Iraq is turning old enemies in the Middle East into new friends, seeking regional allies in a bid to complicate Washington's plans to oust Saddam Hussein.
Using smuggled oil as a lever, say diplomats here, Baghdad is reversing 30 years of hostility to Syria and has boosted its influence in Damascus to unprecedented heights.
Though Syrian officials deny the country is buying Iraqi oil in breach of UN sanctions, they acknowledge that legal trade with their neighbor and historic rival has melted old enmities.
"We can say that our relations with Iraq are back to normal," says Adnan Omran, Syrian minister of information.
Syrian trade with Iraq under the oil-for-food program permitted by the UN reached an estimated $1 billion last year, double the 2000 figure. The two countries signed a free-trade pact last year, and resolved a decades-old dispute over the waters of the Euphrates River that had brought them to the brink of war in 1975.
Western diplomats, however, say the ties are even stronger. They suspect Damascus of buying another billion dollars' worth of Iraqi oil illegally last year, providing much needed funding to Saddam Hussein's regime. And there have been reports that Syria is brokering the sale to Iraq of a sophisticated Ukrainian military radar system.
The relationship has not always been so cozy. Syria and Iraq are ruled by rival branches of the Baath party, a pan-Arab socialist movement. Ties between the two countries soured in 1966 over ideological differences, later fueled by a deep personal animosity between Iraq's President Hussein and Hafez al-Assad, Syria's wily and uncompromising former president who died in June 2000.
The bilateral relationship was characterized by assassinations and bombings in each other's capitals and venomous accusations broadcast over the airwaves. Then in 1990, Syria joined the US-led alliance against Baghdad in the wake of Iraq's invasion of Kuwait.
The first signs of a rapprochement between the two countries came in June 1997, when their mutual border was opened for the first time since 1980 to allow the exchange of trade delegations. Since then, commercial relations have flourished. In July 1998, the two countries agreed to re-open a 552-mile pipeline linking the Kirkuk oil fields in northern Iraq with the Syrian port of Banias on the Mediterranean. Last year, Syria and Iraq signed a free-trade agreement and announced that they had resolved their dispute over the waters of the Euphrates.
In January, Britain accused Syria of importing at least 100,000 barrels of oil per day in 2001 in breach of UN sanctions. Other estimates have placed the oil imports as high as 200,000 barrels per day, sending up to $1 billion to go directly to the Iraqi regime."It's absolutely not true," says Mr. Omran. "It's another example of Israel printing certain accusations against Syria [which are] then believed in Washington."
US officials, however, are unimpressed with Syria's denials, describing them as "nonsense" and warning that Syria should "think carefully" about the repercussions of its growing détente with Iraq.
Yet Washington has kept relatively silent on Syria's alleged importing of Iraqi oil. The reason partly lies in the fact that Syria is not the only alleged beneficiary. Jordan and Turkey, key regional allies of the US, also allegedly benefit from the illicit oil trade with Iraq.
Syrians widely view the sanctions regime against Iraq as an example of American double standards in the Middle East and do not believe it should deter Damascus from forging a valuable economic partnership with Baghdad.
"The opening of the Iraqi market has helped Syria tremendously," says economist Nabil Sukkar. "There is a high level of trade between the two countries, and it should continue as much as possible, regardless of sanctions."
A Syrian political analyst agrees. "Syria's relationship with Iraq is very important economically and now politically," says the analyst. "American policy regarding Syria is in a way pushing the Syrians closer to Iraq. If America maintains a tough line with Syria, then I see Syria having an even deeper relationship with Iraq which might lead to more tension in the region."
Syria used its position on the UN Security Council to sharply criticize sanctions against Iraq during a debate earlier this week. But it decided at the last moment to vote Tuesday in favor of a resolution aimed at speeding up the supply of humanitarian goods to Iraq while maintaining a ban on armaments.
The strategic ramifications of Syria's ties to Iraq are "troubling" for Washington, analysts say, particularly as Iraq's cautious rapprochement with Iran is helping to create an arc of hard-line states that could have an impact on Middle East peace.
A formal alliance between Syria, Iraq, and Iran is unlikely because of the deep structural divisions between them, says George Jabbour, an adjunct professor of law at Aleppo University.
"But at the same time, Israel has to be counterbalanced, and coordination between Syria, Iraq, and Iran should make Israel more cautious in its aggressive foreign policy against Palestinians and other Arabs," he says.