NATIONAL INTELLIGENCE DAILY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88T01079R000200020001-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 22
• Document Creation Date: December 27, 2016
• Document Release Date: December 4, 2012
• Sequence Number: 1
• Publication Date: August 3, 1987
• Content Type: REPORT

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Central
Intelligence
National Intelligence Daily
Monday
3 August 1987
Top31E'sr~
X
ugust 1 7
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Contents
Top Secret
Persian Gulf: Developments ....................................................... 1
Panama: Regime Targets US ...................................................... 3
India-Sri Lanka: Militant Leader Flying to Jaffna ........................ 4
Central America: New Peace Proposal ...................................... 5
Philippines: Cabinet Member Assassinated ................................ 7
South Korea-North Korea: Seoul Proposing New Talks ............ 7
Jordan-Syria: Maqarin Dam Agreement ....................:................. 8
East Germany: Liberal Party Growth .......................................... 8
Special Analyses
Western Europe-US: Space Station Talks .................................. 10
International: Move To Oust South Africa From IAEA ................ 12
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3 August 1987
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Tehran announced yesterday the start of a new offensive involving
ground and air forces in the central border area. Iran claims to have
captured several strategic heights and caused thousands of Iraqi
Comment: The operation-called Nasr 6-appears to be an Iranian
effort to recapture territory around Mimak lost to Iraqi forces last
week. Baghdad may use Tehran's announcement of the attack as
proof of Iran's final rejection of the UN cease-fire resolution and
renew its ship-attack operations.
Aftermath of Mecca Rioting
Riyadh now reports 402 people killed, including 275 Iranian it rims
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~~x~
and 649 injured as a result of Friday's rioting in Mecca 25X1
more than 20,000 Iranian pilgrims were 25X1
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Tou Secret
involved in the violence, which took Saudi security forces equipped
with riot gear nearly five hours to end. By yesterday the city had
returned to normal.
Meanwhile, Kuwaiti and Saudi diplomatic personnel seized in Tehran
on Saturday when Iranian protesters stormed their Embassies have
been released. France denies press reports that its Embassy was
entered.
Comment: The next several days are likely to place additional strains
on Saudi security forces as the pilgrimage celebrations approach their
climax. Nevertheless, Riyadh appears prepared for any new violence
and probably will act forcefully to prevent its spread. The Saudis
appear convinced that the Mecca rioting and ransacking of their
Embassy in Tehran was coordinated by Iran to intimidate Riyadh.
In a speech yesterday to commemorate the dead pilgrims, Iranian
Assembly Speaker Rafsanjani said they had been murdered by Saudi
Arabia acting under orders from the US. He said the US wanted to
create a "tragedy" for Iran to compensate for the US failure to escort
Kuwaiti tankers safely through the Gulf. Promising that Iran would
take revenge for the deaths, Rafsanjani said Iran must uproot Saudi
leaders from the region and send Americans to their death.
in astern rovince is on a eig tene sate
of alert-flying increased F-15 combat air patrol sorties and placing
10 fully armed Tornado strike aircraft on standby.
Comment: Rafsanjani's threat that Iran will work to overthrow the
Saudi regime marks a significant escalation in Tehran's pressure on
Riyadh to end its support for US intervention in the Gulf. Tehran,
which probably orchestrated the riot, is trying to exploit the deaths to
inflame Saudi Arabia's Shia minority to rebel against the Sunni
leadership. Iran also is warning the Saudis they could face a campaign
of Iranian-sponsored terrorism similar to that experienced by Kuwait.
Riyadh is likely to take a tough public stand in the face of Iranian
threats until the pilgrimage is over. Fahd does not want to risk a major
confrontation with Iran and probably will work quietly to defuse
tensions later on.
Top Secret
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Toy Secret
Caribbean Sea
Galets Island
7J
1 Madden
( Lake
ugh A ust 1987
Panama
Canal
Gatut
Dam
Area of
Main Mep
rYorth Paei~rc Ocean
0 50 100 Kilometers
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PANAMA: Regime Targets US
The military-dominated government believes Washington is
behind the surge in opposition activity in Panama and has begun
to take retaliatory measures against the US mission.
the General Staff continues to believe 25X1
that the US, through its Embassy in Panama, is supporting efforts by
the opposition-based Civil Crusade to oust General Noriega and
President Delvalle. senior military officers 25X1
have Drown increa and believe some action
should be taken to reflect their displeasure.) 25X1
The US Embassy reports that the government-controlled media has
stepped up its criticism of the US Ambassador and his deputy chief of
mission for allegedly assisting the opposition. The media also have
alleged that the US is using facilities at Howard Air Force Base and
the Foreign Broadcast Information Service station at Chiva Chiva for
clandestine purposes in violation of the 1977 Panama Canal treaties.
In addition, routine access by US diplomatic and military personnel to
government and military officers has been curtailed.
Meanwhile, the Civil Crusade's resolve to force Noriega's ouster has
been stiffened b the success of its general strike last week,
The Crusade has called for another
large public rally on Thursday
Comment: The regime is frustrated by its inability to bring the
opposition movement to heel and probably is hoping to slow the
movement's momentum by implicating the US. Further measures
against the official US presence in Panama probably will depend on
the success of the opposition's rally this week. The regime is
concerned that, in the wake of the successful general strike last week,
another major public demonstration will give the opposition even
more momentum. For its part, the opposition shows no sign of caving
in to regime or economic pressures to end the campaian to oust
Noriega.
Top secret
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Top Secret
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Militant Leader Flying to Jaffna
t~bassy. Four Tamil laborers in the island's central tea estates
were killed-apparently during the violence that followed the signing
of the peace accord-by unidentified assailants, according to press
reports. Meanwhile, senior military officials in Colombo linked the
honor guard sailor who hit Prime Minister Gandhi last week to a
banned Sinhalese Marxist group. 25X1
statement from the Sri Lankan Security Minister. 25X1
Prabakaran was offered the chief ministership of the combined
Northern and Eastern Provinces in exchange for accepting the peace
plan, according to press reports. Prabakaran's lieutenants said late
last week they would wait for his authorization to surrender, and four
of five other militant groups said they agreed to surrender. The leader
of the fifth said he would comply after the Sri Lankan Parliament 25X1
ratified the accord and the state of emergency was lifted. Bef
Prabakaran's alleged agreement, a senior Indian officer h~ad-
remarked that the surrender would take about a week~acse~~g~to
t 25X1
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Colomb as remaine calm since the riots last week~,aes?+~-d~~o
to surrender their arms to Indian troops, accordin to a ress
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Comment: Tiger guerrillas almost certainly will follow Prabakaran's
orders. India probably will decide to keep some troops in Sri Lanka
beyond next week to respond to Tamil concerns that the Sri Lankan
troops remain in their camps. Such a move would also ensure the
compliance of anv militant aroups that do not follow Prabakaran.
stop anti-Tamil rioting by the Sinhalese.
troops to control the rioting last week suggest they may do little to
The lull in antigovernment rioting may be broken by Sinhalese-
instigated rioting against Tamils. The lackluster efforts of Sri Lankan
in 10 ye most certainly would balk at a new cam
opposition to defeat t e ayewardene may threaten to call
elections. Most s of Parliame ve not faced elec#ions
ardene's next political hurdle will be the parlia session.
ema a ars close to organi ' g parliamentary
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Too Secret
Preliminary Readout on New Contadora Proposal
Key Provisions
Upon Signature
Democratization process begins.
External aid to insurgents ends.
Unlike past, mediators' proposals establish
guidelines to gauge progress, including
complete access to the media and freedom of
assembly.
Honduran plan permitted aid to continue for
180 days as leverage to ensure Sandinista
democratization and agreement to arms
control; immediate cutoff benefits
Sandinistas; military deliveries to
? governments presumably may continue.
After 30 Days
National dialogue begins and call for
cease-fire.
Contadora officials to form committee
composed of five international notables to
verify political reforms and cease-fire.
Contadora, UN and~OAS Secretaries General
to form committee to verify~security
provisions, including end of aid to. rebels and.
arms control. .
After 60 Days
Amnesty and release of political prisoners;
lifting of restrictions on press and political
activity.
Arms control and security talks begin;
includes disarming rebels.
After 180 Days
Electoral systems revised; encourages
international observation of elections.,.. ? ~ ??~-.
Hold elections for regional parliament by end
of 1988.
Toy Secret
ugh A usi 1987
Document specifies those insurgents willing
to give up armed struggle to be included in
dialogue; no timing or mechanics on cease-
fire.
Hondurans proposed Central American
membership on committee.
More explicit than mediators' past proposals.
No date for end of talks; Sandinistas likely to
try to drag out; no mention of foreign military
advisers or maneuvers, which the mediators
have included in past proposals.
.Closely follows Honduran proposal but does
not provide for OAS supervision of national
elections.
No provisions for new national elections.
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CENTRAL New Peace Proposal
AMERICA:
The Contadora mediators, resuming a more active role in
regional peace talks, have prepared a new treaty draft to be
discussed at the Central American summit in Guatemala on
~~+
During their meeting in Honduras over the weekend, the five Central
American foreign ministers requested the Contadora ministers to
draft a working document that would synthesize contributions at the
meeting, including the Arias peace plan and modifications proposed
by Honduras. The final communique merely took note of the
document and invited the mediators to a new meeting after the
Guatemala summit
coordinated with Washington to avoid the appearance -l~'S- _.
influence. The Honduran plan also caught Nra an President
Ortega offguard, according to Presider~t'Duarte. Ortega, whom
Duarte believes is concer . he increased coordination among
the democracies; cal' ed Duarte on Saturday to request an urgent
meeti~ng~.be~ a the summit, according to US Government sources.
Duane refused to meet Orte a direct) but offered to send a personal
~~~iseat'ya't~o~i ana~
Comment: The Contadora draft is likely to overshadow the Honduran
proposal and the Arias plan as the focus for coming discussions and it
now appears the 'mediators are likely to resume their position of
arbiters of what proposals are internationally acceptable. Both the
Sandinistas and democracies are likely to find the proposal:
acceptable w r c' -will seek to amend key
provisions.
The mediators' proposal-which draws heavily from the Honduran
draft-attempts to strike a balance between Nicaragua's demand for
an immediate end to the anti-Sandinista insurgency and the
democracies' insistence that the peace plan ensure Nicaraguan
democracy. The Contadora draft appears to provide for direct talks
for acease-fire between the governments in the region and the
various rebel rou s a rovision the mediators have not endorsed in
the past
The draft calls for~early discussions on-disarming the insurgents, a
move that is geared to the rapid dismantling of each group's military
organizations. The Central American countries would be excluded
from serving on international verification commissions. As in past,. ,
Contadora proposals, arms control negotiations take place after '
external aid to the insurgents ends. The Honduran proposal, by
contrast, aims at verifying Sandinista democratization and a reement
to arms control before cutting aid to the insurgents. 25X1
, 5 ugus
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i op secret
Secretary of Local Government Jaime Ferrer, 72, was fatally wounded
during an ambush by three unidentified gunmen near his suburban
Manila home vesterdav
about its sagging political fortunes and sees itself on the defensive.
Ferrer's murder could also be a warnin to the US because art
leaders
perceived Ferrer as an agent or U involvement in ant a s
counterinsurgency efforts. Ferrer, however, had other enemies
besides the Communists; many local officials, for example, were
angered by his threat during the Congressional election in May that
thev support administration candidates or face removal.
SOUTH KOREA-NORTH KOREA: Seoul Proposing New Talks
A new South Korean proposal-in response to North Korea's recent
troop reduction initiative-was announced today. Seoul is calling for
foreign ministers' talks in September, to discuss Seoul's earlier
proposals for cross-recognition of the two Koreas by the ma'or 25X1
powers and dual entry to the UN. The proposed agenda=includes
discussion of a resumed North-South dialogue, prime-ministerial
meetings, talks on a contentious North Korean hydroelectric project,
and P'yongyang's recent call for disarmament talks involvin the two
Koreas and the US - ~- sir. 25X1
Comment: Seoul has not completely rejected P'yongyang's recent
tension-reducing initiative, but its counterproposal suggests the
South sees little attractive in the package. Pyongyang has repeatedly
rejected cross-recognition and simultaneous UN entry. The South's
reference to the hydroelectric project suggests it will press its claim
that the Kumgangsan Dam is an economic and security threat to
South Korea, another nonstarter from P'yongyang's point of view.
Seoul probably hopes to blunt the propaganda gain Pyongyang is
seeking from its initiative last month~a
the party is increasingly concerned
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vvesr ~
Bank "
(Israeli ocrupied
status to 6e
determined)
tss~
:ease-Fire
line
15 Kilometers
~~
75 Miles
Jordan
Boundary representation is
not necessarily eutAoritative.
Toa Secret
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JORDAN-SYRIA: Maqarin Dam Agreement
Jordan and Syria have agreed verbally to build the Maqarin Dam on
the Yarmuk River, which forms the boundary between Israel, Syria,
and Jordan near its junction with the Jordan River-the only available
solution to Jordan's water shortage. In discussions with Syrian
officials, Jordanian Prime Minister Rifa'i compromised on the dam's
height, the last major technical issue. He also agreed that Jordan
would seek international financing for about $450 million to cover
construction costs and would handle all downstream issues
particularly those requiring negotiations with Israel. 25X1
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Comment: Disagreements with Syria over minor issues may delay a
formal agreement. Syrian President Assad apparently has decided to
make this low-cost gesture to encourage a closer relationship with
Jordan. Reaching an agreement with Israel, however, will be a more
formidable problem requiring protracted negotiations. Tel Aviv is
concerned that continued expansion of upstream water use for Syrian
irrigation projects will reduce Israel's share of the water, and the
Israelis undoubtedly will demand assurances that the dam not
interfere with their water rights
EAST GERMANY: Liberal Party Growth
More and more East German intellectuals are showing their
displeasure with the Communist Party by joinin the small "liberal"
party, the LDPD. the LDPD has grown
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to more than 100,000 members. It is one of several small political
parties the regime tolerates as art of a "national front" to ive the
appearance of pluralism
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Comment: Though the LDPD lacks genuine political power, the
estimated 25-percent growth since 1982 suggests scientists and
intellectuals find it a painless way to demonstrate the political
activism required for career advancement without endorsing the
regime's rigidity on economic and social reform. The Communist
Party is apparently tolerating such indirect dissent to avoid alienating
people crucial to its modernization effort. Moreover, to accommodate
Soviet pressures for change the ruling party may portray the LDPD's
growth as a reflection of glasnost. In the long term, however, the
more the LDPD is seen as a haven for frustrated intelli entsia, the
more troublesome it will become for the regime
Toa Secret
Top Secret
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Europe
return to democrac
Tom Secret
Patricio Aylwin elected president of Christian Democratic Party,
Chile's largest ...veteran politician, moderate, probably
acceptable to military ...may try to begin talks with military on
serve as caretaker, take back seat to pragmatic, pro-West Finance
financial expertisep ...will probably
~ New Ecuadorean Central Bank manager, Fernando Sevilla lac cis
opposition make formal ties unlikely soon.
Guatemalan delegation's USSR visit underscores P esident
Cerezo's interest in expanding ties to Communist countries .. .
probably to reinforce neutral foreign policy ...military. domestic
viable moderate opposition to Prime Minister Blaize.
coalition of six leading parliamentary members ...step toward
Formation of Grenadian opposition party formally announced .. .
popular George Brizan to head National Democratic Congress, a
ability to prime economy before calling early election.
Turkish Prime Minister Ozal last week named protege Rustu
Saracoglu Central Bank governor ...probably believes he will
ease monetary policy despite inflation risk ...increases Ozal's
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imposed ...Defense Minister Rabin visi n I r i mili
y
officials threatening security crackdown
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Press reports Israeli military police commander for Gaza Strip
fatally shot yesterday by Palestinians ...rare travel ban to Israel
also reflects growing confidence of Christian hardliners.
Gemayel, assassinated in West Beirut, according to press .. .
recent political infighting suggests Christian militia involved .. .
Mohammed Shkeir, close Muslim adviser to Lebanese President
Top Secret
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Special Analysis
WESTERN Space Station Talks
EUROPE-US:
Senior European Space Agency-ESA-and Canadian officials
are reportedly optimistic about reaching a joint space station
agreement with Washington, despite lingering misgivings-
which they share with Japan-over military use. Nevertheless,
foot-dragging by European neutrals and growing budgetary
difficulties might delay an agreement beyond the next round of
bargaining that begins today, and opponents may muster enough
votes to defeat ratification by the ESA Council in November.
Canadian and ESA officials, unlike their Japanese counterparts, view
recent US concessions on "national security uses" of the proposed
space station as a significant compromise, and they believe European
participation is a probability,
Nonetheless, internal ESA differences remain, as estern uropean
neutrals-Sweden, Austria, and, Switzerland-reportedly continue to
oppose any agreement that does not specifically rule out military use.
Sweden has even threatened to withdraw from the ESA if its demands
are not met, according to the US Embassy in Bonn. Senior ESA
officials believe, however, that Switzerland and Austria can be
persuaded by the time the ESA ministerial council considers the
agreement in early November.
Canadian and ESA moderates-such as the UK, West Germany, and
Italy-however, have told US officials they want further US
concessions on the language covering military uses, according to
various US Embassy reports. Negotiators are likely to demand
wording that prohibits direct military uses such as weapons testing,
both to undercut the resistance of some neutrals and to orotect
member governments from domestic criticism.
The European moderates also are worried that Japan-which
continues to reject any military applications of the station-may
ultimately refuse to participate if Washington rejects further
concessions on the issue.
Budget Problems
Budget constraints are almost certain to force tough decisions about
continued European participation in the space station. The financial
crunch is partly the result of large cost overruns as well as
governmental decisions to reduce space budgets or maintain them at
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spaceplane and the ESA Columbus module for the space station are
each likely to exceed projected costs by about $2 billion
ESA is demanding increased contributions for most members, but
Belgian, British, and West German officials recently told the US they
will either freeze contributions at current levels or cut funding for
some projects
Brussels has signaled it would probably choose other ESA projects
over the space station, while London may reduce its participation,
according to US Embassy and press reports. West German officials
have implied they also are considering broad cuts, though press
reports suggest this would affect participation in Hermes more than
the space station. Bonn believes recent French redesi ns have
detracted from the value of the spaceplan
Outlook for Negotiations and Beyond
Even though Canadian and ESA negotiators expect to reach an
agreement with the US in the next few months, internal disputes over
budget and national security use could still cause problems at the
ESA Council meeting. Moderates who favor participation in the space
station would need to muster atwo-thirds majority of the ESA's
13 members on any draft agreement with Washington.
Even if the eventual draft can assuage the concerns of most members
about military use, budgetary problems could lead other states to
align with the neutrals. Paris, for example, would almost certainly
oppose the agreement if it appears that budgetary considerations will
force ESA members to choose between Ariane or Hermes and the
space station
Too Secret
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Special Analysis
INTERNATIONAL: Move To Oust South Africa From IAEA
The campaign to oust South Africa from the International Atomic
Energy Agency is gaining momentum, and the ability of the US to
block such a suspension will hinge on developments between
now and the general conference next month, when the issue will
come to a vote. The ouster of South Africa could pave the way for
a challenge to Israel's rights and privileges, an issue that caused
the US to withdraw from the IAEA in 1982.
South Africa told the US Embassy that it plans to maintain existing
safeguards commitments even if suspension occurs. Ironically, this
assurance may deprive South Africa's backers of an argument that
might persuade some states to vote for continued membership.
Implications for Israel
A decision by the general conference to suspend South Africa would
set a bad precedent for Israel, whose rights in the IAEA are in
jeopardy again this year. At Iraq's request, the agenda will contain an
Too Secret
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item relating to Israel's nuclear program. According to the US Mission
in Vienna, the item falls short of a call for suspension but draws an
obvious analoav to the conference's deliberations on South Africa.
12
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Tee Secret
Any future action against Israel may depend on the extent to which
the Arab and African states are willing to barter for votes on their
respective resolutions. Strong Arab support for the African resolution
against South Africa at the June board suggests the Arab states
expect African support in return.
The Soviets will probably work behind the scenes this year, as they
have done in the past, to forestall any move to restrict Israel's
membership. On the South Africa issue, however, Moscow and its
allies are likely to vote for suspension, as they did in June, in a bid to
curry favor with the Third World.
13 3 August 1987
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