NEWS ANALYSIS : U.S., Saudis Doubt Diplomacy Alone Will Resolve Conflict With Iraq : Strategy: The only good outcome would be for Hussein to quit, they say. And he won’t.

U.S. and Saudi officials say they are skeptical of diplomatic efforts to negotiate with Iraq, with some suggesting that the Persian Gulf crisis has evolved beyond the point at which even an unconditional Iraqi withdrawal from Kuwait can defuse it.

This grim assessment is based on the conviction that a satisfactory outcome can be achieved only by something Iraqi President Saddam Hussein will not concede--his own removal from power.

“Iraq will be a threat not only to Saudi Arabia but to the entire region and the world as a whole as long as Saddam remains in power and keeps his armed forces intact,” a senior Saudi official said.

In recent days, an intensive round of diplomatic maneuvering has shifted the focus from the military deployment that continues in Saudi Arabia to Arab and international efforts under way to resolve the crisis peacefully.

U.N. Secretary General Javier Perez de Cuellar, who arrived Thursday in Jordan to meet with Iraqi Foreign Minister Tarik Aziz, is leading one of these peace missions, and a number of Arab leaders are involved in diplomatic initiatives of their own.

At the same time, Iraq appears to be sending a series of ambiguous but hopeful signals that it wants to avoid a military confrontation with the United States.

The withdrawal of Iraq’s best assault forces from positions near the Saudi border, Hussein’s attempts to communicate with the West through a series of television interviews and his promise to free women and children from among the Western hostages he is holding are all seen by diplomats in Saudi Arabia as signs that Iraq may be looking for a way to pull back from the brink.

However, although Saudi officials do not want to be seen as dismissing this diplomacy out of hand, in private they remain deeply pessimistic.

“Of course, we hope the diplomatic efforts will succeed. No one wants to give the impression that he is unwilling to give peace a chance,” one official said. “But at the same time, it is hard to envision an acceptable outcome.”

On the Arab level, most of the diplomatic initiatives revolve around solutions that might have been acceptable to some Arab governments in the state of panic that seized them immediately after Iraq invaded Kuwait on Aug. 2.

Such proposals include Iraq’s withdrawal from Kuwait in exchange for cash compensation, the withdrawal of U.S. forces from the gulf and perhaps some sort of ersatz elections in which Kuwaitis would be seen as choosing a new government for themselves.

But with the arrival of U.S. forces here, Saudi officials say it is far too late for this sort of solution, which would do little more than apply a heavy layer of face-saving makeup to what, in essence, would be appeasement.

It would also be obviously unacceptable to the United States, which is committed to a solution that not only compels Iraq’s withdrawal from Kuwait, but also guarantees the security of Saudi Arabia and its smaller gulf allies from the threat of Iraqi aggression once its forces leave the area.

It is the latter objective which, in effect, locks the door to a diplomatic settlement because it is difficult to imagine Iraq not posing a threat to Saudi Arabia unless its army is destroyed or Hussein is removed from power.

Indeed, one of the worst-case scenarios that diplomats are now musing over would include an unconditional Iraqi pullout from Kuwait.

“If Iraq were to withdraw unconditionally, and if Hussein were to survive the political consequences, it would be a disaster for everyone,” one Western diplomat said.

Once Kuwaiti sovereignty had been restored, the diplomat said, pressure would quickly mount on the West to withdraw its forces from a region that remains deeply suspicious of any foreign military presence.

“All Saddam has to do then,” this diplomat added, “is wait a couple of years until he perfects the delivery systems for his chemical weapons or perhaps develops nuclear ones. Then he invades again--but this time he doesn’t stop at Kuwait.”

Although not impossible, this ominous scenario is still considered unlikely because of doubts that Hussein could remain in control of Iraq after such an ignominious defeat. Nevertheless, it illuminates the unstated dilemma faced by U.S. and Saudi leaders as they contemplate their next moves in the gulf crisis.

“Iraq’s is a very personalistic dictatorship, and Saddam is very central to Iraqi aggression,” a senior U.S. official said. “As long as he remains in power, it’s very hard to imagine Iraq not posing an intolerable threat to the region.”

Much likelier, but not much better, is the prospect of a stalemate in which Arab and Western

resolve to confront Hussein could weaken faster than Iraq’s resolve.

“The central problem for the Saudis now is how to ensure continued Arab solidarity behind the embargo of Iraq,” a Western diplomat said. “The longer this goes on, the more criticism there will be throughout the Middle East of the American presence.”

Right now, the Arab consensus seems to be behind the Saudis, but internal pressures are building in Jordan, Syria and the always politically volatile West Bank and Gaza Strip.

“If this thing drags out too long, the original issue of Iraq invading Kuwait may be overtaken by a perception that Iraq is the only Arab nation resisting an attempt by the West to re-establish its domination of the Arab world,” another diplomat said.

If that happens, then political pressures could begin to pry apart U.S.-Saudi solidarity and their objectives could start to diverge, the diplomat added.

For these reasons, Saudi and American officials here are stressing the need to prevent the crisis from degenerating into a stalemate.

“This is going to be resolved soon because it has to be,” a senior U.S. official said. “It cannot be allowed to become an Arabian version of the European central theater. . . . U.S. troops cannot be on Saudi soil that long.”

The official said there is still reason to hope that the effects of a U.N. trade embargo, combined with what he described as “the military noose tightening around Iraq,” will force the Iraqi army to move against Hussein.

Kuwait and Saudi Arabia pumped billions of dollars into Iraq during its eight-year war with Iran to help cushion its economy--and one result was that ordinary Iraqis never had to face the kind of physical hardships that they are now starting to experience as a result of the embargo.

It is hoped that, as these hardships become more acute, public unrest will deepen.

However, the senior official acknowledged that, if sanctions do not work quickly, a military solution will be the only way to force the crisis to a successful conclusion. “As the months go by, the military options increase,” he said.