KUWAIT CITY, AUG. 25 -- The following is an eyewitness account of events in Kuwait.

Electrical power to the U.S. Embassy here was cut today, a day after Iraqi authorities ordered the embassy to close, and two more Americans were picked up by Iraqi troops, according to an embassy spokeswoman.

The spokeswoman said she did not know where the two Americans were arrested, but said they are being detained at a local hotel and are not hurt.

U.S. Ambassador W. Nathaniel Howell and seven other diplomats remained inside their embassy here, uncertain of what to expect next.

One of the diplomats inside the U.S. compound, which has had Iraqi troops posted at its entrance since just before noon on Friday, said this morning that the Americans there passed a quiet night. "We're here for the duration," she said, while "the food and water holds out."

The Iraqi troops were not permitting anyone to enter or leave the embassy, she said, but otherwise they were not bothering the staff inside. Water supplies and telephones continued to function normally as of midafternoon today.

The mood among Kuwaitis, meanwhile, has clearly shifted in recent days. Initially optimistic that the strong international reaction to Iraq's Aug. 2 occupation and subsequent annexation of their country would swiftly reverse the Iraqi aggression, they are now depressed and fearful that Iraq's presence here may stretch out for months while Washington waits for economic sanctions to squeeze Baghdad.

In such a case, Kuwaitis say, Iraq will have more time to plunder their country's physical wealth, find collaborators to help run government services and create "facts on the ground" that will make it harder to dislodge Iraq from Kuwait.

Some Kuwaitis also fear that an Iraqi withdrawal under duress would mean a "scorched earth" retreat that would devastate their country and its infrastructure, which so far remains largely intact.

Diplomats from several other nations said today that Iraqi troops had taken up positions outside their embassies on Friday, but not in huge numbers. Many of the 20 or so embassies here that have made commitments to stay open in defiance of Iraq's demands that they close have stocked up on water and food for their skeleton staffs.

None of those contacted had any indication of what steps the Iraqi authorities would take next to enforce the closure of the embassies, they said. "Keep us in your prayers," pleaded one diplomat.

The estimated 2,500 Americans still in Kuwait generally remain in hiding at home, waiting on knife's edge to see what will happen to the U.S. Embassy, which has been their only link to home for the past three weeks. The forced removal of Howell from the premises would be a major blow to their morale.

One diplomatic source said that as late as Thursday, thousands of frightened, penniless Filipinos seeking to leave the country were still camped in and around their embassy here, creating a potentially dangerous situation if Iraqi troops decide to use force to close that embassy.

More than a week ago, Philippine diplomats estimated 4,000 of their nationals were living at the embassy's two buildings, one of which is still under construction, and in a vacant lot behind the site. But the source who visited there on Thursday said there were "more people than ever" now camped on the premises.

The Iraqis clearly are settling in here. Already, they are putting out a daily newspaper, an-Nidaa, from the offices of the Kuwaiti daily al-Qabas, and have reopened about one-fifth of the 55 branches of the National Bank of Kuwait. They have brought in technicians to run the oil fields, refineries and public works. Baghdad television has announced that teachers in Kuwait should be ready to resume classes next week.

In addition, one Kuwaiti source said a local supermarket cooperative, still manned and run by Kuwaitis, was recently told that Iraqis would soon begin operating its neighborhood food outlets.

"These things really affect Kuwaitis psychologically," said one Kuwaiti. "Morale is getting depressed, with time running."

The Iraqis "believe that Kuwait is part of Iraq and that is their objective," said another Kuwaiti. "They will not negotiate it in spite of the resolutions of the United Nations. They are going to impose it as a fact.

"As a result, I think {Kuwaiti} resistance . . . will fade away if time runs out without any outside intervention," he said. "Not only that, Kuwaitis will lose their faith in the world and begin to think seriously of running their daily lives and maybe will cooperate with the Iraqis.

"People are beginning to get depressed," he added.

"In the beginning days, everyone was looking to the skies, {watching} for an {American} attack," said another Kuwaiti. "But nowadays, they are thinking they are becoming second" in importance in the considerations of Western governments, which to many here seem preoccupied these days with the safety of Westerners held hostage by Iraqi authorities here and in Baghdad.

These Kuwaitis said they believe Iraqi President Saddam Hussein is making an issue of the Westerners in order to divert the world's attention from Kuwait's occupation.

They also said they fear that the longer Iraq is in Kuwait, the more Arab public opinion will turn against the large U.S. military presence in Saudi Arabia. "Time is on Saddam Hussein's side, not on America's," said one Kuwaiti.