Order Code RL30728
CRS Report for Congress
Received through the CRS Web
The Persian Gulf:
Issues for U.S. Policy, 2000
November 3, 2000
Kenneth Katzman
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

The Persian Gulf:
Issues for U.S. Policy, 2000
Summary
No major confrontations or crises have occurred in the Persian Gulf since 1998,
but regional security challenges that could erupt into crises on short notice have not
been eliminated. Most observers agree that Iraq is contained militarily, unable to
rebuild its conventional forces and constrained in its ability to acquire technology that
could be used to build prohibited weapons of mass destruction (WMD). On the other
hand, the U.N. Security Council has become deeply divided on Iraq policy, and unable
to obtain a restart of U.N. weapons inspections, which ended on the eve of a
U.S./British bombing campaign against Iraq in December 1998. Administration
officials acknowledge that, without inspections, there is substantial uncertainty about
the state of Iraq’s WMD capabilities and activities, if any.
The Administration has moved to end twenty years of hostility with Iran since
the unexpected election in May 1997 of a relative moderate, Mohammad Khatemi, as
President. Administration efforts might have contributed to an apparent reduction
in Iranian support for international terrorism and an accelerated effort by Iran to end
its international isolation. However, Administration overtures toward Iran over the
past year have not yet brought Iran into a formal dialogue with the U.S. government.
Administration hopes that a moderating Iran might also slow its WMD acquisition
and development programs have not materialized, although most observers attribute
Iran’s commitment to those programs to the security threats Iran perceives on
virtually all its borders. Since the Islamic revolution in 1979, Iran is or has been at
odds with several of its neighbors, including the Gulf states (Saudi Arabia, Kuwait,
the United Arab Emirates, Bahrain, Qatar and Oman), Iraq, and the Taliban-ruled
Afghanistan, and it views Israel as an adversary.
U.S. efforts to contain the potential threats from Iran and Iraq continue to
depend on close alliances with the Persian Gulf monarchy states and on continuing
political stability in those countries. All of the Gulf states host at least some U.S.
forces that are performing missions to contain Iraq or monitor Iran. At the same time,
the United States is continuing a longstanding effort to forge closer cooperation with
and among the Gulf states on early warning and defense. The United States has also
applauded moves by some of the Gulf states to open their political systems, which the
United States believes will contribute to political stability. Greater popular
participation has made the Gulf governments aware of growing public sympathy for
the plight of the Iraqi people, and some of the Gulf states now appear reluctant to
host U.S. forces indefinitely or to back continued international sanctions or U.S. air
strikes on Iraq. Gulf sympathy for the Palestinians in the Israeli-Palestinian clashes
that broke out in September 2000 could also cause some Gulf states to reduce
security cooperation with the United States, although there are no signs of any
reduction to date. Some of the Gulf states are responding to Iranian overtures to
engage in low-level security cooperation with Iran, a trend that some U.S. experts are
concerned could lead to broader defense cooperation between the Gulf states and
their erstwhile Persian adversaries.

Contents
Threats and U.S. Interests in the Gulf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Iraq: U.S. Efforts to Contain and End the Threat . . . . . . . . . . . . . . . . . . . . . . . 3
Congressional Views . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Iran: U.S. Outreach Amid Continued Concerns . . . . . . . . . . . . . . . . . . . . . . . . . 7
Continued Administration and Congressional Concern . . . . . . . . . . . . 8
The Persian Gulf Monarchies: Coping With Internal and External Threats . . . . 10
Domestic Stability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Leadership Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Political Liberalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Economic Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Gulf Foreign Policy and Defense Cooperation with the United States . . . . 16
Defense Agreements and U.S. Forces in the Gulf . . . . . . . . . . . . . . . 18
U.S. Arms Sales and Security Assistance . . . . . . . . . . . . . . . . . . . . . 22
Joint Security/ “Cooperative Defense Initiative . . . . . . . . . . . . . . . . . 24
Conclusions and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Appendix 1. Gulf State Populations, Religious Composition . . . . . . . . . . . . . . 27
Appendix 2. UNSCOM Accomplishments and Unresolved Issues . . . . . . . . . . 28
Appendix 3. No Fly Zones in Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Appendix 4. Map of the Persian Gulf Region and Environs . . . . . . . . . . . . . . . 31
List of Tables
Table 1. Gulf Oil Exports, U.S. Imports, and % GDP, 1999 . . . . . . . . . . . . . . 15
Table 2. Comparative Military Strengths of the Gulf States . . . . . . . . . . . . . . . 16
Table 3. U.S. Troops in the Gulf and Host Nation Support . . . . . . . . . . . . . . . 21

The Persian Gulf:
Issues for U.S. Policy, 2000
The Persian Gulf region, rich in oil and gas resources but with a history of armed
conflict that has necessitated occasional U.S. military action, remains crucial to United
States interests. This report, which will be revised annually, discusses regional trends
and U.S. efforts to manage Gulf security challenges. The report is derived from a
wide range of sources, including press reports, unclassified U.S. government
documents, U.N. documents, CRS observations during visits to the Gulf, and
conversations with U.S, European, Iranian, and Gulf state officials, journalists and
academics. For further reading, see CRS Issue Brief IB92117, Iraqi Compliance
With Ceasefire Agreements
; CRS Issue Brief IB94049, Iraq-U.S. Confrontations;
CRS Issue Brief IB93033, Iran: Current Developments and U.S. Policy; CRS Issue
Brief IB93113, Saudi Arabia: Post-War Issues and U.S. Relations; and CRS Report
RL30383, U.S.-Gulf Cooperation Council (GCC) Trade and Investment: Trends and
Implications
.
Threats and U.S. Interests in the Gulf
Iran, Iraq, and the six Gulf monarchy states that belong to the Gulf Cooperation
Council (GCC, Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates, and
Oman) possess about two thirds of the world's proven reserves of oil. The countries
in the Gulf produced over 27% of the world’s oil supply in 1999, according to the
U.S. Energy Information Administration. Saudi Arabia and Iraq are first and second,
respectively, in proven reserves. Iraq, which is largely unexplored and in which new
energy exploration is barred by U.N. sanctions, might ultimately be proven to contain
more oil than does Saudi Arabia. Iran and Qatar, respectively, have the second and
third largest reserves of natural gas in the world; gas is an increasingly important
source of energy for Asian and European countries. Difficulties in the discovery and
transportation of oil and gas from the Central Asian/Caspian Sea countries ensure that
the Gulf will be a major source of energy well into the 21st century. All the Gulf
states, including Iran and Iraq, have an interest in the free flow of oil, but past political
conflict in the Gulf and broader Middle East has caused oil prices to rise sharply and
has increased hazards to international oil shipping.
The region is home to both Iran and Iraq, countries that have threatened U.S.
interests directly and indirectly. Iran and Iraq fought each other during 1980-1988,
and both have also fought the United States, although in differing degrees of intensity.
Iran and the United States fought minor naval skirmishes during 1987-88, the height
of the Iran-Iraq war — a war in which the United States tacitly backed Iraq. During
one such skirmish (Operation Praying Mantis, April 18, 1988) the United States
fought a day long naval battle with Iran that destroyed almost half of Iran’s largest

CRS-2
naval vessels. To liberate Kuwait from Iraq, which invaded and occupied Kuwait on
August 2, 1990, the United States deployed over 500,000 U.S. troops, joined by
about 200,000 troops from 33 other countries. That war (January 16 - February 27,
1991) resulted in the death in action of 148 U.S. service personnel and 138 non-battle
deaths, along with 458 wounded in action. The Gulf war reduced Iraq's conventional
military capabilities roughly in half, but Iraq is still superior to Iran and the Gulf states
in ground forces. Iran faces financial limitations, but there are no mandatory
international restrictions on its imports of advanced conventional weapons, and Iran
has been rearming since 1990.
In addition to their conventional forces, both Iran and Iraq have developed
weapons of mass destruction (WMD) programs. Iraq's missile, chemical, nuclear, and
biological programs, begun during the Iran-Iraq war, were among the most
sophisticated in the Third World at the time of Iraq's invasion of Kuwait. During the
1991 Gulf war, Iraq fired 39 Scud missiles at Israel, a U.S. ally, and about 50 missiles
on targets in Saudi Arabia. One Iraqi missile, fired on coalition forces on February
25, 1991 (during Desert Storm) hit a U.S. barracks near Dhahran, Saudi Arabia,
killing 28 military personnel and wounding 97. During the Iran-Iraq war, Iraq fired
enhanced Scud missiles at Iranian cities,1 and it used chemical weapons against Iranian
troops and Kurdish guerrillas and civilians. Iran's WMD programs, which are not
under international restrictions like those on Iraq, have made significant strides during
the 1990s with substantial help from Russia, China, North Korea, and other countries.
In July 1998, Iran tested its Shahab-3 (Meteor) ballistic missile (800-900 mile range),
which could enable Iran to threaten Israel, Turkey, and parts of Central and South
Asia.
Both Iran and Iraq are on the U.S. list of state sponsors of terrorism, although
annual State Department reports on international terrorism (“Patterns of Global
Terrorism”) have consistently deemed Iran a larger terrorist threat than Iraq. The
Islamic regime in Iran, which came to power in February 1979, held American
diplomats hostage during November 1979-January 1981, and the pro-Iranian
Lebanese Shia Muslim organization Hizballah held Americans hostage in Lebanon
during the 1980s. Since then, Iran has supported groups (Hizballah and the
Palestinian groups Hamas and Palestinian Islamic Jihad) that oppose the U.S.-
sponsored Arab-Israeli peace process and have occasionally carried out terrorist
attacks against Israelis. Some pro-Iranian groups have sought to destabilize some of
the Gulf states, although these groups have been less active over the past four years.
Press reports suggest Saudi investigators hold Iran at least indirectly responsible for
the June 1996 bombing of the Khobar Towers housing complex for U.S. military
officers, in which 19 U.S. airmen were killed. Iraq publicly opposes the Middle East
peace process, but it has only limited contact with the groups that are most active in
working to derail the process.
Both countries were first named in October 1999 as “Countries of Particular
Concern” under the International Religious Freedom Act (P.L. 105-292, October 27,
1The missiles were supplied by Russia but Iraq enhanced their range to be able to reach
Tehran, which is about 350 miles from the Iraq border. The normal range of the Scud is
about 200 miles.

CRS-3
1998). Iraq is considered by the Administration to be a gross violator of human rights
based on its treatment of dissidents and ethnic minorities, and the United States is
pressing for a war crimes tribunal for Saddam Husayn and eleven other Iraqi officials.
U.S. and U.N. human rights reports have accused Iran of numerous human rights
abuses, although not to the degree cited for Iraq.
The Gulf states face internal threats not attributable to Iran or Iraq. All six Gulf
states — Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates (UAE), Oman,
and Qatar — are hereditary monarchies. With the exception of Kuwait, they offer few
formal opportunities for popular participation in national decisionmaking, although
several of them are gradually opening up their political processes. Some of the Gulf
states, including Saudi Arabia and the United Arab Emirates, are undergoing
leadership transitions, and Bahrain's leadership passed to a new generation in March
1999, when the long serving Amir died suddenly. The decline in oil prices in 1998,
although not causing any overt political challenges to the Gulf regimes, prompted
several of the Gulf states to begin addressing serious economic weaknesses, including
the need for economic diversification away from reliance on oil exports for most
government revenues. The political popularity of their generous social welfare
systems left these programs largely untouched, despite the financial burden.
Iraq: U.S. Efforts to Contain and End the Threat
In May 1993, shortly after taking office, the Clinton Administration articulated
a policy of “dual containment” of Iran and Iraq. The Administration explained the
policy as an effort to keep both Iran and Iraq strategically weak simultaneously, in
contrast to past policies that sought to support either Iran or Iraq as a counterweight
to the other. Since 1997, signs of moderation in Iran have led to a slight warming of
U.S.-Iran relations, to the point where the Administration no longer publicly
characterizes its Gulf policy as dual containment. However, Iraq’s refusal to fully
comply with postwar U.N. Security Council resolutions has kept the United States
and Iraq at odds, more than ten years after the Iraqi invasion of Kuwait. The thrust
of Administration policy toward Iraq remains containment, with the added dimension
of promoting a change of regime.
Administration efforts to keep Iraq strategically weak and politically isolated
have undergone several adjustments since the Gulf war ended in 1991. During 1991-
1997, the United States and its allies relied largely on U.N. weapons inspections
UNSCOM), chartered by U.N. Security Council Resolution 687 (April 3, 1991) to
eliminate and prevent the rebuilding of Iraq’s WMD capabilities. U.N. Security
Council resolutions, including 661 (August 6, 1990), prevented Iraq from importing
conventional weaponry.
Iraq accepted U.N. weapons inspections by the U.N. Special Commission on
Iraq (UNSCOM) as long as Iraq believed that it would eventually obtain a ruling from
UNSCOM that all its WMD programs had been ended, and its WMD capable facilities
monitored. Under Resolution 687, such a ruling would open Iraq to the unrestricted
exportation of oil. By late 1997, Iraq apparently determined that the United States
would never accept any UNSCOM assessment that was sufficiently favorable to ease

CRS-4
sanctions, and Iraq decided to end its cooperation with UNSCOM. Beginning in
October 1997, Iraq obstructed the work of UNSCOM teams to the point where
UNSCOM withdrew from Iraq (December 15, 1998). In response to Iraq’s non-
cooperation, the United States and Britain conducted a 70 hour bombing campaign
(Operation Desert Fox, December 16-19, 1998) against Iraq’s WMD-capable
factories and other military installations. Since then, there have been virtually no
independent WMD inspections in Iraq, and the United States has had to rely on its
own intelligence capabilities to determine whether Iraq is rebuilding WMD. The
latest unclassified report to Congress by the Central Intelligence Agency, released in
August but covering the period July-December 1999, says that Iraq is rebuilding
facilities that could be used for prohibited WMD manufacture, but that there is no
hard evidence Iraq has reconstituted its banned WMD programs.2
To ensure that Iraq cannot use its still formidable conventional forces against
its neighbors, the United States and Britain patrol “no fly zones” over northern and
southern Iraq (see Appendix 3) in the “Northern Watch” and “Southern Watch”
operations, respectively.3 Together, the zones cover approximately 62% of Iraq’s
territory. In response to over 700 Iraqi violations of the no fly zones since Desert
Fox (as of October 2000), the United States and Britain have been striking Iraqi air
defense sites in or just outside the zones when these sites threaten U.S. aircraft.
Asserting that U.S. strikes and other military containment measures are succeeding,
the Defense Department said on September 12, 2000 that Iraq’s conventional forces
have been “severely degraded” by the Gulf war, international sanctions, and U.S.
enforcement of the two no-fly zones, and that Iraq would have “difficulty” waging
war against its neighbors because of the presence of U.S. forces in the region.4
Containing Iraq’s military has cost the United States $7.8 billion from the end of the
Gulf war until July 31, 2000, including no-fly zone enforcement, temporary force
buildups in response to Iraqi threats, or airstrikes during periods of actual
confrontation. The Administration estimates it will spend $1.1 billion on Iraq
containment measures in FY2001, an amount appropriated for this purpose in the
FY2001 defense appropriation (P.L. 106-259).
The impasse between the Security Council and Iraq on restarting WMD
inspections appears to result, at least in part, from divisions within the Council on the
broader issue of maintaining sanctions on Iraq. The divisions were reflected in the
passage of U.N. Security Council Resolution 1284 (December 17, 1999), which
attempted to offer Iraq a suspension of most sanctions in exchange for cooperation
with a new WMD inspection body (U.N. Monitoring, Verification, and Inspection
2Central Intelligence Agency. Unclassified Report to Congress on the Acquisition of
Technology Relating to Weapons of Mass Destruction And Advanced Conventional
Munitions, 1 July Through 31 December 1999.
August 2000.
3In January 1997, following a U.S. confrontations with Iraq in August 1996, France ended its
participation in Northern Watch. It ceased participating in Southern Watch following
Operation Desert Fox (December 1998).
4Briefing by Defense Department Spokesman Kenneth Bacon. September 12, 2000.

CRS-5
Commission, UNMOVIC).5 Even though the resolution appeared to incorporate
many of their suggestions for easing sanctions, including ending the limitation on the
amount of oil Iraq can sell under the “oil-for-food program,” permanent members
France, Russia, and China abstained.
Even before the divided vote on 1284, France, Russia, and China had asserted
that sanctions should be progressively eased to give Iraq an incentive to continue its
cooperation with UNSCOM. The United States and Britain oppose that view,
maintaining that Iraq would view an easing of sanctions as a reward for only limited
cooperation, and that the preservation of sanctions would force Iraq to fully comply
with all outstanding requirements of applicable U.N. Security Council resolutions.
U. S. officials add that lifting sanctions would enable Iraq to generate and control
enough revenue to reconstitute its armed forces and its WMD programs by illicitly
importing weapons and WMD-useful technology. Some of the Gulf states have begun
to back the view of Russia, France, and China, even though they were threatened by
Iraq’s invasion of Kuwait. Some Gulf leaders now say that Iraq has been disarmed
to the extent that it no longer poses a major threat. Among other motivations, some
of Iraq's neighbors, such as Jordan and Turkey, seek an easing of sanctions to provide
them with additional trade opportunities. Others, such as the United Arab Emirates,
want to rehabilitate Iraq as a counterweight to Iran. Some observers believe Syria
sees Iraq’s revival as potential Arab leverage against Israel, particularly in the context
of the apparent breakdown of the Israeli-Palestinian peace process in October 2000.
Whatever the motivations, the following recent developments have caused some to
question whether U.S. efforts to contain Iraq will succeed over the long term:
! In August 2000, Russia and France succeeded in convincing the United States
to accept a reduction in the percentage of Iraqi oil revenues devoted to
reparations under the U.N. sanctions regime. As of December 2000, the
percentage deducted will fall to 25% from the current 30%, a level set by U.N.
Security Council Resolution 705 (August 15, 1991). At about the same time,
France and Russia began questioning the U.S. interpretation of U.N. Security
Council Resolution 670 (September 25, 1990), maintaining that the resolution
does not specifically ban passenger flights to or from Iraq. In September and
October, Russian, French, Egyptian, Syrian and Sudanese aircraft, with the
knowledge and apparent tacit backing of those governments, flew to Iraq
without receiving permission from the U.N. Sanctions Committee. This
approval procedure has been used by the Security Council since the Gulf war
and the United States. Numerous other humanitarian flights have landed in
Baghdad in the same time frame, after seeking and receiving the customary
Sanctions Committee clearances. In late October 2000, Iraq announced it
would resume internal passenger flights; the United States indicated it would
not take action to prevent this.
! Throughout most of 2000, Iran, or factions within Iran, have been helping Iraq
smuggle about $70 million per month worth of petroleum products out of the
5For full text of the Resolution, see [http://www.un.org/Docs/scres/1999/99sc1284.htm]. For
analysis of the Resolution, see CRS Report RL30472, Iraq: Oil-For-Food Program. March
17, 2000.

CRS-6
Gulf in exchange for a share of the proceeds of the exports. The illicit
revenues go directly to the Iraqi government and can be used for virtually any
purpose. A number of press reports indicate Iraq has used some of the funds
to illicitly import consumer goods such as electronics, appliances, and luxury
clothing.6
! Syria and Egypt are moving to expand trade with Iraq under the oil-for-food
program. As of August 2000, Iraq is buying about $800 million per year in
Egyptian goods with plans to increase that amount to $1 billion per year. That
same month, Syria and Iraq agreed to double their trade from the current level
of about $450 million per year. In early 2000, Syria and Iraq, erstwhile
enemies, exchanged diplomats, and the Middle East Economic Survey reported
in late October 2000 that, in mid-November 2000, the two would reopen the
Iraqi oil pipeline that crosses Syria and lets out at Syria's Mediterranean port
of Banias, closed since 1982. It is not clear if the two countries plan to wait
for U.N. backing for the move - the reopening of the pipeline might require an
amendment to U.N. Security Council Resolution 986, of April 14,1995, and
the May 1996 U.N.-Iraq memorandum of understanding that govern the oil-
for-food program. These documents mandate that more than half of Iraqi oil
exports run through an Iraq-Turkey pipeline and that all oil export routes be
monitored by U.N. contract personnel.
! In October 2000, for the first time since the Iraqi invasion of Kuwait, Iraq was
invited to attend an Arab League summit. Saddam Husayn did not attend but
he was represented by Izzat Ibrahim, the Vice Chairman of the Revolutionary
Command Council, Iraq’s highest body. The summit was called to discuss the
Israeli-Palestinian clashes. On the other hand, Ibrahim sought but failed to
obtain a summit declaration that sanctions on Iraq should be lifted.
Congressional Views. Congress has generally supported the Administration
throughout the various confrontations with Iraq, and has often urged even stronger
action against Iraq than the Administration appeared ready to take. In particular,
Congress led the Administration in adding to U.S. containment policy a more
ambitious dimension -- promoting the overthrow of Saddam Husayn. Congressional
sentiment for a strategy of overthrow of Saddam Husayn was encapsulated in the Iraq
Liberation Act, which passed the House on October 5 (360-38) and the Senate on
October 7 (unanimous consent). The Act gave the President the discretion to provide
up to $97 million in defense articles and services to Iraqi opposition organizations
designated by the Administration. The President signed the bill into law (P.L. 105-
338) on October 31, 1998, the same day Iraq cut off all cooperation with UNSCOM,
including long term monitoring operations. On November 14, 1998, President
Clinton announced the policy shift by stating that the United States would work to
achieve a change in regime and that he would implement the Iraq Liberation Act.
This marked the first time since the Gulf war that the declared policy of the United
States has been to seek Saddam Husayn's overthrow, although the United States has
6Pisik, Betsy. Iraqi Trade Doing Fine Despite Sanctions. Washington Times, October 25,
2000.

CRS-7
worked with opposition groups since 1991.7 Some in Congress have criticized the
Administration’s refusal to provide lethal military equipment under the Act as contrary
to congressional intent, but the Administration asserts the opposition is not ready to
use such equipment effectively. Partly as a reflection of congressional sentiment for
stronger support to the opposition, the FY2001 foreign aid appropriation (H.R. 4811)
provides $25 million for opposition activities, of which $12 million is to be used by
the Iraqi National Congress (INC), the leading opposition coalition, to distribute
humanitarian aid inside Iraq.
On the other hand, there appears to be growing concern among some in
Congress about the effects of sanctions on the Iraqi people. No Member is openly
advocating the international rehabilitation of Saddam Husayn or the immediate lifting
of U.S. sanctions, but some Members want to ease U.S. sanctions to facilitate the
flow of U.S. civilian goods to Iraq. H.R. 3825, introduced March 2, 2000 and which
has attracted 36 cosponsors, would eliminate the requirement that U.S. exporters of
food and medical equipment to Iraq obtain a license for the sales. In addition, in June
2000, Representative Tony Hall became the first Member to visit Iraq since the Gulf
war.
Iran: U.S. Outreach Amid Continued Concerns
Since the May 1997 election of a reformist, Mohammad Khatemi, as Iran’s
President, the United States has been attempting to end twenty years of mutual
acrimony that had occasionally led to confrontation. However, Khatemi is operating
within a power structure established by the 1979 Islamic revolution, an establishment
that is deeply suspicious of the United States and has limited Khatemi’s ability to
improve relations with the United States.
Even before Khatemi’s election raised U.S. hopes for internal change in Iran,
U.S. foreign policy experts had been arguing that improved relations with Iran could
help the United States accomplish several goals, including: containing Saddam
Husayn's Iraq; reducing the threat to the United States and to the Arab-Israeli peace
process posed by Islamic terrorist groups; easing Iran's opposition to a large U.S.
military presence in the Persian Gulf region; dissuading Iran of the need to acquire
weapons of mass destruction; and curbing the regional threat from the puritanical
Sunni Islamic regime of the Taliban in Afghanistan, which is at odds with Iran. U.S.
business interests, meanwhile, argued that improved U.S.-Iranian relations could help
open up new energy routes for Caspian/Central Asian energy resources, would benefit
U.S. exporters, and could end trade disputes with U.S. allies precipitated by U.S.
secondary sanctions laws.8 Others maintained that the United States could not and
should not isolate a country of over 65 million people, with a location and resources
7For further information on this aspect of U.S. policy, see CRS Report 98-179, Iraq’s
Opposition Movements.
Updated June 27, 2000, by Kenneth Katzman.
8The most widely known example of U.S. secondary sanctions on Iran is the Iran-Libya
Sanctions Act, P.L. 104-172, of August 5, 1996. For analysis of that and other U.S.
sanctions on Iran, see CRS Report 97-231, Iran: U.S. Policy and Options.

CRS-8
as strategic as those of Iran. These arguments took on added weight with Khatemi’s
election and subsequent U.S. initiatives.
U.S. hopes that Khatemi would quickly move to improve relations with the
United States intensified when Khatemi agreed to a special Cable News Network
interview on January 7, 1998, portrayed by Iran and CNN as an "address to the
American people." However, Khatemi offered only people-to-people contacts with
the United States, rejecting formal government-to-government ties. The United States
accepted Khatemi's call for increased informal contacts but the Administration
apparently later concluded that people-to-people contacts alone would not lead to a
breakthrough in relations. On June 17, 1998, in a speech to the Asia Society,
Secretary of State Albright proposed that the two countries undertake mutual
confidence-building measures that could form a "road map" to eventually normalizing
relations. On March 17, 2000, Secretary Albright again attempted to induce Iran into
a dialogue with a speech that announced an easing of U.S. sanctions on the imports
of Iranian luxury goods,9 and an accelerated effort to resolve outstanding financial
claims dating from the Islamic revolution. The Secretary also came close to an
outright apology for past U.S. interference in Iran’s internal affairs – including the
U.S.-backed ouster in 1953 of nationalist Prime Minister Mohammad Mossadeq and
U.S. support for the Shah of Iran – as well as for the U.S. tilt toward Iraq in the Iran-
Iraq war. The speech followed a July 1999 easing of the U.S. trade ban on Iran to
allow commercial sales to Iran of food and medical products.10 The renewed
overture still did not prompt Iran to accept the U.S. offer of an official dialogue,
although Iran did begin broadening its contacts with Members of Congress.11
Continued Administration and Congressional Concern. The
Administration has said there are no substantive preconditions for the beginning of
talks with Iran but that the two sides openly acknowledge the dialogue, that both
sides must be free to raise issues of respective concern, and that the Iranian
interlocutors must be authoritative representatives of the Iranian government.
Although much of the policy community, including many in Congress, accept the
concept of dialogue with Iran, some Members oppose any further unilateral easing of
U.S. sanctions until Iran agrees to a dialogue and decisively curbs its objectionable
policies. The Administration has defined those policies as Iran’s attempt to acquire
weapons of mass destruction and delivery means, opposition to the Arab-Israeli peace
process, and support for international terrorism. Some believe that Iran’s human
rights practices should also be a priority concern for the United States, although the
Administration has focused on those aspects of Iranian behavior that constitute threats
to U.S. national security.
9The four category of goods that can be imported are: caviar, dried fruit, nuts, and carpets.
10The conference report on H.R. 4461, the FY2001 agriculture appropriation (H.Rept. 106-
948), eases licensing procedures for food and medical sales to Iran and other terrorism list
countries and authorizes the President to allow the use of U.S. export credits for these sales.
11Slavin, Barbara. "Iran, U.S. Elected Officials’ Meeting First in 20 Years." USA Today,
August 31, 2000.

CRS-9
Those who believe that evidence of Iran’s moderation under Khatemi’s
administration is mixed cite developments such as the following:
! Khatemi and Foreign Minister Kharrazi have stated on several occasions that
Iran opposes the interim accords reached between Israel and the Palestinians
but Iran will not actively try to derail their peace talks. Iran did not publicly
oppose Syria’s decision to renew talks with Israel in December 1999, although
those talks quickly broke down and have not resumed. Despite these public
pronouncements, Iran continues to provide financial aid and materiel to anti-
Israel groups, particularly Hizballah, Hamas, and Palestinian Islamic Jihad,
according to the Administration,12 and it reportedly encouraged them to
continue violent actions against Israel during the September - October 2000
Israeli-Palestinian clashes. It is unclear whether or not the Iranian aid to
Hizballah has diminished following Israel’s withdrawal from southern Lebanon
in May 2000. The withdrawal accomplished Hizballah’s key military objective
of ending Israel’s occupation of Lebanon, although Hizballah disputes the U.N.
determination that the withdrawal was complete. Iran also refused a U.S.
request in mid-1999 to cooperate with the U.S.-Saudi investigation of the June
1996 bombing of the Khobar Towers military housing complex in Saudi
Arabia, which killed 19 U.S. airmen.
! President Khatemi has attempted, with some success, to change Iran's image
in the Gulf as an aggressor and to have the country seen more as a pragmatic
neighbor. Saudi Arabia has been particularly receptive to overtures from
Khatemi, and the two countries are working together amicably on oil pricing
issues as well as on anti-crime and anti-narcotics activity in the Gulf. Bahrain,
which in 1996 openly accused Iran of attempting to overthrow the ruling Al
Khalifa regime, in December 1998 restored full relations with Iran by
appointing an Ambassador to Tehran. At the same time, Khatemi's
government has reaffirmed Iran's claim to three Gulf islands in dispute between
Iran and the United Arab Emirates, and maintains small amounts of
conventional military equipment on these islands.
! Khatemi, despite his efforts to end Iran's isolation, has not sought to curb Iran's
WMD programs. All factions in Iran appear to agree on the need to continue
developing these programs. They perceive that Iran is threatened on virtually
all sides – by erstwhile adversary Iraq to the west; by a nuclear-equipped
Pakistan and its client, the Taliban of Afghanistan, to the east; by U.S. forces
in the Gulf, to Iran’s south; and by political instability in the Caucusus and
Central Asia, to the north. Iran views Israel as an illegitimate state, an
adversary, and a strategic threat that possesses ballistic missiles and, according
to numerous accounts, nuclear weapons. U.S. government officials and
reports say Iran is actively pursuing a long-range missile program, that it is
building a chemical and biological weapons infrastructure, and that it is
acquiring expertise and technology that could be used in a nuclear weapons
12U.S. Department of State. Office of the Coordinator for Counterterrorism. Patterns of
Global Terrorism: 1999.
April 2000.

CRS-10
program.13 On the other hand, there are factional differences over the degree
to which Iran should cooperate — or appear to cooperate — with international
anti-proliferation regimes. Governing bodies of several international non-
proliferation regimes, including the Nuclear Non-Proliferation Treaty and the
Chemical Weapons Convention, say Iran is generally fulfilling its obligations
under these agreements.
! President Khatemi has attempted to liberalize social and political life since
taking office, but conservative forces in Iran appear intent on thwarting his
internal reforms. Throughout 2000, hardliners have closed over twenty pro-
reform newspapers and imprisoned some of their editors. Most observers
believe that hardliners, hoping to stanch any improvement in relations with the
West, were responsible for the 1999 arrest and the trial in April - June 2000 of
13 Jews from the Shiraz area on charges of spying for Israel. In July 2000, ten
of the Jews, along with two Muslim associates, were found guilty and given
prison sentences ranging from four to thirteen years. (An appeals panel
subsequently reduced the sentences by a few years in each case, but none of
those convicted were released.) On the other hand, in 2000, for the first time
since the revolution, women have been appointed to judgeships.
The Persian Gulf Monarchies:
Coping With Internal and External Threats
U.S. attempts to contain the threats from Iran and Iraq depend heavily on
cooperation with the Persian Gulf monarchies of the Gulf Cooperation Council
(GCC).14 U.S. defense officials maintain that close post-Gulf war cooperation with
the Gulf states has placed the United States in a far better position to prevent or
manage a major Gulf military crisis than was the case prior to the Iraqi invasion of
Kuwait. The need for with the GCC states on defense gives the United States a
strategic stake in their political stability. However, unlike defense cooperation
decisions, the United States has little ability to influence their economic or internal
political decisions, and the United States limits itself to providing advice on Gulf
internal policies and practices. Despite the threats they face, the GCC states have
proved more durable politically than some scholars had predicted, surviving attempts
to subvert them by Iraq (1970s) and Iran (1980s and 1990s), the eight year Iran-Iraq
war (September 1980-August 1988), the Iraqi invasion and occupation of Kuwait
(August 1990 - February 1991), and post-Gulf war unrest and uncertain leadership
transitions in a few of the GCC states.
13Testimony of John A. Lauder, Director of the Central Intelligence Agency’s Nonproliferation
Center, before the Senate Foreign Relations Committee. October 5, 2000.
14For further information on the Gulf states, see CRS Issue Brief IB93113, Saudi Arabia:
Post-War Issues and U.S. Relations
; and CRS Report 95-1013, Bahrain; CRS Report 95-
1071, Oman; CRS Report 98-436, United Arab Emirates: U.S. Relations and Prospective
F-16 Sale
; and CRS Report 98-600, Kuwait: Current Issues and U.S. Policy.

CRS-11
Domestic Stability
The key domestic threats to GCC political stability, in most cases, come from
internal, ethnic, ideological, and sectarian differences within these states. (See
appendix on Gulf state population and religious composition.) Since November 1994,
Bahrain's Sunni Muslim ruling family has faced several cycles of serious unrest
(demonstrations, occasional rioting and some bombings) from elements of the Shia
Muslim community, which constitutes a numerical majority but feels excluded from
national decisionmaking. Saudi Arabia has been the only other GCC state to face
significant political unrest since the Gulf war. The kingdom experienced outbreaks
of rioting and demonstrations in the two years after the Gulf war because of the
regime's perceived deviations from Islamic purity. Several opposition Islamic clerics
were arrested.
At large in Afghanistan is an exiled Saudi opposition figure, Usama bin Ladin,
who is not a religious authority but is viewed by some Saudis as a revolutionary
Islamic figure who is fighting to expel U.S. influence from Saudi territory.15 Some
observers maintain that many Saudis privately agree with bin Ladin that the Saudi
regime has turned the kingdom into a vassal state of the United States that allows
Saudi territory to be used for U.S. aggression against oppressed Muslims in Iraq.
Saudi official concerns about such sentiment might explain why Saudi Arabia refused
to allow U.S. combat aircraft to strike Iraq from Saudi Arabia during Operation
Desert Fox,16 and might account for occasional reports that Saudi Arabia wants the
United States to reduce its military presence in the kingdom. Bin Ladin supporters
and other Islamic activists are present in the other Gulf states, and there are
occasional reports of specific threats to U.S. forces or personnel,17 but they do not
appear to pose a major challenge to the other Gulf regimes.
Leadership Transition. Still governed by hereditary leaders, several of the
GCC states are coping with current or imminent leadership transitions. Although few
observers forecast bloody succession struggles in any of the Gulf states, succession
uncertainties could cloud political or economic reform efforts under way or planned.
! In Saudi Arabia, King Fahd suffered a stroke in November 1995 and, although
still in power, he has increasingly yielded day-to-day governance to his half-
brother and heir apparent, Crown Prince Abdullah. Abdullah is the same age
as Fahd (about 75) but he is in reasonably good health, according to visitors
who have met with him. Abdullah is perceived as somewhat more willing than
Fahd to question U.S. policy in the region and U.S. prescriptions for Saudi
security, which, together with his image of piety, could account for his relative
popularity among the Saudi tribes and religious conservatives.
15For more information on bin Ladin, see CRS Report RL30643, Terrorism: Near Eastern
Groups and State Sponsors, 2000.
August 17, 2000, by Kenneth Katzman.
16Jehl, Douglas. "U.S. Fighters in Saudi Arabia Grounded." New York Times, December 19,
1998.
17Richter, Paul and Bob Drogin. "Plot to Bomb U.S. Plane in Bahrain Reportedly Detected.
" Los Angeles Times, October 26, 2000.

CRS-12
! In Bahrain, the sudden death of Amir Isa bin Salman Al Khalifa on March 6,
1999 led to the accession of his son, Hamad bin Isa Al Khalifa, who was
commander of Bahrain’s Defense Forces. Shaykh Hamad has moved slowly
but decisively to try to address the grievances that caused Bahrain’s unrest in
the mid-1990s.
! The UAE is in transition from the ailing Shaykh Zayid bin Sultan al-Nuhayyan,
ruler of the emirate of Abu Dhabi who helped found and became President of
the seven-emirate UAE federation in 1971. His eldest son, Crown Prince
Khalifa, is the likely successor. Khalifa has been assuming a higher profile in
the UAE over the past few years, but he is relatively untested and his
succession could become clouded if the rulers of the other six emirates of the
UAE federation oppose his accession. However, the UAE is well placed to
weather this transition because it has faced the least unrest of any of the Gulf
states and there are few evident schisms in the society.
! The reform-minded ruler of Qatar, Shaykh Hamad bin Khalifa Al Thani,
overthrew his father in a bloodless coup in June 1995, and most of his father's
supporters quickly declared their loyalty to the new Amir. Although the Amir
accused his father and other GCC states of attempting a countercoup in early
1996, the Amir and his father reconciled to some extent in late 1996 and there
is little evidence of unrest.
! In Kuwait, virtually the entire top leadership – Amir Jabir al-Ahmad Al-Sabah,
Crown Prince/Prime Minister Sa’d al-Abdullah Al-Sabah, and Deputy Prime
and Foreign Minister Sabah al-Ahmad Al-Sabah – is ailing. However, should
they pass from the scene, there are several potential successors with significant
experience in government. Islamic fundamentalist opposition to the ruling Al
Sabah family is contained within the context of Kuwait's elected National
Assembly, and virtually no anti-regime violence has occurred there since the
Gulf war.
! With the exception of an alleged Islamist plot in 1994 that led to a few hundred
arrests, Oman has seen little unrest since Sultan Qaboos bin Said Al Said took
power from his father in 1970. Qaboos is about 61 years old and in good
health, but the royal family in Oman is relatively small and there is no heir
apparent or clear successor, should he pass from the scene unexpectedly.
Political Liberalization. Some of the Gulf states, in part to help them cope
with leadership transitions and the challenges of modernization and globalization, are
gradually opening the political process. The Gulf leaders hope that political
liberalization will ensure stability, although some fear that this process could backfire
by providing Islamic extremists a platform to challenge the incumbent regimes. Since
the 1991 Gulf war, the United States has encouraged the Gulf states to open their
political systems, although U.S. officials imply that political liberalization is clearly
subordinate to defense and security issues on the U.S. agenda for the Gulf. U.S.
officials also tell experts that the Administration is not pressing the Gulf states to
adopt a U.S. or European concept of democracy, but rather to widen popular
participation within their own traditions.

CRS-13
! Kuwait, Qatar and Oman have been at the forefront of political liberalization
in the Gulf, and Bahrain’s new Amir appears to want to follow in their
footsteps. In response to popular pressure after liberation, Kuwait revived its
elected National Assembly in October 1992. The Assembly was suspended by
the government in 1986. Kuwait’s Assembly has more influence in
decisionmaking and more scope of authority than any representative body in
the GCC. However, on two separate occasions in 1999, a long awaited effort
by the government to institute female suffrage was rebuffed by a coalition of
conservative tribal deputies and Islamists in the National Assembly. The U.S.
Administration expressed support for the government’s effort. Opening a new
session of the Assembly in October 2000, the Amir implied that the
government would press for passage of a new female suffrage bill.
! In March 1999, Qatar held elections to a 29-member municipal affairs council.
In a first in the Gulf, women were permitted full suffrage and 6 women ran for
the council, but all six lost. In late 1998, the Amir of Qatar announced that a
constitution would be drafted providing for an elected National Assembly to
replace the appointed 35-member consultative council in place since
independence in 1971. On April 13, 1999, the House passed H.Con.Res. 35
congratulating Qatar on its holding of the municipal elections. The Senate
passed a companion measure, S.Con.Res. 14, on July 1, 1999.
! On September 14, 2000, Oman held its first direct elections to its 83-seat
Consultative Council. The electorate consisted of 115,000 men and women,
far short of a genuine popular electorate. However, the process represented
a clear contrast with past elections (1994 and 1997) in which a smaller
electorate consisting only of “notables,” according to Omani statements, chose
two or three nominees per district and the Sultan then selected the final
membership. Two women were elected to the Council in the September 2000
elections. Oman also has instituted an appointed 41-seat State Council to
serve, in part, as a check and balance on the elected Consultative Council. In
October 2000, Sultan Qaboos named a new State Council which includes five
women, up from four previously.
! The new Amir of Bahrain appears to be abandoning his late father’s refusal to
accommodate opposition demands to restore an elected national assembly.
In late September 2000, the Amir broadened representation in the 40-seat
appointed Consultative Council, naming to the body 19 newcomers including
a Jew, a man of Indian origin, and four women, one of whom is Christian. The
Administration hailed the appointments as a “positive step” to broaden political
participation there. On October 3, 2000, the Amir opened the Council’s term
by promising a “new era” of dialogue on a new constitution. The Amir has
promised that the next Council, to be inaugurated in 2004, would be elected.
In the other Gulf states, political liberalization has been somewhat slower. Saudi
Arabia expanded its national consultative council to 90 seats from 60 in 1997, but it
continues to rule out national elections or the appointment of women to the Council.
On the other hand, in the past year, the Saudi government has parted with tradition
by naming two women to high ranking government positions. The UAE has not
moved at all to broaden the authority of its forty seat advisory Federal National

CRS-14
Council. However, the wife of UAE President Shaykh Zayid bin Sultan al-Nuhayyan
said on January 31, 1999 that women will participate in the political life of the UAE
in the future. A few weeks after that statement, Shaykh Zayid appointed a woman to
be undersecretary of the Ministry of Labor and Social Affairs, the first woman to hold
such a high-ranking government post.
Despite the move toward political openness in some of the Gulf states, the
Administration and many in Congress believe that the Gulf states continue to rely
heavily on repression and denial of internationally recognized standards of human
rights to maintain political stability. Even the moves toward political liberalization in
the Gulf states do not give Gulf citizens the right to peacefully change their
government, and the foreign workers on which their economies rely have virtually no
political rights at all. Almost all the Gulf states are cited by human rights
organizations and U.S. human rights reports for arbitrary arrests, religious
discrimination, suppression of peaceful assembly and free expression, and the denial
of popular ability to peacefully change the government.
Congress has been particularly interested in the issue of religious
discrimination.18 The 105th Congress enacted the International Religious Freedom Act
(IRFA, P.L. 105-292) which, among other provisions, requires the Administration to
report to Congress on the status of religious freedom worldwide. Of the Gulf states,
only Saudi Arabia actively prohibits the practice of non-Muslim religions on its
territory, even in private, with limited exceptions. In July 2000, the U.S. Commission
on International Religious Freedom, which was chartered by IRFA, recommended to
the Secretary of State that Saudi Arabia be designated a “country of particular
concern”on the grounds that it “vigorously enforces its prohibition against all forms
of public religious expression other than that of Wahhabi Muslims.19 At least in part
because of Saudi Arabia’s pivotal role in U.S. efforts to stabilize the Gulf region, the
Secretary did not designate Saudi Arabia as a country of particular concern in
September 2000. Qatar prohibits public non-Muslim worship put tolerates it in
private. In Kuwait, Bahrain, the UAE, and Oman, there are functioning Christian
churches and congregations. Small Jewish communities in some Gulf countries are
generally allowed to worship freely.
Economic Reform.20 At the same time the Gulf states are coping with
political change, they appear to be taking steps to reform their economies. The Gulf
states were shaken economically in 1998 when oil prices fell to a multi-year low of
about $10 per barrel. Although production cuts in 1999 and early 2000, as well as
rising global demand, caused prices to rise sharply to over $30 per barrel by the fall
of 2000, the Gulf state want to reduce their vulnerability to future sharp price drops.
18For further information, see CRS Report 98-444, Religious Discrimination in the Middle
East
. May 7, 1998, by Alfred Prados.
19Text: Religious Freedom Commission Lists “Countries of Particular Concern.” U.S.
Department of State Washington File
, July 31, 2000.
20For further information on the GCC economies, and trade and investment policies and
practices, see CRS Report RL30383, U.S.-Gulf Cooperation Council (GCC) Trade and
Investment: Trends and Implications
. December 3, 1999, by Joshua Ruebner.

CRS-15
As noted in Table 1 below, oil export revenues constitute a high percentage of GDP
for all of the states of the Gulf, including Iran and Iraq. The health of the energy
infrastructure of the Gulf producers is also a key concern of the United States – Gulf
petroleum comprises almost one quarter of the United States’ approximately 10
million barrels per day (mbd) net imports.
Table 1. Gulf Oil Exports, U.S. Imports, and % GDP, 1999
Total Exports
U.S. Imports
Oil Revenues
Country
(mbd)
(mbd)
as % GDP
Iran
2.4
0
45%
Iraq
2.1
0.7
100%
Kuwait
1.8
0.24
50%
Saudi Arabia
7.2
1.45
40%
Qatar
0.74
negligible
30%
U.A.E.
2.0
negligible
40%
Oman
0.9
none
40%
Bahrain
0.02
none
30%
Total
17.16
2.42
N/A
Source: DOE, Energy Information Agency (EIA), OPEC Revenue Fact Sheet. Some
figures from supporting EIA data.
The 1997-98 oil price decline prompted the Gulf monarchy states to reevaluate
their longstanding economic weaknesses, particular the generous system of social
benefits they provide to their citizens. However, the strong expectation in these
countries of continued benefits led the Gulf regimes to look to other ways to reform
their economies. Rather than cut benefits, institute or raise taxes, or dramatically
reduce their defense budgets, most of the Gulf states have chosen to try to reduce
economic vulnerability by attracting international capital to the energy and other
sectors, as well as by diversifying economically. Despite intense sensitivities to any
perceived loss of sovereignty, Kuwait and Saudi Arabia have begun discussions with
Western oil companies, including several American firms, about further developing
their oil and gas reserves. The international firms bring technology and capital that
are now in short supply to the Gulf's state-owned oil companies, such as Aramco
(Saudi Arabia) and Kuwait Oil Company. It should be noted that the Kuwaiti
government is having some difficulty obtaining National Assembly approval for
opening the energy sector to foreign investment, although approval is expected
eventually. The Saudi opening of its energy sector may also have strategic
motivations – the Saudis appear to want to draw similar investment away from
competing projects in Iran and the Caspian region.

As part of the process of attracting international investment, the Gulf states are
starting to open their economies. The Gulf states have passed laws allowing foreign
firms to own majority stakes in projects, and easing restrictions on repatriation of
profits. U.S. officials have recognized progress by the GCC states in eliminating the
requirement that U.S. firms work through local agents, and protecting intellectual

CRS-16
property rights of U.S. companies. Oman has taken enough steps to open its
economy to be approved, on October 10, 2000, for membership in the World Trade
Organization (WTO). This leaves Saudi Arabia as the only GCC state still outside
that body, but Saudi Arabia is in the final stages of negotiations with the WTO on the
terms of its entry and it expects to be admitted by mid-2001.21 However, the United
States still has concerns about Saudi Arabia’s enforcement of the primary Arab
League boycott of Israel. Oman, by exchanging trade offices with Israel in 1996, had
alleviated that concern. In 1994, all six GCC countries relaxed their enforcement of
the secondary and tertiary boycott, enabling them to claim that they no longer engage
in practices that restrain trade (a key WTO condition).
Gulf Foreign Policy and Defense Cooperation with the United
States

Even with a weakened Iraq and a moderating Iran, most experts believe the GCC
countries cannot face their security challenges alone or even in concert with each
other. The GCC countries have chosen to ally with the United States and, to a lesser
degree, other Western powers. Although their combined forces might be equipped
as well as or better than Iran or Iraq (see Table 2 below), the GCC countries suffer
from a shortage of personnel willing to serve in the armed forces or commit to a
military career, and they lack much combat experience. Defense agreements with the
United States are the keys to their security.
Table 2. Comparative Military Strengths of the Gulf States
Naval Units
Other
Armed
Patriot
Military
Combat
Country
Tanks Armored Artillery
Heli-
Surface
Firing
Personnel
Aircraft
Sub-
Vehicles
copters
Combat-
Units
marines
ants
Saudi
162,500
1,055
2,870
448
118
432
34
0
20
Arabia
United
Arab
64,500
313
1,003
223
49
99
21
0
--
Emirates
Oman
43,500
178
103
109
0
40
13
0
--
Kuwait
15,300
385
495
59
20
76
0
0
5
Qatar
11,800
44
248
40
18
18
7
0
--
Bahrain
11,000
106
365
98
26
24
13
0
--
Total:
308,600
2081
5084
977
231
689
88
0
25
Allies
Iraq
429,000
2,200
2,900
1,950
120
316
8
0
--
Iran
545,600
1,345
990
2,460
100
304
67
5
--
Source: International Institute for Strategic Studies, The Military Balance 1999-2000. (Note: Figures shown
here do not include materiel believed to be in storage and inoperable.)
21Evans, Robert. "Saudi Arabia Said Moving Quickly to WTO Entry." Reuters, April 4,
2000.

CRS-17
* Iranian aircraft figures include aircraft flown from Iraq to Iran during 1991 Gulf war. Patriot firing unit
figures do not include firing units emplaced in those countries by the United States. Six U.S. Patriot firing
units are emplaced in Saudi Arabia, according to Teal’s World Missiles Briefing.
In return for providing protection to the Gulf states, the Administration and
Congress have expected these states to support U.S. policy in the Middle East,
including the Arab-Israeli peace process. All the GCC states have participated in the
multilateral peace talks, but only Bahrain, Qatar, and Oman have hosted sessions of
the multilaterals. As noted above, the GCC states have ceased enforcing the
secondary and tertiary Arab League boycott of Israel, and Oman and Qatar opened
low-level direct trade ties with Israel in 1995-1996. A regional water desalination
research center has been set up in Oman as a result of an agreement reached at the
multilaterals. In November 1997, at a time of considerable strain in the peace process,
Qatar bucked substantial Arab opposition and hosted the Middle East/North Africa
economic conference, the last of that yearly event to be held. Israel’s Foreign
Minister said in October 2000 that, in recent years, diplomats from all six Gulf states
have met with Israeli diplomats during reciprocal visits or at the margins of
international meetings.
At the same time, as Arab states, the Gulf states have tried to remain within an
Arab consensus on the peace process and other issues of concern to the Arab and
Islamic world. During the October 2000 Israeli-Palestinian clashes, Oman closed its
trade office in Israel and ordered Israel’s trade office in Muscat closed. After the
October 21-22 Arab League summit that convened to discuss the violence, Qatar said
it would consider closing Israel’s trade office in Doha. The declaration of the meeting
also commits the Gulf states to suspend their participation in the multilateral peace
talks, although little activity has taken place on that track since 1996.22 Even though
the Gulf states still resent PLO leader Yasir Arafat for supporting Iraq in the Gulf
war, the Gulf states have bowed to public sympathy for the plight of the Palestinians
by giving financial assistance to the Palestinian Authority. The Arab League summit
adopted a Saudi suggestion to provide $1 billion in aid to the families of Palestinians
killed or injured in the clashes and to Arab and Islamic institutions in Jerusalem.
Apparently responding to U.S. overtures prior to the summit, the Gulf states generally
supported the successful effort of Egypt and other moderate Arab states to leave the
door open for future Israeli-Palestinian peace talks. However, there is concern in the
U.S. defense establishment that Gulf support for the Palestinians in the ongoing crisis
could lead the Gulf regimes to become less forthcoming in defense cooperation with
the United States. To date, there are no signs the Gulf leaders are considering such
a move.
Although committed to defense cooperation and some foreign policy
coordination with the United States, the Gulf rulers do not want to be seen by their
populations as vassals of the United States. As discussed below, the Gulf states host
U.S. forces tasked with containing Iraq, but Gulf leaders say their people are
increasingly opposed to what they see as a U.S. effort to punish rather than merely
contain Iraq. The Gulf states are also reflecting public opinion in their shift against
the U.S. policy of maintaining sanctions on Iraq, which many Gulf citizens believe is
22For further information on the multilaterals, see CRS Report RL30311. Middle East: The
Multilateral Peace Talks
. Updated August 17, 2000, by Joshua Ruebner.

CRS-18
hurting only the Iraqi people. Echoing the position of several Gulf leaderships,
Qatar's Foreign Minister told visiting Secretary of Defense Cohen in March 1999 that
Qatar does "not wish to see Iraq being bombed daily." He was referring to the U.S.
strikes on Iraq in the no fly zones since December 1998. In June 2000, both the UAE
and Bahrain re-established diplomatic relations with Iraq. Qatar re-established
relations in 1992 and Oman did not break relations when Iraq invaded Kuwait. With
the exception of Kuwait, all the Gulf states have resumed trade ties with Iraq and
Saudi Arabia said in October 2000 that it might open up a border crossing with Iraq
(at al-Arar) to facilitate direct shipments of goods to Iraq.
In the same way as U.S. policy toward Iran has shifted, so has the GCC
perception of Iran as a threat has given way to rapprochement. Some of the Gulf
states, particularly Saudi Arabia, Kuwait, and Oman, have improved relations with
Iran dramatically over the past few years. Oman and Kuwait have already agreed to
limited pacts with Iran to cooperate on smuggling and illegal immigration in the Gulf,
and Saudi Arabia is contemplating a similar agreement with Iran.23 The United States
views these steps as helpful to its own efforts to achieve a rapprochement with Iran.
However, were these or other pacts to evolve into full-fledged defense agreements
between Iran and the Gulf states, the United States might view them as a threat to its
own close defense relations with the Gulf. Some experts see Iran as attempting to
“charm” the Gulf states into scaling back their defense cooperation with the United
States as part of an effort to replace the United States as the chief Gulf power.
Others believe Iran shares the GCC interest in reducing tensions in the Gulf, and that
Iran does not believe it could ever maneuver the United States out of the Gulf.
Defense Agreements and U.S. Forces in the Gulf. With the exception
of Saudi Arabia, the Gulf states have entered into defense pacts with the United
States, which provide not only for facilities access for U.S. forces, but also for U.S.
advice, training, and joint exercises; lethal and non-lethal U.S. equipment
prepositioning; and arms sales. The pacts do not formally require the United States
to come to the aid of any of the Gulf states if they are attacked, according to U.S.
officials familiar with their contents. Nor do the pacts give the United States
automatic permission to conduct military operations from Gulf facilities — the United
States must obtain permission on a case by case basis.
An influx of U.S. military personnel and equipment has accompanied the defense
pacts, and Administration officials have generally praised Gulf state cooperation in
ensuring the safety of American personnel from terrorist attacks. Despite the host
country cooperation, terrorists killed 5 American military advisers in an attack in
Saudi Arabia in November 1995 and 19 U.S. airmen in the June 1996 Khobar Towers
attack.
The following is a brief overview of U.S. operations and presence in each of the
six GCC states, as well as Yemen:
23Ratnam, Gopal. Tehran Maneuvers to Eject U.S. Force From Middle East. Defense News,
August 28, 2000; Matusic, Karen. Iran Pacts About Crime, Not Defense- Gulf Officials.
Reuters, April 18, 2000.

CRS-19
! Concerned about internal opposition to a U.S. presence, Saudi Arabia has
refused to sign a formal defense pact with the United States. However, it has
entered into several limited defense procurement and training agreements with
the United States.24 It currently hosts about 150 U.S. combat aircraft
performing the Southern Watch operation over southern Iraq, and, as noted
above, six U.S. Patriot firing units. The number of U.S. military personnel
there and in the rest of the Gulf theater of operations is listed in Table 3
below.
! Bahrain has hosted the headquarters for U.S. naval forces in the Gulf since
1948, long before the United States became the major Western power in the
Gulf. (During the 1970s and 1980s, the U.S. presence was nominally based
offshore.) Bahrain signed a separate defense cooperation agreement with the
United States on October 28, 1991. In June 1995, the U.S. Navy reestablished
its long dormant Fifth fleet, responsible for the Persian Gulf region, and
headquartered in Bahrain. It should be noted that no U.S. warships are
actually based in Bahraini ports; the headquarters is used to command the 20
or so U.S. ships normally in the Gulf.
! An April 21, 1980 facilities access agreement with Oman provides the United
States access to three Omani airbases (Seeb, Thumrait, and Masirah) and some
Air Force prepositioning of equipment. The agreement was renewed in 1985
and 1990, and is up for renewal at the end of 2000. Oman, dismayed at the
closeout of U.S. economic aid to Oman as of the end of FY1996 (economic
aid was a condition of the original access agreements), has suggested that the
United States fund the construction of an airbase at Mulladah as a condition
of renewal,25 or upgrade the three air bases the United States now uses.
However, U.S. officials expect the access agreements will be renewed and
negotiations are ongoing, “in a positive manner,” Oman’s Minister of State for
Foreign Affairs said in April 2000.26
! On September 19, 1991, Kuwait, which sees itself as the most vulnerable to
renewed Iraqi aggression, signed a ten year pact with the United States
allowing the United States to preposition enough equipment to outfit a U.S.
brigade, and joint U.S.-Kuwaiti exercises are held almost constantly. Kuwait
routinely allows the United States to conduct airstrikes on Iraq from its
territory and to station additional air and ground forces in Kuwait during times
of crisis. As part of a plan to be able to hold off a potential Iraqi invasion until
reinforcements arrive, the United States opened a Joint Task Force
headquarters in Kuwait in December 1998. In October 1999, Secretary Cohen
said the United States would spend $173 million to upgrade the two Kuwaiti
air bases that host about 40 U.S. aircraft (Ali al-Salem and Ali al-Jabir), and
to upgrade the headquarters of U.S. Army troops in Kuwait.
24For more information on these agreements, see CRS Report 94-78, Saudi Arabia: U.S.
Defense and Security Commitments.
February 3, 1994, by Alfred Prados.
25Finnegan, Philip. "Oman May Limit U.S. Presence." Defense News, December 1-7, 1997.
26"Oman ‘Positive’ on Renewal of Military Pact." Bahrain Tribune, April 3, 2000.

CRS-20
! Qatar appears increasingly receptive to a close defense relationship with the
United States. It signed a defense pact with the United States on June 23,
1992, and has thus far accepted the prepositioning of enough armor to outfit
one U.S. brigade, and the construction of a facility that could accommodate
enough equipment to outfit at least two U.S. brigades. Qatar has expressed
willingness to host a forward presence for U.S. Central Command, which is
based at MacDill Air Force Base in Tampa, Florida, and it has begun allowing
U.S. P-3 maritime patrols from Qatar. The United States is currently helping
Qatar expand a large air base (Al Udaid) and, according to Defense
Department officials, the United States is negotiating with Qatar to use Al
Udaid as a permanent host for U.S. aircraft. The Administration apparently
wants to place aircraft in Qatar in order to reduce the number stationed in
Saudi Arabia.
! The UAE does not view Iraq as the only threat that a U.S. presence might help
deter. The UAE wants a close relationship with the United States in part to
deter and balance out Iranian naval power. On July 25, 1994, it announced it
had signed a defense pact with the United States. The UAE allows some U.S.
prepositioning, as well as U.S. ship port visits (about 20 dockings per month),
at its large man-made Jebel Ali port. It also hosts U.S. refueling aircraft
participating in the southern no fly zone enforcement operation. However,
concerned about a perceived loss of sovereignty to the United States, the UAE
also insisted on a clarification, resolved in mid-1997, of the defense pact's
provisions on the legal jurisdiction of U.S. military and other official personnel
in the UAE.
! Yemen is not a GCC state and U.S. relations with it were limited until the mid
1990s because of Yemen’s support for Iraq in the Gulf crisis. However, U.S.
military ties to Yemen were expanding before the October 12, 2000 terrorist
attack on the U.S.S. Cole, which killed 17 U.S. Navy personnel. Former
commander of U.S. Central Command Anthony Zinni visited Yemen four times
during 1997-99 to broaden U.S.-Yemen defense cooperation, and some
combined military exercises have been conducted. Yemen has also been
storing 300,000 barrels of oil for use by U.S. ships patrolling the Gulf, and
these ships, including the Cole, used Yemen to refuel. Even though Yemen
has cooperated with U.S. anti-terrorism efforts and the Cole investigation, the
Cole attack has heightened longstanding concerns about the presence of
terrorists in Yemen, and it is likely that defense relations with Yemen will be
scaled back, at least in the short term.

CRS-21
Table 3. U.S. Troops in the Gulf and Host Nation Support
Country
U.S. Forces
Host Nation Support (1998)
(March 2000)
(Millions)
Saudi Arabia
3,903 Air Force
$1.79 direct
329 Navy
$90.22 indirect
773 Army
4 Marine
$92.01: Total
5,009: Total
Joint Task Force/Southwest Asia
About 160 U.S. aircraft
Kuwait
1,893 Air Force
$171.05 direct
23 Navy
$4.90 indirect
2,238 Army
6 Marine
$175.95: Total
4,160: Total
Joint Task Force/Kuwait
About 40 U.S. aircraft
UAE
323 Air Force
$0.06 direct
11 Navy
$10.38 indirect
6 Army
6 Marine
$10.43: Total
346: Total
Qatar
2 Air Force
$0.00 direct
1 Navy
$11.00 indirect
32 Army
35: Total
$11.00: Total
Oman
50 Air Force
$0.00 direct
60 Navy
$44.94 indirect
2 Army
9 Marine
$44.94: Total
121: Total
Bahrain
21 Air Force
$1.70 direct
746 Navy
$1.23 indirect
20 Army
560 Marine
$2.93: Total
1,347: Total
Fifth Fleet Headquarters
Turkey
1,805 Air Force (Northern Watch)
N/A
About 24 aircraft (Northern Watch)
Afloat in the Gulf
About 13,000 mostly Navy
N/A
1 aircraft carrier plus about 10
associated ships, with about 70
aircraft. 2 U.S. ships help enforce
Iraq embargo.
Sources: Department of Defense, Active Duty Military Personnel Strengths by Regional Area and By Country,
March 31, 2000; Department of Defense, Responsibility Sharing Report, March 2000, available online at
[http://www.defenselink.mil/pubs/allied_contrib2000/cntry-sums.html].
Note: Direct support refers to financial payments to offset U.S. costs incurred. Indirect refers to in-kind
support such as provision of fuel, food, housing, basing rights, maintenance, and the like.

CRS-22
U.S. Arms Sales and Security Assistance. A key feature of the U.S.
strategy for protecting the Gulf has been to sell arms and related training services, to
the GCC states. Congress has not blocked any U.S. sales to the GCC states since the
Gulf war, although some in Congress have expressed reservations about sales of a few
of the more sophisticated weapons and armament packages to the Gulf states in recent
years. Some Members believe that sales of sophisticated equipment could erode
Israel’s “qualitative edge” over its Arab neighbors,27 if the Gulf states were to join a
joint Arab military action against Israel. Few believe that, absent a major Arab-Israeli
war, the Gulf states would seek conflict with Israel. Even if they were to do so, the
Administration maintains that the Gulf states are too dependent on U.S. training,
spare parts, and armament codes to be in a position to use sophisticated U.S.-made
arms against Israel.28
Fearing that some U.S. weapons could fall into the hands of terrorist groups
operating in the region, recent foreign aid appropriations laws have barred sales of
“Stinger” man-portable ground-to-air missiles systems to all Gulf countries except
Bahrain, which purchased U.S. Stingers in the late 1980s. A similar provision was
included in a security assistance law (H.R. 4919, P.L. 106-280), the Security
Assistance Act of 2000. The Foreign Relations Authorization Act of 1994-95 (P.L.
103-256, signed April 30, 1994) bars U.S. arms sales to any country that enforces the
primary and secondary Arab League boycott of Israel, but the Administration has
waived the application of this law to the Gulf states every year since enactment.
Most of the GCC states are considered too wealthy to receive U.S. security
assistance. Only Bahrain and Oman – the two GCC states that are not members of
the Organization of Petroleum Exporting Countries (OPEC) – receive any U.S. aid.
In FY2000, Bahrain and Oman each received $225,000 in International Military
Education and Training Funds (IMET). Slight increases are planned for FY2001. In
FY2000, Oman also received $300,000 in Nonproliferation, Anti-Terrorism,
Demining, and Related Programs (NADR) funds for demining in southwest Oman;
$500,000 is planned for FY2001. Bahrain and Oman are eligible to receive U.S.
excess defense articles (EDA) on a grant basis, and the UAE is eligible to buy or lease
EDA. In 1995-96, Oman received 30 and Bahrain 48 U.S.-made M-60A3 tanks on
a "no rent" lease basis. The Defense Department subsequently transferred title to the
equipment to the recipients. Since July 1997, Bahrain has taken delivery of a U.S.
frigate and a HAWK air defense battery as EDA.
Some of the major U.S. arms sales to the Gulf states, either in progress or under
consideration, include the following.29
27Towle, Michael. "Senators Say They Now Support F-16 Sale." Fort Worth Star-
Telegram
. August 25, 1998.
28Ratnam, Gopal and Amy Svitak. "U.S. Would Keep Tight Rein on Missile Sold to
Bahrain." Defense News, September 11, 2000.
29Information in this section was provided by the Defense Security Cooperation Agency
(DSCA) in Security Assistance Program Summaries (unclassified) for each of the Gulf states.
July - September 2000.

CRS-23
! The UAE historically has purchased its major combat systems from France, but
UAE officials now appear to believe that arms purchases from the United
States enhance the U.S. commitment to UAE security. In May 2000, Congress
supported the President’s proposal to finalize with the UAE a contract to
purchase 80 U.S. F-16 aircraft, equipped with the Advanced Medium Range
Air to Air Missile (AMRAAM), the HARM (High Speed Anti-Radiation
Missile) anti-radar missile, and the HARPOON anti-ship missile system.
Some in Congress objected to the inclusion of the AMRAAM equipment as the
first introduction of that weapon into the Gulf region, but the Administration
apparently satisfied that objection by demonstrating that France had already
introduced a similar system in an arms deal with Qatar. The total sale value is
estimated at over $8 billion, including a little over $2 billion worth of weapons,
munitions, and services being sold under the Foreign Military Sales (FMS)
program.30 The UAE is evaluating the Patriot PAC-III theater missile defense
system, as well as a Russian equivalent, to meet its missile defense
requirements.
! Although oil prices have roughly tripled since their lows in 1998, Saudi Arabia
is still digesting about $15 billion in purchases of U.S. arms in connection with
the Gulf war, and few major new sales are on the horizon. Having purchased
72 U.S.-made F-15S aircraft in 1993, (delivery completed in July 2000) DSCA
says there are reports that the Saudis will request to buy an additional 12 - 24
F-15's to replace aging F-5's, although no official request has been made. In
July 2000, the United States proposed a sale to Saudi Arabia of up to 500
AMRAAM missiles and related equipment and services, at an estimated cost
of $475 million, to outfit their F-15's. Congress did not attempt to block the
sale.

! A planned sale to Kuwait of an unspecified number of AH-64 “Apache”
helicopters has not materialized because of Kuwait’s indecision about the
equipment to be included, particularly the “Longbow” fire control system. A
U.S. offer to sell Kuwait 48 U.S.-made M109A6 "Palladin" artillery systems,
(worth about $450 million) was withdrawn in July 2000. The sale, which
might be revived later, had languished for about two years because of
opposition from several members of Kuwait’s National Assembly. Assembly
opponents of the sale believe that the Palladin is not the best available system
and that the purchase represents an attempt to curry political favor with the
United States.
! In 1998, Bahrain chose to purchase 10 F-16's from new production at a value
of about $390 million; delivery is planned for early 2001. In late 1999, the
Administration, with congressional approval, agreed to sell Bahrain up to 26
AMRAAM’s, at a value of up to $69 million, with delivery not to occur before
2002. Among the more controversial sales to a Gulf state, Bahrain has
requested up to 30 Army Tactical Missile Systems (ATACM’s), a system of
30 See CRS Report 98-436, United Arab Emirates: U.S. Relations and F-16 Aircraft Sale.
Updated June 15, 2000, by Kenneth Katzman and Richard F. Grimmett. Transmittal notices
to Congress, No. DTC 023-00, April 27, 2000; and 98-45, September 16, 1998.

CRS-24
short-range ballistic missiles fired from a multiple rocket launcher. Although
the Defense Department has told Congress the version sold to Bahrain would
not violate the rules of the Missile Technology Control Regime (MTCR)31,
some in Congress fear the proposed sale could facilitate the spread of ballistic
and cruise missiles in the Gulf.32 In an effort to allay these concerns, the
Administration is proposing a system of joint U.S.-Bahraini control of the
weapon under which Bahraini military personnel would not have access to the
codes needed to launch the missile.33
! Although Qatar has traditionally been armed by France and Britain, the Foreign
Minister said in mid-1997 that it is "probable" that Qatar will buy arms from
the United States in the future. No major U.S. sales seem imminent, but Qatar
is evaluating a few U.S. systems including the Patriot (PAC-III), the M1A2
“Abrams” tank, and a Low Altitude Surveillance System (LASS). The United
States has told Qatar it is eligible to buy the ATACM system (see above)
because the Administration has approved Bahrain for purchases of that system,
but Qatar has not expressed an interest in the ATACM to date.
! Oman has said it might select a new fighter aircraft after 2000 and, if it does,
it will likely resurrect past consideration of the U.S. F-16. However, with its
funds limited over the past few years, Oman has had to refurbish British-built
aircraft already in its possession. Oman does not appear to be considering the
purchase of any major U.S. systems at this time, although it has requested
some items be supplied as EDA, including patrol boats to combat smuggling.
Joint Security/ “Cooperative Defense Initiative.” The United States has
encouraged the GCC countries to increase military cooperation among themselves,
building on their small (approximately 5,000 personnel) Saudi-based force known as
Peninsula Shield, formed in 1981. Peninsula Shield did not react militarily to the Iraqi
invasion of Kuwait, casting doubt on the force's viability. Manpower shortages and
disagreements over command of the force have prevented the GCC states from
agreeing to a post-Gulf war Omani recommendation to boost Peninsula Shield to a
100,000 man force. Suspicions of Syria and Egypt have prevented closer military
cooperation with those countries, as envisioned under the March 1991 "Damascus
Declaration." However, in September 2000, the GCC states agreed in principle to
increase the size of Peninsula Shield to 22,000.34 It should be noted that the GCC
states have announced similar agreements on Peninsula Shield in the past without
implementation, and that no time timetable has been set for reaching this level of
31The MTCR commits member states not to transfer to non-member states missiles with a
range of more than 300 km, and a payload of more than 500 kilograms. Turkey, Greece, and
South Korea are the only countries to have bought ATACM’s from the United States.
32Ratnam, Gopal and Amy Svitak. "U.S. Would Keep Tight Rein on Missile Sold to
Bahrain." Defense News, September 11, 2000.
33Ibid.
34"GCC States Look to Boost 'Peninsula Shield' Force to 22,000." Agence France Press,
September 13, 2000.

CRS-25
strength. In October 2000, the GCC states announced that they are close to
completing the linking of their early warning radar and communication systems.
The linked GCC early warning system, which is expected to eventually include
a link to U.S. systems, is part of the Administration’s “Cooperative Defense Initiative”
to integrate the GCC defenses with each other and with the United States. Another
part of that initiative is U.S.-GCC joint training to defend against a chemical or
biological attack, as well as more general joint military training and exercises.35 The
Cooperative Defense Initiative appears to be a scaled-back version of an earlier U.S.
idea to develop and deploy a GCC-wide theater missile defense (TMD) system that
could protect the Gulf states from Iran's increasingly sophisticated ballistic missile
program and from any retained Iraqi ballistic missiles.36 The Department of Defense,
according to observers, envisioned this system under which separate parts (detection
systems, intercept missiles, and other equipment) of an integrated TMD network
would be based in the six different GCC states. In proposing such a project,
Secretary of Defense Cohen said on October 10, 1998, during a visit to the Gulf, that
TMD technology was sophisticated and costly. His statement implied that cost
sharing and integration among the GCC states was preferable to individual country
purchases of Patriots or other TMD equipment. However, that concept ran up
against GCC states’ financial constraints, differing perceptions among the Gulf states,
some level of mistrust among them, and the apparent UAE preference for Russian
made anti-missile/air defense systems.37 As noted in Table 3 above, Kuwait and
Saudi Arabia have Patriot anti-missile units of their own; the other four GCC states
have no missile defenses.
Conclusions and Prospects
U.S. Gulf policy faces several uncertainties when a new U.S. administration and
a new Congress take office in January 2001. Analysts expect that Iraq will continue
to show some success in breaking out of its international isolation, although probably
not to the point where it re-emerges as an immediate strategic threat to U.S. interests.
As long as Security Council states such as France and Russia argue its brief within the
Council, Iraq senses little urgency to allow a resumption of U.N. weapons inspections.
However, Iraq also has little incentive to undermine its powerful friends by
threatening its neighbors or resuming an all-out effort to rebuild its WMD programs.
With Iraq’s opposition divided and weak inside Iraq, it is not likely that U.S. efforts
to support the opposition will lead to a near-term coup d’etat or popular uprising
against Saddam Husayn.
35Press Conference with Secretary of Defense William Cohen. Office of the Assistant
Secretary of Defense (Public Affairs), April 8, 2000.
36Under Resolution 687, Iraq is allowed to retain and continue to develop missiles with a range
of up to 150 km, which would put parts of Kuwait and Saudi Arabia within range of Iraq,
even if Iraq abides completely by the provisions of the resolution.
37Finnegan, Philip. "Politics Hinders Joint Gulf Missile Defense." Defense News, March 22,
1999.

CRS-26
In Iran, observers sense some movement on the part of the regime to begin a
political dialogue with the United States or accept the Secretary of State's proposed
"roadmap" to normal relations. However, Khatemi is up for re-election in mid-2001
and his ability to undertake bold new foreign policy initiatives might be limited. If he
runs for re-election, a convincing win could allow Khatemi to push forward on
outreach to the United States. Whether Khatemi is politically weak or strong, Iran
will probably continue to develop its WMD programs, especially its ballistic missiles.
There is a consensus among all Iranian factions that the strategic threats facing Iran,
from Iraq, the United States, Afghanistan, Israel, or other quarters, justify developing
WMD. The September - October 2000 Israeli-Palestinian clashes have also unified
Iran’s factions to maintain support for Hizballah and the Palestinian rejectionist
groups.
Higher oil prices have brightened the economic and political outlook for the Gulf
regimes as 2000 draws to a close. However, in the relatively near future, Saudi
Arabia might face the completion of a leadership transition from King Fahd to Crown
Prince Abdullah, who is now King in all but formal title. The UAE might soon face
a leadership transition. Although unrest in Bahrain has quieted over the past two
years, the potential for renewed unrest remains if Amir Hamad is perceived to renege
on his promises of additional political reform.
Perhaps a more significant unknown is whether or not Gulf public sympathy with
the Palestinians in the September - October clashes will cause the Gulf regimes to
loosen their strategic ties to the United States. The Gulf states already have faced
some internal pressure to downplay their defense relations with the United States
because the cooperation is directed against Iraq, which is increasingly perceived in the
Gulf as unjustly victimized by U.S. and international sanctions. However, as long as
Saddam Husayn remains in power, the Gulf governments are unlikely to jeopardize
relations with the United States to the point where they might be vulnerable to Iraqi
pressure or intimidation. The Gulf states, although willing to improve relations with
Iran, are also unlikely to trust Iran to the point where they will allow it to dominate
Gulf security arrangements.

CRS-27
Appendix 1. Gulf State Populations, Religious Composition
Country
Total
Number of Non-
Religious Composition
Population
Citizens
Iran
68.9 million
607,000
89% Shia; 10% Sunni; 1%
Bahai, Jewish, Christian,
Zoroastrian
Iraq
21.7 million

60-65% Shia; 32-37%
Sunni; 3% Christian or
other
Saudi Arabia
20.8 million
5.2 million
90% Sunni; 10% Shia
Kuwait
1.91 million
1.56 million
45% Sunni; 40% Shia; 15%
Christian, Hindu, other
United Arab
2.3 million
1.56 million
80% Sunni; 16% Shia; 4%
Emirates
Christian, Hindu, other
Bahrain
661,300
224,600
75% Shia; 25% Sunni
Qatar
697,000
516,000
95% Muslim; 5% other
Oman
2.36 million

75% Ibadhi Muslim; 25%
Sunni and Shia Muslim,
and Hindu
Source: Central Intelligence Agency World Factbook, 1998. Population figures are estimates as of
July 1998. Most, if not all, non-Muslims in GCC countries are foreign expatriates.

CRS-28
Appendix 2. UNSCOM Accomplishments and Unresolved
Issues
Weapons Category
Accomplishments
Unresolved Issues
Overall Status: Nuclear
IAEA reports Iraq's
Questions remain about
nuclear program
nuclear design drawings,
dismantled and rendered
documents, and fate of
harmless (April and
some equipment
October 1998 reports)
Nuclear Fuel
All removed by IAEA
Nuclear Facilities
Dismantled by IAEA
Suppliers
IAEA says it has
Most of 170 technical
assembled a picture of
reports from a German
Iraq's nuclear suppliers
supplier unaccounted for
Overall Status: Chemical
Declared munitions,
Most outstanding questions
chemical precursors
involve Iraqi production of
destroyed by UNSCOM
VX nerve agent
VX nerve agent
Iraq admits producing 4
No verification of the fate
tons
of the agent
VX precursor chemicals
191 tons verified as
About 600 tons
destroyed
unaccounted for, enough to
make 200 tons of VX
Other chemical munitions
38,500 found and
Fate of 31,600 munitions,
destroyed by UNSCOM
550 mustard shells, and
107,000 chemical casings
unaccounted for
Chemical Weapons Agents
690 tons found and
3,000 tons unaccounted for
destroyed by UNSCOM
Precursor Chemicals
3,000 tons found and
4,000 tons unaccounted for
destroyed by UNSCOM
Chemical Monitoring
170 sites monitored during
No monitoring since
UNSCOM tenure
UNSCOM departure
Overall Status: Biological
UNSCOM has obtained
UNSCOM says most work
Program
Iraqi admissions that it had
remains in this category;
a biological warfare
no biological weapons
program
found by UNSCOM
Biological Agents
Iraq admitted producing
No verification of
19,000 liters of botulinum;
destruction or amounts
8,400 liters of anthrax; and
produced
2,000 liters of aflatoxin
and clostridium
Munitions
Iraq admits loading
No verification of bomb
biological weapons onto
destruction; fate of
157 bombs
additional 500 parachute-
dropped bombs unknown

CRS-29
Agent Growth Media
Supplier records show 34
4 tons unaccounted for
tons imported
Delivery Equipment
Iraq admits testing
Fate of these systems
helicopter spraying
unknown
equipment and drop tanks
Production Facilities
Salman Pak facility buried
UNSCOM notes that
by Iraq before inspections;
biological agents can be
Al Hakam bulldozed by
produced in very small
UNSCOM
facilities
Monitoring
86 sites monitored during
No monitoring since
UNSCOM tenure
UNSCOM departure
Overall Status: Ballistic
Almost all imported
Questions about Iraq's
Missiles
missiles accounted for
indigenous missile
production remain
Imported Scud Missiles
UNSCOM says it has
Two Scuds missing by
accounted for 817 of 819
UNSCOM accounting;
Scuds imported from
U.S. and Britain believe
Russia
10-12 Scuds still
unaccounted for
Chemical/Biological
75 warheads declared. 30
Two declared chemical
Warheads
destroyed by UNSCOM,
warheads may be missing.
and at least 43 others,
Undeclared chem/bio
including 25 biological
warheads may exist
warheads, verified as
destroyed
Imported Conventional
Iraq admits importing 50
Warheads unaccounted for
Warheads
Scud warheads for high
explosives
Indigenously-produced
30 warheads and 7 missiles
Missiles
unaccounted for
Missile Propellant
300 tons unaccounted for
Production Equipment
Iraq admits having 150
Fate unknown
tons of equipment
Monitoring
63 sites monitored during
Missiles of up to 150 km
UNSCOM tenure
range permitted. U.S.
reports note permitted
programs can benefit
research on prohibited-
range missiles.
Source: The information in this table is derived from reports to the U.N. Security Council by the
U.N. Special Commission on Iraq (UNSCOM) and the International Atomic Energy Agency.

CRS-30
Appendix 3. No Fly Zones in Iraq
T u r k e y
N O R T H E R N
Z O N E
I r a n
3 6 °
S y r i a
I r a q
B a g h d a d
3 3 °
S O U T H E R N Z O N E
( E X T E N D E D )
J o r d a n
3 2 °
S O U T H E R N
Z O N E
K u w a it
S a u d i A r a b i a
A d a p te d b y C R S f r o m M a g e lla n G e o g r a p h ix . U s e d w ith p e r m is s io n .
Northern No Fly Zone Established April 1991
Southern No Fly Zone (South of 32nd Parallel) Established August 1992
Southern No Fly Zone Extended to 33rd Parallel Established September 1996




























































































































































































































































































































































































































































































































































CRS-31
Appendix 4. Map of the Persian Gulf Region and Environs