NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029100010006-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 20, 2016
• Document Release Date: March 17, 2006
• Sequence Number: 6
• Publication Date: July 3, 1976
• Content Type: REPORT

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NATIONAL TNTF.T,LTGENCE DAILY CABLE
tur-day j ly_3.7--4 76 CI NIDC _76-156C
State Dept. review completed
w
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
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National Intelligence Daily Cable
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The NID Cable is for the purpose of informing
senior officials.
I I Tall Zatar refugee camp in east Beirut is still holding
out despite heavy attacks by Christian forces early yesterday.
The Christian offensive was slowed by a Palestinian relief col-
umn that has moved to within 2 kilometers (1.25 miles) of Tall
Zatar.
Phalangist forces reportedly have offered safe passage
to the eftist-Palestinian lines for anyone choosing to surrender
They say they have taken some 300 prisoners, but the US embassy
believes the figure to be closer to 100.
I Violent fighting--including heavy bombardments and
hand-to-hand combat--continued yesterday along the city's demar-
cation lines and in all of Beirut's northeast and southeast
suburbs.
more violence by extremists on both sides. Radical Christians
are saying that the remaining refugee camps will be stormed one
by one until the last Palestinian redoubt is taken. The Pales-
tinians are vowing to retaliate. We have no information on
specific targets; thousands of Christians live in Muslim-con-
trolled areas of the city.
The fall of Tall Zatar will probably touch off even
I The West German embassy in Beirut has announced plans
for an overland convoy to Damascus on July 4. As of yesterday,
some 32 Americans and alien dependents had signed up.
The protracted battle of the camps has prompted yet
another pan-Arab effort to stop the bloodletting. Arab League
Secretary General Riyad and two Arab foreign ministers arrived
in Beirut yesterday--a day later than scheduled--and immediately
began meeting with Christian leaders. As of midnight last night,
the Christians were apparently willing to re:specta cease-fire
provided all parties agree to adhere to the 1969 Cairo accords
that restrict the movements of the Palestinians within Lebanon.
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The leftists and Palestinians, according to a state-
ment by Riyad, have also agreed to a cease-fire but have not
responded to the conditions imposed by the Christians.
//The hardening Christian position will com-
plicate any negotiations. The Arab League peace-keeping forces
are not likely to accomplish much toward a cease-fire. The
newly arrived Saudi and Sudanese contingents are apparently
huddled in the Beirut airport area and have shown no disposition
to get involved in the fighting.//
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Sudan's President Jafar Numayri apparently has again
foiled an attempt by military plotters to oust him.
Small arms fire continued in Khartoum throughout the
evening hours yesterday, but forces loyal to Numayri have the
situation under control and are now conducting mopping up
operations in various parts of the capital.
Fighting erupted shortly after the Sudanese leader
returne early Friday from a three-week visit to the US and
France. Rebel strength appears to have been centered in an
armored unit based on the outskirts of Khartoum.
Tanks and armored personnel carriers attacked the
presidential palace, army headquarters, and the airport. Fight-
ing apparently was heavy in some parts of the city.
We do not know the identity or political views of
those behind the coup attempt.
Although fierce fighting took place in the vicinity
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I IChinese Nationalist military authorities reported
-1 that Chinese forces on the mainland this morning fired 122-mm.
field artillery at a small uninhabited island just west of the
Nationalist-held island of Kinmen (Quemoy). The Nationalists
believe the 32 shells were registration rounds, suggesting that
more shellings are in store.
This is the first time in many years that the Chinese
nave tire live rounds at one of the offshore islands, although
they periodically fire rounds containing propaganda leaflets
toward Nationalist-held positions on Kinmen,
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//Moreover, the Nationalists discount the likeli-
hood of a Chinese attack against Taiwan at this time. They do
not completely rule out the possibility that the current exer-
cises could be a prelude to an eventual attack or invasion of
some of the Nationalist-held islands such as Kinmen or the
Pratas Islands.//
Peking doubtless recognizes the diplomatic risks,
especially with the US, that any attack on Nationalist terri-
tory would entail.
Despite the air and naval buildup, the Chinese do
not seem to be in position to threaten Kinmen Island, which
has a large number of Nationalist troops in strong defensive
positions. The Chinese, however, had sufficient forces to move
against the lightly defended Pratas Islands, even before the
recent buildup.
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On Thursday the Soviets fired an SS-7 ICBM into a
disputed area of the Barents Sea that is under negotiation be-
tween Moscow and Oslo to determine an eventual demarcation line.
I IThe Soviets had previously announced their intention
o tire missiles into the area between July 1 and August 10,
and there probably will be additional firings. At that time,
Norwegian officials said they viewed the missile-firings as So-
viet intentions to reinforce claims in the area and intimidate
the Norwegians prior to the next round of talks. There has been
no progress in the negotiations.
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Oslo is expected to make a demarche emphasizing the
threat to shipping and fishing interests posed by the firings.
The Norwegians will also urge that the Soviets exercise greater
restraint in an area that is the subject of ongoing bilateral
negotiations.
//This firing is the latest in a series of Soviet
military activities in the Scandinavian area that have worried
some of the Nordic countries. Last month, naval forces from the
USSR, Poland, and East Germany harassed Danish naval exercises
in the Baltic. Although such harassment is not unusual, these
incidents were more than usually blatant and may have been in
reaction to recent Danish legislation restricting the admit-
tance of foreign warships and aircraft to Danish territory.//
I //In February, Danish Defense Minister Moeller
warnea against Soviet air and naval operations near Danish ter-
ritorial waters, noting it was becoming increasingly difficult
to distinguish between "ordinary and extraordinary operations."//
//Both Norway and Denmark are showing increasing
concern over the large number of Soviet forces in the Kola
Peninsula. Even neutral Sweden expressed its concern earlier
this year when General Stig Synnergren, Sweden's supreme com-
mander, warned of a decline in NATO strength in northern Europe.
Synnergren said Warsaw Pact strength in the area was growing
faster than that of the Western Alliance and that the Pact's
military technology was overtaking that of NATO.//
//The development of off-shore oil leases and the
control of fish stocks through ever-widening economic zones
have increased interest in the waters around Scandinavia. The
exploitation of these resources in both the Baltic and Barents
seas could restrict to some degree the Soviet navy's unimpeded
access to the Atlantic.//
//This clearly has concerned the Soviets and they
may hope that some muscle-flexing will cause the Scandinavians
to rescind some of their regulations or tailor the off-shore
development to minimize the potential nuisance to Soviet naval
activities. At the same time, the Soviets also realize that the
political atmosphere in Scandinavia is such that even limited
signals will tend to undermine the kind of political inroads
Moscow is attempting to make in this part of Europe.//
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 --To increase the exchange of data on past incidents
to facilitate development of new methods to deal with
future acts.
--To swap information on tactics and training of internal
security forces.
--To exchange police personnel.
--To promote direct police contacts for dealing with air-
plane hijackings, nuclear security problems, and natural
and accidental disasters.//
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//EC interior and justice ministers this week
approved new measures to combat terrorism and other forms of
organized international crime.//
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//As a first step, the ministers agreed:
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//The ministers established a consultative mech-
anism among ministries responsible for internal security matters.
It will operate outside the EC treaty framework, however, in
part to meet French objections. In the past, France has opposed
efforts to place cooperative undertakings on internal security
matters--the protection of nuclear materials, for example--on a
Community basis since they essentially involve police functions
outside the EC's jurisdiction.//
//When the ministers meet again in a few months,
the West Germans and the British will probably push for approval
of an EC convention on terrorism. Bonn seeks an accord that
would provide for direct cross-border assistance in specific
situations and would define terrorist acts as non-political
crimes, making terrorists subject to extradition proceedings.
Efforts by Bonn to introduce a resolution at the UN this fall
condemning terrorism have failed to secure European support.//
//The treaty is not intended to replace Interpol,
which is not equipped to coordinate simultaneous international 25X1
action. Interpol is limited by statute to act only on non-
political offenses and would probably not be influenced by an
EC declaration that terrorist acts are non-political.
I
Polish Party leader Gierek, in a measured, concilia-
tory speech yesterday in Katowice, played down the seriousness
of last week's disturbances. In the nationally televised speech,
he implicitly admitted that his regime had made a mistake and
promised to consult extensively with workers before raising
consumer prices in the future.
I I If the party carries -through on its promise of genuine,
widespread consultations, it may eventually recoup some of its
authority. Gierek, however, risks an even further erosion of his
and the party's credibility if the promise proves empty and the
leadership persists in implying that the disturbances were minor
and that Polish workers have always been consulted.
Gierek alluded to the disturbances only by saying that
some deeply regrettable events occurred," adding that it is
"inadmissable and harmful" for workers to refuse to discuss dif-
ficult problems. His tone indicated that the regime will limit
its arrests of demonstrators to the most flagrant cases.
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For the most part, Gierek concentrated on the need to
raise prices. With regard to meat supplies, he said the regime
"is in no position to satisfy demand in full" and that to in-
crease production there must be a "correct shaping of the level
and structure of prices."
I In this context, Gierek said prices must be discussed
in the press and on radio and television. He added that he ex-
pects the discussions to be "frank and open" and to produce
specific, constructive proposals. Gierek also said that on the
basis of these discussions, the government would work out a
."modified conception" of the price changes that would be pre-
sented to the people "in due time." That presentation probably
will not occur until this fall when parliament reconvenes.
Shopkeepers in Budapest have told US embassy officers
that the price increases on meat, originally slated for imple-
mentation last Thursday, will now go into effect Monday. Details
of the price hikes reportedly will be published beforehand.
The slight delay in implementing the increases permits
the leadership to make a more thorough assessment of the public
mood, including reaction to the recent Polish riots.
The government said last November that pork and beef
prices would be raised by more than one third and that poultry
and fish prices would be increased by nearly 30 percent. Accord-
ing to the embassy, prices on the best cuts of pork may be in-
creased by almost 50 percent.
Hungary, unlike Poland, has gradually raised prices on
a number of consumer products without incident over the past sev-
eral years, most recently last winter. The Hungarian consumer has
generally resigned himself to these increases, but there has been
evidence of more grumbling than usual.
The government has planned since last November to re-
move some of the sting of its projected price hikes by simultane-
ously increasing certain wages and income supplements.
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//The Mexican government's chief concerns tomorrow,
preside ntial election day, will be to avoid an embarrassingly
low voter turnout and to head off any terrorist attempts to
disrupt the balloting. The outcome of the election is already
known. Jose Lopez Portillo, the candidate of the Institutional
Revolutionary Party that has governed without interruption for
47 years, is unopposed.//
//The government party's pervasive powers and
proven voter appeal would assure Lopez Portillo a six-year term
even if the election were contested. The only serious opposi-
tion group, the conservative National Action Party, could not
agree on a candidate in time to make the ballot. Two other small
parties, endorsed Lopez Portillo.
Also up or election tomorrow are o houses of congress and
one governor.//
//The 23rd of September Communist League has re-
cen ..y increased its terrorist activities and may try to inter-
fere with the election.
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Although the extremist
organization num ers only a ou mem ers, it has killed 20
policemen already this year and also kidnaped the Belgian am-
bassador's daughter. The government will take extensive secu-
rity precautions.
//Peru was quiet but tense yesterday follow-
ing urs ay s emonstrations and strikes. The disturbances
were more widespread than we first believed; at least nine
cities in addition to Lima experienced problems.
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I I The government acted decisively and apparently was
united in its determination to use force to suppress opposition
to its economic austerity measures. Troops have been authorized
to fire on curfew violators and some tanks and armored personnel
carriers were used last night to reinforce police patrols.
The most serious challenge to the government thus far
has been mounted by the nation's truck drivers, who agreed on
July 1 not to purchase gasoline, which has doubled in price.
This, in effect, constitutes a general strike and could cripple
the country since it is dependent on truck transport to move
goods. The drivers could force a roll-back in gasoline prices
if they remain unified.
I uIn an apparent attempt to reduce discontent over the
price hikes, the military government announced on July 1 that
it would double the subsidy on basic foodstuffs. The price of
basic foodstuffs will, nevertheless, rise substantially.
Whatever happens, President Francisco
Mora es Bermudez will suffer politically for the abrupt manner
in which the economic measures were implemented. //Government
leaders expect further strikes and demonstrations in the coming
days and they are concerned that communists and ultra-leftists
will attempt to take advantage of the situation.
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//The Brazilian government, faced with a deterio-
rating economic situation, most likely will have to modify its
risk contract terms in order to conclude contracts with foreign
companies to explore for oil.//
Of the 56 companies that have submitted applications
to explore for oil, 40 have qualified for participation in bid-
ding. So far, only eight companies and two consortiums have
taken the final step of buying the geological and geophysical
data on the 10 areas open to foreign exploration. No contracts
will be signed until the bidding ends on July 15.
I //Domestic economic concerns undoubtedly will be a
major ac or if revisions are made:
--Brazil imports 80 percent of the oil it uses--a major
cause of its serious balance-of-payments problems.
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--The state oil monopoly, Petrobras, lacks the capital to
undertake expanded exploration on its own.//
--The cost of imported petroleum continues to rise--in the
first quarter of 1976 Brazil imported 13.35 percent more
crude oil than in the same period in 1975.
//Discovery of oil in significant quantities would
Most e prestige of President Geisel's administration, which
has been groping for solutions to a worsening economic situation.
Geisel must move cautiously on contracts, however, to avoid a
politically damaging resurgence of criticism by nationalists
who fear foreign control over Brazil's oil industry.//
//Strong demand pushed the British pound to $1.80
at mi ay yesterday before it fell slightly at the close of
trading. Sterling has risen over 4 percent against the dollar
since the $5.3-billion credit line was announced on June 7.//
//A British treasury spokesman says that some draw-
ings have been made on the $5.3-billion international standby
credit since June 22. Bank of England statistics released yes-
terday indicate that British authorities spent well over $475
million on exchange market intervention during June. This does
not include the drawings against the standby credit. The Bank
of England has also been putting pressure on speculators through
market operations, driving up the interest rate on Europounds,
and increasing the cost of selling sterling in the forward
market.//
//Buying pressure on Thursday and early Friday re-
portedly was due to speculator purchases of pounds to cover
past short sales and to commercial demand to meet sterling pay-
ments that had been delayed in hopes of obtaining a better ex-
change rate. Market confidence in the British currency has been
boosted lately by the pound's relative stability over the past
month and by market rumors of a planned 1-billion-pound cut
in government spending next year.//
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//The pound's afternoon decline may be explained
in part by a 'report from some exchange dealers that the Bank of
England took advantage of its currency's recovery yesterday to
replenish some of its foreign currency reserves through ster-
ling sales.
Press reports indicate that one Arab boy was killed
and between 15 and 30 Arabs wounded by Israeli security forces
yesterday in Nabulus, the West Bank's largest town, during vio-
lent demonstrations staged against the Israeli government's de-
cision to increase taxes in the occupied territory.
The demonstrations represent a continuing protest by
West Bankers against the Israeli occupation. The new casualties
are likely to spark further, possibly violent demonstrations
throughout the West Bank in coming days.
I The renewed demonstrations ended a period of uneasy
ca m a had prevailed in the West Bank for the past five
weeks, The death of the ?grab boy brings to at least 10 the
total of West Bankers killed this year during anti-government
demonstrations.
on July 1, the government implemented an 8-percent
tax on most commercial transactions in Israel proper--part of
an overall tax reform measure designed to increase tax revenues.
The government does not plan to introduce the new tax on the
West Bank. However, it does intend to increase current taxes
in the occupied territory next month to guard against West Bank
businessmen gaining a competitive advantage over their Israeli
counterparts.
In protest against the impending tax increases, mer-
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Arab East Jerusalem, and several other West
ts in Nabulus
h
,
an
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Bank towns closed their shops on Thursday. Arab youths in Nabu-
lus mounted anti-Israeli demon,3tr.ations, burning tires and
setting up barricades. The protests subsided yesterday, except
Nabulus, where youths continued to agitate.
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