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Baroness Ramsay of Cartvale: My Lords, I apologise, but I really must draw attention to the fact that there is a five-minute limit for speakers.

Lord Weidenfeld: My Lords, perhaps I may say in conclusion that I hope that we shall not repeat the lesson of Yugoslavia so far as concerns the wider Middle East. We must not only address ourselves to the crisis in hand but also deal with the wider problems.

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3.55 p.m.

Lord Clinton-Davis: My Lords, 13 months ago I had the honour of visiting Israel and Gaza. During that visit I had the great privilege of meeting business communities of both areas. Notwithstanding some mutuality of suspicion, there was an overwhelming desire on the part of both to be able to get on with the job of promoting business opportunities, often in partnership. That has been taking place, notwithstanding the discomfiture they felt at the hands of the outgoing Israeli government. That is important; but it needs to be built on. In the light of recent developments there are certainly grounds for optimism.

There can be no doubt that in order to build up the Gaza Strip and other areas it is necessary to attract a good deal of foreign investment, notably from the European Union. That requires a much more pacific situation in order that the necessary confidence is derived for the building that must go on. An enormous amount is at stake. There are now great opportunities, with the new Prime Minister of Israel, Mr. Ehud Barak, taking office. Notwithstanding all the problems that he faces internally, he is a courageous man. He has served with great distinction in the Israeli army, and he is now promoting in his speeches a clear movement towards a comprehensive peace settlement.

I view the outcome of the election with great satisfaction. However, I do not underestimate the problems that will confront the new government. First, who will be in it? There are some who are so strongly at variance that they rule themselves out--most, if not all, of Likud, and indeed the Shas party which has to show a good deal more goodwill towards the promotion of peace and building Israel in a comprehensive way.

The new Prime Minister is buttressed by great personal success and courage. Of that there can be no doubt. He is widely read. He has been educated at university in the United States. But he faces huge internal problems in Israel. We ought not to underrate that fact. There are problems of how to reconcile the secular and ultra-orthodox communities. That may be beyond him. I do not know. I wish him well. Certainly, he enjoys huge personal renown as a result of the election campaign that he undertook. I suppose that Mr. Netanyahu, whose leaving has not caused much regret in Israel and elsewhere, did at least leave with a certain amount of personal dignity given the statement that he made. That is about all he left behind.

Israel today is undoubtedly in a stronger position to pursue peace initiatives. I am convinced that it will try. There is no question that in relation to Syria the new Prime Minister has held out the opportunities for a comprehensive peace settlement. Egypt and Syria have expressed some measured optimism about that prospect. In calling for an exchange of ambassadors with Syria, for full trade relations, for free movement of tourists, to be monitored, it is true, by Israeli and Syrian military forces holding key points on the Golan Heights, he has provided a first-class initiative at the very beginning of his government.

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Of course, Syria would be expected to join the fight against terrorism and in consideration of certain Israeli withdrawals the military wing of Hezbollah would have to be dismantled and Lebanon and Syria would have to play their part in suppressing terrorist activity.

But who could have said, just a few weeks ago, maybe even a few days ago, that the prospects for peace are now moving, I believe inexorably, in favour of a permanent settlement? There will be huge problems internally and externally facing the new government. But in Mr. Barak, born and bred in a kibbutz, Israel has an outstanding political leader, a general of great distinction, perhaps the most outstanding of his generation. He was not only a brilliant soldier; he was a student of great competence. He has faced internal problems, unjustified allegations of perfidy, to which he has stood up bravely, as one might expect of this man. Yes, I view the prospects with some degree of optimism which I did not think possible just a month ago.

4.1 p.m.

Lord Janner of Braunstone: My Lords, perhaps I may follow my noble friend Lord Clinton-Davis in his thoughtful review of the Middle East by adding one tribute. Surely this House would wish to salute the efforts of the late King Hussein in the peace which we all hope is coming in the Middle East. We wish his son, King Abdullah, the best of good fortune in continuing that effort. I once heard King Hussein use an Arab term. If any of my noble friends wish to have a problem, I suggest they try to learn the Arabic language--even in the cause of peace it is difficult. There is a marvellous proverb: one hand alone cannot clap. Both sides must want peace, both must clap.

On the one hand I have believed for some time that there has to be a Palestinian state. On the other hand, it can only survive and be accepted if it accepts the fears of its Israeli neighbours and their wish to live in security and without danger. On the one hand, Barak is of course quite right in expressing the view of the vast majority of his people in wanting to get Israeli troops out of Lebanon. On the other hand, whatever his wishes, they can only do it if the other side is prepared to leave the border in peace and not create war because troops are moved out.

On the one hand, Jerusalem is the great centre of all the mighty religions of this world and all wish it to be a peaceful and good place. On the other hand, I had the honour of seeing President Sadat shortly before he was murdered. He told me that it should be left till last. That is the most difficult of all issues: settle the rest and then turn to Jerusalem and you may succeed; otherwise you will not. If you want to succeed, if both sides wish to, if both hands are prepared to clap, there are ways of organising it so that the right flags fly over the right buildings. In his view it is possible to come to some arrangement if, and only if, both sides want it and both sides are clapping.

When considering this clapping process I was reminded of one of the classic jokes of my late father, who came from Wales and whom many noble Lords knew. It was about the fellow who went to a firm of

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solicitors in Cardiff and asked for a one-armed lawyer. When asked why, he said, "I'm sick of lawyers saying 'On the one hand this, and on the other hand that'".

If you are going to make peace, you must have two hands and they both have to clap. If you do not, you will not get it. I believe, as every noble Lord has said, that hope comes with the election of Barak. It would be wrong for the House not to recognise the vibrant, difficult, vociferous democracy which is the state of Israel. Yes, there are internal problems; yes, they are the problems of a new state. They are in many ways more difficult than our own but some of us learnt to live for 18 years with a government whom we did not care for but with whom we had to combine. The Israelis now have a new government, which we must all hope will produce a coalition which will work for peace together. The best contribution we in this country can make is by helping both sides to clap, by working with both sides to help them come to terms.

I have had the pleasure of visiting most of the Arab countries, which are prepared to accept me as a Zionist Jew, and I have been received with great kindness and courtesy everywhere from the Yemen, Tunisia and Morocco to Jordan, Syria and Saudi. I know that the vast majority of the peoples of those countries wish to live in peace. They do not want war, they do not want their troops to go to the borders, they do not want their sons, and often daughters, to be armed and suffering. Therefore, if the governments can bring them together, there will be peace. I never forget that I learnt that when serving in the British Army in Germany as a war crimes investigator. I learnt from my visits each weekend to the displaced persons camp at Bergen-Belsen of the horrors that people were suffering because they had nowhere to go and because Ernest Bevin and the Attlee Government were refusing them the right to go to a Jewish state, because no country wished to accept them and because they were left to rot. Well, that will not happen again.

The gathering in of the exiles is at the heart of Israel's approach to every problem. Its Jewish Agency and other organisations work to bring in people who are suffering, even today, from anti-Semitism. It is a great democracy; it wishes to live in peace; it has a new leader. I am sure that in this House we would all wish to do what we can to make both hands clap.

4.6 p.m.

Viscount Torrington: My Lords, last Tuesday I missed the rebuke which the noble and learned Lord the Lord Chancellor administered to these Benches because, far from being bussed to Westminster, I was in a bus between Amman and Baghdad. I spent the latter half of last week in Iraq and saw at first hand some of the effects of sanctions on that country.

At the outset I must declare an interest. I work in the oil industry and most of that industry would today like to see UK sanctions withdrawn. That was not always the case as it has actually suited the world's oil industry to see Iraq's oil bottled up in that country for some time.

But the message which any visitor to Baghdad quickly learns is that sanctioned countries always learn to live with sanctions. As a relatively regular visitor--

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once a year--I have noticed that this year the shops in Baghdad are better supplied and that virtually anything is obtainable at a price. Unfortunately, it is only those with access to foreign exchange who can afford the prices. The official classes, which are presumably the intended target of sanctions suffer least; the middle classes struggle; and the poor suffer real deprivation. In effect, sanctions bite hardest on those we least want to hurt.

If the argument runs that sanctions will persuade the masses to rise up against the government, then at least in Iraq that is a very flawed argument. Iraq has totally controlled media and an efficient security apparatus. Government propaganda blames the UN and the Western alliance for all the country's ills and the masses have no opinion of their own and hear no other opinion. They are not organised and cannot organise. Revolutions in any case are usually started by the middle classes--and in Iraq the middle classes are too busy trying to survive.

There is another old Arab proverb which says, "I against my brother; I and my brother against my cousin; I, my brother and my cousin against the world". In a society where it is unsafe to trust your cousin and certainly not your father-in-law, resistance is a seed difficult to germinate. It is my belief that there is more to be achieved by trying to integrate Iraq into the 21st century, to bring it back into the world, than by continuing sanctions. I have said time and time again to any Iraqi and anyone else who will listen to me that Iraq's problem has been its own policy of isolationism. If all the usual suspects, the big multinational companies, had had investments in plant, machinery, distribution, retailing and agriculture--not just in the oil industry but in other fields--it would have been almost impossible for the world, as it has done, simply to close the door on Iraq and lock it for eight years. As it is, no one has significant frozen and non-performing assets in that country, and no one really cares.

The message of the future must be for Iraq to embrace interdependence, to privatise business and commerce and to sell, say, 30 per cent of its industry to foreigners. Such a policy would revolutionise outside perception of the country and greatly increase its economic activity and security. The saddest aspect of sanctions is that a very large proportion of educated Iraqis--those over 30--have received at least a portion of their education in this country and look to Britain almost as a second home. That still represents an enormous store of good will, but if sanctions remain in place much longer a younger, more hardline generation who see Britain only as an enemy will take over. British companies lost out to US business in the rebuilding of Kuwait, the very country that Iraq destroyed. Perversely, we British could still get the lion's share of rebuilding the now weakened Iraq if we pursued the right policies.

Britain must carefully consider whether unstinting support for the Albright line on Iraq is in its best interests. After eight years with no concrete results, surely sanctions are a failed policy. Baghdad is full of Russians, Chinese, French, Canadians and others whose

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governments take a more liberal, and ultimately more realistic, view. They are poised to act and grab the plums the day that sanctions end.

As the noble Lord, Lord Rea, noted, there is an Anglo-Dutch initiative to vary the sanctions regime to allow the limited development of new or refurbished oil fields so that Iraq can produce sufficient oil to meet its UN permitted export quota. I hope that when the noble Baroness replies she will tell the House about this and say what steps are to be taken to ensure that British companies get their fair share of any such work either if that initiative is successful or sanctions are withdrawn in the future.

4.12 p.m.

Lord Judd: My Lords, like others I wish to thank my noble friend Lord Kennet for having secured this debate. I must also declare an interest. I work with Safer World, an independent charitable think tank which has just published a paper by Valerie Yorke that advocates a stronger lead by the European Union in pursuing a lasting peace between Israel and the Palestinians. That lasting peace is central to a stable future for the greater Middle East.

We all wish Ehud Barak well as he assumes his immense responsibilities as Prime Minister. He will have no greater challenge than peace. His candid, no nonsense commitment, coupled with his integrity, auger well for the future negotiations, even if some of his opening language has been tough. The European Union was clearly right at the Berlin summit on 25th March to declare its readiness to consider the recognition of a Palestinian state. Such a state is essential if there is to be any hope of removing the festering sore which has for so long threatened the Israeli people.

Some have argued that the Oslo peace process has been discredited. I do not share that view. It is significant that independent agencies on the ground, for example World Vision, hold that important achievements have been secured. These include political dialogue; greater international recognition of the Palestinian cause; withdrawal of Israeli troops from some land at least; the establishment of the Palestinian National Authority and civil service, even if public administration not least on human rights leaves a great deal to be desired; control by the Palestinians of their own education, health, tourism, culture and direct taxation; and the attraction of aid and investment to the West Bank and Gaza, although, unforgivably, too much of this has not been well administered or effectively monitored.

Despite all this the past three years of Likud rule have seen a lamentable deterioration in relations between Israel and the Palestinians. My noble friend Lord Clinton-Davis has referred to the huge problems. It is undeniable that the deliberate flexibility of the Oslo agreement provided Benyamin Netanyahu with the opportunity cynically to frustrate the return of Palestinian land while creating facts on the ground by the acceleration of new settlement building and the construction of roads and infrastructure which amounted to de facto annexation of disputed territory.

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There are still the political prisoners--some suggest as many as 2,500--and the allegations of torture. World Vision, with its field experience, has produced a report which puts it well. While the Palestinian community as a body may have gained new political rights, rights for the individual have seen a serious decline as a result of continued divisions of land, encroachment by settlers--there have been 19 new settlements since last October alone--and draconian security provisions. The Palestinian community has been weakened economically, socially and politically by the restriction of communication between the Gaza Strip, the West Bank and East Jerusalem by Israeli non-compliance with trade agreements, which has denied Palestinian business direct access to its own domestic market, let alone external markets, house demolitions, land confiscation--too often without proper compensation--withdrawal of identity cards, under-employment, unemployment and the acute stress involved in necessary daily travel.

In addition, the new Government of Israel inherit explosive issues such as the lack of equity in access to water resources and the systematic removal of the Palestinian population of East Jerusalem. There are, no less importantly, the grave weaknesses in the Palestinian National Authority itself: corruption, human rights abuses and inefficiency. All of these will have to be addressed if the peace process is to be regenerated. Peace cannot be imposed from outside. As my noble and learned friend Lord Archer reminded us, peace must be built and owned by the Israelis and Palestinians themselves.

But the outside world, not least our own Government and the European Union, can encourage both the new Israeli Government and the Palestinians in their peace endeavours by ensuring that all trade, aid and other relationships are geared towards furthering social justice and the action which is needed. The new Government in Israel and the public good will that they enjoy provide an exciting opportunity.

Palestinian statehood is vital for a lasting solution, but such statehood must not be merely symbolic. That would prove dangerously counter-productive. It will require defined borders and also freedom of movement and action both for those who govern Palestine and those they govern.

4.17 p.m.

Lord Stone of Blackheath: My Lords, I too am grateful to my noble friend Lord Kennet for introducing this debate with his global view of the history of the causes of conflict there. Noble Lords will be aware that I also have interests in the Middle East. I first visited that region 40 years ago and since then have spent time there every year. I lived there for a period and have done business continually across the region in Morocco, Tunisia, Egypt, Israel, the Palestinian entity, Jordan, Turkey and the Gulf. In the Middle East I have watched ethnic conflicts, religious intolerance and nationalism leading to war.

I am pleased that I have only five minutes because I shall suggest something briefly that I would not presume to propose in a longer speech. For decades

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some of us have attempted in the Middle East through dialogue across borders and the use of trade and commerce as a common language to deepen understanding and to find practical win-win solutions. Our aim is to appeal to the moderate peoples on all sides to gather sufficient consensus with determination to oppose destructive extremists.

Through that interest in the Middle East and North Africa I have been alerted to conflicts around the world: in Kosovo, Northern Ireland, Kashmir and Central America. It appears to me that a new pattern and pace of events that erupt into violence, murder and war are occurring. There is a view that ethnicity will supersede ideology as the single most important source of conflict in the next century. This has to do with a new internationalism, the formation of huge trading blocs, and the scale, speed and growth of electronic communication. As a reaction, while smaller nations and republics demand the right to self-determination, people's passionate sense of their own ethnicity resurges and ferments to the point of conflict. Ethnic groups develop hatred for one another.

We can all see this happening at present. The only international action we take to resolve these disputes is to wait until the killing is at a level which justifies sending in the riot squad: radical violent surgery to effect a remission; killing to stop the killing. That is akin to invasive medical surgery and amputation as a cure of last resort. In the same way as in medicine we have developed more holistic and preventive approaches, I am convinced that earlier detection and more palliative intervention could be utilised if the world community could agree on international conventions to address racial hatred.

My right honourable friend the Chancellor of the Exchequer has embarked upon an ambitious global project to deal with financial turbulence before a crisis develops. Can we develop something similar for dealing with this global ethnic turbulence?

I return to the Middle East as an example. The peace process, however difficult, slow, imperfect and infuriating, seems to be making an important contribution to the subject of resolving ethnic conflict. If Barak and Arafat can be encouraged and helped to set a paradigm for settling these deep rifts (which for generations were considered too complex and too entrenched for resolution) we must look to them to learn lessons. I believe that there could be devised intervention, with legislation, designed to deal more with the governance issues of the conflict at an economic and human level before the police force and the military are used. Perhaps we could encourage the United Nations, or the new European Commission to consider a bold initiative.

I realise that the scale and complexity of the suggestion is huge, but where else can I make it but in this place? First, international models for resolving ethnic conflict should be adopted. Secondly, to inform this, extensive pragmatic research into the causes and consequences of ethnic conflict is needed. Thirdly, internationally accepted protocols for dealing with ethnic conflicts should be devised, with a policy of

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earlier intervention. I shall be pleased to hear what the Minister believes. Does she feel that stronger international structures to deal earlier in the gestation of these conflicts could be put in place? Is it timely for a debate on these issues? Would it be worthwhile?

Finally, I should like to note that it is pleasing that after only three years of understandable traumatic reaction to Yitzhak Rabin's murder, the Israeli electorate has returned a Prime Minister in Ehud Barak who, like Rabin, links three policy issues in sequence: economic health; internal equal opportunity and religious tolerance; and, externally, peace with her neighbours. I know that he has the support already of the business community for this task; and I hope that the Israeli community leaders and the international bodies will play a positive role.

4.22 p.m.

The Earl of Sandwich: My Lords, we are all rightly starting on an optimistic note because of the election victory of Ehud Barak. We all hope for an end to the diplomatic impasse and renewed commitment to the peace process. But the Palestinians displayed incredible endurance during Likud and right up to the elections. Their leadership wisely postponed declaration of a Palestinian state on 4th May, which had been a highly symbolic date under the Oslo agreement. Now they know they will have to wait again. We could easily spend time berating the former Prime Minister for hideous pre-election gambits such as last minute illegal settlements or the macho attack on the Palestinian headquarters. But that chapter is closed. It is now for Barak to fulfil his promises. He owes it--Israel owes it--to the memory of Yitzhak Rabin.

But it is also for European governments to show their cards. Are we giving adequate support to President Clinton, King Abdullah and President Mubarak, who have been quick to coax Mr. Barak back into the peace process while recognising the difficulties he still has in establishing his political position. Any delay now will fuel the resentment of both Palestinians and the growing numbers within Israel who favour the peace process. Barak needs to take immediate steps to make good what Netanyahu has undone. As the noble Lord, Lord Gilmour of Craigmillar, reminded us last year, it does not matter who is in power: it is Israel which needs to fulfil its obligations.

As a board member of Christian Aid, I have seen numerous reports from church and voluntary sources which testify to the continuing illegal and discriminatory policies of the Israeli Government on basic human rights such as land, water and agriculture. As I said in our last debate in January 1998, if we could not tolerate this inequality and oppression in South Africa, why should we tolerate it in Israel?

We hear that Har Homa will be stopped, but what will really change? The Palestinians in Jerusalem are being gradually squeezed out by Jewish expansion and new housing settlements. In 1993-97 there were twice as many demolitions of houses in the Palestinian sector even though Palestinians comprise only 30 per cent of the population and suffer twice the housing density.

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The confiscation or expropriation of land for bypass roads linking Jewish settlements in the West Bank has been stepped up since the signing of the Wye accord. I have seen the details of structural plans of new roads and tunnels around Jerusalem, Bethlehem, Hebron and Nablus. I have horrifying accounts of land grabbing, the uprooting of trees and the arbitrary building of new hilltop settlements, sometimes with the full support of the Israeli army.

For individual families in the path of bulldozers, it is a nightmare on the scale of an apocalypse and yet because of Kosovo, or because it is Israel, the world manages to let it happen. It contravenes UN Security Council Resolutions 242 and 338 and is in clear breach of the Wye accord which states that,

    "neither side shall initiate or take any step that will change the status of the West Bank". Indeed, Ministers such as Ariel Sharon have even incited settlers to flout international law and agreements signed by his government. The issue of residency in Jerusalem is and remains critical. Over 2,000 Palestinians were evicted in 1996-98 after their IDs had been confiscated. Children brought up in Jerusalem on their parents' IDs have lost their right to residency overnight. Last month the Israeli High Court postponed a decision on residency until September, so the case is still pending.

There is the case of closures--restrictions so inhuman that even ambulances with patients from Gaza have to wait four hours at the border on their way to hospital. Human rights and legal aid organisations are pointing out that for all these reasons Israel is ignoring the 1949 Fourth Geneva Convention. They are calling on the high contracting parties to this convention to adopt concrete and specific measures to implement it.

Our Foreign Office has reasserted under the Dublin declaration that an interstate duty to enforce the convention exists. But the Minister may like to confirm that Article 1 establishes a "right to take specific action" and leaves open a way for the parties to act in common.

It is not enough for Her Majesty's Government to join the call for a special conference. There is an imperative to respond to the escalation of violations against the rights of Palestinians and to protect them from any further illegal settlements and attacks on personal property. Now that they have shown such political restraint, they surely deserve a new international initiative to require Israel to end its discrimination and re-enter the peace process as soon as possible.

4.27 p.m.

Lord Cocks of Hartcliffe: My Lords, I thank the noble Lord, Lord Kennet, for this opportunity to speak about the greater Middle East. If there had been more time I should have liked to deal with the problem of religious persecution, in particular that of Christian minorities which was recently highlighted by the US State Department report on religious freedom. The Assistant Secretary for Democracy and Human Rights, John Shattuck, stated:

    "The issue of persecution is a serious one, affecting many religions. The issue has not previously received much attention with respect to Christians".

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    The noble Baroness, Lady Cox, recently raised yet again in the House the problems of slavery, and there are instances of that in this area. But I wish to concentrate on one aspect in view of the shortage of time.

The noble Lord, Lord Weidenfeld, was a little hard on the noble Lord, Lord Kennet, because it was a full six minutes before he got on to the subject of Israel. So we must acknowledge the noble Lord's tour d'horizon before that. If we debate Israel and security, we have to remind ourselves each time of the behaviour of the Germans before and during the war, and even now the behaviour of the French. The recent trial of Maurice Papon has exposed a very sordid and grubby story about the behaviour of a large number of French during the last war. Those are the very countries which now try and read us penny lectures on human rights.

We must always bear the background in mind. When Menachem Begin came here as Prime Minister, he said, "Never again". We have to respect that and the influence it has on Israeli thinking. Mention has been made of the possibility of nuclear weapons. If the Israelis had not attacked the Iraqi nuclear reactor installation, goodness knows what might have happened during the course of the Gulf War. That has not been properly recognised.

The hopes raised by the recent election of Mr. Barak have already been mentioned substantially, and it is to be hoped that the start of the political process will lead to solutions emerging. We ought to begin to think about the stage after that.

The early Fabians were known as the "gas and water" socialists. They did not declaim in Hyde Park, like people such as H. M. Hyndman, but they got their name because they realised that until people had heat and light in their homes, were able to cook their food and to have clean water which they could drink without going down with appalling diseases, nothing much mattered to them.

If we look at this region, we know that the Middle East has very substantial oil resources--some 40 per cent of the world's known reserves. It also has very substantial natural gas resources--some 30 to 40 per cent. However, there is a great problem with water and the problem is such that it really has to be solved by international co-operation between states.

Given this background, we know that the Israelis have a very great amount of technical knowledge, and I believe that if we can make progress on the political problems of the area there will be a real peace dividend and the whole area will benefit from inter-state co-operation on these very fundamental problems of everyday living. That was a concept which was very dear to the heart of Shimon Peres, and I think that his contribution to the process and those ideas should not be overlooked. I believe that this is the way forward for the Middle East now. We have to appreciate just what can be done. Perhaps I may recall the words of the Prime Minister on the 15th January 1998, when he said:

    "The Israeli people have proven their dedication, their abilities, their ingenuity. Those assets in the service of peace could transform the whole region...nothing would entrench peace more firmly."

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    The peace dividend will be international co-operation to solve the region's problem of resources. We all know the saying about giving a man a fish and you will feed him for a day but if you give him a fishing rod he can feed himself for life.

4.32 p.m.

Lord Haskel: My Lords, I too would like to speak about the recent Israeli election, and I am most grateful to my noble friend Lord Kennet for giving us the opportunity. Surprisingly, one thing Israelis may miss now the election is over is the fun of the party "commercials" on television. All the parties had their television commercials in a 30-minute slot each evening. According to many Israelis, it was the funniest 30 minutes on television for some years. One particularly good computer-generated cartoon showed a party's opponents dancing to the music of their disreputable supporters. The Green Leaf Party had a dreamy commercial, which I can only describe as reflecting the lifestyle of legalised cannabis. The Pernina Rosenbloom Party had all the right rhetoric, but the commercials tended to concentrate on her cosmetics and fashion business. One commercial of interest to my noble friend Lord Kennet was the image of a very pregnant Chairman Arafat lying on the floor ready to give birth at any moment to the Palestinian state. Surrounding him were politicians in medical gowns, urging him to hold on until after the election.

So on television the election was fun. But what was it about? The peace process? I am not sure that it really was about the peace process. Suddenly there were differences in rhetoric and tone about peace, but there is a consensus in Israel that Oslo and Wye are the only way to go.

The noble Lord, Lord Jacobs, spoke about the polls and said that 65 per cent of Israelis recognised that there would be a Palestinian state. At the same time another poll showed that 80 per cent of Israelis were ready to give up land for peace. Those figures indicate that most Israelis think there is no other game in town. The difference is speed and strategy.

So if the election was not about peace, what was it about? I think it was about identity. Israelis take their politics very seriously. Many were dismayed to find that they are living in a seriously divided country. They are particularly disturbed by the secular and religious divide. The excessive power of the ultra-Orthodox, mentioned by the noble Lord, Lord Quinton, and my noble friend Lord Clinton-Davis, causes both disgust and disquiet. But that is not the only division. There are divisions between the immigrant groups: the Russians and the north Africans, the Sephardi and Ashkanazi, the east Europeans and the west Europeans--and this in spite of the wonderful job that Israel does in absorbing immigrants. What Israelis have learnt is that absorbing immigrants is not enough: they have to be integrated.

This was pointed out a couple of years ago in an important study of Ethiopian immigrants into Israel. The study was carried out by Jewish Policy Research, which is a Jewish think-tank based here in London. I have to declare an interest as the deputy chairman of that body.

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The study showed that while a tremendous national effort was made to bring the Ethiopian immigrants into Israel and absorb them, there were problems about integrating them into Israeli society.

According to the study, the difficulty of integration was caused by classic race relations problems. There is something quite shocking about a people who have suffered from anti-Semitism for many, many generations showing racial bigotry in their own country. This disturbed many Israelis. So ending these divisions is not just a matter of reining back the power of the ultra-Orthodox religious groups. It is also a matter of integrating into Israeli society the different ethical and cultural groups through education and employment, together with building the legal, social and institutional framework which is necessary for achieving that.

We in Britain have much to contribute. We have faced up to these problems, and we have experience of how to deal with them. I believe that Israel is anxious to benefit from Britain's and Europe's experience and understanding of the problem. Indeed, Jewish Policy Research has already been approached by the Democracy Institute in Jerusalem to frame some ideas about how to develop Israel's democratic institutions so as to avoid problems of polarisation and division.

I think it is important that the Minister should be aware of what is going on. In his election speech, Mr. Barak said:

    "The time has come to end divisions". Those of us with good will towards Israel all share that vision, and I have tried to show how we can perhaps help to achieve it.

4.38 p.m.

Viscount Brentford: My Lords, I wish first to touch on humanitarian needs. Throughout the Middle East there is a great need for economic development. I endorse the work of the European Union and of the Arab states in contributing a great deal. I hope that the Government will continue to support European Union economic development there.

Secondly, I wish to mention Iraq where, as my noble friend Lord Torrington, said, perhaps the greatest humanitarian need in the greater Middle East exists. I express my gratitude to the noble Baroness the Minister for having put the UN panel reports in the Library. I found them very interesting reading.

The extent of malnutrition in Iraq has stabilised in the south and central areas and has improved in the north, but the problem is still great. Is food actually being distributed to those most in need? I wonder if the monitors are satisfied.

At col. 292 of Hansard of 13th May, the noble Baroness referred to the 275 million dollars-worth of medical supplies languishing in warehouses. Why is it languishing there? Is it the Iraqi Government's lack of vehicles which does not enable them to distribute the supplies? Is any action being proposed by our Government?

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The "oil for food" scheme uses up all the available Iraqi oil, but that is insufficient to feed the nation. Should oil industry spare parts and equipment, a point raised by my noble friend Lord Torrington, be authorised to improve the supply of oil? Secondly, should frozen Iraqi assets be released to provide additional funds for the purchase of food and medicine? Thirdly, because it seems that agriculture and the local economy suffer from the effect of imports, is there any way in which the humanitarian monitors can be permitted to buy food locally?

Leaving humanitarian needs, I wish to say a few words on government and democracy in the Middle East. I shall not mention the Israeli democracy; that is clear democracy. Turkey and Iran have elections, although perhaps it is arguable that in Turkey the army is more powerful than the government and can dispose of the government if it so wishes.

Of course, other countries have elections. The Syrian president was re-elected by 99.9 per cent of the vote, which tells us something about the Syrian election. But it is worth noting that the Syrian president permits the Orthodox Patriarch in Damascus to criticise the government and he does so. So there is good in all these different countries.

I turn to religious and ethnic persecution. I believe that religion and ethnicity are totally inseparable in this respect. The noble Lord, Lord Kennet, talked about the Crusades. It is worth reminding noble Lords that reconciliation work has been going on for three years, apologising for the evil of the Crusades. It reaches its zenith in Jerusalem this year, a thousand years after the Crusade arrived in 999. Many countries have good inter-faith relations. Syria does with the Christians but not with Jews. In some countries there is murder and abduction.

Finally, I wish to touch on one particular aspect and ask the noble Baroness about the plight of the Syrian orthodox in south-east Turkey, in Tur Abdin. The FCO has received a memorandum about that in the past few months and British diplomats visited the area recently. These Syrian orthodox Christians are squeezed between Turks and Kurds and are harassed by both, as Christians in Israel are harassed by both Moslems and Jews. The governor of this part of Turkey has forbidden any education to take place in the monasteries, particularly of the Christian faith and the Syrian language; has forbidden the receiving of visitors; and has forbidden building work on the monasteries. The situation is very difficult. It appears that an attempt is being made completely to remove the Syrian orthodox in that area of Tur Abdin. What steps are the Government taking to enable those people to enjoy basic human rights?

4.43 p.m.

Lord Davies of Coity: My Lords, I, too, am grateful to my noble friend Lord Kennet for introducing the debate. I am also grateful for his historical resume of the conflicts over the ages in the greater Middle East.

The title of the debate refers to the greater Middle East, but it is not surprising that the debate has largely focused on Israeli and Arab relationships, particularly

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the relationship between the Israelis and the Palestinians. Little can be said in a two-and-a-half-hour debate on the complex problems involved in the extremely difficult negotiations required in the search for peaceful and harmonious solutions between Israel and its neighbours.

Furthermore, it is not surprising that there will be considerable tension in Israel. There are 6 million people in the state of Israel, in a region of 100 million Arabs. Therefore, I suggest that understanding and tolerance must be displayed by all those interested in peace. We must all do what we can to encourage greater trust and confidence to try to remove, or reduce as far as possible, the fear and insecurity which exists. Only in that way will the negotiations for a peaceful settlement succeed.

The objective must be peace in the Middle East--not revenge or reprisal, but peace--to secure a peaceful settlement between Israelis and Palestinians. That must be encouraged and helped by everyone. Israelis living in peace in Israel and the Palestinians living in peace in their old state of Palestine must eventually take place.

I have mentioned trust and confidence. I believe that Mr. Rabin did so much to encourage that. Regrettably, during the past four years Mr. Netanyahu did much to reverse the process. The election of Mr. Barak renews much hope for continuing peaceful negotiations. It is important to see that the recent election result was welcomed by Mr. Arafat and, perhaps more importantly, by Syria which now wishes to re-open the peace negotiations suspended when Mr. Netanyahu was elected four years ago.

Peaceful negotiations are never easy, as we all know too well from the discussions in Northern Ireland. With Israel's ultra-democratic structure, the Labour Party there does not have an overall majority, and obvious difficulties will arise in the Knesset. Nevertheless, I believe that the election result reflects a genuine wish on the part of the Israeli people to achieve a peaceful settlement with the Palestinians and their Arab neighbours throughout the Middle East. I know that the British Government will do all in their power to assist--not interfere, which often breeds unnecessary suspicion--in every way possible to bring about a lasting peace and settlement in the Middle East.

4.47 p.m.

Lord Tomlinson: My Lords, I, too, congratulate my noble friend Lord Kennet on giving us the opportunity to debate this subject today. Any discussion of the Middle East peace process usually reflects American domination of the peace process and in brokering agreements such as the Wye River memorandum. In almost inverse proportion to that knowledge of the American role is any proper appreciation of the role of the European Union; and yet the European Union is the largest single donor and its budgetary contributions are the linchpin of the Middle East peace process strategy, providing some 52 cents in the dollar of external financial assistance to underpin the peace process.

However, the diversity of the EU's financial instrument prevents its programmes having the visibility that their volume deserves. That is especially

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unfortunate when the ground is now being prepared for the next stage of the peace process, Palestinian statehood. I believe that that stage has been greatly assisted by the election result in Israel, referred to by so many noble Lords. Following the election, it is imperative that the European Union continues its three main objectives for regional help and regional action in the context of the peace process.

First, the European Union must continue to help the people-to-people networks between the civil societies of Israel and its neighbours as an essential foundation for creating both a climate for peace and for future economic and social co-operation.

Secondly, the European Union process must develop and promote cross-border infrastructure projects serving both to foster regional economic development and to integrate the physical infrastructure on all sides. Thirdly, and very important, the European Union must help to facilitate the continuation and development of back-channels of communication between the parties to help prepare the ground for efficient negotiations, which will undoubtedly have to take place, on permanent status.

To focus effectively on those three objectives and to ensure a more cohesive approach requires several immediate steps to be undertaken in relation to European Union financial assistance. There must be an immediate increase in the size of the people-to-people budget as an essential confidence-building measure in the region. But, additionally, the various European Union programmes need to be more specifically and explicitly allocated to Mashraq Israel issues, whether the micro actions already there in the spirit of the Barcelona declaration to encourage such actions as inter-faith dialogue or the Med programmes for decentralised co-operation which exist currently, creating regional networks between the Israelis, their Middle East peace process neighbours and European Union partners.

Other programmes, such as the Meda democracy programme, a human rights programme with a specific budget line, need to be increased and need to be able to assist in a number of specific ways; for example, policies to deal with infringements of human rights, whether by Israelis or Palestinians, and a fuller integration in Israel of Israeli Arabs.

But perhaps the most important part of the programme is in relation to the Meda regional budget. There are already in the pipeline specific allocations for projects which have been identified and studied. It is the bringing of such programmes to fruition which could have a very significant effect in the region--the Jenin-Haifa cross-border programme, which involves Israel and the Palestinian Authority, the Jordan Valley water projects, which involve Israel, the Palestinian Authority and Jordan, or the economic development on the south-eastern coast of the Mediterranean or the northern coast of the Red Sea, involving Israel, the Palestinian Authority and Egypt. Such programmes will make a distinctive contribution.

For those whose European vision goes no further than incantations about whether they can have their money back, the European Union record in the Middle East is

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valued and valuable. The EP and national governments must join hands in ensuring that the objectives remain; that the resources remain available and are used effectively; and that our citizens know of our collective pivotal role through our membership of the European Union.

4.53 p.m.

Viscount Hanworth: My Lords, the title of this debate as well as the introductory remarks of my noble friend Lord Kennet have given us the latitude, which has barely been exploited, to range over a wide geographical area. Today, I should like to draw attention to the region of the Transcaucasus and the countries which surround the great inland ocean which is the Caspian Sea.

That is the region which supplied most of the world's oil at the end of the last century, at a time when Arabia's major export was palm dates. If some recent predictions are to be believed, the region is set to regain some of its former importance to the West. It has never ceased to produce oil in large quantities but until the early 1990s, the oil was wholly pre-empted by the Soviet Union.

Now, instead of flowing northwards, the oil is set to flow westwards through a newly constructed pipeline which will pass through Azerbaijan and Georgia to the Black Sea port of Suspa. A further pipeline is mooted which would carry the oil through Turkey to the eastern Mediterranean where it would be shipped from the small port of Ceyhan, not far from Cyprus and the Turkish border with Syria.

The West seems intent on gathering the spoils from the defeat of the Russian empire, but there are other motives driving that enterprise. Just when the demise of the Soviet Union made Caspian oil accessible to the West, Iraqi oil was embargoed during the Gulf crisis of 1990. Simultaneously, the US sought to restrain the development of Iranian oil exports to punish that nation for its involvement in anti-western terrorism. Therefore, it seemed logical to seek to replace the lost production of Iraq and Iran by Caspian oil.

At present, the global demand for oil is no longer pushing against the limits of productive capacity and some of the initial enthusiasm of the western oil companies has been dissipated. Nevertheless, it seems certain that the Caspian is set to play a major role in the petro-politics of the 21st century. Therefore, at this juncture, we should reflect upon the woeful history of western oil exploitation in the Middle East. We should recognise the dangers of a short-sighted pursuit of our own economic and commercial interests.

We might ask ourselves how we have reached a position where some of the major oilfields in the Middle East are inaccessible to us and where we are constrained to look for alternative supplies. We should also question the wisdom of seeking wholly to divert to the West the oil which was once a Russian monopoly.

To illustrate the nature of the exploitation of Caspian oil by western companies, I should like to describe the oilfield installations at Tengis on the north-eastern shore

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of the Caspian in Kazakhstan. That represents a joint venture by Chevron, Mobil and the Government of Kazakhstan.

Situated in the midst of the debris of a previous Soviet oil exploitation, the installation looks neat and clean. The western expatriates and their Kazakh partners work in prefabricated metal buildings which were shipped in when the installation was under construction. The plant relies upon the surrounding area for almost nothing. Even the food for the thousands of employees is trucked in by suppliers based in western Europe.

Admittedly, a good proportion of the profit from that joint enterprise will flow into the state treasury of Kazakhstan, but whether any of that will give rise to local economic development or will percolate down to the local population is, seemingly, a matter of no concern to the western partners in the joint enterprise.

To illustrate the political dangers which so often attend the exploitation of oil reserves in the Middle East, we might try to answer the question as to why the West no longer has access to the plentiful oilfields in Iran. The story is too long to recount in detail but we might begin by going back 50 years to a time when the Anglo-Iranian oil company was threatened with expropriation by the nationalist President Muhammad Mossadek. That man had a history of opposing foreign interests. For example, he had resisted the granting of an oil concession to the USSR in northern Iran. In 1953, he was deposed by a coup mounted by the Royalist Pahlavi faction with the considerable assistance of the CIA and British intelligence services. The rest, as they say, is history.

Western governments no longer intervene in that manner, so we believe. Usually they seek to minimise their engagement in middle-eastern politics. Nowadays they prefer to leave oil exploitation to international companies. However, it seems clear that such a policy of disengagement is equally hazardous. We have the Gulf War and all its consequences to substantiate that fact.

I wish to propose that the exploitation of oil, wherever it be found, should be governed by international pacts compelling the exploiting countries to invest in the local economies in support of their economic development. Such a compulsion might reduce the direct profits of the oil companies but, to the extent that it would avert the trouble and turmoil which has attended exploitation in the past, it would pay handsome economic dividends.

The hidden costs of the West's exploitation of oil in the past 50 years, which are attributable to political instability and warfare, are incalculable. It is surely in the interests of the exploiting nations to do all that is practical to ensure the economic development and the political stability of the countries in which they find the resources.

4.58 p.m.

Baroness Williams of Crosby: My Lords, I too add my thanks to the noble Lord, Lord Kennet, for introducing the debate. I add something more than just a conventional set of thanks. The noble Lord,

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Lord Kennet, has a way of making us all think, sometimes even about the unthinkable. For that, we should be extremely grateful.

In the course of our remarks, I would like to say also that I am delighted to see that the Minister has recovered from what I understand was a rather disagreeable bout of food poisoning. It is delightful to see her, phoenix-like, already on the Front Benches.

Finally, in these preliminary remarks, I wish to add to the excellent and well-chosen remarks of the noble Lord, Lord Janner, on the subject of King Hussein. Many noble Lords, in particular the noble Lords, Lord Judd and Lord Clinton-Davis, and the noble and learned Lord, Lord Archer, referred to the new phase which is opening in the Middle East as a moment of great opportunity. Many of us recognise that it would have been a moment upon which King Hussein would have seized, and we all hope that his successor will also find it a great opportunity for Jordan. Unquestionably, time and again, Jordan has been a zone of stability in a deeply unstable region and it is right and proper for us to pay tribute to what it has done to try to maintain peace in the region now over many stormy years.

Let me, too, start with the subject of Israel, because it is the elections in that country that make this a great opportunity. It was wonderful to hear the new Prime Minister, Mr. Barak, talk of the possibility of withdrawal from southern Lebanon in the relatively short period of a year, and also about the possibility of a partial withdrawal from the Golan Heights. The noble and learned Lord, Lord Archer, and the noble Lord, Lord Clinton-Davis, and my noble friend Lord Jacobs, pointed out that those things were related to one another; that Israel could not concede one without the certainty of security that might be offered to it from another part of what is likely to be a complicated and difficult deal.

It is also important to recognise, as the noble Lord, Lord Clinton-Davis, and others did, that there is still some way to go before the new prime minister can establish a stable coalition committed to peace in the Middle East. I understand that in the past couple of days there have been literally tens of thousands of e-mails reaching the One Israel Party from its own supporters, begging it not to make a coalition with Shas, because Shas is seen by some as too orthodox and too committed to orthodox religion to be an appropriate partner for the One Israel Party. On the other side there are those who says that a coalition that includes Likud after its recent history would not be able to carry conviction in pursuing peace in the Middle East.

I say that because all of us in this House wish the prime minister well. We respect and admire him and hope very much that he is able to proceed. But we would be foolish not to recognise the extreme difficulty he is up against in carrying his own complicated and diverse public opinion with him. That is why a number of noble Lords pointed out that the one function we can perform is to help in every possible way we can. In that respect what the noble Lord, Lord Tomlinson, said about some of the programmes for regional development which have been financed by and are now proposed by the European Union, could be of great importance.

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Let me say one other word about the Israeli situation. It is clear that beyond southern Lebanon and beyond the Golan Heights lie the difficult issues of resettlement and Jerusalem. It may be possible, as noble Lords suggested, for the settlements to be dealt with by some exchange of land, but one should be very clear that further settlements will put a great strain on the possibilities of a lasting peace. In relation to Jerusalem, I pay tribute to my noble friend Lord Jacobs for what he said in passing about the possibility of what he called a "Vatican solution", which we did not further discuss. Last year I had the pleasure of meeting Mr. Arafat and he himself said at that point that possibly a Vatican solution might be the answer to a problem not just of a city, but a city that is, for many of the religions of the world and above all for Judaism, a symbol and a vision and therefore very much more than simply a piece of territory. That may be one area where there could be some movement forward. I accept what many noble Lords said; that is, that it must be the end of the process and not the beginning.

I want to say something about the wider Middle Eastern situation, for what can be done by Israel depends upon the stability of the region as a whole. In that context I want to say a word or two about Iran and a word or two about Iraq. On 19th May--I am delighted that the Foreign Office agreed to this--there was an exchange of full diplomatic representation with Iran. We have for the first time in many years a full Ambassador here and not just a charge d'affaires.

Iran is slowly beginning to make progress. There have been relatively democratic elections to Islamic councils throughout the country. This weekend 107,000 councillors will be either assembled or approached and reached by other means of communication to help them in establishing democratic structures at the lowest level, which is where democracy has to start. Even more unusual and interesting is that the Government of Iran recently approached the Government of Saudi Arabia with a view to establishing more close and friendly relations. We would be well repaid in encouraging President Khamenei and those around him to feel that he would get a response from the West if he continued to pursue the admittedly difficult and painful road towards some degree of greater accountability, openness and democracy in Iran.

It is appropriate and right that we should remember that this is a state that has lived through some of the most traumatic events of the 20th century in respect of the nationalism to which the noble Viscount, Lord Hanworth, referred, followed by the so-called "white revolution", which for many peasants meant their disowning, followed by the Khomeini return and, not least at the end of the day, by the problems and huge losses of the desperate war with Iraq.

That brings me to Iraq. We may have to ask ourselves whether, after nine years, the policy of sanctions is not reaching the point of futility. The noble Lord, Lord Rea, and the noble Viscount, Lord Torrington, both referred to the humanitarian crisis, which is undoubted--it is one of the most serious in the world--and to the gradual deterioration of the infrastructure of the oil industry in that country. I understand that the United States is now

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talking about raising the cap of 10.5 million dollars on the permitted production of oil by Iraq. Of course, the fall in the oil price has meant that Iraq is even less able than she was before to ensure that her people are fed.

The most desperate news in the past 24 hours is that there is an extremely serious drought in Iraq which has brought with it as much as a two-thirds drop in the barley crop and a one-third drop in the wheat crop. I do not suggest that we take a sentimental approach to Iraq. But we should consider carefully whether some new trade-off between the gradual lifting of sanctions in return only for UNSCOM in a new and stronger form coming back might at least be considered after what appears to have been an increasingly futile policy.

Finally, let me refer to the imaginative contribution of the noble Lord, Lord Stone, who talked a little bit about the wider issues that now arise in the globalised world. He said that it looked as though ethnicity and ethnic hatreds were beginning to replace ideology as the source of war. He is right. Also as the noble Lord, Lord Haskel, said, the growing sense among many of the losers in a globalised world that they wish to assert their belonging to a religion, a community or a social group is one of the most difficult issues that the world now confronts. We know it ourselves in a small form from Quebec, for example, in a highly developed and well governed state. But in a poor, desperate and relatively hopeless state, belonging becomes the only thing onto which human beings can hold.

I therefore conclude these short remarks on my part by saying that we need to look at how to create some hope for the marginalised countries in the globalised world; for some kind of future that will make them feel that peace and the conclusion of conflict is the way forward and not simply, as we have seen, alas, in the Balkans, Africa and elsewhere, the destruction by one people of another which can only bring us destruction and despair.

5.9 p.m.

Lord Moynihan: My Lords, as other noble Lords have done, I, too, should like to congratulate the noble Lord, Lord Kennet, on securing this debate. It is timely to have this opportunity to discuss developments in the greater Middle East, so soon after the stalled Middle East peace process has, as other noble Lords have mentioned, been imbued with fresh hope and optimism in the wake of last week's elections in Israel.

The untimely death of King Hussein of Jordan, truly the father of his nation, has emphasised the fact that the winds of change and of uncertainty are blowing through the region. A process of succession is now under way after decades of unchanging rule in most of the Arab countries of the Middle East. To date, the transitions in Jordan and Bahrain have been encouragingly smooth, but only the days ahead will tell whether these are the exceptions rather than the rule. In formulating its policies towards the Middle East, the international community must take into account that, over the next decade, regional leaders who have built up credibility and legitimacy over many years will be replaced by a

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younger generation. We must be prepared for a potential power vacuum as these leaders take time to establish themselves; but, equally, the new rulers may be freer from the ideological chains of the past that shackled their predecessors.

The rulers of the Middle East, both new and established, must make a choice of direction. One choice of direction leads backwards, to a continuation of the region's turbulent, conflict-ridden past, a path of poverty, inequality and hostility to near neighbours. That, as noted by the noble Lord, Lord Quinton, is the path where extremist movements will find fertile ground to nurture the seeds of discontent and to exploit religion for their own political ends.

The other choice of direction leads ahead to a future of peace, a future of greater stability, a future of prosperity and of democratic participation. That choice of direction has still to be made. The international community has a critical role to play in influencing it, with all to gain and much to lose. Many speakers this afternoon have agreed that the indicators for the future are mixed. There are hopeful signs that the next century will see the countries of the Middle East committed to the path of peace, prosperity, respect for human rights and the rule of law. Life may be about to be breathed back into the Arab-Israeli peace process, stalled on all tracks over the past two and a half years.

Indeed, after years of bloody confrontation, other optimistic signs can be found. Islamic extremism has increasingly retreated in Algeria and Egypt, and across the Arab world a gradual process of political liberalisation and economic reform, referred to by a number of noble Lords as being so important--and rightly so--is taking place.

In Morocco, the opposition have become the government; in Qatar, women have voted for the first time in a Gulf Co-operation Council state, while last week, the Emir Sheikh Jaber in Kuwait announced the enfranchisement of women in elections. The Palestinian Authority is being held to account by an elected Palestinian legislative council and in Yemen and Kuwait democratic, multi-party elections have been held. Moreover, North Africa, Egypt, Tunisia and Morocco have all implemented significant and far-reaching economic reforms.

A number of noble Lords also referred to developments in Iran. I believe that there is guarded optimism that President Khatami's election and the recent local elections will continue to usher in a new era of political liberalisation and much hope for tolerance. There is hope that Iran will increasingly play a constructive role in regional and international affairs. However, as some noble Lords have pointed out, other indicators in the region are not positive. Saddam Hussein's continued defiance of the UN Security Council threatens to destabilise the Gulf, while exacting a very heavy price from the Iraqi people. The region cannot take its rightful place in the international community and fully realise its global aspirations while such pariah regimes operate within it; while certain of its governments turn a blind eye to terrorism or, in some cases, actively support it and provide havens for

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terrorists; and while the single-minded pursuit of the acquisition and development of weapons of mass destruction in Iraq and Iran still offers the spectre of the region's backsliding into another era of extremism and conflict, marked by a new arms race in WMDs and the ballistic missiles necessary to deliver them. As alluded to by the noble Viscount, Lord Hanworth, the Middle East would be a region of vital interest to this country and to Europe, if for no other reason than it continues to account for 35 per cent of the world's oil production and nearly 70 per cent of its proven reserves.

On the question of the Middle East peace process, we on these Benches join other noble Lords in congratulating Prime Minister-elect Barak on his election victory and on the strong mandate that he has won from the Israeli electorate. We welcome his stated desire to seek a broad-based coalition government. We look forward to the emergence of such a government, willing to play its full part in realising the historic goal of a comprehensive, just and lasting Arab-Israeli peace, on the basis of security for the Israelis and prosperity, justice and self-determination for the Palestinian people, with statehood as an option. The people of Israel have spoken and they have made their wishes very clear indeed. While, as always, I deeply respect the views expressed by the noble Lord, Lord Haskel, I believe from my position that it was also possible to read their vote as a wish to break the stalemate on the peace process.

As this House is well aware, there has long been consensus in British policy on the route to the goal of peace--a route based on respect for the principles of international law. These principles enshrined in UN Security Council resolutions held the key to unlocking peace first between Egypt and Israel and then between Jordan and Israel. They will ultimately unlock peace between Israel and the Palestinians. The stalling of the Arab-Israeli peace process on all tracks over the past two and a half years has, in my view, obscured the fact that, in the six years since the historic signing of the Oslo peace accords, much has been achieved.

Despite the renewed hope, this is certainly not a time for euphoria. The road to peace is only half travelled. Some of those treading its path have lost their way before, and may do so again. The obstacles are formidable and have been alluded to by noble Lords throughout the debate, ranging from hurdles which are placed by those who would use the tactics of terror to seek their own extreme goals to the simple truth that without prosperity peace cannot take root, and without peace prosperity cannot grow.

The international community has always sought to help the region to nurture the shoots of peace and to move the region away from open warfare, intractable hostility and suffering towards the fruits of peace and prosperity. In this environment, and having listened most carefully to what the noble Lord, Lord Janner, had to say, it is critical that neither side establishes hard-line conditions which might make a settlement--for example, including one on Jerusalem--not just more difficult but impossible. We have a real opportunity at

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the moment. That is an important point and one upon which I hope the noble Lord, Lord Janner, will agree with me.

Finally, I have a few words to say about Jordan. Successive British governments have had long-standing and close relationships with Jordan. One of Israel's key Arab partners in the peace process and a voice of calm in a turbulent region, Jordan, nevertheless, faces daunting economic challenges and has yet to receive the peace dividend due to it. Therefore, it is all the more incumbent on the Government--and, indeed, on this House--to send a strong signal of support for King Abdullah in the transition period following the death of King Hussein, as he follows in the footsteps of his father and continues Jordan's critically important role as mediator through this period of ongoing regional tension, especially in Iraq. I hope that the Minister will send such a signal when she concludes the debate in a few moments.

Standing as we do in the shadow of the 21st century, from these Benches we will support the Government in the action that they take to encourage the creation of momentum towards positive change and a comprehensive peace, so that the new millennium ushers in a new era of co-existence and regional co-operation for Israel and its Arab neighbours.

5.19 p.m.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, I too thank my noble friend Lord Kennet for bringing forward the debate this evening. My noble friend is right to draw our attention to this region at a time when such important changes are taking place, as many noble Lords have remarked during the course of our debate. My noble friend introduced the debate in his characteristic forthright way. I am sure that many noble Lords were interested in the points that he made. This is a time of real opportunity. It is a time for us to look at the developing links we have with some of the new governments in the area and it is a time for strengthening our links with our friends of old.

Most of your Lordships have concentrated on Israel and Iraq, although other countries and other parts of the area have attracted some attention. In summing up the debate I shall concentrate on the areas on which your Lordships have concentrated. I join with the noble Lord, Lord Jacobs, in congratulating Mr. Barak on his victory in Israel's recent general election. I am sure that the whole House wishes him well in forming his new government. We look forward to working with Mr. Barak both on the peace process and on strengthening the strong ties that exist between our two countries.

On the peace process, noble Lords will be familiar with the problems that have held up progress over the past two years, and most recently the protracted negotiations leading up to Wye; the frustration as Israel ceased implementing Wye; and the stalemate on the Syrian and Lebanese tracks of the peace process. Like many noble Lords--notably the noble Lords,

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Lord Quinton and Lord Weidenfeld--Her Majesty's Government believe that Mr. Barak's victory in the Israeli elections brings a new opportunity for progress in the Middle East peace process. We hope that all parties to the process will seize this opportunity. Once the new government are in place, we hope to see engagement on all tracks of the peace process. In particular, we expect the new government to press ahead with implementation of the Wye River Memorandum and to resume final status talks on an accelerated basis.

Real final status talks on Jerusalem, refugees, settlements, security, borders and water--on all these matters--are essential if we are to achieve a just, lasting and comprehensive peace settlement in the region. The United States, whose involvement is essential, has made clear that it is willing to relaunch the negotiations soon and to call a summit later this year. That is a welcome development. But, of course, the United Kingdom and the European Union also have important roles to play. We have helped to bring the parties this far through diplomatic contacts and pressure on both sides, substantial aid for the Palestinian Authority, and most recently through the Berlin European Council Declaration which helped provide the Palestinians with the reassurance they needed not to declare unilateral independence.

We are concerned that tensions remain high in south Lebanon after recent violent exchanges between Israel and Hezbullah. We urge restraint on all sides and respect for the April 1996 understanding. We are heartened by the reaffirmation by Ehud Barak of his pre-election pledge to withdraw Israeli troops from Lebanon within a year of taking office. We greatly welcomed Mr. Barak saying that after the election.

My noble friend Lord Kennet asked why the European Union does not do more. I hope that he felt that my noble friend Lord Tomlinson gave a fairly comprehensive description of what the European Union has done so far. I remind my noble friend that the Berlin European Council Declaration calls for an early resumption of negotiations on the Syrian and Lebanese tracks, leading to the implementation of United Nations Security Council Resolutions 242, 338 and 425. We support efforts to revive activity on these tracks as the best way to achieve a truly comprehensive peace settlement. We shall certainly do all we can to support progress towards that. Like my noble friends Lord Clinton-Davis, Lord Cocks of Hartcliffe and Lord Davies of Coity, Her Majesty's Government believe that we must now renew our efforts on this front and that we are justified in feeling a renewed hope for peace. Of course we recognise that there is much hard work ahead too.

The noble and learned Lord, Lord Archer of Sandwell, talked about the preferential trade agreements of the EU/Israel Association Agreement. The United Kingdom ratified the agreement in April 1998--France and Belgium still have to do so--and once the ratification procedures have been completed in all European member states, the Council of Ministers will need to take a decision to conclude on the basis of a proposal from the Commission. This is an important

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matter. This decision must be considered carefully in the light of progress on the peace process. It is important that we consider these preferential trade arrangements. I remind your Lordships that the United Kingdom supported the donor ministerial conference in Washington on 30th November 1998 and that we announced a bilateral three-year package of aid which will provide £50 million worth of assistance to bring the United Kingdom's total contribution, including through the European Union and the United Nations Relief and Works Agency, to over £100 million.

My noble friend Lord Judd drew our attention to the allegations about corruption in the Palestinian Authority. Of course we are concerned about those allegations and we continue to monitor the issue closely. However, we are satisfied that the United Kingdom bilateral aid is not affected. At the donors' conference the United Kingdom urged the Palestinian Authority to improve transparency and effective financial control. I hope that that gives my noble friend some assurances on that point.

The noble Earl, Lord Sandwich, was understandably concerned about the illegal settlements. We continue to regard the settlements as illegal under international law and as an obstacle to peace. I have said that to the noble Earl before and I reiterate that assurance now. The Berlin Declaration urges all parties to refrain from all unilateral acts, including unilateral settlement activity. The Prime Minister included a recommendation for a freeze on settlement activity in his message of congratulation to Mr. Barak at the time of the election.

The noble Earl also drew our attention to the problems regarding water in the area. Through the European Union we are playing an active role in the multilateral Water Resources Working Group. The Department for International Development also continues to assist the Palestinians on water issues. My honourable friend George Foulkes in the DfID pledged £7 million in November 1998 for water and sanitation projects which will be aimed at improving supplies and also, of course, environmental health.

My noble friend Lord Kennet reiterated a view that he has expressed to your Lordships before; namely, that of double standards as between Israel and Iraq. I genuinely believe that he is wrong on that issue. We insist that each country should comply with United Nations Security Council resolutions in accordance with their obligations under the United Nations Charter. Beyond that, the situations are entirely different. As regards Israel, despite the difficulties, the Security Council resolutions provide the basis for negotiations which we believe offer the best prospect of realising the interests of the people of the region in securing the comprehensive peace which we all hope for. However, in the case of Iraq, there are no such negotiations.

I thank my noble friend Lord Stone of Blackheath for his ideas. I will pass them on to my colleagues with frontline responsibilities for our relationship with Israel. These are issues that fall within the remit of the United Nations Security Council, but they are important in looking at ways, imaginative and innovative ways, in which we can try to rebuild the confidence that will be so badly needed if peace is to settle in the Middle East.

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I too would like to say something, as the noble Lord, Lord Moynihan, did, about our relationship with Jordan and to associate Her Majesty's Government with the sentiments expressed by my noble friend Lord Janner in everything that he said about King Hussein and King Abdullah.

We were delighted to receive King Abdullah and Queen Rania when they visited the UK from 11th to 12th May. During their successful visit the King had talks with Her Majesty the Queen and my right honourable friend the Prime Minister among others. We have an excellent, long-standing relationship with Jordan, which remains a key player in regional matters ranging from the peace process to the situation over Iraq. We welcome King Abdullah's assurances of continuing Jordanian commitment to the peace process. That commitment on the part of Jordan has been extremely important in the past.

Perhaps I may also say a few words about Iran, where we have seen some very positive developments in the recent past. As the noble Baroness, Lady Williams of Crosby, said, the Iranian Government under President Khatami have undertaken a programme of significant change: proper enforcement of the rule of law; full facilitation of freedom of expression; and a more open and co-operative foreign policy aimed at enhancing regional stability. We too have been very pleased to see the improving relationship between Iran and Saudi Arabia. The Saudi defence and foreign Ministers have visited Tehran, as I am sure the noble Baroness knows, and President Khatami has just completed an equally successful visit to Saudi Arabia. There has been very successful co-operation between the two countries within OPEC.

We believe that these are developments much to be welcomed, as is our improving relationship, which the noble Baroness also mentioned, with our exchange of ambassadors, which we believe will be a boost to the relationship. Not everything is right; we still have our concerns, as the House will know from our previous discussions on these issues, on the human rights front, but we believe that it is a relationship that is moving in the right way.

I must now turn to the issue of Iraq. No one suffers more at the hands of Saddam Hussein than the Iraqi people themselves. Your Lordships will know his methods well. Recent weeks have seen brutal repression of the Shia communities in Baghdad and in the south of Iraq in the wake of the murder of a leading Shia cleric, presumably a murder which had the sanction of the Iraqi Government. Sadly, such brutality in Iraq is all too commonplace because the regime simply does not care about its people. If it did, it would meet its international obligations. Then sanctions could be lifted. Iraq's record of aggression under Saddam Hussein's leadership--eight years of war against Iran, the brutal invasion of Kuwait, the savage repression of his own people--suggests that his priorities remain elsewhere.

I would have felt more reassured about the remarks of my noble friend Lord Kennet if he had mentioned any of those points. The regime's brutality and its insensitivity to the needs of its own people cannot be an

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excuse for the rest of us to turn a blind eye. We have consistently been at the forefront of efforts both nationally and through the EU and the UN to improve the position. Since the end of the Gulf War we have donated £100 million in bilateral and multilateral aid, making us one of the largest donors to that country. We have also used our permanent membership of the Security Council to devise--we have been one of the authors--push through and improve the oil-for-food programme.

My noble friend mentioned none of that in asking your Lordships to look at the effect that sanctions were having. Of course, we would be glad to see sanctions lifted provided the requirements laid down by the international community were met. Given the political will in Baghdad, that could happen, and it could happen quickly. But while the Iraqi regime pursues its present course we must continue to contain its aggressive instincts and to do all that we can for the Iraqi people through the humanitarian provisions of Security Council resolutions.

It was in that spirit that we put forward a new draft resolution at the United Nations, drawing on the results of the three expert panels to which the noble Viscount, Lord Torrington, referred, dealing with disarmament, humanitarian and Kuwaiti issues. We hope that these will provide the basis for a resolution for the Security Council to re-engage with Iraq and, if Iraq chooses, as it should in its own interests, to find a way out of the present stalemate.

Our suggestions include the possibility of teams of experts looking further at how Iraq's available oil infrastructure can best be rehabilitated. That picks up particularly the points made by the noble Viscounts, Lord Brentford and Lord Torrington. This is an important matter because we want specifically to look at the option of the involvement of foreign oil companies and increasing the number of outlets--of course, with proper controls and proper monitoring. Both noble Viscounts made a point of directing our attention to the oil issue. I assure them that this is covered by what we are trying to negotiate in the United Nations.

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