WASHINGTON -- U.S. fighter jets bombed a missile site in northern Iraq on Monday as Washington issued a fresh warning to President Saddam Hussein not to threaten his neighbors or his own people.

With tensions in the gulf running high, Kuwait said it had put part of its military on full, combat-ready alert in response to Iraqi "threats" to gulf Arab states.Iraq, meanwhile, rejected as "insincere" a reported Saudi initiative to ease economic sanctions that have crippled its oil-based economy for more than eight years.

In the latest of a series of confrontations in the "no-fly" zones policed by U.S. and British planes to protect anti-Saddam Kurdish and Shi'ite populations in northern and southern Iraq, U.S. fighter jets opened fire on an Iraqi missile site that had posed a threat to allied planes, a U.S. defense spokeswoman said.

Capt. Melinda Morgan said U.S. planes patrolling the northern zone had been targeted by the Iraqi site near Mosul.

"The air crews acted in self-defense and suppressed a ground-based missile launch site, because it posed a threat to coalition forces," Morgan said.

She said two U.S. F15-E's dropped two precision-guided bombs and a U.S. F16-CJ fired a High-Speed Anti-Radiation (HARM) missile. Damage to the Iraqi site was being assessed, but there was no damage to U.S. planes.

Iraq, pounded by U.S. and British bombs and cruise missiles in a four-day offensive last month, denounced both countries as "thieves and outlaws" on Sunday and urged Arab countries unilaterally to lift sanctions on Baghdad.

It has accused Saudi Arabia and Kuwait of significant involvement in the U.S.-led airstrikes and urged Arabs to topple their leaders for aiding the military campaign.

Kuwait, invaded by Iraq in 1990, said it had placed part of its military on full-combat alert. An emergency defense council met on Sunday night to discuss "threats by the Iraqi regime" to Kuwait and Saudi Arabia, a defense ministry spokesman said.

U.S. Defense Secretary William Cohen, visiting Japan, said Washington was ready to act militarily if Baghdad threatened Kuwait, other Arab neighbors or its own people.

He said any move by Iraq to withdraw recognition of Kuwait would be a flagrant violation of U.N. Security Council resolutions, adding: "We are watching it very closely."

Iraqi Deputy Prime Minister Tareq Aziz rejected a Saudi initiative, reported in Arab newspapers, to lift U.N. sanctions on the import of food and medical supplies to Iraq.

"Saudi Arabia is a party to the recent aggression against Iraq, and it has been since 1990 until today," Aziz said. "Therefore, it is not expected that Saudi Arabia comes up with a sincere and positive proposal in favor of Iraq."

In the Vatican, Pope John Paul said in an annual "state of the world" address that the recent U.S.-led bombing raids on Iraq had solved nothing. He called instead for dialogue.

"The recent crisis in Iraq has shown once more that war does not solve problems. It complicates them and leaves the civilian population to bear the tragic consequences," the pontiff said.

In Moscow, the Russian Foreign Ministry repeated its demand that the United Nations' chief weapons inspector, Richard Butler, should resign after accusations that his special commission had spied on Iraq for U.S. intelligence.