Palestine Liberation Organization Chairman Yasser Arafat said Saturday a ground battle in the gulf war was now inevitable, especially after President Bush's rejection of Iraq's conditional offer to withdraw from Kuwait.

Arafat, who arrived in Amman from Baghdad early Saturday after talks with President Saddam Hussein, said the Iraqis were ready to fight on the ground."(Saddam) said they are ready for that (battle)," Arafat told more than 100 reporters in a crowded conference room at a guest palace in Amman.

The PLO leader, who brushed aside his financial backers in the gulf Arab states such as Kuwait and Saudi Arabia to swing behind Saddam, warned that a ground battle would be very long and cause many casualties.

"Today is the second month, and the ground war will be very long and the casualties very high," he said.

Arafat accused the United States of intending to destroy Iraq by rejecting Baghdad's latest proposal.

"What President Bush said yesterday masks the real target of this dirty war against Iraq, which is to control the oil, destroy Iraqi power and infrastructure and downgrade Arab power," Arafat said.

The PLO leader said Bush's quick rejection of the Iraqi initiative surprised him.

"He is the president of the United States of America. He has no right to give a quick and direct response to any initiative without studying it first. It is his duty to at least study the Iraqi peaceful initiative with his experts first," the Palestinian leader said.

About his meeting with the Iraqi president the previous day, Arafat said Saddam was very confident.

"Before meeting (Saddam), I was worried about his condition," Arafat explained. "Believe me, he gave me more optimism and encouraged me more and more. He has his full confidence," Arafat said.

Answering questions on comments that the PLO was losing its credibility and was divided on the gulf conflict, Arafat dismissed such reports as "silly and meaningless," describing the organization as the "Phoenix bird" that can rise from flames.

"There will be no security, no peace and no stability in the region by jumping over the Palestinian issue: You have o-i-l (he spelled it out), and we have our PLO," he said.