President Bush Thursday took "one extra step" toward direct U.S.-Iraqi talks, proposing a meeting next week between Secretary of State James A. Baker III and Iraq's foreign minister. Iraq said it was studying the offer.

In Washington, Senate Majority Leader George Mitchell said Thursday that Congress has canceled its traditional January recess and that lawmakers have been told to "remain available" for consultations on the gulf crisis.Britain, meanwhile, Thursday ordered the expulsions of eight members of the Iraqi Embassy staff and the deportation of 67 other Iraqis, citing threats by Iraq to attack Western targets if war breaks out in the Persian Gulf.

The move raised the immediate possibility of retaliation against the six British diplomats remaining in Baghdad.

Several world leaders welcomed Bush's offer for talks, and oil prices plunged early Thursday to nearly their lowest level since the Iraqi invasion of Kuwait on Aug. 2. Light sweet crude oil for delivery in February was down 84 cents a barrel at $25.65 on the New York Mercantile Ex-change.

Bush's offer came a dozen days before the Jan. 15 U.N. deadline for Iraq to pull out of Kuwait or face a possible attack. Bush had previously said a top-level, U.S.-Iraq meeting on the crisis should occur by Jan. 3 to give Iraq time to withdraw from Kuwait by the U.N. deadline.

"I have decided to take one extra step," Bush told congressional leaders at a picture-taking session before a meeting with them Thursday. But he refused to take questions from reporters, who were then ushered out of the room.

After the meeting, Mitchell, D-Maine, said Congress would cancel its January recess and lawmakers "will be advised to remain available on a day-to-day basis to be returned on short notice should that become necessary."

White House spokesman Marlin Fitzwater said Bush proposed a meeting between Baker and Iraqi Foreign Minister Tariq Aziz in Switzerland any time from Monday to Wednesday. But Fitzwater said the meeting would underscore the U.S. resolve to end the crisis with a complete Iraqi withdrawal.

"No negotiations, no compromise, no attempts at face saving and no rewards for aggression," Fitzwater said.

"What there will be if Iraq accepts this offer is simply and importantly an opportunity to resolve this crisis peacefully."

Fitzwater said the administration requested a response by Saturday.

Sen. Patrick Leahy, D-VT., told reporters he gathered from Bush's briefing that it was not a question on whether force would be used, "but the question of when."

In Baghdad, U.S. Charge d'Affaires Joseph C. Wilson IV made his first contact with Iraqi officials since Dec. 18, speaking to them about the proposed Baker talks. "I met a Foreign Ministry official but have no response yet," said Wilson, calling the atmosphere of the meeting "very good."

Iraqi officials said the proposal would be discussed later Thursday or Friday.

"We have a new American proposal, but it is too early to comment. We are studying it," an Iraqi Foreign Ministry official said in Baghdad.

In London, Prime Minister John Major and Jordan's King Hussein Thursday welcomed the Bush offer. "This is a good step and a very important step, and I hope it will bring a peaceful resolution to the crisis," said Hussein, who has tried several times to help resolve the 5-month-old gulf standoff.

Germany's foreign minister, Hans-Dietrich Genscher, said in a statement that Bush's move shows "the United States is trying everything to achieve a peaceful solution." U.N. Secretary-General Javier Perez de Cuellar called it "something positive" and expressed hope that world leaders would intensify diplomatic efforts ahead of the Jan. 15 U.N. deadline.

The Bush offer came amid several European, Arab and Asian peace initiatives.

An adviser to French President Francois Mitterrand arrived in Baghdad Thursday, and Iraqi officials said he would meet with Aziz. The adviser, French lawmaker Michel Vauzelle, said his visit was a private one.

Egyptian President Hosni Mubarak arrived in Libya Thursday to meet with the leaders of Syria, Libya and Sudan on the gulf crisis.

Officials from Iran, Turkey and Pakistan planned to meet Thursday in Islamabad. The European Community was to discuss the gulf crisis Friday, and Hussein is visiting Major and other European leaders in advance of the meeting.

Baker will be traveling abroad next week for a round of meetings with allies in the anti-Iraq coalition before the U.N. deadline.

Bush telephoned British Prime Minister John Majors and Mitterrand early Thursday morning regarding the proposed Baker-Aziz meeting and cabled members of the gulf coalition Wednesday evening. All were supportive, Fitzwater said.

The Bush administration is backing a peace effort by the 12-nation European Community but has said that any plan by Iraq "must comply in full" with U.N. demands for a complete pullout.

The eight Iraqi Embassy staff members were given 24 hours to leave Great Britain, and their families must go within a week, the Foreign Office said.

Home Secretary Kenneth Baker deported 67 Iraqis living in Britain, saying he considered their presence "not to be in the public good for reasons of national security." They have until Jan. 10 to leave.

The Foreign Office spokes-woman said it was "clearly prudent to take all precautions" in case of a war in the gulf.

The Iraqi Embassy in London refused to comment on the British action.