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Iraq has accomplished "significant reconstruction" at two dozen military-industrial sites damaged in the Persian Gulf war and has resumed limited production of artillery and ammunition, CIA Director Robert Gates said Friday.

The rebuilding efforts are part of Saddam Hussein's plan to restore his military might, Gates told a House Armed Services Committee panel in testimony that seemed to run counter to assertions that Iraq is complying with a U.N. mandate to destroy weapons.Last week, apparently responding to threats of new allied military action, Iraqi officials promised to fully adhere to U.N. resolutions requiring the elimination of weapons of mass destruction.

U.N. inspectors are still verifying how many weapons Baghdad has scrapped.

Despite those reports, Saddam still has as many as several hundred Scud missiles, covert nuclear equipment and the means to make chemical and biological weapons, Gates said.

"We believe Baghdad has been able to preserve significant elements of each of its special weapons programs," Gates told the committee in brief public testimony before the meeting went behind closed doors.

"Once it is free to begin rebuilding them, its scientists and engineers will be able to hit the ground running," he said.

Turning to Iran, Gates said Tehran plans to spend $10 billion over five years to buy foreign weapons, including missiles, warplanes, attack submarines and tanks. Iran is expected to develop chemical warheads for its Scuds within a few years, but isn't likely to build a nuclear weapon before 2000, he said.

Meanwhile, the U.N. Security Council decided Friday to maintain its crippling economic sanctions against Iraq because Baghdad has yet to satisfy all conditions of the gulf war cease-fire, diplomats said.

The decision was made without a formal meeting or vote, they said. Every two months, the council reviews compliance with its demands that Iraq destroy all weapons of mass destruction and return Gulf War prisoners.

U.N. inspectors currently are in Iraq to verify Iraqi destruction of ballistic missiles and to destroy buildings associated with Baghdad's nuclear weapons program.