The confusion over President Bush's stand on higher tax rates for wealthy taxpayers, which played out Tuesday in an embarrassing and politically damaging sequence, reflects deep divisions inside the administration over budget strategy and sharply conflicting approaches favored by House and Senate Republicans.

Scrambling to maintain Republican unity in the face of the Democratic majority in Congress, the White House has found itself mired in disagreement with no clear way out. Many loyal Republicans, in and out of the administration, say they are uncertain what the administration is trying to do now. Bush said it was up to Congress to clear up the confusion.

Bush reportedly was not happy with the way events unfolded Tuesday. But White House Chief of Staff John H. Sununu and Office of Management and Budget Director Richard G. Darman continued to work to block any new agreement that strays too far from the package soundly rejected by the House last week.

White House officials said they had agreed that Bush's message during his news conference Tuesday was that he was not ruling out or in any specific provision and that all issues were on the table in the new round of budget negotiations with Congress. Instead, when asked if he were now willing to accept higher rates to get a capital gains cut, he replied: "That's on the table. That's been talked about. And if it's proper, if it can be worked in proper balance between the capital gains rate and income tax changes, fine."

Watching the performance on television, one administration official said, "I almost fell off my chair" because what Bush said "went well beyond what we thought was the position."

A senior administration official said the confusing events that followed were "just a replay of the argument we have been having within the administration for the past 36 hours."

Sununu, Darman and Treasury Secretary Nicholas F. Brady "want to close the deal and believe any reopening of these problems you couldn't solve over weeks and weeks will make sure you can't close the deal at all unless it is on straight Democratic terms," the official added.

But complicating White House strategy-making was the conflict between senior Senate Republicans, who fear Bush cannot strike a good deal with the Democrats, and many House Republicans, who once opposed increasing tax rates but are now talking about being willing to do so.

What happened Tuesday? The simplest explanation may be that Bush went farther than intended during his news conference and then backed off less than Sen. Bob Packwood (R-Ore.) suggested when he told reporters that Bush had "acquiesced" to the Senate Republicans.

Bush opened the door to a rate hike in exchange for a cut in capital gains taxes Tuesday morning, then appeared to allow a group of Republican senators, aided by anonymous White House aides, to slam it shut hours later after a meeting at the White House.

Yesterday morning, after seeing the portraits of confusion on television and in the newspapers, Republicans attempted a partial retreat from the apparent flip-flop.

"He didn't make any decisions {Tuesday}," Senate Minority Leader Robert J. Dole (R-Kan.) said of Bush's reaction to the GOP senators' recommendation that he take the issue off the table. "He listened to us. He didn't announce his position at all. He didn't acquiesce."

Seventeen senators visited the White House late Tuesday afternoon. There are conflicting reports about how they ended up there. One account said Dole and Packwood decided they wanted Bush to know of opposition among Senate Republicans. Another account said that Sununu and Darman, knowing the senators' views, wanted Bush to hear them firsthand in an effort to push him back from his morning statement.

Some White House aides backed up Packwood's statement, with Sununu telling a business group later that higher rates were off the table.

The White House divisions, which are more tactical than ideological, grow out of the administration's desire to bring back into the fold House Republicans who voted against Bush and the package last week. What has astounded White House officials is that many of those same Republicans, including House Minority Whip Newt Gingrich (R-Ga.), have been talking up a new compromise that would include higher rates in exchange for capital gains.

One official said that those who now favor striking a deal believe that the top rate on the richiest taxpayers eventually will be increased and that it behooves the Republicans to get something for it, such as capital gains tax cuts, when they can.

Vice President Quayle in particular has sided with House Republicans, largely to build unity.

But the administration now faces a difficult strategic decision. Senate Republicans, because of their numbers, are a potent force in the negotiations. They have the votes to sustain a presidential veto of any final package that Bush dislikes. House Republicans, far more a minority, are seeking a role in the action in the House, which is dominated by Democrats.

One Democrat said Bush's only real hope is to negotiate with Democrats in the House and a bipartisan coalition in the Senate.

White House officials also fear that some of the House Republicans now favoring a deal on higher rates may be using it to appear reasonable but ultimately want to derail the negotiations and turn the fight into a partisan battle.

Bush has said privately that he still fears political damage if he bows to higher rates, although political advisers have told him "it's no big deal." He also has been told that the Democrats already have won the argument because the president is now seen as defending the rich.

The current Sununu-Darman strategy appears to be aimed at persuading House Republicans, who have been invited to the White House today in waves, to abandon their talk of raising tax rates in order to unify the party in both chambers and then hang tough. What was unclear yesterday was where Bush now stands.