U.S. to Void Egypt Debt; Weighs Big Arms Sale to Israel : Diplomacy: Cancellation of $7.1 billion that Cairo owes would reward it for support in the gulf. An early Bush-Gorbachev summit is being considered.

In a flurry of diplomatic maneuvers surrounding the confrontation with Iraq, President Bush has agreed to cancel $7.1 billion in debts Egypt owes the United States for military equipment, is considering a massive new sale of weapons to Israel and may meet within the week with Soviet President Mikhail S. Gorbachev, Administration officials said Friday.

At the same time, U.S. officials said Bush has decided to warn Jordan, gently but firmly, that it may jeopardize some of the aid it receives from the United States and other Western industrialized countries unless it takes a firmer stand against Iraq.

Bush plans to send the message to Jordan’s King Hussein through a high-level delegation, probably headed by Deputy National Security Adviser Robert M. Gates, which will visit Amman, Jordan’s capital.

The moves come as Bush continues to try to tighten the economic noose on Iraq and persuade Iraqi President Saddam Hussein to negotiate an end to the standoff in the Persian Gulf on Washington’s terms.

Each of the latest moves serves a different part of that strategy.

Forgiveness of Egypt’s massive military debt to the United States would be a major reward for Cairo’s support for the U.N. economic embargo against Iraq and the huge U.S. military presence in Saudi Arabia, U.S. officials said.

As the largest of the Arab nations and the one that has put the largest group of troops alongside American forces in Saudi Arabia, Egypt’s support for the U.S.-led campaign against Iraq is crucial, U.S. officials say. At the same time, Egypt has borne a heavy burden from the embargo because hundreds of thousands of its citizens have been employed in Iraq and Kuwait. Many of them are now refugees, and the country will both lose the earnings it had expected they would send home and pick up the burden of supporting a large additional group of unemployed workers.

The decision to forgive Egypt’s military debt will substantially help Egypt’s budget problems. Bush made the decision at his vacation home here after talking with Egyptian President Hosni Mubarak by telephone Thursday afternoon. The move is expected to be the first of several such gestures that Washington is considering for Middle East countries that have supported the U.S. effort.

Egypt receives about $2.3 billion in U.S. aid each year, of which approximately $1.3 billion is in military assistance.

Israel, meanwhile, receives roughly $3 billion in U.S. aid each year, of which roughly $1.8 billion is military aid and $1.2 billion is economic assistance. According to Administration sources, Israeli leaders over the last several days have asked for a major increase in the military part of that aid. Heading Israel’s shopping list are new anti-missile defense systems that could add to the country’s protection against possible Iraqi chemical attacks.

Israel also has asked for new tanks and planes that would offset the additional weapons the United States has now promised to send to Saudi Arabia. At least some Administration officials are known to be skeptical of that idea, fearing that it would merely set off a major new arms race in the Middle East.

The possible Soviet summit is seen as a strong signal to Iraq of superpower unity. Early Friday, White House officials flatly denied rumors, emanating from Moscow, that a summit was in the works and could be held as early as next Saturday. By the end of the day, however, officials had backed away from those denials and were telling reporters to prepare for possible announcements of news today.

As for the mission to Jordan, Washington wants King Hussein to cut off the traffic still going to Iraq through his own country and to halt food shipments to Baghdad from Jordan.

Although the king has said he would honor the U.N.-imposed embargo, he has been highly critical of the U.S. troop deployment in the region, and trucks carrying supplies have continued to cross the nation’s border into Iraq.

Jordan, one of the poorest nations in the Middle East, has suffered severe economic losses from restricted trade with Iraq since the U.N. sanctions were approved early last month. The nation also has had to shoulder the burden of tens of thousands of refugees who have fled there from occupied Kuwait.

Meanwhile, Bush phoned a series of foreign leaders Friday, including British Prime Minister Margaret Thatcher, French President Francois Mitterrand and Saudi Arabian King Fahd, as he sought to shore up support for his plan to share the mounting costs of the U.S. deployment in the Persian Gulf.

In public, Administration officials continued to praise the efforts made to date by other governments, such as Japan, to help support the American-led efforts to roll back Iraq’s annexation of Kuwait. U.S. officials are eager to avoid public disputes that could shatter the international consensus so carefully nurtured over the past month.

But privately, U.S. officials made it plain that they intend to ask for more help from abroad than has been offered so far. The Administration’s appeals are aimed at Japan, West Germany, South Korea, Saudi Arabia, the United Arab Emirates and the exiled government of Kuwait.

On Friday, shortly after a spokesman for the Japanese Foreign Ministry ruled out any increase in the $1 billion Japan has already promised for the multinational forces in the Mideast, a State Department official bluntly predicted that the Japanese spokesman will be proven wrong.

“All I can say is, we still need more (aid from Japan),” this official said.

Next week, both Secretary of State James A. Baker III and Treasury Secretary Nicholas F. Brady will be traveling overseas to talk with foreign officials about the mounting expenses of the Persian Gulf operations. Baker will make several stops in Europe and the Mideast, while Brady will visit Japan and South Korea.

Over the past two days, Bush, according to aides, has spoken with eight foreign heads of state to try to coordinate financial aid plans and the international effort to impose economic sanctions on Iraq.

White House and State Department officials leave no doubt that the Administration is happier with some countries’ response than with others. Administration officials were particularly effusive in their praise for Mitterrand, telling reporters about the “positive tone” in relations between France and the United States.

The French have sent the second-most-powerful naval contingent to Middle Eastern waters after the American flotilla. And despite early suggestions that the French thought Bush was moving too quickly toward a military confrontation with Iraq, officials now say France is “strongly on board” in support of the international anti-Iraq effort.

By contrast, officials here offered few comments about West Germany’s efforts. Before the current crisis began, U.S. officials were making much of the new strategic cooperation between Washington and Bonn.

But White House officials now take a less optimistic view, reflecting the recognition on both sides of the Atlantic that the political and economic costs of German unification will severely constrain the merged nation’s ability to contribute to allied efforts outside Europe.

Meanwhile Friday, two congressional delegations left Washington for the Middle East, where they planned to talk with Mubarak, Saudi and Kuwaiti officials and U.S. troops and military commanders.

Congress will return to regular session next week, and several committees are planning hearings on the Administration’s policies in the gulf. Baker will testify Tuesday before the House Foreign Affairs Committee and Wednesday before the Senate Foreign Relations Committee.

At the State Department, spokeswoman Margaret Tutwiler confirmed that the United States is keeping a war crimes file on violations of international law by Saddam Hussein, as was reported Friday by The Times.

“We are of course very concerned about Iraq’s violations of international law, including the taking of hostages and the use of civilians as a shield against military operations,” Tutwiler said at a news briefing.

“It is the normal policy of the United States government to maintain files on possible violations of the law of war involving American citizens,” she said.

Separately, the American who died this week in Iraq was identified by his family as banker James L. Worthington Jr.

Worthington, 53, a native of Marathon, Tex., died Monday, his daughter told the Daily Freeman of Kingston, N.Y. “He was taken hostage in Kuwait and moved to Basra where he died of a heart attack,” said Maggie Jean Neilson, 27, of Woodstock, N.Y.

Worthington had been working as a consultant for the Alahi Bank of Kuwait.