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THE POST-GULF WAR BARGAIN

A decade ago, the United States faced a defining moment in the Middle East. It had just deployed overwhelming force to liberate Kuwait and destroy Iraq's offensive capabilities. The outcome of the Gulf War, combined with the collapse of the Soviet Union, had left the United States in an unprecedented position of dominance in the region. Washington was debating what to do with this newfound and unchallenged influence. With the rapid collapse of the Taliban regime in Afghanistan, the United States finds itself again at a crucial point of decision in the Middle East. But this time it has had little opportunity to ponder what to do. As Washington scrambles to define a policy for "phase two" of the campaign against terror, policymakers should look back to how the United States fared the last time it had such an opening.

At the end of the Gulf War, some idealists argued that it was time to spread democracy to a part of the world that knew little of it. They suggested starting with Iraq, using U.S. military might to topple Saddam Hussein and install a democratic regime, as had been done in Germany and Japan after World War II. And they questioned the wisdom of reinstalling the emir in liberated Kuwait, advocating instead that the United States should bring democracy to the sheikhdoms of the Persian Gulf.

These ideas got short shrift at the time. President George H.W. Bush strongly preferred the regional status quo, and America's Arab allies, determined to return to business as usual, were quick to reinforce his instinct. The Saudi rulers, for example, had come to understand how dangerous talk of democracy was for their own grip on power when Saudi women spontaneously expressed their desire for greater freedom by doing the hitherto unthinkable: driving themselves up and down the streets of Riyadh.

Even while the Iraq crisis was raging, these Arab allies had anticipated the idealistic U.S. impulses and had found a way to deflect them. They extracted from the president and his secretary of state, James Baker, a promise that after the war the United States would focus on solving the Arab-Israeli conflict. Sure enough, Washington obliged, leaving them alone to reestablish the old order in their troubled societies.

In October 1991, the Bush administration successfully used America's newfound regional dominance to convene the Madrid Middle East Peace Conference, which -- for the first time in history -- launched direct peace negotiations between Israel and all its Arab neighbors. And in June 1992, sensing the change in the local environment, Israelis went to the polls and delivered a mandate to Yitzhak Rabin to pursue peace. Thus, when President Bill Clinton assumed office in January 1993, he inherited an ongoing peace process, one that held out the promise of agreements on all fronts in short order.

Nevertheless, the new Democratic administration had come to Washington eager to promote democracy abroad. So the officials responsible for the task -- particularly Morton Halperin on the staff of the National Security Council and John Shattuck in the State Department's Bureau of Democracy, Human Rights, and Labor -- asked why the Middle East should be exempt. But those with responsibility for the Middle East (myself included) put forward a more powerful argument in favor of focusing on peacemaking rather than democratization.

Our case was straightforward. There was a window of opportunity to negotiate a comprehensive peace in the Middle East. If the negotiations were successful, that outcome would have a profound effect on the region, as leaders would no longer be able to use the excuse of conflict with Israel to delay political and economic reforms at home. Once peace was established, moreover, resources previously devoted to war could be freed up for reform. In the meantime, the United States could not afford the destabilizing impact that pressure for reform would generate in deeply traditional and repressed societies. Pushing hard for political change might not only disrupt the effort to promote peace but could also work against vital U.S. interests: stability in the oil-rich Persian Gulf and in strategically critical Egypt. The United States should therefore focus its energies on peacemaking, while containing the radical opponents of peace (Iraq, Iran, and Libya) and leaving friendly Arab regimes to deal with their internal problems as they saw fit.

This argument prevailed, and on its basis the Clinton administration fashioned a bargain with America's Arab allies that held, more or less, until September 11, 2001. Moderate Arab states would provide the U.S. military with access to bases and facilities to help contain the "rogues" and would support Washington's efforts to resolve the Arab-Israeli conflict; in return, Washington would not exert significant pressure for domestic change.

A MARRIAGE OF CONVENIENCE

The United States did not ignore political reform entirely; it just tinkered with it on the margins. The Clinton administration supported the right of women to vote in Qatar, Oman, and Kuwait (in the case of Kuwait, legislation granting that right was defeated by Islamic fundamentalists). It urged the Algerian regime, which was battling Islamist militants, to open some political space for its people and engage Islamist fundamentalists in dialogue (much to the chagrin of the French, who were more directly affected by instability in Algeria). It supported successful efforts by the kings of Morocco and Jordan to co-opt their political oppositions into government and parliament. And it made a significant effort to support democratic reforms in Yemen in the hope that, over time, change there might spur similar reforms in the rest of the Arabian Peninsula. But when it came to the mainstays of U.S. interest in the Arab world, Egypt and Saudi Arabia, Washington left well enough alone.

The administration was particularly worried that the Algerian malady might spread to Egypt. President Hosni Mubarak's government had become, to use Shakespeare's words, "weary, stale, flat, and unprofitable" -- except, of course, for those lucky enough to be associated with it. Mubarak was confronting a particularly vicious form of Islamist militancy, promoted by the Gamayat Islamiya and the Egyptian Islamic Jihad, which were using murder and assassination to try to bring down the regime. In these circumstances, Washington decided to stand by Mubarak while he brutally suppressed his extremist opponents. There were occasional expressions of concern at human rights abuses cautiously documented by the State Department, but the Egyptians were far more sensitive to even this mild criticism than the administration expected them to be.

A high-level initiative, led by Vice President Al Gore, tried to get Mubarak to reform, privatize, and deregulate the Egyptian economy, in the belief that successful liberalization and modernization would have a profound demonstration effect on the rest of the Arab world and help Mubarak meet the basic needs of his people. But the Gore-Mubarak Commission was very much a partnership in which the United States provided encouragement but let the Egyptians dictate the pace.

In the Saudi case, the Clinton administration indulged Riyadh's penchant for buying off trouble as long as the regime also paid its huge arms bills, purchased Boeing aircraft, kept the price of oil within reasonable bounds, and allowed the United States to use Saudi air bases to enforce the southern no-fly zone over Iraq and launch occasional military strikes to contain Saddam Hussein.

Under pressure from Congress, the State Department occasionally and delicately raised concerns about religious freedom. But it never mentioned the "d" word. It watched the Saudi regime lock up or deport its opposition. When 19 American soldiers were killed in the terrorist bombing of the Khobar Towers in 1996, the United States accommodated the Saudis by moving the bulk of U.S. forces out into the desert, where they would be unseen and less easily targeted. (Typical of the bargain, the Saudis paid the bill for the move.) The administration tussled with the Saudi government to get access to the perpetrators, but the attempt succeeded only after the Saudis had reached a modus vivendi with the Iranian government and were confident that the trail of evidence would not be adequate to justify U.S. retaliation against Tehran. And perhaps most significant, in retrospect, the administration tolerated Saudi Arabia's relationship with the Taliban regime in Afghanistan, hoping that the United States could use Saudi influence to get the Taliban to expel Osama bin Laden.

Overall, the policy toward Egypt and Saudi Arabia seemed successful. Mubarak overcame the threat of Islamist extremism and stabilized his regime. His government was able to show modest achievements from the U.S.-sponsored economic reform. Although the United States had some tense moments with the Saudis, the relationship served the interests of both sides. Despite occasional protestations to the contrary for the benefit of their respective publics, both the Egyptian and the Saudi regimes were comfortable with the containment of Saddam Hussein and willing to assist the United States quietly in its use of force to maintain that containment. Both balked when it came to providing support for an effort to remove him, but since the United States had little confidence in that endeavor itself, their demurrals did not pose a significant problem.

The disillusionment, to the extent there was any, came from the failure of both Egypt and Saudi Arabia to play any significantly helpful role in the Arab-Israeli peace process, which the United States had launched partly at their behest. The Saudis provided modest financial assistance to the Palestinians but otherwise kept their distance; the Egyptians were usually prepared to endorse Palestinian Authority leader Yasir Arafat's decisions but rarely prepared to press him,

and Cairo occasionally even opposed Washington's efforts, especially when it came to promoting Israel's regional integration. At the critical moment in November 2000 when Clinton put forward U.S. parameters for resolving the Israeli-Palestinian conflict, both the Saudis and the Egyptians privately signaled their acquiescence but failed to provide any demonstrable support for the deal.

In spite of these shortcomings, however, Washington, Cairo, and Riyadh had a workable deal. Their bargain worked because they had a common interest in maintaining the stability of the status quo.

THE PROBLEMS UNDER THE RUG

And then came September 11 -- a direct attack on the United States killing around 3,000 people, a day of infamy that should have changed everything. Americans have started to ask questions: How was it that the leaders of al Qaeda, the organization that perpetrated the attacks, were a Saudi and an Egyptian? And why did so many of the hijackers come from Saudi Arabia and Egypt, America's two closest Arab allies? If the United States is going to uproot the terrorists, as President George W. Bush insists, does it not also need to, in the words of one U.S. official, "dry up" the Egyptian and Saudi "swamps" that bred them?

These questions are indicative of the new understanding Americans are developing of what happened while their government was busy taking Egyptian and Saudi advice and focusing on peacemaking in the Middle East. The effective suppression of the Islamist opposition in Egypt and Saudi Arabia forced the extremists first to seek refuge and then to set up operations outside the region, in Africa, Asia, Europe, and the United States. The al Qaeda network established by bin Laden (a Saudi) and his associate Ayman al-Zawahiri (an Egyptian) wanted to overthrow the Saudi and Egyptian regimes, but with U.S. support these governments had become hardened targets. So al Qaeda made a strategic decision to strike at their patron, the more powerful but also more vulnerable United States.

The Saudis had protected themselves by co-opting and accommodating the Islamist extremists in their midst, a move they felt was necessary in the uncertain aftermath of the Gulf War. Since Saddam Hussein remained in power, weakened but still capable of lashing out and intent on revenge, the Saudis could not afford to send their American protector packing. Instead, they found a way to provide the United States with the access it needed to protect Saudi Arabia while keeping the American profile as low as possible. They were not oblivious to the bonanza that a U.S. military presence in the Islamic holy land created for their internal critics. And once Crown Prince Abdullah assumed the regency in 1996, the ruling family set about the determined business of buying off its opposition.

One mainstay of Abdullah's policy was rapprochement with Iran, which required burying any connection between the Khobar bombing and Ayatollah Khomeini's regime. Less noticed by the administration, because it seemed less important to U.S. interests, was a new development in the partnership that had long existed between the House of Saud and the Wahhabi religious sect, which practiced a puritanical and intolerant form of Islam. This partnership had already resulted in the ceding of control over social, religious, and educational affairs to the Wahhabis in return for the burnishing of the Islamic legitimacy of the royal family. The vulnerabilities exposed by the Gulf War, however, created a greater need for shoring up Wahhabi support. The regime accordingly financed the export of Wahhabism through the building of hundreds of mosques and madrassas (religious schools) abroad. The activity was particularly intense in areas affected by the collapse of the Soviet Union -- the Balkans, Central Asia, Afghanistan, and Pakistan -- where the Saudis engaged in competition with Iranian mullahs for the hearts and minds of local Muslim populations. A public-private partnership was also created in which rich Saudi families would help to fund the enterprise.

While Saudi export of Wahhabism was proceeding apace, the charitable organizations established to funnel the money were being subverted for other purposes. It is now clear that bin Laden, despite being stripped of his Saudi citizenship, was able to take advantage of this system to raise funds and establish his network. Saudi-backed institutions such as the International Islamic Relief Organization, the Muslim World League, and the Muwafaq Foundation were used as covers for financing al Qaeda's nefarious activities. And the Sunni fundamentalist Taliban regime in Afghanistan, providers of sanctuary to bin Laden and his cohort, also found itself the direct and indirect beneficiary of Saudi largess.

Egypt pursued a different but in the end equally damaging route. With its much larger population and with far fewer resources for purchasing the allegiance of its disaffected, the Mubarak government confronted its violent and ruthless Islamist opposition with brute force. The resulting conflict cost more than 1,200 lives between 1992 and 1997. Given the terrorist tactics of the Islamist militants, the regime's response appeared the only answer. Along the way, however, Cairo also suppressed legitimate dissent, effectively reducing the already limited space allowed for civil society. The incarceration of Saad Edin Ibrahim, a distinguished Egyptian sociologist who criticized the regime for election irregularities, is a celebrated case in point. The regime also tried to introduce a law placing all nongovernmental organizations under strict government control. Having defeated its opponents through incarceration or exile, moreover, and having deflected the United States by insisting it focus on Arab-Israeli peacemaking, the Mubarak government also succeeded in deflecting criticism away from itself. An anti-American consensus was created between Islamist fundamentalists on the right, who regarded Americans as infidels; pan-Arab nationalists on the left, who viewed Americans as imperialists; and the regime itself, which found it convenient for the Egyptian intellectual class to criticize the United States and Israel rather than its own government's shortcomings.

In retrospect, the September 11 attacks and the hatred they revealed toward America in the Islamic world can be seen as the logical consequence of these trends. The question now, therefore, is not whether the United States needs to renegotiate the bargain it struck in the 1990s with the governments of Egypt and Saudi Arabia; the death of so many Americans demands such a reappraisal. Instead we should look to a new deal. What new bargain can and should be struck with Arab allies with whom the United States shares common strategic interests but whose policies are compromising U.S. national security?

A POSTNUPTIAL AGREEMENT?

America's Arab allies have been quick to register their requirements for participating in the coalition against terrorism: no Israeli participation, no attacks on any Arab country (including Iraq), and a new initiative to solve the Israeli-Palestinian problem. By and large the Bush administration has been responsive to these requirements. Israel's participation -- providing quiet intelligence cooperation, training for special forces, and advice on homeland defense -- has been as low-key as the Arabs' own. Washington's hot contest over whether to use this crisis as justification for launching a war against Iraq is apt to be deferred until business in Afghanistan is successfully concluded. And, succumbing to intense pressure from Saudi Arabia and Egypt, the president has overcome his skepticism and allowed Secretary of State Colin Powell to launch a new initiative to stop the violence of the renewed Palestinian intifada, the necessary precursor to a more robust effort to resolve the Palestinian problem.

The United States, however, has been slower to determine and register its own needs. The short-term requirement is clear enough: overt support for the war on terror. This demand is not yet an issue of military backing. The war in Afghanistan has required only low-profile intelligence, logistical, and communications support from U.S. partners in the Middle East, which the Egyptians and the Saudis have been willing to provide. The crunch will come later, if the United States decides to go after Saddam, since that effort cannot succeed without access to Saudi and Egyptian facilities. America's Arab allies are prepared to provide tacit support for a war in Afghanistan but are no longer willing to provide active military support for a war against an Arab country. Indeed, absent clear evidence of Iraqi involvement in the September 11 or anthrax attacks, if Washington judges a war on Iraq as necessary to the new bargain, there is unlikely to be any deal at all.

Yet if Egypt and Saudi Arabia will not back a U.S. military campaign to remove Saddam from power, Washington should at least insist that they actively join in the effort to shut down Middle Eastern safe havens for terrorists. As the United States turns its focus to other states that allow terrorists to operate from their territory, it will need its Arab friends to make clear to Iran, Iraq, Syria, and Lebanon that they will be on their own in the Arab world and the international community if they continue to provide succor for terrorists. In the 1990s, Saudi Arabia was able to convince Iran to end its support for terrorism and subversion in the Arabian Peninsula; it should now use the same powers of persuasion on all the state sponsors of terrorism in its neighborhood. Many of those governments will argue that terrorism is justified because it is aimed at Israelis. But President Bush answered that argument decisively when he addressed the U.N. General Assembly in November, asserting that "no national aspiration, no remembered wrong can ever justify the deliberate murder of the innocent." At a time when America's Arab friends are expecting the United States to promote Arab-Israeli peace, the United States will need them to actively oppose the Middle Eastern terrorism that has done so much in the past to impede its attainment.

Drying up the sources of funding for al Qaeda is also an urgent priority. The United States must insist that Saudi Arabia undertake a complete overhaul of public and private Saudi funding for charitable organizations and institute new regulations for monitoring the flow of funds.

One of the most important requirements will come in the battle for the hearts and minds of Muslims around the world. Here Washington needs the Egyptian and Saudi governments, as the most influential players in the Arab and Islamic worlds, to take the lead in legitimizing its assertion that it is not at war with Islam. The United States also needs its Arab allies to make the case to their own people and to Muslims everywhere that U.S. objectives are justified because the terrorists have defamed Islam and done great damage to the Islamic cause. Washington has to persuade Cairo and Riyadh to lead public opinion through a sustained campaign in their government-controlled media and their government-funded mosques. These governments' essential silence in these matters to date conveys the impression that they are afraid of public opinion. Yet the prevailing calm in their streets, in the face of an intense U.S. bombing campaign in Afghanistan, indicates that the Egyptian and Saudi regimes have less to fear than they imagined. They should at least start to encourage those thin, small voices in their media that are holding a mirror to their own societies rather than joining the default chorus that avoids responsibility by blaming the United States.

Calming the situation in the West Bank and Gaza will also help to remove the excuse that the Egyptian and Saudi governments use to avoid taking stands in defense of the United States. Powell's initiative, launched on November 19, presented the right mix: one part broad vision of an eventual two-state solution, and four parts specific steps involving stopping the violence, arresting terrorists, ending the Palestinian incitement, and ceasing settlement activity. Dispatching envoys to the region to sustain the initiative, as Washington has done, is also the only effective way to test whether September 11 has changed the calculations of Chairman Arafat and Israeli Prime Minister Ariel Sharon enough to end the intifada and resume meaningful negotiations.

But now that the United States has allowed Saudi Arabia and Egypt to make their bids for a new bargain, this time Washington must be much more insistent that these governments reciprocate. They must partner U.S. efforts to resolve the Palestinian problem. It is unacceptable that at a time when Washington is insisting that the Palestinian Authority end its anti-Israel incitement campaign, Cairo and Riyadh should do nothing to counter the vitriolic antisemitism in their media and the shameful efforts to legitimize terrorist attacks against civilians because they happen to be Israelis. It is also unacceptable, given the genesis of this new U.S. initiative, that the Saudi and Egyptian governments should sit on the sidelines while the United States tries to broker an agreement. They will need to be public advocates of fair and reasonable compromises on the critical issues of Jerusalem and refugees. And, in the Saudi case, Washington should not heed Riyadh's insistence on Israeli and U.S. recognition of a Palestinian state unless the Saudis are willing to reciprocate by extending their own recognition to Israel.

LET'S MAKE A DEAL

The longer-term U.S. requirements for a new bargain are even more problematic. If the United States is to "dry up the swamp" that generated the al Qaeda terrorist phenomenon, it is going to have to confront the dilemma of political change in the Arab world. In the past, recognizing that the dynamics of change in traditional societies could be deeply destabilizing, Washington posed the choice as one "between corruption and chaos." It opted to back corrupt governments because it feared that the alternative would be worse for vital U.S. interests. In the case of Iran, the United States backed the shah for fear of the alternative. In the end it got the alternative anyway. The theocratic regime of ayatollahs that replaced the shah was far worse, and U.S. support for the shah contributed to the profound anti-American manifestations of the Iranian Revolution. It was the worst of all worlds.

In the Egyptian and Saudi cases the dilemma has now been exacerbated. The United States backed their regimes and they begat al Qaeda. But insisting on political reform in Cairo and Riyadh could help bin Laden achieve his ultimate objective: toppling these regimes even after he has gone. That outcome would be the ultimate irony. Whatever the shortcomings of these regimes, fundamentalist alternatives are bound to be worse for the Egyptian and Saudi people, as they were for Iran and Afghanistan. And revolution in Saudi Arabia and Egypt could have a devastating impact on vital U.S. interests in the Middle East. Yet if they do not change their ways, over time these regimes could fall anyway, and in the meantime their failings may continue to generate unacceptable threats to U.S. national security.

The way out is to develop a middle path, working with the Egyptian and Saudi governments to promote political and economic reform -- even if doing so requires them to loosen some controls and take some risks. They have to be persuaded that opening political space for the encouragement of civil society in their countries can help to legitimize their regimes rather than destabilize them. The Saudis and the Egyptians will also need to be encouraged to develop a more tolerant model of Islam, one more reconciled to modernity, as an alternative to the hatred and xenophobia now propagated through school and mosque. And they will have be prodded into undertaking economic reforms that can provide meaningful employment and the hope of a better future for their young people, who now make up the majority in these countries.

All of this, of course, is much easier said than done. U.S. efforts to promote such an agenda would have met opposition even during easier times; in the midst of an Islamist confrontation with the United States, the resistance will be stiffer yet. On the other hand, success in the war against al Qaeda and the Taliban will open a window of opportunity just as did success against Iraq during the Gulf War a decade ago. When this window opens, the United States will need to seize the moment and put its demands on the table, so it should be formulating them now. In this regard, one question to examine is whether Islamic states that have embarked on political and economic reform can provide models for others to emulate. Jordan, for example, is a weak, resource-poor buffer state. Yet its ruling Hashemites have found a way to bring Islamic fundamentalists into the mainstream of political life even as the government vigorously pursues terrorist cells within the country's borders, and to promote economic reform while maintaining their peace treaty with Israel. Similarly, Morocco's leadership has brought its political opposition into the government while embarking on social and economic reforms.

America's Egyptian and Saudi interlocutors will come to the postwar bargaining table with counter-demands. Just as they did after the Gulf War, they will do their best to deflect the United States by focusing attention on solving the Palestinian problem. The United States has its own reasons for making this issue a priority, but this time around pursuing Arab-Israeli peace needs to be part of the bargain and not a substitute for it. And in return, Washington will need Cairo and Riyadh to act as full partners in the peacemaking effort.

But beyond that, the United States will have to persuade the Egyptian and Saudi governments to attend to its short-term needs in the continuing war on terrorism and to begin working on their own long-term need to address more effectively their people's basic requirements for greater political and economic progress. Persuading Arab leaders to stop financing terrorism, promote tolerance in their societies, and cooperate with the United States in shutting down terrorist safe havens in the Middle East are conditions that Washington must insist on -- the failure to do so will have a direct impact on U.S. national security. Persuading them to undertake difficult political and economic reforms, however, could have a direct impact on their own security, which would make them more resistant to U.S. arguments.

Nevertheless, the United States can no longer afford to desist from this longer-term task. At a minimum, America's Arab friends must know that political and economic reform will be an integral part of the ongoing U.S. agenda with them -- a constant issue in diplomatic exchanges, a subject for congressional scrutiny, and a component of U.S. assistance programs. Even if they start paying attention to these issues only to get Washington off their backs, they will create openings for the growth of civil society in their countries.

Merely listing the parameters of such a new deal with the leaders of the Arab world suggests how difficult and daunting the task of negotiating it will be. The main reason even to try, in fact, is simply because the United States has few alternatives. If it allows another return to business as usual, as it did after the Gulf War, it will sow the seeds of its own destruction in the Middle East -- and that of its regional allies as well.

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