After a meeting with the Prime Minister at a ranch high in the Rocky Mountains, Mr Bush refused to rule out the possibility of US military action. But he said he agreed with Mrs Thatcher that the next step should be agreement by the UN Security Council on worldwide action against Iraq. Mr Bush has frozen Iraqi and Kuwaiti assets under US control and banned imports of Iraqi oil.
Yesterday the oil price and financial markets were in turmoil. The price of Brent crude at one stage jumped to nearly $24 a barrel, the highest for four years.
Last night Iraqi troops were consolidating control of Kuwait. Iraq said its troops would be withdrawn in a few days but the establishment yesterday of a pro-Iraqi government in Kuwait, which announced the overthrow of the ruling al-Sabah family, shows that Baghdad plans to retain control of the emirate. Earlier, on Baghdad radio, a Revolution Command Council statement warned that Kuwait would be turned into a "graveyard" if anyone tried "to commit aggression or is moved by the lust of invasion".
In Colorado both Western leaders refused to specify what the worldwide action might be, but British officials said the only sensible sanction would be an embargo on Iraqi oil exports. They said, however that Mrs Thatcher was concerned that any sanctions must be agreed by the vast majority of UN members - not just Security Council members - and must be rigorously applied.
She said: "The fundamental question is this: will the members of the United Nations have the collective will to see that a Security Council resolution is enforced?"
She said the Security Council should meet again shortly to discuss action under Chapter Seven of the UN charter, which deals with aggression against member states. British officials said last night that both leaders had agreed that Iraq should be given no more than 48 hours to withdraw troops or face punitive action.
Although this appeared to contradict the Prime Minister's well-known opposition to economic sanctions, British sources said that Mrs Thatcher thought the Iraqi invasion merited a strong international response. But she did not want to be trapped into a situation where a few western countries damaged their own economics by enforcing sanctions while others did nothing.
The President and Prime Minister were speaking at a windswept open-air press conference after a previously scheduled informal summit 11,000 feet up in the Rocky Mountains. In this unlikely location, Mr Bush took calls from King Hussein of Jordan and President Hosni Mubarak of Egypt but failed to get through to King Fahd of Saudi Arabia.
President Bush condemned the "naked aggression" of Iraq. When asked whether the US would consider military action, he said: "We are not ruling any options in but we are not ruling any options out." He said "several possibilities" were open to the US, if it did decide to use force, and there has been speculation that the US might strike against an Iraqi oil terminal. President Saddam Hussein's military might is formidable, however.
It appears that Mrs Thatcher argued - and President Bush did not take much persuading - that unilateral military action by the US would be unhelpful at this point. British officials said Mrs Thatcher regarded the Gulf crisis as a crucial test of the UN's ability to prevent aggression in the post-Cold War world.
Meanwhile, the failure of the US State Department and the British Foreign Office to forecast yesterday's invasion is likely to produce prolonged recriminations in both countries. "Up to the moment we heard that Iraqi troops were landing at the airport we still thought they were bluffing," sources in London said yesterday.
From the front page of `The Independent', Friday 3 August 1990. The Law Report resumes with the Law Term in OctoberReuse content