CURRENT INTELLIGENCE BULLETIN - 1956/08/12

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03193796
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 13
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: August 12, 1956

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OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
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141,
CONTENTS
1. EGYPT'S IrFUSAL TO ATT7ND THE LONDON CON-
FERENCE (page 3).
2. RESIGNATION OF FOREIGN PILOTS MAY IMPAIR
FUNCTIONING OF SUEZ CANAL
(page 5).
3. INDONESIAN PRIME MINISTER PROPOSES COT ,070
POWERS STATEMENT ON SUEZ page 6).
4. GREECE REJECTS INVITATION To ioNn9N CONFERENCE
ON SUEZ CANAL (page 7).
5. SAUDI ARABIA OFFERS FINANCIAL SUPPORT TO EGYP-
TIAN DIPLOMATIC INSTALLATIONS
(page 8).
6. PATHETS BELIEVE THEIR PARTICIPATION IN LAOTIAN
GOVERNMENT IS GUARANTEED (page 9).
7. HONDURAI'LCBIEF BELIEVES ANOTHER REVOLT IMMI-
NENT (page 10).
12 Aug 56
THE ARAB-ISRAELI SITUATION
(page 11)
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Noe
1. EGYPT'S REFUSAL TO ATTEND THE
LONDON CONFERENCE
Comment on:
President Nases alternative proposal
for a conference on the Suez indicates
that although he has refused to attend the
London conference, he is still interested
in achieving a negotiated settlement. Nasr
indicated in his public statements that he
was willing to negotiate an international
guarantee on freedom of transit of the
Suez, but that he considered the owner-
-ship and operation of the canal to be strictly
an Egyptian right.
Nasr's refusal to attend the conference in
London assumes special significance in view of a direct Soviet
suggestion on that Egypt attend,
Nases apparent determination not to iden-
tify himself too closely with the Soviet position may have been
induced in part by the USSR's apparent unwillingness-
to give Egypt com-
mitments in terms ot direct military support against the West.
At London, Soviet foreign minister Shepilov
can be expected to promote Egypt's cause forcefully. Moscow
12 Aug 56
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already has challenged the competence of the conference as
now constituted and probably believes it can, with the help
of India, Ceylon, Indonesia and possibly others, prevent early
or decisive action. Shepilov will support Nases suggestion
that the UN participate in any final guarantee of transit through
the canal.
Nasr, in referring in his discourse to
the preservation of international peace, picked up one of the
themes the USSR already has strongly emphasized, and which
it will continue to contrast with the "warlike actions" of Britain
and France.
12 Aug 56
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Nue two,
2. RESIGNATION OF FOREIGN PILOTS MAY IMPAIR
FUNCTIONING OF SUEZ CANAL
The canal company has information that
� Egypt is negotiating with Yugoslavia for additional pilots, but
it considers six months the minimum period necessary for a
generally expert person to become an efficient canal pilot.
the only
effective way for Egypt to sabotage the canal would be to sink a
ship loaded with cement across the channel--an obstruction
which could be removed in less than a month.
Comment A large number of the company's employees
will probably accept its offer of a generous
financial settlement in return for signing a declaration of loyalty
to the company and expressing a desire for repatriation by 15
August. The departure of a large percentage of foreign employees
would considerably impair the effective operation of the canal.
12 Aug 56
Current Intelligence Bulletin Page 5
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ley
3. INDONESIAN PRIME MINISTER PROPOSES
COLOMBO POWERS STATEMENT ON SUEZ
ndonesian prime minister Ali
astroamidjojo has proposed a
tatement on the Suez situation to
e issued jointly by the Colombo
owers�Indonesia, India, Pakistan,
ey rior to the London conference. Re-
ferring to the principles subscribed to at the Asian-African
Bandung conference, the proposed statement reiterates a
belief that "all international disputes should be solved by
peaceful means and that threats or the use of force against
the territorial integrity or political independence of any
country should be refrained from:'
The draft views the Suez developments
with "grave concern," and says the prime ministers of the
Colombo powers have confidence in the ability of all parties
concerned to achieve a satisfactory settlement.
Comment Ali's statement appears to be in line
with instructions from
President Sukarno to abstain from any action on the Suez
Canal matter that would alienate the United States but, if
possible, to support members of the Asian-African group.
The statement probably is also designed to emphasize
Indonesia's prominence, particularly vis-a-vis India, among
the Asian-African nations,
Indonesia has given strong official sup-
port to Egypt on its right to nationalize the canal. At the
conference, it is expected to assume an anticolonial position
which will be supported and encouraged by the USSR and by
the Colombo powers, although they may not join Indonesia
in a statement such as All proposes.
12 Aug 56
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4. GREECE REJECTS INVITATION TO LONDON
CONFERENCE ON SUEZ CANAL
Greek prime minister IcaramanlisT deci-
sion not to send a delegate to the London
conference came as a complete surprise
Karamanlis' decision apparently springs
from his feeling that Greece must balance its primary man-
tine intere'sts and general WeStern Orientation with the anti-
British sentiments aroused by the Cyprus dispute and consid-
eration for the sizable Greek minority in Egypt.
Greece has affirmed its support of Egypt's position in
the controversy. By taking this stand, Athens presumably
hopes to assure the support of the Arab states when the
Cyprus issue comes before the United Nations General Assem-
bly in November.
Karamanlis apparently decided, however,
that it would be better not to attend the conference than to
alienate the major Western maritime powers by openly sup-
porting a position counter to their interests.
12 Aug 56
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TUY 6E tftL�t
Noise
&. SAUDI ARABIA OFFERS FINANCIAL SUPPORT TO
EGYPTIAN DIPLOMATIC INSTALLATIONS
Comment
Saudi Arabia, which has high financial
stakes in continuing the flow of oil
through the Suez Canal and the Trans-Arabian Pipeline, was
originally slow in expressing private and public support for
Nasr's nationalization of the canal.
The financial difficulties of the missions
in London and Paris presumably arise from the freezing of
Egyptian assets in Britain and France.
12 Aug 56
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Noe New
6,. PATHETS BELIEVE THEIR PARTICIPATION IN LAOTIAN
GOVERNMENT IS GUARANTEED
the Pathets
believe the accords signed in Vientiane on
10 August guarantee them participation in
the government regardless of their success
in the coming supplementary elections and even if the Souvarma
Phouma administration falls. The binding effect of this agree-
ment is, however, interpreted variously in different quarters.
a coalition
government would e particularly aangerous Decause of the
weak party structure in Laos, and the tendency of political lead-
ers to be naive and opportunistic about the Pathet Lao problem.
The top government and Pathet Lao con-
ferees have now adjourned while working-level discussions are
being conducted by political and military mixed committees.
Souvanna is confident that these talks will result in final civil
and military integration of the Pathets within two months, and
he is prepared to meet again with his brother Souphannouvong
if necessary. Meanwhile, he is preparing to leave for Peiping
on 19 August on what he terms purely a "courtesy visit!'
12 Aug 56
Current Intelligence Bulletin Page 9
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LLJL .1
Nor Nwir
7. HONDURAN CHIEF BELIEVES ANOTHER
REVOLT IMMINENT
Honduran chief of state Lozano said
on 9 August that he expects a revolt
to erupt very soon with street fight-
ing in the capital and in the north coast
area. He said he is prepared to quash
it.
The American embassy notes that public
apprehension is growing and that morale has reached a new
low among all echelons of government employees, with graft
rampant and resentment over political pressure widespread.
Comment. Leaders of the opposition Liberal Party,
who were exiled in mid-July, reportedly
said on 7 August that their party was planning a revolt to take
place within two weeks. The Liberals have considerable pop-
ular support, particularly among the restive workers of the
north coast, and have an unknown quantity of arms. Commu-
nists have infiltrated the Liberal Party and a future Liberal
government might be Communist-influenced.
Key army leaders pledged their loyalty to
Lozano last June, but the American army attach�stimates
that only about half the commandants in outivina areas are com-
pletely reliable.
12 Aug 56
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THE ARAB-ISRAELI SITUATION
(Information as of 1700, 12 August)
. no sign of Israeli preparation for
overt military action in the immediate future, no
maneuvers are known to be in progress, nor is mere evictence
f ahnormal Tsrapli trtion movements in the Ranat Varov area
!-)
Cairo radio's Hebrew language broadcasts
have been officially regarded in Israel as taking a softer tone
toward Israel as a direct result of its abstention from open ad-
herence to the Western position in the Suez controversy. The
nationalization of the Suez remains the principal preoccupation
in foreign affairs with both the Israeli government and the press.
The embassy in Tel Aviv reports that while no clear line has
emerged, there is increasing evidence that the government's
silence is based on a firm decision to "wait and see;' until the
Eastern and Western positions in the dispute are clarified.
12 Aug 56
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owe
Syrian troops are on a more extensive alert than
previously noted. There is no real evidence of any build-up for
hostilities, but With the bulk of Syria's forces already deployed on
the Israeli front, the special precautions being implemented ex-
ceed those normally taken during past alerts. Meanwhile, demon-
strations and a general prote
being planned for 16 August.
Syrian prime minister Asali has reit rated
Syria's opposition to diversion of the Jordan waters in the demili-
tarized zone at Banat Yacov. He added that if the military situa-
tion in the demilitarized zone were changed by the irrigation work
farther north above Lake Hula, then diversion in that area would
be similarly resisted. However, Asali's comment that he would
need a study by the Syrian army to determine the effect of diversion
north of Lake Hula suggests that Syria has not yet decided on how
to react to this new Israeli project.
12 Aug 56
Current Intelligence Bulletin Page 12
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