President Bush said Friday the conditions in the Soviet proposal to end the Persian Gulf war are "unacceptable," and he gave Saddam Hussein until noon Saturday to begin withdrawing his forces unconditionally from Kuwait or face an allied ground assault to drive them out.

He also accused Saddam of carrying out a "scorched-earth policy against Kuwait" in anticipation of a pullout, even as Iraqi Foreign Minister Tariq Aziz was in Moscow negotiating conditions for a withdrawal.Moscow said the allies "misunderstood" Soviet President Mikhail Gorbachev's plan revealed early Friday and reported progress in clarifying some "weak points" in the eight-point peace proposal (see box on A2).

Iraq, meanwhile, said allied forces already had begun the long-awaited ground assault. The United States denied the report, but the allies continued the air war without letup and border skirmishes persisted.

In Washington, Bush asserted, "The coalition will give Saddam Hussein until noon (EST) Saturday to do what he must do: begin his immediate and unconditional withdrawal from Kuwait. We must hear publicly and authoritatively (Iraq's) acceptance of these terms."

Bush said the Soviet proposal, "on the face of it, appears more reasonable" than previous plans to end the war, but he emphasized that it still lays down conditions, and Bush asserted, "Any conditions would be unacceptable to the international coalition" of 33 nations opposing Iraq.

"I have decided that the time has come to make public with specificity just exactly what is required of Iraq if a ground war is to be avoided," Bush said, adding that Saddam "risks subjecting the Iraqi people to further hardship unless the Iraqi government complies fully with the terms of the statement."

Bush said the previous 24 hours had been dizzying, including Saddam's speech in which he vowed to continue the struggle, followed by Aziz's positive response to the Soviet initiative.

"More importantly and more urgently," Bush said, "we learned this morning that Saddam has now launched a scorched-earth policy against Kuwait, wantonly setting fire to oil wells, anticipating perhaps that he will be forced to leave. Indeed, they're destroying the entire oil production system of Kuwait."

At the same time his envoy was discussing peace in Moscow, Bush said, "Saddam was launching Scud missiles" into Saudi Arabia.

The White House presented its analysis of the proposal to the allies, who are "very strong" in their support of the U.S. position, spokesman Marlin Fitzwater said.

In Moscow, Aziz and Soviet Foreign Minister Alexander Bessmertnykh met for 2 1/2 hours for a second round of talks to smooth out the peace plan, and Soviet Foreign Ministry spokesman Vitaly Churkin reported progress.

Churkin said the allies had misunderstood the eight-point plan presented after the first meeting. "(The eight points) are history already," he said. "Some progress has been made with these eight points as a point of departure.

"We think our efforts have not been in vain," Churkin said. "If they are going to be successful remains to be seen, but we hope so."Aziz already had given a "positive" response to the original initiative.

U.N. Security Council resolutions call for Iraq's immediate and unconditional pullout from the emirate he invaded Aug. 2, and Bush has refused to back down from that demand during the nearly 7-month-old Persian Gulf crisis.

Gorbachev's eight-point peace proposal, as announced early Friday, included a cease-fire, to be followed in two days by a "full and unconditional" Iraqi withdrawal from Kuwait within a "fixed time frame" and the release of all prisoners of war. The withdrawal would be supervised by a U.N. force from nations not involved in the war.

Lifting U.N. sanctions

Once two-thirds of Saddam's forces have withdrawn, U.N. economic sanctions against Iraq would be lifted, and once all Iraqi forces are out of Kuwait, all further U.N. sanctions against Baghdad, presumably including the one demanding reparations, would be lifted.

What the plan did not include was linking a withdrawal with settlement of the issue of a Palestinian homeland - a condition Saddam had previously insisted upon.

Don't attack, allies warned

Soviet presidential envoy Yevgeny Primakov warned the allies not to initiate a much-expected ground offensive at this stage of the talks.

"If this (ground) war starts today, the whole world will see that it is started under the conditions when the Soviet Union has attained its greatest achievement in attempting to find a political settlement of the conflict," he said.

"It is becoming clear that if at this moment the achievement is frustrated by the war, the reponsibility will be taken by those who begin it," Primakov said.

Air attacks continue

The U.S. Central Command in Riyadh, the Saudi capital, said allied air attacks continued overnight and that principal targets remained Iraqi front-line forces, units of the elite Republican Guard and airfields.

Saudi and U.S. military officials said Iraq fired three Scud missiles at Saudi Arabia Thursday night and one Friday, but all were either shot down by U.S. Patriot missiles or landed harmlessly in the desert.

The Central Command said allied jets on patrol over enemy territory observed the latest of the Scud launches, at 2:30 a.m. Friday, and "attacked immediately."

A senior U.S. military official who requested anonymity said three Scud launchers and one missile were destroyed. He said five more launchers and three missiles were listed "possibly destroyed."

U.S. casualties climb

American casualties mounted, meanwhile, with the loss of seven soldiers in the crash of a UH-60 Blackhawk helicopter on a medical evacuation mission. The aircraft went down Thursday during bad weather in western Saudi Arabia.

It was the deadliest non-combat air accident of Operation Desert Storm and raised to 22 the number of airmen killed in non-combat incidents since the war began on Jan. 17.

Two other helicopters and an F-16 warplane also were lost. Two Americans were killed in the crash of one of the helicopters, an OH-58 scout returning from combat operations. Nineteen Americans are listed as killed in action and 30 as missing. Nine are confirmed prisoners of war.

The U.S. command said warplanes launched 1,000 sorties Thursday against targets in southern Iraq and Kuwait.

Artillery pounds Iraqis

Associated Press correspondents reported from different sectors along the northern front that big allied artillery guns relentlessy hammered targets in Iraq in one of the heaviest shellings since the war began.

More than 70 British artillery pieces, batteries of U.S. rocket launchers and helicopter gunships bombarded Iraqi guns and armored vehicles.

Col. Jim Gass, a U.S. Army artillery commander, said Iraq's return of artillery fire has been sporadic and inaccurate.

Apache commander relieved

The commander of a battalion of Apache helicopters was relieved of his post for mistakenly firing on two U.S. armored vehicles Sunday, killing two American soldiers and wounding six.

Officers in the 1st Infantry Division said Army Lt. Col. Ralph Hayles, of Corpus Christi, Texas, had violated military guidelines prohibiting commanding officers from personally engaging enemy forces.

U.S. helicopters returned Thursday to a smashed Iraqi bunker complex where American forces captured more than 400 prisoners a day earlier. Fourteen more Iraqis surrendered.

A 17,000-man Marine amphibious force was poised in the Persian Gulf ready for action should the allies go ahead with a ground offensive, an AP correspondent reported from its command ship, the USS Nassau.

U.S., Iraqi patrols skirmish

American ground forces crossed into Iraq and Kuwait on reconnaissance patrols, said Marine Brig. Gen. Richard Neal, the chief U.S. command spokesman.

"U.S. and coalition forces have on occasion crossed the border, and it's a continuation of our active campaign of aggressively patrolling, reconnaissance and counterreconnaissance effort," Neal said.


(Additional information)

Main points of plan

Following are the main points of the Soviet-Iraqi peace plan:

1. Iraq agrees to a "full and unconditional" withdraw from Kuwait.

2. The withdrawal would begin two full days after a cease-fire.

3. The withdrawal will take place in a fixed time frame. However, the time frame was not specified.

4. After the withdrawal of two-thirds of all Iraqi forces from Kuwait, the U.N. embargo on trade with Iraq would be lifted.

5. All remaining resolutions applying to Iraq's seizure of Kuwait would be lifted after all Iraqi forces have pulled out. (The resolutions include the restoration of Kuwait's pre-invasion government and the payment of reparations by Iraq.)

6. All prisoners of war would immediately be released after the cease-fire.

7. Countries not directly involved in the conflict would monitor the withdrawal of forces. Such countries would be designated by the U.N. Security Council.

8. The plan's details are still being worked out and are to be made public Friday to U.N. Security Council.


Coalition demands

At noon Friday, U.S. officials summoned an Iraqi diplomat and presented him with a list of requirements for a cease-fire. The White House listed these conditions:

- Withdrawal from Kuwait must begin Saturday and be complete within a week.

- All Iraqi forces must be removed from Kuwait City within 48 hours of the beginning of the withdrawal.

- All prisoners of war and third-country civilians must be released within 48 hours.

- Iraq must remove booby traps and mines from oil facilities and other areas.

The allies, for their part, pledged not to attack retreating Iraqi forces.