Iraq freed 35 more allied POWs Tuesday and said they were the last. Civil strife apparently intensified in the country Tuesday, but U.S. officials said they didn't know if Saddam Hussein was in serious danger of being overthrown. Iraq's ruling Revolutionary Command Council Tuesday annulled the annexation of Kuwait, the official Iraqi News Agency said.

Fifteen Americans were among the POWs turned over to the Red Cross in Baghdad. On Monday, 10 allied prisoners, including six Americans, had been freed."We're hoping it's all of them that's left, but we don't know," said White House spokesman Marlin Fitzwater.

Bad weather, however, stalled what was to have been the first release of Iraqi prisoners by the allies. U.S. commanders said 294 Iraqis were to have been flown from Saudi Arabia to Baghdad Tuesday, but rain and high wind delayed the release until Wednesday.

U.S. military officials had earlier expressed anxiety that the turmoil in Iraq could slow prisoner exchanges. Tuesday, that turmoil was said to be growing.

The worst appeared to be centered around Basra, in southern Iraq, where remnants of Saddam's loyalist Republican Guard and anti-government troops faced off with tanks, U.S. military officials said.

Twenty-five journalists on their way to cover the unrest in Basra were reported missing. (See story on A2.)

In Basra, Republican Guard members operated checkpoints and exchanged machine-gun fire with the regular army, U.S. officials in Saudi Arabia said.

"You get the distinct impression that it's growing. There is a groundswell toward greater civil disobedience," one U.S. military official said, speaking on condition of anonymity.

"At the same time I wouldn't guess right now how it might turn out. The one thing that Saddam does best is handle things like this, although this could be his greatest challenge," the official said. Refugees reaching the Iraqi border town of Safwan, Iraqi opposition groups and the Pentagon said unrest was flaring in one city after another.

The Iraqi opposition, in separate reports from Iran and Syria, said the Shiite holy cities Karbala and Najaf fell into the hands of anti-Saddam rioters Monday evening.

A Kurdish opposition leader reported that Kurdish guerrillas seized Erbil, a provincial capital of about 900,000 people, and the nearby northern Iraqi towns of Salah al-Dine, Khabat, Daratow and Eskiklik.

And unrest was reported in Saddam's hometown, Tikrit, and in Nasiriyah, Shutra, Suq ash-Shuyukh, Amara, Samawah, Kut, Zubayr, Kumayt and Qalat Salih.

The reports could not be verified.

In announcing Tuesday's POW release, Baghdad Radio said Iraq has "completed the handing over of all prisoners of the countries that had taken part in military operations against Iraq."

The announcement did not mention the estimated 30,000 Kuwaitis that Kuwait says were abducted by Iraq. A Red Cross spokesman, Angelo Gnaedinger, said the agency and the Iraqi government were conducting discussions on the release of an undetermined number of Kuwaiti civilians.

In addition to the Americans, nine Britons, nine Saudis, an Italian and a Kuwaiti were freed Tuesday, the Red Cross said.

"I am crying with happiness," Giulio Bellini said after hearing of his son's release. Maj. Gianmarco Bellini was the pilot of an Italian Tornado fighter-bomber downed on the second day of the war.

After Monday's release, at least 54 allied servicemen were listed as missing and at least eight as POWs. Six Americans were among those known to still be held and 35 Americans were listed as missing.

The six American POWs freed Monday arrived at the U.S. hospital ship Mercy off the Persian Gulf emirate Bahrain after a 17-hour trip from the Iraqi capital via Jordan. The commander of U.S. forces, Gen. H. Norman Schwarzkopf, spent some time with them aboard the ship, military officials in Bahrain said.

Army Spc. Melissa Rathbun-Nealy, 20, of Grand Rapids, Mich., the only female POW of the Persian Gulf war, carried flowers as she arrived aboard ship. Once on deck, she and the others were able to telephone their families for the first time since their release.

"I'm pleased to report that they are all in good shape and in good spirits," said Air Force Col. Wynn Mabry.

The release of prisoners was among truce terms agreed to Sunday by allied and Iraqi commanders.

In announcing the annulment of the annexation, Iraq's Revolutionary Command Council said all decrees, laws and regulations involving Kuwait and issued after Aug. 2 were null, Iraq's official news agency reported.

The council said its action was in harmony with Iraq's agreement to adhere to all the conditions of U.N. Security Council Resolution 687. That resolution required Iraq to renounce its annexation, release all POWs and foreign citizens it is holding and to pay reparations.

The agency said that Iraqi Foreign Minister Tariq Aziz announced the decision in a letter sent to the president of the U.N. Security Council and to U.N. Secretary-General Javier Perez de Cuellar.

Aziz also said Iraq had agreed to return the gold, Kuwaiti currency, civilian aircraft and museum property it took from Kuwait.

In Kuwait, medical workers are still trying to determine the scale of atrocities committed by the Iraqi forces.

At one mortuary, Kuwaiti doctor Hisham Al-Nisef showed AP reporter Denis D. Gray corpses with skulls pierced by bullets, eyeless sockets, and a human torso slashed and singed.

"I want to cry for these people - blood, not tears," he said.