But for Iran, the gulf shipping is the vital route for about 1.8 billion barrels of oil a day.

The lull in attacks on gulf shipping has allowed Iran to ship oil to market without its ships being attacked by Iraqi warplanes.

Instead, the Japanese government agreed to fund the installation of radio navigation guides for gulf shipping.

Mr. Baker said, for the first time, that American and Soviet protection for gulf shipping represented a development that should not be rejected.

Any blowup between the Iranians and the Saudis, traders said, could go far to impede gulf shipping.

Administration officials have acknowledged that the re-flagging would protect only a fraction of gulf shipping.

The Iraqi announcement of an air raid on gulf shipping today was the second of its kind this week.

The United States also should push diplomatic efforts to end the war and seek the help of other nations in protecting gulf shipping, the report said.

After harsh criticism of the superpowers, Iranian officials are now saying they would favor a halt to all attacks on gulf shipping.

It also issued a peace plan that focused on freedom of navigation for its gulf shipping.