US embassy cable - 95RIYADH712

S E C R E T SECTION 01 OF 02 RIYADH 000712 
 
 
LONDON FOR TUELLER, PARIS FOR ALLEGRONE 
 
E.O.12356: DECL: OADR 
TAGS:  PREL, IR, SA, BA, RU 
SUBJECT:  IRAN:  MEETING WITH SAUDI FOREIGN MINISTER 
SAUD AL-FAISAL 
 
1.  (SECRET - ENTIRE TEXT) 
 
2.  SUMMARY.  IN A JANUARY 26 MEETING, SAUDI FOREIGN 
MINISTER SAUD AL-FAISAL TOLD NEA ASSISTANT SECRETARY 
PELLETREAU THAT IRAN HAD BEEN PRESSURING THE SAG FOR AN 
IMPROVEMENT IN RELATIONS, BUT THE SAG HAD SEEN NO 
INDICATION THAT IMPROVING RELATIONS WOULD PRODUCE A 
STABILIZING SITUATION.  HE SAID THE SAG WAS CONCERNED 
ABOUT IRANIAN MEDDLING IN BAHRAIN.  PELLETREAU SAID THE 
U.S. WAS CONCERNED ABOUT IRAN'S SUPPORT OF SUBVERSIVE 
ACTIVITIES AND ITS RECENT PURCHASE OF A RUSSIAN NUCLEAR 
REACTOR.  HE SAID U.S. EFFORTS TO DENY IRAN NEW CREDIT 
WERE HAVING SOME EFFECT.  SAUD SAID THAT HE HAD RECENTLY 
HEARD THAT THERE WERE DIVISIONS WITHIN HIZBALLAH, AND 
SUGGESTED THAT OUR INTELLIGENCE SERVICES HAVE AN 
INFORMATION EXCHANGE ON THIS SUBJECT.  PELLETREAU 
AGREED.  (OTHER SUBJECTS SEPTELS.)  END SUMMARY. 
 
3.  IN THE LATE AFTERNOON OF JANUARY 26, ASSISTANT 
SECRETARY PELLETREAU AND FOREIGN MINISTER SAUD MET AT 
SAUD'S HOME TO CONTINUE THEIR JANUARY 25 MEETING. 
DEPUTY FOREIGN MINISTER AL-KURDI SAT IN ON THE SAUDI 
SIDE AS NOTETAKER.  AMBASSADOR AND ACTING POLCOUNS 
(NOTETAKER) ACCOMPANIED PELLETREAU. 
 
4.  SAUD RAISED THE ISSUE OF IRAN BY SAYING THAT THE 
IRANIANS WERE CONSTANTLY CONTACTING THE SAG OUTSIDE 
DIPLOMATIC CHANNELS AND THROUGH THIRD PARTIES RELAYING 
THE MESSAGE THAT THE IRANIAN GOVERNMENT DOES NOT 
UNDERSTAND WHY THERE HAS BEN NO IMPROVEMENT IN 
SAUDI-IRANIAN RELATIONS, ESECIALLY SINCE THE IRANIAN 
FOREIGN MINISTER HAS VSITED SAUDI ARABIA TWICE.  SAUD 
SAID THAT THE SAG HAS SEEN NO CHANGE IN IRANIAN POLICY 
THAT WOULD INDICATE THAT AN IMPROVEMENT OF RELATIONS 
WOULD PRODUCE A STABILIZING SITUATION.  ALSO, THERE WERE 
UNRESOLVED REGIONAL ISSUES SUCH AS THE "THREE ISLANDS" 
DISPUTE WITH THE UAE AND IRANIAN MEDDLING IN BAHRAIN. 
 
IRANIAN INVOLVEMENT IN BAHRAIN 
------------------------------ 
 
5.  PELLETREAU ASKED SAUD HOW SERIOUS HE THOUGHT THE 
SITUATION IN BAHRAIN WAS.  SAUD SAID, "VERY SERIOUS." 
THE SHIA IN BAHRAIN LOOK TO QOM FOR RELIGIOUS 
LEADERSHIP, AND SINCE THE TIME OF THE SHAH, IRAN HAS 
MADE TROUBLE FOR BAHRAIN.  HE SAID THAT IRAN DENIES IT 
IS INVOLVED IN BAHRAIN.  IT HAS SENT MESSAGES TO THE 
SAUDIS AND BAHRAINIS THROUGH THIRD PARTIES THAT IT WOULD 
"DO ANYTHING" TO PROVE THAT IT WAS NOT INVOLVED IN 
BAHRAIN.  SAUD SAID BAHRAIN WAS IN CONTACT WITH IRAN. 
 
6.  SAUD SAID THE BAHRAINI DISSIDENTS WERE MAKING 
EXTENSIVE USE OF THE MEDIA.  INTERNATIONAL MEDIA 
BROADCASTS INTO BAHRAIN TREAT THE DISTURBANCES AS IF 
THEY WERE THE ONLY EVENTS GOING ON IN THE WORLD.  SUCH 
MEDIA SCRUTINY WAS BAD FOR BAHRAIN'S ECONOMY, WHICH 
DEPENDS ON TOURISM AND BUSINESS.  THE ANSWER DID NOT LIE 
IN DESTROYING THE COUNTRY.  HE HOPED WE WOULD BE 
UNDERSTANDING OF BAHRAIN'S SITUATION. 
 
7.  PELLETREAU SAID THAT WE HAD TOLD THE BAHRAINIS THAT 
WE THOUGHT THEY WERE HANDLING THE SITUATION WITH 
RESTRAINT.  THEY WERE A COUNTRY FRIENDLY TO THE U.S. AND 
THE KINGDOM AND REQUIRED SUPPORT.  SAUD SAID, "BAHRAIN 
NEEDS HELP NOW."  HE SAID IRAN NEEDS TO BE SENT A 
MESSAGE THAT IT SHOULD NOT MEDDLE IN BAHRAIN'S INTERNAL 
AFFAIRS. 
 
OTHER IRANIAN SUBVERSIVE ACTIVITIES 
----------------------------------- 
 
8.  PELLETREAU SAID THAT IRAN WAS DOING A NUMBER OF 
THINGS IT SHOULD NOT BE DOING.  IT WAS TRYING TO ACQUIRE 
WEAPONS OF MASS DESTRUCTION.  IT HAD CLOSE RELATIONS 
WITH SUDAN.  IT WAS CARRYING OUT WIDER SUBVERSIVE 
ACTIVITIES, SUCH AS CONDUCTING ACTIONS AGAINST EGYPT AND 
SUPPORTING HIZBALLAH AND ITS TERRORIST ACTIVITIES. 
 
9.  SAUD SAID THAT HE HAD HEARD THAT THERE MAY BE 
DIVISIONS WITHIN HIZBALLAH.  THERE ARE THOSE WHO WANT A 
CLOSER RELATIONSHIP WITH IRAN, AND OTHERS WHO WANT 
HIZBALLAH TO BE MORE INDEPENDENT.  HE SAID THAT AN 
INFORMATION EXCHANGE ON THIS SUBJECT WOULD BE USEFUL, 
AND THAT OUR INTELLIGENCE SERVICES SHOULD GET IN TOUCH 
WITH EACH OTHER.  PELLETREAU AGREED. 
 
IRANIAN/RUSSIAN RELATIONS 
------------------------- 
 
10.  PELLETREAU SAID THAT THE U.S. HAS BEEN IN CONTACT 
WITH RUSSIA ABOUT ITS RELATIONS WITH IRAN, AND HAD 
OBTAINED A RUSSIAN COMMITMENT NOT TO ENTER INTO ANY NEW 
MILITARY CONTRACTS WITH IRAN.  HOWEVER, WE DO NOT KNOW 
ALL THE DETAILS OF RUSSIA'S CURRENT CONTRACTS.  SAUD 
SAID THAT HE HAD HEARD THAT THE CONTRACTS WERE WORTH USD 
4 BILLION.  HE LAUGHED AND SAID THAT RUSSIAN EQUIPMENT 
WAS CHEAPER THAN U.S. EQUIPMENT.  THUS, USD 4 BILLION 
OUGHT TO BUY QUITE A BIT.  PELLETREAU SAID THAT EVEN 
THAT LARGE AMOUNT OF EQUIPMENT WON'T COME CLOSE TO WHAT 
IRAN THINKS IT NEEDS. 
 
11.  PELLETREAU SAID THAT WE HAD ALSO TALKED TO RUSSIA 
ABOUT ITS CONTRACT TO BUILD A NUCLEAR REACTOR AS 
BUSHEIR.  EVEN THOUGH IT WOULD COME UNDER IAEA 
SAFEGUARDS, IT WOULD GIVE IRAN TECHNOLOGY IT COULD USE 
FOR NON-PEACEFUL PURPOSES.  SAUD SAID THAT HE HAD 
UNDERSTOOD THAT IRAN'S OTHER REACTORS WERE UNDER IAEA 
SAFEGUARDS.  PELLETREAU SAID THAT WAS TRUE, BUT WE KNEW 
THAT THERE WAS MORE TO IRAN'S NUCLEAR PROGRAM THAN WHAT 
THE IAEA INSPECTORS SAW. 
 
12.  SAUD SAID THAT THE RUSSIANS DID NOT GIVE THE SAG 
UNCONDITIONAL ASSURANCES WHEN IT RAISED RUSSIA'S SALES 
TO IRAN.  THE RUSSIANS SAID THAT FOR ECONOMIC PURPOSES 
THEY HAD TO MAKE SALES.  HOWEVER, SAUDI ARABIA IS NOT 
GOING TO BUY RUSSIAN GOODS. 
 
RESTRICTING NEW CREDIT 
---------------------- 
 
13.  PELLETREAU SAID THAT WE HAVE HAD LIMITED SUCCESS IN 
OUR CONVERSATIONS WITH THE G-7 COUNTRIES ABOUT NOT 
PROVIDING NEW CREDITS TO IRAN.  GERMANY HAD NOT PROVIDED 
NEW CREDITS, BUT HAD PAID THE GERMAN COMPANIES TO WHOM 
IRAN OWED MONEY, AND THEN RENEGOTIATED IRAN'S PAYMENT 
TERMS.  IRAN HAD BET THAT OIL PRICES WOULD REMAIN HIGH. 
NOW, IT WAS HAVING PROBLEMS.  AS A RESULT, OUR POLICY OF 
RESTRICTING CREDIT TO IRAN WAS CAUSING IT TO CUT BACK ON 
ITS MILITARY PROCUREMENT. 
 
EU'S "CRITICAL DIALOGUE" 
------------------------ 
 
14.  PELLETREAU SAID THAT WE HAVE ASKED THE EU WHAT 
RESULTS IT HAS TO SHOW FOR ITS "CRITICAL DIALOGUE" WITH 
IRAN.  THE EUROPEANS TELL US THEY ARE STRENGTHENING THE 
MODERATES.  HOWEVER, THERE DO NOT APPEAR TO BE ANY 
MODERATES WHEN IT COMES TO IRAN'S EXTERNAL POLICY.  SAUD 
AGREED AND SAID THAT EVEN IRAN'S INTERNAL POLICIES ARE 
RESTRICTIVE, INCLUDING AREAS SUCH AS ITS BANKING SYSTEM. 
 
MABUS