NATION

Rocky the Flying Fight Fan

In a shocking and bizarre upset in Las Vegas, challenger Evander Holyfield took back the heavyweight boxing crown in a decision over previously undefeated champ Riddick Bowe. The fight was interrupted for 20 minutes during the seventh round when a parachutist came down into the outdoor ring at Caesars Palace. He landed on the ropes, bounced into the $800 ringside seats, was pummeled by irate spectators and wound up in the hospital in fair condition. Bowe's pregnant wife Judy fainted and had to be taken away, but her husband, for understandable reasons, was not told. Holyfield became the third fighter (after Floyd Patterson and Muhammad Ali) to regain the title from the man he lost it to--and the first to do so after an unscheduled intermission.

Republicans Win

If last week is any harbinger, 1994 will be good to Republicans. In the New Jersey gubernatorial race, Christine Todd Whitman ousted Democrat James Florio, while New York City Mayor David Dinkins lost to Liberal-Republican Rudolph Giuliani. A Republican also won the Virginia statehouse, with George Allen scoring a victory over Mary Sue Terry. Top Democrats including President Clinton tried to downplay the significance of the results, attributing them to the vagaries of local politics.

Whither NAFTA?

White House officials attempted to ensure that the unease caused by the Democrats' Election Day losses did not hurt the North American Free Trade Agreement. Pollster Stan Greenberg was sent to Capitol Hill to convince Democrats that supporting NAFTA would not displease voters. In the meantime, Vice President Al Gore surprisingly challenged Ross Perot, NAFTA's fiercest opponent, to a debate over its merits, and Perot, unsurprisingly, accepted.

The Packwood Saga

In a 94-to-6 vote, Senators supported the ethics committee's effort to subpoena 8,400 pages of diaries as part of a sexual-misconduct investigation of Bob Packwood, the Oregon Republican. The five-term Senator refused to hand over the diaries, however, and the battle will now move into the federal courts. Democrat Robert Byrd of West Virginia savaged Packwood in a speech on the Senate floor and called on him to resign.

Not So Bad After All

The Clinton Administration revised its revised number for how many Americans will pay more for health insurance. The figure was dropped from 40% of Americans to 30%. As explained to Congress by Budget Director Leon Panetta, the first figure counted only what people would pay in increased insurance premiums but didn't consider out-of-pocket costs such as co-payments, which are likely to decrease under the Clinton plan.

Ammo Control

Senator Daniel Patrick Moynihan of New York called for huge tax increases, ranging from 11% to 50%, on handgun bullets, to deter their use. He wants to tack his proposal onto the President's health-care bill, saying he cannot imagine the Senate Finance Committee, of which he is chairman, approving a health-reform bill without such a provision.

More Fire in California

Fed by the hot Santa Ana winds, flames engulfed the hills of Malibu last week, killing three people and destroying 323 homes. Fire officials suspect the blaze was set by arsonists. Many movie stars have homes in Malibu, but only Sean Penn's and Ali McGraw's suffered appreciable damage.

Smart Kids, Dumb Schools

Public schools are not doing enough to encourage gifted students, says a new report released by the U.S. Department of Education. They lag behind the gifted of other countries because they often go unchallenged in the classroom, where more attention is paid to slow or average students. The U.S. is "squandering one of its most precious resources," the report says.

Dr. Death in the Slammer

Dr. Jack Kevorkian, the Michigan physician who was present when 19 grievously ill people killed themselves, went to jail for the first time. He began a hunger strike and vowed to continue it while behind bars.

WORLD

More Yeltsin Maneuvers

Backpedaling on a pledge, Boris Yeltsin told a group of Russian newspaper editors that he opposed holding early presidential elections in June 1994. A senior Yeltsin aide, Sergei Filatov, argued that the promise was void because it had been made under duress during a showdown with hard-liners. Earlier in the week Yeltsin rewarded the Russian army for its support by, among other things, removing a limit on the number of its troops.

Somalia Talks

Seeking to create momentum in negotiations in Mogadishu, U.S. special envoy Robert Oakley declared himself "moderately encouraged" after meeting with various Somali clans and factions, despite one outstanding stumbling block: the U.N. warrant for General Mohammed Farrah Aidid's arrest, which the warlord says must be rescinded before he sits down at the table.

Middle East Machinations

P.L.O. delegates temporarily broke off talks with Israel, complaining that an Israeli offer of troop redeployment in the Gaza Strip, under the parties' peace agreement, was inadequate. Israeli Foreign Minister Shimon Peres broadly hinted that there would be another breakthrough in the region, as reports circulated that he had met secretly with Jordan's King Hussein.

Jerusalem Mayor's Defeat

Mayor Teddy Kollek, Jerusalem's legendary political icon and the city's reasonable face to the world for 28 years, was defeated for re-election by Ehud Olmert, a hard-line opponent of Israel's latest peace initiatives.

Skinhead Attack

German politicians apologized for an incident at a nightclub in the eastern town of Oberhof, in which a group of young skinheads taunted a black U.S. athlete and pummeled a white teammate who came to his defense.

The Korean Bomb

The head of the International Atomic Energy Agency informed the U.N. General Assembly that North Korea is continuing to obstruct the agency's inspections of nuclear sites in the country. Nevertheless, Japan and South Korea told the U.S that for fear of a military confrontation, they still want to delay punishing North Korea with sanctions.

De Benedetti Arrested

In connection with the Italian corruption scandal, which has already tainted more than 3,000 members of the country's political and business elite, tycoon Carlo De Benedetti, chairman and chief executive officer of Olivetti SpA, was briefly detained on charges that he authorized kickbacks.

The Bosnians Win One

In one of their rare victories, Bosnian government troops captured the town of Vares, 20 miles north of Sarajevo, from Croatian forces, sending 15,000 Croatian refugees fleeing into the countryside.

BUSINESS

All Good News for Once

Worker productivity rose at a 3.9% annual rate from July to September, rebounding from declines in the previous two quarters, according to the Labor Department. In addition, spurred by low mortgage rates, new-home sales jumped almost 21% in September, the biggest increase since the boom year of 1986. For the month, the index of leading economic indicators rose five-tenths of one percent.

Yet Another Would-Be Network

A week after Paramount Communications revealed its intention to launch a fifth broadcast TV network, Warner Bros. announced plans of its own to start a new network, called WB. The expert consensus is that only one, at most, can succeed.

U.S. Autos Top Japanese

A month into the new-model year, cars produced by America's Big Three automakers are far outselling autos made in Japan. The main reason is the expensive Japanese yen.

SCIENCE

Next: Biotech Cookies

The Food and Drug Administration has approved a controversial synthetic cow hormone that increases milk production in dairy herds as much as 15%. Although milk from cows treated with genetically engineered bovine growth hormone is indistinguishable from milk from any other cows, critics had demanded that it be labeled a biotech food product. The FDA disagreed.

Asteroid Protection

Some scientists say the earth's only hope if a huge asteroid were hurtling earthward would be to smash it away with a nuclear bomb. Now two researchers--an American and a Russian--have put forward a gentler solution. Writing in the journal Nature, they describe a solar-sail device that would act as a giant orbiting mirror, focusing sunlight on the asteroid and vaporizing just enough of its icy surface to nudge it safely off course.

Beyond Buckyballs

Ever since the 1985 discovery of carbon fullerenes--those microscopic "buckyballs" named for Buckminster Fuller, inventor of the geodesic dome--scientists have been on the lookout for other substances that can form the same remarkable soccer-ball shape. Now two scientists from Iowa State University and Ames Laboratory report in Science that they have stumbled upon just such a beast: an indium-based compound that is not only spherical but also layered like an onion.

THE ARTS & MEDIA

Matisse, Picasso Top Auction

A 1951 Matisse cutout, The Wine Press, up for auction at Sotheby's in New York City, sold for $13.7 million, almost $4 million above its estimated price. The following night, 88 works by Picasso were put on the auction block, and every one of them was sold, some at many times the expected price, for a total sale of $32 million.

Muslims Support Rushdie

Defying a climate of intimidation in which editors and translators of Salman Rushdie's The Satanic Verses have been attacked and killed, 100 Islamic authors have come to Rushdie's defense. They have each written an essay or poem--and in one case a short piece of music--that is sympathetic to the author, and they have contributed the works to a collection called For Rushdie. Among the contributors is the Nobel-prizewinning Egyptian novelist Naguib Mahfouz.

-- By Philip Elmer-DeWitt, Christopher John Farley, Michael Quinn, Alain L. Sanders, Sophfronia Scott Gregory, Sidney Urquhart

The Child Killers

By HELEN GIBSON, in Preston, England

The small, hushed crowd outside Preston Crown Court watched as the two white police vans drove away. "It's hard to believe they did it," remarked James Livesey, 69. "It could have been a prank that went wrong," said Colette Smalley, mother of an eight-month-old, "but maybe we want to believe that--it's too horrific to think otherwise." The vans' two occupants, 11-year-old boys with tidy haircuts, had just left the ornate, oak-paneled Court 1, where the floor of the dock had been raised a foot to allow them to see over the brass rail. The boys are charged with abducting and brutally murdering two-year-old James Bulger last February in Liverpool, and with the attempted abduction of another toddler the same day. The ghastliness of the case and the youth of the defendants shocked the nation and particularly Liverpool, where mobs demonstrated against the boys. For the sake of fairness, the trial was moved 20 miles north to Preston (about 220 miles northwest of London).

Last week as the trial began, the prosecution in Regina v. A and B (Two Children)--no other identification is allowed--told of how Denise Bulger, 25, was buying meat at the butcher in a mall when she looked down to find that her high-spirited James had vanished from her side. Only a few minutes later, as she frantically searched for him, James was walking off with two boys, his hand trustingly in theirs. The scene, captured in a hazy film on mall security cameras, was shown in court to the nine men and three women on the jury. The prosecution claims that in an interview Boy B quoted Boy A as having said at the time, "Let's get him lost outside, so when he goes into the road he'll get knocked over." According to at least 27 witnesses, the two schoolboy truants dragged the now distraught child along 2 1/2 miles of streets to a railway siding. In the intervening two hours, five passersby stopped the threesome but were persuaded that the littlest boy was lost and being taken to the police station or was being looked after in some way.

Once by the railway line, James was kicked, stoned and beaten on the head with bricks and a metal rod until he died. The child's half-unclothed body was then placed across the freight track, said the prosecutor, where it was found two days later, cut in half. "James is only a small child," was the description his mother gave the police the day of his disappearance. "He has brown-blond hair, straight, which is ready for cutting...he has a full set of baby teeth." But it was already too late.

Both boys deny the charges, although the prosecution has described how one confessed to the killing when he was arrested a week after it took place. In private, the prosecutor says, the defendants have blamed each other for the murder, each changing his story as further evidence was put to him.

The defendants, sitting beside two social workers, listen with pale and expressionless faces. Both come from broken homes, with parents reported to have alcohol problems. While Boy B's parents have both been in court, sometimes crying as the grisly murder was described, neither A's mother nor his father has attended the trial. Boy A has kept his composure for the most part, but his companion has sobbed and clutched at the social worker beside him. James' father, Ralph Bulger, listens intently, occasionally closing his eyes.

HEALTH REPORT

THE GOOD NEWS

-- Scientists have identified the active ingredients in the kudzu vine's roots, which have been used by the Chinese for 1,300 years to treat alcohol abuse. The extract cut in half alcohol consumption in certain hamsters that prefer booze to water.

-- A fast, simple test has been developed to screen men for chlamydia, the most common sexually transmitted disease.

-- Researchers have arrested the most severe form of diabetes in mice, giving rise to hope that juvenile diabetes in humans may someday be prevented.

-- By genetically altering salmonella (the bacteria that cause food poisoning), scientists have rendered female mice allergic to sperm. The technique could lead to a birth-control "vaccine" for humans.

THE BAD NEWS

-- Forty million American adults often find themselves in a bad mood--bored, restless, lonely, upset or depressed--according to a government survey. Smokers are particularly susceptible to foul humor, as are men who drink heavily.

-- The U.S. spends $7 billion a year on dialysis treatments, yet kidney-failure patients frequently either die before they stabilize or live in misery, a new report concludes. Patients do better when they are diagnosed early and have longer dialysis sessions.

-- Genetic screening has already cost some American workers their jobs and health insurance, says a panel of experts. Unless laws are passed to protect the confidentiality of DNA-test results, the problem will only get worse as scientists discover genetic links to more and more diseases.

Sources--GOOD: Proceedings of the National Academy of Sciences; Journal of the American Medical Association; Nature; Council for the Advancement of Science Writing.

BAD: National Center for Health Statistics; National Institutes of Health; National Academy of Sciences.

Made-for-TV Murder

CBS announced last week that Edward James Olmos would play the father in The Beverly Hills Murders, the TV-movie version of the Menendez murder case. Here is a speculative look at an entire ensemble, with actual excerpts from the only slightly overwrought descriptions of the roles producers have provided to agents.

Jose Menendez:...A driven, relentless perfectionist of a man who brooks no failure from himself, his subordinates or his sons...Sarcastic and condescending to his unhappy wife, on whom he regularly cheats...clearly a man with deep anger...

Kitty Menendez:...Deeply unhappy in her marriage, she is an alcoholic who periodically and desperately makes futile attempts to live up to her husband's standards. Aware that her marriage is a sham, she herself is the victim of Jose's cruelty...

Lyle Menendez:...A complicated, brilliant, arrogant boy, he has been seriously damaged by his impossible-to-please, unbearably domineering father...Cold, calculating, with a bitter, biting humor, Lyle both loathes and admires his father and feels nothing but contempt for his beaten-down mother...

Erik Menendez:...[A] softer, warmer human being [than Lyle], still capable of feeling pity and love for his mother, as well as being able to share a few lighthearted moments with his father, who makes his life generally miserable...

INSIDE WASHINGTON

Clinton Rethinking His Foreign Policy Team

TIME has learned that President Clinton is seriously considering firing one or more of his top national-security officials. There has been speculation about such a move, but until now no confirmation that Clinton is weighing it. He is well aware of the criticism of National Security Adviser Tony Lake (too weak), Secretary of State Warren Christopher (too diffident), Defense Secretary Les Aspin (too disorganized) and CIA Director Jim Woolsey (invisible). Names of replacements--often surprising--have been discussed in the White House.

WINNERS & LOSERS

WINNERS

BARBRA STREISAND

Signs $20 million deal to sing for two nights in Las Vegas

PETE MYERS

Perennial N.B.A. reject starts for Bulls in spot left by Michael Jordan

SENATOR PATTY MURRAY

Bold anti-Packwood speech makes her this week's Moseley-Braun

LOSERS

JAMES CARVILLE

Clinton's campaign star helps blow sure thing for Governor Florio

HALLMARK CARDS INC.

Bush links cost it the Clinton White House holiday-card business

SENATOR BOB PACKWOOD

A diary deadly as the Nixon tapes--and no 18-min. gap, either

INFORMED SOURCES

Arms Control in Somalia

Washington--U.N. forces are debating what to do about the huge arms caches maintained by all the major clan leaders in Gaalkacyo, a city more than 300 miles north of Mogadishu. In the wake of General Mohammed Farrah Aidid's facing down the U.N. and the U.S., other clan heads are feeling more courageous about holding onto their weaponry, and the U.N. is considering seizing the supplies by force. Included in the caches are armed personnel carriers, artillery pieces, mortars and the type of antitank weapons that have been effective in shooting down U.S. Blackhawk helicopters.

The Secret Negotiations to Lift Iraqi Sanctions

Cairo--Syrian President Hafez Assad has been refusing to negotiate the transfer of the Golan Heights from Israel to Syria until the U.N. lifts sanctions against Iraq. Saddam Hussein is Assad's sworn enemy, but Assad feels a growing isolation from his neighbors--Iran, Turkey and Iraq--and so is doing Iraq this favor. The Clinton Administration wants a Syrian-Israeli agreement on the Golan by the end of this year, and has initiated secret talks with Iraqi officials at the U.N. aimed at lifting the sanctions.

No President Solzhenitsyn

Washington--Although 48% of the respondents to a recent poll in St. Petersburg said they would like Aleksandr Solzhenitsyn to be President of Russia (only 18% picked Boris Yeltsin), the writer's wife Natalya has told TIME that he has no plans to enter politics. Despite the turmoil in Russia last month, the couple still plans to return in May after 17 years of exile in Vermont. "The decision has been made," Natalya says.

One of These Days, Radovan

Since spring, it seems, the Administration has threatened military action against the Serbs every other week. A catalong of such declarations suggests this impression is not far from wrong.

Date Threat Maker

April 23 PRESIDENT CLINTON

May 6 PRESIDENT CLINTON

May 22 SECRETARY OF STATE CHRISTOPHER

July 28 PRESIDENT CLINTON

Aug. 1 STATE DEPARTMENT SPOKESMAN

Sept. 2 PRESIDENT CLINTON

Sept. 5 SECRETARY OF STATE CHRISTOPHER

Oct. 18 SECRETARY OF STATE CHRISTOPHER

CONTRARY TO POPULAR OPINION

EVERYBODY KNOWS...

...That women's wages are two-thirds of men's wages, and the ratio is basically unchanging.

IN FACT...

...An analysis of Census Bureau data indicates that in Los Angeles County, the gap between women's and men's wages shrank significantly between 1980 and 1990 among workers under 65. Most surprising, women between the ages of 19 and 24 earned 4% more in 1990 than men of the same age did.