THE WEEK

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

NATION

OUT WITH A BANG

Ending its term with the usual flurry of opinions, the U.S. Supreme Court announced some of its most important decisions of the year. The most immediately controversial: a ruling in a Georgia case that declared racial gerrymandering unconstitutional under the 1965 Voting Rights Act-a decision that is certain to alter the country's political landscape. By a 5-to-4 vote the Justices ruled that legislative districts drawn with race as the "predominant" motivating factor should generally be struck down. Black officials, many of whom owe their first-time election to racially conscious redistricting, were stunned and outraged. President Clinton called the ruling a "setback."

THE OTHER DECISIONS

By a 5-to-4 vote, the court also decided that the University of Virginia violated free-speech guarantees when it refused to subsidize a student-run Christian magazine while subsidizing other student groups. And in a Fourth Amendment case, the court upheld by 6 to 3 a local school plan in Oregon that requires all student athletes to submit to random drug testing.

G.O.P. BUDGET PLAN PASSES

On party-line votes, both the House and Senate adopted the Republican seven-year balanced-budget plan that would slash spending by nearly $1 trillion and taxes by $245 billion. President Clinton warned that he would wield his veto power in the months ahead to refashion the spending and tax bills that will be required to implement the plan, which only sets budgetary outlines. In other budget matters, a $16.4 billion package of cuts in the current year's budget-originally vetoed by the President but since modified by Republicans to obtain his support-was stalled just before the July 4 recess by two Senate Democrats who said the cuts were still too drastic.

PACKWOOD GETS A BREAK

Amid a series of closed-door meetings with the Senate Ethics Committee, which is investigating allegations of impropriety against him that include sexual misconduct, Finance Committee chairman Bob Packwood got a rare bit of good news. The Justice Department said it would not prosecute him on a set of charges that accused him of having arranged for lobbyists to make job offers to his wife in exchange for official favors.

HUBBELL SENTENCED

Former Associate Attorney General Webster Hubbell, one of President Clinton's closest friends and the highest-ranking official to have been toppled by the Whitewater investigation, was sentenced to 21 months in prison. He had pleaded guilty last December to mail-fraud and tax-evasion charges for having bilked his former law firm and clients by submitting inflated expenses and fees.

SOME PRANK

Air travel and mail deliveries throughout California were disrupted when the nation's most notorious and elusive mail bomber, known as the Unabomber, threatened in a letter he sent the San Francisco Chronicle to blow up an unspecified airliner at Los Angeles International Airport. Officials maintained tight airline and postal security despite a second letter from the Unabomber to the New York Times boasting that the threat was a hoax -- in his words, "one last prank." In yet a third communication at week's end, the bomber said he would desist from further killing attempts if the Times or Washington Post agreed to publish his anti-industrial, antitechnology manifesto.

THE NEXT MILITIA CAUSE?

In a hotly disputed episode, Michael Hill, an Ohio militia member, was shot and killed by a local police officer outside Frazeysburg. Hill had been pulled over late at night for driving a car with a homemade license plate bearing the word militia. Authorities said he pulled a gun on the officer, but militia witnesses said Hill was unarmed and executed in cold blood.

THE SIMPSON TRIAL

The prosecution in the O.J. Simpson murder trial turned from dna analysis to hair-and-fiber evidence in an attempt to establish more links between Simpson and the killings. An fbi expert testified that hair fragments consistent with Simpson's hair were on the dark cap found at the crime scene and on victim Ronald Goldman's shirt.

WORLD

MUBARAK EVADES ASSASSINS

Egyptian President Hosni Mubarak emerged unscathed after gunmen fired on his limousine in Addis Ababa, Ethiopia, where he was attending an African summit meeting. Two Ethiopian policemen and two gunmen were killed, and Ethiopian security forces reportedly killed three more alleged suspects in a subsequent raid. "I was cool all the time," said Mubarak once he was back on Egyptian soil. He blamed the leaders of neighboring Sudan for orchestrating the ambush but ruled out a retaliatory attack; the Sudanese denied any involvement.

EGYPT, SUDAN EXCHANGE FIRE

Just one day after the attack, Egyptian and Sudanese forces traded gunfire in a border dispute nearly a century old; three soldiers from each side were wounded.

"ENDLESS DISASTER"

A bright pink, five-story department store in a Seoul suburb collapsed, killing more than 100 people and injuring an additional 900. "Endless disaster, disaster, disaster," said a Korean newspaper, recalling the two deadly gas explosions and one fatal bridge collapse the country has suffered within the past year; all four catastrophes are blamed on shoddy construction.

TARGET: SARAJEVO TV

Bosnian Serbs fired rockets at Sarajevo's television center and an apartment building in retaliation for the Bosnian army's recent offensive. The attack accounted for five of the more than a dozen people killed in the Bosnian capital last week. The German Parliament, meanwhile, voted to order 1,000 troops and eight fighter jets to fly cover for the British-French rapid-reaction force, a deployment that could lead to Germany's first combat mission since World War II.

QATARI COUP: SON OUSTS SHEIK

The Emir of Qatar, while staying at a luxury hotel in Switzerland, was ousted by his son in a bloodless coup. The Crown Prince, Hamad Bin Khalifa al-Thani, had been running the day-to-day affairs of the oil-rich, Connecticut-size Persian Gulf state for the past three years.

MAJOR CHALLENGER

A member of John Major's Cabinet, John Redwood, announced that he would fight the British Prime Minister for leadership of the Conservative Party. Redwood, Secretary of State for Wales and a right-winger, is nicknamed "the Vulcan" for his cerebral manner.

U.N. ENTHUSIASTS

Taiwan offered the financially strapped United Nations 0.44% of the country's gross national product -- a figure that would come to $1 billion -- if the U.N. would reinstate its membership, lost in 1971 when the People's Republic of China gained a seat. business

CRUISIN'

The U.S. and Japan reached a belated -- and arguably lightweight -- automotive trade agreement on Wednesday, mere hours before U.S. sanctions were to have been imposed on Japanese luxury-car imports. According to the pact, Japanese auto manufacturers will increase production in North America and purchase more U.S. car parts; Japan's government will also encourage dealers to sell more American cars while easing regulations on the repair aftermarket to spur purchases of low-cost U.S. repair parts. U.S. officials valued total parts purchases as potentially worth $12.75 billion, but Japan took care to explain that the figures were American estimates and nonbinding.

HMO MONEY

The trend toward managed health care hastened when United Healthcare Corp., the nation's largest publicly traded hmo company, acquired the more traditional MetraHealth Cos. for more than $1.6 billion. The new organization, with annual revenues of $8 billion and more than 14 million members, will become America's largest provider of health-care plans.

THE ARTS & MEDIA

THE EARL OF POP?

Michael Jackson's new double album will debut at No. 1 on the Billboard charts next week, but sales aren't quite as thrilling as expected. HIStory: Past, Present and Future-Book 1 sold 391,000 copies in seven days to rank as only the 10th best chart debut in history. The total fell far short of the double-album mark set by Guns N' Roses, whose simultaneous releases in 1991 each moved more than 675,000 units.

--By Kathleen Adams, Nick Catoggio, Lina Lofaro, Michael Quinn, Jeffery C. Rubin, Alain L. Sanders and Sidney Urquhart