A U.S. intelligence report from Oct. 30 said the Iranians were spotted working on a factory that is part of Libya's Al Fatah missile program. The Iranian assistance was provided by the Shahid Hemmet Industrial Group, a major component of Iran's government-run ballistic missile program.

The Iranian-Libyan cooperation is the latest sign Libya is moving ahead with upgrading its missiles, and that Iran is becoming a missile supplier, not just an importer.

The State Department last year protested China's sale of missile technology to Libya. The transfers were first reported in The Washington Times.

A Pentagon report on arms proliferation issued last month said Libya is "improving" its missiles since the suspension of U.N. economic sanctions in April 1999. The report said Tripoli has obtained missile goods from Serbia and India, and wants to acquire or build North Korea's 620-mile-range Nodong missile.

"Should Libya succeed with its effort to purchase or perhaps develop such a missile, the missile could threaten Egypt, Israel, NATO countries in southern Europe and U.S. forces in the Mediterranean region," the report said.

Bush's heroes
One of President Bush's best weapons to garner veterans' votes was the backing of recipients of the Medal of Honor, the nation's highest military award.

While the media focused on the retired generals and admirals who publicly supported Mr. Bush, 76 of the 150 living Medal of Honor winners endorsed his candidacy and more than 30 made public appearances on his behalf, including in the crucial primary state of South Carolina.

"They turned the tide there," says retired Marine Corps Gen. Ray Davis, one of the Medal of Honor recipients who invaded South Carolina. "They and the other veterans."

Rudi Gresham, a former Army Green Beret, was vice chairman of the Bush veterans outreach and coordinated the appearances of the war heroes across the country.

"It was an honor and a privilege to be with those guys," Mr. Gresham said. "You should have seen the Americans who came up to salute them."

He added, "This was the highest number of Medal of Honor recipients who ever participated in a presidential campaign, and most all of them felt they could not continue closing their eyes to what was happening to this country."

Mr. Gresham said he accompanied some of the heroes to Florida election boards when they opened overseas military ballots and heard challenges from Democratic attorneys. "We insisted that the military votes be counted," he said.

Gen. Davis, the nation's most decorated living four-star general, earned his medal during the Korean War's battle of Chosin Reservoir 50 years ago.

Then a lieutenant colonel, he led an 800-Marine battalion through enemy Chinese lines, then broke their hold on a mountain pass, saving the lives of thousands of civilians and U.S. troops. All was accomplished in bitter weather with a minus-50 wind chill factor while outnumbered 10-1.

"I heard not one complaint or beef out of these Marines because they were going to rescue other Marines," says Gen. Davis, who retired in 1972 after 34 years of service.

China pique
China's government is upset with the Bush administration over more than U.S. plans for missile defenses.

Bush officials tell us Beijing's immediate ire is aimed at the expected nomination of Jon Huntsman Jr. to be the next ambassador to China, and the appointment of Gerrit W. Gong as National Security Council staff China hand.

Mr. Huntsman, who speaks Chinese, is vice chairman of the Utah-based Huntsman Group and the son of billionaire chemicals magnate Jon Huntsman Sr. A former Commerce Department assistant secretary, the younger Mr. Huntsman was ambassador to Singapore in the first Bush administration.

Mr. Huntsman will replace retired Adm. Joseph Prueher, who asked to remain in the post past a March deadline for political appointees but was turned down, U.S. officials said.

Mr. Gong, a Center for Strategic and International Studies China expert, is viewed by the Chinese as a relatively weak policy coordinator who lacks the stature of past NSC China specialists. President Jimmy Carter's NSC China hand, Michel Oksenberg, remains a very influential pro-China voice.

President Clinton's NSC China aide, Kenneth Lieberthal, boasted recently that if he had been at the White House in December he would have blocked harsh references to China in a speech by Gen. Henry H. Shelton, chairman of the Joint Chiefs of Staff.

Chinese officials are said to be angered by these appointments because they view them as part of a broader Bush administration strategy of downgrading the importance of China.

However, there is a more subtle reason the Chinese oppose the two choices, we are told. Both are Mormons, as members of the Church of Jesus Christ of Latter-day Saints are known. Beijing sees the Huntsman and Gong appointments as a kind of covert effort to promote religious freedom in China and help Mormons proselytize there.

"This is an aggressive maneuver to push Mormon missionaries into China," one Chinese official recently told our informants.

Beijing is engaged in a ferocious campaign of religious repression aimed mostly at the spiritual group Falun Gong. In December, Chinese authorities in southern China bulldozed scores of buildings belonging to unofficial Christians as part of a crackdown.

A Bush administration official tried to explain to the Chinese that the two men's faith is only a coincidence and not strategic.

Two other NSC staffers are expected to be tough on China. New NSC proliferation specialist Robert Joseph has criticized China's arms sales to terrorist nations and unstable regions. Franklin Miller, a former Pentagon official and now the NSC's military expert, was instrumental in putting China back on the list of U.S. strategic nuclear targets in a recent revision of the Pentagon's Single Integrated Operating Plan, or SIOP.

Chinese Embassy spokesman Zhang Yuanyuan said he was aware of Taiwanese press reports of Mr. Huntsman's selection but had no official word on it.

Intercepts