Seven Marines killed in a firefight last Tuesday died from "friendly fire" when an allied pilot apparently mistook their armored car for an Iraqi vehicle and destroyed it with a missile, U.S. officials confirmed yesterday.

The accident occurred in a night battle between Marine forces and 50 Iraqi tanks and armored personnel carriers, which had crossed into Saudi Arabia south of the Kuwaiti town of al-Wafra. In "very intense, very close combat," an allied aircraft fired what investigators believe was a Maverick anti-armor missile that penetrated the left rear side of the Marines' light armored vehicle (LAV) and shattered the engine compartment, spraying the Marines with fragments, Marine Maj. Gen. Robert B. Johnston told reporters in Riyadh.

A Pentagon official last night said investigators believe the fatal missile was launched from a U.S. Air Force A-10 Thunderbolt. The report on the Marine deaths means that the only officially confirmed causes of combat deaths to U.S. ground forces in the 18-day-old Persian Gulf War have involved U.S. weapons. The deaths of four other Marines killed last week remain under investigation, as does the killing of another Marine Saturday in an apparently errant attack with U.S. cluster bombs.

As news of the accidental deaths was released in Saudi Arabia, Defense Secretary Richard B. Cheney said in Washington yesterday that the United States and its allies may want to maintain economic sanctions and a naval blockade against Iraq even if President Saddam Hussein decides to end his occupation of Kuwait.

Declaring that "the world has a long-term interest in seeing to it that Saddam Hussein is never able to do this again," Cheney in an ABC television interview suggested the need for sanctions "based on an international effort to deny him the ability to rebuild that military force that he's used against his neighbors." Rep. Les Aspin (D-Wis.), chairman of the House Armed Services Committee, cautioned that domestic politics may be pushing President Bush into seeking Saddam's ouster as a condition for ending the war, a "dangerous" addition to the stated goal of ejecting Iraq from Kuwait, Aspin said.

U.S. officials yesterday confirmed three additional aircraft losses in Operation Desert Storm: a B-52 bomber that crashed in the Indian Ocean at 1 a.m. yesterday (5 p.m. Saturday EST); a Marine AH-1 Cobra helicopter lost in the Saudi desert, and a UH-1 Huey helicopter. All the losses were attributed to mechanical failures rather than combat, officials told reporters in Riyadh.

Both Cobra gunship crewmen -- Maj. Eugene McCarthy, 35, of Brooklyn, N.Y., and Capt. Jonathan R. Edwards, 34, of Terrace Park, Ohio -- and the four Huey crewmen were killed, officials said. Three B-52 crewmen were rescued and three others are missing; the bomber had finished a bombing mission and was headed home to Diego Garcia, an atoll 2,000 miles south of the Persian Gulf, when it went down.

The Bush administration, which has accused Saddam of crimes ranging from mass murder to environmental terrorism, yesterday added the U.S. economic recession to the long list of iniquities blamed on the Iraqi leader. Budget director Richard G. Darman said the invasion of Kuwait on Aug. 2 "created, I think, this economic downturn we're in, at least in substantial measure."

Speaking on NBC's "Meet the Press," Darman also said that U.S. allies have committed more than $51 billion to underwrite the Persian Gulf War. If the war "ends soon," Darman said, "that could pay for almost all of it." The Japanese, he added, have actually provided less than $1 billion of the $10.7 billion committed. Despite a contentious debate in the Japanese parliament over the amount, the United States expects Tokyo to "deliver" because both Prime Minister Toshiki Kaifu and Finance Minister Ryutaro Hashimoto are "personally on the line for this," Darman added.

The new budget being presented to Congress will include $15 billion "as a place-holder, for what might have to be the U.S. contribution," pending those foreign contributions, Darman said, reiterating earlier administration comments that no new taxes are anticipated to pay for the war.Iraqi Aircraft Losses Rise

Johnston yesterday also more than tripled the estimate of Iraqi aircraft destroyed on the ground, raising the tally from 31 to at least 99. The toll reflects allied intelligence assessments of planes destroyed in hardened shelters and "could even go up to 140 because many of those shelters actually house more than one aircraft," the general said.

When added to the 89 Iraqi planes known to have sought sanctuary in Iran and the 28 shot down in air-to-air combat, the 99 aircraft confirmed destroyed on the ground means that slightly more than one-quarter of Iraq's estimated air force of 808 planes is considered "neutralized" by the allies.

Allied warplanes flew another 2,500 sorties yesterday, bringing the total for Operation Desert Storm to more than 41,000. Yesterday's missions were parcelled into 40 strike "packages" -- typically composed of bombers, fighter escorts, electronic warfare aircraft and others -- including 24 packages against Republican Guard units. Other bombers focused on supply convoys, often backed up and exposed because 25 of 35 major bridges have been "destroyed or damaged significantly," Johnston said. Secondary roads and emergency pontoon bridges also have been attacked.

Asked about the "friendly fire" losses and possible difficulties in dovetailing allied air and ground action, Lt. Gen. Charles Horner, the senior U.S. Air Force officer in the gulf, told Cable News Network yesterday that he has placed 2,000 coordinators with ground troops "to work this integration."

"But any time you put people with live weapons, there's always the possibility of mishap," Horner added. "And it is very, very disturbing when it happens and it's something we all take very seriously."

Lt. Col. Fred Peck, a Marine spokesman in Washington, said last night that the loss of American lives to friendly fire in last week's relatively small battle will redouble the caution of pilots in a major battle involving "thousands of vehicles and thousands of airplanes swirling overhead. It's going to make the folks up there doubly or triply cautious before they unleash their weapons on a vehicle."

Iraq responded to the relentless allied bombing by renewing threats to hit American and Western targets worldwide. "The target will not be confined this time to the soldiers of the United States, the mercenaries of its allies or its collaborators in the holy lands in the Arabian Peninsula," Baghdad Radio warned yesterday. "The interests of the United States everywhere in the world will also be the target. There is a difference between terrorism and struggle. This is a legitimate act."

Reporters in Baghdad described a Sunday relatively free of air raids, as merchants resumed a brisk trade on city streets. The Associated Press reported that recent "bombing missions appear to have hit every warehouse in Baghdad," while travelers from the southern city of Basra recounted widespread devastation there, including the demolition of warehouses filled with dates, one of Iraq's principal agricultural exports before the August embargo.

Radio Baghdad ridiculed Bush's declaration of yesterday as a national day of prayer. "To which God does Bush want them to turn in prayer?" asked the broadcast, monitored on Cyprus. "Who will answer the prayers of evildoers, killers and slayers. . . . Bush is adding to his sins and crimes the crime of mocking God."

Cheney's suggestion of maintaining an embargo and blockade even if Iraq vacates Kuwait appeared to go beyond earlier administration comments. The defense secretary in November referred to a need for continued sanctions to prevent a rebuilding of Iraq's nuclear program; Bush last month declared the need to "bring every single soldier, airman and Marine out of there as quickly as possible," while leaving a naval force as "a stabilizing presence." Neither has called for a blockade.

Asked whether the use of nuclear weapons in the war could be justified by the ultimate preservation of American lives, Cheney replied, "I would not at this point advocate use of nuclear weapons, certainly."

Aspin, on "Meet the Press," warned that the United States "is about to do something which is rather dangerous" by expanding "the war aim" from ejecting the Iraqis to "getting rid of Saddam Hussein." That would mean "somebody's got to then go on to Baghdad. It means that this war is going to take a lot longer, and there's going to be a lot more casualties."

Opinion polls supporting the killing or ouster of Saddam, coupled with administration pledges to hold the Iraqi leader responsible for "war crimes," may make it politically difficult to end the war with Saddam still in power, Aspin added in a telephone interview.

"If the public expects Saddam Hussein to go and he doesn't go, does that rob George Bush of the political victory that he thinks will come out of this?" Aspin asked.

U.S. planes patrolling over Iraq early yesterday attacked two missile sites after Iraqi crews revealed their positions by launching Scuds at Israel and Saudi Arabia, U.S. officers said in Riyadh. The air strikes reportedly triggered explosions at one site.

A Patriot missile intercepted the Scud fired at the Saudi capital, but falling debris badly damaged two small apartment houses and slightly injured 29 people. Two other Scuds believed aimed at Israeli cities reportedly fell harmlessly short of their targets, including one believed to have tumbled into Jordan.

In a travel advisory, the State Department yesterday urged all U.S. citizens to leave Jordan as soon as possible, noting heightened tensions and risks there. Nonessential government personnel and all dependents have already been ordered out.

No Naval Activity

Except for "two or three {Iraqi} aircraft, very briefly airborne," allied planes yesterday again encountered virtually no opposition except for antiaircraft fire, Johnston said. "There was absolutely no activity on the water," the general added. "While one never says 'never,' it would appear that there's some confirmation of our assessment that {Iraq} is essentially out of business with respect to naval capability."

Ground action yesterday was virtually nonexistent except for a few exchanges of small arms fire. Because Iraq has lost the ability to see allied troop dispositions from the air, Johnston said, "we would expect probing activity . . . {because} the only way he can realistically expect to have any feel for where we are and what we are is by ground reconnaissance." U.S. and Saudi compounds now hold about 800 Iraqi prisoners of war, he added. Saudi Col. Ahmed Robayan said an Iraqi engineering unit had tried to run a bulldozer "through a berm at our border," but was driven back with gunfire that destroyed the bulldozer and another Iraqi vehicle.

British bombers yesterday attacked three oil production facilities, including a raid by 16 Tornadoes on a crude oil pumping station in western Iraq that "is no longer operational," Group Capt. Niall Irving said in Riyadh. Eight Tornadoes dropped 40 1,000-pound bombs on an airfield in western Iraq, a mission intended to ruin the repair efforts of Iraqi maintenance crews trying to keep runways patched for possible use by interceptors.

British Jaguar bombers struck an ammunition dump south of Kuwait City, while others -- using 1,000-pound air burst munitions -- destroyed six gun emplacements on the tiny island of Faylakah, 10 miles off the Kuwaiti coast, Irving said. Although only one surface-to-air (SAM) missile was fired at British raiders yesterday, pilots have noticed "an increase generally" in antiaircraft gunfire in the last few days, Irving added.

The quiescent ground war permitted U.S. Army inspectors to take a close look at hundreds of Bradley Fighting Vehicles, the Americans' premier armored infantry transport, for a suspected transmission defect that could prevent them from shifting into third or fourth gear. The Bradleys are designed to travel at speeds close to 40 miles an hour, but 511 of the vehicles -- as many as one-third of those in Saudi Arabia -- are suspected of having a glitch that could limit them to 12 miles an hour, according to an Army memo disclosed Saturday by the Associated Press.

Asked yesterday about the problem, Lt. Gen. John J. Yeosock of the U.S. Central Command told a television interviewer that inspectors had found only two such defects, with both "corrected immediately on the spot."

Staff researcher Lucy Shackelford contributed to this report.