IRAQ REFUSES ENTRY TO 3 U.S. OFFICIALS.

Byline: Steven Lee Myers The New York Times

Iraq barred three U.S. arms inspectors from entering the country Thursday, ignoring threats of retaliation from the United States.

The government of President Saddam Hussein acted only hours after the Security Council unanimously warned Iraq on Wednesday night not to make good on its threat to throw out all Americans working for the United Nations in Iraq.

The Americans barred Thursday include two members of a U.N. weapons-inspection team and one with the International Atomic Energy Agency; there are 10 other Americans already in Iraq.

Spokesmen at the White House, the State Department and the Pentagon warned that Iraq faced retaliation if it did not admit the Americans, and they explicitly left open the option of a military strike.

``This is a very serious matter, and we are not ruling any option out at this time,'' the State Department's spokesman, James Rubin, said Thursday.

The administration strongly criticized Iraq's defiance, saying Hussein must comply with U.N. resolutions that call for international inspections to ensure that Iraq does not rebuild the military might it used to invade and occupy Kuwait in 1990.

Faced with the latest Iraqi challenge, the president's senior foreign-policy aides gathered at the White House on Thursday evening to consider how to respond.

Officials in Baghdad insisted that Iraq would not reverse its decision, and accused the Americans of being spies. The government had ordered the 10 Americans in Iraq - out of 40 inspectors altogether - to leave within a week.

While the administration left open its options, officials said the focus now would be on applying diplomatic pressure and rebuilding the fragile coalition Washington and its allies on the Security Council have built against Iraq since the end of the Persian Gulf War.

Only last week that coalition frayed when Washington pushed for still tougher sanctions against Iraq for not cooperating with the arms inspectors. Five of the council's 15 members not only resisted tightening sanctions but abstained from a less punitive compromise that threatened to impose sanctions.

But the Security Council rallied together Thursday after Iraq banned the three Americans: France and Russia, which were among the abstainers, both called on Iraq to reverse its decision. In Washington, officials said the administration hoped to use Iraq's defiance to shore up support for isolating Hussein.

``He's done more to promote our policy than we have,'' one official said. Another added, ``God bless Saddam.''

A senior administration official, speaking on condition of anonymity, said the United States would renew the push for new sanctions if Iraq did not back down. It might also try to declare Iraq in violation of the cease-fire agreements that ended the Gulf War, a step that would clear the way for military action by the Security Council.