CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A011200060001-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 20
• Document Creation Date: December 14, 2016
• Document Release Date: January 22, 2003
• Sequence Number: 1
• Publication Date: May 17, 1968
• Content Type: REPORT

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OUGIUL
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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
44
17 May 1968
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 SECRET
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No. 0158/68
17 May 1968
Central Intelligence Bulletin
CONTENTS
Vietnam: Situation report. (Page 1)
Czechoslovakia-USSR: Moscow is trying to reduce
public concern over its military pressures on
Prague. (Page 3)
Thailand-Cambodia: Thai-based dissidents are under
orders to curtail raids into Cambodia. (Page 5)
Lebanon: President Hilu is worried about Israeli
intentions. (Page 6 )
Italy: The center-left will almost certainly be
kept in power in elections. (Page 7)
Brazil-France: The Brazilians may let the French
set up a space tracking station. (Page 9)
Zambia-Czechoslovakia: Prague scheduled to explore
the possibilities of an arms sale to Lusaka (Page 10)
Brazil: Pending legislation could threaten foreign
companies with nationalization. (Page 11)
Uruguay:
The regime suffers second scandal within
a month.
(Page 12)
India: State elections (Page 13)
Belgium:
Continued cabinet crisis
(Page 13)
Guatemala:
Army-guerrilla clash
(Page 13)
Turkey: Anti-US campaign
(Page 14)
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Vietnam
South Vietnam: The enemy is stepping up the
military tempo in the central highlands.
A spate of mortar attacks and ground probes
hit allied outposts in Kontum Province for the sec-
ond straight day on 16 May. The attacks may be
intended partly to distract attention from enemy
movements in the vicinity of more important tar-
gets. From the current position of enemy units, it
appears that the most likely targets for any major
assaults are the Special Forces camps at Ben Het
and Polei Kleng in Kontum.
To the north in Quang Tri Province, the Com-
munists are showing renewed interest in the Khe
Sanh area. A small enemy unit has put up a stiff
fight against US Marine elements in the vicinity
during the past two days.
Although the recent Communist sallies have
lacked the steam of the Tet attacks, they have
helped keep the number of Viet Cong defectors under
the Chieu Hoi program in a continuing decline. Gov-
ernment statistics indicate that there were only
slightly over 3,500 during the first four months
of 1968 in contrast to over 14,000 during the same
period last year. One favorable note in the pic-
ture is the upsurge in 1968 in the number of enemy
officers among the military ralliers. They are now
coming in at more than double the rate last year.
On the political front, the National Assembly
is still grappling with legislation to strengthen
the government's posture against the Communists.
Recent action by the Upper House, however, appears
to have assured a further delay in final passage
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[of the general mobilization bill. The Upper House
wishes to consider a very different version of the
bill from that passed by the Lower House. The
Lower House version failed to include any penalties
for draft evasion, a serious loophole.
The issue of the Paris peace negotiations also
occupied the National Assembly on 14 May, as it was
debated for several hours in the Lower House. There
was sentiment against the talks and against US pol-
icy, but no formal action was taken on the issue.
Some of the deputies expressed concern over the
lack of South Vietnamese representation in the
talks at the present time.
North Vietnam: Recent photography
shows
that
rapid repairs are being made on several
major
in-
dustrial and power facilities above the
20th
par-
allel. A section of the Viet Tri paper
mill
was
seen in photography to be in operation for
the first time in over a year. The Haiphong cement
plant was in limited operation during late April,
while repairs were under way to the five main Hanoi-
Haiphong power plants. Currently seven of the nine
power plants in the area network are in partial op-
eration and generatin about 45 percent of their
former capacity.
tVap, J
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[Czechoslovakia-USSR: Moscow is trying to re-
duce public concern over its military pressures on
Prague, but Soviet troops remain on the Czechoslovak
frontiers.
The USSR, using the face-saving formula put
forward by the Czechoslovak Foreign Ministry last
week, stated on 16 May that joint Soviet-Polish
maneuvers were "taking place" in Poland's Silesian
Military District. The Soviet announcement differs
from a similar but earlier Polish release by adding
that the exercise was held in "accordance with a
plan" of the Warsaw Pact command.
The Soviet Army newspaper yesterday reported
an awards ceremony and other festivities in Raciborz,
Poland, in connection with the exercises, implying
that they were completed. The Czechoslovak press
service also announced that Soviet Marshal Grechko,
who attended the ceremonies in Raciborz, would ar-
rive in Prague today for an official visit.
There are no indications yet of the recall of
any Soviet units and Moscow is keeping up its sub-
rosa war of nerves. On 15 May the Soviet commander
in East Germany banned Allied Military Liaison Mis-
sion personnel from travel in a large area of south-
ern East Germany. The restricted area included a
portion contiguous to Silesia and the area in which
Soviet units are deployed along the East German -
Czechoslovak border.
Moscow apparently intends to keep military
units near Czechoslovakia's borders until it is more
certain that the Dubcek regime can control develop-
ments in Prague. The contradictory voices coming
out of official Prague probably have done little to
change Moscow's view that the future of the Czecho-
slovak party's leadership is still in doubt.
Prague remains calm. Czechoslovak party and
state officials have made conciliatory gestures to
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[Moscow, but also have reaffirmed that Czechoslovakia
will continue on its new domestic and foreign course.
Additional information on Premier Cernik's
interview on 14 May shows that, although he stated
that Prague's foreign policy is based on cooperation
with Moscow, he added that Czechoslovakia's relations
with its allies are based on equality and noninter-
ference. He stressed that Prague is "interested"
in cooperating economically with Western nations.
At the same press conference, Deputy Premier Husak
implied that additional political parties will be
allowed in Czechoslovakia.
One of the leading spokesmen of the liberals
in the party, presidium member and National Assembly
chairman Smrkovsky, said the Soviet leaders feared
Czechoslovak developments, and he warned that the
party will not permit any individual to use the de-
mocratization process for his own aims. Smrkovsky's
statement apparently was aimed primarily at the lib-
erals, and particularly the non-Communists in Czech-
oslovakia.
The East Germans meanwhile have continued their
subversive campaign aimed at reversing the liberal
trend in Czechoslovakia. The country's media have
kept up polemics with Prague, featuring a specious
story that US tanks and troops are in the Czechoslo-
vak capital.
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Thailand-Cambodia: Bangkok is apparentlyre-
evaluating its support for anti-Sihanouk Khmer Serei
dissidents.
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There are indications that the suspension was
part of a broader effort to scale down Khmer Serei
activities.
Bangkok's move may have been in response to
complaints from provincial officials who have been
concerned over the significant number of Thai ci-
vilian casualties caused by Cambodian reprisals.
The Thai are also undoubtedly frustrated by the lack
of progress the Khmer Serei have made since they,
began their operations from Thailand in late 1964.
The Thai have also had difficulty controlling Khmer
Serei elements and working out satisfactory arrange-
ments with South Vietnam, which has furnished many
of the Khmer Serei troops.
It is highly unlikely that Bangkok will com-
pletely forgo its Khmer Serei operations as long as
its deeply rooted animosity toward Sihanouk's,regime
persists. A significant lessening in support for
the dissidents, however, would remove a major irri-
tant between the two countries and could revive ef-
forts to reach a rapprochement.
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Lebanon: President Hilu is apprehensive about
Israeli intentions toward Lebanon.
Hilu believes that the Israeli shelling of a
Lebanese village on 12 May is part of an Israeli
plan to get control of the Litani River waters and
realign the border. He cites public statements
by Israeli political leaders to support his con-
tentions.
Israeli Minister of Defense Dayan declared at
the end of the June 1967 war that "Israel had ideal
borders with her Arab neighbors except for Lebanon."
Prime Minister Eshkol has commented on Lebanon's
"unproductive use of the Litani River waters," and
Foreign Minister Eban claimed that Lebanon declared
war on Israel "in the good old-fashioned way."
Lebanon, like the other Arab states, has never
signed a peace treaty with Israel, but stayed out
of the war last summer, issuing ambiguous state-
ments for domestic political effect. The Litani
River flows to the sea in southern Lebanon and does
not pass through Israeli territory, although it
could be diverted to add water to the Jordan valley.
Hilu, moreover, will find it increasingly dif-
ficult to prevent the transiting of Lebanon by Arab
terrorists operating from Syria. Lebanese author-
ities have attempted to prevent these incursions
but will be handicapped by popular pressure from
radical Lebanese groups. The internal political
situation in Lebanon in the wake of the recent
parliamentary elections complicates the problem.
Hilu's fears may be exaggerated, but if Syria in-
creases infiltration activities, Lebanon is likely
to become subject to more punitive Israeli attacks.
President Hilu is contemplating asking for
formal UN Security Council action on the problem.
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Italy: The ruling center-left alignment will
almost certainly be reconfirmed in power in the na-
tional elections on 19-20 May.
The coalition--Premier Moro's Christian Demo-
crats, the Unified Socialists, and the Republicans--
has made some progress in implementing its ambi-
tious legislative program since it came to power in
December 1963. Much remains undone, however, in
the modernization of the Italian state, especially
in such areas as administration, taxation, and ed-
ucation.
In economic matters, the government's accom-
plishments are a distinct asset. A downward trend
in the economy in 1963-64 has been reversed and
Italy has for the past two years been in the fore-
front of the European Community in economic growth.
The coalition may not be reconstituted in its
present form immediately after the election. If
the Socialists suffer a serious setback, they might
decide not to re-enter the cabinet, at least until
the party's congress next fall. Nevertheless, they
would almost certainly lend their parliamentary
support in the meantime to a new government.
The Communist Party, which won 25 percent of
the vote in the 1963 parliamentary elections, is
expected to lose some ground. An electoral setback,
no matter how small, would be a serious psycholog-
ical blow to the Communist leadership, for it would
be the first Communist loss in a national election
in the postwar period.
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ranee Proposes Space Tracking Station in Brazil
Proposed
trucking station
Fortaleza
~/t' ~~' ATigaas
Argentina
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Brazil-France: President Costa e Silva is
reportedly considering a French proposal to estab-
lish a space tracking station near Fortaleza in
the northeastern state of Ceara.
Brazilian press reports of early May indicate
that some French technicians may already be at the
site--which is suitably located for tracking satel-
lites launched from the French space center under
construction near Kourou, French Guiana.
The plan calls for the station
to operate under a two-year agreement; it is to have
a French administrator, but Brazilians can fill up
to two thirds of the technical positions. Brazil
not only would have the right to use the tracking
station at Ceara but would also gain access to the
French installations at Kourou.
The first satellite launching from French Guiana
is scheduled for the first half of 1969.
(Map)
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The Zambian Government,
However, backed o rom an approach to the Czecho-
slovaks about arms in late 1966, and is unlikely to
jump at a Czechoslovak offer at this time. Kaunda's
reluctance to date to deal with the Communists, how-
ever, might eventually be offset by Prague's lack
of identification in Zambia as a major participant
in the "cold war."
Last fall President Kaunda decided to beef up
his defense forces to guard against possible retal-
iation by neighboring white-ruled countries for
Lusaka's assistance to African insurgents. Subse-
quent approaches to Western governments for military
assistance have so far met with no success. Kaunda
seems committed to strengthening his defense forces,
and he may eventually be receptive to Communist aid.
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Brazil: Several US and other foreign compa-
niescouldbe threatened with nationalization by a
pending congressional bill, according to some in-
terpretations.
The so-called "national security municipali-
ties" bill would name some 68 towns and cities as
being "of interest to national security." Some
congressmen and reporters are speculating that
foreign companies in those areas would then have
to be nationalized because the constitution re-
quires industries in "areas indispensable to na-
tional security" to have predominantly Brazilian
capital.
This interpretation is likely to embarrass the
government, which had intended the bill to ensure
its political control in the affected municipali-
ties and probably was not interested in the indus-
try ownership question at all. Such an issue could
attract support from nationalists always eager to
halt foreign economic "intervention," but many
congressmen will continue to oppose the proposed
legislation as another expansion of executive
authority. The administration may well choose to
amend or clarify the bill.
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Uruguay: A congressional investigation of the
recent devaluation promises to embarrass the Pacheco
administration.
The President is dissatisfied with a Central
Bank statistical report which fails to answer Sen-
ate charges that a high official leaked advance
word of the devaluation to foreign exchange specu-
lators. Bank President Iglesias, who has borne the
brunt of criticism for the devaluation, opposes the
investigation, which he fears will undermine Uru-
guay's credit standing abroad.
This is the second time in less than a month
that the Uruguayan Government has been hit by
scandal. Labor Minister Acosta y Lara was forced
to resign when he was accused of using his position
for private gain.
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India: The Congress Party has won a clear ma-
jority in the Haryana state assembly elections--the
first in a series of three in states captured by
non-Congress coalitions after the 1967 general elec-
tions. Congress conducted an intensive campaign
and undoubtedly capitalized on the shabby record of
coalition rule after it was ousted from power in
Haryana early last year. The victory should boost
morale within the Congress organization as it pre-
pares for the more important elections in Uttar
Pradesh and West Bengal.
Belgium: A solution to the prolonged cabinet
crisis appears remote. The Liberal Party has be-
come so divided on the linguistic issue that it is
expected to refuse to join in a coalition with
caretaker Prime Minister Vanden Boeynants' Social
Christians. If Vanden Boeynants is unable to reach
an agreement with the Socialists, who oppose many
of his party's programs, he may try to form a mi-
nority government or a "government of experts" drawn
from all parties. Even if such a government could
be formed, it could scarcely deal effectively with
Belgium's problems.
Guatemala: The army claims to have killed
six guerrillas in the northeastern Department of
Zacapa early this week when it surprised an eight-
man group from the Communist Rebel Armed Forces
(FAR) reportedly on a mission to receive a large
arms shipment from Honduras. Four of the six killed
were said to be important FAR leaders. This was the
first such encounter in the area for over a year.
(continued)
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Turkey: The new propaganda attack launched by
leftist students against the US and NATO on 13-14
May is a continuation of a long-standing campaign
by the Marxist Turkish Labor Party to force Ankara
to withdraw from NATO and to oust the US from Tur-
key. On 14 May leftist students provoked a clash
that resulted in 106 student arrests.
Military and political leaders, however, stand
firm in their support of NATO and Turkey's Western
orientation, although some of the more nationalist
minded are seeking new ways to demonstrate Turkey's
independence within the Western alliance.
I
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The United States Intelligence Board, on 16
May 1968, approved the following national intelli-
gence estimates:
NIE 11-6-67
Memorandum to holders of
"Soviet Strategy and Inten-
tions in the Mediterranean
Basin"
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SNIE 11-9-68
"Soviet Interests and Activ-
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SNIE 14.2-68
"Likelihood of Major Hostil-
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Secret
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