AMMAN, JORDAN, SEPT. 20 -- Discussing the delicate question of the stability of King Hussein's regime, a former Jordanian prime minister cited an old Arab proverb: "If your surroundings have gone mad, your reason will be of no use to you."

This official, one of Hussein's closest advisers for the past several decades, uses the proverb to illustrate Jordan's dilemma these days. The country's largely Palestinian population has clamorously supported Iraq's invasion of Kuwait. And the king, the Arab world's perennial moderate, while condemning the invasion, has heeded the sentiment of his people and kept his bridges open with Baghdad.

The question is how long this balancing act can continue. There have been growing questions outside Jordan whether the king, in maintaining links with Iraqi President Saddam Hussein, has risked the stability of his own kingdom. But here in Jordan, even among critics of the king, the consensus is that his hold on power is probably stronger than that of most other Arab leaders -- and that Egypt and Saudi Arabia may be more likely candidates for instability than Jordan.

Few Jordanians doubt that the country's stability could eventually be at risk. But many argue that Hussein has so far been "the King of Wisdom" in opposing the Iraqi occupation of Kuwait without burning all his bridges with Baghdad. There is also a firm belief here that the radical forces unleashed in the region by Saddam will haunt other Arab regimes long after he is gone.

"If they are going to destroy Iraq, why worry about us? All Arabs east of Suez will be reduced to nothing," said Mrewede Tell, a prominent Jordanian whose brother, Wasfi, then prime minister, was assassinated by Palestinians in Cairo in 1971.

Leila Sharaf, Jordan's former information minister, agreed. "If there is a big war everything will collapse. But after the war or the crisis, I think the Jordanian system is the most likely to survive. I don't see Saudi King Fahd, Egypt's President Hosni Mubarak or Sheik Zeid {ruler of the United Arab Emirates} doing too well. The only one who has his hand on the pulse of the people is King Hussein," she said in an interview.

At stake, too, is Hussein's historically good relationship with the United States. For decades the United States has looked to Hussein as a key to stability in the region. But a close Jordanian alliance with Iraq's Saddam could seriously jeopardize this standing with Washington, as well as undermine the informal but precarious relationship that has developed over the years between Israel and Jordan.

Intellectuals, politicians and historians here are divided about exactly how the crisis will play out. Some say they expect that Saddam's demise also will spell the end of Jordan, while others see opportunities in a post-crisis Jordan to join a new security order in the region.

"It is like the whole area is going through labor and you don't know what the birth is going to be like," one prominent retired politician here said.

Jordanians discuss three scenarios for what might happen here if Iraq is attacked. One group argues that Hussein will do nothing, waiting for the surgical operation to take its course. Another fears that Iraq, in an effort to divert attention, will provoke Israel -- inviting retaliation against Jordan and a transfer of West Bank Palestinians across the Jordan River from the West Bank. A third group anticipates that pro-Iraqi fervor in the streets will dictate policy, pulling Hussein into the firestorm of an open alliance with Baghdad.

Hussein, who has survived coup attempts, ambushes and assassination plots for 38 years is "worried about the catastrophe of a military showdown," according to one person who visits with him.

Jordan's biggest immediate problem may be economic, rather than political. The trade embargo against Iraq will cost Jordan an estimated $4.2 billion, since most of Iraq's imports are transshipped through Jordan. "If there will not be total collapse, there certainly will be havoc," warned one U.S.-educated Jordanian.

One example of the economic crunch is today's decision by Saudi Aramco, the state-owned oil company in Saudi Arabia, to cut off oil shipments to Jordan because it has not been paying its bill, according to an authoritative source. "It's not political. It's just enforcing the sales contract," the source said.

He said Saudi Arabia has been sending 33,000 barrels a day to Jordan -- nearly half of its domestic requirement. But he said the impact on Jordan is difficult to assess because Iraq may be able to make up the difference. Before Iraq invaded Kuwait, Jordan was importing 90,000 barrels a day from Iraq, consuming 66,000 and refining the rest for export, according to Platt's Oilgram.

Jordan's current difficulties are partly the result of Hussein's decision to experiment with democracy. A relative political relaxation has opened the floodgates to popular Arab sentiment stirred by Saddam's appeals to the Arab "have-nots" to rise up against the United States and its alleged "agents" in Saudi Arabia and Kuwait.

An eerie sign of the times was last week's conference here of Arab liberation movements attended by radical Palestinian leaders belting out anti-American slogans and denouncing conservative Arab regimes. It brought back memories of Beirut in the early 1970s and Palestinian and leftist rallies in the square of its Arab University. The rhetoric has not changed but its authors are older men with diminished roles.

But the Lebanon parallel is misleading, analysts here said, since Jordan has a strong, unified army and Palestinian guerrillas here do not carry arms or man roadblocks as they did in Beirut (and as they did here, before the 1970 civil war and Hussein's eventual expulsion of the guerrillas in 1971).

The visit of radical Palestinian leaders George Habash of the Popular Front for the Liberation of Palestine and Nayef Hawatmeh of the Democratic Front for the Liberation of Palestine, specifically approved by Hussein, to attend a conference of Arab nationalist groups sympathetic to Iraq, capped a process of liberalization begun several months ago and negotiations with their groups' representatives.

Jordanian officials and politicians sought to minimize the importance of the guerrilla leaders' visit. "What you have in Amman is a new political attitude but you will not have more than that," said Hanna Nasser of Bir Zeit University.

Jordanian officials said none of the guerrilla leaders will be invited back permanently and they expressed dismay at the outcry in Washington over Hussein's decision to receive them. "Their coming to Amman is not an accusation against King Hussein but a genuflection to King Hussein," a Jordanian historian said. "It is they who have changed. Their visit to him was that of renegades coming for a pardon from the sultan."

A former ambassador to Washington, Mohammed Kamal, said he was outraged at the criticism from the State Department. "One day they press us to democratize and when we do, we are projected as a loose country with dwindling authority. What does America really want?" he asked.

Hussein's experiment with democracy began last November, when Jordan held its first free election in two decades. As part of the liberalization, previous bans on work and travel by political activists were shelved, political prisoners were released, and surveillance of Jordanians by the once-pervasive intelligence service was reduced. Hussein also suspended martial law, which had been in effect for 23 years, and allowed a freer press.

Hussein gambled that these moves toward democracy would, over time, enhance the kingdom's stability. In the short run, during the gulf crisis at least, observers here concede that democracy may have added to the appearance of chaos and instability. But over time, they say, a democratic Jordan may have a better chance of survival than the more traditional and rigid Saudi monarchy.

Jordanians cite one example of the country's stability. Classes at Jordan University have started, but university administrators here said universities in Egypt have postponed registration by a month to avoid upheaval and student demonstrations protesting Mubarak's alignment with the United States against Iraq. The reported delay in opening classes in Egypt could not be immediately confirmed.

Some influential Jordanians are worried about the kind of advice Hussein is getting but they insist his intentions as a peacemaker are misunderstood. They say he cannot turn against Saddam overnight after a friendship of several years. "In hard times you make hard decisions. In principle we want to rescue Iraq and avoid a military flare-up. . . . We cannot be held responsible for Iraq's actions. If we are looking for a bloodless solution, are we to be crucified?" asked one leading politician here.

"We are not taking this stand because it is imposed on us, but because it is our circumstance," Mrewede Tell remarked. "A strike {against Iraq} will destabilize the whole Middle East and we are part of it."