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S T R AT E G I C F O R E C A S T I N G , I N C .STRATFOR is the world’s leading private intelligence firm providing corporations, governments and individuals with intelligence and analysis to anticipate the political, economic, and security issues vital to their interests. Armed with powerful intelligence-gathering capabilities and working in close collaboration with STRATFOR’s experienced team of professionals, our clients are better able to protect their assets, diminish risk, and increase opportunities to compete in the global market.

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ii© 2005 Strategic Forecasting, Inc.

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A b o u t S t r at f o r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i i i

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E x e c u t i v e S u m m a r y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 M a y : T h e M o n t h i n R e v i e w . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 K e y I s s u e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 T h e M o n t h A h e a d : F o r e c a s t s f o r J u n e . . . . . . . . . . . . . . . . . . . . . 1 2 T r e n d s , S t a t s a n d I n d i c a t o r s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5 N o t e w o r t h y E v e n t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 8

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iii© 2005 Strategic Forecasting, Inc.

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STRATFOR is the world’s leading private intelligence firm providing corporations, governments and indi-viduals with geopolitical intelligence and analysis to manage risk and anticipate the political, economic and security issues vital to their interests. Armed with powerful intelligence-gathering capabilities and work-ing in close collaboration with STRATFOR’s expert team of analysts, clients are better able to protect their assets, diminish risk, compete in the global market and increase opportunities. STRATFOR has an unparal-leled record for accuracy and clarity in its forecasts and has been called “the Shadow CIA” by Barron’s.

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1© 2005 Strategic Forecasting, Inc.

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he United States has never been more engaged in the Middle East, where al Qaeda-inspired jihadism — introduced so dramatically to the United States on Sept. 11, 2001 — is pitted against a U.S.-inspired move toward democracy. The Middle East is the arena for this epic struggle, which is playing itself out most intensely

in the urban battlegrounds of Iraq. In Iraq, as elsewhere, moderate Islamists are starting to emerge, which will facilitate the region’s political transformation.

T h i s M o n t h ’ s H i g h l i g h t s : I n E v e r y I s s u e : • The Evolution of Iraq • Trends, Stats and Indicators • Pullout and Political Bickering • Noteworthy Events • Lebanon’s Changing Political Landscape • The Pending Death of a King • Pressure to Democratize

T


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TE x e c u t i v e S u m m a r y

he Middle East, which stretches east from Morocco to Pakistan and south from Turkey to Sudan, is a region beset by domestic political flux and outside intervention by the United States. Not only are these changes evident in specific states but they also are common across borders, due largely to al Qaeda-inspired jihadism and the U.S. response.

As it promotes democracy in the region, the United States seeks not only to counter the jihadist insurgency but also to achieve some political stability in a part of the world characterized by conflict since the end of World War I, when the current countries of the Middle East emerged as independent states.

Between these two conflicting trends — jihadism and democratization — is a third trend called moderate Islamism. Moderate Islamist groups seek to take advantage of the U.S. call for democracy and the heightened religious sensibilities of the masses and secure their own political standing. Recognizing the utility of such movements to further its own interests, Washington has begun to engage these moderate Islamists along with other mainstream and secular-leaning political forces.

As states of the Middle East move away from authoritarian rule and toward more democratic political systems, the transformation will have an impact on the region’s thorniest conflicts, from the Israeli-Palestinian problem to Iran’s nuclear ambitions.


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M A Y : T H E M O N T H I N R E V I E W

May brought a lot of activity all across the broader Middle East, from the North African shores of the Atlantic all the way to Kashmir in Southwest Asia. The focal points of action were Iraq, Iran, Israel, the Palestinian territories of the West Bank and the Gaza Strip, Saudi Arabia, Lebanon, Syria, Iran, Afghanistan and Pakistan.

T h e E v o l u t i o n o f I r a qIn Iraq, the jihadists actually managed to increase the tempo of operations with multiple suicide bomb attacks everyday. Then came the news from Iraqi and U.S. authorities that coalition troop levels in Iraq would be reduced by the end of the year. To meet this deadline, the U.S. military launched two major operations in western Iraq near the Syrian border specifically targeting the jihadists led by al Qaeda in Iraq leader Abu Musab al-Zarqawi. Many jihadist operatives and senior leaders of the network were killed or captured. Al-Zarqawi himself reportedly was wounded and fled to a neighboring country, most likely Jordan or Syria. Shortly thereafter, he made another announcement saying he had recovered from his wounds. This was followed by his message to al Qaeda leader Osama bin Laden that he was well and leading the fight in Iraq.

On the political side of things, the new Iraqi government led by Prime Minister Ibrahim Jaafari finalized his Cabinet by filling the remaining posts, especially the portfolios of oil, defense and the position of fourth deputy prime minister. This was followed by the appointment of a 55-member committee to draft the Iraqi constitution.

I r a n ’ s N u c l e a r S t a n d o f fWith Iraq evolving more or less as the clerical regime in Tehran expected, the Iranians have focused their attention on two key policy issues — one having to do with foreign affairs and the other domestic. After months of threatening to pull out of negotiations with the European Union and to resume uranium enrichment, the Islamic republic tentatively agreed to keep the enrichment process suspended for another few months, allowing the

Al-Zarqawi reportedly was wounded and fled to a neighboring country. Shortly therea�er, he made an announcement saying he had recovered from his wounds.


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European Union to come up with a comprehensive deal that satisfies the Iranian demand that it not be denied access to nuclear technology.

Immediately after confirming his nomination for a third term as president, senior Iranian politician Ali Akbar Hashemi-Rafsanjani offered to mend bilateral relations with the United States. The presidential campaign kicked off after the Guardians Council (GC) approved the candidacies of six individuals and disqualified 1,008. In an effort to co-opt leading reformists, Supreme Leader Ayatollah Ali Khamenei got the hard-line-controlled GC to reinstate the candidacy of two leading reformists who are allies of outgoing President Mohammed Khatami.

P u l l o u t a n d P o l i t i c a l B i c k e r i n gOn the Israeli-Palestinian front, not only did the government of Prime Minister Ariel Sharon postpone the planned withdrawal from the Gaza Strip and parts of the West Bank from mid-July to August, but the Palestinian National Authority (PNA) has all but confirmed that the Palestinian Legislative Council (PLC) elections would be delayed. This past month also saw another member of the Sharon Cabinet resign over the decision to pull out of the Palestinian territories, which puts further pressure on Sharon. In addition, the religious right and the Jewish settler community have maintained their opposition to the pullout.

On the other side of the divide, fractures emerged within the Fatah-controlled PNA over electoral laws governing the PLC elections. This was in addition to the bickering going on between President Mahmoud Abbas and Prime Minister Ahmed Qurai and the rift between the old guard of the Palestine Liberation Organization and the younger generation, which has adopted more violent tactics.

The intra-Fatah feuds are not the only ones threatening to weaken the secular Palestinian movement and its hold on to power. Hamas, which made impressive gains in the May municipal elections and is expected to display a similar if not better performance in the coming legislative elections, has Fatah worried. This has resulted not only in moves to postpone the PLC elections but also to the PNA judiciary’s annulling the results in some of the local elections.

This past month saw another member of the Sharon Cabinet resign over the decision to pull out of the Palestinian territories.


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Both issues have created tensions between Hamas and Fatah, and Egypt is trying to mediate the matter.

L e b a n o n ’ s C h a n g i n g P o l i t i c a l L a n d s c a p eTo the north in Lebanon, another military withdrawal was finalized in May with Syrian troops leaving the country after a presence of several decades. The pullout set off a series of political maneuverings ahead of the general elections slated for June. The entire domestic political landscape went into a state of flux, with the pro-Syrian establishment and its opponents spending the better part of May trying to work out deals.

The electoral platform led by Sunni leader Saadeddin al-Hariri — the son of assassinated former Prime Minister Rafik al-Hariri — and backed by Saudi Arabia emerged as the main opponent to the pro-Syrian establishment lead by President Emile Lahoud. Meanwhile, Maronite leader Michel Aoun and Druze leader Walid Jumblatt also are major players in the factionalized opposition movement. While there is stiff competition within the Maronite and Sunni communities, the majority Shiite community with the Amal-Hezbollah arrangement seems to be the most stable. In May, not only did Iran move to protect the status quo, but the United States and Europe also demonstrated a willingness to politically interact with Hezbollah.

S y r i a o n t h e R e t r e a tStill further north, Syrian President Bashar al Assad is trying to keep things together after his regime was forced by the United States, the United Nations, Europe and a host of fellow Arab states to withdraw its troops from Lebanon, where they had been for almost three decades. There has been no let up in pressure from the United States, which wants Damascus to crack down on fighters traversing the Syrian-Iraqi frontier to stage attacks in Iraq and to desist from backing rejectionist Palestinian groups that are upsetting the Israeli-Palestinian peace process.

Moreover, the Bush administration, while it may not have an alternative political force that it can back against the Alawite-Baathist government and also does not want to create instability in the region, is nonetheless interested in regime change in Syria. Therefore, the pressure is likely geared toward weakening the regime from within.

There has been no let up in pressure from the United States, which wants Damascus to crack down on fighters traversing the Syrian-Iraqi frontier.


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Information obtained from sources close to the political scene in Damascus lend credence to reports that senior Syrian intelligence and security officials are running the show and are unhappy with the behavior of al Assad.

As if all of this were not enough, the president’s uncle — a former rival of his father living in exile in Europe since the early 1980s — made clear his intentions to return home to play a leading role in a movement for political change. In the midst of all the things going wrong for al Assad, there was a glimmer of hope — the statement from outgoing Israeli military chief Lt. Gen. Moshe Yaalon — that Israel would still be able to defend itself if the Golan Heights were returned to Syria. Regardless of when or how this happens, Yaalon’s remarks — irrespective of his actual intentions — provided al Assad with a potential tool to shore up his image at home. The million dollar question for everyone is whether he will be able to effectively use that tool.

T h e P e n d i n g D e a t h o f a K i n gMay was quiet month in Saudi Arabia after a major blow to al Qaeda jihadists in the kingdom in April, when several senior operatives were killed in a clash northwest of Riyadh. Though al Qaeda may not have been a major issue for the al Saud regime in May, fears that the country’s monarch would die kept the kingdom in the media spotlight.

On two separate occasions, the kingdom’s monarchical system seemed poised for a major shakeup — something that has happened only three times since the modern Saudi state was founded in the early 1900s. First, on May 3, there were rumors emanating from neighboring Kuwait that King Fahd bin Abdel-Aziz al Saud had died. Then on May 27, it was announced that the ailing king had been hospitalized for pneumonia.

The last few days, however, have seen a flurry of statements from Crown Prince and de facto ruler Abdullah bin Abdel-Aziz al Saud (who also is a half-brother of Fahd) and the second and third in line after Abdullah (who are real brothers of the king), Defense Minister Prince Sultan bin Abdel-Aziz al Saud and Interior Minister Prince Naief bin Abdel-Aziz al Saud. All three princes have said the king’s health is improving. These reassurances notwithstanding, King Fahd, who is believed to be in his 80s and has been ill for the last 10 years, will not be around for long.


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P r e s s u r e t o D e m o c r a t i z eIn Egypt, the United States has called on the government of President Hosni Mubarak to enact political reforms, and street protests in Egyptian cities are no longer a novelty. In fact, this past month has seen many such demonstrations and, in turn, government crackdowns, especially on the moderate Islamist Muslim Brotherhood, which may not be the strongest political force in the country but is the most organized. This is why the brotherhood joined a host of secular political parties under the banner of the Kifayah (Sufficient) movement to forge a common front against the Mubarak regime.

Under pressure from the Bush administration, Cairo passed legislation that apparently allows, for the first time, multiple candidates to run in the presidential election. In reality, with the elections scheduled for September, it will be difficult for candidates to get on the ballot. The approved legislation went up for a national referendum May 25, but the opposition boycotted the referendum. Despite government claims that some 83 percent voted in favor of the constitutional amendment, the actual turnout reportedly was low, and the voting was marred by violent clashes between government supporters and opposition activists, followed by a police crackdown.

C l a s h e s O v e r t h e K o r a nIn southwest Asia, both Afghanistan and Pakistan saw protests over reports of alleged abuse of the Koran by U.S. military personnel at the detention facility in Guantanamo Bay, Cuba, with several people getting killed during clashes with police. Afghan President Hamid Karzai tried unsuccessfully to gain more control over military operations during his visit to the White House but was flatly rejected by U.S. President George W. Bush. In the same visit, Karzai and Bush signed an agreement allowing U.S. troops to maintain bases in the country for an extended period of time.

At a time when the hunt for the highest leadership of al Qaeda is in full swing, Pakistani and U.S. intelligence and security personnel nabbed Abu Farj al-Libi, a senior operative who was heading operations in Pakistan and is allegedly behind the attempted assassinations of Pakistani President Gen. Pervez Musharraf, Prime Minister Shaukat Aziz and Vice Chief of the Army Staff Lt. Gen. Ahsan Saleem Hayat. After insisting that al-Libi would be tried in Pakistan, Islamabad announced it was handing him over to the United States.

The U.S. has called on President Hosni Mubarak to enact political reforms, and street protests in Egyptian cities are no longer a novelty.


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K E Y I S S U E S

While Russian geopolitical disintegration and Chinese economic meltdown have taken center stage on a global scale, the Middle East is still dealing with two major U.S. strategic initiatives — the war against jihadism and the push for democratization. In other words, geopolitics in the Middle East has one common denominator — the United States. Actually, U.S. involvement varies from state to state and ranges from protecting fledgling governments from insurgents to seeking ways to effect regime change. The Bush administration also is trying to deal with incumbent regimes, even though they may be undesirable ones. In the midst of all of this, the U.S. military and intelligence apparatus is still hunting for al Qaeda’s top leadership.

A m e r i c a n T h e a t e rOn the Arab-Persian frontier, Iraq is working out according to U.S. wishes. The Sunni willingness to at least think about participating in the government is in keeping with American desires, and things continue to move in a direction that suits both parties. Al-Zarqawi is being marginalized, and he announced his wounds to justify a disruption in operations. The United States has engaged substantial segments of the Sunni leadership, and although they have reached no agreement, negotiations continue. The Shia are uneasy with this, of course, and the process does represent a clash of Iranian and American interests. At root, however, their primary interest is the same — contain the Sunnis. The Iranians want domination in Iraq, the Americans want bases. They can and will establish a dialogue about their respective desires in Iraq.

Notwithstanding their bloody eight-year war in the 1980s, the futures of Iran and Iraq now appear to be linked with the ouster of Saddam Hussein. Dominated by its majority Islamist-leaning Shiite community, Iraq’s political system will provide Tehran with a geopolitical tool with which it can project power in the region and beyond. On its own, Iraq will take some time to emerge as a viable state, since containing the insurgency and drafting the country’s constitution will not be possible until some time early next year, at the earliest. Only after these two issues have been settled will the country return to its role as a major oil producer and a state allied with Iran. As for Iran

The Iranians want domination in Iraq, the Americans want bases. They can and will establish a dialogue about their respective desires in Iraq.


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itself, the clerical regime’s attempts to consolidate itself at home and seek recognition abroad are the two key issues that will drive the country’s domestic and international politics. Critically linked to both is the United States, which to a great degree will determine the health of the Iranian state and its place in world affairs.

Afghanistan, despite the weakening of the Taliban movement and the pumping of vast amounts of financial and military assistance into the country, thus far remains a failed state. While the constitution has been drafted and presidential elections have been held, the most challenging task remains — to bring together an entire country fractured along regional, ethnic, tribal, linguistic and ideological lines by electing a parliament. As in Iraq, this is a function of containing the insurgency and co-opting a significant segment of the insurgents. On the periphery of the Middle East, Pakistan is a nuclear-powered nation ruled by the military and is the headquarters of al Qaeda. The militant group might not be there for long, but that does not necessarily mean the country will move toward greater stability. In fact, the impending operation against bin Laden and associates involving U.S. forces could


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contribute to the country’s instability. Many within Pakistan’s political and military hierarchy may take issue with the regime for allowing U.S. forces to operate in the country. Even if this were not the case, given that Pakistan’s hybrid civil-military system revolves around Musharraf, the country will sooner rather than later see a period of political instability when the general is no longer at the helm because of natural or other causes.

L e v e r a g e i n t h e L e v a n tThe Israeli-Palestinian conflict has long been one of the key issues in the region, and it is especially so now with the impending withdrawal of Israeli forces from the West Bank and Gaza Strip and Palestinian legislative elections over the summer. The Israeli withdrawal — an historic event in itself — will pave the way for the emergence of a sovereign Palestinian state, and the elections will allow the militant Islamist Palestinian group Hamas to transform into a major political player. At the same time, the Palestinian establishment is weakening, and there are serious divisions within the ruling Likud Party in Israel over the proposed pullout. Dissidents allied with the religious right and the settler community threaten the stability of the government of Sharon, who has had to forge a government of national unity with the opposition Labor Party.

In the Syrian-Lebanese arena, Damascus’ withdrawal of its troops from Lebanon has not only paved the way for a political shake-up in Beirut, but also threatens to destabilize the Alawite-Baathist regime led by al Assad. U.S. pressure on Syria has not subsided, even after Syria complied with the international demand to remove its forces from Lebanon. Washington is now forcing Syria to crack down on militant traffic along the country’s border with Iraq. It remains to be seen whether the Bush administration goes for the jugular and continues with the pressure to secure regime change in a non-military manner.

A G r a d u a l R e s h a p i n gWhile al Qaeda may no longer be a strategic threat to the government of Saudi Arabia, the impending transition within the royal family, along with calls for reform from the United States, will continue to re-shape the country’s political system — albeit gradually. This will have a direct impact on global oil markets because the country contains a large portion of the world’s oil reserves.

The Palestinian establishment is weakening, and there are serious divisions within the ruling Likud Party in Israel over the proposed pullout.


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The death watch over the ailing monarch is important in that King Fahd plays a significant role as a system stabilizer. His younger half-brother has been discharging his duties as de facto ruler of the Saudi kingdom for the last decade, but Fahd bin Abdel-Aziz al Saud retains his title as king. In other words, Crown Prince Abdullah has been manning the helm in terms of both domestic as well as foreign affairs, while King Fahd has spent most of his time resting and tending to his illness for as long as al Qaeda has existed. Ten years is a long time for a man to be king in name only, especially with his half brother serving as the effective ruler of the kingdom and his real brothers serving as subordinates. King Fahd is known to have certain negative characteristics, but pettiness is not one of them, and it is unlikely that the aging monarch wanted to hold on to the title of king for some trivial pleasure. So what purpose is being served in having him retain his official position as reigning monarch?

There are likely certain problems on which the lid has been kept during King Fahd’s illness. With Crown Prince Abdullah and Defense Minister Prince Sultan poised to assume the roles of king and crown prince respectively, these problems could have to do with disagreements over the Cabinet and other positions below them. Who succeeds King Fahd and who gets to be deputy monarch are settled matters. The fact that the four top princes beneath the


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current king are all 69 or older and could therefore die in quick succession poses a huge problem for the stability of the Saudi system. Such a scenario effectively transfers power into the hands of the grandsons of the founder of the modern Saudi dynasty, King Abdel-Aziz. It is not a pretty picture. Considering that his sons had problems sharing power, his grandsons are likely to as well. The situation will be exacerbated by their sheer number, by some accounts more than 50 sons of men who have been in positions of power since the establishment of the kingdom.

Egypt, for the first time since it became a U.S. ally in 1978, is under pressure from the United States to effect political reforms, which is the main driver of events within the country. On the external front, Cairo continues to play a major role brokering peace between Israelis and Palestinians and mediating between the ruling Fatah and its opponents, both secular and Islamist. Despite the focus on domestic issues in the wider Middle East, the Mubarak government it is trying to sustain its position as a major player given its central role in the Arab League.

T h e M o n t h A h e a d :F o r e c a s t s f o r J u n e

H i g h l i g h t s : • Attacks and Infighting Continue in Iraq • Rafsanjani Wins in Iran • Electioneering Continues in Palestinian Territories • “Cedar Revolution” Fizzles in Lebanon • Egypt Steps Back from Mediator Role

In Iraq, we will see a continuation of the Shiite-led government’s attempts to co-opt the Sunnis into the political process. In the event al-Zarqawi’s capture, Stratfor expects a successor to emerge at the forefront of the jihadist resistance. Though his successor may not be as charismatic, he will be able to sustain low-level attacks against U.S. forces and Iraqis. The drafting process of the Iraqi constitution will continue against a backdrop of infighting within the Iraqi regime.

That the four top princes beneath the king are 69 or older poses a huge problem for the stability of the Saudi system.


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The June 17 presidential elections in Iran will result in a win for pragmatic conservative candidate and two-time former President Rafsanjani, who will use his re-election to embark on a path toward rapprochement with United States. Iran and the European Union will continue to take a restrained approach toward nuclear negotiations as they await a possible June vote on Iran’s membership in the World Trade Organization. Iran also will publicly deepen its involvement in Lebanon to ensure its paramilitary proxy resistance group Hezbollah will stay intact as a militant tool to protect Iran from Israeli threats against its nuclear program. On the home front, Rafsanjani will begin trying to consolidate his hold on his pragmatic conservative faction by balancing between the hard-liners and the reformists.

Electioneering in the Palestinian territories will seriously threaten the informal truce between Israeli and Palestinian resistance groups as Fatah tries to hold off an electoral onslaught by Hamas. Abbas will take great care to distance himself from the infighting that has plagued Fatah and its militant offshoot, al-Aqsa Martyrs Brigade. He is attempting to please all actors involved in the peace process, including his own Fatah party, Hamas and Israel. This largely has contributed to a dangerous stagnation in the political process that has threatened to break the fragile truce declared between Palestinian militant groups and Israel. It is important to note that both Israel and the PNA are waiting for each other to act first to gauge the success of their own plans (including the Israeli withdrawal from the Gaza Strip and West Bank and the Palestinian legislative elections that probably will be delayed). Regardless of these tactics, both parties will be forced to recognize that the growing political power of Hamas and the likelihood of a tumultuous withdrawal period are very real issues that must be dealt with. This idea will be discussed at Abbas’ summit with Sharon on June 21, when both sides will have to decide who will act first without sacrificing too much political capital at home.

In Lebanon, the much-anticipated and widely disappointing “Cedar Revolution” will fizzle out when the parliamentary elections wrap up June 19. Despite shuffling in a few new influential faces from the opposition, the general direction of the Lebanese government will not stray far from the

PNA President Mahmoud Abbas will take great care to distance himself from the infighting that has plagued Fatah and its militant offshoot.


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status quo as a significant number of pro-Syrian loyalists will retain their positions under the 2000 electoral law. Meanwhile, the Saudi government will have regained its sphere of influence in Beirut through its proxy Saadeddinal-Hariri, the son of slain former Lebanese Prime Minster Rafik al Hariri. Saadeddin will succeed in taking all 19 seats on theal-Hariri electoral list and will set the stage to take the premiership once the parliamentary elections wrap up. The real electoral battle will take place in the Aley-Baabda district, in which Maronite politician Aoun will contest al-Hariri’s coalition with Jumblatt. We also will begin to see pressure ratchet up in the newly elected Parliament to force the resignation of Lahoud.

To Lebanon’s east, the Syrian regime led by al Assad will continue its attempts to stave off U.S. pressure and win EU support with the 10th National Baath Party Conference in June. A number of cosmetic reforms under vague guidelines will be introduced to allow al Assad to keep the Syrian public distracted without committing to a specific timeline that would threaten his hold on power.

Meanwhile, Egypt will begin retreating from its position as the chief mediator of the Arab-Israeli conflict as it finds itself in an increasingly turbulent domestic imbroglio. Mubarak will move toward co-opting the Muslim Brotherhood into the political process to secure legitimacy for the presidential elections.

In the kingdom of Saudi Arabia, the death of King Fahd will result in Crown Prince Abdullah assuming the throne and Defense Minister Prince Sultan becoming crown prince. The perception of instability in the kingdom will affect world oil prices to some extent and will be exacerbated if the al Qaeda branch in Saudi Arabia chooses to take advantage of the distraction of King Fahd’s death to stage an attack.

In Pakistan, it appears that both the U.S. and Pakistani militaries are gearing up for a final offensive against al Qaeda. This will prompt jihadist actors in the region to continue staging attacks against Shiite targets in an attempt to distract Washington and Islamabad from their military objectives.

Egypt will begin retreating from its position as the chief mediator of the Arab-Israeli conflict as it finds itself in a domesticimbroglio.


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T r e n d s , S tat s a n d I n d i c at o r s

Afghanistan

Algeria

Bahrain

Egypt

Iran

Iraq

Israel

Jordan

Kuwait

Lebanon

Libya

Morocco

Mauritania

Oman

Qatar

Pakistan

Saudi Arabia

Syria

Tunisia

Turkey

UAE

Yemen

n/a = not available

All data are provided by the governments of respective countries, unless otherwise noted.

1 World Bank Development Indicators, 2003 2 WDI, 2002 3 WDI, 20034 IMF 2004 5 IMF 2005 6 CIA World Factbook 2004 7 Laborsta, 2001 8 Laborsta, 2003 9 WTO, 200310 Australian Estimate, 2004

0.01

66.53 1

9.50

106.00

137.14

n/a

110.23 3

9.86 3

41.75 3

18.04 2003

25.30 2004

53.10

1.09 3

20.31 2

28.45

96.96 2004

248.50 2004

24.40

29.41

300.58 2004

85.10 2004 est.

11.37 2003

26,813,057 1

31,832,610 1

689,418

77,505,756

66,392,020 3

26,074,906

6,864,200

5,323,000 2004

2,396,417 3

4,500,000 2003

5,765,563

31,100,000 10

284,7869 3

2,598,832 3

744,029

148,720,000 2004 est.

22,673,538

17,384,490 3

10,041,500 2004

70,712,000 2003

4,320,000

20,356,700 2003

0.20

2090.00

13779.74

1367.64

2065.67 1

n/a

16058.22

1852.36

17421.14

4008.44

4388.12

1707.40

383.94 3

7814.85

38239.10

652.00 2004

10959.91

1403.55

2928.99

4250.74 2004

19699.07 2004 est.

558.37 2003

0.08

6.80 1

6.00

3.20 1

6.61 1

n/a

4.30 4

3.16 3

9.90

3.00 2003

4.80

4.00

4.94 3

6.30

20.50

6.40 2004 est.

8.70

3.00 3

7.60

24.60 2004

4.80

14.12 2003

n/a

634.00

517.00

237.00

120.00

n/a

3700.00

379.00

67.00

358.00

700.00

2200.00

214.00

138.00

400.00

1400.00

208.00

150.00

584.00

575.00

480.00

-89.00

n/a

25.40 6

16.14 7

11.00 8

11.20 6

28.10 8

10.40 2004

15.00 6

2.20 6

20.00

30.00 6

11.30

20.00 6

15.00 6

3.90 7

8.27 2004

9.60

11.70 8

13.80 6

10.30 2004

2.40 6

11.50 2003

n/a

24.50 2003

7.60

10.45

33 .788 9

n/a

33.80

3.08 9

20.69 9

1.52 2003

9.14 2

8.77 9

0.37 3

11.67 9

13.35

12.10 2004 proj.

96.37 9

8.60 3

9.47.83

75.90 2004

56.00 2004 est.

3.77 2004

n/a

13.30 2003

5.90

18.29

26.16 9

n/a

40.30

5.74 9

10.79 9

7.17 2003

6.97 2

14.23 9

0.82 3

6.58 9

4.40

14.50 2004 est.

36.96 9

7.09 3

12.98

79.00 2004

39.80 2004 est.

3.71 2003

10.00

3.50 5

3.70 5

7.90 5

15.00 5

n/a

1.10 2004

3.50 5

1.80 5

2.00 5

1.80 5

2.00 5

14.20 5

0.60 5

3.00 5

3.90 2004 est.

1.00 5

4.00 5

2.50 5

9.00 5

3.00 2004 est.

14.20 5

n/a

21.00

n/a

9350.00

23.00

n/a

24554.41

n/a

n/a

n/a

18.90

n/a

n/a

n/a

n/a

n/a

23.30

n/a

3568.50 2005

37859.77 2005

n/a

n/a

GDP

bil

lions

USD a

t 200

4 mar

ket p

rices

Popu

latio

n mi

llions

GDP

per

cap

ita

billio

ns US

D at 2

004 m

arke

t pric

es

GDP

gro

wth

%

chan

ge fr

om ye

ar pr

eviou

sIn

com

ing

FDI

contr

acted

billio

ns US

D

Unem

ploy

men

t % Ex

ports

billio

ns US

D

Fore

ign

Curr

ency

Res

erve

s

billio

ns US

D

Impo

rts

billio

ns US

D

Infla

tion

CPI %

chan

ge fr

om m

onth

previo

us

Afghanistan

Algeria

Bahrain

Egypt

Iran

Iraq

Israel

Jordan

Kuwait

Lebanon

Libya

Morocco

Mauritania

Oman

Qatar

Pakistan

Saudi Arabia

Syria

Tunisia

Turkey

UAE

Yemen

n/a = not available



0.01

66.53 1

9.50

106.00

137.14

n/a

110.23 3

9.86 3

41.75 3

18.04 2003

25.30 2004

53.10

1.09 3

20.31 2

28.45

96.96 2004

248.50 2004

24.40

29.41

300.58 2004

85.10 2004 est.

11.37 2003

26,813,057 1

31,832,610 1

689,418

77,505,756

66,392,020 3

26,074,906

6,864,200

5,323,000 2004

2,396,417 3

4,500,000 2003

5,765,563

31,100,000 10

284,7869 3

2,598,832 3

744,029

148,720,000 2004 est.

22,673,538

17,384,490 3

10,041,500 2004

70,712,000 2003

4,320,000

20,356,700 2003

0.20

2090.00

13779.74

1367.64

2065.67 1

n/a

16058.22

1852.36

17421.14

4008.44

4388.12

1707.40

383.94 3

7814.85

38239.10

652.00 2004

10959.91

1403.55

2928.99

4250.74 2004

19699.07 2004 est.

558.37 2003

0.08

6.80 1

6.00

3.20 1

6.61 1

n/a

4.30 4

3.16 3

9.90

3.00 2003

4.80

4.00

4.94 3

6.30

20.50

6.40 2004 est.

8.70

3.00 3

7.60

24.60 2004

4.80

14.12 2003

n/a

634.00

517.00

237.00

120.00

n/a

3700.00

379.00

67.00

358.00

700.00

2200.00

214.00

138.00

400.00

1400.00

208.00

150.00

584.00

575.00

480.00

-89.00

n/a

25.40 6

16.14 7

11.00 8

11.20 6

28.10 8

10.40 2004

15.00 6

2.20 6

20.00

30.00 6

11.30

20.00 6

15.00 6

3.90 7

8.27 2004

9.60

11.70 8

13.80 6

10.30 2004

2.40 6

11.50 2003

n/a

24.50 2003

7.60

10.45

33 .788 9

n/a

33.80

3.08 9

20.69 9

1.52 2003

9.14 2

8.77 9

0.37 3

11.67 9

13.35

12.10 2004 proj.

96.37 9

8.60 3

9.47.83

75.90 2004

56.00 2004 est.

3.77 2004

n/a

13.30 2003

5.90

18.29

26.16 9

n/a

40.30

5.74 9

10.79 9

7.17 2003

6.97 2

14.23 9

0.82 3

6.58 9

4.40

14.50 2004 est.

36.96 9

7.09 3

12.98

79.00 2004

39.80 2004 est.

3.71 2003

10.00

3.50 5

3.70 5

7.90 5

15.00 5

n/a

1.10 2004

3.50 5

1.80 5

2.00 5

1.80 5

2.00 5

14.20 5

0.60 5

3.00 5

3.90 2004 est.

1.00 5

4.00 5

2.50 5

9.00 5

3.00 2004 est.

14.20 5

n/a

21.00

n/a

9350.00

23.00

n/a

24554.41

n/a

n/a

n/a

18.90

n/a

n/a

n/a

n/a

n/a

23.30

n/a

3568.50 2005

37859.77 2005

n/a

n/a

GDP

bil

lions

USD a

t 200

4 mar

ket p

rices

Popu

latio

n mi

llions

GDP

per

cap

ita

billio

ns US

D at 2

004 m

arke

t pric

es

GDP

gro

wth

%

chan

ge fr

om ye

ar pr

eviou

sIn

com

ing

FDI

contr

acted

billio

ns US

D

Unem

ploy

men

t % Ex

ports

billio

ns US

D

Fore

ign

Curr

ency

Res

erve

s

billio

ns US

D

Impo

rts

billio

ns US

D

Infla

tion

CPI %

chan

ge fr

om m

onth

previo

us


J U N E 2 0 0 5

Afghanistan

Algeria

Bahrain

Egypt

Iran

Iraq

Israel

Jordan

Kuwait

Lebanon

Libya

Morocco

Mauritania

Oman

Qatar

Pakistan

Saudi Arabia

Syria

Tunisia

Turkey

UAE

Yemen

n/a = not available



0.01

66.53 1

9.50

106.00

137.14

n/a

110.23 3

9.86 3

41.75 3

18.04 2003

25.30 2004

53.10

1.09 3

20.31 2

28.45

96.96 2004

248.50 2004

24.40

29.41

300.58 2004

85.10 2004 est.

11.37 2003

26,813,057 1

31,832,610 1

689,418

77,505,756

66,392,020 3

26,074,906

6,864,200

5,323,000 2004

2,396,417 3

4,500,000 2003

5,765,563

31,100,000 10

284,7869 3

2,598,832 3

744,029

148,720,000 2004 est.

22,673,538

17,384,490 3

10,041,500 2004

70,712,000 2003

4,320,000

20,356,700 2003

0.20

2090.00

13779.74

1367.64

2065.67 1

n/a

16058.22

1852.36

17421.14

4008.44

4388.12

1707.40

383.94 3

7814.85

38239.10

652.00 2004

10959.91

1403.55

2928.99

4250.74 2004

19699.07 2004 est.

558.37 2003

0.08

6.80 1

6.00

3.20 1

6.61 1

n/a

4.30 4

3.16 3

9.90

3.00 2003

4.80

4.00

4.94 3

6.30

20.50

6.40 2004 est.

8.70

3.00 3

7.60

24.60 2004

4.80

14.12 2003

n/a

634.00

517.00

237.00

120.00

n/a

3700.00

379.00

67.00

358.00

700.00

2200.00

214.00

138.00

400.00

1400.00

208.00

150.00

584.00

575.00

480.00

-89.00

n/a

25.40 6

16.14 7

11.00 8

11.20 6

28.10 8

10.40 2004

15.00 6

2.20 6

20.00

30.00 6

11.30

20.00 6

15.00 6

3.90 7

8.27 2004

9.60

11.70 8

13.80 6

10.30 2004

2.40 6

11.50 2003

n/a

24.50 2003

7.60

10.45

33 .788 9

n/a

33.80

3.08 9

20.69 9

1.52 2003

9.14 2

8.77 9

0.37 3

11.67 9

13.35

12.10 2004 proj.

96.37 9

8.60 3

9.47.83

75.90 2004

56.00 2004 est.

3.77 2004

n/a

13.30 2003

5.90

18.29

26.16 9

n/a

40.30

5.74 9

10.79 9

7.17 2003

6.97 2

14.23 9

0.82 3

6.58 9

4.40

14.50 2004 est.

36.96 9

7.09 3

12.98

79.00 2004

39.80 2004 est.

3.71 2003

10.00

3.50 5

3.70 5

7.90 5

15.00 5

n/a

1.10 2004

3.50 5

1.80 5

2.00 5

1.80 5

2.00 5

14.20 5

0.60 5

3.00 5

3.90 2004 est.

1.00 5

4.00 5

2.50 5

9.00 5

3.00 2004 est.

14.20 5

n/a

21.00

n/a

9350.00

23.00

n/a

24554.41

n/a

n/a

n/a

18.90

n/a

n/a

n/a

n/a

n/a

23.30

n/a

3568.50 2005

37859.77 2005

n/a

n/a

GDP

bil

lions

USD a

t 200

4 mar

ket p

rices

Popu

latio

n mi

llions

GDP

per

cap

ita

billio

ns US

D at 2

004 m

arke

t pric

es

GDP

gro

wth

%

chan

ge fr

om ye

ar pr

eviou

sIn

com

ing

FDI

contr

acted

billio

ns US

D

Unem

ploy

men

t % Ex

ports

billio

ns US

D

Fore

ign

Curr

ency

Res

erve

s

billio

ns US

D

Impo

rts

billio

ns US

D

Infla

tion

CPI %

chan

ge fr

om m

onth

previo

us

Afghanistan

Algeria

Bahrain

Egypt

Iran

Iraq

Israel

Jordan

Kuwait

Lebanon

Libya

Morocco

Mauritania

Oman

Qatar

Pakistan

Saudi Arabia

Syria

Tunisia

Turkey

UAE

Yemen

n/a = not available



0.01

66.53 1

9.50

106.00

137.14

n/a

110.23 3

9.86 3

41.75 3

18.04 2003

25.30 2004

53.10

1.09 3

20.31 2

28.45

96.96 2004

248.50 2004

24.40

29.41

300.58 2004

85.10 2004 est.

11.37 2003

26,813,057 1

31,832,610 1

689,418

77,505,756

66,392,020 3

26,074,906

6,864,200

5,323,000 2004

2,396,417 3

4,500,000 2003

5,765,563

31,100,000 10

284,7869 3

2,598,832 3

744,029

148,720,000 2004 est.

22,673,538

17,384,490 3

10,041,500 2004

70,712,000 2003

4,320,000

20,356,700 2003

0.20

2090.00

13779.74

1367.64

2065.67 1

n/a

16058.22

1852.36

17421.14

4008.44

4388.12

1707.40

383.94 3

7814.85

38239.10

652.00 2004

10959.91

1403.55

2928.99

4250.74 2004

19699.07 2004 est.

558.37 2003

0.08

6.80 1

6.00

3.20 1

6.61 1

n/a

4.30 4

3.16 3

9.90

3.00 2003

4.80

4.00

4.94 3

6.30

20.50

6.40 2004 est.

8.70

3.00 3

7.60

24.60 2004

4.80

14.12 2003

n/a

634.00

517.00

237.00

120.00

n/a

3700.00

379.00

67.00

358.00

700.00

2200.00

214.00

138.00

400.00

1400.00

208.00

150.00

584.00

575.00

480.00

-89.00

n/a

25.40 6

16.14 7

11.00 8

11.20 6

28.10 8

10.40 2004

15.00 6

2.20 6

20.00

30.00 6

11.30

20.00 6

15.00 6

3.90 7

8.27 2004

9.60

11.70 8

13.80 6

10.30 2004

2.40 6

11.50 2003

n/a

24.50 2003

7.60

10.45

33 .788 9

n/a

33.80

3.08 9

20.69 9

1.52 2003

9.14 2

8.77 9

0.37 3

11.67 9

13.35

12.10 2004 proj.

96.37 9

8.60 3

9.47.83

75.90 2004

56.00 2004 est.

3.77 2004

n/a

13.30 2003

5.90

18.29

26.16 9

n/a

40.30

5.74 9

10.79 9

7.17 2003

6.97 2

14.23 9

0.82 3

6.58 9

4.40

14.50 2004 est.

36.96 9

7.09 3

12.98

79.00 2004

39.80 2004 est.

3.71 2003

10.00

3.50 5

3.70 5

7.90 5

15.00 5

n/a

1.10 2004

3.50 5

1.80 5

2.00 5

1.80 5

2.00 5

14.20 5

0.60 5

3.00 5

3.90 2004 est.

1.00 5

4.00 5

2.50 5

9.00 5

3.00 2004 est.

14.20 5

n/a

21.00

n/a

9350.00

23.00

n/a

24554.41

n/a

n/a

n/a

18.90

n/a

n/a

n/a

n/a

n/a

23.30

n/a

3568.50 2005

37859.77 2005

n/a

n/a

GDP

bil

lions

USD a

t 200

4 mar

ket p

rices

Popu

latio

n mi

llions

GDP

per

cap

ita

billio

ns US

D at 2

004 m

arke

t pric

es

GDP

gro

wth

%

chan

ge fr

om ye

ar pr

eviou

sIn

com

ing

FDI

contr

acted

billio

ns US

D

Unem

ploy

men

t % Ex

ports

billio

ns US

D

Fore

ign

Curr

ency

Res

erve

s

billio

ns US

D

Impo

rts

billio

ns US

D

Infla

tion

CPI %

chan

ge fr

om m

onth

previo

us



J U N E 2 0 0 5

Afghanistan

Algeria

Bahrain

Egypt

Iran

Iraq

Israel

Jordan

Kuwait

Lebanon

Libya

Morocco

Mauritania

Oman

Qatar

Pakistan

Saudi Arabia

Syria

Tunisia

Turkey

UAE

Yemen

*Closing Rates

Beginning

42.785

72.405

1

5.8025

7900

1521.1

4.3822

0.7083

0.292

1514

1.3269

8.6289

270.8

0.3852

3.6395

59.474

3.7495

52.51

1.2555

1.3835

3.6724

183.05

Low

42.785

70.879

1

5.7912

7900

1396.8

4.3579

0.70688

0.29133

1505.3

1.2189

8.5834

263.49

0.3852

3.6395

58.898

3.7409

52.51

1.2495

1.3421

3.664

181.02

High

42.785

72.56

1

5.8227

7900

1414.2

4.4127

0.71112

0.29308

1514

1.2521

8.9293

265.5

0.3852

3.6395

59.707

3.7647

52.51

1.2937

1.3886

3.686

183.2

End

42.785

72.56

1

5.7948

7900

1530.7

4.4127

0.71093

0.293

1509.8

1.357

8.9293

263.5

0.3852

3.6395

58.898

3.7624

52.51

1.2937

1.3645

3.685

183.2

Regional Currency Rates



J U N E 2 0 0 5

N O T E W O R T H Y E V E N T S

May 1: Iraqi National Security Adviser Mowaffak al-Rubaie says U.S. and allied forces in Iraq will begin withdrawing by mid-2006.

May 1: A suicide bomber attack at the funeral of a Kurdish official in Tall Afar, Iraq, kills 25 people.

May 2: Israeli Cabinet Minister Natan Sharansky submits his resignation to Prime Minister Ariel Sharon over plans for an Israeli withdrawal from the West Bank.

May 3: Israeli Prime Minister Ariel Sharon tells U.S. Senators Bill Frist and Joseph Lieberman that Hamas must disarm before it participates in Palestinian legislative council elections.

May 3: U.S. Central Command reports that troops in Iraq seized a letter from Abu Asim al-Qusaymi al-Yemeni to “the Sheikh,” a name often used for Abu Musab al-Zarqawi, during an April 28 raid in Baghdad. In the letter, the al Qaeda in Iraq member criticizes the Sheikh for disappearing since the Al Fallujah raid but praises him for resisting U.S. forces. The writer also comments on the incompetence of jihadist leaders and on the decreasing support for the movement. A document with target information and sketched maps for bombings and kidnappings is attached to the missive.

May 3: Iran says it will resume some nuclear activities that were suspended to gain international confidence, but says it will not resume uranium enrichment while talks with European negotiators continue.

May 3: Two Hamas members who allegedly were planning a rocket attack are arrested in the Gaza Strip following a shootout with Palestinian police — the first such clash since Palestinian National Authority President Mah-moud Abbas ordered a crackdown on militants April 28. Hamas denies the men were planning to fire rockets but confirms they were armed.

May 4: A Lebanese magistrate drops all three charges — usurping power, carrying out unlawful political activity and embezzling public funds — against former Prime Minister and Christian opposition leader Michel Aoun, who spent 14 years in exile in France. Aoun still faces charges for testimony he gave to a U.S. congressional committee in September 2003 that


J U N E 2 0 0 5

contributed to Washington’s decision to enact sanctions against Syria and its “support of terrorism.”

May 4: Israeli Defense Minister Shaul Mofaz freezes the transfer of authority of towns in the West Bank to the Palestinian National Authority (PNA), saying the PNA failed in its commitment to disarm militants.

May 4: Pakistan confirms its capture of Abu Farj al-Libi, a Libyan believed to be third in command of al Qaeda. He is wanted in connection with two assassination attempts against Pakistani President Gen. Pervez Musharraf.

May 4: PNA President Mahmoud Abbas, accusing Israel of wanting “Palestinian blood to be spilled,” criticizes Israeli demands that the Palestinian National Authority curb militants, although he acknowledges that progress has been slow.

May 4: A suicide bombing at a police recruitment center in the Kurdish stronghold of Arbil in northern Iraq kills at least 50 people and injures dozens. The bomber posed as a police volunteer to gain access to the compound.

May 5: Preliminary results of the 84 local elections in the West Bank and Gaza Strip indicate that Palestinian National Authority President Mahmoud Abbas’ Fatah party has won 50 of the municipalities, Hamas has won 28 and smaller factions have won four. Final results are expected May 8.

May 5: Lebanese President Emile Lahoud signs a decree authorizing four rounds of legislative elections starting May 29.

May 5: In Egypt, security forces fight thousands of protesters during nationwide demonstrations against President Hosni Mubarak’s rule. Approximately 2,500 members of the banned Muslim Brotherhood assembled in front of a Cairo mosque and demanded reforms. In other cities, Egyptian police use tear gas to disperse protesters and arrest more than 400 people.

May 5: Armed with intelligence provided by Abu Farj al-Libi, security forces carry out raids in several cities in Pakistan and arrest about two dozen al Qaeda suspects.


J U N E 2 0 0 5

May 6: One of the Muslim Brotherhood’s most prominent leaders, Essam el-Erian, and three other high-ranking members are arrested in Cairo, Egypt, as members of the group gather to protest arrests made earlier in the week.

May 6: Saudi Crown Prince Abdullah bin Abdel-Aziz al Saud arrives in Damascus to encourage Syrian President Bashar al Assad to pursue internal reforms and improve his relations with Washington.

May 6: Iran says it is ready to step up its nuclear activities if the European Union and Tehran cannot quickly reach an agreement over the program.

May 6: News reports emerge in the Middle East that the United States has a plan, awaiting presidential approval, to fully withdraw its troops from Iraq by the end of 2005.

May 7: Iraqi government officials say security forces captured Ghassan al-Rawi, an aide to al Qaeda in Iraq leader Abu Musab al-Zarqawi, in late April. Al-Rawi is accused of involvement in kidnappings, and officials say weapons and vehicles being prepared for suicide bombings were found at his location when he was arrested in the western town of Rawa.

May 7: Former Christian opposition leader Michel Aoun returns to Lebanon after 14 years of exile in France.

May 7: The U.S. military launches Operation Matador, a counterinsurgency offensive in Iraq’s western Anbar province.

May 8: Gunmen affiliated with the al-Aqsa Martyrs Brigade raid election offices in central Gaza, closing them down to protest Fatah losses in municipal elections the previous week.

May 8: Iraqi government officials say militant leader Amar al-Zubaydi, also known as Abu Abbas, was captured May 5 in Baghdad. Al-Zubaydi is a key aide to al Qaeda in Iraq leader Abu Musab al-Zarqawi.

May 8: Iran announces a decision to resume some uranium enrichment-related nuclear activities at the Isfahan Uranium Conversion Facility, regardless of talks with the European Union.


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May 9: Israel must rethink plans to pull troops out of the Gaza Strip if Hamas wins Palestinian National Authority elections on July 17, Foreign Minister Silvan Shalom says.

May 9: The Atomic Energy Organization of Iran says 37 tons of raw uranium were converted into UF-4 gas at the Isfahan Uranium Conversion Facility before Iran halted activities in November 2004.

May 9: Israeli Prime Minister Ariel Sharon announces plans to delay the Gaza troop pullout until mid-August.

May 10: In Egypt, the People’s Assembly, the lower house of parliament, passes a constitutional amendment to allow more than one candidate to stand in presidential elections. The upper house passed the measure May 8. The public will vote next in a referendum.

May 10: Responding to earlier statements by Israel’s foreign minister, Defense Minister Shaul Mofaz calls for an Israeli pullout from the Gaza Strip regardless of Hamas’ performance in Palestinian National Authority elections in July. Mofaz says the departure will be a “complex, historic and heartbreaking move” that is critical to Israel’s future.

May 11: Palestinian National Authority President Mahmoud Abbas applauds Hamas’ plans to take part in July’s legislative elections, saying “everyone [will have to] accept the results with respect.”

May 11: A two-day South American-Arab summit concludes in Brazil with the Declaration of Brasilia, which criticizes U.S. sanctions against Syria and condemns terrorism. Additionally, it asserts the right of people “to resist foreign occupation in accordance with the principles of international legality,” seeks greater economic and political cooperation and calls for Israel to withdraw to pre-1967 borders.

May 11: In Iraq, suicide bombers stage five attacks in three cities, killing 61 people and injuring 124.

May 11: In Jalalabad, Afghanistan, security forces and U.S. troops open fire at hundreds of students rioting over reports of abuses of the Koran at Guantanamo Bay, Cuba. Two people are killed and 40 are injured.


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May 12: The Muslim Brotherhood says it will not nominate a presidential candidate for Egypt’s first multi-candidate presidential election.

May 12: A Russian nuclear official calls Tehran’s intentions to resume nuclear activities “legitimate,” saying a nuclear Iran does not pose a security threat because Tehran will use its uranium enrichment program peacefully and within International Atomic Energy Agency guidelines. The official adds that differences between U.S. and Russian attitudes on the issue are “narrowing.”

May 12: Complications caused by Israel’s plans to withdraw from the Gaza Strip and parts of the West Bank could postpone Palestinian National Authority elections set for July 17, senior Fatah officials say. Party leaders believe Fatah would stand a better chance if elections are postponed, but Hamas warns against a delay.

May 12: Iran reportedly backs away from threats to immediately resume uranium enrichment, likely in response to an ultimatum from Europe.

May 13: In Iran, officials say talks with the European Union still could defuse a confrontation over Iran’s nuclear program. Tehran plans to continue nego-tiations but says Iran cannot overlook its own energy needs.

May 13: The Palestinian National Authority says legislative elections will be held as planned in July, despite calls for a delay.

May 13: Iran will acquire the technological capability to fashion a nuclear bomb within six to nine months, Israeli Foreign Minister Silvan Shalom says.

May 13: Hezbollah launches rockets against Israeli troop positions in the disputed Shebaa Farms region bordering Lebanon. Israel responds with air raids and tank and artillery fire, reportedly destroying four Hezbollah bases. The U.S. State Department calls for a cessation of violence to keep from de-railing plans for Lebanese elections May 29 and says all Lebanese militias — including Hezbollah — should disarm.

May 14: Israeli Prime Minister Ariel Sharon pledges no further retaliation against Lebanon following rockets attacks by Hezbollah a day earlier.

May 14: The U.S. military ends Operation Matador in western Iraq. During the week-long operation, an insurgent base was “neutralized,” 125 militants were killed and 39 with “intelligence value” captured. On the U.S. side, nine Marines were killed and 40 injured.


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May 15: In the United States, Newsweek magazine says a May 9 report about desecration of the Koran at Guantanamo Bay, Cuba, is inaccurate.

May 15: Muslim Brotherhood leader Mohamed Mahdi Akef says the organization might field a candidate in Egypt’s presidential elections.

May 15: Britain’s Sunday Times reports that al Qaeda in Iraq leader Abu Musab al-Zarqawi was injured and treated at an Iraqi hospital on May 11.

May 15: Reports emerge in the United Kingdom that Qatar pays al Qaeda several million dollars in protection money every year — a deal allegedly struck in early 2003, just before the Iraq war.

May 16: In Iraq, Shiite leader Muqtada al-Sadr makes a rare public announcement, urging his followers to exercise restraint in fighting U.S. troops and forbidding any action targeting unarmed civilians.

May 16: Israeli police say they have discovered a Jewish extremist plot to wreak chaos in the Middle East and halt plans for a Gaza pullout by firing a missile into the Dome of the Rock, Islam’s third-holiest shrine. Israel’s justice minister says there will be no indictment, since the plotters had second thoughts before their arrests and there is no evidence they carried out any part of the plan.

May 16: Israel announces plans to expand its West Bank separation barrier to encompass the Maale Adumim settlement, which has 30,000 residents, and cut off Palestinians from Jerusalem.

May 17: Palestinian National Authority President Mahmoud Abbas says Hamas needs to be part of the Palestinian political process to stem the need for armed confrontations.

May 17: Pakistani President Gen. Pervez Musharraf says he will seek another term in office when the current one expires in 2007. The government does not say whether Musharraf would keep his position as army chief when he seeks re-election.

May 17: Officials from Egypt’s three main opposition groups — the Wafd, the Tagammu and the Nasserist parties — and the banned Muslim Brotherhood say they plan to boycott a referendum in May, when voters will


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decide whether to allow the country’s first competitive presidential elections. The opposition groups say referendum rules will benefit President Hosni Mubarak’s National Democratic Party.

May 18: Iran says it might delay resuming its nuclear development activities for several weeks if talks with the European Union are positive but denies any connection between this move and the presidential election set for June 17.

May 18: Palestinian lawmakers approve legislation — which probably will be vetoed by President Mahmoud Abbas — that would allow two-thirds of Parliament to be chosen through district voting. Abbas would prefer that all lawmakers be elected from party lists; others fear that system would favor Abbas’ own Fatah party over Hamas, which enjoys increasing popular support.

May 18: Palestinian National Authority President Mahmoud Abbas meets with Chinese President Hu Jintao and Prime Minister Wen Jiabao on the final day of his two-day visit to Beijing.

May 19: In Iran, officials propose that Russia should have the task of enriching Iranian-converted uranium as a compromise to help resolve Tehran’s nuclear dispute with the European Union; Brussels opposes the suggestion.

May 19: Afghan Foreign Minister Abdullah Abdullah rejects suggestions that former Taliban leader Mullah Mohammed Omar and guerrilla leader Gulbuddin Hekmatyar should receive amnesty if they cooperate with the government and disarm, citing links each has to al Qaeda.

May 19: A Palestinian National Authority court reverses municipal election results in Beit Lahia, in north Gaza, that gave eight council seats to Hamas and seven to Fatah. The ruling, which invalidates Hamas victories in five of 42 polling stations, follows a similar move in the southern town of Rafah a day earlier.

May 20: Cartel president and Kuwaiti Oil Minister Sheikh Ahmad Fahd al-Sabah says members of the Organization of the Petroleum Exporting Countries will continue to produce oil at near-record levels (currently at 30.3 million barrels per day), despite a fall in crude prices, to meet world demand.


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May 20: Despite renewed violence in the Gaza Strip, Palestinian elections will begin as scheduled July 17, Palestinian National Authority President Mahmoud Abbas says.

May 20: Pakistani Foreign Minister Khurshid Kasuri says Osama bin Laden is alive but that his network is paralyzed. Without revealing intelligence on bin Laden’s location, Kasuri says the al Qaeda leader is on the run with a small group of people.

May 21: An Iranian exile claims, and his statements are confirmed by a senior diplomat in Tehran, that Iran is smuggling sensitive, dual-use graphite and a graphite compound in violation of international trade laws.

May 21: Hamas will halt mortar and rocket attacks against Jewish settlements in the Gaza Strip in efforts to preserve a new truce negotiated by the Palestinian Interior Ministry and Hamas on May 18.

May 22: The Washington Post reports that U.S. military commanders have prepared plans to consolidate troops in Iraq into four large air bases, down from the 100-plus posts now occupied by international forces. Timing of the move depends on the security situation in Iraq and other factors.

May 23: Officials from Saudi Arabia visit Moscow to discuss the launch of six Saudi satellites in 2005 with Russian Dnepr rockets, which have been used to launch Saudi satellites from Baikonur.

May 23: Former Lebanese Prime Minister Michel Aoun announces plans to seek a parliamentary seat in elections beginning May 29.

May 23: U.S. and Iraqi soldiers arrest approximately 285 alleged insurgents in Baghdad in the war’s largest military operation to date. The raid is intended to halt a recent increase in car bomb attacks.

May 23: A delegation led by Mustafa Buhairi, a deputy to Egyptian intelligence chief Omar Suleiman, visits Gaza to help resolve a disputebetween Fatah and Hamas over local election results.

May 23: Syria “severed all links” with the U.S. military and CIA because the Bush administration decided “to escalate the situation” with Damascus, despite its cooperation against Iraqi insurgents, Syria’s ambassador to the United States says.


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May 23: Plans for a summit of North African states are postponed after Moroccan King Mohammed VI withdraws amid a tiff with Algeria related to Western Sahara.

May 25: Calls to delay the July 17 Palestinian National Authority elections continue, this time over an unresolved dispute concerning proposed voting law reforms. May 25: Iran and the European Union agree to continue their search for a compromise over the nuclear issue, hoping to reach a deal by the end of July.

May 25: The U.S. military announces the capture in Balad of Mullah Kamel al-Aswadi, an aide to al Qaeda in Iraq leader Abu Musab al-Zarqawi.

May 26: Iraqi Interior Minister Bayan Jabor confirms Internet reports that al Qaeda in Iraq leader Abu Musab al-Zarqawi is wounded but declines to reveal the source of the intelligence.

May 26: Iraqi Defense Minister Sadoun al-Dulaimi announces plans for the largest anti-insurgent operation to date by Iraqi forces. Some 40,000 troops are expected to deploy in and around Baghdad, creating a cordon around the capital and conducting sweeps in seven parts of the city. The operation is to be the first phase of a nationwide crackdown intended to give government forces an offensive, rather than defensive, posture against insurgents.

May 26: In Egypt, a referendum on key election reforms passes with 83 percent of the vote.

May 28: Pakistani President Gen. Pervez Musharraf warns that pre-emptive military action against Iran will result in colossal destruction and greater unrest within the Muslim world but notes his belief that Tehran seeks to weaponize nuclear technology.

May 28: Rifaat al Assad, the exiled brother of former Syrian President Hafez al Assad, says he wants to return home to oust his nephew’s authoritarian regime and usher in political and economic reforms, including reconciliation with the United States, but that he fears assassination. The 67-year old exile also says President Bashar al Assad does not have complete control of the government in Damascus.


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May 29: Some 40,000 Iraqi troops, supported by U.S. units, launch Operation Lightning in Baghdad, targeting insurgent strongholds.

May 30: Saadeddin al-Hariri, the son of slain former Lebanese Prime Minister Rafik al-Hariri, sweeps the first round of Lebanon’s elections. Boycotts by various parties resulted in voter turnout of only 27 percent, but U.N. observers consider the elections successful.

May 30: Israeli Prime Minister Ariel Sharon plans to meet with Palestinian National Authority President Mahmoud Abbas in Jerusalem to finalize coordination on the Israeli withdrawal from the Gaza Strip and some parts of the West Bank. The Israeli government seeks assurances that the vacated areas will not fall under the influence of radical groups such as Hamas.

May 30: The Israeli army lobs missiles at a rocket launcher operated by Palestinian Islamic Jihad (PIJ) at a refugee camp in the Gaza Strip, wounding three people. The missiles were fired after PIJ members fired rockets at an Israeli village just outside Gaza.

May 31: Hamas says it will not participate in the repeat of elections in some Gaza Strip towns June 1 and calls on followers to boycott the elections. Hamas earlier said it would consider running in the new elections if its candidates were given enough time to prepare.

May 31: Palestinian groups denounce Israel’s May 30 attack in the Gaza Strip and warn that the violence threatens to destabilize the peace. The Palestinian National Authority (PNA) and Fatah call for international help in maintaining a cease-fire, but Hamas rejects PNA President Mahmoud Abbas’ calls to renounce violence.

May 31: Outgoing Defense Forces Chief Lt. Gen. Moshe Yaalon says Israel could defend its territory from Arab neighbors even after withdrawing from the Golan Heights. Some Likud members criticize the statements and say Yaalon is trying to advance his own political career.

May 31: Speaking anonymously, a U.S. official says an audio recording of Iraqi insurgent leader Abu Musab al-Zarqawi has been authenticated. The audiotape, discovered May 30, specifically addresses Osama bin Laden and assures the al Qaeda leader that al-Zarqawi’s wounds are only minor.


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J u n e a n d B e y o n d

May 29-June 1: The World Accounting Summit to meet in Dubai to discuss uniform accounting standards.

June 1: Mandatory re-polling in certain Gaza/West Bank municipalities following disputes over initial round of elections.

June 3: Kashmiri separatists to meet with government officials in Islamabad, Pakistan.

June 4: Gulf Cooperation Council customs union to vote on whether to allow free trade agreements between Persian Gulf states and the United States.

June 5-7: Indian petroleum minister in Pakistan to discuss Indian-Iranian pipeline.

June 7: Palestinian National Authority President Mahmoud Abbas and Israeli Prime Minister Ariel Sharon tentatively scheduled to meet to discuss the Palestinian peace process.

June 8: Pakistan National Security Council to meet in Islamabad.

June 8: Turkish Prime Minister Recep Tayyip Erdogan to meet with U.S. President George W. Bush in Washington, D.C.

June 10: Darfur peace talks to resume in Nigeria.

June 11-13: Indian petroleum minister to travel to Iran to discuss oil and gas sales to India.

June 15-16: The G-77 and China Second South Summit scheduled to be held in Doha, Qatar.

June 22: EU and United States co-sponsor an international conference on Iraq in Brussels, Belgium.


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TBD: • Iran and Kuwait may hold talks over energy resources. • Pakistani President Gen. Pervez Musharraf might visit Qatar to discuss liquefied natural gas pipeline to Pakistan. • World Trade Organization could vote on allowing Iranian membership. • Baath Party Congress could be held in Syria. • Chinese Foreign Minister Li Zhaoxing planning to tour Middle East. • Free trade agreement talks could be held between United States and United Arab Emirates. • North Korean trade minister to visit Yemen for discussions on economic and trade cooperation.

C h a n g e s

IraqAbid Mutlak al-Juburi, a Sunni from Kirkuk, was appointed one of three deputy prime ministers in May — joining Rowsch Shaways, a Kurd, and Ahmed Chalabi, a Shi’i, who were appointed in April. Al-Juburi, who served as a major-general in Saddam Hussein’s army, was applauded for his military prowess in the Iran-Iraq war and later became dean of Iraq’s Military Academy. He holds degrees in military engineering and law.

Sadoun al-Dulaimi, a Sunni from Ar Ramadi, was appointed defense minister by the new Iraqi government in May. Al-Dulaimi was an officer in Saddam Hussein’s General Security Directorate. After being accused of taking part in a failed assassination plot against Hussein in the late 1980s, he fled to Britain and earned a doctorate in socio-psychology. He joined the Iraqi opposition in 1990 and returned to Iraq in 2003 to run the Center for Research and Strategic Studies. New Oil Minister Ibrahim Bahr al-Uloum, the son of a prominent opposition Shiite cleric, served in the same position under the transitional, U.S.-backed Iraqi Governing Council. He holds a doctorate in petroleum engineering from the University of New Mexico. New Minister of Electricity Muhsin (or Mohsen) Shlash, a Shia, holds a doctorate in power system analysis and control from the University of Manchester’s Institute of Science and Technology. He also is a member of the Ontario Union of Professional Engineers.


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Narmin Othman, previously the minister of education in Kurdish Iraq, was named in May to head the environment and human rights portfolios. Othman also has served as supervisor of Kurdish Iraq’s Ministry of Justice and as the Kurdish Minister of Social Affairs. A former teacher, Othman also managed Save the Children in Erbil.

Usama Abdul Aziz al-Najafi, a Sunni from Mosul who has directed the construction of several power stations in Iraq, was named minister of industry and minerals in May, taking over a vacant position. Al-Najafi holds a bachelor’s in electrical engineering.

AfghanistanU.S. Lt. Gen. Karl Eikenberry assumed command of coalition forces in Afghanistan from U.S. Gen. David Barno. Eikenberry previously was director of Strategic Planning and Policy for U.S. Pacific Command at Camp H.M. Smith, Hawaii. He also served in Korea, the United States, Europe, China (as defense attaché at the U.S. Embassy) and in Afghanistan. A graduate of the U.S. Military Academy, Eikenberry holds a master’s in East Asian studies from Harvard University and a master’s in political science from Stanford University. He was a National Security Fellow at Harvard’s Kennedy School of Government. He also earned an advanced degree in Chinese history from Nanjing University and an interpreter’s certificate in Mandarin Chinese from the British Foreign Commonwealth Office.


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