U.S. Allies Block Iraq Buffer Plan : Mideast: France rejects idea of a military exclusion zone north of Kuwait, while Britain is lukewarm to it. Officials say Clinton has not decided on further measures.

American allies Wednesday thwarted a Clinton Administration plan to create a military exclusion zone on the Iraqi side of the Kuwait border, forcing U.S. officials to scramble for a new formula to prevent a recurrence of the current dispute with Iraqi leader Saddam Hussein.

The French firmly rejected the plan, saying that Iraqi troop movements within the country’s borders do not violate United Nations resolutions or international law. British officials gave the American idea a lukewarm reception and said they were looking for other ways to limit Hussein’s behavior.

White House aides said that while President Clinton continues to believe that an internationally enforced exclusion zone may be the best way to ensure that Hussein does not threaten Kuwait, Clinton is not trying “at this point” to sell the idea to reluctant allies.

Officials said that Clinton has not yet decided what further measures to take if Hussein leaves his troops in a threatening position or does not pull them back to the positions they held before the buildup.

“The President has made no decision on what he’s going to do in the final event to make sure that Saddam Hussein cannot again threaten the security of the region,” a senior official said.

U.S. officials insisted that the United States and its allies have the authority to launch military attacks on Iraqi troops if Hussein does not fulfill pledges to withdraw them from the Kuwaiti border.

Pentagon officials said intelligence reports showed Iraq continuing to withdraw its forces from the Kuwaiti border region in response to U.S. demands, but they added that it was still too early to tell where the troops were being sent.

A senior defense official said that parts of two of the three divisions that the Iraqis moved into the area during their recent troop buildup--amounting to half the number they deployed recently--had been loading their equipment onto railroad cars and moving it north.

But he cautioned: “It’s going to take a number of days before we can really feel confident to say (that) we know the force is pulling out. We don’t see any evidence that (the Iraqis) might be playing a game out there. But again, only time will tell.”

In a proposal circulating at the United Nations, the Administration is asking international support for a resolution demanding that Iraq return its offensive forces to the “status quo ante,” referring to their positions before the rapid buildup in southern Iraq detected last week.

American U.N. Ambassador Madeleine Albright met with the four other ambassadors who have the power of veto and proposed that the Security Council pass a resolution demanding that the Iraqi troops go back to their earlier positions and never threaten the Kuwaiti border again.

An American official at the United Nations said the other four diplomats--representing Russia, Britain, China and France--did not object to the substance of the resolution. But the Russians asked that a vote be put off until Russian Foreign Minister Andrei V. Kozyrev completes a trip to Baghdad. Kozyrev is scheduled to arrive in the Iraqi capital today to join a team of Russian diplomats who are trying to defuse the tension between Hussein and the West.

“We have the same goals as Kozyrev,” the U.S. official said. “Whether we pass the resolution before or after he goes to Baghdad is still an open question.”

According to the official, the American resolution would require that elite Republican Guard units leave the south and not return and that the army divisions that were in the south before the current buildup are never again deployed in a way that threatens Kuwait.

The resolution does not contain any provision for enforcement.

“We are not seeking an authorization for the use of force,” the American official said. “We believe we already have that in existing Security Council resolutions and in Article 51 of the U.N. Charter,” which guarantees the right of self-defense against aggression.

The American official even denied that the United States had ever proposed an exclusion zone that would prohibit the deployment of any heavy weapons in southern Iraq. “An exclusion zone was never something we proposed,” he said. “That was greatly exaggerated. It was never a decision by the Administration. We never proposed it to anyone at the U.N.”

However, numerous senior U.S. officials--including the deputy defense secretary and Albright herself--had floated the exclusion zone idea in the previous two days. Secretary of State Warren Christopher also discussed it with officials of the Gulf Cooperation Council in Kuwait City on Wednesday.

The proposal would have created a military exclusion zone on the Iraqi side of the Kuwait border and prohibited Iraq from sending certain kinds of troops and equipment into the area.

Officials said that one option considered was to use the same boundaries as the “no-fly” zone that the allies established over southern Iraq in 1992, which bars all flights by Iraqi aircraft below the 32nd Parallel, 150 miles from the Kuwaiti border.

Under the earlier plan, Iraq would have been able to keep some troops within the zone, equal in size and composition to those that it has maintained there traditionally. But it would not have been permitted to assemble offensive forces and armored equipment in the area.

Officials had said that one benefit of establishing such an exclusion zone would be that allied warplanes, which have been flying sorties over the area for months, could enforce it easily.

A British official said that the “permanent five,” as the five governments with the U.N. veto are known, will meet again today to discuss the Albright “status quo” proposal. According to another Security Council ambassador, the resolution had not yet been shown to the other 10 members of the council.

The British official also said it is possible that the five ambassadors might prefer a Security Council statement rather than a resolution. A statement has less legal force than a resolution but requires unanimous consent of the council. A resolution can be passed with only nine votes as long as none of the nay votes comes from one of the permanent five.

Defense Department officials said that the United States will continue troop deployments to Kuwait, with 35,883 U.S. ground troops expected to be there by the end of the week.

Times staff writer Art Pine contributed to this report.