Relatives of Americans trapped in Iraq and Kuwait reacted with a mixture of joy and caution yesterday to Iraqi President Saddam Hussein's decision to release all foreign hostages, while families of U.S. troops expressed hope that the threat of war may be receding.

"My first reaction was one of disbelief," said Sandy Stone of Las Vegas, whose husband is believed to be hiding in Kuwait. "I wondered, 'What are the conditions? What are the ifs?' But I'm beginning to get a little more optimistic as the day goes on."

Al Stone, a civil engineer who had worked in Kuwait for the last four years, is one of about 900 Americans who remain in Iraq and Kuwait. Iraqi authorities are holding 88 of them as "human shields" at strategic military and industrial sites in Iraq, according to the State Department and Americans who have been released previously.

Among military families, hope that tensions may be easing in the Persian Gulf was tempered by the knowledge that Saddam has not made any concessions on the key United Nations demand that he remove his forces from Kuwait.

"I'm a very optimistic person and I'm hopeful that this might be the sign of peace that we're all waiting for," said Betty Rousaville of Virginia Beach, whose husband, a Navy dentist, is in the Middle East. "But I wouldn't be out partying like some of the hostage families are."

Saddam's surprise announcement yesterday coincided with the visit to Baghdad by a group of Americans whose relatives are being held hostage. Family members who remained in the United States said they were optimistic that the American visitors would not return home alone.

"It looks like they're all going to come home," said Patricia Hale, whose 17-year-old son accompanied the group and met yesterday with his father, an oil drilling supervisor, at a hotel in Baghdad.

Hale, of Spring, Tex., said her son telephoned yesterday morning to say " 'Everything was fine. . . .' He said, 'Mom, we're coming home.' I said, 'When?' and he said, 'I think maybe two or three days.' "

But the line went dead before she could ask him if Iraqi authorities had formally approved an exit visa for her husband.

Michael Saba, an organizer of an Illinois-based support group for hostage families, said relatives are taking heart from Iraqi officials' willingness to allow family members to meet with hostages in Baghdad. "There's nothing in writing, but the experience we've had so far is that in these public efforts, what they have said they are going to do, they do," he said.

"He'll live up to his words, I just know he will," said Ouida Biggers of Saddam. Biggers's son-in-law, 51-year-old John Cole, was taken from an oil field in Kuwait on the day of the Iraqi invasion. "I'm sure he'll be one of the first ones to come home."

That optimism was shared by Kathy Chanik, the wife of the commanding officer of a Navy fighter squadron that will leave Virginia Beach for the Middle East after Christmas. "I'm just so excited about this," she said, "I know that the gulf crisis is not over, but I feel that the tensions are easing."

George Billman, 71, the former commanding officer of a South Dakota Army National Guard unit activated last month, said, "I think it's great. I would rather see this thing settled peacefully."

"It's wonderful news," said John A. Hornbeck Jr., president of the Hampton Roads Chamber of Commerce in Norfolk, where an exodus of ships and sailors has caused a dip in the local economy. But Hornbeck added that his hopes were balanced by fears that Iraq has failed to make good on previous promises.

Neither Rousaville nor Hornbeck said they believed the release of the hostages would undercut support for U.S. troops stationed in the region. "I don't detect there is going to be any erosion," said Hornbeck, noting: "This is a very conservative, pro-defense military town."

Alex Molnar, a University of Wisconsin professor who is a leader of the Military Family Support Network, a group opposed to military action in the gulf, said last night that he hopes the promised releases will pressure the United States to avoid war with Iraq. "We should use this to take the pressure off ourselves and give the sanctions a chance to work," he said. " . . . The lives saved will be worth it."