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Summary:
Saudi Arabia, a monarchy ruled by the Saudi dynasty, enjoys special importance in the international community because of its unique association with the Islamic religion and its oil wealth. Since the establishment of the modern Saudi kingdom in 1932, it has benefitted from a stable political system based on a smooth process of succession to the throne and an increasingly prosperous economy dominated by the oil sector. Decrees by King Fahd in March 1992 establishing an appointive consultative council and provincial councils and promulgating a basic law providing for certain citizens' rights could signal a gradual trend toward a more open political system. Since late 1995, King Fahd has suffered increasingly from ill health, and Crown Prince Abdullah has assumed many routine governmental functions. The upsurge in oil prices that began in 1999 has relieved pressure on Saudi budgets but created concern in the U.S. Administration and Congress. In March 2000, Members of Congress introduced legislation to reduce or end U.S. assistance or arms sales to countries engaged in oil price fixing. The United States and Saudi Arabia have long-standing economic and defense ties. Between World War II and 1975, the United States provided a total of $328.4 million in economic and military aid to Saudi Arabia, reducing and ultimately terminating these programs as Saudi oil derived income burgeoned in the 1960s and 1970s. A series of informal agreements, statements by successive U.S. administrations, and military deployments have demonstrated a strong U.S. security commitment to Saudi Arabia. Saudi Arabia was a key member of the allied coalition that expelled Iraqi forces from Kuwait in 1991, and approximately 5,000 U.S. troops remain in the country. Saudi Arabia continues to host U.S. aircraft enforcing the no-fly zone over southern Iraq; however, Saudi Arabia has not offered the use of its territory for major air strikes against Iraq in response to Iraqi obstruction of U.N. weapons inspections in recent years. Bombing attacks against a U.S. operated training facility and a U.S. military apartment in 1995 and 1996, respectively, have raised some concerns about security of U.S. personnel and further security measures have been implemented. Saudi Arabia convicted and executed four Saudi nationals for carrying out the 1995 bombing. After extended investigations, on June 21, 2001, a U.S. federal grand jury indicted 14 members of Middle East terrorist organizations for the 1996 bombing. None is believed to be in U.S. custody. U.S. officials have cited Saudi support in the aftermath of the September 11, 2001 attacks, including intelligence sharing, law enforcement activities, and tracking of terrorist financing. Principal issues of bilateral interest include the Saudi position on the Arab-Israeli conflict, security in the post-war Gulf region, arms transfers to Saudi Arabia, Saudi external aid programs, bilateral trade relationships, and Saudi policies involving human rights and democracy. In early 2002, Crown Prince Abdullah proposed a peace initiative based on Israeli withdrawal from occupied territories in return for normal relations between Arab states and Israel.
