US in a bind over Iraqi use of poison gas against Kurds. Goal to maintain ties while decrying chemical weapons

The Reagan administration is walking a careful line on Iraq's alleged use of chemical weapons against Iraqi Kurds. But it faces strong congressional pressure to slap tough sanctions on Baghdad immediately.

Since last Thursday, the administration has publicly and privately condemned Iraq's use of chemical weapons against its Kurdish population. United States officials say they have ``incontrovertible evidence'' of ``massive use'' of chemical nerve agents against Kurdish guerrillas and civilians in recent weeks.

Iraq ``categorically'' denies the charges, Iraq's minister of state for foreign affairs said Friday in Washington. Thousands of Iraqis paraded though Baghdad yesterday, denouncing the US bill. ``No to intervention in our affairs,'' read one banner in both Arabic and English.

US officials say they hope to preserve US-Iraqi relations, while preventing further use of these weapons.

``We're not shutting the door on Iraq. That would be throwing the baby out with the bath water,'' says a ranking US official. ``Nobody here supports the use of chemical weapons. We know the Iraqis have used them and may be disposed to use them again. But the best way to change a government is by having a relationship with it, not by walking away.''

This official and others are alarmed by the Senate's unanimous passage of a very tough sanctions bill Friday. The bill would immediately cut off all US credit to Iraq, ban sales of sensitive technology and any US economic or military aid, bar the purchase of Iraqi oil, and require the US to oppose loans from international banks to Iraq.

The proposed sanctions could be waived by the President if he certifies that Iraq is not committing ``genocide'' against the Kurds and has given assurances it will not again use chemical weapons.

The bill's congressional sponsors say Iraq is committing a crime against humanity and the US must act boldly to stop it. Administration officials, however, worry that the bill is too much, too soon and could reduce Washington's ability to influence Iraq. The administration is not trying to defend Iraq and fully shares congressional urgency, officials stress.

``We made quite clear to Iraq over a number of months that we believed it was intolerable to use chemical weapons,'' says a key official, ``but they continued to do so.'' Not only did the latest incidents kill and injure thousands of Kurds, he says, but they reinforced the impression among other countries that chemical weapons could be the ``magic answer'' to their defense needs.

``We couldn't ignore this danger,'' the official explains. Secretary of State George Shultz gave them a ``very stiff'' message last Thursday, warning that relations would suffer greatly if chemical weapons were used again.

The ``most effective approach'' to this problem has to be multilateral, says a well-placed regional specialist. US pressure on Iraq will have the most impact, if reinforced by similar presentations from others, he says. Those approaches will have greater chance of success, he adds, if attention is directed at addressing the broader problem of chemical weapons proliferation, rather than focusing on Iraq alone.

``We have to try to turn the justifiable outrage over the attacks on the Kurds into something positive,'' says this official. ``If we address this as a multilateral problem, if we look at Syria, Libya, and Iran as well as Iraq, maybe we can set up some effective firebreaks.''

The US is talking to its allies to work out parallel approaches to Iraq and to energize them on the broader problem, US officials say.

US-Soviet talks on missile and chemical-weapons proliferation are already slated for later this month. US officials strongly hint that a US initiative on chemical weapons is under consideration. President Reagan may address the situation when he speaks to the United Nations in two weeks.

The administration is not pushing for an admission of guilt from Iraq. But it wants Baghdad to publicly condemn the use of chemical weapons and give assurances that it won't use them again, officials say.

The key US goal, they say, is to make as clear as possible that any use of chemical weapons is unacceptable.

Ranking officials say it is in the US interest to improve ties with Baghdad. ``Iraq has emerged from the war with Iran as a major power in the region and very much moderated,'' says one. ``We want to be there to influence how that power is used and do what we can to encourage moderation. This is not the time for the US to abruptly walk away.''

While the Iraqis, like the Iranians, proved they can be cold and brutal during their eight-year war, another official says, ``these are not the flaming radicals of 10 years ago.''