Clinton approves anti-Saddam funds

Saddam Hussein does not seem worried by the INC

The Clinton administration has approved new assistance to help opposition groups re-establish themselves in Iraq - but Baghdad has hit back with an offer of assistance to poverty-stricken Americans.

Under the $12m programme, the United States is to help Iraqi opposition groups distribute humanitarian aid and propaganda in areas of Iraq controlled by Saddam Hussein.

The programme has been controversial even within the Washington administration, while the Iraqi Government is believed to regard it as political provocation.

Baghdad - apparently in reaction to the Clinton plan - says it will offer $95m to the 30 million mostly black Americans it estimates live under the poverty line.

Baghdad says it wants to help America's poor

The official Iraqi News Agency (INA) said the decision was made at a cabinet meeting chaired by President Saddam Hussein.

INA also reported that a commission would be formed to supervise the distribution of the aid, and that UN Secretary General Kofi Annan would be notified of the donation.

Iraq itself is under a UN humanitarian programme which allows it to sell oil and use the proceeds to buy food, medicine and other goods.

The country's oil revenues have been under embargo since its invasion of Kuwait, in August 1990, which triggered the Gulf War.

Secret operations

In 1998 President Clinton reluctantly approved a plan to spend almost $100m on arming and training opposition groups - principally the INC - to topple the Saddam Hussein regime.

Mr Clinton's team has been less than impressed by the INC

But very little of the money has been spent, with the Clinton Administration unconvinced of the INC's competence or accountability.

Saddam Hussein expelled the INC from parts of Iraq allegedly under UN protection in 1996.

Mr Clinton's plan will help the INC set up offices in northern Iraq and southern Iran - from which it would launch secret operations to distribute food, medicine and propaganda in government-controlled areas of Iraq.

Bush camp divided

The decision to release funds to the INC comes when Western policy towards Iraq is at a crisis point.

International support for sanctions has been seriously eroded, and the Baghdad Government still refuses to allow any new weapons inspection team into the country.

Mr Bush's advisors are said to be divided

Mr Clinton's increasing support for the INC - under pressure from Congress - may please the incoming administration of George W Bush, who has vowed to be tough on Saddam Hussein.

Mr Bush himself and his defence secretary nominee Donald Rumsfeld are supporters of the Iraq Liberation Act. Mr Rumsfeld has urged Mr Clinton recognise a provisional government of Iraq rather than Saddam Hussein's.

But other leading members of the Bush team, such as Vice-President-elect Dick Cheney and designated Secretary of State Colin Powell are said to be much more sceptical about the Iraqi opposition.

A Bush spokeswoman said the president-elect would not comment on the policy until after his Saturday inauguration.