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GULF

April 08 - 14, 2002

ISRAEL DEEPENS WEST BANK PRESENCE

The Israeli military operation in the West Bank has gone into its eighth day, with tanks reported to have pushed deeper into the town of Hebron.

Other Israeli forces have been battling Palestinian gunmen in the West Bank city of Nablus and the Jenin refugee camp.

And Palestinian leader Yasser Arafat is still confined to his compound in Ramallah.

In Bethlehem, troops are besieging a church where more than 200 Palestinians have sought refuge.

The Israelis say most of those taking refuge in the Church of the Nativity are armed fighters, but Palestinian officials say they are largely ordinary Palestinians who fled there from the fighting.

Israeli forces are now occupying all major towns in the West Bank except Jericho and have detained hundreds of suspects.

Palestinian fighters inside the Bethlehem church told on Thursday that Israeli forces had blown open the back door.

One of the priests trapped inside, church warden Father Ibrahim Faltas, said a gun battle had broken out.

The Israeli army denied that it had stormed the church, but said its soldiers had fired shots while chasing militants who had escaped.

More than 100 Israeli tanks and armoured vehicles occupied Nablus, the West Bank's biggest city, on Wednesday night.

Four refugee camps in the city are surrounded and there have been fierce exchanges of fire.

Casualties are reported on both sides, but there are no clear details.

The Palestinian leadership has asked the international community to intervene "urgently", while vowing that its fighters will continue to resist.

SAUDIS WITHDRAW $27BN

Some $27 billion was withdrawn from foreign banks by Saudi investors after the Sept 11 attacks up to January this year, market sources told the daily Asharq Al-Wast.

Most of the repatriated Saudi investments brought back were re-invested either in real estate or in the local stock market.

Ever since the Sept 11 incidents, and the negative fallout of the events for the Arabs and the Muslims in the United States and the West, there have been regular reports appearing here saying that the Saudi investors were feeling uneasy about their investments in that part of the world. Their worst apprehensions later became true when the authorities in the US froze the investments and the assets of a number of Saudi investors on charges of being linked to the perpetrators of the attacks on New York and Washington and a sort of racial profiling in the US.

The level of private Saudi investments in the US and elsewhere in the West are difficult to suggest and open to guesstimates. Some of the market analysts say it runs into hundreds of billion dollars or even more. Some of this money has apparently started trickling back into the kingdom, where it actually belonged, it now seems.

Dealers in real estate here point out to the rapid growth witnessed in the real estate market in the last quarter of 2001 and in January and February of the current year. This led to a perceptible revival of property development in the kingdom, specially in Riyadh, which is one of the fastest growing cities in the world.

Riyadh has recently witnessed a huge construction boom concentrating on the building of residential and commercial complexes, holiday chalets and expansion of property development in the north and east of the city. Many say this boom owes to the returning dollars.

The Eastern Province has also experienced a strong real estate revival, particularly along the sea front from Al-Khobar to Dammam, market analysts pointed out.

BUSH SENDING POWELL TO MIDEAST

Tanks thrust into another Palestinian city shortly before U.S. President George W. Bush called on Israel to begin withdrawing from West Bank towns it has reoccupied over the past week.

He said he had told U.S. Secretary of State Colin Powell to go to the region to revive efforts to achieve a ceasefire.

Bush, responding to key Arab and Palestinian demands, said Israel "must stop" building Jewish settlements in occupied lands and end its occupation in line with U.N. resolutions.

"The storms of violence cannot go on," Bush said in a White House speech. "Enough is enough."

Bush's speech coincided with another day of violence across the West Bank, where troops battled gunmen in the cities and refugee camps of Nablus and Jenin and tanks made a new incursion into the divided city of Hebron, witnesses said.

Bush called on the Palestinians to stop suicide bombings and had critical words for President Yasser Arafat, besieged by Israeli troops at his West Bank headquarters since last Friday.

OPEC HAS NO CONTROL OVER HIGH OIL PRICE - RODRIGUEZ

Opec Secretary-General Ali Rodriguez said the exporting group would boost output only in the event of a supply shortage and had no control over speculation currently driving oil prices higher.

Speaking to BBC radio, he said Opec would be taking a big risk if it opened up the taps now when demand for crude was low.

"We have to wait and see the situation because if we increase production now and the situation returns to normal maybe we can face a collapse of prices," he said, referring to Middle East violence which has fuelled oil market speculation.

"In this moment the fundamentals are balanced. The supply is satisfactory. In this quarter normally for seasonal reasons the demand is lower than in the rest of the year," Rodriguez said.

Asked if Opec was prepared to see the oil price stay at around $27 or higher, Rodriguez said: "If this is the result of speculation yes. If it is the result of some shortage of supply we will take some kind of action."

QATAR POISED TO EMERGE AS GAS TO LIQUIDS CAPITAL OF THE WORLD

Following recent initiatives on this front, Qatar has the potential to emerge as the gas to liquids "capital of the world".

"Gas to liquids will provide us with a great deal of flexibility and will provide the green fuel of the future. Gas to liquids development will complete Qatar's basket of gas products, perfectly complementing our LNG production and export facilities and our natural gas exports via pipeline," said Abdullah bin Hamad Al Attiyah, Minister of Energy and Industry.

In February, Qatar signed a statement of intent with Shell Gas & Power to study the development of building a gas to liquids facility in the Gulf state, using gas from the North Field.

EU PEACE BID ENDS IN FAILURE

A European Union mission to press for a Middle East ceasefire ended in failure after Israel barred two senior EU envoys from meeting besieged Palestinian President Yasser Arafat.

EU foreign policy chief Javier Solana and Spanish Foreign Minister Josep Pique cut short their trip, cancelled a meeting with Israeli Prime Minister Ariel Sharon and headed home rather than face humiliation as Israeli tanks poured into more Palestinian cities in defiance of the international community.

Pique told reporters after meeting the Israeli foreign and defence ministers and international peace mediators that Sharon's decision to deny the EU access to Arafat, a virtual prisoner in his Ramallah office, was "a very deep error".

60 NATIONS DEMAND ISRAELI WITHDRAWAL

At an open debate of the UN Security Council over 60 countries on Wednesday demanded that Israel pull its tanks and troops out of the West Bank cities immediately.

'US NOT DOING ENOUGH'

The former US Secretary of State, Madeleine Albright on Thursday joined hosts of critics saying that the White House was not doing enough to end the violence in the Middle East. She urged her successor Secretary of State Colin Powell to immediately travel to the besieged region.

ADNOC-SHELL CHARTS PLANS FOR SOUR GAS

A joint Adnoc-Shell study team has completed a feasibility study and produced a development concept to utilise Abu Dhabi's significant sour gas reserves, a top Adnoc official said.

"At the moment, Adnoc is using clean sweet gas for its gas injection, but with supplies of sour gas readily available to us, we would like to use this for injection into our oil and gas reservoirs," said Mohammed Al Qubaisi, deputy director for exploration and production at Adnoc.

The Adnoc-Shell team was formed in January 1999 with "the objective to inject sour or acid gas into oil and gas reservoirs in Abu Dhabi to optimise liquids recovery and increase sweet gas available for export," Al Qubaisi said.

QADOUMI BLASTS U.S.

A senior Palestinian official has blasted the U.S. for its biased policy in the Middle East dispute and peace process.

Farouk Al Qadoumi, Palestine Foreign Minister, during a brief visit to the capital on Wednesday, said the U.S. has lost its credibility in the Middle East peace process as it continues to support the inhuman treatment of Palestinians by the Israeli government.

TURKEY BLASTS ISRAEL FOR 'GENOCIDE'

Turkey's prime minister accused military ally Israel of "genocide" against Palestinians and demonstrators marched in Muslim and other countries as Israel vowed to pursue its drive to root out suicide bombers.

With shooting reported around the traditional birthplace of Jesus in Bethlehem, Pope John Paul called for a world day of prayer on Sunday for peace in the Middle East "to change the hearts of even the most obstinate men".

There was growing criticism of the United States for not doing enough to halt the violence. But most of the protests were directed at Israel, and some of them worried governments.

SYRIAN TROOPS EXTEND REDEPLOYMENT

Syrian troops took up new positions in eastern Lebanon, extending a redeployment on the heels of Israeli warnings about border attacks by Hizbollah guerrillas.

Diplomats see the move as a sign Damascus is keen to avoid direct confrontation with Israel, which last year hit Syrian troops twice in Lebanon in retaliation for Hizbollah attacks.

BAHRAIN GROUP TO SET UP $35M PLANT

A Bahraini group is to set up a plant at the Jubail Industrial Area of Saudi Arabia to produce phthalic anhydride and maleic anhydride with a projected investment of $35 million, a senior company official told.

According to Bader Abdulaziz Kanoo, President of Yusuf bin Ahmed Kanoo Group's Petrochemical Division, the technical partners for this project "will also provide management and marketing skills in order to satisfy the whole Middle East market."

CRUISE SHIP CALLS ON DUBAI TERMINAL

The seventh cruise ship to dock at the Dubai Cruise Terminal since the September 11 events, MV Astor, called on Dubai with 300 passengers on board.

BLAIR WARNS OF MID EAST 'CATASTROPHE'

UK Prime Minister Tony Blair has warned that the tragic situation in the Middle East has "the makings of a catastrophe".

Mr Blair is heading for the United States on Friday for a weekend summit with US President George W Bush in Texas.

Ahead of the meeting, the prime minister joined in the president's call for Israel and the Palestinians to act to halt the current conflict.

SAUDI PRINCE, BUSH TO MEET ON APRIL 25

Saudi Arabia's Middle East peace initiative will top the agenda when Crown Prince Abdullah bin Abdulaziz meets U.S. President George W. Bush on April 25, a Saudi source said.

"We have a consensus on the initiative, now let us formulate a strategy on how to implement it," the source said.

DUBAI DUTY FREE POSTS RECORD SALES

Dubai Duty Free registered a sales record of Dh251.2 million during the first quarter of 2002. March was a record month as sales reached Dh90.7 million beating the previous monthly record of Dh84.3 million set in the same month last year.

EGYPT SCALES DOWN ISRAEL CONTACTS

Egypt is suspending contacts with Israel apart from diplomatic channels which could help the Palestinians, the government has announced.

Egyptian Information Minister Safwat el-Sherif said Egypt would restrict ties with Israel to those that "served the Palestinian cause".

Egypt and Jordan are the only two Arab states which have full diplomatic ties with Israel.

RUSSIA'S DELICATE LIAISON WITH IRAN

The Iranian Foreign Minister, Kamal Kharazi arrives in Moscow on Thursday.

The visit has been delayed for nearly two months, largely because of Russian uncertainty as to how it might affect Moscow's relationship with Washington.

The Americans have cited Iran as a potential enemy, which is seeking to develop weapons of mass destruction. But Russia sees Iran as a trade partner.