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January 30, 2020
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August 13, 1958
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/' 4401�4 Approved for Release. 2020/01/23 CO2987884 3.5(c) 3.3(h)(2 13 August 1958 Copy No. C- CENTRAL 57 INTELLIGENCE BULLETIN DOCUMENT NO. _ - CHAN:77. !N >e � TO: TS Si .1EXT RVir.V1 DATE- TH: REVIEWER; -TOP SECRET tae f r Release:A' A r20.20/ Cf112. (CO 29 c7f8f1 Approved for Release: 2020/01/23 CO2987884 � NI II gar N.. No, NIL N. � Approved for Release: 2020/01/23 CO2987884 Approved for Release: 2020/01/23 CO2987884 13 AUGUST 1958 I. THE COMMUNIST BLOC � Soviet UN resolution is first tac- tical maneuver to counter possible Western moves. Soviet submarines continue extended operations in North Atlantic. Communists impose new physical controls to back up threats against East Berliners working in Western sectors. IL ASIA-AFRICA 0 Cairo orders Damascus on 11 August to withdraw "invaders" from Lebanon, citing Shihab's willingness to cooperate; emissary Irom Shihab went to Nasir on New Syrian budget looks to extra- ordinary revenues; may presage demand for increased pipeline charges. 0 TOP SECRET Approved for Release: 2020/01/23 CO2987884 Macmillan visit to Greece and Tur- key produced nothing new on Cyprus Issue, 0 First flight of IL-28 in Indonesia observed on 9 August. III. THE WEST 0 British want working arrangement with Arab nationalism and "guar- anteed neutrality" for Lebanon, Jordan, and, eventually, Persian Gulf sheikdoms. Approved for Release: 2020/01/23 CO2987884 TO S CENTRAL INTELLIGENCE BULLETIN 13 August 1958 DAILY BRIEF L THE COMMUNIST BLOC *Soviet UN resolution: Gromyko's resolution which calls on the UN General Assembly to strengthen UN observer capa- bilities in Lebanon and Jordan in conjunction with the with- drawal of US and British troops marks the beginning of Soviet maneuvers to counter anticipated Western positions in the forthcoming debate. The resolution, while phrased to imply condemnation of "Western military intervention," is nonethe- less calculated to attract maximum support from UN members and to lay the basis for future Sovi7+ PlniTnQnif hnvino' frtreg'd the withdrawal of Western forces. Soviet submarine activity: Soviet Northern Fleet sub- marines continue on extended operations, which began in mid-July, in the North Atlantic off the western approaches to the United Kingdom. A minimum of five groups of sub- marines now are involved. Since 10 August these units have received only stati7nine orders. possibly in preparation for a major exercise. (Page 1) � Berlin: The Communists are bringing new pressure against East Germans who work in the Western sectors of Berlin to give up their jobs. The East German regime has almost completed construction of the physical facilities neces- sary to control the passenger traffic on the elevated trains which pass through West Berlin. (Page 2) /A TOP SECRET /7 Iv 4'Approved for Release: 2020/01/23 CO298M84r A , ./ � 'Approved for Release: 2020/01/23 CO2987884 101' LCKL1 ref IL ASIA-AFRICA *Lebanon - UAR: On 11 August, Cairo ordered Damascus to arrange for the "withdrawal" of UAR military-type per- sonnel from Lebanon. General Shihab "is prepared to assist in this matter and to ensure their arrival in ria." ordere a iturithrirawailt With()11t some prior understanding with Shihab. Syria: A record Syrian budget totaling almost $130,0001,000, approved by UAR President Nasir after considerable high-level wrangling, may lead to further friction between the UAR and Western interests. Since planned expenditures are far in ex- cess of normal revenues, the UAR may seek a sharp increase in payments for use of the pipelines passing through Syria. (Page 3) Cyprus: Recent discussions in Athens and Ankara with British Prime Minister Macmillan produced nothing new on the Cyprus issue. Continued failure to make progress toward a political solution may lead to an early termination of the "truce" on the island. However, EOKA may be restrained by the appar- ent success of the recent British security drive and by the knowl- edge that a period of peace is needed to assure an early return of Makarios to the island. (Page 4) Indonesia: The first observed flight of an IL-28 jet bomber was made at Djakarta on 9 August. Six to eight IL-28's have been delivered, and a total of possibly 30 are on order from the Soviet bloc. (Page 5) III. THE WEST � Britain - Middle East: Top British officials tend to be- lieve that some form of guaranteed neutrality may be the best that can be obtained for Jordan, Lebanon, and in the long run, for the Persian Gulf sheikdoms. Foreign Secretary Lloyd told 13 Aug 58 DAILY BRIEF ii AAAW 0244, ,424 :',AZA'" � TOP SECRET ,Approved for Release: 2020/01/23 CO29878845 Deputy Under Secretary Murphy this might be achieved by conveying to Nasir the impression that American and British troops might otherwise remain in the Middle East for many years. A general British desire to establish a working ar- ements with Arab nationalism is evident. (Page 6) 13 Aug 58 DAILY BRIEF iii TOP SECRET , , / .4Approved for Release: 2020/01/23 CO2987884, , " Pry I Approved for Release: 2020/01/23 CO2987884 I. THE COMMUNIST BLOC Soviet Submarine Activity in North Atlantic A minimum of five "groups" of Soviet Northern Fleet sub- marines are operating in the North Atlantic south of Iceland. Extended operations by Northern Fleet submarines began in mid-July, apparently as a part of the military reaction to the crisis in the Middle East. Based on previous operations, it is estimated that three to five submarines comprise the aver- age "group." Also deployed in the same general area are three Soviet naval survey ships. These ships, which in the past have apparently been associated with submarine exercises, main- tain intermittent communications with Northern Fleet headquar- ters, these submarine groups _ may be an indication that a large-scale exercise is planned. A detachment of three North- ern Fleet RIGA-class destroyer escorts was sighted on 12 Au- gust off the southwest coast of Norway on a general westerly course, possibly to provide target services for the submarines. In addition, naval medium jet bomber (TU-16) aircraft have been scheduled for extensive overwater reconnaissance flights in the Norwegian Sea approaching Iceland and the Faeroe Islands. Such flights have been noted in the past in connection with sub- marine exercises. If a large-scale exercise develops, it would be the second held by the Soviet Northern Fleet in two months. Between mid- June and early July possibly as many as 40 submarines were en- gagedin an exercise;. it the North Atlantic and Norwegian Sea. -TOP-SE�RE-T 13 Aug 58 CFKITD A I IkITCI I IfICAlf"C 12111 I CT11.1 Approved for Release: 2020/01/23 CO2987884 Page 1 Approved for Release: 2020/01/23 CO2987884 New? Greater Berlin Med, A Brieselan Dallgow �POTSDAM Golm , Saa7mund Ni euen � o TELTOW Stahnsdorf Ludwigsfelde Autobahn Highway Railroad Railroad (elevated Wildau MILES 24785 UENHAGEN nigs Wu9terhausen Approved for Release: 2020/01/23 CO2987884 orritchorr Approved for Release: 2020/01/23 CO2987884 East Germans May Tighten Control of Elevated Service To West Berlin The construction by the East Germans of special plat- forms and switching arrangements on the elevated rail lines near the East-West Berlin sector border and on the outer ring which circumvents West Berlin is nearly completed. When the work is finished, the Communists, who operate the entire city's elevated railway system, will have the capability of restricting passenger traffic into and out of West Berlin on these trains. The regime reportedly is considering the imposition of a requirement that. all persons crossing the West Berlin border in either direction bear a special pass. In addition to tighten- ing internal security, the East German regime wants to prevent the continued employment in West Berlin of residents of East Berlin and East Germany and to check the flow of refugees. Faced with a critical labor shortage, East Germany has threat- ened to confiscate the housing of East Germans working in West Berlin, to expel their children from schools, and deprive them of "social benefits" unless they take jobs in East Berlin or the German Democratic Republic. Despite these pressures, how- ever, approximately 35,000 residents of Communist-controlled areas still work in West Berlin. tEeRE-T 13 Aug 58 rCI�ITD Al 11�ITC1 I irlmorc RI II I CTI1�1 Page 2 Approved for Release: 2020/01/23 CO2987884 Approved for Release: 2020/01/23 CO2987884 Nod IL ASIA-AFRICA ASIA-AFRICA Nasir Approves Record Syrian Budget UAR President Nasir's approval of a record $128,770,000 Syrian budget, after considerable wrangling between high-level Egyptian and Syrian officials, signals the institution of controls similar to those in Egypt over the previously free Syrian eco- nomy. Nasir on 22 July criticized the Syrian economy, which sug- gests Cairo has been preparing public opinion for moves designed to increase Egyptian control over Syria. A number of recent moves already have placed a damper on Syrian trade with the free world while leaving trade with the bloc unaffected. Mili- tary spending will account for about 58 percent of the budget-- an increase of 62 percent over last year. Although the Syrian economic situation is difficult�prospects are for the worst grain crop in a decade--it is not critical. The currency remains strong on international markets, and official foreign exchange reserves are probably the same or even slightly higher than a year ago. The money supply has increased, but prices remain at their normal seasonal levels. The new budget, however, may lead to a new era of deficit spending and instability. To secure additional revenue, Syria may press the Iraq Pe- troleum Company (IPC) and the Aramco-owned Tapline for sharply increased payments for pipelines passing through Syria. Damascus and Cairo are pressing IPC to construct a new major pipeline through Syria. This year Syria will receive an estimated $18,300,000 from IPC and about $1,300,000 from Tapline. 13 Aug 58 CENTRAL INTELLIGENCE BULLETIN Page 3 Approved for Release: 2020/01/23 CO2987884 Approved for Release: 2020/01/23 CO2987884 Macmillan Mission Fails to Resolve Cyprus Issue The recent trip of British Prime Minister Macmillan to Athens, Ankara, and Nicosia apparently resulted in no appre- ciable advance toward even an interim settlement of the dispute. Although the trip was designed to develop a favorable atmos- phere for negotiations, Macmillan advanced no new proposals. In Athens, he explained in detail the British seven-year plan for Cyprus, originally annOunced in Parliament on 19 June. While Greek opposition to the plan appeared to waver on some points, Premier Karamanlis refused to accept provisions call- ing for official Turkish and Greek government representatives on the Governor's Council. Conversations between Cyprus Gov- ernor Foot and Archbishop Makarios resulted only in an evasive statement by Makarios agreeing that the preservation of peace on Cyprus was important. Subsequent to the visit of Macmillan, Athens announced plans to resubmit the issue to the next session of the UN general Assembly. In Ankara, where the British plan was originally rejected, there has been a reappraisal in recent weeks and conciliatory statements indicating that the "partnership" aspects of the new proposals can be reconciled with the Turkish demand for eventual partition of Cyprus. The Turks still desire to have the final solu- tion for Cyprus, i. e., partition, spelled out at this time but may accept the British plan as an interim measure. Ankara would probably insist on having Greek and Turkish representatives on the Governor's Council, however, as the Turks regard this as one of the most attractive features of the British plan. On Cyprus, a recent large-scale security drive against EOKA has met with considerable success and may preclude immediate re- sumption of hostilities by EOICA even if 'there is no international agree- ment on the island's future. In additionv the British have made it clear to Greek Cypriot leaders that Makarios will be permitted back on Cyprus only after an extended period of peace. British action at this time to implement the new plan despite the objec- tions of Athens and Makarios would nevertheless result in an immediate call by EOKA.1...A..,' rIT'iN7na f 11 " a CM (If sabotage and terrorism. SECRET 13 Aug 58 CFNTRAI INTFI I InFNCF RIII I FTIN Approved for Release: 2020/01/23 CO2987884 Page 4 Try% creprT Approved for Release: 2020/01/23 CO2987884 *tot Bloc Arms Deliveries to Indonesia One of the six IL-28 jet bombers which were recently reported being assembled at the Djakarta airfield was ob- served in flight over Djakarta on 9 August. Other bloc air- craft already delivered to Indonesia include 20 IL-14 trans- ports, several MIG-17 jet fighters, and possibly as many as 15 MIG jet trainers. Although figures vary on the number of Soviet bloc air- craft which the Indonesian Air Force purchased early this year, the total apparently includes up to 30 IL-28s, 20 IL-14's, 35 MIG-17's, and 20 MIG-15's. All of the IL-14's have been de- livered by air; other aircraft have been arriving by sea. The Indonesian Air Force has lost several of its limited number of combat aircraft in operations against the dissidents. The rapidity with which it can replace its losses with the newly purchased aircraft will depend on the speed with which Indo- nesian personnel can be trained in the use of jet planes. Train- ing programs are under way in the bloc and in Egypt) as well as in Indonesia. Indonesia,is army and reportedly the navy also have ar- ranged for the supply of bloc arms. Total cost of the bloc- Indonesian arms deals, including aircraft, is at least $100,000,- 000 and may be as much as $200,000,000. Two shiploads of bloc arms were delivered to Indonesia in May and June. , A third Soviet vessel carry- ing arms arrived on 29 July and a fourth docked in Djakarta on or about 3 August. -11019-*Eek-f-4; 13 Aug 58 rsKrro AI IMTPI I inpmrr RI II I PTIM Page 5 Approved for Release: 2020/01/23 CO2987884 TAP CrrorT Approved for Release: 2020/01/23 CO2987884 v.md III. THE WEST British Ideas on the Middle East British Foreign Secretary Lloyd and his top advisers indi- cated during extensive talks on 10 August with Deputy Under Secretary Murphy that British Middle East policy is tending to- ward a working arrangement with Arab nationalism. Lloyd emphasized his desire to remove British troops from Jordan and his eagerness to obtain at least a temporary "solu- tion" for Jordan from the special UN General Assembly session. He said the best hope for Jordan might be to prop up the Husayn regime temporarily--such as by making Jordan a "ward of the UN" with a UNEF on its borders and a radiomonitoring group inside. He indicated hope that by implying determination to keep their troops in Jordan and Lebanon "for ten years if need be," Britain and the US could induce Nasir and the USSR to start working for "something realistic." Lloyd suggested that neutrality guaranteed by an interna- tional convention along the lines of Austria might be a good idea for Lebanon. While reiterating that the West should stand firm on holding the Persian Gulf sheikdoms for the present, Lloyd said that a Lebanese neutrality treaty might provide a good pre- cedent for that area. Lloyd expressed doubt that Nasir would either make or kee7 any agreement reflecting the strong current of British public opinion toward eventual compromise with Arab nationalism. Lloyd said it would suit Britain very well to work out some modus vivendi with Nasir. Lloyd believes the new Iraqi Government must also be given a "clean run," though chances of developing a working relationship are poor. TOP SECRET 13 Aug 58 CENTRAL INTELLIGENCE BULLETIN page 6 Approved for Release: 2020/01/23 CO2987884