Iraq Threatens Israel With Use of Nerve Gas : Mideast: Leader denies nuclear capability but says he would destroy ‘half’ his adversary if attacked.

Iraqi President Saddam Hussein declared Monday that his military machine has nerve gas and the means to deliver it, threatening to destroy “half of Israel” if it attacks Iraqi targets.

In an escalating war of words with the West, the truculent Iraqi leader rejected American and British charges that his government is attempting to make a nuclear weapon, adding menacingly: “We don’t need an atomic bomb, because we have the double chemical,” a clear reference to binary chemical warheads or nerve gas.

“I swear to God that if Israel dares to hit even one piece of steel on any industrial site, we will make the fire eat half of Israel,” Hussein warned in a mid-afternoon address broadcast over state radio.

Since last Wednesday, when five alleged Iraqi agents were arrested in London attempting to ship smuggled nuclear-trigger devices to Baghdad, Hussein’s government has portrayed the case as a pretext for Israel to attack Iraqi military targets. In 1981, Israeli warplanes bombed a nuclear reactor outside Baghdad in an attempt to quash an alleged Iraqi atomic weapons program.

The arrests, culminating an 18-month sting operation by U.S. authorities, were designed “to pave the way for an aggression against Iraq which reminds us of 1981, when a similar fevered propaganda campaign prepared the ground for the Israeli attack on Iraqi scientific installations,” Deputy Foreign Minister Nizar Hamdoon charged Friday. That same day, Hussein claimed that hostile Western forces were “escalating their plots against Iraq.”

In Jerusalem, Israel reacted with defiance to Hussein’s threat to use chemical weapons. “Israel can deter any aggression and if necessary defend itself,” Avi Pazner, a spokesman for Prime Minister Yitzhak Shamir, told The Times. “I recommend to Iraq that it talk and act with restraint.”

In his speech Monday, the Iraqi leader denied again that the Baghdad government is attempting to build a nuclear bomb. “Do they think the $10,500 worth of triggers were enough to produce atomic bombs?” he said. “What nonsense. . . . I categorically deny that we have any atomic bombs, but let them (Iraq’s critics) hear here and now that we do possess binary chemical weapons, which only the United States and the Soviet Union also have.”

Iraqi spokesmen have admitted using chemical weapons against Iranian troops in their eight-year war that ended in a tense, forced truce in 1988, but never specifically have said that Iraqi forces had nerve gas.

Outside investigators, who examined Iranian soldiers and Iraqi Kurds who claimed to have been victims of Iraqi poison gas attacks during and immediately after the war, reportedly found evidence that both mustard gas and some nerve agent were used. Impartial investigators also have reported that the Iranians used gas weapons during the war.

Pazner, the Israeli spokesman, charged Monday that “Iraq has proven its barbaric conduct by using non-conventional weapons against its own citizens,” a reference to the attacks on Kurdish rebels in northeast Iraq in the months after the truce.

In Washington, State Department spokeswoman Margaret Tutwiler said that if Hussein was quoted accurately, the speech was “inflammatory, irresponsible and outrageous.”

However, Tutwiler said that U.S. analysts want to read the full text of the speech to make sure “what we have seen out of press reports is in context and accurate.”

Tutwiler’s statement, even with the “if true” qualification, was the State Department’s strongest criticism of Iraq in many months. Last week after the nuclear-trigger case came to light, the department limited itself to a general statement about the dangers of nuclear proliferation without accusing Hussein’s government of trying to manufacture a nuclear bomb.

Defense Secretary Dick Cheney on Monday termed Iraq “one of the most menacing nations” in the world today but said that “at this point,” he is not prepared to recommend economic retaliation against Iraq.

There are still “unfriendly nations,” such as Iraq, that will continue to pose a threat to U.S. national security even as the threat from the Soviet Union diminishes, Cheney said in an interview with a group of reporters.

Andrew Duncan, a military analyst at London’s International Institute for Strategic Studies, commenting on Hussein’s speech in a telephone interview, defined binary weapons as warheads containing two compounds that become lethal once they are combined on detonation. The phrase binary weapons generally refers to nerve gas, he said.

During the war, Duncan noted, the Iraqis delivered chemical agents in aerial bombs, but Iraq would be hard-pressed to reach Israeli territory with bombers. The most threatening delivery system would be a missile warhead, and Iraq has reportedly deployed a missile capable of reaching Israeli soil, a version of the Soviet-designed Scud B reconfigured for longer range, which the Iraqis call the Hussein missile.

Defense against this weapon would be “very difficult,” Duncan said, noting that the Israelis have yet to deploy two anti-missile systems they have under study, the American-made Patriot missile or the Israeli-designed Arrow system.

“It’s a constant war of nerves,” he said of the verbal exchanges between Baghdad and Jerusalem, describing Hussein’s remarks as “good propaganda, saber-rattling stuff.” The Iraqis, Duncan concluded, were “obviously afraid that Israel might try to take out its military establishments.”

Israel is also obviously concerned about Hussein’s modern military machine and the Arab efforts to develop a chemical warfare capability, the so-called poor-man’s atomic bomb.

Nuclear or chemical retaliation by its Middle East enemies poses a threat to Israel’s audacious “long-reach” preemptive strikes like the 1981 attack on the Iraqi reactor. So far, the Arab forces have had no weapons capable of making Israel pay a price in lives in return for a preemptive strike.

The Israeli advantage is underscored by its own nuclear deterrent. Though the Israeli government will not concede that it has nuclear weapons, outside experts estimate that the Israeli military has scores of nuclear warheads, deliverable either by aircraft or the 400-mile-range Jericho missile and its 900-mile-range, recently developed companion, the Jericho II.

With Iraq, Iran, Libya, Syria and possibly Egypt now possessing or developing a chemical warfare capability, Israel has undertaken a civil defense program against possible gas attack. In a Jerusalem drill earlier this year, warning sirens sent schoolchildren diving under their desks and donning gas masks while ambulances raced through the city in mock rescue operations.

The 52-year-old Hussein, in his address Monday, charged that the United States, Britain and other Western powers were behind what he called a conspiracy that could end in an Israeli attack.

“The big powers seem to have decided to play the game themselves and directly,” he said, in apparent reference to the arrests in London and subsequent U.S. accusations that Iraq sought to smuggle the nuclear-detonator parts to Baghdad.

“Let the one who wants to try his luck, let him try,” taunted Hussein, who has turned increasingly belligerent since the smuggling case and earlier Western outrage over Iraq’s execution last month of a British journalist accused of spying for Britain and Israel.

“Israeli, American and English intelligence agents used to come to us with bags full of enriched uranium every other day,” he told his radio audience. “They used to come every day to tell us: Don’t you want to make an atomic bomb? We used to say: ‘Leave us alone, keep your evil away from us and take your bags with you. . . . Go away because we do not need an atomic bomb, for we have the sophisticated binary chemical weapons.’ ”

Baghdad, said the commander of the Arab world’s mightiest military machine, has no intention of attacking any other country, but he warned: “If an insect tries to advance toward Iraq or wage aggression against it, we will cut its tail from the back, its head from the front and leave only its middle.”

Nick Williams reported from Cyprus and Daniel Williams reported from Israel. Times staff writers Jack Nelson and Norman Kempster, in Washington, contributed to this report.