STRATFOR'S MORNING INTELLIGENCE BRIEF
SITUATION REPORTS - Jan. 5, 2004

1232 GMT -- THAILAND -- Two bombs exploded Jan. 5 in the town of Pattani in
southern Thailand, killing two police officials and wounding several people.
Two other bombs were defused. The bombs exploded in Pattani a day after
armed gunmen set fires at 21 schools and raided a military armory in the
neighboring province of Narathiwat.

1228 GMT -- BRUSSELS -- A letter bomb exploded at the European Parliament in
Brussels on Jan. 5. No injuries were reported and no other information was
available, but it was the fifth letter bomb mailed in slightly over a week
to different European Union agencies.

1225 GMT -- GEORGIA -- Exit polls in Georgia show that Columbia
University-trained lawyer Mikhail Saakashvili was elected president with
about 86 percent of 1.8 million votes cast, Agence France Presse reported
Jan. 5.

1219 GMT -- CHINA -National health authorities in China confirmed Jan. 5
that a man in southern Guangdong province is the country's first case of
Severe Acute Respiratory Syndrome (SARS) since a global epidemic was
declared over in July 2003.

1217 GMT -- CAMBODIA -- Cambodian Judge Oun Bunna said Jan. 5 that an
Egyptian national and two Thai citizens, held since May 2003 on suspicion of
having ties to the Muslim militant group Jemaah Islamiah, will be tried on
terrorism-related charges. A lawyer for the three detained men said his
clients have not committed any crimes and claimed they are charged with
crimes that are not even covered under Cambodian law.

1208 GMT -- LIBYA -- Saif al-Islam Gadhafi, son of Libyan leader Moammar
Gadhafi, made apparently contradictory statements concerning outside troops
in Libya. He told the Arabic newspaper Asharq al-Awsat on Jan. 5 that no
U.S. and British forces would be stationed in Libya; however, he told
Britain's Sunday Times that there would be "no problem" with U.S. or British
troops being located in the country.

1204 GMT -- PAKISTAN - Indian Prime Minister Atal Behari Vajpayee and
Pakistani President Pervez Musharraf met at the summit of the heads of South
Asian states on Jan. 5 in Pakistan's capital. The Islamabad meeting
reportedly was conducted "in a good atmosphere" and officials with both
governments said it was intended to open a door for starting a dialogue on
Kashmir.

1202 GMT -- IRAQ -- British military forces likely will remain in Iraq until
2006 or 2007, Foreign Secretary Jack Straw said Jan. 5. About 10,000 British
troops are in Iraq.

1159 GMT -- SAUDI ARABIA -- Saudi police prevented a bombing attack on Jan 5
on an electricity distribution branch on the outskirts of Riaydh -- when
they found a grenade placed in an adjacent building.

1157 GMT -- BRITAIN -- Heathrow International Airport in London and other
British commercial airports are on high alert Jan. 5 amid continuing
concerns that al Qaeda or other Islamic militant groups could launch
strikes.

************************************************************************

Geopolitical Diary: Monday, Jan. 5, 2004

Nerves are taut globally as security alerts mildly disrupt trans-Atlantic
travel. It is impossible to tell the quality of the intelligence these
alerts are based on or how sensitive U.S. intelligence is at the moment --
it could be set to react to anything. Nevertheless, all the chatter -- on
the Islamist and the U.S. sides -- is about an impending major attack by al
Qaeda. The process is beginning to feed on itself as unconfirmed reports
from Islamist Web sites become equally unconfirmed reports from U.S. sources
with the media reporting them all -- like a series of mirrors multiplying an
image. That and the bickering between British, French and American
intelligence and security services over who did what and when have made the
noise level deafening. It is impossible from the outside to make much sense
of the matter.

Our suspicion is that U.S. intelligence has picked up some solid
intelligence indicating an attempt to hit the United States via
intercontinental airliners. Some names were attached to the operation as
well. Although, as is usually the case with names, lots of people have the
same ones, the spellings -- particularly when transliterated -- are
uncertain and the people in question have three or four identities from
which to choose. The United States decided to be prudent. Disrupting flights
would inconvenience travelers, but not as much as being killed. Moreover,
even if intelligence had the wrong planes and wrong flights, massive
security alerts probably would cause al Qaeda to cancel attacks as too
risky. That is not a bad outcome, not only because a canceled attack is
better than an uncanceled one, but also because that forces al Qaeda to
regroup and buys several weeks or months in which to disrupt them.

Still, as we have argued, now is the time for al Qaeda to attack. The
guerrilla war in Iraq is diminishing dramatically. The number of attacks has
died down substantially since Saddam Hussein's capture -- and the last week
has not seen the kind of action that took place even over Christmas. What is
particularly interesting is that significant guerrilla operations north of
Baghdad have almost disappeared. The Samarra-Tikrit region that was the
heartland of Baathist operations has become nearly inert. Guerrilla
operations have concentrated in Baghdad itself and to the west and south of
the city. The geography of the operations seems to indicate that the
Baathist resistance to the north has been broken or, if not broken, then is
still struggling to recover from the intelligence penetrations surrounding
Hussein's capture.

If this pattern continues -- and it might not -- then the guerrilla
operation will have changed its character dramatically. It will have
contracted dramatically, so that it will be focused in a very small area of
Iraq -- essentially Baghdad and the area west and southwest toward the lakes
region. It is also declining in tempo from a low intensity, continual
guerrilla operation to a sporadic guerrilla operation in which the emphasis
is on bombing attacks on soft targets with only intermittent combat
operations against U.S. forces.

Just as al Qaeda, on a global level, must act now to re-establish its
credibility, so too the Iraqi guerrillas are under terrific pressure to
demonstrate their ability to continue fighting. Sunni leaders who were
essentially siding with the Baathists until December have begun
reconsidering their position. They are watching the developing entente
between the United States, the Iraqi Shiites and Iran and are seeing the
guerrillas flounder. They have no particular interest in the foreign
jihadists operating in the country, but are looking to preserve their own
power and interests. If the tribal leadership abandons the guerrillas --as
they may well have done in the Sunni heartland -- then the native Baathist
guerrilla forces will have lost their operational base.

The Baathist guerrillas are caught between a rock and hard place. On the one
side, the United States is breaking apart their support structure. On the
other, the jihadists are trying to take control of the war away from them.
As with al Qaeda, the Baathist guerrillas must act. Unlike al Qaeda, a
spectacular operation will not impress anyone. What will impress is their
ability to return to the tempo of operations they were able to mount prior
to Hussein's capture. If they can't do that, they will have serious problems
recovering.

Iran, it should be noted in closing, decided to pass on a visit by Elizabeth
Dole and a Bush relative and made it clear that it is much more interested
in extending the 90-day suspension of sanctions on certain goods, as well as
expanding the categories of goods that are exempt. The United States has no
problem with this now. What is going on is that an Iranian election is
coming Feb. 20 and Iran would like to show its electorate that the United
States has publicly changed its policies before Iran shifted its own. The
Iranians have grumbling going on among members of the Guardians Council,
while the U.S. public, as measured by Leno and Letterman, has not yet
noticed anything going on -- no Axis of Evil jokes yet. That being the case,
we can expect new and public U.S. moves. The United States does not want the
process of entente to be derailed by political upheavals in Iran, at least
while the Bush administration's own political flanks are secure.





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