HAFR AL-BATIN, SAUDI ARABIA, JAN. 6 -- King Fahd said today that Iraqi President Saddam Hussein could escape "any further punishment" by pulling his troops out of Kuwait and that Saudi Arabia would then support any negotiated agreement on territorial and financial disputes between Iraq and Kuwait.

Fahd's remarks came during his first inspection tour of troops, including 1,000 U.S. soldiers, drawn from the 16-nation multinational army preparing to oust Iraq from Kuwait by force if it does not leave voluntarily by the United Nations' deadline of Jan. 15.

The comments appeared intended as yet another signal to Saddam that Saudi Arabia is firm in its resolve to see Iraq withdraw unconditionally and that, if done voluntarily, this would open up diplomatic opportunities for Baghdad. Fahd urged Saddam to take this step to avoid what he called "the bloodshed and catastrophe of war."

"It will be in his favor if he withdraws" and "will make matters easy for him to {escape} any further punishment," the Saudi leader said. "And always, there is a way to negotiate and discuss and make agreements in the future so that what is happening now will not be repeated."

But, the king said, "first they withdraw. Then, if there is any demand by Iraq to Kuwait, the two countries should sit together and discuss the matter between themselves, and whatever they agree on, we will support. If they want us to intervene in any way and be part of their negotiations, we will be happy to do that."

Fahd's remarks today were consistent with the position he has taken since the Persian Gulf crisis erupted with Iraq's Aug. 2 invasion of Kuwait. His decision to reiterate it today, just three days before Iraqi Foreign Minister Tariq Aziz is to meet U.S. Secretary of State James A. Baker III in Geneva, appeared aimed at influencing Iraq to bow to international demands to leave Kuwait.

"It's good, to start with, that they are going to meet," Fahd said when asked his expectations of the conference. "But the question is whether Tariq Aziz is going to the meeting with any readiness to discuss {Iraqi withdrawal from Kuwait}. If he goes there to discuss this withdrawal, then the meeting will be good."

Although Fahd is said by associates to feel betrayed by and distrustful of Saddam, the king has avoided vindictiveness in public comments and has held out an oblique promise of an eventual normalization of relations. Saddam has made vitriolic personal attacks on the Saudi leader.

Other Saudi officials also have made more hawkish statements, saying that even if Saddam withdraws from Kuwait he can no longer be trusted and must be removed from power through the pressures of continued international sanctions.

"I do share with President Bush his instinct and his hope" that Saddam will pull out of Kuwait on his own, Fahd said. "And I hope that Saddam Hussein will take this important step . . . and avoid the bloodshed and catastrophe of war like he did, after all, when he announced his agreement concerning the war with Iran."

Fahd was referring to Saddam's decision in August to accept Iran's terms for a peace treaty to formally end their 1980-88 war.

Fahd's visit to the troops, which U.S. military officers reportedly were told about only on Thursday, came just days before Congress is to debate an American role in any eventual war in the gulf.

Symbolizing the U.S.-Saudi military partnership, Fahd joined the commander of American forces in the region, Gen. H. Norman Schwarzkopf, at a Saudi air base here to inspect 1,000 U.S. troops drawn from the Army's Central Command support group.

With the tall, fatigue-clad Schwarzkopf standing by his side, Fahd rode in a red-carpeted Toyota jeep as it slowly moved past the U.S. troops standing at attention in front of several Blackhawk helicopters. The 1st Cavalry Division Band from Fort Bliss, Tex., played the Saudi and U.S. national anthems.

A small group of mostly American reporters was taken along to witness the king's visit and, for the first time since the crisis began, were given an opportunity to question Fahd.

"I think it's just a demonstration of all of us together," Schwarzkopf said of Fahd's visit shortly before the king arrived. "That's what it is, it's a demonstration we're all in this together. The president came out here to see {Fahd's} troops and now the king of Saudi Arabia is coming out here to see" President Bush's soldiers.

Asked whether he thought Fahd, who also inspected Saudi airmen at the air base, should have visited U.S. troops sooner, Schwarzkopf replied, "Aw, who am I to tell kings what to do? You know, they're really busy people. I just think it's a wonderful gesture that he's coming out to see them."

The U.S. commander said that "there's a thousand ways to answer that question" when asked if his troops were ready to move against Iraqi forces in Kuwait if ordered to do so shortly after Jan. 15. "I agree with the president that we've talked too much about this readiness business. I think we should just leave it at that. We're ready now. We've been ready a long time, and we continue to get ready every day."

After inspecting U.S. troops, Fahd and his entourage of about 100 royal family members and officials were whisked away in a caravan of limousines and jeeps into the desert, where about 5,000 troops stood at attention for a royal inspection.

In addition to soldiers from all six gulf countries, the troops included units from Britain, France, Syria, Egypt, Morocco, Bangladesh, Senegal and Niger. Also present were a Czechoslovak chemical weapons decontamination unit and a few Japanese medical volunteers. Officials did not explain why U.S. troops were reviewed separately from the other national units.

The panorama of troops, with their colors waving, resembled a set for a desert war movie. A large tent with a yellow, patterned canopy was furnished with oriental carpets, glass coffee tables, fresh flowers and large upholstered chairs for the king; his brother, Prince Sultan, the Saudi defense minister; and his nephew, Prince Khalid, a lieutenant general who is commander of Arab forces here.

To the king's left sat a large group of Saudi notables, dressed in their traditional robes and headdresses. To his right were uniformed military commanders of the largest contingents in the multinational force, including Schwarzkopf. Many of these military men would never be in the same tent together under ordinary circumstances.

The 69-year-old king, speaking without notes, addressed the assembled troops from his chair in the tent for 45 minutes. As a solitary butterfly fluttered around the microphone, Fahd gave his version of events that led up to Iraq's invasion of Kuwait -- an action that he said had "shocked" him.

Fahd thanked all the countries who had sent troops and warned that if Saddam "decides to take the option to fight, he will shoulder all the responsibility for this."

Afterward, Fahd was asked by reporters if he still felt he had made the right decision to call in foreign military forces to help defend Saudi Arabia, a move criticized by some Arab leaders, such as Jordan's King Hussein, who have said it complicated a peaceful inter-Arab solution to the crisis.

"We have taken the right step," Fahd replied. "We still know it's the right step, and we don't have any destabilization {in the area}. The people who objected are those people who supported Saddam Hussein from the beginning . . . . We are sure, God willing, that peace will be realized, one way or the other."