On July 1, Colombia's government will begin formal disarmament and peace negotiations with the country's top 10 paramilitary chieftains, who collectively lead the United Self-Defense Forces of Colombia (AUC) paramilitary umbrella organization. The objective of these talks is to negotiate a binding agreement to disarm between 13,000 and 20,000 paramilitary fighters by Dec. 31, 2005. STRATFOR believes these negotiations will fail, although both sides will make efforts in the coming months to show progress. The negotiations are doomed because the U.S. government, which is not a party to the talks, refuses AUC demands for complete pardons and immunity from arrest and extradition to the United States. AUC leaders have made it clear that, without these two concessions, they will not lay down their weapons. The U.S. Justice Department has drug-related federal indictments and extradition requests pending against nearly all the AUC's top leaders. The best deal these leaders can expect is a plea bargain that would grant them less jail time in exchange for cooperating with U.S. counternarcotics authorities. Uribe knows this. STRATFOR believes at least some of the AUC's chieftains understand they have no chance of escaping the long arm of U.S. federal justice. Why then are the negotiations being held at all? The obvious answer is that both sides see strategic and political advantages in pursuing them for as long as possible. While talks are taking place, Bogota can deploy more military resources against the Revolutionary Armed Forces of Colombia (FARC). If Uribe were also at war with the AUC, military assets now deployed mainly against the FARC in southern Colombia would have to be more balanced against both organizations. Colombia's army has improved significantly since 2000, thanks to about $3 billion in U.S. military aid. A two-front offensive would place severe strain on the army's capabilities and the government's budget. By negotiating with AUC leaders instead of hunting them down, Uribe also could be reducing the chance that some paramilitary leaders will form strategic alliances with local FARC leaders to defend mutual drug-related interests. It also makes political sense for Uribe to negotiate with the AUC; despite their extensive involvement in drug trafficking, the paramilitaries have long been perceived as the only line of defense against rebel attacks in many parts of the country. If Uribe were to order an army offensive against the AUC before exhausting every possibility of a negotiated disarmament, it could hurt Uribe politically in Congress and among rural constituencies. The U.S. government is not strongly opposing the talks because Uribe has succeeded in substantially reducing coca acreage in southern Colombia since taking power in mid-2002. Eradicating the Colombian drug trade, which accounts for more than 80 percent of the world's cocaine supply, is the Bush administration's top priority in that country. As long as Uribe continues to destroy coca cultivations and processing laboratories in his offensive against the FARC, Washington will not actively seek to terminate his efforts with the AUC. U.S. officials directly engaged in building up the Colombian army's offensive capabilities also might feel that it is tactically and strategically sensible to continue focusing mainly on the FARC until the Colombian army is sufficiently large and well-equipped to also take on the AUC. That could take another two or three years. Eventually, Washington will ratchet up the pressure on Bogota to attack the AUC. That was made clear by U.S. Ambassador to Colombia William Wood, who said Washington views the AUC chieftains as international drug traffickers, not as leaders of a politically legitimate organization. The negotiations also are advantageous for the AUC chieftains. While the talks continue, they are guaranteed personal safety and immunity from arrest inside the small demilitarized zone created by Uribe in Cordoba Department. Theoretically, the DMZ allows Colombia's 10 most wanted paramilitary leaders and drug traffickers to live safe from attack by army and rebel forces for the next year or two, with about 400 of their personal bodyguards. Military and police flights, for example, are not allowed over the DMZ, and government security forces are not permitted inside the area. AUC leaders cannot enter or leave the DMZ without obtaining permission from the government; but because the area is de facto AUC heartland, the leaders can easily evade government forces deployed outside the DMZ. As long as the talks are kept alive and the DMZ continues to exist, the AUC leaders also will have significant leeway to expand and consolidate their drug-trafficking enterprises across Colombia at a time when the illegal drug industry is in some upheaval internally because of the Colombian army's offensive against the FARC. This offensive has effectively reduced coca acreage in southern Colombia. The sustained attacks against the FARC also have created opportunities for other drug-trafficking organizations, including groups led by AUC chieftains, to seize market share. The July 1 launch of negotiations in Santa Fe de Ralito will not change the security outlook for Colombian urban centers. The FARC will repudiate the talks, but likely will not try to launch a retaliatory urban offensive. Despite sporadic successes such as the car bomb that destroyed Bogota's exclusive El Nogal Club, the FARC's efforts to start urban offensives in cities such as Bogota, Medellin and Cali over the past two years for the most part have failed. Government forces maintain a very effective security presence in populous urban centers such as Bogota.