BAGHDAD, IRAQ, NOV. 7 -- President Saddam Hussein ordered the release of 100 Germans and 20 Europeans and Americans in what diplomats here described as an Iraqi strategy to lure foreign dignitaries to Iraq to help break the country's isolation.

Information Minister Latif Nassif Jassim announced tonight that Saddam met with former German chancellor Willy Brandt and gave "instructions for the release of 100 Germans and 20 other Europeans, including Americans, in appreciation for his personal role."

Jassim insisted that the release was "a humanitarian matter" and urged journalists "not to make of these persons media material that is subject to give and take" and too many questions.

"We are not against our guests, but this is one of the methods and means to prevent war. Sometimes certain people distort this aim," Jassim said. Iraq has sent "guests," its term for Western hostages, to strategic locations to be used as human shields to try to deter war over its Aug. 2 invasion of Kuwait.

Iraqi Foreign Minister Tariq Aziz said in a statement today that Monday's agreement on operational command of U.S. and Saudi troops deployed in Saudi Arabia "confirms . . . {that U.S. and Western} forces came to launch an aggression . . . aimed at controlling the oil resources," Reuter reported.

"The Saudi rulers bear full responsibility for any hostile act by the United States and its allies against Iraq, whether or not they take part in this act," Aziz's statement said. "Saudi territory will become an arena for fighting if this aggression is started."

Information Minister Jassim reiterated Iraq's pledge not to begin or declare war but cautioned: "Each of us is standing by the side of a dam. On our side we will never start a war. . . . If it breaks, it will be a long war and the outcome will only be known to God."

In an interview, Jassim said the Iraqi leadership was concerned about not just the hostages' welfare but also that of their families. "I am sitting on fire, thinking everyday that America can attack us, and then there are wives" to worry about, he said, in reference to the families waiting for Iraq to free their loved ones.

A diplomatic source questioned Iraq's rationale in letting out their detainees in small groups. "If keeping them here avoids war, what does letting them out do?" he asked.

In a gesture to France last week, Saddam released all French citizens who had been detained here. On Tuesday, after meeting with former Japanese prime minister Yasuhiro Nakasone, Saddam ordered the release of 108 hostages, including 77 Japanese.

A number of Western diplomats here insist that Saddam now understands that he must leave Kuwait, or most of it. "He wants to leave, and he knows that he must sooner or later, but he does not know how or when," one envoy said, noting that this was the "impression" of a half-dozen foreign and Arab visitors who had met with him.

One diplomat here said that, following a lengthy meeting with Saddam late last month, Soviet emissary Yevgeny Primakov left Baghdad with no concrete result but "believing he had understood that Iraq's position on Kuwait was not frozen in ice."

According to this account, Primakov, who spoke Arabic to Saddam without an interpreter, stressed to the Iraqi leader that his country would suffer from the U.N. economic blockade and that "if there is a war, you will lose it."

However, a European ambassador who has left his mission in Kuwait and is now temporarily based here, disputed the diplomat's view of Iraq's position. This envoy argued that Iraq would not give up Kuwait.

The Iraqi information minister repeatedly asserted that Kuwait had become an Iraqi province "forever."

Brandt brushed aside criticism of his trip to Iraq by Italian Foreign Minister Gianni De Michelis and others of his counterparts in Europe. "I think my friend De Michelis is wrong. . . . I am still Willy Brandt. I have my contacts and responsibilities, and I have every reason to inform myself," he retorted. "I find it, if not the proper, the understandable thing to help one's countrymen, like the French did," Brandt added, referring to the release of French hostages.

One indication of Iraq's effort to break out of its isolation, well-informed sources here said, is the fact that one European diplomat was summoned by Foreign Minister Aziz four times in one week. The Iraqis evidently want to stave off mounting economic pressure from the embargo, which apparently has started to bite.

Jassim conceded today that "the blockade has started taking effect," hinting that the will to cope with adversity, even for Iraq's battle-hardened population, was not endless.

Diplomats here familiar with discussions between Saddam and some of the interlocutors flocking to Baghdad said Iraq is eager to lay the groundwork for future and long-term cooperation with Europe. No commitments have been made at this point, the diplomats said.

"There seems to be a good deal of ground to be explored and cultivated," Brandt said today, but conceded that perhaps it would be going too far to say there was a way out of the impasse. He said "elements of flexibility should be discovered," especially by the United States. Brandt stated, however, that the danger of war exists in a climate of tension and possible miscalculations.

Brandt had hoped to win the release of all the 400 Germans held here, in addition to a large number of detainees from other nationalities.

Speculation that another meeting was arranged between Saddam and Brandt could not be independently confirmed, but German Embassy officials were working to arrange logistics in case a massive release materialized.