In the weeks before the Gulf War, the CIA presented George Bush Sr. with a psychological profile of Saddam that hasn't altered in its essentials since. Analysts concluded that Saddam was a stable personality and a rational, calculating decision maker. They had no evidence he suffered from mental illness. He was not exactly reckless but was comfortable wielding absolute power, using naked force and taking risks. He was wary and opportunistic and relied only on himself to make decisions. And his sense of mission could taint his judgment.

Saddam's Iraq

For Saddam, the Gulf War was not a defeat but a victory: though he was evicted from Kuwait, he remained in power. In the decade since, he has endured strict economic sanctions and has evaded U.N. inspections designed to eliminate his weapons of mass destruction. Today Iraq has emerged significantly from its isolation.

Saddam's "Republic of Fear"—as Iraqi exile Kanan Makiya dubbed Iraq in the title of his 1989 book—looks remarkably tame these days. You can fly into Baghdad's Saddam International Airport on one of the embargo-busting planes from Jordan or Syria or Lebanon that make regular runs—even if you are greeted by blood-red down with america slogans daubed along the gangway in English. All the capital's buildings, bridges and roads damaged in the 1991 war and in follow-up American attacks in 1998 have been rebuilt. Fancy shops selling the goods of globalization line the posh streets of the al-Mansur neighborhood, and even the poor man's market in the Washash neighborhood peddles plentiful fruit and cheap Chinese TVs.

As goods of all kinds flood in, incomes are rising to pay for them. In 1998 Yusef, a Baghdad resident, drove a broken-down taxi and lived in a house that was bare after he sold the furniture to support his five children. Today Yusef is a partner in a fleet of GMC vans that carry people and merchandise to Amman, Damascus and Beirut. "Life is so much better," he says. "We have some money, we have a good house, my children are healthy."

The supply of medicine from abroad, bought with money the U.N. allows Iraq to earn from limited exports of oil, has improved substantially over the past year. Electricity now runs 24 hours a day, at least in Baghdad. There is plenty of money too for Saddam's fantastic construction projects: giant mosques, more palaces and enough statues of him, goes the joke, to have one for each of Iraq's 24 million people. These grandiose projects are widely resented as a waste of money better spent on desperately needed housing. But the new mosques, at least, address a surging religious faith among dispirited Iraqis seeking escape from the bitter realities of daily life.

For years, Saddam ruthlessly milked the suffering of the Iraqi people to erode the global determination on maintaining the U.N. sanctions. Now he has shifted gears to meet a different objective: to keep those same long-suffering Iraqis from rebelling against him. So the taps have opened: more of the money from his legal oil sales and illicit oil smuggling, once reserved for the purpose of bribing regime loyalists, is now being spread around to the populace.

Saddam has always had to buy his friends. "The only ones who love Saddam," says an Iraqi businessman, 32, whom we'll call Ahmed, "are his family. Everyone else, even his closest circle, must be paid to love him." Saddam rules with an exquisite combination of terror and reward. "He will make you a millionaire or kill you," says Francis Brooke, an American adviser to the Iraqi National Congress (I.N.C.), the London-based, U.S.-funded, main Iraqi-opposition group. "Both are effective levers." Sometimes the two are applied almost simultaneously, as when an individual tortured in prison is welcomed home with a new Mercedes.

In his book Saddam's Bombmaker, the defector Khidhir Hamza, who ran Saddam's atom-bomb program until he fled in 1994, writes frankly of the seductive power of Saddam's largesse. His way of maintaining power has always involved carrots and sticks. Club memberships, chauffeured cars, lavish houses, foreign travel and Johnnie Walker scotch are the means by which Saddam keeps the allegiance of those he needs to protect him and advance his interests. Torture, imprisonment and execution are the lot of those who fail or offend.

The tales of Saddam's brutish violence are legion. Abu Harith (not his real name) spent his life in Saddam's inner circle. He still looks the part: he has the characteristic paunch, the moustache, the Rolex, the confident walk of a senior officer. He spent a year in the foreign directorate of the Defense Ministry, then transferred into Jihaz al-Amin al-Khas, or Special Security Organization (SSO), the elite intelligence outfit responsible for Saddam's personal security, the construction and hiding of weapons of mass destruction and other sensitive tasks. In the 1990s, Abu Harith ran a front company in Jordan purchasing computers, chemical-analysis equipment and special paper for forging passports; then he moved on to Dubai to oversee a lucrative oil-smuggling enterprise.

Abu Harith can't feel his fingertips or his right leg anymore. His joints ache, and his fingers are puffy. These, he says, are the aftereffects of being poisoned by the guards of Saddam's son Uday in 1998. One day that October, he was out walking with a young female cousin when Uday, cruising in his car, spotted her and ordered his guards to snatch her for his evening's entertainment, as is his notorious practice. Abu Harith fended them off. That night Uday's thugs grabbed him at his house and sped him to Uday's farm, where he says he was tied to a palm tree for two days and repeatedly beaten. Uday branded him with a hot iron on his back and shoulder. Then one of the guards injected Abu Harith's arm with something that hurt; he still has a lump there. He was driven back to Baghdad and dumped near his home. When he fled to the Kurdish-controlled north, his suspicions were confirmed: he had been given thallium, a heavy metal used in rat poison that kills slowly through internal bleeding. Kurdish officials got him to Turkey, where he received medical attention.

Colonel Hamadi (not his real name) was commander of a tank unit in Iraq's Third Army before he was arrested for links—which he denies—to an opposition party. He was held for 10 months. Saddam's military intelligence, he says, tortured him several times a week. "Sometimes they hung me from a ceiling fan to make me confess to something that was not true," says the colonel. When he was released last spring, he fled to northern Iraq, where the country's Kurdish minority functions almost autonomously from Baghdad under the protection of the U.S.-British no-fly patrols. But Hamadi left his family behind. His father was recently arrested. "If you are against them," says the colonel, "every one of your relatives is in danger."

Inside Iraq, Saddam's constituents can express despair about such oppression only quietly. An entire population has developed a sixth sense about keeping genuine feelings buried deep. "I can never say what I think," Layla, 38, a former office worker, says from the privacy of her home. With those they trust, Iraqis do grumble about Saddam and his excesses, about the way his ruling circle assesses 7% "for the family" on every business deal. But 30 years of Saddam have instilled in Iraqis a reflexive habit of survival. They seem too tired, too disillusioned, too frightened of one another to plot serious conspiracies. And they have total disdain for the opposition exiles scheming abroad.

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