Shultz Bars Swap With Soviets to Free Daniloff : Accuses Kremlin of ‘Hostage-Taking’ in Jailing U.S. Reporter, Calls for ‘Civilized Behavior’

Secretary of State George P. Shultz, in his first public comment on the detention of an American news correspondent in Moscow, Friday ruled out any trade to obtain the reporter’s freedom from the Soviet Union.

Departing from his prepared text during a speech at Harvard University, Shultz voiced his outrage at Soviet “hostage-taking” and said that Moscow must settle the case quickly, “in accordance with the dictates of simple human decency and of civilized national behavior.”

After nearly a week in which Reagan Administration officials appeared to signal a willingness to reach an agreement for the freedom of the reporter, Nicholas Daniloff of U.S. News & World Report, the White House and Shultz appeared to be taking a harder line.

Reagan Scrapped Plan

But at the same time, President Reagan--on vacation at his ranch northwest of Santa Barbara--scrapped a plan to issue a toughly worded statement Friday, although White House spokesman Larry Speakes held out the possibility that Reagan would address the subject “if he sees it would be helpful.”

In an effort to slow as much as possible the escalating level of the debate over Daniloff, it was decided that Reagan’s view of the case would be delivered by Shultz, keeping the President out of the fray for the time being.

Daniloff was seized by agents of the KGB, the Soviet secret police, last Saturday after accepting from a Soviet acquaintance a package that the KGB said contained maps classified “top secret.”

Under the agreement that officials had said was offered to the Soviet Union earlier this week, Daniloff would have been freed and Gennady F. Zakharov, a Soviet physicist arrested on espionage charges in New York on Aug. 23, would have been released from jail and placed in the custody of the Soviet ambassador to the United States, Yuri V. Dubinin, pending a trial.

Shultz, speaking at a convocation marking the 350th anniversary of the founding of Harvard College, in Massachusetts, appeared to rule out this arrangement.

“Let there be no talk of a trade for Daniloff. We and Nick himself have ruled that out,” the secretary of state said. (Mortimer B. Zuckerman, chairman and editor in chief of U.S. News & World Report, said Thursday that Daniloff had told him he did not want to be exchanged for the accused Soviet agent because that would imply that he, too, was a spy).

But a State Department official, in response to a question, said that Shultz’s comments should not be interpreted as a rejection of all efforts to reach an agreement to secure Daniloff’s release. Rather, the Administration wants to make sure that Daniloff is free, with no conditions, before consideration will be given to a request to remand Zakharov to the ambassador’s custody.

Delivering what he said was “a message of outrage at the detention of Nick Daniloff, Harvard class of 1956,” Shultz said:

“The cynical arrest of an innocent American journalist reminds us of what we already know: Our traditions of free inquiry and openness are spurned by the Soviets.”

He said that Daniloff’s arrest revealed “the dark side” of the Soviet system, which he said had “resorted to hostage-taking.”

Endangered Arms Agreement

Also in Cambridge, Mass., defense Secretary Caspar W. Weinberger, at a panel discussion at the Kennedy School of Government, said that the Soviets have concluded that holding Daniloff could “put in danger” disarmament agreements they seek. He said the Soviets had planted on Daniloff “crude documentation,” including old maps that bore a new security stamp.

In Santa Barbara, Speakes said the Administration has heard nothing officially from the Soviet Union about the Daniloff case. Some Administration officials had hoped that a decision would have been made at a meeting Thursday morning of the ruling Soviet Politburo.

“There is still some hope for some positive movement over the weekend,” an official said. “We have told the Soviets that if they don’t act soon, the thing could get a lot harder to solve. We have tried to point out to them that they have a hell of a lot to lose on this and not all that much to gain.”

In seeking means to increase the pressure on Moscow, the Administration was looking at a number of options, although no specific decisions were said to have been made.

With officials showing no inclination to let the incident damage the prospects for a summit conference of Reagan and Soviet leader Mikhail S. Gorbachev, Daniloff’s detention has already affected at least one U.S.-Soviet exchange and others could be postponed to demonstrate U.S. dissatisfaction with Soviet behavior.

James Gerstenzang reported from Santa Barbara and Doyle McManus from Washington.