One of the most revealing examples of how U.S.-Saudi business interests seep into foreign diplomacy is a major pipeline deal in the 1990s that almost resulted in the U.S. recognizing the Taliban regime as the legitimate government in Afghanistan.

In 1995, U.S. oil giant Unocal formed a partnership with the Saudi-owned Delta Oil and mounted a high-stakes international lobbying campaign to build oil and natural gas pipelines from oil fields in Turkmenistan, through Afghanistan and Pakistan, and out to the Arabian Sea.

The Unocal-Delta consortium, which included firms from Indonesia, Japan, Korea and Pakistan, reportedly reached a tentative agreement in January 1998 with the Taliban government under which the oil companies would pay the radical Islamic regime for the right to run oil and gas through their country.

The consortium, called CentGas, was prepared to pay the Taliban more than $100 million a year.

Unocal spokesman Barry Lane downplayed the company's dealings with the Taliban, insisting that the oil firm also discussed the pipeline deal with opposition factions in Afghanistan.

``No agreements were reached with anybody, outside of Turkmenistan and Pakistan,'' Lane said. ``This was not an Afghanistan project. Afghanistan was not the focus.''

In 1996, the Islamic extremist Taliban faction effectively gained control of Afghanistan. From 1996 to 1998, as Unocal and Delta executives were talking to the Taliban, the fundamentalist regime was allowing bin Laden and his al-Qaeda organizations set down roots in their country.

But before the pipeline deal could go through, Unocal needed the U.S. to recognize the Taliban as the legitimate government in Afghanistan. To that end, company representatives arranged high-level meetings between the Taliban and State Department officials in Washington, D.C.

On at least one occasion, in December 1997, Unocal officials played host to high-ranking Taliban leaders in Texas. The American oil executives reportedly wined and dined them and took them on a shopping spree.

One of the Unocal representatives dining with the Taliban was Zalmay M. Khalilzad. Khalilzad, a former assistant undersecretary of defense in the first Bush administration, was working for Cambridge Energy Research Associates on Unocal's behalf and advocating that the Clinton administration ``engage'' with the Taliban.

Now Khalilzad is on President Bush's National Security Council and is a key adviser in the administration's quest to destroy the Taliban.

Despite the four-year effort by the Unocal-Delta consortium, which cost the U.S. firm $15 million, the pipeline project collapsed in late 1998 after terrorists allegedly under the direction of bin Laden bombed two U.S. embassies in Africa. Then-president Clinton responded by firing cruise missiles at a suspected bin Laden bunker in Afghanistan.

``There was this idea that as bad as (the Taliban) were on human rights, they were going to create a level of stability that would allow things to take place, such as this pipeline deal,'' said Hartung.

The financial bond welding the U.S. and Saudi governments begins with oil but it doesn't end there.

Between 1990 and 1999, the Saudi government paid U.S. arms makers $30 billion for a wide array of weaponry - including F-15 fighter aircraft, M-1A2 Abrams tanks, and Apache attack helicopters - as well as for the training necessary to operate and maintain the U.S.-made arsenal, according to Department of Defense statistics. Those arms and technology deals are, by law, publicly disclosed.

What is less known, however, is that for the last 25 years Saudi Arabia's rulers have also employed a handful of politically connected American companies to buttress the monarchy's military and internal security forces.

These secretive U.S. firms, sometimes referred to as ``spook outfits,'' earned billions of dollars over the last decade alone, equipping, training and managing virtually all branches of the Saudi Arabian armed forces.

As a result of these contracts, tens of thousands of American workers and their families have lived and still live on Saudi soil. This year, private American military companies placed an estimated 35,000 to 40,000 workers inside the kingdom, according to the Congressional Research Service, a non-partisan adjunct to the Library of Congress.

For many Saudi Islamic fundamentalists who oppose the royal family's longstanding alliance with the west, that heavy U.S. presence is deeply offensive.

Because of this, U.S. officials are reluctant to talk about private American military companies operating inside Saudi Arabia.

David DesRoches, a spokesman for the Defense Department, said access to information about U.S. activities inside Saudi Arabia is limited because public disclosures could compromise Saudi security. He also said Saudi officials raise objections when the U.S. releases this sort of data. ``The Saudis are touchy,'' DesRoches said.

The work being done by private U.S. military contractors inside Saudi Arabia is sanctioned by the Pentagon and much of it is carried out by retired U.S. military personnel.

Those companies are working or have recently worked with the Saudi Arabian air force, marines, navy, and national guard. One U.S. firm, O'Gara Protective Services, has been hired directly to guard members of the royal family.

The following U.S. firms are among those bolstering Saudi Arabia's armed services:

Vinnell has a long history of working side-by-side with U.S. intelligence agents and armed forces personnel. In the 1960s and 1970s, Vinnell earned hundreds of millions of dollars in Vietnam, first building U.S. bases and later blowing them up following the U.S. withdrawal.

The firm also engaged in some secret programs in Vietnam. In a March 1975 Village Voice interview, a Pentagon official called Vinnell ``our own little mercenary army.''

In 1996 and 2000, BDM Federal won two contracts: $44.4 million deal to build housing at the Khamis Mushayt military base in Saudi Arabia and a $65 million contract to provide 845 personnel for maintenance of Saudi Arabia's fleet of U.S.-made F-15 fighter jets.

Until 1998 when BDM was purchased by defense giant TRW, its largest stockholder was the Carlyle Group, an influential Washington, D.C., investment firm loaded with former high-ranking national security officials.