Exclusive-US, UAE discussed lifting Assad sanctions in exchange for break with Iran, sources say

The U.S. and the United Arab Emirates have discussed with each other the possibility of lifting sanctions on Syrian President Bashar al-Assad if he peels himself away from Iran and cuts off weapons routes to Lebanon's Hezbollah, five people familiar with the matter said.

The conversations intensified in recent months, the sources said, driven by the possible expiry on Dec. 20 of sweeping U.S. sanctions on Syria and by Israel's campaign against Tehran's regional network, including Hezbollah in Lebanon, Hamas in Gaza and Iranian assets in Syria.

The discussions took place before anti-Assad rebels swept into Aleppo last week in their biggest offensive in Syria for years.

According to the sources, the new rebel advance is a signal of precisely the sort of weakness in Assad's alliance with Iran that the Emirati and U.S. initiative aims to exploit. But if Assad embraces Iranian help for a counter-offensive, that could also complicate efforts to drive a wedge between them, the sources said.

Iran's foreign minister Abbas Araqchi visited Syria on Sunday in a show of support for Assad, and UAE President Sheikh Mohamed bin Zayed Al Nahyan spoke to Assad by phone about latest developments at the weekend.

For this story, Reuters spoke to two U.S. sources, four Syrian and Lebanese interlocutors and two foreign diplomats who said the U.S. and UAE see a window to drive a wedge between Assad and Iran, which helped him recapture swathes of his country during the civil war that erupted in 2011.

Lebanese media have reported that Israel had suggested lifting U.S. sanctions on Syria. But the UAE initiative with the U.S. has not previously been reported. All of the sources spoke on condition of anonymity to discuss the back-room diplomacy.

Syria's government and the White House did not respond to questions from Reuters. The UAE referred Reuters to its statement on bin Zayed's call with Assad.

The UAE has taken a leading role in rehabilitating Assad among the mainly Sunni Muslim Arab states that shunned him after he accepted help from Shi'ite, non-Arab Iran to put down the Sunni-led rebellion against him.

The Emirates hosted Assad in 2022, his first visit to an Arab country since the start of the war, before the Arab League reinstated Syria's membership.

The UAE has long hoped to distance Assad from Iran and wants to build business ties with Syria, but U.S. sanctions have hampered those efforts, the sources said.

A senior regional diplomat briefed by Tehran told Reuters Iran had been informed "about behind-the-scenes efforts by some Arab countries to isolate Iran... by distancing Syria from Tehran".

The diplomat said those efforts were linked to offers of possible sanctions relief by Washington.

'CARROT AND STICK'

Hezbollah and its patron Iran have intervened in Syria since 2012 to protect Assad against Sunni rebels - but their bases and weapons shipments through Syria have been repeatedly hit by Israel, which has sought to weaken Iran across the region.

In recent months, Hezbollah withdrew fighters from Syria, including the north, to focus on battling Israel in southern Lebanon. The rebels who swept this week into Aleppo pointed to the Hezbollah withdrawal as one of the reasons why they faced little resistance from government forces.

A U.S. source familiar with the matter said White House officials discussed an overture with Emirati officials, citing the UAE's interest in financing Syria's reconstruction and Assad's "weakened position" after Israel's offensive against Hezbollah.

The possibility of sanctions relief for Assad, while Israel was hitting Iran's allies, created an "opportunity" to apply a "carrot-and-stick approach" to fracture Syria's alliance with Iran and Hezbollah, the U.S. source said.

SANCTIONS RELIEF

The U.S. placed sanctions on Syria after Assad cracked down against protests against him in 2011, and the sanctions were repeatedly tightened in the years of war that followed. The toughest, known as the Caesar Act, passed Congress in 2019.

The Caesar sanctions apply across Syrian business sectors, to anyone dealing with Syria regardless of nationality and to those dealing with Russian and Iranian entities in Syria.

Assad said they amounted to economic warfare, blaming them for the Syrian currency's collapse and drop in living standards.

The sanctions will "sunset" - or expire - on Dec. 20 unless renewed by U.S. lawmakers.

Part of the recent American-Emirati discussions centered on allowing Caesar sanctions to expire without renewal, said the U.S. source and three of the Syrian interlocutors.

One Syrian interlocutor said the UAE had raised letting them expire with White House officials two months ago, after having unsuccessfully pushed for at least two years of sanctions relief for Assad after a deadly earthquake in Feb. 2023.

Mohammad Alaa Ghanem, a Syrian activist in Washington, D.C. with the Citizens for a Secure and Safe America, told Reuters his group had been working to extend the Caesar sanctions and assessed they had bipartisan support to do so.

"We've been in talks over this for the past couple of months, although of course no political outcome in a town like Washington can be guaranteed 100%," he said.

Arab states have other potential avenues to reward Assad for distancing himself from Iran.

A foreign diplomat based in the Gulf told Reuters both the UAE and Saudi Arabia had in recent months offered "financial incentives" to Assad to split with Iran, saying they could not have been made without coordination with Washington.

A source with knowledge of the matter told Reuters that Syria, among other crises in the region, was a topic of discussion during Saudi Crown Prince Mohammed bin Salman's visit to the UAE on Sunday.

A Lebanese interlocutor said the UAE had also pledged funds to help Syria rebuild war-ravaged infrastructure as a way to "pull Assad further away from Iran".

Iran has warned Assad not to stray far.

The senior regional diplomat briefed by Tehran said Iran's Supreme Leader Ali Khamenei conveyed a message via his senior adviser Ali Larijani, who told Assad: "do not forget the past."

"The message served as a reminder to Assad of who his true allies are," the diplomat said.

'PLAYING WITH FIRE'

Since Hamas militants attacked Israel on Oct. 7 last year precipitating war in Gaza, Iran has mobilised its network of allies to hit Israel.

But Assad has largely avoided joining in, even as Israel struck Hezbollah targets in his country and bombed an Iranian diplomatic compound in Damascus.

A U.S. official said Assad had "sat out" the war to avoid further Israeli strikes on Syria, and remained under "tremendous pressure" not to allow Hezbollah to re-arm through his country.

Israel has signalled that it still has eyes on Syria. When announcing the truce with Lebanon last week, Prime Minister Benjamin Netanyahu said Israel had been thwarting attempts by Iran, Hezbollah and Syria's army to bring weapons into Lebanon.

"Assad must understand – he is playing with fire," Netanyahu said.