BAGHDAD, IRAQ — DESPITE an international blockade, political isolation, a shattering military defeat, and internal armed rebellions, Saddam Hussein's ruling Baath Party has held onto power and effectively crushed opposition in Iraq. But the leadership - including Saddam himself - realize that the regime's future lies in securing a wider popular base, sources close to the government say, and this will require a process of liberalization.
Iraqi officials have said that this liberalization will involve a free press, as well as parliamentary and presidential elections. It is not yet clear, however, if opposition parties will be allowed to take part in the elections and if candidates can challenge the presidency of Saddam.
As an initial gesture, Saddam has yielded the post of prime minister to Saadoun Hammadi, a step that may lead to the separation of the executive branch from the direct authority of the presidency. Hitherto, the post had always been assumed by the president, who was also leader of the party.
Although the regime publicly blames the recent armed insurrection in the Kurdish north and predominantly Shiite south on foreign intervention and sabotage, officials in Baghdad say privately that they are aware it reflects widespread anti-government discontent and demands for an end to repression.
As both insurrections indicated, more than two decades of Baathist rule has succeeded in suppressing rather than eliminating sectarian and ethnic divisions and unequal socio-economic development.
The Baath Party was the first to publicly acknowledge its failure. ``The party has achieved horizontal changes but it has failed to effect vertical development,'' said an unsigned editorial in the party newspaper, al-Thawra.
But most significantly the leadership's declared drive for democratization seems to be aimed at the reintegration of Iraq and the regime into the international community. Furthermore, analysts say, the leadership hopes that by pursuing a policy of national reconciliation it will strip the United States, Iran, and other countries from an important political pretext to interfere in Iraq's internal affairs.
The leadership has announced an amnesty for Kurds and Shiites who took party in the rebellions and has started talks with a top-level Kurdish delegation currently in Baghdad.
There have been unconfirmed reports that Baghdad has finally conceded to Kurdish demands for complete autonomy in Kurdistan, Kurdish sources in London say.
So far, however, the steps taken by the government have not indicated readiness to drop one-party rule and share power with other groups.
The changes, reportedly with Saddam's blessing, cannot be totally dismissed as cosmetic however. For the first time in the Baathist reign there has been some sort of separation between the head of state and party and the executive.
Immediately after the appointment of the Cabinet, a new pattern emerged where Saddam assumed a lower profile while Hammadi, the newly appointed prime minister, was allowed to take the lime light. It was Hammadi who presented to the public the new government program of political reform and economic liberalization - breaking a long-standing tradition of only the president addressing the Iraqi people.
Although it is unclear where the process is leading, analysts and even some party officials believe that Saddam has deliberately yielded more executive power to some of his trusted aids - primarily Hammadi, Izzat Ibrahim, charged with internal affairs, and Tariq Aziz, who is still de facto chief of foreign policy.
Analysts and some critics of the president argue that Saddam's uncharacteristic acquiescence to share power - although on a limited scale - is motivated by recognition that such a process may help ensure his regime's survival and deflect international and domestic anger toward him.
Thus, the policies are now more closely associated with Hammadi. Newspapers are even allowed to criticize Hammadi and, again for the first time in Iraq, they are allowed to run cartoons of senior officials.
Analysts also note that by allowing such a pattern, mistakes or failure of the process will then be associated with Hammadi rather than with Saddam. ``The aim seems to be to make a distinction between the regime and the executive to ensure the survival of the system,'' said an Iraqi writer.
Yet at the same time, Saddam did not take such relatively important steps without ensuring his solid grip on the internal situation through a tough crackdown on the rebellions, implemented by his trusted Republican Guards, and by keeping the intelligence and security forces in his hands. He has given charge of the internal and security affairs to relatives from his own Takriti clan.
``Saddam seems to have been studying the experience of eastern Europe and wants to make sure that some changes can be made but without losing control,'' said a former Iraqi Baathist.
How far is Saddam ready to go is still in question. Ordinary Iraqis and even some Baathists are very skeptical of the ability of the regime to change. ``I will believe that the process is going to work if government officials are able to voice their reservations or objections without being penalized,'' an Iraqi Baathist official says.
Although ordinary Iraqis have received the news about liberalization with skepticism, they seem willing to give the regime a chance after their dismay at the opposition forces, which in some cases rivaled the regime in their brutal methods - especially in the south where retaliations against Baathists extended to murder and even rape of their immediate family members.
``They [the opposition] did not offer a democratic model,'' the Iraqi writer says.
Many, however, still fear that Saddam will backtrack as soon as he feels that the system's survival is no longer in jeopardy. In various speeches, he has pledged that process is irreversible. For Iraqi people, he has a long way to go to prove it.