CURRENT INTELLIGENCE BULLETIN - 1956/07/31

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03161867
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 15
• Document Creation Date: October 25, 2019
• Document Release Date: October 31, 2019
• Publication Date: July 31, 1956

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CURRENT
INTELLIGENCE
BULLETIN
31 July 1956
Copy No. 0 5
DOCUMENT NO.
NO CHANGE IN CLASS.
I ; DECLASSIFIED
CLASS. CHANGED 10: T
NEXT REVIEW DATE:
S S C
ALIT)�44 REVIEWER:
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
"
3.3(h)(2)
3.5(c)
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CONTENTS
1. SUEZ CANAL DEVELOPMENTS
(page 3).
2. NASR REPORTED STILL DETERMINED TO OUST AMERICAN
AID MISSION (page 5).
3. BOHLEN COMMENTS ON SOVIET INTENTIONS IN SUEZ
DISPUTF (page 6).
4 AUD URGES NEW PROPOSALS ON DHAHRAN AIRFIELD
(page 7).
5. JAPAN AND USSR MAY REACH AGREEMENT
(page 8).
6, DISORDERS CONTINUE IN SOUTH KOREAN ASSEMBLY
(page 9).
7. CAMBODIAN CABINET RESIGNS
(page 10).
8. CONTRACT SIGNED FOR FIRST SOVIET PROJECTS IN
SOUTHERN AFGHANISTAN (page 11).
TH ARAB-ISRAELI SITUATION
(page 13)
31 July 56 Current Intelligence Bulletin
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1. SUEZ CANAL DEVELOPMENTS
protest,
Comment
Britain con-
siders it essential to keep Suez Canal
traffic moving and has instructed British
ships to pay full toll at the canal if Egypt
insists. From Paris, the canal company
ersonnel to follow Egyptian orders under
and to refrain from any sabotage of canal operations.
Prime Minister Eden's statement in the House
of Commons on 30 July that any arrangement
leaving Egypt in "unfettered control" of the canal would be unac-
ceptable suggests that he will push for establishment of an inter-
national consortium to operate the canal.
Meanwhile, traffic has continued to move
normally through the canal,
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2. NASR REPORTED STILL DETERMINED TO OUST
AMERICAN AID MISSION
Comment
Egyptian president Nasr is still
determined to request the with-
drawal of the United States ICA
mission in Egypt,
Nasr was previously reported to
have considered announcing the end
of American aid to Egypt when he made his 26 July speech.
Since that date, Egyptian statements have concentrated
their fire on Britain and France, the powers most imme-
diately concerned with the Suez Canal Company seizure.
Nasr may well be holding a denunciation of American aid
in reserve as a response to any American action in sup-
port of the British and French positions on Suez.
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3. BOHLEN COMMENTS ON SOVIET INTENTIONS IN
SUEZ DISPUTE
Ambassador Bohlen expects the USSR
to move cautiously if Western response
to nationalization of the Suez Canal is
firm and effective, but he believes the
wi u y exploit the breach between Egypt and the
West if it sees no direct risk to itself. Bohlen expects that
if the question is raised in the UN Security Council, the USSR
would almost certainly veto any consideration of the issue.
Comment Copious commentaries in the Soviet press
indicate the USSR's approval of Nasr's
move but do not hint at any specific course of action. Recent
Soviet policy has indicated that the USSR wishes to avoid an
outbreak of hostilities in the Near East. The USSR is expected
to give Nasr both economic and political support in his resist-
ance to Western courses of action.
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4. KING SAUD URGES NEW PROPOSALS ON
DHAHrtAN AIRFIELD
King Saud has suggested that the United
States submit new proposals which could
become the basis for further negotiation
on terms for renewal of the Dhahran air-
field agreement. Saud told Ambassador Wadsworth on 25
July that Saudi Arabia was not insisting on "$250,000,000 or
nothing" for a new five-year agreement, and expressed
"amazement" that the United States had not brought forth
alternative proposals.
The king reaffirmed his wish to continue
close and friendly relations with the United States. Declar-
ing "We are not greedy. . . thank God every year our income
is increasing," he asked that the United States indicate how
it proposed to help strengthen his kingdom and that it submit
offers of arms which are currently available. Saud has de-
clared that, meanwhile, there should be no further negotia-
tion until the United States presents new proposals.
Comment The king's willingness to permit the 23
July deadline to pass without termination
would appear to indicate that he still desires a new airfield
agreement.
The king's statements were made prior to
Egypt's nationalization of the Suez Canal. This action will
probably encourage him to maintain a tough bargaining posi-
tion.
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5. JAPAN AND USSR MAY REACH AGREEMENT
Japanese foreign minister Shigemitsu's
statement in Moscow on 28 July that he
had come to normalize relations between
Japan and the USSR suggests that the re-
newed negotiations will result in an agree-
ment. His previous public statements that
he would not break off the talks give further
support to this view.
Shigemitsu believes a strong effort, in-
cluding an appeal to the top Kremlin leaders, will be necessary
to regain the southern Kuril Islands, but that if the attempt
fails Japan must not formally relinquish its territorial claims.
Shigemitsu, like the Japanese public, be-
lieves that official relations with Moscow are necessary for
Japan to gain admission to the UN, to bring the recently con-
cluded fishery pacts into force, and to assure the return of
Japanese detainees before winter. He feels that Japanese
achievement of these aims would counterbalance a Soviet re-
jection of Tokyo's territorial demands.
Shigemitsu prefers a formal peace treaty
to a restoration of diplomatic relations by an exchange of am-
bassadors. This could lead to a treaty which omits any refer-
ence to territories. Such a treaty would in effect defer indefi-
nitely the solution of the territorial problem, but could have an
appended protocol in which the USSR agreed to withdraw from
� Shikotan and the Habomai Islands, since the USSR at the London
talks offered to return them.
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6. DISORDERS CONTINUE IN SOUTH KOREAN ASSEMBLY
Opposition assemblymen in the South
Korean assembly continued their demon-
strations on 28 July against police inter-
ference with the opposition's attempts to
register its candidates for the 8 August
local elections. Fighting broke out on the
floor of the assembly on 28 July over the
arrest and imprisoning of an opposition legislator the previous
day when police broke up a street demonstration in front of the
American embassy.
The embassy believes the government's un-
wise strong-arm police tactics in the street demonstration on
the 27th will bring unfavorable publicity to the Rhee administra-
tion. This action, together with recent police reorganizations,
suggests that the government may increase police controls in an
attempt to combat the discontent. The a,ntiadministration vote
in the recent vice-presidential election suggests that the public
will probably resist government attempts to impose stricter po-
lice controls.
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7, CAMBODIAN CABINET RESIGNS
Public charges of corruption in the
Cambodian government are given as
the chief reason for Premier Khim
Tit's submitting his cabinet's resigna-
tion on 28 July, but there is a strong
possibility that the resignation was engineered by Crown
Prince Sihanouk. The American embassy reports that
Sihanouk, who still dominates Cambodian politics, re-
cently threatened a general "house cleaning" if squabbling
and scandals in government circles persisted.
The king may request Khim Tit to re-
main in office until Sihanouk returns from his extended
European tour, probably in mid-August. During his visit to
the USSR and various Satellites, the prince secured pledges
of economic aid and technical assistance to complement aid
already promised by Peiping. He may well desire a govern-
ment more amenable to closer relations with the Soviet bloc
then the mildly pro-West Khim Tit regime.
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8. CONTRACT SIGNED FOR FIRST SOVIET PROJECTS
IN SOUTHERN AFGHANISTAN
Radio Moscow has announced the signa-
ture on 26 July of contracts for Soviet
surveys of a canal near Jalalabad, east
of ICabul,and two dams and a reservoir on the Paltu (or Nahar)
River, near the tribal territory east of the Kabul-Kandahar
road below Ghazni.
Comment The Paltu River projects will be the first
undertaken by the USSR in southern Afghan-
istan, which has traditionally been a purely Western sphere of
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operation. The survey near Jalalabad is presumably for the
Barikao irrigation project on the Kabul River near the stra-
tegic road from Kabul to the Khyber Pass. This project is of
special significance because it may affect the availability of
water for the Pakistani hydroelectric and irrigation dam at
Warsak, just across the border.
Contracts now have been signed for most of
the 11 projects covered in the general agreement of 1 March
under the Soviet S100 000 000 credit to Afghanistan.
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v�el �Ste-REF� 'moor
THE ARAB-ISRAELI SITUATION
(Information as of 1700, 30 July)
Prime Minister Ben-Gurion told Ambassador
Lawson on 27 July that the United States has no ground for worry
that Israel will do anything to disturb the peace. Ben-Gurion im-
plied that prospects on the other side of the frontier were not so
reassuring. He said that Secretary General Hammarskj old was
obviously a very intelligent man but there was something wrong in
his reactions and gppresiation of the situation.
Israel will have a test mo-
bilization on 5 August. The American army attach�aid that if this
is true, the alarm generated in the Arab states would be tremendous,
particularly during the present tenseness, and could conceivably
cause active hostilities. The attach�aid that mobilization would dis-
rupt the economy and would prove nothing since all units have been
mobilized at one time or another during the nast year,
A Jordanian Defense Ministry spokesman has
stated that the Arab states are going to ask the UN to replace UN
truce supervisor General Burns as being "biased in favor of Israel:'
In connection with Egypt's nationalization of the
Suez Canal Company, Britain's Prime Minister Eden announced in
the House of Commons on 30 July that all exports of British war ma-
teriel to Egypt had been stopped. In answer to a question as to the
status of the two British destroyers sold to Egypt, Eden said he
didn't know where they were but he thought the Royal Navy could take
care of them wherever they happen to be. The last report indicated
that the destroyers, which are fitting out in Britain, would depart for
Egypt on 13 August.
The British ambassador in Amman told American
officials that if Britain does not comply with Jordanian demands for
heavy arms, he is convinced that Chief of Staff Nuwar will turn to Nasr
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for such supplies, and that Czech tanks and other weapons will
be in Jordan in less than 90 days. The ambassador said that
Britain has told Jordan that should non-British weapons come
into the country in any volume, Britain would have to reconsider
its treaty relations with Jordan.
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