President Saddam Hussein on 9 January issued an appeal to Arab countries to set aside their differences, and he specifically mentioned the need for Iraq to improve its relations with Kuwait and Saudi Arabia. His remarks came during a meeting with Fahd bin Mohamed al-Thani, a senior member of the Qatari ruling family. The message of Arab solidarity with Iraq is to be reinforced with the planned visit to Baghdad on 18-20 January by Arab League secretary-general Amr Moussa. Iraqi Foreign Affairs Minister Naji Sabri is also set to make a rare trip to a Gulf Arab state with a visit to Bahrain at the end of January.

The Arab League is planning to hold a summit conference in Beirut on 25-26 March, and the issue of Iraq is likely to be high on the agenda.

The Iraqi diplomatic moves come amid signs from Washington that the US administration may be having second thoughts about launching a major drive to overthrow the regime of Saddam Hussein. Deputy defence secretary Paul Wolfowitz, seen as one of the strongest advocates of such a move within the administration, has indicated that he sees other targets as more important in the present stage of the US campaign against terrorism. In an interview published by the New York Times on 8 January, Wolfowitz said the US was determined to root out terrorist networks in states such as Somalia and Yemen. He only made passing reference to Iraq in this connection, noting that, while the Iraqi leader 'is keeping his head down.that should not leave the impression that he doesn't continue to do a bunch of things that concern us'.

The US has been reported to be considering plans to pressurise the Baghdad regime through increasing support for opposition groups. However, the credibility of any such campaign took a knock on 5 January when the US State Department said it had suspended funding for the Iraqi National Congress (INC) after an audit had identified 'financial management and internal control weaknesses regarding the accounting of US funds'. The INC said on 7 January that the funds would be restored once certain financial controls had been instituted. 'The statement issued by the State Department was premature and was clearly engineered by officials who don't want aggressive action against Iraq,' an INC spokesman said.

The US has also come in for criticism from the UN for blocking supplies to Iraq as part of the oil-for-food programme. Benon Sevan, the executive director of the UN programme, was scheduled to visit Baghdad in mid January to discuss the hold-ups. In a statement issued on 8 January, Sevan expressed 'grave concern at the unprecedented surge in the volume of holds', which he said had now reached $4,956 million. The US is thought to be responsible for most of the blockages, enacted through the UN sanctions committee. Sevan was last in Baghdad in August 2000.