ALBRIGHT RETURNS TO FALLEN EMBASSY; POW ISSUE STRESSED TO VIETNAMESE PEOPLE.

Byline: Steven Erlanger The New York Times

In an emotional ceremony in the courtyard of the last U.S. Embassy in South Vietnam, abandoned in April 1975 when the last helicopter took Ambassador Graham Martin from its roof, Secretary of State Madeleine Albright on Saturday laid the cornerstone for a new U.S. consulate.

``This will become the symbol and substance of America's first diplomatic presence here in a quarter-century,'' she said, delicately avoiding direct mention of the war that killed some 58,000 U.S. soldiers and about 3 million Vietnamese soldiers and civilians.

She is the first U.S. secretary of state to come here since the war, which ended when the communists captured this city, then called Saigon, as the U.S. ambassador fled. The new consulate, she said, symbolizes ``two peoples on a shared journey from tragic conflict to mutual respect.''

But for all her efforts to concentrate on the future of U.S.-Vietnamese relations - meeting U.S. businessmen and charitable organizations that help the Vietnamese - the war shadowed her visit.

While emphasizing the need for more economic and political reform in Vietnam and talking up U.S. investment, she was always careful to say that ``America's highest national priority'' remains an accounting for its 1,584 missing in action - of whom only 48 cases, of men last seen alive, are still being intensively investigated.

While the United States is spending about $3 million a year to aid the Vietnamese, it is spending at least $10 million a year trying to resolve the fate of the last of the missing Americans. Asked whether that proportion was just, Albright said carefully, ``I think one cannot discount the emotional importance of the POW-MIA issue for the American people.''

The need to reach the fullest possible accounting is important, she said, ``so the past can be put behind us.'' It is always difficult to assess where money is well spent, she said, and America needs to spend more overseas anyway - ``but the truth of the matter is that this is a deeply emotional issue for the American people.'' It is also a deeply political issue for Washington, even as the war itself fades as an active memory for most Americans.

Political opposition held up Ambassador Pete Peterson's confirmation to come here, despite his service as a Navy pilot and his incarceration for more than six years as a prisoner of war in what was called the ``Hanoi Hilton.''

And political opposition - ``maybe best described as ambivalence,'' a senior U.S. official said - nearly held up the Ho Chi Minh City consulate itself. Albright and Peterson wanted to lay the foundation stone during her visit here, but bureaucratically, it was necessary to shift State Department funds for that purpose.

Sen. Judd Gregg, R-N.H., chairman of the Appropriations subcommittee that controls State Department spending, had blocked the shifting of the funds, reflecting the conservative Republican concern that the Vietnamese are not doing enough to help the United States account for its missing.

But Peterson, a former congressman from Florida, reached Gregg on the telephone at a fishing camp, U.S. officials said, and demanded: ``What are you doing holding us up?'' Albright also lobbied him, and Gregg relented 10 days ago, allowing Saturday's ceremony to proceed.

``What has really moved me so deeply here,'' Albright said later, visiting a project that provides free prosthetic limbs and simple wheelchairs to Vietnamese crippled by land mines or polio, ``is that it's so very hard to get away from the past.''

``We all, whether American or Vietnamese, are never going to be fully able to put the past behind us,'' she said. ``But I've been deeply moved by the desire of people to look toward the future.''

``Symbolically there,'' she continued, ``in the shadow of the embassy we gave so much for, to lay a brick for an American consulate in Ho Chi Minh City - where Americans are very welcome,'' she said, breaking off. ``This morning was very symbolic of having the shadow of the past but being prepared to lay a foundation for the future.''

The Vietnamese, who have publicly welcomed a stabilizing U.S. role in Asia, seem very happy that the Americans are back. Watching Albright at the clinic help lift a young Vietnamese girl with polio into her new wheelchair, a Vietnamese Foreign Ministry official said, ``We have so many needy here. We're very glad the Americans are back, this time to help.''

Peterson, asked himself to comment, said softly: ``There's incredible psychological and physical pain on both sides. So both peoples must look to the past for lessons, but then carry them on to the future.''

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PHOTO Secretary of State Madeleine Albright, left, tours a children's hospital ward Saturday in Ho Chi Minh City.

Associated Press