The Prime Minister's Office, which views the pipeline to Haifa as a "bonus" the U.S. could give to Israel in return for its unequivocal support for the American-led campaign in Iraq, had asked the Americans for the official telegram.

The new pipeline would take oil from the Kirkuk area, where some 40 percent of Iraqi oil is produced, and transport it via Mosul, and then across Jordan to Israel. The U.S. telegram included a request for a cost estimate for repairing the Mosul-Haifa pipeline that was in use prior to 1948. During the War of Independence, the Iraqis stopped the flow of oil to Haifa and the pipeline fell into disrepair over the years.

The National Infrastructure Ministry has recently conducted research indicating that construction of a 42-inch diameter pipeline between Kirkuk and Haifa would cost about $400,000 per kilometer. The old Mosul-Haifa pipeline was only 8 inches in diameter.

National Infrastructure Minister Yosef Paritzky said yesterday that the port of Haifa is an attractive destination for Iraqi oil and that he plans to discuss this matter with the U.S. secretary of energy during his planned visit to Washington next month. Paritzky added that the plan depends on Jordan's consent and that Jordan would receive a transit fee for allowing the oil to piped through its territory. The minister noted, however, that "due to pan-Arab concerns, it will be hard for the Jordanians to agree to the flow of Iraqi oil via Jordan and Israel."

Sources in Jerusalem confirmed yesterday that the Americans are looking into the possibility of laying a new pipeline via Jordan and Israel. (There is also a pipeline running via Syria that has not been used in some three decades.)

Iraqi oil is now being transported via Turkey to a small Mediterranean port near the Syrian border. The transit fee collected by Turkey is an important source of revenue for the country. This line has been damaged by sabotage twice in recent weeks and is presently out of service.

In response to rumors about the possible Kirkuk-Mosul-Haifa pipeline, Turkey has warned Israel that it would regard this development as a serious blow to Turkish-Israeli relations.

Sources in Jerusalem suggest that the American hints about the alternative pipeline are part of an attempt to apply pressure on Turkey.

Iraq is one of the world's largest oil producers, with the potential of reaching about 2.5 million barrels a day. Oil exports were halted after the Gulf War in 1991 and then were allowed again on a limited basis (1.5 million barrels per day) to finance the import of food and medicines. Iraq is currently exporting several hundred thousand barrels of oil per day.

During his visit to Washington in about two weeks, Paritzky also plans to discuss the possibility of U.S. and international assistance for joint Israeli-Palestinian projects in the areas of energy and infrastructure, natural gas, desalination and electricity.