One option would be to succumb to the blackmail, blame the whole thing on freelance terrorists, and give Saddam a pass -- let the whole 9/11 thing go with a nod and a wink, in other words. This was Clinton's response the first time Hussein tried to topple the WTC, back in '93. Obviously, it wasn't a very successful strategy, except for Clinton.
Another option would be to go public on Saddam's authorship of 9/11 and his anthrax threat, and use that to turn the whole world solidly against Saddam. I thought Bush was going to do this on the 9/11 anniversary. There were lots of hints that he would do it in the run-up to the anniversary, if you were watching closely. In the event, it looks more like this was brinkmanship, probably intended to back up the overtures to Saddam to take exile which were already going on. If that's the case, it obviously didn't work. The upside of exposing Saddam is that it would initial stiffen the backbone of our allies and the UN. The downside is that we would still be powerless to retaliate, the economy would go into the tank due to the perpetual threat of a devastating war hanging over our heads, and we would have used up a key bargaining chip in the effort to squeeze Saddam Hussein -- he can only be exposed once.
The last option I can see is the one we are pursuing now. Stall for time. Keep the issues of Iraqi authorship of 9/11 and the anthrax threats unresolved and ambiguous in the public mind. Build a coalition against Saddam. Build our civil defenses so that the bioweapons threat can be at least somewhat blunted. Isolate Saddam. Ramp up the pressure gradually, step by step, over the course of months and years, until his position becomes untenable. Exploit the best card we have -- that we can always expose him, any time we want -- to keep the heat on. Probably the next phase of this is that we will force the issue of pulling out those scientists. We can kill a lot of time doing this, force Saddam to lie and cheat in the eyes of the world even more, and perhaps gain valuable intelligence on what he has up his sleeve for Armageddon. Meanwhile, with the public in the dark about 9/11, Bush looks like the tough guy, and not the helpless victim. The whole strategy leverages Bush's natural enemies -- the UN, the media, the peaceniks, the euro-weenies, etc. -- because they help him stall while making him look alternately like a pragmatist and a tough guy. This is classic Bush political jujitsu, is it not?