BAGHDAD -- For 1,001 Arabian nights in this city, Scheherazade told the tales that saved her life. For far less time than that, Saddam Hussein has been spinning tales of his own, changing them little in public but enough in private so that Iraq's bottom line can finally be gleaned. Iraq wants what George Bush may not be inclined to offer: a measure of respect and ironclad guarantees of security.

This, at any rate, is the gist of what Saddam Hussein reportedly told the head of the French National Assembly's Foreign Affairs Commission, Michel Vauzelle. Western sources say that in a meeting lasting more than four hours last week, Hussein said America must recognize Iraq as a regional power and, in fact, appreciate how useful it could be to Washington. A powerful Iraq could not only balance a powerful Syria and Israel but Iran as well.

Iraq is also seeking an understanding with the United States under which economic relations would be restored to what they were before the crisis -- at minimum. Iraq is particularly seeking stability for the oil market -- ostensibly one of the issues that caused it to invade Kuwait.

Finally, Vauzelle was told that Iraq must be seen as doing something for the Palestinians, in exchange for which it would relinquish Kuwait. Hussein's words were conveyed in an almost poetic, emotional way. He portrayed himself as an Arab first and an Iraqi second. As an Iraqi it pained him to abandon Kuwait. As an Arab, he could do so to advance his people's premier cause: the establishment of a Palestinian state. But neither the diplomatic community here nor, reportedly, the Palestinians themselves take Saddam's breast-beating at face value. He is, they say, a survivor first and an Iraqi second. There is no third.

Whatever Hussein told Vauzelle, Iraq's foreign minister, Tariq Aziz, is not likely to say the same thing when he meets Secretary of State James Baker in Geneva. In the first place, the conventional wisdom here is that only Saddam Hussein himself can cut a deal. Second, it seems that Iraq is not willing to offer the United States anything at all unless Washington offers something first -- a signal that the government is known to be seeking. Without it, the Geneva meetings may turn out to be a total bust.

The flurry of diplomatic activity has produced bursts of optimism, followed by pessimism or what some might call realism. The announcement of the Geneva meeting was greeted as a favorable omen. But then Bush said Baker would not come here for additional talks. The president then delivered a radio speech that was seen here as bellicose, and got a response in kind from Saddam Hussein: a lilting address to the troops in which they were extolled to fight for Kuwait and "against the tyrant of the age, the foolish American administration {and} its created Zionist entity." So much for conciliation.

The speech, of course, was typical Middle East madness, a kind of fever that seizes all regional leaders whenever they face a microphone. But whatever the rhetoric, the address did reflect two deeply held views of Saddam Hussein. The first is that Israel is an American creation and will follow Washington's orders. The second is that the United States wanted to topple Saddam Hussein's regime even before the Aug. 2 invasion of Kuwait. Taken together, the two are a stunning if unrealistic homage to American power. Not in this city is America seen in decline.

On paper, then, Iraq has every incentive to do precisely what George Bush wants: pull out of Kuwait, pronto. But what Washington calls an invasion is here incredibly termed a sacrifice -- and something must be gotten for it. The insistence that Iraq just go back to where it was is simply dismissed. The American insistence that aggression go unrewarded is here considered downright insulting, and Washington's concern for Kuwait, a nation almost universally loathed here, is considered just plain perplexing. Even pro-Western Iraqis have little sympathy for Kuwait.

Some of these sentiments may be nothing more than pre-Geneva posturing. But in Western terms, they may also represent the huge cultural and political gap between Washington and Baghdad. Indeed, it hardly seems possible that Saddam Hussein and George Bush live in the same world. In Washington, essays are written on how bad guys have to be punished. But in this part of the world, bad guys are just plain guys. Why single out Saddam for crushing the loathed Kuwaitis? nearly everyone asks. Bush's "new world order" is not considered an answer.

Meanwhile, Baghdad waits and hopes that Baker will arrive in Geneva with something that Iraq can label as a new offer. It then would have something of its own to offer -- but insists that Washington go first. In some sense, the two sides could be considered close. But what seems to separate them, aside from the issue of Kuwait itself, is a striking difference in outlook and perception that evokes Kipling and what he said about East and West: as far as the Kuwait crisis is concerned, they have not yet met.