Clinton Asks Saudis to Award $4-Billion Phone Project to AT&T; : Policy: Letter to King Fahd marks his second intervention on behalf of a U.S. firm seeking work in the desert kingdom.

RIYADH, Saudi Arabia —  President Clinton, again trying to persuade Saudi Arabia to buy U.S. products, called on its government to award a telecommunications contract to AT&T; valued at up to $4 billion, Secretary of State Warren Christopher said Wednesday.

The desert kingdom plans to update and expand its aging telephone system, and AT&T; is vying with telecommunications suppliers from Europe, Japan and Canada for the lucrative contract.

“I hope AT&T;, which has long been a market leader, will receive every opportunity to establish itself as Saudi Arabia’s preferred partner, both for quality and cost, in this project,” Clinton wrote in a letter to Saudi King Fahd. The letter was released here by Christopher.

This is not the first time Clinton has tried to use his persuasive powers to bolster U.S. industry. Thanks to his lobbying of King Fahd last year, the Saudis in February said they would buy commercial jetliners worth $6 billion from McDonnell Douglas Corp. and Boeing Co. rather than from Europe’s Airbus Industrie.

Also, Clinton gave U.S. cellular phone giant Motorola Inc. a big boost earlier this year when he pushed the Japanese government to help clear the way for Motorola to compete on an equal footing in the Tokyo cellular market.

Some analysts said Clinton’s intervention on behalf of U.S. companies in Saudi Arabia reflects Administration attempts to leverage the U.S.-led victory in the 1991 Persian Gulf War, which protected Saudi Arabia and its massive oil reserves from Iraq.

But they said Clinton’s appeals on behalf of Motorola and others elsewhere in the world are part of a broader effort to help U.S. companies better compete overseas.

“It’s certainly connected to the Gulf War, but it’s more than that,” said Robert Paulson, aerospace director with the consulting firm McKinsey & Co. in Los Angeles. Clinton is “playing a post-Cold War game of economic influence” and attempting to “level the playing field in international commerce,” he said.

But others said Clinton is risking going to the well once too often.

“It’s a little bit dangerous in the long run, because I think the Saudi people are not terribly enthused about this picture of the Saudi king bowing to American pressure,” said James E. Akins, a former U.S. ambassador to Saudi Arabia and now a consultant in Washington.

Akins noted, however, that Clinton is simply making the same personal effort that many government leaders in Europe and elsewhere routinely make on behalf of their industries when big contracts are at stake.

At Clinton’s request, King Fahd discussed the pending telecommunications purchase with Christopher during the secretary’s one-day stop in Saudi Arabia. Christopher said afterward that New York-based AT&T; was being given “serious consideration.” He is mainly in the region to discuss the Mideast peace process and other regional security issues.

At AT&T;, spokeswoman Suzanne Berman said the company is “pleased to have any effort by the Administration on our behalf,” but she declined to comment further.

Saudi Arabia’s telecommunications contract would involve adding more than 500,000 telephone lines to the overloaded Saudi system and converting the system to a newer digital format.

The other competitors for the contract are Northern Telecom of Canada, Siemens of Germany, Alcatel-Alsthom of France and a joint venture of Ericsson of Sweden and NEC of Japan.

Saudi officials in the United States were unavailable for comment Wednesday, as the Saudi Embassy and consulate offices were closed in observance of former President Richard Nixon’s funeral.

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Wright reported from Riyadh and Peltz from Los Angeles.