That rosy scenario looks counterintuitive, to say the least. Not since Charles de Gaulle booted out NATO have relations between France and the United States been so fraught. Chirac deeply offended Washington over Iraq. Yet now he seems to be reaching out for a reconciliation. Last month he gave a surprisingly warm reception to James Baker, the former secretary of State serving as Bush’s personal envoy in seeking relief from the $120 billion in debts racked up by Saddam Hussein. To Washington’s evident delight, Chirac said France was willing to forgive a large chunk of its $3 billion share–provided that French firms would be removed from a U.S. blacklist on Iraq reconstruction contracts. France’s cooperation on debt relief (echoed by China and Japan last week) would also set a good example for Germany and Russia. Both opposed the war, and both hold billions of dollars in unpaid Iraqi debts. They, too, want to open doors to their companies for lucrative business deals in Baghdad.

France has much to gain from a detente. In particular, the French oil company TotalElfFina hopes to exercise concessions to exploit Iraq’s rich southern oilfields. The country’s military commanders are also dismayed by the current spat with the United States and are pushing for a truce. Senior government officials tell NEWSWEEK that Chirac may in fact be willing to explore once again France’s eventual integration into NATO’s military command, starting with the dispatch of French peacekeeping troops to Iraq next summer under NATO auspices.

That would be good news for the Bush administration, determined to reduce the U.S. military presence in Iraq ahead of the November 2004 presidential election. Indeed, a NATO option for Iraq–based on the template that sent an allied peacekeeping force into Bosnia in 1995 under United Nations cover–is shaping up as a key item on the agenda of alliance leaders when they gather for their June summit in Istanbul. Previous negotiations to bring France back into NATO’s military command have fallen apart because the United States would not accept French demands to assume control of the southern Mediterranean theater, for fear of disrupting the U.S. chain of command for the Sixth Fleet. French sources say that Chirac may now be willing to accept a modified arrangement that would give France two key NATO positions at the brigadier-general level in return for its full participation in alliance operations.

There are other forces pushing for a rapprochement. One is personal, growing out of Chirac’s own fondness for the United States dating back to his college days working as a soda jerk at a Howard Johnson’s restaurant in Boston and courting a South Carolina belle who called him “honeychile.” Friends say Chirac has been perplexed and exasperated by his frosty relationship with Bush, who they say has spurned previous good-will overtures and revels in disparaging France as an unreliable partner. Iraq so strained relations between Secretary of State Colin Powell and Chirac’s political godson, Foreign Minister Dominique de Villepin, that the French president has turned to intermediaries such as Sen. Joseph Biden Jr., the ranking Democrat on the Foreign Relations Committee. In Paris last month, after an hour of listening to Chirac vent his frustrations, Biden warned the French leader not to play the “dangerous game” of betting against Bush’s re-election in hopes that a more friendly Democrat would take over the White House. “I told him that he needed to work toward rebuilding relations with Washington now,” Biden told NEWSWEEK. “Waiting would make a bad situation worse.”

Chirac is also under pressure from his European partners. After EU leaders failed to approve a new constitution at their summit in Brussels last month, Chirac insisted he would lead a core group of countries, starting with Germany, to accelerate the process of closer political and economic unity. But according to German officials, Chancellor Gerhard Schroeder, despite his alliance with Chirac in opposing U.S. military action in Iraq, worries that could alienate other members and fracture the Union even further. Concerned about maintaining friendly ties with future growth markets on its eastern frontier, these sources say, Germany realizes that its strategic and economic interests are best served by cooperative relations with Poland and other new members–who were outraged when Chirac bluntly told them they should have kept quiet rather than voicing their support for the United States during the war.

French business executives are especially alarmed by the risks of economic fallout. So far, the impact has been minimal. In fact, profits and investments have continued to surge across the Atlantic, despite the bad blood between Paris and Washington. At the peak of the Iraq crisis–the first six months of 2003–American corporate profits in France more than doubled to $1.7 billion, while French companies operating in the United States earned $2.5 billion, up from $1.4 billion in the previous year. But the French economy has been sagging lately, and many executives have warned Chirac that the impact on French jobs and living standards could worsen if relations with Washington deteriorate further.

Their concern is not so much a few bottles of Bordeaux flushed down American drains, but that the global economy could be damaged and the prosperity shared on both sides of the Atlantic will suffer if today’s quarrel between old friends leads to permanent estrangement. As the Elysee evening visitors point out, their own national interests should propel France and the United States to patch up their differences. When the time comes to show appreciation 60 years after American soldiers climbed the Normandy cliffs to start pushing Nazi invaders out of France, they hope that their message will ensure that Chirac and Bush will be standing shoulder to shoulder in a new display of partnership.