WASHINGTON (AP) - A CIA error that was based on faulty information and then went undetected in subsequent checks led to the mistaken NATO targeting and bombing of the Chinese Embassy in Belgrade, a U.S. official said yesterday.

The official, speaking on condition of anonymity, said the intended target, the Yugoslav Federal Directorate of Supply and Procurement, was selected by the CIA. Other organizations, including NATO, the U.S. European Command and the Pentagon's Joint Staff, reviewed and approved it, the official said.

"This went through all these hoops, but for whatever reason it was not detected," the official said. The Chinese embassy is several hundred yards away from the Yugoslav government supply office.

Most of the target planning in the allied air campaign is done by NATO, the U.S. European Command and the Pentagon, with the CIA playing a smaller role, the official said. CIA officials are still reviewing their own published and clandestine sources to determine how they misidentified the embassy.

NATO offered further apologies yesterday, but gave no further information about how the mistake occurred or who was responsible.

Meanwhile, Rep. Porter Goss, R-Fla., chairman of the House Intelligence Committee, said the bombing shows America's intelligence capabilities are stretched thin.

"I say it's a reaping of the harvest of the underinvestment in our intelligence capabilities," Goss said on Fox News Sunday.

Goss's Senate counterpart, Sen. Richard Shelby, R-Ala., agreed: "We've been doing defense, which intelligence is part and parcel of, on the cheap for about 13 straight years, and now you're seeing the fruits of it."

The administration is seeking about $29 billion for intelligence programs in the 2000 budget, an increase of about 9 percent. But critics say that proposed increase comes after years in which intelligence spending has effectively declined. Only a small portion of that budget goes to the CIA; much is for spy satellites and military intelligence.

President Clinton apologized Saturday to the Chinese and Defense Secretary William Cohen and CIA Director George Tenet issued a joint statement acknowledging that "faulty information" was behind the error.

They stressed that "a review of our procedures has convinced us that this was an anomaly that is unlikely to happen again."

NATO Supreme Allied Commander Gen. Wesley Clark, said on ABC's This Week that there have been 18,000 bombing runs in the seven-week campaign but fewer than a dozen instances of hitting civilians or weapons going astray.

He said it was "the most precise, effective and collateral damage-free air operation that has ever been conducted."

But the embassy bombing has further strained already tense relations between the United States and China.

Lawmakers yesterday also warned the Chinese government not to seek political advantage from the situation.