The Iraqi move came amid a headlong rush toward what was expected to be an epic land clash between the allied and Iraqi armies arranged in southern Iraq, Kuwait and northern Saudi Arabia. Some commanders had suggested the battle could begin in a matter of weeks.

Iraq, which had mounted virtually no defense to the unprecedented allied air onslaught, had expressed eagerness for the ground confrontation. The allies indicated they expected to prevail, but agreed that a land clash would be a costly and bloody one.

In the month of warfare, allied aircraft attacked at the rate of a mission a minute, pounding Iraqi troops and wrecking the infrastructure that supported Saddam's military machine.

European financial markets rallied briefly today following Iraq's proposal, but the buying frenzy stalled as concerns surfaced over the terms of the pullout.

Oil prices fell more than $2 a barrel in London today immediately following the Iraqi announcement. But later, oil prices bounced back as investors awaited more news.

New Bombings

During the night, Baghdad was struck by the latest in a series of punishing raids, one of which damaged the headquarters of the country's ruling Arab Baath Socialist Party. AP correspondent Salah Nasrawi in Baghdad said the building was apparently vacannt at the time of the allied attack.

In recent days, allied forces have wrought deadly new weapons into the war zone. A U.S. military officer in the Saudi of Riyadh said today that fuel-air explosive bombs are being used. The devices detonate above the ground, spewing a fine mist of propane-like fuel that is ignited, creating a fireball that sucks up oxygen and incinerates everything within range.

Also at hand was the 15,000-pound "daisy cutter" bomb. Dropped from C-130s, it would be used to clear minefields in advance of a ground attack, said U.S. officers in Riyadh who spoke on condition of anonymity.