NATIONAL INTELLIGENCE DAILY (CABLE) 16 AUGUST 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000400010158-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 21, 2016
• Document Release Date: August 25, 2008
• Sequence Number: 158
• Publication Date: August 16, 1982
• Content Type: REPORT

Director of
Central
Intelligence
National Intelligence Daily
(Cable)
Top Secret
Top Secret
CPAS NIDC 82-191 C-1
 Special Analyses
Syria: Assad and the Crisis in Lebanon . . . . . . . . . 9
Libya: Failure of 0AU Summit . . . . . . . . . . . . . . 11
 Approved For Release 2008/08/25 : CIA-RDP84T00301 R000400010158-9 25X1
Top Secret
ISRAEL-LEBANON: Cautious Optimism
(Information as of 2300 EDT)
25X1
The Israeli Chief
of Staff denied his forces are moving far into northern Lebanon. 25X1
//Only minor firing incidents occurred e erday in Beirut
Most of the limited exchanges of fire in Beirut
yesterday occurred in the southwestern sections of the
city. Israeli aircraft overflew Beirut several times on
//An Israeli military spokesman reported that Pales- 25X1
tinians had fired on Israeli positions in the Bekaa Valle
at Al Mansurah Saturday night,
//Commenting on the allegations of recent Israeli
troop movements in northern Lebanon, Israeli Chief of
Staff General Eitan yesterday told the US defense attache
in Tel Aviv that a brigade of paratroopers and infantry
reserves had moved north and east of Beirut as a contin-
gency against any breakdown in the evacuation of the PLO
from Beirut. He said Israeli units are in Juniyah but
denied that there are any Israeli troops farther north
in the Juba 1 area.
troop movements last week that e elieves cou
signa Syrian reinforcement in northern Lebanon. The
Top Secret
1 25X1
25X1
 //The entry of new Syrian forces into northern Lebanon
has not been confirmed.
The US defense attache toured Beirut International
Airport on Friday and found that the north-south runway
could be made usable by jet aircraft within 24 to 48 hours.
He believes C-130 transports could use it now, although
it has a minor accumulation of debris on the surface and
some craters. The southwest-northeast runway, which is
more cratered and littered, will take longer to repair.
The Israeli cabinet yesterday responded to Ambassador
Habib's latest proposals, conveyed earlier to Prime Min-
ister Begin, by making major concessions on the PLO with-
drawal plan. 25X1
According to press reports, Israeli officials said
the cabinet had agreed to allow the French contingent
of the multinational force to arrive in Beirut at the
start of the Palestinian evacuation. The French Govern-
ment facilitated the cabinet decision by promising to 25X1
Israel still demands the PLO return a captured
Israeli pilot and the bodies of nine Israelis
Lebanon.
 Comment: Israel, Lebanon, and the PLO seem to have
reached basic agreement on the terms for a Palestinian
withdrawal from West Beirut. The PLO is unlikely to let
the issue of the Israeli pilot's return prevent imple-
mentation. 25X1
Some additional bargaining may be necessary regard-
ing the Syrian regular troops in Beirut. I
Saudi Foreign Minister Saud arrived in Damascus
yesterday for talks with Syrian leaders. President Assad
is certain to request Saudi financial aid to defray the
costs of accepting the Palestinians, and the two sides
will discuss ways of advancing a permanent settlement of
the Palestinian issue. The prospects for renewed Syrian-
Israeli fighting in Lebanon and the Iran-Iraq war will
 Thursday's prohibition of further dollar withdrawals from
locally held bank accounts and temporary suspension of all foreign
exchange trading will limit for a time the drain on official foreign
reserves
Despite the strengthening of the peso at midweek,
capital flight had continued and official foreign reserves
Under the new regulations, holders of foreign ex-
change accounts--mostly dollars--have continued access
to their accounts. only by exchanging them for pesos at
Comment: The government suspended dollar bank
account withdrawals to assure that oil income would be
used to pay for foreign debt service and priority imports,
and not to finance private capital flight. The Bank of
Mexico had counted more than $8 billion of the $12 billion
It could not long sustain a run on these funds.
Oil revenues of about $1.3 billion monthly will be
adequate to pay public-sector debt service and avoid a
public-sector debt rescheduling. Even with subsidized
private-sector interest payments, an increasing number
of private firms may reschedule their debt repayments.
To finance priority imports for the rest of the year, the
government will have to borrow $4-6 billion on private
Prohibiting dollar withdrawals will end the private
sector's access to Bank of Mexico foreign reserves, but,
by aggravating the crisis of confidence, it will s ur
capital flight from other sources.
To the extent that President-elect de la Madrid is
viewed as the architect of the latest financial moves, 25X6
continuing crises may also chip away at the mandate he
received in last month's election
If the liquidity crisis continues, Mexico may be
forced to tighten exchange controls further and eventually
 CHINA-JAPAN: Increased Pressure on Textbook Revisions
China yesterday issued an authoritative People's Daily
editorial that stepped up its criticism of Japan's revi-
sion of textbook coverage of World War II, but Beijing
continued to underscore a desire for a rapid solution to
the dispute. The editorial--commemorating the anniversary
of Tokyo's surrender in 1945--also pointed fo "reactionary"
war movies, the rites at the Yasukuni war memorial shrine,
plans to revise the constitution, and attempts to estab-
lish official relations with Taiwan as further examples
of efforts by a small group of individuals to rev
Japanese militarism and imperialism in East Asia.
Comment: Beijing stopped short of directly threat-
ening to postpone Prime Minister Suzuki's trip to China
next month but again indicated the necessity for a suit-
able response by Tokyo on the textbook issue to avoid
damage to Sino-Japanese relations. The widened attack,
moreover, suggests China will remain suspicious of the
motives of conservative elements in Japan's ruling Liberal
Democratic Party whom it apparently blames for the current
 //Diplomats in Beijing
Comment: A trip by Kim to China would be consistent
with the improvement in Sino - North Korean relations
over the past year. P'yongyang sees a need for more 25X1
Chinese support to offset South Korea's generally im-
proved ties with the US. The Chinese have been more
forthcoming in publicly backing North Korean policy goals
and have played down their own emerging economic contacts
with Seoul. Whether or not Kim's trip materializes may
depend in part on his reading of how far the Chinese 25X1
might be willing to go in providing more military and
economic aid and in backing his plans for transferring
 Despite Syria's humiliating setback in Lebanon, President
Assad stiZZ has cards to play and will try to play them to regain
lost credibility. At the same time, he will watch carefuZZy for
signs that Syria's poor showing has encourage d his domestic opponents,
especially among the military ranks. 25X1
Assad probably will end up accepting the PLO leader-
ship and a contingent from Beirut, if only to regain some
leverage over the organization and deflect Arab criticism
of Syria's showing in Lebanon. Nonetheless, a larger
Palestinian Presence in Syria could pose danger for him.
Some guerrillas may try to infiltrate back into
northern Lebanon, which could complicate the second-stage
The Palestinians also may try to 25X1
renew their support of Assad's domestic opponents. Assad
blames the Palestinians for helping to spark the bloody
Assad will try to gain maximum control over the
Palestinians, and they will fight equally hard to remain25X1
i dependent Tie
cally difficult, at least at the outset, to deal with the
Palestinians too harshly. (C)
Syria's large military presence in Lebanon remains
Assad's major asset. Assad evidently intends to use this
issue to enable him to play a key role in the negotiations.
He probably is resigned to pulling his forces back but
not before receiving some political bonus in exchange.
 Assad will try to use the Syrian presence in the
Bekaa valley and northern Lebanon as leverage to gain an
Israeli withdrawal from Beirut and the Lebanese approaches
to Damascus. The President, however, is likely to avoid
new fighting with Israel and instead rely on the residual 25X1
Syrian military presence and widespread fears of a Phalan e
takeover to rebuild his influence in Lebanon.
Guarding Against Israel
Assad probably realizes, however, that ultimately
his ability to recoup in Lebanon depends on his willing-
ness to engage the Israelis militarily. If the Israelis
move to evict Syrian forces from Lebanon, Assad may risk
large-scale fighting in the hope it would prompt the
superpowers to intervene to bring about a settlement.
In this case, Assad's ultimate goal would be a new
peace process, set in motion by the superpowers, in which
he could gain a settlement on the Golan or absorb Syrian-
controlled parts of Lebanon in return for the Israeli
occupation of southern Lebanon. Although he probably
will continue to try to limit the Soviet presence and
prerogatives in Syria, he may try to persuade Moscow to
send Damascus at least a token military contingent in the
hope that this would put pressure on the US to rein in
If the Soviets believed the Israelis intended to
destroy Syria's armed forces and topple Assad, they prob-
ably would agree to his request. Any force they sent,
however, would be small and deployed well away from the
fighting in order to minimize the risks of a clash with
 The collapse of the OAU Summit in Tripoli earlier this month
over the issue of admitting the PoZisario Front has been profoundly
frustrating for Libyan leader Qadhafi, who had long been counting
on the prestige he would gain as OAU Chairman. The humiliation
probably will strain Libyan relations with AZaeria and the PoZisario
Qadhafi has blamed the US for the debacle, but he
probably is in a quandary over his next actions. He has
not yet given up hopes of salvaging a summit at a later
date, although he may not be able to refrain from re-
prisals against moderates that would only aggravate the
The Libyan leader evidently considered convening a
rump session of radical OAU delegations but ultimately
took pains to distinguish the meetings that were held
from official OAU sessions. Instead, a five-member com-
mittee was set up to try to arrange a full summit later,
and a declaration was issued in Tripoli similar to a
A breakaway summit of radicals probably remains a
possibility, if no progress is made in resolving the
Polisario admission issue. Such a meeting is less likely,
however, now that the delegations have left Tripoli and
the moderates again have a voice in the consultations and
For all his anger, Qadhafi has to realize a rump
session of the OAU would merely harden the division in
the organization, reduce the likelihood of future compro-
mise, and leave him even further from his goal. He would
not be recognized as OAU Chairman by most Africans or by
those members of the international community he most wants
Qadhafi is likely to keep the summit option--and his
hopes of future chairmanship--alive by a mixture of pres-
sure and persuasion directed toward states that failed
him at Tripoli. The summit was only about four votes
short of a quorum, and such a strategy could pay off.
 Clear retaliation would doom his efforts, alienating
both the targets of his maneuvers and a number of African
states whose good will he needs. If a summit is eventually
convened elsewhere or if Qadhafi's hopes are definitively
dashed in some other manner, however, he may express
frustration by acts of subversion or terrorism, against
The collapse of the Summit is likely to cool Libya's
relations with Algeria and the Polisario. The head of
the Upper Voltan delegation has said Libya did its best
to save the session by persuading the Polisario repre-
sentative to step aside, but Algeria and others insisted
on the principle that "revolution cannot be bartered."
Algeria also is said to be leading a drive to hold an
alternate summit soon in Addis Ababa, perhaps to deprive
Algeria, despite its ostensible alliance with Libya
in the radical Arab Steadfastness Front, probably is just
as happy to see Qadhafi deprived of the OAU chairmanship.
Algeria will also welcome worsened Libyan relations with
the Polisario, now that Qadhafi has revealed his willing-
Tripoli seems to be making an effort to keep the
full dimensions of the summit collapse from the Libyan
people. The media acted as though nothing had gone awry.
Nonetheless, the regime has been unable to keep the
word from spreading. If it becomes widely accepted that
Qadhafi is so despised that African leaders refuse to
attend a summit under his auspices,, domestic support for
 Although the situation remains fluid, the odds are
growing that Qadhafi will not be able to host another
summit. Africans may realize the Polisario question has
a better chance of resolution if it is divorced from the
emotional issue of Qadhafi's chairmanship.
An extraordinary summit could be convened to settle
the Polisario issue somewhere other than Tripoli. In
any case, if it becomes clear to Qadhafi that the chair-
 Approved For Release 2008/08/25 : CIA-RDP84TOO301 R000400010158-9
Top Secret