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Dubai, United Arab Emirates – Syria and Iran are willing to help stabilize Iraq, as the Iraq Study Group recommended Wednesday, but both countries will want something in return and neither has a magic solution to the chaos, Mideast officials and analysts said.

Arabs paid close attention to the group’s long-awaited report – recognizing that Washington’s next moves in Iraq could have a major impact across the Mideast.

The region’s most popular satellite news networks, Al-Jazeera and Al-Arabiya, both devoted live coverage – with Arabic voice-over translation – of the release of the report at a Washington press conference.

The networks also repeatedly showed congressional testimony Tuesday by Robert Gates, President Bush’s nominee for defense secretary, who acknowledged the U.S. was not winning the war in Iraq and told lawmakers “all options are on the table.” The bipartisan Iraq report warned that the situation in Iraq is “grave and deteriorating” and called for the Bush administration to try to engage Syria and Iran in diplomatic effort to bring stability.

Syria’s vice president said Wednesday that both his country and its ally Iran are prepared to help.

“The two countries are Iraq’s neighbors, and without getting them involved it will not be easy to find a solution to the predicament in Iraq,” Farouq al-Sharaa told a political conference in Damascus.

“We are not so arrogant to say that Syria and Iran can solve Iraq’s problem,” he said. “The entire international community may not be able to solve it. But let them (the Americans) be a little bit modest and accept whoever has the capability to help.”

Iran and Syria have influence with both of the major groups involved in Iraq’s sectarian violence. Tehran is close to Shiite parties that dominate the government, while Damascus has ties to Sunni Arabs, their main rivals for power.

Iran is also believed to sponsor Shiite militias blamed for widespread killings of Sunnis. The U.S., meanwhile, accuses Syria of providing refuge for Sunni Arab fighters, including former Iraqi Baath Party leaders thought to have a role in directing the insurgency.

Bush says the countries encourage the violence in Iraq, though each denies backing extremists.

Syria’s ambassador to Washington, Imad Moustapha, said his country is willing to encourage Iraq’s Sunni Arabs to support the political process. But Damascus wants assurances that the United States will prevent Iraq from breaking apart.

Syria and Iran are likely to want something for themselves as well. Damascus may ask the United States to accept Syria’s influence in Lebanon, where Washington supports the anti-Syrian government.

Syria also hopes to regain the Golan Heights, lost to Israel in 1967, through renewed peace talks.

Iran, meanwhile, has demanded that American forces leave Iraq, a step that could push the Shiite-led government even closer to Tehran.

No matter what the terms, if the U.S. turns to Iran, that will consecrate its status as a Middle East power broker.

The Sunni Arab states of the Mideast, including some of the U.S.’s staunchest allies, may not accept increased influence for Iran, which is non-Arab and Shiite. The Arab states already are deeply concerned over Teh ran’s influence in Iraq and Lebanon.

Still, Arabs also want their voices heard after three years of feeling that the U.S. was ignoring them on Iraq policies.

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