THE United States overture to establish direct contacts with Baghdad has boosted hopes in the Arab world not only for a compromise solution to the Gulf crisis, but for a new era of more balanced Arab-American relations. Senior Arab officials, who have been in touch with Iraqi President Saddam Hussein, say he would be ready to withdraw from Kuwait if the talks covered all problems in the region including the Arab-Israeli conflict.
Saddam, some Arab officials say, would not be satisfied if the US were simply to guarantee Iraq's economic and security interests in the Gulf region - including access to a port on the Gulf - but would try to redefine the basis for Arab-American relations.
Even if the Iraqi president does not push for direct linkage between the Gulf crisis and the Palestinian problem, Arab officials say, he will make it clear to the Americans that their interests in the region - including the free flow of oil - will only be guaranteed if Washington shows reciprocal respect and recognition of Arab national interests, including Palestinian aspirations.
``Saddam's message to the Americans is that they can no longer take the flow of oil for granted without seriously taking into account Arab national interests,'' a senior Arab official says.
President Bush has already declared that he sees no connection between the Palestinian problem and Iraq's occupation of Kuwait and dismissed any linkage.
In fact, some Arab officials express deep concerns about what may be the real objectives of the sudden American offer to send US Secretary of State James Baker III to Baghdad for talks.
Opponents of the US-led military buildup in the Gulf region fear it is a tactic to justify and secure US and international backing for military action against Iraq without giving substantive negotiations a chance.
``Let us hope that this is not a tactic; that [it] is really a strategic investment in peace not only between Iraq and Kuwait but also in the Gulf region as a whole,'' Crown Prince Hassan of Jordan said in two television interviews last weekend.
Although US allies in the Arab world welcomed the US decision to talk, they cautioned that a negotiated deal would bolster Saddam's standing and undermine their position.
``If Washington and Baghdad were able to reach a negotiated settlement taking into consideration Iraqi interests, Saddam will emerge as the official spokesman for the Arab World,'' a senior Arab diplomat says.
In his announcement to start talks with Baghdad, Mr. Bush said he would not accept anything less than a complete Iraqi withdrawal from Kuwait, the release of all hostages, and the restoration of the ruling al-Sabah family in Kuwait.
But Western analysts say Bush has signaled the start of an unpredictable diplomatic process that may not take the course Washington publicly aspires to.
France has already announced it will send its foreign minister to Baghdad and other senior officials from Europe are expected to follow suit.
``A meeting between Iraqi and Saudi leaders has now become possible, giving a real chance for an Arab solution,'' says an Arab official.
Given the hard-line maximal positions endorsed by both Washington and Baghdad, which has reiterated that Kuwait is part of Iraq, some analysts question the likelihood of a compromise.
If the US-Iraqi talks are confined to delivering a US ultimatum to Iraq, they will be doomed to failure, Arab officials say.
Saddam, in his initial response to the offer, also warned that if the US was using the talks ``as a show to impress the Congress and the American people ... [the talks] will be the shortest path to war.''