DAS GRAY DISCUSSES ARAB ISSUES WITH MFA ASSISTANT

C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 001822

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E.O. 12958: DECL: 06/14/2017
TAGS: PREL PGOV KPAL EG IZ IR LY
SUBJECT: DAS GRAY DISCUSSES ARAB ISSUES WITH MFA ASSISTANT
MINISTER

Classified by Charge D'Affaires Stuart Jones for reasons 1.4
(b) and (d).

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Summary
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1. (C) During a June 13 meeting on regional topics with MFA
Assistant Minister for Arab Affairs Hany Khallaf, NEA Deputy
Assistant Secretary Gordon Gray discussed Egypt-Iraq
relations, Iran, Libya, and the situation in Gaza. Khallaf
said that Baghdad recently requested agrement from the GOE on
a new (unnamed) ambassadorial nominee for Cairo, the
assignment of whom would be linked to GOE action to name its
own envoy to Iraq. Debt "rescheduling," vice "forgiveness"
was more likely in the case of Iraqi debts, although an
official decision remains under consideration. USG help to
expand market opportunities in Iraq for Egyptian firms would
assist efforts to strengthen Egypt-Iraq ties. On Iran,
Khallaf counseled against U.S. military strikes, and said the
Arab League was preparing to engage Tehran via the Arab
Provisional Parliament based in Damascus. Egyptian-Iranian
ties remain "tough" - mired in mutual suspicions and
recriminations, despite recent steps to engage in talks via
respective foreign ministries. On Libya, Khallaf welcomed
improved U.S.-GOL ties, suggesting cultural exchanges as the
key to sustained improvements in bilateral relations.
Khallaf took on board Charge's request that the GOE publicly
condemn recent Hamas armed attacks on Fatah forces in Gaza.
End summary

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Iraq Issue
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2. (C) Asked about Egypt-Iraq relations, Khallaf told Gray
that Baghdad recently gave Cairo the name of an Ambassadorial
nominee, but linked action on the assignment to Cairo's
naming its own envoy to Baghdad. Khallaf did not reveal the
Iraqi candidate's name but denied reports that current Iraqi
Charge Saad Ridha was the individual. Khallaf said the GOE
was still considering who to name as its envoy to Baghdad,
adding that one option was to name an ambassador who will
remain in Cairo until the security situation permits
long-term residence in Baghdad. Khallaf noted that Cairo
would welcome "unpublicized" technical assistance from the
U.S. and Coalition forces to ensure the safety of its envoy
in the Green Zone.


3. (C) On the general state of Egyptian-Iraqi ties, Khallaf
said the GOE continued to support PM Maliki, as communicated
during the latter's late-April visit to Cairo, and during the
Sharm El Sheikh conferences in early May. Khallaf said the
GOE was looking "across the board" at ways to strengthen
bilateral ties, including in the security, cultural/media,
and commercial fields. The GOE, he said, six months ago
proposed to the Iraqi Charge in Cairo to send media experts
to Iraq to film the lives and stories of average Iraqis, in
order to familiarize Egyptians with what is happening in
Iraq. We think this can "give warmth" to the relationship,
and help educate people about Iraq.


4. (C) Khallaf said that an Egyptian presence in Iraq could
be increased if more commercial opportunities were available
for Egyptian firms, beyond the two major telecom ventures
there at present. The GOE is also looking to activate
ministerial joint committees dealing with security, human
resources, and commerce. Egypt is willing to send 500
farmers, for example, to work in the north of Iraq. On debt
relief, although still under review by various government
agencies, Khallaf doubted Egypt would forgive Iraq's debts,
but may be willing to reschedule them. Egypt would also
consider working with Jordan on refugee issues, within the
context of the three sub-working groups of the Iraq Neighbors
Group.

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Iran Issues
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5. (C) Khallaf questioned whether "rumors" of an impending
U.S. attack on Iran had merit, noting the dangers to the
region inherent in such a policy decision. Gray reviewed USG
policy toward Iran, as enunciated by the President and
Secretary Rice, seeking to assure Khallaf that the U.S. was

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focused on diplomacy, even though it would not remove the
military option from the table. Asked about Egypt's current
ties with Iran, Khallaf said the Arab League had recently
decided to engage the Iranians via the Provisional Arab
Parliament, based in Damascus. Cairo's ties with Tehran,
however, remained "tough" due mostly, he said, to security

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concerns. While at Egypt's request the GOI recently decided
to change the name of a prominent street in Tehran (named for
the assassin of President Sadat),Khallaf said they changed
the street name to something equally offensive. Khallaf did
not believe a fundamental shift in relations was imminent.

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Libyan Issues
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6. (C) Khallaf requested an update on U.S. policy toward
Libya, noting what he perceived was an overall positive
trajectory in Washington's relationship with Tripoli. Libya
was a tricky place, he commented, where the leadership
greatly appreciated flattery and a "nice" approach. Khallaf
(who served in Tripoli in his last posting as Egypt's
Ambassador) complimented U.S. educational and cultural
programs with the Libyans, saying these programs not only
helped recently to "smooth" some problems in the
relationship, but would also pay long-term dividends in the
future among the Libyan elite. The Libyan Ambassador to
Cairo, he said, was "unusually" sophisticated and urbane,
appreciative and understanding of Egypt's policy vis-a-vis
Israel and the Palestinians.

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Violence in Gaza
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7. (C) Turning to the latest surge in Gaza violence, the
Charge acknowledged Egypt's work to shore up a cease-fire
among the Palestinian factions and for its continued support
to Abu Mazen and his Fatah forces. Noting USG concerns over
what appears to be a push by Hamas to topple Fatah in the
Gaza Strip, the Charge requested Egypt to publicly condemn
the latest Hamas violence in Gaza and continue its work to
end the violence there. Khallaf hinted that the Foreign
Minister might make a public statement on the subject
shortly. Khallaf also raised the topic of an upcoming U.S.
Presidential speech (according to press reports, to be
delivered on June 24) on the Arab-Israeli conflict, noting
strong hopes in the region that the speech would reinvigorate
the peace process.


8. (U) Gray has approved this message.
JONES