NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029100010038-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: May 15, 2006
• Sequence Number: 38
• Publication Date: July 23, 1976
• Content Type: REPORT

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Friday July 23, 1976 CI NIDC 76-172C
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National Intelligence Daily Cable for Friday, July 23, 1976.
25X1
25X1 The NID Cable is tor the purpose o intorming
senior otticials.
LEBANON: Situation Report
USSR-LEBANON: Soviet Views
KENYA-UGANDA: Relations
TURKEY-GREECE: Sismik I May Sail
RHODESIA: Guerrilla Activity
WESTERN SAHARA: Moroccan Casualties Mount
ITALY: Socialist Leadership Meeting
UK: Spending Cuts Announced
FRANCE: Franc Declines
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LEBANON: Situation Report
The Palestinian delegation in Damascus met yesterday
with Syrian Foreign Minister Khaddam and other Syrian officials.
According to unconfirmed press reports out of Cairo, Palestine
Liberation Organization chief Yasir Arafat has flown to Damascus
to join the talks.
I he delegation apparently carried a proposed agenda
Tor e al discussions between Arafat and Syrian President
Asad. The agenda included the establishment of a cease-fire un-
der Arab League auspices and the regulation of Palestinian ac-
tivity in Lebanon in accordance with the restrictive Cairo ac-
cords.
Palestinian leaders, in private, have long held that
the Cairo agreements--never implemented--are out of date and
have to be renegotiated.
The Syrians frequently single out the enforcement of
the Cairo accords as a primary condition to be met before they
agree to withdraw.
Its inclusion on the Palestinian agenda probably rep-
resents a recognition by the Palestinians that the matter must
be aired in any talks; they may intend it as a sign to Damascus
that they are approaching the possibility of negotiations seri-
ously.
I Palestinian and leftist leaders reportedly do not ex-
pect muc to come of the talks. They point to:
--The hard Syrian line enunciated by Asad in a speech on
Tuesday.
--Continuing Christian and Syrian military pressure.
--The apparent acquiescence of other Arab states in Syria's
strategy.
--What they see as Syrian efforts to undermine Palestinian-
leftist unity.
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The delegation's willingness to attend the meeting at
all is probably a measure of its growing sense of desperation.
The leftist radio station is playing up the story that
the US is supplying arms to the Christians by way of Israel--a
charge that is bound to reinforce fears that the US is master-
minding an anticipated Christian-Syrian attack on west Beirut.
The Christian station is asking diplomatic missions
to move "temporarily" to the eastern sector of the city.
The leftists have reacted by moving men and military
equipment into Beirut's coastal district. The US embassy--which
is in that area--notes that vehicle-mounted heavy machine guns
and one vehicle-mounted recoilless rifle have been stationed
along the road near the shore, beginning at the Hotel Riviera
and continuing approximately every hundred yards.
I I Heavily armed foot patrols have been instituted, and
increased numbers of troops are in evidence. The embassy as-
sumes these movements are related to widespread rumors of an
imminent sea attack, a logical move in the event of a Christian
assault.
I _j The Palestinians seem to have become convinced that
by delaying a new evacuation of US citizens from the area, they
will stave off the Christian-Syrian attack they are expecting.
The obvious edginess of the Palestinians and leftists
who are bracing for an attack on west Beirut poses an additional
hazard to US attempts to arrange an evacuation. If the talks in
Damascus go badly for the Palestinians, their sense of despera-
tion will be increased, and the possibility of some kind of rash
action will grow.
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I I The 150-man Saudi Arabian contingent of the Arab
League security force is attempting to establish a buffer zone
between the two sides of the city. The force remained in posi-
tion yesterday, although it again came under sniper fire and re-
portedly suffered several wounded. Each side is pointing to the
other as the source of the fire.
The fighting continues at Tall Zatar, but attention
is beginning to shift to the Shia Muslim enclave of Nabaa, which
has been shelled by the Christians for the last several days.
According to one report, the Armenians--who have tried
to stay out of the sectarian conflict, but who live just north
of the Nabaa area--have blockaded access routes to the enclave
and told leftists and Palestinians to get out within four days.
The Armenians have already been involved in clashes with the
leftists.
I The country beyond Beirut was relatively quiet yester-
ay. The Christian offensive is continuing--with some Syrian
help--in the mountains east of Beirut.
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Yevgeny Pyrlin, deputy head of the Near East division
o e Soviet foreign ministry, shed some additional light on
Soviet views of the Middle East situation in a talk yesterday
with a US embassy officer in Moscow.
Pyrlin said the USSR strongly believes that the Syr-
ians should withdraw from Lebanon, adding that this could be
accomplished "perhaps with some conditions." While he did not
spell these out, he indicated that the Syrians would likely ac-
cept only a partial withdrawal or perhaps a "cordon sanitaire"
along the Syrian border.
Despite strong differences over Lebanon, there has
been no "spectacular" change in Soviet-Syrian relations, Pyrlin
insisted. Asked about the Soviet supply of military equipment
to Syria, Pyrlin replied, "as far as I know, all military agree-
ments are being fulfilled." He probably would not have said
otherwise, in any event.
Pyrlin expressed great unhappiness over what he sees
as the threatened destruction of the Palestinian movement. He
blamed the Palestinians' plight equally on the current crisis
in Lebanon and on the long-standing divisions within the Pales-
tine Liberation Organization. A visit by Yasir Arafat to Moscow
had been talked about and might be useful, he said, but Arafat
cannot leave the Middle East given the complexities of the pre-
sent situation.
Pyrlin said he saw no prospect for the revival of the
Geneva talks until after the US election. When questioned fur-
ther, he said that there was no real prospect of convening the
talks until the Palestinians "get their house in order" and
that this will not take place until the crisis is resolved in
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I IFinally, Pyrlin asked about the reduction of the US
embassy staff in Beirut and said that the Soviet embassy there
was being cut, as of yesterday, from 40 to about 15. He noted
that they were fortunate that their embassy has an independent
water supply inside the compound.
In general, Pyrlin seemed to feel that the situation
in Lebanon was out of Soviet--and perhaps anyone's--control. He
used the words "difficult" and "complicated" in almost every
specific situation he discussed.
His near despair at the plight of the Palestinian
movement was evident, but other than admitting serious Soviet
differences with the Syrians over the intervention, he did not
indicate the manner in which the USSR was trying to press Syria
to withdraw.
KENYA-UGANDA: Relations 25X1
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In public, however, Amin has adopted a more concilia-
tory a itude toward Nairobi in recent days. The Ugandan leader
this week has repeatedly disavowed any hostile intentions to-
ward Kenya, most notably in a telegram to President Kenyatta.
The Kenyans, for their part, recognize that
Amin's military capabilities have been hurt by the economic
sanctions and the apparent decline in morale among his troops.
//The Kenyans probably reason that Amin's
change to a conciliatory attitude--like similar mood shifts
in the past--will be short-lived and followed by more hostile
words, especially if he is helped in some way by Arab states.//
The Kenyans also are concerned about reports that
Libya has sent Mirages and trocps to Uganda. We still cannot
confirm these reports, but a Libyan official told journalists
in Kuwait last Sunday that Tripoli has provided "war planes"
to Kampala and "will not stand silent if Uganda is exposed to
an attack."
The Libyans announced on Wednesday that they will
provide Uganda with petroleum products, but it is unclear what
supply route they will use. Amin apparently has asked neighbor-
ing Tanzania for use of the port of Dar es Salaam.
Tanzanian President Nyerere, long a target of Amin's
verbal attacks, will be far from eager to agree to such an ar-
rangement. He has long regarded Amin as a threat and probably
is taking comfort in Uganda's weakened position.
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I In an effort to offset the loss of its fuel supplies,
Uganda reportedly has been commandeering petroleum bound from
Kenya to neighboring Rwanda, causing serious economic disloca-
tions in the latter country.
TURKEY-GREECE: Sismik I May Sail
Turkish Prime Minister Demirel has indicated that the
Turkish research vessel Sismik I could sail for the Aegean as
early as today.
The ship reportedly completed its sea trials success-
fully, and yesterday Demirel told reporters that the transfer
of the vessel to the ministry of energy and natural resources
would be official today. He said the ship "could be regarded"
at that time as having sailed.
According to press reports, the Turkish navy has im-
posed restrictions on navigation and aviation at the Aegean Sea
end of the Dardanelles for the period July 28 to 30.
I There is no confirmation of press reports that some
Greek forces are on alert, although Athens is expected to have
some units in a heightened state of readiness when the Turkish
ship enters the Aegean.
Forces on both sides reportedly will be under orders
to avoid any provocative actions.
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RHODESIA: Guerrilla Activity
Nationalist guerrillas have for the first time car-
reed out an attack along the main highway in western Rhodesia.
Press reports indicate that the incident took place some 130
kilometers (80 miles) southeast of Victoria Falls.
//The incident may signal more extensive guerrilla
activities in northwestern Rhodesia, as threatened recently by
Zambian President Kaunda. There have been several reports of
guerrilla infiltrations into the area from Zambia. Guerrillas
have already begun small-scale activity along the Botswanan bor-
der.//
//If guerrilla attacks continue on the Victoria
a s ig way, they could force the Rhodesians to begin a de-
fense convoy system like that already in use on the main high-
ways in the southeast. This would further stretch the manpower
of Rhodesia's security forces.//
WESTERN SAHARA: Moroccan Casualties
Morocco's inability to react quickly has contributed
to the success of scattered hit-and-run guerrilla attacks. Rabat
continues to rely on extensive sweep-and-clear operations, which
have proved largely ineffective.
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The continuing guerrilla harassment may force the
Moroccans to adopt more aggressive tactics and to use small
mobile patrols to seek out the guerrillas before they launch an
attack.
I I For its part, the Front is playing up exaggerated ac-
counts in the Algerian media of its military successes as it
prepares for a new effort on the diplomatic front.
With Algerian diplomatic support, the Polisario Front
opes to reopen the Saharan problem in such international forums
as the nonaligned summit in Sri Lanka next month and the UN
General Assembly session this fall. A special. Organization of 25X1
African Unity summit on Western Sahara has also been proposed
for before the end of the year. 25X1,
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ITALY: Socialist Leadership Meeting
The Italian Socialist. Party leadership is meeting to-
day to formulate an official position on the proposed government
program that prime minister - designate Andreotti discussed with
the party yesterday.
After the meeting, a Socialist spokesman hinted that
the party would agree to abstain in a parliamentary vote of con-
fidence--a development that could make it possible for Andreotti
to form a temporary Christian Democratic minority government.
There are also indications that the Socialists may try
to persuade the Communists to join them in abstaining in a con-
fidence vote on an Andreotti government. Communist abstention
would provide a face-saving device for the Socialists, who have
insisted all along that they would not cooperate with the Chris-
tian Democrats unless the Communists were involved in some way
with the government.
It would also enable the Socialists to claim that they
are no more responsible than the Communists for the government's
action.
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The Communists have been taking a wait-and-see atti-
tude toward Andreotti's effort, refusing to take a position un-
til he settles on a specific government formula.
UK: Spending Cuts Announced
//British Chancellor of the Exchequer Denis Healey
yesterday announced $1.8 billion in public-sector spending cuts
for the fiscal year beginning April 1, 1977.//
I //The proposed cuts, along with $1.2 billion in
revenue from a 2-percent increase in employers' contributions
to the national insurance program, should meet any require-
ments the International Monetary Fund might put on new aid to
the UK.//
//With more than $1 billion of the $5.3 billion
credit the UK received from the Group of Ten already dissipated
in support of the pound, a December borrowing from the IMF to
repay the Group of Ten is beginning to look increasingly likely.//
//The measures prompted little reaction on the
foreign exchange market. In London the pound gained slightly
with Bank of England support. The government's action may not
give sterling the boost that London hoped for because the cuts
concentrate as much on investment as on reductions in social
programs.//
//Included in the spending cuts are:
--A $178-million cut in the defense budget.
--A $280-million reduction in the investment program of the
nationalized industries.
--A $155-million reduction in road and transportation allo-
cations.
--A $187-million drop in programs for trade, industry, and
employment.
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--A $142-million cut in food subsidies.
--A $422-million reduction in housing, health, and social
security spending.//
//Healey's measures are a step toward reducing in-
flation. They should cut public-sector borrowing from an esti-
mated $20.5 billion in this fiscal year to $16 billion in the
next. The latter amount would represent 6 percent of national
output, compared with 9 percent forecast for this fiscal year
and 10 percent last year.//
//By prevailing on the trade unions to go along
with these budget cuts, Prime Minister Callaghan will have used
up much of his political capital with the union leaders.//
//If the Labor government eventually is forced by
a slide in sterling to consider additional cuts in public spend-
ing, Callaghan will have to show strong improvement in unemploy-
ment statistics to persuade the unions to continue pport for
his economic policies.
The French franc closed yesterday at 4.92 to the dol-
lar, the lowest closing rate for the franc since January 1973.
The franc has fallen 2.6 percent in the last week and over 10
percent since the beginning of the year.
The franc's fall came despite a Bank of France an-
nouncement of a rise in the bank rate--the rate at which it re-
discounts private banks' bills and other short-term paper--from
8 percent to 9.5 percent. This unusually large hike portends a
higher interest rate structure in France, which should help
strengthen the French currency. French authorities made little
or no attempt at market intervention to stop the franc's latest
fall.
Before shifting to a policy of interest rate increases,
e Ban of France reportedly spent well over $400 million on
recent intervention to moderate the franc's decline. French of-
ficials apparently were not averse to a franc depreciation to a
rate around five francs to the dollar during the second half of
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