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The Gulf War was definitely an influence and for pretty much the reasons you laid out. The Yugoslav Wars were also going on through the run of the series, and the Lebanese Civil War had just (mostly) ended, and the messiness of those conflicts, with their shifting ethnic and sectarian alliances and clashes, influenced us as well.
Overall, I think these events influenced DS9 to be a bit muddier than other Star Trek shows. The elegant, hopeful, but perhaps overly simplistic, “See a problem, solve a problem, warp away” storytelling of much of TOS and TNG seemed a bit less “true” given the times. We tried to bring in less certainty, more shades of gray, while still telling stories about good people trying to make the universe a better place.
Part of what makes Dukat such a compelling character is his core belief in his own superiority and that he is the main character of the universe. This is accomplished through writing but also because Marc Alaimo really, really believed in Dukat as a character. He never plays him with a hint of self doubt. If he experiences opposition to this self image Alaimo plays him as deeply embarrassed, angry or even mentally compromised – all signs of someone who’s self hinges completely on this image of himself he has constructed. To the point that any real opposition, like the realisation the universe doesn’t revolve around you, crushes him if he can’t reconstruct it to fit his own narrative.
Alaimo wanted redemption for Dukat and a romance with Kira. I’m very glad that didn’t happen. But the fact that Alaimo never accepted Dukat as fundamentally bad is part of why Dukat works. Dukat can’t be redeemed. Not because he doesn’t have the opportunity. But because he is fueled by greed and lust for power and that’s always behind the choices he makes.
So he needs to be played without self doubt. Without a trace of any remorse. Another actor might have been tempted to play Dukat with cracks in the armor of his bravado where he shows remorse or realisation. Because we want to believe villains have complex feelings about their behavior, right? That deep inside, they doubt? But Dukat always carries this unfaltering belief in himself. He doesn’t feel sorry. He doesn’t regret anything. In fact, he revels in his crime. In his oppression of the Bajoran people.
It really is interesting how Alaimo having a different view of the character is such a big part of what makes him a good villain.