Bush faces Iraq dilemma

By diplomatic correspondent Barnaby Mason

One of the sharpest challenges confronting the new American President, George W Bush, when he takes office later this month will be what to do about Iraq.

It's not a new problem, but it has become more acute with the erosion of UN sanctions and the split dividing the United States and the UK from the other big powers.

Iraq is a mess, in the words of one senior British official.

The British and the Americans are more isolated than ever, and the UK is looking for a lead from Washington.

'Re-energise sanctions'

The incoming Secretary of State, Colin Powell, says he wants to re-energise the sanctions.

Publicly, of course, both the UK and the US insist that President Saddam Hussein must let UN weapons inspectors back in and meet other conditions before sanctions can be lifted.

Mr Powell has left some wiggle room

At first sight, Mr Powell's remark about re-energising the sanctions regime appears to be an even harder line than that of the outgoing Clinton administration.

But he also said that sanctions "in some form" must be kept until Iraq fulfilled its agreements.

That phrase leaves open the possibility at least of recasting sanctions, even of eliminating the general trade embargo in favour of measures focused on items that could have a military use and on the Iraqi regime itself.

Potential deal

The trade-off might be an undertaking by the French and the Russians to tighten up the enforcement of the more limited embargo.

No one knows whether the Bush administration will be prepared to make such a move, but it would blunt the rising tide of accusation that sanctions in their present form simply make the Iraqi people suffer while doing nothing to undermine the regime.

Sanctions have not toppled Saddam

The most difficult issue is UN control of Iraqi oil revenues.

President Bush will certainly be lobbied by American oil companies, which want their share of the business of refitting the Iraqi oil industry.

And he is bound to be made aware of increasing Arab hostility to the western powers, especially from militant Islamic groups.

Violence between Israelis and Palestinians also feeds the fire.

And the October attack on an American warship in Yemen and more recent ones against British nationals in Saudi Arabia are a warning signal, and a reminder that, in the Middle East, everything is linked.