Secretary General Javier Perez de Cuellar said on Friday that Iraq was still demanding direct talks with Iran as a condition for a cease-fire.

After meeting Iraqi Foreign Minister Tariq Aziz for the first time in a week, the secretary general said: "They maintain their position on direct talks, which I have to respect, of course."He also disclosed that he was discussing a formula that might bridge the conflicting positions between Iraq and Iran, which has refused to enter face-to-face negotiations until a truce is in effect.

Aziz brushed past correspondents after a meeting with Perez de Cuellar that lasted just under an hour.

When asked about a report that Iraq was seeking Security Council guarantees that Iran would comply if the Iraqis accepted a truce, Ryadh Al-Qaysi, a senior member of the Iraqi delegation, ignored the questioner as he joined colleagues in the official limousine.

Sources close to the talks said that Perez de Cuellar was floating a three-point compromise to break the deadlock.

The formula is intended to bridge the gap between Iraq's insistence on direct talks before any cease-fire and Iran's view that a cease-fire must come first, with the possibility of face-to-face negotiations at a later stage.

The sources said Perez de Cuellar would ask both sides for assurances they are interested in implementing all parts of a year-old Security Council resolution, number 598, that provides not only for a cease-fire but also a comprehensive settlement of the 8-year-old conflict.

Iraq has expressed fears that Iran, which accepted the resolution only last month, wants only a temporary truce to regroup after recent battlefield losses.

The secretary general was also said to be seeking assurances the two belligerents would hold direct talks on a final settlement shortly after the start of a cease-fire.

The third point in the formula would be an announcement by the secretary general, before a cease-fire, that he had received these two assurances.

Perez de Cuellar's meeting with the Iraqi foreign minister was their fourth publicly announced session since talks began early last week. Their last was a week ago.

The secretary general held his seventh meeting with Iranian Foreign Minister Ali Akbar Velayati on Thursday.

He also planned a private briefing for Security Council members later in the day on a report he has received on the mechanics of a cease-fire.

The report was presented to him on Thursday by Lt. Gen. Martin Vadset of Norway, who recently led a team of U.N. military experts to Iran and Iraq.

Perez de Cuellar said he expected to give Council members a detailed written report on Vadset's mission next Wednesday.

Asked if he would be able to set a cease-fire date early next week, he said, without elaborating: "I think that next week I will be in a position to tell you something."