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After hearing presentations from both the Edison Project and Education Alternatives Inc., Milwaukee public school officials have decided to pursue talks with the Edison Project about the private firm running some schools in the district.

A district committee considered Edison and E.A.I., the two major for-profit companies seeking public school partnerships nationwide, as part of a sweeping school-to-work initiative.

In a March 1 letter to E.A.I., Superintendent Howard Fuller said proposals presented by the Minneapolis-based firm do not "meet the school district's school-to-work objectives at this time.''

Mr. Fuller's letter to Benno C. Schmidt Jr., the president of the Edison Project, states that "immediate discussion related to financing, design of the school, grade design, legislative issues, and other matters must move forward with great haste.''

Denise Callaway, a district spokeswoman, said several questions had to be addressed before the school board would be presented with a formal proposal to contract with Edison.

Mr. Fuller told school board members that the discussions with Edison will proceed over the next few weeks. No decisions have been made about how many schools Edison might run or when the partnership would begin, officials said.

Indiana Strike Ends: A teacher strike in South Bend, Ind., that broke state law and prompted threats of harm against the district superintendent has ended with a tentative agreement on a contract with graduated pay increases for teachers.

The seven-day walkout, South Bend's first in 27 years, began last month after school officials and teachers' union representatives deadlocked over pay.

During the walkout, a superior-court judge fined the two unions representing the teachers a combined $200,000 for violating a restraining order to halt the strike, which was banned under Indiana law. Superintendent Virginia Calvin received four anonymous threats of "serious harm'' and was placed under police protection, according to Mary Ellen Hamer, a spokeswoman for the district.

The new contract, if ratified by union members, would increase teacher salaries by from 1 percent to 3 percent over each of the next three years.

Search Case Settled: The New Castle, Pa., school district has reached an out-of-court settlement in a case in which six junior high school boys said they had been strip-searched and improperly touched.

Terms of the settlement last month were not made public, but Dominick Motto, a lawyer for the district, said the settlement "wasn't anywhere near what was being sought'' by the plaintiffs. Published reports had put that amount at $50,000 for each of the six boys.

The settlement came during a trial to determine whether there should be damages awarded in the suit filed by the boys in federal court. They contended that their constitutional rights had been violated, a claim a judge earlier had upheld.

The searches occurred in December 1992 when administrators at Ben Franklin Junior High School suspected that the boys possessed illegal drugs. Disagreeing with the boys' account, school officials said that only three boys were asked to lower their pants; two others were told to remove their shoes and socks, and the sixth boy was not searched, the officials said.

No drugs were found during the search.

Since the incident, the district has formalized its strip-search policy, Mr. Motto said.

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