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Iraq, Iran sanctions could ease in 2001

By Paul Taylor
Diplomatic Editor

LONDON, Dec 18 (Reuters) - So long, "dual containment". Western policy towards Iraq and Iran - both still on the United States' blacklist - is set for a shake-up in 2001.

U.N. economic sanctions against Iraq and U.S. sanctions on Iran could both be eased or allowed to expire next year as new President George W. Bush looks for a way out of increasingly untenable policies, diplomats and analysts say.

But there could be renewed U.S. military action against Iraq before policy switches, some experts forecast. "If Al Gore had won the (U.S. presidential) election, he'd have changed policy on Iraq very quickly. With Bush it will take a bit longer because the Republicans promised to get tough on (President) Saddam Hussein," said a senior European diplomat.

"But once they've spent a few months sounding and acting tough, I think they will come to the same conclusion as us: you can't oust Saddam with air power, sanctions or a feeble Iraqi opposition, and it's time to change policy," he said.

The term "dual containment" was coined in 1993 by Martin Indyk, now U.S. ambassador to Israel, to define a strategy of trying to isolate both Iraq and Iran, seen as twin threats to American interests and to pro-Western states in the Middle East.

The policy, heavily influenced by Israel and its supporters in Washington, caused tension between the United States and its European allies, which resisted U.S. attempts to stop their oil companies investing in Iran.

Now international pressure to ease the embargo on Iraq has swelled, and European firms are snapping up contracts in Iran while the U.S. oil majors chafe at President Bill Clinton's executive orders barring them from doing business there.

Sanctions against Iraq are fraying at the edges and even Washington's most loyal ally, Britain, is privately pushing for an exit strategy, diplomats say.

But the Bush administration's first instinct, predictably, is to try to make the existing policy work. Secretary of State-designate Colin Powell said on Saturday he would work with American allies to breathe new life into sanctions against Iraq.

"They have not yet fulfilled those agreements and my judgment is that sanctions in some form must be kept in place until they do so," Powell said. "We will work with our allies to re-energize the sanctions regime."


Hardline Bush advisers Robert Zoellick and Richard Perle promised during the campaign a more energetic use of U.S. military power and money to try to overthrow Saddam.

Zoellick proposed using U.S. air power to detach part of Iraq from Saddam's control for use as a base for military operations by the opposition Iraqi National Congress. Perle said Bush would implement fully the 1998 Iraq Liberation Act by giving arms, funds and military training to the opposition.

"We can expect a period of very unpleasant rhetoric while they experiment with how to kill Saddam and his entourage," said Rosemary Hollis, head of the Middle East programme at London's Royal Institute for International Affairs.

"The Bush people ridiculed the 1998 air strikes on Iraq as "Operation Desert Pinprick". We are told a Bush administration would look for pretexts to bomb Iraq seriously," she said.

However, Hollis said three factors might change the new administration's mind when it comes to review policy:

- the Israeli-Palestinian crisis has changed regional dynamics and the United States no longer has the same leeway to act;

- Saddam is no longer isolated but gaining money, strength and influence because of high oil prices, improved ties with his neighbours and Arab anger at U.S. support for Israel;

- the U.S. military and European allies argue that using air power or arming a faction-ridden Iraqi opposition simply won't work and could end in a fiasco.

Bush may also be reluctant to risk jolting world oil markets when prices are high and supplies tight, other experts say.


Once military options have run their course or evaporated, the chances are the Bush administration will look for a less politically costly, more sustainable way of containing Iraq.

Diplomats believe Washington and London will make another push to get U.N. arms inspectors back into Iraq as a prelude to suspending sanctions, as provided for by a Security Council resolution adopted last year but rejected by Baghdad.

U.N. Secretary-General Kofi Annan is due to begin a dialogue with the Iraqis next month, just before Bush's inauguration, on how to break a two-year impasse on weapons inspections.

Optimistic Western officials believe Baghdad may eventually agree to admit U.N. monitors if it receives assurances that their mission will not be open-ended but lead to a closing of the files on Iraq's nuclear, chemical and missile programmes.

However, Republican hardliners do not trust the United Nations to carry out serious intrusive inspections. Some would rather abandon what they see as a flawed effort and rely on the threat of massive U.S. bombing if Washington has evidence that Iraq is redeveloping weapons of mass destruction.

Diplomats on both sides of the Atlantic said a possible alternative might be called "lift and indict".

The West would agree to lift the U.N. ban on Iraqi imports of all civilian goods, maintain the ban on military and dual-use goods, keep control of Iraq's oil revenues through a U.N. escrow account and at the same time indict Saddam and his key aides for war crimes to keep him politically isolated.

The only embarrassment might be that most of the alleged crimes occurred when Saddam enjoyed Western backing, and the West was largely silent about them at the time.

Western nations covertly backed Saddam's 1980-88 war against Iran, when Iraq used chemical weapons against Iranian soldiers and Kurdish civilians, because Tehran's drive to export Islamic revolution scared Western governments and their Arab clients.

Only after Iraq invaded Kuwait in 1990 did the West turn against Saddam and highlight his human rights record.


Improving ties with Iran has been on the U.S. agenda since the election of reformist President Mohammad Khatami in 1997.

The U.N. Year of Dialogue among Civilisations in 2001, an initiative proposed by Khatami, may provide the opportunity.

The Clinton administration this year lifted some minor sanctions and voiced regret for past U.S. meddling in Iran.

But Iranian and U.S. domestic politics have prevented a reopening of relations. Hardline anti-American clerics blocked Khatami's careful efforts to improve ties and the pro-Israeli lobby in Congress limited Clinton's room for manoeuvre.

Washington still accuses Tehran of sponsoring "terrorism", seeking to sabotage Arab-Israeli peace efforts and pursuing nuclear weapons, as well as human rights abuses.

However, a turning point could come in the second half of 2001, after the likely re-election of Khatami in May, and once the Iran-Libya Sanctions Act expires in August, experts say.

Analyst Philip Gordon of the Brookings Institution said the law, which imposed fines on foreign oil companies that invested in the two countries is most unlikely to be extended.

Vice President-elect Dick Cheney has advocated allowing U.S. oil companies to return to Iran - a decision Bush can take without congressional involvement.

"We are already open to dialogue with Iran. The question is when the Iranians will be ready," Gordon said, adding that violence in Israel and Lebanon, if it were seen to be sponsored by Tehran, could yet prevent a rapprochement.


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