Bush, Gorbachev to Meet July 17 at London Economic Talks : Diplomacy: They could clear way for a Moscow summit by month’s end.

President Bush and Soviet President Mikhail S. Gorbachev will meet for two hours in London later this month, Bush said Monday, as their two nations try to narrow their differences over a treaty on how to reduce nuclear weapons arsenals.

Some officials believe that the July 17 meeting could eliminate the final obstacles to a much-delayed U.S.-Soviet summit, allowing the two men to meet in Moscow by the end of the month--a prospect that Bush said has not been ruled out.

But others said that it could instead ease the pressure for such a summit and enable both sides to pursue a more leisurely pace, with a full-fledged U.S.-Soviet summit not coming until the autumn.

In other remarks at a wide-ranging press conference at his vacation home in Kennebunkport, Me., the President delivered a blunt warning to Iraqi President Saddam Hussein over charges that he has been hiding suspected nuclear production equipment from U.N. inspection teams.

Asked whether U.S. forces in the region might be sent into action against Iraq if unfettered inspections are not permitted, Bush said that recent speculation implying that the United States would take a hard-line stance is “not all warrantless.”

The President also sent a clear signal to Israel about the Middle East peace process, saying that he is “not giving one inch” over opposition to settlements in the Israeli-occupied territories.

He also said that, if the peace initiative does not eventually show progress, he plans to tell the American people exactly what his formula offered to individual countries and what went wrong--making it clear that there is a limit to his patience for “quiet diplomacy.”

Gorbachev will arrive in London struggling to hold together the disparate elements in Soviet politics, stir up the moribund Soviet economy and overcome the objections of the Soviet military hierarchy to a strategic arms reduction treaty.

The luncheon between Gorbachev and Bush at Winfield House, the U.S. ambassador’s residence in London, will allow the two presidents an opportunity to review those efforts, as well as the unsettled situation in the Persian Gulf.

“We’ve got a lot of things we look at identically . . . such as United Nations action against Iraq’s aggression,” Bush said.

One White House official said that the agenda for the meeting--just before Gorbachev speaks to the leaders of the United States, Germany, Japan, Britain, France, Canada and Italy at the end of their annual economic summit conference--will include the economic issues that the Soviet president is likely to raise at the larger meeting. However, he said, arms control matters could be added to the agenda, depending on the progress that is made in coming weeks by U.S. and Soviet negotiators in Geneva.

The remaining sticking points on the arms treaty, a U.S. arms control official said, are technical details that do not need to be worked out by the two presidents.

On the subject of whether the two sides would be able to come up with specific proposals to help bail out the Soviet economy, Bush was not optimistic.

“We’ve got an awful lot of consultation before concrete economic programs can be agreed to,” he said.

“You know, you read a lot of stories that Gorbachev was coming there hat in hand, asking for a big check. That was never his intention. I am assured of that,” Bush said.

Nevertheless, the President acknowledged that Gorbachev’s presence in London could raise expectations for assistance to the Soviet economy that cannot be met.

“Economic problems in the Soviet Union and elsewhere are so enormous that it’s very important that we get as close together in agreement” as possible, he said.

Bush said that the meeting with Gorbachev would not make a summit conference by the end of July any less urgent.

“You can’t cover everything in two hours,” he said, but “maybe we’ll be able to move the START process forward.” START is the acronym for the strategic arms reduction talks, which aim at a treaty reducing the U.S. and Soviet arsenals of long-range nuclear weapons by one-third.

A summit is needed, Bush said, so that he can “sit down over a period of time with (Gorbachev) to really in-depth discuss issues. A lot of the talk would be philosophical talk, intentions. ‘What do you think our intentions are toward the Soviet Union?’

“I think I could convince Gorbachev that their military has nothing to fear from us,” Bush added.

“My respect for him is such that I find when we can sit down and talk over a reasonable period of time, you can get into a lot of subjects, which I’m sure we can’t do at a two-hour lunch,” Bush said.

Bush was pessimistic in discussing the actions of Iraqi President Hussein.

Three days after Iraqis fired shots over the heads of a U.N. inspection team, the President said that the dispute between Iraq and the United Nations over access to the nuclear sites remains unsettled, although Iraq has since said that inspectors would be allowed to see the facilities.

“I haven’t seen anything that makes me think it’s calming down,” Bush said. “What we’ve got to have is evidence that full inspection on challenge will be granted.”

Hussein must meet the requirements of the war-ending U.N. resolutions granting such access, Bush said, “or we’ll figure out what else happens.”

“If he assumes that he can get away with this kind of thing, he’s just as wrong today as he was on Aug. 2 when he sent his forces into Kuwait,” Bush said.

“Everybody, everyone knows that the man was cheating and lying. Everyone knows that he did that which the resolutions say not to do. And he should give unfettered access to these inspectors. He didn’t do that. He surreptitiously moved the equipment,” Bush said.