As allied forces tried to persuade more Kurds to return home to northern Iraq Monday, British and Iraqi soldiers exchanged gunfire at one of Saddam Hussein's summer palaces in the area, British military officials said.

No British casualties were reported, and there was no word of Iraqi casualties in the shootout near the northern city of Sirsenk, well within the allied "safe haven" zone intended to protect the Kurdish refugees.The British officials said the incident involved a British patrol and several Iraqi soldiers inside the palace complex, which is surrounded by 12-foot walls. It is five miles east of Sirsenk airfield, where the British marines have their headquarters.

The shootout was reported by the British Defense Ministry and confirmed by the British Embassy in Ankara, Turkey.

The first Iraqi gunfire at the Royal Marines patrol took place at about 10:30 a.m. local time, when three rounds were fired from the palace complex in front of a patrol, said James Gee, a spokesman for the British Defense Ministry at Silopi, Turkey.

At 1:13 p.m, one round was fired at the standing patrol from the same area, and it was answered by one round, Gee said.

At 1:20 p.m., two men emerged from a block house on the palace wall and began to fire long bursts of automatic fire at the patrol. Fire was returned and the two men dropped from sight, he said.

A bit later, two more shots were fired at the patrol. No further fire was returned, Gee said.

Under an agreement with the allies, a small number of Saddam's troops were permitted to stay to guard the palaces and villas Saddam built in the mountain valley.

In another development Monday, the United Nations today took nearly 130 tons of wheat and other supplies to a provincial capital controlled by Iraqi forces, as the allies sought to persuade Kurdish refugees to return from mountain camps.

Plans call for U.S. and other allied troops to eventually leave the area, turning over the entire relief effort to the United Nations and other agencies. Who will protect the Kurds after the allies go, however, worries the refugees.