SEEKING a way out of the international isolation it has endured for the past three years, Iraq is quietly trying to chip away at the US-led coalition ranged against them.
Although Western diplomats here say that officials appear resigned to the idea that the only real long-term solution to their crisis lies in coming to terms with the West, they are disappointed by signs that the Clinton administration intends to continue its predecessor's hard line toward Iraq.
This has prompted Baghdad to seek to open cracks in the alliance that fought it in the Gulf war, and also to invest quiet, small-scale diplomatic initiatives closer to home, even with its longtime adversary, Iran.
Iraq's dilemma is how to emerge intact from its three-year crisis without bowing in total submission to Washington. The Iraqi leadership is deeply suspicious of US intentions in the region.
"What America wants is not the Iraqi regime itself, but what it represents," says Oil Minister Usama al-Hitti. "They want a complete area dominated by their influence."
The June 27 missile strike on Iraq's intelligence headquarters convinced the government here that "American policy has stable stands, and this stability has not changed with the change in presidents," says Saadi Mahdi Saleh, speaker of the parliament. Waiting for divisions
"Within the US administration, they do not want to give us the opportunity for normal relations," complains Lt. Gen. Amir Rashid, director of the Iraqi Military Industries Commission.
In his July 17 speech marking the 25th anniversary of his ruling Baath Party's revolution, President Saddam Hussein was at pains to differentiate between the United States and other world powers.
"Since Europe, Japan, and China have their own characteristics, which in turn yield special interests and outlooks, they are therefore bound to differ with the United States over policies and attitudes," Saddam argued. "The question that arises is when and how" these differences will emerge.
This has long been a leitmotif of Saddam's world view, but so far it has shown few signs of bearing fruit.
Meanwhile, the government is building bridges with Tehran. Foreign diplomats with close links to the Iraqi government say Baghdad has secretly sent a number of delegations to Iran in recent months, and that Iranian teams have visited here.
A Tehran newspaper reported on Aug. 2 that a senior Iraqi official, Deputy Prime Minister Tariq Aziz, was planning to visit Iran to meet President Hashemi Rafsanjani, the first high-level contact between the two countries in more than two years. The Iraqi news agency immediately denied the report.
The two countries have many differences to resolve, such as the fate of prisoners on both sides held since the 1980-88 Iran-Iraq war, and the Iraqi Air Force jets that their pilots flew to safety in Iran during the Gulf war.
"But they also agree on one thing," one diplomat says. "They both see the United States as the great Satan, out to dominate the region's riches and resources."
This shared perception, adds another diplomat, "could be the basis for a rapprochement."
Iranian goods are sold in Iraqi shops, despite the international trade embargo, and Iraq is reported to be exporting cement, fertilizer, and oil products to Iran.
Although Baghdad keeps its diplomatic moves under close wraps, Iraq is also understood to be seeking common ground with another neighbor, Turkey, with whom it has traditionally enjoyed close economic and political ties.
The death of former Turkish President Turgut Ozal, who was personally identified with his country's leading role in the anti-Iraq coalition, has given hope to officials here, as have growing Turkish concerns about the continued freeze of Iraqi oil sales.
Turkey once earned an estimated $280 million a year from transit fees levied on Iraqi oil exported through a pipeline to the Mediterranean, and the loss of that income is proving painful. Ankara and Baghdad also share a mistrust of their Kurdish populations' aspirations for autonomy. Gulf overtures
To the south, Iraq faces a more difficult task with the Gulf rulers, especially those in Kuwait and Saudi Arabia. This has not deterred Saddam from making overtures in the Gulf - through King Hassan of Morocco, according to well-informed sources here, but they have been rebuffed.
"Kuwait wants Saddam Hussein's head, and Saudi Arabia is standing by its ally," one diplomat says. "This is a very, very difficult process to start."
Several diplomats here believe that if President Clinton was initially prepared to deal with Saddam, Gulf rulers have convinced him to seek the Iraqi ruler's downfall.
Though Baghdad's hopes of reviving its role as a bulwark against Iranian radicalism have been dampened by the current US policy of "dual containment" of both Iran and Iraq, officials are still keeping up their sleeves the card that served them so well until 1990.
"I think they are eager to find a way out and a compromise with the United States that would not deny their importance to the region," says one senior Arab diplomat. "They are very keen not to compromise their future."
When the most recent salvo of US cruise missiles landed on Baghdad in June, hasty calls for retaliation were quickly squelched by senior Iraqi officials.
That restraint, one Western diplomat says, "means that they realize they have to continue along this road in search of better relations with the United States.
"They have no options, because the only way out is an end to the sanctions and a return to the international community," the diplomat says.