Former secretary of state James A. Baker III has resigned as U.N. Secretary General Kofi Annan's special envoy to the disputed Western Sahara territory, the president of the U.N. Security Council said yesterday.

Baker, 74, was unable during the past seven years to forge an agreement to end the 30-year-old dispute over the former Spanish territory's political future, which pits Morocco against the Polisario rebel army. Morocco refused to accept Baker's plan for a referendum on Western Sahara's status.

"It is a setback," Philippine Ambassador Lauro Baja, president of the Security Council this month, said in an interview. "There will have to be new approaches, which will take time."

The U.S. Geological Survey says there are "substantial" oil reserves beneath the Atlantic off the shore of Western Sahara, a region slightly smaller than Colorado on Africa's northwestern coast. Kerr-McGee Corp., an oil and gas explorer in Oklahoma, has tested in the waters off the territory.

Morocco claimed Western Sahara after Spain ended its colonial rule in 1973. The Polisario rebel army fought Morocco until both sides agreed on a U.N.-monitored truce in 1991, and the United Nations has had more than 400 peacekeeping troops and civilian police there since then.

Baker, named last year as President Bush's envoy for talks on cutting Iraq's foreign debt, proposed a period of transition before a referendum in Western Sahara, which would take place within five years. Ambassador Abdallah Baali of Algeria, which accepted Baker's plan, said he was frustrated by Morocco's refusal to endorse it.

"He had enough," Baali said. "He was a strong and impartial negotiator who had the full confidence of Algeria, and we have repeatedly expressed our support for his efforts and for the latest plan he submitted to the Security Council last year. We are really sad he is leaving the scene."