Embassy Activities Thwarted by Moscow

WASHINGTON--The Reagan administration acknowledged yesterday that restrictions imposed on the U.S. Embassy in Moscow would limit "our ability to monitor what happens" in the Soviet Union.

But the administration decided not to retaliate for the expulsion of five more American diplomats and urged the Soviets to "put behind us" a dispute over diplomats and spies.

Declaring a cease-fire, Chares E. Redman, the State Department spokesman, said, "We need now to get on with resolution of the larger issues affecting U.S.-Soviet relations and build on the progress made in discussions at Reyjkavik."

The Soviets have expelled 10 American diplomats in a week and withdrawn 260 Russians who worked as cooks, maids, drivers and perform other duties in the embassy and at the U.S. consulate in Leningrad.

"There will have to be some fairly substantial changes in our staffing pattern," Redman said. He referred to the fact that the 251 U.S. diplomats either will take on the work in addition to their duties or that some will be replaced by American workers.

"But I'm confident," the U.S. official said, "that the dedicated U.S. personnel at our missions in the Soviet Union will continue to perform effectively."

The Soviets took the actions in response to the U.S. expulsion of 80 Soviets in Washington, New York and San Franciso. An administration official, who demanded anonymity, said Wednesday night the expulsion "decapitated" a Soviet spy operation.

The Soviets also retaliated by imposing stiffer visas and other restrictions on Americans who work temporarily in Moscow, such as on construction of the new U.S. Embassy there.

Redman said similar curbs would be put on Russian laborers here.

The U.S. official said the two governments had evidently accepted the concept of "parity" in their diplomatic complements and should move on to arms control and other issues pursued by President Reagan and Mikhail S. Gorbachev, the Soviet leader, at the Iceland summit two weeks ago.

Adm. John Poindexter, Reagan's national security adviser, said yesterday the expulsions have run their course.

"We made our point. We are down to parity," Poindexter, who was accompanying Reagan on a political trip to Wisconsin, said.

As Reagan boarded his plane in Milwaukee, reporters asked whether the war of expulsions had ended. The president just shrugged his shoulders and got on board.

Redman stressed that Reagan stands by his arms reduction proposals. "Translating those proposals into specific negotiating instructions is a complex process." he said. "A decision on how best to table such sweeping proposals is a tactical negotiating one."

Gorbachev on Wednesday decried the U.S. expulsions as "a provocation," while saying he still saw hope for an arms agreement growing out of the Reykjavik summit.

Presidential spokesman Larry Speakes ignored the Soviet leader's criticism and focused on Gorbachev's assertions of good will.

"We believe an historic breakthrough occurred in Reykjavik and there is no turning back," Speakes said. "For the first time, there is serious discussion of arms reductions rather than arms control."