US image recovering in Arab view. The moderate Arab Gulf states were angered by the revelation of US arms sales to Iran. But Reagan's new US Gulf policy has partially restored confidence in the US, analysts say.

The United States has largely overcome the negative fallout among conservative Gulf Arab states from its secret arms sales to Iran. Gulf analysts say that US efforts to help protect reflagged Kuwaiti tankers from Iranian attack and US peace efforts within the UN Security Council have helped restore American prestige in the Gulf.

Though Gulf leaders are reported to have closely followed the congressional inquiry into the Iran-contra affair, American actions in the region have helped rebuild a sense of confidence in the US.

``The storm is over,'' one diplomat says. ``For most people, it is water under the bridge,'' another analyst adds.

Concern over the Iran-contra matter has been overtaken by a rush of events that threaten to engulf the region in the Iran-Iraq war, observers in the region say.

``The Irangate scandal was a terrible shock to people here, but they are totally with the US,'' says a well-placed Arab analyst.

When the Iran arms affair was made public last November, the Gulf states were angered at what they viewed as US duplicity in selling arms to Iran when it was encouraging other nations not to.

They were also angered at what appeared to be a secret American attempt to side with Iran against Iraq in the Gulf war.

Gulf leaders are still nervous about American intentions in the region, the Arab analysts says, but the Iranian threat to the Gulf states has necessitated a close working relationship with the US.

``Sometimes the people here feel it is a big superpower game being played in the Gulf,'' the analyst adds.

Congressional critics have maintained that the Reagan administration's current Gulf policy of protecting reflagged Kuwaiti oil tankers is largely a knee-jerk reaction to the threat of wider Soviet involvement in the Gulf. The Soviets agreed earlier this year to lease three Soviet tankers to Kuwait and to help protect them from Iranian attack.

Kuwait had initially approached the US to protect its tankers, but administration officials turned the Kuwaitis down. When the US learned of the Soviet move, a US-Kuwaiti tanker protection plan was quickly negotiated, leading to the current Gulf convoys.

Critics of US Gulf policy also say that once the Reagan administration became embroiled in the unfolding Iran-contra scandal, Washington was suddenly eager to assist the Kuwaitis as a means of limiting the damage to US influence throughout the region.

The critics maintain that US officials were too eager to compensate in the Gulf for the Iran arms scandal, and that as a result, current American policy in the Gulf has not been thought through.

The next significant test of US credibility is expected to arise over the issue of the imposition of a UN arms embargo as a possible means of ending the Gulf war.

The US, which favors imposing such an embargo, will be open to criticism from other members of the UN Security Council for its involvement in the Iran arms scandal, analysts say.

During roughly a year and a half, covert operatives working with US National Security Council aide Oliver North and others secretly sold arms, spare parts, and intelligence information to ``moderates'' in the Iranian government. The arms were in exchange for pledges of Iranian help in securing the release of Americans being held by pro-Iranian groups in Lebanon. Profits from the secret arms sales were then diverted through Swiss bank accounts to the contra rebels fighting in Nicaragua.

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