Bush Rejects Iraqis’ Offer to Leave Kuwait as ‘Cruel Hoax’ : Gulf War: Baghdad offers to withdraw in return for an allied pullout, reparations and linkage to Mideast issues. The President urges overthrow of Saddam Hussein. : of Iraqi statement, A14. Bush statement text, A15.

Iraq offered Friday to withdraw from Kuwait if the United States and its allies met several conditions, but President Bush said the offer was “dead on arrival” and rejected it as “a cruel hoax.”

For the first time, Bush explicitly urged the Iraqi military and the people of Iraq to overthrow President Saddam Hussein.

“Until a massive withdrawal begins, with those troops visibly leaving Kuwait,” Bush said, the United States and its allies will press the Persian Gulf War without letup. “But there’s another way for the bloodshed to stop.

“And that is for the Iraqi military and the Iraqi people to take matters into their own hands, to force Saddam Hussein, the dictator, to step aside, and to comply with the United Nations resolutions, and then rejoin the family of peace-loving nations.”

Iraq said it would abide by a U.N. resolution calling for unconditional withdrawal of its troops from Kuwait. But it then attached conditions, including a pullout of allied forces, Israeli withdrawal from occupied Arab territories, payment of allied war reparations to Iraq and replacement of Kuwait’s ruling Sabah family with a new Kuwaiti government.

Hussein’s offer, broadcast on Baghdad Radio at 2:30 p.m., brought a joyous demonstration on the streets of the Iraqi capital. People thought it meant the end of the war, which is heading into its second bloody month. Air raid sirens wailed, and Baghdadis fired rifles into the air. People gathered in excited groups to discuss the news.

But excitement in Baghdad and elsewhere ended as the United States made its response and as U.S. commanders began repositioning tens of thousands of Marines along the border of Kuwait and Saudi Arabia in preparation for a ground assault. Britain and France declared that Hussein’s offer was not enough. British Prime Minister John Major called it “a bogus sham.”

Soviet President Mikhail S. Gorbachev, however, welcomed the Iraqi proposal as “a positive signal” to be explored. And, while Bush publicly greeted Hussein’s offer with pessimism, it was privately seen at the White House as a sign that Hussein is suffering from the pressure of unrelenting allied air attacks and might be preparing to give in.

While taking pains to avoid raising any expectations, one official noted that the offer marked the first time Hussein has spoken about leaving Kuwait--and that the move therefore represents a breakthrough, albeit one that could take weeks or months to play out.

“He isn’t going to get a deal, but this prepares the way for him to get out,” one official said. “He’s starting to prepare public opinion for the loss of Kuwait. He is blustering, and he has upped his demands. But what has never been on the table before he has put on the table. It’s a good sign.”

In Congress, lawmakers said Hussein’s offer was too conditional to be the basis of a cease-fire. But they said it might be a significant diplomatic opening that could lead to an end to the fighting. “This is the first time since the beginning of the war that Iraq has expressed a willingness to withdraw from Kuwait,” said Senate Majority Leader George J. Mitchell (D-Me.). “And, in that respect, it’s good news.”

Senate Minority Leader Bob Dole (R-Kan.) said Hussein’s offer “might be a slight crack.” But he added: “There should be no pause, no cease-fire, no timeouts.”

In Baghdad

Hussein’s offer came shortly after Baghdad Radio alerted listeners to stay tuned for an important announcement. The broadcast said Hussein’s eight-man ruling Revolutionary Command Council had been meeting through Thursday night.

Then, in a much longer announcement, the council declared Iraq’s willingness to withdraw from Kuwait in return for a basketful of political concessions. Its first demand was an immediate cease-fire.

Further, it insisted that Baghdad’s compliance with U.N. Security Council Resolution 660, which calls for unconditional withdrawal, be rewarded by cancellation of 11 other council resolutions related to the Gulf crisis, including the economic embargo against Iraq.

Other conditions were:

That allied troops and weapons be withdrawn from the Persian Gulf region within one month of a cease-fire.

That Iraqi withdrawal from Kuwait be linked with an Israeli withdrawal from the occupied West Bank and Gaza, the Golan Heights and the Jerusalem government’s security strip in southern Lebanon. If Israel refuses to withdraw, the ruling council said, then the U.N. Security Council should impose on Jerusalem the same resolutions now in place against Baghdad.

The ruling council’s announcement said linkage to the Israeli-Palestinian issue, previously rejected by Washington and other allied powers, is a required condition to “the first step” by Iraq, leaving unclear whether it wants the process to be simultaneous or sequential.

That weapons sent to Israel “under the pretext of the crisis in the Gulf” be withdrawn. Both the United States and Germany have sent Patriot missiles to Israel as a defense against Iraqi Scud missiles.

That coalition members, including Western and Arab countries, pay for war damage to Iraq and cancel any debts owed by the Baghdad government and Arab regimes that have supported it.

That “national and Islamic forces” form a new government in Kuwait, a rejection of the return of the ruling Sabah family.

In its broadcast, the Baghdad leadership changed its position on two key issues.

First, repeatedly over the past six months Iraqi Information Minister Latif Jasim and other officials have told the West: “Forget Kuwait. It is part of Iraq forever.” The oil-rich sheikdom of 2 million, fewer than half of them Kuwaitis, was named Iraq’s 19th province and placed under the rule of a military governor.

Now, Iraq appears to be willing to withdraw from Kuwait if its demands are satisfied.

Second, the Baghdad leadership has repeatedly declared that Iraq would never accept a cease-fire.

As recently as Monday, Baghdad Radio declared that Iraq “will never cease firing until total victory is achieved.” For the past two days, radio broadcasts have threatened Western forces with “nasty surprises” if a ground war begins in Kuwait.

Now, Iraq appears to want a cease-fire if its conditions are met.

In Washington

Bush first heard of the Iraqi offer from television reports as he was preparing to leave his living quarters for the Oval Office early in the morning. He reached the office at 7:10 a.m., and was joined in his study next door by National Security Adviser Brent Scowcroft and Scowcroft’s deputy, Robert M. Gates.

Secretary of State James A. Baker III headed directly from his home to the White House, walked into Scowcroft’s office and, finding it empty, headed to the President’s study. Eventually, the group there was joined by Vice President Dan Quayle, White House Chief of Staff John H. Sununu and White House Press Secretary Marlin Fitzwater.

One White House official said the first news reports they saw highlighted only the offer to withdraw. “By the time Bush got in, the word was out there were a lot of conditions, and by an hour later, it was clear that the conditions were greater than before,” he said.

The President and his advisers held off any formal reaction to Hussein’s offer until they had seen a complete text from Iraq. Initial optimism quickly dissipated when they realized, a White House official said, that it was “the same old conditions and hundreds of new ones, so to speak.”

“The thing that was of concern was that the original news reports were totally erroneous--peace and withdrawal. There was no mention of Kuwait, and everything was compromisable,” the official said. “(And) that didn’t work.”

It was decided, the official said, that “we had to make a strong statement that this was a non-starter. The concern was that people were grasping at what they thought was peace, and before a snowball effect took over, there had to be some reality.”

Bush took advantage of a gathering of scientists at the White House during the early morning to make his views known.

The Iraqi statement, he said, “appears to be a cruel hoax, dashing the hopes of the people in Iraq, and indeed, around the world. . . .

“Until a massive withdrawal begins, with those Iraqi troops visibly leaving Kuwait, the coalition forces . . . will continue their efforts to force compliance with all the resolutions of the United Nations.”

Then the President went beyond his previous efforts to signal the Iraqis that they ought to overthrow Hussein. He had given them indications before that he would find this desirable. On Feb. 5, for instance, he told a news conference: “Now, would I weep? Would I mourn if somehow Saddam Hussein did not remain as the head of his country? . . . There will be no sorrow if he is not there.”

Now he spoke directly and forthrightly, urging the Iraqis to depose their leader, and added: “We have no argument with the people of Iraq. Our differences are with Iraq’s brutal dictator. . . .”

Bush left Washington shortly afterward for Andover, Mass., to speak at a Raytheon Co. plant that makes Patriot interceptor missiles. In brief remarks to reporters before he entered the plant, he said Hussein’s offer was “dead on arrival because there wasn’t anything new or significant” in it.

“There will not be a cessation of hostilities,” he said in his speech to Raytheon employees. “There will be no pause. There will be no cease-fire” until Iraq fully complies with the United Nations resolution calling for a complete and unconditional withdrawal from Kuwait.

At the White House, officials viewed the Iraqi offer as an attempt to take advantage of international shock caused by Wednesday’s bombing of a Baghdad building that the Iraqi government called a civilian bomb shelter and that the United States called a military bunker. Iraq says more than 300 civilians died in the bombing.

“We’ve never put it past him (Hussein) to put out a peace overture and to try . . . to build” on Wednesday’s tragedy “by driving a wedge into the coalition,” said one official, who spoke on the condition of anonymity. “We don’t think this (offer) is going to help him.”

With Iraqi Foreign Minister Tarik Aziz scheduled to visit Moscow this weekend, White House officials said Hussein was making “an attempt to show the world that he’s working something with the Soviets, to split the Soviets off.”

There was mixed reaction to Hussein’s perceived effort in this regard. One Administration official said, “The Soviets are pretty solidly in line.” But another said the Soviets “have been slipping away from us for the last few days.”

At the State Department, spokeswoman Margaret Tutwiler dismissed all suggestions that Hussein’s offer was an opening ploy by Iraq in a negotiating process.

“We’ve been very, very clear we are not negotiating,” Tutwiler said.

But she acknowledged that Hussein seemed to be conceding that Kuwait is not part of Iraq. “It’s progress, isn’t it?” she asked rhetorically.

But when she was asked whether the United States would follow up with some diplomatic overture, she replied simply, “It (just) lies there.”

Around the World

Reaction around the world to the Iraqi offer was mixed.

In Moscow, Gorbachev said it needs to be clarified. He said he would discuss the proposal with Aziz when they meet Monday to determine whether it could become the basis for peace negotiations.

With Aziz due in Moscow on Sunday evening after a possible stop in the Iranian capital of Tehran, the Soviet Union now expects to play a key diplomatic role in assessing Hussein’s sincerity and spelling out the conditions attached to his offer.

“The Aziz meeting will be pivotal,” a senior Arab diplomat in Moscow commented. “The Iraqis have accepted the Soviet Union as the intermediary, just as Moscow had hoped and planned, and Aziz will probably come with a lot of ifs, maybes and howevers. . . .

“And then Gorbachev will have to make the judgment on Monday on whether this is a proposal worth exploring and, if so, how. The talks will be tough.”

Alexander A. Bessmertnykh, the Soviet foreign minister, said the Iraqi proposal “opens a new chapter in the history of the conflict,” and he took it very much as Baghdad’s initial position in negotiations on ending the war.

“This is an important beginning,” Bessmertnykh said, according to a statement given to the official Soviet news agency Tass. “We will study this document carefully. Most probably, a final conclusion will be made after talks with (Aziz). On the whole, however, everything looks rather encouraging.”

The Soviet Union, increasingly critical of the U.S. bombing campaign in Iraq and eager for an end to the war, had seen what it called “new flexibility” in Iraq’s position when Gorbachev’s special envoy, Yevgeny M. Primakov, met with Hussein in Baghdad earlier this week and arranged the Aziz visit to Moscow.

Gorbachev earlier Friday sent letters to Western leaders, including President Bush, on Primakov’s talks with Hussein, reporting that there had been “signals of willingness by Iraq to withdraw from Kuwait” but probably on terms that would have to be negotiated.

A senior Bush Administration official confirmed that Gorbachev, in this letter or a separate message, asked the United States not to launch a ground war until Soviet officials had a chance to explore the possibility of a diplomatic solution.

The official refused to provide any details or to say how the United States responded to the request, but did say that a New York Times report that the Administration had agreed to delay a ground offensive until after Soviet-Iraqi meetings this weekend “is not all correct.”

U.S. allies in the anti-Iraq coalition, however, were much more pessimistic.

French President Francois Mitterrand and German Chancellor Helmut Kohl offered their reactions at a joint press conference after a routine Franco-German summit in Paris.

“It (the Iraqi proposal) seems to be more a matter of diplomatic propaganda,” Mitterrand said.

Kohl, for his part, said flatly that “the Iraqi announcement does not meet the conditions of the U.N. Security Council resolutions.”

In London, Prime Minister Major called the Baghdad proposal a tacit admission that Hussein realizes he cannot be victorious in the war.

Hussein’s conditions for withdrawal were “very disappointing,” said Major, on a visit to Wallasey near Liverpool. “It does look as though it is not a serious attempt to reach a conclusion, but something of a bogus sham.”

In Tokyo, The Japanese government reacted with caution.

“We want to watch world opinion,” said Misoji Sakamoto, chief spokesman for Prime Minister Toshiki Kaifu. The Foreign Ministry said in a statement, “Basically, we believe it is necessary for Iraq to withdraw from Kuwait to solve the problem.”

In the Gulf

The repositioning of Marines along the Saudi-Kuwaiti border was part of allied preparation along the northern border of Saudi Arabia for a possible ground thrust into Kuwait.

As the troops moved, Marine Brig Gen. Richard I. Neal, deputy operations director for the Central Command, said a Navy A-6E Intruder crashed on landing aboard the carrier America. Two crewmen suffered minor injuries.

And in a remarkable show of accuracy, an American F-15 blasted a hovering Iraqi helicopter out of the sky with a laser-guided bomb.

The Iraqis fired a Scud missile at the Saudi port of Jubayl early today. It was intercepted by a Patriot missile, and the debris fell into the waters of the Gulf.

Williams reported from Amman and Gerstenzang from Washington. Contributing to this story were Times staff writers Michael Parks in Moscow, William Tuohy in London, J. Michael Kennedy in Riyadh, Saudi Arabia, David Lauter in Andover, Mass., and Paul Houston, Doyle McManus and Jim Mann in Washington.

Text of Iraqi statement, A14. Bush statement text, A15.