THE SITUATION IN IRAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01443R000100330002-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 6
• Document Creation Date: November 9, 2016
• Document Release Date: July 22, 1998
• Sequence Number: 2
• Content Type: REPORT

Approved For Release 1999/09/08 : CIA-RDP80RO1443R000100330002-4
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THE SITUATION IN IRAN
1. Zahedi disappointed over US aid:
A. Prime Minister Zahedi considers
$45,000,000 too small to undertake
necessary development and job-creat-
ing projects.
B. He allegedly considered resignation,
but stated he was reassured after
talking to Ambassador Henderson on
11 September.
C. Zahedi is planning to send a special
envoy to Washington before Congress
opens to ask for more aid.
D. Point IV director Warne estimates
that $37,000,000 of American aid is
required to meet Iran's budget defi-
cit for next 7 months--$8,000,000
would remain for economic develop-
ment.
-iAPSEFR{T-
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E. The American grant enables Iran to
meet immediate obligations, but
Zahedi must settle with Britain and
sell Iran's oil in order to carry
out program after US aid ends.
II. Zahedi has not yet proposed reopening
oil negotiations with British: b
25X1 C8bd
The Foreign Office feels that negotia-
tions with Zahedi should be based on the
February 1953 proposals made to Mossadeq:
A. Any agreement must provide "fair com-
pensation" to AIOC for loss of its
enterprise in Iran.
-2- (Iran)
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B. Iran must not profit more from its
oil than the neighboring countries.
C. The February proposals represent
Britain's minimum requirements.
D. Zahedi cannot appear too eager to
settle with British nor can he fail
to settle the dispute.
E. He is not likely to consider settling
on terms which appear to prevent Iran
from receiving full value for its oil
or which puts Iran in Britain's debt
for a. long period.
IV. Anti-Tudeh drive continuing effectively:
A. 3,000 suspect government employees
reportedly discharged, arrests of
Tudeh total about 1,300.
B. Many arrested Tudeh will be put in
a concentration camp in Luristan
province in western Iran.
C. Important Tudeh members will be given
(Iran)
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Tan gaggg
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trial by military court; rank and
file will probably be released with-
out trial after short imprisonment.
D. Tudeh membership is disorganized by
police raids, but the party is trying
to reduce cell structure from 8 to 3
to increase its security.
E. Tudeh reportedly receiving arms
smuggled in from Soviet Union via
Caspian Sea.. Soviet embassy in
Tehran believed printing literature
for Tudeh whose presses have been
destroyed.
F. Party still trying to carry on pro-
paganda campaign including wall
slogans and tracts; also trying to
form united front with other anti-
government groups such as Iran Party.
G. Despite government measures, party
structures considered intact and par-
ty making strong effort to continue
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(Iran)
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functioning underground.
H. Tudeh will be ineffective only as
long as a government continues strong
suppressive measures.
V. The shah is asserting leadership:
A. Reports from Tehran emphasize shah's
new-found confidence.
B. He apparently feels that he has the
mandate of the people.
C. Shah is trying to establish tight
control over the army.
D. This pleases the minister of defense
and the chief of staff, but has re-
sulted in friction with Zahedi.
E. Possibility exists of more disagree-
ments between shah and Zahedi.
VI. Some cabinet changes are expected:
A. The cabinet, containing many old-time
politicians, has aroused criticism.
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-~9P5EER~
(Iran)
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B. Shah and others feel more new blood
should be brought into the govern-
ment.
C. Zahedi is expected to make cabinet
changes, but he is limited by his
need for experienced politicians
and administrators, even at the price
of ability.
VII. Zahedi's regime not yet threatened by
political forces:
A. Political forces are regrouping and
opposition will probably soon appear.
B. Status of the Majlis is unclear since
the shah and Zahedi favor its dissol-
ution and new elections, but the re-
maining deputies refuse to resign.
C. Zahedi's government offers Iran a
chance for stability.
(Iran)
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