On January 14, 2008, the State Department officially notified Congress of its intent to sell 900 Joint Direct Attack Munitions kits to Saudi Arabia. Though some in Congress balked at transferring such advanced military technology to a country still in a formal state of war with Israel, their protests soon faltered. The transaction is just the latest phase in the Bush administration’s plan to sell at least $20 billion of high-tech weaponry to Saudi Arabia and the five other Gulf Cooperation Council (GCC) states—Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman. These sales are part of a massive $63 billion package of arms transfers and military aid to Washington’s chief Middle Eastern allies first announced the preceding July. In addition to the GCC sales, over the next decade the US will provide $13 billion of arms grants to Egypt and $30 billion to Israel.
The Saudi weaponry sale was announced during President George W. Bush’s January tour of the Middle East, which featured successive stops in Israel, the West Bank, most of the GCC kingdoms and Egypt. The week-long mission reprised a rare joint visit to these states undertaken by Secretary of State Condoleezza Rice and Secretary of Defense Robert Gates in the summer of 2007, shortly after the original $63 billion announcement. In placing huge offers of arms and aid on the table, both trips aimed at strengthening decades-long strategic relationships with these key US allies—repeatedly labeled “forces of moderation” by Rice—in order to contain the threat of regional “extremism.” To use the Bush administration’s language, the transfer of American-made weaponry will “contribute to the foreign policy and national security of the United States” by helping countries that are “an important force for political stability and economic progress in the Middle East.”  As Bush colorfully warned, peace and prosperity in the region are now under siege by “violent extremists who murder the innocent in pursuit of power.”
In actuality, the ostentatious aid and arms deals signify the latest shift in US Middle East grand strategy. Since 2004, the Bush administration has watched aghast as its stated ambition to plant thriving pro-Western democracies in the arid soil of the Arab world failed to take root. The culprit blamed by the White House and State Department is a legion of extremism whose members are anyone and everyone that has refused to play by Washington’s rules—Iran, Syria, Hizballah, Hamas, Iraqi militants and the ever present al-Qaeda. With its grandiose promises of “regional transformation” looking empty, the Bush administration will leave office by falling back on a tried-and-true tactic of hard realism: Shore up client regimes with enormous volumes of aid and arms, not only reminding the world of US military hegemony but also of the benefits of being one of Washington’s “moderate” friends, as opposed to its “extremist” enemies.
But the Manichean logic behind the fresh infusions of aid and weaponry cloaks a host of more complex political issues in the recipient states, from the resilience of authoritarianism in Egypt to the rearmament of Israel’s formidable war machine to the inflated tensions in the Persian Gulf between the GCC and Iran. Because these states are linchpins of US military strategy, the aid and arms sales are being substituted for critical reflection on these problems, not to speak of the diplomatic engagement that would be required to resolve them. As such, Washington’s new arms bazaar highlights the chronic inability of US decision-makers to escape from Cold War-style thinking in which the demands of geopolitical stability outweigh all other concerns.
Perhaps the least controversial component of the $63 billion bonanza unveiled in July was the ten-year, $13 billion military aid promise to Egypt. On the surface, the deal simply renewed a quid pro quo that has been in place since the Camp David accords. Indeed, the promise of substantial annual aid transfers was a major selling point for Egypt in making peace with Israel, and since Camp David it has ranked second only to Israel as the largest recipient of US foreign aid. From 1979 through 2006, Washington paid close to $60 billion in economic and military assistance to Egypt, most of it in the form of grants.  In 1998, the State Department began to downsize its Economic Support Fund (ESF) payments, which are mostly cash grants designed to pad the budgets of President Husni Mubarak’s regime, but pledged to keep steady its military assistance package at $1.3 billion per annum. Egypt’s military aid consists almost exclusively of Foreign Military Financing (FMF) grants, Congressionally appropriated funds that have bankrolled purchases of such advanced combat hardware as F-16 Falcon jets, M-1A1 Abrams tanks and Oliver-class guided missile frigates, as well as vast quantities of artillery, guided missiles, radar equipment, small arms and support services.  By law, FMF monies must be spent on American-made weaponry, making such arrangements extremely profitable for US defense companies.
Though specific military sales must still be approved, the $13 billion extension locks in Egypt’s current arms aid level through 2018 even as its economic aid continues to tumble (in 2006, ESF grant allocations dipped under $500 million, the lowest annual total since Camp David). Further, whereas most countries receiving FMF aid must expend these grants to pay for their arms acquisitions up front, Egypt’s aid comes with “cash flow financing,” a statutory arrangement that permits the regime to spread out its payments over many years. In practice, this financing means Egypt can buy on credit; currently, for instance, Egypt has signed purchase agreements for items worth about $2 billion more than its yearly FMF allocation. Mubarak’s regime has also been a beneficiary of the Excess Defense Articles program, a little-known Pentagon operation that transfers overstocks of combat materiel to preferred allies at little or no charge. All of these privileges mean that Egypt will likely reap far more than $13 billion in military support over the next decade.
Nonetheless, Rice and Egyptian Foreign Minister Ahmad Abu al-Ghayt were nominally correct when they noted at a July 2007 press conference that the aid renewal was “nothing new.” Washington, Rice argued, was only performing its customary mission: helping to modernize the Egyptian armed forces while “protecting the gains of peace processes of the past.” In fact, beneath the text of the FMF renewal lies a subtext of executive maneuvering to outflank Congressional criticism of Mubarak’s autocratic regime and its generous treatment by Washington. That criticism rose in pitch after the September 11, 2001 attacks: The fact that lead hijacker Mohamed Atta was Egyptian was used to suggest that Cairo’s commitment to fighting terrorism was lackluster. The Egyptian regime was also scored for failing to destroy tunnels used to smuggle weapons into the Gaza Strip, as well as for its discriminatory policies toward Coptic Christians, repression of civil society and stalling of political reforms. In July 2004, for the first time, the House of Representatives seriously considered a resolution to slash Egypt’s military aid allocation by nearly half. Though the bill was defeated (in no small part due to lobbying by large defense companies, as well as then-Secretary of State Colin Powell), the Mubarak regime came under mounting scrutiny.
At the beginning of the short-lived “Arab spring,” President Bush enjoined “the great and proud nation of Egypt” to “show the way toward democracy in the Middle East” in his 2005 State of the Union address. But the Mubarak regime proved a poor test case for the Bush administration’s democracy doctrine, imprisoning liberal opposition figure Ayman Nour, cracking down on street protests and, finally, fixing both presidential and parliamentary elections. Finally, in late June 2007, the House of Representatives inserted an unprecedented clause into its foreign operations appropriations bill for 2008, withholding $200 million of FMF grants to Egypt pending enactment of judicial and security reforms. Such restrictions on what had once been a sacred cash cow did not slip by unnoticed. In Cairo, Abu al-Ghayt retorted that Senate action was required to level the aid penalties, and then undertook a short trip to Washington to meet with Rice and Gates. 
The timing of the FMF renewal declaration thus sent a clear signal to Capitol Hill. While specific military transactions must still obtain Congressional approval, the fact that the State and Defense Departments have promised another decade’s worth of arms aid reassures Cairo that the basic principle of US military assistance will not be subject to political conditionality. The main reason is anxiety over the alternatives to the present regime. Strong gains by the Muslim Brotherhood, the regime’s manipulations notwithstanding, in the November 2005 parliamentary contests eroded the Bush administration’s faith that Arabs would choose secular, pro-American voices when given an electoral choice; and then the Hamas victory in the January 2006 Palestinian legislative elections shattered trust in the ballot box. After these disconcerting Islamist gains, indeed, US policymakers ditched their rhetoric about Arab democratization altogether. While Rice met Abu al-Ghayt and other Arab foreign ministers at Sharm al-Sheikh in July as part of her coalition building tour, an Egyptian court rejected Ayman Nour’s final appeal for release on health grounds. There was, predictably, little reaction from the US. Bush was similarly circumspect during his stopover at Sharm al-Sheikh in January—his first meeting with Mubarak in over four years—applauding Egypt’s “progress towards greater political openness” and “democratic future.”
The FMF renewal hence suggested that realpolitik could always trump human rights or other liberal concerns about Washington’s unsavory client states. For the US, a large and capable Egyptian military performs crucial functions: It stabilizes an authoritarian regime committed to protecting Israel’s western flank while safeguarding US access to key transportation arteries. From 2001 to 2005, for example, Egypt granted expedited transit through the Suez Canal to 861 US warships, as well as permission for 36,553 US combat aircraft to cruise through its airspace.  The paramountcy of hard realism was further reinforced in mid-August when, just weeks after the State Department’s aid renewal notice, the Pentagon posted a new sale of 125 M-1A1 Abrams tank upgrades and accompanying equipment to Egypt, a deal worth as much as $847 million. In an anti-climactic moment, in early September the Senate passed a heavily rewritten edition of the House’s foreign operations bill that quietly expunged the conditionality clause. In the final Congressional compromise, which Bush signed into law in late December, the conditionality clause made a weak return. In 2008, Congress may now withhold $100 million from either Egypt’s ESF funds or FMF grants pending its implementation of judicial and security reforms.
US Economic and Military Assistance to Israel
Predictably, such a move drew the ire of Egyptian observers. One state-owned newspaper accused the US of “extortion,” slamming Congress for treating Egypt like a subservient “banana republic.”  In reality, however, US patronage of Egypt is in no serious peril. For one thing, a loophole in the 2008 foreign operations law allows the Secretary of State simply to waive the conditionality clause if it “is in the national security interest.”  Moreover, the volume of aid in question—$100 million—is less than 6 percent of Egypt’s total US aid allocation in 2008, which includes $415 million in ESF payments and the usual $1.3 billion in FMF grants. Finally, attempts to curb Egypt’s aid payout should be read against the wider context of US-Egyptian relations. The recent $13 billion FMF agreement means that at the executive level, the State Department has effectively guaranteed US arms assistance to the Mubarak regime through 2018. Congress may threaten to pare down the arms grants, now the primary lever of US influence over Egypt, on an annual basis, but the Bush administration has made clear that legislators should not question the wisdom of supporting an autocratic ally that has accommodated US military strategy since September 11 and maintained an unwavering peace with Israel. As in Jordan and other recipients of US assistance in the war on terrorism, national security interests still demand the preservation of aid lifelines to support “moderate” Middle Eastern regimes whose internal practices are anything but.
Looking forward, the Egyptian case suggests that the idea that foreign aid can be used to reform authoritarian US clients has become as ethereal as the Arab spring that popularized it. This bodes ill for any future efforts to promote democracy in the Middle East. Washington’s credibility as a democratization advocate was shot after its about-face following Hamas’ electoral victory. Should policymakers again clamor for political reforms in even liberalized autocratic allies like Jordan or Morocco, recalcitrant incumbents and opposition activists alike now have further ammunition for rejecting such pressures by pointing to US hypocrisy. As the analyst Khalid al-Shami concluded, Egypt’s military aid package marked “the official end to what was once called the American commitment to Middle East democratization.” 
Priming Israel’s Aid Pump
Lurking amidst the politics of Egypt’s FMF renewal was the decision to flood Israel’s aid pipeline with $30 billion in arms assistance over the next decade. Negotiated after months of bilateral meetings, the deal will enlarge the volume of Israel’s annual FMF grants, currently capped at $2.4 billion, by 25 percent through 2018.
US officials intend the aid upgrade to help maintain Israel’s military supremacy in the Middle East. Israeli military capacity is greatly superior to that of any Arab frontline state, not only because of “force multipliers” like Israel’s undeclared nuclear arsenal, the US-funded Arrow anti-ballistic missile system and better intelligence, but also due to more sophisticated offensive weaponry and a more developed defense industry, both of which owe a great deal to decades of US sponsorship. From 1976 through 2006, Israel collected around $90 billion in official US economic and military aid transfers.  Of this sum, nearly $50 billion materialized through FMF grants that financed the acquisition of top-shelf technology from the Pentagon. Within Israel’s armed forces, the air force has become the leading operator of American weaponry, ranging from combat jets like the F-15 Strike Eagle and F-16 Falcon to tens of thousands of airborne missiles and long-range radar systems. While the US has also exported such hardware to its Arab allies, the arms it delivers to Israel are usually more advanced and durable versions, underscoring Washington’s commitment to Israel’s qualitative military edge.
Along with these resources, Israel has a number of special privileges that maximize its purchasing power. Besides Egypt, it is the only beneficiary of US military grants allowed to use cash flow financing; it also receives all of its aid monies in one lump sum every October, which greatly simplifies its acquisition process. The kicker, though, has been Washington’s willingness to permit Israel—unlike every other FMF recipient in the world—to spend portions of its aid payments on locally produced arms and supplies rather than those made by American military contractors. Over time, such foreign capitalization in the Israeli defense sector has enabled companies like Rafael and Israeli Military Industries to become highly competitive. Israeli defense firms thus have been able to supplement US-acquired military technology with indigenous weaponry and equipment that are highly sophisticated by Western standards, a key reason why Israel ranks as the twelfth largest global arms exporter over the past 30 years. Currently, 26.3 percent of Israel’s FMF grants are shekel-convertible; at this rate, by 2018 the US will be subsidizing Israel’s defense industry to the tune of over $815 million per annum. 
What State Department officials have not disclosed, however, is how the $30 billion for Israel upends a tacit understanding the US, Israel and Egypt had arrived at a decade earlier. In the first two decades after the Camp David accords, a loose three-to-two ratio governed the distribution of US foreign assistance doled out to Israel and Egypt, respectively. In early 1998, the State Department embraced a proposal by then-Minister of Finance Ya’acov Neeman and other senior officials from Binyamin Netanyahu’s government to phase out Israel’s economic aid, in return for a gradual expansion of its military assistance package. The plan called for whittling down its $1.2 billion economic aid allocation by $120 million per year over the next decade, provided that the US offset the loss by adding $60 million annually to its $1.8 billion FMF allotment. The decision was driven by an Israeli perception that US policymakers were becoming hard-pressed to justify handing billions of dollars of fiscal support grants over to an industrialized country where per capita incomes approached $17,000. Accompanying Israel’s net annual loss of $60 million in US aid would be a $40 million yearly decline of Egypt’s $800 million economic aid provisions, but with no compensatory rise in military assistance. The new aid pact bumps up Israel’s annual FMF disbursement from $2.4 billion in 2009 to $3.1 billion in 2011, at which point it will remain constant through 2018. By then, Israel’s aid allocation will outpace Egypt’s share by five to two, and all of the $1.2 billion in economic assistance it stood to lose after the 1998 agreement will have been converted into fungible arms dollars. The ten-year $30 billion military aid plan is equivalent to a grant payout of over $4,500 for every current Israeli resident.
This huge boost in no-strings assistance cannot be attributed to the Bush White House’s affinity with Israel alone—since Camp David every US administration has been a steadfast Israeli patron. From another perspective, perhaps the military aid is merely fulfilling the normal requirements of the Israeli-Palestinian peace process. After all, Israel has seldom made overtures toward the Palestinian Authority without first obtaining major US concessions. Before the August 2005 Gaza withdrawal, for example, Ariel Sharon’s government asked for $2.2 billion in additional US aid. Likewise, after the July 2007 aid announcement, the White House and State Department resumed their previously languid peace efforts with a sudden urgency. The multilateral Annapolis conference in November, along with Bush’s January visit to Israel (his first as president), signaled fresh interest in formulating a new Israeli-Palestinian treaty by January 2009.
From a broader vantage point, however, it was a combination of domestic and regional factors that pushed the US-Israeli deal through. Inside Israel, the aftermath of the summer 2006 conflict with Hizballah impelled the General Staff to reevaluate their strategic doctrine in deliberations that eventually produced a comprehensive five-year improvement plan. At a cost of $60 billion, the “Tefen 2012” project will improve the Israeli army’s ground capabilities and, more importantly, modernize and replenish existing war stocks with expensive American hardware—for instance, possibly hundreds of Stryker combat vehicles, squadrons of the new F-35 Joint Strike Fighter, several next-generation Littoral Combat warships, and vast quantities of missiles and other precision munitions, in addition to Merkava tanks and other Israeli-made products to be partly funded by FMF inflows. Serious upgrades are also planned for Israel’s missile defenses. While the US-funded Arrow system currently in place is intended to intercept long-range ballistic missiles, such as those stocked by Iran, Israel is also developing medium-range and short-range defense systems, in projects called “David’s Sling” and “Iron Cap,” designed to intercept the Katyusha, Qassam and other cruder rockets launched from southern Lebanon and the Gaza Strip. With Israel’s military sector facing severe fiscal constraints due to a decade of post-Oslo downsizing, Washington’s monies will provide much-needed cash infusions for the upgrade plan; as it stands, FMF grants already constitute nearly a quarter of Israel’s defense budget.  They will also ensure a wave of new business for the primary US defense contractors that stock Israel’s arsenal, in particular Boeing, Lockheed Martin, General Dynamics and Raytheon.
The rearmament of Israel holds urgent priority in US military thinking due to the potential for future conflict with Washington’s anointed foes. At the formal signing of the aid agreement in Jerusalem on August 16, Undersecretary of State for Political Affairs Nicholas Burns warned of “an axis of cooperation between Iran, Syria, Hizballah, Islamic Jihad and Hamas that is responsible for the violence in the region,” and that there was “no question that, from an American point of view, the Middle East is a more dangerous region now even than it was ten or 20 years ago.” Later, in a January interview, Condoleezza Rice singled out Iran as the “greatest threat to the kind of Middle East we all want to see.”  There is appalling irony in these statements; the overthrow of Saddam Hussein’s regime in 2003 was, after all, supposed to have removed the gravest peril not just to Middle East peace but also to the security of the entire Western world. But such commentaries also betray the conviction that Israel is the front line of defense against the adversaries of US strategic interests. The expanded FMF conduit fits snugly into this framework, as it rejuvenates Israel’s capacity to crush any immediate threat beyond its borders in a hypothetical conflict before the US could redeploy its regional military assets to intervene.
The view from the Arab side, though, is not so generous. Many critics saw the aid deal as evidence of Washington’s long-standing assumption that Israel can only convince other Arab states to accept its political existence from a platform of strength—that is, from a position of overwhelming coercive superiority, backed by guarantees of US protection. This is, as one Arab writer noted, the principle that “power creates peace.”  Yet for the US, heeding such a tenet has carried astonishing financial cost. Convincing Egypt and Jordan to sit at the peace table with Israel required promising these regimes expensive long-term economic aid and military assistance commitments euphemistically termed “peace dividends.” Under this logic, Washington will literally finance the entire edifice of a Middle East peace concord, from the initial step of fortifying Israel’s security to the consequent phase of bribing potential peace partners and back again to conceding even more military benefits to Israel. Alternative routes to peace, like the Arab League’s 2002 initiative, seldom gain traction in Israel since Israel’s fallback position is a status quo that already favors its military dominance and tight linkages to US assistance. Likewise, newer efforts like November’s Annapolis peace conference stir only tepid interest in Saudi Arabia and other major Arab players. As many Arab observers have queried, why should their governments believe that Israel, virtually impervious to conventional external threats thanks to decades of unconditional US assistance, would yield the political and territorial concessions necessary for wider recognition?  If there are more viable ways than the Annapolis process of fostering peace, Israel’s lopsided aid arrangement precludes their exploration.
Behind the Green Curtain
Overshadowing both the Egyptian and Israeli aid agreements was the declaration of intent to sell at least $20 billion of arms to Saudi Arabia and the other Gulf Cooperation Council member states. Unlike FMF grant-based packages, the State and Defense Departments have long transferred advanced weaponry and defense equipment to the wealthy Gulf kingdoms through cash sales, each of which has to be approved by Congress. While Congress was not circumvented, the announcement essentially preempted lawmakers by publicly committing a large block of American military resources to the GCC. Further, the $20 billion figure is considered a “floor” rather than a “ceiling”; the ultimate value of the arms sales could be substantially greater. Nonetheless, at their Jidda press conference on August 1, both Rice and Gates defended the arms sales with their familiar refrain: “There is nothing new here.” And once again, they were technically correct.
Since the Iran-Iraq war, Washington’s mastery of the oil-rich Persian Gulf has required not only repositioning its air and naval forces around the GCC but also strengthening the military capabilities of local allied regimes through arms transfers. Several decades ago, oil wealth enabled Saudi Arabia and its smaller monarchical neighbors to rank among the highest per capita military spenders in the world. The severe fiscal crises of the 1980s failed to reverse this addiction. From the end of the Gulf War through the rest of the 1990s, Saudi Arabia allocated a rough average of 40 percent of central state expenditures to its defense sector, Oman and the Emirates 40 to 45 percent, and Kuwait, Bahrain and Qatar 20 to 25 percent.  In historical terms, through 2005 Saudi Arabia purchased almost $62 billion in US armaments, Kuwait nearly $7.8 billion, the Emirates over $2 billion and Bahrain over $1.8 billion, with the majority of these sales occurring after the 1990–1991 Gulf war. 
Western defense firms regard the Gulf kingdoms as an especially lucrative market today, given that record oil prices have them swimming in surplus revenue. The six GCC states spent $233 billion on arms imports from 2000 to 2005, accounting for 70 percent of total armament expenditures in the Arab world.  But Washington also has a political reason to boost its Gulf arms sales relative to other major suppliers, such as Britain, France and Russia. Because they lack logistical know-how and technical sophistication, when the GCC militaries acquire front-line US weaponry—in the past, centerpiece items like F-16 Falcons, AH-64 Apache helicopters and M-1A2 Abrams tanks—they typically must also purchase secondary support agreements that allow American contractors to provide repair parts, personnel training, specialized data and other vital services. By deepening the dependence of GCC armed forces on its defense industry, the US also ensures greater compliance by these regimes with its geopolitical interests.
Since the $20 billion announcement, the US has wasted little time in expanding its GCC security commitments. From August 2007 through January 2008, the Bush administration notified Congress of 14 different GCC arms sales worth nearly $14 billion. Of these transactions, only the January proposal to sell the Joint Direct Attack Munitions kits (JDAMs) to Saudi Arabia elicited fierce Congressional opposition; the kits transform “dumb” bombs carried by the kingdom’s F-15 Strike Eagle jets, themselves purchased from the US in the late 1990s, into precise satellite-guided weapons, which some fear would pose a threat to Israel. Indeed, early talk of selling the JDAMs in 2006 so disquieted Israeli policymakers and pro-Israel lobbies that the State Department promised 10,000 more sophisticated versions of the weapon (along with 36,500 other assorted munitions and kits) to Israel, a sale formally announced in early August 2007.
Meanwhile, the other announced GCC arms deals have elicited little controversy. The most prominent are multi-billion dollar sales of advanced Patriot PAC-3 defense systems to Kuwait and the UAE, which are designed to intercept tactical ballistic missiles and cruise missiles. Lesser transactions include sales of E-2 Airborne Early Warning Aircraft to the UAE, thousands of TOW land missiles to Kuwait, and upgrades for Saudi Arabia’s E-3 Airborne Warning and Control System planes; among the many items under future consideration are the US Navy’s new Littoral Combat warships. Notably, such hardware will not transform the kingdoms into efficient fighting machines. The 1990–1991 Gulf war revealed that GCC armed forces are technologically top-heavy and lack the numbers, training and doctrine to wage effective offensive campaigns. Similarly, the GCC’s near defunct joint defense force, “Peninsula Shield,” has proven useless in regional crises since its formation in 1984. Rather, these items are intended to protect local airspaces and shorelines from foreign intrusion. “When the kingdom gets weapons,” Saudi Foreign Minister Sa‘ud al-Faisal chided one reporter at the Jidda press conference, “it gets them to defend itself.”  In this case, Iran is the intruder in question.
Following the intensification of Iraq’s civil war, American hawks began to focus their wrath on Tehran and fanned similar sentiments inside the regimes of Saudi Arabia, Kuwait, Bahrain, Qatar, the UAE and Oman. Fueled also by perennial suspicions of their Shi‘i minorities, lingering animosity from previous territorial disputes and trepidation over the looming US drawdown in Iraq, starting in 2006 Gulf monarchies fostered a climate of anti-Iranian alarmism unseen since the late 1980s. Mainstream voices warned of a radical Shi‘i crescent stretching from Tehran to Beirut, an elaborate arc of instability masterminded by Iran’s firebrand President Mahmoud Ahmadinejad and his coterie of mad mullahs.  Meanwhile, the Bush administration, convinced that the Iranian regime was enriching uranium for use in nuclear weapons, framed the GCC, Egypt and Jordan as the Arab world’s moderate bulwarks against Iran and its forces of Shi‘i extremism. Indeed, the first stop of the Rice and Gates Middle East tour was at Sharm al-Sheikh, where there were multilateral meetings of these eight allies, dubbed the “six plus two.” This was the fifth such US-sponsored gathering. Though the front’s official goals initially seemed drenched in honey—a stable and democratic Iraq, a unified and peaceful Lebanon, a state for the Palestinians—each successive conference made clear that the group was an entente against Iran, along with Hizballah, Hamas and Sadrist elements in Iraq, which were portrayed as Tehran’s subservient proxies. In addition, in May 2006 Washington enhanced its ties to the GCC by initiating the Gulf Security Dialogue, which brought together diplomatic, intelligence and military officials from both sides for coordinated meetings. It was through this forum that the US first hinted at the GCC arms package in October 2006.
By the fall of 2007, the containment of Iran had become the predominant theme of US Middle East policy. As one Arab analyst noted, a new regional cold war had been invented, one in which a “Green Curtain” divided the US and its “moderate” clients from the Iranian-led “extremist” camp.  Vice President Dick Cheney decried Iran’s ambitions of “dominating this region,” while Bush cautioned that a “nuclear holocaust” would result if Iran continued its uranium enrichment program. Were the US to commence hypothetical airstrikes against Iran’s nuclear facilities, furthermore, American strategists were convinced of Tehran’s capacity to launch catastrophic reprisals. In a typical war games scenario, the Iranian intelligence services would utilize their connections with Hamas in the Palestinian territories, Hizballah in Lebanon, Sadrist militants in Iraq and even Shi‘i minorities in the GCC states to incite widespread violence and instability. Iranian naval forces would interdict oil shipping and US traffic in the Strait of Hormuz with mines and attack boats. Finally, Iran would lob nuclear-armed Shahab-3 ballistic missiles at US bases, oil installations and economic targets in the Gulf countries, and perhaps, in the most excessive scenario, at Israel as well. The result, as Bush warned in October, would be “World War III.”
The GCC arms sales hence played a central role in Washington’s overarching strategy to protect its oil-rich Gulf allies from what seemed to be the neighborhood’s reigning 800 lb. gorilla. But the National Intelligence Estimate (NIE) released in December made Iran look more like a 500 lb. canary: It looked good, and it sounded good, but it just didn’t fly. The report suggested that Iran had suspended its nuclear weapons program in 2003, and that it likely could not produce an operational warhead until at least 2010. The NIE’s release created a stir among GCC leaders already nervous about the economic fallout of a new conflict. In the mild Persian Gulf winter, GCC-Iranian relations began to thaw as the Gulf monarchies reached out to Tehran with new diplomatic initiatives. In early December, Ahmadinejad became the first Iranian president to address the GCC at its Doha summit, and weeks later traveled to Saudi Arabia to perform the hajj at King ‘Abdallah’s invitation. Arab League Secretary-General Amr Moussa even met with Iran’s National Security Council chief, Ali Larijani, in Cairo at the end of the month, and thereafter called for enhancing Arab-Iranian relations.
In danger of having its new Gulf arms flow questioned, the Bush administration has uniformly downplayed the NIE. Bush shrugged that Iran could simply restart its uranium enrichment program on a whim, Rice continued pressuring NATO allies to levy new UN sanctions against Tehran and Gates warned that Iran’s “militant leaders” were still determined to “foment instability and chaos.” Israeli officials also persisted in portraying Iran as an existential menace; many dismissed the NIE as politicized and inaccurate, with one defense source calling it “a terror attack by intelligence.”  In this atmosphere, Bush’s January trip to the Gulf attempted to further rebuild the case for isolating Iran and formulating new GCC arms deals. It was no coincidence that the controversial JDAM sale to Saudi Arabia was posted on January 14, on the eve of the president’s arrival to the kingdom. Likewise, renewed saber rattling at Iran required heaping democratic praise upon autocratic allies: Bush declared that Bahrain was “on the forefront of providing hope for people through democracy,” that the Emirates had become “a model of a Muslim state” and that Kuwait was to be applauded for its “democratic reforms.”
Still, the current state of Gulf affairs does not comport with Washington’s jingoistic rhetoric. In the aftermath of the NIE, few outside Israel and the US still believe that Iran poses an immediate nuclear threat. Even after Bush’s visit, the GCC is continuing to explore cooperative ties with Tehran; as Kuwaiti Foreign Minister Muhammad Al Sabah noted, “The US has its vision of American-Iranian relations and we, the GCC countries, have ours.”  Similarly, much of the Gulf press has begun to criticize the US for escalating military tensions with Iran at a time when the kingdoms are more interested in rapprochement.  That Washington seems intent on perpetuating its GCC arms sales reveals that the Bush administration, having expended enormous political capital in building a case against Iranian “extremism,” cannot afford to cease its brinkmanship just yet. US policy in the Persian Gulf is injecting iron into a Green Curtain, one whereby US military dominance necessitates the political isolation of Iran, the last oil-rich regional power outside Washington’s camp of “moderation.” It is most ironic, then, that the GCC allies, keystones of this strategic doctrine, are demonstrating that the game is far from zero-sum by expanding diplomatic relations with Tehran while still purchasing top-notch American arms.
The Politics of Hegemony
Military assistance agreements perform two simultaneous tasks. First, they deliver arms and equipment to allies. FMF grants to Egypt will help sustain a secure and loyal authoritarian regime, and they will maintain Israel’s coercive superiority in the region; weaponry sales to the Saudi Arabia and the other GCC states, meanwhile, will deepen the elaborate containment strategy against Iran while tightening the Gulf’s military reliance on the US. But arms deals also transmit political signals as concrete as the hardware delivered. All of the beneficiaries of America’s latest offering have heard the same generic message: By facilitating America’s grander military strategy, they have once again gained access to fungible resources critical to their own political projects and reserved a coveted place inside the US-led circle of client states.
But the price will prove high. By supporting Mubarak’s regime, US policymakers have made clear their increasing disregard for democracy promotion in the Middle East. By propagating Israel’s lopsided aid arrangement, they win no new Arab friends while further sustaining the region’s radical military imbalance. And by delivering more arms to the Gulf, they help instigate and exacerbate a cold war in a region already thick with misperceptions and mistrust. Such trends signify that an old instrument of imperial preservation—rewarding loyal clients with aid and arms no matter what the collateral damage—still finds a welcome home in US foreign policy thinking. For now, this White House can boast of its commitment to geopolitical stability in the Middle East by strengthening the alliances that facilitate it. It will be future administrations that bear the costs.
 Since the fall of 2007, these phrases have repeatedly appeared in the Defense Security Cooperation Agency’s public statements regarding its notifications to Congress of prospective GCC arms sales. These can be accessed online at www.dsca.mil.
 These and all other historical US aid figures come from US Overseas Loans and Grants: Obligations and Loan Authorizations Database (Washington, DC: US Agency for International Development, 2006). In addition, figures for total aid given do not include debt writeoffs. In 1991, the US canceled Egypt’s nearly $7 billion bilateral military debt load in gratitude for Egyptian support for the US-led coalition in the Gulf war.
 Precise data on arms purchases by Egypt and all other countries under review can be found in the trade registers of the Stockholm International Peace Research Institute’s Arms Transfer Database, online at armstrade.sipri.org.
 The Defense Security Cooperation Agency maintains an online database of Excess Defense Articles transfers made worldwide since 1993 at www.dsca.mil/data_stats.htm.
 Government Accountability Office, Security Assistance: State and DOD Need to Assess How the Foreign Military Financing Program for Egypt Achieves US Foreign Policy and Security Goals (Washington, DC, 2006), p. 17, accessible online.
 Israel is the largest cumulative recipient of US foreign aid since World War II. Only in 2003, with the conversion of post-Baathist Iraq into a US client state, was Israel temporarily dislodged from atop Washington’s foreign aid hierarchy.
 Indeed, Israeli Foreign Ministry negotiators strongly (but unsuccessfully) lobbied to increase the proportion of FMF grants that could be used for in-country military purchases. Ha’aretz, August 16, 2007.
 In addition, some of Israel’s anti-missile defense budget comes from US defense appropriations separate from FMF grants. In 2008, for instance, Israel will receive $155 million in additional Congressional funding for this purpose. Jane’s Missiles and Rockets, December 1, 2007.
 As Foreign Minister Sa‘ud continued, “The Kingdom has never been known to be a belligerent or aggressive country. That is why we are arming. I don’t think any one of us in this room doubts the threats in the region and the turmoil that it is in.” State Department press release, August 1, 2007.