U.S. downplays Iranian missiles, Iranian president welcomes direct talks with U.S.

Lebanon, Syria to establish diplomatic ties

French president inaugurates UFM summit in Paris

Palestinian president threatens to freeze contacts, negotiations with Israel

The White House downplayed the risk of war between Iran and the United States, despite Iranian missile tests and some tough talk by US Secretary of State Condoleezza Rice.

Asked about an apparent contradiction between Rice's comment about tightening US security in the Gulf and those made earlier by Defense Secretary Robert Gates, Tony Fratto, a White House spokesman, said "I think secretary Gates was very accurate" about risks not having increased.

Gates told reporters he did not believe there was increased risk following a string of missile tests, including one of a missile capable of hitting Israel.

"Secretary Gates was right, there is no particular increase," Fratto said. And Iran moved ahead with new missile tests in the Gulf.

Rice warned Iran that Washington had beefed up its security presence in the Gulf and would not hesitate to defend Israel and other allies.

"We will defend American interests and the interests of our allies," Rice said, answering a question on an Iranian threat to "set fire" to Israel.

"We take very strongly our obligation to defend our allies and we intend to do that," she said at a news conference on a visit to Tbilisi, Georgia.

"In the Gulf area, the United States has enhanced its security capacity, its security presence and we are working closely with all our allies... to make (sure) they are capable of defending themselves," she said.

Fratto did not give details on any security measures the United States may have taken in the region.

Iran test-fired more long-range missiles overnight in a second round of exercises meant to show that the country can defend itself against any attack by the U.S. or Israel, Iranian state television reported.

The weapons have "special capabilities" and included missiles launched from naval ships in the gulf, along with torpedoes and surface-to-surface missiles, the broadcast said. It did not elaborate.

A brief video clip showed two missiles being fired simultaneously in the darkness.

While keeping the military option on the table, the U.S. government is counting heavily on diplomacy including direct talks with Tehran as the best way to wean Iran away from building nuclear weapons.

The tests brought a relatively calm response from the U.S., at least initially, with the White House calling on Iran to refrain from any more tests.

Secretary of State Condoleezza Rice and Defense Secretary Robert Gates said the tests were more evidence of the need for the U.S. missile defense system.

Rice sharpened her language later, warning Iran that the United States will not back down in the face of Iranian threats against Israel.

"We are sending a message to Iran that we will defend American interests and the interests of our allies," Rice said in Georgia at the close of a three-day Eastern European trip.

Among the missiles Iran said it tested was a new version of the Shahab-3, which officials have said has a range of more than 2,000 kilometers and is armed with a 1-ton conventional warhead.

That would put Israel, Turkey, the Arabian Peninsula, Afghanistan and Pakistan all within striking distance.

Wednesday's missile tests were conducted at the Strait of Hormuz, a strategic waterway at the mouth of the gulf through which up to 40 per cent of the world's oil passes. Iran has threatened to shut down traffic in the strait if attacked.

Another Iranian state channel, Press TV, quoted a senior Republican Guard commander as saying Iran would maintain security in the Strait of Hormuz and the larger Gulf.

Gen. Mohammad Hejazi, chief of the Guards' joint staff, called the missile tests a "defensive measure against invasions," according to the channel's Web site.

Iran will not jeopardize the interests of neighboring countries, he said without elaborating.

Iran test-fired nine missiles, including at least one capable of striking Israel, and asserted that thousands more were "ready for launch," but Bush administration officials downplayed the possibility of military action against the Islamic republic and belittled Iran's claims of progress on its nuclear program.

Defense Secretary Robert Gates told reporters the world was not closer to a military confrontation, even though Iran's missile launch came just days after Israel conducted its own high-profile military exercise in the Mediterranean.

"What we're seeing is a lot of signaling going on," he said, adding that both Israel and Iran "understand (the) consequences" of military action.

Undersecretary of State William Burns told Congress that "we view force as an option that is on the table but a last resort." Burns said the United States and its allies had made progress in thwarting Iran's nuclear ambitions, saying: "While deeply troubling, Iran's real nuclear progress has been less than the sum of its boasts."

The statements by the Bush administration contrasted with tougher talk by the two presidential candidates.

Sen. John McCain, R-Ariz., the presumptive Republican nominee, issued a statement against Iran that the tests "demonstrate again the dangers it poses to its neighbors and to the wider region, especially Israel."

Sen. Barack Obama, D-Ill., fired back that the missiles showed "the threat from Iran's nuclear program is real and it is grave" and that it is necessary to begin "direct, aggressive and sustained diplomacy."

The two campaigns then squabbled over whether Obama had supported strong action against the Iranian Revolutionary Guards.

With only six months remaining in President Bush's term, senior officials have repeatedly dismissed the possibility of military strikes against Iran's nuclear facilities. Instead, the administration has stepped up a diplomatic effort, both toughening sanctions and joining other leading nations in sweetening incentives for Iran to suspend its nuclear activities and begins serious negotiations.

Secretary of State Condoleezza Rice last month even signed a joint letter to the Iranian foreign minister offering the deal, though the administration has refused thus far to allow a senior U.S. official to join other foreign officials in talks in Tehran.

Iran has responded with cryptic and somewhat encouraging comments, though it has continued to work on its nuclear program. Javier Solana, the European Union foreign-policy chief and main Western interlocutor on Iran's nuclear program, is expected to meet with Iranian officials next week.

State Department spokesman Sean McCormack noted that Iran has conducted similar exercises, including missile tests, in recent years. But analysts said the tests, along with Iranian rhetoric, was meant as highly symbolic warning to Israel and the United States.

"We warn the enemies who intend to threaten us with military exercises and empty psychological operations that our hand will always be on the trigger and our missiles will always be ready to launch," Revolutionary Guards air force commander Hossein Salami said, according to the official IRNA news agency.

The Iranian naval games, dubbed the "The Great Prophet 3," are taking place at the mouth of the Strait of Hormuz, a strategic gulf waterway that handles about 40 percent of the world's oil. U.S. and British warships also are conducting exercises in the gulf.

Iran tested nine missiles, including the Shahab-3, which has a conventional warhead weighing 1 ton and which Iran claims has a range of about 1,200 miles - sufficient to strike Israel and other U.S.-linked targets.

John Pike, the director of GlobalSecurity.org, a defense consulting group, said that missile, which has been adapted from an old North Korean model, clearly is being refined to deliver nuclear weapons.

"If they are not developing nuclear weapons for this missile, why are they continuing to test it? It is worthless otherwise," he said. "They are still working on a delivery system, which is a major piece of the puzzle of the nuclear program."

The European Union voiced concern over Iranian missiles tests in the Gulf and stepped up calls on Tehran to suspend uranium enrichment within its disputed nuclear program.

Russia said Iran's missile tests showed there is no military justification for U.S. plans for a missile shield in eastern Europe, arguing that the shield was beyond the range of Tehran's rockets.

Iran this week test-fired several missiles it said were capable of reaching Israel and U.S. bases in the Middle East. The United States has reminded Tehran it was ready to defend its allies.

The escalating tension has helped to push oil prices to a new record high of near $147 a barrel. Iran is the world's fourth-largest oil exporter and there are fears of supply disruptions in the event of conflict.

The French Presidency of the European Union expressed concern over the missile tests.

"The EU calls on Iran to finally react to the entire international community's demands as expressed in (U.N.) Security Council resolutions to reach a negotiated solution on the nuclear issue," it added in a statement.

The United States and European powers suspect Iran is trying to develop a nuclear weapon, using its civilian nuclear program as a cover. Tehran denies any such intention and says its nuclear program is exclusively to generate electricity.

The United States has refused to rule out military action against Iran over the nuclear issue, although it says it is committed to finding a diplomatic solution, and has joined other world powers in offering Tehran a new package of incentives to suspend its uranium enrichment.

In Tehran, a national security official said that Iran's chief nuclear negotiator will meet European Union foreign policy chief Javier Solana in Geneva on July 19 for talks on Iran's nuclear program.

"Based on Solana's invitation, Saeed Jalili will meet Solana in Geneva on July 19 to discuss the nuclear package," Ahmad Khademolmelleh, spokesman for Iran's Supreme National Security Council, said in a statement sent to Reuters.

Solana presented the package of incentives proposed by world powers to coax Iran to halt sensitive nuclear work the West fears is aimed making bombs in June. Iran has offered its own package to resolve the standoff.

Russia, which has close energy industry ties to Iran, said the missile tests showed that U.S. plans to site a missile shield in Poland and the Czech Republic were unnecessary.

"The tests in Iran have only confirmed that Iran at the moment has rockets with a range of up to 2,000 km (1,243 miles). That confirms what we have said before," Russian Foreign Minister Sergei Lavrov told a news briefing.

"That is that the current idea of deploying a U.S. ... missile shield in Europe, with its parameters, is not needed to monitor and react to these particular rockets with this range," he added.

Washington, arguing that the shield is needed to defend against any missile attacks from countries such as Iran, has signed an accord with Prague on installing a tracking radar on the Czech Republic's soil as part of the anti-missile shield, and is pushing Poland to host another part of the project.

Russia says the U.S. plans are a direct threat to its security.

Lavrov said negotiations, not threats, were the only way to resolve the dispute with Iran.

"Overall we are in favor of any problems which are linked to Iran being resolved through negotiations, political and diplomatic methods, by bringing Iran into a mutually respectful and concrete dialogue," Lavrov said.

Israel says it will publicly display an advanced aircraft that can spy on Iran.

Israel's Army Radio says the plane is being shown in response to Iran's missile test.

State-run Israel Aerospace Industries plans an in-house exhibit of the Eitam airplane, which is equipped with sophisticated intelligence-gathering systems. The plane was first unveiled a year ago.

Iran test-fired long- and medium-range missiles during war games to show it could retaliate against any U.S. or Israeli attack.

Israel considers Iran its greatest enemy and says Tehran cannot be allowed to develop nuclear weapons that could be used against the Jewish state. Tehran insists its nuclear program is peaceful and designed only to produce energy.

Iran's hard-line president said he would welcome direct talks with the U.S. if both parties are on equal footing, adding such talks could happen "in the near future."

President Mahmoud Ahmadinejad did not say whether any definite plans for such bilateral talks were under way.

"We will hold talks with the United States if they come to us on equal footing," Ahmadinejad said in a live speech on state TV.

Ahmadinejad also said he will attend the next U.N. General Assembly in New York in September in order to defend Iran's rights and propose changes to what he called the "unjust" Western system of administering international organizations. Ahmadinejad has attended every annual U.N. General Assembly meeting since he was elected in 2005.

Washington has no diplomatic ties with Iran. But recognizing its influence on Iraqi stability, officials last year opened limited discussions with Iranian officials focused only on Iraq, where the U.S. accuses Tehran of arming Shiite militias.

The U.S. has said it will not talk with Iran about its disputed nuclear program unless Tehran agrees first to halt uranium enrichment — a process that can be used to generate electricity, or make a nuclear bomb.

"Equal footing means that when two people want to talk, both have to be on equal terms. Dialogue doesn't make any sense if one side stands in a higher position and the other in a lower position," Ahmadinejad said.

Iran would destroy Israel and 32 U.S. military bases in the Middle East if the Islamic Republic was attacked over its disputed nuclear program, a senior Iranian official was quoted as saying.

The Islamic Republic and Israel have been embroiled in an escalating war of words in recent weeks, increasing speculation of military confrontation and helping to send global oil prices to record highs.

Iranian missile tests this week further stoked tension and rattled financial markets.

"The U.S. knows full well that with the smallest move against Iran, Israel and 32 U.S. military bases in the region would not be out of the reach of our missiles and would be destroyed," the semi-official Fars News Agency quoted Mojtaba Zolnour as saying in a speech.

Zolnour is the deputy of Supreme Leader Ayatollah Ali Khamenei's representative in Iran's elite Revolutionary Guards.

French President Nicolas Sarkozy urged the disparate and conflicted countries around the Mediterranean Sea to make peace as European rivals did in the 20th century, as he launched an unprecedented Union for the Mediterranean.

Yet the summit did not mask all the divisions that crisscross the region: Syria's President Bashar Assad left the enormous table before Israeli Prime Minister Ehud Olmert gave his speech to the more than 40 leaders seated around it, Israeli government officials said on condition of anonymity because of the sensitivity of the matter.

It was the first time the two men had sat at the same table.

"The European and the Mediterranean dreams are inseparable," Sarkozy told leaders from more than 40 nations in Europe, the Middle East and North Africa. "We will succeed together; we will fail together."

The union Sarkozy championed as a pillar of his presidency brought together around one table for the first time dignitaries such rival nations as Israel and Syria, Algeria and Morocco, Turkey and Greece.

Coping with age-old enmities involving their peoples and others along the Mediterranean shores will be a central challenge to the new union encompassing some 800 million people.

"We will build peace in the Mediterranean together, like yesterday we built peace in Europe," Sarkozy said. He insisted the new body would not be "north against south, not Europe against the rest ... but united."

Sarkozy went to special efforts to bring Syria into the international fold for the summit: Assad met Lebanese President Michel Suleiman and German Chancellor Angela Merkel, separately, both for the first time. And he met Sarkozy, after years of chill between their countries.

Egypt's President Hosni Mubarak, co-presiding the summit with Sarkozy, said: "We are linked by a common destiny."

He said the union has better chances of success than a previous cooperation process launched in Barcelona in 1995 because the new body focuses on practical projects parallel to efforts toward Mideast peace.

Mubarak called on the new union to tackle reducing the wealth "gap" between north and south, and cited other southern Mediterranean "challenges" as education, food safety, health and social welfare.

"The success of the Union will depend on ... reforms and durable development," Mubarak said.

A draft declaration obtained by The Associated Press shows that summit participants will announce "objectives of achieving peace, stability and security" in the region. The six firm measures it names include a region-wide solar energy project, a cross-Mediterranean student exchange program and a plan to clean up the polluted sea.

The draft declaration says the Union for the Mediterranean is to be operational by the end of this year, and unlike any previous body, it will be jointly run by all its members. It will have a dual presidency, held jointly for rotating terms by one country within the European Union and one country on the Mediterranean shore.

Algeria's President Abdelaziz Bouteflika said he hoped the union would make it easier for North Africans to receive visas for Europe.

"Our common Sea should bring us closer together, not separate us," the president said in an interview with official Algerian news agency APS.

He also questioned whether the union would have enough money to get things done and whether "the EU really wants to contribute to bringing southern Mediterranean countries up to speed."

Germany's Merkel said, though, that the project would have about US$20.6 billion that has not yet been spent by the Barcelona Process — the forerunner of the Mediterranean union.

Merkel, who pushed to expand Sarkozy's idea to include all 27 EU nations, called Sunday's meeting "a very good start" and said it could help the Middle East conflict.

The Union for the Mediterranean is Sarkozy's brainchild and was timed to coincide with the French presidency of the European Union. Paris holds the rotating post until the end of this year.

But Sarkozy's ambitious plan overlapped with EU projects already in progress, and it was melded into EU efforts and expanded to include 27 members of the European Union, not just those on the Mediterranean coast.

France's president said that Syria and Lebanon will open embassies in each other's countries for the first time. But Syria's leader cautioned there was still work to be done before that could happen. Syria and Lebanon have not had full-fledged embassies in each other's countries since Lebanon became independent in 1943 and Syria in 1945. Syria dominated Lebanon for almost three decades until 2005, keeping tens of thousands of troops stationed in its smaller neighbor.

Syrian President Bashar Assad said last month that establishing diplomatic ties with Lebanon would be possible if a national unity Cabinet were formed in Beirut between the anti-Syrian parliamentary majority and the opposition led by Syrian ally Hezbollah. The unity government was formed after weeks of haggling.

"President Bashar al-Assad's will to open diplomatic representation in Lebanon is historic progress," Sarkozy told reporters at a news conference after he met Assad and Lebanese President Michel Suleiman separately. But Assad was more cautious on the opening of embassies, saying both countries must "define the steps to take to arrive at this stage."

"Naturally, there are a certain number of legal questions to be resolved on the Syrian side. ... That explain delays on the road to realization," Sarkozy said. He did not suggest a time frame.

Suleiman said he wanted to upgrade ties.

"We want an exchange of ambassadors and diplomatic relations with Syria," he said before meeting Sarkozy. He told reporters not to speak of normalizing ties between Lebanon and Syria because "they are completely normal."

"I am very satisfied with relations between the two countries," Suleiman said.

The leaders met on the eve of a summit bringing together heads of state or government from 43 nations in Europe and around the Mediterranean rim. Sarkozy sees the initiative as a way of seeding peace in an often hostile region.

Talk of embassies marks an important shift in relations between Syria and Lebanon and serves as a boost to Sarkozy. France holds the rotating European Union presidency, and Sarkozy wants to create a consequential role for Europe, and his country, in the process toward Middle East peace.

Sarkozy also asked Assad for help in easing the international standoff with Iran over its nuclear program. Assad, in his turn, asked France to help facilitate a peace deal between Syria and Israel.

Sarkozy also called for reviving efforts toward an EU cooperation deal with Syria that stalled in 2005. He said he plans to visit Damascus in September but did not set a date.

Meanwhile, Syrian President Bashar al-Assad discussed with the UN Secretary General Ban Ki-moon in his residence in Paris the latest developments in the Middle East, including the indirect negotiations between Syria and Israel under Turkish mediation.

Mr. Ki-Moon expressed content over the positive developments of the situation in the region, pointing out to the very positive atmosphere that followed the meeting between President al-Assad and Sarkozy and the quartet Summit.

The UN chief also voiced appreciation over Syria's stances in supporting the implementation of Doha Agreement articles and the formation of the national unity government in Lebanon as well as the announcement by President al-Assad on the moves to establish diplomatic relations with Lebanon after the completion of the necessary.

In this regard, President al-Assad said the relations between Syria and Lebanon existed very long time ago, pointing out that the main problem for the two countries leis in the Israeli occupation of parts of their lands.

President al-Assad stressed that ending the Israeli occupation of the Arab lands is essential for giving the peace a real opportunity in our region, pointing out to the importance of the UN resolutions which call for the restoration of the lands and rights to their owners.

For his part, Mr. Ki-Moon welcomed the indirect negotiations between Syria and Israel, expressing pleasure that Syria had committed to all of what she had already announced.

He added that the Syrian stances are clear and didn't change, and works for the region's security and stability.

On the Palestinian issue, the two sides stressed necessity of achieving the Palestinian national accord and it importance in establishing peace in the region and ending the suffering of the Palestinian people.

The meeting was attended by Syrian Foreign Minister Walid al-Moallem and the delegation accompanying the UN secretary General.

Meanwhile, Palestinian President Mahmoud Abbas will inform Israeli Prime Minister Ehud Olmert and international leader, that the Palestinian leadership will no longer tolerate the expansion of the Israeli settlements and is moving towards a decision to “freeze’ all contacts, negotiations inclusive, with the Israeli side, unless the ongoing expansion of settlement activity is totally stopped, PLO Secretary General Yasser Abed Rabbo warned.

The Israeli occupation municipality of Jerusalem approved the construction of 1800 illegal settler housing units, 920 in Har Homa (Jabal Abu Ghneim) and the rest in Pisgat Ze’ev colonial settlements, in the eastern Palestinian part of the city, which Israel occupied in 1967.

“We are working with the Arab group at the United Nations Security Council (UNSC) to adopt a resolution on the Israeli settlement stipulating a total stop thereof and to overcome the obstacles raised by the U.S.” against adopting such a resolution, Abed Rabbo, the Secretary General of the Executive Committee of the Palestine Liberation Organization (PLO) told reporters at a press conference he held at the Palestine Media Center (PMC) in the West Bank town of Al-Beira.

Abed Rabbo referred in this regard to the ruling by the International Court of Justice in The Hague on July 9 four years ago that deemed Israel's construction of the 430-mile Wall of Annexation and Expansion in the occupied West Bank illegal. “We work towards activating this ruling” especially at the UNSC, he said.

U.S. Ambassador Zalmay Khalilzad opposed an Arab motion at UNSC to re-declare the Israeli colonial settlements in occupied Palestinian territories illegal and condemn new constructions in East Jerusalem, saying: "For us, the criteria for an acceptable resolution which can make it to the council, is that it is balanced."

The League of Arab States urged the council in a statement issued at UN headquarters on to take action on the draft "soon," complaining that its previous draft resolution submitted a month ago on the same issue of settlements has been ignored.

Abed Rabbo confirmed that the upcoming visits by Palestinian and Israeli negotiators to Washington this month would not include trilateral talks with U.S. officials.

“So far there is nothing to confirm holding trilateral talks,” he told reporters.

Abed Rabbo strongly criticized the Israeli three-day long crackdown on civilian infrastructure in the northern West Bank city of Nablus, justified by the Israeli occupation authorities as targeting Hamas – affiliated institutions. “We consider the Israeli acts in Nablus basically directed against the Palestinian National Authority (PNA) in order to weaken and undermine its role and jurisdiction to impose law and order,” he said.

“They are closing institutions that are subject to Palestinian laws and authorized by these laws,” he indicated.

“Israel has got used to these methods because chaos and (Palestinian) division, as well as the coup in Gaza, are its allies,” he added.

The toppled Palestinian Prime Minster, Ismail Haneyya, confirmed the commitment of the Palestinian side with the terms of the calm agreement despite a few individual breaches.

Haneyya also said, during a meeting with a delegation from the Carter Center, that he is prepared to accept the Carter Center to monitor the calm and any breaches from the Palestinian or the Israeli occupation side.

Heneyya briefed the visiting delegation on the latest developments on the calm agreement pointing to the numerous Israeli occupation breaches which include the killing of a Palestinian youth in southern Gaza, firing at farmers and fishermen, and continuation of the siege, in addition to assassinations in the West Bank and closure of civil institutes.

He warned of the negative repercussions of such breaches and emphasized the importance of commitment to the calm which serves the Palestinian national interests.

Haneyya called on the visiting delegation to intervene to pressure the occupation government to observe the calm agreement and allow the much needed material to enter the Gaza Strip.

With reference to the Hamas delegation to Egypt, Haneyya emphasized the importance of re-opening the Rafah crossing after agreement between the concerned parties; the PA in Ramallah, the government in Gaza, Egypt and EU.