NATIONAL INTELLIGENCE DAILY (CABLE) 7 JULY 1982

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00301R000400010086-9
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 20, 2016
• Document Release Date: August 31, 2007
• Sequence Number: 86
• Publication Date: July 7, 1982
• Content Type: REPORT

Director of
Central
Intelligence
Top Secret
oco/
National Intelligence Daily
(Cable)
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 Israel-Lebanon: Breakdown in Cease-Fire . . . . . . . . . . 1
Iran-Iraq: Iranian Military Preparations . . . . . . . . . 3
Iraq-Egypt: Invitation to Nonaligned Summit . . . . . . . . 4
Western Sahara: Stalemate Continues . . . . . . . . . . . . 5
China - Western Europe: Foreign Minister's Tour . . . . . . 6
Somalia-Ethiopia: Ethiopian Incursion . . . . . . . . . . . 7
International: New World Bank Lending Rates . . . . . . . . 8
Special Analysis
El Salvador: Government's Performance and Problems . . . . 9
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 The Israelis yesterday shelled West Beirut for several hours.
PLO leaders continue to send mixed signals on their willingness to
The Israelis and the Palestinians blame each other
for the breakdown yesterday of the 24-hour-old cease-fire.
During the exchanges, Israeli gunboats and tank and artil-
The confrontation line near the Galerie Simaan cross-
ing received a heavy concentration of fire. Heavy shelling
Water, electricity and food supplies to West Beirut
were still cut off yesterday, but the Israelis reportedly
//Before the fighting between Israeli and Palestinian
forces in the southern suburbs of Beirut ceased on Monday,
Israeli forces had advanced to new positions along an arc
stretching from the center of the airport east to the
Beirut-Damascus highway. the
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The Palestinians claim they destroyed eight Israeli
tanks and killed or wounded more than 80 Israeli soldiers
on Monday. Israel says three of its soldiers were wounded.
//According to press reports, Israeli vehicles entered
the port area of Beirut on Monday and took u positions
near the crossing point into West Beirut.
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 Comment: //The Israeli actions yesterday may be
anothef escalation of the pressure on the PLO. The
bombardment of the Galerie Semaan crossing, however,
also could be a prelude to an attack designed to trap
Palestinian units in the Burj al Barajinah refugee camp
The PLO leader in a press interview also re-
jected suggestions that the Palestinians be evacuated
under protection of the US fleet, but he did not rule
out the involvement of US troops in a multinational force
to be inserted between Palestinian and Israeli forces.
 //The Iraqis, meanwhile, are rapidly improving their
defenses along the border near Al Basrah. Multiple lines
of fortified positions have been constructed between Al
Basrah and the border since the end of May.//
//Iraqi forces remain in Iran along a small portion of
the border northeast of Al Basrah. Iraq has major elements
of six reinforced divisions, about 90,000 troops, in the
Al Basrah area facing four Iranian divisions and Revolu-
low following recent defeats in Iran. The density of
Iraqi defenses, however, will force the Iranians to pay
dearly to push to the Shatt al Arab. Iran probably will
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 Iraq's invitation to Egypt to attend the nonaligned summit
meeting scheduled for September in Baghdad is a major step in Egypt's
Although Egypt was a cofounder of the movement, it
came under attack when it signed the Camp David accords.
Cairo subsequently had to stave off several expulsion
Egypt received little criticism last April at a
nonaligned meeting in Kuwait, however, when it called
for mutual and simultaneous recognition between the PLO
and Israel. The Egyptian representative also managed to
prevent the conference communique from directly criticiz-
Comment: Iraq fears its war with Iran will cause
members of the movement to demand that the meeting place
be changed, and by inviting Egypt it hopes to strengthen
support among Arab moderates. Moderates within the move-
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 //Morocco and the PoZisario Front have been emphasizing diplomatic
efforts without much effect on the Western Sahara dispute, and both
probably will take new military measures after the OAU summit in
//The seating of the Polisario Front at the OAU min-
isterial meeting in Addis Ababa last February hardened
the positions of both parties. Morocco refuses to attend
an OAU summit if the Polisario is seated, and the guerrillas
Libyan leader Qadhafi has informed OAU member states
that the guerrillas will not be admitted to the conference
hall, although they may be present in Tripoli.
Comment: //Although military action in the Western
Sahara has been unusually low during the last six months,
the lull may end as the summit approaches. Press reports
describe a battle this past weekend near the Moroccan
stronghold of Semara, in which both sides may have suffered
//After the summit, the Polisario probably will try
again to breach the earthern wall that the Moroccans
constructed in Western Sahara. Moroccan officials are
concerned that the guerrillas are receiving training
on more advanced e ui ment
//Qadhafi is anxious that the summit be well attended,
but he may admit the Polisario at the last moment. If
the Front is prevented from attending, the insurgents
will be more inclined to resort to military action to
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 CHINA - WESTERN EUROPE: Foreign Minister's Tour
Foreign Minister Huang Hua on his recent two-week trip through
Western Europe emphasized Beijing's policy on Taiwan and its con-
Huang took a pessimistic view of the Taiwan issue
and relations with the US but said Beijing would oppose
Soviet designs whatever its problems with Washington.
In Bonn, Huang stressed that Moscow was seeking to ex-
ploit Chinese differences with the US and reaffirmed
China's demand for substantial Soviet actions before
The Chinese media gave low-key treatment to Huang's
trip. Although the Foreign Minister encouraged Allied
unity in dealing with the Soviets, Chinese commentary
on the Western Alliance became more pessimistic in tone
during the course of the tour. Beijing publicized Allied
differences with the US on issues raised at two summit
meetings and extensively replayed West European criticism
of the US decision to prohibit sales of pipeline equipment
Comment: Moscow's effort to suggest that the
Sino-US dispute over Taiwan and China's low-level adjust-
ments in contacts with the USSR presage further movement
in Sino-Soviet relations almost certainly prompted Huang
to contradict these assertions. The media in Beijing are
associating China with the West European community to
demonstrate independence from the US on some issues
without damaging the Chinese effort to forge a common
 Somalia reports it is attempting to repel an in-
cursion by Ethiopian forces and Ethiopian- and Libyan-
backed Somali dissidents 10 to 15 kilometers inside its
territory. The move, which began last week, reportedly
has been accompanied by daily Ethiopian air and artillery
attacks against border villages in the area. Mogadishu
including the destruction of several T-55 tanks.
Comment: //Addis Ababa is reacting to recent Somali
probes into the Ogaden in search of Somali dissident
encampments, which resulted in at least one clash with
Ethiopian forces. No preparations for a sustained
Ethiopian assault have been observed, and the Ethiopians
probably will withdraw soon. Although the Ethiopians
hope eventually to topple President Siad, they evidently
believe this can be accomplished through heightened
guerrilla activity and occasional demonstrations of
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 The World Bank on Thursday formally approved plans
to borrow a portion of its money needs at variable inter-
est rates in short-term markets and to lend money to mem-
bers at a rate that will change every six months instead
of being fixed at the time of the lending commitment.
Under the plan, the Bank will borrow up to $1.5 billion
in the fiscal year that started on 1 July out of a total
need of about $9 billion. The balance of the Bank's
needs--$7.5 billion in FY 83--will be raised in the usual
manner by floating bond issues at fixed rates. A lending
rate will be established based on the blended cost of the
Comment: The decision to borrow short term is
largely forced by the Bank's growing financial needs at
a time when long-term funds are scarce but short-term
money is readily available. Lending at variable rates
should more fully provide for a positive net return on
the Bank's loan operations and thus help assure its con-
tinued solvency. The move, nonetheless, probably will
lead to lower World Bank rates than would have been
charged if the Bank had continued to borrow at long-term
fixed rates. The decision also should allow the Bank's
programs to expand and thus help offset the declining
availability of even more expensive, private long-term
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 //EZ Salvador's provisional government is having some success
in improving its human rights record, carrying out the reform process,
and professionalizing the armed forces. The chaotic economic situa-
vulnerable to political crises and military setbacks.//
//The government has arrested and charged civilian
vigilantes and security force personnel with specific
political killings. Members of the official civil defense
force have been apprehended for the murders of peasants
suspected of supporting the left.//
//The government and military also have publicly
renewed their pledge to put the reform process into
effect. The controversial assembly decree that postponed
further distribution of most lands under Phase III of the
agrarian reform has been clarified. A special committee
that includes a senior military officer and a top leader
//In addition, the government has accelerated the
awarding of both provisional and permanent land titles
to peasants, and the armed forces have begun to intervene
against landowners who have illegally evicted peasant
renters. Rural labor leaders, who earlier were concerned
over possible reversals in the reform process, now say
they are more confident of the regime's commitment to
//The agrarian reform issue underscores the govern-
ment's difficulty in satisfying both the social needs of
the peasant population and the economic concerns of the
 urban classes. Much of the land affected by the reform
is devoted to export crops, which provide foreign exchange
and funds needed to purchase imports for the productive
sectors. As production declines, unemployment and
underemployment--currently estimated at 50 percent--will
//The government depends heavily on international
financial aid to keep the economy afloat. The level of
such aid is largely determined by foreign donors' views
of the regime's political capabilities and intentions.//
//Deep personal and ideological rifts probably will
continue to plague the provisional government. Personal
vendettas and lack of dialogue and compromise among
politicians will complicate proceedings in a 60-member
constituent assembly comprised of four disparate conserva-
tive parties and the liberal Christian Democrats. The
legislators also will continue to cause problems.//
//The executive branch is more professional. It also
is divided, however, among the major parties and headed
by a nonpartisan president who appears unwilling to test
fully the powers of his office.//
//President Magana views himself as an interim
mediator among rival political interests. Although strong
willed and outspoken, he seeks to avoid straining the
fragile power-sharing arrangement among the parties and
the military.//
//The armed forces appear united in their support for
the civilian government and in keeping their distance from
partisan politics. Senior officers, however, will insist
on the need to increase domestic and international confi-
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 //The government's mixed political record is matched
by the military's spotty performance on the battlefield.
The costly recapture of the towns of San Fernando and
Perquin, for example, highlighted both the strengths and
deficiencies of the armed forces.//
//The fighting in Morazan Department was perhaps the
most intense of the two-year conflict, and government
forces suffered substantial casualties. They were handi-
capped by poor intelligence preparation and by command and
control, logistic and communications problems.//
//The rapid deployment of several thousand well-
equipped troops, however, showed significant improvement
in quick-reaction capabilities. The armed forces also
showed better coordination in the last days of the fight-
ing. They were supported by six newly arrived US A-37
ground attack aircraft and by three Honduran infantry
battalions that helped block insurgent escape routes
//The guerrillas will be hard pressed to sustain their
momentum by launching an offensive similar to the one in
Morazan any time soon. Units elsewhere are not as large
or well equipped and organized as those in the east. The
insurgents probably will thus concentrate on localized
attacks against military outposts and economic sabotage.//
//Guerrilla leaders remain divided over political and
military strategy. In coming months, insurgent operations
are likely to reflect more the priorities of individual
factions than any blueprint of the joint command in
Nicaragua. Specially trained units, however, are still
able to carry out spectacular offensive missions, such
as the destruction of the Oro Bridge last October and
the sabotage in January of the airbase at Ilopango.//
Prospects
//The current trend of modest government gains and
setbacks on both the political and military fronts seems
likely to continue over the next several months. The
insurgents, meanwhile, do not appear able to launch a
renewed large scale offensive in the near term. They
retain their ability, however, to intensify the war of
 Approved For Release 2007/09/13 : CIA-RDP84TOO301 R000400010086-9
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Approved For Release 2007/09/13 : CIA-RDP84TOO301 R000400010086-9