Saudi says Israel attacks threaten wider war

RIYADH, July 25 (Reuters) Egypt and Saudi Arabia, facing popular anger over Israel's offensive in Lebanon, toughened their stance today, warning the United States that Israeli militarism could lead to a wider conflict in the region.

''Saudi Arabia warns everybody that if the peace option fails because of Israeli arrogance, there will be no other option but war,'' state-owned media quoted Saudi's King Abdullah as saying before a meeting with Egyptian President Hosni Mubarak.

His remarks were unusually forthright for the world's top oil exporter, which has called for ceasefire but blamed Lebanon's Hizbollah guerrilla group for the crisis that has so far killed at least 413 people in Lebanon and 42 Israelis.

The comments also appeared to be aimed at the United States, Israel's ally which has resisted calls for an immediate ceasefire.

Analysts say Washington's Arab allies, including Saudi Arabia, Egypt and Jordan, fear popular anger against Israel could escalate and force them to take a tougher stance.

Mubarak took a swipe at U.S. policy telling reporters in Cairo: ''What is happening in the region is destructive chaos, not creative chaos.'' Washington has rebuffed calls for an immediate ceasefire, arguing that would allow Hizbollah to re-arm and attack Israel again in future.

Mubarak left Saudi Arabia after meeting King Abdullah without speaking to the media. Officials said the talks were to prepare for a meeting in Rome tomorrow to try and end the fighting.

''The Arabs have declared peace as a strategic choice ... and put forward a clear and fair proposal of land for peace and have ignored (Arab) extremist calls opposing the peace proposal,'' the king's statement said. ''But patience cannot last forever.'' He was referring to an initiative, proposed by Saudi Arabia and adopted in a 2002 Arab summit, offering Israel comprehensive peace in return for land it seized in a 1967 war.

Arab governments have said that since the 1973 Arab-Israeli war they have decided to pursue peace as a means to end disputes over occupied land and the status of Palestinians, who are state-less.

King Abdullah's comments suggested that Arab governments could rethink that approach, although analysts say there is no likelihood that Arab states would go to war with Israel.

CONCERN OVER IRAN The government of Sunni Muslim Saudi Arabia sees Hizbollah, which is backed by many ordinary Arabs, as a tool for Shi'ite powerhouse Iran to expand its influence.

But most Arabs see Israel, which does not want to return all of the Arab territories it seized in 1967, as more of a threat than Iran, whose help is welcomed.

''I think they (Arab governments) are scared of being against public opinion which could turn against them,'' said a Western diplomat in Riyadh.

Israel launched its offensive after Hizbollah killed eight soldiers and abducted two others in a July 12 border raid.

Saudi Arabia pledged 0 million to rebuild Lebanon and 250 million dollars for the Palestinians. The kingdom will also transfer 1 billion dollars to Lebanon's central bank to help its economy.

The diplomat said the financial support was a sign of a tussle for influence once the fighting stops in Lebanon between Iran, backing Hizbollah, and Arab states, behind the government.

REUTERS MQA ND2350