State Official: "The Saudis want to kill the STL...Lebanon is not important enough to them anymore..."

MPEG's STATE Department's 'take: 

"... Even top US officials are far from certain that a last minute deal can be worked out between Israel and the Palestinian Authority over how and whether to extend the ten month settlement freeze that is scheduled to end on Sunday.  As recently as last week, some officials believed a deal could be worked out that would extend it for perhaps two months.  And initial reports of Palestinian President Abu Mazen's meeting with American Jewish leaders in New York (while there for the opening of the United Nations General Assembly) suggested that he would settle for something less than a complete freeze. 
However, both Israeli Prime Minister Netanyahu and Abu Mazen are under strong pressure from their respective political constituencies not to give way.  And some well placed US officials are working on the assumption that it will take an American proposal to bridge the gap.  That being said, these same officials despair of progress on so-called "core" issues if talks on something as relatively minor as a settlement freeze takes matters to the brink.  "How are those two supposed to agree on Jerusalem, borders and right of return [of Palestinian refugees], if they can't find common ground on a simple extension of current settlement policy?"" asks one veteran US analyst.  And European, not mention Arab diplomats warn that while the US may try to assign blame proportionately [As one top official asked rhetorically, "Where were the Palestinians during the first nine months of the settlement freeze?"], the rest of the world will put the blame squarely on Israel.  European diplomats voice another, even greater concern.  As one said last week, "What is `Plan B?'" 
For some officials, an alternative route would be reaching out to Syria.  Over the years, a number of Israelis, including Netanyahu have expressed an interest in pursuing the Syrian "track."  And while the US has yet to send its Ambassador back to Damascus (due to a Senate "hold"), this has not stopped a parade of officials, including Speaker of the House Pelosi, Senate Foreign Relations Committee Chairman Kerry, as well as most recently Special Envoy George Mitchell from making the trek there. Part of the appeal of increased US engagement with Syria, in the view of those advocating it, is that it could help head off what many fear will be renewed violence in Lebanon....
     
 For some, apparently including the younger Hariri, Syria could provide a buffer against this eventuality.  Saad has journeyed to Damascus in an attempt to sidle up to Syrian President Assad.  This moves follows closely a rapproachment between Saudi Arabia and Syria.  However, the STL operates independently of any government and Western governments, notably the US and France have firmly resisted entreaties to intercede with the STL.  Moreover, the initial price US officials believe Assad wants Lebanon to pay is a denunciation of the STL and a cut-off in Lebanon's financial contribution to this international organization.  This seems to be what the Saudis would prefer as well, say key State Department officials.  Says one veteran insider, "The Saudis want to kill the STL.  Lebanon is not important enough to them anymore."
What does concern the Saudis the most, is, of course, the Iranian threat.  But here too, say US officials, Riyadh has been less than a reliable partner.  Says one key US official, "The Saudis -- and by extension, the Arabs -- want the Iranian `problem' solved.  But just want us to make it go away."  Or as one of his colleagues put it this week, "We [Saudis] don't want to take any risks.  You do it" [Parenthetically he added, "They act lot like Abu Mazen."]
In "solving' the Iranian problem, top US officials believe they have gone a long way, notably with the increasingly burdensome sanctions that have been applied to Iran.  Although Iranian businessmen have shouldered most of the burden so far, some analysts say it is only a matter of time before the political elite has to grapple with increasing isolation.  "The Iranians were first surprised when we got the UN resolution," argues one key US official.  Next, the EU [European Union] expanded them dramatically.  Now, we have the Asians, especially the Japanese and South Koreans, cooperating."  Treasury, long active in going after banks and businesses cooperating with banned Iranian entities, are now, under the continued leadership of Under Secretary Stuart Levey, become even more aggressive.  And even when some in the Administration albeit, a minority, talk of trying again to engage the Iranian leadership in a dialogue, along comes the likes of President Ahmadinejad spinning conspiracy theories ....
Most analysts say Ahmadinejad is playing to a domestic audience.  Under attack by key figures in the clerical establishment, he is engaged in nothing less than a struggle for control in Teheran.  With subsidies to be ended, there is fear of a public backlash [even though the time line for their elimination could be as long as five years].  And although these officials believe the opposition "Green Movement" is "effectively non-existent" to use a senior State Department words, Ahmadinejad's supporters still attack its leadership both rhetorically and most recently physically with assaults on their homes.  "There is a warning there for all who dissent," says one US official.  "And as long as Ahmadenijad has the backing of the "Supreme Leader" he will continue to be successful [This official is convinced that Ayotollah Khameini - the Supreme Leader -- still finds Ahmadinejad useful as a "lightning rod" or "foil" for his own hard line views."]
      
As for the allure of attracting Syria away from Iran's orbit, veteran US analysts consider it a waste of time for the US as well as other more interested parties, including the Saudis and some European governments.  They argue that the Syrians already believe they are on a roll.  Assad, in their view, has already discounted US and Israeli complaints about handing over missile systems to Hezbollah [Survey May 26, 2010]; brought Saudi King Abdallah back to him, kept his relationship with Iran and continues playing politics (albeit with modest success) in Iraq.  For the US to add an approach on the peace process, says this official, "...would only feed his arrogance."