Kadafi Threatens Bonn on Plant Fire : Libya: The strongman says he will retaliate if West Germany was responsible for damage to the suspected poison gas facility.

Libyan leader Moammar Kadafi threatened Thursday to retaliate against West Germany if that country helped to instigate a fire at a controversial chemical plant near Tripoli, but he angrily denied that Libya had been producing chemical weapons at the facility.

Although Kadafi stopped short of directly accusing West Germany of a role in the crippling fire, hundreds of Libyan demonstrators massed outside the West German Embassy in Tripoli on Thursday, declaring that West German intelligence agents were responsible.

As to whether the plant turned out chemical weapons, Kadafi repeated his country’s denials.

“If Libya could manufacture them, it would not have hesitated,” he said in a statement broadcast by Tripoli Radio. “However, Libya on its own and by its own efforts needs another 20 years to produce a chemical bomb.”

He went on to offer a multimillion-dollar contract “to anyone who could build a chemical factory for Libya.”

Kadafi pointedly did not mention the extent of the damage from the Wednesday morning industrial fire at the plant near Rabta, about 60 miles southwest of Tripoli, where U.S. officials believe Libya has produced deadly mustard gas and nerve gas since last year.

U.S. and Arab authorities said there are indications that the plant, which Libya insists is used only to manufacture pharmaceuticals, was heavily damaged by fire, and Libya’s official news agency Jana reported, “Most of the factory has been destroyed.”

On Wednesday, the agency had accused Israel and the United States of sabotaging the plant, but Kadafi’s subsequent statement targeted only West Germany. After more than 1,000 Libyan demonstrators marched outside the West German Embassy, a diplomatic source in Tripoli said the Libyans accused West German intelligence agents of leaking details about the plant’s design to the United States, implying that U.S. agents could then have sabotaged the plant.

“If the investigation under way confirms the involvement of West German intelligence in an action inside Libya, the economic presence of Germany will be eliminated from Libya,” Kadafi warned.

Demonstrators outside the embassy carried signs proclaiming “Germans Are Spies and Liars,” “Germans Out” and “Germany Down, Kadafi’s Our Leader,” prompting the Foreign Ministry in Bonn to summon a Libyan diplomat and complain about harassment of West German diplomats. Bonn’s embassy in Tripoli delivered a response denying any complicity in the fire.

“The accusation lacks reality, and . . . any suggestion that any German citizen or West German intelligence was involved (is) pure invention,” a Foreign Ministry spokesman said in Bonn.

Israel and the United States have also denied any involvement. U.S. officials acknowledged that Israel has both the capability and the motive to destroy the plant but said they had no information to link Israel to the incident.

U.S. officials said they have received credible reports that Libyan authorities arrested several suspects Wednesday on suspicion of involvement in the fire.

The U.S. government has made no secret of its opposition to the chemical plant, and one U.S. official responded privately Thursday to news of the fire with the happy observation that “the ‘Force’ is with us.”

Official Washington reaction, however, was much more neutral.

“We don’t know the origins of the fire,” White House Press Secretary Marlin Fitzwater told reporters in Washington. “We don’t know if it was sabotage. We don’t have any idea who did it. . . . Somebody could have knocked over a kerosene lamp or something.”

In fact, “a lot of people” in the intelligence agencies believe that the fire was caused by an industrial accident, said one Administration official privy to intelligence reports on the issue. “They have had at least two” accidents in the past, the official noted, adding that “it would be consistent with the pattern.”

One of the accidents, two years ago, led to the release of gas and the killing of a large number of dogs in the vicinity of the plant.

When that accident occurred, workers at the plant made frantic telephone calls to the firm in West Germany that helped in the construction. The calls were intercepted by U.S. agents and were a prime source of U.S. information that the plant was, in fact, producing gas and that the West German company had been involved. The firm, Imhausen-Chemie, is under investigation by the Bonn government over the affair.

The official cautioned, however, that the accident theory on the fire was not a “consensus view” and that some analysts continue to believe that the plant was sabotaged.

American officials based their damage estimates on satellite photographs of the plant. Fitzwater said that damage to the plant appeared to be so serious that the facility is not able to function. “Common sense would tell you it’s not functioning,” he said.

A senior Egyptian intelligence official said Thursday: “What we know is there is big damage.”

But Arab authorities have been unable to secure reliable information about the extent of the damage or whether anyone was injured, the Egyptian official said. “It’s impossible,” he said. “ . . . It’s in the desert; nobody knows.”

The British news service Reuters quoted unidentified Libyan officials as saying two people were killed in the fire, but the Libyan news agency said later that there were no casualties. U.S. officials said they had no firm information on civilian casualties around the plant, but they noted that fire would not be expected to spread poison gas.

“Mustard and nerve chemical agents are highly flammable and easily destroyed by fire,” said a Pentagon spokesman, Maj. Robin Higgins. “The hotter the fire, the faster the agents would be destroyed. Chemical contamination seems highly unlikely, since the best way of getting rid of mustard gas is by burning.”

Diplomats in Tripoli and elsewhere in the region said a variety of rumors were circulating, including reports that a commando team had crossed the border into Libya from Tunisia. But none ruled out the possibility of an industrial accident. In Cairo, an anonymous caller claiming to represent the previously unknown National Wing of the Libyan Army, perhaps a Libyan dissident group, claimed in a call to a West German television office to have started the fire “after making sure the plant was making chemical and nuclear material.”

Egypt’s semiofficial Middle East News Agency carried a statement from the Cairo-based Egyptian Committee for Afro-Asian Solidarity condemning what the group termed an apparent act of sabotage “aimed at distracting world attention away from the chemical and nuclear weapon arsenals that Israel possesses.”

“We do not exclude the involvement of the United States and Israel in this sabotage, particularly as President Bush had threatened to launch a military action against the plant,” the statement said.

U.S. officials last week refused to rule out use of military force against the Libyan plant, which Fitzwater described as “dangerous and becoming more so.” West Germany charged in a statement last week that Libya had produced 30 tons of mustard gas in a test run at the facility.

But Kadafi said Thursday that Libya has signed agreements banning the proliferation of “weapons of total destruction and their use” and that Libya would be entitled to build such a facility under international law.

“I challenge any company or state to come to Libya to build a chemical factory,” he said. “Then I would personally sign the contract without hesitation, and I would have paid 1 billion to anyone who could build a chemical factory for Libya, because the world has not yet forbidden that.” In Kadafi’s offer of money, it was unclear what currency he referred to.

International law prohibits the use of chemical weapons but not their manufacture or stockpiling. The United States and Soviet Union both have sizable stockpiles of the weapons.

“Libya is a civilized and Muslim country which fears only God and respects international treaties and laws,” he added. “There is nothing to be gained from being hostile to Libya. What is beneficial is to sit down and to negotiate with Libya.”

If Kadafi carries out his threat to eliminate West Germany’s economic presence from his country, the loss would not be vital to the West Germans, whose interests there are confined to oil exploration on a relatively small scale and a limited involvement in contracting. East Germany, on the other hand, has long had close ties to the Kadafi regime, and its security forces have been deeply involved in providing him protection.

U.S.-Libyan relations in recent years have been vitriolic, with Washington accusing Kadafi’s regime of supporting international terrorism. American and Libyan warplanes have tangled over the Mediterranean on two occasions, with the loss of four Libyan planes. In April, 1986, responding to reports of Libyan involvement in the bombing of a West German discotheque that took the lives of two Americans, U.S. warplanes bombed Tripoli and Benghazi, with 37 Libyans and two American airmen reported killed.

One senior U.S. official said the apparent large-scale damage to the plant has “opened up a whole new set of options” for the American government in denying Libya the ability to produce chemical weapons.

While U.S. efforts in recent months have focused on rallying international support to deny Libya critical “precursor chemicals” and the missile technology to deliver chemical weapons, the fire could allow the United States to “start from the beginning” and try to prevent the Libyans from getting the material to rebuild its factory.

But the official stressed that the incident was the result of a happy coincidence, not U.S. sabotage.

“Isn’t life wonderful?” the jubilant official asked. “The ‘Force’ is with us. We’re on a roll.”

Times staff writers David Lauter, Melissa Healy and Doyle McManus in Washington and William Tuohy in Bonn contributed to this article.