 to 4 decision, the Justices said if hospitals and nursing homes are not satisfied with their Medicaidreimbursements, they can sue in federal court. Judy.

MS. WOODRUFF: In economic news, wholesale prices rose .3 percent in May. Energy prices declined for the fourth straight month, while food prices rose. The Labor Department estimated wholesale inflation at an annual rate of 4 percent for the first five months of 1990, down slightly from last year. Treasury Sec. Nicholas Brady said today the Resolution Trust Corporation could run out of money by the end of the year. The RTC is the agency responsible for bailing out the nation's failed savings & loans. Brady recommended that Congress provide an open ended spending authorization for the RTC rather than a specific amount which may prove inadequate. Brady made his remarks this morning on Capitol Hill.

NICHOLAS BRADY, Secretary of Treasury: There appear to be two basic choices, either provide a specified amount to cover some or all remaining losses or provide the RTC such sums as are necessary to complete the job. This is not a discretionary activity. The government's deposit guarantees must be fulfilled. Congress can choose to provide resources to the RTC in increments, but that means having to face the prospect of returning at relatively short intervals as markets change and along with them, the estimates change.

MS. WOODRUFF: Trade Rep. Carla Hills announced today that the United States will not impose economic sanctions against India, despite that country's unfair trade practices. Hills said the barriers are an unreasonable burden on commerce, but she said retaliation was inappropriate while free trade talks were underway. India was one of three nations cited last year by the U.S. government for the most offensive trade restrictions.

MR. LEHRER: The oil slick from the damaged super tanker in the Texas Gulf got worse today. It is now 30 miles long and is located some 30 miles from Galveston, Texas. The cause was a hole in the ship's center tank. Workers continued to deploy skimmers and booms to protect the shore. Also, a low level fire continued to burn in the ship's engine room, but a Coast Guard official said there was little risk more oil would be released into the water.

MS. WOODRUFF: Jury selection continued today in the drug and perjury trial of Washington, D.C. Mayor Marion Barry. Yesterday Barry announced he would not seek a fourth term as mayor. The U.S. Attorney who is prosecuting the case would not comment on Barry's decision, but in the past, he has said the mayor's political plans would not affect the trial. Also in Washington today, Pres. Bush marked Flag Day with an early morning visit to the Vietnam War Memorial. He watched as one American flag was lowered and replaced with another, which he brought from the White House. Presidential Spokesman Marlin Fitzwater said there was no connection between today's ceremony and Mr. Bush's support for a constitutional amendment to protect the flag.

MR. LEHRER: There was more violence today in Romania. Thousands of pro-government miners rampaged through Bucharest to put down anti-government protests. They beat up demonstrators and raided opposition party offices. They were responding to a call for help from the country's president who said the protesters were fascists trying to overthrow the government. In Washington, White House Spokesman Fitzwater called the fighting "government-inspired vigilante violence". He said a decision on economic aid to Romania would now be postponed. We'll have more on this story right after the News Summary.

MS. WOODRUFF: White House Chief of Staff John Sununu is going off to help another president. The White House confirmed today that Sununu has accepted an invitation to visit Moscow to help organize Soviet Pres. Gorbachev's executive office. No date has been set for the trip.

MR. LEHRER: Israel today rejected criticism from Sec. of State Baker. Yesterday Baker said Israel had blocked the peace process by toughening its stand on peace talks with the Palestinians. Prime Minister Shamir's spokesman today denied Israel's position had become tougher. He said the United States should give the new Shamir government a grace period before criticizing it. We'll have more on this story after the News Summary. The Colombian government got one of its most wanted last night. Police killed Jean Jiro Arias Tascon, the reputed No. 5 man of the Medellin Drug Cartel who was in charge of the cartel's terrorist operations. He was shot while resisting arrest in an exclusive suburb of Medellin. In Medellin today a car bomb exploded in a busy shopping area. At least two people were killed; more than forty injured. Drug traffickers were suspected.

MS. WOODRUFF: That's it for the News Summary. Just ahead on the Newshour, bloodshed in Romania, a war of words over peace in the Middle East, a corporate foot race for profits on the playing courts, and a natural called Nolan Ryan. FOCUS - ROMANIA - SECOND REVOLUTION?

MR. LEHRER: The violence in Romania is our lead story tonight. Romania was the only Eastern European nation to suffer bloodshed in its revolution last year and now it is happening again on the streets of the capital, Bucharest. We begin with a report narrated by Roderick Pratt of Worldwide Television News.

MR. PRATT: University Square, the scene of yesterday's street battles between police and students, was in control of a dangerous new army of occupation today. During the night, more than 10,000 miners left their homes and villages several hundred miles West of the capital and poured into Bucharest. Their presence throughout the city this morning a direct response to the president's call for support to protect what he called Romania's new democracy, Pres. Iliescu addressing the men from the balcony of the foreign ministry. The miners, who'd seen their salaries almost double under the new government, proved willing allies. Students were plucked at random from the crowd as the two sides faced each other in the square. As police and army units stood by, student demonstrators were badly beaten as they were dragged aboard police vans, pictures that were not shown on Romanian State Television. This woman appealing for help was ignored by police as miners led her away. Today's violence followed a night of sporadic clashes between students and troops that left 5 dead and nearly 300 injured. Unofficial sources put the casualty toll much higher, organized resistance among students in evidence, but it was the arrival of the miners that succeeded in driving them off the streets. Today government forces consolidated their grip on key installations following widespread attacks on government offices yesterday. There was a particularly heavy presence outside the television station which had played such a key role in the December revolution.

MR. LEHRER: Now two views of the Bucharest violence. Dorin Tudoran is a writer and Editor and Chief of the Romanian UnderGround Political Journal. He fled Romania in 1985 after spending two years under house arrest for his opposition political activity. Daniel Nelson is an Analyst of European Affairs at the Carnegie Endowment for International Peace in Washington. He is the Author of Romanian Politics during the Ceausescu era. Both recently traveled to Romania where they met with the Country's President Ron Iliescu. Mr. Nelson who are these people who are protesting and what are they upset about?

MR. NELSON: The are the intelligencia in Bucharest and other larger cities. Not only students. They involve a wider group of the population. They are upset of course because their candidates lost in the election of May 20th. They are also upset because they feel Ron Ileiscu and those around him are a continuation of the Communist past of Romania. They argue, they feel that the election was fraudulent. This is a protest of frustration of what happened on Many 20th and what happened the preceding months after Ceausescu was over thrown.

MR. LEHRER: Mr. Tudoran the President said that they are a part of a fascist attempt to over throw the government. Does that makes sense to you.

MR. TUDORAN: Yes it makes sense as long as the Government is communist because if you want to know something about a bunch of people you have to look at their rethoric. What Ceausescu said about Iliescu and his friends. They were fascists.

MR. LEHRER: That is what Ceausescu said about Ilescue. Now Iliescu is now saying the same thing about these other people.

MR. TUDORAN: Yes who wasn't a fascist starting with Hitler down to Joseph Bosky. Havel is a fascist for the Czechoslovakian secret police. So I don?t buy this.

MR. NELSON: Let me just add that I think that it was a mistake on Iliescu's part to make that label. I think that he probably will regret that.

MR. LEHRER: Why ?ill he regret it?

MR. NELSON: Because it is heightening the tension to attribute those kind of motives to the people. Obviously some of the people protesting against Iliescu and against this Government that was elected on May 20th there are some people on the far right. I have no doubt about that but to label them Universally as fascist I think was a mistake on his part.

MR. LEHRER: Mr. Tudoran How do explain the viciousness of the violence. The initial thing from the Army and the police and now bringing in the minors today. Why is everybody so violent about this?

MR. TUDORAN: During the revolution in December only thing that brought together the Romanians was the hate against Ceausescu. Now it is very clear what we called the Romanian Revolution meant two things. Two different things. A coup made by Iliescu and others and the genuine uprising on the street. It is very clear for me from the very beginning that sooner or later the interests of the coup members and the rights of the people on the street will get in collision. So what we are witnessing right now is a deep rooted war between these kinds of interests.

MR. LEHRER: Excuse me. These two groups got together they were united only by their hate for Ceausescu and now the group on the street feels the revolution was stolen in a way by Iliescu and his folks?

MR. TUDORAN: Yes they realize they were used as usual by the people who engineered this kind of event. Secondly we have to take into account that violence was monopolized by the state for 40 years in Romania. People couldn't have any natural, normal outlet to express themselves. Right now every body is disappointed for one reason or another and is trying to take any kind of possible revenge.

MR. LEHRER: Revenge against who?

MR. TUDORAN: They feel betrayed. They do believe the revolution was kidnapped which is more or less the truth and finally they believe it is too much to see this revolution stolen more and more.

MR. LEHRER: Mr. Nelson, what are the, is there any way to tell at this point who has the majority support, who are the masses of Romania really supporting, Iliescu or the protesters on the street?

DANIEL NELSON, East Europe Analyst: Well, I think you have to say that there was indeed an election on May 20th. There are many many claims about it being fraudulent and so on and so forth, however, even if we allow for some fraud in that vote, that vote was overwhelmingly for Jan Iliescu, there's no question about that. The majority, workers, peasants, clearly supported Iliescu. We can question their motives. Perhaps they didn't know enough, but then we're questioning the basic elements of a democracy, a free vote in that sense. Iliescu won the election. He has a majority support in the population, however, that support can wane rapidly, that is to say if he continues to use phrases like fascist and so on, if he is unable to perform well in terms of turning the economy around, that support will wane rapidly, and indeed, some of the actions, by turning the miners loose for example, that may well undercut that majority support.

MR. LEHRER: How would you explain that? First of all, why would he appeal to the miners and why would the miners do that, come in there and start beating up that like that?

MR. NELSON: Well, the latter is probably easier to explain than the former. The miners don't like the urban intelligentsia. I think there is a vast difference between them in terms of outlook, suspicion, and so on, so going back years, I think that distance was there and antagonism was there. Why they would do it then, they have that root, that basic antagonism, and in addition, Iliescu is somebody who would guarantee their well being, and he made those promises. Why would Iliescu turn them loose? I think that's another issue and more difficult to discern. To use the army, he would have had to rely on the army to not in a sense take power in the course of rescuing the regime. To use the militsia, the police, the regular police, I think would have been perhaps dangerous too, because the question would have arisen might some of these police have been killed and to what extent would that have shown weakness of the regime right there. The miners could be mobilized. They've served him well previously and I think he relied on them in this case.

MR. LEHRER: Mr. Tudoran where is all this leading, is there any way to forecast a scenario of some kind?

DORIN TUDORAN, Journalist: It's very difficult. It could lead to everywhere. As long as we don't know if all these individuals presented to us as miners are really miners and they are not, all of them, and as long as the two groups involved in the coup de tas in December are still fighting each other, coming publicly with very important details about the underground engineered so-called revolution in December, this kind of violence could lead everywhere.

MR. LEHRER: And then what kind of end result, I mean, do the people on the streets have the power to overthrow Iliescu?

MR. TUDORAN: They do have it, but as the so-called fascists are unarmed, the so-called democratic Iliescu has everything, tanks, miners, policemen and everything, so it is not upon the power of the people on the streets. It's just what will happen with the Gorbachev alternative in Moscow.

MR. LEHRER: Explain that.

MR. TUDORAN: As long as Gorbachev is not considered ousted alternative for Russia probably Iliescu will have a future. If tomorrow we'll see Gorbachev ousted, probably sooner or later Iliescu will have to leave the city.

MR. LEHRER: How do you see the picture?

MR. NELSON: If I may say so, we need to recall there was an election. That election by international observers, the actual vote, was seen to be by and large more fair than not, not the prior electoral campaign but the vote itself. There are a lot of people in Romania who don't want Iliescu ousted. Now that can change. As I said a moment ago, he can lose his support. But can the people overthrow Iliescu? Yes, if enough of them favor his ouster, and clearly, the army as it did in December will see its best interests as being on the side of the majority of the people, if you will, so Iliescu can be ousted, but as of right now, no, I don't think he will be.

MR. LEHRER: The facts don't bear that out?

MR. NELSON: Not only does he have force available to him, but he also does have, whether we may like it or not, a legitimating element, namely that electoral process. We would have to say that that whole process was fraudulent, the entire process was fraudulent, and be able to back it up before we could say that he ought to be ousted, and I think that he continues to have a substantial amount of support in the population among workers and peasants, not the urban intelligentsia.

MR. LEHRER: But in the meantime, or at least in the immediate meantime, more brutality, more death?

MR. TUDORAN: Yes, of course, and the point is not the very elections who are fraudulent. The fraud was made before the elections when the National Salvation Front presented itself as a cream of the cream of the revolution, so as the Cerbians say, so the people didn't have any choice, and in the same time, the opposition was terribly weak. The political spectrum was so atomized that there wasn't way for any other political group to win the elections, so I do respect the result of the elections because on the very day of the elections I would say the frauds were minimal.

MR. LEHRER: All right. Yes, very quickly.

MR. NELSON: Just a quick, final comment. Yes, I think there will be more violence. That's one of the horrendous legacies of Nicolai Ceausescu, the total inability of the society to move smoothly towards the transition to democracy.

MR. LEHRER: That's the way they've been living for 40 years and that's what they're used to.

MR. NELSON: That's an unfortunate truth.

MR. LEHRER: All right, gentlemen, thank you very much.

MR. NELSON: Thank you.

MR. TUDORAN: Thank you.

MS. WOODRUFF: Still ahead on the Newshour, a break between friends over peace in the MidEast, two companies' full court press to profits, and a Texas tornado called the Ryan Express. FOCUS - BIG CHILL

MS. WOODRUFF: We turn next to the Middle East and the future of the faltering Israeli-Palestinian dialogue. Sec. of State James Baker helped put the question back on the front burner yesterday during his testimony before a Congressional committee. He criticized the Palestinians and he took a sharp jab at the new conservative government in Israel. Here's an excerpt.

JAMES BAKER, Secretary of State: [Yesterday] When I appeared before this committee last February, we were very very close, Mr. Broomfield, to putting together an historic, first time ever dialogue between Israelis and Palestinians. As we all know, the political crisis in Israel intervened, preventing the government of Israel from making a decision on whether or not to continue this process. Now the intervening period has been marred, as you've pointed out in your question, by a real deterioration of the situation in the region. We've seen a cycle of escalating violence in the occupied territories, a PLOfaction has now attempted a very serious act of terrorism, raising serious questions in our minds and in the minds of many about the PLO's renunciation of terrorism, an Arab summit has taken place, which really has not fostered moderation.

REP. MEL LEVINE, [D] California: I'm interested in knowing whether the President is receptive, in light of various misunderstandings that have occurred in the past between the President and the prime minister, to developing some form of a process by which those two individuals might be able to clarify whatever misunderstandings they've had, improve their personal relationship, and therefore, hopefully improve the atmosphere so we can move along the I think very constructive lines that you've outlined today.

SEC. BAKER: Now with respect to whether or not we're willing to let bygones be bygones, you bet we are, and we've said as much and so has the President of the United States, because it is important for the reasons we've discussed here this morning that there be a peace process in the Middle East, more important perhaps to Israel than to anybody but that's going to mean a good faith engagement without delay, or otherwise we can't be effective, and it's got to mean a commitment on the part of the parties that they really want peace. And I have to tell you that before I came to this hearing this morning, I was given a copy of some wire reports, one of which quotes one of the ministers in the newly formed government as their saying -- someone asking, why couldn't you move forward on the proposal that the United States made for a dialogue with Palestinians in the territories, and he said, that question is no longer relevant, he said. I think this may have been the press spokesman for the government. It was somebody. And then the wires are full of reports this morning that there will be no dialogue unless the people with whom we sit down accept this and this and this in advance as the position, unless Palestinians accept these positions as positions they will take during the course of the dialogue. Now if that's going to be the approach and that's going to be the attitude, there won't be any dialogue and there won't be any peace, and the United States of America can't make it happen, you can't, I can't, the President can't, and so it's going to take some really good faith, affirmative effort on the part of our good friends in Israel, and if we don't get it and if we can't get it quickly, I have to tell you, Mr. Levine, that everybody over there should know that the telephone number is 1- 202-456-1414; when you're serious about peace, call us.

MS. WOODRUFF: We take up the growing tension between the U.S. and Israel now with Moshe Arad, the Israeli Ambassador to the U.S., and with Nicholas Veliotes, who served as U.S. Ambassador to Egypt from 1983 to 1986 and before that, was Assistant Sec. of State for the Middle East. He is currently president of the American Association of Publishers. Mr. Ambassador, did anyone from the Israeli government call the White House or call Sec. Baker today?

MOSHE ARAD, Ambassador, Israel: Well the embassy is in daily touch with the White House and with the State Department, and I think there was no need really to remind us both about the numbers of other contacts. I think there should be no doubt that the Israeli government is committed, deeply committed, in good faith, to the continuation of the peace process, and there should be no doubt whatsoever that this issue is on the top of the agenda of the newly established Israeli government.

MS. WOODRUFF: But, Mr. Ambassador, you heard Sec. Baker say yesterday that just before he had gone over to testify before the committee that he had been handed some reports quoting the new ministers in your government under Prime Minister Shamir as saying that the U.S. proposal was irrelevant and setting forth what he described as new conditions that the Palestinians had to accept before there could be any further progress.

AMB. ARAD: Let me clarify that there are no new conditions posed or suggested by the Israeli government in order to advance the peace process. We are committed to the peace initiative, to the Camp David Agreement, and to the peace initiative which was proposed and initiated by the former Israeli government and this new government is committed to pursue the process and is interested to find the partners necessary in order to advance the process.

MS. WOODRUFF: Why do you think the Secretary made the statement that he did when he did?

AMB. ARAD: Well, I don't think it's for me here to interpret the Secretary's statements or motives. I'm sure he or his spokesman can do it much better. I can only reiterate to you the fact that the Israeli government is newly established, has been established only last Monday. It didn't even meet for the first time, the whole cabinet together, and I think that we are entitled to a few days, if not to say a few weeks, to put together our thoughts. This is the new government. Indeed, it's the same prime minister, and I don't doubt that he sees himself committed to the peace initiative, but he has a new team and he has to be given the period of grace, a few days, to put our suggestions together. But let me say that communications between the Sec. of State and the new foreign minister occurred already in the last 48 hours. As far as I know, also our minister of defense called Sec. Cheney today, so I think there are contacts already being established.

MS. WOODRUFF: Since Mr. Baker's comments, is that what you're saying?

AMB. ARAD: My understanding is that the exchange of letters from Sec. Baker and Minister Levy have been initiated even before this.

MS. WOODRUFF: Mr. Levy being your new foreign minister.

AMB. ARAD: Our new foreign minister.

MS. WOODRUFF: Mr. Veliotes, in Washington, what in your view set off this outburst from Sec. Baker yesterday?

NICHOLAS VELIOTES, Former State Department Official: Well, I think it's quite obvious that Sec. Baker has invested quite a bit of time in seeking to push a proposal that originally was floated by the prime minister to seek to get elections in the occupied territories to move the peace process forward. This was 11 months ago now and I believe correctly he sees the Israeli government moving away from its own peace initiative. Now I certainly sympathize with the position my good friend, Moshe Arad, is in. But I believe what he is doing is making a very good presentation of a very bad case, and I won't ask him to comment on this. There is no doubt in my mind that the Israeli government, this new Israeli government, has moved backwards, and I think it is a crime. However, Judy, I don't think --

MS. WOODRUFF: Wait just a moment. What do you mean, it's moved backwards, what do you mean by that, backwards in what respect?

MR. VELIOTES: With respect to the possibility of encouraging the beginning of a real dialogue with the Palestinians, rather than just considering the peace process, or putting it at the top of an agenda. We can go on like this forever as the area slides irrevocably towards some very negative outcomes.

MS. WOODRUFF: Has your government moved backward, Mr. Ambassador?

AMB. ARAD: Not at all. I think that governments should be judged by their deeds, and, indeed, if it's such a young government as our government, also by its statements. If we look at the guidelines of the new Israeli government, it states very emphatically and clearly that we are committed to the peace initiative, that we are interested to advance it, and that we are interested in negotiating with the Palestinians and to find such Palestinians that are willing to engage themselves in the process of negotiation. That was an erroneous report yesterday suggesting that the prime minister has added or has suggested new conditions or new terms for the beginning of negotiations.

MS. WOODRUFF: But your foreign minister, Mr. Levy, did say that the U.S. plan was for all intents and purposes irrelevant, did he not?

AMB. ARAD: Well, I saw a different report. I don't know their voracity. I can tell you that I talked to the foreign minister late last night, it was almost midnight in Israel. I have no indications that there was any change and I know that we should be given the benefit of the doubt, which if people doubt our commitment, let's put it to the test.

MS. WOODRUFF: Mr. Veliotes, is that's what is really involved here, not giving Israel the benefit of the doubt?

MR. VELIOTES: No, I don't think so. I'd be delighted if in the next few days or next few weeks, all of a sudden the Israeli government took a different posture of good faith movement towards this dialogue. I think we have to recognize that most of the players have been around for quite a while, including the prime minister, including the defense minister, even the foreign minister, who I gather has opposed most of the previous efforts of Shamir governments towards engagement in the peace process. So I don't really think that this a group of new people on the block. Some of them are shuffled around. Again, let's all hope that in a relatively short period of time there are new and positive signals from Jerusalem.

MS. WOODRUFF: New and positive signals from Jerusalem.

AMB. ARAD: Well, I would say that we should look for positive signs from Jerusalem as the context of the overall development in the Middle East, and I would say that the signs from Jerusalem are that we are very concerned about what happened in the last few months during the government crisis in the Middle East. We did see a Baghdad summit which was very militant, very state war mood like. In developments a few weeks ago we have seen the State Department giving a clean bill of health to the PLO just for all of us to see two weeks ago, another attempt on the beaches of Tel Aviv to kill people, civilians, another terrorist attempt, and we see the administration still hesitant in reaching the inescapable conclusion that it has to bring to an end the dialogue with the PLO. So the Israeli new government has also to consider its security interest. It wants to look at the situation in general, not only to the peace process, because it is linked, the peace process has not only to deal with the Palestinians, but with other Arab countries, which are still refusing to recognize the right of Israel to exist, refusing to follow in the footsteps of Egypt, and to establish a peaceful relation with Israel.

MS. WOODRUFF: So, Mr. Veliotes, the ambassador is saying that there are new obstacles that have arisen that are real, legitimate problems for getting this peace process to move along.

MR. VELIOTES: And he's right, and the Sec. of State commented on this. I thought he spoke very frankly about the negative reactions from that Baghdad summit, which to the extent it played any role at all was to bolster the ego of Sadam Hussein, and on the PLO, the attempted terrorist action, that's obviously what it was. If Mohammad Malabask cannot be expelled because he's a convicted murderer, he should be expelled for monumental stupidity with respect to his recent actions. And so I'm not arguing and I don't believe the Sec. of State was seeking to whitewash the Arab side. Indeed, he clearly pointed out that there had to be also new attitudes from the Arabs in general with respect to encouraging the circumstances that would lead to peace, as well as the PLO taking its actions, certainly. But we are not the allies of Sadam Hussein, we don't have a close relationship with the PLO. We have a very close relationship with Israel, and I think the Sec. of State was talking in terms of our very close relationship and as a friend of Israel, what it is we look to from our friends, as friends, to move forward towards peace, because there's certainly no one whom I know whom I respect in the Middle East and in Israel who believes that Israel's security can be secured in any manner other than a broader peace.

MS. WOODRUFF: Mr. Ambassador, how serious an incident is this in the U.S. relationship with Israel?

AMB. ARAD: Well, I feel that the relationship between Israel and the United States is strong enough, is wise enough, and it's very deep, it can take minor crisis like this. I do not see it as a major crisis. I think that good will exists in Israel and I'm sure that if the way is found and the best way to address such differences of opinion is by maintaining close, diplomatic, secret contacts at the highest level, and I feel that the cause of peace would be much better served and the channels of communication between the two governments would be maintained in a discreet way and not by public accusation. And I feel that the effort --

MS. WOODRUFF: So you're saying what he said wasn't helpful, is what you're saying?

AMB. ARAD: I say in other words that it's not very helpful and I think that the security of Israel and the stability of the Middle East can be only served positively if the a perception that the United States and Israel are working together. The moment some Arab leaders like Sadam Hussein of Iraq or Asad of Syria would somehow get the impression that it's possible to draw a wedge between our two countries, I think then we are precipitating, we will be on a course towards escalation of warfare.

MS. WOODRUFF: Is that concern, Nick Veliotes?

MR. VELIOTES: A concern about the situation deteriorating towards warfare, of course.

MS. WOODRUFF: No, a concern, I think the point he was making was that this could be an opportunity for the hard-line Arab states to take advantage of a wedge between the United States and Israel.

MR. VELIOTES: Well, that of course, is always one of the items that we are faced with when there is a disagreement between Israel and the United States. Our Israeli friends say, well, this is only playing into the hands of the hard liners. But let me get back to what Sec. of State Baker said.

MS. WOODRUFF: Just quickly.

MR. VELIOTES: He said, let's work together. He wasn't saying, let's enlarge wedges.

MS. WOODRUFF: We're going to have to leave it there. We'll pick this one up again. We appreciate your both being with us, Mr. Ambassador here in New York, and Nicholas Veliotes in Washington, thank you both. FOCUS - PROFIT PLAY

MR. LEHRER: Now sneaker wars, sneakers as in shoes, wars as in battles in the marketplace. Kwame Holman reports.

MR. HOLMAN: In the 1960s film "The Absent-Minded Professor", Fred MacMurray discovered Flubber, a miracle product that did wonders for his college's basketball team. While sneaker companies have yet to discover the formula for Flubber, they have thrown themselves head long into the development of new technology. Reebok, which is No. 2 in sales, has a sneaker that uses something called the Energy Return System, or ERS. That sounded pretty sophisticated, so we asked Spencer White, director of research for Reebok, to explain it.

SPENCER WHITE, Reebok: The Energy Return System is a series of Hytrell tubes -- Hytrell is DuPont engineering polymer -- that we put inside our poly urethane foam mid-sole. So it's a very simple principle. It's the same as if you take a mat of some foam and drop a ball on it, the ball is going to bounce. It bounces because that energy that is absorbed by the foam is returned to the ball and pushes it back off the ground.

MR. HOLMAN: Reebok isn't developing technologies like ERS to advance the cause of science. They are locked in battle with Nike and other athletic shoe companies for the hearts and soles of the American sneaker buying public. Sneakers, they're now called athletic shoes, are big business and getting bigger all the time. Last year, Nike and Reebok each sold more than a billion dollars' worth of sneakers. Like Coke and Pepsi, the two companies not only dominate the business, but in large part have made it the growth industry it is today. Gary Jacobson studies the athletic shoe business for Kidder, Peabody.

GARY JACOBSON, Kidder, Peabody: Between the two of them, one or the other has been very hot over the last couple of years. Reebok came on very strongly in the mid '80s with its aerobic sneaker, then Nike fought back and regained the lead with its air line. And right now, it's a horse race. They're going to be neck and neck for the next couple of years.

MR. HOLMAN: Nike and Reebok take on each other in every arena, technology, marketing, and even on the basketball court. Last fall, Reebok scored a technological TKO when it brought out a new basketball shoe, the pump. Gone is the day when sneakers were made of canvas and rubber and retailed for 15 bucks. These shoes will set you back $170. The big selling point is that the wearer can pump the shoe up to custom fit his feet. Reebok's marketing director is John Morgan.

JOHN MORGAN, Reebok: I think the pump is going to create a terrific halo for the company. It is the high end product for the company. It definitely, you know, talks about technology. It speaks to the athletes. It really energizes the rest of your company. It energizes all lines, all price points, and right now, we see that at retail.

MR. CLARKE: I really find all of these other types of technologies lacking.

MR. HOLMAN: Nike's marketing director, Tom Clarke, not surprisingly, takes a less optimistic view of the pump.

TOM CLARKE, Nike: The main problem that we have with it is that it's misleading the consumer. It's telling them that they're getting some extra value from something that doesn't work and I think that's certainly not how we approach our athletic products.

MR. HOLMAN: Sour grapes says Reebok's Morgan.

MR. MORGAN: For one, Nike has a technology called air that they've had since 1977. It's the same technology that they've had for umpteen years. Again, I think that the technologies we have mean something, they work.

MR. HOLMAN: Nike admits its so-called air line products are not the newest things on the market, but they say they're the best.

MR. CLARKE: It's pressurized gas inside of a flexible membrane. I think that anybody once they see it understands that this is a great cushioning system. Tires use it in cars, the space shuttle comes down out of the sky and lands on tires filled with pressurized gas.

MR. HOLMAN: But it's not really the technologies, themselves, that sell sneakers, but the customer's perception of those technologies.

MR. JACOBSON: 85 percent of the people who buy sneakers never step onto the basketball court. They don't run, they don't weightlift. They don't use the sneaker for the purpose intended, so in that respect, I don't think the technology is very important. I think the technology is important when the technology becomes the fashion.

MR. HOLMAN: That brings us to our next point. How is it that sneakers now are perceived as fashion?

MR. JACOBSON: Through marketing, people realized they had to have branded sneakers. You go back ten or fifteen years, there was Keds and Converse, but it was no big deal. Now you have expensive sneakers that people have to own through marketing.

YOUNG BOY: I have about seven.

YOUNG GIRL: I have four or five.

MAN ON THE STREET: I have three pair. I have two running and one tennis.

GIRL ON THE STREET: I have three and they're all Nike. [TV COMMERCIAL]

MR. HOLMAN: If Reebok is the leader in developing new technologies, Nike's strong suit is advertising. Their ads leave a memorable impression with those who set the trend in sneaker fashions, teen-agers. [TV COMMERCIAL]

MR. HOLMAN: When we asked these runners why they bought Nikes, they cited Nike's commercials. And what's their favorite commercial?

YOUNG GIRLS: The one with Spike Lee. [TV COMMERCIAL]

MR. HOLMAN: While very effective, Nike's ads have recently come under fire for making basketball shoes into status symbols, especially in America's inner-cities, status symbols that young teens are willing to kill for. Recently in Philadelphia, a high school student was murdered for his new Nikes. But Nike's Tom Clarke says their ads are not to blame.

MR. CLARKE: I think in terms of what is going on on the street, it's definitely unfair to single out athletic footwear in any way, shape or form of having any sort of causal effect to problems that we have in society. Things are much more complex than that. If it was as simple as that, wouldn't it be nice? [TV COMMERCIAL]

MR. HOLMAN: While critics have attacked Nike's advertising as being too good, too persuasive, Reebok has managed so far to avoid that problem.

SPOKESMAN: Reebok has had its fair share of mishaps on the advertising front. I hope that'll settle down as we go forward, but it's interesting to note that they've done very well almost in spite of the advertising that they've come out with. The recent Bungi commercial, I thought Reebok did go a little too far with that commercial, but I think what's interesting about the Bungi commercial is it do side by side comparisons of two products. I think we're going to see a little bit more of that as we go forward. [TV COMMERCIAL]

MR. HOLMAN: But TV networks found the Bungi commercial offensive, so Reebok took it off the air. Now to revamp their image, Reebok has hired a new advertising firm. Besides advertising and technology, there is one other important battle field in the sneaker wars.

MR. MORGAN, Reebok: Over the years, the company that has the leadership role in the basketball category generally speaking has the leadership role in the entire industry.

MR. HOLMAN: At this year's National Collegiate Athletic Association's Final Four Basketball Tournament in Denver, both Nike and Reebok were out in force talking their wares to college coaches. Such promotions, as well as the endorsement of their products by athletes, are tried and true marketing techniques, but what is new is an idea advanced by this man, Sonny Vaccaro, who head's Nike's basketball promotion efforts.

SONNY VACCARO, Nike: What we did was get involved with colleges, college coaches, to be represented with Nike, and it was never done the way we did it originally in the early '80s. No one ever had the audacity to go out and sign a coach to a contract, but we did, and again, contracts are law in America.

MR. HOLMAN: Vaccaro, in fact, signed 60 college coaches to Nike contracts, top coaches like John Thompson of Georgetown, Bobby Crimmons of Georgia Tech, and Jerry Tarkanian of the University of Nevada, Las Vegas. Nike pays its coaches as much as $200,000 a year to wear Nike products. They also give the schools free shoes for the players to wear. Alex Wolfe recently co-authored "Raw Recruits", a book that takes a hard look at college basketball. He says Sonny Vaccaro is just about the best there is at what he does.

ALEXANDER WOLFE, Author: He may be the most influential man in college basketball, given all the friendships he has. He's probably somebody who gets closer to the coaches and the players, and the players at a very early age before they hit college, than anybody else. We had youngsters tell us that they would not even consider going to a non-Nike school, that the look of Nike, the cache of Nike is so hot. Of course, we had coaches who are signed up with Converse and Reebok tell us that Nike is so dominant now that it is a recruiting disadvantage to be associated with any other sneaker manufacturer.

MR. HOLMAN: With some college coaches making more from their shoe contracts than from their schools, the question is raised, whom are they are really working for.

MR. VACCARO: If anybody asked the question whether the Nike money helped keep the man at that particular school, because a lot of these schools cannot afford a lot of these coaches and keep winning and have graduation and do the right thing by the university. The shoe money supplements their salary. It's a whole new industry.

MR. WOLFE: Given the rules as they now exist, he's doing nothing improper. He's only doing the promotions game that he knows and until somebody steps in and says, Sonny, stop, he's not going to stop. He will stop when someone says it, but he's waiting for someone to say it.

MR. HOLMAN: Who can say stop? Not the NCCA, says its executive director, Dick Schultz.

DICK SCHULTZ, NCAA: We don't have the authority to do anything about it. All we can do is to try to provide some suggestions and directions, but sometime the membership may pass legislation that would say all revenue has to come directly from the institution and then of course it would become one of our problems to deal with.

MR. HOLMAN: University of Connecticut Coach Jim Calhoun has been a Nike coach for 10 years. He sees little problem with the current system.

JIM CALHOUN, Coach, University of Connecticut: Sonny has nothing to do with my recruiting, nothing to do with my basketball program, nothing to do with scheduling, nothing to do with any of that kind of thing. Nike has nothing to do with that. Nike is, once again, our relationship is a rather simple one. So I think it's a business relationship which the university benefits from, that I benefit from, and that certainly Nike benefits from, otherwise they wouldn't do it.

MR. HOLMAN: Reebok has only 22 college coaches under contract. For now, they've decided this is a game they can't win but must play anyway.

MR. MORGAN, Reebok: Unfortunately, in 1990, that is part of playing at this level and in this game. If you asked me would I like to have a situation where, you know, colleges buy all of their product and you don't have to pay coaches to get product, ideally, yeah, that would be perfect, go back to the old days.

MR. HOLMAN: In the 1990s, Nike and Reebok will no doubt continue their sneaker wars on all fronts, fighting to develop the latest technologies, to devise the most creative ads, and until someone says they can't, to sign up the winningest college coaches. ESSAY - BETTER WITH AGE

MS. WOODRUFF: Nolan Ryan is up last tonight. Essayist Roger Rosenblatt looks at this aging Texas right hander who still dazzles fans and defies batters.

MR. ROSENBLATT: The general assumption behind all the fuss about Nolan Ryan is the older you get, the worse you must be. That, of course, has never been true of Mr. Ryan. To give an idea who we're dealing with here, last year, at age 42, Nolan Ryan had over 300 strikeouts. That made him the second oldest pitcher ever to reach 300 strikeouts in a season. Up to that point, the oldest pitcher ever to hit the 300 number was 31 years old. That was Nolan Ryan too, 11 years earlier, the same Nolan Ryan, the same Nolan Ryan who has a career high combined no hit and one hit games, 18, the same Nolan Ryan who holds the major league record of 5,152 strikeouts, and the same Nolan Ryan who the other night at age 43 became the oldest player in history to pitch a no hit game. But return to the general assumption, the older you get, the worse you must be. Not only has that not been true of Nolan Ryan, it isn't true of a lot of people. Robert Frost wrote his most important poems late in life, so did Wallace Stevens. Shakespeare stirred up his Tempest when he was in his 40s, about Nolan Ryan's age, Tishan was in his 90s when he did his most memorable painting, Cezanne did his best work in old age, as did Verti. In his sunset years, Winston Churchill guided Britain through a war. In his sunset years, Gandhi guided India through a revolution. When Golda Meier was holding the nation of Israel together, no one called her "kid". Even in sports, older means better, surprisingly often. Jack Niclaus at age 46 won the masters. Kareem Abdul-Jabar made it to the NBA finals when he was a ripe old 42. At 41, George Foreman continues to keep boxing and winning. Willy Shoemaker won the Kentucky Derby at age 54. Actually, the horse, Ferdinand, won the race at age three. It was at the ridiculously old age of thirty- four or thirty-five that Nolan Ryan learned to throw a curve ball, which as an addition to his repertoire has allowed him to be unhittable for another five or six years. It was lucky that Mr. Ryan developed a curve. His fast ball this year is clocked at a snail's pace, ninety-three or ninety-four miles per hour. So where does it come from, this idea that age necessarily brings a diminution of one's powers? From the young, of course, the same young people who probably told George Burns that his show biz career was over the hill and Ronald Reagan that he was too old to be president and the Ayatollah that he was too far gone to be the Ayatollah. The young have an intense personal interest in promoting the myth that old is feeble. As long as the old folks keep hanging on and on and on, there will be no room for the young at the top. Pity the poor young pitchers on the Texas Rangers, Nolan Ryan's team. If Mr. Ryan keeps at it, one of those pitchers will never make it into the starting rotation. But the young hitters in baseball have a much more practical reason for trying to convince Nolan Ryan that he's really too old to be playing with boys. Specifically, their reason has to do with the sight of a grimacing, mature looking fellow who stands atop a mound of earth and peers at them as if he's seen them all before; in fact, he has. Since 1968, Mr. Ryan has seen these young players strike out on fast balls and strike out on curves. He's seen them strike out on high ones and on ones down the pike. He's seen them strike out from the left side of the plate and from the right side of the plate. And as his career sixth no hitter against the A's recently proved, Mr. Ryan is going to continue to see young people strike out and grow old as the sun sinks in the West. I'm Roger Rosenblatt. RECAP

MS. WOODRUFF: Once again, Thursday's main stories, the Supreme Court ruled that police can set up sobriety checkpoints to fight drunk driving, and thousands of club wielding workers helped crush anti-government protests in Romania. Good night, Jim.

MR. LEHRER: Good night, Judy. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.