Republican Duncan Hunter, chairman of the House Armed Services Committee and normally one of the administration's most trusted allies, said: "Dubai cannot be trusted."

He called the United Arab Emirates "a bazaar for terrorist nations" and asserted that the US should not let DP World take over significant operations at six US ports.

"I intend to do everything I can to kill the deal," Hunter said.

Across Capitol Hill, lawmakers criticised the Bush administration anew after disclosures that the US had launched a fresh investigation on Tuesday into a proposed business deal by a second Dubai-owned company.

Also sparking the furore was word of a previously unconfirmed investigation into a separate transaction by a leading Israeli software firm.

The government initially approved DP World's $6.8 billion purchase of London-based Peninsular and Oriental Steam Navigation Co.

Investigation

On Sunday, the administration agreed to a 45-day investigation of potential security risks to quell the political backlash.

"Too little, too late," Hunter said.

Opening a hearing on the matter, Hunter said it was "quite remarkable" that the administration did not initially undertake a full review of security implications, given that the company is owned by the UAE - "a bazaar for terrorist nations to receive prohibited components from sources from the free world and from the non-free world".

A US Congressman called Dubai
'a bazaar for terrorist nations'

Hunter listed instances between 1994 and 2003 in which he said the country helped move materials for weapons of mass destruction, such as heavy water and high-speed electrical switches, to Pakistan, Iran and other countries.

He plans to introduce legislation that would require US companies to be the sole owners of infrastructure critical to national security.

The chairman's sharp remarks underscore the political tempest the White House has run into at a time when events in Iraq and renewed interest in the administration's failures in responding to Hurricane Katrina have pushed George Bush's popularity downward.

Senator John Warner, Republican chairman of the Senate Armed Services Committee, has sided with the administration on the DP World deal.

He and the White House have praised the UAE as a vital ally in the fight against terrorism.

Results awaited

Congressional Republican leaders want to wait for the results of the administration's new DP World investigation before considering legislation to delay or block the deal.

House Democrats tried to force a debate and vote on legislation on Thursday that would require the 45-day security review and congressional approval of the takeover.

"I intend to do everything I can to kill the deal"

Duncan Hunter,
House Armed Services Committee chairman

That effort failed on a procedural, largely party-line vote.

Leading Democrats on the House Homeland Security Committee also asked the administration for details about all pending reviews of foreign business deals and any that have been conducted since the 11 September 2001 terror attacks.

The US has conducted only 25 such investigations among 1600 business transactions reviewed by the Committee on Foreign Investments in the United States since 1988.

The panel, comprising 12 government representatives, judges the security risks of foreign companies buying or investing in American industry.

Scathing assessment

Hunter was scathing in his assessment of Dubai Ports World's plan to buy Britain-based P&O, including its American port assets, saying the UAE had been "instrumental" in the trans-shipment of nuclear materials and weapons of mass destruction components.

Legislation already exists in the House and the Senate to review the Dubai Ports World deal and give Congress the ability to disapprove it.
   
Dubai Ports World officials told Hunter's Armed Services Committee the deal should be completed next Monday or Tuesday, pending the outcome of any court appeals in Britain.

DP World recently purchased
P&O in a $6.8 billion deal

A British judge ruled on Thursday the $6.85 billion takeover could go ahead.

Robert Kimmitt, US deputy treasury secretary, said the Committee on Foreign Investments in the US, or CFIUS, the interagency panel that approved the ports deal, would start its 45-day review when the company filed papers requesting it.
   
Company executives told House lawmakers that DP World would abide by any new CFIUS conditions "that would be reasonable" and also applied to competitors.

Officials confirmed on Thursday that another UAE company, Dubai International Capital, was under CFIUS review for its planned $1.24 billion acquisition of London-based Doncasters Group Ltd.

It operates in nine US locations and makes parts for US defence contractors.