Iraq said Monday it would never accept a cease-fire with U.S.-led forces in the gulf war.

"Iraq has not asked for a cease-fire after the first week (of the war) or the second week and will never accept a cease-fire except after achieving total victory," said Baghdad Radio, monitored in Cyprus.The government-run radio, in a commentary addressed to the Arab people, said: "O Arabs, this is your Iraq . . . a strong and confident Iraq."

It urged Arabs to rise up against their leaders, some of whom have contributed troops to the multinational force trying to oust Iraqi forces from occupied Kuwait.

Iraq said Sunday that its decision to fight the allies was irrevocable, and President Saddam Hussein urged his people to look forward to victory.

"The decision in Iraq to fight the aggressors and bury their evil designs is irrevocable," Baghdad Radio said.

Saddam urged people to be patient but assured them victory would come. His late-evening recorded address on the radio was largely inaudible outside Iraq.

The hard-line comments apparently dashed hopes for the peace bid launched last week by Iranian President Ali Akbar Hashemi Rafsanjani.

Meanwhile, Palestine Liberation Organization leader Yasser Arafat says Saddam can hold out for three years.

Arafat said in an interview published Monday in the Paris daily La Croix that the war would spread across the Middle East "and will be a veritable disaster for the whole world."

"The West said at the start he (Saddam) would last three days. He's already into his fourth week, and I believe his resistance will last at least three years," he said.

Arafat appealed to French President Francois Mitterrand to take a "big step" to end hostilities and rescue relations between Moslems and the Western world.