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Bush Sees Oil as Key to Restoring Stability in Iraq

THURMONT, Md., June 12 — President Bush proposed today that Iraq create a national fund to use its oil revenues for national projects, as part of a strategy to build loyalty to the new government of Prime Minister Nuri Kamal al-Maliki.

Speaking after six hours of meetings at Camp David with his national security advisers, members of his Cabinet and top American officials in Baghdad, Mr. Bush talked less about strategies to quell the insurgency in Iraq than about promoting economic development.

He made it clear that strategies to increase Iraq's oil production, from revitalizing old oil wells to rebuilding an infrastructure that he said Saddam Hussein let decay, would be at the top of the agenda on Tuesday morning when his Cabinet meets in a video conference with Mr. Maliki's newly appointed ministers.

"The government ought to use the oil as a way to unite the country," Mr. Bush told reporters, flanked by Vice President Dick Cheney, Defense Secretary Donald H. Rumsfeld and Secretary of State Condoleezza Rice. Iraq, he said, "ought to think about having a tangible fund for the people so the people have faith in the central government."

Mr. Bush did not elaborate, and he said nothing about the insurgent attacks on pipelines and pumping plants that have kept production to levels below what Iraq produced under Mr. Hussein's rule, and the rampant corruption that has diverted oil revenues from the Iraqi government.

This is not the first time that Mr. Bush and his aides have suggested that oil could be a solution to many of Iraq's problems: Before the war, Paul D. Wolfowitz, then the deputy secretary of defense, suggested that oil revenues could pay for Iraqi reconstruction. So far, that has not happened.

It was not immediately clear if the idea of setting up an oil fund for Iraq was anything more than a notion. One Bush administration official said he believed the idea was loosely based on the fund set up in Alaska that still delivers oil revenues to Alaska residents. "In this case, it would be an effort to give everyone a stake in keeping the country together and the oil flowing," the aide said, declining to allow his name to be used because he was discussing internal conversations in the administration.

Mr. Bush's meetings here came at what his senior counsel, Dan Bartlett, called a "break point" for the new Iraqi government, and by extension the American effort to help stabilize Iraq.

The White House revealed little of the conversations that took place around a long conference table in "Laurel," one of the larger buildings in the mountaintop retreat of Camp David that Franklin D. Roosevelt first used as a presidential escape. Reporters were ushered into the cabin to hear a brief fragment of the conversation between Mr. Bush and the American ambassador in Baghdad, Zalmay Khalilzad, that appeared carefully staged to underscore a sense of confidence — though no particular optimism — while revealing nothing of the internal deliberations.

"I thought your assessment of the situation in Iraq was very realistic," Mr. Bush said to Mr. Khalilzad, who was one of the architects of Mr. Bush's Iraq strategy and also served as ambassador to Afghanistan after the overthrow of the Taliban. The ambassador sat alongside Generals John Abizaid and George C. Casey, the top American commanders in Iraq.

"I think your recommendations to us on how to win in Iraq, to have an Iraq that can govern itself, sustain itself and defend itself are — your recommendations are valid."

Mr. Bush's aides said the president was trying to capitalize on both the death last week of Abu Musab al-Zarqawi, the leader of Al Qaeda in Iraq, and the formation of a new cabinet that includes ministers responsible for security.

At one point this afternoon, Mr. Bush was asked about Al Qaeda's announcement that Mr. Zarqawi would be succeeded by Abu Hamza al-Muhajir, one of his deputies. "The successor to Zarqawi will be on our list to bring to justice," Mr. Bush said, without using his name. That warning was far more muted than the "dead or alive" statement that the president made about Osama bin Laden in 2001, and that he said recently he regretted.

But Mr. Bush's use of the word "realistic" to describe the advice he was getting may have been a telling phrase: it was stripped of the optimism, and occasional hyperbole, that has often surrounded Mr. Bush's efforts to bolster to previous Iraqi governments. Mr. Bush noted at one point that the killing of Mr. Zarqawi is "not going to end the war," continuing a White House strategy of diminishing expectations.

In fact, Mr. Bush sidestepped questions about troop withdrawals, and Mr. Bartlett told reporters that the meeting here was not intended to consider withdrawal schedules.

"The goal is to accomplish our mission as quickly as possible so our troops can come home," Mr. Bartlett said. "That's a fundamental premise of all of our conversations. That's what the president has pledged to the American people. But I don't think the American people want us to do it in a premature way in which we don't complete the mission."

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