Fire Puts U.S. Moscow Embassy Out of Business : Soviet Union: No one is seriously hurt as 200 flee the 10-story structure. Sparks from a welder’s torch are blamed.

Fire swept the American Embassy in Moscow on Thursday, destroying the top floors of the building and heavily damaging much of the rest.

More than 200 U.S. diplomats and other embassy workers fled the building about 10:15 Thursday morning as the fire, apparently touched off by sparks from a welder’s torch, moved quickly up an elevator shaft to the roof of the 10-story building.

A U.S. Marine, one of the embassy’s security guards, was overcome by smoke, as were several Moscow firefighters, but no one was seriously injured, according to embassy officials.

The Moscow firefighters were repeatedly forced to retreat down their aerial ladders by the intense flames, sometimes reaching 30 feet into the air, and the heavy smoke, which could be seen from more than a mile away.

Although the firefighters pronounced the blaze under control about 12:30, little more than two hours after it began, they needed a further five hours to extinguish its embers. At the fire’s height, 26 fire engines with 180 firefighters were at the scene on Tchaikovsky Street, a busy thoroughfare.

Damage to the brick-and-cement building was extensive. The roof and attic burned away in the intense blaze, according to an embassy spokesman, and the next two floors, which contain many of the embassy’s most sensitive offices and its communications equipment, were also engulfed in flames. Other floors suffered heavy damage from water and smoke.

“While we are not out of business, we are out of that building for the indefinite future,” said James Bullock, the embassy’s information officer. . . . .

“Although we have made only a very preliminary damage assessment, it is clear that most of our central office block cannot be safely used at this time. . . . We are in the process of making alternative arrangements so that we can remain fully open.”

Although temporary offices were being opened in the embassy’s nearby residential compound, the effectiveness of the most important U.S. listening post in the Soviet Union has been greatly reduced at a time of domestic upheaval here as well as of sensitive negotiations between the two superpowers on arms control and other issues.

The fire was believed to have destroyed many of the embassy’s files--charred bits of paper fell like black snow on the street outside-- and it left the embassy without secure communications.

Evacuation took about 15 minutes as staffers hurriedly cleaned off their desks, stuffed secret papers into safes and donned gas masks against smoke inhalation.

Fire drills have been so frequent, however, that many thought this was another, bringing their morning cups of coffee out onto the street with them but leaving their purses and briefcases behind.

Nikolai Zamatayev, a spokesman for the Moscow fire department, said initial indications were that the fire was caused by sparks during welding work, part of an embassy renovation that was nearing completion, and spread up the building through an elevator shaft.

In Washington, State Department spokesman Richard Boucher said the U.S. government has no reason to suspect that the fire was set. He said there seem to have been no compromises of security.

Nevertheless, he said the fire will seriously disrupt embassy operations, perhaps for months.

“The embassy is closed,” Boucher said. “None of its public phone lines are operating. And it may take a few days to provide even an estimate of when normal services to the public, including visa issuances, might resume. We do expect that arrangements will be made very soon to provide emergency services to American citizens.”

Labeled “a firetrap and unsafe” in a congressional report four years ago after a series of major and minor fires, the building has remained in use because of the difficulty in constructing a secure new embassy in the Soviet capital.

Work on a new embassy building a block away was halted in 1985, when the structure was two-thirds complete, after U.S. inspectors found it so infested with electronic eavesdropping devices, apparently installed by Soviet builders, that it would never be secure.

Controversy has raged ever since over whether to tear down the new building and rebuild from the ground up, to put up an additional building that would be secure from Soviet eavesdropping or, in the State Department’s latest proposal, to add a three-story “top hat” to the structure.

Pressure will now be intense on the Bush Administration to come to an agreement with the Soviet Union on the future of the new building; as a matter of reciprocity, Soviet diplomats have been barred from occupying their new embassy in Washington, although it was completed more than six years ago.

Whatever choice is made, by the time the new U.S. Embassy is complete more than $500 million will have been spent on it. With little hope of an early U.S. decision, the old building was undergoing a $50-million renovation when the fire broke out.

The State Department’s Boucher said the new building “is nowhere near completion and it’s just not suitable for any kind of temporary operation.” However, he said some temporary operations will be conducted in the compound that surrounds the new building, which includes 134 apartments plus support and recreational facilities and has been in use for several years.

Originally an apartment building, the present embassy has been rented by the U.S. government since 1953 after the Soviet dictator Josef Stalin had demanded that the Americans leave their previous embassy opposite the Kremlin.

Over the years, the mustard-colored building has been plagued not only by fires but also by espionage and intrigues involving mysterious microwave bombardments, the bugging of the ambassador’s office and a sex-for-secrets scandal involving Marine guards.

Despite fears among some embassy personnel about compromising the building’s security, senior embassy officials immediately summoned the Moscow fire department, and Marine security guards led the Soviet firefighters through its labyrinthine offices.

“Several hundred people work in the embassy, and it would have been unconscionable to risk their lives by failing to call for assistance,” Bullock said.

The embassy suffered even greater damage in a 1977 fire, when officials refused for a time to admit the firefighters into the building for security reasons.

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