NEWS ANALYSIS : Iraqi Ambition Shifts Political Geometry of Arab World : Geopolitics: Hussein shatters the old mosaic. Syria, replacing Iraq, joins Egypt and Saudi Arabia in a leadership triumvirate. Jordan and PLO are losers.

From Cairo to Riyadh, from the council rooms of government ministries to the crowded tables of outdoor cafes, the talk across the Middle East is the same these days: How will the Persian Gulf crisis end and how will the pieces of the delicate Arab political mosaic fall back into place when it is finally over?

Arab officials and diplomats interviewed throughout the region caution that the unpredictability of Iraqi President Saddam Hussein makes it difficult to answer those questions. But Hussein’s ambition to lead the Arab world has instead irrevocably split it, they also say, and some changes can be inferred because they have already started to happen.

Perhaps most important, the countries on which the Arab world is apt to turn in the foreseeable future are Egypt, Syria and Saudi Arabia. Syria, claiming what had been Iraq’s place in this triumvirate, may even be drawn into a more moderate role that could win it a seat at the Middle East peace table.

“Only six months ago,” a senior U.S. official in the region noted, “Syria was still grumbling about Egypt’s readmittance to the Arab League. Now it is part of a remarkable new alliance with Saudi Arabia and Egypt. The basic strategic geometry of the Arab world has been totally rearranged by this crisis.”

This is not to say that after the storm over the Iraqi invasion of Kuwait the Middle East can count on a spell of calm; on the contrary, radical trends may accelerate and polarize the region.

The Palestinians, who after the failure of their uprising in the Israeli-occupied territories and the collapse of the peace process embraced Hussein as the only Arab leader bold enough to recover their lands, may fall into a despair as dangerous as it is deep. Terrorism may increase.

But if it is premature to talk about winners, two losers clearly stand out: Jordan’s King Hussein and Palestine Liberation Organization Chairman Yasser Arafat.

Unwilling or unable to break their alliances with Saddam Hussein, both have sought the safety of the middle ground, only to find themselves caught in a cross-fire from which neither is likely to emerge without mortal political wounds.

By siding with Saddam Hussein, Arafat has burned all his financial bridges to Saudi Arabia, Kuwait and other Persian Gulf states that so generously bankrolled his activities in the past.

And if the Israeli peace movement was a voice in the wilderness before, it is stone silent now.

“The Palestinian position has buried the peace process,” said Yossi Sarid, an opposition member of the Israeli Parliament who has long advocated dialogue with the PLO.

Moderate Arabs clearly share that opinion. Throughout the gulf region, it is difficult to find an official who does not speak of Arafat except in terms of disgust. In Cairo, some Egyptians are even beginning to speak the ultimate heresy, that perhaps the PLO is not, after all, the “sole legitimate representative of the Palestinian people.”

Jordan’s King Hussein still commands a bit more sympathy, and he may yet find a way to wriggle out of the isolation in which his support for Saddam Hussein has cast him. But with his economy collapsing and his people seemingly seized by an urge to self-destruct, the king will need all his near-legendary talents for survival if he is to avoid going down in history as the last and most tragic of the Hashemite monarchs.

Already there is new talk of solving the Middle East problem by turning Jordan into a Palestinian state. What is surprising is that this idea was raised most recently not by Israel’s right-wing Likud Party, but by a member of the House of Saud.

He was speaking in private and may have just been carried away by his pique. Still, to hear a Saudi prince talk like Israel’s hawkish Housing Minister Ariel Sharon speaks volumes about the changes stirring the region.

But none of these changes will begin to reshape the region until the immediate crisis posed by the Iraqi invasion of Kuwait is resolved, diplomats agree.

“Nobody’s thinking much about silver linings,” one said, “until they figure out what to do about the dark cloud that surrounds them.”

Iraq will continue to cast a dark pall on the horizon, many analysts believe, if it is only half-beaten or if it is allowed to snatch even a portion of victory from the jaws of defeat.

Saddam Hussein would be only half-defeated if he withdrew from Kuwait but retained power in Iraq and lived to fight another day--perhaps in a year or two when he has at last developed a nuclear bomb to complement his arsenal of chemical weapons.

Containment might work for awhile, but U.S. forces could not remain in Saudi Arabia indefinitely. Sooner or later, what is now an Arab fig leaf will have to be transformed into a real shield. This would entail major new arms sales to both Saudi Arabia and Egypt--sales that undoubtedly would be offset by more military aid to Israel. The stage would thus be set for a new escalation of the regional arms race that in itself could be deeply destabilizing.

Allowing Hussein to limp away with some sort of victory--for example, a retreat from Kuwait under one of the face-saving formulas proposed by Jordan or the PLO--would be at least equally dangerous, Saudi and Egyptian analysts believe.

“Saddam must be neutralized,” an Egyptian official said. “He cannot be seen by anyone, least of all himself, to have won, because this will only feed his regional ambitions in the future.”

Deepening the dilemma is the fact that Iraq’s total military defeat may also be undesirable, according to some analysts. Apart from the casualties that all-out war would inflict on both sides, “the problem with flattening Iraq is that it could turn Iran into a problem again,” a U.S. official said.

Iran and Iraq held each other in check until the final year of the Persian Gulf War, when the Iranians collapsed under the onslaught of Iraqi chemical weapons attacks. Iraq’s emergence as the dominant power in the region sowed the seeds of the present crisis, which many analysts believe can be resolved only by somehow restoring the regional balance of power.

“There used to be a balance of power and, if we ever hope to get out of here, we have to find a way of restoring it,” the U.S. official said.

U.S. and Egyptian policy-makers are hoping that economic sanctions, resolutely and patiently applied, may yet do the trick. The hope is that Iraqis will have little stomach for another long war after all that the one from which they so recently emerged has cost them. As the sanctions begin to bite, and as the soldiers on the Kuwaiti front start to realize that their families back home are hungry, they may revolt. Even if they do not, sanctions can reduce their battle effectiveness by as much as 40% over the next few months, Egyptian military planners calculate.

One problem with this scenario is that nobody seems to have even the vaguest idea of who would replace Hussein, or even whether his successor would be much better. But since they could hardly be worse, and any coup they might undertake would presumably be meant to stop a war, not start one, no one is giving this longer-term problem much thought at the moment.

Once Hussein has been dispatched and Iraq has withdrawn from Kuwait, this line of reasoning goes, any remaining problems can be handled by a United Nations or pan-Arab force stationed between Iraq and Kuwait. If more assurances are needed, they might take the form of a regional security arrangement with the United States.

The danger here consists of thinking that all this will lead automatically to a new American-led alliance in the region, or that, with the Iraqi threat neutralized, the crisis will be over. On the contrary, many thoughtful Arabs say, the turmoil sweeping the region may be just beginning.

No event in modern times, not even the Arab defeat in 1967 that so deflated Arab pride by puncturing the pan-Arabist myth nurtured by Gamal Abdel Nasser, “has shaken the region as profoundly as this crisis has,” according to Mohammed Sid Ahmed, the Egyptian commentator.

It may be hard for the West, in its rush to demonize Saddam Hussein as Adolf Hitler reincarnate, to understand the appeal he holds for many in the Arab world. It derives not from his well-earned reputation for villainy, which most Arabs have only just begun to learn about in their heavily censored press, but from the corruption and social inequities of the old order he has so brazenly challenged.

“Ever since the oil shock of the 1970s, the Arab world has been living in an inverted pyramid of wealth versus population,” said Saad Eddin Ibrahim, a prominent Egyptian political scientist. “The oil states, which represent 6% of the population, control more than 50% of the Arab GNP.”

This contradiction, in a region reared on the myth that there is but one Arab nation, “created a structural imbalance that was bound to explode,” Ibrahim said.

The example recently set by the revolution in Eastern Europe has not been ignored by Arabs disillusioned with what they have come to despise as the degeneracy and turpitude of their rulers--the Sabahs of Kuwait being no exception.

Even in Egypt, where the anti-Saddam Hussein mood is stronger than anywhere else outside the gulf region, few people are shedding any tears for the ousted emir of Kuwait.

Many Arab intellectuals hope that once Iraq is forced from Kuwait, a democratic precedent can be set by having elections to establish a truly representative government there.

“This region badly needs democracy, but we can’t conquer our way to it,” the commentator Sid Ahmed said. “We can only get there by setting good examples.”

In Kuwait’s case, however, that may be difficult because anything other than a return to the status quo could be misperceived as a gain for Iraq.

Whatever happens, many analysts believe that the political landscape of the Arab world has been permanently changed by the events of August.

“The old sheikdoms have been shaken to their foundations and will not survive,” Sid Ahmed said. “This crisis underscores the fact that, historically, these countries are finished. The only real question now is, how do we move on to a new order, roughly or smoothly, with war or with peace?”