BAGHDAD: It was a breezy Monday night, and the mood in Horreya Square was festive as a crowd that included college students, old men and shy young girls gathered outside the Faqma ice cream shop to indulge.

In the Iraq of the mid-1990s, such a scene would have been impossible. People were penniless and the government strictly rationed milk and sugar to ensure that the country’s embargoed food supplies covered necessities.

But those days are past. Step by step, economic and social life is rebounding and the country is breaking out of limits imposed on it by the United States and other Western powers after the Persian Gulf War a decade ago.

Iraq is now sufficiently flush to independently launch an oil embargo, as it did last month, suspending exports of crude as a protest against Israeli occupation of Palestinian cities in the West Bank. That won Iraq admiration in many Arab countries, as have its payments of $25,000 that US officials said have been made to the families of each Palestinian suicide bomber.

Many Iraqis and foreign diplomats here said the country’s resurgence will make the US goal of unseating President Saddam Hussein all the more difficult to achieve. And, in the meantime, the growing prosperity is allowing Hussein’s political apparatus to proclaim that Iraq was the ultimate victor in the Persian Gulf conflict.

“Many people predicted that Iraq would collapse in 1991, but we have reconstructed our country,” Oil Minister Amir Mohammad Rasheed said recently at a news conference here. “We know it is difficult for those without thousands of years of history to understand, but oil is not the only resource of the Iraqi people.”

Oil, however, is what’s driving the rebound. Iraq is allowed to sell as much petroleum as it wants under UN sanctions to buy food, medicine and other necessities. But money is also entering the country illegally through oil smuggling and a complicated surcharge scheme that a Wall Street Journal analysis recently estimated provides around $2.5 billion annually outside the control of sanctions.

While US officials contend that much of the money is being spent to refit the Iraqi military, develop long-range missiles and possibly assemble nuclear, biological or chemical weapons, clearly some of it is improving the lives of Iraqi citizens.

Per capita income now stands at around $2,500 annually — double that of Egypt, according to the CIA World Factbook. Iraq’s gross domestic product grew about 15 percent in the year 2000.

“Little by little, things are getting better. You can find everything,” said Sinan Abdul Hamid, 20, an engineering student whose chief complaint about life is that the lasers used in his classes are outdated.

Entrepreneurs are bringing shiploads of computers, televisions, stereos, appliances and other goods from Dubai to stock the shelves of Baghdad’s shops. Wealthy Iraqis can arrange long-distance special deliveries of their favourite foods from grocery stores in Amman, Jordan, 12 hours by car and a few bribes away from the Iraqi capital.

Farmers are buying new trucks; new double-decker buses are moving about the capital. A few privately owned luxury cars are breaking the previous monotony of wobbly taxis and private cars with shattered windshields.

As part of the upturn, Iraq has again become a major force in the regional economy. Much of its $13 billion in annual imports come from Turkey, Egypt, Saudi Arabia, Syria and Jordan, Iraqi officials said, helping bolster economies in the region. They added that Turkey’s sales to Iraq doubled in the past year, to nearly $1 billion, while Egypt, starved for hard currency, now gets $2 billion a year from goods its sells to Iraq.

Iraqis are travelling abroad more easily, too, on the expanding network of flights available since Saddam International Airport reopened a year ago. Royal Jordanian Airlines offers four flights a week between Amman and Baghdad, and service is also available to the Syrian capital, Damascus, and to Moscow.

Iraqi diplomats circle the globe pressing their nation’s case, while business leaders from the Arab world, Russia and Europe fill Iraq’s version of a five-star hotel, the Al Rasheed.

The future of Iraq and Hussein has been a chief preoccupation of the region, as well as of world powers, for more than a decade now. While there is agreement that Iraq’s isolation as a nation should end, there is disagreement over whether that should happen while Hussein is still in power.

To Washington, he remains a global menace, intent on developing weapons of mass destruction and likely to use them against Israel, Arab neighbours or even the United States. At a recent UN Security Council briefing, US officials presented evidence of new long-range missile sites, and foreign diplomats in Baghdad cite suspicions that Iraqi officials have stepped up efforts to acquire material for a nuclear device.

One diplomat here, whose government has counselled the United States to avoid military action in the absence of clear provocation, said the risks of toppling Hussein might be as great as the risks of leaving him in power.

In society here, the diplomat said, “there is a big hate for the US Every malaise is attributed to them and not the regime. The complexity of the problem is that once Pandora’s box is open, are we in a more difficult position than now?”—Dawn/LAT-WP News Service (c) The Washington Post