Order Code RL31533
CRS Report for Congress
Received through the CRS Web
The Persian Gulf States:
Post-War Issues for U.S. Policy, 2003
Updated July 14, 2003
Kenneth Katzman
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

The Persian Gulf States:
Post-War Issues for U.S. Policy, 2003
Summary
The Bush Administration has said that the fall of Saddam Hussein’s regime in
April 2003 will ease the security challenges the Persian Gulf region faces. The U.S.-
led war has ended Iraq’s ability to produce weapons of mass destruction (WMD) and
virtually ended any Iraqi conventional military threat to the region. However, some
of the Persian Gulf states (Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, and the
United Arab Emirates) fear that Iraq might no longer serve as a strategic
counterweight to Iran and they fear that pro-Iranian Shiite Muslim groups might
obtain a major share of power in post-war Iraq. Substantial Administration concern
remains about Iran’s WMD programs, particularly what appear to be rapid advances
in its nuclear program, and the potential for Iran to transfer that technology or
materiel to the terrorist groups it supports.
Over the longer term, with Iraq no longer a major power and the United States
likely to sharply reduce its Gulf presence once Iraq is stabilized, the Gulf states might
try to fashion a new security architecture for the Gulf that is based more on regional
states and less on the United States. On the other hand, a reduction of the U.S.
military presence in the Gulf might benefit the Gulf states by easing internal
opposition to close cooperation with the United States.
Internally, most of the Gulf states are feeling pressure from a portion of their
publics who largely view the U.S. war on Iraq as an invasion and occupation and who
blame Gulf and other Arab governments for failing to head off the U.S. offensive.
The Gulf governments are also being blamed by some in their population for failing
to persuade the United States to end what is viewed in the region as a pronounced
U.S. tilt toward Israel in the Israeli-Palestinian dispute. At the same time, some Gulf
states are opening up their political processes as a means of deflecting popular
pressure. Many experts believe that political and economic reform are the keys to
long-term Gulf stability, as well as to the U.S. strategy of reducing support in the
Gulf states for terrorist groups such as Al Qaeda.
Prior to the U.S.-led war on Iraq, the September 11, 2001, terrorist attacks in the
United States had expanded the security challenges facing the United States in the
Persian Gulf region. The Gulf states allegedly tolerated the presence of Al Qaeda
activists and their funding mechanisms in the Gulf.
Fifteen of the nineteen
September 11 hijackers were of Saudi origin, as is Al Qaeda leader Osama bin Laden
himself.
The United States is working with the Gulf states to try to identify
suspected Al Qaeda cells and cut off channels of financial support to that and other
terrorist groups.
This report will be updated as warranted by regional developments.

Contents
Past Conflicts and Threat Perceptions in the Gulf . . . . . . . . . . . . . . . . . . . . . . . . . 1
Regime Change in Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Bush Administration Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Iran: Continued Concerns in the Post-War Gulf . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Bush Administration, the September 11 Attacks, and Iran . . . . . . . 7
The Persian Gulf Monarchies: Coping With Internal and External Threats . . . . . 8
Domestic Stability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Leadership Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Political Liberalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Economic Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Gulf Foreign Policy and Defense Cooperation with the
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Arab-Israeli Dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Policy Toward Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
War on Terrorism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Defense Agreements and U.S. Forces in the Gulf . . . . . . . . . . . . . . . . 18
U.S. Arms Sales and Security Assistance . . . . . . . . . . . . . . . . . . . . . . 23
Excess Defense Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Foreign Military Sales, FMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Joint Security/ “Cooperative Defense Initiative” . . . . . . . . . . . . . . . . . 26
Prospects and Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Appendix 1. Gulf State Populations, Religious Composition . . . . . . . . . . . . . . 29
Appendix 2. Map of the Persian Gulf Region and Environs . . . . . . . . . . . . . . . . 30
List of Tables
Table 1. Gulf Oil Exports (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 2. Comparative Military Strengths of the Gulf States . . . . . . . . . . . . . . . . 16
Table 3. U.S. Troops in the Gulf Area/ Host Nation Support . . . . . . . . . . . . . . . 22
List of Figures
Figure 1. Facilities Used by U.S. Forces in the Gulf . . . . . . . . . . . . . . . . . . . . . 23

The Persian Gulf States:
Post-War Issues for U.S. Policy, 2003
The Persian Gulf region is rich in oil and gas resources but has a history of
armed conflict and major threats to U.S. national security. The region has seen three
major wars in the past two decades: the Iran-Iraq war (1980-88), the Persian Gulf war
(1991), and Operation Iraqi Freedom (2003). This report, which will be revised
periodically, discusses U.S. efforts to manage remaining Gulf security interests as
well the new challenges highlighted by the September 11, 2001, attacks on the United
States and to adapt to the aftermath of the U.S.-led offensive to change Iraq’s regime
(Operation Iraqi Freedom). The report is derived from a wide range of sources,
including press reports, unclassified U.S. government documents, U.N. documents,
observations by the author during visits to the Gulf, and conversations with U.S,
European, Iranian, and Gulf state officials, journalists, and academics. For further
reading, see CRS Report RL31339: Iraq: U.S. Regime Change Efforts and Post-War
Governance
; CRS Issue Brief IB93033, Iran: Current Developments and U.S.
Policy
; and CRS Issue Brief IB93113, Saudi Arabia: Post-War Issues and U.S.
Relations
; CRS Report RL31718, Qatar: Background and U.S. Relations; CRS
Report RS21513, Kuwait: Post-War Issues and U.S. Policy; CRS Report 95-1013,
Bahrain: Post-War Issues and U.S. Policy; CRS Report RS21534, Oman: Current
Issues
; and CRS Report 98-436, United Arab Emirates: U.S. Relations and F-16
Aircraft Sale
.
Past Conflicts and Threat Perceptions in the Gulf
Iran, Iraq, and the six Gulf monarchy states that belong to the Gulf Cooperation
Council (GCC, comprising 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 produce about 28% of the world’s oil supply, according to
the U.S. Energy Information Administration. Saudi Arabia and Iraq are first and
second, respectively, in proven reserves. Iraq, which is relatively unexplored and in
which new energy exploration is barred by U.N. sanctions, might ultimately be
proven to hold 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 almost certainly be a major source of energy well
into the 21st century, although many experts increasingly see the Central
Asia/Caspian countries and Russia as energy sources likely to rival the Gulf. Each
of the Gulf states, including Iran and Iraq, appears to have an economic interest in the
free flow of oil, but past political conflict in the Gulf and broader Middle East has

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often led to sharp fluctuations in oil prices and increased hazards to international oil
shipping.
Both Iran and Iraq have threatened U.S. security interests directly and indirectly,
and past conflicts in the Gulf have threatened to spin out of control when weapons
of mass destruction (WMD) and ballistic missiles were used. Iran and Iraq fought
each other during 1980-1988, jeopardizing the security of the Gulf states, and each
has fought the United States, although in differing degrees of intensity. Iran and the
United States fought minor naval skirmishes during 1987-88, at 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 naval
vessels. On July 3, 1988, the United States mistakenly shot down an Iranian
passenger aircraft flying over the Gulf (Iran Air flight 655), killing all 290 aboard.
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 (Operation Desert Storm, 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 by half, but, prior to Operation Iraqi
Freedom, Iraq was still superior to Iran and the Gulf states in ground forces. Iran’s
financial capabilities are limited, but it faces no mandatory international restrictions
on its imports of advanced conventional weapons, and Iran has been slowly rearming
since 1990.
In addition to their conventional forces, both Iran and Iraq 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. Israel was
sufficiently concerned about Iraq’s nuclear program that it conducted an air-strike
against Iraq’s French-built Osirak nuclear reactor on June 7, 1981, temporarily setting
back Iraq’s nuclear effort. During the 1991 Gulf war, Iraq fired 39 enhanced Scud
missiles at Israel, a U.S. ally, and about 50 enhanced Scud 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 On ten occasions during that conflict, it used
chemical weapons against Iranian troops and Kurdish guerrillas and civilians, killing
over 26,000 Iranians and Kurds.2 U.N. weapons inspectors dismantled much of
1 The 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.
2 Central Intelligence Agency. Iraq’s Weapons of Mass Destruction Programs. October
2002, p. 8. According to the study, Iraq used mustard gas, tabun, and other “nerve agents.”
According to the report, the majority of the casualties were Iranian, suffered during major
Iranian offensives, including Panjwin (October-November 1983, Majnoon Island (February-
March 1984), the Hawizah Marshes (March 1985), Al Faw (February 1986), Basra (April
(continued...)

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Iraq’s WMD infrastructure during 1991-1998, but they left in 1998 due to Iraqi
obstructions and without clearing up major unresolved questions about Iraq’s WMD.
New U.N. inspections began, under threat of U.S. force, in November 2002, but were
ended after the Bush Administration and its allies determined that Saddam Hussein’s
regime would not fully cooperate and decided to overthrow the regime by force.
Operation Iraqi Freedom ensured that Iraq’s WMD programs were ended but
Iran’s WMD programs are not subject to the same scrutiny as that applied to those
of Iraq. Some of Iran’s programs have made significant strides during the 1990s with
substantial help from Russia, China, North Korea, and other countries and entities.
It is openly testing extended range missiles and building civilian nuclear
infrastructure that the United States asserts would only be suitable if Iran were
attempting to achieve a nuclear weapons capability.
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, even
when Saddam Hussein was in power. 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 carry out terrorist
attacks against Israelis. Some pro-Iranian groups have sought to destabilize some of
the Gulf states, although Iran’s support for these groups has diminished since Iran’s
relatively moderate President Mohammad Khatemi came into office in 1997 and
subsequently improved relations with the Gulf states. U.S. law enforcement officials
say Iranian operatives were involved in the June 1996 bombing in Saudi Arabia of
the Khobar Towers housing complex for U.S. military officers, in which 19 U.S.
airmen were killed. Iraq publicly supported Palestinian violence against Israel, but
reports indicate that, over the past decade, Baghdad had limited contact with the
groups that are most active in violence and terrorism against Israel. According to
publicly available information, neither Iran nor Iraq has been linked to the September
11 attacks, although press reports say that some Al Qaeda activists fleeing
Afghanistan have transited or took refuge in both countries.
Both countries have been accused by successive U.S. administrations as
systematic violators of human rights.
Saddam Hussein’s regime was long
considered by the U.S. government as a gross violator of human rights based on its
treatment of political dissidents, the Shiite majority, and the Kurds and other ethnic
minorities. The Clinton Administration pressed for a war crimes tribunal for
Saddam Hussein and 11 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.
2 (...continued)
1987), and Sumar/Mehran (October 1987).

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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. They allow limited formal opportunity for
popular participation in national decision-making, although several, particularly
Bahrain, Qatar, and Oman, are opening up their political processes and earning U.S.
official praise for doing so. Kuwait has had a vibrant, elected parliament for over
four decades, although the parliament has periodically been suspended and female
suffrage is still banned there. Some of the Gulf states, including Saudi Arabia,
Kuwait, and the United Arab Emirates, are undergoing leadership transitions;
Bahrain’s leadership passed to a new generation in March 1999 when the long
serving Amir (ruler) died suddenly.
The September 11 attacks have heightened U.S. concerns about radical Islamic
activists operating in the Gulf states. These activists, who might be linked to or
sympathetic to Al Qaeda, do not currently appear to threaten the stability of any of
the Gulf regimes, although the networks could be planning acts of terrorism against
U.S. forces and installations there. The September 11 attacks have stimulated some
sources of tension between the United States and some of the Gulf monarchy states,
particularly Saudi Arabia, over allegations that Gulf donors have, wittingly or
unknowingly, contributed to groups and institutions linked to Al Qaeda and other
terrorist organizations.
Regime Change in Iraq
During the 1990s, the primary U.S. objective in the Gulf was to contain the
threats posed by Iraq and Iran. 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. Iraq’s failure to fully comply with
U.N. Security Council resolutions since its military expulsion from Kuwait in 1991
kept the United States and Iraq at odds.
In November 1998, the Clinton
Administration publicly added a dimension to U.S. policy that went beyond
containment — promoting the change of Iraq’s regime — although the Clinton
Administration ruled out major U.S. military action to achieve that goal.
U.S. efforts to keep Iraq strategically weak and politically isolated underwent
several adjustments after the Gulf war ended in 1991. During 1991-1997, the United
States and its allies relied largely on U.N. weapons inspections established 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), which imposed a comprehensive embargo on Iraq, prohibit it
from importing any 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 obtain a ruling from
UNSCOM that all its WMD programs had been ended. Under Resolution 687 (April
3, 1991), such a ruling would have opened Iraq to the unrestricted exportation of oil.

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In 1997, Iraq apparently determined that it would not obtain a favorable U.N.
Security Council decision to ease sanctions, and it reduced its cooperation with
UNSCOM. Beginning in October 1997, Iraq obstructed the work of UNSCOM
teams (designating certain sites “off-limits,” attempting to alter the composition of
inspection 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. From
then until November 2002, there had been virtually no independent WMD
inspections in Iraq, with the exception of a few International Atomic Energy Agency
(IAEA) visits to monitor Iraq’s compliance with its Nuclear Nonproliferation Treaty
(NPT) obligations. In December 1999, the U.N. Security Council attempted to
persuade Iraq to accept new inspections under U.N. Security Council Resolution
1284 (December 17, 1998), but Iraq refused to allow new inspections.
To ensure that Iraq could not use its still formidable conventional forces against
its neighbors, the United States and Britain patrolled “no fly zones” over northern
and southern Iraq in the “Northern Watch” and “Southern Watch” operations,
respectively.3 Together, the zones cover approximately 62% of Iraq’s territory. The
enforcement of the zones was not specifically authorized by U.N. Security Council
resolutions, but they were set up by the United States, France, and Britain to monitor
Iraq’s compliance with Resolution 688 (April 5, 1991), which demands that Iraq
cease repressing its people.
Bush Administration Policy. The Bush Administration, in the aftermath
of the September 11 attacks, moved policy toward Iraq from containment to regime
change, as part of the overall “war on terrorism.” In his January 29, 2002, State of
the Union message, President Bush called Iraq part of an “axis of evil,” along with
North Korea and Iran. He identified the key threat as Iraq’s potential to deliver
WMD against the United States and its friends and allies, or to transfer WMD
technology to terrorist groups.
In the view of the Administration, Iraq’s Hussein would never disarm and
needed to be overthrown if the goal of eliminating Iraq’s WMD programs was to be
accomplished. Others believed Iraq could be persuaded, possibly by threatening
force, to cooperate with a U.N. disarmament process, and that this would ensure U.S.
interests without necessitating a change of regime.
Operation Iraqi Freedom was launched on March 19, 2003, and the regime of
Saddam Hussein fled Baghdad on April 9, leaving U.S. and allied forces in effective
control of Iraq. As discussed further in the concluding section to this paper, the
overthrow of Saddam Hussein has generated a sense of relief among the Gulf states,
but also apprehension, as long as a stable, moderate government is not in place in
Iraq and attacks on U.S.-led forces continue. The Gulf states are concerned that
continued casualties will cause the United States to withdraw before a stable
3 In January 1997, following a U.S. confrontation with Iraq in August 1996, France ended
its participation in Northern Watch. It ceased participating in Southern Watch following
Operation Desert Fox (December 16-19, 1998).

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democracy is established. Some Gulf states are concerned that the strategic weakness
of post-war Iraq will embolden Iran to take a more active role in Gulf security and
to seek to enlist the Gulf states in an Iran-led Gulf security structure.
Iran: Continued Concerns in the Post-War Gulf
As noted previously, the United States and Iran have been mostly at odds since
the February 1979 Islamic revolution there. The May 1997 election of a reformist,
Mohammad Khatemi, as Iran’s President prompted the United States to attempt to
end the mutual acrimony. However, Khatemi is surrounded by a power structure and
officials, in place since the 1979 Islamic revolution, that is deeply suspicious of the
United States and which controls the coercive arms of the state (military, police, and
judiciary). This part of the power structure, led by Supreme Leader Ali Khamene’i,
who is Iran’s top leader under Iran’s constitution, has curbed Khatemi’s ability to
improve relations with the United States and slowed the momentum of internal
reform. Some U.S. officials no longer believe that engaging Khatemi’s government
would prove productive,4 but the two countries have had some direct dialogue since
2001 to discuss U.S. regime change operations in Afghanistan and Iraq, both of
which border Iran.
U.S. foreign policy experts have argued that improved relations with Iran could
help the United States accomplish several goals, including containing Saddam
Hussein’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 Taliban regime
in Afghanistan, which was at odds with Iran from the time it took power in Kabul in
September 1996. Some U.S. corporations, meanwhile, argued that improved U.S.-
Iranian relations could help open up new energy routes for Caspian/Central Asian
energy resources, benefit U.S. exporters, and end trade disputes with U.S. allies
precipitated by U.S. secondary sanctions laws.5 Others maintained that the United
States could not and should not isolate a country of over 65 million people, with a
location and resources as strategic as those of Iran.
The Clinton Administration sought dialogue with Khatemi’s government to
advance these U.S. interests and to press U.S. concerns, which it defined primarily
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.
However, Iran refused direct dialogue with the United States until the September 11,
2001, attacks brought the United States, in force, into Iran’s immediate
neighborhood.
4 Kessler, Glenn. U.S. Changes Policy on Iran. Washington Post, July 23, 2002.
5 The 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-7
The Bush Administration, the September 11 Attacks, and Iran. The
Bush Administration came into office espousing much the same policy toward Iran
as the preceding administration - offering dialogue but repeating U.S. concerns and
insisting those concerns be addressed. After the September 11 attacks, there was
substantial optimism for a major breakthrough in relations when Iran largely
cooperated with the U.S. effort to defeat the Taliban and install a new government.
Some note that Iran had long wanted the Taliban ousted, so that backing the U.S.
effort was in Iran’s own interests and did not necessarily represent a new effort to
reach out to the United States or a turning away from support for international
terrorism. Immediately after the defeat of the Taliban, revelations of an Iranian arms
shipment to Palestinians linked to the Palestinian Authority (January 2002), and
indications of Iranian meddling inside Afghanistan, reversed the warming trend and
revived longstanding U.S. suspicions of Iran. President Bush characterized Iran as
part of an “axis of evil,” along with North Korea and Iraq, in his January 29, 2002
State of the Union message. U.S. officials have since added that there is evidence
some Al Qaeda activists have been allowed — possibly by radicals in Iran’s
Revolutionary Guard or its intelligence services — to transit or take refuge in Iran,
although there is no evidence that it is official Iranian policy to back the group.
U.S. concerns about Iran’s WMD programs, particularly its nuclear program,
have heightened as Iran has advanced these programs over the past year. Khatemi
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 an erstwhile enemy and now U.S. forces in Iraq
and a nuclear-armed Israel to the west; by a nuclear-equipped Pakistan and a now
U.S.-dominated Afghanistan, to the east; by U.S. forces in the Gulf, to Iran’s south;
and by U.S. forces now based in Central Asia and increasingly present in the
Caucusus, to the north. At the same time, progress on WMD could embolden Iran
to try to intimidate the Gulf states, particularly now that Iraq is no longer a military
power in the region. 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 program. Since July 1998, Iran has conducted four
tests of 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. The latest
of the tests, in June 2003, appears to have been successful because, following the test,
Iran declared the missile operational.
In December 2002, commercial satellite photos revealed at least two new sites,
Arak and Natanz, that U.S. experts believe are part of a nuclear weapons program.
A June 2003 IAEA report, based on an IAEA visit to Iran in February 2003, criticized
Iran for failing to promptly declare all aspects of its nuclear program, but it stopped
short of declaring Iran in breach of its NPT obligations. There are disagreements
inside Iran over the degree to which Iran should cooperate — or appear to cooperate
— by bending to IAEA and international demands to sign the “Additional Protocol”
to the NPT that would allow for intrusive inspections of its nuclear facilities.
The United States is also watching the balance of factions inside Iran to
determine whether or not more moderate forces might prevail, on the assumption that
reformist elements might eventually shift Iran’s foreign policy course. President

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Khatemi has attempted to liberalize social and political life since taking office, but
conservative forces in Iran appear to have gained the upper hand politically and are
thwarting most of his internal reforms. U.S. officials say that they doubt that
Khatemi can gain the upper hand in this power struggle, and a July 12, 2002
statement issued by President Bush, as well as subsequent statements, indicated a
shift in U.S. policy by expressing support for Iranian reformers and Iran’s people, not
for Khatemi or his government. However, since 2001 the two countries have
conducted official dialogue on Iraq and Afghanistan, suggesting that U.S. officials
see utility in a degree of engagement with Iran. No U.S. policy shift toward regime
change in Iran has been announced, although there is said to be discussion within the
Administration of this option, as well as of specific counter-proliferation military
actions.
The Persian Gulf Monarchies: Coping With
Internal and External Threats
Over the past two decades, U.S. attempts to contain the threats from Iran and
Iraq have depended on cooperation with the Persian Gulf monarchies of the Gulf
Cooperation Council (GCC).6 Those threats made the Gulf states highly dependent
on a significant military presence in the Gulf. Some Gulf states are concerned that
the United States might turn its attention away from the Gulf now that Saddam
Hussein has been removed. However, the United States is likely to remain highly
engaged in the Gulf because the September 11 attacks added a new dimension to U.S.
relations with the Gulf states beyond the need to contain longstanding threats from
Iran or Iraq. After the September 11 attacks, the United States began pressing the
Gulf states for their cooperation against Al Qaeda activists and financial channels
located in the Gulf states themselves. The need for the United States to deal with all
the security threats emanating from the Gulf gives the United States a stake in the
political stability of the Gulf regimes. Despite the threats they face, the GCC states
have proved more durable politically than some experts 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. (See Appendix 4 for a map of the
Gulf region.)
Domestic Stability
Many of the Gulf monarchies face potential threats to political stability.
Although some, such as Bahrain and Saudi Arabia, have experienced open unrest
since the 1991 Gulf war, virtually all of the Gulf governments appear to be firmly
in power. Several are undergoing leadership transitions, and some are gradually
6 For further information on the Gulf states, see CRS Issue Brief IB93113, Saudi Arabia:
Post-War Issues and U.S. Relations
; CRS Report RS20354, Qatar: Background and U.S.
Relations
; 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-9
opening up their political processes. Since the September 11 attacks, the United
States has heightened its attention to public attitudes in the Gulf in light of surveys
and reports that many Gulf citizens are sympathetic to at least some of the goals of
radical Islamic movements such as Al Qaeda. Al Qaeda leader Osama bin Laden is
viewed by many Gulf citizens as a revolutionary Islamic figure who is fighting to
overcome U.S. influence over the Islamic world,7 but bin Laden supporters and other
Islamic activists do not appear to pose a major challenge to the Gulf regimes at this
time. Some U.S. officials are concerned that Al Qaeda, defeated in Afghanistan,
might turn its attention to destabilizing pro-U.S. Arab governments in the Gulf or
elsewhere and to attacking U.S. forces based in the Gulf.
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 have already begun to cloud political or economic reform efforts under
way or planned.
! In Saudi Arabia, King Fahd suffered a stroke in November 1995 and,
although still holding the title King, he has yielded day-to-day
governance to his half-brother and heir apparent, Crown Prince
Abdullah.
Abdullah is the same age as Fahd (about 79) but
Abdullah appears to be in reasonably good health. Abdullah has
been 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 and rectitude, could account for his relative
popularity among the Saudi tribes and religious conservatives. At
the same time, Abdullah has tried to design and time some of his
own initiatives on the Middle East peace process and Arab reform
to coincide with and support those announced by the Bush
Administration. There have been repeated reports in recent months
that King Fahd would formally relinquish power, but he has not
done so to date.
! In Bahrain, the sudden death of Amir (ruler) 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.
In February 2002, he formally changed Bahrain into a kingdom and
took the title King instead of Amir.
King Hamad has moved
decisively to try to address the grievances that caused Bahrain’s
unrest in the mid-1990s, as discussed below. King Hamad is about
53 years old and has named his son Salman, who is about 33 years
old, as Crown Prince. This has caused some friction with King
Hamad’s uncle, Khalifa bin Salman Al Khalifa, who serves as Prime
Minister and is considered a traditionalist rather than a reformer.
7 For more information on bin Laden, see CRS Report RL31119, Terrorism: Near Eastern
Groups and State Sponsors, 2002.
February 13, 2002, by Kenneth Katzman.

CRS-10
! The UAE is in transition from the ailing Shaikh 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, who is about 45, is the likely
successor, and Khalifa has been assuming a higher profile in the
UAE over the past few years. Khalifa’s formal succession could
become clouded if the rulers of the other six emirates of the UAE
federation, or even factions within Abu Dhabi itself, oppose him as
leader. However, the UAE is well placed to weather this transition
because it has faced the least unrest of any of the Gulf states, its
GDP per capita ($22,000 per year) is the highest in the Gulf, and
there are few evident schisms in the society.
! The reform-minded ruler of Qatar, Shaikh Hamad bin Khalifa Al
Thani, overthrew his father in a bloodless coup in June 1995.
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. The Amir’s reform agenda,
as well as his attempts to carve out a foreign policy independent
from that of Saudi Arabia, has garnered wide support internally and
there has been little evidence of unrest.
However, there are
indications that, prior to September 11, Al Qaeda activists were
present in or transited Qatar. Amir Hamad is about 51 years old.
! In Kuwait, virtually the entire top leadership is ailing, particularly
Amir Jabir al-Ahmad Al-Sabah and Crown Prince Sa’d al-Abdullah
Al-Sabah. Deputy Prime and Foreign Minister Sabah al-Ahmad Al-
Sabah has run the government day-to-day for at least the past three
years. The leadership uncertainty has created significant delays in
making key political economic decisions, such as allowing foreign
investment in the energy sector, and fostered an image of political
stagnation. In an effort to move decisionmaking forward, the Amir
tapped Shaikh Sabah on July 12, 2003 to be Prime Minister (he was
acting in that capacity previously), thereby separating the post of
Prime Minister and Crown Prince. Over the longer term, there are
several younger potential successors with significant experience in
government, such as Minister of State for Foreign Affairs
Mohammad Al Sabah and Oil Minister Ahmad al-Fahd Al Sabah,
but they have not sought to persuade the existing leaders to step
down. 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 63 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. Like his colleagues in

CRS-11
Qatar and Bahrain, Qaboos has undertaken numerous reforms,
although at a more gradual pace than those two states.
Political Liberalization. Some Gulf leaders are gradually opening the
political process, in part to help them cope with the challenges of modernization and
globalization.
The Gulf leaders undertaking these steps hope that political
liberalization will ensure stability, although some fear that this process could
backfire by empowering Islamic extremists and providing the Islamists a platform
to challenge the incumbent regimes. In the immediate aftermath of the 1991 Gulf
war, the United States actively encouraged the Gulf states to open their political
systems, but largely dropped that from the U.S. agenda in the late 1990s and early
2000’s as defense and security needs of containing Iraq and Iran took priority.
Since the September 11 attacks, U.S. officials have said that the United States
must work to bring political and economic reform to the Middle East, and
encouraging political liberalization has returned to a leading position on the U.S.
agenda for the Gulf. U.S. officials see liberalization as a means of reducing support
in these countries for extremist movements. U.S. officials also stress that they are
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. U.S. diplomats are
pressing for adherence to the rule of law, economic transparency, judicial reform,
improvement in the education system, and the opening of the media. The Bush
Administration is promoting these reforms with U.S. Agency for International
Development (USAID) programs as well as those funded by the State Department’s
Near East Bureau and its Bureau of Democracy, Human Rights, and Labor. On
December 12, 2002, Secretary of State Powell announced a new “Middle East
Partnership Initiative,” to include new funds for promoting these reforms in the Gulf
and elsewhere in the Middle East. (For information on the Partnership Initiative and
funding amounts provided by it, see CRS Report RS21457, The Middle East
Partnership Initiative: An Overview
.)
! Kuwait has traditionally been at the forefront of political
liberalization in the Gulf, but it has not moved further on this front
in the past few years. In response to popular pressure after its 1991
liberation, Kuwait revived its elected National Assembly in October
1992, after six years of suspension. Kuwait’s 50-seat Assembly still
has more influence in decision-making and more scope of authority
than any representative body in the GCC, with the power to review
and veto governmental decrees.
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 Clinton
Administration expressed support for the government’s effort. The
government has not aggressively renewed the push for female
suffrage since. On July 5, Kuwait held its tenth National Assembly
elections with an electorate of about 136,000 males. Reformists lost
most of their seats, and Islamist candidates retained their
approximately one-third share of seats. However, pro-government
assembly deputies, mostly tribal and trading family representatives,
have a working majority in the body, and it is possible that female

CRS-12
suffrage might be enacted if the government presses the issue
forcefully.
! In the start of a series of initiatives to expand public participation, 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. The constitution was adopted in a national referendum, in
which women voted, in April 2003. Its approval (by 97% of the
electorate) paves the way for elections to a one-chamber assembly,
to be held as early as the end of 2003. Thirty seats of the 45-seat
body are to be elected, with the remaining fifteen appointed. The
constitution also provides for an independent judiciary. Qatari
officials say the assembly’s proceedings will be public.
! On September 14, 2000, Oman held the first direct elections to its
83-seat Consultative Council. The electorate consisted of 25% of all
citizens over 21 years old - mostly local notables and elites. The
process contrasted with past elections (1994 and 1997) in which a
smaller and more select electorate chose two or three nominees per
district and the Sultan then selected final membership. Two women
were elected. At the same time, Qaboos appointed new members,
including five women, to the 53-seat State Council. The State
Council serves, in part, as a check and balance on the elected
Consultative Council. Many State Council appointees are former
government officials and they tend to be somewhat older than the
members of the Consultative Council. On November 21, 2002,
Qaboos announced he was extending voting rights to all citizens
over 21 years of age, beginning with the October 2003 Consultative
Council elections.
! The King of Bahrain has largely abandoned his late father’s refusal
to accommodate opposition demands to restore an elected national
assembly. In February 2002, Bahrain held a referendum on a new
“national action charter,” establishing procedures for electing a 40-
member national assembly. Those elections (two rounds) were held
in late October 2002, and most of the seats were won by moderate
Islamists. None of the eight female candidates were elected. Shiite
opponents of the Sunni-dominated government boycotted the
elections, claiming that the formation of an appointed upper body
of the same size represented an abrogation of the government’s
promise to the 1973 parliamentary process. (No appointed upper
body was established during the 1970s, but the parliamentary
experiment lasted only 2 years when it was closed for fears the
parliament represented a challenge to Al Khalifa rule.) The boycott
lowered turnout to about 50%. Shiites constitute about two-thirds
of the population and some Shiite oppositionists charged that the

CRS-13
government is preventing them from achieving the degree of
representation in decision-making that they deserve.
Other
oppositionists are willing to cooperate with the government in
gradual reform.
In the other Gulf states, political liberalization has been significantly slower.
Saudi Arabia expanded its national consultative council to 90 seats from 60 in 1997,
and again to 120 seats in 2001. It continues to rule out national elections or the
appointment of women to the Council, but it has tapped some women to be advisers
to the Council. Within the past few years, the Saudi government has parted with
tradition by naming two women to high ranking government positions.
The UAE has not moved to broaden the authority of its forty seat advisory
Federal National Council, and has undertaken few, if any political reforms, although
some observers say the press has become increasingly open. The wife of UAE
President Shaikh Zayid bin Sultan al-Nuhayyan said in January 1999 that women
would be given a role in the political life of the UAE in the future, and Shaikh Zayid
subsequently appointed a woman to be undersecretary of the Ministry of Labor and
Social Affairs, the first woman to hold a high-ranking post.
Despite the move toward political openness in some of the Gulf states, the
United States believes 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, and suppression of peaceful assembly and
free expression. Saudi Arabia actively prohibits the practice of non-Muslim religions
on its territory, even in private, with limited exceptions. Qatar prohibits public non-
Muslim worship but 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.
A June 2003 State Department report, “Supporting Human Rights and
Democracy,” outlines steps the Bush Administration is taking to promote civil
society in the Gulf, both directly and through private organizations. Initiatives
include, for example, judicial reform (Bahrain); political participation by women
(Kuwait, Qatar); parliamentary development (Oman); and independent journalism
(Saudi Arabia).
Economic Reform. At the same time the Gulf states are coping with political
change, some are taking steps to reform their economies and to shore up their key
asset, energy resources, by inviting foreign investment in that sector. As noted in
Table 1 below, oil export revenues still 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.

CRS-14
Table 1. Gulf Oil Exports (2001)
Total Oil
Oil Exports
Oil
GDP
Country
Exports
to U.S.
Revenues
(billion
dollars,
(mbd)
(mbd)
as % GDP
2000)
Iran
2.6
0
45%
99.0
Iraq (pre-war)
2.0
0.78
100%
15.0
Kuwait
1.8
0.26
50%
33.4
Saudi Arabia
7.4
1.66
40%
185.0
Qatar
0.8
negligible
30%
12.4
U.A.E.
2.1
negligible
33%
58.0
Oman
0.9
0
40%
17.7
Bahrain
0.02
0
30%
6.9
Total
17.82
2.70
N/A
N/A
Source: DOE, Energy Information Agency (EIA), OPEC Revenue Fact Sheet. Some
figures from supporting EIA data.
A sharp oil price decline in 1997-1998 prompted the Gulf monarchy states to
reevaluate their longstanding economic weaknesses, particularly 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, some of the Gulf states have chosen to
focus on attracting international capital to the energy and other sectors. Qatar has
partnered with foreign investors such as Exxon Mobil, Totalfina Elf (France), and
others to develop its North Field, the world’s largest non-associated gas field, which
now has customers in Asia and sells some liquified natural gas (LNG) to the United
States.
Kuwait and Saudi Arabia have begun discussions with Western oil companies,
including several American firms, about
further developing their oil and gas
reserves. However, internal opposition to opening up this vital asset to foreign
investors has significantly slowed the entry of international firms into this sector in
the two countries. Proponents of foreign investment maintain that international
firms bring technology and capital that are now in short supply to the Gulf’s state-
owned oil companies, such as Saudi Aramco and Kuwait Petroleum Company
(KPC). The Kuwaiti government has not obtained National Assembly approval for
opening the energy sector to foreign investment, and its “Project Kuwait,” a plan
under which foreign investors would develop Kuwait’s northern oil fields, has
moved forward only slowly. However, Kuwaiti officials told visiting congressional
staff in July 2003 that the project has been put out for bid, using an investment plan

CRS-15
that would not require explicit National Assembly approval.8 Similarly, Saudi Crown
Prince Abdullah’s initiative to open the Kingdom’s gas reserves to foreign
development, has stalled. Saudi Arabia and eight foreign firms signed a preliminary
agreement in June 2001 to develop three Saudi gas fields; two of the three would be
led by Exxon Mobil. However, the agreement collapsed in May 2003 and its future
is uncertain. Factors contributing to the derailment of the deal reportedly included
obstructions by Saudi officials who do not want Saudi Aramco to lose influence, and
differences between Saudi Arabia and the foreign investors on commercial terms.
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
property rights of U.S. companies.
Oman was admitted to the World Trade
Organization (WTO) in October 2000, and Saudi Arabia, the last GCC state not a
member of that body, is in negotiations to join it. Some Saudi officials blame the
United States for insisting on terms of entry that are too strict, and U.S. officials say
that Saudi Arabia is seeking terms that are overly generous and which would allow
it to avoid required reforms.
In 1994, all six GCC countries relaxed their
enforcement of the secondary and tertiary Arab boycott of Israel, enabling them to
claim that they no longer engage in practices that restrain trade (a key WTO
condition). In December 2002, the GCC states agreed to implement a “customs
union,” providing for uniform tariff rate on foreign imports for all the GCC states;
the move had been under negotiation for many years.
Gulf Foreign Policy and Defense Cooperation with the
United States

Even with Saddam Hussein’s regime removed, the Gulf states will likely
continue to ally with the United States to ensure against potential Iranian aggression
or intimidation. However, some experts believe that, with the strategic threat from
Iraq now removed, some of the Gulf states might distance themselves from the
United States and move closer to a broad Arab consensus on issues such as the
Israeli-Palestinian dispute. Although their combined forces might be equipped as
well as or better than Iran (see Table 2 below), the Gulf countries suffer from a
shortage of personnel willing to serve in the armed forces or commit to a military
career, and they generally lack much combat experience.
8 Conversations with Kuwait officials in Kuwait City, July 3-6, 2003.

CRS-16
Table 2. Comparative Military Strengths of the Gulf States
Naval Units
Defense
Patriot
Military
Surface-Air Combat
Budget
Country
Tanks
Firing
Personnel
Missiles
Aircraft
(billion
Surface
Sub-
Units
dollars)
Combatants marines
201,000 (incl. 1,055 (incl. 33 batteries, 348
Saudi
75,000 Saudi
315 M-1A2
(about half I- (incl. 174
34
0
20
27.2
Arabia
National
Abrams)
Hawk)
F-15)
Guard)
5
411 (incl. 330
UAE
64,500
(I-Hawk
101
18
0

3.9
Leclerc)
batteries)
Oman
43,400
153
2 batteries
40
13
0

2.4
385
82 (incl.
10 batteries
Kuwait
15,500
(incl. 218 M-
40 FA-
10
0
5
3.3
(incl. 4 Hawk)
1A2 Abrams)
18)
75 SAM’s
Qatar
12,300
35
(incl. 12
18
7
0

1.5
Stinger)
34 (incl. 11 (incl. 1
Bahrain
11,000
106
2 batteries
0

.315
22 F-16)
frigate)
2,200
(pre-war;
1,500
40,000
post-war
launchers
Iraq
(planned)
316
6
0

1.4
numbers not (incl. various
known
SAM’s)
Iran
513,600
1,565
76 batteries,
283
66 (incl. 10 6 (incl.

9.1
(incl. I-Hawk)
Hudong)
3 Kilo)
plus some
plus 40
Stinger
Boghammer
Source: International Institute for Strategic Studies, The Military Balance 2001-2002. (Note: Figures shown
here do include materiel believed to be in storage)
Iraqi 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.

CRS-17
Arab-Israeli Dispute.
In return for U.S. strategic protection to the Gulf
states, these states have generally provided tangible diplomatic and material support
to other aspects of U.S. policy in the Middle East, including U.S. policy toward the
Israeli-Palestinian dispute.
In the aftermath of the 1993 Israeli-PLO mutual
recognition, the GCC states participated in the multilateral peace talks, but only
Bahrain, Qatar, and Oman hosted sessions of the multilaterals. As noted above, in
1994 the GCC states 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 was established 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. Diplomats from all six Gulf states met with Israeli
diplomats during reciprocal visits or at the margins of international meetings.
On the other hand, the Gulf states are Arab states and try not to stray far from
a broader Arab consensus. Differences between the Gulf states and the United States
on the Palestinian-Israeli dispute did widen after the latest Palestinian uprising began
in September 2000. After the Palestinian uprising began in September 2000, Oman
closed its trade office in Israel and ordered Israel’s trade office in Muscat closed.
Qatar announced the closure of Israel’s trade office in Doha, although observers say
the office has been tacitly allowed to continue functioning at a low level of activity.
(Qatar did not open a trade office in Israel.) Even though the Gulf states 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
Palestinian families that have lost members to Israeli military operations or in the
course of perpetrating violence against Israelis. Although all the Gulf leaders have
expressed sharp disagreement with Bush Administration policy that they believe is
too heavily tilted toward Israel, the Gulf states have not, as was feared, taken steps
to reduce defense cooperation with the United States. Saudi Crown Prince Abdullah
has tried to guide and support U.S. policy on this issue; he engineered Arab League
approval of a vision of peace between Israel and the Arab states at the March 2002
Arab summit. The Gulf states have all publicly endorsed the Bush Administration’s
“road map” for Israeli-Palestinian peace, which the Administration is attempting to
implement.
Policy Toward Iraq.
Some of
the Gulf states, fearing unintended
consequences, were initially reluctant to support the Administration view that war
with Iraq was necessary. For the most part, Gulf leaders publicly indicated that they
would only support a U.S. attack if such action were authorized by the United
Nations and had broad international support. Two of the Gulf states, Kuwait and
Qatar, were more openly supportive of the U.S. position from the outset, and both
hosted substantial buildups of U.S. forces and equipment that were used in the
offensive against Iraq.
Bahrain publicly supported the war by the time the
Administration made it clear that there would be war, and it and Oman also hosted
significant buildups of U.S. forces. Of the Gulf states, Saudi Arabia was the most
vocally opposed to a U.S. offensive against Iraq, and it and the UAE did not allow
additional U.S. forces to deploy to the Kingdom for military action. However, Saudi
Arabia did agree to host command centers for U.S. air operations in the war, and the
UAE allowed U.S. air support operations from its territory. In advance of the U.S.

CRS-18
military action, all of the Gulf states wanted the United States to assure them that a
stable and more peaceful Iraq would result from any military action, and some Gulf
states remain concerned that Iraq could still fragment.
War on Terrorism. The September 11, 2001, attacks introduced new frictions
in U.S. relations with the Gulf states. The revelation that fifteen of the nineteen
September 11 hijackers were of Saudi origin led to additional strain in U.S.-Saudi
relations, which had already been tense because of the Israeli-Palestinian dispute,
and to speculation that U.S. forces might be asked to leave the Kingdom. There were
also reports that the hijackers had used financial networks based in the UAE in the
September 11 plot. The Saudis reportedly have been offended by U.S. press articles
that equated Saudi human rights practices to those of the Taliban, and that discuss
Saudi funding of religious schools in Pakistan that were linked to the Taliban and Al
Qaeda. There have been reports that some Bush Administration officials, weighing
these and other criticisms of Saudi Arabia, now view the Kingdom as more an
adversary than a friend of the United States.
Publicly, the Bush Administration has responded to the criticisms of the Gulf
states by stressing that all the Gulf states strongly condemned the September 11
attacks, and have responded, to varying degrees, to U.S. requests that they shut down
financial networks used by Al Qaeda and other terrorist groups. Virtually all of the
Gulf states have instituted mechanisms to identify bank accounts of known or
suspected terrorists or Islamic charities allegedly funding terrorist organizations,
although they have been hesitant to freeze such accounts. In November 2002, Saudi
Arabia announced the formation of an oversight authority for Saudi charities to enure
that donations to them do not end up in the hands of terrorist groups; the other Gulf
states have instituted similar mechanisms with varying degrees of authority. At the
same time, the Gulf leaders defend Islamic charities as needed vehicles to help poor
Muslims, and they have challenged some U.S. assertions that these funds are used for
terrorism.
Several of the Gulf states have provided active cooperation by arresting,
facilitating the arrest of, or combating members of alleged terrorist cells on their
territories. In particular, the UAE has provided information that led to a few major
arrests of Al Qaeda operatives, according to several press reports. Saudi Arabia
announced in November 2002 that it had incarcerated more than 100 Saudi nationals
suspected of having ties to Al Qaeda. However, Saudi efforts did not prevent a May
2003 terrorist attack on three compounds housing U.S. and other foreign workers in
the capital, Riyadh. The attack prompted a Saudi crackdown on alleged Al Qaeda
cells but also prompted questions over Saudi vigilance and competence in its pursuit
of Al Qaeda cells in the Kingdom.
Defense Agreements and U.S. Forces in the Gulf. In the aftermath of
the 1991 Gulf war, the Gulf states, with the exception of Saudi Arabia, renewed or
formalized defense agreements with the United States. The agreements 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

CRS-19
operations from Gulf facilities — the United States must obtain permission on a case
by case basis.
The September 11 attacks offered a new opportunity to exercise the
longstanding defense cooperation with the Gulf states. The Gulf states were asked,
and most of them agreed, to host U.S. forces performing combat missions in
Afghanistan in Operation Enduring Freedom (OEF, the war against the Taliban and
Al Qaeda). Saudi Arabia did not offer to allow U.S. pilots to fly missions in
Afghanistan from Saudi Arabia, but it did permit the United States to use the
Combined Air Operations Center at Prince Sultan Air Base, south of Riyadh, to
coordinate U.S. air operations over Afghanistan. Published accounts indicate that the
other Gulf states did allow such missions to fly from their territory, and they allowed
the United States to station additional forces for OEF. Qatar publicly acknowledged
the U.S. use of the large Al Udaid air base in OEF, and Bahrain publicly deployed its
U.S.- supplied frigate naval vessel in support of OEF.
In Operation Iraqi Freedom, the Gulf states continued about the same level of
cooperation as in Operation Enduring Freedom, with some exceptions. As noted
above, Qatar publicly allowed the United States to locate its forward U.S. Central
Command (CENTCOM) headquarters at the Army prepositioning site at Saliyah for
the war with Iraq, and Kuwait hosted virtually the entire U.S. ground invasion force.
The number of U.S. military personnel in the Gulf theater of operations is listed
in Table 3 below. The number of U.S. personnel in the Gulf reflects the buildup for
OEF and Operation Iraqi Freedom. Prior to Enduring Freedom, about 20,000 U.S.
military personnel were in the Gulf at most times. The United States and the Gulf
states are discussing the long-term U.S. force posture in the region, although that
posture, and the rate at which it is achieved, might depend on the success of U.S.
efforts to stabilize Iraq. According to U.S. officials, the U.S. presence, over the long
term, is expected to shift among the Gulf states but might remain, in the aggregate,
close to the pre-2001 personnel level of about 20,000. U.S. forces in Iraq remain
about 145,000 as of mid-July 2003, and Secretary of Defense Rumsfeld said on July
13 that U.S. numbers could conceivably rise depending on the situation inside Iraq.
The following is a brief overview of U.S. operations and presence in each of the six
Gulf states:
! 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.9
During the period of U.S. containment of Iraq, U.S. combat aircraft
based in Saudi Arabia flew patrols of the no fly zone over southern
Iraq (Operation Southern Watch), but Saudi Arabia did not permit
preplanned strikes against Iraqi air defenses, only retaliation in case
of tracking or firing by Iraq. U.S. officials have said that Operation
Southern Watch has ended with the fall of Iraq’s regime and that the
9 For more information on these agreements, see CRS Report 94-78, Saudi Arabia: U.S.
Defense and Security Commitments.
February 3, 1994, by Alfred Prados.

CRS-20
U.S. presence in Saudi Arabia will fall to “several hundred,” mostly
in ongoing training and advisory missions for the Saudi regular army
and National Guard.
! 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,
and the pact remains in effect.
In June 1995, the U.S. Navy
reestablished its long dormant Fifth fleet, responsible for the Persian
Gulf region, and headquartered in Bahrain. 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 provided
the United States access to Omani airbases at Seeb, Thumrait, and
Masirah, and some prepositioning of U.S. Air Force equipment. The
agreement was renewed in 1985, 1990, and 2000. In keeping with
an agreement reached during the 2000 access agreement renewal
negotiations, the United States is funding the $120 million cost to
upgrade another base near al-Musnanah. When completed in late
2003, the base will be able to handle even the largest U.S. aircraft.10
! On September 19, 1991, Kuwait, which sees itself as the most
vulnerable to Iraqi aggression, signed a 10-year pact with the United
States (renewed in 2001 for another 10 years) allowing the United
States to preposition enough equipment to outfit a U.S. brigade.
Joint U.S.-Kuwaiti exercises were held almost constantly, meaning
that about 4,000 U.S. military personnel were in Kuwait at virtually
all times during the 1990s. The United States opened a Joint Task
Force headquarters in Kuwait in December 1998 to better manage
the U.S. forces in Kuwait. The United States has spent about $170
million since 1999 to upgrade the two Kuwaiti air bases that host
U.S. aircraft, Ali al-Salem and Ali al-Jabir, and to upgrade the
headquarters of U.S. Army troops in Kuwait.
The main U.S.
prepositioning site is moving to southern Kuwait, at Arifjan, which
was used in Operation Iraqi Freedom.
Arifjan can hold more
equipment than the current site at Camp Doha.
! Qatar is building an increasingly close defense relationship with the
United States, possibly to ensure that its neighbors do not try to
encroach on its huge natural gas reserves. It signed a defense pact
with the United States on June 23, 1992, and accepted the
prepositioning of enough armor to outfit one U.S. brigade, and the
construction of a facility (As-Saliyah site) that could accommodate
10 Sirak, Michael. USA looks to Expand Bases in Oman and Qatar. Jane’s Defence Weekly,
April 17, 2002.

CRS-21
enough equipment to outfit at least two U.S. brigades. (Most of that
armor had moved from storage in Qatar up to Kuwait by December
2002 for use against Iraq.) The United States has built an air
operations center at Al Udaid that will largely supplant the one in
Saudi Arabia, and CENTCOM used its command headquarters at the
As Saliyah site as its main command post during Operation Iraqi
Freedom. The United States helped Qatar expand Al Udaid air base
at a cost of about $1 billion, and U.S. support aircraft began using
the base during OEF. Over 2,000 U.S. Air Force personnel deployed
to Al Udaid in OEF. On December 11, 2002, visiting Secretary of
Defense Rumsfeld signed an accord with Qatar expanding U.S.
access to Al Udaid and providing for additional upgrades to the base.
! The UAE did not have close defense relations with the United States
prior to the 1991 Gulf war. After that war, the UAE determined that
it wanted a closer relationship with the United States, in part to deter
and balance out Iranian naval power. On July 25, 1994, the UAE
announced it had signed a defense pact with the United States. The
UAE has allowed some U.S. prepositioning, as well as U.S. ship
port visits at its large man-made Jebel Ali port. It also has hosted
U.S. refueling aircraft participating in the southern no fly zone
enforcement operation (al-Dhafra air base). Concerned about a
perceived loss of sovereignty, the UAE also insisted on a
clarification of the defense pact’s provisions on the legal jurisdiction
of U.S. military and other official personnel in the UAE; the issue
was resolved in 1997. Generally wanting to appear within an Arab
consensus on major issues, the UAE did not host additional U.S.
forces in Operation Iraqi Freedom, although it did allow the United
States to conduct air support operations during the war, using
equipment pre-positioned in UAE.

CRS-22
Table 3. U.S. Troops in the Gulf Area/ Host Nation Support
Country
U.S. Forces/Equipment Hosted
Host Nation
U.S. Aid
(June 2003)
Support, 1999
(FY2004
(Millions)
Request)
Saudi Arabia
- About 6,000 personnel and 80
$2.16 direct
$25,000 IMET
aircraft pre-war, will decrease to
$78.29
several hundred mostly advisory and
indirect
no aircraft.
$80.44: Total
- Combined Air Operations Center at
Prince Sultan Air Base.
Kuwait
- About 70,000 mostly Army. Levels
$172.09 direct
to decrease depending on Iraq
$4.90 indirect
operations.
$176.99: Total
- About 40 U.S. aircraft (pre-Sept. 11)
- Armor for one brigade stored (Camp
Doha, Arifjan).
UAE
- About 500, mostly Air Force -
$0.06 direct
insignificant increase from pre-
$14.62
September 11 baseline
indirect
- Port facilities at Jebel Ali; some U.S.
$14.68: Total
refueling aircraft, and drones
Qatar
- About 3,300, well above pre-
$0.00 direct
September 11 baseline of under 100.
$11.00
- KC-10 and KC-135 refueling planes,
indirect
equipment at Al Udaid Air Base, new
$11.00: Total
air command center there.
- Armor for at least one brigade and
CENTCOM forward hq at As-
Saliyah
Oman
- About 3,000, well above pre-
$0.00 direct
$25 million
September 11 baseline of about 200;
$34.91
FMF; $1
decreasing to levels not yet known.
indirect
million IMET;
- Some Air Force equipment, access
$34.91: Total
to air bases: Seeb, Thumrait, Masirah.
Bahrain
- About 4,200, mostly Navy, pre-war;
$1.25 direct
$25 million
decreasing to levels not yet known
$0.15 indirect
FMF; $600,000
- Fifth fleet headquarters
$1.40: Total
IMET
- use of Shaikh Isa air base
Turkey
About 4,000 personnel and 60
N/A
$50 million
aircraft for Northern Watch pre-war;
FMF; $5
now mostly redeployed elsewhere
million IMET;
$200 million
ESF
Afloat in the Gulf
About 13,000 personnel and 70
N/A
aircraft per aircraft carrier task force.
(Pre-Operation Iraqi Freedom; future
deployment uncertain)
Sources: Various press reporting during November 2002 - January 2003
Note: Direct support: financial payments to offset U.S. costs incurred. Indirect: in-kind support such as
provision of fuel, food, housing, basing rights, maintenance, and the like. IMET: International Military
Education and Training funds; ESF: Economic Support Funds; FMF : Foreign Military Financing; NADR:
Nonproliferation, Anti-Terrorism, Demining, and Related Programs.

CRS-23
Figure 1. Facilities Used by U.S. Forces in the Gulf
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 defense services to
the GCC states. Congress has not blocked any U.S. sales to the GCC states since the
1991 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,11 if the Gulf states were to
join a joint Arab military action against Israel. Others are concerned that some U.S.
systems sold to the Gulf contain missile technology that could violate international
11 Towle, Michael. “Senators Say They Now Support F-16 Sale.” Fort Worth Star-
Telegram
. August 25, 1998.

CRS-24
conventions or be re-transferred to countries with which the United States is at odds.
Few experts believe that, absent a major Arab-Israeli war, the Gulf states would seek
conflict with Israel. Even if they were to do so, successive administration have
maintained 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.12 The Foreign Relations Authorization Act of 1994-1995 (P.L. 103-236,
signed April 30, 1994) bars U.S. arms sales to any country that enforces the primary
and secondary Arab League boycott of Israel. 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, including Foreign Military Financing (FMF) and excess defense articles
(EDA). Only Bahrain and Oman, the two GCC states that are not members of the
Organization of Petroleum Exporting Countries (OPEC), receive significant amounts
of U.S. assistance. Saudi Arabia receives a nominal amount of International Military
Education and Training funds (IMET) to lower the costs to the Saudi government of
sending its military officers to U.S. schools. The move is intended to preserve U.S.-
Saudi military-to-military ties over the longer term, amid fears of recent erosion in
those ties.
Excess Defense Articles. Bahrain and Oman are eligible to receive EDA
on a grant basis (Section 516 of the Foreign Assistance Act) and the UAE is eligible
to buy or lease EDA. In 1998-1999, 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 an I- HAWK air defense battery as EDA. Bahrain
is currently seeking a second frigate under this program.
Foreign Military Sales, FMS. Some of the major U.S. arms sales (foreign
military sales, FMS) to the Gulf states, either in progress or under consideration,
include the following.13
! 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 March 2000, the UAE signed 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, subject to a UAE purchase decision,
the Harpoon anti-ship missile system. The total sale value is
estimated at over $8 billion, including a little over $2 billion worth
12 Ratnam, Gopal and Amy Svitak. “U.S. Would Keep Tight Rein on Missile Sold to
Bahrain.” Defense News, September 11, 2000.
13 Information in this section was provided by press reports and the Defense Security
Cooperation Agency (DSCA) in Security Assistance Program Summaries (unclassified) for
each of the Gulf states. July - September 2000.

CRS-25
of weapons, munitions, and services.14
The aircraft are in the
process of being delivered. Congress did not formally object to the
agreement, although some Members initially questioned the
inclusion of the AMRAAM as a first introduction of that weapon
into the Gulf region. The Clinton Administration satisfied that
objection by demonstrating that France had already introduced a
similar system in an arms deal with Qatar. On July 18, 2002, the
Administration notified Congress it would upgrade the UAE’s 30
AH-64 Apache helicopter gunships (bought during 1991-1994) with
the advanced “Longbow” fire control radar. The UAE is evaluating
the Patriot PAC-III theater missile defense system, as well as a
Russian equivalent, to meet its missile defense requirements.
! Saudi Arabia is still absorbing about $14 billion in purchases of U.S.
arms during the Gulf war, as well as post-war buys of 72 U.S.-made
F-15S aircraft (1993, $9 billion value), 315 M1A2 Abrams tanks
(1992, $2.9 billion), 18 Patriot firing units ($4.1 billion) and 12
Apache helicopters. Few major new U.S. sales are on the horizon,
and the Defense Security Cooperation Agency (DSCA) says Saudi
Arabia is not, at this point, considering ordering any more F-15’s.
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-15s. Congress
did not attempt to block the sale.
! In early September 2002, the United States and Kuwait signed a
long-delayed agreement for Kuwait to purchase 16 U.S. Apache
helicopters, equipped with the Longbow fire control system - a deal
valued at about $886 million. 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 had languished for
about two years because of opposition from several members of
Kuwait’s National Assembly, who believed that the
purchase
primarily represented an attempt to curry political favor with the
United States.
According to DSCA, Kuwait is considering
purchasing additional F/A-18 aircraft to complement its existing
fleet of 40 of those aircraft. Kuwait also bought 5 Patriot firing units
in 1992 and 218 M1A2 Abrams tanks in 1993.
! In 1998, Bahrain purchased 10 F-16s from new production at a value
of about $390 million; delivery began in early 2001. In late 1999,
the Administration, with congressional approval, agreed to sell
Bahrain up to 26 AMRAAMs, at a value of up to $69 million, but
delivery has been delayed by the war in Afghanistan, according to
DSCA. Among the more controversial sales to a Gulf state, in
14
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-26
August 2000 Bahrain requested to purchase 30 Army Tactical
Missile Systems (ATACMs), a system of short-range ballistic
missiles fired from a multiple rocket launcher.
The Defense
Department told Congress the version sold to Bahrain would not
violate the rules of the Missile Technology Control Regime
(MTCR),15 an effort to allay congressional concerns that the the sale
would facilitate the spread of ballistic and cruise missiles in the
Gulf.16 In addition, the Administration proposed 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.17 Bahrain accepted that control formula, and delivery will
begin later in 2003.
In March 2002, President Bush issued
Presidential Determination 2002-10 designating Bahrain a “major
non-NATO ally,” a designation that will open Bahrain to a wider
range of U.S. arms that can be sold to it in the future.
! 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 DSCA says that Qatar is expressing
interest in a few U.S. systems including the Patriot (PAC-III), the
M1A2 Abrams tank, a Low Altitude Surveillance System (LASS),
and the Harpoon system. 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 requested to purchase the ATACM to date.
! Oman has traditionally purchased mostly British weaponry,
reflecting British influence in Oman’s military, and the British
military’s mentoring and advisory relationship to Qaboos.
In
October 2001, in an indication of waning British influence, the
United States announced that Oman would
buy 12 F-16 A/B
aircraft, at an estimated value of $1.1 billion. Oman does not appear
to be considering the purchase of any other 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, exposing the force’s deficiencies. After the war, manpower
15 The 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 ATACMs from the United States.
16 Ratnam, Gopal and Amy Svitak. “U.S. Would Keep Tight Rein on Missile Sold to
Bahrain.” Defense News, September 11, 2000.
17 Ibid.

CRS-27
shortages and disagreements over command of the force prevented the GCC states
from agreeing to a post-Gulf war Omani recommendation to boost Peninsula Shield
to 100,000 men. Gulf state suspicions of Syria and Egypt prevented closer military
cooperation with those countries, as envisioned under the March 1991 “Damascus
Declaration.” In September 2000, the GCC states agreed in principle to increase the
size of Peninsula Shield to 22,000.18 The GCC states have announced similar
agreements to expand Peninsula Shield in the past without implementation, and that
no timetable has been set for reaching the targeted level of strength. In a further step,
at their summit in December 2000, the GCC leaders signed a “defense pact” that
presumably would commit them to defend each other in case of attack.
The GCC states have made some incremental progress in linking their early
warning radar and communication systems. In early 2001, the GCC inaugurated its
“Belt of Cooperation” network for joint tracking of aircraft and coordination of air
defense systems, built by Raytheon.
The Belt of Cooperation is expected to
eventually include a link to U.S. systems. The project is part of the United States’
“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.19 The Cooperative Defense Initiative is 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.20
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. 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.21 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 advanced missile defenses.
18 “GCC States Look to Boost ‘Peninsula Shield’ Force to 22,000.” Agence France Press,
September 13, 2000.
19 Press Conference with Secretary of Defense William Cohen. Office of the Assistant
Secretary of Defense (Public Affairs), April 8, 2000.
20 Under 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.
21 Finnegan, Philip. “Politics Hinders Joint Gulf Missile Defense.” Defense News, March
22, 1999.

CRS-28
Prospects and Challenges
U.S. Gulf policy faces numerous uncertainties as the Bush Administration
moves to try to stabilize Iraq and address remaining regional security threats from
Iran and Al Qaeda loyalists. For now, the Gulf states are relieved that the United
States has eliminated the threat from Saddam Hussein and believe that the Gulf
region has become more stable because of the U.S. military action against Iraq. This
assessment will likely cause the Gulf states to remain strong allies of the United
States even though the threat from Saddam Hussein has been removed. However,
the Gulf states are concerned that continuing U.S. casualties in Iraq might cause the
United States to withdraw before Iraq is fully stabilized. Some Gulf countries are
concerned that Iraq’s Shiite majority will emerge as the dominant force in Iraq and
that Shiite political success in Iraq could embolden Shiite communities in the Gulf
states to seek increased political power.
Some Gulf state policymakers worry about the opposite possibility — that the
United States might remain in Iraq militarily for many years, possibly turning Gulf
popular opinion against the United States as a non-Muslim occupying power. Some
U.S. experts cite this factor in arguing that the United States should now pull out of
the Gulf almost entirely.22 On the other hand, the U.S. military presence in the Gulf
states will likely be restructured and reduced, particularly in Saudi Arabia, in a
manner that will likely reduce resentment over that presence among Islamists and
other conservatives in the Gulf.
There are also concerns in the Gulf that the traditional strategic balance between
Iran and Iraq has been altered to Iran’s benefit. Iraq’s military has been largely
destroyed, leaving Iraq unable to provide a strategic counterweight to Iran. In
addition, Iran’s influence inside Iraq, particularly its relations with Iraqi Shiite
Islamist groups, has been enhanced. Some Gulf states fear that Iran might be
tempted, particularly if the United States draws down its presence in Iraq, to
intimidate the Gulf states into ceding a larger Gulf security role to Iran. The potential
for Iran to try to assume a larger role in Gulf security provides an additional rationale
for the Gulf states to maintain their close alliance with the United States.
22 Preble, Christopher. After Victory: Toward a New Military Posture in the Persian Gulf.
Cato Institute, June 10, 2003.

CRS-29
Appendix 1. Gulf State Populations, Religious
Composition
Country
Total
Number of Non-
Religious Composition
Population
Citizens
Iran
66.1 million
607,000
89% Shia; 10% Sunni; 1%
Bahai, Jewish, Christian,
Zoroastrian
Iraq
23.3 million

60-65% Shia; 32-37%
Sunni; 3% Christian or
other
Saudi Arabia
22.7 million
5.3 million
90% Sunni; 10% Shia
Kuwait
2.04 million
1.16 million
45% Sunni; 40% Shia;
15% Christian, Hindu,
other
United Arab
2.4 million
1.58 million
80% Sunni; 16% Shia; 4%
Emirates
Christian, Hindu, other
Bahrain
645,300
228,600
75% Shia; 25% Sunni
Qatar
769,000
516,000
95% Muslim; 5% other
Oman
2.6 million
527,000
75% Ibadhi Muslim; 25%
Sunni and Shia Muslim,
and Hindu
Source: Central Intelligence Agency World Factbook, 2001. Population figures are estimates as of
July 2001. Most, if not all, non-Muslims in GCC countries are foreign expatriates.

CRS-30
Appendix 2. Map of the Persian Gulf Region and Environs