The Clinton administration looks from abroad to be losing energy, focus and altitude daily in an August that is searing London, Paris and other European capitals as it scorches the United States.

Serious British newspapers devote banner headlines to the Clintons' marriage but ignore the president's policy agenda. A lackluster, unfocused Clinton performance at the Balkans summit in Sarajevo and the inept handling of the change of NATO's commander have stirred concerns in Brussels and elsewhere about Washington's alliance management capabilities over the next 17 months.

And on another weathervane issue, Iraqi exile leaders here have just learned that the Clinton administration has backed away from a daring plan the leaders had drawn up to challenge Saddam Hussein politically on Iraqi soil later this month. This retreat threatens to undercut White House pledges to work more seriously for "regime change" in Baghdad.

Hope rose within the exile community last spring that the White House had decided to put more muscle and commitment into cleaning up its most visible foreign policy failure.

On May 24, Sandy Berger, Clinton's national security adviser, met in the Roosevelt Room at the White House with representatives of seven Iraqi groups the administration had prodded into uniting as the democratic opposition to Saddam. Several present at the 25-minute session say they heard Berger declare a determination to get rid of Saddam's regime by the end of Clinton's second term.

This spurred the interim leadership of the Iraqi National Congress (INC) to draw up plans to use U.S. funds and equipment Congress had already mandated to help them resist Saddam's dictatorship. Their most ambitious political proposal was for a plenary session of their legislature, the Iraqi National Assembly. They proposed to hold that meeting in northern Iraq's Kurdistan, across a de facto border from Saddam's forces.

The seven-member INC leadership group wrote to Secretary of State Madeleine Albright on July 7 asking for U.S. military protection for the assembly. Only the shadow of U.S. muscle would deter Saddam from attacking and ensure that key leaders such as Kurdish chieftain Massoud Barzani would attend. U.S. physical support would also symbolize the administration's new commitment.

But the idea failed to gain White House or Pentagon support at a high-level decision-making meeting on July 22. On July 29 Deputy Secretary of State Strobe Talbott dashed the hopes of the Iraqi leaders for a new approach. His letter to them supported the assembly meeting but added:

"Should you decide to hold the conference inside Iraq, responsibility for security will lie with the popular resistance forces on the ground." Talbott noted previous U.S. promises to "respond in a strong and sure manner . . . if the Baghdad regime were to move against the people of the north," but said that promise would be treated as "a separate matter" from the assembly meeting.

INC leaders are now discussing plans to gather in the historically important town of Halabja, where Saddam used poison gas against the Kurds in 1988. Halabja is currently under the control of the Islamic Movement of Kurdistan, which is friendly to Iran. Tehran would gain in prestige locally by seeming to provide protection against Saddam that Washington dared not offer.

The renewed caution of the Clinton team in confronting Saddam has also surfaced in its efforts to play down the possibility that Iraq has used the year in which it has been totally free from U.N. inspections to develop atomic, biological and/or chemical weapons.

In a complete turnaround from its nearly hysterical reaction to Iraq's expulsions of U.N. inspectors in the past, the administration now professes to see no cause for concern about Saddam's breaking out of the inspection regime pioneered under the Bush administration.

In Iraq the Clintonites have taken the weak but tenable hand they inherited and turned it into a total mess. U.N. inspections are gone. Northern Iraq, where Kurdish factions were cooperating in forming a functioning regional administration when Clinton came to office, is today a cauldron of competing armies and guerrilla groups.

Neither Al Gore nor George W. Bush is likely to be eager to talk about Iraq in the coming campaign. But U.S. policy there could become a perfect "outsider" issue for candidates such as John McCain or Bill Bradley -- who are not tied to past mistakes -- or for their political allies.

The INC tells me it would welcome a U.S. congressional delegation or high-profile observers at Halabja. Anyone feeling more daring than Bill Clinton?