Diplomatic efforts redoubled Wednesday in a bid to avert a land war, but the pace of combat north of the Saudi border also accelerated. In one clash, U.S. forces said they smashed an Iraqi bunker complex and captured hundreds of prisoners of war.

Italy, which is part of the allied coalition confronting Iraq, endorsed a Soviet peace proposal Wednesday and disclosed some of its details.The Soviets asked that the plan remain private until Iraqi Foreign Minister Tariq Aziz delivered his government's response. President Bush has indicated the Soviet plan is unacceptable.

While the diplomatic wheels spun, preparations for a major ground offensive continued with some of the heaviest border skirmishes of the gulf war.

In one such clash Wednesday morning, one American soldier was killed and seven wounded, according to a U.S. command spokesman in Riyadh, Marine Brig. Gen. Richard I. Neal. U.S. forces took seven Iraqi prisoners in that fight, Neal said.

Elsewhere north of the Saudi border, Neal said, U.S. helicopters attacked an Iraqi bunker complex at about 2 p.m. Wednesday, destroying 13 to 15 bunkers and capturing 450 to 500 prisoners of war. Neal said huge Chinook transport helicopters were sent in to pick up the POWs.

Neal refused to say where either ground engagement occurred. He said he had no information on Iraqi casualties.

Iraq fired one Scud missile into Israel on Tuesday night, but Israeli officials said it was intercepted by Patriot missiles and destroyed. Neal said a U.S. F-15 fighter jet happened to be flying above the launch site at the time, and the pilot reported seeing the Scud blast through the clouds.

Later, Neal said, B-52 bombers were sent to attack the site, and crew members reported seeing a large secondary explosion, indicating they hit one or more missiles.

The allied air war also went on without letup. Baghdad was bombed for more than four hours beginning Tuesday night and lasting into the morning.

"Panicked Baghdad residents rushed to the streets to escape to the nearby villages by car, cart or carriage," Iran's Islamic Republic News Agency reported. It was the capital's second straight night of heavy bombing.

An Iraqi military communique claimed Iraqi troops near the Saudi Arabian border had repulsed a helicopter-backed assault by allied soldiers. It said the attackers suffered heavy losses in personnel and equipment but gave no further details.

There was no immediate word from allied officials on such an incident.

Aziz is expected to return to Moscow Thursday after consulting with Iraqi President Saddam Hussein in Baghdad on the peace plan Mikhail S. Gorbachev proposedin a Kremlin meeting on Monday. Soviet officials later said they didn't expect Aziz and added that he didn't necessarily have to come at all.

Valentin Falin, the head of the Communist Party's international department and former ambassador to West Germany, told reporters the Soviets were "waiting hour to hour" for a reply.

Aziz, who returned to Baghdad on Tuesday, has been traveling by car between Iraq and Iran and by plane between Iran and Moscow. He hasn't flown in Iraq because the allies have refused to guarantee him safe passage.

A senior Italian official said the plan calls for Iraq to begin withdrawing a day after a cease-fire goes into effect. It also pledges Iraqi troops would not be attacked while leaving Kuwait, said Nino Cristofori, an aide to Italy's prime minister.

The proposal has been widely reported to include a guarantee of non-interference in Iraq's internal affairs if Saddam relinquishes Kuwait.

Although Bush said he told Gorbachev the Soviet proposal "falls well short of what would be required," a spokesman for the Soviet leader said Wednesday that he didn't consider Bush's remarks to constitute rejection of the plan.

House Speaker Thomas S. Foley said Wednesday that if Iraq accepted the Soviet proposal, "I don't know how (Bush) could fail to accept it."

The Soviets, longtime Iraqi patrons until the Aug. 2 invasion of Kuwait, urged that the Baghdad government be given a chance to accept the Gorbachev plan and pull out of Kuwait.

China, too, called on Iraq to act swiftly. Iraq's deputy premier, Saadoun Hammadi, met Wednesday with Premier Li Peng during a surprise one-day visit to Beijing. The official Xinhua news agency said Li "urged Iraq to seize the opportunity and take immediate and concrete measures and actions to withdraw its troops from Kuwait."

Saudi Arabia's King Fahd was quoted Wednesday as saying no peace plan can succeed without an unconditional Iraqi pullout from Kuwait. He also said Iraq should pay war reparations to Saudi Arabia as well as Kuwait.

Peace efforts notwithstanding, the allies appeared unwilling to hold their fire unless Iraq were to commence the withdrawal from Kuwait demanded by the United Nations.

Defense Secretary Dick Cheney told Congress any pause in the war would allow Iraqi forces to regroup: "A cease-fire, a pause of some kind, would in fact be very dangerous from the standpoint of U.S. and allied force."

On the sandy battle lines in northern Saudi Arabia, skirmishes intensified as tensions heightened.

U.S. Army forces captured an abandoned Iraqi observation post on the high ground that could have alerted rear enemy divisions to an allied attack into Kuwait, officials said Tuesday.

"It appears as though they have given up (that section of) the border," said Maj. Karl Horst, a battalion operations officer. "We were expecting to fight to cross it. It makes it easy for us when we roll across. It's one less fight we have to do."

A British newspaper, The Independent, reported that allied tanks have made forays into Kuwait and attacked Iraqi positions there in the past two days.

Front-line allied troops grimly prepared for another fight: an Iraqi chemical attack. Military officials in Washington said they anticipate Saddam's forces will send off an airborne or artillery-fired chemical barrage in the event of a ground assault.

"It will be his final dirty trick," one Pentagon strategist said Tuesday. "We firmly believe he'll use it against the allies, sooner or later."