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JAPANESE SEEK TAX COMPROMISE Japan's ruling coalition struggled yesterday to resolve a tax dispute that has delayed a crucial economic-stimulus package and threatened the country's shaky government. Prime Minister Morihiro Hosokawa announced a tax plan last Thursday but was forced to back off a day later after a rebellion by the largest coalition party, the Socialists. They threatened to bolt from the seven-party governing alliance if Mr. Hosokawa insisted on his proposal to more than double the national sales tax in 1997 to pay for a tax cut this year. The political disarray is a major embarrassment to the prime minister, coming only days before a meeting this Friday with President Clinton. Texas senator goes on trial

Republican Sen. Kay Bailey Hutchison of Texas went on trial yesterday in Fort Worth. She is charged with using public money for her personal and political gain when she was state treasurer from January 1991 to June 1993. She faces up to 20 years in jail if convicted. In June, Mrs. Hutchison won a special election to replace Lloyd Bentsen, who was appointed Treasury secretary. Hutchison and two aides were indicted in September. The case has involved months of legal wrangling. Teamsters strike UPS

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Despite a court order banning a strike, Teamsters staged a scattered walkout against United Parcel Service yesterday to protest a company decision to raise the weight limit on packages to 150 pounds. Many local unions ignored the call from Teamster headquarters in Washington and their members reported to work as usual. Workers struck the UPS headquarters in Atlanta, but went to work at UPS facilities in several states. Finns elect president

Finland's new president, whose office has long been responsible only for foreign policy, says he will not try to expand his powers, even though his campaign focused on pulling Finland out of its worst recession in 60 years. Martti Ahtisaari, a former UN peace mediator, won Finland's first direct presidential election Sunday with 54 percent of the vote to Defense Minister Elisabeth Rehm's 46 percent (see Page 6). An Olympic record

The Lillehammer Olympics, opening Saturday, will net a Winter Games commercial record of $525 million in revenue, the International Olympic Committee said on yesterday. ``Lillehammer is set to break all Olympic Winter Games records, which is a particular pleasure because it comes from the basis of such a small country,'' marketing commission chairman Dick Pound told a news conference. The previous revenue record was set at the Albertville, France, Games two years ago when the final figure was around $480 million, the IOC said.

Airships compete

Israeli jets hit Lebanon

Israeli warplanes twice attacked guerrilla targets in south Lebanon twice yesterday after three Israeli soldiers were killed in an ambush, security sources said. Four planes fired four rockets at Hizbullah posts in the nearby Jarjou and Ain Qana villages. In a second raid, two jets fired rockets at the village of Mlita in the Iqlim al-Toufah area, a mountainous ridge held by pro-Iranian Hizbullah guerrillas.

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