By Dan Balz and William Drozdiak
Washington Post Foreign Service
Thursday, May 14, 1998; Page A01

BERLIN, May 13—President Clinton tried today to head off a full-fledged nuclear arms race in South Asia, imposing an array of economic sanctions on India as punishment for its series of nuclear tests and sending a high-level delegation to Pakistan in hopes of persuading that government not to follow suit.

Standing with German Chancellor Helmut Kohl outside the summer palace of Frederick the Great at the start of a week-long European trip, Clinton said India's behavior "recalls the very worst events of the 20th century" and cannot be justified by its desire to gain greater respect around the world.

"They have to define the greatness of India in 21st-century terms, not in terms that everybody else has already decided to reject," the president said.

Clinton's decision could cost India millions of dollars in direct aid and billions in credits and guarantees. After deciding to impose the sanctions en route to Germany Tuesday night, he formally invoked the measures early this morning, shortly before hearing that India had set off two more nuclear explosions, following three underground tests on Monday.

The president called on other nations to join the United States in punishing India, but while key allies have joined in withholding aid to India and making strong diplomatic protests, they have thus far resisted implementing sanctions.

The most urgent task undertaken by the administration was trying to persuade Pakistan, India's neighbor and bitter rival, not to respond with nuclear tests of its own. Clinton spoke with Pakistani Prime Minister Nawaz Sharif by phone this morning, but U.S. and Pakistani officials said Sharif gave the president no assurances that Pakistan would refrain from nuclear testing.

"It seems that the Indian leadership has gone berserk," said Pakistani Foreign Minister Gohar Ayub Khan, who accused India of drawing Pakistan "headlong into an arms race."

Following the phone call, Clinton decided to send a team of senior officials to Pakistan to make the case in person, according to Karl F. "Rick" Inderfurth, assistant secretary of state for South Asian affairs. That team -- comprising Inderfurth, Deputy Secretary of State Strobe Talbott and Marine Gen. Anthony C. Zinni, commander of the U.S. Central Command -- was to leave Washington on Wednesday night.

The three will deliver a two-tier message, according to Inderfurth. They will say first that "a test by Pakistan will bring about the same sanctions on Pakistan that are now being applied to India," he said. They also will hold out the prospect that restraint by Pakistan could be rewarded, possibly by a new administration effort to negate the Pressler Amendment, which bars most U.S. aid and military sales to Pakistan because of the country's nuclear program.

Clinton acted swiftly to penalize India under requirements of the Arms Control and Export Act, which automatically triggers economic sanctions whenever a nonnuclear nation undertakes such testing. Officials said the president could have delayed implementation of the sanctions for up to 30 days, but chose to move immediately to send a clear signal of displeasure to the Indians:

The president ordered an end to direct U.S. assistance to India, with the exception of some food and other humanitarian aid, valued at $142 million in fiscal 1998.

He also blocked extension of credits or loan guarantees by U.S. agencies or institutions. That will cost India $4 billion in loan guarantees from the Export-Import bank and about $10 billion in potential financing from the Overseas Private Investment Corporation.

The sanctions also prohibit U.S. banks from lending money to India, except for buying food, and require the United States to oppose loans or other financial aid to India by such international lending agencies as the World Bank. A White House fact sheet noted that India has $3.8 billion in such assistance pending before international agencies, and U.S. opposition would effectively block approval.

The sanctions include as well a prohibition on millions of dollars in sales of defense-related supplies, munitions licenses and high-technology exports.

Under terms of the law, the sanctions will remain in place until Congress votes to lift them. "I think it was a fairly expensive decision for them," National Security Adviser Samuel R. "Sandy" Berger said of the Indian government.

Clinton's call for other major powers to impose sanctions on India, however, appeared to fall on deaf ears. Some nations took limited measures. Japan, India's largest donor, took the largely symbolic action of canceling about $30 million in aid, although Japanese officials indicated they might also reevaluate a loan package exceeding $1 billion. The Danish government froze $28 million in aid, and a number of other nations, including Canada, have withdrawn their ambassadors from New Delhi.

But Britain, France and Russia, while unanimously condemning the Indian nuclear tests, all refused to impose sanctions of any kind, while China has made no substantive reaction to the Indian tests so far. This leaves the United States as the only permanent member of the U.N. Security Council to impose sanctions.

Kohl, Clinton's host, was publicly noncommittal during his joint news conference with Clinton, saying only that he would take "a close look" at sanctions. He was equally equivocal in his private discussions with the president, according to a senior administration official. There were reports here, however, that the German government was preparing to block $170 million in development aid to India.

Speaking with reporters this afternoon, Clinton said he was saddened by the Indian government's actions, noting that he has long advocated closer relations between the United States and India. "This is a deeply disappointing thing for me personally," he said.

He praised India as "a wonderful country" with a strong and sizable middle class and a "vibrant democracy." Thus, he added, "it is not necessary for them to manifest national greatness by doing this. It is a terrible mistake."

In his phone conversation with Clinton, Pakistani leader Sharif warned that he was close to ordering a tit-for-tat response to the Indian nuclear tests, according to official sources in Islamabad, the Pakistani capital. Clinton responded with assurances that he was fully aware that India's action posed a "serious threat" to the security of the region, the sources said.

In its public statements, the Sharif government avoided making any specific threat of a Pakistani nuclear test. But an aide to Sharif said that the Defense Committee of the Cabinet -- the rough equivalent of the U.S. National Security Council -- decided Wednesday to prepare for a test but to make no final decision at least until next week when officials will have had time to assess the strength and effectiveness of international sanctions against India.

Sources said that Abdul Qadeer Khan, the father of Pakistan's clandestine nuclear program, was invited to the session of the defense committee, which meets only in extraordinary situations. "It's now or never," Khan told the nation's assembled political and military leadership, according to a cabinet source.

The source said the committee decided to leave the final decision to Sharif. "There were no angry speeches, as most participants advocated a policy of wait and see," the source said.

Most Pakistani political commentators also advocated waiting to see how severely adverse world reaction would affect India. "Wait and see what the international community does to India to blunt its nuclear edge. That should also enable Pakistan to evaluate the cost of going nuclear," declared an editorial in one influential newspaper, the Nation.

If the U.S. delegation to Pakistan raises the Pressler Amendment, they would be addressing one of the central issues of dispute between the two countries. Because of the legislation, which punishes Pakistan for its nuclear program, 28 U.S.-built F-16 combat jets for which Pakistan paid more than $600 million nearly a decade ago remain in storage in Arizona, barred by law from being delivered.

The Clinton administration has been searching for several years for a way either to complete the transaction or sell the planes to another country and transfer the proceeds to Pakistan.

Staff writer Thomas W. Lippman in Washington and special correspondent Kamran Khan in Karachi, Pakistan, contributed to this report.