The deal between the UN Secretary General Kofi Annan and Saddam Hussein appears to have staved off the immediate threat of military action in the Gulf.
While the agreement has met with guarded approval from governments in the western world, the Iraqi leadership has interpreted the accord as a victory for Baghdad and a triumph over American aggression, while Kofi Annan is being feted as an Arab hero.
Rageh Omaar, who's been our correspondent in Baghdad for the past three months, considers whether the end of the crisis is now in sight.
How strange the cycles of history are. How cruel and ironic the memory of the past can be when set against the circumstances of today.
Exactly seven years ago a war, which lasted barely a month and a half and cost the lives of tens of thousands of people, was being fought by the United States, Britain and dozens of other countries, against Iraq, under the banner of the United Nations.
Today, the UN is the one thing that stands in the way of another conflict between Iraq and the West.
And seven years ago, the then Secretary General of the UN came to Baghdad in an attempt to avert a war. He met the Iraqi leader Saddam Hussein, but left empty-handed.
This time, the current Secretary General, Kofi Annan also came. He too met with Saddam Hussein - but was able to achieve what his predecessor could not.
When one steps back to reflect upon the events over the past few days in Iraq - the real significance of what has actually been achieved begins to reveal itself.
On my first visit to Iraq back in September, I remember a friend saying to me that for ordinary Iraqis, the Gulf War, was a war that never ended. And for the first time, I now realise what he meant.
The war didn't end with the last battle in the empty, scorched deserts of Saudi Arabia. It didn't end when the remnants of the Iraqi army were bombed and shot at as they fled in chaos from Kuwait packed into stolen cars and ambulances. And it didn't end when the ceasefire was signed.
For ordinary Iraqis, the seven years of sanctions and international isolation - and the seemingly never-ending work of UN weapons inspectors was in a very real sense a continuation of the Gulf War.
For them, the daily struggle in the face of economic ruin is made that much more painful by the memory of the kind of lives they once had.
But for the first time, people here are daring to allow themselves to hope that maybe, the agreement between Iraq and the UN is the beginning of the end of the Gulf War.
It's not just the terms of the agreement which makes them believe this but it is the sense that through Kofi Annan a new relationship with the UN has begun.
Iraqis are beginning to believe that their grievances are now being considered and taken into account - and that maybe the outside world will not just view them and their nation through a prism which portrays them as a closed, violent, pariah society.
That's why Kofi Annan's motorcade was cheered by hundreds of ordinary Iraqis through the streets of Baghdad. Here, they said to themselves, is a man who is at least prepared to try to understand us. And who is himself from a developing country and hasn't just come to arrogantly wave his finger and tell us what to do.
Even I never believed this was possible. Until the very end, I shared the belief with many Iraqis that a military confrontation was not just inevitable but certain.
Iraqis had become accustomed to believing that the UN and the West had only dealt with their country through sanctions and the use of military force - and with that in mind, they thought it was only a matter of time before the United States and Britain would launch a massive bombing campaign.
And having been through bombardment and similar crises before people did not panic - instead there was a sense of resignation and fatalism.
Ordinary life went on. I remember going to an amusement park on Baghdad island on the outskirts of the city - where middle class families had come to enjoy the weekend.
They would play football in the park, and tour the island on the dozens of boats - equipped with a dance floor and the loud music booming out across the water. As I watched children howl and scream with pleasure as they took turns on the skyrides, whilst their parents sat under the shade of the gum trees, furiously fanning their barbecue grills - I found it hard to believe that I was in a city that was on the verge of a sustained air attack.
Driving around the city, became for me, the saddest pleasure.
I would cross the numerous bridges over the magnificent Tigris river that courses its way through Baghdad and wonder how many of them would be left standing.
And as I drove through Saadoun Street, I would look at every face in the markets, shops and restaurants and wonder how yet another conflict would affect them.
How glad all of us are - journalists and Iraqis - that our pessimism and fatalism was misplaced. But yet, we cannot say this is the end.
The ink has not yet dried on the agreement between the UN and Iraq and its durability has yet to be tested. At the back of my mind is a feeling that a military confrontation has only been postponed. And that we still cannot say that the Gulf War has really ended.
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