SCENE SETTER FOR VISIT TO UAE BY U/S BURNS AND U/S

S E C R E T SECTION 01 OF 05 ABU DHABI 001292

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NOFORN

STATE FOR P STAFFER HMUSTAFA, NEA/FO, NEA/ARP, PM/FO, S/P
TREASURY FOR U/S LEVEY
DOD/OSD FOR A/S LONG, DAS KIMMITT, KELSO, QUINN, ANDERSON
CENTCOM FOR CCJ5 - MG FINDLEY, REYES, RODRIGUEZ
NSC FOR NRAMCHAND, EABRAMS
JOINT STAFF FOR MG BREEDLOVE

E.O. 12958: DECL: 08/01/2017
TAGS: PREL PTER PARM MOPS MARR IR LE AE
SUBJECT: SCENE SETTER FOR VISIT TO UAE BY U/S BURNS AND U/S
LEVEY

REF: A. ABU DHABI 1286

B. ABU DHABI 1273

Classified By: Ambassador Michele J. Sison
for reasons 1.4 (b) and (d).

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SUMMARY
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1. (S) U/S Burns and U/S Levey: Embassy Abu Dhabi looks
forward to your upcoming visit to the UAE. Your meetings
with UAE's leaders come at a time when their attention is
focused on U.S. policy in the Middle East and what this might
mean to the UAE in the context of the violence in Iraq and
Iran's aggressive regional posture. While the U.S. has long
enjoyed a strong defense cooperation relationship with the
UAE, the State-DOD-NSC-led Gulf Security Dialogue (GSD) has
provided an opportunity to deepen that relationship. The UAE
delivers strong support in the war on terror and has
cooperated with us in Afghanistan, Iraq, Lebanon, and with
security assistance to the Palestinians. UAE also provides
critical basing and over-flight for U.S. reconnaissance and
refueling assets as well as naval logistics support.


2. (S/NF) While the UAE has offered political support for
Iraq and identifies the first priority for the region as
Iraqi stability, the UAE's (all-Sunni) leadership has
exhibited a hardened attitude toward Prime Minister al
Maliki, perceiving him as subservient to Iran and incapable
of moving beyond sectarian bias to lead a unified Iraq. The
UAE has in the past favored former Prime Minister Iyad
Allawi, played an active role in the "Group of Six," and has
stalled on its commitment to Iraqi debt relief in order to
avoid al Maliki claiming any credit. The UAE has expressed
concern over the situation in Baghdad, the failure of the al
Maliki government to improve overall security in the country,
and has privately castigated Iran for playing a "spoiler"
role in Iraq. This scene setter should be read in
conjunction with "Potential Arms Sales: Strengthening UAE
Defensive Capabilities" (Ref A). End Summary.


3. (S) We offer the following background on issues facing the
UAE and our bilateral relationship:


I. U.S. Defense Interests (para 4)
II. Iraq (paras 5-7)
III. Iran (paras 8-11)
IV. Gulf Security Dialogue (paras 12-13)

V. Counterproliferation/Financial Isolation (paras 14-16)
VI. Other Regional Issues: Afghanistan, Lebanon, the
Palestinians (paras 17-21)
VII. UAE Interlocutors (para 22)

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I. U.S. DEFENSE INTERESTS
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4. (S/NF) As will be highlighted during the August 2 visit by
Secretary of Defense Gates to Abu Dhabi, the UAE's

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contribution to U.S. defense interests and regional stability
has been extensive and enduring. The ports of Jebel Ali and
Fujairah are vital to U.S. Navy interdiction operations,
re-supply and sustainment, and combat support efforts across
the region. Jebel Ali has hosted more port visits for each
of the past three years than any other port outside the
United States. Quantitative measures of UAE support include:

--- 1,300 USAF personnel at Al Dhafra Air Base;
--- a vigorous training schedule at the
multilateral Gulf Air Warfare Center at Al Dhafra;
--- the F-16 Block 60 program;
--- approximately 500 port visits last year;
--- more than 150,000 U.S. servicemen and women
enjoying liberty annually in the UAE; and
--- 250 UAE Special Operations forces serving with the
Coalition in Afghanistan.


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You might again express appreciation for this outstanding
partnership.

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II. IRAQ -- UAE LACK OF CONFIDENCE
IN PM AL MALIKI
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5. (S) In recent months there has been a definite hardening
of the UAE leadership's attitudes toward Prime Minister al
Maliki, who is viewed by the Emiratis as little more than an
"Iranian puppet." The UAE leadership has told us they do not
see "much hope in investing in Iraq or much light on the
horizon with al Maliki and his government." UAE leaders
perceive him as biased and incapable of leading a
non-sectarian, unified Iraq. Earlier UAE commitments to
forgive most of the $3.5 billion in Iraqi debt the UAE holds
remain unfulfilled, with the UAE leadership asking why it
should give al Maliki a chance to claim credit for debt
relief. (Note: Although the UAE has not forgiven the debt,
it is not collecting payments on it. End Note.)


6. (S) Meanwhile, the UAE has been engaged in regional
efforts to facilitate reconciliation between Sunni and Shi'a
forces. The UAEG has frequently expressed alarm regarding
Iranian influence in Iraq, and has made attempts to reach out
to moderate Shi'a to encourage their engagement in the Iraqi
political process independently of Iran. The UAE values and
seeks reassurance of continued close consultation on U.S.
plans and strategy involving Iraq and opposes any precipitous
U.S. withdrawal from Iraq.


7. (S) While al Maliki has not visited the UAE in a year,
Iraqi National Security Adviser Muwaffaq Al Rubaie was in Abu
Dhabi on June 28, briefing the UAE National Security Advisor
and Foreign Minister on security developments in Iraq.
Reportedly, Al Rubaie was told that the Group of Six nations
(UAE, Turkey, Jordan, Egypt, Saudi Arabia, Kuwait) would
invite Iraq's security chief to its next meeting. According
to the UAE leadership, during this visit Al Rubaie took the
attitude that UAE outreach actions in Iraq were hostile and
also indirectly justified the Iranian influence. Al Rubaie
reportedly focused his efforts on urging the Emiratis not to
support Iraqi Sunnis.

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III. IRAN - UAE BALANCING PRIVATE
RHETORIC WITH PUBLIC CAUTION
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8. (S) The UAE's political relations with Iran have been
strained over Iran's nuclear aspirations, its interference in
Iraq's internal affairs, and Iran's ongoing 36-year
occupation of three disputed islands )- Abu Musa and the
Greater and Lesser Tunbs. The UAE has repeatedly asked for
more detail on U.S. plans vis--vis Iran, as it fears being
caught in the cross-fire if Iran is provoked or attacked.
The UAE may also be concerned that as talks between the U.S.
and Iran continue, the U.S. may "cut a deal" with Iran
without first consulting the GCC nations.


9. (S) In meetings with us, UAE leaders have called for
"action sooner rather than later against Iran" and privately
speak in caustic terms about Ahmadinejad. Abu Dhabi Crown
Prince Mohammed bin Zayed Al Nahyan (MbZ) has opined that any
attempt at dialogue by Iran should be regarded as a pure
faade, but at the same time he has emphasized that the UAE
must think carefully about risks in the region and about its
own future. The leadership has told us that they are not in
a position to sacrifice $16 billion in annual trade with
Iran, while realizing that this same neighbor and major
trading partner is also a potential threat.


10. (S) It has been estimated that up to 400,000 Iranians
reside in the UAE (mostly in Dubai running various
businesses) while many prominent Emirati merchant families
trace their roots to Iran. Thus, cultural ties are historic
and strong. It is worth recalling that immediately after the

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May 10-12 visit of Vice President Cheney, Iranian President
Ahmadinejad made an official one-night stop in Abu Dhabi,
where he was received with full honors as a Head of State,
and then gave a defiant anti-U.S. speech at a Dubai sports
arena to a mostly Iranian audience. The timing of
Ahmadinejad's visit was perceived by many Emiratis as a
reminder of Iran's position as a major power in the Gulf and
perhaps a warning to them of the need to maintain "balanced"
relationships.


11. (S) However much they may assist our mission in the
region, the Emiratis are conscious of being wealthy,
vulnerable players in a rough and unforgiving neighborhood
that has the potential to boil over with Islamic extremist
fervor which would directly threaten their way of life and
the diverse, multi-national business-friendly atmosphere that
characterizes the Emirates. The UAE leadership has
consistently pursued a cautious, non-confrontational public
posture towards Iran. They are reluctant to make public
statements about Iran, often citing a "Chernobyl-like
accident" as the basis of the threat from Iran's nuclear
program rather than the possibility of launching or
responding to an attack. In the past the UAE has been
hesitant to participate in Gulf military exercises. The UAE
did, however, send observers to Exercise Leading Edge 07 in
October 2006 in the Gulf, which had a Proliferation Security
Initiative theme. Similarly, the decision to host Exercise
Eagle Resolve 2008, with a Theater Air and Missile Defense
theme, should be seen as a praiseworthy step.

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IV. GULF SECURITY DIALOGUE
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12. (S) In Ref A, we provided an overview of what the UAE
leadership seeks in order to enhance its defensive
capabilities. While the UAE acquisition priorities expressed
do not exactly match what may be achievable from our
perspective, the UAEG is eager to obtain an overarching Air
and Missile Defense system at a cost of $8-12 billion as soon
as possible. The UAE currently has over $3.2 billion in
Foreign Military Sales cases and another $8.5 billion plus in
direct commercial sales in the Block 60 F-16 program. Since
the May 2007 Gulf Security Dialogue and earlier meetings of
the Joint Military Committee working groups and Air and
Missile Defense working group, we have seen progress in our
bilateral relationship in the areas of defense cooperation
and regional security.


13. (S) The UAEG has indicated strong interest in purchasing
12 Patriot PAC-3/GEM-T anti-ballistic missile batteries and
other missile defense systems in order to create an
overarching air and missile defense architecture. The UAE
has also expressed interest in Surface Launched Advanced
Medium Range Air-to-Air Missile and Theater High Altitude Air
Defense missile system. In addition, both Boeing and
Northrop-Grumman are providing Requests for Information on an
Airborne Early Warning and Control aircraft later this year.

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V. COOPERATION ON COUNTERPROLIFERATION
AND FINANCIAL ISOLATION ISSUES
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14. (S) We should continue to impress upon the UAEG the
importance of tight controls on materials of proliferation
concern -) including dual-use items. The UAE has proven
cooperative in stopping shipments to Iran as long as it can
make a tie to UNSCRs 1737 and 1747. It continues to hold two
containers shipped from China to Iran in May, but has asked
for USG assistance with the Chinese in returning these
shipments.


15. (C) On the financial side, the UAE froze the assets of
the Iranian Bank Sepah within four days of the UN resolution.
According to the UAE Central Bank and the UAE's report to
the UN, the bulk of the assets were trade finance, which in
this case would pay non-Iranian banks for goods ordered prior

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to the imposition of sanctions. On June 25, the UAE notified
the 1737 Committee that it intended to unfreeze trade finance
debit accounts under the name of Bank Sepah owed to six UAE
banks. We have requested that the UAE consider delaying or
withdrawing this notification and provide more information on
the nature of the transactions. On August 1, the Central
Bank Governor told Ambassador that the accounts were still
frozen, but that his intention was still to release
"innocent" accounts of which the funds were not going to
Sepah (septel). Central Bank officials confirmed that they
were preparing a report to the UAE MFA explaining the issue
in response to our request and the UN's request for
information.


16. (S) It is unclear how much the UAE has done to isolate
Iran financially as requested by the USG. The Abu Dhabi
Investment Authority (ADIA) does not invest in Iran, but does
use outside financial institutions and external fund managers
to manage some of its assets. At the request of UAE Foreign
Minister, Sheikh Abdullah bin Zayed Al-Nahyan (AbZ),Treasury
created a list of international financial institutions
dealing with Iran, which we then passed to AbZ.


17. (S) We continue our largely successful interagency
cooperation efforts with the UAE through the
counterproliferation Task Force (CTF) and the Joint Terrorism
Finance Coordinating Committee (JTFCC). In June, we held a
CTF Working group to discuss the UAE's draft export control
law. The law has been passed by the UAE's Federal National
Council, but is still awaiting ratification by the rulers of
the seven emirates before it can be promulgated into law. In
April, we held the 4th JTFCC and discussed proliferation
finance, and issues such as Somali/Taliban financing,
charities regulation, and operational training to target bulk
cash courier smuggling.

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VI. OTHER REGIONAL ISSUES:
AFGHANISTAN - UAE SPECIAL OPS TROOPS
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18. (S) While the UAE contributes 250 Special Operations
troops to the Coalition effort in Afghanistan (with a
potential increase of 50),it has not yet publicly
acknowledged this participation in Operation Enduring
Freedom. One of MbZ's oft-stated interests in sending
Emirati Special Ops troops to Afghanistan is to get his
military forces "bloodied" and battle-hardened so they may
effectively confront imported or domestic extremism. The UAE
Special Operations Command estimates that it has expended
$10.5 million in humanitarian assistance supporting Combined
Joint Special Operations Task Force ) Afghanistan during
Operation Enduring Freedom. The UAE pursues Afghanistan
reconstruction aid with an emphasis on road networks,
mosques, medical facilities and schools and has made efforts
at political mediation between Pakistan and Afghanistan. In
January 2007 LTG Eikenberry escorted Afghan Armed Forces
Chief of Staff General Bismillah Mohammadi Khan to Abu Dhabi
in a bid to deepen direct engagement between the UAE and
Afghanistan. The UAE Armed Forces Chief of Staff declared
himself willing to help in any way possible, including
training Afghan troops. UAE subsequently disbursed another
$30 million in general assistance and is renovating two
runways in Afghanistan for military use. During the June
visit of Afghan Defense Minister Wardak to Abu Dhabi, MbZ
agreed to donate nine Mi-17 helicopters to Afghanistan.

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LEBANON (AND SYRIA)
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19. (S) The UAEG provides significant humanitarian and
security assistance to Lebanon and views Hezbollah and other
Islamic extremists as hostile to its interests -) although
it would hesitate to make a public statement to that effect.
The UAE has been at the forefront of reconstruction efforts
in Lebanon, continuing a longstanding de-mining operation,
and contributing resources for school construction and

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hospitals. UAE Air Force C-130s and helicopters have been
used in relief efforts. The UAE has also provided
UAE-manufactured pistols and ammunition to the LAF. The UAE
Foreign Minister recently had a conversation with Lebanese PM
Siniora on a proposal for a Muslim force for Lebanon (under
UN mandate).


20. (S) The UAE seeks to strengthen the Siniora government,
having delivered $300 million in assistance to Lebanon this
year, while also seeking engagement with other parties. UAE
President Sheikh Khalifa bin Zayed Al Nahyan and other senior
UAE officials paid a July 15-16 visit to Damascus, announcing
the donation of $10 million towards the support of Iraqi
refugees and $100 million to establish a hospital in
Damascus. The UAE has conveyed private frustration and
displeasure with Syrian meddling in Lebanon and has said it
would express its (and our) concern about foreign fighters
entering Iraq through Syria to the Syrian leadership. One
goal of Sheikh Khalifa's visit, according to AbZ, was to try
to persuade Syrian President Bashar Al Asad that he belongs
"with the Arabs" and that he should loosen his close ties to
Iran.

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PALESTINIAN ISSUES
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21. (S) The UAE has argued for the primacy of the Palestinian
problem in resolving various Middle East crises and would
like to see tangible progress on the Middle East Roadmap. It
would welcome the idea of a U.S.-sponsored peace conference
as well as a two-state solution and may have thoughts on the
question of timing and attendance. The UAE rejects the Hamas
agenda as fundamentally anathema to its own national
survival, and continues to support the Palestinian people
through more than $400 million in housing and humanitarian
assistance since 2000. MbZ and his brothers, Foreign
Minister Abdullah and National Security Advisor/State
Security Director Hazza, are in close contact with President
Mahmoud Abbas and Prime Minister Salam Fayyad. As the result
of the May 2007 visit of USSC General Dayton, the UAE
transferred $80 million to the Palestinian president. During
General Dayton's July 29 visit (Ref B),the UAE received our
request to talk to the Saudis about restarting the Arab
Quartet. The UAE has issued a public statement supporting
the choice of Tony Blair as the Quartet envoy. (Blair visited
the UAE on July 24.)

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VII. UAE INTERLOCUTORS
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22. (S) As always, Crown Prince MbZ will be eager to hear the
views of senior USG officials and to offer his views on
issues of regional security and stability. Prime
Minister/VP/Ruler of Dubai Sheikh Mohammed bin Rashid Al
Maktoum, we hear, will be out of the country. Governor of
the UAE Central Bank Sultan Nasser al Suweidi looks forward
to seeing you; we will confirm availability of Sheikh Ahmed
(Abu Dhabi Investment Authority) and Foreign Minister AbZ as
soon as possible.

SISON