Former FBI deputy director Larry Potts yesterday adamantly defended his actions during the deadly siege at Ruby Ridge and said he was shocked to find himself under criminal investigation involving the shoot-on-sight rules issued in the standoff.

"My world has been turned upside down by a series of events that were both unexpected and, I believe, unfair," Potts said in a dramatic appearance before the Senate subcommittee on terrorism.

Discarding advice to invoke the Fifth Amendment, he said that notes that would exonerate him were recently discovered but are being kept from him, and the subcommittee, by the Justice Department, which is probing document destruction and possible obstruction of justice by top FBI officials. Potts said he knows of nothing he is alleged to have done that was not known when he was censured last January for neglectful management of the 1992 crisis.

Potts said he never even saw the final "rules of engagement" that were laid down at Ruby Ridge, Idaho, and his top deputy at the time, Danny O. Coulson, said he rejected the operations plan containing them because he felt it would "lead to death."

Their versions of events contrasted sharply with those offered by other FBI officials involved in the standoff who have testified during the hearings that they believed the Ruby Ridge operations plan was approved by headquarters. In their appearance before a pointedly dissatisfied panel, both Potts and Coulson, suspended from their jobs last month, blamed commanders in the field for issuing the rules that told FBI snipers they "could and should" shoot any armed adult male seen in the vicinity of white separatist Randy Weaver's cabin.

One of those snipers, Lon Horiuchi, shot and killed Weaver's wife, Vicki, on the evening of Aug. 22, 1992, as she held her baby daughter. She was holding the cabin door open for her husband and two others fleeing into the cabin after the sniper's first shot.

Sharply critical of Potts and Coulson, Sen. Dianne Feinstein (D-Calif.) chastised them for staying in Washington, playing the bureaucratic role and then pointing fingers at the men in the field.

"I don't think there was anything more important going on in the FBI at that minute than getting on a fast plane and getting out there," Feinstein told them. "You're responsible to see that the rules are in place. . . . I don't think you can duck that responsibility. And this is what I hear you saying. And frankly it makes me angry."

Potts protested, saying it was his job to remain at headquarters and "to coordinate the needs" of the field commanders. "I worked 20 hours a day during this thing until it was over," he said. "I assure you, ma'am, I was not trying to duck responsibility."

"Yeah," Feinstein replied, "but if the thing goes wrong, some agent in the field takes the responsibility and takes the fall, and that's the bottom line of it."

Unlike sniper Horiuchi and four other FBI officials who invoked their Fifth Amendment privilege against self-incrimination at earlier hearings, Potts said he decided to testify "because . . . when you have nothing to hide, there is no reason not to explain your actions."

Potts was an assistant FBI director and Coulson was deputy assistant director on Aug. 21, 1992, when they were told a federal marshal had been killed on Ruby Ridge after being chased by Weaver and some companions; they turned out to be family friend Kevin Harris, 24, and Weaver's son, Sammy, 14, who was also killed.

A federal court jury subsequently acquitted Weaver and Harris of murder charges in the marshal's death, with most jurors convinced that the marshals had started the gunfight by killing the Weavers' dog.

But that August afternoon, Coulson said, the word that reached Washington was that Weaver, a former Green Beret wanted as a fugitive on weapons charges, and his party had "pursued {and} . . . routed . . . six very well-trained marshals" and left one dead.

Potts ordered the FBI's military-style Hostage Rescue Team to the scene and talked to HRT commander Richard Rogers by phone that night as Rogers flew west at the head of an advance team. Potts said he approved rules Rogers proposed to him stating that: "Any adult with a weapon who was observed in the vicinity of Randy Weaver's cabin should be considered an immediate threat and deadly force can be used."

Potts said he made "contemporaneous notes of these rules that I had approved," but the Justice Department has them and "refused to make them available to me or my attorney."

The Ruby Ridge field commander, Eugene F. Glenn, said he sent headquarters a copy of the operations plan he and Rogers had put together and got headquarters approval promptly. In testimony Tuesday, G. Wayne "Duke" Smith, an associate director of the U.S. Marshals Service, said he was sitting in the command trailer with Glenn on the afternoon of Aug. 22 while Glenn "was on the telephone with Washington."

After a few minutes, "he hung up the phone and then he said to me in a casual way, Well, Pottsie has approved the rules of engagement' and I knew Pottsie as being an affectionate term used for Larry Potts," Smith said.

Potts and Coulson, however, contended that Rogers had changed the rules that morning, without their knowledge, so that they read deadly force "could and should" be used. Potts said he didn't even see the operations plan Glenn faxed because Potts was home at the time after 32 hours of continuous duty.

Coulson, who was in charge in Potts's absence, said he rejected the operations plan on reading the first page and seeing that it called for an assault on the Weaver compound, destruction of outlying structures and then tear gas into the cabin without a negotiations option. He said he "immediately rejected that plan" without going on to the second page, containing the "could and should" rules of engagement.

Told by Coulson that a negotiations option was needed, Glenn faxed back a "negotiations annex to the operations plan." Coulson insisted he approved only that and not the operations plan. He said the plan "shocked" him because "it violated every principle" he had been taught.

"Wait a minute," Sen. Larry E. Craig (R-Idaho) interjected, pointing out that Coulson had been the HRT's first commander. "The team was your baby."

Coulson agreed. "I couldn't believe I got a plan like that from, like you say, my own baby," he said.

"But they went forward with the rules of engagement that were part of the entire plan," Craig said. "If they did, it was over my rejection," Coulson said.

According to a special Justice Department task force, however, the FBI at Ruby Ridge began demolishing outbuildings as scheduled in the operations plan on Aug. 23, stopping only when they discovered Sammy Weaver's body in a shed where his parents had placed it. Special correspondent Benjamin S. Abramson contributed to this report. CAPTION: Former FBI deputy director Larry Potts testifies before Senate panel probing 1992 standoff in Idaho. At left is his attorney, Dan Webb. CAPTION: Sen. Arlen Specter (R-Pa.), center, greets Potts, left, and Danny O. Coulson.