Hussein Seen Using Talks to Discuss His Future Role : NEWS ANALYSIS

President Saddam Hussein believes the United States and Iraq can peacefully resolve their differences, and he may use the anticipated U.S.-Iraqi talks to discuss with Washington his role in the Middle East beyond the immediate Persian Gulf crisis.

That opinion emerged from interviews with foreign diplomats in the Iraqi capital and several Westerners here who have met with him in recent days.

“His No. 1 aim--in addition to saving his own (neck)--is to be the leader of this region,” said a longtime senior diplomat in the Middle East.

“Hussein wants to get some assurances and fix some long-term rules of behavior regarding himself personally,” added a Soviet diplomat. “This is very important to him. In fact, it’s very much a preoccupation of his.”

While the sources were not unanimous on Saddam Hussein’s thinking, there was general agreement on these points:

* Hussein was surprised by the size and speed of the U.S. troop deployment in response to his Aug. 2 invasion of Kuwait.

* He wants to avoid war to avert destruction in Iraq or other countries, and to ensure his personal safety and his leadership among Arabs in the Mideast.

* He was surprised by President Bush’s suggestion of talks and saw them as the best chance for peace.

* He is fearful that Israel could sabotage the U.S.-Iraqi talks by somehow provoking hostilities.

* He decided to release all foreign hostages to improve the climate for talks, to forestall any hostile Israeli move and to enhance his image.

“He wants peace. He doesn’t want to damage his country or any others. He wants to rebuild his country,” said one Westerner who spoke with Hussein recently. “But he’s very afraid that Israel will deliberately create a spark that could plunge the whole region into war.”

Hussein told at least three visitors last week that he believes Israel might be tempted to ecourage combat between Iraq and the international alliance arrayed against Baghdad.

“They have big misgivings about Israel,” a senior Soviet diplomat here agreed.

It was this fear, plus his desire to create a more favorable climate for the U.S.-Iraqi meetings, that led Hussein to free thousands of foreign hostages--a move that he also believed would cast him as a peace-seeking humanitarian, sources said.

But several senior diplomats here dismissed Hussein’s fear about Israel as unfounded. “I don’t think Israel will breach what’s going on,” said one diplomat. “But he should be worried all the time--all options are open.”

Several sources who have met recently with Hussein said he was surprised both by the massive U.S. troop deployment in the Persian Gulf region and by President Bush’s initiation of U.S.-Iraq talks.

“He felt the U.S. has overreacted” by ordering more than 400,000 troops to the Middle East, one source said after meeting with Hussein. “He said he sought no confrontation with the U.S. or the American people and indeed none with any country.”

The speed and size of the American buildup were factors in Hussein’s decision last week to free all hostages, they said. The release also was a countermove to Bush’s proposal for Iraqi Foreign Minister Tarik Aziz to go to Washington for talks, followed by meetings here between Secretary of State James A. Baker III and Hussein.

“I think Hussein wanted to regain the initiative,” the Soviet analyst said.

The exchange of diplomatic visits is widely seen as a potential first step toward a peaceful resolution of the crisis.

Iraq at first called the hostages a deterrent to attack, but Hussein had become convinced that they would no longer prevent war--a message brought to him in a single afternoon by two delegations of Western visitors, including former Texas Gov. John B. Connally, Houston oil magnate Oscar W. Wyatt and a group of Christian church leaders here for a peace conference.

Some visitors told him that holding the hostages only increased foreign enmity toward Iraq.

“He finally realized that the keeping of hostages--or releasing them slice by slice--was counterproductive,” said another longtime diplomat in the region.

This ambassador also said that Bush’s “very dignified and solid holding of principles” that the hostages must be freed and their fate is non-negotiable contributed to Hussein’s amnesty decision.

“Saddam released all the French because Mitterrand was tough. He also released the Soviets after Gorbachev talked very tough,” the ambassador said. Washington’s diplomatic initiative was precisely the sort of face-saving gesture that Hussein needed, he added.

Hussein also became convinced that his release of hostages would further increase pressure in the United States for a peaceful solution, according to sources who have met with him recently.

Diplomats here said Hussein believes that hostage-taking served a useful purpose, buying time for tempers to cool and for talks to get under way between Iraq and the United States.

“Saddam Hussein is a very, very clever man. A shrewd, cunning, intriguing bastard--whether we like it or not,” said one senior foreign embassy official. “He would make a very successful chess player. He plots not one step at a time but 16 steps at a time.”

At least one alliance diplomat said Washington’s opening a dialogue with Baghdad was premature. “We should have let him sweat it out longer,” he said, meaning that Washington should have waited until much closer to Jan. 15, the deadline imposed by the U.N. Security Council for Iraq to withdraw from Kuwait.

Instead, the analyst complained, “We bare our teeth and then the next day say, ‘Gee let’s talk about it.’ ”

Although Baghdad has moved to reduce the tension, the question remains whether Hussein is sincere in his expressed desire for a peaceful solution to the stalemate and what, if anything, he is willing to concede during the talks.

“It’s a very deep question, isn’t it?” said one Western ambassador.

“If Hussein is thinking of peace,” a Middle East ambassador said, “then everyone will help him do that. But if he’s just maneuvering, it will be catastrophic--especially for him.”

Several of the foreign analysts said they expect few if any significant results from the Washington meeting. “Tarik Aziz will say no, no, no, no, no to everything,” one official said. “He can’t say yes. Everything rests between the lips of Saddam Hussein.”

Thus, the subsequent Baghdad talks between Hussein and Baker could be the crucial meeting.

In the end, diplomats here speculated, Iraq may well agree to withdraw from Kuwait, either partially or completely.

Baghdad sent mixed signals this week on that possibility. Foreign Minister Aziz hinted in an interview Monday with Cable News Network that Iraqi withdrawal from Kuwait might be on the table. But later that day, another senior Hussein adviser, Information Minister Latif Jasim issued a statement saying that prospect is “wishful thinking.”

Even if Iraq withdraws from Kuwait, policy-makers will face other decisions.

“Then what do we do?” asked a diplomat from a country in the anti-Iraq alliance. “Do we kill him? That’s one option--get rid of him completely. Or do we let him live and then we maintain a military presence in the region to deter him? We may well start a new order in this area.”

Allowing Hussein to remain in power--”as the bogeyman”--could provide the unifying reason for keeping a multinational military presence in the region, several other diplomats conceded.

“Hussein’s committed a crime and he has to pay for it. But how do we punish him?” one ambassador asked. “If he gets away with it, by saving his own life, that will be his biggest gain. And if you don’t break his might, he won’t hesitate to wait for the right time to do the same thing again.”