Order Code RL31533
CRS Report for Congress
Received through the CRS Web
The Persian Gulf States:
Issues for U.S. Policy, 2006
Updated January 20, 2006
Kenneth Katzman
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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The Persian Gulf States:
Issues for U.S. Policy, 2006
Summary
The U.S.-led war to overthrow Saddam Hussein has virtually ended Iraq’s
ability to produce weapons of mass destruction (WMD) and to militarily threaten the
region, but it has produced new and un-anticipated security challenges for the Persian
Gulf states (Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, and the United Arab
Emirates). The Gulf states, which are all led by Sunni Muslim regimes, fear that
Shiite Iran is unchecked, now that Iraq is strategically weak. The Gulf states strongly
resent that pro-Iranian Shiite Muslim groups and their Kurdish allies (who are not
Arabs) have obtained preponderant power within Iraq. This has led most of the Gulf
states, particularly Saudi Arabia, to provide only halting support to the fledgling
government in Baghdad.

The new power structure in Iraq has had repercussions throughout the Gulf
region: some Gulf Shiite communities, particularly in Bahrain, have been
emboldened by events in Iraq to seek additional power. Sunni Muslim militants in
Iraq — both Iraqi and non-Iraqi — are reportedly infiltrating the Gulf states to
attempt attacks against Gulf regime and Western interests. Continuing instability in
Iraq also requires the United States to maintain a larger military presence in the Gulf
than would have been required had Iraq stabilized quickly, although some believe the
United States should retain a large Gulf presence to counter the growing power of
Iran.
The concentrated U.S. focus on Gulf security during the 1990s is giving way to
emphasis on broader, non-security issues. Domestically, all of the Gulf states are
undertaking substantial but gradual economic and political liberalization to deflect
popular pressure and satisfy U.S. calls for reform. However, the reforms undertaken
or planned do not aim to fundamentally restructure power in any of these states. The
Bush Administration advocates more rapid and sweeping political and economic
liberalization as key to long-term Gulf stability and to reducing support in the Gulf
states for terrorist groups such as Al Qaeda. The Administration is funding civil
society programs in the Gulf states — funding that is not necessarily welcomed by
the Gulf leaderships — but it is also promoting the bilateral free trade agreements
that most of the Gulf states seek.
The Bush Administration also is working to maintain or improve post-
September 11 cooperation with the Gulf states against Al Qaeda. Some Gulf states
allegedly tolerated the presence of Al Qaeda activists and their funding mechanisms
prior to the September 11 attacks. Fifteen of the nineteen September 11 hijackers
were of Saudi origin, as is Al Qaeda founder Osama bin Laden.
This report will be updated as warranted by regional developments. See also
CRS Issue Brief IB93113, Saudi Arabia: Current Issues and U.S. Relations; CRS
Report RS21513, Kuwait: Post-Saddam Issues and U.S. Policy; CRS Report
RS21852, The United Arab Emirates: Issues for U.S. Policy; CRS Report RL31718,
Qatar: Background and U.S. Relations; CRS Report 95-1013 F, Bahrain: Key Issues
for U.S. Policy; and CRS Report RS21534, Oman: Reform, Security, and U.S. Policy.

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Contents
Threat Perceptions and U.S.-Gulf Security Cooperation . . . . . . . . . . . . . . . . . . . . 1
The “Dual Containment” Approach of the 1990s . . . . . . . . . . . . . . . . . . . . . 3
The Post-Saddam Gulf Threat Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Iran and Shiites Strategically Strengthened . . . . . . . . . . . . . . . . . . . . . . 4
Spillover From Iraq Battlefield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Post-Saddam U.S.-Gulf Defense Cooperation . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S. Arms Sales and Security Assistance . . . . . . . . . . . . . . . . . . . . . . 10
Excess Defense Articles (EDA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Foreign Military Sales (FMS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Other Gulf State Security Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Potential Cooperation With NATO . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Domestic Stability and Political Liberalization . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Leadership Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Political Liberalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Continued Human Rights Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
U.S. Democratization Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Economic Importance and Liberalization . . . . . . . . . . . . . . . . . . . . . . . . . . 24
U.S.-Gulf Free Trade Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Other Foreign Policy and Counter-Terrorism Cooperation . . . . . . . . . . . . . . . . . 26
Arab-Israeli Peace Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Counter-Al Qaeda Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Appendix 1. Gulf State Populations, Religious Composition . . . . . . . . . . . . . . 31
Appendix 2. Map of the Persian Gulf Region . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
List of Figures
Figure 1. Facilities Used by U.S. Forces in the Gulf . . . . . . . . . . . . . . . . . . . . . 10
Figure 2. Map of the Persian Gulf Region and Environs . . . . . . . . . . . . . . . . . 32
List of Tables
Table 1. Gulf Hosting of U.S. Troops and Equipment (2005) . . . . . . . . . . . . . . . 9
Table 2. U.S. Assistance to the Gulf States . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 3. Comparative Military Strengths of the Gulf States, Iraq, and
Iran (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Table 4. GCC State Oil Production/Exports (2005) . . . . . . . . . . . . . . . . . . . . . 25
Table 5. Gulf State Populations, Religious Composition . . . . . . . . . . . . . . . . . . 31

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The Persian Gulf States:
Issues for U.S. Policy, 2006
The Persian Gulf region is rich in oil and gas resources but has a history of
armed conflict and of presenting major threats to U.S. national security. The Gulf
states — Saudi Arabia, Kuwait, the UAE, Qatar, Bahrain, and Oman, bound together
in a 1981 alliance called the Gulf Cooperation Council (GCC) — have experienced
three major wars in the past two decades: the Iran-Iraq war (1980-88), the Persian
Gulf war (1991), and Operation Iraqi Freedom (2003 - current). This report, which
will be revised periodically, discusses U.S. and Gulf efforts to manage the new
challenges posed by the September 11, 2001 attacks on the United States and the
aftermath of the overthrow of Saddam Hussein. 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.
Threat Perceptions and
U.S.-Gulf Security Cooperation
Prior to the 2003 war against Iraq, the United States was repeatedly drawn into
conflicts in the Gulf to counter Iranian or Iraqi aggression and contain regional
escalation. Iran and Saddam Hussein’s Iraq fought each other during 1980-1988,
jeopardizing the security of the Gulf monarchy states, which collectively backed Iraq.
Similarly, the United States tilted toward Iraq in that war to defeat the radical Islamist
threat posed by Iran’s Islamic revolutionary government, which came to power in
February 1979 after ousting the U.S.-backed Shah. Iran and the United States fought
minor naval skirmishes during 1987-88, at the height of the Iran-Iraq war. 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.1
The Iran-Iraq war ceased in August 1988 when Iran’s forces collapsed from a series
of successful Iraqi offensives and Iran accepted U.N. Security Council Resolution
598, amounting to an Iraqi victory in the war.
The Iran-Iraq war victory emboldened Saddam Hussein to assert himself as the
“strongman” of the Gulf. He invaded and occupied Kuwait on August 2, 1990,
although asserting that he did so because Kuwait (and UAE) were overproducing oil
1 In May 1987, Iraq hit the U.S.S. Stark with French-supplied Exocet missiles, presumed by
most to be a mistake, killing 37 U.S. Navy personnel.

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CRS-2
and thereby betraying Iraq (by lowering world oil prices). To liberate Kuwait, 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 1991 Gulf war reduced Iraq’s
conventional military capabilities roughly by half, but, prior to Operation Iraqi
Freedom (March 2003), Iraq was still superior to Iran and the Gulf states in ground
forces.
The Gulf is one of the few theaters where weapons of mass destruction (WMD)
and ballistic missiles have been used in hostilities. Iraq’s missile, chemical, nuclear,
and biological programs, accelerated 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 Iran-Iraq war, Iraq fired enhanced Scud
missiles at Iranian cities,2 and Iran fired its own Scud missiles at Iraqi cities as well
in the so-called “war of the cities.” On ten occasions during the Iran-Iraq war, Iraq
used chemical weapons against Iranian troops and Kurdish guerrillas and civilians,
killing over 26,000 Iranians and Kurds.3 A U.N. investigation found that Iran also
used some chemical weapons against Iraq during the war, although Iran’s capability
was less advanced than that of Iraq during that period. During the 1991 Gulf war,
Iraq fired 39 enhanced Scud missiles at Israel, a U.S. ally, and about 40 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. U.N. weapons inspectors
dismantled much of 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 Iraq’s regime would not fully cooperate and decided to overthrow
the regime by force (Operation Iraqi Freedom, OIF).
2 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.
3 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
1987), and Sumar/Mehran (October 1987).

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CRS-3
The “Dual Containment” Approach of the 1990s
During 1993-1997, the Clinton Administration articulated a policy of “dual
containment,” an effort to keep both Iran and Iraq weak rather than alternately tilting
toward one or the other to preserve a power balance between them. During this
period, Saudi Arabia and Kuwait were primarily concerned about the conventional
threat from Iraq and saw Iran as a counterweight to Iraqi power. The states of the
lower Gulf were further from Iraq and tended to view Iran as a greater danger than
Iraq. Bahrain, in 1981 and again in 1996 — the latter a period of substantial Shiite-
inspired unrest — openly accused Iran of plotting to destabilize that country by
supporting radical Shiite movements there. In 1992, the UAE became alarmed at
Iranian intentions when Iran asserted complete control of the largely uninhabited
Persian Gulf island of Abu Musa, which Iran and UAE shared under a 1971 bilateral
agreement. All the Gulf states improved relations with Iran significantly during the
decade, particularly after the May 1997 election of the relatively moderate president
Mohammad Khatemi, who curtailed Iran’s support for Shiite dissident movements
in the Gulf states.
Despite the rapprochement between the Gulf and Khatemi’s regime, which was
matched by unsuccessful attempts by the Clinton Administration to open direct talks
with Khatemi’s government, the United States continued to try to constrain Iran’s
WMD programs, but with mixed success. Unlike Iraq, which was the target of U.N.
sanctions after it invaded Kuwait, Iran faces no mandatory international restrictions
on its imports of advanced conventional weapons and it has been slowly rearming
since 1990. Some of Iran’s WMD programs made significant strides during the
1990s, reportedly with substantial help from Russia, China, North Korea, and other
countries and entities, such as the network of Pakistani nuclear scientist A.Q. Khan.
The dual containment policy also had little success in curbing Iran’s (or Iraq’s)
support for international terrorism. Iran has been on the U.S. list of terrorism state
sponsors (“terrorism list”) since 1984 (the list was created in 1979). Iraq was on the
terrorism list during 1979-1982, and again from 1990 until the U.S.-led overthrow
of Saddam Hussein. Over the past decade the State Department’s annual report on
terrorism has described Iran as “the most active state sponsor of terrorism. The
Islamic regime in Iran had held American diplomats hostage during November 1979-
January 1981, a seizure for which Iran has not apologized. The pro-Iranian Lebanese
Shiite Muslim organization Hizballah held Americans hostage in Lebanon during the
1980s. Some 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, although some
indications from the “September 11 Commission” final report (p.60) says Al Qaeda
operatives might have had some role in that bombing. Iran also has provided
material support to the following groups that oppose the U.S.-sponsored Arab-Israeli
peace process: Hizballah and the Palestinian groups Hamas, Palestinian Islamic
Jihad, and the Popular Front for the Liberation of Palestine - General Command.

Iraq’s former regime was on the terrorism list and publicly supported
Palestinian violence against Israel. According to the September 11 Commission
report, neither Iran nor Saddam’s Iraq was linked to the September 11 attacks and
neither had an “operational” relationship with Al Qaeda. However, press accounts

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CRS-4
say that some Al Qaeda activists fleeing Afghanistan transited or took refuge in both
countries, and there apparently were some limited contacts between Al Qaeda and the
Saddam Hussein regime. The new government in Iraq, which consists of political
leaders who are generally well disposed toward the United States, was removed from
the terrorism list on September 24, 2004. No observer is predicting that Iran will
soon be removed from the U.S. list of state sponsors of terrorism (“terrorism list”).
The Post-Saddam Gulf Threat Profile4
The Gulf threat profile has been altered — but not necessarily reduced — by
the overthrow of Saddam Hussein’s regime in Iraq. The fall of Saddam had initially
generated a sense of relief among the Gulf states because OIF removed Iraq as a
conventional threat and ended Iraq’s WMD programs. The Gulf states now sense
new threats as stability has eluded Iraq, although it should be noted that most experts
do not see any near term or imminent security crises either from outside or
domestically in the Gulf states. Others note that, in the past, Gulf crises have erupted
on short notice, such as Saddam Hussein’s invasion of Kuwait, which was not widely
predicted beforehand.
Iran and Shiites Strategically Strengthened. First and foremost, the
Gulf states believe that the strategic weakness of post-Saddam Iraq has emboldened
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 has a long coastline and a well-honed sense
of nationhood - it was not created by colonial powers — and believes it is entitled to
a major role in Gulf security. All of the Gulf state fears about Iran have been
compounded by the June 2005 election of hardliner Mahmoud Ahmadinejad as Iran’s
president. He has appointed to key positions longtime associates from his career in
the Revolutionary Guard and Basij militia — both bastions of hardline sentiment and
armed force and which have sponsored radical activity in the Gulf in the past.
Further progress on Iran’s WMD programs, particularly its nuclear program, could
embolden Iran to try to intimidate the Gulf states. Qatar, for example, is wary that
Iran might try to encroach on its giant natural gas North Field, which the two share.
In response, the Gulf states believe that the United States must remain in the Gulf
militarily to provide a check on Iranian ambitions. They would likely back U.S.
action, including military action, to halt or set back Iran’s nuclear program.
However, the Gulf states fear Iranian retaliation against them for any U.S. military
move against Iran, and they strongly prefer that there be a diplomatic solution to
Iran’s nuclear ambitions.
Compounding the threat perception of the Gulf states is the rise of Shiite
Islamist factions in post-Saddam Iraq — particularly revered clerical leader Grand
Ayatollah Ali al-Sistani and his allies, the Supreme Council of the Islamic
Revolution in Iraq (SCIRI), and the Da’wa (Islamic Call) Party. These groupings
have dominated Iraq’s two elections for a parliament - in January and again in
December 2005. There continue to be anecdotal reports from observers and experts
4 For further information on developments in and U.S. policy toward Iraq, see CRS Report
RL31339, Iraq: U.S. Regime Change Efforts and Post-Saddam Governance; and CRS
Report RL32048, Iran: Current Developments and U.S. Policy, both by Kenneth Katzman.

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CRS-5
that the Gulf states tried to assist Sunni or non-sectarian parties in the December
2005 election, groups such as that of former prime minister Iyad al-Allawi, who is
a Shiite Muslim but is considered secular and non-sectarian. His Iraq National
Accord party enjoyed Saudi support when it was an anti-Saddam party the early
1990s, and the Saudis, as well as many U.S. officials, view Allawi as a leader who
could potentially stabilize Iraq. Resenting Shiite domination in Iraq, Saudi Arabia
has disbursed little of its $1 billion in aid pledges to Iraq, and it has not committed
to appointing an ambassador to Iraq.
The Gulf leaders fear that the rise of Iraqi Shiite parties are prompting growing
Shiite demands for power in the Gulf states themselves. As shown in the Appendix,
several of the Gulf states have substantial Shiite populations - in Bahrain they are a
majority (about 60%), but most Gulf Shiite communities consider themselves under-
represented in government and lacking key opportunities in the economy. Bahrain
fears Ahmadinejad will revive earlier Iranian efforts to support radical anti-
government factions in Bahrain. Kuwait’s concerns are also high even though
Shiites (about 25% of Kuwaitis) are well integrated into the political system. Radical
factions of an Iraqi Shiite Islamic party, the Da’wa Party, attacked the U.S. and
French embassies in Kuwait City in December 1983, and attacked the Amir’s
motorcade in May 1985, injuring him slightly. Although Kuwaiti fears of a
resumption of such activity have faded, Kuwait remains wary of potential Shiite
militance and has engaged Iraq’s Shiite clerics and provided about $500 million in
humanitarian aid to Iraq through a Kuwait based Humanitarian Operations Center.
Kuwait has pledged to send an ambassador to Baghdad, although no ambassador has
been named, to date. In Saudi Arabia, there is acute fear of potential Shiite unrest,
in part because Shiites are concentrated in the eastern provinces where many of Saudi
Arabia’s oil fields are located and in which much of its oil export infrastructure is
based.
Spillover From Iraq Battlefield. Prior to the U.S. intervention in Iraq, the
Gulf states had feared unintended consequences of ousting Saddam, and several were
reluctant to support it. 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, and both hosted substantial
buildups of U.S. forces and equipment that were used in the offensive against Iraq.
Kuwait, which strongly wanted to see the former invader, Saddam Hussein,
overthrown, hosted the bulk of the personnel and equipment used in the ground
assault. 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, but it did quietly host a command center for U.S. air
operations in the war and some U.S. special operations forces staging missions from
there into Iraq.5 The UAE allowed U.S. air support operations from its territory as
well. For Saudi Arabia, the prospect of the overthrow of Saddam Hussein held out
the possibility that the 6,000 U.S. personnel that were based there in anti-Iraq
5 Solomon, John. “Saudis Had Wider Role in War.” Philadelphia Inquirer, April 26, 2004.

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CRS-6
containment operations would be able to depart. That redeployment happened after
Saddam’s fall.
Judging from the final statement of the 26th Gulf Cooperation Council summit
in Abu Dhabi, UAE (December 2005), the Gulf leaders are also increasingly
concerned about spillover from the Iraq war. Some Sunni Islamist insurgents have
tried or succeeded in entering some of the Gulf states, particularly Kuwait, to
commit acts of retribution against the Gulf governments or to try to attack U.S.
forces staging for deployment into Iraq. The Sunni militants perceive the Gulf
governments — even though they are Sunni-led — as traitors for having backed or
acquiesced in the U.S. invasion of Iraq and ouster of Saddam Hussein. The Gulf
states believe that parts of Iraq might become a safe haven for Sunni Islamic militants
if the United States were to withdraw militarily from Iraq, an outcome that the Gulf
states fear could result if U.S. casualties continue to mount. This issue is discussed
in greater depth in the final section of this paper.
At the same time, efforts by the Gulf states to promote ethnic and sectarian
balance in Iraq might be increasing the potential for spillover from Iraq. Saudi
Arabia, and possibly other Gulf states, are said to be tacitly permitting Saudi fighters
and weapons to enter Iraq to assist the Sunni insurgency there. U.S. military officers
say that Saudi fighters accounted for about half of the foreign insurgents killed in Iraq
in 2005.6 In November 2004, 26 radical Saudi clerics issued a pronouncement
calling on Iraqis to fight U.S.-led forces in Iraq, although the Saudi religious
establishment subsequently contradicted that pronouncement. At the same time,
Saudi Arabia is pursuing diplomacy to increase the role of Sunni Arabs in Iraq’s
government, an outcome that both the Saudis and U.S. officials believe would
stabilize Iraq. Press reports say the Saudis were influential in persuading hardline
Iraqi Sunni clerics to attend a November 2005 Arab League-sponsored reconciliation
meeting in Cairo.
Post-Saddam U.S.-Gulf Defense Cooperation
Because the post-Saddam Gulf is somewhat less stable than the United States
initially expected, the pillars of U.S.-Gulf defense cooperation that were put in place
after the 1991 Gulf war are still operating, although with some alterations. These
relationships have enabled the United States to continue to operate militarily in Iraq,
as well as in Afghanistan, although Afghanistan requires far less military activity
than does Iraq. After the September 11, 2001 attacks, the Gulf states willingly and
openly hosted U.S. forces performing combat missions in Afghanistan in Operation
Enduring Freedom (OEF, the war against the Taliban and Al Qaeda). The Gulf
regimes supported U.S. action against Al Qaeda and the Taliban in Afghanistan
despite some sentiment in the Gulf region, and the broader Arab world, that saw the
conflict as a U.S. war against Islam. For OEF, Saudi Arabia did not offer to allow
U.S. pilots to fly missions in Afghanistan from Saudi Arabia, but it did openly 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
6 Meyer, Josh. U.S. Faults Saudi Efforts on Terrorism. Los Angeles Times, January 15,
2006.

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CRS-7
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.
The cornerstones of U.S.-Gulf defense relations are broad bilateral defense pacts
between the United States and each Gulf state except Saudi Arabia. The agreements,
largely adopted after the 1990-91 Gulf crisis, 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 pre-positioning; and arms sales. The pacts do not include
security guarantees that 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, say officials, 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. None of the Gulf states has moved to suspend
or end these formal pacts now that Saddam Hussein is gone from power.
The approximate number of U.S. military personnel in the Gulf theater of
operations is listed in Table 1 below, based on unclassified tables provided to CRS
by the Department of Defense in 2005. During the U.S.-led containment operations
against Iraq during the 1990s, there were about 20,000 U.S. military personnel
stationed in the Gulf at most times, although about 60% of those were afloat on ships.
Although there are fewer U.S. forces in most of the Gulf states than there were at the
height of OEF and OIF, the aggregate is still higher than the 20,000 “baseline” during
the 1990s — almost entirely due to the large numbers of U.S. personnel still in
Kuwait supporting OIF. U.S. forces in Iraq itself number about 150,000. The
following is a brief overview of U.S. operations and presence in each of the six Gulf
states:
! Saudi Arabia, concerned about internal opposition to a U.S.
presence, did not sign a formal defense pact with the United States.
However, it has entered into several limited defense procurement
and training agreements (for both the regular military and the Saudi
Arabia National Guard, SANG) with the United States.7 During
1992-2003, U.S. combat aircraft based in Saudi Arabia flew patrols
to enforce a “no fly zone” over southern Iraq (Operation Southern
Watch, OSW), but Saudi Arabia did not permit preplanned strikes
against Iraqi air defenses, only retaliatory strikes for tracking or
firing by Iraq. OSW ended after the fall of Saddam Hussein and
most of the 6,000 Saudi-based U.S. personnel, along with all Saudi-
based U.S. combat aircraft, were withdrawn in September 2003.
! 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
7 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.

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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.
! After Iran’s 1979 revolution, Oman on April 21, 1980 signed a
facilities access agreement providing the United States access to
Omani airbases and allowing 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 provided the $120
million cost to upgrade the air base near al-Musnanah (Khasab).8
! On September 19, 1991, Kuwait, which saw 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 two U.S. brigades.
Joint U.S.-Kuwaiti exercises were held almost constantly, and 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, and the United States spent about $170 million in
1999-2001 to upgrade two Kuwaiti air bases (Ali al-Salem and Ali
al-Jabir) that hosted U.S. aircraft during the 1990s containment
operations against Iraq.
! Even before OEF and OIF, Qatar was building an increasingly close
defense relationship with the United States. It signed a defense pact
with the United States on June 23, 1992, and accepted the
prepositioning of enough armor to outfit two U.S. brigades at a site
called As Saliyah site, which was upgraded with U.S. help. (Most
of the armor at the site was used in OIF.)9 The United States built
an air operations center (Combined Air Operations Center, CAOC)
at Al Udeid air base that, by 2003, had largely supplanted the one in
Saudi Arabia and continues to support OEF and OIF. Since 2002,
CENTCOM has operated a regional command headquarters facilities
in the As Saliyah site.
! 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 Iran. On July 25, 1994, the UAE announced it had
signed a defense pact with the United States, although there are still
some differences in interpretation of the legal jurisdiction of U.S.
military personnel in the UAE. The UAE allows some U.S. pre-
8 Sirak, Michael. USA looks to Expand Bases in Oman and Qatar. Jane’s Defence Weekly,
April 17, 2002.
9 U.S. briefing for congressional staff in Qatar, January 2003.

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CRS-9
positioning, as well as U.S. ship port visits at its large man-made
Jebel Ali port, and it hosts U.S. refueling aircraft at Al-Dhafra air
base for OEF and OIF. However, wanting to act within an Arab
consensus, the UAE limited the United States to conducting support
air operations during the major combat phase of OIF.
Table 1. Gulf Hosting of U.S. Troops and Equipment (2005)
Country
U.S. Forces/Facilities Access
Saudi Arabia
! About 400 U.S. military personnel, mostly to train Saudi
military and national guard
Kuwait
! About 90,000 mostly Army, supporting OIF
! - Ali al-Salem air base: hosts U.S. 386th Air Expeditionary
Group supporting OIF
! Camp Arifjan: main facility for US forces supporting OIF
! Camp Buehring: firing range for U.S. training prior to OIF
deployment
! Camp Doha: was main facility for U.S., but was vacated in
Dec. 05
UAE
! About 1,800 mostly Air Force supporting OIF and OEF
! - Al Dhafra air base: 380th Air Expeditionary Group, KC-10,
KC-135 refueling aircraft and surveillance craft
! Jebel Ali: port facilities for U.S. ships resupplying Al Dhafra
Qatar
! About 6,000 mostly Air Force supporting OEF and OIF
! Al Udeid airbase: U.S. F-16’s, KC-10 and KC-135 refueling
planes, surveillance aircraft, and CAOC. Qatar spending $400
million to upgrade CAOC to regional air operations center.
! As Saliyah: CENTCOM forward hq (since 2003); hq for
special operations component of CENTCOM (Socent); pre-
positioned U.S. Army materiel
! Millenium Village: being built to house U.S. personnel
Oman
! About 25 mostly Air Force
! equipment, U.S. Air Force access to Seeb, Thumrait,
Masirah, Khasab air bases mostly for contingencies

Bahrain
! About 4,700, mostly Navy supporting OIF and OEF
! Manama: large portside site for U.S. Fifth fleet headquarters
and naval (Navcent) and Marine (Marcent) components of
CENTCOM. These commands direct U.S. and allied anti-Al
Qaeda, anti-drug, anti-proliferation naval operations and Iraq
oil terminal defense
! Mina al-Sulman port: docking for small U.S. warships, is
being improved to handle carriers
! Shaikh Isa air base: mainly for contingencies and pre-
positioned U.S. equipment
! Muharraq Airfield for U.S. Navy reconnaissance aircraft
Sources: Factsheets provided to CRS by the Department of Defense in 2005; Overseas Basing Commission
(May 2005). U.S. force figures per country from early 2005.

---

CRS-10
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 states has been to sell them arms and related defense
services. 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, if the Gulf states were to
join a joint Arab military action against Israel, but few experts believe that the Gulf
states would seek conflict with Israel. Others are concerned that some U.S. systems
sold to the Gulf contain missile technology that could violate international
conventions or be re-transferred to countries with which the United States is at odds.

---

CRS-11
Even if they were to do so, successive U.S. administrations 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 or any other U.S.
ally.10 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 provision has been waived for 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 the 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) — $25,000 in FY2003, FY2004 and
FY2005 — to lower the costs to the Saudi government of sending its military officers
to U.S. schools (approximately a 50% discount). The move is intended in part to
preserve U.S.-Saudi military-to-military ties over the longer term, amid fears of
recent erosion in those ties due to some U.S. - Saudi frictions following the
September 11, 2001 attacks. Saudi Arabia now sends about 400 military personnel
to study at U.S. military schools, a figure far lower than the 2,100 students sent in
FY2001. A provision of the FY2005 foreign aid appropriations (in Consolidated
Appropriations law, P.L. 108-447) cuts IMET for Saudi Arabia but President Bush
waived that restriction on September 26, 2005 to provide the aid (PD2005-38).
Table 2. U.S. Assistance to the Gulf States

Gulf State
Aid Category
FY2005
FY2006 (est.)
Saudi Arabia
IMET
$25,000
$25,000
Oman
FMF
$19.84 million
$20 million
IMET
$1.1 million
$1.1 million
NADR
$400,000
$500,000
Bahrain
FMF
$18.85 million
$19 million
IMET
$650,000
$650,000
Note: The other Gulf states receive no aid. IMET: International Military Education and Training funds; ESF:
Economic Support Funds; FMF : Foreign Military Financing; NADR: Nonproliferation, Anti-Terrorism,
Demining, and Related Programs.
10 Ratnam, Gopal and Amy Svitak. “U.S. Would Keep Tight Rein on Missile Sold to
Bahrain.” Defense News, September 11, 2000.

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CRS-12
Excess Defense Articles (EDA). Of the Gulf states, only the two least
financially capable, Bahrain and Oman, are eligible to receive EDA on a grant basis
(Section 516 of the Foreign Assistance Act). EDA are U.S. military items declared
to be surplus or out of service for U.S. uses, but are still considered usable either as-is
or with refurbishment. 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 recent U.S. arms sales
(foreign military sales, FMS) to the Gulf states, or sales under consideration, are
discussed below.11 However, as noted, some Gulf states might be seeking arms from
non-U.S. sources, possible to diversify their defense relationships or perhaps to gain
leverage over potential suppliers or allies of Iran.
! The UAE historically has purchased its major combat systems from
France, but UAE officials apparently have come 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, including weapons and services, is estimated at over
$8 billion.12 Deliveries began in May 2005. Congress did not
formally object to the agreement, although some Members
questioned the AMRAAM sale as a first introduction of that
weapon into the Gulf. The Clinton Administration satisfied that
objection when it showed that France had introduced a similar
system in a sale to Qatar. On November 17, 2004, DSCA notified
Congress of a potential sale to UAE of 100 JAVELIN anti-tank
missile launchers (plus 1,000 JAVELIN missile rounds) at a
potential cost of $135 million. The UAE is also considering buying
an anti-ballistic missile system, according to UAE Air Force
Commander Maj. Gen. Khalid Al Bu-Ainain in November 2005.
! Saudi Arabia, buoyed by high oil prices, has now absorbed 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
11 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. March-May 2004.
12 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-13
firing units ($4.1 billion) and 12 Apache helicopters. It reportedly
is now considering major new purchases, including a new generation
fighter aircraft to replace aging U.S.-made F-5’s and British-made
Tornadoes. A Wall Street Journal Europe report on December 22,
2005 said Saudi Arabia had signed an agreement to buy up to 48
Eurofighter Typhoon jets. In three notifications on October 3, 2005
DSCA told Congress that Saudi Arabia intends to buy up to $2
billion in U.S.-made armored personnel carriers (144) and related
equipment and services; equipment support; and communications
upgrades for the military and National Guard (SANG).
! In 2005, Kuwait began taking delivery of a long-delayed purchase of
16 U.S.-made AH-64 “Apache” helicopters, equipped with the
Longbow fire control system - a deal valued at about $940 million.
According to DSCA, Kuwait is considering purchasing an additional
10 F/A-18 aircraft to complement its existing fleet of 40 of those
aircraft, but there has been no movement on this recently. Kuwait
also bought 5 Patriot firing units in 1992 and 218 M1A2 Abrams
tanks in 1993. On April 1, 2004, the Bush Administration
designated Kuwait as a “major non-NATO ally” (MNNA), a
designation that will facilitate the future U.S. sales of arms to
Kuwait.
! In 1998, Bahrain purchased 10 F-16s from new production at a value
of about $390 million. In late 1999, the Administration, with
congressional approval, agreed to sell Bahrain up to 26 AMRAAMs,
at a value of up to $69 million. Among the more controversial sales
to a Gulf state, in 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),13 an effort to allay congressional concerns that the the sale
would facilitate the spread of ballistic and cruise missiles in the
Gulf.14 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.15 Bahrain accepted that control formula, and delivery began
in October 2002. President Bush designated Bahrain an MNNA in
March 2002.
13 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.
14 Ratnam, Gopal and Amy Svitak. “U.S. Would Keep Tight Rein on Missile Sold to
Bahrain.” Defense News, September 11, 2000.
15 Ibid.

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CRS-14
! Qatar has traditionally been armed by France and Britain, and no
major U.S. sales seem imminent, despite Qatar’s healthy economy
that benefits from burgeoning sales of natural gas. DSCA says that
Qatar has expressed interest in a few U.S. systems, including the
ATACM, which Bahrain has bought and which the United States has
told Qatar it is eligible to buy. Qatar is also expressing active
interest in the Patriot (PAC III) missile defense system, according to
DSCA. Qatar might be seeking to buy advanced combat aircraft if
it finds a buyer for the 12 Mirage 2000’s it put up for sale in 2002;
a possible sale to India collapsed in August 2005 over pricing
issues.16
! Oman has traditionally purchased mostly British weaponry,
reflecting British influence in Oman’s military, and the British
military’s mentoring and advisory relationship to Sultan 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 $825 million. The first deliveries
began in December 2005. In April 2003, Oman decided to purchase
a podded airborne reconnaissance system for the F-16’s; a sale
valued at $46 million. 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 along its coast.
16 Raghuvanshi, Vivek. “Low Bid Scuttles Deal,” Defense News, August 1, 2005.

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CRS-15
Table 3. Comparative Military Strengths of the
Gulf States, Iraq, and Iran (2005)
Defense
Patriot
Military
Surface-Air
Combat
Surface
Budget
Country
Tanks
Firing
Personnel
Missiles
Aircraft
Ships
(billion
Units
dollars)
199,500 (incl.
900
294
Saudi
75,000 Saudi
16 I-Hawk
20
(incl. 315 M-
(incl. 174 F-
34
21.3
Arabia
National
batteries
PAC-2
1A2 Abrams)
15)
Guard)
545
3 I-Hawk
UAE
50,500
(incl. 390
106
18
0
2.65
batteries
Leclerc)
40
Oman
41,700
154
50
13
0
3.0
Rapier
368
50
84 batteries
5
Kuwait
15,500
(incl. 218 M-
(incl. 40 FA-
40
4.3
(incl. I-Hawk)
PAC-2
1A2 Abrams)
18)
75 SAM’s
30
Qatar
12,400
(incl. 12
18
27
0
2.2
AMX-30
Stinger)
34
180
8 I-Hawk
11 (incl. 1
Bahrain
11,200
(incl. 22 F-
0
.526
M-60
batteries
frigate)
16)
Total
330,800
2,177
236
542
143
25
33.98
GCC
105,000
77 T-72
mostly for
Iraq
other donated
?
negl.
neg l.
0
?
counter-
armor
insurgency
260
(incl. 10
76 batteries
Hudong, 40
(incl. I-Hawk)
Iran
540,600
1,693
280
Boghammer, 3
—
4.4
plus some
frigates) Also
Stinger
has 3 Kilo
subs
Source: International Institute for Strategic Studies, The Military Balance 2005-2006. (Note: Figures shown
here include materiel believed to be in storage); various press reports.
Iraqi aircraft figures include aircraft flown from Iraq to Iran during 1991 Gulf war. Patriot firing unit figures do
not include U.S.-owned 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.

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CRS-16
Other Gulf State Security Initiatives
The United States has continued to encourage the Gulf states to increase
military cooperation among themselves, building on their small (approximately
10,000 personnel) Saudi-based multilateral force known as Peninsula Shield, formed
in 1981. However, U.S. emphasis on building intra-GCC cooperation has waned
somewhat after the fall of Saddam Hussein and the corresponding high level of U.S.
military attention to Iraq. Peninsula Shield, based at Hafar al-Batin in northern Saudi
Arabia, did not react militarily to the Iraqi invasion of Kuwait, exposing the force’s
deficiencies. After that war, manpower shortages and disagreements over command
of the force prevented the GCC states from agreeing to an Omani recommendation
to boost Peninsula Shield to 100,000 men. In September 2000, the GCC states
agreed in principle to increase the size of Peninsula Shield to 22,000,17 but no
timetable was set for reaching that level. Suggesting that the Gulf states no longer
see a major land invasion threat now that Saddam Hussein is gone, at the December
2005 GCC summit, the Gulf leaders “endorsed” a Saudi proposal to disperse donated
Peninsula Shield forces back to their home countries.18 These forces would remain
available for deployment to the Peninsula Shield force in a crisis. Instead, the Gulf
states reportedly are planning to focus on naval and air cooperation against threats
from Iran or any other power. As shown in Table 3, the Gulf states could potentially
have superiority in equipment over Iran were they to combine their operations in
response to a threat, and the Gulf states’ military technology purchased from the
United States and Europe is likely superior to Iran’s mostly Russian and Chinese-
supplied arsenal.
Adapting to the changing nature of the threats facing the Gulf, the Gulf 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 was 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, launched in the mid-1990s, is
a scaled-back version of an earlier U.S. idea to develop and deploy a GCC-wide
theater missile defense (TMD) system. That idea envisioned a 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 and differing perceptions
17 “GCC States Look to Boost ‘Peninsula Shield’ Force to 22,000.” Agence France Press,
September 13, 2000.
18 Khawaji, Riad. GCC Leaders to Disband Peninsula Shield. Defense News, January 2,
2006.
19 Press Conference with Secretary of Defense William Cohen. Office of the Assistant
Secretary of Defense (Public Affairs), April 8, 2000.

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CRS-17
among the Gulf states of the threat environment.20 As noted in the table above,
Kuwait and Saudi Arabia have Patriot anti-missile units of their own; the other four
GCC states have no advanced missile defenses.

Another joint security cooperation idea never extended beyond the concept
stage. Gulf state suspicions of Syria and Egypt prevented closer military cooperation
with those countries, as envisioned under a March 1991 “Damascus Declaration.”
Under the Damascus Declaration plan, Egyptian and Syrian forces would have been
stationed in the Gulf to bolster the Peninsula Shield force.
Potential Cooperation With NATO. There are some indications that the
Gulf states might be diversifying their security cooperation relationships with
Western powers, while emphasizing such security-related issues as preventing drug
trafficking, human trafficking, and proliferation. NATO is increasingly engaged in
activities outside its traditional European base, and the NATO summit in Istanbul in
2004 launched an “Istanbul Cooperation Initiative” for greater NATO-Gulf state
cooperation on some of these issues. To date, Kuwait, Bahrain, Qatar, and the UAE
have joined the Istanbul initiative, but the absence of Saudi and Omani participation
could slow development of this concept. Some NATO experts want to see the
Istanbul initiative be further developed to allow for cooperation similar to that
provided for in NATO’s “Partnership for Peace” program. To promote greater
NATO interaction with the Gulf states, NATO Secretary General Jaap de Hoop
Scheffer attended a ground breaking meeting of high level Gulf defense officials in
Qatar on December 1, 2005. During 2005, NATO (including U.S.) naval units, with
participation of some Gulf naval forces, held exercises in the Arabian Sea in support
of the U.S.-led “Proliferation Security Initiative” (PSI), a program to halt potential
WMD-related shipments at sea.
Domestic Stability and Political Liberalization
The external threats the Gulf monarchies face have not produced regime-
threatening instability within the Gulf states. However, there are domestic forces
that, particularly if aggravated by outside Gulf powers such as Iran, could prove
destabilizing. Bahrain and Saudi Arabia have experienced periodic open unrest since
the early 1990s. The Gulf states are instituting gradual domestic political and
economic reform efforts that are intended to satisfy the pro-reform elements of the
population while maintaining tradition.
Leadership Transition
Still governed by hereditary leaders, several of the Gulf states also have
completed at least interim leadership transitions over the past two years. The
transitions are, in many cases, allowing new leaders to move forward on some long-
dormant political or economic reforms.

20 Finnegan, Philip. “Politics Hinders Joint Gulf Missile Defense.” Defense News, March
22, 1999.

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CRS-18
! In Saudi Arabia, King Fahd suffered a stroke in November 1995 but
he held the title of King until his death on August 1, 2005. He was
immediately succeeded by his half-brother and heir apparent, Crown
Prince Abdullah, who had been de-facto ruler of the country.
Abdullah is the same age as was Fahd (about 80) 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, although he has maintained a
cooperative relationship with the United States. Together with his
image of piety and rectitude, Abdullah’s perceived independence
accounts for his relative popularity among the Saudi tribes and
religious conservatives, giving him the legitimacy he needs to
combat Saudi-based Al Qaeda or pro-Al Qaeda militants. His
formal accession has enabled him to begin moving forward on some
long-delayed internal reforms, as discussed below. The new heir
apparent is Prince Sultan, a full brother of the late King Fahd, as
expected, but the longer term succession could be clouded by family
factional politics. The post-Fahd cabinet has remained largely
unchanged; Sultan remains Defense Minister.
! 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 wanted to promote a more limited monarchy
and formally changed Bahrain into a kingdom and took the title King
instead of Amir. King Hamad has moved decisively to try to address
the domestic grievances that have caused Bahrain’s Shiite Muslim
unrest. King Hamad is about 56 years old and has named his son
Salman, who is about 37 years old and is an avowed economic
reformer, as Crown Prince. The two are sometimes said to be at
odds with the King’s traditionalist uncle, Khalifa bin Salman Al
Khalifa, who remains Prime Minister.
! The UAE completed a transition upon the November 2, 2004 death
of 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, who is about 48, succeeded immediately as ruler of Abu
Dhabi and President of the UAE. His dynamic younger brother,
Shaykh Mohammad, who is about 44, was named Abu Dhabi Crown
Prince/heir apparent and he yielded his UAE Armed Forces chief-of-
staff position to a non-royal. Further changes occurred on January
4, 2006 when the ruler of Dubai, Shaykh Maktum bin Rashid Al
Maktum, died suddenly. He was succeeded by his younger brother,
Mohammad bin Rashid Al Maktum, who had been running Dubai
de-facto for many years. Shaykh Mohammad Al Maktum is
expected to be named Prime Minister of the UAE federation if
convention is followed. The UAE is well placed to weather this
transition because it has faced the least unrest of any of the Gulf

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CRS-19
states. Its GDP per capita ($22,000 per year) is among the highest
in the Gulf, and there are few evident schisms in the society.
! Qatar’s Amir, Hamad bin Khalifa Al Thani, who overthrew his
father in a bloodless coup in June 1995, sees himself as the leader
among the Gulf rulers in instituting political reform and a public role
for women. The Amir’s reform agenda has been bolstered by the
high public profile of his favorite wife, Shaykha Moza al-Misnad.
Amir Hamad also has carved out a foreign policy independent from
that of Saudi Arabia, has garnered wide support internally and there
has been little evidence of unrest. On the other hand, some
indications suggest that Qatar could lack dynamic leadership if the
Amir were to leave the scene unexpectedly; in August 2003 the
Amir suddenly and unexpectedly changed his crown prince/heir
apparent from Shaykh Jassim to Jassim’s younger brother, Tamim,
perhaps perceiving Jassim as insufficiently committed to a
leadership role.
! Prior to the January 15, 2006 death of Kuwait’s long serving Amir
Jabir al-Ahmad Al Sabah, Kuwait had begun to resolve a decade of
leadership deadlock and decision-making stagnation caused largely
by the infirmity of the top leadership. The Amir had been largely
out of decisionmaking since a 2001 stroke, and the Crown Prince
Sa’d Abdullah Al Sabah had been mostly sidelined with health
problems as well. In July 2003, Deputy Prime Minister Sabah al-
Ahmad Al-Sabah was appointed Prime Minister, giving him clear
governmental authority and, for the first time in Kuwait, separating
the posts of Prime Minister and Crown Prince. Following the
Amir’s death, Shaykh Sa’d has been appointed the new Amir, and
Shaykh Sabah is likely to be named Crown Prince, potentially
removing him from day-to-day governance. That move would pave
the way for several younger potential successors to assume larger
operational roles, including Foreign Minister Mohammad Al Sabah
and Oil Minister Ahmad al-Fahd Al Sabah. Islamic fundamentalist
opposition to the regime appears to be contained within Kuwait’s
elected National Assembly, and little anti-regime violence has
occurred there since the 1991 Gulf war, although some Al Qaeda or
pro-Al Qaeda activists have carried out attacks against Kuwaiti
security personnel over the past two years, as discussed further in the
last section of this paper.
! The Sultanate of Oman has seen little unrest since Sultan Qaboos
bin Said Al Said took power from his father in 1970. Qaboos is
about 64 years old, apparently in good health, and widely assessed
as highly popular. However, the royal family in Oman is relatively
small and there is no heir apparent or clear successor. This could
lead to a succession crisis or power struggle if Qaboos were to leave
the scene unexpectedly. Since an alleged Islamist plot in 1994 that
led to a few hundred arrests, there has been little evidence of a
radical Islamist element in the Sultanate until a similar wave of

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CRS-20
arrests on similar charges in January 2005. Thirty-one Omanis were
convicted of subversion in the alleged plotting but were pardoned in
June 2005.
Political Liberalization
Virtually all the Gulf leaders are opening the political process to some extent,
in part to help them cope with the challenges of modernization and globalization.
The Bush Administration has expressed strong support for political liberalization in
the Gulf and the broader Middle East as a means of addressing what it sees as root
causes of the September 11, 2001 attacks - the relative lack of popular influence in
governance. However, most Gulf reform efforts predate Bush Administration urging.
Some of the Gulf leaders fear that more rapid liberalization could backfire by
providing Islamist extremists a platform to challenge the incumbent regimes. As
part of their liberalization efforts, all of the Gulf states except Saudi Arabia have
appointed a woman to at least one cabinet post.
! Kuwait has traditionally been at the forefront of political
liberalization in the Gulf, but its progress had been limited in recent
years to reviving its elected 50-seat National Assembly in October
1992, after the 1991 Gulf war and a six year suspension, and to
expanding the all-male electorate. The Assembly has more
influence in decision-making than any representative body in the
Gulf states, consistently exerting its power to review and veto
governmental decrees. After the ousting of Saddam Hussein in
April 2003, the victory of pro-government members in the July 2003
National Assembly elections, and the appointment of Shaykh Sabah
as Prime Minister, in May 2005 the government finally achieved
Assembly approval of legislation to allow female suffrage. That will
take effect as of the next Assembly elections in 2007. The following
month, the government named its first female cabinet minister,
Masouma Mubarak, as Minister of Planning. She is also a Shiite
Muslim, and her appointment restored the customary one Shiite
cabinet seat.
! 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. (One woman won
in the 2003 municipal elections.) In April 2003, a constitution was
adopted in a national referendum, in which women voted. Its
approval (by 97% of the electorate) paves the way for elections to a
one-chamber assembly, to be held some time in 2006, according to
Qatari officials. It would replace a 35 member consultative council
in place since independence in 1971. Thirty seats of the 45-seat
Assembly are to be elected, with the remaining fifteen appointed.
! Oman began holding direct elections to its 83-seat Consultative
Council in September 2000. At that time, the electorate consisted of
25% of all citizens over 21 years old - mostly local notables and

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CRS-21
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.
At the same time, Qaboos appointed new members, including five
women, to a 53-seat “State Council.” The State Council serves, in
part, as a check and balance on the elected Consultative Council;
both combined form a bi-cameral “Oman Council.” In November
2002, Qaboos extended voting rights to all citizens over 21 years of
age, beginning with the October 4, 2003 Consultative Council
elections. Those elections produced a body similar to that elected in
2000, including election of the same two women as the previous
election (out of 15 female candidates). The Oman Council lacks
binding legislative powers and there are no evident groupings or
factions within it. Formal parties are banned. In 2001, Qaboos
appointed three women to cabinet posts.
! The King of Bahrain has largely abandoned his late father’s refusal
to accommodate opposition (mostly Shiite Muslim) 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 the
results were split between moderate Islamists and secular Muslims.
None of the eight female candidates was elected. Some Shiite critics
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
restore the 1973 parliamentary process. (No appointed upper body
was established during the 1970s.) The return to elections appears
to have largely moved Shiite expressions of their grievances away
from the violent unrest that rocked the small state in the mid-late
1990s, although occasional Shiite protests — and government
suppression of them — continue. The new parliament has been
assertive in trying to rewrite strict press laws and in questioning
ministers, but there still are no formal political parties, although the
government has indicated it might allow them at some point. The
King has appointed two women to cabinet posts.
! Saudi Arabia, now under King Abdullah, is beginning to accelerate
political liberalization.21 During King Fahd’s reign, the Kingdom
expanded its national Consultative Council to 90 seats from 60 in
1997, to 120 seats in 2001, and to 150 in April 2005, but Fahd
resisted national elections or the appointment of women to the
Council. In 2004, the government approved new powers for the
21 For more information on Saudi political reform efforts, see CRS Report RS21913. Saudi
Arabia: Reform and U.S. Policy, August 18, 2004, by Jeremy Sharp. Some of the
information in this section is also taken from a CRS staff visit to Saudi Arabia in September
2004, which included several meetings with members of the Saudi Consultative Council.

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CRS-22
Council, including the ability to initiate legislation rather than
merely review government proposed laws, and giving the Council
increased ability to veto draft governmental laws. Observers in
Saudi Arabia say the public is increasingly aware of the Council’s
activities and its growing role as a force in Saudi politics. In 2003
it voted to reject a government-proposed income tax on foreigners;
the government allowed that “veto” to stand. In February 2005,
Saudi Arabia held elections for half of the seats on 178 local
municipal councils around the Kingdom, but women were not
allowed to vote. The municipal councils will report to the Ministry
of Municipal and Rural Affairs. In November 2005, two Saudi
women won election to the Jeddah Chamber of Commerce, the first
vote of any kind in the country in which women participated. The
vote was viewed as a prelude to allowing female suffrage in the
2009 municipal elections, and it could presage a move by King
Abdullah to allow women to drive.
! To date, the UAE has been the least active on political reform, but
movement is now evident. In November 2005, the government
announced that half the seats of the forty seat advisory Federal
National Council (FNC) would be selected by a limited electorate in
each emirate. Each of the seven emirates of the UAE federation has
a fixed number of seats on the FNC, and the size of the electorate
will be 100 times the number of seats each emirate has. The UAE
constitution permits males or females to sit on the FNC (although no
women have been on it to date), indicating that women might be
selected to the FNC in the newly opened selection process. In 2004,
Sharjah emirate appointed five women to Sharjah’s 40-seat
consultative council. In cabinet changes after the November 2004
death of Shaykh Zayid, the government appointed its first woman
cabinet member (Shaykha Lubna al-Qassimi, Minister of Economy
and Planning).
Continued Human Rights Concerns
Despite the move toward political openness in some of the Gulf states, the State
Department human rights report for 200422 says that the Gulf states continue to rely
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 varying degrees of religious discrimination, arbitrary arrests
and detentions, suppression of peaceful assembly and free expression, and other
abuses such as the use of young foreign boys as camel jockeys. On November 28,
2005, the State Department condemned the UAE’s arrest of a dozen same-sex
22 U.S. Department of State. Country Reports on Human Rights Practices - 2004. February
2005.

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CRS-23
couples and the announcement that they would be subjected to hormone treatment.
Some human rights improvements earn praise; Bahrain, for example, was praised the
2004 human rights report for labor reforms, including giving citizens the right to
form and join unions.
On religious freedom, Saudi Arabia actively prohibits the practice of non-
Muslim religions on its territory, even in private, with limited exceptions and, in
2005, for the second year in a row, it has been designated as a “Country of Particular
Concern” under the International Religious Freedom Act (IRFA). According to the
IRFA report for 2005, released November 8, 2005, Qatar prohibits public non-
Muslim worship but tolerates it in private, although it has shifted its position in late
2005 and is now allowing church construction. 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, and
there is a Jewish member of the upper house of Bahrain’s national assembly.
In the State Department’s 2005 “Trafficking in Persons” report, released in June
2005, Kuwait, Qatar, Saudi Arabia, and the UAE fell to “Tier 3” (worst rankings)
indicating they are not making significant efforts to address the problems of human
trafficking. Oman was designated a “Tier 2” country, and Bahrain was designated
as “Tier 2 - ‘Watch List’” suggesting Bahrain risks placement in Tier 3 if it does not
improve efforts to prevent this activity.
U.S. Democratization Efforts
As the Bush Administration has made political and economic reform a priority,
it has expanded the programs and policies used to promote that agenda. The Bush
Administration is promoting these reforms not only through diplomatic exchanges
between U.S. diplomats in the Gulf and their counterparts, but also with new
programs run by the U.S. Agency for International Development (USAID), the State
Department’s Near East Bureau and its Bureau of Democracy, Human Rights, and
Labor, and the “Middle East Partnership Initiative” (MEPI).23 The programs pursued
in each Gulf state are described in the State Department’s “Supporting Human Rights
and Democracy: The U.S. Record 2005-2005,” released March 28, 2005,
[http://www.state.gov/g/drl/rls/shrd/2004/43111.htm]; and on the MEPI website at
[http://mepi.state.gov].

U.S.-funded democratization programs in the Gulf focus on adherence to the
rule of law, economic transparency, judicial reform, improvement in the education
system, the opening of the media, and women’s empowerment. Because U.S.
diplomats in the region generally seek to maintain good relations with their
counterparts and because U.S. interests in the Gulf are broad, most U.S.-funded
programs are supported by the Gulf governments. Many of the programs bring Gulf
government officials, such as education ministry personnel (Bahrain, Saudi Arabia)
and journalists (Kuwait, Saudi Arabia) to the United States for training or to see
firsthand how various functions are carried out in a democracy. Other programs,
23 For information on the initiative and funding provided by it, see CRS Report RS21457,
The Middle East Partnership Initiative: An Overview, by Jeremy M. Sharp.

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CRS-24
such as those in Bahrain, seek to assist Bahrain’s political societies — informal
groupings of citizens that discuss and advocate political positions. Programs and
U.S. efforts in Kuwait focused on advancing female suffrage. Several programs
using MEPI funds were used to help the Gulf countries comply with World Trade
Organization and other requirements for the free trade agreements being negotiated
with the United States (see below).
In pending legislation, H.Res.37, introduced January 6, 2005, commends
Bahrain, Kuwait, Qatar, and Oman (as well as Jordan, Morocco, and Yemen) for
their progress toward democratization and political and economic liberalization. The
legislation resolves that the House of Representatives “offers to assist these countries
in their future challenges of reform,” among other provisions.
Economic Importance and Liberalization
Iran, Iraq, and the GCC states possess about 715 billion barrels of proven oil
reserves, representing about 57% of the world’s total, and 2,462 trillion cubic feet
(tcf) of natural gas, about 45% of the world’s proven reserves of that commodity.
The countries in the Gulf (including Iran and Iraq) produce about 20 million barrels
per day (mbd) of oil, about 30% of the world’s oil production, 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, 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.
This resource concentration virtually ensures that the Gulf will remain a major source
of energy well into the 21st century. All of the countries of the Gulf, including Iran
and Iraq, appear to have an interest in the free flow of oil, but past political conflict
in the Gulf has sometimes led to sharp fluctuations in oil prices and increased
hazards to international oil shipping. As noted in the below, oil export revenues still
constitute a high percentage of GDP for all of the Gulf states. The health of the
energy infrastructure of the Gulf producers is also a key concern of the United States
— Gulf state oil exports comprise about 20% of the United States’ approximately
13 million barrels per day (mbd) net imports.
A sharp oil price decline in 1997-1998 prompted the GCC 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. It is likely, as has happened in the past, that high oil prices
(approximately $60 per barrel as of early 2006) will dampen the drive for economic
reform because the GCC states are earning revenues far higher than expected. Still,
some GCC states, particularly Saudi Arabia and Oman, are trying to ease
underemployment problems by instituting programs to encourage their nationals to
work in jobs traditionally held by foreigners.24
24 Wilson, Scott. “Saudis Fight Militancy With Jobs.” Washington Post, August 31, 2004.

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CRS-25
Table 4. GCC State Oil Production/Exports (2005)
Total Oil
Oil Exports
Oil
Country
Production
to U.S.
Revenues
(mbd)
(mbd)
as % GDP
Kuwait
2.5
0.26
50%
Saudi Arabia
9.5
1.558
40%
Qatar
0.9
negligible
30%
U.A.E.
2.4
negligible
33%
Oman
0.9
0.04
40%
Bahrain
0.02
0
30%
Iran
2.6
0
20%
Iraq
1.2
0.665
32%
Total
19.9
2.52
N/A
Source: DOE, Energy Information Agency (EIA), OPEC Revenue Fact Sheet (September
2004), and various press reports. Export figures are close to production figures for the
GCC states. All countries in the table are members of OPEC except Bahrain and Oman.
Even though oil prices have alleviated some financial pressures on the GCC
states, they are likely to continue to try to attract international capital and needed
advanced technology 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.
It is also the hub of the “Dolphin Project,” in which underwater pipelines are to be
constructed to link gas supplies in Qatar and Oman to the UAE, with possible future
connections to South Asia. In January 2004, the first Omani supplies under the
project began flowing to the UAE emirate of Fujairah; under a swap arrangement,
those supplies are replaced by gas shipments from Qatar to Oman. At the same time,
both Bahrain and Oman are confronting a declining oil sector; Bahrain and Oman are
expected to exhaust their oil supplies in 15 and 20 years, respectively, at current rates
of production.
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 in the two countries. The
Kuwaiti government has not, to date, obtained National Assembly approval for its
“Project Kuwait,” a plan under which foreign investors would develop Kuwait’s
northern oil fields. The government wants the development to compensate for
declining older fields and to increase oil production to 4 million barrels per day by
2020, but the National Assembly wants to ensure that Kuwait retains full sovereignty
over its oil sector. On December 27, 2005, the Assembly again deferred approval of
the project. Similarly, King Abdullah’s 1998 initiative to open the Kingdom’s gas
reserves to Western development has stalled. Saudi Arabia and eight foreign firms
signed a preliminary agreement in June 2001 to develop three Saudi gas fields; two

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CRS-26
of the three would be led by Exxon Mobil. However, the agreement collapsed in
May 2003 and an alternative agreement with Sinopec of China has been signed.
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 applauded progress by the Gulf states in eliminating the
requirement that U.S. firms work through local agents, and protecting the intellectual
property rights of U.S. companies. In December 2002, the Gulf states agreed to
implement a “customs union,” providing for uniform tariff rate on foreign imports;
that union is to be completed by the end of 2007. In October 2005, Saudi Arabia
became the last Gulf state to formally join the World Trade Organization (WTO)
after protracted negotiations mainly to assuage remaining U.S. concerns. 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).
U.S.-Gulf Free Trade Agreements. As part of its strategy to promote
reform and democracy in the Middle East, the Bush Administration has been
negotiating bilateral free trade agreements (FTAs) with the Gulf states. The
Administration decided that an overall U.S.-GCC FTA would likely take too long to
negotiate; a similar joint agreement pursued by the European Union has still not been
finalized after about a decade of negotiation. An FTA was signed with Bahrain on
September 14, 2004. In conjunction with congressional review, Bahrain dropped the
primary boycott of Israel. Legislation to approve and implement the agreement has
been passed by Congress (H.R. 4340, P.L. 109-169, January 11, 2006). In September
2005, the United States and Oman agreed on the provisions of an FTA, and the
agreement was signed on January 19, 2006. Negotiations on an FTA with the UAE
are making progress, according to U.S. negotiators. Kuwait and Qatar have
expressed interest in such agreements as well.
Other Foreign Policy and
Counter-Terrorism Cooperation
The United States has looked to the Gulf states to support U.S. policy on several
other regional and international issues. One such issue is the Arab-Israeli dispute,
which concerns most citizens in the Gulf countries. Another is counter-terrorism, an
issue on which the Gulf states have been increasingly cooperative since their interests
in preventing Islamic extremist movements have converged with U.S. goals.
Arab-Israeli Peace Process
Since Iran’s Islamic 1979 revolution began a period of instability and warfare
in the Gulf, the Gulf states have not focused on the Arab-Israeli dispute to nearly the
degree that “frontline states” such as Egypt, Syria, Jordan, and Lebanon have. In the
27 years since Iran’s revolution, in return for an implicit promise of U.S. strategic
protection, most of the Gulf states have tried to support U.S. policy on the Arab-
Israeli dispute, even when doing so caused the Gulf positions to differ from some

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CRS-27
other Arab states on those issues. In the aftermath of the 1993 Israeli-PLO mutual
recognition agreement, the GCC states participated in the multilateral peace talks,
even though Syria and Lebanon boycotted those talks. Bahrain, Qatar, and Oman
hosted sessions of the multilaterals, and a regional water desalination research center
was established in Oman as a result of an agreement reached in that forum. Oman
and Qatar opened low-level direct trade ties with Israel in 1995 and 1996 and hosted
visits by Israeli leaders during that period. 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.
At the same time, Saudi Arabia — to which the other Gulf states tend to defer
on Arab-Israeli matters — will likely take a more active role on this issue now that
Abdullah is King. He has always been highly focused on this issue and has often
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 a March 2002
Arab League summit. The Gulf states have all publicly endorsed the Bush
Administration’s “road map” for Israeli-Palestinian peace. In September 2005, after
the Gaza redeployment, Qatar’s foreign minister held a widely publicized meeting
with his Israeli counterpart as part of what the Qataris said should be encouragement
and praise for Israel’s move. The final statement of the GCC summit in December
2005 “hailed” the August 2005 Israeli withdrawal from the Gaza Strip as a “step in
the right direction” but expressed the hope it would be followed by a complete Israeli
withdrawal from all occupied Palestinian territories. In October 2005, Qatar became
the first Arab country to donate money to a town inside Israel, giving $6 million to
build a stadium in the ethnically Arab city of Sakhnin in northern Israel.
On the other hand, the Gulf states, as Arab states, clearly support the Arab
position on the dispute. After the latest 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.) That uprising
also prompted the Arab League, with heavy Gulf financial support, to set up funds
to support the Palestinian Authority (PA) and the Palestinian people. The funds,
called the Al Aqsa fund and the Intifada fund, and managed by the Islamic
Development Bank, were to provide up to about $1.2 billion in donated funds to the
PA. Saudi Arabia pledged$270 million of that amount, and it has largely fulfilled
that commitment. Suggesting a lower priority for the smaller Gulf states, Kuwait is
$140 million in arrears on its pledge as of 2005; Qatar still owes about $50 million;
the UAE, $43 million; and Bahrain and Oman each still owe about $20 million of
what was pledged.25
A key difference between the United States and the Gulf states has been on how
to treat the Islamic militant group Hamas. The United States sees it as a designated
foreign terrorist organization (FTO, as named by the State Department in 1997) that
25 Kessler, Glenn. U.S. to Press Arab Nations to Pay Pledges Made to Palestinians.
Washington Post, February 26, 2005.

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CRS-28
conducts attacks on Israelis. The Gulf states see Hamas as a legitimate defender of
Palestinian interests and resister of Israel’s occupation of Palestinian territories.
According to the State Department report on international terrorism for 2004
(released April 2005), “private benefactors” in Saudi Arabia and “other Arab states”
continue to provide funds to Hamas,26 Kuwait openly supported Hamas in the 1990s
as a challenger to then Palestinian leader Yasir Arafat, who had supported Saddam
Hussein in the 1990-91 Gulf crisis. On the other hand, U.S. concerns about Gulf
funding for Hamas might ease if Hamas moves into the mainstream in Palestinian
politics after competing in January 25, 2006 Palestinian legislative elections.
Counter-Al Qaeda Cooperation
The September 11 attacks stimulated some sources of tension between the
United States and some of the Gulf monarchy states, particularly Saudi Arabia, over
allegations that Gulf donors had, wittingly or unknowingly, been contributing to or
tolerating groups and institutions linked to Al Qaeda. Osama bin Laden’s Saudi
origins, coupled with the revelation that fifteen of the nineteen September 11
hijackers were Saudis, caused substantial criticism of Saudi Arabia among some
U.S. experts and opinion-makers. Two of the hijackers were UAE nationals. Many
experts believe the Gulf states were tolerant of the presence of militants in order to
avoid a backlash among citizens that agree with the militant’s anti-U.S., anti-Western
stances. Others accept the official view of some Gulf states that they hoped to calm
regional militancy through negotiations and by working with governments, such as
the Taliban (when it was in power), to keep the militants contained.
Saudi Arabia and the UAE were joined only by Pakistan in extending official
recognition to the Taliban regime of Afghanistan during 1996-2001, breaking ties
with the movement only after the September 11, 2001 attacks. Prior to September
11, the UAE had refused repeated U.S. requests to break ties with the Taliban and to
stop hosting Ariana (Afghan national airline) flights to and from Dubai emirate;27
these flights were one of the few connections between the Taliban and the outside
world. The September 11 Commission report on the attacks noted that the hijackers
had made extensive use, among other means, of financial networks based in the
UAE, in the September 11 plot.28 There has also been extensive public discussion
about the use of Saudi charities and other Saudi-based networks to fund Al Qaeda
and other terrorist networks, although the September 11 Commission found no
evidence that the Saudi government or Saudi officials funded Al Qaeda.29
The September 11 Commission report stated that Khalid Shaykh Mohammad,
alleged mastermind of the September 11 plot, lived in Qatar during 1992-1996 at the
invitation of Shaykh Abdullah bin Khalid Al Thani, the current Interior Minister and
26 U.S. Department of State. Country Reports on Terrorism 2004. P. 99
27 P. 138 of the September 11 Commission final report.
28 P. 527 of the September 11 Commission final report.
29 For an extended discussion of this issue, see CRS Report RL32499. Saudi Arabia:
Terrorist Financing Issues.

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CRS-29
a former Minister of Islamic Affairs.30 The report says that Khalid Shaykh was
warned by Qatari officials in 1996 of a U.S. indictment, and fled. Qatar also hosts
an outspoken Islamic cleric of Egyptian origin, Shaykh Yusuf al-Qaradawi. In
September 2004, in one of his most hardline statements, Qaradawi said that it is a
religious duty for Muslims to fight U.S. forces and civilians in Iraq.31 Despite his
statements, Qaradawi meets with and sometimes appears at panel discussions with
Qatari senior officials. Some Saudi clerics, and even some Saudi officials, such as
Interior Minister Prince Nayef, have earned opprobrium in the United States for
similar statements that appear to blame the United States and U.S. policy for Islamic
terrorism against the United States.
Since the September 11, 2001 attacks and the start of the Iraq war in March
2003, the Gulf states have been partners of the United States against Al Qaeda and
pro-Al Qaeda movements as these militants have posed an increasing threat to the
Gulf states themselves. In Saudi Arabia, there have been attacks on Westerners,
regime installations, and those perceived as linked to the U.S. military or the U.S.-led
war in Iraq. The most well known was the May 12, 2003 attack on a Western
housing complex in Riyadh. In December 2004 there was an attack on the U.S.
consulate in Jeddah. In Kuwait, there have been sporadic attacks on Kuwaiti security
personnel in attacks that might have been attempts to disrupt OIF-related U.S.
military deployments there. Qatar’s tranquility was disrupted in March 2005 when
an Egyptian expatriate bombed a theater frequented by Westerners as a purported
response to Qatar’s hosting of U.S. forces in OIF.
In its most recent annual report on global terrorism, covering the year 2004, the
Bush Administration generally praises Gulf state cooperation against such
extremists, although noting some deficiencies, as discussed below:
! All of the Gulf states are credited with instituting new measures to
combat terrorism financing, including freezing suspected terrorist
assets, requiring approval for charitable transaction, adopting anti-
money laundering laws, and instituting laws and procedures to track
suspicious financial transactions. Each of the Gulf states has joined
the Middle East and North Africa Financial Action Task Force
(MENA-FATF). U.S. officials continue to press their Gulf state
counterparts to rigorously enforce these new measures, and have
criticized some Gulf governments for failing to prosecute some
individuals suspected of being terrorist financiers.
! Kuwait and Saudi Arabia are praised for moving rapidly to detain
and prosecute suspects in various suspected Al Qaeda attacks in
those countries. Saudi authorities have found and captured or killed
several successive leaders of the Al Qaeda organization in Saudi
Arabia, including a leading Al Qaeda associate, Abdul Aziz al-
Muqrin. Saudi vigilance had, by mid-2005, substantially reduced
the frequency of Al Qaeda attacks in the Kingdom, and U.S.
diplomats in Saudi Arabia say there is widespread public support for
the security forces in their stepped up campaign against the militants.
30 P. 146 of the September 11 Commission final report.
31 Cleric Says It’s Right to Fight U.S. Civilians in Iraq. Reuters, September 3, 2004.

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Kuwaiti authorities have taken similar actions against militants
there. In December 2005, Kuwait convicted six men of belonging
to a terror group (“Lions of the Peninsula”) allegedly planning
attacks on U.S. troops in Kuwait.
! The UAE is praised by U.S. officials for providing assistance in
several terrorist investigations; it assisted in the 2002 arrest of at
least one senior Al Qaeda operative in the Gulf, Abd al-Rahim al-
Nashiri.32 In August 2004, the UAE emirate of Dubai, in
cooperation with Pakistani investigators, arrested an alleged senior
Al Qaeda operative, Qari Saifullah Akhtar. Bahrain has on a few
occasions in 2003 and 2004 arrested suspected Al Qaeda activists,
although it has later released many of them pending trial or because
of a lack of legal justification for holding them. Qatar and Oman are
generally cited by the 2004 State Department terrorism report for
assisting U.S. counter-terrorism efforts, and the 2004 report did not
include language from the 2003 report that “Members of
transnational terrorist groups and state sponsors of terrorism are
present in Qatar.”
! In December 2004, the UAE emirate of Dubai, a major Gulf port
hub, signed a statement of principles to participate in the U.S.
“Container Security Initiative” to screen U.S.-bound container cargo
in Dubai. U.S. officials in Oman say that Oman has indicated a
willingness to participate in that initiative as well.
32 U.S. Embassy to Reopen on Saturday After UAE Threat. Reuters, March 26, 2004.

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Appendix 1. Gulf State Populations,
Religious Composition
Table 5. Gulf State Populations, Religious Composition
Country
Total
Number of
Religious
Population
Non-Citizens
Composition
Saudi Arabia
25.8 million
5.6 million
90% Sunni; 10% Shia
Kuwait
2.26 million
1.3 million
60% Sunni; 25% Shia;
15% Christian, Hindu,
other
United Arab
2.52 million
1.6 million
80% Sunni; 16% Shia; 4%
Emirates
Christian, Hindu, other
Bahrain
677,000
235,000
70% Shia; 30% Sunni
Qatar
840,000
500,000
95% Muslim, almost all
Sunni; 5% other
Oman
2.9 million
577,000
75% Ibadhi Muslim; 25%
Sunni and Shia Muslim,
and Hindu
Source: Central Intelligence Agency World Factbook, 2004, and various press reporting. Most, if not
all, non-Muslims in GCC countries are foreign expatriates.

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CRS-32
Appendix 2. Map of the Persian Gulf Region
Figure 2. Map of the Persian Gulf Region and Environs

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