Israeli dreams in Gulf premature, unrealistic

By Youssef Azmeh

DUBAI (Reuter): Israeli dreams of conquering the lucrative markets of the Gulf Arab states are premature and largely unrealistic, Gulf-based businessmen and diplomats say.

They were commenting on the apparent euphoria of Israeli officials who visited a Gulf Arab state for the first time when Oman hosted multilateral talks spawned by the 1991 Middle East peace conference in Madrid.

"It is totally out of proportion," one senior Omani official said. "I do not understand all this talk about breakthroughs," he added.

The visit allowed the Israelis their first official contact with a wide range of political and economic figures and gave the Israelis, who came in force to Muscat, an opportunity to mix relatively freely with Gulf Arabs.

"They were understandably delighted," said a Western diplomat. "It broke the ice and was an important first step towards recognition. But they seem to have mistaken the Omanis' natural courtesy for genuine friendliness," he added.

Another Western diplomats said Israeli political leaders trying to win support for the peace process may be playing up the prospects of a mouth-watering market in the Gulf Arab states that import goods worth some US$45 billion a year.

The senior Omani official said the Israelis, headed by Deputy Foreign Minister Yossi Beilin, were told normal relations, economic or political, were out of the question ahead of peace between Israel and its immediate neighbors.

"We told them (the Israelis) - We will follow your neighbors. We will never be ahead of them in establishing political or economic relations," he said.

"This is not just the position of Oman but of all states of the GCC," he said, referring to the Gulf Cooperation Council that joins Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the United Arab Emirates.

Gulf officials said that Qatar and Bahrain, due to host further rounds of multilateral talks this year, had made clear they were doing so primarily to underline the commitment of the Gulf Arab states to the U.S.-sponsored Madrid peace process.

"We told the Israelis they were misguided if they thought any of us (in the Gulf) would be willing to move ahead of the neighboring states," the Omani official said.

"There is no prospect of meaningful relations before they have their treaties signed and sealed with Syria, Jordan, Lebanon and the Palestinians," he added.

"You will not see an Israeli ambassador in Muscat before you see one in Damascus," said another Omani official.

This position was underlined by Omani Minister of State for Foreign Affairs Youssef bin Alawi bin Abdullah in an interview with reporters who accompanied Beilin to Oman recently.

"If peace is achieved between Israel and Syria, we can start looking to the future...but one cannot foresee peace between you in Israel and a distant country (like Oman) at a time when there is no agreement on peaceful steps with the neighboring (Arab) states," he said.

The minister also told the Israeli reporters the Arab economic boycott of Israel would remain.

Speaking of Israel's continued occupation of Arab lands, he said: "We want first to be rid of this finally, then the end of the boycott would be a foregone conclusion," he said.

Gulf businessmen said that although the prospect of eventual deals with Israel was attractive to some, most Gulf Arabs remained apprehensive about dealing with the Jewish state.

"It will be a long and difficult process when it comes," one said.

"You may see one or two headline-grabbing deals, but Israelis will find it very difficult to do business. It will take years to break the psychological barrier created by more than 40 years of hostility," said another.