NATIONAL INTELLIGENCE DAILY WEDNESDAY 24 JANUARY 1979

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81T00368R000100010045-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 23, 2016
• Document Release Date: April 7, 2010
• Sequence Number: 45
• Publication Date: January 24, 1979
• Content Type: REPORT

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" ; `e F Director of r Secret
Central
Intelligence
National Intelligence Daily
24 January 1979
Wednesday
Top Secret
COPY 3 d 2
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nts
Briefs and Comments
Top Secret
Situation Reports 25X1
Iran . . . . . . . . . . . . . . . . . . . . . . . 1
Thailand: Indochina Relations . . . . . . . . . 5
Israel-Lebanon: Cease-Fire Agreement . . . . . . 6
Morocco-Mauritania: Troop Withdrawal . . . . . . 7
Italy: Communists' Options .
North Korea - South Korea:
Pyongyang's Proposal . . . . . . . . . . . . . 9
Peru: Relations with Neighbors . . . . . . . . .11
Hungary-USSR: No Raw Material Agreement. . . . . 12
UN: Committee on, Disarmament . . . . . . . . . . 13
Scandinavia-Vietnam: Freeze on New Aid . . . . . 13
Special Analysis
NATO: Reactions to Guadeloupe. . . . . . . . . .14
Overnight Reports . . . . . . . . . . . . . . . . . . . 17
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25X1
No other military actions were reported in the Tehran area, and it is not certain whether the security
forces moved under instructions from Prime Minister
Bakhtiar. The Tehran domestic radio service stopped
broadcasting early this morning. 25X1
Bakhtiar was planning steps to seize the initiative
from the opposition before Khomeini's intended return.
Progovernment demonstrations were being organized in
Tehran and other cities; they could lead to St-a-4-
1-4-4-1 -- -4 4-1, .,r .-; .~,.~...,.r 25X1
one hand and the opposition on the other.
Minister Bakhtiar's government and the military on the
Military and police forces closed Tehran's interna-
tional, airport Zate Zast night Washington time, and po-
lice officials indicated that the airport would remain
shut until Sunday. There was no immediate official con-
firmation that the closing was intended to prevent the
planned return of Ayatollah Khomeini on Friday. The move
is likely to widen further the differences between Prime
agreement to consult with other Islamic leaders before
he announces the formation of his Islamic Revolutionary
Council--an announcement that would provoke the military.
mo erate religious
leader Ayatollah aria ma erg. e .eves he has Khomeini's
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25X1
25X1
The Shah's Activities
The Shah evidently is moving to take a stronger role
the Shah will return to Egypt and hopes that
he can use it as a staging point. 25X1
The Shah undoubtedly is in touch with senior mili-
tary and SAVAK officials in Iran and probably is aware
of the coup plotting under way. He probably hopes that
if Prime Minister Bakhtiar's government is unable to deal
with Khomeini, the military will invite the Shah to re-
turn to restore order. If the Shah encourages the mili-
tary to seize power on his behalf, the chances that hard-
line officers will mount a coup would be significantly
increased. 25X1
Many Iranians would blame the US for any move by
the Shah to return or for a military takeover on his
behalf. 25X1
Sadat views the Shah as a close personal friend and
may hope that from Cairo the Shah will be able to influ-
ence events in Iran during the coming months. The Shah's
return to Egypt, however, could generate protests from
political and religious extremists. 25X1
During the Shah's recent stay in Aswan, leftists
distributed leaflets denouncing him as a tool of the CIA.
Last month, a series of minor demonstrations reportedly
were mounted by followers of the conservative Muslim
Brotherhood protesting public expressions of support for
the Shah by a leading government-appointed religious
leader. 25X1
The US could also be the target of criticism gener-
ated by the Shah's presence. Ambassador Eilts reports
that, as the situation in Iran has deteriorated, there
has been a marked increase in suspicion and animosity
toward the US on the part of orthodox Egyptian Muslims
who apparently believe the US is hostile toward Islam.
-CIA Late Item- 25X1 25X1
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Thai leaders, reluctant to antagonize either China
or Vietnam, are maintaining a neutral position on the
conflict in Kampuchea. Because of the unexpected scale
and speed of the Vietnamese invasion, Thailand initially
seemed prepared to accept Vietnam's takeover as an ac-
complished fact. There are tentative signs, however,25X1
that Thailand may develop a more cooperative attitude
toward PoZ Pot's resistance movement. 25X1
Thai leaders have shown little enthusiasm for Chi-25X1
nese suggestions that Pol Pot's forces could be resup-
plied through Thailand.
Small arms, ammunition, and other items required
by the Kampuchean resistance could easily be transported
covertly across the Thai border. 25X1 25X1
to continue developing bilateral relations.
shipping agreement with Vietnam to demonstrate its desire
Thailand, although critical of Vietnam's actions,
is unlikely to lock itself into an openly anti-Vietnamese
stance. Thailand recently signed a previously negotiated
25X1
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ISRAEL-LEBANON: Cease-Fire Agreement
Ambassador Lewis last night reported from Tel Aviv
that Israel and the PLO have agreed to halt the five-day
old artillery and rocket exchanges along the Israeli-
Lebanese border. If a cease-fire is maintained, it could
bring at least a temporary end to the worst period of 25X1
shelling, terrorist incidents, and other military ac-
tions in the troubled region since the Israeli incur-
sion into southern Lebanon last spring.
Lebanese Prime Minister Huss told Ambassador Dean
in Beirut late last night that PLO leader Arafat had
ordered Palestinian forces to stop firing. Huss asked
that the US pass word of the cease-fire order to the
Israelis. Israeli Defense Minister Weizman, who agreed
to arrange the cease-fire to become effective as of 2300
EST last night, said he noted that the situation along
f-hp border ha. quiet since late yesterday afternoon.
25X1
A cease-fire may require some time to take hold.
Arafat apparently told Huss that, while he had issued
the command, word had not yet filtered down to all Pal-
estinian units. It is possible that some Palestinians
will not comply.
25X1
25X1
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;Gibraltar
(U.K.)
Morocco
Canary Islands
(SP)
geraa
Western
Sahara
(Claimed by
Morocco)
pd \t\n
(claimed by \- Zouerat
Mauritania)
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MOROCCO-MAURITANIA: Troop Withdrawal
Moroccan King Hassan is beginning to withdraw the
military forces he sent to Mauritania in 1977 to help
fight Algerian-backed Polisario Front guerrillas. The
withdrawal is likely to proceed cautiously, allowing
Hassan time to assess the attitude of the post-Boumediene
regime in Algiers and that of the guerrillas toward ne-
gotiating a settlement to the Western Sahara conflict.
25X1
Three basic considerations now make a negotiated
settlement more attractive to Hassan: the apparent de-
cision by Mauritania's military leaders to abandon the
struggle against the Polisario; the death of Boumediene,
who made the Polisario cause a matter of personal
prestige; and the evaporation of popular enthusiasm
in Morocco for a military solution. 25X1
Hassan seems to recognize that keeping Moroccan
forces in Mauritania in the face of the Mauritanian
Government's requests for their departure would only
further damage relations. He may also now believe that
the political costs of using Moroccan forces to block
a formal unilateral peace between Mauritania and the
guerrillas would be prohibitive. 25X1
The de facto truce between Mauritania and the
Polisario, moreover, has largely eliminated the need for
Moroccan troops to protect Mauritanian rail lines and
industrial sites. As a result, Hassan's military
commanders may have urged disengagement in Mauritania
in order to free additional Moroccan forces for service
in the Moroccan-controlled sector of Western Sahara,
where the guerrillas remain very active.
Moroccan forces were sent to Mauritania under
agreements concluded with the Mauritanian civilian regime
that was ousted last July. There are now 8,000 to 9,000
Moroccan soldiers in Mauritania and in the Mauritanian-
claimed part of Western Sahara. 25X1
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ITALY: Communists' Options
Communist chief Ber-
znguer s a visers are urging him to ask by tomorrow for
a summit meeting of the five parties comprising the
Andreotti government's parliamentary majority. BerZinguer
would apparently use the meeting to set the stage for
Communist withdrawal from the majority--and blame the
Christian Democrats for failin to Zive up to the five-
party parliamentary accord. 25X1
Berlinguer is still reluctant to bring down the gov-
ernment and force an early parliamentary election, both
likely results of the Communists' withdrawal. Other
Communist leaders, however, consider the current situa-
tion intolerable, primarily because the government ig-
nored their recommendations concerning several major pol-
icy decisions. Berlinguer's tough line apparently is de-
signed in part to mollify rank-and-file dissatisfaction
with the leadership's support of the government prior
to the party congress slated for March.
Berlinguer's supporters have recommended that he 25X1
launch an attack soon against Christian Democratic con-
duct in government, thus preparing the ground for Com-
munist withdrawal. Some of his advisers want to avoid
having the break occur in connection with the parlia-
mentary debate beginning on Monday over the government's
economic plan. They fear this would enable the Christian
Democrats to accuse the Communists of ignoring Italy's
most pressing problems. 25X1
For its part, the leadership of the Christian Demo-
crats has reaffirmed its commitment to the current
governing arrangement and its willingness to discuss dif-
ferences with the other parties. The Christian Democrats,
however, insist that these discussions focus on the
government's economic plan rather than the makeup of the
government.
25X1
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NORTH KOREA - SOUTH KOREA: Pyongyang's Proposal
As a counteroffer to South Korean President Pak's
recent call for North-South talks, North Korea yesterday
proposed a meeting of representatives of all political
parties and mass organizations of the two Koreas. The
North Korean proposal seems designed to convey a sense
of flexibility, and it presents problems for the South.
A period of heightened tactical maneuvering by the two
sides seems in prospect. 25X1
North Korea proposes that both sides begin a series
of actions to ease tension and that preliminary talks
start in June to prepare for a meeting in early September
in Pyongyang or Seoul of various political groups. The
North Koreans specifically invited Pak but as president
of the Democratic Republican Party rather than as head
of state. 25X1
North Korea may have calculated that resumption of
a dialogue might accelerate US troop withdrawals, limit
the amount of US compensatory military assistance to
South Korea, and perhaps lay the groundwork for eventual
contacts with the US. The North probably feels some
need to counter recent publicity in the US over the
sizable increases in estimates of its order of battle.
It may also see its proposal as a means of keeping the
initiative on the Korea question during Chinese Vice
Premier Deng Xiao in 's (Ten Hsiao-ping's) coming visit
to the US. 25X1
North Korea's latest proposal presents difficulties
for the Pak government, which may well believe that
North Korea's plan is designed to undercut the legiti-
macy of the South Korean Government. South Korea, none-
theless, probably feels under considerable pressure now
to avoid a premature negative reaction. If so, a period
of heightened tactical maneuvering seems likely by both
sides while they consider ways of addressing the issues
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PERU: Relations with Neighbors
Peru's expulsion of the Chilean Ambassador and its
strong protest over Ecuador's alleged maltreatment of
a group of Peruvians are demonstrations of Lima's hard-
ening stance toward its southern and northern neighbors.
If continued, this new truculence, which stems largely
from the growing assertiveness and influence of hard-
line officers, could Zead to increased tension among the
Andean nations, especially because this year will mark
the centennial of Peru's militar defeat by Chile in the
War of the Pacific. 25X1
The Peruvians on Saturday declared the Chilean
envoy persona non grata to protest acts of espionage
committed by Chilean diplomats and naval personnel late
last year. On the same day, the government executed a
Peruvian airman convicted of helping the Chileans acquire
information. 25X1
Peruvian Army General Richter, who directed the
government's forceful handling of a recent general
strike attempt, led the push for firm action. Scheduled
to become Peru's prime minister on 1 February, he will
undoubtedly be determined to project an image of tough-
ness at home and abroad. He is supported by a number
of officers who think President Morales Bermudez has
frequently been indecisive. 25X1
Peru's responses are out of proportion to the low
level of the espionage incidents, and Chile has so far
taken the expulsion calmly. The Chileans had tacitly
acknowledged the spying charges, but they had expected
LDk I
Peru has also lashed out at the Ecuadoreans, who
had earlier arrested some seven Peruvians, apparently
on charges of espionage. Peru charges that the Ecuador-
eans tortured the prisoners to extract military infor-
mation, and in its formal protest has demanded an ex-
planation.
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HUNGARY-USSR: No Raw Material Agreement
Hungary has been unable to persuade the USSR to
increase raw material shipments to Hungary for the 1981-
85 plan period or to provide Hungary with a $1-billion
loan, presumably to finance increased purchases from the
USSR.
The USSR has offered to continue deliveries of raw
materials at the 1980 level and was noncommital about a
loan. The Soviets, moreover, want to stop paying for a
portion of their agricultural imports from Hungary in 25X1
hard currency and substitute transferable rubles, begin-
ning in 1981. The USSR also has insisted that Hungary
invest more in developing Soviet natural resources.
Hungary, already heavily burdened by payments for
oil from the Middle East, will have added hard currency
problems if it cannot increase its purchases of raw ma-
terials from the Soviet Union. Hungarian officials re-
port that a stagnation in deliveries of raw materials
will hurt the next five-year plan, when the rate of
growth is expected to be only 3 to 3.5 percent compared
with an average of over 5 percent in the 1976-80 plan
period. Other East European countries also are attempt-
ing to arrange such agreements with the Soviets but so
far have been unsuccessful.
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The UN Committee on Disarmament convenes today in
Geneva for its first session since being renamed, reor-
ganized, and expanded to 40 members. Algeria will be
the first to serve as the Committee's chairman, a ro-
tating position that has replaced the permanent US-USSR
cochairmanship. France, represented by Foreign Minister
Francois-Poncet, will participate for the first time
since 1960. China will not be represented but has
reserved the right to take its seat. There are indi-
cations that the USSR and its allies might challenge
this arrangement; the "Group of 21" developing countries
and the Committee's Western members apparently will
support China's request. A limit on the use of chemical
weapons and a comprehensive nuclear test ban will be the
main topics of discussion.
Scandinavian countries, which in earlier years sup-
ported the Hanoi regime, probably will complete projects
now under way in Vietnam, but will delay future economic
aid until Vietnam withdraws from Kampuchea. Parliamen-
tary debates are scheduled this week in Sweden and
Norway where public anti-Vietnam sentiment has been
growing. Swedish Prime Minister Ullsten said the pace
of Vietnam's withdrawal will influence decisions on future
Swedish aid. A Norwegian Foreign Ministry official
said Norway will consider halting current projects if
Vietnamese forces threaten to cross the Thai border.
The Danish Government also has decided to freeze addi-
tional aid to Vietnam, including $30 million that had
already been budgeted for that purpose.
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NATO: Reactions to Guadeloupe
The concern and suspicion being voiced by the NATO
governments that were excluded from the Guadeloupe sum-
mit was intense Zast week. Some representatives said
the health of the Alliance's consultative process--which
keeps tension within reasonable bounds and reinforces
trust--is at stake. 25X1
The concerns of the excluded members were compounded
by what they considered to be an inadequate briefing on
the summit at the meeting of the North Atlantic Council
on 9 January. The meeting last week of the Guadeloupe
participants to talk about aid to Turkey--a discussion
begun at Guadeloupe--also served to heighten suspicions.
The criticism was directed at all four of the states
that participated in the summit--the US, the UK, France,
and West Germany. 25X1
Canada's Permanent Representative led off a NATO
session on 16 January by observing that NATO's consulta-
tion process had been in a state of decline prior to the
Guadeloupe summit, but that Guadeloupe had made matters
worse. NATO Secretary General Luns was more direct: he
said NATO consultations had "failed" in recent months
and went on to point to the increasing number of re-
stricted multilateral consultations as a symptom of that
Luns also noted that developments in Africa and
Iran had been ignored in NATO forums and expressed con-
cern over the lack of consultation about the present
situation in Spain. Luns warned that unless the alli-
ance was more than a technical defense agency, public
support would decline.
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The smaller NATO members always have jealously
guarded their right to play a full role in NATO and have
strongly objected to any attempts by their larger part-
ners to establish distinct and exclusionary relation-
ships. In large part, this is because Alliance member-
ship provides the smaller states with more than physical
security from aggression. 25X1
Membership also gives them a sense of psychological
security, an opportunity to make their views known, and
a chance to play a larger role in world affairs. The
Guadeloupe summit has revived and heightened their fears
that the Alliance might become a two-tier system in
which their influence would be diminished at a time
when issues that directly affect them are coming to the
fore. 25X1
The divisions within NATO between the large and
the small members could have an impact within the Euro-
pean Community. In the weeks ahead, the European par-
ticipants at Guadeloupe will find it necessary to con-
vince the other members of the EC that they have taken
account of their partners' interests as well as their
own. 25X1
Canada places special importance on the NATO con-
sultative process, and the Canadian representative took
the lead at the NATO meeting last week in criticizing
the NATO "big four." He explained that because Canada
is not a member of the EC, "NATO is the sole forum open
to Canada for this type of consultation." 25X1
The Canadians fear that the decline of the NATO
consultative process could leave them isolated within
the Alliance. There may also be domestic reasons for
the strong Canadian stand. The Canadian press inter-
preted the timing of the announcement of the Guadeloupe
meeting--on the eve of Prime Minister Trudeau's visit
to Paris--as a snub by France.
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Although the Italians were relatively quiet at last
week's NATO discussions, Italy is more sensitive to ques-
tions of "presence" and "consultation" than other members
of the Alliance. As the largest of the small powers,
moreover, Italy expects to be included in the councils
of the larger powers. Its exclusion from Guadeloupe,
coming just as the government was seeking to develop
public support for joining the European Monetary System,
is likely to figure in any future domestic disputes over
EC and NATO issues. 25X1
The decision to give the nonparticipants a second,
more detailed briefing on Guadeloupe smoothed some of
the ruffled feathers, but the smaller allies will be
particularly vigilant in future instances in which they
believe they are being ignored. Some concede that there
are times when the four major NATO members need to meet
alone, but they all insist that the smaller countries
must be kept fully informed about what occurs. This is
particularly the case where the interests of all NATO
members are involved, as they were in many of the issues
talked about at Guadeloupe and as they were in the dis-
cussions of aid to Turkey.
Current procedures for consulting with NATO--on the
SALT negotiations, for example--will be strained as
East-West negotiations on "Gray Area Systems" (primarily
theater nuclear forces) approach. The rotational proce-
dures in NATO's Nuclear Planning Group, where such mea-
sures are discussed, could become a source of controversy
as some members of the Alliance become concerned that
crucial decisions will be made without them.
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(The items in the Overnight Reports section have not
been coordinated within the intelligence community.
They are prepared overnight by the Office of Current
Operations with analyst comment where possible from
the production offices of NFAC.)
The Tehran domestic radio service resumed broadcast-
ing its usual programs this morning (see Situation
Report) . 25X1
Saudi Arabia
The King is expected to remain at his desert
25X1
hunting camp until the mid-February visit of Queen
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Chinese dissidents report that authorities have
ordered a crackdown--including imprisonment--on human
rights groups and on unofficial contacts with foreigners.
A Chinese source has also reported the arrest of at
least one leader of the recent peasant march on the Chi-
nese leaders' compound. According to a press report, a
diplomat in Beijing (Peking) has speculated that the
drive may be aimed at embarrassing Vice Premier Deng just
before he visits the US. 25X1
Press sources--citing official Soviet accounts--
report that the Soviet Republics of Armenia and Azerbaijan
are experiencing serious economic problems because of the
interruption of natural gas deliveries from Iran. Local
Soviet officials and newspapers have reported that in-
dustries and power and heating stations have switched
from gas to heavy fuel oil in the cities of Baku and
Yerevan. Other unconfirmed reports suggest a similar
fuel emergency in Soviet Georgia. Until last October,
the Soviets had been importing about 350 billion cubic
feet of natural gas a year from Iran at a cost of $1
million a day. 25X1
The US Embassy in Warsaw reports that Poland has
requested a credit from France to purchase an additional
400,000 tons of wheat worth about $50 million. Accord-
ing to a member of the French Embassy, France will grant
the credit. The total amount of credits Poland will re-
ceive from France this year is expected to reach $150
mi_1 1 ion_
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