Bush Delivers Major Arms Sale To Saudis

President Bush delivered a sophisticated weapons sale for Saudi Arabia on Monday, trying to bolster defenses against threats from U.S. adversary Iran and muster support in this oil-rich kingdom for a long-stalled Mideast peace agreement.

On a surprisingly cold day with blustery winds, Mr. Bush received a warm embrace from King Abdullah, whose family wields almost absolute rule. Among ordinary Saudis and across much of the Mideast, Mr. Bush is unpopular, particularly because of the Iraq war and unflinching U.S. support for Israel.

Mr. Bush and Abdullah were going to some lengths over two days to emphasize their strong personal ties.

Saudi Arabia holds the world's largest oil reserves and surging fuel costs are putting a major strain on the troubled U.S. economy. The issue has come up in earlier stops on Mr. Bush's eight-day trip, largely in the context of his quest for alternate fuels and sources of energy, the officials said.

A senior administration official confirmed to CBS News senior White House correspondent Bill Plante that the subject of $100-a-barrel oil, a prospect with serious repercussions for U.S. consumers and the economy as a whole, had not come up in any meetings he attended in Dubai.

White House counselor Ed Gillespie said Mideast leaders have "talked about the nature of the market and the vast demand that's on the world market today for oil." He said that was "a legitimate and accurate point."

Mr. Bush, who dislikes late nights, also stayed up well past his regular 9:30 p.m. bedtime for after-dinner talks with the king in the walled compound of his opulent palace. Its marble floors and walls contain sheets of gold, colored with precious stones and embedded jewels.

In a show of hospitality, the king invited Bush to come Tuesday to his lavish horse farm where 150 Arabian stallions are stabled. The visit, including an overnight by Mr. Bush, is a payback for the president hosting Abdullah at his Texas ranch.

U.S. officials said much of conversation over Monday's palace dinner was about chill temperatures that dropped into the 40s. Gillespie said there were predictions for snow Tuesday, the first to fall here since 1968.

Coinciding with Mr. Bush's arrival, the administration officially notified Congress it will offer Saudi Arabia sophisticated Joint Direct Attack Munitions - or "smart bomb" - technology and related equipment. The deal envisions the transfer of 900 of the precision-guided bomb kits, worth $123 million, that would give Saudi forces highly accurate targeting abilities.

Some lawmakers fear the systems could be used against Israel but Congress appears unlikely to block the deal because of Saudi Arabia's cooperation in the war on terror and in deterring aggression from Iran.

"We need to be convinced that the sale makes sense militarily and ensure that it in no way harms our security or those of our allies," said Sen. Joseph Biden, D-Del., chairman of the Senate Foreign Relations Committee. "We must also make certain that the administration does not just try to use a few arms sales to substitute for the comprehensive, coherent strategy we need for the region."

The United States already has notified Congress of five other packages to Saudi Arabia, the United Arab Emirates and Kuwait, including Patriot missiles. The total amount of eventual sales as part of the Gulf Security Dialogue is estimated at $20 billion, a figure subject to actual purchases.

The sales are a key element in Mr. Bush's strategy to shore up defenses against Iran, which the president has deemed the world's top state sponsor of terrorism. Saudi Arabia and other Gulf states, with majority Sunni Muslim populations, harbor deep suspicions about Shiite Iran's rising power and want to make sure the U.S. remains committed to keeping Tehran's ambitions in check. At the same time, Arab allies are worried that the world economy would suffer heavily if the U.S. dispute with Iran turns into a military confrontation.

On Mideast peace, Saudi Arabia handed Mr. Bush a coup by taking part in the U.S.-sponsored Mideast peace conference in Annapolis, Md., in November. The president was expected to encourage Saudi Arabia during his visit to use some of its vast wealth to help struggling Palestinians build the foundations of a future state. Mr. Bush also sees support from Arab neighbors as crucial to the Palestinian leadership being able to successfully negotiate with Israel over borders and other contentious issues.

Abdullah, for his part, was expected to urge Mr. Bush to keep up the pressure on Israel to halt settlements in Palestinian territories.

Mr. Bush's drive to spread democracy across the Mideast was another likely topic. The king has tried to push some reforms on education and women's rights and there have been limited municipal council elections. But he has been cautious and limited in his effort.

Posing for pictures, the king and the president did not speak about political matters. Abdullah presented Mr. Bush with what appeared to be a medallion of gold with white and green stones, suspended from a gold palm tree emblem with crossed swords.

"The least we can do in providing you hospitality is to provide you with the highest order of the Kingdom of Saudi Arabia, and that is the Order of the late King Abdul Aziz, founder of the Kingdom of Saudi Arabia," Abdullah said, speaking through a translator.

Gillespie said there was a lot of interest over dinner about turmoil in U.S. financial markets as well as the U.S. presidential race.

He said some Mideast leaders were looking past the Bush presidency to his successor and what changes might occur. At the same time, he said it was helpful for the leaders to deal with Mr. Bush, someone they know.

The president began the day in the Persian Gulf city-state of Dubai, the cosmopolitan banking and business hub propelled into the news when a locally-owned company agreed to manage six of the United States' largest ports. The deal was aborted after a storm of protests about foreign control of key U.S. facilities.

National Security Adviser Stephen Hadley said the president, in talks with local leaders, had to reassure them that the United States was open for foreign investment.

"I also want you to understand something about America - that we respect you, we respect your religion and we want to work together for the sake of freedom and peace," Mr. Bush told the group.