The United States and Saudi Arabia were key players on the sidelines of the Israel-Hizbollah conflict in Lebanon. Early in the crisis, after Riyadh issued a stinging rebuke of Hizbollah,  senior Saudi officials met with President Bush at the White House in an unsuccessful effort to press for Washington's backing of a ceasefire. In an exclusive interview Nawaf Obaid, director of the Saudi National Security Assessment Project, talked with SUSRIS about how the lack of an American response to Saudi overtures has "dampened trust in the Bush Administration" among government officials in Riyadh.

Mr. Obaid also discussed the host of regional and bilateral issues uppermost on the minds of those who follow developments in Saudi-US relations, including the crisis in Iraq and the confrontation with Iran. SUSRIS would like to express appreciation to Mr. Obaid for sharing a comprehensive set of briefing slides on his Iraq assessment with our readers (link below) and for taking time to share his insights.

SUSRIS talked with Mr. Obaid by phone from Riyadh on August 19, 2006.

SUSRIS: How has the Lebanon crisis affected the US-Saudi relationship?

Mr. Nawaf Obaid: On the professional level, the government-to-government relationship, it hasn�t changed. But it must be said that the handling of the crisis has caused a substantial amount of embarrassment for the Kingdom. 

Saudi Arabia came through with, what could be called �its part of the bargain.� The Kingdom was forthright in its perspective of what Hizbollah was doing. It stepped up to the plate by offering political coverage for other countries to come in and condemn what Hizbollah had done. That was made with the hope that America would rein in the Israelis. The reality proved to be the complete opposite. To some extent that embarrassed the Saudi leadership while at the same time it gave Hizbollah support within the wider Arab and Muslim world.

The expectation was that both sides would rein in their respective, if you want, constituencies. That would put an end to it, to put an end to the Israeli attack on Lebanon while beginning to isolate or sideline Hezbollah�s operations there. It actually backfired because one side did do what was needed -- Saudi Arabia came out with strong statements -- and the other side, the Americans, did absolutely nothing. And this is what led to the situation we are in today.

SUSRIS: What do you think will be the fallout of, as you put it, one side not fulfilling �its side of the bargain?�

Obaid: If there is any fallout, it is the matter of trust. This episode has really dampened trust toward the Bush Administration. The view creeping up in government circles now is that America can no longer be trusted.

SUSRIS: How would you characterize the response to this crisis among the Saudi public?

Obaid: I wouldn�t be surprised if the US had the lowest rating in Saudi Arabia. It was very low before -- the people to people situation. It has sunk even lower now. 

More worrisome than popularity, as I mentioned, is the fact that a feeling of mistrust has crept into the government, within the echelons of higher government in Saudi Arabia.

SUSRIS: There are other problems that Saudi Arabia and the United States must deal with in the region. What�s the Saudi perspective on Iraq? 

Obaid: Well the fact is that the Iraq situation went from bad to worse, and has gone downhill from there. You�ll remember that Saudi Arabia told the Bush Administration from the first that this is what would happen. It was a prophecy that�s playing out in front of our eyes. At this point there is not much that we can do. American decision makers won�t listen to anyone. They are trying to make the best out of the situation but it is just going from bad to worse and Saudi Arabia and all the other countries in the area are completely helpless in this case. They can�t do anything more.

SUSRIS: What is your evaluation of likely courses in Iraq?

Obaid: We�ve spent more than a year on a major assessment on Iraq this year. It was an independent assessment for the government and our conclusion was that there will be a split up of the country. 

In that presentation we outlined the situation from Saudi Arabia�s perspective. The facts are that the Kingdom is the largest creditor for Iraq. It is the country that is the natural bastion of the main Sunni tribes in Iraq. You know they always look to Saudi Arabia as their natural base because that�s where they mostly come from. 

You know there was a lot Saudi Arabia could have done in the beginning if the Americans were ready to listen. From the beginning it was very clear the Bush Administration had no intention to listen to Saudi Arabia whatsoever. That approach has influenced what we are seeing today -- especially dealing with the insurgents, and dealing with Al-Qaeda and dealing with all of these people. 

[Ed. Note: SUSRIS is pleased to make available on SUSRIS.org briefing slides provided by Nawaf Obaid on his study, �Fractured Iraq: Implications for Saudi National Security,� Saudi National Security Assessment Project � June 23, 2006 - CLICK HERE ]

SUSRIS: Let�s talk about Iran. We are approaching the UN Security Council deadline for Tehran to abandon its nuclear material enrichment program and there�s more concern than ever about Iran�s regional, their hegemonic, designs. What are your perspectives on these issues?

Obaid: There is an obvious difference between what the Iranians are saying at the official level to the Saudi leadership, to the Saudi government, and what is happening on the ground. There is now a realization that the difference is significant. 

The major concern is what they have done in Iraq, which is shocking to a lot of people. Your readers can learn more about that in the report on Iraq I discussed earlier. Obviously people are also concerned with what Iran has been doing in Lebanon. 

To be a hegemon you have to have the economic, political and military power. Iran�s economy is half that of Saudi Arabia, so they don�t represent an economic threat. Their oil exports are only a quarter of those of Saudi Arabia -- that directly impacts their political strength in the region. Their military is much larger than Saudi Arabia�s, but the quality of equipment and their maintenance of it is questionable. We also have questions about how efficient they are. 

There is the obvious fact that they are not Arabs. They are Persians and they are mostly Shiites. Shiism represents 10-15 percent of the world�s Muslims today, so again there is that factor to consider in their regional aspirations. 

In Saudi Arabia our major concern is what are they doing in Iraq, what they�ve done in Lebanon and this whole issue about their nuclear program. 

We must ask ourselves why is there a huge difference in rhetoric and substance. They make a big effort to deal with Saudi Arabia. They come to Riyadh a lot. There are two or three different official visits to Saudi Arabia a month. They say a lot of nice things and they give assurances and all that, but on the ground they are doing something different. So this is where our main concern lies today. 

SUSRIS: What conclusions are people drawing about why the difference in rhetoric and what�s going on on the ground and how is that likely to play out? What do you see as the path the nuclear showdown will take now that the UN Security Council has given Tehran a deadline?

Obaid: We have always believed there were two real governments operating in Iran. There was the one we dealt with and there was the one that did all those provocative things. 

The difference now is that we have more and more of an idea that they are the same people. The government in power, we believe feels a need to get a nuclear weapon and they will get it if not stopped.

We realize that their argument of developing a nuclear power program for economic necessity actually does make sense. If you look at the numbers Iran is not a wealthy country. They export barely enough oil to meet their basic payment requirements. For example, their exports this year will total more or less the same amount of exports for a country like Kuwait or the United Arab Emirates. The difference, of course, is these are countries of four or five million people. Iran has a population of about 70 million. That�s a big difference when we talk about net foreign petroleum earnings. They are importing refined products from aboard which cuts into their foreign exchange imports. So going nuclear, for domestic energy production, would free up a lot of the foreign exports that will go into increasing foreign revenues. It does actually make sense.

We do see the nuclear program is credible but not the way they are carrying it through, not what their saying, not their policies. We see there are disconnects among what they say, what they need and what they are actually doing. That�s why there are a lot of questions that need to be answered.

Still, things seem to be changing -- what�s been going on with Hizbollah, Iranian influence in Syria. Things are a little chaotic, so to speak, on that front. What will the leadership do? How will they deal with the crisis? How will Syria regard overtures if done by the Saudi government? These are all hypothetical and I don�t really like to get into hypotheticals. The problem we�re facing is that Syria is obviously stuck in the middle between Iran and Saudi Arabia. There is no clear way to see which way they will go and we will have to wait and see.

SUSRIS: The �Abdullah Peace Plan,� which laid out a concept for comprehensive resolution of the Arab-Israeli conflict, has been mentioned lately as still being a potentially useful tool. 

Obaid: It is ultimately the final approach that the Arab world and Israel will have to agree on in order for there to be full peace. The only issue is that with everything that has happened, with the American unwillingness to stop the Israelis, with the ridiculous Israeli onslaught on Lebanon, the document is dead for the time being. No Arab country will force or influence the Palestinians or the Lebanese or the Syrians to make a deal with Israel. However, this document is and will continue to serve as a final peace proposal to be negotiated between the two sides. At this point, for the time being, everything is frozen.

SUSRIS: What other issues do you see as being important in discussions of the Saudi-US relationship?

Obaid: The visa issue. I�m working on a project to help the US Embassy in Riyadh get a sense of the scope of the visa problem. This consular issue is becoming a big impediment for the people to people relationship. A lot of Saudis are changing their plans, going to study somewhere else, in Europe or in the Far East or Australia -- places like that. This is going to impact the people to people relationship in the next couple of years.

SUSRIS: What is the sticking point to getting this issue resolved?

SUSRIS: The visa issue and security advisories have been raised as impediments to business relationships as well. Do you have a sense of the state of business ties?

Obaid: On the business side the American firms are just not present. There is going to be more business going to the Europeans, to the Chinese. The Americans are just not there on the ground. It is beginning to have a serious impact on the bilateral relationship.

SUSRIS: What is it Americans don�t understand about Saudi Arabia that you wish that they did?

Obaid: These days they don�t seem to understand anything about Saudi Arabia. They seem to believe more what Fox News has to say or what people who have never been to Saudi Arabia have to say about Saudi Arabia rather than what is actually going on here. 

I think the major issue is to try to get people out here more and see what is going on, to see firsthand what is going on. Don�t rely on Fox News or on some analysts who have never actually been to the country. 

SUSRIS: Thank you for taking time to share your insights with us today.

Nawaf Obaid is current the Managing Director of the Saudi National Security Assessment Project, a government consultancy based in Riyadh.

He is author of The Oil Kingdom at 100: Petroleum Policymaking in Saudi Arabia (Washington Institute for Near East Policy, 2000). he is also an Adjunct Fellow in the Office of the Arleigh Burke Chair in Strategy at the Center for Strategic and International Studies (CSIS) in Washington, DC where he co-authored, with Anthony Cordesman, National Security in Saudi Arabia: Threats, Responses, and Challenges.

He has a BSFS from Georgetown University's School of Foreign Service, an MA in Public Policy from Harvard University's Kennedy School of Government, and completed doctoral courses at the Massachusetts Institute of Technology's Security Studies Program.

• Region in Crisis: Saudi Arabia�s critical role in Lebanon - Nawaf Obaid - SUSRIS IOI - Aug. 8, 2006

• �Fractured Iraq: Implications for Saudi National Security,� Saudi National Security Assessment Project � June 23, 2006

• National Security in Saudi Arabia: Threats, Responses and Challenges - by Anthony Cordesman and Nawaf Obaid - SUSRIS Book Note - Oct. 25, 2005

Middle East Crisis:

• Region in Crisis: Fine Lines and Consequences - A Conversation with Thomas W. Lippman - SUSRIS Interview - August 2, 2006

• Region in Crisis: A Senator Calls for US Leadership - SUSRIS IOI - August 1, 2006

• Region in Crisis - Qana: Into Uncharted Diplomatic Terrain - Rami G. Khouri - SUSRIS IOI - July 31, 2006

• Editorial: U.S. Diplomacy - Arab News - SUSRIS IOI - July 29, 2006

• Region in Crisis: US-Saudi Relations - A Conversation with F. Gregory Gause, III - SUSRIS Interview - July 28, 2006

• Riyadh Has Run Out of Patience - Daoud Shirian - SUSRIS IOI - July 27, 2006

• Saudi Arabia's View on the Crisis in Lebanon - Statement of the Royal Court - SUSRIS IOI - July 26, 2006

• Region in Crisis: Consultation - President Bush and Saudi Officials in White House Meeting - SUSRIS Special Report - July 27, 2006

• Region in Crisis: Responses - SUSRIS Special Report - Jul 19, 2006

• Region in Crisis: Who Is Responsible? - SUSRIS IOI - Jul 18, 2006

Also By Mr. Obaid:

• Al Qaeda in Saudi Arabia

• Meeting the Challenge of a Fragmented Iraq: A Saudi Perspective

• Saudi Arabia's 'Sustainable' Capacity and Global Energy Supply and Demand

• Saudi Arabia's Upstream and Downstream Expansion Plans for the Next Decade: A Saudi Perspective

• Saudi Arabia�s Sustainable Capacity and Security Issues

• Saudi Counter Terrorism Efforts: The Changing Paramilitary and Domestic Security Apparatus

• Saudi Internal Security: A Risk Assessment

• Saudi Militants in Iraq: Assessment and Kingdom's Response

• Saudi Military Forces and Development: Challenges & Reforms

• Saudi National Security: Military and Security Services Challenges & Developments