NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026800010006-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 19
• Document Creation Date: December 20, 2016
• Document Release Date: September 7, 2006
• Sequence Number: 6
• Publication Date: July 20, 1974
• Content Type: REPORT

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Top Secret
National Intelligence
Bulletin
State Dept. review completed
DIA review(s) completed.
Top Secret
20 July 1974
Copy N2 631
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National Intelligence Bulletin
July 20, 1974
CONTENTS
CYPRUS: Turkish forces have landed on Cyprus. (Page 1)
FEDAYEEN: Palestinian radiobroadcasts condemn recent
Egyptian-Jordanian communique. (Page 3)
SPAIN: Routine functions of state temporarily transferred
to Prince Juan Carlos. (Page 5)
IRAQ-EGYPT: Baghdad appears to be moving toward rapproche-
ment with Egypt. (Page 6)
USSR: Soviets reportedly "thinking about" unilateral
force reductions in Warsaw Pact countries. (Page 7)
PORTUGAL: The new cabinet is believed to be somewhat
left of its predecessor, but not markedly so. (Page 9)
FRANCE-NATO: Paris negative on association with NATO's
Eurogroup. (Page 10)
ITALY: Labor leaders stop just short of directly de-
fying government on austerity policy. (Page 11)
EGYPT: Large infestation of cotton worm threatens
harvest. (Page 12)
LAOS: Still no solution to political vacuum caused by
Prime Minister's illness. (Page 13)
USSR-JAPAN-US: Prospects improve for tripartite venture
to exploit Sakhalin oil deposits. (Page 14)
FOR THE RECORD: (Page 15)
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National Intelligence Bulletin
July 20, 1974
Turkish forces landed on the northern coast of Cy-
prus at dawn this morning.
The US embassy in Nicosia reports that Turkish para-
troops are being dropped in the vicinity of Nicosia, in-
cluding the Turkish sectors of the city, roads leading
to the landing areas on the northern coast, and the air-
port. Evidently, the Turks plan to secure an area in the
capital and then to link up with forces advancing inland
from the coast. They are apparently attempting to secure
the main road from the landing area to Nicosia.
Turkish Prime Minister Ecevit, in a public announce-
ment this morning, said the decision to invade was made
after Ankara had explored all diplomatic means to solve
the problem caused by the Greek-engineered coup on Mon-
day. Turkey's immediate goals are to stabilize its
forces on the island and then to negotiate. Ecevit said
Turkish forces would not fire unless fired upon.
Turkish leaders reportedly do not care who is pres-
ident of Cyprus as long as he is a moderate. Most Turks
agree, however, that they would not support the return
of Archbishop Makarios. Of all the prominent Greek Cyp-
riot politicians, the Turkish Cypriots would be most
comfortable with Glafcos Clerides, president of the House
of Deputies and Makarios' constitutional successor.
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The special session of the Security Council yester-
day listened to Archbishop Makarios' appeal, but passed
no resolution. Support appeared to be eroding for the
strong resolution that Makarios demanded calling for the
withdrawal of Greek National Guard officers and recogni-
tion of himself as the legitimate head of government.
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July 20, 1974
Virtually all fedayeen groups have condemned the
Egyptian-Jordanian communique issued Thursday at the end
of King Husayn's visit to Cairo. Palestine Liberation
Organization Chairman Yasir Arafat's dominant Fatah
group has labeled it a "retreat" from the position
adopted at the Arab summit last November that the PLO
is the sole representative of the Palestinian people.
The head of the Syrian-controlled Saiqa group reportedly
said it reflected decisions taken without Palestinian
participation or consideration of their views. Predic-
tably, the smaller, more radical fedayeen groups were
much more vehement in their denunciations.
The Palestinians fear that the communique' will be
construed by Egypt and other Arab states as allowing
Jordan to speak for Palestinians who live on the Israeli-
occupied West Bank. Their criticism is directed pri-
marily at President Sadat, who offered significant sup-
port for the resolution on the PLO passed at the Arab
summit.
Arafat himself appears to be withholding public com-
ment on the Egyptian-Jordanian statement, pending the out-
come of the talks he is expected to hold with President
Sadat in Egypt this weekend. Arafat almost certainly
will plead that Sadat disclaim any interpretation of
the communique that would give Amman freedom to negoti-
ate an Israeli withdrawal from the West Bank without the
cooperation of the PLO.
The most that Arafat can realistically expect, how-
ever, is a pledge from Sadat that Egypt will leave am-
biguous the status of the West Bank, and perhaps a com-
mitment that the question of Palestinian participation
in the Geneva peace talks, which Sadat and Husayn agreed
should occur at an "appropriate time," will not be al-
lowed to slip into the indefinite future. In statements
made over the past few months, Sadat has gone on record
as saying that he will not agree to additional steps to-
ward a settlement on the Sinai front until there has
been some movement in negotiations on the Palestinian
question.
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Arafat, whatever stand Sadat takes, will not be
able to deviate from the position that the PLO repre-
sents all Palestinians. Until he can produce evidence
that Jordan is prepared to make concessions to the
fedayeen, moreover, Arafat will continue to have diffi-
culty marshaling Palestinian support for direct talks
with Husayn or for allowing Palestinian participation
in a Jordanian delegation to future sessions of the
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The sudden relapse suffered by General Franco yester-
day apparently has raised serious questions about pros-
pects for his recovery and led to the decision to transfer
temporarily to Prince Juan Carlos the routine functions of
chief of state.
Juan Carlos will not become king unless Franco dies,
is declared incapacitated, or retires. If Franco dies,
or it is necessary for the cabinet and the Council of
the Realm to declare him incapacitated, the Regency
Council--made up of three senior government, military,
and church officials--must within eight days convoke a
joint session of the Cortes and the Council of the Realm
to witness the swearing in of Juan Carlos as king. Juan
Carlos would also assume the title of Supreme Commander
of the Armed Forces and nominally that of the National
Movement, a function which he delegates to the prime
minister.
Yesterday, Juan Carlos performed his first official
act by signing the joint declaration of principles on
European defense cooperation with the US. Meanwhile,
Madrid remains calm, according to the US defense attache,
but the security alert reportedly has been reinstated.
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IRAQ-EGYPT
Baghdad appears to be moving toward a rapprochement
with Egypt aimed, at ending Iraq's isolation within the
Arab world because of its opposition to a Middle East
peace settlement.
Press ent
Sa at s personal representative, Ashraf Marwan, and Iraqi
leaders agreed during Marwan's recent visit to Baghdad
to a general improvement in relations between the two
countries and to begin immediate cooperation in several
fields, including petroleum and construction. The
Egyptians also claim the Iraqis agreed to supply Egypt
with badly needed spare parts for Soviet military equip-
ment without informing the Russians.
Both Iraqi President Bakr and Saddam Husayn al-
Tikriti, the vice president of the Iraqi Revolutionary
Command Council, reportedly tried to assure Marwan that
Iraq is anxious to rejoin Arab ranks as a "cooperative"
member. Tikriti reportedly also voiced a growing impa-
tience with "heavy-handed" attempts by Moscow to inter-
fere in Iraqi affairs and expressed an intention to move
away from the Soviets. Although the Egyptians may be
exaggerating some of Tikriti's remarks about the Soviets,
there have been other indications in recent weeks that
Baghdad wants to move closer to the Arab mainstream.
Tikriti probably feels he can be more influential in Arab
circles if he joins the club, rather than merely criti-
cizing from the sidelines.
Apart from the obvious benefits of a rapprochement
with an erstwhile Arab opponent, Sadat undoubtedly views
the prospect of improved relations with Baghdad as a use-
ful reminder to Moscow that Cairo is still the political
center of the Arab world. He probably feels that it
could also have a salutary effect on Syria. The Egypt-
ians have grown increasingly concerned that Syria is
actively opposing Cairo's moderate policies, and they
would like to be able to show Damascus that Egypt can
cement ties with the most radical of Arab states.
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The Soviets, disappointed by the pace of the mutual
and balanced force reduction negotiations at Vienna, re-
portedly are "thinking about" a unilateral reduction in
the forces in "all" Warsaw Pact countries.
According to an East European official, the Soviets
may announce such a reduction at the Vienna talks in
September. They would have great difficulty, however,
getting the Romanians to go along with such a plan. Other
considerations should also cause this report to be treated
with reserve.
Unilateral reduction could hold some attractions for
the Soviets. It would create a psychological climate that
probably would encourage West European countries to reduce
their forces unilaterally, and the Soviets may calculate
that the West's economic difficulties now make reciprocal
unilateral reductions a more likely prospect. The recent
Dutch announcement of possible military reductions is a
case in point.
At the same time, a unilateral reduction carries
risks for the Soviets, if only because the ultimate out-
come would be harder to predict than would the more man-
ageable process of negotiated reductions. The Soviets
would have no guarantee that the West would reciprocate,
and they have made it clear that equivalent reductions are
extremely important to them. Of special Soviet interest,
there would be no assurance that West German forces would
be cut back--a major Soviet goal--and any force withdrawn
unilaterally by the West could later be reintroduced uni-
laterally.
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If the Soviets should go the unilateral route, they
might not withdraw full units and equipment, as they
proposed in their formal statement last November, but
instead cut a large number of smaller units or thin out
forces over a wide area. In this case, it would be dif-
ficult for the West to determine whether there had actu-
ally been reductions.
The Soviets have seemed more interested in institu-
tionalizing the force reduction talks as a negotiating
process than in tangible results. By engaging the West
in negotiations, Moscow maintains some influence on West-
ern defense affairs and gains some leverage with the US.
On balance, therefore, it seems probable that the Soviets
will continue to seek negotiated troop reductions.
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PORTUGAL
The US embassy in Lisbon believes that the cabinet
installed on Thursday is somewhat to the left of its
predecessor, but not markedly so.
The slightly leftist coloration of key figures
among the eight military men in the 17-man cabinet is
somewhat balanced by the departure of certain prominent
leftists, including some who obstructed decisions on
economic and labor laws, The important economic and
finance ministries are held by centrist economists.
The Armed Forces Movement is well-represented in
the cabinet, and its leaders have stated that they want
no more bickering there. They say they will make sure
that this is the last cabinet before the constituent
assembly election, now planned for March.
The new government will undoubtedly move vigorously
to carry out the program of the Armed Forces Movement.
The new minister of interior--a military man--has come
out in favor of elections soon for municipal and parish
councils. Such elections would permit various parties
to unseat the many local authorities installed after
the April coup by the Communist-dominated Popular Demo-
cratic Movement.
Center-leftists are gearing up for the future elec-
tions, but are still competing among themselves. Shortly
after the resignation of Palma Carlos, a new political
party, the Portuguese Social Democratic Party, was an-
nounced; Palma Carlos was one of its 13 founders. The
party, made up primarily of middle class professionals
and calling itself non-Marxist, will focus on economic
problems. According to one of its leaders, the party
decided against joining the centrist Popular Democratic
Party that was represented in the outgoing cabinet, be-
cause that part is center-right and has ties to the
old regime.
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FRANCE-NATO
Paris continues to be uncompromising on its negative
official response to association with-NATO's Eurogroup.
A French official close to Prime Minister Chirac
recently reminded US embassy officers that domestic polit-
ical constraints prevent a move toward the Eurogroup "in
the foreseeable future." French membership in NATO's
Eurogroup--with its clear link to the military side of
the Alliance--would be unacceptable to the Gaullists, on
whom Giscard depends for his parliamentary majority.
Giscard, however, may be under strong pressure from
domestic interests to associate p.
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the French armaments and aerospace industries
fear that France will be cut out of the NATO armaments
market through eventual standardization of arms. This
fear has been heightened by the decision of Belgium, the
Netherlands, Norway, and Denmark to work toward a joint
purchase of replacements for their F-104 Starfighters.
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ITALY
After protracted discussions among the three major
trade union confederations about the government's auster-
ity program, Italian labor leaders have stopped short of
directly defying the government on this issue. Instead,
they plan to press for changes in the measures. Union
leaders did not yield to pressure from militants for a
nationwide general strike, but did designate July 24 a
"day of struggle," at which time local labor leaders will
have the option of calling brief work stoppages.
The unions called for an immediate meeting with top
political leaders to present their requests for modifi-
cations in the austerity program. The changes desired
by.labor are similar to, and in some cases overlap,
amendments to the program now being pushed in parliament
by the Communist Party. Their common objective is to
reduce the impact of the measures on labor and to in-
crease the burden on upper income groups. The Communist
parliamentary effort derives mainly from the party's fear
that its influence with labor would decline if it did
not try to force changes in the austerity measures.
The Communists are following a carefully balanced
parliamentary strategy. They are trying to exploit dif-
ferences within and among the coalition parties to ob-
tain concessions on the austerity measures, while stop-
ping short of causing a formal split in the coalition.
There is some concern in Communist circles, however,
that Socialists in the coalition who support the Commu-
nist effort could precipitate a government crisis by
pressing too hard.
There is room for compromise between the two sides.
The government could accede to a number of labor's de-
mands without seriously undermining its goal to boost
taxes by $4.7 billion. Promises to hold the line on
fuel prices or to increase tax exemptions for lower in-
come groups would not substantially reduce the effective-
ness of the austerity program. Instituting progressively
higher real estate taxes would add to revenues, although
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probably at the cost of reduced savings, rather than
lower consumption. The government could even implement
a national health system if it trimmed other spending.
A few of labor's demands, however, cut into the very
heart of the austerity program. For example, reducing
the increases in utility rates and in employer and em-
ployee health contributions would undercut the program's
objective of reducing domestic demand.
EGYPT
An unusually, large infestation of cotton worm
threatens to reduce significantly the yield and quality
of Egypt's cotton crop--one of the country's major ex-
ports.
Field observations by two American entomologists
confirm that the cotton pest infestation is serious.
Although the Egyptians have taken vigorous measures to
combat the immediate problem of the first generation
of cotton worms, stocks of insecticides at many agri-
cultural field offices are inadequate to control the
second and third. generations expected during late July
and August.
Egyptian officials contend that their efforts to con-
trol the infestation are hampered by delays and shortfalls
in deliveries of pesticides purchased .~7
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There are still no signs of any acceptable caretaker
arrangement emerging to fill the political vacuum in
Vientiane.
Non-Communist Deputy Prime Minister Leuam Insisieng-
may and Pathet Lao Deputy Prime Minister Phoumi Vongvichit
have not been able to agree on how to handle government
business during Prime Minister Souvanna's convalescence,
and this week's regular cabinet meeting was canceled be-
cause there was no agreement on who should chair the
session.
In addition to remaining deadlocked with Phoumi,
Leuam is also at loggerheads with senior non-Communist
leaders over the organization of the Vientiane side's
nascent political front group. Leuam, who is serving
as the front's unofficial chairman, has been insisting
that the group's proposed central committee should con-
sist of a limited number of representatives from the
coalition structure. Leuam's colleagues in the cabi-
net are adamant that the committee must include provin-
cial governors, representatives from various political
associations, and members of the military if it is to
compete effectively with the Pathet Lao.
Although a decision on committee membership has
yet to be made, Leuam's position has further soured
many members of the Vientiane side with his uncertain
leadership. Finance Minister Ngon Sananikone has called
Leuam a "gutless politician." Ngon's suggestion on July
16 that neutralist Interior Minister Pheng Phongsavan
be asked to replace Leuam as head of the front--if the
latter does not back down on the committee issue--report-
edly was favorably received by most members of the
Vientiane side.
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USSR-JAPAN-US
July 20, 1974
A tripartite venture to exploit oil deposits off-
shore Sakhalin Island seems promising now that the Gulf
Oil Company has agreed to participate with Japanese firms
in the project. The USSR and Japan had signed a memo-
randum on the project in April, but Gulf, citing insuf-
ficient return, had refused to participate on an equity
basis.
The Soviets, anxious to get the project moving,
paved the way for the accord signed between Gulf and
Japanese firms. Under the terms, Gulf is to provide
technical and managerial services and put up a share of
the risk capital, as yet undetermined. In return, the
Soviets agreed to enter into a contract with Gulf for
exploration of a separate section of the Sakhalin con-
tinental shelf, which may involve Japanese participation.
Under the terms of the April Soviet-Japanese agree-
ment, Japan would provide the Soviets with $100 million
in credits over five years to finance exploration. An
additional $100-million Japanese credit for another five
years of exploration may also be forthcoming if both
sides agree. In return, Japan will have an option to
buy 50 percent of any oil found.
Although the size of the Sakhalin reserves is un-
known, they are believed to be quite large. Exploration
and development will be difficlut, however, because of
ice floes and high tides in the Sakhalin offshore area.
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Czechoslovakia - West Germany: Czechoslovakia and
West Germany on Friday exchanged the instruments of rat-
ification for the treaty of reconciliation signed last
December. The treaty, which finally disposes of the is-
sue of the 1938 Munich Agreement, was worked out last
year after two years of hard bargaining, and re ortedl
with a little prodding from the Soviets.
Mexico: The army's capture of three members of
Lucio Cabanas' guerrilla group in the state of Guerrero
on July 14 is the first sign of success in the three-
week-old campaign to kill Cabanas and rescue kidnaped
Senator Ruben Figueroa. The army's tactic of occupying
hamlets in the area to cut off Cabanas' sources of sup-
ply may have been responsible for the capture of the
guerrillas, who had been sent out to obtain food. Ac-
cording to the prisoners, Cabanas has about 340 men
split into several groups, one of which Cabanas leads.
Mexican security officials doubt that Cabanas has more
than 45 men.
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Top Secret
Top Secret
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