(Updates with police spokeswoman comment in paragraphs 2-3)

By Thomas Ferraro

WASHINGTON, Sept 16 (Reuters) - U.S. Defense Secretary Robert Gates rejected on Sunday former Federal Reserve Chairman Alan Greenspan's statement that the Iraq war "is largely about oil," saying the conflict is driven by the need to stabilize the Gulf and put down hostile forces.

Gates' defense of the conflict, now in its fifth year, came a day after thousands of anti-war protesters marched in Washington. Police arrested 192 for crossing a barrier, a spokeswoman for the Capitol Police said.

Most were released by Sunday afternoon, but one who was also charged with carrying an incendiary device, and some others with outstanding warrants, were still in custody, Sgt. Kimberly Schneider said.

In his new book, "The Age of Turbulence: Adventures in a New World," Greenspan echoed the long-held complaints of many critics that Iraq's rich oil supplies are a major motivating force behind the war.

"Whatever their publicized angst over Saddam Hussein's 'weapons of mass destruction,' American and British authorities were also concerned about violence in an area that harbors a resource indispensable for the functioning of the world economy," Greenspan wrote.

"I'm saddened that it is politically inconvenient to acknowledge what everyone knows: The Iraq war is largely about oil," added Greenspan, for decades one of the most respected U.S. voices on fiscal policy.

After more than 18 years at the helm, Greenspan retired in January 2006 as chairman of the U.S. central bank, which regulates monetary policy.

'ROGUE REGIMES'

"I have a lot of respect for Mr. Greenspan," Gates said on ABC's "This Week." But he disputed his comment about oil.

"I wasn't here for the decision-making process that initiated it, that started the war," Gates said. But he added, "I know the same allegation was made about the Gulf War in 1991, and I just don't believe it's true."

"I think that it's really about stability in the Gulf. It's about rogue regimes trying to develop weapons of mass destruction. It's about aggressive dictators," Gates said.

President George W. Bush last week ordered gradual troop reductions in Iraq into next summer but defied calls for a dramatic change of course.

Gates said he would urge Bush to veto a proposal by Virginia Democratic Sen. James Webb to require that U.S. troops spend as much time at home as their previous tour in Iraq.

"It would be extremely difficult for us to manage that," Gates said. "It really is a backdoor way to try and force the president to accelerate the drawdowns."

Senate Armed Services Committee Chairman Carl Levin, a Michigan Democrat, said he did not know if the Senate, held by Democrats 51-49, would be able to muster the 60 votes needed to clear a Republican procedural roadblock and approve the Webb measure. But he said "it has a good chance."

He conceded that at this point backers do not have the two-thirds majority to override a Bush veto. "But that doesn't mean we shouldn't fight for what we believe in just because the president may veto it," Levin said on CBS' "Face the Nation."

"I think there's enough Republicans who believe we've got to change course, but whether they'll vote that way, we just simply don't know," Levin said. (Additional reporting by David Wiessler, Mark Felsenthal and Doug Palmer)

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