U.S. Nearing Key Juncture in Iraq Policy : United Nations: White House must decide whether to hold firm on goal of ousting Saddam Hussein or strike a compromise.

WASHINGTON — Nine years after Iraq’s invasion of Kuwait threw the strategic Persian Gulf into crisis, the United States has reached a crunch point in policy.

The Clinton administration must decide over the next month whether to do battle with some of its own allies to keep alive a policy aimed at undoing the regime of Iraqi President Saddam Hussein--or compromise in ways that might help a leader who was once compared to Adolf Hitler stay in power.

The core of the U.S. dilemma is that no end is in sight to its costly strategy, despite recent rumbles of unrest in southern Iraq. The policy also is now openly scorned by three of the U.N. Security Council’s five permanent members, each with veto power, who are expected to vote next month on a course of action.

In the past, the United States has ultimately prevailed with the argument that Iraq should not be re-admitted to the community of nations as long as it refuses to comply with basic terms of the 1991 Persian Gulf War cease-fire, most notably destroying all its weapons of mass destruction. Baghdad still refuses to take the first step in the process--listing what is in its arsenal--which was supposed to have been completed in a matter of days eight years ago.

Yet Washington is finding it harder both to sustain its policy and to contain Hussein in the context of these events over the last three years:

* Iraqi troops have driven the U.S.-funded Iraqi opposition from its base in northern Kurdistan and into exile. The opposition’s political headquarters now is in London.

* U.N. weapons inspectors trying to find and shut down Iraq’s deadly nuclear, biological and chemical weapon and ballistic missile programs were expelled. Any new team would have to start the search virtually from scratch.

* Eight months of almost daily U.S. and British airstrikes in response to Iraqi provocations have failed to cow the Iraqi military. Pilots have flown about 70% as many sorties as NATO flew in its 78 days of saturation bombing of Yugoslavia, yet Iraq has managed to rebuild several facilities hit since four days of Operation Desert Fox in December led to an escalation over the northern and southern “no-fly” zones.

* Hussein has defied every intelligence prediction of internal trouble or an imminent demise.

* Meanwhile, a new UNICEF survey reports that child mortality in Iraq has doubled since the Gulf War. Although it blames the Baghdad regime for not doing enough to help mothers and children, the survey of 24,000 families also concludes that the toughest sanctions ever imposed on any country share the blame.

The confluence of these factors is widening the gap at the United Nations over what to do next about Iraq.

“Positions are more polarized than at any time in the past,” said Judith Yaphe, an Iraq expert at the National Defense University in Washington.

In its simplest form, the divisive issue boils down to principle versus pragmatism--and money.

“The Russians, French and Chinese are looking to move forward--to end sanctions and all the restrictions on Iraq with the aim of restoring full power or control to Saddam, and to normalize Iraq’s relations and do business again,” Yaphe said. “The United States and, to a lesser degree, the British are still holding out.”

When the new U.N. General Assembly convenes next month, the United States will face hurdles on two levels.

First, Russia, China and France are no longer subtle advocates for gradually easing the squeeze on Baghdad, according to U.S. officials and Iraq experts.

“The Russians particularly are parroting the Iraqi view completely. We have real concern about whether there is any resolution that the United States and Russia will be able to agree on,” a senior Clinton administration official said. “In fact, it’s unclear that we’ll get a resolution at all.”

A British envoy conceded, “There will need to be flexibility on all sides to get any resolution through.”

Second, a growing number of U.N. member states are piqued by what they see as the United States’ excessive imposition of sanctions for a variety of offenses, from domestic drug production to trade violations.

“There’s a real sanctions weariness at the U.N. generally, and on Iraq in particular. The Europeans are fed up with our sanctions on everyone on Earth,” another well-placed U.S. official said.

The weariness induced by the long-standing squeeze on Iraq was symbolized last week by the Vatican’s announcement that Pope John Paul II will travel to Iraq later this year, despite an appeal from a team of senior U.S. officials who went to Rome to argue against it.

The first round of debate at the United Nations will center on a joint British-Dutch proposal that includes three issues at the heart of U.S. policy: It reimposes a robust disarmament regime that picks up where the expelled U.N. Special Commission left off. It continues economic sanctions until Iraq has complied on disarmament. And under it, the U.N. would maintain control of how Iraq spends its oil revenues from a special oil-for-food arrangement, designed to help alleviate the suffering of the Iraqi people rather than prop up the regime.

For the United States to succeed in getting the proposal through, however, it is expected to face extraordinary pressure to cede on a fourth issue, the most controversial element of its policy: Saddam Hussein’s future.

The Clinton administration has gone one step further than the Bush administration in calling for a regime change before sanctions are lifted. But a growing number of countries are prepared to lift sanctions as soon as the U.N. certifies that Iraq has destroyed its deadliest weapons, thus allowing a totalitarian leader to remain in power indefinitely.

France, in particular, has suggested a sequence of rewards as Iraq complies, including the easing of limits on Iraqi oil sales and imports, supervised business with foreign oil companies and gradual control over its oil revenues.

For all the challenges from both its allies and Baghdad, U.S. policy has managed to score several successes, analysts say.

“We got Iraq off the front pages so Saddam’s no longer the center of attention. We found a way to constantly chip away at his self-image as all-powerful. And he looks like he’s constantly getting hammered [by U.S. airstrikes],” said Patrick Clawson, director of research at the Washington Institute for Near East Policy.

The recent discovery of ships from Iraq exporting 260 tons of humanitarian supplies--mainly baby formula--that the country had purchased through the oil-for-food program exposed the Baghdad regime’s preference for profit over helping its own suffering population.

Still, frustration over U.S. policy also plays out at home, although mainly in calls for tougher, rather than more lenient, treatment. For example, a bipartisan group of leading lawmakers, including Rep. Howard L. Berman (D-Mission Hills), sent a letter to the White House this month declaring their “dismay over the continued drift in U.S. policy toward Iraq.” They called on President Clinton to impose a deadline on Baghdad to comply on disarmament or face serious consequences.

And this weekend, the administration faced an irritant from the opposite camp. Despite pressure from the White House, five congressional staff members, representing four Democrats and one independent, left for Iraq on a humanitarian mission.