WE ARE rushing headlong into all-out war in the Persian Gulf. There is an alternative to this painful course. Continued reliance on the United Nations embargo -- possibly augmented by air strikes -- promises a much more favorable result.

If this week's last-minute round of diplomacy fails and the United States applies its new military doctrine of overwhelming force, the carnage will be severe -- probably thousands of American casualties, as well as widespread death and destruction in Kuwait and Iraq. A massive clash with Saddam Hussein's well-entrenched forces on the ground as well as in the air also will have severe long-term impact on U.S. public opinion, U.S. standing in the Middle East and other key American interests.

One of the most dangerous forms of human error is forgetting what one is trying to achieve. In the gulf crisis, it is crucial that we look beyond our anger at Saddam and remind ourselves of precisely what U.S. interests are in the crisis and what we seek to accomplish. Underlying our support for the United Nations' resolutions calling for Saddam to withdraw from Kuwait and allow the restoration of the Kuwaiti government are several important objectives.

Our main goal should be to establish a precedent for a new post-Cold War era, in which the community of nations, working through the United Nations and other organizations, can insure that would-be aggressors do not profit from invasion, coercion and force.

Subordinate goals should be: To avoid major disruptions in the regional balance of power in the Middle East, and at the same time to avoid encouraging internal foes of friendly regimes; To maintain stability in the world oil market, which has adjusted to the loss of Iraqi and Kuwaiti oil, (8 percent of pre-crisis world supply), by insuring that Saddam cannot follow up his aggression against Kuwait so as to eventually gain leverage over Saudi oil (9 percent of world supplies) or of the entire Middle East's (30 percent); To deny Saddam the ability to field weapons of mass destruction, including an atomic bomb, and to prevent the spread of such weapons elsewhere in the region.

To achieve these goals, the United States and its international partners have available a choice among two general courses of action:

The first is all-out war, including heavy reliance on the prompt offensive use of ground forces. U.S. gulf commander Gen. H. Norman Schwarzkopf has said it could take up to six months to win such a conflict. If we get bogged down, it could take longer. In addition to troop losses, such a campaign would cost about $50-60 billion, plus that much or more in indirect expenditures such as future medical and other care for the casualties. Efforts to eliminate Saddam or occupy Iraq could take longer and cost more.

The second is continued sanctions, possibly augmented by air strikes. This course would balance power with restraint; it would measure out sufficient force to make unmistakable to Iraq and the rest of the world the adverse consequences of aggression.

We would continue the international embargo, including its enforcement by the naval blockade. To defend Saudi Arabia, we would retain and rotate a sustainable deployment of ground forces, a level lower than the forces there now.

Under the current international embargo, only a trickle of goods is getting in or out of Iraq; oil exports and earnings are nil and civilian production is estimated to be down by about 40 percent. In time, lack of spare parts will erode Iraq's military capabilities, and civilian and military production will fall further.

But over the next six to 12 months, it may become evident that a blockade by itself will not do the job. In that case, we would favor supplementing the naval blockade with selected but powerful air strikes.

Before this step was taken, however, it would be important that our allies and the American people be convinced that sanctions alone had been given a full chance to work and had failed. It would also be important that the public be better convinced that the interests at stake justified use of military force.

While the shortcomings of strategic air campaigns are well known, modern air delivery systems can inflict great damage on the Iraqi war machine and the economy. Combined with the naval blockade, a well-directed air assault could force Iraqi capitulation. And if, over months, it did not achieve its goal, there remains the possibility of a later ground attack against greatly weakened Iraqi forces. In our view, all-out war promises the least success in achieving the objectives we have outlined.

First, it would not necessarily discourage other potential aggressors. Defeating Saddam Hussein promptly in an all-out war would send an unequivocal signal that this aggression had not been tolerated. But if casualties were high, U.S. sentiment probably would be driven toward a more isolationist posture. Many Americans would be dismayed by the carnage and resentful that our allies were not paying a similar price. (The seeds of such resentment already exist.) They could be expected to oppose any comparable U.S. role in the future. The message would be that the United States had neither the inclination to work in concert with other nations nor the stomach to repeat the anti-Iraq action. Many of our current collaborators, who are ambivalent at best about the war option, might also lose interest in future cooperation with us. A world of growing brutality and chaos would become a likely prospect.

Second, Middle East instability has already been exacerbated by the rallying of Moslem extremists toward Iraq, and no option is likely to be very successful at the delicate task of restoring a balance while shoring up friendly but shaky regimes.

But even a successful all-out war could throw the Middle East into chaos. With the destruction of much of Iraq's military capability, Syria and Iran could be expected to vie for regional domination. Other nations -- including Saudi Arabia, Jordan and Egypt -- could be destabilized, with strong internal forces rising in opposition, enraged by their governments' collaboration with Americans who had killed thousands of their Arab brothers. In all this ferment, U.S. influence could be reduced to shoring up friendly regimes, if we had the stomach for it. All these troubles would be exacerbated if Saddam were to succeed in drawing Israel into the war.

Third, with instability in the Middle East, oil supplies would remain quite uncertain. If Syria or Iran replaced Iraq as the potentially dominant regional power, or if friendly governments in Saudi Arabia and other oil-producing countries were overthrown by hostile, fundamentalist groups, supplies would be threatened once more.

Finally, a well-executed attack on Iraq could sharply set back its efforts to acquire weapons of mass destruction but also could create problems elsewhere in the region. The crisis has already had this effect; the Saudis, for example, are reported to be newly seeking to buy a nuclear weapon. The increased regional instability we can expect after a war can only heighten these incentives. In sum, the all-out war option seems highly counterproductive in the long term and certainly not worth the thousands of lives it would cost.

Much more promising is continued reliance on sanctions.

First, successful sanctions would be most likely to produce a stable world order. Critical to this outcome is that a substantially lower level of violence would be more likely to result in continued public support for an active U.S. international role.

Second, this option would likely be less disruptive to regional stability. But any approach that left much of Iraq's military capability intact would produce a need to retain a peacekeeping force on the front lines, either in Kuwait or Saudi Arabia, and perhaps elsewhere. While internal destabilization in other countries of the region would remain a concern, this threat would be lower than that produced by all-out war, especially if the peacekeeping force were primarily Arab.

Third, although oil supplies would remain uncertain, we would be better able to reduce our vulnerability to disruption of those supplies. The key is the strategic petroleum reserve, which provides us an assured source of oil which we can use to make up supply shortfalls or dampen price hikes an unfriendly nation might seek to impose. The reserve already holds almost 600 million barrels, enough for us to increase market supply by over 3 million barrels a day (more than we import from all Arab OPEC nations) for as long as six months. For about $15 billion, or a fraction of the estimated cost of a prompt, all-out war, we could increase the reserve to the 1 billion barrels recommended by most experts. In the longer term, we could impose an oil tariff to induce conservation (while also generating revenues) and reverse cutbacks in development of alternative energy sources.

Finally, the key to halting proliferation in the region lies not merely with what we do in this immediate crisis but rather in a sustained campaign among potential suppliers to cut off sources of critical materials and technical cooperation. Successful sanctions would be most likely to encourage such a campaign, but they must be supplemented by provisions for continued International Atomic Energy Agency inspections and additional U.N. inspections to insure supplies remain stemmed.

On all counts, therefore, the sanctions-air strikes approach promises to serve U.S. interests better than a prompt, all-out war. Some argue that the threat of all-out war is the key element in the U.S. approach -- a weapon in itself -- and that Saddam must be convinced that the use of overwhelming force is imminent before he will back down. Arguments that question the all-out war option, they contend, undermine that strategy. But the momentum toward such a war, whose results threaten to be so costly, may have become dangerously irreversible. War may occur whether it serves our purposes or not.

For the past generation, Americans have regretted that in Vietnam, we let the passions of the moment and a lack of healthy skepticism toward presidential claims obscure a clear-headed assessment of our national interests. The result was that we were driven into a costly, divisive, and ultimately counterproductive expansion of a war that lacked adequate public support. Let's not spend the next generation wondering how we came to repeat that mistake.

Paul H. Nitze most recently served in the Reagan administration as special adviser on arms control to the president and secretary of state. Michael F. Stafford is executive director of the Center for Science and International Affairs at the John F. Kennedy School of Government at Harvard.