Although President Bush and Secretary of State James A. Baker III have insisted they will not negotiate with Iraq, they are being drawn inexorably into an intense period of negotiation that is not entirely within their control.

In offering to release the nearly 2,000 foreign hostages in Iraq and Kuwait, Iraqi President Saddam Hussein further quickened the already fast pace of offers and counter-offers.

Since the U.N. Security Council voted last week to authorize the use of force against Iraq if it does not leave Kuwait by Jan. 15, the United States has proposed new high-level talks, Iraq has accepted, Iraqi soldiers have made a token effort to resupply the besieged U.S. Embassy in Kuwait, and now Saddam proposes to liberate the remaining hostages. There have been daily discussions between Washington and Baghdad over the details of the planned exchange of visits between Baker and Iraqi Foreign Minister Tariq Aziz.

The result of this back and forth has been to shift the debate in the United States and between Washington and its partners from the quality of the "stick" being wielded by the alliance to the shape of the "carrot" that might be used to induce Saddam to retreat.

The risk for Bush is that the debate will be increasingly difficult to control, as the United States is buffeted by proposals from friends and adversaries that further cloud the message of resolve that it wants to send Iraq and the American people.

Saddam remains a major player in this bazaar of public, political and diplomatic opinion, and analysts inside as well as outside the administration interpreted yesterday's gesture as another in a long series of attempts to forestall an attack and play to sentiment in the United States, where bipartisan consensus over the Persian Gulf mission has begun to crack. This gesture, they said, is far more significant than Saddam's earlier efforts, because it would remove one of the most emotional issues in the crisis: the plight of the hostages being kept at Iraqi strategic sites as "human shields" against attack.

Both Bush and Baker have used the condition of the hostages as a rallying point for American public opinion; if they all return, outrage at Saddam and resolve to go to war against him could well slacken.

Although Saddam "will always be a demon in the eyes of the American public," Democratic pollster Peter Hart said, "I think what it does do is take away one very strong reason the Americans would want to take military action."

Administration officials believe that Saddam is trying to influence public opinion in the United States just before his foreign minister, Aziz, comes here. "In advance of the Aziz trip, he's trying to make himself look reasonable," one senior policy-maker said. "He's trying to undercut the use of force against him."

Many in Congress attributed the concession to the global economic sanctions against Baghdad. But administration officials speculated that Saddam was responding to the Security Council's threat to use force and Bush's decision to double the size of the multinational force. Baker told the House Foreign Affairs Committee yesterday that Saddam's surprise concession "is a sign that our strategy of diplomatic and military pressure is working."

Saddam "is a guy who operates on one basis -- he understands force," the senior policy-maker said. "It's the one thing he wants to avoid." This official noted that after Bush announced the near-doubling of U.S. troop strength, Saddam offered on Nov. 18 to release all the hostages in three stages stretching from Dec. 25 to March 25. That offer was not taken seriously, however, by the international community. Then, after the Security Council vote and the opening of the negotiating period, Saddam made the same offer without the delay.

Diplomats and officials in the Arab world said yesterday that Saddam decided to release the hostages in a bid to elevate the standing of the talks with the United States into full-fledged negotiations.

In Washington, other U.S. officials said Saddam's move was also motivated by the fact that the hostages, seized in the early weeks of the crisis as insurance against attack, had become a political burden to Iraq.

"This was a liability not only in dealing with the Americans, but internationally," said James Placke, a foreign affairs consultant here and former State Department policy-maker for the gulf region. He noted that Saddam had been under growing pressure from the Soviet Union to release its citizens. Iraq announced this week, after harsh words from President Mikhail Gorbachev, that the Soviets would be allowed to leave.

"He may have come to two realizations," Placke said. "One is that the hostages were not going to prevent the United States from having recourse to military force." Bush said early in the crisis that he would not let the hostage-taking influence his decision whether to go to war.

The other realization, Placke said, is that the hostages would be a political liability in world opinion, a message Saddam has received from other Arab nations as well as the Soviets. Placke said Saddam may be looking at the period after Jan. 15 when, if there is not a diplomatic solution, the pressure on him may be at its zenith.

"If it isn't going to forestall action, if it has become a political liability, and if you are interesting in finding a way out, then this is the right course," Placke said.

Administration officials noted that Saddam's earlier efforts to divide the alliance by selectively releasing hostages did not forestall the U.N. vote against him. Both France and the Soviet Union vowed to remain steadfast in their support for unconditional withdrawal from Kuwait after Saddam released their hostages, they said.

Nevertheless, officials conceded that they have entered a new phase of the crisis that will be more difficult to manage. "It's like those vegetables they brought to the embassy," said an official, referring to the food taken to the U.S. Embassy in Kuwait. "It certainly means there is movement. But is {he responding to} this massive force? Is it the U.N.? Or is it some game he's playing?"

Staff writer John Lancaster contributed to this report.