PARIS, NOV. 16 -- A top adviser to French President Francois Mitterrand said today that a United Nations trade embargo is eroding Iraq's military capability to such an extent that a U.S.-led offensive to oust Iraqi troops from Kuwait may not be as difficult as some analysts have predicted.

By the time recently announced reinforcements raise U.S. troop levels in the Persian Gulf region to more than 400,000 in January, Western and Arab troops could probably overwhelm the deteriorating Iraqi forces in Kuwait and recapture the sheikdom with relative ease, the senior official said.

"The increase in American forces in the gulf means that {Iraqi President} Saddam Hussein has about two months to pull his troops out of Kuwait or face a humiliating military loss," said the presidential adviser, who spoke on condition of anonymity.

"Our experience, on the basis of contract negotiations and other dealings with the Iraqi leadership, is that he will take it right to the point of rupture before backing down," he said.

When Mitterrand hosts a dinner for President Bush Sunday on the eve of the 34-nation summit of the Conference on Security and Cooperation in Europe, he is expected to emphasize the effectiveness of the embargo in sapping Iraqi military strength and morale and domestic political support for Saddam. The international blockade has virtually halted sales of Iraqi oil and slowed imports to a trickle.

French intelligence has reported that industry is grinding to a halt inside Iraq. Despite ruthless suppression by Saddam's internal security services, domestic discontent reportedly is spreading, even within the army.

Some of Iraq's most sophisticated military equipment, such as French-built radar systems, is said to be suffering from a shortage of spare parts and from poor maintenance. A civilian industrial source here said that some French-made computerized systems employed by Iraqi forces were rendered useless soon after Iraq's Aug. 2 invasion of Kuwait by computer viruses implanted as a security measure.

While stressing the importance of giving the embargo more time to work, France also is prepared to support the United States in its quest for United Nations backing to use military means if necessary to oust Iraq from Kuwait, the senior official said.

He asserted that France and the Soviet Union had told the United States that it was important for American interests to maintain an international consensus by securing a U.N. Security Council resolution approving the use of force. The United States has insisted it has necessary authority to employ force under Article 51 of the U.N. Charter.

French officials have said Secretary of State James A. Baker III may succeed in getting the Security Council to unanimously approve a resolution by the end of the month endorsing the use of force, once diplomatic efforts to persuade Iraq to withdraw are exhausted. Baker has been working to achieve that goal before the United States cedes the council's rotating presidency in two weeks to Yemen, considered more sympathetic to Iraq than any other council member.

Mitterrand's adviser said the international community would not support a major U.S.-led attack against Iraqi territory or a direct effort to topple Saddam. But he added it was hard to conceive that Saddam could survive in power after a military defeat inside Kuwait, much less one in Iraq.

Some military estimates have suggested the United States could lose at least 20,000 soldiers in an offensive to retake Kuwait. But the senior French official discounted those assessments, contending that massive U.S. superiority in air power, bolstered troop levels and the steadily eroding Iraqi military capability wrought by the embargo would keep Western casualties low. He would not give any specific estimate.

He also minimized the risk of terrorism in the wake of any use of military force, noting the quiescent reaction to the U.S. bombing of Libya in 1986 after it was accused of sponsoring a terrorist attack against U.S. soldiers in West Berlin. "To conduct terrorist operations you would need a base, and there would not be much of one left once Saddam Hussein goes down in a military defeat," the official said.