CRISIS IN THE PERSIAN GULF : Oil Field, 2 Isles May Be Iraq’s Real Goal : Strategy: The U.S. worries that Hussein might pull back and try to hold on to this territory.

One of the reasons virtually no Western experts anticipated Iraq’s annexation of Kuwait, officials now say, is that no one thought Iraqi President Saddam Hussein had any interest in possessing most of the country.

What Hussein wanted, the officials believe, was only a small part of his neighbor’s land--two strategic islands and a strip of territory covering the southern end of an oil field that straddles the Iraq-Kuwait border.

Now, U.S. officials worry that Hussein might try to withdraw to that line, making a “concession” of land that he never really wanted so that he can hold onto what he really coveted all along.

The territory in question has two major points of interest--the Rumaila oil field, an oblong tract of land located mostly in Iraq with its southern end in Kuwait, and the two islands of Bubiyan and Warba, which together control the approaches to Iraq’s chief port.

Before the invasion, U.S. officials were neutral on the question of whether Iraq’s claims to that land were valid.

“We have no opinion on Arab-Arab conflicts, like your border disagreement with Kuwait,” U.S. Ambassador April C. Glaspie told Hussein on July 25, in the last meeting between a U.S. official and the Iraqi president before the invasion.

Now, however, the Bush Administration insists that Iraq must withdraw unconditionally from all Kuwaiti territory.

“We do not think the emir (of Kuwait) should negotiate with a gun at his head,” a senior Administration official said. Any territorial concessions that Kuwait might make while Iraqi troops remain on its soil would merely reward Iraqi aggression, Bush and his advisers argue.

At various points in its history, Iraq has asserted claims to all of Kuwait, but the claims have been particularly insistent about Bubiyan and Warba.

The islands are barren mud flats, useless for most purposes. But they are all that prevent virtually landlocked Iraq from being a nation with a 200-mile coastline and the potential to be the dominant naval power in the Persian Gulf.

Now, all Iraqi shipping from its ports at Basra and Umm al Qasr must sail around the two islands. A third port, Al Faw, was largely destroyed during the Iran-Iraq War and remains essentially closed. Its shipping lanes also are dominated by the Kuwaiti islands.

Rumaila, meanwhile, is one of the Middle East’s largest pools of oil. The field runs about 50 miles from north to south, with only two miles at the southern end lying inside Kuwait. Oil industry experts say that the field might still contain 30 billion barrels of oil, despite years of pumping.

Before the Iran-Iraq War, Rumaila, where oil was discovered in 1953, was one of Iraq’s biggest oil production centers. During the war, the Iraqis largely shut down the field to protect it from Iranian attacks. The Kuwaitis, meanwhile, continued to pump oil from their portion.

According to Iraq, the Kuwaiti pumping effectively siphoned oil from Iraq’s side of the field to Kuwait’s, shifting resources 10,000 feet below ground in a way that damaged Iraq’s interests. Saddam Hussein has claimed that Kuwait owes his country $2.4 billion for oil taken improperly from the Rumaila field. Kuwaiti officials have denied that charge.

But some independent oil analysts say that the Iraqis may have a case--although perhaps not for that full amount.

Kuwait has declined to say how much of its oil comes from Rumaila, but industry analysts assume that the percentage is relatively small given how little of the field lies inside Kuwait. Most Kuwaiti oil lies in the southern part of the country, near the border with Saudi Arabia.