W By Douglas Farah

ASHINGTON – A National Security Council task force is recommending an action plan to President Bush that is designed to force Saudi Arabia to crack down on terrorist financiers within 90 days or face unilateral U.S. action to bring the suspects to justice, senior U.S. officials said Monday.

The interagency plan, devised before the recent furor over allegations of Saudi involvement in terror financing, comes amid growing concern among some congressional leaders and U.S. allies that the administration has been unwilling to press Saudi Arabia for action for fear of alienating a key Arab ally as possible war with Iraq looms.

The officials would not say what unilateral U.S. action might entail. But they said the United States would first present the Saudis with intelligence and evidence against individuals and businesses suspected of financing al-Qaida and other terrorist groups, coupled with a demand that they be put out of business. In return, one senior official said, the administration will say, “We don’t care how you deal with the problem; just do it or we will” after 90 days.

How demands would be presented to the Saudis is still under debate. They range from sending a high-profile Cabinet official to Riyadh to issuing a formal dimarche to the Saudi government through the ambassador, the officials said. The officials stressed that the goal was to cut off funds before another terror attack can occur, and said they would press the Saudis to act even if there was not enough information to convict someone in a court of law.

U.S. intelligence agencies and financial investigators have put together a classified, working list of nine wealthy individuals believed to be the core group of financiers for al- Qaida and other radical Islamic terror groups, U.S. officials said. Of those, seven are Saudis, one is a Pakistani merchant and one is an Egyptian businessman. The officials would not identify the individuals.

“There are some who argue that sharing intelligence with the Saudis is just plain stupid,” one official said. “But in so doing we put down a marker. We are saying we are not acting unilaterally, we are not moving precipitously, we are not acting as a hostile force.

“We tell them the problem and leave it to them to solve, presuming they will act in good faith. But if they do not act in 90 days, we assume solving the problem is beyond their ken and the United States will solve it.”

News of the decision to confront the Saudis follows a weekend of news reports that a charitable contribution by Princess Haifa al-Faisal, the wife of the Saudi ambassador to the United States, may have indirectly benefited two of the men who participated in the Sept. 11, 2001 terror attacks.

The reports prompted criticism of Saudi Arabia among lawmakers, including Sen. Richard C. Shelby, R-Ala, who said the Saudis had “a lot of answering to do” in their efforts to cut off terrorist financing.

Russian President Vladimir Putin, in an appearance Friday with Bush in St. Petersburg, Russia, pointedly mentioned that 15 of the 19 hijackers were Saudis. Recent studies of terrorist financing have concluded that most of the terrorists’ money is raised in Saudi Arabia.

The Saudis say, however, that they have been cooperating in the war on terror financing and have not been presented with solid evidence on some targets of the proposed U.S. crackdown.

Saudi Interior Minister Prince Nayef Monday called the allegations of Saudi officials’ funding terrorism “baseless fabrications.” An editorial in the state-controlled newspaper Al-Watan said such claims were part of a politically motivated campaign in some U.S. circles aimed at “distorting the kingdom’s reputation.”

A senior Saudi official said his government had received no indication that a high-level envoy was set to deliver evidence and demand action. He said he did not understand why U.S. officials were “spewing these outrageous comments to the press” when the two nations were working closely together, hampered mostly by an unwieldy U.S. bureaucracy in which one counterterrorism office often seems not to know what the other offices do.

“We received four identical requests for information over a three-month period from different U.S. government agencies,” the official said. “How the hell do you know who to talk to in this government? But the truth is, we are both primary targets of terrorists. Where is the logic in our stifling or shutting down investigations?”

White House spokesman Ari Fleischer Monday called Saudi Arabia a “good partner in the war on terrorism.” But he said the United States would continue to press Saudi Arabia and other countries to “do more in the fight against terrorism” on the financial, diplomatic and political fronts.

Secretary of State Colin L. Powell, speaking to reporters on his plane as he headed to a conference in Mexico City, said, “I think it unlikely that Princess Haifa and (Saudi Ambassador) Prince Bandar (bin Sultan) would do anything knowingly to support anybody connected to terrorist activity.”

U.S. officials Monday played down the reports of money from Princess Haifa aiding terrorists, but the case nevertheless exemplified what they described as a major problem in U.S.-Saudi relations: the lack of accountability in tracing where charitable contributions end up. Several prominent Muslim charities based in Saudi Arabia have been found to provide money and logistical support to al-Qaida and other terrorist organizations.

“You have rivers of cash flowing out of Saudi Arabia all around the world with no real controls whatsoever,” one senior official said. “It is very, very easy to apply that money to a host of criminal and terrorist acts because no one pays attention or seems to care.”

Another senior official said the administration was trying to walk a fine line between cutting off terrorist financing and trying to control religious views, including fundamentalist, anti-American Islamic teaching paid for by the Saudi government.

“There may be tens of millions of dollars spent to fund terrorism, but there are hundreds of millions of dollars spent to propagate extreme, intolerant religious views that are highly critical of Western values, and that is our most bedeviling problem,” a senior U.S. official said. “When money goes to the propagation of uncompromising, unforgiving, hostile views of other faiths, and they broadcast that, it is more likely than not the money is going to be used for violence.”

The task force is composed of senior members of U.S. agencies attempting to stanch the flow of money to terrorists, and is convened by the National Security Council. Its action plan has been approved in concept by the Cabinet secretaries and other officials who make up Bush’s team of top national security advisers. That group intends to review the language of the plan before it is presented to Bush.

U.S. officials said planning for a high-level confrontation with the Saudi government began shortly after Sept. 9, when the two governments announced they were jointly designating a Saudi citizen as a terrorist sponsor and freezing his assets, heralding a new era of cooperation.

Less than 48 hours later, two senior Saudi officials publicly disowned the designation of Wa’el Jalaidan, a co-founder of al-Qaida, infuriating U.S. officials. A Saudi official said later the disavowal was the result of a “misunderstanding.”

According to two senior administration officials, while the Saudi government ultimately did designate Jalaidan a terrorist financier, the conflict marked a turning point even for those in the administration who had argued against pressing the Saudis too hard on terrorism.

“We were livid at the disavowal of the Jalaidan designation,” a senior U.S. official said. “The Saudi public statements in that case were nothing short of schizophrenic. Saudi Arabia is one of the epicenters of terrorist financing.”

U.S. intelligence officials believe most terrorist money still originates in Saudi Arabia, and must be cut to prevent more terrorist attacks. While $113 million in terrorist funding worldwide has been frozen since Sept. 11, there have been virtually no significant seizures in recent months. Intelligence sources and several new studies have concluded that al-Qaida’s financial structure remains largely intact and retains access to tens of millions of dollars.

“Money fuels the business of terror,” David Aufhauser, the Treasury Department’s general counsel, told the Senate Judiciary Committee last week. “We can stop the killing if we can stop the flow of money but … the overwhelming bulk of the assets that we seek to freeze, the cash flow that we hope to slow and the records that we hope to audit are beyond the oceans that surround us.”

One sign of the administration’s new, harder line, U.S. officials said, was the unwillingness to discourage, either publicly or privately, the families of Sept. 11 victims who have brought a $1 trillion lawsuit against about 150 defendants they charge willfully aided al-Qaida by providing financial and logistical support to the terrorists.

Saudi officials have repeatedly expressed their concern about the case to U.S. officials, administration sources said. Among the defendants are several of Saudi Arabia’s wealthiest citizens, including some members of the royal family, as well as several of the kingdom’s largest financial institutions.

While the State Department has floated the idea of trying to trying to get the lawsuit, filed in U.S. District Court in Washington, dismissed or delayed out of concern that it will damage U.S.-Saudi relations, senior administration officials said there are no such plans at this time.