Iraq is very close to becoming free of U.N. economic sanctions, the chief weapons inspector said today.

"The light at the end of the tunnel today is more visible than anytime," the U.N. envoy, Richard Butler, told reporters at the end of three days of talks with Iraqi officials.The U.N. Security Council will lift the sanctions imposed after Iraq's 1990 invasion of Kuwait only after Butler's U.N. Special Commission certifies that Iraq has no more illegal weapons. The embargo bars exports of oil, Iraq's main commodity, except in limited quantities to earn enough money to feed its people.

Butler said that his agency, UNSCOM, can finish its job in two months as long as Iraq fully cooperates with arms inspectors.

"I am very positive about it. It is good news . . . provided Iraq fulfills its promises and gives us access to materials and documents," he said.

The statements were his most positive yet on Iraqi disarmament and reflect an improvement in UNSCOM's relations with Iraq.

During his talks in Baghdad, Butler gave Iraq a list of obligations that he said it must fulfill to back claims that it has dismantled all banned chemical and biological weapons and long-range missiles.

But in a sign of flexibility, Butler said his experts are willing to accept that it was impossible to verify every Iraqi claim.

In the past, UNSCOM insisted it needed conclusive proof and rejected Iraqi arguments that it had unilaterally destroyed - without keeping any records - many weapons before the inspection process began.

"It may be that we won't ever get 100 percent verification where physical parts have been torn apart and dispersed," Butler said.