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Secretary of State James A. Baker III has recommended razing all but the foundation of the nearly completed U.S. Embassy building in Moscow and build on top of it a new structure secure against electronic eavesdropping, State Department officials said Friday.

Baker's recommendation, which has been conveyed to the White House for a final decision by President Bush, essentially endorses the view that the eight-story office building cannot be saved because it is riddled with sophisticated eavesdropping devices.

President Reagan decided last October to ask Congress to authorize demolition of the fortress-like structure and construction of a new building on the site in central Moscow. "There's no way to rid it of the many listening devices that were built into it," Reagan said. "We have no choice" but to start over, he added.

Some lawmakers applauded Reagan's view, but others - especially the House Appropriations subcommittee on the State Department under Rep. Neal Smith, D-Iowa, - were appalled by the cost, which was estimated to be as high as $300 million, and the years of construction delay.