CURRENT INTELLIGENCE BULLETIN - 1957/03/15

• Document Type: SPECIALCOLLECTION
• Collection: Current/Central Intelligence Bulletin Collection
• Document Number (FOIA) /ESDN (CREST): 03162009
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 14
• Document Creation Date: December 12, 2019
• Document Release Date: December 20, 2019
• Publication Date: March 15, 1957

Approved for Release: 2019/12/04 CO3162009%; ib
_I (.11" oriu .n..cd 1
3.3(h)(2)
3.5(c)
CURRENT
INTELLIGENCE
BULLETIN
DOC1JMENT NO.
NO C.I1W3L IN CLASS.
I I
GLASS. D IO. TS
NEXT RE.VIEW DATE.
NJTH: HR 70-2
r
15 March 1957
/c/ 7/17/3/4
Copy No
BVIEVIE11:.
141
OFFICE OF CURRENT INTELLIGENCE
CENTRAL INTELLIGENCE AGENCY
TOP SECRET
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Nur
CONTENTS
tf 1. GAZA STRIP SITUATION
(page 3).
2. FRANCE MAY GIVE ISRAEL AIR COVER IF ISRAELIS RE-
OCCUPY GAZA (page 5).
' 3. ISRAEL PLANS TO USE AMERICAN-OWNED TANKERS TO
CARRY CRUDE OIL TO EILAT (page 7).
1194. NATIONWIDE STRIKES THREATENED IN KEY BRITISH
INDUSTRIES (page 8).
5, SAUDI ARABIA'S FINANCIAL PROBLEMS
(page 9).
fv'. JAPANESE MAY REQUEST REVISION OF SECURITY TREATY
WITH US (page 11).
r-i1p7. SOVIET-EAST GERMAN TROOP AGREEMENT
(page 12).
ANNEX--Conclusions of the Watch Renort of the Intellieence
Advisory Committee
(pate 1.4).
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1. GAZA STRIP SITUATION
Comment on:
UN secretary general Hammarskjold
told Ambassador Lodge
that Egypt's action in sending an ad-
ministrative governor and five civilian
officials to Gaza on 14 March seemed
consistent with the position that the
United Nations had taken and that he
could hardly object to it. Hammarskjold
remained hopeful that Egypt would not
seek to introduce any military personnel
into the strip. Nasr told Bunche
that Egypt had no intention of send-
ing armed forces to Gaza.
However,
an advance party
,of an infantry battalion had arrived at
Al Arish, indicates that regular Egyptian
forces have begun to move back into east-
ern Sinai. Al Arish is less than 30 miles
from the Gaza strip.
that "the
situation in Gaza is serious, and the peo-
ple urgently need men to be sent to organ-
ize" activities such as the demonstration
which accompanied the funeral of an agita-
tor killed during the pro-Egyptian riot the
previous day. On the night of 12 March,
UNEF troops surprised and captured a party of three fedayeen
equipped with dynamite charges heading out of Gaza town toward
the Israeli border.
These developments appear to belie public
assurances by Egyptian officials that the UNEF will receive
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toe'
"full co-operation" from them, as well as the statement
by Colonel Gohar, the Egyptian official responsible for
Palestine affairs, to Ambassador Hare that "you can be
confident that the situation in Gaza will be calm."
The American army and air attaches
in Tel Aviv report that as of 13 March there was no evi-
dence of Israeli mobilization despite the bellicose state-
ments of Israeli leaders, but that the government is again
stirring up the public with test air raid alerts.
some in-
crease in active duty strength would be required for secu-
rity along Israel's border with Egypt.
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2. FRANCE MAY GIVE ISRAEL AIR COVER IF ISRAELIS
REOCCUPY GAZA
French defense minister Bourges-Maunoury
told the American embassy on 13 March that
France "in concert with Britain" is making
preparations to provide air cover for Israel
in case Tel Aviv finds it necessary to reoc-
cupy the Gaza strip. He is certain that the
Israeli army will move at once if Nasr sends
"a governor with Egyptian forces" into Gaza.
At first the French government thought Nasr was bluffing, he
said, but information received on 13 March led Paris to believe
Nasr may take early action.
The defense minister declared that Egyptian
planes could not be permitted to bomb Israeli cities.
The permanent under secretary of the Brit-
ish Foreign Office termed "absolute nonsense" a report that
Britain might be prepared to provide air cover for the Israelis.
Comment The Egyptian-appointed administrative gov-
ernor and five assistants arrived in Gaza on
14 March. No Egyptian troops were to accompany them. Should
the Israelis reoccupy the strip, it is very doubtful that Egypt
would risk its air force against them.
This and other recent reports of French
willingness to lend military support to Israel may have been
circulated to force new American and UN pressure on Egypt.
French leaders continue to press for all-out support of Israel.
While such support would most likely be limited to a continua-
tion of present technical French air force aid, it could be aug-
mented by aircraft and possibly pilots. France has eight
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F84F's on Cyprus which are believed to be in combat-ready
status. French air force technicians now in Israel are os-
tensibly there to aid in the utilization of aircraft purchased
from France.
The British presumably would be willing
to facilitate French air support of the Israelis, although they
would probably be reluctant to participate in such operations.
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TOP SECRET
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CONFIDENTIAL-
3. ISRAEL PLANS TO USE AMERICAN-OWNED TANKERS
TO CARRY CRUDE OIL TO EILAT
Comment on:
An Israeli Foreign Ministry spokesman
told the American embassy on 13 March
that reports that an American-owned
tanker would be the first to provide oil
for the eight-inch Eilat-Beersheba pipe-
line, now nearing completion, were premature and "unfor-
tunate." He said that nevertheless Tel Aviv is "hoping, if
all goes well," to use three American-owned T-2 tankers
chartered by Israel. If each tanker makes one trip a month,
this would supply as much crude oil as the pipeline can handle
initially. The Israeli official did not divulge the source of
the oil, but it would presumably come from Iran.
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4. NATIONWIDE STRIKES THREATENED IN KEY
BRITISH INDUSTRIES
Comment on:
Unless last-minute efforts succeed
in averting the nationwide strikes of
some 3,000,000 British shipbuilders
and engineers, scheduled to begin 16
March, the Macmillan government
will be faced with a grave threat to its whole economic
program.
The threatened strikes for across-the-
board 10-percent pay raises would involve a greater num-
ber of workers than any since the 1926 general strike and
would hit Britain's vital export program. The unions' jur-
isdiction includes the airplane and automobile industries,
which have played an increasingly large part in that pro-
gram, while the booming shipbuilding industry has orders
through the next five years. Britain's plan to reduce its
defense program is designed largely to allow these indus-
tries to concentrate on production for the export market.
The strike would further reduce the
Macmillan government's prestige. The employers' refusal
to discuss the unions' demands has been heavily criticized
in the press, even by newspapers sympathetic to the Con-
servatives, and the government would be held largely re-
sponsible for failure to avert a stoppage.
15 Mar 57 Current Intelligence Bulletin
Page 8
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SECRET A.
5. .SAUDI ARABEL'S FINANCIAL PROBLEMS
Comment on:
As a result of heavy dollar expendi-
tures and the sharp cutback in oil
revenues since the Suez crisis, Saudi
Arabia is apparently overextended fi-
nancially and will probably be unable to
meet current obligations without re-
purse to extraordinary borrowing.
This financial squeeze is expected to
continue for several months.
The American embassy suggested on
13 March that for the time being American exporters be
advised to export to Saudi Arabia only against a letter of
credit, since Saudi banks have been unable to obtain suffi-
cient foreign exchange from the Saudi Arabian Monetary
Agency to cover imports made on a collection basis. In
late February, foreign exchange experts in New York were
advising their clients similarly.
While revenues are scheduled to in-
crease sharply this September, total Saudi oil revenues
from April to September 1957 will total only $44,000,000,
of which only about $7,000,000 will be in dollars,
This is not believed adequate for
the government's needs. During a comparable period last
year, oil receipts amounted to about $94,000,000.
Saudi dollar payments to Aramco for
oil shipped to Egypt have thus far amounted to approximately
$6,000,000. Completion of the contract Will, cost Saudi Arabia
an additional $4,000,000.
The dollar reserves of the Saudi Arabian
Monetary Agency in American banks have been sharply drawn
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down since October. Dollar :reserves now stand at less than
$4,000,000 as compared to almost $15,000,000 last October.
Outstanding Saudi loans from American banks at the end of
February amounted to $27,000,000.
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Current Intelligence Bulletin Page 10
SECPEr
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I
6. JAPANESE MAY REQUEST REVISION OF SECURITY
TREATY WITH US
The Japanese government and its con-
servative supporters apparently are
considering a request to the United
States to revise the Japanese-United
States security treaty, according to Ambassador MacArthur.
A Foreign Ministry official recently stated that a "sensible"
revision which the Socialists could not oppose should be made
to strengthen the conservatives "before it is too late." The
official believes it would be feasible for Japan to offer par-
ticipation in defending the Ryukyu and Bonin Islands in a
mutual defense treaty.
Prime Minister Kishi has directed the
Foreign Ministry to make an intensive study of US-Japanese
problems in preparation for a visit to Washington. Mac-
Arthur thinks recent Japanese press publicity on the sub-
ject may have been a "trial balloon" to determine US reac-
tion to raising the issue.
Comment
The Japanese have been vague concern-
ing specific revisions of the treaty, but
there are indications they desire a commitment from the
United States to defend Japan in return for base rights, and
the setting of a time limit and conditions whereby either
party may terminate the pact.
Recent Diet debates involving the sensi-
tive nuclear weapons issue suggest that the Japanese will
also seek a voice in determining the strength, the type of
armament and employment of American forces stationed in
Japan. Kishi, who hopes to visit Washington in May or June,
may also seek a timetable for the withdrawal of American
ground forces from Japan.
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V
7. SOVIET EAST GERMAN TROOP AGREEMENT
Comment on:
The Soviet-East German status of forces
treaty signed in East Berlin on 12 March
pays lip service to East Germany's sov-
ereignty but fails to give East Germany
the legal and jurisdictional safeguards
accorded Poland in an agreement last December. Superfi-
cially the two agreements are similar.
Under Article 18, the Soviet high com-
mand in East Germany is empowered to "take measures to
eliminate" any "threat to the security of Soviet troops;' al-
lowing for "appropriate consultations" with the East German
government. This in effect reserves to the USSR unlimited
powers in East Germany. While changes in strength and dis-
position of Soviet troops in East Germany "shall be the sub-
ject of consultations" between the two governments, the prac-
tical effect of the ruling will be that the East German
government will merely be informed of Soviet actions. The
Polish-Soviet agreement gave Warsaw the right to withhold
its consent on troop movements.
"As a general rule;' East Germany will
have legal jurisdiction over Soviet personnel in cases involv-
ing violations of East German laws. Either Soviet or East
German authorities, however, may request transfers of
jurisdiction, a provision which could effectively remove So-
viet personnel from any East German authority.
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-CONFIDENTIAL
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45b, kI1E1
ANNEX
Watch Report 345, 14 March
of the
Intelligence Advisory Committee
Conclusions on Indications of Hostilities
11 ;
On the basis of findings by its Watch Committee, the
Intelligence Advisory Committee concludes that:
A. No Sino-Soviet bloc country intends to initiate hostili-
ties against the continental US or its possessions in
the immediate future.
B. No Sino-Soviet bloc country intends to initiate hostili-
ties against US forces abroad, US allies or areas
peripheral to the Orbit in the immediate future.
C. A deliberate initiation of hostilities in the Middle East
by the Arab states is improbable in the immediate fu-
ture. Israel may move to reoccupy all or part of the
Gaza strip if faced with provocations, such as the re-
newal of large-scale fedayeen raids, the entry of Egyp-
tian military units, the abrupt restoration of full Egyp-
tian administration, or the early withdrawal of UN
forces. Other unsettled issues and tensions in the
Middle East also constitute possibilities for violence.
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