Operation Desert Risk

Now, the U.S. is on its own against Iraq--with a "murky" mandate

As military engagements go, the double-whammy missile attacks of Operation Desert Strike on Sept. 3 and Sept. 4 will probably go down as one of the briefest in recent history. In two salvos lasting less than an hour each, 44 cruise missiles slammed into sites in southern Iraq--virtually crushing the pariah state's air-defense capabilities. The score so far: Bill Clinton: 1, Saddam Hussein: 0.

Nice, but the game is not over yet. Although Clinton has now demonstrated to American voters and GOP opponent Bob Dole that he can use a stick when he has to, there may be an uncomfortably high political and economic price to pay. By engaging in quick and unilateral action without the support of a carefully nurtured international coalition, the U.S. finds itself diplomatically isolated. The confrontation could escalate, as it almost did on Sept. 4 when a U.S. F-16 knocked out a radar station just as an Iraqi missile was about to shoot the fighter-jet down. And the attacks sent crude oil prices soaring, just as it seemed the West had tamed inflation.

The latest face-off with Saddam is also a nasty wake-up call from the Middle East, which once again is becoming a dangerous tinderbox (table). Terrorist attacks by murky Islamic groups are rocking such traditional U.S. allies in the Persian Gulf as Saudi Arabia and Bahrain. Turkey, a key NATO ally and strategic partner to the U.S., has a new Islamist Prime Minister who seems far more interested in forging ties with Iran, Iraq, and Syria than improving relations with the West. The U.S.-backed Arab-Israeli peace process is in tatters, a situation underscored by Israeli Prime Minister Benjamin Netanyahu's reluctant agreement on Sept. 4 just to meet with Palestinian leader Yassir Arafat. Predicts Christine Helms, a Middle East specialist at consultants Petroleum Finance Co.: "There's going to be a boomerang effect around the region that could be very dangerous."

A BLIND EYE. U.S. allies are queasy, and for good reason. While swift retaliation makes Clinton look decisive and tough, his almost single-minded focus on domestic politics and failure to heed rising tensions in the region for many months may have prompted several recent acts of aggression. Clinton, for example, said nothing when Iran and Turkey sent troops deep into Iraqi territory earlier this summer to chase troublesome Kurds. He also turned a blind eye when one Kurdish faction, having failed to win U.S. help in August, allied itself with Iran. Such inconsistent White House signals may have led several Middle East allies to refuse to allow the U.S. to launch military attacks from their soil.

And unlike the 1990 invasion of Kuwait, a clear violation of international law, Saddam's decision to send in 40,000 ground troops to aid one of two Kurdish factions battling for the provincial capital of Erbil may not conflict with U.N. accords. Erbil is Iraqi territory, and the 1991 agreement setting up a no-fly zone in northern Iraq doesn't mention ground troops. "The situation is murky," says Brent Scowcroft, a Dole foreign policy aide and former National Security Adviser. "It's hard to say Saddam's ground forces are barred from going in there."

Britain, Germany, and Japan aside, much of the world seems to agree. Arab allies, notably Saudi Arabia, remained embarrassingly silent. Russia slammed the U.S., as did China and France--all permanent members of the U.N. Security Council and Desert Storm backers. Privately, diplomats from those countries are scathing about what they see as U.S. electoral politics being dangerously played out in the Middle East.

Another reason for the break in allied ranks: deep-seated bitterness over recently enacted U.S. laws penalizing foreign companies that do business in Cuba, Libya, and Iran. France's two big oil companies, Total and Elf Aquitaine, have cut potentially lucrative deals with Iraq, and Total is the major partner in a multibillion-dollar project to develop Iran's offshore Sirri oil and gas field. Italy's energy giant ENI may also face obstacles to its plan to pipe Libyan gas across the Mediterranean.

OUT OF CASH. It's a far cry from George Bush's painstaking efforts in late 1990 to build an international consensus before unleashing Desert Storm in January, 1991. Now, if Saddam gets really nasty or if Iran decides to send troops into southern Iraq, mounting a collective response may be all but impossible. This is especially so considering that the gulf states, which bankrolled Desert Storm to the tune of $70 billion, are today virtually without cash reserves and running big budget deficits. Facing heat from homegrown Islamic militants, gulf rulers such as Saudi Arabia's ailing King Fahd and Bahrain's Sheikh Isa are increasingly discomfited when painted as American puppets. Everywhere in the Middle East, "the rulers of pro-American governments are weaker than in 1991 and have tenuous and eroding legitimacy," says Ahmed Hashim, a fellow at the Center for Strategic & International Studies in Washington.

The economic dangers of the confrontation with Saddam are no less great. Oil companies around the world had been relying on Iraqi crude for their fourth-quarter refinery runs, when demand traditionally spikes up. And thanks to leaner operating methods, the oil industry has been cutting back stocks to record low levels. "The disappearance of 700,000 barrels a day in a market with no cushion of inventories is very important," says Larry Goldstein of New York's Petroleum Industry Research Foundation. "It's going to be a very difficult winter for consumers."

Detroit appears particularly vulnerable. Ford, General Motors, and Chrysler have clawed their way back to profitability largely through the sale of gas-guzzling minivans, sport-utility vehicles, and pickups--segments that now make up a huge 43% of the U.S. market. Worries Christopher Cedergren, a consultant in Thousand Oaks, Calif.: "If [the truck market] peters out, the Big Three will not be in a position to take advantage of any upswing in the car market."

No doubt Saddam Hussein is feeling some pain from the U.S. attacks. The 70-mile extension of the southern no-fly zone to the suburbs of Baghdad could damage him in the eyes of the Iraqi military, the only force that could eventually topple him. "When you abuse your own people or threaten your neighbors, you pay a price," Clinton said just hours after the first round of missiles had hit their targets in southern Iraq. But there is also going to be a price for the U.S. and the West in decreased Middle East stability, higher oil prices, and tensions among Western allies. It could turn out to be as costly as Desert Storm.