It was mid-July 1990, and for several days the U.S. intelligence community had been watching Saddam Hussein mass his forces along Iraq’s border with Kuwait. Most of us in the administration of President George H.W. Bush—I was then the top Middle East specialist on the National Security Council—believed that this was little more than a late-20th-century version of gunboat diplomacy. We figured that Saddam was bluffing to pressure his wealthy but weak neighbor to the south into reducing its oil output.

Iraq was desperate for...