Huge Soviet Army to Be Broken Up : Commonwealth: Each republic can have its own conventional force. But the 11 agree to keep a unified command for nuclear weapons.

Leaders of the new Commonwealth of Independent States decided Monday to break up the 3.7 million-member Soviet armed forces, the world’s largest, allowing each state to have its own conventional military force.

But they agreed to retain a unified command, effectively headed by Russia, over the massive nuclear arsenal that the commonwealth inherited from the Soviet Union.

The decision required a full day of often heated discussion by the presidents and prime ministers of the commonwealth’s 11 member states. Their decision was the commonwealth’s first test of its ability to resolve a difficult issue and hold together.

“There were differences of opinion, but we found compromises,” Russian Federation President Boris N. Yeltsin said at the meeting’s end.

But the leaders failed to unite on a policy to cope with the economic disintegration, particularly the severe shortages of consumer goods, soaring inflation and spreading unemployment, that all of the former Soviet republics face. The leaders explained that they had simply run out of time.

The agreement that commonwealth members may have their own armed forces will significantly alter the military balance in Eastern Europe by dividing the Soviet armed forces, whose sheer size was long considered a threat by the West.

Although eight republics said they will retain united armed forces--at least for now--Ukraine, Azerbaijan and Moldova each declared its intention Monday to establish its own army. For Ukraine, the commonwealth’s largest member after Russia and now home to almost a third of the former Soviet forces, this may mean a 420,000-man army. It would be larger than that of Germany.

The discussions grew so heated at one point, according to accounts, that the acting commander of the joint forces, Air Marshal Yevgeny I. Shaposhnikov, the former Soviet defense minister, said he would resign if the forces were broken up.

Only at the last minute did the 11 leaders sign the treaty assuring each republic the right to raise its own armed forces, if it wished, and allowing two more months to work out details of the commonwealth’s conventional armed forces.

But Ukraine received the right to begin forming its own army immediately.

“As far as conventional armed forces are concerned, we confirmed the right of each state to decide this in accordance with its own laws,” Yeltsin told a press conference after the meeting. “All the others agreed to place their conventional armed forces under unified command.”

Yeltsin said he thought that the next three years should be used as a transition period for reducing and redeploying those former Soviet armed forces that will come under the joint commonwealth command. “It is too big an organism to be simply disbanded--this is impossible,” he said.

Discussions of the future of the strategic nuclear forces, which have an estimated 27,000 nuclear warheads, went more smoothly, said participants in the meeting in the snow-dusted Belarussian capital of Minsk.

Under the agreement on strategic nuclear forces, Yeltsin’s Russian Federation will have the dominant voice on using nuclear weapons. As Yeltsin explained the procedure, the four states with strategic nuclear weapons--Russia, Ukraine, Belarus and Kazakhstan--”consult, take a decision, and after this decision is taken, the president of Russia and the commander in chief of the unified strategic armed forces do all that is technically required.”

“But,” Yeltsin added, “may God not let that happen.”

Within the next five to six days, Yeltsin said, special communications lines will be installed for urgent consultations among the four nuclear commonwealth states. The agreement also requires consultations with other members before nuclear weapons are used.

Ukraine declared its intention to dismantle all nuclear weapons on its territory over the next three years--all tactical nuclear weapons by next July and the 176 intercontinental ballistic missiles based there by the end of 1994.

The Central Asian republic of Kazakhstan, which had hesitated at including nuclear weapons on its territory in a common arsenal under the Russian president’s command, agreed to the measure Monday but stressed its desire to become a non-nuclear state as quickly as possible.

The 11 leaders decided to keep Shaposhnikov as commonwealth military commander, controlling the nuclear arsenal and the combined conventional forces, for two months more, pending a final decision on the structure of its armed forces.

Discussions of military matters took up so much time that the leaders never got around to the economic coordination they must develop to alleviate the crisis besetting all the former Soviet republics.

Ukraine President Leonid M. Kravchuk complained that a sheer shortage of rubles, now issued by the Russian State Bank, has reached a point where the unified, ruble-based market that the former republics want was “turning into a fiction.” Ukraine has failed to pay millions of workers and pensioners because of the ruble shortage, and it, consequently, is bringing in its own scrip, or coupons, to substitute for cash this week when prices are raised as a part of the radical economic reforms that Yeltsin is pushing, Kravchuk said.

Despite the unresolved economic problems, the commonwealth appeared from its summit meeting Monday to be moving into a new phase since its formation more than three weeks ago, beginning to detail the vague linkage it wants to establish among the former Soviet republics. Leaders approved the rules for two coordinating bodies, the Council of Heads of States and the Council of Heads of Government. They will run the loosely structured commonwealth.

The first council, for the presidents of the member states, apparently will concentrate on major issues; the second, for prime ministers--who generally oversee economic affairs and day-to-day government functions--will focus on economics and other specific questions.

Yeltsin said there will be a council of defense ministers; commonwealth foreign ministers are to meet Jan. 10 in Minsk, the organization’s capital, to discuss coordinating foreign policy.

Ukraine blocked the planned signing of a charter for the group, arguing that this should come after all elements of the commonwealth have been agreed upon. “It is difficult to elaborate a long-term document in the transitional period,” Stanislav Shushkevich, the leader of Belarus and the host of the meeting, admitted. “The work of destroying some structures turns out to be considerably easier than that of creating (new) basic structures.”

The leaders did agree to work out an arrangement to share former Soviet assets abroad, which may include the re-examination of the Russian Federation’s moves to take over embassies. And they agreed to share the old first channel of Soviet television as a “commonwealth channel,” although Yeltsin had already appropriated it for Russia by decree.

Aside from the 15 agreements that commonwealth leaders approved, the most convincing sign that the group was beginning to coalesce came, ironically, in the descriptions of how stormy the meeting was. Yeltsin admitted the day had been a struggle.

“It can’t be that 11 heads of state and 11 heads of government in a commonwealth of absolutely independent states gather and, note for note, we all sing in the same key as it was for 74 years,” he said.