Middle East Heralds New Year With Winter of Discontent

By James M. Dorsey

The Middle East and North Africa welcomed the New Year with a rare phenomenon: protests in an arc stretching from Algeria to Kuwait, directed against repressive regimes at home rather than a foreign power. The protests are a rare outpouring of pent-up frustration and anger at discrimination and failed economic and social policies as well as corruption in a region that is governed by authoritarian governments intolerant of public criticism.

It is too early to conclude that the protests signal a milestone after which Middle Eastern population groups no longer quietly endure repression and economic deprivation and instead increasingly and publicly challenge their authoritarian leaders. Yet even if they are unlikely to repeat the regime-toppling successes of the velvet revolutions of Eastern Europe, the protests reflect increased chafing at disenfranchisement and lack of opportunity and good governance. Tunisia is witnessing the most-sustained demonstrations against an Arab government in recent history. The New Year's church bombing in Alexandria, Egypt, has sparked a rare public outburst of pent-up Coptic anger. Demonstrators in Algeria this week protested food-price hikes, unemployment and an alleged deterioration of government services. Riots in the southern Jordanian town of Maan erupted following a brawl in which two people were killed. And protests in Kuwait denounced the beating by police of a law professor critical of the government.

The wave of discontent follows a series of underreported economically inspired protests in recent years across North Africa -- including in Tunisia's southern Gafsa mining province in early 2008, in Morocco's impoverished port city of Sidi Ifni in the same year, and in various Egyptian towns over the past several years -- as well as ethnic and political clashes sparked in recent weeks by soccer rivalries in Jordan and Iran. A draw last week in the world's most violent soccer derby between Cairo arch-rivals Al Ahly and Zamalek sparked speculation by Egyptian sports commentators that the government had fixed the match to prevent potential soccer riots that could turn political. Algeria this weekend postponed all national soccer league matches in a bid to prevent games from turning into anti-government protests.

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U.S. Should Push for Democracy in Egypt

By James M. Dorsey

World Politics Review

Human rights were glaringly absent from U.S. Secretary of State Hillary Clinton's agenda when she recently met with Egyptian Foreign Minister Ahmed Aboul Gheit ahead of Egypt's Nov. 28 parliamentary elections. The silence is noteworthy, given Cairo's suppression of the political opposition in advance of the elections as well as its overall dismal human rights record.

The Obama administration fears that Egyptian President Hosni Mubarak will respond to criticism by withdrawing both political support for the stumbling Israeli-Palestinian peace process and logistical support for U.S. military operations in Afghanistan and Iraq. The administration is also concerned that criticism would boost the Muslim Brotherhood, Egypt's popular Islamist opposition group. Finally, should Egypt simply reject the criticism, it could paint President Barack Obama as too weak to influence one of the United States' closest allies and a major recipient of U.S. aid.

Apparently testing the waters, State Department spokesman P. J. Crowley called on Egypt in a written statement to allow peaceful political gatherings and open media coverage, and to admit international election observers. Egypt immediately rejected the call, saying it has a system of judges and other safeguards in place to monitor the fairness of the elections and that the government has issued guidelines for free and fair media coverage of the campaign.

To be sure, repression of the opposition, intimidation and control of the media, and electoral restrictions virtually guarantee that Mubarak's ruling National Democratic Party will win the elections. But for the U.S., the long-term risks of being perceived as perpetuating authoritarian rule in Egypt and elsewhere in the Arab world may well outweigh the short-term benefits of turning a blind eye to flagrant human-rights violations and measures that stymie democratic development.

Read more at World Politics Review

Proposed NATO Defense Shield Fuels Discussion of New European Security Architecture

By James M. Dorsey

A proposed $280 million NATO missile defense system upgrade is straining relations between the United States and Turkey in the run-up to this week’s NATO summit in Lisbon. Turkish officials say they will only agree to having radar components of the system on Turkish soil if NATO abstains from identifying any potential target of the system and promises not to share intelligence with non-NATO members.

The Turkish demands reflect a mounting divergence in US and Turkish foreign policy with Turkey no longer signing up to Western policies simply to align itself with the West but instead making cost-benefit analysis a key element of its decision-making. As a result, Turkey is demanding a quid-pro-quid for its accommodation of the proposed missile defense shield upgrade that threatens to put it between a rock and a hard place.

If Turkey rejects the upgrade, it risks angering its US and NATO allies; if it joins the shield, it would upset Iran, a neighbor and major energy supplier, and could complicate its relations with Russia, which opposed the upgrade when it was first proposed by US President George W. Bush. "We do not perceive any threat from any neighbor countries and we do not think our neighbors form a threat to Nato," says Turkish foreign minister Ahmet Davutoglu.

The Turkish demand that NATO refrain from identifying the system’s target strikes at declared US policy: a White House fact sheet recently described Iran as the threat the proposed shield would be designed to counter. Turkey opposes Iran becoming a nuclear power but advocates continued engagement in the hope to expand its trade with Iran to $30 billion a year over the next five years. The US Treasury’s point man on Iran sanctions, Stuart Levy, last month failed to convince his Turkish counterparts to go further than the largely symbolic United Nations sanctions, which Turkey opposed, and endorse the much stricter US sanctions regime.

Turkey, concerned that any US or Israeli military effort to disrupt Iran’s nuclear program would further destabilize the Middle East, moreover wants assurances that any intelligence garnered from radars on its territory will not be shared with Israel. Turkish officials refused to confirm or deny reports that the Turkish Security Council last month approved changes in its national security document, called the "Red Book," removing Iran and Syria and adding Israel to the list of countries that pose a "major threat."

Turkey fears that allowing the radar to be based in Turkey will raise Iranian suspicions that it would be associated with a potential US or Israeli strike against the Islamic republic. The United States wants to base the radars in Turkey after US President Barak Obama promised Russia in September of last year that it would seek to accommodate Russian objections against basing them in Poland and the Czech Republic. Turkey’s position on the defense shield is influenced by the fact that its past accommodation of US and European interests has not pushed forward as Turkish leaders had hoped its efforts to join the European Union.

The quid-pro-quid Turkey is seeking for possible accommodation of NATO is US pressure on France and Germany to reverse policies that are preventing progress in negotiations for Turkish European Union membership. The US has signaled its willingness to accommodate the Turks by putting high on the agenda of a US-EU summit scheduled immediately after the NATO gathering Turkish EU membership. In expectation of a NATO compromise, Turkish officials say they have begun technical studies on the radars in preparation for possible deployment. The studies are in part designed to reduce tension between the government of Prime Minister Recep Tayyip Erdogan and the armed forces, which view Iran’s nuclear program as a threat and favor deployment of the NATO missile shield.


While most analysts and officials believe that Turkey is genuinely seeking to balance its long-standing commitment to Western interests with the impact of paradigm change since the end of the Cold War, some analysts caution that a failure to take Turkish interests into account could provoke a rupture with Turkey feeling forced to choose between the West and Iran.

Mitigating against a rupture is the fact that Europe may have a renewed interest in embracing Turkey because of the United States’ perceived preoccupation with security risks posed by the Middle East and China at the expense of its past focus on Europe. Calls in Europe for a new European security architecture that would put a greater emphasis on the role of Turkey as well as Russia are gaining momentum. A recently published European Council on Relations report entitled "The spectre of a multipolar Europe" argues that Obama’s failure to participate in ceremonies marking the 20th anniversary of the fall of the Berlin Wall was the latest sign that the US is no longer focused on Europe’s internal security. “Washington has its hands full dealing with Afghanistan, Iran and China and is no longer a European power,” the report concluded.

To fill the void, the report calls for an informal dialogue that would allow the EU, Turkey and Russia to build a new European security architecture from the ground up. This would require blowing new life into Turkey’s EU accession negotiations by expanding them to include common security and defense policies as well as energy. “The post-Cold War order is unraveling. Rather than uniting under a single system, Europe’s big powers are moving apart. Tensions between them have made security systems dysfunctional: they failed to prevent war in Kosovo and Georgia, instability in Kyrgyzstan, disruption to Europe’s gas supplies, and solve frozen conflicts… The EU has spent much of the last decade defending a European order that no longer functions. Russia and Turkey may complain more, but the EU has the most to lose from the current peaceful disorder,” the report says.

US Risks Little With Support for Egyptian Human Rights

Human rights were glaringly absent on the agenda of U.S. Secretary of State Hillary Clinton's meeting with Egyptian Foreign Minister Ahmed Aboul Gheit in the run-up to Egypt's parliamentary elections scheduled for November 28.

 

U.S. officials fear that criticism of Egypt's dismal human rights record could jeopardize Egyptian support for the Middle East peace process and U.S. military operations in Iraq and Afghanistan encourage the country's popular Islamist opposition and set President Barak Obama up for a failure if Egypt ignores U.S. pressure.

 

Repression and electoral restrictions virtually guarantee that the ruling National Democratic Party (NDP) will win this month's elections, but the long-term risks of perpetuating authoritarian rule in Egypt and elsewhere in the Arab world may well prove costlier than the short-term benefits of turning a blind eye to flagrant violations of human rights.

 

Analysis of the feared risks, moreover, shows that they are grounded more in perception than in reality and that U.S. support for adherence to human rights is a battle that can be won over time rather than a zero-sum game. Divided over whether or not to participate in the elections, Egypt's foremost opposition group, the Muslim Brotherhood, is going into the elections substantially weakened with many of its leaders in prison and a quarter of its candidates barred from standing as candidates. Egypt would risk U.S. Congressional support for its substantial annual aid package by backtracking on support for the Israeli-Palestinian peace process or logistics for U.S. military operations in the region or reducing intelligence. Similarly, Obama could avoid perceived failure by raising the human rights issue publicly without invoking threats or sanctions and instead taking a leaf out of former President George W. Bush's playbook.

 

Egyptian President Hosni Mubarak would surely reject Obama's criticism. Nonetheless, Obama's public focus on human rights and democracy would shape debate in Egypt, encourage activists and influence perceptions of the United States. All in all, the United States has more to win by nudging Egyptian and Arab debate about democracy and human rights and more to lose by maintaining a policy that so far has exclusively identified it with repressive, corrupt regimes and significantly tarnished its image.

Turkish Opposition To NATO Missile Shield Fuels Tension

A proposed $280 million NATO missile defense system upgrade is straining relations between the United States and Turkey in the run-up to a NATO summit in Lisbon later this month.

Turkish officials say they will only agree to basing radar components of the system on Turkish soil if NATO abstains from identifying any potential target of the system and promises not to share intelligence with non-NATO members.

The Turkish demands reflect a mounting divergence in US and Turkish foreign policy with Turkey no longer signing up to Western policies simply to align itself with the West but making a cost-benefit analysis a key element of its decision-making. As a result, Turkey is demanding a quid-pro-quid for its accommodation of the proposed missile defense shield upgrade that could put it between a rock and a hard place. If Turkey rejects the upgrade, it risks angering its US and NATO allies; if it joins the shield, it would upset Iran, a neighbor and major energy supplier, and could complicate its relations with Russia, which opposed the upgrade when it was first proposed by US President George W. Bush.

The Turkish demand that NATO refrain from identifying the system’s target strikes at declared US policy: a White House fact sheet recently described Iran as the threat the proposed shield would be designed to counter. Turkey, concerned that any US or Israeli military effort to disrupt Iran’s nuclear program would further destabilize the Middle East, further wants assurances that any intelligence garnered from radars on its territory will not be shared with Israel.

Analysts say the quid-pro-quid Turkey is seeking for possible accommodation of NATO is US pressure on France and Germany to reverse policies that are preventing progress in negotiations for Turkish European Union membership. They note that the agenda of a US-EU summit scheduled immediately after the NATO gathering features Turkish EU membership high on its agenda.

Some analysts suggest the United States’ perceived preoccupation with security risks posed by the Middle East and China at the expense of its past focus on Europe may help sway France and Germany, where calls for a new European security architecture that would put a greater emphasis on the role of Turkey as well as Russia are gaining momentum.

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.

U.S., Europe Press GCC States on Yemen Membership

By James M. Dorsey

World Politics Review

The United States and Europe are pressuring oil-rich members of the Gulf Cooperation Council (GGC) to forge closer ties with Yemen in a bid to link the fight against al-Qaida to tangible economic benefits for the Arab world's poorest nation.

U.S. officials say the Obama administration recently conveyed to GCC leaders Yemen's reiteration of its 10-year-old request for GCC membership. The officials believe that U.S. and European endorsement of the request will prompt GCC leaders to respond more favorably when they meet in Abu Dhabi in December.

The U.S. and Europe are exerting pressure against the backdrop of an increasing number of attacks in Yemen on foreign diplomats and nationals. Suspected operatives of al-Qaida's Yemen-based affiliate, al-Qaida in the Arabian Peninsula (AQAP), last week fired a rocket at a British embassy vehicle in the capital San'a. Employees of Austrian energy giant OMV were injured in a separate incident. The attacks on foreigners follow scores of incidents targeting Yemeni military and government officials. AQAP has killed some 100 Yemeni security and intelligence personnel in recent months in hit-and-run attacks launched by assassins on motorcycles using grenades and AK-47s.

The GCC's vested interest in ensuring stability in Yemen coupled with the Gulf's reliance for its security on the U.S. -- and to a lesser extent Europe -- militates in favor of the GCC moving beyond its repeated rejections of Yemen's aspirations. Gulf states, first and foremost Saudi Arabia, see their security threatened by AQAP as well as the Yemeni government's intermittent war against tribal rebels in the north and its fight with secessionists in the south.

The GCC, in a prelude to closer relations, has admitted Yemen to several of its institutions, including its councils of health, education, sports and culture ministers. GCC members also contribute substantially to funding of the Yemeni government's payroll. The GCC agreed last month at a meeting in New York of the Friends of Yemen, which groups 22 nations concerned about the growing strength of jihadists in the country, to open an office in San'a that would "help all donors to plan, coordinate and deliver assistance to Yemen more efficiently." GCC members have held back billions of dollars in aid pledged to Yemen because of concerns that the country would not be able to absorb the funds, and also due to widespread Yemeni corruption -- a weak argument for Gulf states that have transparency issues of their own.

A political marriage between the Gulf states and Yemen is likely to prove difficult for the conservative GCC members. In many ways, Yemen and the GCC states have little in common beyond geography and their Arab identity. Yemen is a republican democracy, at least in name, that ousted its royals in the 1960s; GCC members are all authoritarian monarchies that have forgotten that they once wallowed in the same abject poverty Yemen suffers today. Gulf leaders, particularly in Kuwait, have never really forgiven Yemeni President Ali Abdullah Saleh for his support of Iraq during the 1990 Gulf War, in which U.S.-led forces reversed Saddam Hussein's invasion of Kuwait. Yemeni officials concede that in order to persuade the GCC, the government will have to improve the security situation, narrow the economic divide with the Gulf states and significantly reduce the country's addiction to qat, a plant stimulant consumed by a majority of Yemenis that is classified by the World Health Organization as a drug.

In lieu of granting Yemen full membership, the GCC is likely to look at ways of improving employment prospects for Yemenis. Yemen's economic problems were exacerbated in the early 1990s when Saudi Arabia expelled some 1 million Yemeni workers in retaliation for Yemen's support of Saddam. The expulsion deprived Yemen of badly needed remittances that were often invested into small and medium-sized enterprises that constitute the backbone of the Yemeni economy. GCC member states are discussing allowing Yemeni workers to return -- a move that segments of Gulf society, concerned about the high number of foreign, non-Arab workers in their countries, would welcome.

Twenty years on, many Yemeni workers lack the employment skills that Gulf states now require. One way GCC states may seek to compensate for that would be to grant Yemenis access to the same professional and technical training available to Gulf nationals. GCC states are also likely to fund job-creation programs in Yemen. A report commissioned by the Yemeni government recently estimated that Yemen needs to create 4 million new jobs in the next 10 years. A Saudi delegation visited Yemen this weekend as part of a project to develop Yemeni educational programs, prepare Yemeni trainers and help the government draft regulations for the Higher Yemeni Technical Institute, which is funded by the Islamic Development Bank and South Korea.

A recent report (.pdf) by a London School of Economics researcher suggested that stabilizing Yemen was a key GCC interest because the country's problems potentially foreshadow problems that could emerge elsewhere in the Gulf. "Yemen is the canary in the coal mine. It is an indication of what can go wrong when a country fails to develop political legitimacy and build a sustainable, productive non-oil economy," said Kristian Coates Ulrichsen, the author of the report. "The challenges to government authority in southern and northern Yemen demonstrate how existing socio-economic discontent and regional marginalization can fracture and fragment social cohesion. Similar fissures and unequal patterns of access to resources exist in the GCC states and could become transmitters of conflict in the future."

The United States and Europe share GCC concerns about Yemen's lack of good governance. Getting the GCC to assume responsibility for helping Yemen ensure that its development aid is put to proper use will have the added advantage of focusing Gulf attention on transparency issues within the GCC itself.

Whither Turkey?

In the discussion Whither Turkey? much is made of Turkey’s move east as opposed to its continued integration into the West through EU membership. The notion that Turkey is turning East at the expense of the West disregards a host of factors.

Turkey’s expanding influence in the Middle East and the broader Islamic world enhances rather than weakens its interest in EU membership. Turkey has always and still positions itself as a bridge between East and West. Turkey also sees itself as a model for the Islamic world. Those positions would be strengthened by EU membership giving Turkey a much firmer foot in both worlds and highlighting its role as a bridge and a successful model.

Beyond the fact that the EU remains Turkey’s largest trading partner and the fact that Turkey has a large ethnic community in Europe, Turkish business has quietly made major acquisitions in Europe and are in sectors like electronics leading original equipment manufacturers (OEM) for the European market.

Moreover, this weekend’s referendum may increase self-confidence among Turkey’s governing Islamist elite, but secularists and Islamists alike have always seen EU membership as the ultimate guarantor of their worldviews: secularists believe it will ensure continued separation of state and mosque, Islamists see the EU as the road towards greater freedom of religion.

Constitutional change in Turkey does not replace the EU’s guarantor role; it may well however toughen the negotiating stance of a more self-confident Turkish government on the back of a significant victory in rolling back the influence of the military. Ultimately, the expanded focus of Turkish foreign policy reflects a greater reality in Turkey’s neck of the woods: states no longer neatly fit into pro- and anti-Western boxes but pursue policies, some of which are in line with US and European policies and some that are not.

It’s a reality the United States and the European Union needed to adjust to; recognizing that Turkey remains staunchly embedded in the West with its NATO and Council of Europe membership and EU membership applications would be an important step towards that adjustment.

Spanish Authorities Seek U.S. Help In Political Corruption Probe

By James M. Dorsey


MainJustice / JustAnti-Corruption

Just Anti-Corruption reviewed a diagram in the hands of Spanish police mapping 12 Florida-registered companies that are linked to the corruption scandal engulfing the conservative opposition party. The Florida companies are owned by British Virgin Island shells

Read further at MainJustice / JustAnti-Corruption

US and EU struggle to make Iran sanctions watertight

by James M. Dorsey

Deutsche Welle

The US has designated three Maltese companies owned by an Iranian shipping company for violation of its sanctions regime to restrict the Islamic republic’s ability to import what the US terms as dangerous cargoes.

The focus on shipping is being closely coordinated with the European Union and US Treasury officials say the emphasis on shipping compliments their earlier focus on Iran's banking and energy sectors that forced European banks accused of violating the sanctions regime, including Credit Suisse and Lloyd's, to pay hefty fines.
Barclay's Bank recently agreed to pay $298 million (236 million euros) in penalties for hiding transactions with banks in Iran and other countries sanctioned or embargoed by the US.

"Commerce with Iran requires extraordinary vigilance. Iran has used channels of legitimate commerce, by which I mean banking, shipping, transshipment. They have used all these facially legitimate methods to facilitate illicit conduct," said the treasury's undersecretary for terrorism and financial intelligence, Stuart Levey, at the beginning of a Middle East tour to ensure adherence to the sanctions by key Iranian trading partners, foremost among them the United Arab Emirates.

The treasury officials say the Islamic Republic of Iran Shipping Lines (IRISL), Iran's national shipper, which owns the Maltese companies - Marble Shipping Limited, Bushehr Shipping Company and ISI Maritime Limited -, is a prime carrier of cargoes related to Iran's missile and other military programs as well as of arms shipments to Hezbollah, the Lebanese militia-cum-political party designated by the US and some European countries as terrorist.

The treasury designated IRISL in 2008, but is now seeking to ensure that its sanctions are effective and prevent the company from circumventing restrictions by renaming and reflagging its vessels or chartering third-party ships. The renewed focus is also designed to make it more difficult for IRISL to obtain insurance and services. In line with the US effort, the EU last month expanded its restrictions on shipping to Iran to include all shipping companies and vessels as well as air transport rather than only IRISL or other Iranian shippers and vessels.

Prosecutors in the southwestern German city of Karlsruhe this month charged a German and an Iranian national with violating the arms embargo and the EU's export ban on dual-use equipment by shipping to Iran a vacuum sintering furnace in July 2007 worth 850,000 euros ($1.1 million). The prosecutors charge that the furnace needed to construct parts for a missile's guidance system and warheads, falls under the embargo because long-range missiles could carry weapons of mass destruction in their payload.
Britain's Lord Chancellor Ken Clarke is investigating claims made by a BBC documentary and The New York Times that Isle of Man shipping companies set up as shells by IRISL are busting sanctions by shipping arms to Iran. The Isle of Man government has denied the allegations. The BBC documentary said Israeli navy commandos seized a cache of arms off the coast of Cyprus last November. The weapons were packed in crates marked IRISL on an Isle of Man-registered vessel, the Visea, that had set sail from Iran to Egypt, the BBC said.

Levey warned that "some of Iran's most dangerous cargo continues to come and go from Iran's ports, so we must redouble our vigilance over both their domestic shipping lines, and attempts to use third-country shippers and freight forwarders for illicit cargo." Levey's concern is particularly true for freewheeling Dubai and Ras al Khaimah (RAK), the two UAE emirates that operate as major Iranian transshipment nodes. Iran does $12 billion-a-year worth of trade with the UAE, on which it relies for the import of goods, many of which fall under UN or US sanctions.

The UAE recently restricted Iranian use of Dubai's port and its central bank froze accounts of 40 entities and an individual blacklisted by the UN for assisting Iran's nuclear and missile programs. Ras al Khaimah's free zone, home to some 200 Iranian firms, has stopped issuing licenses to new Iranian companies, according to the zone's CEO, Oussama el Omari. "RAK was looking to offer benefits to attract Iranian companies in the past. Now perhaps it's not in their favor to do so due to sanctions so they have changed their viewpoint," said Morteza Masoumzadeh, the head of the Iranian Business Council in Dubai.

The UAE's apparent renewed commitment to the sanctions regime follows the disclosure via satellite imagery of Iranian military installations on Abu Musa, the largest of three islands at the entrance of the Strait of Hormuz occupied by Iran. The installations included three missile launch pads, an elaborate underground market, and a sports field with the words "Persian Gulf" emblazoned on it - a provocative reminder of Iran's hegemonic view of a region the Gulf states describe as the Arab Gulf. UAE Foreign Minister Sheikh Abdullah Bin Zayed Al Nahayan recently stopped short of comparing Iran's occupation of the islands to Israel's occupation of Palestinian territory. "Iran refuses to allow us to send teachers, doctors and nurses. I am not comparing Iran to Israel, but Iran should be more careful than others," Al Nahayan said.

Ensuring that the sanctions against Iran are watertight is proving difficult despite the stepped up commitment from countries like the UAE. China, Russia, India and Turkey, in response to the latest US and EU sanctions, have moved to capitalize on investment opportunities. The four nations have reiterated their adherence to weaker sanctions imposed on Iran in June by the UN Security Council, but say they are not obliged to follow the recently announced more stringent US and EU rules.

In violation of petroleum-related deals with Iran, China and Turkey recently sold gasoline to Tehran while Russian officials say they will ship gasoline by the end of this month. The four countries are also signing deals to invest billions of dollars in Iran's oil and gas fields, petrochemical plants and pipelines. "Sanctions will not hinder us in our joint cooperation," Russian Energy Minister Sergei Shmatko said at the signing in July in Moscow of an energy partnership agreement with Iran.

In his talks with Lebanese leaders, Levey, according to well-placed Lebanese sources, raised US and EU concerns about a mysterious twice-monthly Iran Air flight from Tehran to the Venezuelan capital of Caracas with intermediary stops in Damascus and Beirut. Current and former EU, US and Israeli intelligence officials assert that Iran Air flight 877 ferries people and weapons to Latin America in advance of possible retaliatory attacks against the US should the US or Israel strike at Iranian nuclear sites. They also say the flight may be ferrying back to Iran sanctioned items for Iran's military programs. Although flight 877 is publicly announced, would-be travelers seeking a reservation are invariably told by Iran Air that no seats are available, Western intelligence sources say.

Former CIA Direct Michael J. Hayden concedes that Western intelligence services are unable to substantially monitor the flights or understand their precise purpose. Hayden says the flights are a concern because they constitute a direct and uncontrolled Iranian link into the Western Hemisphere. "I can tell you that we're really interested in that direct flight… It is something that we are sensitive to," Hayden said. The State Department declined comment on the flight, saying in a statement that "nations have the right to enter into cooperative relationships with other nations."

Escalating Turkish-Kurdish Hostilities Threaten U.S. Policy in Iraq

James M. Dorsey | 30 Jul 2010

World Politics Review

Escalating fighting between Turkish forces and Kurdish guerrillas in southeastern Turkey and predominantly Kurdish northern Iraq coupled with a high-powered Iraqi Kurdish campaign to achieve greater autonomy are complicating U.S. efforts to ensure that Iraq remains united once American troops leave the country. The increased hostilities couldn't come at a worse time for the Obama administration, which is preparing for next year's withdrawal of U.S. troops from Iraq.

The U.S. had hoped that closer Turkish-Iraqi Kurdish cooperation and Ankara's conciliatory moves toward Turkey's estimated 15 million Kurds -- who account for approximately 20 percent of Turkey's population -- would end a decades-old Kurdish insurgency in Turkey. Instead, Turkish warplanes are targeting PKK bases in northern Iraq with increased regularity, and the Turkish military is re-establishing checkpoints in predominantly Kurdish southeastern Turkey. The U.S., which has designated the PKK a terrorist organization, is assisting Turkey by providing intelligence to its military and granting Turkish fighter jets greater access to northern Iraqi air space.

The hostilities threaten to jeopardize Prime Minister Recep Tayyib Erdogan's efforts to persuade the outlawed PKK to lay down its arms and end fighting that has cost some 45,000 lives, by granting Turkish Kurds greater political and cultural freedom. Despite the fighting and increasingly tough language towards the PKK, Erdogan continues to pay lip service to the notion that the conflict with the Kurds cannot be resolved with military means alone. Yet, with a controversial constitutional referendum scheduled for September, elections due next year and nationalist calls for a harder line towards the PKK, Erdogan will be hard-pressed to respond positively to recent PKK overtures for a ceasefire and a negotiated solution.

U.S. officials fear that the increased Kurdish violence could threaten an economic boom on both sides of the Turkish-Iraqi border and complicate the administration's efforts to ensure that Iraq remains united following the U.S. withdrawal. Washington is currently pressuring the Iraqi Kurds to moderate their demands for greater autonomy, for expansion of their territory to include the disputed oil-rich city of Kirkuk, and for independence from Baghdad in negotiating contracts with foreign oil firms.

The Iraqi Kurds are pushing back by investing heavily in a lobbying and public relations campaign in Washington. Iraqi Kurdistan now ranks among the top 10 foreign clients of several high-profile Washington-based lobbying and public relations firms. Gen. Ray Odierno, commander of U.S. forces in Iraq, last week warned that Kurdish-Arab tension over Kirkuk and the powers of the Kurdish Regional Government constitutes the single largest threat to Iraqi stability. He said that despite U.S. efforts to ensure stability, the differences were unlikely to be resolved before U.S. troops leave the country.

Iraqi Kurdish resolve to further insulate their autonomous region from volatility elsewhere in Iraq has been strengthened by the Obama administration's refusal to coax Iraqi political leaders to finally form a government months after inconclusive parliamentary elections were held. U.S. officials say Vice President Joe Biden, during his July 4 visit to Baghdad, emphasized the need to form a government quickly, but refrained from discussing how it should be formed or who should be part of it. U.S. officials have reiterated that position since.

Iraqi Kurdish leaders say the U.S. reluctance to intervene more forcefully is allowing Iran to fill the vacuum. Iran is trying to persuade pro-Iranian cleric Moqtada al-Sadr to drop his opposition to a government led by Prime Minister Nouri Al-Maliki's State of Law coalition. Iraqi Foreign Minister Hoshayr Zebari, whose Kurdistan Democratic Party (KDP) is part of the outgoing Iraqi coalition government, appealed to the Obama administration during a visit to Washington this month to help Iraqi politicians form a government. Speaking to reporters he warned that the longer Iraq "goes without a government, you will have more and more vacuum. That's why . . . time is of paramount importance."

Meanwhile, though Turkish military operations in northern Iraq are limited to remote mountainous areas of Iraqi Kurdistan, they put the regional government in an increasingly delicate position. Turkey has been pressuring the regional government to do more than simply tacitly agreeing to the anti-PKK strikes. The renewed fighting has dampened Iraqi Kurds' hopes that with greater political and cultural freedom for Turkish Kurds, the conflict on the other side of the border would be resolved.

The regional government, in an effort to navigate a way out of the impasse, has revived plans, in cooperation with Turkey's pro-Kurdish Peace and Democracy Party (BDP), to organize a conference with participation of Kurds from Iraq, Turkey, Iran, Syria and various European countries to discuss the future of the PKK and pressure it to lay down its arms. The organizers believe that having already moderated its goals, the PKK may be amenable to a Kurdish initiative to effectively mediate with Turkey. The rebels have dropped their demand for an independent Kurdish state in favor of greater political and cultural rights in Turkey and an amnesty for PKK fighters. The conference has the backing of Iraqi President Jalal Talabani, a former Kurdish guerrilla leader.

But Turkey is wary that the conference, which is likely to propose a series of steps to be taken by both Turkey and the PKK, would mean internationalization of a conflict Ankara has long insisted is a domestic problem. Instead it has urged the Iraqi Kurdish and Iraqi governments as well as the U.S. to take military action against the PKK. Speaking on Turkish television, Turkey's top commander Gen. Ilker Basbug warned that "the presence of PKK bases in northern Iraq will certainly affect Turkey and Iraq's relationship and will negatively influence relations between the U.S. and Turkey." Privately, the Turks have gone so far as to warn Iraqi Kurdish leaders that continued escalation of hostilities inside Turkey may force them to invade Iraqi Kurdistan -- a move that could dash U.S. intentions to leave behind a stable Iraq capable of defending itself.

Did Hamas Really Win?

Who did win the Gaza war, Israel or Hamas? The answer to that question is political rather than military and hotly debated. With Israel on the eve of elections and Gaza having been devastated, neither side can afford to be perceived as anything less than victorious. Yet, the more important question is to what degree Israel and Hamas are better off than before the fighting and whether their gains outweigh their costs.

Israel has achieved at best tactical advantages at the price of seriously damaging its image, risking facing war crime charges and putting in jeopardy an Arab peace plan it endorsed as a basis for talks. Anthony Cordesman, a prominent military analyst of the Middle East argued in January 9 report to Washington's Center for Strategic and International Studies (CSIS) that tactical advantages Israel achieved were largely gained early in the war in strikes on Hamas facilities. Cordesman cautioned that the strategic cost of a pro-longed war as opposed to a halt after the initial Israeli air strikes outweighed any tactical advantage Israel would gain. "Will Israel end in empowering an enemy in political terms that it defeated in tactical terms? Will Israel's actions seriously damage the US position in the region, any hope of peace, as well as moderate Arab regimes and voices in the process? To be blunt, the answer seems to be yes… Any leader can take a tough stand and claim that tactical gains are a meaningful victory. If this is all that (Israeli Prime Minister Ehud) Olmert, (Foreign Minister Tzipi) Livni and (Defense Minister Ehud) Barak have for an answer, then they have disgraced themselves, and damaged their country and their friends," Cordesman wrote.

Israel said stopping the firing of rockets into southern Israel was its main goal in the war. The rockets posed however more of a psychological and political than a military threat. There is no doubt that innocent Israelis were killed by the rockets, albeit in far less numbers than Palestinians killed in Israeli retaliation operations. Most important to Israel's leaders however, was the need to break Hamas' political will so that it would accept a two-state solution with a Palestinian state that effectively would be totally dependent on the Jewish state. With Hamas defiant, claiming victory and no longer willing to accept a truce with Israel longer than a year, Israel's goal of ensuring that Hamas would sing a tone lower appears to have failed, That may prove to be far more important than whether Hamas dares fire rockets into southern Israel following the pummeling of Gaza. It also enhances the relative value of Hamas significantly increased popular support in the West Bank and across the Arab world as well as its claim to victory by virtue of survival.

On the principle of war is an extension of diplomacy, breaking Hamas political will was all the more important to Israel given that in the last year truly meaningful Israeli Palestinian negotiations were taking place with Hamas, not with the Palestine Authority headed by President Mahmoud Abbas. The indirect Israel Hamas talks focused on the same key issues as with Abbas: Israeli withdrawal, the terms of a cessation of hostilities, the flow of goods, border patrols and supply of arms. Contrary to the negotiations with Abbas, these talks excluded the notion of mutual recognition and sought to achieve agreement only for a limited period of time. Negotiations are now integrated with violence rather than posited as an alternative; and the two parties proudly proclaim their rejection of the other's legitimacy," says George Washington University political science professor Nathan Brown.

Some Israeli intelligence and military analysts acknowledge that Hamas has in fact accepted the principle of a two-state solution with a Palestinian state alongside Israel. While the Islamist group insists its acceptance is temporary without defining how long 'temporary' may be, former Mossad chief and national security adviser to Prime Minister Ariel Sharon, Ephraim Halevy, writing in Yediot Ahronot, says that Hamas "know(s) that the moment a Palestinian state is established with their co-operation, they will be obliged to change the rules of the game: they will have to adopt a path that could lead them far from their original ideological goals."

The Gaza war may be to Hamas what the 1973 war was to Egypt. Egyptian President Anwar Sadat needed his claim to victory to pursue peace. Israel may have inadvertently handed to Hamas the equivalent albeit for something less than peace. "There may be no Nobel Prize to be had here, but making sure these real negotiations succeed – and then immediately worrying about the next step—is a far more promising approach than pretending that the parties can be cajoled, muscled and jawboned into a final and comprehensive settlement under current conditions," Brown says.

In the effort to rebuild Gaza, those opposed to rewarding Hamas –Israel, the pro-US Arab governments, the European Union and the United States – will find themselves working through Hamas whether they like it or not if they want their funding to have any effect. Statements that funding has to be channeled through the Ramallah-based Palestine Authority lack clarity and seem meaningless. "If they mean funds can never leave the control of the Ramallah-based government, how can that be accomplished when that entity has no effective presence on the ground in Gaza?... If the assistance is to go through regular PA channels, those answer to Hamas. Even if rebuilding and assistance is the task not of the PA but of international actors, those can only operate with the permission and cooperation of the Gazan PA," Brown says.

Nathan cautions against believing that the aftermath of the Gaza war may constitute an opportunity to drive a wedge within Hamas between soft and hardliners. Differences in Hamas tend to be regarding perspective and priority with things looking different from Gaza, the West Bank or Damascus. Discussion is also fueled by the fact that the group's various arms – military, social, religious and government – at times have different short-term needs. However, debate seldom focuses on long-term, strategic or ideological issues. Rather differences emerge on more immediate tactical questions. The Gaza war serves as an example. Once all had been done and dusted, Hamas in a unified decision opted to match Israel' unilateral ceasefire with one of its own. In this, resembles its ancestry, the Muslim Brothers who often squabble but rarely splinter.

Studies Urges Trans-Atlantic Push For Middle Eastern Reform

If there is one issue beyond the Israeli Palestinian conflict that has damaged US credibility, and to a lesser degree that of the European Union, in the Middle East, it is their failure to stand by their principles of democracy and human rights when it comes to the Arab and Muslim world. Examples of the inherent contradictions of US and EU policy are multiple and glaring: rejection of free and fair elections when the outcome is not to the West's liking such as Hamas' victory in 2006 and the electoral success of the Islamic Salvation Front in Algeria in 1991, continued support for autocratic Arab regimes in the Middle East and a disregard for human rights in the war on terror.

In his very first days in office, President Barack Obama has signaled his sincerity in seeking to restore US credibility and return it to its adherence to values of respect for human rights and the pursuit of democracy. His executive orders to close the Guantanamo Bay prison camp and ban torture of suspected terrorists as well as his shift in tone although not in substance on Israel and the Palestinians create expectations. While the Middle East has heard this before from Washington and seen no shift in policy either towards the Palestinians or political reform in the Arab world, tangible changes of US policy, if pursued, are likely to be gradual. Given the fragile balance in the Middle East, policy change resembles an oil tanker seeking to change course.

Public opinion in the Middle East recoils from the unqualified support the Bush administration granted Israel in its war on Hamas and the impotence of the international community and Arab governments in seeking to impose a halt to the carnage. Hamas enjoys a groundswell of support from ordinary Arabs and Islamist opposition to Arab governments is riding high on the predicament of their governments. Fear that change would undermine Arab government support for US policy in the region has repeatedly in the past defeated past lofty US promises to nurture democracy in the Middle East. So has concern that change could produce governments more in tune with their people but less attentive to US needs. The Obama administration has yet to prove that it is able and willing to chart a course key to restoring US credibility and true to Obama's declared ambition in what constitutes a treacherous minefield. Inevitably, this would involve engagement with the region's Islamists, something the US and Europe has been reluctant to do even though it has done so on various occasions. To do so, the United States and Europe will have to balance their long-term objective of political reform with short-term geo-strategic goals such as Middle East peace, continued access to the region's energy resources and a coming to grips with Iranian regional ambition.

In a report entitled 'Europe, The United States and Middle Eastern Democracy: Repairing the Breach,' published by the Brookings Institution's Saban Center for Middle East Policy, Tamara Coffman Wittes and Richard Youngs, argue that to achieve both short and long term goals, the United States and Europe need to adopt a common approach. In a series of recommendations, they suggest:

1) Establishment of a high-level transatlantic forum to coordinate policies in the Middle East similar to the U.S.-E.U. strategic dialogue on Asia established in 2005.
2) The United States and Europe should leave Arab leaders in no doubt of the West’s continued interest in and attention to democratic growth and human rights improvements in the Middle East, in part through joint statements
3) Europe and the United States should agree on common criteria on rewards and positive conditionality as incentives for reform
4) The allies should uphold the principle that local civil society can seek and accept foreign assistance and make US and European support of Arab civil society non-negotiable
5) The United States and Europe should engage with non-violent Islamist organization, make clear that their defense of peaceful political activism is not selective, and exert pressure on regimes that crack down on such organizations or seek to prevent them from meeting with Western donors
6) US and European government funders should engage in sustained and regular dialogue on funding strategies for democratic development in specific states
7) The United States and Europe should stress that democratic development in the Middle East is a common interest shared with the peoples of the region, not a means to other ends.

For too long, the United States and Europe paid lip service to reform in the Middle East, but feared that commitment to a reform policy could endanger energy supplies, nurture the emergence of forces less inclined to embrace the compromise needed for a two-state solution of the Israeli Palestinian conflict and embolden militant forces. Failure to insist on reform has produced regimes that increasingly lack credibility and opposition groups opposed to the West in part because the West failed to stand against repression and violation of human rights and refused to engage with them.

Lack of Western commitment to reform is stifling indigenous attempts at a more modern interpretation of Islam that challenges the views of the Islamists. Arab regimes, seeking to neutralize the appeal of the Islamists, often close ranks with conservative religious forces opposed to more liberal approaches to Islam, such as the Koranists, an Islamic reformation movement that focuses exclusively on the Koran and opposes implementation of Sharia law.

"For nearly a decade, as (the Koranists have) gained momentum, they have come under increased attack from the Egyptian government for their religious ideas. Al Azhar University, which is based in Cairo and is the leading center for conservative Sunni learning in the world, has rejected the views of the Koranists and has sought to systematically dismantle the movement. To curry favor with this influential religious establishment, the Egyptian government has brutally cracked down on members of the Koranist movement, leading to the imprisonment and torture of over 20 members and the exile of many more," says Ahmed Subhy Mansour, president of Washington's International Quranic Society.

Progress in seeking a modus vivendi for long-term Israeli Palestinian coexistence would ease Western efforts to nudge Arab governments towards democratic reform. Palestine constitutes a double-edged sword for Arab rulers. For too long, it served as a lightening rod that distracted attention from problems at home. Increasingly, Arab inability to further a peace agenda that incorporates Palestinian aspirations and impotence to force a halt to the latest war is fueling support for Islamist opposition groups. A coordinated US and European peace effort would allow the allies to help regimes embark on reform.

In a separate study, India's Strategic Foresight Group, backed by governments or other agencies in Norway, Qatar, Switzerland and Turkey, has concluded that conflict in the Middle East since 1991 has cost the region $12 trillion. The study says the region's population could have been twice as rich as they are today had conflicts, that prevent the Middle East from capitalizing on its location and resources, been resolved. The report looks at the cost of conflict across the region, including the Israeli Arab dispute, the war in Iraq, tension between Iran and Israel rivalry between Hamas and the Palestine Authority and al-Qaeda. It estimates the opportunity costs of conflict in the region at 2% of growth in gross domestic product and suggest that peace coupled with good governance and sound economic policies would allow some countries to grow at 8%. The report says with peace incomes per capita of the population in Israel in 2010 would be $44,241 instead of $23,304, on the West Bank and in Gaza $2,427 as opposed to $1,220 and in Iraq $9,681 against the current $2,375. The report put the cost since 200 of Israeli checkpoints on the West bank impeding Palestinian freedom of movement at 100 million person hours. "Considering the enormity of the costs evidenced in this report which have direct or indirect negative consequences for the whole world, the urgent necessity of a stronger international engagement is inescapable," says Thomas Greminger, a senior Swiss diplomat who worked on the study.

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.

Arabs Prime Targets for Jihadis

If the Gaza war has increased the popular appeal of Jihadi groups in Palestine and elsewhere in the Middle East and many analysts believe, than Arab countries even more than the United States and Israel could be their primary target. Norwegian Middle East scholar and expert on militant Islam Thomas Hegghammer notes that the front page Gaza coverage in most recent issue of Sada al-Malahim (SM), the magazine of Al Qaida in Yemen, barely mentions Israel and the United States. Instead, it lashes out Arab governments and clerics for having aided Israel's siege of Gaza by repressing militant Islamist groups. "[The rulers] incriminated anyone who merely thinks about liberating the holy sites, which can only be liberated by toppling these governments," Hegghammer quotes Sada al-Malahim as saying. Hegghammer says the magazine is echoing the distinction drawn by Ayman al- Zawahiri, Al Qaida's number two, who has argued that Arab governments were near enemies that needed to be confronted first before the Islamists take on the far enemy, the United States. Yet, a text accompanying the magazine quotes Al Qaida Yemen's emir, Abu Bashr, as referring to the far enemy by saying: "We are preparing to open training camps to send you [Palestinians] a generation of reinforcements."

Mitchell to the Rescue?

Secretary of State-designate Hillary Clinton may be about to signal President-elect Barack Obama's intention to be more evenhanded in his approach towards Israelis and Palestinians in the quest for peace.

The New York Times reports that Obama may appoint former Senator George J. Mitchell as his Middle East peace negotiator. Of Lebanese and Irish descent and raised as a Maronite, Mitchell played a key role in negotiating peace in Northern Ireland. His experience in bringing the Irish Republican Army and Protestant militias to the negotiating table would serve him in good stand in the Middle East where closing the divide between Palestinian factions and bringing Hamas in from the cold are prerequisites for any peace effort to have a fighting chance of success. Mitchell may have the credibility to gain a degree of Palestinian trust as well as Israeli respect.

In the waning days of the Clinton administration, Mitchell, headed The Mitchell Commision, established in 2000 at a summit in Sharm el Sheikh during a meeting of president Bill Clinton and Middle Eastern leaders as a fact finding mission. The five-member commission headed by Mitchell included European Union foreign policy chief Javier Solana, former Turkish President Suleyman Demirel; and Norwegian Foreign Minister Thobjoern Jagland. The report called for a freeze on Israeli settlements, a halt to the use of lethal force against Palestinian demonstrators and a halt to punitive measures against the population in the West Bank and Gaza and a Palestinian crackdown in terrorism. The reported was noted for its noted neutralism in discussing Palestinian violence and Israel's attempt to stymie it.

If appointed, Mitchell is likely to be seen by Palestinians as more sensitive to their aspirations and by Israelis as tough but honest negotiator. Mitchell's appointment would signal that Obama is going to free himself of the exclusive relationship that we've had with the Israelis. This is the clearest indication to me that they're trying to inject more balance into the Israeli-U.S. relationship," Aaron David Miller, a public policy analyst at the Woodrow Wilson International Center and former Middle East negotiator told The New York Times.

Mitchell's appointment could well signal change without immediately alienating Israel, spoiled for the last eight years by the uncritical support of the Bush administration. Mitchell "is a prominent symbol of 'evenhandedness,' but he is not regarded as hostile to Israel. As a Senator, he had many supporters in the pro-Israel community, and he generally favored legislation important to the U.S.-Israel relationship. He has many friends among Israel's leaders, and in the American pro-Israel community, says former senior American Israel Public Affairs Committee (AIPAC) official Steve Rosen on his Obama Mideast Watch blog.

Mitchell will need that appreciation if Israeli polls prove correct that Likud leader Binjami Nethanyahu is the frontrunner in the upcoming February 10 Israeli election. Nethanyahu appears to be benefitting from the fact that Defense Minister Ehud Barak’s increased popularity in the wake of the Gaza war is at the expense of Foreign Minister Tzipi Livni’s Kadima Party. Nethanyahu is critical of the government’s decision to declare a ceasefire in Gaza while Hamas still stand over end and a halt to smuggling of arms into Gaza has not been secured.

Rosen says if Mitchell is appointed, Fred Hof of Armitage Associates, the company of former senior State Department official Richard L. Armitage, would be likely to play an important role. Hof is credited with drafting much of the Mitchell. Report.

Gaza Puts Peace in Intensive Care

Israel's offensive against Gaza has put efforts to resolve the Israeli Palestinian conflict on life support, if not buried them six feet under the ground.

World leaders, gathered in the Egyptian resort of Sharm el Sheikh on Sunday to discuss the aftermath of the Gaza war, drove yet another nail into the coffin of the peace process. They focused on ending the smuggling of arms into Gaza, a withdrawal of Israeli troops from the strip, the opening of all border crossings into Gaza and the urgent need for humanitarian aid and assistance in reconstruction. And they paid lip service to the peace process. But virtually none of the leaders, not even Palestine Authority President Mahmoud Abbas, addressed the core problem head on as seen by Palestinians and Arabs: Israel's occupation of lands designated to be part of a Palestinian state.

For many Palestinians and ordinary Arabs it will be hard to fathom that what they see as the root of the problem goes unmentioned at such a gathering less than 24 hours after a three-week war in which Israel pummeled the Gaza Strip with its military force, killed 1,300 people, many of whom were innocent men, women and children and destroyed its already feeble infrastructure. Adding insult to injury, European leaders congregated in Jerusalem immediately after the Sharm el Sheikh summit to again focus on humanitarian issues and the prevention of smuggling rather than on the fundamentals that fuel the cycle of violence. They also failed to note that reconstruction of Gaza will demand not only significant international assistance but will also have to involve a reversal of Israeli policies towards the Palestinians in Gaza and the West Bank that have effectively stymied economic development.

Palestinians and ordinary Arabs are likely to conclude from the meetings in Sharm el Sheikh and Jerusalem that they have little to expect from peace efforts fostered by an international community that was unable because of unwillingness by major powers, foremost among whom the United States, to impose an end to the fighting and in its aftermath shies away from addressing core issues. That perception will be reinforced by the fact that 48 hours before his inauguration and despite the carnage in Gaza, US President-elect Barack Obama has yet to publicly identify key members of his Middle East policy team. Obama said this weekend he would do so "very early on in the administration." Some analysts suggest that Secretary of State Hillary Clinton wants to sound out Middle Eastern leaders before enunciating a clear policy.

The palpable sense of despair and disgust in the Middle East puts pressure on pro-American Arab leaders to bridge the gap between their adherence to a peace process aimed at establishing a Palestinian state alongside Israel and widespread popular perception that peace is a pipe dream and that the ceasefire in Gaza merely allows the parties to catch their breath before the next round of death and destruction. Public opinion in most Arab countries appears to favors Hamas. "That's what is important to watch: whether Egypt, Jordan, and Saudi Arabia modify their positions towards Hamas. If they do, that would be a major indication that Hamas is 'winning,' says a blogger on Arab Media Shack

For world leaders as well as Hamas and Israel, the immediate focus is on restoring a resemblance of normal life to Gaza. But even that threatens to be thwarted by politics and could be mired in renewed bloodshed. Beyond the fact, that the silencing of the guns as the result of two separate, unilaterally declared ceasefires, one by Israel, the other by Hamas, constitutes a very shaky basis on which to build an edifice, Hamas' future may be less bright than most analysts predict. For the time being, its victory is rooted in its ability to have largely, physically survived the Israeli onslaught and its basking in the aura of its resistance.

Little so far is known whether Hamas truly put up a fight in the ground war beyond firing its primitive rockets into southern Israel. What is probable however is that more Palestinians in Gaza than meets the eyes were during the war willing to pass reliable information to Israel, which would account for Israel's ability to locate and kill three of Hamas' top leaders. "We used to hear these slogans of how strong our resistance is. I believed the slogans. But when the war started, nothing happened. I live in an area close to the border with Israel. I used to see hundreds of Hamas and other factions' gunmen waiting for Israeli troops who might storm Gaza. But, since the first day of the war, none of them appeared. And Hamas still talks about a resistance that did nothing to protect our people," 37-year old civil servant Ahmed Tawfiq was quoted by The Observer as saying.

Hamas needs to cement its claim to victory with tangible results such as the Israeli troop withdrawal from Gaza, lifting of the Israeli siege and the opening of the crossing into the strip. If it fails to do so, it is likely to be challenged by more militant Palestinian groups advocating increased violence against Israel and greater links between the global jihadi movement and the Palestinian resistance, which even in its Islamic guise, has focused until now on nationalist goals.

Hamas' unilateral ceasefire is conditional on Israel withdrawing its troops from Gaza within a week. It reserves the right to resume armed resistance if Israel maintains its presence in the strip. Reports from Gaza at the time of this writing say Israeli troops have begun to redeploy. Israel nonetheless insists that it is holding its fire rather than ending its military operation to see whether Hamas and other Palestinian groups are bent on continued military confrontation or will concentrate on badly needed humanitarian and economic reconstruction.

While humanitarian aid is already pouring in, reconstruction is likely to be dependent on progress in efforts to put Palestinians and Israelis on a course towards peace. To nudge Israelis and Palestinians toward a two-state solution, confidence building measures will be needed that go far beyond the terms of a ceasefire that ensures a continued cessation of violence. Israelis will have to signal that they are willing to enable to Palestinians to rebuild their lives and pursue the goals of happiness and prosperity their Jewish neighbors enjoy. "The world community should discourage Israel from enacting further restrictions on Palestinians that will prevent them from working inside of Israel. This has…further transformed Gaza and the West Bank into Bantustans, confining a population which used to work inside of Israel. An economic and developmental solution needs the input of all parties, in addition to the political/military situation, so that Palestinians do not live in closed areas devoid of sufficient employment, or food and goods…," says a US Army Strategic Studies Institute report published on the eve of the Israeli offensive.

As Hamas emerges strengthened from the Gaza war, efforts to reconcile the Islamists with President Mahmoud Abbas' Palestine Authority will likely see Palestinian attitudes towards peace stiffen. Already, Hamas no longer talks about a 10-year truce with Israel that would give both Israelis and Palestinians an economic stake in living and let live. Instead, they are best willing to see the unilateral silencing of the guns extend into an agreed ceasefire for a period of a year. "Not for the first time, we have a ceasefire with no understandings underpinning it…. We are back to where we were when the (Israel Hamas) ceasefire collapsed (in December) … The uncompromising war opens a new strategic chapter. The politics that will emerge from this will be equally uncompromising," Alastair Crook, a former negotiator with Hamas on behalf of the European Union and ex-British intelligence official, said on Al Jazeera.

Mouin Rabbani, a contributor to Middle East Report, listened live on Al Jazeera to the speeches of world leaders in Sharm el Sheikh, figuratively tearing his hair out. "I'm speechless that you can have in 2009 an international conference on the Israeli Pal conflict and the word occupation is not mentioned once…. This war, perhaps more than any other event in the last decade, has transformed peace into a dirty word and negotiations into an even dirtier word. Resistance that was a dirty word is now the word and concept on the lips of people in the region. … Most Palestinians believe a two state settlement is the most realistic path to national self determination. The problem is that since 1993 the peace process has nailed one nail after another in the coffin primarily through the Israeli colonization process. It is practically impossible for Israel to withdraw to the 1967 borders. So, on the one hand you no longer have a two state solution and on other hand don't have an alternative. I don't think a one -state bi-national solution is on the horizon in our life time. The prospect is increased and eventually existential conflict," Rabbani said.

If hopes for a negotiated two-state solution were fading already prior to the Israeli offensive, Palestinians across the political spectrum express post-war predictions of doom and gloom. "Palestinians will continue to suffer and bleed," says Mahdi Abdul Hadi, head of the Palestinian Academic Society. That perception is likely to be strengthened in Gaza in the coming days as the death toll rises with the discovery of more bodies under the rubble and Gazans confront the devastation of their homes. "Israel started the war against Palestinians. They imposed sanctions on Palestinians. Hamas demands the world just leave the siege and break the blockade on Palestinians by opening the curtains. Hamas spent a long time helping the Palestinian people here and worked for its interests. Hamas has the authority and the legitimacy to rule Gaza. I don't think the war affected Hamas that much. They destroyed everything, but Hamas is still there. Hamas will show its power when the war is over," 38-year old bookshop owner Wael Abed Latef told The Observer.

Throughout the Israeli Palestinian conflict, Palestinian determination to achieve independence was reinforced by the way Arab countries treated refugees and an Arab failure to match rhetoric with deeds. This round in the conflict may prove no different. Palestinians being deported after having been arrested and abused in Egypt in conversation with veteran Arabic-speaking CNN correspondent Ben Wedeman expressed anger at Egyptian President Hosni Mubarak and other Arab leaders as well as the United States for supplying Israel with the weapons employed against them as they returned by bus from Egypt to Gaza. “I’m surprised at how buoyant people are given the circumstances. Talking to them, I find morale high and an overall sense of defiance. At one point I saw a young boy on a donkey cart, unaware I was observing him. As an Israeli jet passed overhead, he shook a fist at the sky,” said Wedeman, one of the vast majority of journalists who was prevented by Israel and Egypt from entering Gaza until now, describing his first impressions of Gaza.

The widespread anger and despair enhances the Obama's initial statements on and moves in the Middle East. The president-elect has so far said little beyond the fact that he intends to engage in the early days of his administration, sees the need to tackle problems across the region from Pakistan to Palestine in an integrated fashion and feels the generally accepted outline of an Israeli Palestinian settlement based on a two-state solution is the way forward. For Obama to have a chance of reviving a peace process that would have any credibility, he will have to signal his willingness to be far more sensitive to Palestinian aspirations and concerns while remaining committed to Israeli security. Palestinians and Arabs will monitor his early statements closely for indications that he will take Israel to task on the issue of Jewish settlements on the West Bank and willing to seek to draw credible representatives such as Hamas into the process. "The man in the street will no longer accept the status quo," Abdul Hadi says.

The US Army study effectively argues that the very assumptions are flawed on which past Middle East peacemaking attempts were based. The study takes particular aim at the Israeli and US demand that Palestinian groups, particularly Hamas, must recognize Israel first before they can be included in the peace process. Implicitly it also suggests that peacemakers may have to lower their sights by seeking to achieve a long-term Israeli Palestinian truce rather than a full fledged peace agreement in the expectation that a prolonged period of quiet and economic develop eventually can be morphed into definitive peace.

A sudden reversal of policy along the lines suggested by the study would damage Obama domestically and jeopardize his role as a broker. However the study does provide an analytical context for subtle suggestions by several former US officials believed to be candidates for Obama's Middle East policy team that the president-elect may cautiously explore ways of engaging Hamas. One suggestion is that he may allow the Central Intelligence Agency to engage in quiet exploratory diplomacy which could rekindle Arab and Palestinian hope for a long-term arrangement that would guarantee Israeli security and allow for the emergence of a viable and independent state.

The report notes that the Palestine Liberation Organization (PLO) recognized Israel and that the Palestine Authority was willing to bargain for a state in less than the territories occupied by Israel in 1967 and yet "it is not clear that Israel has ever agreed to accept a Palestinian state." The study argues that recognition of Israel by Hamas as it is described in the Western media, cannot serve as a formula for peace. Hamas moderates have, however, signaled that the group implicitly recognizes Israel, and that even a tahdiya (calming, minor truce) or a hudna, a longer-term truce, obviously implies recognition." The report quotes Damascus-based Hamas Political Bureau chief Khalid Mashaal states as saying: "We are realists … There is an entity called Israel (but) realism does not mean that you have to recognize the legitimacy of the occupation. … I am concerned with the establishment of my state. … The movement (Hamas) accepts a state within the 1967 borders and a truce."

The report, which anticipated the Israeli attack, blames Israel's refusal to engage Hamas following its 2006 electoral victory in polling that was universally judged to be free and fair for the failure of the peace process. "The viability of a two-state solution rested on an Israeli acknowledgement of the Islamist movement, Hamas, and on Fatah's ceding power to it," the report says. "Hamas' political and strategic development has been both ignored and misreported in Israeli and Western sources which villainize the group, much as the PLO was once characterized as an anti-Semitic terrorist group… Israel claimed significant victories in its war against Palestinians by the use of targeted killings of leadership, boycotts, power cuts, preemptive attacks and detentions, and punishments to militant's families, relatives, and neighborhoods etc., because its counterterrorism logic is to reduce insurgents' organizational capability. This particular type of Israeli analysis rejects the idea that counterterrorist violence can spark more resistance and violence… Negotiating solely with the weaker Palestinian party—Fatah (the Palestinian group dominating the Palestine Authority)—cannot deliver the security Israel requires. This may lead Israel to re-conquer the Gaza Strip or the West Bank and continue engaging in 'preemptive deterrence' or attacks on other states in the region in the longer term," the report warns.

For a revival of the moribund peace process, the Palestinians will have to play their part. More important than whatever declarations they make with regard to Israel is their ability to bridge the gap between the Palestine Authority and Hamas to form a united front. "The way out of the crisis is a Palestinian united Front. … We need our independent state in the occupied territories. For that the united front is vital," Fatah parliament member Abdullah Abdullah told Al Jazeera. Hamas spokesman have echoed the need for Palestinian unity. The question is on what terms the Palestinians will come together. They are likely to be far stiffer than the basis on which the Palestine Authority negotiated with Israel and could include terms of reference for resistance against Israel, and possibly the United States.