It wasn't "pretty clear cut" IMO.
See, e.g., [link|http://www.wwnorton.com/lenses/demo_historical_bg1.htm|this] analysis:
President George Bush had been receiving assurances from around the Arab world that the positioning of Iraqi troops along the Kuwaiti border was nothing more than Iraqi saber-rattling. President Mubarak of Egypt, King Hussein (no relation to Saddam) of Jordan, and King Fahd of Saudi Arabia all passed along this communication, in part, because they had been given this explanation by Saddam Hussein himself. The general message coming out of the Arab world portrayed the situation as an Arab dispute that would be resolved diplomatically.
On July 25, 1990, the American ambassador to Iraq, April Glaspie, was summoned to meet with Saddam Hussein, who questioned her directly about America's position toward Iraq. During the meeting Ambassador Glaspie reportedly said, " . . .[W]e have no opinion on the Arab-Arab conflicts, like your border disagreement with Kuwait . . . . We hope you can solve this problem using any suitable methods via . . . President Mubarak [of Egypt].\ufffd Saddam responded that he had agreed to diplomatic meetings being set up through the efforts of Mubarak and had told the Egyptian president to \ufffdassure the Kuwaitis and give them our word that we are not going to do anything until we meet with them.\ufffd Saddam went on to tell Ambassador Glaspie, \ufffdThere, you have good news.\ufffd [Glaspie transcript, p.130, 133].
In Washington D.C., Richard Haass, the director for Near East and South Asian affairs on the United States National Security Council, was just completing an assessment of the situation in which he had laid out three possible scenarios for President Bush: (1) This Iraqi military movement was \ufffdmuscular diplomacy\ufffd; that is, Iraq was trying to intimidate Kuwait into a diplomatic compromise on oil production quotas and loan repayment; (2) Iraq was positioning itself to take a northern Kuwaiti oil field in an effort to raise the stakes and compel a negotiated settlement; (3) Iraq was preparing an all-out invasion and intended to occupy the entire country. Haass had already concluded that the third scenario was the least likely, and upon receiving a report from Ambassador Glaspie, he forwarded his report with a sense that the crisis was actually winding down (Interview with Haass).
Most major leaders were convinced that an actual occupation was not going to happen given what Saddam Hussein himself had been saying. Thus, the full-scale occupation of Kuwait was seen in Washington and around the Arab world as the consequence of a major ruse on the part of Saddam Hussein. Their reaction to the invasion, therefore, was influenced by the sense among these leaders that they had been deceived. The seriousness of the Iraqi action, however, became more intense as Iraq's military forces began to head beyond Kuwait City toward the Saudi Arabian border. While American relations with Kuwait had been indifferent before the invasion, Saudi Arabia represented a key regional player and American friend. American regional economic and political interests relied on good relations with the Saudi royal family. The possibility of an attack on Saudi Arabia energized the Bush administration's national security team, and important decisions were made rapidly in the course of the first week of August.
There's a big difference between being not expressing an opinion on how a conflict should be peacefully resolved with the help of a third party, and giving a "green light" to an invasion. Saddam apparently didn't understand that, or didn't care.
But I don't think it would have deterred him anyway. He didn't spend years and billions assembling an army with 10,000 tanks to back down once he decided he wanted Kuwait.
Cheers,
Scott.
