(FORTUNE Magazine) – THE WHITE HOUSE says the battle plan of the U.S.-led coalition is ''a long plan.'' It had better be, and not only because Iraq's vast, chemically equipped army will be tough to root out. The dazzling weapons described on the following pages give the allies a powerful battlefield edge. But the coalition has a job even bigger than winning the war. It must also achieve conditions for winning the peace. That means being able to address a host of political and economic concerns, from leashing the large and dangerous armories of the Middle East to settling Palestinian claims to a homeland. How can this be accomplished? -- Allied forces must win big enough to change Iraq's politics. It is not sufficient to drive Saddam from Kuwait, waggle a minatory finger at him, and say, ''Be a good boy and don't ever do that again.'' No matter how weakened he is, that would show that he can take a licking and keep on ticking. He would fashion political victory out of military defeat. Says Orrin Hatch, the ranking Republican on the Senate's Select Committee on Intelligence: ''Behind the scenes, a goal has always been to remove and neutralize Saddam.''

It doesn't matter much whether he leaves his bunker in irons, in a box, or on a night flight to Mauritania as long as he is no longer in charge. Peace depends on prosperity in the region, and Iraq, the only Mideast country rich in both oil and water, could be a powerful engine of postwar economic growth. But Iraq would need help to rebuild itself first -- and good luck getting any from the U.S., Europe, or the Gulf states if Saddam remains in office. Already burdened by $80 billion in debt from its eight-year war with Iran (half owed to Kuwait, Saudi Arabia, and other Gulf states), Iraq will enter peacetime with a shattered infrastructure. It will have to absorb hundreds of thousands of soldiers into an economy that was not able to handle them after the 1988 cease-fire with Iran and is in far worse shape now. Iraq must rebuild bombed-out pipelines and terminals before it can sell much oil -- and may find near record low oil prices in a market that doesn't need its capacity. Who would run postwar Iraq? No one wants the country dismembered or put under long-term military occupation. Saddam's control has been so complete that all opposition leaders are in exile. The emergence of any one of them could lead to civil war in which Shiite Muslims and Kurds, long suppressed by Saddam's Sunni Muslim minority, stand in the way of stability. With Kurdish minorities of their own, Turkey, Iran, and the Soviet Union want that Pandora's box sealed. The best of a bad bargain at this point might be some kind of chastened regime drawn from deep within the Baath Party -- far below the ranks of Saddam's close circle of zealots -- or from the armed forces. In any case, the victorious allies would be in a position to insist that any new regime renounce the party's long-held expansionist credo. -- Regional security must be ensured. No peace can be won without a security structure that safeguards all nations in the region. U.S. troops can't stay on the ground for a long while in the Gulf. The American people wouldn't stand for it, nor would even the friendliest Arab nations. They should be replaced by a tripwire U.N. and Arab force in Kuwait, says Francois Heisbourg, director of the International Institute for Strategic Studies in London. American power would remain in the region in two ways. The Navy, which cruised the Gulf for decades before the war, presumably can keep doing so without igniting any more Arab anger than it did in the past. And if the Saudis agree, the U.S. should leave in their country a substantial cache of tanks and other equipment to make a repeat of last fall's logistical miracle a lot easier. The trickiest security problem is keeping a balance of power among neighboring Syria, Iran, and Iraq, ancient rivals for supremacy in the Middle East. The U.S. has tilted toward each in turn: toward the Shah's Iran, then Iraq, now Syria. The seesaw diplomacy hasn't worked. The end of the war will make this problem easier to manage, if not to solve. Two of the three will start from a position of relative weakness. Iraq will be unable to wage aggressive war, though it need not be left defenseless. Paul Davis, a Rand Corp. defense analyst, suggests postwar Iraq should have perhaps 25 divisions rather than the 55 with which it began the conflict. Iran is so far the war's big winner. Says Richard Helms, former CIA director and ambassador to Tehran: ''The Iranians got oil orders that might have gone to Iraq and Kuwait. They have the biggest population. They could end up the dominant power in the Gulf.'' But not soon. After its long war with Iraq, Iran has much rebuilding to do before its influence matches its ambition. Syria is the most immediately dangerous. Strongman Hafez al-Assad is in the Saddam mold -- the Joseph Stalin of the allies. He could be the region's Stalin in the aftermath too. The coalition needs to make it plain to Syria that any land grab toward Baghdad or Iraq's northern oil fields will backfire. The U.S. has important leverage: Deeply in debt and abandoned by his longtime patron, the Soviet Union, Assad needs friends. The new security relationships would be fragile at first, but Richard Perle, an Assistant Defense Secretary in the Reagan Administration, thinks they could be at least sturdy enough to ''create a situation where, though the tensions and resentments are still there, they're never quite sufficient to justify a war. Then maybe you can dampen them little by little, the way ((the Israeli- Egyptian accord at)) Camp David did.'' -- The regional arms race must be ended. In 1988 nearly a third of the weapons sold in the $49 billion international arms bazaar went to the Middle East. The Iraqis alone could have put on a trade show with hardware from the Soviet Union, France, China, East and West Germany, Brazil, Czechoslovakia, and a score of others. There is no quick way to persuade Mideast nations to buy plowshares. The war caused Israel to request $13 billion more in U.S. aid. The Arabs won't slow their arms race as long as Israel has nuclear weapons. Even the Greeks want more U.S. weapons because the Turks have them. The model for a gradual build-down of military forces ought to be the U.S.-Soviet arms control negotiations, in which the two sides cut back in roughly equal proportions. The region's potential benefactors -- the U.S., the European Community, and the Saudis -- should link all economic aid to a balanced reduction of arms. Restrictions have to be put on supplier nations, of course, though that isn't easy because arms trading, like peddling drugs, is so lucrative. New rules proposed by the U.S. that would limit technology sales to the Mideast are circulating among Western governments that make up the Coordinating Committee on Multilateral Export Controls (Cocom). Some U.S. contractors complain that the draft seeks to control too much. Government regulations usually do. But Cocom, whose original purpose was to block sales of military technology to the Warsaw Pact, has shown that it can be reasonable. Enforcing controls on the all-too-eager salesmen of France and Germany would give the European Community a chance to redeem the ineffectual ignominy with which it has so far covered itself in the crisis. The German government, which looked the other way when German companies sold chemical technology to Saddam, now intends to get tough. The Soviets may stay out of the arms business if they get a say in the Mideast peacemaking process, which President Bush may well give them. -- Economic disparities in the region must be lessened. Per capita GNP in the oil states of the Gulf Cooperation Council is seven times greater than Syria's and 13 times Egypt's. Gaps like these create pressure to use force to solve the problems of poverty. Iraq, remember, was after Kuwait's wealth. Peace won't be cheap, and the U.S. has had to pass the hat just to pay for war. Germany and Japan will likely help, but the oil-rich Arabs should be the lead bankers, and not just because that's where the money is. A locally run development program to create jobs, build housing, improve water management, and fund agriculture, trade, and civilian industry would transform Arab anger -- and the longing to reverse centuries of humiliations by Western infidels -- into something constructive. Fittingly, the Arab world's five million Palestinians would be big beneficiaries of reconstruction. So far, Saddam's aggression has struck hardest at the people he claims to champion. By brutalizing Kuwait, Saddam crushed the single richest Palestinian community, sending 175,000 architects and doctors, clerks and salesmen, into penniless exile. These people manned the engine room of the Kuwaiti economy, running a vast array of banks and businesses, including Consolidated Contracting Co., one of the largest construction companies in the Middle East, and Al-Ghanim Industries, a trading conglomerate. Saddam looted them as savagely as he has robbed the Kuwaitis. Palestinians in the Gulf lost $10 billion in property and savings, says Philip Mattar, head of the Institute for Palestine Studies in Washington. Also lost was the aid of Palestinians in Kuwait to brethren in the Israeli-occupied territories -- about $120 million a year. Furious when the PLO supported Saddam, Saudi Arabia and Kuwait's exile government withdrew $75 million of such aid. The middle-class Palestinians -- roughly 500,000 of them hold college diplomas -- will be the managers and engineers, lawyers and entrepreneurs, of reconstruction in the Mideast. Out of that effort will grow a Palestinian leadership that can, if the U.S. and Arab coalition partners play their cards right, begin to ameliorate the most intractable and dangerous problem of the region. -- The Arab-Israeli logjam must begin to break up. Before the war President Bush rightly resisted tying Iraqi withdrawal from Kuwait to any deal to discuss Arab-Israeli problems. Even so, as former President Jimmy Carter said in January, that's denying ''what everyone knows -- that linkage does exist.'' White House aides say that Bush realizes that the key to peace is tamping down the casus belli between Israelis and Arabs, chiefly Israel's occupation of the West Bank and Gaza. That's a poker chip for the Palestinians, but Israel, too, has added to its political capital by its gutsy forbearance under Iraqi attack. And the need to safeguard Israel has become all too evident -- not only because of the Scud attacks but also because the war has shown that Israel would be hard-pressed to fight an army like Iraq's on its own without resorting to nuclear weapons. The war may have created real opportunities for compromise. The PLO blundered monumentally when it chose to pander to the angry, impoverished masses rather than siding with the moderates, who mostly condemned the invasion of Kuwait. That doesn't mean the PLO or its leader, Yasir Arafat, is history. Despite the bitterness of the Gulf princes, says former Assistant Secretary of State Richard Murphy, ''three things in life are certain: death, taxes, and Arab reconciliation.'' But coalition Arab leaders might, for a while, insist that they do the talking for the PLO. That would fit the Bush Administration's vision, as one top aide describes it: ''We hope Egypt, Syria, and Saudi Arabia will become the key axis in the Arab world. We need to focus on state-to-state relations < as well as on the Palestinians.''

Together, Arab coalition members, the U.S., and the Soviet Union (with Israel and the PLO in the background) could plant seeds that, if all goes well, would eventually blossom into some kind of Palestinian entity. One first step, suggested by Henry Kissinger: Leave key strategic areas on the West Bank in Israeli hands; transfer population centers such as Hebron to a trusteeship run by moderate Arab states; and let Israel verify that the trusteeship is demilitarized. Combine that with an end to the Palestinian uprising, the intifada, and economic progress throughout the region, and Palestinian radicalism might begin to wither, permitting further steps toward statehood. Palestinian anger and radicalism, and Israeli fear and intransigence, can't be lanced like boils. But they can slowly dissolve. The process will take decades and could easily fail. Not trying, however, all but guarantees that the Mideast will explode in war again and again.