So we disagree
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.
"Those who desire to give up Freedom in order to gain Security, will not have, nor do they deserve, either one."
--Thomas Jefferson