Debate over U.S. policy toward Sudan is expected to heat up in Washington in the coming weeks, as the Bush administration and Congress try to reach a compromise on a new law that would tighten sanctions against the Khartoum government. Any decision on the controversial issue is bound to affect U.S. Sudan relations.

The U.S. House of Representatives and the Senate will soon meet to thrash out a common version of the Sudan Peace Act.

In June, the House overwhelmingly passed a stringent version of the act, that would prevent companies that do business in Sudan from trading on U.S. capital markets, like the New York Stock Exchange.

The State Department opposes the sanctions and the version of the bill passed by the Senate does not contain such a provision.

Supporters of capital market sanctions, like Eric Reeves of Smith College, who has spearheaded the move, argue that such action is necessary to stop foreign oil companies from providing Khartoum with revenue to continue 19 years of civil war.

Mr. Reeves says that President Bush cannot afford to veto the proposed law because he will risk offending African-American voters, who generally support sanctions. "Vetoing the Sudan Peace Act is going to be politically disastrous I predict and I think he knows it," Mr. Reeves said. "I think the administration is trying to stop the bill in the Senate or in conference, but if it passes out of conference with capital market sanctions, I don't believe he would sustain the political damage in vetoing the bill."

Mr. Reeves argues that capital market sanctions, unlike economic sanctions, are extremely focused. They would target companies like Canada's Talisman Energy or China's National Petroleum Company. Those companies are accused of helping Khartoum exploit south Sudan's vast oil riches. Critics say the profits from the oil are fueling the Islamist government's war against mainly Christian and animist rebels seeking self-determination.

Sudan's information minister, Mahdi Ibrahim, denounced the proposed U.S. sanctions as a remnant of past hostilities with the United States. "This is not an act for Sudan peace, it is an act of war, unfortunately," Mr. Ibrahim said. "And it takes sides with one party which is the rebels. At the same time it will perpetuate the war and increase the suffering of the people of the south."

Mr. Ibrahim said Khartoum hopes the State Department will continue the dialogue that has begun between the two countries on ways to end the war. He says peace can only be achieved with an unbiased approach.

The State Department has also criticized the capital markets sanctions envisioned in the Sudan Peace Act saying they are contrary to U.S. free market principles. Spokesman Richard Boucher explained, "We believe that prohibiting access to capital markets in the United States would run counter to global United States support for open markets, would undermine our financial market competitiveness and could end up impeding the free flow of capital worldwide. However," Mr. Boucher said, "...what's happening in the Sudan, the bombings of innocent civilians, the tolerance for slave-raiding, the denial of religious freedom...we share the outrage that's expressed in the act."

Washington's last accredited ambassador to Sudan, Timothy Carney, says the Bush administration's policy towards Khartoum needs sharpening, but the Sudan Peace Act is not the way forward. "The U.S. by common agreement is the only nation that can catalyse that missing will to peace," Mr. Carney says. "The administration needs a strong wake-up call to move more vigorously to name a special envoy with political weight."

Mr. Carney argues that Sudan's strategic position in Africa requires a more vigorous U.S. policy to deal with the issues that have blocked a settlement of Sudan's on-going war, namely, the recognition by Khartoum's Islamist rulers of the country's ethnic and religious diversity and allowing for a real sharing of power between all of Sudan's citizens.