CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026300010001-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 15, 2016
• Document Release Date: May 12, 2004
• Sequence Number: 1
• Publication Date: March 29, 1974
• Content Type: REPORT

Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
Top Secret
Central Intelligence Bulletin
State Dept. review completed
Top Secret
C ?{ h
March 29, 1974
25X1
Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
 Approved For Re
026300010001-8 25X1
I
March 29, 1974
Central Intelligence Bulletin
WEST GERMANY: Defense Minister disheartened by se-
curity developments in Europe. (Page 1)
25X1
25X1
ISRAEL-SYRIA: Dayan reportedly has detailed proposal
for disengagement. (Page 3)
25X1
SYRIA-EGYPT: Meeting of Arab League Council reveals
growing differences between Cairo and Damascus.
(Page 7)
25X1
CAMBODIA: Additional forces committed to retaking
Oudong. (Page 13)
WEST GERMANY - SOUTH VIETNAM: Bonn agrees to a
$17-million aid package for South Vietnam. (Page 14)
25X1
CHILE-PERU: Boundary dispute could eventually in-
volve the US. (Page 16)
JAPAN: The yen continues to strengthen and indus-
trial production down only slightly. (Page 17)
FOR THE RECORD: (Page 19)
Approved For Re
25X1
 Approved For Re
lease 2004/07/08: CIA-RDP79T00975A026
WEST GERMANY: West German Defense Minister Leber,
discouraged by the continuing drift in Atlantic rela-
tions, is more than ever convinced that close US -
West German defense ties are vital for Germany's secu-
rity. Leber has taken a strong stand in the West Ger-
man cabinet sessions for "effective consultations"
with the US.
A senior Defense Ministry source reports Leber
is disheartened by the negative attitudes expressed
recently by the French toward European and Franco-
German defense cooperation, the likelihood of reduced
British defense efforts, and the slow progress in
NATO on defense cooperation.
During the Bundestag debate on national defense
issues on March 27, Leber rebuked Paris for its go-
it-alone attitude and stressed Western Europe's de-
pendence on the US and NATO. Leber's parliamentary
address came just two days after the French ambassa-
dor informed him that the Quai had vetoed proposed
Franco-German talks on the employment of French troops
in the Federal Republic. In addition, Leber had
recently received a report from the German Embassy in
London describing the new Labor government's plans to
reduce defense expenditures and to initiate a study
of possible British force reductions in the second
stage under an MBFR agreement.
Leber has persuaded the current Eurogroup chair-
man, Norwegian Defense Minister Fostervoll, to call
a meeting in early May for "stocktaking and planning."
Leber apparently plans to press for further steps to-
ward defense coordination and cooperation, but he has
privately expressed doubts about achieving success.
25X1
25X1
Mar 29, 1974 Central Intelligence Bulletin
Approved For R~
25X1
 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
 Approved For
ISRAEL-SYRIA: When Israeli Defense Minister
Dayan arrives in Washington today for talks with
Secretary Kissinger, he reportedly will bring a de-
tailed proposal for disengagement of Israeli and
Syrian forces.
According to the influential Israeli daily
Haaretz, Tel Aviv's proposal would include withdrawal
by Israel within the salient occupied during the
October war to a distance of about 15 kilometers.
Ten kilometers would be returned to Syria and UN
forces would occupy a five-kilometer area between
the Syrians and the Israelis. The Israelis would
retain a five-kilometer area within the salient.
Under this Israeli plan, forces within the
salient would be reduced, with a thinning out of
forces--especially artillery--to an additional depth
of 20 kilometers on each side. In the area south of
the salient where the 1967 cease-fire line still
divides the adversaries, a narrow no man's land would
be created with forces thinned out on either side.
According to Haaretz, POWs would have to be exchanged
before any withdrawal takes place.
The Israelis are aware that their proposal would
be unacceptable to the Syrians, who have insisted on
immediate Israeli withdrawal from all the territory
occupied last October as well as Israeli evacuation
of the town of Al-Qunaytirah, captured by the Is-
raelis in 1967. The Syrians have also publicly in-
sisted that an Israeli commitment to withdraw from
all the occupied territories is a precondition for
a disengagement agreement.
Israeli commentators note that Dayan does not
expect any concrete results from the Washington meet-
ing. Dayan himself, speaking to a United Jewish
Appeal group on March 26, said that agreement might
be reached "during the summer." According to the
US Embassy in Tel Aviv, the Israelis appear to be
Mar 29, 1974 Central Intelligence Bulletin
Approved For
25X1
25X1
 Approved For, - 026300010001-8
prepared to see negotiations with Syria drag out for
several months and may be looking for some softening
in the Syrian stand to move the process along.
Clearly, both sides will have to modify their ex-
treme positions if there is to be progress toward
disengagement.
The current confrontation along the Golan front,
now in its third week, has been primarily the result
of a Syrian initiative intended at least in part to
bring pressure for a settlement. The Israeli re-
sponse has varied widely. On several occasions they
chose not to return the Syrian fire, but in most
cases they took part in artillery exchanges until
the UN observers could arrange a cease-fire. Israeli
artillery, however, opened the heavy exchanges that
lasted some 14 hours on March 27.
It is unlikely that this action signifies an
Israeli intent to expand the confrontation or to be-
gin an offensive against the Syrian forces. The Is-
raelis probably do not view their initiative in the
engagement on March 27 as a significant escalation
of tension, but rather as a demonstration of their
strength and capability to respond in kind to a
confrontation created by Syria.
25X1'
Mar 29, 1974
Central Intelligence Bulletin
25X1
Approved ForiRelease 2004/07/08 : CIA-RDP79T00975AP026300010001-8
 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
Next 1 Page(s) In Document Exempt
Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
 Approved For R lease - 7OU7 300010001-8
SYRIA-EGYPT: Despite the verbal tributes to
Arab solidarity, the meeting in Tunis this week of
the Arab League Council revealed growing differences
between Damascus and Cairo.
Egyptian Foreign Minister Fahmi, who may not
have planned to attend the meeting, told the US am-
bassador in Cairo that Syrian Foreign Minister Khad-
dam's hard line prompted him to fly to Tunis on
March 27, two days after the session began. He
charged that Khaddam's aq.tivities seemed designed to
erode Egyptian-Saudi diplomatic efforts to bring
about disengagement on the Golan front and were also
intended to criticize the lifting of the oil embargo
as premature. After Fahmj's departure from Tunis,
Khaddam held a news conference in which he stated
that any military disengagement on the Syrian front
must be linked to a formal Israeli commitment to
evacuate all Arab territories occupied in the 1967
war and to recognize the rights of the Palestinians.
Syria also raised strong objections to the
Egyptian plan to postpone the Arab summit originally
scheduled for April. Damascus is anxious to get an
early public reaffirmation of Arab unity and support'
in order to ensure that other Arabs--especially Egypt
and Saudi Arabia--do nothing further to weaken
Syria's bargaining position, Khaddam apparently lost
this battle; it was announced yesterday that the
summit would be held in Rabat in September. The
council conceded, however, that Syria could convene
a summit at any time if it felt that the military
situation required an urgent meeting.
Mar 29, 1974 Central Intelligence Bulletin 7
Approved For RefIease 2004/07/08 : CIA-RDP79T00975A02P300010001-8
25X1
25X1
25X1
 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
Next 3 Page(s) In Document Exempt
Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
 Approved For
CAMBODIA: Phnom Penh Area
~._ Kompong
JChhnang
25X1
Approved For Release 2004/07/08 : CIA-RDP79T00975AI26300010001-8
 Approved For Re
CAMBODIA: The government is still determined
to retake Oudong and is committing additional forces
to the counterattack there. Eight Cambodian Army
battalions supported by artillery and armor are now
attacking from the east, and more infantry reinforce-
ments are en route from Phnom Penh.
Remnants of Oudong's garrison yesterday were
forced to abandon remaining positions on the town's
outskirts after Khmer Communist artillery set off
ammunition stocks. These troops and large numbers
of civilians are moving toward government lines a
mile east of the town. The confused situation is
hampering tactical air operations.
In the southwest, Communist forces have stepped
up their attacks against Kampot City in the past few
days. Although government casualties have been light,
some of the fighting has occurred within a mile of
the city. The army commander at Kampot believes
that the insurgents will soon try to close the nar-
row waterway vital to navy resupply operations.
Representatives of Sihanouk's "government"
abroad are being urged to exploit the capture of
Oudong.
25X1
25X1
25X1
25X1
Mar 29, 1974 Central Intelligence Bulletin
25X1
Approved For Rllease 2004/07/08 : CIA-RDP79T00975AP026300010001-8
 Approved Fo
WEST GERMANY - SOUTH VIETNAM: The West German
Foreign Ministry recently agreed in principle to an
aid package for South Vietnam, amounting to more than
$17 million. The agreement will be sent to Saigon
for final signature after clearance with the Bonn
government. If the package is accepted by Saigon,
discussions on specific projects could begin by mid-
summer.
Saigon has been seeking foreign aid aggressively
and has achieved only limited success. The Thieu
government is feeling the pinch of reduced real
levels of US aid and has been unable to proceed with
reconstruction and development projects.
Bonn's aid program to South Vietnam was first
outlined last fall when a West German delegation
recommended the $17-million package, mainly project
assistance. Projects considered then included agri-
cultural mechanization, rice storage units, and water
and electricity systems. Although the terms of the
aid package were not specified, it is most likely
that Bonn will provide a 30-year untied loan at a
low interest rate. The German package will do little
in the short-run to solve Saigon's balance-of-pay-
ments problems, but it could nonetheless encourage
other potential aid donors to go ahead with plans
to provide economic assistance.
In contrast to the progress in its aid program
for Saigon, Bonn is still withholding assistance
from North Vietnam, largely because of Hanoi's con-
tinuing violations of the Paris accords as well as
its demands for recognition of the PRG. Hanoi's
intransigent attitude has been a major obstacle to
its prospects for non-Communist aid, discouraging
every major potential non-Communist donor except
Sweden from providing a significant amount of recon-
struction assistance.
Mar 29, 1974 Central Intelligence Bulletin
14
25X1
Approved For Pelease 2004/07/08 : CIA-RDP79T0097gA026300010001-8
 25X1 Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
 Approved For 026300010001-8 25X1
CHILE-PERU: The territorial dispute between
Chile and Peru could involve the US under the terms
of a 1929 treaty that demarcated their boundary and
formalized the results of the War of the Pacific.
The treaty provides for the settlement of disagree-
ments over interpretation "by the President of the
United States."
The Peruvian military has long pledged to recover
the territory it lost in the war of 1879 before the
passing of a century. Recent diplomatic and military
maneuvering by both sides attests to the seriousness
with which each views the possibility of eventual
armed conflict.
Peru suspects that Chile plans concessions to
landlocked Bolivia involving Arica, a port that once
belonged to Peru. Lima has reminded La Paz and
Santiago that a supplementary protocol to the 1929
treaty--which was made "an integral part" of the
treaty itself--prohibits Chile or Peru from ceding
any of the territory involved to a third power with-
out previous mutual agreement.
Chile is not planning to cede Arica to Bolivia
outright, but is considering converting the city into
an international free port. Such a move would be
intended primarily to deter aggressive Peruvian
revanchism. Peru almost certainly would challenge
a significant change in the city's status made
without prior consultation as a violation of the
treaty. The US might then be drawn into the con-
troversy.
The US is not a signatory to the treaty or the
protocol, but the Harding, Coolidge, and Hoover
administrations mediated between the parties and
the treaty's preamble notes that the accord was
concluded "in conformity with the principles which
the President of the United States of America, in
performance of the good offices requested by the
Parties... proposed."
Mar 29, 1974 Central Intelligence Bulletin 16
25X1
Approved For Pelease 2004/07/08 : CIA-RDP79T0097*026300010001-8
 Approved F
r Release 2(`1 "'1 j" 101 A j 0 ~ 9 : I C~ A, - lw~ A026300010001-8
JAPAN: The yen continues to strengthen and has
appreciated 10 percent against the dollar since the
upswing began two months ago. Some Japanese monetary
officials believe the yen could appreciate from its
present level of 273 yen to the dollar to 265 yen in
the coming weeks. Japan's continuing balance-of-
payments problems, however, make likely a weakening
thereafter.
An ample supply of dollars in the Tokyo money
market this month has resulted from a reduction in
net capital outflows and a strong export performance.
Japanese banks have been supplying fewer dollars to
overseas investors and the Finance Ministry's recent
relaxation of controls on capital inflows has yielded
about $150 million. The inflow reflects overseas
borrowing by industrial firms. In addition, a large
quantity of dollar export contracts have been sold
in the market, reflecting in part a speed-up of
exports in anticipation that dockworkers and seamen
will strike next month. Although the level of over-
seas borrowing is likely to remain high, exports may
slump next month following the unusual acceleration
in March.
Despite the favorable trends, the balance of
payments still will be about $500 million in deficit
this month. Both oil and non-oil imports are growing
rapidly and net long-term capital outflows, while
declining, remain large. In addition, Japan recently
has been running monthly deficits of $400-$500 mil-
lion in service payments. These foreign exchange
losses should begin to be felt by late April or
early May, leading to a. dollar shortage and a weak-
ening of the yen.
Industrial production last month was only
slightly lower than the level of the two previous
months and 9 percent above the level in February
1973. Production has not risen in the last three
months, because of oil conservation measures and
Mar 29, 1974 Central Intelligence Bulletin
Approved For Rolease 2004/07/08 : CIA-RDP79T00971
25X1
 Approved For
East Germany
Receives SA-3 Missiles
25X1
25X1
25X1
Approved For'2elease 2004/07/08 : CIA-RDP79T00975A0126300010001-8
 Approved For
some slowing in domestic demand. Demand remains
fairly strong in some sectors of the economy, however,
and the Bank of Japan announced Tuesday that credit
would remain tight during the second quarter of the
year. Credits extensions will be held to approximately
the same level as in the first quarter. The rise in
wholesale prices has been temporarily halted, but
recent price increases granted for petroleum s
will cause another jump in prices next month.
East Germany - USSR: The East Germans have
received their first SA-3 surface-to-air missiles
from the USSR and are positioning them near Rostock
on the Baltic coast. Previously, Czechoslovakia and
Poland were the only Warsaw Pact countries outside
the USSR to have these missiles. Soviet forces in
East Germany, however, have had the SA-3 system since
1968. Some of the Polish SA-3 sites are also located
along the Baltic. The East German SA-3s will pro-
vide defense against low-altitude attacks from the
Baltic Sea.
Africa: A delegation representing the OAU's
liberation committee left today for a three-week tour
of Communist countries, including China, North Korea,
the Soviet Union, and Romania. The delegation is
seeking increased assistance in preparation for the
committee's next meeting scheduled for mid-April in
Cameroon. The OAU reportedly agreed last January to
step up support for the rebels in Portuguese Guinea,
and the April meeting is expected to focus on imple-
menting that decision. F7 I
Mar 29, 1974 Central Intelligence Bulletin
25X1
25X1
25X1
25X1
25X1
Approved For Release 2004/07/08 : CIA-RDP79T00975A0126300010001-8
 25X1
Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8
Top Secret
Top Secret
Approved For Release 2004/07/08 : CIA-RDP79T00975AO26300010001-8