Kuwait City ? The prospect of war in Iraq has cast a pall over most of the Arab world. But here in frontline Kuwait, it has fueled a roaring stock market, with businessmen dreaming of a postwar boom.

As war between U.S.-led forces and neighboring Iraq draws near, Kuwaiti businessmen are confident that the United States will remove Saddam Hussein swiftly and painlessly — and open the door for lucrative commercial deals.

Cement and construction companies are planning to help rebuild Iraq from the devastation of a third war in two decades. Banks hope a new, friendly government in its northern neighbor will need massive loans to fund a rebirth. Food wholesalers are getting ready to feed hungry Iraqis.

Mobile phone networks, insurance firms, transportation companies — nearly everyone here has fantasies of a post-Saddam golden age in Kuwait.

“When that regime goes, everything will be prosperity,” said Saleh al-Saleh, a 49-year-old stock trader.

The stock exchange’s trading hall, a three-story room ringed by digital boards and electronic tickers showing rising stock prices in Arabic numbers, was infused Sunday with the combined murmur of hundreds of chatting traders and the percussive clack, clack, clack of their swinging worry beads.

The traders — all men — wore brown and gray robes and white headscarves as they milled about, speaking into their cell phones or sitting in plump leather chairs drinking coffee delivered by a team of waiters.

Since the possibility of a U.S.-led war against Iraq became serious — and Kuwait was designated the launch pad for the attack — the stock exchange has soared.

At the end of October, the exchange’s index was 2,060. On Sunday, it closed nearly 30 percent higher at 2,642.

Aside from a brief bull market in 1996 and 1997, when many Kuwaiti companies were privatized, the market here has not been this strong since 1979, just before the eight-year Iran-Iraq War began.

The regional instability that conflict caused made many investors wary. It got far worse after Iraq invaded Kuwait in August 1990 and took over the whole country in a matter of hours.

When Saddam’s forces were driven out seven months later, he left Kuwait’s oil wells in flames and its economy in tatters.

The exchange itself shut down after Saddam invaded and only reopened on Sept. 28, 1992, more than a year and a half after Iraqi troops were pushed out.

Saddam’s continued grip on power in Iraq and his almost routine threats to reinvade have pushed many Kuwaitis to invest their money abroad, where it might be safer.

While most of the Arab world is dreading a war because of the potential for economic and social upheaval, many Kuwaitis feel that with Saddam gone, Iraq and Kuwait could restore their once-deep economic ties: Iraq used to export dates and water to Kuwait, while this tiny desert emirate’s large port served as a transit point for imports headed to Iraq.

Kuwait is not “looking forward to destroying Iraq so we can rebuild it and benefit from that,” said Abdul Mohsen al-Hunaif, Kuwait’s undersecretary of finance.

But the dividends of “regime change” will surely be huge, he said.

“If there is stability there and security, this will benefit not only Kuwait and the Emirates and the Gulf, but everyone in the whole area,” he said.