When Iraqi Foreign Minister Tareq Aziz visits Washington next week, he is expected to announce reestablishment of formal diplomatic relations between his country and the United States.
Western diplomats in Baghdad speculate that Iraq's move, and suggestions that it may also recognize Egypt, signal a shift that shows a new, practical side to Iraqi foreign policy. Iraq is making an effort, they say, to establish itself as a moderate force in the Persian Gulf region, while maintaining a careful balance between the US and the Soviet Union.
Baghdad severed ties with Washington in 1967 because of US support for Israel in the Arab-Israeli war. However, both countries have maintained diplomatic interest sections in each other's capitals since then. Iraq severed ties with Egypt five years ago after Egypt signed a peace treaty with Israel.
For the past two years, a series of high-level Iraqi-US meetings have been held - the latest on Oct. 1 at the United Nations between Mr. Aziz and Secretary of State George Shultz. Aziz reportedly told Mr. Shultz then of Iraq's decision to resume ties. The foreign minister is scheduled to meet with President Reagan on Nov. 26.
Iraq's decision to recognize the US comes after the realization that both nations share common interests in the region, diplomats say. These interests include: seeking an end to Iraq's four-year war with Iran, limiting the influence of Iranian leader Ayatollah Khomeini, and trying to achieve some sort of stability in the Gulf area.
Domestically, the most immediate benefit for Iraq would be the possibility of increased US pressure on Israel and other American allies to stop sales of weapons and spare parts to Iran.
Better relations also mean a possible increase in credit guarantees for US agricultural imports, which totaled more than $600 million during the last fiscal year. Also, diplomats say, Baghdad can expect favorable treatment in securing credit for increased participation in the new Iraqi oil pipeline projects, not to mention possible US technology and other technical aid. And Iraq is reportedly negotiating with Bell Helicopters of Texas for nearly 48 civilian choppers which could be used in the war.
For the US, besides opening new export markets, improved ties mean a greater counterweight against Soviet influence in Iraq. Despite a chill in Baghdad-Moscow ties in recent years, the past few months have seen a thaw. The Soviets have stepped up arms shipments to Iraq.
In an interview last month with the Paris-based Al Watan Al Arabi newspaper, President Saddam Hussein praised his country's relations with the Soviet Union: ''Iraq and the Soviet Union respect each other and look for a higher level of friendship.''
Two weeks after seeing Shultz in New York, Aziz flew to Moscow for what was described here as a one-day working visit, but whose purpose was seen as to inform the Kremlin of the forthcoming renewal of ties with Washington. During the visit Aziz and Soviet Foreign Minister Andrei Gromyko signed a cooperation agreement in the economic, scientific, and technical fields.
In that same newspaper interview, President Hussein also said any resumption of relations with the US would have to be in ''a convenient circumstance so as the step would be understood regarding the motive.''
''Before the war,'' he continued, ''we discussed . . . the possibility of resuming the relations between ourselves and America, but the war broke out and (we) put off such a move, as we do not wish our moves to be misinterpreted, whether by Americans or by others.''
Diplomats explain that Hussein didn't want to appear to be rushing to the American side for help.