GENEVA, JAN. 9 -- Tariq Aziz slowly scrutinized President Bush's letter, which officials said spelled out in blunt, vivid detail why President Saddam Hussein's forces should leave Kuwait or face the possible destruction of his regime by the collective military power of 28 nations.

The Iraqi foreign minister lowered his glasses, according to participants in the talks today, and handed the letter back to Secretary of State James A. Baker III. "I am sorry, I cannot receive this letter," he said in his own recounting for the press. "The language in this letter is not compatible with language between heads of state."

Aziz's rebuff, at the outset of the diplomatic showdown in a stark ballroom at the Hotel Intercontinental, symbolized the inability of the United States and Iraq to find common language to bridge differences at their first high-level encounter since the Persian Gulf crisis erupted five months ago.

For most of those five months, the United States sought to force Saddam to retreat through pressure tactics, including the largest American military buildup since the Vietnam War and a global economic embargo against Baghdad. The Bush administration eschewed any talks with its adversary in Baghdad until after the United Nations had authorized the use of force.

Yet when the appointed hour of dialogue finally arrived, the two sides could find no common ground for discussion. Even Baker seemed genuinely stunned as he tried to explain why Aziz spurned the presidential letter, although he refused to disclose its contents.

"You will have to ask the minister why he did not accept the letter," Baker said grimly. "My own opinion, for what it's worth -- and it's only an opinion -- was that he came here only authorized to accept a letter that walked away from the United Nations resolutions, which is something that we cannot -- and, of course, will not -- do."

As stock and oil prices gyrated and a worldwide audience yearned for a breakthrough that would defuse a conflict between two foes with more than a million troops poised for war, Baker and Aziz spent three fruitless rounds of discussion talking past each other, mainly repeating old positions.

Seeking to explain Iraq's rationale for invading and occupying Kuwait, Aziz told reporters that Iraq's action was defensive in nature because it felt threatened by "economic war" from Kuwaiti policies that were driving down oil prices and bankrupting Iraq. Baker said he bluntly responded, "I find it very hard to believe that any nation in the world will believe that."

When Baker demanded Iraq's immediate withdrawal, Aziz replied that his country was willing to discuss it only as part of a larger regional settlement, including the Israeli-Palestinian conflict. When Baker accused Iraq of using the Palestinian issue "to shield its aggression against Kuwait," Aziz insisted that the United States could no longer get away with using double standards in dealing with the foreign occupation of territories in the Middle East.

By the men's accounts, when Baker declared that rewarding aggression "would send a terrible signal" to the new world order, Aziz said Iraq "wished to be partners" in the post-Cold War world, but any rules in the new global structure "have to be implemented justly, not imposed {solely} on a certain case."

In the end, the two men simply walked away with their arguments exhausted.

"After over six hours of discussion we both had pretty well made the points that we had come to make and that was it. I don't believe that there was anything left unsaid. He said everything I think he came to say and I had said everything that I had come to say," Baker said.

The secretary, looking somber and disappointed, said there was "no pounding of the table and shouting at each other. It was a very reasoned and I think responsible discussion by two men who really would like to find a peaceful and political solution to this problem."

Aziz, sounding wistful and hinting about missed opportunities, agreed that the dialogue had been very civil and lamented the fact that the United States and Iraq had waited so long before airing their grievances face to face. "We both listened to each other very carefully, but we had grave differences over the issues," Aziz said. "I told him if we had met several months ago we might have been able to reach an understanding."

Baker twice placed telephone calls to Bush during breaks in the talks, telling him that no sign of flexibility was evident on the Iraqi side. After learning about the meager results of the second round, Bush relayed the spreading sense of disappointment in his own telephone call to French President Francois Mitterrand, who then went ahead with a press conference in Paris describing the pessimistic climate in Geneva and announcing that France was "ready to do its duty" in going to war.

Despite the absence of rancor, neither side took pains to mask an ominous feeling at the end of the talks that the specter of war seemed more real than ever.

"I never thought you Americans could be so arrogant," said an Iraqi participant in the talks, his voice quaking as he spoke later in an elevator. "Such a free, open country you have, and you refuse to see our viewpoint even if the consequence could mean war."

While Baker refused to say that today's disappointment made war imminent and stressed that "the path of peace remains open," he said that during his discussions with Aziz the United States "had asked for and received assurances for our remaining five diplomatic personnel to leave on the 12th of January" -- three days before the United Nations deadline authorizing the use of force to evict Iraqi troops from Kuwait.

"This Jan. 15 deadline in our minds is real," Baker said. "Iraq can choose to believe that or not, but it is real in our minds and in the minds of our coalition partners. We hope that they will believe that we think it's real."