CURRENT INTELLIGENCE BULLETIN - 1956/09/12

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03178368
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 10
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: September 12, 1956

Approved for Release: 2019/10/23 C03178368,
JL
CURRENT
INTELLIGENCE
BULLETIN
12 September 1956
Copy No. 105
DOCUMENT NO.
NO CHANo
GE IN GLASS. K.
DECLASV"r'ED
CLASS. CHANGED TO:IS '
NE.XT REVIEW DATE:
AUTH: hH 70-2
DATE:
REVIEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
TOP SECRET
if
3.5(c) r /e/
3.3(h)(2) r
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CONTENTS
1. BRITISH LABOR LEADER OUTLINES POSSIBLE SUEZ
COMPROMISE (page 3),
2. PINEAU CALLS FOR IMMEDIATE ECONOMIC SANCTIONS
YPT AS ONLY ALTERNATIVE TO FORCE
(page 4).
3. EGYPT RAflT1S ARM' A OF BRITISH INSTALLATIONS
IN LIBYA (page 5).
4. HUNGARIAN REGIME NEGOTIATIONS WITH NAGY REPORTED
NEAR CONCLUSION (page 6)Q
5. USSR READY TO NEGOTIATE INFORMAL NORMALIZATION
OF RELATIONS WITH JAPAN (page 7).
6. BURMA REPORTEDLY TO ACC7PT SOVIET TECHNICAL
ADVISERS page 8).
12 Sept 56
THE ARAB-ISRAELI SITUATION
(page 9)
Current Intelligence Bulletin Page 2
TOP SECRET
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"ftio
1. BRITISH LABOR LEADER OUTLINES POSSIBLE
SUEZ COMPROMISE
Labor Party leader Hugh Gaitskell told
Senator George on 9 September that a
compromise solution to the Suez crisis
could be found with the good offices of
India and the United States, according
to the American embassy in London.
Gaitskell thinks a compromise might
be reached by recognizing that Egypt should "handle the
daily operation" of the canal, leaving specific matters--
such as unrestricted passage, tolls, and development�to
the supervision of an international council. He cited Nases
stated willingness to accept some international guarantee
of free passage and fixing of tolls as grounds for his belief
that such a plan might work. Labor's "shadow cabinet" is
to meet before the parliamentary debate on 12 September to
fix the party's line, Gaitskell added.
Following conversations with several
Conservative members of Parliament, the American em-
bassy in London reports that the government hopes the two-
day special parliamentary session will not lead to a vote
because it wants to demonstrate the greatest possible na-
tional unity.
Comment There are indications that the Labor
Party will press for a vote of confidence
if the government refuses to pledge that it will take military
action only as a last resort.
12 Sept 56
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2. PINEAU CALLS FOR IMMEDIATE ECONOMIC SANCTIONS
AGAINST EGYPT AS ONLY ALTERNATIVE TO FORCE
French foreign minister Pineau told
Ambassador Dillon on 10 September
that the one alternative to the use of
force against Egypt would be prompt
agreement by the important shipping countries on a posi-
tive program of economic sanctions. He added that French
and British prestige was now "totally committed;' both do-
mestically and throughout the Middle East and Africa.
Pineau added that Paris could no longer
request French personnel, including pilots, to stay in Suez
Canal jobs against their will and that he felt the majority
would leave this week.
Comment Paris can move only as far as London
is willing to go in imposing drastic
sanctions. The Mollet government is probably counting
on an early Suez Canal transit breakdown as a means of
stiffening the British position on immediate economic sanc-
tions and gaining domestic and foreign support for any
further French-British moves. The French in the past
week seem to have stepped up attempts to impress on Amer-
ican officials the necessity for economic sanctions as a
means of avoiding military intervention.
12 Sept 56
Current Intelligence Bulletin Page 4
-Tork-sEe-RET-
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3. EGYPT READIES SABOTAGE OF BRITISH INSTALLATIONS
IN LIBYA
Comment
The
Egyptian potential for stirring up trourae in Libya is prob-
ably considerable, although the police were able to main-
tain control during pro-Egyptian demonstrations in Benghazi
on 9 August and Tripoli on 16 August. There are no "nation-
alist units" known to exist in Libya at the present time; how-
ever, this might be a reference to the banned Libyan National
Congress Party, whose leader has been in exile in Egypt for
the past four years.
12 Sept 56
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TOP SECRET
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4. HUNGARIAN REGIME NEGOTIATIONS WITH NAGY
REPORTED NEAR CONCLUSION
The Hungarian regime's negotiations
with ex-premier Imre Nagy concerning
his return to the Hungarian Communist
Party have reached the point where some
decisions may be expected soon, according to
the American legation in Budapest.
Nagy demands
the rehabilitation of a number of his colleagues, the place-
ment of some of his supporters in key economic positions,
and the right to control one or two newspapers. In addition,
Nagy reportedly is calling for an alteration in the vast ship-
ments to the USSR, which he believes are injurious to the
Hungarian economy.
Comment Conclusion of these discussions, which
have reportedly been under way between
Nagy and the Gero-led regime for the past month, may have
been delayed by Gero's insistence that Nagy endorse the
party's policy before seeking readmission. In the past Nagy
has refused to recognize any past "errors" or to indulge in
self-criticism.
The increasing strength of the moderates
in the party may force Gero to accede to an early rehabilita-
tion of Nagy. Acceptance of even some of Nagy's reported
demands would represent a further and significant gain for
the party moderates. Regime policy since Rakosits ouster
on 18 July has been assuming more and more the character
desired by party moderates.
12 Sept 56
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�Noti
5. USSR READY TO NEGOTIATE INFORMAL NORMALIZATION
OF RELATIONS WITH JAPAN
A Moscow radio broadcast on 11 Septem-
ber confirmed previous hints that the
USSR is ready to negotiate informal
normalization of relations with Japan,
thereby breaking the impasse in restoration of Soviet-
Japanese relations on the basis of a treaty which devel-
oped during the Moscow talks in August. The broadcast
was made almost simultaneously with the announcement
from Tokyo that Premier Hatoyama plans to fly to Moscow
on 26 September.
In reviving the Soviet position that nor-
malization could be achieved informally as well as through
conclusion of a treaty, the USSR repeated exactly the five
points for normalization that had been put forth by Japanese
leaders on 6 September--termination of the state of war,
repatriation of prisoners of war, exchange of ambassadors,
effectuation of previously negotiated fishery treaties, and
Soviet support for Japan's admission to the United Nations.
Since the "new" Japanese proposal is
for the most part an acceptance of Soviet terms for informal
normalization rejected by Japan in January, Moscow probably
feels that Japan has capitulated to its minimum terms. The
only point of dispute which may arise is over Japanese in-
sistence that support for its admission to the United Nations
be unconditional. The USSR has given no indication that it
has backed down from its position that UN membership for
Japan depends on admission at the same time of Outer Mon-
golia.
12 Sept 56
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AL JL, JL
6. BURMA REPORTEDLY TO ACCEPT SOVIET
TEC N
Burmese prime minister Ba Swe is
reported to have stated
that the Burmese goverflfliflt1as
ecided to accept five Soviet technicians
w o are to have functions similar to technicians of the Amer-
ican engineering firm long under contract to Burma. Ba
Swe reportedly said this was the only way Burma could get
somethin in return for its barter credits with the USSR.
Comment These would be the first resident techni-
cians sent to Burma by the Soviet Union.
The American firm formulated Burma's
original seven-year development plan and has since been
closely connected with high-level development planning.
The presence of Soviet technical advisers would enable Mos-
cow to obtain valuable information on which to base a revitali-
zation of its own economic offensive in Burma.
The unfavorable climate of opinion in
Rangoon resulting from the Sino-Burmese border dispute
and dissatisfaction with Burma's barter trade with the bloc
will, at least initially, limit the scope of activity of the
Soviet technicians.
12 Sept 56
Current Intelligence Bulletin Page 8
CONFIDENHAT,
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THE ARAB-ISRAELI SITUATION
(Information as of 1700, 11 September)
Egypt charged that an Israeli patrol crossed
the Egyptian border west of the El Auja demilitarized zone on
11 September and killed five Egyptian soldiers. A sixth Egyptian
was reported wounded. Egypt alleged that the clash occurred
ten miles inside Egyptian territory. The raid was probably in re-
taliation for sabotage of the Tel Aviv-Beersheba rail line on the
previous night, which an Israeli army spokesman attributed to
Egyptian terrorists.
Israeli spokesmen have charged that the six
Israeli soldiers killed in a clash on the Jordan border on 10 Sep-
tember were fired on from Jordan and that their bodies were
subseauentiv dra2ed across the border by the Jordanians.
the Syrian-Lebanese military agree-
ment now under discussion is "at the chiefs of staff level only;'
and is "of limited scope'." The agreement would provide for entry
of no more than three Syrian battalions into southeast Lebanon in
the event of an Israeli attack on either Syria or Jordan. Syria
considers defense of this sector vital to the protection of its right
flank against Israel. Chamoun, however, professed to be uncer-
tain that the agreement would be signed, since the Syrians were
asking additional concessions which Lebanon was unwilling to
grant.
12 Sept 56
Current Intelligence Bulletin Page 9
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