UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 363-iii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

Foreign Affairs Committee

 

 

Global Security: Middle East

 

 

Wednesday 14 March 2007

DR. KIM HOWELLS MP, SIMON MCDONALD and DR. PETER GOODERHAM

Evidence heard in Public Questions 131 - 208

 

 

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Oral Evidence

Taken before the Foreign Affairs Committee

on Wednesday 14 March 2007

Members present:

Mike Gapes (Chairman)

Mr. Fabian Hamilton

Mr. David Heathcoat-Amory

Mr. John Horam

Mr. Eric Illsley

Mr. Paul Keetch

Andrew Mackinlay

Mr. Malcolm Moss

Mr. Greg Pope

Sir John Stanley

Richard Younger-Ross

________________

Examination of Witnesses

 

Witnesses: Dr. Kim Howells MP, Minister of State for the Middle East, Simon McDonald CMG, Director, Iraq, and Dr. Peter Gooderham, Director, Middle East and North Africa, Foreign and Commonwealth Office, gave evidence.

Q131 Chairman: Good afternoon, Kim, and your colleagues. We know you all very well. Some of you have been here very recently, and we remember a useful session that we had with you during the recess last year.

Let me begin by asking some questions about the current situation in the Palestinian Authority. When do you expect our Government to be able to make a decision on whether to engage with the national unity Government? In that context, Dr. Gooderham told us that the Government were reflecting on the situation and would wait and see. He said that it depended upon the Quartet's policy at that time. Does the Palestinian Government's programme need to simply reflect the Quartet's principles, or should it explicitly meet those principles before we engage with them?

Dr. Howells: Thank you, Mr. Gapes. It is a pleasure to be here again. There were two big, substantive questions there. One I can answer very easily by saying that we are waiting for the Government to be presented, both within the Palestinian Authority and internationally. There has been lots of speculation about how that Government will be made up and who will be in it, and we have certainly maintained our "wait and see" position, because we do not want to commit ourselves until we see what is there. That is the policy that President Mahmoud Abbas wants us to continue, and we have complied with that. How others in the Quartet will see it is another matter, but that is our position.

Whether those involved will have moved forward in the sense that Jack Straw said they ought to so that we could discern the "direction of travel", as I think he put it, remains to be seen. We very much hope that they will. At the moment it is a bit of a big dipper: one moment it looks as though they are heading that way, but the next they seem to be rejecting it almost entirely. "Wait and see" is the short answer to your question.

Q132 Chairman: But on my other question, there is clearly a difference within the Quartet. The Russians have taken different positions already. How confident are you that the Quartet will hold its unity if the programme of the Palestinian Government does not explicitly meet its requirements?

Dr. Howells: I will let Simon and Peter come in in a minute, but from my own knowledge of what has been said at Quartet meetings, I am pretty confident that the Quartet will hold together, if only because there is no other show in town at the moment. Of course, we very much hope that it will. We think that it is the proper basis, if not the only basis, for moving forward towards a better Middle East peace process than we currently have, so we are very much in favour of maintaining that unity.

Dr. Gooderham: I think that that is right. I presume, Chairman, that you are referring to Russia as the member of the Quartet that has had contact with Hamas, including quite recently. It has consistently signed up to the Quartet statements relating to the formation of a Palestinian Government, and as far as we understand it accepts the proposition that the international community should wait and see the shape of the new Government and how they are comprised, and give them an opportunity to demonstrate through their actions what their platform comprises. That is our understanding of what all members of the Quartet have agreed to.

Q133 Chairman: How important is the Mecca agreement between Hamas and Fatah? Could there not be a problem if we, the Quartet, regard the new Government as not going far enough but at the same time President Abbas is tied to, and wishes to maintain, the principles of the Mecca agreement?

Dr. Howells: Yes, I think that that is a fair description of the dilemma that we would find ourselves in if we could not see that any moves had been made towards recognising the Quartet principles. We welcome very much the Saudi Arabian brokering of the Mecca deal, and on the other hand we recognise the worries that the Americans and the Israelis have about it. There has been a general welcome within the Middle East for the deal, and it is a very significant step forward. It is important, for example, that we do not let the gloomy clouds obliterate the fact that there is relative peace at the moment in Gaza. That is a very important step forward and I think that the continuing ceasefire between Fatah and Hamas is a consequence of that arrangement.

Q134 Chairman: Can I put it to you that that ceasefire and the agreement in Mecca have only come about because the Saudis-you have referred specifically to the Saudi Government and have been positive about their role-have been prepared to engage not only with Fatah but with Hamas? That agreement would not have been possible without the Saudi engagement with Hamas. Is there a contradiction between supporting what the Saudis are doing to get progress while holding back from our own engagement to facilitate progress in other areas because we have a policy of no contact with Hamas?

Dr. Howells: I think, Mr. Gapes, it might be stating the obvious to say that we are not the Saudi Government or the Saudis. They have a different standing in the Middle East from ours and a different attitude towards this problem. We are glad to see that they have taken on this new diplomatic initiative. They are very energetic. We have asked them for a long time to take a more energetic role in trying to help the peace process along, and they are doing it at the moment. Our political objectives might ultimately be the same as theirs-two stable states living alongside each other-but we have a different way of coming at it. We are glad to see that the Saudis have taken this initiative.

Q135 Richard Younger-Ross: One of the Quartet difficulties is that Hamas should recognise Israel. Can you explore what you would accept as recognition by Hamas of Israel? Is it explicit or can it be implicit?

Dr. Howells: Well, I would certainly like to be explicit, of course, but I am sure that in the world of diplomacy there will be implicit recognitions that, although it might sound like a contradiction, the rest of the world can recognise. When that judgment is reached is a moot point. It has to be recognised by the Israelis; they have to believe that whatever Hamas says means that Hamas recognises the right of Israel to exist. Hamas has said lots of contradictory things up until now. When I was in Ramallah in the autumn, Mahmoud Abbas told me that he thought that there were three Hamases: a kind of provisional Hamas in Gaza, which was saying one thing and behaving in a certain way; people on the West Bank who had been elected to represent the Palestinian people, who were saying something else; and hard-line elements in Damascus, who were saying something completely different. I do not think that it is a simple situation at all. In so many ways, they have to resolve those differences.

Q136 Richard Younger-Ross: You said that this has to be acceptable to Israel. Are you saying that Israel has a veto over the Quartet's policy on this point?

Dr. Howells: Certainly not, but we cannot force Israel to recognise a meaning that we might put on the words or anything that Hamas might want to say.

Q137 Richard Younger-Ross: We have a position where the Iranian President has called for the destruction of Israel. Most Arab states do not recognise Israel, but we talk to them, negotiate with them and provide them with aid. We are asking Hamas to build up further than those other states.

Dr. Howells: No, I do not think that that is true. You are quite right about the public statements of most of the states in the Middle East. I sometimes find it frustrating when I am out there to talk to states, because they will say things to you privately that they would never say publicly. They recognise that Israel has the right to exist, and they certainly do not call for Israel's obliteration, as Ahmadinejad has called for it. In a sense, that comes back to your original question about how we interpret the way in which Governments in the Middle East interpret their relationship with Israel. It is not an easy thing to judge.

Dr. Gooderham: I would draw a distinction between recognising the right of Israel to exist, which is what the Quartet principle is about, and recognising Israel in a diplomatic sense-in other words, having an embassy, an ambassador and so on in Tel Aviv. Virtually every Arabic Government recognises the right of Israel to exist. They accept the proposition that the solution to this conflict is a two-state solution. It is really only Iran and Libya that still do not accept the two-state solution. Therefore, I think that there is a distinction. Hamas has not yet graduated to the first of those two propositions, let alone the second.

Q138 Richard Younger-Ross: We talk to Iran and Syria.

Dr. Howells: We have diplomatic discussions consistently. We have an embassy in Tehran and one in Damascus and we talk to them. Very recently, the Prime Minister's foreign affairs adviser went out to Damascus to speak to the Syrian President.

Q139 Richard Younger-Ross: Moving on, the PLO, not Hamas, is charged with representing the Palestinians in the peace talks. Why does the international community not engage with Hamas, if not in peace talks, at least in talks about peace?

Dr. Howells: You mean why do we choose to speak to Fatah or to the PLO rather than Hamas? Fatah or the PLO's policy is to live in peaceful co-existence with Israel. That is why we talk to them. That is not Hamas' position. For example, until very recently, it has been-I do not know whether it is at this very moment-funding suicide bombers who have been murdering innocent Israelis. We do not think that that is an organisation with which we can have those kinds of discussions.

Q140 Richard Younger-Ross: I seem to remember that that was not Fatah's position when we both started in politics a long time ago.

Dr. Howells: Well, Fatah has changed. We all change, don't we? Or we should.

Q141 Richard Younger-Ross: Which is perhaps why we need to engage with it.

Finally, Khaled Meshal, the political leader of Hamas, recently visited Russia, even though the Quartet's principles have not been met. Is that likely to undermine the Quartet's position?

Dr. Howells: I do not think that that will undermine the Quartet's position, but I cannot answer for Russia. The Committee will have to try to get Mr. Lavrov here or someone else. Russia makes those kinds of decisions itself. Since that visit, it seems determined to remain part of the Quartet and to subscribe to its joint statements.

Richard Younger-Ross: We may get a chance to talk to him later this year.

Dr. Howells: Very good.

Q142 Mr. Illsley: May I ask a few questions about the financial situation regarding the Palestinians? If the Quartet decides not to give financial support to the national unity Government, will the UK encourage the European Union to continue the temporary mechanism until an acceptable Government are in place?

Dr. Howells: Yes, I believe that we would. The situation would have to be very different from the current one for the Quartet to say that there should not be financial assistance for the Palestinians. As you know, in the financial year 2006-7, the European Union and the UK gave more money to the Palestinians than ever before.

Q143 Mr. Illsley: What were the goals of the UK's financial and diplomatic boycott of the Palestinian authority? Did we make any progress with what we sought to achieve with that boycott?

Dr. Howells: I think that we made progress. Pressure has been put on Hamas to understand that it can be elected by a democratic process. We have acknowledged that that was a proper democratic process and that it won that free and fair election. However, responsibility comes with that. It has to recognise that Governments have no automatic duty to pay money into organisations that support, for example, suicide bombers. I would find it very difficult to explain to the House of Commons why we were giving hundreds of millions of pounds to Hamas, when at the same time, they were using it to fund the families of suicide bombers. That is not a viable position.

Q144 Mr. Illsley: Given that the incoming Finance Minister of the Palestinian Government has said that the financial system is in a complete mess, if the Government decide to resume aid directly to the Palestinian Authority, how will we guarantee that the money will be used as is intended?

Dr. Howells: There are some very stringent financial monitoring arrangements in place that are associated with the temporary international mechanism or TIM. One of the upshots of that has been a report-by Oxfam, I think. It said that bank charges are too high in the way that that money has been handled. They are high because there are five separate security checks on who receives the money to make sure that it does not go into the hands of terrorists or groups that fund terrorists.

I am pretty confident that those substantial sums-more than €600 million this year, for example-are going to organisations that are not funding terrorism and, almost as importantly, that are not corrupt. I saw one of the most shocking things that I have seen when I went to Ramallah for the first time in 13 years. It had a new outskirt, which consisted of luxury apartments. When I asked who had paid for them-everybody had told me before I went that the Palestinian economy had collapsed-I was told that they had been built by Fatah members from the kickbacks given by the Fatah leadership. I must say that they were a very dismal sight.

Q145 Mr. Heathcoat-Amory: Can I again ask you about contacts with Hamas? Last month, the Prime Minister said that he wanted to advance this issue and would contemplate discussions "even with the more sensible elements of Hamas". The Russians have spoken to Hamas, and it appears that we would contemplate doing so, if only to elements within the organisation. Have any such discussions taken place?

Dr. Howells: Not that I know of. Peter, do you know of any discussions?

Dr. Gooderham: No, we have had no discussions with Hamas.

Q146 Mr. Heathcoat-Amory: So we have not taken forward the Prime Minister's initiative. Why is that?

Dr. Howells: As I interpret the Prime Minister's analysis, those elements within Hamas would have to be part of the national unity Government and subscribe to a general statement by that Government that would go some way at least towards the Quartet's principles. If that happened, we could contemplate talking to Hamas.

Q147 Mr. Heathcoat-Amory: Joining a unity Government and, do I also infer, recognising, although not diplomatically recognising, the right of Israel to exist? Would that be an adequate step?

Dr. Howells: Yes; if we believed that Hamas had made that very big step, we would have to look very seriously at talking to Hamas.

Q148 Mr. Heathcoat-Amory: Thank you; that is helpful.

Can I ask you about the slightly wider issue of the standing of British diplomacy and reputation in the Middle East, particularly the Arab world? It has been said to us in evidence sessions that great damage was done in the Arab world by our refusal to call for a ceasefire early on in the Lebanon conflict last year. Do you now regret the position that the Government took and do you think that it has damaged our standing and therefore our standing as a peacemaker?

Dr. Howells: No, I certainly do not regret it. We were in a position where we tried very energetically to get a cessation of violence that would mean that the warring factions would not have or use the opportunity to rearm and start fighting again a short while later. That was my biggest concern when I went there in the middle of the war in July. It seemed obvious to me that unless we could get all the players to agree that there ought to be a proper settlement, and the sovereignty of the Siniora Government-the democratically elected Government for the whole of Lebanon-was seen to be real, we would simply be allowing both Hezbollah and the Israelis to rearm and to start fighting again only a short time later. The very fact that the arrangement that was arrived at has held is quite an achievement.

Q149 Mr. Heathcoat-Amory: But the delayed ceasefire was seen at the time as giving Israel an opportunity to do its business in Lebanon before a ceasefire. The outcome was completely the opposite, but that must have undermined our credibility. It was known to be the American position, and we backed President Bush very strongly, almost instinctively. That must undermine our status as an independent force, willing to mediate between the factions. Do you agree, in retrospect, that that damaged our reputation and that we are now seen to be part of the American position on the Middle East?

Dr. Howells: No. I hate to disagree with you, but I do not think that that is true. I spend a lot of time in the Gulf at the moment, and I shall be interested to know what impression you come back with at the end of your trip out there. I do not pick that up at all. I think that there is a great deal of respect for Britain's position. It is recognised that we worked very hard to try to get the United Nations and all of the players in the Middle East on side to achieve a permanent ceasefire in Lebanon, and they have been very supportive of our subsequent position in trying to ensure that UNIFIL was properly expanded and deployed properly across Lebanon. I do not pick up the sense that people do not want to talk to us as much as they did previously as a consequence of what happened in Lebanon.

Q150 Mr. Keetch: So what sanction or penalty have we imposed on the state of Israel in the past five years?

Dr. Howells: I am not sure. I take it that you are implying that we ought to be putting some sort of sanction on the state of Israel.

Mr. Keetch: Yes.

Dr. Howells: Well, I am not sure that that would help in any shape or form.

Q151 Mr. Keetch: We will not talk to Hamas on the one side, we are cutting off aid to the Palestinians on the other-

Dr. Howells: No, we are not cutting off aid. We have given more aid than ever.

Q152 Mr. Keetch: We appear all the time to be punishing and putting sanctions on one side of the argument, yet on the other side there is the state of Israel. Phase one of the road map requires Israel to halt settlement expansion and dismantle illegal outposts. Israel has not done any of that. You have been very vociferous in complaining about that, but what have we done to punish Israel or to persuade or cajole it into meeting its side of the road map? We allow Israel to continue bombing the Lebanese, we do not call for an early ceasefire, we do not talk to elected politicians. Where is the balance?

Dr. Howells: You used the expression "persuade or cajole". We certainly try to do that-we do it all the time, especially on the question of the expansion of settlements, the continuation of illegal settlements and the route of the barrier. We protest about that constantly, and argue that it is having a very bad effect on the peace process, especially in-this is what it is called, although I do not know whether it actually exists-the Arab street. It is very important that we should try to engage Israel on those issues. However, I cannot see what good putting a set of sanctions on Israel would do to our attempts to build a peace process.

Q153 Mr. Keetch: Only in that there is a widespread view in the Arab street, as you called it. We have all be there many times in the past few years and we are going again. A widespread view in the Arab street-if I may follow the lines of Mr. Heathcoat-Amory-is that we are simply doing what the Americans tell us to. The Israelis do whatever they want to do, but we do not consider sanctions and we still keep up a dialogue, yet whatever the Palestinians, Lebanese and Syrians do, and whatever the Iranians say that they want to do, we still keep talking to the Israelis and never consider punishment for them. That seems to be an imbalance that is felt throughout that street. I think, as do many Committee members on this side of the table, that that imbalance does British diplomacy no good.

Dr. Howells: Well, I am not sure what good it would do to British diplomacy for us to start putting sanctions on Israel. We already consider very carefully any components that we may sell to the Israeli armed forces or security forces, for example. We are very careful about this. We do not treat Israel as we might treat another member of the European Union, or many other countries. We are very careful about the way in which we trade with Israel, and so on, and we are vociferous in our criticisms of the way in which we think that it has been breaking UN Security Council resolutions. Having said that, I have to reiterate that the object of the exercise is to try to get to a peace process that is going to bring real change there. If we take our eye off that ball, I do not think that we are ever going to get there. I would say that placing sanctions on Israel would do nothing to help that.

Q154 Mr. Keetch: But Israel does have a special EU trade relationship, which we as a Government support. There were suggestions that, during the crisis during Lebanon last summer, American arms were coming in through US bases in Britain. Can you categorically tell the Committee that during that crisis no arms for the use of the Israeli defence forces came in on US aircraft coming through British bases?

Dr. Howells: We are not aware of any arms coming in or going through British airspace. If they did, we do not know about that. We take a very dim view of special cargoes landing. We should have been notified and we were not notified. We looked at this matter thoroughly when it first arose and did not find any examples of this-certainly not under a Bush presidency.

Q155 Andrew Mackinlay: Following up my two colleagues' point, putting aside sanctions, which we have talked about, there seems to be an absence of admonishment when things go wrong. I can illustrate that by mentioning the footage that we saw on worldwide television of Israeli soldiers pushing a young adolescent in front of them when doing house raids. Have the British Government flagged up any concern or admonishment regarding that incident? If not, why not? To what extent have we done so? This goes to the heart of the Arab street. It is not just a question of sanctions. We do not seem to condemn and deplore even that kind of apparent wrongdoing. I want to know, from you, to what extent we have done that.

Dr. Howells: We constantly remind the Israelis that we place human rights at the heart of our foreign policy. They know that. We try to convince them that we take a dim view of the abuse of human rights, in whatever form it takes-and sometimes it has taken the form of British citizens being shot in and around the West Bank. We take a very dim view of that and we urge the Israelis always to understand that those kinds of actions do nothing to enhance the reputation or the cause of Israel in the Middle East, or anywhere else, if it comes to that. However, I cannot give you an answer on that specific case, because I do not know if our ambassador has spoken to them. I have not spoken to them about this.

Q156 Andrew Mackinlay: I am grateful for your last point. Perhaps they could be told, because constituents raise such matters. It is not that far-fetched. Perhaps you could find out from the ambassador and let us know, please.

Dr. Howells: Yes, I will undertake to do that.

Q157 Mr. Horam: The heart of the peace process in Palestine is still the road map, even though it is some four years old. As Mr. Keetch pointed out, we have not even got to stage 1. The Israelis have still not frozen settlement building and so forth, so we have not got that far. Yet at the same time, Condoleezza Rice is asking that the Israelis and President Abbas engage in what she calls endgame negotiations in order to provide some sort of political horizon for the Palestinians and an idea of what the state would look like. That seems a bit odd, frankly. We have not got to stage 1 of the road map, but we want Israelis and President Abbas to talk about the endgame. That seems rather peculiar diplomacy to us.

Dr. Howells: I can see that there is a lot of frustration, and I am going to give you my instinctive response. I do not know, and I have not spoken to Condoleezza Rice about why she has been using such language recently. Perhaps Peter could come in in a minute and say something about that.

Whenever I have gone out and spoken to Palestinians or Israelis about this, I have not got the sense that there is a step-by-step approach. The rejection of such an approach is at its most extreme, I think, in Israel. I suspect that six or seven years ago, or maybe even 10 years ago, they decided that they would start to think about unilateral action as opposed to the process until then, which had been a case of saying "You do this, we'll do that" in a succession of steps. I suspect that the decision to build the barrier was the first unilateral step. Getting out of Gaza was probably the second, and I think that if Prime Minister Sharon had lived-he is dead, isn't he?

Simon McDonald: He is still alive, in Tel Hashomer hospital.

Mr. Keetch: It is an easy mistake to make.

Dr. Howells: It is, and I just made it.

The third step would probably have been an order saying, "You get west of the barrier and the wall, or you are on your own, mate" as far as the west bank was concerned. I know that Mahmoud Abbas was very upset about this. He saw the process as short-circuiting the recognised negotiating system that had existed until then. Although within Israel there was general applause, especially over the decision to get out of Gaza, it certainly was not shared by Fatah and the PLO.

The mood at the moment is one of saying, "Well, we know about the road map, but we don't know how you get to the end if you don't know what the end is." That has probably been provoked by the argument over the route of the barrier. It has become a burning issue that neither the Palestinians nor, apparently, the Israelis, can define where their frontiers are going to end up. That was always seen as part of the final negotiations. Instead it has been pushed to the forefront of the process in a way that makes people feel very frustrated. I suspect that what Condoleezza Rice is trying to do is recognise the high ground that she thinks everybody should aim to reach.

Q158 Mr. Horam: The shining city set on a hill, maybe?

Dr. Howells: It could well be. She is then trying to say, "Okay, we have got this mechanism, this vehicle for getting there"-the road map-"but we would like a clearer picture of what exactly we are trying to get to."

Q159 Mr. Horam: But here again, Israel is causing problems. As I understand it, the Prime Minister refuses to talk about any form of final status. That makes it difficult to outline what he envisages.

Dr. Howells: I think that you have put your finger on the big difficulty. I have tried to explain why I think she said what she said, but that is going to cause tensions within Israel and it is certainly causing tensions within the Palestinian Authority. Simon was our ambassador, of course, and could perhaps tell you a bit more about this.

Simon McDonald: Where shall I start? One thing I should like to say at the beginning is that there is a presumption in what the Committee has said so far that Israel was to blame for what happened last summer. Okay, that may be the final conclusion, but we need to bear in mind how it started. It started with the kidnap of two Israeli soldiers from Israeli territory-Regev and Goldwasser-and the bombing with Katyusha rockets of northern Israeli towns. Israel reacted to that; the campaign went on a long time and most of the television pictures were, indeed, of what Israel was doing in southern Lebanon. That was undoubtedly going on, but all the time Hezbollah was attacking Israel by rocket fire from Lebanon.

The casualties were, of course, very unbalanced: about 140 Israelis died and more than 1,000 Lebanese. One reason for that was that more than 1 million Israeli citizens were spending every single night in bunkers-more than one sixth of their population. So Hezbollah was trying to kill Israelis throughout, but was less successful because of the action that the Israeli Government were able to take. You can conclude what you want, but you should bear in mind the actual start of that war and how it progressed.

Throughout that time, as the Minister says, I was ambassador and in touch with the Israeli Government about the proportionality of their response and about certain targets that they were going for. Several times, I woke up Prime Minister Olmert's chief of staff in the middle of the night because my colleague in Beirut was in touch, as something was happening and we wanted to protest about it. We thought that that something needed to stop, and I said so to Mr. Yoram Turbowicz, who passed it on to Prime Minister Olmert.

Q160 Mr. Horam: Thank you very much for that, but it does not explain the relative reluctance of Israel to get involved either in what Condoleezza Rice is calling the endgame negotiations or, indeed, in getting to a clear stage of the road map.

Simon McDonald: On that, Israelis always point out that the very first line of the road map calls for a cessation of hostilities against Israel. So, if you say that it has not got started, their rejoinder is, "No, because the Palestinians have not done the very first thing that is required".

Q161 Mr. Horam: A fair point. Finally, can I tackle this from a different angle? I think that we are all pleased that the Saudi Government have got more involved in all of this-Mecca, and so forth-with their own plan, which I think they first aired in 2002. As I understand it, there will be a meeting later this month in Riyadh to discuss that Arab League initiative further. The difficulty over this, from Israel's point of view, is the right to return. That is the sticking point for them and if that was dropped-a big thing, but suppose it were dropped none the less-would the Arab League proposals then be agreeable to the British Government and to the parties?

Dr. Gooderham: We already welcomed the Arab League initiative, even in 2002. We thought at the time-

Q162 Mr. Horam: Including a right of return?

Dr. Gooderham: It has always been understood that that was one issue that will have to be addressed in any final status settlement or negotiation. It would be for the parties themselves to determine how that principle should be applied. What has been interesting in recent days has been the signals that the Israeli Government have been sending about an apparent readiness on their part to look again at that initiative. Prime Minister Olmert quite recently said things in an interview suggesting that there were positive elements in the Beirut initiative, as it is known.

Therefore, there is obviously some speculation about what might happen at the Arab League summit in Riyadh later this month. To our knowledge, there is no plan to amend that initiative or to rewrite it in any way, but we would naturally hope that the Arab leaders gathering for that meeting would be ready to endorse it again and to reiterate their support.

Q163 Mr. Horam: What of that, if there is no possibility of its being accepted by Israel and they are not prepared to rewrite it?

Dr. Gooderham: I do not know that there is no possibility of it being accepted by Israel. The sense that we have is that there might be a greater readiness now on the part of the Israeli Government to look at the initiative. Clearly, that is not to suggest that they will swallow it whole, but they might be ready to recognise it as a significant document and initiative, and to recognise the desire on the part of a large number of Governments in the region to see a solution to the conflict and to be ready, as part of that solution, to recognise Israel in a diplomatic sense as well as an existential sense.

On the point about Condy Rice and her initiative, I do not think that the US or anyone else is under any illusion. As Simon said, the first phase of the road map is still there and needs to be implemented. Frankly, neither side has implemented the first phase, but we continue to do what we can to encourage them to take the steps needed to get beyond the first stage. However, Condy Rice's idea is that it ought to be possible, at the same time, to embark on a dialogue-she has been very careful with her terminology. She has not talked about negotiations and has avoided the term "final status". Instead, she has talked about a dialogue between the United States, Israel and the Palestinian President in order to establish the principles needed to underpin the so-called political horizon.

The thinking is that if they could get to that point, they would strengthen significantly President Abbas and what he stands for-the two-state solution. That would enable him to demonstrate to the Palestinian people that there is a prospect of a settlement of the conflict through a dialogue and subsequent negotiations. That is what Condy Rice has been trying to do, and we applaud her for her efforts. We think that it is indeed worth while.

Q164 Mr. Hamilton: I am grateful to Mr. McDonald for at least correcting the balance and giving us some of the background. However, Minister, do you agree that the disengagement plan to which you referred earlier, and to which Ariel Sharon and his successor, Ehud Olmert, tried to stick-clearly, it is now dead-resulted from the Palestinians promising to respond to each concession given by the Israelis with a further concession and a move towards peace, but never delivering that? I am sure that Israelis have told you that. They would say, "Every time we had an agreement with the Palestinian Authority, we kept our side, but they did not keep theirs. That is why disengagement started." I agree that disengagement was not a very helpful policy, and it has clearly now ended.

My other question concerns the road map. We would like the road map to work. Some would say that not only have we lost the map, but the vehicle has broken down completely. It never really got off the ground. It seems to me that the Beirut proposals from the Arab League and the Geneva accords, which were track 2 or behind-the-scenes negotiations-whatever you want to call them-between Yossi Beilin, Yasser Abed Rabbo and many other players on both sides, form a sounder basis for a final settlement. Why do the British Government not support or give more credence to the Geneva accords, even though they were quite unofficial and were not Government-to-Government?

Dr. Howells: If I can answer the last question first, I am not sure that we are trying to demean those efforts at all. We recognise their importance and have played a part in trying to widen discussions on the road map in order to incorporate those ideas and initiatives. I think that I said at the very beginning that we welcome the role that, for example, Saudi Arabia is now playing.

On disengagement, unilateralism and where they have come from, that is a very big question. When I have spoken to Israeli politicians, they certainly describe the failures of previous undertakings in the way that you did. What surprises me is that when I speak to Israeli academics, they describe it in those ways as well. I think that I told this Committee before about my surprise when I had dinner at an old left-wing kibbutz-I know that none of us is really left wing anymore-and was told reluctantly, "Well, life is a lot easier since we built the barrier." It was depressing, in a way, because it meant that the old dreams about being able to live side by side, with Palestinians and Israelis working together, seems now to have been abandoned. If it has been abandoned unilaterally by the Israelis, I suspect also that it has grown out of the sense of disillusionment that Mr. Hamilton described, about the failure of previous undertakings. I do not think, by the way, that it is only on one side. I think that it is on two sides.

Q165 Mr. Hamilton: In the end, we all know what the final status will look like. A clear picture has been drawn by the Arab League, Geneva and many academics in Israel and the Palestinian territories of what the final settlement will look like. The problem is getting there from where we are. What more can we do?

Dr. Howells: I very much welcome our Prime Minister's Los Angeles speech, in which he raised the issue and said, "Look, we've got to do much more about this." I do not know about you, Mr. Hamilton, or about the experience of the Committee, but wherever I go, whether in Bangladesh or Mauritania, the issue comes up constantly. It has a kind of totemic significance way beyond its importance in terms of the size of the area, the population or anything else.

It is a cause that we must address, and I think that we have put a lot of energy into it since the Prime Minister made his speech in LA. The fact that he made it there was very important, as it was in America. It was a wake-up call to the American Administration that they hold the key in so many ways to being able to move the peace process forward, and that they should be doing more. I think that they are doing more now.

Q166 Sir John Stanley: Minister, is it the British Government's policy that Israel should return to the pre-1967 borders?

Dr. Howells: Broadly it is, yes.

Q167 Sir John Stanley: Are the British Government exerting every possible pressure on the Israeli Government to try to achieve that?

Dr. Howells: I will give you an example. When Simon was the ambassador there, I went out to him on one of my visits and discovered that our embassy was the only embassy that was pressing the Israelis on consular issues generated by the route that the barrier had taken. Lots of other people say things, but they do very little about it.

Simon and his colleagues, on a day-to-day basis, were trying to handle cases, putting them to the Israelis and saying, "You are making life extremely difficult for our citizens and nationals who happen to be married, for example, to Palestinians. Imagine what you're doing to the psyche of the Arab street," to use that cliché again. It is something that we have pushed them very hard on.

It is made doubly difficult by the fact that the Israelis talk as well about the border being a legitimate one that they could live with. I do not hear that so often now, by the way. I think that they are pretty resolute about incorporating bits of land that are Palestinian in order to expand settlements or build a defensive wall around settlements that exist already. As your question implies, it is a complex issue, but one that we would return to time and again. We would say that yes, those are the proper borders and the ones that they should recognise.

Q168 Sir John Stanley: Can you point to any specific step or agreement that the British Government have secured with other countries in the last year or so that endorses the principle that Israel should return to the pre-1967 borders?

Dr. Gooderham: The European Union regularly issues statements to that effect when Foreign Ministers meet to discuss the Middle East peace process.

Q169 Sir John Stanley: Yes, I am aware of discussions about the Middle East peace process but-no doubt you can help the Committee-I am not aware of specific initiatives in which Britain, along with the EU, has said that Israel must return to its pre-'67 borders, achieved in the last year or so. But I would be delighted to be helped if you can point to the relevant documentation.

Q170 Mr. Moss: I want to follow up the debate we have just had and pick up on the Minister's definition of the barrier and the implications of one or two points that followed. The Israelis would say that, as a result of Sharon's decision and the party of Kadima and Olmert's success in the elections, which was supported by a significant majority in Israel, that it is a security fence. I have seen it; it is a huge wall in parts of Jerusalem and Bethlehem, but elsewhere it is a fairly small fence. The Israelis would argue that as a result of erecting that fence, the number of incidents involving suicide bombers has been reduced dramatically, therefore they support it for that reason, and that reason only.

From what the Minister was saying-I would like him to confirm it-can I take it that the British Government believe that by building that line or security fence, the Israelis have now predetermined their vision of where the border will be in the future? Or is it their view that the Israelis are still prepared to negotiate about a final border, and that the fence is in reality purely a security issue at this juncture?

Dr. Howells: The problem is that temporary structures can become very long-lasting ones. I find it all too easy to believe that once a fence or a barrier has been put up, the chances are that it will remain there for a very long time, and that is a hindrance to negotiations. We are not saying to the Israelis, "You shouldn't build a barrier or a fence." We are saying that it should be along the '67 borders, along that green line. That is where it should be; it should be on it or behind it. The incorporation of Palestinian land, as is recognised by the rest of the world, does nothing to enhance Israel's reputation as playing fair, and ultimately detracts from Israel's security, because it becomes a running sore for so much of the Arab world that another piece of land has been stolen, that something outside Bethlehem has gone or a part of east Jerusalem has been cut off from the West Bank. That is a very important issue not only for the Palestinians, but for a lot of Arabs around the world.

I can certainly understand why the Israelis have done it, but I would argue that the route they have chosen is not the right one. It contradicts and breaks the spirit and the rule of Security Council resolutions, and moreover it is probably an incentive, to some elements at least, to think of other ways of attacking Israel which perhaps we have not seen so far-Qassam rockets, for example. We are talking about a very small area; the distance from Jerusalem to the sea is nothing. When I first went to Israel you could see the Palestinian border when you landed on the aircraft; it was almost at the other end of the runway. The Israelis always felt very vulnerable when the border was there.

By the way, the fence is not a fence you or I might put up at the end of our gardens; it is very sophisticated.

Mr. Moss: I have seen it.

Dr. Howells: It is a very sophisticated fence. There are a lot of sensors and an access road that runs alongside it, which enables people to move very quickly if the security is broken on the fence.

Q171 Chairman: We have to move on. I want to ask you some questions about Egypt. First, may I ask for your assessment of how important Egypt is today in the Middle East peace process?

Dr. Howells: Egypt is as important as any country in the Middle East and more important than most. It has a very special relationship with Israel; it has direct access to Gaza, and it is a powerful spokesman for the Middle East. In all the meetings that I have been to as part of the EuroMed Barcelona process, Egypt has been the most vocal, if unofficial, spokesman for the Arab countries that are represented there. It is a very important country.

Q172 Chairman: President Mubarak has been in office for a long time. At the last election, in 2005, he was re-elected for his fifth six-year term. There were also parliamentary elections at that time. There seems to have been a step back from the hopes that people had that Egypt might be opening up. One academic has suggested that "There is no prospect of significant political reform in Egypt in the foreseeable future. It's dead in the water. Western efforts to shape reform in Egypt have been a fiasco." Would you agree with that?

Dr. Howells: I would agree with some of it, which might surprise you. Last December, President Mubarak announced constitutional amendments, some of which we could recognise as real steps forward towards a more democratic, open society. Some have been interpreted as a step backwards.

What is extraordinary about Egypt is that the most progressive elements among the chattering classes, or the political class, are very worried about the prospect of greater democracy. They are very worried about the distinct possibility that the extreme Islamic parties could make great progress if the elections were freer and fairer, and that the secular state of Egypt, as it exists at the moment, would come under great threat.

Q173 Chairman: Is that partly as a reaction to the west, particularly the US? Is there a sense that the ordinary person in the Arab street is rejecting democracy as an imposed value and that changes are being forced from outside?

Dr. Howells: No, I do not get that impression at all. I think that the Egyptians are very keen on democracy and want more of it, but the political class has reservations about it. There are political classes all over the world that have reservations about extending democracy, as we have seen in the past couple of weeks. The implications of the debate about democracy in Egypt have to be recognised outside Egypt: the political class is worried that it could be handing over the reins of power to religious parties.

Chairman: We shall move on to some other countries in the region-Lebanon and Syria first of all.

Q174 Mr. Keetch: I suppose that there is no place for a democracy that produced a result that some people in the west were not be terribly happy with.

I turn to Lebanon, particularly the appalling assassination of Rafik Hariri. The UN Security Council and the Lebanese Government have set up a special tribunal to investigate the death of the former President, following on from Security Council resolution 1664. There is a widespread rumour-let me put it like that; some of us are off to Lebanon and Syria in a few weeks-that Syria was somehow involved. There will be an attempt to understand exactly who was involved. If the tribunal discovers that Syria was directly involved, will we, as a permanent member of the Security Council, wish to do something about that? I hate to mention the word "sanctions" again-you may fear that I will want to impose sanctions on everybody-but if the fingerprints of the Syrian Administration are on that assassination, what would you seek to do about it?

Dr. Howells: I do not know what the status would be of those accused of murder, because that is what it was. You have only to go to Beirut and you can still see the hole in the ground where the former Prime Minister was blown up-along, by the way, with 20-odd other people.

Dr. Gooderham: Yes.

Dr. Howells: It was an horrendous murder. I have been told that it was one of the biggest ever peacetime explosions-if you know what I mean by peacetime in Beirut. It was a massive explosion. The tribunal was set up was because of the difficulty that the Siniora Government and their predecessor Government had in trying to conduct any kind of inquiry into the assassination, the murder, while Syria had such overweening power in Lebanon; to put it mildly, they were obstructive.

At the time, the international community believed that Syria's fingerprints were all over that assassination. We would not want to take any position on that before the tribunal completes its investigations, but it is important that the tribunal should be allowed to complete its investigations. What worries me, and it worries a lot of people, is that Hezbollah is probably implicated in the assassination; we do not know that for certain, but there is a good chance that it was-or certainly some Hezbollah operatives, because they are very good at setting off roadside bombs and explosions, as our troops know only too well down in Basra. They decided to do their best to disrupt that investigation and to ensure that it came to nothing. That is at the heart of their attempts to destabilise the Siniora Government and to try, as they see it, to correct the imbalance of the Lebanese constitution, which gives them a certain proportion of seats in the Lebanese Parliament. There are some deep and dark forces at work here.

Q175 Mr. Keetch: Let me be quite clear. If the tribunal were to find conclusively that the fingerprints of Syria were on the assassination of the former Prime Minister, we as a permanent member of the Security Council might not press for but we would certainly be prepared to consider some form of action against the Syrian Government?

Dr. Howells: I am going to ask Peter if he can tell me what Security Council resolution 1595 lays down on what should happen to the guilty people.

Dr. Gooderham: It is important to remember that resolution 1595 established an international investigative commission. I guess that the commission has been at work for well over a year or perhaps 18 months. That is proceeding, and the investigative team's latest report is due to be made this week to the Security Council in New York. We are not expecting that it will deliver any bombshells; it will report steady progress, but it needs to continue the investigations. That is going ahead.

The idea for some time has been that, in addition, there would need to be a tribunal-a tribunal, as it were, that was owned by the Lebanese Government and therefore under Lebanese jurisdiction that would take receipt of whatever evidence and information the investigative commission has found once it concludes its investigation. That tribunal would then determine whether there were individuals who would need to be brought to justice. In the event that Syrian individuals were among those that the evidence had brought to light, the understanding is that they would need to stand trial and be brought to justice under the terms of the tribunal.

The difficulty is that the tribunal has yet to be established, because once the Lebanese Government had worked with the UN, taking advice from it on how best to set up the tribunal, and once the Government brought that agreement to a decision, certain members of the Government voiced their opposition to it and withdrew from the Government, and that is what precipitated the crisis.

Q176 Sir John Stanley: Is it not contradictory for the British Government constantly to seek to defend their interventions in the Middle East, particularly in Iraq, in terms of the expansion of democracy and at the same time, as in Lebanon, to refuse to have any dealings with those who are elected under the democratic process, such as Hezbollah's democratically elected MPs?

Dr. Howells: In my trips to Lebanon-I am going out again shortly-I met the Foreign Minister, who is essentially Hezbollah, is he not?

Dr. Gooderham: He is linked to Hezbollah, but not actually a member.

Q177 Sir John Stanley: You did not meet anybody who was a Hezbollah MP, but only someone who was linked to it. As I understand it, that was a key Foreign Office distinction.

Dr. Howells: I think that you will find when you go there, Sir John-I am sure that you know it already-that definitions and parties are tenuous, to say the least.

Mr. Keetch: Look at the Lobby later and see.

Dr. Howells: It is a most extraordinary political arrangement out there, I think. To say that someone is clearly Hezbollah or Amal is not easy. I certainly have not met anyone who openly describes themselves as Hezbollah, but I was told in no uncertain terms by our embassy out there that "That guy is Hezbollah."

Q178 Sir John Stanley: Should not the British Government be more honest than they are, if I may say so? Should they not state the reality behind their stance, which is that the British Government are in favour of democracy, but only providing that the people who are elected are acceptable to us? That is our position, and why should we not be honest enough to say that?

Dr. Howells: Because I do not think it is the truth. We talk to the Government of Prime Minister Siniora. We are good supporters of them. Frankly, any Government have to decide who they talk to when it comes to a Government composed like the Lebanese Government. I am not particularly keen to go and talk to someone who might be involved in undermining the democratic process in Lebanon. Hezbollah, as far as I am concerned, is a puppet organisation run and owned by the Iranians with the complicity of the Syrians. It did the Syrians' business when the Syrians, like gangsters, were bleeding that country white while they occupied it. It is as if the American Government were speaking to Gerry Adams and not Margaret Thatcher at the height of the IRA troubles-

Richard Younger-Ross: They were.

Dr. Howells: They were not, as a matter of fact. Lots of people were, but they were not necessarily the American Government. It is perfectly acceptable for us to choose to speak to people who we consider are performing a constructive part in a democratically elected Government in Lebanon. I am not going to go out of my way to talk to people who are trying to subvert the democratic process so that they can enhance the standing and position of an extremist Islamist organisation that does not value democracy at all, as far as I can see.

Q179 Sir John Stanley: I have no difficulty with the refreshingly candid stance that you have given. That is similar to the policy that the British Government followed towards Sinn Fein before the real peace process started. To return to what I said at the beginning, would it not be more candid for the rest of the British Government to follow in your footsteps, Minister, and to stop making tub-thumping, highly generalised claims that all our policies are justified in democratic terms, when our policy is-entirely defensibly, in my view-that we are only prepared to support some parties that are democratically elected, but not all and sundry? Would that not be the honest thing to say?

Dr. Howells: I hope, Sir John, that we are saying that. I have found myself in some very difficult circumstances. For example, at dinners at embassies around the world I have suddenly discovered that somebody happens to be sitting next to me who is from the respectable end of a death squad from somewhere. The ambassador has, with the best will in the world, invited that person along because he thinks that, under the new democracy, they will become the new Government. Well, yes, that is great. I am sure that we should be talking to such people at some point, but I do not want to talk to them.

Chairman: I would be interested to know what the diplomatic reaction is to that remark.

Q180 Mr. Keetch: Do you want to write to us on that?

Dr. Howells: I certainly do not.

Q181 Mr. Moss: Would the Minister agree that there are a considerable number of external actors in the Lebanese crisis? Are those external players helpful or unhelpful?

Dr. Howells: They are very unhelpful, Mr. Moss. We are extremely worried about the continuing role of Syria and Iran, and the Ahmadinejad Government-particularly the way in which they have rearmed. Hezbollah is not rearming and from our intelligence it seems to be back to the pre-war levels as far as rockets and other weapons are concerned. They have come across the Syrian border and we have called upon the Syrians many times to police that border properly and, if anything, the Syrians have done the opposite and have threatened retaliatory action if there is a serious attempt made at policing it. That is a serious situation and is a real violation of the sovereignty of Lebanon and its Government.

Q182 Mr. Moss: Is our intelligence accurate on that particular facet?

Dr. Howells: Obviously, we cannot comment on that in detail.

Q183 Mr. Moss: Every time I ask a question you do not answer it. We are going there in a week's time.

Dr. Howells: We are pretty confident about our intelligence. It will be interesting to see what you find when you go there.

Q184 Mr. Moss: We will not be looking for weapons, I can assure you.

Dr. Howells: The problem, Mr. Moss, is that one of the most disturbing things that I found when I was there was that Hezbollah is completely ruthless about where it positions its weapons, rockets or mortars. A picture may be taken of every child that is killed as a consequence of those weapons and sent around the world. During the times I have been to Basra, where I have seen Hezbollah tactics being used successfully, I have noticed that rockets are fired out of Shi'a flats and are aimed at killing our soldiers in the Basra palace compound and other places such as the Basra air station. Those firing at our soldiers know damn well that, unlike some people, we do not send up helicopters and strafe the entire area or bomb it in the hope that we might hit some of those teams. We do other things, but we believe that every time a civilian is killed under those circumstances, 10 more enemies have probably been created. Such a tactic is a Hezbollah tactic, which from its point of view has been very successful. It does not care how many Lebanese or Palestinians die as long as it looks like the great heroes of resistance against Israel.

Q185 Mr. Moss: Under the UN resolution, the UN force is supposed to be disarming Hezbollah or at least preventing a build-up of armaments in the southern zone. Is that happening to your knowledge? Are they doing that job? Also, are the newspaper reports correct that Hezbollah is digging in north of the Litani river, which is its next fall-back position from the border?

Dr. Howells: We are depending on you to come back with that intelligence, Mr. Moss. We are very worried about that as Hezbollah seems to be preparing for another war.

Q186 Mr. Moss: My final point is that Arab, European and American diplomats have been told that some of the money going into Lebanon for the Siniora Government is being hived off, particularly by Sunni or al-Qaeda backed units. Do you have any information on that? Is that accurate?

Dr. Howells: I do not have any information on that.

Dr. Gooderham: Certainly we are very confident that the money that the British Government have provided to the Lebanese Government has been properly disposed of and is properly accounted for. Rigorous systems are in place.

Q187 Mr. Moss: So there is no evidence of arming Sunni groups to counter perhaps the Shi'a Hezbollah?

Dr. Gooderham: Not as a result of international assistance provided to the Lebanese Government, no.

Q188 Mr. Moss: But otherwise there might be?

Dr. Gooderham: Again, we have no evidence of that.

Dr. Howells: There is a lot of money slopping around there, Mr. Moss, as I think you will find when you go out there. Across the whole region there are sources of money that everyone knows are available for arming militias and groups. That is from Waziristan and right across the Middle East.

Q189 Mr. Illsley: I turn to a more benign area, Dr. Howells-that of Jordan. This Committee hosted a meeting back in November last year, when King Abdullah made a speech to both Houses and spoke of his fear of being surrounded by civil war in three separate territories-Iraq, Lebanon and Palestine. On 8 March, he spoke to Congress and suggested that the resolution of the Israel-Palestine situation was perhaps more important than resolving the Iraqi situation. Is Jordan an important player in the peace process? If so, how important is it? Does Jordan have a role in resolving any of these crises?

Dr. Howells: That is a good question. I have no doubt whatsoever that Jordan is a very important player. It is also a country that has taken in a huge number of refugees from Iraq, and is still taking them in-probably 700,000 of them. It is not a rich country; its economy is vulnerable, and it plays an important role in terms of being a kind of prime interlocutor both for the rest of the Arab world and for Israel and Palestine. Some 1.8 million Palestinians live there, which I think is about half the population.

Dr. Gooderham: More than half.

Dr. Howells: So it is more than half the population of Jordan. It often has to walk on eggshells, diplomatically speaking. It is also a key player in counter-terrorism in general. It suffered badly from the attentions of al-Qaeda and of Zakawi who, before he was killed, planned and carried out the dreadful bombing of the hotel on that wedding day.

Q190 Mr. Illsley: It is interesting that when King Abdullah was speaking in the United States on 8 March, he spoke to Congress about the involvement of the international community in moving forward. I seem to recall that we were here four years ago, just before the Americans moved into an election phase, and the chances were that there would be little international action in the run-up to the elections. The next elections will begin perhaps later this year or early next year. Do you share that concern-that there could be a period of substantial inactivity on the part of the United States in the run-up to the forthcoming elections?

Dr. Howells: I hope not. We need the United States to be very heavily involved, not least because it has such a powerful economy and because it is the most powerful nation militarily. Everybody wants it to be involved, and I was very glad that King Abdullah chose to speak to Congress. It was an important move on his part, and I hope that the American political Administration has taken his message on board.

Q191 Mr. Hamilton: Can I move on to talk about Iran? It is an increasingly important player in the region. I wonder whether you would comment on some of the points that we heard last week when we took evidence from both Professor Anoush Ehteshami and Dr. Ali Ansari, both academics. Professor Ehteshami told us that "Iran sees Britain much less as a European Union power than as a transatlantic actor", and that is "what causes Tehran to give weight to Britain's voice internationally."

As far as international engagement with Iran on the nuclear issue and regional security concerns is concerned, Dr. Ansari said "that the Iranians see everything in a holistic way. I do not think that they separate those issues...The tendency of western analysts to categorise and compartmentalise things does not work" in Iran.

We are a key interlocutor with Iran on the nuclear issue. Given the interrelation between the nuclear issue and regional security, how do we see our diplomacy with Iran reflecting that interrelation? In other words, how can we separate the two?

Dr. Howells: I will preface my attempt at an answer by saying that wherever you go in the world, and certainly wherever you go in the Middle East, everybody tells you that the best diplomats are Iranian. By the best, they mean the trickiest.

Q192 Mr. Keetch: Is that what a good diplomat is?

Dr. Howells: They have at least a 3,000 year history of doing that. Was it Brad Pitt who stopped them in their tracks in a film the other day? I cannot remember now, but they have a got a very long history and occupy a very important place in the Middle East. They are probably, along with Turkey, one of the emerging great powers in that area. We have got to understand that. They do not consider themselves to be Arab, and they resent the notion of being lumped in with the whole of the Middle East-I have heard that from them first hand.

Iranians are very proud of their history and if you do not understand that history, you will not understand them. They do not think that we respect them enough. When I spoke in Vienna with Dr. el-Baradei recently, for example, he said that the Iranians have a thirst for knowledge. His explanation of why it is such a ramshackle economy and such a poor country is because they have been stymied by a series of largely self-induced, but sometimes externally induced disasters. He is probably right-Iran should be much wealthier than it is. It should be a country identified with, if you like, the causes of modernisation and globalisation. They certainly see themselves in that context, but they act very differently. For example, the whole business of how they enrich uranium hexafluoride and use centrifugal cascades-a very difficult technology-is, in some ways, indicative of that attitude. They want to be seen as a country that is capable of handling this kind of engineering. They use the rhetoric of global warming at the moment. They say, "Sure, we have plenty of gas and oil, but we want nuclear energy because we want clean energy in the future." It is a very interesting ploy.

Iranians probably do see us as being different from the rest of the EU. They certainly see us as a kind of bridge to the Americans. They have an incredible love-hate relationship with the Americans-and there is love as well as hate in it, by the way. If we forget that, we forget it at our peril. So, yes, I think they probably do view us as a unique and independent entity-that does not mean that they like us much.

Q193 Mr. Hamilton: Shame, they ought to. If my statistics are correct, I believe that their economy has shrunk by 30% since 1979, which would be unthinkable in UK terms. I am told that one of the causes is that although they are sitting on a sea of oil and gas, they do not have any petrol refining plants. They can therefore export oil at a high price, but have to pay a higher price to re-import the refined product.

Finally, do you think that there can really be security and peace in the Middle East without engaging the active co-operation of Iran?

Dr. Howells: I think we can probably go a long way even if Iran remains as it is at the moment, although I do not think that Lebanon can go a long way. Iran is an increasingly disruptive influence inside Iraq-I choose the word "increasingly" intentionally, although it also has enough political nous to know that it has to get along with other neighbours, and it is trying to do just that. It has a kind of multi-pronged approach. Its relationship with the Afghanistan Government concerns us greatly, for example.

We have our own relationship with Iran on its eastern border, because we are keen to work with the Iranians to stop heroin coming into Europe. There are 3.5 million opium and heroin addicts in Iran, and the Iranians have been glad to co-operate with Britain to try to do something about stopping the big drug-smuggling gangs pushing their armed convoys across the eastern border.

The Iranian relationship with Russia is different from that with other members of the Quartet. After all, Russia is building a nuclear power station for the Iranians down at Bushehr and the Iranians are not about to endanger their relationship with Russia.

On the first part of your question, the economy is shambolic. Iran ought to be a much bigger oil and gas producer than it is. I think that the Iranians know-certainly the merchant class does-that unless they can start to forge better relationships with countries that ought to be their major trading partners, they will not get the investment that they need to rejuvenate the industrial base, which in turn is needed to pay for rebuilding of infrastructure. Iran is getting poorer, not richer, at a time when the price of oil is at unprecedentedly high levels.

The bit that always intrigues me about Iran is that we want it to be much more engaged, because western Europe needs Iranian gas very badly. We need to break the Russian monopoly on supplies of gas to western Europe. That is a pretty controversial statement to make, but the Russians need rivals. As long as there is an absence of effective sanctions that would drive Iran to the negotiating table, and as long as there are people who are prepared to dangle a bit of support to Iran now and then, the position of President Ahmadinejad and of the theocracy is strengthened, and as a consequence the country remains poor.

Q194 Mr. Hamilton: Surely sanctions would have the same effect.

Dr. Howells: I think that strong sanctions would certainly drive the Iranian Government to negotiate more seriously than seems to be the case at the moment. The issue is a complex one, however. Who would be prepared to go along with sanctions, where would they come from, and who would make the decisions?

At least 300,000 and possibly 400,000 Iranians, many of whom comprise the merchant class of Iran, have moved to Dubai.

Q195 Mr. Hamilton: Four hundred thousand?

Dr. Howells: Yes indeed-they are a huge part of the Dubai population, and they are clever people. Iran is not North Korea. It is an ancient trading country with a sophisticated merchant class, and the members of that class are not about to see their profits completely squeezed down as a consequence of future sanctions-they want to be able to do business.

Chairman: Can we switch focus?

Q196 Sir John Stanley: May I turn to Iraq, Minister? I have with me the UNHCR figures from its publication on refugee global trends for 2003 and 2005. They show that the number of refugees originating from Iraq at the end of 2003 was estimated at 368,000. Two years later, at the end of 2005, that figure had risen to 1,785,000. In other words, there was an increase of 1.4 million in the number of refugees from Iraq in just two years flat. As we know, those refugees are basically those who were able to get out-who could afford to get out-and they represent in many cases the very capable, talented people whom Iraqi society needs.

Is not that an absolutely catastrophic humanitarian disaster, and not just for the individuals concerned? It is for them, because in most cases they have had to leave all their property and assets behind and they have come out with nothing, but is not it also an absolute disaster for Iraq itself? It flows directly from our regrettable failure to be able to provide internal security in that country. Can you hold out any prospects that that trend will be reversed, or is that now just pie in the sky?

Dr. Howells: I entirely agree with your analysis, Sir John. I think it is a disaster and it was largely a hidden one until very recently. Last week, I met the secretary-general of the International Committee of the Red Cross, and he described to me some of the most obvious implications of the huge movement of refugees. If they leave the country, they are going mainly into Jordan and Syria, in very large numbers. The international community is looking at how it can best support those people, but you are right to say that the cause is the lack of security inside Iraq. That is what must change.

Simon represented us, for example, at last Saturday's Iraq neighbours meeting in Baghdad, and we made it very clear that we considered that the provision of good security inside the country must be not on a sectarian basis but on an inclusive basis and must look after every part of the Iraqi population. Can that be done? I do not think it is pie in the sky.

I understand that you have had discussions with leading Iraqi politicians over the past couple of days. We are watching carefully the result of the so-called surge in Baghdad. We know from our experience in Basra that the movement out of the city has stopped and we are seeing a return to Basra even of some Sunni families. I remember that about four months ago the Kuwaitis were very worried that they were receiving Sunni families into Kuwait, but now they tell me they are going back, although that is Basra. It is a city of 2.5 million people, or whatever it is. The situation is not the same in Baghdad, from where most of the refugees appear to originate, so it is an extremely serious problem, but there is no way around it really. The only way of countering it is to improve security within the country, and especially within the provinces of Baghdad and around Baghdad.

Q197 Sir John Stanley: You say that it is not pie in the sky to expect the humanitarian disaster to be reversed. Do you agree that we are dealing with a fearful combination of two quite separate factors that come together and produce the same result-refugees? We are dealing with religious fanaticism, which makes people leave because they are the wrong branch of the Muslim faith in the wrong area. Coupled with that is the second huge pressure, which is the force of naked criminality-gangsterism and the kidnapping of people for money. That is out of control also and it is coupled with huge, widespread corruption, so you cannot trust the police forces and you cannot trust the judicial system to provide you with the protection that we assume is in place in a country such as this. When you take those two factors together, do you still feel confident that the trend will be reversed?

Dr. Howells: Yes, Sir John, I think it will be reversed eventually. Iraq is not the only part of the world that faces these tremendous difficulties; they are most acute in Iraq at the moment, but they are by no means unique to it. I have been very concerned recently, for example, by Sri Lanka, where 1 million people are displaced and 60,000 people have died as a consequence of the war that is going on there. The fighting is going on now, and people were killed just up the road when I went there the other day. At its basis is a sectarian divide, and that sectarianism grows partly out of religion and partly out of the desire for land, and we have to find a way through that.

What I refuse to do is say that the problem is insoluble, because it is soluble. It is going to take a big push in Iraq, and ultimately the problem is going to be solved by the Iraqis themselves. Prime Minister al-Maliki and his Government have to take the question of sectarianism far more seriously than they have, and they have been told that openly, including by Simon, among others. You cannot have a police force that is infiltrated by Shi'a militias and becomes a death squad. When I was in Basra, the then police chief told me that half the murders there were committed by men wearing police uniforms, some of whom were policemen and some of whom had just got hold of police uniforms.

You are quite right to talk about criminality and gangsterism as part of the problem. They say that it is the same in Gaza, by the way: criminal elements there, as you will find when you go there, are responsible for a good part of the violence. We experienced the same in Belfast-very much so. Basra is a lot like Belfast was: people are making fortunes smuggling petrol and oil; they run protection rackets and extortion rackets, and criminality is an important element. The people of Iraq have suffered particularly. In Basra, somebody said to me, "We had only one thief three years ago. Now, we've got 3,000 thieves."

The question of policing and law and order is of enormous importance, and it is one of the issues that we have addressed more seriously. We have been trying to persuade all our EU colleagues and everyone to pay more attention to it and to put more money and resources into training police and training and protecting judges. We have a huge problem because of the number of people who have been picked up by the Americans as a consequence of their search. We do not know how many there are-some people say 13,000 and some say 17,000-but they will need to be tried and either sent to jail or released. That means that we have to have many more judges than there are at the moment, and that requires a big training programme. I very much hope that our allies will help to pay for that.

Q198 Andrew Mackinlay: Following on from the refugee crisis in Iraq, to which Sir John referred, you will be aware that I take a particular interest in the Iranian exiles in Camp Ashraf. I do not want to keep raising the issue like a long-playing gramophone record with you, but I am concerned because I recognise that Iran clearly has to be a player in any possible solution on Iraq and the wider region. There is a danger that it will demand that the people of Camp Ashraf be surrendered to it and/or that their status as protected persons under the fourth Geneva protocol be abrogated. I am nervous that, albeit unintentionally, they could be made the Cossacks of our generation. I would like an assurance from you, Dr. Howells, that we will not abrogate the commitment, which has been reinforced by the United States command out there, that those people are protected persons and that that will endure.

Dr. Howells: We have no intention of abrogating any agreements about those people. The MEK is proscribed under the Terrorism Act 2000. Its self-imposed exile to Iraq in the 1970s and its support for Saddam Hussein, including during the Iran-Iraq war, means that it is not very popular inside Iran-not even among the Iranian opposition. To answer your question, we have no intention whatever of turning over anyone to the Iranian Government; we believe that they should be treated humanely and that their human rights should be protected, and I have every confidence that they will be. Some have gone back to Iran already, as you know.

Q199 Chairman: Finally, I want to ask some questions about the wider perspective and what is happening in the region as a whole. Do you believe that there is arc of extremism in the Middle East?

Dr. Howells: I believe that we have underestimated the power of ideas. There is a notion that if you can raise people's standards of living or introduce models of western democracy, everything will ultimately be okay. I do not think that that is true. I think that some strands of Islam-some parts of Wahabi Islam, some parts of Deobandi Islam, or Islam in southern Asia-cannot be reconciled. They consider themselves to be what one author described as "God's terrorists". They believe that it is their duty to challenge those who do not agree with them and to say, "Join us or die." That is a fair choice: that is how they see it.

It goes back a very long way. We lost two and a half armies in Afghanistan, and part of the reason for those defeats was that those who set up what is now the great Deobandi Islamic school of thought believed that they had a holy duty to kill Christians. Now, you try reconciling that.

Q200 Chairman: You are talking about Islam in the round. One point that I would make is that we have Shi'a Islam, and extremist groups within it such as Hezbollah, and linked to them the Iranians and the Sunni extremist groups that are killing Shi'as in Iraq and would do so elsewhere, as well as the power struggle between different Shi'a groups that we face in Basra. Is it not an oversimplification and therefore unhelpful to use generalist concepts like "arcs of extremism"?

Dr. Howells: Yes; I think it is unhelpful. It neither defines the problem nor does it help us come up with solutions. I have all kinds of meetings in this country and elsewhere as part of our Muslim outreach programme, and there is a great deal of resentment about the generalisations that we tend to indulge in. People want the respect of it being recognised that they have a vision of the world and a set of values that should not be smeared with the activities of fanatics and murderers.

Q201 Chairman: The Prime Minister said recently that he wanted to create an alliance of moderation against the arc of extremism. I am interested to know which countries you think are part of that alliance of moderation. For example, would it include Saudi Arabia? As your human rights report states, it has an appalling human rights record, but do you regard it as a moderate country?

Dr. Howells: I can only answer that by saying that what I understand the Prime Minister to mean when he talks of moderation includes stability. If you are asking me whether I think that that mode of Government or that set of beliefs is the right one, I would probably say that I do not, because I am a heart and soul democrat-and a first past the post man at that.

Q202 Andrew Mackinlay: And a member of the Flat Earth Society.

Dr. Howells: I have to have it proved to me that the world is round-I am certainly a sceptic.

What I am saying is that one of the earlier questions was about Egypt and its worries about what the Muslim Brotherhood might do, for example. It was a real shock to me when I came into this job and went to Algeria for the first time. I could not understand the coolness and reluctance of the Algerians to embrace every idea that we had. Stupidly, I had not read about what had happened to Algeria since 1989. I had not realised that 160,000 Algerians had died at the hands of terrorists as a consequence of the Algerian Government's refusal to recognise the outcome of a democratic election and was not aware of the tactics that were used by some reprehensible people and some pretty awful groups.

Those lessons are not lost on the Middle East. They look at those examples very carefully and might say, "Give us the stability that we have now rather than move on." However, that cannot be accepted as a static position that will last for ever, because sometimes those countries are run by appalling fascist dictatorships like Saddam Hussein and his gangsters.

Q203 Richard Younger-Ross: I am pleased that you disagreed with the Prime Minister's use of the phrase "arc of extremism" on the BBC.

Dr. Howells: Did I disagree with it? Surely not.

Andrew Mackinlay: Only a few more weeks to go.

Dr. Howells: This man is a cynic.

Andrew Mackinlay: I am getting ready for office.

Q204 Richard Younger-Ross: Dr. Anoush Ehteshami told the Committee that a regional forum between all the countries in the Middle East, similar to that of the Helsinki process, could help to reduce regional tensions. Is that something you would agree with, and if so, is it something that has been discussed with your European colleagues? If it has not yet been discussed with your European colleagues, is it something that you might discuss with them?

Dr. Howells: I am going to bring Peter in on this in a minute, but I would like to tell you that the bane of diplomatic life is the proliferation of conferences and groupings.

Q205 Richard Younger-Ross: Tell us about it.

Dr. Howells: It is absolutely true. It has come to a point where one organisation has only to have the notion of an idea that a conference would be good, and suddenly you have a new grouping. I groan sometimes at that because it is a kind of fog that rises and gets in the way of addressing some of the most basic and simple questions. If you do not address those questions, you tend to stumble around diplomatically and internationally.

There are groupings in the Middle East at the moment-the Gulf Co-operation Council is the most obvious one, and the UN-that I would like to see play a much stronger role in all of this. We had to look to the UN where Lebanon was concerned. There was no one else around, really. There was talk of NATO doing a job, but we looked to the UN to provide the lighthouse for everyone. I tend to suspect that there are enough organisations there.

I am glad to see that the Arab League is becoming more involved and that it seems to have reconciled its differences with some countries in the Middle East, and that Saudi Arabia has decided that it is a great force and should be a force for good in the area-diplomatically as well as in maintaining stability. Things are changing in the Middle East and I am encouraged by the fact that it is Middle Eastern countries themselves-Gulf countries-that are saying, "Look, this instability has gone on for long enough, as have the fears and worries that we have about sectarian divides and the influence they might have on our societies and economies". Such opinions have generated some positive action in the region, which is a good sign. Perhaps Peter could say something about the notion of a much wider body.

Dr. Gooderham: I think that is an idea that has been out there for quite a while and there are obviously parallels with the Organisation for Security and Co-operation in Europe, but there are also big differences in terms of those two regions. I agree with the Minister that there are existing organisations that we hope are already starting to play a significant role and we hope will go on to play a more significant role in their respective areas of responsibility. To go from where we are today to the creation of the kind of organisation that would cover a whole region is quite ambitious and we would need to take some steps before we get to that. However, as a long-term vision that could help to stabilise the region, an arrangement of that nature would clearly be beneficial.

Q206 Richard Younger-Ross: Dr. Anoush told the Committee that such an idea rang a bell in the sense that we are being told that the EU and Britain in particular could play a positive role. When I visited Jerusalem and Bethlehem, I recollect meeting an elderly Palestinian lady who said, "I'm glad that the British are here, because they created this mess." There is a will among some people to engage with us.

Dr. Howells: Iraq was created in one weekend in Cairo in 1921 by Winston Churchill.

Chairman: Before we go too far, I wish to get Eric Illsley in to ask a question that he should have asked but did not. It relates to Iraq.

Q207 Mr. Illsley: Are you in a position to tell us anything about the security conference that took place in Baghdad recently? Did any prospects arise from those talks -perhaps a future dialogue between the United States and Iran?

Simon McDonald: I attended the Iraq neighbours meeting on Saturday 10 March in Baghdad with Dominic Asquith, the ambassador. The meeting was an achievement for Foreign Minister Zebari, who has been trying to get Iraq's neighbours to come to Baghdad to discuss the range of issues that Iraq has had with them for some time. He finally succeeded last Saturday and got not only the neighbours but key international organisations to attend, such as the Arab league, the UN, the Organisation of the Islamic Conference and the P5 of the UN.

There was a good discussion and all the neighbours said the right things about the importance of security and stability for Iraq and their role in that. They agreed to set up three working groups: one to focus on security, one on refugees and one on fuel imports. Membership will be confined to the neighbours group, but advice will be drawn in from others, including the United Nations. There is a real programme of work there. They also agreed that there should be meetings at a higher level, and we expect a meeting at ministerial level perhaps as early as next month.

As you have said, Mr. Illsley, there has been a lot of interest in the media about what was happening in the margins. At the end of the conference, the US ambassador, who was leading the US delegations, said that he had had businesslike, constructive and positive working relations with the Iranian and Syrian delegates across the conference table. He did not actually make direct contact with them, but the basis for that was laid. They were working in the same room, and in the margins of the margins there was more progress with the Syrians than with the Iranians. The Syrians indicated that they would be happy to talk and for the Americans to go to Damascus. They would prefer talks to be the whole agenda, but they would understand if the focus was specifically on Iraq in the first place.

Q208 Sir John Stanley: Some of the Committee were in Turkey in January, and we found real nervousness and anxiety among the Turkish Government about the degree of autonomy being sought by the Kurds in Iraq. Do you think that it will be possible to satisfy the Kurdish community in Iraq as to the amount of autonomy they have from the Iraqi Government, while avoiding serious destabilisation of the Kurdish areas of southern Turkey and perhaps triggering some very unwelcome responses by the Turkish Government?

Dr. Howells: That is an important question. When I was in Irbil, in Kurdish-administered Iraq, I noticed that the Kurdish Administration were very careful always to describe themselves first as Iraqi and then as Kurds. The best proof of their intention to remain part of Iraq is the way in which they have melded the very good hydrocarbon law that they drafted in the Kurdish area with the hydrocarbon law that is being worked on in Baghdad for the whole of Iraq. Those involved have come together pretty well on that, which I take as an encouraging sign.

Interestingly, as we were trying to leave Irbil, members of the Administration were waiting for a delegation from Basra. I had been in the oilfields in Basra, talking to the people who worked in them, and they were very frustrated with the Baghdad Administration's inability to get investment into the oilfields of southern Iraq. I heard an exact echo in the Kurdish area, where there was frustration at the inability of the Government in Baghdad to understand and act on the requirements and aspirations of southern Iraq and the Kurdish area. However, I never heard anybody in either area talk about the break-up of Iraq. I found that encouraging. Everybody seemed to recognise that it is vital that the integrity of the borders remains and that Iraq continues as a country, rather than becoming two, three or four countries.

So I can understand your point. This has long been a problem for Turkey-I believe that it goes back to 1921 as well.

Simon McDonald: The Mosul agreement of 1926.

Dr. Howells: This is why the Foreign Office is the best in the world. I am much more confident about the country staying together than I am concerned about its breaking up, and that is good news for Turkey and indeed Iran and Syria, which have substantial Kurdish populations. However, that means the Baghdad Government must be inclusive. That is why everybody-Peter, Simon and everybody else-has been working so hard to convince Prime Minister al-Maliki that his prime task must be to have an inclusive Government, not a Government who in any way encourage sectarianism.

Chairman: On that note, I thank you, Minister, Dr. Gooderham and Mr. McDonald. This has been an extremely valuable session, and we have covered a lot of ground. As usual, we have had some frank and revealing answers, and we are very grateful.