Looming near the murky Tigris River on the fringes of downtown Baghdad, the Al Rasheed Hotel is the showpiece of Saddam Hussein's global outreach program. A concrete tower best known for the snarling caricature of George Bush Sr. painted on the lobby floor, the Al Rasheed has played host in recent months to a procession of international trade delegations in hot pursuit of lucrative government contracts. On any given day, hundreds of businessmen from China, Russia, Turkey, Malaysia, Italy, and elsewhere--along with dozens of Iraqi security agents--mingle in the hotel lobby and in the outdoor swimming pool. Iraqi officials roar up to the entrance in new Toyota Land Cruisers to meet potential business partners, and talk of oil pipelines and multimillion-dollar construction deals fills the air.
Or, rather, it did before September 11. Within hours of the terrorist attacks on the World Trade Center and the Pentagon, hundreds of Al Rasheed guests rushed for the airport and the Jordanian border, leaving the hotel deserted. As the United States prepares to launch a global military campaign against terrorism, Iraqis--and those interested in doing business with them--are all but certain that their country will be caught in the crosshairs. For the time being, Washington remains focused on Afghanistan as the primary target of the anti-terrorism effort. But several intelligence services, including Israel's Mossad, have identified Saddam as a sponsor of Islamic terrorist cells, and top U.S. government officials--including Deputy Defense Secretary Paul Wolfowitz and, reportedly, his boss Donald Rumsfeld--are eager to include the Iraqi dictator on a list of military targets. Says Aly Eren, a Turkish industrial boiler manufacturer who does $3 million worth of business annually in Iraq: "We're in a state of high anxiety."
I spent nine days in Baghdad in early September, leaving the day before the terrorist attacks. But according to the Iraqis and Western diplomats I subsequently reached by telephone, fear is now palpable. Troops have fanned out across this decrepit, mud-brown capital, beefing up their protection of Saddam's palaces, oil refineries, and other strategic sites. Extra guards have been placed outside the former U.S. Embassy, now an annex to the Embassy of Poland. And in contrast to the celebrations that broke out in the West Bank and Gaza on September 11, most Iraqis appear stunned and frightened. For the moment, at least, the fear of American retaliation has superseded the fear many feel toward Saddam Hussein. "They know what this disaster means because they've lived through many bombardments," a Western diplomat in Baghdad told me. "They're afraid for their lives, their families. They know there's nothing to cheer about."
The regime, of course, tried to blame the horror on the United States. Iraqi state-run television--using live images of the burning towers provided by Al-Jazeera, a Qatarbased Arabic-language network--broadcast commentary that linked the suffering to America's "cruel" foreign policy. Saddam made his first public statement on September 12, during an emergency meeting with Iraq's deputy prime minister and minister of military industrialization."Regardless of the conflicting human feelings about what happened on Tuesday in the U.S., it reaps the thorns that its rulers have sown in the world," Saddam said, according to reports on Iraqi radio and television. Citing a list of American crimes, from the bombing of Japan in World War II to the war in Vietnam, Saddam also addressed the Palestinian intifada: "Now, [the U.S.] carries out criminal acts by supporting criminal and racist Zionism against the women, men, young people, elders, and children of the Palestinian people." A top Iraqi official I reached by phone could barely restrain his satisfaction. "Of course people feel good. How do you feel when your enemy faces a crisis?"
But beneath the bluster, you can feel the regime's deepening panic. Even before the attacks, Western diplomats say, Saddam lived in constant fear of U.S.-sponsored assassination. The dictator avoids public appearances, sleeps in a different palace every night, and keeps his security force in a state of high alert. Occasional bombings intensify the jitters: The week I was there a car bomb went off in a downtown market, injuring a dozen people; an English-language daily newspaper in Baghdad blamed it on "the forces of darkness in Iran." Since September 11, one diplomat told me, "Saddam has been preparing for the worst." An Istanbul businessman glimpsed those preparations when he visited the state-owned oil refinery in Basrah to discuss a contract for new equipment. "Nobody could focus on the business deal," he told me. "They were fortifying the building, trying to protect their machinery from possible bombing." The Iraqi official I spoke to in Baghdad confirmed that the government was expecting massive retaliation. "We will pay a price," he told me, "just as we have been paying a price all along."
In fact, even if no bombs ultimately land on Iraq, the terrorist assault on America may have already dealt a serious blow to Saddam. In recent years the dictator had made great strides luring foreign businesses to Iraq--both legitimate deals under the supervision of the UN-run "oil for food" program and illegal transactions paid for with the more than $1 billion the regime earns through oil smuggling and reselling food shipments abroad. Saddam International Airport, closed for a decade after the Gulf war, opened last year with great fanfare and now receives about 30 international flights a week from Jordan, Egypt, Syria, and other countries; Air France had been considering reestablishing a Paris-Baghdad flight. But businessmen I spoke to said that the outrage provoked by the World Trade Center attack is likely to return Iraq to the isolation it suffered immediately after the Gulf war. "Anybody who visits Iraq will be under close international surveillance now," a Turkish oil engineer told me. "It puts you under enormous psychological pressure. You feel like you're committing a crime just going there."
And the pressure may manifest itself in a strengthening of international sanctions, which had been weakening for years. At the UN Security Council meeting in November, members will reconsider the current policy. If Saddam refuses to allow UN weapons inspectors into the country, he could face U.S.-backed "smart sanctions," which would dent the regime's smuggling revenues by stationing international monitors at all its borders. Last July, Russia announced it would veto the American plan. But in the wake of the World Trade Center bombing, Moscow is eager to burnish its anti-terrorist bona fides--and there are growing signs that it might get on board this time. That prospect terrifies Saddam, who depends on the cash from black-market sales to pay off his army and maintain his weapons program. Experts say that Saddam is still unlikely to soften his position on UN arms inspections. "There is no sign that the Iraqis have any willingness to compromise," a Western diplomat in Baghdad told me last week. "But this time they will not be able to count on Russian resistance. This time they will not get away."
As evidence, the diplomat recounted his experience at the Al Rasheed Hotel. For the last two months, the hotel had been filled with hundreds of Russian businessmen seeking fat construction contracts as a prize for their government's opposition to smart sanctions. But after a visit to the hotel last weekend, the diplomat told me gravely, "Even the Russians are gone."
This article originally ran in the October 8, 2001, issue of the magazine.