Stratfor's Morning Intelligence Brief

French President Jacques Chirac set the tone for France by arguing that most people shared his vision of a multi-polar world, in which the United States was not the sole dominant power. U.S. President George W. Bush pushed ahead with demands for further efforts to stop the sale and transfer of weapons of mass destruction, missiles and related technology.

The conversation between Chirac and Bush will continue before Bush leaves for the Middle East. But the subtext of all this is roughly as follows: The French are asking for the United States to allow for a multi-polar world. The United States' response is that if there were a multi-polar world, there would be nothing that the United States could do to prevent it. Multi-polarity is not a gift, but a reality created by national power. The unwillingness of the Europeans to create military forces that need to be reckoned with or economies that are dynamic and healthy is the reason that the multi-polar world they desire doesn't exist.

The most important thing about the G8 meeting is that the United States did not shift from this core position. Apart from discussions about terrorism, the United States is urging the Europeans to increase the flexibility of their economies, lower trade barriers, stop subsidizing farmers and allow the importation of genetically modified crops. Thus, the American positions concerning the French and Germans is that they have made themselves both incapable of politico-military effectiveness as well as allowing their economic structures to be crippled by archaic regulations and processes.

The U.S. concession was to attend the G8, thereby certifying that France, Germany and Russia continue to be significant powers. The United States also put an acceptable gloss on relations with France, and emphasized the importance of relations with Russia -- while pretty much freezing out Chancellor Gerhard Schroeder's Germany. However, the United States is not prepared to treat the G8 as a serious forum in which to conduct business until the Europeans increase their global effectiveness. The French and the Germans, in the midst of serious economic problems, are hardly in a position to increase their global capabilities. Therefore, from their point of view, Washington is bypassing them, while from the American point of view they have made themselves irrelevant. The American view: Power exists -- it cannot be bestowed.

That brings us to the Israeli-Palestinian relationship, where at least for the moment, something quite extraordinary is not happening. There have been no bombings by Hamas. Despite the fact that Bush is arriving June 3, Hamas has neither greeted his arrival as an occasion for intense suicide bombings nor, for the moment, has any new group emerged to take its place. Israel's Ariel Sharon -- who is probably the only Israeli prime minister who can take steps credibly -- has spoken about ending Israeli occupation of Palestinian territories and making hard decisions. Palestinian Prime Minister Mahmoud Abbas has made gestures toward a cease-fire, if not toward dismantling Hamas. The process is further along than we expected it to be. Undoubtedly, Bush is expecting a huge success in his meetings in Aqaba, Jordan, which will bury doubts about his policy in Iraq, where two more U.S. soldiers were wounded today.

The problem as we see it is in the long run. A substantial faction of Palestinians will not accept any agreement that recognizes Israel as a permanent state. Also, a substantial faction of Israelis will not accept any agreement that calls for dismantling settlements or recognizing a Palestinian state. These factions might be in the minority, but in the delicately balanced polities of both the Palestinians and Israelis, the factions have disproportionate influence. More to the point, the pattern has been for the Palestinian rejectionists to wage campaigns designed to provoke Israeli counters and collapse any peace process. We think there will be success on June 3, although we still find it difficult to see a way to a final settlement.

But this process has come farther than we expected in the first place -- and that in itself cannot be regarded as negligible.

************************************************************************ SITUATION REPORTS - June 2, 2003

1139 GMT - About 3,000 former Iraqi soldiers marched on the U.S. administration headquarters June 2 in Baghdad, demanding that they be paid or they would launch suicide attacks against U.S. forces. Paul Bremer, the U.S. civil administrator for Iraq, dissolved former Iraqi President Saddam Hussein's security force in May, firing 400,000 people. One Iraqi was injured in the protest. Some witnesses report that a car hit him, while others say they saw a U.S. soldier hit him with his rifle. Some of the protesters also demanded that U.S. forces leave Iraq.

1136 GMT - A team from the International Atomic Energy Agency (IAEA) is expected to be in Iraq by June 6, IAEA officials said. The team reportedly is only going to be allowed to inspect the Tuwaitha nuclear facilities, which is believed to have been badly looted and possibly missing radioactive material.

1125 GMT - The National League for Democracy (NLD) claims that 70 people were killed and many others were wounded when pro-Burmese government supporters attacked NLD leader Aung San Suu Kyi's motorcade on May 31. However, officials claim that only four people were killed and 50 were injured in the clashes. Burmese officials later arrested Suu Kyi and 19 of her supporters, and Suu Kyi reportedly is being held in "protective custody" in Rangoon, officials said. NLD spokesman Debbie Stothard said that this, combined with the closure of universities and other pro-democracy offices, seems to signal the start of a larger crackdown.

1119 GMT - North Korea has almost finished reprocessing 8,000 spent nuclear fuel rods, a U.S. delegation reported, citing North Korean officials. The delegation, led by U.S. Congressman Curt Weldon, R-Pa., met with senior North Korean officials the weekend of May 30 and reported that the North Koreans also claim to already have nuclear weapons.

1117 GMT - U.S. President George W. Bush and his French counterpart, Jacques Chirac, met for the first time since the war in Iraq on June 2 during the G8 summit. The two leaders are expected to discuss the current situation in the Middle East and the Israeli-Palestinian peace process. Bush is expected to leave the G8 summit June 2 for a summit in Egypt.

1110 GMT - The Moro Islamic Liberation Front (MILF) began a 10-day cease-fire at midnight local time June 2. Meanwhile, officials in Manila report that the Philippine military killed 19 MILF members May 31 on the southern island of Mindanao, and took over a rebel camp. Also, troops reportedly killed two more MILF members on June 2 while pursuing a group of 70 fighters. President Gloria Macapagal Arroyo has said that the military will not engage any fighters who peacefully surrender. The cease-fire will expire at midnight June 12.

1108 GMT - Zimbabwe opposition leader Morgan Tsvangirai was arrested June 2 in an attempt by authorities to stop the planned strikes aimed to drive President Robert Mugabe from power. Tsvangirai's group, Movement for Democratic Change, said that the protests would go on as scheduled. Meanwhile, NPR has reported that Tsvangirai later was released from jail.

1105 GMT - Two Iraqis were killed and two U.S. soldiers were injured during a firefight in the Abu Hanifa mosque in the Adamiya district of Baghdad on June 2, witnesses and U.S. troops reported. Witnesses said attackers tossed a grenade at the turret of an armored vehicle and then opened fire from the rooftop of a building across from the mosque. CENTCOM officials did not confirm or deny the report.