Mideast Roundup

Nov. 14, 2003

Bowed by Terror

Saudi Rulers Seek Ceasefire with al Qaeda

Saudi royals felt the hot breath of Al Qaeda's suicide bombers blowing ever closer to their sumptuous palaces Sunday, November 9, when the fundamentalists devastated the Riyadh compound of Muhaya, killing an estimated 42 Arab expatriate inhabitants and injuring more than 200.

On Thursday, November 13, a self-styled "Al Qaeda Commander in Iraq", called Al-Hijazi stated at his base south of Falluja that al Qaeda launched its attack on Muhaya after long surveillance established that "&Mac183;a large group of Lebanese Christian lived there."

DEBKAfile was alone in revealing that Lebanese Christians were the target of the attack which was carried out by an al Qaeda Lebanese unit.

(Detailed background on the attack in <#Hot>HOT POINTS at the foot of this issue.)

So palpable was the threat that, according to DEBKA-Net-Weekly's exclusive intelligence and counter-terror sources, the very next day interior minister Prince Nayef, who is in charge of internal security and battling terrorism, ordered his underlings to seek a secret, roundabout route to Osama bin Laden and other al Qaeda leaders in the Arabian Peninsula to discuss a ceasefire. The order was issued after top-level consultations were held through the night in the palace of the shocked Crown Prince Abdullah.

The first American to sense the panic in Riyadh was deputy secretary of state, Richard Armitage, who arrived in Riyadh after the Muhaya raid with a message of support and condolence from President George W. Bush. In a hurried statement to the media, he acknowledged that al Qaeda meant to take down the royal government.

Presented to the princes was an intelligence report revealing that a 15-man al Qaeda terrorist team, mostly made up of Lebanese nationals, had carried out the attack. But its commanders were men of the Ghamidi tribe. Indigenous to the Asir and Najran regions of the south, the tribes' more prosperous members have relocated to cities of the kingdom, the Persian Gulf and the Middle East, and become pillars of the Saudi commercial middle class.

The Ghamidi are also the new Saudi pillar of al Qaeda. Two members of the team blew themselves up by detonating the car which they drove into the Muhaya compound, while 13 others, mainly Ghamidi tribesmen, shot up and hurled explosives at buildings before making good their escape.

Electronic messages picked up by DEBKA-Net-Weekly later this week announced that, after resting from their exertions in Muhaya, the 13 terrorists are about to embark on the next round of action which will center on the murder of Americans working or living in the Saudi kingdom — especially CIA agents.

The confidential report placed before the Saudi princes revealed also that the Ghamidi took part in al Qaeda's triple Riyadh strike on May 12, in which 35 people were killed, including 9 Americans. Two tribesmen were among the suicide bombers who blew themselves up in that first attack in the Saudi capital. Last week, two of the terrorists who died in clashes with Saudi security forces in Mecca and Riyadh just before the Muhaya attack were also identified as Ghamidi. Their deaths averted assaults on Ramadan pilgrims to Mecca, to which they were leading Nigerian and Lebanese suicide bombers.

The compilers of the Saudi intelligence report maintain that al Qaeda's hard core in Saudi Arabia has shifted away from the Afghanistan veterans of the eighties and nineties to Ghamidi extremists. Bin Laden and his commanders have come to lean heavily on this tribal resource, employing it in two ways: 1. Youthful zealots are recruited and sent to the network's Yemen bases for training. 2. Head hunters sign up terrorist candidates in the Middle East and Gulf and provide them with papers and identities for employment in regional tribal businesses, placing them in position for their missions.

Al Qaeda's ride to royal legitimacy

After digesting this report, the Saudi ruling princes decided to capitalize on the centrality of the Ghamidi to al Qaeda's operational planning by approaching tribal chiefs with an offer of an understanding as the foundation of an arrangement with al Qaeda to halt its deadly terrorist spiral against the kingdom.

DEBKA-Net-Weekly names the Saudi mediator entrusted by Prince Nayef's minions with opening the door to negotiations on behalf of the throne. He is Sheikh Safar al Khwali who was thrown into jail with a group of likeminded clerics in the second half of the 1990s, accused of Muslim extremism and supporting bin Laden. According to our sources, Sheikh Khwali this week shuttled back and forth twice between the tribal lands in the south and Riyadh where he reported in person to the interior minister.

As is customary in this sort of tribal bargaining, both parties carefully avoided the main object in the opening rounds. The Sheikh began by asking the Ghamidi chiefs what the royal house could do for the tribe. Al Qaeda was not mentioned. The chiefs responded with lengthy discourses on the deep unemployment afflicting the Saudi-Yemen frontier regions. An infusion of capital to provide jobs for the young people would not come amiss, they said, a hint that if the Ghamidi had not been shunted aside for so long and there had been job opportunities for its young men, they might not have been drawn to al Qaeda training camps across the border. The Zaaran tribe was better off, the tribesmen complained, and asked for equal treatment. They did not pass up the chance of extracting tax breaks and credit lines on terms as favorable as those on offer in the cities.

Sheikh Khwali headed back to Riyadh to fetch answers for the next round of palaver.

Once satisfactory responses are forthcoming from the royal government, the tribal chiefs are required by negotiating etiquette to ask the intermediary what the royal government wants in return. The royal emissary will then lay down his ceasefire proposal for acceptance by the al Qaeda units integrated in the tribal framework. The Ghamidi leaders will most likely reply in the affirmative — they have already hinted as much. In this way, largesse handed out from Riyadh will also benefit the al Qaeda elements operating within the tribe. This turn of affairs will be tantamount to Riyadh's implied acknowledgement of the Islamic network's legitimacy for the first time since Osama bin Laden's Saudi nationality was revoked in the 1990s. Bin Laden's organization will have bought a comfortable ride on the back of an important Saudi tribe into the political heart of the Saudi kingdom — a position analogous to that of the Lebanese Hizballah, which practices terrorism quite openly while taking its seat in parliament in Beirut.


Teeth and Claws

Bush Team Arms Bremer with Reshuffled Goals

US policy-makers have decided to compensate for the manifest American inadequacies in Iraq by switching round their strategic objectives and bypassing the US-appointed Governing Council in Baghdad.

According to DEBKA-Net-Weekly's Washington's sources, accelerated military offensive operations will be given priority over setting the regime in order. The bulk of US forces in Iraq will be drawn in from the outlying corners and massed in the central region of Baghdad and the Sunni Triangle, leaving the Kurdish and Shiite regions with greater autonomy over their security and civil affairs. British and other non-American contingents will operate with local military units in the regions they now control south of Baghdad.

This is the broad upshot of the high-powered conference President George W. Bush called this week of his top team — Vice President Dick Cheney, defense secretary Donald Rumsfeld, secretary of state Colin Powell and national security adviser Condoleezza Rice.

The US civil administrator Iraq, Paul Bremer, flew in at short notice, canceling an appointment in Baghdad with Polish premier Leszek Miller, who had been inspecting the important Polish peacekeeping contingent in control of a large belt of the country south of Baghdad.

No sooner was the US administrator gone, when the current president of the Iraqi Governing Council, Jalal Talabani, advanced his own concepts for changes in the interim ruling body. As chief of one of the two largest Iraqi Kurdish groups, the Patriotic Union of Kurdistan (PUK), his views carry weight.

He was whistling in the wind. Contrary to media reports, US leaders were not primarily concerned with transferring broader political and security powers to the Iraqis at this time. DEKBA-Net-Weekly's sources in Washington say those reports were put out to mask the real substance of the White House deliberations. Their most important decisions were to launch without delay an aggressive military campaign to assert control of and secure Baghdad and to wage an ideological war that will wrest Falluja from the grasp of pro-Saddam forces as the pivot of their Sunni Triangle power base.

American officials in Washington and senior men on the spot — Bremer, Head of Central Command General John Abizaid and Iraq ground forces commander, Lieut. Gen. Ricardo Sanchez — are under no illusion. They are marching into one of the most decisive stages of the war for Iraq from a position of inferiority.

DEBKA-Net-Weekly's military and intelligence experts cite three reasons for the cards being stacked against the United States at this point:

A.
Enemy intelligence is more adaptable to ongoing circumstances than the undercover resources available to the coalition. It is better oriented to precisely choosing key objectives that could potentially swing the conflict round in favor of the deposed regime, mainly because it is fed from foreign intelligence sources.

B.
Tactically, the US administration's hands in Iraq are tied by its strategic linkage to regional and global interests. This linkage needs to be set aside long enough for the Americans to pull ahead and prevail in Iraq. As matters stand, the enemy is taking advantage of the Bush government's divided attention to get under its guard.

C.
Like shadows in the dark, enemy commanders adapt flexibly and swiftly to changing military and political situations on the ground. Small mobile pro-Saddam units take advantage of their intimate knowledge of the terrain. US forces find it hard to beat off their hit-and-run tactics.

Five panaceas for three weaknesses

US policy-makers are fully aware of their Achilles heels in Iraq but, according to DEBKA-Net-Weekly's Washington's sources, while broadly divided on how to handle Saddam's challenge, have reached consensus on the following five steps.

1.
Kurdish leaders in the north and Shiite leaders in the south will take charge of internal security matters and civil affairs. Local Iraqi and, if available, non-American, military forces — British, Polish, Ukrainian and Italian contingents operating in the south — will stay where they are now.

2.
The bulk of American troop strength in the north and south will be pulled together into the Iraqi heartland, centering on Baghdad and the Sunni Triangle flashpoints. This redeployment will mass most of the 125,000-strong American force in central Iraq.

3.
1. and 2. will effectively partition Iraq into four semi-autonomous regions — Kurdish in the north, Shiite in the center and south of Baghdad, British-controlled in the southwest up to the shores of the strategic Shaat al-Arab waterway and a US-controlled belt in the southeast up to the Iranian border. American forces will retain control of Iraq's southern oil fields (jointly with the British), central Iraq and the northern oil fields of Kurdistan. Bremer's civil administration will be the supreme coordinator for the three other areas.

This new order will substantially diminish the powers of the US-appointed Iraqi Governing Council beyond even its current ineffectiveness. But key councilors such as Shiite leader Abdel Aziz al-Hakim, Talabani and his fellow Kurdish leader Massoud Barzani, will remain in decision-making roles.

4.
Efforts will be made to tightly seal the Iraqi-Syrian border which is Saddam's primary lifeline for supplies of guerrilla manpower, Al Qaeda infiltrators and the funds to underwrite his war activities.

Syria needs a tough lesson

The participants at this week's White House conference on Iraq came away with the sense, cited by DEBKA-Net-Weekly's sources, that somewhere along the line, Washington will have no option but to take tough action against Syria. They saw fresh intelligence reports identifying as Syrian nationals most of the suicide bombers who struck with deadly effect in Baghdad, Fallujah, Tikrit, and Ramadi. The reports suggested that Syrian military intelligence, which maintains a massive presence in Lebanon and its capital Beirut, must have known about the departure of Lebanese Al Qaeda operatives for Saudi Arabia on missions of terror.

Intelligence data reaching the White House conference revealed that Syrian president Bashar Assad had given Lebanese president Emil Lahoud and Hizballah leader Hassan Nasrallah the nod to oust Lebanon's prime minister, billionaire-entrepreneur Rafik Hariri. Until now, Assad has been wary of laying hands on Hariri, a US favorite and the man Washington believes could promote a pro-American policy in a highly strategic part of the Middle East. But the Syrian leader has now added Lebanon to the list of countries and places where he has no inhibitions about striking against US interests.

This past week, the Assad regime was dragged through the mud in Washington. He has yet to make some response. On Tuesday, November 11, the US Senate followed the House of Representatives' lead and voted to impose sanctions on Syria, citing its aid to guerrillas fighting US forces in Iraq and support for terrorist groups such as Hizballah. Washington had finally decided that Assad had gone too far.

The above four steps will be paced in accordance with developments unfolding on the ground. Their definitions are phrased loosely enough to give Bush and US officials in Iraq plenty of leeway and flexibility.

Cheney and Bremer square off

5.
According to DEBKA-Net-Weekly's sources, the wording of this clause reflected some particularly confrontational dialogue between Cheney and Bremer.

The vice president demanded extreme and fast changes in the local administration and policing of Iraq. He was willing to go as far as disbanding the Governing Council.

An emotional Bremer urged approaching change with caution. He opposed disbanding the Governing Council, and also challenged the first four steps. Evacuating US troops from northern and southern Iraq, he argued, made no sense because the Shiites would take over the Rumeila oil field, one of Iraq's largest, while the Kurds would seize control of the Kirkuk fields in the north. What would the United States be left with, Bremer asked? Fallujah and Baquba? The Iraqis would get the oil and the United States would be stuck with a guerrilla war.

The solution, Bremer maintained, was to divide the administration of Iraq along geographic rather than national and religious lines.

Amid rumors that his job was on line, Bremer went on to address criticism echoing from the national security council that he had erred badly by failing to recruit ex-soldiers from Saddam's army for service under the American flag — a policy that has since been amended.

Bremer responded wryly by holding up the example of Yasser Arafat, who in 1994 was permitted under interim peace accords with Israel, to locate on the West Bank and Gaza Strip with his army. What happened was that foreign elements rushed to supply him with the weapons and logistical support he needed to launch an "uprising" six years later.

"Did that prevent a terrorist war inside Israel?" Bremer asked and went on to maintain: If the United States had recruited Saddam's army as soon as major combat died down, his guerrillas would have launched themselves against US forces much earlier and inflicted many more American casualties.

Bush's top team finally agreed that Bremer would return to Baghdad with a bag of flexible options with regard to the Governing Council. In general, he would try and work in harness with a small group of Iraqi councilors prepared to shoulder clearly-defined areas of responsibility. The future of a permanent Iraqi government and elections would be settled at a later stage. The top priority for now would be to crush the guerrilla campaign, to stop the daily bloodletting of coalition troops and damp down any Iraqi illusions of a possible comeback by Saddam Hussein. To this end, American troops will be gathered in from the northern and southern regions and concentrated in Baghdad and the Sunni Triangle.


Focus on Sunni Triangle

Takeoff for New Strategy in Last Week of Ramadan

According to DEBKA-Net-Weekly's military and intelligence sources, the American troop pullback from northern Iraq began quietly straight after a giant Chinook transport helicopter was downed on November 2, killing 16 American soldiers. By then it was apparent that an Al Qaeda squad trained in the operation of shoulder-launched SA-7 ground-to-air missiles was aiming at US helicopters from the Tikrit region north of Baghdad.

It was also apparent to US intelligence that the missile squad was being fed confidential data by external sources which had somehow managed to penetrate US headquarters or tap into signals detailing the itineraries of senior American officers across Iraq by helicopter.

The Chinook was not the terrorists' first target. On October 25, they were less successful. They shot down a Black Hawk near Tikrit, mistakenly believing that visiting US deputy defense secretary Paul Wolfowitz was on board.

It was a close call: the official took off only three hours earlier.

Four days after the Chinook was destroyed, another pair of Black Hawk choppers came under missile attack. One was carrying Two-star Maj. Gen. Thomas Romig, the army's judge advocate general, and his staff. The other one was shot down and six of its passengers killed, including two senior US officers.

The next night, the United States launched a massive armored raid on Tikrit, supported by a heavy aerial bombardment. The assault, which DEBKA-Net-Weekly's military sources report flattened most of the southern half of the city, signaled a major turning-point in the conflict with Iraqi guerrillas. The hare had turned on the hounds. Operation Iron Hammer had been launched, first in the Sunni Triangle, then in Baghdad. US forces would now respond with an iron fist to any guerrilla attack — first in civilian areas where intelligence showed attacks originated or where the assailants were backed by logistical support.

The intelligence information presented to this week's White House emergency session on Iraq attested to the attacks on US troops being mounted by an alliance of Saddam loyalists and diehard Baathists, Syrian and Arab fighters and Al Qaeda gunmen who by now number hundreds of combatants from Chechnya, Saudi Arabia, Pakistan, Sudan, Egypt Kuwait, Jordan and the Palestinian territories.


Unsuspecting Jordan

DEBKA-Net-Weekly's intelligence sources have learned that during a raid in Tikrit, US forces uncovered a list of 120 Jordanians, some of whom had arrived and others were on their way to the Sunni Triangle to fight the Americans. Washington handed over the roster to Jordan's King Abdullah in Amman, who was deeply shocked. The Jordanians, whose military intelligence is usually excellent when it comes to Muslim subversive activities, had not caught on to the Al Qaeda recruiting operation in the Hashemite kingdom, which was conducted through a small and relatively obscure organization called the Muslim Labor party — a radical branch of the Jordanian Muslim Brotherhood.

Until they saw the list, the Jordanians had no suspicion of the extent of al Qaeda's penetration of the country. Once it was appreciated, Jordan scrambled to declare a state of military emergency to chase down the extremists who had not yet departed for Iraq.

The discovery in Jordan prompted a disturbing question in Washington: Might not Al Qaeda have mounted similar recruitment drives in other Middle Eastern and African countries — operations US intelligence did not spot?

The information corresponded with news from Riyadh that Al Qaeda operatives from Lebanon were responsible for the explosion that killed at least 18, five of them children, in the Muhaya residential compound over the weekend.

In another attack, pilgrims from Nigeria were tasked by al Qaeda with the mission of blowing themselves up in a crowd of some one million people in Mecca for the Muslim pilgrimage of Omra during Ramadan's little Hajj.

Two-tier al Qaeda recruitment

US intelligence counter-terrorism authorities have come to the conclusion that Al Qaeda is running a two-tier recruitment drive in the Muslim world. One group is posted to Iraq, while the other is scattered around the Middle East — primarily Saudi Arabia, the Gulf, Egypt, Sudan and Israel, instructed to carry out terrorist strikes according to a set timetable. Intelligence officials predict an upsurge of terrorist activity over the next few days in Baghdad and other Iraqi cities, accompanied by attacks elsewhere in the Middle East. The outbreak is expected to peak during President George W. Bush's state visit to London from Tuesday, November 18 to Friday, November 21.

Al Qaeda will strive to pull off terrorist operations in Europe too, notably in London.

Israel is also bracing for intensified terrorist attacks. Its military forces and police are on the alert for what one Israeli official called "a mega-terrorist attack using non-conventional weapons".

While specific intelligence warnings make no mention of targets inside the United States, America figures strongly in Al Qaeda's electronic messages and chat rooms.

The Americans began evacuating the Shiite provinces of southern Iraq, save for large bases, in September in the expectation of relative calm. But the savage suicide attack on Italian military police headquarters in Nassiriya Wednesday, November 12, in which 18 Italians and 13 Iraqis were killed and some 80 wounded, proved the Americans wrong again: Saddam's fedayeen, Arab fighters and Al Qaeda disrupted Washington's plans again.

The deposed Iraqi president's military planners are working according to a system of "fanning out" their forces. While the United States is concentrating its military might in the Baghdad area and the Sunni Triangle, the Iraqis and their allies are widening their attacks to the areas evacuated by the Americans in a bid to persuade non-US forces to quit and go home. In short, Saddam's forces and Al Qaeda mean to turn the tables on Washington and clamp a chokehold on US forces in central Iraq.


Focus on Fallujah

A New Forest of Madressas

It is not surprising that on Thursday, November 13, a self-styled "Al Qaeda Commander in Iraq", called Al-Hijazi began issuing statements from a base "south of Fallujah".

This Sunni Muslim town, 65 km (40 miles) west of Baghdad, has undergone a metamorphosis since the fall of the Iraqi capital seven months ago. Once a bastion of Saddam Hussein's secular Baath party, Fallujah is now the hub of Saddam loyalist-al Qaeda collaboration in the guerrilla-cum-terror war against the United States. It has been reinvented, as the Americans recently discovered, as a quasi-holy city. Sunni Muslims point at the "Sunni Najef", while the Shiites have dubbed the town the "Sunni Qom" — a reference to Khomeini's legendary center of revolutionary Islamic scholarship in Iran.

Saddam's tacticians, as DEBKA-Net-Weekly's sources have reported before, decided that the best way to dramatically broaden their support base was to Islamize their campaign against US forces. To this end, Fallujah has been converted into a home away from home for al Qaeda zealots who have spent a fortune building the town up into a center of radical religious learning.

In six months, hundreds of madressas have sprung up in Fallujah, modeled on pre-Afghan War Pakistani Peshawar and present-day Damascus.

Friends of Saddam, as soon as they were appointed as principals of the Islamic schools, began publishing fatwas with immediate effect on the Sunni population.

A multimillion dollar project

Intelligence assessments put the amount the deposed president's backers have poured into the madressa project of Fallujah as ranging from $20 million to $30 million. Some was spent to hire Iraqi, Syrian, Egyptian and Saudi religious instructors. Funds were also invested in building dormitories complete with kitchens and dining halls with accommodation for thousands of Muslim students gathered in from all corners of Iraq.

As in Peshawar and Damascus, the madressas serve the dual function of fundamentalist indoctrination and combat training for terrorists and guerrilla fighters.

DEBKA-Net-Weekly's intelligence and counter-intelligence sources report that Fallujah and its new facilities have been designed for the intake of the thousands of fighters and intermingled hundreds of al Qaeda terrorists who are flocking to Iraq from Syria, Saudi Arabia, Pakistan and Iran. Saddam spent a comparative pittance on this armed infrastructure while the US Congress debated the allocation of $87.5 billion for Iraq's reconstruction. Both of America's enemies funnel millions a month to support the madressa network as the opponents of US President George W. Bush scoff at any attempt to link Saddam diehards with al Qaeda.

Fallujah also provides Iraq's Sunni Muslims with an alternative source of funds to save them turning to the US-appointed Governing Council or the Americans. For Fallujah's Sunnis this is a windfall. No longer must they depend on Baghdad for income or travel to Tikrit to prove their loyalty to Saddam. They can avail themselves of funds in Fallujah and boast of their independence.

The doctrine imparted in the madressas has spread through the ranks of Saddam diehards.

Baathists suddenly find themselves in a holy war against the Americans, burning with fanatical fervor to fight the infidels. Fallujah has become their main base of operation — but also the arena for joint action with their allies, Arab fighters and al Qaeda terrorists. The religious schools are logistical bases where decisions are made, ad hoc, as to which of the martyrs-in-the-making will embark on missions against the occupiers.

The system, well tried in Peshawar and the semi-autonomous regions between Pakistan and Afghanistan, sets up an almost impermeable shield against infiltration by foreign intelligence services and a capture-proof sanctuary. Typically, a group of 10 to 15 fighters will set out from a madressa to stage a grenade attack in Ramadi or Baghdad. They then return via back roads to the schools, where they blend into a student body of thousands. US troops bursting into a religious school in pursuit of a crew which minutes before had fired SA-7 shoulder-held anti-aircraft missiles or rocket propelled grenades, are met with rows of "students" hunched over their Korans. US military planners are caught between a rock and a madressa. Shelling a religious school is an unholy option. And there is no way in heaven or earth that the Iraqi Governing Council can solve this dilemma, no matter how much administrative responsibility it takes on.


Palestinians

Bush's Sharm el-Sheikh/Aqaba Initiative Lies in Tatters

The final death knell for President George W. Bush's Middle East initiative, affirmed at the sea resorts of Sharm el-Sheikh and Aqaba last June, was sounded Wednesday, November 12, the day Ahmed Qureia and his new Palestinian government were sworn in.

Bush's failure on the Israeli-Palestinian front went largely unnoticed. World attention was riveted that day on the terrorist massacre of Italian troops in the south Iraqi town of Nassirya and the mounting coalition death toll in Iraq.

Not so in the Palestinian territories. There, Yasser Arafat — despite his failing health — received a stream of delegations from across the West Bank rushing to congratulate him on his great victory. The wily Arafat, again outsmarting everyone around him, managed to maneuver Qureia into forming a government in which the prime minister has only one lone supporter, Washington's favorite Palestinian reformer, finance minister Salam Fayyad. Abu Ala's government is simply packed with Arafat's cronies and loyalists from his pre-Oslo days in Tunis — a recipe for continuing anarchy and corruption in the Palestinian administration and an impasse in peace negotiations with Israel.

Even Fayyad, frequently praised by Bush for fighting for financial transparency in a Mafia-like Palestinian Authority, watched helplessly when Arafat reduced his authority to the point that he no longer shows up at his finance ministry desk. The man who put the Palestinian budget on the Internet is now operating in virtual reality out of his own home. Adding insult to injury, Arafat left him in the government simply to avoid giving Washington, international donors and the World Bank where Fayyad once worked, a pretext for badgering him about corruption.

In sum, Arafat has sidelined all the Palestinian officials who advocated an end to terrorism and the introduction of government reforms which Bush saw as crucial steps on the road to Palestinian statehood.

Abu Ala, who supports the Bush line, may sit in the prime minister's chair, but his hands are empty; he holds no real power. At best, he can act as go-between for Arafat in contacts with the Bush administration and Israeli prime minister Ariel Sharon. Even that task would be thankless given that neither Bush nor Sharon want to have anything to do with the "rais".

The new Palestinian government is therefore no more than a puppet with Arafat pulling the strings from his Muqata compound in Ramallah.

At the same time, Israel is not off the hook. Defense minister Shaul Mofaz heard some tough talk during a visit to Washington this week about Sharon's failure to create any diplomatic momentum in the direction of peace moves or the relief of human suffering in the Palestinian areas ruled by Arafat.

"Everything Arafat does is influenced by events in Iraq," Mofaz tried to argue.

"Everything you do affects the situation in Iraq," the state department and national security council shot back.

DEBKA-Net-Weekly's sources in Washington report that both sides had little to say about Syrian president Bashar Assad, agreeing he was one "very strange bird".


HOT POINTS

8 November: In between chasing terrorists, Israeli police have their hands full investigating interlocking allegations of sleaze and scandal in high places. Tales of financial corruption are tossed to and fro freely by Israel's top political players — with or without foundation. Many fizzle out before they come to court or on appeal, but in the meantime these affairs are natural and regular headline grabbers.

For some time, the left-leaning Labor opposition has had it all its way with the make-a-deal Greek Island affair which daily buffets Likud prime minister Ariel Sharon and his Laurel and Hardy sons, Knesset Member Omri Sharon and business executive Gilead Sharon. All three are also faced with charges of illegal fund-raising for Sharon's 1999 primary coupled with overseas money-laundering.

Two similar charges against Labor prime ministerial candidates were recently dropped. However, this week it was Labor's turn for a dose of the sour medicine. Tuesday, November 4, four people were arrested on suspicion of complicity in bribing National Insurance Institute officials to "forgive" the lion's share of a debt owed by the country's biggest banking institution, Bank Hapoalim, on behalf of its employees. Another two arrests made Thursday, November 6, were of suspected "arrangers" of the illegal deal. Back in 1994, Bank Hapoalim — the "Workers' Bank" that has grown into the largest and most powerful capitalist force in the country — owed the National Insurance Institute 86 million shekels (nearly $20 million). After five years of haggling, in 1999 - by which time the bank's once-patron Labor Party was in power - presto-chango, three quarters of the debt melted away leaving a paltry 20 million shekels (the equivalent of $.4.5 million) for payment.

Two former members of the Hapoalim Bank group's staff received a 7.7million shekel check for their "services".

This river of money flowed freely under the noses of the bank's directors, Labor cabinet ministers, heads of the NII, and the Controller of Banks. This looks like being the first installment of a multimillion shekel saga with more to come.

10 November: Though similar in operational method to the May 12 triple suicide attack in Riyadh, al Qaeda's suicide assault on the Muhaya housing complex in the Saudi capital Saturday night November 9 exposed two new features. Osama bin Laden's terrorists are creeping up on one of their premier targets, the Saudi royal house; and their recruitment base of non-Saudi zealots is expanding. The attack occurred around half a mile from the homes of top royal princes, including Prince Nayef, the interior minister responsible for the kingdom's crackdown on al Qaeda.

The Saudi authorities have beefed up security strength in Mecca, center of Muslim shrines and pilgrimage, after a series of clashes in the city prefaced the Muhaya bombing — in an exact parallel to the May 12 assaults. On November 3, Saudi police killed two armed men and captured six. On November 6, two terrorists blew themselves up in a shootout to evade capture. On the same day, the Riyadh police shot a third terrorist who had reached the capital from Mecca. November 9, the suicide bombers struck.

The Saudis found to their surprise that, while two of the captured terrorists, were Saudis, four were Nigerian. They revealed that their al Qaeda commanders had planted several African killer-suicide cells in the kingdom among the stream of Ramadan pilgrims making for the Muslim shrines. Each cell has two or three Saudi "escorts", who lead them to hideouts where they pick up weapons and explosives and are then taken to their targets. The number of these infiltrator-cells is unknown. They are thought to have scattered among the pilgrimage cities of Mecca and Medina as well as other cities, primarily Riyadh.

DEBKAfile's terrorism experts note the Saudi authorities face an uphill task in fighting homegrown fundamentalist terror. On top of the conventional terror prevention methods, like human and electronic surveillance and intelligence gathering, they must bargain perpetually for the cooperation of local tribal, clan and clerical leaders in handing over al Qaeda suspects. Saudi security officers in pursuit of terrorists dare not venture into a district before the local chiefs and imams have been won over without risking a wholesale civil war. Nayef's best preventive measures this time were defeated by the widening rift between the throne in Riyadh and the local chieftains and clerics, some of whom help al Qaeda operatives elude their pursuers - especially

in the southern provinces and the Hijaz region of Mecca and Medina on the Red Sea coast, where the Ramad tribe reigns. For the decades that the Sudeiri branch of the royal house has ruled the government in Riyadh, the southern and eastern tribes have been left in the cold while royal favors were bestowed on the tribes of the central Nejd region. The alienated tribes, long denied privileges and senior positions in central government, are now settling their scores with Riyadh by granting solidarity to the anti-royal resistance posed by al Qaeda.

A further danger is posed by al Qaeda's success in developing another center of recruitment, Kuwait. DEBKAfile's counter-terror sources reveal exclusively that since mid-October, hundreds of al Qaeda recruits in Kuwait are entering Iraq directly or through Saudi Arabia. The scale of this traffic is beginning to rival the movement of Arab and other al Qaeda fighters into Iraq from Syria. The Muhaya bombing exposed the breadth of al Qaeda's Middle East operations and objectives. Operating from bases in Iran, Kuwait, Saudi Arabia, the Persian Gulf, Syria and Lebanon, the fundamentalist extremists are acting on a broad front against America and its allies, the Saudi throne and Israel.

11 November: The suicide bombing attack Saturday night November 9 that devastated Riyadh's Muhaya compound and killed scores was the work of an al Qaeda Lebanese team, according to our intelligence and counter-terror sources. With this strike, Osama bin Laden's Lebanese arm, from centers in Tripoli, Beirut and the Palestinian Ain Hilway refugee camp, made its debut on the stage of international terror.

In our 10 November special analysis on this page, we revealed the presence of Al Qaeda's Nigerian cells secreted into the kingdom among the swarms of pilgrims visiting Mecca for Ramadan. One such cell was thwarted in its attempt to bring off a terrorist attack in the Muslim holy city. The Lebanese unit succeeded in its mission in Riyadh. But security forces in Riyadh, Jeddah and Mecca are braced for further assaults. A high terror alert was declared Monday, November 10, in the Sudanese capital of Khartoum, where the US embassy suspended operations.

Al Qaeda's targeting of the Arab expatriates of the Muhaya compound and the threat to Khartoum are joined by a common denominator. The first is the residential center of Lebanese Christians employed in Saudi Arabia and was struck deliberately by Lebanese Muslims on Ramadan. In Sudan, the Muslim government is in advanced peace negotiations to end the rebellion of the Christian south. Al-Qaeda-linked websites have called for action to abort Sudan's conversion from "an Arab Muslim state to a country ruled by Christians."

Israel is extremely disturbed by the effective teaming up of Lebanon-based al Qaeda operatives with local cells in Saudi Arabia for suicide strikes against non-Muslim targets in the Middle East. Bin Laden's banner declares war "Crusaders (Christians) and Jews." DEBKAfile has reported the belief that al Qaeda sleepers have been present in Palestinian areas for some time. The network may also have cells planted in Israel waiting for their wake-up signal.

11 November: On Monday, November 10, Israeli defense minister Shaul Mofaz said that as long as Syria provides bases for Palestinian terrorists for attacks in Israel, his government reserves the right of self-defense. He is reported to have said this to US defense secretary Donald Rumsfeld during their two-hour discussion in Washington which also ranged over the upgrading of bilateral intelligence exchanges and the Iranian threat to the region.

Last month, Syria made its position clear when spokesmen in Damascus warned Israel of a second warfront opening up on the Golan Heights by means of "Syrian citizens mounting attacks on Israeli settlements."

DEBKAfile's Washington sources evaluate Mofaz's warning as the opening shot of a campaign to persuade Vice President Richard Cheney and presidential security adviser Condoleezza Rice, whom he is scheduled to meet in the course of his Washington trip, that the Bush administration needs to take a tougher line with Syrian president Hafez Assad — and not just over Damascus' sponsorship of Palestinian terrorism.

Our sources stress that this round of Israeli and Syrian rhetoric is aimed more at influencing the debate dividing the Bush administration on how to handle Damascus than at winding up border tensions — although sudden eruptions of violence cannot be ruled out.

12 November: The Palestinian legislative council voted 45:13 with 5 abstentions for the new cabinet presented by Ahmed Qureia Wednesday out of a sense of fatalism. Many lawmakers openly called it "Arafat's government", deeply disturbed by the control he retained over Palestinian security forces and the presence of Palestinian Authority old-timers accused of corruption. Powerless to stand up to the ageing Arafat, Abu Ala followed his dictation and won the prize. He was sworn in as the second Palestinian prime minister. So as not to share the fate of his predecessor, Mahmoud Abbas, he made sure to cede most of the authority needed to arrest the rapid breakdown of Palestinian governance into terror-generated chaos to the man responsible for this sorry state, Yasser Arafat. He gave up on his own candidate for interior minister in charge of the security forces, Gen. Nasser Yousef, who would have been acceptable to Israel, and bowed to Arafat's choice — Hakam Balawi.

The keynote speech Arafat delivered to the council clearly represented the Qureia government's "mandate." Amid the fine words of Arafat and Qureia about a Palestinian and an Israeli state living side by side in security, the word terrorism was never mentioned, least of all any intention of disarming or fighting terrorists as required in the first clause of the Middle East road map.

This turn of events has dismayed US and Israel who see no prospect of an end to violence, coherent Palestinian governance or bringing the Middle East roadmap back on track until Arafat is out of the picture. All their efforts to sideline him have come to naught. The installment of the Qureia government is a clear sign that the Palestinian body politic and people may be in ruins but Arafat remains immovably at its center.

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