Bush Has Arab Support To Target Saddam, But 'Smart' Sanctions Signal Climbdown.

*** The Palstinians Are Determined Not To Allow Ariel Sharon To Impose Any Sort Of 'Stability' In The Occupied Areas So As To Hasten His Ouster From The Political Scene In Baghdad

*** Iraq Says It Will Not Allow UN Inspectors Into The Country Even If They Arrange For Sanctions To Be Lifted - While Secretary Of State Powell Aims To Convince Europe To Back The Idea Of 'Streamlined' Sanctions - But Not Even All Republicans Fully Back This Idea

NICOSIA - Moderate Arab leaders and intellectuals across the region consulted by APS agree that the four-day Middle East tour of US Secretary of State Colin Powell, from Feb. 24, confirmed that Washington has broad support from the Arab side to focus sanctions on the regime of Saddam Hussein. No one among the moderate rulers want to follow the Iraqi leader's lead in the Middle East after having invested so much of their prestige and legitimacy in the Arab-Israeli peace process. But the sources also say that these leaders are worried about the implications of Arab public opinion which is opposed to sanctions punishing the Iraqi people at a time when the right-wing in Israel is taking a hard line.

This is one of the reasons why, after the combined air raids against Baghdad by the US and Britain on Feb. 16 got worldwide criticism, the Bush administration quickly moved to suggest that the sanctions would be refined and "reshaped" to specifically target the regime of Saddam Hussein, centred around the Takriti elite. They are deeply worried that, if the current impasse continues in the peace process on the one hand and Saddam remains defiant on the other, the camp opposed to the peace process on the Arab side will get stronger.

Yet, the sources say that, any adjustment in the sanctions framework would have to take into account the way in which things have changed since the Republicans were last in power in the US, in the early 1990s. The sanctions against the Baathist regime are already the tightest known in modern history. Little goes into or out of Iraq without the US intelligence community being aware of it. But Iraq still manages to smuggle out more than 100,000 b/d of oil for which Saddam gets 100% of the revenues, with one of the export routes being the Turkish border. Washington has turned a blind eye to this because of the costs incurred by Turkey by ending its trade with Iraq, while Ankara has maximised its benefits by making the Incirlik Air Base available for US air raids into Iraq.

Baghdad is also exporting 100,000-150,000 b/d to Syria and it is giving Jordan oil sanctioned by the UN. So about 300,000 b/d of oil is sold outside UN financial control. In addition, UN monitored exports are averaging 250,000 b/d of which Saddam gets a third. This means the Iraqi leader is getting some $4 billion/year in oil revenues, according to some sources, while British officials have suggested no more than $1.5 billion per year comes under his direct control. By contrast, they said, over $24 bn of Iraqi oil revenues are under UN supervision.

During Powell's tour - with stopovers in Israel, Egypt, Syria, Jordan and Kuwait - Arab leaders cautioned that American rigidity on the sanctions issue has given Baghdad a propaganda tool against Washington, both within Iraq and in the Arab World as a whole.

Powell and other media savvy administration officials are well aware of this. Hence the shift of emphasis towards "smart" sanctions and focusing them on the Iraqi leadership. According to the sources, the question is how this can be achieved given that all the sanctions that can be applied against Saddam and his Takriti clique have already been imposed for years. Iraqi Foreign Minister Mohammed Said Al Sahaf said on Feb. 27: "We met the requirements and sanctions are still there... (Now) we are hearing stupid statements from (Powell) talking about clever sanctions, as if he confessed that all what had been going on since 1990 is stupid". Moreover, there is a split within the Bush administration about the extent of support to be provided to the Iraqi National Congress, the main opposition group, as part of "smart" sanctions (see last week's Recorder).

There is skepticism about the American approach, and some observers suggest that the "reshaping" of sanctions is just "wordplay" aimed at getting Washington out of the tight spot it had gotten itself into by taking the maximalist position on sanctions. The consequence of the maximalist position has been that the US has had no real escalatory option since Saddam refused to let UN inspectors into the country in December 1998. Since then, the only real option available to get the inspectors back in was to send in ground troops, something which the US was not willing to do.

Thus some see the emphasis on "targeting" sanctions directly at the regime as being, in fact, a climbdown on the embargo issue by the US. The sources say that such an interpretation may be simplistic, hinting that a "carrot and stick" policy may be on the cards. On Feb. 27, Powell suggested that the US was seriously considering the lifting of all non-military sanctions against Iraq, pointing out: "I have every reason to believe we are able to keep the box as tightly closed as we have the last 10 years, without receiving the baggage that goes with it".

Powell acknowledged that during his trip to the Middle East he had realised that support for the current sanctions regime had been greatly reduced. Yet he secured pledges from Syria that it would not breach the sanctions against the Iraqi leadership. On Feb. 26, Powell told reporters he was assured "three times" by Syrian President Bashar Al Assad that Damascus would only import Iraqi oil under the UN oil-for-food program. There was a "solemn agreement" on that, Powell said, although at the time there was no confirmation from the Syrian government about an accord.

Powell also said the Bush administration hoped to have its new sanctions policy ready before the proposed Arab League summit in Amman on March 27. The implication is clear, as the summit is likely to discuss the negative implications of Ariel Sharon's victory in Israel as well as the impact that would have on stability in the Arab countries allied to the US. The moderate Arab view is that the sanctions have outlived their usefulness in terms of containing Saddam - who no longer seems affected by them - and have instead become propaganda tool he can wield against Saudi Arabia, Kuwait and other allies of the US. He is also associating the plight of Iraqis with that of the Palestinians, with his rhetoric suggesting that a common enemy - i.e. the US and Israel - is orchestrating the tragedy affecting both peoples.

The Palestinians are the ones who are most affected by the turn of events in the Middle East. With Sharon taking over in Israel, and Bush showing no interest in taking a hands-on role in the peace process, unlike Clinton, Palestinian President Yasser Arafat is now facing a serious financial crisis (see last week's Recorder). Not much help is coming from the Arabs, despite their criticism of Israel. The exception is Saddam, now the main source of funding for "Intifada 2000". If the US keeps its hands off and leaves the Israelis and Palestinians to sort things out themselves, this may mean the latter would have no option but to resort to violence to get American attention. Violence would, in turn, benefit Saddam who is portraying himself as the only Arab leader now capable of standing up to the US and Israel.

In the meantime, the UN has been sidelined from both the peace process and the sanctions question. The US does not consider it to be of much value other than as an instrument through which to implement its policies. Baghdad for its part has been firm in rejecting the UN as an institution with little credibility left. Nevertheless, Secretary General Kofi Annan keeps trying to mediate between the two sides to arrive at some arrangement to break the impasse on inspections. On March 1, after a first round of talks with Iraqi Foreign Minister Al Sahaf, he said the next round would be held on April 9-13 or early May.