KIRKUK. Iraq. Dec 11: Iraq's oil minister insisted Wednesday that UN arms inspectors may not enter President Saddam Hussein's palaces, setting the stage for a confrontation in upcoming talks with the chief inspector, reports AP

The remarks by the minister. Lt Gen Amer Mohammed Rashid, came two days before Richard Butler, hea^of the UN Special Commission, was to visit Baghdad for talks on inspecting so-called sensitive

The commission, which Is charged with overseeing the elimination of Iraq's weapons of mass destruction, insists It

must have access to all possible hiding places for weaponry. Iraq has said palaces and other sites are off-limits.

"Presidential sites are totally forbidden for UNSCOM Inspectors because they are a symbol of (Iraq's) sovereignty," Rashid said at a news conference in this northern city. "On this we shall not compromise."

Butler is scheduled to arrive Friday and Is expected to demand that his inspectors have access to all sites where they suspect Iraq may be hiding arms or the equipment to make biological and chemical weapons.

Butler also was expected to

discuss other issues, such as Iraq's germ warfare programme. its alleged production of the deadly VX nerve gas and missing missile warheads.

Rashid denied accusations that Iraq was still hiding weapons and materials proscribed under UN Security Council resolutions passed after the 1991 Gulf War.

"Since the end of 1991 there has been no proscribed weapon or equipment left in Iraq." he said.

Rashid was In Kirkuk. Iraq's main oil city, to mark the first anniversary of the start of Irani oil exports under the special oii-for-food programme.