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MEDICAID'S ABORTION POLICY REVISED In a major policy change, the Clinton administration announced Saturday it will require states to finance Medicaid abortions in cases of rape or incest or if the woman's life is endangered. The new rules will cover abortions retroactive to Oct. 1. The Bush and Reagan administrations allowed states to decide on their own whether to pay for Medicaid abortions for low-income women. States were permitted to seek federal matching funds only if the life of the woman was endangered. Restrictions on Medicaid funding for abortion were eased slightly in the Health and Human Services appropriation bill passed by Congress this year. The new policy, which grew out of a review of that law by HHS lawyers, makes it mandatory for states to pay for the procedure with federal matching funds in cases of rape, incest, or if the woman's life would be endangered by continuing the pregnancy. Medicaid coverage for most abortions still would be barred under the Hyde Amendment. North Korea nuclear bombs

A classified CIA document concludes that North Korea probably has developed one or two nuclear bombs, The New York Times reported yesterday. The CIA's assessment represents the collective judgment of US intelligence agencies, the article said. The assessment, if it turns out to be true, could threaten Asian stability. (UN pushes China to broker negotiations, Page 3.) Algerian insurgency

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The latest violence blamed on Algeria's nearly two-year-long militant Islamic insurgency has killed 11 people, including five police officers, news reports and officials said Saturday. The fear of more attacks led to subdued Christmas celebrations under heavy security by Algeria's tiny Christian minority. The government's iron-fisted rule has failed to quell violence that has claimed more than 2,000 lives since it canceled elections in 1992 that Muslim fundamentalists were expected to win. Floods dampen Christmas

Storm-swollen rivers in northern France overflowed their banks, leaving hundreds of people homeless and thousands without electricity on Christmas Day. At least two deaths have been blamed on the storms. In Germany, residents along the Rhine and other rivers spent Christmas mopping up and evaluating the damage from the worst floods since 1926. Floods killed four people there and one in Belgium. In Germany, the rain turned to snow by Saturday. Bosnian cease-fire broken

Serbs bombarded Sarajevo and battles raged in central Bosnia despite a Christmas truce meant to bring holiday peace to the war-ravaged republic. There was no immediate word on casualties. Meanwhile, there was progress on one front: A convoy carrying beans, mattresses, and 60 tons of precious diesel fuel arrived in Sarajevo Saturday. A UN relief agency spokesman said the trucks got through despite an attempt by Serbs to divert them onto an impassable route. Afghan truce begun

Rival forces of Afghan president Burhanuddin Rabbani and Prime Minister Gulbudding Hekmatyar have agreed to a cease-fire in eastern Afghanistan that will begin this morning. Several similar cease-fires among the rival factions in the fractious Islamic coalition government have quickly broken down since the guerrillas took power in April 1992 from the former Soviet-backed government. Kurdish newspaper closed

A Turkish state security court has ordered the closure of a pro-Kurdish newspaper for two months and sentenced its former editor to four years in jail, its editors said Saturday. They said the Istanbul court Friday ordered the closure of the daily Ozgur Gundem for publishing articles deemed to be separatist propaganda. Rev. Norman Vincent Peale

The Rev. Norman Vincent Peale, who drew on Christian principles to preach a message of ``positive thinking'' heard worldwide, died Friday. Peale guided the poor through the Depression and counseled presidents. He preached from pulpits, through best-selling books, and in 54 years of weekly radio broadcasts.

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