ALL sides in the Gulf crisis face substantial losses if open war breaks out, so even a slight hope of diplomatic solution is worth exploring. But it's not clear, as yet, whether Saddam Hussein's latest moves offer such hope. His plan to withdraw Iraqi troops from Iranian territory frees those forces to concentrate on the Western build-up in Saudi Arabia. But this and other concessions to Teheran - which would once have been unthinkable - may also indicate a willingness to compromise.
King Hussein of Jordan is in the United States carrying a message from Saddam. It may be a proposal for settling the dispute over Kuwait through an international conference.
Earlier, the Iraqi leader had suggested his occupation of Kuwait could end if other occupations in the region - Israel's of the West Bank and Gaza and Syria's of Lebanon - were ended. That hinted a willingness to back away from the declaration that Iraq's annexation of Kuwait.
All this is evidence that Saddam is starting to squirm under the pressures of a tightening economic embargo and the participation of other Arab nations in the defense of Saudi Arabia.
To date, Saddam's statements have been more propaganda than proposal. His words have been aimed at Arab public opinion. He has sought to deflect attention away from his aggression against Kuwait, an Arab neighbor, and onto that most enduring grievance - Israel's occupation of Palestinian land.
The transparent political motives behind Iraqi public statements does not mean, however, that diplomatic channels narrowed by the military standoff cannot reopen. Saddam has a pragmatic streak, for all his hard-line zeal. It's not inconceivable that he could come around to a deal that gives him a degree of satisfaction - some financial gains, and perhaps small territorial concessions - in return for withdrawal of his forces.
If that happens, the US could find itself in a tricky position, with thousands of troops and tons of equipment ashore and with Arab allies who feel it's time to start talking to their errant brother in Baghdad - despite what Washington may think.