Kuwait's crown prince, showing Secretary of State James Baker the devastating effects of Iraqi occupation, asserted Saturday that stability would elude the region as long as Saddam Hussein retained power in Iraq.

Even as Baker visited here, U.S. intelligence officers disclosed that American troops in the Iraqi desert had been providing weapons and ammunition to the Iraqi insurgents whose challenge to Saddam Hussein has mushroomed into fighting in as many as two dozen cities.The first evidence of U.S. assistance for the rebels, reported by The Associated Press, coincided with growing indications that Iraq's neighbors - Iran, Syria and Saudi Arabia - are actively encouraging or assisting the rebels.

From the Kurdish north to the southern port city of Basra, the insurrection has intensified. Thousands of rebels and civilians may have been killed, many of them by Iraqi artillery, tanks and helicopter gunships, according to refugees fleeing Iraq, opposition leaders in exile and U.S. intelligence sources.

Some opposition leaders in exile also charged that Iraq had already used mustard gas to quell the unrest, and Baker said the United States had evidence that Iraq, which used chemical weapons against Kurdish civilians in 1988, might be prepared to employ the weapons again.

The New York Times reported in Sunday's editions that the Bush administration had drawn up plans to launch air strikes against any Iraqi military units that used chemical weapons.

"It's not an exaggeration to say that as long as Saddam is in power, the whole region will not witness any sort of security and stability," Sheik Saad Abdullah al-Sabah said.

Baker, conducting the first tour of the ravaged Kuwaiti capital by a senior U.S. administration official, told the crown prince that an international arms embargo against Iraq had to be maintained, according to State Department officials who briefed reporters.

There were several reports last week that rebels were desperate for arms and ammunition to battle the Iraqi army troops who have poured into rebel enclaves in large numbers. The rebels reportedly pleaded with American troops for such supplies.

U.S. military officers acknowledged Saturday that reports last week that government troops had quashed the rebellion in Basra, Iraq's second-largest city, appeared to have been premature. On Friday, U.S. officials said the insurrection appeared to have spread to 24 Iraqi cities, including the capital, Baghdad.

Iraqi Shiite leaders living in exile in Syria, meanwhile, said Shiite residents of some of Baghdad's poorest neighborhoods began anti-Saddam rioting after Friday's midday prayers. They said Iraqi troops fired into the crowds, killing several people.

In the north, Kurdish rebel groups claimed 5,000 government troops had defected or been captured. Their forces, they said, had captured six cities, including an ammunition depot, a missile installation and an unspecified number of Iraqi helicopter gunships.

In the past two days, ranking Iranian and Syrian officials have expressed support for the insurgency.

Kuwaitis restate election pledge

Baker, in his visit to Kuwait and in a meeting in Taif, Saudi Arabia, with Kuwait's emir, Sheik Jaber al-Ahmed al-Sabah, was assured by the Kuwaitis that they intended to honor their commitment to hold free elections and restore the Parliament.

Both the emir and the crown prince, in separate remarks to reporters, also said Kuwait would consider recognizing Israel if Israel was willing to abide by U.N. resolutions. That was apparently a reference to resolutions calling on Israel to withdraw from the West Bank, Gaza Strip and Golan Heights, territories Israel has occupied since 1967.

Iraqi media denounce rebels

Inside Iraq, where there has been almost no public mention of the instability, the country's two major newspapers Saturday denounced the rebels and accused the West of seeking to destabilize the country.

"The aggressors want to sow the seeds of unrest to achieve what they failed to achieve in the war," the daily al-Thawra said in an editorial.

There were other signs, too, that Saddam Hussein's government is scrambling to stay ahead of the rebellion. With the army shattered by the six-week war and the desertions, the government Saturday continued a series of steps designed to mollify some soldiers, coax others to return to their units and boost the pay of still others, including those in the elite units charged with putting down the rebellion.

Kurds say they hold 6 cities

In the north, the Patriotic Union of Kurdistan, one of two major Kurdish rebel groups, said the rebels controlled six cities, including the provincial capital of Suleimaniyah.

As the fighting continued, representatives of 17 disparate Iraqi dissident groups, from Shiites to Kurds to communists and exiled military officers, gathered in Beirut to plot a coordinated strategy for an insurrection that appears so far to have lurched between spontaneity and moderate outside direction.

There have been persistent reports that Saudi Arabia has covertly assisted the rebels. At week's end, Iran's president and Syria's vice president expressed strong support for the insurrection, and both Iran and Syria appear to be working to cement closer ties between the various Iraqi dissident groups.

Iraq's neighbors hope for coup

By most estimates, Iraq's neighbors hold out little hope that the insurgents can ever overwhelm Iraqi security forces. But they believe that continued violence might provoke the Iraqi military or even members of Saddam's ruling clique to remove him from office.

Syrian radio quoted Iraqi refugees Saturday as saying a gunman wounded Saddam in the hand in one of several postwar assassination attempts. There was no way of verifying the report carried by the state-run radio.

Basra oil plant ablaze

Tehran Radio, meanwhile, reported Saturday that Iraq's Republican Guard, while pursuing rebels with tanks, inadvertently set ablaze Basra's petrochemical plant. Burning fires from the plant blackened the skies over the Iranian port city of Khorramshahr.

The Iranian radio report said the revolt in Basra had intensified. Refugees fleeing southern Iraq reported heavy fighting around the Shiite holy cities of Karbala and Najaf, where they said Iraqi troops had committed brutal reprisals against rebels.

One traveler said of the situation in Basra: "It's a real massacre. The deaths are in thousands. The houses have been leveled."

Like other sources reporting on the rebellion, the traveler insisted on anonymity because of fear of reprisals against relatives and friends.

He said the Republican Guard was using T-72 tanks to demolish houses in which it suspected army deserters or civilian rioters are hiding.

Casualty toll unavailable

One issue in doubt is the casualty toll. By most estimates, hundreds and perhaps thousands have already been killed. But in Beirut, where the opposition groups are meeting, the Supreme Council for the Islamic Revolution in Iraq said 30,000 civilians had been killed and tens of thousands of others wounded in the revolt.