NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029000010044-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 20, 2016
• Document Release Date: September 22, 2006
• Sequence Number: 44
• Publication Date: June 25, 1976
• Content Type: REPORT

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0 NATIONAL INTELLIGENCE DAILY CABLE
Friday June 25, 1976 CI NIDC 76-149C 0
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NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions 0
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 25X1 Approved For Release 2007/03/06 : CIA-RDP79T00975AO29000010044-1
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 National Intelligence Daily Cable for Friday, June 25, 1976.
25X1
25X1 The NID Cable is for the purpose of informing
senior US officials.
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The extreme right-wing Christian militias yesterday
intensified further their attacks on Tall Zatar and Jisr al-
Basha Palestinian camps in east Beirut. The offensive yesterday
included armored assaults and ground fighting in addition to the
usual heavy shelling.
//The Christians have acknowledged suffering
heavy casualties.// They express determination to continue their
assault, however, until fedayeen and leftist forces in the camps
are no longer able to prevent movement from Christian enclaves
in Beirut to more secure Christian areas northeast of the city.
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Although the several small Christian groups involved
in this assault have surrounded the camps and pushed back Pales-
tinian defenders in peripheral areas, they are not likely to
achieve their full objective unless the larger Phalanges Party
militia becomes heavily involved.
The Phalangists so far have shelled the camps, but
have not joined in the ground fighting.
Fighting spread yesterday to all sections of the capi-
tal except, ironically, the airport. In that area, where the
heavy fighting centered last week, the Palestinians and Syrians
are pushing ahead with implementation of the cease-fire negoti-
ated by Libyan Prime Minister Jallud.
I ISome of these Syrian troops reportedly are returning
to Syria, while others may remain in Lebanon. According to press
reports, some of the Syrian forces that were withdrawn from
Beirut airport on Wednesday have taken up positions near Sidon.
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Libyan Prime Minister Jallud on Wednesday succeeded
in arranging a meeting of leaders of all principal fedayeen
groups. Although nothing concrete was accomplished, the session
did represent at least a symbolic reconciliation of the inde-
pendent and Syrian-controlled organizations.
The prime ministers of Egypt and Syria meeting in Ri-
yadh yesterday appear to have made some progress toward a for-
mula for resolving their governments' differences, but the gen-
eral and largely superficial communique issued after the meet-
ing indicates that a lasting reconciliation is highly unlikely.
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The two sides seem to have skirted the fundamental
issues that divide them, leaving these for later consideration
by foreign ministers Fahmi and Khaddam. The communique declared
that a joint military-political committee under the foreign min-
isters' guidance will be formed to "define the strategic requi-
sites" for the liberation of territories under Israeli occupa-
tion.
This formulation suggests that Cairo avoided discus-
sion at Riyadh of the second Sinai agreement but that it will
have to face the issue if the military-political committee ever
convenes.
The communique's reference to "strategic requisites"
that must still be coordinated is an implicit recognition that
the two sides are far apart on their basic approach to negoti-
ations with Israel.
The military-political committee may have trouble
getting off the ground. No timetable was mentioned for its meet-
ings, and similar committees established in the past have accom-
plished little. A commission set up at the vice presidential
level in April 1975 held only one meeting before relations
soured again.
I I Vesting the leadership of this committee in the hands
o a mi and Khaddam is almost a guarantee of failure. The two
men are long-time antagonists whose personal abrasiveness has
seldom permitted agreement or even amicable discussion.
The communique looks forward to a summit meeting in
Riyadh among presidents Sadat and Asa.d and King Khalid, but
this is predicated on prior agreement by the foreign ministers'
committee, which is to present its recommendations to the pres-
idents before any summit.
The Riyadh meeting also issued a relatively innocuous
statement on the Lebanon situation that contains enough to sat-
isfy both Egypt and Syria without requiring concessions from
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//The Soviets reportedly delivered four
MIG-21 engines to Egypt in May, and are said to have agreed to
accept immediately ten Egyptian MIG-21 engines for overhaul in
the USSR. Moscow also is reported to be delivering some jeeps,
trucks, and other civilian types of equipment in the armed
forces.//
//The four engines delivered to Egypt proba-
y are ones Cairo sent to the USSR for repair before the So-
viets stopped overhauling Egyptian engines in late January.
Some 50 Egyptian MIG engines reportedly have been in Moscow
for repair since early 1975.//
//This information is generally consistent
with recent statements by Soviet Ambassador Polyakov that Mos-
cow had decided to make sporadic shipments of small quantities
of military-related equipment to Egypt. The ambassador said
this symbolic gesture was designed to demonstrate that the door
to a resumption of a military relationship is not irrevocably
closed.//
//It seems unlikely that Moscow intends for now
to expand military assistance beyond these limited gestures.
A Soviet official in Cairo familiar with the Egyptian spare
parts problem recently told the US defense attache that Moscow
has no intention of resuming a regular flow of spare parts.//
//The same official reported earlier that since
mid-1975 the number of Soviet military technicians in Egypt had
dropped by half, to about 180, and would continue to dwindle as
technical assistance contracts expire. He said that most remain-
ing personnel were working on MIG-23 aircraft and air defense
equipment, although their usefulness was questionable because
of the lack of spare parts.//
//The decline in the number of Soviet technicians
parallels the deterioration in the Soviet-Egyptian military
supply relationship in recent years. Moscow halted arms deliv-
eries to Cairo in April 1974 following strains produced after
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the Arab-Israeli war in 1973. Limited shipments of spare parts,
ammunition, and ground support equipment were resumed in August
1974, and 26 MIG-23 and 18 SU-20 fighters were delivered in the
first half of 1975. In mid-1975, Moscow cut off virtually all
military supplies.//
I //The Soviets have periodically suggested
their willingness to discuss the military equipment issue with
Cairo. Deputy Foreign Minister Kuznetsov reiterated this point
to the new Egyptian ambassador in Moscow only last week. Kuznet-
sov welcomed recent Egyptian initiatives to put Soviet-Egyptian
relations on a less antagonistic basis, and said Moscow was
"prepared to consider" various bilateral problems.//
//The overhauling of a dozen or so engines
cannot arrest the general decline in Egyptian air force combat
readiness. Nevertheless, Moscow's recent gestures will not go
unnoticed by an Egyptian military establishment that is becom-
ing increasingly dissatisfied with President Sadat's inability
to replace deteriorating Soviet hardware with advanced Western
_
weapons systems. F
I
Portuguese Prime Minister Azevedo's attending physi-
cians are unwilling to comment publicly on whether he will sur-
vive through the presidential, election on Sunday.
The national electoral commission has announced that
the election will proceed as scheduled unless Azevedo dies be-
fore the polls close.
I //The all-military Revolutionary Council has
reportedly agreed that the letter of the law must be followed
but is anxious to avoid the political problems that would re-
sult if the election is put off.//
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The campaign, which has slowed since Azevedo was
stricken, will officially end at midnight tonight, which is also
the deadline for withdrawing from the race.
An Azevedo aide told the US embassy yesterday that
staff assistants had been prepared to pull their candidate out
of the competition but could not. do so unless he personally
signed the form.
Interior Minister Almeida e Costa has been named in-
terim prime minister, but the question of who serves in the
position might be reopened if the election has to be resched-
uled. A move could develop to have Socialist leader Snares form
a government.
Both Eanes and Azevedo have said that, if elected,
they would designate Snares to head up a Socialist government.
The choice would be up to President Costa Gomes, however, who
continues to favor a national unity formulation that
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The French Communist Party has stepped up its efforts
to convince voters that it is worthy of participating in the
government, but--unlike the Italian Communist Party--with no
noticeable success. The major gains registered by the French
left over the last two years have been by the Socialists.
I I The Communists' failure is showing both in the party's
lagging recruitment drive and its sagging voter support. Member-
ship has not increased at all so far this year. The Communist
vote dropped by 1.5 percent in the March cantonal election from
the election in 1970.
Party leader Marchais invited Italian party chief
Berlinguer to address a rally in Paris on June 3, hoping to
benefit from close association with what many French voters re-
gard as Western Europe's most acceptable Communist Party.
I I The rally was poorly attended, and the contrast be-
tween t e presentations of the two leaders may well have rein-
forced French opinion that the only good Communist is an Ital-
ian one.
In a further effort to expand their appeal, the French
Communists have called for common action with the Gaullists on
a number of issues, such as defense and EC policy, on which the
two parties' nationalistic attitudes tend to converge. These
initiatives have, for the most part, been dismissed by the press
as mere talk.
I Efforts to gain better coverage for the party in the
oreign press have also gone astray. Marchais and the party's
foreign affairs specialist succeeded only in irritating corre-
spondents by refusing at a recent luncheon to discuss such
timely issues as the proposed European Communist Party Confer-
ence.
I IThe French Communists' difficulties with their liber-
alization campaign have caused problems in the party itself.
There are rumblings among party intellectuals, youth, and the
rank-and-file that the leadership is in danger of diluting the
party line to the point that it will no longer have a "legiti-
mate working class vocation"--a serious charge in Communist
circles.
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Marchais is the architect of the new line and may
well be vulnerable if he cannot produce results. He has no easy
choice, however. The shift back to a harder line to soothe party
members would accelerate the Communists' loss of voter support.
Polish Premier Jaroszewicz yesterday announced a
package of sharp food price increases that is almost certain
to anger Polish consumers.
The prices, which have been frozen since 1970, will
go up an average of 69 percent on meat, 100 percent on sugar,
and over 50 percent on butter and some cheese. Bread, flour,
and some milk will remain at their present prices.
I Jaroszewicz told the parliament that the increases
wi e me effective Monday, and that state stores, to prevent
hoarding and speculation in the interim, will limit sales of
items that will be boosted in price.
Also beginning Monday, workers will receive compensa-
tory wage increases. In order to ensure increased supplies,
farmers are to be paid significantly higher prices for their
products.
The extra compensation to workers will be greatest
for the lower income groups; that will not mollify the more
highly paid shipyard workers and miners who in the past have
been the most demanding.
The sharp price increases are designed to have an im-
pact on consumption. If the price rises had been much smaller,
Polish consumers would have been able to compensate largely by
lowering their high savings rate.
I As a result of party leader Gierek's liberal wage
policies, real wages have grown an average of 7 percent a year
since 1970. With a lack of attractive consumer goods and a short-
age of housing, Polish workers have funneled much of their wage
hikes into food and savings.
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//Two senior Polish officials advised US em-
assy o lcers on Tuesday that price increases were imminent.
One of the Poles also said that some people would be unhappy
but that the regime could handle any "trouble." He admitted
that there had been disturbances in recent months, explaining
that there are those who use any occurrence, natural or other-
wise, to increase tension.//
//The US embassy reports a recent, sudden flurry
of rumors a. out disturbances in Wroclaw, Szczecin, and Gdansk
and about a possible call-up of military reserves in anticipa-
tion of the price rises.//
the price hikes to see that there are additional supplies of
meat in the stores. The Poles, who will be unhappy with the
price increases, would be even more distressed if meat shortages
tion, excluding rice, is for a record 1,045 million tons, 6 per-
cent above the 1975-1.976 figure. This compares with the US De-
partment of Agriculture's latest estimate of 1,053 million tons.
The regime will probably make special efforts after
Our initial forecast of 1976-1977 world grain produc-
//A better Soviet harvest accounts for nearly
three-fourths of the increase, more than offsetting a smaller
West European crop.// In turn, global import demand should be
weaker, permitting small additions to stocks of major exporters
and helping ease the tight supply situation that has prevailed
since 1973.
//This early in the season, however, uncertainties
over water shortages in some major grain areas and Soviet buying
intentions will cloud grain market prospects over the next few
months.//
J We estimate world wheat production for 1976-1977 at
365 million tons, up 7 percent over 1975-1976, and about the
same as the Department of Agriculture's estimate of 371 million
tons. Consumption will rise less rapidly than production, de-
spite increased feed use in the USSR and Europe.
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We anticipate that global import demand for wheat
will be down 7 million tons from current demand, with most of
the decrease occurring in the Soviet Union, India, and Brazil.
Larger supplies in all the major exporting countries point to
strong competition during the coming year.
Foreign demand for US wheat next year is likely to
be abou 7.7 million tons, down from the Department of Agri-
culture's estimate of 32.4 million tons for 1975-1976 and the
smallest in five years. This low level will allow US carryover
stocks to increase 37 percent, to more than 20 million tons, by
July 1, 1977.
Although feedgrain supplies, especially corn, have
tightened in recent months, we expect some easing in the new
crop year beginning October 1. We forecast that world feedgrain
production in 1976-1977 will be up 7 percent, to 680 million
tons, due to larger US and Soviet harvests. The Department of
Agriculture predicts a record US corn crop of 162.1 million
tons, 15.6 million tons more than this year. //Our latest
forecast of Soviet grain prospects implies a 45-percent in-
crease in feedgrain output, including rye, over last year's
poor harvest.//
The recent strong import demand for corn is not
expected to continue into the coming marketing year. We estimate
global demand for corn imports will be down 8 percent from the
54.3 million tons traded in the current year, //including a 5-
million-ton cut in Soviet imports.//
I Drought conditions have cut our earlier forecast of
lower European Community corn imports; increased imports are
now forecast. We also estimate that Japan will boost corn im-
ports to support an expanding livestock program.
We predict foreign demand for US corn will drop 6.8
million tons in 1976-1977, to about 35.4 million tons. Using
the most recent Department of Agriculture estimates for produc-
tion and domestic use, this export volume will allow a stock
addition of 9.9 million tons, raising carryover stocks to 18.8
million tons by September 30, 1977.1 1 25X1
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I The long-delayed European Communist party conference
is scheduled to take place in East Berlin next Tuesday and
Wednesday. The dates were announced yesterday following an
abbreviated one-day session of the editorial commission, the
major preparatory body for the conference. The announcement was
made before the Central Committees of the participating parties
had had a chance to approve the final document.
The announcement said that the commission acted in a
"businesslike and comradely atmosphere." This formulation and
the shortness of the editorial commission's latest session sug-
gest that its members were unable to reach complete agreement
and decided to pass the problem on to their respective party
leaderships. A number of the parties have already indicated
they will not be represented in East Berlin by their party
leaders. If so, the Soviets may be reluctant to send General
Secretary Brezhnev.
I I The announcement came after 20 months of preparatory
talks involving representatives of 28 East and West European
communist parties. Preparations were prolonged mainly because
of differences over the content of the conference document.
I The announcement yesterday did not reveal any details
about the document. The Italian party's foreign policy chief,
however, recently discussed the draft's substance with an
Italian journalist.
I According to the newsman, who has consistently been
over y optimistic about the preparations, the document acknowl-
edges the autonomy of individual parties, including their right
to develop along national lines. It reportedly invokes the
ideals of Marx, Engels, and Lenin but avoids mentioning prole-
tarian internationalism.
I lAs matters now stand, additional differences between
Moscow and the independent-minded parties could still surface
at the conference. The more independent-minded parties can also
be expected to express their specific positions before the con-
ference convenes. The Soviets will do likewise.
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//At the June 27-28 economic conference in Puerto
Rico, leaders of the seven major developed countries will dis-
cuss world economic developments since the summit held at Ram-
bouillet, France, last November.//
//With prices still rising rapidly in most of the
seven countries, their representatives are expected to endorse
only noninflationary efforts to prolong the economic upturn.
They also will discuss strategy for dealing with the developing
states and, at least informally, will consider financial support
for the Italian economy.//
//The leaders may seek to give the multilateral
trade negotiations a boost and could review current interna-
tional monetary arrangements. Discussion of a concerted approach
to East-West trade is another possibility.//
//Most of the leaders expect little substantive
movement from the meeting but acknowledge its importance as
signaling a willingness to discuss the problems of their inter-
dependent economies. With most. of their governments on shaky
ground at home, they will want to convey the impression that
they are working effectively to find solutions to common eco-
nomic problems.//
//The summit continues to cause the four European
participants problems with the five smaller EC members, who
have protested that the four did not coordinate with them before
replying to the US invitation to meet in Puerto Rico.//
//A tentative agreement among the Nine allowing
the two senior EC officials to participate in the summit fell
apart when the French refused to accept the principle, backed
by the smaller EC members, that future summit meetings would
either be attended by all members or those invited would re-
frain from taking individual positions on matters under EC
competence.//
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//Assistance to Italy is another likely
topic. The Europeans will probably insist that any programs to
aid Italy be conditioned on specific economic and fiscal re-
forms. The Germans reportedly are "favorably disposed" to par-
ticipating in a broadly based international assistance program
but recognize that suitable commitments are not feasible at
//On monetary matters, the French--despite their
commitment to a major role for gold in the international mone-
tary system--reportedly will not ask that other governments
support its price. Giscard has expressed satisfaction with the
price established at the June IMF auction. The conference may
reaffirm the concept of floating exchange rates, with interven-
tion condoned only to counter disorderly market conditions.
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