NICE, FRANCE -- For about 1,000 wealthy and mega-wealthy Kuwaitis taking their annual holiday here, the splendor of the French Riviera is gone. The sun is just a burning ball; the Mediterranean just a blue watery mass.

Ever since they woke up here to learn that Iraq had annexed their homeland, these reluctant exiles have become prisoners in paradise.

"On August 2nd, we forgot everything," says Hind Ghunaim, 42, a sociologist at Kuwait University whose husband was once a member of the Kuwaiti emir's cabinet. "We are alive without identity, without honor. What are we thinking about? Our country. Our aim is to return to our country."

In the now-defunct Kuwaiti Airlines office, across the street from a sparkling sea, Kuwaitis dressed in leisure suits and tennis shorts gather daily to hear the latest news and plan their next move, their next protest rally. They have found themselves in the unfamiliar strait of needing to spend frugally and ration their cash. The Mercedes-Benzes are going back to the car rental companies.

Dejected, they drink cardamom coffee and sweet mint tea for hours. They have become news junkies, switching among the French 24-hour news radio France Info, BBC-1 and Radio Monte Carlo. Then it's upstairs to someone's apartment to watch the 1 o'clock news in French, the British 1 o'clock news an hour later on cable and CNN in between.

Committees are distributing money to Kuwaitis caught without cash and are running an anti-Iraq information campaign. Some say they will go back to the gulf and organize themselves to fight Iraqi President Saddam Hussein.

"Why are we so shocked? Since 1961 our government has given money and loans to all the Arab governments. We were like the cow that gives milk. We gave long-term loans to build roads, hospitals. We gave private loans -- especially for Iraq," says Tareq Nasrallah, a sheep importer who is organizing the Kuwaiti community on the Riviera.

Nasrallah's wide-set, almond-shaped brown eyes mark him as a Kuwaiti with generations of history in the desert. His Nice apartment overlooking the boardwalk marks him as a regular on the Cote d'Azur.

Like most of the Kuwaitis, Nasrallah brought enough cash with him to last the summer. They are lucky. After the invasion all their credit cards were canceled. Those with accounts in French banks can withdraw up to 50,000 francs ($8,000) a day. But most of their money is frozen in Kuwaiti banks, and the value of the dinar has fallen 75 percent since Saddam's troops invaded the emirate. Few kept foreign bank accounts; the Kuwaiti dinar used to be one of the most stable currencies in the world.

As if swatting away pestering flies, the Kuwaitis shake their heads to chase away the nagging thoughts: "What if Saddam does not withdraw? ... What if Kuwait remains annexed?"

"Our money has lost its value, but I am quite sure the emir will do something," says Nasrallah with bravado. His import office in Kuwait, unhappily situated above the Iraqi airlines office, reportedly has been taken over by Saddam's soldiers.

"We are very happy about the response of the United States; no one in the world accepts what has happened to Kuwait. We feel it inside," he says. Later, though, he murmurs, "We all feel as if we're just living in a dream. Like we'll wake up from all this."

"No," says Ahmed Refai, 57, wearing a blue leisure suit. "The people who can help us are too far away -- Egypt, Morocco. Syria does not have a big army."

Refai remembers Kuwait before the oil, when Kuwaitis were sea merchants, bringing provisions from India to Iraq and Kuwait. In the 1950s the tiny state struck oil, and the government shared the wealth, buying land from its citizens at 10 times its estimated worth. "Whoever invested made millions. Whoever spent it has nothing," Refai says.

But he is also aware that many Arabs do not weep for the Kuwaitis. "The masses are jealous of us -- we have schools, we have everything. But they should ask God about the oil -- it's not our fault we got the oil," he says. "It's not my fault I'm rich."

In the basement of the Kuwaiti French bank next door, a group of Kuwaiti men plans a demonstration for later that day in nearby Cannes.

For some of the exiles, the pain and worry are especially devastating. Hind Ghunaim's 18-year-old son is in Kuwait City, looked after by the family cook and driver.

"I spoke to him the first day. He said, 'Mother, I've never seen planes over the house before,' " she said, sitting in the office of the bank manager. International phone lines have been cut since then.

Her words come tumbling out in half-sentences and half-completed thoughts. "We have been indoctrinated, brainwashed by this pan-Arabism all our lives. We should have taken the aggression of Iraq against Iran as a warning... . The irony of it -- he accused Kuwait in the invasion. This man has Hitler ... and Genghis Khan behind him.

"I'm not being emotional, but what is the legality here? What is the difference between annexation and withdrawal? How can Saddam say he annexed and then say he is withdrawing from his own country?" Her voice chokes; she is near tears.

"My daughter asks me what is the difference between the Iraqi invasion and the Israeli invasion of Palestine? Aren't both by force? I said it very precisely to her, 'It's the same. It's an aggression.' "

Her 10-year-old daughter, Alia, listens intently, fingering a red straw hat with a flowered band. Ghunaim says they have drastically changed their lifestyle since the invasion; the money she brought to buy clothes is now carefully rationed for daily life. Her 16-year-old daughter is -- for the first time -- looking at price tags before buying.

"My servants have not asked for a salary. Our Indian boy watched the invasion with tears streaming down his face," she says. "That boy hasn't asked for a penny."

But she and her husband are aware that there is a chance they could lose everything. "It is very disorienting. We don't know who we are. You have money, but you don't have money. This is the paradox of our life," she says.

Her husband, Abdelrahman, who owns construction companies in Kuwait, said he would live in another country rather than spend a day under the rule of Saddam Hussein.

He once resigned a cabinet post over political differences with Sheik Jabir Ahmed Sabah. But he and his wife, like the other Kuwaitis, have rallied to defend the emir.

They pile into their Mercedes-Benzes to drive to the rally in Cannes where girls in Chanel belts and Gucci sunglasses carry signs that read, "Saddam Assassin" and "Help us, we've been invaded." Children wave Kuwaiti flags and pictures of Sheik Jabir.

Ten-year-old Alia Ghunaim says she is ready to fight Iraq to free her country. Her mother questions her, "But aren't they our brothers?"

"No."

"Why?"

"Because they lied to us and said that we are brothers."

"And where is your money?"

She replies: "With Baba Jabir {the emir}. My money is safe -- he will save it for me."