World Notes SOVIET UNION

For three years the hulking eight-story structure in Moscow has stood empty, the ultimate example of a property grown too hot to handle. Work on the new U.S. embassy was halted when American inspectors discovered it was riddled with supersophisticated Soviet eavesdropping devices, implanted during construction. Last week, following lengthy studies by private engineering firms, Ronald Reagan recommended that the $22 million structure be razed. Said the President: "We have to do it. We have no choice."

The Administration will also recommend that the next Congress authorize funds for a second new embassy on the same downtown Moscow site. This time, to ensure a bug-free building, State Department officials plan to prefabricate most of it in the U.S., ship it to Moscow in pieces and have it assembled by imported American workers with security clearance. Estimated cost: $400 million. Ever optimistic, the Administration hopes to cut that total by dunning the Soviets for $29 million in damages for shoddy workmanship and delays on the initial project.

Meanwhile, the Soviets, who in 1985 finished construction of their new embassy in Washington, will not be allowed to use it during the demolition and rebuilding of the U.S. facility. That is expected to take at least five years. Reflecting Moscow's exasperation at the delay, the Soviet news agency TASS called the Administration's bugging claims "groundless" and "farfetched."