Breakthrough hinted in hostage situation

A breakthrough is possible in the hostage crisis before President Carter leaves office, a diplomatic source close to the negotiations said. The source, who last week was pessimistic about the many legal problems that remained said," I think you will have good news." But diplomats in Tehran still warned against any quick solution despite an apparent increased will on the Iranian side to get rid of the issue before Ronald Reagan takes office.

Meanwhile, Iran and Iraq both claimed big victories after four days of heavy fighting in the Persian Gulf war. No independent accounts were available, but diplomats in Baghdad, Iraq, said Iran had put units of its regular Army into battle for almost the first time in the fourt-month-old war. Iraq termed the Iran counter-offens ive a fiasco.