GULF WATCH: Day 20 : A daily briefing paper on developments in the crisis

Diplomatic Front:

In a conciliatory sign, Iraq said it was “ready to talk” about a possible diplomatic solution to the Middle East crisis. But the Bush Administration was unswayed: “At this point, we see very little to talk about” as long as Kuwait remains occupied, the White House said.

Iraqi soldiers in Kuwait reportedly rounded up eight Britons and one American at gunpoint. The State Department cited “credible reports” that Westerners had been taken to industrial locations.

Baghdad threatened to begin rounding up French nationals in Iraq and Kuwait and deploying them at key locations as “human shields” if France joined the United States and Great Britain in blockading Iraqi ports. Military Front:

Iraq has deployed 800 ballistic missiles to positions in Kuwait, according to Jane’s Soviet Intelligence Review. That places Saudi Arabia’s capital, Riyadh, and other key Middle East targets within firing range.

A decision by President Bush is expected as early as today on the scope of a reserve call-up that has been approved in principle. The White House delayed the final decision because of concerns about domestic political fallout.

The nine-member Western European Union warned Iraq of “grave consequences” if any Europeans are placed at risk in Iraq. Three members--Italy, Belgium and Spain--said they are sending warships to the gulf. Greece, which is not a member of the union, also committed ships to the gulf.

More than 1 billion pounds of troops and materiel have been transported to the Middle East so far in the largest U.S. rapid air- and sea-lift operation in history, the Pentagon said. Trade Front:

An Iraqi tanker reportedly began unloading at a Yemen refinery. The government of Yemen has said it would honor the U.N. embargo, but said this cargo had left Iraq before the sanctions were imposed. The United States, meanwhile, said it was “shadowing” other suspect ships.

Gasoline and crude oil prices hit new highs as traders focused on a possible military escalation. In addition to the cutoff of oil from Iraq and Kuwait, an armed clash would likely disrupt shipments from the world’s biggest oil producer, Saudi Arabia. Crisis Indicators:

U.S. troops deployed: (estimate) 35,000

U.S. ships in region: (estimate) 70, including three aircraft carriers

Iraqi troops in Kuwait: (estimate) 160,000

Total Western nationals being held in Iraq and Kuwait: (estimate) 12,000

Crude oil (per barrel, New York Mercantile Exchange futures): $28.80, up 24 cents

Wholesale gasoline (per gallon, New York Mercantile Exchange futures): $1.0150, up 1.25 cents

Dow Jones industrial index: 2,603.96, down 52.48

Gold (per ounce): $407.40, down $2.70