It appears to me that tacit permission was indeed given to Saddam to go ahead with his kuwait invasion. He may have decided against the invasion without the permission, but I personally doubt it. I think he was going to attack Kuwait no matter what. As far as retreating goes, I think he truly felt he could win so why would he retreat? Ludicrous in retrospect, but I think he was going from the history of our war in Viet Nam and expected a repeat.