THE WEEK

By JANICE M. HOROWITZ, LINA LOFARO, MICHAEL QUINN, JEFFERY C. RUBIN, ALAIN L. SANDERS AND SIDNEY URQUHART

NATION

WELFARE REFORM PASSES

By an overwhelming vote of 87 to 12, the Senate approved the Republican-propelled plan to overhaul welfare--a sweeping about-face on 60 years of social policy. The bill eliminates federal guarantees of assistance to the needy and relies instead on capped block grants, mostly to be administered as each statehouse decides. President Clinton indicated he would sign the measure unless a House-Senate conference reinstates "extremist" provisions, such as banning aid to unwed teenage mothers, earlier adopted by the House. Dispirited liberal Democrats assailed the overhaul as a catastrophe for the nation's poor and criticized the President for not rejecting the plan.

HEALTH-CARE WARS

The House Commerce Committee passed a Republican proposal that drastically revamps Medicaid, the health-care program for the poor, following the general G.O.P. prescription for welfare: no more federally guaranteed benefits; instead, lump-sum grants to the states to spend as they see fit. Senate Republicans unveiled a similar plan. But the G.O.P.'s decision to hold short and swift hearings on the $182 billion cost-savings plan--as well as on the even more controversial G.O.P. Medicare overhaul--prompted a full-scale rebellion by Democrats, who held alternative "hearings" on the lawn of the Capitol. The party leadership vowed to use every stalling tactic at its disposal to prevent the plans from being rammed through.

THE RUBY RIDGE PROBE

Former FBI Deputy Director Larry Potts, who has been suspended along with four other officials pending a Justice Department investigation, testified before the Senate panel probing the FBI's 1992 fatal standoff with white separatist Randy Weaver's family. Contradicting previous testimony by the on-scene FBI commander, Potts insisted he never approved the agency's controversial shoot-on-sight rules of engagement.

AN EVEN GRANDER OLD PARTY

Multimillionaire publisher Malcolm S. Forbes Jr. threw his hat into the crowded 1996 G.O.P. presidential contest, running on a promise of lower taxes, economic growth and fewer regulations.

NEWS ON DEMAND

On the recommendation of Attorney General Janet Reno and the FBI, and after weighing the ethical questions for three months, the Washington Post published the full 35,000-word text of the Unabomber's manifesto urging revolution against the "industrial-technological system." The Post and the New York Times split the cost of the printing and said they acted "for public-safety reasons." The Unabomber had threatened to resume his murderous mail-bomb campaign unless one of the two papers published the treatise by week's end.

A DEADLY WRONG TURN

Even for hardened Angelenos, the news was ghastly. A wrong turn down a gang-infested dead-end alley, known as Avenue of the Assassins, cost the life of three-year-old Stephanie Kuhen. Gang members reportedly ambushed her family's car and opened fire. At week's end Los Angeles police had four suspects in custody.

SIMPSON: THE END IN SIGHT

After a year-long legal marathon, Judge Lance Ito finally delivered his instructions to the O.J. Simpson jury. The judge told the panel that it could decide the legal fate of the football hero with regard to each of the two victims, Nicole Brown Simpson and Ron Goldman, in three possible ways: guilty of first-degree murder, guilty of second-degree murder or not guilty. The second-degree-murder option was a blow to the defense. Simpson told the judge out of the jury's presence that though he "did not, could not and would not have committed the crime," he was waiving his right to testify. Closing arguments begin this week.

AN AWACS GOES DOWN

On a military training mission, an AWACS radar plane crashed during takeoff from Alaska's Elmendorf Air Force Base, killing all 24 people aboard. It was the first crash of an AWACS plane, and the Air Force launched an immediate investigation. There was speculation that a flock of geese was sucked into an engine, igniting a fire.

WORLD

SERBS RETREAT; BOMBING HALTS

Apparently fulfilling their pledge to remove certain categories of heavy weapons from a 12.5-mile exclusion zone around Sarajevo, the Bosnian Serbs won a reprieve from NATO bombing. U.N. monitors said nearly 250 mortars, artillery pieces and tanks were trucked away, loosening the Serb stranglehold on the Bosnian capital. However, the high-powered rifles of Serb snipers remained within deadly range. As he brought water to his wife and nine-month-old daughter, Hajrudin Jusufovic was murdered, making him the besieged city's 10,608th civilian casualty. And in the Bosnian town of Krasulje, the brutal past opened like a scream: a mass grave was unearthed revealing 540 bodies massacred in 1992.

WAR AND (HOPE FOR) PEACE

More than 100,000 Bosnian Serbs sought refuge in the Serb stronghold of Banja Luka in northern Bosnia, pushing ahead of Croat and Bosnian forces, who pledged not to move against the city. The Croatian army suffered heavy casualties and began pulling back after being bombed and strafed by Bosnian Serb aircraft. The air strikes violated NATO's "no-fly" zone, but NATO was unable to scramble fighters in time to stop them. The Croat-Muslim offensive has reduced the Serbs' holdings in Bosnia from 65% of the country to roughly 50%. Diplomats feared that further Croat-Bosnian gains might disrupt plans for dividing the country in a peace settlement. The foreign ministers of the warring parties--Croats, Bosnians and Serbs--agreed to meet this week in New York City to begin those talks.

PEACE TALKS IN TABA

After a week of bruising, round-the-clock negotiations in the Egyptian resort of Taba, Israeli Foreign Minister Shimon Peres and P.L.O. Chairman Yasser Arafat were struggling to reach agreement on expansion of Palestinian self-rule in the West Bank. Under the emerging plan, six cities would transfer from Israeli to Palestinian control in anticipation of next year's Palestinian elections. Prime Minister Yitzhak Rabin was hoping for quick Cabinet approval and a White House signing this week.

U.S. SERVICEMEN IN CHILD RAPE

Three Americans are being held on suspicion of kidnapping and raping a 12-year-old girl in Okinawa, bringing to a boil the residents' long-simmering resentment of the U.S. military presence on the Japanese island. U.S. Ambassador Walter Mondale and Lieut. General Richard Myers, the top U.S. officer in Japan, apologized for the attack. Two Marines--Rodrico Harp, 21, and Kendrick Ledet, 20--and Navy seaman Marcus Gill, 22, are allegedly involved.

BITTER WINDS

Hurricane Ismael killed at least 91 people in Mexico's Gulf of California, many of them fishermen caught by surprise when the hurricane roared in several hours earlier than expected. In the U.S. Virgin Islands and on the Puerto Rican island of Culebra, Hurricane Marilyn killed at least nine people and caused massive property damage.

BUSINESS

BIGGER IS BETTER?

Take The Bridges of Madison County (Warner Books) and the Red Hot Chili Peppers (Warner Music), add a Bugs Bunny (Looney Tunes star), a Larry King (CNN) and a Greg Maddux (Atlanta Braves pitching ace), and you begin to see the scope of the long-awaited Time Warner/Turner Broadcasting deal. Negotiations were tortuous, and Time Warner's debt will grow to more than $19 billion. But the two moguls in charge, Time Warner's Gerald Levin and tbs's Ted Turner, were upbeat. "This is far and away the dream deal," said Levin. "We share a common vision for the future," said Turner.

SMALL IS BEAUTIFUL?

Bucking the merger trend, AT&T announced it was breaking up into three divisions: AT&T proper for long-distance and communications services; another division for manufacturing equipment; and a third for computers. Wall Street approved: by week's end the share price had jumped 5 3/4 points, to $63.37.

SCIENCE

MOVE OVER, T-REX

Fossils found in Argentina by an auto mechanic reveal what may be the biggest meat-eating dinosaur known. The beast, which probably roamed 100 million years ago, was 41 ft. to 43 ft. long and weighed six to eight tons.

--By Janice M. Horowitz, Lina Lofaro, Michael Quinn, Jeffery C. Rubin, Alain L. Sanders and Sidney Urquhart