Iraq Rebuilds Its Forces, House Told : Persian Gulf: Panel staffers say Baghdad is likely to soon be dominant power in region again. State Dept. official reports Iraq could revive nuclear arms program.

Iraq appears to have rebuilt much of the conventional weapons complex that the allies destroyed during the Persian Gulf War and could well revive its nuclear bomb-making capability as well if the United Nations eases its sanctions, Congress was told Tuesday.

The assessment came in separate, sometimes conflicting, assessments from Robert L. Gallucci, assistant secretary of state for political and military affairs, and from a report on the Iraqi rebuilding by the staff of a House Foreign Affairs subcommittee.

Although Gallucci insisted in testimony that U.N. weapons inspectors have forced Baghdad to disclose or deactivate all of its nuclear weapons facilities since the 1991 Gulf War, he conceded that “over the long term, Iraq still presents a nuclear threat.”

Meanwhile, the staff report contended that Iraq has resumed production of “a very wide range” of conventional weaponry and also has succeeded in returning to service most of the tanks, artillery and combat aircraft damaged during Operation Desert Storm, as the allied military effort to drive Iraqi occupiers out of Kuwait was called.

“As a result,” the report concluded, “Iraq is likely to re-emerge as the dominant military power in the region in very short order.” And it warned that if the buildup is allowed to continue, “the Gulf could face the threat of renewed Iraqi aggression during this Administration.”

The combination of reports appeared likely to bolster arguments by the Administration that the U.N. Security Council should toughen enforcement of its sanctions in the face of increased Iraqi harassment recently of the U.N. weapons inspection team.

The two sides are at an impasse now over Iraq’s apparent refusal to obey the inspectors’ orders to destroy certain equipment used in the production of chemical weapons and to allow the U.N. team to install cameras at two rocket-motor test stands.

Iraq has repeatedly sought to impede the activities of U.N. weapons inspectors, often delaying their entry into suspected weapons facilities.

President Clinton has warned that Baghdad’s recalcitrance has become a major concern among the allies, and U.S. officials have hinted that the United States and its allies are prepared to take further military steps soon if Iraq does not meet U.N. demands.

Earlier this month, the Security Council declared that Iraq was in violation of the Gulf War cease-fire accords and was likely to face “grave consequences” if it did not comply with the inspection team’s requests.

And Rolf Ekeus, the chief of the U.N. commission overseeing the weapons inspection effort, has warned that Iraq’s military preparations are so advanced now that its weapons programs would “grow up like mushrooms after the rain” if the trade embargo was lifted.

The twin assessments delivered Tuesday came barely two days after the Administration launched a missile strike against Iraqi intelligence headquarters in retaliation for Iraq’s part in an alleged attempted assassination of former President George Bush.

State Department spokesman Mike McCurry reacted cautiously to the subcommittee document, telling reporters only that the United States has been “aware that Iraq has been rebuilding its conventional military capability.”

Defense Secretary Les Aspin told CNN’s “Newsmaker Sunday” program last weekend that Iraq’s military force had “maybe been built up a little bit, but not much” since the Gulf War. He insisted that it is now only “about 40% of what it was before Desert Storm.”

The subcommittee staff report, a 27-page document that the authors said was based on interviews with U.N. inspectors and officials of the International Atomic Energy Agency in Vienna, contained these major elements:

* Despite continuing inspections by U.N. and IAEA inspection teams, Iraq has been able to rebuild the lion’s share of the military manufacturing capability that it had before Desert Storm.

* In the face of a stiff U.N. embargo, Baghdad has successfully reactivated many of its black-market weapons procurement networks, relying on front companies in Jordan, France and Germany to buy critical items and spare parts for its weapons industry.

* Despite a trade embargo imposed by the United Nations, Iraq continues to ship oil to Jordan and to Iran and to use its earnings to help finance its weapons procurement program. It currently is manufacturing tanks, artillery and even short-range ballistic missiles.

* Iraq has repaired and returned to service most of the 2,500 battle tanks and 250 fixed-wing aircraft that survived Desert Storm. And U.N. inspectors warn that Baghdad is poised to revive its nuclear weapons program as soon as sanctions are lifted.

* Iraq’s refusal, even to this day, to provide detailed information on its source of supplies “is one of the most daunting problems facing the U.N. inspection teams.”

The report stressed that Iraq’s success in rebuilding its military-industrial base has occurred “despite the most rigorous international economic sanctions imposed on any nation since World War II and despite instructive inspections” by the United Nations and IAEA.

In Baghdad, however, the chief U.N. nuclear inspector, American Robert Kelley, was reassuring at least about Iraq’s nuclear weapons program.

“Literally billions of dollars’ worth of effort has been destroyed,” he told the British news agency Reuters. “That’s why we say the program from before the war is dead. . . . All of the critical facilities have been destroyed; virtually all of the critical equipment . . . has been destroyed.”

But Kelley added, “If Iraq would choose to restart a nuclear weapons program, they would probably do it faster than anyone else in the world because they have a lot of experience under their belt.”