WE ARE SO accustomed to seeing Knowlton Nash read the news on the CBC that we forget he established his reputation as a foreign correspondent. Washington was his beat (from 1951 to 1969) and Canadian-American relations were his oyster. Nash was friends with an ambitious young U.S. senator, John F. Kennedy, who captured the imaginations of Canadians and Americans alike as he won the presidency. Nash also knew many of the key players in the Kennedy White House and the state department and in John Diefenbaker`s Ottawa, as what began as a cordial dislike between the two leaders hardened into hatred. This loathing damaged relations between the two countries so seriously that Diefenbaker was able to claim that Washington had conspired to overthrow his government -- and a good many Canadians believed him. "Kennedy," writes Nash, was rooted in hard realism, with a confidence bordering on arrogance; Diefenbaker was rooted in Canadian nationalism, with a fantasy life spilling into paranoia. In McLuhan terms, Kennedy was cool, Diefenbaker was hot. Kennedy and Diefenbaker is Nash`s fourth and best book. Drawing on personal experience, dozens of interviews, cabinet memos, and oral history tapes and transcripts from both capitals, he traces the tortuous negotiations on the issue of nuclear warheads for Canada`s Bomarc B missiles (acquired following cancellation of the Avro Arrow, the Bomarc`s warheads were armed with sand through the Diefenbaker years) and for Canadian warplanes at home and in Europe. Nash gives a fascinating look at how Diefenbaker`s inability to decide whether to accept nuclear weapons, and Kennedy`s profane impatience with the prime minister`s procrastination, poisoned the atmosphere between the two countries. In the end, following a Diefenbaker speech that Washington felt had grossly misrepresented the nuclear negotiations, the state department put out an extraordinary press release that denied the Diefenbaker version, in effect calling the prime minister a liar. The statement was released without Kennedy`s knowledge (it was approved by his aide McGeorge Bundy), but that made no difference. Nor did the White House`s attempts to apologize. That press release, on January 30, 1963, may have changed Canadian history. The beleaguered Diefenbaker, whose administration was collapsing, could scarcely believe his good fortune. He seized on the statement as proof positive of U.S. intervention in Canadian affairs. He wanted to call an immediate election on the issue, but could not persuade his cabinet to agree. At an extraordinary Sunday morning cabinet meeting in the prime ministerial dining room at 24 Sussex Drive, Diefenbaker`s opponents tried to force him to step down and become chief justice of the Supreme Court of Canada. They failed, some ministers (including Douglas Harkness, the minister of defence) resigned, and the Conservative government was defeated on a nonconfidence motion in the Commons. The 1963 election was a particularly vile one, as Diefenbaker rook his antiAmerican campaign to the people. The Liberals, led by Lester Pearson, a friend of Kennedy`s, were desperately afraid that Washington would add fuel to the Tory leader`s fury by criticizing Diefenbaker or, worse, by complimenting Pearson. Kennedy slapped a gag order on his people in response to entreaties from Pearson (relayed through such intermediaries as the Canadian journalists Max Freedman and Bruce Hutchison, as well as Lou Harris, the Democratic Party pollster who had been hired by the Liberals). Even so, Diefenbaker`s campaign against "them" -- powerful unseen forces, including Americans, the media, and Eastern businessmen, among others succeeded in denying the Liberals a majority government. Later, Pearson told Kennedy that the state department press release had probably cost him 50 seats; Kennedy gulped. Nash concludes that the release was "in effect, the instrument of an unintended coup d`etat" but that it may have cost Pearson his majority. "Without it, however, Diefenbaker might well have survived the crisis of late January and early February and avoided the election altogether. Thus it was truly a mixed blessing for Pearson." Kennedy and Diefenbaker is an excellent book for both Canadian and American readers. It is well researched, with a clear, tight focus. It takes the reader inside the councils of state to show how personal relations -- especially hatred -- at the highest levels can influence dealings between nations. Although Nash`s sympathies lie with Kennedy, he does not excuse the ignorance and insensitivity with which the young president approached Canada and its very peculiar prime minister. Years after Diefenbaker and Pearson were both gone, McGeorge Bundy told Nash: We have found Canadians good people to bargain with. They lack the insecurity which so often breeds misunderstanding and deception. Indeed, that is precisely why Diefenbaker was exceptional. It was our failure to understand how exceptional he was that led us to overreact.