Chapter 1

NEW U.S. FOREIGN POLICY

Cheap Oil Will Boom U.S. Economy, Win Iraq War, Block Iran Bomb, Defund Terror, Deflate Petrocrats and Break OPEC; a Universal Test Ban Will Block Iran and North Korea Nuclear Missiles, and an International Middle East Free Trade Area (Mefta) Will Bring Business Peace to Israel and Palestine

      Cheap oil should be the paramount foreign policy of the United States.

       Cheap oil should be the paramount foreign policy of the United States. A cheap oil policy puts the economic well being of the American people above other policy values. It encourages the maximum production of crude in every oil producing area, especially Iraq, by anyone to help glut the market.

       Cheap oil is defined as about $20 a barrel for  benchmark West Texas Intermediate crude in a glutted market. Cheap oil would drive down inflation, boom the United States economy and thus the stock markets, bring cheap gasoline and heating oil, and help end the recession with prosperity.

       In March 1999 the price of a loaded barrel of Persian Gulf crude oil was just over $10, or $12 adjusted for inflation. With an average Persian Gulf production cost of under $3 the profit was over 200%.

       By May 2008  crude oil prices were well over $100, more than triple the price four years earlier. Such high prices result in correspondingly high gasoline and heating oil prices, and massive consumer spending losses. About 205 million drivers paid $100 to $120 more, on average, in 2007. If gas prices remain high (nearing $4 in May 2008), drivers will spend an average of $60 to fill a tank.

        By May 2008 high-priced oil had fueled an extraordinary rise in the cost of food and other basic goods in the U.S. and much of the world. Millions of people in poor countries were threatened with starvation.

       High-priced oil had many other negative effects on Americans in 2008. The 71.9 million households using heating oil paid an average of $375 more during winter. Airline fares are rising; their total fuel bill could exceed $50 billion in 2008, up from $12.7 billion in 2000. School buses will go over budget, as will the U.S. Postal Service. Rail surcharges have doubled. Trucking business has dropped putting thousands of employees out of work. Roads go unpaved due to high asphalt costs.

       Such high crude oil prices also put a damper on the recovery of the world economy. Major importers, including India and China, home to a third of the world’s population, confront increasing economic costs, and rising social costs due to reduced subsidies.

    Over $100 a barrel of crude oil is extremely unreasonable. In a glutted market, about $20 is reasonable since the average production cost of non-Persian Gulf crude is under $12 a barrel.

       Nuclear peace in the Middle East is threatened by an Iran drive to develop nuclear-tipped missiles that target Israel and other U.S. interests in the region. Cheap oil would deprive Iran of the many billions needed to build a bomb, and especially to develop and manufacture small nuclear warheads for its medium range missiles. All their petrobillions would be needed for huge food and fuel subsidies and welfare payments to prevent riots by the Iranian people and change of the clerical regime.

       Cheap oil would also deprive Iran of the hundreds of millions of dollars to fund anti-U.S. militias in Iraq, Hezbollah in Lebanon and Hamas in Gaza. Cheap oil also could deny terrorists the Muslim petrodollars likely needed to buy a North Korean primitive ship container bomb to destroy a major American port.

     Saudi Arabia is threatened by a nuclear Iran, which could blackmail the Saudis to greatly reduce crude oil production with corresponding increase in price and market share to the benefit of Iran. The Saud monarchy can block Iran’s bomb and resulting blackmail by glutting the market to get cheap oil.

      On November 19, 2006, Nawaf Obaid, a Saudi advisor at their Washington embassy, wrote an op-ed article for the Washington Post saying that King Abdullah “could strangle Iranian funding” for the militias in Iraq by boosting oil production to cut the price of oil in half, to $30 a barrel, and the kingdom could still finance its needs. He added: “But it would be devastating to Iran, which is facing economic difficulties even with today’s high prices. The result would be to limit Teheran’s ability to continue funding hundreds of millions each year to Shiite militias in Iraq and elsewhere.” Such cheap oil would also deprive Iran of the petrobillions needed to develop nuclear bombs. Obaid was fired a week later confirming that Saudi greed stands in the way of cheap oil to block Iran’s bomb.

        If greed still blocks Saudi-generated cheap oil, the United States should help replace the Saudi oil-producing Eastern Province with a democratic Shia state completely dependent on Washington for its defense in return for long-term cheap oil and bases. The CIA has a long history of changing regimes, like in Iran in 1953, Guatemala in 1954 and probably Chile in 1973.

        Turkish-appointed Pasha AbdulHussein Bin Jumah governed the Qatif and al-Hasa areas of what became the Saudi Eastern Province when that region was conquered by King Ibn Saud in 1913. The Shiite Qatifis and Hasawis were harshly treated as infidels by the Sunni Muslim Saudi overlords until the discovery of oil there.

        The Shia are entitled to self-determination and their own sovereign state just like the Palestinians. A current descendent of Pasha Bin Jumah or other Shia leader should secretly be encouraged by the CIA to call on the million Shia in the Eastern Province to rise and overthrow the local Saudi government and establish a democratic Republic of Hajar. Hajar was the name used by the Prophet Muhammed for that region.

        In return, Washington would defend the Qatifis and Hasawis from the Saudis, starting with the uprising, if the Shia agree always to produce enough crude oil to glut the market, and always sell their benchmark light crude to U.S. buyers for $10 a barrel. And also allow U.S. oil companies carte blanche to develop new fields of crude oil and gas with company-favorable production sharing contracts.

       Alternatively, a credible threat by the next president to strengthen the CIA so it can replace the Saudi Eastern Province with a U.S.-dependent Shia state should persuade the Saud monarchy that $10 a barrel at maximized production is far better than nothing. Hopefully the Saudi message to the 2009 president would be: “You want cheap oil. We’ll give you cheap oil. Just let us alone.” The Saud monarchy is increasing production capacity to 12.5 million barrels a day (mbd), about 3.5 million mbd above May 2008 production, so can easily glut the market.

       With the vast U.S. market partially satisfied by $10 a barrel crude oil and the global market glutted, the world price should drop to about $20. That price would greatly reduce energy costs with a corresponding boom in the American economy, and would multiply the value of the stock markets to the benefit of millions of American investors.

       For the American gasoline consumer, every 5% drop in the price of crude oil results in a saving of 10 cents a gallon and $14 billion a year. So an $80 drop from $100 to $20 or 80% would save $1.60 a gallon and $224 billion. That is a lot of purchasing power remaining in the country to boom the economy.

       A paper prepared for the U.S. Department of Energy in February 2005, entitled “Costs of U.S. Oil Dependence: 2005 Update,” estimated the economic costs of $35-$45 a barrel of crude for 2005 as $150-$250 billion, primarily the transfer of American wealth to oil exporting countries. The economic costs in 2007 of an annual average of $72 a barrel was over $500 billion. With a projected average 2008 price of $94, the economic costs will be way over $700 billion transferred to oil exporting countries.

       Cheap oil advances freedom. “The price of oil and the pace of freedom operate in an inverse relationship in petrolist states – states with weak institutions and high dependence on oil for their G.D.P.”  That is the “First Law of Petropolitics” according to Thomas L. Friedman, author and New York Times columnist. As the price of oil goes down the pace of freedom goes up. Petrolist states include Iran, Saudi Arabia, Venezuela and Russia. Friedman notes that “high oil prices is a black tide of petro-authoritarianism emanating from Russia blunting the tide of free markets and free people.” (The New York Times May 5, 2006.)

       In late 2006 an increasingly popular theory said the way to undercut the growing power of petrocrats, like Iran’s Mahmoud Amadinejad, Venezuela’s Hugo Chavez and Russia’s Vladimir Putin, was to drastically reduce the price of oil because these rulers depend on oil revenues to fund their regimes.

       Cheap oil would deeply deflate the political power of the petrolist states while swelling the tide of free markets and free people, especially those in the many poor oil-importing countries.

 Cheap Oil Victory in Iraq

       World tribalism (ethnic nationalism) drives ethnic and religious entities to independence as captains of their own ships. It will very likely lead to division of Iraq. World tribalism is rooted in America’s Declaration of Independence. It is illustrated by the ethnic break up of Yugoslavia into smaller countries including the state of Serbia, and the February 2008 declaration of independence from Serbia by Kosovo. But world tribalism can successfully be opposed by overwhelming brutal force as in Saddam Hussein’s Iraq.

       World tribalism is very likely to end the Iraq war, with Iraq dividing up into the oil rich regions of a Kurdish northern Iraq and Shia southern Iraq separated by a Sunni central region.

       A cheap oil policy would help maximize Iraqi crude oil production while humanely encouraging the division of Iraq short of sovereignty. The recommendations of the Iraq Study Group of a strong central government and against division into three regions are no longer realistic because with civil warfare tribalism trumps unification.

       Former Secretary of State Henry Kissinger has similarly concluded that Iraq should be divided into three regions. He stated that military victory is no longer possible in Iraq but a rapid withdrawal would have “disastrous consequences.” He said that the United States must choose between stability and democracy in Iraq — and that democracy, for now, is out of reach. “Iraq is not a nation in the historic sense,” he noted, pointing to the ferocity of the conflicts among Kurds and Sunni and Shiite Arabs. The United States should focus on preventing the emergence of a “fundamentalist jihadist regime” in Baghdad and enlist other countries to help stabilize Iraq. The task now is to manage the devolution of Iraq into a “confederal state” in which Sunni, Shiite and Kurdish regions would govern themselves with substantial autonomy, Dr. Kissinger said.

       “No one here accepts to be ruled by the other,” said Kosrat Ali, Kurdistan’s vice president, in September 2007. He added, “centralized rule is finished in Iraq.” The Iraq Constitution strongly supports decentralization.

       Managing the decentralization of Iraq does not mean the United States can withdraw its land forces. Iran could use its very large conventional forces by blackmail or invasion to significantly limit the amount of crude oil produced by Iraq and adjust its own production to substantially raise the price and thus damage the U.S. economy.

       So Washington will need long-term secure bases of quick reaction and special operation forces and their logistical support, backed by at least one carrier expeditionary strike group in the Persian Gulf, mainly to block Teheran from substantially raising the price of oil. American forces would withdraw from the inhabited areas to these bases to minimize American bloodshed, protect the internal and external borders and especially to maximize the flow of Iraqi oil. The bulk of American forces would be withdrawn.

       Iraqis alone would run their regions of Iraq with their own crude oil revenue and not United States funds.

       In late 2007 Iraq pumped about 2.2 million barrels of crude oil a day and exported about 1.7 million, as the northern pipeline was fixed and better guarded than before, though most was pumped from the southern terminal in Basra. The pipeline linking the northern fields in the Kurdish region had been crippled by hundreds of bombings. Iraq production capacity is about at 3 mbd.

       With Shia, Sunni and Kurd income limited mainly to crude oil revenue, pipelines would be protected by mutual self interest and local tribes. Iraqi oil exports would increase, especially from the Kurdish region.

       Russian, French and other oil companies made very profitable deals with Saddam Hussein’s government for the development of Iraqi oil reserves and should be encouraged to fulfill those deals.

       The Kurds and some southern Shia each want their own independent region with their own laws, control of their own oil and defense of their own borders, mainly funded by their own oil revenues. So for Sunni support of a stable divided Iraq and to avoid bitter warfare over oil resources, with the help of U.N. mediators, the Sunni-Kurd border would be drawn to include in the Sunni region a satisfactory part of the Kirkuk and Mosul oil fields.

       The Kirkuk and Mosul oil fields lie outside the present Kurdish region. The U.S. would have a secure base in the region to help guarantee the agreed Sunni-Kurd border, and help the Sunni government purge local and foreign terrorists for the Sunni government’s own protection.

       There would be a weak central government in the Baghdad District dedicated mainly to foreign affairs and local government. Additional central powers would include monetary policy, fiscal policy, assigning broadcast frequencies, postal services, managing water flows on the Tigris and Euphrates, conducting censuses and regulating weights and measures. The top government positions would be rotated among the Shia, Kurds and Sunnis. 

       The boundary of the Baghdad District would be drawn to include physical control of local oil fields to reduce or eliminate the need for donor funds to the central government.

       Break up of the Iraqi armed forces and police along sectarian lines is likely. Baghdad and other mixed Sunni-Shia cities are likely to be further divided into separate Sunni and Shia areas defended by their own militias reinforced by former soldiers and police. Washington would help the international community led by the United Nations with the task of humanely managing the devolution into the three regions plus the Baghdad District with minimum bloodshed in city division as well as in any mass population movements and ethnic cleansing in the provinces.

Cheap Oil Economics and Politics

       While the economics of cheap oil is extremely complex, conventional wisdom among most oil experts is that the era of cheap oil is over. Proponents of the peak oil theory argue that we soon will be past the point of being able to replace reserves as fast as they are consumed, putting upward pressure on the price. But while the world has consumed one trillion barrels in the last century, there are at least one trillion barrels waiting to be exploited, reports the U.S. Geological Survey.

       For example, the West Qurna oil field in Iraq’s southern desert has estimated reserves of 11 billion barrels, the equivalent of the worldwide proven reserves of Exxon Mobil, America’s largest oil company. Like the Kirkuk field, the West Qurna field is one of the dozen or so supergiant fields in the world. The field will produce one million barrels of oil a day (mbd) after four to five years of development. So just these supergiant fields can produce some 12 mbd to satisfy the rising demand for crude oil.

       In 2006 the Saudi Arabian Oil Co., Aramco, discovered 3.6 billion barrels of crude oil reserves, 6% more than it produced. Aramco’s oil production capacity, including production from the neutral zone shared with Kuwait, was about 11 mbd. The Saudis achieved a surplus of $77.5 billion in 2006 thanks to high oil prices and low production cost. Their 2007 surplus was even higher.

        On May 16, 2008, when crude oil prices were over $120 a barrel and gas prices were nearing $4 a gallon, President Bush requested Saudi King Abdullah, for the second time, to substantially increase crude oil production from about 9 mbd to drive prices down, but was again rebuffed.  Senator Charles E. Schumer of New York asserted the Saudis have “the ability to increase production capacity by two million barrels a day right now,” and said a one million barrel increase would reduce gas prices by 60 cents a gallon. So a 2 mbd increase probably would double that.

       Riyadh plans to complete an expansion of production to 12.5 mbd in 2009, which would bring their excess capacity to about 3.5 mbd.

       The lifting and loading cost of a barrel of Saudi oil is under $3 a barrel. That compares with over $40 for shale oil and over $80 for ethanol, which are thus vastly uncompetitive, as is liquefied coal at over $30. So energy independence is presently completely out of reach because crude oil production costs are far cheaper.

       The Kingdom of Saudi Arabia is no friend of America. Most of the 9/11 and Iraq suicide bombers are Saudis. The Saudis export a virulent form of anti-American Islam, Salafism-Wahhabism, to Islamic schools all over the world, including about 80 percent of U.S. mosques which they fund. They drain enormous amounts of American money with their greedy support of high priced crude oil, and spend the petrobillions buying weapons systems from other countries. The government does little to stop wealthy Saudi individuals sending millions to al Qaeda. This key Arab country in its religious heart opposes permanent peace between Israel and the Arabs.

       In November 2007, Saudi Defense Minister Crown Prince Sultan called for a halt in what he called the “crazy, illogical and disproportionate slaughter” by the United States in Iraq. The Saudis strongly opposed President Bush’s policies in Iraq. In early December 2007 Saudi King Abdullah supported  Iranian President Mahmoud Ahmadinejad‘s participation in a Persian Gulf summit in Qatar in a major step towards promotion of regional cooperation. In mid-December the Saudi King, in a striking move away from the United States, unprecedently invited the Iranian president for a five-day visit to perform annual Hajj rituals. On December 21, prior to Amadinejad winding up his trip, the two discussed issues of mutual interest including promotion of Tehran-Riyadh relations as two pillars of the Islamic world to defuse enemies’ (read American) plots for sowing discord among Muslims.

       Saudi Arabia is the principal member of OPEC, the Organization of Petroleum Exporting Countries. OPEC’s other members are Iran, Iraq, Kuwait, Venezuela, Qatar, Indonesia, Libya, United Arab Emirates, Algeria, Nigeria, Gabon, Angola and Ecuador, in order of joining. Its objectives are: to co-ordinate and unify petroleum policies among member countries in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.

      The OPEC members were expected to receive $658 billion in oil revenue in 2007, up from $605 billion in 2006. Experts estimate that oil-rich nations have a $4 trillion cache of petrodollar investments around the world. Much of those trillions are transferred American wealth.

       OPEC members are consumed by greed and many like Iran and Venezuela seek the highest prices. OPEC members met in Vienna on March 4, 2008, with the price over $100 a barrel, and resisted U.S. pressure to pump more oil to help revive a fragile economy. Ali al-Naimi, Saudi Arabia’s oil minister, said there was no need to increase supplies by “even one barrel of oil.”

        So cheap oil would deservedly break OPEC. Still, most members would make far more than 100% profit from $20 a barrel oil, with Saudi Arabia more than 300%. And if that is not enough for many members to support their luxurious way of life, they  can draw on their many hundreds of billions of savings and investments.

        Earlier, at OPEC’s March 2000 meeting, it set up a price band mechanism to respond to changes in world oil market conditions. According to the mechanism, OPEC prices above $28 per barrel for 20 consecutive trading days or below $22 per barrel for 10 consecutive trading days would result in production adjustments. Then, OPEC was satisfied with the profit when oil was as low as $22 a barrel, or about $26 adjusted for inflation. So a return to cheap oil, about $20 a barrel, the average throughout the 1990s, is not unreasonable.

        In October 2007 Iran’s supreme leader, Ayatollah Ali Khamenei, called on all Moslem countries to boycott American efforts to achieve peace between Israel and the Palestinians. Both he and Iranian President Mahmoud Amadinejad share the view that the state of Israel has no right to exist. Iran is also the main sponsor of Hezbollah, the radical Shiite group in southern Lebanon that fought a war with Israel in the summer of 2006. And also the main sponsor of Hamas, the radical Palestinian Sunni group that runs Gaza, as well as the prime sponsor of Islamic Jihad, a smaller radical group that regularly launches rockets at southern Israel. Cheap oil would dry up this terrorist funding.

        In summary, cheap oil would boom the United States economy and stock markets, end the recession and achieve prosperity, and  bring back cheap gas.  Cheap oil would not only block Iranian nuclear bombs and missiles, and deprive Shiite militias in Iraq and other anti-American radical groups of hundreds of millions of dollars of funding, it would break greedy OPEC and deflate anti-American petrocrats. Cheap oil would save many millions of poor people from starvation by driving food prices down. This cheap oil policy would produce a stable Iraq at a low cost, which can credibly be claimed as a victory by the United States. That victory could be enhanced with cheap oil depriving terrorists the petrodollars needed to purchase a container ship bomb from North Korea to destroy an American port.

 Cheap Oil Will Block Iran Bomb

       The National Intelligence Estimate (NIE) on Iran’s nuclear activity published on December 3, 2007, in part stated: “Our assessment that Iran halted the [nuclear weapon] program in 2003 primarily in response to international pressure indicates Teheran’s decisions are guided by a cost-benefit approach rather than a rush to a weapon irrespective of the political, economic and military costs.”

       Economic costs surely played a significant role in that cost-benefit analysis.

       Nuclear weapons are very expensive. The U.S. nuclear arms’ cost was put at $5.48 trillion in a 1998 study by the Brookings Institute (all costs in 1996 dollars). The cost of the Manhattan Project through August 1945 was $20 billion. The cost of two weapon tests in 1945 at the Bikini Atol (Able and Baker) was $1.3 billion. The U.S. conducted over 1000 tests.

       The money spent on nuclear weapons, plus money for environmental cleanup, could buy 290 million automobiles according to William J. Weida, former director of the Economic Policy and Analysis Division of the Defense Department.

      In 2003, when Teheran may have terminated its nuclear weapon program, the annual average domestic crude oil price was $27.69 ($31.39 in 2007 dollars). As of mid-May 2008, the comparable price was over $120. Each dollar in the price of a barrel of crude sold by Iran equals a billion dollars per year. Overflowing with oil money, Teheran could continue its nuclear weapon program in the belief it is now affordable.

        Cheap oil alone, about $20 a barrel, will block Iran’s from continuing its nuclear weapon program by reducing Iran’s annual oil revenue from over $100 billion a year by over $80 billion. So Teheran could barely afford its fuel and food subsidies and welfare payments, leaving nothing for its nuclear program.

        The National intelligence Estimate noted: “We assess with moderate confidence that convincing the Iranian leadership to forgo the eventual development of nuclear weapons will be difficult given the linkage many within the leadership probably see between nuclear weapons development and Iran’s key national security and foreign policy objectives, and given Iran’s considerable effort from at least the late 1980s to 2003 to develop such weapons. In our judgment an Iranian political decision to abandon a nuclear weapons objective would plausibly keep Iran from eventually producing nuclear weapons – and such a decision is inherently reversible.”

        An Iranian political decision to abandon a nuclear weapons objective and then not reverse it could be based on a strong belief that either the United States or Israel, or both, would conduct  major military attacks to destroy all targetable facilities the attackers believed could be used for the development and manufacture of nuclear weapons. The December NIE seemed to negate such an American attack. Israel strongly disagreed with the assessment saying even if Teheran had stopped its weapons development program in 2003 it had restarted it since then. But a solo Israeli attack would be extremely dangerous, and could fail.

        Alternatively, cheap oil, preferably supplemented with a universal test ban, probably would convince the Iranian leadership to forgo the development of nuclear weapons.

Universal Test Ban

        To help prevent further nuclear weapon proliferation, cheap oil can be supplemented by a universally-binding test ban treaty that outlaws all nuclear tests and threatened tests anywhere by anyone, including nonsignatories like Iran and North Korea. The U.N. Charter similarly binds nonsignatories.

        Both China and Russia support a UBTBT. If supported by the United States, the treaty would unite virtually the entire international community to block Iran and North Korea from demonstrating by a successful test that it has mastered the very complex technology of a nuclear missile warhead.

        All declared nuclear weapons states required many tests. The U.S. conducted over 1000 tests before it agreed to a test moratorium in 1992. Perhaps building on those American tests, Israel twice successfully tested howitzer-launched nuclear warheads off the coast of South Africa according to a Russian arms control expert.

        North Korea’s conducted an underground test on October 9, 2006 at the Mount Mant’ap nuclear test site in Hamgyong Province. The yield of the device was about one kiloton of TNT, but Pyongyang reportedly informed China before the blast that the target was four kilotons.  The exact cause of the low yield is unknown. Anyway, North Korea did not demonstrate mastery of the required missile warhead technology; that is, the capability to miniaturize a nuclear bomb and mate it with a missile and reentry vehicle. That requires many tests.

        Iran cannot blackmail neighbors with a reliable though untested simple bomb which is too large for a missile warhead and is deliverable only by a vulnerable aircraft or detectable shipping container (using muon radiography).

       A UBTBT can promptly enter into force since only agreement to its terms by the five permanent members of the U.N. Security Council (P-5) is required and virtually all parties to the unenacted Comprehensive Test Ban Treaty would quickly adhere to legislate a ban with the required two-thirds of the states including the P-5 as parties.

       A UBTBT was the author’s doctoral dissertation.  A draft treaty with commentary is in the Appendix.

        The treaty would be enforced by a volunteer state authorized by the U.N. Security Council after the International Atomic Energy Agency certified a violation by Iran or North Korea.  Preparations for a test or even a threat to test violates the UBTBT. Washington would likely volunteer to surgically destroy Teheran’s or Pyongyang’s targetable nuclear weapons facilities with conventional cruise missiles if it did not verifiably and irreversibly dismantle its weapons facilities.

       Since Iran cannot rely on Russia or China, strong treaty supporters, to block Security Council enforcement of a UBTBT, Moscow should be able to convince Teheran to end an enormously expensive  nuclear weapons program destined to fail because  of the UBTBT. So with significant economic support by France, Germany and Britain for Iran, Russia should be able to persuade Teheran to agree to Moscow’s proposal to carry out uranium enrichment only in Russia, or in another country, so the uranium cannot be enriched to weapons grade, and return spent reactor fuel to Russia so the fuel cannot be reprocessed to weapon plutonium.

       In October 2007 North Korea agreed to disable all its nuclear facilities by the end of 2007 in return for 950,000 metric tons of fuel oil or its equivalent in economic aid, which it failed to do. There is no agreement by Pyongyang to give up its stored weapons plutonium, sufficient to make five to 10 nuclear weapons, or turn over any actual weapons. So China, with massive economic and energy aid by South Korea and Japan for the North, should be able to persuade Pyongyang to end its expensive nuclear weapons programs destined to fail because of Chinese support of the UBTBT. The North would have to verifiably deliver all its weapons plutonium and any weapons to Beijing for destruction by the International Atomic Energy Agency.  

       Both Iran and North Korea would also have to subscribe to the Additional Protocol to the Safeguards Agreement to the Nuclear Nonproliferation Treaty to provide transparency of any peaceful nuclear facilities to prevent successful cheating. In return, both Iran and North Korea would be removed from Washington’s terrorist and enemy nations lists, and rewarded with the end of all sanctions. Also, normalization of relations with the United States, but with Teheran only after it ceased exporting terror.

       In an interview on CNN on October 28, 2007, Wolf Blitzer asked Dr. Mohammed ElBaradei, Director General of the International Atomic Energy Agency, whether Iran was  building a nuclear bomb. Dr. Elbaradei answered: “Let me say three facts to put the Iranian nuclear issue in proper perspective. We are not talking about Iran today having a nuclear weapon as Secretary Rice said recently. Second, even if Iran were to be working on nuclear weapons, according to John Negroponte and Mike McConnell, they are at least a few years away from having such weapon. Thirdly, what we are doing right now is, through the IAEA and the European Union, Javier Solana, is to try to make sure that we control the nascent enrichment capability in Iran and create the conditions for Iran and the Europeans, particularly the U.S., to go into negotiation. . . . I say that because at this stage we need to continue to work through creative diplomacy. We have the time. Because I don´t see any other solution, Wolf, except through diplomacy and inspection.”

       A key tool of creative diplomacy is a universally-binding test ban treaty, for which there is still time. And with Russian and Chinese support of a UBTBT, Iran’s threatening enrichment capability can be ended by transfer to Russia or another country.

       There is no other diplomatic solution. Javier Solana, the E.U.’s “foreign minister”, was “disappointed” with the negative results of a meeting in Paris on December 1, 2007, with Iran’s nuclear negotiator, Saeed Jalili.The French official present described the meeting as “a disaster.” Jalili said Iran has a “national right” to enrich uranium.

       With continued uranium enrichment, Iran would have the option of building a bomb, and after many tests a nuclear warhead for its intermediate range missiles. A universal test ban would block those tests and thus Iranian nuclear missiles.

Middle East Free Trade Area Peace

       Settlement of the Palestinian-Israeli conflict is blocked on the Palestinian side by the dispute between peace supporters, like Palestinian President Mahmoud Abbas (Abu Mazen) and Palestinian Prime Minister Salam Fayed, and opposition militants like Hamas, the Islamic Resistance Movement. Hamas, like Islamic Jihad and other militants, seeks the destruction of Israel. The Palestinian peace supporters cannot make peace because they are incapable of forcefully blocking the opposition militants from continuing their armed struggle against Israel.

       But, believe it or not, this problem can be solved with at least 10 years of peaceful coexistence between Palestinians and Israelis. How? By converting militant Hamas to a 10-year peace supporter with sufficient incentives. Hamas, by far the strongest militant group in Gaza, is capable if sufficiently motivated to forcefully block any remaining opposition militants from continuing their armed struggle in and from at least Gaza.

       Hamas in 2005 won a large majority of the seats in the Palestinian Legislative Council in fair democratic elections. But Fatah, the losing party, refused to turn over power to Hamas after a failed unity government. In June 2007 Hamas won control of the Gaza Strip from Fatah after brutal warfare.

       Thus Hamas is a Palestinian partner which can deliver years of business peace in Gaza if Israel ends its siege of Gaza and opens the gate to international financing by doing business with it. Though Hamas has a religious and therefore irreversible commitment to destroy the Jewish state, Israel and thus the international community can do business with Hamas in exchange for the 10-year hudna (cease-fire or truce) offer by Hamas. The hudna is conditioned on the return of Israel to the 1967 lines, which was done in Gaza.

       Hamas would share power with Fatah in Gaza in a reunified government that enforces the cease-fire with joint forces of Hamas and Fatah. Their long-term cooperation is secured by equitable shares of a great many good Gaza jobs. With Israel’s support, the jobs are generated by an international Middle East Free Trade Area, Mefta, starting with a prototype port just south of Deir El Balah called Port Mefta, with tax- and  duty-free manufacturing and shopping, and gambling by non-Moslem tourists.

       The pragmatic leadership of Hamas would support Mefta if only to end Israel’s siege of Gaza. It is very unlikely that Islamic Jihad, the Fronts and Fatah dissidents and hardliners in Gaza could successfully oppose Mefta because the alternative is continuation of the bloody conflict, dismal poverty and tremendous unemployment in Gaza. Anyway, any Gaza leaders who oppose Mefta can be neutralized by a fair share of the Mefta jobs for their people or by brutal Hamas and Fatah force.

        Port Mefta is a very investor-friendly free trade, tourist and gambling area (2.5 sq. mi., 7 sq. km.) under the administration and policing of the U.S.-led Multinational Force and Observers which monitors the peace in the Sinai.

       Port Mefta is established by a treaty among the MFO, Israel, the P.L.O. (expanded to include Hamas) and the Palestinian Authority. The MFO leases the port area from the Palestinian Authority for a renewable 35 years. Any nationality whose country accedes to the treaty can do free trade business in Port Mefta by renting a building site from the MFO for 35 years and constructing a building at its own expense. U.S. and E.U. government financial agencies insure the 35-year leases. The lease also includes the Philadelphi Corridor along the Gaza border with Egypt.

       The Mefta currency is the U.S. dollar and English is the official language. Port Mefta provides free access by the Palestinians to its new seaport and a rebuilt international airport in Dahaniya in southeast Gaza. These ports and the Philidelphi Corridor along the Egypt-Gaza border, including the Rafah terminal, are secured by MFO international police to help block smuggling and activists that threaten Mefta. Port Mefta is surrounded by an Israeli-designed anti-smuggling barrier.

       In 2010 the prototype Port Mefta is followed by an MFO-administered Gaza Mefta which adds the former Gush Katif area (except Morag where high rise apartments are planned for Palestinians) comprising 20% of the strip. Gaza Mefta is a combined duty- and tax-free Singapore, Las Vegas and Riviera with ample affordable power and desalinated water using cheap gas off the Gaza coast.

       James Wolfensohn, the former Special Envoy for Gaza Disengagement, in April 2005 stated that the Port Mefta proposal is interesting and would help kick-start the Gaza economy and boost Gaza employment. He proposed to connect Gaza with the West Bank by a sunken four-lane highway. Under the Mefta plan, the Gaza terminal of the highway is Port Mefta. The surface of the highway is patrolled solely by MFO international police so that Palestinians can freely move between Gaza and the West Bank.

       The MFO promptly begins construction of Port Mefta and the sunken highway starting with a barge-accessible harbor quickly constructed by the U.S. Army Corps of Engineers to bring in building materials from Egypt and Israel. The construction of the sunken highway and Port Mefta infrastructure – including a large power/desalination plant, the administrative and commercial buildings and a gambling casino – requires every construction worker Palestinians can muster since nonexecutive labor must be Palestinian. The construction of the far larger Gaza Mefta starting in 2010 plus manning the office and administrative buildings, consulates, power/desalination plant, hotels, factories, casinos, stores and duty- and tax-free shops provides full employment for Gaza’s workers.

       The West Bank quiets in order for its workers, merchants and products to travel via a temporary Israeli safe route in Israeli-guarded convoys to a booming Gaza, and especially to help build the sunken highway. Israel withdraws behind its completed defensive barrier from substantially all Palestinian areas occupied since September 2000, when the current intifada started. The quality of life of West Bankers greatly improves with free movement there and to Gaza and thus the rest of the world. The sunken highway between the West Bank and Port Mefta is completed by the end of 2009.

       Mefta was deemed of “great interest” by Sharon’s government in July 2003. The Olmert government should welcome a realistic plan that advances the peace process, especially since the main Israeli costs of Mefta are paying the Palestinian duties and taxes and doing business with Hamas.

       During the 10-year cease-fire, each side implicitly recognizes the other’s right to exist during that period, and abides by previous agreements between the sides. After 10 years, the Palestinians can democratically decide to continue full employment and business peace with Israel or renew the armed struggle.

       Hamas really needs a Port Mefta: To end Israel’s siege, gain time to consolidate its power, help rid Gaza of all IDF forces, help significantly increase payroll and institutional funding, renew the unified Hamas-Fatah government, begin to end hardship in Gaza by a vast increase in employment and make a 10-year business peace with Israel – all without giving up its goal of destroying the Jewish state, left by Hamas to the next generation.

       Since Hamas is supported by at least half the Palestinians and cannot be destroyed, real peace is not achievable. Also because of intense hatred whether or not Hamas is governing. And because Israel will not give up Old Jerusalem with its Temple Mount and Western Wall as demanded by the Palestinians.

       So there is no end of the conflict. But hateful Palestinians and Israelis still can do business together for mutual profit – i.e. in business peace without bloodshed. 

      The lack of real peace does not rule out a Palestinian state in the remaining 80% of the Gaza Strip if the Gazans, now led by Hamas, truly reform.

       “True (Palestinian) reform will require entirely new political and economic institutions based on democracy, market economies and action against terrorism,” President George W. Bush said on June 24, 2002.

       So after a successful Port Mefta, and thus a Gaza Mefta starting in 2010, the stage is set for establishing a nonthreatening, democratic Palestinian state in Gaza, also in 2010 if Israel then agrees that the Gazans have truly reformed.

Annapolis Meeting 11/27/07

        A West Bank Palestinian state remains a distant vision. That was demonstrated by the difficulties of Secretary of State Condoleezza Rice to obtain a joint Israeli-Palestinian document on which to base the international peace meeting in Annapolis, Maryland on November 27, 2007. She was not able to bridge the wide gap between Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas on a framework for future negotiations.

       The Annapolis meeting was attended by representatives of more than 40 countries. The principal five were the U.S., Israel, the P.L.O./Palestinian Authority, Saudi Arabia and Syria.

       Here are some pertinent opinions in publications prior to the meeting.

       Al Jazeera: “It will take a miracle for a US administration that sees the Middle East through Israeli eyes and the Palestinian issue through the prisms of the ‘war on terrorism’ to pressure Israel to allow for a sovereign viable and livable Palestinian state to emerge sooner rather than later.” (11/26)

       Jerusalem Post: “It’s hard to detect any changes, if at all, in the positions of the Palestinian negotiators, who continue to stick to the same demands they have been making for decades: a full Israeli withdrawal to the pre-1967 borders, the release of thousands of Palestinian prisoners, the removal of all Jewish settlements and recognition of the ‘right of return’ for Palestinian refugees. Seven years after the failed Camp David summit, there is no reason to believe that the Palestinian negotiators are about to soften their position and offer major concessions. It’s also unlikely that the Palestinian negotiators would accept anything less than what they and Arafat rejected at Camp David.“ (11/27)

       Probably the most intractable issue in the conflict is the question of the right of return to what is now Israel of Palestinians who left or were forced out of their land during the 1948 war, and their descendents, millions. That war started with the invasion of the nascent Jewish state by Arab countries, especially Egypt which ended up controlling the Gaza Strip and Jordan which ended up absorbing the West Bank. In the 1967 war Israeli forces conquered these two regions.

       No Palestinian leader can negotiate away this right of return. But Israel backed by the U.S. takes the position that these refugees can only return to the Palestinian state and not the Jewish state.

       President Mahmoud Abbas (translated from Arabic with emphasis added) referred to the need “to resolve all other issues relating to the conflict, especially the Palestinian refugees question in all its political, humanitarian, individual and common aspects, consistent with Resolution 194, as emphasized by the Arab peace initiative and the participation of sister states that host refugees and carry huge burdens in this regard.”

       General Assembly Resolution 194 (nonbinding) is interpreted by Arabs as the right of Palestinian refugees to return to their homes in pre-1967 Israel.

       Prime Minister Ehud Olmert at the Annapolis meeting said (translated from Hebrew, emphasis added): “The negotiations will be based on previous agreements between us, UN Security Council Resolutions 242 and 338, the Roadmap and the April 14^th 2004 letter of President Bush to the Prime Minister of Israel. On conclusion of the negotiations, I believe that we will be able to reach an agreement which will fulfill the vision of President Bush: two states for two peoples. A peace-seeking, viable, strong, democratic and terror-free Palestinian state for the Palestinian people. A Jewish, democratic State of Israel, living in security and free from the threat of terror – the national home of the Jewish people.”

       President Bush said at the beginning of the meeting: “This settlement will establish Palestine as a Palestinian homeland, just as Israel is a homeland for the Jewish people.”  Bush’s April 14, 2004, letter explicitly requires returning the Palestinian refugees to the Palestinian state and not to the Jewish state.

       A Jewish state also negates the right of return of Palestinian refugees because its Jewish nature would be negated by so many non-Jews.

       As indicated above, no Palestinian leader can trade away the Palestinian’s right of return. So this issue alone blocks a final settlement.

       The Joint Understanding between the Israelis and Palestinians read by President Bush at the outset of the meeting stated: “The parties also commit to immediately implement their respective obligations under the performance-based road map to a permanent two-state solution to the Israel-Palestinian conflict, issued by the Quartet on 30 April 2003 – this is called the road map – and agree to form an American, Palestinian and Israeli mechanism, led by the United States, to follow up on the implementation of the road map. The parties further commit to continue the implementation of the ongoing obligations of the road map until they reach a peace treaty.”

       Another major problem is that the Palestinian Authority is not able to implement the road map.

       The Jordan Times: “Olmert insisted that the defunct ‘roadmap’ must be the basis for moving forward because the document requires the Palestinian Authority to carry out tasks it is incapable of performing, such as reining in military groups, collecting weapons and carrying out reforms in its security sector and administration.” (11/18)

       Still another major problem is negotiating a final settlement of the conflict in the absence of Hamas from the meeting and the negotiations.

       The Jordan Times: “Hamas must be a party of any lasting solution to the Palestinian issue, not just because it won democratic elections, but also because it controls the Gaza Strip and has real influence in the West Bank. Moreover, Hamas’ long truce with Israel shows that it may be willing to abandon violence given the right amount of persuasion.“ (emphasis added) (11/25)

       Abbas’s Palestinian Authority cannot deliver what the roadmap calls for so he is not a partner for peace. But Hamas is a partner for peace  because it can deliver 10 years of cease-fire and thus 10 years of Mefta business peace in Gaza. Hamas would be willing to abandon violence, persuaded by Mefta’s many benefits to Hamas, beginning with the end of Israel’s siege.

       Permanent peace is not better than 10 years of peaceful coexistence. The Arabs view any peace as only temporary until they are strong enough to destroy the Jewish state.  In 1995 the Mufti of Saudi Arabia, Sheikh Abdel Aziz Bin-Baz, said that “peace with Israel is permissible only on condition that it is a temporary peace, until the Moslems build up the [military] strength needed to expel the Jews.”  

       That threat is not meaningless.

       Such military strength to expel the Jews can be achieved by the Moslems with a petrobillions’ financed massive attack, spearheaded by the suicidal Iranian Revolutionary Guards Quds Force and backed by a nuclear missile-armed Teheran, to reconquer Jerusalem and then the rest of Mandate Palestine. The attack route would be through a post-U.S. Shia southern Iraq and a post-Hashemite Islamist Jordan.

        Cheap oil, preferably with a universal test ban, can block that threat by preventing its financing.

Post Annapolis Comments

       Jerusalem Post: “The Annapolis conference is the most important political event of the year 2007. It was a success despite the doubts, the ridicules, and the attempts of those who are opposed to peace to derail it. The conference succeeded in three areas:

        “It was launched with a joint Israeli-Palestinian declaration. Even though the declaration had no guidelines for a permanent agreement, it did firmly commit both sides to open in serious negotiations. The Arab world, including Saudi Arabia and even Syria, sent senior officials to the meeting, which conveys regional support of a peace agreement with Israel and general support for [Palestinian Authority President] Mahmoud Abbas. The conference’s end officially launched negotiations for a permanent status agreement. A date was set for commencement (December 2007) with a target date for completion thirteen months later. Ambitious but not impossible. “ (12/6)

       bitterlemons.org: “When President Mahmoud Abbas returns back to Palestine, he will be faced with at least three serious challenges. The first is blame for the failure of Annapolis, including for the decision to sign onto the poor joint statement that was read by US President George W. Bush on Israel being the state of the Jewish people. This controversial position is opposed by Palestinians and Arabs because it precludes the rights of Israel’s Arab citizens as well as the right of return of Palestinian refugees.

       “The second challenge is the growing pressure on Abbas, which started before Annapolis, from his Fateh fellows to order a government reshuffle in order to appoint Fateh members and change the composition of the government away from independents (read Prime Minister Fayad).

       “The third and most important challenge is when the Palestinian public realizes that neither Annapolis nor the subsequent process of negotiations will end Israeli settlement expansions or the draconian restrictions on Palestinians in general, both of which are heavily responsible for the misery of Palestinian lives. This in turn will be heavily exploited by the Hamas leadership, which kept a low profile before and during Annapolis in order later to say ‘we told you so.‘” (12/3)

       Jordan Times: “Let it not be said there is not a chance for peace now. The Arab Peace Initiative, which rightly demands a just and comprehensive peace, is exactly that opportunity. But Israel, supported by the US, has chosen to ignore that historic opportunity.” (11/29)

       By May 2008 there was no evidence that the Israel and Palestinian peace negotiators had solved any major problem blocking the path towards normal peace.

       But there is a chance for peace now. That is, a business peace between Israelis and Palestinians based on an international Middle East Free Trade Area in Gaza, starting with Port Mefta. If Hamas, Israel and the U.S. (thus the MFO) support a Port Mefta, it can soon be implemented to jump start the Gaza economy, with the credible promise of future full employment in Gaza. Port Mefta would reunify the Gaza and West Bank governments and end Israel’s siege of Gaza, all of huge benefit to the Palestinians.

       The breach of the siege on January 23, 2008, by Hamas blowing gaps in the Gaza-Egypt border wall, was ended by Egypt resealing the border on February 3, and thereafter controlling passage across the border. Rejecting joint control of the border with Hamas, Egypt’s foreign minister, Ahmed Aboul Gheit, on February 7 said: “Anyone who violates Egypt’s  borders will get his legs broken.” So the siege continued.

       Israel would achieve at least 10 years of peaceful coexistence at a relatively modest cost: Doing business with Hamas and thus ending the siege (to Israel’s immense economic benefit), and paying Palestinian duties and taxes.

        A permanent status agreement will require a bona fide miracle.  A Mefta agreement is eminently doable before the end of the Bush administration.

New U.S. Foreign Policy to Replace Washington’s
Misguided New Middle East Policy

       “The Bush administration wants to contain Iran by rallying the support of Sunni Arab states and now sees Iran’s containment as the heart of its Middle East policy: a way to stabilize Iraq, declaw Hizbollah, and restart the Arab-Israeli peace process. But the strategy is unsound and impractical, and it will probably destabilize an already volatile region.” (The Costs of Containing Iran, Vali Nasr and Ray Takeyb, Foreign Affairs, January/February 2008.) They explain:

       “For the Bush administration containing Iran is the solution to the Middle East’s various problems. In its narrative, Sunni Arab states will rally to assist in the reconstruction of a viable government in Iraq for fear that state collapse in Baghdad would only consolidate Iran’s influence there. The specter of Shiite primacy in the region will persuade Saudi Arabia and Egypt to actively help declaw Hezbollah. And, the theory goes, now that Israel and its longtime Arab nemeses suddenly have a common interest in deflating Tehran’s power and stopping the ascendance of its protégé, Hamas, they will come to terms on an Israeli-Palestinian accord. This, in turn, will (rightly) shift the Middle East’s focus away from the corrosive Palestinian issue to the more pressing Persian menace. Far from worrying that the Middle East is now in flames, Bush administration officials seem to feel that in the midst of disorder and chaos lies an unprecedented opportunity for reshaping the region so that it is finally at ease with U.S. dominance and Israeli prowess.

       “But there is a problem. Washington’s containment strategy is unsound, it cannot be implemented effectively, and it will probably make matters worse. The ingredients needed for a successful containment effort simply do not exist. Under these circumstances, Washington’s insistence that Arab states array against Iran could further destabilize an already volatile region.”

       The authors then recommend dialogue, compromise and commerce by active U.S. participation and encouragement to create a situation in which Iran will find benefit in limiting its ambitions and in abiding by international norms. There would be a new security arrangement in which Teheran legitimizes its powers and achieves its objectives through cooperation rather than confrontation. They add: “If Iran enjoyed favorable security and commercial ties with the United States and was at ease in its region, it might restrain its nuclear ambitions.” (Emphasis added.)

       Or Iran might continue to strive vigorously for the development of nuclear warheads for its improving intermediate range missiles.

       The authors are correct that Washington’s new Middle East policy “is unsound and impractical, and it will probably destabilize an already volatile region.”

       But a new U.S. foreign policy featuring cheap oil and a universal test ban to block Iranian nuclear weapons, and an international Middle East free trade area starting with a Port Mefta to bring peaceful business coexistence between Israelis and Palestinians, in place of the Bush administration’s failing new policy, are most likely to succeed. And at a fraction of the costs and risks of the recommended new security arrangement and commercial ties with an emerging  radical Persian power house.