NATIONAL INTELLIGENCE DAILY THURSDAY 25 JANUARY 1979

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81T00368R000100010048-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 27
• Document Creation Date: December 23, 2016
• Document Release Date: April 7, 2010
• Sequence Number: 48
• Publication Date: January 25, 1979
• Content Type: REPORT

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25 anuary
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Top Secret
Contents
Situation Reports
Iran . . . . . . . . . . . . . . . . . . . . 1
China-Vietnam-Kampuchea . . . . . . . . . . . . 3
Briefs and Comments
West Germany: The Disarmament Issue . . . . . .
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Yugoslavia: Continuing Rivalries . . . . . . . 7
Zaire: Inter-African Force Withdrawal . . . . . 9
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Malta: Aid . . . . . . . . . . . . . . . . . . 10
USSR: Reaction to State of Union Message . . . 11
India: Janata Party Unity . . . . . . . . . . . 12
Palestinians: Council Adjournment . . . . . . . 12
Argentina-Chile: Vatican Mediation . . . . . . 12
Poland: Defense Spending . . . . . . . . . . . 13
France: Ballistic Missile Submarine Program . . 13
European Monetary System: Dispute . . . . . . . 14
Special Analysis
Syria-Iraq: A Temporary Alliance . . . . . . . 15
Overnight Reports . . . . . . . . . . . . . . . . . . 18
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The military governor of Tehran announced Last night
that all Iranian airports will be closed until Sunday.
The decision to close the airports indicates that nego-
tiations between the military and the oppo-i*-.on have
broken down. 25X1 25X1
in progress during the day but reached no result.
Movement of Iran leader Mehdi Bazargan earlier this week
to discuss Ayatollah Khomeini's return. The confusion
yesterday over whether the airport in Tehran would be
opened probably indicates that further negotiations were
tinues to insist that he will try to go to Iran on Friday.
25X1
Bakhtiar and the military may be trying to press
Khomeini into accepting some power-sharing arrangement
before he returns to the country. It is unlikely that
Khomeini will change his position, and his entourage con-
25X1
If the military and Bakhtiar decide to stick by
their decision and prevent Khomeini's return, we expect
the opposition to respond with more demonstrations and
strikes to force the government's downfall. Large demon-
strations had already been planned for Friday to cele-
brate Khomeini's homecoming. 25X1
Bakhtiar continues to insist that he will not turn
power over to Khomeini. The closure of the airports is
likely to identify the Prime Minister further with the
military and the Shah and reduce what little popular ap-
peal Bakhtiar has. F __1 25X1
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Bakhtiar's efforts
to organize progovernment demonstrations have so far met
with little success. Fewer than 5,000 demonstrators
turned out for a progovernment march yesterday.
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Chinese officials are talking in tougher and more
uniform terms about the prospects for a "swift and major"
e along the Vietnam-China border.
In comments apparently designed to reach the US 25X1
that appear to reflect recent guidance, one official
noted that such a strike would assist in deterring Viet-
nam from extending its influence to other neighboring
countries and might ease Vietnamese pressure on Pol Pot's
forces in Kampuchea. The same official had previously
described Chinese military activity along the Vietnamese
border as purely defensive and had said that China was
restrained by the possibility of Soviet retaliation.
Another official suggested that Vice Premier Deng
Xiaoping (Teng Hsiao-ping) plans to explain China's
strong "resolve" concerning the border situation during
his coming talks in Washington. 25X1
Despite this sterner approach, the officials con-
tinue to link China's actions with Vietnam's "encroach-
ments" on Chinese territory. Thus, the Chinese are con-
tinuing to develop a rationale for a border strike while
maintaining the option to take action at a time and place
of their choosing. 25X1
The Chinese officials acknowledge the potential
costs involved in an escalation of China's conflict with
Vietnam, including political damage in Southeast Asia and
delay of China's domestic modernization plans. The offi-
cials implied that China can keep these costs at manage-
More important, the Chinese officials appear to be
minimizing the possibility that the USSR would react with
force to any Chinese strike against Vietnam. The offi-
cials asserted that China believes the USSR would not
retaliate against China in such an event.
25X1
--continued
Too Seeret
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Iq
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BRIEFS AND COMMENTS
WEST GERMANY: The Disarmament Issue
Chancellor Schmidt's Social Democratic Party will
face a defense policy debate in the Bundestag within a
few weeks, and it has not yet reached agreement on the
priority to accord disarmament. AZZ West German parties
place high priority on national security, so the internal
debate will not weaken Bonn's adherence to the Western 25X1
alliance. Yet key party advocates of disarmament hold
views not fully consistent with Schmidt's policy, and
press now seems to be magnifying this difference.
Leading the disarmament advocates are party Chairman
Willy Brandt and parliamentary leader Herbert Wehner,
whose public statement on the coming debate is being in-
terpreted as giving higher priority to disarmament than
to accepting weapons to offset Soviet theater nuclear
forces. In fact, the relevant comment by Wehner is aimed
at the opposition and is not a clear policy declaration.
25X1
Wehner is also playing up Schmidt's concern that
West Germany not be the only West European country to
upgrade nuclear-capable forces as a counter to the Soviet
medium-range threat. Wehner quotes selectively from the
Chancellor's public statements, furthermore, to indicate
that the "gap" between NATO and Warsaw Pact military
forces might be acceptable because the overall strategic
balance can incorporate certain military imbalances. At
Guadeloupe, however, Schmidt a reed that the allies must
deal with this gap. 25X1
Schmidt, who must take account of the prominent dis-
armament advocates to ensure party harmony, has entrusted
Defense Minister Apel with a policy review, in effect a
search for a concept that makes progress in disarmament
a central objective. Apel will probably recommend a
policy that emphasizes disarmament and force limitations--
such as MBFR--as one road to parity but clearly main- 25X1
tains the option to improve NATO forces if the Soviets
continue to be evasive on theater balance.
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YUGOSLAVIA: Continuing Rivalries
tive forums at that level as well.
he is playing to a reported wave of unhappiness in the
regional parties over Tito's order to introduce collec-
personal rivalries in the Lead-
ership remain acute and aspects of the collective rule
system introduced by President Tito Last October are in
contention. The main protagonists--Stane DoZanc, secre-
tary of the Presidium, and Vladimir Bakaric, the senior
Croat in President Tito's inner circle--also differ on
some basic policy issues. 25X1
At the party congress in June, Tito tapped Dolanc
to run the ruling Presidium, thus strengthening Dolanc's
succession claim by elevating him to first among equals.
Bakaric led the opposition to Dolanc's effort to estab-
lish himself as the preeminent candidate to succeed Tito
in the party. The conflict led Tito to introduce the
collective leadership scheme in the Presidium and to
argue for its adoption throughout the party. Under the
collective scheme, Tito appointed Branko Mikulic, an
ally of Bakaric, to head the Presidium in a rotational
position as chairman for one year. 25X1
Since the first of the year, Dolanc has made sev-
eral speeches that emphasize a moderate approach to in-
ternal political dissent and directly contravene
Bakaric's position. Dolanc's failure to refer publicly
to the new collective leadership principle may well mean
and counterbalanced against each other.
While Tito is still in charge, there is little
chance of a decisive resolution of the test of wills
between Bakaric and Dolanc. Tito's ruling style is to
keep his potential successors uncertain of their status
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ZAIRE: Inter-African Force Withdrawal
Zaire has informed the Moroccan commander of the
Inter-African Force in Shaba Region that the Zairian
Army will assume fuZZ responsibility for the security
of Shaba in March and that the IAF should plan to with-
draw soon thereafter. The Moroccan contingent, which
accounts for most of the 2,400-man force, is awaiting
specific instructions from Rabat; the 600-man Senega-
lese contingent tentatively plans to leave in mid-March.
25X1
President Mobutu's decision to have Zairian troops
assume the responsibility of the IAF probably reflects
his recognition that the threat to Shaba from rebels
of the Congolese National Liberation Front has signi-
ficantly lessened during the past six months. He may
also have been influenced by recent incidents between
IAF and Zairian soldiers as well as by calls from
countries represented in the IAF for an early disband-
ment of the force. 25X1
The Zairian Army probably will not be able to per-
form its mission effectively for the foreseeable future,
and the absence of the IAF probably will lead to a re-
sumption of army depredations against the Shaban popula-
tion. France and Belgium each are training a Zairian
brigade to take over eventually in Shaba, but the train-
ing is months behind schedule and European military ad-
visers are pessimistic about Zaire's long-range prospects
for developing a competent security force.
Fortunately for Mobutu, rebels now in Zambia 25X1
and Angola are largely disorganized and lack significant
foreign support, circumstances that make it unlikely
they will be able to launch another major incursion in
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MALTA: Aid
Libya, France, and Italy so far have failed to 25X1
formulate a joint response to Malta's demand for eco-
nomic aid after the scheduled British military withdrawal
on 31 March. Meanwhile, the USSR again has indicated a
strong desire to establish a presence in Malta.
Italy, in particular, fears that continued lack of
progress on a European aid package will encourage closer
bilateral relations between Malta and Libya. Maltese
Prime Minister Mintoff claims to have concluded "defense
arrangements" with Libya. There is no evidence to sup-
port his claim--despite his frequent assertions that
Libya is ready to come to his rescue. The US Embassy
in Valletta, however, believes that negotiations may be
in progress. 25X1
During a recent meeting with French and Italian of-
ficials, Libyan officials reiterated their government's
willingness to help Malta--through both project assist-
ance and direct budgetary grants--and requested the Eu-
ropeans to match this assistance. French law, however,
forbids giving cash aid, and Italy can grant such aid
only with parliamentary consent. 25X1
The Soviets hope to expand access to port facilities
on the strategically located island, but Mintoff's
demands, including stringent controls on Soviet activity,
have always been too high a price to pay. Earlier this
month, a Soviet delegation visited Malta to discuss
bunkering rights for Soviet commercial ships and landing
rights for Aeroflot aircraft as well as opening Malta
to Soviet tourism, but the talks reportedly were incon-
clusive. Soviet access to Malta would be highly un-
popular with the Maltese population and, a public setback
to Mintoff's much touted neutrality policy.
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USSR: Reaction to State of Union Message
Initial Soviet media reaction to President Carter's
State of the Union message mixes a largely straightfor-
ward and positive account of his remarks on the impor-
tance of US-Soviet cooperation and the necessity of SALT
with familiar criticism of alleged US reliance on mili-
tary force. TASS carried a relatively upbeat summary of
the President's comments about SALT--consistent with
other recent optimistic Soviet public assessments--but
criticized his statement that he would not sign an agree-
ment unless national security were thereby strengthened
and US deterrent forces remain extremely strong.
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INDIA: Janata Party Unity
The appointment yesterday of former Home Minister
Charan Singh as finance minister and deputy prime
minister--a newly created post--reduces the threat of
a split in the ruling Janata Party. Singh's open cri-
ticism of.Prime Minister Desai's leadership had resulted
in his ouster from the cabinet last June. Desai may
have secured Singh's agreement to return to the cabinet
by assuring him that the government will move ahead with
plans to prosecute former Prime Minister Gandhi for ex-
cesses during her emergency rule. Singh had been highly
critical of Desai's cautious approach toward Gandhi.
PALESTINIANS: Council Adjournment
The Palestine National Council, unable to decide
on a formula for expanding radical representation on the
Executive Committee of the Palestine Liberation orga-
nization, adjourned yesterday without naming new leaders.
The present Executive Committee, dominated by moderates,
will remain in office, but radicals may again raise
their demands for increased representation once the PLO's
investigation of the assassination on Monday of a key
Fatah official is completed. The assassination dis-
rupted thelCouncil's deliberations, and radical demands
for a greater voice in the organization's finances and
military apparently were never fully considered.
A Vatican spokesman announced yesterday that the
Holy See has agreed to mediate the Beagle Channel dis-
pute between Argentina and Chile that last month nearly
led to armed hostilities. No venue has been selected,
and a mediator is yet to be named. Antonio Cardinal
Samore, whose shuttle diplomacy paved the way for Vati-
can mediation, appears to be the most likely candidate.
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POLAND: Defense Spending
The official Polish budget for 1979 shows an in-
crease in defense expenditures of 5 percent over the
1978 budget. The budget for the armed forces probably
will increase by 4.4 percent, with the remainder going
for investments in defense industries. This contradicts
a Western press report earlier this month that indicated
the Poles planned to increase defense spending in 1979
by only 2.6 percent, slightly above Poland's current in-
FRANCE: Ballistic Missile Submarine Program
The fifth French ballistic missile submarine will
go on sea trials this spring. Completion of a sixth
unit, which was postponed in 1976, plus research and
development on a new class of submarines, were authorized
last fall by the National Assembly as part of the French
program to upgrade naval and tactical nuclear forces.
The sixth unit and the new class of ballistic missile
submarine will be designed to accommodate the new, mul-
tiple warhead M-4 missile, which is under development.
The M-4 missile will provide a several-fold increase
in French capabilities against Soviet targets. France
also plans to retrofit the M-4 into the other five sub-
marines, which now carry 16 single-warhead missiles.
When the sixth unit becomes operational in about 1986,
France will be able for the first time to keep two
ballistic missile submarines continuously on patrol.
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EUROPEAN MONETARY SYSTEM: Dispute
Implementation of the European Monetary System,
originally scheduled for 1 January, remains stalled by
a dispute over agricultural pricing policy. Although
active consultations are continuing and there are some
signs of compromise between France and West Germany,
there have been few indications of movement toward even
an interim solution. The UK has complicated the picture
by calling for a fundamental reform of EC agricultural
policy rather than the inflationary half-measures now in
prospect. Most of the potential compromises reported
in the press would postpone any basic decisions and
probably would include some increase in EC-wide farm
prices. 25X1
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Iraqi President Bakr (right) welcoming Syrian President Assad to Baghdad last fall.
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SYRIA-IRAQ: A Temporary Alliance
The three-month-old rapprochement between Syria
and Iraq is the product of mutual concern over the
Israeli-Egyptian peace process and the upheaval in Iran,
as well as the narrow tactical considerations of each
side. Although a "unity" scheme between these two tra-
ditional rivals may come soon, it will be fragile and
superficial. Both governments are deeply suspicious
of each other and have rival pretensions for leadership
in the eastern Arab world. 25X1
Limited political, economic, and military coopera-
tion between the two is nonetheless likely as long as
their short-term objectives outweigh their permanent
national ambitions. Syrian President Assad and Iraqi
President Bakr may announce agreement in principle to
"unite" their two countries at a summit meeting in
Damascus later this month. Jordan and the Palestine
Liberation Organization may be invited to the final
session or to an immediate postsummit conclave to make
more credible Syria's military threat on Israel's east-
ern front.
Ancient Rivals
There is little chance of a real integration of
the two countries. Arab groups in Syria and Iraq have
been rivals since the seventh century. Their long-
standing inability to agree on sharing waters of the
Euphrates River, for example, reflects their geopoliti-
cal difficulties. 25X1
Religious sectarianism also works against unity;
a Sunni Muslim minority rules in Baghdad and an Alawite
minority regime governs in Damascus. Many Syrians,
including Assad's influential brother Rifaat, oppose
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a real rapprochement because they fear the Iraqis will
support a bid for power by a Sunni or even a rival
Alawite faction. 25X1
Since Syria achieved independence in 1946, its fore-
most foreign policy concern has been to preserve national
independence against threats from its neighbors. Syria
has supported the idea of Arab unity but largely as a
matter of its Baath Party's pan-Arab ideology. Iraq
and Egypt have tried to exploit this tendency in order
to dominate the Syrians. Syria joined the United Arab
Republic with Egypt in 1958, signed a never-implemented
federation agreement with Egypt and Iraq in 1963, and
joined the Confederation of Arab Republics initiated by
Egypt and Libya in 1971. None stood the test of time.
Prospects for Cooperation
The Camp David accords and developments in Iran
are the most important, but not the only, current
sources of affinity between Syria and Iraq. The
Syrians are also attracted by Iraq's oil wealth and view
Iraq's armed forces as a possible reserve that could
enhance Syria's military credibility and its ability
to obtain concessions from Israel in future negotiations.
Iraq sees ties with Syria as the first step toward play-
ing a stronger role in Arab affairs and toward minimiz-
ing Soviet and domestic Communist influence in the
region. Iraq also is concerned about unrest spilling
over from Iran. 25X1
The various joint committees created in the past
two months to pave the way for unity apparently have
made little progress in the key areas of party, mili-
tary, intelligence, and security matters. Both sides
want Israel to feel increased military pressure and
thus are likely to hammer out some arrangement for
closer military coordination. The possibilities include:
-- The formation, at least on paper, of a
joint military command.
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*DAMASCUS
Golan
T-Heights
tsra./ 11~!
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Kilometers
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-- A token Iraqi military presence in Syria,
possibly on the Golan Heights.
-- Contingency planning for deployment of
an Iraqi force to Syria.
The economic results of the rapprochement to date
have been mixed. Transportation services have been
resumed, restrictions on border crossing lifted, and
new commercial and trade contracts signed. Disagree-
ment over distributing waters controlled by Syria through
the Tabaqah Dam on the Euphrates River, however, may
continue to block the reopening of the Iraq Petroleum
Company pipeline that runs through Syria to the
Mediterranean. 25X1
Despite their congruent views toward Camp David,
the two countries have made little apparent progress in
the area of political cooperation. The two international
wings of the Baath Party could be reunited in a scheme
to stress Arab solidarity at the coming summit meeting,
but the depth of the personal antagonisms and ideologi-
cal differences between the two sides would make such a
move only cosmetic. The national leaders of Iraq and
Syria will, in any event, retain ultimate control of
all political activity in their respective countries.
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(The items in the Overnight Reports section have not
been coordinated within the intelligence community.
They are prepared overnight by the Office of Current
Operations with analyst comment where possible from
the production offices of NFAC.)
Tehran's international airport reportedly was re-
opened at midnight EST.
Egyptian President Sadat confirmed to Ambassador
Eilts last night that he has invited the Shah to return 25X1
to Egypt and that the Shah plans to do so. Sadat under-
stands that the Shah will arrive in a day or two.
25X1
We cannot confirm press reports that Prime Minister
Bakhtiar has requested Ayatollah Khomeini to delay his
return to Iran and that Khomeini has agreed.
Italy
According to press reports, Communist chief Ber-
linguer and Christian Democratic Party Secretary Zac-
cagnini agreed yesterday to call a meeting later this
week of the five parties that support the Andreotti
government in order to discuss the government's future.
25X1 25X1
Comment:
Berlinguer may use the occasion to Launch a new at-
tar against the Christian Democratic government and an-
nounce that his party is withdrawing its parliamentary
support. 25X1
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South Korea - North Korea
The US Embassy in Seoul reported yesterday that the
South Korean Government apparently has decided to accept
the first three conditions the North Koreans posed for a
meeting of representatives of political parties and mass
organizations. The South Koreans will propose a meeting
of governmental authorities by 1 February or earlier.
The Embassy noted that the South Koreans have narrowly
defined the North's condition concerning a cessation of
military activities to mean a cessation of such activities
along the Demilitarized Zone. It pointed out that this
position impinges on the authority of the commander of
the UN Command. The Embassy also commented that the
South Korean timetable suggests that the government will
only advise and not consult the US.
The US Embassy in London reports that Prime Minister
Callaghan, faced with general labor unrest and required
to submit a budget in April implementing the Labor Party's
economic strategy, will probably call a general election
sometime before mid-April. The Embassy notes that in
the meantime Callaghan must strive to avoid a confronta-
tion with the unions and maintain the cohesion of his
party, despite his diminished credibility and popularity.
25X1
According to press reports, Home Secretary Rees sug-
gested in Parliament last night that the government might
soon have to intervene directly in the labor strikes by
calling out the armed forces. Layoffs caused by the
truckers' strike continue to mount, and railroad workers
will stage another 24-hour strike today.
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The US Embassy in Mexico City reports that President
Lopez Portillo hopes President Carter's visit early next
month will result in greater US appreciation of Mexico's
importance and increased US attention to the Mexican
view of policies that affect both countries. Lopez
Portillo is particularly interested in establishing
agreement for more meaningful consultation on key issues.
25X1
On specific
Portillo will:
issues,
the Embassy believes Lopez
Express hope that the US will not alter
significantly the flow of Mexican workers
to the US in the next several years.
Say that Mexico would be doing the US a 25X1
favor if it were to assure energy supplies
at prevailing current prices.
Seek a commitment to liberalize policies
on US imports from Mexico.
Point to Mexico's contribution to successful
efforts to stem narcotics traffic and imply
that the effort merits US concessions in
other areas.
Turkey
According to the US Embassy, Prime Minister Ecevit
has refused to accept the resignation of Justice Minis-
ter Can. The minister attempted to resign on Tuesday
after many in his party criticized him for his handling
of recent prison escapes and rioting last fall. The Em-
bassy comments that this latest incident has rekindled
rumors of an impending cabinet shuffle, possibly in
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