Gulf nations condemned Saddam Hussein for threatening Kuwait and said Sunday that Mideast peace is possible only if Israel withdraws from Palestinian territories. The six-state Gulf Cooperation Council, a loose political and economic alliance, convened its annual two-day summit Saturday in Doha, Qatar with four heads of state missing and the threat of war looming over the region.

In its final statement Sunday, the Gulf council lashed out at Saddam for his purported Dec. 7 apology to Kuwaitis, saying the message was an "incitement for the Kuwaiti people against their leadership and government and a support for the terror acts that occurred in Kuwait."

The mention of terrorism was an apparent reference to attacks on U.S. military personnel in Kuwait, including the Oct. 8 killing of a Marine by two alleged Islamic activists and al-Qaida sympathizers, who also were killed.

Sunday's communique also urged U.N. weapons inspectors in Iraq to work in "an objective and unbiased manner," while calling on the international community to ensure the quick completion of the inspections.

The statement also condemned terrorism "in all its forms" and criticized Israel for continued aggression against the Palestinians. The statement also called for terrorism to be distinguished from "the people's right to resist occupation," an apparent reference to Israel's occupation of Palestinian territories.

While most Gulf Arabs have no love for Saddam, whose forces occupied Kuwait for seven months from August 1990 and fired missiles into Saudi Arabia and Bahrain, many oppose U.S. foreign policy in the Middle East, seen as favoring Israel and bent on strengthening America's role in the region.

The meeting also approved a customs union agreement, which has been on the negotiating table for more than 15 years. It will enforce a five percent customs tariff across the six states and exempt duties on products from any GCC. The union should come into effect Jan. 1.

A agreement gives the group more negotiating power with the European Union, which has pushed for such a step as a basis for pursuing imports of petrochemicals and aluminum into the EU.

The final statement also called for completing procedures to launch a unified Gulf economic market by 2007.

PHOTO CAPTION

Qatari Emir Sheik Hamad Bin Khalifa Al Thani, right, host of the 23rd session of the Gulf Cooperation Council Summit walks with Sultan Qaboos of Oman, second left, as Saudi Foreign Minister Saud al-Faisal, left, follows them to the closing session of the summit in Doha Sunday, Dec. 22, 2002. The summit ended with a long-awaited customs union agreement. (AP Photo/Kevork Djansezian)