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FBI investigators are weighing the possibility that Terry Nichols is the elusive John Doe 2 wanted in the Oklahoma City bombing case, Newsweek magazine reported. Although Nichols bears no resemblance to the sketch of John Doe 2 compiled from a witness, all trails in the investigation have linked him to arrested bombing suspect Timothy McVeigh, the magazine said. Because the bombed-out federal building is a hazard, a decision will be made soon whether to tear it down and build a memorial park, reconstruct it for use, or keep the shell as a memorial. A grand jury hearing evidence in the case continues to meet this week at Tinker Air Force Base outside Oklahoma City. (Story, Page 1.)

House Speaker Gingrich said action on antiterrorist legislation may be slowed by the promotion of Larry Potts, the FBI agent in charge of the 1993 Waco, Texas, operation, to the agency's No. 2 post. Potts, a close aide to FBI Director Freeh, also oversaw the 1992 federal siege of white separatist Randy Weaver. Gingrich said rural Americans and many Westerners have a ''genuine fear'' of the federal government. He cited a bill filed by Idaho Congressman Chenoweth that would require federal agents to register their guns with local law-enforcement officials.

Senate and House budget committees will come out with GOP plans this week to balance the budget by 2002. Political skirmishes are expected to focus on cuts in Medicare. Republicans have proposed cutting Medicare $280 billion below projected levels over seven years as part of more than $1 trillion in cutbacks. President Clinton and other Democrats say the GOP plan means sacrificing health care for the elderly to pay for tax cuts for the rich. (Story, Page 8.)

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