Foreign Women and Children Can Leave Iraq, Hussein Says : Gulf crisis: 'We hope it's true,' State Dept. declares. Iraqi leader challenges Bush and Thatcher to a debate but refuses to consider pulling out of Kuwait.

TIMES STAFF WRITER

In what would be a dramatic shift in policy, Iraqi President Saddam Hussein announced late Tuesday that all foreign women and children being held in Iraq are free to leave as of today.

The announcement, made by Baghdad Television and the state-run Iraqi News Agency, said the women and children should "enjoy the freedom of either staying in Iraq or leaving whenever they wish." It came less than an hour after Hussein appeared on Iraqi TV with about two dozen of the hostages, one of whom, an American, appealed to him to grant them their freedom as a gesture of "sincerity."

The announcement said that Hussein made his decision after he was "deeply affected" by the desire expressed by some hostages to have the freedom of staying or leaving. At the same time, a statement from the ruling Revolutionary Command Council said Hussein acted "to preserve the image of Arabs," according to the official news agency.

In Washington, a State Department spokesman said of the announcement: "We hope it's true, but we haven't confirmed it yet. They've made several promises over the past weeks, and we've had our hopes dashed."

A spokesman for British Prime Minister Margaret Thatcher, visiting the Finnish capital of Helsinki, also responded cautiously to the Iraqi announcement.

"We should wait and see whether it occurs, but they should never have been detained in the first place," the spokesman said.

Several Western embassies contacted in Baghdad late Tuesday night said they had not been officially notified of the Iraqi decision.

It was not known how many women and children were among the foreign hostages in Iraq, or whether the order may also apply to foreigners in Kuwait. Of the 12,000 Western hostages in both countries, about 500 in Iraq and 2,500 in Kuwait are Americans.

If implemented as ordered today, the decree would apply to the women and children being held at strategic facilities throughout Iraq, as well as those who have continued to live in their homes in Baghdad but were barred from leaving the country.

During his hourlong session Tuesday with the hostages, the second in a week, Hussein also challenged President Bush and Thatcher to an internationally televised debate on the Persian Gulf crisis.

Although the Iraqi president said he is willing to talk face to face with Bush, top aides indicated in interviews with The Times that Hussein will not consider the withdrawal of his troops from Kuwait as a negotiating point.

"It's sick, and it doesn't even deserve a response," State Department spokeswoman Margaret Tutwiler said when asked about the suggested debate. The spokesman for Thatcher described the offer as "pure gimmickry."

Several Americans who viewed the hostage telecast in Baghdad on Tuesday described it as "surreal," "rambling" and "rewriting the basic principles of modern logic."

The bulk of the broadcast--which began with Hussein patting several Western girls on the head and wishing a young girl named Rachel a happy birthday--focused on his lengthy opening speech, in which he accused the West of "choking" Iraq through a naval blockade and economic sanctions that appear to be having an increasing impact in Baghdad.

He implied he would attack those American allies geographically closest to Iraq--presumably Israel--if the United States launches any military strike against Iraq. And he cast the entire crisis in the context of "America's invasion of our holy lands" and a military buildup designed solely "to invade Iraq."

Among the hostages appearing with Hussein were three to five Americans, as well as Britons and French.

In answer to one of three questions raised by the hostages themselves, Hussein said, "I am prepared now for direct talks and dialogue with Mr. Bush and Mrs. Thatcher immediately, and, if they so wished, and, to let the world know everything, let us have the debate between me and them on the television for the whole world to see."

On the hostage issue itself, Hussein continued to describe the hundreds of Westerners being held in a "human shield" at military and civilian installations throughout Iraq as heroes who were preventing war.

But for the first time, he conceded that the role they are playing in history could be an unpleasant one.

"From a human point of view, I am as much in pain as you are," he told the hostage group that ringed the large room Tuesday. "Let me say how painful for me it is to see a situation come about that has put you where you are now. I wish that your stay in a manner of forced hospitality, let's say, will not be long."

Two of the hostages who were allowed to ask questions politely, but firmly, attempted to argue for their release.

"You claim to be a humanitarian in search of a peaceful solution to this crisis," said Kevin Bazner, an American whose identity was later confirmed by his sister, Patricia Heath of Farmington Hills, Mich., after she saw the telecast.

Bazner then suggested that the president make a gesture "to impress upon our government and the rest of the world your sincerity in reaching a peaceful solution.

"Of course, as a hostage, I would suggest this, as others in the room have, perhaps the gesture of sincerity be the release of all women and children," he added.

Hussein responded: "The proposal that you have made is only to be expected from a man because men, the first thing they have in mind is to free women and children somehow. But the situation is so difficult that it would not allow human beings like the Iraqis to make the kind of decision they would love to make."

Iraqi Information Minister Latif Jasim, who attended the session Tuesday, declined to disclose its location in an interview with The Times shortly before the broadcast. But he added, "It was the kind of place we could bring all these people together to meet with the president."

In footage that was apparently edited from the telecast, Hussein told the Westerners that in the event of an American military strike, they would be placed in bomb shelters at the facilities where they are being held, according to Jasim.

He also reinforced Iraq's continuing refusal to negotiate with the West on the future of Kuwait.

"Kuwait is not a symbol. Kuwait is part of Iraq," he said in explaining Tuesday's announcement that Kuwait is now Iraq's 19th province. "So Kuwait was brought back to the old Iraq forever."

Jasim also predicted that America will ultimately back down in the military standoff in the gulf.

"The Americans will blink," he declared. "You have no cause to die for here. We are stronger than you."

Meanwhile, U.S. officials in Washington refused Tuesday to disclose the name of an American hostage who died Monday until they received confirmation of his identity. Officials in Washington said they were first informed of the death late Monday. "We've gotten one phone call. They told us an American had died, and they gave us a city," a State Department source said.

Tutwiler, speaking at a department briefing, said the death of the hostage "underscores the barbaric nature" of Iraq's current policies.

She disclosed that over the past three weeks, U.S. officials have given Iraqi authorities a list of 15 American citizens being held in Iraq or Kuwait who have medical problems and should be permitted to return home. The 15 include pregnant women with complications, diabetics, cancer patients and heart patients. The man who died was not among the 15 on the list.

"To date, there has been no response to our repeated requests that these individuals be allowed to leave Iraq and Kuwait," Tutwiler said.

The State Department also disclosed that Iraqi officials have told the U.S. Embassy in Baghdad that they plan to place new restrictions upon American diplomats in Iraq in response to the curbs that the Bush Administration imposed Monday upon Iraqi diplomats in Washington.

On Monday, the State Department expelled two-thirds of the Iraqi diplomatic staff in Washington, cutting back on the size of the staff from 55 to 19. The remaining 19 diplomats were barred from traveling more than 25 miles outside of Washington, and the State Department said their use of embassy funds would be "carefully controlled."

"The Iraqis have told us (the restrictions) would include reduction of our embassy staff in Baghdad and unspecified restrictions on available funds," Tutwiler said. ". . . Assuming that they have taken these steps in compliance with international law, we would be prepared to respond accordingly, and, of course, would be prepared to get our people out of Iraq if Iraqi officials will let them go."

Between Monday and Tuesday, State Department officials said, nine more private Americans were rounded up by the Iraqi government, six of them in Iraq and three in Kuwait. By the State Department's count, that brings the number of private Americans believed to be under Iraqi detention to 70.

Times staff writer Jim Mann, in Washington, contributed to this report.

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