NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A026800010012-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 22, 2016
• Document Release Date: July 9, 2012
• Sequence Number: 12
• Publication Date: July 24, 1974
• Content Type: REPORT

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Top Secret
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National Intelligence
Bulletin
Too Secret
24 J v 1974
Copy N2 631
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National Intelligence Bulletin
July 24, 1974
CYPRUS-GREECE: Change of governments in Nicosia and
Athens. Page 1)
EGYPT-USSR: Sadat speech carries rather conciliatory
tone toward USSR. (Page 6)
ITALY: Christian Democrats paper over differences.
(Page 11)
PORTUGAL-ANGOLA: Lisbon turns over administrative con-
trol of Angola to the military. (Page 12)
PORTUGAL: Foreign Minister Soares gives assessment of
new government. (Page 13)
ICELAND: Conservative role in new government placed
in doubt. (Page 14)
BURMA: Leader of Burmese insurgent group engaged in
narcotics trade arrested in Thailand. (Page 16)
BANGLADESH: Severe economic situation prompts requests
for emergency aid. (Page 17)
FOR THE RECORD: (Page 18)
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ALBANI7--
he aloniki, '- _ Ankara
ITALY GREECE
`;ifhens'
Salami
tF li.'1 L?:RANEAN SE A
CYPRUS
Mandria
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nternational
airport
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National Intelligence Bulletin July 24, 1974
CYPRUS-GREECE
The changes of government yesterday in Athens and
Nicosia are a tacit admission that General Ioannidis?
hope of engineering a surgically neat coup on Cyprus
failed. The changes seem to hold additional promise
that a negotiated solution will emerge from the talks
expected to begin later this week in Geneva.
The talks had been scheduled to get under way to-
day, but they were postponed as a result of the change
in government in Athens. Despite their assurances that
they have no preconditions, the Turks clearly will in-
sist on retaining the territorial gains they have made,
and they may propose a federal form of government on
Cyprus.
Former Greek prime minister Constantine Karamanlis
was welcomed back to Athens by jubilant crowds last
night -shortly after President Gizikis announced that
the military, which has ruled Greece since 1967, was
turning over power to civilian politicians.
He is expected to form a governmen
Kanellopoulis.
compose of right-of-center politicians, such as former
foreign minister Averoff and erstwhile prime minister
Since his return, Karamanlis has provided few clues
to the policies he will pursue toward Turkey and the
Cyprus situation. In his arrival statement, Karamanlis
asked the Greek people to be prudent, patient, and op-
timistic, noting that regeneration often follows upon
crises in the affairs of nations.
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National Intelligence Bulletin
July 24, 1974
The announcement of the power shift in Athens fol-
lowed by only a few hours the word that Glafkos Clerides,
president of the Cypriot House of Deputies and Makarios'
constitutional successor, had replaced Nicos Sampson as
President. Considered a moderate on the issue of enosis,
Clerides had been widely touted as a possible compromise
candidate to lead the government. One of his first acts
yesterday was to meet with Turkish Cypriot leader
Denktash to seek ways of enforcing the cease-fire.
In New York, Archbishop Makarios expressed pleasure
over Clerides' inauguration, saying that he took over
"with my agreement." Makarios added, however, that he
expected to return to Cyprus in a few weeks to resume
his duties as President. There is no indication, how-
ever, that Clerides sees himself as an interim president.
Both new governments are threatened by cease-fire
violations attributed to Turkish forces. Greek military
leaders again threatened war against Turkey if violations
continue, and military and civilian leaders informed the US
ambassador again last night of their grave concern, de-
manding that the Turkish forces return to the original
cease-fire lines.
The Greek permanent representative to NATO requested
the intervention of NATO Secretary Luns to urge the Turks
to stop cease-fire violations; he likewise requested
British and US intervention.
At the UN, the Greek representative requested an
urgent Security Council meeting to consider Turkish vio-
lations of the cease-fire, particularly Turkish attacks
on the Greek embassy in Nicosia. The Security Council
unanimously adopted a resolution reinforcing its earlier
call for a cease-fire.
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National Intelligence Bulletin
July 24, 1974
After yesterday's frequent clashes, the UN nego-
tiated a new cease-fire last evening that seemed to hold
through the night. As on the previous evening, however,
occasional fire fights and exchanges of small arms fire
occurred. Reports that fighting had resumed early this
morning indicate that the Turks are continuing to push
out from their positions in the Nicosia area.
The major fighting yesterday involved Turkish at-
tacks in Nicosia and Kyrenia, although the Greek Cypriots
continued to make gains in attacks against Turkish Cyp-
riot enclaves. Both sides appear to be moving to improve
positions or gain ground in areas where they have the
upper hand. The UN forces were kept busy throughout the
day intervening to stop the almost continuous battling
in the Nicosia area and to resolve the conflict around
the airport, which threatened to turn into a major battle.
The Turks moved on the airport early yesterday with
a substantial force--estimated at battalion strength.
The quick reaction of the UN forces in occupying the air-
port averted a major conflict. The UN now occupies the
airport in an uneasy truce, the Greeks have been escorted
back to Nicosia, and the Turks hold positions just north
of the airport. The Turks maintain that they do not
recognize the UN protection of the airport and threaten
further attacks.
The fighting in Nicosia during the day mainly in-
volved clashes in the vicinity of the demarcation line
separating the Turkish- and Greek-occupied sections,
with the Turks attempting to move into the Greek zones.
The UN forces became involved in the fighting, but most
clashes were resolved before they could develop into
major fire fights.
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National Intelligence Bulletin
July 24, 1974
President Sadat took a relatively conciliatory posi-
tion toward the Soviet Union in his Revolution Day speech
yesterday. After the Soviets abruptly postponed Foreign
Minister Fahmi's scheduled trip to Moscow two weeks ago,
Sadat initially was inclined to lambaste Moscow publicly.
His speech, however, reflects a more considered judgment
that to do so now might only further harden the Soviet
attitude toward Egypt.
Using a line he has adopted in public since the post-
ponement, Sadat expressed puzzlement over the Soviet at-
titude and over what he called Moscow's inability to
understand that Cairo's better relations with the US do
not mean that the Egyptians wish to cut off ties with the
Soviets. He professed confidence, however, that the mis-
understanding would be cleared up, and affirmed that Egypt
is "anxious to eliminate it." He also made a concession
to Soviet sensitivities over improved ties between Cairo
and Washington, asserting that Middle East peace efforts
will not be confined to one big power.
Sadat's decision to swallow the Soviet rebuff doc-
ilely was undoubtedly not an easy one. In the absence
of a practical alternative source of military equipment
and spare parts, however, Sadat recognizes that he needs
the relationship with Moscow. Moreover, the Egyptians
feel that continued estrangement from the Soviets, coupled
with closer ties to the US, creates problems for Cairo's
relations with other Arabs. This situation also, in
their view, presents an unwanted image to Israel of an
Egypt too tame to warrant further serious moves toward
peace negotiations.
It now appears clear that the postponement of Fahmi's
visit to Moscow represents a Soviet attempt to increase
pressure on Sadat to adopt policies more favorable to the
USSR,
Brezhnev has just completed a
trip to Polan , an he received the French foreign minis-
ter during the latter's visit from July 11 to 13.
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National Intelligence Bulletin
July 24, 1974
Soviet officials have been reticent about discussing
Moscow's motivations for the postponement, but by a series
of small actions the USSR appears to be putting a deliber-
ate chill into relations with Cairo. Since the postpone-
ment the Soviets have:
--given minimal publicity to the just-concluded
visits of the Egyptian minister of industry to
Moscow and a Soviet youth delegation to Cairo;
--canceled the scheduled visit to Cairo of a civil-
ian aerial photographic airplane that had been on
a Middle East sales tour;
The Soviets may well be seeking some indication from
Sadat that he intends to moderate his swing toward the US.
Moscow, for example, might be seeking the removal of Fahmi,
whose positive attitude toward the US has greatly irritated
the Soviets. They may also hope to convince Sadat that
he should drop his opposition to visiting Moscow.
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National Intelligence Bulletin
July 24, 1974
The papering over of differences at the Christian
Democrats' National Council meeting late last week should
postpone further challenges to the party leadership until
the fall. It will also defer the question of closer Com-
munist association with the government.
At the meeting, elements of the Christian Democratic
left made clear their dissatisfaction with the party lead-
ership and policies. They apparently were constrained,
however, by the realization that an open left-right split
within the party at this time could jeopardize Prime Min-
ister Rumor's efforts to steer the government's economic
program through parliament.
As expected, Foreign Minister Aldo Moro played a
key role in keeping the party's fragile unity intact.
Although Moro--the most influential of the party's left-
of-center leaders--is also concerned over the recent
decline in Christian Democratic fortunes, he chose not
to break with party chief Amintore Fanfani at this time.
Moro's decision made it impossible for leaders further
to the left to turn their dissatisfaction into an effec-
tive challenge to Fanfani.
The left joined in supporting a bland resolution
that affirmed traditional party positions in general
terms, pledged support to the Rumor government, and em-
phasized once again the ideological differences that
separate the Christian Democrats from the Communist op-
position. Some left-wing leaders, however, made it clear
during debate that they favored a more open attitude to-
ward the Communist Party. Minister of Industry De Mita
went so far as to call for an undefined "accord" with
the communists, while others labeled the Communist Party
"democratic" and argued that national sovereignty would
not be "wounded" if the party were to enter the govern-
ment.
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I I
National Intelligence Bulletin
leadership and, possibly, for a redefinition of the
party's program---although probably not until after the
July 24, 1974
The Christian Democrats' internal troubles are un-
der control for the moment, but pressures will continue
to build within the party. Moro's support for Fanfani
will probably not last; Moro himself is a likely suc-
cessor should Fanfani stumble. Other leaders--more to-
ward the center of the party--are also maneuvering for
advantage. Some conservative Christian Democrats, such
as Defense Minister Andreotti, are mending fences with
the party left. In short, all of the ingredients are
still present for an eventual reshuffling of the party
summer holiday.
PORTUGAL-ANGOLA
idea of their respective responsibilities.
the local military commander, and both lacked a clear
The Portuguese government has decided to turn over
administrative control of Angola to the military, accord-
ing to an official communiqu4 issued Monday evening.
The government decision does not necessarily reflect
a lessening of Lisbon's commitment to eventual self-
determination for Angola. It was taken in response to
recent civil disturbances--including racial clashes--in
which some 40 persons were killed in Luanda, the terri-
tory's capital. The disturbances lasted several days,
and the local government's inability to respond quickly
and forcefully underscored the need to tighten up lines
of command in the territory.
Although a new civilian governor general was ap-
pointed over a month ago, his authority was split with
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National Intelligence Bulletin July 24, 1974
Foreign Minister Mario Snares has characterized Prime
Minister Goncalves? new government as much more cohesive
than its predecessor and more united on the program it
should follow. The minister told the US ambassador that
the sole objective of the new government is to establish
a democratic society along Western lines, and he appealed
for strong US support.
Soares, the leader of the Socialist Party, stressed
that the most important aspect of the cabinet reorganiza-
tion was the ouster of minister without portfolio Pereira
de Moura, which marked the end of Pereira's People's
Democratic Movement. The movement was ostensibly a coali-
tion group, but Soares characterized it as a Communist
front organized in the hope of gaining a large vote in
the rural regions, where Communism amounts to a kiss of
death. According to Soares, the entire cabinet agreed
that there was no place in the new government for a front
organization.
Soares assessed the eight military officers in the
17-member cabinet as able and patriotic, with no party
orientation. He described them as liberals, and stressed
that none belongs to either the Socialist Party or the
Communist Party.
Soares maintained that the new cabinet would success-
fully speak with one voice, even on the troublesome
economic and labor issues, but his optimism may be pre-
mature. Even though some obstructionists have been removed
more
b
ecome
from the cabinet, its degree of unity will
evident when it produces economic and labor legislation
that was stymied in the previous cabinet.
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National Intelligence Bulletin
ICELAND
July 24, 1974
Independence Party leader Geir Hallgrimsson report-
edly has failed to form a conservative-led coalition.
This leaves the way clear for Olafur Johannesson, the
incumbent prime minister and head of the Progressive Party,
to try his hand at putting together a left-of-center coali-
tion.
Hallgrimsson is expected to concede failure formally
today or tomorrow. President Eldjarn probably will then
ask Johannesson, as leader of the second largest party,
to try to form a government.
Johannesson appears to stand a good chance of reach-
ing agreement on a coalition with the Communist-dominated
People's Alliance, the Liberal Leftist Organization, and,
possibly, the Social Democrats, whose leader was recently
elected president of the new parliament. Socialist chair-
man Gylfi Gislason received the backing of all Icelandic
parties except the Independence Party at a special session
of the Althing on July 22.
Gislason denied that his election was conditional on
bringing the Social Democrats into a leftist government.
Nevertheless, there is speculation in Reykjavik that, as
the new formateur, Johannesson will try to persuade the
Social Democrats to join a four-party, center-left coali-
tion. Johannesson's coalition would control only 30 of
the 60 seats in parliament if the Social Democrats decided
not to participate.
The emergence of another leftist government would
increase the uncertainty concerning negotiations to re-
tain the US-manned NATO base at Keflavik. Nevertheless,
if such a government included the Social Democrats, it
might give the next leftist coalition more balance than
its predecessor
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National Intelligence Bulletin July 24, 1974
Thai police have arrested the leader of a major
Burmese insurgent group that engages in narcotics smug-
gling in the Thai-Burmese border area. The arrest re-
flects growing Thai sensitivity to pressure from the
US and Burma over the activities of rebel groups that
have been operating in northern Thailand with Bangkok's
tacit approval.
Bangkok is holding the Kachin leader, Zaw Seng, on
immigration charges, but has not indicated whether he
will be handed over to Rangoon, as was done with another
trafficker arrested last year. The Kachins' drug smug-
gling activities are on a relatively small scale, com-
pared with those of several. other groups in the area.
There is no indication that the Thais are planning
any moves against the more important drug trafficking
groups, but Zaw Seng's arrest may, nevertheless, create
uncertainty among them and cause some temporary scaling
down of their operations. The Thai deputy foreign minis-
ter told the press this week that firm measures would be
used to curb "illicit activities" of the rebels, and sug-
gested greater cooperation with Burma in dealing with
the problem.
Cooperation. between Thailand and Burma against the
narcotics trade has been minimal thus far, and any agree-
ment on joint action would be an important step forward.
Rangoon has been increasing efforts to disrupt smuggling
activities in the border area.
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National Intelligence Bulletin July 24, 1974
The country's severe economic situation has prompted
Dacca to ask for emergency assistance from previous aid
donors and international agencies. Last month, approaches
for increased assistance were made to US officials, other
donors, and to representatives of several oil-producing
countries.
In its renewed appeals, Dacca describes the country
as being "on the brink of collapse." Foreign exchange
reserves are so low that exporters will not accept let-
ters of credit on the state-owned Bangladesh bank unless
they are backed by a foreign bank. Dacca has been unable
to pay for some purchases and has canceled over 100,000
tons of foodgrain imports.
Dacca wants cash and commodities, including food-
grains, over and above that already scheduled, and would
like to convert project aid into commodity aid. Around
$700 million of aid extended by the US and other donors
is available, but most is tied to specific projects and
cannot be used for commodity imports.
In a related effort, Dacca has drastically liberal-
ized its investment restrictions to attract private for-
eign investment. The new policy raises the limits on
individual private sector investments from $330,000 to
$4 million and drops a 49-percent limit on foreign equity.
A similar equity limit on investment in the public sector
was removed last year. The government also extended its
moratorium on nationalization from 10 to 15 years. In
the event of nationalization after that period, investors
would be compensated on a fair and equitable basis.
The government currently owns about 85 percent of
industry, and the new measures are not likely to lead to
any significant change. Despite the more liberal terms,
ortunities for
few investors are likely to perceive opp
profitable investments in Bangladesh.
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National Intelligence Bulletin
July 24, 1974
Israel-Lebanon: Israeli aircraft bombed fedayeen
targets in southeastern Lebanon yesterday--the first
such strikes since mid-June. Preliminary press reports
indicate that homes and farms in the area were damaged,
but no casualties were suffered. The attacks may have
been to pre-empt. fedayeen military action against Is-
rael.
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Top Secret
Top Secret
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