Sunk by Star Wars

It had the potential, or so it seemed for a while, of producing the most sweeping arms control agreement in the history of the nuclear age. The most dramatic proposal was to slash in half the long-range nuclear missiles in the arsenals of the superpowers and eventually eliminate them altogether. Until a half-hour before the meeting broke up on Sunday evening, virtually all the pieces seemed to be in place. Yet in the end, the Iceland summit broke down over a single word: laboratory.

After two intensive days of bargaining, Mikhail Gorbachev would not relent in his insistence that Ronald Reagan's cherished Strategic Defense Initiative, designed to serve as a space-based shield against ballistic missiles, be confined to "laboratory research." And Reagan was equally adamant that the U.S. retain the right not only to conduct scientific research on new Star Wars weapons but to develop and test them as well.

The first indication that the hastily called meeting in Reykjavik would be more than merely a modest presummit planning session came right at the start. President Reagan and Soviet General Secretary Gorbachev had ceremonially shaken hands, posed for photographers and then sat down to business, alone except for interpreters and notetakers. Reagan assumed their opening discussion would be a general one, each man outlining his broad vision of ways to manage the superpower rivalry. But after the President suggested they move from their armchairs to a rectangular wooden table, the Soviet leader pulled a detailed set of notes out of his briefcase. Then he proceeded to read. What he had brought with him, it turned out, was a series of sweeping new Soviet proposals on the whole gamut of arms-control issues: medium-range missiles, long-range strategic weapons, space defenses--the works.

As soon as the morning session ended, Secretary of State George Shultz hurriedly summoned five top American officials into "the bubble," a tiny secure room at the U.S. embassy in Reykjavik, to consider a reply. A brief session in the bubble with his advisers, followed by more discussions over a lunch of baked chicken, produced a revised set of talking points for the President to read at his afternoon session, ones that took into account Gorbachev's morning proposals and dwelt on the areas of potential agreement.

The sessions were supposed to end on Sunday morning, but with the chance of an agreement of historic proportions in sight, the two sides met on into the evening. It was only after sunset that the optimism began to unravel. To the Soviets, every element of the deal, it seemed, hinged on the curtailment of Star Wars. When that proved impossible, there was nothing left to do but offer grim handshakes and go home. The original purpose of the meeting--to set a date for a full-scale summit in the U.S. and work out a frame work for an agreement on medium-range missiles that could serve as its centerpiece--was lost in the dust. No deal, no date, no plans for future summits.

"In several critical areas we made more progress than we anticipated when we came to Iceland," said Reagan before he prepared to board Air Force One for the flight home Sunday night. "We moved toward agreement on drastically reduced numbers of intermediate range missiles in both Europe and Asia. We approached agreement on sharply reduced strategic arsenals for both our countries." But, he added, "there was remaining at the end of our talks one area of disagreement." He said "the Soviet Union insisted that we sign an agreement that would deny to me and future Presidents for ten years the right to develop, test and deploy a defense against nuclear missiles for the people of the free world. This we could not and will not do."

Reagan said that late on Sunday afternoon he made "an entirely new proposal" to Gorbachev: "a ten-year delay in deployment of SDI in exchange for the complete elimination of all ballistic missiles from the respective arsenals of both nations." It was the Soviet leader, Reagan said, who balked. "The General Secretary said he would consider our offer only if we restricted all work on SDI to laboratory research, which would have killed our defensive shield."

Shultz, meanwhile, was briefing the American press in Iceland. He said there had been the possibility of reaching "very sweeping and substantial and important agreements." But the President, he argued, simply could not have given in on the SDI issue. "In the end, with great reluctance, the President, having worked so hard, creatively and constructively for these potentially tremendous achievements, simply had to refuse to compromise the security of the U.S., of our allies and freedom by abandoning the shield that has held in front of freedom." White House Chief of Staff Donald Regan put the failure in more direct language: "We got 99 yards but didn't score. It was the Soviets who fumbled the ball."

At his own press conference, occurring almost simultaneously in a nearby theater, Gorbachev sat behind a wooden table and spoke in sober, measured tones. "I must say the Americans came to this meeting empty-handed," he charged. But Gorbachev held out hope that even the failure in Iceland would produce a new impetus to the arms-control process. "I think the President and ourselves should reflect on this entire situation that has evolved here," he said. "We have traveled a long way."

Ever since Reagan announced his plan in 1983 for "rendering these nuclear weapons impotent and obsolete" through a space-based shield of missile-killing satellites, the Soviets have seemed almost fixated on blocking the plan. Partly, experts speculate, it is because they fear the U.S. has a strong advantage in developing new technologies. Also, the Soviets see their arsenal of missiles as fundamental to protection of their homeland and their status as a world superpower.

It was U.S. officials, back in 1972, who first convinced the Soviets that defensive systems should be restricted on the ground that they actually give impetus to the arms race by encouraging development of bigger and better offensive weapons. That resulted in the Anti-Ballistic Missile treaty, which is still in force. Gorbachev had proposed, earlier this year, that both sides agree to abide by the ABM treaty for up to 20 more years, in the hope of curtailing the development of a Star Wars system. In the past few months, he had hinted that the Soviets would be willing to accept an extension of 15 years, or even less. Reagan had offered a plan that would prohibit deployment of SDI for 7 1/2 years. In Iceland both sides tentatively accepted a ten-year extension of the ABM treaty.

But the agreement broke down over the issue of exactly what would be permitted under the ABM treaty during those ten years. The U.S. interpretation of the treaty is that research, development and testing of new technologies--just about everything short of actual deployment--are allowed under the treaty. But there is dispute on this point, and the Administration has said in the past that it will abide by what it calls a "strict" interpretation of the pact, one that permits research but not full-scale development of new systems.

The Soviets insisted in Iceland that the treaty be "strengthened" to confine SDI research to the science lab. The first official statement that this was the Soviets' goal came in Gorbachev's interview with TIME in August of last year, when the Soviet leader said Moscow would not object to "fundamental research" on new space weapons. In the end, his definition of permissible research could not be reconciled with Reagan's plans to push ahead with SDI.

The outcome will inevitably intensify the controversy, raging at home as well as abroad, over Reagan's unyielding commitment to SDI. To many Americans, the entire Soviet ploy in Iceland might seem to be a setup, one that would give the Kremlin powerful propaganda ammunition in its current "peace crusade." Gorbachev was quick to blame the U.S. for the breakdown. Said he Sunday night: "Let America think. We are waiting. We are not withdrawing the proposals we have made."

In the U.S., Congress has already been battling to limit Star Wars funding, and many arms-control advocates argue that its primary value is as a trade-off in a "grand compromise" that would include deep slashes in offensive weaponry. The natural question will arise: If it actually seemed possible to reduce and then eliminate nuclear missiles from the face of the earth, did it make sense to scuttle such hopes by insisting on the development of a system that is conceived (by Reagan at least) to render such weapons obsolete?

To Reagan and his advisers, however, proceeding with SDI would remain necessary as an "insurance policy," as Secretary of State Shultz called it Sunday night, against the possibility of cheating by the Soviet Union or the development of missiles by another country. American officials also came to believe by late Sunday evening that the Soviet Union was not wholly sincere in its sweeping proposals; they began to seem more like a ploy to force the end of SDI. Indeed, the fact that Moscow would scrap the potential agreements that were reached because of the SDI dispute called into question their own commitment to real arms control. "As we came more and more down to the final stages," said a somber Shultz Sunday evening, "it became more and more clear that the Soviet Union's objective was effectively to kill off the SDI program."

When he departed for Iceland last Thursday, Reagan seemed determined to minimize expectations. "We have serious problems with the Soviet Union on a great many issues," he told a crowd on the South Lawn of the White House. After flight of more than five hours, he was greeted at Keflavik airport by President Vigdis Finnbogadottir and Prime Minister Steingrimur Hermannsson, then driven to the American ambassador's residence, where he was staying.

The President was lunching on baked halibut in the residence on Friday, discussing arms control with top advisers, when Gorbachev's Ilyushin-62 jet arrived from Moscow--at the same time as the ceremonial opening of Iceland's parliament. It was bad advance work by Moscow, for it meant that neither Iceland's President nor Prime Minister could be there to greet the Soviet leader. He and his wife Raisa were met instead by Foreign Minister Matthias Matthiesen. "We told Moscow about the opening of the parliament," lamented a Soviet embassy vice-consul, "but they decided it was too late to change plans."

Unlike Reagan, Gorbachev paused to speak with reporters upon his arrival, reiterating Moscow's professed goal of eliminating nuclear weapons by the end of the century. Then, with a wave to the crowd, he and his wife were whisked away by car to the Georg Ots, the Soviet ship on which they stayed in Reykjavik harbor.

Reagan, meanwhile, had another set of arms negotiations to resolve--with the U.S. Congress. Democrats in the House had tacked onto a critical spending bill a package of tough arms amendments that the Administration strongly opposed. Among them: a one-year ban on nuclear testing, a proviso that would forbid Reagan to violate the limits set by the unratified SALT II treaty and deep cuts in Star Wars funding. But under public pressure from the President, Congress backed down on Friday, moderating the SDI cuts and settling for a nonbinding resolution urging Reagan to comply with SALT II. The House also retracted its demand for test moratorium; in return, Reagan promised to submit to the Senate for ratification two existing treaties that limit nuclear tests. Said Reagan of Congress's decision: "I'm delighted. Now we can go forward united."

Reagan arrived at Hofdi house first on Saturday morning to be host at the opening session of the minisummit, coat-less in the strong seaside breeze and carrying a Manila folder. The Gorbachev limousine arrived a minute before schedule. When the General Secretary emerged from his car, Reagan was not at the door to meet him. Gorbachev glanced at his watch. A few seconds passed. As Gorbachev climbed the steps, the door suddenly swung open, and a slightly flustered Reagan stepped out to shake hands. Both looked at their watches, shrugged and smiled for the cameras.

As they posed in a reception area, Gorbachev told Reagan that Icelandic officials "tried to persuade me very convincingly that we must agree on something with you." Joked Gorbachev: "I asked them, 'Have you said the same words to the President when you met him?' and they assured me, 'Yes, in exactly the same words.' " Then the two men retired to small salon, where they were joined by two interpreters and a pair of notetakers.

Reagan planned to explain once again his general vision of how both sides could phase in strategic defenses while simultaneously cutting offensive weapons in order to achieve a greater "strategic stability." That explanation, Secretary Shultz had hinted earlier in the week, included offering an inducement: any significant cut in offensive missiles could permit a curtailment of SDI.

Gorbachev's gambit of reading off a new set of Soviet ideas and proposals caught Reagan by surprise. In Geneva, Gorbachev had spoken off the cuff; by reading from a long paper this time, he gave the impression that he was following detailed guidelines worked out within the Politburo. At the heart of his proposals was the Soviet view that there could be a deep reduction in offensive missiles if the U.S. would postpone SDI development. In a sense, this was a flip side of the State Department position that a sharp reduction in offensive weapons would logically require less defense.

After talking for 51 minutes, the two leaders invited Shultz and Soviet Foreign Minister Eduard Shevardnadze to join them at the rectangular wooden table. When the meeting finished at 12:30, Reagan emerged and told a group of his top aides, "They've got a proposal. But I'm afraid they're going to try to go after SDI." That was when Shultz gathered the top U.S. arms officials to meet in the embassy's secure "bubble" room to revise the President's talking points for the afternoon session.

With these updated talking points, Reagan went back to Hofdi house at 3:30 for his afternoon session with Gorbachev. This time they spent no time alone. Instead they were joined from the start by Shultz and Shevardnadze. Carefully reading from his notes, Reagan offered no new counterproposals. But the revised presentation did stress the areas where the U.S. felt there was now common ground.

It was Shultz who came up with the idea of setting up two Soviet-American working groups: one on arms control and the other on humanitarian and regional issues. To head the more visible of the two, the U.S. designated Paul Nitze, the Administration's chief arms-control adviser. The group got down to business just after 8 p.m.

The arms-control group worked through the night, finally wrapping up its session at 6:30 a.m. on Sunday. Just as Nitze's group was going to bed, Reagan was getting up. He met with Shultz, Chief of Staff Don Regan and National Security Adviser John Poindexter, who boiled down the essence of what the working groups had accomplished. Then he headed back to Hofdi house for what was supposed to be his final session with Gorbachev.

The Sunday-morning session ran more than 90 minutes over schedule. After grappling for 3 1/2 hours with what had been produced by the working groups, Reagan and Gorbachev finally emerged, smiling and waving a bit tentatively. "Mr. President," a reporter shouted, "have you made any real progress?" Reagan seemed to squirm slightly before answering, "We're not through." This was an unexpected development: the Iceland mini-summit was going into overtime.

While Reagan and Gorbachev broke for lunch, Shultz and Shevardnadze remained at Hofdi house with their top arms experts to continue their quest for some agreement. The two leaders rejoined their foreign ministers at 3, and for another four hours, the negotiations dragged on. Yet it all came down to the one sticking point, the one issue that both Gorbachev and Reagan feel most strongly about: Star Wars. That final hurdle was the highest and the hardest. And the most important.

Finally, Reagan and Gorbachev re-emerged. The President gave a cursory wave, but his characteristic smile and confident gait were replaced by a stark, dejected countenance. The General Secretary, betraying no emotion, walked Reagan to his limousine.

The Shultz press conference began less than 30 minutes later. Weary, glassy-eyed, his voice strained, the Secretary of State imparted the grim news. As Shultz's conference was winding down, Gorbachev was meeting the press in a converted movie theater nearby. Utterly calm but with unmistakable resignation in his voice, he said of the summit, "Sometimes when you stand face-to-face with someone, you cannot see his face."

Meanwhile, the President was taking the podium at Keflavik air base. The crowd applauded fervently. The smile returned to Reagan's face. Eyes twinkling, he said, "It's good to feel so at home." He told his audience that he could not give in to Gorbachev's SDI condition. "We came to Iceland to advance the cause of peace," Reagan said. However, he stated, "the ultimate goal of American foreign policy is not just the prevention of war but the expansion of freedom." His voice nearly cracked when he praised the courage of America's young soldiers. Minutes later he was aboard Air Force One, returning home, leaving behind the stalemate in Reykjavik and no doubt pondering what might have been. --Reported by James O. Jackson, Johanna McGeary and Barrett Seaman/Reykjavik

With reporting by JAMES O. JACKSON, Johanna McGeary, Barrett Seaman/Reykjavik