President Bush said yesterday that he will not be deterred from taking military action in the confrontation with Iraqi President Saddam Hussein by threats to the American hostages held in Iraq.

Asked at a White House news conference if the lives of the hostages are expendable in a military conflict with Iraq, Bush replied: "I will not change the policy of the United States {to} pay homage or to give credibility to this brutal move of staking out citizens and a brutal move of holding people against their will."

Meanwhile yesterday, freedom remained elusive for thousands of foreign women and children promised safe passage out of Iraq but who remained in the country.

At the news conference, Bush said he supports the Kuwaiti resistance movement and its "patriots" who "feel that their country has been pillaged and aggressed against," but he declined to say whether the United States is lending covert support to them. He also said he would be happy if the Iraqi people overthrew Saddam, but Iraqi dissidents said that there is currently no effective opposition within Iraq. {Details on Page A18.}

Speaking to reporters before flying back to his vacation home in Kennebunkport, Maine, Bush announced that he has approved a U.S. initiative to provide "substantial economic assistance" to countries adversely affected by the international economic embargo against Iraq such as Egypt and Turkey. The effort will be financed by contributions from other governments, and a portion of the money will be used to pay for the costs of the large American military deployment in the region. Bush declined to estimate the total size of the package but said the United States would play a leading role "in helping sort out who should help whom."

He announced that Secretary of State James A. Baker III and Treasury Secretary Nicholas F. Brady were being dispatched to Europe, Asia and the Middle East for talks on the effort. State Department spokesman Margaret Tutwiler said Baker will visit Europe and the Middle East for a "diplomatic mission focusing on sanctions enforcement and support for the multinational force."

Although some U.S. officials have criticized Japan and West Germany for not committing more resources to the international effort to force Iraq to withdraw its troops from Kuwait, Bush said he was satisfied with their offers of help. Both nations are restricted by their post-World War II constitutions from sending military forces abroad. In response to a question, the president said he wanted to avoid the appearance that American soldiers had become mercenaries, carrying out the fight against Iraq on the payroll of other nations.

Bush also made a point in his opening statement of saying "we have no argument with the people of Iraq," just with "the Iraqi regime" that he said "stands in opposition to the entire world and to the interests of the Iraqi people." Asked if the economic embargo against Iraq was hurting the people, Bush said, "There's nothing that's painless . . . when you get into a situation like this, when you have a leader that is -- could brutalize his own people. There's nothing that's painless in all of this."

On his determination not to be swayed by danger to the hostages, Bush's remarks reflected what officials described as the lessons of Mideast hostage crises during the administrations of Presidents Ronald Reagan and Jimmy Carter. They said one central lesson was that a president's decision-making about military action should be kept at a distance from the plight of the captives. Another lesson was that the United States should avoid enhancing the value of hostages as propaganda tools to be manipulated by the captors.

Officials said Bush wanted to signal that the potential for hostage casualties would not stop him from ordering a military response if necessary. Saddam has said American and British captives are being held at key military and industrial sites. Administration officials said that in a meeting this week with congressional leaders Bush was urged to take a tough approach on the hostage safety question, with one lawmaker telling him, "Mr. President, whatever you do, win."

A bipartisan 22-member delegation from the House, led by Majority Leader Richard A. Gephardt (D-Mo.) and Minority Leader Robert H. Michel (R-Ill.), is to leave for Saudi Arabia, Egypt and Bahrain this morning.

In Baghdad, more than 200 foreign women and children gathered at a hotel, hoping to get out as promised by Saddam. But at the State Department, Tutwiler said Iraq had insisted that American women and children meet new bureaucratic requirements before leaving.

Iraq is insisting that each American who wants to depart must submit a letter with a translation into Arabic asking to leave the country and that the letter must carry a stamp from fiscal authorities verifying that all local taxes have been paid, Tutwiler said.

"This emotional roller coaster is inhumane and disgraceful," she said. "We hesitate to dignify these demands as 'exit procedures' because they are constantly changing and extremely confusing." No exit visas have been issued, two days after Saddam's promise to allow women and children to leave, she said.

Last night, the British Foreign Office said Iraq was arranging to evacuate some British women and children from Baghdad aboard Iraqi Airways. The Foreign Office said Iraq was arranging to fly 132 women and children directly to London, but no time or date had been specified, the Associated Press reported. Exit visas for the flight are being arranged but exit visas for any subsequent flights have not been issued, the Foreign Office said.

A spokesman for Virgin Atlantic, a British airline, said Iraqi authorities have approved a flight to Baghdad to evacuate at least 140 women and children, Reuter reported. The airline said it was waiting for British government approval for a flight today from London's Gatwick Airport to Baghdad.

Earlier yesterday, diplomats said Iraq had demanded that foreign planes landing in Baghdad bring food and medicine into the country, but Iraq's ambassador to the United States, Mohamed Mashat, denied that Iraq had made such a demand. "It is absolutely not true," he told reporters as he left the State Department, where he had been summoned again yesterday to hear Deputy Assistant Secretary David Mack demand freedom for all the Americans trapped in Iraq and Kuwait. Tutwiler announced that a group of 36 Iraqi Embassy employees here who were expelled by the United States left the country Wednesday night.

Britain said yesterday that another 32 British citizens had been rounded up in Kuwait, bringing to 197 the total of Britons taken into custody. Tutwiler said 70 Americans have been rounded up in Kuwait and Iraq and taken to undisclosed sites.

The British Broadcasting Corp. reported from Baghdad that a group of captive foreigners was paraded before the international press there yesterday. "It was for some of them a rather depressing experience -- children cried a great deal and some of the women cried," correspondent John Simpson reported. The nationalities of the foreigners were not immediately known.

A 17-year-old British girl and a pregnant Spanish woman flew into Amman, Jordan, from Baghdad yesterday. Several Brazilians were also aboard the flight.

In his news conference yesterday, Bush continued to reject overtures from Saddam, saying "the man keeps reiterating terms that . . . simply fly in the face of the United Nations action" to impose an international embargo on Iraq.

Asked whether his long-term objectives include toppling Saddam, Bush said "we ought to get on with the business at hand, the shorter-run business, which is the . . . solution to this question, or the making right the situation in Kuwait. . . . " He said he would not be disappointed if Iraqis tried to overthrow Saddam, but he had "stopped short" of making that a formal U.S. objective.

However, the president also said he is having discussions about what the United States would like to see after an Iraqi withdrawal from Kuwait, if one came about. He said "the world would demand that there be no -- no chance -- of another invasion right the minute this ended."

Bush argued that Saddam's televised interviews with hostages and the flood of refugees into Jordan reflected badly on the Iraqi leader. Referring to the mass of refugees, he said, "I think that's hurting the Saddam Hussein image because people see the humblest being brutalized the most."

Questioned whether there had been any back-channel contacts with Iraq, Bush said, "None that I know of."

Asked to respond to Saddam's statement in a televised interview that he would be willing to debate British Prime Minister Margaret Thatcher and Bush, the president commented, "I say you can put an empty chair there as far as I'm concerned."

Bush rejected the idea of a new tax to finance Operation Desert Shield, as was suggested by Sen. Patrick J. Leahy (D-Vt.) this week. "I don't feel that the answer is a war tax," he said.