Tiny Qatar wielding powerful political punch By Regan Doherty DOHA (Reuters) - From its startling winning bid to host the 2022 soccer World Cup and mediating roles in Middle East and African conflicts to its role leading Arab efforts to isolate Syria, tiny Qatar is aspiring to an ambitious role: global powerbroker. Led by a ruling family that does not shy away from taking controversial positions on world affairs, the Gulf Arab state was a major supporter of Libya's NATO-backed rebels, providing arms and troops and ensuring the lasting gratitude of Libyans. In 2008 Emir Sheikh Hamad bin Khalifa al-Thani helped cajole Lebanese leaders to a political agreement, succeeding where the Arab League, the United Nations, France and others had failed. And in Sudan, Qatar mediated the ceasefire agreement signed in Doha between Khartoum and Darfur rebels in 2010. The impetus behind the country's pursuit of the limelight in the past decade is a wish to differentiate itself from regional neighbors - specifically Saudi Arabia, with whom Qatar has had sporadically acrimonious relations for decades. "One of the key goals of Qatari foreign policy is to insert itself into key conflicts whereby Qatar becomes the crucial interlocutor between Western states and a range of 'problematic' Muslim actors," said David Roberts, deputy director of the Royal United Services Institute (RUSI), based in Doha. A close ally of Washington and home to the largest U.S. air base in the Middle East, Qatar has often launched political initiatives that corresponded with Western interests, and it had formal ties with Israel until the Jewish state's 2009 war with the Palestinian Hamas rulers of the Gaza Strip. But Qatar has not hesitated in recent years to engage America's foes Iran and Hamas in pursuit of political leverage. Just before the Taliban blew up Afghanistan's ancient Buddha statues in Bamiyan in 2001, Qatar sent a delegation urging them to desist. And until recently it maintained good ties with Syrian President Bashar al-Assad, as well as with the current opposition. That boldness and ability to engage almost everyone from the United States to Hezbollah has enabled Qatar, a tiny peninsula slightly smaller than Connecticut, to quietly morph into a surprisingly agile diplomatic power centre. "Qatar has been able to do this because they've always made it a priority to maintain good relations with everybody," said one Doha-based political analyst, declining to be identified. They sustained relations with Iran during the (1980-88) Iran-Iraq war and played a mediating role throughout. During the Gulf war, they maintained contacts with Saddam Hussein until the last minute," he added. With Egypt, the region's traditional mediator, in disarray and others holding back, analysts say the timing is right for Qatar, which gained independence from Britain only in 1971. The United States and Afghanistan are holding talks to seal an agreement for Taliban insurgents to open a political office in Qatar, and negotiating the possible transfer to the Gulf state of five former senior Taliban officials who have been held for years at Guantanamo Bay military prison. Such steps would mark a milestone for the administration of U.S. President Barack Obama, which is working on making Afghanistan secure ahead of its planned extrication from a long and costly war. Analysts say rivalry with Saudi Arabia has been an important element of Qatari foreign policy over the past decade. Open debates on the Doha-based and -financed Al Jazeera satellite channel that included criticism of Riyadh have not helped, though relations have warmed recently. Being the locus of a potential resolution to the Afghan war could immeasurably boost Qatar's status, Roberts said. "Qatar's appearance as a moderate, powerful - but not too powerful - country and a good balancer has likely contributed to the decision to host the Taliban and been encouraged by the United States, of this we are certain," said Michael Stephens, Doha-based researcher at RUSI. He said countries like Saudi Arabia and Turkey, which were put forward by Afghan President Hamid Karzai as options for the Taliban office, were too focused on their own self-interest. Qatar has no such problems. It intervenes where it sees fit without too much regard for upsetting others, because its policy is simply to engage with everyone it can as often as it can. A Qatari role in diplomacy over Afghanistan will mark the third time in less than a year the Saudis have had to take a back seat to major Qatari diplomatic initiatives, after Libya and Syria. Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani has become the dominant figure at Arab League discussions about Syria. Qatar's Emir has suggested sending Arab troops to halt the bloodshed, the first Arab leader to propose such a move. Qatar's amplified diplomatic role in many ways mirrors the country's vast expansion of infrastructure at home, as well as its investment abroad. The government has allocated 40 percent of its budget between now and 2016 to infrastructure projects, including $11 billion on a new international airport, $5.5 billion on a deepwater seaport and $1 billion for a transport corridor in the capital, Doha. It will spend $20 billion on roads. The country's sovereign wealth fund, estimated to have assets worth around $70 billion, has poured more than $20 billion in recent years into stakes in German carmakers Porsche and Volkswagen, Agricultural Bank of China, Santander Brasil, Spain's Iberdrola and German builder Hochtief. It has also snapped up Britain's luxury department store Harrods and two European soccer teams. Its ambitions extend into the realm of sport. In addition to winning the rights to host the 2022 soccer World Cup, Qatar has officially begun a bid to host the 2020 Olympics. It spent $2.8 billion on hosting the 2006 Asian Games. As the country with the world's highest per capita income, estimated at $90,149, Qatar can afford to spend lavishly on diplomatic endeavors. But any notion that a pursuit of profit is behind those efforts is far off the mark, diplomats say. Money is not a driving force behind Qatar's foreign policy. The economic/profit motive doesn't motivate the Emir in the way people think that it might," said a Doha-based diplomatic source, declining to be named. "He approaches it with the idea of achieving stability for and enhancing the security of the Qatari state," the source said, but added: "The Qataris are nothing if not pragmatic. If they don't see the possibility of a real solution, they won't put any money there. Editing by Sami Aboudi and Sonya Hepinstall