UNITED NATIONS (Reuters) - Iraq told the United Nations on Thursday it agreed "in principle" to destroy dozens of its missiles as demanded by chief U.N. inspector Hans Blix, who voiced dismay in a crucial report that Baghdad had not made greater efforts to cooperate with inspectors.

At the same time, a U.N. Security Council meeting erupted into chaos with smaller nations, such as Chile and Mexico, demanding the badly divided big powers -- the United States, Britain, France, Russia and China -- reach a common position.

"Nobody makes a step toward bridging the gap. We are all coming up with innovative ways to defend our own positions. There is no atmosphere of 'Where do we go from here?"' Chilean envoy Christian Maquierira said.

U.S. and British envoys also moved to crush a possible compromise by objecting to a bid by Germany to have Blix publish a list of unresolved disarmament issues that could be used to measure Iraqi compliance and delay warfare.

The meeting, the council's first since the introduction of a U.S.-British-Spanish resolution that would legitimize an invasion of Iraq, became so divisive that members did not agree whether Blix should address the council on March 6 or March 7.

On the missiles controversy, Gen. Amir Al-Saadi, an adviser to Iraqi President Saddam Hussein, sent a letter to Blix saying that it accepted his order to destroy Al-Samoud 2 rockets, the United Nations announced.

Arms inspectors had determined the missiles exceeded the 90-mile range set in U.N. resolutions.

Iraq, in the letter, said it accepted "in principle" the destruction of the missiles. But it said Blix's decision was "unjust and did not take into consideration the scientific facts regarding the issue."

"In order to establish a timetable and other technical and procedural criteria required for implementation, we suggest dispatching a technical team urgently for this purpose," the letter added.

Destruction of missiles, which Blix had ordered to begin by Saturday, would be a blow to Iraq as it prepares for a possible invasion by U.S.-led forces.

BLIX REPORT BLEAK BUT CAUTIOUS

Blix, in a leaked draft of a report expected to reach council members over the weekend or Monday, said that results of three months of inspections have been problematic.

"Iraq could have made greater efforts to find any remaining proscribed items or provide credible evidence showing the absence of such items," Blix wrote. "The results in terms of disarmament have been very limited so far."

He said his teams have not been able to conduct interviews with Iraqi scientists and others "without a tape recorder running or an Iraqi witness present."

But he avoided any blunt language that could trigger war and said Iraq belatedly had taken a number of steps in the last month that could account for some of its weapons of mass destruction programs.

"It is hard to understand why a number of the measures which are now being taken could not have been initiated earlier," he said in the report. "If they had been taken earlier, they might have born fruit by now."

CHILE PROTESTS

Led by Chile, several Security Council members sharply criticized the big powers for not trying to reach a compromise and depending on smaller nations to make a crucial decision.

Pressure has been immense on six so-called "swing votes" of wavering council members -- Chile, Mexico, Pakistan, Angola, Cameroon and Guinea.

The six are part of the 10 rotating council members, elected for two-year terms. The other four are Spain and Bulgaria, who support the United States and Britain, and Germany and Syria, who strongly oppose military action.

Germany helped draft a French proposal, supported by Russia and China, that opposes a new resolution and would continue inspections for at least four more months.

"This divided council is in fact throwing the decision on the back of the elected members while the permanent members stick to their positions," Chilean Ambassador Gabriel Valdes told reporters.

Valdes, supported by Mexico, suggested a compromise on the lines of what Canada had proposed and the United States and Britain opposed. This would give Iraq specific tasks to fulfill by March 28 or face the possibility of war.

Despite support among small nations for the Canadian proposals, including U.S. ally Bulgaria, diplomats said they came too late to achieve council unity, with Washington, having amassed troops in the Gulf, impatient at delays.

"I would love to see a compromise," British Ambassador Sir Jeremy Greenstock said. "But there is nothing that makes up for the absence of cooperation by Iraq."

Washington's strategy is to get the minimum nine votes needed to adopt the resolution and then dare any veto-bearing nation, such as Russia, China or France, to kill the measures.

France has the reverse strategy: if the United States does not get the nine votes, it would be spared making a decision about whether or not to veto the draft resolution.

The French ambassador, Jean-Marc de la Sabliere, said the council discussions showed that "a majority of the members think that the time has not come to go to war."

"There are two propositions," he said. "One says ... we have to go to war. The other says 'no."'