Soviet Peace Proposal Falls Short, Bush Says : Diplomacy: President is critical of the plan, but officials say it has not been rejected. Iraq’s foreign minister is expected back in Moscow today.

President Bush on Tuesday threw cold water on the new Soviet peace plan, saying “it falls well short of what would be required” to end the Gulf War.

His remarks--the first he has made in public on the secret proposal--appeared to dismiss what was seen as the last chance to avoid a brutal war on the ground to throw Iraq’s occupying force out of Kuwait.

Nevertheless, the diplomatic flurry the plan spawned seemed to put the start of an offensive on hold for at least another day, and there remained some signs that the United States was not rejecting it out of hand.

“It would look bad to have a live thing on the table and go to a ground war,” a White House official said. Also, the State Department insisted that the United States is not rejecting the plan at this point.

White House Press Secretary Marlin Fitzwater also put a positive spin on the U.S. reaction to the proposal by Soviet President Mikhail S. Gorbachev.

“We’ve said from the beginning that if President Gorbachev can be helpful in getting (Iraqi President) Saddam Hussein to pull out of Kuwait, so much the better,” Fitzwater said.

He said the Kremlin initiative is still in progress and added: “Essentially, it could be helpful.”

There was no official response Tuesday from Iraq to the Soviet proposal. But Yuli M. Vorontsov, the Soviet ambassador to the United Nations, said Iraqi Foreign Minister Tarik Aziz was expected back in the Soviet capital today. Aziz was given the proposal Monday by Gorbachev in Moscow and took it immediately to Baghdad.

Although details of the plan remain secret, the Soviets have described it as “fully in line” with the United Nations’ demands for an unconditional Iraqi withdrawal from Kuwait. “The key element of the plan consists in securing a rapid start of a withdrawal of the Iraqi forces from Kuwait,” Vorontsov said.

But the plan also reportedly offered assurances of no penalties for Iraq or its leadership, along with other controversial points.

The British response was negative, but France indicated the plan might be acceptable if the Iraqis accept it and pull out immediately.

At the United Nations, some diplomats predicted a fight in the Security Council if Hussein accepts the proposal and Bush rejects it. One Western diplomat predicted calls for a cease-fire in the council if Iraq agrees to the plan.

Bush, meeting with congressional leaders, said “as far as I’m concerned, there are no negotiations. The goals have been set out. There will be no concessions--not going to give.”

The Soviets insisted that details of the proposal be kept secret, and the United States agreed.

“This matter is too sensitive to negotiate in public,” said State Department spokeswoman Margaret Tutwiler. “The surest way to kill something like this is to talk about the details and let people take shots at them.”

But, as outlined by diplomats, the plan at first glance appears to fall short of the U.S. position on at least two counts:

* It reportedly offers assurances to Iraq that the United States and other countries would make serious efforts to resolve the Israeli-Palestinian conflict after the war. U.S. officials have rejected making any such pledge an explicit part of a deal to end the war. The Administration position is that it will continue working toward Arab-Israeli negotiations as it has for several years, but not as part of a deal with Iraq.

* It was also not clear whether the Soviet plan would require Iraq to leave its armored vehicles and artillery pieces in Kuwait when its troops withdraw. Administration officials have said they will insist that Iraq’s heavy weapons stay behind in any withdrawal--a demand that goes beyond the requirements of the 12 U.N. resolutions under which the war is being fought.

According to a well-placed European ambassador in Washington, the plan would preserve the structure of the Iraqi state and its borders, and would protect Iraq and its government from retaliation.

In effect, the Soviet proposal set up a race between diplomacy and war--raising for the United States the prospect that Hussein might begin a pullout before the U.S.-led allied coalition in the Persian Gulf can complete the total destruction of Iraq’s war-making machinery.

“The unspoken concern is if Saddam Hussein survives with a part of his military base intact, we are dealing with a significant problem regarding the stability of the Middle East in the future,” Sen. Dan Coats (R-Ind.) said after Pentagon officials gave senators a private briefing.

“In a sense he has played into our hands by being as intransigent as he has been. Every hour he has stayed there has given us a chance to degrade his military capability for the future.”

Two Democratic congressional leaders urged Bush to continue the air assault and delay any ground war.

“I hope as long as there’s any possibility of reducing the Iraqi military through available targets that the air war will continue and any ground attack will be delayed,” Senate Majority Leader George J. Mitchell (D-Me.) told Bush at a bipartisan meeting of congressional leaders at the White House.

“Stay with the air war,” added Senate Foreign Relations Committee Chairman Claiborne Pell (D-R.I.). However, he told reporters after the meeting that “the general expection” is that a ground war is “not far off.”

The White House was proceeding on the assumption that there will be a ground war. A senior Bush aide said the White House has not addressed the question of whether to consider a pause in the bombing if Iraq accepts the Soviet peace proposal and agrees to withdraw from Kuwait unconditionally.

Bush, according to the senior aide, declared: “I obviously can’t say exactly when a ground operation may come, but I can say preparations are on schedule. It is my personal view that (the war is) beginning to have an effect on Saddam. That may explain the recent flurry of diplomatic activities.”

Although there was little said publicly that advanced the diplomatic effort, there were indications that considerable efforts were being made behind the scenes.

Bush sent a private cable to Gorbachev, Fitzwater said, and Secretary of State James A. Baker III spent four hours Monday night preparing a detailed message for Soviet Foreign Minister Alexander A. Bessmertnykh, Tutwiler said.

In Moscow, the Soviet foreign minister countered suggestions that Bush’s response amounted to a rejection--and similarly, in Washington, Tutwiler took issue repeatedly when reporters described the President’s remarks as a rejection of the proposal.

Gorbachev’s spokesman urged caution in starting a ground war.

“I believe that a land offensive will not bring any additional advantage,” said Vitaly N. Ignatenko. “After all, we are not after the total destruction of Iraq, breaking its backbone. This offensive will only bring new casualties, new bloodshed.”

The Soviet initiative was welcomed by the foreign ministers of the 12 European Community nations as a possible way of averting the carnage of a ground war.

Meeting in Luxembourg, the foreign ministers also reaffirmed their general commitment to work toward the “security, stability and development” of the entire Mideast when the war ends.

The ministers also decided to end official contacts with Palestine Liberation Organization leader Yasser Arafat, who has vocally sided with Iraq during the war.

In London, British Prime Minister John Major staunchly supported Bush’s response to the Soviet proposal, telling an afternoon session of the House of Commons: “Nothing has yet happened which would incline us to agree to a cease-fire or a pause in the conflict.”

France, however, indicated that the Soviet plan might be acceptable if the Iraqi response is “immediate and unequivocal.”

Roland Dumas, the French minister of foreign affairs, said Tuesday night that Gorbachev’s peace proposal could be considered as a basis for a settlement of the conflict, but he and other French officials described it as “insufficient” because it lacks dates and deadlines.

Dumas’ response was seen as a signal to Bush to be more receptive to the Soviet proposal or face a possible division in the coalition.

The elements of the Soviet proposal that are said to guarantee Iraqi territorial integrity and to protect Hussein from postwar retribution by the allies match the concerns of some French political leaders who feel that the United States is on the verge of overstepping its U.N. mandate by relentlessly bombing inside Iraq and moving to dismantle the Iraqi regime.

At almost every opportunity, French President Francois Mitterrand has stressed that France’s objectives in the war are the “liberation of Kuwait” and not the destruction of Iraq or even the Baathist dictatorship. In this respect, the French position and the reported details of the Soviet proposal dovetail closely.

But at the White House, Administration officials said that if the Iraqis embrace the Soviet proposal and agree to withdraw unconditionally, the United States would then insist on laying out all the U.N. resolutions and making sure that the Iraqis are prepared to abide by each one.

“Our judgment is that if Saddam says yes to the Soviet proposal, this is his latest proposal for getting out, not the Soviets’. And we would want to know how fast he would withdraw and set up a timetable and be sure he has met all 12 U.N. resolutions. We would have to set up the criteria for doing it, and they would have to do it pretty damn fast,” one official said.

The allies also would insist on “some way of dealing with Iraq’s armored vehicles that are in Kuwait,” a senior Bush aide said, “and the easiest way would be to insist that Saddam not take any of the vehicles back into Iraq.”

President Bush himself has vowed to aides that when the war is over, Hussein will no longer be a menace in the Persian Gulf and that his military machinery will be crippled. The Arab allies in the coalition opposing Hussein also have emphasized that if he survives the war, they want to make sure his military machinery has been dismantled or destroyed.

And Fitzwater stepped back from earlier suggestions that after the war, the Administration would be willing to contribute to Iraq’s reconstruction.

As part of his continuing efforts to keep the multinational coalition together, Bush spoke by telephone with Mitterrand, Canadian Prime Minister Brian Mulroney and Turkish President Turgut Ozal, the White House said.

Times staff writers Elizabeth Shogren in Moscow, Rone Tempest in Paris, Joel Havemann in Luxembourg, William Tuohy in London, John J. Goldman at the United Nations and Jack Nelson, Norman Kempster, Doyle McManus, Paul Houston and Robin Wright in Washington contributed to this report.