1710 is the official date on which the state of Kuwait became recognised. At the time, it was still under the Ottoman Empire, making borders incredibly subjective. Indeed, Middle Eastern borders were still subjective well into the latter half (or even quarter) of the 20th Century. When the British eventually let their Arabian Gulf Emirates claim independence as the United Arab Emirates in 1971, a man spent months riding around the desert on a camel, asking every Bedouin tribe he came across which Emir they swore allegiance to. This is how the UAE borders were drawn up, and it's how Dubai comes to claim its mountain enclave of Hatta.
Surprisingly, given recent events, it would seem that the British had finally learned something from history by 1971. The border between Iraq and Kuwait had been arbitrarily drawn in 1923, based on the notion that "nobody lives there anyway". Post Sykes-Picot and World War I British goals for the area were not particularly concerned with such trivialities as borders between the Mandate states and how this would affect their future under the self-determination they had promised these states. Britain was far more concerned with the oil in Iran, the likelihood of oil in Iraq and Kuwait, and how to get it all back to Britain.
There are two practical ways of transporting oil: by land and by sea. There is a practical limit on the distance one can pump oil by pipe, so when you're talking distances of the scale of the Shatt al Arab to the United Kingdom, you need a port and maybe a railway (which is presumably quicker). At the time when the 1921 Paris Peace Conference was divvying out the Mandates, Britain had aspirations of a nifty little railroad from Europe, across Turkey, down through Iraq to Kuwait. It may not have been used to ship oil out explicitly, but it sure would be easier to ship in all the supplies and things required for supporting an oil industry.
I guess it is a small blessing that the British map drawers bothered to give Iraq a seaside port. The Iranians were none too impressed, claiming Basra as their own, but they had bigger fish to fry with the Shatt al Arab so they let the Basra issue go. Another overriding issue with the arbitrary Ottoman and now Mandatory borders was that of the Kurds: a group of people, persecuted through the ages, who formed a majority in a geographic area that was divided in three between Iran, Iraq and Turkey, leaving the Kurds a vulnerable minority in each country.
As if ethnic and strategic blunders (or possibly in the case of strategic, brief moments of inspiration) were not enough, the borders also led to economic and ideological dislocations. Western influence in the Middle East was never a recipe for success, and as they gear up to repeat their sorties of 90 years ago, it is hard to see how present leaders are learning from past mistakes. Certainly they are not yet acknowledging their role in forming the current situation that they find so distasteful.
Staking a Claim
Kuwait is by no means a large country, but its coastline is twice as long as Iraq's. The central feature to the Kuwaiti coastline is Kuwait Bay, a natural port. The Bubiyan and Failaka Islands just offshore form protected channels ideal for further port development.
The first Iraqi to stake a claim on Kuwait was King Ghazi, Faisal's son. Ghazi had had a western education and was not well disposed to be a Middle Eastern ruler. He shared his father's Nationalist views, however, which kept his crown safe. In 1938, Ghazi announced on Qasr al Zohour radio that he was looking forward to the day when Syria, Palestine and Kuwait were united with Iraq. His uncle must have been pleased that he left out neighboring state Jordan, which the British had created, to the discomfort of the Zionists, expressly to give Faisal's brother a kingdom. Ghazi put his army where his mouth was and amassed troops on the Kuwaiti border. Unfortunately, he was as reckless a driver as he was a politician, and before he marched them across, he drove his car into a lamppost.
Iraq had more than enough social problems to concern itself for the next few decades. There were eight coups under Ghazi's reign, and they didn't stop when his toddler son Faisal II took over the crown. Amir Abd al llah was installed as Regent, with Nuri as Said, an anglophile, as his right hand man. Kuwait was still under British administration, and with those two ruling the roost, its status was protected.
The next Iraqi claim to Kuwait came in 1961, when Kuwait was granted its independence. Abdul-Karim Qassem, one of the more successful coup leaders (he kept power for 4 years), immediately claimed sovereignty over Kuwait. The British responded by sending a brigade to Kuwait, and Qassem backed down.
Qassem may have been relatively successful within Iraq's borders, but outside of them he was alienating countries thick and fast. A centrist in outlook, he was friendly to the communism movement growing in Iraq. His opposition to joining the Egyptian-Syrian union did little to heal the wounds in Iraqi-Arab politics after Iraq's failure to back up her Arab brothers in their 1956 war with Israel. Qassem was assassinated by the Ba'ath coup in 1963 and in October of that year, Iraq recognised Kuwait's sovereignty and borders.
The Ba'ath Party didn't stay in power long the first time, so their bandaids on Arab relations didn't last. In 1967, the Arif government in Iraq didn't come to the Arab world's aid in the Suez war. Relations with Syria had been bad for a year already. A 1955 agreement saw northern Iraqi oil pumped north through Syria to her Mediterranean ports. In 1966, the powers in Damascus claimed that the western-owned Iraqi Petroleum Company (IPC) had been underpaying, and cut the pipelines. Arif appointed Tahir Yahya as Prime Minister. He faced an unenviable task, and his only success was in lessening Iraq's dependence on taxes from the IPC, by turning over exploitation rights in the Iraqi section of the Rumailah Oilfield to the state-controlled INOC. The Rumailah Oilfield, as you may recall, is bisected by the Kuwaiti border.
Arif was no longer popular, so in recent Iraqi tradition, he was ousted by another coup. It was again the turn of the Ba'ath Party, and this time (1968) they were there to stay. In 1972, they nationalised the oil business. They generally set about improving the lot of poor Iraqis (which would consolidate their power base) and improving relations with the Arab world (which would prevent outside influence in organising opposition, such as the Nasser-inspired coups of the 50's and 60's).
All was not rosy, however, and Iraq remained at odds with the Gulf states over the Kuwaiti islands of Bubiyan and Warbah, that lie in the estuary leading to the Iraqi port of Umm Qasr. Basra is too shallow, and Iraq had aspirations of developing Umm Qasr as a deep water port. To aid this, the Iraqis demanded that the two islands be transferred or leased to Iraq. These were the early 70's, around the time that the oil price was near its apex, so Kuwait not surprisingly refused. In 1973, Iraqi troops moved into As Samitah, a north eastern border post. Saudi Arabia leapt to Kuwait's aid and with the backing of the Arab League, (diplomatically) booted Iraq out.
In 1975, (now) Hussein's government ceded the Shatt al Arab to Iran, though apparently under duress. In 1979 when the Shah of Iran was overthrown, Iraq claimed it straight back. There was more at play in initiating the conflict, but the relevance here is that Iraqi interests in Kuwait were sidelined in the 1980's because of the Iran-Iraq War.
After the ceasefire in the Iran-Iraq War, Hussein's government set about rebuilding the country. The oil price was at rock-bottom (especially compared to its meteoric heights of the early 70's) and Hussein accused the Gulf states of waging economic war on Iraq by flooding the international oil market. The Kuwaitis had been using American equipment to slant-drill over the border of the Ramailah Oilfield, which didn't add to their popularity with the Iraqi government. The final straw was when the Americans pushed Kuwait and Saudi Arabia to demand immediate repayment of the loans they had made to Iraq during the previous decade.
Hussein demanded that Iraq's debt repayments should be waived, given the Kuwaitis indiscretions with the Rumailah oilfield. In July 1990 they began negotiations, but they ended unsatisfactorily: Hussein accusing Kuwait of conspiring to destroy the Iraq economy and mobilising troops on the Kuwaiti border. What set Hussain apart from all the previous Iraqi leaders who had gone this far was that he was a desperate man: his country was crippled by the cost of a seemingly pointless war and all avenues for recovery appeared blocked. Desperate times call for desperate measures.
On August 2, 1990, Iraq invaded Kuwait. The following day, the United Nations passed a resolution condemning Iraq and three days later another implementing sanctions. Iraq was importing 70% of its food, was bankrupt, and it's hard to see how sanctions would help. Saudi Arabia were taking a while to come to the party (because they had no beef with Iraq), so on August 7, 1990, despite no satellite evidence*, the Americans told the Saudis that Iraq had troops stationed on their borders. Saudi Arabia has a lot of oil and a lot of money, but no army to speak of. They happily accepted in the US troops. The next day, Iraq announced that it was annexing Kuwait.
On August 12, 1990, in the face of Arab outrage and trying to get a few people on his side, Hussain proposed that Iraqi withdrawal from Kuwait be done in parallel with Israeli withdrawal from the occupied territories. It was a thin ruse and it didn't work. On September 2, 1990, Iraq began rationing food.
On November 8, 1990, with the situation at stale-mate, the US upped the ante by doubling the number of troops in the region to 400,000. At the end of the month, the UN authorised the use of force if Iraq had not pulled out by January 15, 1991. With much of the nation now starving, infant mortality rates in Iraq had doubled. Hussein was stuck between a rock and a hard place so he didn't move.
On January 17, 1991, the predominantly-US coalition launched an air assault on Iraqi forces, which lasted 42 days. Describing the Gulf War is really beyond the intention of this writeup, so I'll conclude it here by saying that the war ended in a cease-fire on February 28, 1991. Sanctions continued in Iraq - and continue today.
* sid says Not only did the adminstration lie to Saudi Arabia about Iraqi troops massing on the border during Gulf War I, but they actually doctored satellite photos to show them, thus ensuring cooperation. The ruse was discovered later when a reporter purchased satellite photos from a different source. Also of interest concerning the invasion: April Glaspie.