Four oil wells may have been lit
Witnesses in Kuwait about eight miles south of the border spotted flickering flames on the horizon after a series of explosions shook buildings in the area and sent farm workers running outside.
The Arab satellite television channel al-Arabiya reported fires had erupted in Iraq's valuable al-Rumeila field west of Basra and just north of the Kuwaiti border.
Mr Rumsfeld said the military was seeking additional information.
AP reporter Ross Simpson, embedded with a Marine unit in northern Kuwait, said he was told by a battalion commander that three oil wells have been torched in Iraq.
Even before the war began, the Pentagon expressed fears Saddam Hussein had planned to sabotage Iraq's oil fields by booby-trapping wells so one person could blow them up.
A loss of oil from Iraq home to the world's second-largest reserves could affect supplies for importing countries, and deny US and British governments an asset they hope will help pay for postwar efforts.
Indeed, oil prices jumped yesterday after reports emerged about the well fires. Earlier, the Organisation of Petroleum Exporting Countries (OPEC) had sought to calm oil markets by pledging to maximise output to make up for any disruption in crude exports from Iraq.
Iraq's Rumeila South oil field near the Kuwaiti border ranks as one of the country's largest, with more than 5 billion barrels in reserves.
It is near a similar-sized field nearby known as Rumeila North, and both are on and near strategic pipelines that pump oil out of the country.
In 1991, Iraqi troops destroyed more than 700 well heads in Kuwait, turning its oil fields into an environmental disaster, a desert inferno that took seven months to extinguish.