DATE=11/13/98 TYPE=CORRESPONDENT REPORT NUMBER=2-241628 TITLE=IRAQ / SITREP (L-ONLY) BYLINE=RICHARD ENGEL DATELINE=CAIRO CONTENT= VOICED AT: INTRO: DESPITE THE THREAT OF U-S AND BRITISH AIRSTRIKES, IRAQ CONTINUES TO VOW IT WILL NOT BACK DOWN AND ALLOW U-N WEAPONS INSPECTORS TO RESUME THEIR WORK IN THE COUNTRY. NEVERTHELESS, IRAQIS HAVE BEGUN TO PREPARE THEMSELVES FOR POSSIBLE MILITARY ACTION. RICHARD ENGEL IS FOLLOWING DEVELOPMENTS FROM OUR MIDDLE EAST BUREAU TEXT: IN BAGHDAD, THOUSANDS WAITED IN LINES FRIDAY TO STOCK UP ON GASOLINE. MANY SAY THEY FEAR AIRSTRIKES WILL DESTROY IRAQI OIL REFINERIES, DISRUPTING FUEL SUPPLIES. IRAQI NEWSPAPERS CONTINUE TO BLAME THE UNITED STATES FOR THE CURRENT SHOWDOWN. THE OFFICIAL "AL THOURA" NEWSPAPER IS QUOTED AS SAYING, "THE WORLD CALLS FOR DIALOGUE AND PEACE AND AMERICA SEEKS WAR AND AGGRESSION." WHILE IRAQI TELEVISION SHOWS IMAGES OF IRAQI PRESIDENT SADDAM HUSSEIN, SURROUNDED BY POP STARS SINGING HIS PRAISES, THE IRAQI MEDIA HAS NOT MENTIONED ANYTHING ABOUT A MEMORANDUM BY EIGHT ARAB STATES THURSDAY SAYING THAT IRAQ ALONE WILL BEAR THE CONSEQUENCES OF ITS ACTIONS. THE ARAB STATES STRESS THEY WANT A DIPLOMATIC SOLUTION THE CRISIS AND HAVE URGED MORE FLEXIBILITY ON BOTH SIDES. MEANWHILE FRIDAY, THE UNITED STATES CONTINUED ITS BUILD UP OF FORCES IN THE REGION IN PREPARATION FOR POSSIBLE MILITARY STRIKES. THE INCREASING TENSION HAS PROMPTED THE UNITED NATIONS TO RELOCATE ITS 50 OR SO REMAINING BAGHDAD PERSONNEL FOR SECURITY REASONS. THE UNITED NATIONS PULLED OUT MORE THAN 230 WEAPONS INSPECTORS ON WEDNESDAY AND THURSDAY. WHILE AN ATTACK ON IRAQ SEEMS IMMINENT, SOME IRAQI OFFICIALS HINT THEY MIGHT BE WILLING TO BACK DOWN, IF U-N SECRETARY GENERAL KOFI ANNAN BROKERED A DEAL. THE "AL THOURA" NEWSPAPER FRIDAY IS QUOTED AS SAYING, "THE INTERVENTION OF THE SECRETARY GENERAL IS REQUESTED ON THE BASIS OF HIS RESPONSIBILITY TO SOLVE THE PROBLEM THROUGH DIALOGUE, UNDERSTANDING AND PEACE." (SIGNED) NEB/RE/PCF/GE 13-Nov-98 10:00 AM EST (1500 UTC) NNNN Source: Voice of America .