The two faces of Muammar Qaddafi. Libyan leader tries to charm his immediate neighbors ...[ cf. ... while allegedly backing terrorism against enemies ]

Since early this year, Col. Muammar Qaddafi has multiplied his efforts to end Libya's diplomatic isolation and defuse discontent at home. This ``charm offensive,'' as one top US official calls it, is seen as tactical. The consensus among United States specialists is that it has been forced on Colonel Qaddafi by threats to his regime. Yet they admit he has done a good deal to strengthen his position with skillful use of half measures.

``He had to open up again to survive and he's basically a survivor,'' says Mary Jane Deeb, a Libya specialist at American University here.

At home. Qaddafi has released about half of the political prisoners held at the beginning of the year and promised revisions in the criminal laws. He invited opponents to return without fear of penalty. He reversed his radical socialist economic policies in favor of free-market economies, at least for consumer goods. And he allowed Libyan citizens to travel without restrictions.

Reports from Libya indicate that the shop shelves were empty and popular discontent was about to explode before these moves, says Henry Schuler, a Washington Libya specialist.

Chad. Qaddafi signaled the government of Chad, with which he has been fighting over a strip of border territory, that he was ready to grant diplomatic recognition and to provide reconstruction aid. Libya lost up to 10 percent of its armed forces and $1.5 billion in equipment in the war with Chad during the past two years.

Libya's military leadership was reported to be increasingly frustrated with Qaddafi's pursuit of the war. According to US and African diplomats, neighboring Sudan also told Qaddafi to get his ``Islamic Legion'' out of western Sudan or it would allow Chadian forces to attack the Libyan mercenary force inside Sudan.

Other neighbors. The Libyan leader has made gestures to his other neighbors. He paid two surprise visits to Tunisia, opened his side of the border with Tunisia for free travel and trade, and held out the prospect of settling a dispute over an oil-rich seabed that both countries claim. He proposed a gradual union with Algeria and reinforced economic cooperation. He offered a lessening of border tensions with Egypt and has approved Sudan's effort to mediate improved relations between Tripoli and Cairo.

Other states. Qaddafi has gradually toned down his propaganda wars against moderate Arabs. In June, he attended his first Arab summit in years. Simultaneously, he made a number of overtures to European countries eager for commercial ventures in Libya.

Qaddafi gains room to maneuver

Most of Qaddafi's gestures have been relatively cost free, specialists say, but they have given him room to maneuver.

``In depth, nothing has really changed,'' says Lillian Craig Harris, a London-based author and former State Department Libya specialist. ``It's tactical. When you read his speeches you see he's doing it in sorrow. His people didn't live up to his expectations and he's increasingly a nonentity'' among his Arab brethren. He wants ``to be loved and appreciated'' at home and abroad, she adds.

Professor Deeb says the domestic economic changes may be sincere, because Qaddafi's earlier policies were a dismal failure. His political reforms at home are more tenuous, she adds. A few opposition figures have returned to test the waters with the help of private guarantees from Algeria, say informed diplomats.

US observers agree that the initial moves at home were popular. But more recent reports suggest that his domestic reforms have reached their limits and that people are still dissatisfied.

Qaddafi's foreign gestures should be seen more skeptically, Deeb says. She recommends that Libya's immediate neighbors be left to test this new pragmatism.

Libya's apparent moderation ``could all change in three months,'' a well-placed French official adds. He points out that Libya has yet to bite the bullet in a number of areas. On Chad, for example, Libya continues to occupy the disputed strip between the two countries. Qaddafi has not agreed to international arbitration. His troops are still concentrated near the border and his military aircraft regularly overfly Chad's territory.

Algeria, Tunisia, and Morocco want to include Libya in a more integrated North Africa, which they believe will be better able to face the challenges of a unified European market in the 1990s, a senior North African official says. He says Qaddafi is now willing to accept modest cooperation with his neighbors ``reluctantly,'' because his other approaches have failed and his advisers are urging him to take a ``more realistic'' approach.

The official says he and his colleagues don't necessarily trust Qaddafi, but they have to live with him and believe a net of mutual relations could create a more bearable relationship.

In the Arab world, most still see Qaddafi as ``marginal,'' says a senior diplomat from the Gulf, despite his bows toward the Arab mainstream.

In Europe, several countries are tempted by the potential for trade with Libya. ``In a number of cases, we're seeing people believing what they want to believe because there are commercial interests involved,'' a top US official says.