Saudis May Inspect Chinese Cargo Due in Iran : Diplomacy: Under the proposed plan, ship would dock at Saudi port. U.S. thinks it is carrying deadly chemicals.

The United States, China and Saudi Arabia are moving toward a novel and complex agreement that would open the way for inspection of a Chinese ship believed by U.S. officials to be carrying chemical ingredients for deadly poison gases, according to officials familiar with the delicate negotiations.

Under the proposed settlement, the Chinese ship would dock at the Saudi port of Dammam, where its cargo would be examined under the direction of Saudi officials. The aim of the inspections would be to determine whether the cargo includes the chemicals thiodiglycol, used to make mustard gas, and thionyl chloride, a key ingredient for nerve gas.

The inspections could help defuse an acrimonious dispute between the United States and China. U.S. officials believe China intended to export the dangerous chemicals to Iran for possible use in an Iranian chemical weapons program.

Chinese officials, in turn, have accused the United States of “bullying” and have denied accusations that the ship is carrying the chemicals. Beijing also has demanded compensation for what it terms American harassment of the ship.

The controversy is seen as an important test of the continuing American effort to stop the proliferation of weapons of mass destruction.

U.S. warships and reconnaissance planes have been closely tracking the Chinese ship, named the Yinhe, since it left the Chinese port of Dalian on July 15.

For the past several weeks, the ship has been in the waters around the Persian Gulf, receiving relief food and water from a supply vessel, while Washington and Beijing have wrangled over its cargo.

Several Persian Gulf states refused the ship permission to dock in their waters, apparently to avoid being drawn into a dispute involving the powerful nations.

An inspection, should it occur, could set a precedent for similar inspections of international cargo in the future. The United States has no authority under international law to board and inspect a ship on the high seas, and American officials said the controversy over the Yinhe had to be worked out through diplomatic negotiations that were carried out mostly in Beijing.

“Things seem to be headed toward an agreement,” one senior Clinton Administration official in Washington said Monday. “There is an indication that they (Chinese officials) are prepared to (permit inspection of the ship’s cargo in Saudi Arabia). . . . I’m not saying they’ll do it with big smiles on their faces.”

A source familiar with the Chinese government’s position confirmed that it has agreed to let the ship dock for inspection in Saudi Arabia. The source said Beijing had needed time to work out its position, because Chinese officials needed to investigate what the ship is carrying.

It is not clear why China would agree to the inspections if the Yinhe is carrying dangerous chemicals. One possibility is that American intelligence officials made a mistake about the original cargo of the ship. Another possibility is that the Chinese ship has somehow unloaded or dumped its cargo. A third possibility, of course, is that despite China’s defiance and outrage, the inspections will turn up evidence that the U.S. accusations were on target.

It was China that first made public the simmering dispute between the two countries, and China has been particularly insistent in claiming it has been unfairly accused of wrongdoing.

“The Chinese ship Yinhe is carrying stationery, metals and machine parts, and the goods were to have been unloaded at Dubai for transshipment to Iran,” the Chinese Foreign Ministry said in a written statement.

Saudi Arabia has had friendly ties with both the United States and China ever since Prince Bandar ibn Sultan, the Saudi ambassador to Washington, visited Beijing six years ago to buy Chinese intermediate-range missiles.

State Department spokesman Mike McCurry and other U.S. officials carefully avoided calling the arrangement a “deal,” apparently out of sensitivity to Beijing’s position that China’s shipping is its own affair and should not be subject to negotiations with the United States.

While apparently moving to settle one issue between Washington and Beijing, the State Department on Monday stepped up its protests over a human-rights dispute.

McCurry said in a prepared statement that the United States is urging the Chinese government to let labor activist Han Dongfang return home to China. China announced over the weekend that it is denying re-entry to Han and is canceling his passport. Han had been imprisoned in China after the 1989 Beijing massacre of political demonstrators but was given permission last year to leave for the United States.