In February 1979, Palestine Liberation Organization chairman Yassir Arafat, arch-foe of the Israeli rulers, was welcomed to Tehran by the Iranian revolutionaries as the first foreign "head of state" to visit them. The historical irony was manifest: Arafat was treated as a hero in the same land that had supplied much of Israel's oil; the country where Israelis had participated in training the SAVAK, the Shah's secret police; and where both Israeli and Iranian pilots had trained on U.S.-supplied Phantom F-4 fighter-bombers. Arafat announced that the Ayatollah Khomeini has assured him that Iran's revolution would be incomplete until the Palestinians won theirs. Within weeks, the PLO had installed a mission in the former Israeli embassy in Tehran, as well as in Ahwaz and Khorramshahr, in the heart of the Iranian oil province, selecting as its Tehran representative Hani al-Hassan, of al-Fatah's conservative "Muslim" wing, in a move obviously designed to appeal to the Ayatollah.

The PLO is thus now positioned near the heart of the industrial West's main oil reservoir in Saudi Arabia and the Persian Gulf states. And PLO radicals now see themselves closer to realizing Arafat's implied promise after the Camp David conference in September 1978-in response to Zbigniew Brzezinski's earlier phrase, "Bye-bye, PLO"-to threaten the whole U.S. position in the Middle East, a threat repeated in more explicit forms following the signing of the Egypt-Israel peace treaty in Washington, March 26, 1979.

Actually, Iran under the Shah had never been remote from the Palestine question. While keeping a close and special relationship with Israel and supplying it with oil, the Shah had also given at least lip service and diplomatic support to the Palestinian cause. For all his myopia and misjudgment at home, and his delusions of building a new Persian empire abroad based on the armed might he purchased from the United States, the Shah was shrewd enough to recognize that the Palestine question was the heart of the matter in the Middle East. Once, in an interview with this writer, the Shah used almost the exact words about the PLO spoken by Israeli Foreign Minister Moshe Dayan on February 13, 1979: the PLO "is not a state, but we cannot deny their position or their value in the conflict." The Shah believed that, to reach a peace settlement, "the civilian part, the refugees" would have to be taken into account, "not just the terrorists or the terrorist organization." The Shah in 1967 and 1968, when Ardeshir Zahedi was Iranian Foreign Minister, invited some al-Fatah representatives to Tehran. He even paid small subsidies to the PLO, at a time when the hospitality of most Arab governments toward the PLO was uncertain at best, and consistently ordered Iranian representatives in the United Nations to vote with the Arabs.

Despite this, the PLO leaders had marked the Shah as Israel's strategic ally; they consider his fall to be a major victory for the Palestinian cause. The Shah's regime and the American presence in Iran, which entailed major support to the same U.S. military-industrial complex that supports Israel, were equal targets of the PLO, whose guerrilla organizations trained Iranian revolutionaries in their camps in southern Lebanon, where they mingled with the Lebanese Shi'a villagers and their militias.

What are the implications of the new alliance between the Islamic Republic of Iran and the PLO? Let us start by examining the role of Palestinians and of Shi'a populations in the neighboring Gulf states, the economic consequences of Iran's new orientation, and its immediate military implications for the Arab-Israeli conflict and for present and future conflict in the Gulf area.

All of these are serious enough. But the crux of the problems now exacerbated by the changes in Iranian policy lies, perhaps, in Saudi Arabia; unquestionably, the Saudi position on the Arab-Israeli conflict has now been stiffened, and Saudi fears increased, in ways that bear directly on Saudi-American relations and on the security of the vital oil resources of Saudi Arabia. The alignment of Iran with the Palestinian cause has in turn contributed to the new solidarity of the Arab countries in rejecting anything short of a total peace settlement that deals adequately with Palestinian aspirations as well as with the ultimate problem of East Jerusalem. Realities that U.S. policy had sought to deal with over a long period of time are much more pressing. How the United States responds could, in sober truth, determine whether the emerging situation means, as a PLO leader exuberantly claimed early in the year, "Bye-bye, U.S. interests in the Middle East."

II

Unquestionably, the Iranian revolution and embrace of the PLO have galvanized both the Palestinians and the Shi'a minorities living on the Arab side of the Gulf. Both communities live in considerable numbers in Iraq, Saudi Arabia, Kuwait, Bahrain, Qatar, and the United Arab Emirates. Their members had carefully followed Ayatollah Khomeini's sermons and exhortations, recorded during the Ayatollah's Paris exile on tape cassettes and sent around the world by couriers and long-distance telephone circuits. The Palestinians and the Shi'a, each for their own reasons, were generally electrified and enthused by the revolutionary victory in Iran. The image which radical elements have gained of the Iranian revolution is that of a victorious Shi'a-Palestinian alliance, which has declared it would go on to new successes for the Palestinian cause.

The Shi'a claim a majority in Iraq, which since the 1958 revolution has been ruled by coalitions of Arab nationalists and the Baath (Arab socialist) party dominated by Sunni Muslim army officers. Shi'a grievances have been both religious (as manifested in Shi'a disturbances in the Shi'a holy cities of Karbala and Najaf) and socioeconomic, with the large Shi'a business community often claiming Baathist-Sunni discrimination against them, as well as against the advancement of Shi'a in the civil service and the armed forces.

Traditionally, the Shi'a community in Iraq has not had effective leadership or organization, and it is too early to tell whether it will become more active in the new situation. But the potential for trouble is there, even though the threat to the Iraqi regime does not compare, at this point, with the renewed activity of the Kurds in Iraq-who had been ruthlessly suppressed by the combined action of Iraq and the Shah's Iran after the rapprochement between the two in 1975, but who are now already in semi-revolt against an Iranian regime whose armed forces are in disorder.

Elsewhere in the Gulf, tradesmen and merchants of Iranian origin largely account for between 30 and 40 percent Shi'a in the Kuwait population. The same groups bring the percentage of Shi'a in Bahrain up to close to 75 percent, 20 percent in Abu Dhabi, 30 percent in Dubai, 20 percent in Qatar, and 50 percent in Oman. These estimates do not include thousands of Iranians who live on the Arab side of the Gulf, since leaving home under the Shah's regime in order to evade military service. Hard-core pro-Khomeini activists were most in evidence, in early 1979, in southern Iraq, Kuwait, Bahrain and Dubai. Specifically, the new situation has brought more into the open the "Husseiniyas" (named after the Shi'a martyr, Hussein) or religious study groups, formed in semi-clandestinity on the Arab side of the Gulf. In early 1979, police in Kuwait, Bahrain and the eastern province of Saudi Arabia, near the oil fields, were trying to root out these cells and were arresting and interrogating their members, feeling them to be a potential political fifth column.

As for the Palestinians, estimates generally agree that they number 240,000 to 260,000, or 20 percent of the total population in Kuwait; about 45,000 or 22 percent in Qatar, more than the native-born Qataris; and 40,000 or perhaps 30 percent in the United Arab Emirates, where expatriate workers of all nationalities outnumber the native workers by 18 to one. (At the end of 1978, the total population of the UAE was 877,340, of which UAE citizens totalled only about 210,000.) In Saudi Arabia, Palestinians and Jordanians together total around 110,000. The Palestinian communities in Bahrain (which rarely admits Palestinians at all), Iraq and Oman (which tightly regulates their presence) are relatively much smaller, with very few in the two Yemens. Therefore, there are perhaps a total of 480,000 Palestinians in the entire Arabian Peninsula. Of these, about 150,000 are also registered as residents of Jordan, Syria and Lebanon, or wherever their families happen to live.

But the Palestinian presence is felt in Arabia, and in the opposition of the Arabian Peninsula's governments to President Sadat's peace treaty with Israel, in qualitative, rather than quantitative terms: the Palestinians of Arabia are not helpless, jobless refugees, like so many of their brothers and cousins in the camps of Jordan, Syria and Lebanon. Many hold important posts in the civil service, even as advisers to Gulf rulers (especially in Qatar and the UAE), and more work in the oil, banking and contracting sectors. Some have acquired local citizenship. There are also Palestinians serving in the regular armed forces of some of the Gulf and Arabian Peninsula states. Palestinians who are naturalized Kuwaiti citizens are numerous in the Kuwaiti officer corps in particular. (One high-ranking Palestinian in the Kuwaiti army, General Musbeh al-Budairy, was a former commander of the Palestine Liberation Army, the PLO's "conventional" military wing.) And there are a few Palestinians in the Qatar and UAE armed forces.

Virtually all of these "diaspora" Palestinians, despite the strong personal stakes many have built in the local economies, are strongly nationalistic and closely attached to the idea of a Palestinian homeland. And, in addition, there has long been underground activity in the Gulf area by the foreign operations branch of the Popular Front for the Liberation of Palestine (PFLP) of George Habbash-with secret cells among the Palestinians of Kuwait and a strongly entrenched position (along with the Democratic Front of Nayef Hawatmeh) in Bahrain's underground leftist movement, which has a long tradition of political and trade union activism. These two radical Palestinian groups have also been active in South Yemen and in Oman, contributing to the military threats to be discussed later.

The presence of PLO groups on the Iranian side of the Gulf could now add new coordination to any Palestinian subversive action on the Arab side. At the very least, the Gulf rulers and the Western oil and other interests working in the Gulf now have to give new weight to the potential revolutionary leverage of both the Shi'a and Palestinian elements throughout the area. One possibility might be disruptions in the oil fields, especially in a situation of heightened tension with Israel over the follow-on provisions of the Camp David agreements. Kuwait in particular might be a target for such action, although the Kuwaiti government has itself taken such a hard-line position that it would probably be able to control unauthorized actions. Historically, Kuwait has been responsive to the pressures of the Palestinians already entrenched there, and the likelihood is that all the Gulf states will maintain their internal stability in part by the same tactic-which, of course, has the effect of further hardening positions on the Arab-Israeli conflict.

III

The first and most obvious economic consequence of the Iran-PLO alliance was the cessation of Iran-Israel trade, and the cutoff of Iranian oil to Israel. Israeli exports to Iran, though only partly compensating for the value of the oil it imported, were not negligible and were estimated at $230 million in their peak year, 1977. (Beyond meeting most of Israel's own needs, much of the oil Israel received from Iran had been pumped through the Eilath-Ashkelon pipeline and then re-exported, in barter or compensation deals, from Israeli Mediterranean ports to Romania and other East European countries.) In immediate response, Israel made certain that the Egypt-Israel peace documents signed in Washington in March 1979 included a provision that the United States would guarantee Israel's oil supply for the next 15 years. So far, Israel has apparently been able to ensure its supplies by major stockpiling and by turning to such new sources as Mexico, but the guarantee has further increased the huge American commitment to preserve Israel's security.

Moreover, the National Iranian Oil Company (NIOC) has solemnly promised that it would boycott any international oil company known to be providing crude oil to either Israel or South Africa, even if that oil comes from non-Iranian sources. However, this promise has not been put into effect, despite the whip hand given NIOC by the world supply constriction caused by its temporary total cutoff during the revolutionary period.

More serious may be Iran's new involvement in the Arab economic boycotts of Israel and of Egypt. The Khomeini government announced in the spring of 1979 that it would apply the boycott and blacklist, administered by the Arab League office for that purpose in Damascus, and by the summer of 1979 Western businesses still trying to operate in Iran discovered that contractors were banned if they operate in Israel, and that similar rules were being applied to foreign marketing, manufacturing or trading firms having projects in the Jewish state. Iranian dock workers, customs officials and others concerned with foreign trade had shown they were ready to follow the example of the oilfield workers (predominantly of Arab origin), whose work stoppage had so decisively aided the revolution, by enforcing the Arab boycott and blacklist rules.

The PLO, by mid-1979, should be able to exert more pressure for strict observance of the anti-Israel boycott measures, because it is now firmly entrenched in Tehran and Iranian Gulf ports, such as Bandar Abbas and Khorramshahr. There has long been a PLO economic intelligence unit which follows up on boycott measures in the strictly observant boycotting states, like Syria and Iraq, and which is now able to operate from its new Iranian and Gulf bases. And U.S. companies are more affected than others because of the strict requirements of the U.S. federal anti-boycott legislation. Many firms on the Arab blacklist, and merchant ships as well, had a large portion of their Middle East operations or port calls in Iran.1

In the case of Egypt, Iran will now cooperate with the boycott adopted by the major Arab states in the wake of the March peace treaty. The Shah's Iran had made a foreign aid commitment to Egypt estimated at about one billion dollars (much of it for work on the Suez Canal) and the unspent $500 million of this will now be withheld, together with a total freeze on Iranian investments in Egypt.

All told, apart from its universally recognized effect on the world energy supply situation, the Iranian revolution's economic impact is yet to be fully felt or adequately measured. But there can be no doubt that it puts Israel and Egypt under greater economic pressure, and affects a number of American businesses very adversely.

IV

The military impact of the Palestinian-Iranian alliance takes a number of forms, ranging from the Arab-Israeli military balance to the protection of the Strait of Hormuz and the related possibility of a renewed outbreak of the Dhofar rebellion in Oman. Some of these have direct implications for American military policy and action.

As regards the Arab confrontation with Israel, Israeli Defense Minister Ezer Weizman told newsmen during U.S. Defense Secretary Harold Brown's visit in February that even as Egypt is being removed from the roster of Israel's enemies, Iran is being added to it. General Aharon Yaariv, retired former military intelligence chief, now heading the Institute for Strategic Studies at Tel Aviv University, told this writer: "Iran is not going to field an army or send its F-14s against us tomorrow. But in the long run, we have to count the Iranians from now on as a member of the hostile Arab-Islamic coalition." Commanders of the new "revolutionary" Iranian armed forces have proudly stated, for Arab newspapermen, "Iran now considers that it is a confrontation state with Israel."

The fact is that the once proud and seemingly solid Iranian armed forces of 480,000 are in a shambles, mainly demobilized and dispersed. About $12 billion in orders for U.S. military equipment, from jet fighters to sidearms, have been cancelled by the revolutionary government. Ironically, Israel drew the first benefit: the Israelis are getting delivery of 55 General Dynamics F-16 fighter planes, part of a $3.5 billion order for the aircraft cancelled in February 1979 because Iran could no longer make payments or train enough personnel to fly and maintain the planes. Some 78 Grumman F-14 Tomcat planes, fully paid for by Iran before the revolution, are being guarded at air bases near Isfahan and Shiraz by the politically purged personnel of the Iranian Air Force. However, U.S. Defense Department sources believe that there are not enough fully trained Iranian pilots to fly all of these planes, or nearly enough trained ground maintenance crews to keep them in operational condition, let alone to service or fly the four or five squadrons of McDonnell Douglas Phantom F-4s which had been operational up to the time of the revolution.

Iran's ground forces are now reduced, in effective terms, to a few small detachments, largely occupied in skirmish actions with Kurdish, Arab Turkomen, Baluchi or Azerbaijani separatists now demanding full autonomy. Although the Iranian navy and air force have suffered less attrition, the sum total of Iran's military power is hardly likely to constitute any significant additional threat to Israel in the foreseeable future.

More portentous, however, is the fact that Iran has given up most of its air and naval outposts in the Persian Gulf, Oman and on the coast of the Arabian Sea. The site of what was to be the Shah's great strategic air and naval base of Shah Behar, on the Arabian Sea not far from Pakistani territory, is now abandoned, probably destined to become a fishing port. And Iranian forces which had been supporting the army of the Sultan of Oman against Marxist insurgents from South Yemen operating in Oman's southwestern province of Dhofar, have been recalled. They had included, at the peak of their strength, about 4,500 men, including elite ranger and counterinsurgency troops. At this writing, the new Iranian regime was still maintaining a garrison on Abu Musa island, seized together with two smaller islands owned by Arab emirates in 1971. But there remained no direct Iranian military presence elsewhere in the Gulf.2

In Oman, the Shah's army had played a special role in helping the Sultan suppress the Dhofar rebellion of 1969-1977 and even its reduced presence since then played a crucial stabilizing role. Now, the Popular Front for the Liberation of Oman (PFLO) is showing clear signs of reviving the revolt, and has the cooperation of George Habbash's PFLP Palestinians. The result could be the most immediate threat of trouble in the area, with the potential of spreading, through radical Palestinian links, to other areas of the Gulf in the form at least of scattered disruptive activity, in the oil fields in particular.

Moreover, what happens in Oman has a direct bearing on the security of the adjacent Strait of Hormuz. Here the withdrawal this spring of Iranian naval patrols creates a serious additional problem of its own, compounded by the effective withdrawal and helplessness of the Iranian air force. Through the narrow Strait pass an unending succession of tankers, carrying oil to all the markets of the West and the Far East, as well as Soviet and U.S. naval vessels. The Shah's Iran has served as watchman; now this crucial choke point is for practical purposes unguarded and unwatched. Saudi officials have told top members of the Carter Administration that they are extremely worried about the nightmarish possibility of a terrorist strike, such as mining of the shipping channel or the sinking of a supertanker to block it.3 However, the Saudis themselves have not been willing to permit or condone the stationing of U.S. air or naval forces close enough to the Strait to protect them.

Meanwhile, the Sultan of Oman, concerned to replace the departed Iranian forces, has asked the United States to step in with military aid, and in May 1979 a modest U.S. aid package-including artillery, antitank rockets and helicopters-had been decided on by the Administration and was being assembled for shipment. At the same time, the Sultan broached the subject of U.S. aircraft using on a regular basis the former Royal Air Force base on Masirah Island, well southwest of the Strait but within useful range, and on the U.S. side there has been a proposal to install sensing equipment in Oman that could keep traffic through the Strait under the same kind of surveillance that exists at Gibraltar. However, these latter possibilities have not yet been agreed upon or worked out, partly because the additional aid sought by the Sultan is substantial. For purposes of internal security, moreover, the Sultan has in the past had ties to the British, and British officers are still serving with the Omani forces. There may be room here for a division of effort designed to assure both Oman's security and adequate policing of the Strait, although the question of additional Western naval forces in the Gulf would require careful negotiation since U.S. naval use of Bahrain has been sharply curtailed in recent years. A renewed U.S. presence might run into problems stirred up by the radical elements mentioned earlier, as well as objections by the new Iranian regime.

V

Let us turn now to Saudi Arabia. Some of its concerns have already been suggested: what happens elsewhere in the Gulf could hardly fail to have serious repercussions within Saudi Arabia and in terms of Saudi interests, which include the preservation of a strong U.S. protecting role. But there are even more specific ways in which the new alliance between the Ayatollah's Iran and the Palestinians affects the Saudi situation.

In February 1979, as Secretary Brown visited the Middle East to assess the apprehensions of the region's leaders and their desires as to U.S. support, several Saudi cabinet ministers expressed their concern that the immigrant workers in the Kingdom, already close to one-and-a-half million in a total estimated population of eight million and still growing, might prove to be equally as subversive of Saudi institutions as the oilfield workers of Iran's Khuzistan area had been during the long strike that was decisive in the Shah's overthrow. And in that non-Saudi work force, although the Palestinian element numbers only some 110,000, it plays a crucial role, with some 60-65 percent of the total work force of the Arabian-American Oil Company (ARAMCO) consisting of Palestinians or Palestinian-born Jordanians. The temper of the situation can be gauged from the fact that, even before this year, ARAMCO, with Saudi support, excluded these workers from sensitive installations such as the Ras Tanura refinery and tanker loading terminal.

Whether the non-Saudi elements, and the Palestinians in particular, may constitute any serious threat to the regime is impossible to predict. There are no significant Shi'a elements in Saudi Arabia except in isolated pockets in the eastern province, and the strong adherence of the basic Saudi population to Wahhabism, plus the wide royal family network extending throughout the Kingdom, plainly make the basic situation very different from that of the Shah's Iran.

The security of the oil fields themselves could be a different and more serious question. As far back as the summer of 1973, the Saudi Petroleum Minister, Sheikh Ahmed Zaki Yamani, told this writer: "If war comes, we will have to shut off the oil. You know about the Palestinians and the other foreigners we have around us. Even if we deployed the entire Saudi army and national guard around the oil fields, we could not prevent sabotage by a handful of trained and determined professional saboteurs." And in a conversation which took place shortly after the implantation of the PLO mission in Tehran in the winter of 1979, Faruq al-Qaddumi, the "foreign minister" of the PLO's political brain trust, is said to have warned Prince Saud al-Faisal, the Saudi Foreign Minister, of the vulnerability of the Saudi oil fields, and also of the Islamic holy places, in case of general hostilities in the Middle East. Prince Saud responded: "The holy places are protected by God; as for the oil fields, they are protected by man."

The ultimate Saudi nightmare is, of course, a renewal of hostilities between Israel and the Arab states, with the United States inevitably assisting Israel. If such a thing happened, as one Saudi minister put it to this writer, how could the United States protect even its own vast oil interests, let alone the interests of its Saudi "ally" and friend? No matter how much the Saudis fear Soviet expansion, whether from South Yemen and Ethiopia, or from a total breakup of Iran and a Soviet military move to fill the vacuum that might leave, they still fear a showdown with Israel, in which Israel would again enjoy total U.S. support, even more. This is the real core of the Saudi dilemma, which has been deepened by the Iranian crisis.

Now, with the Palestinians more active and demanding, and with their new ties to Iran, the threat of sabotage to the oil fields must be taken into account even in a situation short of renewed war, and specifically if there should be a continuation and increase in the tension that already surrounds the ongoing negotiations over the West Bank and Gaza Strip, where basic Palestinian aspirations center. The fundamental Saudi position on the Arab-Israeli conflict, shared by all the ruling royal family, has always insisted on a comprehensive peace settlement that includes the return of East Jerusalem to some form of Arab control and a future, self-governing homeland for the Palestinian Arabs. These have been and still remain the twin pillars of Saudi policy and, in the words of one highly qualified U.S. observer of the Saudi scene, "No amount of persuasion, pleading or pressure by the U.S. Administration will change this, wishful thinking to the contrary." The point is, that in the face of increased pressures and threats, the Saudis have become, even since last September, decidedly more impatient and more demanding of early and visible progress toward these goals. And this, of course, accounts for the hard-line position they have taken at the two Baghdad meetings of November 1978 and March 1979, and in large part for their current deep dissatisfaction with American actions and policy.

The repercussions have also been evident in the internal differences between two schools of thought in the Saudi leadership. For some time these differences have been latent; now, in the face of Iran's alliance with the radical Arabs, they have become much more evident and important. To describe these differences as a "power struggle" or even "serious internal dissension"-as some Western commentators have been prone to do in recent months-is erroneous and misleading. What unites the whole of the royal family is far more deep-seated than such terms would suggest, and the question of the succession, which for a time created serious rivalry, has been worked out since 1977 (when King Khalid was hospitalized in London).

Yet, at the risk of oversimplifying the complex pattern of Saudi royal politics, there are today two important schools of thought, and the top leaders, King Khalid himself and Crown Prince Fahd, incline sometimes to the one and sometimes to the other. On the one hand, the "pro-American" school, according to insiders, is represented by most of the royal princes of the Sudairy family, one of the two main clans whose members hold many top posts. It includes Prince Sultan, the Minister of Defense and Aviation, and some leading commoners, including Sheikh Ahmed Zaki Yamani, the Petroleum Minister. The opposing, or rival clan, is led by Prince Abdullah of the Shomar family and, behind the scenes, by Prince Abdullah's elder full brother, Prince Muhammad, who voluntarily renounced his senior claim to the throne after King Faisal's murder in 1974, in exchange for Sudairy assurances that Abdullah would be in direct line to succeed Fahd as Crown Prince. Its views may be described broadly as "Arab nationalist" or "pro-Arab" for shorthand purposes.

The "pro-Americans," like their rivals the "pro-Arabs," are convinced that the United States holds the key to the future relationship between Israel and the Arab world, partly because of its growing dependence on Saudi oil (stemming from inability to solve its energy problem by developing alternative sources and by consuming less oil), partly because of its special links with Israel. They have argued ever since the 1973-74 Arab oil embargo that the Saudis should cultivate the American connection because the enlightened self-interest of both states lies in that direction. Yamani, with approval of both King Khalid and Prince Fahd, immediately raised Saudi production after the Iranian oil cutoff from an average of less than 8.5 million barrels per day (mb/d) to about 9.5 million barrels to help make up the shortfall and so accommodate the United States and the rest of the industrial world. Sheikh Yamani, however, admitted to a meeting in London last February that this step was "straining our capacity. . . . At present we are producing at about 1.5 mb/d more than we should, and accumulating a surplus which we don't need." The Saudis continued to resist, as they had at the OPEC conference in Abu Dhabi in December 1978, further upward turns of the OPEC oil price screw, as well as any moves away from the dollar as the standard for pricing oil, which would have had disastrous effects on the U.S. economy.

The other faction, with Abdullah as its main spokesman, and which in matters of oil production and domestic policy includes such leading, U.S.-trained technocrats as Sheikh Hisham Nazir, the Planning Minister, and Finance Minister Muhammad Aba al-Khail, favors oil conservation and lower levels of production and a rapprochement with Iraq and the other Arab states. Prince Saud al-Faisal, the present Foreign Minister, favors this "Arab nationalist" view and believes in balancing continued good relations with the United States by exploring any possible advantages which might be gained through ending the long proscription against relations with the Soviet Union-and in a policy toward the peace settlement, the recovery of Jerusalem and the future of the Palestinians which is militant, but sufficiently thoughtful and measured to bring Egypt eventually back to the Arab fold.

Crown Prince Fahd, though a Sudairy himself, has been in some senses an arbiter between the two factions. (By temperament, he tends to reserve judgment and to assess all factors before taking a position, and his inclination to listen with apparent understanding has sometimes caused him to be misunderstood by Westerners.) Thus, although basically adopting the hard-line policy followed this past winter, he has also endorsed and supported moves by the "pro-American" Saudis to mitigate Arab sanctions against Sadat. During the Arab Foreign and Economic Ministers' conference in Baghdad March 27-31, 1979, which voted a set of sanctions against Egypt for signing the treaty with Israel, the Saudi delegation vetoed a PLO call for an Islamic summit, strongly supported from the sidelines by the Iranian revolutionary government. (The PLO wanted to include the Islamic Republic of Iran in such a conference, in order to get anti-Egypt sanctions and the economic boycott of Egypt to be applied by all Islamic member states.) Though the Saudis have withdrawn most of their financial aid from Sadat, Crown Prince Fahd has successfully argued, with other Saudi leaders, that complete isolation and humiliation of Egypt must be avoided at all costs, so as not to bring about Sadat's overthrow and his replacement by a radical Egyptian leadership, whose actions might destabilize the entire region and plunge it into turmoil which could threaten Saudi institutions as well.

The rivalry between the two schools, as well as their occasional complementary character, has been seen in the last six months in the Saudi response both to developments in Iran and to South Yemen's military action against North Yemen. Abdullah's biggest power factor in Saudi Arabia is his control of the 30,000-man, U.S.-trained National Guard. After the Shah's departure from Iran, Abdullah quietly redeployed about 60 to 70 percent of the Guard, also called the "White" or tribal army, around the eastern province to seal off the oil fields. Prince Sultan, who as Minister of Defense and Aviation controls the regular army and the air force (the navy is still embryonic, and is being built from the ground up by the U.S. Navy and Corps of Engineers, which has contracted for a series of naval bases on the Gulf coast) did not move immediately to mobilize his forces. Sultan waited until South Yemeni troops, backed by Soviet, Cuban and East German advisers, moved into North Yemen in February and temporarily gained the initiative. Prince Sultan then ordered a full alert and partial mobilization, and Abdullah followed by doing the same for his National Guard troops.

After a tense cabinet meeting on February 28 in Riyadh, the government chose wording proposed by Sultan for its communiqué: "The Yemeni border conflict and the support given to rebel forces as a coverup for aggression endangers not only the security and stability of the kingdom, but also of the countries of the Arabian Peninsula. It is feared that the conflict may spread to other parts of the Arab nation, with unforeseen consequences."

Saudi Arabia's two-track policy of calling on U.S. help while working for inter-Arab conciliation then bore fruit. After preliminary agreement with Defense Secretary Brown during his February visit, the Saudis were pleased by the American response: a speedup in deliveries of old arms orders to North Yemen totaling $139 million dollars, and the unprecedented action by President Carter of declaring immediate aid to North Yemen worth about $400 million to be in the U.S. national interest, and so obtaining a waiver of congressional approval. Special U.S. weapons-training teams were then dispatched to Saudi Arabia and to North Yemen.

Almost simultaneously, Abdullah and Saud al-Faisal were instrumental in bringing about mediation which led to a meeting between the North and South Yemeni leaders in Kuwait in late March. They confirmed earlier ceasefire accords, and agreed to renew their old union project, signed after an earlier conflict (which involved direct Saudi-South Yemeni hostilities not far from some of ARAMCO's southernmost drilling sites in the Rub al-Khali Desert north of South Yemen's Hadhramaut) under pressure from Colonel Muammar al-Qaddafi, the Libyan leader. The renewal of the North-South union project settled nothing, but gained time for both sides as the U.S. arms deliveries to the North went ahead on schedule and the Soviet ones continued to the South, making Yemen a likely center of more conflict on the Western oil reservoir's approaches, as it has been in the past.

Thus, in the case of the Yemen crisis, the two contending viewpoints in the Saudi leadership turned out to be complementary and useful for the time being. But the division remains an important one. If the balance should move clearly to the "Arab nationalist" group, as it may well do if no progress is visible in American efforts to move the West Bank/Gaza negotiations forward, the consequences could be an even greater chilling of Saudi-American relations. For all the Saudi leaders, without exception, have been profoundly shaken by the Iranian revolution-which they believe the United States could and should have thwarted in some way-and doubly disturbed by the alliance between post-revolutionary Iran and the Palestinians.

VI

In sum, the change from the Shah's Iran to an Iranian regime allied with the Palestinians and supporting totally the hard-line Arab position toward Israel has had a profound and multifaceted impact on the whole Gulf situation. Already the Carter Administration has been forced to respond by new measures of military aid to North Yemen, and now by a modest program in Oman. But the problems have only begun to unfold.

Since the Iranian revolution, there have been growing signs that the U.S. Administration, however reluctantly, has begun to "think the unthinkable" and plan for contingencies of military intervention, if that should become the only way open to keep the oil flowing. Secretary of State Cyrus Vance, Defense Secretary Harold Brown and Energy Secretary James Schlesinger have all said or hinted strongly that the United States would, under extreme circumstances, fight to protect the flow of oil, either from Soviet interference, or a cutoff caused by other hostile forces in the area, such as action by the Palestinian guerrillas and radical Arab states, or even their Iranian allies. "There is no question," said Secretary Vance on CBS-TV's "Face the Nation" on March 18, "that we have vital interests" in the Persian Gulf. "We consider the territorial integrity and security of Saudi Arabia a matter of fundamental interest to the United States. We're talking about the stability of the region, which is important not just to the United States but to the world."

The U.S. Joint Chiefs of Staff have been studying the designation of a new U.S. Fifth Fleet and its deployment to the Indian Ocean, requiring stripping assets, including one aircraft carrier, from the Atlantic and/or Pacific. The Pentagon has also been studying how U.S. mobile strike forces could be deployed and used in the Gulf. An "Issue Brief," prepared by analysts of the U.S. Library of Congress' Congressional Research Service in April 1979, foresaw two eventualities in which the United States might use military force: "[Oil] producing states might ask for U.S. assistance if they risked losing resources as a result of internal turmoil or attacks by a hostile power." Or, "U.S. leaders might contemplate seizing selected foreign oil fields if embargoes or unbearable price-gouging created chaos in the United States or elsewhere in the industrial world." The study concluded that the United States could spare troops and the sea and airlift facilities to speed them to the Gulf in time only if there were no major war or crisis elsewhere in the world, and only at the risk of serious conflict, perhaps a nuclear one, with the Soviets.

Whatever form the new threats to stability and oil supplies may take, the fundamental question for American political policy is whether to oppose the new tide of radicalism represented by the Iranian-Palestinian alliance, or to seek to moderate it by working through such Arab allies as the Saudis. And if the latter remains the U.S. choice-as it clearly is-can the Saudis and the smaller Arab states of the Gulf, which look to them for leadership, remain such good friends and allies of the United States as they have been if the negotiations between Egypt and Israel for Palestinian self-determination and the future of the West Bank and Gaza, occupied by Israel in 1967, continue to appear as fruitless as their early prospects appear? This would appear to be the key challenge to U.S. foreign policy in the Mideast in the wake of the Iranian revolution.

Despite U.S. commitments to Israel not to include the PLO in the peace negotiations, it is now more than ever necessary that some way be found, and the sooner the better, to allow the Palestinians meaningful participation in the peace process. If this were done, the principal radical Arab argument-that the United States has no intention of seeking a real and just settlement for the Palestinians-would lose its force. Saudi Arabia, Jordan and other Arab governments which have been true friends and allies of the United States, but which are now drifting away, as U.S. Congressmen, commentators and others accuse them of sabotaging U.S. peace efforts, might be encouraged to renew their confidence in this country and its ideals. Sooner or later, this will involve doing what no U.S. administration has been willing to do since the Eisenhower Administration asked the Israelis to withdraw from Sinai and Gaza in 1957: confronting Israel on the issue of the Palestinian territories she occupied in 1967, and which she gives every evidence of wanting to acquire as permanent parts of her domain.

The United States, too, should carefully analyze and seek to understand, with the heart as well as the head, the human aspirations lying behind the Islamic revival, one aspect of the Iranian revolution and its search for allies elsewhere which seems to be sweeping a major part of the globe. Washington would be well advised to let the Iranian revolution and its ramifications in the Arab and Islamic worlds, which are far from finished, run its course without further U.S. interference in Iran.

This is not to say that the United States should condone violence and terrorism by either the Palestinians and their radical Arab allies, the violent responses of Israel to this terrorism, or the mass executions and other abuses of basic human rights that have proliferated in Iran since the revolution there. In approaching its relations with a bewildering variety of regimes in the Islamic world, from Morocco to Indonesia, the United States must more carefully study and learn to live, without collision if possible, with two basic trends: aggrieved nationalism, and aroused, reactive Islamic fundamentalism. There is a growing tendency to play up and to encourage, perhaps unconsciously, intersectarian and ethnic quarrels of the sort that split Lebanon asunder in 1975-76, and that now seem to be threatening Iran, Afghanistan, Turkey, and other countries on the periphery of the Soviet Union or China.

By avoiding partisan involvement in such quarrels, it may be possible to overcome the image of the United States, held in many countries of the Third World, as an ill-informed, indecisive giant which supports only dictatorial figures like the Shah. If Iran has taught us any lessons, one should be that part of the art of successful diplomacy, in an age increasingly dominated by the agonizing questions of oil and energy, lies in the difficult task of matching our own strategic needs with the domestic welfare and interests of friends on whom we depend, and who also depend on us.

Footnotes

1 Although not directly related to the Palestinian tie, one may note that Iran's revolution has led to another kind of apprehension on the part of Western investors and business firms. The Shah's government, like most other governments in the Middle East, required private firms to post irrevocable bank guarantees or letters of credit to secure completion of contracts and performance of contract provisions in good faith. Since the revolution, which has led to cancellation of around ten billion dollars in U.S. defense or defense-related contracts, U.S. companies have initiated preventive lawsuits in U.S. courts to head off any demands by the Ayatollah Khomeini's regime for payment on these guarantees. Enormous sums are involved. The Federal Reserve Board has estimated that federally insured U.S. banks had $17.75 billion in standby letters of credit outstanding by July 1978. These banks are fearful lest U.S. courts' interference in documentary credit transactions might undermine the basic integrity of the international letter of credit mechanism. U.S. firms, on the other hand, are afraid that Iranian bureaucrats, answerable only to nameless committees that have already shown how they can mete out rough revolutionary justice by executing scores of adherents of the old regime, including at least one Iranian Jewish merchant accused of contacts with Israel, might suddenly demand payment of the standby letters. United Technologies International, Pan American and Stromberg-Carlson were some of the major firms resorting to U.S. courts, but there had been no major confrontations at the time of writing.

2 The Shah's forces in Abadan and other points around the oil fields and oil ports of the Gulf had been close enough to permit the Shah several times to reassure the Kuwaiti rulers that any new attempt by Iraq, which wanted to annex Kuwait in 1961 when Kuwait won full independence from Britain, would bring Iranian intervention against Iraq. However, relations between Iraq and Kuwait are now friendly, and any renewal of that conflict now seems unlikely.

3 On June 11, 1971, a speedboat manned by Palestinian guerrillas made an unsuccessful rocket attack on the Coral Sea, a Liberian-registered tanker bound for Israel, near the Strait of Bab al-Mandeb at the southern entrance to the Red Sea.

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  • John K. Cooley, currently Pentagon Correspondent of The Christian Science Monitor, served as that paper's Middle East Correspondent from 1965 to 1978. He is the author of Green March, Black September: The Story of the Palestinian Arabs.
  • More By John K. Cooley