Soviet President Mikhail Gorbachev said Monday the Persian Gulf crisis must be settled peacefully and indicated his envoy to Baghdad found signs Iraqi leader Saddam Hussein may be softening his position on the conquest of Kuwait.

Saddam, for his part, said in an interview that his talks with Soviet envoy Yevgeny Primakov were "wide-ranging, deep and very useful." Saddam also criticized President Bush for comparing the Iraqi leader to Hitler.In another development, an Iraqi Airways plane flew out of Kuwait with French hostages following Iraq's decision to free French citizens held in Iraq and Iraqi-occupied Kuwait.

Gorbachev, concluding a two-day meeting with French President Francois Mitterrand, told reporters in France that war in the Persian Gulf is unacceptable and suggested Saudi Arabia work toward an "inter-Arab" solution to the conflict.

Primakov flew to Saudi Arabia from Baghdad Monday after an apparent failure to persuade Saddam to end his nearly 3-month-old occupation of Kuwait. But Gorbachev revealed his latest information from Primakov indicates Saddam appears to have softened his position.

"One sees signs showing that the leadership of Iraq could finally listen to good sense and the voices of the United Nations," Gorbachev said.

He said if Arabs find a solution among themselves, then "the Iraqi leadership would be more ready to accept that."

"Saudi Arabia is close, a neighbor, and has certain relations with Iraq. It could take an initiative, as well as other countries," Gorbachev said. "There are inter-Arab mechanisms. They must act."

Gorbachev said, however, there is no question of the U.N. Security Council breaking ranks, and he termed the Aug. 2 Iraqi invasion of Kuwait as "adventurism."

Primakov, having arrived in Saudi Arabia, was expected to speak with Saudi King Fahd and other officials about Gorbachev's peace proposal, Arab radio stations said.

Some Arab newspapers had described Primakov's mission as a "last chance for peace," and the U.N. Security Council delayed a motion to brand Iraq a war criminal to give Primakov time to talk to the Iraqi leadership.

Primakov also spoke in Baghdad late Sunday with Iraqi Foreign Minister Tariq Aziz and Palestine Liberation Organization leader Yasser Arafat.

Egypt's Middle East News Agency quoted Soviet sources as saying Primakov discussed the continuing plight of some 3,000 Soviet nationals in Iraq.

Neither Baghdad nor Moscow has described the Soviets as hostages, and Iraq has allowed a number to be flown home. But Saddam has indicated the majority of Soviets must stay in Iraq to fulfill their contracts.

Saddam, aside from his positive assessment of his talks with Primakov, also told the Cable News Network he finds Bush's repeated comparison of him to Hitler somewhat hypocritical.

"Don't you think Mr. Bush would have committed an error in that description which he applied to a head of state with which he has had dealings and indeed he still has a resident embassy (in Iraq), with which he will still seek to conduct diplomatic dealings?" Saddam asked.

"He (Bush) will be closing the door for any dialogue or any possibility with that `Hitler-head-of-state' in search of solutions to the crisis," Saddam said.Mitterrand, whose remarks at the U.N. General Assembly linking the crisis with the Arab-Israeli conflict led Saddam to free French hostages, said he agreed with the proposal for an inter-Arab solution.

France also confirmed the remaining six diplomats at the French Embassy in Kuwait city will return with the hostages.

On Sunday, Saddam fired his oil minister, Issam Chalabi, and canceled gasoline rationing, the official Iraqi News Agency announced. It said Chalabi was replaced by Saddam's son-in-law, Hussein Kamel.

The New York Times, quoting diplomats in Baghdad, reported Saddam may have canceled the rationing because of complaints by Iraqi citizens.