President Bush has decided to forgive Egypt's $7.1 billion military debt to the United States in recognition of Cairo's critical role in supporting the United Nations embargo against Iraq and the massive U.S. military deployment to the Arabian peninsula, administration officials said yesterday.

At the same time, the administration is sending a special envoy, probably deputy national security adviser Robert M. Gates, to tell Jordan's King Hussein that he cannot expect urgent economic assistance from the international community without publicly stating his support for the embargo against Iraq and demonstrating that support by cutting off the remaining traffic to Iraq through Jordan, including food shipments from Jordanian farmers.

These two decisions follow Bush's announcement Thursday that he is launching an international economic plan to pool billions of dollars in donor funds from wealthy nations to help those nations facing severe economic hardship by complying with the embargo.

Jordanian officials expected Hussein to strongly resist a U.S. demand to cut food shipments to Iraq. The king and his advisers in Amman are said to believe that blockading food shipments to Baghdad may be regarded by Iraqi President Saddam Hussein as an act of war.

Another Jordanian concern is the severe domestic impact of a hard break with Saddam. Jordan's farmers have an estimated $200 million in contractual commitments to deliver produce to Iraq in the next few weeks, knowledgeable sources said. "They are fearing rot and riot from the farmers if this crop is not delivered," one Jordan expert said.

Some of Jordan's supporters in Washington are suggesting the European Community buy Jordan's crop to forestall a crisis.

The Egyptian debt decision, which requires congressional approval, follows a debate that began during the Reagan administration over whether to forgive some or all of the military debt to key regional allies such as Israel, Egypt, Pakistan and Turkey.

Both the State and Defense departments recommended that Egypt's debt be forgiven, according to U.S. and Arab officials. Bush approved it after a National Security Council meeting Wednesday.

"There were concerns about how this would impact on a number of other countries and that forgiveness could be contagious," one official said. Bush's decision was described as narrowly focused on Egypt.

Egypt's ambassador to Washington, Abdel Raouf Reedy, met yesterday with Robert M. Kimmitt, undersecretary of state for political affairs. Sources said that Kimmitt did not convey Bush's decision but indicated to Reedy that Egypt was about to get good news.

Since Iraq's Aug. 2 invasion of Kuwait, Egypt has extended to the United States overflight rights, staging and transit rights from Egyptian air bases and has smoothed the passage of dozens of U.S. warships through the Suez Canal. Egypt refused, however, to base U.S. B-52 bombers, which might be used in strikes against Iraq, officials said.

"They are not going to be puppets, they are going to be partners and there are limits to what we can ask them to do," said one former U.S. official with experience in Cairo.

Politically, Egyptian President Hosni Mubarak led the Arab moderates through a stormy Arab League summit meeting, which overcame Iraqi objections and Jordanian equivocation to reach a resolution condemning Iraq's invasion and calling for a joint Arab military force to defend Saudi Arabia.

"We need to demonstrate to the key Arab party that has stood with us in this crisis that there are benefits to them for staying with us because we are going to be in this for a while," said William B. Quandt, a Middle East scholar who worked on U.S.-Egyptian relations in the Carter administration.

He said Egypt's role also would be crucial in the "post-crisis diplomacy" that seeks to put the Middle East back together after the deep split induced by Iraqi influence over its neighbors and Iraqi intimidation.

Officials from the Treasury Department and Office of Management and Budget expressed concerns about the budget impact of the Egyptian debt decision and the longstanding congressional demand that Egypt undertake tough economic reforms. But Bush, in making the decision, was said to have focused on Egypt's pivotal role in moderate Arab diplomacy throughout the crisis, which justified a "very special" exception to the administration's unwillingness to forgive such debts.

Also yesterday, administration officials said Bush has told his senior advisers that he intends to break the impasse over the deployment of 30,000 additional Egyptian troops to stand with U.S. and other Arab and multinational forces defending Saudi Arabia. White House and Pentagon officials said Egypt has mobilized the two divisions and is ready to send them as soon as "third country" transport can be arranged. The impasse arose when Mubarak and Saudi Arabia's King Fahd could not agree on whether the Saudis had accepted Egypt's offer of two mechanized and armored divisions.

The deployment of a large force of Egyptian troops would help blunt criticism from Congress that the U.S. military is carrying the greatest burden in defending Saudi Arabia. As many as 150,000 U.S. troops will be in the Persian Gulf region by the end of September, while the largest Arab contingent to reach the kingdom so far has been about 5,000 troops.

Morocco, Syria, Pakistan and Bangladesh have committed what some members of Congress have called "token" forces.

Egyptian officials were somewhat embarrassed by criticism from Senate Armed Services Committee Chairman Sam Nunn (D-Ga.) that they needed to send more troops to Saudi Arabia when Mubarak had been offering to do so for weeks, according to Arab diplomats.

"The Egyptians are going in big," one knowledgeable source said. "They are going in with two divisions and everybody has been told, and the Saudis are about to be told," a Pentagon official added.

Bush yesterday spent a relatively quiet day monitoring developments at his summer home in Kennebunkport, Maine, as he began the long Labor Day weekend with a picnic for the visiting press corps.

Bush continued his telephone diplomacy, with calls to British Prime Minister Margaret Thatcher, French President Francois Mitterrand and Saudi Arabia's Fahd to discuss his economic plan.

Secretary of State James A. Baker III and Treasury Secretary Nicholas F. Brady prepared to leave next week for Europe, the Middle East and Asia to round up financial aid to offset U.S. military costs and help nations affected by the crisis. Staff writer Dan Balz contributed to this report from Kennebunkport.