CURRENT INTELLIGENCE BULLETIN - 1956/03/15

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03185111
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: March 15, 1956

Approved for Release: 2019/10/21 C03185111
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CURRENT
INTELLIGENCE
BULLETIN
DOCUMENT NO
15 March 1956
Copy No. 103
3.5(c) A
3.3(h)(2)
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ts.
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NO CHANGE IN CLASS 1233
El DECLASSIFIED
CLASS. CHANGED TO: IS S C
NEXT REVIEW DATE.
AUTH: HR 70-2
DATE. g0 REVIEWER
2-0( 0
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
J
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CONTENTS
1.
2. COMMUNIST MILITARY CONSTRUCTION NOTED ON
rISLAI7 NEAR NATIONALIST-HELD WUCHIUS
(page 4).
3. NATO BASE AT KEFLAVIK TO BE MAJOR ISSUE IN
ICELANDIC ELECTION (page 5).
4. USSR OFFERS TO DEVELOP YUGOSLAV COPPER MINE
(page 6).
5. BURMESE COMPLAIN TO PEIPING ABOUT FAILURE TO
PROVIDE GOODS FOR RE-EXPORT
(page 7).
6. BRITAIN TO ASSIGN NEW OFFICERS TO THE ARAB
LEGION (page 8).
7. GENERAL STRIKE IN BAHREIN
15 Mar 56
* * * *
(page 9).
THE ARAB-ISRAELI SITUATION
(page 10)
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or :_,Euts..L.1 Alitt
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2, COMMUNIST MILITARY CONSTRUCTION NOTED ON
ISLAND NEAR NATIONALIST-HELD WUCHIUS
considerable Chinese Communist mil-
itary activity on Lutzu Island, ten miles
northwest of the Nationalist-held Wuchiu
Islands, between Matsu and Quemoy.
Numerous coastal defense and artillery positions have been
completed and others are under construction. The island is
crisscrossed by antitank ditches, and four barracks have
been built.
Comment
little
Communist activity and no artillery positions
on Lutzu. Some of this construction involves defensive prep-
arations, but the ready-
ing of artillery posi-
tions indicates that
the Communists may
be preparing to in-
crease pressure on
the Wuchius, current-
ly garrisoned by about
500 Nationalist guer-
rilla forces. Chinese
Communist attacks
on Ichiang Island, in
the Tachen group, in
late 1954 and early
1955 included artil-
lery fire from a small
island immediately to
the north.
W.Rou
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14 MARCH 1956
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WUCHIU5'
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Yinehan
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The Nationalist
navy has shelled Lutzu
several times in re-
cent months, fearing
that the Communists
might be preparing to
bring the Wuchius under
fire from the island.
15 Mar 56
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3. NATO BASE AT KEFLAVIK TO BE MAJOR ISSUE IN
ICELANDIC ELECTION
The Icelandic Progressive Party's deci-
sion to leave the Conservative-Progres-
sive coalition government points to an
early summer election in which the status
of the US-manned NATO air base at Keflavik would be the ma-
jor issue. Iceland will in the interim probably be ruled by
some form of caretaker government under the present Con-
servative prime minister.
The Progressive Party, a non-Commu-
nist, largely agrarian, party that formerly supported the base,
has been led by strong popular sentiment to advocate a revi-
sion of the Defense Agreement of 1961 with the United States so
that the base can be "manned by Icelanders."
The Progressives hope to form an elec-
tion alliance with the Social Democrats, who hold similar
views on the base. The Communists will try to expand such
an alliance into an all-leftist coalition under the aegis of the
Icelandic Federation of Labor, which they control.
Growing reluctance of the Conservatives
to defend the base before a generally hostile public suggests
that their support of the Defense Agreement in an election
campaign would be lukewarm at best.
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4. USSR OFFERS TO DEVELOP YUGOSLAV COPPER MINE
Russia has offered Yugoslavia
$50,000,000 for developing the
Majdanpek copper mining complex,
the loan is offered at
two percent for 25 years with the interest payable in
crude copper, finished copper, or currencies beginning
the sixth year.
Comment Yugoslavia to date has declined to
export copper ore to the Soviet bloc.
In their current negotiations with the
French for financing the Majdanpek projects, Yugoslav
officials have said that although Soviet terms are more
favorable, they prefer to deal with the West.
Yugoslavia proposed to
France and the United States that France supply an $18,000,000
credit at 5 percent to cover imported equipment, and that local
costs, equivalent to $40,000,000, be supplied from US-held
dinars acquired through Yugoslav counterpart payments.
Yugoslavia, Europe's largest copper
ore producer, has for many years sought to modernize the
Majd.anpek complex. The $50,000,000 Soviet offer would pre-
sumably cover the entire cost of the project, including local
expenses as well as foreign exchange purchases. Last Sep-
tember the USSR was reportedly willing to supply foreign
exchange credits, but refused to finance local expenditures.
(Concurred in by ORR)
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I Ul" 3LA.-1(1", I
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5. BURMESE COMPLAIN TO PEIPING ABOUT FAILURE
TO PROVIDE GOODS FOR RE-EXPORT
the Chinese Communists had not
carried out Chou En-lai's "repeated
aisurande" that Chinese goods would be made available
to Burma for re-export to other countries.
proper lists and prices on such goods had not been
provided and asked the Burmese ambassador in Peiping
to "intervene" with the foreign trade minister and, "if
advisable," with Chou En-lai.
Comment Peiping's stalling on the question of
goods for re-export probably stems
from a desire to deliver a maximum amount of goods for
consumption in Burma. China is trying to develop a
market for light manufactured and industrial items there
as well as in other South and Southeast Asian countries.
The Burmese also are concerned over China's re-export
of Burmese rice to Ceylon.
Burma could probably itself absorb
all of the approximately $15,000,000 worth of Chinese goods
it is committed to take through next September in exchange
for rice deliveries, but it would prefer to realize some
foreign exchange from the transaction. Its balance-of-
payments position promises to be extremely tight again
this year.
In trade negotiations with Pakistan,
Burmese officials have cited their dissatisfaction with bar-
ter arrangements- a feature of Burmese trade with the
Communist bloc. (Concurred in by ORR)
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1 7.*
6. BRITAIN TO ASSIGN NEW OFFICERS TO
THE ARAB LEGION
London will relieve those officers
assigned to the Arab Legion to
whom Jordan originally objected,
but will detail new officers to the
Legion, according to a British War
Office official. Approximately the number serving be-
fore Glubb's dismissal on 1 March will thus be main-
tained.
Comment The British are evidently still examin-
ing the possibilities of continuing to
maintain some special influence in Jordan, but it is likely
that officer replacements would be in advisory rather than
command positions. The American embassy in London
believes that the British are unlikely to terminate the sub-
sidy for the present.
Despite pressure from Egypt, Syria
and Saudi Arabia, Amman has said it wants to use British
officers and retain the annual subsidy.
15 Mar 56
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7. GENERAL STRIKE IN BAHREIN
The general strike now in effect in
the Persian Gulf sheikdom of Bahrein
is primarily political in motivation,
aimed at the local ruler and his British
adviser. The strikers are led by the "Higher Executive
Committee," a reformist group which is demanding the dis-
missal of the adviser and the immediate arrest and trial of
the "persons responsible" for ordering local police to fire
on demonstrators on 11 March, an action which resulted in
five deaths. The current flare-up was preceded by mob
violence during the visit of British foreign secretary Selwyn
Lloyd on 2 March.
The "Higher Executive Committee's"
basic demand is that it be recognized as a body which the
ruler should consult concerning the government of the
sheikdom. The ruler has so far resisted this demand, and
appears to be relying on British naval and air force units
which were reinforced 12 March,
Foreign employees have maintained the
operations of the American-owned Bahrein Petroleum Com-
pany. The strike is relatively peaceful, but unless the re-
form group's demands are met at least in part, further vio-
lence seems almost certain.
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401ktJI N..,c/cr, I
THE ARAB-ISRAELI SITUATION
(Information as of 1700, 14 March)
The Jordanian chief of staff
has issued an order to all Arab
Legion brigades and National Guard units that the same re-
straint exhibited by the Legion on the border in the past would
be observed and fire would not be returned unless absolutely
necessary.
The return to Egypt of some of the Egyp-
tian military personnel who have received training in the Soviet
bloc is scheduled for the latter part of March. Some 200 Egyp-
tian naval officers and noncommissioned officers have been re-
ceiving training under Soviet supervision in the Polish port of
Gdynia, and some Egyptian army and air personnel are also be-
lieved to be training in Czectoslovakia.
Agents fdr Israel are reportedly negotiating
the purchase of 34 British Vampire let fiEhters each from Sweden
and Norway,
ressure is building in Israel for purchase of Soviet
arms, ife believes such a deal may be in the making.
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