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Regional Outlook : Will It Be War or Peace in the Mideast? Each Option Offers Hazards : A zero-hour withdrawal by Iraq may be the most difficult scenario for regional stability.


CAIRO — With barely a week remaining in the chilling countdown to possible war in the Persian Gulf, the alternatives remain just as unsettling.

Amid feverish diplomatic efforts to avert a military catastrophe that could devastate the region, including the scheduled meeting in Geneva this week between Secretary of State James A. Baker III and Iraqi Foreign Minister Tarik Aziz, there are growing doubts about whether a five-month standoff between some of the most formidable armies in the world can really be put to rest with a handshake and the rumble of departing tanks--and whether there is any such thing as a peace plan that will send them home for good.

For the bitterly divided Arab nations that must live along Iraq's borders for years to come, and for the world at large, the risks of peace may well rival the risks of war.

As the Jan. 15 deadline approaches, the scenario many fear most is that Iraqi President Saddam Hussein will suddenly announce a zero-hour withdrawal from Kuwait--plunging the international community into a whole new set of questions that many of those most deeply involved in diplomacy in the Middle East admit they are not prepared to answer:

Can the U.S. and other multinational forces afford to go home with Saddam Hussein still in power?

How can they justify remaining?

Even if Hussein is subsequently ousted by his disgruntled compatriots, is there any guarantee that a new Iraqi leader would be better than the old one?

How can a frightened Israel be prevented from taking unilateral action against Iraq--or should it be prevented?

How are future territorial and oil-pricing negotiations to be handled with a country that still has a million-man army revving its engines in the Iraqi desert?

"What happens," asks one diplomat rhetorically, "if King Fahd (of Saudi Arabia) calls up the secretary general of the U.N. and says, 'Saddam Hussein has phoned me, he's backing out now, even as we speak there's a tank moving across the border, and he promises the rest will be out in four weeks.' The secretary general calls up the Security Council and says: 'Guys, we did it. Pack up your bags and go.' Talk about a nightmare!"

The scenario is troublesome because it envisions that the international community allied against Iraq wants what it says it wants: for Iraqi troops to withdraw from Kuwait and for Kuwait's legitimate government to be restored.

The problem, according to Arab and Western officials seeking a solution to the crisis, is that the world must have more than that. For many, it's not enough for Hussein to withdraw his forces from Kuwait, nurse his wounds in Baghdad, restock his chemical plants and live to fight another day.

"Just to defeat him isn't enough. He has to be humiliated," said a senior Egyptian official. "It is possible to have a peaceful solution, but it must include a full withdrawal from Kuwait, which equals humiliation. If he's going to gain something out of this adventure, then he's a winner, and nobody wants him to be a winner out of this crisis, that's for sure."

The question of war or peace and how badly Hussein must be defeated has to do not only with military security but the future political landscape of the Middle East.

An Iraq that emerges from the crisis in the Persian Gulf with its credibility as a leader of the Arab world and its military forces intact would remain a valuable counterweight against potential problems from Iran, Syria, and--in the view of its Arab neighbors, at least--Israel. It would also be in a position--even in the event of a brief military conflict with casualties--to virtually dictate future policy in the gulf, many analysts say.

"In the Arab world, you can win by losing. If Saddam could walk around Baghdad and say, 'I lost 10,000 men fighting the Americans,' he'll walk into the next Arab League meeting and say, 'Who was the last one who did anything for the Palestinians?' And basically write his own ticket," said one Western envoy.

"Six months from now," suggested another, "Saddam calls Riyadh and says, 'I'm running short of cash, turn down the pipelines for a few months, will you?' How fast is Fahd going to say, 'Yessir'? . . . He will literally dictate the price of oil for the next decade. He will also dictate most Arab foreign policy."

If the Saudis and many other gulf states have sounded hawkish in recent months, this is why. Privately, senior Saudi government officials have been extremely worried that Iraq will abruptly pull its troops back into northern Kuwait, perhaps retaining the two key Kuwaiti islands that can provide access to the Persian Gulf and the disputed Rumaila oil field on the Iraq-Kuwait border.

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