SADDAM HUSSEIN comes to the bargaining table under an immense burden to prove his good faith. He lied to his Arab friends about his intentions in Kuwait. He demolished Arab precedent and respect by invading a fellow Arab state -- it turns out even Moammar Gadhafi can't stomach it. He grossly violated international standards by taking hostage legions of foreign nationals, whom his foreign minister now calls ''guests for a while to live with our people.'' All this, on top of his driving personal and strategic ambition, is bound to affect the foreign reading of his diplomatic initiatives. It is striking, nonetheless, that he feels it necessary to add a diplomatic side to his policy of smash and threat. He cannot have been prepared or pleased to see the military, economic and diplomatic resistance his performance has evoked, and he is now sharpening a diplomatic response to it.

Yesterday, for instance, Iraqi Foreign Minister Tariq Aziz met the international press gathered in Jordan to insist that his country was ready to talk with the United States on the basis of an earlier statement in which Saddam Hussein offered to trade back the hostages if the allied military buildup and economic embargo were removed. As for Iraq's grab of Kuwait, instead of its being described as a done deal, it is now depicted as a ''question'' yet to be resolved -- as an ''Arab issue.'' By this Saddam Hussein presumably means that Kuwait's fate is not to be decided in the context of the United Nations resolutions condemning Iraq's takeover but in a discussion among Arab states. At worst, this is a formula for ignoring international law and opinion and for stirring up anti-American passions among the Arab masses. At best -- a long shot -- the Iraqi words open a tortuous path of negotiation by which the crisis could yet be eased.

The obvious danger is that Saddam Hussein, rather than setting out to negotiate a solution restoring Kuwait's sovereignty, is merely throwing sand in the face of his critics and adversaries and waiting for their unity, patience and resolve to fray. The right answer for the strange new family of allies arrayed against him is to keep on doing what they are doing -- strengthening the military buildup, tightening the diplomatic encirclement, demanding that he free all hostages, firming up United Nations approval of enforcement of sanctions -- even as Iraq's every diplomatic move is assiduously explored. The Iraqi leader, fighting back, portrays himself as a victim of imperialist/Zionist aggression and a hero of Islamic purity and Arab pride. This is not simply propaganda and political combat, it is diplomacy in the area's familiar bazaar style. It would be foolish to accept his first offer.