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Streets of Basra reportedly littered with the bodies of 5,000 people, A2.The continuing unrest inside Iraq is delaying the release of thousands of detained Kuwaitis whose return is key to ending Persian Gulf hostilities.

The unrest has delayed one of the key requirements of Iraq by the coalition when it agreed to stop firing in the gulf war - the release of thousands of detained Kuwaiti citizens."We are sure the armed forces of Iraq have not been able to control the situation, especially in the northern part of the country," Kuwaiti Crown Prince Saad Al-Sabah told a U.S. congressional delegation in Kuwait City. "As a result of the trouble in Iraq, they have begun to delay releasing (the rest of) our people."

So far about 1,300 Kuwaitis have been repatriated, but thousands more remain unaccounted for. Kuwaitis have urged the United States and Britain to force Saddam to release their friends and relatives.

Meanwhile, President Bush told members of Congress Tuesday there is no major holdup in bringing troops home from the Persian Gulf and promised to clarify how internal strife in Iraq might affect continued U.S. military presence in the region.

House Speaker Thomas Foley said Bush assured lawmakers with regard to the U.S. troops that, "Reports that there was a major holdup on their return home are not true. They are in fact coming home steadily."

Bush had said over the weekend that Iraq's use of helicopters to put down internal rebellion could complicate the implementation of a permanent cease-fire.Sen. John Warner, R-Va., one of several lawmakers who met with Bush Tuesday morning, said he asked the president just what he meant by that, whether he intended to retaliate against Iraq if it uses chemical weapons against anti-government rebels.

Warner said the president was not definitive on the subject but promised to make clear his intentions in the future.

Inside Iraq, troops loyal to Saddam have begun deploying Soviet-made FROG surface-to-surface missiles against a strong insurgency in northern Iraq, Iran's official Islamic Republic News Agency said Monday. Quoting Iraqi refugees, the news agency said many people were killed or injured.

IRNA said Iraqi government troops used napalm in attacks on Kurdish rebels, including those battling in or near the oil city of Kirkuk, about 200 miles north of Baghdad.

State Department spokesman Richard Boucher said "heavy fighting" raged between government forces and Kurdish dissidents.

Boucher noted, "Fighting is also continuing in the south along the lower Tigris and Euphrates rivers and in the vicinity of the Shiite holy cities of Najaf and Karbala."

IRNA said the uprising in the south was spreading and a large number of people were wounded in napalm attacks. At least one Western journalist, who left Tehran on Sunday, corroborated the reports of napalm attacks, saying he saw Iraqi victims being treated in a Tehran hospital.

In other developments:

- A U.S. Navy captain said Tuesday that Iraqi mines almost cut his guided missile cruiser in half during the Gulf War.

"We'll never know just how close it came to breaking in half," Capt. Ted Horntz said aboard the Princeton during drydock repairs to patch large cracks in its superstructure.

He disclosed for the first time how close the Aegis-class cruiser came to what could have become the U.S.-led alliance's biggest disaster of the war.

The blasts from two "influence" mines, which detonated within two seconds of each other as the Princeton sailed close to Kuwait Feb. 18, had nearly split the hull in two.

"Mines are one enormous threat," Horntz told reporters, adding that Western warships patrolling the Persian Gulf remained at risk.

- The chairman of the Senate Appropriations Committee called on the Senate Tuesday to halt arms sales to nations that have not delivered on their pledges to help pay for the war.

Sen. Robert Byrd, D-W.Va., made his remarks as the Senate moved toward passage of a measure that would provide $42.6 billion to pay for the war with Iraq. Up to $15 billion of the costs would be borne by U.S. taxpayers, and the rest by expected foreign contributions. The arms-sale ban was contained in the war-financing measure.

The Senate also scheduled debate on a separate, $5.2 billion bill that pays assorted other costs, ranging from aid to Israel and Turkey to getting extra K-9 police teams for the Capitol.

- Iran and Saudi Arabia agreed to resume diplomatic relations after a break of more than three years, IRNA said.

- In what was considered a major policy change, Palestine Liberation Organization Chairman Yasser Arafat said he would accept a "direct dialogue" with Israel if it is conducted under United Nations auspices; Israeli Prime Minister Yitzhak Shamir was not impressed, saying he would "absolutely not negotiate" with the Palestinian leaders who met with Baker, and he rebuked a member of his Cabinet for suggesting that Israel would consider territorial concessions to Syria.

- Ramadan, the Islamic holy month of fasting, is being observed in war-blighted Kuwait without the traditional celebrations and night-long revelry. "Most Kuwaitis are licking their wounds, mourning their dead, looking for missing persons," one Kuwaiti explained. As Ramadan began on Sunday, Kuwait's streets were dark and deserted. Most homes are still without electricity. The government brought in power generators to light domes and minarets of mosques.