NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029200010042-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 23
• Document Creation Date: December 20, 2016
• Document Release Date: August 4, 2005
• Sequence Number: 42
• Publication Date: August 25, 1976
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE 0
Wednesday August 25, 1976 CI NIDC 76-200C
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National Intelligence Daily Cable for Wednesday Auaust 25. 1976.
e Cable is for the purpose of informing
senior officials.
CONTENTS
LEBANON: Situation Report
KOREA: Situation Report
CYPRUS: Intercommunal Talks
EGYPT: Development Fund
SOUTH AFRICA: Work Boycott
GUINEA-BISSAU - USSR: Relations Cooling
FRANCE : Cabinet Shuffle
MEXICO: Lopez Portillo's Approach
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INTERNATIONAL GOLD: Price Declines
NEW ZEALAND: Labor Unrest
IRELAND: Emergency Legislation
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LEBANON: Situation Report
Negotiations are still going forward in an effort to
arrange a Palestinian withdrawal from the Mount Lebanon area
and an end to indiscriminate shelling in Beirut.
The leftist radio announced yesterday that an agree-
ment to stop the shelling had been reached through the com-
mander of the Arab League peacekeeping forces, General Muhammad
Ghunaym. Several previous agreements were ignored by the com-
batants; we have seen no word from the Christian side, and have
no information on the leaders or groups supposedly subscribing
to the latest accord. Shelling did ease slightly in Beirut yes-
terday.
After a meeting with Christian extremist Camille
Shamun, Ghunaym announced that a meeting of representatives of
all sides will be held on Friday to take up a new cease-fire
formula prepared by the peacekeeping forces. Earlier Christian
proposals, brokered by Ghunaym, were flatly rejected by leftist
leader Kamal Jumblatt.
A Lebanese newspaper has reported that Syrian Foreign
Minister Khaddam, at a meeting with Palestinian representatives
in Damascus, has put forward a number of demands. These include:
--Palestinian withdrawal from Mount Lebanon.
--An end to propaganda attacks against Syria.
--Participation of pro-Syrian leftists in negotiations.
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--Formation of a four-party committee that could supervise
a cease-fire.
The Palestinians refused to withdraw from the moun-
tains east of Beirut without additional concessions. They de-
clared that they had already stopped propaganda attacks against
Syria, that the Syrian-Palestinian agreement of July 29 did not
provide for participation by pro-Syrian leftists, and that
Syria--not the Palestinians--has obstructed the convening of a
four-party meeting.
I iSyria would welcome a unilateral Palestinian with-
drawal from leftist strongholds in the Mount Lebanon area. A
major Christian offensive there--presumably with Syrian sup-
port--might coincide with an eventual Arab League summit meet-
ing. In that case, it might goad Arab leaders into adopting
resolutions that would handicap Syrian operations in Lebanon.
Eight of the necessary 11 countries have officially
notified the Arab League of their willingness to attend a sum-
mit to discuss Lebanon and several other members have announced
that they support the move. Lebanon agreed yesterday. No date
or place is likely to be announced before the Arab League for-
eign ministers.meet on September 4 to prepare an agenda.
The leftist radio reported yesterday that major Chris-
tian attacks on two positions in leftist-held West Beirut--one
in the commercial center and another on the confrontation line
dividing the city--were beaten back late Monday. The Christian
radio has made no mention of the assaults, but did report heavy
fighting along the confrontation line.
There was intense artillery fire in Kfar Shima
southern suburb east of the Beirut airport;
Kfar Shima has been declared a "military zone"
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KOREA: Situation Report
I The situation along the Demilitarized Zone in Korea
remains quiet. No significant political or military developments
have been reported.
As of 0100 this morning, we had received no informa-
tion on the meeting today of the Military Armistice Commission.
I I
The division on Cyprus is becoming more rigid and the
movement for a unilateral declaration of independence by the
Turkish Cypriots is gaining momentum. Prospects for reviving
the stalemated Cypriot intercommunal talks continue to be
bleak.
Following their failure earlier this summer to con-
vene another round of intercommunal talks, UN officials have
sought to keep alive the dialogue by resuming humanitarian
talks. They hoped that procedural and even substantive aspects
of political questions might be covered in such a framework.
I I The Greek Cypriots have agreed to the humanitarian
talks but have refused to broaden those talks to include dis-
cussion of substantive political problems. They-feel that doing
so would remove the Cyprus issue from the international lime-
light and reduce pressure on the Turks to make concessions.
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I I The Turkish Cypriots are reluctant even to partici-
pate in humanitarian talks, which they believe would be ex-
ploited for domestic political purposes by President Makarios
and used to tarnish the Turks' international image.
25X1 I I Makarios' stinging attack against the Turks at the
nonaligned conference last week dealt another setback to ef-
forts to revive negotiations. Makarios' remarks drew a bitter
rebuttal from Turkish Cypriot leader Denktash, who was denied
a hearing at the conference. Denktash had hoped that the sup-
port shown for the Turkish Cypriot position at the Islamic For-
eign Ministers Conference in Istanbul last spring would be re-
flected in Colombo, but the conference instead adopted a reso-
lution strongly supporting the Greek Cypriots.
quiesced in Greek Cypriot use of the entire area.
Other complications include the continued mass exodus
of Greek Cypriots from the north, as well as the potential for
a flare-up along the cease-fire line. The Turkish side is lay-
ing claim to half of the neutral zone after having earlier ac-
The preoccupation of the Greek and Turkish govern-
ments, meanwhile, with their dispute over the Aegean continen-
tal shelf has left them unable or unwilling to take any initia-
tives on Cyprus or to serve as a restraining influence on their
Cypriot kinsmen.
ber 5 and with presenting their case before the UN General As-
sembly this fall.
Left to themselves, the Greek Cypriots are likely to
remain preoccupied with the parliamentary election on Septem-
The Turkish Cypriots, for their part, have been buoyed
by the economic recovery of their sector and once again are
talking of independence for Turkish-held Cyprus, with October
29--Turkish independence day--mentioned as a possible date.
Denktash's advocacy of such a move was endorsed last week by
visiting Turkish Interior Minister Asilturk. Asilturk is a mem-
ber of the National Salvation Party, the main advocate of Turk-
ish Cypriot independence within the coalition government in
Ankara.
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Turkish Prime Minister Demirel seems to be strongly
opposed to Turkish Cypriot independence because it would com-
plicate Turkey's relations with its allies and the Soviet Union,
as well as with Greece. Still, an intensification of the Aegean
dispute or additional setbacks in international forums could
persuade Ankara to permit Denktash to declare independence.
Alternatively, Denktash and Turkish supporters of
Turkish Cypriot independence could exploit nationalistic fer- 25X1
vor that might accompany a worsening of Greek-Turkish relations
to take the initiative in declaring a second Turkish Republic
an action that would be difficult for Demirel to reverse.
EGYPT: Development Fund
Arab finance ministers, meeting in Cairo last week to
I
approve the $2-billion development fund for Egypt, also agreed
to provide Cairo with balance-of-payments support this year.
I I Egypt faces a balance-of-payments gap of at least $1
billion in 1976. The Arab ministers agreed to treat this short-
term need through a separate guarantee, but we do not know the
amount.
The guarantee is particularly important because OPEC
money available so far this year falls short of Egypt's cash
requirements. Earlier pleas for additional cash brought no re-
sults. We have no information on how much, if any, cash aid will
be disbursed from the development fund.
I The new development fund will be used mainly to attract
additional financial participation for development projects under
Egypt's proposed five-year plan. Although the fund is expected
to generate a far larger capital flow than the $2 billion com-
mitted, it probably will fall short of the $10 to $12 billion in
Arab financing that Cairo hoped to attract over the next five
years.
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SOUTH AFRICA: Work Boycott
The work boycott in Soweto, South Africa, continued
yesterday.
Worker absenteeism apparently was less than on Mon-
day, but the US consul in Johannesburg believes the boycott
will continue for a third day.
GUINEA-BISSAU - USSR: Relations Cooling
I I Relations between Guinea-Bissau and the USSR may be
coo ing, according to the US embassy in Bissau. Relations between
the two countries have been close since Guinea-Bissau received
independence from Portugal in September 1974. Moscow supported
the ruling party's insurgency against Portugal.
According to the embassy, Soviet personnel no longer
enjoy complete freedom of movement in the country, and their
contacts with trade unions and youth organizations are subject
to the same monitoring imposed on other foreigners in the coun-
try.
I I The government has also publicly expressed its dis-
satis action with the fishing agreement it signed with Moscow
a year ago and is demanding that it be renegotiated.
I Guinea-Bissau apparently is unhappy with the share it
is getting from the Soviets' extensive fishing activities in the
area. President Cabral also recently publicly accused the So-
viets of maintaining too slow a pace in training local fishermen.
A delegation is in Moscow discussing the fishing agreement.
There are unconfirmed reports that government leaders
recently held a heated debate over the value of Guinea-Bissau -
Soviet cooperation, with some charging that cooperation with
Moscow benefits only the USSR. The Chinese and Egyptian embassies
have been privately warning the government that the Soviets are
not trustworthy.
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I Since Guinea-Bissau's independence, the Soviets have
attempted to expand their ties through military aid deliveries,
the fishing agreement, a consular convention, and the establish-
ment of regular Aeroflot service to Bissau.
viets in the country--primarily centered around the capital--
indicating that the Soviets are still in a preferred position.
Most Soviets are engaged in military assistance and commercial
fishing activities. Moscow announced last week that a Soviet
destroyer will call at Bissau later this month.
The embassy notes that there are some 300 to 400 So-
The embassy believes however, that any request by the 25X1
Soviets o use Bissau's facilities for military purposes such as
reconnaissance flights would not be readily granted. We have no
indication that the Soviets have made such a request.
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The Israeli government last week forcibly turned back
several attempts by the ultra right-wing Gush Emunim and other
militantly conservative Jewish groups to establish a synagogue
in the former Jewish quarter of Hebron on the occupied West
Bank.
25X1 I I The Gush was attempting again to dramatize its long-
standing demand that Jews be allowed to settle freely on the
West Bank.
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I I Although the government permitted a group of Jews to
settle dust outside Hebron several years ago, it has refused to
let them rebuild the old Jewish quarter of the city for fear of
provoking a violent reaction from the town's Arab majority.
I J At Sunday's cabinet session, Defense Minister Peres,
the cabinet official who is responsible for administering the
West Bank and has long supported the Gush, strongly criticized
the group's actions at Hebron. He believes they might provoke
renewed anti-Israeli demonstrations in the occupied territory.
I This is the first time Peres has publicly criticized
e us . His remarks probably reflect his concern for preserv-
ing order on the West Bank rather than a decision to break ei-
ther with the Gush or its cabinet supporters.
The government is still wrestling with another prob-
lem crea ed by the Gush last December. At that time, Prime Min-
ister Rabin, to avoid a cabinet crisis, agreed to allow members
of the organization bent on establishing a settlement in the
Arab heartland of the northern West Bank to stay temporarily at
Qadum, an army camp in the area.
I I In May, the cabinet decided that the government alone
a e authority to select settlement sites and that the Gush
settlement must be moved elsewhere, preferably away from heav-
ily Arab-populated areas. Negotiations over possible alternative 25X1
sites, however, have since bogged down because the Gush settlers
have refused to move until the government agrees to allow unre-
stricted Jewish settlement on the West Bank.
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French President Giscard is expected to an-
nounce a "fairly large-scale" cabinet shuffle after the cabi-
net's weekly meeting today.
Chirac met with Giscard on Monday, but we do not know
the result of these talks
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There seems to be general agreement among political
o servers in Paris that the Prime Minister will be replaced.
Speculation about a successor has not centered on any one per-
son, although Finance Minister Fourcade is the latest favorite.
Fourcade is a technocrat not associated with any party and has
never run for office.
The President originally chose Chirac for the post in
the hope that he would revive the Gaullists and secure their
support for Giscard's planned reforms and their acquiescence in
an eventual center-left government. Chirac has succeeded in his
first task, but has never been fully in agreement on the others.
I IChirac's departure will not precipitate any action
by the Gaullists that could cause early elections. Like the
other members of the governing coalition, the Gaullists realize
that the left alliance would probably win if legislative elec-
tions were held now.
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JAPAN: Pressure on Miki
g
Miki and his two leading rivals, Deputy Prime Minister Fukuda
and Finance Minister Ohira.
A special caucus of the ruling Japanese Liberal Demo-
cratic Party yesterday deferred passing a no-confidence motion
a ainst Prime Minister Miki pending further talks today between
So far Miki continues to stand his ground, citing
popular support for his commitment to stay on. His supporters
claim he would not accept a no-confidence motion by the party
caucus.
Fukuda and Ohira hope that the prospect of a no-confi-
dence vote--a virtual certainty if the anti-Miki forces decide
to press the issue in the caucus--will induce Miki to step aside
voluntarily. Fukuda and Ohira met separately with the Prime Min-
ister last week, and held a 90-minute session with Miki yester-
day. They agreed to continue talks today.
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Miki's refusal to abide by the party's action would
leave him little room for maneuver. Most of his cabinet minis-
ters would resign and he would face the threat of a cabinet
crisis if he should attempt to convene the Diet later this
month.
MEXICO: Lopez Portillo's Approach
I President-elect Lopez Portillo is taking a hard look
at Mexico's economic and social problems and appears to be
planning approaches quite different from those of President
Echeverria.
Among the problems worrying Lopez Portillo as he pre-
pares to assume the presidency on December 1 are growing pov-
erty, stagnating food production, exploding population growth,
labor unrest, and a business community alienated by the rhet-
oric and policies of the incumbent president. We believe he
will be likely to seek closer relations with the US in order
to cope with these problems.
Lopez Portillo hopes that he can cure some of Mexico's
ills by regaining the confidence of the private sector. He
wants to make sure that Mexico's good reputation in interna-
tional financial circles, which has slipped somewhat under
Echeverria, is restored. Stopping the flight of capital and
attracting more foreign investment and tourism will be a prime
goal.
I Lopez Portillo believes that the problem of food
production can be helped by taking a more realistic stand on
land reform. He plans to end the distribution of land to peas-
ants, with a few exceptions. The land invasions by peasants
that have occurred with regularity in the past year are lower-
ing agricultural production and creating a political force op-
posed to the government.
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Lopez Portillo sees problems ahead for continued gov-
ernment control of the labor movement. Over the past several
months, a dissident electrical workers union has been testing
this control by trying to break out of the government-run labor
confederation. Last month Echeverria had to use the army to
prevent a nationwide strike led by the dissidents. Lopez Por-
tillo probably expects to confront even harder tests that could
put the government's long-time labor dominance in jeopardy.
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I I The price of gold fell yesterday in London to a 32-
month ow of $104.80 an ounce. Traders cited concern over the
impact of the third International Monetary Fund gold auction
scheduled for September 15 as the main factor in the recent de-
cline.
I I Gold prices began to fall following the first IMF
auction on June 2 and broke sharply the day after the second
auction on July 15, dropping nearly $14 in three days to $107.75.
The decline mainly reflects the increase in gold supply as a
result of the auctions, a higher level of Soviet gold sales,
and an increase in production in South Africa.
Press
reports that the IMF will change bidding techniques at the next
auction have spurred fears that the Fund will be forced to dis-
count gold substantially below the market price to sell the 24
tons scheduled for auction.//
//New Zealand has strengthened labor legislation
in an effort to curb increasingly disruptive strikes, allegedly
organized by the antigovernment Socialist Unity Party.//
//The new legislation was rushed through Parlia-
ment on August 17. It allows employers to suspend nonstriking
workers when they cannot perform their jobs because of strikes.
As a partial concession to labor, the government has broadened
a freeze on wages to include prices and rents.//
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//Labor unrest has risen since last May when the
Muldoon government initiated a one-year wage freeze designed
to slow inflation--now running at a 19 percent annual rate. In
protest, the unions have resorted to "rolling strikes"--alter-
nating groups of workers refuse to work, thus stopping an in-
dustry for several days although only one day's wages are lost
for any one group of workers. Disruptions have been especially
serious in the transport, engineering, and pulp and paper in-
dustries.//
//The government's latest action will probably
bring government-labor relations to a new low. Although labor
has responded favorably to the freeze on prices and rents, it
is highly critical of the new labor legislation. The radical
teamsters' union has already announced plans for a nationwide
strike on Sunday. F7 I
IRELAND: Emergency Legislation
The Irish government last night announced it will in-
troduce new legislation designed to curb Irish Republican Army
activities in the republic. The government will ask a special
session of the Dail--scheduled to open August 31--to declare a
state of emergency and suspend the constitution to allow the
enactment of stiff new laws.
The draft emergency powers bill would give the police
and military sweeping new powers of search and arrest and,
among other provisions? increase the maximum penalty for member-
ship in the IRA from 2 to 7 years.
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