Twin Threats of Protests and Cessation Set Stage for Change in MidEast and North Africa

By James M. Dorsey

A rare wave of protests across the Arab world against widespread economic mismanagement, unemployment, corruption and lack of civil liberties as well as the probable partition of Sudan potentially set the stage for the redrawing of the political map of the Middle East and North Africa.

The protests and referendum likely to establish oil-rich southern Sudan as an independent state spotlight the failure of most Middle Eastern and North African regimes to provide economic prospects for their populations and guarantee security and equal rights for religious and ethnic minorities. A spate of recent deadly attacks targeting Christians in Iraq and Egypt has further focused attention on inflamed religious and ethnic tensions and the region’s lack of minority rights.

Middle Eastern governments fear, according to officials and Western diplomats, that an independent southern Sudan will fuel nationalist aspirations of rebels in Darfur, secessionists in southern Yemen; Shiite rebels in northern Yemen; non-Islamist controlled parts of Somalia; Kurds in Iraq, Iran, Syria and Turkey; Berbers across North Africa and Azerbaijanis in northern Iran. The region’s military and security dominated regimes also worry that the protests will further embolden their populations to vent boiling anger and pent-up frustration with long-standing authoritarian, corrupt and incompetent rule. Last week’s warning by the UN Food and Agriculture Organization (FAO) that record food prices are likely to increase even more as a result of erratic global weather patterns threatens to further tempers and tensions.

Several Arab states have moved to curb commodity prices in a bid to prevent the riots from spreading to their countries. Libya abolished taxes and custom duties on wheat-based products, rice, vegetable oil, sugar and infant milk. Morocco has begun subsidizing imports to ensure that the price of soft milling wheat does not rise in tunes with hikes on world markets.

Jordanian King Abdullah in a bid to prevent an escalation of mounting tension between Palestinians and East Bank Jordanians this week ordered his government to reduce prices of commodities, particularly rice and sugar, freeze plans to raise public transportation fees and accelerate initiation of job creation projects. The order came as Jordanian trade unions called for nationwide demonstrations on Friday to demand better living standards and the resignation of Prime Minister Samir Rifai. Jordan’s Islamist opposition said it had yet to decide whether it would support the protest, but warned that price hikes would spark “an unprecedented explosion” similar to the turmoil in Tunisia and Algeria.

“The government is seeking to contain mounting public resentment. Events in Tunisia and Algeria are forcing it to act because Jordanians have seen that protests produce results,” says Mohammed Masri, an analyst at the University of Jordan’s Center for Strategic Studies. Masri was referring to Algeria’s weekend decision to reduce commodity prices in response to sustained daily protests that left at least three people dead, the Tunisian government’s inability to quell a month of demonstrations in which so far up to 50 people are believed to have been killed and Tunisian President Zine el Abidine Ben Ali’s bid this week to meet some of the protestor’s demands by announcing that he would not again run for office when his term ends in 2014, firing his interior minister, promising to release detained demonstrators and launching an investigation into corruption. “Price hikes are certain to increase anger at the government’s policies,” said Zaki Bani Rsheid, a Jordanian Islamic Action Front spokesman.

While the demonstrations in Tunisia, Algeria and Egypt as well as recent soccer riots in Jordan and Iran and human rights-related protests in Kuwait are unlikely to immediately overturn governments, they signal a growing popular refusal across the region to continue to accept the status quo. Even in Saudi Arabia where public protests are particularly rare, unemployed teachers are publicly protesting government job creation policies. Tunisian trade unions have said they would continue their protests despite Ben Ali’s announced concessions.

The hardening of the region’s social and economic battle lines creates stark choices for both Middle Eastern and Western governments. Desperate to cling to power, Middle Eastern regimes are likely to increase repression coupled with window dressing measures that create the impression of responding to widespread discontent rather than opt for real political, economic and social reform. This week’s concessions by Ben Ali come after the president’s efforts to squash the protests by charging that the protesters were being manipulated by foreign terrorists failed. Ben Ali’s assertion contrasted starkly with the fact that Al Qaeda’s North African affiliate, Al Qaeda in the Islamic Maghreb (AQIM), has been conspicuously silent about the ongoing turmoil in its theater of operations and the fact that the protests were void of any Islamist tint.

Western diplomats say that the fact that a majority of the dead in Tunisia were killed by security forces after the Obama administration, the European Union and the United Nations called on Tunisia to exercise restraint in the use of force and respect fundamental freedoms point to a sense of alarm within the government that makes it less susceptible to US and European pressure. “It’s inconceivable that they are not worried that this is the beginning of the end,” one diplomat said.

On a visit to Qatar this week, US Secretary of State Hillary Clinton nonetheless signaled that the United States and its European allies may be less persistent in their long-standing preference for stability in the Middle East and North Africa rather than democracy that could initially bring Islamic and more nationalist forces to power – a policy that has fueled anti-Western sentiment among large segments of the region’s population.

Addressing the Forum for the Future launched in 2004 by the G-8 group of industrial nations as a way to promote growth of nongovernmental civil group, Clinton bluntly challenged Middle Eastern leaders to open their political systems and economies and warned that "the region's foundations are sinking into the sand." Clinton said the region's governments need to share power with civic and volunteer groups to tackle issues like exploding populations, stagnant economies and declining natural resources. Pointing to unemployment rates of 20% and up, the secretary said "people have grown tired of corrupt institutions and a stagnant political order" and are demanding reforms, including eradication of corruption.

UAE Central Bank Orders Hike Saad and Gosaibi Provisions

The Central Bank of the United Arab Emirates has required UAE lenders with exposure to feuding Al Saad Group and Ahmad Hamad al Gosaibi & Brothers to increase their loan loss provisions from 50 to 80 percent. The requirement issued in a circular to all UAE lenders is designed to protect UAE financial institutions from a worst case fallout of the dispute between the two groups.

"All these provisions must be by the end of 2010 and the Central Bank's approval of the banks' annual audited results are conditional on the allocation of those provisions," UAE Central Bank Governor Sultan Nasser al-Suweidi said in the circular.

The circular comes a year after the Central Bank ordered lenders to raise provisions related to Al Saad and Al Ghosaibi to 50 percent. It follows press reports that Saad had offered Kuwaiti lenders a settlement based on payment of $0.20 for each dollar the group owes. The press reports said lenders were negotiating for up to $0.40 on the dollar.

The Central Bank circular asked banks to maintain their 100 percent provisions Saad Group’s Bahrain-based Awal Bank and Al Gosaibi’s The International Banking Corp (TIBC) that were taken over by the Bahraini central bank last year. The difference is provisioning ratios reflects the Central Bank’s assessment of exposure by UAE lenders to those entities and the likelihood that lenders will be able to recover their outstanding loans.

Defaults on loans by Awal Bank TIBC set off a bitter legal battle on three continents between the two groups that are related by Saad Group’s Maan al Sanea’s marriage to a daughter of the Al-Ghosaibi family. Al-Gosaibi has accused Al-Sanea in court filings on three continents of siphoning off $10 billion from his in-laws.

Al Gosaibi is seeking to recover $9.2 billion in lawsuits in the Cayman Islands against al-Sanea and Awal subsidiaries. Court proceedings involving Awal are also ongoing in the United States, Bahrain, Kuwait, Saudi Arabia, Switzerland and Britain.

A Chapter 11 filing by Awal in New York has suggested that the bank may file for liquidation in Bahrain. According to its court filing, Awal has assets valued at most at $100 million and liabilities of more than $1 billion. Under Bahrain law, the administrator has until the summer of 2011 to decide whether to liquidate Awal or return it to its owners.

Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal is beyond salvation and should be liquidated. In its filing, Awal asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.

Judicial Reform in Saudi Arabia: A Battle of the Fatwas

Qantara


A spate of recent religious opinions and court rulings ranging from the bizarre to endorsement of mutilation issued by prominent Saudi sheikhs and judges highlight the difficulty King Abdullah faces in clamping down on fatwas and codifying the kingdom's largely unwritten Islamic legal regulations. James M. Dorsey reports

In response to disputed religious opinions and court rulings in Saudi Arabia, king Abdullah has intervened repeatedly in recent months to ensure that none of the more outrageous legal opinions and rulings were implemented and has curtailed media access of their authors.

In doing so, Abdullah appears to be gaining the upper hand in his battle to push through sweeping legal reform and codification of Saudi law needed to meet World Trade Organization and human rights standards, encourage foreign investment, standardize legal practice and grant courts enforcement powers.

Restructuring of the court system

Abdullah recently won a major victory when the kingdom's top religious body endorsed his reform and codification proposals. Abdullah also decreed that only members of the Council of Senior Islamic Scholars were authorized to issue fatwas in a bid to halt religious rulings that embarrass the kingdom. Abdullah last year removed Sheikh Saleh al Luheidan from his post as head of the Supreme Judicial Council because the ultraconservative cleric was obstructing implementation of the king's proposed restructuring of the court system.

Lawyers and analysts say the recent spate of controversial fatwas constitute an attempt to thwart Abdullah's efforts by his opponents within the royal family and conservative clerics who fear that they could undermine Saudi Arabia's puritan interpretation of Islamic law as well as the independence of judges by making them adhere to written rules and regulations. "The traditional establishment is by nature against these reforms. So it's going to take time to implement them," said Riyadh-based lawyer Ibrahim al-Modaimeegh.

Opposition to the principle of retribution

In the latest ruling sparking international concern, Saudi judge Sheikh Saud Al-Yousef ordered a man to be paralyzed in retribution for injuries he allegedly caused with a meat cleaver during a fight two years before the verdict. Applying the principle of 'an eye for an eye, a tooth for a tooth', the judge ruled that the man should be injured at the same place on his spinal cord to cause identical crippling damage to what he inflicted on his victim, 22-year-old Abdul-Aziz al-Mitairy.

Al-Mitairy had petitioned the court in the town of Tabuk to replace its sentencing of his attacker to seven months in prison with an equivalent punishment in accordance with the Islamic principle of qisas, or retribution. Past Saudi applications of qisas have involved eye-gouging, tooth extraction, and death in cases involving murder. Two Saudi hospitals, including Riyadh's prestigious King Faisal Specialist Hospital and Research Center, rejected the judge's request that they implement his ruling.

In a statement condemning the ruling, Amnesty International said another hospital had advised the judge that it was medically possible to administer to the perpetrator an injury identical to the one that he caused. "Under international human rights law, the use of this sentence would constitute a violation of the absolute prohibition of torture and other cruel, inhuman or degrading treatment or punishment," the statement said, suggesting that the court instead imprison, fine or flog the condemned man.

In response, officials say Abdullah persuaded Al-Yousef to deny that he had seriously considered ordering the mutilation. Al Riyadh newspaper quoted the judge as saying that "the proceedings in this case are still pending and no verdict had been issued in that regard." Al-Yousef said the court had queried hospitals and other authorities about surgical paralysis in order to convince the plaintiff that it would be impossible to carry out such a medical procedure. "The plaintiff was demanding punishment of the attacker, and the judicial ruling in this case only includes the plaintiff's eligibility for blood money," Al-Yousef said.

The hot and curious issue of gender mixing

At about the same time, Saudi authorities pulled on Abdullah's instructions the plug on the daily radio program of Sheikh Abdel Mohsen Obeikan, a cleric and royal court adviser who earlier this year earned notoriety by decreeing that women could give men breast milk to avoid illicit gender mixing. "The man should take the milk, but not directly from the breast of the woman," Obeikan was quoted. "He should drink it and then becomes a relative of the family, a fact that allows him to come in contact with the women without breaking Islam's rules about mixing." Islamic tradition stipulates that breastfeeding establishes a degree of maternal bond, even if a woman breast feeds a child who is not her own.

In a separate incident, the kingdom's most senior religious scholar, Grand Mufti Sheikh Abdul Aziz Al-Asheik, ordered a preacher to shut up after he issued a fatwa calling for a boycott of the Panda supermarket chain because it employs women as cashiers. The fatwa forced the chain to reassign 11 of its 16 female cashiers who were part of a pilot project to employ females in a country where women are prevented from working in gender mixed environments, according to Panda spokesman Tarik Ismail.

The preacher, Sheikh Yousuf Ahmad, known for his strident opposition to gender mixing, had earlier suggested that only Muslim maids could work in Saudi homes. He also called for the Grand Mosque in Mecca, Islam's holiest site and the world's largest mosque, to be demolished and rebuilt to ensure segregation between the sexes in the shrine.

The Islamic Affairs Ministry, in a further curtailing of clerical power, ordered clerics to keep their Friday sermons short and smart. Azam Shewair, a ministry official, warned clerics they would face punishment if they didn't trim their speeches, including forced training or having their paychecks docked. Shewair said clergymen needed to keep in mind that elderly or sick worshipers may not be able to sit and listen to hour-long speeches filled with their words of wisdom.

New sources of legitimacy

A debate on the ministerial edict in the Saudi Gazette suggests a generational divide among Saudi religious scholars with older clerics displaying contempt for their younger colleagues whom they dismiss as a bunch of uneducated rabble who need to be cut down to size. "The impact of the sermon is not measured by its length but by the eloquent, concise and precise wording," said Saleh Humaid, a ranking cleric. "Imams should refrain from flowery and bombastic language and delve directly into the core of their sermon."

Another scholar accused some clergy of copying and pasting Friday sermons from books or the Internet and reading them out loud without even understanding what they're saying. Yet others suggested that clerics needed to improve their writing skills. "Some of them elaborate on the topic by repeating themselves and going around in circles," Ahmad Mawrai, a Saudi professor, told the Gazette. "In many cases they jump from one topic to another. This is why their sermons are tedious and boring."

The debate over the rules that govern the issuing of fatwas reflects King Abdullah's recognition and a growing body of public opinion that Wahhabisim, the kingdom's puritan version of Islam, hinders the development of a modern state capable of competing in the 21st century and catering to people's needs. Five years ago, bizarre and obscure fatwas would have been seriously debated rather than ridiculed and condemned.

Many Saudi clergymen have yet to recognize that Abdullah's legal reform offers them an opportunity to consolidate their influence. Yet, they seem more intent on scoring own goals that undermine their public credibility and ultimately could signal the decline of clerical power in Saudi Arabia. In doing so, the clergy could be opening the door for the House of Saud to identify new sources of legitimacy that go beyond their historical reliance on Wahhabism.

World Cup 2022: A Middle East Game Changer?

By James M. Dorsey

With its winning of the bid to host the 2022 FIFA World Cup, Qatar may face both its greatest challenge and biggest opportunity in positioning itself as a maverick regional peacemaker and agent of change.

Soccer constitutes for Middle Eastern regimes a double-edged sword. Only soccer commands the kind of deep-seated emotion evoked by Islam. And in a world of predominantly repressive regimes, soccer together with Islam provides the only public space for pent-up anger and frustration. Managing the national, ethnic, religious and social fault lines that soccer in the Middle East highlights could make cooling down football stadia in temperatures of 50 degrees Celsius the least of Qatar’s worries.

A look at the Gulf Cup that ended in Aden on Sunday as well as Middle Eastern soccer’s walk up to this year’s World Cup in South Africa tells all. To many residents of southern Yemen, which united with the north in 1990, the Gulf Cup highlighted the very reasons why southerners support cessation. It also highlighted the effect of political control of the game by regimes bent on retaining power. To southerners, Yemen’s national team represented the country’s most powerful government-aligned tribes rather than the nation. That sense was reinforced by the fact that southerners were virtually excluded from participation in the organization of the cup.

The picture is no better elsewhere in the Middle East where spectators in Lebanon have been barred from soccer games since the 2005 assassination of Prime Minister Rafik Hariri; Palestinians can’t compete because of Israeli travel restrictions; Iran and Iraq’s performance has been hampered by political interference; players on Egypt’s national team have to prove not only their soccer skills but also their religious devotion; and Saudi players struggle to maintain international standards because the government discourages players from joining foreign clubs. The world’s most violent derby between Cairo archrivals Al Ahly and Zamalek constitutes an epic struggle over nationalism, class and escapism. Women’s soccer is a continuous fight for its existence in a chauvinist, male dominated world in which women playing the game is at best controversial and at worst blasphemous.

If anyone can rise to the challenge a World Cup in the Middle East poses, it is Qatar, a maverick oil-rich Gulf state that maintains close ties to Islamic radicals while hosting a US military base and has rewritten the Middle East’s heavily controlled media landscape with Al Jazeera’s often no-holds barred reporting. Qatar’s successful bid could prove to be with FIFA President Sepp Blatter’s help the monkey wrench that forces Middle Eastern rulers to recognize opportunities offered by sports to manage the region's many fault lines.

The Middle East is riper than ever for a contribution by Blatter, who has successfully imposed his will on notoriously intransigent Middle Eastern leaders seeking to control the game. Take Middle East peace for example. Blatter could engineer Israel’s return to playing World Cup qualifying games in the Asian Football Confederation (AFC) against Middle Eastern teams rather than as it does against European squads in UEFA since the Arabs four decades ago forced its ouster from the AFC.

International tennis has paved the way for Blatter to force the issue. Three Israeli tennis players appeared this year at the ATP World Tour and World Tennis Association tournaments in Qatar and the United Arab Emirates despite the two countries’ formal ban on sports encounters with Israel and Israeli passport holders crossing their borders.

If Israel drew for example Iran, Syria, Saudi Arabia, Lebanon, Yemen or Iraq, governments would be hard pressed to prevent their teams from playing. Stopping their teams would cost their squads valuable points and reduce, if not eliminate, their chances of reaching the Asian and World Cup finals.

The teams would face censure from FIFA, which in turn could spark riots as soccer did in Tehran in 1998 and 2001. So deep-seated is soccer passion that governments would be acting at their own peril and would likely conclude that they have no alternative but to allow their teams to play Israel. By doing so, they would effectively recognize the Jewish state and offer Middle Eastern soccer fans a picture of Israelis that differs substantially from widespread preconceptions.

Saudi Arabia Prepares to Hand Power to a Younger Generation

These are uncertain times for Saudi Arabia, the world’s largest oil producer and a key ally in the struggle against militant Islam. The conservative kingdom is balancing on the cuff of a change in leadership that threatens to introduce a period of volatility as the health of its most senior, octogenarian royals falters. At risk, is continued reform designed to curb the sharp ends of the kingdom’s puritan interpretation of Islam and create greater economic and social prospects and opportunity.

Fuelling the uncertainty is the fact that understanding the inner workings of the ruling royal family is akin to the art of reading tea leaves. That art is in high demand with 86-year old reformist King Abdullah recuperating in New York from an operation to relieve haematoma resulting from a prolapsed disc. Abdullah’s illness is not life-threatening, but has raised the spectre of a Saudi Arabia ruled by a succession of short-lived monarchs. The king’s medical treatment comes weeks after he appointed his son as commander of the National Guard, the Bedouin force responsible for the royal family’s security, and the return to the kingdom of Prince Bandar bin Sultan, the former Saudi ambassador to the United States who is a consummate dealmaker. Taken together, these developments suggest that Saudi Arabia’s ruling family may be preparing for a gradual transfer of power to its next generation.

The stakes for Saudi Arabia as well as its western allies are high. Concern focuses on whether Abdullah’s reforms intended to defeat militant Islam, liberalize the economy, reduce unemployment, fight corruption, limit the power of the conservative, religious establishment and reform the judiciary have taken sufficient root to survive his rule. The reforms challenge basic tenants of the powerful clergy’s puritan interpretation of Islam that coupled with the lack of economic opportunity creates a breeding ground for religious militants. Saud Arabia’s recent announcement of the arrest of 149 primarily Saudi members of Al Qaeda and revelations that the curriculum of some 40 Saudi schools in Britain and Ireland preach hatred, racism and incitement to violence underlines the urgency of continued reform in the kingdom.

In an absolute monarchy in which passes down the line of aging sons of King Abdulaziz, the kingdom’s founder, Abdullah’s most probable immediate successors are grappling with health issues of their own. 84-year old Crown Prince and Defence Minister Prince Sultan, returned to Saudi Arabia on the eve of Abdullah’s departure from a two-year absence due to illness. Their younger brother, Prince Nayef, the 76 year-old interior minister who is third in line, may not be healthy enough to fully take over the reins of power when his time comes. Nayef, moreover, is widely viewed as a hard line and conservative, raising questions about whether he would pursue reform with the same zeal as Abdullah.

Tension between Sultan and Nayef could well erupt in a post-Abdullah Saudi Arabia as the kingdom prepares to hand the reins to the next generation, Abdulaziz’s grandsons who may not be as amenable as their elders to compromise in the competition for power. Abdullah’s creation in 2006 of an Allegiance Council made up of Abdulaziz’s surviving sons and grandsons to confirm the nomination of crown princes was intended to formally involve the next generation in the succession process. It could well serve as a platform to fuel their ambitions.

The creation of the council signalled that Saudi leaders were envisioning the day on which power would pass to their sons. Abdullah reinforced this view by in November appointing Prince Mutaib, his 57-year old son to replace him as commander of the National Guard. In a country in which senior prince’s run their ministries as family fiefdoms, the appointment was widely seen as Abdullah emphasizing that it was time to start turning over power to the next generation and possibly kick starting changes in anticipation of a changing of the guard while at the same time reducing the risk of a power struggle within the family.

In this scenario, Prince Sultan would step down as defence minister in favour of Khalid bin Sultan, his deputy and son who gained prominence as commander of Arab forces during the 1991 expulsion of Iraq from Kuwait. Critics hold Khalid responsible for tactical mistakes that caused higher than necessary Saudi casualties in fighting last year against rebels in Yemeni tribal areas bordering on the kingdom. Further change would involve the succession of ailing Foreign Minister Prince Saud al-Faisal by his brother, Prince Turki al-Faisal, the former head of Saudi intelligence who served as ambassador to Britain and then the United States. Similarly, Prince Nayef would is likely succeeded as interior minister by Prince Mohammed, his son and deputy minister who has earned praise for his leadership in battling the Islamists.

The envisioned changes leave open the question of who will ultimately emerge as the monarch to steer Saudi Arabia through continued reform designed to eradicate the grounds on which the militants feed and ensure that the economy can compete in the 21st century. For much of the past decade, reformers and Western officials saw the 74-year old long-standing governor of Riyadh, Prince Salman, a full brother of Prince Nayef, as their preferred candidate. Recently, however, Prince Khalid al-Faisal, the 69-year old governor of Mecca, an accomplished poet and painter known for his friendship with Britain’s Prince Charles and his successful administration of the province of Asir, home to several of the perpetrators of the 9/11 attacks on New York and Washington, appears to be emerging as a compromise candidate.

All of this amounts to little more than reading tea leaves. The good news, however, is that Saudi Arabia’s most powerful princes appear determined to reduce the risk of volatility by seeking to ensure a smooth generational transition that would allow the kingdom to push ahead with the reforms needed to create a more open, competitive economy capable of offering Saudis prospects that compete with the dire alternative put forward by Islamist militants.

Awal Bank Asks US Court For Deadline Extension

Charles Russell LLP, the Bahrain-appointed administrator of Awal Bank BSC, a subsidiary of Saudi Arabia’s embattled Saad Group owned by Saudi billionaire Maan al-Sanea, has asked a U.S. court for an extension of the deadline to file schedules of assets and liabilities and a statement of financial affairs in the bank’s application for Chapter 11 bankruptcy protection.

The request follows rejection last week by the New York court of Awal Bank’s initial application for limited Chapter 11 because the troubled bank was asking to be allowed to keep information confidential and to be exempted from the need to create a U.S. creditors committee. At the same time, U.S. Bankruptcy Judge Allan Gropper kept the door open for Awal to repetition the court provided it the bank agreed to establish such a committee. Gropper said he would allow more time to assess the information provided give creditors the opportunity for creditors to make representations.

In the request for an extension, Charles Russell said it needed additional time to canvass creditors’ views and would only once it had done so decide whether it wished to further pursue Chapter 11 protection. The Office of the United States Trustee indicated that it had no objection to Charles Russell request for an extension of the deadline.

Awal initially applied last month for Chapter 11 protection saying that it would help the bank recover “avoidable” transfers out of its estate prior to the bankruptcy. The Chapter 11 filing came little more than a year after Awal had filed for Chapter 15 bankruptcy in the same court. Chapter 15 bankruptcy seeks to protect companies from U.S. litigation while they reorganize in a non-U.S. court.

Defaults on loans last year by Awal Bank as well as Saudi conglomerate, Ahmad Hamad Al-Gosaibi & Brothers Co. set off a bitter legal battle on three continents between the two groups that are related by al Sanea’s marriage to a daughter of the Al-Ghosaibi family. Al-Gosaibi has accused Al-Sanea in court filings on three continents of siphoning off $10 billion from his in-laws.

Al-Gosaibi is seeking to recover $9.2 billion in lawsuits in the Cayman Islands against al-Sanea and Awal subsidiaries. The lawsuits were stayed after al-Sanea challenged the Cayman court’s jurisdiction, and an appeal of that decision is set to be heard in November. In July, New York State Supreme Judge Hon. Richard B. Lowe dismissed a lawsuit Al-Gosaibi had filed against Awal and al- Sanea, on grounds of that court being an improper forum. Court proceedings involving Awal are also ongoing in Bahrain, Kuwait, Saudi Arabia, Switzerland and Britain.

Awal’s original Chapter 11 court filing suggested that it would it file a reorganization plan or opt for liquidation in Bahrain rather than the United States. Even though the court papers kept reorganization on the table, the Chapter 11 filing suggests that liquidation is the more likely option. According to its court filing, Awal has assets valued at most at $100 million and liabilities of more than $1 billion. Under Bahrain law, the administrator has until the summer of next year to decide whether to liquidate Awal or return it to its owners.

Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal is beyond salvation and should be liquidated. In its filing, Awal asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.

New York Court Rejects Awal Bank Petition for Chapter 11 Bankruptcy

A New York bankruptcy court has rejected a petition for limited Chapter 11 bankruptcy protection by Bahrain-based Awal Bank, a subsidiary of Saudi Arabia’s embattled Saad Group owned by Saudi billionaire Maan al-Sanea. The court’s decision offers temporary relief to creditors who stood to be left high and dry if the court had ruled in favor of Awal’s request, which would have allowed the troubled bank to keep information confidential and would have exempted it from creating a U.S. creditors committee

U.S. Bankruptcy Judge Allan Gropper however kept the door open for Awal to repetition the court provided it the bank agreed to establish such a committee. Groper told David Molton of Brown Rudnick LLP, the lawyers for Awal’s Bahrain Central Bank appointed administrator, Charles Russel LLP, that the committee was needed as a watchdog because US courts do not appoint administrators.

Groper suggested the request be resubmitted by Nov. 1, the deadline for the U.S. Trustee, which oversees U.S. bankruptcies, to seek candidates for a creditors committee. Alisdair Haythornthwaite of Bell Pottinger Middle East (UAE), speaking on behalf of Charles Russel said the administrator intended to follow the judge’s advice and reapply for Chapter 11 protection. Awal had argued that a U.S. creditors committee would duplicate proceedings in the Cayman Islands and the Middle East involving the bank’s largest creditors.

Awal Bank’s request for Chapter 11 came little more than a year after it had filed for Chapter 15 bankruptcy in the same court. Chapter 15 bankruptcy seeks to protect companies from U.S. litigation while they reorganize in a non-U.S. court. Molton told the court that Awal Bank needed Chapter 11 protection to help it recover what it called “avoidable” transfers out of the estate prior to bankruptcy.

Defaults on loans last year by Awal Bank as well as Saudi conglomerate, Ahmad Hamad Al-Gosaibi & Brothers Co. set off a bitter legal battle on three continents between the two groups that are related by al Sanea’s marriage to a daughter of the Ghosaibi family. Gosaibi has accused Al-Sanea in court filings on three continents of siphoning off $10 billion from his in-laws.

Awal’s Chapter 11 court filing suggested that it would it file a reorganization plan or opt for liquidation in Bahrain rather than the United States. Even though the court papers kept reorganization on the table, the Chapter 11 filing suggests that liquidation is the more likely option. According to its court filing, Awal has assets valued at most at $100 million and liabilities of more than $1 billion. Under Bahrain law, the administrator has until the summer of next year to decide whether to liquidate Awal or return it to its owners.

Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal is beyond salvation and should be liquidated. In its filing, Awal asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.

Al-Gosaibi is seeking to recover $9.2 billion in lawsuits in the Cayman Islands against al-Sanea and Awal subsidiaries. The lawsuits were stayed after al-Sanea challenged the Cayman court’s jurisdiction, and an appeal of that decision is set to be heard in November. In July, New York State Supreme Judge Hon. Richard B. Lowe dismissed a lawsuit Al-Gosaibi had filed against Awal and al- Sanea, on grounds of that court being an improper forum. Court proceedings involving Awal are also ongoing in Bahrain, Kuwait, Saudi Arabia, Switzerland and Britain.

Saad-owned Bahrain Bank Files for Bankruptcy

In a move that is likely to leave creditors high and dry, Awal Bank BSC, a Bahrain-based subsidiary of Saudi Arabia’s embattled Saad group, has filed for Chapter 11 bankruptcy in a New York bankruptcy court. The filing comes little more than a year after the bank sought US court protection from US creditors and is in line with recommendations made in a report by Ernst & Young.

According to its court filing, Awal Bank has assets valued at most at $100 million and liabilities of more than $1 billion. Bahrain’s central bank last summer appointed an administrator for Awal Bank, owned by Saudi billionaire Maan al-Sanea, after it had defaulted on loans in a sequence of defaults that has sparked a bitter legal battle across continents between Al Sanea’s Saad Group and Saudi conglomerate Ahmad Hamad Al-Gosaibi & Brothers Co. Under Bahrain law, the Bahrain central Bank-appointed administrator has until the summer of next year to decide whether to liquidate Awal bank or return it to its owners.

Assuming that the bankruptcy filing was made with the consent of the Bahrain Central Bank, the filing suggests that Bahrain has decided that Awal Bank is beyond salvation and should be liquidated. In its filing, Awal Bank asserts that after payment of the administrators and other immediate expenses, it will not be able to compensate its unsecured creditors, who number somewhere between 60 and 100 and include: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, AlGosaibi Money Exchange, Bank of Montreal, Bayerische Hypo-und Vereinsbank, Bayerische Landesbank, Boubyan Bank, Calyon Corporate and Investment Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar, Commerzbank, Commonwealth Bank of Australia, Fortis Bank, Gulf International Bank, HSBC, HSH Nordbank AG, JP Morgan, Kuwait Finance House and The International Banking Corporation.

Militant Islam gains ground in the Balkans

By James M. Dorsey

Deutsche Welle

It's feared that some Muslim charities could encourage Wahhabism
A recent online music video featuring Macedonians praising Osama bin Laden has fueled fears that Southeastern Europe could be emerging as the latest breeding ground for homegrown Islamist militants.

It has also focused attention on Muslim charities active in Bosnia, Kosovo, Serbia, Albania, Macedonia and European Union member Bulgaria since the wars in former Yugoslavia in the mid-1990s. Many of those charities are funded by oil-rich Saudi Arabia and propagate Wahhabism - the kingdom's austere and puritan interpretation of Islam.

A majority of Wahhabis favor peaceful proselytizing of Islam while Saudi King Abdullah has been seeking to soften Wahhabi practices as part of his reforms in the kingdom. Militant groups such as Osama bin Laden's al-Qaeda, the Taliban and jihadists in Somalia have however embraced significant elements of Wahhabism as part of their ideology.

Jasmin Merdan, a young Bosnian who wrote a book after disassociating himself from Wahhabis groups in Bosnia, warned that "they express their convictions with violence, introduce anarchy in mosques and preach intolerance." Women in the Albanian city of Skadar have reportedly started covering their heads or wearing the niqab, a full body covering that hides everything but the eyes, in newly found religiosity.

The video posted on YouTube is one of several produced by home grown jihadists in the Balkans and circulating in the region. "Oh Osama, annihilate the American army. Oh Osama, raise the Muslims’ honor," a group of Macedonian men chant in Albanian on the video. "In September 2001 you conquered a power. We all pray for you." Similar songs calling on Southeastern European Muslims to join the jihad have been produced in Bosnian.

Governments and security forces fear that that increased Wahhabi activity will produce committed jihadis that could destabilize already fragile nations in southeastern Europe and, in the case of Bulgaria - where one sixth of the country's 7.6 million people is Muslim - produce a pool of jihadists whose EU passports would grant them easy access to Western Europe and allow them to blend into society.
Bulgaria seen as potential breeding ground

Bulgaria is the only EU member whose Muslim population are not recent immigrants. Most Bulgarian Muslims like those elsewhere in the Balkans are descendants of ethnic Turks who arrived during five centuries of Ottoman rule.

Three ethnic Albanian brothers from Macedonia were convicted to life in prison in 2008 on charges of plotting to attack the US Army's Fort Dix military base in New Jersey. A fourth member of the group from Kosovo was sentenced to five years in jail.

Across the Balkans, minority Wahhabi groups seek to convert mainstream Islam to their more militant interpretation through the operation of cultural centers, mosques, schools and at times by battling for control of majority Muslim organizations and community-owned property. A majority of the region's Muslims are secular and analysts caution against overstating the Wahhabi threat.
"It should not be ignored, but neither should it be exaggerated," said Hajrudin Somun a former Bosnian ambassador to Turkey and history professor at Sarajevo's Philip Noel-Baker International University.

The analysts say militant Islam is gaining ground on the fringe of a more general return to religion in the Balkans. Several thousand Orthodox Christian Bulgarians demonstrated in Sofia recently demanding that religious instruction be made compulsory in schools - a demand supported by mainstream Muslim organizations.
Muslim organizations are believed to have spent large amounts of money over the last decade to build some 150 new mosques and educational centers in predominantly Orthodox Bulgaria. A minority are believed to promote Wahhabism.

Analysts say that radical Islam has gained ground in southern and northeastern Bulgaria where militant Islamists, according to former Bulgarian chief mufti Nedim Gendzhev, are seeking to create a "fundamentalist triangle" in areas of Bosnia, Macedonia and Bulgaria's Western Rhodope mountains.

Fears of increasing radicalism

Bulgarian authorities last year arrested a mayor and a village teacher in the south of the country on charges of preaching radical Islam. In 2003, authorities shut down several Islamic centers because they were financed by Saudi-funded Muslim groups believed to have links to militant Islamic organizations and "to prevent terrorists getting a foothold in Bulgaria." Some analysts estimate that 3,000 young Muslims have graduated from militant schools still operating in Bulgaria; it was not immediately clear what they went on to do following their graduation.

Relations are tense between Muslims and Serbs in BosniaThe threat posed by the Wahhabis is a major bone of contention in tense relations between Muslims and Serbs in Bosnia, which so far has successfully neutralized Wahhabi influence by controlling the appointment of imams in mosques and teachers at Islamic educational institutions and employing law enforcement.

Some Bosnian Wahhabis, estimated to number 3,000, are former foreign fighters who married Bosnian women and stayed in the country after the Bosnian war that ended in 1995. Bosnia recently stepped up its fight against militancy and organized crime to meet an EU requirement for visa-free travel for Bosnians and closer ties with the bloc.

In early September, Bosnian police uncovered a cache of weapons and detained a third suspect as part of their inquiry into a June bomb attack that killed one policeman and injured six others. The attack on a police station in the town of Bugojno was one of the most serious security incidents in Bosnia. Police arrested the suspected mastermind and an aide shortly after the blast.

Bosnia tries to crackdown on militants

Boris Grubesic, a spokesman for the Bosnian prosecutor's office, told reporters in mid-September that prosecutors were investigating several people from Bugojno and Gornja Maoca on suspicion of Wahhabi ties, terrorism and human trafficking.

In February, Bosnian and EU police raided Gornja Maoca and arrested seven men described as Wahhabis because of their beards and shortened trousers. Police said they were detained for suspected illegal possession of arms and threatening the country's "territorial integrity, constitutional order and provoking inter-ethnic and religious hatred."

Gornja Maoca was home to some 30 families who lived by strict Shariah laws, organized schooling in Arabic for their children outside the state system and opposed the primacy of Bosnia's mainstream Islamic Community. Nusret Imamovic, the town's self-proclaimed Wahhabi leader, endorsed suicide attacks on the group's Bosnian language website, saying they should be launched only in "exceptional circumstances." The site features statements by al-Qaeda and Islamic groups fighting in the Caucasus and celebrates suicide bombers as joyful Muslims.

Serbian officials say 12 alleged Wahhabis convicted last year to prison terms of up to 13 years for planning terrorist attacks, including on the US Embassy in Belgrade, had close ties to their brethren in Gornja Maoca. One of the convicted, Adnan Hot, said during the trial that Imamovic was one of only three Muslim leaders that he followed. Four other Wahhabis were sentenced in a separate case to jail terms of up to eight years on charges of planning to bomb a football stadium in the southern Serbian town of Novi Pazar.

In Macedonia, Suleyman Rexhepim Rexhepi, head of the official Islamic Religious Community (IVZ), recently called on the government and the international community to crack down on increasingly influential Wahabbi groups. Rexhepi is locked into a bitter battle with Ramadan Ramadani, the imam of the Isa Beg mosque in Skopje, that has caused a rift in the country's Muslim community.

Ramadani accuses Rexhep of financial msmangement and is seeking his ouster. He organized a petition signed by thousands of his followers supporting his bid for leadership of the community after Rexhepi banned him from organizing prayers. Ramadani denies that Wahhabis are active among Macedonian Muslims who account for roughly one quarter of the population as well as allegations that the pro-bin Laden music video was played in mosques he controls.

A Ramadani associate, radical Kosovo imam Sefket Krasnici, shocked Macedonians, when he recently denounced Mother Teresa, a native of Skopje whom many consider a saint, during a sermon in the Macedonian capital. "She belongs in the middle of Hell because she did not believe in Allah, the prophet and the Koran ... Even if she believed in God her belief was incomplete, with deficiencies. God does not accept such worship," Krasnici said.

US House Committee Investigate Gosaibi and Maena

A US House Committee on Financial Services inquiry will this week focus on the multi-billion dollar dispute between al Gosaibi business family of Saudi Arabia or their former associate, Maan al Sanea, the head of the Saudi conglomerate the Saad Group as part of an investigation of money laundering by Middle Eastern and US financial institutions.

In a hearing scheduled for September 28, the committee will hear evidence from witnesses concerning the movement of US$1 trillion of funds between Middle East financial institutions and US banks over a six-year period ending last year. That evidence is not expected to involve links to finance of terrorism or illegal activity such as drugs or human trafficking, but will include transactions of Al Gosaibi and Al Sanea. The dispute between the two Saudi groups erupted when institutions of both entities defaulted on payments amid accusations of forgery, fraud and theft.

One focus of the inquiry will be to what degree institutions like Bank of America complied with the obligation for “red flag” notifications of transactions requiring a suspicious activity report (SAR) by banks or regulators. The witnesses appearing before the committee include regulators, officials, financiers and New York lawyer Eric Lawyers wto represents the al Gosaibi family. Al Sanea’s spokesman declined to comment on the House hearing, but reiterated denials that the group had been involved.

The hearing could revive US legal interest in the dispute between the Saudi groups. A New York and Cayman Islands court ruled in July that the dispute should be settled by Saudi authorities rather than in a foreign jurisdiction.

A Saudi committee that includes business, financial and political and political leaders has been looking into the dispute for the past year, but has yet to propose a solution. Global creditors are trying to recover $20 billion owed by the two groups as a result of the defaults.

Balkans Become Breeding Ground For Militant Islam

Southeastern Europe is emerging as the latest breeding ground for homegrown Islamist militants in the West as a result of missionary work by Saudi-inspired Wahhabis, followers of the strict, puritan interpretation of Islam adopted by oil-rich Saudi Arabia and violently promoted by Osama Bin Laden, the Taliban and jihadists in Somalia.

Muslim charities, many of them with Saudi funding or Wahhabist leanings, have been active in Bosnia, Kosovo, Serbia, Albania, Macedonia and EU member Bulgaria since the wars in former Yugoslavia in the mid-1990s. A recent music online video featuring a group of Macedonians praising Bin Laden in Albanian has focused attention on what Muslim authorities in the region and intelligence agencies say is an alarming trend that threatens not only fragile stability in the region but could produce a pool of terrorists with easy access to the rest of Europe. Similar songs have also emerged in Bosnian.

Beyond building a large number of mosques across southeastern Europe, Wahhabis have also founded a string of schools that lie beyond the control of local authorities. Concern about the rise of militant Islam in southeastern Europe also focuses attention on the broader impact of Saudi-funded Wahhabi missionary work. While Saudi King Abdullah has been seeking to gradually reform Wahhabi practice in the kingdom, militants often exploit its ascetic version of Islam to create a feeding ground for radical Islam.

Analysts say unregulated Wahhabi schools in Bulgaria have produced some 3,000 graduates in the last 20 years. The threat posed by the Wahhabis has become a major bone of contention in the tense relations between Muslims and Serbs in Bosnia, which so far has been successful in neutralizing Wahhabi influence by controlling the appointment of imams in mosques and teachers at Islamic educational institutions.

A Serbian court last year sentenced 12 militants from the tense region of Sandzak to prison for planning terrorist attacks, including an attack on the US embassy in Belgrade. Moderates and Wahhabis are battling for control of Macedonia’s Islamic Religious Community, one of the country’s major Islamic organizations.

Donors To Establish Development Fund For Yemen in Fight Against Al Qaeda

In the clearest recognition yet that Islamist militants in Yemen cannot be defeated by military means alone, the United States and its allies are set to create an international fund for development of the impoverished, conflict-ridden Arab nation. Donor countries, including the US, Britain, France and the Gulf states, are expected to launch the fund at a meeting in New York on September 24.

The fund comes as the US military is seeking $1.2 billion to strengthen Yemeni security forces over a five-year period. State Department counterterrorism coordinator Daniel Benjamin said earlier this month that the US sees the fight against Al Qaeda in the Arabian Peninsula (AQAP), Al Qaeda’s affiliate in the Gulf, as a priority. The US has this year allocated $300 million to Yemen, half of which, according to Benjamin, targets the “incubators for extremism” – poverty, weak governance and corruption.

The donors are also expected to discuss ways to stimulate a national dialogue between Yemen’s political forces in a bid to reduce nepotism, make its political system more inclusive, resolve an intermittent insurgency in the north and a growing separatist movement in the south and stem AQAP’s increasing strength.

To a large extent, change in Yemen will however depend on a change in Saudi policy towards Yemen. In many ways, Saudi Arabia, like the regime of Yemeni President Ali Abdullah Salih itself, is as much part of the solution as it is part of the solution. The Saudi-led Gulf Cooperation Council (GCC), which groups the region’s six oil-rich states has already taken steps to build closer ties with Yemen. The GCC and Saudi Arabia in particular, could ease Yemen’s economic pain by agreeing on the free movement of labor in the region. This would reduce unemployment, increase the flow of remittances and stem illegal border crossings.

To counter the inward looking, xenophobic, conservative environment on which AQAP feeds, Saudi Arabia will however also have to strengthen the Yemeni government by halting the buying of tribal fealty at the expense of the government and controlling Saudi-funded missionary work that has significantly increased the influence of a militant, ascetic interpretation of Islam among Yemenis as well as among the large number of Somali refugees in the country.

 Saudi Legal Reform Put To The Test

A spate of recent religious opinions and court rulings ranging from the bizarre to endorsement of mutilation issued by prominent Saudi sheikhs and judges highlight the difficulties King Abdullah is encountering in clamping down on fatwas and his efforts to reform and codify the kingdom’s largely unwritten Islamic legal regulations that govern the kingdom’s criminal, civil and family courts. To be fair, few, if any, of the more outrageous Saudi legal opinions and rulings have recently been put into practice.

In the latest ruling sparking international concern, Saudi judge Sheikh Saud Al-Yousef this month ordered a man to be paralyzed in retribution for injuries he allegedly caused with a meat cleaver during a fight two years ago. Applying the principle of ‘an eye for an eye, a tooth for a tooth,’ the judge ruled that the man should be injured at the same place on his spinal cord to cause identical crippling damage to what he inflicted on his victim 22-year-old Abdul-Aziz al-Mitairy. The man was originally sentenced to seven months in prison by a court in the northwestern town of Tabuk, but his victim subsequently petitioned the court to impose an equivalent punishment on his attacker in accordance with principle of qisas, retribution, embedded in Islamic law. Past Saudi applications of qisas have involved eye-gouging, tooth extraction, and death in cases involving murder. Two Saudi hospitals, including Riyadh’s prestigious King Faisal Specialist Hospital and Research Center, rejected on ethical grounds the judge’s request that they implement his ruling.

In a statement condemning the ruling, Amnesty International said another hospital had advised the judge that it was medically possible to administer to the perpetrator an injury identical to the one that he caused. “Under international human rights law, the use of this sentence would constitute a violation of the absolute prohibition of torture and other cruel, inhuman or degrading treatment or punishment,” the statement quoted Amnesty’s Middle East and North Africa Acting Director Hassiba Hadj Sahraoui. Sahraoui suggested the court imprison, fine or flog the condemned man.

In an apparent effort to counter international criticism, the judge and a senior Saudi official attempted to downplay the judge's request. The official told CNN that paralysis was never considered as a punishment in the case. Al Riyadh newspaper quoted the judge as saying that "The proceedings in this case are still pending and no verdict had been issued in that regards." Al-Yousef said the court had queried a number of hospitals and other authorities about surgical paralysis in order to convince the plaintiff about the impossibility of carrying out such a medical procedure."The plaintiff was demanding punishment of the attacker, and the judicial ruling in this case only includes the plaintiff's eligibility for blood money," he said.

Earlier this month, Saudi authorities pulled the plug on the daily radio program of Sheikh Abdel Mohsen Obeikan, a cleric and royal court adviser who earlier this year earned notoriety by decreeing that women could give men breast milk to avoid illicit gender mixing. Saudi Arabia bans women from mixin with men who are no their guardians defined as their husband or first line relatives such as father or brothers. The decision followed a controversial royal decree by Abdullah authorizing only members of the Council of Senior Islamic Scholars to issue fatwas in a bid to put a halt to religious rulings that embarrass the kingdom.

The Tabuk judge ordered the mutilation after Abdullah issued his decree. Among other rulings this year, Sheikh Yousuf Ahmad, a lecturer at the Imam Mohammad bin Saud University in Riyadh, suggested that only Muslim maids could work in Saudi homes. He also called for the Grand Mosque in Mecca, Islam's holiest site and the world's largest mosque, to be demolished and rebuilt to ensure segregation between the sexes in the shrine. Saudi clergy are debating women’s right to engage in competitive sports with the kingdom under increased pressure from the International Olympic Committee to ease restrictions.

Abdullah recently won a major victory when the kingdom’s top religious body endorsed his proposed codification of Saudi law needed to meet World Trade Organization and human rights standards, encourage foreign investment, standardize legal practice and grant courts enforcement powers. Lawyers and analysts caution however that codification may take several years given conservative fears that it could undermine Saudi Arabia’s puritan interpretation of Islamic law as well as the independence of judges by making them adhere to written rules and regulations.

Testing the Saudi winds of reform, Suliman al-Reshoudi, a 73-year old former judge imprisoned without trial for the past three years ago on vague allegations related to his legal support of democracy advocates, has opened a court case to force the Interior Ministry and security services to either formally charge or release him. The case, the first of its kind in Saudi Arabia, is based on a yet to be tested legal offering protection to detainees introduced after Al-Reshoudi’s arrest in 2007.

Soccer vs. Islam: Football and Militant Islam Compete For Hearts and Minds

By James M. Dorsey

Nowhere does football enthusiasm involve a greater act of courage and defiance than in the war-ravaged, football-mad Arab nation of Somalia. With large chunks of the country controlled by al Qaeda-linked al-Shabab jihadists, football is often a question of life or death. Players and enthusiasts risk execution, arrest and torture -- and not just in Somalia. More than 70 people in neighboring Uganda were killed earlier this month when al-Shabab suicide bombers hit popular spots where fans were watching the World Cup final between Spain and the Netherlands.

The bombings, the first major attacks by al-Shabab beyond Somalia’s borders, sought to persuade Uganda to withdraw its 3,000 troops from the African Union peacekeeping force in Somalia and reconsider its plans to send reinforcements. But by targeting football, they also highlighted militant Islam’s love-hate relationship with the game -- a useful bonding and recruitment tool capable of competing with militant Islamists for hearts and minds.

Backed by radical Saudi clerics, some jihadists denounce football as a satanic game designed to take the faithful away from devotion to Islam. Somali jihadists see football as competition for recruits in the world’s foremost failed state where unemployment is rampant and youth have little to look forward to. Youngsters are rustled from the pitch and forced to join the ranks of the jihadis. Jihadists have repeatedly warned the Somali football federation to halt organization of tournaments. In the country’s only football stadium in the partly jihadi-controlled capital Mogadishu, Somalia’s national team clears the pitch of bullets and bodies before training sessions. Threats forced private broadcaster Shabelle to move its operations to Mogadishu’s African Union-protected airport from where it broadcast the World Cup opening ceremony.

In the Middle East and North Africa, a part of the world pockmarked by repressive regimes, football competes with political Islam as a venue to release frustration against authoritarian leaders. As a result, some Islamists seek to co-opt the game while others aim to suppress it. In a controversial religious ruling in 2005, militant Saudi clerics condemned football as an infidel invention and redrafted its International Federation of Association Football (FIFA) rules to differentiate the game from what they described as ‘the heretics.’ The ruling did things like ban the words “foul,” “goal,” “penalty,” and clothes like shorts and T-shirts, and ordered players to spit on anyone who scored a goal. “All fun is bootless except the playing of a man with his wife, his son and his horse,” said Sheikh Abu Ishaaq al Huweni-Huweni. “Thus, if someone sits in front of the television to watch football…he will be committing bootless fun…We have to be a serious nation, not a playing nation,” he said citing the hadith, the words and deeds of the Prophet Muhammad, but ignoring the prophet’s endorsement of physical exercise.

The fatwa was condemned by more mainstream Saudi clerics, who recognize that Saudis are football-mad and passionate about their national team, which historically has fared well in FIFA competitions. Nevertheless, Saudi Arabia’s religious police, afraid that believers would forget their daily prayers during the World Cup, rolled out mobile mosques on trucks and prayer mats in front of popular cafes where men gathered to watch matches. More sensitive is the issue of women’s sports, including football. With Saudi Arabia threatened with suspension by the International Olympic Committee if it does not this year create frameworks for women’s sports, debate is raging among the country’s powerful clergy and in the media. Physical education classes are banned in state-run Saudi girls schools and female athletes are not allowed to participate in the Olympics. Women's games and marathons are often canceled if the clergy gets wind of them. Clerics argue that women’s sports are corrupting and satanic and would spread decadence. Nonetheless, women have quietly been establishing their own football and other sports teams with the backing of members of the ruling Al Saud family and under the wings of hospitals or ‘health club.’

Football, despite the condemnation by militant Islam’s most radical fringe, has served Islamists well. Foreigners who fought in Afghanistan organized football matches after the Soviet withdrawal to maintain contact. The perpetrators of the 2004 Madrid subway bombings played football together and a number of Hamas’ suicide bombers trace their roots to the same football club in Hebron. “A reliable predictor of whether or not someone joins the Jihad is being a member of an action-oriented group of friends,” Scholar Scott Atran told the U.S. Senate Armed Services Committee in March. “It's surprising how many soccer buddies join together.”

Osama Bin Laden is said to enjoy playing center forward. Hamas Prime Minister Ismail Haniyeh played defense for one of the Gaza’s local clubs. Haniyeh recently employed football in efforts to heal the rift between Hamas and their secular rivals in Fatah. When Hamas seized control of Gaza in 2007, it also took over the administration of all Gaza clubs, prompting a rupture with the West Bank-based, Fatah-dominated Palestinian Football Association (PFA) that halted association football in the strip. In a tentative step earlier this year toward Palestinian reconciliation, Hamas and Fatah agreed to jointly administer the Gaza football federation. This allowed for competitive matches in Gaza for the first time in three years. For Gazans, football matches constitute a rare opportunity in a politically restrictive society to release pent-up emotions.

Nowhere is soccer more of a political football than in relations between the Egyptian government and the Islamist opposition. Football passions exploded late last year with violent clashes between Egyptian and Algerian fans on three continents and -- for the first time since the 1969 football war between Honduras and El Salvador -- brought the world to the brink of a soccer-inspired conflict. Egypt recalled its ambassador to Algeria while Algeria slapped Egyptian-owned Orascom telecom’s Algerian operation with a tax bill for more than half a billion dollars, prompting Libyan leader Col. Moammer Gadaffi to intervene to prevent the dispute from escalating. The Egyptian government was quick to fan the flames and ride the tide of emotion in a rare opportunity to bolster its image at the expense of the Islamists. “The violence expressed years of depression of a population that constantly witnesses social, financial and political failure,” said Ahmed al-Aqabawi, a professor at Azhar University. “Soccer is their only ray of light.”

Palestine: A New Beginning?

US Vice President Joe Biden warned last year that then President-elect Barack Obama would early in his term be tested by a foreign policy crisis. The crisis came quicker than even Biden may have expected and tests the very tenants of US foreign policy. The war in Gaza poses a multitude of challenges. How Obama responds will influence the president's ambition to restore US credibility, particularly in the Muslim world as well as efforts to resolve the Israeli Palestinian conflict.

• Converting the halt to fighting in Gaza into a sustainable, more permanent arrangement. The stakes for the Obama administration are high. Obama this week signaled his understanding that failure to engage would embolden both Israeli and Palestinian hardliners and reinforce widespread perceptions in the Arab and Muslim world that the US continues to uncritically support Israel and therefore is not an evenhanded mediator. He will have to underline his sincerity by investing significant political capital to push for a two-state solution.
  

  
   

  The current ceasefire is likely to hold for some time as Israel focuses on its Feb. 9 election and Hamas seeks to exploit its survival of the Israeli onslaught and empathy for the Palestinian plight generated by the images of the carnage to ensure that it is granted a seat at the negotiating table on terms more favorable to the Palestinians. The appointment of Senator George J. Mitchell as Middle East envoy warrants the assumption that the Obama administration may seek, however cautiously, to come to grips with the post-Gaza war reality of the Middle East. Mitchell demonstrated diplomatic agility as well as toughness and fairness in his successful mediation of an end to the conflict in Northern Ireland by bringing the Irish Republican Army and Protestant militias to the negotiating table. Already, one major American Jewish leader has expressed concern that Mitchell may be too fair and evenhanded and not sufficiently pro-Israeli.
  

  
   

  The United States has a critical role to play in defining the terms of a more durable ceasefire, monitoring its implementation and providing incentives for both sides to stick to it. To do so, Hamas will have to be a party to any arrangement made. A failure of efforts to reunite Palestinian ranks could complicate efforts to stabilize the ceasefire. Prospects for reunification are dim given that the Palestine Authority of President Mahmoud Abbas has by its own admission been marginalized by the Gaza war. Hamas, despite playing lip service to Palestinian unity, may conclude that Abbas has been so discredited that reunification no longer is an option. Speaking at a news conference this week, Abu Ubaida, the spokesman for Hamas' military wing, the Martyr Izz al Din al Qassam Brigades, asserted that Hamas rather than Abbas' Palestine Liberation Organization (PLO) had become "the legitimate representative of the Palestinian people".
  

  
   

  The Obama administration as well its partners in the Quartet – the European Union and the United Nations who refuse direct talks with Hamas – can work indirectly with Hamas through Egypt and Russia, the fourth party to the Quartet, which maintains relations with Hamas, to bring it further into the fold by initially focusing on humanitarian and security issues. A likely Israeli demand that Hamas release Gilad Shalit, the Israeli soldier captured in 2006, as part of any deal to lift the blockade of Gaza, offers another opportunity. A further, more significant avenue to create needed incentives would be a quid pro quid that is difficult to swallow for Israelis and Palestinians: a commitment by Palestinian security forces must commit to doing everything in their power to prevent attacks on Israel in exchange for an Israeli halt settlement construction on the West Bank and support of humanitarian relief and economic development in the West Bank and Gaza.
  

  
   

  Speaking at the State Department on Thursday, Obama reiterated conditions for direct talks with Hamas: recognition of Israel's right to exist, renunciation of violence and adherence to past agreements made by Palestinian authorities. He stressed that aid to Gaza would be channeled through the Palestine Authority in a bid to revive its credibility as the only acceptable interlocutor for the international community. Obama did however say that Gaza's border crossings need to be open to support aid and commerce, a demand being touted by Hamas as a condition for perpetuation of the Gaza ceasefire that will be welcomed by ordinary Gazans and exploited by Hamas as more evidence of the success of its steadfastness.
  

  
   

  Middle East peacemaking has a track record for finding ways for parties who refuse to talk to one another to sit at the same table without necessarily acknowledging the fact. Richard Murphy, a Council of Foreign Relations fellow and former Assistant Secretary of State for the Middle East and US ambassador to Saudi Arabia, draws a comparison to the Palestine Liberation Organization (PLO)'s participation in the 1992 Madrid peace conference at a time at which Israel still refused contact with the Palestinian movement. "There is the same strong Israeli opposition to (Hamas) as there was toward the PLO. But Israel found a way to deal with the PLO. Israeli Prime Minister [Yitzhak] Shamir with great unhappiness put up with the PLO presence within the Jordanian delegation at the Madrid conference in 1992," Murphy recalls.
  

  
   

• Addressing the political fallout of the Gaza war in the Arab and Muslim world. President Obama and a prominent Saudi on Thursday expressed two dramatically different views of the future of US relations with pro-US Arab governments. In his remarks at the State Department, Obama stressed Israel's right to defend itself, expressed empathy for Palestinian suffering and reiterated the need for a peace process leading to the establishment of a Palestinian state alongside Israel. He called on Arab states to act on their peace plan drafted by Saudi King Abdullah, endorsed by the Arab League and embraced by Israeli leaders as a basis for negotiation by normalizing their relations with Israel.
  

  
   

  Obama's remarks contrasted starkly with a warning to the United States by Saudi Prince Turki al-Faisal, chairman of the King Faisal Centre for Research and Islamic Studies and a former director of Saudi intelligence and ambassador to Britain and the United States. Obama may be getting off with Saudi Arabia on the wrong foot. Saudi King Abdullah was not listed among the Middle Eastern leaders Obama was reported to have phoned nor did he include the kingdom on his swing through the region last July. Al-Faisal warned in his article for the Financial Times that "unless the new US administration takes forceful steps to prevent any further suffering and slaughter of Palestinians, the peace process, the US-Saudi relationship and the stability of the region are at risk… (Saudi) King Abdullah spoke for the entire Arab and Muslim world when he said at the Arab summit in Kuwait that although the Arab peace initiative was on the table, it would not remain there for long. Much of the world shares these sentiments and any Arab government that negotiated with the Israelis today would be rightly condemned by its citizens. If the US wants to continue playing a leadership role in the Middle East and keep its strategic alliances intact – especially its "special relationship" with Saudi Arabia – it will have to drastically revise its policies vis a vis Israel and Palestine.
  

  
   

  "The incoming US administration will be inheriting a "basket full of snakes" in the region, there are things that can be done to help calm them down. First, President Barack Obama must address the disaster in Gaza and its causes. Inevitably, he will condemn Hamas's firing of rockets at Israel. When he does that, he should also condemn Israel's atrocities against the Palestinians and support a UN resolution to that effect; forcefully condemn the Israeli actions that led to this conflict, from settlement building in the West Bank to the blockade of Gaza and the targeted killings and arbitrary arrests of Palestinians; declare America's intention to work for a Middle East free of weapons of mass destruction, with a security umbrella for countries that sign up and sanctions for those that do not; call for an immediate withdrawal of Israeli forces from Shab'ah Farms in Lebanon; encourage Israeli-Syrian negotiations for peace; and support a UN resolution guaranteeing Iraq's territorial integrity," Al Faisal said.
  

  
   

  In a stunning revelation, Al-Faisal suggested the major divide in the Middle East between pro-US Arab governments such as Saudi Arabia and Israel on the one hand and Iran and Syria on the other hand may become a casualty of the Gaza war. Al-Faisal disclosed that Iranian President Mahmoud Ahmadi-Nejad last week in a letter to King Abdullah recognized Saudi Arabia as the leader of the Arab and Muslim worlds and called on him to take a more confrontational role over "this obvious atrocity and killing of your own children" in Gaza. "The communiqué is significant because the de facto recognition of the kingdom's primacy from one of its most ardent foes reveals the extent that the war has united an entire region, both Shia and Sunni…So far, the kingdom has resisted these calls, but every day this restraint becomes more difficult to maintain…Eventually, the kingdom will not be able to prevent its citizens from joining the worldwide revolt against Israel. Today, every Saudi is a Gazan, and we remember well the words of our late King Faisal: "I hope you will forgive my outpouring of emotions, but when I think that our Holy Mosque in Jerusalem is being invaded and desecrated, I ask God that if I am unable to undertake Holy Jihad, then I should not live a moment more," Al Faisal said.
  

  
   

  By contrast to Saudi Arabia, King Abdullah of Jordan may be charting a very different course. The monarch replaced in early January Muhammad Dahabi, who as head of the General Intelligence Department (GID) had initiated a dialogue with Hamas, as well as his top aides with Muhammad Raqqad, The move signaled a return to the GID focusing on its core business: internal and external threats to the kingdom." "Raqqad's appointment may be an indication that the government has decided to end its brief flirtation with Hamas and turn inward to protect its domestic front. The suppression of demonstrations around the Israeli embassy in Amman and the severe beating of the Amman-based correspondent of al-Jazeera satellite TV who earlier had spearheaded an anti-Israeli campaign are evidence of this policy change. Ultimately, it is unclear how this security change will affect the issue of civil liberties and reform in Jordan. There is little doubt that the new GID director is a professional who will confront the Hamas challenge in the kingdom. It is less certain, however, whether Raqqad envisions how to balance the requirements of security with the demands for reform," says Washington Institute for Near East Policy fellow Matthew Levitt.
  

  
   

• Balancing Obama's ambition to restore the credibility of the United States as a nation of values with political realities in the Middle East. Sacrificing democratic reform in Jordan for a hardening of attitudes toward Hamas highlights the contradictions Obama will need to resolve attempting to achieve his goals of improved US credibility and Middle East peace. As does Hamas' claim to legitimacy by virtue of the fact that it won a democratic election universally accepted as free and fair.
  

  
   

  The dilemma is reinforced by what Rami G. Khouri, editor-at-large of The Daily Star, and director of the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut, describes as "the deeper reality that plagues the Arab world," namely "that the average Arab citizen faces an unsatisfying choice between a brand of Islamist-nationalist military resistance that triggers enormous Israeli attacks and Arab death and destruction, and a brand of Arab autocratic governance that breeds mediocrity, corruption and perpetual vulnerability and dependence. The choice is stark: Hamas or Fatah in Palestine; Hizbollah or Hariri in Lebanon; Mubarak & Son or Muslim Brothers in Egypt -- and the list continues through every Arab country. The slow gravitation and polarization of the modern Arab state system over the past three generations into two broad camps of status quo conservatives and resistance fighters is more apparent than ever, and equally frustrating.
  

  'Resistance' rings powerfully in the ears of ordinary Arab men and women, as we can witness on television screens throughout the region these days. Resistance will continue as long as oppression and occupation persist. But perpetual resistance means constant warfare and repeated Israeli destruction of Lebanese and Palestinian society, given Israel's superiority in conventional weapons and its barbaric willingness to inflict severe pain on civilian populations. The world's powers largely turn a blind eye to, or tacitly support, Israel's savagery against Palestinians and Lebanese, as we witnessed in 2006 and today. Europe and the United States actually joined Israel in its long-term material blockade and political strangulation of Gaza after Hamas' electoral victory in 2006," Khouri says.
  

  The inability of Arab governments to come to grips with Israel in war or peace as well as their inability to establish a modus vivendi with the Islamist opposition renders governments effectively paralyzed. Islamist movements thrive on this. The Gaza ceasefire perpetuates the choice confronting ordinary Arabs. With Hamas likely to resist pressure to make the full transition from a militia to a political movement, its perceived victory will reverberate throughout the Arab world.
  

  The dilemma for Obama is that America needs to be seen to be true to its own values to restore its credibility. But like in Palestine, pressing even delicately for greater freedom and democratic reform in the Middle East means engaging with Islamists and realizing that the legacy of support for autocratic regimes means that the people's will may not be to Washington's liking.
  

• Exploiting competition between rival internationalist and nationalist Islamist factions. The aftermath of the Gaza war highlights divisions in the Islamist movement between those pursuing nationalist goals such as Hamas and Lebanon's Hizbollah and those with a global agenda aimed at the United States, European nations, Israel and Arab governments. "There is nothing to negotiate with the global jihadists, but the Islamo-nationalist movements simply cannot be ignored or suppressed," says Olivier Roy, a research director at the French National Center for Scientific Research and lecturer at the School for Advanced Studies in the Social Sciences. "Hamas is nothing else than the traditional Palestinian nationalism with an Islamic garb. The Taliban express more a Pashtu identity than a global movement. The Iraqi factions are competing not over Iran or Saudi Arabia, but over sharing (or monopolizing) the power in Iraq."
  

  
   

  Roy argues that former President Bush's failure to distinguish between Islamists with global ambitions and those seeking to achieve national goals had stymied any effort to seek a political rather than a military solution to national conflicts such as the Israeli Palestinian dispute. He notes that the political approach proved successful in Iraq where it drove a wedge between Al Qaeda and other armed Sunni insurgents by recognizing them as political actors pursuing an Iraqi rather than a global agenda.
  

  
   

  Adopting the principle of the enemy of my enemy is my friend, the International Herald Tribune reasoned in an editorial that the "deep-seated hostility between the Al Qaeda current of Islamism and the more nationalist tendency represented by Hamas suggests that Israel, the United States, and others might do well to shape policy with these distinctions in mind. If Hamas acts as a barrier against something much worse - the undeterrable fanatics of Al Qaeda - then the political eradication of Hamas might not be a desirable goal,"
  

  
   

  The rivalry between global jihadis and Islamist nationalists is clear in their responses to the Gaza war and Obama's taking office. Al Qaeda this week called for attacks on Western nations and their Arab supporters, in retaliation for Israel's offensive in Gaza. "It's high time that this criminal country, I mean Britain, paid the price of its historic crime," Qaeda leader Abu Yahya al-Libi said in a video posted on an Islamist website, holding Britain responsible for Israel's creation. "There is no child who dies in Palestine ... without this being the outcome of the (country) that handed Palestine to the Jews ... Britain…"Make them taste the bitterness of war and the tragedies of homelessness and the misery of horror," he said in a call to militant fighters. "They should not be secure while our people (Palestinians) are scared. "O, mujahideen (holy strugglers) everywhere rise like an angered lion ... do what you can to make the infidel capitals of the West and America and the Arab Tyrants taste what our brothers and weak folks in Palestine have been tasting," Al-Libi said in the 31-minute video.
  

  
   

  The Arab world may well be where the global jihadis seek to make their mark. Ibrahim Eissa, editor of Al-Dostor in Cairo warns in an editorial entitled 'The Coming Terrorism' that the Gaza war is likely to fuel religious extremism as younger, more religious Arabs conclude that their government's tacit siding with Israel and rejection of Hamas amounts to opposition to Islam. "The people are repressed. They will not raise their swords against their governments but their hearts will be stronger than their swords," Eissa says, predicting that terrorism will adopt a new form. This could well be scattered, uncoordinated attacks perpetrated by people with no connection to Al Qaeda or other globalist jihadi groups and not exposed to discussion on Jihadi Internet forums.
  

  
   

  Some moderate Islamists are willing to give the Obama administration the benefit of the doubt. Mohammed Essam Derbala, a leader of Al-Gama'a Al-Islamiyya, which employed terrorism from 1981 to 1997 to topple the Egyptian regime, urged Al Qaeda in a statement to declare a four-month truce with the United States in response to Obama's call to improve relations with the Islamic world.
  

  
   

  In a similar vein, Damascus-based Hamas Political Bureau chief Khalid Mashaal this week sought to exploit the aftermath of the Gaza war to ensure that Hamas would be included in diplomatic efforts to achieve a durable ceasefire with Israel. "I tell European nations ... three years of trying to eliminate Hamas is enough. It is time for you to deal with Hamas, which has gained legitimacy through struggle." Describing the Gaza wars as the "first and great real war that our people won" in which "Hamas and the resistance emerged as an indispensable part, Mashaal said. He said "there are (still) two battles to gain. Those of the lifting of the blockade and the opening of crossing points, including Rafah, which is our window on the world."
  

  
   

  Speaking barely an hour after Obama's appearance at the State Department, Hamas spokesman Osam Hamdan welcomed Mitchell's appointment, saying he believed the former senator "could make a change" and that his appointment was "a good sign." Hamdan was careful not to reject Obama's conditions but said Obama should have also demanded that Israel recognize Palestinian rights. "To achieve a peaceful solution, we need to talk about recognition of Palestinian rights and a clear definition of the realization of those rights," Hamdan said.
  

  
   

  Hamas is certain to hold on to its mantra of resistance. But popular sentiment in Gaza may be pushing it to focus on politics rather than resistance. While a majority of Gazans hail its steadfastness in public and would probably vote for it in an election, in private they may be less willing to sacrifice in the wake of the Gaza war. Jordanian counter terrorism expert Abdul Hameed Bakier suggests that the fact that Hamas launched few suicide attacks against Israeli forces while they were in Gaza is an indication that the Islamists have difficulty recruiting volunteers.
  

  Retired Col. Shmuel Zakai, who commanded Israeli forces in Gaza until 2004 and in the 1990s was sent to Britain to study counter-insurgency in Northern Ireland, argues that the groundswell for Hamas could have been predicted. Winning hearts and minds is as import as battlefield victories in the struggle against Hamas, he says. "We just keep creating bigger problems. Military power alone is not enough. We should be the first ones on the ground helping to rebuild Gaza and making sure Hamas isn't."
  

Perhaps, the biggest challenge to Middle East peacemaking is the need for a fundamental shift in the way Palestinians and Israelis look at one another. For Palestinians, this means accepting that Jewish Israelis are a people that have struck roots in Palestine and are there to stay with the attributes of nationhood and national identity that come with that. Israel can play a major role in changing Palestinian perceptions. "We Israelis must begin to realize this simple fact: the Arabs are not metaphysical creatures, but human beings, and human beings have it within themselves to change. After all, we Israelis change our positions, mitigate our opinions, and open ourselves up to new ideas. So we would do well to get out of our heads as quickly as possible the illusion that we can somehow annihilate Hamas or eradicate them from the Gaza strip. Instead, we have to work, with caution and good sense, to reach a reasonable and detailed agreement for a lasting ceasefire that has within it the perspective that Hamas can change . Such a change is possible and can be acted upon. Such fundamental changes of heart and mind have happened many times in the course of history," says A. B. Yehoshua, one of Israel's most prominent literary figures.

Demographics Likely to Loom Large In Peace Efforts

Israelis and Palestinians going at each other at regular intervals has become a fixture of the Middle East. Israelis can live with that as long as they maintain military superiority, American backing and are able to install the fear of God in their opponents. Israeli leaders take Hizbollah's domestic political calculations leading it not to broaden the last Gaza war with rocket attacks on Israel as evidence that their strategy is still valid. They hope the same will prove true in Gaza.

Yet, as Israelis go to the polls in three weeks time in which Binjamin Nethanyahu, a hard line believer in Israel's strategy of overwhelming capability and force, is the front runner, that strategy may well have run its course in much the same way that military technological advances made the geographic depth that occupation in 1967 of the West Bank and the Golan Heights obsolete in terms of security.

If there is a sliver of hope, demography may be it for many Palestinians and Arabs who have lost faith in the feasibility of the two-state solution involving a Palestinian state alongside Israel despair in the wake of the Gaza war and 21 years of failed peacemaking based on Palestinian concessions to Israel, Many Palestinians do not see an alternative to the two-state solution beyond notions of continued resistance and steadfastness that offer little prospect for building normal, prosperous lives, amid Palestinian

If the Israeli Palestinian conflict is turning existentialist in Palestinian perceptions, it is doing so for Israelis too even if Palestinians are unlikely to pose a military existentialist threat to Israel any time soon. Demographics could constitute a far greater threat to Israel than Palestinian rockets or terrorism and may be the monkey wrench that will break the cycle of death and destruction. It is what already has motivated Israel's partial withdrawals from occupied territory even if it refused to surrender control and empower Palestinian government and persuaded it to pay lip service to the two-state solution although it was unwilling to demonstrate the boldness and vision needed to make that happen.

The figures speak for themselves. Although Jews will remain a majority within sovereign Israel for the foreseeable future, they are projected to become a minority in the area between the Jordan River and Mediterranean Sea within the next decade. As long as Israel remains in the West Bank and Gaza, this demographic forecast will pose a threat to the country's Jewish identity. Nethanyahu has warned that if the Palestinians living inside Israel's pre-1967 border cross the 20% threshold, the Jewish nature of the state would be in danger. Fear of the demographic threats persist despite some studies that the demographic threat may be less imminent. Demographics leaves Israel with a choice: encourage Palestinian immigration, pursue a policy of attempting to break Palestinian will or seek a political accommodation that gives both parties a sufficient modicum of their aspirations. While Israel retains all three options, the memory of the images of the Gaza war are likely to focus the spotlight to a greater extent on the human rights aspects of Israel's military conduct as well its policies in the occupied territories. That may contribute to sparking debate in Israel on whether accommodation may in the end be its best bet.

Discussions mediated by Egypt throughout the Gulf war offer a sliver of hope. Israel has professed throughout its history that it seeks full-fledged peace with its Arab neighbors. Ceasefires were agreed after violent confrontation in a bid to give peacemaking a chance. In the Cairo talks, Israel appeared willing to settle for less. For more than a decade it rejected Hamas' call for a ten-year truce, its way of seeking accommodation with Israel without surrendering its refusal to recognize Israel or drop its insistence on the Palestinian right to armed resistance. In Cairo, Israel was gunning for such a truce while, Hamas emboldened by its survival in Gaza, dropped its proposal in favor of a one-year truce at best. For the Obama administration, the question is whether it should lower the sights of immediate peacemaking and seek to negotiate a long-term truce rather than definitive peace in the expectation that an end to violence and repression over a longer period of time will generate the vested interests needed to negotiate a final settlement.

Seeking more limited goals would allow the Obama peacemaking effort to give the dynamics of an armed truce time to do their work. The nature of the questions peacemakers need to answer would than in due course probably be different and no longer be as complex at those they confront now. Currently, peacemaking means trying to bring parties together who either don't want to talk to one another or whose goals are mutually exclusive. That would likely change if a long-term truce would prove to Israelis that non-violent coexistence and security is possible and demonstrate to Palestinians that they are being allowed to build a national existence of their own with a promise of political, economic and social development. That would reduce their urge to risk quiet and prosperity for violence, and nurture a majority that no longer would see militant confrontation as the only way of achieving moderated national goals.

Chances of achieving even the more limited goal of a long-term truce are waning in the wake of the Gaza war. Hamas recognizes that getting humanitarian aid and kick starting reconstruction in Gaza are a priority. In a bid not to appear as an obstacle to Gaza picking up the pieces, Hamas has said it will cooperate with the Palestine Authority headed by Palestinian President Mahmoud Abbas, whom Hamas describes as a traitor, to ensure the needed funding. As Hamas hardens its attitude toward Israel in the belief that the war solidified its position as the primary Palestinian representative even if much of the international community refuses to deal with it, international assistance becomes the key to attempting to bring the Islamist group back to entertaining a long-term arrangement with Israel. Early indications are that the international community will attempt to use assistance to strengthen Abbas and weaken Hamas, a strategy that since 2006 has failed and is unlikely to prove more successful now. In the meantime, is back to its rejectionist rhetoric. “After the ceasefire, if the Israelis pull out, maybe we will sign a one-year truce with them. Maybe we will sign a truce and after that we will continue to liberate all the Palestinians lands, from the river to the sea, including the 1948 lands….There can be no accommodation with Israel. Anyone who signs such an accommodation is a traitor,” said Hamas’ spokesman in Syria, Talal Nassar.

The hardening of positions is not just among militants. Pro-western Arab leaders are finding that they have to take public opinion in account where Hamas has gained in popularity. Speaking in Kuwait at the Arab economic summit, Saudi King Abdullah cautioned: "Israel has to understand that the choice between war and peace will not always stay open and that the Arab peace initiative that is on the table today will not stay on the table," Abdullah said during a speech at the summit.” Abdullah fathered a peace plan in 2002 that has twice been endorsed by the Arab League calling for peace with Israel in exchange for an Israeli withdrawal from the Arab territories occupied in 1967 and the establishment of a Palestinian state. Israelis officials have said the plan could serve as a basis for negotiations. Saudi Arabia is among Arab states that pledged $2 billion in Kuwait but are reluctant to see cash flow directly to Hamas.