UNITED NATIONS — Iraq’s return from the isolation into which it was cast by Saddam Hussein will be ended with less of a bang than a whimper here, as Vice President Biden chaired the proceedings but Kuwait held out out for a substantial payday.

The emirate of Kuwait blocked the American-led attempt to readmit Iraq, a budding democracy, into “the international fold” by ending restrictions imposed here during the last two decades as punishment for Saddam Hussein’s transgressions.

The Kuwaiti holdout was the only blemish on a day when, under the chairmanship of Vice President Biden and with as much pomp as possible, the United Nations Security Council posthumously endorsed Saddam’s removal from power. The council did so by lifting most of the punishment it had imposed on the Saddam regime in the lead-up to the 2003 Iraq war in several resolutions under Chapter 7, which allows nations to enforce the council’s will.

As one diplomat put it, the council in effect officially closed the book on President Bush 43’s war to liberate Iraq, but failed to end the 1991 war that his father, President Bush 41, led to liberate Kuwait.

Several diplomats here tell me Kuwait was hoping that the next government in Baghdad will give it an advance payment – as high as $20 billion –in exchange for agreeing to lift the outstanding Security Council Chapter 7 resolutions, which were imposed in the aftermath of Saddam’s 1990 invasion that led up to the first Gulf War.

Under the existing resolutions, Iraq pays 5% of its oil proceeds to Kuwait; it must clearly mark the border between the two countries and vow not to cross it; and it is required to locate and return persons and archives that have disappeared during the invasion and the consequent 1991 war.

Diplomats say that the two countries are negotiating how to lower Iraq’s payment to 2% of the oil proceeds. Kuwait also insists that the those missing in action and lost archives be returned, although most observers agree that they are unlikely ever to be found. The border issue has more to do with Kuwait’s past fears of Saddam than with its concerns about the future rulers of Baghdad.

Iraq’s foreign minister, Hoshyar Zebari, denied that Kuwait was demanding an advance payment. “Not true,” he told me. But several diplomats who spoke on condition of anonymity say they believe that Kuwait would only agree to end the outstanding disputes in exchange for Iraqi cash.

Mr. Zebari acknowledged that although the “technical issues” between the countries have mostly been resolved, the dispute with Kuwait remains. It is a “top challenge” for the government that Prime Minister-elect Malaki intends to present soon, Mr. Zebari told reporters here. “We need to address these issues promptly after the formation of the government,” he said.

Meanwhile the Security Council approved three American-backed resolutions, lifting a ban on Iraqi arms and approving its right to develop nuclear technology for civilian use; terminating United Nations supervision of the country’s economy; and officially closing the Oil for Food program.

France reverted to its role as spoiler by abstaining on the resolution that ended the troubled U.N.-based Oil for Food program. Several French officials and companies were implicated by an independent committee of inquiry into the program led by the former chairman of the Federal Bank, Paul Volcker.

Mr. Biden, who joked that his frequent Iraq visits along the years entitle him to citizenship there, told the council that “as a founding member of the United Nations, Iraq seeks and deserves the opportunity to resume its rightful role in the community of nations.” Although Mr. Biden ignored the role the previous administration played in overthrowing Saddam, he acknowledged in his speech that he believed that Iraq’s “best days are ahead.”

For now, however, Mr. Biden and other council members merely welcomed Iraq’s “return to the international fold,” as Britain’s undersecretary of foreign affairs, Alistair Burt, defined it.

“Today we close a dark chapter,” Mr. Zebari said, adding however that the dispute with “our brotherly neighbor Kuwait” leaves Iraq under chapter 7 and therefore denies it a membership in good standing at Turtle Bay.