Closing Embassy Is No ‘Pay-Back,’ Bush Insists : Policy: In fact, he says, pulling U.S. diplomats out of Kuwait removes one obstacle to the use of force.

President Bush suggested strongly Saturday that his decision to close the U.S. Embassy in Kuwait could be a prelude to war rather than a step toward peace, saying, “When you don’t have Americans there, and if force is required, that’s just one less worry I’ve got.”

The departure of the eight American diplomats still at the embassy in Kuwait city, to take place when all other American hostages are out of Kuwait, “facilitates the tough decisions that might lie ahead,” Bush said.

His decision to pull out the diplomats--while insisting that the embassy is considered “technically” open--was announced Friday, a day after Iraqi President Saddam Hussein said he would have his rubber-stamp Parliament approve the release of all foreign hostages, including more than 700 Americans believed still to be in Iraq and occupied Kuwait.

Asked if the decision on the embassy was a pay-back for Hussein’s decision to free the hostages, Bush said:

“It is no pay-back. And the feeling is that when every single American is out of Kuwait, we will clear the decks and the embassy will have ceased to be fulfilling any day-to-day functions.

“There is no change in my determination to get Saddam Hussein out of Kuwait,” he said.

The President spoke at a news conference in the palm-fringed courtyard at Miraflores Palace, a 19th-Century mansion housing the Venezuelan presidential offices, as he completed a weeklong visit to South America. He arrived back in Washington at midafternoon.

In Washington, National Security Adviser Brent Scowcroft echoed the President’s assertion that the release of foreign hostages and evacuation of the U.S. Embassy in Kuwait will remove one obstacle to the use of force against Iraq.

But Scowcroft, interviewed by Cable News Network, said that the withdrawal of the eight remaining U.S. diplomats in Kuwait also will eliminate a flash point that could have provoked an armed confrontation.

While insisting that the embassy decision was not intended as a concession, Scowcroft acknowledged that Hussein might interpret it as a softening of U.S. resolve, leading him to conclude he could withstand military action by the United States and its allies.

In a separate CNN interview, Sen. Sam Nunn (D-Ga.), chairman of the Senate Armed Services Committee, said Hussein’s decision to release foreign hostages, coupled with the U.S. decision to evacuate its besieged embassy in Kuwait, make war “less likely but still possible.”

If the chances of war were 50-50 two weeks ago, Nunn said, “I would say it is 45-55 now.”

Nunn, who presided over congressional hearings in which retired military commanders and other experts urged the Administration to give sanctions a year or more to work before using force, said he believes the United States would be justified in going to war with Iraq. But it would be a mistake to do so “if we have other alternatives,” he said.

When Nunn was reminded that Hussein cited the hearings as evidence of a split in U.S. public opinion, the senator said, “It tells us what bad shape Saddam Hussein is in if he is praising people like me who favor squeezing him to his knees to get him out with an embargo and also favor having a viable military option if that does not succeed.”

Nunn agreed that something must be done to hobble Iraq’s nuclear weapons program if the crisis ends without war. But he scoffed at suggestions that Iraq’s chemical weapons capability could be contained.

“You can’t take out chemical weapons,” Nunn said. “They’re dispersed all over that country. There are thousands and thousands of tons of chemicals. Anybody who believes you can get chemical weapons out of Iraq by military action by the United States must be anticipating we’re going to occupy Iraq . . . for a long time. I think that would be a very bad policy for the United States.”

Here in Venezuela, Bush showed no sign of stepping back from his view that nothing will ease the prospects of war until Hussein gives up all of the Kuwaiti territory he seized Aug. 2 and the overthrown government of the emir of Kuwait is restored. He put on the record an assessment others in his Administration had voiced immediately after the hostage and embassy decisions were announced.

The President’s goal is to maintain the pressure on Iraq, keeping the focus on Hussein’s invasion and occupation of Kuwait, which brought together the international alliance now arrayed against Iraq in the Persian Gulf. In the view of American officials, the Iraqi president is trying cut into the support for the U.S.-led military force assembled in the region, hoping to chip off any wavering members of the coalition by removing the hostage issue as a major point of contention.

“I don’t feel we are closer to a peaceful solution,” the President said. “And the reason I don’t is because Saddam Hussein continues insisting that Kuwait is a province of Iraq and that he will not get out of Kuwait. And that is the fundamental point around which the whole world is united against him.”

As for offering Hussein a reward because the hostages are headed home, Bush said: “They never should have been taken in the first place. When you kidnap somebody, you should not expect a reward when you let the person go.”

Hussein, who refers to the hostages as “guests,” has had many of them kept at strategic sites as a form of insurance against attack in any outbreak of hostilities.

Bush also said that the departure of the hostages, as well as assurances of an adequate global oil supply, “makes it no more difficult at all” to maintain the anti-Iraq coalition.

“I have said from the very beginning that this cruel policy of taking hostages and holding them in hopes that that will change the policy of this alliance is fruitless,” Bush said. Thus, he maintained, the release of the hostages should be irrelevant to the unity of the anti-Iraq alliance.

The President was asked whether the United States and Venezuela, one of the world’s major oil producers, could do more to help the smaller nations that are suffering from the sharp increase in oil prices resulting from the Persian Gulf crisis.

Bush replied: “The best thing the United States can do is help get to the cause and do something about that. And that means to get Saddam Hussein, without condition, out of Kuwait.

“In the meantime,” he added, “I will do my level best to point out to the world that there is no current shortage (of oil) and that what we’re seeing is paper barrels of oil traded in the futures market. And they go up and they go down with every little rumor that is printed.”

He was referring to the activities of speculators over future prices of oil--not any actual shortage of supplies--as the key element in the price swings. Officials have said that increased production by Saudi Arabia and other producing countries has made up for the loss of Iraqi and Kuwaiti oil exports, now cut off under U.N.-mandated sanctions.

President Carlos Andres Perez of Venezuela, standing at Bush’s side, said that his country and Mexico are assisting Central American and Caribbean nations by trying to help them finance oil imports.

But he said Venezuela’s own economic distress prevents it from helping its other Latin American clients.

Perez said the extra income Venezuela is earning from higher oil exports will be deposited in “a macro-economic stabilization fund” to protect the country against possible falling oil revenues in the future.

Perez said his nation totally supports all U.N. Security Council resolutions adopted so far in the Persian Gulf crisis, including the latest one, which permits the use of force after Jan. 15 if Iraq has not pulled out of Kuwait by then.

Perez told reporters that “we small countries” cannot accept the forceful eradication “of an existing nation.”

“Good answer; very good answer,” Bush interjected.

Times staff writer Norman Kempster, in Washington, contributed to this story.