U.S. GOVERNMENT PRINTING OFFICE

63–467 CC WASHINGTON : 2000

DEVELOPMENTS IN THE MIDDLE EAST

HEARING

BEFORE THE

COMMITTEE ON

INTERNATIONAL RELATIONS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

Tuesday, June 8, 1999

Serial No. 106–85

Printed for the use of the Committee on International Relations

(

(II)

COMMITTEE ON INTERNATIONAL RELATIONS

BENJAMIN A. GILMAN, New York, Chairman

WILLIAM F. GOODLING, Pennsylvania

JAMES A. LEACH, Iowa

HENRY J. HYDE, Illinois

DOUG BEREUTER, Nebraska

CHRISTOPHER H. SMITH, New Jersey

DAN BURTON, Indiana

ELTON GALLEGLY, California

ILEANA ROS-LEHTINEN, Florida

CASS BALLENGER, North Carolina

DANA ROHRABACHER, California

DONALD A. MANZULLO, Illinois

EDWARD R. ROYCE, California

PETER T. KING, New York

STEVE CHABOT, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

MATT SALMON, Arizona

AMO HOUGHTON, New York

TOM CAMPBELL, California

JOHN M. MCHUGH, New York

KEVIN BRADY, Texas

RICHARD BURR, North Carolina

PAUL E. GILLMOR, Ohio

GEORGE RADANOVICH, California

JOHN COOKSEY, Louisiana

THOMAS G. TANCREDO, Colorado

SAM GEJDENSON, Connecticut

TOM LANTOS, California

HOWARD L. BERMAN, California

GARY L. ACKERMAN, New York

ENI F.H. FALEOMAVAEGA, American

Samoa

MATTHEW G. MARTINEZ, California

DONALD M. PAYNE, New Jersey

ROBERT MENENDEZ, New Jersey

SHERROD BROWN, Ohio

CYNTHIA A. MCKINNEY, Georgia

ALCEE L. HASTINGS, Florida

PAT DANNER, Missouri

EARL F. HILLIARD, Alabama

BRAD SHERMAN, California

ROBERT WEXLER, Florida

STEVEN R. ROTHMAN, New Jersey

JIM DAVIS, Florida

EARL POMEROY, North Dakota

WILLIAM D. DELAHUNT, Massachusetts

GREGORY W. MEEKS, New York

BARBARA LEE, California

JOSEPH CROWLEY, New York

JOSEPH M. HOEFFEL, Pennsylvania

RICHARD J. GARON, Chief of Staff

KATHLEEN BERTELSEN MOAZED, Democratic Chief of Staff

DEBORAH BODLANDER, Senior Professional Staff Member

MARILYN C. OWEN, Staff Associate

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C O N T E N T S

WITNESSES

Page

The Honorable Martin S. Indyk, Assistant Secretary for Near Eastern Affairs,

U.S. Department of State .................................................................................... 3

APPENDIX

Prepared statements:

The Honorable Benjamin A. Gilman, a Representative in Congress from New

York and Chairman, Committee on International Relations ........................... 00

The Honorable Martin S. Indyk ............................................................................. 00

Additional material:

Correspondence dated February 4, 1999 to The Honorable Martin Indyk from

Representatives Benjamin A. Gilman and Matt Salmon of the International

Relations Committee submitted by Chairman Benjamin Gilman ................... 00

Response dated June 3, 1999 to the letter dated February 4, 1999 by The

Honorable Barbara Larkin, Assistant Secretary for Legislative Affairs, U.S.

Department of State, submitted by Chairman Benjamin Gilman ................... 00

Questions for the Record, submitted to Ambassador Indyk by Chairman Benjamin Gilman ........................................................................................................ 00

Response by Ambassador Indyk to Questions for the Record, submitted by

Chairman Benjamin Gilman ............................................................................... 00

Questions for the Record, submitted to Ambassador Indyk by Matt Salmon,

a Representative in Congress from Arizona ...................................................... 00

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DEVELOPMENTS IN THE MIDDLE EAST

Tuesday, June 8, 1999

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERNATIONAL RELATIONS,

WASHINGTON, D.C.

The Committee met, pursuant to notice, at 10:10 a.m. In Room

2172, Rayburn House Office Building, Hon. Benjamin A. Gilman

(chairman of the Committee) Presiding.

Chairman GILMAN. The Committee will come to order. This

morning the Committee on International Relations is conducting a

hearing on developments in the Middle East. As usual, we are

pleased to have Assistant Secretary for Near Eastern Affairs Martin Indyk join us on this very important topic.

In the past few months, there have been a number of changes

in the region which affect U.S. policy in a variety of regional matters. The Committee is, therefore, interested in the Administration’s views regarding these changes, particularly as they affect

U.S. policy regarding the Middle East peace process, Iran and Iraq.

Back in October, Martin Indyk was sworn in as Assistant Secretary for Near Eastern Affairs by the Department of State. In that

capacity, Ambassador Indyk assists the Secretary of State in providing overall direction and coordination of our policy in the Middle

East and in north Africa, and from April 1995 to October 1997, Dr.

Indyk served as U.S. Ambassador to Israel, and during that period

he helped to strengthen U.S.-Israeli relations, reinforcing the U.S.

commitment to advance the peace process and substantially increase the level of mutually beneficial trade and involvement.

Prior to his assignment to Israel, Dr. Indyk served as special assistant to the President and senior director for Near East and

south Asian affairs at the National Security Council. While at the

NSC he served as principal adviser to the President and National

Security Adviser on Arab-Israeli issues, Iraq, Iran, and South Asia,

was a senior member of Secretary Christopher’s Middle East peace

team, and served as a White House representative in the U.S.-

Israel Science and Technology Commission. We welcome Dr. Indyk

this morning.

With the election of Ehud Barak as Israel’s Prime Minister-elect,

many expect Israeli-Palestinian negotiations to resume fairly

quickly. Barak still has to put together a coalition government, but

he has given indication that he will come to the United States at

an early date. We therefore hope that Secretary Indyk will apprise

us of the latest developments in that area.

Iran’s actions on a variety of issues continue to be of grave concern to many of us. Also alarming was the recent disclosure that

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Iranian authorities arrested 13 Jews on charges of spying for Israel

and the United States. The suspects were accused of spying for the

‘‘Zionist regime’’ and ‘‘world arrogance’’, references to Israel and the

United States, respectively. We are very disturbed about that development and want to know what steps our Nation is taking in

this matter and how it may affect our policy considerations regarding Iran. Clearly, the regime is not rehabilitating its image, if that

has been its intent.

Iran’s neighbor, Iraq, wants to raise its oil input. As such, it recently ordered government engineers to start developing a giant oil

field in the south to add 80,000 barrels to daily production. We

would welcome the Department’s comments about this new circumstance and how that impacts sanctions against Iraq in the oilfor-food program.

We also want to discuss in greater detail the Administration’s

plan to assist the Iraqi opposition, since we met just a few days ago

with leaders of the executive presidency of the Iraqi National Congress.

Elsewhere in the region Egypt’s Parliament overwhelmingly

nominated President Hosni Mubarak for a fourth 6-year term, and

President Mubarak signed into law new restrictions on Egyptian

human rights groups. Regrettably, the law allows the government

to disband the boards of directors of private groups, nullify their

decisions and object to funding resources. It will also set prison

terms at 1 or 2 years for violations.

While the State Department has said this new law takes Egypt

in the wrong direction, we are anxious to learn about efforts to

moderate this restrictive law as well as the Department’s assessment regarding the progress of democratic governance and the

human rights of the Coptic Christian minority.

Assistant Secretary Indyk, we have a lot to cover this morning.

You may read your statement or summarize it as you please. It will

be made a part of the record of the hearing. We would welcome in

the future if you could make your statement available to us at an

earlier date. The Committee plans to send you additional questions

to be answered for the record in the event that we don’t cover everything today.

Chairman GILMAN. Assistant Secretary Indyk, please proceed.

Mr. INDYK. Thank you very much, Mr. Chairman.

Chairman GILMAN. Bear with me. I now recognize the Ranking

Minority Member Mr. Gejdenson.

Mr. GEJDENSON. I am also here to hear Mr. Indyk, I will be very

brief. It must be frustrating for him to be in the backwater area

of the State Department. It seems to me not much is happening in

your region lately.

I would be curious, as you go through this, to receive an assessment of what the situation is in a couple of places. One in Jezzin,

if I am pronouncing that correctly. Who is now in control there? Is

it the Lebanese Government, or is it the Hezbollah? Have you met

with Bashar, the son of President Asad, and what is your sense of

his gaining the ability to take over for his father?

Obviously, as Chairman Gilman pointed out, the situation of the

13 Jewish people who have been arrested for spying, is something

that is very troubling. Whether it is playing to internal domestic

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politics between the so-called moderates and hard-liners in Iran. In

Iraq, I guess the question is the role of Ahmed Chelabi and whether or not his organization can actually coalesce the various factions,

and is this more than a debating society? Are these people really

pulling together, trying to come up with an organization that is capable of replacing Saddam Hussein?

I expect that you will give us plenty of information on the new

Israeli Government and how you see the peace process moving forward once the new governments is in place.

It is a pleasure to have you here and have you in your post, giving us great confidence that the Administration has picked an excellent individual for one of the real hot spots.

Chairman GILMAN. Mr. Lantos.

Mr. LANTOS. Thank you, Mr. Chairman. I found your opening remarks exceptionally positive and accurate, and I want to identify

myself with your comments.

I merely want to add, if I may, Mr. Chairman, that several of us

in recent times have made overtures to the Government of Iran. In

my own case, Secretary-General Kofi Annan of the United Nations

conveyed my desire to visit Iran. I think it is important to keep on

the record our interest in opening a dialogue with the Government

of Iran, but this arrest of a number of members of the Jewish community in Iran is certainly not conducive to Iran changing its

image in the West. Phony charges against innocent civilians is not

a good way for the Iranian Government to attempt to reintegrate

itself into the civilized world community, and I am very anxious to

hear Secretary Indyk’s comments on your observations.

Chairman GILMAN. Thank you, Mr. Lantos.

Chairman GILMAN. MR. INDYK.

STATEMENT OF MARTIN S. INDYK, ASSISTANT SECRETARY

FOR NEAR EASTERN AFFAIRS, U.S. DEPARTMENT OF STATE

Mr. INDYK. Thank you very much, Mr. Chairman and Congressmen Gejdenson and Lantos. I am grateful for the opportunity to appear before you again to talk about U.S. policy toward the Middle

East. It has been a long time, Mr. Chairman, and therefore, I have

prepared a long statement, which is the reason why you didn’t get

it earlier. I would like to submit it for the record and just provide

a few highlights.

Chairman GILMAN. Without objection.

Mr. INDYK. I invite you to interrupt me if I’m going on too long

as I just try to summarize this long policy statement.

Mr. Chairman, in the Middle East, as in the rest of the world,

we stand on the threshold of a new millennium, but this region

finds itself caught between its turbulent and conflict-ridden past

and a future of greater peace, stability, prosperity and popular participation. It is not yet clear which direction the Middle East will

take because the indicators are mixed.

On the one hand, we have seen difficulties in the Arab-Israeli

peace process over the past 21⁄2 years which have dramatically

slowed the momentum toward positive change in the region. Last

month, however, the Israeli people, as you have noted, voted for

change, and Prime Minister-elect Ehud Barak now has a strong

mandate to continue the search for a comprehensive Arab-Israeli

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peace. If Israel’s negotiating partners are ready to respond, we believe it will be possible to resume negotiations on all tracks and

move toward the comprehensive peace that would usher in a new

era of coexistence and regional cooperation.

Saddam Hussein’s defiance of the U.N. Security Council threatens to destabilize the Gulf while exacting a heavy price from the

Iraqi people, but Saddam has emerged from the Desert Fox campaign weakened and isolated and much less capable of creating

trouble for his neighbors for the time being.

President Khatami’s election in Iran in the recent local elections

there has made it clear that a significant majority of the Iranian

people support political liberalization, respect for the rule of law

and a constructive role for Iran in regional and international affairs. This evolution still faces a strong, sometimes violent, opposition from some quarters inside Iran, and Iran’s determined development of ballistic missiles to enable delivery of its weapons of

mass destruction over long distances has the potential to trigger a

new and dangerous arms race across the region.

Extremism is now on the defensive in Algeria and Egypt after

years of bloody confrontation, and across the Arab world the gradual struggle for political liberalization and economic reform is taking place. Finally, King Hussein’s untimely death has underscored

the fact that a process of succession is under way across the region

after decades of unchanging rule in most Arab countries.

Because the Middle East is a region of vital interest to the

United States, we are committed to helping it achieve a better future in the 21st century than that which it has experienced in the

last half of the 20th century, when the Middle East was often regarded as a synonym for trouble and hopelessness. Above all, we

have an intense interest in preventing it from backsliding into another era of extremism and conflict marked by a new arms race in

ballistic missiles and weapons of mass destruction.

How can we widen the circle of peace while countering those who

would oppose the promotion of a more normal existence for all the

people of this region? The answer in our minds is clear. We must

broaden the scope and depth of our relationship with those states

that share our commitment to a more peaceful and prosperous region, work with them to achieve our common vision, and at the

same time we must enforce our ability to contain and overcome

those states or forces that threaten our interests.

On the Middle East peace process, Mr. Chairman, it is difficult

for me to say much at this juncture because, of course, we are waiting for Prime Minister-elect Barak to form his government. The

President and Secretary of State are committed to advancing the

peace process on all tracks. We would like to see both Israel and

the Palestinian Authority fulfill their obligations under the Oslo accords by implementing the Wye Agreement. We would like to see

the resumption of final status negotiations on the Palestinian track

with the objective of bringing them to a conclusion within a year,

and we would also like to see a resumption of the long-stalled Syrian and Lebanese tracks of the peace process negotiations, as well

as the multilaterals and a reinvigoration of the normalization process.

5

I would like to stress two points because I know that they have

become of some concern to many Members of this Committee. First

of all, throughout the peace process, we have been guided by the

belief that agreements can only be reached through direct negotiations. The only bases for negotiating a peace agreement between

Israelis and Palestinians are the terms of reference defined in Madrid and the principles agreed to in the Oslo accords. These include

U.N. Security Council Resolutions 242 and 338. They do not and

never have included U.N. General Assembly Resolution 181.

Second, our experience has taught us the importance of the parties creating the proper environment for progress in the negotiations and for dealing with differences through those negotiations.

That is one major reason why the Administration is working hard

to see that the proposed July 15th meeting of the High Contracting

Parties to the Fourth Geneva Convention does not take place. We

have voiced our opposition to such a meeting in the strongest terms

and continue to do so. We have made clear that we would not attend a meeting if it takes place, and we have encouraged all others

to do likewise. This meeting, Mr. Chairman, will not contribute to

the peace process.

Let me just focus the rest of my remarks on Iraq and Iran issues

which you have all raised. Eight years after the Gulf War and

Saddam’s persistent defiance of the international community, we

are under no illusions that Iraq, under Saddam Hussein, will comply with UNSC resolutions on disarmament, human rights, accounting for the Kuwaiti POW’s and the return of stolen property.

In view of this reality, our policy now rests on three pillars.

First, as long as he is around, we will contain Saddam Hussein in

order to reduce the threat he poses both to Iraq’s neighbors and to

the Iraqi people. Second, we will seek to alleviate the humanitarian

cost to the Iraqi people of Saddam’s refusal to comply with the

UNSC resolutions; and finally, we will work with forces inside and

outside Iraq, as well as Iraq’s neighbors, to change the regime in

Iraq and help a new government, representative of the needs and

aspirations of the Iraqi people, rejoin the community of nations.

Our containment with regime-change policy is designed to protect the citizens of Iraq and its neighbors from an aggressive and

hostile regime. We maintain a robust force in the region, which we

have made clear we are prepared to use should Saddam cross our

well-established red lines. Those red lines include: Should Saddam

try to rebuild his weapons of mass destruction should he threaten

his neighbors should he challenge—continue to challenge allied aircraft within the no-fly zones or should he move against the people

living in the Kurdish-controlled areas of northern Iraq.

Let me be particularly clear on this point. The United States is

concerned for the protection of all Iraqis against the repression of

the Baghdad regime. Hence, we believe that the world community

should tolerate no backsliding from Baghdad’s obligations under all

of the U.N. Security Council resolutions intended to protect the

people of Iraq and its neighbors from the depredations of Saddam

Hussein. In particular, Mr. Chairman, the U.N. Security Council

Resolution 688 twice cited the consequences of Baghdad’s repression of the Iraqi civilian population as a threat to international

peace and security. It, therefore, demanded that Baghdad immeVerDate 11-SEP-98 07:42 Apr 28, 2000 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 63467.TXT HINTREL1 PsN: HINTREL1
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diately end this repression. Baghdad is in flagrant violation of this

U.N. Security Council resolution, as it is of so many others.

Although our containment policy has been effective in preventing

Saddam from threatening the region, it, of course, has its costs. As

we have seen repeatedly since 1991, even a contained Iraq under

its current leadership retains an ability to threaten both the stability of the region and the welfare of the Iraqi people. Both are

paying too high a price for Saddam’s continued rule. In our judgment, both the region and the people of Iraq deserve better. It is

past time for Saddam to go.

For these reasons, President Clinton announced in November of

last year that the United States would work with the Iraqi people

toward a government in Iraq which is prepared to live in peace

with its neighbors and respect the rights of its people. We are fully

committed to supporting the Iraqi people in bringing this about. In

pursuit of this objective, the United States will adhere to two important principles. First, we will uphold the territorial integrity of

Iraq; and second, we will not seek to impose from the outside a

particular government or leaders on the people of Iraq. That is up

to the Iraqi people themselves, but we do support a change of government that will be responsive to the aspirations of the Iraqi people, one that takes meaningful steps toward a democratic future for

the country and can represent fairly the concerns of all of Iraq’s

communities.

If it is to be successful, change must come from within, from the

Iraqis themselves. In particular, the security forces and the people

must stand on the same side against Saddam. The support of Iraqi

exiles, including the politically active opposition, along with neighboring states, however, is indispensable. The captive Iraqis need a

voice.

Free Iraqis—those in exile and those who live in relative freedom

in northern Iraq—bear a special responsibility to develop a coherent vision for a brighter future for this country. They must take the

lead in developing and promoting an alternative vision based on

the restoration of civil society, the rebuilding of Iraq’s economy and

the promotion of a new role for Iraq as a force for peace and reconciliation in the region. They can also play an effective role in

delegitimizing Saddam, in helping to build the case for his prosecution as a war criminal and in getting the truth into and out of Iraq.

Congress has provided the Administration with a number of important tools to support Iraqis who are working toward a better future for Iraq. These include earmarks of $8 million in existing economic support funds. We are using these funds to strengthen opposition political unity, to support Iraqi war crimes initiatives, to support humanitarian programs and the development of civil society

and for activities inside Iraq. We also have established and recently

stepped up broadcasting hours for Radio Free Iraq, which operates

independently and broadcasts daily in Arabic uncensored news and

information to the people of Iraq.

We have named a Special Coordinator for Transition in Iraq,

Frank Ricciardone, who is managing our overall effort. He has already had considerable success in helping disparate opposition

groups work together and elect a new interim leadership that right

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now is preparing the way for an Iraqi opposition conference that

will have as broad participation as possible.

Finally, there is the Iraq Liberation Act, which provides discretionary authority to the President to direct up to $97 million in Defense Department draw down and training for designated Iraqi opposition groups. We have now begun the process of drawing down

this account for the provision of nonlethal supplies to the Iraqi opposition. Many have called upon the President to use this authority

to arm the Iraqi opposition and support military action against

Saddam Hussein.

We believe such action is premature. There are a host of issues

that must be resolved before such equipment and training could be

provided with confidence that it would advance our objectives of

promoting a change of regime and not just lead to more Iraqis

being killed unnecessarily. One requirement is a credible, broadbased Iraqi political umbrella movement based on consensus that

can authoritatively articulate a future vision for those Iraqis who

now lack a voice in their own fate. Hence, the first kind of support

which we will provide to the Iraqi opposition under the draw down

will be to meet their most urgent requirements, equipment for the

infrastructure vital to the effectiveness of an international political

advocacy movement, broadcasting equipment and training in civil

affairs. Further kinds of material assistance to the Iraqi opposition

can be provided when the conditions are created to enable them to

be best absorbed and exploited.

We will need the cooperation of Iraq’s neighbors if we are to provide effective support to the internal Iraqi opposition. Although

these neighbors all share Iraqi people’s longing for a change of regime in Baghdad, views about how we can help Iraqi people reach

this goal differ. We must take those views into account and gain

their cooperation in promoting the recovery of Iraq as a good neighbor and contributor to regional stability.

As for Iran, Secretary Albright a year ago laid out our approach

to Iran in her Asia Society speech. The main point she made was

that we are prepared to develop with the Islamic Republic, when

it is ready, a road map in which both sides would take parallel, reciprocal steps leading to a more normal relationship. Unfortunately, the Iranian Government has made clear that at this stage

it is not ready to engage, insisting instead that the U.S. first take

a number of unilateral steps.

Given Iran’s reluctance to begin a bilateral dialogue, we have

pursued other avenues that can serve to broaden our engagement

with Iran. We have worked constructively with Iran in multilateral

settings on issues of common concern, such as countering the

spread of narcotics and the situation in Afghanistan. We have also

noted with interest Iran’s improving relations with the Arab world,

particularly on the other side of the Persian Gulf. We welcome such

a relaxation of tensions, but at the same time we remain in close

consultation with our Arab friends in the region who share our cautious approach based on testing Iran’s willingness to abandon destabilizing policies, and in this regard we remain concerned at

Iran’s threatening approach to the islands dispute with the United

Arab Emirates.

8

We have also supported greater contact between our two peoples.

We believe that such exchanges can increase mutual understanding

and respect and help overcome decades of mistrust.

Within the context of a broad review of general U.S. sanctions

policy, President Clinton recently announced his decision to exempt

commercial sales of food, medicines and medical equipment from

future and current sanctions regimes where we have the authority

to do so. This decision will enable the sale of certain items to Iran.

It does not, however, conflict with our policy of applying economic

pressure to the Iranian Government. Any benefit derived will accrue to the Iranian people and, of course, to American farmers and

manufacturers. It is important to remember that U.S. sanctions

policy seeks to influence the behavior of regimes, not to deny their

people basic humanitarian necessities.

Apart from that recent adjustment, our sanctions policy will remain in force vis-a-vis Iran. The reasons behind this policy of applying economic pressure remain the same today as they did when

that policy was first invoked. U.S. sanctions are a response to Iranian Government practices that violate international norms and

threaten our interests and those of our allies. In this regard we will

continue to oppose bilateral debt rescheduling, Paris Club debt

treatment for Iran and the extension of favorable credit terms by

Iran’s principal foreign creditors. We will also continue to oppose

loans to Iran by international financial institutions.

Unfortunately, some Iranian government practices that we seek

to have changed have continued, although not to the same degree

in all areas under the present government of President Khatami.

Iran, as you are aware, remains on the State Department’s list of

state supporters of terrorism, and despite Iranian public statements condemning certain terrorist acts or expressing sympathy

for Kenyan and Tanzanian victims of the August, 1998 bombings

of the U.S. Embassies in Nairobi and Dar es Salaam, Iranian support for terrorism remains in place.

President Khatami himself has publicly denounced terrorism and

condemned the killing of innocents, including Israelis. The Iranian

Government has also stated that Iran would accept a peace acceptable to the Palestinians. We assume that these statements are sincerely made, and it is therefore also reasonable for us to expect

that the actions and policies of the Islamic Republic should reflect

that. Unfortunately, so far this is not been the case. Iran was

harshly critical of the Wye Agreement and its Hezbollah proxy in

Lebanon threatened Arafat’s life, and President Khatami himself

met with leaders of the Palestinian rejectionist groups when he visited Syria last month and apparently promised them more support.

We remain concerned at Iran’s continued drive to develop weapons of mass destruction and the ballistic missiles necessary to deliver them. In this regard, we are particularly concerned about

Iran’s nuclear drive. Last summer Iran also tested a ballistic missile, the Shehab III, capable of delivering warheads 800 miles, and

is reported to be close to producing a missile with an even greater

range. These developments pose significant potential threats to

U.S. forces, as well as to our friends in the region.

We have to act quickly, Mr. Chairman, to forestall what is shaping up to be an imminent arms race in ballistic missiles and weapVerDate 11-SEP-98 07:42 Apr 28, 2000 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 63467.TXT HINTREL1 PsN: HINTREL1
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ons of mass destruction, and we need to do this by working with

Israel, with our Arab allies and with Turkey to help boost their

abilities to deal with these emerging threats. These responses include strengthening active and passive defenses, enhancing deterrents, slowing down proliferation through relevant multilateral

arms control regimes and other means, and encouraging moderation in the policies pursued by those regimes that are trying to acquire these systems.

Iran’s efforts to develop weapons of mass destruction and ballistic missiles together with its other ongoing policies of concern are

the reason that we oppose investment in Iran’s petroleum sector.

We oppose Iran’s participation in the development and transport of

Caspian resources, and we oppose multilateral lending to——

Chairman GILMAN. Secretary, if I might interrupt, we will continue with the hearing right through the roll call for those of you

who may want to go over and vote and come right back. Please continue.

Mr. INDYK. Thank you. I will be wrapping up right now, Mr.

Chairman.

We oppose Iran’s full integration in international economic fora.

We look forward to a time when greater economic interaction

with Iran will be possible, but this depends on the Iranian Government’s willingness to address practices that, in our view, continue

to disqualify Iran from enjoying the full economic and commercial

advantages that come with responsible membership in the international community.

Finally, we continue to observe with great interest internal developments in Iran. As we have often said, we fully respect Iran’s

sovereignty and the right of the Iranian people to choose their system of government. That said, we will not shy away from expressing our support for values that we believe to be universal. In this

regard, both the Presidential election in 1997 and the recent municipal elections were remarkable for their openness and the level

of participation of the Iranian people. Statements by President

Khatami in support of human rights and the rule of law deserve

acknowledgment and support.

At the same time we are concerned at the gap that often remains

between words and deeds. For example, we find it hard to reconcile

President Khatami’s words with the announcement yesterday that

13 members of the Jewish communities of Shiraz and Isfahan, including rabbis, would be charged with espionage. These arrests,

Mr. Chairman, send a very disturbing signal. We call on the Government of Iran to ensure that no harm comes to these individuals

and to release them immediately.

Mr. Chairman, in the Middle East our vital interests remain engaged. We face both long-standing challenges and new opportunities to promote peace, prosperity and stability in this troubled region. We look forward to continuing our work with you and the

Members of this Committee as we seek to advance our interests in

this troubling region, as we seek to bring it a future of greater

peace, prosperity and stability.

Thank you very much, Mr. Chairman.

Chairman GILMAN. Thank you, Secretary Indyk, for your concise

and overall review.

10

Chairman GILMAN. Secretary Indyk, Public Law 104–45 of 1995

mandated that our U.S. Embassy in Israel should be removed from

Tel Aviv to Jerusalem. Can you tell us what is the status of that

move as far as the State Department is concerned?

Mr. INDYK. Yes, Mr. Chairman. As you know, when that Act became law, President Clinton made it clear that, consistent with his

long-standing policy, he would not do anything to undermine the

peace process. That law provided that if the embassy was not

moved by May 31st of this year, 50 percent of the funds in our security and maintenance account for foreign buildings would be deducted from that account. We are about to reach the point where

we will be unable to use 50 percent of those funds; that is, we have

already used up 50 percent of those funds. Therefore, while he has

not made a final decision in this regard, the President will in all

likelihood use his waiver of authority given to him under the Act

so as to prevent those funds from being rendered unavailable.

We have over the last month or so engaged in consultations with

interested Members of Congress on this subject. We have sought to

be constructive, and still wish to be constructive, in trying to find

a resolution of this issue, but we also have to fulfill—the President

has to fulfill his responsibilities both to the peace process and to

the protection of our embassies and personnel abroad, and it is for

that reason that he is now considering using his waiver authority

under the Act.

This is, as you are aware, Mr. Chairman, a very sensitive time

in the peace process. We are waiting for the Government of Israel

to be formed, a new government to be formed. That government,

we expect, given the statements made by Prime Minister-elect

Barak, will want to resume final status negotiations on the Palestinian track as well as negotiations on other tracks of the peace

process, and in that context we feel very strongly that we should

not take actions now that would preempt those negotiations or undermine them.

As you are aware, Jerusalem is an issue that will be discussed

in these negotiations, and we think it is incumbent upon us, given

our special role, that we promote this process, that we not take actions now that would disrupt those negotiations, both because of

the concern that we have about the need to have funds to ensure

that our embassies and people abroad are protected and because of

our concern to not preempt or prejudge final status negotiations

that are about to get underway. The President is now weighing the

use of his waiver authority under the Act.

Chairman GILMAN. Mr. Secretary, the President from time-totime keeps using the waiver authority with regard to this issue,

and we think it is long overdue that we get under way with the

plans. This is the only capital in the entire world where our embassy is not situated in that capital, and if you are talking about

a limitation of funds, this Committee has already authorized additional funds for embassy security in the amount of hundreds of millions of dollars. I see the President has also just in the last day or

two recommended additional funds. So, if it is a funding issue,

there shouldn’t be a problem. If it is a political issue, that political

issue remains continually there, and I would think it is long overdue that we resolve this issue.

11

The Congress has indicated its desire, its intent to do this time

and time again, and I think it is long overdue now that we resolve

the Jerusalem embassy issue. I would urge you and the Department to take another hard look at all of this.

Mr. Secretary, Palestinian officials have made increasing reference to U.N. General Assembly Resolution 181 of 1947, which

called for the creation of two small states for Jews and Palestinians

out of the former Palestine Mandate. Under 181, Israel would have

far less territory than before 1967. What is the relevance of 181,

and why are the Palestinians now referring to it? How does the

State Department view these statements?

The current Middle East peace process has been based on U.N.

Security Resolutions 242 of 1967, which created a so-called landfor-peace formula, and I would welcome your comments.

Mr. INDYK. Thank you, Mr. Chairman. If I could just make a

comment on your statement about Jerusalem. We have not used

the waiver authority before this. If the President decides to do it,

this would be the first time.

In terms of the issue of funding, we are grateful for your authorization of those funds. You are correct in saying the President has

asked for additional funds. The problem is that the way the law is

written in this regard, the account that holds those funds is affected by whether the embassy is moved or not; and 50 percent of

the funds in that account, according to the law, will not be available if the embassy is not moved by May 31st.

May 31st has passed. Now we are at the point where 50 percent

of the funds are being obligated, and we will need access to the

other 50 percent. If we don’t have access to that other 50 percent,

contracts will have to be canceled, and work will have to be suspended. That is the problem we face at the moment, and that is

one of the reasons why the President is considering using his waiver authority.

As far as Resolution 181 is concerned, let me repeat again in the

clearest possible terms what I said in my opening statement, that

we do not regard 181 as relevant at all to the negotiations, period.

You also asked why are the Palestinians referring to Resolution

181. As I understand it, from statements that they have made,

their reference to 181 appears to be their desire to invoke that

General Assembly resolution as the basis for claiming an independent Palestinian state. You may recall that Resolution 181 back

in, I think, 1947 provided for the creation of two states in Palestine, a Jewish state and an Arab state, and that is why they are

invoking this decades-old resolution to claim legitimacy for their

claim to an independent state. As far as we are concerned, only Security Council Resolution 242 and 338 are the resolutions relevant

to the negotiations on the Palestinian track.

Chairman GILMAN. Mr. Secretary, we will briefly recess. Mr.

Leach is on his way back to conduct the hearing, and we will continue as soon as he returns. It will take a few minutes. I am going

to the floor to cast my vote.

Mr. INDYK. Thank you.

Chairman GILMAN. The Committee stands in recess.

[Recess.]

Mr. LEACH. [Presiding.]

12

Mr. Lantos.

Mr. LANTOS. Thank you very much, Mr. Chairman.

Mr. Secretary, we are delighted to see you and thank you for a

very comprehensive statement. Let me begin with an issue that

you haven’t mentioned, although I take it is on the minds of most

of us. With the apparent victory of NATO in Kosovo, I anticipate

there will be major lessons learned by all of the players in the Middle East as to the willingness and the ability of the United States

to use military power as necessary to achieve our objectives.

I vividly recall the lunch we had with the new King of Jordan

a couple of weeks ago where, in response to several questions, he

made the very obvious point that the outcome of the engagement

in the former Yugoslavia will have an enormously significant bearing on the attitude of players in the Middle East. I certainly fully

agree with that conclusion, as I suspect most of my colleagues do.

My first question is—and I have two or three others—my first

question is, would you give us your reaction as to what conclusions

the various players will draw from this truly major and, once the

dust settles I think we can say, historic move by NATO, because

clearly the lesson of Kosovo, or one of the many lessons of Kosovo,

is that human rights trump national sovereignty. Some may not

like it, some clearly do not like it, but those are the facts. Milosevic

is not allowed to kill, rape, and plunder people who are technically

his subjects, irrespective of their ethnic origin.

The second question I have relates to Japan, which is, in this

context, within your purview. I have been very disturbed, as I

think many of my colleagues have, that the Japanese Government

displays an incredible degree of reluctance in debt forgiveness as

it comes to the poorest nations on the face of this planet. Every indication is that all of these debt forgiveness conferences dealing

with truly destitute societies are running into a very rigid and unbending Japanese attitude because they simply are unprepared to

forgive debts that these totally money less, resource less societies

have accumulated over the years.

During his visit here the King of Jordan raised the Japanese

issue with several of us, and I certainly am extremely supportive

of Jordan’s request for debt relief as it comes to Japan. I am wondering if you would be prepared to comment on that issue.

The final question I have, if I still may abuse the time at my disposal which is no longer there, Mr. Chairman——

Mr. LEACH. You have some leniency.

Mr. LANTOS. What in your view is the rationale for the Government of Iran to make common cause with the rejectionists of the

Palestinian groups at a time when hopefully we will be moving toward implementation of the peace process and the building of a

stable and peaceful and prosperous Middle East? Why is this retrograde policy continuing?

Mr. INDYK. Thank you very much, Congressman Lantos. First of

all, in terms of the Kosovo example, I think it is a very good question, and because there is no doubt——

Mr. LANTOS. Do I get an A?

Mr. INDYK. If I were grading, definitely.

There is no doubt that leaders around the world, but especially

in the Middle East, were watching closely and continue to do so to

13

see how this would play itself out. I think in particular the fact

that NATO, with the United States in the lead, intervened on behalf of the Albanian-Kosovars, who are Muslims, was something

that resonated very clearly in the Muslim world, but particularly

in the Arab world. I think it did a lot to put paid to the argument

about double standards that somehow the West and the United

States always practice against the Arabs or against the Muslims,

and here was a very clear case in which that wrongful claim was

put to rest.

Second, I think the fact that we were able to demonstrate united

resolve amongst the NATO allies sent a very important signal

about our commitment to stability in Europe and to our commitment to human rights, and those commitments will resonate in the

Middle East, as well, where they are very important.

Third, the effectiveness of air power. At the beginning of the

Kosovo conflict, you will recall that people drew the contrast between the terrain and difficulties of operating in Serbia with air

power versus the open terrain of Iraq. I think that NATO has demonstrated very clearly the effectiveness of air power in Kosovo in

terms of achieving our objectives. I think that this can be multiplied by a factor of at least three, if not more, in terms of the effectiveness of air power should we need to use it if Saddam Hussein

crosses our red lines in Iraq. I think I made clear earlier what our

red lines are in that regard. So I think it sends a very important

signal as we continue to confront Saddam Hussein that we have

the capability and the resolve to achieve our objectives in Iraq.

Finally, I think that it serves to reinforce a message that we

have been projecting to the Middle East for some time, which is

that leaders in the region have a choice. They can get on the side

of positive, constructive change, sign on to the rules of the international community, give up sponsorship of terrorism, give up

flaunting of Security Council resolutions, support peacemaking in

the region and thereby secure the needs of their people and the interests of their country. I think it is no coincidence that you see

Libya, after 10 long years, now giving up the terrorist suspects in

the Pan Am 103 bombing for trial. Obviously we have to see them

fulfill the rest of the Security Council resolutions requirements.

They have made some commitments to do so. We need to test that.

We need Syria keen to reengage in the peace process with Israel,

and we see the beginnings of change in Iran as represented by

President Khatami, who, of course, himself is the product of a very

real desire for change on the part of the Iranian people. It is no

coincidence that he talks the talk of human rights and the rule of

law and respect for the individual, but it is obviously a work in

progress in terms of the fulfillment of those lofty ideals.

I think that overall the impact of the victory in Kosovo is a positive one in terms of the signal that it sends to the Middle East, and

that brings me—I will jump to the third question, come back to

Japan—to the question of why would Iran support Palestinian

rejectionists, and it is for me an unfathomable issue. I don’t understand why, when the President Khatami says that they will support what the Palestinians support, that Iran should have come out

against the Wye Agreement and should be supporting the Palestinian rejectionists who represent nobody on the Palestinian side.

14

They are yesterday’s men who speak only the language of violence

and terrorism and rejection. Why President Khatami would want

to associate himself with these people is, I have to say, beyond me,

and therefore I am at a loss to explain why.

I think that the Iranians continue to view Israel in very negative

terms. I think that that is very unfortunate, because as long as

they continue to do so, it is a major obstacle to their playing a constructive role in the region and to their having a constructive relationship with the United States.

As far as Japanese debt forgiveness, we have urged the Japanese

Government to forgive Jordan’s debt. President Clinton raised this

with Prime Minister Hashimoto when he was here. We have engaged with them repeatedly over a long period of time to try to get

them to do this. They face some difficulties with the issue of debt

forgiveness having to do with their internal arrangements and

what they would have to do to forgive the debt; and they are also

concerned that if they go ahead with debt forgiveness under their

law, they would not be able to provide any more credit to Jordan.

But the Jordanians are making clear that they would rather have

the debt forgiveness than the future credit, and so we will continue

to press this as we will press our other G–7 partners, particularly

the French, Germans, and the British, who also hold Jordanian

debt.

We would like to see them all support debt forgiveness. We, of course, forgave Jordan’s debt some years ago, some $700 million

worth of Jordanian debt, and we think they should follow suit.

Why? Because with the untimely passing of King Hussein and the

ascension to the throne of King Abdullah, Jordan, which is in a pivotal position in the region in geostrategic terms and in terms of the

peace process and in terms of stability, faces a very real problem

in terms of growing its economy. King Abdullah, as you heard,

made a very strong commitment to doing his part in terms of economic reform, deregulation, privatization, all the things that Jordan needs to do to create the opportunity to grow the economy and

to attract foreign investment. We have been supporting his efforts

to open the markets in the region to Jordanian products, which is

an essential element of this, but the third element is debt forgiveness and debt relief so that the government doesn’t have this huge

burden of debt repayments at a time when it is trying to grow the

economy.

We think it is in our vital interest to see this occur, and we

strongly support it.

Mr. LANTOS. Thank you very much, Mr. Chairman.

Chairman GILMAN. [Presiding.] Thank you.

Mr. Salmon.

Mr. SALMON. Thank you very much, Ambassador Indyk. It is

good to see you again. As you know, 13 American citizens have

been killed by Palestinian terrorists in Israel since the signing of

the Oslo accords in September 1993. Over 20 suspects in the attacks currently reside in territory controlled by the Palestinian Authority, and several of these suspects are walking about freely.

Some have reportedly been given positions in the Palestinian police

forces. The United States has the right and the responsibility

under U.S. law to prosecute the terrorist killers of Americans.

15

I do commend the Administration for sending investigative teams

on numerous occasions to Israel to investigate these attacks, and

I also want to acknowledge the Administration’s efforts to verify

the incarceration of terrorists who have murdered Americans in PA

prisons. According to a June 3rd letter from the State Department,

your agency says, in an effort to confirm that the suspects remain

in custody, U.S. officials have conducted a series of visits to PA

prisons, and I thank you for that. In the past several months our

officials have made six visits to PA prisons to confirm the incarceration of Palestinians suspected of involvement in killing Americans. When I visited Israel last year and met with several Palestinian officials, including Chairman Yasser Arafat, to express the

congressional commitment that the killers of Americans be brought

to justice, there was a willingness on their side to have the U.S.

officials monitor the incarceration status of the killers of Americans. I do appreciate the Administration for taking the Palestinian

Authority up on their offer.

I still believe, however, that the effort to bring to justice the Palestinian terrorists who have murdered Americans has been incomplete, as I think you would agree. For example, no rewards have

yet been offered by the U.S. Government for information leading to

the capture of Palestinian killers of these 13 Americans, even

though multimillion-dollar rewards have been offered in other

cases of Americans killed by terrorists abroad; and despite reams

of evidence implicating certain individuals in the murders of Americans, including in one case, an outright confession, no indictments

have been secured by American authorities, and I have three questions based on this issue.

I am interested in why no reward has been offered leading to the

capture of Palestinian fugitives implicated in the attacks of Americans; that is first.

Second, Israel recently requested the extradition of one of the alleged terrorist murderers of American citizens, Mohamed Deif. The

PA basically acknowledged knowing Deif’s whereabouts, but has indicated for political reasons that they will not arrest Deif. Has the

Administration ever criticized the Palestinian Authority for harboring this alleged killer of Americans?

Finally, what penalty has the PA suffered due to their lack of

complete cooperation in the investigation of the terrorists in their

territory who have murdered American citizens? I have an additional two questions that I would like to submit for the record.

Thank you.

Mr. INDYK. Thank you, Mr. Salmon. First of all, on the issue of

rewards, this is something that I have taken up personally to see

whether we can post rewards for the Palestinian fugitives, those

who are not in custody, who are charged with killing Americans.

There is some sensitivity involved in this. We are trying to work

this issue—I would prefer it if you would indulge me that I brief

you privately on that matter, but it is an issue we are pursuing.

On the question of indictments, of course that is an issue for the

Department of Justice, and they are continuing to pursue this

issue, but they do not have the basis for indicting these people as

yet, and I would urge you to get the answer from them. But we are

working with them to pursue that issue, and Mr. Mark Richards

16

will be joining us on another trip to Israel and the Palestinian Authority in the near future as we pursue these issues.

As far as Mr. Deif is concerned, he is, as you are probably aware,

one of the masterminds of the Hamas bombing campaigns. He has

been a fugitive for some years now. We believe he is in Palestinian

Authority-controlled territories. We have pressed at the highest

levels, by which I mean President Clinton himself, the Palestinian

Authority, to find Deif and to arrest him and prosecute him, and

this has been a constant effort on our part.

We have seen a responsiveness on the part of the Palestinian Authority and a serious effort, particularly recently, to try to find him,

without success. We have indeed criticized the Palestinian Authority in the past for its failure to apprehend Deif, and this will continue to be one of our highest priorities in our engagement with the

Palestinian Authority on these kinds of security issues. I would say

that we have seen a marked improvement in the performance of

the Palestinian Security Authority when it comes to preventing terrorism, and they are working closely with Israeli security services

to achieve that objective. This remains an outstanding issue, and

we will not be satisfied until Deif is in custody. We will continue

to pursue that.

Chairman GILMAN. The gentleman’s time has expired.

I am going to ask that the Department of State letter of June

3rd, 1999, with regard to this issue be made part of the record.

Mr. Menendez.

Mr. MENENDEZ. Thank you, Mr. Chairman.

Mr. Secretary, let me direct my questions to Iran and its nuclear

capabilities. In December of this last year, Jamie Rubin said the

following about the U.S. position on Bushehr’s Nuclear Power

Plant. He said, ‘‘We are convinced that Iran is using the Bushehr

reactor project as a cover for acquiring sensitive Russian technology’’. Then in your own statement on page 5 you talk about the

Administration’s policies as pursuing multilateral efforts to prevent

Iran from acquiring and developing weapons of mass destruction;

and on page 12 you specifically talk about, again, the concern of

Iran’s ability to develop weapons of mass destruction and its clandestine efforts to procure nuclear, chemical and biological weapons.

You go on to say, in this regard, that we are particularly concerned

about Iran’s nuclear drive.

With all of those statements and many others that the Administration has made, can you tell me then how is it that the State Department has requested an increase for voluntary contributions

above and beyond those which we use to participate in the international Atomic Energy Agency? Which voluntary contributions

have fueled the development of the Bushehr nuclear power plant

in Iran? I raised this question, I believe, with you the last time you

were here. I have raised it at other times as well.

I have since learned that the IAEA has initiated a new program

in Iran to help the Iranians in the area of uranium exploration.

The IAEA in the past years has had a similar exploration program

in North Korea, which we objected to, and following our objections,

the program was ended.

So my question, Mr. Secretary, is do we continue to support the

IAEA’s voluntary contributions to building what, in fact, they

17

themselves describe—and I am going to read from their project description, which says, ‘‘the technical support of the national authorities,’’ referring to Iran, ‘‘in the proper discharge of its function

for the safe implementation of the Bushehr nuclear power plant

will be critical, critical, for the design and construction of the

plant’’.

We continue to have Administration witnesses who tell us we

never want to see this plant built, and yet we continue to fuel it.

Can you explain to me how that policy is consistent?

Mr. INDYK. Not easily. I think that the way to reconcile these,

in terms of understanding what is going on here, is to understand

that we do have an interest in seeing the IAEA extend its safeguards in Iran, and the IAEA is at the moment in the process of

seeking Iran’s acceptance of enhanced safeguards that would

have—or would give—the international community and, therefore,

the United States a better ability to get a handle on Iran’s nuclear

activities, and that is in our interests.

The IAEA is not an agency of the U.S. Government. We don’t

control it, and they are going about this process according to their

own judgment about how to secure this, and their view is that

under the nonproliferation treaty, signatory states are entitled to

technical cooperation, and that is why they have engaged in these

projects that you are talking about. It is under that rubric of technical cooperation.

We have made our views clear to the IAEA. We have objected to

the project, and we have done so at senior levels of the IAEA. The

agency has nonetheless decided to proceed with that project.

Mr. MENENDEZ. Mr. Secretary, my concern is very simply that

while the IAEA is a great agency and we all support it, we all support, to the extent that any country is going to promote a nuclear

program, for it to be under the safeguards established under the

international norms of the IAEA. We in the past raised in North

Korea questions very strenuously about uranium exploration. We

already know that the Iranians have uranium conversion technology. Now we are going to help them seek uranium, we are going

to help them with their technical cooperation, and we may not control the IAEA, but we are its major, major contributor of voluntary

funds. I cannot believe that we cannot achieve in the Iran case

what we achieved in the North Korea case and, at least, not give

them the uranium exploration capability that will ultimately make

the reactor a reality.

I do hope the Administration will vociferously take a position in

this regard. Otherwise it is a hollow policy as far as I am concerned.

Mr. LEACH. [Presiding.] Thank you. I would just like to raise several quick issues. One, you referenced in Jordan the desire to get

Japanese debt forgiveness. On the table in the international community at this time is a broader debt forgiveness involving 45 of

the poorer countries in the world. The Administration has theoretically been somewhat supportive, but has not been definitively so,

and I understand the subject is going to be raised at the next G–

7.

I would just like to emphasize, because it touches potentially either directly in your jurisdiction in one or two countries or neighVerDate 11-SEP-98 07:42 Apr 28, 2000 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 63467.TXT HINTREL1 PsN: HINTREL1
18

boring jurisdiction, there is a lot of support in Congress for this initiative, and I hope that you are not too dainty in your attitudes.

As you are advocating debt forgiveness for Japan, this is an exceptional time for the poorest of the poor to be very forthcoming. I

hope that message is loud and clear to the Department of State,

which has not been quite as active as it should be on this subject.

There will be legislation that will be under consideration by perhaps this summer in that regard.

Second, I would like to raise the issue of culture and food. With

regard to Iran, you have properly referenced that we do have some

more forthright cultural exchanges. Everybody in life has certain

interests, and you reference some orchestras and music and academic exchanges, but the greatest aesthetic art in the history of

mankind is the sport of wrestling, and I hope the Department of

State continues to bear that in mind, particularly with Iran. Wrestling is more important to Iran by maybe a thousandfold factor

than ping-pong was to China. I hope as these wrestling exchanges

come into being, the Department of State will be forthright, and I

bring to you an Iowa perspective on this subject as well as a very

personal one.

With regard to food in Iran, I happen to believe, as many do, that

in terms of people-to-people relations, food and medicine are fundamentally people to people as contrasted with geostrategic and

other dimensions, at least absent actual war. It is, of course, appropriate to open up in food and medicines with Iran, but it may not

be a significant step unless there are government loan guarantees

on the food side. So my question to you is, is the Administration

considering loan guarantees on food exports to Iran?

Mr. INDYK. First of all, on the issue of debt forgiveness, this is

not my area of responsibility, but I will certainly take back your

views and make sure that they are registered forcefully with my

colleagues. Jordan actually is not part of that group of the poorest

nations, but for the other reasons that I have outlined to Congressman Lantos, we feel that it should enjoy the benefits of that debt

forgiveness.

We agree with you completely and welcome your comments about

wrestling, and we have sought to facilitate an exchange of wrestlers in various competitions, and that clearly resonated very

strongly with the Iranian people. The unfortunate thing is that we

can do these kinds of things, and we will continue to do them—and

people-to-people exchanges are important, and the Iranians proposed enhancing that, and we have taken them up on that—but it

hasn’t, unfortunately, so far, perhaps it is too soon, had the kind

of snowballing effect in terms of their willingness to engage with

the United States in discussion of the issues of concern to us and

the issues of concern to them.

We made it clear that we are ready to discuss both, but that we

need to have that discussion. I think the President has been very

clear in his interests in finding a way to engage with Iran, but we

have also been very clear that there are these issues that need to

be addressed, and that we are prepared to do so. There are things

that concern them as well as the things that concern us.

19

I hope that wrestling will have the desired impact, and that

sooner rather than later we will have the chance to wrestle with

them over the negotiating table.

As far as loan guarantees, I have to answer that question in the

negative. As part of this decision, we do not intend to provide loan

guarantees for the purchase of food or medicines. The Iranian Government has the ability to pay for the needs of its people. If it

doesn’t, we think it should spend less on armaments, and particularly weapons of mass destruction, and more on the needs of its

people. I don’t think that the need is really there in this case, but

even if it was, I don’t believe that we would be involved in that

kind of business. As I make clear in my opening remarks, we are

opposed to international financial lending or extension of credits to

Iran as long as it goes around doing things which threaten our interests and the interests of the international community.

Mr. LEACH. Fair enough. I just want to conclude by emphasizing

I think everybody in this Congress would rather have exchanges

with Iran based on muscle and not missile power.

Mr. Berman.

Mr. BERMAN. I would like to focus on your testimony on Iran,

and I missed part of it. I take it is the Administration’s belief that

Iran continues to supply financial and other forms of assistance to

organizations that we view as terrorist organizations. Does that assistance continue at this time?

Mr. INDYK. Yes, it does, in particular to Hezbollah.

Mr. BERMAN. What about Hamas?

Mr. INDYK. To Hamas it is more in terms of training and political

connections, as far as we are aware. The Hamas doesn’t have financial problems that they need to depend on Iran for financial assistance. They have their own network that we have been trying

to shut down, a global network for raising funds. The Iranians also

provide financial support to the Palestine Islamic Jihad, which is

a straight terrorist organization based in Damascus. So it is basically Hezbollah, Hamas and PIJ that we are concerned about.

Mr. BERMAN. There is a view that has been stated a lot that basically President Khatami doesn’t really have control of foreign and

security policies. Is that the Administration’s view, that others in

Iran are in control on those issues; and that notwithstanding his

perception as a moderate, it has very little impact on Iranian foreign policy?

Mr. INDYK. I think he does control Iranian foreign policy, if I can

draw a distinction between that and national security policy. He

doesn’t control, as far as we can tell, the national security institutions, whether it is the Iranian Revolutionary Guards and their terrorist arm, the Al Guds force, or whether it is the Ministry of Intelligence, although he does have some influence there ,but he doesn’t

appear to control it.

As far as how to characterize what is going on there, I think we

in the West, in the United States, have tended to view this as a

struggle between the forces of enlightenment and the forces of reaction, with Khatami representing the good guys, with Supreme

Leader Khomeini representing the bad guys, and with former

President Rafsanjani somewhere in the middle. I am not sure that

this captures the complexity of the power struggle that is going on.

20

There is certainly a dimension of that where the conservatives, and

the conservative clergy in particular, are concerned about the way

in which the people want greater freedom, freedom of expression,

greater respect for the rule of law, greater individual freedoms.

Khatami, the President, very much represents that point of view,

but when it comes to national security policy, it seems that there

is a kind of collective decisionmaking that goes on, and he operates

within the context of this collective decisionmaking. I think we

have seen considerable change in some areas.

If you look at the rapprochement within the Gulf in particular,

with the Gulf Arabs, you see that they have attenuated some of

their objectionable policies when it came to subversion and promotion of terrorism against these countries. They have, for all intents and purposes, stopped that, which suggests that there is

some kind of collective decision in that regard.

I think we have to view it in both respects. What they have been

able to do in the Gulf is entirely reasonable to expect them to be

able to do when it comes to other forms of terrorism, particularly

terrorism against the United States. We continue to be concerned

about surveillance activities and preparations in that regard and

when it comes to terrorism against the peace process. We are hopeful that they will come to understand that the very principle that

they have applied in the case of reconciliation and rapprochement

with the Gulf Arabs applies in these other cases as well, and that

they will stop pursuing terrorism completely.

Mr. BERMAN. So it is now fair to conclude that, notwithstanding

some internal liberalization, what I take to be a relatively open

election recently and some changes in Iranian attitudes toward its

neighbors in the Gulf, that on the basic points of continuing to develop a nuclear weapons capability, a long-range missile capability,

and continuing support for at least certain terrorist organizations

designed to try and destroy the Middle East peace process and perhaps some U.S. targets as well, those problems that caused our

dual containment policy to develop are ongoing. Is that a fair——

Mr. INDYK. That is correct. With reference to dual containment,

there is a long section that I didn’t refer to in my opening statement about this. Dual containment is a policy that has developed

over the past 6 years in two directions. In the case of Iraq, we are

containing until overthrow. In the case of Iran, we are containing

until engagement. So we are, in a sense, ready to go two different

ways when it comes to Iraq and Iran, or we are already embarked

on different routes.

Mr. BERMAN. I understand, and if we were to start negotiating

or discussing our differences with Iran, U.S. policy would not keep

us from doing that as I understand it?

Mr. INDYK. That is right. We have made it clear that we would

engage with them.

Can I draw a distinction? I am not so sure how useful it is, but

I think it is important that in the case of Iran’s pursuit of weapons

of mass destruction, that is something on which we don’t see any

differences between Khatami and Khomeini, or, for that matter, between this present government and the previous government of the

Shah of Iran. The explanation for that, I think, is that Iran lives

in a strategic neighborhood where other neighbors have these

21

weapons. Iran has strategic ambitions to be dominant in its region,

and those are powerful motivators that will affect the whole question of whether they continue to pursue these weapons.

Mr. BERMAN. Mr. Chairman, would you just indulge me one reaction to that comment?

Chairman GILMAN. [Presiding.] Without objection.

Mr. BERMAN. I have thought for a long time that it is a mistake

to hinge our policy toward Iran on whether Iran is continuing to

pursue its weapons program. It is going to do that as long as it sees

that that is in its interest, it seems to me—as opposed to, say, its

continued support for terrorism and its implacable opposition to the

Middle East peace process. On the issue of its weapons program,

the focus should be on those countries that are contributing to Iran

getting that program, not on Iran’s policy. We should be looking at

the proliferators in our continued and ongoing attempts to impede

and slow down their ability to get those weapons.

Mr. INDYK. I agree with you, with one caveat, and that is that

we do concentrate on the proliferators. As you know, we have had

some success when it comes to North Korea and China. We have

had less success when it comes to Russia. We are continuing to

focus on that and hope that the kinds of action plans that have

now been agreed on will be implemented, the kinds of law that

have been passed there will also be implemented, and that this will

have the effect of controlling the flow of technical assistance to Iran

for its weapons programs. But it still remains important to address

the issue of how to deal with the implications of Iran’s acquisition

of these weapon of mass destruction. That is an issue we are increasingly concerned about because of the way in which it can generate an arms race in the region, where countries who feel threatened by this development feel it necessary to develop their own

weapons of mass destruction and missiles and so on. That is why

we have developed this comprehensive approach that, on the one

hand, tries to help our allies in the region—Israel, the Arab countries, Turkey—help them to defend against these threats, help

them to deter such threats, help to slow them down, as you already

suggested, and also tries to find a way to establish a regional security system in which these weapons do not represent destabilizing

elements. That requires a moderation of the regimes that have

these policies as well.

So, as part of a comprehensive approach, moderating the regime

in Iran is an important element.

Mr. BERMAN. Thank you.

Chairman GILMAN. Thank you, Mr. Berman.

Dr. Cooksey.

Dr. COOKSEY. It is good to have you here today. The ClintonCarville team was actually involved in the race in Israel recently,

and I was over there earlier when the campaign was going on. My

question is, first, what are the Administration’s plans in terms of

what is going to go on with Israel and its surrounding neighbors,

and are we going to impose the Administration’s plans for the settlement of the Golan Heights issue and some of the other issues

there?

Second, if we are imposing our political values and political campaigns on the Middle East countries, are we going to continue to

22

impose Americanism on these other civilizations that have different

cultural values; or are we going to allow them to keep the good

things about their culture and their civilizations as they move into

a world in the next century in which people’s values, lives and freedoms are respected?

Mr. INDYK. We have long believed that peace in the Middle East

cannot be imposed on the parties, on any party; that the only way

to achieve a lasting peace is through a direct negotiation between

the parties in which they reach agreement amongst themselves. We

can facilitate that. We can, where it makes sense, propose ideas or

bridging proposals; but we cannot and will not impose our own

view of a settlement on the parties because that is just a recipe for

an unstable arrangement that won’t last, and we are not interested

in that.

As far as imposing our culture, you raise an interesting point

about which I think there is a great deal of concern, particularly

in the Arab world, where it has been present for not just for decades, but for centuries. This is the historical tension between the

West’s culture of modernization and Islam’s values, and it has in

many ways been a creative tension. Islam has made a tremendous

contribution, as you are probably aware, to Western civilization,

but at times it can be quite threatening to them.

But my first point is that this is not a new phenomenon. It

doesn’t come with the Internet and globalization. It has been there

for many centuries, in fact, since Napoleon invaded Egypt. In the

current environment, what we see in the region is an effort to come

to terms with this, to try to reconcile the tension between Islam

and the West; and what we do see is traditional Islamic conservative societies beginning to change, to modernize. The modernization is inevitable as a result of globalization, but as the new generation comes forward, we see—and that is what we are witnessing

now—a generational change in the Middle East. We see a greater

openness and receptivity to the process of modernization, and this

is occurring at both the levels of the people and the leaders. An important phenomenon to note is the way in which the succession

process is now taking place to the next generation.

It happened in Israel’s democratic process with the election of

Netanyahu, and Barak is of that generation. It has happened in

Jordan with the passing of the throne to the next generation, King

Abdullah rather than the previous crown prince, King Hassan, the

king’s brother. We have seen it happen in Bahrain as well with the

new emir, the son of the old emir. We see an ophthalmologist in

Damascus being groomed by his father to take over there.

Dr. COOKSEY. Better than a lawyer.

Mr. INDYK. But it is not just there. King Hassan in Morocco is

grooming his son to take over. Throughout the Gulf you have a new

generation being prepared to assume power, and those people, coming from a younger generation, most of them having been educated

in the West, do bring to government a modern outlook and an ability to reconcile this tension in a way in which the older generation

had much more difficulty.

Dr. COOKSEY. Good; that is my concern. I have met people on

both sides of the issue in the Middle East on the Israeli side and

on the Arab side, and there are some wonderful traditions in all

23

the cultures. I just hate to see us go in and impose our political

system. There are some bad things about our political system, too,

sometimes; and I also hate to see us put a McDonald’s on every

corner, because they have some wonderful food without McDonald’s—in fact I seldom go to McDonald’s here. I would hope that

the good things about their culture, their religion, their traditions

are left alone. Maybe some of the areas that cause some problems

and are not ideal in a democratic society will improve with time.

Thank you, Mr. Ambassador.

Chairman GILMAN. Thank you, Dr. Cooksey.

Mr. Delahunt.

Mr. DELAHUNT. Thank you, Mr. Chairman, but I will defer to my

colleague, who I think was here before me.

Chairman GILMAN. Mr. Sherman.

Mr. SHERMAN. Thank you, Mr. Delahunt. Thank you, Mr. Chairman. I want to invite the doctor to my district where the number

of Middle Eastern restaurants nearly reaches the number of

McDonald’s.

Dr. COOKSEY. Great.

Mr. SHERMAN. I want to commend the Ambassador for his response on the question of loans to rogue states. I know it is particularly appealing to think that we are providing food, but really, we

are just providing money. Even something as seemingly innocent

as a loan guarantee to Iran to buy food is as good as a loan, because if you can borrow money with the full faith and credit of the

United States, you can get money anywhere and at low rates.

Money is fungible, and the money that Iran doesn’t need to spend

from its own budget to buy food can be used to buy weapons of

mass destruction or to fund terrorism. I would add for the record,

and I don’t have the citation, that a study of Iraq during the 1980’s

indicates that the money it was able to avoid spending to buy food

went directly into its weapons acquisition and development programs.

I particularly want to commend the Ambassador for his statements about the 13 Jewish religious leaders from the Iranian city

of Shiraz. I believe this is the first public U.S. Government comment; and that makes sense because, although these religious leaders were seized during Passover, over 60 days ago, many of us have

worked behind the scenes. But you can’t work behind the scenes

anymore now that the Iranian Government has charged these individuals, rabbis, with spying, a capital offense in Iran. Mr. Ambassador, what effort is the State Department undertaking or planning to undertake in order to secure their release or at least assure

their safety?

Mr. INDYK. Thank you, Congressman Sherman. I know that you

have been particularly concerned about this and involved in trying

to resolve the situation. It is, I am sure you will agree, a very unfortunate development that the Government of Iran has announced

that these 13 Iranian Jews from Shiraz and Isfahan, some of them

teachers, some of them rabbis, have been charged with espionage.

As you know, we have been actively following this since it occurred,

seeking to support efforts by others to find a solution to the problem, and we will continue to do so.

24

As you know, we do not have a direct dialogue or ability to engage the Iranian Government directly in this regard. We will certainly be active in ensuring that those who do have the ability to

engage with the Iranian Government make this an issue. I would

repeat again what I said in my opening remarks, when I don’t

think you were here, that we call on the Government of Iran to ensure their safety and to release them immediately.

Mr. SHERMAN. I was here in spirit. I heard you.

We have recently undertaken an extraordinary effort for the benefit of peace and security in Europe. We have reacted to human

rights abuses and stability threats in Europe with greater force

than similar threats and similar abuses on other continents. With

that in mind, have we called upon Europe to pressure or even perhaps reduce its economic involvement with Iran? I make reference

especially to the investment of the Total French Oil Company in

Iranian oil fields. Is that something we are either doing or anticipate doing?

Mr. INDYK. We have worked closely with our European allies,

particularly when it comes to counter proliferation, to prevent Iran

from acquiring the technology capabilities that would enable them

to advance their WMD Programs. Its the same when it comes to

terrorism—making sure that this is an issue on their agenda when

they engage with the Iranians.

When it comes to economic pressure on Iran, we have been less

successful. We have tried hard over the years to persuade our allies

not to engage in normal commerce with Iran. We succeeded in

some cases in preventing international financial institutions from

lending to Iran. We have succeeded in holding up any kind of foreign assistance to Iran, but when it comes to commercial dealings,

including foreign credits by these countries, we have had less success.

When it comes to investment in the Iranian oil industry, we have

taken a very strong position against that, as has the Congress. We

have opposed that very forcefully. The Congress has enacted the

Iran-Libya Sanctions Act, which provides for sanctions in the case

of foreign investment in the Iranian oil industry.

Mr. SHERMAN. Mr. Ambassador, if I could cut you short because

I just want to get in one question to which you may want to respond in writing later. I do hope in light of Kosovo that the European public is urged to make some sacrifices in this direction.

I just want to shift and put in the record a question. We have

not moved our embassy to Jerusalem or taken other steps because

we do not want to deal with issues involving final status, yet at the

same time the President has written a letter stating that the Palestinian people should be able to determine their own future on their

own land, which many have been interpreted as leaning in the direction of statehood or at least dealing with the issue of final status. In light of the Administration already commenting upon final

status with regard to self-determination, how could it be harmful

for the U.S. Ambassador to officially maintain a working office in

Jerusalem or to allow Americans born in Jerusalem to have their

parents listed on their passport, place of birth, Jerusalem, Israel?

Mr. INDYK. Do I have a chance to answer that?

25

Chairman GILMAN. Please, yes, but time is short, so we will have

to conclude right after Mr. Delahunt. Go ahead.

Mr. INDYK. In terms of the statement the President made, this

is not a new statement. This is a repetition of statements he has

made in the past. He is very careful to avoid endorsing Palestinian

right to self-determination. I think you, yourself, said some may

have interpreted it that way, but that is not the position we have

taken. We continue to argue very forcefully and effectively to the

Palestinians that the only way in which they can pursue their aspirations effectively is through negotiations, and that is the exact

context in which those words you read were made in the President’s letter to Chairman Arafat. That is the position that we took

and succeeded in getting him to avoid making a unilateral declaration of independence.

We are entirely consistent in saying that whether these issues

are Jerusalem or the status of the Palestinian and Judea issues,

that the parties agreed they would deal within the final status negotiations, and that is where they should be addressed. We will not

seek to preempt the outcome of those negotiations, whether they

have to do with Palestinian rights or Israelis.

When it comes to the—you mentioned passports, and what was

the other issue? Can you help me?

Mr. SHERMAN. One issue was officially maintaining a working office.

Mr. INDYK. Yes. I just wanted to make clear that we had a suite

of rooms in a hotel when I was Ambassador that we maintained,

the Alon Hotel. Now the Ambassador has an apartment there for

the sake of convenience and security and for conducting business

in Jerusalem. We use those rooms for that purpose, and that has

been a long-standing practice. I think it started under Ambassador

Sam Lewis, so we don’t avoid doing business in Jerusalem in that

way.

As far as the passport is concerned, it is a very difficult issue

which I personally feel quite uncomfortable about. But again, consistent with our policy of not wanting to do anything that would

infer that we take a position on this issue, we have avoided resolving that.

I hope, Mr. Sherman, that we will be able to get the final status

negotiations resumed in short order, and that we will be able to resolve these issues in those negotiations. Our objective is to try to

do that on an accelerated basis, and that hopefully a year from now

we won’t have to have these kinds of discussions.

Chairman GILMAN. The gentleman’s time has expired.

Mr. Delahunt.

Mr. DELAHUNT. I don’t know if I have any time, Mr. Chairman,

but let me just pose three questions, and if there is insufficient

time, maybe you can communicate in writing. You expressed concern about Iran’s position vis-a-vis the Israeli-Palestinian peace

process. Could you describe the level of activity that you discern in

terms of impeding that process?

Second, on page 12 of your testimony, you refer to concern about

the arms race and ballistic missiles and weapons of mass destruction. Then you go forward to talk about strengthening active and

passive defenses and enhancing deterrents. I am just somewhat

26

concerned that we may be encouraging or inciting or aiding and

abetting that arms race. Could you just clarify that?

Again, I refer to page 10 of your testimony which discusses how

we have worked constructively with Iran in multilateral settings on

issues of common concern, such as countering the spread of narcotics. I applaud that. I would like to hear you amplify on that.

Who is winning those wrestling matches, by the way?

Mr. INDYK. We are.

Mr. DELAHUNT. We are. That is good to hear.

Mr. INDYK. In terms of Iranian opposition to the peace process,

I think the best example of the problem here was after the Wye

Agreement was signed by Chairman Arafat. The Iranians came out

and attacked him and the Palestinian Authority in a very critical

way, and I think within about a week of the signing of that agreement, a bomb went off in Jerusalem. Thankfully, it went off prematurely and only wounded a few people, but the Palestine Islamic

Jihad claimed responsibility for that bomb, and that bomb was

aimed at the heart of the peace process.

Mr. DELAHUNT. You have concluded that was not simply because

of the link between Iran and the Jihad, but that this specific act

was supported by Iran?

Mr. INDYK. Let me be a little careful here.

Mr. DELAHUNT. Right.

Mr. INDYK. What is clear is that Iran is supporting the Palestine

Islamic Jihad, and the Palestine Islamic Jihad is not like Hamas.

It doesn’t have a kind of political movement behind it. It is a

straight terrorist organization, and it is financed by Iran, and that

is the problem. If that bomb had succeeded in going off when it was

supposed to in the middle of a market in Jerusalem, it would have

had a devastating effect.

So we have to ask ourselves, what are the Iranians up to? What

are they trying to achieve here? It seems from their rhetoric as well

as their actions that they want to impede the peace process. They

want to succeed. I believe that, however, past terrorist bombings

that were backed by Iran did have an effect in seriously slowing

down the process. It is because of these specific issues that we continue to be concerned about it. You have a situation where President Khatami, who has condemned terrorism, goes to Damascus

and meets with these groups, and we have to ask ourselves why,

is that necessary?

When it comes to what we are doing on the WMD front, I think

I understand your point, but what we are trying to do here is help

countries that are threatened by these weapons, and deal with it

through defense or enhancing their deterrent capability with our

own deterrent capabilities. These are difficult, complex questions.

We are not there yet. We are not ready to brief you on exactly what

it is we have in mind when it comes to deterrents, but the whole

purpose is to avoid that arms race rather than to fuel it.

When it comes to counter narcotics, the Iranians have been very

aggressive in their efforts to stamp out narcotics production in Iran

and transiting of narcotics through Iran.

Mr. DELAHUNT. Have we worked with them in a multilateral——

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Mr. INDYK. Through the UNDP, we have. We have supported

that. We have recognized their efforts in that regard by taking

them——

Mr. DELAHUNT. If I may, Ambassador, have our drug enforcement officials, our law enforcement officials had direct contact with

their counterparts?

Mr. INDYK. I don’t believe so, although I am not exactly sure, but

that hasn’t happened in international fora. I believe that there may

be some opportunities in the near future.

Chairman GILMAN. The gentleman’s time has expired.

Mr. Secretary, one last question. Is the Administration considering ways to extend the life of existing economic aid programs for

Yemen which are currently operating on residual funds in a pipeline, and what is the status of Yemen’s request that the Peace

Corps return to Yemen?

Mr. INDYK. The answer is we would very much like to. I think,

Mr. Chairman, how seriously stressed the foreign aid funds are,

and any help that you can provide us in that regard in terms of

the moneys available would be much appreciated because we do

think Yemen deserves support and that the aid program should be

extended.

Chairman GILMAN. Thank you very much for your time and patience, Mr. Secretary. The meeting stands adjourned.

[Whereupon, at 12 noon, the Committee was adjourned.]

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