CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A014200030001-0
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: December 15, 2016
• Document Release Date: January 29, 2004
• Sequence Number: 1
• Publication Date: July 23, 1969
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
,90
23 July 1969
State Department review completed
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No. 0175/69
23 July 1969
Central Intelligence Bulletin
CONTENTS
South Vietnam: Situation report. (Page 1)
Spain: Franco's naming of a successor has not
changed the basic political situation. (Page 2)
Israel-Egypt: The bellicose actions of the two
countries have led to the heaviest fighting since
the 1967 war. (Page 3)
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El Salvador - Honduras: El Salvador's failure to
withdraw its troops could lead to a resumption of
hostilities. (Page 5)
Nordic Economic Union: A draft treaty has been pre-
sented to the respective governments. (Page 6)
Czechoslovakia: Economic problems (Page 7)
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E South Vietnam: Ground fighting was limited to
small-scale clashes between allied and Communist
forces in widespread sectors of the country on 21-22
July.
The Communists are apparently beefing up their
forces in southern south Vietnam by shuttling North
Vietnamese infiltrators directly to the delta prov-
inces of IV Corps.. Preliminary interrogation of
two prisoners captured earlier this month near the
Cambodian border in Kien Tuong Province reveals that
both were members of the same infiltration group
which was apparently sent intact to the delta from
North Vietnam.
There have been numerous reports of difficulties
encountered by the Viet Cong main force units in the
delta provinces in securing sufficient replacements
for losses sustained in battle. Small numbers of
North Vietnamese fillers, consisting largely of ex-
perienced cadre, have previously been sent to IV
Corps, but this is the first known instance of the
introduction of large numbers of North Vietnamese
personnel sent directly from North Vietnam as re-
placements. It is possible that additional North
Vietnamese forces may be identified in IV Corps;
recent reports have alluded to an increased enemy
capability in the delta provinces of South Vietnam.
23 Jul 69 Central Intelligence Bulletin
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SECRET
Spain: General Franco's naming yesterday of
Prince Juan Carlos as king-designate has ended the
long guessing game over who will succeed Franco,
but the basic political situation remains unchanged.
Under the constitution,. Franco may continue as
chief of state and chief of government for life.
Except in the unlikely event of Franco's suddenly
stepping down, Prince Juan Carlos will not become
king until the general's death or incapacitation.
Because Franco also has the power to revoke the
designation, he can keep the 31-year-old prince un-
der control. In addition, the prince will have to
take an oath to uphold Franco's twelve Principles
of the National Movement and the six fundamental
laws which institutionalize the present system of
government.
In choosing Prince Juan Carlos, Franco passed
over the chief pretender Don Juan, father of the
prince and son of the last king, Alfonso XIII. Don
Juan apparently is not going to contest the decision
at this time. He reportedly is angry, however, and
his chief adviser has indicated deep disappointment
at the "installation" as opposed to the "restoration"
of the monarchy. Most monarchists are resigned to
the decision and somewhat assuaged by the govern-
ment's commitment to the monarchical form.
Franco also has the power to name his replace-
ment as chief of government--technically from three
nominations made by the Council of the Realm, but
most informed observers do not expect him to do so
now.
Initial reactions of the power groups support-
ing the government and of the general public have
been positive. They see the choice as providing
for continuity with careful control on political
evolution and as precluding a fight at the time of
23 Jul 69 Central Intelligence Bulletin
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Israel-Egypt-. The increasingly bellicose actions
of boiIsrael and Egypt have led to the heaviest
fighting since the end of the 1967 war.
Israel's attack on an island at the southern end
of the Suez Canal on 20 July is its largest commando
action to date, and the recent attacks on Egyptian
artillery positions and SAM sites mark the first time
the Israelis have bombed Egyptian territory since
1967. In the face of increasing Egyptian provoca-
tions, the Israelis have stated that they intend to
"use whatever means are appropriate" in an effort
to convince the Egyptians of Israel's military su-
periority.
The risin pace of action is reflected in air-
craft losses.
Egyptian aggressiveness can be traced in part
to the substantial resupply, retraining, and reor-
ganization of the Egyptian armed forces and to the
improvement in morale resulting from the series of
successful commando raids and artillery strikes ini-
tiated by Egypt. The losses suffered by Egypt, how-
ever, could result in at least a temporary curtail-
ment of Egyptian commando raids across the Suez Canal.
The Cairo press meanwhile has been playing up
the recent clashes as a victory for Egypt,, and Nasir
can be expected to highlight the victory theme in
his speech today marking the anniversary of the rev-
olution which brought him to power in 1952. Israel's
tactics do not appear to have had any appreciable
psychological effect on the Egyptian masses. They
know enough to discount their own government's claims
of losses inflicted on the Israelis but can be ex-
pected to gain some satisfaction from the Israeli
admissions of casualties and lost aircraft.
Central Intelligence Bulletin
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I El Salvador - Honduras: El Salvador's failure
to withdraw its troops by midnight yesterday in com-
pliance with the OAS deadline could lead to a resump-
tion of hostilities.
OAS members view Salvadoran defiance with serious
concern, and seem prepared to seek stronger measures
to effect the withdrawal. The OAS Council has the
option of convoking a meeting of foreign ministers
to consult on application of "all other necessary
measures to re-establish or maintain inter-American
peace and security" as provided by the terms of the
Rio Treaty.
Meanwhile, US officials in Tegucigalpa report
that the Honduran Government may be hard pressed to
restrain its people from taking retaliatory actions
against Salvadoran citizens, including those interned
during the early stage of the conflict. This danger
would increase if the fighting is resumed. The Hon-
durans, at this point, feel that they have done all
that is possible to conform to OAS resolutions, with
no reciprocity on the part of El Salvador.
Both of the neighboring governments of Guatemala
and Nicaragua have indicated concern that their own
vital internal interests are adversely affected by con-
tinuation of the dispute, and believe that El Salva-
dor should be prevented from consolidating territory
taken by force from Honduras.
There are continuing reports that El Salvador
is acquiring aircraft from various private foreign
sources, including some in the US. If the reports
are true, El Salvador's already strong military po-
sition vis-a-vis Honduras will be strengthened.
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23 Jul 69 Central Intelligence Bulletin
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Nordic Economic Union: A draft treaty embody-
ing the principles for a Nordic Economic Union was
presented to the governments of Denmark, Norway,
Sweden, and Finland on 17 July.
The committee of experts which submitted the
proposal reached agreement on issues affecting eco-
nomic, commercial, shipping, energy, and labor pol-
icies, as well as capita]. movements. The experts
did not, however, go beyond the vague wording of
the governments' political guidance, and they left
unresolved such key issues as a customs union and
agricultural, fisheries, and finance and investment
policies. The committee did reach tentative agree-
ment for initial steps in these areas, however, and
suggested that negotiations be continued at a later
date. The various proposals for resolving these
issues are to be appended to the draft for further
consideration by the respective governments.
Initial reaction in Scandinavia has been guard-
edly optimistic, with all. parties stressing that
this is only a good first step toward further inte-
gration. The Danes and. Norwegians apparently think
that the proposals are sufficiently innocuous not
to complicate their approaches to the European Com-
munities but can still satisfy public demand for a
Nordic "solution." The Swedes are somewhat disap-
pointed that the committee failed to come up with
more comprehensive proposals, but they believe that
even a limited binding together of the Nordic coun-
tries will be to their mutual advantage when deal-
ing with the Communities.
Further talks on the proposals are not expected
before late September, and the governments will prob-
ably not present the draft to their respective par-
liaments until late this year or early 1970.
Central Intelligence Bulletin
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Czechoslovakia: Prague has openly acknowledged
that t e supply of foods and consumer goods has de-
teriorated, but has not outlined its plans to correct
the situation. The government recently disclosed the
continued shortage of meat and eggs as well as the in-
ability of producers of consumer goods to satisfy in-
creased demand. During the first five months of this
year, inventories were reduced inasmuch as retail
sales rose 13 percent while supplies to the retail
trade network increased by only nine percent. Pre-
mier Cernik is reported to be under heavy pressure
from other government officials to improve the gov-
ernment's image in the eyes of the disillusioned pop-
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23 Jul 69 Central Intelligence Bulletin 7
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