By Rania El Gamal
KUWAIT (Reuters) - Saudi Arabia's dream of binding the Gulf Arab states into a union will get a skeptical hearing at a summit this week, with differences over Iran, Egypt and Syria demonstrating that the Gulf's absolute monarchs do not all speak with one voice.
Saudi Arabia's King Abdullah proposed two years ago for a stronger union with Bahrain, Kuwait, Qatar, Oman and the United Arab Emeriates. The plan is expected to be one of the main topics on Tuesday when the leaders of the Gulf Cooperation Council hold their annual meeting in Kuwait.
But just days before the leaders were due to arrive, Oman dismissed the proposal with unusual directness in a region where the royal courts are usually not known for their bluntness.
"We are not for establishing a union at all," Foreign Minister Youssef bin Alawi bin Abdullah said on Saturday at a conference in Bahrain, shortly after a Saudi official had renewed Riyadh's call for closer unity.
Saudis shrugged off the sign of disagreement: "Oman has every right to express that view. I don't think that is going to prevent the union from happening," former Saudi intelligence chief Prince Turki al-Faisal said in Bahrain.
"Having a more closely knit union between the GCC countries in my view is inevitable and whether Oman wants to join now, or later, that's up to them."
Diplomats in the region say the Omanis are not the only skeptics: the UAE and Kuwait also expressed reservations at last year's summit behind closed doors, they say.
Despite the similarities of the six Gulf monarchies, they have diverging regional outlooks, economies and political systems. The others are increasingly gaining the confidence to veer off a script written by Saudi Arabia, which has by far the biggest economy and more citizens than the other five combined.
"A number of Gulf states view Saudi Arabia as the gorilla in the room. Much as they have a lot in common with them, they don't want to be dominated by the Saudis," said Robert Jordan, U.S. ambassador to Riyadh from 2001-03.
"Given the somewhat divergent attitudes on Iran, and to a lesser extent Syria, it may be harder to get common ground in a shared foreign policy."
The GCC was set up in 1981 to counter the rise in the region of non-Arab Shi'ite Iran, which Riyadh views as its principle rival for hegemony in the Gulf and wider Middle East. But though all six members are somewhat suspicious of Iran, Oman and Qatar have made moves to seek better ties with Tehran.
Oman went even further in the past year, hosting secret meetings between Iranian and U.S. officials which helped lead to a nuclear pact last month - a deal that had Saudis fuming.
"I think there is going to be more tension within the GCC because the prospect of Iran's rehabilitation into the region does introduce a new set of tensions because the Gulf countries don't have the same policies towards Iran," said Shadi Hamid of the Brookings Institute in Doha.
Oman has always been an outlier in the group, with a unique Indian Ocean maritime culture. Its predominating Ibadi sect of Islam differs both from the Sunni sect of the other Gulf ruling houses and the Shi'ism of Iran.
But other members have also veered from consensus. Qatar, an increasingly confident upstart which earned energy riches more recently than the others, has irked neighbors with bold foreign policy moves, especially since the 2011 "Arab Spring" revolts when it backed movements linked to the Muslim Brotherhood.
Qatar provided billions of dollars of funding for Egypt when it elected a Brotherhood government last year, even though other Gulf monarchs were alarmed at the movement's rise.
This year, Saudi Arabia, Kuwait and the United Arab Emirates made their opposing views on Egypt plain by pledging $12 billion in aid to Cairo after the military toppled the Brotherhood.
On Syria, Qatar and Saudi Arabia have shared leading roles arming and funding rebels seeking to overthrow President Bashar al-Assad. But although they are on the same side in the war, Western diplomats say they have backed rival rebel groups.
Domestically, there are political differences as well. While all six GCC states are ruled by dynasties that wield ultimate power, Kuwait, Bahrain and Oman have ceded some political influence to elected parliaments, something that seems far off in Saudi Arabia, Qatar or the UAE.
Bahrain, though ruled by a Sunni Muslim family, has a Shi'ite majority, which means it treads a more difficult line. During the Arab Spring it was the only one of the six to see major unrest, which it and its allies blamed on Iran.
The six also differ economically, which complicates efforts to unite them. While all have oil, Qatar, Saudi Arabia, Kuwait and the UAE are rich OPEC members; Oman and Bahrain are poorer.
Qatar and the UAE are high-profile global traders with gleaming skyscrapers at home and airline logos emblazoned on soccer shirts abroad. Saudi Arabia, though the richest of all, needs its wealth at home to support a much larger population.
Oman said as early as 2006 that it would not join an as yet unrealized project to unite the countries under a single currency. The UAE, which sees itself as a main rival to Riyadh for dominance in regional finance, has also rejected the scheme, which would involve a Gulf central bank based in Riyadh.
(Additional reporting by William Maclean in Manama and Angus MaDowall in Riyadh; Writing by Rania El Gamal; Editing by Peter Graff)