The Gulf

By NANCY TRAVER

After two weeks of ferocious shelling by Iranian forces, Iraq's besieged southern port city of Basra is becoming a ravaged wasteland of damaged buildings and pockmarked streets. Toxic gas has engulfed an area south of the city where Iranian artillery barrages set fire to a petrochemical complex. Demoralized and frightened, thousands of the city's 1 million residents have reportedly fled north to the capital of Baghdad in cars, on bicycles and on foot. Said a U.S. official: "If there is a victory in this for the Iranians, it is that they have been able to create the impression that Basra is not a functioning city anymore."

Still, Iraqi defenders last week fought the Iranian offensive to a blood- drenched standstill. Some 60,000 Iranian troops remained dug in six miles east of the heavily fortified earthenwork defenses, known as the "wall of steel," that surround the city. The Iranian attackers were under constant bombardment by the superior air- and fire-power of Iraqi President Saddam Hussein's forces. The wounded were said to number 15,000 for the Iraqis and 45,000 for the Iranians. Since Iran began its latest series of attacks on Christmas Eve, an estimated total of 30,000 combatants have perished.

As the six-year-old gulf conflict dragged on, military observers noted a strategic anomaly. Despite clear advantages in weaponry and training, the Iraqis have thus far been unwilling to commit troops decisively on the front to dislodge the Ayatullah Ruhollah Khomeini's fanatical Revolutionary Guards. Said Pentagon Spokesman Robert Sims: "The battle for Basra is becoming one of the largest battles of this lengthy war."

For now, Iran appears to hold the upper hand, if only psychologically. The Iraqis have been put on the defensive by the recent campaign, for which both sides have amassed at least 200,000 soldiers. Since beginning its offensive in December, the Iranian army has made small gains south of Fish Lake, a 120- sq.-mi. area flooded by the Iraqis as a defensive barrier. Iran has also made incremental progress southeast of Basra in the marshy terrain along the Shatt al Arab, a strategic waterway that affords access to the Persian Gulf. The new toehold has enabled the Iranians to bombard Basra from closer range.

Iraq has counterattacked with devastating air raids on a dozen Iranian cities, including Tehran, Isfahan and the holy city of Qum. Iran's Islamic Republic News Agency reported last week that 212 civilians had been killed and more than 600 wounded in the raids. Iran retaliated by firing a long-range missile that struck a residential area of Baghdad, causing dozens of casualties.

The siege of Basra seemed to have turned up the pressure considerably on the Iraqi government. In a Baghdad radio address, Saddam referred to Khomeini's "human wave" assaults, accusing the Iranian leader of "appealing, as if the devil were between his eyes, for further men to push into the inferno of death." He repeated his offer for a peace settlement, which the Iranian government promptly rejected. Meanwhile, a government-controlled newspaper published a decree by the Iraqi Revolutionary Command Council asking for volunteers aged 14 through 25 to enlist in the army.

Officials in Washington downplayed Iran's successes and described the military situation around Basra as stable. Said U.S. State Department Deputy Spokeswoman Phyllis Oakley: "We do not believe Basra is in imminent danger of falling. The Iraqis possess a great advantage in equipment and are committed to defending their territory." Other observers say the Iranian thrust toward Basra has placed an even heavier strain than usual on Iran's economy and its reserves of weapons. But none anticipate any lessening of Tehran's resolve as long as there is a chance Basra can be taken.

Iraq's Arab neighbors have been monitoring the fighting with concern. Iraqi spokesmen believe that if Basra falls, the Ayatullah will declare the creation of an Iranian-style Islamic republic in the predominantly Shi'ite area around the city. Khomeini, however, has never publicly declared that goal, and some analysts think the tactic would backfire by arousing fear among neighboring states about Iranian territorial ambitions. In an effort to reassure U.S. allies in the gulf, President Reagan last week declared, "We would regard any such expansion of the war as a major threat to our interests, as well as to those of our friends in the region."

Iranian strategists, for their part, hope that the fall of Basra leads to | the destruction of the Iraqi war machine, and thus the downfall of its leader. But the Iraqi President, who has led his country for seven years, seems determined to win a military victory over Iran. Most observers believe the Baghdad government would collapse only if Saddam's military commanders concluded that he had unsuccessfully prosecuted the war against Iran. Even then, any successor from the ranks of the Iraqi military would probably be more aggressive toward Iran.

The Iraqi leader will have the opportunity to seek the sympathy of other Arab leaders this week at the fifth Islamic summit meeting in Kuwait. But shows of support will be unlikely to influence Tehran, which has already issued a statement declaring that any resolution approved at the summit will not be "legally binding." The Iranians have vowed to continue the war until Iraq is crushed. Given that resolve, the siege of Basra is almost certainly only a prelude to bigger and bloodier battles to come.

CHART: THE BATTLE LINE

Credit: TIME Diagram by Joe Lertola

Caption: Iranian forces attempted to close in on Basra, while Iraqi troops battled to stop them. Neither side made a breakthrough.

Description: Color: Diagram of battle for Basra.

With reporting by Dean Fischer/Cairo and Johanna McGeary/Washington