International Steel Group yesterday offered to buy the operating assets and debt of bankrupt Bethlehem Steel Corp. for $1.5 billion, an offer that could create the nation's largest steel company while slashing thousands of jobs.

The offer requires the approval of the U.S. Bankruptcy Court; ISG had 60 days, until the end of yesterday, to be the sole bidder for Bethlehem Steel.

Both companies declined to say what portion of the $1.5 billion was cash, nor would they provide any other details of the offer. ISG would acquire all of Bethlehem's working steel-making and related assets, including major plants near Cleveland, Chicago and Baltimore. ISG would not purchase its defunct coal mines and plants or assume its $3 billion in pension obligations. ISG said it expected negotiations to be completed within the next 10 days, but Bethlehem's chief said it would take several weeks to review the "quite lengthy and complex" proposal.

"This is a very attractive proposition in concept," said Robert S. Miller, chairman and chief executive of Bethlehem Steel, "but we do not have a judgment yet as to whether it's in the best interest of our creditors."

The combined entity would ship 16 million tons of steel a year and displace U.S. Steel Corp., which ships about 14.1 million tons a year, as the nation's largest steelmaker.

New York financier Wilbur L. Ross Jr. created ISG last year by cobbling together steel mills from the carcasses of bankrupt companies, including the lifeless LTV Corp. He hopes to transform Bethlehem Steel from lumbering to sleek and agile, adjectives that haven't accurately described the company, or most of its American peers, for decades.

Bethlehem Steel began producing steel before the Civil War. Bethlehem's steel was used in the first steel railroad tracks, made possible the age of the skyscraper and still supports the Golden Gate Bridge. During World War II, the company, which built the nation's first aircraft carrier, assembled more than 1,200 ships for the Navy and employed more than 300,000 people. At its height in the late 1950s, Bethlehem Steel shipped 23 million tons of steel a year. But by the early 1980s, foreign steel imports had made major inroads in the market, and the industry began pleading for redress under trade laws, shedding jobs and closing mills. Bethlehem Steel finally filed for bankruptcy protection in 2001, after it was unable to compete under the twin pressures of cheap imports and expensive pension obligations.

ISG's $1.5 billion offer for Bethlehem dwarfs the $394 million it paid for LTV because Bethlehem's plants are still active, Miller explained.

Rodney B. Mott, ISG's chief executive, and Miller both predicated the success of the acquisition on obtaining the same labor concessions from Bethlehem's employees that ISG won from workers at LTV's former operations. That labor agreement streamlined production incentives, introduced quarterly profit-sharing, and eliminated defined-pension benefits and instead tied them to the company's performance.

"Upon the purchase of Bethlehem's facilities, we anticipate a quick and orderly transition to the ISG business model and culture, and the application of our new USWA labor agreement," Mott said.

ISG said it believes it has the support of the union to institute a similar accord at Bethlehem and contracts at future acquisitions were among the topics covered in the recent labor talks. United Steelworkers of America spokesman John Duray said the union and ISG had a good working relationship and that the LTV agreement "represented the future" of the integrated steel industry.

Although both Mott and Miller declined to speculate on the extent of job reductions Bethlehem's 12,000 employees will suffer, deep cuts are inevitable. ISG cut staffing levels at LTV's plants by 30 to 40 percent and now produces a ton of steel with half the man-hours that Bethlehem does.

The pink slips will be handed out even more liberally at the company's headquarters in the Martin Tower building in Bethlehem, Pa., before management operations move to Cleveland.

As ugly as that sounds, there are no more attractive options. If Bethlehem isn't acquired, it would almost certainly be liquidated to help pay off more than $11 billion in debts and liabilities, leaving its employees and 67,000 pensioners with nothing.

However, because Bethlehem is a going concern, unlike LTV, negotiating a contract with comparably rigorous conditions may be more difficult, Miller acknowledged.

"It's more accurate to say ISG started at zero and hired up to 60," he said. "They didn't start at 100 and reduce the workforce to 60."