French President Francois Mitterrand on Monday condemned Baghdad for its invasion of Kuwait, calling Iraq a warlike state and stressing that "the sovereignty of Kuwait is not negotiable."

"How could we not be disgusted by the taking of thousands of hostages?" he asked the United Nations General Assembly. Iraqi Ambassador to the U.N. Abdul Al-Anbari sat silently listening."In order to prevent this anarchy and theory of might makes right, and avoid a situation in which one powerful person might be replaced by another, I can't find any other answer than the rule of law, of right," he said.

The French president expressed outrage over Iraq's raids on European diplomatic compounds in Kuwait on Sept. 14, when diplomats were detained temporarily and three Frenchmen seized.

Iraq made a belated apology Sunday, saying its soldiers had made a mistake. But Mitterrand said that was unacceptable, and noted that Iraqi President Saddam Hussein has not yet made any gesture or move to defuse the crisis.

French Interior Minister Pierre Joxe also brushed aside Baghdad's apology for the raid. "Excuses are fine," he said Monday on French radio, "but we're waiting for Iraq to let captive Frenchmen leave in a normal manner."

The Foreign Ministry estimates 290 French citizens are held hostage in Iraq and occupied Kuwait, along with about 1,000 Americans and several thousand other Westerners.

France's condemnation of Iraq came a day after Iraq's leaders, in their most bellicose statement yet, warned the U.S.-led forces arrayed against them that they would launch an all-out war before allowing the U.N. trade embargo to "strangle" the Iraqi people.

Countries hit hard economically by the gulf crisis can expect some help soon from the International Monetary Fund. The IMF Monday approved an accelerated effort to supply billions of dollars to help poorer nations hurt by the trade embargo against Iraq.

Iraq's anger at nations enforcing the sanctions boiled over Sunday. In a statement, it seemed for the first time to threaten a first strike, and mentioned Israel and Mideast oil fields as potential targets.

"America must realize clearly that it is pushing the entire region - in fact, even the whole world - to the brink of a bottomless abyss, from which the region will never see light for dozens of years," the Iraqi communique said.

Israelis `ready to respond'

Israel's foreign ministry warned Monday that it took the threat seriously and would not hesitate to respond fully to any Iraqi attack.

The Iraqi statement was signed by the Revolution Command Council and the ruling Baath Party but bore the rhetorical imprint of Saddam - studded with references to "poisonous wasps," "evil-doers" and "Zionist usurpers."

Last year, Iraq imported 75 percent of the food its people consumed. Now, an international trade embargo ordered by the U.N. Security Council in response to Saddam's Aug. 2 seizure of Kuwait has prompted the Baghdad government to begin rationing some staples.

Kuwaiti currency abolished

Iraq further consolidated its hold on Kuwait Monday by abolishing the country's currency, the dinar, and replacing it with Iraqi dinars. The Iraqi currency is not convertible on the international market.

The Security Council is expected to vote Tuesday on an eighth resolution punishing Iraq for refusing to relinquish Kuwait. The strictest yet, it would block all air traffic in and out of Iraq but planes carrying humanitarian aid.

U.S. not ruling out options

Secretary of State James Baker, interviewed Sunday on NBC-TV's "Meet the Press," was asked about the possibility of war.

"We have said many times we hoped there won't be," he replied, but added President Bush was not ruling out any options.

Diplomatic sources in Saudi Arabia said Monday that a break-in at Saudi Arabia's biggest oil company two weeks ago was believed part of an alleged effort by Jordanian and Yemeni diplomats to gather information about strategic Saudi installations for Iraq.

The sources, insisting on anonymity, said the break-in was one of a number of suspicious activities that led the Saudi government to demand Saturday that most envoys of Iraq, Jordan and Yemen leave Riyadh.

In another gulf-related development, South Korea said Monday that it would donate $220 million in military and humanitarian aid to multinational defense efforts in the gulf.

The amount falls short of the reported $450 million originally requested by the United States. South Korea said recent major floods have left it strapped for cash.

Meanwhile, Iran's official Islamic Republic News Agency said Syrian President Hafez Assad was extending his stay in Tehran.

Assad, Iraq's archenemy, came to Iran for talks that were to include inquiries about the Western hostages in Lebanon and Iran's intentions regarding the U.N. trade embargo against Iraq. Iran has hinted it might circumvent the sanctions.