In the months before the Iraqi invasion of Kuwait, the Bush administration insisted that the United States could improve Iraqi President Saddam Hussein's behavior by continued diplomatic persuasion, despite human rights abuses, increasingly bellicose threats against Israel and the United States, and his drive to dominate the Persian Gulf.

Now, with American military forces headed for Saudi Arabia and the international community trying to impose a global embargo against Saddam, critics in Congress and private analysts question whether the Bush administration miscalculated the Iraqi's intentions and failed to anticipate the crisis now engulfing the region.

In particular, officials said in interviews, the administration appears to have not realized that Saddam's threats to Kuwait would go beyond an oil-pricing and borders dispute, that the military buildup on the Kuwaiti border was more than just bluster and that Saddam no longer felt restrained by arch-rival Iran.

Moreover, according to administration and diplomatic sources, the administration appears to have been misled by reassurances before the invasion from Egypt and Saudi Arabia that Saddam would not attack because his economy was too exhausted from the Iran-Iraq war.

"All the Arabs said he is not looking for another war, that he has great rebuilding needs," ruefully recalled a senior U.S. policy-maker. "Well, yes -- not a war with Israel. But what's the invasion of Kuwait? That isn't a war. If he's looking for resources, they could obviously be obtained at very low cost. He wasn't looking for another war, not with Israel, but for more resources."

According to a source, President Bush on June 26 privately expressed concern about Saddam Hussein to two visiting Egyptian officials, Foreign Minister Esmat Abdel-Meguid and the undersecretary of state for foreign and political affairs, Osama Baz. Bush said he was worried about Saddam's behavior, telling them, "It's very hard for us to be patient." However, the Egyptians appealed to him, "Give us more time."

The source said that following this meeting, top administration officials began to look anew at a strategy that would put pressure on Saddam, while not giving him an opportunity to portray himself as a victim. One option that policy-makers considered was putting Iraq back on the list of states that sponsor terrorism. But when the invasion began, this idea was still bogged down in internal debates over the politics of new sanctions and whether they would be counterproductive.

For more than a year, Israel and its allies in Congress have been pressing for economic sanctions against Iraq. But the administration repeatedly balked, as recently as last Tuesday. Assistant Secretary of State John H. Kelly has told Congress any sanctions would not work and only be costly to American farmers and businessmen.

In June, Kelly told the Senate Foreign Relations Committee that although human rights abuses continued and Iraqi attempts at gaining advanced weapons persisted, Baghdad was taking "some modest steps in the right direction," such as discussing a new constitution and participating in a chemical weapons conference. Iraq, Kelly testified, "was not obstructing" the Arab-Israeli peace effort. A spokesman for Kelly said yesterday he stands by his testimony "as circumstances stood at the time."

White House press secretary Marlin Fitzwater said yesterday the administration realized Saddam has a "history of personal brutality" but "the other side of the question . . . is how best do you improve relations." He said the administration "pursued a course that we felt was the best for trying to get positive change." But he added, "It didn't work."

In the final days before the invasion, the administration did not seem prepared for the swiftness of Saddam's attack. The United States staged a relatively small aerial refueling exercise with the United Arab Emirates involving two tanker aircraft and a cargo plane. U.S. Ambassador to Iraq April C. Glaspie was allowed to go on vacation.

Although intelligence reports documented the Iraqi troop buildup, there was not a crisis atmosphere. Senior White House, State Department and Pentagon officials went home on the night of the invasion, only to be called back to their offices later as it unfolded. Said one official, "Did people anticipate he was going to invade? No."

Rep. Robert G. Torricelli (D-N.J.), who received a Defense Intelligence Agency briefing on the Iraqi troop buildup just 10 hours before the invasion, said the intelligence reports showed the United States "fully understood the potential of the Iraqi mobilization.

"This is a case where the collection of data from the intelligence community probably got ahead of the formulation of policy," he said. "There may have been a better understanding of the intelligence situation than a comprehension by policy-makers of the implications of what was taking place."

In addition, some lawmakers and diplomats also said they felt that Bush and Secretary of State James A. Baker III have been preoccupied by the Arab-Israeli conflict, the collapse of communism in Eastern Europe, and German unification. These officials said that if errors were made it was because top officials simply had not focused on the Persian Gulf.

"This administration develops foreign policy with very few actors. The events of Eastern Europe and the Soviet Union and the summits really, really captured their attention," said Rep. Lee H. Hamilton (D-Ind.), chairman of the House Foreign Affairs subcommittee on Europe and the Middle East. "It was very difficult for them to turn to other events.

"We were very slow to respond to a lot of provocation and actions by Saddam," Hamilton added in an interview. "We've been on a downward spiral in the relationship since early this year when Saddam Hussein started to attack the United States and suggested we should be driven out of the gulf. We did not act promptly and quickly in response."

Hamilton said Saddam "made a clear calculation that by going into Kuwait he would not evoke a Western military response. He made that calculation based on our {defense} builddown, all of our conversation was about the peace dividend. He made the calculation and it turned out to be accurate. We did not have the power to intimidate and deter."

Senate Foreign Relations Committee Chairman Claiborne Pell (D-R.I.), who pushed for sanctions against Iraq for several years against the opposition of both the Reagan and Bush administrations, said that "if the administration had acted sooner" to support sanctions, Saddam "would have heard the message that his outlaw policies would not be tolerated."

Senate Armed Services Committee Chairman Sam Nunn (D-Ga.) said, "I think we've made some mistakes in the past on Middle East policy." He cited the U.S. tilt toward Iraq during the Persian Gulf war and said Iranians "are so easy to dislike that the United States forgot, or conveniently forgot, that the Iraqis were the ones who started that war against the Iranians."

Sen. Alfonse M. D'Amato (R-N.Y.), a sanctions backer, said in an interview the administration responded "too little, too late" to the Saddam threat. "The failure was in the lack of a practical analysis and giving too much weight to wishful hopes as opposed to the reality."

Staff researcher Bruce Brown contributed to this report.