By Kim Ghattas BBC correspondent in Baghdad

In Baghdad, it is back to business once more.

The offer was splashed on all front pages in Iraqi newspapers

After weeks of mounting tension, and feeling that war was inevitable - perhaps even around the corner - ordinary Iraqi have breathed a sigh of relief now that it looks like war has been delayed.

There has been a lot of self-congratulating here among Iraqi officials. The Iraqi offer to resume inspections was described here as a brave and wise decision.

We have put the US in a very difficult position - now they are isolated

Iraqi MP Muthafar el Adhami

In the daily Iraqi state-controlled press, the offer - and the positive reactions to it - were splashed on all front pages.

The mouthpiece of the ruling Ba'ath party, al-Thawra, said that the Iraqi decision to allow the inspectors back had "defused the bomb" and was an important step towards a comprehensive solution.

Iraq is now calling for the lifting of the 12-year-old sanctions - this is expected to be the content of a letter the Iraqi President, Saddam Hussein, will send to the UN within the next few days.

'Real offer'

Iraqis are going about their daily chores again.

Bush called the Iraqi offer a "ploy"

Whatever they think of their leadership, Iraqis are grateful for the respite.

But most people here do not believe it will last.

For the moment, the Iraqi offer has definitely succeeded in turning the tide. The view from here is that the US now finds itself alone and without a pretext for war against Iraq.

"We have put the US in a very difficult position - now they are isolated," Iraqi legislator Muthafar el Adhami said.

"Our offer is not a ploy, it's not a tactic, it's a real offer."

Regime survival

Neighbouring countries that looked as if they would go along with a US attack, like Qatar, will now find it more difficult to justify their position to their people.

But Mr Adhami said he also believed the US would not give up its attempts to start a war against Iraq.

With the US calling for regime change in Iraq, officials in Baghdad believe that Washington, unwilling to take "yes" for an answer, will soon find another pretext to go ahead with war.

For now, this is another victory for Saddam Hussein.

What is at stake here, after all, is the survival of the Iraqi leadership and the president who has outlasted many of his foes.

It has been pointed out before that the Iraqi regime would prefer death to dishonour, while fighting with all the means it has to survive.

But for the moment diplomacy seems to be working.