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The Report of the Iraq Inquiry
205.  The FCO judged that:
“The wider strategic consequences of a worst-case scenario like this would be
appalling:
Iraq would become a long-term source of instability in the region …
Iraq could become a permanent base for Al Qaida and Sunni Islamic terrorism,
further destabilising Saudi Arabia.
Jihadist elements would declare victory and be strengthened, with significant
implications for the Global War on Terrorism and the prospects for the
Arab‑Israeli conflict.
Prospects for reform in the Arab world could be set back a decade.
Having seen the US fail, an increasingly self-confident Iran steps up efforts
to become the major regional power, accelerates its nuclear programme and
triggers a regional arms race.
Instability causes oil prices to rise further.”
206.  The paper concluded that scenario was a long way off. There was likely to be
scope, even with a significant “troops out majority” in the Transitional National Assembly
(TNA), to negotiate a phased withdrawal to mitigate the risk of a downward spiral.
207.  The covering letter from Mr Straw’s Private Secretary to Mr Blair’s Private
Secretary highlighted that Prime Minister Allawi might “take the sting out of nationalists’
and Sunni rejectionists’ grievances that the MNF-I (US presence) represents indefinite
occupation by a different name” by making an announcement about withdrawal in
November. The FCO and MOD would be working on a joint paper for discussion with
the US and then Prime Minister Allawi.
208.  On 12 October, Mr Hoon wrote to Lord Goldsmith, the Attorney General, reporting
that the security situation had deteriorated since transfer of sovereignty in June.106
209.  While there was no state of armed conflict between the UK and Iraq, the MOD
believed that a state of armed conflict existed between the IIG and certain insurgent
groups within Iraq. In Mr Hoon’s view, international humanitarian law (IHL) would provide
a more appropriate legal framework for UK forces operating within Iraq and he therefore
considered it necessary to activate the dormant provisions of the Targeting Directive
which allowed the Joint Commander to seek Ministerial approval to conduct operations
governed by the Law of Armed Conflict (LOAC). That would enable UK forces to engage
certain clearly defined insurgent groups under IHL and would also clarify the position of
UK service personnel embedded in the US command chain.
106  Letter Hoon to Goldsmith, 12 October 2004, ‘Review of Legal Framework for UK Forces and
for ‘embeds’.
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