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Signaling preparation for a possible showdown with Iraq, Defense Secretary William Cohen and Gen. Henry Shelton, chairman of the Joint Chiefs of Staff, canceled trips to Asia. The UN Security Council was considering a US call for tighter sanctions against Iraq. A US U-2 surveillance plane flew over Iraq unopposed Monday, despite an Iraqi threat to attack such flights. Baghdad's decision two weeks ago to bar US weapons inspectors has halted work of UN teams trying to ensure that Iraq is not developing weapons of mass destruction.

President Clinton suffered a major defeat in his struggle to win expanded trade negotiating power, but promised to "regroup" and refile the measure. Democratic leaders in the House, who refused to support his "fast track" trade bill, urged the president to rewrite it to give added protection to workers and the environment. The defeat put in doubt plans to expand free trade between North and South America, which Clinton had promoted in Latin America.

Congressional leaders renewed efforts to resolve contentious spending issues so lawmakers could adjourn for the year. Republicans told Clinton to restrict family-planning aid overseas or face cuts in requests for other forms of foreign aid. To keep the government going, Congress passed an emergency bill that provides funding through Friday.

A judge's decision to reduce a jury verdict against au pair Louise Woodward will be appealed, prosecutors and defense attorneys said in Cambridge, Mass. In a dramatic reversal, Woodward, who awoke in prison Monday morning facing at least 15 years behind bars for second-degree murder, was set free in the afternoon by Judge Hiller Zobel.

Defense Secretary Cohen announced a plan to cut 28,000 civilian jobs from the military and make business reforms to save $3.2 billion a year for arms modernization. He called on Congress to approve two new rounds of domestic base closings in 2001 and 2005 to save another $2.8 billion a year. Congress rejected a request for more base closings earlier this year.

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