Daniloff, Russian Released to Envoys : U.S. Newsman, Spy Suspect Removed From Jail, but Both Still Face Trial

American reporter Nicholas Daniloff was released to the U.S. Embassy here, and an accused Soviet spy was turned over to Soviet diplomats in New York on Friday under an arrangement that eases--but does not end--a major standoff between the superpowers.

Daniloff, the first American correspondent imprisoned in the Soviet Union in 40 years, and accused Soviet spy Gennady F. Zakharov cannot return to their homelands, and still face the prospect of espionage trials under the deal worked out by U.S. and Soviet diplomats and approved at the highest levels of both governments.

“I’m not a free man today, but I’ve changed one hotel for a much better hotel,” Daniloff, 52, the Moscow correspondent for U.S. News & World Report, declared as he left Moscow’s Lefortovo prison in a U.S. Embassy limousine flying an American flag. Daniloff was placed in the custody of U. S. Ambassador Arthur A. Hartman, but is free to return to the Moscow apartment he and his family inhabited for 5 1/2 years. However, he must report to the KGB by telephone daily.

U.N. Employee

Zakharov, 39, a physicist employed by the United Nations who was accused of buying classified jet engine blueprints from an FBI informant, was placed in the custody of the Soviet ambassador to Washington, Yuri V. Dubinin. Indicted earlier this week on three counts of espionage, Zakharov, who lived with his family in the Bronx, must remain in the New York area until his trial.

In Washington, Secretary of State George P. Shultz called the release of Daniloff and Zakharov to their respective ambassadors “an interim step” that the Administration agreed to take primarily out of humanitarian concern for Daniloff. Shultz insisted that the twin releases were not a trade and that “the only thing that has changed is the location of these two people.”

Shultz appeared in a packed White House briefing room to announce the development and to defend the Reagan Administration against charges that it had given in to Soviet demands that Daniloff and Zakharov be treated identically.

“There is no equivalency,” Shultz said. “We have had in mind the situation of Mr. Daniloff in a prison cell, and we think he’s a lot better off with his friends and his wife than he is in that cell.”

President Reagan, meeting with elementary school principals in the Rose Garden, referred to Daniloff as “our hostage in Moscow” and to Zakharov as “the Soviet spy.” He added that he was “relieved and happy” that the American journalist--who suffers from high blood pressure--was “out of that 8-by-10-foot cell . . . and won’t be subjected to four hours of interrogation every day.”

Problem of Leaving Moscow

The Administration, which has insisted that Daniloff was arrested Aug. 30 only in retaliation for the arrest the week before of Zakharov, now faces the problem of getting Daniloff out of Moscow. Shultz and other officials have vowed to raise the issue in every forum, but it is far from clear whether the Soviets will let Daniloff leave without standing trial.

Shultz told reporters that the conditions of Daniloff’s release included a U.S. commitment that, if the newsman is asked to appear in court, he will do so--the same guarantee that the Soviets gave with regard to Zakharov.

When asked why this interim step could not be considered a trade, Shultz called it “an arrangement” that was made with the Soviet Union “because we feel for Mr. Daniloff, and we think that he’s better off where he’s going to be than where he has been. However, the basic situation has not changed.”

Shultz added that the Administration had consulted with Daniloff before agreeing to the arrangement and that “it was not undertaken without his assent.”

Shultz said that he planned to go ahead with a meeting Sept. 19-20 in New York with Soviet Foreign Minister Eduard A. Shevardnadze to prepare for a summit between Soviet leader Mikhail S. Gorbachev and Reagan.

Would Dominate Agenda

If the Daniloff case has not been resolved by then, he promised it would dominate the agenda. “We feel that it’s important to keep registering our point of view, not to walk away and stop talking about it,” he said.

Shultz also gave his blessing to the attendance by several top U.S. officials, including representatives of the Pentagon and the National Security Council, and influential private citizens at a cultural exchange next week in Riga, Latvia, explaining that it was another opportunity for Americans to get across their point of view “and why we consider this (case) so outrageous and damaging.”

Shultz warned that the Reagan-Gorbachev summit would be jeopardized if Daniloff is detained much longer.

The diplomatic agreement that led to the release of the two men was actually suggested by Daniloff, who had urged the importance of a “cooling-off period” in the increasingly hot exchanges between Washington and Moscow over his fate.

One Western diplomat in Moscow said the parity in treatment of Daniloff and Zakharov at this stage has provided Moscow with a face-saving way out of a crisis that threatened to derail Soviet-American relations across the board.

Eventually, the diplomat speculated, the Kremlin can expel Daniloff--before or after a spy trial--and then arrange another exchange to bring Zakharov back to the Soviet Union.

Sheer Ecstasy

For Daniloff, leaving the dreaded Lefortovo prison seemed sheer ecstasy. He shouted with joy as he emerged from the long embassy Cadillac that drove him through the prison gates. He asked for the car to stop when he spotted the Western correspondents assembled a short distance away, then thrust both arms upward in a giant “V” sign. He said he felt “terrific! terrific!” and correspondents greeted him with a cheer.

British-born Ruth Daniloff, 51, his wife, was shiny-eyed and almost speechless after her two-week ordeal as his spokesman. “I’m delighted,” she repeated. “I am so glad he is out of that place.”

Daniloff again declared his innocence of the three charges formally filed against him by Soviet officials last weekend and said he had never worked for any intelligence agency of any country.

A descendant of an aristocratic Russian family, Daniloff had served as U.S. News & World Report’s correspondent here. He was arrested Aug. 30 by the KGB after he accepted a parcel from a Soviet acquaintance named Misha as they walked in a Moscow park.

Daniloff, who was due to return to the United States this month, gave Misha some Stephen King novels as a farewell present, and then Misha thrust an envelope at him. Eight KGB agents stepped forward to arrest the American.

Alleged Secret Material

The KGB said the parcel contained military maps, marked secret, and photographs of Soviet military installations.

Following Daniloff’s arrest, U.S. officials said they believed that the reporter was selected for a KGB set-up to provide the Soviet side with an American who had no diplomatic immunity and could be traded for Zakharov.

A Soviet source with KGB connections suggested that the mysterious Misha was used by the secret police to contact Daniloff and hand him incriminating material. Noting that the FBI had been using an informant to keep tabs on Zakharov, the source said: “Now you Americans know how it feels to be entrapped.”

Officially, the Soviet Union labeled Daniloff a run-of-the-mill spy who was caught red-handed and insisted he was not a target of retaliation.

In the first few days following his arrest, some senior Soviet officials said that an early resolution of the case was imperative or else it would imperil the summit and other moves to improve Soviet-American relations.

Release Demanded

American officials said they were willing to release Zakharov to the Soviet ambassador’s custody, pending his trial but demanded Daniloff’s unconditional release and return to the United States. The Soviets never responded to that offer.

After the Soviet authorities went through with a formal indictment, both the Senate and House adopted unanimous resolutions calling for Daniloff’s freedom, and Shultz warned that his continued detention could endanger U.S.-Soviet relations.

Intensive diplomatic negotiations then began in Washington and Moscow. Richard E. Combs Jr., acting head of the U.S. Embassy in the absence of Ambassador Hartman, conferred almost daily with Alexander A. Bessmertnyk, a deputy foreign minister who deals with U.S. matters.

President Reagan wrote to Gorbachev, vouching for Daniloff’s innocence and requesting his immediate freedom. On Wednesday night, the President revealed that he had had a response from Gorbachev--but did not elaborate.

It is still not clear whether that exchange broke the impasse, but it is widely assumed that both leaders considered a superpower summit too important to be blocked by a controversy over two alleged spies.

Finally, when the correspondent said from prison that releasing him and Zakharov to ambassadorial custody would be a good first step, and reported that his KGB interrogators had endorsed the plan, the solution seemed at hand. Some reports have suggested that the plan, though presented as Daniloff’s idea, was put forth by the KGB.

Politburo Probably Approved

Negotiations continued throughout Thursday when a deal apparently was made. The ruling Politburo, which usually meets on Thursday, probably approved the custody arrangements, Western diplomats said.

As Daniloff left prison, he thanked Reagan and Gorbachev for their “wisdom” in seeing that the outcry over his case could undermine serious discussions now under way between the superpowers. He also said both leaders understood that “this was a very unworthy incident which should be liquidated so that more important business can go ahead.”

Under the terms of his release, Daniloff must remain within the Moscow district boundaries, telephone daily to his KGB interrogator and make himself available for further questioning if the KGB decides it is necessary.

Daniloff said the investigation of his case was not finished and apparently there are restrictions about what he can say publicly concerning the detailed charges against him.

As if the extremely rigid border controls were not enough to assure that he remains in the Soviet Union, Daniloff was required to turn over his passport to Soviet authorities as an additional guarantee that he will not leave the country.

Tass, the official news agency, reported that the releases of Daniloff and Zakharov were simultaneous and by mutual agreement. It was the first time the Soviet media had mentioned Zakharov’s arrest but there was no acknowledgement that he was accused of spying.

In Washington, David R. Gergen, editor of U.S. News & World Report, implicitly disputed Shultz’s interpretation of Friday’s deal, saying that until now the two cases had been handled “in a very parallel fashion” by U.S. and Soviet negotiators.

“There’s been a mirror-image approach so far,” Gergen said. “We are very anxious to smash that mirror. Nick Daniloff should be released on his own.”

Times staff writer Eleanor Clift, in Washington, contributed to this article.