The Arab League ambassador to the United Nations told an audience of more than 100 people last night that the input of Arab nations in formulating a solution to the Gulf crisis is necessary to establish a lasting "new world order."

Clovis Maksoud, who is also a visiting professor at American University, said in a speech in the Science Center that Iraq's invasion of oil-rich Kuwait had created a frustrating dilemma for the Arab countries.

Maksoud said that while Arab nations could not accept the forcible annexation of Kuwait, the idea of Western military involvement was equally unacceptable.

"The invasion was a clear violation of the Arab state system, but it was done under the guise of Arab unity," Maksoud said.

In addition, the inability of the Arab states to resolve the crisis alone and a feeling that the series of U.N. Security Council resolutions were replacing an Arab solution added to the sense of frustration, Maksoud said.

"The Arab participation in a solution must be assertive and visible," he said. Otherwise, Maksoud said, an internal Arab civil war could be the result.

In the second portion of his hour-long talk, Maksoud discussed recent developments in the crisis--including President Bush's offer last week to hold direct talks with Iraq and Saddam Hussein's decision to release all hostages yesterday--that he said indicated a peaceful solution was possible and necessary.

Maksoud also cited recent testimony from several former military and cabinet officials who have been wary of supporting the use of force without giving peaceful measures an opportunity to work.

"The anticipation of the costs that a war option could have has led to a scrutiny process in the United States--not only from people in the traditional peace constituency but people whose job was war," Maksoud said. "They are not part of the liberal establishment but part and parcel of the establishment and they are having fears of an eventual drift to a military option."

Maksoud said policy makers should not fall into the "trap" of choosing between Iraq and Kuwait. "We are not to be put in a position where we have to choose between Iraq and Kuwait. There is a moral obligation to restore Kuwait's sovereignty. There is also a moral and pragmatic responsibility to consider Iraqi claims," he said.

Maksoud suggested that a U.N. peacekeeping force consisting primarily of Arab nations be created and stationed between Kuwait and Iraq while an international adjudication process take place to "decide the Iraqis' legitimate claims if any, and the legitimate and subsequent claims of Kuwait."

"There is a need to have peace but not at the expense of legitimacy and the need to have legitimacy but not at the expense of peace," Maksoud said. "I feel that a peaceful resolution of this conflict is the midwife of the Arab future democracy."

The speech was sponsored by the Society of Arab Students, the American-Arab Anti-Discrimination Committee and was funded by the Harvard Foundation.