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Karim Kadim, File, Associated Press
In this Friday, June 13, 2014 file photo, Iraqi Shiite tribal fighters deploy with their weapons while chanting slogans against the al-Qaida-inspired Islamic State of Iraq and the Levant, to help the military, which defends the capital in Baghdad's Sadr City, Iraq. Saudi Arabia and other Gulf petro-powerhouses encouraged a flow of cash to Sunni rebels in Syria for years. But now they face a worrying blowback.
Some leaders believed they could use terrorists as hired mercenaries but suddenly found themselves stuck with terrorists who used the opportunity to advance their own interests and agenda. —Ahmad Jarba, Syrian opposition coalition

DUBAI, United Arab Emirates — Saudi Arabia and other petro-powerhouses of the Gulf for years encouraged a flow of private cash to Sunni rebels in Syria. Now an al-Qaida breakaway group that benefited from some of the funding has stormed across a wide swath of Iraq, and Gulf nations fear its extremism could be a threat to them as well.

Those countries are now trying to put the brakes on the network of private fundraisers sending money to the rebel movement, hoping to halt the financing going to the radical Islamic State of Iraq and the Levant. But at the same time, they sharply oppose any U.S. military assistance to Iraq's Shiite-led government aimed at stopping the extremists' rapid advance — and are furious at the possibility Washington could cooperate with their top rival Iran to help Iraq.

Their stance reflects the complex tangle of national rivalries and sectarian enmities in the region. Sunni-ruled Saudi Arabia, along with its Gulf allies, have had the primary goal of stopping the influence of mainly Shiite Iran in the Middle East, and they deeply oppose Iran's ally, Iraq's Shiite Prime Minister Nouri al-Maliki, whom they accuse of discriminating against his country's Sunni minority.

They are torn over the Islamic State's stunning victories. They would be happy if the insurgency forces the removal of al-Maliki and his replacement with a more Sunni-friendly government. But long term, they fear the Islamic State or other radicals inspired by it could eventually turn their weapons against the Gulf's pro-Western monarchies. And they are alarmed that its power could increase Iran's role in Iraq — a scenario already realized with top Iranian military figures in Baghdad helping organize the army.

"They all hate al-Maliki and they all hate Iran, they want to see it play out," one U.S. official said.

In phone calls this week with the leaders or foreign ministers of Saudi Arabia, Kuwait, Qatar and the United Arab Emirates, U.S. Secretary of State John Kerry heard a chorus of disapproval for any kind of U.S. military operation to help al-Maliki, such as airstrike or train-and-equip missions, according to U.S. officials familiar with the conversations. The officials spoke on condition of anonymity because they were not authorized to publicly discuss the private exchanges.

Earlier this week, Saudi Arabia's Cabinet put out a statement blaming the insurgent explosion on al-Maliki's government's marginalization of the Sunni minority — "the sectarian and exclusionary policies practiced in Iraq over the past years."

Iraq's Cabinet replied Tuesday with a furious statement of its own, accusing Saudi Arabia of fueling the Islamic States' rise and of "appeasement to terrorism." It said it holds the kingdom accountable for "the resulting crimes, which are tantamount to genocide."

The Islamic State's surge in Iraq is in part a blowback from the Gulf countries' policies in neighboring Syria, where they have backed the Sunni-led rebellion in hopes of toppling another of Iran's allies, President Bashar Assad.

With government consent, influential and even state-linked Sunni clerics in the Gulf in recent years urged men to join rebels in Syria and drummed up donations for the Syrian cause in campaigns in mosques, online and on TV. The funds went to numerous Syrian rebel factions, but some are believed to have gone to extremist ones like the Islamic State.

David Cohen, of the U.S. Treasury Department, put the amounts raised in the hundreds of millions. Some of that went to legitimate humanitarian purposes, but much went the rebels, including extremist groups, Cohen — who is the under secretary for terrorism and financial intelligence — said in a speech earlier this year. He did not provide more precise figures.

He said Kuwait has become "the epicenter of fundraising for terrorist groups in Syria." He said money is being raised in Kuwait and Qatar for the Islamic State as well al-Qaida's affiliate in Syria, the Nusra Front. The U.S. State Department said Monday there is no evidence of Gulf governments themselves funding Islamic State.

The head of the Western-backed Syrian opposition coalition, Ahmad Jarba, angrily denounced the international community for failing to support more moderate rebels from the Free Syrian Army and implicitly accused Gulf nations of backing the Islamic State in a speech to a gathering of leaders from Islamic countries in the Saudi city of Jiddah on Tuesday.

"Some leaders believed they could use terrorists as hired mercenaries but suddenly found themselves stuck with terrorists who used the opportunity to advance their own interests and agenda," Jarba said. Free Syrian Army fighters have been battling Islamic State forces in eastern Syria, trying to hold back their advances there.

The Islamic State has emerged as one of the most radical factions in Syria's civil war and its priority, more than ousting Assad, has been to achieve its dream of a crossborder "Islamic emirate" in the region, starting with Iraq and Syria. Even before Islamic State swept over Iraq's second largest city, Mosul, a week ago, Gulf nations began to worry the group is too uncontrollable, too ambitious and a potential threat to their rulers, who al-Qaida and other radicals have long said should be toppled.

The Islamic State "not only targets Kuwait, but the entire region," Kuwait Deputy Foreign Minister Khaled Al-Jarallah said, adding that Gulf nations must "protect our internal front."

Governments began reining in their support for rebels earlier this year. Saudi Arabia has warned its citizens they will be prosecuted if they fight abroad and labeled the Islamic State a terrorist organization.

In Qatar, one of the most prominent clerics supporting Syrian fighters, Sheik Yusuf al-Qaradawi, has not been on the pulpit for months. In Kuwait, Nayef al-Ajmi, who held the posts of justice minister and Islamic endowments minister, resigned in May after the U.S. Treasury accused him of having a history of promoting jihad in Syria, though the government insisted his activities were "charitable, religious and humanitarian."

Fund-raising clerics complain that they are now being told not to raise money for any Syrian rebels.

"Right now there is a siege. All the Gulf countries that were supportive have barred that support," Kuwaiti cleric Nabil al-Awadi angrily said on his TV program. Al-Awadi, who is part of a collective fundraising campaign for Syria by Kuwaiti charities, has been accused by other prominent clerics in the United Arab Emirates and Saudi Arabia of using donations to fund the Islamic State.

"Pressure has been put on me to stop collecting aid to Syria," he said, adding that directives from the Kuwaiti government "were clear: Syria is over." But he said money is still finding its way through back channels.

Toby Matthiesen, author of "Sectarian Gulf" and a research fellow at Cambridge University, said that for now Saudi Arabia and other Gulf countries are focused on "regime survival" and countering Iran — and "playing all the cards they can in this regional sectarian war trumps everything else."

But the repercussions are unpredictable. The Islamic State blitz could exacerbate sectarian tensions between Sunnis and Shiites in flashpoints like Bahrain and eastern Saudi Arabia, the heartland of the kingdom's Shiite minority. It could also embolden al-Qaida-inspired fighters against the Gulf countries.

The Gulf's polices supporting rebels in Iraq and Syria have been a "double-edged sword," said Matthiesen. "My prediction is that in the mid to long term this will turn out to have been a bad policy."

Lee reported from Washington. Associated Press writers Hussain al-Qatari in Kuwait City and Abdulla al-Rebhy in Doha, Qatar contributed to this report.