Iraq has told the U.S. Embassy in Baghdad that American women and children held in Kuwait will be allowed to leave, but Iraqi officials continue to erect new red-tape obstacles to their departure, the State Department said yesterday.

"The Iraqis insist on stringing this out and putting all of these innocent people through this cruel ordeal," department spokesman Margaret Tutwiler said of Iraq's continued failure to make good on President Saddam Hussein's promise to release women and children of various nationalities being held to deter a feared U.S. attack.

"Every time we think that we have figured their demands out, they change them," Tutwiler added.

Asked if the Iraqis are using bureaucratic delays to keep the foreigners as hostages despite Saddam's promise, she replied:

"Governments have within their purview and their power the waiving of red tape. Red tape is not being waived in Iraq; it is being created, and it is being created daily. . . . I'm not going to speculate on what {Saddam's} motives may be, but I am positive that governments can waive simple things such as paperwork over an exit visa."

She said Secretary of State James A. Baker III spoke yesterday with Joseph C. Wilson IV, acting head of the U.S. Embassy in Iraq, and with W. Nathaniel Howell, U.S. ambassador in Kuwait, about the plight of the estimated 3,000 U.S. citizens trapped in the two countries since Iraq invaded Kuwait Aug. 2.

Tutwiler said Baker also discussed with Howell the morale of U.S. diplomats dug in at the embassy in Kuwait City, resisting Iraqi attempts to close the mission on the grounds that Kuwait now is a province of Iraq. She said Howell told Baker:

"We're hanging in here, sir. We're keeping our flags flapping in their face as our way of fighting back."

On Tuesday, after Saddam appeared on Iraqi television with some Europeans and Americans who have been unable to leave Iraq, Iraqi officials said he would grant a request made by one of the hostages that women and children be given their freedom.

Despite reports from Europe and the Middle East that some people might leave Baghdad as early as today, Tutwiler said the situation was so confused that the U.S. government is unwilling to predict what might happen. While U.S. officials were told that the ostensible permission for women and children to leave applies to those in Kuwait as well as Iraq, she noted that people in both countries so far have not been able to navigate the bureaucratic pitfalls involved in obtaining exit permits.

"We're going to refrain from going on the record and saying that, one, Americans are going to be able to leave {Saturday}; two, the number that might be able to leave," she said. "We are not confident that {the departure} indeed will go forward, and we do not want to be in the position of raising family members' and friends' and loved ones' expectations, only to have them dashed again.

"They have now established different categories of people wanting to depart, with different requirements for each one," she said, adding that the State Department decided not to release details "because the information we have is so convoluted and confusing it would be unfair to put the information out at this time."

She said the Iraqis have not responded to a U.S. request for permission to send a chartered airliner to Baghdad to pick up Americans, and she gave several other examples of how she said the Iraqi bureaucracy is confusing the issue with red tape and contradictory actions.

On Thursday, Wilson was told he would be permitted to meet Americans at Baghdad's Mansour-Melia Hotel, but was turned away on his arrival, according to Tutwiler. Later, an embassy consular official did get to see 14 women and children who had been brought to the hotel from different points in Iraq and Kuwait and reported that they seemed to be well.

"We can only hope that the Iraqis are moving American women and children from sites in Iraq and Kuwait to this hotel for processing and their eventual release," Tutwiler said.

She said Wilson also was told that the embassy should submit the passports of all Arab-born U.S. citizens -- men, women and children -- plus those of all other American women and children so they could be processed for exit permits. However, Tutwiler said, when an embassy official took the passports to the specified Iraqi government office, he was told there had been a change and was sent away.

Late yesterday, the department called in Iraqi Ambassador Mohamed Mashat for clarification of when the women and children would be permitted to leave. But, U.S. officials said he reiterated that time was required to complete the processing and that all foreign nationals were being well treated.