NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A030200010079-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 13
• Document Creation Date: December 20, 2016
• Document Release Date: November 20, 2006
• Sequence Number: 79
• Publication Date: July 19, 1977
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE 0
Tuesday July 19, 1977 CG NIDC 77-166C
AO
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 Approved For Rele
National Intelligence Daily Cable for Tuesday, July 19, 1977.
25X1
25X1 IThe N ID Cable is tor the purpose or Informing
CONTENTS
Page 1
PAKISTAN: Internal Political
Page 4
ISRAEL - EL SALVADOR: Aircraft Sales
Page 6
ARAB BOYCOTT: Effects on Israel
Page 7
USSR: Exercise Karpaty
Page 8
Page 9
Egypt
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RHODESIA: Parliament Dissolved
I Branding the US-UK settlement effort "unaccept-
a e, o esian Prime Minister Smith yesterday dissolved par-
liament and called for a general election on August 31. Smith
stated that he intends to seek a mandate for an independent
settlement based on sharing power with moderate black nation-
//Smith has been under growing criticism from Rho-
desia's whites and particularly from hardliners within his own
party, who believe he has not been moving forcefully enough in
seeking a settlement. Whites are divided, however, over what
form a settlement should take; some are arguing in favor of a
settlement based on the South African concept of separate de-
velopment. The pre-election debate is likely to be particularly
contentious.//
//Smith announced that he could not accept, nor
could he offer to white Rhodesians, any settlement proposal
based on the concept of one-man, one-vote because whites are
outnumbered 20 to 1. Moreover, both he and his security advis-
ers have consistently rejected the possibility of any group
other than the currently constituted Rhodesian security forces
maintaining order during a transitional period to independence.//
//Smith undoubtedly has the full support of his
military advisers, who must have taken into account the pros-
pect of an upsurge of guerrilla operations by the Patriotic
Front in response to Smith's announcement. Smith declared that
his government would increase its operations against the guer-
rillas and was prepared to adopt "ruthless" measures. His secu-
rity advisers apparently are confident they can hold out for
the short term.//
Further incursions into Mozambique--and possibly in-
cursions into Zambia as well--are likely in the near future.
Manpower and equipment shortages are hampering the government's
ability to contain the guerrillas once they enter Rhodesia. At-
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tacks into Mozambique have been successful in disrupting guer-
rilla offensives, however, and such attacks are likely to form
the basis for the government's future operations.
On the political front, Smith apparently believes
that the prospect of an independent settlement will attract
moderate nationalist leaders, such as Bishop Muzorewa and
Ndabaningi Sithole. Both men have sizable support from blacks
in Rhodesia but lack a military base and thus, in Smith's eyes,
should be amenable to a political settlement. Both leaders are
now inside Rhodesia seeking to broaden their popular base of
support. They have publicly rejected any independent settlement
in the past and are likely to distance themselves from Smith's
latest move.
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Pakistan's new military government has stated repeat-
e y that it will hold elections in early October and that it
will surrender power to civilians soon thereafter. The process,
however, may prove considerably more difficult than the gener-
als expected when they seized power two weeks ago. The govern-
ment has decided not to delay trying to acquire a nuclear fuel
reprocessing plant from France.
Chief Martial Law Administrator Zia-ul-Haq said in a
press conference last week that the law and order situation
would have to be "perfect" to hold a fair election. The mili-
tary has already taken steps to limit expected campaign vio-
lence. The campaign will be relatively short, some activities
such as processions will be banned, and the military is trying
to collect weapons from potential demonstrators. Whether the
campaign is violent enough to force cancellation of the elec-
tion will depend more on the politicians than on any precautions
the military takes.
I There has been speculation that former Prime Minister
Bhutto- w ose followers could create widespread turmoil--might
seek to prevent the election. One strategy open to Bhutto is to
boycott the election and thus to present the military with a
choice between cancellation and a meaningless vote. Many Pakis-
tanis believe Bhutto is certain to lose, and he might reason
that an extended period of military rule is to his advantage.
I Bhutto now seems prepared, however, to contest the
election, with "imperialists and reactionaries" two of his main
targets. The US, which he has accused of interfering in Pakis-
tani politics, could well be one scapegoat.
With the military coup, the opposition Pakistan Na-
tional Alliance gained its original demands for Bhutto's re-
moval and a new election. The alliance, however, is suspicious
of Zia, who was generally regarded as Bhutto's man and who has
made some public statements since the military takeover that
could be interpreted as favoring Bhutto.
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I I Speculation that the coup was actually ordered by
Bhutto is probably baseless. Even if Bhutto and Zia were acting
together, pressure on Zia from other senior officers would prob-
ably prevent him from carrying out his part of the deal.
The opposition will regard Zia's willingness to carry
out several promises as indications of his sincerity.
--Zia promised to withdraw troops now fighting pro-
opposition tribes in Baluchistan province. Bhutto's party
swept this opposition stronghold in the last election af-
ter the opposition boycotted it asserting that a fair
election there was impossible. Zia, however, qualified
his promise, saying that the withdrawal should not be so
precipitous as to create a vacuum. The military might
move too slowly to satisfy the alliance.
--Zia also promised soon to release leading politicians
from both sides who are still in custody? He may, how-
ever, try to delay as long as he can in hopes of postpon-
ing the unofficial opening of the election campaign. Some
opposition leaders are unhappy with Zia's decision not to
release Khan Abdul Wali Khan, a leading opposition figure
who was jailed in :1975 on charges of plotting the seces-
sion of Baluchistan and the North-West Frontier--the two
provinces along the Afghan border.
--Zia has announced that the Federal Security Force will be
reorganized. The opposition will want major changes in
this paramilitary organization generally regarded as loyal
to Bhutto--if not its disbanding.
--Zia has appointed a respected judge as chief election
commissioner. The opposition will judge the commission
more by the other members--not yet named---and the exact
powers given the commission.
I lEven if the military does hold an election, the results
may give it second thoughts about handing over power. An alli-
ance victory would threaten to give control of the two frontier
provinces to politicians whom many in the military regard as
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separatists. A close race, or a surfacing of the deep differ-
ences among the nine parties in an Alliance government, would
threaten instability. A victory by Bhutto would raise charges
of collusion between Bhutto and the army, and the Alliance
might take to the streets again.
At this stage, the military seems determined to hand
over power, and no senior officer now seems to have any desire
to perpetuate military rule. Despite the difficulties it could
face, the military will probably make every effort to establish
civilian rule, even if both the election and the new
have serious flaws. It is possible, however, that by
the military might conclude that either the election
sequent transf power will have to be delayed.
ISRAEL - EL SALVADOR: Aircraft Sales
//Air force officials from EZ Salvador met last
week wit an Israeli sales team to discuss the purchase of
Israeli Mirage fighter aircraft and associated military equip-
ment. The proposed purchase could intensify tension between EZ
Salvador and Honduras.//
//The aircraft under consideration probably are
used Mira e IIIs. 25X1
I IIsrael has
a va or with most o its current inventory of 17
jet fighters.//
//In 1973, Israel's sales of fighter aircraft to
El Salvador and Honduras led to an arms build-up between the
two countries. A new sale to El Salvador could provoke a simi-
lar reaction and may intensify tension that developed in 1969
when relations between the two countries were severed over a
border dispute.//
//The acquisition of Mirage aircraft would give
E Salvador a decisive air advantage over Honduras, although
El Salvador's air force would be severely taxed by the mainte-
nance requirements
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I Israeli business and government Leaders have increased
their ca Zs for direct US action against the Arab boycott of
firms doing business with Israel. The boycott has not, in fact,
affected Israeli trade, but it has discouraged foreign invest-
ment in Israel.
The government has been under heavy pressure from the
Israeli press and public to do something about the boycott, and.
has lobbied for US anti-boycott legislation. Israeli officials,
however, have varied their assessment of the actual or potential
damage of the boycott--stressing it when speaking with US of-
ficials, playing it down with potential investors.
I IThe Israelis assert that Arab threats to blacklist
foreign firms are retarding new foreign investment, licensing
arrangements, patent exchanges, and joint ventures and are dis-
couraging foreign participation in trade fairs, trade missions,
and joint chambers of commerce. They also contend that the boy-
cott is uprooting long-established commercial ties with key
foreign firms.
Although the :boycott has not affected trade--commodity
exports have doubled since 1972 and imports have nearly tripled--
it has been a major factor in the drop in foreign investment
from a record $250 million in 1973 to $75 million last year.
According to the US embassy, US investment has all but dried up
and the number of US business visits since the 1973 war has fal-
len drastically.
I
Other factors, including the depressed state of the
economy, however, also have been important in the decline in
foreign investment. The security situation and a recent spate
of business failures, strikes, and embezzlements have tarnished
Israel's reputation with prospective investors. Frequent de-
valuations, moreover, have eroded the yield from portfolio in-
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USSR: Exercise Karpaty
I I The Soviet military exercise Karpaty--announced last
month in compliance with the 1975 Helsinki accord--officially
ended Saturday. The exercise, which began on July 11 and took
place in the Carpathian Military District, was highly publi-
cized in the Soviet press. Although Western countries have
sent military observers to previous exercises, this is the
first time the Soviets invited such observers from West Ger-
many, France, Switzerland, and Italy. These countries, the War-
saw Pact states, plus Yugoslavia and Austria, sent observers.
The Soviets may change their policy of refusing invitations to
NATO exercises that are announced under the Helsinki accord.
The Helsinki accord calls for notification 21 days
prior to maneuvers involving more than 25,000 troops and tak-
ing place within 250 kilometers of a frontier with another
European conference participant. The accord does not, however,
require extending invitations to observers.
I lExercise Karpaty, which coincided with the Helsinki
follow-up talks in Belgrade, may have been designed to under-
score Soviet acceptance of military "confidence-building meas-
ures." In a recent conversation with the Belgian defense at-
tache, the Soviet military attache in Bonn stated that if he
received an invitation to observe the fall NATO maneuvers, he
would accept.
I I Exercise Karpaty was publicized as the largest Soviet
air and ground maneuver in over a year. As many as 27,000 men
were to participate. The exercise apparently featured a series
of demonstrations staged for the observers, including mock tank
battles and a river crossing.
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Egypt
I I In an exclusive interview published yesterday in Egypt's
leading newspaper, President Sadat laid out the basic princi-
ples of Egypt's position on peace negotiations with Israel.
The interview, in conjunction with a speech Sadat delivered
last weekend, was intended to put Egypt's views on record be-
fore the beginning of official talks between President Carter
and Israeli Prime Minister Begin. The tone and emphasis of
Sadat's remarks suggest that he was also trying to make a posi-
tive impression on the US and undercut emotional arguments he
anticipates Begin will -present in Washington.
Sadat broke no new ground and repeated at several
poInts gypt's insistence that Israel withdraw from all occu-
pied territory and allow the Palestinians to establish a state
on the West Bank and Gaza. He stressed, however, that a "drive
toward real peace" would allow Israel for the "first time in
history to live in peace as a Middle East nation with recog-
nized borders."
Sadat also welcomed all Egyptian Jews who have left
since 1948 to return to Egypt with full rights. In extending
the invitation, Sadat stressed that the Arabs' conflict has al-
ways been with the policies of expansionism and "racism " not
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