Any diplomatic solution to the Persian Gulf crisis that allows Iraqi President Saddam Hussein to remain in power should involve not only freeing Kuwait but also continuation of the anti-Iraq coalition of nations in order to contain Saddam in the future, according to House Armed Services Committee Chairman Les Aspin (D-Wis.).

A solution "that includes Saddam's survival is likely to be trumpeted as a great victory for Saddam over President Bush," Aspin wrote in the second of a series of papers on the crisis. The paper was released yesterday.

"At a minimum," he concluded, for this solution to meet U.S. interests, "the arms embargo must be kept in place, and we should attempt to negotiate military concessions from Saddam in return for lifting the embargo on his oil exports."

President Bush said yesterday there would be no compromise with Saddam on United Nations resolutions that demand Iraq leave Kuwait by Jan. 15 or face possible war.

A compromise would be "the wrong signal to send to people around the world who are together" in opposing Iraq's aggression, Bush said before boarding a helicopter to return to Camp David for the New Year's holiday.

The president also expressed irritation at news reports that said Defense Secretary Richard B. Cheney and Joint Chiefs of Staff Chairman Colin L. Powell had told him that all U.S. forces would not be in place and ready for war with Iraq until sometime in February. "The briefing I had was quite different from the stories," Reuter quoted Bush as saying.

Both Bush and Iraqi officials have said there has been no progress on arranging U.S.-Iraqi talks aimed at averting war in the gulf region. Bush said the Jan. 12 meeting with Secretary of State James A. Baker III that Saddam has offered is too near the Jan. 15 deadline.

Meanwhile, 110 House Democrats, led by Rep. George Miller (Calif.), sent Bush a letter urging him to allow more time for economic sanctions to force Saddam's withdrawal. It also reiterated the party's contention that Congress has the sole authority to declare war, and warned that international military and financial support is insufficient to allow a U.S. attack on Iraq. White House officials said they had not seen the letter.

In Jordan, the army has been holding "unprecedented" large-scale military maneuvers along the mountain ridge overlooking the Jordan Valley, the Los Angeles Times quoted Israeli government sources as saying.

The exercises, involving most of the Jordanian army, apparently are designed to demonstrate the kingdom's military readiness as the Persian Gulf crisis moves toward a "flash point," a senior Israeli official told the newspaper.

In response, Israel has maintained a full alert among specialized forces that would be in the forefront of any Israeli reprisal in case of attack by Iraq or Jordan, but it has not called up any reserves, the newspaper quoted the official as saying.

In Amman, the Jordanian government would say only that its forces are on alert. It said the military moves are not a preparation for attack but a defense exercise to prepare for a hypothetical strike by Israel, the newspaper said.

Saddam has threatened to draw Israel into any conflict resulting from a U.S.-led military assault to drive the Iraqis out of occupied Kuwait, and U.S. officials have said that by doing so Saddam might seek to reduce Washington's support among such traditional foes of Israel as Syria, which has contributed troops to the U.S.-led multinational force in Saudi Arabia.

"We don't think war will necessarily break out on Jan. 16," an Israeli official told the Times. "But there is the growing feeling here that the date marks some kind of an irreversible watershed toward war."

Aspin said he believes that despite the lack of apparent negotiations, a diplomatic solution "appears most promising" prior to the Jan. 15 deadline and "before {economic} sanctions have had time to work or the anti-Iraq coalition has resorted to force to achieve its objectives."

"The critical test for the United States," Aspin said, "is whether the anti-Iraq coalition, in the wake of a diplomatic solution, will be able to hold together to contain Saddam and reduce Iraq's leverage in the region."

Aspin said a diplomatic solution probably would include U.S. agreement not to attack Iraq if it withdraws from Kuwait, as already stated by Baker; talks between Kuwait and Iraq that would result in territorial, financial and political concessions to Baghdad and perhaps some reparations paid to Kuwait; and linkage to an international conference on Arab-Israeli-Palestinian problems after the crisis subsides.

In an earlier statement, Aspin said a partial withdrawal by Iraq from Kuwait, while retaining two islands in the Persian Gulf and a disputed oil field on the Kuwaiti-Iraqi border, could be considered "a partial victory" for Bush's policy. Yesterday he said such a withdrawal, although it would "end the risk of war to Saddam," would not be acceptable. "We would have to keep the sanctions in place to force his complete withdrawal," Aspin said.

In Baghdad, Iraq began sending a group of senior diplomats, including its envoys to the United States, the Soviet Union and the United Nations, back to their overseas posts, saying it was ready for "serious and constructive dialogue" to avert war, but it denied it was launching a new peace initiative, the Associated Press reported.

"We are ready for a serious and constructive dialogue based on mutual respect and the rejection of the course of hegemony and arrogance which the American administration tries to impose on us," the state Iraqi News Agency quoted Saddam as telling the 20 diplomats in a meeting Wednesday, AP reported.

But Saddam repeated his demand to link an Israeli withdrawal from the West Bank and Gaza Strip with any Iraqi pullout from Kuwait, the Iraqi diplomats told AP on condition of anonymity. The United States has refused to link the two issues.

Kuwait's foreign minister, Sheik Sabah Ahmed Sabah, said that only military force would dislodge Iraq from Kuwait. "The whole world has given enough time for a peaceful settlement of the gulf crisis," AP said the Kuwaiti official told a news conference in Beijing.

Iraq, which has more than a half-million troops in Kuwait and southern Iraq, test-fired a surface-to-surface missile Wednesday within its own borders, aimed away from the multinational forces, U.S. officials told AP. No further details were disclosed.