Some very interesting news from Champress (Thanks Alex)

1) Farouk Shara: There will be a new Syrian government before end of the year.

2) Assad will visit Tehran next month

3) German, Italian and Spanish foreign ministers communicated with Walid Mouallem.

4) Spanish Prime minister might visit Damascus next fall.

5) Syria will focus its attention on Iraq next. A number of meetings with Iraqi leaders is planned.

According to Thomas Dine (former director of AIPAC) and now a member of The Search for Common Ground, the meeting between the visiting Syrian delegation and AIPAC was not canceled, but delayed. He also said that the White House pressured on the State Department to cancel its meeting wth the Syrian delegation.

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Syrian Says Peace Agreement With Israel Possible During Bush Term.  
The Washington Times (7/25, Sands)

Reports Samir al-Taki, who is leading a "high-profile Syrian delegation" visiting Washington, said an Israeli-Syrian peace deal "could be signed by the end of this year, but that requires Bush administration involvement that has not been forthcoming." Taki, an adviser to Syrian Prime Minister Naji al-Otari, told the Times, "If the political will is there, we could achieve an agreement within three or four months."

More Syria talks following 'progress'
Jul. 25, 2008
HERB KEINON and TOVAH LAZAROFF , THE JERUSALEM POST

Israel and Syria are expected to hold a fourth round of indirect diplomatic talks in Turkey next week, amid reports that the two sides are dealing with issues such as borders, water rights, security, and normalization of ties.

The Washington Post's David Ignatius wrote Thursday, citing Syrian sources, that agreement was close in three areas: water rights, borders and security, with little progress having been made on normalization issues.

Officials in the Prime Minister's Office, who have kept all information about the indirect negotiations very close to the chest, would not confirm the report. Turkish officials, however, said it was difficult to speak about getting close to agreement while the negotiations remained indirect.

United States and Syria should talk (about everything)
Theodore H. Kattouf

THE recent compromise on power sharing in Lebanon spares the country further bloodshed, and allows its people to return to a modicum of normalcy. However, the underlying causes of the conflict remain, and Lebanon continues to be an arena where external powers play out their rivalries.

Unless and until Syria and the United States reach a grand bargain, the Lebanese will continue to pay the price.

It should now be clear to the most casual observer that Syria’s military withdrawal from Lebanon was hardly the end of its influence there. Iran and Syria are in an alliance to thwart US and Israeli objectives in the region whenever and wherever they can. Despite the overwhelming military advantages the United States and Israel enjoy over their adversaries, Iran and Syria have been particularly adept at playing the spoiler through proxies such as Hezbollah, Hamas, Iraqi tribal groups, and Shia militias.

Through much of its second term, the administration of US President George W. Bush has been loath to engage in a prolonged and serious dialogue with Syria, instead preferring attempts to isolate and marginalise its leadership. Syrian President Bashar Al-Assad, for his part, has borrowed pages from his late father’s playbook to demonstrate that there are no lasting solutions to regional problems without Syria. Yet even Turkish-brokered negotiations between Israel and Syria have not enticed the United States away from its policy of ignoring Syria diplomatically while throwing verbal jabs at the regime whenever it can.

The Israelis have been more pragmatic by far in dealing with Syria than has the Bush administration. The current Israeli government and its military/security leadership have concluded that they are “better off with the devil they know than the devil they don’t.”

This reasoning helps to explain why Israel went to great lengths in the summer of 2006 to assure Syria that it was not the target of Israel’s war with Hezbollah. It also helps to explain the lack of Israeli leaks after the bombing of an alleged nuclear reactor in Syria. Meanwhile, even after the Bush administration tried to discourage indirect Israeli talks with Syria about the Golan heights, Israel cautiously went ahead.

Both Israel and Syria recently concluded that making these talks known is advantageous to them. In the Israeli case, they can pressure the Palestinians for more concessions by suggesting they have another option for peacemaking. The more strategic reason is of course the hope that Syria can be weaned from its 30-year alliance with a nuclear ambitious Iran.

For its part, Syria wants to ensure its relevance and better position itself with the next US administration while the clock runs out on the current one. However, both leaderships know that even if they can agree on the terms of peace, the US government’s role is indispensable to concluding, supporting, and enforcing a treaty.

All of this leaves Lebanon in limbo. Hezbollah has demonstrated that there is no combination of other forces in Lebanon that can challenge its military predominance. And Hezbollah’s leader, Sheikh Hassan Nasrallah, has left no doubt that his spiritual guide is Iran’s supreme leader, Ayatollah Khamenei. As its influence with the group diminishes, Syria can no longer promise to disarm Hezbollah’s militia in the context of a peace treaty with Israel and a positive new relationship with the United States.

It can, however, shut down the Iranian supply pipeline to Hezbollah through Syrian territory. Syria could be even more Machiavellian and work with the United States and others to strengthen the more secular elements in Lebanese society in the context of full peace.

The Syrian regime cares first and foremost for its survival. If ushering in a new relationship with the United States and signing a peace treaty with Israel enhances its prospects for longevity, it will go that route – even at the expense of Iran and Hezbollah. If such a deal is not forthcoming, Syria will continue to play the spoiler role to the best of its considerable abilities.

It is important that a new US administration work with Israel and our Arab allies to concoct a strategy that can pry Syria away from Iran. Despite the longevity of their alliance, the two regimes – one secular, the other theocratic – have little philosophically in common other than their shared insecurities concerning Israel and the West.

Thankfully, Syria appears open to a grand bargain, including perhaps one that could stabilise Lebanon without compromising that country’s sovereignty, independence and territorial integrity.

(Theodore H. Kattouf is a former US ambassador to the United Arab Emirates and Syria. He is currently the president and CEO of AMIDEAST (www.amideast.org) and is on the Middle East board of Search for Common Ground. This article was written for the Common Ground News Service.)

UN Will Continue to Probe Syria's Secret Activities, U.S. Says
2008-07-24 14:45:58.480 (New York)
By Caroline Alexander

July 24 (Bloomberg) — Gregory Schulte, the U.S. ambassador to the International Atomic Energy Agency, said that United Nations inspectors will continue to investigate Syria's clandestine nuclear activities until the Syrian government cooperates.

He spoke to reporters in London today.  On the Syrian site that was destroyed in an Israeli air raid in September:

“It was a nuclear reactor that was very similar to the Pyongang reactor that the North Koreans are now dissembling. It's a reactor that wasn't well connected to the energy grid and is well designed to produce plutonium.

“The Syrians went to enormous lengths to hide this facility as they were building it.

“At one point, they realized it looked just a little bit like Pyongang on the outside, so they built a false ceiling and false walls around it to try and hide it, and went to enormous lengths to try and hide it after it was destroyed, including building a new building on top of it.'' On what happened when inspectors traveled to Syria in June to look at the site:  

“Inspectors were allowed to go to look at the site where the nuclear reactor was being built but they were not allowed to go to other sites which they requested visiting.

“IAEA inspectors did what they are very good at doing — they asked lots of hard questions and the Syrians weren't prepared to answer them, so the investigation of Syria's clandestine activities continues.

“We anticipate that there will be a report to the board of governors in September.''

On Syria's choices:

“Syria can do this the hard way or the easy way. The easy way is that if they act like Libya and say ok, we have been caught, here is our program, come in and look at it and we will explain it to you.

“The hard way is if they act like Iran, deny access, not answer questions, then like Iran they will find that they will be on our agenda for some time to come.''

Damascus Exchange May Take NYSE Technology, Chairman Says
2008-07-24 By Nadim Issa

July 24 (Bloomberg) — The Damascus Securities Exchange is in talks with NYSE Euronext, the word's largest stock exchange, about installing its trading platform, said DSE Chairman Rateb Al Shallah.

“I am heading to France in September to complete our negotiations with Euronext about installing their platform to our bourse to start our activities in early 2009,'' Al Shallah, said today in a telephone interview from Damascus.

The DSE will start trading in early 2009 even if it fails to agree a deal with NYSE Euronext or Nasdaq OMX Group Inc. because the exchange is in talks with another provider, he said, without identifying the company.

Jonas Rodny a spokesman for Nasdaq OMX in Stockholm, declined to comment.

Helena Cobban at Just World News writes: "Yesterday I was able to post onto my blog a fairly full write-up of my notes from the July 25 event at USIP in which Kim Kagan, Charles Knight, Colin Kahl and Rend al-Rahim (Francke) discussed the extremely important topic of timeframes (and in a subsidiary way, missions) for the US troop deployment in Iraq…..

The opportunity to hammer out a grand compromise with Iran is there, but Bush seems determined to prevent talks that could advance vital US interests
Flynt Leverett and Hillary Mann Leverett in the National Interest, here, via WPR via FLC.

"…In Lebanon, Bosnia and Afghanistan too, Tehran did much—not all, but much—of what was asked of it. For example, in official U.S.-Iranian negotiations over Afghanistan—in which one of us, Hillary Mann Leverett, participated from 2001 to 2003—the Iranians deported hundreds of suspected al-Qaeda operatives who had fled Afghanistan, warned that insufficient attention to postconflict stabilization would leave pockets of Taliban and al-Qaeda fighters to reemerge later, delivered important regional warlords to the bargaining table to support creation of a pro-American, post-Taliban political order under President Hamid Karzai, and dissuaded anti-American warlords from acting as “spoilers.”

The Effects of Rising Oil and Food Prices on the Middle East
By Paul Rivlin
Tel Aviv Notes: Editor: Bruce Maddy-Weitzman, July 24, 2008

Over the last 12 months, the international price of oil doubled, while in the twelve month period ending on March 1, 2008, the price of food, measured by the UN Food and Agriculture Organization’s composite index, rose by 50%. These developments have had major and differential effects on the economies of the Middle East, including changes in economic growth rates and a serious acceleration of inflation.
 
Oil prices and revenues

Middle East oil and gas exporters are expected to earn $830 billion in 2008, an increase of over $300 billion (or almost 60%) on 2007. This is due to the rise in the price of oil rather than increases in production. As a result, the six member states of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates  – are awash with funds. In contrast to the situation after the price rises of 1973 and 1979-80, they have been using the huge surpluses more carefully, and as their own banking systems have become more mature, a larger share of funds has been retained in the region. Despite this, they have also become major players on the international scene, acquiring foreign assets and partly helping to finance the enormous US balance of payments deficit. At the end of 2006, according to the Institute for International Finance, the GCC states possessed identified foreign reserves of $434 billion and unidentified reserves of $283 billion, a total of $717 billion. The estimates for 2007 and forecasts for 2008 suggest that Middle East oil producers will have balance of payments current account surpluses of almost $300 billion and $420 billion, respectively. The GCC states alone had a surplus of $227 billion in 2007 and is forecast to have a surplus of $332 billion in 2008. This implies that by the end of 2008 GCC total foreign reserves could reach $1.3 trillion. …..
 
The economic situation in the Middle East is ironic: oil-rich countries are now experiencing huge increases in income. These now exceed the high levels of the mid-1970s and early 1980s in real terms and in 2008 may even exceed them in per capita terms. At the same time, non-oil producers and small oil producers in the region are facing soaring import costs for oil as well as food, with serious macro-economic and distributional consequences. The sensitivity of these economies to the rise in food prices reflects the failures of their development strategies over many years.

The Middle Eastern Marriage Crisis – Brookings Institute

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