Rule of Law Is Key to Future Israel-Syria Peacemaking

PolicyWatch #1533
By Andrew J. Tabler
June 11, 2009

Beginning on June 12, U.S. Middle East envoy George Mitchell will make his long anticipated first trip to Damascus. During the two-day visit, Mitchell will focus on reinvigorating Israeli-Syrian peace negotiations and cajoling Damascus to engineer a Fatah-Hamas reconciliation. According to media reports, he will also roll out a roadmap for improved relations between Washington and Damascus. Although it is unclear if U.S. peacemaking can succeed, Syria's current fiscal crisis, combined with questions over its nuclear activities and recent twists in the investigation of former Lebanese prime minister Rafiq Hariri's assassination, may provide a rare opportunity for Washington. A focus on rule of law -- a necessary prerequisite for potential U.S. future investment -- could help the United States tame some of the al-Asad regime's excesses in the short term while building a foundation for cooperation in the long term.

Background

Although relaunching peace talks between Israel and Syria might seem easier than those between Israel and the Palestinians, the deep-seated relationship between Syria's longstanding state of war with Israel and the al-Asad regime's thirty-nine-year grip on power complicates matters. Following independence in 1946, Syria was one of the world's most unstable countries, suffering countless coup d'etats. So when Alawite officers loyal to the Baath Party seized power in a military coup in March 1963, they declared a state of emergency to stabilize Syria's domestic scene. This allowed the junta to arrest individuals and hold them indefinitely without charge, putting Syria on the road to becoming one of the Arab world's most repressive countries.

After consolidating power over Baathist opponents in November 1970, the late president Hafiz al-Asad built his regime by placing minority Alawites, Druze, Christians, and Shiites in key positions in the armed forces, security services, and bureaucracy. With the advent of the region's 1973 war, al-Asad quickly switched his justification for the emergency law to the state of war with Israel. The regime also used the threat of war as an excuse to delay passing and implementing legal reforms to accommodate economic, social, and political change in Syria. To clear new endeavors with the regime, citizens were forced to bribe the minority networks that dominate Syria's security services and bureaucracy. This corruption quickly became the mortar that held Syria's minority-led regime together.

Following al-Asad's death in June 2000, his son and successor, Bashar, issued hundreds of pieces of legislation in the name of reform. Unfortunately, however, most of it was simply grafted onto existing laws or never followed up by executive instructions. The regime also ignored reform of Syria's antiquated court system (despite extensive help from the French government), leaving interpretation of the law up to the minority-dominated bureaucracy. Not surprisingly, regime corruption skyrocketed. Over the last five years, Syria has slipped from 66 to 147 on Transparency International's Corruption Perception Index, placing it among the world's top thirty most corrupt countries. According to the World Bank's Investment Climate Assessment, corruption is one of the primary reasons why Syria now has one of the Arab world's poorest investment environments. The countries most willing to invest in this murky climate are Syria's political allies, Qatar and the Islamic Republic of Iran. Last year, the latter claimed it extended $3.5 billion in "technical assistance" to Damascus.

The Regime's Predicament

The good news for U.S. peacemakers is that the al-Asad regime is facing a trilogy of daunting challenges, largely of its own making, and is seeking Western help through talks with Israel.

Finance. For two decades, the al-Asad regime has relied on oil proceeds to finance annual budgets. Production, however, has declined 30 percent in the last five years and domestic demand has increased sharply. In 2006, Damascus announced it had become a net oil importer, nearly five years ahead of analysts' expectations. The Syrian regime insists it has arrested the production decline through new oil discoveries and enhanced recovery from existing wells. But those projects have largely boosted production of heavy oil, which sells for considerably less on the international market than does Syria's standard light sweet crude. As a result, Syria's budget deficit this year is expected to reach $5.2 billion, accounting for approximately 10 percent of GDP and a quarter of Syria's estimated $20 billion hard currency reserves.

This crisis coincides with the flooding of the Syrian job market with record numbers of youth born during the 1980s and 1990s, when Syria was among the fastest growing populations in the world. Unable to invest enough of its own money to create jobs for Syria's demographic wave, the Syrian regime is now actively seeking foreign direct investment (FDI). Due to rampant corruption, however, official FDI inflows in 2008 were only around $1.1 billion. While such amounts are a substantial increase over just a few years ago, Syria is still one of the lowest FDI recipients in the Arab world.

Nuclear activities. During a visit to Syria in June 2008, International Atomic Energy Agency (IAEA) inspectors found traces of uranium and graphite at al-Kibar, the site in eastern Syria bombed by Israel in September 2007 that U.S. officials now believe was a clandestine nuclear reactor. Last week, the IAEA reported that it also found uranium particles "not included in Syria's inventory of declared material" at the country's IAEA-declared research reactor. If Damascus continues to refuse IAEA follow-up inspections, the nuclear watchdog could demand a "special inspection" of the sites, which if refused could lead the IAEA Board of Governors to refer Syria to the UN Security Council for further action, potentially including the use of force under Chapter VII of the UN Charter.

Lebanon. The recently established international tribunal investigating the assassination of former Lebanese prime minister Rafiq Hariri is preparing indictments. Should Syrians be indicted or called to testify and Damascus refuses the tribunal's requests, the matter is likely to be referred to the Security Council. If the tribunal fingers Syria's Lebanese ally Hizballah (as reported in a recent article by Der Spiegel), pressure would mount on Damascus to break ranks with the group -- a choice that would enhance prospects for peace with Israel.

Utilizing U.S. Economic Leverage

Syria's problematic finances and its potential confrontations with the IAEA and the Hariri tribunal provide Washington with leverage that it can incorporate into its diplomacy with Syria to break the status quo. Exploiting pressure from the IAEA and the Hariri tribunal should be easy for Washington, since the pressure is coming from international institutions with established mandates. Utilizing U.S. economic leverage will be trickier, however. The United States has substantial "negative pressures" it can employ from the recently renewed Syrian Accountability and Lebanese Sovereignty Restoration Act (SALSA) and a series of executive and Treasury Department orders targeting Syrian individuals and banks. In terms of positive inducements or "rewards" in the event of peace, however, it is doubtful the United States can entice substantial foreign investment in Syria without addressing the country's worsening corruption problems. On a political level, should Syria conclude a peace treaty with Israel and implement reforms that would facilitate large flows of FDI, the minority networks in the security services and the bureaucracy stand to lose the most. Given Iran and Hizballah's close relationship with Syria's security establishment, the discontent of these networks could be exploited by Tehran to derail implementation of a future peace.

Damascus has thus far refused to address its support for terrorist organizations or domestic issues -- most notably human rights -- in its early dialogue with the Obama administration. No doubt terrorism will be on the agenda if the United States mediates Israeli-Syrian peace talks. But rather than dumping domestic issues -- a common practice in the past -- Washington should add rule of law to its list of priority issues for dialogue with Syria. By encouraging Damascus to promote rule of law, it could help tame the human rights and corruption excesses of the minority system. In the long term, greater rule of law could provide a foundation for future economic and political cooperation between Damascus and Washington in the event of peace. Damascus needs to understand that unlike its current friends in Tehran, the United States needs a strong legal framework for its investments to take root and deliver the peace dividend Damascus hopes for.

Andrew J. Tabler is the Soref fellow at The Washington Institute.

Why Mitchell Bypassed Damascus

PolicyWatch #1506
Will Mitchell's Trip Bypass Damascus?
By Andrew J. Tabler
April 13, 2009
U.S. special envoy to the Middle East George Mitchell is scheduled to visit Israel, the Palestinian territories, Egypt, the Persian Gulf, and North Africa this week. Conspicuously absent from his itinerary is Damascus. Despite a Syrian public relations campaign designed to exploit Washington's opening gestures with Syria as a major policy change, the exclusion of Damascus from the envoy's agenda demonstrates that the Obama administration continues to pursue cautious and critical engagement with the regime of Syrian president Bashar al-Asad.
The Syrian-U.S. Expectations Gap
Following the November 2006 Iraq Study Group's recommendation to engage Syria and Iran, the Asad regime hired a British public relations firm to develop a strategy targeting the international community. In January 2007 Abdulsalam Haykal -- a businessman close to the Syrian regime -- and Syrian historian and political commentator Sami Moubayed launched Forward Magazine (Syria), a monthly English-language glossy periodical that, according to its website, looks at "the bright side of things." The magazine featured a number of articles by or interviews with Syrian ambassador to the United States Imad Moustapha that were intensely critical of U.S. Syria policy.
In the wake of U.S. speaker of the House Nancy Pelosi's April 2007 visit to Damascus, a stark gap in expectations emerged between Damascus and Washington. The Asad regime demanded talks on "the horizon of issues" and a "package deal" on "comprehensive peace" that would solve some bilateral issues at the expense of others. In Washington, however, policymakers sought progress on all issues, most notably Syria's support for terrorism, efforts to undermine Lebanon's sovereignty, an investigation into the murder of former Lebanese premier Rafik al-Hariri, and increasing evidence of extensive Syrian facilitation of foreign fighters into Iraq. Many also doubted that the Bush administration or its successor would conduct immediate high-profile engagement with Damascus, pointing to the poor track record of U.S. officials engaging Asad and Damascus's new and unexpected maximalist demands for engagement.
Moubayed was soon tapped by the regime to serve on the "U.S.-Syria Working Group" -- a "Track Two" dialogue between Syrians and Americans organized by the U.S.-based Search for Common Ground. After Syria announced in May 2008 that it was involved in indirect peace talks with Israel, Moubayed and two other Syrians visited Washington the following July to exchange views with a number of policy think tanks and former U.S. officials with the goal of narrowing the gap between the two positions.
Not only did Syria's expectations remain unrealistically high, but it was clear Damascus anticipated an early visit from the next U.S. president as well. Two days following Barack Obama's election, Moubayed penned the article "Abu Hussein's Invitation to Damascus," which outlined ten things Obama must do by inauguration for Syria to receive him "as a guest of honor in Damascus, the way it did with Jimmy Carter and Bill Clinton." Some of the Syrian points, including appointing a U.S. ambassador to Damascus, helping Syria deal with Iraqi refugees in Syria, and sponsoring Syria's indirect peace talks with Israel, were well known to U.S. officials. Unexpected, however, were further demands that Washington lift U.S. sanctions on Syria, recognize "that no problems can be solved in the Middle East without Syria," and "help Syria combat Islamic fundamentalism." While Moubayed later insisted his article only reflected his own views, journalists and analysts widely regarded them as reflecting those of the Syrian regime.
No Grand Gestures
Following Obama's inauguration on January 20, Syria's public relations campaign stalled. In addition to existing concerns with Damascus, U.S. officials were particularly concerned by Syria's refusal to comply with International Atomic Energy Agency (IAEA) requests for further inspections at al-Kibar -- the clandestine nuclear facility destroyed by Israel in September 2007, where IAEA inspectors found traces of uranium and graphite. So instead of the kind of grand gesture Syria wanted, Secretary of State Hillary Clinton dispatched Assistant Secretary of State for Near East Affairs Jeffrey Feltman on February 26 for talks with Moustapha. In the meeting, Feltman raised the issues of Syria's "support to terrorist groups and networks, acquisition of nuclear and nonconventional weaponry, interference in Lebanon, and worsening human rights situation."
Regime spokesmen immediately attacked Feltman for using the "language of the neocons." Following the meeting, however, both sides labeled the talks "constructive," leading to another round of discussions in Damascus on March 7 between Feltman and National Security Council Middle East director Daniel Shapiro and Syrian foreign minister Walid Mouallem. Following the talks, Feltman announced that both sides had found "a lot of common ground" and that instead of setting "benchmarks" for Damascus, each side was watching the future "choices" of the other.
Two days later, Asad stepped into the fray. In the ensuing twenty-three days, he gave six interviews to international media. But rather than dealing with the issues discussed during Feltman and Shapiro's visit, Asad targeted Israel, offering it only a cold peace, blaming outgoing Israeli prime minister Ehud Olmert for the failure of recent indirect Syrian-Israeli negotiations, and refusing to talk about cutting ties with Hizballah, Hamas, and Tehran. In another interview, Asad implied he had been asked to mediate between Washington and Tehran. Then, in his first-ever email interview with an American journalist, Asad told the New Yorker's Sy Hersh that he not only sought U.S. mediation with Israel, he also wanted direct contact with President Obama.
In the latest installment of the campaign, Moustapha told the Washington Times editorial board on April 7 that the United States had signaled a sea change in its relations with Syria, claiming that relations with Washington are suddenly so amicable that U.S. officials said, "We will never ask you to kick [Hamas politburo leader] Khaled Meshaal out of Damascus." He also predicted that Mitchell would soon visit the Syrian capital.
Washington's Cautious and Critical Approach
Contrary to Moustapha's predictions, no such policy shift has taken place. Instead, Washington continues to utilize a step-by-step pragmatic approach to engaging Damascus. Unlike most other countries on the U.S. State Sponsors of Terrorism list, the United States and Syria have diplomatic relations and functioning embassies. Following the Feltman-Shapiro meeting, Washington is now watching Damascus's choices on the issues discussed. Thus far there has been some diplomatic motion on Lebanon and Iraq. On March 24, Syria officially appointed its first-ever ambassador to Lebanon (who has yet to be posted). Syria's foreign minister, Mouallem, visited Baghdad the following day for talks on border security and committed Syria to "whatever help is necessary" for a successful withdrawal of U.S. forces from Iraq. Washington is now waiting for Syria to follow through on both commitments. On the ground in Damascus, Syria has allowed the reopening of the American Language Center, an English-language institute affiliated with the embassy that was closed along with the embassy's cultural center and the American school following the October 29 U.S. raid on terrorist bases near the eastern Syrian town of al-Soukkariya.
In other areas of U.S. concern, however, progress has yet to be made. Syria continues to refuse IAEA requests for further inspections or to talk about its worsening human rights situation. Finally, Damascus has yet to evince its much-trumpeted ability to rein in weapons smuggling by Hamas or to bring the group into a Palestinian unity government with Fatah.
Dilemmas Reveal Intentions
With Damascus unfortunately more interested in public relations than in addressing outstanding bilateral issues, Washington's step-by-step approach seems set to continue. In the short term, a key test to see if Syria is capable of cooperating with Washington will be Lebanon's June 7 parliamentary elections, which U.S. policymakers are watching closely to see if the poll will take place without Syrian interference or assassinations. Concerning Iraq, Washington is waiting to determine whether Syria can follow through on its promises to stop the flow of jihadi fighters across its borders.
In the long term, however, Washington's biggest challenge will be to devise a strategy that puts the Syrian regime into policy dilemmas that will reveal whether it will eventually conclude and implement a peace treaty with Israel and realign itself away from Iran. By making clear agreements with the United States and implementing them, Asad has the opportunity to rebuild trust with Washington. Only when this is accomplished will grand presidential gestures to Damascus become a viable option in Washington's competitive policy environment.
Andrew J. Tabler, cofounder and former editor-in-chief of Syria Today, is a Soref fellow at The Washington Institute.

Talking to Syria: An Important Test for Damascus

Talking to Syria: An Important Test for Damascus
NYTimes.com, March 4, 2009

By Andrew J. Tabler

The New York Times convened an online panel of five Middle East experts to discuss the Obama adminstration's recent decision to send two diplomats to begin "preliminary conversations" with the Syrian government. The following is a contribution by Washington Institute Soref fellow Andrew J. Tabler, the co-founder and former editor of Syria Today. Read the entire discussion on the Times's website.


Secretary of State Hillary Rodham Clinton's decision to dispatch two senior officials to Syria is an important early test to see if engagement will lead Damascus to re-evaluate its policies at home and abroad.

Washington's list of grievances with the Syrian government has never been longer, including its support for Hezbollah, Hamas and jihadis entering Iraq, its efforts to undermine Lebanon's sovereignty and its poor human rights record. Making matters worse, a report last week by the International Atomic Energy Agency all but confirmed suspicions by American officials that a site in eastern Syria bombed by Israel in September 2007 was part of a clandestine nuclear program.

Dispatching Jeffrey Feltman, the acting assistant secretary of state for Near Eastern affairs, sends a signal to the Syrian leadership that discussions will be about the hard issues that divide the two countries. Mr. Feltman is a former United States ambassador to Lebanon whose support for that country's anti-Syrian March 14th alliance -- which leads the current government in Beirut -- openly angered Damascus. In sending Daniel Shapiro, the Middle East chief on the National Security Council and an adviser to the Obama campaign, Washington is showing Damascus that President Obama is listening.

The risks of engagement with Syria are all too apparent to United States officials, as the poor track record of American officials visiting Damascus shows. Its position on Hamas, Hezbollah and jihadi fighters are a tough sell. On the one hand Syrian government officials claim to have influence over these groups, but when confronted they often say the groups are outside their control.

But there are opportunities. Syria's economy is being hit hard by the global economic crisis, declining oil production and a third straight year of drought that has left the government there in a vulnerable position. This explains why more and more Syrian officials are now demanding that Washington lift its sanctions on Syria.

Frank talk combined with "smart sanctions" and political pressure from the Hariri Tribunal, along with the nuclear issue, could spin Damascus out of Tehran's orbit. And this "strategic realignment" is necessary for a significant improvement in relations with Washington -- and a peace treaty with Israel.

Global Economic Crisis Boosts Utility of US Sanctions on Syria

PolicyWatch #1482

Global Economic Crisis Boosts Utility of U.S. Sanctions on Syria

By Andrew J. Tabler
February 26, 2009

On February 9, the Syrian minister of transportation announced that Washington had granted a license allowing Syria to purchase spare parts for two Boeing 747s that have been grounded for years. The announcement touched off intense speculation that the Obama administration would lift U.S. sanctions against Syria that have been in place since 2004. Even as Washington appears to be softening its stance with an eye toward engaging Damascus, sanctions remain an important tool to ensure that engagement achieves U.S. policy goals. Rather than dropping sanctions, Washington should recalibrate them to leverage the economic pressure on Damascus that has been exacerbated by the global economic crisis.
Syria's Economic Woes

Despite U.S. sanctions, the Syrian economy has performed relatively well in recent years. Fueled by high oil prices and increased investment from the Gulf, Syria has posted an average annual economic growth rate of about 5 percent over the past five years. There are, however, big problems: oil production -- proceeds from which account for 27 percent of state revenues -- is declining by about 9 percent per year. And Syrian industry -- accounting for 28 percent of the gross domestic product (GDP) -- is struggling to compete under a flood of imports resulting from Arab and Turkish free trade agreements. Likewise, unemployment hovers around 9 percent, and a record three-year drought has devastated the Syrian agricultural sector (23 percent of GDP).

Since the global economic crisis hit, Syria's economic situation has worsened. The collapse in oil prices forced the state to revise its budget oil price downward to $51 for light crude and $42 for heavy, resulting in a record budget deficit of $4.8 billion, or roughly 10 percent of its GDP. Syria is a net importer of oil, however, and the state earns revenue from exports while the cost of importing petroleum products (largely fuel oil) is borne by consumers. In the past, the government subsidized petroleum products, but it raised prices in 2008 to a point where the government now earns revenue from domestic fuel oil sales. Therefore, a reduction in oil prices still reduces government revenue. With Syrian crude averaging $38 and $32 for light and heavy respectively, the Economist Intelligence Unit now estimates the budget deficit will swell to $5.2 billion.

Although the state usually makes up for budget shortfalls by slashing investment spending -- a line item that accounts for 40 percent of the 2009 budget -- this tactic will be more difficult now. Syrians born in the 1980s and early 1990s, when the country was among the top twenty fastest growing populations in the world, are now flooding the job market. According to Syrian deputy prime minister for economic affairs Abdullah Dardari, Syria will need $14 billion of investment over the next two years to meet the 6-7 percent economic growth targets required to create enough jobs for the growing workforce.

A recent Syrian Economy Ministry report quoted by news agency AFP stated that the crisis would result in an estimated 30 percent drop in foreign investment, which totaled $875 million in 2007. The report also estimated that expatriate remittances, which amounted to $850 million last year, would fall while prices would rise. Last year, the International Monetary Fund estimated Syrian inflation at a record 15 percent, up from 5 percent in 2007.

Impact of Sanctions

The bad economic news explains Damascus's recent shift in focus from the need for Washington to mediate peace talks to a demand for Washington to drop U.S. sanctions. In an interview with Reuters news service this month, Dardari said that "to have normal relations between Syria and the United States, sanctions should be lifted. . . . This is going to be a very important part of any dialogue. . . ." His statements echo those of Sami Moubayed, a member of the U.S.-Syria Working Group (whose Syrian members were handpicked by the Bashar al-Asad regime to participate in Track II dialogue) who first linked lifting U.S. sanctions to dialogue with Syria just two days after the election of Barack Obama.

These statements represent a reversal of the regime's standard rhetoric on sanctions. When the Syrian Accountability and Lebanese Sovereignty Restoration Act (SALSA) was implemented in May 2004, Damascus bragged that the sanctions would have little effect due to historically small amounts of bilateral trade. Many Syria observers questioned the utility of U.S. sanctions over the last few years, as spiraling food commodity and oil prices drove the dollar amounts (but not volumes) of U.S.-Syrian trade to all-time highs.

But there is ample evidence that U.S. sanctions on Damascus are having an increasing impact. SALSA, which bans all U.S. exports to Syria (except food and medicine), has hit Syrian aviation particularly hard. State-owned Syrian Air could not obtain parts for its fleet of American-made Boeing jets or purchase new aircraft from Europe's Airbus, which uses substantial U.S. content in its planes. SALSA also complicated Syrian oil and gas production by denying companies operating in Syria the necessary U.S. technology to increase diminishing Syrian crude output. Indeed, in the summer of 2007, Damascus blamed electricity blackouts on the "knock-on effect" of U.S. sanctions; companies specializing in major high-tech projects shunned operations in Syria for fear of running afoul of U.S. law. (The only legal exceptions to the sanctions were "export licenses" for U.S. goods for certain humanitarian purposes to promote the exchange of information and to help maintain aviation safety. It was under this provision that a license was issued to repair the two Syrian Air 747s last week.)

At the same time, U.S. actions targeting the state-owned Commercial Bank of Syria (CBS) have exacerbated Damascus's financial woes by making it more difficult to repatriate critical oil revenues. The U.S. Department of Treasury's March 2006 designation of CBS -- the depository for the lion's share of Syria's estimated $18-20 billion in foreign currency reserves -- as a "primary money-laundering concern" under the USA Patriot Act led all U.S. and a number of European banks to close their correspondent accounts. In anticipation of the move, Damascus switched state foreign currency transactions from dollars to euros, and since oil, the regime's lifeline, is denominated in dollars, the switch complicates the regime's ability to fund itself. In addition, the designation scared businessmen away from the CBS and toward the country's new private-sector banks, which operate under less regime control, effectively reducing the amount of cash the regime could access.

Executive orders freezing the U.S. assets of Syrian officials have likewise made global banks and investors wary of doing business with Syrian officials and regime businessmen. Last May, two American executives of Gulfsands Petroleum -- a company contracted to boost Syrian crude output -- resigned, and the company moved its headquarters from the United States to London after one of the company's partners, business tycoon and President al-Asad's cousin Rami Makhlouf, was targeted by an Executive Order focusing on public corruption in Syria. Later, Washington successfully pressured the Turkish mobile provider Turkcell to put off its bid to buy Syriatel, another Makhlouf-owned business. The U.S. designation was hailed by Syria's business community, which views Makhlouf, according to a new International Crisis Group report, as "a symbol of crony capitalism, resented by many colleagues for having bullied them into forced partnerships or out of lucrative deals."

Smart Sanctions Key to Success

As the fiscal crisis unfolds in Syria, existing U.S. sanctions could have a powerful negative impact on the Syrian economy, prompting Damascus to reevaluate its policies -- on U.S. designated terrorist groups (Hamas, Islamic Jihad, and Hizballah), Lebanon, Iraq, and weapons of mass destruction -- to obtain relief. This kind of policy review could form the core of future Syrian-U.S. dialogue. To ensure U.S. leverage, Washington should recalibrate sanctions based on a clear understanding of Syria's fiscal problems and changing socioeconomic trends, rather than lift sanctions as Damascus suggests. The resulting "smart sanctions" should be a key element of a comprehensive U.S. strategy to put Damascus into dilemmas in which its choices will clearly signal whether Syria intends to continue fanning the flames of regional militancy or to play a productive role in reinvigorated regional peacemaking.

If these targeted sanctions are effective, Damascus will be forced to choose between continuing its policies and suffering the economic consequences, or concluding clear agreements with Washington to change its policies and gain American assistance to put Syria on the road to prosperity. U.S. sanctions contain sticks and carrots to lead Damascus down this path. In the weeks and months ahead, the challenge before the Obama administration will be to assess which sanctions have been most effective, and to link -- via a process of benchmarking -- the removal of sanctions to discernible and irreversible changes in Syrian policy.

Andrew J. Tabler is a Soref fellow in the Program on Arab Politics at The Washington Institute, where he focuses on how to engage Syria in a way that best advances U.S. interests.

IAEA report on Syria raises more questions on Al-Kibar site

A leaked version of the IAEA's report on Syria appeared on the ISIS site today. While it doesn't say conclusively that Syria was building a reactor, it doesn't look good.
Three issues immediately stand out:

First is paragraph 12. "Analysis of the environmental samples taken from the Dair Alzour site carried out by a number of the Agency’s Network of Analytical Laboratories revealed a significant number of natural uranium particles. The analysis of these particles indicates that the uranium is anthropogenic, i.e. that the material was produced as a result of chemical processing. As indicated above, Syria stated that the only explanation for these particles was that they were contained in the missiles used to destroy the building."

This basically says that the uranium traces found at the site are not depleted uranium, ultra-hard metal sometimes used in munitions. If true, this would serious undermine Syria's recent claim that the particles were from Israeli bombs dropped at the Al-Kibar site. The paragraph also suggests that the anthropogenic uranium found at the site could have been nuclear fuel to be loaded into the Korean-designed reactor the US and Israel allege was at the site. If true, this suggests the reactor was closer to being operational than previously thought.

Second is the previous paragraph, 11: "As part of its assessment, the Agency has conducted an evaluation of the water pumping infrastructure observed by it during the June 2008 visit to Dair Alzour. The results of that evaluation indicate that the pumping capacity is adequate for a reactor of the size referred to in the allegation (25 MWth). During its visit to the site, the Agency observed sufficient electrical capacity to operate the pumping system."

If true, this seems to contradict statements by Syrian officials that the site could not have been a reactor due to the absence of power lines or water cooling pipes.

Last, and most obviously, Paragraph 10 states pretty clearly that the structure resembles a reactor: "Its containment structure appears to have been similar in dimension and layout to that required for a biological shield for nuclear reactors, and the overall size of the building was sufficient to house the equipment needed for a nuclear reactor of the type alleged." the report also says construction on the building began in spring-summer 2001, during Washington's policy of "constructive engagement" with Syria - long before the US invasion of Iraq.

The IAEA is requesting Syria's cooperation in investigating its findings. It will be interesting to see how the Syrian government responds to the report ahead of the IAEA's board of governors meeting next week.

Report: IAEA finds traces of uranium at suspected Syrian nuclear site

By Reuters

United Nations investigators have found traces of uranium at a Syrian site Washington says was a secret nuclear reactor, nearly completed before Israel bombed the target last year, diplomats said on Monday.

They went on to say that the uranium contamination turned up in some environmental swipe samples UN inspectors took at the site during a visit last June. They said the finding was not enough to draw conclusions but raised concerns requiring further clarification.

The International Atomic Energy Agency had no immediate comment. But word of the finding leaked hours after IAEA officials confirmed Director Mohamed ElBaradei was preparing a formal written report on Syria for the first time.

Moreover, Syria has been made an official agenda item at the year-end Nov. 27-28 meeting of the UN watchdog's 35-nation board of governors, unlike previously when IAEA officials said initial inquiries were inconclusive.

Syria denies U.S. allegations that it was building a reactor with North Korean expertise designed to produce plutonium, the main atomic bomb ingredient reprocessed from spent uranium fuel, in violation of the Non-Proliferation Treaty.

Syria has argued that the unverified U.S. intelligence was fabricated.

ElBaradei told an IAEA board meeting in September that preliminary findings from test samples taken by inspectors granted a visit in June to the desert location hit by Israel bore no traces of atomic activity.

Diplomats accredited to the Vienna-based nuclear watchdog said a wider range of samples had now been analyzed by its sleuths and some had traces of a certain uranium compound.

"It isn't enough to conclude or prove what the Syrians were doing but the IAEA has concluded this requires further investigation," said one diplomat accredited to the IAEA.

"It was a man-made component, not natural [ore]. There is no sign there was already nuclear fuel or [production] activity there," another diplomat told Reuters.

This diplomat noted that such traces could have been carried to the site inadvertently on the clothes of scientists or workers or on equipment brought in from elsewhere.

That could echo a key, past finding made in the IAEA's long-running investigation of Iran's secretive nuclear program.

Diplomats close to the IAEA have said Syria has ignored agency requests to check three military sites for equipment or other evidence possibly linked to the alleged reactor site.

"The agency clearly thinks it has something significant enough to report to put Syria on the [nuclear safeguards] agenda right after North Korea and Iran," said a senior diplomat with ties to the Vienna-based UN watchdog.

"It's been made clear to us that the samples raise further questions," said a fourth diplomat, who, like others, asked for anonymity in exchange for discussing confidential information.

The IAEA has been probing Syria since May, shortly after Washington turned over intelligence about the site - but only months after an Israel Air Force strike flattened it and Syria swept it clean.

ElBaradei deplored the delay in intelligence-sharing and a U.S. failure to alert the IAEA before the bombing, saying this would make it very difficult for the world's NPT guardian agency to establish the facts "because the corpse is gone."

Damascus' ten demands to receive Obama

Syria's state-run newspaper "Al-Thawra" ran an article today saying that Syria "extends its hand" to President-elect Barak Obama. Meanwhile, Editor-in-Chief of the pro regime monthly Forward Magazine, Sami Moubayed, who also serves as a member of the US-Syria Working Group, has outlined ten things that the new president must do in order for Damascus to be "willing to open its arms" and receive him in Damascus.

If this is what Damascus is truly thinking (which it might to an extent), it indicates that engagement with Syria could be far more difficult than many analysts predict. The long list of demands outlined in the article are particularly ironic, given president-elect Obama's open willingness to engage Syria and Iran. The timing of the list's release - a mere two days following Obama's election - seems odd as well.

According to Moubayed, Syria can "use its weight in the region to moderate the behavior of non-state players like Hezbollah in Lebanon and Hamas in Palestine, and find solutions for the US standoff with Iran over its nuclear program."

In return, "What the Syrians are expecting 11 weeks from now when Obama is sworn in as president is the following:

• Appointment of a US ambassador to Syria. The post has been vacant since Margaret Scooby was withdrawn when relations plummeted over Lebanon in 2005. This would be accompanied by greater room to maneuver for Syria's ambassador to the US, Imad Mustapha, who has been spurned by the Bush administration because of his criticism of how Bush treated Syria.

• An end to the anti-Syrian rhetoric coming out of the White House and State Department since 2003. That would automatically reduce the anti-Syrian sentiment in the US media.

• Recognition of Syria's cooperation on border security with Iraq.

• Cooperation with Syria to deal with the 1.5 million Iraqi refugees in Syria.

• Lifting - in due course - of the sanctions that were imposed on Damascus and abolishment of the Syrian Accountability Act.

• Willingness to sponsor Syria's indirect peace talks with Israel, currently on hold in Turkey. That is something Bush curtly refused to do since the talks started in April 2008, claiming that Syria was more interested in a peace process than a peace treaty. Syria is sincere and the new White House must acknowledge that to deliver peaceful results in the Middle East. American guarantees and willingness to serve as an honest broker could make the talks successful, the Syrians believe, transforming them from indirect to direct negotiations. Syria is determined to regain the occupied Golan Heights (taken by Israel during the Arab-Israeli war of 1967) and Obama must help Syria achieve that if he is sincere about change in the region.

• Recognizing that no problems can be solved in the Middle East without Syria with regard to the Palestinians, Iraqis and Lebanese. Bush launched his famous "roadmap" for peace between Israel and Palestine, but bypassed the Syrians. If another roadmap were to be launched, Syria would have to be included.

• Help Syria combat Islamic fundamentalism that has been flowing into its territory from north Lebanon and Iraq. The deadly September 27 attack in Damascus - which left nearly 40 Syrians dead and injured - should have been a wake-up call for the Americans that unless cooperation is forthcoming from the US, Syria might become a battleground for extremists, as in the 1980s. Intelligence cooperation and technical assistance with the Americans is needed to curb and combat this Islamic threat.

• An apology, compensation and explanation for the air raid on Syria that left eight Syrian civilians dead in October 2008.

• Help normalize relations between Syria and America on a people-to-people level, which have been strained since Bush came to power in 2001. That would include giving visas to Syrians wanting to study or work in the US.