AMMAN, JORDAN, SEPT. 11 -- Although President Saddam Hussein commands the Arab world's largest army, the view in Baghdad is that his most powerful weapon in the Persian Gulf standoff could be time.

The Iraqi leader's goal is to ride out the immediate fury over his Aug. 2 takeover of Kuwait as smoothly as possible in hopes he can avoid an early attack by U.S. and allied forces in Saudi Arabia and eventually find ways to get around the U.N.-imposed trade embargo threatening his economy, according to diplomatic assessments in the Iraqi capital.

The U.S.-Soviet summit conference in Helsinki, which fell short of superpower agreement on use of force anytime soon, seemed likely to confirm the leadership in Baghdad in its strategy of drawing out the status quo, according to this assessment. But to make it work, Saddam has to avoid an accidental or provoked flare-up of fighting with U.S. forces and squeeze the Iraqi economy so it can hold out long enough for the embargo to develop ragged edges.

If he can manage these objectives over the coming months, Baghdad-based diplomats predict, Saddam is likely to look forward in the longer term to transforming his annexation of Kuwait into another one of the Middle East's perennial problems: the bitter conflicts that fester, create misery and periodically threaten peace, but never seem to get resolved.

In his proposal of negotiations Aug. 12, Saddam placed the Kuwait crisis in that category. If they want to solve the problem of Kuwait, Saddam said, the United Nations and the international community also must solve Israeli occupation of Palestinian land and Syrian and Israeli occupation of Lebanese land.

Conflicts in those regions at various times seemed as urgent on the international agenda as Kuwait does now. Nevertheless, they have been allowed to fester on through the years.

In the meantime, the occupations -- and whatever benefits they bring the occupying power -- continue. Syrian troops have been in most of Lebanon since 1976 and Israeli troops in a Lebanese border strip since 1982. Israel seized the West Bank, Gaza and the Golan Heights during the 1967 war.

In the case of Kuwait, such contested but undisturbed Iraqi control could ultimately leave Saddam with the profits from 94.5 billion barrels of Kuwaiti oil reserves and sharply increased influence in the councils of gulf politics and petroleum price-setting.

Despite the nearly universal condemnation heard now, it would make Saddam into a national leader who recovered territory that Iraqis always considered theirs by historical right and that also gives them a much-needed open-sea route for oil exports. Within the Arab world, it would make Iraq into the country that stood up to the United States and other Western nations regarded as sponsors of Israel and heirs of colonialism.

Because of this, Arab governments, including those that have lined up behind the United States now, could be expected to be among the first to drop the urgent demands for Iraqi withdrawal if enough time passes and the sense of crisis dissipates, in the view of the diplomatic observers.

Saddam's assertions that Western colonialism was the source of Iraq's quarrel with Kuwait have found resonance in much of the Arab world, particularly among Palestinians who feel Britain also cheated them out of their homeland. Mohammed Rifai, a retired Jordanian army colonel, captured the mood in a letter to Prime Minister Margaret Thatcher explaining why he was returning a signed photograph given him after he escorted the British leader during her 1986 visit to Jordan.

"It was hoped that your picture would contribute to obliterate the unfavored and ill-reputed image of Britain among our people, caused by past records of unjust oppression against the Arabs throughout history, particularly in our occupied land, Palestine," he wrote in the letter, published today in the Jordan Times. "Unfortunately, that hope was dashed due to renewal of British oppression in a manner worse than we had experienced during the early history of colonialism."

In any case, foreign relations are notorious for shifting as often as sand in the Arab world. Kuwait, which was swallowed whole by Saddam on Aug. 2, was his strongest backer against Iran in the gulf war from 1980 to 1988. North and South Yemen, which were bitter enemies for two decades, joined hands and became a single country several months ago.

Saddam's first problem in making time work for him, however, is to avoid a U.S. attack in the months just ahead. Reports from Washington say the military deployment necessary for an attack to recover Kuwait will be in place before the end of October, and Secretary of State James A. Baker III reiterated Sunday that Washington has not ruled out military action despite Moscow's refusal to go along now.

Iraqi officials stress that it is to reduce the likelihood of such an attack that Saddam has forcibly placed U.S., European and Japanese men in Kuwait and Iraq at strategic sites such as military bases and industrial plants. While Baker vowed again that U.S. policy will not be "held hostage" to the tactic, President Bush nevertheless has been faced with the prospect of shedding innocent Americans' blood if he orders bombing raids.

U.S. and other world leaders have expressed outrage at the use of innocent civilians as human shields. But the main government spokesman in Baghdad, Naji Hadithi, repeatedly has explained to inquiring reporters that the hostages will remain in place until Iraq receives a pledge from the United States that it will not attack -- in other words, until Saddam knows time will be allowed to go by while Iraq takes root in Kuwait.

Saddam's eagerness to avoid letting an incident spiral into early armed hostilities was particularly apparent last week when the State Department reported in Washington that an American man had been shot in the hand while trying to escape capture by Iraqi occupation troops in Kuwait. The Iraqi Information Ministry swiftly summoned U.S. television teams in Baghdad to tell the cameras -- and through them the U.S. government and public opinion -- that the shooting was an accident and U.S. consular officers would have access to the victim.

In the view of diplomats and Iraqi officials alike, Saddam can force Iraqis to endure the U.N. Security Council's trade embargo for months without severe dislocation in the economy. The nation grew used to hardship during eight years of war with Iran, they point out, and industrial installations have been stocked with spare parts.

Iraqi officials say international sanctions historically have taken a long time to work. Moreover, they claim ways can be found to get around the embargo with time and patience.

In this context, Saddam's offer of free oil to Third World countries Monday and Foreign Minister Tariq Aziz's renewal of diplomatic relations with Iran were seen as part of an Iraqi campaign to find openings in the ban. Well-informed diplomats in Baghdad say the Iraqi government has cast a wide net of other contacts with a variety of governments that Saddam hopes will be enticed to do business in violation of the embargo and help Iraq continue its occupation of Kuwait.