BAGHDAD, IRAQ, JAN. 9 -- As the U.S-Iraqi dialogue stalled today in Geneva, President Saddam Hussein declared that Iraq's armed forces and people are "ready for a showdown" with foreign forces and warned, "We will make them swim in their own blood."

In a statement to a gathering of 500 members of the ruling Baath Arab Socialist Party, Saddam warned, "Our armed forces and the great Iraqi people are ready for a showdown that would defeat the forces of aggression and infidelity. . . . Unequivocal victory will be ours."

He added, "You will see what a trap the United States will fall into."

The stalemate in Geneva between Secretary of State James A. Baker III and Iraqi Foreign Minister Tariq Aziz came as no surprise to diplomats in the Iraqi capital, although some said their optimism had increased as the dialogue progressed throughout the day.

"We thought at the initial stage that the meeting might bring fruitful results because it lasted for more than six hours," said one diplomat. "We consider the conditions at present to be very serious."

"The public postures of the two sides were light years, I mean eons apart," said another diplomat.

Western embassies withheld official comment tonight on possible evacuation plans for staff members in the six days remaining before a U.N. resolution takes effect authorizing the use of force if Iraq does not withdraw from Kuwait. Many diplomats, contacted late at their offices, said they were reviewing their plans and conferring with their home offices.

The U.S. Embassy had no official comment on Baker's decision to withdraw all U.S. Embassy personnel from Baghdad by Jan. 12. European embassies reportedly have been waiting for a decision by the United States before deciding whether to withdraw their own personnel. Germany already has removed its entire diplomatic staff, although the embassy technically remains open.

The breakdown of the talks is likely to add to a mood of anxiety that has developed in Baghdad over the past two or three days. Although gasoline apparently is in plentiful supply, long lines have been forming at gas stations throughout the city.

One motorist who had waited for more than two hours to get gasoline said he was at a loss to explain the lines, other than the apparently growing fear among the population that war is imminent.

Airline flights out of Iraq are reported to be booked solid for the next five days. As news reached Baghdad that Jordan had closed its borders to all non-Jordanian refugees from Iraq, travelers scrambled to find alternative routes out of Iraq in the event that Iraq closes its air space in the next few days.

An Islamic conference opened here today with 350 delegates from scores of countries, and diplomats said Iraq is unlikely to close its air space until all of the delegates have departed.

Although diplomats regarded the collapse of the Geneva talks as no surprise, they remained uncertain about the status of other diplomatic initiatives that are expected to pick up speed now.

Top among those is the mission to Baghdad to begin Thursday night by U.N. Secretary General Javier Perez de Cuellar that has been endorsed by the United States. Earlier, Saddam was reported to have placed a high priority on French attempts at trying to find a diplomatic solution. But Iraqi Information Minister Latif Nassif Jassim said in an interview Tuesday, "We have no initiatives {to consider}. The only initiative is Aug. 12," the date on which Saddam stated his conditions for negotiating a settlement.