FRANKLIN TEMPLETON INTERNATIONAL TRUST, N-30D, 1998-07-10

FRANKLIN TEMPLETON INTERNATIONAL TRUST
N-30D, 1998-07-10

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SEMI
ANNUAL
REPORT

April 30, 1998

Franklin Templeton
International Trust

Templeton Pacific Growth Fund
Templeton Foreign Smaller Companies Fund

Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective, and to expect that mixed in with the good
years can be some bad years. It's important to remember that all securities
markets move both up and down, as do mutual fund share prices. We appreciate
your past support and look forward to serving your investment needs in the years
ahead.

Rupert H. Johnson, Jr.
President
Franklin Templeton
International Trust

CONTENTS

Shareholder Letter ............................................. 1
Fund Reports
Templeton Pacific
Growth Fund .................................................... 3
Templeton Foreign Smaller
Companies Fund ................................................. 12
Financial Highlights &
Statement of Investments ....................................... 21
Financial Statements ........................................... 36
Notes to
Financial Statements ........................................... 40

LETTER TO SHAREHOLDERS

Dear Shareholder:

While we are pleased to bring you this semi-annual report for the Franklin
Templeton International Trust, which covers the six months ended April 30, 1998,
we are not happy with the events that occurred in Pacific Rim countries nor with
the resulting lackluster investment returns of that area of the world. The Trust
consists of Templeton Pacific Growth Fund and Templeton Foreign Smaller
Companies Fund.

During the six-month period, European stock markets generally performed well.
The Morgan Stanley Capital International(R) (MSCI) Pacific Index,
representative of equity markets in six countries in that region, returned
- -8.54%, while the MSCI Europe, Australasia, Far East Index, which tracks the
equity markets of 18 nations, reported a total return of 15.59% for the
reporting period.* Investors' concerns about the Asian currency crisis
contributed to dramatic declines in many equity markets during the reporting
period. Several markets rebounded in early 1998, but, by April 30, 1998, many
were still down more than 40% from levels a year earlier.

*Source: Standard & Poor's Micropal. Market returns are measured in U.S. dollars
and include reinvested dividends. An index is an unmanaged group of securities
that is used to measure market performance. One cannot invest directly in an
index.

While such volatility can be unsettling, and past performance cannot predict
future results, it is important to remember that securities markets have always
fluctuated. However, over the long term, stocks have provided impressive
results, and we urge you to focus on achieving your long-term investment goals
rather than concentrating on short-term market cycles.

On the following pages, you will find detailed discussions about Templeton
Pacific Growth Fund and Templeton Foreign Smaller Companies Fund. Although the
Funds have different investment objectives and strategies, their managers share
a dedication to the principles of careful stock selection, broad
diversification, and constant professional supervision. For specific information
about the Funds, including how market conditions and management strategies have
affected their performance, please refer to the Funds' reports following this
letter.

We thank you for your continued support, welcome your questions, and look
forward to serving your investment needs in the years to come.

Sincerely,

Rupert H. Johnson, Jr.
President
Franklin Templeton International Trust

TEMPLETON PACIFIC GROWTH FUND
Your Fund's Objective: Templeton Pacific Growth Fund seeks to provide long-term
capital growth by investing primarily in equity securities that trade on Pacific
Rim markets, as defined in the Fund's prospectus, and are issued by companies
that have their principal activities in the Pacific Rim.

During the first part of the six months under review, the economies of many
Pacific Rim countries unraveled due to a currency crisis that began in Southeast
Asia and soon impacted equity markets throughout the region. However, during the
latter part of the reporting period, many Asian securities markets rallied as
some governments there made considerable strides in improving the fundamental
economic outlook for their countries. Thailand's equity market led this rebound
with a 49.88% total return for the first quarter of 1998. The Korean and
Philippine markets followed, returning 48.29% and 24.97%, respectively, during
the same three month period.1 Within this environment, Templeton Pacific Growth
Fund - Class I provided a -16.02% cumulative total return for the six-month
period ended April 30, 1998, as discussed in the Performance Summary on page 7.
This negative return was largely due to the turbulence in Pacific Rim equity
markets during 1997. During the latter half of the reporting period, the Fund's
performance improved significantly, providing a +4.18% cumulative total return
for the three months ended April 30, 1998.

1. Source: Bloomberg. Market returns are measured in U.S. dollars and include
reinvested dividends.

You will find a complete listing of the Fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 24 of
this report.

GRAPHIC MATERIAL 1 OMITTED - SEE APPENDIX AT END OF DOCUMENT

Hong Kong and Singapore's economies were among the region's strongest and we
increased our exposure there by adding to our position in Hong Kong Ferry
Holdings Co. Ltd. and initiating positions in Johnson Electric Holdings Ltd. and
Smartone Telecommunications Holdings Ltd. We also increased our Japanese
exposure by purchasing securities of companies we believed had hidden value or
strong long-term earnings potential. Because we are optimistic about the
country's advanced technological base and its government's reform efforts, we
added to our positions in Matsuzakaya Co. Ltd. and Toei Co. Ltd., and initiated
a position in Okumura Corp.

Indonesia appeared to be the first country to emerge from the economic turmoil
in Asia, but President Suharto's slow implementation of International Monetary
Fund lending requirements shook investors' confidence in the market. We have
therefore been very careful in expanding our Indonesian exposure, adding only to
positions in companies we believe may benefit from the rupiah's devaluation
against the U.S. dollar. We were also selective about new investments in China
because its economy slowed due to the economic weakness of Japan, its largest
trading partner. At the time of this writing, a new government in Indonesia
appears to be discussing more enlightened reform proposals.

Taking advantage of the strong rally in Thailand's equity market in the first
quarter of 1998, we sold some of our Thai holdings. In Malaysia, we remained on
the sidelines, especially during the last half of the reporting period, as the
potential for a decline in real estate prices and slowness in completing banking
mergers negatively impacted the equity market there. However, we increased our
exposure to Australian equities because of a decline in commodity prices there.

Looking forward, we believe that recovery in Asian economies is likely to
proceed at a relatively slow pace. Although some investors had hoped that the
regional currency weaknesses would increase export competitiveness in the
region, the high price of imported goods has significantly undercut the cost
advantage in many industries. And Japan's weak economy could dampen economic
recovery of the region's other countries, since it is a major trading partner
for many of them. However, several Asian governments are moving to ensure
increased disclosure of financial information among publicly listed companies,
and some are pressing for reforms that would force insolvent financial
institutions into bankruptcy. In addition, a number of governments have
introduced legislation to increase foreign ownership limits, or have been
discussing it seriously. And we are encouraged by the new, more financially
savvy regime in China, particularly as pressure mounts for the government to
reform its state-owned companies. In our opinion, investment opportunities in
Asia have considerably broadened. But, since we believe that Asia's economic
recovery may take longer than is often portrayed in the public media, we will
continue to make our investments in the region cautiously.

GRAPHIC MATERIAL 2 OMITTED - SEE APPENDIX AT END OF DOCUMENT
GRAPHIC MATERIAL 3 OMITTED - SEE APPENDIX AT END OF DOCUMENT

Of course, there are special risks involved with investing in a portfolio of
securities concentrated in a single geographic region that also contains
emerging markets. These risks include market and currency volatility, economic,
social, and political uncertainty, and in some cases the relatively small size
and lesser liquidity of these markets. Investing in any emerging market means
accepting a certain amount of volatility and, in some cases, severe market
corrections. While short-term volatility can be disconcerting, declines of as
much as 40% to 50% are not unusual in emerging markets. For example, the Hong
Kong equity market has increased +1,056% in the last 15 years, but has suffered
five quarterly declines of more than 20% during that time.2

2. Source: Bloomberg. Based on quarterly percentage price changes over the 15
years ended March 31, 1998. Market returns are measured in U.S. dollars.

Please remember, this discussion reflects our views, opinions and portfolio
holdings as of April 30, 1998, the end of the reporting period. However, market
and economic conditions are changing constantly, which can be expected to affect
our strategies and the Fund's portfolio composition. Although historic
performance is no guarantee of future results, these insights may help you
understand our investment and management philosophy.

PERFORMANCE SUMMARY

Class I

Templeton Pacific Growth Fund - Class I produced a -16.02% cumulative total
return for the six-month period ended April 30, 1998. Cumulative total return
measures the change in value of an investment, assuming reinvestment of
dividends and capital gains, if any, and does not include the sales charge.
However, we have always maintained a long-term perspective when managing the
Fund, and we encourage shareholders to view their investments in a similar
manner.

The Fund's Class I share price, as measured by net asset value, decreased $1.91,
from $10.88 on October 31, 1997, to $8.97 on April 30, 1998. During the
reporting period, shareholders received per-share distributions of 10.5 cents
($0.1050) in dividend income and 6.5 cents ($0.0650) in long-term capital gains.
Distributions will vary depending on income earned by the Fund and any profits
realized from the sale of securities in the portfolio, as well as the level of
the Fund's operating expenses.

Templeton Pacific Growth Fund - Class I
Periods ended 4/30/98

Since
Inception

1-Year 3-Year 5-Year (9/20/91)
Cumulative Total Return1 -35.86% -27.93% -8.99% 10.64%
Average Annual Total Return2 -39.55% -12.10% -3.02% 0.64%
Value of $10,000 Investment3 $6,045 $6,793 $8,579 $10,427

4/30/94 4/30/95 4/30/96 4/30/97 4/30/98
One-Year Total Return4 30.07% -2.91% 18.39% -5.08% -35.86%

1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include the sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and has been restated to include the
current maximum 5.75% initial sales charge.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and have been restated to include the current
maximum 5.75% initial sales charge.
4. One-year total return represents the change in value of an investment over
the periods ended on the dates indicated and does not include the sales charge.
Note: Prior to January 1, 1997, Fund shares were offered at a lower initial
sales charge. Thus, actual returns for investors who paid this lower charge
would have been higher. On July 1, 1993, the Fund implemented a Rule 12b-1 plan,
which affects subsequent performance. All calculations assume reinvestment of
dividends and capital gains at net asset value. Past expense waivers by the
Fund's manager increased the Fund's total returns. Without these waivers, the
Fund's total returns for Class I shares would have been lower.

Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the economic,
social and political climates of countries where investments are made. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares.

Class II

Templeton Pacific Growth Fund - Class II produced a cumulative total return of
- -15.97% for the six-month period ended April 30, 1998. Cumulative total return
measures the change in value of an investment, assuming reinvestment of
dividends and capital gains, if any, and does not include sales charges.

The Fund's Class II share price, as measured by net asset value, decreased
$1.88, from $10.81 on October 31, 1997, to $8.93 on April 30, 1998. During the
reporting period, shareholders received per-share distributions of 9.08 cents
($0.0908) in dividend income and 6.5 cents ($0.0650) in long-term capital gains.
Distributions will vary depending on income earned by the Fund and any profits
realized from the sale of securities in the portfolio, as well as the level of
the Fund's operating expenses.

Templeton Pacific Growth Fund - Class II
Periods ended 4/30/98

Since
Inception

1-Year (1/1/97)
Cumulative Total Return1 -36.05% -39.73%
Average Annual Total Return2 -37.66% -33.11%
Value of $10,000 Investment3 $6,234 $5,867

1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the 1.0% initial sales
charge and 1.0% contingent deferred sales charge applicable to shares redeemed
within 18 months of investment.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include sales charges.
All calculations include reinvestment of dividends and capital gains at net
asset value. Since markets can go down as well as up, investment return and
principal value will fluctuate with market conditions, currency volatility and
the economic, social and political climates of countries where investments are
made. Emerging markets involve heightened risks related to the same factors, in
addition to those associated with their relatively small size and lesser
liquidity. You may have a gain or loss when you sell your shares.

Advisor Class

Templeton Pacific Growth Fund - Advisor Class produced a -15.52% cumulative
total return for the six-month period ended April 30, 1998. Cumulative total
return measures the change in value of an investment, assuming reinvestment of
dividends and capital gains, if any.

The Fund's Advisor Class share price, as measured by net asset value, decreased
$1.87, from $10.88 on October 31, 1997, to $9.01 on April 30, 1998. During the
reporting period, shareholders received per-share distributions of 11.88 cents
($0.1188) in dividend income and 6.5 cents ($0.0650) in long-term capital gains.
Distributions will vary depending on income earned by the Fund and any profits
realized from the sale of securities in the portfolio, as well as the level of
the Fund's operating expenses.

Templeton Pacific Growth Fund - Advisor Class
Periods ended 4/30/98

Since
Inception
of the Fund

1-Year* 3-Year* 5-Year* (9/20/91)*

Cumulative Total Return1 -35.50% -27.46% -8.40% 11.36%

Average Annual Total Return1 -35.50% -10.15% -1.74% 1.64%

Value of $10,000 Investment2,* $6,450 $7,254 $9,160 $11,136

4/30/94 4/30/95 4/30/96 4/30/97 4/30/98

One-Year Total Return3,* 30.07% -2.91% 18.39% -5.02% -35.50%

*On January 2, 1997, the Fund began selling Advisor Class shares to certain
eligible investors as described in the prospectus. This share class does not
have sales charges or a Rule 12b-1 plan. Performance quotations have been
calculated as follows: (a) For periods prior to January 2, 1997, figures reflect
the Fund's Class I performance, excluding the effect of the Class I sales
charge, but including the effect of Class I expenses, including Rule 12b-1 fees;
and (b) for periods after January 1, 1997, figures reflect actual Advisor Class
performance, including the deduction of all fees and expenses applicable only to
that class. Since January 2, 1997 (commencement of sales), the cumulative total
return of Advisor Class shares was -38.96%.
1. Cumulative total return represents the change in value of an investment over
the periods indicated. Average annual total return represents the average annual
change in value of an investment over the periods indicated.
2. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated.
3. One-year total return represents the change in value of an investment over
the periods ended on the dates indicated.
All calculations assume reinvestment of dividends and capital gains at net asset
value. Past expense waivers by the Fund's manager increased the Fund's total
returns. Without these waivers, the Fund's total returns would have been lower.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the economic,
social and political climates of countries where investments are made. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares.

TEMPLETON FOREIGN
SMALLER COMPANIES FUND

Your Fund's Objective: Templeton Foreign Smaller Companies Fund seeks to provide
long-term capital growth by investing primarily in equity securities of smaller
companies -- those with market capitalizations of less than $1 billion --
outside the United States.

This semi-annual report for Templeton Foreign Smaller Companies Fund covers the
six months ended April 30, 1998. International stock markets, especially those
in Europe, generally performed well during the period. Even Asian markets, which
had been down significantly in late 1997 due to a regional currency crisis,
began to rebound in early 1998. Within this environment, the Fund's Class I
shares provided a +6.85% cumulative total return during the reporting period, as
discussed in the Performance Summary on page 16.

You will find a complete listing of the Fund's portfolio holdings, including
dollar value and number of shares or principal amount, beginning on page 30 of
this report.

On April 30, 1998, the Fund had approximately $160 million in assets under
management invested in 36 different countries. Our largest positions by
geographic area were Europe (50.8% of total net assets), Asia (11.3%), and Latin
America (6.3%). By country, our largest exposure was the United Kingdom (15.7%),
the Netherlands (7.0%), Hong Kong (5.8%), Canada (4.8%) and France (4.5%).

The Fund's performance benefited from its large European exposure, as subdued
inflation, corporate restructuring, and strong corporate profits helped to
propel many European markets higher during the period. For example, the equity
markets of the United Kingdom, the Netherlands, Sweden, Spain, and Switzerland
all rose significantly during the reporting period. We initiated positions in
Caradon Plc. and Thorn Plc. during the period because, in our opinion, their
restructuring moves could potentially increase shareholder value.

In Asia, the reporting period was one of incredible volatility for equity
markets in the region. Many markets there rebounded during the period under
review from the declines seen in late 1997 resulting from sharp currency
devaluations. However, by the end of the reporting period, several of these
markets had again experienced significant declines. Given the lack of up-to-date
financial information and the probable need of many companies in the area to
restructure, we had limited exposure to Asian equities during the period.

GRAPHIC MATERIAL 4 OMITTED - SEE APPENDIX AT END OF DOCUMENT
GRAPHIC MATERIAL 5 OMITTED - SEE APPENDIX AT END OF DOCUMENT

In our opinion, many European stocks have the potential to continue to perform
well, and some smaller companies there may benefit if European equity markets
continue in a positive direction. Therefore, Europe is likely to continue to
dominate the composition of the Fund. In Asia, despite positive government
action in much of the region, we believe economic recovery is likely to proceed
at a relatively slow pace and that equity markets there may continue to
experience severe volatility. We will concentrate on those companies we believe
have solid balance sheets, reliable cash flow, realistic management, and strong
franchises.

Of course, there are risks involved in investing in a fund seeking long-term
capital growth from small or relatively new or unseasoned companies, such as
relatively small revenues, limited production lines and small market share. In
addition, investing in international markets involves special risks related to
market and currency volatility, and adverse economic, social, and political
developments. Emerging markets are subject to heightened risks, as well as those
associated with their relatively small size and lesser liquidity. Investing in
any emerging market means accepting a certain amount of volatility and, in some
cases, severe market corrections. While short-term volatility can be
disconcerting, declines of as much as 40% to 50% are not unusual in emerging
markets. For example, the Hong Kong equity market has increased +1,056% in the
last 15 years, but has suffered five quarterly declines of more than 20% during
that time.*

*Source: Bloomberg. Based on quarterly percentage price change over the 15 years
ended March 31, 1998. Market returns are measured in U.S. dollars.

GRAPHIC MATERIAL 6 OMITTED - SEE APPENDIX AT END OF DOCUMENT

PERFORMANCE SUMMARY

Class I

Templeton Foreign Smaller Companies Fund - Class I produced a +6.85% cumulative
total return for the six-month period ended April 30, 1998. Cumulative total
return measures the change in value of an investment, assuming reinvestment of
dividends and capital gains, if any, and does not include the sales charge. We
have always maintained a long-term perspective when managing the Fund, and we
encourage shareholders to view their investments in a similar manner. As you can
see from the table on page 18, the Fund's Class I shares produced a +119.23%
cumulative total return since inception on September 20, 1991, and an average
annual total return of 11.61% for the same period.

Effective October 1, 1996, the Board of Trustees of Frankin Templeton
International Trust approved a change in the name and focus of the Fund. The
Fund's name was changed from the Franklin International Equity Fund to the
Templeton Foreign Smaller Companies Fund and the Fund, which until that date
invested predominantly in larger capitalization foreign equity securities,
shifted its emphasis to smaller capitalization foreign equity securities, i.e.,
securities with a market capitalization of $1 billion or less. For the period
since inception until these changes were implemented on October 1, 1996, the
average annual total return for the Fund's Class I shares was 10.48%. For the
period from October 1, 1996 to April 30, 1998, the Fund's Class I shares have
produced a 10.85% average annual total return.

The Fund's Class I share price, as measured by net asset value, increased 8
cents, from $15.06 on October 31, 1997, to $15.14 on April 30, 1998. During the
reporting period, shareholders received per-share distributions of 18.5 cents
($0.1850) in dividend income, 33.0 cents ($0.3300) in short-term capital gains,
and 33.5 cents ($0.3350) in long-term capital gains. Distributions will vary
depending on income earned by the Fund and any profits realized from the sale of
securities in the portfolio, as well as the level of the Fund's operating
expenses.

Templeton Foreign Smaller Companies Fund - Class I
Periods ended 4/30/98

Since
Since Change in
Inception Investment
of the Fund Policies

1-Year 3-Year 5-Year (9/20/91) (10/1/96)

Cumulative Total Return1 12.65% 52.62% 96.86% 119.23% 24.89%
Average Annual
Total Return2 6.15% 12.89% 13.17% 11.61% 10.85%
Value of $10,000
Investment3 $10,615 $14,384 $18,553 $20,663 $11,767
4/30/94 4/30/95 4/30/96 4/30/97 4/30/98
One-Year Total Return4 28.39% 0.46% 19.26% 13.60% 12.65%

1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include the sales charge.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and has been restated to include the
maximum 5.75% initial sales charge.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and have been restated to include the current
maximum 5.75% initial sales charge.
4. One-year total return represents the change in value of an investment over
the periods ended on the dates indicated and does not include the sales charge.
Note: Prior to January 1, 1997, Fund shares were offered at a lower initial
sales charge. Thus, actual returns for investors who paid this lower charge
would have been higher. On July 1, 1993, the Fund implemented a Rule 12b-1 plan,
which affects subsequent performance. All calculations assume reinvestment of
dividends and capital gains at net asset value.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the economic,
social and political climates of countries where investments are made. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares. The Fund's manager has agreed in
advance to waive a portion of the management fees and to make certain payments
to reduce expenses, which increases total return to shareholders. The fee waiver
may be discontinued at any time upon notice to the Fund's Board.

Advisor Class

Templeton Foreign Smaller Companies Fund - Advisor Class produced a +6.87%
cumulative total return for the six-month period ended April 30, 1998.
Cumulative total return measures the change in value of an investment, assuming
reinvestment of dividends and capital gains, if any.

Effective October 1, 1996, the Board of Trustees of Franklin Templeton
International Trust approved a change in the name and focus of the Fund. The
Fund's name was changed from the Franklin International Equity Fund to the
Templeton Foreign Smaller Companies Fund and the Fund, which until that date
invested predominantly in larger capitalization foreign equity securities,
shifted its emphasis to smaller capitalization foreign equity securities, i.e.,
securities with a market capitalization of $1 billion or less. For the period
since inception until these changes were implemented on October 1, 1996, the
average annual total return for the Fund's Advisor Class shares was 11.78%. For
the period from October 1, 1996 to April 30, 1998, the Fund's Advisor Class
shares have produced a 15.35% average annual total return.

The Fund's Advisor Class share price, as measured by net asset value, increased
6 cents, from $15.09 on October 31, 1997, to $15.15 on April 30, 1998. During
the reporting period, shareholders received per-share distributions of 20.81
cents ($0.2081) in dividend income, 33.0 cents ($0.3300) in short-term capital
gains, and 33.5 cents ($0.3350) in long-term capital gains. Distributions will
vary depending on income earned by the Fund and any profits realized from the
sale of securities in the portfolio, as well as the level of the Fund's
operating expenses.

Templeton Foreign Smaller Companies Fund - Advisor Class
Periods ended 4/30/98

Since
Since Change in
Inception Investment
of the Fund Policies
1-Year* 3-Year* 5-Year* (9/20/91)* (10/1/96)
Cumulative Total Return1 12.90% 53.06% 97.42% 119.86% 25.25%
Average Annual
Total Return1 12.90% 15.24% 14.57% 12.66% 15.35%
Value of $10,000
Investment2,* $11,297 $15,306 $19,742 $21,986 $12,525
4/30/94 4/30/95 4/30/96 4/30/97 4/30/98
One-Year Total Return3,* 28.39% 0.46% 19.26% 13.60% 12.97%

*On January 2, 1997, the Fund began selling Advisor Class shares to certain
eligible investors as described in the prospectus. This share class does not
have sales charges or a Rule 12b-1 plan. Performance quotations have been
calculated as follows: (a) For periods prior to January 2, 1997, figures reflect
the Fund's Class I performance, excluding the effect of the Class I sales
charge, but including the effect of Class I expenses, including Rule 12b-1 fees;
and (b) for periods after January 1, 1997, figures reflect actual Advisor Class
performance, including the deduction of all fees and expenses applicable only to
that class. Since January 2, 1997 (commencement of sales), the cumulative total
return of Advisor Class shares was +15.88%.
1. Cumulative total return represents the change in value of an investment over
the periods indicated. Average annual total return represents the average annual
change in value of an investment over the periods indicated.
2. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated.
3. One-year total return represents the change in value of an investment over
the periods ended on the dates indicated.
All calculations assume reinvestment of dividends and capital gains at net asset
value. Since markets can go down as well as up, investment return and principal
value will fluctuate with market conditions, currency volatility and the
economic, social and political climates of countries where investments are made.
Emerging markets involve heightened risks related to the same factors, in
addition to those associated with their relatively small size and lesser
liquidity. You may have a gain or loss when you sell your shares.
The Fund's manager has agreed in advance to waive a portion of its management
fees and to make certain payments to reduce expenses, which increases total
return to shareholders. The fee waiver may be discontinued at any time upon
notice to the Fund's Board.

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Highlights
Templeton Pacific Growth Fund
<TABLE>
<CAPTION>
Six Months Ended
April 30, 1998 Year Ended October 31,
------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance - Class I
(For a share outstanding throughout the period)
Net asset value, beginning of period..... $10.88 $14.50 $14.11 $15.40 $14.44 $10.90
----------------------------------------------------------
Income from investment operations:
Net investment income................... .07 .14 .12 .15 .21 .19
Net realized and unrealized gains (losses) (1.81) (3.65) 1.41 (1.01) 1.01 3.82
----------------------------------------------------------
Total from investment operations......... (1.74) (3.51) 1.53 (.86) 1.22 4.01
----------------------------------------------------------
Less distributions from:
Net investment income................... (.10) (.11) (.21) (.16) (.20) (.19)
Net realized gains...................... (.07) -- (.93) (.27) (.06) (.28)
---------------------------------------------------------
Total distributions...................... (.17) (.11) (1.14) (.43) (.26) (.47)
---------------------------------------------------------
Net asset value, end of period........... $8.97 $10.88 $14.50 $14.11 $15.40 $14.44
=========================================================
Total return*............................ (16.02)% (24.42)% 11.27% (5.54)% 8.46% 38.46%
Ratios/Supplemental Data
Net assets, end of period (000's)........ $45,003 $40,958 $59,740 $50,247 $58,241 $22,619
Ratios to average net assets:
Expenses................................ 1.86%** 1.63% 1.52% 1.72% 1.22% .50%
Expenses, excluding waiver and payments 1.86%** 1.63% 1.52% 1.72% 1.72% 2.31%
by affiliate
Net investment income................... 1.23%** .97% 1.06% 1.04% 1.54% 2.03%
Portfolio turnover rate.................. 9.11% 24.79% 13.48% 36.21% 9.16% 47.52%
Average commission rate paid***.......... $.0043 $.0061 $.0092 -- -- --
</TABLE>

*Total return does not reflect sales commissions and is not annualized.
**Annualized.
***Relates to purchases and sales of equity securities. Prior to fiscal year
1996 disclosure of average commission rate was not required.

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Highlights (continued)
Templeton Pacific Growth Fund (cont.)
<TABLE>
<CAPTION>

Six Months Ended
April 30, 1998 Year Ended October 31,
--------------------
(unaudited) 1997
-----------------------------
<S> <C> <C>
Per Share Operating Performance - Class II (For a share outstanding
throughout the period)
Net asset value, beginning of period ................................... $10.81 $15.10
-----------------------------
Income from investment operations:
Net investment income.................................................. .05 .05
Net realized and unrealized losses..................................... (1.77) (4.31)
-----------------------------
Total from investment operations........................................ (1.72) (4.26)
-----------------------------
Less distributions from:
Net investment income.................................................. (.09) (.03)
Net realized gains..................................................... (.07) --
-----------------------------
Total distributions..................................................... (.16) (.03)
-----------------------------
Net asset value, end of period.......................................... $8.93 $10.81
=============================
Total return*........................................................... (15.97)% (28.28)%

Ratios/Supplemental Data
Net assets, end of period (000's)....................................... $5,832 $2,307
Ratios to average net assets:
Expenses............................................................... 2.61%** 2.48%**
Net investment income.................................................. .44%** .93%**
Portfolio turnover rate................................................. 9.11% 24.79%
Average commission rate paid***......................................... $.0043 $.0061
</TABLE>

*Total return does not reflect sales commissions or the contingent deferred
sales charge and is not annualized.
**Annualized.
***Relates to purchases and sales of equity securities.
For the period January 2, 1997 (effective date) to October 31, 1997.

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Highlights (continued)
Templeton Pacific Growth Fund (cont.)
<TABLE>
<CAPTION>
Six Months Ended
April 30, 1998 Year Ended October 31,
---------------------
(unaudited) 1997
----------------------------------
<S> <C> <C>
Per Share Operating Performance - Advisor Class (For a share
outstanding throughout the period)
Net asset value, beginning of period.................................... $10.88 $15.10
----------------------------------
Income from investment operations:
Net investment income.................................................. .12 .12
Net realized and unrealized losses..................................... (1.80) (4.30)
----------------------------------
Total from investment operations........................................ (1.68) (4.18)
----------------------------------
Less distributions from:
Net investment income.................................................. (.12) (.04)
Net realized gains..................................................... (.07) --
----------------------------------
Total distributions..................................................... (.19) (.04)
----------------------------------
Net asset value, end of period.......................................... $9.01 $10.88
==================================
Total return*........................................................... (15.52)% (27.74)%

Ratios/Supplemental Data
Net assets, end of period (000's)....................................... $887 $1,357
Ratios to average net assets:
Expenses............................................................... 1.58%** 1.48%**
Net investment income.................................................. 1.67%** 1.55%**
Portfolio turnover rate................................................. 9.11% 24.79%
Average commission rate paid***......................................... $.0043 $.0061
</TABLE>

*Total return is not annualized.
**Annualized.
***Relates to purchases and sales of equity securities.
For the period January 2, 1997 (effective date) to October 31, 1997.

See notes to financial statements.

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Statement of Investments, April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
SHARES/
Templeton Pacific Growth Fund COUNTRY WARRANTS VALUE
- ----------------------------------------------------------------------------------------------------------
Common Stocks 91.5%

<S> <C> <C> <C>
Banking 8.5%
Bangkok Bank Public Co. Ltd., fgn. ............................. Thailand 111,400 $ 279,400
Development Bank of Singapore Ltd., fgn. ....................... Singapore 133,650 886,217
HSBC Holdings Plc. ............................................. Hong Kong 39,840 1,136,669
Krung Thai Bank Public Co. Ltd., fgn. .......................... Thailand 520,066 133,126
Overseas Union Bank Ltd., fgn. ................................. Singapore 255,000 966,214
* Philippine National Bank ....................................... Philippines 124,382 249,384
PT Bank Bali, fgn. ............................................. Indonesia 494,000 53,606
PT Bank Pan Indonesia TBK ...................................... Indonesia 1,138,500 88,119
Singapore Finance Ltd., fgn. ................................... Singapore 275,000 208,399
Thai Farmers Bank Public Co. Ltd. .............................. Thailand 37,140 66,261
Thai Farmers Bank Public Co. Ltd., fgn. ........................ Thailand 143,060 327,364
* Thai Farmers Bank Public Co. Ltd., fgn., wts. .................. Thailand 11,357 2,525
-----------
4,397,284
-----------
Broadcasting & Publishing .4%
South China Morning Post Ltd. .................................. Hong Kong 368,000 220,914
-----------
Building Materials & Components 3.2%
Gujarat Ambuja Cements Ltd., GDR ............................... India 71,900 539,250
Hi Cement Corp. ................................................ Philippines 3,386,000 404,802
Okumura Corp. .................................................. Japan 194,000 719,443
-----------
1,663,495
-----------
Chemicals 1.8%
Fauji Fertilizer Co. Ltd. ...................................... Pakistan 267,100 526,684
Shanghai Petrochemical Co. Ltd., H ............................. China 2,899,000 385,485
-----------
912,169
-----------
Construction & Housing 5.7%
City Developments Ltd., fgn. ................................... Singapore 290,200 1,255,365
Daito Trust Construction Co. Ltd. .............................. Japan 61,500 432,404
Road King Infrastructure Ltd. .................................. Hong Kong 686,520 638,129
Toda Corp....................................................... Japan 148,000 604,859
-----------
2,930,757
-----------
Electrical & Electronics 6.4%
Dongfang Electrical Machinery Co. Ltd., H ...................... China 1,784,000 253,344
Hitachi Ltd. ................................................... Japan 90,200 647,845
Johnson Electric Holdings Ltd. ................................. Hong Kong 476,000 1,613,091
Matsushita Electric Industrial Co. Ltd. ........................ Japan 49,000 786,195
-----------
3,300,475
-----------
Electronic Components & Instruments 1.6%
* Solid Group Inc. ............................................... Philippines 3,886,000 193,574
VTech Holdings Ltd. ............................................ Hong Kong 186,000 653,137
-----------
846,711
-----------
Energy Sources 1.9%
Hub Power Co. Ltd., GDR, reg.S ................................. Pakistan 16,000 $ 412,000
* Petron Corporation ............................................. Philippines 3,966,000 582,800
-----------
994,800
-----------
Financial Services 3.5%
* Commerce Asset-Holding Bhd, fgn. ............................... Malaysia 749,200 560,898
* Commerce Asset-Holding Bhd, fgn., wts. ......................... Malaysia 29,500 3,668
Industrial Credit & Inv. Corp. of India, GDR, 144A ............. India 63,200 1,027,000
Industrial Finance Corp. of Thailand, fgn. ..................... Thailand 320,833 132,730
Public Finance Bhd., fgn. ...................................... Malaysia 255,000 95,455
-----------
1,819,751
-----------
Food & Household Products .3%
* Charoen Pokphand Feedmill Public Co. Ltd., fgn. ................ Thailand 151,500 173,339
-----------
Forest Products & Paper 2.0%
Carter Holt Harvey Ltd. ........................................ New Zealand 416,248 552,780
Fletcher Challenge Paper Ltd. .................................. New Zealand 43,100 63,464
Mitsubishi Paper Mills Ltd. .................................... Japan 161,000 308,280
PT Tjiwi Kimia TBK ............................................. Indonesia 408,709 102,494
* PT Tjiwi Kimia TBK, wts. ....................................... Indonesia 56,765 6,861
-----------
1,033,879
-----------
Industrial Components 3.9%
Fuji Heavy Industries Ltd. ..................................... Japan 296,000 1,328,449
Sanyo Electric Co. Ltd. ........................................ Japan 239,000 680,118
-----------
2,008,567
-----------
Insurance 2.8%
GIO Australia Holdings Ltd. .................................... Australia 277,869 797,152
National Mutual Asia Ltd........................................ Hong Kong 800,000 640,330
-----------
1,437,482
-----------
Leisure & Tourism 1.1%
Toei Co. Ltd. .................................................. Japan 166,500 567,055
-----------
Machinery & Engineering .8%
Tata Engineering & Locomotive Co., GDR ......................... India 53,400 388,485
-----------
Merchandising 3.8%
Coles Myer Ltd., A ............................................. Australia 187,000 904,677
Matsuzakaya Co. Ltd. ........................................... Japan 220,000 957,390
Takashimaya Co. Ltd............................................. Japan 17,000 122,228
-----------
1,984,295
-----------
Metals & Mining 5.7%
* Angang New Steel Company Ltd., H ............................... China 2,435,000 286,064
Capral Aluminum Ltd. ........................................... Australia 73,000 155,163
Nittetsu Mining Co. Ltd. ....................................... Japan 235,000 919,511

Metals & Mining (cont.)
Pohang Iron & Steel Co. Ltd. ................................... South Korea 11,100 $ 605,377
WMC Ltd. ....................................................... Australia 278,019 989,727
-----------
2,955,842
-----------
Misc Materials & Commodities 1.1%
Golden Hope Plantations Bhd., fgn. ............................. Malaysia 451,000 557,118
-----------
Multi-Industry 8.4%
Broken Hill Proprietary Co. Ltd. ............................... Australia 96,800 946,705
Cheung Kong Holdings Ltd. ...................................... Hong Kong 170,300 1,132,255
Hicom Holdings Bhd. ............................................ Malaysia 295,000 116,738
Hutchison Whampoa Ltd. ......................................... Hong Kong 83,000 513,258
Jardine Matheson Holdings Ltd. ................................. Hong Kong 137,924 582,039
Sime Darby Bhd., fgn. .......................................... Malaysia 327,600 289,059
Swire Pacific Ltd., A .......................................... Hong Kong 62,500 312,258
Wheelock and Co. Ltd. .......................................... Hong Kong 490,000 436,483
-----------
4,328,795
-----------
Real Estate 5.3%
Asean Resources Holdings Ltd. .................................. Hong Kong 1,900,381 318,938
* Filinvest Land Inc. ............................................ Philippines 930,000 64,857
Hon Kwok Land Investment Co. Ltd. .............................. Hong Kong 1,708,364 244,808
New World Development Co. Ltd. ................................. Hong Kong 144,664 411,805
Parkway Holdings Ltd., fgn. .................................... Singapore 340,000 734,323
Sun Hung Kai Properties Ltd. ................................... Hong Kong 160,000 950,168
-----------
2,724,899
-----------
Recreation & Other Consumer Goods .5%
Nintendo Co. Ltd. .............................................. Japan 3,000 271,551
-----------
Telecommunications 6.8%
Hong Kong Telecommunications Ltd. .............................. Hong Kong 756,669 1,416,434
Pakistan Telecommunications Corp., A ........................... Pakistan 940,000 656,955
SK Telecom Co. Ltd., ADR ....................................... South Korea 106,090 789,044
Smartone Telecommunications Holdings Ltd. ...................... Hong Kong 252,000 662,045
-----------
3,524,478
-----------
Textiles & Apparel 1.9%
Nisshinbo Industries Inc. ...................................... Japan 171,000 775,214
PT Indorama Synthetics, fgn. ................................... Indonesia 733,862 188,578
PT Panasia Indosyntec, fgn. .................................... Indonesia 315,000 8,777
-----------
972,569
-----------
Transportation 10.5%
Cathay Pacific Airways Ltd. .................................... Hong Kong 630,000 553,060
Great Eastern Shipping Co. Ltd., GDR ........................... India 26,300 147,938
Great Eastern Shipping Co. Ltd., GDR, 144A ..................... India 8,800 49,500
Guangshen Railway Co. Ltd., ADR ................................ China 28,000 274,750
GZI Transport Ltd. ............................................. China 550,000 177,511
Transportation (cont.)
GZI Transport Ltd., 144A ....................................... China 174,000 $ 56,158
* GZI Transport Ltd., 144A, wts. ................................. China 34,800 620
Hitachi Zosen Corp. ............................................ Japan 385,000 588,587
Hong Kong Ferry Holdings Co. Ltd. .............................. Hong Kong 674,000 652,595
Malaysian International Shipping Corp., Bhd., fgn. ............. Malaysia 317,333 551,515
Mayne Nickless Ltd., A ......................................... Australia 102,400 552,947
Singapore Airlines Ltd., fgn. .................................. Singapore 204,400 1,329,536
Tranz Rail Holdings Ltd., ADR .................................. New Zealand 49,800 522,900
-----------
5,457,617
-----------
Utilities Electrical & Gas 1.5%
CLP Holdings Ltd. .............................................. Hong Kong 69,000 331,371
Shandong Huaneng Power Development Co. Ltd., ADR ............... China 59,500 431,375
-----------
762,746
-----------
Wholesale & International Trade 2.1%
Brierley Investments Ltd. ...................................... New Zealand 746,000 431,096
Mitsubishi Corp. ............................................... Japan 86,000 650,874
-----------
1,081,970
-----------
Total Common Stocks (Cost $61,609,968) 47,317,043
-----------

PRINCIPAL
AMOUNT**
Convertible Bond (Cost $221,564)
MDX Public Co. Ltd., 4.75%, cvt., 9/17/03 ...................... Thailand $ 192,000 13,440
-----------
Total Investments before Repurchase Agreements (Cost $61,831,532) 47,330,483
-----------
a Repurchase Agreements 6.5%
Bankers Trust Corp., 5.50%, 5/01/98 (Maturity Value $1,700,260)
Collateralized by U.S. Treasury Notes and Bonds ............... United States1,700,000 1,700,000
Dresdner Bank AG, 5.50%, 5/01/98 (Maturity Value $1,682,257)
Collateralized by U.S. Treasury Notes and Bonds ............... United States1,682,000 1,682,000
-----------
Total Repurchase Agreements (Cost $3,382,000) .................. 3,382,000
-----------
Total Investments (Cost 65,213,532) 98.0% ...................... 50,712,483
Other Assets, less Liabilities 2.0% ............................ 1,009,688
-----------
Total Net Assets 100.0% ........................................ $51,722,171
===========
</TABLE>

*Non-income producing.
**Securities traded in U.S. dollars.
aSee Note 1 regarding repurchase agreements.

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Highlights
Templeton Foreign Smaller Companies Fund
<TABLE>
<CAPTION>

Six Months Ended
April 30, 1998 Year Ended October 31,
----------------------------------------------

(unaudited) 1997 1996 1995 1994 1993
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance - Class I
(For a share outstanding throughout
the period)
Net asset value, beginning of period..... $15.06 $14.18 $13.23 $13.83 $12.28 $10.02
---------------------------------------------------------------
Income from investment operations:
Net investment income................... .08 .27 .35 .25 .23 .42

Net realized and unrealized gains (losses) .85 1.64 1.88 (.08) 1.54 2.25
---------------------------------------------------------------
Total from investment operations ........ .93 1.91 2.23 .17 1.77 2.67
---------------------------------------------------------------
Less distributions from:

Net investment income................... (.19) (.32) (.25) (.19) (.22) (.41)

Net realized gains...................... (.66) (.71) (1.03) (.58) -- --
---------------------------------------------------------------
Total distributions...................... (.85) (1.03) (1.28) (.77) (.22) (.41)
---------------------------------------------------------------
Net asset value, end of period........... $15.14 $15.06 $14.18 $13.23 $13.83 $12.28
===============================================================

Total return*............................ 6.85% 14.25% 18.49% 1.75% 14.56% 27.40%

Ratios/Supplemental Data

Net assets, end of period (000's)........ $145,165 $121,619 $67,967 $50,947 $57,854 $19,217

Ratios to average net assets:

Expenses ............................... 1.41%** 1.48% 1.53% 1.63% 1.22% .50%

Expenses, excluding waiver and payments by 1.47%** 1.58% 1.53% 1.63% 1.76% 2.27%
affiliate
Net investment income .................. 1.25%** 2.01% 2.50% 1.86% 1.99% 4.22%

Portfolio turnover rate ................. 12.99% 33.62% 40.46% 9.12% 21.80% 52.99%

Average commission rate paid***.......... $.0002 $.0029 $.0026 -- -- --
</TABLE>

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Highlights (continued)
Templeton Foreign Smaller Companies Fund (cont.)
<TABLE>
<CAPTION>
Six Months Ended
April 30, 1998 Year Ended October 31,
---------------------

(unaudited) 1997
-----------------------------------
<S> <C> <C>
Per Share Operating Performance - Advisor Class (For a share
outstanding throughout the period)
Net asset value, beginning of period ................................... $15.09 $14.00
-----------------------------------
Income from investment operations:
Net investment income.................................................. .13 .20
Net realized and unrealized gains ..................................... .80 .98
-----------------------------------
Total from investment operations........................................ .93 1.18
-----------------------------------
Less distributions from:
Net investment income.................................................. (.21) (.09)
Net realized gains..................................................... (.66) --
-----------------------------------
Total distributions..................................................... (.87) (.09)
-----------------------------------
Net asset value, end of period.......................................... $15.15 $15.09
===================================
Total return*........................................................... 6.87% 8.43%

Ratios/Supplemental Data
Net assets, end of period (000's)....................................... $14,476 $3,726
Ratios to average net assets:
Expenses............................................................... 1.19%** 1.24%**
Expenses, excluding waiver and payments by affiliate .................. 1.25%** 1.36%**
Net investment income.................................................. 1.68%** 2.66%**
Portfolio turnover rate................................................. 12.99% 33.62%
Average commission rate paid***......................................... $.0002 $.0029
</TABLE>

*Total return is not annualized.
**Annualized.
***Relates to purchases and sales of equity securities.
For the period January 2, 1997 (effective date) to October 31, 1997.

See notes to financial statements.

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Statement of Investments, April 30, 1998 (unaudited)
<TABLE>
<CAPTION>

Templeton Foreign Smaller Companies Fund COUNTRY SHARES VALUE
<S> <C> <C> <C>
Common Stocks 77.7%

Aerospace & Military Technology
Hong Kong Aircraft Engineering Co. Ltd. ......................... Hong Kong 100 $ 185
----------
Appliances & Household Durables 1.3%
Email Ltd. ...................................................... Australia 341,625 785,381
Fisher & Paykel Ltd. ............................................ New Zealand 262,571 780,554
Guangdong Kelon Electrical Hldgs Ltd., H, 144A .................. China 440,000 451,588
----------
2,017,523
----------
Automobiles 1.2%
Bilia AB ........................................................ Sweden 115,500 1,492,479
Volvo AB, B ..................................................... Sweden 13,900 405,929
----------
1,898,408
----------
Banking 4.1%
Banco de Andalucia SA ........................................... Spain 2,500 587,212
Banco de Valencia SA ............................................ Spain 11,066 326,720
Banco Pastor SA ................................................. Spain 11,500 1,312,108
BPI Socieda de Gestora de Participacoes Socias SA ............... Portugal 12,012 558,318
Commercial International Bank Ltd., GDR, 144A ................... Egypt 49,100 832,245
* Korea Long Term Credit Bank ..................................... South Korea 44,453 153,997
Singapore Finance Ltd., fgn. .................................... Singapore 465,000 352,384
Unibanco Uniao de Bancos Brasileiros SA, GDR .................... Brazil 27,500 1,093,125
Union Bank of Norway, Primary Capital Cert. ..................... Norway 38,700 1,338,768
----------
6,554,877
----------
Beverages & Tobacco .4%
Sinocan Holdings Ltd. ........................................... Hong Kong 3,425,000 574,813
----------
Broadcasting & Publishing 4.0%
* Apt Satellite Holdings Ltd., ADR ................................ Hong Kong 78,000 867,750
Cordiant Communications Group Plc. .............................. United Kingdom 234,600 460,892
GTC Transcontinental Group Ltd., B .............................. Canada 200,000 2,324,606
* Inchcape Marketing Services Ltd., fgn. .......................... Singapore 114,000 39,236
Marieberg Tidnings AB, A ........................................ Sweden 44,100 1,350,558
NV Holdingsmij de Telegraaf ..................................... Netherlands 23,520 545,948
Oriental Press Group Limited .................................... Hong Kong 660,000 113,323
Saatchi & Saatchi Plc. .......................................... United Kingdom 234,600 615,830
----------
6,318,143
----------

Building Materials & Components 6.1%
Caradon Plc. .................................................... United Kingdom 471,000 1,523,826
Cementos Diamante SA, ADR, 144A ................................. Colombia 93,100 878,585
Det Danske Traelastkompagni AS .................................. Denmark 14,000 1,493,464
Gujarat Ambuja Cements Ltd., GDR ................................ India 143,750 1,078,125
Pioneer International Ltd. ...................................... Australia 241,300 689,096
Plettac AG ...................................................... Germany 5,350 790,053
Sarna Kunststoff Holding AG ..................................... Switzerland 330 561,037
Schuttersveld NV................................................. Netherlands 41,482 1,026,528
Siam City Cement Public Co. Ltd., fgn. .......................... Thailand 170,708 439,184
Building Materials & Components (cont.)
Suez Cement Co., GDR, 144A ...................................... Egypt 54,000 $ 1,101,600
Uralita SA ...................................................... Spain 16,606 233,703
----------
9,815,201
----------
Business & Public Services 3.2%
Adecco SA ....................................................... Switzerland 1,855 810,710
Esselte AB, B ................................................... Sweden 13,100 299,620
Kardex AG, br. .................................................. Switzerland 5,110 1,703,447
Lex Service Plc. ................................................ United Kingdom 208,000 2,104,031
Scribona AB, B .................................................. Sweden 19,500 249,457
----------
5,167,265
----------
Chemicals .9%
DSM NV........................................................... Netherlands 2,900 290,646
Energia e Industrias Aragonesas Eia SA .......................... Spain 129,000 1,125,677
----------
1,416,323
----------
Construction & Housing 2.1%
Dragados y Construcciones SA .................................... Spain 25,600 829,735
Hollandsche Beton Groep NV....................................... Netherlands 38,000 791,784
Kumagai Gumi Hong Kong Ltd. ..................................... Hong Kong 393,000 242,264
Sirti SpA ....................................................... Italy 63,700 382,391
* Sociedade Construcoes Soares da Costa SA ........................ Portugal 135,800 1,118,440
Wai Kee Holdings Ltd. ........................................... Hong Kong 1,361 300
----------
3,364,914
----------
Electrical & Electronics 3.3%
Philips Electronics NV........................................... Netherlands 13,200 1,162,880
Tadiran Ltd., ADR ............................................... Israel 34,000 1,304,750
Techtronic Industries Co. Ltd. .................................. Hong Kong 6,838,000 2,030,390
Varitronix International Ltd. ................................... Hong Kong 375,000 755,229
----------
5,253,249
----------
Electronic Components & Instruments 1.3%
Swisslog Holding AG ............................................. Switzerland 5,500 586,706
VTech Holdings Ltd. ............................................. Hong Kong 429,000 1,506,429
----------
2,093,135
----------
Energy Sources 1.1%
* Northstar Energy Corp. .......................................... Canada 107,250 723,573
* Ranger Oil Ltd. ................................................. Canada 85,345 593,689
Societe Elf Aquitaine SA ........................................ France 3,738 490,097
----------
1,807,359
----------
Food & Household Products 7.1%
Hazlewood Foods Plc. ............................................ United Kingdom 832,000 2,663,952
Hillsdown Holdings Plc. ......................................... United Kingdom 338,900 1,008,614
Illovo Sugar Limited ............................................ South Africa 700,000 1,176,703
McBride Plc. .................................................... United Kingdom 314,100 1,029,337
Food & Household Products (cont.)
Melco International Development Ltd. ............................ Hong Kong 1,462,250 $ 218,979
National Foods Ltd. ............................................. Australia 841,683 1,509,140
Oshawa Group Ltd. (The) ......................................... Canada 109,850 1,766,386
Perkins Foods Plc. .............................................. United Kingdom 729,200 1,603,267
* Perkins Foods Plc., B ........................................... United Kingdom 227,875 371,479
----------
11,347,857
----------
Forest Products & Paper 2.0%
Cartiere Burgo SpA .............................................. Italy 58,788 471,644
Enso OY, R ...................................................... Finland 49,700 529,107
Fletcher Challenge Ltd. Forestry Division ....................... New Zealand 339,633 220,799
Primex Forest Products Ltd. ..................................... Canada 225,000 1,140,455
Stora Kopparbergs Bergslags AB, B ............................... Sweden 44,500 759,032
----------
3,121,037
----------
Health & Personal Care .6%
Nycomed Amersham Plc. ........................................... United Kingdom 28,061 910,528
----------
Industrial Components 4.4%
Granges AB ...................................................... Sweden 47,656 868,286
Otra NV.......................................................... Netherlands 84,000 1,538,233
Sylea SA ........................................................ France 17,240 1,561,348
Weir Group Plc. ................................................. United Kingdom 414,100 1,928,252
Yamato Kogyo Co. Ltd. ........................................... Japan 155,000 1,156,664
----------
7,052,783
----------
Insurance 2.6%
Ace Ltd. ........................................................ Bermuda 26,400 999,900
GIO Australia Holdings Ltd. ..................................... Australia 89,513 256,795
HIH Winterthur International Holdings Ltd. ...................... Australia 782,135 1,621,650
* Sovereign Ltd. .................................................. New Zealand 941,100 1,218,412
----------
4,096,757
----------
Leisure & Tourism .8%
Kuoni Reisen Holding AG, B ...................................... Switzerland 200 1,073,405
Tourism Holdings Ltd. ........................................... New Zealand 297,000 198,034
----------
1,271,439
----------
Machinery & Engineering 2.1%
Arcadis NV....................................................... Netherlands 75,300 909,339
Bucher Holding AG, br. .......................................... Switzerland 740 853,523
Laird Group Plc. ................................................ United Kingdom 205,000 1,516,703
----------
3,279,565
----------
Merchandising 10.7%
Best Denki Co. Ltd. ............................................. Japan 39,000 221,373
De Boer Unigro NV................................................ Netherlands 22,750 1,114,699
Giordano International Ltd. ..................................... Hong Kong 2,753,000 639,737
Koninklijke Bijenkorf Beheer KBB NV.............................. Netherlands 11,900 848,107
Merchandising (cont.)
Li & Fung Ltd. .................................................. Hong Kong 1,000,000 $ 1,678,286
Makro Atacadista SA, ADR, 144A .................................. Brazil 147,000 1,574,082
Moebel Walther AG ............................................... Germany 28,000 1,170,242
Northwest Company Fund .......................................... Canada 98,750 1,097,721
Sa des Galeries Lafayette ....................................... France 2,868 2,516,396
Safeway Plc. .................................................... United Kingdom 217,928 1,300,813
Somerfield Plc. ................................................. United Kingdom 260,400 1,473,782
Storehouse Plc. ................................................. United Kingdom 357,612 1,476,871
Thorn Plc. ...................................................... United Kingdom 545,000 1,922,704
----------
17,034,813
----------
Metals & Mining 4.3%
Arbed SA ........................................................ Belgium 10,290 1,205,914
Boehler Uddeholm AG ............................................. Austria 15,350 1,131,675
Boehler Uddeholm AG, 144A ....................................... Austria 3,390 249,927
Elkem AS ........................................................ Norway 96,500 1,462,111
Pechiney SA, A .................................................. France 32,841 1,468,029
Pohang Iron & Steel Co. Ltd. .................................... South Korea 4,230 230,698
PT Tambang Timah (Persero), fgn. ................................ Indonesia 709,000 586,077
Vallourec ....................................................... France 5,857 494,430
----------
6,828,861
----------
Misc Materials & Commodities .4%
Korea Chemical Co. Ltd. ......................................... South Korea 15,800 305,006
Thai Glass Industries Public Co. Ltd., fgn. ..................... Thailand 100,800 153,774
Unitor ASA ...................................................... Norway 11,300 174,241
----------
633,021
----------
Multi-Industry 3.6%
* Amer Group Ltd., A .............................................. Finland 18,000 368,389
La Cemento Nacional SA, GDR ..................................... Ecuador 200 34,600
La Cemento Nacional SA, GDR, 144A ............................... Ecuador 2,150 371,950
Marine Wendel SA ................................................ France 3,576 635,839
Murray & Roberts Hldgs. Ltd. .................................... South Africa 540,000 1,003,856
Nagron Nationaal Grondbezit NV................................... Netherlands 30,400 833,536
Pioneer Industries International Ltd. ........................... Hong Kong 1,000 183
Saha Union Public Co. Ltd., fgn. ................................ Thailand 634,000 475,398
Wagon Industrial Holdings Plc. .................................. United Kingdom 175,000 980,204
Zehnder Holding AG, br. ......................................... Switzerland 1,820 993,786
----------
5,697,741
----------
Real Estate 1.1%
Inversiones y Representacion SA ................................. Argentina 463,333 1,793,368
----------
Telecommunications .5%
* Digital Telecommunications Philippines Inc. ..................... Philippines 6,341,000 274,803
Telefonica de Espana SA ......................................... Spain 12,400 517,429
Telefonica del Peru SA, B ....................................... Peru 114,000 251,180
----------
1,043,412
----------
Textiles & Apparel 1.4%
Daehan Synthetic Fiber Co. Ltd. ................................. South Korea 4,280 $ 131,298
Dawson International Plc. ....................................... United Kingdom 612,500 558,131
Gamma Holding NV................................................. Netherlands 16,800 1,026,874
Inner Mongolia Erdos Cashmere Products Co. Ltd., B .............. China 1,535,000 451,290
Yizheng Chemical Fibre Co. Ltd., H .............................. China 1,225,000 143,913
----------
2,311,506
----------
Transportation 3.3%
Anangel-American Shipholdings Ltd., ADR ......................... Greece 118,000 944,000
Delgro Corp. .................................................... Singapore 47,000 54,019
Great Eastern Shipping Co. Ltd. ................................. India 345,500 361,029
Great Eastern Shipping Co. Ltd., GDR, 144A ...................... India 2,200 12,375
Helikopter Services Group ASA ................................... Norway 61,100 700,458
Orient Overseas International Ltd. .............................. Hong Kong 1,514,000 635,231
Osprey Maritime Ltd. ............................................ Singapore 1,375,000 729,397
SBS Bus Service Ltd., fgn. ...................................... Singapore 47,000 22,706
Shun Tak Holdings ............................................... Hong Kong 1,000 161
Stolt Nielsen SA, ADR ........................................... Norway 50,000 950,000
Tranz Rail Holdings Ltd., ADR ................................... New Zealand 83,445 876,173
----------
5,285,549
----------
Utilities Electrical & Gas 1.7%
Cia Sevillana de Electricidad SA ................................ Spain 20,391 232,119
Electricas Reunidas de Zaragoza ERZ ............................. Spain 13,300 602,106
Gas y Electricidad SA ........................................... Spain 16,099 1,320,326
Guangdong Electric Power Development Co Ltd., B, 144A ........... China 919,920 509,483
----------
2,664,034
----------
Wholesale & International Trade 2.1%
Dahl International AB ........................................... Sweden 58,820 1,071,693
Davids Ltd. ..................................................... Australia 800,000 464,225
Eurodis Electron Plc. ........................................... United Kingdom 618,000 1,658,429
Inchcape Motores Ltd., fgn. ..................................... Singapore 114,000 194,380
----------
3,388,727
----------
Total Common Stocks (Cost $108,822,328) 124,042,393
-----------
Preferred Stocks 5.3%
Ballast Nedam NV, ctf., cvt., pfd. .............................. Netherlands 23,515 1,111,449
* Bank Austria AG, new, pfd., 144A ................................ Austria 24,250 1,874,240
Cia Brasileira de Petroleo Ipiranga, pfd. ....................... Brazil 71,578,000 932,266
Coteminas Cia Tecidos Norte de Minas (CTNM), pfd. ............... Brazil 2,006,000 490,979
Fertilizantes Fosfatados SA, pfd. ............................... Brazil 254,684,000 1,179,917
Moebel Walther AG, pfd. ......................................... Germany 16,000 677,626
News Corp. Ltd., pfd. ........................................... Australia 152,204 857,409
Weg SA, pfd. .................................................... Brazil 1,755,900 1,381,390
----------
Total Preferred Stocks (Cost $6,957,241) ........................ 8,505,276
----------
</TABLE>

PRINCIPAL
Templeton Foreign Smaller Companies Fund COUNTRY AMOUNT** VALUE
<S> <C> <C> <C>
Bond (Cost $246,250) .2%
Amer Group Ltd., 6.25%, cvt., 6/15/03 ........................... Finland $ 250,000 $ 257,500
-----------
Total Investments before Repurchase Agreements (Cost $116,025,819) 132,805,169
-----------
a Repurchase Agreements 14.5%
Bank of America, 5.51%, 5/01/98 (Maturity Value $5,100,781)
Collateralized by U.S. Treasury Notes and Bonds ................ United States 5,100,000 5,100,000
Bankers Trust Corp., 5.50%, 5/01/98 (Maturity Value $7,601,161)
Collateralized by U.S. Treasury Notes and Bonds ................ United States 7,600,000 7,600,000
Dresdner Bank AG, 5.50%, 5/01/98 (Maturity Value $5,200,794)
Collateralized by U.S. Treasury Notes and Bonds ................ United States 5,200,000 5,200,000
Morgan Stanley Inc., 5.53%, 5/01/98 (Maturity Value $5,204,799)
Collateralized by U.S. Treasury Notes and Bonds ................ United States 5,204,000 5,204,000
-----------
Total Repurchase Agreements (Cost $23,104,000) .................. 23,104,000
-----------
Total Investments (Cost $139,129,819) 97.7% ..................... 155,909,169
Other Assets, less Liabilities 2.3% ............................. 3,731,388
-----------
Total Net Assets 100.0% ......................................... $159,640,557
===========

</TABLE>

*Non-income producing.
**Securities traded in U.S. dollars.
aSee Note 1 regarding repurchase agreements.

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Statements

Statements of Assets and Liabilities
April 30, 1998 (unaudited)
<TABLE>
<CAPTION>
Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
<S> <C> <C>
Assets:
Investments in securities:
Cost......................................................................... $61,831,532 $116,025,819
-------------------------
Value........................................................................ 47,330,483 132,805,169
Repurchase agreement, at value and cost .................................... 3,382,000 23,104,000
Cash ....................................................................... 118,951 --
Receivables:
Investment securities sold................................................... -- 855,970
Beneficial shares sold....................................................... 1,086,261 3,814,723
Dividends and interest ...................................................... 192,933 474,729
Other assets................................................................ 102,432 3,668
-------------------------
Total assets ................................................................ 52,213,060 161,058,259
-------------------------
Liabilities:
Payables:
Investment securities purchased.............................................. 112,366 835,658
Beneficial shares redeemed .................................................. 94,760 179,846
To affiliates ............................................................... 80,588 238,773
To shareholders ............................................................. 47,974 128,168
Funds advanced by custodian................................................. -- 3,559
Accrued expenses............................................................ 155,201 31,698
-------------------------
Total liabilities ........................................................... 490,889 1,417,702
-------------------------
Net assets, at value......................................................... $51,722,171 $159,640,557
=========================
Net assets consist of:
Undistributed net investment income/
(Distributions in excess of net investment income) .......................... $ (131,204) $ 609,147
Net unrealized appreciation (depreciation) ................................. (14,501,049) 16,779,350
Accumulated net realized loss............................................... (3,176,202) (1,275,893)
Capital shares.............................................................. 69,530,626 143,527,953
-------------------------
Net assets, at value ........................................................ $51,722,171 $159,640,557
=========================

Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
Class I:
<S> <C> <C>
Net assets, at value.................................................. $45,003,340 $145,165,054
===============================
Shares outstanding.................................................... 5,017,688 9,589,337
===============================
Net asset value per share ............................................ $8.97 $15.14
===============================
Maximum offering price per share ($8.97 / 94.25%) .................... $9.52 $16.06
===============================
Class II:
Net assets, at value ................................................. $ 5,831,614
===========
Shares outstanding.................................................... 653,183
===========
Net asset value per share*............................................ $8.93
===========
Maximum offering price per share ($8.93 / 99.00%) .................... $9.02
===========
Advisor Class:
Net assets, at value ................................................. $ 887,217 $ 14,475,503
===============================
Shares outstanding.................................................... 98,523 955,300
===============================
Net asset value and maximum offering price per share ................. $9.01 $15.15
===============================

*Redemption price per share is equal to net asset value less any applicable
sales charge.
</TABLE>

See notes to financial statements.

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Statements (continued)

Statements of Operations
for the six months ended April 30, 1998 (unaudited)
<TABLE>
<CAPTION>

Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
Investment Income:
<S> <C> <C>
Dividends*................................................................ $ 600,903 $ 1,262,002
Interest ................................................................. 131,833 522,433
----------------------
Total investment income.................................................... 732,736 1,784,435
----------------------
Expenses:
Management fees (Note 3).................................................. 235,024 651,211
Distribution fees (Note 3)
Class I ................................................................... 59,724 138,605
Class II .................................................................. 22,518 --
Transfer agent fees (Note 3).............................................. 73,000 102,333
Custodian fees............................................................ 14,000 27,461
Reports to shareholders .................................................. 25,000 14,700
Registration and filing fees.............................................. 22,105 29,020
Professional fees ........................................................ 2,400 9,200
Other..................................................................... 2,038 1,033
----------------------
Total expenses............................................................. 455,809 973,563
----------------------
Expenses waived / paid by affiliate (Note 3) .............................. -- (40,009)
Net expenses.............................................................. 455,809 933,554
Net investment income...................................................... 276,927 850,881
----------------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments.............................................................. (3,200,543) (673,781)
Foreign currency transactions ........................................... 32,576 (27,004)
----------------------
Net realized loss ........................................................ (3,167,967) (700,785)
Net unrealized appreciation (depreciation) on investments ................ (4,030,505) 9,965,796
----------------------
Net realized and unrealized gain (loss) ................................... (7,198,472) 9,265,011
----------------------
Net increase (decrease) in net assets resulting from operations............ $(6,921,545) $10,115,892
======================

*Net of foreign taxes of $34,664 and $185,100 for the Pacific Growth Fund and
Foreign Smaller Companies Fund, respectively.
</TABLE>

See notes to financial statements.

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Financial Statements (continued)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>

Templeton Templeton
Pacific Growth Fund Foreign Smaller Companies Fund
------------------------------------------------------------
Six Months Six Months
Ended Ended
April 30, 1998 Year Ended April 30, 1998 Year Ended
(unaudited) October 31, 1997 (unaudited) October 31, 1997
------------------------------------------------------------
Increase (decrease) in net assets:
<S> <C> <C> <C> <C>
Operations:
Net investment income........................ $ 276,927 $ 560,017 $ 850,881 $ 1,954,247
Net realized gain (loss) from investments and
foreign currency transactions............... (3,167,967) 202,900 (700,785) 5,445,123
Net unrealized appreciation (depreciation)
on investments ............................. (4,030,505) (13,054,143) 9,965,796 2,802,188
------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations................... (6,921,545) (12,291,226) 10,115,892 10,201,558
Distributions to shareholders from:
Net investment income:
Class I..................................... (413,327) (436,548) (1,545,110) (1,719,949)
Class II.................................... (30,308) (1,123) -- --
Advisor Class............................... (10,570) (3,363) (62,412) --
Net realized gains:
Class I..................................... (255,870) -- (5,553,654) (3,465,592)
Class II.................................... (21,696) -- -- --
Advisor Class............................... (5,784) -- (199,828) --
Capital share transactions (Note 2):
Class I...................................... 11,066,833 (6,898,773) 21,494,369 48,596,181
Class II..................................... 4,049,351 2,795,305 -- --
Advisor Class................................ (356,163) 1,717,135 10,046,896 3,765,571
------------------------------------------------------------
Net increase (decrease) in net assets ....... 7,100,921 (15,118,593) 34,296,153 57,377,769
Net assets:
Beginning of period......................... 44,621,250 59,739,843 125,344,404 67,966,635
------------------------------------------------------------
End of period............................... $51,722,171 $44,621,250 $159,640,557 $125,344,404
============================================================
Undistributed net investment income/
(Distributions in excess of net investment
income) included in net assets:
End of period................................ $ (131,204) $ 46,074 $ 609,147 $ 1,365,788
============================================================
</TABLE>

See notes to financial statements.

FRANKLIN TEMPLETON INTERNATIONAL TRUST
Notes to Financial Statements (unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES

Franklin Templeton International Trust (the Trust) is registered under the
Investment Company Act of 1940 as an open-end, diversified investment company,
consisting of two Funds. The Funds and their investment policies are:

Templeton Pacific Growth Fund -- Seeks to provide long-term growth of capital by
investing in equity securities of which at least 65% trade on markets in the
Pacific Rim. Templeton Foreign Smaller Companies Fund -- Seeks to provide
long-term growth of capital by investing in an internationally diversified
portfolio of equity securities, of which at least 65% trade on markets in
countries other than the United States.

The following summarizes the Funds' significant accounting policies.

a. Security Valuation:

Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Trustees.

b. Foreign Currency Translation:

Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date. When
the Funds purchase or sell foreign securities they will customarily enter into a
foreign exchange contract to minimize foreign exchange risk from the trade date
to the settlement date of such transactions.

The Funds do not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.

Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.

c. Repurchase Agreements:

The Funds may enter into repurchase agreements, which are accounted for as a
loan by the Fund to the seller, collateralized by securities which are delivered
to the Funds' custodian. The market value, including accrued interest, of the
initial collateralization is required to be at least 102% of the dollar amount
invested by the Funds, with the value of the underlying securities marked to
market daily to maintain coverage of at least 100%. At April 30, 1998, all
outstanding repurchase agreements held by the Funds had been entered into on the
date.

1. SIGNIFICANT ACCOUNTING POLICIES (cont.)

d. Income Taxes:

No provision has been made for income taxes because each Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.

e. Security Transactions, Investment Income, Expenses and Distributions:

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.

Common expenses incurred by the Trust are allocated among the Funds based on the
ratio of net assets of each Fund to the combined net assets. Other expenses are
charged to each Fund on a specific identification basis.

Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.

f. Accounting Estimates:

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.

2. CAPITAL SHARES

The Pacific Growth Fund offers three classes of shares: Class I, Class II, and
Advisor Class shares, and the Foreign Smaller Companies Fund offers two classes
of shares: Class I and Advisor Class shares. The shares differ by their initial
sales load, distribution fees, voting rights on matters affecting a single class
and the exchange privilege of each class.

At April 30, 1998, there were an unlimited number of shares authorized ($.01 par
value). Transactions in the Funds' shares were as follows:
<TABLE>
<CAPTION>

Templeton Templeton
Pacific Growth Fund Foreign Smaller Companies Fund
Shares Amount Shares Amount
Class I shares:
<S> <C> <C> <C> <C>
Six months ended April 30, 1998
Shares sold...................................... 4,938,480 $46,304,565 3,184,135 $45,924,083
Shares issued on reinvestment of distributions... 62,066 565,399 443,165 5,996,025
Shares redeemed.................................. (3,748,539) (35,803,131) (2,113,498) (30,425,739)
Net increase..................................... 1,252,007 $11,066,833 1,513,802 $21,494,369
</TABLE>

2. CAPITAL SHARES (cont.)
<TABLE>
<CAPTION>
Templeton Templeton
Pacific Growth Fund Foreign Smaller Companies Fund
Shares Amount Shares Amount
Class I shares (cont.):
<S> <C> <C> <C> <C>
Year ended October 31, 1997
Shares sold ..................................... 5,435,941 $76,600,239 5,719,497 $85,126,909
Shares issued on reinvestment of distributions... 24,706 372,583 327,209 4,482,693
Shares redeemed.................................. (5,815,156) (83,871,595) (2,764,102) (41,013,421)
Net increase / (decrease)........................ (354,509) $ (6,898,773) 3,282,604 $48,596,181
</TABLE>

Templeton
Pacific Growth Fund
Shares Amount
Class II shares:
Six months ended April 30, 1998
Shares sold...................................... 794,528 $ 7,367,848
Shares issued on reinvestment of distributions... 5,070 45,989
Shares redeemed.................................. (359,838) (3,364,486)
Net increase..................................... 439,760 $ 4,049,351

Templeton
Pacific Growth Fund
Shares Amount
Year ended October 31, 1997
Shares sold...................................... 505,147 $ 6,723,229
Shares issued on reinvestment of distributions... 69 1,034
Shares redeemed.................................. (291,793) (3,928,958)
Net increase..................................... 213,423 $ 2,795,305
<TABLE>
<CAPTION>

Templeton Templeton
Pacific Growth Fund Foreign Smaller Companies Fund
Shares Amount Shares Amount
Advisor Class:
<S> <C> <C> <C> <C>
Six months ended April 30, 1998
Shares sold...................................... 181,625 $ 1,660,000 835,138 $11,812,788
Shares issued on reinvestment of distributions... 1,697 15,461 19,004 257,318
Shares redeemed.................................. (209,496) (2,031,624) (145,734) (2,023,210)
Net increase / (decrease)........................ (26,174) $ (356,163) 708,408 $10,046,896

Templeton Templeton
Pacific Growth Fund Foreign Smaller Companies Fund
Shares Amount Shares Amount
Year ended October 31, 1997
<S> <C> <C> <C> <C>
Shares sold...................................... 126,880 $ 1,745,974 400,189 $ 6,248,096
Shares issued on reinvestment of distributions... 218 3,308 458 6,889
Shares redeemed.................................. (2,401) (32,147) (153,755) (2,489,414)
Net increase..................................... 124,697 $ 1,717,135 246,892 $ 3,765,571
Effective date of Class II and Advisor Class Shares was January 2, 1997.
</TABLE>

3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

Certain officers of the Trust are also officers and/or directors of Franklin
Advisers, Inc. (Advisers), Franklin/Templeton Distributors, Inc. (Distributors)
and Franklin/Templeton Investor Services, Inc. (Investor Services), the Funds'
investment manager, principal underwriter and transfer agent, respectively.

The Funds pay an investment management fee to Advisers based on the average
daily net assets of each Fund as follows:

Annualized
Fee Rate Average Daily Net Assets
1.00% First $100 million
0.90% Over $100 million, up to and including $250 million
0.80% Over $250 million, up to and including $500 million
0.75% Over $500 million

Under a subadvisory agreement, Templeton Investment Counsel, Inc. a wholly-owned
subsidiary of Franklin Resources, Inc., provides subadvisory services to the
Funds and receives from Advisers fees based on the average daily net assets of
the Funds as follows:

Annualized
Fee Rate Average Daily Net Assets
0.50% First $100 million
0.40% Over $100 million, up to and including $250 million
0.30% Over $250 million, up to and including $500 million
0.25% Over $500 million

Effective March 1, 1997, Advisers agreed in advance to reduce fees to the extent
necessary to limit total expenses of the Templeton Foreign Smaller Companies
Fund to an annual rate of 1.45% and 1.20% of the average daily net assets of
Class I and Advisor Class shares, respectively, as noted in the Statement of
Operations.

The Templeton Pacific Growth Fund reimburses Distributors up to 0.25% and 1.00%
per year of the average daily net assets of Class I and Class II shares,
respectively, for costs incurred in marketing the Fund's Class I and Class II
shares. The Templeton Foreign Smaller Companies Fund reimburses Distributors up
to 0.25% per year of the average daily net assets of Class I shares, for costs
incurred in marketing the Fund's Class I shares.

Distributors received net commissions on sales of Fund shares and paid
commissions to other dealers for the six months ended April 30, 1998 as follows:

Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
Total commissions received ......... $360,792 $286,579
Paid to other dealers .............. $314,111 $244,626

4. INCOME TAXES

The cost of securities for income tax purposes is the same as that shown in the
Statement of Investments. At April 30, 1998, the net unrealized appreciation
(depreciation) based on cost of investments for income tax purposes was as
follows:

Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
Unrealized appreciation............. $ 3,103,451 $29,043,099
Unrealized depreciation............. (17,604,500) (12,263,749)
Net unrealized appreciation (depreciation)$(14,501,049) $16,779,350

Net investment income differs for financial statement and tax purposes primarily
due to differing treatments of foreign currency transactions.

5. INVESTMENT TRANSACTIONS

Purchases and sales of securities (excluding short-term securities) for the six
months ended April 30, 1998 were as follows:

Templeton Templeton
Pacific Foreign Smaller
Growth Fund Companies Fund
Purchases........................... $19,795,842 $27,485,446
Sales .............................. $ 3,425,516 $ 15,191,875

Franklin Templeton International Trust - Templeton Pacific Growth Fund
Semi-Annual Report
April 30, 1998

APPENDIX
DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING (PURSUANT TO ITEM
304 (a) OF REGULATION S - T)

[BAR CHART]

GRAPHIC MATERIAL (1)

This chart illustrates in bar format the geographic distribution of holdings
of Templeton Pacific Growth Fund, based on total net assets as of April 30,
1998.

Hong Kong 25.9%
Japan 20.0%
Singapore 10.4%
Australia 8.4%
India 4.2%
Malaysia 4.2%
China 3.6%
Pakistan 3.1%
New Zealand 3.0%
Philippines 2.9%
South Korea 2.7%
Thailand 2.2%
Indonesia 0.9%
Short-Term Investments & Other Net Assets 8.5%

RAPHIC MATERIAL (2)

This charts lists the top 10 industries of Templeton Pacific Growth Fund,
based on total net assets as of April 30, 1998.

Transportation 10.5%
Banking 8.5%
Multi-Industry 8.4%
Telecommunications 6.8%
Electrical & Electronics 6.4%
Metals & Mining 5.7%
Construction & Housing 5.7%
Real Estate 5.4%
Industrial Components 3.9%
Merchandising 3.8%

[TOP HOLDINGS]

GRAPHIC MATERIAL (3)

This chart lists the top 10 holdings, including industry and country, of
Templeton Pacific Growth Fund, based on total net assets as of April 30, 1998.

Johnson Electric Holdings Ltd., Electrical & Electronics, Hong Kong 3.1%
Hong Kong Telecommunications, Telecommunications, Hong Kong 2.7%
Singapore Airlines Ltd., Transportation, Singapore 2.6%
Fuji Heavy Industries Ltd., Industrial Components, Japan 2.6%
City Developments Ltd., fgn., Construction & Housing, Singapore 2.4%
HSBC Holdings Plc., Banking, Hong Kong 2.2%
Cheung Kong Holdings Ltd., Multi-Industry, Hong Kong 2.2%
Industrial Credit & Investment Corp. of India,
GDR, 144A, Financial Services, India 2.0%
WMC Ltd., Metals & Mining, Australia 1.9%
Overseas Union Bank Ltd., Banking, Singapore 1.9%

GRAPHIC MATERIAL (4)

This charts illustrates in pie format the geographic distribution of holdings
of Templeton Foreign Smaller Companies Fund, based on total net assets as of
April 30, 1998.

Europe 50.8%
Asia 11.3%
Latin America 6.3%
Australia & New Zealand 6.0%
North America 5.4%
Mid-East & Africa 3.4%
Short-Term Investments & Other Net Assets 16.8%

[SECTOR BREAKDOWN]

GRAPHIC MATERIAL (5)

This chart lists the top 10 industries of Templeton Foreign Smaller Companies
Fund, based on total net assets as of April 30, 1998.

Merchandising 11.1%
Food & Household Products 7.1%
Building Materials & Components 6.1%
Banking 5.3%
Broadcasting & Publishing 4.5%
Industrial Components 4.4%
Metals & Mining 4.3%
Business & Public Services 3.8%
Multi-Industry 3.7%
Transportation 3.3%

[TOP HOLDINGS]

GRAPHIC MATERIAL (6)

This chart lists the top 10 holdings, including industry and country, of
Templeton Foreign Smaller Companies Fund, based on total net assets as of
April 30, 1998.

Hazlewood Foods Plc., Food & Household Products, United Kingdom 1.7%
Sa des Galaries Lafayette, Merchandising, France 1.6%
GTC Transcontinental Group Ltd., Broadcasting & Publishing, Canada 1.5%
Lex Service Plc., Business & Public Services, United Kingdom 1.3%
Techtronic Industries Co. Ltd., Electrical & Electronics, Hong Kong 1.3%
Perkins Foods Plc., Food & Household Products, United Kingdom 1.2%
Weir Group Plc., Industrial Components, Hong Kong 1.2%
Thorn Plc., Merchandising, United Kingdom 1.2%
Bank Austria AG, new, pfd., 144A, Banking, Austria 1.2%
Moebel Walther AG, Merchandising, Germany 1.2%