TAIF, SAUDI ARABIA -- At a luxury hotel in this Saudi hill town, Kuwait's exiled leadership has begun a debate over how to reconstruct the political, social and economic life of Kuwait after Iraqi troops are ousted.

Kuwaiti officials and diplomatic observers here agreed that the upheaval caused by Iraq's Aug. 2 invasion will have far-reaching repercussions on the way the wealthy oil nation is organized and governed. It does not appear, however, that many concrete decisions on whether and how to democratize and proceed in other areas have yet been made by the ruling family of Emir Jabir Ahmed Sabah.

"It will take more than the wisdom of Solomon," said Planning Minister Suleiman Mutawa in a discussion about the postwar political and economic order. "There will definitely be a dialogue. There will be voices raised. There will be tempers lost."

The Bush administration and U.N. Security Council resolutions have made restoration of the emir's hereditary rule a major aim of the Persian Gulf War, describing the Sabah family, which has taken up residence here, as the legitimate Kuwaiti government.

But many Kuwaitis and foreign observers have expressed belief that new leaders outside the ruling family are likely to have arisen during the Iraqi occupation. More than 200,000 Kuwaitis of a prewar population of 2.2 million citizens and foreign residents remained through the Iraqi occupation, and Mutawa conceded that the Sabahs will have to seek their counsel.

"I presume that among the 200,000 who remained, there is a new leadership, and you must deal with this leadership," Mutawa said. "It is only natural that some of them will have an ax to grind when they look at all they had to go through, all they had to suffer."

In addition, the turmoil has returned to the political stage Kuwaiti opposition leaders who for years have agitated for increased powers for the parliament, which was prescribed in Kuwait's 1962 constitution but dissolved in 1986.

Still, Defense Minister Nawaf Sabah, the emir's brother, made clear that there should be no question of the Sabahs' hold on power.

Once the country is liberated and reconstruction has begun, he said, the ruler and his family will discuss with the Kuwaiti people whatever changes have to be made. "Our main target now is liberation," he said. " . . . When we get back to our house, then we will solve our problems in the {national} family."

According to Mutawa, traditional Arab-nationalist points of reference have been shaken and must be redefined. For example, Kuwaiti children used to learn that they were surrounded by Arab brothers, a vision shattered by the invasion as well as by Palestinian support for Iraq.

Now, he said, it will be difficult for him to sit next to a Palestinian without wondering whether he was one of those who cooperated with Iraqi forces in Kuwait.

In that vein, the emir's government has begun discussions on replacing Palestinians and other foreign workers who occupied important posts in government and private industry in prewar Kuwait.

"In the key positions, public or private, priority will have to go to the nationals," Mutawa said. This would represent a sweeping departure from the kind of life built up in the last two decades in Kuwait.

"If we haven't learned a lesson from what happened, then we have only ourselves to blame," he said.