BAGHDAD, IRAQ, SEPT. 29 -- On a narrow, trash-strewn street here, a thin Sri Lankan named Mohammed was selling off his dreams today.

Mohammed stood over two of his blankets and a gas stove, one of several Sri Lankans selling personal belongings for money to buy food for himself and his wife and, eventually, to escape the Persian Gulf crisis and return home. Dozens of Iraqis strolled past the impromptu market, looking for bargains.

"How much do you want for the stove?" asked a man in a white Arab robe and headdress. Mohammed was asking 35 dinars. The man snorted. "Huh. I'll give you 20 dinars for everything." A teenage boy interrupted with an offer of 10 dinars for Mohammed's watch.

Mohammed turned away silently, his mouth tightly set.

Last month, Mohammed finished his fourth year as a driver and office worker in Kuwait City, where he and his wife furnished their lives with the modest luxuries of the Third World's middle class: a stereo tape player, a color television and a used compact car. After a few more years, he said, they would have taken their savings and their household back to Sri Lanka to start a business.

But when Iraq consumed Kuwait on Aug. 2, it wiped out Mohammed's bank account, his job and his dream.

For years, workers from Bangladesh, India, Pakistan, Sri Lanka, the Philippines and Vietnam have formed the core of an Asian labor force that helped Iraq and Kuwait develop their oil-driven economies. But the gulf crisis has turned hundreds of thousands of hopeful workers into desperate refugees, many of them still stranded in Iraq and Kuwait, struggling along a long road back to impoverished Asian hometowns.

For tens of thousands more Asians, trapped in unbreakable job contracts in Iraq, the crisis may now threaten hunger, as the Iraqi government has announced it will stop providing rationed staples to foreign workers as of Monday.

The government said Thursday that, with supplies dwindling, it would cut off food coupons for foreign workers, a move that would require them to buy food on the open market or get it from shipments sent by their governments.

Trade Minister Mohammed Mehdi Saleh reportedly denied today that there were "instructions to deprive foreigners from benefiting from the ration cards."

But, with conflicting statements by Iraqi ministers in the past three days, it remained uncertain how the measure would affect workers. All Iraqi statements on the matter have said that foreigners working for diplomatic missions still will be eligible for ration coupons.

Among both the employed and the refugees, some face particular problems. According to Mohammed and others, more than half of the 95,000 Sri Lankan workers in Kuwait at the time of the invasion were single women working as maids for low pay. They are having particular difficulty raising money for the bus trips to Jordan, from where the Sri Lankan government is flying its people home.

Perhaps the most desperate of the Asian workers, according to diplomats and Asians living here, are more than 10,000 Vietnamese laborers at a dam under construction in the north. Their cash wages are equivalent to about 17 cents a day and they already are subsisting on short rations and animal feed while struggling to complete their two-year contracts.

While Western nations chartered airliners to fly out their citizens who could leave, India, Pakistan and the Philippines have been chartering buses for the long trip across the desert. Other Asians from Kuwait have had to pool their own money to charter buses, which continue to arrive unannounced in Baghdad, generally parking near the passengers' embassies and turning residential streets into refugee camps.

In the predawn hours today, the sidewalks outside the tiny Sri Lankan Embassy were filled with refugees sleeping on blankets. Others slept on the roofs of the buses or talked softly under streetlights.

"I don't blame our government. It has no money to help us," said John, a Sri Lankan who had reached Baghdad at 2 a.m. "But I don't think the United Nations is doing enough."

Bangladesh and Sri Lanka have received money from the Geneva-based International Organization for Migration to help fly their citizens home from Jordan. Vietnam this week asked for U.N. assistance in sending food to its citizens whom Iraq is requiring to finish their work contracts here.

Asian diplomats said Iraq has released many foreign factory and service-sector workers from their jobs, notably where the U.N. embargo has forced businesses to halt work. But, they said, tens of thousands of Asians who work as skilled technicians -- at hospitals and utility plants -- are not being released from their contracts.

According to embassies here, most Asian workers in Iraq are employed by state-run corporations that hire them directly or through labor contractors. Other Asians work for foreign companies that provide services for the government. Employers typically pay the workers in Iraqi dinars and provide food and housing.

Iraq is dependent on imported food, and the U.N. food embargo has crimped the availability of staples such as rice, wheat flour, sugar, tea and cooking oil. This month, the government began rationing those and four other commodities, issuing coupons that permit people to buy limited amounts at state-run stores.