Regime in Italy Falls, Blames U.S. : Reagan’s Actions After Hijacking Assailed by Craxi

One of the most stable Italian governments since World War II collapsed Thursday as Prime Minister Bettino Craxi, in a startling and bitter farewell speech, blamed the United States for bringing down his government.

Craxi submitted the resignation of his 26-month-old government--the second-most enduring in post-World War II Italian history--to President Francesco Cossiga after protesting the actions of the Reagan Administration in the aftermath of the hijacking of the Italian cruise liner Achille Lauro.

The Socialist prime minister, who will act as caretaker until another government is formed, accused Washington of failing “to recognize all the Italian government” did to resolve the hijacking crisis and taking a “polemical tone” in criticizing Italy for releasing a Palestinian leader accused by the United States of masterminding the hijacking.

Republican Pullout

His government’s collapse was triggered by the withdrawal Wednesday of Defense Minister Giovanni Spadolini and his Republican Party from the five-party governing coalition.

The Republicans quit over Craxi’s failure to consult all members of the coalition before he released Abul Abbas, a Palestine Liberation Organization official who negotiated the hijackers’ surrender and then flew out of Egypt with them on a plane intercepted by U.S. warplanes.

Craxi noted, in his speech to Parliament, that it was the United States that asked him to call on PLO Chairman Yasser Arafat for help in ending the hijacking, a call that brought on the first heavy criticism of his government.

Violation Charged

He also charged that U.S. fighter jets violated Italian airspace during the unapproved shadowing of an Egyptian jet carrying Abbas from Sicily to Rome last Friday, almost 24 hours after the hijackers’ escape plane was first forced down by U.S. Navy jets over the Mediterranean Sea.

Craxi referred to the celebrated interception of the escape plane as “the hijacking of an Egyptian plane by American aviation.”

He said that a day later, Italy had to assign four of its own military fighter planes to escort the Egyptian plane across the length of Italy to Rome. He strongly implied that he feared a second U.S. attempt to skyjack the EgyptAir jetliner and its PLO passenger, Abbas, who faced an American arrest warrant and extradition request for complicity in the ship hijacking.

Craxi said the Italian government “immediately sent a protest to the government in Washington.”

In Washington, an Administration source confirmed that a T-39 jet trainer had followed the Egyptian aircraft on its flight from Sicily to Rome.

The flight by the unarmed military airplane was ordered by a U.S. military officer in Italy and was not based on a decision in Washington, said the source, who added that the twin-engine jet landed “right beside” the EgyptAir 737 in Rome.

The source said he assumed that the flight was ordered “to make sure the (Egyptian) plane went to Rome” and did not head for Cairo or Tunis with Abbas aboard after taking off from Sicily.

“It was more in the nature of shadowing or observation. There was nothing threatening about it,” he said.

Administration officials, while privately expressing sympathy for Craxi, would not comment on the fall of the Italian government, calling it an internal matter.

At the White House, spokesman Edward P. Djerejian took much the same line the United States has taken in response to the Egyptian government’s anger over the affair, saying other U.S. interests transcend the furor over the Achille Lauro.

“Our position on the whole operation, involving the Egyptian airplane, which had the terrorists on board, is a matter of public record,” he said. “We made the decision. It was a clear decision taken by the President of the United States after due consideration of all the factors and implications involved. We stand by that decision . . . . “

‘Key NATO Ally’

“We consider our relationships with Italy to be fundamental, (and Italy is) a key NATO ally,” Djerejian said. “We will maintain those relations, those close and friendly relations, with the Italian government without fail.”

As for the hijacking case, the White House spokesman expressed confidence that the Italian government will press ahead with its prosecution of the four hijackers in custody, despite its refusal to hold Abbas.

In his speech, Craxi harshly criticized “the polemical tone of initial reactions of the American government” to Italy’s release of Abbas. The United States protested that Abbas’ escape was “incomprehensible” and said it still seeks to arrest him as a “notorious terrorist” who masterminded the ship hijacking.

Craxi said the outraged response of the Reagan Administration to Abbas’ release “could not but provoke unpleasant surprise and bitterness for the ignorance on the part of a friendly government of everything that the Italian government had done to successfully overcome a particularly critical and difficult situation. . . . “

The beleaguered prime minister was toppled from power less than a month before he would have become leader of the longest-lived of the 44 Italian governments since World War II.

Despite his criticism of the United States, it was the withdrawal of Spadolini that most directly brought down Craxi. Spadolini, a former prime minister who was twice forced out of office by Craxi’s own political maneuvering in 1982, is staunchly pro-American, pro-Israel and anti-PLO. He had protested Craxi’s and Christian Democrat Foreign Minister Giulio Andreotti’s call to Arafat for help, and their actions in freeing Abbas on the heels of the American arrest warrant.

Spadolini’s major complaint, however, appeared to be the failure of the Socialist prime minister and the Christian Democrat foreign minister to consult the minor coalition partners--the Republicans, the Social Democrats and the Liberals--before letting Abbas go.

Picture of Cooperation

In his farewell speech, praised by both Christian Democrats and Communists, Italy’s second-strongest party, Craxi painted a picture of cooperation with the United States up to a point shortly before the hijacking ended last Wednesday with the surrender of the cruise ship pirates to Abbas and Egyptian authorities.

Italy and the Reagan Administration diverged, he said, over military rescue measures hastily planned by both countries during the hijacking. Craxi said he had objected to an American plan to launch a military rescue operation against the hijacked cruise liner, maintaining that it was an Italian ship.

He also said he had argued that Italy was capable of handling a seaborne military raid on its own but still wanted to hold out for a nonviolent solution.

Craxi said the United States also objected to the Achille Lauro’s entering Egyptian waters, as Egypt requested, for final negotiations to end the affair peacefully. In the end, he revealed, Arafat informed Italy that he had arranged for the ship to return to Egyptian waters where the hijackers surrendered, claiming no one had been hurt, in return for guarantees of passage to a safe haven.

After discovering that the hijackers had murdered American passenger Leon Klinghoffer, 69, Craxi said, “I passed to Yasser Arafat my request for their (the hijackers’) consignment to Italy” for trial.

Later, President Reagan demanded that the pirates be extradited to the United States.

When the U.S. Navy jets intercepted the EgyptAir plane carrying the hijackers, Abbas and one of his assistants, Craxi agreed to their use of the Italian-American naval air base at Sigonella, Sicily. But he said he was surprised that instead of the Navy fighters, two American C-141 transports escorted the airliner to the ground.

“From (one of the) C-141s, 50 American military got out in combat uniforms” and surrounded 50 Italian soldiers who had formed a cordon around the Egyptian aircraft, Craxi said.

“They belonged to the (American) Delta Force and were commanded by a general in radio contact with Washington,” Craxi said. He said the “commando group (was) ready to intervene to take the passengers of the (Egyptian) Boeing 737. The order which came directly from the White House was to ‘take the terrorists.’ ”

(In Washington, an Administration official, speaking on the condition that he not be identified, said that the Italian and American troops engaged in a “a pretty heated discussion” but never approached violence.

(He said that the United States had held off telling the Italians about the interception of the plane, planning to force the Egyptian 737 down at Sigonella, then quickly transfer the terrorists to a waiting C-141 transport plane to bring them to the United States. However, the airliner was denied permission to land at the base, forcing Defense Secretary Caspar W. Weinberger to contact Spadolini, who then intervened and arranged landing permission.)

Punishable in Italy

The prime minister said that he told Reagan in a telephone call that since the crimes were committed on an Italian ship, they had to be considered crimes on Italian territory punishable in Italy.

When the United States subsequently sought Abbas’ arrest, Craxi said he could not comply because there was not sufficient proof under Italian law to justify holding the PLO official, and moreover Abbas had diplomatic immunity and was aboard an Egyptian airplane that enjoyed extraterritoriality.

Craxi’s senior foreign policy adviser, Antonio Badini, later told news agencies here that despite talk of “compelling evidence” from Washington, the United States still has not provided convincing proof that Abbas was behind the hijacking.

Badini said the American evidence came in the form of a written transcript of Abbas’ conversations with the hijackers which, he said, was “completely ridiculous at times.” The Israeli government released excerpts of that transcript Wednesday.

President Cossiga accepted the Craxi government’s resignation and said that he will begin consulting leaders of Italy’s political parties later today in the first move toward creating a new government. Political observers in Rome said the most likely outcome is that Cossiga will ask Craxi early next week to make an effort to re-establish a ruling coalition.

Craxi had been scheduled to meet with Reagan next week at the United Nations. Reagan has invited him and other Western leaders to join him for a discussion in preparation for Reagan’s November summit meeting with Soviet leader Mikhail S. Gorbachev in Geneva.

Djerejian said Thursday that Craxi’s acceptance of Reagan’s invitation has not been withdrawn.

Contributing to this story were Times staff writers Rudy Abramson and James Gerstenzang in Washington.