M. Ghazanfar Ali Khan, Arab News Staff

RIYADH, 4 December 2003 — Saudi Arabia will withhold the $1 billion in loans and credits that it pledged last month for Iraq’s reconstruction.

The delay will last until the security situation is stabilized and a sovereign government takes office, according to Saudi and American officials.

However, there is no change in the Kingdom’s commitment or pledge. A statement released by Saudi ambassador to the US, Prince Bandar ibn Sultan, said “Saudi Arabia stands with the world community in its efforts to bring stability and peace to Iraq and relieve the sufferings of the Iraqi people”.

The decision is a temporary setback for the Bush administration. It had hoped the Kingdom would set an example for other Arab governments by providing vitally needed aid.

Two officials at the Ministry of Foreign Affairs contacted by Arab News said that no official statement concerning the matter had been released so far.

Saudi companies are among a group of international firms to have been awarded contracts for the reconstruction of Iraq. The Saudi companies — Al-Tamimi Global Company and National Catering Company — have won housing and catering contracts from the US construction company Bechtel. A major Saudi relief program to which the Kingdom has provided more than SR77 million in aid and humanitarian assistance for Iraq has been in place since late April.

The Saudi Red Crescent Society sent a 120-bed field hospital and staff to Iraq to treat injured and wounded Iraqis — including a full surgical ward and intensive care unit — as well as more than 50 ambulances.

The hospital is about to end its operation in Iraq and its staff will return to Riyadh in a short time.

In addition, the Saudi Red Crescent Society, working closely with the Iraqi Red Crescent Society, has airlifted a number of Iraqis to Saudi Arabia for treatment.