CURRENT INTELLIGENCE BULLETIN - 1957/03/29

• Document Type: SPECIALCOLLECTION
• Keywords: 2018 Sanitization
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03160436
• 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 29, 1957

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29 March 1957
Copy No. 131
OFFICE OF CURRENT INTELLIGENCE
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CONTENTS
A. EGYPT PLANS INTERNATIONAL CONFERENCE IF CANAL
MEMORANDUM IS REJECTED (page 3).
2. SAUDI ARABIA TO INSTALL COAST DEFENSE GUNS ON
GULF OF AQABA (page 4).
3. CAIRO ORDERS CO-OPERATION WITH UN IN GAZA
(page 5).
4. MAKARIOS RELEASE POSSIBLE PRELUDE TO NEW CYPRUS
NEGOTIATIONS (page 6).
/ 5. SOVIET STATEMENT ON ISRAELI AND FRENCH "PROVOCA-
TIONS" (page 7).
JAPANESE SEEK REVISIONS OF MILITARY TIES WITH THE
UNITED STATES (page 8).
7. HUNGARY RETURNING TO STALINISM
(page 9).
P, 8. USSR PROPOSES $200,000,000 BARTER ARRANGEMENT TO
SPAIN (page 10)0
-9. SERIOUS TROUBLE FORECAST FOR FRANCO REGIME
(page 11).
ANNEX--Conclusions of the Watch Report of the Intelligence
Advisory Committee (Noforn Except
(page 13).
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1. EGYPT PLANS INTERNATIONAL CONFERENCE IF
CANAL MEMORANDUM IS REJECTED
Reference:
Ali Sabri, Nases chief political ad-
iser, stated on 27 March that if
Egypt's memorandum on the Suez
Canal meets an unfavorable response
from a majority of the nations who received it, the only
alternative will be to Call an international conference of
interested nations. These nations presumably would be
chosen and invited by Egypt. Sabri said the Egyptian gov-
ernment anticipated an unfavorable reaction from Britain,
and especially from France, but that it had no intention
of calling a conference merely to satisfy one or two "mal-
contents."
Sabri said the memorandum as it
stands is the product of Nasr's talks with UN Secretary
General Hammarskjold and also reflects some Indian ideas.
The Egyptians expect comments from the recipients--the
United States, the USSR, India, Yugoslavia, Syria, Jordan
and Saudi Arabia--and are willing to modify the memorandum
to meet "reasonable" comments "compatible with Egyptian
sovereignty."
In emphasizing Egypt's intention to keep
politics out of the canal and to run it as a business, Sabri
stated that Israeli ships would be the exception since Israeli
passage of the canal would be tantamount to political suicide
for the Nasr regime. He said any decision by the Interna-
tional Court of Justice favoring Israeli transit of the canal
would simply be rejected.
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2. SAUDI ARABIA TO INSTALL COAST DEFENSE GUNS
ON GULF OF AQABA
Comme:nt
Eight coast defense guns together
with ammunition were reported in
northwest Saudi Arabia on 19 March
en route to Haqa,l, a Saudi port about
25 miles south of Aqaba and head-
quarters for Saudi forces in the north-
ern gulf area.
Although Saudi Arabia has refused to
recognize the rights of Israeli ship-
piag in the gulf, it has thus far lacked the means to offer ef-
fective opposition. Saudi forces along the gulf have been
supported by a few 25-pounder artillery pieces (88-mm. )--
including at least two at Shaikh Hamid at the entrance to
the gulf. The only navigable channels through the strait,
however, are near the Egyptian shore and beyond the ef-
fective range of these weapons. Some of the new guns
will probably be emplaced to cover the entrance to the
gulf, and others north of Haqal to fire on the approaches
to the Israeli port of Eilat.
The source of these coastal guns, and
their caliber, is unknown. Saudi Arabia has been negotiat-
ing for coastal artillery with Spain, Syria and Egypt.
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3. CAIRO ORDERS CO-OPERATION WITH UN IN GAZA
Reference:
The joint Arab command in Cairo or-
dered Major General Latif, Egyptian
governor of Gaza, on 25 March to
"work to settle the situation in accord-
ance with the Egyptian government's
policy by 'providing all suitable facilities for the interna-
tional forces and their headquarters, in the present cir-
clunstances."
While Cairo previously professed an
intent to co-operate with the UNE F,
Egypt intended to create difficulties
for the UNEF.
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4. MAKARIOS' RELEASE POSSIBLE PRELUDE TO NEW
CYPRUS NEGOTIATIONS
Comment on:
London's release of Archbishop Makarios
from exile in the Seychelles, announced
on 28 March, will probably result in new
negotiations with him over Cyprus future.
A Colonial Office official said on 27 March,
however, that the British are not disposed
to start new negotiations immediately,
partly because of Turkish opposition, and
will not allow Makarios to return to Cyprus. The Colonial
Office said Makarios was released because the British are
"heartily sick of carrying him like an albatross around their
necks," but it believes he is not likely to co-operate on anything
less than early enosis.
While Britain has published a statement
from Makarios which includes a demand for direct conversa-
tions between the British government and the Cypriots, Colo-
nial Secretary Lennox-Boyd prefers to seek the "good offices"
of NATO first, but indicated talks with Makarios and other
Cypriots would be considered later. Many officials believe
Makarios is the only leader capable of obtaining any Cypriot
co-operation on the Radcliffe constitution. Pressure for early
talks with Makarios would be increased if EOICA leader Grivas
accepts the safe-conduct to leave Cyprus offered by London on
28 March. Any negotiations would presumably be based on the
Radcliffe constitutional proposals for limited self-government.
If Makarios goes to Athens, however, which
he is now free to do, the Greek government will be seriously
embarrassed and the attendant propaganda will retard progress
toward any solution.
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5. SOVIET STATEMENT ON ISRAELI AND
FRENCH "PROVOCATIONS"
Reference:
The TASS statement of 28 March that
the Soviet government "resolutely con-
demns" alleged Israeli and French
preparations for a "new aggression
against Egypt" may have been inspired
by a Saudi request.
The TASS statement is another Soviet
attempt through propaganda to cater to Arab prejudices; it
makes no specific threats of Soviet action, but merely points
to the "heavy consequences for the cause of peace" of any
Israeli action. The USSR is apparently anxious to avoid an
outbreak of fighting since it probably believes that the pres-
ent impasse is more conducive to achievement of its objec-
tives in the area.
Soviet ambassador to Israel Abramov,
who was recalled to Moscow last November, is reported en
route to Israel via Paris. The USSR will probably seek to
convince the Arabs that Abramov's return will aid in a re-
newal of Soviet pressures on Israel.
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6, JAPANESE SEEK REVISIONS OF MILITARY TIES WITH
THE UNITED STATES
The Japanese Foreign Ministry is now
drafting proposals for revisions of
present US-Japanese military agree-
ments which would call for specific
limitations on (1) the number of American bases in Japan,
(2) the Japanese financial contribution to their maintenance,
riod for United States control
Prime Minister
Kishi also wants an agreement on joint use of the bases by
Japanese military forces.
A high government official says that
Kishi, for political reasons, must obtain tangible conces-
sions during his prospective visit to the United States. In
addition to concessions on bases, Kishi may seek relaxa-
tion of strategic trade controls, control over some aspect
of the administration of Okinawa, or permission for natives
of the Bonin Islands to return from Japan.
Comment Kishi feels he must demonstrate his
"independence" of the United States in
order to counter the opposition Socialists' charges that he
is too pro-American. At the same time, he would like to
demonstrate to his own conservative party and to the public
that he commands the respect and has the backing of Amer-
ica.
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7.. HUNGARY RETURNING TO STALINISM
Comment on:
Hungarian premier Kadar's speech in
Moscow on 27 March indicates an un-
abashed return to Stalinism and offi-
cial adulation of the USSR in Hungary.
Kadar said that some policies in Hun-
gary during the Stalin-Rakosi era--particularly the regime's
treatment of the bourgeoisie--were too lenient, and that Ra-
kosi's mistakes were overshadowed by his "lasting achieve-
ments."
Kadar and Soviet premier Bulganin
raised the possibility of a Stalinist-type show trial by their
vigorous denunciations of Imre Nagy for treason to state
and party. They also charged Yugoslavia with involvement
in the Hungarian revolution. Bulganin claimed to have evi-
dence that Nagy was plotting against the state long before
October 1956. Bulganin's charge that Yugoslav leaders gave
Nagy "practical support" above and beyond propaganda and
moral aid is the first such Soviet attack, and will probably
provoke a violent Yugoslav response.
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8. USSR PROPOSES $200,000,000 BARTER ARRANGEMENT
TO SPAIN
Reference:
The Spanish cabinet has under considera-
tion a Soviet proposal for a $200,000,000
barter arrangement, according to the
Spanish Foreign Ministry. The proposal
provides for the exchange of Spanish goods for Soviet tractors
and machinery.
The USSR has made numerous other over-
tures in recent months for a restoration of diplomatic and
trade relations with Spain. In view of Spain's current econom-
ic difficulties, the Soviet offer may prove hard to resist. The
Spanish may regard it as an excellent lever to speed up US ac-
tion on Madrid's request for $25,000,000 to $30,000,000 worth
of industrial raw materials and machinery from the United
States. It is unlikely, however, that the Spanish government
would agree to any formal diplomatic or economic relation-
ship which does not satisfy Spain's claims to the $500,000,000
in gold which the Spanish Republican government sent to Mos-
cow during the Civil War,
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9. SERIOUS TROUBLE FORECAST FOR FRANCO REGIME
Retiring Spanish foreign minister
Martin Artajo told American charg�
Byington on 26 March that he felt
there was "trouble in store" for the
government unless it could achieve a greater degree of
liberalization and get closer to the people.
Byington believes that the critical
economic situation may worsen. He points out, however,
that Martin Artajo's decision to remain in Madrid rather
than accept an ambassadorial post abroad indicates that
he does not expect any major political upheaval.
Comment The regime's failure to stem the mount-
ing inflationary threat has aroused in-
creasing concern throughout the country. There is growing
worker unrest over the rising cost of living and continued
student hostility to restrictions on freedom of thought and ex-
pression. The Church has also shown signs of wishing to dis-
sociate itself from a government that is becoming increasingly
unpopular, and military leaders fear the possible results of
Franco's refusal to arrange for an orderly succession of pow-
ers.
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CORRECTION TO ITEM 2, PAGE 4, OF CURRENT INTEL-
LIGENCE BULLETIN DATED 28 MARCH 1957
The first sentence should read: "The Shah of Iran told
a competent American observer on 23 March that he had
initialed an oil agreement with the Italian government-owned
oil company--Ente Nazionale Idrocarburi (ENI)--on terms
more favorable to Iran than other oil agreements."
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ANNEX
Watch Report 347, 28 March
of the
Intelligence Advisory Committee
Conclusions on Indications of Hostilities
On the basis of findings by its Watch Committee, the
Intelligence Advisory Committee concludes that:
A. No Sino-Soviet bloc country intends to initiate hostilities
against the continental US or its possessions in the imme-
diate future.
B. No Sino-Soviet bloc country intends to initiate hostilities
against US forces abroad, US allies or areas peripheral
to the Orbit in the immediate future.
C. A deliberate initiation of hostilities against Israel by the
Arab states is improbable in the immediate future. Israel,
though apparently still relying on diplomatic measures,
may at any time renew hostilities if faced with one or more
provocations, such as an introduction of substantial Egyp-
tian military forces into the Gaza strip, a renewal of ex-
tensive fedayeen raids, or an attempted denial of passage
for Israeli shipping through the Straits of Tiran. Other
unsettled issues and tensions in the Middle East, espe-
cially in Syria and Jordan, also constitute possibilities
for violence.
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