GULF WATCH: Day 44 : A Daily Briefing Paper On Developments In The Crisis

Diplomatic Front:

Iraqi troops in Kuwait forcibly entered the diplomatic compounds of France, Canada and Belgium, holding five Western consuls for several hours and arresting French citizens, according to diplomatic officials.

President Bush termed the Iraqi action “outrageous” and said it represented a “clear violation of international law.” But the Iraqi News Agency denied that troops had entered foreign embassies, saying the soldiers were under strict orders to stay out of the compounds.

Secretary of State James A. Baker III concluded talks with Syrian President Hafez Assad after assuring the Syrian leader that Washington would welcome an Arab solution to the crisis. Military Front:

U.S. sources said the Bush Administration plans to sell up to $22 billion in jets, tanks, armored fighting vehicles and other military equipment to the government of Saudi Arabia in what would be the biggest U.S. arms sale ever. Britain promised to send about 6,000 ground troops and 120 tanks to participate in the multinational defense force in Saudi Arabia.

Canada said it would commit a dozen fighter jets and 450 pilots and ground crew personnel to the buildup, and Syria said it plans to add 15,000 troops to the 3,000 already in Saudi Arabia.

Tens of thousands of Saudi men have signed up for military service in the past two weeks, and Saudi officials said the recruitment drive could double the size of the armed forces. Trade Front:

U.S. and Australian naval ships fired warning shots at an Iraqi tanker in the Gulf of Oman and boarded the vessel to determine if it was violating the international trade embargo. The tanker, the Al-Fao, turned out to be empty and was allowed to proceed.

Iraq said it would begin rationing bread today, with each citizen limited to three slices per day. It is already rationing sugar, rice, cooking oil, soap and detergent in some areas.

Wholesale prices in America jumped 1.3% in August in the first solid indication of the financial repercussions of the gulf crisis. 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: 111

U.S. diplomats remaining in Kuwait: 8

U.S. diplomats and dependents held in Iraq: 58

Other Americans detained in Iraq and Kuwait: 80

Total Americans in Kuwait: 1,400

Total Americans in Iraq: 200

Retail gasoline (U.S. average per gallon): $1.265, up $.002

Wholesale gasoline (spot price per gallon): $0.9385, down $.04

Crude oil (spot price per barrel): $31.76, up $.69

Dow Jones industrial average: 2,564.11, down 18.56