CURRENT INTELLIGENCE BULLETIN - 1956/08/16

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03193799
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: August 16, 1956

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/ CURRENT
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VI
16 August 1956
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Copy No. 105
DOCUMENT NO
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
3.5(c)
3.3(h)(2)
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CONTENTS
1. EGYPT SEEKING COMPROMISE ON SUEZ CANAL ISSUE
(page 3).
2. FRENCH FOREIGN MINISTRY SEES MILITARY ADVANTAGE
IN DRAGGING OUT SUEZ CONFERENCE (page 4).
3. WEST GERMANS SUPPORT INTERNATIONAL SOLUTION OF
SUEZ PROBLEM (page 5).
4. DEVELOPING BACKLOG OF SHIPPING AT PORT SAID
(page 6).
5. CAMBODIAN POLITICAL SITUATION (page 7).
6. INDONESIAN-SOVIET ECONOMIC RELATIONS
(page 8).
16 Aug 56
* * * *
THE ARAB-ISRAELI SITUATION
(page 9)
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1. EGYPT SEEKING COMPROMISE ON SUEZ
CANAL TARIM!
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.mphasized the desire to find some
)asis for compromise on the Suez Canal
sSue.
Sabri expressed the
opinion tnat since Egypt made a conciliatory gesture in
Nasr's "moderate" press conference on 12 August, it was now
up to Britain to make a similar move.
Sabri said that with adequate assurances
from Britain that it would consider something short of full
international control, Egypt would be willing to consider an
international treaty, to be registered with the United Nations,
guaranteeing freedom of transit of the canal and with full
provisions for sanctions in cases of violations. He expressed
a belief that Egypt could reach an agreement with Britain and
other users of the canal regarding an international convention
regulating canal tolls, and indicated willingness to discuss an
al advisory board with full rights of inspection.
Comment
This is the firmest indication to date that
Nasr is interested in finding a compro-
mise solution to the Suez Canal problem. It is probable that
Ali Sabri intended his remarks to reach the American govern-
ment.
16 Aug 56
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2. FRENCH FOREIGN MINISTRY SEES MILITARY ADVANTAGE
IN DRAGGING OUT SUEZ CONFERENCE
Secretary General Louis Joxe of the
French Foreign Ministry believes the
conference in London concerning Suez
will be difficult and might be prolonged
over several weeks. He told Ambassador Dillon on 13 Au-
gust that this might be advantageous, particularly in that
more time would be available for military preparations.
Dillon says Joxe was "embarrassed" by
the influential Paris newspaper Le Monde's strong opposi-
tion to military action against Egypt. On the other hand,
Joxe stated that there had been "much too much" talk of mil-
itary action in both Britain and France.
Comment Although the Le Monde article and other
French editorial comments indicate a
growing opinion that military action is now more remote and
difficult, the French government still believes that some strong
action must be taken against Egypt. Therefore, France will
probably continue its military preparations as part of its effort
to bring pressure on Nasr to abandon his opposition to any form
of international control.
16 Aug 56
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3. WEST GERMANS SUPPORT INTERNATIONAL SOLUTION
OF SUEZ PROBLEM
Comment on:
ppears that West Germany will
dopt a generally pro-Western position
t the London conference on Suez, but
Ill not endorse retaliation against
gypt. West German state secretary
allstein told American representatives
n 14 August that Foreign Minister
retano would have discretionary author-
ity at the conference. to determine
n the following framework: (1) mainte-
nance of Western solidarity; (2) uninterrupted German ship
traffic through the canal; (3) affirmation of the international
character of the canal as set forth in the 1888 convention, with
freedom of passage supervised or guaranteed by some inter-
national agency.
Bonn officials have expressed the opinion
that while Nasr is a Hitler type of dictator who must be stopped
at some point, it is nevertheless necessary to avoid military
action. They foresee no difficulty in getting agreement on the
principle of international control, but consider that in admin-
istering the canal a compromise would probably be necessary.
American representatives comment that
Bonn's hesitation in giving full support to the three-power posi-
tion arises from fear that Arab states may recognize East
Germany and that West German economic interests in the Mid-
dle East may suffer.
16 Aug 56
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4. DEVELOPING BACKLOG OF SHIPPING AT PORT SAID
A backlog of vessels is now accumu-
lating at Port Said, the northern entry to
the Suez Canal, apparently as a result of
a rush on the part of shippers to get
through the canal before 16 August. There
seems to be some feeling in shipping cir-
cles that as a result of action springing
out of the London conference the canal may
be closed. The situation is further aggra-
vated by the fact that several pilots�of
which there is normally a shortage--are on vacation.
Nasr's intention is to keep the canal operating at
peak efficiency in order to establish Egypt's ability to run the
canal. Unless large numbers of� pilots resign, Nasr will probably
be able to maintain an average flow of traffic. France is re-
ported to be considering withdrawal of canal company techni-
cians, most of whom have signed statements of allegiance to
the company.
16 Aug 56
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5. CAMBODIAN POLITICAL SITUATION
Prince Sihanouk, who is returning
to Cambodia from Europe on 20
August, will have to deal with seri-
ous political difficulties. His follow-
ers, in and out of the National Assembly, are increasingly
torn by factional dissension.
In insisting on dominating political
affairs while refusing to take the premiership himself,
Sihanouk is alienating the experienced and capable lead-
ers needed to assume government portfolios. According
to a Cambodian official highly regarded by the American
embassy, it is difficult to foresee any government of
strength and ability in the near future. For the present,
ex-premier Khim Tit continues in a caretaker role. He
has embarked on an anti-American campaign, apparently
in an attempt to deflect the charges of corruption that led
to his resignation.
Meanwhile, responsible elements fear
that Sihanouk has been thoroughly blinded by the Communists
and fully accepts their assurances of good intent. The mass
of Cambodians undoubtedly are greatly impressed with his
well-publicized "triumphs" in the Communist capitals, and
Sihanouk will remain to them a symbol of their country's
emergence as an independent nation.
16 Aug 56
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6. INDONESIAN-SOVIET ECONOMIC RELATIONS
Indonesian-Soviet talks on the �USSR's,
offer of economic and technical aid
are now taking place in Djakarta, and
the chief Indonesian negotiator believes
an agreement may be signed in a few days. He said the
Indonesians are letting the Russians take the initiative, and
that so far the only clue to Soviet thinking is mention of the
steel mill which the USSR is building for India. The Indo-
nesian Foreign Ministry has stated previously that it would
prefer not to sign the assistance agreement until after Presi-
dent Sukarno completes his trip to the Soviet Union sched-
uled for late August and early September.
Meanwhile, Indonesia's first trade agree-
ment with the Soviet Union was signed on 12 August. It pro-
vides for cash payments and does not establish any value
figure for total trade. Indonesian products listed in the trade
agreement include rubber, copra, and sugar. The Soviet
list includes machinery, chemical products, and medicines.
Indonesia's trade with the Sino-Soviet bloc
amounted to five percent of its total trade in 1955. The Amer-
ican ambassador in Djakarta expects that the volume of trade
between the two countries will continue to be comparatively
small.
16 Aug 56
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THE ARAB-ISRAELI SITUATION
(Information as of 1700, 15 August)
Iraq is continuing on a reduced scale to con-
centrate forces at the H-3 pumping station near the Jordanian and
Syrian borders, according to the American army attache in Bagh-
dad. The movement of these forces started in early July and the
attache believes the original intent was to comply with agreements
between Jordan and Iraq which were made in fear of aggressive
action by Israel. The attache reports widespread rumors within
the Iraqi army, however, that the Iraqi troop concentration is di-
rected against Syria. The forces now include service units, two
infantry battalions_t_wo_coninanms-m-r---- -
craft battery.
reports the extensive call-up of Jordanian National Guardsmen owing
to continued but unconfirmed reports of Israeli troop mobilization.
Jordan is also making frequent checks on roads in the area west
of the Jordan River.
Menahim Beigin, the leader of Israel's second
largest political party, said at a rally on 13 August that "Israel's
very existence is in the balance in the current Suez Canal dispute"
and that if Nasr is not stopped by the West, his next move will be
to liquidate Israel. The party leader said that Israel should an-
nounce its readiness to join Western powers in "delivering a blow
to the Egyptian enemy:' (Press)
16 Aug 56
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