Prince Saud Al-Faisal
Foreign Minister of Saudi Arabia
Address to Britain's Royal United Services Institute
London; January 16, 2006

Iraq remained at the center of the War on Terror battling al-Qaida and affiliated terrorist organizations, insurgent groups fighting against Coalition Forces (CF), militias and death squads increasingly engaged in sectarian violence, and criminal organizations taking advantage of Iraq's deteriorating security situation. Terrorist organizations and insurgent groups continued to attack Coalition Forces primarily utilizing improvised explosive devices (IEDs) and vehicle-borne improvised explosive devices (VBIEDs). The U.S. Government continued with focused efforts to mitigate the threat posed by foreign fighters in Iraq, coordinating both with the interagency and with our embassy officials overseas. State sponsors of terrorism, Iran and Syria, continued to play destabilizing roles in the region. (See Chapter 3, State Sponsors of Terrorism.)

Israel faced a new situation when HAMAS, a designated Foreign Terrorist Organization, assumed control of the Palestinian Authority's (PA) Palestinian Legislative Council (PLC). After HAMAS' election win in January, the Israeli government declared it would not meet with PA representatives, and that it would hold HAMAS responsible for all terrorist attacks and rocket launches emanating from PA territory.

In the past year, major terrorist attacks occurred in Algeria, Iraq, Saudi Arabia, Israel, Lebanon, and Egypt. In Lebanon, in addition to the war precipitated by Hizballah against Israel in July, political violence continued throughout the year. Most notable was the assassination of Industry Minister Pierre Gemayel by a team of gunmen in the streets of a northern suburb of Beirut on November 21. This act, the latest in a series of assassinations and attempted assassinations over the last two years, seemed designed to inflame tensions and intimidate forces opposing Syrian interference in Lebanon. Algiers experienced its first terrorist attacks since 2004, including one that targeted westerners. Past attacks targeted Algerian government interests. On April 24 in Egypt, three suicide bombers detonated their explosive charges in rapid succession at three popular tourist locations in the Sinai resort town of Dahab. The bombers killed at least 24 people, including six foreigners. At least 87 were injured, among them four Americans and 25 other foreigners. In Saudi Arabia, one failed attack attempted to target a critical petroleum installation.

Almost all governments in the region cooperated with the United States in counterterrorist activities and undertook efforts to strengthen their capabilities to fight the War on Terror. These efforts included active participation in USG-sponsored antiterrorism assistance (ATA) programs and bolstering banking and legal regimes to combat terrorist financing. Many countries continued to provide some form of assistance to Coalition efforts to bring peace and stability to Iraq and Afghanistan.

The United States rescinded Libya's designation as a state sponsor of terrorism on June 30. Full diplomatic relations were resumed and Libya continued to cooperate closely with the United States and the international community on counterterrorism efforts.

Some countries made impressive strides. In Saudi Arabia, the government announced in December that it had captured 136 suspected terrorists over a three month period. In Morocco and Jordan, authorities disrupted a number of terrorist cells, some with connections to AQ and the Salafist Group for Preaching and Combat (GSPC), now known as al-Qaida of the Islamic Maghreb (AQIM). The Government of Jordan moved forward with prosecuting several terrorism-related cases, including the sentencing of seven individuals connected to the 2005 Amman hotel bombings. The Kuwaiti government sentenced several individuals who intended to travel to Iraq to join the insurgency. In Algeria, as part of the government's National Reconciliation Project, over 350 terrorists turned themselves over to authorities. The Moroccan government continued to implement internal reforms that aimed to address the socioeconomic conditions extremists exploit for recruitment.

The Summer War
On July 12, Hizballah terrorists entered Israel from southern Lebanon, abducted two Israeli soldiers and killed eight others. During the next 34 days, Hizballah fired over 4,000 Katyusha rockets and other missiles into northern Israel, forcing the residents of Haifa, Nahariya, Tiberias, and other northern communities into bunkers. Hizballah also launched weaponized drones toward Israel and struck an Israeli naval vessel with an anti-ship missile. Israel responded by sending the Israeli Air Force (IAF) to attack rocket launchers and Hizballah infrastructure throughout southern Lebanon and in select areas north of the Litani River. The IAF also bombed Hizballah offices in southern Beirut, and roads, bridges, and power plants throughout Lebanon. Israeli Defense Force (IDF) artillery struck Hizballah targets in southern Lebanon and paved the way for an incursion of more than a division of mechanized and infantry forces into southern Lebanon, aimed at pushing Hizballah forces north of the Litani River and laying the groundwork for a cessation of hostilities. During this period, Israel imposed an air and sea blockade on Lebanon to prevent the resupply of Hizballah by Syria and Iran. At least 110 Israeli soldiers and 43 Israeli civilians died in the conflict. The conflict also resulted in more than 1,000 Lebanese civilian deaths, and four UN observers died following an Israeli air attack.

The war ended with a UN-sponsored cessation of hostilities on August 14. Despite the cessation of hostilities and the deployment of Lebanese Armed Forces (LAF) and additional United Nations Interim Forces in Lebanon (UNIFIL) troops in the south, Lebanese militias, particularly designated Foreign Terrorist Organization Hizballah, retained significant influence over parts of the country. UN Security Council (UNSC) resolutions 1559 and 1701 required the government to take effective control of all Lebanese territory and disarm militia groups operating in Lebanese territory. Due to several factors, including internal political differences, resource shortages, and the unstable political situation following the conflict, the government was not able to disarm fully various extralegal armed groups or Hizballah. The conflict did not resolve Hizballah's claim of its right to conduct hostile operations against Israel along the Blue Line on the premise of legitimate self-defense of Lebanese territory and sovereignty. Hizballah has contended, with the support of many Lebanese, that the Shebaa Farms area of the Israeli-occupied Golan Heights is Lebanese territory.

The Israeli government and IDF report they dealt a serious blow to Hizballah, degrading its medium to long-range missile capability, destroying its infrastructure in southern Lebanon, and killing up to 700 of its fighters. By the end of the year, however, Israeli security experts suggested that Hizballah had recovered much of its manpower and equipment losses through recruitment and resupply from Syria and Iran. Hizballah nonetheless was keeping a low profile on the Israel-Palestinian border, and the provocations that preceded the July outbreak of hostilities have not resumed.

Algeria
For the majority of 2006, the security situation in Algeria remained relatively unchanged, marked by stability in the major urban areas and low-level terrorist activities in the countryside. The last quarter of the year, however, witnessed four attacks in the province of Algiers, including one that targeted Westerners. These were the first attacks inside the province since 2004. Until these recent attacks, terrorism in Algeria was generally not aimed at foreign entities. Instead, the country's major terrorist group, the Salafist Group for Preaching and Combat (GSPC), preferred to target Algerian government interests.

Two events helped fuel terrorism concerns in Algeria: the GSPC's September merger with al-Qaida and the conclusion of the amnesty period for Algeria's National Reconciliation project. Following al-Qaida's September 11 announcement of the GSPC's status as an AQ affiliate in North Africa, the group changed its name to al-Qaida in the Islamic Maghreb (AQIM), and subsequently made more threats against what it termed "crusading" westerners, particularly American and French citizens. On October 19, an improvised explosive device (IED) exploded outside a military barracks in an Algiers suburb, wounding six; and on October 30 two bombs killed two persons approximately 20 kilometers from downtown Algiers. On December 10, a shuttle bus carrying expatriate workers of an American oil services company was ambushed in an Algiers suburb thought to be secure because of its proximity to residences of senior government officials and a major western hotel. This attack, done with a road-side IED, killed two foreigners and wounded several others, including an American worker. The terrorists escaped. The December 10 attack against a relatively soft American target generated greater global media attention than nearly all of AQIM/GSPC past attacks against Algerian government targets. Given the success of this attack in terms of media attention, the AQIM/GSPC likely will attempt further attacks.

Even before its affiliation with AQ, the GSPC was an organization whose regional ties were expanding. AQIM/GSPC support cells have been discovered and dismantled in Spain, Italy, Morocco, and Mali; it maintains training camps in the Pan-Sahel. The AQIM/GSPC's regional scope, however, is thought to be the result of successful Algerian security service and military operations against it on Algerian soil that compelled it to operate outside Algerian territory. The Algerian services killed approximately 260 terrorists and arrested an additional 450 in 2006, compared to the combined killed and arrested figure of about 400 for 2005.

The counterterrorism successes of the Algerian services, combined with the public's continued rejection of terrorists, led the AQIM/GSPC to seek new methods to finance attacks. Algerian media reported the use of extortion in concert with 16 instances of fake roadblocks and 55 kidnappings inside Algeria. The kidnappings, sometimes in coordination with fake roadblocks, often targeted wealthy Algerians. Not all these methods were attributed solely to the AQIM/GSPC as there was also a growing crime problem in Algeria. AQIM/GSPC terrorists such as Mokhtar Belmokhtar have also taken an active role in regional smuggling to finance terrorism.

The final stages of implementation of the national reconciliation, a major policy initiative of Algerian President Abdelaziz Bouteflika, took place in 2006, and sought to bring closure to the near civil war between Algeria's secular government and Islamic terrorists in the 1990s. A cornerstone of this initiative was the six-month amnesty program from March to September 2006 for repentant imprisoned or active terrorists who had not committed bombings, massacres, or rapes. As of September, over 2,300 convicted terrorists were released and more than 350 terrorists surrendered to authorities in order to benefit from the amnesty; statistics on the recidivism of these individuals were not available. Despite a September deadline for amnesty, the government has quietly extended the amnesty grace period indefinitely. In addition, some members of the banned political party Islamic Salvation Front returned to the country from self-imposed exile as part of the amnesty.

The National Reconciliation policy was an effort to resolve divisions that had resulted during more than a decade of civil strife. The amnesty, however, paradoxically appeared to harden the resolve of the remaining terrorists. Indeed, there were reports of terrorists killing cohorts who surrendered to the authorities. During the March through September amnesty period, 199 security officials and civilians were killed, compared to 107 during the rest of the year. Perhaps as a show of defiance and renewed determination, the AQIM/GSPC was responsible for the death of 78 security officials and civilians in October and November, immediately after the amnesty period ended. The AQIM/GSPC, thanks in part to high unemployment among Algerian youth, was partially successful in replenishing its numbers after the arrests, surrenders, and deaths of over 1,000 terrorists. Those remaining appear to be more hard-line and resistant to the government's amnesty offer.

Despite the upsurge of AQIM/GSPC activity toward the end of the year, overall, the government has greatly improved security from the situation of the late 1990s. The Algerian security services and military remained capable of handling the prolonged effort against internal terrorist threats and continued to be a reliable ally in the War on Terror.

Bahrain
In 2006, the Government of Bahrain enacted important legislation to combat terrorism and its financing. In August, Bahrain enacted its first law (Law 58 of 2006) specifically criminalizing terrorism. The law, officially titled "Protecting Society from Terrorist Acts," enumerated the types of crimes considered to be terrorism and established punishments, ranging up to and including the death penalty. The law criminalized conspiracy to carry out an act of terror, although it did not specify a precise penalty of imprisonment or fine.

In August, the King signed amendments to an anti-money laundering law (Law 4 of 2001) that specifically addressed terror financing. These amendments criminalized the undeclared transfer of money across international borders for the purpose of money laundering or in support of terrorism. Anyone convicted under the law of collecting or contributing funds, or otherwise providing financial support to a group or people who practiced terrorist acts, was subject to imprisonment and/or fine. Law 54 also codified a legal basis for a disclosure system for cash couriers although the government must still enact supporting regulations.

The new law included a definition of terrorism based upon the Organization of the Islamic Conference definition. The law excludes from the definition of terrorism acts of struggle against invasion or foreign aggression, colonization, or foreign supremacy in the interest of freedom and the nation's liberty, according to the principles of international law. There are various legal interpretations about the possible application of this clause, and its impact is not yet known.

Bahrain actively monitored terrorist suspects. Domestic legal constraints, particularly prior to the promulgation of the new counterterrorism and CFT laws, at times have hamstrung its ability to detain and prosecute suspects. The legal case of four Bahrainis arrested in mid-2004 on suspicion of plotting terrorist attacks was resolved conclusively on November 20 when Bahrain's Higher Criminal Court ruled that the four accused were not guilty of any remaining charges. This step followed a June 26 ruling by the Constitutional Court that conspiracy charges filed against the suspects were unconstitutional.

In September, security services arrested eight Bahrainis on suspicion of planning possible terrorist activities. During the interrogations, several of the suspects admitted they intended to travel to Afghanistan to fight allied forces. The prosecutor general subsequently decided he did not have enough evidence to charge them under the counterterrorism law and released them on bond in late September.

Bahrain continued to host the Middle East and North Africa Financial Action Task Force (MENA FATF) secretariat. At the Bahraini government's request, the International Monetary Fund and World Bank conducted a financial sector assessment program (FSAP). The FSAP made recommendations to improve the anti-money laundering/combating the financing of terror environment in Bahrain, among other items. The Bahraini delegation briefed MENA FATF members on the FSAP during the November plenary in Abu Dhabi.

Egypt
Egypt was a victim of domestic terrorism in 2006. On April 24, three suicide bombers detonated explosive charges in rapid succession at three popular tourist locations in the southern Sinai resort town of Dahab. The bombers killed at least 24 people, including six foreigners. At least 87 were injured, among them four Americans and 25 other foreigners. As with the 2005 triple bombing in Sharm el-Sheikh, the attacks seemed to target the Egyptian tourism industry, not Americans or foreigners specifically.

On April 26, two suicide bombers attacked a vehicle belonging to the Multinational Force and Observers (MFO) in northern Sinai and the Egyptian police, but the bombers were the only casualties. In the first attack, a suicide bomber wearing a belt bomb threw himself on the hood of an unarmored MFO vehicle, shattering the windshield. In the second attack, several kilometers away, another man with a belt bomb rode a bicycle to an Egyptian police vehicle and blew himself up. The police vehicle was responding to the first attack on the MFO vehicle.

Following these attacks, Egyptian police conducted major security sweeps of the Sinai. According to police, al-Tawhid wa al-Jihad ("Unity and Holy War"), an indigenous group comprised mostly of radicalized Bedouin extremists was responsible for the Sinai bombings. Although the group espouses a pro al-Qaida, Salafist ideology, there were no indications the group was specifically targeting Americans. Egyptian authorities believed they have arrested or killed most of its leadership and operational planners, but members are very likely still at large in the Sinai.

Although al-Tawhid wa al-Jihad was the only terrorist group to successfully commit attacks in Egypt this year, the Egyptian government broke up two other alleged terrorist groups before the groups could conduct operations. One group was reportedly planning attacks; the other was reportedly planning to send foreign fighters to Iraq. There was no further evidence of operational domestic or foreign terrorist groups in the country.

The Egyptian government's well-known opposition to Islamist terrorism and its effective intelligence and security services have made it less likely that terror groups will seek safe haven there. However, Egypt's rugged northern Sinai region remained a haven for smuggling arms and explosives into Gaza and a transit point for Gazan Palestinians trying to infiltrate Israel. In addition, Palestinian HAMAS officials have allegedly carried millions of U.S. dollars in cash across the Gaza-Egypt border. Criminal networks that smuggle weapons and other contraband through the Sinai into Israel and the Gaza Strip may be associated with or used by terrorist groups in the region. The apparent radicalization of some Sinai Bedouin might be linked in part to these smuggling networks, to heavy-handed Egyptian efforts to dismantle them, and to the Bedouin's long-standing distrust of the central government.

In the past three years, Egypt has tightened its terror finance regulations. Egypt maintained its strengthened security measures for airports, seaports, and the Suez Canal.

The Egyptian judicial system does not allow plea bargaining, and terrorists have historically been prosecuted to the full extent of the law. Terrorism defendants may be tried in military tribunals or emergency courts. Under the framework of the Mutual Legal Assistance Treaty, the Egyptian regime provided evidence for counterterrorism cases in the United States

Many of the Egyptian President's far-reaching counterterrorism authorities are derived from a decades-old Emergency Law that was renewed by Parliament in 2006 for two years. President Mubarak called for new counterterrorism legislation to replace the Emergency Law. Such legislation is reportedly being drafted by a governmental interagency committee, although pursuit of the legislation will likely follow passage and public approval of constitutional amendments which maintain wide latitude for government action against terrorist suspects.

Iran
See Chapter 3, State Sponsors of Terrorism.

Iraq
Iraq remained at the center of the War on Terror with the Iraqi Government and the Coalition battling al-Qaida in Iraq (AQI) and affiliated terrorist organizations, insurgent groups fighting against Coalition Forces (CF), militias and death squads increasingly engaged in sectarian violence, and criminal organizations taking advantage of Iraq's deteriorating security situation. Terrorist organizations and insurgent groups continued to attack CF primarily using Improvised Explosive Devices (IEDs) and Vehicle-Borne Improvised Explosive Devices (VBIEDs). The Iraqi government universally condemned terrorist groups and supported CF against AQI and its affiliates.

The June 7 death of AQI's leader, Abu Musab al-Zarqawi, damaged the group's leadership but did not diminish attacks against Coalition Forces and Iraqis nor did it halt overall increasing attack trends by the group. AQI's new leader is Abu Ayyub al-Masri, also known as Abu Hamza al-Muhajir. January press reports indicated that AQI teamed with several smaller Sunni Islamist groups devoted to continuing the insurgency calling themselves the Mujahideen Shura Council. By the end of the year, this group had renamed itself the Islamic State of Iraq.
AQ and affiliated groups continued attacks on Iraq's infrastructure and claimed responsibility for kidnappings and attacks against Coalition Forces.

The Government of Iraq sponsored reconciliation programs to reduce the sources of violence. The government organized conferences involving tribal and religious leaders, politicians, and civil society organizations to counter support for terrorist organizations and to promote dialogue between Iraq's ethnic and religious groups in an effort to decrease violence. Tribal leaders in Ramadi, a volatile city in Anbar province, banded together late in the year and pledged to fight against AQ instead of the coalition. While the tribal leaders' full effectiveness remained uncertain, this represented an important step.

Iraq's sectarian divide increased dramatically following the February 22 bombing of the al-Askariyah Mosque, one of the holiest sites to Shia Muslims, located in Salah ad Din province. While violence against both CF and Iraqis had increased prior to the bombing, this event exacerbated sectarian tensions and led to increased violence in Iraq's ethnically-mixed areas, especially Baghdad. Sectarian attacks, including car bombs, suicide vests, sniper fire, targeted assassinations, and death squad murders, occurred on a close-to-daily basis with Iraqi civilians suffering the majority of causalities. Iraq's sectarian violence furthered the terrorists' goals by creating instability and weakening the government.

Neighboring countries, specifically Iran, continued to interfere in Iraq's internal affairs by allowing, condoning, or in some cases, actively smuggling weapons, people, materials, and money to terrorist, insurgent, and militia groups inside Iraq. Iranian agents and sympathizers utilized an 800-mile long, porous border with limited security to transport goods, which increasingly included Iranian-made weapons such as IEDs or their components, which proved effective in attacks against Coalition Forces.

In recent statements, Iraqi government leaders, including the Prime Minister, the President and the Foreign Minister, have called on neighboring countries to stop interfering in Iraq's internal affairs and to stop supporting elements actively fighting against Iraq's elected government. Syria's Foreign Minister traveled to Baghdad and agreed to cooperate more closely on border security in an effort to reduce the number of foreign fighters entering Iraq. Senior Iraqi officials, including Iraqi President Talabani, traveled to Iran throughout the year encouraging the Iranian government to support Iraq's political process and to stop material support of terrorist groups and militias.

To demonstrate that the Iraqi government does not wish to allow Iraq to become a safe haven for terrorist organizations, Prime Minister al-Maliki appointed the Minister of State for National Security, Shirwan al-Waeli, as the Iraq coordinator for issues involving the Kurdistan Workers Party (Kongra-Gel/PKK), a designated Foreign Terrorist Organization. Tension between Turkey and the Iraqi government increased as Turkish leaders expressed increasing frustration at what they viewed as Iraq's inaction against the PKK.

Although Iraq is a proven ally in the War on Terror, Iraq's developing security and armed forces will require further training and resources before they can effectively address the terrorist groups already operating within their borders. Iraq's intelligence services continued to improve in both competency and confidence, but they also will require additional support before they will be able to adequately identify and respond to internal and external terrorist threats. The international community's support for investment and reconstruction are critical components needed to ensure that the Government of Iraq's plans to reduce violence, improve services, and increase economic opportunities are successful.

Israel, the West Bank, and Gaza
Israel faced a new situation when HAMAS, a designated Foreign Terrorist Organization, assumed control of the Palestinian Authority's (PA) Palestinian Legislative Council (PLC). After HAMAS' electoral victory in January, the Israeli government declared it would not meet with PA representatives, initiated a diplomatic campaign to secure international isolation of the HAMAS-led PA government, and withheld the disbursement of hundreds of millions of dollars of value-added tax and customs revenues collected by Israel on behalf of the PA. Following the formation of a new HAMAS-led government in March, the Israeli government declared it would hold HAMAS responsible for all terrorist attacks and rocket launches emanating from PA territory. IDF officials were instructed to suspend all contact with Palestinian security forces in the Gaza Strip. Israeli security experts increasingly expressed concern that terrorist know-how and capabilities would be transferred from the Gaza Strip to the West Bank.

Throughout the year, Israel grappled with the problem of Qassam rocket launches from the Gaza Strip. On numerous occasions, rockets struck Israeli communities in the western Negev desert, including Sderot, or landed near or in the city of Ashkelon. Evidence suggested that Palestinian terrorists were able, on occasion, to improve the range of the Qassams. On at least three occasions, longer-range Katyusha rockets were launched from the Gaza Strip. To address the problem of rocket launches from populated areas, the IDF modified its rules of engagement to permit its forces to fire on targets a few hundred meters from Palestinian homes and police positions. During an IDF incursion into the northern Gaza Strip in November (Operation Autumn Cloud), an errant IDF artillery strike destroyed an apartment complex, and killed 18 Palestinian civilians and wounded over 50. A HAMAS spokesman called on all Palestinian factions to renew attacks, including suicide bombings, inside Israeli territory. Beginning in late November, however, HAMAS was the primary group observing a cessation of rocket fire from Gaza into green-line Israel. Although other groups have disregarded the cease-fire, HAMAS has upheld it, according to Israeli security experts.

Israel also grappled with a growing concern that terrorists, weapons, and funds were being smuggled between Egypt and the Gaza Strip through the Rafah crossing -- manned by the PA Border Crossing Authority, international observers, and Egyptian border guards -- and a series of tunnels under the 12 km Philadelphi Corridor (PC) separating Gaza from Egypt. Israeli security experts voiced concern that Palestinian militants were exiting the Gaza Strip via Rafah, and then infiltrating Israel across the Egypt-Israel border. After HAMAS staged a June 25 attack on IDF soldiers near Kerem Shalom that resulted in two deaths and the abduction of Corporal Gilad Shalit, Israel took steps that severely limited the operation of the Rafah crossing. The IDF also carried out operations to locate tunnels under the PC, destroying at least 17 during the year.

Early in 2006, Israeli security officials said Israel was not targeting HAMAS because it forbade its members to participate in Qassam rocket launches. The Israelis maintained, however, that HAMAS activists were providing assistance to militants from other terrorist groups launching Qassams. HAMAS called Palestinian Islamic Jihad's (PIJ) April 17 suicide bombing attack in Tel Aviv a legitimate act of resistance. PIJ launched Qassam rockets into Israel, carried out the January 19 and April 17 suicide bombings at the old central bus station in Tel Aviv (which killed ten Israeli civilians and an American citizen, and injured 98 Israeli civilians), participated in a foiled February attack against the Erez crossing between Israel and the Gaza Strip, and attempted to carry out a number of other suicide bombings. Israeli security sources said PIJ made significant efforts to carry out terror attacks in Israel prior to the March 28 Knesset elections. The IDF believed PIJ was behind the launch of a Katyusha rocket from the Gaza Strip into Israel during Knesset elections.

Israeli security officials also maintained that various Fatah-affiliated groups carried out Qassam launches, particularly the Fatah-linked al-Aqsa Martyrs Brigade (AAMB) and the Abu Rish Brigades. Using stolen bulldozers, AAMB demolished part of the border wall between Gaza and Egypt on January 4, allowing hundreds of Palestinians to surge through the wall and enter Egypt. AAMB also claimed that it participated in two failed attempts in February to attack the Erez crossing between Israel and the Gaza Strip. AAMB claimed, on the Hizballah-operated Al-Manar TV station in Lebanon that it was responsible for the March 30 suicide car bombing at the entrance to a West Bank settlement that killed four Israeli civilians. On April 17, AAMB issued a statement threatening to target Zionists outside Palestine until Israel released its prisoners.

Lebanese Hizballah continued to provide support to select Palestinian groups to augment their capacity to conduct attacks against Israel. Hizballah also continued to call for the destruction of Israel, and directly launched a number of attacks from Lebanon, including a May 28 attack against Israel and the July 12 attack (see "The Summer War", earlier in this chapter).

Israeli security services maintained that Palestinian terrorists attempted numerous times to perpetrate attacks in Israel, but were thwarted. Palestinians in the Gaza Strip attempted to infiltrate Israel by breaching the security fence around the Gaza Strip, and PIJ members were stopped en route to suicide bombings in Israeli territory. Israeli security officials claim they thwarted numerous attempts by Popular Resistance Committees (PRC) operatives and other Palestinian militants to detonate explosives at the Karni crossing between Israel and the Gaza Strip.

According to claims by HAMAS, AAMB, PIJ, PFLP, and the PRC, a number of terrorist attacks and Qassam launches were carried out by two or more organizations acting together. AAMB, PRC and PIJ claimed to have cooperated in a foiled February 9 attempt to attack the Erez crossing between Israel and the Gaza Strip. In February, the IDF and ISA shut down a Fatah-Tanzim infrastructure in Bethlehem that was receiving instructions and professional and financial assistance from PRC terrorists in the Gaza Strip.

Israeli security sources expressed concern that AQ and other external Sunni extremists were attempting to infiltrate the West Bank and Gaza Strip. On March 21, an Israeli military court in the West Bank charged two Palestinians with conspiracy to cause death, active membership in AQ, illegal assembly, and other charges. According to the charges, the two men created an al-Qaida cell in the West Bank city of Nablus, were recruiting to form other AQ cells in the West Bank, were preparing to carry out large-scale terrorist attacks in Israel, and were receiving funds and instructions from al-Qaida in Jordan. One of the two men had also been a member of HAMAS and AAMB.

In response to continuing threat information, Israeli security forces launched frequent arrest and detention raids throughout the West Bank and the Gaza Strip, conducted targeted killings of suspected Palestinian terrorists, imposed strict and widespread closures and curfews in Palestinian areas, conducted aerial attacks on buildings affiliated with designated Foreign Terrorist Organizations in the Gaza Strip, and continued the construction of an extensive security fence in the West Bank. Israeli security forces arrested and held without trial or charges HAMAS and other Palestinian lawmakers and PA ministers from the West Bank. In the wake of the June 25 kidnapping by HAMAS of an IDF corporal posted outside the Gaza Strip, IDF troops arrested 64 HAMAS ministers and members of parliament. On August 5, the IDF arrested the speaker of the PA parliament.

On March 14, the IDF carried out an operation to seize Palestinian terrorists held in a prison in the West Bank city of Jericho within minutes after international monitors left the prison. The IDF took into custody five PFLP members, including four held responsible for the 2001 murder of an Israeli government minister, a prisoner responsible for the foiled "Karine A" weapons smuggling attempt, and over 100 other prisoners (most of whom were soon released). Israel's Attorney General said the prisoners believed responsible for the Israeli minister's murder would stand trial.

In December 2005, the IDF declared a 16 square kilometer zone in the northern Gaza Strip off-limits, warning the PA and general public that anyone in the zone could be targeted. The area remained off-limits in 2006. The IDF carried out ground and naval artillery and aerial strikes against wanted terror suspects and terrorists attempting to launch Qassam rockets into Israel, access roads to Qassam rocket launch sites, terrorist training camps, and weapons manufacturing and storage facilities. The IDF also conducted air strikes against the offices and official establishments of the PA in the Gaza Strip, including the office of PA Prime Minister Haniyeh, the PA ministries of interior, foreign affairs, and finance; and the offices of HAMAS' security force located in the Jabalya refugee camp.

Israeli security forces carried out several operations to shut down terrorist finance networks and seize terrorist funds. In the port city of Ashdod, Israeli Customs authorities seized containers of goods worth millions of dollars that they claimed were to be sold as part of a money laundering and transfer operation aimed at providing funds to HAMAS and PIJ. Another container from China destined for the Gaza Strip was confiscated because it allegedly contained combat support equipment. On numerous occasions, Israeli security forces raided the West Bank offices of HAMAS' "Dawaa" organization, charging that the offices were providing financial support to families of suicide bombers and imprisoned terrorists under the guise of charity. Israeli security forces also raided foreign exchange bureaus in the West Bank, confiscating millions of counterfeit shekels that Israeli security sources suspected originated in Iran, were transferred by HAMAS, PIJ, and Hizballah offices in Syria and Lebanon, and were earmarked for terrorist acts.

Israeli security experts cited occasions when HAMAS-affiliated PA officials smuggled millions of dollars into the Gaza Strip from Egypt. In June, PA Foreign Minister Zahar carried 20 million Euros in his suitcases into the Gaza Strip from Egypt. On October 22, the PA Interior Minister carried $2 million into the Gaza Strip in his suitcases. On November 28, the PA Foreign Minister crossed into Gaza through Rafah with $20 million. In an effort to stop another such effort, Israel closed the Rafah crossing on December 14, to prevent PA Prime Minister Haniyeh from entering the Gaza Strip from Egypt carrying $35 million. Haniyeh was eventually allowed to enter Gaza after he agreed to deposit the money in an Egyptian bank.

Jordan
The Government of Jordan retained its keen interest in combating Takfiri¹-inspired extremism, and has actively supported forums for tolerance and religious education during the last year. Polls indicate, however, that only one-half of Jordanians considered AQ a terrorist organization, but many Jordanians viewed U.S. operations in Iraq as terrorist operations. King Abdullah continued to be an outspoken critic of terrorism and Islamic extremism -- condemning as a "criminal cowardly attack" the September 4 shooting of a British tourist in downtown Amman. The King also continued to promote a tolerant and moderate brand of Islam. The Jordanian government publicly condemned terrorist acts throughout the world, practiced strict security measures, and passed new anti-terror legislation. Jordanian security forces disrupted several terrorist plots during the year, while Jordan's State Security Court (SSC), which has purview over terrorism-related cases, maintained a heavy caseload.

In March, Jordanian and Arab intellectuals participated in a conference titled "Terrorism: The Phenomenon and Mechanisms to Combat It." Hosted by Public Security Director Lieutenant General Mohammad Eitan and Interpol Secretary General Ronald Nobel, the conference highlighted the threats from terrorism and the need to understand and fight its origins. In April, Prince Ghazi bin Mohammad inaugurated the 17th annual Fiqh Academy Conference -- a three-day conference on Islamic doctrine. Prince Ghazi delivered a speech on behalf of King Abdullah calling on Muslims "to work honestly and seriously to eradicate terrorism and expose misguided Takfiri thought." Also in April, the King signed the Amman Declaration, which calls for more dialogue, cooperation, and understanding between Western and Muslim civilizations and stressing that ties must be built on mutual respect rather than conflict and rivalry. King Abdullah told reporters during a subsequent TV interview, "[w]e believe fighting terrorism does not take place through employing direct security measures alone, but through a comprehensive strategy to strengthen the culture of dialogue and renounce the culture of violence."

The General Intelligence Directorate and Public Security Directorate actively defended Jordan throughout the year. In February, Jordan's security forces disrupted an al-Qaida-linked cell plotting to attack Queen Alia International Airport. In June, the State Security Court indicted seven Iraqi, Libyan, and Saudi suspects involved in the airport plot for conspiracy to carry out terrorist attacks. In mid-April, the Government of Jordan announced it had discovered a cache of weapons, including rockets, C-4 explosives, and small arms, in northern Jordan. The government said that several militants associated with the cache were arrested while planning attacks in Jordan with instructions from HAMAS leaders in Syria. In early November, the State Security Court indicted three of the HAMAS-affiliated defendants for plotting attacks in Jordan. Jordanian security forces quickly apprehended Nabil Ahmed Issa al-Jaaourah, a Jordanian citizen, after he shot and killed a British tourist and injured five tourists from the Netherlands, Australia, and New Zealand, and a Jordanian tourist police officer, while shouting "God is great" at Amman's Roman Amphitheater in early September.

Jordan's lower house of Parliament ratified a bill on the prevention and punishment of terrorism in late August; the bill became law in early November following a royal decree. Highlights of the bill include: authority for the government to freeze the assets of persons suspected of terrorist conspiracy, place them under surveillance, and prevent them from leaving Jordan; a provision that would limit investigative detention to 30 days; and a definition of terrorism. The approved bill defined terrorism as "every intentional action committed by any means that leads to killing anyone or causing him physical harm or inflicting damages to public or private property...if the intention of that action was to disturb public order and endanger public safety and security or impede the implementation of the law or the constitution."

The Government of Jordan moved forward on several high-profile al-Qaida-related terrorism cases:

• In February, the State Security Court sentenced nine men to hang for the 2004 plot to carry out a chemical/vehicle-borne explosive attack against the U.S. embassy and Government of Jordan targets.
• On March 11, Jordanian authorities executed Libyan national Yasser Saad bin Suway for the October 2002 assassination of USAID officer Lawrence Foley.
• In September, the State Security Court sentenced seven terrorist plotters to hang, including would-be suicide bomber Sajidah al-Rishawi, for the November 2005 Amman Hotel Bombings. The King must review and approve the death warrant before the execution can take place.
• In September, the Court sentenced Omar Jamil Nazzal al-Khalayleh, a cousin of the late terrorist Abu Musab al-Zarqawi, to six months in prison for planning to recruit fighters in Syria to fight against U.S. and Iraqi forces in Iraq.
• On December 7, Ali Muhammad Hasan al-Sahli was sentenced to death, and Abd-al-Rahman Ismai'l and Samih al-Nubani to two years in prison, for their roles in the August 2005 rocket attack against U.S. naval vessels (USS Ashland and USS Kearsarge) visiting the port of Aqaba.

Several non-al-Qaida-related cases were also concluded:

• In the first quarter of 2006, the State Security Court sentenced Abdullah al-Mrayat and seven men from the Horani cell to prison for recruiting fighters for operations against U.S. and Iraqi government forces in Iraq;
• In March and September, the State Security Court sentenced four members of the Qteishat cell and six members of the Khattab Brigade for plotting attacks against hotels, liquor stores, tourist sites, and security officers.
• In October, the Court found eight Mansurah cell militants guilty of plotting to kill American and Iraqi trainers at the Jordan International Police Training Center; and in November, the court sentenced five men from the Khaled Mohammad cell to prison for planning attacks against Israel.
• In December, the Court sentenced three men to prison for attempting to join Iraqi insurgents.

Border security remained a top concern. The Jordanian government enforced security measures at each of its ports of entry, including thorough manual and electromagnetic searches of vehicles and persons attempting to enter Jordan through the Karama-Trebil border crossing in the West Bank. The Jordanian and Iraqi Interior Ministers met in Amman in mid-December to discuss the formation of joint committees aimed at countering terrorism and enhancing control along the 180 km Jordanian - Iraqi border.

Kuwait
Kuwaiti officials condemned terrorism in regional and international fora, drafted stronger money laundering and terrorist finance legislation, and implemented a government-funded moderation campaign to combat extremism. Despite these efforts, the risk of a terrorist attack in Kuwait remained high because of the Government of Kuwait's continued reluctance to confront domestic extremists and Kuwaiti supporters of terrorism active in Iraq and Afghanistan, and regional tensions, particularly sectarian violence in Iraq.

The Government of Kuwait continued to pursue prosecutions of 36 members of the "Peninsula Lions" terrorist cell involved in the January 2005 confrontations with police, 22 Kuwaiti citizens accused of "jihad in Iraq," 12 Kuwaitis involved in the 2002 Failaka Island shooting, and eight Guantanamo detainees released to Kuwaiti custody. In November, the Appeals Court upheld most of the verdicts in the "Peninsula Lions" case, including four death sentences, four prison sentences of ten years or more, two seven-year sentences, and six sentences of four years or less. The Court commuted two death sentences to life imprisonment and reduced seven other prison sentences; it also increased four sentences from seven to ten years imprisonment.

In the "Jihadists in Iraq" case, 15 defendants were sentenced to three years, three received small fines, and four were acquitted by the Appeals Court in June. The government is still pursuing cases against 12 of the defendants. In January, the Appeals Court increased the sentences of six of the 12 defendants in the Failaka Island shooting case, and imposed heavier fines, longer probation periods, and travel restrictions. Of the eight Guantanamo detainees released to Kuwait, two remained in Kuwaiti custody awaiting trial. The other six were tried. Five were found not guilty and released; the government is appealing the verdicts. One was initially found guilty, but in an appeal, Kuwait's highest court overturned the decision and issued a not guilty verdict.

Kuwait still lacked strong legal provisions to deal effectively with those engaged in conspiracy to commit terrorist acts. Kuwaiti officials stated that insufficient and incomplete evidence prevented the conviction of, or more robust sentences for, many suspected terrorists.

In August, Kuwaiti police apprehended Hamid Nawaf al-Harbi, a suspect in the "Peninsula Lions" case who was sentenced in absentia to seven years in prison. Mohsen al-Fadhli, a known Kuwaiti terrorist believed to be in the country, remains at large. In December, the U.S. Treasury Department designated Kuwaiti extremist cleric Hamid al-Ali and terrorist facilitators Mubarak Bathali and Jabir Jalahmah as terrorist supporters. Kuwait continued to pursue upgrades to its border security, and worked closely with Iraq and other countries to secure the Iraqi border area. Kuwait also significantly increased security at oil installations after AQ threatened to attack oil facilities in the Gulf.

The Kuwaiti government continued to strengthen its legal regime for combating money laundering and terrorist financing, but problems persisted, particularly with enforcement. Although money laundering was a criminal offense, terrorist financing was not specifically prohibited. Currency smuggling into Kuwait was illegal, but cash reporting requirements were not uniformly enforced and there were no currency reporting requirements for individuals leaving the country. Members of the Kuwait National Committee for Anti-Money Laundering and Combating Terrorist Financing represented a wide range of government ministries and domestic financial institutions, but vague delineations of the roles and responsibilities continued to hinder their overall effectiveness. Kuwait was also an active member of the Middle East and North Africa Financial Action Task Force and had a Financial Intelligence Unit in accordance with current international standards, although it was not well-organized nor an independent body.

The Ministry of Social Affairs and Labor took steps to increase the monitoring and regulation of the domestic fundraising activities of Kuwait-based Islamic charities, but the Kuwaiti government was less effective in monitoring the operations of Kuwaiti charities abroad. The government needed to accelerate its efforts to pass counterterrorism legislation, strengthen charity oversight, empower its FIU, monitor cash couriers, and fully conform to international standards and conventions on terrorist financing.

Toward the end of the year, Kuwait's Ministry of Awqaf and Islamic Affairs opened its World Moderation Center, a special agency responsible for implementing an initiative launched in 2005 to combat extremism and spread moderation among Muslims through education, training, international dialogue, and research.

Lebanon
Political violence continued throughout the year. Most notable was the assassination of Industry Minister Pierre Gemayel by a team of gunmen in the streets of a northern suburb of Beirut on November 21. This act, the latest in a series of assassinations and attempted assassinations over the last two years, seemed designed to inflame tensions and intimidate forces opposing Syrian interference in Lebanon. An assassination attempt on Internal Security Forces (ISF) Colonel Samir Shehade took place on September 5. Colonel Shehade was injured by the explosion of a roadside bomb which went off as his car passed by the village of Rmaileh, near the southern port city of Sidon. Lebanese officials suspected that the attempt on his life was in retaliation for his role in the investigation into former Prime Minister Rafiq Hariri's murder.

Between October and November, several attacks targeted ISF barracks in different areas in Beirut. On October 8 and November 1, Energa grenade-type shells were fired at al-Helou ISF barracks, causing damage to the ISF dormitory. On October 10, the Barbar el-Khazzen ISF barracks were also the target of an Energa shell that caused no casualties. The Tareek el-Jedideh ISF barracks were targeted on November 5. In what may have been a related incident, on October 15, two Energa shells exploded in downtown Beirut, injuring five and causing damage to the Credit Libanais Bank building.

Since October 2004, there have been at least 18 bombings and assassination attempts that resulted in more than 32 deaths, including that of former Prime Minister Rafiq Hariri on February 14, 2005. Other attacks have targeted Lebanese journalists and politicians critical of Syrian interference in Lebanon, including Telecom Minister Marwan Hamadeh, MP Gebran Tueni, journalist May Chidiac, Deputy Prime Minister and Defense Minister Elias Murr, and journalist Samir Kassir. Each of these attacks remained unsolved. The UN International Independent Investigation Commission (UNIIIC) has been investigating the Hariri assassination and other possibly related crimes, pursuant to UNSC Resolution 1644. The Lebanese government also continued to investigate the acts of political violence.

The government of Prime Minister Fouad Siniora has taken some gradual steps to prevent terrorist activities. In accordance with UNSC Resolution 1701, the Lebanese Armed Forces (LAF) strengthened its border presence and increased patrols in the south, with assistance from UNIFIL. The LAF deployed 15,000 troops in the south, establishing itself in this region for the first time in 30 years. Also, the ISF created a special unit to combat terrorism, and established branches of this unit to preempt terrorist activity in northern and central Lebanon.

Even with these steps, there are many concerns about Lebanon's ability to combat terrorism. Hizballah still remains the most prominent terrorist group in Lebanon. It has strong influence among Lebanon's Shia community, which comprises about one-third of Lebanon's population. The Lebanese government still recognizes Hizballah as a legitimate "resistance group" and political party. Hizballah maintains offices in Beirut and elsewhere in the country, has official liaison officers to the security services, is represented by elected deputies in parliament, and until recently had one minister in the cabinet.

The unstable political situation in Lebanon also contributed to enabling suspected foreign terrorist organizations, such as AQ and Fatah-Islam, to infiltrate Lebanon and set up operational cells within the Palestinian refugee camps. Some of these groups, such as AQ affiliate Asbat al-Ansar, have been able to find safe haven within the camps to support their actions.

Although Syria withdrew its military forces from Lebanon in April 2005, it still maintained a covert intelligence presence. The Lebanese government accused Syria of continuing to support and facilitate arms smuggling to Hizballah and Palestinian terrorist groups. Even with the post-conflict LAF troop deployments, the Government of Lebanon did not exercise full control over areas in the Hizballah-dominated south, the southern suburbs of Beirut, parts of the Biqa Valley, and inside the Palestinian-controlled refugee camps or Palestinian paramilitary bases. This lack of control provided opportunity for terrorist groups to operate relatively freely in some of these locations. During the national dialogue held in March that aimed to generate consensus among the country's major parliamentary groups, Lebanese leaders agreed to disarm the Palestinian factions located outside the 12 Palestinian refugee camps by September. The intended disarming of the Palestinian factions was derailed by the Summer War and the subsequent unsettled internal political situation.

At the end of 2006, the Lebanese government had not fully complied with UNSC Resolution 1559, which calls for respect for the sovereignty and political independence of Lebanon, the end of foreign interference in Lebanon, and the disarming and disbanding of all Lebanese and non-Lebanese militias. While Lebanon was committed to fulfilling UNSC Resolution 1559, its political leaders maintained that implementation of Hizballah's disarmament should be accomplished through a national dialogue rather than force. Lebanon's 12 Palestinian refugee camps, safe havens for several armed Palestinian factions and numbers of Sunni extremists, remained no-go zones for the LAF.

Lebanese authorities maintained that the amnesty for Lebanese individuals involved in acts of violence during the civil war prevented the government from prosecuting terrorist cases of concern to the United States. These cases included individuals involved in the 1985 hijacking of TWA Flight 847, during which a U.S. Navy diver was murdered, and the abduction, torture, and murder of U.S. hostages in Lebanon from 1984 to 1991. U.S. courts brought indictments against Lebanese Hizballah operatives responsible for a number of those crimes. Despite evidence to the contrary, some Lebanese government officials have insisted that Imad Mughniyah², wanted in connection with the TWA 847 hijacking and other terrorist acts, and placed on the FBI's list of most-wanted terrorists in 2001, was no longer in Lebanon. Mohammad Ali Hamadi, who spent 18 years in a German prison for his role in the TWA hijacking, was released in December 2005 and was believed to be in Lebanon. The United States continued its efforts to bring him to trial before a U.S. court and formally requested his extradition.

With regard to terrorism finance, Lebanese officials played an active leadership role in the Middle East and North Africa Financial Action Task Force (MENA/FATF). The Central Bank of Lebanon's Special Investigation Commission (SIC), an independent legal entity with judicial status that is empowered to investigate suspicious financial transactions, investigated 123 cases involving allegations of money laundering and terrorist financing activities. On two occasions, the SIC was unable to designate or freeze the assets of two groups affiliated with Hizballah, on the ground that the groups were affiliated with a political party participating in the Lebanese government, and thus, a decision to freeze their assets would have been a political, rather than a legal, decision.

Libya
On May 15 the United States announced its intention to restore full diplomatic relations with Libya and to rescind Libya's designation as a state sponsor of terrorism. The United States formally rescinded Libya's designation as a state sponsor of terrorism on June 30. Libya continued to cooperate closely with the United States and the international community on counterterrorism efforts.

Since pledging to renounce terrorism in 2003, Libya has endeavored to show its commitment to the War on Terror. Libya cooperated with the United States to combat the Libyan Islamic Fighting Group (LIFG), an AQ affiliate dedicated to the overthrow of the Qadhafi regime. Libya also worked with the United States to curtail terrorist activities of al-Qaida in the Islamic Maghreb (AQIM), an Algeria-based al-Qaida associate formerly known as the Salafist Group for Preaching and Combat (GSPC).

A number of U.S. court cases seeking compensation from Libya for its past support for terrorism remained unresolved.

Morocco
The Moroccan government continued with internal reforms that aimed to address the socio-economic conditions extremists exploit for recruitment. The National Initiative for Human Development (INDH), launched by King Mohammed VI in 2005, is designed to combat poverty, generate employment, and improve infrastructure. INDH projects have focused on rural areas. Morocco's Ministry of Religious Endowments and Islamic Affairs (MOIA) continued reforms begun in 2004 to counter extremist ideology and promote religious tolerance and moderation. Thirty Imams were dismissed in an effort to eliminate extremist ideology in the mosques, and the Ministry supervised revisions to the country's religious curriculum, broke with precedent by appointing 50 women to serve as Islamic spiritual guides in mosques across the country, and installed a closed circuit television network that broadcast moderate religious lectures and sermons to 2,000 mosques daily.

Moroccan efforts to combat terrorism were overhauled and upgraded following coordinated suicide bombings in Casablanca in May 2003 that left 45 persons dead. In the investigation that followed, approximately 3,000 persons suspected of connections to the network were detained, some of whom remain imprisoned. The Moroccan government continued to aggressively investigate and detain terrorist suspects. Minister of Interior Chakib Ben Moussa announced in late November that 300 terrorist suspects had been detained during the year.

Several terrorist cells were identified and disrupted. In March, members of the "Ben Hadi Cell," allegedly tied to (AQIM/GSPC) were arrested. In July, 56 alleged members of the "Mehdi Support Group," led by Hassan al-Khatab, an extremist first jailed after the 2003 Casablanca bombings, were arrested. In November, 13 alleged members of another group were arrested. All three terror cells had identified targets, procured explosives, and initiated planning for attacks against both domestic and foreign interests in Morocco.

Morocco continued with steps to counter terrorism finance and to strengthen controls against money laundering. At the end of 2006, the Parliament was in the final stages of preparing new anti-money laundering legislation that will provide a comprehensive legal basis for the monitoring, investigation, and prosecution of illegal financial activities.

Oman
Oman remained proactive in developing counterterrorism programs and strategies to ensure that it does not become a terrorist safe haven. Oman has worked extensively with neighboring countries to delineate border regions to help prevent the ability of terrorists to move freely throughout the Arabian Peninsula. These efforts resulted in a December agreement between Oman and Saudi Arabia to establish a formal Port of Entry along Oman's western border to better control border transit operations between the two countries.

Although Oman does not have a significant money laundering problem, its government launched the "Oman Program for Anti-Money Laundering" (OPFAM) in August. The purpose of this initiative was to promote greater cohesion among Omani policy-makers, regulators, law enforcement agencies, and financial institutions. Through OPFAM the Omani government hopes to promote information exchanges among relevant actors, standardize indicators to report suspicious transactions, and develop common guidelines to address anti-money laundering challenges.

The Omani government has expressed concern about the increasing number of illegal immigrants attempting to enter Oman. Oman's long coastline and porous borders offered significant challenges as they remained vulnerable to illegal transit by immigrant workers, smugglers, terrorists, and individuals involved in the traffic and sale of illegal drugs. No known terrorists were apprehended during immigration enforcement operations, but Omani officials were aware of the possibility of such individuals using human smuggling organizations to enter Oman. To date, illegal immigrants used Oman primarily as a transit point to other destinations in the Arabian Peninsula, particularly the United Arab Emirates. The majority of illegal immigrants apprehended were Pakistani, Afghani, and, to a much lesser extent, Iranian nationals who were smuggled across the Gulf of Oman.

The Omani government has been aggressive in obtaining training and equipment through the U.S. military to support efforts to control its land and maritime borders. This included the purchase of night vision equipment, an upgraded communication system used by the Royal Omani Police (ROP) and Coast Guard units, open-water patrol boats for the Coast Guard with advance radar systems, and ground surveillance radar systems to assist in border interdiction efforts. The Royal Omani Police, Sultan's Special Force, and the Royal Omani Police Coast Guard participated in U.S. Antiterrorism Assistance Programs.

Qatar
The Qatari government's 2004 Combating Terrorism Law defined terrorism and terrorist acts, provided measures against terrorist financing or fundraising activities, gave the government the authority to take action against terrorist activities, and listed specific punishments, including the death penalty, for terrorist crimes.

The Qatar Authority for Charitable Works monitored all domestic and international charitable activities and approved international fund transfers by charities. The Authority had primary responsibility for monitoring overseas charitable, development, and humanitarian projects; and reported annually to Qatari government ministries on their status.

Cooperation with U.S. authorities on counterterrorism finance was strong. Qatar's Financial Information Unit resided in the Qatar Central Bank. Local banks worked with the Central Bank and the FIU on counterterrorism finance and anti-money laundering issues, and bank officials attended U.S.-sponsored conferences.

There has not been a terrorist attack in Qatar since the March 19, 2005, suicide car bomb attack at an amateur theater playhouse, which killed a British citizen. Cooperation with U.S. authorities improved during the course of the investigation of this unresolved case.

Saudi Arabia
The Government of Saudi Arabia continued to experience a mix of successes and setbacks in its efforts to combat terrorism. Government security forces conducted successful operations against terrorist cells, capturing or killing large numbers of wanted terrorist suspects, as well as members of their support networks. The government has made some progress in other aspects of its counterterrorism effort, such as financing and education, but it still has significant ground to cover to address these issues.

Saudi efforts suffered setbacks with prison breaks and an attack that led to the discovery of extensive support networks in the Kingdom. Prison escapes occurred in March at the al-Kharj prison and in July from al-Malaz jail in Riyadh. On February 24, a Saudi-based AQ cell conducted a suicide attack utilizing vehicle-borne improvised explosive devices on Saudi Aramco's Abqaiq oil stabilization and processing facility near Dammam, which resulted in the death of two security guards and several of the bombers.

Saudi security forces achieved several successes, both in response to these attacks and independently of them. Saudi security forces killed or captured all of the members of the Abqaiq cell and all but three of the Maraz prison escapees. On August 21, five wanted terrorists surrendered in response to government assurances in the media that they would receive mitigated sentences. In December, the government announced the capture during the previous three months of 136 suspected terrorists who were involved in terrorist support networks in the Kingdom.

The Saudi government initiated several programs to support its counterterrorism efforts and bolster its campaign against extremists. King Abdullah created a special security court, the Court of the Divergent, to prosecute terrorist suspects. Interior Minister Prince Nayif gave public assurances that the Court would not be a military tribunal, but would conform to existing judicial practices and law. Additionally, the government began planning a border security system, including fences and sensors, to prevent infiltration of terrorists or terrorist funding into the kingdom. In December, the Gulf Cooperation Council (GCC) summit reiterated its calls to criminalize terrorism, and called for a comprehensive effort against terrorism to include intellectual, social, and educational efforts.

The Saudi government moved to monitor and enforce its anti-money laundering and terrorist finance laws, regulations, and guidelines. However, it still had not established a High Commission for Charities. As in many countries in the Middle East, there was still an over-reliance on suspicious transaction reporting to generate money laundering investigations. Saudi Arabia's unwillingness to publicly disseminate statistics regarding money laundering prosecutions impeded the evaluation and design of enhancements to the judicial aspects of its anti-money laundering system. The Saudi government did not subject Saudi international charities to the same government oversight as domestic charities. In August, the UN 1267 Sanctions Committee designated the International Islamic Relief Organization's (IIRO) branches in Indonesia and the Philippines, and the Kingdom's Eastern Province Branch Director, Abdulhamid Al-Mujil.

In late 2005, the government enacted stricter regulations on the cross-border movement of money and precious metals. Money and gold in excess of $16,000 must be declared upon entry and exit from the country. While the regulations were effective immediately, Customs has not issued new cash declaration forms, and therefore has not yet been able to enforce the current regulation.

In the cultural arena, official visits by a number of U.S. officials, including Ambassador-at-Large for International Religious Freedom John Hanford, highlighted the government's efforts to remove references in textbooks that called for violence against non-Muslims and Muslims of different sects. The government also initiated the National Campaign to Counter Terrorism, which included publications, lectures, and workshops intended to educate school-age girls and boys about the evils of terrorism. To promote tolerance, the government began revising curricula and teaching methods, screening and reevaluating existing teachers, improving selection of future teachers, and better monitoring of teachers.

The government continued to require religious leaders to attend courses designed to eradicate extremist ideology in the mosques and monitor mosque sermons to promote tolerance and eliminate extremism. Several religious leaders were fired or subjected to punitive actions for failure to abide by government instructions to avoid provocative speeches against non-Muslims and non-Sunni Muslims. In previous years in some mosques, a second preacher would appear after the main preacher during the Friday prayer and speak provocatively against Jews, Americans, or non-orthodox Muslims. This practice is less prevalent now, due in large part to the government's efforts to combat extremism in the mosques.

The Saudi government remained engaged in its efforts to root out terrorists and their support networks in the Kingdom, but continued to face difficulties in combating the appeal of AQ ideology. Despite significant efforts and successes in the counterterrorism realm, Saudi security forces continued to discover new terrorist networks in the Kingdom. The Saudi government will need to further address the social and religious underpinnings that sustain the Saudi form of Islamic extremism.

Syria
See Chapter 3, State Sponsors of Terrorism.

United Arab Emirates (UAE)
The Government of the United Arab Emirates (UAE) repeatedly condemned terrorist acts in Iraq, Egypt, and elsewhere in the region throughout the year. In order to prevent extremist preaching in UAE mosques, the General Authority of Islamic Affairs and Endowments provided prescribed guidelines for all Friday sermons, and required all 1,500 mosques that delivered sermons to record them each Friday to ensure that imams adhered to the guidelines. The UAE undertook several border security measures to deter terrorists from reaching UAE soil.

The UAE was generally cooperative in counterterrorism and law enforcement efforts, although cooperation on law enforcement matters was hampered by the lack of a mutual legal assistance treaty (MLAT) between the UAE and the United States. In February, the UAE passed a cyber-crimes law criminalizing the use of the internet for terrorist groups to "promote their ideologies and finance their activities." In June, the UAE established a National Security Council charged with formulating and implementing a national strategic plan.

The Container Security Initiative (CSI), which became operational at the ports of Port Rashid and Jebel Ali in the Emirate of Dubai in 2005, had five U.S. Customs officers co-located with the Dubai Customs Intelligence Unit at Port Rashid. On average, CSI reviewed approximately 250 bills of lading each week, resulting in 15-20 non-intrusive inspections of U.S.-bound containers; examinations were conducted jointly with Dubai Customs officers. In addition, Dubai Customs made requests for most, if not all, containers that originated in Iran to be designated for inspection.

The U.S./UAE Joint Terrorist Finance Coordinating Committee met three times during the year, directly resulting in affirmative changes to the UAE's anti-money laundering laws. The UAE Central Bank provided training programs to financial institutions on money laundering and terrorist financing. The Central Bank initiated memoranda of understanding with regional financial intelligence units, and performed anti-money laundering training both locally and regionally. The Central Bank investigated financial transactions and froze accounts in response to internal investigations. Nine prosecutions for money laundering were in process at year's end. The Central Bank has registered 201 hawala dealers to date.

Yemen
The Republic of Yemen took action against al-Qaida and local extremists, arresting several individuals suspected of having AQ ties, and prosecuting the perpetrators of previous terrorist acts. Yemen also experienced several setbacks to its counterterrorism efforts with the February 3 escape of 23 suspected AQ supporters and the September 15 terrorist attacks on two oil facilities.

On September 15, two coordinated attacks on oil facilities in eastern Yemen resulted in the deaths of all four attackers and one Yemeni security official. A group calling itself al-Qaida in Yemen claimed responsibility. One day after the attack, security forces arrested four individuals on suspicion of links to the attack and for planning attacks in Sanaa on Yemeni government and Canadian Nexen oil company facilities. The investigations into the oil facility and Sanaa attacks continued but no charges were filed.

On February 3, 23 suspected AQ supporters escaped from a maximum security prison in Sanaa. Among the escapees were individuals convicted of participating in the 2000 USS Cole and 2002 M/V Limburg attacks, including the alleged organizer of the Cole attack, Jamal Badawi. On October 1, the U.S.-trained Central Security Force/ Counterterrorism Unit killed two of the most dangerous escapees, Foaz al-Rabi'i and Mohammed al-Dhailami. Rabi'i was sentenced to death, in absentia, in 2004 for his role in the M/V Limburg attack. Rabi'i and Dhailami were alleged to have organized the September oil facility attacks. In total, eight escapees surrendered and security forces killed three.

Yemeni security forces continued to arrest and try suspected members of AQ and other terrorist groups throughout the year. On May 3, a security court convicted Mohammed Hamdi al-Ahdal, alleged to be AQ's number two in Yemen, of financing terrorist groups associated with AQ. Al-Ahdal was sentenced to 37 months in prison, much of which was credited as time served while awaiting trial.

On July 8, the Special Penal Court (SPC) acquitted 19 individuals charged with conspiring to attack U.S. and Yemeni interests. The defendants admitted to traveling to Iraq to "conduct jihad," but the judge ruled that jihad was not illegal under Yemeni law. Also in July, the SPC acquitted 23 other individuals on conspiracy charges relating to traveling to Iraq to attack U.S. forces and found 21 of the defendants guilty on fraudulent document charges. Both cases are currently under appeal. In March, the Sanaa Appellate Court upheld the acquittal of four Iraqis charged with plotting to attack the U.S. and British Embassies in 2003.

In August, the Sanaa Appellate Court returned the case of two individuals accused of plotting to assassinate the U.S. Ambassador in 2004 to a lower court, claiming the judge did not follow correct sentencing procedures. Hizam al-Mass and Khalid al-Halilah were sentenced on March 5 to five years in prison.

Yemen used its Islamic Dialogue Committee, headed by a leading judge, to continue its dialogue with detainees arrested for connections to terrorist groups and extremist elements. The government released detainees it considered rehabilitated after they pledged to uphold the Yemeni constitution and laws, the rights of non-Muslims, and the inviolability of foreign interests. No comprehensive program existed to monitor recidivism rates. An undisclosed number of released detainees from previous years reportedly have traveled to Iraq to participate in attacks against Coalition Forces.

The government's capacity for stemming terrorism financing remained limited. In 2004, the UN 1267 Sanctions Committee designated prominent Yemeni Sheikh Abd al-Majid al-Zindani for his association with AQ. The Yemeni government took no action to bar his travel or freeze his assets in compliance with its UN obligations. Throughout the year, President Saleh voiced public support for Zindani and his Al-Iman University.