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Executive Summary
Inside the White House — Many reasons to keep an eye on the Saudis … Is Saudi Arabia directing Bush administration’s Middle East policies? … Olmert says he doesn't care about U.S. Jews' opinion re: dividing Jerusalem and more … Russia says no to Barak on Iran … Saudi Arabian Foreign Minister Saud al-Faisal says no peace until Israel withdraws from Arab territories … Saud didn't shake hands with any Israeli during Annapolis conference … Livni berates Arab delegates for shunning her… Saudi and oil producers' financial influence … Lack of comprehensive U.S. energy program is filling coffers of Russia, Saudi Arabia, Venezuela and many Middle Eastern countries … Major Canadian-U.S. oil pipeline survives explosion, showing fragile infrastructure
News Briefs — Pundits say the alternative agenda in Annapolis was to isolate Iran and its ally Syria … Others say Annapolis sends the message that the U.S. is back in control in the Middle East … Putin continues shrewd moves to retain and maintain power in Russia … Pakistan in disarray as more challengers arrive against Musharraf … China rebuffs U.S. request to port in Hong Kong … Is your bank failing — you may be the last to know …
Connecting the Dots — Bush dresses terrorists in tuxedos while endangering America's prophetic future

Executive Summary
There is a flurry of activity surrounding the Middle East as the Annapolis Summit closed with no real movement in any direction except that the two sides will continue meeting with the goal of a Palestinian state by the end of 2008. Meantime, it's as if every possible avenue of Middle East disruption has been presented to the world within 48 hours of the summit.

Headlines abound with news of Iran, Russia, Syria, the mortgage crisis, and religious leaders seeking common ground with Islam, near-record oil prices, record dollar declines, and so on. The world has entered a period of disruption because it seeks to divide the holy land, especially Jerusalem, by giving parts of it to an anti-God death cult called Islam.

Inside the White House
by Bill Koenig

The big story this week was the Annapolis summit between Israel and the Palestinians and 50 or so other nations covered by 1,000 world media members.

President Bush's mantra of "Israel and Palestine living side by side in peace and security" was stated over and over for the world leaders, the world media and the world to hear. Bush and Rice's legacy is riding on the covenant land of Israel.

There was a lot of optimism amongst the participants and media, but I don't understand that with so many non-deal positions regarding Israel's boundaries, the borders of a Palestinian state in Judea and Samaria, the future boundaries of Jerusalem, the Palestinian refugee situation and requiring Israel to evacuate unauthorized settlements and stop settlement construction. Not to forget two very weak leaders in Ehud Olmert and Mahmoud Abbas.

Regardless, U.S. Secretary of State Rice was all smiles at the State Department on Monday evening, at Annapolis on Tuesday and in the White House Rose Garden on Wednesday when Bush, Olmert and Abbas had what could very likely be, their last photo opportunity.

Israeli-Palestinian bilateral negotiations are to begin on December 12 in Israel. Quarter envoy Tony Blair is to convene a Palestinian donor conference in Paris on December 17.

The Annapolis Diary Excerpt: by Aluf Benn and Shmuel Rosner of Ha'aretz

Olmert says he doesn’t care about U.S. Jews' opinion on dividing Jerusalem any more

A few members of the group of American Jewish leaders who came to meet Prime Minister Ehud Olmert on Tuesday, a few hours after he finished his duties at Annapolis, were dissatisfied with his speech.

Why did Palestinian Authority Chairman Mahmoud Abbas mention Jerusalem and you did not, one asked. The absence, of course, was not by chance. Olmert and President George Bush tried to bypass the problematic core issues of the conflict. "We say, 'If we forget thee Jerusalem,' but we try not to mention it," one top Israeli official said.

Jerusalem is the stick that those opposed to the renewed peace process will use to beat the prime minister. A few coalitions, mainly of Orthodox Jews in America, are already recruiting members for a campaign against the future division of the city. On Monday, Olmert pissed them off further by telling them, in rather harsh language, that he simply didn't care about their opinion.

Olmert says he knows their tricks. "The Jerusalem issue has become routine. They used it against Peres, they tried it with Barak and are trying it with me." For a moment, the old, crusading Ehud was back.

"Nobody can preach to me about Jerusalem. I'm a bigger Jerusalem patriot than all those screamers and preachers. All of them put together haven't done one-tenth of what I have for the power and unity of Jerusalem." Olmert did not mention the name of Benjamin Netanyahu, who spearheaded the "Peres will divide Jerusalem" campaign of 1996 and made similar claims against Ehud Barak in 1999. Olmert, then mayor of the city, starred in a Labor Party campaign ad, promising that Barak would not divide the capital. Will Barak reciprocate now?

But right-wingers among the U.S. Jewish community insist: He doesn't have to agree with us, but he should at least speak to us. The path of "Rabin and the propellers," one said, is undesirable — whether one is speaking about a dialogue with the settlers or with worried American Jews.

Russia Has News for Barak:

At a meeting earlier this week in Washington, Russian Foreign Minister Sergei Lavrov informed Defense Minister Ehud Barak that Russia has decided to supply the nuclear fuel rods for Iran's Bushehr power plant.

The fuel will be sent to Iran in special packaging, in keeping with the instruction of the International Atomic Energy Agency, Lavrov told Barak, adding that "It is not so simple to open these packages without it being discovered."

Lavrov's announcement contradicts Russian President Vladimir Putin's promise, during his meeting with Olmert several weeks ago, not to supply the fuel for the reactor in Bushehr.

Perspective: Russia continues to be unpredictable. Putin and Lavrov are quite a pair. Israel and the United States seem to be two of their least favorite nations.

Saudi Influence Substantial

The Saudis agreed to come to Annapolis with most of the moderate Middle East nations following.

Saudi Arabian Foreign Minister Saud al-Faisal told Time that he was optimistic about the week's Middle East peace conference in Annapolis because of what he calls U.S. determination "to see this through." Continuous U.S. mediation in post-conference negotiations, including pressure on Israel, he says, "can turn things around" and lead to a comprehensive settlement before President Bush's term expires in 13 months.

Prince Saud says there will be no peace unless Israel withdraws to June 4, 1967, borders, and will only shake Prime Minister Olmert's hand when 'that hand is extended in peace.'

"Why doesn't anyone want to be seen speaking to me?" With these words, Foreign Ministry Tzipi Livni turned to Arab foreign ministers in a closed meeting during the Annapolis conference. The words were directed at Saudi Foreign Minister Saud al-Faisal.

President Bush and his administration have outwardly appeased Crown Prince Abdullah (now King Abdullah) and the Saudis since 2001 when he and the prince spent 17 days up to Sept. 11, preparing what was going to be the most comprehensive address ever given by an American president to the U.N. General Assembly on Israel's land. (Bush was going to call for a Palestinian state amongst many other things.)

Fifteen Saudis were responsible for the largest terror event in world history on 9-11-2001, which cancelled the Bush address, which was finally delivered on June 24, 2002.

The Bush plan became the Quartet Road Map the summer of 2002. The Quartet plan was officially approved by the U.S., the EU, the U.N. and Russia at the White House in the Oval Office on Dec. 20, 2002, and delivered to the Israelis and the Palestinians on Apr. 30, 2003.

We will watch the Saudi actions very closely going forward. We know their financing many of the new mosques in the U.S. and Britain and they are funding many Middle Eastern "anti-Israel" education programs in American universities. The Saudi Wahabis continue to pour people into Iraq killing U.S. and Iraqi soldiers.

The Wall Street Journal wrote this week:

Saudi Arabia blindsided the Bush Administration in rapidly returning former Prime Minister Nawaz Sharif to Pakistan Sunday — a reflection of how regional powers are subtly jockeying for influence in Pakistan as its leadership looks shaky.

Saudi Arabia's actions "surprised" the White House and State Department, said a U.S. official, as Washington hadn't expected Mr. Sharif's return ahead of National Assembly elections scheduled for Jan. 8 in Pakistan. The move came just days after Pakistani President Pervez Musharraf flew to Riyadh to plead with Saudi officials -- including King Abdullah -- not to allow Mr. Sharif's return.

Mr. Sharif is now among the favorites to become Pakistan's next prime minister in January's election. U.S. officials have voiced their concerns about Mr. Sharif's return to power, viewing him as soft on terrorism and too close to Islamist political parties that might roll back economic and social reforms enacted by Mr. Musharraf's government. Mr. Sharif disputes that criticism.

U.S. and Pakistani officials said they viewed Saudi Arabia's action as a clear sign that the Middle East power is beginning to position itself for political influence inside Pakistan at a time when Mr. Musharraf's power is ebbing and there are real threats to his continued role in power.

"The Saudis seem to be acting from the belief that Musharraf won't weather the current storm; and, if he does, he'll be significantly weakened," the U.S. official said. "The Saudis have always looked toward Pakistan" as a key strategic asset "and, therefore, keep their cards close to their chest."

The Bush Administration's forcing democracy on Pakistan will come back to haunt them as every diplomatic plan they have been initiated in the Middle East for the past seven years has been problematic.

Now they have the Saudis coming to Pakistan to exert influence and power. According to the CIA Fact Book, Iraq has a 27.5-million population while Pakistan has a 164.7 million population and nuclear capabilities.

Bush and Rice's democracy/liberty obsession have completely thrown US-Russia and US-Middle Eastern country relations out of balance.

Saudi and Other Oil Producers' Financial Influence

Recently, Prince Walid bin Talal of Saudi Arabia, cleared the way for the ouster of Citibanks chief executive, Charles O. Prince III.

This week Citicorp is selling up to 4.9 percent of itself for $7.5 billion to the Gulf Arab emirate of Abu Dhabi, giving the largest U.S. bank much needed capital as it struggles with the subprime mortgage crisis and a search for a new chief executive.

The Wall Street Journal wrote experts estimate that oil-rich nations have a $4 trillion cache of petrodollar investments around the world. And with oil prices likely to remain in the stratosphere, that number could increase rapidly.

In 2000, OPEC countries earned $243 billion from oil exports, according to Cambridge Energy Research Associates. For all of 2007 the estimate was more than $688 billion, but that did not include the last two months of price spikes.

Lack of U.S. Energy Program Is Filling the Coffers of Russia, Saudi Arabia, Venezuela and Many Other Middle Eastern Countries

With the price of oil edging toward $100 a barrel, Middle Eastern oil-producing states have experienced a windfall in revenue.

By comparison, in 2003 oil was trading at $44 a barrel, and when President Bush was inaugurated Jan. 20, 2001, oil was trading at $24 a barrel.

The U.S. now imports 12 million of the 20 million barrels of oil it consumes daily, at a cost of about $1 billion per day, $365 billion per year.

Investment funds held by governments, known as "sovereign funds," are estimated to be in the trillions in Middle Eastern oil-producing states.

NBC reports that Arab investors have put some $70 billion in U.S. equities this year.

Perspective: The Democrats' global warming beliefs have stopped U.S. refinery construction, new drilling and pipeline construction. An emphasis on ethanol has also complicated these matters. The Republicans protected their friends in the oil patch and the major oil companies and the contractors who are making fortunes in the Middle East. The end result: Trillions of dollars have been taken out of Americans' pockets and given to foreign sources, and never has the United States been so financially vulnerable to such suspect sources of oil.

Close Call as Fire Shuts Key Canada-U.S. pipeline (Reuters)

On Thursday, an explosion crippled the biggest pipeline supplying Canadian crude to U.S. Midwest refineries, shutting off more than 1 million barrels per day of imports to the world's biggest consumer.

During the third quarter, the pipeline had carried around 1.5 million bpd of Canadian crude, about 15 percent of U.S. imports.

There was no word on when line 4, the biggest of the connected pipes, which ships nearly 700,000 bpd, would restart.

Line 3, with capacity of nearly 450,000 bpd, had been shut earlier to inspect a leak and was also still out of action. (At press time, both of these lines were expected to be back online.)

Perspective: This is another example of how fragile the oil and natural gas infrastructure is. As we shared a few months back, the U.S. has been hit with many disruptions domestically to refineries and pipelines — not to forget that ethanol is not proving to be the best energy alternative (for many reasons that we will address at another time). Thank you, Congress.

News Briefs
Annapolis

Ha'aretz reports that the Annapolis summit will perpetuate the rift exposed in the Arab and Islamic world between the extremist camp lead by Iran, and the more moderate Sunni camp lead by Saudi Arabia … This does not mean that the pragmatic Sunni-Arab stream has turned into Israel-loving Zionists; they don't love Israelis, they just hate the Iranians more.

The Saudis have no wish to normalize relations with Israel or even to shake hands with the Israelis. The Arab countries' lukewarm statements concerning Israel are really only lip service to soften up public opinion back home. Sitting in the same hall as Israelis is not a trivial matter; but in the fight against Tehran over the future of the Middle East, even such an act has become kosher, as far as Riyadh is concerned.

Bush Administration officials had hoped the Annapolis talks would curry favor with skeptical Sunni Arab leaders, who the U.S. needs to check Iran's growing regional clout ... Underscoring that effort, the Bush Administration even courted a long-time pariah, Syria.

Syria's bitter enemy, Israel, is going even further, indicating that its arms are open wide to Damascus. Talks with Syria could go some way in weakening Tehran's strongest alliance in the region. (Cam Simpson and Jay Solomon)

Aluf Benn of Ha'aretz writes that the main message of this week's summit at Annapolis is that the United States is back as a leader in the Middle East … Only a year ago, a pessimistic theory of America's decline as a leading power in the Middle East dominated Washington.

Now, encouraged by the improved security situation in Baghdad and the drop in the number of casualties, and the successful Israeli strike against a Syrian nuclear installation, Bush is embarking on a diplomatic adventure in the Middle East.

The photo-op at Annapolis reflects the power of the "axis of moderates." The U.S., Israel, Saudi Arabia, Egypt, Jordan, and the United Arab Emirates stood holding hands against the "axis of evil" who were not invited: Iran, Hamas and Hezbollah.

Russia

The only voices in Russia's legislature opposing Vladimir Putin after the Dec. 2 parliamentary elections won't be strangers to autocratic one-party rule. They're the Communists, who monopolized power in the Soviet era … Putin "has more power today than the pharaoh of Egypt, the czar and the Soviet Union's general secretary combined,'' says Communist leader Gennady Zyuganov.

After transforming the State Duma into a rubber stamp during eight years as president, Putin is about to turn the tables by making his successor subservient to a legislature dominated by the United Russia party — and controlled by none other than parliamentary candidate Vladimir Putin. An alternative strategy: Putin has hinted that he might run for the presidency again in 2012, and analysts say he may be able to return to the Kremlin sooner if he persuades his successor to step down mid-term. (Bloomberg)

Pakistan

Nawaz Sharif, the Pakistani prime minister ousted in a coup eight years ago, returned from exile Sunday to a nation under emergency rule and a raucous welcome from supporters ... "The lion is returning," said a supporter, Yasin Butt, "and when the lion roars, dictators and political turncoats disappear."

Party officials complained hundreds of workers had been arrested. A police official admitted arresting "potential trouble-makers" to stop any "untoward situation" arising. Sharif's return will likely energize an opposition that is split over its role, with many arguing that contesting the vote would legitimize Musharraf's tactics. (Rana Jawad, Agence France-Presse)

Robert Kagan writes in The Wall Street Journal that the Bush Administration, like others before it, believes supporting the dictatorship in Pakistan is better than the alternative … Today, Pakistan's Pervez Musharraf is playing the old game, essentially saying, "If you force me out, the radical Islamists will win."

Kagan says President Bush's claim that Musharaf can be trusted to lead Pakistan toward democracy is not credible. In its better moments, the United States has known when to tell such leaders that their time was up.

If the administration cannot muster the courage or skill to replace this eminently replaceable man in the name of Pakistani democracy, all because it fears the alternative, then it had better cease the absurd rhetoric about democracy promotion. It had also better get used to a greater Middle East and Muslim world where there are only two types of regimes: radical Islamists and stubborn dictatorships. (Robert Kagan, a senior associate at the Carnegie Endowment for International Peace)

China

China refused permission for a U.S. aircraft carrier and accompanying vessels to visit Hong Kong for a long-planned Thanksgiving holiday visit … "At present, it appears the USS Kitty Hawk strike group will not be making a port call in Hong Kong as previously planned as a result of a last minute denial by the Chinese Ministry of Foreign Affairs," State Department spokeswoman Nicole Thompson said shortly before Thanksgiving.

There are several possible sources of discontent that may have prompted the decision — including U.S. plans to sell Taiwan a $940 million upgrade to its missile system and a meeting last month between President George W Bush and the Dalai Lama, the Tibetan Buddhist leader who Beijing considers a traitor. (Reuters)

U.S. Economy

Forbes reports that concerns about liquidity in the banking system have raised the possibility that there will be an increase in bank failures in the next year or so … Bank failures in the U.S. are rare: The three logged so far this year are out of nearly 8,000 banks in existence — and there have been just 28 since 2000. From mid-2004 until this February. there were no failures, the largest span of time without any since the Great Depression.

But Forbes says the credit meltdown that has simmered since the summer has depleted capital levels, and banks are getting stuck with mortgage-related assets, the values of which have declined sharply in the last few months. If your bank is failing, you probably won't know about it. Regulators deliberately keep a pending closure secret to avoid a mad rush to remove deposits — a run on the bank, if you will.

Connecting the Dots — Bush Dresses Terrorists in Tuxedos While Endangering America's Prophetic Future
by Bill Wilson, KIN Senior Analyst

President George W. Bush has placed the United States as the final "judge" over the implementation of a peace agreement between Israel and Palestinian terrorists that will include giving up Israel's biblical land to establish a Palestinian nation with a major terrorist organization as the head of the Palestinian government.

Because of Islamic demands that Israel give up control of East Jerusalem in order for there to be peace, Bush's actions may well have set in motion the prophetic destiny of America as depicted by ancient prophecies such as Zechariah 12:9 (NKJV) that says, "And it shall come to pass in that day, that I will seek to destroy all the nations that come against Jerusalem."

The "Joint Understanding" read by Bush at the close of the Annapolis Summit said, "Unless otherwise agreed by the parties, implementation of the future peace treaty will be subject to the implementation of the road map, as judged by the United States."

There are many, many outstanding issues that are monumental roadblocks to the so-called "road map." Among them are the right of return for so-called Palestinians who fled the area under Arab direction when Arab nations attacked Israel after it became a nation; the splitting up of Jerusalem and its establishment as the Palestinian state's capital; and the relinquishing of control by Israel of the strategic Golan Heights — all demands on Israel by the terrorist side.

The problem with all this is that the Bush Administration has propped up Mahmoud Abbas and the Fatah terrorist organization as the party to bring about peace. Within Fatah are terrorist militia such as the al Aqsa Martyrs Brigades and others that perpetrate acts of terror on Israeli citizens.

The Bush Administration has sent hundreds of millions of dollars in American weapons and trainers to arm and train Fatah to defend the Palestinian ideal against another democratically-elected terrorist group, Hamas. During working hours, the American-trained Fatah patrols on behalf of the Palestinian Authority; but after hours, they work together with Hamas using American weapons and tactics against Israel.

The Palestinian movement is part of an overall strategic war of aggression conducted by Islam against the United States and Israel. This is an unrecognized world war of Islamic domination. It is waged on many fronts. Any dialogue, any negotiation, any ceasefire, any pull-out, any diplomatic attention is considered a victory by Islam — not a victory to bring about peace as defined by the West, but victory to bring about Islamic "peace" and "justice" as defined by Sharia law — an encouragement to regroup and attack even harder.

The Bush Administration's effort to turn a terrorist organization into a respectable government will fail. A terrorist dressed in a tuxedo is still a terrorist — an even more dangerous one when he or she helps to fulfill prophecy.