(FORTUNE Magazine) – THE NEW ENTENTE between the U.S. and the U.S.S.R. is probably in better shape than many people think. The trouble is that the Soviet economy is in even worse shape than they think. Mikhail Gorbachev's grasp is shaky, his future clouded. So forget for now about any dramatic moves toward a free market or any major opportunities for investment. The problem confronting the fragile partnership between the two powers is not that the Soviets made a desperate end-game bid to settle the Gulf conflict diplomatically. Whatever Gorbachev's precise aims, top White House aides don't see in them the purely malevolent geopolitical intent some U.S. hawks descry. Instead they point to the Soviets' willingness to stick with the coalition and refrain from mischief-making at the U.N. as reasons to hope that the U.S.S.R will continue to cooperate on crucial issues such as preventing a new Mideast arms race. What's worrisome is the chance that the Soviet Union's accelerating internal crackup could eventually outpace -- and undermine -- George Bush's bid to erect a new world order. A bitter joke making the rounds in Moscow underlines the extent to which Soviets feel humiliated by America's rout of the Iraqis they armed and trained -- and appalled at their own persistent economic and technological shortcomings. Question: ''What's the difference between Scud missiles and Aeroflot?'' Answer: ''Aeroflot has killed more people.'' Even if Gorbachev intends to preserve good relations with the U.S., the Communist Party hard-liners and Red Army generals with whom he has recently allied himself may draw a different lesson from the Gulf war. The failure of Soviet military hardware could make it tougher to argue for much-needed cuts in defense spending. Already Defense Minister Dmitri Yazov has called for improving the air defense systems that proved so useless in the skies above ! Iraq. Similarly, the failure of Soviet diplomacy strengthens the hand of those who prefer to portray the U.S. as an old enemy rather than a new partner. A caustic editorial in Pravda published two days after allied troops stormed into Kuwait charged that the war showed that the U.S. is still bent on achieving ''global domination.'' Says Mikhail Poltoranin, Minister of Information in the Russian Republic government: ''By insulting the West, conservatives want to bring back the Iron Curtain. Their goal is to survive for a few more years in power.'' Worst of all, though Gorbachev still speaks of his desire to move toward a market economy, intellectuals as well as ordinary citizens no longer take his rhetoric seriously. Since last summer he has dumped or lost almost every one of his reform-minded advisers, replacing them with men like Prime Minister Valentin Pavlov, who accuses foreign businessmen of plotting to overthrow Gorbachev by -- get this -- dumping rubles into the economy. Disillusioned reformers are rallying instead behind Boris Yeltsin, leader of the Russian Republic, who has openly called on Gorbachev to resign. Even establishment figures like Georgi Arbatov, a Kremlin weather vane who served as a foreign policy adviser to both Leonid Brezhnev and Gorbachev, have gone over to Yeltsin's camp. Yeltsin, in turn, is facing a fierce counterattack by Gorbachev's allies in the media and the legislature, who aim to remove him from his post. The political debate has become so polarized that Moscow now buzzes with talk of civil war once spring arrives. Caught in the middle are foreign businessmen, who report a steady increase in the hassles coming from the Soviet bureaucracy. Many bank accounts, for example, remain effectively frozen since Prime Minister Pavlov in January launched a ''money reform'' that confiscated all 50- and 100-ruble notes. Gorbachev himself still insists on the importance of foreign investment and seems determined to hold the door open on foreign policy cooperation with the U.S. But the risk that door could slam shut -- pushed either from the Soviet side or from the West if the internal repression grows -- is rising. A top Western diplomat's advice to anyone considering investing in the U.S.S.R.: ''Sit on your wallet -- at least until the summer.''