Lt. Col. Oliver L. North set aside $2.5 million from the profits of the sale of U.S. arms to Iran in 1986 to finance planned secret joint operations with Israel aimed at gaining the release of American hostages, according to congressional testimony released yesterday.

The projects, which other sources said included possibly kidnaping Lebanese or Iranian citizens, were initially worked out with Israeli counterterrorism expert Amiram Nir in December 1985 and January 1986, North told members of the House and Senate Iran-contra investigating committees in a closed session after his public testimony last July 9.

"None of these operations ever went to fruition," North said, but he added that they were described in documents he sent to then-national security adviser John M. Poindexter for presentation to President Reagan.

The heavily censored transcript left no description of the projects. At one point during the closed hearing, Rep. Dick Cheney (R-Wyo.) said he thought there were "too many people in the room" and asked his colleagues "respectfully that we be cautious in terms of how we proceed."

North said that he believed "two or three of them were approved for pursuing . . . " but the rest of that paragraph was deleted from the released transcript. Asked specifically by Cheney if any activities took place beyond planning, North responded, "There may have been some, let us call it seed money, that would allow for meetings to take place in Europe, or something like that, to see if things could get going. I know we didn't spend the major expenditures that were anticipated."

North said he did not know if the projects were discussed with the president. He did talk to then-CIA Director William J. Casey about the program, North said, and "he was enthusiatic about it."

At the same time that North and Nir were discussing the projects, Reagan approved a more activist U.S. approach to fighting terrorism, sources have previously reported. A January 1986 finding signed by the president allowed the Central Intelligence Agency to abduct suspected terrorists from foreign countries and bring them to the United States for trial, but did not authorize assassinations.

The Federal Bureau of Investigation and the CIA both reportedly had reservations about the policy because of the possibility of failure and embarrassment in the charged conditions prevailing in the Middle East, especially in Lebanon and Iran.

The finding was reviewed by Congress, and one source said the intelligence committees did not object.

The North transcript was part of a package of previously classified depositions given to the committees during their investigation. In addition to that of North, closed-door testimony of Attorney General Edwin Meese III, former defense secretary Caspar W. Weinberger, and former White House chief of staff Donald T. Regan also was made public.

None of their testimony contained major disclosures beyond what they have said publicly. About 50 more depositions taken in closed sessions are still to be released.

In one exchange, North offered an explanation of a question that committee members had about Iranian middleman Manucher Ghorbanifar's repeated use of Vice President Bush's name in monitored telephone conversations discussing the arms sales.

Ghorbanifar, North said, was "double-dealing everybody," and was name-dropping.

North said the Iranian would go back to Iran and say, " 'Just met with Batri,' and Batri was their code name for the vice president. If you would like a little joke on that, the Bush, Bosch battery is what is big in Iran. German battery company. Bosch, Bush, Batri was the code name by the Iranians for the vice president."

"To my knowledge," North added, "{Ghorbanifar} never even saw the vice president, much less met with him."

During the session, North was asked about allegations that CIA official Dewey Clarridge had gone to South Africa to solicit support for the contra rebels fighting the government of Nicaragua. The former National Security Council aide testified that he knew "absolutely nothing" about that situation.

Much of the questioning of Meese focused on the events of November 1986, when Reagan directed him to investigate discrepancies in the accounts of senior officials about the U.S. government's role in a 1985 shipment of Hawk antiaircraft missiles and spare parts.

Meese first testified he believed he initially learned about the 1985 Hawk shipments during a briefing by Poindexter at a Nov. 10 White House meeting attended by the president. However, on reviewing his notes, Meese said that the Hawk shipment did not come up.

Meese told of a meeting with Poindexter on Nov. 5 or 6, 1986, just after reports about U.S.-Iran arms sales began appearing in the press.

"Do you recall what that meeting was about?" assistant House committee counsel Pam Naughton asked.

"No, I don't," Meese replied.

At another point in the interrogation, Meese said he never asked the president what he knew about the Hawk shipments.