A senior Saudi intelligence official, who spoke on the condition of anonymity about this evolving position in a recent interview in Paris, said that Saudi Arabia was less concerned now about what impact a breakup of Iraq's 17 million people would have.

"This possibility may in fact be a better solution than the present situation," the official noted. 1961 Precedent Cited

Echoing what appears to be a wide sentiment among Kuwaitis, the Saudi official said a majority of the Iraqi people "continue to believe that Kuwait belongs to them." He argued that the attempt to annex Kuwait had a precedent in 1961, when another Iraqi Government, the regime headed by Abdel Karim Kassem, asserted sovereignty over the gulf sheikdom after Britain granted it independence.

"What we need to do is what the Americans did in Japan and Germany after World War II," the Saudi official said. "We must go into Iraq and change the whole setup, the whole mentality, including the social structure of that country which permits dictators like Saddam to resurface there with regularity every 20 years or so.

"To do that," he said, "we may need several small entities to deal with instead of attempting to preserve one Iraqi nation."

In Kuwait, a similar sentiment is expressed more openly now in newspaper editorials. 'A Wholly Different State'

"We must substitute a state with a wholly different state, a major surgical operation that will take much time to execute," wrote Ahmad Jarallah, publisher of the pro-Saudi Kuwaiti daily, Al Siyassah, in a front-page commentary on the eve of the second anniversary of the Iraqi invasion. "In the process, however, we must prepare to coexist with a new Iraq in the post-Saddam era that will be for at least 20 years the scene of much internal strife and settlement of accounts."