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January 26, 1968
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Approved For&lease 2007/03/06 : CIA-RDP79-00927iO6200070002-7 Secret DIRECTORATE OF INTELLIGENCE WEEKLY SUMMARY State Dept. review completed Secret 41[ 26 January 1968 pp04/68 Approved For Release 2007/03/06 : CIA-RDP79-00927A006200P0b02-7 25X1 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7 Approved For-Release 2007/03/fiC fQP79-0092 6806200070002-7 (Information as of noon EST, 25 January 1968) THE WEEK IN PERSPECTIVE VIETNAM The Communists appear to have scheduled a country- wide military campaign for late January. In Saigon, there may be some easing of tensions between Thieu and Ky. Hanoi has reduced its propaganda attention to Foreign Minister Trinh's statement on talks with the US. NORTH KOREA PROVOKES NEW CONFRONTATION North Korea's attempt to assassinate South Korean President Pak and its seizure of the USS Pueblo prob- ably are aimed primarily at generating diversionary pressures on the US at a time when Communist forces in South Vietnam are poised for a major offensive. LAOTIAN GOVERNMENT FORCES SUFFER SEVERE SETBACK The loss of Nam Bac represents one of the most severe military defeats the government has suffered in five years, but there are still no indications that the Communists intend to press their advantage by a drive into government-held areas. PEKING EQUIVOCATES ON SUPPRESSION OF DISORDER Major party journals in Peking have reprinted a tough editorial from a Shanghai daily demanding firm action against factionalists in "revolutionary" organizations but despite the tough talk, there is no sign of will- ingness to deal firmly with the militant groups creat- ing most of the disorder. THAILAND PRESSING. COUNTERINSURGENCY CAMPAIGN IN NORTH Government troops have encountered strong resistance in sweep operations against insurgent elements in the rugged mountains of northern Thailand. SECRET Page 1 Approved Fc 'RM61edse 20?F-,3M6 S0NkRPP79-00 7 ,9 6gg0070002-7 A Approved For Release 2007/03/06 : CIA-RDP79-00927A006200070002-7 SECRET THE WEEK IN PERSPECTIVE USSR'S DEFENSE BUDGET INCREASE MAY REFLECT PAY RAISE 12 The 15-percent increase announced for the Soviet de- fense budget for 1968 may provide for greater pay for career military personnel, according to a recent com- mentary in Red Star. 12 SOVIETS CONTINUE TO EXPAND AND IMPROVE ICBM FORCE New-generation SS-9 and SS-11 ICBMs are augmenting rather than replacing the elder SS-7s and -8s, with newer and more sophisticated weapons under develop- ment. :EASTERN EUROPEAN COUNTRIES RAISE MILITARY EXPENDITURES 14 The military budget for each country is higher this year than last, but changing budgetary practices may account for part of the increase. FRANCO-SOVIET SPACE PROGRAM CONTINUES 15 During recen- negotiations in Moscow, France and the USSR agreed to place a French instrument package on a Soviet space vehicle to be launched around the moon late this year. USSR'S AID AND TRADE WITH INDIA DECLINES 17 Premier Kosygin's visit to India this week will pro- vide New Delhi with an opportunity to review its lag- ging economic relations with the USSR. YUGOSLAVIA'S FOREIGN TRADE SHOWS SERIOUS IMBALANCE 18 Belgrade already had a large trade surplus with East- ern Europe, but a sharp rise in imports from the West has now put its trade further out of balance. DRAFT NPT MOVES TO NEXT STAGE OF NEGOTIATIONS 19 Although a number of problems remain to be negotiated, the US-USSR draft nonproliferation treaty has met many of the nonnuclear states' objections and is likely to be! forwarded to the UN with at least a majority endorsement. ,)EGRET Approved For Release 2007/03/06: CIA- Page ii WEEKLY S%PZ Y00927zAg0~0~7~002-7 Approved For Release 2007/03/0?V 1 79-00927AQ06200070002-7 Middle East - Africa THE WEEK IN PERSPECTIVE FEDERAL TROOPS ON THE MOVE IN NIGERIA'S CIVIL WAR Federal forces are advancing in several areas but stiff Biafran resistance continues. The already superior federal air force will soon be augmented by the acquisition from Egypt of IL-28 bombers. SOUTH AFRICA THREATENS TO BREAK SEA DEFENSE LINK WITH UK Because of the UK's continuing embargo on arms sales, South Africa may abrogate the Simonstown Naval Agree- ment, under which the British and South African navies are jointly responsible for protecting the cape sea route around Africa. IRAN PLANS TO MODERNIZE FORCES IN PERSIAN GULF The projected British withdrawal from the area has aroused interest in and support for the Shah's five- year program to re-equip Iran's armed forces. Western Hemisphere CHILEAN PRESIDENT PLANS DOMESTIC STRATEGY Since regaining the support of his own Christian Democratic Party, President Frei is taking a harder anti-Communist line and is planning new moves to revitalize the staggering economy. SECRET Approved For%19as4i00 '1~ : (9?9-009WA 20?070002-7 Approved Fo Release 2007/03 S /06 : Q1 RDP79-009206200070002-7 CI t PERU FACES CRISIS OVER 1968 BUDGET The finance minister has resigned following the action of the opposition-controlled Congress :reject-- ing some of the administration's 1968 budget :pro- posals. GUATEMALA CITY QUIET THIS WEEK The leftists are likely to remain in hiding until security forces relax their vigilance, but the calm could be shattered at any tine. SEC FRET Approved For)RgWase 200;7 @A-: X79-00 7 200070002-7 Approved For Release 2007/O1C RDP79-00927AD06200070002-7 FAR EAST The contest in east Asia has taken on new di- mensions with North Korea's audacious attempt to assassinate South Korean President Pak and its sei- zure of the USS Pueblo. These provocative ventures appear to be aimed primarily at generating diver- sionary pressure on the US at a time when Commu- nist forces in South Vietnam are poised to launch a major country-wide offensive. The North Korean leaders' deliberate moves to provoke a new crisis area reflect their readiness to face a sharp confrontation along the 38th Paral- lel. It seems likely, however, that they are count- ing heavily on the US to restrain Seoul from mount- ing unilateral reprisals and to prevent a military escalation in Korea that would require a major diversion of US military resources from Vietnam. In South Vietnam, artillery and probing attacks against the US Marine base at Khe Sanh apparently mark the opening round of an ambitious Communist winter offensive. The main weight of the campaign probably will be directed at South Vietnam's north- ern provinces, but there are indications of plans for coordinated assaults in other parts of the coun- try. With a major offensive in the offing, Hanoi has reduced its propaganda attention to its late December statement on talks with the US and has bit- terly denounced President Johnson's remarks on Viet- nam in his State of the Union message. In Saigon, President Thieu made his second ma- jor bid in ten days for a greater voice in allied decisions. In a speech to the National Assembly, Thieu insisted there could be no cessation of bomb- ing until the Communists end their guerrilla attacks, subversion, and terrorism in the South as well as their infiltration from the North. Armed struggles continue throughout China and the army seems to be making no effort to intervene. The apparent stalemate within the top leadership is reflected in Peking's failure to repudiate or curb militant "revolutionary" groups that are creating most of the disorder. 25X1 SECRET Page 1 WEEKLY SUMMARY 26 Jan 68 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7 SECRET N BURMA, Co Gio Linh Thien\ Demilifarized Zone yi Khe Sanh, _, -- 111: CORPS Capital Special Zone Approved For Release 200710E IA-RDP79-00927AO06200070002-7 Approved For Erase 2007/03,R CAF P79-00927AQ96200070002-7 VIETNAM Communist strategists ap- parently plan to kick off a ma- jor country-wide military cam- paign sometime around Tet, the lunar new year at the end of January. The main pressure will probably be mounted in the north- ern provinces. The opening round appar- ently occurred in Quang Tri Prov- ince on 19 January with a series of probes against allied posi- tions in the Khe Sanh area, fol- lowed up later in the week with large-scale mortar, rocket, and artillery bombardments. Heavy fighting also occurred near Gio Linh in the northeastern corner of the province, reflecting enemy efforts to maintain pres- sure and tie down US forces all along the Demilitarized Zone (DMZ). On the western end of the DMZ, at least 16,000 North Viet- namese regulars are in the hills surrounding the Marine garrison at Khe Sanh, while up to two enemy divisions threaten allied strongpoints in the eastern half of the province. 25X1 claims that 25X1 e mission of his unit--the North Vietnamese 325C Division-- is to overrun every US base be- tween the Laotian border and Con Thien before the Tet holi- days. remarks 25X1 sugge enemy troops are being given an especially heavy dose of propaganda exhortation, which is indicative of the major significance the Communists ap- pear to be placing on the pres- ent offensive. ~laimed that 25X1 the Quang Tri campaign was of such importance that it was be- ing controlled directly by the North Vietnamese Defense Minis- try in Hanoi. There are indications that enemy operations in the northern provinces may be coordinated with attacks in the western highlands and perhaps in northern III Corps. There has been continued maneuvering by subordinates of the B-3 Front, both along the Kontum-Pleiku provincial border area and in the mountains of Kon- tum adjacent to the Laos-Cam- bodian border, where at least five North Vietnamese regiments have been identified. Several recently captured documents discuss plans to attack specific targets in Pleiku--including the province capital, possibly in conjunction with actions in the triborder area. SECRET Approved Fok Bate 209WOR B : 0P79-00aZ7PjW24Qg070002-7 Approved For elease 2007/03/06 : CIA-RDP79-00927A006200070002-7 SECRET Although fighting in north- ern III Corps has slackened re- cently, elements of three Com?- munist divisions--the Viet Cong 5th and 9th, and the North Viet-- namese 7th--are in a position to threaten several key points, in-- cludi.ng the Loc Ninh - Song Be area. Reinforcing the likelihood of wide-ranging enemy offensive operations before or soon after Tet are the tapering off of the northeastern monsoon in the DMZ area and the new moor. cycle it- self, both natural factors that are known to create conditions favorable to enemy initiatives. Politics in Baron There are tenuous indica- tions that the strains between President Thieu and Vice Presi- dent Ky may be easing. The government is continu- ing to strengthen its position in the Lower House. The commit- tee chairmen elected on 18 Jan- uary put probable government sup- porters in charge of a majority of the committees. This enhances prospects of house cooperation with the executive branch, and results from a continued alli- ance between deputies in the progovernment Democratic Bloc and those of the northern Catho- lic-dominated Independence Bloc. Hanoi Rejects Reciprocity North Vietnam seems unwill- ing at present. to go any further SECRET Approved For Rele 4 e 20?~ (P L0 Y -2-F :S R Y 79-00927A0063g0070002-7 Page Approved For Rea'ease 2007/03/O(JV ft f 79-00927AA06200070002-7 in publicly elaborating on its position concerning talks with the US. In contrast to its ef- forts prior to President John- son's State of the Union address to underscore the reasonableness of the Communist position, Hanoi now seems bent on preventing any exaggerated interpretations of its intentions. After strongly denouncing the Presi- dent's restatement of the San Antonio formula, North Vietnam- ese media generally have concen- trated on presenting Hanoi's usual hard-line treatment of the war and have ignored the issue of negotiations. On 22 January, the DRV representative in Paris canceled a scheduled inter- view with a New York Times of- 25X1 ficial on the grounds that he had said everything he had to say at this time. SECRET Approved For I ePease 200 ( 3 : 8VAW#~9-009267AO06200070002-7 Approved For Ask Aft, elease 2007/03/06 J ,,-RDP79-00927AO06200070002-7 C; EGRET NORTH KOREA PROVOKES NEW CONFRONTATION North Korea's audacious a.c- tions in attempting to assassinate South Korean President Pak Chong- hui and in seizing the USS Pueblo and its crew were apparently in- dividual, uncoordinated actions. Both, however, probably were aimed primarily at generating diver- sionary pressures on the US at a time when Communist forces in South Vietnam are poised to launch a major country-wide offensive. In undertaking these risky adventures, the North Koreans were carrying out Premier Kim Il-song's prescription for combat- ing American power on a world- wide scale. Over the past year, he has repeatedly described Viet- nam as the focal point of the vTorlcL struggle and has urged all Communist regimes to take "more positive actions" to aid Hanoi by forcing the US to "disperse" its strength. On 19 January, the day the North Korean raiding party crossed the Demilitarized Zone on its way to Seoul, Pyongyang radio broad- cast Kim's call for "blows" against the US "in all parts of the world" in order to "split its forces to the maximum degree." Kim in- sisted, "We must tie the US up wherever it puts its feet, so that it cannot move around freely." Although the heavily armed. North Korean raiding party failed to execute its assigned mission of blowing up the presidential mansion, it managed to penetrate to within 800 meters of Blue House before being driven off by South Korean police. The fact that the Korean leaders ordered such a highly provocative venture indicates they were prepared for a sharp confrontation on the 38th Parallel, including at least limited and localized mili- tary action. It seems likely, however, that Pyongyang was count- ing heavily on the US to restrain the South Koreans and to prevent a military escalation in Korea that would require a major diver- sion of US military resources from Vietnam. The Pueblo incident, in North Korea's view, appears to have been a windfall opportunity to sharpen the diversionary confrontation in Korea, to stimulate US - South Korean differences, and to put greater pressures on US policy in Asia. The seizure of the Pueblo ;probably was not part of an elab- orate scenario prepared in ad- vance. North Korea has adopted a defiant stand in the initial talks at Panmunjom and appears determined to prolong the confrontation for some time. The senior North Korean representative at the Military Armistice Commission meeting on 24 January flatly rejected the US demand for the immediate return of the ship and its crew. He re- mained silent on Pyongyang's intentions regarding the disposi- tion of the Pueblo. SECRET Approved For, F,@~l as* 200G Q,: G1469WRT9-00927AOOa2GOD70002-7 Approved Fo lease 2007/0?/jRt.j;C RDP79-0092f*t06200070002-7 Despite this provocative stand, the North Koreans probably are not prepared to press events to the point of an uncontrollable conflict. Pyong- yang, moreover, is seeking to avoid responsibility for the Seoul raid by portraying it as part of the South Korean people's "heroic struggle" against the Pak regime. These two incidents will sharply increase pressure on the South Korean Government to mount strong retali- atory action. The seizure of the Pueblo, following on the heels of the Seoul raid, has deepened public concern over North Korean intentions and over the security situation in the South. The success of the North Korean team in penetrating Seoul has generated loud criticism of the gov- ernment. President Pak has urged the cabinet and party leaders to "pre- pare measures to counter and root out once and for all such atrocious activities" as the Seoul raid. De- spite firm UN Command prohibitions against unilateral South Korean reprisals, Pak has permitted some punitive raids against the North in the past. Any further aggravation of the confrontation might impel Pak to authorize more extensive retaliatory action and make it more difficult to control the course of events. LAOTIAN GOVERNMENT FORCES SUFFER SEVERE SETBACK The loss of Nam Bac on 13 January represents one of the most severe military setbacks the Laotian Government has suf- fered in five years, but there are still no indications that the Communists intend to press their advantage by a drive into government-held areas. It will be some time before total government casualties can be determined, but losses will probably be high. A full week after the defensive perimeter collapsed, less than half the original complement of 3,500 is accounted for. The enemy is still harassing units as they attempt to withdraw, and friendly guer- rilla units and helicopters are being moved in to help with the evacuation. The government also lost large stocks of heavy weap- ons, ammunition, food, and equip- ment. SECRET Approved For Release 2007/03/06 : CIA-RDP79-00927A006200070002-7 Page 7 WEEKLY SUMMARY 26 Jan 68 Approved For Release 2007/03/06 : CIA-RDP79-009271r006200070002-7 SECRET Communist propaganda empha- sized that the attack against Nam Bac was a response to the qov-? ernment's "nibbling tactics," and called on its forces to remain resolute in "defense of liberated areas." This line _s also being pushed by the Pathet Lao repre- sentative in Vientiane. In addition, the Communists captured the government position at Muong Hiem on 23 January, sug-, gesting that an early thrust may be made against Na Khang, the principal base for friendly guer- rilla operations in northern Xieng Khouang Province. Meanwhile, the Communists are closing in on the strategic government guerrilla base at Phou Pha Thi, which was the target of the unsuccessful North Vietnamese air strike on 12 January. The enemy has taken a number of out- lying posts in recent days, pos- sibly in preparation for artil- lery attacks on the airstrip. The loss of. Phou Pha Thi, which is only 15 miles from the North Vietnam border, would seriously dis:cupt government operations in northern Houa Phan Province, and would impair US air attacks against North Vietnam. In southern Laos, the enemy continues to threaten some major government bases, although no large-scale attacks have been reported in several weeks. The Communists, however, have dis- rupted US AID development pro- grams in this part of the coun- try. By tying substantial num- bers of government troops to static defensive positions, the Communists also have already achieved one of their primary objectives in their current dry- season campaign. 25X1 25X1 PEKING EQUIVOCATES ON SUPPRESSION OF DISORDER Peking has joined provincial propaganda media in denouncing the "crimes" of people in "revo- lutionary organizations " who in- stigate conflicts and widen fac- tio:zal splits. On 15 January, the major central committee jour- nals in Peking reprinted, without comment, a tough editorial from the Shanghai Wen Hu:L Pao demand- ing that firm action be taken against factionalists in "revalu- tionary" organizations. At least one provincial radio has told '"revolutionary" organizations to study the Wen Hui Pao editorial and many others have denounced the factionalists in similar language. The failure of the Peking papers to publish the customary editorial endorsement of a major statement like this suggests that militant forces around Mao are unwilling to accord official back- ing for such a forthright attack aimed at militants in the provinces. SEA FRET Approved Fore Lpage 200 ,6f?: g4#r~79-002937~R6? 070002-7 Approved ForQelease 2007/03/8f FP79-00921Q06200070002-7 "Armed struggles" and vio- lent fighting, presumably insti- gated by these groups, continue to be reported from many areas. Most fightin a ears to be 25X1 sporadic, a s a e o anarchy has existed activities. for weeks in several cities in southeast China. The army seems to be making no effort to inter- vene in these areas, even though the fighting reportedly has caused heavy casualties and damage, and has virtually put a stop to government and economic Peking radio has announced that Premier Chou En-lai appealed to railway workers in early Janu- ary to restore smooth operations, but this appeal seems to have 25X1 been as ineffectual as the de- nunciations of those who insti- gate conflicts. THAILAND PRESSING COUNTERINSURGENCY CAMPAIGN IN NORTH Government troops have en- countered strong Communist re- sistance in their major sweep op- eration begun in early December against insurgent elements in the rugged, mountainous terrain of northern Nan Province. The 3,000-man police and army force involved has suffered more than 60 casualties and has been se- verely handicapped by poor intel- ligence and inadequate logistic support. The operation is tar- geted against an estimated 200 Communist-led Meo tribesmen, who have displayed considerable tac- tical skill and discipline in evading and harassing government forces. The Thai Communist Party has been working with the northern tribal people for several years and has managed to extend its influence over a number of vil- la es. the party as trained several un red tribesmen in Laos and 6that smaller numbers have also re- ceived guerrilla instructions at the Hoa Binh training center in 25X1 North Vietnam. There are also indi- cations that Communist cadre. SECRET Approved Fo$ ea%e 2O13/ b 9lg: AMDP79-00 7AQQ6Z"070002-7 Approved For kelease 2007/03/06 : CIA-RDP79-00927AO06200070002-7 SECRET frcm the northeast may have been moved into the north. The commitment of substantial resources to the operation in Nan Province, as well as the high- level interest shown in Bangkok, is evidence of the government's belated recognition that it is now also facing a substantial sub- versive threat in northern Thai- land. The heavy-handed treatment of the tribal people during the operation, however, and the con- tinuing claims that. the dissi- dence is foreign-inspired indicate that Bangkok is not. yet ready to acknowledge that its own tribal policies have been largely re- sponsible for creating a situa- tion ripe for Communist exploita- tion. Meanwhile, Communist activ- ity in the more critical north- east has remained at a low level since last spring. The guerrillas there have generally limited their activity to the confisca- tion of food and to minor acts of intimidation against villagers. Armed clashes with security forces continue, but. forced village meet- ings have almost ceased. The Communists have not attracted much peasant support through ter- rorism and, in the face of in- creasing pressure from the gov- ernment, may have decided for the present to concentrate on low- key political efforts. SECRET Approved For Release 2007/03/06: CI ,,ZT1+~~1ARY-0092~A6 Og6n00R70002-7 Page 10 gEEKLY t~ Approved For Rohease 2007/03IIi cIf DP79-00927A,QD6200070002-7 EUROPE The Soviet leadership seemed to be having some troubles with scheduling. Premier Kosygin changed plans a second time and began a visit to India this week. There is one report that he will go on to Hanoi to be there during the Tet cease-fire. The central committee meeting, reportedly scheduled for January, now may not be held until next month, which suggests that the leadership has still to make up its mind on a number of issues. President Tito, returning from Cambodia, ex- tended a stopover in New Delhi for three days--osten- sibly to get some rest. He was thus able to see Ko- sygin as well as Mrs. Gandhi. Tito will visit Addis Ababa and Cairo before going home. There were some indications that the new lead- ership in Czechoslovakia might be more cooperative with the West than its predecessor. It granted Pan American Airways' long-standing request to sell tickets in Prague for hard currency. The Czechs were also helpful to a West German trade mission that is preparing to open a permanent office in Prague. Czechoslovakia was one of the first states publicly to approve the US-Soviet draft of the nonprolifera- tion treaty. In Denmark's elections, Prime Minister Krag's Social Democrats suffered a clear defeat. Although the non-Socialist parties now have a majority in the 179-seat parliament, the balance of power is held by the small Radical Liberal Party, elements of which favor a referendum on the question of mem- bership in NATO after 1969. 1 -1 SECRET Page 11 Approved For Release 2007/0i06S &'-WP79-609 'A 200070002-7 Approved For elease 209!I'A-RDP79-00927AAft 106200070002-7 USSR'S DEFENSE BUDGET INCREASE MAY REFLECT PAY RAISE ?ay raises for military per.- would be receiving more than i 90 il- sonneL may be included in the et 15- percent of the total Sov m t percent increase announced the Soviet defense budget for for itary pay, since conscripts only nominal compensation. ge 1968. Although the published ver--. sion of the newly instituted universal military service law contains no explicit provision for greater pay for career mili- Lary personnel, a recent commen - Lary on the law implies there is one. Military pay data normally are considered classified informa- tion by the Soviets. Describing the law in Red Star,. Marshal M. V. Zakharov, chief of the general staff, re- ported that changes aimed at "i:m- prov__ng the material. and legal po- ;sitions" of officers and long- term enlisted servicemen are be- ing introduced. Even without. an increase, these personnel It is not clear how big a raise is intended, but any sig- nificant one would increase mil- itary spending materially. An increase of ten percent, for ex- ample, would add about 350 mil- lion rubles to the budget. This would be about 16 percent of the 2..2-billion ruble increase the Soviets announced will be made in defense spending in 1968. An increase could be consid- erably more than ten percent. No major revision of the Soviet mil- itary pay structure has been de- tected in over 20 years. The wages of the civilian labor force have nerrlv doubled during this period. SOVIETS CONTINUE TO EXPAND AND IMPROVE ICBM FORCE 't'he Soviets are continuing to improve and strengthen their straLtegic Rocket Forces. The new generation SS-9 and SS-11 ICBMs are augmenting rather than replac- ing the older SS-7s and SS-8s. The Soviets apparently intend to raise the number of their deployed ICBMs to close: to the more than 1,000 Minutemen and Titans de- ployed by the US. SECRET Approved For'I a" 200M69 : Ui 79-00?i7Al(f 2bb070002-7 Approved Fori lease 2007/03/0?EeI R9P79-00927AO6200070002-7 Newer, more sophisticated weapons are under development. The fractional orbit bombardment system showed a good test record in 1967. This system could be- come operational late this year, although the booster probably is not powerful enough to permit a nuclear warhead to hit targets in the US on the first orbit. In another area of develop- ment, a new solid-propellant ICBM achieved ICBM range in October for the first time. This missile will probably not be operational for at least another year. SECRET The most extensive Soviet stra- tegic exercise ever held took place in July, with the rocket forces playing a leading role. This ex- ercise featured the nearly simul- taneous launch of five ICBMs from five different complexes on 20 July. An increasing amount of in- formation on the Soviet Rocket Forces has been published in the USSR in recent months. The So- viet public has been told for the first time that military per- sonnel are responsible for the launch of even nonmilitary space- craft, and a full-page article on a new mobile missile system was published in Red Star. In the November parade, the Soviets first displayed the SS-9 ICBM and a new two-stage solid-propellant MRBM for the Scam mobile system. I al Approved For1eelekse 20& ~M : $P79-09927AQ06290070002-7 Approved For f lease 2007/03/0 ;RDP79-00927A k 6200070002-7 SEC EASTERN EUROPE=AN COUNTRIES RAISE MILITARY EXPENDITURES The Eastern European coun- tries have all announced in- creased military budgets for 1968, most of them for the third consecutive year. The increases range from between 4 and 11 per- cent for Czechoslovakia, Ruma- nia, Yugoslavia, Bulgaria, Po- lanc., and Albania, to 15 percent for Hungary, and about 60 per- cent for East Germany. Except for Rumania and Hungary, each country has earmarked an equal or larger percentage of its to- tal 1968 budget for military expenditures than in 1967. Military spending has gen- era_ly been understated in pub- lished budget data. The prac- tice of including some military outlays elsewhere in the budget and providing indirect subsidies on some items purchased by the military may be coming to an end, however, at least in some of these countries. The eco- nomic reforms most are under- taking include, complete over- hauls of their budgets. It has been assumed that stated mili- tary budgets gave valid indica- tions of the c(eneral trend of defense expenditures. The con- clusions to be drawn from the :L968 budgets are not yet clear and comparison with previous years is, therefore, less mean- ingful than in the past. Although there is no evi- dence of a large-scale military build-up of East German forces, as Pankow's announced 60-percent increase in defense expenditures would suggest, the figures may EASTERN EUROPE: BUDGETED MILITARY EXPENDITURES COUNTRY 1967 PLANNED 1968 PLANNED 1968 PERCENTAGE PERCENTAGE OF TOTAL BUDGET (and currency) (in millions) (in millions) CHAN GE FROM 1967 1967 1968 Albania (Leks) 3ulgaria (Leva) 247 264 6.9 6.0 6.0 Czechoslovakia (Crowns 12,400 12,900 +4.0 8.7 8.9 Fast Germany (UM) about 3,600 5,800 61.0 5.0 8.7 Hlurigary (Forints) 5,437 6,400 15.5 5.2 4.6 Poland (Zlotys) 26,450 29,096 F10.0 8.4 9.5 Rumania (Lei) 4,960 5,200 +4.8 4.0 Yugoslavia (NewDinars) 5,382 6,030 +6.i 55.0 SECRE'l, Approved Ford-l~gasg42007 ( 6,~C~ 9-009ZTAOjM200670002-7 Approved For Wease 2007/03/ p(;II P79-00927A p6200070002-7 foreshadow an important increase in defense spending. It is also possible that the Eastern Euro- pean countries are having to pay some of the military costs previously borne by the USSR. Hungary cited rising prices as an important factor in its enlarged military budget. Ru- mania :Last year announced a program to produce military equipment, but its military bud- get is up less than 5 percent. To make higher military spending more palatable to the public, the Eastern European re- gimes usually blame increased international tension. Other reasons may also include any combination of such factors as more realistic budget planning, surfacing of heretofore hidden military expenditures, inflation, higher costs for more sophisti- cated equipment, price reforms, or the assumption of defense functions previousl borne by the Soviet Union. FRANCO-SOVIET SPACE PROGRAM CONTINUES During recent negotiations in Moscow, France and the USSR agreed to place a French instru- ment package on a Soviet space vehicle to be launched around the moon late this year. The project involves the use of French-built spectroscopic equipment to search for a thin atmosphere around the moon. A successful mission would repre- sent a significant step forward in lunar research. It is unclear whether the Soviets intend to revive their lunar orbiter program--inactive for more than a year--for this project. There are indications they are embarking on a new series of shots, including one or more circumlunar flights that will loop around the moon and return to earth. The French experiment might be included in such a mission. The bilateral talks in Mos- cow also covered an earlier agreement calling for the So- viets to place a French scien- tific satellite in a highly el- liptical orbit around the earth. This well-publicized program, Project Roseau, was originally scheduled for 1971 or 1972, but the French science attache in Moscow has indicated that the SECRET Approved For elease 20& /b X 79-00~~7AGD6 070002-7 Approved Forl (ease 2007/03/06 : CIA-RDP79-00927AO06200070002-7 SEC 1E'1' satellite will probably be launched in 1973. Contrary to press reports, there was no discussion of So- viet use of launchincr or track- ing facilities in French Guiana. France has announced that the space launch site under con- stru:~tion there will be avail- able to other countries, but it is too early to determine if that invitation includes the USSR. The Soviets might seek to establish space tracking facil- ities in French Guiana to sup- plement land-based tracking stations in the USSR. French Guiana is well situated for sup- porting a variety of Soviet space missions, including manned flights. The USSR almost certainly will not move any of its major space programs to French Guiana, but some Franco- Soviet sounding rockets might be Launched there. Thus far, the only joint space projects to reach the launch pad have involved small sounding rockets fired from Franz Josef Land in the Soviet Arctic. In late 1967, two Soviet sound- ing rockets carried French in- strument payloads in what ap- pears to be the beginning of a series of shots to investigate the upper atmosphere,. Franco-Soviet cooperation in space research, one of sev- E:ral joint scientific projects involving the two countries, began two years ago with formal negotiations in Paris. Thus far, the program has been char- acterized more by talk than by action. The main stumbling block has been the unwillingness of the French Government to allocate the necessary funds. There are no indications that Paris intends to loosen the purse strings for the program, 25X1 which probably will continue to move at a leisurely ace over the next few years. S CRET Approved For J elgajEt 2007/~ 1yC ,0-0092ZAOQBP00# 0002-7 Approved Fes-Release 2007Ir 4j:R MDP79-009IOiAO06200070002-7 USSR'S AID AND TRADE WITH INDIA DECLINES Premier Kosygin's visit to India this week will provide New Delhi with an opportunity to re- view its lagging economic rela- tions with the USSR. Soviet trade with India apparently declined in 1967 for the second year in a row and the Soviet aid program is far behind schedule. The trade goal for 1968 calls for total trade of $400 million, a modest increase of seven per- cent, but probably will not be met. India hopes to increase its ex- ports of manufactured goods to the Soviet Union while maintaining exports of such traditional goods as jute, tea, and hides at about the same level as in 1967. Much of the decline in trade stems from the implementation of new economic policies. by New Delhi, including a 30-percent devaluation of India's currency in June 1966. At that time, India also liberalized for- eign exchange regulations for priority industries, permitting importers to turn to Western sources for goods they formerly bought from the USSR for rupees. In addition, two poor crop years have reduced the availability of agricultural products for export to the USSR. An economic recession in India since 1966 has reduced the funds available for investment in the public sector and this has re- sulted in a slowdown in aid de- liveries from the USSR. Never- theless, in 1966 the Soviets ex- tended to India $333 million in new project aid and an additional $222 million in trade credits for India's fourth five-year plan (1966 to 1971). India also car- ried over more than $200 million in unused credits and another $225 million in unused credits for the Bokaro steel plant, which has not progressed far. India thus has about $900 million in unused Soviet credits, of which only about $40 million was drawn during the past year. Most Soviet project aid was used for the. expansion of projects begun under the third five-year plan, such as the oil refineries at Koyali and Barauni, the Bhilai steel plant, and two electric power plants. Progress at the Bokaro steel plant, the Soviets' largest aid project in India, was held up because of Soviet-Indian differences over cost and schedul- ing, and because Indian suppliers have been unable to meet contract commitments. Some equipment has been delivered to the site but probably no more than $22 million for equipment and technical serv- ices has been expended on the project so far.. Kosygin presumably will urge New Delhi to improve operations at plants built with Soviet aid and to allocate more resources to the public sector construction pro- gram. This would increase India's capacity to absorb scheduled So- SECRET P e 17 Y U Yy 26 Jan 68 Approved For Release 20071)': CFA- 9-00927A006200070002-7 Approved For Re ease 2007/03/4FP RP79-00927A0(fi 00070002-7 YUGOSLAVIA'S FOREIGN TRADE SHOWS SERIOUS IMBALANCE As part of its economic re- form program, Yugoslavia last year removed restrictions on about: half the products ii: imports, re- sulting in a sharp and unexpected upsurge in imports from the West. This, plus Belgrade's large trade surplus with Eastern Europe, has necessitated a search for a new bas:'_s of trade with these CEMA members. Yugoslav enterprises have shown a strong preference for Western goods, which are of higher quality and are often lower priced thart those from the Communist or less-developed countries. Yugo- slav imports last year from West- ern hard-currency countries are estimated to have increased 2.5 times more than exports to them. Although Yugoslavia's Western imports accounted for more than half its total trade, the rush to buy Western goods is expected to ease this year. Belgrade is in the process of raising its tariffs on some imports from the West: and has taken measures to increase im- ports from Eastern Europe. In addition, Yugoslavia prob- ably will try to get more finan- cial assistance from the West in the form of debt deferments and long-term credits. It will have subs-:antial repayment: obligations in 1968 and 1969, which could cut deeply into its hard-currency re- serves. Yugoslavia has received no major financial assistance from the West since 1966, but West Germany--one of Belgrade's largest creditors--has taken the lead in. the European Economic Community (EEC) in pressing the case for special treatment. Italy, however, has blocked negotiations for a Yugoslav-EEC commercial agreement. The Italians fear that, without an enlarged EEC market resulting from inclusion of the "northern" candidates for membership, Yugo- slavia--along with other Mediter- ranean countries seeking special community ties--would become overly strong competitors in supplying agricultural products to the EEC. The shift in Yugoslavia's trade toward the West has increased the strain on Belgrade's economic relations with Eastern Europe. Yugoslav imports from CEMA have been declining while exports have increased, resulting in the build-up of a trade surplus of $135 million which the Yugoslav press has charac- terized as "an interest-free credit." Yugoslavia has reportedly proposed various measures, includ- ing settlement in hard currency, if this surplus is not eliminated. by 1970. The subject was probably discussed at the recent CEMA meet- ings in Budapest, but the reaction of CEMA members to this proposal is unknown. Unless a new basis for trade with these countries is found, Belgrade may have to fur- ther regulate its trade with the SECRET Approved FPo 1elealse 20M M46 : DP79-00 7 6$?0070002-7 Approved FoiRelease 2007/03SE WIA- P79-0092% 06200070002-7 DRAFT NPT MOVES TO NEXT STAGE OF NEGOTIATIONS The draft nonproliferation treaty (NPT) submitted by the US and USSR last week is now being reviewed by the other members of the Eighteen Nation Disarmament Committee (ENDC). World-wide response to the draft has been generally favor- able. Even the West Germans, who had been among the most critical, were positive, although they noted that some problems remained. Italy and Japan reacted similarly. At a session of the ENDC on 23 January, however, only Britain, Canada, and Czechoslovakia pub- licly endorsed the draft treaty. The nonaligned members of the committee have remained silent. Among the problems remaining is the 25-year duration of the treaty, which West Germany and Italy may try to get shortened. In addition, Italy and Spain want the ten countries most advanced in nuclear energy development to have the veto on amendments, a power that the present draft gives to the International Atomic Energy Agency (IAEA) board of governors. Both countries would also like to increase from 40 to 80 the number of ratifications necessary to put the NPT into effect. The Japanese want a provision for an automatic review conference to be held every five years. The Western European countries question whether a verification agreement between IAEA and Eura- tom can be worked out in the two years provided. Other nonnuclear states want safeguards over the peaceful nuclear activities of the nuclear powers. The US and UK, but not the USSR, have indi- cated a willingness to accept IAEA safeguards. The Italians would like the decision on providing nonnuclear states with nuclear explosive de- vices for peaceful purposes put in the hands of an international agency rather than left to the nu- clear states. Underlying this and other concerns of the nonnuclear states is a belief that they are being asked to give up a great deal while the nuclear powers are sacrificing very little. The question of providing security assurances to the non- nuclear states remains to be worked out. Such assurances, necessary before India signs, will not be an integral part of the treaty but will probably take the form of declarations by the nuclear states and a UN resolution. Despite the problems that remain, the completed and revised text has met many of the nonnuclear states' objections, and it is likely that the NPT will receive at least a majority endorsement from the ENDC before it is for- warded to the UN. SECRET Approved Fo1rd ea a 200T4i0ad c: Q R 79-0092ZAQQ6.20Q970002-7 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7 Approved FoK$elease 2007/WRRDP79-009206200070002-7 MIDDLE EAST - AFRICA There was little progress during the week toward an early resolution of the area's many crises. Arab terrorists continue to hit at targets in Israel and Israeli-occupied territories. An Israeli counterstrike does not appear imminent, but continued terrorism will probably draw Israeli retaliation sooner or later. The tripartite committee attempting to reconcile differences between the Yemeni republicans and royal- ists has so far failed. The military situation re- mains stalemated with republican air power canceling out the advantage the royalists have on the ground. Nigerian federal troops have advanced in several sectors against Biafran forces, but are encountering stiff resistance from the Ibos. Lagos is adding a few IL-28 bombers, acquired from Egypt, to the small federal air force. In Dahomey, the insecure new military government may get another temporary reprieve from its pressing financial problems. France appears to be relenting on its decision to suspend budgetary support, and may remit emergency funds at the end of the month when Dahomey faces its next fiscal crisis. The French-speaking nations of the moderate Afro- Malagasy Common Organization, which appears to be in- creasing in prestige and importance, held their an- nual summit this week in Niger. The session was at- tended by 13 of the 14 member chiefs of state. The final communique indicated the organization will con- tinue its quiet efforts to expand economic coopera- tion among its members. Some of the luster surrounding India's 18th Re- public Day has been dimmed by disorders among south Indians, who complain that recent language legisla- tion fails to protect the rights of linguistic mi- norities. SECRET Approved Fop'reagi 200fH1 GIP '9-Oa627Ti '06 0070002-7 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7 SECRET 1 Enug~J Benin City r % ] \ ~ f= Udi OnitA -.- wka Ct05 B I A F R A %Umuahia clkoi~ Okporo j Aba BIGHT, O F B I A F R A NIGERIA . CAMEROON ,,,Santa Isabel EQUATORIAL UINE FERNANDO p0, Approved For Release 2007103/06 CIA-RDP79-00927A006200070002-7 SECRET Approved For Rele6e 2007/03/06 C6R[ 9-00927A00 00070002-7 FEDERAL TROOPS ON THE MOVE IN NIGERIA'S CIVIL WAR Federal military forces are beginning to gain new momentum in several areas of Biafra against severe opposition, as Ibo resist- ance continues unabated. The three brigades of the fed- eral 2nd Division, moving down from the north, have linked up west of Enugu with the lst Division, and the two forces are pushing south in a line from Enugu to the Niger River. Principal objectives are Udi, Awka, and Onitsha, the capture of which would significantly shorten federal supply lines. The defending Biafran brigades are put- ting up fierce resistance, however, and the federal advance is likely to be slow. sea and air from Lagos have mini- mized the federal advance. Lagos is adding IL-28 jet light bombers to its air force-- 25X1 the first of this type to be ac- quired anywhere in black Africa. A prime target is likely to be Port Harcourt and its airfield, Biafra's only entry point for military sup- plies and international travelers. On the coast at Bonny, the attacking Biafran units were re- portedly finally stopped by the federal 15th Brigade with the help of naval patrol boats that cut Biafran su 1 routes through the creeks. 25X1 e era pa ro s have recently penet north as Port Harco east at Calabar, fe have moved about 25 rated as far urt. To the deral troops miles to the 25X1 north and northwest, heading for Ikot Okporo on the Cross River. Effective Biafran counterattacks and harassing action, however, as well as the long supply line by SECRET Approved For Red' e 2 7/0?V/bbKUA-W> `00927A0062@0OgT002-7 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7 SECRET Luanda,* - )LaFc WALVIS BAY I REP. OF S.AF.) Walvis Ba t SWAZ)LANO Bloemfontein. Maseru Cape Town Simonstown Naval Base' REPUBLIC OF \LE OTHO,9purban *East London 'Port Elizabeth 20o aoo MILES Ile Eump~ (Fr.) Approved For Release 20~7O f , f lA-RDP79-00927A006200070002-7 Approved For, (ease 2007/03/06 SE REIrRDP79-0092 006200070002-7 SOUTH AFRICA THREATENS TO BREAK SEA DEFENSE LINK WITH UK British Prime Minister Wil- son'.s recent announcement that the UK will continue its embargo of military arms sales of all types to South Africa has led Pretoria to indicate that it might abrogate the Simonstown Naval Agreement. Under the terms of that agreement, signed in 1755, the British and South African navies are jointly re- sponsible for protecting the cape sea route around the tip of Af- rica. The South African request that sparked the trouble was an order for maritime reconnaissance jets, bombers, helicopters, frigates, submarines, and sur- face-to-air missiles. The South Africans claim that these weap- ons are required for the defense of the route and that the Brit- ish failure to supply them is reason enough for Pretoria to withdraw from the agreement. Wilson announced the arms embargo shortly after he took office in 1964. It is designed to prevent British arms from being used against South Africa's nonwhites. South Africa's pres- ent shopping list touched off bitter debate within the British Government, where some officials argued strenuously that the arms requested are not of the kind likely to be used against the indigenous population. It was also argued that it would be economically unfavorable to turn down the request, as South Africa plans to spend at least $200 mil- lion for arms in the near future. Abrogation of the agreement carries with it the possibility that British warships will lose docking privileges at South Af- rican ports. South African Prime Minister Vorster has implied that. he will give France access to the British naval base at Simonstown,. but it is doubtful that the French are interested. The Brit-' ish hope to use this base to fuel and supply ships returning British troops and equipment from east of Suez. After that with- drawal is completed in 1971, London probably will have little interest in defending the cape sea route. The South Africans will prob- ably turn to the French for arms, as they did soon after the Wilson embargo was promulgated. The French, having convinced themselves that the arms requested are not for internal use, have not hesi- tated to fill South Africa's or- ders. Past sales have included such items as Mirage aircraft, Daphne-class submarines, and Pan- hard armored cars. SECRET Approved FpgpeIeaSe 20( Q3ff)? :?JIAI?79-002$7 Qi6 070002-7 Approved For Tease 2007/03/06 : CIA-RDP79-00927A'200070002-7 SECRET IRAN PLANS TO MODERNIZE FORCES IN PERSIAN GULF The projected British mili- tary withdrawal from the Persian Gulf has focused new attention in Iran on the Shah's plans to modernize the country's armed forces. The Shah has maintained for several years that Egyptian President Nasir presents a threat to Iranian security in the Per- sian Gulf, and he has geared his defense policy toward improving Iran's naval and air capabilities in that area. Iranian officials expected the British withdrawal, and have often served notice that they intend to be prepared for any security problems that arose as a result. The Shah's military program for the next five years (1968- 1972) anticipates expenditures of $600-800 million, aimed pri- marily at bolstering Iranian de- fenses in the Persian Gulf. The British withdrawal from the area is not likely to cause any sig- nificant expansion, but will pro- vide additional justification for the large program that Iran had intended to pursue in any case. In early January, the Ira- nian Parliament authorized the government to borrow an additional $266 million for the purchase of military equipment. Prime Minis- ter Hoveyda maintains that the new five-year program is an abso- lute necessity in view of the "serious threat:" in the gulf. Although Iran would prefer a co- operative defense arrangement with other gulf riparians, Hoveyda thinks it likely that Iran will bear most of the burden. The Shah would prefer to make most of his military pur- chases in the US, and Iranian of- ficials have been pressing for an estimate of what they can expect to buy during the next five years. They are primarily interested in jet fighter aircraft, modern tanks, and artillery, and they are con- cerned by evidence that US credits for arms purchases will be further reduced. In addition, the Shah is con- tinuing his efforts to diversify Iran's sources of military equip- ment. Iran has already purchased an estimated $68.5 million in na- val equipment and short-range missiles from the UK, and has ex- pressed an interest in British k 25X1 25X1 eep Shah also can be expected to open the possibility of further arms purchases from the Soviet Union. Iran first purchased So- 25X1 v:iet equipment---estimated at 110 million--in 1967. SECRET Approved For Release 2007/03/06 : CIA-RDP79-00927A006200070002-7 Paqe 26 WEEKLY SUMMARY 26 Jan 68 Approved Fo elease 2007/ R -RDP79-0092= 06200070002-7 WESTERN HEMISPHERE The specter of limited guerrilla activities continued to haunt some Latin American governments during the past week. A Bolivian Special Forces unit is still search- ing for the remnants of the band formerly led by Che Guevara. The Bolivians believe at least five of Guevara's men are still in the country. The Colombian Army lost three soldiers in an ambush in Santander and the government was organizing a new counterinsurgency operation in Cordoba. There is no reason to believe the insurgents in Santander are connected with those in Cordoba. Venezuelan troops had better luck than their neighbors. On the plains of the southwest, they captured six guerrillas and killed a seventh. Vene- zuelan guerrillas usually operate in mountainous regions, and this incident is the first of its size-- and the first in a long time of any size--to take place on the plains. Guatemala had no major incidents during the past week, but security forces are still patrolling Guatemala City in search of the murderers of the two US military officers killed on 16 January. SECRET 25X1 Page 27 WEEKLY SUMMARY 26 Jan 68 Approved For -Release 2007/03/06 : CIA-RDP79-00927A006200070002-7 Approved For ease 2007/0, JjIftfDP79-00927A200070002-7 CHILEAN PRESIDENT PLANS DOMESTIC STRATEGY President Frei is continuing to assess the political situation in light of developments at the convention early this month of his Christian Democratic Party (PDC). At that meeting, Frei was instrumental in obtaining the resignation of a left-wing direc- torate and in installing one of his strong supporters as presi- dent of the party. Although these changes have strengthened his hand considerably, he realizes that he still may not be able to get his controversial wage-price legisla- tion through the opposition-con- trolled Senate. Frei has taken a harder anti- Communist line since the PDC con- vention. In his year-end press conference, shortly before the convention, he intimated that there was little to fear from the Chilean Communists. At the convention, however, he spoke strongly against the Communists. He recently said to visiting US senators that he believes the Communists to be "im- placably dedicated" r_o defeating his program because Moscow needs to prove that electoral action The government reportedly plans to shift its emphasis from agrarian reform to construction of housing, thus creating more jobs and business activity. Frei hopes that a general economic up- turn can be translated into PDC votes in the 1969 congressional and 1970 presidential elections. Frei has intimated that if his wage-price program fails to produce the necessary funds, he may call on the US for financial help rather than yield to pressure from the left wing of the PDC and from the leftist opposition par- ties to try to get more money from the US-based copper companies. Frei realizes that any breach of the present investment agreements would reduce Chile's ability to attract necessary foreign capita]., thus i his economic pro- gram. SECRET Approved FgPk Iegge 2009MN": V 79-00927A9 0N70002-7 Approved Fot elease 2007/W RCMZRDP79-00927fk006200070002-7 PERU FACES CRISIS OVER 1968 BUDGET President Belaunde and the opposition-controlled Peruvian Congress may be approaching an- other serious confrontation. Opposition party leaders backed by important segments of the business and financial com- munity, have rejected the ad- ministration's budget proposals for 1968. Stung by this rebuff, Finance Minister De Andrea resigned on 23 January. In token support of De Andrea, the entire cabinet then presented its collective resignation, which Belaunde de- clined to accept. Nevertheless, five high-ranking bank officials including Fernando Schwalb, head of the Central Reserve Bank, have irrevocably resigned. Schwalb protested the refusal of the op- position parties to grant the administration the resources nec- essary to stave off the present threats to economic stability and the value of the sol. SECRET De Andrea has been a con- troversial figure as finance min- ister, incurring the enmity of the business community and the opposition parties. His departure should improve Belaunde's chances of working out an agreeable com- promise with Congress. There is no indication that either the administration or the Congress wants to upset Peru's fragile political and economic stability at this time--some face- saving device will probably be found to give each party the sem- blance of a victory. Approved ~6 Malaise 20k { 6 5d 79-0($27 W06N0070002-7 Approved For ase 2007/03/06 : CIA-RDP79-00927A200070002-7 SFCRIET GUATEMALA CITY QUIET THIS WEEK Last week's high level of Communist terrorism has not been repeated this week in Guatemala City. The state of alert remains in force and the capital has been generally calm. Security forces are patrol- ling the city and are conducting some house-to-house searches but they appear to be acting with re- straint. Suspects are being sum- marily arrested and several prom- inent Communists who were not in- volved in the recent terrorism have been arrested. Defense Min- ister Arriaga is personally han- dling the investigation of the assassination of two US military officers on 16 January. He as- serts that the intensive search for Communist leaders will con- tinue and that when they are cap- tured they will be executed. SECRET The leftists are likely to remain in hiding until the se- curity forces have relaxed their vigilance in the capital. The calm, however, could be shattered, by leftist or rightist terror- ists at any time. British Honduran reaction to the events in Guatemala has been predictable in view of the current talks between the UK and Guatemala over its independ- ence. The opposition, which ob- 25X1 jects to any ties with Guatemala, has had a field day in its news- paper, reporting the killings and stressing the Castro involve- ment. They have also attacked Premier Price for "yearning to integrate our country with the Guatemalan system." Approved Foi (ease 20( 0 :-Q,PI?79-0( 7 Q6gp0070002-7 25X6 Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7 Next 1 Page(s) In Document Exempt Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7 Al8fcftor Rebase 2007/03/06: CIA-RDP79-00927AW00070002-7 Secret Approved For Release 2007/03/06 : CIA-RDP79-00927AO06200070002-7