U.S. Buoyed by Impact of Economic Embargo : Sanctions: The squeeze is working, officials say. They also report that 500 Americans have fled Kuwait.

With U.S. Navy ships in place to enforce an undeclared blockade, the economic embargo of Iraq is having an “excellent” impact as the United States tries to squeeze Iraqi President Saddam Hussein, the White House said Monday.

As Administration officials focused on the impact of the sanctions on Iraq, the State Department revealed in Washington that about 500 Americans trapped in Kuwait by Iraq’s Aug. 2 invasion have made their way to freedom, despite Iraq’s continued refusal to permit the departure of Westerners in the occupied country.

The U.S. military buildup in Saudi Arabia appeared to continue at an unrelenting pace, with aircraft reportedly arriving at the rate of one every 10 minutes. Six days after the United States began the large, open-ended Operation Desert Shield, an estimated 10,000 American troops are already in position in the hostile desert. One soldier said the troops were being told to prepare for a stay of four to six months.

President Bush, meanwhile, ordered Defense Secretary Dick Cheney on a new mission to Saudi Arabia to meet with troops there and to confer again with Saudi leaders. The Pentagon chief is to leave for the tense region Friday.

Bush’s spokesman held firmly to the President’s declaration Sunday that no food would be permitted into Iraq. The embargo approved by the U.N. Security Council last week exempted supplies entering Iraq for “medical or humanitarian reasons.” It was unclear whether Bush’s interpretation of the embargo exceeded the intent of the U.N. resolution.

A British source said that members of the U.N. Security Council raised questions Monday about whether the Americans “were overstepping the mark with the blockade.” The source said the council reminded Washington that the resolution imposing the embargo did not envision use of military force to enforce it.

A senior State Department official said that U.S. representatives “made clear that we do not consider (the U.N. embargo resolution) as an independent legal basis for naval interdiction.” But the official said the United States has the legal authority to act in response to Sunday’s request from the ousted emir of Kuwait for military help in enforcing the embargo. He said Article 51 of the U.N. Charter permits individual and collective acts of self-defense.

Reuters news agency quoted U.N. Secretary General Javier Perez de Cuellar as saying that the Security Council did not authorize a blockade, but every country has a right to invoke Article 51.

White House Press Secretary Marlin Fitzwater said: “The purpose of the sanctions and the embargo is to put the pinch on them. The purpose is to not let supplies go in that allow them to maintain the war machine.” But he said the embargo does not cover strictly medical supplies.

“Ships are not arriving; the embargo is being maintained,” Fitzwater said, announcing that “two or three ships” had turned away and were unable to unload cargo bound for Iraq.

State Department spokeswoman Margaret Tutwiler said food shortages have begun to affect Baghdad. Nevertheless, she said the situation is not yet so critical that food must be sent for “humanitarian reasons.”

A senior State Department official said: “If the situation gets like Ethiopia, we would allow food to go through. But there are no three-pound people there now.”

“We’ll watch this situation as it goes along. We have obvious humanitarian concerns, but we have also very real military concerns,” Fitzwater said.

Meanwhile, the Administration continued to avoid using the word “blockade,” describing its readiness to intercept Iraqi shipping as an “interdiction.” A declared blockade is considered an act of war under international law.

Although the embargo has shut down shipments of oil from Iraqi and Kuwaiti ports, there is a significant amount of oil from both countries that has still not reached its destinations.

The Department of Energy estimates that about 100 million to 150 million barrels of Iraqi and Kuwaiti oil is on the high seas, with about 40 million barrels destined for the United States. Buyers are free to take delivery as long as they paid for at least part of the shipment before Aug. 2, when the freeze went into effect, and receive it by Oct. 1.

The optimistic reports from the Middle East concerning the blockade led White House officials who accompanied Bush on his annual summer vacation here to offer an upbeat picture.

The United States has an armada of more than 40 warships in or en route to the region, including the carriers Eisenhower, Independence and Saratoga. The aircraft carrier John F. Kennedy is to set sail Friday.

In all, officials have said that U.S. troop strength in the region could reach 100,000 within the coming months.

Calling the current force “an extremely effective deterrent,” Pentagon spokesman Pete Williams said: “I think Saddam Hussein would regret a decision to invade Saudi Arabia no matter when he carried it out.”

But although there has been no military contact between U.S. and Iraqi forces, there is also no sign of a peaceful resolution on the horizon. Indeed, Fitzwater cautioned that Hussein’s troops remain massed on Kuwait’s border with Saudi Arabia.

“They are very close and continue to be threatening,” he said.

Williams estimated that Iraqi forces in Kuwait now number about 150,000. He added that those troops are “still in a defensive posture” but are “consolidating their position.”

Meanwhile, even as Tutwiler disclosed that 500 Americans had escaped Kuwait, Fitzwater made it clear that prospects for freedom of those remaining in the occupied land, about 2,500, are uncertain.

“It does not appear that any non-official citizens are being allowed to leave,” the President’s spokesman said. “We now have cars lined up at the Saudi border . . . unable to get out.”

Tutwiler refused to say how the 500 Americans gained their freedom, although they almost certainly crossed the border with Saudi Arabia secretly and in small groups.

“There are any number of ways that Americans and other foreign nationals have gotten out,” she said.

Between 500 and 600 private American citizens also remain in Iraq, Tutwiler said, including 27 diplomats and their families.

She also reported that the Iraqi government has said the diplomats and their dependents in both countries are free to go and that some of them will do so soon. The diplomats have not been harassed in any way, she said.

The United States does not plan to close either embassy, Tutwiler said. Fitzwater portrayed the U.S. Embassy in Baghdad as a focal point of ongoing U.S. contact with Iraqi authorities. He said that such contacts take place hourly.

Iraq’s announcement that it would facilitate the travel of non-diplomatic foreigners who want to leave the country apparently applies only to Africans, South Asians and Latin Americans, the State Department spokeswoman said.

However, she said that news reports of the Iraqi claim resulted in a large number of Americans traveling to the Saudi Arabian border with the expectation that they would be allowed to cross. Citing reports from U.S. diplomats, she said between 40 and 50 automobiles filled with Americans were stopped at the border.

The crisis has prompted a shuttling of officials between vacation homes and Washington.

Bush, who spent a sunny day on the grounds of his 11-acre compound along the Atlantic Ocean, plans to return to Washington today for a meeting with senior advisers on the budget and other domestic issues. On Wednesday, he has scheduled a Pentagon briefing on Middle East developments before returning to Maine at midday.

And Baker plans to leave Washington on Thursday for a vacation at his ranch in Wyoming. His spokesman said that he would travel with “a full communications package” and could return to his office within four hours.

Gerstenzang reported from Kennebunkport and Kempster reported from Washington. Staff writers Tom Redburn, Melissa Healy and Don Shannon contributed to this report from Washington.

More on Gulf Crisis

HUSSEIN’S IRAQ--Iraqis could appreciate Hussein’s rule after years of upheaval. But Hussein’s Iraq is also a place of fear. A6

JORDAN’S STANCE--Jordan’s King Hussein, a cautious friend of the West, risked conflict with the U.S. by aligning with Iraq. A7

SOVIETS IN IRAQ--Soviet officials denied reports that said their military advisers were aiding the Iraqi army. A7

WORTH FIGHTING FOR?--If Hussein overruns Saudi Arabia, he would control 45% of the Earth’s oil reserves. H1