ONCE THE PENTAGON'S FAVORITE TO RUN IRAQ, AHMED CHALABI NO LONGER FEELS BEHOLDEN TO THE U.S. AFTER THE WHITE HOUSE-SANCTIONED RAID ON HIS HOUSE -- "60 MINUTES"

He Also Says He Supports Diplomatic Relations Between Iraq and Israel

Iraqi Deputy Prime Minister Ahmed Chalabi has emerged as an important power broker in Iraq, despite past attempts by the Bush White House to undermine him. "They thought they could write my obituary, but they are wrong," Chalabi says in a 60 MINUTES interview to be broadcast Sunday Oct. 2 (7:00-8:00 PM, ET/PT) on the CBS Television Network.

In a wide-ranging conversation with Lesley Stahl, Chalabi insists Iraq will not become a theocracy like Iran, denies that his ongoing pursuit of de-Baathification is fueling the insurgency and also predicts Iraq will engage Israel in diplomatic relations.

Stahl traveled with Chalabi across Iraq, where the former Pentagon favorite who fell out of favor with the White House a year ago has taken charge of key committees. As head of the Energy Committee, Chalabi is working to get the northern oil pipelines back online. "You see, the protection of the infrastructure sadly was not a military priority," Chalabi told Stahl.

As head of the de-Baathification process, Chalabi has purged thousands of Baath party members, many of them Sunnis, from government jobs. Critics say this is fueling the insurgency, and U.S. officials want Chalabi to reinstate some of them. "We're not going to do that because of somebody asking us," says Chalabi. "We know that their premise is false."

A year ago, the White House authorized a raid on Chalabi's home and office amidst accusations he was spying for Iran. But while the raid may have been an attempt by the White House to discredit him, Chalabi says it had the opposite effect.

"This liberated me in front of the Iraqi people. It clarified my relationship with the United States. I am not beholden to the United States after what they did�to me," Chalabi said.

Before the U.S. invasion of Iraq, Chalabi promised that a post-Saddam Iraq would establish diplomatic relations with Israel. When asked if he still stood by those pronouncements, Chalabi said, "I'm not denying that there should be relations, but to say that this is a priority for Iraq now�."

"I didn't ask priority. I asked if you stand by what you said," Stahl pressed. "The answer is yes," Chalabi said, "I see no reason why Iraq would not have relations with Israel."