U.N. Leader Says War Is Option in Gulf : Diplomacy: Military action against Iraq would be ‘perfectly legitimate’ if sanctions fail, Perez de Cuellar says.

U.N. Secretary General Javier Perez de Cuellar said in an interview released Wednesday that military action against Iraq would be legitimate if economic sanctions do not work.

The German weekly magazine Stern quoted him as saying that “the members of the U.N. Security Council will have to wait a little and see whether sanctions will, after all, show some effect.” If they do not, military action “would be perfectly legitimate,” should the Security Council so decide, he said.

Perez de Cuellar added that if the world body manages to resolve the crisis, “we will then have to immediately make efforts concerning the Palestinian problem.”

The Security Council imposed a trade embargo Aug. 6 against Iraq, a few days after Iraqi President Saddam Hussein sent his troops into Kuwait and sent Kuwait’s government into exile.

In New York, it was reported Wednesday that the five permanent members of the Security Council were preparing to put more pressure on Iraq.

Participants in the meetings told Reuters news service that a resolution was drafted that opens the door for nations and individuals damaged by Iraq’s occupation of Kuwait to seek financial compensation.

The resolution, which still has to be approved by the governments of the 15-nation Security Council, would also call on Iraq to protect foreign nationals, including diplomats, and ensure they receive supplies of food, water and other basic services.

Envoys from the United States, the Soviet Union, Britain, France and China met at France’s U.N. mission for two days to work on the draft.

Iraq’s Hussein has cut off supplies to diplomatic compounds in Kuwait city. He contends that Kuwait is part of Iraq and therefore no longer entitled to have embassies. Only four Western nations are still believed to be operating embassies in Kuwait city: the United States, Britain, Canada and France.

In Dhahran, Saudi Arabia, Western diplomatic sources reported Wednesday that three British men have escaped overland from Iraq to Saudi Arabia.

The diplomats said that to avoid cutting off the possible escape of others, they did not want to specify the lengthy route that the men took across the desert.

The three arrived near the northern Saudi border town of Arar late Monday, the sources said, speaking on condition of anonymity.

The men’s identities were not disclosed, but the diplomats said two were hospital workers in Baghdad and the third a businessman and that all three left from the Iraqi capital.

One diplomat said the three asked not to meet the media and would be flown back to Britain shortly. Three Britons and two Frenchmen escaped from Iraq by sea earlier this month.

Thousands of Westerners remain in occupied Kuwait and Iraq, either in hiding or detained by Hussein’s government. Hundreds are being held as “human shields” at Iraqi military and other strategic installations to deter attack by the U.S.-led multinational force deployed against Iraq.

In another development, a German newspaper reported that an alleged spy, now under arrest, had given U.S. and North Atlantic Treaty Organization secrets to Iraq.

The mass-circulation Bild Zeitung said Juergen Gietler provided Iraq with details of secret NATO consultations and analyses of the gulf situation, as well as reports by the U.S. ambassador to NATO, William Howard Taft IV.

Gietler, 35, was arrested Aug. 28. The arrest was confirmed Oct. 3.