Eight years and a war later ...Iraq faces host of challenges on diplomatic, economic fronts. GULF CEASE-FIRE
Nicosia, Cyprus — Iraq's President Saddam Hussein has been behaving as though he had won the war with Iran, declaring a three-day national holiday in honor of Iraq's ``victory.'' But the belief is gaining ground among observers in the region that he may lose the peace. Iran's acceptance of a UN cease-fire, scheduled to take effect Saturday (11 p.m. Friday EDT), opens the way for a rush of outside interest in restoring ties with Tehran. At home, Mr. Hussein could face severe economic problems as resources poured in from wartime supporters are curtailed. And there is speculation that he may face challenges to his ruthless rule once his Army is no longer fully engaged in battle.
Members of a UN force have arrived in Iran and Iraq to monitor the cease-fire. Direct peace talks are due to get underway in Geneva, on Aug. 25.
Aside from watching outside powers vie for Iran's favors, some Western and Arab observers say, Mr. Hussein may face severe economic problems as his wartime supporters cut their subventions.
But in the short term, Saddam - as he is known to Iraqis and Iranians alike - may face the galling sight of the Americans, Soviets, and others falling over themselves to gain influence in Tehran. Iran offers strategic temptations with which Saddam cannot compete. It is four times the size of Iraq, with three times the population, and it has a long common border with the Soviet Union.
Some Western and Arab observers believe that fear of an impending US-Iranian rapprochement may have been one reason behind Saddam's decision to send his armies across the border into Iran immediately after Tehran announced its acceptance of UN Security Council Resolution 598. Iraq also blocked progress at the UN, insisting on direct talks before a cease-fire.
President Hussein's sudden decision to drop his demand came after huge pressure from his Arab neighbors. Iraqi envoys sent around the Gulf were told in no uncertain terms that he should stop pushing his luck.
A delegation of seven Arab foreign ministers conveyed the same message during a stormy session with Saddam in Baghdad.
One member of the delegation later said that when the delegation emerged, they expected to have a shouting match with his top advisers, too. But one of the Iraqi aides said: ``We wanted to tell him that too, but we didn't dare.''
The Gulf states that have been helping to bankroll the Iraqi war effort will clearly end their aid once the war is over, and other creditors will also want to start calling in their debts.
Bankers estimate that Baghdad has run into the red to the tune of some $110 billion. ``This could be a serious problem for Saddam - he is very cash-dependent,'' says one. ``He will not be able to increase his oil revenues enough to compensate.''
Although the all-pervasive Iraqi internal security apparatus has kept Saddam firmly in power since 1968, some sources believe he may face serious problems once the Army is no longer engaged in battle.
Ruthless purges, and the threat from Iran, have kept the Army in line. ``But you can't stay in power just by executing 100 officers,'' a well-informed Arab source says, referring to alleged past incidents. He speculates - only half in jest - that chemical weapons are now so widespread among the armed forces that they might be tempted to stage the world's first ``chemical coup'' against Saddam's palace.
There are strong but unconfirmed reports that dissident Air Force officers staged a bombing raid on President Hussein's home base at Takrit, north of Baghdad, in June.
But over the years, there have been many predictions that the charismatic, ruthless Saddam was on the way out. They were all wrong.