CURRENT INTELLIGENCE BULLETIN - 1957/03/12

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03150412
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 14
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: March 12, 1957

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CURRENT
INTELLIGENCE
BULLETIN
12 March 1957
Copy No
!DOCUMENT NO.
:ANGL :N
t-�!EXT RENALW DAP'.
AUTH: Hi; 741-21
DATE rirv't REVIEWER:
131
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
77/ 0,13.
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4-1 Li 'Le � IL-4
CONT:ENTS
I_ GAZA STRIP SITUATION
2� THE SITUATION IN JORDAN
(page 5).
(page 3).
I\A)3. RUMORS OF FRENCH MUITARY SUPPORT FOR ISRAEL
(page 6).
V,4. SITUATION IN INDONESIA
0�
(page 7).
y\ 5. SARIT MOVING TO CONSOLIDATE POSITION IN THAILAND
0" (page 8),
6. 'POLES FEAR NEW SOVIET PRESSURES
(page 9).
k 7. SOVIET GOLD SALES EXPANDED
14v (page 10).
pkt,, 8. SOUTH VIETNAM ANTICIPATES ACCELERATION OF VIET
MINH TERRORISM (page 11).
h
, 9. OVERSEAS CHINESE-VIETNAMESE RELATIONS
(page 12).
UI lo. JAPANESE REACTION TO F.AIRLESS COMMITTEE PRO-
POSALS FOR ASIA (page 13).
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=time
1. GAZA STRIP SITUATION
Comment on:
Egypt's announcement that it intends to
take over administration of the Gaza
strip from the UNEF "forthwith" will
have a most serious immediate impact
on Israel, whose foreign minister stated
on 5 March that Egypt's return to Gaza "in any way, shape
or form" would bring into force Israers own "right" to move
its forces back into the strip. In Israel's present temper,
the Ben-Gurion government is likely at the very least to
demand additional assurances from the UN and from the
Western powers that such a development will not be per-
mitted to occur.
The Egyptians, who are not known to
nave any military forces in Sinai other than a few frontier
force units at scattered points, are unlikely to attempt a
forcible take-over. They will almost certainly seek to
keep up or increase the tempo of demonstrations against
UN control, which UN spokesmen in Cairo have asserted
are exaggerated by Egyptian propaganda. To add to the
UNEF's problems, Egyptian authorities apparently are has-
tening the return of refugees to the strip.
about 3,000 refugees had left El Arish
for the Gaza sector that day and that the dispatch of a greater
number was expected. It is probable that among these ref-
ugees are the agents who are promoting unrest and organ-
izing public demonstrations in favor of Egyptian return to
the strip.
In formally appointing an administrative
governor of Gaza, the Cairo government appears interested
in maintaining its position under the terms of the 1949 ar-
mistice agreement and may send its appointee into Gaza if
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only as a symbol. It may follow up its complaint to the UN
secretary general over the UNEF's "opening fire" on civil-
ians in Gaza by requesting that the UNEF withdraw to stations
on both sides of the Egyptian--Israeli frontier. Israel has,
however, already categorically rejected the suggestion that
UN troops be stationed on its territory.
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2. THE SITUATION IN JORDAN
Comment o
Reports tnat tormai termination oi tne
Anglo-Jordanian treaty is imminent
again raise the prospect of a new round
of political maneuvering between King
Hussain and the Jordanian government.
The exchange of notes formally terminat-
ing the treaty reportedly is to take place
between 12 and 15 March. The British
ambassador in Amman has recommended
acceptance of Jordan's offer of about
$12,000,000 for all British installations
and equipment to be left in Jordan, Al-
though the British had estimated that the
value of such items would be about $37,000,000, the Jordanian
offer will probably be accepted since there is no prospect of
a more favorable settlement. Egypt and Saudi Arabia, ac-
cording to Arab press reports, announced on 4 March that
Jordan could "immediately" draw the funds pledged by those
countries.
Despite his wish to obtain the resigna-
tion of ultranationalist Prime Minister Nabulsi, King Hussain
himself is under growing pressure in connection with the
nationalist-ridden army's reported design to take over the
police�now one of Hussain's principal props. In addition, a
new cabinet crisis has developed as a result of demands by
leftist Minister of State for Foreign Affairs Rimawi that he be
made foreign minister in Nabulsi's place. Despite this evi-
dence of incipient left-wing moves to limit the power of the
king, Hussain appears confident that he can successfully ma-
nipulate the splits and rivalries within the government. Hus-
sain's reported hope to oust the Nabulsi government is de-
scribed by the French consul in Jerusalem as "fraught with
danger for the crown!'
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3. RUMORS OF FRENCH MILITARY SUPPORT FOR ISRAEL
Comment on:,,
France would support Israel "to
the hilt" if Egypt denies Israel passage
into the Gulf of Aqaba or interferes in the
Gaza strip.
this support would go so far as to include
"military assistance!'
French foreign minister Pineau is reported
to have told the National Assembly Foreign Affairs Commission
on 7 March that Israel would have the right to legitimate self-
defense under article 51 of the UN charter if its ships were not
able to navigate freely in the Gulf of Aqaba,
news and corn-
at Israeland France, secretly sup-
ported by Britain, were preparing an attack against Egypt.
Fawzi added that while those to whom he had spoken considered
such "aggression" improbable, they conceded that the pressure
of events in Israel might bring it about.
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4- SITUATION IN INDONESIA
Comment on:
The reported decision of the Ali cabinet
to resign on 13 March may have been pre-
cipitated by South Sumatra's break with
Djakarta. The cabinet's resignation would
immediately follow the scheduled announce-
ment on 12 March of President Sukarno's
latest version of his "nation-saving concept."
Sukarno is reported to have been negotiat-
ing with former vice president Hatta, who
is both Sumatran and strongly anti-Commu-
nist, apparently to discuss his resumption
of an official post. A working arrangement between the two
would be difficult to achieve, however, in view of their oppos-
ing attitudes on Communist participation in the government
and provincial autonomy.
Meanwhile, tension in East Indonesia is in-
creasing between the territorial commander, Lt. Col. Samual,
and the commander of a special army unit located in Samuars
territory. The commander of this unit, made up principally
of Javanese troops, is directly responsible to Djakarta. This
commander has refused to recognize Samual's 2 March coup
in the area, and the possibility exists that a countercoup will
be attempted.
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5. SARIT MOVING TO CONSOLIDATE POSITION
IN THAILAND
Comment on:
General Sarit, presently the temporary
commander in chief of all Thai military
and police forces, appears to be mak-
ing a strong effort to establish himself
as the strong man of Thailand. Although he has repeatedly
expressed his loyalty to Premier Phibun,
now has let it be known that
he would back another man for the premiership unless he
was satisfied by Phibun on a number of demands. Chief
among these is a desire to assume permanent command of
the armed forces, inclusion of more of his supporters in the
new cabinet, and the complete elimination of police director
general Phao's faction from public positions. With regard
to Phao, Sarit is said to be planning to keep the emergency
in force until he is sure that the police chief will not "try
anything," and to arrest him if he does.
Phibun probably hopes to work out a
new balance between the Phao and Sarit factions, in order
to maintain his own position. For the moment, however,
he appears to be acceding to Sarit's demands, and is re-
ported to have stated that he would agree to Phao's removal.
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yr' Awe
6. POLES FEAR NEW SOVIET PRESSURES
Polish foreign minister Rapacki's re-
cent visit to Moscow, ostensibly to sign
a treaty concerning the Baltic Sea fron-
tier, has aroused popular fears of re-
newed Soviet pressures on Poland. Gen-
eral opinion in Warsaw is that the actual
purpose of his trip is a "more important
and dangerous" matter
The Soviet ambassador to Poland has
been in Moscow for more than a. month, possibly to partici-
pate in the preparation of a new Polish policy,
Comment While so far Gomullca's concessions to the
pro-Soviet faction of his party are in ac-
cord with his own views and his efforts to restore party unity,
he would probably resist further Soviet demands, particularly
any interference in Polish economic affairs.
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7. SOVIET GOLD SALES EXPANDED
Comment on:
uring the first two months of 1957,
Soviet gold sales in Western Europe
reportedly totaled $120,000,000, about
two thirds of estimated Soviet annual
gold production. In its peak year, 1953,
the USSR exported only $150,000,000.
The sales were about evenly divided be-
tween Swiss and British money markets.
most of the proceeds from the sales in London
have been used to augment Soviet dollar holdings in the US.
During the period of these gold sales, the USSR transferred
over $57,000,000 from its bank in London to New York accounts
of Banque Commercial pour L' Europe du Nord, the institution
handling most of the Eastern European Satellite foreign ex-
change dealings.
These transactions apparently result in
part from Soviet agreement to provide the foreign exchange
for the payment of East European debts to non-Communist
countries. The USSR may be augmenting its US dollar balances
in expectation of increased Satellite dollar purchases under So-
viet foreign exchange loans.
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8. SOUTH VIETNAM ANTICIPATES ACCELERATION OF
WET MINH TERRORISM
The South Vietnamese government has
issued an alert against possible Viet Minh
sabotage in the Saigon area, the American
army attache reports. According to a
4 March memorandum from chief of staff
General Ty, the government has been informed that the Viet
Minh is considering a plan to destroy Saigon's electric power
plant to facilitate other acts of sabotage and uprisings in the
ensuing darkness. Government agencies were requested to
take immediate steps to provide the facilities for generating
emergency electrical power.
Comment The assassination attempt against Presi-
dent Diem last month, a suspected coup
plot in the armed forces, and the recent increase in dissident
activities have raised fears in Saigon that an organized terror-
ist campaign by the Viet Minh aimed at overthrowing the Diem
government is developing.
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9. OVERSEAS CHINESE-VIETNAMESE RELATIONS
Comment on:
Saigon's last-minute extension by one
month of the deadline for implementing
a decree requiring all Chinese born in
Vietnam to accept Vietnamese citizen-
ship appears to have only temporarily averted a serious
crisis in South Vietnamese-Chinese Nationalist relations.
Noncompliance with the nationality requirement, announced
last August, has become a rallying point for passive resist-
ance by the Overseas Chinese to various government decrees
aimed at subordinating their economic and political independ-
ence to the Saigon government. Taipei, fearful that its failure
to intervene would only benefit Peiping, has vigorously inter-
ceded on behalf of the Overseas Chinese in a vain effort to
work out a compromise solution with Diem.
Diem, however, has shown no disposition
to back down on has goal of "Vietnamization" of the local
Chinese. Unless some "face-saving" solution is achieved
before the new deadline of 8 April, rising agitation among
the nearly 1,000,000 Chinese in South Vietnam could lead to
communal violence.
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CONFIDENTIAL
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CONFIDENTIAL
10, JAPANESE REACTION TO FAIRLESS COMMITTEE
PROPOSALS FOR ASIA
Japanese press and trade circles are
skeptical of the Fairless Committee pro-
posals for an Asian common market, the
American embassy in Tokyo reports.
The Asian common market proposal is
felt to be premature because of Southeast Asia's lack of
economic capacity and its political instability. Furthermore,
there is some fear that regionalization of trade through var-
ious common markets would create economic blocs which
would be detrimental to world and Japanese trade.
The Japanese favor co-ordination of
economic aid programs, interpreting this to mean US-
Japanese co-operation in Southeast Asian development.
They cite the "long history of past Japanese failures" to
evoke American interest in such a scheme, however, as
evidence that no concrete developments are likely.
Comment The Japanese are giving priority to re-
establishing their economic position in
Southeast Asia but are concerned lest an aggressive approach
on their part be interpreted in Southeast Asia as an effort at
economic domination.
The Japanese feel that the European Com-
mon Market will inevitably work to their disadvantage, and
apparently have decided to oppose any restrictive aspects
which develop.
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