THE WEEK

By KATHLEEN ADAMS, LINA LOFARO, MICHAEL QUINN, JEFFERY C. RUBIN, ALAIN L. SANDERS AND SIDNEY URQUHART

NATION

Still Searching

While Oklahoma City bombing suspect Timothy McVeigh continued to cool his heels in a federal prison, refusing to talk to authorities, law-enforcement officials were growing frustrated in their nationwide manhunt for the elusive second suspect, John Doe No. 2. Federal agents raided a small Missouri motel to capture and question a pair of drifters whose travels before and after the bombing paralleled McVeigh's. But the two men were quickly released for lack of evidence, the parallel taste in small towns and cheap motels an apparent coincidence. In Oklahoma City rescuers ended their search for bodies and survivors. The final toll: 167 people dead, including 19 children.

Presidential Tough Talk

Continuing the campaign he began in the aftermath of the Oklahoma City tragedy to still what he has called voices of hatred and paranoia, President Clinton used a commencement speech at Michigan State University to address militia groups nationwide that advocate violence. "How dare you call yourselves patriots and heroes?" demanded the President. "There is no right to resort to violence when you don't get your way. There is no right to kill people . Those who claim such rights are wrong and un-American."

U.S. to Cubans: Stand in Line

Following secret negotiations with Cuba, the Clinton Administration announced the undoing of three decades of Cuban refugee policy. From now on, Cuban boat people will no longer be given special entry rights to the U.S., but will instead be returned to their homeland, where they will have to apply for admission to the U.S. through normal channels. As a humanitarian gesture, however (and in yet another policy reversal), most of the 21,000 refugees being detained at Guantanamo will be allowed to enter the U.S.

Medicare: You First

President Clinton and Republican leaders spent the week sniping over Medicare. Against a background of partisan budget wrangling, the President declined G.O.P. invitations to come up with a bipartisan solution to the program's ballooning costs. While the White House took the political cover of gravely insisting that Medicare remedies be linked to overall health-care reforms and a master G.O.P. budget plan, the President's strategists were not about to offer Republicans a hand with their balanced-budget/tax-cut promises by agreeing to deep slashes in Medicare.

It's Tougher in the Senate

Republicans learned that the second 100 days may be more difficult in the Senate. G.O.P. leaders failed to get enough votes to halt a de facto filibuster over a legal-reform bill that, like a version passed by the House, would cap punitive damages in all civil lawsuits. With the President calling the measure the "Drunk Drivers Protection Act of 1995" and threatening a veto, G.O.P. Senators regrouped to rework the bill.

Dr. Foster Comes Calling

Dr. Henry Foster, President Clinton's controversial nominee for Surgeon General, furthered his cause with a plainspoken appearance at his Senate confirmation hearing, during which he explained that his inconsistent recollections about the number of abortions he has performed over the years were nothing more than "an honest mistake." Foster still faces tough floor opposition from G.O.P. presidential hopefuls Bob Dole and Phil Gramm.

Whitewater Again

Neal Ainley, the former president of an Arkansas bank that handled Bill Clinton's 1990 gubernatorial campaign funds, pleaded guilty to two misdemeanors involving false documents and agreed to cooperate with the Whitewater independent counsel. Prosecutors want to know whether Ainley conspired in 1990 with key Clinton aide Bruce Lindsey, now deputy White House counsel, to evade federal cash-withdrawal reporting requirements.

Clinton Slams Door on Iran

Characterizing the country as a continuing threat to peace and a major sponsor of terrorism, President Clinton announced a ban on U.S. trade and investment with Iran, settling an internal Administration debate over how best to handle Iran's menace and forestall even stronger measures from Congress. Major U.S. allies showed no interest in joining the embargo.

Did She or Didn't She?

Federal prosecutors struck a deal with Qubilah Shabazz, the daughter of Malcolm X, whom they have accused of plotting to kill Nation of Islam leader Louis Farrakhan. Prosecutors agreed to drop charges in exchange for Shabazz's acceptance of "responsibility" for the plot and the equivalent of two years' probation. But once out of the courtroom, Shabazz denied having plotted anything, and her lawyers continued to insist that she was the victim of entrapment by a mercenary government informant.

The Simpson Trial

As yet another juror was excused and replaced with an alternate (there are now only five remaining), the prosecution began presenting the heart of its case against O.J. Simpson. Police chemist Gregory Matheson testified that preliminary tests showed blood found at the murder scene was consistent with Simpson's blood type and that blood found on socks at Simpson's estate correlated with that of his slain ex-wife. The introduction of more sophisticated dna tests is to follow.

Depleted Church Coffers

In what may prove to be the largest financial scandal ever to erupt in a mainstream U.S. church, the Episcopal Church accused Ellen Cooke, its former treasurer, of diverting $2.2 million and spending the money on personal items, including a home, a farm, travel and jewelry. Cooke, who is cooperating with church investigators, said her actions were the result of work pressures and a psychological "breakdown."

Killer Storm

Packing hailstones as big as softballs and winds of 70 m.p.h., a storm swept through northern Texas over the weekend, shattering car windows and damaging buildings. At least a dozen people were killed and more than 150 injured.

WORLD

Croats and Serbs Renew War

Fighting broke out in Croatia between the Croatian army and secessionist Serbs, breaking a "permanent cease-fire" signed by the two sides last year. The new round of violence began when the Croatian army, in an early-morning surprise attack, captured the Western Slavonia enclave in central Croatia, a small part of the 27% of Croatian territory held by Croatian Serbs. To complicate things further, Croatian army forces exchanged artillery fire late in the week with Bosnian Serbs across the border in northeastern Bosnia, killing three.

Gas Attack Thwarted

On Friday -- Children's Day in Japan -- employees at a Tokyo subway station extinguished two burning plastic bags of chemicals left in a men's room before their fumes could combine to form enough hydrogen cyanide to kill 10,000 people in seconds. No one has claimed responsibility for the attack. Meanwhile, Japanese police, continuing their investigation of the Aum Shinrikyo cult, arrested the group's top lawyer, Yoshinobu Aoyama, on charges of slander. As in other arrests, police have so far avoided charging that the cult was involved in the March 20 gassing on the Tokyo subway.

BUSINESS

Housecleaning at Barings

Twenty-one top executives of the bankrupted Barings P.L.C. were fired by the company's new owners. ING Group, a Dutch company, determined that the Barings employees were either directly or indirectly responsible for overseeing the derivatives debacle that broke the British bank in February. Meanwhile, German authorities received more than 1,000 pages of documents from Singapore, which is requesting former Barings trader Nicholas Leeson's extradition to face charges of forgery.

SPORT

N.B.A. Play-Offs: Humble Pie

For the second year in a row, the Seattle Supersonics wasted a stunningly successful season by collapsing in the first round of the N.B.A. play-offs. "It's time to face our embarrassment, be humbled, feel the humility of the sport and go and try to figure out some things," said a subdued coach George Karl after the team's final 114-110 loss to the Los Angeles Lakers.

Derby Day Surprise

Thunder Gulch, the dimmest star in trainer D. Wayne Lukas' trio of starters, thundered out of a wall of 18 horses to win the 121st running of the Kentucky Derby. --By Kathleen Adams, Lina Lofaro, Michael Quinn, Jeffery C. Rubin, Alain L. Sanders and Sidney Urquhart