President Bush joined other world leaders in condemning Iraq's invasion of Kuwait as an act of "naked aggression" yesterday as the United States imposed a near-total economic embargo on Iraq and launched a massive diplomatic effort to force withdrawal of Iraqi troops from Kuwait.

The Kuwaiti ambassador here, Saud Nasir Sabah, applauded the move by the United States and its allies to freeze tens of billions of dollars of Kuwaiti assets to keep them out of Iraqi hands, but he strongly appealed for U.S. military intervention "in order to survive."

Bush left open the possibility of a military response, pledging to "take whatever steps are necessary to defend our long-standing vital interests" in the Persian Gulf. But key Bush advisers played down that possibility and military experts said it would be difficult, if not impossible, to do more than put on a limited display of military muscle in the gulf without a major mobilization of forces.

Instead, one senior official said, the United States and its allies would attempt "to put the economic screws" to Iraq. The swiftest element of that response was the joint U.S., French, British and Swiss move to freeze Kuwaiti investments and properties to prevent Iraqi President Saddam Hussein from using the spoils of his invasion to relieve his country's economic woes.

Economic experts predicted some adverse economic fallout from the turmoil in the gulf, including a likely increase in energy costs in the United States, but said that gasoline shortages and steep price increases were unlikely. However, a number of economists warned that a sustained rise in oil prices would worsen inflation and threaten to push the nation's already sluggish economy into a recession.

Outside the Arab world, reaction to the overnight invasion, the swiftness of which surprised the Bush administration, was immediate and searing. The U.N. Security Council, convening at the request of Kuwait and the United States, condemned the invasion and called on Iraq to withdraw.

The NATO allies, convening in emergency session in Brussels, joined the call for unconditional Iraqi withdrawal and considered a U.S. request to join in banning all trade with Iraq, including oil, and freezing that nation's assets.

In a demonstration of the new U.S.-Soviet relationship, the Soviet Union, which is Iraq's largest arms supplier, announced it was suspending military sales to that client. Secretary of State James A. Baker III and Soviet Foreign Minister Eduard Shevardnadze plan a joint statement today in Moscow condemning the invasion.

While Bush traveled halfway across the country for a speech in Colorado, his top national security aides held a series of White House crisis-management sessions to discuss further U.S. moves. Contingency planning for evacuation of the more than 3,000 Americans in Kuwait was worked on, but officials said such action was not seen as immediately necessary. Administration officials told members of Congress last night that American personnel in the U.S. Embassy in Kuwait were safe.

Meanwhile, throughout the day U.S. officials sought worldwide cooperation in an embargo on Iraq's oil exports and a halt in arms sales to Iraq. While Washington harshly condemned the invasion of Kuwait, its deeper fears centered on the emirate's neighbor, Saudi Arabia. "If they go into Saudi Arabia," said one official, "hold your hat."

The president, after a Wednesday night of consultations and a day of hurried meetings, called reporters to the White House before he left for Colorado to hear his call for "the immediate and unconditional withdrawal of all Iraqi forces" from small, oil-rich Kuwait. Aboard Air Force One, the president called a handful of Middle East leaders, who have been muted in their response to the invasion. They asked him, he said, to forestall U.S. intervention in favor of an "Arab solution."

But, said Bush, he had told the leaders that the problem "had gone beyond simply a regional dispute because of the naked aggression that violates the United Nations charter."

At a news conference with British Prime Minister Margaret Thatcher in Colorado, where the two leaders were to deliver speeches to a conference of the Aspen Institute, Bush said he had discussed a series of options, including military ones, during his morning White House meeting, although outside experts said those options appeared to be quite limited.

"We're not ruling any options in, but we're not ruling any options out," the president said.

That statement reopened the door to some kind of U.S. military action, which the president appeared to close earlier in the day when he said he was "not contemplating" military intervention, despite the Kuwaiti appeal. U.S. officials said no other Arab nation, including Saudi Arabia, had asked for U.S. military intervention.

The president also condemned Saddam, calling "his behavior intolerable" and saying the United States was "very much concerned" for the safety of other small nations in the Persian Gulf.

He also said that if there were threats to American citizens in Kuwait, it would "affect the United States in a very dramatic way because I view a fundamental responsibility of my presidency {as being} to protect American citizens."

Throughout the day on Capitol Hill, lawmakers erupted with condemnations of the Iraqi leader as a "madman" and many compared him to Adolf Hitler or Benito Mussolini. Some Democrats suggested that the Bush administration should have imposed economic sanctions against Iraq earlier for its acts of terrorism and belligerence in the Middle East.

During his news conference in Aspen, Bush said he and Thatcher discussed the invasion during a meeting there yesterday afternoon and agreed to press for what Bush called "collective efforts" by members of the United Nations to bring about a cease-fire and the withdrawal of Iraqi troops from Kuwait.

Said Thatcher, "None of us can do it separately. We need a collective and effective will of the nations of the United Nations."

Calling the invasion a "totally unjustified act," Bush urged other nations to condemn the Iraqi aggression, saying it was crucial now that the "international community act together to ensure that Iraqi forces leave Kuwait immediately."

Bush said he and his advisers were examining the "next steps" needed to end the invasion. The president also cut short his Colorado trip because of the crisis, returning to Washington late last night rather than on Friday night as originally planned.

During his mid-afternoon news conference, Bush said he was "somewhat heartened" by his phone conversations with Egyptian President Hosni Mubarak, King Hussein of Jordan and Gen. Ali Abdallah Salih, the new president of Yemen. The Arab leaders, he said, preferred to try to handle the problem themselves and asked for restraint by the United States while they worked out an "Arab solution" to the crisis.

Later, the White House said Bush also talked with Saudi King Fahd and described Fahd as agreeing the invasion was "absolutely unacceptable." The two leaders, the White House said, discussed "options for dealing" with the situation.

The U.S. economic moves against Iraq came in the form of two executive orders designed to put economic pressure on Iraq's already weak economy. The first order froze all Iraqi assets in the United States and shut off virtually all trade and economic activity between the two countries, includ- ing oil imports from Iraq. The

second order froze all Kuwaiti assets.

The order against Iraq prohibits the import into the United States of "any goods or services of Iraqi origin, other than publications and other informational materials" and the "export to Iraq of any goods, technology or services from the United States" with the exception of medical or humanitarian supplies to relieve human suffering.

The trade embargo will shut off Iraqi oil exports to the United States. Iraq is the sixth largest oil exporter to the United States, supplying this country with about 621,000 barrels of oil per day, according to the American Petroleum Institute. That accounts for about 7.3 percent of total U.S. imports or about 3.6 percent of total U.S oil consumption.

Lawmakers were quick yesterday to support the embargo and to issue dire warnings of the ultimate effects of Saddam's conquest. And with dispatch reserved for moments of crisis, the House voted 416 to 0 to approve legislation imposing comprehensive sanctions on Iraq.

The House Foreign Affairs Committee, which passed the embargo measure Wednesday, hastily reassembled yesterday to amend the bill to encompass Bush's executive order. The legislation, originally sponsored by Rep. Howard L. Berman (D-Calif.), would impose a total trade ban with Iraq, cut off Iraq's annual $200 million Export-Import Bank credits and tighten restrictions on U.S. exports that could have military uses.

"The administration, finally, this morning, as a result of the invasion, has a good policy," Berman said.

The Senate last night voted 97 to 0 to approve a separate measure urging Bush to seek international sanctions against Iraq. If that fails to induce an Iraqi withdrawal, the resolution says, Bush should take "multilateral" military action "as may be needed to maintain or restore international peace and security in the region."

Lawmakers warned that the invasion could upset the region's delicate balance. "You're talking about something that could totally unravel the whole Middle East," said Sen. Patrick J. Leahy (D-Vt.).

"We would be very wrong to underestimate the ultimate aims of Saddam Hussein," Sen. David L. Boren (D-Okla.), chairman of the Senate Select Committee on Intelligence, said after being briefed by intelligence officials. "His long-range goal is not just to impact on the price of oil . . . but establish Iraqi hegemony over the entire region."

Particularly worrisome is the proximity of the Saudi oil fields, which provide the United States with about 1.2 million barrels of oil a day. Any attempt to take that area, Boren said, would be "a direct threat to the national security of this country . . . something we could not afford to tolerate."

The military option should be held open, lawmakers said. Boren called for moving U.S. naval and air forces to the region so that Washington could be prepared for any contingency.

"Together with our friends in the region, we should consider defensive military measures," said Sen. Lloyd Bentsen (D-Tex.). Sen. Christopher J. Dodd (D-Conn.) said that military action might eventually be necessary: "You're dealing with a madman here . . . I'm not sure he's going to respond to sanctions."

Sen. Alfonse M. D'Amato (R-N.Y.) assailed the State Department for "acting like wimps . . . {and} mollycoddling" Saddam.

Staff writer John E. Yang contributed to this report. Balz reported from Colorado.