Iraq has informed the United States that it is ready to reestablish full diplomatic relations later this year after a 17-year interruption, according to official sources.
Only a few years ago, Iraq was denigrated here as a radical Soviet client in the Middle East, but the United States has gradually drifted into a closer alignment with it during the four-year Iraq-Iran war.
The Iraqi decision was conveyed to Secretary of State George P. Shultz by Foreign Minister Tariq Aziz at the United Nations early this month, the sources said. Aziz reportedly expressed a willingness to come to Washington at an early date to cement the resumed relationship and make a public announcement but was asked to put the visit off until after the U.S. election because of the "tight schedule" of President Reagan.
State Department officials said the United States would welcome the restoration of diplomatic ties with Iraq. One official said it would be a sign that Washington can improve its relations with Arab nations even while maintaining very close ties to Israel.
Three years ago, Iraq was on the list of countries regarded as supporters of international terrorism and thus barred from U.S. commercial transactions that might aid it militarily. Since then, the Reagan administration has moved step by step to improve its relations with Baghdad, removing the country from the terrorist list and sending a procession of high-level visitors.
At the same time, the administration has taken an increasingly active role to halt the direct or indirect flow of military supplies to Iran. All this led the Senate Foreign Relations Committee to conclude in a recent staff report that "United States policy has tilted toward Iraq" since 1982.
Restoration of full U.S.-Iraqi relations is likely to be controversial with Israel and its supporters here. The Israeli government has long been leery of Iraq, which has taken strong anti-Israeli positions in recent years. In June 1981, Israel bombed and destroyed Iraq's nuclear research reactor.
The move also may be received without enthusiasm by those who believe Iran to be of far greater strategic importance than its foe. U.S. diplomatic ties with Iran, formal and informal, were broken off during the hostage crisis and there is little prospect for improvement.
Iran, which remains on the list of nations supporting terrorism, is believed to have had a role in the terrorist attacks on the U.S. Marine headquarters and U.S. Embassy buildings in Lebanon. A State Department official said restoration of diplomatic relations with Iraq could be "a good signal to Iran" in the current context.
Iraq broke off diplomatic relations with the United States at the time of the 1967 Middle East war because of U.S. support for Israel. The two countries have maintained diplomatic "interest sections" in each other's capitals, though without the status of full-scale embassies.
The Baghdad government, according to U.S. sources, has made it clear that it will remain a "nonaligned" country despite the resumption of full diplomatic ties with Washington. Iraqi officials reportedly said they consider this a good time to restore relations with Washington because their ties with the other superpower, the Soviet Union, have also improved recently.
After meeting Shultz in New York Oct. 1, Foreign Minister Aziz visited Moscow early this week. Washington officials said they assume that part of Aziz's purpose there was to tell the Soviets about the forthcoming move toward the United States.
U.S.-Iraqi relations went through a rough patch early this year when the State Department announced its conclusion that Iraq had used chemical weapons in the war with Iran. This U.S. statement provoked bitter comments from Iraqi leaders but after a few months the climate between the two nations seemed to warm again.
One future problem in the Washington-Baghdad relations could be Iraq's nuclear program, which suffered a serious setback in the 1981 Israeli attack. U.S. officials said France and Italy are believed to be cooperating with Iraq in its efforts in the nuclear field.
A report on nuclear proliferation to be published next week by the Carnegie Endowment cites the arrest this June of a ring of Italian smugglers accused of trying to sell nuclear materials to Iraq. Based on this, the report says, Iraq would appear to have adopted a "clandestine strategy" for acquiring nuclear weapons.