Sanctions’ Noose Tightens Around Iraq’s Economy : Blockade: Some Iraqis wonder if sacrifice is worth the prize. Analysts say Hussein may turn to terrorism.

In Iraq, the nation believed to have the second-largest oil reserves on Earth, you can no longer get the oil changed in your car--legally.

With refineries shut down and such things as filters and hydraulic fluid no longer available, motorists are forced to rely on the black market.

Bread lines--and now egg lines--are growing by the day. Tempers are getting short. In one line over the weekend in Baghdad’s Jadriya district, a line formed at 2 a.m., and just after dawn a fight erupted. Two men went at it with knives, and the police had to break it up.

In the shops along posh Saddoun Street, the shelves have been emptied, and refuse is piling up on the sidewalks outside.

All this suggests that the global blockade’s economic noose is tightening, perhaps more quickly than analysts expected. And it gives strong support, Western and Asian diplomats in Baghdad say, to the course charted by President Bush and Soviet President Mikhail S. Gorbachev at their meeting Sunday in Helsinki, Finland.

“The West is in a very strong position now,” one European analyst said. “After less time than we had thought, the sanctions are sure to work. Time is on the side of Saddam Hussein’s enemies. They don’t have to attack. His assets will be less and less by the day.”

Also, the analysts say, President Hussein appears to have played his last diplomatic card, sending envoys to Iran, China and the Soviet Union in an effort to find a weak link in the blockade.

His appeal for a holy war against the “infidel” forces ranged against him has for the most part fallen on deaf ears. Even in the streets of this tightly policed capital there are signs, however faint, that the crisis is beginning to work on the Iraqi mind.

Although they are still firmly committed to their president and to the logic of Iraq’s conquest of Kuwait, some Iraqis are beginning to wonder whether the increasing sacrifice is worth the prize.

“The problems are getting to be too much,” one man was overheard to whisper to a companion at a downtown bar. “I stood in line for five hours for bread today, and for only four slices. The car broke down, and no mechanic will fix it. I must go to the illegal market for some part. It will cost too much.”

In a society where even thinking out loud can bring a 20-year prison term, no one is openly advocating a popular uprising. And few analysts here think the hardships are enough to trigger such a thing.

“There’s only the slightest chance of change from within the country,” a Western military analyst said. “The controls are just too severe. There’ll be some grumbling, maybe some more street fights, and a lot of frustration, but after 13 years of Saddam Hussein, obedience and discipline are too deep in this culture.”

No one is prepared to predict that Hussein will give in any time soon.

“If he does,” the European analyst said, “he will lose face, and in this society it’s not long after that he will lose his head.”

Several diplomats continue to praise the Iraqi president as a shrewd and calculating strategist. “He’s playing a terrible hand extremely well,” one said. And they now expect Hussein to turn from diplomacy to terror.

“It’s time to play the terrorism card,” the military expert said.

Abul Abbas, leader of the Popular Front for the Liberation of Palestine who directed the hijacking of the cruise ship Achille Lauro in 1985 and other acts of international terrorism, was in Baghdad over the weekend, and many observers believe his mission was to help coordinate a terror campaign.

Abbas told Cable News Network it is time for “all revolutionary fighters” to join Saddam Hussein’s holy war. He mentioned President Hosni Mubarak of Egypt as a potential target.

“Terrorism is his next logical step,” a Western diplomat said of President Hussein’s short-term strategy. “He’s played all his diplomatic cards, and he’s probably thinking, ‘OK, let the world stew in it for awhile.’ But it wouldn’t be characteristic of him to just sit back and wait. He gets frustrated and wants to move things along.”

Several of Hussein’s diplomatic initiatives might seem to be working to his advantage. His decision last week to cut off Iraqi government rations to an estimated half-million Asian workers is fueling a move at the United Nations to relax the sanctions and permit shipments of food and medicines to Iraq.

The Indian ambassador here, Kamal Nain Bakshi, said in an interview: “What we’re talking about here are third-country nationals who are no different than the Westerners the world is calling hostages, except that they’re starting to starve.”

As the world has focused on the plight of the Asian refugees, its attention has shifted from the growing number of men Iraq is holding at strategic sites throughout the country.

Dozens of men, American, British, French, German and Japanese, have been brought to Baghdad from Kuwait, processed by the Iraqi authorities and sent out, according to Western analysts, to more than a score of chemical plants, air force bases, ordnance factories and other such places.

“They’re adding to the human shield every day,” a Western diplomat said.

Iraqi officials have said their goal is to use Western and Japanese civilians not only as a shield against air strikes but also as a means of weakening the resolve of nations taking part in the blockade.

Still, the solidarity of the nations involved remains intact, and there has been little public outcry over statements by British Prime Minister Margaret Thatcher and President Bush that the presence of the hostages will not deter attack.

But if Hussein’s strategy has not proved to be altogether successful, Western analysts are not celebrating yet.

“It’s a fine line we’re walking,” a Western diplomat conceded. “You can’t be abusive and push him any deeper into a corner. He’s in a corner now, and there’s no telling what he’ll do if he realizes there’s no way out.”

Another said: “Some of us call it the Armageddon syndrome. When the sanctions really work, and when the summit meeting finishes with no result in his favor, some of us are very worried about what Saddam Hussein might do.

“It will still take some time, but after four (more) weeks, the breaking point might come. He will hold on that long, but after that something might happen, and in this context time is working against him.”