Defiant Iraqi Ship Dumps Prohibited Cargo at Sea : Embargo: The vessel ignored warning shots in an earlier confrontation. This time, it’s permitted to sail on to Yemen.

A tense confrontation in the Persian Gulf ended Monday when an embargo-busting Iraqi vessel stopped defying American warning shots and was discovered to have quietly dumped its prohibited cargo at sea.

The surprise conclusion to the standoff came after U.S. and Australian warships maneuvered to force the Iraqi vessel to a halt, then dispatched an armed boarding party to its decks.

But the sailors found no trace of the steel and plywood that had been aboard the merchant ship when it was first searched Saturday. It was permitted to continue on toward Yemen because it was no longer in violation of a U.N.-imposed trade embargo, military officials here said.

The case of the vanishing Iraqi contraband ended a confrontation that began Saturday afternoon, when the Iraqi vessel Al Bahar al Arabi was boarded and Coast Guard inspectors discovered it was carrying steel pipe and plywood. The cargo is banned under the U.N. embargo.

The Iraqi captain promised to return to Iraq, but instead later continued defiantly southward, ignoring the 40 warning shots fired across its bow through the day Sunday by the U.S. destroyer O’Brien. The captain made clear by radio that he did not intend to turn back.

An Italian frigate shadowed the vessel Sunday night as Western navies set a trap. Early Monday afternoon, the trap was sprung when the Australian and American warships--in a tactic not previously used in the interception operation--veered in front and forced the ship to halt.

Navy officials said the warships had expected they would have to force the Iraqi vessel to pull into a port to unload its cargo.

But instead of resistance, the boarding party found cooperation--and empty holds. Military officials said that the warships had no option but to permit the vessel to continue toward the Yemeni port of Aden, its announced destination.

A military spokesman in Saudi Arabia, Cmdr. J. D. Van Sickle, said the Navy “could only assume” the cargo was “pitched over the side” between the first and second boardings. Despite the confusion in the operation, he pointed to it as an indication of the continuing success in preventing Iraqi goods from reaching foreign ports.

An Iraqi official quoted by the Iraqi news agency praised the ship’s captain for ignoring the U.S. warning. He said the “provocative” action was an indication of the “nature of the American aggressor and his allies and their failure in imposing sanctions on Iraq.”