A Digest of the Week’s Exclusives

Two-Part Special Series on US-Israel Relations

Part I

18 August: The Bush administration, which only last month sought $200m in special counter-terror aid for Israel, has just suspended its allocation reflecting its displeasure, according to DEBKAfile‘s Washington sources, with the latest trends at the top of Israeli politics – chiefly the resurgence of the pro-Oslo camp with fresh demands for concessions and dialogue with Yasser Arafat’s Palestinian Authority and a new left-wing challenger for the Labor party leadership against defense minister Binyamin Ben Eliezer, Haifa mayor Amram Mitzna. Mitzna, who frankly bucks the policies articulated by the Bush team, is picking up left-wing fringe support as well as backing from an important wealthy elite, many of whose members made hay in the post-Oslo “New Middle East” economy. This faction is leaning heavily on Labor to quit Ariel Sharon’s national unity government. To deflect that pressure, Sharon is giving ground on some key security issues, particularly in the Palestinian arena, bringing down on his head a measure of American ire.

The revival of the Clinton-era Oslo faction in Israeli politics, which does not sit well with the Bush administration, is also resented by the majority of Israelis, who bitterly blame the Oslo regime for the miseries of suicidal terrorism, economic depression and galloping employment attendant on Arafat’s war of terror. The economic crisis contrasts dramatically with the boom in neighboring Jordan as a result of a US $500 million injection in expanding Aqaba port and its airfield, new south-to-north highways and new ground bases where US troops are stationed near the kingdom’s Syrian and Iraqi borders. Israel is not the only country suffering economic punishment at the hands of Washington. Three days ago, the Bush administration informed Egypt that supplementary aid would not be forthcoming in view of the imprisonment of the pro-democracy, American-Egyptian academic, Saad Eddin Ibrahim.

Last week, with inspiration from Washington, the new Palestinian finance minister Salam Fayyed created a central instrument of financial reform, the Palestinian Investment Fund, to operate under his direct control under a soon-to-be-appointed board of trustees. The new holding company’s powers will extend to the Palestinian Authority’s foreign assets, disbursements of international aid and management of cement and petroleum monopolies in Palestinian-ruled areas.

DEBKAfile recalls that under the Oslo accord arrangements, those monopolies were created as Israel government-approved partnerships between Palestinian circles close to Arafat and Israeli business associates close to leading Oslo architects. The revenues were to be split between Arafat and the Israeli interests involved. Behind this business association, Arafat’s financial advisers and the heads of Israel’s pro-Oslo camp forged a strong political alliance. The association came in the form of monopolies, which kept any outsiders from engaging in major transactions in Palestinian-controlled territory in basic commodities, such as petroleum flour, cement, paint, iron, foodstuffs, minerals and the now shuttered Jericho Casino.

The new Palestinian Investment Fund and finance minister Fayad were thus empowered by Washington to become an instrument of transparency – not only in respect of Palestinian Authority finances, but also those of its Israeli partners in the key monopolies – a direct hit at the resurgent camp of doves.

Part II

18 August: Two weeks ago, the Israeli prime minister’s chef to de bureau, Dov Weissglass, visited Washington with a surprising message. He urged the importance of including two Palestinian Authority officials, Mohamed Rashid and Mohamed Dahlan, both close to Yasser Arafat and high up in his terror machine, in the process of reforming the Palestinian administration. This request went down badly with leading US officials. When the Bush administration adopted Sharon’s demand for a thorough overhaul of the Palestinian administration to purge it of terrorists and corruption, it meant exactly that. No half-measures. Arafat’s men must be pushed out, and reformers brought in.

Then too, Ariel Sharon gave the nod to a list-ditch attempt by Israeli Labor ministers, Binyamin Bin Eliezer and Shimon Peres to rescue and re-empower Yasser Arafat’s regime. Behind them is a faction of wealthy businessmen, bankers and politicians with vested interests in preserving that regime who are now also backing Haifa Mayor Gen (ret.) Amram Mitzna in his race against Ben Eliezer for the Labor leadership. This attempt came in the form of the defense minister’s “Gaza First” initiative for handing sole responsibility for security in Gaza to the Palestinian authority as a test. He did not demur when Ben Eliezer took his initiative further, adding the West Bank towns of Bethlehem and Hebron to the experiment. Brandishing another red flag in Washington’s face the Israeli defense minister agreed to negotiate with Yasser Arafat’s national security adviser, Mohamed Dahlan, as well as the reformist interior minister Abdel Razzek Yahya.

At the same time there is no progress in another of Ben Eliezer’s projects to which Sharon has given the nod: a security fence supposed to protect Israel from West Bank Palestinian terrorist intrusions. This is not surprising. Cash is scarce because Washington is holding back.

Bush will not permit the Oslo faction to defeat his strategic plans for the Middle East or reverse his project for obliterating “evil’ regimes, whether Saddam Hussein’s in Baghdad or Yasser Arafat’s in Ramallah. To this end, the US government is slowly switching off the flow of supplementary dollars to Israel and will continue to do so until it is convinced that Ariel Sharon has stopped flirting with the Oslo faction and that candidates for prime minister of Mitzna’s ilk disappear.

20 August: Abu Nidal – once Yasser Arafat’s best friend; later turned fierce foe – was shot dead with four of his henchmen early Friday, August 16 by Iraqi military intelligence gunmen who burst into his home in Baghdad.

His murder raises some intriguing questions:

1. Why would Iraq want to dispose of a sick, clapped out terrorist who once performed services for Saddam Hussein?

2. Does his liquidation have any bearing on the approaching American military attack on Iraq?

3. Is it related to the intricate trade-off relations between Saddam Hussein and Yasser Arafat? Iraqi military intelligence and the Al Aqsa Martyrs Brigades? Or the networks currently engaged in preparing a mega attack in Israel?

Abu Nidal’s modus operandi as defined here by DEBKAfile‘s terror experts was singular:

A. First and foremost a mercenary, his clientele spanned Yasser Arafat in the early seventies – before they fell out over conflicting orientations; Libya’s Muammar Qaddafii in the late seventies, early eighties, for whom he carried out strikes in West Europe; Iranian intelligence, which used him as its surrogate overseas liquidator and, most of all, Saddam Hussein. Abu Nidal’s fee per operation ranged from $1 million to $3 million.

B. A sharp businessman, Abu Nidal diversified into selling arms and trafficking in his fellow terrorists’ secrets from a business base he set up in Soviet East Europe in the mid-70s, in cooperation with his hosts’ intelligence services. The Fatah Council’s Warsaw firm sold and leased weapons and ammunition to terrorist networks and paramilitary militias, such as the Irish Republican Army, the Japanese Red Army and the Popular Front for the Liberation of Palestine. Unbeknown to these purchasers, Abu Nidal retained clerks to note down the serial numbers of their purchases in order to track their disposition and sell the information to the highest bidder.

C. The dreaded Abu Nidal did not execute all the attacks credited to him. Some he claimed to build up his reputation and raise his fee; sometimes, rival terror groups borrowed his name. But most of all, he turned a pretty penny by renting out the name of his organization, to cover up the real perpetrators.

Our terror experts reveal for instance that, contrary to general belief, not Abu Nidal but a seven-man Iraqi military intelligence team carried out the attempted murder of the Israeli ambassador Shlomo Argov in London in June 1982, which prompted Israel’s invasion of Lebanon and led to the destruction of Arafat’s military infrastructure in south Lebanon and his own expulsion. Saddam paid Abu Nidal a quarter of a million dollars to attach his name to the crime.

Nine years later, Iraq paid him handsomely to say his men had murdered two of Arafat’s top aides, Salah Khalaf (Abu Iyad) and Hayel Abdel-Hamid, two days before the Gulf War began in 1991. Both men opposed Arafat’s alliance with Saddam against the US.

After 12 years of obscurity in Libya, Abu Nidal surfaced in late 1997in Cairo with a small band of trusted partisans. Thereby hangs an extraordinary tale, which DEBKAfile reveals here for the first time. Faced with virulent threats from extremist Islamic terror groups, Egyptian political and security leaders persuaded their opposite numbers in Washington that Osama Bin Laden’s al Qaeda and Dr. Ayman al Zuwahri’s Egyptian Jihad Islami could only be penetrated and fought by terrorists of the same ilk. Therefore, they proposed hiring arch terrorist Abu Nidal to extinguish the two rising fundamentalist menaces. DEBKAfile‘s Washington sources recall that the Clinton administration agreed to go along with the project – albeit passively – after some agonizing in the National Security Council.

They scrapped the Abu Nidal project after two years in mid-2000 when they caught him peddling information to a Qaeda about American and Egyptian secret combat tactics. The terrorist lost no time in slipping out of Cairo – heading first for Tehran, then Baghdad. Clinton called off the investigation against him before the CIA had a chance to establish exactly what secrets Abu Nidal had sold to Osama Bin Laden. Many counter-terror experts view this omission in retrospect as an error that left the Bin Laden-Zuwahri duo free to pus ahead with planning for the September 11 attacks on New York and Washington.

In Baghdad, he found a Saddam Hussein eager to exploit his knowledge to find out how much the Americans and Egyptians knew – or didn’t know – about al Qaeda, before deciding how safe it was to play ball with Bin Laden’s network without incurring American retaliation. Not long after Abu Nidal’s arrival, in July or August 2001, al Qaeda fighters began filtering into the pro-Iraqi fundamentalist Kurdish towns of Biyara and Tawil in the Shoman district of northern Iraq. Iraqi military instructors trained them there in the use of bombs and devices containing chemical and biological agents and possibly also in the handling of nuclear devices. Those camps have been taking in fresh intakes ever since.

This week, American ABC and CNN TV stations reported the discovery of a chemical weapons program run by al Qaeda members in northern Iraq, plus the fact that Washington had been planning a covert operation against it, which the President called off late last week.

This joint Iraq-al Qaeda WMD training project was first exposed by DEBKA-Net-Weekly Issue No. 54 on March 22, 2002.

The US government was chary of any action that might lead to the exposure of Washington’s indirect employment of the notorious terrorist and therefore held off at first from acting on the information. This constraint may have been superseded by Bush’s need to supply proof of a direct link between Saddam and global terror in order to silence the critics of his war plan for Iraq. Two options were open to him: One was to send a covert American force to snatch al Qaeda trainees with their Iraqi WMD instructors, catching them red-handed in their north Iraqi bases. The other was to have US special forces abduct Abu Nidal and bring him to America to tell his damning story against Saddam.

Neither option is available any longer to Washington.

Tipped off to their potential as President Bush’s cassus belli against Baghdad, the al Qaeda and Iraqi birds have flown Biyara and Tawil. Whereas Bush needed Abu Nidal alive, Saddam had a pressing need to shut the old terrorist’s mouth finally and without delay.

Four Iraqi bullets settled that problem permanently.

Moreover, by disposing of one veteran terrorist, Saddam Hussein issued a graphic warning to another – Yasser Arafat, showing him the fate awaiting him if he turned coat and threw in his lot with Washington. Arafat’s former lieutenant, the late Abu Iyad, paid the price in 1991; Abu Nidal in 2002.

21 August: The announcement Wednesday, August 21, of the Israel’s security and police authorities’ coup in capturing a six-man terrorist cell of Jerusalemite Arabs, all bearing Israeli identity cards, poses some questions. The communique reports that all six admitted to complicity in executing 8 of the most devastating terrorist attacks in the last three months, in which 35 Israelis died and dozens were gravely wounded in different parts of the country.

Without detracting from Israel’s success in rounding up the ring, DEBKAfile‘s counter-terror experts note the word “admitted” used instead of “committed” in the official communique – denoting reservations about whether the six suspects could have carried out this many operations over such a large area in so short a time – roughly five months.

One possibility is that they were mere pawns of the high command in Ramallah, part of its plan to try out Jerusalemite Palestinians as instruments of terror, to fill the shoes of West Bank terrorists locked in by the presence of Israeli troops in most Palestinian centers. Until now, Jerusalem Arabs, roughly one-third of the population, stayed clear of Arafat’s Intifada and prospered in comparison with their brethren in Palestinian-controlled areas. However, their usefulness clearly tempts, especially when combined with Jerusalem’s proximity to Ramallah. The Arabs of Jerusalem move around Israel freely with Israeli identity cards and Israeli number plates on the cars; they do no need permits to work in Israel – and many do. The cell’s commanders were therefore able to activate the six over an area of operation covering all of central Israel – Jerusalem, Tel Aviv, Holon, Rishon Lezion, Rehovot and Lod – in surveillance and as planners, liaison, field operatives and handlers of suicide killers, while avoiding the practice themselves.

Israeli defense minister Binyamin Ben Eliezer’s plan to induce a truce by the Israeli army’s experimental handover to Palestinian security of responsibility for terror prevention in the Gaza Strip, Bethlehem and possibly Hebron, is probably doomed to a (not very) quiet death – even after the capture of the dangerous terror ring in Jerusalem. Removing Israeli troops from West Bank towns would put the terrorists back in Israeli cities. Five suicide killers are known to be on their way to mass-casualty targets in Israel. The Palestinians are also trying to plant a truck loaded with chemical fertilizers converted into explosives in a large Israeli city center. Three more major strikes are planned for Jerusalem. Following their effective attack at the Mount Scopus campus, Palestinian terror masters are preparing further assaults on Israeli universities, now eyeing Haifa. There are also reports of potential terrorist landings by sea.

Perhaps the most curious feature of the official Israeli communique is the way it fails to attach the captured cell to any Palestinian group or organization, beyond the vague mention of Ramallah.

Some sources have tried attributing the ring to Hamas, maybe because its leaders declared they wanted no part of Ben Eliezer’s understanding with the Palestinian Authority. But the Hamas has no real standing in Ramallah, the source of the cell’s orders and explosives. This West Bank hub town just north of Jerusalem is the fief of one man – Yasser Arafat. The Ramallah reference is therefore nothing but a veiled hint at the man who rules the roost there.