I actually thought of doing a TL along these lines, but there were just too many forking paths involved.
What if the Iraqi attempt on Bush's life after he left office had been successful? IOTL Clinton ordered retaliatory missile strikes against the Iraqi Intelligence Service just for even trying it; actually killing Bush is bound to result in something more severe. But by how much?
I figure Clinton's response will be one of three possibilities.
1. Clinton orders heavier attacks, but sticks to bombings and/or missile strikes.
2. Clinton decides that one assassination justifies another (much as a nuclear attack would justify a response in kind), and issues an Executive Order to the CIA to take out Saddam Hussein. IMHO this would be legal despite Gerald Ford's order banning assassinations, since it was done via another Executive Order. Does Iraq fall into chaos like a headless chicken, or can the Baath Party hold it together and put someone else in charge? And if so, does George W. Bush still invade Iraq later on, should he become POTUS?
3. Clinton goes the same route George W. Bush went IOTL and goes for a full-fledged invasion, followed by installation of a regime more friendly to America. Is Clinton likely to go this far? Does Iraq become just as much of a quagmire for Clinton as for GWB? Does Clinton take a horrible amount of heat for getting the US involved in this when he avoided Vietnam? (He did for sending troops elsewhere IOTL but got through it all right; ITTL he will be totally savaged over it, I think.) And how badly does this affect Clinton's sending forces into the Balkans, if he still feels a need to?
In any event, I figure the Republican Party will be in favor of severe measures (either #2 or #3) if Clinton goes for them. It was a GOP President that was killed. In the case of an invasion, when things go downhill, the GOP will turn against the war, and (irony!) be called flip-floppers for first backing the Iraq war then changing sides. Bob Dole might be the only Congressional possibility the GOP can put forth in 1996 to run against Clinton due to his war hero status. Others from Capitol Hill will have the flip-flop issue, but governors could have a shot.
GWB in 2000 (or 2004, if Dole wins) will be seen as harder to beat than OTL. I expect GWB would have a huge sympathy boost in memory of his father. Al Gore might not decide to run against him at all, preferring to wait until he can win so he isn't tainted as a loser. Who do the Democrats put up as a sacrificial lamb? For some reason I keep thinking Bruce Babbitt.
Finally, all this mess is pre-911. So what happens there? Does bin Laden still try some sort of monumental attack? Has al-Qaeda been able to make recruiting inroads among the population of Iraq? Thoughts?