Omanis recently took part in massive demonstrations in the northern city of Sohar and were knocking on the doors of Abu Dhabi. Both Saudi Arabia and the UAE, the last dictatorial powers in the region cannot ignore democracy. The people of the Gulf are fed up with the Gulf ruling elites and have awakened from their 40 year old slumber. It’s true that they’re not as poor as the Egyptians or Tunisians, but they are become increasingly more aware that a country’s wealth belong to the state and the state alone.

Some wikileaks documents suggest that peak oil production levels in the Gulf have already been met and that current supplies will only be sufficient for a couple more decades. These backward political regimes have lead to poor planning and corruption. The future for the youth is not so great.

Bahrain has given us a glimpse of what lies ahead in the future. Its oil reserves have diminished and its unable to change its fiscal policy or  turn itself into a modern state. For decades bahrainis have contributed towards the state but were denied any meaningful political representation by the ruling family. They were left with few options and hence took matters into their own hands. The Al Khalifa regime responded by using live ammunition and immediately unleashed their Pakistani mercenaries on the demonstrators. The regime had showed its true colours.

The regimes of both Saudi Arabia and UAE gave the Al Khalifa family unlimited moral support in crushing the protests by all means necessary. Both regimes tried to bribe their populations with financial incentives in order to stop the protests from spreading. The Saudi King Abdullah announced a 36 billion dollar spending program, which was promptly rejected by the protestors who felt insulted.

Saudi protestors chose the 11th of March as their day of rage, and openly called for overthrowing Al Saud’s regime. Had live ammunition been used on the protestors it would have catalysed protests in the Emirates. Thousands of UAE nationals are ignored by the oil rich states of Abu Dhabi and Dubai and live in modest conditions in the poor Northern Emirates. The majority are angry at the huge economic gap in wealth between the different federations  and at being excluded from participating in major policy decisions. Some are curious why large coastal lands were sold to foreign investors.

Also, a large number of stateless people live in both the Emirates and Saudi Arabia. They were born and brought up in the country of their grandfathers, yet find it perplexing that the regime’s friends nationalises Indians and westerners.

The Iranian meddling in Bahrain was temporarily to be put to a hold. However, the prey, albeit small in acreage, is too lucrative to be let go, and Iranian clandestine intervention continues. Bahrain, a small island kingdom in the Gulf, is coveted by Iran, its neighbor across the bay, as it has a lot to covet. Strategically located near the Hormuz straits, through which 20% of the world’s oil passes, with its own production of 40,000 oil barrels a day, and with huge gas reserves, Bahrain is definitely in the sights of the Iranian regime. What makes the Iranian move to indirectly swallow Bahrain a real risk is the fact that 70% of the Bahraini population is Shiite, such as 80% of Iran’s population, and the Bahraini Shiites look up to Iran for guidance, or even instructions.

The Saudi King and other Gulf States rulers read the map correctly and sent troops to protect Bahrain. The demise of the 200-year Bahrain rule of the Sunni dynasty currently headed by King Sheikh Hamad bin Isa Al-Khalifa’s and its replacement by a Shiite puppet of Iran could be ominous to their own regimes. Saudi Arabia is particularly vulnerable because its rich oilfields border with Bahrain and the local population in this region is mostly Shiite. A successful Shiite takeover of Bahrain could whet the appetite of the Saudi Shiites and their Iranian comrades to follow suit. Therefore, with the invitation of the Bahraini king, 3,500 Saudi soldiers crossed the bridge linking Saudi Arabia with Bahrain to help preserve the Bahraini regime.

The Iranians are far from liking this development, which all of a sudden shuffled their cards. Now, it is no longer tiny Bahrain defending itself from Iranian sponsored subversion — it is Iran versus Saudi Arabia and the United Arab Emirates. The bar has risen. Saudi Arabia, with a cash chest that would make King Midas envious and with the backing of the U.S, is a formidable rival to Iran.

The Iranian response to the Saudi move was quick. Local media in the northeastern city of Mashhad reported that 700 people gathered outside the Saudi consulate and stoned it to protest the killing of Shiites in Bahrain. If the Saudi government fails to take the hint, additional protests are likely to follow in other Iranian cities, including Tehran.

Saudi Arabia has increased its pressure on the U.S to intervene and prevent the operation of the Iranian nuclear plant in Bushehr. They quoted Dmitry Rogozin the Russian ambassador to NATO who repeated a previous warning sent by Russia that “The virus attack on a Russian-built nuclear reactor in Iran could have triggered a nuclear disaster on the scale of Chernobyl.” Now the concern is increased following the disaster in the Japanese reactors in Fukoshima. Although Fereydoun Abbasi the head of the Atomic Energy Organization, acknowledged that “Even before the earthquake and nuclear contamination crisis in Japan, Iran had accepted Russian experts’ proposal to revise its plans to load fuel into the core of the Bushehr power plant’s reactor,” Saudi Arabia continues with its pressure against Iran, as part of its effort to limit Iranian clandestine involvement in Bahrain.

The rivalry between Iran and Saudi Arabia is not new. The fervent Shiite Iran and the Sunni Saudi Arabia have long been struggling over the reign of world Muslims. Thus far, with its control of the two holy cities of Mecca and Medina, Saudi Arabia has the upper hand.

The saber rattling continues. Bahrain ousted the Iranian Consul in Manama, and the Iranians retorted in kind. Iran recruited once more Hezbollah, its subcontractor for dirty jobs. During a rally in Beirut, Hezbollah leader Nasrallah criticized Bahrain’s monarchy for bringing in troops from neighboring Saudi Arabia and other Gulf States to quash Shiite protests. Nasrallah said the blood of the people will eventually force their regimes to grant them greater rights.

The Bahraini Foreign Ministry condemned Hezbollah’s criticism of its government, describing it as an intervention in Bahrain’s internal affairs. A statement released by the Bahrain foreign ministry said Nasrallah’s verbal “assault against Bahrain and its people” was aimed at serving foreign interests, a reference to Iran, Hezbollah’s boss. The foreign ministry described Nasrallah as the “representative of a terrorist organization with a known history in destabilizing security in the region.” Apparently, Iran and its allies do not like others to play in what Iran considers its own playground.

Thus far the Iranians are wary not to directly confront the Saudis, and for a reason: For Iran, Saudi Arabia is the last major local power they need to win over; however, it is not a simple task. The Saudis’ big brother is watching — the U.S. The U.S has failed to intervene in Egypt because Egypt is dependent on U.S aid and therefore, it anticipated that the Egyptian response to the U.S lack of active support would be limited to verbal condemnation, if any. However, the terms of reference between the U.S and Saudi Arabia are diametrically different. It is Saudi Arabia that supports the U.S with money, oil and military bases. Therefore, Saudi interests and voices are more likely to be listened to attentively in Washington, D.C.

Nonetheless, the Sunnis in Bahrain have a lot to worry about. The Shiites in Bahrain demand a democratic republic instead of monarchy, and that simple message is certain to find many attentive ears in the U.S and elsewhere. However, democracy in Bahrain with a 70% Shiite majority, means Sunnis out, Shiites in, the U.S and its 5th Fleet harbor out, Iran in, including a control of the oil reserves and a direct threat to Saudi Arabia, the world’s largest producer of oil in fields located next door populated by Shiites.

As absurd as it may sound, it is likely that supporters of full Western style democracy in Bahrain may at the end of the day be supporting theocratic Iran.

A dilemma, Greek for “two premises,” has been likened to the horns at the front end of an angry and charging bull. Both premises are bad options.

If there were ever a decision tantamount to sitting on the horns of the dilemma, the choices the West needs to make are fitting. What would the West choose? Support democracy for approximately 350,000 Shiites in Bahrain, or risk an increased Iranian control of the spigots of the huge oil reserves, with the resulting immediate effect on the world’s economy?

By Haggai Carmon

Generally speaking, Saudi Arabia opposes any radical political change in any part of the world. Not only did it show hostility to the revolutions in the Arab world, but it also fought revolutions in Latin America (e.g. supporting the Contra rebels). Furthermore, the saudi royal family has continually funded the election campaigns of right wing conservatives in France and Italy, against their socialist rivals.

We already know from history that Saudi Arabia stood against the Egyptian Revolution of 1952, and the coups and revolutions that followed in Iraq and Syria. They were also hostile to the 1962 Yemeni Revolution, and the revolutionary regime in Southern Yemen and the radical political transformations in Libya, Sudan and Iran. Saudi Arabia perceives all forms of change to be dangerous, which must be stopped at all costs.

In the broader context Saudi Arabia has never supported any revolution or liberation movement, even those that were carried out by muslim minorities in the Philippines and Thailand, whose political leaders studied in Medina’s Islamic University in Medina!

One needs to differentiate between supporting a revolution and conspiring against a regime.In the late 1950s King Saud of  Saudi Arabia paid huge sums of money in order to get Gamal Abdel Nasser assassinated and hence divide the United Arab Republic. In recent years Saudi Arabia has sought to overthrow the regimes in Qatar and Oman who reject Saudi domination.

The Saudi royal family strives to give its anti-revolutionary policies religious legitimacy. Demonstrations and revolutions are forbidden, haram, whilst obedience to the rulers is obligatory! Their philosophy does not need much explanation: Every Saudi policy takes into consideration the local political situation into account, so that dissent is quietened.

Recently this religious anti-revolutionary principle was violated. The state prohibited demonstrations during the Egyptian and Tunisian revolutions, and threatened to crush the skulls of Saudi demonstrators (Sheikh Borake on Saudi State T.V). Half a million copies of fatwas, which prohibited “evil” demonstrations in the kingdom were handed out.

Today there’s a new classification to revolutions: Halal (permissible)  revolutions  which are desirable in Syria, Libya, Iraq,  Iran, Sudan and Algeria. And Haram (forbidden) revolutions in Yemen, Bahrain, Jordan, Egypt and Tunisia! This clearly shows that the religious justifications that prohibit demonstrations is ill founded and relies on the whims of those in power (i.e. the Saudi princes).

The halal revolutions are useful in removing any regime that the Saudi royal family dislikes or doesn’t serve their interests, as is the case in Syria and Libya. On the other hand, the haram revolutions are detrimental to the rulers of Riyadh and to their Wahhabi doctrine, as is the case with Egypt, Tunisia and Yemen.

There is no religious basis for classifying revolutions as either halal or haram, harmful or beneficial. These classifications are there to serve the interests of the Saudi ruling family.

Sectarian rhetoric was used during the Bahraini revolution in order to justify the Al Khalifa’s tyranny and reduce public sympathy for the revolution. Saudi Arabia’s military intervention succeeded in dividing political opinion in the Arab World.

The Bahraini protesters did not need to use sectarianism to unify their position because they represent the majority of the population. The Bahraini Government wanted to provoke sectarianism in order to lower its  political concession, and they have temporarily succeeded with the help of Saudi’s military intervention.

On the other hand Saudi’s sectarian sheikhs and media army killed the embryonic protest movement in Syria by emphasising the sectarian identity of the protest movement. The saudi media gave the impression that the conflict was between the suuni majority on the one hand and a minority Alawi government on the other hand. The aim of this sectarian incitement was to rally the sunnis against the Alawis, but this pathetic sectarian rhetoric scared all the other minorities, including the Christians and Ismailis against the protesters. The Saudi princes were late in realising the damage that their sectarian discourse had on the protest movement, it was too late.

Sectarian language was used widely in the Arabian Peninsula  and the source is almost always Saudi Arabia or Qatar. Iraq is a good example. The protests in Iraq were not designed to overthrow the government who was democratically elected, but the Al Jazeera channel placed these protests in the context of the Arab Spring. Al Jazeera lost alot of sympathy, especially when it chose to ignore the situation in Bahrain.

Sectarianism delegitimises revolutions  and ultimately leads to their collapse. The Bahraini protests were non-sectarian in nature, but were encircled by sectarianism. In Syria, sectarianism killed the revolution. In Saudi Arabia, the protestors were classified as shiite and belonging to Iran, and those who oppose the protests are proper muslims. Saudi Arabia has sought to play the sectarian card over and over again in Yemen, where the majority of the population belongs to both the Shafi’i and Zaidi sects. Their legendary wisdom has foiled Saudi Arabia’s plans in killing the revolution.

The revolutions in both Egypt and Tunisia were inspired by nationalist sentiment, which succeeded in bridging religious and regional gaps between their citizens. On the other hand, sectarianism is the most important driving factor in the Arabian Peninsula and its people are blinded by it. With it, Saudi Arabia has succeeded in suppressing the revolution in Bahrain by using Al Jazeera and Al Arabiya. Saudi Arabia’s goal is to bring the curtain down on democracy in the Gulf.

For three months, the Arab world has been awash in protests and demonstrations. It’s being called an Arab Spring, harking back to the Prague Spring of 1968.

But comparison to the short-lived flowering of protests 40 years ago in Czechoslovakia is turning out to be apt in another way. For all the attention the Mideast protests have received, their most notable impact on the region thus far hasn’t been an upswell of democracy. It has been a dramatic spike in tensions between two geopolitical titans, Iran and Saudi Arabia.

This new Middle East cold war comes complete with its own spy-versus-spy intrigues, disinformation campaigns, shadowy proxy forces, supercharged state rhetoric—and very high stakes.

“The cold war is a reality,” says one senior Saudi official. “Iran is looking to expand its influence. This instability over the last few months means that we don’t have the luxury of sitting back and watching events unfold.”

On March 14, the Saudis rolled tanks and troops across a causeway into the island kingdom of Bahrain. The ruling family there, long a close Saudi ally, appealed for assistance in dealing with increasingly large protests.

Iran soon rattled its own sabers. Iranian parliamentarian Ruhollah Hosseinian urged the Islamic Republic to put its military forces on high alert, reported the website for Press TV, the state-run English-language news agency. “I believe that the Iranian government should not be reluctant to prepare the country’s military forces at a time that Saudi Arabia has dispatched its troops to Bahrain,” he was quoted as saying.

The intensified wrangling across the Persian—or, as the Saudis insist, the Arabian—Gulf has strained relations between the U.S. and important Arab allies, helped to push oil prices into triple digits and tempered U.S. support for some of the popular democracy movements in the Arab world. Indeed, the first casualty of the Gulf showdown has been two of the liveliest democracy movements in countries right on the fault line, Bahrain and the turbulent frontier state of Yemen.

But many worry that the toll could wind up much worse if tensions continue to ratchet upward. They see a heightened possibility of actual military conflict in the Gulf, where one-fifth of the world’s oil supplies traverse the shipping lanes between Saudi Arabia and Iran. Growing hostility between the two countries could make it more difficult for the U.S. to exit smoothly from Iraq this year, as planned. And, perhaps most dire, it could exacerbate what many fear is a looming nuclear arms race in the region.

Iran has long pursued a nuclear program that it insists is solely for the peaceful purpose of generating power, but which the U.S. and Saudi Arabia believe is really aimed at producing a nuclear weapon. At a recent security conference, Prince Turki al Faisal, a former head of the Saudi intelligence service and ambassador to the U.K. and the U.S., pointedly suggested that if Iran were to develop a weapon, Saudi Arabia might well feel pressure to develop one of its own.

The Saudis currently rely on the U.S. nuclear umbrella and on antimissile defense systems deployed throughout the Persian Gulf region. The defense systems are intended to intercept Iranian ballistic missiles that could be used to deliver nuclear warheads. Yet even Saudis who virulently hate Iran have a hard time believing that the Islamic Republic would launch a nuclear attack against the birthplace of their prophet and their religion. The Iranian leadership says it has renounced the use of nuclear weapons.

How a string of hopeful popular protests has brought about a showdown of regional superpowers is a tale as convoluted as the alliances and history of the region. It shows how easily the old Middle East, marked by sectarian divides and ingrained rivalries, can re-emerge and stop change in its tracks.

There has long been bad blood between the Saudis and Iran. Saudi Arabia is a Sunni Muslim kingdom of ethnic Arabs, Iran a Shiite Islamic republic populated by ethnic Persians. Shiites first broke with Sunnis over the line of succession after the death of the Prophet Mohammed in the year 632; Sunnis have regarded them as a heretical sect ever since. Arabs and Persians, along with many others, have vied for the land and resources of the Middle East for almost as long.

These days, geopolitics also plays a role. The two sides have assembled loosely allied camps. Iran holds in its sway Syria and the militant Arab groups Hezbollah in Lebanon and Hamas in the Palestinian territories; in the Saudi sphere are the Sunni Muslim-led Gulf monarchies, Egypt, Morocco and the other main Palestinian faction, Fatah. The Saudi camp is pro-Western and leans toward tolerating the state of Israel. The Iranian grouping thrives on its reputation in the region as a scrappy “resistance” camp, defiantly opposed to the West and Israel.

For decades, the two sides have carried out a complicated game of moves and countermoves. With few exceptions, both prefer to work through proxy politicians and covertly funded militias, as they famously did during the long Lebanese civil war in the late 1970s and 1980s, when Iran helped to hatch Hezbollah among the Shiites while the Saudis backed Sunni militias.

But the maneuvering extends far beyond the well-worn battleground of Lebanon. Two years ago, the Saudis discovered Iranian efforts to spread Shiite doctrine in Morocco and to use some mosques in the country as a base for similar efforts in sub-Saharan Africa. After Saudi emissaries delivered this information to King Mohammed VI, Morocco angrily severed diplomatic relations with Iran, according to Saudi officials and cables obtained by the organization WikiLeaks.

As far away as Indonesia, the world’s most populous Muslim country, the Saudis have watched warily as Iranian clerics have expanded their activities—and they have responded with large-scale religious programs of their own there.

The 1979 Iranian revolution was a major eruption that still looms large in the psyches of both nations. It explicitly married Shiite religious zeal with historic Persian ambitions and also played on sharply anti-Western sentiments in the region.

Iran’s clerical regime worked to spread the revolution across the Middle East; Saudi Arabia and its allies worried that it would succeed. For a time it looked like it might. There were large demonstrations and purported antigovernment plots in Saudi Arabia’s Eastern Province, which has a large population of Shiite Muslim Arabs, and in Bahrain, where Shiites are a distinct majority and Iran had claimed sovereignty as recently as 1970.

The protests that began this past January in Tunisia had nothing to do with any of this. They started when a struggling street vendor in that country’s desolate heartland publicly set himself on fire after a local officer cited his cart for a municipal violation. His frustration, multiplied hundreds of thousands times, boiled over in a month of demonstrations against Tunisian President Zine al-Abidine Ben Ali. To the amazement of the Arab world, Mr. Ben Ali fled the country when the military declined to back him by brutally putting down the demonstrations.

Spurred on by televised images and YouTube videos from Tunisia, protests broke out across much of the rest of the Arab world. Within weeks, millions were on the streets in Egypt and Hosni Mubarak was gone, shown the door in part by his longtime backer, the U.S. government. The Obama administration was captivated by this spontaneous outbreak of democratic demands and at first welcomed it with few reservations.

In Riyadh, Saudi officials watched with alarm. They became furious when the Obama administration betrayed, to Saudi thinking, a longtime ally in Mr. Mubarak and urged him to step down in the face of the street demonstrations.

The Egyptian leader represented a key bulwark in what Riyadh perceives as a great Sunni wall standing against an expansionist Iran. One part of that barrier had already crumbled in 2003 when the U.S. invasion of Iraq toppled Saddam Hussein. Losing Mr. Mubarak means that the Saudis now see themselves as the last Sunni giant left in the region.

The Saudis were further agitated when the protests crept closer to their own borders. In Yemen, on their southern flank, young protesters were suddenly rallying thousands, and then tens of thousands, of their fellow citizens to demand the ouster of the regime, led by President Ali Abdullah Saleh and his family for 43 years.

Meanwhile, across a narrow expanse of water on Saudi Arabia’s northeast border, protesters in Bahrain rallied in the hundreds of thousands around a central roundabout in Manama. Most Bahraini demonstrators were Shiites with a long list of grievances over widespread economic and political discrimination. But some Sunnis also participated, demanding more say in a government dominated by the Al-Khalifa family since the 18th century.

Protesters deny that their goals had anything to do with gaining sectarian advantage. Independent observers, including the U.S. government, saw no sign that the protests were anything but homegrown movements arising from local problems. During a visit to Bahrain, Secretary of Defense Robert Gates urged the government to adopt genuine political and social reform.

But to the Saudis, the rising disorder on their borders fit a pattern of Iranian meddling. A year earlier, they were convinced that Iran was stoking a rebellion in Yemen’s north among a Shiite-dominated rebel group known as the Houthis. Few outside observers saw extensive ties between Iran and the Houthis. But the Saudis nonetheless viewed the nationwide Yemeni protests in that context.

In Bahrain, where many Shiites openly nurture cultural and religious ties to Iran, the Saudis saw the case as even more open-and-shut. To their ears, these suspicions were confirmed when many Bahraini protesters moved beyond demands for greater political and economic participation and began demanding a constitutional monarchy or even the outright ouster of the Al-Khalifa family. Many protesters saw these as reasonable responses to years of empty promises to give the majority Shiites a real share of power—and to the vicious government crackdown that had killed seven demonstrators to that point.

But to the Saudis, not to mention Bahrain’s ruling family, even the occasional appearance of posters of Lebanese Hezbollah leader Hassan Nasrallah amid crowds of Shiite protesters pumping their fists and chanting demands for regime change was too much. They saw how Iran’s influence has grown in Shiite-majority Iraq, along their northern border, and they were not prepared to let that happen again.

As for the U.S., the Saudis saw calls for reform as another in a string of disappointments and outright betrayals. Back in 2002, the U.S. had declined to get behind an offer from King Abdullah (then Crown Prince) to rally widespread Arab recognition for Israel in exchange for Israel’s acceptance of borders that existed before the 1967 Six Day War—a potentially historic deal, as far as the Saudis were concerned. And earlier this year, President Obama declined a personal appeal from the king to withhold the U.S. veto at the United Nations from a resolution condemning continued Israeli settlement building in Jerusalem and the West Bank.

The Saudis believe that solving the issue of Palestinian statehood will deny Iran a key pillar in its regional expansionist strategy—and thus bring a win for the forces of Sunni moderation that Riyadh wants to lead.

Iran, too, was starting to see a compelling case for action as one Western-backed regime after another appeared to be on the ropes. It ramped up its rhetoric and began using state media and the regional Arab-language satellite channels it supports to depict the pro-democracy uprisings as latter-day manifestations of its own revolution in 1979. “Today the events in the North of Africa, Egypt, Tunisia and certain other countries have another sense for the Iranian nation.… This is the same as ‘Islamic Awakening,’ which is the result of the victory of the big revolution of the Iranian nation,” said Ayatollah Ali Khamenei.

Iran also broadcast speeches by Hezbollah’s leader into Bahrain, cheering the protesters on. Bahraini officials say that Iran went further, providing money and even some weapons to some of the more extreme opposition members. Protest leaders vehemently deny any operational or political links to Iran, and foreign diplomats in Bahrain say that they have seen little evidence of it.

March 14 was the critical turning point. At the invitation of Bahrain, Saudi armed vehicles and tanks poured across the causeway that separates the two countries. They came representing a special contingent under the aegis of the Gulf Cooperation Council, a league of Sunni-led Gulf states, but the Saudis were the major driver. The Saudis publicly announced that 1,000 troops had entered Bahrain, but privately they concede that the actual number is considerably higher.

If both Iran and Saudi Arabia see themselves responding to external threats and opportunities, some analysts, diplomats and democracy advocates see a more complicated picture. They say that the ramping up of regional tensions has another source: fear of democracy itself.

Long before protests ousted rulers in the Arab world, Iran battled massive street protests of its own for more than two years. It managed to control them, and their calls for more representative government or outright regime change, with massive, often deadly, force. Yet even as the government spun the Arab protests as Iranian inspired, Iran’s Green Revolution opposition movement managed to use them to boost their own fortunes, staging several of their best-attended rallies in more than a year.

Saudi Arabia has kept a wary eye on its own population of Shiites, who live in the oil-rich Eastern Province directly across the water from Bahrain. Despite a small but energetic activist community, Saudi Arabia has largely avoided protests during the Arab Spring, something that the leadership credits to the popularity and conciliatory efforts of King Abdullah. But there were a smattering of small protests and a few clashes with security services in the Eastern Province.

The regional troubles have come at a tricky moment domestically for Saudi Arabia. King Abdullah, thought to be 86 years old, was hospitalized in New York, receiving treatment for a back injury, when the Arab protests began. The Crown Prince, Sultan bin Abdul Aziz, is only slightly younger and is already thought to be too infirm to become king. Third in line, Prince Nayaf bin Abdul Aziz, is around 76 years old.

Viewing any move toward more democracy at home—at least on anyone’s terms but their own—as a threat to their regimes, the regional superpowers have changed the discussion, observers say. The same goes, they say, for the Bahraini government. “The problem is a political one, but sectarianism is a winning card for them,” says Jasim Husain, a senior member of the Wefaq Shiite opposition party in Bahrain.

Since March 14, the regional cold war has escalated. Kuwait expelled several Iranian diplomats after it discovered and dismantled, it says, an Iranian spy cell that was casing critical infrastructure and U.S. military installations. Iran and Saudi Arabia are, uncharacteristically and to some observers alarmingly, tossing direct threats at each other across the Gulf. The Saudis, who recently negotiated a $60 billion arms deal with the U.S. (the largest in American history), say that later this year they will increase the size of their armed forces and National Guard.

And recently the U.S. has joined in warning Iran after a trip to the region by Defense Secretary Gates to patch up strained relations with Arab monarchies, especially Saudi Arabia. Minutes after meeting with King Abdullah, Mr. Gates told reporters that he had seen “evidence” of Iranian interference in Bahrain. That was followed by reports from U.S. officials that Iranian leaders were exploring ways to support Bahraini and Yemeni opposition parties, based on communications intercepted by U.S. spy agencies.

Saudi officials say that despite the current friction in the U.S.-Saudi relationship, they won’t break out of the traditional security arrangement with Washington, which is based on the understanding that the kingdom works to stabilize global oil prices while the White House protects the ruling family’s dynasty. Washington has pulled back from blanket support for democracy efforts in the region. That has bruised America’s credibility on democracy and reform, but it has helped to shore up the relationship with Riyadh.

The deployment into Bahrain was also the beginning of what Saudi officials describe as their efforts to directly parry Iran. While Saudi troops guard critical oil and security facilities in their neighbor’s land, the Bahraini government has launched a sweeping and often brutal crackdown on demonstrators.

It forced out the editor of the country’s only independent newspaper. More than 400 demonstrators have been arrested without charges, many in violent night raids on Shiite villages. Four have died in custody, according to human-rights groups. Three members of the national soccer team, all Shiites, have also been arrested. As many as 1,000 demonstrators who missed work during the protests have been fired from state companies.

In Shiite villages such as Saar, where a 14-year-old boy was killed by police and a 56-year-old man disappeared overnight and showed up dead the next morning, protests have continued sporadically. But in the financial district and areas where Sunni Muslims predominate, the demonstrations have ended.

In Yemen, the Saudis, also working under a Gulf Cooperation Council umbrella, have taken control of the political negotiations to transfer power out of the hands of President Ali Abdullah Saleh, according to two Saudi officials.

“We stayed out of the process for a while, but now we have to intervene,” said one official. “It’s that, or watch our southern flank disintegrate into chaos.”

By BILL SPINDLE and MARGARET COKER

Saudi Arabia’s top cleric accused Iran of interfering in the internal affairs of the six Gulf Cooperation Council (GCC) countries and attacked its “hypocrisy and deception”, a Saudi newspaper said on Friday.

Gulf Arab countries are concerned over what they see as the ambition of non-Arab Shi’ite power Iran to extend its influence in Arab countries mostly under Sunni rule. Saudi Arabia follows a brand of Sunni Islam that views Shi’ites as heretics.

“We must guard against their (Iranian) intrigues and we have to be wary of them and be careful of their deceits and not fall for their claims about Islam, which are all hypocrisy and deception,” Grand Mufti Sheikh Abdulaziz Al-Sheikh was quoted as saying in the daily Okaz.

The paper said he condemned “Iranian interventions” in the GCC and described Iranians as “Zoroastrians” — followers of the pre-Islamic Persian religion — in language Saudi clerics often use to attack Iranians and Shi’ites.

Bahrain’s Gulf Arab allies accused Iran of interfering in their affairs after Tehran objected to the dispatch of Saudi troops to help Bahrain put down protests last month.

Bahrain, a Sunni Muslim monarchy, received help from Saudi Arabia and the United Arab Emirates to help break up the pro-democracy protest movement.

The Bahrain crisis has accentuated tensions between Iran and the GCC countries, which Washington sees as counterweights to the Islamic Republic.

Iran’s official IRNA news agency said on Friday Tehran had called on the U.N. Security Council to protect opposition activists in Bahrain, where it said unrest and suppression could destabilise the entire region.

They hope that the jasmine revolution will spread to the rest of the Middle East, bringing some sort of democracy throughout the region. However, there is one huge difference between North Africa and the Persian Gulf. Tunisia, Egypt and Libya are all Sunni-majority states ruled by Sunni autocrats. But it may surprise readers to learn that the Persian Gulf coast is entirely a Shia majority area, much of which is ruled by Sunni autocrats. Hence popular revolts in the Gulf nations may or may not evolve into democracy, but will certainly evolve into Shia-cracy. This terrifies the Sunni rulers.

Arabs hate the term “Persian Gulf” and call that body of water the “Arabian Gulf.” Yet the most appropriate name may be “Shia Gulf”. The Shias in the north coast of the Gulf are Persian and those in the west and southern coasts are Arab, but all are Shia regardless.

Iran and Iraq are Shia-majority countries where Shias are in power. But in other Gulf countries, the Shia majority is ruled by Sunni sheikhs— in Kuwait, Bahrain and the United Arab Emirates. Even the Gulf coast of Saudi Arabia (which produces and exports most of its oil) has a Shia majority, although the country overall has a Sunni majority. The Saudi king has one big advantage over other Sunni rulers of the region: he is revered by all Muslims, Shia or Sunni, as the guardian of the holy cities of Mecca and Medina. This makes Saudi Arabia less vulnerable to a popular Shia revolt than Bahrain (where demonstrators are already choking the streets), Kuwait or the UAE. Yet the Saudis are paranoid because all their oil lies in the Shia-majority eastern region.

This is why the Saudi king has just announced that he will spend a whopping $ 11 billion on improving welfare and housing in the Shia-majority region. He wants to buy off potential revolutionaries. Whether he will succeed remains to be seen: Bahrain’s Shia demonstrators have refused to be bought off with grants of $ 2,250 per head. Some months ago, the WikiLeaks of US confidential diplomatic papers revealed that many Gulf sheikhdoms—including Bahrain and the UAE—wanted the US to bomb Iran’s nuclear facilities. The sheikhs claimed they feared armed invasion or bombing by Iran. In fact, their real fear is that a rising Iran will induce their own Shia subjects to revolt and demand democracy. The Sunni sheikhs have long cultivated the US to keep Iran at bay. But this simply induces disgust on the part of many Shia subjects, who view their rulers as not just Sunni oppressors but American stooges too. Bahrain is a small island off the Saudi Gulf coast, linked to it by a motorable causeway. Whereas Saudi Arabia is an ultra-conservative Muslim state where women must wear burqas and are not even allowed to drive cars, Bahrain is a freewheeling, westernized state where women can wear short skirts and dance all night in nightclubs. It has an elected lower house, but real power vests with the king. The democracy movement in Bahrain started off as a secular one, yet inevitably became coloured by the Shia-Sunni split.

Some analysts hope for a peaceful transition from autocracy to democracy in the Middle East. Muslim autocrats have sometimes evolved into leaders of political parties in democracies. Two examples are Gen Zia-ur Rahman in Bangladesh and Gen Pervez Musharraf in Pakistan. It is just possible that some such transition could occur in North Africa too. But this will be impossible in the Gulf, since any political party formed by the Sunni rulers will be thrashed by Shia rivals. Hence Gulf sheikhdoms are more likely to opt for the Gaddafi path of bloody suppression than the Mubarak path of exiting in favour of democracy.

This creates a moral and financial dilemma for the US. It swears in theory by democracy, but in practice dreads the replacement of Sunni sheikhs by Shia-cracies in the Gulf. It also fears that Shia revolts in the Gulf may disrupt oil supplies and send prices soaring, above all if the democracy fever spreads to Saudi Arabia.

Iran loves the thought of a completely Shia Gulf. But it also fears that its own theocracy could be toppled by a democracy movement, and that tempers its enthusiasm for the jasmine revolution. When democracy seems inconvenient to so many powerful forces, its prospects in the Gulf cannot be too bright. Its prospects in North Africa are much brighter.

As political unrest shakes its tiny Gulf ally Bahrain, much more is at stake for the United States than just the fate of the US Fifth Fleet’s base, analysts said.

Also in play are Washington’s extensive strategic ties with Bahrain’s influential oil-rich neighbor Saudi Arabia and efforts by US arch-foe Iran to spread its influence from across the Gulf, they said.

In many ways, the unrest in Bahrain “is much more dangerous” for the US than the current state of affairs in Egypt, more than a week after mass protests forced president Hosni Mubarak to step down, said analyst Aaron David Miller.

To be sure, Egypt has greater weight than Bahrain, said Miller, a former State Department analyst and negotiator who is now an analyst with the Woodrow Wilson International Center for Scholars.

It is the largest and most powerful Arab state, has a peace treaty with Israel and receives $1.3 billion in US military aid each year.

And the Egyptian-US alliance remains intact, at least for now.

However, Bahrain’s vulnerability “to more convulsive change and the impact that it could have vis-a-vis Arab policy for Iran, Saudi Arabia and the rest of the Gulf makes it … a more hot-button issue right now,” Miller told AFP.

The Sunni Arab leaders of Bahrain and Saudi Arabia, who govern over restive Shiite Arab populations near Shiite but non-Arab Iran, fear Washington’s push for reform will sow greater instability, said analyst Patrick Clawson.

They strongly opposed Washington’s pressure on Egypt for a transition to democracy to ease out Mubarak, according to Clawson, deputy director for research at the Washington Institute for Near East Policy.

“The perception in the (Gulf) region is that democracy means either the complete chaos you had in Iraq or else the stasis and bickering you had in Kuwait,” he said.

And if needed, the Saudis may be prepared to repeat their intervention in Bahrain in the 1990s, when they sent armored personnel carriers across the causeway linking the neighbors.

“So the Saudis are in a position to ensure that things don’t get out of hand in Bahrain and they are of a mind to do that. That is a powerful constraint to what the United States can do under these circumstances,” Clawson said.

The course of events could put a strain on the US-Saudi strategic relationship, which involves US military bases and billions of dollars in US weapons sales, as well as close cooperation on regional diplomacy and counter-terrorism.

Bahrain, fearing Iran’s meddling, may continue taking a tough line toward unrest, although Bahraini security forces withdrew Saturday from a Manama square that had been the focal point of bloody anti-regime protests.

The implications of the apparently conciliatory move were not immediately clear.

“The Gulf rulers will be petrified that there is an Iranian influence in all of this, but I think the Iranians will be pretty incompetent” in trying to gain influence in the region, Clawson said, noting that will not prevent them from making a “good attempt” to do so.

What’s more, he said, Arab Shiites increasingly look to their own leaders rather than Iran for guidance.

Nonetheless, analysts expressed concern about Iran.

“The issue of Iran is critical. What is a good outcome for us?” Miller asked.

“Here you have Iranian access to that Shia majority. You could argue that an Iraq-like outcome is not out of the question,” he continued, referring to how Shiites now dominate affairs in Baghdad with some backed by Iran.

Michelle Dunne, a former Middle East specialist at the State Department, agreed that the Saudis would have a hard time accepting political change in Bahrain and that the Iranians would try to exploit instability there.

“The Bahraini problem is definitely a home-grown problem,” said Dunne, now a senior associate with the Carnegie Endowment for International Peace.

“This is not Iran manipulating the politics of an Arab state, but the Bahraini Shia are desperate. They will accept support from where they can get it.”

As for the naval base, analysts said its presence is not currently the focus of Shiite-driven protests, though it could develop as such if protesters eventually succeed in changing the government.

“At some point, that’s going to be rethought… whether it’s appropriate to have a US naval base there or not,” said Dunne.

Anthony Cordesman, a former Defense Department intelligence analyst, said the US base in Bahrain is “very important” in light of the “steady buildup” by the naval branch of Iran’s Revolutionary Guards over the past decade.

Protests against Bahrain’s government escalated today as a second demonstrator was killed and in Yemen anti-government marchers clashed with police as unrest spreads through the Middle East.

Thousands of Bahrainis joined a procession near the capital, Manama, carrying the coffin of Ali Abdul Hadi Mushaima in the biggest demonstration so far in the Persian Gulf kingdom. Mushaima was killed during clashes yesterday with police, who fired bird-shot and rubber bullets and used tear gas. A second protester died today in fighting at the funeral, the official Bahrain News Agency said. The Shiite Muslim Al-Wefaq group suspended participation in parliament to protest the violence.

In Yemen, stone-throwing protesters clashed with police as they marched toward the presidential palace, the fifth day of demonstrations calling for an end to President Ali Abdullah Saleh’s rule. Iranian security forces yesterday used tear gas to break up the biggest anti-government protests since the aftermath of the disputed presidential election in June 2009.

Popular demands for democracy and civil rights, invigorated by the mass protests that toppled Egypt’s Hosni Mubarak last week, are rattling the autocratic rulers of a region that holds about three-fifths of the world’s oil reserves. Brent crude futures rose for a second day after closing yesterday at the highest level since September 2008.

Gulf Regimes

The protests in Bahrain, home to the U.S. Navy’s Fifth Fleet, and Iran mark the spread of unrest into the Persian Gulf, the area where most Middle Eastern oil is produced. Many Gulf states including Saudi Arabia and the United Arab Emirates are U.S. allies. All of the region’s governments are classified as autocratic regimes in the Economist Intelligence Unit’s 2010 Democracy Index.

Shiites who represent as much as 70 percent of Bahrain’s population say they face job and housing discrimination. King Hamad bin Isa al-Khalifa, a Sunni Muslim, has ordered an increase in food subsidies and social welfare payments, and a grant of 1,000 dinars ($2,653) to each Bahraini family.

Mushaima’s funeral cortege was carrying the coffin, draped with Shiite flags, to the dead man’s village as demonstrators shouted “Down with Khalifa.” They were referring to Prime Minister Sheikh Khalifa bin Salman al-Khalifa, who has held the premiership for four decades.

“Clearly events are spiraling downwards as violence mounts,” said Theodore Karasik, director of research at the Dubai-based Institute for Near East and Gulf Military Analysis. “ More people may be killed and this will likely bring more protesters onto to the streets. If pressure mounts too much and the Kingdom is in danger, there may be outside intervention.”

‘Sanctioned by Law’

Foreign Minister Khalid bin Ahmed bin Mohammed al-Khalifa said in an interview yesterday that protests are “sanctioned by the law” in Bahrain and won’t have the same effect as the popular movements in Egypt and Tunisia.

Bahrain’s dollar bonds due in 2020 fell, sending yields up 6 basis points to 6.21 percent, the highest level since the debt was issued in March, according to data compiled by Bloomberg. The cost of insuring Bahrain’s bonds against default jumped 10 basis points to 253, the highest in a week, according to CMA prices for credit-default swaps.

Brent crude for April settlement climbed as much as 96 cents, or 0.9 percent, to $104.04 a barrel in London.

“Fear that civil unrest could spread into oil-producing states in the Middle East is keeping investors nervous,” said Andrey Kryuchenkov, an analyst with VTB Capital in London.

Iran Output

Iran is the second-largest producer in the Organization of Petroleum-Exporting Countries, producing about 3.7 million barrels a day, according to Bloomberg data. Bahrain pumped about 32,000 barrels a day of crude in 2009 and 1.49 billion cubic feet of gas, according to the national oil and gas authority.

Bahrain experienced clashes between Shiites and police before parliamentary elections in October. The royal family has close ties with Sunni-ruled Saudi Arabia, the largest Arab economy. Many among Bahrain’s populace retain cultural and family links with Shiite-dominated Iran, Saudi Arabia’s main regional rival.

Al-Wefaq won 18 of 40 parliament seats in an October election. The assembly can only pass laws with the consent of an upper chamber whose members are chosen by the king.

The group will suspend its parliamentary role until the protesters’ demands are met, senior lawmaker Abduljalil Khalil, said in an interview today. “No one will accept cosmetic changes,” he said, adding that al-Wefaq’s demands aren’t influenced by Iran.

Protesters in Yemen are demanding that Saleh quit after 32 years in power. The president said on Feb. 2 that he won’t seek to extend his term when it expires in 2013 and that his son wouldn’t succeed him as president. At least 17 people were injured and 165 detained in the capital, Sanaa, Xinhua news agency reported yesterday, citing witnesses.

$2 a Day

Unlike Bahrain, the Yemen government — which is struggling to quell separatist movements and halt al-Qaeda operations based in the country — can’t afford to try to buy calm by offering economic benefits. Yemen faces serious water shortages, declining oil output and a society where more than half the population of 23 million is under 20 years old. About 40 percent of Yemen’s population lives on less than $2 a day.

Petroleum production and refining account for 60 percent of Bahrain’s export receipts, 70 percent of government revenue and 11 percent of gross domestic product, which was about $22 billion last year, according to the CIA World Factbook.

Iran’s opposition movement says it has drawn inspiration from the Arab revolts that removed Mubarak and Tunisia’s Zine El Abidine Ben Ali. It accuses Supreme Leader Ali Khamenei and President Mahmoud Ahmadinejad of meeting popular demands for change with violent repression.

Tear Gas, Batons

Yesterday’s demonstration in Tehran was backed by opposition leaders including Mir Hossein Mousavi and Mehdi Karrubi who challenged Ahmadinejad in the 2009 election and said the result was rigged. Tens of thousands of protesters were dispersed by security forces using tear gas and baton charges, al-Jazeera television said. Iranian officials said one person, a government supporter, was killed, the Associated Press reported.

In Egypt, the army took control after Mubarak’s resignation on Feb. 11 and has pledged to oversee a rewriting of the constitution to prepare the ground for free elections. Tunisia is also preparing for elections under an interim government after Ben Ali’s Jan. 14 ouster, and opposition groups including the main Islamist movement are competing with representatives of the former ruling party to steer the transition.

-With assistance from Claudia Maedler and Inal Ersan in Dubai, Terry Atlas in Washington, Robert Tuttle in Qatar, Ben Sharples in Melbourne and Abigail Moses, Grant Smith and Stephen Kirkland in London. Editors: Ben Holland, Louis Meixler.