STRATFOR'S GLOBAL INTELLIGENCE REPORT
http://www.stratfor.com
01 December 2003

Middle East Peace: Europe Strategizes To Counter U.S. Hegemony

Summary

Europe is backing an unofficial Middle East peace proposal in a bid to strengthen its hand in the region and curb U.S. influence. The maneuvering will not lead to a clash between Brussels and Washington, but it will improve the geopolitical position of some actors in the region who are out of favor with the United States.

Analysis

The Swiss government hosted a party on Dec. 1 for the unveiling of a Middle East peace plan negotiated by former Israeli Justice Minister and leftist politician Yossi Beilin and former Palestinian Information Minister Yasser Abed Rabbo.

The Israeli government has warned the international community against backing the proposal -- dubbed the Geneva Accord or
Geneva Initiative. Palestinian leader Yasser Arafat has not backed it either, but he did send Palestinian National Security
Adviser Jibril Rajoub and Cabinet Minister Qaddura Fares to Geneva for the event; several Palestinian government officials
signed the plan.

The unofficial proposal has become part of a European effort to seize the initiative in shaping regional dynamics in the Middle
East. Europe is moving to build alliances with Middle Eastern partners, like Iran and the Palestinians, with which the United
States cannot directly align.

The European strategy is intended to curb the nearly boundless U.S. influence in the Middle East without triggering a direct
confrontation with Washington. The maneuvers will work to expand European involvement in the region in the short- to medium term and strengthen the positions of states in the area that are out of U.S. favor.

Europe Balancing the United States

European nations -- including France, Germany and close U.S. allies Britain and Spain -- do not want to become wholly
dependent upon the United States. Maintaining leverage in the region that is the world's single largest energy supplier is part and parcel of European independence from U.S. influence. European states need to be able to ensure long-term access to fuel supplies and not be held hostage by U.S. control over oil-rich countries like Iraq, Iran and Saudi Arabia.

To this end, the Europeans have pursued a number of options already:

First, Europe has strengthened its relationship with Russia, which sits atop the world's largest natural gas reserves and the eight largest oil reserves. BP recently finalized a $6.5-billion merger-takeover deal with Russian oil major TNK. The deal will help Russia develop its reserves, bring in foreign investment and increase oil supplies to Europe and the rest of the world.

Second, the Europeans are strengthening internal cooperation and building up their own defense force as a means of countering the U.S.-dominated North Atlantic Treaty Organization and reducing European reliance upon U.S. military support.

Third, Europeans are expanding both their political role and economic investments in the Middle East. Two of the more important tactics Europe has employed are backing Iran over issues the United States brought before the International Atomic
Energy Agency and creating a consortium to help develop Iran's South Pars natural gas project.

Washington wanted Tehran sanctioned for breaching the Nuclear Non-Proliferation Treaty and threatened Iran with review by the U.N. Security Council. Britain, Germany and France blocked the U.S. bid to put the matter before the council. The Europeans do not want a precedent that would allow the United States the tools to punish Iran in the future with either more economic and political sanctions or military force.

Iran's official Islamic Republic News Agency reported Dec. 1 that a consortium of European and Asian banks will provide $1.75 billion in credit to finance the ninth and 10th phases of development of the South Pars project. South Pars is thought to
be the largest nonassociated natural gas field in the world, with estimates ranging from 280 trillion to 500 trillion cubic feet.
The European involvement is part of a larger effort to build a mutually beneficial relationship with Tehran, help Iran re-emerge on the international stage and maintain a close working relationship that will balance any future U.S.-Iranian alliance.

An Alternative Road to Peace

Another part of the European strategy is the peace process. The timing of Europe's involvement has little to do with the Middle East peace initiative itself. Instead, it is directly related to the growing U.S. influence in the Middle East.

European states have been content until recently to sit back and let Washington control the issue. U.S.-backed proposals,
negotiations and dialogues with the Israeli government, the Palestinian government, Egypt and Palestinian militants typically
were mediated by officials like U.S. Envoy William Burns and/or CIA officials.

By stepping in now, Europe will seize the initiative after months of stalled official negotiations. It also bolsters former Justice
Minister Yossi Beilin, a potential contender for Israeli Prime Minister Ariel Sharon's position. Beilin has criticized Sharon openly for his unwillingness to negotiate a peace settlement.

The Geneva Initiative calls for a demilitarized Palestinian state, the creation of shared sovereignty for Jerusalem and
waiving the Palestinian right of return -- an historic sticking point in official negotiations; it secures Palestinian
recognition of Israel as a Jewish state and recognizes its right to exist, and calls for the near-total withdrawal of Israelis from the occupied Palestinian territories -- back to the 1967 borders -- and a fully recognized Palestinian state.

Its unofficial status means the plan is not likely to be implemented. Even so, it is forcing the Israeli and Palestinian
governments -- as well as the United States and traditional mediator Egypt -- to demonstrate that they are doing something.
Cairo has called for cease-fire talks in Egypt with all the Palestinian factions; Sharon met with his Cabinet to discuss
reopening talks with the Palestinian government; and Washington deployed Burns to the region for the first time in months in a bid to "restart stalled talks."

The U.S.-Israeli Reaction

So, while the Israeli and Palestinian governments, the United States and Egypt all play catch-up, the European-backed
initiative is unveiled at a star-studded gala in Geneva. According to an opinion poll commissioned by Israeli daily Haaretz, 31 percent of Israelis support the unofficial Geneva Initiative, 38 percent oppose it and another 20 percent have yet to form an opinion. Most telling is that 13 percent of Likud voters back the initiative.

The numbers bode ill for Sharon and members of his ruling party, who no doubt will be up in arms about the maneuverings of Beilin, a former Labor leader who first defected to the dovish Meretz Party and later established a new leftist party, Yaad. While not likely to topple Sharon's government, the peace plan does make
Sharon and his party appear impotent, and their constituency will be waiting for a response.

The United States can tolerate European involvement in Middle East peace talks as long as that involvement does not begin to
destabilize Sharon. Were that to happen, Washington would boost its own involvement to prevent Sharon's downfall. However, U.S. Secretary of State Colin Powell noted that Washington would be
open to alternative proposals, although Israeli government leaders slammed the unofficial initiative.

A Great, Friendly Game

Europe's efforts to curb U.S. influence do not stem from a dislike of Washington's agenda on moral or humanitarian grounds.
Rather, the U.S. agenda for the direction of the Middle East -- along with other issues -- competes directly with the European
vision and reduces the impact of European states like France, Germany and Britain on global affairs in everything from economics and energy to the military and politics.

In geopolitics, the game is not always about a direct conflict or clash, but often is defined by maneuvering, posturing and
positioning. Europe does not want a fight with the United States. Nor does it want to be dominated by Washington the way so much of the rest of the world is.

Neither side is likely to view the other with unguarded hostility or trigger any kind of open conflict in the short- or medium term. What is happening now is a European attempt to prevent the United States from acting exactly like what it is: the world's
only superpower.