PERSPECTIVE ON THE GULF CRISIS : The Failure in Geneva Sets Stage for Peace : With the U.S. out of diplomacy, other members of the coalition can finally begin serious bargaining.

By “walking the extra mile� for peace and then walking away from further diplomacy with Iraq, the United States has created the only conditions that can forestall war after Jan. 15. Provided that all the players in the Theater of Crisis now play their roles--Saddam Hussein most of all--the struggle in the Persian Gulf can be resolved peacefully.

In the early part of the crisis, the United States resisted going toe-to-toe with Iraq in diplomacy, in order to refute Hussein’s contention that he was confronting the “imperialists and Zionists� rather than the world. But on Nov. 8, when President Bush announced added troop deployments, he set off a war scare at home. His need to show the American people that he was pursuing every avenue to peace led to the set-piece meeting in Geneva between Secretary of State James A. Baker III and Iraqi Foreign Minister Tarik Aziz--where neither man had authority to compromise.

That done, the United States is fortunately out of diplomacy and other members of the worldwide coalition can finally get in. Now the serious bargaining can start.

Bush has played his necessary part in the drama of brinkmanship that he has scripted. He has prepared U.S. forces for war, taken an uncompromising line and sent Baker on “Mission Impossible� to Geneva. He is about to dragoon the U.S. Congress into approving war. But if Hussein has any further doubts about the war option, they will be dispelled by people who have credibility in Baghdad. Three stand out: France’s Francois Mitterrand, who is Baghdad’s leading arms merchant; Algeria’s Chadli Bendjedid, the Arabs’ peacemaker, and the U.N.’s Javier Perez de Cuellar, champion of Third World causes.

Their unique and critical role doesn’t stop with carrying the message of U.S. resolve. Saddam Hussein can accede to suggestions from them that he would have to scorn if they came from America. Indeed, by rejecting Bush’s letter, Aziz did the prospects of peace a favor, even though the American people took umbrage. This, too, was an important act of theater--and of serious diplomacy. It preserved the fiction that any concession Iraq makes is to the United Nations, not to the United States, a distinction that could prove critical.

Assuming that the Iraqi dictator is prepared to yield the fruits of aggression--the crucial requirement to prevent war--there is no lack of ideas. On Oct. 1, Bush said to the U.N. General Assembly that, following Iraq’s unilateral withdrawal from Kuwait, the two Persian Gulf countries could “settle their differences permanently.� He also foresaw opportunities “to settle the conflicts that divide the Arabs from Israel.� These are precisely the issues most often cited as being on Hussein’s wish list.

The United States insists that there be no face-saver and that Iraq not be rewarded. That seems to rule out either a deal on Kuwaiti territory and oil or “linkage� to the Palestinian issue. Yet both issues are obviously on the table and the United States has already agreed on a cardinal point of substance: that Arab-Israeli peacemaking should proceed rapidly. All that is needed now is “plausible deniability� about linkage.

This can be provided by the honored diplomatic practice of parallelism. Two events occur, seemingly quite independent, and statesmen deny a connection. But with a wink and a nod, everyone knows what is happening. This was the key to resolving the Cuban missile crisis, when President John F. Kennedy secretly agreed to remove U.S. nuclear missiles from Turkey, although he publicly denied that he had traded anything to get Soviet missiles out of Cuba.

The interlocutors--France, Algeria or the United Nations--have one more indispensable role: to go to the United States and represent a potential agreement as the suggestion of coalition partners. At Geneva, Baker even hinted at this when he said that “It is not for us (the United States) to walk back from solemn resolutions.� Just as Hussein might make concessions to third parties, so in this crisis Bush can bow to the wishes of the U.N. secretary general.

In diplomacy, as opposed to war, everyone has to get something. Perhaps allowing Hussein even a crumb will be too much for some people. But if, in exchange, he concedes the central point of complying with U.N. resolutions, it should not matter that war was avoided by resort to theater.