Iran sets out to woo Gulf states: Foreign Minister goes touring after Egypt's Mubarak warns of Tehran-backed terror

(First Edition)

PITY President Hosni Mubarak of Egypt. Last week he was traipsing round Saudi Arabia and the Arab Gulf states, cap in hand, seeking investment in his impoverished country.

He told Arab leaders it was in their interests to support Egypt to prevent it being destabilised. He also sought to alert the Arab states to the dangers of what he called Iranian-sponsored terrorism at a time when Egypt is wracked by outbreaks of violent confrontation inspired by militant Islam.

Mr Mubarak's stock is still high because of his support for Saudi Arabia and Kuwait during the confrontation with Iraq. He is keen to revive the Damascus Declaration, the Gulf security arrangement between the rich but weak six members of the Gulf Co-operation Council and the two countries with the largest Arab armies, Egypt and Syria. The six-plus-two are to meet in Abu Dhabi next month to discuss Gulf security arrangements.

Then on Tuesday, Iran's Foreign Minister, Ali Akbar Velayati, arrived hard on his heels in Saudi Arabia at the start of his own tour of the six Gulf states. Mr Velayati had a rapid turnaround: he set off from Tehran barely a couple of hours after arriving from Spain, and never left the airport.

For all the protestations of the Saudis and the Gulf Arabs, Mr Velayati's visit seemed almost a demonstration that they did not buy Mr Mubarak's view that Iran was a destabilising force in the region through its support of Islamic movements.

The Saudis are reluctant to alienate such a potentially dangerous neighbour. For despite the fact that it was with Iraq that Saudi forces went to war two years ago, the Saudis still regard Iran as the main threat to the region. And all the Gulf Arab states are wary of Iran's rearmament programme. There is no doubt that in any repetition of the Iran-Iraq war, they would close ranks with their fellow Arabs. In the meantime, they believe in seeking to defuse tensions through dialogue.

As for the smaller Gulf states, they have all in some measure adopted a pragmatic policy towards Iran. Oman has had good relations since the days when the Shah helped put down an insurrection. The dispute with the United Arab Emirates over three islands in the Gulf has largely blown over. Qatar has ambassadors in both Tehran and Baghdad.

In matters of substance, Mr Velayati has much to talk about: Opec strategy, arrangements for the pilgrimage to Mecca, Gulf security - with Iran keen to exclude all non-Gulf states, such as Egypt and Syria.

At the same time, the Iraqi National Congress (INC) is sending a high-level delegation on Monday to Saudi Arabia on its first official visit. The INC, the umbrella organisation for dissident Iraqi Kurds, Sunnis and Shias, last month had talks in Washington with Vice-President Al Gore, the Secretary of State, Warren Christopher, and the National Security Adviser, Anthony Lake.

Until now the Saudis have dismissed the INC as ineffective, fragmented and incapable of providing an alternative government to Saddam Hussein. The measure of how far the Saudis are prepared to acknowledge the INC will be the level of their reception - whether or not they will be received by King Fahd.

The INC has for its part come to recognise that it cannot ignore either Saudi Arabia or Kuwait if it is to do anything to help the Shias in southern Iraq. But greater at present than any political moves in the region are the dire economic and monetary consequences of President Saddam's decision to announce that the old foreign-printed 25 dinar notes are no longer legal tender.