NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029600010034-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 20, 2016
• Document Release Date: August 3, 2006
• Sequence Number: 34
• Publication Date: December 20, 1976
• Content Type: REPORT

FV AAF AW AAW AV AV AW AW Air Air 7
I
TO:
NAME
D ADDRESS
DATE I
NITIALS
2
3
4
ACTION
DIRECT REPLY
PREPAR
E REPLY
APPROVAL
DISPATCH
RECOMMENDATION
COMMENT
FILE
RETURN
CONCURRENCE
INFORMATION
SIGNATURE
REMARKS:
FROM: NAME, ADDRESS, AND PHONE NO.
DATE
CIA-RDP79T00975A029600010034-6
Top Secret
(Security Classification)
CONTROL NO. J
Access to this document will be restricted to
those approved for the following specific activities:
NATIONAL INTELLIGENCE DAILY CABLE
Monday December 20, 1976 CI NIDC 76-296C
DIA review(s) completed.
i
w
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
Top Secret
(Security C
State Dept. review completed
Approved For Release 2007/03/06 : CIA-RDP79T00975AO29600010034-6
 25X1 Approved For Release 2007/03/06 : CIA-RDP79T00975AO29600010034-6
Approved For Release 2007/03/06 : CIA-RDP79T00975AO29600010034-6
 Approved for Release 2007/03/06 : CIA-RDP79TOO975A029600010034-6
National Intelligence Daily Cable for Monday December 20, 1976.
T e NID Ca .e is or the purpose or in orming
senior o als.
CONTENTS
ISRAEL:
SYRIA-EGY
Political Problems for Rabin
PT: Negotiations
Page 1
Page 2
INTERNATIONAL: Wh
eat Harvest
Page 4
Page 6
EGYPT: Gaining Spare Parts
NAMIBIA-ANGOLA: F
actionalism
Page 7
SAUDI ARABIA - WESTERN SAHARA: Dispute
Page 8
EC-TURKEY: Foreign Minister Meet
Page 9
UK: Austerity Problems
Page 10
Approved For Release 2007/03/06 : CIA-RDP79T00975A029600010034-6
 Approved Ford
ISRAEL: Political Problems for Rabin
Israeli Prime Minister Yitzhak Rabin's decision to
break wit his conservative coalition partner--the National
Religious Party--is likely to advance the timetable for holding
national elections, now scheduled for next October, and will
pose a major obstacle to an early resumption of the Geneva
peace talks.
I The break leaves Rabin in charge of a minority gov-
ernmen at controls only 57 of the 120 seats in parliament.
Rabin is likely to demand early elections himself in the hope
of pre-empting a challenge to his leadership of the Labor Party
by Defense Minister Shimon Peres, his principal rival in the
party. Rabin would also hope to forestall the growing strength
of Yigael Yadin's newly emergent Democratic Movement.
Rabin apparently believed he had little choice but to
precipitate a government crisis to arrest the steady erosion of
his political support. He may be calculating that the Labor
Party will now close ranks behind him to avoid a major power
struggle that would further erode the party's popular support.
Although Rabin's decision was based primarily on do-
mestic considerations, his action will seriously complicate ef-
forts to reconvene the Geneva conference by March 1977. It is
likely to take at least three months to prepare for new elec-
tions, should they be called, and Rabin would very likely argue
that he simply had no mandate to commit Israel to peace negotia-
tions before elections.
I I Rabin's political situation is likely to have little
impact on the Arabs' overall negotiating strategy. Although the
principal Arab states are likely to realize that Rabin will have
little inclination to resume negotiations before Israeli elec-
tions, they are likely to continue to press for a resumption of
talks, possibly before and certainly immediately after such elec-
tions.
I The Arabs will also continue to attempt to secure pub-
lic an other international endorsement of a Palestinian state
on at least the occupied West Bank and of the right of the Pales-
tine Liberation Organization to participate from the beginning
in a reconvened Geneva conference.
Approved For Release 2007/03/06 : CIA-RDP79T00975A029600010034-6
 Approved For
J Arab leaders may actually be encouraged by the prospect
ot early Israeli elections. Their chief concern has been that the
US would plead that there could be no progress until after the
Israeli elections next fall; they will now expect that earlier
elections will leave the Israelis with no excuse for delaying the
negotiating process.
I In the meantime, the Arabs, with Egyptian President
a a taking the lead, will want to create the appearance of as
much diplomatic movement as possible. Sadat, who is under more
serious economic and political pressure than Syrian President
Asad, is relying heavily on some negotiating progress within the
coming year to shore up his domestic position and refurbish his
pan-Arab leadership credentials.
At a minimum, Sadat will want to ensure that early,
substantive discussions are carried on with the new US adminis-
tration, with UN Secretary General Waldh im, and with key Euro-
pean leaders.
SYRIA-EGYPT: Negotiations
Syrian President Asad's current visit to Cairo is
being billed by both sides as a major effort to coordinate
Egyptian-Syrian strategies on Middle East peace negotiations,
to enhance Arab solidarity, and to cement bilateral ties. Given
past differences, each man probably still has some reservations
about the other's positions, but they will probably conclude
their sessions in tactical agreement on the direction in which
they want to move.
I I Asad has already set the tone for the discussions by
indicating his readiness to follow Sadat's lead and to support
Egypt's so-called "peace offensive." In an interview broadcast
over Cairo Radio on Saturday, Asad underscored the importance
of resuming the Geneva peace talks. He also strongly supported
Sadat's idea of forming a joint Arab delegation to Geneva that
would include Egypt, Syria, Jordan, and the Palestine Libera-
tion Organization.
I J Sadat is likely to probe Asad's acceptance of Egypt's
negotiating objectives--an end to belligerency in exchange for
the establishment of a Palestinian state composed of the West
Approved For Release 2007/03/06 - -
 Approved For P,,elease 2007/03/06 : CIA-RDP79T00971
Bank and Gaza and Israeli withdrawal approximately to its 1967
borders. Although Asad probably agrees with these objectives,
he is less optimistic than Sadat about the prospects for
achieving such an agreement.
Asad is likely to press for closer Syrian-Egyptian
military cooperation and to encourage Sadat to improve his re-
lations with the USSR in order to reopen the Soviet military
supply line and thus strengthen the Arabs' military options in
case negotiations fail.
Asad has long believed that Sadat has seriously re-
duced Egypt's room to maneuver by cutting ties with the Soviets
and that he has weakened the Arabs' negotiating position by re-
lying almost exclusively on US diplomacy.
The future role of the PLO is also likely to figure
prominently in the two leaders' talks. The Egyptians are still
suspicious of Syrian efforts to replace PLO chief Yasir Arafat
with a pro-Syrian leadership. Although Asad and Arafat appear
to have reached an accommodation for the moment, Sadat is
likely to reiterate his opposition to any move to unseat Ara-
fat that would weaken Egypt's own influence among the Pales-
tinians.
Asad and Sadat will probably explore ways of manipu-
lating the Palestinians to their mutual advantage and of ensur-
ing that the PLO does not become an impediment to Middle East
negotiations. Both are likely to continue to concentrate on 25X1
forcing the Palestinians to moderate their position in an ef-
fort to make it difficult--for the US at least--to deny the
PLO a role in the Geneva conference.
Approved For Release 2007/03/06 : CIA-RDP79T00975A029600010034-6
 Approved ForiRelease 2007/03/06 : CIA-RDP79T00975,P029600010034-6
INTERNATIONAL: Wheat Harvest
I I Record wheat harvests and overall sluggish demand for
wheat have increased competition among exporters in the inter-
national wheat market and lowered worldwide prices.
I The International Wheat Council is estimating world
wheat production at 410 million tons for the 1976-1977 marketing
year, a 16-percent increase over the previous year. The council
estimates that import demand for wheat will fall to 60 million
tons this year from the 1975-1976 level of 67 million tons.
I I The most aggressive exporter now is Argentina. Its
recor -million-ton harvest has resulted in an exportable
surplus of 7 million to 8 million tons. Unless exports increase
prior to its spring grain harvest, Argentina will be faced with
severe storage problems.
Approved For Release 20 - -
 Approved For F4elease 2007/03/06 : CIA-RDP79T00975A09600010034-6 25X1
I lIn an effort to sell its wheat, a very important
foreign-Ac ange earner, the Argentine government has suspended
its wheat export tax. This action, along with aggressive pricing
and the devaluation of the Argentine peso, has enabled export-
ers to capture a larger share of the South American market.
Argentine wheat delivered to Western Europe is currently priced
$8 to $12 per ton cheaper than US wheat.
Argentina has recently dominated Brazilian import
tenders and sold 500,000 tons to Chile and 200,000 tons to
Canada, a very aggressive seller during its summer
and fall harvest season, has since backed off somewhat. We
estimate that Canadian exports will total 12.5 million tons--a
large share of which has already been sold--from a bumper
harvest of 23.5 million tons.
Canada's recent sale of 750,000 tons to China was
the conclusion of a previous agreement and somewhat less than
hoped for by the Canadian Wheat Board. The Board will be push-
ing for a new agreement in 1977. Canada recently sold 500,000
tons of wheat to Egypt after lengthy negotiations.
Late-season improvements in weather conditions have
raised estimates of Australia's wheat harvest to about 10 mil-
lion tons. With an exportable surplus of 8 million tons, the
Australians should become more aggressive in the international
market. The recent devaluation of the Australian dollar does
not appear to have had any significant effect so far on wheat
sales. Australia recently completed sales of 500,000 tons to
China under an old agreement and has been negotiating with the
Chinese for a new wheat purchase agreement.
I In an effort to combat falling world prices and pro-
tect traditional markets, the EC recently increased export
subsidies on soft wheat and wheat flour. EC officials are now
forecasting 1976-1977 wheat exports at 5.6 million tons, up
from earlier forecasts of less than 5 million tons.
Approved For Release 2007/03/06 : CIA-RDP79T00975AO29600010034-6
 25X1
EGYPT: Gaining Spare Parts
progress in negotiations with various British firms for weapons
spare parts and maintenance support.//
25X1 //If significant British assistance is obtained,
Egypt may soon be able to maintain large numbers of its Soviet-
designed medium tanks and MIG-21 fighter aircraft despite Mos-
cow's continuing cut-off of military aid. This would reduce the
pressure on Egypt to make concessions to the USSR in return for
badly needed spare parts and maintenance assistance.//
25X1
US-designed engines. Negotiations apparently are continuing with
the UK and Italy to replace the main gun of the Egyptian T-54,
T-55, and T-62 tanks with a 105-mm. gun that will fire standard
NATO ammunition. This modification would not significantly en-
hance the fighting capability of the tanks, but it would enable
Egypt to obtain ammunition and spare parts from Western sources.//
has shelved earlier plans to refit its tanks with British or
Approved F
//The Egyptians reportedly have made substantial
//Perhaps because of the expense, Egypt apparently
//The US defense attache in Cairo reported late
last mon that Egypt was making considerable progress toward
self-sufficiency in overhauling MIG-21 engines, including the
more advanced R-13 that powers more than two thirds of Egypt's
MIG-21s. The Egyptian air force, along with Rolls Royce advisers,
reportedly will overhaul 25 R-13 engines this year.//
//Only one of the overhauled engines has been in-
performing well. The other overhauled R-13s reportedly will be
held in reserve until the first has been tested.//
stalled in an operational aircraft thus far; it is said to be
//Egypt is still seriously considering the British-
built Hawk jet trainer and light-attack aircraft for production
in Egypt, but first must confer with the three other members of
the Arab Organization for Industrialization--Saudi Arabia, the
United Arab Emirates, and Qatar. the US defense at-
tache in Cairo reported that representatives of the four met in
Cairo last week to discuss feasibility studies for Arab produc-
tion of tactical missiles and a fighter aircraft.//
Approved For Release 2007/03/06 CIARDP 79T00975A02960001003
 Approved Fc
I the competition had been
narrowed to the French Mirage t- the British Hawk. The
four countries reportedly want to delay a decision pending
further study.//
//Successful conclusion of these various efforts
may allow Egypt to extend the lifespan of some key hardware and
perhaps lay the groundwork for a domestic arms industry capable
of producing some sophisticated weaponry. At best, however,
these measures will only slow the erosion of Egyptian military
capabilities.
NAMIBIA-ANGOLA: Factionalism
//The decision by the leadership of the
Namibian nationalist South-West African People's Organization
to switch its support at a late stage in the Angolan civil war
from Jonas Savimbi's National Union to the Popular Movement of
Agostinho Neto has caused divisions within SWAPO ranks.//
1
//Before Angola gained independence, SWAPO
11
supported the National Union, whose base, like SWAPO's, was in
southern Angola. Both SWAPO and the National Union draw most
of their support from the Ovambo tribe, which lives on both
sides of the Angolan-Namibian border.//
I //SWAPO shifted tactics and joined in the
Angolan-Cuban drive that was launched in October against Na-
tional Union bases in southern Angola. Some SWAPO guerrillas,
however, sided with the National Union in resisting the drive,
according to National Union officials.//
//SWAPO leaders may view their support of
ular Movement as an expedient move that will help secure
the Po
p
bases in southern Angola and training assistance from the Cubans
for the fight against South African domination of Namibia.//
//Ovambo tribal ties, nevertheless, could
~
be a source of continuing problems in SWAPO's relations with
the Popular Movement government in Angola.//
Approved For Release 2007/03/06 : CIA-RDP79T00975AO29600010034-6
 Approved Foil
// Irefu- 25X1
gees--mostly vam os-- ave fled to Namibia this year because
of fighting in the border area. According to press reports,
many were extremely upset over SWAPO participation in the fight-
ing alongside the Cuban and Angolan military forces.//
//In addition, President Neto may favor a
large Cuba
taliation.
SAUDI ARABIA - WESTERN SAHARA: Dispute
I I The Saudi effort to mediate the dispute over Western
Sahara is continuing in the wake of last month's visit by Saudi
Crown Prince Fahd to Algeria, Morocco, and Mauritania and the
subsequent meeting in Paris of the foreign ministers of the
three countries. This week, Moroccan Foreign Minister Laraki,
told the US ambassador in Rabat that he had just returned from
Geneva where he had delivered a message from Moroccan King
Hassan to Saudi King Khalid.
I uIn his conversation with the ambassador, Laraki indi-
cated t at the Moroccans would continue to refuse to negotiate
directly with the Polisario Front, which seeks independence for
Western Sahara. Laraki also said he doubts the Algerians are
prepared to alter their insistence that the Polisario Front be
included in any talks.
J Guerrillas of the Algerian-backed Polisario Front are
continuing to operate at will in Western Sahara despite stepped-
up efforts by the Moroccans to curb their activities. Morocco's
antiguerrilla operations have been ineffective because of the
Moroccan's inability to respond quickly to attacks by small,
mobile Polisario units.
I IDespite their ability to evade extensive Moroccan
sweep-an -clear operations, however, the capability of the guer-
rillas is limited to harassment of Moroccan units and bases in
outlying areas. The Moroccans and Mauritanians remain in firm
control of the principal towns, and the estimated 3,000 guer-
rillas are no match for Moroccan and Mauritanian forces in any
direct engagement.
Approved For Release - 11111
-
 Approved For 4elease 2007/03/06 : CIA-RDP79T00975 029600010034-6 25X1
EC-TURKEY: Foreign Ministers Meet
//EC foreign ministers will meet with Turkish For-
eign Minis er Caglayangil in Brussels today to discuss terms
for improving Turkey's association agreement with the Community.
The EC is anxious to demonstrate even-handedness in its deal-
ings with Turkey now that substantive negotiations on Greek
entry are under way.//
//Ankara reportedly does not expect much movement
on specific economic issues, but hopes to reduce strains in
the relationship, which have intensified in recent months.//
//EC foreign ministers reached general agreement
in Brussels last week on a number of measures designed to
break the impasse in negotiations with Turkey. The Nine agreed
that Turkish workers would be given preferential consideration
for jobs that cannot be filled by Community nationals and ap-
proved some minor agricultural concessions.//
//The EC refused Ankara's request for an increase
in the amount of financial aid the Community is offering Tur-
key--about $350 million over five years--but may agree to make
the funds available over a shorter time period. The EC has
also indicated it will not object if Turkey fails to reduce
tariffs on imports from the EC, as the current agreement re-
quires in January.//
//In other matters, Ankara is seeking specific
guarantees from the EC that Greece's entry will not prejudice
a Turkish membership bid or influence Community positions on
issues dividing Greece and Turkey.//
Approved For Release 2007/03/06 : CIA-RDP79T00975AO29600010034-6
 Approved For P,,elease 2007/03/06 : CIA-RDP79T0097
UK: Austerity Problems
//British Prime Minister Callaghan apparently is
concerned that members of his own Labor Party will not support
the government when Parliament begins debate next Tuesday on
the government's new austerity program. Left-wing members of
the Labor Party's parliamentary group reportedly are bitter
and very critical of some of the measures.//
The Callaghan government will survive no matter
now the left wing votes next week because the opposition Con-
servatives are reluctant to take the chance of bringing the
government down at this time and reportedly plan to abstain
during the voting.//
//Abstentions or negative votes from the Labor
Party, however, will demonstrate the vulnerability of the gov-
ernment, which has only a narrow working majority in Parlia-
ment. Callaghan reportedly told the Labor Party legislators
on Thursday that they should put aside their differences and
support the government if they want it to survive.//
//The labor unions, the main support of the Labor
Party and the Callaghan government, have given mixed but gen-
erally positive reviews to the government's new program. Len
Murray, head of the Trades Union Congress, said Thursday that
his organization would continue to support the government's
economic policy.//
//Murray also said that the unions are disappointed
wi e economic package proposed by Chancellor of the Excheq-
uer Healey. Jack Jones, head of the most powerful British trade
union, said, however, that the unions have no alternative but
to support the government.//
//The labor unions do not want to see the Con-
servatives return to power and presumably will find a way to
accommodate the government's plan.
pAp prover or e 131111
-
 r
0
0
0
0
AW AV AV Aar AV AV AW AW AV
tpro ed For Release 2007/03/06 : CIA-RDP79T00975AO29600010034-6
Top
(Security Classification) 0
1
0 0
0 0
0 0
0 Top Secret
0 (Security Classification)
'Jar 'Aff 'Aw 'Aar 'Aff '
Approved For Release 2007/03/06 : CIA-RDP79T00975AO29600010034-6