Syrian leaders in upbeat mood despite IAEA visit

By Alistair Lyon, Special Correspondent - Analysis

BEIRUT (Reuters) - Syrian leaders host U.N. nuclear sleuths next week, but the intrusion may not spoil a sense of confidence generated by indirect peace talks with Israel, gains for their allies in Lebanon and a rapprochement with France.

The International Atomic Energy Agency (IAEA) inspectors will investigate U.S. charges that Syria was secretly building a nuclear reactor with North Korean technology at a site bombed by Israel nine months ago. Damascus denies any such covert work.

The Syrians clearly do not relish the visit by the U.N. team due in Damascus on Sunday, but for now their mood is buoyant.

"The Syrians feel very confident because things on all fronts are progressing towards a kind of reconciliation or cooling down," pro-government analyst Samir al-Taqi, director of the Orient Centre for Studies, said by telephone from Damascus.

Apart from Syria's Turkish-mediated talks with Israel, he cited attempts to mend the rift between the Palestinian Fatah group and its Syrian-backed Islamist rival Hamas, the Gaza truce between Israel and Hamas, and a calming of conflict in Lebanon.

Syria, whose troops left Lebanon in 2005, was delighted by last month's Qatari-brokered deal among rival Lebanese leaders which translated a military victory won by Hezbollah and other Syrian allies against U.S.-backed factions into political gains.

"The Syrians were thrilled to see them wiping away the facade of U.S. power," said Joshua Landis, a Syria expert at Oklahoma University. "It was clearly very sobering for the Americans, who are trying to figure out where to go from here."

The Doha deal, which gave the Hezbollah-led opposition veto power in Lebanon's next government, broke an 18-month political deadlock and allowed the election of President Michel Suleiman. This in turn prompted France to reward Syria diplomatically.

France froze high-level contacts with Syria last year after accusing it of sabotaging French mediation efforts in Lebanon.

SARKOZY SWITCH

Crediting Syria with a positive role in the Doha agreement, President Nicolas Sarkozy has invited his Syrian counterpart Bashar al-Assad to Paris for a July 13 Euro-Mediterranean summit which Israeli Prime Ehud Olmert is also due to attend.

Assad has damped speculation he might encounter Olmert on the sidelines, saying "this is not like drinking tea" and that a meeting would be meaningless without progress in negotiations.

Syria, demanding that Israel return all of the Golan Heights occupied in 1967, insists peace talks can only succeed with the full involvement of the United States -- unlikely to materialize under President George W. Bush, who views Damascus as an "evil" ally of Iran and of groups hostile to U.S.-Israeli interests.

So are things really going Syria's way, especially with the prospect of a new president in the White House next year?

Those who believe Syria is serious about peace with Israel and ready for the major foreign and domestic policy realignments this would entail are keeping their fingers crossed.