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 5. TRADE  6. GULF



Oct 22 - 28, 2001

Britain backs creation of Palestinian state

British Prime Minister Tony Blair gave strong support on Monday for the creation of a Palestinian state and called for urgent efforts to revive stalled Middle East peace talks.

Speaking after talks in London with Palestinian President Yasser Arafat, Blair said there was a "renewed sense of purpose and urgency to move things forward". But he denied shifting British policy to placate Arab and Islamic unease over US-led strikes against Afghanistan in response to last month's attacks in New York and Washington.

"A viable Palestinian state, as part of a negotiated and agreed settlement, which guarantees peace and security for Israel is the objective," Blair told a news conference.

"The end we desire...is a just peace in which Israelis and Palestinians live side by side, each in their own state, secure and able to prosper and develop," he said. "That is the only sensible outcome." Blair gave no details of plans to put the peace talks back on track, saying the first crucial step was to find a willingness on both sides for progress. "There are ideas being worked on by the Americans and by others. It is possible to move the process forward but the will has got to be there," he said.

Arafat, standing at Blair's side in his Downing Street office, called on Sharon to resume talks immediately "so we can reach a comprehensive peace". Arafat said he also reiterated to Blair his "full commitment" to a shaky ceasefire between the two sides.

Israeli tanks enter 3 cities

Israel seized parts of three Palestinian-ruled cities on Thursday in retaliation for the assassination of Tourism Minister Reehavam Zeevi and in the gun-battles that ensued, three Palestinians, including a 10-year-old schoolgirl, were killed.

Hours later, a car explosion near the West Bank town of Bethlehem killed three more Palestinians, including Atef Abayat, a hardliner on Israel's most-wanted list.

The Israeli government gave an ultimatum to Palestinian President Yasser Arafat to "hand over" Zeevi's assassins or face harsh retribution.

The latest bloodshed threatened a US-led peace effort that could be crucial to enlisting Arab support for an offensive against Afghanistan.

The violence unfolded as Israelis observed a day of mourning for the ultranationalist minister.

Saudi investors fear freezing of their US assets

Several Saudi investors are concerned that their US assets may be frozen in the global crackdown on terrorism. Since last month's terrorists attacks on New York and Washington, a surge of anti-Arab sentiment abroad has prompted many Saudis to postpone business trips to the United States and take their children out of US schools.

Concerns were heightened by news that a well-known Saudi businessman Yassin Abdullah al-Qadi was included on the second US Treasury blacklist of groups and individuals suspected by Washington of links to terrorism.

Qadi says he and the charity he founded years ago have no links with Osama bin Laden, Washington's main suspect in last month's attacks. "I hope it doesn't turn into a witch-hunt," said a Riyadh-based financial manager on Sunday.

"People are having second thoughts about buying a house in the United States or putting a child in school there. I would expect less money to be allocated to the US". However, portfolio managers and bankers, who advise top Saudi clients, say that this has not been the case.

The latest embarrassment was the rejection of a $10-million cheque donated by Saudi Prince Alwaleed bin Talal, the world's sixth richest man, to victims of the collapsed World Trade Centre.

Prince Alwaleed's cheque was shunned because of his criticism of US Mideast policy, which New York Mayor Rudolph Giuliani interpreted as an attempt to justify the attack, which left more than 5,000 dead or missing. Just a few days beforehand, the Prince had announced he was adding a further $400 million to his US equity portfolio.

S. Arabia lodges protest with US

Saudi Arabia has officially protested to the US administration against the mistreatment of Saudi citizens in the US by security authorities after the Sept 11 incidents. In a letter of protest, presented to the US authorities , the Saudi ambassador to Washington, Prince Bandar bin Sultan, has written of the "excessive behaviour of the American security agencies towards the Saudis," Ahmad Qattan, director of Prince Bandar's office was reported on Monday as saying.

The US authorities have so far arrested and questioned 173 Saudis living in their country in connection with the attacks in New York and Washington. Fifty-four of them are still under investigation, he said while speaking to the Saudi daily Okaz.

Terror crisis hits tourism in land of the Pharaohs

The number one foreign exchange earner in the country of the pyramids and Pharaohs Egypt's tourist industry has been hit hard by the fall-out from the September 11 attacks on the United States.

Business has fallen off anywhere between 18 and 70 per cent, according to different sources in the industry.

The owner of the Paradisio tourist agency in Cairo, Ahmed Abu al-Wafa, told AFP: "Not a single booking has been made with the travel agency since September 11."

"It's dead calm," he said. "The last groups of tourists leave Egypt towards the end of October, and these were people who paid for their trips in advance and could not cancel.

"We have seen several dips in the past, especially after the Gulf War (1991) and the attack in Luxor (in 1997 when 58 tourists were killed by (Islamist militants), but this time things are different," he explained.

"Even if the American strikes on Afghanistan stop, the West's hatred of the East and Islam will remain," Wafa believes.

"Nobody can say when tourist activity will return to normal, and our only objective right now is to boost domestic tourism," the travel agent added.

The Egyptian tourism ministry last week announced a decline of 18.2 per cent in the number of foreign tourists in September 2001, compared with the same month last year.

Hotel room occupancy went from 72 per cent in September 2000 to 59 per cent in September 2001, it said, adding that "higher levels of fall-out" are to be expected over the next three months.

The head of the World Tourism Organisation, Francesco Frangialli, said last Friday in Kuala Lumpur that "reservation bookings are down around the world between 20 and 30 per cent".

"But for destinations like Turkey, Jordan, Egypt and North Africa, it's down by 60 to 70 per cent," he said.

Yemen economy hit by fallout

The economy of Yemen, already one of the poorest countries in the world, has been badly hit by the fallout of the September 11 attacks in the United States, especially its oil and tourism sectors, Yemen's planning and development minister said Sunday.

"The most notable negative impact of these terrorist acts was on the oil sector," Ahmed Mohammad Sufan told AFP.

He said the drop in the price of crude oil from 28 to 20 dollars a barrel "will affect our oil revenue, which represents 90 per cent of the country's total revenue."

Yemen produces 480,000 barrels per day and oil revenue last year jumped 40 per cent to 1.4 billion dollars.

Sufan also said the attacks had had "negative effects on tourism," estimating the losses so far at around 90 million dollars.

He also said that money transfers by the 100,000 Yemeni citizens living in the United States and Britain had dried up, also affecting the country's economy.

OPEC faces dilemma over triggering price mechanism

OPEC members are facing tough choices in efforts to boost slumping oil prices because triggering a price band mechanism has become difficult since the US terror attacks, a senior Gulf oil source said Tuesday.

"The choices are tough with regard to production cuts. Invoking the price band mechanism to keep prices between 22 and 28 dollars a barrel has also become difficult," the source told AFP on condition of anonymity.

The oil-producing cartel and non-OPEC members are facing an "unclear picture" about the future prospects of the oil markets, he said.

"Although the current situation in the oil markets requires a cut in production to boost prices, the world economic slowdown and the confusion resulting from the US-led military strikes on Afghanistan do not help in taking a decision.

"Oil producers are keen to assist consumer countries in facing these unfavourable circumstances," the source added.

Saudi pilot denies terror links

A Saudi pilot wanted by the Federal Bureau of Investigation (FBI) for questioning over possible terrorist links said in comments published on Tuesday he played no role in last month's US terror attacks.

Khaled al-Zaidi, owner of Al-Zaidi Aviation, is being sought by the FBI following his purchase of two small planes during a three-week stay in the United States just before the September 11 attacks in New York and Washington.

Zaidi told Al-Sharq Al-Awsat newspaper from Morocco that he had already met the US investigators from the CIA and the Federal Aviation Agency and given them documents about the planes' purchase.

Zaidi's company is US-registered and has branches in Saudi Arabia and Morocco. It plans to open a third branch in Egypt.

Lawmaker slams US ME policy

Criticizing New York's Mayor Rudolph Giuliani for rejecting $10 million gift from Saudi Arabia's Prince Alwaleed bin Talal for the victims of World Trade Centre attacks, a US Congresswoman has asked him (the prince) to donate to the black Americans who need help.

In a statement, Congresswoman Cynthia Mckinney of Atlanta, supporting Prince Alwaleed's right to speak his mind about US policy on the Middle East, said that "although your offer was not accepted by Mayor Giuliani, I would like to ask you to consider assisting black Americans who are in dire need right now."

She added:" I believe we can guide your generosity to help improve the state of black Americans and build better lives." Ms Mckinney said:" There are a growing number of people in the United States who recognize, like you, that US policy on the Middle East needs serious examination.

Kuwaiti Sheikh in political storm

A former Kuwaiti minister and ruling family member refused to back away Wednesday from a political storm he caused by criticizing Islamic groups he blames for the emirate's "reserved" support of the United States in its war against 'terrorism'.

Sheikh Saud Nasser Al-Sabah, a former oil and information minister and ambassador to the United States, charged early this week that the growing influence of Islamic groups in the emirate had resulted in a failure to sufficiently support Washington after the September 11 attacks.

"Kuwait's official response to the attacks against the US was reserved and lacked forcefulness, despite the solid US support for Kuwait during the Iraqi invasion in 1990," Sheikh Saud said in the Saudi-owned newspaper Asharq Al-Awsat on Saturday.

Israeli rocket attack kills three Palestinians

Israeli helicopter gunships Thursday killed a leader of Yasser Arafat's Fatah movement wanted for the death of a Jewish settler woman, as well as two other Fatah activists in Bethlehem, Palestinian security officials said.

The rocket attack came just a day after a Palestinian group assassinated Israeli cabinet minister Rehavam Zeevi.

It killed Ataf Abayat, wanted for the September 20 ambush near Bethlehem.

Two other Fatah members, Jamal Abed Ala and Salah Artekh, were also killed when the missile slammed into the jeep they were driving in east Bethlehem.

In almost immediate response, Palestinian gunmen opened fire on the neighbouring Jewish settlement of Gilo, on the southern fringes of Jerusalem.

Saudi stocks

The Saudi stock market rebounded strongly to close the week Thursday up 3.9 per cent, mainly on encouraging nine-month profits for a majority of listed firms, Bakheet Financial Advisors (BFA) said.

"The Saudi stock market witnessed a positive recovery this week and compensated for part of its losses" following the September 11 terror attacks on the United States, BFA said.

The NCFEI all-shares index closed at 2,381.14 points, up from 2,292.42 points the previous week, the BFA reported. The index is now 5.4 percent higher than at the start of the year.

The recovery was triggered by an increase of market leaders Saudi Basic Industries Co. (SABIC) and Al-Rajhi Banking and Investment Corp. (ARABIC), which rose 5.9 and 7.9 per cent, respectively. The two firms make up 31 per cent of the Saudi stock market.

Israel assassinates Hamas member

A member of the Palestinian movement Hamas was killed Tuesday in his home in the Gaza Strip by an explosion that was blamed on the Israeli army.

Yad Al Akhraz was killed when a blast ripped through his house in the Rafah refugee camp in the southern Gaza Strip, Palestinian hospital officials said.

Gaza Strip Hamas leader Ismail Haniya told AFP the dead man was a Hamas activist and accused Israel of blowing him up. He gave no further details.

Second bomb blast rocks Aden, no injuries

A bomb exploded Monday in a residential area of the southern Yemeni port of Aden, the second to rock the city in less than 24 hours, but caused no injuries, witnesses said.

The device was left in a trash can close to a post office and the explosion caused a fire that was doused by firefighters, witnesses told AFP.

A loud explosion rocked Aden on Sunday night, but also left no one injured, security officials.

The first bomb was also left in a trash can, near an immigration department building in the city center.

"We are fortunate that no casualties or injuries were sustained," one official said.

He added that investigations were underway into the blast, which occurred the day Yemen was celebrating the October 14 holiday marking southern Yemen's 1963 declaration of intent to eject the British and make a socialist revolution.

Qatar, Dolphin to sign final mega gas deal 'shortly'

Qatar and Dolphin Energy will sign the final development and production sharing agreement (DPSA) for a multi-billion-dollar project to deliver Qatari gas abroad "shortly", the UAE Offsets Group (UOG) said Sunday.

"The development and production sharing agreement (DPSA) with Qatar Petroleum (QP) is due to be signed shortly," UOG said in a statement.

The state-run UOG added that Dolphin Energy will select by early next year an oil major to become a strategic partner in the project.

"Over the coming weeks, the international oil companies will be given additional data and invited to submit their offers by late December. One of them is scheduled to be selected in early 2002," UOG said.

Riyad Bank net profits rise 17.8 pct

The Riyad Bank announced Saturday a 17.8 per cent rise in 2001 first nine months net profits despite unfavourable world economic conditions. The Bank posted profits of 1.008 billion riyals (268.8 million dollars) in the first nine months of 2001, compared to 855.6 million riyals (228.1 million dollars) during the same period of 2000, a statement said.

WTO talks venue in doubt

There's been increasing speculation that next month's World Trade Organisation (WTO) conference may change its venue.

The WTO had planned to meet in Doha, in the Gulf State of Qatar.

Now, EU Trade Commissioner Pascal Lamy and US Trade Representative Robert Zoellick have both said the planned location is now under review for security reasons.

Another hint comes from the communique issued by the AsiaPacific economic forum in Shanghai, which endorsed the launch of new trade liberalisation talks, but pointedly left out the name of the venue for the meeting.

Singapore has already said that it would be prepared to act as host, if necessary.

The WTO has said no decision has been taken about whether to change the venue.

Alawi, Fischer hold talks

Oman Foreign Minister Yousuf bin Alawi bin Abdullah and German Foreign Minister Joschka Fischer address a news conference in Berlin. The main topic of their talks was the Middle East after the attacks to New York and Washington on September 11.