House Democrats angrily lectured the State Department's senior Mideast specialist today, charging that the Bush administration's past unwillingness to get tough with Iraq was a "policy premised in fiction and fantasy" that may have emboldened the Iraqis to invade Kuwait.

In the first concerted Hill criticism of the administration's handling of the Persian Gulf crisis, members of the House Foreign Affairs subcommittee on Europe and the Middle East also characterized President Bush's proposal to sell more than $20 billion in advanced weaponry to Saudi Arabia as an attempt to get one of the largest arms transfers in U.S. history past Congress before it has adequate time to consider the plan.

The members said Bush should go ahead with the emergency aspects of the sale but urged that he defer most of it until full-scale congressional consideration.

The barrage of criticism came as John H. Kelly, assistant secretary of state for Mideast affairs, testified before the subcommittee.

It also came on a day when the Pentagon raised its estimate of Iraqi troops considered within striking distance of Saudi Arabia to 365,000 from 265,000, and disclosed a pullback of Iraqi armored forces from the Kuwaiti-Saudi border.

House Democratic leaders also were reported leaning toward a congressional resolution endorsing the administration's gulf crisis action so far but not authorizing in advance the use of U.S. forces in combat. {Details, Page A19.}

At the hearing, Democratic members stressed support for Bush's current effort to force Iraq out of Kuwait. But they recalled in detail how Kelly, in testimony prior to the Aug. 2 invasion, argued the administration's case for opposing sanctions and seeking to get along with Iraqi President Saddam Hussein.

At the time of Kelly's testimony, the CIA had already predicted that Iraq would invade. Senate intelligence committee Chairman David L. Boren (D-Okla.) said after a closed-door hearing last week that intelligence reports giving an invasion "a really high degree of probability" were submitted to policymakers "three to four days" before the Aug. 2 invasion.

The most dramatic moment of yesterday's hearing came when subcommittee Chairman Lee H. Hamilton (D-Ind.), one of the House's most influential and calm voices on foreign policy issues, angrily took exception to Kelly's contention that his testimony on April 26 and July 31 -- two days before the invasion -- did not send an ambiguous message about how the United States might react to military agression against Kuwait.

"You left the impression that it was the policy of the United States not to come to the defense of Kuwait," Hamilton said. "That was the impression this committee member had, that was the impression I think most committee members had as a result of that testimony, and it is not surprising that that is the impression that the press has as well."

Reading Kelly's testimony from the two earlier hearings, Hamilton said:

"You testified against the sanctions . . . I asked you if there was a U.S. commitment to come to Kuwait's defense if it was attacked. Your response over and over again was: we have no defense treaty relationship with any gulf country."

Hamilton acknowledged that Kelly had said the United States "supports the security and independence of friendly states." But, he added, "That sentence does not suggest that the United States is prepared to come to the defense of these countries. That statement does no more than suggest what we apply to all states in the world."

Kelly replied that Bush, in a news conference Monday, admitted that previous U.S. policy toward Iraq "didn't produce results."

"And was wrong?" asked Hamilton.

"It did not succeed," Kelly said.

"That's for sure," Hamilton shot back.

Hamilton's annoyance with what he clearly regarded as a State Department attempt to make excuses for a failure of policy marked the first instance of an influential lawmaker faulting the administration's gulf actions. Most of the criticism yesterday came from committee members who strongly support Israel and who had backed an unsuccessful effort this summer to impose sanctions against Iraq.

Several members, including Reps. Tom Lantos (D-Calif.), Larry Smith (D-Fla.) and Mel Levine (D-Calif.), complained that the administration was trying to sneak the Saudi arms sale past a Congress preoccupied with the budget stalemate and the November elections, and that hopes to adjourn within the next month.

They urged the administration to break the proposed sale into two parts, allowing Congress to act now on items needed for immediate Saudi defense but deferring until later the major portion of the package.

Lantos called the administration's past approach to Iraq "a policy premised on fiction and fantasy." He added, "The obsequious treatment of Saddam by a large number of high-ranking officials encouraged him to {invade Kuwait}, and there's no escaping that responsibility."

Lantos criticized as "a bad mistake" the administration's decision to allow U.S. Ambassador to Iraq April Glaspie to leave Baghdad at the end of July despite evidence of a massive Iraqi troop buildup on the Kuwaiti border. When Henry S. Rowen, assistant secretary of defense for international security affairs, lauded Japan for pledging $4 billion to help pay for gulf operations, Lantos replied:

"The fairy tale continues. The record shows that Japan made a shamelessly minimal contribution initially, and as a result of pressure from Congress and the administration, they upped it."

Pentagon spokesman Pete Williams, in providing the higher Iraqi troop numbers, said the Defense Department had widened the potential theater of operations for Iraqi forces to include regions north and west of Kuwait.

He said the new totals reflect improved Iraqi defenses and include 2,800 tanks, 1,800 other armored vehicles and 1,450 artillery pieces.

Officials said Iraq still has about 160,000 troops inside Kuwait, mostly in defensive alignments.

U.S. forces in the region total more than 150,000.

The Pentagon also said yesterday that a U.S. warship had intercepted a Soviet cargo vessel for the first time in the Red Sea Monday afternoon. A boarding party from the guided-missile cruiser USS Biddle inspected the Pyotr Masherov, found no cargo for Iraq and allowed it to proceed to the Jordanian port of Aqaba, Williams said.

There have been 1,030 interceptions at sea since the start of the blockade last month, Williams said.

In a speech last night to the Foreign Policy Association in New York, Central Intelligence Agency Director William H. Webster said the economic sanctions against Iraq have shut off more than 95 percent of its oil exports while the exodus of thousands of foreign workers "has hampered nearly all its industries."

Sen. Boren, whose panel conducted a closed-door hearing last week on the performance of U.S. intelligence agencies in the crisis, in an interview gave the intelligence community "very high marks in the 30 days preceding the invasion."

In other developments, the United States expressed dismay with Jordan for hosting a meeting of Arab guerrilla leaders who threatened to attack American interests if U.S. forces struck Iraq.

"The overt anti-Americanism displayed by the conference {in Amman}, and by the calls for the overthrow of Egypt's President {Hosni} Mubarak were not surprising, given the guest list of the conference," State Department spokesman Margaret Tutwiler said.

In a hearing yesterday, several members of the House Merchant Marine and Fisheries Committee criticized administration maritime policy, but top officials of the Defense and Transportation departments said the sealift to the Persian Gulf has gone well despite problems.

The administration said, however, that it is clear something must be done to help the dwindling private U.S. shipping industry.

Staff writers George Lardner Jr. and Don Phillips contributed to this report.