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2 NATIONS PLAN PRESIDENTIAL SUMMIT

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American and Chinese officials agreed Sunday to begin planning a fall presidential summit - signaling that China's release of human rights activist Harry Wu may have begun to repair months of deteriorating relations.

Undersecretary of State Peter Tarnoff said the two sides had agreed to discuss an agenda for a meeting between President Clinton and Chinese President Jiang Zemin in the United States in October.But Tarnoff, the highest-level U.S. official to visit China since relations began to sour in May, cautioned that much work needed to be done before such a meeting could be held.

China and the United States remain far apart on a number of issues that have plagued ties. Tarnoff said negotiators would discuss "a wide array" of topics in preparation for the meeting, but refused to elaborate.

China's government has been pushing for a Clinton-Jiang meeting since May, when ties faltered over a White House decision to let the Taiwanese president attend his college reunion in the United States.

Relations worsened for three months, but a quick succession of positive moves last week indicated that they might be improving.

China deported Wu, a naturalized American, on Thursday instead of making him serve a 15-year sentence for alleged espionage. On Friday, first lady Hillary Rodham Clinton said she would attend a U.N. women's conference in Beijing that begins on Wednesday.

"Not everything has been ironed out, but some of the momentum in terms of our relationship with the Chinese has been regained," Madeleine Albright, the U.S. ambassador to the United Nations, said on CBS's "Face the Nation."

As part of the preparations, Secretary of State Warren Christopher and Vice Premier Qian Qichen, who is also foreign minister, will meet at the United Nations in September.

Jiang, who in addition to being China's president is general secretary of the Communist Party, plans to be in New York in October at the U.N. General Assembly. But whether a summit would take place there or on a formal state visit to Washington had yet to be decided, Albright said.

U.S. Embassy spokesman Robert Laing said no final decision had been made on whether to hold the summit at all, and China's official Xinhua News Agency made no mention of it in a report on Tarnoff's meeting Sunday with Qian.

The issues addressed at the meeting, as listed by Tarnoff, catalog the differences that have buffeted ties: human rights, trade, nuclear proliferation and Taiwan.

Relations plummeted in May when the United States granted a visa to Taiwanese President Lee Teng-hui to attend the reunion at Cornell University. China views Taiwan as a renegade province and has sought to keep its government diplomatically isolated.

Beijing canceled a series of meetings with American officials, held two rounds of missile tests in waters north of Taiwan and published scathing editorials attacking Lee and the United States.

Wu's arrest in June fueled the climate of distrust.

By the time Tarnoff arrived in China on Thursday, Xinhua was describing relations as at their lowest point in 16 years of full diplomatic ties.

Tarnoff rejected suggestions that a Clinton-Jiang meeting or Mrs. Clinton's participation in the women's conference might be a payoff for the expulsion of Wu.

Sen. Dianne Feinstein, a California Democrat and a critic of China's human rights record, also insisted there had been no quid pro quo.

But on a recent visit to Beijing, she delivered a message from Clinton to Jiang, saying he would be "appreciative" of Wu's release and that he "did want to work with the president of China."

"I was told the morning of his release by an emissary from the president that he would be released," Feinstein said on "Face the Nation."

"I was also told that President Jiang Zemin is hopeful that he and President Clinton can sit down and chart the course of Sino-American relations into the next decade."