PARIS, OCT. 6 -- Libya's Col. Moammar Gadhafi has forged a political alliance with Algeria that significantly sets back the U.S. campaign to isolate the volatile Arab leader, diplomatic sources disclosed today.
The alliance takes the form of a political union that is due to be announced on Nov. 1. Western and Arab diplomats fear it could represent a dramatic shift in the regional balance of power in North Africa, where Algeria has acted as a restraining force on Gadhafi's efforts to destabilize Tunisia.
Since coming to power in 1969, Gadhafi has struck union agreements with Morocco, Egypt, Syria, Sudan, Tunisia and Algeria. Each one failed to take effect or quickly came undone. The Libyan leader's erratic behavior and failure to deliver on economic promises usually have been key factors in the repeated failure of his efforts to enlarge his political base through agreements with other Arab countries.
But the timing of his projected union with Algeria and the cautious manner in which Algerian President Chadli Benjedid undertakes foreign commitments, have persuaded some policymakers in Washington and Paris that the new union agreement has to be taken as a potential threat to western interests, according to diplomatic sources.
Vice President Bush is reported to have voiced concern to French officials here last week on the Algerian-Libyan rapprochement and its impact not only on Tunisia but also on Chad, where Libya continues to confront the French-supported army of President Hissene Habre.
Washington and Paris have considered a previously undisclosed commitment by Algeria to intervene in Tunisia to protect President Habib Bourguiba, now 84 and ailing, or his successor against a Libyan invasion or major subversion campaign as a vital element of stability in North Africa.
Chadli is reliably reported to have conveyed an oral commitment to Bourguiba to provide such protection within the past four years, and any visible weakening of that pledge by the union with Libya could help undermine Tunisia's already shaky government.
The political agreement was secretly negotiated by Gadhafi and Chadli this summer, according to Arab and western sources. Its text, of roughly 20 pages, was communicated to other North African countries last month along with invitations to join the union.
Tunisia is known to have rejected the invitation.
Gadhafi alluded to the agreement in a rambling speech he delivered on Sept. 1, the anniversary of the 1969 coup in which he seized power.
He had pushed to have the accord unveiled then, but Algeria insisted that it not be made public before Nov. 1, its national holiday.
The agreement specifically reserves national sovereignty on foreign affairs and defense matters to each government and rules out a "fusion" of the two governments, according to sources who have learned the details of the accord.
It establishes five levels of unified political institutions, headed by a presidential council composed of Gadhafi and Chadli, who would rotate as senior president.
There also would be a 100-member Libyan-Algerian legislature with 50 members from each nation, and an eight-member executive council of ministers that would report to the presidential council.
The practical effect on the governments of the two countries of such an arrangement is unclear, diplomats say.
But these sources foresee immediate political advantages for Gadhafi and potential economic gains for Algeria. They report that Libya is expected to make concessions in resolving long-standing disputes over oil deposits in the remote regions along their common border and to reactivate some joint projects for petroleum and gas pipelines that would aid Algerian exports.
Gadhafi has been identified repeatedly by western nations as a major supporter of international terrorism, and his residential compound was a target in the American air strike on Tripoli in April 1986 that followed the bombing of a discotheque frequented by American servicemen in West Berlin.
He survived the strike but in weakened condition. U.S. intelligence reports said he moved the capital from Tripoli deep into the desert heartland and portrayed him as running the government from various small hideaways after the bombing.
His position at home seemed to have been further weakened last winter as Chadian troops drove a Libyan occupation force out of the desert of northern Chad.
But Gadhafi succeeded in late August in recapturing the disputed Aozou Strip along the Libyan-Chadian border.
He has also improved his standing in the Arab world by making overtures to Iraq and stopping his open support for Iran in the war between those two Persian Gulf nations.
Brandishing his new relationship with Algeria will also help Gadhafi secure his position at home, in the view of diplomatic analysts.
Algeria is also a key player in the Chad conflict because of its support for Goukouni Oueddei, a Chadian rebel leader who broke with Gadhafi last winter and rallied briefly to Habre's side. The defection was a central event in the Libyan defeat in the north.
Goukouni has been unable to come to terms with Habre on a new government and has been reestablishing a position, with Algerian help, as an alternative to Habre. Gadhafi reportedly has put out feelers to Goukouni in hopes of rebuilding a political role in Chad, and Algeria's position will be a key factor in this effort.
Gadhafi's most recent effort at union was with Morocco. The political accord was signed in 1984 and collapsed in August 1986. The new union aligns two nations that traditionally have been hostile to Morocco's King Hassan II, a close ally of the United States.