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[casi] News, 13-20/12/02 (3)



News, 13-20/12/02 (3)

IRAQI/INTERNATIONAL RELATIONS

*  US blocks Germany's bid to head key Security Council panel
*  Tunisia prevents a demonstration against the war on Iraq
*  Russia's vote at UN cost Iraq oil deal: firm
*  Iraq: purchase of diesel train locomotive from Chinese company
*  Nearly two-thirds of Japanese oppose US attack on Iraq: Poll
*  Iraq for enhancing trade with Pakistan
*  Mandela Slams U.S. for Diplomatic 'Piracy'
*  US [ie Richard Perle] warns Germany against voting 'no'
*  Vatican: Inspection in Iraq should cover Israel
*  Baghdad Orders 5,000 Volga Taxis From GAZ

NORTHERN IRAQ/SOUTHERN KURDISTAN

 *  Iraq Kurds Now Siding With United States
*  Terrorist behind Amman killing 'in Kurdish Iraq'

IRAQI/MIDDLE EAST RELATIONS

*  Moussa: A[rab] L[eague] recognizes Kuwaiti bitterness, but Iraq is in
danger
*  Misunderstanding highlights US-Kuwaiti tensions
*  Saudi Arabia, Iraq restore phone lines
*  Syrian pipeline helps Iraq evade UN oil sanctions
*  Fuleihan inaugurates Iraqi trade exhibition
*  Iraqi leader sends 40 truckloads of fertilizer to Palestinian peasants
*  Baghdad puts out the welcome rug for banks
*  Iraq, Iran agree on opening a border crossing for humanitarian stuffs
*  Jordan: human shields to protect the Iraqi establishments
*  Turkey ready to send 70,000 troops into Iraq
*  Yemen's president says America will lose anti-terror coalition in war on
Iraq


IRAQI/INTERNATIONAL RELATIONS

http://www.boston.com/dailyglobe2/347/nation/US_blocks_Germany_s_bid_to_head
_key_Security_Council_panel+.shtml

*  US BLOCKS GERMANY'S BID TO HEAD KEY SECURITY COUNCIL PANEL
by Colum Lynch
Boston Globe, from Washington Post, 13th December

UNITED NATIONS - The Bush administration, still angry over German Chancellor
Gerhard Schroeder's antiwar stance on Iraq, has blocked Germany's quest to
assume the chairmanship of a key Security Council sanctions committee that
oversees billions of dollars in Iraqi trade, US and UN diplomats said
yesterday.

Germany, one of five countries that will begin serving two-year terms on the
15-nation council in January, had been angling for the prestigious post.
Germany is Iraq's 20th-largest trade partner. Its corporations have
conducted a total of $419 million in business with Baghdad through a UN
humanitarian program since the beginning of 1997, according to UN diplomats.

US and UN officials said the White House, fearing the Schroeder government
might challenge US policy on Iraq, made it clear it would not accept Germany
in the position. It has instead promoted the candidacies of Chile and Spain.

US and British officials have informed Germany that they would be willing to
back its bid for the chairmanship of a counterterrorism committee.


http://www.lasvegassun.com/sunbin/stories/w-eur/2002/dec/14/121409947.html

*  BULGARIA ARRESTS IRAQI ON ARMS SUSPICION
Las Vegas Sun (from AP), 14th December

SOFIA, Bulgaria: Bulgarian authorities said Saturday they had arrested an
Iraqi man wanted in Germany on suspicions he tried to procure weapons for
the regime of Iraqi President Saddam Hussein.

Sahib Abd al-Amir al-Haddad, 59, was arrested Nov. 25 after arriving at the
Sofia airport from Turkey, Interior Ministry spokeswoman Marusia Toshkova
told The Associated Press.

Toshkova said that al-Haddad was arrested on an Interpol warrant issued in
Germany. He remained in custody in Sofia pending a court hearing on his
extradition, which must take place no later than 40 days after his arrest.

The arrest was first reported Saturday by the German news weekly, Der
Spiegel, which said al-Haddad was arrested on an international warrant
issued by prosecutors in Mannheim, Germany.

Calls to the German prosecutors went unanswered Saturday.

According to Der Spiegel, prosecutors suspect the man of violating German
arms export laws by attempting to buy drilling equipment and parts for MiG
jets.

Al-Haddad and another suspect, a German engineer, also allegedly tried to
buy large numbers of rockets, machine-guns and anti-aircraft guns for Iraq.

The German engineer, identified by prosecutors in September as Bernd S., was
charged last August with helping supply Iraq with technology for a
long-range cannon and equipment for military jets, breaking German export
law as well as the U.N. arms embargo on the country.

German prosecutors believe the equipment was sent to Iraq in 1999 by a
German trading firm via Jordan to conceal the shipments' true destination.

Iraq last year dismissed the allegations as part of a plot inspired by
Israel and the United States.

Another suspect - an employee of an unidentified German engineering firm -
has also been charged in connection with the alleged deliveries.

Arms deliveries to Baghdad have been banned by a U.N. resolution passed
after the Gulf War in 1991.


http://www.arabicnews.com/ansub/Daily/Day/021214/2002121411.html

*  TUNISIA PREVENTS A DEMONSTRATION AGAINST THE WAR ON IRAQ
Arabic News, 14th December

Some 11 oppositions parties and civilian groups said yesterday that the
government prevented them from organizing a demonstration in the downtown of
the capita Tunisia in protest of the an American war against Iraq. Eye-
witnesses said that hundreds of riot fighting forces and secret police were
deployed in the center of the city to prevent the demonstration.

In a joint statement, the parties and the groups said that the ministry of
the interior informed leaders of the political parties that it was decided
to ban the demonstration of protest due to be on Friday for security
reasons.


http://www.dawn.com/2002/12/16/int3.htm

*  RUSSIA'S VOTE AT UN COST IRAQ OIL DEAL: FIRM
Dawn, from Reuters, 16th December

MOSCOW, Dec 15: Russia's top oil firm LUKOIL said on Sunday that Moscow's
support for last month's United Nations resolution on disarming Iraq had
pushed Baghdad to scrap a $3.7 billion deal to develop a huge oilfield.

LUKOIL President Vagit Alekperov told Reuters in an interview he saw no US
pressure behind the Iraqi decision to break off an accord on the West Qurna
oilfield. He suggested other Russian and Chinese contracts with Baghdad
could be next.

"There were no economic grounds, because the situation with West Qurna was
simply the same as it had stood two or three years ago," he said.

"What has been done, I think, is more linked to the reaction to Russia's
position on UN inspectors. Russia supported actions which seemed clear and
logical to the international community."

The future of Iraq's crude reserves, the world's second largest after Saudi
Arabia's, are at the centre of a diplomatic tug-of-war between countries
hoping to grab a share of Baghdad's oil wealth once United Nations sanctions
are lifted.

Iraq's ambassador to Russia said Moscow and Baghdad would continue to work
together despite the broken contract.

"We are continuing to cooperate with Russian companies, especially in the
strategic area of oil and gas," Abbas Khalaf told an Abu Dhabi television
correspondent who provided Reuters with a translation of his Arabic language
comments.

"It's normal for these kinds of conflicts to arise between partners. This is
being highlighted because the contract is a big one."

Russia's Foreign Ministry said the Iraqi decision "runs counter to the
friendly nature of Russian-Iraqi relations".

"It is bewildering that it has been taken at a time when Russia is...working
with other states to solve the Iraqi issue through peaceful, political
means," a ministry statement said.

Russia, long the biggest defender of Iraq's interests on the UN Security
Council, pressed for changes before backing the resolution calling for the
resumption of inspections to determine whether Baghdad held weapons of mass
destruction.

The resolution is widely seen as a last chance for Iraqi President Saddam
Hussein to avoid a US-led strike on Baghdad.

LUKOIL said on Thursday it had received a letter from the Iraqi Energy
Ministry saying Baghdad had rescinded the 1997 deal, signed with LUKOIL and
two smaller firms to develop West Qurna. The region has oil reserves of
several billion barrels.

Baghdad has said the deal was scrapped because no major work had been
carried out on the field since 1997. LUKOIL says it was waiting for the
lifting of UN sanctions, imposed on Iraq when it invaded Kuwait in 1990, to
start massive investment.

Alekperov, effectively chief executive of LUKOIL, said on Sunday he
considered the deal still valid.

"Those actions are of course making other Russian firms wary of working in
Iraq," he said. Russia and Iraq, he added, had signed contracts worth
billions of dollars.

"If such actions are taken today against us, I think tomorrow or the day
after tomorrow we could expect Iraq to take similar steps against Chinese
companies."

China National Petroleum Corp (CNPC) has a contract to develop the $700
million Al Ahdab field, the largest oil development deal signed in the
country after West Qurna.

LUKOIL has said it was looking for guarantees from both Moscow and
Washington that it would not lose the field to major US oil companies if the
United States ousted Saddam.

Alekperov said LUKOIL was defending Russia's interests. "And I believe that
our government and president should support and defend interests of LUKOIL
and other Russian companies".

He dismissed any suggestion that the Iraqi decision could be inspired by the
interests of US business.

"I cannot accept the notion that this plays into the hands of our American
colleagues," he said.

He still believed in a peaceful solution in Iraq, but in the event of war
there would be no sharp oil price rise due to extra supplies from other
producers. Nor would prices collapse, he said, if US oil majors explored
Iraqi reserves.

"World oil consumption is growing while oil output in traditional regions is
declining. Nobody is interested in very high or very low prices," he said.


http://hoovnews.hoovers.com/fp.asp?layout=displaynews&doc_id=NR20021216670.2
_52920002986fd7ee

*  IRAQ: PURCHASE OF DIESEL TRAIN LOCOMOTIVE FROM CHINESE COMPANY
Hoover's (Financial Times), 16th December 16, 2002 1:53pm

A-Sharq Al-Awsat newspaper reported on the signing of a contract for the
import of thirty small diesel train engines for the government railroad
company. The contract is between the government railroad company and the
Chinese Shan Yen Company, and was signed during the Baghdad International
Trade Fair held in early November 2002. These locomotives are capable of
traveling 140 kilometers per hour and are controlled by a computerized
system. This Chinese company has supplied Iraq in the past with fifty
locomotives and professional teams from the Company will operate in Iraq to
maintain the engines for the first three years after purchase.


http://www.hindustantimes.com/news/181_120722,00050004.htm

*  NEARLY TWO-THIRDS OF JAPANESE OPPOSE US ATTACK ON IRAQ: POLL
Hindustani Times, 16th December

Agence France-Presse, Tokyo,December 16: Nearly two-thirds of Japanese
people oppose a US-led attack on Iraq, while some 57 per cent said Japan
should not cooperate militarily if an attack goes ahead, a poll said on
Monday.

The weekend poll of 2,037 people by the Asahi Shimbun showed that 65 per
cent opposed US military action against Iraq, which is suspected of
developing weapons of mass destruction, while 26 per cent agreed with it.

In the event war that breaks out, the percentage of respondents who said
Japan should not cooperate with a US-led attack shrank to 57 per cent from
69 per cent of those polled at the end of August, while the supporters of
cooperation rose to 29 per cent from 20 per cent.

The poll was published the same day that one of Japan's Aegis guided-missile
destroyers left for the Indian Ocean with 250 crew members aboard to support
the US-led military campaign in Afghanistan.

The same poll showed 48 per cent opposed the Aegis dispatch, while 40 per
cent supported it amid debate over whether the use of such a heavily-armed
warship violated Japan's pacifist constitution.

The feelings toward the dispatch of the state-of-the-art destroyer were
almost unchanged from a similar poll taken last November, which showed 48
per cent opposed and 44 per cent in favour.


http://www.dawn.com/2002/12/17/ebr7.htm

*  IRAQ FOR ENHANCING TRADE WITH PAKISTAN
Dawn, 17th December

KARACHI, Dec 16: The Consul General of Iraq, Raad F. Towfik, informed the
members of the Karachi Chamber of Commerce and Industry that their visa
applications would be processed on priority basis for enabling them to
attend Baghdad International Fair.

The consul general here during a meeting with KCCI president Shaukat Iqbal
said that the fair begins from November 1 to 15 every year. The event
provides an excellent opportunities to the business community to meet
traders of Iraq and from other parts of the world, he added.

He said trading with Iraq was being channelled through Oman and Dubai due to
heavy insurance charges levied for direct Iraq-bound cargo.

He said the businessmen who were interested to attend the fair, can get
their visas on the recommendations of the KCCI.

Shaukat Iqbal said that Pakistan can export rice, wheat, textile made-ups,
surgical goods, sea food and other products to Iraq. However, he added, it
was important that the Pakistani exporters should get the appropriate
information about the requirements of Iraqi markets in this regard.

He also invited the Iraqi investors to visit Pakistan export processing
zones and study the possibilities of joint ventures and investment. He said
that the businessmen of the two sides should organize exhibitions of their
respective products in each other's countries.


http://story.news.yahoo.com/news?tmpl=story&u=/nm/20021217/wl_nm/iraq_safric
a_dc_1

*  MANDELA SLAMS U.S. FOR DIPLOMATIC 'PIRACY'
Yahoo, 17th December
[in stealing the Iraq dossier]

STELLENBOSCH, South Africa (Reuters) - South Africa's Nelson Mandela
lambasted the United States Tuesday for what he said were efforts to
sideline the United Nations and condemned a U.S. grab for an Iraq weapons
dossier as piracy.

The former South African president, who has been praised across the planet
for his efforts to heal the wounds that decades of apartheid inflicted on
his country, said he felt let down by the silence of other world leaders
over U.S. policy.

"I am disappointed with heads of state who are just keeping quiet when the
United States wants to sideline the United Nations," he told the ANC's
five-yearly conference.

The latest move, providing evidence for what Mandela says is the dangerous
U.S. disregard for the principles of multilateral world governance, was the
arrival of Iraq's 12,000-page weapons declaration dossier in Washington
earlier this month.

Washington obtained an early unedited copy of the Iraqi declaration
originally sent to the United Nations after a deal was struck to override a
U.N. Security Council decision to keep the report under wraps at U.N.
headquarters in New York.

"This was an act of piracy which must be condemned by everyone," the former
South African president told members of the ruling African National Congress
(ANC).

Iraq blasted the move and said the United States would manipulate the
dossier to produce a pretext to launch war.

Mandela, 84, said both he and current South African President Thabo Mbeki
counted themselves as friends of the United States and of President Bush.
But Mandela has been a fierce critic of U.S. policy toward Iraq.

"And one must not be dishonest and evade the real issue, viz. that the
United States of America (with the United Kingdom in tow) has tended to
dangerously disregard the principles of multilateral world governance," he
said.

"The conduct of the United States and the Bush administration with regards
to the current Iraq issue is a case in point."

Mandela said there was a clear impression that the United States "remained
intent on military action against Iraq at all costs."


http://straitstimes.asia1.com.sg/world/story/0,4386,161264,00.html?

*  US WARNS GERMANY AGAINST VOTING 'NO'
Straits Times, 18th December

BERLIN (AFP): Top Pentagon adviser Richard Perle said in an interview
yesterday that a German 'no' to strikes against Baghdad on the UN Security
Council would be akin to backing Iraqi President Saddam Hussein.

Following months of simmering tensions over German opposition to military
action against Baghdad, Mr Perle told Germany's daily Die Welt that if
Berlin were to use its non permanent seat on the Security Council to vote
against a war, it would be 'catastrophic' for transatlantic relations.

'If a chancellor refuses to support even a UN-led action, one can only see
that as de facto support for Saddam,' he said in comments printed in German.

Beginning on Jan 1, Germany will take up a non-permanent seat on the
15-member UN Security Council for two years, and will take the chair in
February.

Chancellor Gerhard Schroeder's centre-left government has declined to reveal
how it will vote on a possible UN resolution against Iraq.


http://www.arabicnews.com/ansub/Daily/Day/021218/2002121815.html

*  VATICAN: INSPECTION IN IRAQ SHOULD COVER ISRAEL
Arabic News, 18th December

The Vatican yesterday said the operations of the international inspection in
Iraq should also include other countries like Israel "which the UN had taken
a decision against it that has been forgotten."

The Vatican also stressed that the "fighting of brothers taking place in the
holy lands on daily basis" requires embarking on a policy "based on honoring
man's dignity and rights."

The chairman of the Papal council for Justice and peace "archbishop Renato
Martino said upon introducing the message of Pope John Paul II on the
occasion of the "world day for peace" which is celebrated on January 1st
that "the preventive war is an aggressive war and does not come in the
context of a just war," in remarks to the "preventive" war planned by the US
against Iraq.

He added that the international inspection operations in Iraq should also
target other countries. He said that regarding the inspection operations in
Israel, "the UN had taken a decision concerning it is forgotten." He said
that the campaign against terrorism should not be made at the expense of
"human rights."


http://www.themoscowtimes.com/stories/2002/12/20/044.html

*  BAGHDAD ORDERS 5,000 VOLGA TAXIS FROM GAZ
by Simon Ostrovsky
Moscow Times, 20th December

Baghdad has ordered 5,000 Volga taxis from GAZ, breathing new life into the
No. 2 automaker's best-known brand, the company said Thursday.

The contract, estimated to be worth more than $25 million, is a godsend for
the company, which has seen demand for its outdated sedan plummet, forcing
it to shut down production until February, when it will restart to fill the
Iraqi order.

Intended for the chaotic streets of Baghdad, the Volgas will come with a few
special features not included in most models sold in Russia, such as air
conditioning and automatic door locks, said GAZ spokesman Vasily Sarychev.

"The climate in Iraq is very different from ours," Sarychev said by
telephone from the company's Nizhny Novgorod headquarters.

"A delegation from Iraq came to inspect some models last week and nearly
froze to death, they're not used to these conditions," he said. "They won't
be needing heaters in the cars."

Asked if possible U.S. military strikes on Iraq would jeopardize the
contract, Sarychev said: "If we thought about that we wouldn't be able to do
business at all."

Sarychev wouldn't put a price tag on the deal, but he said the taxis would
cost more than usual because of the added features. The starting price for a
Volga in Russia is 150,000 rubles ($4,715).

"Iraq is not a rich country and that's why they are buying their cars from
us," Sarychev said.

Russian consumers, on the other hand, are increasingly opting for used
foreign cars in the same price category.

This year saw record sales of used imports, attributed to growing buying
power in the country and a used-car import frenzy ahead of a steep tariff
hike on imports imposed in October.

Some 480,000 imported used cars are expected to be sold in Russia by the end
of the year, compared to 362,000 in 2001. As a result, GAZ will stop making
Volgas as of Monday and has no plans to resume production until the
beginning of February.

Just 63,349 Volgas were produced in the first 11 months of the year, down 25
percent over the same period last year.

GAZ will also stop producing its popular vans and trucks for 10 days
starting Dec. 29.

Meanwhile, GAZ's board of directors voted last week to increase the
company's charter capital by issuing an additional 25 percent of common
stock. GAZ will use the share issue, which could raise up to $25 million, to
update production and modernize the Volga.


NORTHERN IRAQ/SOUTHERN KURDISTAN

http://www.lasvegassun.com/sunbin/stories/w-me/2002/dec/13/121307295.html

*  IRAQ KURDS NOW SIDING WITH UNITED STATES
by Borzou Daragahi
Las Vegas Sun (from AP), 13th December

[.....]

"Our leaders are not very keen on keeping their word sacred," said Fouad
Baban, a Kurdish doctor whose ancestors founded the city of Sulaymania three
centuries ago. "But up until now the geopolitics of Kurdistan have been so
complicated that it's been impossible to stick to one policy."

This time is different, said Sherko Bekis, a prominent Kurdish poet and
publisher.

"In our history, we've done great damage to ourselves," he said. "But we
know we can't have peace without getting rid of Saddam. And we know we can't
get rid of Saddam without America. And although Kurds would betray each
other, we would never betray America."

[.....]

The Kurds, though, could hinder the American aim of retaining a unified,
Baghdad controlled Iraq, said Colin Rowat, an authority on Iraq at the
University of Birmingham.

"Iraq's Kurds have carved out their small measure of autonomy in part
because U.S. politicians have seen their opposition to Saddam as useful over
the decade," Rowat said.

"If, however, the current Iraqi government is replaced with one that the
U.S. wishes to support, then Iraq's Kurds become an irritant."

[.....]

"It is the American administration, not the Kurdish leaderships that I worry
about," said Carole O'Leary, a Kurdish expert at the American University in
Washington. "The question is, `Can the Kurds trust the American leadership?'
Not the other way round."

[.....]

"We know we haven't been trustworthy," said Rebin Herdy, a writer for the
quarterly Kurdish magazine Rahand, or Wind. "Sometimes we have to form
alliances with Turkey, with Iran, with Syria, with Baghdad to protect
ourselves. What can we do? It's the curse of our geography."


http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c
=StoryFT&cid=1039523815592&p=1012571727172

*  TERRORIST BEHIND AMMAN KILLING 'IN KURDISH IRAQ'
by Nicolas Pelham in Amman and Mark Huband in Doha
Financial Times, 19th December

Jordan's prime minister said yesterday a suspected senior al-Qaeda
operative, thought to have masterminded the killing of a US diplomat in the
Jordanian capital on October 28, had fled to northern Iraq.

Ali Abu al-Ragheb said Jordan believed Ahmed al-Kalaylah, a Jordanian
fugitive better known as Abu Musaab al-Zarkawi, was now with the Ansar
al-Islam group, which controls a patch of rugged territory inside
Kurdish-held northern Iraq. He said the Al Ansar rebels were opposed by
governments in both Iran and Iraq.

Mr al-Zarkawi has been identified by Amman as a suspected senior lieutenant
of Osama bin Laden and the planner behind the shooting of Laurence Foley, a
US aid official.

"We believe he is somewhere in the northern part of Iraq on the borders with
Iran," said Mr al-Ragheb.

Mr al-Zarkawi is believed by intelligence sources to have received medical
treatment in Iraq earlier this year, and subsequently to have travelled
widely to prepare al-Qaeda cells for attacks in the Middle East. German
officials believe he may also have been planning attacks in Europe. He is
now regarded as an important figure in the emerging al-Qaeda structure.

[.....]


IRAQI/MIDDLE EAST RELATIONS

http://www.arabicnews.com/ansub/Daily/Day/021213/2002121327.html

*  MOUSSA: AL RECOGNIZES KUWAITI BITTERNESS, BUT IRAQ IS IN DANGER
Arabic News, 13th December

Arab League Secretary General Amr Moussa said on Wednesday the pan-Arab
organisation is trying to study details of Iraqi President Saddam Hussein's
latest address in an effort to contain -any more tensions.

"Kuwait has absolutely rejected the speech and AL understands this
bitterness and is taking it into account," said Moussa.

In statements to the Kuwaiti Al Rai Al Aam daily on Wednesday, Moussa said
Kuwait has negatively analyzed the speech, noting that the situation is
already tense and cannot tolerate any more tension.

Iraq is in danger "and we want to get it out of this cycle," said Moussa.

He voiced hope Baghdad would take a brave and decisive step by solving the
problem of the Kuwaiti captives.

"We will do our best to sort out the problem of captives which we recognise
how sensitive and important," added Moussa.

He pointed out that Russia rejects any military action against Iraq and
supports a political solution and calls for giving enough chance for the
inspectors.

All Arab states are against any military action against Iraq, said Moussa,
war is not inevitable but is very likely, said Moussa, noting that if it
became an inescapable all diplomatic efforts would have failed.

He said there is a number of Arabs (one Egyptian woman and six Jordanians)
with the international inspectors.


http://www.dailystar.com.lb/14_12_02/art25.asp

*  MISUNDERSTANDING HIGHLIGHTS US-KUWAITI TENSIONS
by Nicholas Blanford
Daily Star, Lebanon, 14th December

KUWAIT CITY, Kuwait: The Kuwaiti colonel was furious. He had taken strong
exception to American security staff wanting to search a busload of Kuwaiti
reporters prior to a Nuclear, Biological and Chemical (NBC) warfare drill at
the US Embassy on Friday, to which the media had been invited.

"This is unacceptable. They are not criminals," he yelled, believing they
were being singled out. Embarrassed embassy officials assured him that the
foreign journalists had been searched as well.

The incident was a minor, yet telling, example of the uncertainties that
exist beneath a veneer of close cooperation and mutual goodwill between the
United States and Kuwait.

With at least 12,000 American troops in Kuwait, many of them engaged in
military exercises near the Iraqi border, and with expectations of a war on
Baghdad growing ever stronger, the cozy relationship between Washington and
the Kuwaiti leadership is the subject of much debate among Kuwaitis.

Most Kuwaitis openly support the American troop presence - including the
Islamists, albeit with some reluctance. US military might is seen as a
guarantor against any future belligerence from neighboring Iraq.

"We dine with death if the Americans leave us," said Abdullah Bishara, who
heads the Diplomatic Center for Strategic Studies.

But there is genuine anger among Kuwaitis at Washington over failure to
resolve the festering conflict between Israel and the Palestinians. Kuwaitis
are also uneasy at deteriorating relations between the US and Saudi Arabia,
Kuwait's closest ally. Many are also suspicious of Washington' long-term
intentions for the region.

It is this unease that Iraqi President Saddam Hussein sought to exploit a
week ago when he delivered an unprecedented address to the Kuwaiti people.
Although the speech was billed as a public apology for Iraq' 1990 invasion,
Saddam praised recent attacks against US soldiers in Kuwait and urged the
Kuwaiti people to rise up against the "foreign occupiers."

The speech sparked outraged in Kuwait.

"Accusations and threats cannot be differentiated from the Iraqi schemes in
the summer of 1990," said Kuwait's foreign minister, Sheikh Saad Ahmad
al-Sabah.

The Iraqi leader's bid to cause public unrest appears to have backfired.

"It has made it very difficult for the hard-line conservatives to say
anything other than we are with the (Kuwaiti) leadership (on the American
presence). It is almost unthinkable for them to say anything else," a
Western diplomat said.

Nonetheless, the Kuwaiti government this week boosted already tight security
throughout the country. Under the new restrictions, private boats are banned
from Kuwait' territorial waters from sunset to sunrise and must stay at
least 2 miles (about 3 kilometers) from oil terminals and naval
installations. Photographing restricted areas is also forbidden under the
new measures. Kuwaitis are already denied access to about a quarter of the
country where US troops are holding exercises.

Yet it is isolated incidents by radicals inspired by the "Robin Hood" image
of Al-Qaeda leader Osama bin Laden rather than an organized "terrorist"
campaign that is unsettling Kuwaiti and US officials, diplomats and analysts
said.

There have been several shooting incidents since October targeting American
troops. In one, a US Marine was shot dead on Failaka Island off the Kuwaiti
coast by two gunmen. Last month, two American soldiers were shot and wounded
by a Kuwaiti policeman. Officials played down the incident, saying the
policeman was "insane."

The US Embassy warned American citizens to exercise "a high level of
security awareness" and "avoid apartment complexes in Kuwait where Americans
or other Westerners are known to live or visit in large numbers."

In October, a teenager was arrested near a shopping center and residential
high-rise with a bag of explosives. He told police that he was acting on
instructions received via the internet to attack Americans. Shortly
afterwards, an envelope containing a powder was dropped off at the same
complex. The powder turned out to be harmless but was regarded by the
embassy as a threatening action.

Potential acts of "terrorism" formed the scenario for Friday's NBC drill at
the embassy complex - a Sarin nerve gas attack at the front gate.

Such are the heightened security concerns in Kuwait that when more than 250
American troops were treated for food poisoning this week the initial
suspicion was that it was a "terrorist" act rather than "poor sanitary food
preparation."


http://www.gulf-news.com/Articles/news.asp?ArticleID=71243

*  SAUDI ARABIA, IRAQ RESTORE PHONE LINES
Gulf News, from Reuters, 16th December

Saudi Arabia has set up direct telephone lines with Iraq for the first time
since Iraq's 1990 invasion of Kuwait to facilitate bilateral trade, a Saudi
official said yesterday.

The decision, which went into effect on Saturday, is another sign of
improving relations between Riyadh and Baghdad which broke ties over Iraq's
invasion of Kuwait 12 years ago.

The unnamed official said the move followed a visit to Baghdad by a Saudi
trade delegation in October, when Riyadh took part in an Iraqi trade fair
for the first time in 12 years.


http://www.timesonline.co.uk/article/0,,3-515271,00.html

*  SYRIAN PIPELINE HELPS IRAQ EVADE UN OIL SANCTIONS
by Michael Evans
The Times, 16th December

SYRIA has expanded its oil-smuggling operation with Iraq by opening a second
pipeline between the two countries, according to intelligence based on
recent satellite photographs.

Iraqi crude oil is reported to be flowing at the rate of 60,000 barrels a
day through the new pipeline, which connects two oilfields close to the
Iraqi-Syrian border  Ain Zalah in northern Iraq and Suwaydiyah in northeast
Syria.

Imports of Iraqi oil are illegal unless approved by the United Nations'
oil-for-food programme agreed after the 1991 Gulf War. The increase in oil
imports from Iraq to Syria provides further evidence of closer ties between
Damascus and Baghdad, after years of strained relations.

President Assad of Syria admitted last week that a pipeline, reopened in
November 2000, had been used for sending oil from Iraq to Syria. But he
insisted in an interview with The Times that the oil-flow had been agreed in
order to test the pipeline, which had been closed for many years.

However, the flow of oil from Iraq to Syria through the two pipelines 
amounting to an estimated total of more than 200,000 barrels a day  has
enabled Damascus to increase its own oil exports by around 50 per cent.

Oil industry sources said that Syrian oil exports this year had suddenly
risen from about 300,000 to 450,000 barrels a day. Syria has its own
oilfields, which produce about 520,000 barrels a day.

The issue of illegal oil sales from Iraq to Syria is expected to be raised
by Tony Blair when he meets the Syrian leader today, although a Foreign
Office official said that Mr Assad was well aware of the Government's
disapproval of the pipeline deals.

The sales are helping to boost funds for the Iraqi regime as it prepares for
a possible war with an American-led coalition next year. Sixty thousand
barrels a day over a period of 12 months is estimated to be worth about $500
million (330 million). Iraq has 112 billion barrels of proven oil reserves.
Its oil resources are the world's second-largest, after Saudi Arabia.

The main oil-smuggling route is through the pipeline that runs from Kirkuk
in northern Iraq to Banias in Syria. This was reactivated two years ago, in
spite of the UN sanctions. The 150,000 barrels of oil exported through the
Kirkuk-Banias pipeline are sold at much less than the international price.
The new pipeline began operating two months ago, according to Middle Eastern
reports. It eventually feeds into the Syrian domestic pipeline grid. Oil
industry sources said that Syria tended to use the Iraqi oil for domestic
purposes. This freed Syria's own crude oil for export. The 50 per cent rise
in Syrian oil exports has occurred despite there being no significant
increase in Syria's own oil production.

Ian Brodie, from the journal Oil and Energy Trends, said that it was
difficult to be precise about Syria's oil exports. But it was clear that in
the middle of this year there was a significant rise, due to Iraqi oil
imports.

A report in The Sunday Telegraph yesterday said that crates of air defence
equipment and spare parts had been smuggled into Iraq from Syria in the past
few weeks. Defence experts were quoted as saying that the parts would help
the Iraqis to improve the range and effectiveness of their Sam-6
anti-aircraft missiles.

Terrorism links

Although Syria has not been directly implicated in acts of terrorism since
1986, it supports terrorist groups such as Hamas, Hezbollah and Palestinian
Islamic Jihad and allows them to maintain offices in Damascus.

The US State Department says that Damascus is the primary transit point for
Iranian supplied weapons to Hezbollah.

The Israelis claim that President Assad has met Sheikh Hassan Nasrallah, the
leader of Hezbollah.


http://www.dailystar.com.lb/16_12_02/art38.asp

*  FULEIHAN INAUGURATES IRAQI TRADE EXHIBITION
Daily Star, Lebanon, 16th December

Economy and Trade Minister Basil Fuleihan and his Iraqi counterpart,
Mohammed Mahdi Saleh, inaugurated Saturday the Third Exhibition of Iraqi
Products at the Futuroscope Exhibition Center in Sin al-Fil.

Following a tour of the center, Saleh praised efforts to facilitate the
exhibition, which was the first following the signing of a bilateral free
trade agreement.

Saleh said that annual Lebanese exhibitions in Iraq were important channels
for introducing Lebanese products and bolstering trade.

Fuleihan said he hoped the "exchange of products and exhibitions" would be
an important element in boosting revenues in both markets.

The Lebanese Industrialists Association later held a banquet for the Iraqi
minister.


http://hoovnews.hoovers.com/fp.asp?layout=displaynews&doc_id=NR20021216670.2
_d8f30000d1fa7ad1

*  IRAQI LEADER SENDS 40 TRUCKLOADS OF FERTILIZER TO PALESTINIAN PEASANTS
Hoover's (Financial Times), 16th December
from Republic of Iraq Radio, Baghdad, in Arabic 1500 gmt 16 Dec 02

In implementation of President Saddam Husayn's directives to support our
people in Palestine, a convoy of 40 truckloads of fertilizers left [for the
Palestinian territories] today. The convoy is a gift from President Saddam
Husayn to the Palestinian peasants.


http://www.theage.com.au/articles/2002/12/16/1039656340510.html

*  BAGHDAD PUTS OUT THE WELCOME RUG FOR BANKS
The Age (Australia), 17th December

If you knock down barriers, the banks might come. But perhaps not, Jad
Mouawad reports. Foreigners still face obstacles to doing business in Iraq.

Iraq, under economic sanctions for 11 years and faced with the threat of
attack by the US, is trying to attract foreign banks to the country.

That's the message Issam Racheed Hwaish, governor of the Iraqi Central Bank,
laid out at the weekend as he hosted the country's second international
banking conference. About 50 bankers from Jordan, Lebanon, Syria and Egypt
attended.

"Iraq is a socialist country and the state controls the economy," Dr Hwaish,
wearing military fatigues and accompanied by two armed assistants, said in
an interview. "But we've decided to allow the private sector to work, within
limitations of course. In time, these limitations will be eased."

Iraq wants foreign banks to help process the import of food, medicine and
consumer products. Still, there are obstacles to doing business with Iraq.
The United Nations supervises oil sales and controls what goods come into
the country to make sure they're not used to produce weapons. The country
also faces an embargo on international financial transactions.

"We work strictly within the confines of the UN system," said Antoine Habib,
an executive at Bank of Beirut, a midsize Lebanese bank, who was attending
the conference at Baghdad's Al-Racheed Hotel. "Working outside of the UN
would entail too many risks. It's not worth it."

Foreign banks deal with Iraq only through France's BNP Paribas, which runs
Iraq's escrow UN account in New York.

Dr Hwaish said he had received requests from Arab banks to open branches in
Iraq. He said foreign banks would be present in Iraq next year for the first
time in decades.

Ali Abdallah Jammal, the chairman of Jammal Trust Bank of Lebanon, said that
was why he decided to come despite the threats. "Iraq is an important
market. In the future, we hope we'll be able to have commercial relations
with this country."

Still, most foreign banks may be reluctant to come. UN inspectors have been
in the country for the past three weeks looking for weapons of mass
destruction. The Iraqi Government says it has no more illegal weapons. The
US has said it would use force if President Saddam Hussein refused to
cooperate with UN mandates.

Dr Hwaish said the political situation was hurting the economy. "How can you
build your economy when you don't know what tomorrow holds?" asked Dr
Hwaish. "The threat of war has a worse impact on the economy than the
sanctions themselves."

The government opened its banking sector to local private banks 10 years ago
to spur business and help offset the impact of sanctions imposed after the
Persian Gulf War.

Iraq nationalised its banking system in 1964, entrusting the sector to two
state-owned banks: Rafideen Bank and Rasheed Bank. They became major
financial institutions in the region, with branches throughout the Middle
East. Today, Iraq's 17 private banks only work in Iraq.

"The experiment is still very young and the private banks' situation is
tough because they aren't allowed to do business abroad," said Wasef Azar,
the chief executive of Jordan National Bank. "They still have a lot to learn
about banking techniques and modern services."


http://www.arabicnews.com/ansub/Daily/Day/021217/2002121714.html

*  IRAQ, IRAN AGREE ON OPENING A BORDER CROSSING FOR HUMANITARIAN STUFFS
Arabic News, 17th December

The UN said yesterday that Iraq and Iran agreed to open a border crossing in
order to permit Baghdad to import goods, according to the UN humanitarian
program "oil for food."

The border crossing between the two former enemies which had a war which
lasted from 1980 until 1988; is situated in Khousrafi area in Mondharya in
the Iraqi Dayal district.

The UN in New York said that the crossing will be opened by the beginning of
February and will be run by UN members to be chosen by the UN "to
investigate and make sure that goods arrive in Baghdad are according to the
'oil for food program.'"


http://www.arabicnews.com/ansub/Daily/Day/021217/2002121716.html

*  JORDAN: HUMAN SHIELDS TO PROTECT THE IRAQI ESTABLISHMENTS
Arabic News, 17th December

The Jordanian national committee in defense of Iraq, stemmed from the
Jordanian opposition said it had decided to form a human shield campaign and
honorary lists for Jordanian citizens who desire to join the International
human shields around the Iraqi establishments.

The chairman of the committee, Hakam al-Fayez, said that the campaign aims
at registering the names of 100,000 volunteers from various areas in Jordan
for this purpose and that the registration by Jordanian citizens who desire
to join this campaign will continue until January 17, 2003.

The Jordanian national committee in defense of Iraq was established after
the second Gulf war and includes representatives for various Jordanian
forces.


http://www.bahraintribune.com/middle.asp?Art_No=9592

*  TURKEY READY TO SEND 70,000 TROOPS INTO IRAQ
Bahrain Tribune, 18th December

DIYARBAKIR, Turkey (AP): Turkey has plans to send tens of thousands of
soldiers into northern Iraq if the United States attacks through the north,
senior intelligence and military sources said yesterday.

The Turkish mission would be aimed at preventing a Kurdish state and
stopping a possible flood of refugees, the sources said, speaking on
customary condition of anonymity.

Some 4,000 Turkish troops, including engineers, have already been sent to
the rugged, mountainous border region so that Turkish troops could quickly
be rushed into northern Iraq if there is a conflict, said the sources, who
have been part of the Turkish planning.

US officials have apparently asked for Turkish permission to send tens of
thousands of US soldiers through Turkey into Iraq if there is a war. Turkish
military officials have said that if there is an attack through the north,
Turkey plans on sending its own soldiers into the region.

The daily Hurriyet newspaper reported yeesterday that Turkey is planning to
deploy between 65,000 to 70,000 troops in northern Iraq if there is a
massive US assault from the north.

A senior intelligence official, speaking on condition of anonymity,
confirmed that report. He said that Turkey is especially concerned that if
Iraq disintegrates, Iraqi Kurds could seize the northern cities of Mosul and
Kirkuk. Mosul is a key regional centre and Kirkuk is home to major oil
fields. Control of those cities would make the Kurds a significant regional
power. It is likely that Turkish soldiers in northern Iraq would secure the
area, but would not take part in fighting against Iraqi troops.

There has been no immediate reaction from Washington to such reports, which
have filled Turkish newspapers during the past few days.

Turkish military sources said that if any US attack is from the south and
there is no major attack from the north, Turkey would beef up its forces in
the north, but the troop moves would be significantly less then if there
were a northern attack.

The northern region is controlled by Iraqi Kurds, who live in an autonomous
zone in northern Iraq. Turkey is concerned that if Saddam Hussein is ousted,
the Kurds might declare independence. Southern Turkey is overwhelmingly
Kurdish and Turkey fears that Kurdish independence in Iraq could inspire
Kurds in Turkey.


http://www.cleveland.com/newsflash/news/index.ssf?/newsflash/get_story.ssf?/
cgi
free/getstory_ssf.cgi?a0755_BC_Lebanon-Yemen&&news&newsflash-international

*  YEMEN'S PRESIDENT SAYS AMERICA WILL LOSE ANTI-TERROR COALITION IN WAR ON
IRAQ
by Sam F. Ghattas
The Plain Dealer, 19th December

BEIRUT, Lebanon (AP) -- The president of Yemen, a partner in America's
campaign against al-Qaida, warned Thursday that if the United States attacks
Iraq it risks losing international support in its anti-terror war and
sympathy over the Sept. 11 attacks.

President Ali Abdullah Saleh said Iraq has been cooperating with weapons
inspectors and the United Nations.

"Nothing justifies a strike," against Iraq, he told Abu Dhabi's all-news
Arabic satellite channel.

Saleh, who was in Moscow for talks on Iraq before the Lebanon stop, said
"the United States needs to preserve the international coalition to combat
terrorism."

"It could lose this coalition and the international sympathy it received as
a result of the Sept. 11 terrorist attacks as well as the attacks on the
Cole and the embassy in Nairobi," Saleh told the Qatari-based Al-Jazeera
television in Moscow.

About 3,000 people were killed in the attacks in the United States; 17 U.S.
sailors were killed in the Oct. 12, 2000, Cole attack; and 219 people died
in the bombing in Nairobi in 1988. Osama bin Laden, whose ancestral homeland
is Yemen, has been blamed for the three attacks.

In Moscow, Saleh and Russian President Vladimir Putin said the crisis in
Iraq should be resolved through the United Nations.

After talks with Lebanese President Emile Lahoud, Saleh blamed Israel's
"criminal actions" against Palestinians for regional tension.

Many Arab countries have sided with Washington in its war against al-Qaida.
But even America's closest allies have been apprehensive about a possible
war on Iraq and have criticized the Bush administration for its support of
Israel.

Yemen is a hotbed for al-Qaida and other Muslim extremist militants who take
refuge in the country's tribal strongholds.

Since the Sept. 11 attacks, Saleh placed Islamic schools accused of teaching
hate under government control. Hundreds of foreigners suspected of links to
extremists have been deported and hundreds of Muslim militants have been
arrested.

In November, a CIA-operated Predator drone fired a missile that killed bin
Laden's top lieutenant in Yemen, Qaed Salim Sinan al-Harethi, and five other
al-Qaida suspects in Yemen.




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