After extending until June 3 emergency arrangements for Iraq oil-for-food plan, the U.N. Security Council faces contentious U.S. demands that U.N. controls be struck entirely from the multibillion-dollar plan. President Bush has said several times he wants the sanctions, imposed in 1990, lifted entirely and diplomats said the United States was crafting a resolution that would guarantee that proceeds from future oil sales be held in trust for an interim Iraqi authority rather than the United Nations.

The consequences of any resolution would be to free oil sales and give the United States firm control over contracts and expenditures until an Iraqi government is in place, they said. Without Security Council endorsement, no oil firm will sign a contract with an entity that has no legal standing.

On Thursday, the Security Council renewed emergency procedures, first instituted on March 28, for the oil-for-food plan until June 3, the end of the program's current phase.

Currently, the program has some 14 billion dollars in funds. The council authorized U.N. Secretary-General Kofi Annan to expedite emergency health and food supplies to Iraq. Some 400 million dollars worth of goods are en route to Iraq and an additional 130 million dollars are expected by June 3.

The oil-for-food program, originally designed to ease the impact of the sanctions, puts Iraq's oil revenues into a U.N. escrow account, which pays suppliers of food, medicine and a host of civilian goods that Iraq ordered.

Russia this week floated its own informal plan that would leave the United Nations in firm control of Iraqi oil revenues until a new government was recognized. France suggested that sanctions be suspended but not lifted immediately and that the U.N. oil-for-food program be phased out gradually.

To assuage fears that the United States and Britain are grabbing Iraq's oil, the United States plans some kind of international oversight, but not from the United Nations, diplomats said.

But doing away quickly with 16 resolutions the United States helped craft over the last decade is bound to engender opposition among a majority of council members and force Britain again into the role of seeking a compromise.

Adolfo Aguilar Zinser, Mexico's U.N. ambassador and the current council president, said on Thursday most members did not want the oil-for-food program stopped abruptly because 60 percent of the Iraqi people were entirely dependent on it.

"We feel that it should be phased out gradually because we cannot terminate a program that has such significance for such a large proportion of the population," he told reporters.

WORLD BANK, IMF MAY MONITOR OIL FUNDS

The Washington Post, in its Friday editions, said Bush administration advisers on Wednesday adopted the Pentagon proposal for eliminating all U.N. controls over Iraq, rather than the State Department's preferred step-by-step approach.

Distributions would be monitored by the World Bank or the International Monetary Fund. But the Post said the Iraqi Central Bank would be in charge of profits from oil, some of which would be spent on reconstruction designated by the Pentagon-run Office of Reconstruction and Humanitarian Assistance or by the Iraqi Interim Authority.

The U.S.-drafted resolution would also ask Annan to appoint a special representative, who would work with American officials in Baghdad but apparently have little power. Annan so far has refused American requests to do this, arguing that the Security Council would have to make a decision and Washington would have to spell out clearly what the envoy would do.

France on Wednesday moved to meet the United States half way, saying that sanctions should be suspended immediately and lifted entirely only after U.N. arms inspectors certified Iraq no longer had weapons of mass destruction.

But the United States does not want the U.N. inspectors back, blaming them for not coming up with a "smoking gun" that would have given ammunition to the war plans.

Russia circulated to a few council members an informal draft resolution that would give Annan the right to "sign new contracts for the export of Iraqi oil and purchase of humanitarian goods" providing that those supplies were not covered by contracts signed by the previous Iraqi government.

Moscow's proposal was an apparent attempt to keep intact obligations of Saddam Hussein government, which had favored Russia in oil and goods contracts.

PHOTO CAPTION

Members of the Security Council listen to speeches shortly before voting at U.N. headquarters, Thursday, April 24, 2003. The Security Council voted unanimously Thursday to extend Secretary-General Kofi Annan's authority to speed millions of dollars of additional food and medicine to the Iraqi people until June 1. (AP Photo/Diane Bondareff)