Iran Again Affirms Its Neutrality : Reaction: Egypt viewed Soviet initiative as too little, too late. It backed Bush on ultimatum.

While Iran reaffirmed that it would remain neutral, Egypt said on Saturday--before the ground war started--that the Soviet Union’s plan for Iraq’s withdrawal from Kuwait was too little, too late and it backed President Bush’s ultimatum for Iraqi President Saddam Hussein to begin an immediate retreat from the occupied Gulf sheikdom.

Meantime, in Amman, Jordan, PLO leader Yasser Arafat, who had banked on diplomatic linkage with the Persian Gulf crisis to further the Palestinian cause, clung to a fading hope that peace would spare the armies of his champion, Hussein.

“I urge the governments of the coalition led by the United States to respond favorably to peace initiatives,” Arafat told reporters at Palestine Liberation Organization headquarters in Tunis.

But as Washington’s deadline for an Iraqi withdrawal from Kuwait drew near, Arafat, the longtime Palestinian leader, was grasping at straws, appealing to Arab members of the coalition to break with the Western forces in Saudi Arabia. “It is necessary,” he said. “This is not the first, nor the last crisis in the Arab world.”

In Cairo, however, government-owned magazines and newspapers, which mirror Egypt’s official thinking, demanded that Hussein be removed from power, saying he is “an insult to the Arabs, a stab to peace and a blemish on humanity.”

The other Arab states in the allied coalition, particularly those in the Persian Gulf region, have joined in supporting the tough U.S. stand. But the Arab nations backing Iraq, noteably Jordan and Algeria, predicted disaster for the West in an attack on Baghdad’s forces.

Of particular note on Saturday was a statement by Iran, which had shown interest in a Soviet peace proposal allowing Iraq three weeks to withdraw from Kuwait. The Iranians said they would remain neutral, even in the face of a full-fledged allied ground offensive.

“If a land war starts, we will not change our position and will remain neutral,” said Iranian Foreign Minister Ali Akbar Velayati. “The only way to avert a land war is an immediate Iraqi withdrawal from Kuwait. If not, military operations will start in a matter of hours.”

Iran, which fought an eight-year war with Iraq, consistently has called for Iraq to withdraw from Kuwait. But the Iranians also have criticized the allied war effort and the presence of Western troops in the region. There had been concern that Tehran, if the war widened, might revoke its neutrality, despite its bitter relations with Hussein.

For the United States, unstinting support for the war effort from Egypt--the major Arab ally in the coalition with almost 40,000 troops in the Gulf--was regarded as vital.

The Americans got the backing they desired from Cairo in a Foreign Ministry statement that said the Soviet peace proposal failed to meet the requirements of U.N. resolutions on freeing Kuwait. Egypt’s unequivocal support came after several telephone conversations between Bush and Egyptian President Hosni Mubarak.

While the Egyptians’ official statement was strongly worded, it stopped short of calling for toppling Hussein. But the views espoused by some of the most important organs of the government-owned press left no doubt that Mubarak desires that end.

For example, Salah Monasser, editor of the influential, weekly magazine “October,” wrote on Saturday that Hussein’s survival would be “an insult to the mind and to humanity . . . (and) every Arab country should open its prisons and let out all criminals, because what they did pales in comparison to what Saddam did.”

If there were any dissent in Egypt, it came in an indirect form from ranking military figures. Some officers, while calling for a tough U.S. attitude toward Iraq, suggested that Bush should relent on the close deadline for an Iraqi withdrawal.

Gen. Ebrahim Orabi, former army chief of staff and a close Mubarak associate, said in an interview before the ground fighting began that it “is practically impossible” for the Iraqis to pull out in the time alloted by the United States. “He (Hussein) is beaten, beaten. There is no need to humiliate him further. The people in the street, while they like a winner and will praise the Americans, will react badly if they think Iraq has been humiliated.

“It is also important that Iraq be able to take out its equipment, particularly its tanks,” he said. “You don’t want Iraqi unable to defend itself.”

Against whom? he was asked. “Iran,” he replied.

In opposing the Bush approach, Jordan, which has remained officially neutral but otherwise has strongly backed Iraq, bemoaned the apparent collapse of the peace process. “This means that the ground war will take place,” said Prime Minister Mudar Badran, “and that the region will be engulfed in flames and the victims on either side will be far more than anyone can imagine.”

Both the PLO and the Palestinians already have been deeply wounded by the Iraqi invasion, despite Hussein’s insistence that it would foster the Palestinian cause. Arafat had hoped that Hussein could bargain an Iraqi withdrawal from Kuwait in exchange for an Israeli pullout from the Palestinian-populated, occupied territories.

But that deal was rapidly rejected by Washington and its allies. Last week, the Soviet peace initiative--the final, possible political settlement that seemed likeliest to incorporate Baghdad’s preferences--also dropped all mention of linkage of the Gulf crisis and the Palestinian-Israeli issue. And Jordan’s King Hussein, who had supported the Iraqi-proposed bargain, suggested to a press conference last week that Baghdad’s weakened diplomatic position had rendered linkage defenseless.

Rallying behind Kuwait, the Persian Gulf states earlier had cut off financial support for the PLO and Arafat, who had quickly embraced the Iraqis and was a frequent visitor to Baghdad during the crisis.

On Saturday, with the prospect that American-led coalition forces would clear out the Iraqi occupation army from Kuwait, a PLO official here warned against retaliation by Kuwaitis against Palestinians. An estimated 400,000 Palestinians lived in Kuwait when the Iraqi army rolled in last August. Only one in four is still there, Palestinian officials say, and most of those who fled lost their savings from well-paying Kuwaiti jobs. Kuwaiti officials accuse some of those who stayed behind of supporting Iraqi oppression of the oil sheikdom.

“There is a big possibility that some revengeful Kuwaitis will start attacking and massacring Palestinians once they return,” PLO executive committee member Mohammed Milhem told Reuters. “We will cut off the hands of any Kuwaiti who attacks our people.”

Added Milhem: “Palestinians in Kuwait are not soldiers. They are masons and workers and should not pay the price for the deeds of some others.”

An Algerian statement called the Soviet plan a last chance for peace and said an intensified allied war effort would violate the U.N. resolutions.

Morocco and Syria, both of which have sent troops to the region on behalf of the coalition, indicated they held last minute hopes that the Soviet peace plan would be accepted by the West because, as a Syrian statement said, “it would save the Iraqi people from further disaster.”

Freed reported from Cairo and Williams reported from Amman, Jordan.