Iraqi military authorities directed U.S. and British diplomats in Kuwait yesterday to order the 2,500 Americans and 4,000 Britons who are stranded there to assemble in two separate hotels, a request that both countries protested and described as ominous.

State Department officials said that despite grave misgiving, the U.S. Embassy in Kuwait City had relayed the order to members of the American community, leaving it to individuals to decide whether to comply.

The British Foreign Office issued a much stronger denunciation of the Iraqi demand, branding the action as "a grave and sinister development" in the Mideast crisis and a possible prelude to internment. Nonetheless, it urged British nationals to comply, saying individuals who did not make the move were threatened with "unspecified difficulties."

A few Americans went to their designated hotel last night, but most remained in their homes, a U.S. official said. "There is no interest in the American community" in making the move, said the official. State Department spokesman Richard A. Boucher said that when U.S. officials contacted the hotel, they were told it had not been alerted by the Iraqis to expect the Americans.

A Foreign Office spokesman said in London that a number of British citizens went to their assigned hotel, and returned home after hotel workers also told them they knew nothing of the Iraqi demand, Washington Post correspondent Glenn Frankel reported from London. "So we're puzzled," the British official said. "Your guess is as good as mine" as to what happens next, he said.

Speaking to reporters in Kennebunkport, Maine, President Bush offered a low-key response, calling the situation in Kuwait "a little vague right now. But anything that compels individuals to do something against their will would, of course, concern me."

Asked if the situation was becoming more dangerous, the president repeated his concern that his words might heighten the crisis. "I don't want to overstate it," he said.

A senior administration official said the U.S. response was deliberately subdued compared to the British one. "Our reaction is premised on, we don't want to scare people," the official said. "We want to take care of our people."

Earlier, Boucher had said the Iraqi assembly request was "totally uncalled for" and added: "Clearly, the situation is of concern to us." He declined several opportunities to be more critical.

American diplomats formally protested the demand with the Iraqi Foreign Ministry in Baghdad yesterday, but did not get a response, a State Department official said.

The State Department has refused to release names of any Americans in Iraq or Kuwait. The 2,500 Americans remaining in Kuwait are believed to be a mix of oil workers, business executives, consultants and their dependents.

In addition, about 500 Americans are believed to be in Iraq, including 35 Americans taken from Kuwait during the fighting and confined to the Hotel Al-Rashid in Baghdad. U.S. diplomats had been making daily visits to the hotel, but yesterday State Department officials were denied permission to see the Americans. Iraqi officials gave no explanation for the action and a department spokesman said last night that American officials will file a protest over the denial.

A desert convoy of British and Soviet citizens was allowed to leave Kuwait for Baghdad yesterday accompanied by an Iraqi military escort. The group reportedly included 112 British nonessential embassy staffers and dependents and an unspecified number of the estimated 880 Soviets in Kuwait.

The Foreign Office said the British community in Kuwait had been offered the opportunity of going to Baghdad, but most had decided to stay.

In Amman, Jordan, Italian Foreign Minister Gianni de Michelis said the European Community has asked Jordan to intercede with Iraq to free thousands of Westerners trapped in Baghdad. De Michelis said he told Crown Prince Hassan that Iraq is aggravating matters by keeping thousands of foreign civilians in Baghdad in violation of international law.

About 8,000 refugees streamed across the Iraqi border into Jordan yesterday, among them 4,000 Egyptian contract workers, many of whom said they were fleeing in fear that war could erupt imminently.

Among those leaving were three Americans, three Britons and a French woman -- the first Westerners allowed to leave Iraq into Jordan at the Ruweished border post since Saturday.

A U.S. Embassy spokesman in Amman identified one of the Americans as Bassem Hajbeh and said the other two, a man and a woman, did not want to be named, Reuter reported.

The travelers said 4,000 more people were waiting on the Iraqi side to cross the border, and that many refugees from Kuwait were stranded in Baghdad because they could not buy enough gasoline to make the drive out.

Refugees interviewed by Reuter at the border painted a grim picture of Kuwait two weeks after its capture by Iraq.

"Look at us and you will know what is happening in Kuwait," said Mohammed Ali Saeed, pointing at thousands of haggard Egyptians packed on trucks or sleeping on the ground.

"There's no Kuwait anymore, it's going backwards maybe 100 years," George Abu Khalil, 30, a Lebanese merchant, said. "I'm going back to beautiful Beirut. In Kuwait everything is dark, it's chaotic."

American and British officials said Iraqi military leaders in Kuwait had attempted to justify the roundup there on the grounds that the American and British citizens faced "unspecified threats." Boucher said the department continued to believe that the Americans were safer in their homes there.

"If Americans wish to move to a hotel, that's fine," he said. The department said later that it knew of "no specific, credible threats against the American public" in Kuwait.

While Boucher declined to speculate on what the Iraqis would do with the Americans, the British were precise. "What we fear is that they will be interned somewhere -- most likely in Iraq," deputy foreign minister William Waldegrave told a London news conference. "I would like to express the anger of the British people if any such step is taken.

"I hope that these reports and the storm of protest which will break round the head of Iraq if she pursues any policy of interning people will make her draw back, even at this late stage, if that is what she contemplates."

Waldegrave said the British Embassy in Kuwait had been informed of the order earlier yesterday by Iraqi officials who claimed the gathering was for the "safety" of British citizens. He said the officials made clear that "there will be trouble for people if they do not assemble there."

American officials initially did not acknowledge that there was a threat linked to the Iraqi request that Americans go to the International Hotel, located across the street from the American Embassy in Kuwait City. A senior officials said later that the Iraqis had "implied" that their troops "would go out and find" Americans who did not voluntarily go to the hotel.

U.S. Ambassador Nathaniel W. Howell was summoned by an Iraqi general who directed that Howell order the Americans assemble at the hotel within two hours, Boucher said. Howell replied that "this order was not only a practical impossiblity . . . but that he had no power to order them to move," the spokesman said.

Officials in London viewed the orders as a further escalation of the war of nerves with the West by Iraqi President Saddam Hussein. They said they fear he plans to use Westerners trapped inside Kuwait as hostages to ward off the threat of an American-British military attack.

The American strategy, according to an administration official, is to "leave the ball in the Iraqi court -- do nothing and see what happens."

Britain issued strong diplomatic protests against the demand in a variety of world forums, and the foreign office called in Iraq's ambassador to London, Azmi Saliqi, to reiterate its anger.

Earlier yesterday, before the order was announced, Saliqi told the British Broadcasting Corporation (BBC) that Britain should not be concerned about the safety of its citizens in Iraq and Kuwait and denied they were being held hostage. He called them "the guests of the Iraqi people."

"It is difficult and unsafe for the foreigners to leave Iraq or Kuwait," said Saliqi. "We want them to be safe and when the situation is settled, we will let them go safely."

Waldegrave appeared shaken by the news of the Iraqi order, which arrived in Whitehall minutes before he was to hold the news conference. He quickly called Saliqi's remarks "a further example of the duplicity of the Iraqi regime."

Britain, which has more citizens inside Kuwait and Iraq than any other Western nation, was the first country to join the United States in sending military forces to the Gulf. It has committed to the Gulf two Royal Air Force squadrons, three warships, three minesweepers and a detachment of surface-to-air antiaircraft missiles-a total of more than 1,000 men.

Michael Weston, the British ambassador to Kuwait, issued a special message to British citizens broadcast by the BBC's World Service, informing them that Iraq had insisted they assemble at the Regency Palace Hotel before the end of the day.

Some friends and employers of the Americans still in Kuwait were pessimistic yesterday. "I just don't see any way out," said the Rev. Edwin Davis, a Louisiana minister whose daughter, two grandchildren and Kuwaiti-born husband were visiting the country when it was invaded. "I just think they're wanted for a shield," he said of the roundup order. "Technically, we don't call them hostages, but that's what they are."

Michael Coleman, a senior vice president of De Leuw, Cather and Co., a Washington-based transportation consulting firm, did have some good news. The company had listed 44 workers and dependants among those detained in Kuwait, but Coleman said yesterday that the firm had discovered some of the dependants were vacationing out of Kuwait when the Iraqi troops arrived and that others -- he would not disclose the number -- had managed to escape, leaving 31 workers and dependants there.

Staff writers William Claiborne in Cairo, David Hoffman in Washington and Michael J. Ybarra in Killeen, Tex., contributed to this report.