CAIRO, JULY 24 -- Egyptian President Hosni Mubarak, signaling increased Arab concern over the massing of Iraqi troops near Kuwait's border, today made a surprise visit to both states in an effort to bolster so-far-unsuccessful Arab mediation attempts.
There was no indication late tonight whether Mubarak had succeeded in defusing what has become the biggest crisis in the Persian Gulf since the Iran-Iraq War ended in 1988. A mediation trip to Baghdad last weekend by Saudi Foreign Minister Prince Saud apparently ended without progress toward resolving the dispute.
Mubarak's shuttle diplomacy comes as Iraq, which moved 30,000 troops to the border on Saturday, continues its bellicose verbal assault on Kuwait, which it accuses of pilfering Iraqi oil and conspiring with the United States to drive down oil prices.
Washington, meanwhile, in an apparent warning signal to Iraqi President Saddam Hussein, disclosed that the U.S. fleet in the Persian Gulf is holding a "short-notice exercise" with naval forces of the United Arab Emirates, another gulf state that has recently been threatened by Iraq.
The focus of the confrontation is likely to shift later this week to Geneva, where a gathering of OPEC oil ministers will wrestle with what analysts say is Iraq's real concern: obtaining additional money to ease a worsening financial crisis at home. Iraq will urge the oil cartel to boost its target price to $25 from the current $18.
"What this is really about is the cash crunch the Iraqis are in," said James Placke, an international affairs consultant in Washington who closely follows Iraqi affairs.
Placke said Iraq needs money urgently to finance postwar reconstruction and pay off more than $40 billion in debts to Western countries.
Several military analysts interviewed today also expressed this view, saying that they see Iraq's move of about two armored divisions to the border as a scare tactic to enforce Kuwaiti compliance with Iraq's demands on oil production, rather than as any prelude to an invasion.
"I think this rattling of sabers is to scare the hell out of Kuwait for the meeting," said Heino Kopietz, a London-based Middle East analyst, referring to the meeting of the 13-nation Organization of Petroleum Exporting Countries scheduled to begin Thursday.
Arriving in Geneva for that meeting, Iraqi Oil Minister Issam Chalabi claimed today that there is "unanimous support" among the 13 oil-producing countries for Iraq's position that oil prices should rise to a "minimum" of $25 a barrel.
Oil market analysts, however, said that given projected world petroleum demand for the rest of 1990, that price target is unrealistic even if OPEC members stay within their assigned production quotas, as Iraq is demanding. The analysts said spot market prices have been rising in recent days, largely because of the gulf situation, and are now near the OPEC target level of $18 a barrel, up sharply from roughly $14 a barrel earlier this year.
It was a feud with Kuwait and the UAE over oil money that helped spark the current crisis. After months of warning the two states to stop overproducing, Iraq's Saddam Hussein charged in a speech July 17 that some gulf states had stabbed Iraq in the back "with a poison dagger" by exceeding their quotas in a U.S.-led conspiracy to keep petroleum prices low.
He added ominously that "if words fail to protect Iraqis, something effective must be done to return things to their natural course and return usurped rights to their owners."
Even before that speech, Kuwait and the UAE had tentatively agreed to cut back production to 1.5 million barrels a day each, compared to the roughly 2 million barrels each had been pumping. Those lower quotas are to be ratified at this week's OPEC meeting.
Iraq stepped up its criticism last week, directly attacking Kuwait. Iraqi Foreign Minister Tariq Aziz accused the Massachusetts-sized emirate of "stealing" Iraqi oil and building military installations on Iraqi territory.
The alleged stealing was a reference to oil Kuwait has pumped from the Rumaila field, a large, deep reservoir that lies mainly within Iraq but extends several miles into Kuwait.
Iraq, which has not yet begun exploiting its share of a newly discovered portion of the field, has demanded $2.5 billion in damages from Kuwait -- roughly the value of the oil Kuwait has taken from the field since the early 1980s, according to Placke.
The cash-short Iraqis have also demanded that their Arab neighbors in the gulf region -- Kuwait, Saudi Arabia and the UAE -- forgive an estimated $30 billion to $35 billion in loans they made to Saddam Hussein's government during the Iraq-Iran war.
"What they want is money. They are cash-poor," said Judith Kipper, a Middle East analyst associated with the Brookings Institution. One indication of their financial difficulties is that Iraq's indebtedness to Western countries, which stood at about $30 billion when the gulf war ended, has climbed in the past two years to over $40 billion, Placke said.
The dispute over the Rumaila field illustrates the longstanding border problems between Iraq and Kuwait. Iraq's Aziz has declared Rumaila is Iraqi in both "name and land." Other Iraqi sources contend that while Baghdad was preoccupied with its war with Iran, Kuwait "moved its border" 2.5 miles north and began pumping oil from Rumaila.
Placke said, however, that there is "no evidence Kuwait is doing anything improper." There are many instances in which oil fields cross international boundaries, forcing two or more parties to negotiate over the use of the reservoir, he said.
In the recent quarrel, Kuwait has accused Iraq of refusing to settle longstanding disputes over their 100-mile border, and charged that Iraq had a "rich record" of violating Kuwaiti territory.
When Kuwait became independent in 1961, Iraq claimed all of its territory, backing down only when Britain came to Kuwait's defense. In March 1973, Iraqi troops and tanks temporarily occupied a Kuwaiti border outpost, but later withdrew.
In remarks released in the Iraqi news media today, Aziz attacked Kuwait's relationship with the United States.
He asserted that U.S. offers that Kuwait "could seek the shadow of the American force" were "clear encouragement for the Kuwaiti government to go on with its deliberate policy of aggression against Iraq."