Whose fault is it that jihadists get into Iraq across the Syrian border? There is a lot of blame to go around according to latest reports.

America's fault. This is according to a high placed Iraqi politician. McClatchy's quotes the official explaining that roughly half the 300 million dollars being spent in Anbar province for reconstruction is going directly into the pockets of resistance groups. A portion of this gets spent turning Syrian border guards so they "look the other way." The story is here. 

Despite several devastating U.S. military offensives to rout insurgents, the militants – or, in some cases, tribes with insurgent connections – still control the supply routes of the province, making reconstruction all but impossible without their protection.

One senior Iraqi politician with personal knowledge of the contracting system said the insurgents also use their cuts to pay border police in Syria "to look the other way" as they smuggle weapons and foot soldiers into Iraq.

"Every contractor in Anbar who works for the U.S. military and survives for more than a month is paying the insurgency," the politician said, speaking on condition of anonymity because of the sensitivity of the matter. "The contracts are inflated, all of them. The insurgents get half."

Senator Lieberman has blamed it on the Syrian government and believes the solution is closing down Damascus airport.

Dennis Ross blames it on Iraq's Prime Minister Maliki, because he is making nice with the Syrians instead of getting tough with them. He also blames it on Bush, because he refuses to embrace the Baker – Hamilton report and set benchmarks. Ross argues that if America used leverage and refused to give more money to Maliki on condition that he treat Syria as an enemy, he would, and Syria would shape up or be treated to Maliki's enmity. You might have noticed that Ross is getting tougher on Bush now that elections are in full swing. Obama just announced that Ross is his main Middle East go to guy.

Is Nasrallah, the leader of Hizbullah, really an Iranian devotee? 

A pro-Israeli reader posted a story written by Roee Nahmias on Israel's largest webnews site, Ynetnews. It claims that "Nasrallah’s allegiance is not to Lebanon."

The story purports to be "an interview given by Hizbullah Secretary-General Hassan Nasrallah to Iranian national television." It quotes him:

"We are ready to be torn apart, spliced into tiny pieces, so that Iran will remain exalted. For if Iran remains exalted, we too shall be exalted. I am a lowly soldier of the Imam Khamenei. Hizbullah youths acted on behalf of the Imam Khomeini, with the aid of Imam Hussein, and sent their blessings to the Iranian people," said Nasrallah in an interview with reporter Bijan Nobaveh on the day marking the start of the Second Lebanon War according to the Persian calendar.

Another commentator quickly pointed out, "The Ynet story posted by Akbar is based, without attribution, on a report by the Saudi outlet Elaph." Elaph is not know for its accuracy, and Nasrallah is not so stupid as to say something that his enemies would chew him up for, such as the above statement.

Al-Hayat is banned in Saudi Arabia. (Thanks Norman)

Saudi Government Bans Leading Arab Paper
By SALAH NASRAWI
Associated Press Writer

6:48 AM PDT, August 28, 2007

CAIRO, Egypt — Saudi Arabia has banned the influential Arab newspaper Al Hayat from distribution in the kingdom, just days after it reported a Saudi man had served as a key figure for an al-Qaida front group in Iraq, journalists and diplomats said Tuesday.

One of the country’s most influential journalists said the ban was a sharp retreat from growing press freedoms in Saudi Arabia.

Al Hayat’s Saudi edition did not appear on newsstands Monday and Tuesday, several Arab diplomats told The Associated Press in telephone calls from Riyadh, the Saudi capital. They spoke on condition of anonymity because of the issue’s sensitivity.

Saudi information officials had no immediate comment. Al Hayat officials in London, the newspaper’s headquarters, also had no comment.

But a Saudi journalist with knowledge of the situation said the Ministry of Information and Culture had imposed the ban after the paper published an article Monday about the Saudi man, Mohammad al-Thibaiti, thought to be a key figure in the Iraqi extremist group, the Islamic State of Iraq.

“They (authorities) confiscated the copies before going to stands, and imposed an indefinite ban on the paper,” said the journalist, who is a member of the Saudi Press Association. He spoke on condition of anonymity because he feared reprimand.

A private distribution firm in the kingdom, the National Company of Distribution, also confirmed the ban.

One of Saudi Arabia’s most influential journalists, Dawood al-Shirian, who is a former regional director at Al Hayat and still writes a weekly column, said he believed there was a different reason for the ban.

Al-Shirian, who now is deputy head of Al-Arabiya TV, said Al Hayat staff had told him that Saudi Information Minister Iyad Madani had asked that some writers be stopped from appearing in the newspaper, but that the paper had refused to comply.

Madani previously had been considered something of a reformer.

Israel's Defense Minister Ehud Barak said of Bashar al-Assad: ""Asad junior is like Asad senior: coolheaded, careful and willing to check opportunities. He has positive elements that could allow for talks to develop. The key to beginning negotiations is in his hands."

Here is the Jerusalem Post story:

[Report by Gil Hoffman: "Baraq: With 20,000 Rockets, Hezbollah Stronger Than Before"]
The Jerusalem Post website on 28 August
BBC MidEast: Text of report in English by Israeli newspaper

Defence Minister Ehud Baraq sent contradictory messages about Syria to members of the Knesset Foreign Affairs and Defence Committee on Monday [27 August]. In his first address to the committee since becoming defence minister in June, he said Hezbollah, which receives its rockets via Syria, had increased its supply from an estimated 10,000-15,000 before the Second Lebanon War to some 20,000 today. He said Hezbollah had also acquired antitank missiles and was trying to re- establish its infrastructure in southern Lebanon.

On the other hand, Baraq said Syria was "showing preliminary signs of easing tensions with Israel". He said Syrian President Bashar al-Asad was acting like his father, former Syrian president Hafiz al-Asad. Baraq said four Israeli governments had made diplomatic progress in talks with the father, adding that the son could not be ruled out as a future peace partner. "Israel does not have an interest in escalating tensions with Syria, and I think the Syrians don't have an interest in escalating tensions with us," he told the committee.

"Asad junior is like Asad senior: coolheaded, careful and willing to check opportunities. He has positive elements that could allow for talks to develop. The key to beginning negotiations is in his hands."

France is prepared to open up in a "spectacular way" to Syria if it stops meddling in Lebanon, French foreign minister Bernard Kouchner said in a newspaper interview published on Sunday.

Kouchner stated he hoped Damascus would "not create obstacles to Lebanon's sovereignty" when it holds presidential elections next month. "If Syria does not create obstacles to Lebanon's sovereignty … then France will open up to Damascus in a spectacular way," Kouchner told Le Parisien newspaper.

"But for this to happen, we would need guarantees," he added.

The Lebanese parliament is expected to elect a new president between September 24 and November 24.

Cousseran Ends Beirut Mission, No Progress, Naharnet

In an interview with Newsweek magazine, French Foreign Minister Bernard Kouchner, who visited Iraq this month, said he told Secretary of State Condoleezza Rice that al-Maliki has "got to be replaced." Al-Maliki said the Iraqi government would demand an apology.

Syrian-Saudi Tension over Lebanon, Naharnet.

"Syria Attacks Saudi Arabia to Reaffirm Its Control of Lebanon," writes Huda al Husseini, a prominent Lebanese writer, in al-Sharq al-Awsat.

BEIRUT —  Around 100 people led by a Sunni cleric rallied outside the Saudi embassy in Beirut Sunday to voice support for ambassador Abdel Aziz Khoja who left the country in the face of death threats.

Waving Lebanese and Saudi flags, the demonstrators carried placards hailing the role of oil-rich Saudi Arabia, a key financier of Lebanon and a staunch supporter of the beleaguered Western-backed government of Prime Minister Fuad Siniora.

"We came to express our support for the policy of Saudi Arabia, and condemn those who have dared to hit out against the kingdom," said rally organizer Sheikh Hisham Khalifeh, head of a Sunni clerical organization.

The demonstration came after the ambassador revealed in an interview with the Saudi-owned daily Asharq Al Awsat that he had left the country August 17 after being threatened with death.

"There were threats against the Saudi embassy and against my person," he told the London-based paper.

A member of Saudi Arabia's advisory Shura Council pointed the finger at Syria, claiming that proxies of Damascus in Lebanon could be behind the alleged threats.

"Syria is not blameless with regard to these threats. Syria's agents in Lebanon … could be behind these threats," Mohammad Al Zulfa said.

Khoja had been involved in efforts to broker an end to the rift with pro-Syrian factions that has paralyzed Siniora's legislative agenda.

Early last week, he held talks with the pro-Syrian speaker of parliament, Nabih Berri, who has refused to recognise the Siniora government's legitimacy since six pro-Syrian ministers quit last November.

UK wants to engage with Iran, says Brown's Mideast envoy 

Syria elects municipal councilors, UPI, Aug. 26, 2007

Syrians went to the polls Sunday to elect nearly 10,000 municipal councilors across the country.

The two days of voting, to end Monday afternoon, capped low-key campaigning between independent candidates and candidates from the National Progressive Front, or NPF, the ruling coalition, reported Alalam Satellite TV.

NPF candidates won 172 of the 250 seats in Parliament in an April election. Independents won the remaining 78 seats.

The NPF is headed by Syrian President Bashar al-Assad, 41, the son of the late President Hafez al-Assad.

Al-Assad was re-elected president in May for a second seven-year term in a referendum that saw him take more than 97 percent of the vote

Senator Lieberman Will propose legislation to ban Damascus Airport. Here is the World Tribune article sent by t-desco (Thanks).

Damascus airport called Al Qaida hub

Here is a little vanity, today's NPR show for which I have a bit. To listen, click here.

Iran and Syria: An Alliance Shaped by Mutual Foes by Deborah Amos 

Alison Brooks, who wrote this fine article on Syria's stock market for Syria Today, allowed me and my family to share her apartment with her in Damascus this summer. Here is a picture from this summer.

 .

Great Expectations
Alison Brooks reports on the preparations for the opening of the Damascus Stock Exchange
Syria Today, August 2007

Observers of Syria’s multifaceted insurance, banking and capital markets reform programme, launched in 2005, are now fixing their gaze on what many hope will be the jewel in its crown: the Damascus Stock Exchange (DSE).

The launch of the DSE is officially set for the first quarter of 2008, but even that may be optimistic given the exacting preparations required by the various would-be market players.

Whenever the opening bell rings, public interest in the new stock market promises to be keen. “We did our own internal study of Bank Audi Syria customers,” says Bassel Hamwi, vice chairman of the DSE as well as head of the Lebanon-based private bank which has been operating in Syria for two years. “We discovered that 72 percent of our sample not only know that a stock market is about to be launched, but also plan to invest in it.” Hamwi points out that Syrians have always been traders: “They are comfortable taking measured risks and they especially like equity-type risks.”

There are currently few investment outlets in Syria, apart from real estate and bank deposits. Many Syrians ignore the banks and prefer to take holdings in companies. This is why most over-the-counter IPOs which have taken place here, both before and after the establishment of a regulator, have been heavily oversubscribed. However, of the hundreds of large and successful – mostly family-owned – companies in Syria, a mere 46 have completed IPOs. The new stock market is therefore expected to absorb large amounts of liquidity, as has been the case with other Arab stock markets.

“Syria is an unusual case,” Hamwi says, “of putting the cart before the horse. Stock markets are typically very organic types of structures, which grow from the ground up – and then comes the regulator. In this country we are doing it backwards. We are starting with the regulator and the regulator is building the market.”

That regulator is the Syrian Commission for Financial Markets and Securities (SCFMS). The commission has now done most of the groundwork, including publication of the licensing regulations and code of practice for financial intermediaries. However, decisions are still being made and goal posts can still be moved.

For example, by early June the commission had issued provisional licenses to six financial intermediary companies, four of which are majority foreign-owned. Then, on June 17, the SCFMS announced that Syrian individuals or corporations would have to be majority stakeholders in all financial intermediary firms. Previously, no percentage had been specified.

This announcement took many by surprise. One of the four foreign-owned firms is Pioneers Syria which, while having some Syrian shareholders, is majority owned by the giant Pioneers Egypt. Says Khaled al-Tayeb, a vice chairman of parent company Pioneers Holdings and board member of Pioneers Syria: “The decision was indeed unexpected. But it is not a problem and we will of course comply with all regulations. What is important for us is to be on the ground from the beginning, contributing our broad experience and know-how to help make Syria’s new capital markets initiative a success.” Pioneers Syria is licensed to carry out the full gamut of services: dealing, brokerage, underwriting, investment management, investment trusteeship and safe custody.

Nationality is an issue which works both ways, however. Mahmoud Sukkar is the CEO of Fortune Financial Consultants, a Syrian company with experience as a broker in online markets for a range of financial instruments. Fortune has applied for a license to offer both brokerage and consulting services. Sukkar personally put together the comprehensive application file required by the commission and was confident that it would meet with approval. While the application was not rejected, Sukkar was told that he needed as a partner a foreign brokerage firm licensed in one of the neighbouring countries which already have a stock market such as the Emirates, Dubai, Jordan, or Egypt.

“I think we should separate ownership from management,” says Sukkar, who has just completed a Masters degree at the Arab Academy of Financial Sciences. “I already had job applications from Jordan, from real experts, PhDs. I had the staff lined up when I made my application. So the commission should have no problem. Why are they asking for foreign ownership?”

Human resources deficit

Clearly, the commission would rather be safe than sorry. With the exception no doubt of Sukkar and a handful of people like him, the level of financial knowledge and expertise among Syrians is extremely low, for the simple reason that no capital markets as such have existed until now. Recruitment and training will both be significant challenges for the DSE itself and for the financial intermediaries on whom the new market will depend. Partnership with an experienced foreign company offers the advantage of a built-in training opportunity for new Syrian staff who can work alongside experienced colleagues and even enjoy a training stint in the partner’s country.

Indeed, much advice and training will be needed even by the Syrian companies hoping to be listed on the new exchange. For starters, almost all of them will have to change their legal status from general partnerships to limited liability companies as an initial step before turning them into joint stock companies. But the greater challenge will be for them to adopt standard accounting practices that not only separate personal and family funds from company funds, but that also truly reflect their financial performance.

“In the past,” explains Hamwi, “companies were structured on a tax-management basis. That was the sole purpose of the company. You have 40-odd years of tax-management practices, to be generous, and you are talking about every kind of tax conceivable. The tax environment was such that people really had to be creative.”

Not one to miss an opportunity, Sukkar has decided that his company, Fortune, will focus initially on providing advice to companies, to help them make the transition. “I don’t think brokers will do great business, at least in the first two years, as the volume of transactions will be insufficient. We think the best business in the beginning will be financial consulting.”

In the new environment, if they want a stock market listing, companies will have to publish balance sheets that truly reflect the state of the business. They will need to increase their stated capital and when they do this, there will be a new and higher tax assessment. However, a new law is expected which will help family companies to make the transition either by levying a nominal flat tax on them, perhaps 1 percent, or by exempting them altogether. In addition to the tax incentives being offered, there are many advantages to having a listing, including ease of exit and entry and enhanced attractiveness to investors, resulting in a better quality of equity.

For these reasons, it is expected that many companies will seek a listing. Others may balk however at the high levels of transparency and disclosure required. If the “carrot” of tax and other incentives fails, it is possible that a “stick” will be employed at some stage, such as making a listing mandatory for certain types of companies.

On the investor side, whether participation in the Syrian stock market will be mainly institutional or mainly retail remains to be seen. Views differ on this question, even among the DSE Board of Directors who are still debating this and other issues. Some see it as almost purely a retail market, envisaging people in the villages buying and trading shares. Others prefer to start with an institutional market where Syria’s banks, insurance companies and new asset managers would be the main investors, and work their way towards a retail market.

Prudence will prevail

Whichever way it goes, there is a clear trade-off between achieving financial market liquidity and efficiency, on the one hand, and achieving economic and financial stability on the other. It is evident by now that both the DSE and the commission are more concerned with the latter than with the former.

Mohammad al-Jlilati is vice chairman of the SCFMS Board of Commissioners. He said that while there was no single model for the DSE, the commission studied the regulations and the legislation applying in all the Arab countries that have stock markets: Abu Dhabi, Saudi Arabia, the Emirates, Dubai, Kuwait, Doha, Egypt and Jordan. “We looked at all these regulations and chose those which best fit our conditions,” he said.

When asked about how the commission would address the problem of insider trading, which contributed to the spectacular collapse of the stock market in the Gulf last year, he explained that monitoring for such activities would be strict: “Any board member or employee or auditor who relates insider information to an investor will face up to three years in prison.” According to Jlilati, when a company is about to release its financial results, the commission will for 10 days monitor the financial dealings of people associated with the company. In addition, if ever the SCFMS is convinced that a deal has been done on insider information, the transaction will be cancelled and the perpetrator prosecuted.” But in the absence of morality,” says Jlilati, noting that similar regulations were in place in the Gulf States, “no law in the world can stop the leaking of insider information. What we have done is take the best international standards and incorporate them into our regulations.”

All indications are that the new stock market will be highly regulated and only allow the “best of the best” companies to be listed on the Big Board. Volatility will be kept in check by means of 2 percent up and down limits. “There may not be a lot of liquidity initially,” concedes DSE vice chairman Hamwi. “But then, over time, you start allowing higher volatility in the market. You start allowing more margin trading. You start allowing leverage, you introduce more instruments, etcetera.”

“We at the DSE need to first prove that we are worthy of the trust of the investors, that we’re worthy of the trust of the commission, that we’re worthy of the trust of the companies who are going to list and also of the brokers and other intermediaries,” he adds.

Two parallel markets

The commission has issued a draft of its proposed listing requirements for comment, but has not yet finalised them. What is clear is that there will be two markets initially: the main stock market and a parallel, alternative market, each with its own listing requirements and trading rules. According to the draft proposals, to be listed on the main stock exchange, a company will need a three-year track record, fully paid-up capital of SYP 300m, and at least 200 shareholders. In addition, it will need to have recorded an average net profit equal to 5 percent of its capital in the previous two years. For the alternative stock market, the requirements are somewhat looser: one year of operation, SYP 100m of capital, and 100 shareholders. However, trading regulations may be less favorable.

“It is not clear yet whether all companies will have to start out in the alternative market,” says Raed Karawani, a partner in the Karawani Law firm, which represents a number of brokerage firms seeking licenses from the commission. “Presumably if a company meets the requirements for the main market, it can be listed there from the outset. But the commission will be very strict with things like disclosure, transparency, and compliance.”

Indeed, very few companies are likely to meet the requirements initially, though Syriatel is mentioned as a possible exception. “The idea,” Karawani says, “is to get as many companies as possible to list their shares on the alternative stock market initially. This will give them time to move up the learning curve in terms of trading regulations and corporate governance, as they also become more aware of the advantages of a listing on the main market.”

An effective and globally integrated financial structure is critical if Syria is to improve economic efficiency, better allocate resources, and foster growth and social prosperity. The Damascus Stock Exchange promises to contribute significantly towards such benefits.

Alison Brooks is an experienced financial trainer with a Masters degree in International Finance from Georgetown University and a licence in Arabic from the Sorbonne Nouvelle. She moved to Syria last year to refresh her Arabic and hopes soon to offer capital markets training here.

Issue: August 2007

Also see the very good article on Syria's Private Universities in the same issue of Syria Today by Phil Sands and Obaida Hamad

University Challenge

Syria and Israel: The Changing Military Balance and the Prospects for War

Washington, DC, August 20, 2007- Syria and Israel: The Changing Military Balance and the Prospects of War

Anthony H. Cordesman

The political and military relations between Syria and Israel continue to remain strained, and there have been reports that both nations may be heading towards a new round of fighting on the Golan. The Golan has been the scene of recent military exercises by both sides, and is the most likely contingency in the event of a conflict.

The attached report is a rough working draft of an analysis of the trends in the Israeli-Syrian balance, and in each country's military forces. It examines the prospects for a future Syrian-Israeli war, and focuses on characteristics of a potential conflict in the Golan region.

The conduct and aftermath of the 2006 Second Lebanon War between Israel and Hezbollah had a significant impact on the military strategies of both Israel and Syria. The report details how these and other events have affected recent military developments in Damascus and Jerusalem, and offers a comparative perspective on recent defense and military planning in the two states.

In addition, the report presents a comparative analysis of the land, air, and naval military forces of Syria and Israel. It also discusses comparative military expenditures the trends in arms imports, including the most recent arms transfer agreements between the two states and outside powers.

It is being circulated in draft form both to provide background for media and other analysts, but also to obtain comments, suggestions, and corrections. Your suggestions and comments will be much appreciated, and incorporated in future updates. Please email them to Anthony H. Cordesman at [email protected]

To find the full Report Click Here (fixed!)

http://www.csis.org/media/csis/pubs/070815_cordesman_israel_syria.pdf

Lebanon's 2006 war with Israel gets particular attention on its first anniversary. Here is a cross-section of the articles with a few of their conclusions.

Tallying up Lebanon's war a year later
By Rami G. Khouri, Daily Star, Saturday, August 18, 2007

Lebanon has been the main loser from last year's war

Hizbullah now finds itself in a much more difficult position than it did a year ago…. More troubling for Hizbullah is the criticism it has elicited among some Lebanese who were once admirers or neutral observers, but who now blame it for triggering the war, paralyzing the government, and weakening the economy.

The Lebanese government for its part is not in much better shape. It battles on four fronts simultaneously…

The continued expansion and popularity of fundamentalist Sunni Islamist groups, both militant jihadists as well as non-violent salafists, is the most dramatic and troubling ongoing development throughout the region.

Conditions in Palestine itself also have deteriorated in the past year. There is no sign that the US will mediate this issue in a balanced andjust manner, pull back from its strong pro-Israel bias, or engage the democratically elected Hamas leadership. Nevertheless, the revived American peace-making rhetoric is fascinating, if it reflects sincere acknowledgment that resolving the Arab-Israeli conflict justly is the most important single step that can be taken toward addressing the many other conflicts that plague the modern Middle East.

Jonathan Cook: The Second Lebanon War, a Year Later

Conclusions:

Israel:

* established legitimate grounds for Hizbullah's attack on the border post by refusing to withdraw from the Lebanese territory of the Shebaa Farms in 2000;

* initiated a war of aggression be refusing to engage in talks about a prisoner swap offered by Hizbullah;

* committed a grave war crime by intentionally using cluster bombs against south Lebanon's civilians;

* repeatedly hit Lebanese communities, killing many civilians, even though the evidence is that no Hizbullah fighters were to be found there;

* and put its own civilians, especially Arab civilians, in great danger by making their communities targets for Hizbullah attacks and failing to protect them.

It is clear that during the Second Lebanon war Israel committed the most serious war crimes.

United Nations Peacekeepers in Southern Lebanon: One Year After the War

By Andrew Exum and Gerri Pozez, August 16, 2007.

Citigroup warns Lebanon's Paris III optimism fading
Bank says reforms must proceed, Daily Star, Wednesday, August 15, 2007

BEIRUT: International investment bank Citigroup warned this week that the optimism that followed the Paris III donors' conference in January 2007 may fade away, due to the continuous internal political bickering which is paralyzing the Lebanese government's work and business activity in Beirut.

Also, the political instability is hindering reforms, on which donor assistance are contingent, a report by Citigroup said.

From the LATimes, here (via Friday Lunch Club)

"…The reconstruction of Lebanon after last summer's war was meant to strengthen the U.S.-backed Lebanese government of Prime Minister Fouad Siniora. Hundreds of millions of dollars poured in from U.S.-friendly Persian Gulf countries …
Instead, as government officials acknowledge, the rebuilding effort in badly damaged areas of southern Lebanon, south Beirut and the Bekaa Valley has mostly highlighted the government's weakness…"

Hezbollah's Creepy New Museum.
New Republic (subscription), DC: by Zvika Krieger. Earlier this week, I found myself standing in the courtyard of Beirut's newest museum in front of the warped propeller of a Yasur CH-53 Sea …

Lebanon: One Year On FrontPage magazine.com – The unremitting Israeli hand-wringing over the war’s “errors, mistakes and failures” cannot obscure the fact that Hezbollah suffered a significant military defeat at the IDF’s hands. Firstly, it lost between 600 and 700 of its most experienced fighters, more than were killed in the previous 20 years. Israeli losses were low by comparison.

Sharaa delivered a loaded speech a few days ago, criticizing Saudi Arabia's foreign policy for being in a state of paralysis because it could neither act independently of the US nor influence US policy positively. He lamented the disunity and "disintegration" in the Arab world, attacked Arab countries that are establishing diplomatic relations with Israel and are thus creating a "rift" in the Arab world, and criticized Saudi Arabia, which, he said, is refusing to maintain good relations with Syria. For an English translation read Memri's summary of Sharaa's speech here. It is an important statement of where Syria stands and how it sees the foreign policies of not just Saudi Arabia, but also the US, Israel, Lebanon, and Iran. (If Memri is blocked in Syria, let me know and I will post the entire thing in English.)

The Saudis responded with an anti-Syrian blast of their own yesterday, claiming that Syria is the country without a proper policy in the region. The question that seemed to be bandied about was whose fault it was that Syrian-Saudi relations were so bad. Sharaa said that Syria wanted good relations, but that Saudi Arabia prevented them. He pointed to the recent Iraq security meeting in Damascus to which the Saudis had refused to send even a low level deputy.

An anonymous Saudi responded as follows:

“The government of the Kingdom of Saudi Arabia has followed with great surprise the distasteful statements recently made by … Shara, which included numerous lies and fallacies aimed at harming us,” said the statement, quoting an unnamed official sourced and carried by the official Saudi Press Agency SPA late on Thursday.

“Talk about the paralysis of the kingdom’s Arab and Islamic role does not come from a rational and prudent person, as this role is well known to everyone … Perhaps Mr Shara had a slip of the tongue and meant by paralysis the policy he speaks for.”

"God willing, every Syrian and Saudi is keen on maintaining and strengthening this (Arab) brotherhood, despite the abominable voices and their owners who will vanish in the wind.”

This spat comes just as Prime Minister Maliki of Iraq is due to visit Damascus, where he will meet with top Syrian politicians. Saudi Arabia is not pleased with the Maliki government, which it accuses of being bad to Iraqi Sunnis and good to Iran and Shiites. Syria has complained about the same thing, but is nevertheless improving relations with Iraq. It hosted a security conference for Iraqis and neighbors a week ago. It cancelled an Iraqi opposition conference just before that.

Why is Syria engaged in this rapprochement right now?

Sami Moubayed has a very good article about Maliki's visit here. Even he seems a bit perplexed, as Maliki's government is not popular in Syria. Assad has given it a cold shoulder in the past. As Moubayed writes:

There are millions of Iraqis, mainly Sunnis, who do not trust either Maliki or the political system of the post-Saddam era. It is one thing for them when pro-American regimes recognize this government, but completely something else when this recognition comes from a credible neighbor like Syria; a country still seen in the eyes of millions as the only remaining champion of Arab nationalism and anti-Americanism.

Syria actually helped legitimize Maliki in the eyes of Iraqi skeptics. In March 2007, Syria attended a security meeting in Iraq, then followed up by attending the Sharm al-Sheikh summit in Egypt, which resulted in the much-publicized meeting between Moualem and Rice. The two officials discussed Iraq.  

I have long been doubtful that Syria would embrace US policy in Iraq by throwing its support behind Maliki's government. Here is why I think Syria is reversing its policy, even if only in part. It is only a guess. One is that Syria is indeed frightened by what Iraq might look like should Maliki's government collapse. It is anxious that greater chaos in Iraq will negatively impact Syria. Two is that Syria is using its pro-Iraq policy to break out of its diplomatic isolation, which is largely imposed by the US. Nevertheless, Sharaa was not kind to the US in his speech and all but dismissed US sponsored peace talks between Israel and the Abbas government in Palestine.

Syria has only recently begun to feel confident that it has won its battle against the US. It no longer sees destabilization by the US or economic strangulation as its number one foreign policy concern. It now feels reasonably confident that the US will begin pulling out of Iraq within a year, not only because the US military cannot sustain the numbers in Iraq, but because most presidential front runners in the US are talking about a US withdrawal, even if not immediately. This means that Syria, along with Iraq's other neighbors, will inherit the Iraq mess reasonably soon. It will also inherit the Maliki government for better or worse, if it hasn't collapse by then. Syria and Iran would probably prefer to inherit the Maliki government than any of its alternatives. I am not sure Saudi Arabia has made this calculation yet. In any event, Syria calculates that cooperating with the Maliki government even if it does collapse can no longer do it any harm.

Having a relatively weak Shiite coalition government in place in Iraq is better for Syria than chaos.

Saudi Arabia's position toward the Maliki government is unclear. Some Saudi officials have indicated that their government will support Sunni Iraqi militias against a Shiite led government that is pro-Iranian. Syria has indicated that it could pursue such a policy as well in the past. It has give asylum to Sunni opposition members and hosted Iraqi opposition group meetings. This common Saudi-Syrian policy of favoring Iraq's Sunnis led me to conjecture in the past that once the US pulled out of Iraq, Syria and Saudi Arabia would work toward elaborating a common pro-Sunni policy in Iraq. Saudi Arabia's refusal to send a delegate to the security conference in Damascus argues against this interpretation. Perhaps a reason for Sharaa's evident anger at SA's refusal is because Syria has been counting on a Saudi-Syrian rapprochement as the US prepares to withdraw from Iraq. Whether his outburst was motivated by differences over Lebanon, Iraq, or a combination of the two, I cannot say.

Syria has positioned itself between Iran and Saudi Arabia in Iraq. Iran and Syria do not see eye to eye on the future of Iraq. Sharaa, referring to Syria's relations with Iran, said that Iran's position on Iraq differs from that of Syria, which wants "a united, independent, and Arab" Iraq. But it has been silent on an Iraq controlled by Shiites. This is because Syria understands that Iraq will largely be controlled by Shiites in the future. Saudi Arabia does not seem to have entirely come to grips with this fact. Saudi Arabia's anti-Shiite policies, whether in Iraq or Lebanon present a major obstacle to improved Syrian-Saudi relations.

Here is Moubayed's summation of the history and reasons for improved relations between the two countries:

Iraqi Prime Minister Nuri al-Maliki is scheduled to arrive in Damascus for a two-day visit on Monday. This will be his first visit to the Syrian capital – where he lived as a refugee in the 1990s during the Saddam Hussein years – since becoming prime minister in April 2006.

Maliki is due to meet with Syrian President Bashar al-Assad, Prime Minister Mohammad Naji Otari, Parliament Speaker Mahmud al-Abrash, Vice President Farouk al-Shara and Foreign

Minister Walid al-Moualem. They are to discuss security and the political situation in Iraq.

Syria, which was reluctant at first to welcome the Iraqi leader, finally approved his visit, stressing that talks must deal with reconciliation, fair and balanced political representation of the Sunnis, amending the de-Ba'athification laws and articles in the Iraqi constitution that deal with federalism – a concept that the Syrians curtly refuse.

These were not conditions, the Syrians stated, but points of discussion. Moualem was quoted saying that his country "looks for finer political, security and economic relations with Iraq". The US has not commented on the visit, but if it produces results, then this is good news for the Bush White House.

After visiting Tehran this month, Maliki was scrutinized by President George W Bush, who said: "My message to him is, when we catch you playing a non-constructive role [with the Iranians], there will be a price to pay." This was in reference to Maliki's statement that Iran is playing a "positive and constructive" role in "providing security and fighting terrorism in Iraq".

Syria started to reconcile with the Maliki regime in late 2006. This came shortly after British prime minister Tony Blair sent an envoy to Damascus, telling the Syrians that it was in the international community's best interest that Syria recognizes – and supports – Maliki and the political system in Iraq.

Syria had tried before – during the era of prime minister Ibrahim al-Jaafari (Maliki's predecessor) – and invited him to Damascus, but the visit was vetoed by the US administration. The US, in 2003-06, had blamed the Syrians for all of the worries in Iraq, claiming that Syria was keeping lax security on the border and helping – or turning a blind eye to – insurgents crossing the border to fight the Americans. Syria repeatedly denied the charges.

By 2006, and after the Iraqi Study Group report in the US, it was clear to the US that the violence was not produced, nor supported by, the Syrians. Syria, however, could help control it. Blair's envoy had been to Washington DC and met with Secretary of State Condoleezza Rice, who seconded the British approach towards Syria. Syria responded promptly. It sent Moualem to Baghdad, where he received a red carpet welcome from Maliki, and opened up an embassy in Iraq.

Just for the record, here is the Saudi part of Sharaa's speech which set off the most recent round of the Syrian-Saudi feud. Sharaa spells it out very bluntly … The Mecca agreement was done in Damascus but the Saudis asked Syria if it was OK if they could announce it in Mecca.

The Saudis responded to Syria's claim that it had confected the PLO-Hamas cohabitation in these words: “Shara’s claim that the Mecca agreement … had been agreed in Damascus is an unforgivable insult to the Palestinian leaderships,” the Saudi statement said.

Addendum: (Sunday August 19, 2007) from AP:

DAMASCUS, Syria: Syria said Saturday that recent comments by the country's vice president reputedly criticizing Saudi Arabia were misreported, an attempt to quell growing tension over the remarks.

Saudi Arabia lashed out at Syria on Thursday after Vice President Farouk al-Sharaa reportedly said the kingdom — the Mideast's key Sunni power player — had become semi-paralyzed and was to blame for Palestinian infighting.

But Syria's official SANA news agency quoted an unnamed official Saturday as denying al-Sharaa criticized Saudi Arabia. Instead, he stressed his country's desire to heal the rift with Riyadh.

"The brotherhood between the Syrian and Saudi people is a real one that has withstood different crises … and Syria is aimed at reviving Arab solidarity and strengthening it to serve the national and pan-Arab interest," the official was quoted as saying.

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