In this issue:

Turkey, Iraq Sign Strategic Cooperation Agreement

PKK Drug Operations Expanded Tremendously Since 2001

Israeli Factional Brawl over Iran War Parallels U.S. Fight

U.A.E. To Invest in Agriculture in Egypt

Lebanon Forms Government of National Unity

Turkey, Iraq Sign Strategic Cooperation Agreement

July 12 (EIRNS)—Turkish Prime Minister Recep Tayyip Erdogan and his Iraqi counterpart, Nouri al-Maliki, have signed an agreement for a strategic "Turkish-Iraqi axis," comparable to the Franco-German peace treaty of 1962 signed by Charles de Gaulle and Konrad Adenauer. Such an agreement could potentially overturn a very important part of the British strategic chessboard.

Erdogan made his first official visit to Iraq on July 10, and was said to have been given a red-carpet treatment.

"This is a first for Turkey. We have signed no such agreement with any other country to date," Erdogan is quoted in the Turkish daily Zaman. The agreement calls for the creation of a high-level council for "strategic cooperation." Ministers for security, energy, trade, investment, and water resources will sit on the council, and meet at least once a year to review progress. "A similar deal has been signed between France and Germany," Erdogan told reporters. Erdogan's elaborate official welcome at the Baghdad Airport is the first by a foreign head of state.

Barham Saleh, the Iraqi deputy prime minister, said the agreement is "significant enough to change the entire Middle East" and would create a "Turkish-Iraqi axis."

One of the key projects is a proposed gas pipeline to be built alongside the existing oil pipeline from Kirkuk, in northern Iraq, to the Turkish Mediterranean port of Yumurtalik. The gas could then be pumped into the proposed Nabucco pipeline and transported to Europe. Commenting on the project, Erdogan said, "We are not talking about economic relations here. We are actually going into economic integration with Iraq."

An agreement was also signed to allow the Turkish Petroleum Corporation (TPAO) to explore for oil and gas in Iraq. Erdogan suggested that the TPAO could cooperate with Japanese companies in this field. Turkish construction companies are expected to expand operations in Iraq, which are already considerable.

The agreement calls for security cooperation, by which the Turks could aid in training Iraqi police and military personnel.

As for the situation in the Kurdish region, increased cooperation is developing between Turkish and Iraqi security forces in suppressing the terrorist Kurdish Workers Party (PKK), which uses Kurdish Northern Iraq as a refuge, for its operations against Turkey. Erdogan also met with Iraqi President Jalal Talabani, who is an ethnic Kurd.

PKK Drug Operations Expanded Tremendously Since 2001

July 11 (EIRNS)—The narcoterrorist Kurdish Labor Party (PKK) has been able to expand its drug-trafficking operations greatly since 2001, according to a senior Turkish security source. The fact that the International Drug Enforcement Conference was held in Turkey this month underlined the importance of the fight Turkey is waging against traffickers who use Turkey as a transshipment route for heroin from Afghanistan. The source would not link this to the July 9 terror attack against the U.S. consulate in Istanbul, but suggested it was an independent group "inspired" by, but not part of, al-Qaeda, given the lack of professionalism in the attack.

The PKK, he said, is ideally suited for drug trafficking, since it draws its membership from various Kurdish tribes whose membership overlaps the territory of eastern Turkey, northern Syria, Iraq, and Iran. The PKK has networks already in place to ship heroin from Afghanistan, through Iraq or Iran, into Turkey, and on through to Europe. The PKK trafficking activities are interlinked with other Turkish organized crime networks, and therefore can take advantage of the freight traffic into Europe. Furthermore, with 8 million Turks living in Europe, half of whom visit Turkey each year, there are abundant opportunities to take out drugs and bring in the cash returns.

Israeli Factional Brawl over Iran War Parallels U.S. Fight

July 8 (EIRNS)—A U.S.-based Israeli source reports that a ferocious factional battle is taking place, behind the scenes, in Tel Aviv, over the prospect of war against Syria and/or Iran. According to the source, at a recent Cabinet meeting, Israeli Army Chief of Staff Gen. Gabi Ashkenazi presented a detailed assessment of the possible results of a war, and warned that Israel would face devastating consequences, if it were to attack either Syria or Iran. The Israeli government has been under tremendous pressure from the London-steered "war parties" in the United States and Israel to attack Iran's nuclear site at Natanz, before Iran "gets a nuclear bomb."

The source, who has strong ties to Likud and Kadima leaders, reported that Ashkenazi gave a 45-minute assessment of the asymmetric attacks that would be launched against Israel, and against Jewish and Israeli targets worldwide, were there to be an attack on the Iranian enrichment facility. He concluded by explicitly stating his opposition to any new war, and warned that, if an order were given to prepare for war, he would insist on a massive reserve call-up. According to the source, he told Cabinet ministers, "If we go to war, I will call you all up—and I will call up your mother, too." The source added that Mossad chief Meir Dagan and the head of Israeli Army Intelligence both seconded Ashkenazi's assessment, and also argued against war.

This report conforms to other indications that the military and intelligence establishments in both Israel and the United States are opposed to any attack on Iran at this time, preferring to give diplomacy a chance to work. However, the source emphasized that there is a "unanimous consensus" in the Israeli leadership that Iran must be prevented from obtaining a nuclear bomb. The source added that the Israeli political situation is complicated by the looming Kadima primary election, the ambitions of Labor Party leader and Minister of Defense Ehud Barak to return as Prime Minister, and the ambitions of Likud Party leader Benjamin Netanyahu, who is in regular contact with U.S. Vice President Dick Cheney, a leading figure in the Washington "war party."

U.A.E. To Invest in Agriculture in Egypt

July 9 (EIRNS)—The United Arab Emirates will invest in agriculture projects in Egypt in order to secure its strategic food reserves, according to the Abu Dhabi newspaper The National. Egyptian Minister for Foreign Trade and Industry Rashid Mohammed Rashid confirmed that talks have begun and will continue in the Emirates, when he travels there on a state visit. Discussions involved U.A.E. investment in the agricultural sector, including the development of infrastructure for agribusiness and food processing.

"There are some projects we are negotiating with the U.A.E. related to food security for the U.A.E. and possibly third countries," Rashid said. "At the same time, the U.A.E. is willing to help from an investment point of view, because it became a viable investment proposition to put more money into food, especially agriculture and agribusiness and there are a number of projects we are currently negotiating."

Rashid said Egypt was increasing investment into agriculture from the current 4 billion Egyptian pounds ($750 million) to 25 billion pounds ($4.7 billion) per year for the next ten years.

Although Egypt had been the world's fourth-largest exporter of rice, it has banned exports because of high food prices and shortages. It is expected to produce 4.6 million metric tons this year. It consumes on the average 3.2 mmt. Its staple food is bread, and Egypt is a net importer of wheat. Food prices there have increased an average of 27%.

The U.A.E. imports 85% of its food. It is finalizing a scheme to buy 29,000 hectares of farmland in Sudan, along the Egyptian border, where it will produce alfalfa.

The Gulf News, reporting that the U.A.E. is seeking projects not only in Egypt and Sudan, but also Vietnam, Cambodia, South America, and Pakistan, quotes the U.A.E.'s Economics Minister, Sultan bin Saeed al-Mansouri, as saying, "We discussed this thoroughly under the government's plan for the U.A.E. with Sudan, Egypt, and some Arab countries which have agricultural lands. This is part of our strategic investment in general."

Meanwhile, Syria reports a poor wheat harvest, forcing the government to import wheat. Syria was previously a net exporter.

Lebanon Forms Government of National Unity

July 11 (EIRNS)—The formation of the long-awaited government of national unity was announced today. Prime Minister Foud Siniora stated that the new government is for all Lebanese.

Disagreement among the leaders of the factions within the majority and opposition party blocs had prevented agreement on the formation of a cabinet for almost six weeks after the election of Gen. Michel Sleiman as President, after negotiations in Doha, Qatar ended the 18-month political crisis which had paralyzed Lebanon.

The compromise in Doha outlined a Cabinet of 30 members with 11 members for the Hezbollah-allied opposition, who would therefore effectively have veto power. A final agreement in the last few days gave Gen. Michel Aoun's (ret.) party four ministries: social affairs, communications, energy, and agriculture, as well as a deputy prime minister, Issam Abu Jamra, who was part of Aoun's government in 1988-89. Aoun is a Christian, who is allied with the Shi'ite Hezbollah.

President Sleiman flew to France and spoke for his whole government, at the meeting of the Mediterranean Union, co-chaired by France's President Nicolas Sarkozy and Egypt's President Hosni Mubarak.

A Lebanese source told this news service, "It is long overdue to include political representatives that were previously excluded. Although there is some importance as to who gets what portfolio, there is more relevance in who accomplishes what with their portfolio." Noting the appearance of many old faces in the new Cabinet, he said, "For Lebanon to heal itself and move forward, it needs a higher dose of visionaries."

Syria's President Bashar al-Assad had said that relations with Lebanon would be normalized once the new government was agreed upon. Assad and Sleiman will meet on the sidelines of the conference in Paris.