WASHINGTON (Oct. 16) - The Senate increased defense spending by the largest amount in decades Wednesday, approving $355.4 billion for the fiscal year that began Oct. 1.

The bill boosts spending by $34.4 billion over last year's level, reflecting the increased needs of the war on terrorism and a possible conflict with Iraq.

The 93-1 Senate vote sends the bill to President Bush for his signature. The lone dissenting vote in the Senate was cast by Sen. Russ Feingold, D-Wis. The House approved the measure last week by 409-14.

''This defense budget will provide our troops with the best pay, the best equipment and the best possible training,'' Bush said in a prepared statement. ''It also sends an important signal that we are committed to defending freedom and defeating terror.''

The defense bill is only the second of the 13 annual spending bills that Congress has passed. The other bill was also military-related, providing $10.5 billion for military construction projects.

Sen. Daniel Inouye, D-Hawaii, chairman of the Senate Appropriations defense subcommittee, said it was ''imperative we pass this bill before we recess'' to ensure the military the support it needs as it prepares for a possible Iraqi war.

With the White House and Senate Democrats unable to agree on spending levels for non-defense federal programs, there was little chance of Congress enacting other appropriations bills before recessing for the Nov. 5 elections.

The House was preparing to vote on a fourth temporary spending measure to keep agencies operating at last year's levels until some agreement could be reached.

The defense measure increases spending in almost every area, from weapons procurement to payroll. It includes a 4.1 percent pay raise for military personnel and nearly all the $7.4 billion President Bush requested to keep developing a national missile defense system.

The bill also provides $3.3 billion for 15 C-17 transport aircraft, $2.3 billion for two Aegis destroyers, $3.2 billion for 46 Navy F/A-18 E/F fighters and $3.5 billion to continue developing the Joint Strike Fighter. Another $249 million is allotted for Navy Tomahawk cruise missiles, a key weapon in the Persian Gulf War.

AP-NY-10-16-02 1649EDT