Reagan Rules Out Swap for Daniloff : Tells Moscow to Release Journalist or Risk ‘Major Obstacle’ to Relations

President Reagan, breaking his silence on the week-old detention of Nicholas Daniloff, on Monday ruled out a trade to obtain the freedom of the American reporter and warned the Soviet Union that the incident will become “a major obstacle to our relations” if it is not resolved quickly.

A senior Administration official said that Reagan adopted a hard-line position on the case after the U.S. government tried, without success, to give Moscow a face-saving option to end the stalemate.

Reagan had refrained from making any public statement about the detention of Daniloff, who was completing his tenure as the Moscow correspondent of U.S. News & World Report when he was seized in the Soviet capital on Aug. 30 by eight agents of the KGB, the Soviet secret police.

Top of U.S.-Soviet Agenda

But the President pushed the issue to the top of the U.S.-Soviet agenda Monday, inserting a toughly worded four-paragraph statement into a speech he delivered at a Republican Senate campaign appearance at Stapleton International Airport here on his way back to Washington after a three-week California vacation.

“Whatever the Soviet motive, whether it is to intimidate an enterprising journalist or to trade him for one of their spies that we have caught red-handed, this action violates the standards of civilized international behavior,” Reagan said.

“There will be no trade,” he said, demanding that Daniloff be freed with no further delay.

“Otherwise, there will be no way to prevent this incident from becoming a major obstacle in our relations,” Reagan said.

The Administration last week suggested a deal in which Gennady F. Zakharov, a Soviet physicist arrested on espionage charges in New York on Aug. 23, would be freed from jail and placed in the custody of Soviet diplomats pending trial in exchange for Daniloff’s unconditional release. The Soviets showed no interest in that proposal, apparently because it would not have prevented Zakharov, who is scheduled to appear at a preliminary hearing today in New York, from being brought to trial.

Daniloff Charges ‘Trumped Up’

U.S. officials said that the Soviets might have been willing to trade Daniloff for Zakharov if both men were allowed to go free, but the United States rejected that because, the officials said, there was clear evidence of espionage on the part of Zakharov while the charges against Daniloff were, as one said, “trumped up . . . a frame-up.”

Reagan’s comments, following similar remarks by Secretary of State George P. Shultz on Friday, seemed to end any possibility of a Zakharov-Daniloff deal. Nevertheless, Administration officials said that Washington hopes to find a solution that would allow the Soviets to back down without humiliation. But if that failed, they said, the Administration would retaliate in some way.

A broad list of measures, ranging from reduction of cultural exchanges to cancellation of this year’s summit meeting between Reagan and Soviet leader Mikhail S. Gorbachev, is under consideration. Also a possibility is expulsion of Soviet diplomats and employees at the United Nations.

A senior Administration official said that Reagan decided to speak out personally on the case only after giving “the Soviets enough time to get themselves out of a bind--if they were in a bind--on the matter.

“Regardless of how the whole thing came about, whether it was a misjudgment on the Soviets’ part or whether the KGB was running with the ball beyond its franchise, the Soviet leadership is now backing the arrest of Daniloff,” the official said. “And that means the Soviets have dug in their heels and plan to proceed with the trial.”

Speaking in an airplane hangar, Reagan told his audience at a fund-raising luncheon for Rep. Ken Kramer (R-Colo.), the GOP Senate candidate here, that “the continuing Soviet detention of an innocent American is an outrage.”

‘Serious Consequences’

“Through several channels, we’ve made our position clear--the Soviet Union is aware of how serious the consequences will be for our relations if Nick Daniloff is not set free,” Reagan said, to applause.

“I call upon the Soviet authorities to act responsibly and quickly so that our two countries can make progress on the many other issues on our agenda, solving existing problems instead of creating new ones,” he added.

Aboard the President’s airplane on the flight to Denver, White House spokesman Larry Speakes said there had been no formal notification from Soviet authorities that Daniloff has been charged with espionage. However, Soviet television announced Sunday that charges have been filed, and Soviet Foreign Ministry spokesman Gennady I. Gerasimov said in an interview on a CBS news program that “there is going to be a trial.”

Speakes said there has been no change in diplomatic meetings scheduled to take place between U.S. and Soviet officials, including a conference of Shultz and Soviet Foreign Minister Eduard A. Shevardnadze on Sept. 19-20. That session is intended to pave the way for a summit conference of Reagan and Gorbachev later this year.

Accompanying Reagan back to Washington, Speakes refused to discuss options available to the United States in dealing with the Daniloff case.

“This is a serious matter. We’ve indicated that it will not be business as usual with the Soviets,” he said, vowing that the United States will raise the issue “in every appropriate forum in which we meet the Soviets.”

State Department spokesman Bernard Kalb implied that the Shultz-Shevardnadze meeting will either be canceled or turned into a forum on the Daniloff case if the reporter is not released soon.

Focus on Daniloff

“Assuming that the meeting takes place, there is no doubt in my mind that the Daniloff case will be a primary focus,” Kalb said.

Despite the comments by Shultz on Friday and Reagan on Monday ruling out a trade for Daniloff, Administration hard-liners remained concerned that such a deal might ultimately be struck.

One official said that a swap “would set a terrible, terrible precedent” and that “not one journalist or United States citizen would be safe (in the Soviet Union) in the future” because they would all be potential trading stock in the event the United States apprehended a Soviet spy.

James Gerstenzang reported from Denver and Norman Kempster reported from Washington. Staff writer Michael Wines in Washington also contributed to this story.