Iraq tempts bin Laden to attack West

Intelligence sources say the Saudi dissident believed responsible for the bombings of American embassies in Kenya and Tanzania and a US military barracks in Saudi Arabia in 1998, is running out of options for a safe haven.

He is now thought to have overcome his initial rejection of Saddam Hussein, whom he regarded as an exploiter of the Islamic cause rather than a true believer, and is considering the offer of a bolt-hole from which he can continue to mastermind terrorism on a global scale.

A US counter-terrorist source said yesterday: "Our State Department issued a worldwide warning on December 11. We have solid information that many of the groups operating under bin Laden's patronage are planning 'spectaculars' to coincide with the period leading up to and through the millennium celebrations.

"They want to inflict maximum loss of life in return for publicity. Now we are also facing the prospect of an unholy alliance between bin Laden and Saddam. The implications are terrifying.

"We might be looking at the most wanted man on the FBI's target list gaining access to chemical, biological or even nuclear weapons courtesy of Iraq's clandestine research programmes."

The US intelligence community has been squeezing bin Laden's finances steadily for several years. His personal fortune of anything up to £500m has been whittled down to single figures, although funds continue to flow into the coffers of his Al Qaeda - Arabic for "The Base" - organisation from wealthy individuals in the Middle East.

These include members of the Saudi royal family opposed to American involvement in the region and rich businessmen in the Gulf States hoping to buy themselves immunity if bin Laden's Islamic revolution ever manages to overthrow their governments.

But the bulk of his income comes from acting as middleman and fixer for the Afghan opium producers. According to the United Nations, Afghanistan supplies 75% of the world's opium and its heroin derivatives in a narcotics' trade worth an estimated £4bn to £6bn a year.

The Taleban religious fanatics who control 85% of Afghanistan need the cash to fund their never-ending civil wars. They gave bin Laden refuge because he had connections with the Chechen and Russian mafias and their access to money-laundering in the West.

According to Middle Eastern intelligence sources, bin Laden rakes off anything up to £500m a year from his pivotal role in the drugs' trade. It is more than enough to underwrite the cost of mujahideen training camps in Afghanistan, Pakistan and Sudan and the provision of weapons for bin Laden's personal war against the US and its allies.

Up to 20 Islamic extremist groups operate under the loose control of Al Qaeda.

They include Algeria's GSPC, responsible for the casual murder of civilians in the country's Kabylie region, and a network for recruiting Muslim volunteers to fight in the Balkans and Chechnya.

Al Qaeda's tentacles spread across Europe and the Middle East, including the United Kingdom. Up to 2000 young Muslims a year were enlisted in Britain between 1995 and 1998 to fight militant Islam's cause.

They received basic survival and unarmed combat training in Britain, and were then flown to various camps in Yemen, Pakistan, and Afghanistan to be instructed in the use of firearms and explosives. A few were involved in combat in the latter stages of the Bosnian conflict.

The spread of bin Laden's influence has spawned some strange alliances.

Israel's Mossad agency is currently helping the Russians identify known fundamentalist militants in Chechnya. British, Italian and US agents reportedly co-operated with Slobodan Milosevic's regime to root out veterans of the 1979-89 Afghan-Russia war while they were themselves on opposite sides in Bosnia.

The Americans have also resorted to hi-tech destabilisation. Various agencies inserted "sniffer" software programmes into the banking systems of Europe and the Middle East from the mid-1990s onwards.

These were targeted on known or suspected accounts for bin Laden's front men in Holland, Britain, Switzerland, Italy, the US and the Caribbean.

When large amounts of cash were moved around, the programmes flagged up the transactions. Computer experts then transferred or deleted the cash electronically to starve Al Qaeda of funding.

Bin Laden has almost outstayed his welcome in Afghanistan. Despite the Taleban's public declaration of protection for a "guest", the regime is suffering from international sanctions as long as it harbours him.

The Americans have a continually updated plan for a special forces' team to snatch him from his mountain lair in the Hindu Kush.

But they look back to a Soviet raid in the same area in April, 1986, when three battalions of elite Spetznaz commandos went in after a local Afghan commander. Few came back.

Bin Laden is understood to have selected Yemen, his father's birthplace, as a first alternative. But the Yemenis could not protect him from the wrath of the West or Saudi Arabia. Chechnya was his second choice, but the province is being ground under Russia's military jackboot.

That leaves Iraq, and the potential for an alliance which would be everyone else's nightmare. - Dec 28