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To: upanddown who wrote (24780)6/26/1998 2:30:00 AM
From: 007  Respond to of 95453
 
Intelligence Report; Middle East Update

Global Intelligence Update
June 26, 1998

Middle East Incidents Just Coincidental?

A series of incidents in the Middle East in the last few days suggest that
something is brewing. First, after the United States repeatedly expressed
frustration over Saudi Arabia's announcement that no non-Saudis were
involved in the bombing of the Khobar Towers in Dhahran, and over Riyadh's
refusal to release the results of their investigation, the Saudi's are now
leaking that there were, in fact, unidentified foreigners involved in the
bombing. Agence France Presse on Thursday, June 25, quoted a Saudi Deputy
Foreign Minister as saying the attack on U.S. military housing in Dhahran
was "carried out by Saudis, but some other parties helped them in carrying
out the explosion." This contradicts statements by Saudi Interior Minister
Prince Nayef on May 22, in which he insisted "No foreign party had a role"
in the bombing. Prince Nayef's announcement led to increasingly sour
relations with the United States over the issue, culminating last Sunday
with the report that the FBI had withdrawn its investigators from Saudi
Arabia.

Iran, which the U.S. suspects of involvement in the bombing, had expressed
satisfaction with Prince Nayef's statements. However, reviving the
possibility that non-Saudis were involved in the bombing does not
necessarily mean that Saudi Arabia is turning on Iran. Riyadh shows every
sign of continuing its rapprochement with Tehran, and is reportedly
pressing the United States to pursue improved relations with Iran. There
are other candidates for the role of "foreign participant" in the Khobar
bombing. We could imagine Iraq in particular filling that role, though
there have not yet been implications of this from Riyadh or Washington.

Iraq was at the center of another curious incident this week. According to
Kuwait, during a recent visit to Morocco, Iraqi Vice President Taha Yasin
Ramadan held a press conference in which he said of UN Security Council
(UNSC) Resolution 833, "Legally, it is worthless." Resolution 833 deals
with the demarcation of the Iraqi-Kuwaiti border. In a memorandum
submitted to the Arab League Secretary General and published on June 23 in
the Egyptian newspaper "Al Ahram," Iraq's permanent representative to the
Arab League, Dr. Nabil Najm, vehemently denied the Kuwaiti allegations,
calling them baseless. Najm stated that Ramadan had touched on the border
issue in general, and had noted that it was the first time the UNSC had
passed a resolution on the demarcation of borders between two countries,
but he denied that Ramadan had ever challenged the legality of the
resolution. Najm said that "the Kuwaiti Foreign Minister's
misrepresentation of the statements made by the Vice-President was a
deliberate and suspicious distortion of the facts, aimed at fomenting
incitement and hostility against Iraq."

Kuwait has subsequently delivered a purported recording of Ramadan's news
conference to the current head of the UN Security Council, with a letter
declaring that the tape "proves beyond any doubt" that Ramadan questioned
the UN's demarcation of the Iraqi-Kuwaiti border. In the letter, Kuwait's
Ambassador to the UN, Muhammad Abu al-Hassan, wrote, "I stress once again
the seriousness of this statement, which reveals the hostile intentions of
Iraqi officials towards Kuwait, their contempt of Security Council
resolutions and international legality, and their attempt to circumvent the
relevant Security Council resolutions and shirk the legal commitments
stipulated by these resolutions." After submitting the letter and
recording, Abu al-Hasan told Kuwait's Kuna news agency that the tape
"stands as clear evidence of the nature of this regime which is in the
habit of lying, deceiving and making light of the good intentions of the
Security Council member states." He continued, "What Ramadan says concerns
in fact not only the borders with Kuwait but also all of Iraq's
commitments, and this is a serious matter."

Saudi Arabian Foreign Minister Prince Saud al-Faisal on Tuesday, June 23,
called on Iraq to honor Resolution 833, the principles of the Arab League,
and regional security agreements, to show its good will toward neighboring
states. Speaking at the opening of the eighth meeting of the Saudi-
Egyptian Joint Committee for Bilateral Cooperation, Al-Faisal said
Ramadan's statement on border demarcation "is regrettable, and indicates
Baghdad's continuous policy of deception." Saudi Arabia was joined on
Wednesday by Egypt in again calling on Iraq to respect UNSC Resolution 833.
The two countries' foreign ministers also reiterated their support for
Iraqi independence, sovereignty, and territorial integrity.

Two other diplomatic initiatives of note, which may or may not play into
the incidents mentioned above, also occurred in Saudi Arabia this week.
The Saudi-Egyptian meeting took place as Iranian Foreign Minister Kamal
Kharrazi was in Jeddah (on Tuesday) and Riyadh (on Wednesday), discussing
methods of tackling the oil price crisis with Foreign Minister Prince Saud
Al-Faisal, Crown Prince Abdullah, and Saudi King Fahd. And Syrian Foreign
Minister Farouq al-Shara reportedly flew to Riyadh on Wednesday to discuss
the deadlocked Middle East peace process with his Saudi and Egyptian
counterparts. We note that, in what again may be only a coincidental
event, Egypt's Defense Minister on Sunday joined in the Syrian-Iranian call
for an "Arab NATO." For a more complete analysis of that incident see
stratfor.com.
Finally, we note that this was the week that prospects for UN certification
of Iraqi disarmament took a turn for the worse, when UN inspectors claimed
to have found nerve gas residue on destroyed Iraqi warheads.

The coincidences are stacking up in a way that does not look good for Iraq.
The UN has reversed what looked like rapid progress toward freeing Iraq
from sanctions. Kuwait has presented evidence of an alleged Iraqi
challenge to the UN's demarcation of the Iraqi-Kuwaiti border. Saudi
Arabia and Egypt have joined in condemnation of Iraqi belligerence. Egypt
has added its support to a Syrian-Iranian initiative aimed at dealing with
regional crises, including the situation in Iraq, without US or other
extra-regional involvement. Syria suddenly joined in Egyptian-Saudi talks
on regional crises. And Saudi Arabia, while maintaining downright amiable
relations with Iran and discussing Iranian alternative plans to address the
oil price crisis, has revived the idea that some foreign party was involved
in the Khobar Towers bombing. Oh, and finally note that Kuwait entered the
OPEC talks stating that the markets needed "a shock" before they would
recover, regardless of efforts to cut oil production. He was evidently
correct, as the markets responded with what amounted to a collective yawn
to the announcement of the latest round of production cuts.

These may be coincidences one and all, but if we lived in Baghdad, we'd be
stocking up on canned food.



To: upanddown who wrote (24780)6/26/1998 6:58:00 AM
From: P.Prazeres  Read Replies (1) | Respond to of 95453
 
crude up 0.09 cents in access trading to 14.12 as of 6:30 am est.
It had been as low as 13.86 and as high as 14.13 overnight.

Paulo

PS. It is going to be pretty hot and humid in the Northeast today. So much for the 70's weather that we were enjoying.