On 12 August 1990, Saddam "propose that all cases of occupation, and those cases that have been portrayed as occupation, in the region, be resolved simultaneously". Specifically, he called for Israel to withdraw from occupied territories in Palestine, Syria, and Lebanon, Syria to withdraw from Lebanon, and "mutual withdrawals by Iraq and Iran and arrangement for the situation in Kuwait." He also called for a replacement of US troops that mobilized in Saudi Arabia in response to Kuwait's invasion with "an Arab force", as long as that force did not involve Egypt. Additionally, he requested an "immediate freeze of all boycott and siege decisions" and a general normalization of relations with Iraq. From the beginning of the crisis, President Bush was strongly opposed to any "linkage" between Iraq's occupation of Kuwait and the Palestinian issue.

Another Iraqi proposal communicated in August 1990 was delivered to US National Security Advisor Brent Scowcroft by an unidentified Iraqi official. The official communicated to the White House that Iraq would "withdraw from Kuwait and allow foreigners to leave" provided that the UN lifted sanctions, allowed "guaranteed access to the Persian Gulf through the Kuwaiti islands of Bubiyan and Warbah", and allowed Iraq to "gain full control of the Rumaila oil field that extends slightly into Kuwaiti territory". The proposal also "include offers to negotiate an oil agreement with the United States 'satisfactory to both nations' national security interests,' develop a joint plan 'to alleviate Iraq's economical and financial problems' and 'jointly work on the stability of the gulf.'"

In December 1990, Iraq made a proposal to withdraw from Kuwait provided that foreign troops left the region and that an agreement was reached regarding the Palestinian problem and the dismantlement of both Israel's and Iraq's weapons of mass destruction. The White House rejected the proposal. The PLO's Yasser Arafat expressed that neither he nor Saddam insisted that solving the Israel–Palestine issues should be a precondition to solving the issues in Kuwait, though he did acknowledge a "strong link" between these problems.