The US State Department said Iraq had spent tens of millions of dollars building a base for Iranian rebels. The facility, 40 kilometers west of Baghdad, can accommodate 3-5,000 people. The Iranian rebels replied through a spokesman in Cyprus that the base was built with money raised in Iran. Meanwhile, UN secretary general Kofi Anan stated that the UN was losing the propaganda war with Iraq. He pointed out that using sanctions against a ruthless dictator like Saddam Hussein is a losing proposition as Saddam is willing to inflict much hardship on his own people in order to get the sanctions lifted.