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DEMOS WILL DIG DEEPER INTO HOSTAGE-RELEASE ISSUE

House Democratic leaders have ordered aides to dig deeper into whether the 1980 Reagan-Bush campaign cut a deal with Iran to delay release of 52 American hostages, sources said Friday.

The leaders met privately on Thursday and decided to postpone any decision on whether to open a more formal inquiry - one that could swear witnesses and subpoena evidence - until after the Senate confirmation process for Robert Gates, President Bush's nominee to head the Central Intelligence Agency.There was no explanation for the move, but it could signal that lawmakers believe there is a possibility something relevant to their probe could come out of Gates' confirmation hearings, now tentatively set to follow Congress' July 4th recess.

ABC News reported late Thursday an allegation by Iranian arms dealer Jamshid Hashemi that the late William Casey, then Reagan's campaign manager and later CIA director, met in July and August of 1980 in Madrid with an Iranian cleric to make a deal delaying release of the hostages until after the election. Hashemi said he attended the meetings as an interpreter.

The White House on Friday declined direct comment on the latest allegation. Bush, who was Reagan's running mate, has previously denied any knowledge of "such an insidious plot."

Congressional sources said House Speaker Thomas Foley, Majority Leader Richard Gephardt and other senior Democrats met with aides who for nearly two months have been researching the alleged hostage deal.

After hearing a report on the effort, they directed the aides to re-interview Gary Sick, the former Carter administration official who revived the longstanding allegations in an April newspaper article, said the sources.