Bush planning to sell Saudis "smart bombs"

RIYADH, Saudi Arabia -- President Bush delivered a sophisticated weapons sale for Saudi Arabia on Monday, trying to bolster defenses against threats from U.S. adversary Iran and muster support in this oil-rich kingdom for a long-stalled Mideast peace agreement.

Bush received a warm embrace from King Abdullah, whose family wields almost absolute power. Among ordinary Saudis and across much of the Mideast, Bush is unpopular, particularly because of the Iraq war and unflinching U.S. support for Israel.

Bush and Abdullah were going to some lengths over two days to emphasize their strong personal ties.

Saudi Arabia holds the world's largest oil reserves, and surging fuel costs are putting a major strain on the troubled U.S. economy. Bush said today that he would talk with Abdullah about how high oil prices are affecting the United States.

"It's tough on our economy," Bush said before he began a round-table discussion with Saudi business people.

"I would hope that as OPEC considers [its response to higher prices] that they understand when their biggest consumer's economy suffers, it means less purchases, less oil and gas sold."

Bush spoke at the U.S. embassy today where he was meeting with mostly young Saudi business owners -- many of them educated in the United States.

Sophisticated weapons

Coinciding with Bush's arrival, the administration formally notified Congress of its plan to sell Boeing's satellite-guided smart-bomb kits to Saudi Arabia, starting a 30-day period in which lawmakers may object to the sale, State Department spokesman Sean McCormack said. The deal envisions the transfer of 900 of the precision-guided bomb kits, worth $123 million, that would give Saudi forces highly accurate targeting abilities.

Some lawmakers fear the systems could be used against Israel, but Congress appears unlikely to block the deal because of Saudi Arabia's cooperation in the war on terror and in deterring aggression from Iran.

The administration has notified Congress of five other proposed sales to Saudi Arabia, the United Arab Emirates and Kuwait, including Patriot missiles. The total amount of eventual sales is estimated at $20 billion.

Regional issues

The sales are a key element in Bush's strategy to shore up defenses against Iran, which the president has deemed the world's top state sponsor of terrorism. Saudi Arabia and other Gulf states, with majority Sunni Muslim populations, harbor deep suspicions about Shiite Iran's rising power. At the same time, Arab allies are worried that the world economy would suffer heavily if the U.S. dispute with Iran turns into a military confrontation.

Israeli Prime Minister Ehud Olmert warned Monday that all options are open when it comes to keeping Iran from obtaining atomic weapons, his clearest sign yet that Israel could use force.

On Mideast peace, Saudi Arabia handed Bush a coup by taking part in the U.S.-sponsored peace conference in Annapolis, Md., in November.

Bush was expected to encourage Saudi Arabia to help struggling Palestinians build the foundations of a future state. Bush also sees support from Arab neighbors as crucial to the Palestinian leadership being able to successfully negotiate with Israel over borders and other issues.

Abdullah, for his part, was expected to urge Bush to keep up the pressure on Israel to halt settlements in Palestinian territories.

Information from the Chicago Tribune and Bloomberg News is included in this report.