Mitterrand Backs U.S. on Use of Force in Iraq : Diplomacy: But he and Bush do not see eye-to-eye on how to help the Soviet economy at this week’s summit.

President Bush collected the endorsement Sunday of French President Francois Mitterrand for renewed military action against Iraq if necessary, pinned a medal on the general who led French forces in the Persian Gulf War, then flew here for the opening today of the annual economic summit conference of the world’s leading industrialized democracies.

With Bush trying to keep up the pressure on Iraqi President Saddam Hussein, holding out the threat of allied military strikes if Hussein mistreats Iraq’s Kurdish minority or refuses to allow the destruction of suspected nuclear weapons projects, Mitterrand’s decision gave the American President precisely the show of support he sought.

If the conditions imposed on Iraq in the postwar cease-fire agreement are not met, Mitterrand said shortly before Bush arrived, “France is ready.”

The two, however, did not exactly see eye-to-eye on the No. 1 item facing Bush at the summit conference: the uncertain issue of how to assist Soviet President Mikhail S. Gorbachev’s effort to jump-start the moribund Soviet economy.

Mitterrand made clear that he favors greater direct assistance than does Bush, who has hewed to a policy of offering experts’ advice to help the Soviets develop a market economy and giving the Soviet Union associate membership in the International Monetary Fund--but holding back American dollars until basic reforms in the way the Soviet economy operates have taken firm root.

“Mr. Gorbachev should be able to receive the aid that would be necessary for him to enable the economic situation of his country to pick up,” Mitterrand said at a news conference. “He must be given enough aid so as to be able to succeed, and straightaway.”

But Bush said: “This is not blank-check time. Reforms have to take place before money could well be spent in helping to solve these problems.”

The two presidents met for about an hour in the chateau at Rambouillet, about 30 miles west of Paris.

Although the summit is built around economic issues facing the so-called Group of Seven democracies, the real focus will be on what happens immediately after the summit ends Wednesday. That is when Gorbachev will be on stage--first at a two-hour lunch with Bush and then at a meeting with Bush and the six other leaders.

With Mitterrand at his side at the news conference, Bush said: “We are together in the way we’re looking at this situation in Iraq. . . . Saddam Hussein’s continuation of lying and trying to go forward with some nuclear capability. And that is a cause for alarm all over the world.”

France, which contributed 16,000 troops to the allied military effort against Iraq and will keep 200 to 300 soldiers in Turkey, just across the border from Iraq, as a deterrent to Iraqi attacks on its Kurdish citizens, has been prickly about whether available evidence bears out Bush’s ongoing concerns over Hussein’s nuclear industry.

Mitterrand said the two leaders decided that “our military staffs would remain in close, constant touch, in order to exchange information.” This, he said, would apply in particular to “the continuation of Iraqi activities in the nuclear field.”

“As to military intervention against a supposed nuclear site, I said to President Bush that the important thing would be for information to be forthcoming to us so that we could be sufficiently certain that there was nuclear activity going on for it to be justified,” he said.

Bush added: “There has been incontrovertible evidence presented to the United Nations Security Council that the man (Hussein) is lying and cheating.

“I can tell you I am still . . . very much concerned about his intentions--with reason. I’m not just thinking that way. I have evidence to back that up,” Bush said.

Like Bush, Mitterrand watched with satisfaction as his public approval ratings soared during Operation Desert Storm, and he has seen them slip downward since then.

But Sunday’s events enabled Mitterrand to bask again in the glow of the allied Gulf War victory. These events, besides the meeting with Bush on Bastille Day, the French national day, included a ceremony at which Bush decorated French Gen. Michel Roquejeoffre with the Legion of Merit.

The decoration, which Bush also presented in London to Peter de la Billiere, the British Gulf War commander, is the highest award the President can present to a member of another nation’s armed forces.

Shortly before Bush arrived in Rambouillet after an overnight trip from his vacation home in Kennebunkport, Me., Mitterrand signaled his support for the President’s continued hard line against Iraq.

In an interview that is an annual event on Bastille Day, Mitterrand told French journalists that military intervention in Iraq is valid “if it is to protect populations martyred, persecuted and massacred by the government of Saddam Hussein or if it is to prevent Iraq from arming itself with nuclear weapons.”

Iraqi nuclear facilities were among the first targets struck by U.S. warplanes at the start of the Persian Gulf War in January, but postwar reports have indicated that not all were destroyed.

Mitterrand’s remarks were everything the White House had hoped for. “We’re happy,” one official said.

On the subject of aid to the Soviet Union, a White House official said the French and Americans differ not only about whether to provide hard-currency assistance but also about where it should come from.

At the Group of Seven summit in Paris two years ago, the industrial democracies established a European Bank for Reconstruction and Development to boost the economies in Eastern Europe. Mitterrand would allow the bank to increase its lending to the Soviets--perhaps at the expense of funding for the smaller states that were once part of the Soviet Bloc. Bush has argued that this would not pass political muster in the United States.

The summit partners, Bush said, “will not do anything that will send a signal that we are shifting our attention away from the fledgling democracies in Eastern Europe in order to help the Soviet Union.”

With Sunday’s flight to Europe, Bush entered an intense but uncertain period of summitry.

Even as Bush began his meetings with Mitterrand, Secretary of State James A. Baker III remained in Washington, working with Soviet Foreign Minister Alexander A. Bessmertnykh to try to resolve final differences that are holding up the Strategic Arms Reduction Treaty. The goal of both sides is to complete work on a treaty in time to set up a U.S.-Soviet summit conference in Moscow by the end of July.

“The major problems appear to be resolved. But there are two or three problems that are important that need to be finalized before we can say we have a deal,” Bush said at the news conference at Rambouillet. “I think we have a reasonable opportunity. But we are not going to make a bad deal to just try to get something done before Wednesday. Nor are the Soviets.”

Gorbachev’s participation--delayed until after the formal close of the summit to make it clear that the Soviet Union is not yet a central player on the world economic stage--reflects how far the Soviet Union has come in recent years and also how far it must go to achieve the prosperous, market economy Gorbachev says he seeks.

At the end of the annual economic summit two years ago, Bush emphasized that despite the Group of Seven’s interest in boosting Gorbachev’s efforts to effect economic reforms, no serious consideration was being given to his being invited to join the annual conference because the Soviet economy did not come close to having the international clout of the others.

Now, however, his invitation to meet with the seven after their summit this year represents a degree of acceptance, as well as recognition of his desperate need for assistance, by the group.

Bush Administration officials are shaking their heads in dismay over the problems Gorbachev faces, including lack of economic experience available in the Soviet Union.

The Soviet president last week sent a lengthy letter to the seven summit partners outlining his views of the problems of the Soviet economy, operated for more than seven decades by the Communist economists in the Kremlin. It discussed what he is attempting to do to get the economy moving, his plans for the future and his hopes for international assistance.

But Administration officials share little or none of his hopefulness.

Gorbachev’s knowledge of economics is said to be rudimentary, and the Bush Administration views the Soviet leadership as the political offspring of a group that has routinely violated the basic laws of economics for decades, dismissing them as capitalistic devices.

Gorbachev’s hope to transform the Soviet Union in five years, with sufficient Western aid, is considered dreamlike within the Bush Administration. His notion of quickly shifting from a controlled economy to one in which prices respond to the demands of the marketplace and consumer goods appear on store shelves is considered a tall order.

At the summit, Bush is likely to find himself caught between a variety of pressures--from Germany, seeking partners to help pay for Gorbachev’s program, and Japan, which is perhaps even more reluctant than the U.S. Administration to contribute hard currency.

Gerstenzang reported from Rambouillet, France, and London. Tempest reported from Rambouillet.