SALEH ON TERRORISM, IRAQ, PEACE PROCESS, AND REFORM

C O N F I D E N T I A L SECTION 01 OF 02 SANAA 002095 SIPDIS E.O. 12958: DECL: 08/01/2015 TAGS: PREL PGOV EAID PTER KDEM KMCA KMPI KPAL IZ YM DEMARCHE SUBJECT: SALEH ON TERRORISM, IRAQ, PEACE PROCESS, AND REFORM REF: A. STATE 141247 ¶B. SANAA 1696 Classified By: DCM Nabeel Khoury for reasons 1.4 b and d. ¶1. (C) Summary. Ambassador met with President Saleh on August 1 to deliver ref A demarche for Arab League Capitals and discuss his November meeting with President Bush. Discussions focused on combating terrorism, the situation in Iraq, economic and democratic reforms, and Saleh's trip. News of King Fahd's death and postponement of the Arab League (AL) Summit reached Ambassador on his way into the meeting. End Summary. -------------- "We Don't Need a Summit to Condemn Terrorism" -------------- ¶2. (C) Assuming the Sharm al-Sheikh Summit would be postponed, Saleh commented that Fahd's death was a way for Arab leaders to "get out of it." The meeting was not well arranged, said the President, "It's purpose was to rehabilitate Sharm al-Sheikh after the attack, and most countries were sending only their Vice Presidents." (Note: Our understanding heading into the meeting was that Saleh would leave August 2 for Sharm to represent Yemen at the meeting. End Note). Ambassador replied that, in fact, it was an important Summit with regional issues on the agenda such as condemnation of terrorism, support for Iraqi political transition and the peace process. -------------- "As For Iraq...I Repeat that You are Stuck" -------------- ¶3. (C) "We condemn terrorism everyday without a summit," said Saleh, implying an official AL condemnation was perfunctory. "As for Iraq," the President continued, "I repeat, you are stuck and should disengage." Ambassador told Saleh that we share the same goal -- an independent and democratic Iraq free of foreign forces. A sudden U.S. withdrawal, however, would destabilize Iraq further and harm the political process. Pointing to pentagon plans to scale down the U.S. presence in Iraq during 2006, Saleh suggested that perhaps the U.S. was heeding his advice to withdraw to bases outside of cities and let Iraqis resolve their problems among themselves (ref B). "I'm not suggesting you withdraw completely," he explained, "just get out of the cities and stop fighting Iraqis and making more enemies." ¶4. (C) Ambassador underscored the U.S. commitment to helping Iraqis succeed, adding that a failure in Iraq would be a disaster not only for the U.S., but also for Yemen and the region. He pressed Saleh to respond to the ITG's appeal to Arab governments to halt the flow of foreign insurgents and terrorists to Iraq, asking him to step up ROYG efforts and cooperation with the USG in order to cut off the flow of foreign fighters from Yemen to Iraq. -------------- - Peace Process: "I Don't Want to Talk About it" -------------- - ¶5. (C) Having shared his comprehensive ideals for the peace process with Ambassador on June 16 (ref B),Saleh opted for brevity. "I have two points on the Palestinian-Israeli conflict," he said, "complete peace, complete withdrawal. Other than that, I don't want to talk about it in detail." Ambassador responded that Yemen's leadership should support the peace talks, pointing out that the Israeli withdrawal from Gaza is underway. -------------- Washington Trip -------------- ¶6. (C) Turning to his November meeting with President Bush, Saleh said he wanted the trip to be a success. He said he would present Ambassador with a detailed paper outlining Yemen's goals for the meeting in the next ten days. Ambassador agreed that both sides should be clear on agenda items for visit. He told Saleh that the U.S. focus would be on CT and security cooperation, as well as political and economic reforms. As for reforms, Ambassador continued, the stress will be the need for a serious and sustained ROYG attack on corruption. -------------- "The Government Will Reform or it Will Go!" -------------- ¶7. (C) Saleh thanked Ambassador for CDA's statement of support for ROYG economic reforms, issued during an outbreak of nationwide rioting in protest of the lifting of oil and gas subsidies (ref ). Saleh said oil subsidies had contributed to corruption and encouraged smuggling, citing examples of private companies making excess profits on oil products and large-scale diesel smuggling to Saudi Arabia and Somalia. "I expect the government to take effective measures to end this," said Saleh, if they don't I will dismiss the Cabinet by the end of the month!" -------------- Comment -------------- ¶8. (C) Slimmer than in June, and sporting a new haircut and impeccably tailored suit, Saleh appears to have had a makeover. He was also more focused and relaxed that usual. Saleh is speaking more openly with us about corruption of late, admitting the negative effect of petty corruption on government revenues and public welfare. He has yet to shift his attention from "petty" corruption to the real problem -- the grand scale corruption practiced by his senior officials. End Comment. Krajeski