Nervous Iraqis Cheer the Cease-Fire  By ALAN COWELL, Special to
the New York Times Published: August 25, 1988  A cease-fire with
Iran has stilled eight years of war and given rise to forgotten
and conflicting passions here: release and joy and a dread that
the fledgling peace is yet too frail to hold.  Now in its fifth
day, the cease-fire, sponsored by the United Nations, may also
have undermined Iraq's readiness to return to war should the
cease-fire collapse.  ''In a way, the Iraqis may have made it
hard on themselves by depicting the cease-fire as a victory,'' a
Western diplomat said. ''It will be difficult for them to get
people to contemplate going back on the defensive'' against
Iran. Celebrations and Falling Bullets  Where the response to
the cease-fire has been muted in Iran, celebrations here last
week verged on hysteria.  ''It seemed everyone had a gun and
everyone was firing it into the air,'' an Iraqi businessman
said. ''The bullets went up and no one thought about them coming
down.'' The casualit