OMAN FM ON IRAN, IRAQ, GCC AND PALESTINE

C O N F I D E N T I A L SECTION 01 OF 02 MUSCAT 000002

SIPDIS

STATE FOR NEA, NEA/I, NEA/ARPI
STATE PASS USTR FOR C. NOVELLI, JBUNTIN
NSC FOR DNSA HADLEY, PTHEROUX

E.O. 12958: DECL: 12/30/2014
TAGS: PREL PINS ETRD XF MU
SUBJECT: OMAN FM ON IRAN, IRAQ, GCC AND PALESTINE

REF: A. MUSCAT 2268

B. MANAMA 1885

Classified By: Ambassador Richard L. Baltimore III.
Reason: 1.4 (b, d).

--------------
Summary
--------------


1. (C) FM Yusuf bin Alawi shared his views with the
Ambassador on Iran's relations with the region, noting his
interest in visiting Tehran but ruling out a state visit by
the Sultan. He is optimistic that Qatar will take positive
action to rein in abuses by the Al Jazeera network, and is
likewise hopeful that good news from Palestine may soon draw
attention away from Iraq. Oman is encouraged by interim
Palestinian leader Abbas' assessment of the situation in the
territories, and with the improved transparency of the PA.
Bin Alawi was expansive on what he views as Saudi Arabia's
disastrous handling of its relations with GCC states over
free trade agreements and other matters. He sees Iran as
doing a better job engaging with the international community
than Riyadh. End summary.


2. (C) On December 27, Oman's Minister Responsible for
Foreign Affairs Yusuf bin Alawi (YBA) received the Ambassador
on short notice to discuss a number of demarches (septels),
which turned into a 70-minute meeting reviewing a number of
key regional issues. Ref A reported the Minister's
particular concerns over the emergency Arab League
ministerial scheduled for the first week of January.

--------------
Iran
--------------


3. (C) YBA appreciated recent statements by the Secretary
that the USG would seek diplomatic means to resolve its
disputes with Iran, saying that Oman was prepared to help in
whatever way it could. Both he and the Sultan were offering
"advice" (NFI) to Tehran. Offering no details on the
Sultan's letter to Pres. Khatami (hand-delivered November 21
by the Sultan's special envoy for Iranian affairs, Abdulaziz
al-Rowas),YBA was firm in saying that the Sultan had no
plans to return the state visit Khatami paid to Oman in early
October. Bin Alawi, on the other hand, has thoughts of
visiting Iran but no definite dates. Should YBA travel, he
said he would like to call on Ayatollah Khamenei in addition
to the "usual suspects" (the President, Foreign Minister,
Majles Speaker),and his old interlocutor Rafsanjani.
Calling on the Ayatollah, he said, was not typically done by
foreign officials, but Bin Alawi said he understood that the
Supreme Leader was angry at being "neglected" by Tehran's
guests. (Note: The Minister recounted having nearly met
Khamenei during the Iran-Iraq war years when the latter was
president, but that Khamenei had moved to a location too near
the front lines for YBA's taste. End note.) YBA has not
traveled to Iran in over a year.


4. (C) YBA said Iran is currently preoccupied with its IAEA
issues and Iraq. He noted the porous borders between Iran
and Iraq, and the illicit smuggling between the two states
that originated in the Iran-Iraq war years and that has
intensified in the current situation in view of the lucrative
opportunities. He sees a degree of Iranian involvement in
Iraqi affairs as unavoidable, but manageable if Iran is not
"backed into a corner." In fact, he thinks Tehran is either
incapable or afraid of intervening to control the border
areas completely. YBA sees factions within Iran as split
between backing al-Sadr or al-Hakim, but feels Iran must be
aware of the fact that Iraqi Shia are determined to wrest
dominance in Shia religious affairs away from Qom and restore
it to Najaf. The Minister is emphatic in noting that Iraq's
Shia are in no way "dominated" by Iran.

--------------
Al Jazeera
--------------


5. (C) The Ambassador noted DNSA Hadley's appreciation of his
chat with YBA December 5 (ref B),and sought the Minister's
further views on how to address the Al Jazeera problem. YBA
said he understood Qatar had set up a working group to try to
resolve abuses, and that he planned to raise the matter
specifically with the Qataris when he travels to Doha January

8. Acknowledging that Al Jazeera crosses the boundaries
between free speech and promoting extremism, YBA was
optimistic that Qatar will "do something." He was likewise
hopeful that the positive developments coming out of
Palestine would give Al Jazeera some good news upon which to
focus, shifting some of the spotlight away from Iraq.
--------------
Palestine
--------------

6. (C) YBA noted that the Sultan had given USD 1 million to
Palestine to assist with the election process. He said Oman
is greatly encouraged by Abbas, Qorei, and Finance Minister
Fayyad for their improved transparency, bringing about a "new
day" compared to the Arafat years. Abbas, who visited Muscat
December 18-19, gave the Sultan an encouraging readout on his
ability to keep Hamas within acceptable norms of behavior as
well as to unify Palestine's disparate security services.

--------------
Arab League Issues
--------------


7. (C) YBA's concerns over the upcoming Emergency Arab League
ministerial were reported ref A. He further noted that Iraq
will dominate discussions primarily because "there is nothing
right now" to say about Palestine. While Oman stands firmly
behind the January 30 Iraq election date, YBA continued to
express opposition to any notion of providing Arab forces to
Iraq. He said Iraq is gradually improving with each passing
day, and what it most needs now is a greater Iraqi police
presence on the streets - not more armies. The sooner
Coalition forces melt into the background, the greater
legitimacy the Iraqi government will enjoy.

--------------
Saudi Arabia's Disastrous GCC Policies
--------------


8. (C) Asked about the December 20 GCC Summit and Saudi
Arabia's unhappiness with the USG pursuit of bilateral free
trade agreements (FTAs),bin Alawi admitted that he missed
Saudi FM Saud al-Faisal's speech at the ministerial. YBA is
nevertheless of the view that Saudi Arabia's dispute is more
with the U.S. than with Bahrain or other potential FTA
partners. At least in the past, YBA said in reference to the
1990's, the view in the region was that being a squeaky wheel
was the best way to win attention from Washington. Such is
Riyadh's tactic now, he believes. He also believes there may
be positive references in the U.S.-Bahrain FTA to Iran (NFI),
that may be provoking Riyadh's ire. Bin Alawi said Saudi
Arabia nevertheless badly misplayed its hand with the other
GCC states and has now isolated itself on the FTA issue "five
against one," made worse by Riyadh's blockage of a gas
pipeline project between Kuwait and Qatar. Riyadh's approach
has backfired so badly, the Minister said, that Bahrain and
Qatar are actively considering construction of a new bridge
simply to bypass the need to enter Saudi territory. An even
more ambitious project to build a bridge between the UAE and
Qatar was motivated by the same purpose of cementing trade
ties among the non-Saudi members of the GCC. The Minister
observed that Iran's stock with the international community
appears to be in even better shape than Saudi Arabia's.


9. (C) Bin Alawi observed that the Al Saud are restricting
debate on foreign policy issues to the top family circles,
which only serves to stifle dialogue. YBA had previously
opined that FM Saud al-Faisal did not agree with Riyadh's
stand on reform at the IISS Forum in early December. He
recounted having questioned his Saudi colleague on why the
Saudi National Dialogue effort was not headed by a royal
family member, since royals could rise above petty tribal
disputes likely to be raised in such dialogues. Despite the
fact that Oman's ruling dynasty has successfully employed
that tactic for over two centuries, YBA said Saud replied
"that doesn't work in Saudi Arabia." Bin Alawi observes that
the Saudi government is now trying to buy off a delay in
critical reform decisions by distributing more of the current
oil profit windfall among the unemployed. Not only does that
tactic merely delay difficult decisions, but it also worsens
the situation since those support payments will be viewed as
an entitlement by the time oil prices eventually decline.
BALTIMORE