Jordan Striving to Cut Its Losses for Siding With Iraq : Policy: U.S. will eventually renew aid, but Saudis are likely ‘to pull out every old grudge,’ diplomat predicts.

“The south of Iraq will become a large graveyard for every invader against this pure land.” Another military communique from Baghdad?

No, it was Jordanian Prime Minister Mudar Badran addressing Parliament just hours before the suspension of operations in the Persian Gulf War.

Jordan’s official policy during the conflict was neutrality, but its politicians, press and people wore their hearts on their sleeves. They were with Saddam Hussein. Now approaches the time for cost analysis.

“What we must do now is figure out how to recover from all of this,” said Abdullah Toukan, an adviser to the royal palace. “We must determine the best role for Jordan in the postwar situation.”

The Jordanian tilt, loud on the streets and echoed in the words of King Hussein and his brother, Crown Prince Hassan, has already seriously damaged Amman with two of its traditional benefactors, the United States and Saudi Arabia.

Some diplomats here question whether, after the war, things can get much worse. Squeezed by the U.N. embargo that shut down its profitable trade with Iraq and denied the remittances that Jordanian expatriates were sending home from Kuwait just seven months ago, Jordan’s economy has suffered an $8-billion loss, Badran has estimated.

The Jordanian tilt added to the loss ledger. Early in the crisis, Saudi Arabia applied the Arab rule that the friend of my enemy is my enemy, shutting down a pipeline that supplied the bulk of Jordan’s oil and blocking cross-border trade. Later, Washington questioned Amman’s stance and ordered a review of this year’s $57-million foreign aid package.

The Americans have short memories and the aid will eventually be released, a Western diplomat predicted. But, he added, the Saudis are likely “to pull out every old grudge” before making up with Amman.

Now, most Western diplomats and other foreign analysts agree, Jordan’s surest asset is the king himself, over the years a practical moderate and a veteran survivor in the political tides of the Middle East. It’s almost as if part of his royal title is the phrase “no better alternative.” Other alternatives would involve a rising Islamic fundamentalist tide here or the Palestinian majority of Jordan’s 4 million people.

On Friday, King Hussein demonstrated his powers of political healing, congratulating the Kuwaitis for the recovery of their country in a nationwide address on the Gulf War and extending sympathy to the Iraqi people.

“This chapter ended at last in one of the most cruel national disasters which our (Arab) nation has ever endured,” he said of the crisis that tested Jordanian diplomacy. And he called for prompt international efforts to resolve the Israeli-Palestinian problem.

Saddam Hussein is right on one score: the lasting problem of the Middle East is and will be the Palestinian issue. Jordan and its king are regarded as a bridge to diplomacy on the problem that has figured in almost every war in the region over the last four decades.

The Palestinian connection is likely to affect Amman’s relationships in the postwar world. For instance, Syria, a member of the allied coalition that was roundly attacked by pro-Iraqi politicians here, is likely “to be least unfriendly” among the alliance partners, one diplomat argued.

The Damascus government, determined to win back the Israeli-occupied Golan Heights, will want to exercise maximum possible influence in negotiations during the peace process, he said, and the way to assure that is to extend its influence in Jordan, supplanting defeated Iraq.

Jordan’s government remains optimistic about its postwar political role despite the potential costs of its pro-Iraqi stance. “I think we are going to be very active in the future,” said Information Minister Ibrahim Izzeddine, a former ambassador to Washington. “I am sure Jordan can continue to play an important role . . . a positive role in the postwar era.”

Meeting with reporters Thursday, the day the guns fell silent, Izzeddine added:

“There are geographic, historic indications that normally pressure governments to act at a certain moment. I think all governments are going to be pressured after a while to re-establish contacts.”

Jordan’s policy on the war has evolved from the day of Iraq’s invasion of Kuwait. The Jordanian government condemned the Iraqi government, which was a partner with Jordan, Egypt and Yemen in the Arab Cooperation Council. When Saddam Hussein wrapped himself in the flag of Palestinian nationalism in the first weeks of its occupation, the streets of Amman flowered with pro-Hussein posters.

When the air war began Jan. 17, the streets turned nasty toward Americans and Europeans and remained so at the end of last week, despite a blanket of police around the hotels where foreign journalists and other visitors were encamped.

The Palestinians were bitter and angry--and their allegiance was to Iraq’s Hussein, not Jordan’s.

“In the 1973 (Arab-Israeli) war, who helped the Palestinians?” asked Osama Jarrar, a 33-year-old Palestinian shop owner. “Saddam. Not Jordan. Jordan did not fight in 1973.”

That sort of split allegiance makes postwar prospects even tougher on the leadership here. Jordan is already on the outside with the coalition states, which pointedly left Amman off the invitation list for a recent conference in Cairo.

The divisions in the Arab world opened by the Persian Gulf War will not easily be papered over. Economic damage will eventually be repaired by the necessity of trade--although Jordan traditionally favors Europe for its imports--but the political differences will take time to mend.

Palestinian support for Iraq has already translated into antipathy toward Jordan among the Gulf states. The Kuwaitis, particularly, have been angered by the Palestinian-bolstered Jordanian tilt.

But in time, diplomats say, even a divided Arab world will again focus on the common enemy--Israel. And Jordan, the Arab state having the longest frontier with Israel, will by reason of geography, if nothing else, be a factor.

To the West, a moderate Jordan was always the buffer between Israel and militant governments such as Iraq’s. To the Arabs, it was the Western front in the struggle, the potential tinderbox of feared Israeli expansionism.

The answer to stability in Jordan and the Middle East, Information Minister Izzeddine insisted at week’s end, was a solution to the Palestinian problem. He demanded that the United States and other permanent members of the U.N. Security Council apply the same pressure for compliance with U.N. resolutions on that issue as they did on the Iraqi invasion of Kuwait.

The attitude of the Bush Administration toward Jordan remains ambivalent. President Bush, Secretary of State James A. Baker III and other officials are angry and resent what is seen in Washington as King Hussein’s sympathy for Iraq. On the other hand, the monarch is considered the least objectionable Jordanian around. If he were to be deposed, according to thinking in Washington, his successor regime--most likely a radical Palestinian administration--would be much worse.

Baker told the House Foreign Affairs Committee on Feb. 8 that the alternatives to the king “are not a pretty picture.”

And on Friday, President Bush said at a press conference that the United States has “no lasting pique with Jordan.”

Times staff writer Norman Kempster in Washington contributed to this article.