9:09 PM Apr 25, 1996

NATIONS TO ALLOW IRAQ TO RESUME LIMITED OIL SALES WILL BE SUSPENDED UNTIL MAY

The third round of the talks on an "oil-for-food" deal, which would allow Baghdad to sell one billion dollars worth of oil every 90 days, ended Wednesday as U.N. Secretary-General Boutros Boutros- Ghali left New York to visit South Africa.

Citing Boutros-Ghali's strong personal involvement in the talks, Iraqi Ambassador Abdul-Amir al-Anbari, the leader of the Iraqi delegation, said there would be no point in resuming the talks until the U.N. chief returns in early May.

The suspension was agreed to by Boutros-Ghali and Iraqi Deputy Prime Minister Tariq Aziz during a telephone conversation on Wednesday morning summing up the results of three rounds of oil- for-food talks so far, U.N. spokesman Ahmad Fawzi said.

But, although both al-Anbari and U.N. Under-Secretary-General Hans Corell, leader of the U.N. negotiating team, said the talks so far have been positive, the third round is ending amid frustration over U.S. and British objections to some tentative agreements.

"We are not back at square one," al-Anbari said. "I believe progress has been achieved."But he added that many technical issues remain unresolved.

Al-Anbari refused to blame the United States specifically for any snags in the talks. But he argued, "Some member countries are objecting to some of the provisions we have achieved on technical details, and made a few amendments."

Some Iraqi officials privately voiced anger that several tentative agreements reached between Corell and al-Anbari were dissolved after London and Washington -- the two veto-wielding U.N. Security Council members most supportive of the six-year embargo against Iraq -- objected.

Although most details of the arrangements for the oil-for-food deal remain murky, one U.S. diplomat, speaking on condition of anonymity, said Washington would oppose any involvement by Saddam Hussein's government in distributing humanitarian aid in the Kurdish north.

Under the terms of Security Council resolution 986, passed in 1995 to allow Baghdad to earn money to buy humanitarian aid, the Iraqi government must spend 15 percent of the money it earns on humanitarian relief for the Kurds. Hussein last year rejected that condition as a violation of Iraqi sovereignty, citing U.S. and British protection of a semi-autonomous Kurdish zone in the north.

In an April 10 draft, Corell and al-Anbari seemed to agree on allowing Baghdad, under U.N. monitoring, to distribute the aid to the Kurds. But U.S. officials say such an agreement would only allow Iraq to spread "mischief" and "manipulate" the humanitarian process.

U.S. officials also object to any agreements that would allow Baghdad to select a bank to open an escrow account for the money earned in the proposed oil sales. Such an allowance, the U.S. diplomat said, would give Iraq its first access to the international banking system since August 1990, when the Council first imposed sanctions following the Iraqi invasion of Kuwait.

Corell denied that the United States and Britain had altered any existing agreements with the Iraqis. "We had not agreed on any text," he said. "Nothing is agreed until everything is agreed."

But the U.N. envoy was clearly upset that individual nations had been able to obtain copies of the closely-guarded negotiations between the United Nations and Iraq.

"I am not submitting any text to governments," Corell said, adding that he did not know how any parties had obtained the draft text which he and al-Anbari had discussed.

The snags, and the continuing lack of progress toward lifting the Iraqi sanctions entirely, had led some observers to argue that Iraq will not win any relief from the international embargo until the Hussein government is ousted. U.S. Ambassador Madeleine Albright, however, has repeatedly said that Washington drafted resolution 986 to help Iraqis hurt by the embargo, and would be pleased if it is accepted.