The first score in the U.S.-Iraqi peace talks went to Iraq even before the talks open. Iraqi President Saddam Hussein forced President Bush to back down on his resolve to invite Kuwaiti leaders to the talks.

Saddam got Bush to blink by threatening to invite his own unwelcome guest -- Palestine Liberation Organization Chairman Yasser Arafat.

That prospect was so contrary to Bush's current Persian Gulf policy that he caved in immediately and agreed to bilateral talks only between the United States and Iraq.

The White House and the State Department have played down the president's fast footwork because they did not want it to look like what it was -- a technical knockout of Bush in the preliminary round.

Sources with access to the secret cables between Baghdad and Washington told us what happened.

Bush surprised Saddam and U.S. allies with his offer on Nov. 30 for direct negotiations. Bush said he would meet with Iraqi Foreign Minister Tariq Aziz in Washington and would send Secretary of State James A. Baker III to meet Saddam in Baghdad.

Then, almost as an afterthought, Bush said he would invite others of "our coalition partners" to come along. Saddam became obsessed by the offhand remark. Who did the Americans intend to bring? Finally, he received secret confirmation from Washington that Bush planned to involve Saudi and Kuwaiti diplomats.

Saddam doesn't mind talking to Saudis, but as far as he is concerned, Kuwait doesn't exist and he wasn't about to entertain emissaries from the exiled Kuwaiti government. Iraqi troops have raped and pillaged Kuwait, annexed it as a province of Iraq, destroyed Kuwaiti citizenship records and moved thousands of Kuwaitis to Iraq, replacing them with Iraqis.

According to knowledgeable sources, the exiled Kuwaiti government was ecstatic that Bush would include them in the talks. And it was not a bad idea from the American perspective either, because it would have played down the Persian Gulf crisis as a U.S.-Iraq conflict.

But word came back to Bush in secret cables from Baghdad that if Kuwaitis came along, Arafat would be there too. Saddam has been trying desperately to distract attention from his own brutal invasion by tying a resolution to the Israeli occupation of Palestinian lands.

Saddam publicly hinted what his position would be in a Dec. 1 statement from the Revolutionary Command Council: "If the American side believes that it is necessary {to bring in others}, Iraq, for its part, will call on representatives of countries and parties that are connected with unresolved disputes and issues."

Some administration officials are privately critical of Bush for backing down. These sources believe it was far more important to maintain the principle that the gulf conflict is not just a beef between the United States and Iraq.

As it is, Saddam got what he wanted: one-on-one talks with the United States that both he and Aziz are likely to use as a bully pulpit to link the Arab-Israeli conflict with the Iraq-Kuwait issue.