U.S. intelligence yesterday monitored a new buildup of 100,000 Iraqi troops in Kuwait south of the capital and near the border with Saudi Arabia, prompting President Bush to warn that the "integrity of Saudi Arabia" is one of America's "vital interests."

Iraq announced that it would begin withdrawing its troops from Kuwait on Sunday. But Bush and his senior advisers expressed skepticism that Iraqi President Saddam Hussein would depart after overrunning his smaller neighbor Thursday morning or that he would remove the puppet government he has installed there.

As he left the White House for Camp David, Bush testily responded to a question about Iraq's offer to withdraw by saying, "Let's see him {Saddam} haul them out right now then."

Bush reviewed military options as major U.S. naval forces steamed toward the Persian Gulf region. The president called the occupation of Kuwait "unacceptable," and warned that "further expansion would be even more unacceptable."

U.S. officials said an Iraqi attack on Saudi Arabia would almost certainly trigger a U.S. military response. Iraq denied that its troops were near the border with Saudi Arabia.

Also yesterday, Jordan's King Hussein arranged for a weekend meeting between Saddam and Kuwait's overthrown ruler, Sheik Jabir Ahmed Sabah, who fled his country for an undisclosed sanctuary in northeastern Saudi Arabia. A U.S. administration official said the Jordanian monarch appeared to have won Saddam's agreement to travel to Saudi Arabia as early as Saturday for a mediation session also to be attended by Saudi Arabia's King Fahd and Egyptian President Hosni Mubarak.

Both Saudi Arabia and Egypt yesterday joined an Arab League denunciation of the invasion, the first collective Arab challenge to Saddam's military aggression, although Jordan, whose monarch has become Iraq's closest ally in the region, abstained from the resolution. It was echoed by a condemnation by the Gulf Cooperation Council, the six-nation military and economic alliance whose membership includes both Kuwait and Saudi Arabia.

Bush said he had a long telephone conversation with Fahd yesterday and he praised what he termed "the active diplomacy going on in Saudi Arabia." The Saudi ambassador to Washington, Prince Bandar bin Sultan, also met at the White House with national security adviser Brent Scowcroft.

Superpower diplomacy to contain the crisis also increased, as Secretary of State James A. Baker III and Soviet Foreign Minister Eduard A. Shevardnadze issued a joint statement in Moscow condemning Iraq and endorsing an arms embargo and economic sanctions against Baghdad.

"Today we take the unusual step of jointly calling upon the rest of the international community to join with us in an international cutoff of all arms supplies to Iraq," the statement said.

The scene in Kuwait remained chaotic, with unconfirmed reports of looting by Iraqi soliders in gold markets, shops and the villas of Kuwait's oil-rich elite.

The United States, meanwhile, continued to move major naval forces closer to the Persian Gulf. Pentagon officials said the aircraft carrier battle group led by the carrier USS Independence would be in the northern Arabian Sea by the weekend. The Navy also gave sailing order to the cruise missile-equipped battleship, USS Wisconsin.

Gen. Colin L. Powell, chairman of the Joint Chiefs of Staff, charted military options with Bush during a morning meeting that emphasized air strikes on targets in Iraq and on Iraqi military units maneuvering outside the Kuwaiti capital.

A military official said an Iraqi move against Saudi Arabia would almost certainly trigger a U.S. response. While the deployment of U.S. ground forces had been ruled out for now, the official said, "We could turn Baghdad into rubble, there is no doubt about that."

U.S. officials also were consulting with allied governments to press a campaign of economic sanctions against Iraq. Japan imposed an unofficial freeze on Kuwait's assets to prevent their use by the invading Iraqis. Saying that it could not legally freeze Iraq's assets, Tokyo announced that it would impose sanctions on Baghdad. The Japanese action followed similar moves by the United States and other Western nations.

In addition yesterday, Bush said he conferred by telephone with Turkish President Turgut Ozal, whose country provides right-of-way for one of Iraq's main export oil pipelines. Asked whether Turkey would cooperate by closing off the Iraqi pipelines, Bush said, "I'm not going to go into details, but clearly a good deal of that oil goes through Turkey and that will be an option."

An administration official noted that Turkey gets 50 percent of its own oil supplies from Iraq and, therefore, cutting Iraq's export line would represent a major confrontational step for Ozal. The same calculation holds for Saudi Arabia, which last year opened a major oil terminal on the Red Sea to export Iraqi oil that crosses Saudi territory in two major pipelines.

Fourteen American oil workers were unaccounted for after the invasion, but were believed to be in Iraqi hands. A White House official said the U.S. government had no information that American lives were in jeopardy, but evacuation plans were being readied at the State Department for any exodus prompted by further violence. Roughly 3,000 Americans reside in Kuwait.

The original 100,000-man Iraqi invasion force was augmented yesterday by fresh troops moving down from Iraq and freeing the invasion force from garrison duty in the capital.

State Department spokesman Richard Boucher said some Iraqi forces were within five to 10 miles of the Saudi border. A U.S. military official said, however, that the main force of Iraqi troops had taken up position southwest of Kuwait city "reoriented in a south and southwesterly direction, fully reinforced and prepared to go." The distance from the southern outskirts of Kuwait city to the border is about 40 miles.

One U.S. administration official said, however, that there were signs indicating that Iraq was not preparing to attack Saudi Arabia: Iraqi propaganda organs have avoided any verbal attacks on the kingdom and had stated no border or oil pricing grievances against the Saudis as they had against Kuwait in the weeks preceding the invasion.

Driven by concern about the reliability of oil shipments from the Persian Gulf, oil prices rose again yesterday, but the increase was not as dramatic as Thursday's rise. North Sea Brent crude oil, one of the most widely traded on the international market, rose $2 a barrel Thursday and Friday closed 86 cents higher at $23.25. Just last month, prices were at the $16 level.

Iraq's offers to withdraw its troops were carried on Baghdad Radio during the day. A government spokesman said all Iraqi military forces in Kuwait would be withdrawn according to a timetable, beginning Sunday. The actual timetable was not specified, however. The government spokesman said Iraqi troops might stay longer if "something cropped up that threatens Kuwait and Iraq."

The broadcast also was carried by the "Provisional Government of Kuwait Radio," which said the Kuwaiti royal family would not be allowed to return to power after the Iraqi troops left the country. "The bygone regime is finished forever and will never come back," the broadcast said.

Iraq had said Thursday that it had invaded at the invitation of "young Kuwaiti revolutionaries" who had staged a coup against the emir's government. The claim was dismissed by other nations, and as of yesterday, no member of the new Kuwaiti provisional government had yet been named publicly.

An Iraqi diplomat in the Jordanian capital, Amman, indicated that an Iraqi-backed government of "young revolutionaries" would retain power after troop withdrawal. "We believe that the national government of Kuwait can take over all the responsibilities now and they are capable of defending their national security."

Late yesterday, Iraq began jamming the Arabic-language service of the Voice of America in the Persian Gulf area, according to Richard W. Carlson, the agency's director. He said he was certain it was Iraqi jamming because it has distinctive characteristics that had been noted in earlier Iraqi jamming of Iranian and Kuwaiti broadcasts.

In Washington, Bush administration officials were scheduled to continue meeting this weekend in their efforts to develop a coordinated strategy for pressing long-term sanctions against Iraq to moderate its behavior.

A former Kuwaiti cabinet minister reached in London said in a telephone interview that an economic blockade of Kuwait enforced by the United States, Japan and Europe would quickly persuade Saddam that he could not afford to hold onto Kuwait.

Most of Kuwait's investments lie outside the country in a string of holdings in oil, manufacturing and real estate throughout Europe and the United States. Even Kuwait's gold reserves, this official said, were held offshore at the Federal Reserve Bank in New York and the Bank of England.