ATHENS (Reuters) - U.S. basketball suffered its first Olympic defeat in 16 years on Sunday -- to Puerto Rico -- and American swimmer Michael Phelps' dream of eight gold medals evaporated.

The men from the U.S. Caribbean territory handed their mainland American cousins a 92-73 upset on the basketball court in a preliminary match that cast gloom over the successors to the "Dream Team" triple Olympic gold medallists.

A rash public bid for a record clutch of eight golds by teenage swimming phenomenon Phelps proved a medal too far after only two events when the South African quartet scored a stunning victory in the men's 4x100 meters freestyle final.

The sporting outcomes were bitter or sweet, as ever. But the eruption of a Middle Eastern political sore poisoned the air.

Iran defied the Olympic spirit of sport by refusing a judo fight against an Israeli, insisting on putting solidarity with the Palestinians before gold medals.

Judo officials put off a decision on how to whether to punish the Iranian team over world champion Arash Miresmaeili's failure to step up to the mat with Ehud Vaks, and the International Olympic Committee appeared to stall for time. A homegrown scandal also rumbled on, with Greece's two top sprinters saying they would miss an appeal hearing on Monday that may bar them from the Games for missing drugs tests.

An ignominious exit from the Games by the Greek pair looked increasingly inevitable.

DREAM OVER

Phelps's dream of surpassing countryman Mark Spitz's record seven golds at the 1972 Munich Games sank with the South African triumph after he had won the 400 meters individual medley on Saturday in world record time.

His arch-rival Ian Thorpe of Australia earlier won round one of a duel with Phelps in the 200 meters freestyle. But the reigning Olympic champion from the Netherlands, Pieter van den Hoogenband, outpaced both to qualify fastest for Monday's final.

Teenager Laure Manaudou won the women's 400 meters freestyle to give France its first gold in Athens, becoming the first Frenchwoman to win an Olympic swimming title in the process.

On the second day of full competition, Athens was blasted by a hot, hair-dryer wind that threatened to spook horses at the equestrian events and played tricks at the archery.

The rowing regatta had to be stopped altogether, prompting some told-you-so comments from critics who said it was located in the wrong place to begin with -- alongside the windsurfing.

DEAD-EYE ALEXEI

But the gusting winds could not stop Russia's Alexei Alipov winning gold in the men's trap shooting with a near-flawless performance on a range carved into a mountain top.

The 29-year-old Muscovite scored 149 out of 150, including a perfect 25 in the final round. It gave the Olympic giants their first Athens gold, which Moscow claimed was its 500th overall, counting four decades of pan-Soviet achievement from 1952.

Japan notched up the 100th gold medal of its Summer Olympics history with judoka Tadahiro Nomura's record third title, and China led the early medals tables with five golds, looking for another big haul in Monday's synchronized diving.

Australia's Sara Carrigan upstaged the favorites to win the women's Olympic cycling road race while Dutch defending champion Leontien Zijlaard-van Moorsel crashed out with two laps to go.

In a fresh doping case, Slovak shot putter Milan Haborak tested positive for a banned substance and left the Olympics, the Slovak news agency SITA reported.

"I really am sorry because I was really looking forward to competing. I trained long and hard. But I do not know that I took something that is banned," SITA quoted Haborak as saying.

NOT HIS DECISION?

Sidelined judoka Miresmaeili was quoted by Iran's official news agency IRNA as saying he "refused to face my Israeli rival in sympathy with the oppressed Palestinian people."

But shunned Israeli opponent Ehud Vaks told Israeli Army radio he felt sure Mirasmaeili had no choice, and in Tehran a spokeswoman for Iran's Olympic committee said he was told to pull out, in line with national policy toward Israel.

Iran's President Mohammad Khatami left little doubt about the reasons behind the pullout, saying Miresmaeili's action should be "recorded in the history of Iranian glories."

Among those lamenting the blight was spokesman Yaron Michaeli, who said the Israeli team was "sorry for the athlete because he is very good and could have won a gold medal."