THE SHAH OF IRAN AND HIS POLICIES IN THE AFTERMATH OF THE ARAB-ISRAELI WAR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00826A002400140001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 9, 2016
• Document Release Date: March 5, 2001
• Sequence Number: 1
• Publication Date: August 18, 1967
• Content Type: IM

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Secret
No Foreign Dissent
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
The Shah of Iran and His Policies
in the Aftermath of the Arab-Israeli War
Secret
24
18 August 1967
No. 1379/67
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WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP 1
EXCLUDED FROM AUTOMATIC
DOWNGRADING AND
DECLASSIFICATION
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
18 August 1967
The Shah of Iran and His Policies
in the Aftermath of the Arab-Israeli Wcr
(Addendum to Intelligence Memorandum 1117/67, 5 June 67)
Summary
The Shah of Iran will arrive in Washington on
22 August for a brief official visit. His visit was
originally scheduled for 12 June but was postponed
when the Arab-Israeli war broke out. Although Iran
publicly voiced support for the Arab cause,, Iran's
ties with Israel were not affected and most Iranian
officials were privately delighted by Nasir's humiliat-
ing defeat.
The Shah has not modified his conviction that
the.Egyptian:president poses the most serious long-
range threat to Iranian security, and he will continue
to press for favorable prices and terms on US mili-
tary equipment to bolster his defenses in the Persian
Gulf. Staunch Soviet support for Egypt and other ra-
dical Arab states appears to have resulted in a note
of caution in Soviet-Iranian relations, and rapproche-
ment is likely to proceed at a reduced pace.
Note: This memorandum was produced solely by CIA.
It was prepared by the office of Current Intelligence
and coordinated with the Office of Economic Research,
the Office of National Estimates, and the Clandestine
Services.
No Foreign Dissem
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Iranian Relations with the Arabs
1. Despite their pleasure at the defeat of
Egypt and the radical Arab states, Iranian offi-
cials felt. compelled to voice public support for
the "legitimate rights" of the Arab people. The
Shah had taken great pains to improve Iranian re-
lations with the moderate Arab states such as Kuwait,
Jordan, and Saudi Arabia, and with Iraq, and did
not want to endanger these ties. The Shah nonethe-
less retains considerable sympathy for as well as
unpublicized ties with the Israelis, although he is
concerned over what Israel's victory may mean for
the future of Jordan's King Husayn.
2. Iranian oil flowed to the West at an in-
creasing rate both during and after the hostilities.
Iranian oil is still also being shipped to Israel.
Arab diplomats who pleaded with Iran to join the
oil boycott of Britain and the US were told that
Iran could do nothing which would endanger revenues
crucial to its development programs. The Shah is
delighted, of course, by the increase in oil revenues
the crisis has brought and sees a vindication of his
previous argument to the oil companies that their
best prospects lay in stable Iran rather than the
volatile Arab countries. Iranian officials will be
disappointed indeed if a high level of oil sales is
not maintained.
3. The Shah remains convinced-that Egypt's
President Nasir is the greatest threat to Iranian
security, although he acknowledges that the threat
Dur-
is now less imminent than it might have been.
ing the past two months
,
' has un-
5X1 C
covered evidence that the Egyptians are engaging in
small-scale organizing among Khuzistan Arabs in Iran
to promote subversion and sabotage. In early July,
25X10 three Iranian Arabs carrying plastic
exp osives. They were given the explosives by the
Egyptian consul in Basra, Iraq, and told to blow up
the pumps on any accessible oil lines. In late June,
25X10 a variety of explosive devices--
apparently also supplied by the Egyptian consul--
intended for use in the sabotage of oil installations.
No Foreign Dissem
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These disclosures certainly will make the Shah even
less willing to listen to suggestions that he go
slow on his military build-up in the Persian Gulf
area.
25X1 C
4. There is also evidence that Iran plans to
take advantage of Egypt's defeat to step up its clan-
destine aid to the Yemeni royalists. 25X1C
an Iranian military delegation
went to au i Ara is in early August to negotiate
the details of a program of increased assistance in-
cluding training and supplying arms to the royalists.
Some arms may have already been shipped to the roy-
alists.
5. Incidents of banditry and violence in Iranian
Kurdistan along the border with Iraq have become more
numerous recently. The incidents apparently are
staged by a small group of Iranian Kurds who had been
living in Iraq and were sent back to Iran with the
connivance of Iraqi authorities. Earlier reports
had noted the formation of a new Kurdish party, based
in Iraq, which aimed at greater autonomy for Iranian
Kurdistan. Financing reportedly comes primarily
from Iraq but also from Egyptian security agents.
It may be that the Iraqis intend to cause trouble in
Iranian Kurdistan as a riposte to the assistance
25X10 which has given to Iraqi Kur-
dish dissidents.
Iranian-Soviet Relations
c. Prime Minister Hoveyda's report of his visit
to the USSR from 19 to 28 July strongly indicates
that both the Iranians and the Soviets are taking
a more cautious approach toward new economic involve-
ment. Except for an agreement to hold regular eco-
nomic conferences at the ministerial level, no new
substantive agreements were reached. The Soviets did
not even mention the proposal for a second Iranian-
Soviet gas pipeline, for which they reportedly had
pressed so hard during a high level meeting in April.
Soviet oil exploration in southern and western Iran
was discussed, but no decisions were reached. The
No Forei n Dissem
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communique issued at the close of Hoveyda's visit
was described as "the lowest common denominator."
7. The prime minister reportedly commented on
his return to Tehran that if his visit had taken
place before the Middle East crisis, the Shah would
have been much more inclined to negotiate for and
accept heavy Soviet economic investments in Iran.
Because of the Shah's increased= awareness of Soviet
aims in the area, Hoveyda said, his government must
carefully evaluate new Soviet economic projects to
be certain that Iran will not become overly depend-
ent on the USSR. Hoveyda speculated that heavy So-
viet commitments in the Middle East may explain Mos-
cow's reluctance to make new investments elsewhere.
There is no indication that'the Shah intends to
abandon his new independent foreign policy, but rap-
prochement with the Soviets may proceed at a some-
what reduced pace.
The Ramsar "Summit" Conference
8. On 29 and 30 July the Shah was host to
Turkish Prime Minister Demirel and Pakistani Presi-
dent Ayub Khan at Ramsar, a Caspian Sea resort. The
three CENTO members had been drifting apart in the
prior two months, largely because of Pakistan's all-
out support for the Arabs and its scuttling of a
CENTO foreign ministers' meeting scheduled for mid-
July. From all appearances, the discussions were
frank, cleared the air, and reestablished some un-
animity. The Shah and Demirel reportedly criticized
Pakistan's negative attitude toward CENTO, and forced
Ayub to admit that he had no better alternative. The
final communique mentioned continued support for
existing security arrangements.
Elections
9. On the Shah's home front, parliamentary elec-
tions held on 4 August produced an overwhelming ma-
jority for the ruling "Iran Novin" Party. Although
there was a choice of candidates in many constituencies,
all candidates were hand-picked by the government and
No Foreign Dissem
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there were no real contests, Within these limits,
the elections. seem to have been honest, and there
was little pressure on the voters. The most
significant development was the improved quality
of the candidates. The elections, which were
marked by public apathy, will have no effect on gov-
ernment policies.
No Foreign Dissem
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 Memo Control Form SECRET/NO FOREIGN DISSEM
Ap'prc ved For Rele bt- MT00 A002400140001-4
^ NOTICE NO 87-67 X COVER SHEET [ DISSEM AUTHORIZATION
MEMO NO 1379/67 DATE 18 Aug 167 Due D/OCI Review
Dates: Dissem 18 Aug 67
SUBJECT: The Shah of Iran & His Policies in the Aftermath of the
Arab-Israeli War
REQUESTED OR ORIGINATED BY: DDP/NE
PURPOSE: To provide background for the Shah's visit to Washington
scheduled for 22 August
ASSIGNED TO: GTI GRAPHICS NOne COORDINATE
OUTSIDE OCI OER, ONE, DDP
25X1A
DISSEMINATION 25X1 A
^ Preliminary (DDI, D/OCI, and their staffs
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Cat. E (Routine internal and external) Release to DDI Reps Abroad
Cat. D (Routine internal CIA only)
Cat Y Subc bet a i ternal OBSOLETE
a#? fI~~.E'lQl~rr l p~$f~ ~ ~~~~dd~~t~e+6'dAGfRDP79TO0826A00 2=WO C_QT ,US
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OCI SiA!4, -l P.tliei~ Notice No. v"7-6-7 Control No. 1570167
Tn'o ha o I -A'a His o f o $. s
SUBJECT r Zorna ,sh o the. Arab-larav-1i War Date 2 .` ;u i. 1967
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S E C R E T
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18 August 1967
Talking Paper for Memorandum, "The Shah of Iran and His
Policies in the Aftermath of the Arab-Israeli' War"
1. The memo, requested by CNE/DDP, is an addendum
to one published 5 June in anticipation of the Shah's
scheduled visit to the US on 12 June. That visit was
postponed because of the Middle East war and is now to
come off on 22 August.
2. The memo focuses on how the war has affected
the Shah's policies. It makes the following points:
--Iran's ties with Israel are intact even though
Tehran publicly gave vocal support to the Arabs.
--Iranian officials were delighted with Nasir's
lambasting.
--The Shah still regards Egypt as threat number
one and will still push'the US for good prices
and terms for military aid.
--Both Iran and the USSR are more cautious in
their rapprochement and its pace is likely to
slow down.
3. The piece received full Agency coordination.
Recommend it receive the same distribution (Category E)
as the one of 5 June.
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S E C R E T
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