Iraq Pulling Its Troops Out of Iran Territory : Persian Gulf: Baghdad sends home 1,000 POWs. The U.S. Navy intercepts two merchant ships.

Iraqi troops began withdrawing from Iranian territory Friday, and the first 1,000 Iranian prisoners of war were sent home.

Iraqi President Saddam Hussein, on schedule, delivered on his promise of peace after a decade of war and hostile truce, clearing the decks for a possible confrontation with other foes over his occupation of Kuwait.

The withdrawal from Iran started at 5 a.m., with troops pulling out of a 1,000-square-mile salient on the central front around the war-torn town of Mehran, captured in a final Iraqi offensive in the 1980-88 war. No figures were given on the number of troops involved Friday; the withdrawal is expected to be completed by Tuesday.

The release of Iranian POWs--to an exultant welcome--took place farther north on the border, at the town of Qasr-e Shirin on the main Baghdad-Tehran road.

In a surprise move Wednesday, the Iraqi president gave Iran peace on Iran’s terms, ending a conflict that began with his invasion of Iran’s southwestern provinces a decade ago. Iraqi officials said Thursday that peace with Iran will free 30 Iraqi divisions, at least 300,000 men, for possible use in the crisis over Kuwait.

Western military spokesmen said the Iraqi armored troops in Kuwait--estimates have ranged from 120,000 to 160,000--were still in defensive positions north of the frontier with Saudi Arabia. They said it is doubtful that Hussein will shift the entire force withdrawn from the Iranian border south to the new front with Saudi Arabia. The Saudi rulers fear that Iraq, with Kuwait absorbed, may want to repeat its Aug. 2 invasion by pushing into the kingdom to the south.

A force of 66,000 Saudi regulars, supported by 25,000 Americans with more on the way, 5,000 Egyptians and 1,000 Moroccans, have “drawn a line in the sand” at the Kuwaiti border. Behind them are more than 160 American and British warplanes and a carrier-led Western naval force.

As the strictures tightened on trade with Baghdad, two Iraqi vessels were intercepted Friday by U.S. Navy ships but were allowed to proceed when they were found to be empty, Reuters news service quoted the Pentagon as saying. There was no immediate reaction from Iraq.

It was the first known interception of Iraqi vessels in the gulf since the United States ordered its Navy to begin enforcing the U.N. embargo.

The guided missile cruiser England and the frigate Bradley challenged the Iraqi vessels, then let them proceed without boarding after a visual inspection, the Defense Department said.

The U.S. and British governments had announced Thursday that they will use whatever force is necessary to choke off seaborne supplies for Iraq.

“If (cargo ships) refuse to stop, then we will use the measures necessary to ensure that they comply with the sanctions,” Pentagon spokesman Pete Williams said in Washington, referring to the U.N. Security Council decision to embargo trade with Iraq because of its invasion of Kuwait.

Iraq promptly declared that any interception of ships at sea would be “flagrant piracy” and vowed that it would retaliate. U.S. and British officials insisted, however, that the noose will be tightened until Iraq withdraws from Kuwait and the oil-rich little sheikdom’s rulers are allowed to return.

At the Suez Canal, Egyptian officials said they had permitted the passage of an Iraqi freighter carrying a cargo of food. They said the U.N. embargo did not prevent the vessel, the Zein al Qaws, from using the waterway to get from the Mediterranean to the Red Sea.

The freighter’s destination was not disclosed, but a likely port is Aqaba, Jordan’s port on an arm of the Red Sea, where a large convoy of trucks carrying food for Iraq moved out earlier this week. President Bush said Thursday after meeting in Maine with Jordan’s King Hussein that the king had agreed to enforce the sanctions at Aqaba, but other U.S. officials expressed skepticism that the monarch will follow the sanctions to the letter. Jordan is heavily dependent on Iraq for oil imports and other trade.

Four foreign tankers, including two Iraqi-flag ships, were still anchored off Muajjiz, Saudi Arabia, the terminus of an Iraqi oil pipeline. Saudi officials have refused to allow the tankers to tie up at the loading platform and on Friday reportedly turned down a request from one of the Iraqi ships, the Al Faw.

Despite the pressure, Iraq on Friday switched back to normal programming on Baghdad Radio after two weeks of patriotic music in the aftermath of the Kuwaiti invasion. No explanation was given, according to a news agency in Nicosia that monitors Iraqi broadcasting.

The monitors also reported a radio announcement that the curfew in Kuwait had been shortened. Baghdad said the new curfew will be from 11 p.m. to 7 a.m. It had been going into effect at 7 p.m. Again, there was no explanation.

Meanwhile, Saudi Arabia’s call for an emergency meeting of the Organization of Petroleum Exporting Countries, the oil cartel, was facing resistance. Saudi Oil Minister Hisham Nazir, who asked for the meeting Thursday, said that OPEC should deal with oil shortages caused by the embargo on supplies from Iraq and occupied Kuwait. The ministers of Nigeria, Ecuador and Indonesia reportedly oppose the move.

Despite rising prices, oil analysts said, a number of OPEC producers favor maintaining current production quotas until a six-month supply of oil on the world market is drained.

On the Iran-Iraq border, Tehran Radio reported, the first Iranian POWs to return were weeping with joy and kissed Iranian soil that some had not touched for a decade.

“This is the result of 10 years of patience and resistance,” a Tehran Radio broadcast said.

The Iranian news agency said a group of Iraqi prisoners had been taken to the border and would be handed over to Iraqi authorities.

Iraqi President Saddam Hussein capitulated to Tehran’s peace demands Wednesday, saying he was giving Iranian President Hashemi Rafsanjani “everything you wanted.” He agreed to withdraw his troops from Iranian soil, exchange POWs and return to Iranian sovereignty the eastern half of the Shatt al Arab, the waterway that forms the frontier separating the two countries in the south.

U.N. officials estimate that 60,000 Iraqis and 30,000 Iranians were held as POWs. In the two years of uneasy truce, only a few hundred injured or ill prisoners were repatriated. No formal peace treaty has been signed, but Hussein’s concessions have presumably cleared the way for one.

In Baghdad, a reporter for Reuters, the British news agency, said he saw 100 buses filled with Iranian POWs who had been held in the northern city of Mosul pass by, accompanied by Iraqi military police. They were dressed in yellow prison uniforms, he said, and some had full beards in the Iranian custom.

Red Cross officials said that all the returnees were interviewed to be certain they wanted to be repatriated.

In Tehran, merchant Hamid Sajjdehchi told another Reuters reporter that his son, who he had thought was dead, was coming home.

“My son has been a prisoner for seven years, six months and five days,” the merchant said. “How the world changes. Once we mourned him, thinking he was dead. Now we are preparing a celebration for his return.”

As Iranians celebrated the peace, a top official of one of Baghdad’s staunchest foes, Syrian Vice President Abdel-Halim Khaddam, left Tehran after three days of talks with officials there.

“In our meetings with Iranian officials, we stressed the need for withdrawal of Iraqi troops from Kuwait and the return to power of the legal government,” Khaddam said.

Syria has pledged to send a contingent of troops to the defense of Saudi Arabia.