Since the prevention of the invasion of Kuwait hinges upon Saddam's "state of mind", this is a lot murkier than the idea that had the USA made it clear it would fight over South Korea Stalin most likely would not have given the first Kim the green light to invade. While Saddam was a murderous bastard, he was not the true psychopath like his son Qusay was. His bluster about the "mother of all battles" was just that, and he probably knew it but it was pretty much the only card he had to play by that point. IMHO if he was convinced the USA would intervene and come down hard, he probably would not have invaded - but you certainly can't be sure about that. That statement from the ambassador, a direct warning from Bush, and possibly reinforcing air assets in Saudi and putting a Marine Amphibious Group floating off Kuwait, and a carrier in the Gulf (all doable) would convince Saddam that Bush was not kidding.
Of course no Gulf War I (at least at that time) unleashes huge butterflies.