WASHINGTON'S crushing ''containment'' of Iraq and Iran -- Mideast states seen as military threats -- may be fusing them together.
Iran, after being slapped with a tightened economic embargo by the United States, is exploring an alliance with its neighbor and former enemy Iraq.
It sent an 11-person delegation here last week, and Iranian Foreign Minister Ali Akbar Velayti will soon visit Baghdad.
The beleaguered Iraqi government of Saddam Hussein is taking a cautious approach to Iran's overture, but appears to be going along with Tehran's move in the hope that it could pressure the United Nations into lifting its four-year-old trade embargo on Iraq.
Inflation and a recent cut in government food rations have put basic foodstuffs beyond the reach of ordinary Iraqis. The largest bank note is worth 10 US cents, and people carry bricks of notes in shopping bags to make even simple purchases.
If Tehran's drive for a peace treaty with Iraq succeeds, it could challenge the US in its ''dual containment'' of the two countries.
''There is no doubt that a meeting between Saddam and Iran's Hashemi Rafsanjani would be the diplomatic coup of the century,'' says a European diplomat in Jordan who monitors events in Iraq. ''Any kind of rapprochement between Islamist Iran -- with its leadership position in the world Islamic revolution -- and Iraq would send some rather alarming signals to the West.''
An Iran-Iraq alliance could threaten the uneasy balance that has existed in the region since the defeat of Saddam in the 1991 Gulf war, and could damage Mideast peace talks. But some diplomats say that Iran's overtures are driven more by its need to counter US sanctions than by a genuine desire for peace with Iraq.
''There has been a slow improvement in relations between the two countries, but I don't think that Iran and Iraq have sufficiently gotten over the eight-year war to be driven into each other's arms,'' says a second foreign diplomat in Amman.
In downtown Baghdad, the heavily guarded Iraq headquarters of the Mujahideen Khalq -- an Iranian opposition group intent on overthrowing the religious leadership in Iran -- tends to lend credence to this view that achieving a peace accord between the two countries could take some time. But diplomats in Baghdad insist there is a new seriousness about the Iranian peace initiative.
Iraq stands to gain from new trade routes through Iran and outlets for its oil exports, which have been almost brought to a halt by the UN embargo.
Iraq's recent efforts to lure potential trade partners to an international oil conference to break international solidarity on sanctions have backfired.
The UN Security Council cut off that possibility in March by offering Iraq an interim deal that would allow the country to sell $2 billion of its oil for humanitarian assistance to the country's civilian population.
About $500 million of the profits would have been used to pay off Kuwait and Saudi Arabia for losses suffered in the war. But Saddam rejected the offer.
The prospect of a rapprochement between Iran and Iraq could change the equation and persuade the West to lift the embargo so that Iraq's potential as a bulwark against Iran could be exploited, some analysts say.
The two countries fought a bitter territorial war between 1980 and 1988 that claimed up to a million victims and ended in a stalemate. Despite maintaining mid-level diplomatic relations, Iran and Iraq have never signed a peace treaty.
Obstacles to peace include claims by each country that the other is holding large numbers of prisoners of war, that they host opposition groups trying to overthrow each other's regimes, and Iraq's claim that Iran has not returned military and civilian aircraft handed over by Iraq during the Gulf war.
Iraq has also repeatedly accused Iran of infiltrating Shiite Muslim agitators into the south of the country where a predominance of Shiite Muslims have offered periodic resistance to the Sunni regime of Saddam.
Shiite Muslims in Iraq form a slight majority over Sunni Muslims, but the Sunnis have traditionally run the country. Most Muslims in Iran adhere to the Shiite branch of Islam.
It appears that Iran's foremost intention with the new peace initiative is to send a signal to Washington that the recent unilateral trade embargo against Tehran could force an alliance between the two US foes.
Ali Khorram, the senior Iranian diplomat who led last week's delegation to Baghdad, on his return to Tehran reported progress toward an accord on returning prisoners of war and an agreement enabling Iranian Muslim pilgrimages to Shiite Muslim shrines in Iraq.
''They [the Iraqis] repeatedly emphasized that the events in the past should be forgotten, and we should open a new chapter in bilateral relations,'' Mr. Khorram said on Sunday.
''Iran believes that if the file on the eight-year war was closed, a new chapter would be opened for promotion of relations between Tehran and Baghdad,'' said Khorram, who met with Iraqi Foreign Minister Muhammad Said al-Sahaf in Baghdad last week.
In contrast to the upbeat Iranian tone, the Iraqi press remained silent until after the visit, when the official newspaper al-Jumhouriya published a short item quoting the Iranian news agency.
''Iran needs support now because it is facing US sanctions,'' one Iraqi government official told the Monitor. ''There is no doubt that the Iranians are worried about an intensified US presence in the Gulf.
''Whenever they feel squeezed, they come running to us. But they have procrastinated for years ... and have failed to follow-up on previous initiatives,'' the official said.