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Saudis rush to restate remarks

Saudi Arabia's defense minister has raised the possibility of giving Iraq some Kuwaiti territory as an outlet on the Persian Gulf and has urged Arabs to seek a peaceful resolution of the gulf crisis "through all means." However Saudi officials were quick to assure their allies that the remarks were misinterpreted and were not an indication they were backing down on opposition to Iraq.

In comments to Arab journalists that were widely reported on Monday, Prince Sultan Ibn Abdel-Aziz, said in an apparent reference to Iraq's claims against Kuwait that "if a sister Arab nation has rights, we all agree these rights can be had, but not by force."

Asked about Iraq's demands for an outlet on the Persian Gulf, Sultan replied: "Saudi Arabia has said, and says now, that giving rights, including territorial brotherly concessions _ given willingly _ is a matter of pride for the Arab nation."

The comments by the prince, considered the official wielding the most influence with his brother King Fahd, marked the first time since Iraq's invasion of Kuwait that a ranking Saudi leader has so much as hinted at a territorial compromise with Iraq.

In response, Saudi authorities rushed to tell the United States and others that there was no change in the Saudi view that Iraq must heed the United Nations Security Council's demand for a complete withdrawal from Kuwait. Similarly, the Kuwaiti government in exile rushed to reaffirm its opposition to any compromise with Iraq.

Aware of the concerns generated by the reports of Sultan's remarks, the Saudi authorities in addition to replaying the full text of his comments, also broadcast a commentary in which Sultan was quoted as saying Saudi Arabia still insisted on the full withdrawal of Iraqi troops from Kuwait.

A Saudi commentator reported that Sultan said: "What I meant to say, is that Saudi Arabia was able through goodwill and good intentions to settle land disputes with Iraq and the United Arab Emirates. However, when it comes to aggression on Kuwait, the Saudi Arabian kingdom insists on the reinstitution of the legitimate Kuwaiti authority under the leadership of the emir of Kuwait and the full withdrawal of Iraqi troops."

Iraq may free more hostages

Hundreds of foreign hostages in Iraq, including American, British and French men who are part of a "human shield," may gain freedom in coming days in an apparent effort by Iraqi President Saddam Hussein to weaken the wall of international opposition isolating his country.

During a meeting Sunday with a delegation from the U.S. Iraqi-American Friendship Foundation, Hussein promised to release an undetermined number of sick and elderly Americans, group president Salim Mansour said Monday.

It was not clear when they might be released. The State Department had no comment.

The Iraqi government also was expected to release by today a list of the sick and elderly British citizens promised their freedom after a personal plea by Edward Heath, the former British prime minister who went to Baghdad during the weekend to seek their release.

The possibility of help came too late for one British hostage, 62-year-old Ron Duffy, whom the British Embassy in Baghdad said died on Monday after a heart attack.

In another development, Hussein indicated he is willing to release all detained Frenchmen.

Small groups of German, Spanish and British citizens were released last week after anti-war activists made humanitarian appeals in meetings with senior Iraqi officials similar to Heath's.

Although such gestures have meant freedom for a growing number of Europeans and Americans, the Iraqi leader declared that these piecemeal releases do not signal any shift away from his tactic of holding Western and Japanese men as insurance against a U.S. bombing attack. Up to 8,000 people, including hundreds of Americans, have been prevented from leaving Iraq and Kuwait.

Crude oil price drop is record

Crude oil prices plunged a record $5.41 a barrel in heavy trading Monday on a combination of Middle East peace hopes, technical trading factors and a report of an apparition appearing to Saddam Hussein in his sleep.

The drop in the November contract for light, sweet crude oil to $28.38 per barrel marked the biggest single-day drop since futures contracts began trading on the New York Mercantile Exchange in 1983. The previous record was a $4-a-barrel decline on Aug. 17.

But the sudden erosion of the so-called "war premium" may not show up at the gas pump anytime soon. Analysts said it would take anywhere from three to 14 days for price movements to be passed along to consumers, presuming the downward trend continued.

Analysts cautioned that Monday's decline might have been exacerbated by the expiration of the November contract. Activity typically is volatile as dealers try to settle their accounts ahead of the expiration of a futures contract, because the contract commits them to either either take delivery of the commodity or settle the account in cash.

Oil prices began tumbling in Europe's energy pits and opened sharply lower in New York as markets reacted to comments by Saudi Arabian Defense Minister Prince Sultan, who suggested that Arab countries were willing to grant Iraq "all its rights."

Traders pushed prices lower on the belief that this development might lead to a peaceful resolution of the gulf crisis.

Unconfirmed rumors continued to tweak the market. One had Iraq pulling back its troops. A more outlandish report appearing in a Kuwaiti newspaper said Hussein was inclined to withdraw from Kuwait because the prophet Mohammed instructed him to do so in a dream.

"Between Saddam's dream and increasing supply and declining demand, the market is weaker than the Oakland A's," said Peter Beutel, an analyst with Pegasus Econometric Group Inc. of Hoboken, N.J.

In other news affecting oil prices, the Organization of Petroleum Exporting Countries said oil production in September was 22.7-million barrels a day, or about 200,000 barrels a day higher than previous estimates, according to a Cyprus-based newsletter.

Production at that level fully compensates for the shortfall created by the loss of Iraqi and Kuwaiti crude.

Prices for refined petroleum products traded on the Mercantile Exchange also plummeted. The November contract for wholesale unleaded gasoline, which lost 9.22 cents last week, fell 11.41 cents to settle at 76.50 cents a gallon.

The contract for home heating oil for current delivery declined 12.42 cents to settle at a 75.98 cents a gallon after losing nearly 17 cents last week. The November contracts for refined products do not expire until next week.

Iraqis have U.S. missiles

Iraqi military forces captured some of Kuwait's cache of U.S.-made Hawk anti-aircraft missiles and apparently are trying to learn how to use the weapons, Defense Secretary Dick Cheney said Monday.

A State Department spokeswoman in Washington said most of Kuwait's Hawk missiles were captured in Iraq's invasion of Kuwait.

The United States had sold Kuwait five Hawk batteries and more than 150 Hawk missiles. The Hawks are said to be superior to other anti-aircraft weapons in the Iraqi arsenal.

"We don't know precisely how many they have. We do know that the Iraqis captured some Hawk missiles that the Kuwaitis previously acquired and they now have them," Cheney told journalists.

"Whether or not they're able to make them function or not at this point, we don't know."

Many U.S. and allied military aircraft in the gulf region have no ready means of protection against the Hawks, the Washington Post cited U.S. officials as saying.

Iraqi ship jettisons cargo

An Iraqi vessel apparently dumped its cargo overboard rather than have it seized under U.N.-approved economic sanctions, U.S. military officials said Monday.

After a 48-hour chase that included three rounds of warning shots, sailors who boarded the vessel al-Bahar al-Arabi in the Gulf of Oman on Monday found "no prohibited cargo," a Navy spokesman said.

On Saturday in the Persian Gulf, crews from the destroyer USS O'Brien reported the 5,700-ton Iraqi ship was carrying steel pipe and plywood, which are blocked by the embargo.

"We don't know what happened to it, and can only assume that it was dumped overboard sometime between the first boarding and the second boarding," said Cmdr. J.D. van Sickle, a Navy spokesman.

After the second inspection, the ship was allowed to continue, he said.

The ship's captain, who was not identified, originally said his destination was Aden, Yemen, at the southern tip of the Arabian peninsula. Yemen is among a handful of countries supporting Iraqi President Saddam Hussein's Aug. 2 invasion of Kuwait.

About 12 nations have sent ships to the region to enforce the U.N. embargo.

According to the U.S. military, more than 2,500 commercial ships have been challenged, 250 boarded and about a dozen diverted on grounds their cargo was Iraq-related.

_ Information from the Associated Press, Reuters, the Washington Post, New York Times and Cox News Service was used in this report.

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