The unilateral decision, halting two million barrels a day, coupled with oil strike in Venezuela, resulted in an immediate increase of oil prices, with the Brent closing in London at US Dollar 27, one dollar up from previous day.

But Israel Radio announcement that Israeli troops would begin a pullout from two West Bank cities within hours helped the prices easing on the New York market giving back some of the day's gains.

There was no immediate response to the Iraqi decision from two other Muslim

oil producing nations, Iran and Libya, as both have said they would back an embargo but only if the ban found support from all Arab producers.

In a speech broadcast over the national television, the Iraqi dictator said the measure could be cancelled in case the "Zionist entity's" (Israel) armed forces have unconditionally withdrawn from the Palestinian territories.

"The decision (to cut-off Iraq’s oil supply) is basically taken against the Zionist entity, and the American aggressive policy and not against anyone else. It is not meant to harm anyone but those who have decided to harm the Arab nation, including the Palestinian people", president Hossein said in the address.

Iraqi Oil Minister Amir Muhammed Rashid said the suspension had been implemented at 6 a.m. EDT from its export points on the Gulf and through Turkey.

Turkish Pipeline Company BOTAS confirmed that the pipeline from Iraq had stopped pumping and traders said they had been told Gulf shipments were being put on hold.

But Mr. Ali Rodriguez, the Venezuelan General Secretary of OPEC had immediately responded that the cartel would not follow the suggestions, adding that anyhow, the Organisation had not received any formal demand from Iran or Iraq.

However, he said on Monday that following the Iraqi decision, he is engaged in intense lobbying with OPEC members.

Mr. Rodriguez who was speaking on the sidelines of an oil and gas conference in Doha, Qatar, added: "I have still not been informed of all OPEC members' reactions towards the said development", the official Iranian news agency IRNA quoted him as having said.

Qatar's Oil Minister Abdullah Ben Hamad al-Attiyah, too, said he was opposed to an oil embargo against the friends and allies of Israel, because adopting such a decision would rather backfire against the OPEC members, IRNA added.

The Qatari minister further elaborated: "the friends and allies of Arab countries, including many developing nations, would suffer more losses than the industrial world, because the price of oil will rise skyrocketing high due to such a decision, if adopted collectively."

President Hosein has also urged other Arab and Muslim oil producers to follow suit and suspend crude exports.

"Our Arab and Muslim brethren and all believers will hopefully encourage our move ... by taking similar measures in the case of those who have oil", Sadam Hossein continued, as hundreds of Iraqis took to the streets of Baghdad later Monday to express support for Saddam's decision.

The West's energy watchdog, the Paris-based International Energy Agency, said the suspension was not a big loss to world oil markets and that the agency had the capability to step in and release emergency stocks in the event of any severe disruption.

"It's regrettable but not a huge volume", IEA Executive Director Robert Priddle told reporters. "We've seen losses from Iraq before in different circumstances. The market has not reacted sharply to this."

"We do have the capability to respond to this but we would expect the oil producers to be concerned in the first place and we will give them time to react to this."

"The Israeli occupation of Palestinian territory, which included placing Palestinian President Yaser Arafat under virtual house arrest, was intended to break the Arab and Palestinians' will and force them to surrender with humiliation to the Zionist-American alliance", the Iraqi strongman said in the televised address.

Washington wants to oust Saddam as part of its campaign against countries it identifies as a threat to its security after the 11 September attacks in the United States.

The U.S. said on Sunday, after a meeting in Texas between President George W. Bush and British Prime Minister Tony Blair, that it was not yet planning a military campaign against Baghdad but that the use of force remained an option.

Saddam is resisting pressure from the U.S. and Britain to permit the return of United Nations weapons inspectors to Iraq to investigate its capacity to produce weapons of mass destruction. Iraq remains under U.N. sanctions for failing to eliminate those weapons nearly 12 years after Saddam ordered his forces to invade Kuwait, in August 1990. ENDS IRAQ HALTS OIL 8402