[casi] News, 29/6-6/7/02 (3)

[Peter Brooke <pbrooke@DELETETHISukonline.co.uk>]

News, 29/6-6/7/02 (3)

OIL

*  GCC states take $20b oil price hit
*  BAGHDAD: Iraq ups West Qorna output
*  Iraq to drill wildcats

IRAQI OPPOSITION

*  Iraq rebels oppose U.S strike to topple govt-paper
*  Iraqi exiles dream of toppling Hussein

IRAQIS OUTSIDE IRAQ

*  Activists accused of 'dumping' asylum-seekers in the desert
*  Officials: Saddam's stepson admits mistake over US visa

POLICING THE BLOCKADE

*  U.S. Bombs Iraqi Defense System

PROSPECTS FOR WAR

*  US has plan to kill Saddam, says Iraqi opposition leader
*  Time to deploy a large American military force
*  Failure of other efforts led U.S. to plan war on Saddam

IRAQI/UN RELATIONS

*  UN: United Nations Compensation Commission approves awards of USD4.9Bn
for compensation
*  UN deal leaves Iraq's Kurds at mercy of Baghdad
*  Iraq, UN fail to agree on arms inspections


OIL

http://www.gulf-news.com/Articles/news.asp?ArticleID=56113

*  GCC STATES TAKE $20B OIL PRICE HIT
by Nadim Kawach
Gulf News, 30th June

A decline in oil prices and production cost the six GCC countries more than
$20 billion last year to depress their gross oil export earnings to around
$106.3 billion and turn a budget surplus into a deficit in some members,
according to a UN estimate.

The UAE and the other five members, Saudi Arabia, Bahrain, Kuwait, Qatar and
Oman, earned nearly $129 billion in 2000 when crude prices climbed to an
average $27, one of their highest levels since the end of the oil boom in
early 1980s.

This means their revenues shrank by nearly $22.7 billion in 2001 as a result
of a 16.2 per cent decline in average crude prices and output cuts in line
with a collective agreement between Opec and other producers to prevent a
price collapse.

According to the UN's Economic and Social Commission for West Asia (ESCWA),
Saudi Arabia was the main victim of last year's loss given its huge supplies
which accounted for more than half the GCC's total oil supplies of 14
million barrels per day.

>From around $75 billion in 2000, Saudi Arabia's earnings slumped by nearly
20 per cent to $59.4 billion in 2001, while the UAE lost around $four
billion to $18 billion.

Kuwait's oil revenues contracted by $three billion to $13.2 billion while
the crude export income of the other member states also recorded declines.

"The performance of the oil sector in the GCC and other ESCWA members was
not strong as it was in 2000. Prices slipped by around 16.2 per cent, while
overall production dropped by nearly 600,000 bpd to 18 million bpd," the
report said.

It said the bulk of production cuts were recorded in Saudi Arabia and the
UAE, whose actual supplies were down by 2.2 and 1.6 per cent, respectively.
Kuwait and Qatar boosted their output by nearly 2.9 and 5.1 per cent in
2001.

"The decline in the oil revenues had a stronger impact on the economies of
the GCC countries given their heavy reliance on oil exports," said ESCWA,
which groups the GCC with Yemen, Lebanon, Jordan Syria, Iran, Iraq and other
Middle Eastern countries.

"Their budgets and current account were also hit, for example, Saudi Arabia
and Bahrain recorded a large surplus in 2000, but it turned into an actual
deficit of around 1.6 and 4.1 per cent of the gross domestic product in
2001.

As for the UAE, it recorded a slight shortfall in 2000 but it was bigger in
2001 because of high spending and lower income."

The report gave no forecasts for this year but the London-based Centre for
Global Energy Studies, which is owned by former Saudi Oil Minister Ahmed
Zaki Al Yamani, expects the GCC's revenues to extend a downward trend
because of additional supply reductions and a projected fall in prices to
around $22 from $23.5.

The Centre's latest outlook for the GCC's combined oil sales is around $90
billion this year, nearly $16 billion below 2001.                
 

http://www.worldoil.com/news/newsstory.asp?ref=http://62.172.78.184/feeds/wo
rldoil/new/article_e.asp?energy24=252103

*  BAGHDAD: IRAQ UPS WEST QORNA OUTPUT
World Oil (from AFP), 2nd July

Iraq has increased oil production at the West Qorna fields in the south of
the country to 140,000 barrels per day (bpd), and may increase it further,
weekly newspaper al Rafidain reported, citing a state oil company official.

Abdel Bari Mahmoud Chawket, chairman of the Southern Petrol Company, said
the company "has succeeded in raising production in the West Qorna fields by
40,000 barrels per day to 140,000," adding that this "could be progressively
increased."

At the end of May, oil minister Amer Mohammad Rachid said Iraq had started
to develop two oil fields in the south of the country, "by our own means and
without any assistance from foreign companies."


http://www.worldoil.com/news/newsstory.asp?ref=http://62.172.78.184/feeds/wo
rldoil/new/article_e.asp?energy24=252101

*  IRAQ TO DRILL WILDCATS
World Oil, 2nd July

According to local reports, Iraq is planning to dig up to 20 exploratory oil
wells in a bid to boost its reserves.

Rafid Abdulhalim, Oil Ministry official and chairman of Oil Exploration
Company, told state-owned weekly newspaper. Al-Ittihad that the wells will
be dug up to a depth of more than 600 meters in 2003 in areas still not
fully explored.

The digging will be the first by the ministry since the United Nations
imposed sweeping trade sanctions on Iraq for its 1990 invasion of Kuwait.

The ministry claims Iraq sits on some 280 billion of probable reserves,
mostly in the little explored desert west of Baghdad.


IRAQI OPPOSITION

http://www.cnn.com/2002/WORLD/meast/06/29/iraq.opposition.reut/index.html

*  IRAQ REBELS OPPOSE U.S STRIKE TO TOPPLE GOVT-PAPER
CNN, 29th June

CAIRO, June 29 (Reuters) -- A major Iraqi opposition organization said in
remarks published on Saturday that Washington should seek to oust President
Saddam Hussein through U.N. resolutions and not by military force.

Speculation has been mounting that Washington might be preparing an invasion
of Iraq to oust President Saddam Hussein, whom it accuses of developing
chemical, biological and nuclear weapons.

In an interview with al-Hayat pan-Arab newspaper, Mohammad Baqer al-Hakim,
head of the Supreme Council for the Islamic Revolution in Iraq, (SCIRI),
said he was concerned a possible U.S. attack on Iraq might result in the
occupation of the Arab country.

SCIRI is Iraq's largest Shi'ite Muslim dissident organization and claims to
have up to 8,000 fighters operating inside Iraq. It has vowed to topple
Saddam's Sunni Muslim dominated government.

"We are living a state of great worry...from the probability of an attack
that would reach many of our people's sons and Iraq's basic infrastructure,
as it would also lead to an invasion operation and occupation of Iraq,"
Hakim said.

Hakim, a senior Shi'ite cleric, has lived in Iran with many of his fighters
since the 1980-88 Iran-Iraq war. He also has followers among the 500,000
Iraqi refugees living in the Islamic republic.

"We think the United States could only assist the Iraqi people by protecting
them from operations of oppression practiced by the regime. When it (United
States) puts pressure on it (the Iraqi authorities) to stop oppressive
operations, then the Iraqi people could undertake an operation of change,"
Hakim added.

His comments in al-Hayat seemed to indicate a shift in position from earlier
remarks, which welcomed a U.S. military offensive to topple Saddam's rule.

Hakim told al-Hayat that the best alternative to Saddam Hussein would be a
parliamentary government that represented all Iraqi factions equally.

In December, Hakim told Reuters in an interview that SCIRI and other
opponents of the Baghdad regime, including Iraqi Kurds, had agreed on
forming a broad-based transitional government for one year. After that a
government should be formed through a national referendum.

Hakim also stated in the December interview that his organization would
welcome attacks to topple Saddam as part of Washington's declared war on
terrorism, as long as it did not threaten Iraqi independence.

Many Arabs, already critical of Washington over its support for Israel in
the Middle East crisis, have voiced opposition to any U.S. strikes on Iraq.

The U.S. State Department said in early June that it planned to have a
conference of Iraqi opposition groups during the summer and was organizing
preparatory meetings. U.S. officials say the aim would be to talk about what
Iraq should look like after the departure of Iraqi President Saddam Hussein.

U.S. President George W. Bush, who accuses Iraq of being a part of an "axis
of evil" together with North Korea and Iran, has openly declared his desire
to remove Saddam by military force if necessary, but has offered few details
of how he plans to accomplish that.


http://www.baltimoresun.com/news/nationworld/bal
te.iraqis04jul04.story?coll=bal%2Dnews%2Dnation

*  IRAQI EXILES DREAM OF TOPPLING HUSSEIN
by Tom Bowman
Baltimore Sun, 4th July

WASHINGTON - When Thair Nakib's thoughts turn to Iraq, he sees his family's
three-story stone house, shaded by palms on a Baghdad side street, his room
brimming with boyhood swimming trophies and medals.

And there was his grandfather's farm, about an hour from the city, where he
and friends would spend summer days fishing in the river, riding horses or
picking apples and peaches.

That was more than 30 years ago, before his father, an army general,
defected, just before a little-known general named Saddam Hussein seized
power.

"Saddam confiscated the house and farm," recalled Nakib, who for the past
two years has lived in an apartment in Cockeysville with his wife and two
children. "We left everything behind."

Nakib is now the Washington representative of the newest Iraqi opposition
group, the Iraqi National Movement, a collection of exiles - about 40 former
Sunni Muslim military officers and political leaders - that was formed last
year in a break with an opposition umbrella group.

Eager to aid the Bush administration's effort to topple Hussein's regime,
Nakib heads south on Interstate 95 four to five days a week to meet with
State Department officials, congressional staffers and other opposition
leaders. In coming weeks, the Iraqi National Movement will receive $315,000
in federal money to travel, visit fellow opposition figures and maintain a
base in Damascus, Syria.

Like others in the fractious Iraqi opposition, Nakib, 42, is heartened by
the flurry of meetings with Bush administration officials and by plans for a
conference in Europe this summer, organized by either the opposition or the
State Department.

"Some of the opposition groups say it would be better if they do it, so
we're talking about it," a senior Bush administration official said. "The
opposition folks feel that if the U.S. sponsored it, with U.S. money, it
makes them look like stooges and puppets."

"They're laying the groundwork" for the overthrow of Hussein, said Falah
Nakib, Thair's 45-year-old brother. Falah Nakib lives in Damascus with their
father, Hassan Nakib, a former Iraqi army deputy chief of staff, who in 1992
co-founded the opposition umbrella group, the Iraqi National Congress.

"The message we're getting" about a U.S.-led invasion, Thair Nakib said, "is
end of the year or next," after the U.S. elections.

"The State Department is saying, 'We don't want to speak too loudly and give
high expectations. Let us prepare ourselves, and then we'll send the
message'" to the Iraqi people.

Thair Nakib, who followed two sisters to the Baltimore area, recently left a
management job at a health care company that brought doctors from the United
Arab Emirates to train at Johns Hopkins Hospital. He now devotes his
energies full time to Iraqi opposition work.

Wearing casual clothes and chain-smoking as they relax in Georgetown Park, a
boutique mall on M Street, the Nakib brothers could pass for well-fed
international businessmen. Chatting in heavily accented English, they are
the educated children of privilege, who count two physicians and an
architect among their five siblings.

The children followed their father on military and diplomatic postings from
Egypt to Jordan, from Spain to Sweden.

Neither brother has military experience. Thair Nakib wonders how many
friends died in the war with Iran in the 1980s.

"Saddam took all my generation to the Iran-Iraq war," he said.

Though they have been working with anti-Hussein groups since the end of the
Persian Gulf war, Thair and his brother now do much of the legwork for their
73 year-old father, who is chairman of the Iraqi National Movement and
expects to visit Washington next month to meet with administration
officials.

The elder Nakib defected after Hussein had begun systematically executing
senior military officers, many of them his friends. Thair Nakib's uncle was
seized by Hussein and remains in prison, and other relatives are under
watch, barred from leaving the country.

The national movement could help attract more dissident Iraqi officers, many
of them fellow Sunni Muslims, to the opposition cause, said Carole A.
O'Leary, a professor in the School of International Service at American
University. Such officers could take part in a U.S.-led invasion or help
create a post-Hussein government.

"We are coming to liberate them," Falah said. "Then we will see large
concentrations of [the Iraqi army] flee. That's for sure."

[.....]

Like some other opposition figures, Thair and Falah Nakib complain that
Chalabi runs the INC as a private group rather than an umbrella
organization.

The brothers say that within the INC, Chalabi tried to marginalize Sunni
Muslims - who make up about 25 percent of the Iraqi population. Chalabi is a
Shi'a, who constitute about 55 percent. Kurds make up about 20 percent.

[.....]

The Nakib brothers and others in their group say they believe that the best
plan for overthrowing Hussein would be a small U.S. force - perhaps 40,000
or so - that could be supplemented by defecting Iraqi troops.

In the early spring, the brothers shared their thoughts on Iraqi troop
morale and an overthrow of Hussein with Gen. Wayne A. Downing, Bush's
just-departed deputy national security adviser for counterterrorism. Before
going to the White House, Downing worked with the Iraqi National Congress on
a similar U.S. invasion plan that envisioned the use of American Special
Forces troops and Iraqi military defectors.

A smaller U.S. force would seem more "like a liberating army than an
invasion army," Thair Nakib said.

His brother added, "Everyone - the [Iraqi] army, [Hussein's] Ba'ath Party -
has to know we're coming to help them, not kill them."

Sun staff writer Mark Matthews contributed to this article.


IRAQIS OUTSIDE IRAQ

http://news.independent.co.uk/world/australasia/story.jsp?story=311158

*  ACTIVISTS ACCUSED OF 'DUMPING' ASYLUM-SEEKERS IN THE DESERT
by Kathy Marks in Sydney
Independent, 2nd July

Police accused activists yesterday of dumping asylum-seekers in the
Australian desert without food or shelter after encouraging them to break
out of a remote detention centre.

Fears are mounting for the safety of 10 men, including two boys aged 12 and
14, who are still on the run after escaping from the camp at Woomera on
Thursday evening. Night-time temperatures have since plunged below zero, and
some detainees were suffering from exposure when recaptured.

Thirty-five people, from Afghanistan, Iran and Iraq broke out of the centre
after protesters used cars to demolish a perimeter fence. Immigration
officials say all those who escaped have had applications for asylum
rejected and were being held pending the outcome of appeals.

South Australian police said they were looking for two young women believed
to have left 10 asylum-seekers near the opal mining town of Coober Pedy, 180
miles north of Woomera. The asylum-seekers fled in darkness across an area
pitted with unmarked mineshafts after the vehicle in which they were
travelling ­ a van painted with flowers ­ was stopped at a police roadblock.
The two women drove off.

Another group of 13 detainees was abandoned on an isolated stretch of
highway without food or water. When they were found, they had been huddled
around a campfire for two nights. Police inspector Des Bray said they were
dropped off hours after the break-out by the protesters, who promised to
come back to collect them. "It defies logic that you break these people out
and then just leave them there," he said.

Three people have been charged with assisting an escape, and yesterday Peter
Hore, said to be a "serial pest", appeared in court for the same offence.
Hore has disrupted public events such as the Australian Open tennis
tournament and the funeral of the rock star Michael Hutchence.

Twenty recaptured asylum-seekers also appeared in court, charged with
escaping federal custody, and were remanded to reappear in court in Adelaide
later this week. If convicted, they will probably be deported.

Detainees at Woomera have staged several protests against conditions at the
centre. The latest protest is a hunger strike, which entered its eighth day
yesterday.


http://thestar.com.my/news/story.asp?file=/2002/7/6/latest/5974Officials&sec
=latest

*  OFFICIALS: SADDAM'S STEPSON ADMITS MISTAKE OVER US VISA
The Star (Malaysia), 6th July

AUCKLAND, New Zealand (AP) - Saddam Hussein's stepson, being held in Florida
for immigration violations, has admitted he made an error in his application
for an entry visa to the United States, officials in New Zealand said.

The Iraqi leader's stepson, Mohammed Nour al-Din Saffi, a citizen of New
Zealand, now accepts he will be deported from the United States after
failing to get the proper visa to cover his flight training program, New
Zealand Foreign Ministry spokesman Brad Tattersfield told The Associated
Press on Friday.

Saffi, a 36-year-old engineer with the national airline, Air New Zealand,
was enrolled for a pilot recertification course but entered the U.S. on a
tourist visa.

He was planning to study at a flight school believed by the FBI to have been
used by one of the Sept. 11 hijackers.

Saffi was arrested by immigration and FBI officials in Florida on Wednesday.

Jimmy Brooks, director of air freight company Tiger Lines Cargo, claimed
Friday he sent Saffi to a Miami flying school to get his Boeing 727 pilot's
license re-certified.

Brooks told The Associated Press that Saffi planned to work part time for
his Auckland-based company as a flight engineer. The company has yet to
begin operations.

Brooks said Saffi was supposed to practice in a simulator with two
U.S.-based pilots. "We didn't know he needed a student visa,'' Brooks said.

An INS official, speaking on condition of anonymity, said in Washington any
foreign national who enters the United States has a responsibility to enter
the country under the proper visa.

A State Department official said Saffi could have taken advantage of a visa
waiver program that Washington maintains with a number of friendly
countries, including New Zealand.

It enables prospective visitors to arrive at a U.S. port of entry without a
visa. They are subject to scrutiny by the Immigration and Naturalization
Service, which can deny admission if its database shows they are not
qualified for entry.

Berton Beach, a vice president of operations with Aerospace Aviation Center
in Florida, said the company was unaware of the visa requirements.

Beach said the company filed an application with the Justice Department to
allow them to train Saffi. It included an authorization to conduct a
background check, his passport, national identification card, his address
and his employers' address.

The company received approval from the Justice Department on June 26.

A spokesman for New Zealand Prime Minister Helen Clark said the government
had "no evidence that he is connected to terrorist activity or to terrorist
organizations.''

Tattersfield said Saffi had contacted New Zealand Embassy officials in
Washington "who are convinced that Saffi entered the United States for the
purpose of study.''

"Saffi accepts he has made a mistake. ... He's going to be deported, within
a matter of days,'' Tattersfield said.

New Zealand police said they cooperated with U.S. authorities over Saffi's
arrest.

Detective Superintendent Bill Bishop, the national crime investigations
manager, said Saffi was "one of several'' people being monitored by police,
but declined to say whether Saffi posed any security threat.

Saffi is the eldest son of Samira al-Shahbandar, Saddam's second wife. His
father is Nour al-Din Saffi, an aviation engineer and former head of Iraqi
Airways.

Mohammed Saffi is believed to have left Iraq after the 1991 Gulf War ­ first
to neighboring Jordan and then to New Zealand where he has been for six
years.

http://www.newsday.com/news/nationworld/world/wire/sns-ap-us
iraq0704jul04.story?coll=sns%2Dap%2Dworld%2Dheadlines


POLICING THE BLOCKADE

*  U.S. BOMBS IRAQI DEFENSE SYSTEM
Associated Press, 4th July

ANKARA, Turkey -- American warplanes bombed an Iraqi air defense system
Thursday after coming under attack from Iraqi anti-aircraft artillery, the
U.S. military said.

The aircraft were making routine patrols when Iraqi forces fired artillery
at them near the northern city of Mosul, the U.S. European Command said in a
statement.

"Coalition aircraft responded to the continued Iraqi attacks by dropping
precision ordnance on elements of the Iraqi integrated air defense system,"
the Germany-based command said. "All coalition aircraft departed the area
safely."

In Iraq, the official news agency said U.S. and British warplanes damaged a
house and killed several cows and sheep in the airstrikes, but the report
did not cite any human casualties.

An unidentified military official told the Iraqi News Agency that the allied
warplanes "bombed our civil and service installations in Mosul."

[.....]


PROSPECTS FOR WAR

http://independent-bangladesh.com/news/jul/01/01072002ap.htm#A4

*  US HAS PLAN TO KILL SADDAM, SAYS IRAQI OPPOSITION LEADER
Bangladeshi Independent, 1st July

DOHA, June 30: The United States has drafted a general plan to kill Iraqi
President Saddam Hussein, an Iraqi opposition leader told Arab satellite
news channel Al Jazeera Saturday night, reports AFP.

Washington is tracking Saddam's movements through satellite data and human
intelligence, with the plan to order air strikes "to try to kill him" when
they are sure "they have determined with accuracy the spot where he can be
found," said former Iraqi intelligence chief Wafiq Sammarai.

The warplanes could take off from the southern Turkey military base of
Incirlik and bases in the Gulf, by the Mediterranean or the Red Sea, said
Sammarai, who defected from Iraq in 1994 and joined the London-based Iraqi
National Congress opposition group.

Sammarai called the plan "serious", but stressed he did "not think this
operation is going to come soon.

"If they fail (in killing Saddam), they could conduct raids against several
targets," said Sammarai, who added he was in contact with the Kurdish
opposition enclave in northern Iraq.

He denied the presence of US troops in Kurdish Iraq which is protected from
Saddam under a US-imposed no-fly zone.

"There are not any American troops in the north of Iraq at present,"
Sammarai said.

Sammarai also dismissed a Saturday report in the Lebanese newspaper As-
Safir that said 2,000 US troops had been stationed in Jordan to oust Saddam.
Jordan has already called the story false.

"I can also affirm that there are no American troops in Jordan," he said.

The Washington Post reported June 16 that US President George W. Bush had
ordered the CIA to draft plans for toppling Saddam.


http://www.iht.com/articles/63151.html

*  TIME TO DEPLOY A LARGE AMERICAN MILITARY FORCE
by Jim Hoagland
International Herald Tribune (from The Washington Post), 2nd July

WASHINGTON: American strategy in the greater Middle East is at a turning
point. The hesitant, at times contradictory, efforts by President George W.
Bush and his aides to calm the Israeli-Palestinian conflict have produced
nothing of substance. The administration must now pursue other methods of
preventing the region from becoming a chaotic platform for greater global
terrorism.

That means more reliance on U.S. military might to support diplomacy. Events
pull Bush toward a strategy of transforming the region by establishing a
greatly expanded and intrusive U.S. military presence there. American forces
would stay for years to help develop and shield new and democratic
leaderships in Iraq and in a Palestinian state.

This could become a vast and risky enterprise on the scale of American
commitments to Europe during the Cold War. No president would undertake it
lightly, or even voluntarily - especially not a president who came to office
with few fixed ideas about foreign policy or the Middle East. The vision is
not Bush's first choice. It is his last resort.

But the failure of the Saudi peace plan, of Israeli military strikes and of
Secretary of State Colin Powell's diplomacy to stabilize the Middle East
after nearly two years of turmoil deprives Bush of options. He must now
respond to their evident exhaustion with new and determined leadership.

Otherwise, Bush risks letting events make strategy for him through
incremental adjustments that do not add up to a coherent commitment to
success. Vietnam illustrates the grave dangers of making policy by piecemeal
commitments, which leave the initiative to the enemy.

The United States and its NATO partners would invite that risk by an
isolated deployment of Western troops as a buffer force between the Israelis
and Palestinians. Hamas, Al Qaeda and Saddam Hussein would all welcome the
opportunity to set up a shooting gallery with American soldiers as sitting
ducks.

This is no time to think small. American troops can be effective and secure
on the West Bank only as part of a much larger force committed to the region
on a twofold mission: to fight the sources and supporters of global
terrorism, and to advance the interlocking causes of democracy in the Arab
world and the survival of Israel. That is the price of admission -
admittedly a steep one - for committing U.S. forces into the middle of the
Arab-Israeli conflict.

Conventional thinkers argue the opposite case: The Palestinian problem must
be appeased and Al Qaeda totally eliminated before the United States acts to
remove Iraq's weapons of mass destruction and Saddam Hussein.

But the enduring Israeli-Palestinian stalemate pushes the White House toward
turning such conventional wisdom on its head. The greater the polarization
between Israelis and Palestinians, the more likely a U.S. invasion of Iraq
becomes.

Straws in the wind suggest a growing acceptance at the White House of the
need for an overwhelming U.S. invasion force that will remain on the ground
in Iraq for several years. The U.S. presence will serve as the linchpin for
democratic transformation of a major Arab country that can be a model for
the region. A new Iraq would also help provide greater energy security for
Americans.

The international environment has also changed significantly in recent
months. The open opposition voiced in the past by Russia and France to U.S.
action against Saddam Hussein has turned into a muted, conditional
acquiescence to U.S. plans. Behind the scenes, Russian and French business
interests have secretly opened contacts with an Iraqi opposition that they
have concluded may soon come to power.

The wind has shifted in the region as well. Iran welcomed Ahmed Chalabi,
Saddam's most visible and dedicated opponent in exile, for political
discussions in Tehran earlier this month. Turkey has privately told
Washington it will support U.S. action against Baghdad. U.S. officials will
soon begin discussions with Israel on the implications for the Jewish state
of a U.S. campaign against Iraq.

Foreign leaders have concluded that Bush means what he says about regime
change in Baghdad, and are adjusting their policies. Bush's bold vision on
Iraq is the right starting point for a coherent Middle East strategy.


http://www.iht.com/articles/63635.html

*  FAILURE OF OTHER EFFORTS LED U.S. TO PLAN WAR ON SADDAM
by Patrick E. Tyler
International Herald Tribune (from The New York Times), 6th July

The pressure on the Pentagon to produce a plan for President George W. Bush
to make war on Iraq underscores the failure of either diplomacy or covert
operations to dislodge Saddam Hussein or force him to open up to UN
inspectors hunting for weapons of mass destruction. The emergence of a
detailed concept for a military attack on Iraq also suggests that Bush's new
approach to solving the conflict between Israel and the Palestinians may be
part of a shift in focus toward preparations for an Iraq campaign.

Bush was briefed on the state of war planning on June 19 by the top general
in the American central command, Tommy Franks. Five days later, the
president delivered his long-awaited Middle East policy address, calling on
Palestinians to jettison their leader, Yasser Arafat, and warning that
otherwise they can expect little in the way of support or assistance from
the United States.

That stalled the American mediation effort in the Middle East, a state of
affairs reflecting the broad view of Bush's more conservative advisers,
among them Vice President Dick Cheney and Defense Secretary Donald Rumsfeld,
that the Israeli Palestinian conflict does not present a strategic threat to
American interests in the Middle East - but that Iraq's interest in
developing weapons of mass destruction does.

The evidence that Saddam still possesses such weapons remains murky -
particularly in the view of America's European allies, most of whom have
argued against a new war on Iraq. In the United States and its principal
Middle East ally, Israel, however, a number of senior officials - including
Prime Minister Ariel Sharon and former Prime Minister Ehud Barak - believe
that a post-Saddam Iraq could be fashioned into some form of democracy.

In this view, an Iraq under new governance could become a new Western ally,
helping to reduce American dependency on bases in Saudi Arabia, to secure
Israel's eastern flank and act as a wedge between Iran and Syria, two of the
most active sponsors of terrorism.

The obstacles, risks and costs to such a strategy remain largely unaddressed
by the Bush administration, and its planning for any eventual war is tightly
wrapped in secrecy.

Deputy Defense Secretary Paul Wolfowitz, the administration's leading
advocate for the centrality of Iraq in American strategic planning in the
Middle East, was host this week to Iraqi opposition leaders, according to
opposition officials, and received a bleak report from them on the chaotic
state of opposition forces in Iraq.

Nonetheless, the Pentagon is pursuing efforts to unite the Iraqi opposition
so that it might play the same kind of adjunct role of intelligence
collection, target identification and combat that anti-Taliban partisans
played in the Afghan campaign.

According to the opposition officials, the meeting was attended by
representatives from the State Department's and the CIA's task forces on
Iraq, along with American military officials.

Kurdish leaders in Northern Iraq are riven by internal disputes and have yet
to come to any agreement with the CIA to allow American intelligence
officers, special forces trainers or diplomats to set up camp there and
begin preparing for a new campaign against Saddam.

In April, Kurdish and other Iraqi opposition officials said that Massoud
Barzani and Jalal Talabani, the principal Kurdish leaders, traveled to
Frankfurt and then to a CIA training base in southern Virginia.

There, the opposition officials said, their leaders were told that the
United States had decided to overthrow Saddam and was seeking to send CIA
teams to train Kurdish fighters in how to work with U.S. forces, much as
Afghan fighters helped U.S. forces against the Taliban. A CIA spokesman
declined comment.

For now, Kurdish leaders appear reluctant to sign on to American war
planning unless they get strong guarantees that the Bush administration
plans to go all the way to Baghdad.

They also want Kurdish cities protected from the kind of onslaught that
Saddam unleashed during the Clinton administration's failed attempt to
dislodge the Iraqi leader. The failure forced the CIA to evacuate partisans
from Iraq at a cost of more than $100 million, according to administration
officials.

On the diplomatic front, a number of moderate Arab leaders have advised the
White House in recent months that if Bush hopes to build a consensus for
removing Saddam by force, the best way to achieve that goal is first to
achieve an Israeli Palestinian breakthrough.

Many of the moderate Arab states have expressed a willingness to assist in
Saddam's removal if he does not accept the intrusive inspections.


IRAQI/UN RELATIONS

http://hoovnews.hoovers.com/fp.asp?layout=displaynews&doc_id=NR200207043600.
1_7ef9001ec23e9941

*  UN: UNITED NATIONS COMPENSATION COMMISSION APPROVES AWARDS OF USD4.9BN
FOR COMPENSATION
Hoover's (Financial Times), 4th July

The Governing Council of the United Nations Compensation Commission today
approved awards of $4,880,400,537 for compensation to cover claims relating
to the invasion of Kuwait by Iraq before concluding its forty-fourth session
held in Geneva. The session was held from 18 to 20 June, as scheduled, and
then was extended to continue consideration of one agenda item.

Representatives of Kuwait, Iraq and Palestine addressed the 15-member
Governing Council at its opening plenary meeting, presided over by Sverre
Bergh Johansen of Norway.

The Council also approved 10 reports and recommendations of the panels of
Commissioners concerning claims from individuals in category "D", claims
from corporations in category "E", and claims from governments in category
"F", as follows:

Part 1 of the twelfth instalment of category "D" claims (individual claims
for losses over $100,000) involved 395 claims filed on behalf of individuals
by 17 governments. Of these, 346 claims filed by 14 governments were
recommended for compensation, with a total award value of $100,698,098.58.

The thirteenth instalment of category "D" claims involved 593 claims filed
on behalf of individuals by 22 governments and 3 international
organizations. Of those, 523 claims filed by 22 governments and 3
international organizations were recommended for compensation, with a total
award value of $147,732,224.63.

Part 1 of the seventh instalment of category "E1" claims (oil sector claims)
involved one claim filed on behalf of a corporation by one government. The
claim was approved by the Council for compensation, with a total award value
of $1,579,792,104.

Part 2 of the seventh instalment of category "E1" claims involved 11 claims
filed on behalf of corporations by three governments. Of these, two claims
filed by two governments were approved by the Council for compensation, with
a total award value of $212,387,402.

The tenth instalment of category "E2" claims (non-Kuwaiti claims, excluding
oil sector, construction/engineering and export guarantee and insurance
claims) involved 210 claims filed on behalf of corporations by 25
governments. Of these, 71 claims filed by 17 governments were approved by
the Council for compensation, with a total award value of $9,270,601.

The nineteenth instalment of category "E3" claims (non-Kuwaiti construction
and engineering claims) involved 19 claims filed on behalf of corporations
by seven governments. Of these, 11 claims filed by seven governments were
approved by the Council for compensation, with a total award value of
$48,066,834.

The fifteenth instalment of category "E4" claims (Kuwaiti claims, excluding
oil sector claims) involved 15 claims, 14 of which were filed on behalf of
corporations by the Government of Kuwait and one directly submitted claim.
Of those, 14 claims were approved by the Council for compensation, with a
total award value of $252,322,898.

The seventeenth instalment of category "E4" claims involved 20 claims filed
on behalf of corporations by the Government of Kuwait. All claims were
approved by the Council for compensation, with a total award value of
$154,718,071.

Part 2 of the third instalment of category "F3" claims (Kuwaiti Government
claims, with the exception of environmental claims) involved four claims
filed on behalf of Kuwaiti ministries and other government entities by the
Government of Kuwait. All claims were approved by the Council for
compensation, with a total award value of $2,103,461,827.

The second instalment of category "E/F" claims (claims filed on behalf of
insurance companies and export credit agencies) involved 33 claims, of which
32 were filed by 14 governments and one directly submitted claim. Of these,
21 claims filed by 14 governments were approved by the Council for
compensation, with a total award value of $271,950,477.

During the session, the Council had discussed a progress report of the
Executive Secretary on the activities of the Commission, which addressed the
processing of claims and the payment of approved awards. The Council also
discussed the report of the Executive Secretary on the distribution by
governments of payments to successful claimants, the transparency of the
distribution process, and the return of undistributed funds.

The Commission has so far awarded compensation of approximately $42.6
billion, including the awards approved in the forty-fourth session;
approximately $14.8 billion of the amount awarded has been made available to
governments and international organizations for distribution to successful
claimants in all categories of claims.

Further information about the Commission, including the text of Governing
Council decisions and reports and recommendations of the panels of
Commissioners, can be found on the United Nations Compensation Commission
Web site located at www.uncc.ch.

The next session of the Council will be held from 1 to 3 October.


http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c
=StoryFT&cid=1025793364026&p=1012571727172

*  UN DEAL LEAVES IRAQ'S KURDS AT MERCY OF BAGHDAD
by Guy Dinmore in northern Iraq and Carola Hoyos, United Nations
Financial Times, 6th July

In theory, the Kurds of northern Iraq have never had it so good, effectively
independent from Baghdad and guaranteed a substantial slice of the country's
oil income under the United Nations oil-for-food programme.

The reality is rather different.

Zhiyan Ahmad Abdullah fights a daily battle with shortages of basic supplies
as director of the main maternity hospital in Sulaimani, one of the two
regional capitals controlled by rival Kurdish factions.

"We have many, many problems," she says in despair, having to cope with
nearly 30 deliveries a day. "Each month we get 1,000 pairs of gloves, at
best 2,000. But we need 10,000, so we have to re-use them."

The same shortages apply to drugs for delivery, blood-bags and blood-testing
equipment.

Prostaglandin, used for abortions, has never been supplied, forcing doctors
to use more dangerous methods for terminating pregnancies.

"Really, the WHO is to blame," says Dr Abdullah, referring to the World
Health Organisation, which is responsible for delivering medical aid under
the oil-for-food programme.

"This programme serves the rest of Iraq more than Kurdistan. A lot of money
goes to serving those who work in the UN. For example, a local UN employee
earns about $600 [£390] a month. My salary is $80 and my nurses get only
$10."

Under Security Council resolution 986, now in its sixth year of
implementation, Iraq is allowed to use earnings from sales of crude oil to
buy food, medicines and fund humanitarian projects under UN monitoring. To
date Iraq has earned over $54bn.

>From the total oil income, the central and southern areas of Iraq under
Baghdad's direct control receive 59 per cent, while the 3.5m Kurds in the
north get 13 per cent. The rest is spent on compensation for Iraq's 1990
invasion of Kuwait (25 per cent) and UN costs.

The Baghdad government led by President Saddam Hussein is allowed to
purchase supplies and implement distribution directly, but because the
Kurdish north has no international recognition it has to acquire aid through
Kimadia, the official Baghdad procurement agency, and rely on the UN for
distribution.This, as regional Kurdish officials argue, leaves the north at
the mercy of Baghdad and what they call the inefficiency and even corruption
within the dozen or so UN agencies involved in Iraq.A commonly voiced
complaint is that the WHO programme is dominated by Arabs who have little
sympathy for the Kurds and rely on Baghdad.One official in the Kurdish
region, which effectively broke away from Baghdad in 1991 and is partly
protected by a US-imposed no-fly zone, estimated that only 37 per cent of
the oil income allocated for the north had been spent on humanitarian goods
and services. Infrastructure projects, such as water, electricity and a
$400m hospital, have been blocked by Baghdad."Baghdad vetoes many projects,
and the UN does not defend us," says Sami Abdul-Rahman, deputy prime
minister in the Kurdish regional government based in Arbil, calling the UN
agencies "bureaucratic, biased and cumbersome".Despite the shortcomings
however, Mr Abdul-Rahman agrees that the oil-for-food programme is
"essentially a success", helping to provide basic rations, medical supplies
and schooling.Statistics compiled by the UN show a significant decrease in
malnutrition rates among children under five years, especially in the
Kurdish north, bolstering UN assertions that it is more efficient in
implementing programmes in the north than the Baghdad government is
elsewhere.WHO blames the sanctions regime for some of the problems. "The
process is known to be laborious because of the lengthy procurement
procedures imposed by the sanctions regime," it says.The organisation said
it had taken "remedial actions," such as an early warning system that had
"improved the situation without solving the roots of the problem". It
believed the new sanctions regime, agreed in May, might solve some problems
by streamlining procedures for importing goods that have no possible
military application.


http://www.dawn.com/2002/07/06/int1.htm

*  IRAQ, UN FAIL TO AGREE ON ARMS INSPECTIONS
Dawn (from Reuters), 6th July, 24 Rabi-us-Saani 1423

VIENNA, July 5: Iraq failed to reach an accord with the United Nations on
Friday on a resumption of weapons inspections after intensive talks
involving Secretary-General Kofi Annan and Iraqi Foreign Minister Naji
Sabri. The impasse was bound to encourage those in the Bush administration
who prefer a military solution to topple President Saddam Hussein compared
to many European and Arab leaders who want to explore a diplomatic
compromise. The two-day meeting was the third high-level session on the arms
inspectors this year. "They didn't say yes," Annan told reporters after the
Friday talks ended. "I would have preferred more," he said, adding: "I
cannot force a decision." Sabri said he expected another round of talks in
the coming months on the weapons inspectors, out of Iraq for more than three
years, but Annan said no date had been set for the discussions, expected to
be in Vienna or Geneva. The Iraqi delegation will now go back to report to
their authorities, he said. "We have agreed to maintain contacts, including
continuing discussions on technical matters." Sabri made clear that he
wanted answers to many of the questions he submitted at the last talks in
May, on issues ranging from US threats for a "regime change" in Baghdad to a
timetable for the lifting of UN sanctions, imposed when Iraq invaded Kuwait
in August 1990. But Annan has said repeatedly he is not in a position to
answer any political questions concerning US policy or other issues that
fall within the province or the 15 UN Security Council members. However,
Sabri was not persuaded and accused the Security Council of violating its
own resolutions. "We need assurances from the United Nations," Sabri said.
"We are the victims of illegal practices forced by the United States on the
Security Council. We have lost 1.67 million citizens as a result of the
sanctions the Security Council imposed in clear violation of international
law." [.....]


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