PARIS, OCT. 20 -- U.S. Defense Secretary Richard B. Cheney said today that the trade embargo imposed on Iraq after its invasion of Kuwait is starting to have a serious impact on the Iraqi economy and its ability to sustain its occupation force.

Following talks with French Defense Minister Jean-Pierre Chevenement, Cheney told reporters that the U.S. and French governments are hopeful that Iraq's growing economic difficulties, caused by the cessation of oil sales and the blockade of many vital imports, would persuade Iraqi President Saddam Hussein to withdraw from Kuwait and accept a peaceful resolution of the Persian Gulf crisis. Baghdad announced this week that it would begin rationing gasoline and motor oil.

But Cheney stressed that the United States has "not ruled out other options," such as the use of military force in ousting Iraqi troops from Kuwait. He said Washington believes it has sufficient authority under the United Nations Charter to undertake a military assault if necessary and would not be obliged to seek U.N. Security Council approval for the use of force.

Since Iraq invaded Kuwait on Aug. 2, the Security Council has passed resolutions imposing global trade sanctions on Iraq and authorizing the use of force in enforcing them, but has not taken any action regarding the buildup or control of the multinational military contingent that has gathered in the region to oppose Saddam.

France, which maintains the second-largest Western force in the gulf after the United States, has insisted that any offensive action against Iraq must be sanctioned by the Security Council.

French officials said that apart from differences over Security Council approval of military force, they were pleased by the convergence of views between Washington and Paris. Chevenement, who earlier had been critical of the military buildup in the gulf, said at the press conference that both countries now share a cautious and determined approach "to enforce the rule of law and United Nations' resolutions until Saddam Hussein takes the initiative to retreat from Kuwait."

U.S. and French officials said Cheney and Chevenement discussed the need to move rapidly after resolution of the gulf crisis to address other regional problems, particularly the Israeli-Palestinian conflict. French officials said Cheney reassured them that the United States is prepared to take dramatic steps if necessary to resolve such problems, but he offered no indication that his government is ready to support France's call for an early international peace conference on the Middle East.

Cheney and Chevenement also discussed the Soviet Union's economic difficulties, which the Pentagon chief observed during a four-day visit to Moscow this week. The two expressed concern during their talks about the large number of tanks and artillery the Soviets are withdrawing from Eastern Europe to storage areas east of the Ural Mountains.