* Gulf states fail to agree on further integration
* Some Gulf states fear Saudis will gain too much sway (Adds analyst reaction, details)
By Angus McDowall
RIYADH, May 14 (Reuters) - Gulf Arab countries failed to agree on further integration on Monday after a high-profile summit seen as part of Saudi efforts to counter Iran’s growing influence and Shi’ite Muslim discontent in Bahrain.
Gulf politicians had played up the idea that the Riyadh meeting would establish closer union between Bahrain and Saudi Arabia, which sent troops in March last year to help Manama in an initial effort to squash the uprising.
But Saudi Foreign Minister Prince Saud al-Faisal, speaking after the two hour summit, told a news conference that talks on a possible union of six nations had been postponed until the next meeting in Bahrain in December.
“Leaders of the Gulf Cooperation Council (GCC) have approved the call for a commission to continue studying in order to present final results (to a coming summit),” he said.
“The issue will take time... The aim is for all countries to join, not just two or three. ... I’m hoping that the six countries will unite in the next meeting.”
The union calls for economic, political and military coordination and a new decision-making body based in Riyadh, replacing the current GCC Secretariat.
But analysts say the plan faces considerable obstacles among Gulf leaders who have jealously guarded their turf.
Neither Oman nor the UAE was represented by their leaders at the summit, where the other “brother rulers”, as the Saudi press describes them, were met by the octogenarian Saudi King Abdullah leaning heavily on a stick.
Speaking about Bahrain, the veteran Saudi minister added: “There was no step to have a special relationship between Bahrain and Saudi Arabia, although both countries would welcome closer association. We’re in full cooperation with all Gulf states to come up with the union.”
Majority Shi’ites have been leading an uprising in Bahrain for democratic reforms for over a year, raising Saudi fears of an impact upon Shi’ites in its oil-producing Eastern Province.
The Saudi minister said that Gulf leaders had agreed to sign a deal struck by interior ministers on closer security cooperation and that ministers would work “day and night” in economic, political, security and military committees set up since a summit last December to prepare the ground for union.
The GCC was formed in 1981 by Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates to counter Iraqi and Iranian influence at the time.
At the summit, Bahrain’s monarch headed a large delegation that included royal court minister Khaled bin Ahmed, a leading hardliner within the ruling Al Khalifa family seen as opposing granting concessions to Shi’ites who are leading the protests.
“We look forward today to the establishment of the Gulf Union,” said Bahrain’s King Hamad in a statement released by Bahrain’s state news agency when he arrived in Riyadh.
As delegates prepared to meet, protesters burned tyres in Manama, sending plumes of smoke over the airport. Some 81 people have died in violence during 15 months of unrest, according to activists.
Oman and the UAE were represented by other senior members of their ruling dynasties at the summit. Gulf analysts say some GCC members are averse to integration, fearing a loss of sovereignty.
Sunni hardliners in Bahrain however have pushed the idea of a confederation with Saudi Arabia as a way to pull the carpet from under the feet of the Shi’ite opposition.
The ruling Al Saud family enjoys close personal ties with Bahrain’s Al Khalifa clan and Saudi citizens regularly travel across the 25 km causeway to Bahrain on weekends.
“Almost everybody can say in principal that they approve of this idea, but as far as I can tell, Saudi Arabia and Bahrain are the only two countries that find it particularly attractive,” said Gary Sick, professor of Middle East politics at Columbia University.
Analysts say that by joining up with Bahrain, Saudi Arabia would gain more say over its tiny neighbour’s security, and that could ruffle feathers among other Gulf states.
Saudi Arabia, the world’s top oil exporter, is by far the largest and most powerful of the Gulf Arab states. The UAE and Oman pulled out of a single currency scheme which would involve a Gulf central bank based in Riyadh.
Not all Saudis think integration is a good idea. “If we join with Bahrain we risk importing their problems,” said Abdullah al-Shammari, a Saudi political analyst.
As for Iran, Gulf Arabs accuse it of fomenting recent unrest in Bahrain - a charge Iran and protesters deny. Tehran, which has lauded the Bahrain uprising as an “Islamic awakening”, reacted to the union proposals with alarm.
“Saudi Arabia and the ruler of Bahrain know that without doubt these foolish measures will make the Bahraini people more united against the occupiers,” a statement by 190 members of Iran’s parliament said on Monday.
Saud al-Faisal chided Iran for objecting. “The threats from Iran are not acceptable,” he said. “Even if we reach the path of union, Iran should not interfere.” (Additional reporting by Andrew Hammond, Marcus George and Rania El-Gamal in Dubai; Writing by Andrew Hammond and Angus McDowall; Editing by Reed Stevenson, Sami Aboudi and Maria Golovnina)