Bush is in this position because ousting a foreign leader is as inherently messy as it is audacious; that fact simply can’t be reconciled with the president’s desire to control all military and political risks. Assassination, though it may have spared U.S. (and Iraqi) lives, is against U.S. law. Sending ground troops to Baghdad to hunt Saddam down was rejected because it might have mired U.S. forces in a long and costly occupation. The administration hoped the sheer fury of the air campaign would prompt the Iraqi military to turn on Saddam, especially after the United States began targeting bunkers used by members of the Iraqi elite. When that didn’t work, say two senior military officials, national-security adviser Brent Scowcroft told Gen. Colin Powell, the chairman of the Joint Chiefs of Staff, on or about Feb. 12, 1991, that the president would not be unhappy if Saddam were killed. But this apparent shift, signaled in such a way as to preserve “deniability,” was rendered moot the next day. U.S. bombs killed 300 civilians in a bunker formerly used by the Baath party elite; the ensuing outcry forced the United States to take such bunkers off their target list. NEWSWEEK military sources say a giant “bunker busting” bomb was dropped on a command bunker on the last day of the war, less in any real hope of killing Saddam than in order to test the new weapon while they still could.

Having urged Kurdish and Shiite Muslim rebels to topple Saddam after the war, the United States then stood aside as he crushed them: officials contend they were deferring to Syrian, Turkish and Saudi fears that a rebel victory could crack up Iraq along sectarian lines. Washington was still hoping for a coup by Sunni Muslim officers who would keep the country together. “We were so sure the Iraqi military would do the job,” says an administration official. “Why get involved in a messy ethnic or religious uprising.?” Instead, the Army rallied around Saddam against the Kurds and Shiites.

Now, the postwar Bush administration policy for getting Saddam out of Baghdad is much like the Democrats’ prewar policy for getting him out of Kuwait: press him politically and economically until he cracks. This is having at least some effect (page 28). American intelligence reports speak of “serious strains” in the leadership. In early November, Saddam fired his son-in-law, Lt. Gen. Hussein Kamel Hassan, as defense minister and replaced him with a cousin, Ali Hassan al-Majid. The unusual shake-up was reportedly accompanied by an exchange of gunfire among supporters of the two men. NEWSWEEK has learned that several leading civilian party members have been assassinated in the capital in recent weeks. U.S. officials say these incidents suggest that Saddam was blustering when he went on television last month to scoff at Bush’s call for a coup. The regime “is incredibly brittle. When pressed, it won’t bend. It will shatter,” claims a senior State Department official.

Yet for all the perplexing machinations in Baghdad, diplomats there see no loosening of Saddam’s basic grip on power-or his will to survive. He and his inner circle are using Jordan, Turkey and Iran as conduits to import food, embargoed equipment and luxury items and to export used construction equipment and small amounts of oil. More ominously, NEWSWEEK has learned that U.S. intelligence recently tracked a shipment of arms-possibly artillery and armored vehicles–originating in Pakistan, a U.S. ally. Not long ago, U.S. intelligence sources say, the Iraqi Air Force briefly scrambled a few jets in violation of the cease-fire accord-apparently as a test of a partially reconstructed air-defense system. Officials worry that Iraq may retain 200 Scud missiles. And David Kay, who led the United Nations nuclear-inspection efforts in Baghdad, says Iraq probably has an undiscovered small “cascade” centrifuge for manufacturing bomb-grade uranium. He also says Iraq’s team of bomb scientists is still active.

In November, President Bush ordered his senior aides to conduct a review of U.S. policy on Iraq. State Department officials tell NEWSWEEK that within weeks pressure will be stepped up through the United Nations. The U.N. inspectors, who now fly in helicopters protected by only about 50 police from the world organization, will increase unannounced inspections of undeclared sites and also begin destroying facilities dedicated entirely or even partially to Saddam’s nuclear- and chemical-weapons program. Though the United Nations has destroyed and dismantled weapons before, “the political symbolism will be tremendous, and potentially explosive, if U.N. inspectors level entire buildings,” said a U.S. official.

Beyond this, however, the administration policy review has yielded little new. Rep. Les Aspin, among others, is pushing for a more aggressive plan to have U.S. helicopters escort U.N. inspectors and to use seized Iraqi assets to finance a U.N. relief operation within Iraq over Saddam’s objections. National Security Council aides lean toward more aggressive measures, but other Bush advisers remain cool toward anything close to open-ended U.S. involvement in Iraq’s internal affairs. The CIA, which does extend covert support to dissident Iraqi exiles, is skeptical that Washington can directly engineer a coup. Colin Powell is adamant that no troops be committed unless the president is prepared to order another Desert Storm-size expedition. “Other than us keeping pressure on and making clear that the Iraqis understand that the future’s a bleak one as long as he’s around, this is something the Iraqis are going to have to resolve themselves,” says a senior U.S. official.

The administration’s best-case scenario now is that food riots will divide Saddam’s power base, by forcing the Army to choose between firing on the people and disobeying Saddam. But this seems farfetched, given what happened when the Shiites tried to make it happen after the war. “What does President Bush mean?” protests exiled Shiite Mowaffak al-Rubaie, a member of the radical al-Daawa group. “These iron-fisted dictators have to be crushed from the outside.” Iraqi opposition groups have recently met under Syrian and Iranian auspices to contemplate joint action, but the groups are riven by political and confessional divisions and, except for Shiite clerics with ties to Iran, few of them have much of a following inside Iraq. George Bush’s dilemma remains: he can’t afford to get rid of Saddam, and he can’t afford not to.

Photo: Ousting Saddam would be a messy process. Bush wanted to fine-tune it: A pro-Saddam demonstration last fall (LES STONE-SYGMA)