The sight of Syrian Foreign Affairs Minister Farouq al-Shara haranguing UK Foreign Secretary Jack Straw in the toilets of Manama's Ritz Carlton hotel during the recent G8 Forum for the Future summit on Arab democracy was unusual to say the least.

At their previous meeting at the UN two weeks earlier, an angry row between the two men generated headlines around the world. The spat occurred during the crucial UN Security Council vote on the UK, US and France-sponsored resolution 1636, which threatens Damascus with unspecified 'further action' unless it co-operates with the UN investigation into the murder of former Lebanese prime minister Rafiq Hariri.

The resolution has left Damascus isolated, particularly since its key ally - Russia - supported the resolution. The continuation of the debate in the bathroom of a hotel crawling with journalists is a clear sign of the frustration felt by Damascus.

In the 12 November encounter, Al-Shara told Straw of Damascus' anger at the demands being made by Detlev Mehlis, the UN's chief inspector, into the Hariri killing. 'He does not understand politics,' Al-Shara said, referring to Mehlis' requests to interview senior Syrian officials in Lebanon.

Although Damascus has promised to co-operate with the investigation - a promise repeated by Al-Shara at the UN on 21 November - it is furious at what it believes to be a politically-motivated inquiry, whose initial findings have already pointed the finger of suspicion at senior officials close to President Asad, triggering resolution 1636.

In a trenchant televised address to the nation on 11 November, Asad summed up Syria's frustrations, calling the investigation a fraud. 'Whatever we do, and no matter how much we co-operate, the result will show in a month's time or a year's time that Syria did not co-operate,' he said.

'The Syrians are trying to delegitimise the whole Mehlis investigation,' says Damascus-based political analyst Joshua Landis. 'They are trying to unravel the whole thing. They want to understand what the US wants so they can give it to them. But the US appears to be set on isolating Damascus. It says it wants strategic change in Damascus but it is unclear exactly what changes it wants.'

Hardline

Asad's speech represented a hardening of the president's position against the US. He claimed that Syria was facing a sustained attack from the West and he called for Syrians to unite against the pressure.

'The region is in front of two choices, either resistance and steadfastness, or chaos,' he said. 'There is no third choice. Resistance prevents chaos. Resistance has a price and chaos has a price, but the price of resistance is much less than the price of chaos. But if they believe that they can blackmail Syria, we tell them they got the wrong address.'

However, Asad left the door open for dialogue. 'If it is a matter of a bargain: they raise a problem here in order to bargain over different issues, such as Iraq for instance. Let them come forward and negotiate and bargain over the counter and in front of our people,' he said.

Asad's arrival in 2000 was seen by many as a new dawn for Damascus. A young, Western-educated moderniser, he would bring reform to the politically outdated and economically stagnant country. But many have been frustrated by the slow pace of change and have questioned whether the young president is capable of delivering reform in the face of a powerful conservative lobby.

'This was a defining speech,' says Landis. 'The president has his feet in the conservative and reform camps. But the security people have taken the advantage. They are promising him stability while the reformers can only offer uncertainty with the hope of a better world at some point in the future.'

However, Asad is running out of options on the economy. In September, the IMF d