CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A027100010004-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 21
• Document Creation Date: December 21, 2016
• Document Release Date: May 2, 2006
• Sequence Number: 4
• Publication Date: April 19, 2000
• Content Type: REPORT

Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
Top Secret
Room W- U-
National Intelligence
Bulletin
State Dept. review completed
. Top Secret
No 639
Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
 25X1 Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
National Intelligence Bulletin
October 19, 1974
CONTENTS
USSR-EGYPT: Relations improving. (Page 1)
EGYPT-USSR: Cairo's media treat Fahmi's visit as tri-
umph. Page 2)
NATO-PORTUGAL: Security officers question Lisbon's at
tendance at a meeting of the NATO Nuclear Planning Group.
(Page 4)
IRAN-IRAQ: Tehran suspends bilateral negotiations.
(Page 7)
ITALY: Fanfani bargaining for new center-left govern-
ment. (Page 9)
PORTUGAL: West European Socialists come to the aid of
their raternal party in Lisbon. (Page 11)
CANADA-EC: EC unlikely to be as forthcoming as Prime
Minister Trudeau would like. (Page 13)
FOR THE RECORD: (Page 14)
Interagency Memorandum on Portugal's Future. (Page 15)
Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
National Intelligence Bulletin October 19, 1974
USSR-EGYPT
General Secretary Brezhnev's commitment to visit
Cairo has substantially improved the atmosphere of Soviet-
Egyptian relations. Nevertheless, the apparent inability
of Foreign Minister Fahmi and the Soviets to agree on
the usual communique and the differing emphasis in Soviet
and Egyptian public statements indicate that resolution
of serious differences awaits Brezhnev's trip.
The two sides did issue a statement reiterating their
standard views on the Palestinian question. They affirmed
that a Middle East peace settlement must secure Palestinian
rights, including a "national entity," and that the Pales-
tine Liberation Organization should attend the Geneva con-
ference in an independent capacity and on an equal footing
with other participants. The separate versions of the
statement issued by Moscow and Cairo differed in some re-
spects. The Soviet version, for example, attached more
urgency to reconvening the Geneva conference than did
Cairo's.
The Egyptian press claims Cairo did gain some spe-
cific economic commitments, including a doubling of Mos-
cow's coal shipments, but these seem to satisfy Egyp-
tian demands only partially. The Egyptian press says that
several working-level groups will meet before Brezhnev's
visit to lay the groundwork for possible military and
economic accords.
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
National Intelligence Bulletin October 19, 1974
Egyptian media have treated Foreign Minister Fahmi's
visit to Moscow as a triumph for Egypt's independent
foreign policy. Although by no means lacking in warm
expressions of friendship for the Soviets, the commen-
tary has taken the line that the restoration of good
relations was not the result of Egypt's importuning,
but of Moscow's realization that amicable ties are in
its strategic interests.
Fahmi's visit and the announcement of Brezhnev's
intention to come to Cairo in January have brought an
outpouring of expressions of "deep" friendship for
Moscow. The press has heaped gratitude on the Soviets
for helping Egypt in some of the "gravest moments of
its history." At the same time, the Egyptians. have
lost no opportunity to affirm their continued inten-'
tion to maintain policies independent of the Soviets.
One commentator ;Praised Soviet support for anti-
colonialism, but pointedly added that Moscow backs all
peoples who seek to chart their own futures "remote
from spheres of influence." President Sadat has fre-
quently used this term in talking of Egypt's desire to
remain independent of tutelage by either superpower.
The commentator further noted that, just as Egypt needs
good relations with Moscow, the Soviets also cannot
forfeit their friendship with Egypt because they rec-
ognize the central role Cairo plays in an area of the
world that is vital to their interests.
Al-Ahram editor Ahmad Baha ad-Din put the case
more bluntly. Writing from Moscow, where he accompanied
Fahmi, he asserted on Thursday that a "nationalist"?
that is independent--policy will continue to be exer-
cised from Cairo. Possibly in response to criticism
Fahmi received from the Soviets while in Moscow, Baha
ad-Din asserted Moscow now understands that Egypt has
"the right" to deal with the US, agrees that it must
coordinate Arab strategy before rushing to reconvene the
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
I I
National Intelligence Bulletin October 19, 1974
Geneva conference, and accepts the fact that the Egyp-
tian economic liberalization program to which the So-
viets have previously objected, is a purely domestic
matter.
Although the editor may be overstating Soviet "un-
derstanding," he claimed that Soviet acceptance of the
Egyptian viewpoint came after a "simple calculation"
by Moscow: Egypt is indisputably the key to the middle
East, and "it is impossible to go over Egypt's head
if any solution to any problem in the area is desired."
Whatever the unresolved problems remaining from
the Fahmi visit, the Egyptians clearly see Soviet
acquiescence in a Cairo summit as a vindication of
Sadat's refusal to bow to Soviet pressures against his
foreign and domestic policies. Cairo is almost cocky
in its belief that all superpower roads in the Middle
East lead through Egypt, and the confirmation of this
belief given by Brezhnev's scheduled visit will rein-
force Egyptian determination to remain free of outside
pressures.
The Egyptians undoubtedly intend this as a message
to the US as well. They have little fear of US inter-
ference in their affairs, as they do with possible
Soviet interference, but they probably see the rap-
prochement with Moscow as helpful in pressing the US
toward further movement both in peace negotiations and
in economic assistance.
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
I I
National Intelligence Bulletin
NATO-PORTUGAL
October 19, 1974
NATO's problems in dealing with the leftist govern-
ment in Portugal are coming to a head. An immediate
question is whether Portuguese representatives should
be permitted to attend the meeting in Rome next month,of
the Alliance's Nuclear Planning Group.
NATO security officers visited Portugal recently tQ
study how the Portuguese are safeguarding classified NATO
documents, particularly those dealing with nuclear
weapons, planning, and strategy. This week, they recom-
mended to NATO Secretary General Luns that, pending an
improvement in the security situation, Lisbon should no
longer be given information about nuclear matters. The
.security team also suggested that the Portuguese should
no longer participate in the Nuclear Planning Group or
its staff meetings.
Lisbon, however, has already informed.NATO that it
is sending a delegation to the meeting. Among those
planning to participate is Admiral Pinheiro de Azevpdo,,
a suspected leftist who is serving as acting president
while Costa Gomes is out of the country.
Luns has told the US charge at NATO he would prefer
that the Portuguese not come to'Rome, but he fears that
if Lisbon is excluded, both the US and NATO will become,
targets for propaganda exploitation and that NATO-Pprtu-
guese relations will suffer.
Luns has proposed that, it the US agrees, he will
suggest to the Portuguese ambassador to NATO on Monday
that Lisbon not attend the meeting. If the Portuguese
insist--which they are likely to do--Luns would like to
tell the Portuguese that they may attend.
A decision to exclude the Portuguese would run the
danger of antagonizing the new government in Lisbon an4
precipitating anti-NATO actions by the Portuguese. TI}e
other alternatives are to have a "watered-down" meeting,
as suggested by Luns, which would only postpone dealing
with the issue or to risk having sensitive information
com romisedo
25X1
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 25X1 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5 25X1
Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
Shaft al-Arab Segment of Iran-Iraq Boundary
TRA NB-I R A NIAN
RA ILROAD
7 iles to Basra
(Head of'h$vigation for
ocean going vessels)
Road
Airfield
Tank farm ????
0 MILES
Warbah
Island
Bubiyan
Island
'"Khosrowabad
Abadan Island
Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5 25X1
National Intelligence Bulletin October 19, 1974
IRAN-IRAQ
Tehran has discontinued talks with Iraq aimed at
settling bilateral differences.
After preliminary discussions in Istanbul, both
sides agreed in August; to talks at the UN on the foreign
minister level. At their first meeting on October 11,
Foreign Ministers Khalathari from Iran and Taqa from
Iraq indicated they were prepared to discuss several
problems, but neither showed any flexibility on the ma-
jor issue--Iran's demand that the Shatt al-Arab border
be redrawn. Tehran takes the position that the treaty
of 1937, which placed the boundary on the Iranian side
of the river, was unfairly imposed by the British. The
Shah proposes a midchannel boundary.
The discussions were probably doomed from the start
because of a basic hostility between the Iranian mon-
archy and the Iraqi Baathists. Continuing Iranian aid
to the rebellious Kurds has further angered Baghdad
and has led to border violations and repeated propa-
ganda attacks by both sides.
A recent diplomatic incident may also have con-
vinced the Shah that Iraq was not serious about the
talks. The Iraqis recently returned an Iranian diplo-
matic note because it referred to the "Persian Gulf,"
rather than the "Arab Gulf." Last month, the Shah
strongly protested the use of the term "Arab Gulf"
to several Arab governments, and he probably regarded
the Iraqi action as a calculated affront.
Tehran has never been enthusiastic about the talks
and is not likely to be seriously disturbed by their
failure. Nonetheless, Iran does not want to be identi-
fied as the obstacle to improved relations with Baghdad,
and may try to keep alive the possibility that the talks
will resume.
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 25X1 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5 25X1
Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
I I
National Intelligence Bulletin October 19, 1974
ITALY
Prime Minister - designate Fanfani is in the midst
of hard bargaining for a new center-left government after
several days of preliminary talks with other political
leaders.
The Christian Democratic leader has won the unani-
mous support of his own party for a program reportedly
designed to strike a. compromise between advocates of
economic austerity and those, like the Socialists, who
want an increased commitment to social spending. Fanfani
is trying to sell his ideas to each of the coalition
parties individually. If successful, he will convene
a meeting of all four parties--Christian Democrats, So-
cialists, Social Democrats, and Republicans--within a
few days. Barring major snags, Fanfani could wrap up
negotiations by the end of next.week.
His efforts, however, are hampered not only by
opposing party positions, but also by divisions within
the Socialist Party--the major protagonist in the cur-
rent dispute. After meeting with Fanfani this week,
Socialist chief De Martino took a "positive" view to-
ward relaunching the coalition. De Martino's freedom
of maneuver is limited, however, by strong minority
opposition within his party to the economic and politi-
cal compromises necessary to re-enter the government.
Fanfani is noted for his flamboyance. If he suc-
ceeds in reviving the center-left coalition, he will
probably produce some dramatic flourishes to distinguish
the new government from its long string of predecessors.
He reportedly wants to streamline the cabinet by re-
ducing the number of portfolios. Fanfani is also
talking about "fresh faces," and may try to curtail
participation by a number of senior politicians who
have been shuffling in and out of Italian governments
since the war.
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
National Intelligence Bulletin October 19, 1974
These would be drastic steps, however, and Fanfani
may have to settle for an intermediate measure, such as
the appointment of prominent "technocrats" to several
key economic ministries. Fiat President Giovanni
Agnelli and Bank of Italy Governor Guido Carli are po-
tential candidates for such positions.
Labor unrest has continued to grow as the political
stalemate entered its third week. The federation that
represents all of Italy's major unions called a nation-
wide general strike on Thursday to back up demands for
increased wages and benefits. Fiat installations in
Rome were damaged yesterday by fire and bombs. Al-
though there is no evidence to connect labor with the
attacks, Fiat has been the main target of labor protest
since the company put one third of its employees on a
short work week earlier this month.
The Communists, meanwhile, are avoiding actions
that could damage Fanfani's prospects. They fear that
new general elections might have to be held if Fanfani
fails and that these would interfere with regional con-
tests already scheduled for the spring. The Communists
are confident of gains in the regional elections and
do not want anything to upset the timetable.
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
National Intelligence Bulletin October 19, 1974
PORTUGAL
Leaders of Portugal's Socialist Party are having
some success in persuading fraternal parties in Western
Europe to provide financial and organizational support.
A number of West European government and party leaders
are scheduled to visit Lisbon in coming weeks to observe
at first hand the political situation, especially ways
to prevent the Socialists from being outdistanced by the
Communist Party, which is well organized and financed.
West German Social Democratic leader Willy Brandt
will make a three-day official visit to Portugal begin-
ning October 19, The 'West German Social Democrats intend
to provide financial and technical aid to the Portuguese
Socialists through party channels. Bonn is considering
aid to Portugal at the government level. The West Ger-
mans are concerned about the weakness of the Socialist
Party organization vis-a-vis the Communists, and Brandt
will probably take a close look at the political situa-
tion in Portugal for the guidance of party and government
planners in Bonn.
Swedish Prime Minister Palme and Norwegian Foreign
Minister Frydenlund will visit Portugal from October 25
to 27, accompanied by representatives from their respec-
tive trade union organizations. Both leaders are expected
to offer aid, in addition to discussing ways to help the
Portuguese develop a democratic trade union movement,
Norway's labor organization already has plans to begin
training Portuguese trade unionists in Norway.
French Socialist leaders are concerned about the
apparent inability of the Portuguese Socialists to moder-
ate the dominant influence of the Communists, The Portu-
guese Socialists have appealed to their French counter-
parts to persuade the French Communist Party to intercede 25X1
with the Portuguese Communists and suggest a softer less
aggressive line
e French ocia fists are
wi ing to oblige and believe that the French Communists
will be equally anxious to prevent "Stalinist" behavior
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5 25X1
National Intelligence Bulletin October 19, 1974
by the Portuguese Communists.
any real influence over the Portuguese party, which has,
11
party in Europe.
emerged as the most "Stalinist communist
The British Labor Party has maintained close ties
with the Portuguese Socialists since the coup, particu-
larly with party leader Mario Soares, who is also-foreign
minister. The British have offered the Portuguese party
organizational and technical help, which the Portuguese
welcomed but have not yet followed up. As its latest
gesture, the Labor Party invited the Portuguese Social-
ists to send observers to the recent British election.
25X1
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
National Intelligence Bulletin
October 19, 1974
Prime Minister Trudeau carries his drive to diver-
sify Canada's foreign relations to Paris and Brussels
next week, but he will. probably be disappointed with
the response.
The Canadian Prime Minister will meet with Presi-
dent Giscard and French officials on Monday and Tuesday
and then go to Brussels for talks with EC and NATO of-
ficials. Trudeau's main goal is to get increased eco-
nomic ties with the EC as part of his policy to decrease
Canada's heavy dependence on the US.
The Paris meetings are designed to signal a warm-
ing of Canadian-French relations, which have been cool
since De Gaulle made remarks favoring Quebec separatism
during his visit to Montreal in 1964. Trudeau will also
try to overcome French reservations about Ottawa's at-
tempt to.work out some type of "contractual arrange-
ment" with the Nine.
In Brussels, Trudeau wants a joint announcement
about the opening of Canadian-EC negotiations. The EC
foreign ministers, however, failed to agree at their
meeting last Wednesday on either the need or desira-
bility of a trade agreement or "contractual link" with
Canada. It was chiefly the French who objected to
making a decision now to proceed with negotiations.
The Council did agree on a joint statement for
Trudeau's visit that refers only to the importance
of strengthening Canadian-EC ties in ways to be nego-
tiated in the future. This falls far short of the an-
nouncement Trudeau wants.
It will be up to Ottawa to clarify to the Nine the
type of arrangement it is seeking. The EC can then
probably find some way of partially satisfying the Cana-
dians with an arrangement that may be more symbolic
than substantive.
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
I I
National Intelligence Bulletin October 19, 1974
USSR-Pakistan: Pakistani Prime Minister Bhutto's
visit to Moscow next week will overlap Secretary Kissin-
ger's. Bhutto is scheduled to arrive in Moscow on Octo-
ber 24 and leave on October 26; the timing of his visit
was arranged by Moscow. Bhutto, who was last in Moscow
in 1972, had hoped to go to the USSR as early as June of
this year, but the Soviets abruptly postponed his visit
twice.
Ira -Czechoslovakia-Ital : Iraq is attempting to
purchase armore personnel carriers (APCs) from Czecho-
slovakia and Italy, probably to mechanize one of its in-
fantry divisions. Negotiations with Czechoslovakia for
100 OT-64 APCs began in Baghdad early this month. Bagh-
dad is also negotiating with Rome for 200 M-113-Al APCs,
which are manufactured under a US licensing arrangement
that calls for Washington's permission for third country
sales. The US did sell 200 of these APCs to Iraq in the
early 1960s. The Iraqi army has about 1,450 APCs,
largely of Soviet and Czech design.
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
National Intelligence Bulletin
October 19, 1974
PORTUGAL
The Bulletin today prints in abbreviated form the
principal judgments of an interagency memorandum on Por-
tugal, dated October 17.
With Spinola's fall, the political balance in Por-
tugal has shifted to the left. The process was helped
by the Communists, but the shift does not necessarily por-
tend a Communist takeover, certainly not in the short
term. The pace and nature of recent events have, however,
shortened the odds on orderly liberalization by raising
the possibility that a. leftist authoritarian regime will
emerge or, through a countercoup, an authoritarian regime
of the right.
The Armed Forces Movement, the most critical ele-
ment in the Portuguese equation, is made up of generally
younger officers numbering somewhere between 250 and
1,000. Some almost certainly are Communist Party mem-
bers. Most appear to want to liberalize Portugal along
modern European lines, although they are divided over
how far and how fast this should go. The top leadership,
headed by Prime Minister Goncalves, is markedly leftist.
Costa Gomes ' Role
President Costa Gomes, clearly central to the imme-
diate future orientation of the government, remains some-
thing of an enigma.
spread oyes ty from 'the armed forces than Spinola.
The Communists are the best organized and discip-
lined political grouping in Portugal and have developed
a strong position in the labor unions and local govern-
ments. They have been able to win a greater degree of
respectability than might have been expected, partly
because of their conspicuously responsible behavior in
such matters as helping the government end or avoid
strikes. -15-
He appears to command much more-w-1-die--
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
I I
National Intelligence Bulletin
October 19, 1974
Of the other political forces, the non-communist left
shows limited ability to develop mass appeal. The Social-
ists are divided internally: Marxists and progressive
Catholic factions favor cooperation with the Communists,
while social democrats, including Foreign Minister Soares,
press for a more independent line.
The center remains disorganized and lacks nationally
recognized leaders. The church is disposed to support
liberalization in Portugal, but church leaders disagree
over how to interpret the political upheavals and are
moving cautiously.
The Military's Role
The armed forces remain the most powerful element
in the Portuguese picture and may in the end arbitrate
the direction the country takes. The military apparently
is divided into three factions:
--Conservatives who supported the Caetano regime,
only some of whom have been purged.
--The leftist leadership of the April coup, centered
in the Armed Forces Movement.
--Centrists who supported the coup for a variety of
reasons but who would oppose a Communist takeover.
If elections are held as scheduled next spring,
some of the political uncertainties may be resolved, but
there is no guarantee that elections will be held. The
absence of effective political institutions and the
threat of additional destabilizing political and eco-
nomic events could easily lead to a return to authoritar-
ian rule, either left or right.
Reaction to either could conceivably give rise to
armed strife, though this is essentially unpredictable.
Military loyalties are divided, reflecting many of the
political divisions elsewhere in Portuguese society.
-16-
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
National Intelligence Bulletin October 19, 1974
Portugal's economic health will condition its po-
litical fortunes. Economic stability depends in large
part on a return of business' confidence in a stable
environment in which to operate, while the ability of
Portugal to reach and survive free elections is heavily
dependent on avoiding economic disaster.
If extrication from the African territories is
smoothly carried out, a heavy economic burden will be
eased, and the mutually beneficial economic relationship
between Portugal and the territories should survive with-
out serious disruption.
Portugal as a US Ally
The outcome of the political struggle in Portugal
will determine its future role in NATO and as an ally of
the US.
Portugal's chief military importance to NATO lies
in the strategic value of some of its islands and terri-
tories. Madeira, the Cape Verde Islands, and especially
the Azores are strategically situated with respect to
Allied air and sea routes. The US base complex at Lajes
will continue to be important throughout the 1970s, above
and beyond NATO-related commitments.
The provisional government continues to affirm its
intention to retain membership in NATO, to deal in good
faith with the US over the Azores base in return for
substantial military and economic aid, and to achieve
closer association with the EC.
It seems probable, however, that the issue of Por-
tuguese policy toward the US is the subject of divided
opinion within the Armed Forces Movement and the provi-
sional government itself. A moderate government would
almost certainly maintain NATO and US ties, though its
price for the Azores facilities would be higher and it
might impose greater restrictions on US use of them.
A government dominated by forces of the far left would
be likely to weaken or break those ties.
The provisional government might move to de-empha-
size Portugal's ties with NATO and the US, while seek-
ing to strengthen relations with the EC and the social
democratic parties and governments of Western Europe.
Approved For Release 2007/10/23: CIA-RDP79T00975A027100010004-5
 Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5
Top Secret
Top Secret
Approved For Release 2007/10/23: CIA-RDP79T00975AO27100010004-5