Washington, Jan. 31 — Satellite photographs and American intelligence reports have shown that Iraq has in the last year rebuilt military and industrial sites damaged by American and British air strikes in late 1998, officials say.

The recent intelligence findings have raised concerns among Defense Department and other officials in the Clinton administration that in the prolonged absence of international weapons inspectors, whose job would be to search those structures, President Saddam Hussein’s government has continued its pursuit of biological and chemical weapons.

Despite those concerns, the administration’s policy has been allowed to drift, leaving the United States unable to force Iraq to accept a resumption of inspections even after resolving an impasse at the United Nations Security Council.

Iraq’s refusal has now left the administration in a quandary over how to respond at a time when international support for its policy and for sanctions against Mr. Hussein is waning.

“There is concern in intelligence circles that he has begun to rebuild buildings that could enable him” to produce chemical or biological weapons, a senior administration official said. “He has had a lot of time to operate without inspections.”

Although the intelligence reports have not provided concrete evidence that Iraq is producing chemical or biological weapons, the officials said, the reports have raised the possibility of renewed military confrontation, because the administration has repeatedly warned that any effort by Iraq to produce the weapons would prompt new American air strikes.

The concern has given urgency to the new inspection program created last month by the Security Council. But for the administration, the latest Iraqi defiance has been met with frustration, uncertainty over how to proceed and even fatigue.

In his State of the Union address on Thursday, Mr. Clinton devoted exactly six words to Iraq. The American representative to the United Nations, Richard C. Holbrooke, a diplomat noted for his tenacity, barely involved himself in the Security Council’s negotiations over inspections, leaving them to his deputy, James B. Cunningham, who arrived in New York just last month.

Despite a policy of “containment,” punctuated by American-led strikes in 1993, 1996 and 1998, Mr. Hussein remains as much a thorn as he was when Mr. Clinton took office. And Iraq’s defiance comes in a year when any action by the administration would have political ramifications in the presidential campaign.

Nearly a year and a half after Iraq blocked the last team of United Nations inspectors, administration officials said that getting inspectors back into the country remained the best way to determine if Baghdad’s weapons programs were continuing.

Last week, after months of diplomatic wrangling, the Security Council agreed to nominate Hans Blix of Sweden to lead a new inspection team in Iraq, having rejected a candidate supported by the United States, Rolf Ekeus, also of Sweden.

Russia and France vetoed Mr. Ekeus’s nomination after consultations with Mr. Hussein’s government, diplomatic officials said.

But while Iraq has been less hostile toward Mr. Blix, Iraqi officials have said they will not accept any resumption of international weapons inspections under the terms of the latest Security Council resolution.

Even if Mr. Hussein eventually relents and allows Mr. Blix’s team to enter the country, it will take at least three or four months before inspectors can resume work inside Iraq. Administration officials expressed their concerns when asked to assess the state of Washington’s policy toward Iraq. Some officials defended the administration’s approach, but others, including Pentagon officials, criticized the policy out of concern that it has left the United States few viable options.

Thirteen months ago, the United States and Britain launched four nights of air and missile strikes to punish Mr. Hussein after he expelled the last team of weapons inspectors. At the time, senior commanders estimated that the operation had set back Iraq’s ability to produce chemical or biological weapons — and the missiles needed to launch them — by one to two years.

“We’re marching toward that point” now, a senior military officer said.

Pentagon and other officials declined to discuss the recent intelligence findings in detail, but they said Iraq had rebuilt many of the 100 installations damaged or destroyed in the American and British raids in December 1998.

Of those targets, 12 were missile factories or industrial sites that commanders said were involved in Iraq’s efforts to produce weapons of mass destruction. The officials said significant reconstruction had been seen at those sites, including Al Taji missile complex north of Baghdad.

In the wake of the diplomatic wrangling, administration officials defended their policy toward Iraq. They said they remained determined to contain Mr. Hussein militarily while maintaining the economic sanctions first imposed when Iraq invaded Kuwait in 1990 and while supporting Iraqi opposition groups.

Officials emphasized that a new American attack did not appear imminent. They said they wanted to see if the new inspection program would eventually get off the ground before taking any action that could further erode international support for the American stance toward Iraq.

But the officials said there remained three “red lines” that the United States would not let the Iraqis cross: a threat against a neighboring country like Kuwait or Saudi Arabia, an attack on the Kurdish minority in northern Iraq or a reconstitution of nuclear, chemical or biological weapons programs.

Critics of Washington’s handling of Iraq said the administration appeared to have no clear plan on how to force an end to Iraq’s defiance. “There is no adult supervision of our policy,” said Anthony H. Cordesman, a military analyst at the Center for Strategic and International Studies in Washington.

And despite American efforts to unify Iraqi opposition groups, factions remain. The administration has provided only a small part of the $97 million that Congress authorized to support those bent on overthrowing Mr. Hussein’s government.

Also, international sanctions are fraying. To win Russian and French support for the new weapons inspection program, the United States and Britain agreed to offer Iraq an opportunity to end the sanctions. Under the new Security Council resolution, the United Nations will suspend sanctions if Iraq cooperates with the new inspectors.

But one reason for the continued Iraqi defiance may be that the sanctions are already leaking. Iraq is allowed to export $10 billion a year to buy food and other essential goods, and while the proceeds are closely monitored by the United Nations, the Iraqis have been able to divert some of the money, administration officials said.

Mr. Hussein’s government has also been able to earn millions of dollars in smuggling. Since August, Iraq has steadily increased illicit shipments of oil from the Shatt al Arab waterway, much of it flowing through an installation near the port of Basra that American warplanes attacked and damaged in 1998, the officials said.

Last month, Iraq’s illicit trade reached the highest level since the Gulf war. More than 130 ships, some of them Russian, left the port and skirted the Iranian coast, staying in Iran’s territorial waters to evade American ships trying to intercept them. “The Iranians are at least tacitly involved in this,” a senior administration official said.

In the same month, Navy warships boarded only 36 ships and seized only 4. According to American intelligence estimates, Iraq was able to smuggle out a record amount of 317,000 metric tons of oil, or more than 2.3 million barrels, in December alone. At today’s price of about $27 a barrel, the shipments were worth more than $62 million.

A recent intelligence report concluded that the smuggling was undermining the sanctions. Pentagon and other administration officials say they increasingly worry that the proceeds may be intended to finance weapons programs.

But another senior Administration official said the amounts of illicit profit were not enough to allow Mr. Hussein to produce nuclear, chemical or biological weapons. “What’s inside the buildings is much more expensive to put up than any walls and roofs,” the official said.

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