[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
                    DEVELOPMENTS IN THE MIDDLE EAST

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                        INTERNATIONAL RELATIONS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                               __________

                         Tuesday, June 8, 1999

                               __________

                           Serial No. 106-85

                               __________

    Printed for the use of the Committee on International Relations



                    U.S. GOVERNMENT PRINTING OFFICE
63-467 CC                   WASHINGTON : 2000



                  COMMITTEE ON INTERNATIONAL RELATIONS

                 BENJAMIN A. GILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania    SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa                 TOM LANTOS, California
HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska              GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey     ENI F.H. FALEOMAVAEGA, American 
DAN BURTON, Indiana                      Samoa
ELTON GALLEGLY, California           MATTHEW G. MARTINEZ, California
ILEANA ROS-LEHTINEN, Florida         DONALD M. PAYNE, New Jersey
CASS BALLENGER, North Carolina       ROBERT MENENDEZ, New Jersey
DANA ROHRABACHER, California         SHERROD BROWN, Ohio
DONALD A. MANZULLO, Illinois         CYNTHIA A. McKINNEY, Georgia
EDWARD R. ROYCE, California          ALCEE L. HASTINGS, Florida
PETER T. KING, New York              PAT DANNER, Missouri
STEVE CHABOT, Ohio                   EARL F. HILLIARD, Alabama
MARSHALL ``MARK'' SANFORD, South     BRAD SHERMAN, California
    Carolina                         ROBERT WEXLER, Florida
MATT SALMON, Arizona                 STEVEN R. ROTHMAN, New Jersey
AMO HOUGHTON, New York               JIM DAVIS, Florida
TOM CAMPBELL, California             EARL POMEROY, North Dakota
JOHN M. McHUGH, New York             WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas                   GREGORY W. MEEKS, New York
RICHARD BURR, North Carolina         BARBARA LEE, California
PAUL E. GILLMOR, Ohio                JOSEPH CROWLEY, New York
GEORGE RADANOVICH, California        JOSEPH M. HOEFFEL, Pennsylvania
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado
                    Richard J. Garon, Chief of Staff
          Kathleen Bertelsen Moazed, Democratic Chief of Staff
          Deborah Bodlander, Senior Professional Staff Member
                    Marilyn C. Owen, Staff Associate



                            C O N T E N T S

                              ----------                              

                               WITNESSES

                                                                   Page

The Honorable Martin S. Indyk, Assistant Secretary for Near 
  Eastern Affairs, U.S. Department of State......................     3

                                APPENDIX

Prepared statements:
The Honorable Benjamin A. Gilman, a Representative in Congress 
  from New York and Chairman, Committee on International 
  Relations......................................................    00
The Honorable Martin S. Indyk....................................    00
Additional material:
Correspondence dated February 4, 1999 to The Honorable Martin 
  Indyk from Representatives Benjamin A. Gilman and Matt Salmon 
  of the International Relations Committee submitted by Chairman 
  Benjamin Gilman................................................    00
Response dated June 3, 1999 to the letter dated February 4, 1999 
  by The Honorable Barbara Larkin, Assistant Secretary for 
  Legislative Affairs, U.S. Department of State, submitted by 
  Chairman Benjamin Gilman.......................................    00
Questions for the Record, submitted to Ambassador Indyk by 
  Chairman Benjamin Gilman.......................................    00
Response by Ambassador Indyk to Questions for the Record, 
  submitted by Chairman Benjamin Gilman..........................    00
Questions for the Record, submitted to Ambassador Indyk by Matt 
  Salmon, a Representative in Congress from Arizona..............    00



                    DEVELOPMENTS IN THE MIDDLE EAST

                              ----------                              


                         Tuesday, June 8, 1999

                  House of Representatives,
              Committee on International Relations,
                                           Washington, D.C.
    The Committee met, pursuant to notice, at 10:10 a.m. In 
Room 2172, Rayburn House Office Building, Hon. Benjamin A. 
Gilman (chairman of the Committee) Presiding.
    Chairman Gilman. The Committee will come to order. This 
morning the Committee on International Relations is conducting 
a hearing on developments in the Middle East. As usual, we are 
pleased to have Assistant Secretary for Near Eastern Affairs 
Martin Indyk join us on this very important topic.
    In the past few months, there have been a number of changes 
in the region which affect U.S. policy in a variety of regional 
matters. The Committee is, therefore, interested in the 
Administration's views regarding these changes, particularly as 
they affect U.S. policy regarding the Middle East peace 
process, Iran and Iraq.
    Back in October, Martin Indyk was sworn in as Assistant 
Secretary for Near Eastern Affairs by the Department of State. 
In that capacity, Ambassador Indyk assists the Secretary of 
State in providing overall direction and coordination of our 
policy in the Middle East and in north Africa, and from April 
1995 to October 1997, Dr. Indyk served as U.S. Ambassador to 
Israel, and during that period he helped to strengthen U.S.-
Israeli relations, reinforcing the U.S. commitment to advance 
the peace process and substantially increase the level of 
mutually beneficial trade and involvement.
    Prior to his assignment to Israel, Dr. Indyk served as 
special assistant to the President and senior director for Near 
East and south Asian affairs at the National Security Council. 
While at the NSC he served as principal adviser to the 
President and National Security Adviser on Arab-Israeli issues, 
Iraq, Iran, and South Asia, was a senior member of Secretary 
Christopher's Middle East peace team, and served as a White 
House representative in the U.S.-Israel Science and Technology 
Commission. We welcome Dr. Indyk this morning.
    With the election of Ehud Barak as Israel's Prime Minister-
elect, many expect Israeli-Palestinian negotiations to resume 
fairly quickly. Barak still has to put together a coalition 
government, but he has given indication that he will come to 
the United States at an early date. We therefore hope that 
Secretary Indyk will apprise us of the latest developments in 
that area.
    Iran's actions on a variety of issues continue to be of 
grave concern to many of us. Also alarming was the recent 
disclosure that Iranian authorities arrested 13 Jews on charges 
of spying for Israel and the United States. The suspects were 
accused of spying for the ``Zionist regime'' and ``world 
arrogance'', references to Israel and the United States, 
respectively. We are very disturbed about that development and 
want to know what steps our Nation is taking in this matter and 
how it may affect our policy considerations regarding Iran. 
Clearly, the regime is not rehabilitating its image, if that 
has been its intent.
    Iran's neighbor, Iraq, wants to raise its oil input. As 
such, it recently ordered government engineers to start 
developing a giant oil field in the south to add 80,000 barrels 
to daily production. We would welcome the Department's comments 
about this new circumstance and how that impacts sanctions 
against Iraq in the oil-for-food program.
    We also want to discuss in greater detail the 
Administration's plan to assist the Iraqi opposition, since we 
met just a few days ago with leaders of the executive 
presidency of the Iraqi National Congress.
    Elsewhere in the region Egypt's Parliament overwhelmingly 
nominated President Hosni Mubarak for a fourth 6-year term, and 
President Mubarak signed into law new restrictions on Egyptian 
human rights groups. Regrettably, the law allows the government 
to disband the boards of directors of private groups, nullify 
their decisions and object to funding resources. It will also 
set prison terms at 1 or 2 years for violations.
    While the State Department has said this new law takes 
Egypt in the wrong direction, we are anxious to learn about 
efforts to moderate this restrictive law as well as the 
Department's assessment regarding the progress of democratic 
governance and the human rights of the Coptic Christian 
minority.
    Assistant Secretary Indyk, we have a lot to cover this 
morning. You may read your statement or summarize it as you 
please. It will be made a part of the record of the hearing. We 
would welcome in the future if you could make your statement 
available to us at an earlier date. The Committee plans to send 
you additional questions to be answered for the record in the 
event that we don't cover everything today.
    Chairman Gilman. Assistant Secretary Indyk, please proceed.
    Mr. Indyk. Thank you very much, Mr. Chairman.
    Chairman Gilman. Bear with me. I now recognize the Ranking 
Minority Member Mr. Gejdenson.
    Mr. Gejdenson. I am also here to hear Mr. Indyk, I will be 
very brief. It must be frustrating for him to be in the 
backwater area of the State Department. It seems to me not much 
is happening in your region lately.
    I would be curious, as you go through this, to receive an 
assessment of what the situation is in a couple of places. One 
in Jezzin, if I am pronouncing that correctly. Who is now in 
control there? Is it the Lebanese Government, or is it the 
Hezbollah? Have you met with Bashar, the son of President Asad, 
and what is your sense of his gaining the ability to take over 
for his father?
    Obviously, as Chairman Gilman pointed out, the situation of 
the 13 Jewish people who have been arrested for spying, is 
something that is very troubling. Whether it is playing to 
internal domestic politics between the so-called moderates and 
hard-liners in Iran. In Iraq, I guess the question is the role 
of Ahmed Chelabi and whether or not his organization can 
actually coalesce the various factions, and is this more than a 
debating society? Are these people really pulling together, 
trying to come up with an organization that is capable of 
replacing Saddam Hussein?
    I expect that you will give us plenty of information on the 
new Israeli Government and how you see the peace process moving 
forward once the new governments is in place.
    It is a pleasure to have you here and have you in your 
post, giving us great confidence that the Administration has 
picked an excellent individual for one of the real hot spots.
    Chairman Gilman. Mr. Lantos.
    Mr. Lantos. Thank you, Mr. Chairman. I found your opening 
remarks exceptionally positive and accurate, and I want to 
identify myself with your comments.
    I merely want to add, if I may, Mr. Chairman, that several 
of us in recent times have made overtures to the Government of 
Iran. In my own case, Secretary-General Kofi Annan of the 
United Nations conveyed my desire to visit Iran. I think it is 
important to keep on the record our interest in opening a 
dialogue with the Government of Iran, but this arrest of a 
number of members of the Jewish community in Iran is certainly 
not conducive to Iran changing its image in the West. Phony 
charges against innocent civilians is not a good way for the 
Iranian Government to attempt to reintegrate itself into the 
civilized world community, and I am very anxious to hear 
Secretary Indyk's comments on your observations.
    Chairman Gilman. Thank you, Mr. Lantos.
    Chairman Gilman. Mr. Indyk.

  STATEMENT OF MARTIN S. INDYK, ASSISTANT SECRETARY FOR NEAR 
           EASTERN AFFAIRS, U.S. DEPARTMENT OF STATE

    Mr. Indyk. Thank you very much, Mr. Chairman and 
Congressmen Gejdenson and Lantos. I am grateful for the 
opportunity to appear before you again to talk about U.S. 
policy toward the Middle East. It has been a long time, Mr. 
Chairman, and therefore, I have prepared a long statement, 
which is the reason why you didn't get it earlier. I would like 
to submit it for the record and just provide a few highlights.
    Chairman Gilman. Without objection.
    Mr. Indyk. I invite you to interrupt me if I'm going on too 
long as I just try to summarize this long policy statement.
    Mr. Chairman, in the Middle East, as in the rest of the 
world, we stand on the threshold of a new millennium, but this 
region finds itself caught between its turbulent and conflict-
ridden past and a future of greater peace, stability, 
prosperity and popular participation. It is not yet clear which 
direction the Middle East will take because the indicators are 
mixed.
    On the one hand, we have seen difficulties in the Arab-
Israeli peace process over the past 2\1/2\ years which have 
dramatically slowed the momentum toward positive change in the 
region. Last month, however, the Israeli people, as you have 
noted, voted for change, and Prime Minister-elect Ehud Barak 
now has a strong mandate to continue the search for a 
comprehensive Arab-Israeli peace. If Israel's negotiating 
partners are ready to respond, we believe it will be possible 
to resume negotiations on all tracks and move toward the 
comprehensive peace that would usher in a new era of 
coexistence and regional cooperation.
    Saddam Hussein's defiance of the U.N. Security Council 
threatens to destabilize the Gulf while exacting a heavy price 
from the Iraqi people, but Saddam has emerged from the Desert 
Fox campaign weakened and isolated and much less capable of 
creating trouble for his neighbors for the time being.
    President Khatami's election in Iran in the recent local 
elections there has made it clear that a significant majority 
of the Iranian people support political liberalization, respect 
for the rule of law and a constructive role for Iran in 
regional and international affairs. This evolution still faces 
a strong, sometimes violent, opposition from some quarters 
inside Iran, and Iran's determined development of ballistic 
missiles to enable delivery of its weapons of mass destruction 
over long distances has the potential to trigger a new and 
dangerous arms race across the region.
    Extremism is now on the defensive in Algeria and Egypt 
after years of bloody confrontation, and across the Arab world 
the gradual struggle for political liberalization and economic 
reform is taking place. Finally, King Hussein's untimely death 
has underscored the fact that a process of succession is under 
way across the region after decades of unchanging rule in most 
Arab countries.
    Because the Middle East is a region of vital interest to 
the United States, we are committed to helping it achieve a 
better future in the 21st century than that which it has 
experienced in the last half of the 20th century, when the 
Middle East was often regarded as a synonym for trouble and 
hopelessness. Above all, we have an intense interest in 
preventing it from backsliding into another era of extremism 
and conflict marked by a new arms race in ballistic missiles 
and weapons of mass destruction.
    How can we widen the circle of peace while countering those 
who would oppose the promotion of a more normal existence for 
all the people of this region? The answer in our minds is 
clear. We must broaden the scope and depth of our relationship 
with those states that share our commitment to a more peaceful 
and prosperous region, work with them to achieve our common 
vision, and at the same time we must enforce our ability to 
contain and overcome those states or forces that threaten our 
interests.
    On the Middle East peace process, Mr. Chairman, it is 
difficult for me to say much at this juncture because, of 
course, we are waiting for Prime Minister-elect Barak to form 
his government. The President and Secretary of State are 
committed to advancing the peace process on all tracks. We 
would like to see both Israel and the Palestinian Authority 
fulfill their obligations under the Oslo accords by 
implementing the Wye Agreement. We would like to see the 
resumption of final status negotiations on the Palestinian 
track with the objective of bringing them to a conclusion 
within a year, and we would also like to see a resumption of 
the long-stalled Syrian and Lebanese tracks of the peace 
process negotiations, as well as the multilaterals and a 
reinvigoration of the normalization process.
    I would like to stress two points because I know that they 
have become of some concern to many Members of this Committee. 
First of all, throughout the peace process, we have been guided 
by the belief that agreements can only be reached through 
direct negotiations. The only bases for negotiating a peace 
agreement between Israelis and Palestinians are the terms of 
reference defined in Madrid and the principles agreed to in the 
Oslo accords. These include U.N. Security Council Resolutions 
242 and 338. They do not and never have included U.N. General 
Assembly Resolution 181.
    Second, our experience has taught us the importance of the 
parties creating the proper environment for progress in the 
negotiations and for dealing with differences through those 
negotiations. That is one major reason why the Administration 
is working hard to see that the proposed July 15th meeting of 
the High Contracting Parties to the Fourth Geneva Convention 
does not take place. We have voiced our opposition to such a 
meeting in the strongest terms and continue to do so. We have 
made clear that we would not attend a meeting if it takes 
place, and we have encouraged all others to do likewise. This 
meeting, Mr. Chairman, will not contribute to the peace 
process.
    Let me just focus the rest of my remarks on Iraq and Iran 
issues which you have all raised. Eight years after the Gulf 
War and Saddam's persistent defiance of the international 
community, we are under no illusions that Iraq, under Saddam 
Hussein, will comply with UNSC resolutions on disarmament, 
human rights, accounting for the Kuwaiti POW's and the return 
of stolen property.
    In view of this reality, our policy now rests on three 
pillars. First, as long as he is around, we will contain Saddam 
Hussein in order to reduce the threat he poses both to Iraq's 
neighbors and to the Iraqi people. Second, we will seek to 
alleviate the humanitarian cost to the Iraqi people of Saddam's 
refusal to comply with the UNSC resolutions; and finally, we 
will work with forces inside and outside Iraq, as well as 
Iraq's neighbors, to change the regime in Iraq and help a new 
government, representative of the needs and aspirations of the 
Iraqi people, rejoin the community of nations.
    Our containment with regime-change policy is designed to 
protect the citizens of Iraq and its neighbors from an 
aggressive and hostile regime. We maintain a robust force in 
the region, which we have made clear we are prepared to use 
should Saddam cross our well-established red lines. Those red 
lines include: Should Saddam try to rebuild his weapons of mass 
destruction should he threaten his neighbors should he 
challenge--continue to challenge allied aircraft within the no-
fly zones or should he move against the people living in the 
Kurdish-controlled areas of northern Iraq.
    Let me be particularly clear on this point. The United 
States is concerned for the protection of all Iraqis against 
the repression of the Baghdad regime. Hence, we believe that 
the world community should tolerate no backsliding from 
Baghdad's obligations under all of the U.N. Security Council 
resolutions intended to protect the people of Iraq and its 
neighbors from the depredations of Saddam Hussein. In 
particular, Mr. Chairman, the U.N. Security Council Resolution 
688 twice cited the consequences of Baghdad's repression of the 
Iraqi civilian population as a threat to international peace 
and security. It, therefore, demanded that Baghdad immediately 
end this repression. Baghdad is in flagrant violation of this 
U.N. Security Council resolution, as it is of so many others.
    Although our containment policy has been effective in 
preventing Saddam from threatening the region, it, of course, 
has its costs. As we have seen repeatedly since 1991, even a 
contained Iraq under its current leadership retains an ability 
to threaten both the stability of the region and the welfare of 
the Iraqi people. Both are paying too high a price for Saddam's 
continued rule. In our judgment, both the region and the people 
of Iraq deserve better. It is past time for Saddam to go.
    For these reasons, President Clinton announced in November 
of last year that the United States would work with the Iraqi 
people toward a government in Iraq which is prepared to live in 
peace with its neighbors and respect the rights of its people. 
We are fully committed to supporting the Iraqi people in 
bringing this about. In pursuit of this objective, the United 
States will adhere to two important principles. First, we will 
uphold the territorial integrity of Iraq; and second, we will 
not seek to impose from the outside a particular government or 
leaders on the people of Iraq. That is up to the Iraqi people 
themselves, but we do support a change of government that will 
be responsive to the aspirations of the Iraqi people, one that 
takes meaningful steps toward a democratic future for the 
country and can represent fairly the concerns of all of Iraq's 
communities.
    If it is to be successful, change must come from within, 
from the Iraqis themselves. In particular, the security forces 
and the people must stand on the same side against Saddam. The 
support of Iraqi exiles, including the politically active 
opposition, along with neighboring states, however, is 
indispensable. The captive Iraqis need a voice.
    Free Iraqis--those in exile and those who live in relative 
freedom in northern Iraq--bear a special responsibility to 
develop a coherent vision for a brighter future for this 
country. They must take the lead in developing and promoting an 
alternative vision based on the restoration of civil society, 
the rebuilding of Iraq's economy and the promotion of a new 
role for Iraq as a force for peace and reconciliation in the 
region. They can also play an effective role in delegitimizing 
Saddam, in helping to build the case for his prosecution as a 
war criminal and in getting the truth into and out of Iraq.
    Congress has provided the Administration with a number of 
important tools to support Iraqis who are working toward a 
better future for Iraq. These include earmarks of $8 million in 
existing economic support funds. We are using these funds to 
strengthen opposition political unity, to support Iraqi war 
crimes initiatives, to support humanitarian programs and the 
development of civil society and for activities inside Iraq. We 
also have established and recently stepped up broadcasting 
hours for Radio Free Iraq, which operates independently and 
broadcasts daily in Arabic uncensored news and information to 
the people of Iraq.
    We have named a Special Coordinator for Transition in Iraq, 
Frank Ricciardone, who is managing our overall effort. He has 
already had considerable success in helping disparate 
opposition groups work together and elect a new interim 
leadership that right now is preparing the way for an Iraqi 
opposition conference that will have as broad participation as 
possible.
    Finally, there is the Iraq Liberation Act, which provides 
discretionary authority to the President to direct up to $97 
million in Defense Department draw down and training for 
designated Iraqi opposition groups. We have now begun the 
process of drawing down this account for the provision of 
nonlethal supplies to the Iraqi opposition. Many have called 
upon the President to use this authority to arm the Iraqi 
opposition and support military action against Saddam Hussein.
    We believe such action is premature. There are a host of 
issues that must be resolved before such equipment and training 
could be provided with confidence that it would advance our 
objectives of promoting a change of regime and not just lead to 
more Iraqis being killed unnecessarily. One requirement is a 
credible, broad-based Iraqi political umbrella movement based 
on consensus that can authoritatively articulate a future 
vision for those Iraqis who now lack a voice in their own fate. 
Hence, the first kind of support which we will provide to the 
Iraqi opposition under the draw down will be to meet their most 
urgent requirements, equipment for the infrastructure vital to 
the effectiveness of an international political advocacy 
movement, broadcasting equipment and training in civil affairs. 
Further kinds of material assistance to the Iraqi opposition 
can be provided when the conditions are created to enable them 
to be best absorbed and exploited.
    We will need the cooperation of Iraq's neighbors if we are 
to provide effective support to the internal Iraqi opposition. 
Although these neighbors all share Iraqi people's longing for a 
change of regime in Baghdad, views about how we can help Iraqi 
people reach this goal differ. We must take those views into 
account and gain their cooperation in promoting the recovery of 
Iraq as a good neighbor and contributor to regional stability.
    As for Iran, Secretary Albright a year ago laid out our 
approach to Iran in her Asia Society speech. The main point she 
made was that we are prepared to develop with the Islamic 
Republic, when it is ready, a road map in which both sides 
would take parallel, reciprocal steps leading to a more normal 
relationship. Unfortunately, the Iranian Government has made 
clear that at this stage it is not ready to engage, insisting 
instead that the U.S. first take a number of unilateral steps.
    Given Iran's reluctance to begin a bilateral dialogue, we 
have pursued other avenues that can serve to broaden our 
engagement with Iran. We have worked constructively with Iran 
in multilateral settings on issues of common concern, such as 
countering the spread of narcotics and the situation in 
Afghanistan. We have also noted with interest Iran's improving 
relations with the Arab world, particularly on the other side 
of the Persian Gulf. We welcome such a relaxation of tensions, 
but at the same time we remain in close consultation with our 
Arab friends in the region who share our cautious approach 
based on testing Iran's willingness to abandon destabilizing 
policies, and in this regard we remain concerned at Iran's 
threatening approach to the islands dispute with the United 
Arab Emirates.
    We have also supported greater contact between our two 
peoples. We believe that such exchanges can increase mutual 
understanding and respect and help overcome decades of 
mistrust.
    Within the context of a broad review of general U.S. 
sanctions policy, President Clinton recently announced his 
decision to exempt commercial sales of food, medicines and 
medical equipment from future and current sanctions regimes 
where we have the authority to do so. This decision will enable 
the sale of certain items to Iran. It does not, however, 
conflict with our policy of applying economic pressure to the 
Iranian Government. Any benefit derived will accrue to the 
Iranian people and, of course, to American farmers and 
manufacturers. It is important to remember that U.S. sanctions 
policy seeks to influence the behavior of regimes, not to deny 
their people basic humanitarian necessities.
    Apart from that recent adjustment, our sanctions policy 
will remain in force vis-a-vis Iran. The reasons behind this 
policy of applying economic pressure remain the same today as 
they did when that policy was first invoked. U.S. sanctions are 
a response to Iranian Government practices that violate 
international norms and threaten our interests and those of our 
allies. In this regard we will continue to oppose bilateral 
debt rescheduling, Paris Club debt treatment for Iran and the 
extension of favorable credit terms by Iran's principal foreign 
creditors. We will also continue to oppose loans to Iran by 
international financial institutions.
    Unfortunately, some Iranian government practices that we 
seek to have changed have continued, although not to the same 
degree in all areas under the present government of President 
Khatami. Iran, as you are aware, remains on the State 
Department's list of state supporters of terrorism, and despite 
Iranian public statements condemning certain terrorist acts or 
expressing sympathy for Kenyan and Tanzanian victims of the 
August, 1998 bombings of the U.S. Embassies in Nairobi and Dar 
es Salaam, Iranian support for terrorism remains in place.
    President Khatami himself has publicly denounced terrorism 
and condemned the killing of innocents, including Israelis. The 
Iranian Government has also stated that Iran would accept a 
peace acceptable to the Palestinians. We assume that these 
statements are sincerely made, and it is therefore also 
reasonable for us to expect that the actions and policies of 
the Islamic Republic should reflect that. Unfortunately, so far 
this is not been the case. Iran was harshly critical of the Wye 
Agreement and its Hezbollah proxy in Lebanon threatened 
Arafat's life, and President Khatami himself met with leaders 
of the Palestinian rejectionist groups when he visited Syria 
last month and apparently promised them more support.
    We remain concerned at Iran's continued drive to develop 
weapons of mass destruction and the ballistic missiles 
necessary to deliver them. In this regard, we are particularly 
concerned about Iran's nuclear drive. Last summer Iran also 
tested a ballistic missile, the Shehab III, capable of 
delivering warheads 800 miles, and is reported to be close to 
producing a missile with an even greater range. These 
developments pose significant potential threats to U.S. forces, 
as well as to our friends in the region.
    We have to act quickly, Mr. Chairman, to forestall what is 
shaping up to be an imminent arms race in ballistic missiles 
and weapons of mass destruction, and we need to do this by 
working with Israel, with our Arab allies and with Turkey to 
help boost their abilities to deal with these emerging threats. 
These responses include strengthening active and passive 
defenses, enhancing deterrents, slowing down proliferation 
through relevant multilateral arms control regimes and other 
means, and encouraging moderation in the policies pursued by 
those regimes that are trying to acquire these systems.
    Iran's efforts to develop weapons of mass destruction and 
ballistic missiles together with its other ongoing policies of 
concern are the reason that we oppose investment in Iran's 
petroleum sector. We oppose Iran's participation in the 
development and transport of Caspian resources, and we oppose 
multilateral lending to----
    Chairman Gilman. Secretary, if I might interrupt, we will 
continue with the hearing right through the roll call for those 
of you who may want to go over and vote and come right back. 
Please continue.
    Mr. Indyk. Thank you. I will be wrapping up right now, Mr. 
Chairman.
    We oppose Iran's full integration in international economic 
fora.
    We look forward to a time when greater economic interaction 
with Iran will be possible, but this depends on the Iranian 
Government's willingness to address practices that, in our 
view, continue to disqualify Iran from enjoying the full 
economic and commercial advantages that come with responsible 
membership in the international community.
    Finally, we continue to observe with great interest 
internal developments in Iran. As we have often said, we fully 
respect Iran's sovereignty and the right of the Iranian people 
to choose their system of government. That said, we will not 
shy away from expressing our support for values that we believe 
to be universal. In this regard, both the Presidential election 
in 1997 and the recent municipal elections were remarkable for 
their openness and the level of participation of the Iranian 
people. Statements by President Khatami in support of human 
rights and the rule of law deserve acknowledgment and support.
    At the same time we are concerned at the gap that often 
remains between words and deeds. For example, we find it hard 
to reconcile President Khatami's words with the announcement 
yesterday that 13 members of the Jewish communities of Shiraz 
and Isfahan, including rabbis, would be charged with espionage. 
These arrests, Mr. Chairman, send a very disturbing signal. We 
call on the Government of Iran to ensure that no harm comes to 
these individuals and to release them immediately.
    Mr. Chairman, in the Middle East our vital interests remain 
engaged. We face both long-standing challenges and new 
opportunities to promote peace, prosperity and stability in 
this troubled region. We look forward to continuing our work 
with you and the Members of this Committee as we seek to 
advance our interests in this troubling region, as we seek to 
bring it a future of greater peace, prosperity and stability.
    Thank you very much, Mr. Chairman.
    Chairman Gilman. Thank you, Secretary Indyk, for your 
concise and overall review.
    Chairman Gilman. Secretary Indyk, Public Law 104-45 of 1995 
mandated that our U.S. Embassy in Israel should be removed from 
Tel Aviv to Jerusalem. Can you tell us what is the status of 
that move as far as the State Department is concerned?
    Mr. Indyk. Yes, Mr. Chairman. As you know, when that Act 
became law, President Clinton made it clear that, consistent 
with his long-standing policy, he would not do anything to 
undermine the peace process. That law provided that if the 
embassy was not moved by May 31st of this year, 50 percent of 
the funds in our security and maintenance account for foreign 
buildings would be deducted from that account. We are about to 
reach the point where we will be unable to use 50 percent of 
those funds; that is, we have already used up 50 percent of 
those funds. Therefore, while he has not made a final decision 
in this regard, the President will in all likelihood use his 
waiver of authority given to him under the Act so as to prevent 
those funds from being rendered unavailable.
    We have over the last month or so engaged in consultations 
with interested Members of Congress on this subject. We have 
sought to be constructive, and still wish to be constructive, 
in trying to find a resolution of this issue, but we also have 
to fulfill--the President has to fulfill his responsibilities 
both to the peace process and to the protection of our 
embassies and personnel abroad, and it is for that reason that 
he is now considering using his waiver authority under the Act.
    This is, as you are aware, Mr. Chairman, a very sensitive 
time in the peace process. We are waiting for the Government of 
Israel to be formed, a new government to be formed. That 
government, we expect, given the statements made by Prime 
Minister-elect Barak, will want to resume final status 
negotiations on the Palestinian track as well as negotiations 
on other tracks of the peace process, and in that context we 
feel very strongly that we should not take actions now that 
would preempt those negotiations or undermine them.
    As you are aware, Jerusalem is an issue that will be 
discussed in these negotiations, and we think it is incumbent 
upon us, given our special role, that we promote this process, 
that we not take actions now that would disrupt those 
negotiations, both because of the concern that we have about 
the need to have funds to ensure that our embassies and people 
abroad are protected and because of our concern to not preempt 
or prejudge final status negotiations that are about to get 
underway. The President is now weighing the use of his waiver 
authority under the Act.
    Chairman Gilman. Mr. Secretary, the President from time-to-
time keeps using the waiver authority with regard to this 
issue, and we think it is long overdue that we get under way 
with the plans. This is the only capital in the entire world 
where our embassy is not situated in that capital, and if you 
are talking about a limitation of funds, this Committee has 
already authorized additional funds for embassy security in the 
amount of hundreds of millions of dollars. I see the President 
has also just in the last day or two recommended additional 
funds. So, if it is a funding issue, there shouldn't be a 
problem. If it is a political issue, that political issue 
remains continually there, and I would think it is long overdue 
that we resolve this issue.
    The Congress has indicated its desire, its intent to do 
this time and time again, and I think it is long overdue now 
that we resolve the Jerusalem embassy issue. I would urge you 
and the Department to take another hard look at all of this.
    Mr. Secretary, Palestinian officials have made increasing 
reference to U.N. General Assembly Resolution 181 of 1947, 
which called for the creation of two small states for Jews and 
Palestinians out of the former Palestine Mandate. Under 181, 
Israel would have far less territory than before 1967. What is 
the relevance of 181, and why are the Palestinians now 
referring to it? How does the State Department view these 
statements?
    The current Middle East peace process has been based on 
U.N. Security Resolutions 242 of 1967, which created a so-
called land-for-peace formula, and I would welcome your 
comments.
    Mr. Indyk. Thank you, Mr. Chairman. If I could just make a 
comment on your statement about Jerusalem. We have not used the 
waiver authority before this. If the President decides to do 
it, this would be the first time.
    In terms of the issue of funding, we are grateful for your 
authorization of those funds. You are correct in saying the 
President has asked for additional funds. The problem is that 
the way the law is written in this regard, the account that 
holds those funds is affected by whether the embassy is moved 
or not; and 50 percent of the funds in that account, according 
to the law, will not be available if the embassy is not moved 
by May 31st.
    May 31st has passed. Now we are at the point where 50 
percent of the funds are being obligated, and we will need 
access to the other 50 percent. If we don't have access to that 
other 50 percent, contracts will have to be canceled, and work 
will have to be suspended. That is the problem we face at the 
moment, and that is one of the reasons why the President is 
considering using his waiver authority.
    As far as Resolution 181 is concerned, let me repeat again 
in the clearest possible terms what I said in my opening 
statement, that we do not regard 181 as relevant at all to the 
negotiations, period. You also asked why are the Palestinians 
referring to Resolution 181. As I understand it, from 
statements that they have made, their reference to 181 appears 
to be their desire to invoke that General Assembly resolution 
as the basis for claiming an independent Palestinian state. You 
may recall that Resolution 181 back in, I think, 1947 provided 
for the creation of two states in Palestine, a Jewish state and 
an Arab state, and that is why they are invoking this decades-
old resolution to claim legitimacy for their claim to an 
independent state. As far as we are concerned, only Security 
Council Resolution 242 and 338 are the resolutions relevant to 
the negotiations on the Palestinian track.
    Chairman Gilman. Mr. Secretary, we will briefly recess. Mr. 
Leach is on his way back to conduct the hearing, and we will 
continue as soon as he returns. It will take a few minutes. I 
am going to the floor to cast my vote.
    Mr. Indyk. Thank you.
    Chairman Gilman. The Committee stands in recess.
    [Recess.]
    Mr. Leach. [Presiding.]
    Mr. Lantos.
    Mr. Lantos. Thank you very much, Mr. Chairman.
    Mr. Secretary, we are delighted to see you and thank you 
for a very comprehensive statement. Let me begin with an issue 
that you haven't mentioned, although I take it is on the minds 
of most of us. With the apparent victory of NATO in Kosovo, I 
anticipate there will be major lessons learned by all of the 
players in the Middle East as to the willingness and the 
ability of the United States to use military power as necessary 
to achieve our objectives.
    I vividly recall the lunch we had with the new King of 
Jordan a couple of weeks ago where, in response to several 
questions, he made the very obvious point that the outcome of 
the engagement in the former Yugoslavia will have an enormously 
significant bearing on the attitude of players in the Middle 
East. I certainly fully agree with that conclusion, as I 
suspect most of my colleagues do.
    My first question is--and I have two or three others--my 
first question is, would you give us your reaction as to what 
conclusions the various players will draw from this truly major 
and, once the dust settles I think we can say, historic move by 
NATO, because clearly the lesson of Kosovo, or one of the many 
lessons of Kosovo, is that human rights trump national 
sovereignty. Some may not like it, some clearly do not like it, 
but those are the facts. Milosevic is not allowed to kill, 
rape, and plunder people who are technically his subjects, 
irrespective of their ethnic origin.
    The second question I have relates to Japan, which is, in 
this context, within your purview. I have been very disturbed, 
as I think many of my colleagues have, that the Japanese 
Government displays an incredible degree of reluctance in debt 
forgiveness as it comes to the poorest nations on the face of 
this planet. Every indication is that all of these debt 
forgiveness conferences dealing with truly destitute societies 
are running into a very rigid and unbending Japanese attitude 
because they simply are unprepared to forgive debts that these 
totally money less, resource less societies have accumulated 
over the years.
    During his visit here the King of Jordan raised the 
Japanese issue with several of us, and I certainly am extremely 
supportive of Jordan's request for debt relief as it comes to 
Japan. I am wondering if you would be prepared to comment on 
that issue.
    The final question I have, if I still may abuse the time at 
my disposal which is no longer there, Mr. Chairman----
    Mr. Leach. You have some leniency.
    Mr. Lantos. What in your view is the rationale for the 
Government of Iran to make common cause with the rejectionists 
of the Palestinian groups at a time when hopefully we will be 
moving toward implementation of the peace process and the 
building of a stable and peaceful and prosperous Middle East? 
Why is this retrograde policy continuing?
    Mr. Indyk. Thank you very much, Congressman Lantos. First 
of all, in terms of the Kosovo example, I think it is a very 
good question, and because there is no doubt----
    Mr. Lantos. Do I get an A?
    Mr. Indyk. If I were grading, definitely.
    There is no doubt that leaders around the world, but 
especially in the Middle East, were watching closely and 
continue to do so to see how this would play itself out. I 
think in particular the fact that NATO, with the United States 
in the lead, intervened on behalf of the Albanian-Kosovars, who 
are Muslims, was something that resonated very clearly in the 
Muslim world, but particularly in the Arab world. I think it 
did a lot to put paid to the argument about double standards 
that somehow the West and the United States always practice 
against the Arabs or against the Muslims, and here was a very 
clear case in which that wrongful claim was put to rest.
    Second, I think the fact that we were able to demonstrate 
united resolve amongst the NATO allies sent a very important 
signal about our commitment to stability in Europe and to our 
commitment to human rights, and those commitments will resonate 
in the Middle East, as well, where they are very important.
    Third, the effectiveness of air power. At the beginning of 
the Kosovo conflict, you will recall that people drew the 
contrast between the terrain and difficulties of operating in 
Serbia with air power versus the open terrain of Iraq. I think 
that NATO has demonstrated very clearly the effectiveness of 
air power in Kosovo in terms of achieving our objectives. I 
think that this can be multiplied by a factor of at least 
three, if not more, in terms of the effectiveness of air power 
should we need to use it if Saddam Hussein crosses our red 
lines in Iraq. I think I made clear earlier what our red lines 
are in that regard. So I think it sends a very important signal 
as we continue to confront Saddam Hussein that we have the 
capability and the resolve to achieve our objectives in Iraq.
    Finally, I think that it serves to reinforce a message that 
we have been projecting to the Middle East for some time, which 
is that leaders in the region have a choice. They can get on 
the side of positive, constructive change, sign on to the rules 
of the international community, give up sponsorship of 
terrorism, give up flaunting of Security Council resolutions, 
support peacemaking in the region and thereby secure the needs 
of their people and the interests of their country. I think it 
is no coincidence that you see Libya, after 10 long years, now 
giving up the terrorist suspects in the Pan Am 103 bombing for 
trial. Obviously we have to see them fulfill the rest of the 
Security Council resolutions requirements. They have made some 
commitments to do so. We need to test that.
    We need Syria keen to reengage in the peace process with 
Israel, and we see the beginnings of change in Iran as 
represented by President Khatami, who, of course, himself is 
the product of a very real desire for change on the part of the 
Iranian people. It is no coincidence that he talks the talk of 
human rights and the rule of law and respect for the 
individual, but it is obviously a work in progress in terms of 
the fulfillment of those lofty ideals.
    I think that overall the impact of the victory in Kosovo is 
a positive one in terms of the signal that it sends to the 
Middle East, and that brings me--I will jump to the third 
question, come back to Japan--to the question of why would Iran 
support Palestinian rejectionists, and it is for me an 
unfathomable issue. I don't understand why, when the President 
Khatami says that they will support what the Palestinians 
support, that Iran should have come out against the Wye 
Agreement and should be supporting the Palestinian 
rejectionists who represent nobody on the Palestinian side. 
They are yesterday's men who speak only the language of 
violence and terrorism and rejection. Why President Khatami 
would want to associate himself with these people is, I have to 
say, beyond me, and therefore I am at a loss to explain why.
    I think that the Iranians continue to view Israel in very 
negative terms. I think that that is very unfortunate, because 
as long as they continue to do so, it is a major obstacle to 
their playing a constructive role in the region and to their 
having a constructive relationship with the United States.
    As far as Japanese debt forgiveness, we have urged the 
Japanese Government to forgive Jordan's debt. President Clinton 
raised this with Prime Minister Hashimoto when he was here. We 
have engaged with them repeatedly over a long period of time to 
try to get them to do this. They face some difficulties with 
the issue of debt forgiveness having to do with their internal 
arrangements and what they would have to do to forgive the 
debt; and they are also concerned that if they go ahead with 
debt forgiveness under their law, they would not be able to 
provide any more credit to Jordan. But the Jordanians are 
making clear that they would rather have the debt forgiveness 
than the future credit, and so we will continue to press this 
as we will press our other G-7 partners, particularly the 
French, Germans, and the British, who also hold Jordanian debt.
    We would like to see them all support debt forgiveness. We, 
of course, forgave Jordan's debt some years ago, some $700 
million worth of Jordanian debt, and we think they should 
follow suit. Why? Because with the untimely passing of King 
Hussein and the ascension to the throne of King Abdullah, 
Jordan, which is in a pivotal position in the region in 
geostrategic terms and in terms of the peace process and in 
terms of stability, faces a very real problem in terms of 
growing its economy. King Abdullah, as you heard, made a very 
strong commitment to doing his part in terms of economic 
reform, deregulation, privatization, all the things that Jordan 
needs to do to create the opportunity to grow the economy and 
to attract foreign investment. We have been supporting his 
efforts to open the markets in the region to Jordanian 
products, which is an essential element of this, but the third 
element is debt forgiveness and debt relief so that the 
government doesn't have this huge burden of debt repayments at 
a time when it is trying to grow the economy.
    We think it is in our vital interest to see this occur, and 
we strongly support it.
    Mr. Lantos. Thank you very much, Mr. Chairman.
    Chairman Gilman. [Presiding.] Thank you.
    Mr. Salmon.
    Mr. Salmon. Thank you very much, Ambassador Indyk. It is 
good to see you again. As you know, 13 American citizens have 
been killed by Palestinian terrorists in Israel since the 
signing of the Oslo accords in September 1993. Over 20 suspects 
in the attacks currently reside in territory controlled by the 
Palestinian Authority, and several of these suspects are 
walking about freely. Some have reportedly been given positions 
in the Palestinian police forces. The United States has the 
right and the responsibility under U.S. law to prosecute the 
terrorist killers of Americans.
    I do commend the Administration for sending investigative 
teams on numerous occasions to Israel to investigate these 
attacks, and I also want to acknowledge the Administration's 
efforts to verify the incarceration of terrorists who have 
murdered Americans in PA prisons. According to a June 3rd 
letter from the State Department, your agency says, in an 
effort to confirm that the suspects remain in custody, U.S. 
officials have conducted a series of visits to PA prisons, and 
I thank you for that. In the past several months our officials 
have made six visits to PA prisons to confirm the incarceration 
of Palestinians suspected of involvement in killing Americans. 
When I visited Israel last year and met with several 
Palestinian officials, including Chairman Yasser Arafat, to 
express the congressional commitment that the killers of 
Americans be brought to justice, there was a willingness on 
their side to have the U.S. officials monitor the incarceration 
status of the killers of Americans. I do appreciate the 
Administration for taking the Palestinian Authority up on their 
offer.
    I still believe, however, that the effort to bring to 
justice the Palestinian terrorists who have murdered Americans 
has been incomplete, as I think you would agree. For example, 
no rewards have yet been offered by the U.S. Government for 
information leading to the capture of Palestinian killers of 
these 13 Americans, even though multimillion-dollar rewards 
have been offered in other cases of Americans killed by 
terrorists abroad; and despite reams of evidence implicating 
certain individuals in the murders of Americans, including in 
one case, an outright confession, no indictments have been 
secured by American authorities, and I have three questions 
based on this issue.
    I am interested in why no reward has been offered leading 
to the capture of Palestinian fugitives implicated in the 
attacks of Americans; that is first.
    Second, Israel recently requested the extradition of one of 
the alleged terrorist murderers of American citizens, Mohamed 
Deif. The PA basically acknowledged knowing Deif's whereabouts, 
but has indicated for political reasons that they will not 
arrest Deif. Has the Administration ever criticized the 
Palestinian Authority for harboring this alleged killer of 
Americans?
    Finally, what penalty has the PA suffered due to their lack 
of complete cooperation in the investigation of the terrorists 
in their territory who have murdered American citizens? I have 
an additional two questions that I would like to submit for the 
record.
    Thank you.
    Mr. Indyk. Thank you, Mr. Salmon. First of all, on the 
issue of rewards, this is something that I have taken up 
personally to see whether we can post rewards for the 
Palestinian fugitives, those who are not in custody, who are 
charged with killing Americans. There is some sensitivity 
involved in this. We are trying to work this issue--I would 
prefer it if you would indulge me that I brief you privately on 
that matter, but it is an issue we are pursuing.
    On the question of indictments, of course that is an issue 
for the Department of Justice, and they are continuing to 
pursue this issue, but they do not have the basis for indicting 
these people as yet, and I would urge you to get the answer 
from them. But we are working with them to pursue that issue, 
and Mr. Mark Richards will be joining us on another trip to 
Israel and the Palestinian Authority in the near future as we 
pursue these issues.
    As far as Mr. Deif is concerned, he is, as you are probably 
aware, one of the masterminds of the Hamas bombing campaigns. 
He has been a fugitive for some years now. We believe he is in 
Palestinian Authority-controlled territories. We have pressed 
at the highest levels, by which I mean President Clinton 
himself, the Palestinian Authority, to find Deif and to arrest 
him and prosecute him, and this has been a constant effort on 
our part.
    We have seen a responsiveness on the part of the 
Palestinian Authority and a serious effort, particularly 
recently, to try to find him, without success. We have indeed 
criticized the Palestinian Authority in the past for its 
failure to apprehend Deif, and this will continue to be one of 
our highest priorities in our engagement with the Palestinian 
Authority on these kinds of security issues. I would say that 
we have seen a marked improvement in the performance of the 
Palestinian Security Authority when it comes to preventing 
terrorism, and they are working closely with Israeli security 
services to achieve that objective. This remains an outstanding 
issue, and we will not be satisfied until Deif is in custody. 
We will continue to pursue that.
    Chairman Gilman. The gentleman's time has expired.
    I am going to ask that the Department of State letter of 
June 3rd, 1999, with regard to this issue be made part of the 
record.
    Mr. Menendez.
    Mr. Menendez. Thank you, Mr. Chairman.
    Mr. Secretary, let me direct my questions to Iran and its 
nuclear capabilities. In December of this last year, Jamie 
Rubin said the following about the U.S. position on Bushehr's 
Nuclear Power Plant. He said, ``We are convinced that Iran is 
using the Bushehr reactor project as a cover for acquiring 
sensitive Russian technology''. Then in your own statement on 
page 5 you talk about the Administration's policies as pursuing 
multilateral efforts to prevent Iran from acquiring and 
developing weapons of mass destruction; and on page 12 you 
specifically talk about, again, the concern of Iran's ability 
to develop weapons of mass destruction and its clandestine 
efforts to procure nuclear, chemical and biological weapons. 
You go on to say, in this regard, that we are particularly 
concerned about Iran's nuclear drive.
    With all of those statements and many others that the 
Administration has made, can you tell me then how is it that 
the State Department has requested an increase for voluntary 
contributions above and beyond those which we use to 
participate in the international Atomic Energy Agency? Which 
voluntary contributions have fueled the development of the 
Bushehr nuclear power plant in Iran? I raised this question, I 
believe, with you the last time you were here. I have raised it 
at other times as well.
    I have since learned that the IAEA has initiated a new 
program in Iran to help the Iranians in the area of uranium 
exploration. The IAEA in the past years has had a similar 
exploration program in North Korea, which we objected to, and 
following our objections, the program was ended.
    So my question, Mr. Secretary, is do we continue to support 
the IAEA's voluntary contributions to building what, in fact, 
they themselves describe--and I am going to read from their 
project description, which says, ``the technical support of the 
national authorities,'' referring to Iran, ``in the proper 
discharge of its function for the safe implementation of the 
Bushehr nuclear power plant will be critical, critical, for the 
design and construction of the plant''.
    We continue to have Administration witnesses who tell us we 
never want to see this plant built, and yet we continue to fuel 
it. Can you explain to me how that policy is consistent?
    Mr. Indyk. Not easily. I think that the way to reconcile 
these, in terms of understanding what is going on here, is to 
understand that we do have an interest in seeing the IAEA 
extend its safeguards in Iran, and the IAEA is at the moment in 
the process of seeking Iran's acceptance of enhanced safeguards 
that would have--or would give--the international community 
and, therefore, the United States a better ability to get a 
handle on Iran's nuclear activities, and that is in our 
interests.
    The IAEA is not an agency of the U.S. Government. We don't 
control it, and they are going about this process according to 
their own judgment about how to secure this, and their view is 
that under the nonproliferation treaty, signatory states are 
entitled to technical cooperation, and that is why they have 
engaged in these projects that you are talking about. It is 
under that rubric of technical cooperation.
    We have made our views clear to the IAEA. We have objected 
to the project, and we have done so at senior levels of the 
IAEA. The agency has nonetheless decided to proceed with that 
project.
    Mr. Menendez. Mr. Secretary, my concern is very simply that 
while the IAEA is a great agency and we all support it, we all 
support, to the extent that any country is going to promote a 
nuclear program, for it to be under the safeguards established 
under the international norms of the IAEA. We in the past 
raised in North Korea questions very strenuously about uranium 
exploration. We already know that the Iranians have uranium 
conversion technology. Now we are going to help them seek 
uranium, we are going to help them with their technical 
cooperation, and we may not control the IAEA, but we are its 
major, major contributor of voluntary funds. I cannot believe 
that we cannot achieve in the Iran case what we achieved in the 
North Korea case and, at least, not give them the uranium 
exploration capability that will ultimately make the reactor a 
reality.
    I do hope the Administration will vociferously take a 
position in this regard. Otherwise it is a hollow policy as far 
as I am concerned.
    Mr. Leach. [Presiding.] Thank you. I would just like to 
raise several quick issues. One, you referenced in Jordan the 
desire to get Japanese debt forgiveness. On the table in the 
international community at this time is a broader debt 
forgiveness involving 45 of the poorer countries in the world. 
The Administration has theoretically been somewhat supportive, 
but has not been definitively so, and I understand the subject 
is going to be raised at the next G-7.
    I would just like to emphasize, because it touches 
potentially either directly in your jurisdiction in one or two 
countries or neighboring jurisdiction, there is a lot of 
support in Congress for this initiative, and I hope that you 
are not too dainty in your attitudes. As you are advocating 
debt forgiveness for Japan, this is an exceptional time for the 
poorest of the poor to be very forthcoming. I hope that message 
is loud and clear to the Department of State, which has not 
been quite as active as it should be on this subject. There 
will be legislation that will be under consideration by perhaps 
this summer in that regard.
    Second, I would like to raise the issue of culture and 
food. With regard to Iran, you have properly referenced that we 
do have some more forthright cultural exchanges. Everybody in 
life has certain interests, and you reference some orchestras 
and music and academic exchanges, but the greatest aesthetic 
art in the history of mankind is the sport of wrestling, and I 
hope the Department of State continues to bear that in mind, 
particularly with Iran. Wrestling is more important to Iran by 
maybe a thousandfold factor than ping-pong was to China. I hope 
as these wrestling exchanges come into being, the Department of 
State will be forthright, and I bring to you an Iowa 
perspective on this subject as well as a very personal one.
    With regard to food in Iran, I happen to believe, as many 
do, that in terms of people-to-people relations, food and 
medicine are fundamentally people to people as contrasted with 
geostrategic and other dimensions, at least absent actual war. 
It is, of course, appropriate to open up in food and medicines 
with Iran, but it may not be a significant step unless there 
are government loan guarantees on the food side. So my question 
to you is, is the Administration considering loan guarantees on 
food exports to Iran?
    Mr. Indyk. First of all, on the issue of debt forgiveness, 
this is not my area of responsibility, but I will certainly 
take back your views and make sure that they are registered 
forcefully with my colleagues. Jordan actually is not part of 
that group of the poorest nations, but for the other reasons 
that I have outlined to Congressman Lantos, we feel that it 
should enjoy the benefits of that debt forgiveness.
    We agree with you completely and welcome your comments 
about wrestling, and we have sought to facilitate an exchange 
of wrestlers in various competitions, and that clearly 
resonated very strongly with the Iranian people. The 
unfortunate thing is that we can do these kinds of things, and 
we will continue to do them--and people-to-people exchanges are 
important, and the Iranians proposed enhancing that, and we 
have taken them up on that--but it hasn't, unfortunately, so 
far, perhaps it is too soon, had the kind of snowballing effect 
in terms of their willingness to engage with the United States 
in discussion of the issues of concern to us and the issues of 
concern to them.
    We made it clear that we are ready to discuss both, but 
that we need to have that discussion. I think the President has 
been very clear in his interests in finding a way to engage 
with Iran, but we have also been very clear that there are 
these issues that need to be addressed, and that we are 
prepared to do so. There are things that concern them as well 
as the things that concern us.
    I hope that wrestling will have the desired impact, and 
that sooner rather than later we will have the chance to 
wrestle with them over the negotiating table.
    As far as loan guarantees, I have to answer that question 
in the negative. As part of this decision, we do not intend to 
provide loan guarantees for the purchase of food or medicines. 
The Iranian Government has the ability to pay for the needs of 
its people. If it doesn't, we think it should spend less on 
armaments, and particularly weapons of mass destruction, and 
more on the needs of its people. I don't think that the need is 
really there in this case, but even if it was, I don't believe 
that we would be involved in that kind of business. As I make 
clear in my opening remarks, we are opposed to international 
financial lending or extension of credits to Iran as long as it 
goes around doing things which threaten our interests and the 
interests of the international community.
    Mr. Leach. Fair enough. I just want to conclude by 
emphasizing I think everybody in this Congress would rather 
have exchanges with Iran based on muscle and not missile power.
    Mr. Berman.
    Mr. Berman. I would like to focus on your testimony on 
Iran, and I missed part of it. I take it is the 
Administration's belief that Iran continues to supply financial 
and other forms of assistance to organizations that we view as 
terrorist organizations. Does that assistance continue at this 
time?
    Mr. Indyk. Yes, it does, in particular to Hezbollah.
    Mr. Berman. What about Hamas?
    Mr. Indyk. To Hamas it is more in terms of training and 
political connections, as far as we are aware. The Hamas 
doesn't have financial problems that they need to depend on 
Iran for financial assistance. They have their own network that 
we have been trying to shut down, a global network for raising 
funds. The Iranians also provide financial support to the 
Palestine Islamic Jihad, which is a straight terrorist 
organization based in Damascus. So it is basically Hezbollah, 
Hamas and PIJ that we are concerned about.
    Mr. Berman. There is a view that has been stated a lot that 
basically President Khatami doesn't really have control of 
foreign and security policies. Is that the Administration's 
view, that others in Iran are in control on those issues; and 
that notwithstanding his perception as a moderate, it has very 
little impact on Iranian foreign policy?
    Mr. Indyk. I think he does control Iranian foreign policy, 
if I can draw a distinction between that and national security 
policy. He doesn't control, as far as we can tell, the national 
security institutions, whether it is the Iranian Revolutionary 
Guards and their terrorist arm, the Al Guds force, or whether 
it is the Ministry of Intelligence, although he does have some 
influence there ,but he doesn't appear to control it.
    As far as how to characterize what is going on there, I 
think we in the West, in the United States, have tended to view 
this as a struggle between the forces of enlightenment and the 
forces of reaction, with Khatami representing the good guys, 
with Supreme Leader Khomeini representing the bad guys, and 
with former President Rafsanjani somewhere in the middle. I am 
not sure that this captures the complexity of the power 
struggle that is going on. There is certainly a dimension of 
that where the conservatives, and the conservative clergy in 
particular, are concerned about the way in which the people 
want greater freedom, freedom of expression, greater respect 
for the rule of law, greater individual freedoms. Khatami, the 
President, very much represents that point of view, but when it 
comes to national security policy, it seems that there is a 
kind of collective decisionmaking that goes on, and he operates 
within the context of this collective decisionmaking. I think 
we have seen considerable change in some areas.
    If you look at the rapprochement within the Gulf in 
particular, with the Gulf Arabs, you see that they have 
attenuated some of their objectionable policies when it came to 
subversion and promotion of terrorism against these countries. 
They have, for all intents and purposes, stopped that, which 
suggests that there is some kind of collective decision in that 
regard.
    I think we have to view it in both respects. What they have 
been able to do in the Gulf is entirely reasonable to expect 
them to be able to do when it comes to other forms of 
terrorism, particularly terrorism against the United States. We 
continue to be concerned about surveillance activities and 
preparations in that regard and when it comes to terrorism 
against the peace process. We are hopeful that they will come 
to understand that the very principle that they have applied in 
the case of reconciliation and rapprochement with the Gulf 
Arabs applies in these other cases as well, and that they will 
stop pursuing terrorism completely.
    Mr. Berman. So it is now fair to conclude that, 
notwithstanding some internal liberalization, what I take to be 
a relatively open election recently and some changes in Iranian 
attitudes toward its neighbors in the Gulf, that on the basic 
points of continuing to develop a nuclear weapons capability, a 
long-range missile capability, and continuing support for at 
least certain terrorist organizations designed to try and 
destroy the Middle East peace process and perhaps some U.S. 
targets as well, those problems that caused our dual 
containment policy to develop are ongoing. Is that a fair----
    Mr. Indyk. That is correct. With reference to dual 
containment, there is a long section that I didn't refer to in 
my opening statement about this. Dual containment is a policy 
that has developed over the past 6 years in two directions. In 
the case of Iraq, we are containing until overthrow. In the 
case of Iran, we are containing until engagement. So we are, in 
a sense, ready to go two different ways when it comes to Iraq 
and Iran, or we are already embarked on different routes.
    Mr. Berman. I understand, and if we were to start 
negotiating or discussing our differences with Iran, U.S. 
policy would not keep us from doing that as I understand it?
    Mr. Indyk. That is right. We have made it clear that we 
would engage with them.
    Can I draw a distinction? I am not so sure how useful it 
is, but I think it is important that in the case of Iran's 
pursuit of weapons of mass destruction, that is something on 
which we don't see any differences between Khatami and 
Khomeini, or, for that matter, between this present government 
and the previous government of the Shah of Iran. The 
explanation for that, I think, is that Iran lives in a 
strategic neighborhood where other neighbors have these 
weapons. Iran has strategic ambitions to be dominant in its 
region, and those are powerful motivators that will affect the 
whole question of whether they continue to pursue these 
weapons.
    Mr. Berman. Mr. Chairman, would you just indulge me one 
reaction to that comment?
    Chairman Gilman. [Presiding.] Without objection.
    Mr. Berman. I have thought for a long time that it is a 
mistake to hinge our policy toward Iran on whether Iran is 
continuing to pursue its weapons program. It is going to do 
that as long as it sees that that is in its interest, it seems 
to me--as opposed to, say, its continued support for terrorism 
and its implacable opposition to the Middle East peace process. 
On the issue of its weapons program, the focus should be on 
those countries that are contributing to Iran getting that 
program, not on Iran's policy. We should be looking at the 
proliferators in our continued and ongoing attempts to impede 
and slow down their ability to get those weapons.
    Mr. Indyk. I agree with you, with one caveat, and that is 
that we do concentrate on the proliferators. As you know, we 
have had some success when it comes to North Korea and China. 
We have had less success when it comes to Russia. We are 
continuing to focus on that and hope that the kinds of action 
plans that have now been agreed on will be implemented, the 
kinds of law that have been passed there will also be 
implemented, and that this will have the effect of controlling 
the flow of technical assistance to Iran for its weapons 
programs. But it still remains important to address the issue 
of how to deal with the implications of Iran's acquisition of 
these weapon of mass destruction. That is an issue we are 
increasingly concerned about because of the way in which it can 
generate an arms race in the region, where countries who feel 
threatened by this development feel it necessary to develop 
their own weapons of mass destruction and missiles and so on. 
That is why we have developed this comprehensive approach that, 
on the one hand, tries to help our allies in the region--
Israel, the Arab countries, Turkey--help them to defend against 
these threats, help them to deter such threats, help to slow 
them down, as you already suggested, and also tries to find a 
way to establish a regional security system in which these 
weapons do not represent destabilizing elements. That requires 
a moderation of the regimes that have these policies as well.
    So, as part of a comprehensive approach, moderating the 
regime in Iran is an important element.
    Mr. Berman. Thank you.
    Chairman Gilman. Thank you, Mr. Berman.
    Dr. Cooksey.
    Dr. Cooksey. It is good to have you here today. The 
Clinton-Carville team was actually involved in the race in 
Israel recently, and I was over there earlier when the campaign 
was going on. My question is, first, what are the 
Administration's plans in terms of what is going to go on with 
Israel and its surrounding neighbors, and are we going to 
impose the Administration's plans for the settlement of the 
Golan Heights issue and some of the other issues there?
    Second, if we are imposing our political values and 
political campaigns on the Middle East countries, are we going 
to continue to impose Americanism on these other civilizations 
that have different cultural values; or are we going to allow 
them to keep the good things about their culture and their 
civilizations as they move into a world in the next century in 
which people's values, lives and freedoms are respected?
    Mr. Indyk. We have long believed that peace in the Middle 
East cannot be imposed on the parties, on any party; that the 
only way to achieve a lasting peace is through a direct 
negotiation between the parties in which they reach agreement 
amongst themselves. We can facilitate that. We can, where it 
makes sense, propose ideas or bridging proposals; but we cannot 
and will not impose our own view of a settlement on the parties 
because that is just a recipe for an unstable arrangement that 
won't last, and we are not interested in that.
    As far as imposing our culture, you raise an interesting 
point about which I think there is a great deal of concern, 
particularly in the Arab world, where it has been present for 
not just for decades, but for centuries. This is the historical 
tension between the West's culture of modernization and Islam's 
values, and it has in many ways been a creative tension. Islam 
has made a tremendous contribution, as you are probably aware, 
to Western civilization, but at times it can be quite 
threatening to them.
    But my first point is that this is not a new phenomenon. It 
doesn't come with the Internet and globalization. It has been 
there for many centuries, in fact, since Napoleon invaded 
Egypt. In the current environment, what we see in the region is 
an effort to come to terms with this, to try to reconcile the 
tension between Islam and the West; and what we do see is 
traditional Islamic conservative societies beginning to change, 
to modernize. The modernization is inevitable as a result of 
globalization, but as the new generation comes forward, we 
see--and that is what we are witnessing now--a generational 
change in the Middle East. We see a greater openness and 
receptivity to the process of modernization, and this is 
occurring at both the levels of the people and the leaders. An 
important phenomenon to note is the way in which the succession 
process is now taking place to the next generation.
    It happened in Israel's democratic process with the 
election of Netanyahu, and Barak is of that generation. It has 
happened in Jordan with the passing of the throne to the next 
generation, King Abdullah rather than the previous crown 
prince, King Hassan, the king's brother. We have seen it happen 
in Bahrain as well with the new emir, the son of the old emir. 
We see an ophthalmologist in Damascus being groomed by his 
father to take over there.
    Dr. Cooksey. Better than a lawyer.
    Mr. Indyk. But it is not just there. King Hassan in Morocco 
is grooming his son to take over. Throughout the Gulf you have 
a new generation being prepared to assume power, and those 
people, coming from a younger generation, most of them having 
been educated in the West, do bring to government a modern 
outlook and an ability to reconcile this tension in a way in 
which the older generation had much more difficulty.
    Dr. Cooksey. Good; that is my concern. I have met people on 
both sides of the issue in the Middle East on the Israeli side 
and on the Arab side, and there are some wonderful traditions 
in all the cultures. I just hate to see us go in and impose our 
political system. There are some bad things about our political 
system, too, sometimes; and I also hate to see us put a 
McDonald's on every corner, because they have some wonderful 
food without McDonald's--in fact I seldom go to McDonald's 
here. I would hope that the good things about their culture, 
their religion, their traditions are left alone. Maybe some of 
the areas that cause some problems and are not ideal in a 
democratic society will improve with time.
    Thank you, Mr. Ambassador.
    Chairman Gilman. Thank you, Dr. Cooksey.
    Mr. Delahunt.
    Mr. Delahunt. Thank you, Mr. Chairman, but I will defer to 
my colleague, who I think was here before me.
    Chairman Gilman. Mr. Sherman.
    Mr. Sherman. Thank you, Mr. Delahunt. Thank you, Mr. 
Chairman. I want to invite the doctor to my district where the 
number of Middle Eastern restaurants nearly reaches the number 
of McDonald's.
    Dr. Cooksey. Great.
    Mr. Sherman. I want to commend the Ambassador for his 
response on the question of loans to rogue states. I know it is 
particularly appealing to think that we are providing food, but 
really, we are just providing money. Even something as 
seemingly innocent as a loan guarantee to Iran to buy food is 
as good as a loan, because if you can borrow money with the 
full faith and credit of the United States, you can get money 
anywhere and at low rates. Money is fungible, and the money 
that Iran doesn't need to spend from its own budget to buy food 
can be used to buy weapons of mass destruction or to fund 
terrorism. I would add for the record, and I don't have the 
citation, that a study of Iraq during the 1980's indicates that 
the money it was able to avoid spending to buy food went 
directly into its weapons acquisition and development programs.
    I particularly want to commend the Ambassador for his 
statements about the 13 Jewish religious leaders from the 
Iranian city of Shiraz. I believe this is the first public U.S. 
Government comment; and that makes sense because, although 
these religious leaders were seized during Passover, over 60 
days ago, many of us have worked behind the scenes. But you 
can't work behind the scenes anymore now that the Iranian 
Government has charged these individuals, rabbis, with spying, 
a capital offense in Iran. Mr. Ambassador, what effort is the 
State Department undertaking or planning to undertake in order 
to secure their release or at least assure their safety?
    Mr. Indyk. Thank you, Congressman Sherman. I know that you 
have been particularly concerned about this and involved in 
trying to resolve the situation. It is, I am sure you will 
agree, a very unfortunate development that the Government of 
Iran has announced that these 13 Iranian Jews from Shiraz and 
Isfahan, some of them teachers, some of them rabbis, have been 
charged with espionage. As you know, we have been actively 
following this since it occurred, seeking to support efforts by 
others to find a solution to the problem, and we will continue 
to do so.
    As you know, we do not have a direct dialogue or ability to 
engage the Iranian Government directly in this regard. We will 
certainly be active in ensuring that those who do have the 
ability to engage with the Iranian Government make this an 
issue. I would repeat again what I said in my opening remarks, 
when I don't think you were here, that we call on the 
Government of Iran to ensure their safety and to release them 
immediately.
    Mr. Sherman. I was here in spirit. I heard you.
    We have recently undertaken an extraordinary effort for the 
benefit of peace and security in Europe. We have reacted to 
human rights abuses and stability threats in Europe with 
greater force than similar threats and similar abuses on other 
continents. With that in mind, have we called upon Europe to 
pressure or even perhaps reduce its economic involvement with 
Iran? I make reference especially to the investment of the 
Total French Oil Company in Iranian oil fields. Is that 
something we are either doing or anticipate doing?
    Mr. Indyk. We have worked closely with our European allies, 
particularly when it comes to counter proliferation, to prevent 
Iran from acquiring the technology capabilities that would 
enable them to advance their WMD Programs. Its the same when it 
comes to terrorism--making sure that this is an issue on their 
agenda when they engage with the Iranians.
    When it comes to economic pressure on Iran, we have been 
less successful. We have tried hard over the years to persuade 
our allies not to engage in normal commerce with Iran. We 
succeeded in some cases in preventing international financial 
institutions from lending to Iran. We have succeeded in holding 
up any kind of foreign assistance to Iran, but when it comes to 
commercial dealings, including foreign credits by these 
countries, we have had less success.
    When it comes to investment in the Iranian oil industry, we 
have taken a very strong position against that, as has the 
Congress. We have opposed that very forcefully. The Congress 
has enacted the Iran-Libya Sanctions Act, which provides for 
sanctions in the case of foreign investment in the Iranian oil 
industry.
    Mr. Sherman. Mr. Ambassador, if I could cut you short 
because I just want to get in one question to which you may 
want to respond in writing later. I do hope in light of Kosovo 
that the European public is urged to make some sacrifices in 
this direction.
    I just want to shift and put in the record a question. We 
have not moved our embassy to Jerusalem or taken other steps 
because we do not want to deal with issues involving final 
status, yet at the same time the President has written a letter 
stating that the Palestinian people should be able to determine 
their own future on their own land, which many have been 
interpreted as leaning in the direction of statehood or at 
least dealing with the issue of final status. In light of the 
Administration already commenting upon final status with regard 
to self-determination, how could it be harmful for the U.S. 
Ambassador to officially maintain a working office in Jerusalem 
or to allow Americans born in Jerusalem to have their parents 
listed on their passport, place of birth, Jerusalem, Israel?
    Mr. Indyk. Do I have a chance to answer that?
    Chairman Gilman. Please, yes, but time is short, so we will 
have to conclude right after Mr. Delahunt. Go ahead.
    Mr. Indyk. In terms of the statement the President made, 
this is not a new statement. This is a repetition of statements 
he has made in the past. He is very careful to avoid endorsing 
Palestinian right to self-determination. I think you, yourself, 
said some may have interpreted it that way, but that is not the 
position we have taken. We continue to argue very forcefully 
and effectively to the Palestinians that the only way in which 
they can pursue their aspirations effectively is through 
negotiations, and that is the exact context in which those 
words you read were made in the President's letter to Chairman 
Arafat. That is the position that we took and succeeded in 
getting him to avoid making a unilateral declaration of 
independence.
    We are entirely consistent in saying that whether these 
issues are Jerusalem or the status of the Palestinian and Judea 
issues, that the parties agreed they would deal within the 
final status negotiations, and that is where they should be 
addressed. We will not seek to preempt the outcome of those 
negotiations, whether they have to do with Palestinian rights 
or Israelis.
    When it comes to the--you mentioned passports, and what was 
the other issue? Can you help me?
    Mr. Sherman. One issue was officially maintaining a working 
office.
    Mr. Indyk. Yes. I just wanted to make clear that we had a 
suite of rooms in a hotel when I was Ambassador that we 
maintained, the Alon Hotel. Now the Ambassador has an apartment 
there for the sake of convenience and security and for 
conducting business in Jerusalem. We use those rooms for that 
purpose, and that has been a long-standing practice. I think it 
started under Ambassador Sam Lewis, so we don't avoid doing 
business in Jerusalem in that way.
    As far as the passport is concerned, it is a very difficult 
issue which I personally feel quite uncomfortable about. But 
again, consistent with our policy of not wanting to do anything 
that would infer that we take a position on this issue, we have 
avoided resolving that.
    I hope, Mr. Sherman, that we will be able to get the final 
status negotiations resumed in short order, and that we will be 
able to resolve these issues in those negotiations. Our 
objective is to try to do that on an accelerated basis, and 
that hopefully a year from now we won't have to have these 
kinds of discussions.
    Chairman Gilman. The gentleman's time has expired.
    Mr. Delahunt.
    Mr. Delahunt. I don't know if I have any time, Mr. 
Chairman, but let me just pose three questions, and if there is 
insufficient time, maybe you can communicate in writing. You 
expressed concern about Iran's position vis-a-vis the Israeli-
Palestinian peace process. Could you describe the level of 
activity that you discern in terms of impeding that process?
    Second, on page 12 of your testimony, you refer to concern 
about the arms race and ballistic missiles and weapons of mass 
destruction. Then you go forward to talk about strengthening 
active and passive defenses and enhancing deterrents. I am just 
somewhat concerned that we may be encouraging or inciting or 
aiding and abetting that arms race. Could you just clarify 
that?
    Again, I refer to page 10 of your testimony which discusses 
how we have worked constructively with Iran in multilateral 
settings on issues of common concern, such as countering the 
spread of narcotics. I applaud that. I would like to hear you 
amplify on that. Who is winning those wrestling matches, by the 
way?
    Mr. Indyk. We are.
    Mr. Delahunt. We are. That is good to hear.
    Mr. Indyk. In terms of Iranian opposition to the peace 
process, I think the best example of the problem here was after 
the Wye Agreement was signed by Chairman Arafat. The Iranians 
came out and attacked him and the Palestinian Authority in a 
very critical way, and I think within about a week of the 
signing of that agreement, a bomb went off in Jerusalem. 
Thankfully, it went off prematurely and only wounded a few 
people, but the Palestine Islamic Jihad claimed responsibility 
for that bomb, and that bomb was aimed at the heart of the 
peace process.
    Mr. Delahunt. You have concluded that was not simply 
because of the link between Iran and the Jihad, but that this 
specific act was supported by Iran?
    Mr. Indyk. Let me be a little careful here.
    Mr. Delahunt. Right.
    Mr. Indyk. What is clear is that Iran is supporting the 
Palestine Islamic Jihad, and the Palestine Islamic Jihad is not 
like Hamas. It doesn't have a kind of political movement behind 
it. It is a straight terrorist organization, and it is financed 
by Iran, and that is the problem. If that bomb had succeeded in 
going off when it was supposed to in the middle of a market in 
Jerusalem, it would have had a devastating effect.
    So we have to ask ourselves, what are the Iranians up to? 
What are they trying to achieve here? It seems from their 
rhetoric as well as their actions that they want to impede the 
peace process. They want to succeed. I believe that, however, 
past terrorist bombings that were backed by Iran did have an 
effect in seriously slowing down the process. It is because of 
these specific issues that we continue to be concerned about 
it. You have a situation where President Khatami, who has 
condemned terrorism, goes to Damascus and meets with these 
groups, and we have to ask ourselves why, is that necessary?
    When it comes to what we are doing on the WMD front, I 
think I understand your point, but what we are trying to do 
here is help countries that are threatened by these weapons, 
and deal with it through defense or enhancing their deterrent 
capability with our own deterrent capabilities. These are 
difficult, complex questions. We are not there yet. We are not 
ready to brief you on exactly what it is we have in mind when 
it comes to deterrents, but the whole purpose is to avoid that 
arms race rather than to fuel it.
    When it comes to counter narcotics, the Iranians have been 
very aggressive in their efforts to stamp out narcotics 
production in Iran and transiting of narcotics through Iran.
    Mr. Delahunt. Have we worked with them in a multilateral--
--
    Mr. Indyk. Through the UNDP, we have. We have supported 
that. We have recognized their efforts in that regard by taking 
them----
    Mr. Delahunt. If I may, Ambassador, have our drug 
enforcement officials, our law enforcement officials had direct 
contact with their counterparts?
    Mr. Indyk. I don't believe so, although I am not exactly 
sure, but that hasn't happened in international fora. I believe 
that there may be some opportunities in the near future.
    Chairman Gilman. The gentleman's time has expired.
    Mr. Secretary, one last question. Is the Administration 
considering ways to extend the life of existing economic aid 
programs for Yemen which are currently operating on residual 
funds in a pipeline, and what is the status of Yemen's request 
that the Peace Corps return to Yemen?
    Mr. Indyk. The answer is we would very much like to. I 
think, Mr. Chairman, how seriously stressed the foreign aid 
funds are, and any help that you can provide us in that regard 
in terms of the moneys available would be much appreciated 
because we do think Yemen deserves support and that the aid 
program should be extended.
    Chairman Gilman. Thank you very much for your time and 
patience, Mr. Secretary. The meeting stands adjourned.
    [Whereupon, at 12 noon, the Committee was adjourned.]
      
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                            A P P E N D I X

                              June 8, 1999

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