BAGHDAD, IRAQ, NOV. 18 -- Iraq said today it would free all remaining foreign hostages in groups, starting Dec. 25 and continuing through March 25, "unless something should occur to disturb the atmosphere of peace."

There are believed to be close to 2,000 foreigners still trapped or held hostage in Iraq and in Iraqi-occupied Kuwait.

The announcement, reported by the official Iraqi News Agency and apparently timed to precede a Thursday visit to neighboring Saudi Arabia by President Bush, was seen here as a move by President Saddam Hussein to divide world public opinion and to protect Iraq against attack during the January-through-March period now viewed as the most likely time for a U.S.-led offensive to oust Iraqi forces from Kuwait if the Bush administration decides to use force.

U.S. and British officials dismissed Saddam's announcement as more "cynical manipulation" of the hostages. "Just let him release them all immediately," White House press secretary Marlin Fitzwater said in Paris.

The more than 200,000 American troops already in the region are expected to be doubled in number during January, giving the allies their most potent offensive capability since the U.S. buildup began.

But the Moslem holy month of Ramadan -- during which Moslems are required to fast and are especially discouraged from fighting -- begins about the time that Saddam's hostage release would end in March. Bad weather, including sandstorms, that could also thwart allied combat activity also normally begins in March.

Thus, under the conditions set by Saddam, the U.S.-led alliance in the region would not be able to attack during the most favorable time for an offensive and could be thwarted by religious considerations of allied Moslem forces and by weather thereafter.

In Paris, Secretary of State James A. Baker III was asked about Saddam's statement as he met British Foreign Secretary Douglas Hurd. Baker, visibly angry, said the hostages "should never have been taken in the first place. He has it in his power to release them immediately. This is just further cynical manipulation of innocent people's lives."

Hurd said, "I shrug my shoulders. This just seems to be a further demonstration of the policy of the human shield. Why doesn't he let them go this week?"

Fitzwater said Saddam should "just release all the hostages now. These things from him happen so frequently that our response is that this is just part of his pattern of using the hostages to manipulate public opinion, to try to divide the allies, to try to use them as a propaganda device."

The Iraqi announcement coincided with an evacuation flight of Western women and children and men of Arab descent who had been trapped in Kuwait. The 123 passengers, including 71 Americans or their relatives, were flown to Baghdad, where they boarded an Iraqi Airways jumbo jet, along with 10 more evacuees, and flew to London.

Iraq's state-run television and radio stations interrupted their programming this evening to read Saddam's statement, which said the initiative was taken so that "there will be no reason left to disrupt the serenity of Christmas and New Year celebrations for the families of foreigners barred from traveling.

"It has been decided to allow all foreign guests to travel in installments as of Dec. 25, 1990, and over a three-month period with the last batch leaving Iraqi territory on March 25, 1991, unless something should occur to disturb the atmosphere of peace," said an official spokesman quoted by the Iraqi News Agency.

The press release, laced with flowery and spiritual language, said the initiative had come in response to "contact with all the people of goodwill in the world," and in order "to contribute more to all that is being offered in constructive measures to serve the course of peace and dialogue and to thwart or weaken all the factors of evil that are being fed by evildoers pushing toward all that is evil and harmful to humanity."

Saddam presided over a meeting of his seven-man ruling Revolutionary Command Council this morning to discuss the issue.

International figures flocking to Baghdad in recent weeks on unofficial but highly controversial visits have strongly urged Saddam to reconsider his tactic of holding foreigners, in view of the illegality of their detention and use as human shields at installations viewed as likely targets of allied air attacks.

Although these visitors to Baghdad have taken out with them a number of Europeans, Asians and Americans from among those being held, the visits have been widely criticized as political overtures to Saddam that undermine the effort to isolate him and force him to relinquish Kuwait.

The presence here of about 11 wives of British hostages and their active lobbying on behalf of their husbands with Iraqi officials as well as almost daily inquiries by foreign journalists converging on Baghdad has embarrassed Iraq's leaders, already worried about the possibility of attack by U.S.-led forces deployed in the gulf.

Some Western diplomats have said recently that Iraq was trying to think of a way to back out of the hostage impasse, which Iraqi officials initially tried to justify as a safeguard against aggression. Other observers predicted Saddam would string out releases to space out his political gains.

Of the 123 Westerners who left Kuwait today, 71 were American mothers of Kuwaiti children or Arab mothers of American-born children, and some were males of Arab origin. The list issued by Western diplomats included six Australians, nine New Zealanders, one Dane, nine Canadians, seven Irish, nine Britons, two South Africans and one Polish woman married to a Kuwaiti.

Some American women, who declined to give their names, were tearful as they lined up to have their passports processed. One, wearing a black chador, said it was hard for her to leave her Kuwaiti husband behind. "I have mixed feelings. I can't wait to go home {to the United States} and I can't wait to go back to my husband," she sighed.

The women, some carrying babies and luggage, said that conditions in Kuwait were getting worse and that Iraqi authorities there had set Nov. 25 as a deadline for all Kuwaitis to register as Iraqis and change nationality or have their identification papers confiscated.

An American woman said there was a "lot of ammunition and a buildup" of Iraqi soldiers in her neighborhood. "Kuwait is just destroyed, destroyed," she said, with Iraqi soldiers taking "whatever is left" from looted stores.

"Now they are taking scraps, just anything. I hate to say that I wish war for a country, but sometimes I hope for it," she said. "It is wrenching for the children to be separated from their father. We are a very close family, but he will not change his passport. He is Kuwaiti and he's proud of it. He helped build this country with blood and sweat."