An American jet fighter shot down an Iraqi Su-22 warplane near Saddam Hussein's hometown of Tikrit in central Iraq Wednesday.

It was the first reported air engagement between U.S. and Iraqi forces since fighting ceased in the Persian Gulf war Feb. 27.In Washington, White House spokesman Marlin Fitzwater said the incident did not mean a resumption of hostilities, even though Iraq's attempt to fly fighter aircraft was a clear violation of terms set down in the informal cease-fire.

Meanwhile, Kuwait's government abruptly resigned Wednesday amid mounting complaints it is failing to meet the postwar needs of its people ranging from providing running water to personal safety.

"The government has resigned, yes," Planning Minister Suliman Mutawa told reporters. "Obviously, assuming there is going to be new thinking, we need new thinkers."

Mutawa said Kuwait's prime minister, Crown Prince Saad Al-Sabah, informed the Cabinet Tuesday night that he planned to submit the resignation of his 22 ministers to the emir, Jaber Al-Sabah.

Mutawa said he was unaware if the emir had accepted the resignations yet but said the ministers would likely remain in an acting capacity until replacements are sworn in. He said that could take place in days.

Residents complain that the government, while in exile in neighboring Saudi Arabia during seven months of Iraqi occupation in Kuwait, failed to prepare for the prompt resumption of basic services.

In Washington, the Senate approved up to $15 billion to defray the cost of the gulf war and voted a ban on the sale of U.S. arms to coalition allies that have not met their financial pledges for the conflict.

The legislation was approved 98-1 Tuesday and sent to conference with the House but could run into trouble with administration concerns over language designed to slow the arms flow to the Middle East.

Sen. Mark Hatfield, R-Ore., voted against the bill, and Sen. Bill Bradley, D-N.J., was absent.

The $15 billion in U.S. taxpayer money is part of a $42.6 billion financing package for the war, with foreign contributions making up the difference. None of the American money can be used if foreign funds are available.

The bill includes a ban on the sale or transfer of arms to any nation that pledged to contribute money but has not yet paid its share.

Lt. Cmdr. David Knox, spokesman for the U.S. Central Command in Riyadh, said the Iraqi jet fighter was one of two planes that were detected by an American AWACS early warning plane. The other Iraqi fighter "landed on its own after the engagement," Knox said.

He said a U.S. Air Force F-15C jet fighter shot down the Iraqi Su-22 near Tikrit, 110 miles north of Baghdad.

"The Iraqi attempt to fly these two fighter aircraft is a violation of terms agreed with Iraqi military officials during talks at Safwan, Iraq, on March 3," Knox said in a telephone interview.

In a second round of cease-fire talks on Sunday, allied commanders met with Iraqi commanders and warned them they cannot move their warplanes in Iraqi for any reason.

Saddam is battling ethnic Kurds in northern Iraq and Shiite Muslims in the south. Thousands of people have been reported killed.

U.S. Maj. Gen. Robert B. Johnston warned the Iraqis that the use of warplanes would be a clear violation of the terms of temporary cease-fire set by Gen. H. Norman Schwarzkopf at the first round of talks two weeks ago in Safwan, near the Kuwait-Iraq border.

President Bush was informed by aides Wednesday morning that "we did shoot down an aircraft . . . an Iraqi plane," said Fitzwater.

He said that the single incident did not represent a resumption of the war against Iraq.

"We're not resuming hostilities. We're not re-engaging," he said. "We're simply proceeding with the cease-fire as we outlined it to the Iraqis."

At the weekend cease-fire talks, the Iraqis requested they be allowed to fly some of their aircraft. Secretary of State James A. Baker III said Sunday that the U.S. government had refused that request.

In other developments:

- A prosecutor said Kuwait will seek to hang most of the 600 Iraqi, Palestinian and other prisoners now being held for alleged war crimes. The government will also try in absentia hundreds of Iraqi officers who fled Kuwait when the allied forces closed in, said Khalid al-Mudaf, an undersecretary at the Ministry of Justice who will head the prosecutions.

Allied officials have taken custody of three Iraqi prisoners whose names match individuals suspected of committing atrocities against Kuwaiti civilians, Pentagon officials said.

Officials said Tuesday they are awaiting positive identification before charging or arresting the men for violations of the Geneva Convention, which set legal standards of behavior during wartime.

- Kuwait announced it will reopen its banks on Sunday and issue new money to replace $2 billion of gold and currency looted by the Iraqis.

- Iran and Saudi Arabia announced Wednesday that they have agreed to restore diplomatic relations, ending a 3-year-old feud between the two titans of the Muslim world.