Italian Foreign Minister Gianni De Michelis said yesterday that military action against Iraq, even if successful, could radicalize Arab public opinion in North Africa and threaten Italy's own "real, direct security."

But De Michelis expressed the hope the Persian Gulf crisis can still be resolved peacefully, saying there are indications that Iraqi President Saddam Hussein may be "considering the possibility of withdrawing" his forces from Kuwait.

Asked to elaborate, the Italian minister cited recent statements by Saddam about "conditions" for a possible Arab summit as well as conversations De Michelis has had with officials in the region.

No matter how the present crisis is resolved, De Michelis told editors and reporters of The Washington Post, Italy would push for a "Helsinki-type conference" on Mediterranean and Middle East security concerns.

The 35-nation Helsinki Conference in 1975 guaranteed existing borders in Europe and established standards for human rights, emigration and trade between East and West. De Michelis said the same framework could be used to encompass North African and Middle Eastern countries to ease tensions there.

De Michelis said that for Italy, Spain and other countries in Southern Europe, there was a "great danger" that the gulf crisis would lead to elections across the Mediterranean of "radical" governments like Libya's in easy striking distance of Europe.

"We are worried now in Europe" about what happens after the crisis in Kuwait is over, De Michelis said. "A war {against Iraq} would create an immediate negative reaction" in the Arab world, he said, bolstering radical groups and sowing seeds for a potentially destructive European-Islamic conflict in the future.

De Michelis, who met with Secretary of State James A. Baker III yesterday, said that while the United States had been cool to the conference proposal, and the Israeli government had been "negative," Italy would move forward with the idea after the gulf crisis because "we want to reduce insecurity" in the region.

Despite the destabilizing ramifications of military action against Iraq, De Michelis said Italy is still "convinced of the absolute necessity to retain the military option."

The United States and its allies have been discussing language for a United Nations resolution that would authorize the use of force against Iraq without tying U.S. troops to a joint military command under U.N. auspices. But De Michelis said "there is no formal draft" yet.

A U.N. resolution authorizing the use of military force could have the effect of convincing Saddam that he must negotiate a withdrawal, De Michelis said. But the Italian minister said "Baker was trying to understand what would happen" in the U.N. Security Council if such a draft were proposed and that Baker was "not sure what would happen."

Baker leaves today for a weeklong trip to Europe that will include discussions in Geneva and Paris with foreign ministers of Security Council members to assess their views.