Allies Prepare Strategy to Force Out Hussein : Policy: Military defeat, continued sanctions and holding territory are seen as levers for change.

Buoyed by early reports of battlefield triumphs, senior Bush Administration officials Sunday for the first time sketched out extensive allied plans to seize and hold Iraqi territory as part of a strategy to force fundamental changes in Baghdad’s government.

Key to that strategy, military sources say, is a drive deep into Iraq aimed at seizing control of Basra, Iraq’s second-largest city and a strategic military center, as well as major points along the Euphrates River, the historic waterway that separates southern Iraq from the central part of the country.

Officials indicated they also intend to maintain economic sanctions on Iraq after the fighting ends to compel Baghdad to accept allied terms for ending the Gulf crisis.

The emerging allied strategy, coupled with the public statements by Administration officials Sunday, are the most direct evidence yet that one unofficial aim of the allied coalition is to force Saddam Hussein out of power.

Hussein “has demonstrated time and time again his character, and that is not compatible with a peaceful world,” National Security Adviser Brent Scowcroft said. Scowcroft reiterated the official policy--that allied forces “have not made” eliminating Hussein a “goal for the success of the operation.”

But he made clear that ending Hussein’s rule will “absolutely” be the allied coalition’s preference.

Bush and allied leaders hope that a combination of a devastating Iraqi military defeat, continued sanctions and allied occupation of a large sector of southern Iraq will provide enough leverage to force Iraq to sue for peace on allied terms, terms that are incompatible with continued rule by Hussein.

“One does not see how Saddam Hussein will mend his ways,” French President Francois Mitterrand said Sunday in a Paris press conference. After an Iraqi military defeat, “the political authority and the military authority of Saddam Hussein would be considerably affected,” Mitterrand said.

U.S. Defense Secretary Dick Cheney insisted that the allied coalition has “no interest in occupying Iraq,” but he acknowledged that allied officials “have also said that there won’t be any sanctuary inside Iraq for those forces who’ve been involved in occupying Kuwait.”

And the broad goal of reshaping Iraq’s government is part of what Secretary of State James A. Baker III referred to as the coalition’s “political aims,” as distinct from the more narrow “war aims” of liberating Kuwait and restoring its government.

While the coalition’s political aims appear related to President Bush’s oft-stated goal of assuring future stability in the Gulf region, they could lead to considerable postwar tension and will require a delicate balancing act by Bush and his advisers.

The Soviet Union and Arab countries that have been sympathetic to Iraq are all but certain to object to even limited allied occupation of Iraqi territory and to U.S. attempts to continue the economic quarantine clamped on Baghdad by the U.N. Security Council.

A key provision of last week’s Soviet-Iraqi peace plan was that economic sanctions against Iraq be lifted even before Iraq had completed a withdrawal from Kuwait.

The Administration, by contrast, may now try to continue at least some sanctions in force long after the war has ended. “Dropping those sanctions, even after the conflict is over, until we understand what is necessary to be done to rebuild the area, would be a serious mistake,” Scowcroft said.

On the other hand, at least some coalition members may want to go further than the Administration thinks wise. For example, Sheik Saud al Nasir al Sabah, Kuwait’s ambassador to the United States, said in broadcast interviews that officials of his exiled government “have repeatedly said that this matter is not over once Kuwait is liberated.”

“We are going to go ahead” with attempts to force Iraq to pay reparations for “the misery that he has inflicted over the people” of Kuwait, regardless of whether Hussein is overthrown, Saud said.

The potential conflict between U.S. aims and those of Arab governments bent on revenge against Hussein could require quick decisions about how much Iraqi territory will fall under allied control and which armies will be allowed to administer it.

The allied war plan has been designed to “minimize, if possible, soldier-to-soldier contact between the non-Arabs and the Iraqis,” one senior allied official said in an interview last week. And Administration officials have been hopeful that Arab forces, rather than Western armies, will be able to handle any occupation duties in southern Iraq.

For now, however, Western forces are those driving deep into Iraqi territory as the coalition armies seek to isolate and destroy Hussein’s troops.

One aim of the drive appears to be controlling crossing points along the Euphrates, which in its lower reaches flows roughly west to east, creating a barrier that separates the southern section of Iraq from the country’s heartland.

Controlling the river crossings would cut off the lines of retreat for the Republican Guard in southern Iraq and for Iraqi forces in Kuwait.

Allied forces would also gain control over an important section of Iraq that includes many of its oil resources and valuable military facilities.

If that goal is achieved, “the allies will have some control over some part of Iraq,” said Rep. Les Aspin (D-Wis.), chairman of the House Armed Services Committee and a key congressional supporter of the Administration. “At that point,” Aspin said, “the status quo is in favor of the allies, and Iraq has to want to change the status quo. They’re going to want to lift the economic sanctions; they’re going to want to get their territory back. And at that point, we say, ‘OK, let’s talk settlement.’ ”

Aspin made his remarks on CBS-TV’s “Face the Nation,” where Cheney also spoke. Baker was interviewed on ABC’s “This Week with David Brinkley.” Scowcroft was interviewed on NBC’s “Meet the Press,” and Kuwaiti Ambassador Saud was interviewed on several programs.

Even before the land battle began, Iraqi officials estimated that putting their economy back together would require billions of dollars to rebuild ruined factories, power stations and oil installations. To get that money, Iraq will have to reopen pipelines through which it exports oil and gain access to international bank credits.

The United States and its allies control both of those economic lifelines.

Iraq’s pipelines extend through Saudi Arabia and Turkey, both key allies in the anti-Iraq coalition.

Financial credits would have to come from institutions controlled by major industrial nations including the United States, Germany and Japan. Bush has kept in close touch with German Chancellor Helmut Kohl and Japan’s Prime Minister Toshiki Kaifu, and Japanese officials indicated last week that their country might withhold economic assistance to a postwar Iraq unless Baghdad agreed to allied terms.

Senior Administration officials have made clear that allied terms will seek to force Iraq to clearly recognize Kuwait’s sovereignty, drop all claims to the territory of the emirate and agree to limits on future military power, including development of nuclear and chemical weapons.

As part of the drive to gain control of southern Iraq, officials disclosed that French Foreign Legionnaires accompanied by U.S. troops of the 82nd Airborne Division were heading toward Nasiriyeh, a city on the Euphrates about 80 miles west of Basra that sits astride one of two main highways leading from central Iraq south to Basra and Kuwait.

At the same time, other units were reportedly planning to capture or encircle Basra, described earlier in the day by Gen. Colin. L. Powell, chairman of the Joint Chiefs, as “a center of gravity for the Iraqi forces within the Kuwaiti theater of operations.”

Basra serves as the headquarters of the Republican Guard, the seasoned force that Cheney once called the heart of Hussein’s power. The city also forms the hub of the Republican Guard’s supply routes: all roads leading to the guard’s entrenched camps pass through it.

And military officials believe that U.S. forces and the Republican Guard may meet along those roads.

“If you can seize Basra, defeat Republican Guard headquarters there,” allied forces could “draw the Republican Guard out of there and engage them openly,” one Pentagon official said.

Times staff writer Melissa Healy contributed to this report.