Terms for FBI Chief’s Quitting Are Unresolved : Negotiations: Sessions reportedly indicated he was willing to resign. But his conditions were not acceptable to the Justice Department, sources say.

WASHINGTON — Embattled FBI Director William S. Sessions on Thursday indicated his willingess to step down but only under conditions that Justice Department officials found unacceptable, sources close to negotiations on the matter said.

After a morning meeting that lasted about an hour between Atty. Gen. Janet Reno and Sessions, who was not accompanied by his lawyers or his FBI security detail, Carl Stern, Reno’s chief spokesman, would say only: “He’s still the FBI director.”

But other officials said they expect the matter of his future, which Reno pledged to give top priority when she took office in March, to be settled next week.

One condition that Sessions sought Thursday would affect Deputy FBI Director Floyd I. Clarke, whom Sessions’ wife, Alice, has accused of plotting to force her husband from office, one source said. This source declined to elaborate, but another said Sessions had not insisted that Clarke, who would likely be named acting director, also leave the bureau.

After the meeting, Sessions, who was found to have abused his office by an internal Justice Department watchdog unit, flew to San Francisco where he will make a speech today. He took a commercial flight because the department earlier had ruled out his use of an FBI jet for the trip. Sessions’ use of the FBI aircraft is an issue raised by the watchdog unit’s report.

Asked by reporters Thursday in San Francisco if he plans to resign, Sessions said “no.”

After his speech today on health care fraud to the Commonwealth Club, Sessions will make a speech in Montana before returning to Washington on Sunday.

Sessions, who is in the sixth year of a 10-year term as FBI director, can be removed at any time by the President. At the White House, Press Secretary Dee Dee Myers said that President Clinton “continues to wait for a report from the attorney general on the status of Judge Sessions.”

There had been no contact for about a week between Sessions or his lawyers and Deputy Atty. Gen. Philip B. Heymann, who has been asked by Reno to handle negotiations on Sessions’ future. “The ball was left in Sessions’ court,” one source said.

Reno last discussed the matter briefly with Sessions on May 21, Justice Department officials said.

When the negotiations with Heymann began earlier this month, issues revolved around Sessions’ pension and his insistence that his departure not be linked to the scathing report on his conduct in office by the Office of Professional Responsibility.

If Sessions remains as director for the rest of 1993, his annual retirement income would be more than $5,000 higher than if he bows out now, according to FBI calculations. Under one scenario, Sessions would have stepped down and accepted a lesser, temporary assignment that would have kept him on the payroll through December, assuring him of the higher pension.

But government sources discounted any likelihood that Sessions would be offered another position.

Going along with Sessions’ insistence that his departure not be tied to the report’s criticisms, which he contends are flawed, could call into question Reno’s confidence in the watchdog unit, which operates as an arm of her office.

The report found that Sessions had engaged in a “sham” to avoid paying taxes on the use of his limousine to and from home and that he scheduled out-of-town meetings and other FBI business in a way that would allow him to visit family members at government expense.

The report also found that Sessions had refused to cooperate with an inquiry to determine whether he received a “sweetheart” deal on his home mortgage because of his position and that he improperly billed the FBI for a $10,000 fence around his home.

In her latest criticism of Clarke, Sessions’ wife, Alice, charged in an interview with her hometown newspaper, the San Antonio Express-News, that her husband has been targeted for overthrow by a small group of veteran FBI officials who resent taking orders from someone they consider an outsider. She said that Clarke, the bureau’s No. 2 official who is responsible for the day-to-day operations of the agency, is prominent among those who want to force her husband out.

Times staff writer Jenifer Warren in San Francisco contributed to this story.