Scud Attack on Saudis Is Thwarted, U.S. Says : Missiles: The weapons that terrorized Israel are forcing Saudi residents into shelters and gas masks.

Iraq stepped up its missile attacks Sunday and early today by firing at least 10 Scuds at two Saudi Arabian cities, including the capital of Riyadh. American Patriot air-defense batteries “engaged and destroyed” all missiles threatening the cities, according to a military spokesman.

But reporters challenged the account, obviously surprising the military spokesman by saying they had surveyed damage apparently caused by a missile. Several said they saw the aftermath of an explosion that blew out the backside of a building and created a 10-foot-deep crater in the southeast section of Riyadh.

One thing was clear, however: The hunt for Iraq’s Scud mobile missile launchers was far from over, even though the mission had top priority. The missiles that had terrorized Israel for two nights were now forcing Saudis into shelters and gas masks.

U.S. surveillance satellites and aircraft first detected a launch of three Iraqi Scud missiles from Kuwait about 9:50 p.m. Saudi time, Pentagon officials said.

Patriot air-defense radar hunkered into positions near the port city of Dhahran and the nearby U.S. air base swiveled to pick up the red-hot plumes of the incoming Scuds. Five specially designed Patriot missiles were sent streaking into the night sky to intercept them.

With a series of three bright flashes, a shower of sparks and a volley of concussions just seconds later, the engagement was over.

The meeting of high-tech Patriots and low-tech Scuds was another dramatic reminder that even as the Iraqi military is being pummeled by allied warplanes, it can continue to sow division, frustration and insecurity on the alliance.

Since the U.S.-led coalition first struck Iraqi targets early Thursday, Iraq has responded with at least 21 Scud launches. The missiles have yet to cause a single death, but their political and psychological effect is great.

For the first time in the Gulf War, at least four were sent toward the Saudi capital just after midnight Sunday.

All four of those Scuds were picked off by the Patriots, but it remains unclear whether there was a fifth. The crater that reporters said they had seen in Riyadh could have been caused by an Iraqi missile or an errant Patriot.

A few hours later, three more Scuds were fired toward Dhahran. One fell harmlessly into the waters of the Persian Gulf, and the Patriots once again intercepted the remaining two.

The launches have offered an initiation by fire for the Patriot, a basic air-defense system that U.S. Army technologists during the 1980s converted to the task of shooting down short-range ballistic missiles.

Pentagon spokesman Pete Williams said that the successful interception of the latest Scud launches demonstrates that the Patriot is a “very effective system.”

In an earlier interview in Saudi Arabia, Lt. Col. Lee Neel, commander of the Dhahran Patriot battalion credited with the first combat shoot-down of a Scud, had predicted that the Patriot “will be a very sought-after weapon system after this is over.”

Indeed, Israel won a long-sought battle to get the latest Patriots in operation when the United States on Saturday dispatched two batteries of what some have called a “mini-Star Wars” system.

The Patriots allowed the alliance to breathe a sigh of relief, since the new batteries deployed in Israel seemed to moderate that nation’s need to retaliate immediately for two nights of Iraqi attacks with Scud missiles.

The Saudis also have clamored to buy Patriots as part of a multibillion-dollar package of arms they say they will need after U.S. and other Western troops in the alliance have gone.

At a cost of almost $100 million per battery--which includes eight launchers, truck-borne radar and a pair of communications vans--the Patriot is one of the United States’ most expensive and sophisticated export items.

Neel had called the Patriot, which is highly automated to intercept missiles from as far as 34 miles away, a weapon for “a high-speed, mach-3 world” in which a moment of indecision could be fatal.

But while the United States has scattered hundreds of Patriot launchers across the Saudi desert, commanders of the gulf operation have preferred since the beginning to try to preempt Iraqi missile launches by striking at the source--the missile launchers themselves. Clearly they prefer to use the Patriot as a last-ditch defense.

But while allied fliers have mounted what President Bush called “the darnedest search-and-destroy operation ever undertaken,” the task of routing out and hitting the launchers has proven painfully difficult--like finding “a needle in a haystack,” according to leaders of the effort.

So far, U.S. commanders have confirmed the destruction of only eight of more than two dozen Scud launchers believed to have been in Iraq’s arsenal at the outset of the war. However, Gen. H. Norman Schwarzkopf, the commander of U.S. forces in the gulf, said Sunday that the total may be as high as 16.

The commanders had hoped that allied air raids on military command and communications links also would inhibit the launching of the Iraqi missiles, since Iraqi field commanders are believed to rely heavily on orders from headquarters.

There is evidence that Iraqi President Saddam Hussein may have had to use messengers to order last week’s firing of missiles at Tel Aviv and Dhahran. Saudi military leaders also believe that Baghdad’s communication with its troops in Kuwait is now restricted, one official said.

“The first hits crippled his command and control to the point he couldn’t give orders to fire,” the official said. “The missiles he fired, he sent messengers to go and fire it. I don’t think he has any command and control to support the network.”

In Dhahran on Sunday night, a warning of the incoming missiles prompted a wail of sirens just after 9:50 p.m., sending reporters, hotel workers and a smattering of Kuwaiti refugees to the basement bomb shelter of a major hotel.

According to a Times reporter driving toward Dhahran as the Patriots shot skyward, the missile was a bright glow in the sky that suddenly erupted into sparks, a concussion and a larger glow as it apparently struck and destroyed the inbound Scud.

Shortly before 10:30 p.m., when word came down to the hotel bomb shelter that five Patriot missiles had taken out the three Scuds threatening the city, the news was greeted with a round of applause.

After another wait, the alert was cancelled and everyone filed slowly out of the hot basement.

At 12:45 a.m. today, Saudi time, when missiles apparently bound for Riyadh were detected, the hotel lights went out and the sirens screamed again. And again, the halls and stairwells filled with people headed for the shelter.

During the second alarm, a knot of reporters gathered around a small radio and listened to the Armed Forces Network’s broadcast of the San Francisco-New York NFL playoff game.

Hotel employees passed around cheese sandwiches and bottles of water.

Frantz reported from Dhahran and Healy from Washington