Good News and a Big Squeeze

President George W. Bush last week plugged a gaping hole in the U.S. war against terrorism by expanding the executive order freezing the assets of terror groups to include Hamas, Hezbollah, the Popular Front for the Liberation of Palestine and Islamic Jihad.

Jewish leaders hailed the decision, which they said corrected an omission that left the administration open to charges of hypocrisy as U.S. troops hunt down terror mastermind Osama bin Laden.

But some warned that the move was part of a broader diplomatic offensive that also includes fierce new pressure on both Israel and the Palestinians.

That pressure was apparent this week as Israeli forces withdrew from Palestinian towns, despite ongoing violence.

The diplomatic effort may also include a long-delayed official statement of U.S. goals for the region — goals that will include Palestinian statehood. Palestinian officials expect that statement to come at the opening of the United Nations General Assembly in New York next week, either by Bush or by Secretary of State Colin Powell.

The new terror group designations are “an important development, and it’s consistent with what they said from the beginning — that you cannot attack terrorism piecemeal,” said Malcolm Hoenlein, executive vice chair of the Conference of Presidents of Major American Jewish Organizations. The new executive order, which adds 22 organizations to the original presidential order, requires foreign financial institutions and governments to freeze the assets of designated terror groups or face sanctions.

The expanded list now includes the four Mideast terror groups, as well as Irish, Colombian and Basque terror organizations. Kahane Chai, an Israeli extremist group, was also cited. “Although the current focus of the campaign is the elimination of the Al Qaeda terrorist network, we will not rest until every terrorist group has been removed as a threat to the United States, our citizens, our interests, and our friends and allies,” said Richard Boucher, the State Department spokesman, who also promised a long and what he termed “methodical” campaign against terrorism.

Jewish leaders who have met with administration officials in recent days say the move reflects longstanding administration policy, not an abrupt change in direction.

“It’s not a huge step, but it’s an important one,” said Abraham Foxman, national director of the Anti-Defamation League (ADL). “They always said they would start focusing on these groups; the question was only when.”

Input from Jewish leaders, he said, was also a factor in the decision. Washington officials “knew they looked a little silly, saying one thing about terrorism and doing another,” he said.

Foxman warned that adding the Mideast groups to the terror sanctions list — they are already on the official State Department terrorism list — will not cripple the anti-Israel groups overnight. “It will be down the road — and it will depend on the work we do with our moderate Arab allies,” he said. “They have to buy into the effort.”

One country quickly punched the no-sale button: Lebanese officials announced Tuesday that its Cabinet would spurn the terrorist designation for Hezbollah, which operates from Lebanese sanctuaries.

Some welcomed the decision, say it is part of a multitrack diplomatic offensive aimed at both advancing the anti-terror fight and reinforcing the shaky U.S.-led coalition by forcing the Israeli-Palestinian conflict into the background.

“When the first list [of groups whose assets were frozen] was announced, it was conspicuous because of who was missing,” said Robert O. Freedman, a Middle East scholar and peace process supporter. “This decision makes up for it; you can’t legitimate some terrorists and fight others.”

But while the decision made sense, he said, Israel’s leaders would be wise not to celebrate too enthusiastically. “The other shoe is going to drop,” he said.

The likeliest way that will happen is the long-rumored administration policy statement on the Middle East, which was postponed after the Sept. 11 terror attacks.

But the motivation behind that statement — to calm resentments in the Arab and Muslim world about a perceived U.S. tilt toward Israel and to demonstrate continued U.S. engagement in the region — is even stronger now, as Washington struggles to incorporate many of these states into its anti-terror coalition.

The new sanctions against Mideast terror groups are part of that overall effort to keep the Arab-Israeli conflict from disrupting the anti-bin Laden campaign.

“There is reason to feel satisfied about their inclusion on the list,” said David Makovsky, a senior fellow at the Washington Institute for Near East Policy. “It’s setting down an important marker about what the president said at the beginning: that this is about something broader than just Al Qaeda.”

At the same time, he said, the move was part of an effort to control the raging Mideast fires enough to prevent the new anti-terror coalition from getting singed.

“The broader picture here is that what the U.S. basically wants is for both Israel and the Palestinians to get off their radar screens as they focus on the war in Afghanistan,” Makovsky said.

Jewish and Israeli anger over the omission of the Mideast groups from the earlier sanctions list, he said, was becoming disruptive, he said.

Adding those groups now is consistent with the administration’s early promises — and “it’s also a way of calming Israel’s concern that it is being regarded as a sacrificial lamb in the coalition,” Makovsky said.

At the same time, images of Israeli tanks in Palestinian towns were disrupting the coalition effort, generating strong new pressure on Israeli Prime Minister Ariel Sharon to pull out, he said — which is what Sharon is now doing, despite unabated violence. The result: carrots for Israel in the form of the new terror designation, and sticks in the form of new, intense pressure from Washington.

Arafat is getting the same treatment.

The administration continues to dangle the possibility of a formal statement endorsing Palestinian statehood, and possibly even a meeting between Arafat and Bush at the U.N. next week. At the same time, Arafat is being subjected to intense pressure — public and private — to act decisively to end the violence.

“There are layers to this,” said Robert Lieber, a foreign policy scholar at Georgetown University. “On one hand, the Israeli-Palestinian conflict is not directly related to the terror attacks on America, or what drives bin Laden. Having said that, it makes U.S. diplomatic strategy somewhat easier if the violence in the region is ratcheted down. So there is some value for the administration to be seen twisting arms to reduce the violence. It’s the appearance that counts.”

But in the end, he said, those in the White House view the region with “a realistic understanding of the obstacles to serious progress in the peace process and an understanding of Arafat’s responsibility as being the key to make this happen. They are not naive.”