GULF WATCH: Day 43 : A Daily Briefing Paper On Developments In The Crisis

Diplomatic Front:

Fears of an Iran-Iraq alliance were eased as the United States said there was no evidence that Iran was violating U.N. trade sanctions, and Iranian officials have denied any agreement to swap food and medicine for embargoed Iraqi oil.

At the U.N., the Security Council approved arrangements for the dispatch of food to Iraq and Kuwait in the case of urgent humanitarian need. Earlier, the Senate approved a bill imposing sanctions against any country that uses chemical or biological weapons. The bill also increases penalties for violating the embargo against Iraq, up to $1 million in some cases.

In Mecca, 400 Muslim leaders from 60 countries adopted a declaration that accuses Iraqi President Saddam Hussein of violating the tenets of the faith by invading Kuwait. Military Front:

Iraq has successfully test-fired a medium-range missile outfitted with a chemical weapons warhead. The test shows that the potential threat to U.S. troops and Saudi sites is greater than once believed. Iraq also warned of possible terrorist attacks against U.S. forces in a memo given to a U.S. official in Baghdad.

In Saudi Arabia, U.S. troops peppered Gen. Colin L. Powell, chairman of the Joint Chiefs of Staff, with questions about how soon they could go home. Powell also urged European nations to join the multinational force with tanks and personnel carriers.

Meanwhile, the Pentagon nixed the postmaster general’s offer to allow military personnel in the gulf to send mail free, saying Congress and President Bush must approve the action. AT&T; said it will allow families of soldiers free use of fax machines at 400 centers beginning next week in a program called Desert Fax. Trade Front:

The Administration unveiled an array of voluntary initiatives to encourage fuel conservation and promote domestic oil production. But it admitted that it is bracing for worldwide oil shortages as early as next month.

Energy Secretary James D. Watkins said if necessary, the United States is planning to draw some supplies from the strategic petroleum reserve, which holds nearly 600 million barrels. Crisis Indicators:

U.S. troops on the ground: 100,000-plus

U.S. sailors aboard ships in region: 35,000

U.S. warships in region: 50-plus

U.S. reservists to be mobilized: up to 50,103

Iraqi troops in/near Kuwait: 265,000

Iraqi tanks in Kuwait: 1,500

High temperature in Riyadh, Saudi Arabia: 108

Total Americans in Kuwait: 1,400

Total Americans in Iraq: 200

Retail gasoline (U.S. average per gallon): $1.263, up $0.004

Crude oil (spot price per barrel): $31.20, up $0.35

Dow Jones industrial index: 2,582.67, down 43.07