Iraq Aims Propaganda Barrage at Rebels : Insurgency: Baghdad blames U.S. and Iran for fomenting rebellion. Washington says the fighting continues in both north and south.

“It was all blood, blood, blood,” exclaimed a Monday report in Iraq’s government newspaper. After a two-week media blackout on the country’s bonfire of rebellion, Saddam Hussein’s embattled regime is staging a wide-open campaign to turn public opinion against the insurgents.

For the second straight morning, Baghdad dailies splashed photos and stories of the burgeoning civil warfare across their front pages. Editorialists, who for a fortnight spoke only of unrest in the south--and that rarely--were pulling no punches as the third week of rebellion began.

“The barbarism and brutality of the U.S. aggression against Iraq was not isolated from all the crimes that took place after the cease-fire at the hands of mobs, agents and outlaws,” declared the military newspaper Al Qadissiya, blaming the American victors in the Persian Gulf War for inciting insurrection. Hussein himself, speaking publicly Saturday evening for the first time since the end of the 100-hour war, put the blame on Iran, which he accused of stirring Shiite Muslims in southern Iraq to rise against Baghdad.

What his regime has not yet been able to put down by force, the Iraqi president obviously decided, will be attacked with a propaganda barrage as well. A reporter for the government daily Al Jumhuriyah was dispatched to the key southern city of Karbala, revered by the Shiite sect as the burial place of its earliest imams, or religious leaders.

Like other government correspondents, Jumhuriyah’s reporter said rebels had rampaged through the city, killing innocents and destroying property. Bodies were stacked in Karbala’s hospitals, he wrote. “Blood was painted on the streets and the walls of the city. It was all blood, blood, blood.”

International wire services in Baghdad on Monday said that the Iraqi press had made no mention of the rebellion reported raging in the Kurdish-dominated northern provinces, concentrating instead on the insurgency in the south.

Al Thawra, the newspaper of Hussein’s ruling Arab Baath Socialist Party, said the rebellion in the south was meant to destroy Iraq and “turn it into another Lebanon.” Hussein’s government insisted that the rebellion in the south was ethnically based on the Shiite majority there and was being stirred up and agitated by the Shiite regime in neighboring Iran. The Ayatollah Ali Khamenei, Iran’s spiritual leader, did nothing to hide the relationship Sunday when he declared Monday a day of mourning in Iran for “the massacre of Iraq’s defenseless people by the Baathist criminals.”

Relations between Baghdad and Tehran have risen from the ashes of their 1980-88 war, only to collapse again during the Gulf conflict. Less than a week after his army invaded Kuwait, Hussein settled an edgy truce with Iran by offering peace on Tehran’s terms, forsaking all political and territorial gains that Baghdad had made during the war. The two enemies announced a resumption of diplomatic relations, Iran pledged its neutrality in the Gulf War and gave sanctuary to more than 10% of Iraq’s air force, which fled apparently uninvited to Iranian bases.

But in the aftermath of the war, rebellion in southern Iraq--both in the Shiite shrine cities of Karbala and Najaf and in the Sunni Muslim-dominated port of Basra near the Iranian frontier--has broken the facade of rapprochement between the two countries.

On Monday, the People’s Moujahedeen, an Iraqi-based organization of Iranian guerrillas opposed to the Tehran government, said units of Iran’s paramilitary Revolutionary Guards had crossed the frontier and attacked a Moujahedeen base near Kifri, 100 miles northeast of Baghdad.

Factional complexities such as that tend to support Hussein’s insistence that the rebellion is based on sectarian politics and threatens, as he said in his Saturday speech, to lead Iraq “down a dark tunnel traveled by Lebanon before.”

Exile leaders for the Kurdish and Shiite insurgents claim that the revolt was not planned but exploded in resentment against the war-weakened regime in Baghdad. The exiles met last week in Beirut and declared that they seek only the downfall of Hussein and the Baathists. They agreed to form a transitional coalition government and hold free elections if the iron-fisted Hussein regime is dislodged.

Since the rebellion broke out in Basra more than two weeks ago, Baathist leaders and offices have been a primary rebel target. Independent accounts are unavailable, but most reports indicate that after an initial surge of protest in the southern cities, Hussein’s military has regained the upper hand. For the last three days, Tehran Television has been showing film of the fighting in Karbala, including artillery damage to Shiite mosques.

Refugees from Basra reaching the Kuwaiti frontier said Hussein’s Republican Guard troops have been hanging insurgents from the gun barrels of their tanks.

In Washington, State Department spokesman Richard Boucher reported heavy fighting in northern Iraq between government forces and the Kurds. He said combat was also continuing in the south between loyalist troops and Shiite insurgents.

“Kurdish dissidents now appear to control large portions of predominantly Kurdish areas of northern and northeastern Iraq,” Boucher said. “Fighting is also continuing in the south along the lower Tigris and Euphrates rivers and in the vicinity of the Shia holy cities of Najaf and Karbala, but the overall situation in that area is unclear. We can confirm that, unfortunately, both holy shrines in Karbala have been damaged in the recent fighting there.”

On Monday, exile spokesmen said the battle in the south was focused around the city of Al Kut, which occupies a key crossroads halfway between Baghdad and Basra.

The Associated Press, quoting travelers from Iraq, said the army has established checkpoints on roads reaching Baghdad from the south and within the capital itself. Cars and houses were being searched for weapons, the reports said. Hussein’s government has admitted trouble in the north and south but denied that Baghdad itself has been touched by rebellion. Exile reports, however, claim that a number of working-class suburbs, mainly populated by poor Shiites, have risen against Hussein’s rule.

On Sunday, Baghdad Radio announced that the president had appointed Izzat Ibrahim, vice chairman of the ruling Revolutionary Command Council, as deputy commander in chief, directly under Hussein. The appointment reflects Hussein’s tightening circle of command under the threat of revolution. Ibrahim is a longtime Baathist colleague of Hussein, a native of the city of Tikrit, the president’s birthplace, and is considered completely loyal.

In recent weeks, Hussein has named another Tikriti, a relative, as interior minister in charge of Iraq’s oppressive police network. And, according to other reports, Hussein has not been seen recently outside the company of his cousin and brother-in-law, Hussein Kamel Majid, the minister of industry and military industrialization.

Times staff writer Norman Kempster in Washington contributed to this report.