Palestine State Talks Have Serious Implications For The World's Biggest Energy Spot.

*** Arab Defence Specialists Tell BBC Iran's Strategic Depth Has Never Been As Vulnerable To Concentrated Attack As Many Had Thought, Because Tehran Has Been More Convinced Than In 2004 That The US Is Far Too Bogged Down In Iraq To Take The Risk Of Hitting Tehran's Nuclear Sites

*** Yet They Say The Chances Of Such An Attack Before Bush Leaves The White House Are Getting Slimmer By The Day

*** US Containment, With Additional UNSC Sanctions, Would Cause Iran's Economy To Be In A Mess; Its Oil Output Capacity Falling 500,000 B/D/Y, For Example; But Rafsanjani Wants To Reverse The Drift In Tehran

BEIRUT - An international meeting to feature a proposed interim statehood for the Palestinians, announced on July 16 by US President George W. Bush, is tentatively set for September in New York. If all goes well, a big IF, a more substantive session will be held in December. In the meantime, the leaders of Israel and the Palestinian Authority (PA) are preparing their constituencies for the consequences of the new development. The regional implications of this will be serious for the world's biggest energy reservoir, where Sunni states involved in a US-led alliance for the stabilisation of the Middle East are confronting an axis of anti-American players headed by the Shi'ite theocracy of Iran.

These implications will affect the world oil market for years to come. With world demand for energy growing faster than the capacity of producers to meet this requirement, the Middle East will plunge in an expensive Arab-Persian cold war. For the first time, the theocracy of Iran will face Arab military deterrence inspired by the US.

In a significant departure from past Israeli policy, Prime Minister Ehud Olmert on July 29 voiced satisfaction to a new US plan to sell state-of-the-art weaponry to Saudi Arabia and fellow Arab Gulf Co-operation Council (GCC) states, saying Iran was the common enemy. Olmert told a weekly cabinet meeting: "We understand the need of the US to support the moderate Arab states and there is a need for a united front between the US and us regarding Iran".

This "moderate" Arab camp including Egypt and Jordan - "the [GCC] Six+Two" - will have its deterrence system as part of the US Central Command (CentCom) which is in charge of countries from Pakistan to Iraq. Its geo-strategic value is that the Six+Two will be part of US national security and a full-scale US containment of the Iran-led axis, which includes al-Qaeda, Syria, Hizbullah and Hamas.

Outlined to the Saudis on July 31 by visiting US Secretary of State Condoleezza Rice and Defence Secretary Robert Gates, a $20 bn, 10-year military deterrence package for the GCC will include the most advanced anti-missile shield, strategic attack aircraft, improved satellite-guided bombs, hi-tech Awacs and a variety of naval systems.

At the same time, Rice and Gates used their visits to Egypt and Saudi Arabia to press for help over Iraq. Washington wants the 6+2 to stress to Sunni Arabs in Iraq that engaging in violence was "killing your future". Rice and Gates met with 6+2 ministers at Sharm el-Shaikh on July 31 and Iraq was a key topic (see fap2-IraqUSjusticeWorkAug6-07).

The offer to the 6+2, apart from a Palestine state plan, came with a sweetener for Israel - whose defence from the American standpoint is part of the US-led NATO command: a 25% rise in US military aid, from $2.4 bn now to $3 bn per annum for 10 years. Olmert said this was to guarantee continued Israeli military superiority in the Middle East.

President Bush will seek Congressional approval for the additional military aid to both Israel and Egypt, which currently gets $1.3 bn per annum, as well as the proposed deterrence system to the 6+2. In a debate on BBC radio's Arabic service on July 30, Arab defence experts said the geo-strategic implications of this for the Iran-led axis would be devastating.

Before ending her tour, which included visits to Jerusalem and Ramallah on Aug. 1-2, Ms Rice made clear who the allies of the US were in this Arab-Persian cold war and who the enemies were. Without naming each of them, her message of support went straight to those concerned:

Pax Americana's Iraq (Vs those in Iraq who are against it), the 6+2 (Vs the Iran-led axis), Lebanon's March 14 Forces (Vs opposition groups led by the Iran-sponsored Shi'ites of Hizbullah and including Christian leader Gen. Michel Aoun, now seen as a puppet of Syria's 'Alawite/Ba'thist dictatorship), Fatah (Vs Hamas & Islamic Jihad), the "moderate" Islamists including Turkey's ruling AKP (Vs al-Qaeda), and their OECD backers (Vs Russia and any OECD powers still having dialogue with Iran-led axis members).

For their part, however, members of the Iran-led axis are calculating that US support for the opposite camp will only last until Bush's term in office ends. Bush is to leave the White House in January 2009 and members of the Iran-led axis are hoping the Democrats will win the US presidency in the November 2008 elections. Yet experts recall that most major US-led wars since the early 20th century have been started by democratic administrations.

Rice and Gates are advocates of Iran's "containment", rather than war, in contrast to US Vice-President Dick Cheney who argues that military strikes against Iran will be needed. Rice and Gates hope the pressure can force Tehran to the negotiating table.