CENTRAL INTELLIGENCE BULLETIN

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E DAILY CABLE
Thursday 23 February 1978
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Nazions~~ Intelliaence Daily Cable for Thursday, 23 February 1978.
The NID Cable is for the purpose o in orming
senior US officials.
CONTENTS
EGYPT-CYPRUS: Relations Broken
ISRAEL: Settlement Politics
Page 1
Page 2
USSR-IRAQ-SOMALIA: Weaponry
USSR-VIETNAM: Cordial Visit
USSR-JAPAN: Bilateral Relations
USSR-CANADA: Diplomatic Signals
YUGOSLAVIA-USSR: Differences
LEBANON: Army Factionalism
Page
Page 6
Page 6
Page 7
Page 8
Page 9
CHAD: Crumbling Situation Report Page 11
Page 13
INDIA-US: Transshipping Wheat
Page 14
BRIEFS
Pakistan
Norway-UK
North Korea - USSR
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EGYPT-CYPRUS: Relations Broken
t announced yesterday the breaking of relations
E
gyp
with Cyprus and hinted at the possibility of further retalia-
tion for the killing of Egyptian commandos at Larnaca airport
on Sunday. President Sadat is bitter over Cypriot President
Kyprianou's "treachery," while those of his advisers who were
associated with planning the iZZ-fated commando raid reportedly
are trying to mask their own bungling.
President Sadat expressed his personal bitterness to
Ambassador Eilts yesterday at the funeral for the 15 Egyptian
commandos killed in the Larnaca incident. Sadat directed his
harshest remarks at President Kyprianou and raised the question
of collusion with the terrorists.
Sadat asserted that Cypriot leaders had shirked their
responsibility to oppose international terrorism and as a re-
sult had squandered Egypt's traditional support for Greek Cyp-
riots against Turkey. Such support, he said, could not be ex-
pected to continue. Other Egyptian officials have hinted that
Egypt might now be disposed to shift its support to Turkey in
the dispute over Cyprus.
The test of Cypriot intentions, according to Sadat,
is disposition of the two Palestinian terrorists. He again ar-
but for the first time indicated he would
ed for extradition
,
gu
be satisfied if Cyprus itself applied appropriate punishment
directly.
the Greek Cypriots have generally been
In the past
,
their treatment of terrorists. Egyptian pressure, along
i
l
n
ax
with the Cypriots' desire to retain Cairo's support against the
Turks, will probably prompt sterner handling of terrorists in
custody. There is at least a slight chance Nicosia might recant
and extradite the terrorists, especially if Egyptian pressure
remains intense. Greece, meanwhile, continues its effort to me-
diate the Egyptian-Cypriot dispute. The Greek Ambassador to
Cairo met yesterday with Deputy Foreign Minister Ghali to dis-
cuss the situation.
rime Minister Salim admitted to Ambassador Eilts
yesterday that he, in fact, had not specified to Cypriot offi-
cials that the Egyptian plane carried commandos when he sought
flight clearances. He insisted, nevertheless, that the Cypriots
understood Egypt's intentions.
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Sadat's anger toward Cypriot officials remains Sadat
o a meeting of those who had participated in the airport at-
tack that Cypriot forces should not have opened fire even if
permission had not been granted for the Egyptian operation.
Public anger against Palestinians is running high
,
probably fanned by press reports that members of the Palestine
Liberation organization participated in the fighting against
the Egyptian commandos. Despite PLO denials, we do have evidence
to suggest PLO involvement, perhaps inadvertent, on the side of
Cypriot National Guard units.
Near the end of the firefight between the Cypriots
and Egyptians on Sunday, US Embassy officials observed plain-
clothes, Arab-speaking personnel, presumably the PLO contingent,
mingling with Cypriot National Guard troops near the terminal
building at Larnaca. An embassy contact, moreover, claimed that
the Cypriot firing had been "abetted" by the PLO squad.
In view of Arafat's continuing efforts to keep open
his lines to the Egyptians, it is unlikely he would have author-
ized the Fatah group to participate in the fighting against the
Egyptians. It is possible, however, that they were drawn into
the fighting simply because of their presence on the scene at
ISRAEL: Settlement Politics
The Israeli Cabinet continues to try to resolve its
policy differences on future settlements, but it may be unable
to reach an agreed position when the cabinet addresses the
settlements question again this weekend. The US Embassy in Tel
Aviv believes that even if a policy decision is made, it will
not be made public. Whether Prime Minister Begin decides in
favor of proceeding with settlement activity, a general stand-
stilZ, or some middle course, the cabinet dissension that
emerged during Zast Monday's special session is likely to con-
tinue to bedevil him.
This week's first of two special cabinet debates on
settlement policy--the second will be on Sunday--has brought
these divisions more sharply into focus. Defense Minister
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Weizman has emerged as the chief spokesman for a more flexible
approach to negotiations, with Agriculture Minister Sharon the
leader of hard-liners in the cabinet on the settlements question.
Weizman, the leaders of the Democratic Movement for
Change, and the Liberal faction of Likud clearly favor a freeze
on settlement activity pending the outcome of negotiations with
Egypt. In pressing for a moratorium, they hope to improve the
atmosphere for talks with the Egyptians and undo some of the
damage that has been done to Israel's image abroad, especially
in the US.
Sharon, National Religious Party leader Hammer, and
hawks in the Laam faction of Likud, on the other hand, want to
accelerate the settlement process in the Sinai and. on the West
Bank as a hedge against any softening in the government's ne-
gotiating position. Foreign Minister Dayan is probably closer
to Sharon than to Weizman on this issue.
Begin, whose views will be decisive, thus faces
sharply divergent pressures. If he orders a standstill,'Sharon
could threaten to bolt the cabinet, splitting Begin's supporters
on the right. But if Begin supports a resumption of settlement
activity, it will.complicate his relations with coalition mod-
erates. Weizman and the Liberals, while unhappy, would not op-
pose Begin openly, but leaders of the Democratic Movement for
Change would be under strong pressure from doves in their own
party to challenge the government and even drop out of the co-
alition.
Begin can hardly be unaware that his government's
clumsy handling of the settlements issue has already seriously
complicated peace negotiations and hurt his own credibility
both at home and abroad.
Thus far, the Prime Minister has reserved his posi-
tion, a ough there have been Israeli press reports that he
may be leaning toward supporting a temporary freeze on new
settlement activity for tactical reasons. To avoid the appear-
ance of giving in to outside pressure and to mollify Sharon,
however, Begin may try to buy time by simply extending the
present suspension on settlement activity in the Sinai at least
until after his meeting with President Carter in mid-March.
Begin may allow completion of settlement activity already under
way on the West Bank.
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USSR-IRAQ-SOMALIA: Weaponry
The Soviets have been pressing Iraq for several
months to stop shipping small arms to Somalia, according to a
US defense attache source in Moscow.
Late last year, according to the source, the Soviets
informed the Iraqis that they must stop providing equipment to
Somalia and to Eritrean rebels in Ethiopia. Soviet military
deliveries to Iraq have reached record levels during the past
few years and, in view of Iraq's ability to purchase weaponry
in the West, particularly in France, it is unlikely that the
Soviets would follow through on any threat to cut back their
military assistance merely to stop negligible amounts of Iraqi
assistance to Somalia.
Once the Soviet pressure had begun, however, the
Iraqis sent a military delegation to Moscow to discuss the
issue, but we do not know the results of the visit. At the
same time, the Iraqis sent a military mission to France, pre-
sumably as part of an effort to remind the Soviets that Baghdad
has supplementary sources of military equipment. In the past,
such Iraqi purchases from the West may have contributed to a
Soviet willingness to provide them more military equipment.
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USSR-VIETNAM: Cordial Visit
Soviet Politburo member Grigoriy Romanov has left
Vietnam after a seven-day visit, which Tass billed as cordial
and fraternal, a sure indication that things went well. Romanov
was the first Politburo member to visit Vietnam since senior
ideologist Mikhail SusZov attended the Vietnamese Communist
Party congress in 1976. According to a Soviet Asian specialist,
&omanov's trip was intended to underline Soviet support for
Vietnam in its border struggle with Cambodia.
Since the fall of Saigon, Vietnam has been the center-
piece of Soviet policy in Southeast Asia, and Moscow no doubt
sees Vietnam as the only logical bulwark in the area against
the Chinese. This has been reflected in the Soviet attitude
toward the Vietnamese-Cambodian conflict.
The Soviets largely ignored the conflict until the
fighting became public in December, but the Soviets quickly
threw their full support to the Vietnamese following Cambodia's
breaking relations with Vietnam. Since the first of the year,
the Soviets have almost daily echoed Hanoi's coverage of the
conflict and have praised Vietnamese peace "initiatives" and
attacked Cambodian "intransigence."
Pravda ran a long commentary on the conflict on 8
February, I expressing Soviet support for Hanoi's peace proposal
and placing primary blame for the fighting on Cambodia. Moscow,
however, has gone to greater lengths than Hanoi to implicate
Peking.
Soviet media coverage closely parallels wr_at Soviet
officials have said about the border struggle in private. In a
recent conversation with a US Embassy officer, Soviet Foreign
Ministry official Shamanavskiy harshly criticized the Chinese,
accusing them of following the old Chinese practice of "using
barbarians against barbarians" to weaken and divide their neigh-
bors and of hindering Vietnamese attempts to bring stability
and peace to Indochina.
USSR-JAPAN: Bilateral Relations
Soviet President Brezhnev sent a letter Wednesday to
Japanese Prime Minister Fukuda calling for the conc'~=usion of
a bilateral friendship treaty, according to press reports.
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Brezhnev also invited Fukuda to Moscow to discuss bilateral
relations. No Japanese prime minister has visited Moscow since
1973, and Brezhnev has not responded to a standing Japanese
invitation to go to Tokyo.
The Soviets have proposed such an agreement on sev-
eral occasions as an interim step toward a formal peace treaty,
which has been stalled by the dispute over the northern terri-
tories. The Brezhnev letter did not mention that dispute, but
Fukuda told Soviet Ambassador Polyanskiy, who delivered the
letter, that the territorial issue must be settled before a
friendship treaty can be signed.
Brezhnev said that the USSR wants to sign a friendship
accord because a "third force" is seeking to damage Soviet-Japa-
nese relations. This was undoubtedly a reference to China, and
the Brezhnev initiative is clearly intended as a counterweight
to the possibility that Japan and China may soon conclude a
"peace and friendship" treaty with an "anti-hegemony" clause
directed at the USSR.
USSR-CANADA: Diplomatic Signals
The USSR is trying to overcome the
setback in its relations with Canada that resulted from Ottawa's
expulsion of 13 Soviet officials for spying.
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Moscow is also trying to maintain momentum in its bi-
lateral dealings with Canada. Previously scheduled commercial
air travel talks in Moscow have gotten off to a good start.
A group of Canadian businessmen was given a warm welcome in
Moscow, and both sides are hoping to conclude major contracts
by April.
Soviet media have also been careful to avoid disrupt-
ing bilateral relations. A Pravda statement on the expulsion,
attributed to the Canadian Communist Party, spread blame widely,
with emphasis on the "enemies of detente" in the US as well as
Canada. Another Pravda commentary condemned extreme right-wing
forces in Canada but singled out only one opposition member of
Parliament and pointed to rejection of his allegations inside
Canada.
YUGOSLAVIA-USSR: Differences
A high-level Yugoslav party leader has forcefully
asserted foreign policy differences with the USSR--in part to
underline the regime's independence of Moscow on the eve of
President Tito's state visit to the US early next month. Soviet
intransigence at the European security talks in Belgrade, how-
ever, is also a basic factor in Yugoslavia's angry mood. The
party leader also announced a major forthcoming change in the
organization of the Yugoslav party.
Party secretary Stane Dolanc, Tito's right-hand man
an a iikdly successor as head of the party, expressed Yugo-
slavia's grievances during a wide-ranging press conference on
Tuesday. He said Yugoslavia particularly opposes the Soviet
attempt to end the European security talks with a brief, non-
substantive communique.
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Expanding on his complaints against the Soviets,
Dolanc attacked the USSR's continuing polemic against "Euro-
communists" and criticized Soviet attempts to "disavow" the
principles Moscow agreed to at the 1976 conference of European
Communist parties in East Berlin. He also accused neighboring
Bulgaria, Moscow's close ally, for its failure to respond to
Yugoslavia's attempts to resolve the Macedonian issue.
Dolanc's parting shot was a statement welcoming an
eventual visit to Belgrade by Chinese party leader Hua Kuo-feng
and expressing an intent to pursue cooperation with China "in
all fields."
The USSR will view Dolanc's statements as polemical,
especially because earlier Yugoslav statements were more even-
handed in castigating both the US and the USSR for lack of
progress in the European security talks. Although Tito last
week sent a personal appeal to Soviet President Brezhnev to
show more flexibility at the talks, Dolanc's comments imply
that the Yugoslavs think the prospects for this are dim. Bel-
grade's frustration sharpened after Moscow refused to discuss
a proposal by the neutral and nonaligned countries--including
Yugoslavia--to resolve the deadlock at the Conference.
Dolanc also announced the broad outlines of a party
reorganization that is to be approved at the eleventh congress
in June. He confirmed that the 48-member Presidium would be
reduced by half, and he said the new body would, for the first
time, include a person designated as secretary. He did not men-
tion what position he will hold, but, according to previous
reporting, he will assume a title that will clearly designate
him as Tito's successor in the party
LEBANON: Army Factionalism
The fighting in Lebanon earlier this month
between Syrian troops and predominantly Christian elements of
the nascent Lebanese Army, backed by Christian militiamen, has
greatly complicated Lebanese President Sarkis' efforts to
build an effective national military force. The Army remains
faction-ridden and is incapable of restoring stability in the
country. There is little prospect that the conflicting Chris-
tian, Mus Zim, and Syrian pressures that are preventing the re-
constitution of the Army will ease until some form of national
political reconciliation is achieved.
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The Lebanese Army largely disintegrated during the
civil war into rival Christian and Muslim commands, and many
soldiers simply went home. Building a cohesive national force
immune to sectarian politics has been a high priority of the
Sarkis government. Sarkis recognizes that until an effective
national army is created, Lebanon's internal stability will re-
main dependent on the continued presence of the 30,000-man
Syrian peacekeeping force.
Last March, Sarkis appointed a Maronite Christian of-
ficer, General Victor Khuri, to command the Army. Khuri supported
the Christians during the civil war but was also relatively ac-
ceptable to the Muslims and Syrians. He was able to reassert at
least nominal authority over most of the disparate Army units
that survived the war. For the past year, he and Sarkis have
been trying gradually to develop integrated Muslim-Christian
units armed with Western weapons.
//Despite Sarkis' efforts, most army units owe
residual loyalties to Lebanon's traditional sectarian political
leaders and not to the central government.
the ostensible
chain of command in the Army is supplemented and in some cases
distorted by strong, informal lines of authority. Although all
units theoretically get their orders from Sarkis, in fact, most
report to the sectarian leaders.//
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//Khuri, for his part, feels the recent
fighting has given the Army greater cohesion, but he also re-
cognizes the need to purge the officer corps. He has told the
US defense attache that he fears the Syrians will now want to
play a major role in restructuring the Army.//
The Syrians, who have supported the reconstruction of
the Army in the past, are clearly unhappy with its current con-
dition. They suspect that some Christians in the Army have been
secretly turning their weapons over to the militias. Foreign
Minister Khaddam told the US Embassy in Damascus last week that
the Army was not a national force and that "in practice, every
unit gets its orders from a different political faction."
Khaddam reiterated Syrian support for the creation of
a truly national army, but Damascus will probably pressure Sar-
kis to purge the officer corps to remove officers hostile to
Syrian predominance. The Syrians will want a Lebanese army re-
ceptive to their instructions, not one that is openly opposed
to their presence.
We expect that the Lebanese Army will continue to be
a badly divided force, lacking cohesion and beset by conflicting
pressures from Syria, Sarkis, and sectarian politicians. The
Army probably will not be able to replace the Syrians as the
ultimate guarantor of Lebanon's stability any time soon.
CHAD: Crumbling Situation Report
The facade of unity in Chad's ruling Supreme Military
Council is beginning to crumble, following decisive defeats of
Chadian forces by Libyan-backed insurgents in the north and the
apparent failure of President MaZZoum's government to obtain
military assistance. Peace negotiations with Libya, expected
to begin this week, could, if successful, strengthen MaZZoum's
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position on the council. The government will be negotiating
from a position of weakness, however, and MalZoum may be forced
to make concessions. Major concessions could hasten his depar-
ture.
The US Embassy in Chad reports that the internal
alignments within Malloum's government are beginning to polarize.
The military problem has exacerbated longstanding rivalries
within the ruling group. Malloum's position as leader of the
nine-member body may be eroding, and he has sometimes had to
give way to the wishes of his colleagues. He is reported to
have been on the losing side when the council voted against
sending the Chadian Foreign Minister to Niger to negotiate with
the Libyans in early February.
According to the US Embassy, the search is on for
scapegoats for the defeats in the north and for the poor per-
formance of the government's military forces. Malloum and those
of his colleagues who advocated calling on the US for military
assistance are on the defensive as a result of what the Chadians
see as a slow US response. If Chad continues to suffer military
or diplomatic reversals, those individuals--including Malloum--
could be replaced.
The hard bargaining positions of the Libyans and the
rebels limit the chances for successful negotiations. Libya,
which has claimed and militarily occupied a strip of land in-
side Chad's northern border since 1973, has already declared
that its position is not negotiable. The Muslim rebels, who
receive substantial Libyan support, will probably not be sa-
tisfied with a reconciliation offer by Malloum to bring some of
them into the central government.
Malloum himself in the past has ruled out the granting
of territorial autonomy for the northern rebels, but in view of
the recent military defeats he may be willing to compromise.
Malloum's government is dominated by southerners.
Foreign Minister Kam.ougue and the younger, less con-
servative officers who support him may be willing to move
against Malloum if the President appears ready to make major
concessions in the negotiations with Libya and the insurgents.
Some members of the military council already believe the Presi-
dent is too conciliatory in his attitude toward Libya and the
rebels.
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If a Kamougue-led group were to oust Malloum, the
change would probably not be a serious setback for Chadian-US
relations. Such a government would almost certainly be more
radical, but Kamougue is basically pro-Western. He led the
group that opposed Chadian participation in the proposed nego-
tiations with Libya earlier this month.
Although the fighting has subsided since the fall
of the last government stronghold in the north at Faya-Largeau
several days ago, it is unclear whether the rebels are observing
a cease-fire. The Chadians meanwhile are continuing their ef-
forts to obtain a transfer of US military equipment from Iran.
A senior French official informed the US Embassy in
Paris at the French have decided to increase the level of
their military personnel and materiel in Chad. The French in-
tend to assist the Chadians in establishing a defensive line
running from Mao through Ati to Abeche. This effort could buy
additional time for Malloum.
INDIA-US: Transshipping Wheat
The Soviets have shipped 27,057 tons of US-origin
wheat from storage in India to Vietnam and another 13,400 tons
to North Korea. The shipments are part of India's repayment of
a wheat Zoan the USSR granted in 1973.
India will ship a total of 1.5 million tons of wheat
to repay t e Soviet loan; 490,000 tons will be of US origin,
750,000 tons will be Australian, and 260,000 tons will come
from domestic production. Some of the wheat is being delivered
to third countries at Soviet direction.
ears of bumper harvests in India have raised
ee
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government wheat stocks to about 17 million tons and have made
large wheat imports unnecessary since 1976. India purchased 3.7
million tons of wheat from the US in 1976 and received 408,000
tons of PL 480 wheat.
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The agreement between the US and India covering the
delivery of PL 480 grain stipulates that India could not export
during the fiscal year in which concessional imports were re-
ceived. For India this restriction expired at the end of Sep-
tember 1977. India was careful to comply and did not begin ex-
porting US grain until November 1977.
Civil disorder in Pakistan appears to be on the in-
crease again. Following the military coup in July, there were
a few clashes between police and political demonstrators, but
the military government's first six months were unusually quiet.
This year, however, there have already been several serious
incidents, including labor violence, clashes between Muslim
sects, and rioting about an especially brutal kidnap-murder.
None of these incidents is directly related to the
political situation in Pakistan, but they do reflect widespread
discontent. At the same time, the violence is eroding the mili-
tary government's reputation for ensuring law and order, what-
ever its other defects. Politicians who support former Prime
Minister Bhutto have already made tentative efforts to exploit
the disturbances, and it could be only a matter of time before
some of them return to the deliberate use of violence in the
Pakistani political process.
Norway-UK
//Norway and the UK, after extensive discussions,
have reached agreement in principle on the storage in Norway
of military equipment for use by British NATO troops. Norway
was previously reluctant to provide such storage for fear that
the Soviets might label it "basing."//
//The agreement comes at a time when Norway's NATO
a ies and the Norwegian public are expressing concern about
Oslo's withdrawal in early January of plans for increasing the
number of West German units in NATO exercises. Because the
change in plans became public following Soviet pressure, the
Norwegian Government was criticized in the press for apppear-
ing to knuckle under to Moscow.//
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//The Norwegians hope the agreement with the UK
wi neutra ize the earlier adverse publicity and signal the
Soviets that Norway will not alter its policies to fit Moscow's
demands.
North Korean Defense Minister 0 Chin-u is in Moscow to
attend festivities marking the 60th anniversary of the Soviet
armed forces. His trip appears to be primarily ceremonial in
nature, but Pyongyang may use the occasion to put in a bid for
additional Soviet military assistance.
North Korea has developed considerable self-sufficiency
in ground force and naval weaponry, but it is still dependent on
outside sources for aircraft and missiles. Relations between
North Korea and the USSR have been cool in recent years, and
there is no firm evidence of major Soviet arms deliveries to
North Korea since 1974.
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