From the beginning, U.S. officials insisted on a total Iraqi pullout from Kuwait, without any linkage to other Middle Eastern problems, fearing any concessions would strengthen Iraqi influence in the region for years to come.

On 12 August 1990, Saddam Hussein proposed a settlement linking Iraqi withdrawal from Kuwait to an Israeli withdrawal from the West Bank and Gaza strip, occupied by Israel since 1967. Syria from Lebanon, and Israel from the territories it conquered in 1967.

Another Iraqi proposal communicated in August 1990 offered to withdraw from Kuwait and allow foreigners to leave in return for the lifting of sanctions, guaranteed access to the Persian Gulf through the Kuwaiti islands of Bubiyan and Warbah and full control of the Rumailah oilfield that extended slightly into Kuwaiti territory from Iraq.

Other terms of the proposal, according to memoranda that Royce quotes, were that Iraq and the U.S. negotiate an oil agreement "satisfactory to both nations' national security interests," "jointly work on the stability of the gulf," and develop a joint plan "to alleviate Iraq's economical and financial problems." There was no mention of U.S. withdrawal from Saudi Arabia, or other preconditions. A Bush administration official who specializes in Mideast affairs described the proposal as "serious" and "negotiable."

In late December 1990, Iraq made another proposal, disclosed by U.S. officials on 2 January 1991: an offer "to withdraw from Kuwait if the United States pledges not to attack as soldiers are pulled out, if foreign troops leave the region, and if there is an agreement on the Palestinian problem and on the banning of all weapons of mass destruction in the region." Officials described the offer as "interesting," because it dropped the border issues and "signals Iraqi interest in a negotiated settlement." A State Department Mideast expert described the proposal as a "serious pre-negotiation position. The White House rejected the proposal because it contained preconditions for a pull out, added to the fact that Israel would be unlikely to give up its nuclear program.

However, when Secretary of State James Baker met with Tariq Aziz in Geneva for last minute peace talks in early 1991, Aziz reportedly made no concrete proposals and did not outline any hypothetical Iraqi moves.