HIGHLIGHTS: Iraq & UN Kick Off Talks on Mechanics of Allowing Inspectors Resume Work||International Community Split into Two Camps: Those who Want to Disarm Iraq at Any Cost and Those Who Want to Avert Attack on Iraq||Bush Urges UN Security Council Not to be 'Fooled' by Iraq's Offer||Oil Prices Recede as Fears of Military Action Recede||No Word on When Inspectors Would Return|| STORY: Russia and the United States clashed openly on Tuesday over whether the United Nations must give arms inspectors stronger powers as Iraqi and U.N. experts kicked off talks on the mechanics of allowing the inspectors to resume a task abandoned nearly four years ago.

The disagreement, at a news conference at U.N. headquarters in New York, suggested that Iraqi President Saddam Hussein has started to make cracks in the broad consensus against him by backing down when faced with the threat of U.S. attack.

It also revealed a split between those governments whose main concern is to avert a U.S. attack on Iraq and those who believe the priority is to disarm Iraq at any cost.

President Bush said the U.N. Security Council "must not be fooled" by Iraq's offer, while the Pentagon planned for possible war and arms inspectors, responsible for checking Iraq for nuclear, chemical, biological and ballistic weapons, prepared to return.

Chief U.N. weapons inspector Hans Blix met top Iraqi arms experts on Tuesday briefly to discuss the inspectors' readmission. The two sides will meet again in Vienna during the week of Sept. 30. A precise date has not been set.

Bush told the United Nations last Thursday it should no longer allow Iraq to defy resolutions dating back to the 1991 Gulf War, particularly those on weapons of mass destruction.

Iraq responded on Monday with an unconditional offer to readmit inspectors. They left Iraq in December 1998 on the eve of U.S.-British bombing raids to punish Baghdad for alleged non-cooperation and have not been permitted to return.

U.N. inspectors who did go into Iraq during the 1990s complained of hindrance and deceit by the Iraqis, while Baghdad accused them of spying for the United States.

The government in Baghdad said its offer had robbed the United States of any reason to wage war. Iraqis in the street welcomed their government's sudden shift, but some feared it would not stop the United States from attacking.

World oil prices fell on Tuesday as traders' fears of imminent military action receded. International benchmark Brent crude oil fell 55 cents to dlrs 27.97 a barrel.

WORLD LEADERS SPLIT

The focus at the United Nations on Tuesday was whether the Iraqi offer had removed the need for a new resolution to give the inspectors new and stronger powers.

Russia, one of five council members with veto power, told the news conference that the Iraqi offer made further action by the Security Council unnecessary at this stage and that the inspectors did not need additional instructions.

"From our standpoint, we don't need any special resolution," Foreign Minister Igor Ivanov said. "All of the necessary resolutions are to hand."

"What procedures they should follow, well we know those too. All of these matters were agreed to during the preliminary inspections (in the 1990s)," he added.

But Bush was adamant, saying: "The Security Council must act, must act in a way to hold this regime to account, must not be fooled, must be relevant to keep the peace."

The Bush administration, which wants to get rid of Saddam and does not trust Iraqi promises, said it wanted a Security Council resolution spelling out Iraq's obligations and stating the consequences for failure to comply.

"The only way to make sure it is not business as usual and to make sure it is not a repeat of the past ... is to put it in the form of a new U.N. resolution," Secretary of State Colin Powell told the news conference in New York.

Canada backed the U.S. position but Egypt and France tended toward the Russian position. The European Union and the United Nations adopted stances midway between the two.

In Paris, a French diplomatic source said France would be willing to discuss a new Security Council resolution as long as the resolution would not be divisive.

Foreign Minister Ahmed Maher of Egypt, part of an Arab consensus against military action against Iraq, said: "Now there is a way to resume the inspections. In light of this, I don't understand the point of going to the Security Council."

Danish Foreign Minister Per Stig Moeller, whose country has the presidency of the European Union, was wary of the Iraqi offer, conveyed in a letter from its foreign minister, Naji Sabri, to U.N. Secretary-General Kofi Annan on Monday.

U.S. WAR PLANS MARCH ON

As the diplomatic wrangle progressed, Washington's war planning marched ahead.

The United States is discussing with Britain the possibility of basing B-2 "stealth" bombers on the British Indian Ocean island of Diego Garcia and the military is proceeding with plans to send much of its key Central Command staff to Qatar for an exercise.

Israel's army chief said on Tuesday Baghdad's offer for an unconditional return of U.N. arms inspectors had not changed Israeli preparations for a possible U.S. attack on Iraq.

At the United Nations meeting, U.N. weapons inspectors and Iraq's top arms experts discussed how to address logistic issues on offices, flights, escorts and other planning. There was no word on when the inspectors would return.

Iraqi officials also agreed to consider national legislation prohibiting weapons of mass destruction activities, as required by U.N. resolutions, and to catch up on declarations of changes in former weapons sites that were under U.N. monitoring, a statement from Blix said.

PHOTO CAPTION

Russian Foreign Minister Igor Ivanov (R) speaks while U.N. Secretary General Kofi Annan listens at a press conference at the United Nations, September 17, 2002. Ivanov said that no new U.N. Security Council resolution was needed following Iraq's offer to allow in weapons inspectors. (Peter Morgan/Reuters)