THE MIDDLE EAST

Leader of Israel's Shas Party Resigns

JERUSALEM -- The corruption-tainted leader of Israel's ultra-Orthodox Shas party resigned yesterday in a move likely to bolster Prime Minister-elect Ehud Barak's prospects of forming a broad coalition.

Aryeh Deri, who was convicted earlier this year of taking bribes, announced his decision at a meeting of leading activists, a Shas official said.

Barak had ruled out any dealings with Shas as long as Deri headed the party. Deri resigned from parliament after last month's general election but continued acting as Shas chief.

Ocalan Asks Supporters to `Understand' Him

ISTANBUL -- Kurdish guerrilla leader Abdullah Ocalan, on trial and facing a death sentence, called for his supporters to understand him -- an apparent attempt to ward off potential criticism about "betraying" the Kurdish cause.

The rebel chief surprised many observers at his trial, which began earlier this month on an island south of here, with declarations of loyalty to the Turkish state that he had fought for 14 years.

"I could have acted differently. I could easily have shown an uncompromising attitude," he was quoted as saying to his lawyers in a statement carried by the Kurdish DEM news agency based in Germany. "But in order to realize a solution, I could not have done this. It is important that you understand me."

ASIA

Troops Move Close to Kashmir Border

NEW DELHI -- India and Pakistan said they had positioned troops close to key border zones as India pressed its offensive to drive guerrilla infiltrators from the heights of the disputed Kashmir region.

Both nations said they were responding to troop movements from across the Line of Control, which divides the area of Kashmir ruled by India from the part controlled by Pakistan.

Burma Said to Abduct 2 Exiled Students

BANGKOK -- Burma's military has abducted two Burmese students living in exile in China, a group of exiles reported. The All Burma Democratic Students Front said military intelligence officers arrested the students last Thursday while meeting supporters of Burma's democracy movement near the town of Ruili in southern China.

The Burmese government issued a statement saying that it was too early to comment on the claim, but that an arrest would not be surprising "since they are a threat to national security."

Hong Kong Mulls Residency for Boat People

HONG KONG -- Hong Kong said it would consider permanent residency for its dwindling community of some 2,000 Vietnamese refugees, ending the saga of the boat people that began when the Vietnam War ended almost 25 years ago.

"We will carefully consider all possible options including integration for the remaining Vietnamese refugees and migrants in Hong Kong," a Security Bureau spokeswoman said.

EUROPE

Blast Shuts Key Caspian Oil Pipeline

MOSCOW -- A key pipeline carrying Caspian Sea oil will be shut down indefinitely because of an explosion in southern Russia near the lawless territory of Chechnya, officials said.

The pre-dawn explosion Monday in the republic of Dagestan blew a hole in the pipeline and set leaking oil on fire, Russian news reports said. Rescuers put out the flames after about two hours. Russia's Transneft oil company will indefinitely shut off the pipeline, which carries oil from Baku, Azerbaijan, on the Caspian Sea, to Novorossiysk, Russia, on the Black Sea, the Interfax news agency reported.

The cause of the explosion was unknown, but a crater at the site suggested a bomb blast, oil company officials said.

Blair Launches New Push for Peace Pact

BELFAST -- British Prime Minister Tony Blair launched a new effort to save Northern Ireland's peace agreement, emphasizing that Irish Republican Army disarmament must be "plainly part of the process."

Blair said he had returned to Northern Ireland to oversee more talks because "alarm bells are ringing" before the June 30 deadline he set to devolve powers to a still-unformed Protestant-Catholic government for the province.

THE AMERICAS

Rebels Free 33 Kidnapped at Church

CALI, Colombia -- Seventeen days after kidnapping them during a Sunday Mass, leftist rebels released 33 hostages in front of live television cameras but kept at least 20 others captive.

The freed churchgoers were delivered in mountains south of this western city to a 12-member commission of Colombian and international politicians including Venezuela's ambassador and German lawmaker Bernd Schmidbauer.

Among those released by the National Liberation Army were three minors and the parish priest, the Rev. Humberto Cadavid.

Mercosur Seeks More Access in Europe

ASUNCION, Paraguay -- South America's Mercosur trade bloc, hit by economic slowdown and political instability, said trade talks with the European Union this month should lead to greater access for its huge food exports.

Brazilian President Fernando Henrique Cardoso said European firms were investing billions of dollars in Mercosur, and that the EU must make concessions on agriculture to guarantee its presence in the $1 trillion economy of 200 million people.

U.S. Native Alleged to Lead Brazil Drug Ring

SAO PAULO -- Police say they have uncovered an elaborate drug-trafficking ring masterminded by an American expatriate who recruited Brazilian Air Force officers to smuggle cocaine to Europe on military jets.

Air Force pilots and high-ranking officers with customs clearance allegedly stashed the narcotics in their luggage on routine military flights to Spain and France, police said.

Authorities said this week they believe Missouri-born John Michael White, jailed twice in Brazil on drug-related charges, was the brains behind the operation that lasted at least one year.

QUOTE OF THE DAY

"NATO is here, but they have liberated an empty land."

Korab Shasinvari, an ethnic Albanian from Kosovo. -- Page A1