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Overnight Defense: Pentagon waiting for Saudi assessment on attack | Defense bill talks begin | Border fight takes centerstage | Pentagon finalizes $2.5B in wall contracts | US withholds Afghan aid citing corruption
Happy Thursday and welcome to Overnight Defense. I'm Ellen Mitchell, and here's your nightly guide to the latest developments at the Pentagon, on Capitol Hill and beyond. CLICK HERE to subscribe to the newsletter.
THE TOPLINE: Pentagon officials on Thursday said they would defer to Saudi Arabia's assessment before explicitly blaming Iran for a weekend attack on Saudi oil facilities, a slight departure in messaging after the State Department laid blame for the attack squarely on Iran.
"We're not going to get ahead of the Saudi investigation in their assessment of this," top Defense Department spokesman Jonathan Hoffman told reporters at the Pentagon.
"We're supporting their investigation, we have teams on the ground working with them, but we're not going to get ahead of their conclusions."
Hoffman did acknowledge that "as of this time, all indications are ... that Iran is in some way responsible for the attack on the Saudi refineries," but declined to say whether the U.S. military believes the drone and missile attack was launched from Iranian territory.
An escalation: He added that regardless of whether it was a proxy or direct attack, "this has been a dramatic escalation" of past incidents involving Iran.
"This was a number of airborne projectiles, it was very sophisticated, coordinated, and it had a dramatic impact on the global market. We need to get the parties back on the diplomatic paths to avoid this type of action," he said.
Veering from Pompeo: Hoffman's comments come as Secretary of State Mike Pompeo earlier Thursday said it was "abundantly clear" that Iran had conducted the attacks on two Saudi oil refineries, which were hit by drones and cruise missiles on Saturday, affecting roughly 5 percent of the global crude output.
"I didn't hear anybody in the region who doubted that for a single moment," he told reporters while visiting Abu Dhabi in the United Arab Emirates.
Pompeo a day prior had also declared the attacks an "act of war" by Iran.
Tehran has denied the allegations, while Iranian-backed Houthi rebels in Yemen have claimed they are responsible.
President Trump, meanwhile, said Wednesday that his administration is considering "many options" to respond to Iran.
No change of plans: Asked whether there was any plan or requirement to supplement U.S. forces in the region for protection purposes, Joint Staff Spokesperson Air Force Col. Patrick Ryder, who spoke alongside Hoffman, said the Pentagon was "assessing the region and the environment" but did not have any news "in terms of any type of force adjustment or posturing."
The U.S. military earlier this year sent an additional 1,000 troops to the Middle East in response to growing tensions with Iran.
"We certainly believe that we have the forces in the region that we need to protect our forces and to deter potential future threats from Iran," Ryder said.
Diplomatic efforts: Hoffman added that since the attack, Defense Secretary Mark Esper has spoken with top defense officials in the Middle East and that Under Secretary of Defense for Policy John Rood "has been on the phone near constantly since Monday having conversations with our counterparts in the region."
The Pentagon is also "working through with the State Department. They have the lead on the diplomatic negotiations on this."
"As we've always said with our regard to Iran, our goal is to deter conflict and to put this back on the diplomatic path," Hoffman said.
Iran threatens 'all-out war' if attacked: Iran on Thursday threatened an "all-out war" if the U.S. or Saudi Arabia launches military strikes against it.
Iranian Foreign Minister Mohammad Javad Zarif told CNN that Tehran does not want war, stressing that Iran was not responsible for the attacks on Saudi oil refineries.
"I make a very serious statement about defending our country. I am making a very serious statement that we don't want to engage in a military confrontation," said Zarif.
"But we won't blink to defend our territory," he added.
NEGOTIATORS KICK OFF DEFNESE BILL TALKS: House and Senate negotiators officially kicked off talks Thursday to reconcile their versions of the annual defense policy bill with several thorny debates looming over them.
Chief among them is how to deal with Pentagon funding that has been tapped for President Trump's border wall.
Negotiators will also wrangle with an amendment meant to block Trump from taking military action against Iran, a provision that has received renewed attention as Trump debates how to respond to attacks on Saudi oil facilities.
No indication: Ahead of the first official meeting -- dubbed the "pass the gavel" meeting -- the leaders of the Armed Services committees would not indicate where they will land on those and other issues.
"I appreciate the questions, but we're not going to tell you how we're going to have an outcome here at this press conference, in part because we don't know what that outcome is yet," House Armed Services Committee Chairman Adam Smith (D-Wash.) told reporters. "That's the nature of a conference committee."
The background: Though Thursday marked the first formal meeting of the conference committee, staffers and key lawmakers have been talking behind the scenes for months.
Earlier this month, the Pentagon announced it was taking $3.6 billion from 127 military construction projects to build 175 miles of wall on the U.S.-Mexico border, in line with Trump's emergency declaration at the beginning of the year.
The Senate's version of the National Defense Authorization Act (NDAA) would replace that $3.6 billion, while the House's would not.
A school of thought has emerged ahead of the NDAA negotiations that the issue is an appropriations issue not an authorization one since the projects losing money to the wall are authorized for five years regardless.
As such, questions have emerged over whether negotiators will decide to be silent on the issue altogether, kicking the fight exclusively to the government funding bill.
No decisions: Smith said Thursday no decision has been made on how to handle backfilling the military construction funds.
Despite the controversial issues facing negotiators, the committee leaders expressed hope they could continue the 58-year streak of getting the NDAA signed into law.
"All four of us are determined to do everything we possibly can to make it 59," Thornberry said. "This is not just policy differences and so forth. There are flesh and blood men and women serving our country right now all over the world who are affected by the decisions we make, as well as adversaries and allies that are watching what we do."
Other issues: In addition to the border wall and Iran, lawmakers will need to find compromises on issues ranging from U.S. military support to the Saudi Arabia-led coalition in Yemen to Trump's transgender military ban to Pentagon funds being used at Trump-owned properties.
Meanwhile, at the Pentagon: The Department of Defense (DOD) has finalized nearly $2.5 billion in contracts to build a portion of President Trump's wall along the U.S.-Mexico border, the Pentagon's top spokesman said Thursday.
The amount means that, as of this week, 129 miles worth of projects in New Mexico, Arizona, and California "has been obligated and is on contract," Jonathan Hoffman told reporters at the Pentagon.
All but $3 million of that money remains unobligated but will be used before the end of the month, Hoffman said.
The U.S. Army Corps of Engineers in April and May had awarded the funding for border wall projects after the Trump administration declared a national emergency and sought to reallocate the money from a DOD fund meant to combat drug trafficking.
US WITHHOLDS $160M IN AFGHAN AID CITING CORRUPTION: The State Department is withholding $160 million from Afghanistan, citing corruption and lack of transparency in Kabul over how the funds are used.
Citing "Afghan Government corruption and financial mismanagement," the State Department said in a statement on Wednesday that it would return $100 million to the Treasury that was slated for a "large energy infrastructure project."
It will also withhold $60 million in planned assistance over Kabul's "failure to meet benchmarks for transparency and accountability" and cease funding the Afghan government's Monitoring and Evaluation Committee, which develops and oversees anti-corruption efforts.
"Afghan government institutions and leaders must be transparent and accountable to the Afghan people. We stand against those who exploit their positions of power and influence to deprive the Afghan people of the benefits of foreign assistance and a more prosperous future," the State Department said. "American taxpayers and the Afghan people can count on the United States to act when we see assistance funds misused."
Timing: The news comes a day after John Bass, the U.S. ambassador to Afghanistan, panned the country's National Procurement Authority (NPA) for not approving fuel purchases for thermal electricity.
"Hearing reports the National Procurement Authority won't authorize fuel purchases for the power plant providing the only electricity in Kabul -- even while the U.S. & @ResoluteSupport help #Afghan security forces enable repairs to power transmission lines. Could this be true?" he tweeted.
Kabul residents have accused the NPA of ignoring their needs for energy amid widespread power outages in some parts of the city, according to Reuters.
The move also comes at a critical time in Afghanistan. The country is slated to hold a presidential election in just over a week, with Secretary of State Mike Pompeo saying the U.S. will still do everything it can to support the process.
"We want free and fair elections. We're going to do everything we can to support them, and we need every actor in the region -- every leader, every citizen in Afghanistan -- to work towards that end. ... That's been our mission there for quite some time," he told reporters Thursday.
There has also been a rise in violence in recent weeks after peace talks between the Taliban and U.S. collapsed.
And dozens of civilians killed in US-linked strike: Dozens of civilians were killed in a drone strike in eastern Afghanistan linked to U.S. forces Thursday, according to multiple reports.
Afghanistan's Defense Ministry confirmed the drone strike to Reuters without details of civilian casualties.
U.S. forces in Afghanistan said they carried out a strike in Nangarhar in an attempt to hit Islamic State positions.
"U.S. forces conducted a drone strike against Daesh [ISIS] terrorists in Nangarhar," Col. Sonny Leggett, a spokesman for U.S. forces in Afghanistan, said in a statement to both outlets.
"We are aware of allegations of the death of non-combatants and are working with local officials to determine the facts."
Islamic State insurgents first entered Afghanistan in 2014 and have since made inroads in the east and north of the country.
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