UN Extends Iraq Oil-for-Food Deal

The UN Security Council has unanimously approved a compromise deal on Iraq's oil-for-food program that, at least for now, averts a dispute that could have driven a wedge into closer U.S.-Russian ties.

Left dangling, however, were questions of whether and under what circumstances United Nations arms inspectors would be allowed to re-enter Iraq. The answers could determine whether the United States expands its anti-terrorism campaign to include attacks on Iraq, with whom Russia has close economic and diplomatic ties. Such a move would test more than anything the mettle of the U.S.-Russian friendship, analysts said.

The UN resolution, passed Thursday, extends for six months the oil-for-food program that allows Iraq to sell as much oil as it wants if the proceeds are used to buy food, medicine and other humanitarian aid.

The vote also sets the stage for a revamp of sanctions. Russia agreed to give the green light by May 30 to a new list of goods that would require UN review before shipments to Iraq. The United States and Britain had pushed for the list.

In return, the United States agreed to Russia's long-sought demand that "a comprehensive settlement" be found for the sanctions matter.

The deal was struck after discussions earlier in the week between Foreign Minister Igor Ivanov and U.S. Secretary of State Colin Powell.

"I think it's a very important step forward in terms of the unity of the Security Council vis-a-vis Iraq and I think it should send a signal to Iraq that we are determined to press for this program," U.S. Ambassador to the United Nations John Negroponte said after the vote.

"I'm glad we were able to get consensus without a situation where people would be saying somebody won, somebody lost," Russian Ambassador Sergei Lavrov said. "It makes it possible for the international community to continue supporting the Iraqi people and to improve the humanitarian situation."

Iraq said Saturday that it accepted the UN decision.

Russia had threatened to veto the U.S.-British proposal when it first came up last summer and Iraq cut off oil for a month in protest. If Iraq had refused to participate in the program, Russia could have lost the disproportionately large portion of contracts it has in the oil-for-food program.

The money Russia receives through the oil-for-food program, however, is peanuts compared to the money it will get if sanctions against Iraq were overhauled.

Only then can Russia hope to reclaim an estimated $8 billion in debt it is owed by Iraq and make good on trade ties, analysts said. Those links have exceeded $25 million and include contracts worth more than $1.85 billion that were signed this year, according to Deputy Foreign Minister Alexander Saltanov.

Russia and the United States agree that sanctions shouldn't be lifted until Iraqi President Saddam Hussein allows UN inspectors to examine the country's weapons but have disagreed over the circumstances.

Russia is opposed to a U.S.-backed declaration that would pave the way for a suspension of the sanctions if UN inspectors are permitted back into Iraq because it thinks the declaration is too vague. It favors suspending all nonmilitary sanctions shortly after weapons inspectors return, a position Washington has rejected.

"The only way to radically solve the Iraqi problem is to ensure that international disarmament monitoring resumes in Iraq in conjunction with the suspension and lifting of sanctions," Lavrov said. "And the only way to achieve this is to eliminate ambiguities that exist in the [sanctions] resolution."

Most importantly, the UN agreement allows the United States and Russia to postpone any real agreements for another six months.

"Because of what is going on in Afghanistan, we are taking this in stages," said Sir Jeremy Greenstock, Britain's ambassador to the UN. "While everything else is going on, there is no need to have a fight on this."

But it remains to be seen how long the United States and Russia can continue to balance each other's needs -- especially when faced with Baghdad's repeated refusals to allow weapon inspections unless sanctions are first suspended.

U.S. President George W. Bush last week warned that Afghanistan was just the beginning of the war on terrorism and that Saddam will "find out" the consequences if he doesn't permit the inspectors back in.

"If anybody harbors a terrorist, they're a terrorist ... If they develop weapons of mass destruction that will be used to terrorize nations, they will be held accountable," Bush said. "And as for Mr. Saddam Hussein, he needs to let inspectors back in his country, to show us that he is not developing weapons of mass destruction."

Should the United States launch military strikes against Iraq, it would do so at the expense -- and perhaps the loss -- of Russia, whose entire economic investment in Iraq could crumble if the government is overthrown.

"The good vibes coming out of the new U.S.-Russian alliance are not going to migrate into the Iraq debate in any significant form as long the possibility of U.S. military threat hangs in the air," said Andrew Weiss, a fellow at the Council on Foreign Relations in New York.

At the same time, he said, "it would be a very unwise move to sacrifice the support from the international community that the anti-terrorism campaign has fostered for an untimely military strike against Iraq in the absence of clear evidence that Iraq was involved in Sept. 11 or other acts of terrorism."