Iraq, U.S. Trade Envoy Ousters : Gulf crisis: Baghdad also expels military attaches from 11 embassies. Bush cites growing terrorist threat.

Iraq expelled three American diplomats today and the United States retaliated by ordering three Iraqi diplomats to leave, the State Department announced.

Iraq also ordered the expulsion of military attaches of all 11 European Community embassies in Baghdad, and restricted the movements of remaining diplomats at the missions, Western diplomats said today.

Meanwhile, President Bush today expressed “deep and growing concern” for Iraqi treatment of Kuwait, and said Saddam Hussein’s support for terrorism “would indeed have serious consequences.”

The Iraqi diplomats being expelled from the United States include the defense attache, and two from among the embassy’s 19-person staff, State Department spokeswoman Margaret Tutwiler said.

Each side has given the other one week to comply with the order.

The expulsions of the European diplomats--handed down by Baghdad on Thursday night but disclosed today by Western officials--came after the 12 European Community nations decided Monday to expel Iraqi military attaches.

Iraq said it was expelling military attaches from 11 of the 12 EC nations--Portugal does not have a military attache in Baghdad--along with a number of other embassy staff members.

The total number of diplomats being sent home was not immediately clear, but Western officials said they believe each of the 11 European embassies involved was losing at least two or three staff members.

President Bush, while voicing his concern about an Iraqi terrorist threat, said he still hopes to see a peaceful resolution of the Persian Gulf crisis, and said he is determined to wait for the international economic sanctions to force an Iraqi withdrawal from Kuwait.

“I don’t intend to be sending a signal that I’m shifting more toward” military action to resolve the crisis, the President said at a brief news conference before leaving the White House for a weekend at Camp David, Md.

White House spokesman Roman Popadiuk said the Administration’s concerns about terrorism, also voiced by Bush today in a meeting with congressional leaders, stem from the presence of well-known terrorist groups in Baghdad, including the Abu Nidal organization, the May 15 organization and the Palestine Liberation Front headed by Abul Abbas linked to a thwarted attack on a crowded Israeli beach earlier this year.

“There are no specific and credible threats,” against Americans, Popadiuk said, when pressed for the genesis of U.S. concerns about terrorism. He noted the State Department has issued travel advisories and warnings for Americans in the region.

Iraq today vowed to fight its way to a “final victory” rather than retreat from Kuwait.

In a statement broadcast on Iraqi television, Iraq bitterly attacked nations that have enforced the United Nations-approved economic embargo against Iraq.

“They have reached in their meanness to a degree where they cut off from the great people its supply of food and medicine, and from the children their milk,” the statement said. “Oh, what dwarfs and small people they are.”