Something big, as it turned out. Acting on Bush’s order, American warplanes and their British allies had carried out the heaviest air assault on Iraq in more than two years. Later, at a shirt-sleeve news conference with Fox, Bush tried to pass off the attack as a “routine mission.” It was hardly that. During last year’s presidential campaign, Bush called Bill Clinton’s Iraq policy a failure. Now he was trying to come up with a policy of his own. The first step, apparently, was to give Saddam a sharp rap on the knuckles.

But it wasn’t clear whether Bush was testing Saddam or vice versa. For more than a month the Iraqis stepped up their fire at allied planes patrolling the no-fly zones over northern and southern Iraq. They shot off more than a dozen surface-to-air missiles, as many as they launched in all of 2000. The military escalation was something new. For eight years Saddam’s dispute with Clinton centered on economic sanctions and Iraq’s refusal to accept U.N. arms inspectors looking for evidence of nuclear-, chemical- or biological-weapons development. Now, with the new U.S. administration, the long standoff acquired the extra dimension of a family feud.

The first George Bush organized the coalition that drove Iraqi forces out of Kuwait 10 years ago. But he allowed most of Saddam’s best troops to escape when he abruptly stopped the fighting–partly at the behest of Colin Powell, his top general and now his son’s secretary of State. And after the elder Bush left office, Saddam tried to have the ex-president assassinated during a visit to liberated Kuwait. “Saddam couldn’t possibly let these people come back to power without doing something to see how they react,” says a U.S. envoy in the region. “He is definitely going to poke and prod.”

The 18 American and six British attack planes hit five Iraqi air-defense sites. By late last week, damage assessments still had not been released. The Iraqis said two civilians were killed, warning that the “savage crime” would draw “decisive retaliation.” Bush got little support from Washington’s allies; Egypt, Jordan and Turkey, among others, denounced the bombing. The breakdown of the peace talks between Israel and the Palestinians worked to Saddam’s advantage as he sought support from Arab governments and Arabs in the street. Already his picture was being hung again in some Palestinian houses. Said a veteran Jordanian politician: “Saddam is seen as the man who stood up to America.”

This week Secretary Powell will start a tour of the Middle East, in which one of his principal objectives is to “re-energize” U.S. policy on Iraq, as he puts it. So far, the administration doesn’t seem to know where its review of Iraq policy will lead. In Mexico, Bush said Washington would continue to enforce the two no-fly zones “until that strategy is changed, if it is changed at all.”

A change of policy on the no-fly zones seems likely. “Now we have tit for tat,” says an administration official. “They shoot at one plane, we shoot back. They move a SAM, we take it out. The question is, what are we doing here? What is our objective? What are we doing to achieve it?” Once Powell’s review is complete, the administration could decide to reduce the daily patrols over the no-fly zones, using air power mainly to punish aggressive Iraqi behavior with raids like the ones last week.

The administration is also going through the motions of helping Iraqi opposition groups overthrow Saddam. Officials of the Iraqi National Congress, the U.S.-financed umbrella group, were summoned to the State Department last week to talk strategy. Afterward, the leader, Ahmed Chalabi, said he expected the new administration to be “more activist” in undermining Saddam and to show his group “a new spirit of cooperation”–presumably meaning more money. But the Iraqi opposition has been woefully ineffective against Saddam’s brutal regime, and a senior administration aide said the effort to overthrow him “is not the leading edge of policy.”

The U.N. economic sanctions on Iraq have become unworkable, riddled by smuggling and other illicit commerce. Some good U.S. allies have broken ranks with Washington on the sanctions issue. Turkey and Jordan cannot get along without the trade in Iraqi oil. Jordan receives its oil at a reduced price, saving $350 million a year–a vast sum for a nation with a gross domestic product of only $16 billion. European countries, notably France and Russia, are eager to resume all-out trade with Iraq, and even Britain, Washington’s closest ally, wants to revise the sanctions regime. Old enemies of Saddam like Syria, Iran, Egypt and some of the gulf states are opening up or expanding trade with Baghdad. “We’ve lost the propaganda war,” says an administration official.

Saddam won it, officials say, by selling overseas the amount of oil he is allowed to export under the sanctions and then refusing to spend the money on food and medicine, as he is also permitted to do. Instead, up to $13 billion has piled up in an escrow account administered by the United Nations while some Iraqis go hungry and many lack medical treatment. Meanwhile, for propaganda purposes, Saddam claims America is starving his people. Washington probably will have to back down on some of the sanctions, but it hopes to retain an embargo on materials and equipment that could be used to make weapons of mass destruction, along with some control over how Saddam spends his oil revenues. But in addition to reaching a new consensus on sanctions, Bush must do what his father did a decade ago: find a way to stop Saddam if he decides to disturb the peace.