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July 12, 1968
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Approved Forlease 2007/03/13 : CIA-RDP79-009274P606 001-6 DIRECTORATE OF INTELLIGENCE :secret WEEKLY SUMMARY State Dept. review completed Secret 52 12 July 1968 No. 0028/68 Approved For Release 2007/03/13 : CIA-RDP79-00927A006500060001-6 Approved For Release 2007/03/13 : CIA-RDP79-00927AO06500060001-6 Approved For Release 2007/03/13 : CIA-RDP79-00927AO06500060001-6 Approved For ease 2007/03/13: CIA-RDP79-00927-AP6500060001-6 SECRET (Information as of noon EDT, 11 July 1968) Page THE WEEK IN PERSPECTIVE 1 VIETNAM Military activity continues to taper off, reflected in low casualty figures for allies and Communists. Despite the lull, there are numerous indications of preparations for renewed fighting although no major Communist campaign is anticipated before the end of July or early August. President Thieu appears to be consolidating his support in the Lower House, and other groups are beginning to organize to put for- ward a loyal opposition front. JAPANESE ELECTIONS STRENGTHEN SATO'S LEADERSHIP The outcome of the upper house elections on 7 July strengthened Prime Minister Sato's position as Lib- eral Democratic Party leader and dealt a sharp set- back to the conservatives' main opposition party. MILITARY ACTIVITY IN LAOS REMAINS LIGHT The Communists have interrupted the rainy season lull with several small attacks over the past week, but there is no indication that a significantly higher level of fighting will soon occur. PHILIPPINE-MALAYSIAN IMPASSE AROUSES REGIONAL CONCERN 8 Lack of progress in the talks between Malaysia and the Philippines on the status of Sabah is causing growing concern among other Southeast Asian nations and Commonwealth governments. SECRET Approved ForPRghease 2000 t&: ClA A79-009MA0OB506060001-6 Approved FoMIease 2007/03/13 : CIA-RDP79-0092 ft- 06500060001-6 SECRET Europe SOVIETS SET LIMITS ON DEALING WITH THE WEST In three speeches last week, Brezhnev used strong language to warn his listeners at home and in the other Communist states to be vigilant against West- ern ideas. FRENCH ECONOMIC CONTROLS REFLECT DESIRE FOR STABILITY Monetary and fiscal measures have been imposed in France in a move to protect the franc, to shore up the balance of payments and hold down reserve losses. Further measures may be necessary as the results of the crisis become clearer. CZECHOSLOVAKIA BESET BY FOREIGN AND DOMESTIC PROBLEMS The Dubcek regime, as it fends off increasingly se- vere pressures from the Soviet Union and its orthodox allies, is beset by a continuing intraparty struggle and by a resurgence of antagonism between the Czechs and Slovaks. HARD LINERS GAIN IN POLISH PARTY LEADERSHIP Shifts in the top party leadership announced after a two-day central committee plenum ended on 9 July in- dicate significant but not yet decisive gains for the hard-line opponents of party leader Gomulka. SOVIET NAVAL FORCE TOURS INDIAN OCEAN A light cruiser, a guided missile frigate, and an oiler made nine port calls in eight countries in what appears to be part of a general expansion of operations for the Soviet Navy. NASIR COMPLETES EXTENDED VISIT TO MOSCOW His talks with Soviet leaders apparently dealt with Soviet military aid as well as the Arab-Israeli im- passe, with the major focus on the Jarring mission. SECRET Approved For $ q 2007 /It,j C ,I 78-009217,AO ?Oeg60001-6 Approved For Rpjease 2007/0SAt:'RDP79-00927AQQ6500060001-6 YEAR-OLD NIGERIAN WAR DRAGS ON Federal forces have occupied two thirds of Biafra since their invasion of eastern Nigeria on 6 July 1967. Lagos is determined to put an end to the Ibo tribe's secession but the Ibos doggedly fight on in spite of dwindling supplies and spreading famine and disease. Western Hemisphere CENTRAL AMERICAN SUMMIT IMPROVES AREA OUTLOOK Improved prospects for the area's Common Market, regional unity, and future cooperation appear to be the outcome of the five presidents' meeting. A TIME OF TESTING IN BRAZIL Student demonstrations have subsided, but the basic issues remain, and military leaders are still not happy with the President's failure to deal with political turbulence. URUGUAYAN GOVERNMENT STANDS FIRM President Pacheco is making the first real effort in many years to control spiraling inflation. SECRET Page iii WEEKLY SUMMARY 12 Jul 68 Approved For Release 2007/03/13 : CIA-RDP79-00927A006500060001-6 Approved Fo lease 2007/0 RlpgkDP79-0092WO6500060001-6 VIETNAM The tempo of military activ- ity throughout South Vietnam has continued to taper off as Commu- nist combat units maintained their generally nonaggressive stance in the face of allied op- erations against major infiltra- tion and supply routes and base areas. The reduced pace was clearly apparent in last week's battle statistics. Allied casualties for the week ending 6 July were at the lowest point of the year, while the Communist loss of 961 troops killed in action was the lowest since the last week in January 1967. Communist-ini- tiated incidents for the week also reflect the low level of ground action. Despite the lull in offen- sive activities, there are numer- ous indications from a wide variety of sources that the Com- munists are preparing for re- newed fighting. In I Corps, pris oner reports reveal that enemy units in the vicinity of Hue have been receiving replacements and supplies at a high rate and may soon be back up to full strength. Despite continuing evidence that the Communists intend to mount a third campaign against Saigon, the enemy's timetable apparently has been disrupted by his failure to complete prepara- tions as well as by allied pre- emptive actions. It now is esti- mated that this campaign has been postponed at least until the end of July or early August. Hanoi may already have issued prelimi- nary directives outlining the next "general offensive." There have been reports of a series of high-level meetings NORTH VIETNAM (?1_1,,_ g4DEMILITARIZED ZONE ~.?~ Hue* SECRET J Da Nang Approved For Release 2007/03113 : 8 - P79-064277ii06 %0060001-6 Approved Forlease 2007&(4:ppA-RDP79-009276500060001-6 The continuing decline in the level of Communist-initiated military activity in South Vietnam was reflected last week in the lowest Allied casualties this year and the lowest Communist losses since January 1967. Communist commands reportedly are holding strategy conferences and reindoctrination meetings throughout the South. In the past, such con- ferences have preceded major offensive actions. A variety of indicators point to Communist preparations for another round of attacks on Saigon in late July or early August. North Vietnamese spokesmen so far have made no attempt to at- tribute political significance to this lull or to represent it as a de facto de-escalation in order to increase pressure for a complete cessation of US bombing. In the most recent session of the Paris talks, Xuan Thuy again emphasized that there can be no progress in the absence of an uncondi- tional cessation of bombing. Hanoi's determination to keep the talks focused on this issue was apparent in Thuy's blunt refutation of references by American spokesmen to encouraging signs of progress. In its first move against the new Communist-front Alliance of Na- tional, Democratic and Peace Forces, the Saigon government reportedly intends to try Alliance leaders in absentia for the capital crime of treason. This step follows a warning by Prime Minister Huong that individuals issuing "peace appeals" may be subject to arrest. These measures appear to reflect Saigon's concern over recent appeals by student, labor and Bud- dhist groups for an early end to the war and negotiations with the National Liberation Front. There is a growing tendency among influential South Vietnamese to view some accommodation with the Front as un- avoidable. President Thieu's concern to check this trend was apparent in his renewed rejection of talks with the Front and his insistence that Saigon would deal only with Hanoi. The outcome of the Japanese elections last weekend will strengthen Prime Minister Sato's position as Liberal Democratic Party leader and encourage him in his forthright advocacy of continuing the security treaty with the US beyond 1970. The opposition Japan Socialist Party suffered another sharp setback at the polls; its exploitation of recent incidents related to US bases in Japan had little impact on the electorate. SECRET 25X1'= Approved WItelelase MAWR% S P79-0092iX006500060001-6 Approved For F ease 2007/ t R(Riy-RDP79-00927A,W6500060001-6 25X1 being held by various enemy com- mands. These meetings apparently include a major conference cur- rently being held by the Central Office for South Vietnam, the senior Viet Cong authority, which is scheduled to last until 15 25X1 Julv, and "concerns trie Viet Cully military offensive." The Commu- nists subregions which control enemy forces around Saigon are apparently now holding meetings to "reorient the cadre" and discuss forthcoming operations. Little hard evidence is yet available on the content of these meetings. In the past, the Communists have made it a practice to conduct similar ex- tensive conferences prior to ma- jor offensive campaigns. The meetings, however, could also reflect some subtle shift in enemy strategy to coincide with tactics at the Paris talks. There is no evidence, how- ever, that the low level of Com- munist military activity has political overtones. A North Vietnamese maneuver to use the lull as a device in the Paris talks cannot be ruled out, but the Communists have made no at- tempts to portray the military situation as significant. Viet- namese Communist propaganda main- tains its normal picture of con- tinuous Communist military pres- sure on all fronts. No spokes- men or sources claiming to speak for the Communists have suggested that Hanoi might try some kind of de facto de-escala- tion. Political Developments In South Vietnam In addition to encouraging the establishment of a progovern- ment political organization, President Thieu also appears to be consolidating his support in the Lower House by promoting the formation of a bloc responsive to him. The new Democratic Progres- sive Bloc was officially recognized last week as the fifth Lower House bloc. It has reportedly received considerable financial assist- ance from Thieu, and will appar- ently look to the president for guidance. With 22 members, the bloc ranks third among the five house groups. It expects to expand to approximately 30 by luring members away from other blocs, as it has already done with the majority of its present members. After completing recruitment, the Democratic Progressives hope to form a voting alliance with one or more of the other essentially progovernment blocs to give Thieu something approach- ing a working majority in the house. SECRET Approved Fohkgrea;e 2001: 8VA'-*Biy79-009'2+A~bi566060001-6 Approved F ^ release 2007/g L3R RDP79-009 006500060001-6 Meanwhile, in the wake of the launching last week of the progovernment front--the Na- tional Revolutionary Socialist Alliance--and of Thieu's call for a two-party system, groups in opposition to the government are beginning to organize. Al- most simultaneous with the an- nouncement of the Alliance, Hoa Hao notable Pham Ba Cam unveiled his Vietnam People's Force, which claims to be a loyal op- position group numbering in the hundreds of thousands. The party's stated aims are to con- tribute to the formation of a stable political structure by rallying nationalist ranks and SECRET to work for the unification of "the whole national territory." The militant Buddhists are also apparently getting into the act. A wing of the mili- tants, apparently at odds with the extremist views of their leader Thich Tri Quang, has re- portedly decided to form the Buddhist Socialist Bloc. The leader of this splinter group, Thich Thien Minh, apparently hopes that the new group will be looked on as part of the loyal opposition which, while not sup- porting, the government will back its anti-Communist fi ht. Approved FPOargelgase 2& 13SU IBbP79-O0~b2 AbO OO060001-6 Approved For Rase 2007/03/13 : CIA-RDP79-00927AW500060001-6 SECRET JAPANESE ELECTIONS STRENGTHEN SATO'S LEADERSHIP The outcome of the upper house elections on 7 July strength- ened Prime Minister Sato's posi- tion as Liberal Democratic Party leader and dealt a sharp setback to the conservatives' main oppo- sition party. The Liberal Democrats lost two seats but retained their ma- jority. The expected affilia- tion of a few conservative inde- pendents should further strengthen the party's position in the upper house. Barring a setback such as might be caused by a major politi- cal scandal prior to the party convention late this year, Sato is unlikely to encounter a serious challenge to his renomination as party president. The election outcome will encourage Sato to pursue Japan's current domestic and foreign poli- cies, including forthright advo- cacy of continuing the security treaty with the US beyond 1970. Sato now has more maneuvering room in dealing with issues such as Okinawa's return to Japanese control and the status of US bases in Japan. The Japan Socialist Party's exploitation of recent incidents related to US bases had little impact at the polls and the party suffered a sharp setback, its second reversal in 18 months. The Socialists not only lost five seats, but the party's share of the popular vote also decreased substantially compared with the upper house elections of 1965. This poor performance has tar- nished the Socialists' image as Japan's leading opposition party and probably will lead to another struggle for control between the party's moderate and radical ele- ments. The Japan Communist Party gained three additional seats in the upper house, most probably as a result of the party's abil- ity to maintain voting discipline for its limited number of candi- dates. The elections also pointed up the continued viability of Japan's middle-of-the-road par- ties, Komeito and the Democratic Socialist Party, which gained eight seats, largely at the ex- pense of the Japan Socialist Party. Their gains indicate the continuation of a "drift to the middle" in Japanese politics which 25X1 was first clearly demonstrated in the lower house elections of Jan- uary 1967. SECRET Approved FBPRdIeaSse 20MM13: 0lJ 79-0027AaG6&060001-6 Approved Flelease 2007/aT3}C1A-RDP79-OO9AOO65OOO6OOO1-6 LAOS: Current Situation ZN Muong n C H HANOI*. ', VIENTI NE ? Government-held location Communist-controlled territory Contested territory BOLOVE )PLATE/ 25X1 I I qI 25 51j U 76 5( ! ( SOUTH ?_VIETNAM Approved For Release 2007/03/13 : CIA-RDP79-00927AO06500060001-6 SECRET J0r, Mile-. / Approved For RQ ease 2007/0: NBC- 500060001-6 MILITARY ACTIVITY IN LAOS REMAINS LIGHT The Communists have inter- rupted the rainy season lull with several small attacks over the past week, but there is no indi- cation that a significantly higher level of fighting will soon occur. In north Laos, Communist forces are intensifying a six- month-old clearing operation against government guerrilla units operating deep within enemy-con- trolled territory between Nam Bac and the North Vietnamese border. A guerrilla base some 30 miles southeast of Phong Saly was re- cently abandoned as a result of enemy pressure, and government forces are having difficulty hold- ing other positions in the face of an estimated 3,000 enemy troops. The guerrillas have suffered heavy casualties, but their losses have been replaced by villagers alien- ated by enemy terrorism. Intensi- fied air support is being used to give the guerrillas an opportunity to regroup. Farther east, government forces have thus far encountered little opposition in an operation to recapture Muong Son, which was lost during the past dry season. The government hopes to install an air navigational facility at Muong Son and is watching closely to see how tenaciously the enemy will hold on to its dry season prizes this year. There has apparently been no significant withdrawal of North Vietnamese forces from the Bolo- 25X1 vens Plateau area, and the enemy may hope to take some government positions there as they did last year during July and Aug ust. SECRET Approved For Release 2007/03/13: 8I/~ RDP79-009Z7568060001-6 Approved 9elease 20077W1ft.JA-RDP79-009006500060001-6 PHILIPPINE-MALAYSIAN IMPASSE AROUSES REGIONAL CONCERN Lack of progress in the talks between Malaysia and the Philip- pines on the status of Sabah is causing growing concern among other Southeast Asian nations and Commonwealth governments about regional cooperation and security. The Philippine Government continues to call for a settle- ment of its claim on Sabah by the International Court of Justice but Malaysia has rejected this approach, contending that the dis- pute is political and has no firm legal basis. oreign Ministry has stimulated press articles reminding the part- ners of the disputants in the Association of Southeast Asian Nations--Indonesia, Thailand, and Singapore--of their "moral obliga- tion" to offer collective media- tion, solicited or not. Both governments have ex- pressed a cautious interest in the "good offices" of a third party. Malaysia, however, has indicated that it would only accept a media- tor predisposed to confirm its sovereignty over Sabah. Future talks on a foreign minister or "summit" level have been suggested by the Philippines, but Malaysia maintains that such a meeting would be useless unless the pres- ent talks make some progress. Other Southeast Asian nations as well as the UK, are seeking ways to ease the situation and The UK is concerned that the dispute could result in a diplo- matic break and even hostilities. A New Zealand spokesman has sug- gested the possibility of "corri- dor conversations" during the Asian and Pacific Council meeting as an appropriate method of exert- ing pressure. Australia's ambas- sador in Manila, moreover, has been instructed to encourage the Filipinos to ease tensions. It seems doubtful, however, that the Australian and New Zealand efforts would be more than counsel for restraint and moderation. SECRET Approvec?PU Release ? WN3y 1?Y 'DP79 9 'LA06&500060001-6 Approved For Base 2007/OOffiR DP79-00927AQD6500060001-6 During Nasir's visit to Moscow this week, there were hints that the Russians may have pressed him to show greater flexibility in the Arab-Is- raeli dispute. Premier Kosygin is believed to be holding further discussions on this question with UN negotiator Jarring during Kosygin's current visit to Sweden. The USSR and its orthodox Eastern European allies raised their political and propaganda pressure on Prague. Soviet military units which were moved into Czechoslovakia under cover of the recently concluded Warsaw Pact exercise remained in position. In Prague, party leader Dubcek gave further evidence that he is not prepared to curtail the activities of progressive elements in the party. These elements continued to consolidate their positions in preparation for the party congress scheduled for September. In Poland, hard-line elements in the party significantly advanced their interests at a two-day party central committee meeting, further weakening Gomulka's leadership. Their most important gain was the appointment of hard-line Interior Minister Moczar to the party secretariat and to the politburo. In France, newly appointed Prime Minister Maurice Couve de Murville, considered to be the "perfect reflection of De Gaulle's policy," has presented his cabinet. His predecessor, Georges Pompidou, was not appointed to a new job-an indication that De Gaulle probably disap- proved of some of Pompidou's attitudes and actions during recent months. A confrontation over France's emergency economic measures will take place in the Council of the European Communities next week, but there will probably be little immediate pressure for substantial change in Paris' position. This may come later. The Commission has already im- plicitly warned France against unduly prolonging its restrictive measures. SECRET Approved Fpor` ele%se 20U M : b 79-Obi2fA 06%0060001-6 Approved Ft' elease 2007M/a ,G Q-RDP79-009 1006500060001-6 SOVIETS SET LIMITS ON DEALING WITH THE WEST In three speeches last week, Brezhnev used strong language to warn his listeners at home and in the other Communist states to be vigilant against Western ideas. He reiterated the party's determination to hold the line against "ideological subversion" from the West, to guard the cohe- sion of the "socialist camp," and to maintain the Soviet Union's stature as a great power. Brezhnev confirmed party ap- proval of further negotiations with Western powers on arms lim- itations, but sternly warned against traffic with the "rot- ting, degenerating capitalist society" in the world of ideas. His equally stern warning against the dangers of "nationalism" seemed designed not only to main- tain Soviet pressure against the Czechoslovak movement for "de- mocratization" but also to ensure that the recently announced Soviet readiness to negotiate with the US on strategic missiles would not be misread by Eastern Europe as permission to seek agreements with the "capitalists" on other subjects. The call for "vigilance" against "hostile bourgeois" ideas has been a staple in So- viet propaganda for several years. At the central committee plenum last April it emerged as a dom- inant theme--a latter-day re- placement for Stalin's warnings of "capitalist encirclement"-- designed to raise a psychological barrier against the "enemy" with- out limiting the Soviet Union's freedom of action in any given situation. Its concept of tti; antagonistic worlds is charac- teristic of the generally tough foreign and domestic policy of the current leadership, and ap- parently represents the majority view in the 11-man coalition in the politburo. This concept does not, however, preclude the pos- sibility of negotiation between the two worlds in areas which are judged to be of compelling im- portance to Soviet interests. The obviously difficult de- cision to open talks with the US on strategic missiles was un- doubtedly more palatable to some members of the politburo than to others, involving as it did a complex of political, economic, military and technical considera- tions, presumably too sensitive for public airing. In the end the decision was presented to the Soviet public as evidence of the Soviet Union's "peace-loving" for- eign policy. Brezhnev's subsequent re- affirmation of the vigilance theme was intended, however, to dispel any thoughts of a fundamental change in outlook. It also served to refocus public attention on the role of the party and its chief as the principal policy maker and de- fender of the system. SECRET Approved ReFd se 2'd? 3Y13SU R )P79-G Z Ab06600060001-6 Approved For ease 2007/01 RIA41DP79-00927AW6500060001-6 FRENCH ECONOMIC CONTROLS REFLECT DESIRE FOR STABILITY The monetary and fiscal meas- ures as well as other economic controls now being imposed in France reflect President de Gaulle's strong desire to restore stability and avoid devaluation of the franc. Further measures will almost certainly be neces- sary as the economic results of the crisis become clearer and as plans for economic and social re- form are elaborated. The general strike virtually ended during the fourth week of June, although some 50,000 workers remained idle in scattered areas. Strike settlements brought wage increases that will average about 15 percent and boost household incomes by about $3 billion. This is expected to induce an up- surge of consumer spending that may generate boom conditions and a rise of 7 to 8 percent in the price level for the year. To combat inflation, the gov- ernment has taken a number of steps; price guideposts were is- sued for industry and the Bank of France discount rate was in- creased from 3.5 to 5 percent. Supplementary budgetary expendi- tures of $1.5 billion, however, have also been announced. These will be partly offset by higher tax revenues and cutbacks in ex- penditures, such as those for the nuclear forces. Larger budget defi- cits are nevertheless expected and these will increase infla- tionary pressures. To protect the balance of payments from an import boom, an export slump, and capital flight, the government has adopted severe exchange controls, import quotas, and export subsidies designed to keep export goods competitive. The temporary nature of these measures has been emphasized. Honoring a longer term commit- ment, France implemented on 1 July the final stage of tariff reductions under the Treaty of Rome, reducing all barriers to EEC imports and conforming to the EEC Common External Tariff (CXT) against all non-EEC coun- tries. France lost almost $1.8 bil- lion of its reserves as a result of operations to support the franc from 1 May to 2 July. On 2 July, French gold and foreign exchange reserves stood at $5.2 billion-- about 25 percent lower than the $6.9 billion held before the crisis. Reserve losses are ex- pected to continue in light of the balance of payments deficit of $1 billion or more forecast for 1968. During the week of 8 July, the US Federal Reserve System and other major central banks pledged a total of $1.3 billion in standby credits (so-called "swaps") to help support the franc in comin months. 25X1 SECRET Pa e 11 WEEKLY Ut~ q~tty 12 Jul 68 Approved For Release 2007/03/13 : IA PY9-00927AO06500060001-6 Approved FdrRelease 2007SECRET-RDP79-009006500060001-6 CZECHOSLOVAKIA BESET BY FOREIGN AND DOMESTIC PROBLEMS Even as it is fending off increasingly severe pressures from the Soviet Union and its orthodox allies, the Dubcek re- gime is beset by continuing in- traparty factional struggle and by the resurgence of longstand- ing antagonism between Czechs and Slovaks. Moscow has maintained its military pressure on Czechoslo- vakia by keeping in place the Soviet units moved in during the Warsaw Pact exercise. The size of these forces is unknown. Moscow may be searching for a pretext to keep these troops The Czechoslovaks continue to maintain that Soviet units will leave the country, but apparently are having difficulty in getting them to do so. Defense Minister Dzur stated on 9 July that Prague was "negotiating" with the Warsaw Pact command about the withdrawal. On 11 July the government's press spokesman reported that the Pact com- mand had empowered Prague to announce that "further military units" will "begin to withdraw as of 13 July." Even this statement, which is the most specific yet issued by Prague, begs the question when, or if, all the Soviet troops will depart. Moscow capped off ten days of increased political pressure on Prague when Pravda cited the "2000 Words" appeal of Czechoslo- vak liberals as evidence of the "activization of right-wing a,id directly counterrevolutionary forces in Czechoslovakia." Pravda expressed confidence that the Czechoslovak party and working people would administer a "severe rebuff" to the alleged reactionary forces. It seems clear, however, that the article was designed as a fol- low-up to a letter sent by Moscow to the Czechoslovak party which criticized the liberal appeal for the ouster of conservatives, again questioned whether the Dubcek lead- ership is in control, and issued a summons for another summit meet- ing. Moscow's like-minded allies-- East Germany, Poland, Bulgaria, and Hungary--sent similar letters to Prague. The Pravda article was pre- ceded by three speeches within seven days by party leader Brezhnev designed, in part, to remind Prague that Soviet "tolerance" is not un- limited. On 3 July Brezhnev, point- edly referring to the "trials" of the Hungarians in 1956, warned that the USSR will help to put down any antisocialist threats. The Czechoslovak party pre- sidium met on 8 and 9 July to as- sess these letters, and, although offering to discuss issues bilat- erally, rejected the idea of a summit meeting. The presidium SECRET ApprovefffiW F e ease tO3113UNNAFRDP79tQ0914Q500060001-6 Approved For Rp+ease 2007/02g'.P,IA-7DP79-00927AQ@6500060001-6 added that any talks must be based on the principles of equality and sovereignty. Some Czechoslovak party officials, including party secretary Cisar, reacted more ve- hemently to the letters. Apparently buoyed by the con- tinuing Soviet pressure campaign, conservatives within the party have attempted to use the "2000 Words" appeal to discredit the liberal-moderate coalition. The latter, however, scored a victory last weekend as regional party conferences elected a substantial majority of Dubcek supporters to be delegates to the forthcoming party congress. A liberal Slovak, deputy premier Husak, has spoken out urging that conservatives be ousted from the Slovak party lead- ership. The Dubcek regime has not yet won a complete victory over the conservatives, however, and the factional strife is likely to continue through the summer. The intensity of this struggle was in- dicated by an article in the writ- ers journal on 4 July which re- ferred to an open "attempt" at a reactionary coup, and implied that party secretary Indra, a conserva- tive spokesman, was involved. Prague, meanwhile, still has not drawn up a detailed program for either the procurement or use of Western aid. The Czechoslovaks have approached the West for both hard-currency loans to finance con- sumer goods and long-term credits to buy advanced Western equipment and technology. Discussions have centered on an immediate need for $400-500 million. A good portion of this sum is likely to be used to forestall a drop in living standards, which, without outside help, could come in the initial stages of proposed economic reforms. Rome is prepared to expand significantly the $20 million al- ready extended in short-term cred- its, while Paris has remained non- committal. The Czechoslovaks are also engaged in talks with West German financial officials, and various West German schemes for helping Prague appear to be under consideration. At present, these schemes center on private loans, presumably government-guaranteed. The Czechoslovaks are trying also to obtain aid from the USSR. Moscow reportedly already has 25X1 agreed to provide additional grain this year, and the Soviets con- tinue to hold out the hope of a loan to Prague. HARD LINERS GAIN IN POLISH PARTY LEADERSHIP Shifts in the top party leadership announced at the end of a two-day central committee plenum on 9 July indicate sig- nificant but not yet decisive gains for the hard-line opponents of party leader Gomulka. The appointment of Interior Minister Moczar, the leader of the nationalistic, hard-line faction, to the party secretar- iat and to the junior policy- making position of candidate politburo member, gives him a SECRET 13 Approved For Release 200YO : 8FA-WffPY79-OAi7'A"JO66?h060001-6 Approved F release 2007,150/& If--RDP79-009006500060001-6 long-sought position within the top leadership. The promotion of former candidate politburo member Jaszczuk to full, i.e. voting, politburo membership nonetheless maintains the pro- Gomulka majority in the party's policy-making body. Most important for Moczar is the fact that he replaces the retiring party secretary in charge of security, Wladyslaw Wicha, who, like his successor, moved to the secretariat from the Interior Ministry. As Go- mulka's trusted lieutenant, Wicha was charged primarily with keep- ing an eye on the ambitious Moc- zar. Moczar probably will as- sume Wicha's security functions, but because party secretaries customarily are not members of the government, he may soon re- linquish his post as interior minister. This and other possi- ble shifts in the government may be announced at a parliamen- tary session reportedly scheduled for 15 July. Gomulka's politburo aides strongly supported his efforts to call off the anti-Semitic propaganda campaign and to re- view some of the recent purges. Politburo member Kliszko's re- marks in this regard were echoed by several of the central commit- tee members who had already been ousted from their government and academic positions. Although Gomulka was able to prevent the resignations of approximately a dozen central committee members under fire from the hard liners, he did not have his usual control over the plenum. His supporters openly clashed with the leaders of middle ech- elon party organizations where Moczar's support is the strongest. The plenum did not conclu- sively resolve the factional strug- gle, consequently there will be intense campaigning for delegates to the forthcoming party congress. The congress, which was set for 11 November, will elect a new central committee, which in turn will choose a new leadership. The full impact of Moczar's gains on Gomulka's power position within the party cannot yet be precisely defined, but the psy- chological effect on the party's rank and file, especially its Jewish segment, probably will be significant. Gomulka spoke at the plenum, but his remarks have not been made public, and this may be another sign of his weak- ness. In the long run, the fail- ure of the plenum to address it- self to the demands for reform from the party's younger, better educated members may prove to be both Moczar's and Gomulka's Achilles heel. Except for polit- buro member Gierek, who for the time being is supporting Gomulka, no speaker raised such problems, suggesting that no lessons were learned from the March riots of youth and students. The de- mands of Polish youth, however, are basic, and will probably have an impact on the course of the party congress. SECRET ApprovedfWRe ase 1J~ WbP79-W927AOf @500060001-6 Approved For Lease 2007/038/13 : ECRET P79-00927AW6500060001-6 UN emissary Gunnar Jarring has been probing Arab-Israeli differences on substantive issues during talks he has had in the last two weeks in Europe with foreign ministers Riad of Egypt, Al Rifa'i of Jordan, Eban of Israel, and with Kosygin and Gromyko of the USSR. The Soviets have encouraged Jarring to draw up concrete proposals for submission to each side as a means of finding areas of potential accommodation. The Jarring mission undoubtedly was the primary topic of President Nasir's talks in Moscow this week but the results of his short visit are still obscure. The Jordan-Israel frontier area has been relatively quiet, but along the Suez Canal the most serious clash in months occurred on 8 July, culmi- nating in the Israeli shelling of an Egyptian town. The Greek Government finally published its version of the proposed constitution this week, apparently only after considerable cabinet debate. Early indications suggest that both royal and parliamentary prerogatives have been limited; further revisions may occur before the promised Sep- tember referendum. Tunisian President Bourguiba is visiting Bulgaria, a major Communist aid donor to Tunisia, and Rumania to balance his recent trip to Canada, the United States and Spain. Bourguiba's last stop on his tour will be Turkey, which may contribute some military assistance. In the Persian Gulf area, the members of the embryonic Federation of Arab Amirates have agreed on the first steps toward creating a working government. Tribal disturbances of rather serious proportions have reportedly erupted in West Pakistan near the Afghan border, and the authorities have moved in troops to restore order. The Indians are reacting with alarm to the reported Soviet decision to sell arms to Pakistan. Mrs. Gandhi has described the development as "fraught with danger," and is protesting to Moscow. With increased world attention focusing on the plight of the Biafran populace and cease-fire prospects as dim as ever, the Nigerian Government may seek to shorten the war by increa ' temno of its militar operations against the secessionist forces. 25X1 25X1 SECRET Approved For?tease 200/ / YY &M~ 9-00 7ATO668060001-6 Approved Fc rtelease 2007/03/13 : CIA-RDP79-009+006500060001-6 SECRET SOVIET NAVAL FORCE TOURS INDIAN OCEAN The small Soviet naval force making a good-will tour in the Indian Ocean reportedly is sched- uled to start home late this week after a port call in Ceylon. The force--a light cruiser, a guided missile frigate, and an oiler-- made port calls in eight coun- tries. When the ships left Vladi- vostok in mid-March, their sole announced mission was a courtesy visit to India. After visiting Madras and Bombay, however, the force continued on an extempora- neous tour of South Asia, Africa, and the Middle East. No country is known to have refused a visit by the Soviets. Some of the nations visited, such as Pakistan, did not welcome the Soviet ships but did approve their calls to demon- strate neutrality. The Indian Ocean tour, the first such cruise in the area, ap- pears to be part of the general expansion of operations by the Soviet Navy over the past year or two. There are no indications that the Soviets are planning to maintain a permanent naval pres- ence in the Indian Ocean, but a good-will tour could become a regular feature -7- 5 s ~I `? Karaelai -I,A11A "' INLMA M1 ~ 1 , t {1 9V DF>+ 2 Bombay SECRET 25X11 25X1 Approved f elgpe 29 R ,/13s PR9P79-QOz92j7AOOPR00060001-6 Approved For (ease 2007/0SRC: DP79-00927AQ 6500060001-6 NASIR COMPLETES EXTENDED VISIT TO MOSCOW Nasir's talks in Moscow from 4 through 10 July--his first visit to the Soviet Union since 1965-- apparently dealt with Soviet mil- itary aid as well as the Arab- Israeli impasse, but as yet there is no clear picture of the re- sults. The USSR undoubtedly used the occasion to prompt Cairo to loosen the Gordian knot in the Middle East. The early phase of the talks reportedly focused on UN emissary Jarring's mission. The Soviets have favored increased Arab cooperation with Jarring, probably to the extent of indirect talks with Israel, and they previ- ously have fended off Arab efforts to return the issue to the Secu- rity Council. rally around Nasir's leadership. Soviet leaders would especially like to draw Egypt and Syria closer together and end Damascus' postwar isolation. There is no indication, how- ever, that the plaudits for Nasir were accompanied by new military and economic aid agreements. The Egyptian delegation did not in- clude a senior-level economic official, and further arms discus- sions may occur if Soviet Defense Minister Grechko stops in Cairo during his trip to Algiers later this month. Also, a Cairo news agency reported that Chief of of Staff Riyad will remain in Moscow after Nasir's departure to continue his talks with Grechko. The USSR, in Pravda's own words, gave President Nasir a "particularly warm and hearty reception," probably going to great lengths to convince him that Egypt remains the keystone of Soviet policies in the Middle East. Moscow is still trying to get Arab progressive elements to The fact that Nasir's visit was longer than originally planned suggests that differences may have arisen. Nasir undoubtedly also unburdened himself to Tito on the question of an accommodation with 25X1 Israel during Nasir's subsequent stopover in Yugoslavia. SECRET Page 17 WEEKLY SUMMARY 12 Jul 68 Approved For Release 2007/03/13 : CIA-RDP79-00927AO06500060001-6 Approved F elease 2007/03/13 : CIA-RDP79-00906500060001-6 SECRET YEAR-OLD NIGERIAN CIVIL WAR DRAGS ON After a year of hard-fought operations, federal military forces dispatched to put down the seces- sionist Ibo tribe of eastern Ni- geria have occupied about two thirds of Biafra. Lagos, regard- less of international pressures for an early cease-fire, is de- termined to prosecute the war until the Ibos renounce secession. The Ibos, who view the war as a struggle for survival, are still fighting doggedly on, in spite of dwindling military supplies and spreading famine and disease. Federal military strategy has been to try to avoid a direct invasion of the densely populated Ibo heartland. As the Ibos show no sign of giving up, however, General Gowon appears to be more inclined to heed the pleas of field commanders for the complete occupation of the East Central State. This would be a long and costly operation, and could well ensure the permanent alienation of all Ibos from the Nigerian fed- eration. Federal military forces in the southern sector are slowly occupying the rest of Rivers State against increasing opposition. To the east of Port Harcourt, some of the worst devastation of the war is reportedly taking place as the two sides chase each other back and forth over the same terrain. Some federal reinforce- ments have been transported to the overextended division in this area. In the northern sector, fed- eral troops have taken Awgu and have driven within a few miles of Nnewi, birthplace of Biafran leader Ojukwu. A major objective is the improvised rebel airstrip near Ihiala, and another brigade is being brought in to assist this operation. Federal progress in this area is impeded by Biafran elements infiltrating across the Niger River into the Mid-Western State, where they are harassing supply lines along the roads lead- ing to Asaba, as well as limiting use of the river. Biafra is keeping small quantities of arms and ammunition flowing to its troops via its tenuous air link to Portugal. On 30 June one aircraft regularly used on this route crashed on landing while transferring Red Cross relief supplies from Fernando Po Island. Major Western relief agencies, led by the International Commit- tee of the Red Cross, are mount- ing sizable efforts to bring food and medicines to the war-torn areas and to the impacted Ibo population. The Biafrans, how- ever, are insisting that all relief supplies be brought di- rectly by air rather than over- land through federally held territory. The rising incidence SECRET Approved IA Rel use 20U!1 1 u r pP79-(LO,92L @?00060001-6 Approved For Fase 2007/03/8tDP79-00927RW,fii500060001-6 of malnutrition, famine, and disease, especially among several hundred thousand refugees, prob- ably now requires a larger scale relief effort than can be pro- vided by air. While British and Common- wealth officials continue to try to bring the Nigerian combatants together for new peace talks, the organization of African Unity has also turned its attention to the problem again. Its long dor- mant Nigerian Consultative Commit- tee now is scheduled to meet in Niamey, Niger, on 15 July, but this group is unlikely to influence either side in the civil war. Nigeria: Status of Federal Advance Into Biafra Makurdi #P D-WESTERN nitsha et newi. elhiala . 1 'Awgu P Abakaliki !4Gfi EAST GEITRAL ,Umuahia 'Yenagoa Port ttarcourt\ I V E R S~ Brass e Bonny Area controlled by Federal forces Federal advance Biafran counterattack State boundary 25 50 STATUTE MILES EQUATORIAL GUINEA FERNANDO PO' (SP.) NIGERIA '&BIAFRA CAMEROON SECRET Approved For kgfe%s~~007 TiXC i- ? 9-009i1AOb'8t06 A SO U dH Ikot Ek ene EA$1 ERN alaba Oron Approved F^release 2007/1k,R.RDP79-009006500060001-6 SECRET Approved W'd eleige 20b IIY3 bP79-0b?2f 0Ob0060001-6 Approved For R%Jease 2007/3RRDP79-00927AW6500060001-6 The Central American summit meeting in El Salvador last weekend highlighted events in the hemisphere. The Central American Common Market, the principal topic of the conference, appears to have been strengthened somewhat, and President Johnson's attendance served to emphasize the importance of continued efforts to make it a permanent working arrangement. News media in the five republics gave extensive and largely favorable coverage to the meeting, but Moscow, Peking, and Havana, were sharply critical, saying that the Common Market was a means of "plundering the people," and that President Johnson's trip was aimed only at salvaging it from bankruptcy.' Elections are still making news in several countries. In Chile, Presi- dent Frei's Christian Democratic Party won an impressive victory in a congressional by-election on 7 July. Although the results cannot be ex- trapolated into a national trend, the victory will provide the Christian Democrats with a strong psychological stimulus as they prepare for the national congressional elections next March. The defeat of the leftist candidate indicates that the Communists' goal of a broad leftist coalition is still some way from realization. In Ecuador, President-elect Jose Maria Velasco has still not been proclaimed the official winner in the elections of 2 June. Velasco believes that the major obstacles to certification of his victory have been over- come, but he is still threatening "civil war" if anything goes wrong. Student demonstrations in Brazil and Argentina, and labor protests in Uruguay have subsided, but the threat of further violence has preoccupied government leaders. The Brazilian military is increasingly dissatisfied with the president's handling of student and other problems. In Argentina, the government has made it clear it will not tolerate disorder. The chiefs of the Uruguayan armed forces reportedly are pressing for more stringent SECRET Approved ForPl elease 20-WE 079*13 S3&-~79- 9 b09900060001-6 Approved Folr Release 2007/?WL3RptRDP79-009006500060001-6 CENTRAL AMERICAN SUMMIT IMPROVES AREA OUTLOOK Last weekend's Central Amer- ican summit meeting in El Salva- dor was a great help to Central American integration efforts. The Central American Com- mon Market (CACM), the principal topic at the conference, appears to have been strengthened. An ex- port-induced economic slowdown that began in 1966 has impeded progress toward integration. The new attitude that the CACM must be a permanent working arrange- ment came about when the five presidents agreed to push for quick ratification of a 30-per- cent tariff surcharge on imports from outside the area. This surcharge, designed to ease the area's balance of payments problem, was not to have been applied by any of the mem- ber countries until ratified by at least three legislatures. Nicaraguan President Somoza, how- ever, imposed it unilaterally and threatened to destroy the five-nation market if the other countries did not quickly follow suit. When the meeting was called Somoza altered his stand, report- edly stating that Nicaragua's interests were the same as those of the other Central American countries. The Guatemalan and Honduran legislatures are ap- parently on the verge of ratify- ing the surcharge. Relations between El Salvador and Honduras were normalized on the eve of the meeting when the two presidents announced an ex- change of prisoners taken in last year's border clashes. The dispute over the prisoners had marred relations between the two countries and impeded final set- tlement of the long-standing border problem. It will prob- ably be some time, however, be- fore a border is officially delineated in the disputed ter- ritory. Further progress de- pends on a joint Salvadoran-Hon- duran commission established early this year to study the problem and mark the border. News media in the five re- publics have given extensive and largely favorable coverage to the San Salvador meeting, which has been acclaimed a great success. In Guatemala, the legis- lature reflected public opinion with a congressional resolution expressing satisfaction with the results of the summit. Dailies ban- nered the regional unity theme and the impetus given the Common Market by President Johnson's visit. Costa Rican President Trejos, however, stated that declarations are only words and it remains to be seen whether the problems of economic integration can be overcome. Cooperation is likely to improve as a result of the con- ference, even though a basic dis- trust between some of the presi- dents probably remains. Future problems may be handled with more cordiality and there are plans afoot to continue presi- dential meetings at regular in- tervals. 25X1 SECRET Approved eliise 266 X13S:UtWR 5P79-0092 AOOWOOO6OOO1-6 Approved For F ase 2007/O3SECRER~ P79-00927AGD6500060001-6 A TIME OF TESTING IN BRAZIL Student demonstrations have subsided, but the basic issues remain and military leaders are still not happy about President Costa e Silva's failure to deal with political turbulence. He has so far avoided harsh repres- sive measures but there is an increasing possibility that he will have to bow to "hard-line" demands. The administration has im- posed a ban on demonstrations for an indefinite period, but since few are scheduled during the present vacation period, the move appears to be mainly a sop to "hard-line" military men. it could boomerang, however, and lead to further violence if stu- dents decide it is just one more item in their long list of griev- ances. Demonstrations on 2, 3, and 4 July in Recife, Sao Paulo, and Rio de Janeiro failed to attract as much nonstudent support as had earlier protests. Leftist ex- tremists harangued the crowds, stressing principally antigovern- ment themes. The US came in for its share of the tongue-lashings", and two US flags were burned. Urban terrorists are con- tinuing their activities in Sao Paulo. Early on 7 July five bombs damaged railway facilities and severed an oil pipeline. Au- thorities have not yet identified the group responsible, but sus- pect that dissident Communist leader Carlos Marighella may be involved. More trouble seems to be in prospect following the re- cent theft of nearly 1,000 pounds of dynamite from a rock quarry. The next few weeks will be 25X1 a time of testing for the present administration. Costa e Silva may take advantage of the vacation period to implement some of the educational reforms demanded by students. If progress is not evi- dent soon, however, new demonstra- tions are likely. They would no doubt be accompanied by heightened discontent and stepped up military pressure, both of which would be detrimental to government stabil- T e President held a meeting of his National Security Council on 11 July to discuss stu- dent disturbances, urban terrorism, and "counterrevolutionary trends." 125X1 SECRET Approved FoiPR913ea!M 2OO79MY.lYCE4ARDRO-OO9P7AD065OW6OOO1-6 Approved Fbelease 2007/03/13 : CIA-RDP79-009'27A006500060001-6 SECRET URUGUAYAN GOVERNMENT STANDS FIRM President Pacheco is making the first real effort in many years to control spiraling infla- tion. Operating under the limited state of siege that began on 13 June, he has imposed economic sanctions on several businesses that defied his emergency decree freezing prices and wages. Pa- checo's choice of targets, which included high mark-up credit out- lets, appears calculated to gain the support of the general public. He still lacks formal legislative approval for his emergency secu- rity measures, but he apparently has the tacit support of the ma- jority of congressmen, including several leaders of the opposition Blanco party. Communist leaders are again fearful that their party may be Several minor labor dis- s have occurred this week and the embassy reports that the Communist-controlled labor con- federation has planned for an "undeclared" general strike to begin about midday on 11 July. The government has given no indication that it plans to lift the limited state of siege, but Pacheco will probably make some wage adjustments within the con- text of his tough Policy line. SECRET 25X1 25X1 Approvec4g$6Rejc ase L1 1b -pP79 p992,7A10Q 25X1 Approved For Release 2007/03/13 : CIA-RDP79-00927AO06500060001-6 Approved For Release 2007/03/13 : CIA-RDP79-00927AO06500060001-6 Approved Fbr Release 2007/03/13 : CIA-RDP79-009006500060001-6 Secret Secret Approved For Release 2007/03/13 : CIA-RDP79-00927AO06500060001-6