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THREE WEEKS ago, Iraq yielded to rising international pressure and promised to free all the Western hostages by next March. Now, in the wake of a new United Nations resolution and U.S. threats of war, it says it has plans to free them even sooner.

No one can read the mind of Saddam Hussein, but the Iraqi dictator may be preparing for a period of negotiation, and the freeing of the hostages may be designed to improve the atmosphere for the coming talks. Secretary of State James Baker is going to Baghdad soon for direct talks with Saddam.

Certainly Saddam will be a more credible negotiating partner if he gives up on his barbaric treatment of foreign nationals.

Saddam is also no doubt aware of the strong opposition in Congress to the Bush administration's policy switch from a patient use of economic sanctions to an impatient readiness to use military force. His freeing of the hostages will encourage those who urge patience and buy him more time.

Meanwhile, a potentially important background move is the reported push in the U.N. Security Council for a wide-ranging Middle Eastern peace conference that would include the issue of the Palestinians as well as the seizure of Kuwait. The issues are not connected, but Saddam pretends they are, seeking to become a champion of the Palestinians in the Arab world.

The United States rejects this linkage, although it has not ruled out such a peace conference after Iraq withdraws from Kuwait. It might do some good if it advanced the cause of Palestinian rights and provided guarantees for Israeli security.

The Bush administration interprets the new hope on the hostages as a victory for its strategy, which recently has amounted to a type of brinkmanship. Baker made clear in a Senate hearing that the administration now favored force over economic sanctions and said that if it became necessary to use force, it would be used "suddenly, massively and decisively."

The administration may, indeed, have succeeded in scaring Saddam with its belligerent talk, but that is still no justification for its sudden shift in policy. It is also possible that the sanctions themselves, and the remarkable international unity against Iraq's agression that the sanctions signify, are putting on meaningful pressure.

The congressional hearings may prove to be a turning point in the crisis, since they have made starkly clear how divided the Congress and nation are on the war issue.

Witnesses with the highest credentials have repeatedly stressed that the sanctions should be given more time to work. William H. Webster, director of the Central Intelligence Agency, said Iraqi military effectiveness would be eroded by the sanctions over a three- to nine-month period.

Whatever the immediate reason for it, Saddam's statement that he is ready to free Western hostages suggests he is beginning to feel the real shakiness of his position.

That is exactly what the United States wants. Meanwhile, keeping the international coalition together, enforcing the embargo and keeping a credible force in Saudi Arabia are the right steps to continue taking -- and impatience must not be allowed to ignite a war that could, in the end, prove unnecessary.

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